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SECOND DIVISION [G.R. No. 119602. October 6, 2000] WILDVALLEY SHIPPING CO., LTD. petitioner, vs.

COURT OF APPEALS and PHILIPPINE PRESIDENT LINES INC., respondents. DECISION


BUENA, J.:

This is a petition for review on certiorari seeking to set aside the decision of the Court of Appeals which reversed the decision of the lower court in CA-G.R. CV No. 36821, entitled "Wildvalley Shipping Co., Ltd., plaintiff-appellant, versus Philippine President Lines, Inc., defendant-appellant." The antecedent facts of the case are as follows: Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore. Upon the completion of the loading and when the vessel was ready to leave port, Mr. Ezzar del Valle Solarzano Vasquez, an official pilot of Venezuela, was designated by the harbour authorities in Puerto Ordaz to navigate the Philippine Roxas through the Orinoco River. He was asked to pilot the said vessel on February 11, 1988 boarding it that night at 11:00 p.m. The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge together with the pilot (Vasquez), the vessel's third mate (then the officer on watch), and a helmsman when the vessel left the port at 1:40 a.m. on February 12, 1988. Captain Colon left the bridge when the vessel was under way. The Philippine Roxas experienced some vibrations when it entered the San Roque Channel at mile 172. The vessel proceeded on its way, with the pilot assuring the watch officer that the vibration was a result of the shallowness of the channel. Between mile 158 and 157, the vessel again experienced some vibrations. These occurred at 4:12 a.m. It was then that the watch officer called the master to the bridge. The master (captain) checked the position of the vessel and verified that it was in the centre of the channel. He then went to confirm, or set down, the position of the vessel on the chart. He ordered Simplicio A. Monis, Chief Officer of the President Roxas, to check all the double bottom tanks. At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River, thus obstructing the ingress and egress of vessels.

As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner Wildvalley Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that day. Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of Manila, Branch III against Philippine President Lines, Inc. and Pioneer Insurance Company (the underwriter/insurer of Philippine Roxas) for damages in the form of unearned profits, and interest thereon amounting to US $400,000.00 plus attorney's fees, costs, and expenses of litigation. The complaint against Pioneer Insurance Company was dismissed in an Order dated November 7, 1988. At the pre-trial conference, the parties agreed on the following facts: "1. The jurisdictional facts, as specified in their respective pleadings; "2. That defendant PPL was the owner of the vessel Philippine Roxas at the time of the incident; "3. That defendant Pioneer Insurance was the insurance underwriter for defendant PPL; "4. That plaintiff Wildvalley Shipping Co., Inc. is the owner of the vessel Malandrinon, whose passage was obstructed by the vessel Philippine Roxas at Puerto Ordaz, Venezuela, as specified in par. 4, page 2 of the complaint; "5. That on February 12, 1988, while the Philippine Roxas was navigating the channel at Puerto Ordaz, the said vessel grounded and as a result, obstructed navigation at the channel; "6. That the Orinoco River in Puerto Ordaz is a compulsory pilotage channel; "7. That at the time of the incident, the vessel, Philippine Roxas, was under the command of the pilot Ezzar Solarzano, assigned by the government thereat, but plaintiff claims that it is under the command of the master; "8. The plaintiff filed a case in Middleburg, Holland which is related to the present case; "9. The plaintiff caused the arrest of the Philippine Collier, a vessel owned by the defendant PPL; "10. The Orinoco River is 150 miles long and it takes approximately 12 hours to navigate out of the said river; "11. That no security for the plaintiff's claim was given until after the Philippine Collier was arrested; and "12. That a letter of guarantee, dated 12-May-88 was issued by the Steamship Mutual Underwriters Ltd."

The trial court rendered its decision on October 16, 1991 in favor of the petitioner, Wildvalley Shipping Co., Ltd. The dispositive portion thereof reads as follows: "WHEREFORE, judgment is rendered for the plaintiff, ordering defendant Philippine President Lines, Inc. to pay to the plaintiff the sum of U.S. $259,243.43, as actual and compensatory damages, and U.S. $162,031.53, as expenses incurred abroad for its foreign lawyers, plus additional sum of U.S. $22,000.00, as and for attorney's fees of plaintiff's local lawyer, and to pay the cost of this suit. "Defendant's counterclaim is dismissed for lack of merit. "SO ORDERED." Both parties appealed: the petitioner appealing the non-award of interest with the private respondent questioning the decision on the merits of the case. After the requisite pleadings had been filed, the Court of Appeals came out with its questioned decision dated June 14, 1994, the dispositive portion of which reads as follows: "WHEREFORE, finding defendant-appellant's appeal to be meritorious, judgment is hereby rendered reversing the Decision of the lower court. Plaintiff-appellant's Complaint is dismissed and it is ordered to pay defendant-appellant the amount of Three Hundred Twenty-three Thousand, Forty-two Pesos and Fifty-three Centavos (P323,042.53) as and for attorney's fees plus cost of suit. Plaintiff-appellant's appeal is DISMISSED. "SO ORDERED." Petitioner filed a motion for reconsideration but the same was denied for lack of merit in the resolution
dated March 29, 1995.

Hence, this petition. The petitioner assigns the following errors to the court a quo: 1. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT UNDER PHILIPPINE LAW NO FAULT OR NEGLIGENCE CAN BE ATTRIBUTED TO THE MASTER NOR THE OWNER OF THE "PHILIPPINE ROXAS" FOR THE GROUNDING OF SAID VESSEL RESULTING IN THE BLOCKAGE OF THE RIO ORINOCO; 2. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE FINDINGS OF FACTS OF THE TRIAL COURT CONTRARY TO EVIDENCE; 3. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE "PHILIPPINE ROXAS" IS SEAWORTHY;

4. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING VENEZUELAN LAW DESPITE THE FACT THAT THE SAME HAS BEEN SUBSTANTIALLY PROVED IN THE TRIAL COURT WITHOUT ANY OBJECTION FROM PRIVATE RESPONDENT, AND WHOSE OBJECTION WAS INTERPOSED BELATEDLY ON APPEAL; 5. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN AWARDING ATTORNEY'S FEES AND COSTS TO PRIVATE RESPONDENT WITHOUT ANY FAIR OR REASONABLE BASIS WHATSOEVER; 6. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT FINDING THAT PETITIONER'S CAUSE IS MERITORIOUS HENCE, PETITIONER SHOULD BE ENTITLED TO ATTORNEY'S FEES, COSTS AND INTEREST. The petition is without merit. The primary issue to be determined is whether or not Venezuelan law is applicable to the case at bar. It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. A distinction is to be made as to the manner of proving a written and an unwritten law. The former falls under Section 24, Rule 132 of the Rules of Court, as amended, the entire provision of which is quoted hereunder. Where the foreign law sought to be proved is "unwritten," the oral testimony of expert witnesses is admissible, as are printed and published books of reports of decisions of the courts of the country concerned if proved to be commonly admitted in such courts. Section 24 of Rule 132 of the Rules of Court, as amended, provides: "Sec. 24. Proof of official record. -- The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office." (Underscoring supplied) The court has interpreted Section 25 (now Section 24) to include competent evidence like the testimony of a witness to prove the existence of a written foreign law. In the noted case of Willamette Iron & Steel Works vs. Muzzal, it was held that:

" Mr. Arthur W. Bolton, an attorney-at-law of San Francisco, California, since the year 1918 under oath, quoted verbatim section 322 of the California Civil Code and stated that said section was in force at the time the obligations of defendant to the plaintiff were incurred, i.e. on November 5, 1928 and December 22, 1928. This evidence sufficiently established the fact that the section in question was the law of the State of California on the above dates. A reading of sections 300 and 301 of our Code of Civil Procedure will convince one that these sections do not exclude the presentation of other competent evidence to prove the existence of a foreign law. "`The foreign law is a matter of fact You ask the witness what the law is; he may, from his recollection, or on producing and referring to books, say what it is.' (Lord Campbell concurring in an opinion of Lord Chief Justice Denman in a well-known English case where a witness was called upon to prove the Roman laws of marriage and was permitted to testify, though he referred to a book containing the decrees of the Council of Trent as controlling, Jones on Evidence, Second Edition, Volume 4, pages 3148-3152.) x x x. We do not dispute the competency of Capt. Oscar Leon Monzon, the Assistant Harbor Master and Chief of Pilots at Puerto Ordaz, Venezuela, to testify on the existence of the Reglamento General de la Ley de Pilotaje (pilotage law of Venezuela) and the Reglamento Para la Zona de Pilotaje No 1 del Orinoco (rules governing the navigation of the Orinoco River). Captain Monzon has held the aforementioned posts for eight years. As such he is in charge of designating the pilots for maneuvering and navigating the Orinoco River. He is also in charge of the documents that come into the office of the harbour masters. Nevertheless, we take note that these written laws were not proven in the manner provided by Section 24 of Rule 132 of the Rules of Court. The Reglamento General de la Ley de Pilotaje was published in the Gaceta Oficialof the Republic of Venezuela. A photocopy of the Gaceta Oficial was presented in evidence as an official publication of the Republic of Venezuela. The Reglamento Para la Zona de Pilotaje No 1 del Orinoco is published in a book issued by the Ministerio de Comunicaciones of Venezuela. Only a photocopy of the said rules was likewise presented as evidence. Both of these documents are considered in Philippine jurisprudence to be public documents for they are the written official acts, or records of the official acts of the sovereign authority, official bodies and tribunals, and public officers of Venezuela. For a copy of a foreign public document to be admissible, the following requisites are mandatory: (1) It must be attested by the officer having legal custody of the records or by his deputy; and (2) It must be accompanied by a certificate by a secretary of the embassy or legation, consul general, consul, vice consular or consular agent or foreign service officer, and with the seal of his office. The latter requirement is not a mere technicality but is intended to justify the giving of full faith and credit to the genuineness of a document in a foreign country.

It is not enough that the Gaceta Oficial, or a book published by the Ministerio de Comunicaciones of Venezuela, was presented as evidence with Captain Monzon attesting it. It is also required by Section 24 of Rule 132 of the Rules of Court that a certificate that Captain Monzon, who attested the documents, is the officer who had legal custody of those records made by a secretary of the embassy or legation, consul general, consul, vice consul or consular agent or by any officer in the foreign service of the Philippines stationed in Venezuela, and authenticated by the seal of his office accompanying the copy of the public document. No such certificate could be found in the records of the case. With respect to proof of written laws, parol proof is objectionable, for the written law itself is the best evidence. According to the weight of authority, when a foreign statute is involved, the best evidence rule requires that it be proved by a duly authenticated copy of the statute. At this juncture, we have to point out that the Venezuelan law was not pleaded before the lower court. A foreign law is considered to be pleaded if there is an allegation in the pleading about the existence of the foreign law, its import and legal consequence on the event or transaction in issue. A review of the Complaint revealed that it was never alleged or invoked despite the fact that the grounding of the M/V Philippine Roxas occurred within the territorial jurisdiction of Venezuela. We reiterate that under the rules of private international law, a foreign law must be properly pleaded and proved as a fact. In the absence of pleading and proof, the laws of a foreign country, or state, will be presumed to be the same as our own local or domestic law and this is known as processual presumption. Having cleared this point, we now proceed to a thorough study of the errors assigned by the petitioner. Petitioner alleges that there was negligence on the part of the private respondent that would warrant the award of damages. There being no contractual obligation, the private respondent is obliged to give only the diligence required of a good father of a family in accordance with the provisions of Article 1173 of the New Civil Code, thus: Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply. If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required.

The diligence of a good father of a family requires only that diligence which an ordinary prudent man would exercise with regard to his own property. This we have found private respondent to have exercised when the vessel sailed only after the "main engine, machineries, and other auxiliaries" were checked and found to be in good running condition; when the master left a competent officer, the officer on watch on the bridge with a pilot who is experienced in navigating the Orinoco River; when the master ordered the inspection of the vessel's double bottom tanks when the vibrations occurred anew. The Philippine rules on pilotage, embodied in Philippine Ports Authority Administrative Order No. 03-85, otherwise known as the Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports enunciate the duties and responsibilities of a master of a vessel and its pilot, among other things. The pertinent provisions of the said administrative order governing these persons are quoted hereunder: Sec. 11. Control of Vessels and Liability for Damage. -- On compulsory pilotage grounds, the Harbor Pilot providing the service to a vessel shall be responsible for the damage caused to a vessel or to life and property at ports due to his negligence or fault. He can be absolved from liability if the accident is caused by force majeure or natural calamities provided he has exercised prudence and extra diligence to prevent or minimize the damage. The Master shall retain overall command of the vessel even on pilotage grounds whereby he can countermand or overrule the order or command of the Harbor Pilot on board. In such event, any damage caused to a vessel or to life and property at ports by reason of the fault or negligence of the Master shall be the responsibility and liability of the registered owner of the vessel concerned without prejudice to recourse against said Master. Such liability of the owner or Master of the vessel or its pilots shall be determined by competent authority in appropriate proceedings in the light of the facts and circumstances of each particular case. x x x Sec. 32. Duties and Responsibilities of the Pilots or Pilots Association. -- The duties and responsibilities of the Harbor Pilot shall be as follows: x x x f) A pilot shall be held responsible for the direction of a vessel from the time he assumes his work as a pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his responsibility shall cease at the moment the Master neglects or refuses to carry out his order." The Code of Commerce likewise provides for the obligations expected of a captain of a vessel, to wit:

Art. 612. The following obligations shall be inherent in the office of captain: x x x "7. To be on deck on reaching land and to take command on entering and leaving ports, canals, roadsteads, and rivers, unless there is a pilot on board discharging his duties. x x x. The law is very explicit. The master remains the overall commander of the vessel even when there is a pilot on board. He remains in control of the ship as he can still perform the duties conferred upon him by law despite the presence of a pilot who is temporarily in charge of the vessel. It is not required of him to be on the bridge while the vessel is being navigated by a pilot. However, Section 8 of PPA Administrative Order No. 03-85, provides: Sec. 8. Compulsory Pilotage Service - For entering a harbor and anchoring thereat, or passing through rivers or straits within a pilotage district, as well as docking and undocking at any pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign trade shall be under compulsory pilotage. xxx. The Orinoco River being a compulsory pilotage channel necessitated the engaging of a pilot who was presumed to be knowledgeable of every shoal, bank, deep and shallow ends of the river. In his deposition, pilot Ezzar Solarzano Vasquez testified that he is an official pilot in the Harbour at Port Ordaz, Venezuela, and that he had been a pilot for twelve (12) years. He also had experience in navigating the waters of the Orinoco River. The law does provide that the master can countermand or overrule the order or command of the harbor pilot on board. The master of the Philippine Roxas deemed it best not to order him (the pilot) to stop the vessel, mayhap, because the latter had assured him that they were navigating normally before the grounding of the vessel. Moreover, the pilot had admitted that on account of his experience he was very familiar with the configuration of the river as well as the course headings, and that he does not even refer to river charts when navigating the Orinoco River. Based on these declarations, it comes as no surprise to us that the master chose not to regain control of the ship. Admitting his limited knowledge of the Orinoco River, Captain Colon relied on the knowledge and experience of pilot Vasquez to guide the vessel safely. Licensed pilots, enjoying the emoluments of compulsory pilotage, are in a different class from ordinary employees, for they assume to have a skill and a knowledge of navigation in the particular waters over which their licenses extend superior to that of the master; pilots are bound to use due diligence and reasonable care and skill. A pilot's ordinary skill is in proportion to the pilot's responsibilities, and implies a knowledge and observance of the usual rules of navigation, acquaintance with the waters piloted in their ordinary condition, and nautical skill in avoiding all known obstructions. The character of the skill and knowledge required of a pilot in charge of a vessel on the rivers of a country is very different from that which enables a navigator to carry a

vessel safely in the ocean. On the ocean, a knowledge of the rules of navigation, with charts that disclose the places of hidden rocks, dangerous shores, or other dangers of the way, are the main elements of a pilot's knowledge and skill. But the pilot of a river vessel, like the harbor pilot, is selected for the individual's personal knowledge of the topography through which the vessel is steered." We find that the grounding of the vessel is attributable to the pilot. When the vibrations were first felt the watch officer asked him what was going on, and pilot Vasquez replied that "(they) were in the middle of the channel and that the vibration was as (sic) a result of the shallowness of the channel." Pilot Ezzar Solarzano Vasquez was assigned to pilot the vessel Philippine Roxas as well as other vessels on the Orinoco River due to his knowledge of the same. In his experience as a pilot, he should have been aware of the portions which are shallow and which are not. His failure to determine the depth of the said river and his decision to plod on his set course, in all probability, caused damage to the vessel. Thus, we hold him as negligent and liable for its grounding. In the case of Homer Ramsdell Transportation Company vs. La Compagnie Generale Transatlantique, 182 U.S. 406, it was held that: x x x The master of a ship, and the owner also, is liable for any injury done by the negligence of the crew employed in the ship. The same doctrine will apply to the case of a pilot employed by the master or owner, by whose negligence any injury happens to a third person or his property: as, for example, by a collision with another ship, occasioned by his negligence. And it will make no difference in the case that the pilot, if any is employed, is required to be a licensed pilot; provided the master is at liberty to take a pilot, or not, at his pleasure, for in such a case the master acts voluntarily, although he is necessarily required to select from a particular class. On the other hand, if it is compulsive upon the master to take a pilot, and, a fortiori, if he is bound to do so under penalty, then, and in such case, neither he nor the owner will be liable for injuries occasioned by the negligence of the pilot; for in such a case the pilot cannot be deemed properly the servant of the master or the owner, but is forced upon them, and the maxim Qui facit per alium facit per se does not apply." (Underscoring supplied) Anent the river passage plan, we find that, while there was none, the voyage has been sufficiently
planned and monitored as shown by the following actions undertaken by the pilot, Ezzar Solarzano Vasquez, to wit: contacting the radio marina via VHF for information regarding the channel, river traffic, soundings of the river, depth of the river, bulletin on the buoys. The officer on watch also monitored the voyage.

We, therefore, do not find the absence of a river passage plan to be the cause for the grounding of the vessel. The doctrine of res ipsa loquitur does not apply to the case at bar because the circumstances surrounding the injury do not clearly indicate negligence on the part of the private respondent. For the said doctrine to apply, the following conditions must be met: (1) the accident was of such character as to warrant an inference that it would not have happened except for defendant's negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with the negligence complained of; and

(3) the accident must not have been due to any voluntary action or contribution on the part of the person injured. As has already been held above, there was a temporary shift of control over the ship from the master of the vessel to the pilot on a compulsory pilotage channel. Thus, two of the requisites necessary for the doctrine to apply, i.e., negligence and control, to render the respondent liable, are absent. As to the claim that the ship was unseaworthy, we hold that it is not. The Lloyds Register of Shipping confirmed the vessels seaworthiness in a Confirmation of Class issued on February 16, 1988 by finding that "the above named ship (Philippine Roxas) maintained the class "+100A1 Strengthened for Ore Cargoes, Nos. 2 and 8 Holds may be empty (CC) and +LMC" from 31/12/87 up until the time of casualty on or about 12/2/88." The same would not have been issued had not the vessel been built according to the standards set by Lloyd's. Samuel Lim, a marine surveyor, at Lloyd's Register of Shipping testified thus: "Q Now, in your opinion, as a surveyor, did top side tank have any bearing at all to the seaworthiness of the vessel? "A Well, judging on this particular vessel, and also basing on the class record of the vessel, wherein recommendations were made on the top side tank, and it was given sufficient time to be repaired, it means that the vessel is fit to travel even with those defects on the ship. "COURT What do you mean by that? You explain. The vessel is fit to travel even with defects? Is that what you mean? Explain. "WITNESS "A Yes, your Honor. Because the class society which register (sic) is the third party looking into the condition of the vessel and as far as their record states, the vessel was class or maintained, and she is fit to travel during that voyage." x x x "ATTY. MISA Before we proceed to other matter, will you kindly tell us what is (sic) the 'class +100A1 Strengthened for Ore Cargoes', mean? "WITNESS

"A Plus 100A1 means that the vessel was built according to Lloyd's rules and she is capable of carrying ore bulk cargoes, but she is particularly capable of carrying Ore Cargoes with No. 2 and No. 8 holds empty. x x x "COURT The vessel is classed, meaning? "A Meaning she is fit to travel, your Honor, or seaworthy." It is not required that the vessel must be perfect. To be seaworthy, a ship must be reasonably fit to perform the services, and to encounter the ordinary perils of the voyage, contemplated by the parties to the policy. As further evidence that the vessel was seaworthy, we quote the deposition of pilot Vasquez: "Q Was there any instance when your orders or directions were not complied with because of the inability of the vessel to do so? "A No. "Q. Was the vessel able to respond to all your commands and orders? "A. The vessel was navigating normally. Eduardo P. Mata, Second Engineer of the Philippine Roxas submitted an accident report wherein he stated that on February 11, 1988, he checked and prepared the main engine, machineries and all other auxiliaries and found them all to be in good running condition and ready for maneuvering. That same day the main engine, bridge and engine telegraph and steering gear motor were also tested. Engineer Mata also prepared the fuel for consumption for maneuvering and checked the engine generators. Finally, we find the award of attorneys fee justified. Article 2208 of the New Civil Code provides that: "Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except: x x x "(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.

x x x Due to the unfounded filing of this case, the private respondent was unjustifiably forced to litigate, thus the award of attorneys fees was proper. WHEREFORE, IN VIEW OF THE FOREGOING, the petition is DENIED and the decision of the Court of Appeals in CA G.R. CV No. 36821 is AFFIRMED. SO ORDERED. Bellosillo, (Chairman), Mendoza, Quisumbing, and De leon, Jr., JJ., concur. FIRST DIVISION

[G.R. No. 124371. November 23, 2000]


PAULA T. LLORENTE, petitioner, vs. COURT OF APPEALS and ALICIA F. LLORENTE, respondents. DECISION PARDO, J.: The Case The case raises a conflict of laws issue. What is before us is an appeal from the decision of the Court of Appeals modifying that of the Regional Trial Court, Camarines Sur, Branch 35, Iriga City declaring respondent Alicia F. Llorente (herinafter referred to as Alicia), as co-owners of whatever property she and the deceased Lorenzo N. Llorente (hereinafter referred to as Lorenzo) may have acquired during the twenty-five (25) years that they lived together as husband and wife. The Facts The deceased Lorenzo N. Llorente was an enlisted serviceman of the United States Navy from March 10, 1927 to September 30, 1957. On February 22, 1937, Lorenzo and petitioner Paula Llorente (hereinafter referred to as Paula) were married before a parish priest, Roman Catholic Church, in Nabua, Camarines Sur. Before the outbreak of the Pacific War, Lorenzo departed for the United States and Paula stayed in the conjugal home in barrio Antipolo, Nabua, Camarines Sur.

On November 30, 1943, Lorenzo was admitted to United States citizenship and Certificate of Naturalization No. 5579816 was issued in his favor by the United States District Court, Southern District of New York. Upon the liberation of the Philippines by the American Forces in 1945, Lorenzo was granted an accrued leave by the U. S. Navy, to visit his wife and he visited the Philippines. He discovered that his wife Paula was pregnant and was living in and having an adulterous relationship with his brother, Ceferino Llorente. On December 4, 1945, Paula gave birth to a boy registered in the Office of the Registrar of Nabua as Crisologo Llorente, with the certificate stating that the child was not legitimate and the line for the fathers name was left blank. Lorenzo refused to forgive Paula and live with her. In fact, on February 2, 1946, the couple drew a written agreement to the effect that (1) all the family allowances allotted by the United States Navy as part of Lorenzos salary and all other obligations for Paulas daily maintenance and support would be suspended; (2) they would dissolve their marital union in accordance with judicial proceedings; (3) they would make a separate agreement regarding their conjugal property acquired during their marital life; and (4) Lorenzo would not prosecute Paula for her adulterous act since she voluntarily admitted her fault and agreed to separate from Lorenzo peacefully. The agreement was signed by both Lorenzo and Paula and was witnessed by Paulas father and stepmother. The agreement was notarized by Notary Public Pedro Osabel. Lorenzo returned to the United States and on November 16, 1951 filed for divorce with the Superior Court of the State of California in and for the County of San Diego. Paula was represented by counsel, John Riley, and actively participated in the proceedings. On November 27, 1951, the Superior Court of the State of California, for the County of San Diego found all factual allegations to be true and issued an interlocutory judgment of divorce. On December 4, 1952, the divorce decree became final. In the meantime, Lorenzo returned to the Philippines. On January 16, 1958, Lorenzo married Alicia F. Llorente in Manila. Apparently, Alicia had no knowledge of the first marriage even if they resided in the same town as Paula, who did not oppose the marriage or cohabitation. From 1958 to 1985, Lorenzo and Alicia lived together as husband and wife. Their twenty-five (25) year union produced three children, Raul, Luz and Beverly, all surnamed Llorente. On March 13, 1981, Lorenzo executed a Last Will and Testament. The will was notarized by Notary Public Salvador M. Occiano, duly signed by Lorenzo with attesting

witnesses Francisco Hugo, Francisco Neibres and Tito Trajano. In the will, Lorenzo bequeathed all his property to Alicia and their three children, to wit: (1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my residential house and lot, located at San Francisco, Nabua, Camarines Sur, Philippines, including ALL the personal properties and other movables or belongings that may be found or existing therein; (2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, all my real properties whatsoever and wheresoever located, specifically my real properties located at Barangay Aro-Aldao, Nabua, Camarines Sur; Barangay Paloyon, Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua, Camarines Sur; and Barangay Paloyon, Sitio Nalilidong, Nabua, Camarines Sur; (3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and unto my children, Raul F. Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, my real properties located in Quezon City Philippines, and covered by Transfer Certificate of Title No. 188652; and my lands in Antipolo, Rizal, Philippines, covered by Transfer Certificate of Title Nos. 124196 and 165188, both of the Registry of Deeds of the province of Rizal, Philippines; (4) That their respective shares in the above-mentioned properties, whether real or personal properties, shall not be disposed of, ceded, sold and conveyed to any other persons, but could only be sold, ceded, conveyed and disposed of by and among themselves; (5) I designate my wife ALICIA R. FORTUNO to be the sole executor of this my Last Will and Testament, and in her default or incapacity of the latter to act, any of my children in the order of age, if of age; (6) I hereby direct that the executor named herein or her lawful substitute should served (sic) without bond; (7) I hereby revoke any and all my other wills, codicils, or testamentary dispositions heretofore executed, signed, or published, by me; (8) It is my final wish and desire that if I die, no relatives of mine in any degree in the Llorentes Side should ever bother and disturb in any manner whatsoever my wife Alicia R. Fortunato and my children with respect to any real or personal properties I gave and bequeathed respectively to each one of them by virtue of this Last Will and Testament. On December 14, 1983, Lorenzo filed with the Regional Trial Court, Iriga, Camarines Sur, a petition for the probate and allowance of his last will and testament wherein Lorenzo moved that Alicia be appointed Special Administratrix of his estate.

On January 18, 1984, the trial court denied the motion for the reason that the testator Lorenzo was still alive. On January 24, 1984, finding that the will was duly executed, the trial court admitted the will to probate. On June 11, 1985, before the proceedings could be terminated, Lorenzo died. On September 4, 1985, Paula filed with the same court a petition for letters of administration over Lorenzos estate in her favor. Paula contended (1) that she was Lorenzos surviving spouse, (2) that the various property were acquired during their marriage, (3) that Lorenzos will disposed of all his property in favor of Alicia and her children, encroaching on her legitime and 1/2 share in the conjugal property. On December 13, 1985, Alicia filed in the testate proceeding (Sp. Proc. No. IR-755), a petition for the issuance of letters testamentary. On October 14, 1985, without terminating the testate proceedings, the trial court gave due course to Paulas petition in Sp. Proc. No. IR-888. On November 6, 13 and 20, 1985, the order was published in the newspaper Bicol Star. On May 18, 1987, the Regional Trial Court issued a joint decision, thus: Wherefore, considering that this court has so found that the divorce decree granted to the late Lorenzo Llorente is void and inapplicable in the Philippines, therefore the marriage he contracted with Alicia Fortunato on January 16, 1958 at Manila is likewise void. This being so the petition of Alicia F. Llorente for the issuance of letters testamentary is denied. Likewise, she is not entitled to receive any share from the estate even if the will especially said so her relationship with Lorenzo having gained the status of paramour which is under Art. 739 (1). On the other hand, the court finds the petition of Paula Titular Llorente, meritorious, and so declares the intrinsic disposition of the will of Lorenzo Llorente dated March 13, 1981 as void and declares her entitled as conjugal partner and entitled to one-half of their conjugal properties, and as primary compulsory heir, Paula T. Llorente is also entitled to one-third of the estate and then one-third should go to the illegitimate children, Raul, Luz and Beverly, all surname ( sic) Llorente, for them to partition in equal shares and also entitled to the remaining free portion in equal shares. Petitioner, Paula Llorente is appointed legal administrator of the estate of the deceased, Lorenzo Llorente. As such let the corresponding letters of administration issue in her favor upon her filing a bond in the amount ( sic) of P100,000.00 conditioned for her to make a return to the court within three (3) months a true and complete inventory of all goods, chattels, rights, and credits, and estate which shall at any time

come to her possession or to the possession of any other person for her, and from the proceeds to pay and discharge all debts, legacies and charges on the same, or such dividends thereon as shall be decreed or required by this court; to render a true and just account of her administration to the court within one (1) year, and at any other time when required by the court and to perform all orders of this court by her to be performed. On the other matters prayed for in respective petitions for want of evidence could not be granted. SO ORDERED. In time, Alicia filed with the trial court a motion for reconsideration of the aforequoted decision. On September 14, 1987, the trial court denied Alicias motion for reconsideration but modified its earlier decision, stating that Raul and Luz Llorente are not children legitimate or otherwise of Lorenzo since they were not legally adopted by him. Amending its decision of May 18, 1987, the trial court declared Beverly Llorente as the only illegitimate child of Lorenzo, entitling her to one-third (1/3) of the estate and onethird (1/3) of the free portion of the estate. On September 28, 1987, respondent appealed to the Court of Appeals. On July 31, 1995, the Court of Appeals promulgated its decision, affirming with modification the decision of the trial court in this wise: WHEREFORE, the decision appealed from is hereby AFFIRMED with the MODIFICATION that Alicia is declared as co-owner of whatever properties she and the deceased may have acquired during the twenty-five (25) years of cohabitation. SO ORDERED. On August 25, 1995, petitioner filed with the Court of Appeals a motion for reconsideration of the decision. On March 21, 1996, the Court of Appeals, denied the motion for lack of merit. Hence, this petition. The Issue Stripping the petition of its legalese and sorting through the various arguments raised, the issue is simple. Who are entitled to inherit from the late Lorenzo N. Llorente?

We do not agree with the decision of the Court of Appeals. We remand the case to the trial court for ruling on the intrinsic validity of the will of the deceased. The Applicable Law The fact that the late Lorenzo N. Llorente became an American citizen long before and at the time of: (1) his divorce from Paula; (2) marriage to Alicia; (3) execution of his will; and (4) death, is duly established, admitted and undisputed. Thus, as a rule, issues arising from these incidents are necessarily governed by foreign law. The Civil Code clearly provides: Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. Art. 16. Real property as well as personal property is subject to the law of the country where it is situated. However, intestate and testamentary succession, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. ( emphasis ours) True, foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved. While the substance of the foreign law was pleaded, the Court of Appeals did not admit the foreign law. The Court of Appeals and the trial court called to the fore the renvoi doctrine, where the case was referred back to the law of the decedents domicile, in this case, Philippine law. We note that while the trial court stated that the law of New York was not sufficiently proven, in the same breath it made the categorical, albeit equally unproven statement that American law follows the domiciliary theory hence, Philippine law applies when determining the validity of Lorenzos will. First, there is no such thing as one American law. The "national law" indicated in Article 16 of the Civil Code cannot possibly apply to general American law. There is no such law governing the validity of testamentary provisions in the United States. Each State of the union has its own law applicable to its citizens and in force only within the State. It can therefore refer to no other than the law of the State of which the decedent

was a resident. Second, there is no showing that the application of the renvoi doctrine is called for or required by New York State law. The trial court held that the will was intrinsically invalid since it contained dispositions in favor of Alice, who in the trial courts opinion was a mere paramour. The trial court threw the will out, leaving Alice, and her two children, Raul and Luz, with nothing. The Court of Appeals also disregarded the will. It declared Alice entitled to one half (1/2) of whatever property she and Lorenzo acquired during their cohabitation, applying Article 144 of the Civil Code of the Philippines. The hasty application of Philippine law and the complete disregard of the will, already probated as duly executed in accordance with the formalities of Philippine law, is fatal, especially in light of the factual and legal circumstances here obtaining . Validity of the Foreign Divorce In Van Dorn v. Romillo, Jr. we held that owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the policy against absolute divorces, the same being considered contrary to our concept of public policy and morality. In the same case, the Court ruled that aliens may obtain divorces abroad, provided they are valid according to their national law. Citing this landmark case, the Court held in Quita v. Court of Appeals, that once proven that respondent was no longer a Filipino citizen when he obtained the divorce from petitioner, the ruling in Van Dorn would become applicable and petitioner could very well lose her right to inherit from him. In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the respondent in his country, the Federal Republic of Germany. There, we stated that divorce and its legal effects may be recognized in the Philippines insofar as respondent is concerned in view of the nationality principle in our civil law on the status of persons. For failing to apply these doctrines, the decision of the Court of Appeals must be reversed. We hold that the divorce obtained by Lorenzo H. Llorente from his first wife Paula was valid and recognized in this jurisdiction as a matter of comity. Now, the effects of this divorce (as to the succession to the estate of the decedent) are matters best left to the determination of the trial court. Validity of the Will The Civil Code provides: Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed .

When the acts referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a foreign country, the solemnities established by Philippine laws shall be observed in their execution. ( underscoring ours) The clear intent of Lorenzo to bequeath his property to his second wife and children by her is glaringly shown in the will he executed. We do not wish to frustrate his wishes, since he was a foreigner, not covered by our laws on family rights and duties, status, condition and legal capacity. Whether the will is intrinsically valid and who shall inherit from Lorenzo are issues best proved by foreign law which must be pleaded and proved. Whether the will was executed in accordance with the formalities required is answered by referring to Philippine law. In fact, the will was duly probated. As a guide however, the trial court should note that whatever public policy or good customs may be involved in our system of legitimes, Congress did not intend to extend the same to the succession of foreign nationals. Congress specifically left the amount of successional rights to the decedent's national law. Having thus ruled, we find it unnecessary to pass upon the other issues raised. The Fallo WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CAG. R. SP No. 17446 promulgated on July 31, 1995 is SET ASIDE. In lieu thereof, the Court REVERSES the decision of the Regional Trial Court and RECOGNIZES as VALID the decree of divorce granted in favor of the deceased Lorenzo N. Llorente by the Superior Court of the State of California in and for the County of San Diego, made final on December 4, 1952. Further, the Court REMANDS the cases to the court of origin for determination of the intrinsic validity of Lorenzo N. Llorentes will and determination of the parties successional rights allowing proof of foreign law with instructions that the trial court shall proceed with all deliberate dispatch to settle the estate of the deceased within the framework of the Rules of Court. No costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur. In CA-G. R. SP. No. 17446, promulgated on July 31, 1995, Lipana-Reyes +, J., ponente, Torres, Jr. and Hofilena, JJ., concurring.

In Spec. Proc. No. IR-755 (In the Matter of the Probate and Allowance of the Last Will and Testament of Lorenzo N. Llorente, Lorenzo N. Llorente, Petitioner) and Spec. Proc. No. IR-888 (Petition for the Grant of Letters of Administration for the Estate of Lorenzo N. Llorente, Paula T. Llorente, Petitioner), dated May 18, 1987, Judge Esteban B. Abonal, presiding. Decision, Court of Appeals, Rollo, p. 51. Exh. B, Trial Court Folder of Exhibits, p. 61. Ibid. This was issued pursuant to Lorenzos petition, Petition No. 4708849, filed with the U.S. Court. Exhs. H and H-3 Trial Court Folder of Exhibits, p. 157, 159. Decision, Court of Appeals, Rollo, p. 51; Exh. B, Trial Court Folder of Exhibits, p. 61. Ibid. Exh. A, Trial Court Folder of Exhibits, p. 60. Exh. B-1 Trial Court Folder of Exhibits, p. 62. Exh. D, Trial Court Folder of Exhibits, pp. 63-64. Exh. E, Trial Court Folder of Exhibits, p. 69. Exh. F, Trial Court Folder of Exhibits, p. 148. Decision, Court of Appeals, Rollo, p. 52. Comment, Rollo, p. 147. Decision, Court of Appeals, Rollo, p. 52. Exh. A, Trial Court Folder of Exhibits, pp. 3-4; Decision, Court of Appeals, Rollo, p. 52. Docketed as Spec. Proc. No. IR-755. Decision, RTC, Rollo, p. 37. Ibid. Ibid. Docketed as Spec. Proc. No. IR-888.

Decision, RTC, Rollo, p. 38. Decision, Court of Appeals, Rollo, p. 52. Ibid., pp. 52-53. Ibid., p. 53. RTC Decision, Rollo, p. 37. Order, Regional Trial Court in Spec. Proc. Nos. IR-755 and 888, Rollo, p. 46. Citing Article 335 of the Civil Code, which states, The following cannot adopt: xxx (3) a married person, without the consent of the other spouse; xxx, the trial court reasoned that since the divorce obtained by Lorenzo did not dissolve his first marriage with Paula, then the adoption of Raul and Luz was void, as Paula did not give her consent to it. Order, Regional Trial Court, Rollo, p. 47. Docketed as CA-G. R. SP No. 17446. Decision, Court of Appeals, Rollo, p. 56. On August 31, 1995, petitioner also filed with this Court a verified complaint against the members of the Special Thirteenth Division, Court of Appeals, Associate Justices Justo P. Torres, Jr., Celia Lipana-Reyes + and Hector Hofilena for gross ignorance of the law, manifest incompetence and extreme bias (Rollo, p. 15). Again with Associate Justice Celia Lipana-Reyes+, ponente, concurred in by Associate Justices Justo P. Torres, Jr. and Hector Hofilena (Former Special Thirteenth Division). Filed on May 10, 1996, Rollo, pp. 9-36. Petitioner alleges (1) That the Court of Appeals lost its jurisdiction over the case when it issued the resolution denying the motion for reconsideration; (2) That Art. 144 of the Civil Case has been repealed by Arts. 253 and 147 of the Family Code and (3) That Alicia and her children not are entitled to any share in the estate of the deceased ( Rollo, p. 19). Collector of Internal Revenue v. Fisher, 110 Phil. 686 (1961). Joint Record on Appeal, p. 255; Rollo, p. 40. In Re: Estate of Edward Christensen, Aznar v. Helen Garcia, 117 Phil. 96 (1963).

139 SCRA 139 (1985). 300 SCRA 406 (1998). 174 SCRA 653 (1989). The ruling in the case of Tenchavez v. Escano (122 Phil. 752 [1965]) that provides that a foreign divorce between Filipino citizens sought and decreed after the effectivity of the present civil code is not entitled to recognition as valid in this jurisdiction is NOT applicable in the case at bar as Lorenzo was no longer a Filipino citizen when he obtained the divorce. Article 15, Civil Code provides Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. (Underscoring ours) Bellis v. Bellis, 126 Phil. 726 (1967).

THIRD DIVISION

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., Petitioners,

G.R. No. 149177


Present:

YNARES-SANTIAGO, J., Chairperson, - versus AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and REYES, JJ.

MINORU KITAMURA, Respondent. Promulgated:

November 23, 2007

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DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001 Resolution denying the motion for reconsideration thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical and management

support in the infrastructure projects of foreign governments, entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines. The agreement provides that respondent was to extend professional services to Nippon for a year starting on April 1, 1999. Nippon then assigned respondent to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy contract with the Philippine Government.

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project. Respondent was named as the project manager in the contract's Appendix 3.1.

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed respondent that the company had no more intention of automatically renewing his ICA. His services would be engaged by the company only up to the substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry.

Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demanded that he be assigned to the BBRI

project. Nippon insisted that respondents contract was for a fixed term that had already expired, and refused to negotiate for the renewal of the ICA.

As he was not able to generate a positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with the Regional Trial Court of Lipa City.

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for improper pretermination of respondent's ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus.

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI Project.

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance, denied the motion to dismiss. The trial court subsequently denied petitioners' motion for reconsideration, prompting them to file with the appellate court, on August 14, 2000, their first Petition for

Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205]. On August 23, 2000, the CA resolved to dismiss the petition on procedural groundsfor lack of statement of material dates and for insufficient verification and certification against forum shopping. An Entry of Judgment was later issued by the appellate court on September 20, 2000.

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material dates and attaching thereto the proper verification and certification. This second petition, which substantially raised the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001 Decision finding no grave abuse of discretion in the trial court's denial of the motion to dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the case, because nowhere in the pleadings was the validity of the written agreement put in issue. The CA thus declared that the trial court was correct in applying instead the principle of lex loci solutionis.

Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001 Resolution.

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review on Certiorari imputing the following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN. B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex contractus, the state of the most significant relationship rule, or forum non conveniens.

However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.

Kitamura contends that the finality of the appellate court's decision in CAG.R. SP No. 60205 has already barred the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the same issues as those in the first one) and the instant petition for review thereof.

We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective certification of non-forum shopping, it was a dismissal without prejudice. The same holds true in the CA's dismissal of the said case due to defects in the formal requirement of verification and in the other requirement in Rule 46 of the Rules of Court on the statement of the material dates. The dismissal being without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the appropriate verification and certification as they, in fact didand stating therein the material dates, within the prescribed period in Section 4, Rule 65 of the said Rules.

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the parties free to litigate the matter in a subsequent action as though the dismissed action had not been commenced. In other words, the termination of a case not on the merits does not bar another action involving the same parties, on the same subject matter and theory.

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if petitioners still indicated in the verification and certification of the second certiorari petition that the first had already been dismissed on procedural grounds, petitioners are no

longer required by the Rules to indicate in their certification of non-forum shopping in the instant petition for review of the second certiorari petition , the status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum shopping about any event that will not constitute res judicata and litis pendentia, as in the present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils sought to be prevented by the said certificate are no longer present.

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the instant petition. True, the Authorization dated September 4, 2000, which is attached to the second certiorari petition and which is also attached to the instant petition for review, is limited in scopeits wordings indicate that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition filed with the appellate court, and that authority cannot extend to the instant petition for review. In a plethora of cases, however, this Court has liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a subsequent fulfillment of the requirements have been made. Given that petitioners herein sufficiently explained their misgivings on this point and appended to their Reply an updated Authorization for Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient compliance with the Rules.

However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent August 17, 2001 Authorization were issued only by Nippon's president and chief executive officer, not by the company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by the board of directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority from the board. Considering that Hasegawa verified and certified the petition only on his behalf and not on

behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office of the Ombudsman. Substantial compliance will not suffice in a matter that demands strict observance of the Rules. While technical rules of procedure are designed not to frustrate the ends of justice, nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court dockets.

Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's denial of their motion to dismiss. It is a well-established rule that an order denying a motion to dismiss is interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as defenses the objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course. While there are recognized exceptions to this rule, petitioners' case does not fall among them.

This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and resolve the civil case for specific performance and damages filed by the respondent. The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the parties following the [state of the] most significant relationship rule in Private International Law.

The Court notes that petitioners adopted an additional but different theory when they elevated the case to the appellate court. In the Motion to Dismiss filed with the trial court, petitioners never contended that the RTC is an inconvenient forum. They merely argued that the

applicable law which will determine the validity or invalidity of respondent's claim is that of Japan, following the principles of lex loci celebrationis and lex contractus. While not abandoning this stance in their petition before the appellate court, petitioners on certiorari significantly invoked the defense of forum non conveniens. On petition for review before this Court, petitioners dropped their other arguments, maintained the forum non conveniens defense, and introduced their new argument that the applicable principle is the [state of the] most significant relationship rule.

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as explained in Philippine Ports Authority v. City of Iloilo. We only pointed out petitioners' inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to these phases are the following questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be enforced?

Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the minimum contacts for one do not always provide the necessary significant contacts for the other. The question of whether the law of a state can be applied to a

transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment.

In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has various aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the subject of the litigation. In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes the court. It is given only by law and in the manner prescribed by law. It is further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. To succeed in its motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim, the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims.

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City. What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci celebrationis and lex contractus, and the state of the most significant relationship rule.

The Court finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the law of the place of the ceremony or the law of the place where a contract is made. The doctrine of lex contractus or lex loci contractus means the law of the place where a contract is executed or to be performed. It controls the nature, construction, and validity of the contract and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly. Under the state of the most significant relationship rule, to ascertain what state law to apply to a dispute, the court should determine which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties. This rule takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved.

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second phase, the choice of law. They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem. Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules. Also, when the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence of such law must be pleaded and proved.

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into account or apply the law of some other State or States. The courts power to hear cases and controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding rights provided by foreign sovereigns.

Neither can the other ground raised, forum non conveniens, be used to deprive the trial court of its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a ground. Second, whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. In this case, the RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this principle requires a factual determination; hence, this conflicts principle is more properly considered a matter of defense.

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and appellate courts correctly denied the petitioners motion to dismiss.

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

RUBEN T. REYES Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice


Penned by Associate Justice Bienvenido L. Reyes, with the late Associate Justice Eubulo G. Verzola and Associate Justice Marina L. Buzon, concurring; rollo, pp. 37-44. Id. at 46-47. CA rollo (CA-G.R. SP No. 60827), p. 84. Id. at 116-120. Id. at 32-36. Id. at 85. Id. at 121-148. Id. at 166-171. Id. at 38. Id. at 39-41. Id. at 109. Id. at 53-57.

Id. at 42-43. 13 Phil. 236 (1909). Insular Government v. Frank, id. at 240. CA rollo (CA-G.R. SP No. 60827), pp. 25-26. Id. at 27-28. CA rollo (CA-G.R. SP No. 60205), pp. 2-42. Id. at 44. The August 23, 2000 Resolution penned by Associate Justice Delilah VidallonMagtolis (retired), with the concurrence of Associate Justices Eloy R. Bello, Jr. (retired) and Elvi John S. Asuncion (dismissed) pertinently provides as follows:
A cursory reading of the petition indicates no statement as to the date when the petitioners filed their motion for reconsideration and when they received the order of denial thereof, as required in Section 3, paragraph 2, Rule 46 of the 1997 Rules of Civil Procedure as amended by Circular No. 39-98 dated August 18, 1998 of the Supreme Court. Moreover, the verification and certification of non-forum shopping was executed by petitioner Kazuhiro Hasegawa for both petitioners without any indication that the latter had authorized him to file the same. WHEREFORE, the [petition] is DENIED due course and DISMISSED outright. SO ORDERED.

Id. at 45. CA rollo (CA-G.R. SP No. 60827), pp. 2-24. Supra note 1. Id. at 222. Supra note 2. Rollo, pp. 3-35. Id. at 15. See Spouses Melo v. Court of Appeals, 376 Phil. 204, 213-214 (1999), in which the Supreme Court ruled that compliance with the certification against forum shopping is separate from, and independent of, the avoidance of forum shopping itself. Thus, there is a difference in the treatmentin terms of imposable sanctionsbetween failure to comply with the certification requirement and violation of the prohibition against forum shopping. The former is merely a cause for the dismissal, without prejudice, of the complaint or initiatory pleading, while the latter is a ground for summary dismissal thereof and constitutes direct contempt. See also Philippine

Radiant Products, Inc. v. Metropolitan Bank & Trust Company, Inc., G.R. No. 163569, December 9, 2005, 477 SCRA 299, 314, in which the Court ruled that the dismissal due to failure to append to the petition the board resolution authorizing a corporate officer to file the same for and in behalf of the corporation is without prejudice. So is the dismissal of the petition for failure of the petitioner to append thereto the requisite copies of the assailed order/s. See Torres v. Specialized Packaging Development Corporation, G.R. No. 149634, July 6, 2004, 433 SCRA 455, 463-464, in which the Court made the pronouncement that the requirement of verification is simply a condition affecting the form of pleadings, and noncompliance therewith does not necessarily render it fatally defective. Section 3, Rule 46 of the Rules of Court pertinently states that x x x [i]n actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received. x x x Estrera v. Court of Appeals, G.R. Nos. 154235-36, August 16, 2006, 499 SCRA 86, 95; and Spouses Melo v. Court of Appeals, supra note 27, at 214. The Rules of Court pertinently provides in Section 4, Rule 65 that [t]he petition may be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion. x x x Delgado v. Court of Appeals, G.R. No. 137881, December 21, 2004, 447 SCRA 402, 415. CA rollo (CA-G.R. SP No. 60827), p. 21. Fuentebella v. Castro, G.R. No. 150865, June 30, 2006, 494 SCRA 183, 193-194; see Roxas v. Court of Appeals, 415 Phil. 430 (2001). Rollo, p. 33; CA rollo (CA-G.R. SP No. 60827), p. 23. The Authorization dated September 4, 2000 pertinently reads: I, KEN TAKAGI, President and Chief Executive Officer of NIPPON ENGINEERING CONSULTANTS CO., LTD., a corporation duly organized and existing in accordance with the corporation laws of Japan, with principal address at 3-23-1 Komagome, Toshima-ku Tokyo, Japan, hereby authorize its International Division General Manager, Mr. Kazuhiro Hasegawa, to sign and act for and in behalf of Nippon Engineering Consultants Co., Ltd., for purposes of filing a Petition for Certiorari before the proper tribunal in the case entitled: Kazuhiro Hasegawa and Nippon Engineering Consultants Co., Ltd. vs. Minoru Kitamura and Hon. Avelino C. Demetria of the Regional Trial Court, Fourth Judicial Region-Branch 85, Lipa City, and to do such other things, acts and deals which may be necessary and proper for the attainment of the said objectives [Underscoring ours].

Cf. Orbeta v. Sendiong, G.R. No. 155236, July 8, 2005, 463 SCRA 180, 199-200, in which the Court ruled that the agent's signing therein of the verification and certification is already covered by the provisions of the general power of attorney issued by the principal. Barcenas v. Tomas, G.R. No. 150321, March 31, 2005, 454 SCRA 593, 604. Dated October 11, 2001; rollo, pp. 192-203. Dated August 17, 2001, id. at 202. San Pablo Manufacturing Corporation v. Commissioner of Internal Revenue , G.R. No. 147749, June 22, 2006, 492 SCRA 192, 197; LDP Marketing, Inc. v. Monter, G.R. No. 159653, January 25, 2006, 480 SCRA 137, 142; Expertravel & Tours, Inc. v. Court of Appeals , G.R. No. 152392, May 26, 2005, 459 SCRA 147, 160. 392 Phil. 596, 603-604 (2000). Loquias v. Office of the Ombudsman, id. at 604. Santos v. Court of Appeals, 413 Phil. 41, 54 (2001). Yutingco v. Court of Appeals, 435 Phil. 83, 92 (2002). Bank of America NT & SA v. Court of Appeals , 448 Phil. 181, 193 (2003). As stated herein, under certain situations resort to certiorari is considered appropriate when: (1) the trial court issued the order without or in excess of jurisdiction; (2) there is patent grave abuse of discretion by the trial court; or (3) appeal would not prove to be a speedy and adequate remedy as when an appeal would not promptly relieve a defendant from the injurious effects of the patently mistaken order maintaining the plaintiffs baseless action and compelling the defendants needlessly to go through a protracted trial and clogging the court dockets with another futile case. Rollo, p. 228. Id. at 234-245. Dated June 5, 2000; CA rollo (CA-G.R. SP No. 60827), pp. 53-57. Id. at 55. Id. at 14. Rollo, pp. 19-28. 453 Phil. 927, 934 (2003).

Scoles, Hay, Borchers, Symeonides, Conflict of Laws, 3rd ed. (2000), p. 3. Coquia and Aguiling-Pangalangan, Conflict of Laws, 1995 ed., p. 64. Supra note 53, at 162, citing Hay, The Interrelation of Jurisdictional Choice of Law in U.S. Conflicts Law, 28 Int'l. & Comp. L.Q. 161 (1979). Shaffer v. Heitner, 433 U.S. 186, 215; 97 S.Ct. 2569, 2585 (1977), citing Justice Black's Dissenting Opinion in Hanson v. Denckla, 357 U.S. 235, 258; 78 S. Ct. 1228, 1242 (1958). See Regalado, Remedial Law Compendium, Vol. 1, 8th Revised Ed., pp. 7-8.

U.S. v. De La Santa, 9 Phil. 22, 25-26 (1907). Bokingo v. Court of Appeals, G.R. No. 161739, May 4, 2006, 489 SCRA 521, 530; Tomas Claudio Memorial College, Inc. v. Court of Appeals, 374 Phil. 859, 864 (1999). See RULES OF COURT, Rule 16, Sec. 1. See In Re: Calloway, 1 Phil. 11, 12 (1901). Bokingo v. Court of Appeals, supra note 59, at 531-533; Radio Communications of the Phils. Inc. v. Court of Appeals, 435 Phil. 62, 68-69 (2002). Garcia v. Recio, 418 Phil. 723, 729 (2001); Board of Commissioners (CID) v. Dela Rosa, G.R. Nos. 95122-23, May 31, 1991, 197 SCRA 853, 888. <http://web2.westlaw.com/search/default.wl? rs=WLW7.10&action=Search&fn=_top&sv=Split& method=TNC&query=CA(+lex+loci+celebrationis+)&db=DIBLACK&utid=%7bD0AE3BEE91BC-4B2B-B788-3FB4D963677B%7d&vr=2.0&rp=%2fsearch %2fdefault.wl&mt=WLIGeneralSubscription> (visited October 22, 2007). <http://web2.westlaw.com/search/default.wl? rs=WLW7.10&action=Search&fn=_top&sv=Split& method=TNC&query=CA(+lex+loci+contractus+)&db=DIBLACK&utid=%7bD0AE3BEE91BC-4B2B-B788-3FB4D963677B%7d&vr=2.0&rp=%2fsearch %2fdefault.wl&mt=WLIGeneralSubscription>(visited October 22, 2007). Id. Philippine Export and Foreign Loan Guarantee Corporation v. V.P. Eusebio Construction, Inc., G.R. No. 140047, July 13, 2004, 434 SCRA 202, 214-215.

<http://web2.westlaw.com/search/default.wl? rs=WLW7.10&action=Search&fn=_top&sv=Split& method=TNC&query=CA(+most+significant+relationship+)&db=DIBLACK&utid= %7bD0AE3BEE-91BC-4B2B-B788-3FB4D963677B%7d&vr=2.0&rp=%2fsearch %2fdefault.wl&mt= WLIGeneralSubscription> (visited October 22, 2007). Saudi Arabian Airlines v. Court of Appeals , 358 Phil. 105, 127 (1998). The contacts which were taken into account in this case are the following: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered. See Auten v. Auten, 308 N.Y 155, 159-160 (1954). Supra note 53, at 117-118; supra note 54, at 64-65. Laurel v. Garcia, G.R. Nos. 92013 and 92047, July 25, 1990, 187 SCRA 797, 810-811. International Harvester Company in Russia v. Hamburg-American Line , 42 Phil. 845, 855 (1918). Salonga, Private International Law, 1995 ed., p. 44. Veitz, Jr. v. Unisys Corporation, 676 F. Supp. 99, 101 (1987), citing Randall v. Arabian Am. Oil. Co., 778 F. 2d 1146 (1985).
Under this rule, a court, in conflicts cases, may refuse impositions on its jurisdiction where it is not the most convenient or available forum and the parties are not precluded from seeking remedies elsewhere ( Bank of America NT & SA v. Court of Appeals , supra note 45, at 196). The court may refuse to entertain a case for any of the following practical reasons: (1) the belief that the matter can be better tried and decided elsewhere, either because the main aspects of the case transpired in a foreign jurisdiction or the material witnesses have their residence there; (2) the belief that the non-resident plaintiff sought the forum, a practice known as forum shopping, merely to secure procedural advantages or to convey or harass the defendant; (3) the unwillingness to extend local judicial facilities to non-residents or aliens when the docket may already be overcrowded; (4) the inadequacy of the local judicial machinery for effectuating the right sought to be maintained; and (5) the difficulty of ascertaining foreign law (Puyat v. Zabarte, 405 Phil. 413, 432 [2001]).

Philsec Investment Corporation v. Court of Appeals, G.R. No. 103493, June 19, 1997, 274 SCRA 102, 113. Bank of America NT & SA v. Court of Appeals, supra note 45, at 196. Bank of America NT & SA v. Court of Appeals, supra note 45, at 197.

SECOND DIVISION

RAYTHEON INTERNATIONAL, INC., Petitioner,

G.R. No. 162894

Present:

CARPIO, J.,* Acting Chairperson, SANDOVAL-GUTIERREZ,** - versus CARPIO MORALES, TINGA, and VELASCO, JR., JJ. STOCKTON W. ROUZIE, JR., Respondent. Promulgated:

February 26, 2008 x----------------------------------------------------------------------------x

DECISION
TINGA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure which seeks the reversal of the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil case filed by respondent against petitioner with the trial court.

As culled from the records of the case, the following antecedents appear:

Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative to negotiate the sale of services in several government projects in the Philippines for an agreed remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption and mudflows.

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of employment contract. On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to pay respondents money claims. Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and

dismissed respondents complaint on the ground of lack of jurisdiction. Respondent elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997. The Resolution became final and executory on 09 November 1998.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before the Regional Trial Court (RTC) of Bauang, La Union. The Complaint, docketed as Civil Case No. 1192-BG, named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the allegations in the labor case that BMSI verbally employed respondent to negotiate the sale of services in government projects and that respondent was not paid the commissions due him from the Pinatubo dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well as petitioner itself had combined and functioned as one company.

In its Answer, petitioner alleged that contrary to respondents claim, it was a foreign corporation duly licensed to do business in the Philippines and denied entering into any arrangement with respondent or paying the latter any sum of money. Petitioner also denied combining with BMSI and RUST for the purpose of assuming the alleged obligation of the said companies. Petitioner also referred to the NLRC decision which disclosed that per the written agreement between respondent and BMSI and RUST, denominated as Special Sales Representative Agreement, the rights and obligations of the parties shall be governed by the laws

of the State of Connecticut. Petitioner sought the dismissal of the complaint on grounds of failure to state a cause of action and forum non conveniens and prayed for damages by way of compulsory counterclaim.

On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on Affirmative Defenses and for Summary Judgment seeking the dismissal of the complaint on grounds of forum non conveniens and failure to state a cause of action. Respondent opposed the same. Pending the resolution of the omnibus motion, the deposition of Walter Browning was taken before the Philippine Consulate General in Chicago.

In an Order dated 13 September 2000, the RTC denied petitioners omnibus motion. The trial court held that the factual allegations in the complaint, assuming the same to be admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled that the principle of forum non conveniens was inapplicable because the trial court could enforce judgment on petitioner, it being a foreign corporation licensed to do business in the Philippines.

Petitioner filed a Motion for Reconsideration of the order, which motion was opposed by respondent. In an Order dated 31 July 2001, the trial court denied petitioners motion. Thus, it filed a Rule 65 Petition with the Court of Appeals

praying for the issuance of a writ of certiorari and a writ of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting further proceedings.

On 28 August 2003, the Court of Appeals rendered the assailed Decision denying the petition for certiorari for lack of merit. It also denied petitioners motion for reconsideration in the assailed Resolution issued on 10 March 2004.

The appellate court held that although the trial court should not have confined itself to the allegations in the complaint and should have also considered evidence aliunde in resolving petitioners omnibus motion, it found the evidence presented by petitioner, that is, the deposition of Walter Browning, insufficient for purposes of determining whether the complaint failed to state a cause of action. The appellate court also stated that it could not rule one way or the other on the issue of whether the corporations, including petitioner, named as defendants in the case had indeed merged together based solely on the evidence presented by respondent. Thus, it held that the issue should be threshed out during trial. Moreover, the appellate court deferred to the discretion of the trial court when the latter decided not to desist from assuming jurisdiction on the ground of the inapplicability of the principle of forum non conveniens.

Hence, this petition raising the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST RAYTHEON INTERNATIONAL, INC. WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.

Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino Padua Law Office, counsel on record for respondent, manifested that the lawyer handling the case, Atty. Rogelio Karagdag, had severed relations with the law firm even before the filing of the instant petition and that it could no longer find the whereabouts of Atty. Karagdag or of respondent despite diligent efforts. In a Resolution dated 20 November 2006, the Court resolved to dispense with the filing of a comment.

The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also mentions the presence of foreign elements in the dispute namely, the parties and witnesses involved are American corporations and citizens and the evidence to be presented is located outside the Philippines that renders our local courts inconvenient forums.

Petitioner theorizes that the foreign elements of the dispute necessitate the immediate application of the doctrine of forum non conveniens.

Recently in Hasegawa v. Kitamura, the Court outlined three consecutive phases involved in judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition and enforcement of judgments. Thus, in the instances where the Court held that the local judicial machinery was adequate to resolve controversies with a foreign element, the following requisites had to be proved: (1) that the Philippine Court is one to which the parties may conveniently resort; (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (3) that the Philippine Court has or is likely to have the power to enforce its decision.

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court and where the court has jurisdiction over the subject matter, the parties and the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed.

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law and by the material allegations in the complaint, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein. Civil Case No. 1192-BG is an action for damages

arising from an alleged breach of contract. Undoubtedly, the nature of the action and the amount of damages prayed are within the jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary appearance in court.

That the subject contract included a stipulation that the same shall be governed by the laws of the State of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The choice of law stipulation will become relevant only when the substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions on its jurisdiction where it is not the most convenient or available forum and the parties are not precluded from seeking

remedies elsewhere. Petitioners averments of the foreign elements in the instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires a factual determination; hence, it is more properly considered as a matter of defense. While it is within the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only after vital facts are established, to determine whether special circumstances require the courts desistance.

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign elements. In the same manner, the Court defers to the sound discretion of the lower courts because their findings are binding on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action against petitioner. Failure to state a cause of action refers to the insufficiency of allegation in the pleading. As a general rule, the elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded.

The complaint alleged that petitioner had combined with BMSI and RUST to function as one company. Petitioner contends that the deposition of Walter Browning rebutted this allegation. On this score, the resolution of the Court of Appeals is instructive, thus:

x x x Our examination of the deposition of Mr. Walter Browning as well as other documents produced in the hearing shows that these evidence aliunde are not quite sufficient for us to mete a ruling that the complaint fails to state a cause of action.

Annexes A to E by themselves are not substantial, convincing and conclusive proofs that Raytheon Engineers and Constructors, Inc. (REC) assumed the warranty obligations of defendant Rust International in the Makar Port Project in General Santos City, after Rust International ceased to exist after being absorbed by REC. Other documents already submitted in evidence are likewise meager to preponderantly conclude that Raytheon International, Inc., Rust International[,] Inc. and Brand Marine Service, Inc. have combined into one company, so much so that Raytheon International, Inc., the surviving company (if at all) may be held liable for the obligation of BMSI to respondent Rouzie for unpaid commissions. Neither these documents clearly speak otherwise.

As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST merged together requires the presentation of further evidence, which only a full-blown trial on the merits can afford.

WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 67001 are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

DANTE O. TINGA Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice Acting Chairperson

ANGELINA SANDOVAL-GUTIERREZ

CONCHITA CARPIO MORALES

Associate Justice

Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO

Associate Justice Acting Chairperson

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice

*Acting Chairperson.

**As replacement of Justice Leonardo A. Quisumbing who inhibited himself per Administrative Circular No. 84-2007.

Rollo, pp. 42-46. Dated 28 August 2003; penned by Associate Justice Arsenio J. Magpale and concurred in by Associate Justices Bienvenido L. Reyes, Acting Chairperson of the Special Ninth Division, and Rebecca De Guia-Salvador.

Id. at 47. Dated 10 March 2004.

Id. at 48-49.

Id. at 61-62.

Id. at 63-74.

Id. at 75-90.

Id. at 48-54.

Id. at 91-99.

Id. at 94.

Id. at 96.

Id. at 97-98.

Id. at 100-111.

Records, Vol. I, pp. 180-238.

Rollo, pp. 127-131.

Id. at 130.

Id. at 132-149.

Id. at 150-151.

Id. at 162.

Id. at 163-192.

Id. at 191.

Supra note 1.

Supra note 2.

Id. at 44.

Id. at 18.

Id. at 318.

G.R. No. 149177, 23 November 2007.

Bank of America NT & SA v. Court of Appeals , 448 Phil. 181 (2003); Puyat v. Zabarte, 405 Phil. 413 (2001); Philsec Investment Corporation v. Court of Appeals, G.R. No. 103493, 19 June 1997, 274 SCRA 102.

The Manila Hotel Corp. v. NLRC, 397 Phil. 1, 16-17 (2000); Communication Materials and Design, Inc. v. CA, 329 Phil. 487, 510-511 (1996).

AGPALO, RUBEN E. CONFLICT OF LAWS (Private International Law), 2004 Ed., p. 491.

Heirs of Julian Dela Cruz and Leonora Talaro v. Heirs of Alberto Cruz , G.R. No. 162890, 22 November 2005, 475 SCRA 743, 756.

Laresma v. Abellana, G.R. No. 140973, 11 November 2004, 442 SCRA 156, 168.

See Arcelona v. CA, 345 Phil. 250, 267 (1997).

Hasegawa v. Kitamura, supra note 26.

Bank of America NT & SA v. Court of Appeals, supra note 27.

Philsec Investment Corporation v. Court of Appeals, supra note 27 at 113.

Bank of America NT & SA v. Court of Appeals, supra note 27 at 194.

Banco Filipino Savings and Mortgage Bank v. Court of Appeals, G.R. No. 143896, 8 July 2005, 463 SCRA 64, 73.

Rollo, p. 44.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-19671 November 29, 1965

PASTOR B. TENCHAVEZ, plaintiff-appellant, vs. VICENTA F. ESCAO, ET AL., defendants-appellees. I. V. Binamira & F. B. Barria for plaintiff-appellant. Jalandoni & Jarnir for defendants-appellees. REYES, J.B.L., J.: Direct appeal, on factual and legal questions, from the judgment of the Court of First Instance of Cebu, in its Civil Case No. R-4177, denying the claim of the plaintiff-appellant, Pastor B. Tenchavez, for legal separation and one million pesos in damages against his wife and parents-

in-law, the defendants-appellees, Vicente, Mamerto and Mena,1 all surnamed "Escao," respectively.2 The facts, supported by the evidence of record, are the following: Missing her late afternoon classes on 24 February 1948 in the University of San Carlos, Cebu City, where she was then enrolled as a second year student of commerce, Vicenta Escao, 27 years of age (scion of a well-to-do and socially prominent Filipino family of Spanish ancestry and a "sheltered colegiala"), exchanged marriage vows with Pastor Tenchavez, 32 years of age, an engineer, ex-army officer and of undistinguished stock, without the knowledge of her parents, before a Catholic chaplain, Lt. Moises Lavares, in the house of one Juan Alburo in the said city. The marriage was the culmination of a previous love affair and was duly registered with the local civil register. Vicenta's letters to Pastor, and his to her, before the marriage, indicate that the couple were deeply in love. Together with a friend, Pacita Noel, their matchmaker and go-between, they had planned out their marital future whereby Pacita would be the governess of their first-born; they started saving money in a piggy bank. A few weeks before their secret marriage, their engagement was broken; Vicenta returned the engagement ring and accepted another suitor, Joseling Lao. Her love for Pastor beckoned; she pleaded for his return, and they reconciled. This time they planned to get married and then elope. To facilitate the elopement, Vicenta had brought some of her clothes to the room of Pacita Noel in St. Mary's Hall, which was their usual trysting place. Although planned for the midnight following their marriage, the elopement did not, however, materialize because when Vicente went back to her classes after the marriage, her mother, who got wind of the intended nuptials, was already waiting for her at the college. Vicenta was taken home where she admitted that she had already married Pastor. Mamerto and Mena Escao were surprised, because Pastor never asked for the hand of Vicente, and were disgusted because of the great scandal that the clandestine marriage would provoke (t.s.n., vol. III, pp. 1105-06). The following morning, the Escao spouses sought priestly advice. Father Reynes suggested a recelebration to validate what he believed to be an invalid marriage, from the standpoint of the Church, due to the lack of authority from the Archbishop or the parish priest for the officiating chaplain to celebrate the marriage. The recelebration did not take place, because on 26 February 1948 Mamerto Escao was handed by a maid, whose name he claims he does not remember, a letter purportedly coming from San Carlos college students and disclosing an amorous relationship between Pastor Tenchavez and Pacita Noel; Vicenta translated the letter to her father, and thereafter would not agree to a new marriage. Vicenta and Pastor met that day in the house of Mrs. Pilar Mendezona. Thereafter, Vicenta continued living with her parents while Pastor returned to his job in Manila. Her letter of 22 March 1948 (Exh. "M"), while still solicitous of her husband's welfare, was not as endearing as her previous letters when their love was aflame. Vicenta was bred in Catholic ways but is of a changeable disposition, and Pastor knew it. She fondly accepted her being called a "jellyfish." She was not prevented by her parents from communicating with Pastor (Exh. "1-Escao"), but her letters became less frequent as the days

passed. As of June, 1948 the newlyweds were already estranged (Exh. "2-Escao"). Vicenta had gone to Jimenez, Misamis Occidental, to escape from the scandal that her marriage stirred in Cebu society. There, a lawyer filed for her a petition, drafted by then Senator Emmanuel Pelaez, to annul her marriage. She did not sign the petition (Exh. "B-5"). The case was dismissed without prejudice because of her non-appearance at the hearing (Exh. "B-4"). On 24 June 1950, without informing her husband, she applied for a passport, indicating in her application that she was single, that her purpose was to study, and she was domiciled in Cebu City, and that she intended to return after two years. The application was approved, and she left for the United States. On 22 August 1950, she filed a verified complaint for divorce against the herein plaintiff in the Second Judicial District Court of the State of Nevada in and for the County of Washoe, on the ground of "extreme cruelty, entirely mental in character." On 21 October 1950, a decree of divorce, "final and absolute", was issued in open court by the said tribunal. In 1951 Mamerto and Mena Escao filed a petition with the Archbishop of Cebu to annul their daughter's marriage to Pastor (Exh. "D"). On 10 September 1954, Vicenta sought papal dispensation of her marriage (Exh. "D"-2). On 13 September 1954, Vicenta married an American, Russell Leo Moran, in Nevada. She now lives with him in California, and, by him, has begotten children. She acquired American citizenship on 8 August 1958. But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a complaint in the Court of First Instance of Cebu, and amended on 31 May 1956, against Vicenta F. Escao, her parents, Mamerto and Mena Escao, whom he charged with having dissuaded and discouraged Vicenta from joining her husband, and alienating her affections, and against the Roman Catholic Church, for having, through its Diocesan Tribunal, decreed the annulment of the marriage, and asked for legal separation and one million pesos in damages. Vicenta claimed a valid divorce from plaintiff and an equally valid marriage to her present husband, Russell Leo Moran; while her parents denied that they had in any way influenced their daughter's acts, and counterclaimed for moral damages. The appealed judgment did not decree a legal separation, but freed the plaintiff from supporting his wife and to acquire property to the exclusion of his wife. It allowed the counterclaim of Mamerto Escao and Mena Escao for moral and exemplary damages and attorney's fees against the plaintiff-appellant, to the extent of P45,000.00, and plaintiff resorted directly to this Court. The appellant ascribes, as errors of the trial court, the following: 1. In not declaring legal separation; in not holding defendant Vicenta F. Escao liable for damages and in dismissing the complaint;. 2. In not holding the defendant parents Mamerto Escano and the heirs of Doa Mena Escao liable for damages;.

3 In holding the plaintiff liable for and requiring him to pay the damages to the defendant parents on their counterclaims; and. 4. In dismissing the complaint and in denying the relief sought by the plaintiff. That on 24 February 1948 the plaintiff-appellant, Pastor Tenchavez, and the defendant-appellee, Vicenta Escao, were validly married to each other, from the standpoint of our civil law, is clearly established by the record before us. Both parties were then above the age of majority, and otherwise qualified; and both consented to the marriage, which was performed by a Catholic priest (army chaplain Lavares) in the presence of competent witnesses. It is nowhere shown that said priest was not duly authorized under civil law to solemnize marriages. The chaplain's alleged lack of ecclesiastical authorization from the parish priest and the Ordinary, as required by Canon law, is irrelevant in our civil law, not only because of the separation of Church and State but also because Act 3613 of the Philippine Legislature (which was the marriage law in force at the time) expressly provided that SEC. 1. Essential requisites. Essential requisites for marriage are the legal capacity of the contracting parties and consent. (Emphasis supplied) The actual authority of the solemnizing officer was thus only a formal requirement, and, therefore, not essential to give the marriage civil effects,3 and this is emphasized by section 27 of said marriage act, which provided the following: SEC. 27. Failure to comply with formal requirements. No marriage shall be declared invalid because of the absence of one or several of the formal requirements of this Act if, when it was performed, the spouses or one of them believed in good faith that the person who solemnized the marriage was actually empowered to do so, and that the marriage was perfectly legal. The good faith of all the parties to the marriage (and hence the validity of their marriage) will be presumed until the contrary is positively proved (Lao vs. Dee Tim, 45 Phil. 739, 745; Francisco vs. Jason, 60 Phil. 442, 448). It is well to note here that in the case at bar, doubts as to the authority of the solemnizing priest arose only after the marriage, when Vicenta's parents consulted Father Reynes and the archbishop of Cebu. Moreover, the very act of Vicenta in abandoning her original action for annulment and subsequently suing for divorce implies an admission that her marriage to plaintiff was valid and binding. Defendant Vicenta Escao argues that when she contracted the marriage she was under the undue influence of Pacita Noel, whom she charges to have been in conspiracy with appellant Tenchavez. Even granting, for argument's sake, the truth of that contention, and assuming that Vicenta's consent was vitiated by fraud and undue influence, such vices did not render her marriage ab initio void, but merely voidable, and the marriage remained valid until annulled by a competent civil court. This was never done, and admittedly, Vicenta's suit for annulment in the Court of First Instance of Misamis was dismissed for non-prosecution.

It is equally clear from the record that the valid marriage between Pastor Tenchavez and Vicenta Escao remained subsisting and undissolved under Philippine law, notwithstanding the decree of absolute divorce that the wife sought and obtained on 21 October 1950 from the Second Judicial District Court of Washoe County, State of Nevada, on grounds of "extreme cruelty, entirely mental in character." At the time the divorce decree was issued, Vicenta Escao, like her husband, was still a Filipino citizen.4 She was then subject to Philippine law, and Article 15 of the Civil Code of the Philippines (Rep. Act No. 386), already in force at the time, expressly provided: Laws relating to family rights and duties or to the status, condition and legal capacity of persons are binding upon the citizens of the Philippines, even though living abroad. The Civil Code of the Philippines, now in force, does not admit absolute divorce, quo ad vinculo matrimonii; and in fact does not even use that term, to further emphasize its restrictive policy on the matter, in contrast to the preceding legislation that admitted absolute divorce on grounds of adultery of the wife or concubinage of the husband (Act 2710). Instead of divorce, the present Civil Code only provides for legal separation (Title IV, Book 1, Arts. 97 to 108), and, even in that case, it expressly prescribes that "the marriage bonds shall not be severed" (Art. 106, subpar. 1). For the Philippine courts to recognize and give recognition or effect to a foreign decree of absolute divorce betiveen Filipino citizens could be a patent violation of the declared public policy of the state, specially in view of the third paragraph of Article 17 of the Civil Code that prescribes the following: Prohibitive laws concerning persons, their acts or property, and those which have for their object public order, policy and good customs, shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. Even more, the grant of effectivity in this jurisdiction to such foreign divorce decrees would, in effect, give rise to an irritating and scandalous discrimination in favor of wealthy citizens, to the detriment of those members of our polity whose means do not permit them to sojourn abroad and obtain absolute divorces outside the Philippines. From this point of view, it is irrelevant that appellant Pastor Tenchavez should have appeared in the Nevada divorce court. Primarily because the policy of our law cannot be nullified by acts of private parties (Civil Code,Art. 17, jam quot.); and additionally, because the mere appearance of a non-resident consort cannot confer jurisdiction where the court originally had none (Area vs. Javier, 95 Phil. 579). From the preceding facts and considerations, there flows as a necessary consequence that in this jurisdiction Vicenta Escao's divorce and second marriage are not entitled to recognition as valid; for her previous union to plaintiff Tenchavez must be declared to be existent and undissolved. It follows, likewise, that her refusal to perform her wifely duties, and her denial of consortium and her desertion of her husband constitute in law a wrong caused through her fault,

for which the husband is entitled to the corresponding indemnity (Civil Code, Art. 2176). Neither an unsubstantiated charge of deceit nor an anonymous letter charging immorality against the husband constitute, contrary to her claim, adequate excuse. Wherefore, her marriage and cohabitation with Russell Leo Moran is technically "intercourse with a person not her husband" from the standpoint of Philippine Law, and entitles plaintiff-appellant Tenchavez to a decree of "legal separation under our law, on the basis of adultery" (Revised Penal Code, Art. 333). The foregoing conclusions as to the untoward effect of a marriage after an invalid divorce are in accord with the previous doctrines and rulings of this court on the subject, particularly those that were rendered under our laws prior to the approval of the absolute divorce act (Act 2710 of the Philippine Legislature). As a matter of legal history, our statutes did not recognize divorces a vinculo before 1917, when Act 2710 became effective; and the present Civil Code of the Philippines, in disregarding absolute divorces, in effect merely reverted to the policies on the subject prevailing before Act 2710. The rulings, therefore, under the Civil Code of 1889, prior to the Act above-mentioned, are now, fully applicable. Of these, the decision in Ramirez vs. Gmur, 42 Phil. 855, is of particular interest. Said this Court in that case: As the divorce granted by the French Court must be ignored, it results that the marriage of Dr. Mory and Leona Castro, celebrated in London in 1905, could not legalize their relations; and the circumstance that they afterwards passed for husband and wife in Switzerland until her death is wholly without legal significance. The claims of the very children to participate in the estate of Samuel Bishop must therefore be rejected. The right to inherit is limited to legitimate, legitimated and acknowledged natural children. The children of adulterous relations are wholly excluded. The word "descendants" as used in Article 941 of the Civil Code cannot be interpreted to include illegitimates born of adulterous relations. (Emphasis supplied) Except for the fact that the successional rights of the children, begotten from Vicenta's marriage to Leo Moran after the invalid divorce, are not involved in the case at bar, the Gmur case is authority for the proposition that such union is adulterous in this jurisdiction, and, therefore, justifies an action for legal separation on the part of the innocent consort of the first marriage, that stands undissolved in Philippine law. In not so declaring, the trial court committed error. True it is that our ruling gives rise to anomalous situations where the status of a person (whether divorced or not) would depend on the territory where the question arises. Anomalies of this kind are not new in the Philippines, and the answer to them was given in Barretto vs. Gonzales, 58 Phil. 667: The hardship of the existing divorce laws in the Philippine Islands are well known to the members of the Legislature. It is the duty of the Courts to enforce the laws of divorce as written by Legislature if they are constitutional. Courts have no right to say that such laws are too strict or too liberal. (p. 72) The appellant's first assignment of error is, therefore, sustained.

However, the plaintiff-appellant's charge that his wife's parents, Dr. Mamerto Escao and his wife, the late Doa Mena Escao, alienated the affections of their daughter and influenced her conduct toward her husband are not supported by credible evidence. The testimony of Pastor Tenchavez about the Escao's animosity toward him strikes us to be merely conjecture and exaggeration, and are belied by Pastor's own letters written before this suit was begun (Exh. "2Escao" and "Vicenta," Rec. on App., pp. 270-274). In these letters he expressly apologized to the defendants for "misjudging them" and for the "great unhappiness" caused by his "impulsive blunders" and "sinful pride," "effrontery and audacity" [sic]. Plaintiff was admitted to the Escao house to visit and court Vicenta, and the record shows nothing to prove that he would not have been accepted to marry Vicente had he openly asked for her hand, as good manners and breeding demanded. Even after learning of the clandestine marriage, and despite their shock at such unexpected event, the parents of Vicenta proposed and arranged that the marriage be recelebrated in strict conformity with the canons of their religion upon advice that the previous one was canonically defective. If no recelebration of the marriage ceremony was had it was not due to defendants Mamerto Escao and his wife, but to the refusal of Vicenta to proceed with it. That the spouses Escao did not seek to compel or induce their daughter to assent to the recelebration but respected her decision, or that they abided by her resolve, does not constitute in law an alienation of affections. Neither does the fact that Vicenta's parents sent her money while she was in the United States; for it was natural that they should not wish their daughter to live in penury even if they did not concur in her decision to divorce Tenchavez (27 Am. Jur. 130-132). There is no evidence that the parents of Vicenta, out of improper motives, aided and abetted her original suit for annulment, or her subsequent divorce; she appears to have acted independently, and being of age, she was entitled to judge what was best for her and ask that her decisions be respected. Her parents, in so doing, certainly cannot be charged with alienation of affections in the absence of malice or unworthy motives, which have not been shown, good faith being always presumed until the contrary is proved. SEC. 529. Liability of Parents, Guardians or Kin. The law distinguishes between the right of a parent to interest himself in the marital affairs of his child and the absence of rights in a stranger to intermeddle in such affairs. However, such distinction between the liability of parents and that of strangers is only in regard to what will justify interference. A parent isliable for alienation of affections resulting from his own malicious conduct, as where he wrongfully entices his son or daughter to leave his or her spouse, but he is not liable unless he acts maliciously, without justification and from unworthy motives. He is not liable where he acts and advises his child in good faith with respect to his child's marital relations in the interest of his child as he sees it, the marriage of his child not terminating his right and liberty to interest himself in, and be extremely solicitous for, his child's welfare and happiness, even where his conduct and advice suggest or result in the separation of the spouses or the obtaining of a divorce or annulment, or where he acts under mistake or misinformation, or where his advice or interference are indiscreet or unfortunate, although it has been held that the parent is liable for consequences resulting from recklessness. He may in good faith take his child into his home and afford him or her protection and support, so long as he has not maliciously enticed his child away, or does not maliciously entice or cause him or her to stay away, from his or her spouse. This

rule has more frequently been applied in the case of advice given to a married daughter, but it is equally applicable in the case of advice given to a son. Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or social discrimination and with having exerted efforts and pressured her to seek annulment and divorce, unquestionably caused them unrest and anxiety, entitling them to recover damages. While this suit may not have been impelled by actual malice, the charges were certainly reckless in the face of the proven facts and circumstances. Court actions are not established for parties to give vent to their prejudices or spleen. In the assessment of the moral damages recoverable by appellant Pastor Tenchavez from defendant Vicente Escao, it is proper to take into account, against his patently unreasonable claim for a million pesos in damages, that (a) the marriage was celebrated in secret, and its failure was not characterized by publicity or undue humiliation on appellant's part; (b) that the parties never lived together; and (c) that there is evidence that appellant had originally agreed to the annulment of the marriage, although such a promise was legally invalid, being against public policy (cf. Art. 88, Civ. Code). While appellant is unable to remarry under our law, this fact is a consequence of the indissoluble character of the union that appellant entered into voluntarily and with open eyes rather than of her divorce and her second marriage. All told, we are of the opinion that appellant should recover P25,000 only by way of moral damages and attorney's fees. With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto Escao and Mena Escao, by the court below, we opine that the same are excessive. While the filing of this unfounded suit must have wounded said defendants' feelings and caused them anxiety, the same could in no way have seriously injured their reputation, or otherwise prejudiced them, lawsuits having become a common occurrence in present society. What is important, and has been correctly established in the decision of the court below, is that said defendants were not guilty of any improper conduct in the whole deplorable affair. This Court, therefore, reduces the damages awarded to P5,000 only. Summing up, the Court rules: (1) That a foreign divorce between Filipino citizens, sought and decreed after the effectivity of the present Civil Code (Rep. Act 386), is not entitled to recognition as valid in this jurisdiction; and neither is the marriage contracted with another party by the divorced consort, subsequently to the foreign decree of divorce, entitled to validity in the country; (2) That the remarriage of divorced wife and her co-habitation with a person other than the lawful husband entitle the latter to a decree of legal separation conformably to Philippine law; (3) That the desertion and securing of an invalid divorce decree by one consort entitles the other to recover damages; (4) That an action for alienation of affections against the parents of one consort does not lie in the absence of proof of malice or unworthy motives on their part.

WHEREFORE, the decision under appeal is hereby modified as follows; (1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal separation from defendant Vicenta F. Escao; (2) Sentencing defendant-appellee Vicenta Escao to pay plaintiff-appellant Tenchavez the amount of P25,000 for damages and attorneys' fees; (3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escao and the estate of his wife, the deceased Mena Escao, P5,000 by way of damages and attorneys' fees. Neither party to recover costs. Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Regala, Makalintal, Bengzon, J.P. and Zaldivar, JJ., concur.

Footnotes
1

The latter was substituted by her heirs when she died during the pendency of the case in the trial court.
2

The original complaint included the Roman Catholic Church as a defendant, sought to be enjoined from acting on a petition for the ecclesiastical annulment of the marriage between Pastor Tenchavez and Vicenta Escao; the case against the defendant Church was dismissed on a joint motion.
3

In the present Civil Code the contrary rule obtains (Art. 53). She was naturalized as an American citizen only on 8 August 1958.

The Lawphil Project - Arellano Law Foundation

FIRST DIVISION

REPUBLIC OF THE PHILIPPINES, Petitioner,

G.R. No. 154380

Present:

Davide, Jr., C.J., - versus (Chairman), Quisumbing, Ynares-Santiago,

Carpio, and
Azcuna, JJ. CIPRIANO ORBECIDO III, Respondent. Promulgated: October 5, 2005 x --------------------------------------------------x

DECISION
QUISUMBING, J.:

Given a valid marriage between two Filipino citizens, where one party is later naturalized as a foreign citizen and obtains a valid divorce decree capacitating him or her to remarry, can the Filipino spouse likewise remarry under Philippine law? Before us is a case of first impression that behooves the Court to make a definite ruling on this apparently novel question, presented as a pure question of law. In this petition for review, the Solicitor General assails the Decision[1] dated May 15, 2002, of the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23 and its Resolution[2] dated July 4, 2002 denying the motion for reconsideration. The court a quo had declared that herein respondent Cipriano Orbecido III is capacitated to remarry. The fallo of the impugned Decision reads: WHEREFORE, by virtue of the provision of the second paragraph of Art. 26 of the Family Code and by reason of the divorce decree obtained against him by his American wife, the petitioner is given the capacity to remarry under the Philippine Law. IT IS SO ORDERED.[3] The factual antecedents, as narrated by the trial court, are as follows. On May 24, 1981, Cipriano Orbecido III married Lady Myros M. Villanueva at the United Church of Christ in the Philippines in Lam-an, Ozamis City. Their

marriage was blessed with a son and a daughter, Kristoffer Simbortriz V. Orbecido and Lady Kimberly V. Orbecido.

In 1986, Ciprianos wife left for the United States bringing along their son Kristoffer. A few years later, Cipriano discovered that his wife had been naturalized as an American citizen. Sometime in 2000, Cipriano learned from his son that his wife had obtained a divorce decree and then married a certain Innocent Stanley. She, Stanley and her child by him currently live at 5566 A. Walnut Grove Avenue, San Gabriel, California. Cipriano thereafter filed with the trial court a petition for authority to remarry invoking Paragraph 2 of Article 26 of the Family Code. No opposition was filed. Finding merit in the petition, the court granted the same. The Republic, herein petitioner, through the Office of the Solicitor General (OSG), sought reconsideration but it was denied. In this petition, the OSG raises a pure question of law: WHETHER OR NOT RESPONDENT CAN REMARRY UNDER ARTICLE 26 OF THE FAMILY CODE[4] The OSG contends that Paragraph 2 of Article 26 of the Family Code is not applicable to the instant case because it only applies to a valid mixed marriage; that is, a marriage celebrated between a Filipino citizen and an alien. The proper remedy, according to the OSG, is to file a petition for annulment or for legal separation.[5] Furthermore, the OSG argues there is no law that governs

respondents situation. The OSG posits that this is a matter of legislation and not of judicial determination.[6]

For his part, respondent admits that Article 26 is not directly applicable to his case but insists that when his naturalized alien wife obtained a divorce decree which capacitated her to remarry, he is likewise capacitated by operation of law pursuant to Section 12, Article II of the Constitution. [7]

At the outset, we note that the petition for authority to remarry filed before the trial court actually constituted a petition for declaratory relief. connection, Section 1, Rule 63 of the Rules of Court provides: RULE 63 DECLARATORY RELIEF AND SIMILAR REMEDIES In this

Section 1. Who may file petitionAny person interested under a deed, will, contract or other written instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder. ... The requisites of a petition for declaratory relief are: (1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) that the party seeking the relief has a legal interest in the controversy; and (4) that the issue is ripe for judicial determination. [8]

This case concerns the applicability of Paragraph 2 of Article 26 to a marriage between two Filipino citizens where one later acquired alien citizenship, obtained a divorce decree, and remarried while in the U.S.A. The interests of the parties are

also adverse, as petitioner representing the State asserts its duty to protect the institution of marriage while respondent, a private citizen, insists on a declaration of his capacity to remarry. Respondent, praying for relief, has legal interest in the controversy. The issue raised is also ripe for judicial determination inasmuch as when respondent remarries, litigation ensues and puts into question the validity of his second marriage. Coming now to the substantive issue, does Paragraph 2 of Article 26 of the Family Code apply to the case of respondent? Necessarily, we must dwell on how this provision had come about in the first place, and what was the intent of the legislators in its enactment?

Brief Historical Background On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise known as the Family Code, which took effect on August 3, 1988. Article 26 thereof states: All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35, 37, and 38. On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. amended, it now provides: A second paragraph was added to Article 26. As so

ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38. Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law . (Emphasis supplied) On its face, the foregoing provision does not appear to govern the situation presented by the case at hand. It seems to apply only to cases where at the time of the celebration of the marriage, the parties are a Filipino citizen and a foreigner. The instant case is one where at the time the marriage was solemnized, the parties were two Filipino citizens, but later on, the wife was naturalized as an American citizen and subsequently obtained a divorce granting her capacity to remarry, and indeed she remarried an American citizen while residing in the U.S.A. Noteworthy, in the Report of the Public Hearings [9] on the Family Code, the Catholic Bishops Conference of the Philippines (CBCP) registered the following objections to Paragraph 2 of Article 26: 1. The rule is discriminatory. It discriminates against those whose spouses are Filipinos who divorce them abroad. These spouses who are divorced will not be able to re-marry, while the spouses of foreigners who validly divorce them abroad can. This is the beginning of the recognition of the validity of divorce even for Filipino citizens. For those whose foreign spouses validly divorce them abroad will also be considered to be validly divorced here and can re-marry. We propose that this be deleted and made into law only after more widespread consultation. (Emphasis supplied.)

2.

Legislative Intent Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse. Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo, Jr.[10] The Van Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and consequently, the Filipino spouse is capacitated to remarry under Philippine law. Does the same principle apply to a case where at the time of the celebration of the marriage, the parties were Filipino citizens, but later on, one of them obtains a foreign citizenship by naturalization? The jurisprudential answer lies latent in the 1998 case of Quita v. Court of Appeals.[11] In Quita, the parties were, as in this case, Filipino citizens when they got married. The wife became a naturalized American citizen in 1954 and obtained a divorce in the same year. The Court therein hinted, by way of obiter dictum, that a Filipino divorced by his naturalized foreign spouse is no longer married under Philippine law and can thus remarry. Thus, taking into consideration the legislative intent and applying the rule of reason, we hold that Paragraph 2 of Article 26 should be interpreted to include

cases involving parties who, at the time of the celebration of the marriage were Filipino citizens, but later on, one of them becomes naturalized as a foreign citizen and obtains a divorce decree. The Filipino spouse should likewise be allowed to remarry as if the other party were a foreigner at the time of the solemnization of the marriage. To rule otherwise would be to sanction absurdity and injustice. Where the interpretation of a statute according to its exact and literal import would lead to mischievous results or contravene the clear purpose of the legislature, it should be construed according to its spirit and reason, disregarding as far as necessary the letter of the law. A statute may therefore be extended to cases not within the literal meaning of its terms, so long as they come within its spirit or intent.[12]

If we are to give meaning to the legislative intent to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce is no longer married to the Filipino spouse, then the instant case must be deemed as coming within the contemplation of Paragraph 2 of Article 26. In view of the foregoing, we state the twin elements for the application of Paragraph 2 of Article 26 as follows: 1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner; and A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.

2.

The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry. In this case, when Ciprianos wife was naturalized as an American citizen, there was still a valid marriage that has been celebrated between her and Cipriano. As fate would have it, the naturalized alien wife subsequently obtained a valid divorce capacitating her to remarry. Clearly, the twin requisites for the application of Paragraph 2 of Article 26 are both present in this case. Thus Cipriano, the divorced Filipino spouse, should be allowed to remarry. We are also unable to sustain the OSGs theory that the proper remedy of the Filipino spouse is to file either a petition for annulment or a petition for legal separation. Annulment would be a long and tedious process, and in this particular case, not even feasible, considering that the marriage of the parties appears to have all the badges of validity. On the other hand, legal separation would not be a sufficient remedy for it would not sever the marriage tie; hence, the legally separated Filipino spouse would still remain married to the naturalized alien spouse. However, we note that the records are bereft of competent evidence duly submitted by respondent concerning the divorce decree and the naturalization of respondents wife. It is settled rule that one who alleges a fact has the burden of proving it and mere allegation is not evidence. [13]

Accordingly, for his plea to prosper, respondent herein must prove his allegation that his wife was naturalized as an American citizen. Likewise, before a foreign divorce decree can be recognized by our own courts, the party pleading it

must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it.[14] Such foreign law must also be proved as our courts cannot take judicial notice of foreign laws. Like any other fact, such laws must be alleged and proved.[15] Furthermore, respondent must also show that the divorce decree allows his former wife to remarry as specifically required in Article 26. Otherwise, there would be no evidence sufficient to declare that he is capacitated to enter into another marriage. Nevertheless, we are unanimous in our holding that Paragraph 2 of Article 26 of the Family Code (E.O. No. 209, as amended by E.O. No. 227), should be interpreted to allow a Filipino citizen, who has been divorced by a spouse who had acquired foreign citizenship and remarried, also to remarry. However, considering that in the present petition there is no sufficient evidence submitted and on record, we are unable to declare, based on respondents bare allegations that his wife, who was naturalized as an American citizen, had obtained a divorce decree and had remarried an American, that respondent is now capacitated to remarry. Such

declaration could only be made properly upon respondents submission of the aforecited evidence in his favor. ACCORDINGLY, the petition by the Republic of the Philippines is GRANTED. The assailed Decision dated May 15, 2002, and Resolution dated July 4, 2002, of the Regional Trial Court of Molave, Zamboanga del Sur, Branch 23, are hereby SET ASIDE. No pronouncement as to costs. SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice

WE CONCUR:

HILARIO G. DAVIDE, JR. Chief Justice Chairman

CONSUELO YNARES-SANTIAGO Associate Justice

ANTONIO T. CARPIO Associate Justice

ADOLFO S. AZCUNA Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

HILARIO G. DAVIDE, JR. Chief Justice

[1] [2] [3] [4] [5] [6] [7]

Rollo, pp. 20-22. Id. at 27-29. Id. at 21-22. Id. at 105. Id. at 106-110. Id. at 110. Sec. 12. The State recognizes the sanctity of family life and shall protect and strengthen the family as a basic autonomous social institution. It shall equally protect the life of the mother and the life of the unborn from conception. The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the support of the Government.

Office of the Ombudsman v. Ibay, G.R. No. 137538, 3 September 2001, 364 SCRA 281, 286, citing Galarosa v. Valencia, G.R. No. 109455, 11 November 1993, 227 SCRA 729, 737.
[8] [9] [10] [11] [12]

Held on January 27 and 28, 1988 and February 3, 1988. No. L-68470, 8 October 1985, 139 SCRA 139. G.R. No. 124862, 22 December 1998, 300 SCRA 406. Lopez & Sons, Inc. v. Court of Tax Appeals, No. L-9274, 1 February 1957, 100 Phil. 850, Cortes v. Court of Appeals, G.R. No. 121772, 13 January 2003, 395 SCRA 33, 38. Garcia v. Recio, G.R. No. 138322, 2 October 2001, 366 SCRA 437, 447. Id. at 451.

855.
[13] [14] [15]

THIRD DIVISION [G.R. No. 138322. October 2, 2001] GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO, petitioner, vs. REDERICK A. RECIO, respondent. DECISION PANGANIBAN, J.: A divorce obtained abroad by an alien may be recognized in our jurisdiction, provided such decree is valid according to the national law of the foreigner. However, the divorce decree and the governing personal law of the alien spouse who obtained the divorce must be proven. Our courts do not take judicial notice of foreign laws and judgments; hence, like any other facts, both the divorce decree and the national law of the alien must be alleged and proven according to our law on evidence. The Case Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to nullify the January 7, 1999 Decision and the March 24, 1999 Order of the Regional Trial Court of Cabanatuan City, Branch 28, in Civil Case No. 3026AF. The assailed Decision disposed as follows:

WHEREFORE, this Court declares the marriage between Grace J. Garcia and Rederick A. Recio solemnized on January 12, 1994 at Cabanatuan City as dissolved and both parties can now remarry under existing and applicable laws to any and/or both parties. The assailed Order denied reconsideration of the above-quoted Decision. The Facts Rederick A. Recio, a Filipino, was married to Editha Samson, an Australian citizen, in Malabon, Rizal, on March 1, 1987. They lived together as husband and wife in Australia. On May 18, 1989, a decree of divorce, purportedly dissolving the marriage, was issued by an Australian family court. On June 26, 1992, respondent became an Australian citizen, as shown by a Certificate of Australian Citizenship issued by the Australian government. Petitioner -- a Filipina -- and respondent were married on January 12, 1994 in Our Lady of Perpetual Help Church in Cabanatuan City. In their application for a marriage license, respondent was declared as single and Filipino. Starting October 22, 1995, petitioner and respondent lived separately without prior judicial dissolution of their marriage. While the two were still in Australia, their conjugal assets were divided on May 16, 1996, in accordance with their Statutory Declarations secured in Australia. On March 3, 1998, petitioner filed a Complaint for Declaration of Nullity of Marriage in the court a quo, on the ground of bigamy -- respondent allegedly had a prior subsisting marriage at the time he married her on January 12, 1994. She claimed that she learned of respondents marriage to Editha Samson only in November, 1997. In his Answer, respondent averred that, as far back as 1993, he had revealed to petitioner his prior marriage and its subsequent dissolution. He contended that his first marriage to an Australian citizen had been validly dissolved by a divorce decree obtained in Australia in 1989; thus, he was legally capacitated to marry petitioner in 1994. On July 7, 1998 -- or about five years after the couples wedding and while the suit for the declaration of nullity was pending -- respondent was able to secure a divorce decree from a family court in Sydney, Australia because the marriage ha[d] irretrievably broken down. Respondent prayed in his Answer that the Complaint be dismissed on the ground that it stated no cause of action. The Office of the Solicitor General agreed with respondent. The court marked and admitted the documentary evidence of both parties. After they submitted their respective memoranda, the case was submitted for resolution. Thereafter, the trial court rendered the assailed Decision and Order. Ruling of the Trial Court

The trial court declared the marriage dissolved on the ground that the divorce issued in Australia was valid and recognized in the Philippines. It deemed the marriage ended, but not on the basis of any defect in an essential element of the marriage; that is, respondents alleged lack of legal capacity to remarry. Rather, it based its Decision on the divorce decree obtained by respondent. The Australian divorce had ended the marriage; thus, there was no more marital union to nullify or annul. Hence, this Petition. Issues Petitioner submits the following issues for our consideration: 1 The trial court gravely erred in finding that the divorce decree obtained in Australia by the respondent ipso facto terminated his first marriage to Editha Samson thereby capacitating him to contract a second marriage with the petitioner. 2 The failure of the respondent, who is now a naturalized Australian, to present a certificate of legal capacity to marry constitutes absence of a substantial requisite voiding the petitioners marriage to the respondent 3 The trial court seriously erred in the application of Art. 26 of the Family Code in this case. 4 The trial court patently and grievously erred in disregarding Arts. 11, 13, 21, 35, 40, 52 and 53 of the Family Code as the applicable provisions in this case. 5 The trial court gravely erred in pronouncing that the divorce decree obtained by the respondent in Australia ipso facto capacitated the parties to remarry, without first securing a recognition of the judgment granting the divorce decree before our courts. The Petition raises five issues, but for purposes of this Decision, we shall concentrate on two pivotal ones: (1) whether the divorce between respondent and Editha Samson was proven, and (2) whether respondent was proven to be legally capacitated to marry petitioner. Because of our ruling on these two, there is no more necessity to take up the rest. The Courts Ruling

The Petition is partly meritorious. First Issue: Proving the Divorce Between Respondent and Editha Samson Petitioner assails the trial courts recognition of the divorce between respondent and Editha Samson. Citing Adong v. Cheong Seng Gee, petitioner argues that the divorce decree, like any other foreign judgment, may be given recognition in this jurisdiction only upon proof of the existence of (1) the foreign law allowing absolute divorce and (2) the alleged divorce decree itself. She adds that respondent miserably failed to establish these elements. Petitioner adds that, based on the first paragraph of Article 26 of the Family Code, marriages solemnized abroad are governed by the law of the place where they were celebrated (the lex loci celebrationis). In effect, the Code requires the presentation of the foreign law to show the conformity of the marriage in question to the legal requirements of the place where the marriage was performed. At the outset, we lay the following basic legal principles as the take-off points for our discussion. Philippine law does not provide for absolute divorce; hence, our courts cannot grant it. A marriage between two Filipinos cannot be dissolved even by a divorce obtained abroad, because of Articles 15 and 17 of the Civil Code. In mixed marriages involving a Filipino and a foreigner, Article 26 of the Family Code allows the former to contract a subsequent marriage in case the divorce is validly obtained abroad by the alien spouse capacitating him or her to remarry. A divorce obtained abroad by a couple, who are both aliens, may be recognized in the Philippines, provided it is consistent with their respective national laws. A comparison between marriage and divorce, as far as pleading and proof are concerned, can be made. Van Dorn v. Romillo Jr. decrees that aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law. Therefore, before a foreign divorce decree can be recognized by our courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it. Presentation solely of the divorce decree is insufficient. Divorce as a Question of Fact Petitioner insists that before a divorce decree can be admitted in evidence, it must first comply with the registration requirements under Articles 11, 13 and 52 of the Family Code. These articles read as follows: ART. 11. Where a marriage license is required, each of the contracting parties shall file separately a sworn application for such license with the proper local civil registrar which shall specify the following: xxx xxx xxx

(5) annulled; xxx

If previously married, how, when and where the previous marriage was dissolved or xxx x x x

ART. 13. In case either of the contracting parties has been previously married, the applicant shall be required to ART. 13. In case either of the contracting parties has been previously married, the applicant shall be required to furnish, instead of the birth or baptismal certificate required in the last preceding article, the death certificate of the deceased spouse or the judicial decree of the absolute divorce, or the judicial decree of annulment or declaration of nullity of his or her previous marriage. x x x. ART. 52. The judgment of annulment or of absolute nullity of the marriage, the partition and distribution of the properties of the spouses, and the delivery of the childrens presumptive legitimes shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall not affect their persons. Respondent, on the other hand, argues that the Australian divorce decree is a public document -a written official act of an Australian family court. Therefore, it requires no further proof of its authenticity and due execution. Respondent is getting ahead of himself. Before a foreign judgment is given presumptive evidentiary value, the document must first be presented and admitted in evidence. A divorce obtained abroad is proven by the divorce decree itself. Indeed the best evidence of a judgment is the judgment itself. The decree purports to be a written act or record of an act of an official body or tribunal of a foreign country. Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office. The divorce decree between respondent and Editha Samson appears to be an authentic one issued by an Australian family court. However, appearance is not sufficient; compliance with the aforementioned rules on evidence must be demonstrated. Fortunately for respondents cause, when the divorce decree of May 18, 1989 was submitted in evidence, counsel for petitioner objected, not to its admissibility, but only to the fact that it had not been registered in the Local Civil Registry of Cabanatuan City. The trial court ruled that it was admissible, subject to petitioners qualification. Hence, it was admitted in evidence and accorded weight by the judge. Indeed, petitioners failure to object properly rendered the divorce decree admissible as a written act of the Family Court of Sydney, Australia.

Compliance with the quoted articles (11, 13 and 52) of the Family Code is not necessary; respondent was no longer bound by Philippine personal laws after he acquired Australian citizenship in 1992. Naturalization is the legal act of adopting an alien and clothing him with the political and civil rights belonging to a citizen. Naturalized citizens, freed from the protective cloak of their former states, don the attires of their adoptive countries. By becoming an Australian, respondent severed his allegiance to the Philippines and the vinculum juris that had tied him to Philippine personal laws. Burden of Proving Australian Law Respondent contends that the burden to prove Australian divorce law falls upon petitioner, because she is the party challenging the validity of a foreign judgment. He contends that petitioner was satisfied with the original of the divorce decree and was cognizant of the marital laws of Australia, because she had lived and worked in that country for quite a long time. Besides, the Australian divorce law is allegedly known by Philippine courts; thus, judges may take judicial notice of foreign laws in the exercise of sound discretion. We are not persuaded. The burden of proof lies with the party who alleges the existence of a fact or thing necessary in the prosecution or defense of an action. In civil cases, plaintiffs have the burden of proving the material allegations of the complaint when those are denied by the answer; and defendants have the burden of proving the material allegations in their answer when they introduce new matters. Since the divorce was a defense raised by respondent, the burden of proving the pertinent Australian law validating it falls squarely upon him. It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign laws. Like any other facts, they must be alleged and proved. Australian marital laws are not among those matters that judges are supposed to know by reason of their judicial function. The power of judicial notice must be exercised with caution, and every reasonable doubt upon the subject should be resolved in the negative. Second Issue: Respondents Legal Capacity to Remarry Petitioner contends that, in view of the insufficient proof of the divorce, respondent was legally incapacitated to marry her in 1994. Hence, she concludes that their marriage was void ab initio. Respondent replies that the Australian divorce decree, which was validly admitted in evidence, adequately established his legal capacity to marry under Australian law. Respondents contention is untenable. In its strict legal sense, divorce means the legal dissolution of a lawful union for a cause arising after marriage. But divorces are of different types. The two basic ones are (1) absolute divorce or a vinculo matrimonii and (2) limited divorce or a mensa et thoro. The first kind terminates the marriage, while the second suspends it and leaves the bond in full force. There is no showing in the case at bar which type of divorce was procured by respondent.

Respondent presented a decree nisi or an interlocutory decree -- a conditional or provisional judgment of divorce. It is in effect the same as a separation from bed and board, although an absolute divorce may follow after the lapse of the prescribed period during which no reconciliation is effected. Even after the divorce becomes absolute, the court may under some foreign statutes and practices, still restrict remarriage. Under some other jurisdictions, remarriage may be limited by statute; thus, the guilty party in a divorce which was granted on the ground of adultery may be prohibited from marrying again. The court may allow a remarriage only after proof of good behavior. On its face, the herein Australian divorce decree contains a restriction that reads: 1. A party to a marriage who marries again before this decree becomes absolute (unless the other party has died) commits the offence of bigamy. This quotation bolsters our contention that the divorce obtained by respondent may have been restricted. It did not absolutely establish his legal capacity to remarry according to his national law. Hence, we find no basis for the ruling of the trial court, which erroneously assumed that the Australian divorce ipso facto restored respondents capacity to remarry despite the paucity of evidence on this matter. We also reject the claim of respondent that the divorce decree raises a disputable presumption or presumptive evidence as to his civil status based on Section 48, Rule 39 of the Rules of Court, for the simple reason that no proof has been presented on the legal effects of the divorce decree obtained under Australian laws. Significance of the Certificate of Legal Capacity Petitioner argues that the certificate of legal capacity required by Article 21 of the Family Code was not submitted together with the application for a marriage license. According to her, its absence is proof that respondent did not have legal capacity to remarry. We clarify. To repeat, the legal capacity to contract marriage is determined by the national law of the party concerned. The certificate mentioned in Article 21 of the Family Code would have been sufficient to establish the legal capacity of respondent, had he duly presented it in court. A duly authenticated and admitted certificate is prima facie evidence of legal capacity to marry on the part of the alien applicant for a marriage license. As it is, however, there is absolutely no evidence that proves respondents legal capacity to marry petitioner. A review of the records before this Court shows that only the following exhibits were presented before the lower court: (1) for petitioner: (a) Exhibit A Complaint; (b) Exhibit B Certificate of Marriage Between Rederick A. Recio (Filipino-Australian) and Grace J. Garcia (Filipino) on January 12, 1994 in Cabanatuan City, Nueva Ecija; (c) Exhibit C Certificate of Marriage Between Rederick A. Recio (Filipino) and Editha D. Samson (Australian) on March 1, 1987 in Malabon, Metro Manila; (d) Exhibit D Office of the City

Registrar of Cabanatuan City Certification that no information of annulment between Rederick A. Recio and Editha D. Samson was in its records; and (e) Exhibit E Certificate of Australian Citizenship of Rederick A. Recio; (2) for respondent: (a) Exhibit 1 -- Amended Answer; (b) Exhibit 2 Family Law Act 1975 Decree Nisi of Dissolution of Marriage in the Family Court of Australia; (c) Exhibit 3 Certificate of Australian Citizenship of Rederick A. Recio; (d) Exhibit 4 Decree Nisi of Dissolution of Marriage in the Family Court of Australia Certificate; and Exhibit 5 -- Statutory Declaration of the Legal Separation Between Rederick A. Recio and Grace J. Garcia Recio since October 22, 1995. Based on the above records, we cannot conclude that respondent, who was then a naturalized Australian citizen, was legally capacitated to marry petitioner on January 12, 1994. We agree with petitioners contention that the court a quo erred in finding that the divorce decree ipso facto clothed respondent with the legal capacity to remarry without requiring him to adduce sufficient evidence to show the Australian personal law governing his status; or at the very least, to prove his legal capacity to contract the second marriage. Neither can we grant petitioners prayer to declare her marriage to respondent null and void on the ground of bigamy. After all, it may turn out that under Australian law, he was really capacitated to marry petitioner as a direct result of the divorce decree. Hence, we believe that the most judicious course is to remand this case to the trial court to receive evidence, if any, which show petitioners legal capacity to marry petitioner. Failing in that, then the court a quo may declare a nullity of the parties marriage on the ground of bigamy, there being already in evidence two existing marriage certificates, which were both obtained in the Philippines, one in Malabon, Metro Manila dated March 1, 1987 and the other, in Cabanatuan City dated January 12, 1994. WHEREFORE, in the interest of orderly procedure and substantial justice, we REMAND the case to the court a quo for the purpose of receiving evidence which conclusively show respondents legal capacity to marry petitioner; and failing in that, of declaring the parties marriage void on the ground of bigamy, as above discussed. No costs. SO ORDERED. Melo, (Chairman), Vitug, and Sandoval-Gutierrez, JJ., concur. Penned by Judge Feliciano V. Buenaventura; rollo, pp. 7-9. Rollo, p. 10. Ibid., p. 9. Rollo, p. 37. Ibid., p. 47. Id., p. 44.

Id., p. 36. Annex 1; temporary rollo, p. 9. The couple secured an Australian Statutory Declaration of their legal separation and division of conjugal assets. See Annexes 3 and 4 of Respondents Comment; rollo, p. 48. Id., pp. 33-35. Id., p. 39. Amended Answer, p. 2; rollo, p. 39. Id., pp. 77-78. Id., p. 43. Rollo, pp. 48-51. TSN, December 16, 1998, pp. 1-8; records, pp. 172-179. RTC Order of December 16, 1998; ibid., p. 203. The case was deemed submitted for decision on January 11, 2000, upon this Courts receipt of the Memorandum for petitioner, signed by Atty. Olivia Velasco-Jacoba. The Memorandum for respondent, signed by Atty. Gloria V. Gomez of Gomez and Associates, had been filed on December 10, 1999.
Petitioners Memorandum, pp. 8-9; rollo, pp. 242-243.

43 Phil. 43, 49, March 3, 1922. Ruben F. Balane, Family Courts and Significant Jurisprudence in Family Law, Journal of the Integrated Bar of the Philippines, 1st & 2nd Quarters, 2001, Vol. XXVII, No. 1, p. 25. ART. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. ART. 17. The forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed. xxx xxx xxx

Prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. Tenchaves v. Escano 15 SCRA 355, 362, November 29, 1965; Barretto Gonzalez v. Gonzalez, 58 Phil. 67, 71-72, March 7, 1933. Art. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5), and (6), 36, 37, and 38. (71a) Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law. (As amended by EO 227, prom. July 27, 1987) Cf. Van Dorn v. Romillo Jr., 139 SCRA 139, 143-144, October 8, 1985; and Pilapil v. IbaySomera, 174 SCRA 653, 663, June 30, 1989. Van Dorn v. Romillo Jr., supra. Ibid., p. 143. For a detailed discussion of Van Dorn, see Salonga, Private International Law, 1995 ed. pp. 295300. See also Jose C. Vitug, Compendium of Civil Law and Jurisprudence, 1993 ed., p. 16; SEC. 19. Classes of documents.For the purpose of their presentation in evidence, documents are either public or private. Public documents are: (a) The written official acts, or records of the official acts of the sovereign authority, official bodies and tribunals, and public officers, whether in the Philippines, or of a foreign country. xxx xxx x x x.

Burr W. Jones, Commentaries on the Law of Evidence in Civil Cases, Vol. IV, 1926 ed., p. 3511; 3, Rule 130 of the Rules on Evidence provides that when the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself. SEC. 19. Classes of documents. For the purpose of their presentation in evidence, documents are either public or private. Public documents are:

(a) The written official acts, or records of the official acts of the sovereign authority, official bodies and tribunals, and public officers, whether in the Philippines, or of a foreign country. xxx xxx x x x.

Sec. 25. What attestation of copy must state. Whenever a copy of a document or record is attested for the purpose of evidence, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court having a seal, under the seal of such court. Sec. 24. Proof of official record.The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, viceconsul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. See also Asiavest Ltd. v. Court of Appeals, 296 SCRA 539, 550-551, September 25, 1998; Pacific Asia Overseas Shipping Corp. v. National Labor Relations Commission, 161 SCRA 122, 133-134, May 6, 1988. The transcript of stenographic notes states that the original copies of the divorce decrees were presented in court (TSN, December 16, 1998, p. 5; records, p. 176), but only photocopies of the same documents were attached to the records (Records, Index of Exhibits, p. 1.). TSN, December 15, 1998, p. 7; records, p. 178. TSN, December 16, 1998, p. 7; records, p. 178. People v. Yatco, 97 Phil. 941, 945, November 28, 1955; Marella v. Reyes, 12 Phil. 1, 3, November 10, 1908; People v. Diaz, 271 SCRA 504, 516, April 18, 1997; De la Torre v. Court of Appeals, 294 SCRA 196, 203-204, August 14, 1998; Maunlad Savings & Loan Asso., Inc. v. Court of Appeals, GR No. 114942, November 27, 2000, pp. 8-9. Art. 15, Civil Code. Joaquin Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, 1996 ed., p. 566. Ricardo J. Francisco, Evidence: Rules of Court in the Philippines, second edition, p. 382. Ibid., p. 384.

Wildvalley Shipping Co., Ltd. v. Court of Appeals, GR No. 119602, October 6, 2000, p. 7. Francisco, p. 29, citing De los Angeles v. Cabahug, 106 Phil. 839, December 29, 1959. 27A CJS, 15-17, 1. Ibid., p. 611-613, 161. 27A CJS, 625, 162. Rollo, p. 36. SEC. 48. Effect of foreign judgments or final orders.The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows: xxx xxx xxx

(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. In passing, we note that the absence of the said certificate is merely an irregularity in complying with the formal requirement for procuring a marriage license. Under Article 4 of the Family Code, an irregularity will not affect the validity of a marriage celebrated on the basis of a marriage license issued without that certificate. (Vitug, Compendium, pp. 120-126; Sempio-Diy, Handbook on the Family Code of the Philippines, 1997 reprint, p. 17; Rufus Rodriguez, The Family Code of the Philippines Annotated, 1990 ed., p. 42; Melencio Sta. Maria Jr., Persons and Family Relations Law, 1999 ed., p. 146.) Records, pp. 1-3. Ibid., p. 4. Id., p. 5. Id., p. 180. Id., pp. 170-171. Id., pp. 84-89. Id., pp. 181-182.

Id., pp. 40-41. Id., p. 183. Id., pp. 184-187. PHILIPPINE JURISPRUDENCE - FULL TEXT The Lawphil Project - Arellano Law Foundation G.R. No. 142820 June 20, 2003 WOLFGANG O. ROEHR vs. MARIA CARMEN D. RODRIGUEZ, ET AL. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 142820 June 20, 2003

WOLFGANG O. ROEHR, petitioner, vs. MARIA CARMEN D. RODRIGUEZ, HON. JUDGE JOSEFINA GUEVARASALONGA, Presiding Judge of Makati RTC, Branch 149, respondents. QUISUMBING, J.: At the core of the present controversy are issues of (a) grave abuse of discretion allegedly committed by public respondent and (b) lack of jurisdiction of the regional trial court, in matters that spring from a divorce decree obtained abroad by petitioner. In this special civil action for certiorari, petitioner assails (a) the order1 dated September 30, 1999 of public respondent Judge Josefina Guevara-Salonga, Presiding Judge of Makati Regional Trial Court,2 Branch 149, in Civil Case No. 96-1389 for declaration of nullity of marriage, and (b) the order3 dated March 31, 2000 denying his motion for reconsideration. The assailed orders partially set aside the trial courts order dismissing Civil Case No. 96-1389, for the purpose of resolving issues relating to the property settlement of the spouses and the custody of their children. Petitioner Wolfgang O. Roehr, a German citizen and resident of Germany, married private respondent Carmen Rodriguez, a Filipina, on December 11, 1980 in Hamburg, Germany. Their marriage was subsequently ratified on February 14, 1981 in Tayasan, Negros Oriental.4 Out of their union were born Carolynne and Alexandra Kristine on November 18, 1981 and October 25, 1987, respectively. On August 28, 1996, private respondent filed a petition5 for declaration of nullity of

marriage before the Regional Trial Court (RTC) of Makati City. On February 6, 1997, petitioner filed a motion to dismiss,6 but it was denied by the trial court in its order7 dated May 28, 1997. On June 5, 1997, petitioner filed a motion for reconsideration, but was also denied in an order8 dated August 13, 1997. On September 5, 1997, petitioner filed a petition for certiorari with the Court of Appeals. On November 27, 1998, the appellate court denied the petition and remanded the case to the RTC. Meanwhile, petitioner obtained a decree of divorce from the Court of First Instance of Hamburg-Blankenese, promulgated on December 16, 1997. The decree provides in part: [T]he Court of First Instance, Hamburg-Blankenese, Branch 513, has ruled through Judge van Buiren of the Court of First Instance on the basis of the oral proceedings held on 4 Nov. 1997: The marriage of the Parties contracted on 11 December 1980 before the Civil Registrar of Hamburg-Altona is hereby dissolved. The parental custody for the children Carolynne Roehr, born 18 November 1981 Alexandra Kristine Roehr, born on 25 October 1987 is granted to the father. The litigation expenses shall be assumed by the Parties.9 In view of said decree, petitioner filed a Second Motion to Dismiss on May 20, 1999 on the ground that the trial court had no jurisdiction over the subject matter of the action or suit as a decree of divorce had already been promulgated dissolving the marriage of petitioner and private respondent. On July 14, 1999, Judge Guevara-Salonga issued an order granting petitioners motion to dismiss. Private respondent filed a Motion for Partial Reconsideration, with a prayer that the case proceed for the purpose of determining the issues of custody of children and the distribution of the properties between petitioner and private respondent. On August 18, 1999, an Opposition to the Motion for Partial Reconsideration was filed by the petitioner on the ground that there is nothing to be done anymore in the instant case as the marital tie between petitioner Wolfgang Roehr and respondent Ma. Carmen D. Rodriguez had already been severed by the decree of divorce promulgated by the

Court of First Instance of Hamburg, Germany on December 16, 1997 and in view of the fact that said decree of divorce had already been recognized by the RTC in its order of July 14, 1999, through the implementation of the mandate of Article 26 of the Family Code,10 endowing the petitioner with the capacity to remarry under the Philippine law. On September 30, 1999, respondent judge issued the assailed order partially setting aside her order dated July 14, 1999 for the purpose of tackling the issues of property relations of the spouses as well as support and custody of their children. The pertinent portion of said order provides: Acting on the Motion for Partial Reconsideration of the Order dated July 14, 1999 filed by petitioner thru counsel which was opposed by respondent and considering that the second paragraph of Article 26 of the Family Code was included as an amendment thru Executive Order 227, to avoid the absurd situation of a Filipino as being still married to his or her alien spouse though the latter is no longer married to the Filipino spouse because he/she had obtained a divorce abroad which is recognized by his/her national law, and considering further the effects of the termination of the marriage under Article 43 in relation to Article 50 and 52 of the same Code, which include the dissolution of the property relations of the spouses, and the support and custody of their children, the Order dismissing this case is partially set aside with respect to these matters which may be ventilated in this Court. SO ORDERED.11 (Emphasis supplied.) Petitioner filed a timely motion for reconsideration on October 19, 1999, which was denied by respondent judge in an order dated March 31, 2000.12 Petitioner ascribes lack of jurisdiction of the trial court and grave abuse of discretion on the part of respondent judge. He cites as grounds for his petition the following: 1. Partially setting aside the order dated July 14, 1999 dismissing the instant case is not allowed by 1997 Rules of Civil Procedure.13 2. Respondent Maria Carmen Rodriguez by her motion for Partial Reconsideration had recognized and admitted the Divorce Decision obtained by her ex-husband in Hamburg, Germany.14 3. There is nothing left to be tackled by the Honorable Court as there are no conjugal assets alleged in the Petition for Annulment of Marriage and in the Divorce petition, and the custody of the children had already been awarded to Petitioner Wolfgang Roehr.15 Pertinent in this case before us are the following issues:

1. Whether or not respondent judge gravely abused her discretion in issuing her order dated September 30, 1999, which partially modified her order dated July 14, 1999; and 2. Whether or not respondent judge gravely abused her discretion when she assumed and retained jurisdiction over the present case despite the fact that petitioner has already obtained a divorce decree from a German court. On the first issue, petitioner asserts that the assailed order of respondent judge is completely inconsistent with her previous order and is contrary to Section 3, Rule 16, Rules of Civil Procedure, which provides: Sec. 3. Resolution of motion - After the hearing, the court may dismiss the action or claim, deny the motion, or order the amendment of the pleading. The court shall not defer the resolution of the motion for the reason that the ground relied upon is not indubitable. In every case, the resolution shall state clearly and distinctly the reasons therefor. (Emphasis supplied.) Petitioner avers that a courts action on a motion is limited to dismissing the action or claim, denying the motion, or ordering the amendment of the pleading. Private respondent, on her part, argues that the RTC can validly reconsider its order dated July 14, 1999 because it had not yet attained finality, given the timely filing of respondents motion for reconsideration. Pertinent to this issue is Section 3 in relation to Section 7, Rule 37 of the 1997 Rules of Civil Procedure, which provides: Sec. 3. Action upon motion for new trial or reconsideration.The trial court may set aside the judgment or final order and grant a new trial, upon such terms as may be just, or may deny the motion. If the court finds that excessive damages have been awarded or that the judgment or final order is contrary to the evidence or law, it may amend such judgment or final order accordingly. Sec. 7. Partial new trial or reconsideration.If the grounds for a motion under this Rule appear to the court to affect the issues as to only a part, or less than all of the matters in controversy, or only one, or less than all, of the parties to it, the court may order a new trial or grant reconsideration as to such issues if severable without interfering with the judgment or final order upon the rest. (Emphasis supplied.) It is clear from the foregoing rules that a judge can order a partial reconsideration of a

case that has not yet attained finality. Considering that private respondent filed a motion for reconsideration within the reglementary period, the trial court's decision of July 14, 1999 can still be modified. Moreover, in Saado v. Court of Appeals,16 we held that the court could modify or alter a judgment even after the same has become executory whenever circumstances transpire rendering its decision unjust and inequitable, as where certain facts and circumstances justifying or requiring such modification or alteration transpired after the judgment has become final and executory17 and when it becomes imperative in the higher interest of justice or when supervening events warrant it.18 In our view, there are even more compelling reasons to do so when, as in this case, judgment has not yet attained finality. Anent the second issue, petitioner claims that respondent judge committed grave abuse of discretion when she partially set aside her order dated July 14, 1999, despite the fact that petitioner has already obtained a divorce decree from the Court of First Instance of Hamburg, Germany. In Garcia v. Recio,19 Van Dorn v. Romillo, Jr.,20 and Llorente v. Court of Appeals,21 we consistently held that a divorce obtained abroad by an alien may be recognized in our jurisdiction, provided such decree is valid according to the national law of the foreigner. Relevant to the present case is Pilapil v. Ibay-Somera,22 where this Court specifically recognized the validity of a divorce obtained by a German citizen in his country, the Federal Republic of Germany. We held in Pilapil that a foreign divorce and its legal effects may be recognized in the Philippines insofar as respondent is concerned in view of the nationality principle in our civil law on the status of persons. In this case, the divorce decree issued by the German court dated December 16, 1997 has not been challenged by either of the parties. In fact, save for the issue of parental custody, even the trial court recognized said decree to be valid and binding, thereby endowing private respondent the capacity to remarry. Thus, the present controversy mainly relates to the award of the custody of their two children, Carolynne and Alexandra Kristine, to petitioner. As a general rule, divorce decrees obtained by foreigners in other countries are recognizable in our jurisdiction, but the legal effects thereof, e.g. on custody, care and support of the children, must still be determined by our courts.23 Before our courts can give the effect of res judicata to a foreign judgment, such as the award of custody to petitioner by the German court, it must be shown that the parties opposed to the judgment had been given ample opportunity to do so on grounds allowed under Rule 39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997 Rules of Civil Procedure), to wit: SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of a foreign country, having jurisdiction to pronounce the judgment is as follows: (a) In case of a judgment upon a specific thing, the judgment is conclusive upon

the title to the thing; (b) In case of a judgment against a person, the judgment is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title; but the judgment may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. It is essential that there should be an opportunity to challenge the foreign judgment, in order for the court in this jurisdiction to properly determine its efficacy. In this jurisdiction, our Rules of Court clearly provide that with respect to actions in personam, as distinguished from actions in rem, a foreign judgment merely constitutes prima facie evidence of the justness of the claim of a party and, as such, is subject to proof to the contrary.24 In the present case, it cannot be said that private respondent was given the opportunity to challenge the judgment of the German court so that there is basis for declaring that judgment as res judicata with regard to the rights of petitioner to have parental custody of their two children. The proceedings in the German court were summary. As to what was the extent of private respondents participation in the proceedings in the German court, the records remain unclear. The divorce decree itself states that neither has she commented on the proceedings25 nor has she given her opinion to the Social Services Office.26 Unlike petitioner who was represented by two lawyers, private respondent had no counsel to assist her in said proceedings.27 More importantly, the divorce judgment was issued to petitioner by virtue of the German Civil Code provision to the effect that when a couple lived separately for three years, the marriage is deemed irrefutably dissolved. The decree did not touch on the issue as to who the offending spouse was. Absent any finding that private respondent is unfit to obtain custody of the children, the trial court was correct in setting the issue for hearing to determine the issue of parental custody, care, support and education mindful of the best interests of the children. This is in consonance with the provision in the Child and Youth Welfare Code that the childs welfare is always the paramount consideration in all questions concerning his care and custody. 28 On the matter of property relations, petitioner asserts that public respondent exceeded the bounds of her jurisdiction when she claimed cognizance of the issue concerning property relations between petitioner and private respondent. Private respondent herself has admitted in Par. 14 of her petition for declaration of nullity of marriage dated August 26, 1996 filed with the RTC of Makati, subject of this case, that: "[p]etitioner and respondent have not acquired any conjugal or community property nor have they incurred any debts during their marriage."29 Herein petitioner did not contest this averment. Basic is the rule that a court shall grant relief warranted by the allegations and the proof.30 Given the factual admission by the parties in their pleadings that there is no property to be accounted for, respondent judge has no basis to assert jurisdiction

in this case to resolve a matter no longer deemed in controversy. In sum, we find that respondent judge may proceed to determine the issue regarding the custody of the two children born of the union between petitioner and private respondent. Private respondent erred, however, in claiming cognizance to settle the matter of property relations of the parties, which is not at issue. WHEREFORE, the orders of the Regional Trial Court of Makati, Branch 149, issued on September 30, 1999 and March 31, 2000 are AFFIRMED with MODIFICATION. We hereby declare that the trial court has jurisdiction over the issue between the parties as to who has parental custody, including the care, support and education of the children, namely Carolynne and Alexandra Kristine Roehr. Let the records of this case be remanded promptly to the trial court for continuation of appropriate proceedings. No pronouncement as to costs. SO ORDERED. Bellosillo, (Chairman), and Callejo, Sr., JJ., concur. Austria-Martinez, J., on official leave.

Footnotes
1

Rollo, p. 15. Judge Josefina Guevara-Salonga signed as Executive Judge. Rollo, p. 16. Records, pp. 5-6. Id. at 1-4. Id. at 19-28. Id. at 147. Id. at 165. Rollo, p. 33.

10

Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles

35 (1), (4), (5) and (6), 36, 37 and 38. Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law. (As amended by E. O. No. 227, dated July 17, 1987.)
11

Supra, note 1. Supra, note 3. Rollo, p. 6. Id. at 8. Ibid. G.R. No. 108338, 17 April 2001, 356 SCRA 546, 561.

12

13

14

15

16

17

David v. Court of Appeals, G.R. No. 115821, 13 October 1999, 316 SCRA 710, 719.
18

People v. Gallo, G.R. No. 124736, 29 September 1999, 315 SCRA 461, 463. G.R. No. 138322, 2 October 2001, 366 SCRA 437, 447. No. L-68470, 8 October 1985, 139 SCRA 139, 143. G.R. No. 124371, 23 November 2000, 345 SCRA 592, 601. G.R. No. 80116, 30 June 1989, 174 SCRA 653, 663. Llorente v. Court of Appeals, supra at 602.

19

20

21

22

23

24

Philsec Investment Corporation v. Court of Appeals, G.R. No. 103493, 19 June 1997, 274 SCRA 102, 110.
25

Rollo, p. 57. Ibid. Id. at 55-56. Sagala-Eslao v. Court of Appeals, G.R. No. 116773, 16 January 1997, 266

26

27

28

SCRA 317, 321, citing Art. 8, P.D. No. 603, The Child and Youth Welfare CodeArt. 8. Childs Welfare Paramount. - In all questions regarding the care, custody, education and property of the child, his welfare shall be the paramount consideration.
29

Rollo, p. 19.

30

JG Summit Holdings, Inc. v. Court of Appeals, G.R. No. 124293, 20 November 2000, 345 SCRA 143, 154. The Lawphil Project - Arellano Law Foundation

FIRST DIVISION

ALONZO Q. ANCHETA, Petitioner,

G.R. No. 139868

Present:

PANGANIBAN, C.J. (Chairperson) - versus YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, SR., and

CHICO-NAZARIO, JJ.
CANDELARIA GUERSEYDALAYGON, Respondent. Promulgated: June 8, 2006

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

AUSTRIA-MARTINEZ, J.:

Spouses Audrey ONeill (Audrey) and W. Richard Guersey (Richard) were American citizens who have resided in the Philippines for 30 years. They have an adopted daughter, Kyle Guersey Hill (Kyle). On July 29, 1979, Audrey died, leaving a will. In it, she bequeathed her entire estate to Richard, who was also designated as executor. The will was admitted to probate before the Orphans Court of Baltimore, Maryland, U.S.A, which named James N. Phillips as executor due to Richards renunciation of his appointment. The court also named Atty. Alonzo Q. Ancheta (petitioner) of the Quasha Asperilla Ancheta Pena & Nolasco Law Offices as ancillary administrator.

In 1981, Richard married Candelaria Guersey-Dalaygon (respondent) with whom he has two children, namely, Kimberly and Kevin.

On October 12, 1982, Audreys will was also admitted to probate by the then Court of First Instance of Rizal, Branch 25, Seventh Judicial District, Pasig, in Special Proceeding No. 9625. As administrator of Audreys estate in the Philippines, petitioner filed an inventory and appraisal of the following properties: (1) Audreys conjugal share in real estate with improvements located at 28 Pili Avenue, Forbes Park, Makati, Metro Manila, valued at P764,865.00 (Makati property); (2) a current account in Audreys name with a cash balance of P12,417.97; and (3) 64,444 shares of stock in A/G Interiors, Inc. worth P64,444.00.

On July 20, 1984, Richard died, leaving a will, wherein he bequeathed his entire estate to respondent, save for his rights and interests over the A/G Interiors, Inc. shares, which he left to Kyle. The will was also admitted to probate by the Orphans Court of Ann Arundel, Maryland, U.S.A, and James N. Phillips was likewise appointed as executor, who in turn, designated Atty. William Quasha or any member of the Quasha Asperilla Ancheta Pena & Nolasco Law Offices, as ancillary administrator.

Richards will was then submitted for probate before the Regional Trial Court of Makati, Branch 138, docketed as Special Proceeding No. M-888. Atty. Quasha was appointed as ancillary administrator on July 24, 1986.

On October 19, 1987, petitioner filed in Special Proceeding No. 9625, a motion to declare Richard and Kyle as heirs of Audrey. Petitioner also filed on October 23, 1987, a project of partition of Audreys estate, with Richard being apportioned the undivided interest in the Makati property, 48.333 shares in A/G Interiors, Inc., and P9,313.48 from the Citibank current account; and Kyle, the undivided interest in the Makati property, 16,111 shares in A/G Interiors, Inc., and P3,104.49 in cash.

The motion and project of partition was granted and approved by the trial court in its Order dated February 12, 1988. The trial court also issued an Order on April 7, 1988, directing the Register of Deeds of Makati to cancel TCT No. 69792 in the name of Richard and to issue a new title in the joint names of the Estate of W. Richard Guersey ( undivided interest) and Kyle ( undivided interest); directing the Secretary of A/G Interiors, Inc. to transfer 48.333 shares to the Estate of W. Richard Guersey and 16.111 shares to Kyle; and directing the Citibank to release the amount of P12,417.97 to the ancillary administrator for distribution to the heirs.

Consequently, the Register of Deeds of Makati issued on June 23, 1988, TCT No. 155823 in the names of the Estate of W. Richard Guersey and Kyle.

Meanwhile, the ancillary administrator in Special Proceeding No. M-888 also filed a project of partition wherein 2/5 of Richards undivided interest in the Makati property was allocated to respondent, while 3/5 thereof were allocated to Richards three children. This was opposed by respondent on the ground that under the law of the State of Maryland, a legacy passes to the legatee the entire interest of the testator in the property subject of the legacy. Since Richard left his entire estate to respondent, except for his rights and interests over the A/G Interiors, Inc, shares, then his entire undivided interest in the Makati property should be given to respondent.

The trial court found merit in respondents opposition, and in its Order dated December 6, 1991, disapproved the project of partition insofar as it affects the Makati property. The trial court also adjudicated Richards entire undivided interest in the Makati property to respondent.

On October 20, 1993, respondent filed with the Court of Appeals (CA) an amended complaint for the annulment of the trial courts Orders dated February 12, 1988 and April 7, 1988, issued in Special Proceeding No. 9625. Respondent contended that petitioner willfully breached his fiduciary duty when he disregarded the laws of the State of Maryland on the distribution of Audreys estate in accordance with her will. Respondent argued that since Audrey devised her entire estate to Richard, then the Makati property should be wholly adjudicated to him, and not merely thereof, and since Richard left his entire estate, except for his rights and interests over the A/G Interiors, Inc., to respondent, then the entire Makati property should now pertain to respondent.

Petitioner filed his Answer denying respondents allegations. Petitioner contended that he acted in good faith in submitting the project of partition before the trial court in Special Proceeding No. 9625, as he had no knowledge of the State of Marylands laws on testate and intestate succession. Petitioner alleged that he believed that it is to the best interests of the surviving children that Philippine law be applied as they would receive their just shares. Petitioner also alleged that the orders sought to be annulled are already final and executory, and cannot be set aside.

On March 18, 1999, the CA rendered the assailed Decision annulling the trial courts Orders dated February 12, 1988 and April 7, 1988, in Special Proceeding No. 9625. The dispositive portion of the assailed Decision provides:

WHEREFORE, the assailed Orders of February 12, 1998 and April 7, 1988 are hereby ANNULLED and, in lieu thereof, a new one is entered ordering:

(a) The adjudication of the entire estate of Audrey ONeill Guersey in favor of the estate of W. Richard Guersey; and

(b) The cancellation of Transfer Certificate of Title No. 15583 of the Makati City Registry and the issuance of a new title in the name of the estate of W. Richard Guersey.

SO ORDERED.

Petitioner filed a motion for reconsideration, but this was denied by the CA per Resolution dated August 27, 1999.

Hence, the herein petition for review on certiorari under Rule 45 of the Rules of Court alleging that the CA gravely erred in not holding that:

A) THE ORDERS OF 12 FEBRUARY 1988 AND 07 APRIL 1988 IN SPECIAL PROCEEDINGS NO. 9625 IN THE MATTER OF THE PETITION FOR PROBATE OF THE WILL OF THE DECEASED AUDREY GUERSEY, ALONZO Q. ANCHETA, ANCILLARY ADMINISTRATOR, ARE VALID AND BINDING AND HAVE LONG BECOME FINAL AND HAVE BEEN FULLY IMPLEMENTED AND EXECUTED AND CAN NO LONGER BE ANNULLED.

B) THE ANCILLARY ADMINISTRATOR HAVING ACTED IN GOOD FAITH, DID NOT COMMIT FRAUD, EITHER EXTRINSIC OR INTRINSIC, IN THE PERFORMANCE OF HIS DUTIES AS ANCILLARY ADMINISTRATOR OF AUDREY ONEIL GUERSEYS ESTATE IN THE PHILIPPINES, AND THAT NO FRAUD, EITHER EXTRINSIC OR INTRINSIC, WAS EMPLOYED BY [HIM] IN PROCURING SAID ORDERS.

Petitioner reiterates his arguments before the CA that the Orders dated February 12, 1988 and April 7, 1988 can no longer be annulled because it is a final judgment, which is conclusive upon the administration as to all matters involved in such judgment or order, and will determine for all time and in all courts, as far as the parties to the proceedings are concerned, all matters therein determined, and the same has already been executed. Petitioner also contends that that he acted in good faith in performing his duties as an ancillary administrator. He maintains that at the time of the filing of the project of partition, he was not aware of the relevant laws of the State of Maryland, such that the partition was made in accordance with Philippine laws. Petitioner also imputes knowledge on the part of respondent with regard to the terms of Aubreys will, stating that as early as 1984, he already apprised respondent of the contents of the will and how the estate will be divided. Respondent argues that petitioners breach of his fiduciary duty as ancillary administrator of Aubreys estate amounted to extrinsic fraud. According to respondent, petitioner was duty-bound to follow the express terms of Aubreys will, and his denial of knowledge of the laws of Maryland cannot stand because petitioner is a senior partner in a prestigious law firm and it was his duty to know the relevant laws.

Respondent also states that she was not able to file any opposition to the project of partition because she was not a party thereto and she learned of the provision of Aubreys will bequeathing entirely her estate to Richard only after Atty. Ancheta filed a project of partition in Special Proceeding No. M-888 for the settlement of Richards estate.

A decree of distribution of the estate of a deceased person vests the title to the land of the estate in the distributees, which, if erroneous may be corrected by a timely appeal. Once it becomes final, its binding effect is like any other judgment in rem. However, in exceptional cases, a final decree of distribution of the estate may be set aside for lack of jurisdiction or fraud. Further, in Ramon v. Ortuzar, the Court ruled that a party interested in a probate proceeding may have a final liquidation set aside when he is left out by reason of circumstances beyond his control or through mistake or inadvertence not imputable to negligence.

The petition for annulment was filed before the CA on October 20, 1993, before the issuance of the 1997 Rules of Civil Procedure; hence, the applicable law is Batas Pambansa Blg. 129 (B.P. 129) or the Judiciary Reorganization Act of 1980. An annulment of judgment filed under B.P. 129 may be based on the ground that a judgment is void for want of jurisdiction or that the judgment was obtained by extrinsic fraud. For fraud to become a basis for annulment of judgment, it has to be extrinsic or actual, and must be brought within four years from the discovery of the fraud.

In the present case, respondent alleged extrinsic fraud as basis for the annulment of the RTC Orders dated February 12, 1988 and April 7, 1988. The CA found merit in respondents cause and found that petitioners failure to follow the terms of Audreys will, despite the latters declaration of good faith, amounted to extrinsic fraud. The CA ruled that under Article 16 of the Civil Code, it is the national law of the decedent that is applicable, hence, petitioner should have distributed Aubreys estate in accordance with the terms of her will. The CA also found that petitioner was prompted to distribute Audreys estate in accordance with Philippine laws in order to equally benefit Audrey and Richard Guerseys adopted daughter, Kyle Guersey Hill.

Petitioner contends that respondents cause of action had already prescribed because as early as 1984, respondent was already well aware of the terms of Audreys will, and the complaint was filed only in 1993. Respondent, on the other hand, justified her lack of immediate action by saying that she had no opportunity to question petitioners acts since she was not a

party to Special Proceeding No. 9625, and it was only after Atty. Ancheta filed the project of partition in Special Proceeding No. M-888, reducing her inheritance in the estate of Richard that she was prompted to seek another counsel to protect her interest.

It should be pointed out that the prescriptive period for annulment of judgment based on extrinsic fraud commences to run from the discovery of the fraud or fraudulent act/s. Respondents knowledge of the terms of Audreys will is immaterial in this case since it is not the fraud complained of. Rather, it is petitioners failure to introduce in evidence the pertinent law of the State of Maryland that is the fraudulent act, or in this case, omission, alleged to have been committed against respondent, and therefore, the four-year period should be counted from the time of respondents discovery thereof.

Records bear the fact that the filing of the project of partition of Richards estate, the opposition thereto, and the order of the trial court disallowing the project of partition in Special Proceeding No. M-888 were all done in 1991. Respondent cannot be faulted for letting the assailed orders to lapse into finality since it was only through Special Proceeding No. M-888 that she came to comprehend the ramifications of petitioners acts. Obviously, respondent had no other recourse under the circumstances but to file the annulment case. Since the action for annulment was filed in 1993, clearly, the same has not yet prescribed.

Fraud takes on different shapes and faces. In Cosmic Lumber Corporation v. Court of Appeals, the Court stated that man in his ingenuity and fertile imagination will always contrive new schemes to fool the unwary.

There is extrinsic fraud within the meaning of Sec. 9 par. (2), of B.P. Blg. 129, where it is one the effect of which prevents a party from hearing a trial, or real contest, or from presenting all of his case to the court, or where it operates upon matters, not pertaining to the judgment itself, but to the manner in which it was procured so that there is not a fair submission of the controversy. In other words, extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside of the trial of the case, whereby the defeated party has been prevented from exhibiting fully his side of the case by fraud or deception practiced on him by his opponent. Fraud is extrinsic where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had any knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority connives at his defeat; these and similar cases which show that there has never been a real contest in the trial or hearing of the case are reasons for which a new

suit may be sustained to set aside and annul the former judgment and open the case for a new and fair hearing.

The overriding consideration when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court.

Petitioner is the ancillary administrator of Audreys estate. As such, he occupies a position of the highest trust and confidence, and he is required to exercise reasonable diligence and act in entire good faith in the performance of that trust. Although he is not a guarantor or insurer of the safety of the estate nor is he expected to be infallible, yet the same degree of prudence, care and judgment which a person of a fair average capacity and ability exercises in similar transactions of his own, serves as the standard by which his conduct is to be judged.

Petitioners failure to proficiently manage the distribution of Audreys estate according to the terms of her will and as dictated by the applicable law amounted to extrinsic fraud. Hence the CA Decision annulling the RTC Orders dated February 12, 1988 and April 7, 1988, must be upheld.

It is undisputed that Audrey Guersey was an American citizen domiciled in Maryland, U.S.A. During the reprobate of her will in Special Proceeding No. 9625, it was shown, among others, that at the time of Audreys death, she was residing in the Philippines but is domiciled in Maryland, U.S.A.; her Last Will and Testament dated August 18, 1972 was executed and probated before the Orphans Court in Baltimore, Maryland, U.S.A., which was duly authenticated and certified by the Register of Wills of Baltimore City and attested by the Chief Judge of said court; the will was admitted by the Orphans Court of Baltimore City on September 7, 1979; and the will was authenticated by the Secretary of State of Maryland and the Vice Consul of the Philippine Embassy.

Being a foreign national, the intrinsic validity of Audreys will, especially with regard as to who are her heirs, is governed by her national law, i.e., the law of the State of Maryland, as provided in Article 16 of the Civil Code, to wit:

Art. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary succession, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. (Emphasis supplied)

Article 1039 of the Civil Code further provides that capacity to succeed is governed by the law of the nation of the decedent.

As a corollary rule, Section 4, Rule 77 of the Rules of Court on Allowance of Will Proved Outside the Philippines and Administration of Estate Thereunder, states:

SEC. 4. Estate, how administered.When a will is thus allowed, the court shall grant letters testamentary, or letters of administration with the will annexed, and such letters testamentary or of administration, shall extend to all the estate of the testator in the Philippines. Such estate, after the payment of just debts and expenses of administration, shall be disposed of according to such will, so far as such will may operate upon it; and the residue, if any, shall be disposed of as is provided by law in cases of estates in the Philippines belonging to persons who are inhabitants of another state or country. (Emphasis supplied)

While foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them; however, petitioner, as ancillary administrator of Audreys estate, was duty-bound to introduce in evidence the pertinent law of the State of Maryland.

Petitioner admitted that he failed to introduce in evidence the law of the State of Maryland on Estates and Trusts, and merely relied on the presumption that such law is the same as the Philippine law on wills and succession. Thus, the trial court peremptorily applied Philippine laws and totally disregarded the terms of Audreys will. The obvious result was that

there was no fair submission of the case before the trial court or a judicious appreciation of the evidence presented.

Petitioner insists that his application of Philippine laws was made in good faith. The Court cannot accept petitioners protestation. How can petitioner honestly presume that Philippine laws apply when as early as the reprobate of Audreys will before the trial court in 1982, it was already brought to fore that Audrey was a U.S. citizen, domiciled in the State of Maryland. As asserted by respondent, petitioner is a senior partner in a prestigious law firm, with a big legal staff and a large library. He had all the legal resources to determine the applicable law. It was incumbent upon him to exercise his functions as ancillary administrator with reasonable diligence, and to discharge the trust reposed on him faithfully. Unfortunately, petitioner failed to perform his fiduciary duties.

Moreover, whether his omission was intentional or not, the fact remains that the trial court failed to consider said law when it issued the assailed RTC Orders dated February 12, 1988 and April 7, 1988, declaring Richard and Kyle as Audreys heirs, and distributing Audreys estate according to the project of partition submitted by petitioner. This eventually prejudiced respondent and deprived her of her full successional right to the Makati property.

In GSIS v. Bengson Commercial Bldgs., Inc., the Court held that when the rule that the negligence or mistake of counsel binds the client deserts its proper office as an aid to justice and becomes a great hindrance and chief enemy, its rigors must be relaxed to admit exceptions thereto and to prevent a miscarriage of justice, and the court has the power to except a particular case from the operation of the rule whenever the purposes of justice require it.

The CA aptly noted that petitioner was remiss in his responsibilities as ancillary administrator of Audreys estate. The CA likewise observed that the distribution made by petitioner was prompted by his concern over Kyle, whom petitioner believed should equally benefit from the Makati property. The CA correctly stated, which the Court adopts, thus:

In claiming good faith in the performance of his duties and responsibilities, defendant Alonzo H. Ancheta invokes the principle which presumes the law of the forum to be the same as the foreign law (Beam vs. Yatco, 82 Phil. 30, 38) in the absence of evidence adduced to prove the latter law (Slade Perkins vs. Perkins, 57 Phil. 205, 210). In defending his actions in the light of the foregoing principle, however, it appears that the defendant lost sight of the fact that his primary responsibility as ancillary administrator was to distribute the subject estate in accordance

with the will of Audrey ONeill Guersey. Considering the principle established under Article 16 of the Civil Code of the Philippines, as well as the citizenship and the avowed domicile of the decedent, it goes without saying that the defendant was also duty-bound to prove the pertinent laws of Maryland on the matter. The record reveals, however, that no clear effort was made to prove the national law of Audrey ONeill Guersey during the proceedings before the court a quo. While there is claim of good faith in distributing the subject estate in accordance with the Philippine laws, the defendant appears to put his actuations in a different light as indicated in a portion of his direct examination, to wit:

x x x

It would seem, therefore, that the eventual distribution of the estate of Audrey ONeill Guersey was prompted by defendant Alonzo H. Anchetas concern that the subject realty equally benefit the plaintiffs adopted daughter Kyle Guersey.

Well-intentioned though it may be, defendant Alonzo H. Anchetas action appears to have breached his duties and responsibilities as ancillary administrator of the subject estate. While such breach of duty admittedly cannot be considered extrinsic fraud under ordinary circumstances, the fiduciary nature of the said defendants position, as well as the resultant frustration of the decedents last will, combine to create a circumstance that is tantamount to extrinsic fraud. Defendant Alonzo H. Anchetas omission to prove the national laws of the decedent and to follow the latters last will, in sum, resulted in the procurement of the subject orders without a fair submission of the real issues involved in the case. (Emphasis supplied)

This is not a simple case of error of judgment or grave abuse of discretion, but a total disregard of the law as a result of petitioners abject failure to discharge his fiduciary duties. It does not rest upon petitioners pleasure as to which law should be made applicable under the circumstances. His onus is clear. Respondent was thus excluded from enjoying full rights to the Makati property through no fault or negligence of her own, as petitioners omission was beyond her control. She was in no position to analyze the legal implications of petitioners omission and it was belatedly that she realized the adverse consequence of the same. The end result was a miscarriage of justice. In cases like this, the courts have the legal and moral duty to provide judicial aid to parties who are deprived of their rights.

The trial court in its Order dated December 6, 1991 in Special Proceeding No. M-888 noted the law of the State of Maryland on Estates and Trusts, as follows:

Under Section 1-301, Title 3, Sub-Title 3 of the Annotated Code of the Public General Laws of Maryland on Estates and Trusts, all property of a decedent shall be subject to the estate of decedents law, and upon his death shall pass directly to the personal representative, who shall hold the legal title for administration and distribution, while Section 4-408 expressly provides that unless a contrary intent is expressly indicated in the will, a legacy passes to the legatee the entire interest of the testator in the property which is the subject of the legacy. Section 7-101, Title 7, Sub-Title 1, on the other hand, declares that a personal representative is a fiduciary and as such he is under the general duty to settle and distribute the estate of the decedent in accordance with the terms of the will and the estate of decedents law as expeditiously and with as little sacrifice of value as is reasonable under the circumstances.

In her will, Audrey devised to Richard her entire estate, consisting of the following: (1) Audreys conjugal share in the Makati property; (2) the cash amount of P12,417.97; and (3) 64,444 shares of stock in A/G Interiors, Inc. worth P64,444.00. All these properties passed on to Richard upon Audreys death. Meanwhile, Richard, in his will, bequeathed his entire estate to respondent, except for his rights and interests over the A/G Interiors, Inc. shares, which he left to Kyle. When Richard subsequently died, the entire Makati property should have then passed on to respondent. This, of course, assumes the proposition that the law of the State of Maryland which allows a legacy to pass to the legatee the entire estate of the testator in the property which is the subject of the legacy, was sufficiently proven in Special Proceeding No. 9625. Nevertheless, the Court may take judicial notice thereof in view of the ruling in Bohanan v. Bohanan. Therein, the Court took judicial notice of the law of Nevada despite failure to prove the same. The Court held, viz.:

We have, however, consulted the records of the case in the court below and we have found that during the hearing on October 4, 1954 of the motion of Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign law, especially Section 9905, Compiled Nevada Laws, was introduced in evidence by appellants' (herein) counsel as Exhibit "2" (See pp. 77-79, Vol. II, and t.s.n. pp. 24-44, Records, Court of First Instance). Again said law was presented by the counsel for the executor and admitted by the Court as Exhibit "B" during the hearing of the case on January 23, 1950 before Judge Rafael Amparo (see Records, Court of First Instance, Vol. 1).

In addition, the other appellants, children of the testator, do not dispute the above-quoted provision of the laws of the State of Nevada. Under all the above circumstances, we are constrained to hold that the pertinent law of Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial notice of by us, without proof of such law having been offered at the hearing of the project of partition.

In this case, given that the pertinent law of the State of Maryland has been brought to record before the CA, and the trial court in Special Proceeding No. M-888 appropriately took note of the same in disapproving the proposed project of partition of Richards estate, not to mention that petitioner or any other interested person for that matter, does not dispute the existence or validity of said law, then Audreys and Richards estate should be distributed according to their respective wills, and not according to the project of partition submitted by petitioner. Consequently, the entire Makati property belongs to respondent.

Decades ago, Justice Moreland, in his dissenting opinion in Santos v. Manarang, wrote:

A will is the testator speaking after death. Its provisions have substantially the same force and effect in the probate court as if the testator stood before the court in full life making the declarations by word of mouth as they appear in the will. That was the special purpose of the law in the creation of the instrument known as the last will and testament. Men wished to speak after they were dead and the law, by the creation of that instrument, permitted them to do so x x x All doubts must be resolved in favor of the testator's having meant just what he said.

Honorable as it seems, petitioners motive in equitably distributing Audreys estate cannot prevail over Audreys and Richards wishes. As stated in Bellis v. Bellis:

x x x whatever public policy or good customs may be involved in our system of legitimes, Congress has not intended to extend the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to the decedent's national Law. Specific provisions must prevail over general ones.

Before concluding, the Court notes the fact that Audrey and Richard Guersey were American citizens who owned real property in the Philippines, although records do not show when and how the Guerseys acquired the Makati property.

Under Article XIII, Sections 1 and 4 of the 1935 Constitution, the privilege to acquire and exploit lands of the public domain, and other natural resources of the Philippines, and to operate public utilities, were reserved to Filipinos and entities owned or controlled by them. In Republic v. Quasha, the Court clarified that the Parity Rights Amendment of 1946, which re-opened to American citizens and business enterprises the right in the acquisition of lands of the public domain, the disposition, exploitation, development and utilization of natural resources of the Philippines, does not include the acquisition or exploitation of private agricultural lands. The prohibition against acquisition of private lands by aliens was carried on to the 1973 Constitution under Article XIV, Section 14, with the exception of private lands acquired by hereditary succession and when the transfer was made to a former natural-born citizen, as provided in Section 15, Article XIV. As it now stands, Article XII, Sections 7 and 8 of the 1986 Constitution explicitly prohibits non-Filipinos from acquiring or holding title to private lands or to lands of the public domain, except only by way of legal succession or if the acquisition was made by a former natural-born citizen.

In any case, the Court has also ruled that if land is invalidly transferred to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid. In this case, since the Makati property had already passed on to respondent who is a Filipino, then whatever flaw, if any, that attended the acquisition by the Guerseys of the Makati property is now inconsequential, as the objective of the constitutional provision to keep our lands in Filipino hands has been achieved.

WHEREFORE, the petition is denied. The Decision dated March 18, 1999 and the Resolution dated August 27, 1999 of the Court of Appeals are AFFIRMED.

Petitioner is ADMONISHED to be more circumspect in the performance of his duties as an official of the court.

No pronouncement as to costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN Chief Justice Chairperson

(On leave)

CONSUELO YNARES-SANTIAGO Associate Justice

ROMEO J. CALLEJO, SR. Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN Chief Justice

On leave. CA rollo, pp. 84-88. Id. at 89-91. Id. at 92. Supra, note 2. CA rollo, pp. 93-94. Id. at 95-98. Id. at 99-100. Id. at 101. Id. at 102-103. Id. at 104-106. Id. at 107. Id. at 108-109. Id. at 114-116. RTC Order dated December 6, 1991, CA rollo, p. 48. CA rollo, pp. 117-121. Id. at 71-81. Penned by Associate Justice Fermin A. Martin, Jr. (retired), and concurred in by Associate Justices Romeo J. Callejo, Sr. (now Associate Justice of this Court) and Mariano M. Umali (retired). CA rollo, p. 553. Id. at 617-618. Rollo, p. 36. Id. at 174.

Id. at 183. Reyes v. Barretto-Datu, 125 Phil 501 (1967). Kilayko v. Tengco, G.R. No. L-45425, March 27, 1992, 207 SCRA 600. 89 Phil. 730 (1951). Id. at 741. Ybaez v. Court of Appeals, 323 Phil. 643 (1996). Stilianpulos v. The City of Legaspi, 374 Phil. 879 (1999). Article 1391, Civil Code. Rollo, p. 46, 183. Id. at 157-158. See RTC-Branch 138 Order dated December 6, 1991, pp. 194-198, CA rollo. 332 Phil. 948 (1996). Id. at 961-962. Teodoro v. Court of Appeals, 437 Phil. 336 (2002). Lao v. Genato, G.R. No. L-56451, June 19, 1985, 137 SCRA 77. Llorente v. Court of Appeals, 399 Phil. 342 (2000).
Bohanan v. Bohanan, 106 Phil. 997 (1960).

Rollo, p. 156. 426 Phil. 111 (2002). CA rollo, pp. 551-553. Pael v. Court of Appeals, 382 Phil. 222 (2000). CA rollo, p. 48. Supra., Bohanan case, note 38.

27 Phil. 209 (1914). 126 Phil. 726 (1967). Id. at 732. 150-B Phil. 140 (1972). United Church Board of World Ministries v. Sebastian, No. L-34672, March 30, 1988, 159 SCRA 446; Halili v. Court of Appeals, 350 Phil. 906 (1998); Lee v. Republic, 418 Phil. 793 (2001).

THIRD DIVISION [G.R. No. 152716. October 23, 2003] ELNA MERCADO-FEHR, petitioner, vs. BRUNO FEHR, respondent. DECISION PUNO, J.: This case arose from a petition for declaration of nullity of marriage on the ground of psychological incapacity to comply with the essential marital obligations under Article 36 of the Family Code filed by petitioner Elna Mercado-Fehr against respondent Bruno Fehr before the Regional Trial Court of Makati in March 1997. After due proceedings, the trial court declared the marriage between petitioner and respondent void ab initio under Article 36 of the Family Code and ordered the dissolution of their conjugal partnership of property. The dispositive portion of the Decision dated January 30, 1998 states: WHEREFORE, in the light of the foregoing, the marriage between Elna D. Mercado and Bruno F. Fehr on March 14, 1985 is hereby declared null and void on the ground of psychological incapacity on the part of respondent to perform the essential obligations of marriage under Article 36 of the Family Code. Accordingly, the conjugal partnership of property existing between the parties is dissolved and in lieu thereof, a regime of complete separation of property between the said spouses is established in accordance with the pertinent provisions of the Family Code, without prejudice to the rights previously acquired by creditors. Custody over the two minor children, MICHAEL BRUNO MERCADO FEHR and PATRICK FRANZ FEHR, is hereby awarded to petitioner, she being the innocent spouse.

Let a copy of this Decision be duly recorded in the proper civil and property registries in accordance with Article 52 of the Family Code. SO ORDERED. On August 24, 1999, the trial court issued an Order resolving the various motions filed by respondent after the case had been decided. The Order pertained to the properties held by the parties, thus: xxx xxx xxx

After a careful scrutiny of the inventory of properties submitted by both parties, the Court finds the following properties to be excluded from the conjugal properties, namely: a) the Bacolod property covered by Transfer Certificate of Title No. T-137232, considering that the same is owned by petitioners parents, Herminio Mercado and Catalina D. Mercado xxx and b) Suite 204 of the LCG Condominium covered by Condominium Certificate of Title No. 14735, considering that the same was purchased on installment basis by respondent with his exclusive funds prior to his marriage, as evidenced by a Contract to Sell dated July 26, 1983. xxx Accordingly, the conjugal properties of the petitioner and respondent shall be distributed in the following manner: TO PETITIONER ELNA MERCADO: a. Ground Floor, LCG Condominium, with an area of 671.84 sq. m., covered by Condominium Certificate of Title No. 14734; and b. Tamaraw FX (1995 model)

TO RESPONDENT BRUNO FRANZ FEHR: a. Upper Basement, LCG Condominium, with an area of 180.81 sq. m. and covered by Condominium Certificate of Title No. 14733; and b. Nissan Sentra with Plate No. FDJ-533 (1994 model)

Furthermore, Suite 204, LCG Condominium with an area of 113.54 sq. m. and covered by Condominium Certificate of Title NO. 14735 is hereby declared the EXCLUSIVE PROPERTY of respondent, BRUNO FRANZ FEHR. Accordingly, petitioner is hereby directed to transfer ownership of Suite 204 in the name of respondent, covered by Condominium Certificate of Title No. 14735, being respondents exclusive property, acquired prior to his marriage.

Anent the monthly rentals prior to the issuance of this Order of the subject properties, namely the Ground Floor Front (Fridays Club), Ground Floor Rear Apartment and Upper Basement at LGC Condominium, all leased by Bar 4 Corporation, the same shall be shared by the parties in common, in proportion to one-half each or share and share alike, after deducting all expenses for Income Taxes, Business Permits, Realty Taxes, Municipal License fees, clearances, etc. Accordingly, petitioner is hereby directed to deliver to respondent the following: a) the balance of his share of the monthly rentals from February 1998 to May 1998; and b) his one-half share (1/2) of the monthly rentals of the aforesaid properties from June 1998 up to this date. Thereafter, the parties shall own and enjoy their respective share of the monthly rentals derived from the properties adjudicated to them as stated above. The Petitioner and Respondent are further enjoined to jointly support their minor children, Michael and Patrick Fehr, for their education, uniforms, food and medical expenses. Petitioner filed a motion for reconsideration of said Order with respect to the adjudication of Suite 204, LCG Condominium and the support of the children. Petitioner alleged that Suite 204 was purchased on installment basis at the time when petitioner and respondent were living exclusively with each other as husband and wife without the benefit of marriage, hence the rules on co-ownership should apply in accordance with Article 147 of the Family Code. Petitioner further claimed that it would not be in the best interests of the children if she would be made to demand periodically from respondent his share in the support of the children. She instead proposed that the Upper Basement and the Lower Ground Floor of the LCG Condominium be adjudicated to her so that she could use the income from the lease of said premises for the support of the children. Resolving said motion, the trial court held in an Order dated October 5, 2000 that since the marriage between petitioner and respondent was declared void ab intio, the rules on coownership should apply in the liquidation and partition of the properties they own in common pursuant to Article 147 of the Family Code. The court, however, noted that the parties have already agreed in principle to divide the properties and/or proceeds from the sale thereof proportionately among them and their children as follows: 1/3 for petitioner, 1/3 for respondent and 1/3 for the children. It also affirmed its previous ruling that Suite 204 of LCG Condominium was acquired prior to the couples cohabitation and therefore pertained solely to respondent. On November 28, 2000, petitioner filed a notice of appeal questioning the October 5, 2000 Order of the trial court. Respondent filed an Opposition to the Notice of Appeal. On January 12, 2001, petitioner withdrew the notice of appeal and instead filed on the following day a special civil action for certiorari and prohibition with the Court of Appeals, questioning the findings of the trial court in its Order dated October 5, 2000. The Court of Appeals, in its Decision dated October 26, 2001, dismissed the petition for certiorari for lack of merit. The appellate court stated that petitioner has not shown any reason to warrant the issuance of a writ of certiorari as the errors she raised were mere errors of judgment which were the proper subject of an ordinary appeal, not a petition for certiorari.

Petitioner filed a motion for reconsideration of said Decision, which was also denied by the appellate court. Hence this petition. Petitioner raises the following arguments: 1) Petitioner correctly filed a petition for certiorari and prohibition against the Regional Trial Court of Makati, Branch 149 in the Court of Appeals in view of the fact that the questioned orders were issued with grave abuse of discretion amounting to excess of or lack of jurisdiction. 2) The Court of Appeals erred in ruling that the questioned orders were errors of judgment and not of jurisdiction. We shall first address the procedural issue, whether the Court of Appeals erred in dismissing the special civil action for certiorari filed by petitioner. Petitioner argues that the filing of a petition for certiorari with the Court of Appeals was proper because the trial court committed grave abuse of discretion in the issuance of its Order dated October 5, 2000, and there were no other speedy and adequate remedies available. She asserts that the trial court committed grave abuse of discretion when it held that Suite 204 of the LCG Condominium was the exclusive property of respondent, although it was established that they lived together as husband and wife beginning March 1983, before the execution of the Contract to Sell on July 26, 1983. Furthermore, the trial courts ruling dividing their properties into three, instead of two as provided under Article 147 of the Family Code, or four, as allegedly agreed by the parties during a conference with the trial court judge on May 3, 2000, also constituted grave abuse of discretion. Respondent, on the other hand, contends that petitioner may no longer avail of any remedy, whether an appeal or a petition for certiorari, as she had lost all the right to appeal from the time the Decision of January 30, 1998 became final and executory. He argues that the Order of the trial court dated October 5, 2000 is no longer assailable because it was merely issued to execute the final and executory Decision of January 30, 1998. He also submits that the division of the properties into three and the distribution of 1/3 share each to the petitioner, the respondent, and their children was proper, in accordance with Articles 50, 51, 147 and 148 of the Family Code mandating the delivery of the presumptive legitime of the common children upon dissolution of the property regime. Respondent further claims Suite 204 of LCG Condominium to be his exclusive property as it was acquired on July 26, 1983, prior to their marriage on March 14, 1985. A petition for certiorari is the proper remedy when any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal, nor any plain speedy, and adequate remedy at law. Grave abuse of discretion is defined as the capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. As a general rule, a petition for certiorari will not lie if an appeal is the proper remedy such as when an error of judgment or procedure is involved. As long as a court acts within its jurisdiction and does not gravely abuse its discretion in the exercise thereof, any supposed error committed by it will

amount to nothing more than an error of judgment reviewable by a timely appeal and not assailable by a special civil action of certiorari. However, in certain exceptional cases, where the rigid application of such rule will result in a manifest failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules may be relaxed. Certiorari has been deemed to be justified, for instance, in order to prevent irreparable damage and injury to a party where the trial judge has capriciously and whimsically exercised his judgment, or where there may be danger of clear failure of justice, or where an ordinary appeal would simply be inadequate to relieve a party from the injurious effects of the judgment complained of. The exception applies to the case at bar. We reject respondents submission that all the appellate remedies of petitioner have been foreclosed when the Decision dated January 30, 1998 became final and executory. What is being questioned in this petition is not the January 30, 1998 Decision of the trial court declaring the marriage between petitioner and respondent void ab initio on the ground of psychological incapacity, but the Order of the trial court dated October 5, 2000 dividing the common properties of petitioner and respondent into three1/3 to petitioner, 1/3 to respondent and 1/3 to their children, and affirming its previous ruling that Suite 204 of LCG Condominium is the exclusive property of respondent. The issue on the validity of the marriage of petitioner and respondent has long been settled in the main Decision and may no longer be the subject of review. There were, however, incidental matters that had to be addressed regarding the dissolution of the property relations of the parties as a result of the declaration of nullity of their marriage. The questioned Order pertained to the division and distribution of the common properties of petitioner and respondent, pursuant to the courts directive in its main decision to dissolve the conjugal partnership. Said Order is a final Order as it finally disposes of the issues concerning the partition of the common properties of petitioner and respondent, and as such it may be appealed by the aggrieved party to the Court of Appeals via ordinary appeal. However, considering the merits of the case, the Court believes that a blind adherence to the general rule will result in miscarriage of justice as it will divest the petitioner of her just share in their common property, and thus, deprive her of a significant source of income to support their children whom the court had entrusted to her care. We have held that where a rigid application of the rule that certiorari cannot be a substitute for appeal will result in a manifest failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules may be relaxed. We now go to the substantive issues. The crux of the petition is the ownership of Suite 204 of LCG Condominium and how the properties acquired by petitioner and respondent should be partitioned. It appears from the facts, as found by the trial court, that in March 1983, after two years of longdistance courtship, petitioner left Cebu City and moved in with respondent in the latters residence in Metro Manila. Their relations bore fruit and their first child, Michael Bruno Fehr, was born on December 3, 1983. The couple got married on March 14, 1985. In the meantime, they purchased on installment a condominium unit, Suite 204, at LCG Condominium, as evidenced by a Contract to Sell dated July 26, 1983 executed by respondent as the buyer and J.V. Santos Commercial Corporation as the seller. Petitioner also signed the contract as witness, using the name Elna Mercado Fehr. Upon completion of payment, the title to the condominium unit was issued in the name of petitioner.

In light of these facts, we give more credence to petitioners submission that Suite 204 was acquired during the parties cohabitation. Accordingly, under Article 147 of the Family Code, said property should be governed by the rules on co-ownership. The Family Code provides: Article 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership. In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly to the acquisition thereof if the formers efforts consisted in the care and maintenance of their family and of the household. Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation. When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. (emphasis supplied) Article 147 applies to unions of parties who are legally capacitated and not barred by any impediment to contract marriage, but whose marriage is nonetheless void, as in the case at bar. This provision creates a co-ownership with respect to the properties they acquire during their cohabitation. We held in Valdes vs. Regional Trial Court, Br. 102, Quezon City: This peculiar kind of co-ownership applies when a man and a woman, suffering no legal impediment to marry each other, so exclusively live together as husband and wife under a void marriage or without the benefit of marriage. The term capacitated in the provision (in the first paragraph of the law) refers to the legal capacity of a party to contract marriage, i.e., any male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Article 37 and 38 of the Code. Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. A party who did not participate in the acquisition of the property shall still be considered as having contributed thereto jointly if said partys efforts consisted in the care and maintenance of the family household.

Thus, for Article 147 to operate, the man and the woman: (1) must be capacitated to marry each other; (2) live exclusively with each other as husband and wife; and (3) their union is without the benefit of marriage or their marriage is void. All these elements are present in the case at bar. It has not been shown that petitioner and respondent suffered any impediment to marry each other. They lived exclusively with each other as husband and wife when petitioner moved in with respondent in his residence and were later united in marriage. Their marriage, however, was found to be void under Article 36 of the Family Code because of respondents psychological incapacity to comply with essential marital obligations. The disputed property, Suite 204 of LCG Condominium, was purchased on installment basis on July 26, 1983, at the time when petitioner and respondent were already living together. Hence, it should be considered as common property of petitioner and respondent. As regards the settlement of the common properties of petitioner and respondent, we hold that the Civil Code provisions on co-ownership should apply. There is nothing in the records that support the pronouncement of the trial court that the parties have agreed to divide the properties into three1/3 share each to the petitioner, the respondent and their children. Petitioner, in fact, alleges in her petition before this Court that the parties have agreed on a four-way division of the properties1/4 share each to the petitioner and the respondent, and 1/4 share each to their two children. Moreover, respondents argument that the three-way partition is in accordance with Articles 50 and 51 of the Family Code does not hold water as said provisions relate only to voidable marriages and exceptionally to void marriages under Article 40 of the Family Code, i.e., the declaration of nullity of a subsequent marriage contracted by a spouse of a prior void marriage before the latter is judicially declared void. In sum, we rule in favor of the petitioner. We hold that Suite 204 of LCG Condominium is a common property of petitioner and respondent and the property regime of the parties should be divided in accordance with the law on co-ownership. IN VIEW WHEREOF, the petition is GRANTED. The case is hereby REMANDED to the Regional Trial Court of Makati, Branch 149 for liquidation of the properties of petitioner and respondent in accordance with this Courts ruling. SO ORDERED. Panganiban, Sandoval-Gutierrez, and Corona, JJ., concur. Carpio-Morales, J., no part. Docketed as Civil Case No. 97-573, Original Records, pp. 1-10. Decision dated January 30, 1998 penned by Judge Josefina Guevara Salonga, Original Records, pp. 138-144. Id. at 143-144.

Respondent filed the following motions: (1) Motion for Approval of Inventory of Property of the Petitioner and Respondent; (2) Motion for Distribution of Rental Income; and (3) Motion to Deposit Rentals in Court, which were all opposed by petitioner. Original Records, pp. 325-326. Id. at 381-387. Id. at 576-577. Id. at 578. Id. at 581-584. Id. at 608. CA Rollo, pp. 2-14. Id. at 124-129. Id. at 153. Petition, Rollo, pp. 19-20. Id. at 14-27. Comment, Rollo, pp. 147-158. Estate of Salud Jimenez vs. Philippine Export Processing Zone, 349 SCRA 240 (2001). BF Corporation vs. Court of Appeals, 288 SCRA 267 (1998); See also Caraan vs. Court of Appeals, 289 SCRA 579 (1998). See Decision, Civil Case No. 97-573, pp. 1-4. Cario vs. Cario, 351 SCRA 127 (2001). 260 SCRA 221 (1996). Valdes vs. Regional Trial Court, Br. 102, Quezon City, supra. Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 120295 June 28, 1996 JUAN G. FRIVALDO, petitioner, vs. COMMISSION ON ELECTIONS, and RAUL R. LEE, respondents. G.R. No. 123755 June 28, 1996 RAUL R. LEE, petitioner, vs. COMMISSION ON ELECTIONS and JUAN G. FRIVALDO, respondents.

PANGANIBAN, J.:p The ultimate question posed before this Court in these twin cases is: Who should be declared the rightful governor of Sorsogon (i) Juan G. Frivaldo, who unquestionably obtained the highest number of votes in three successive elections but who was twice declared by this Court to be disqualified to hold such office due to his alien citizenship, and who now claims to have re-assumed his lost Philippine citizenship thru repatriation; (ii) Raul R. Lee, who was the second placer in the canvass, but who claims that the votes cast in favor of Frivaldo should be considered void; that the electorate should be deemed to have intentionally thrown away their ballots; and that legally, he secured the most number of valid votes; or (iii) The incumbent Vice-Governor, Oscar G. Deri, who obviously was not voted directly to the position of governor, but who according to prevailing jurisprudence should take over the said post inasmuch as, by the ineligibility of Frivaldo, a "permanent vacancy in the contested office has occurred"? In ruling for Frivaldo, the Court lays down new doctrines on repatriation, clarifies/reiterates/amplifies existing jurisprudence on citizenship and elections, and upholds the superiority of substantial justice over pure legalisms. G.R. No. 123755 This is a special civil action under Rules 65 and 58 of the Rules of Court for certiorari and preliminary injunction to review and annul a Resolution of the respondent Commission on Elections (Comelec), First Division, 1 promulgated on December 19, 1995 2 and another Resolution of the Comelec en banc promulgated February 23, 1996 3 denying petitioner's motion for reconsideration.

The Facts On March 20, 1995, private respondent Juan G. Frivaldo filed his Certificate of Candidacy for the office of Governor of Sorsogon in the May 8, 1995 elections. On March 23, 1995, petitioner Raul R. Lee, another candidate, filed a petition 4 with the Comelec docketed as SPA No. 95-028 praying that Frivaldo "be disqualified from seeking or holding any public office or position by reason of not yet being a citizen of the Philippines", and that his Certificate of Candidacy be canceled. On May 1, 1995, the Second Division of the Comelec promulgated a Resolution 5 granting the petition with the following disposition 6:
WHEREFORE, this Division resolves to GRANT the petition and declares that respondent is DISQUALIFIED to run for the Office of Governor of Sorsogon on the ground that he is NOT a citizen of the Philippines. Accordingly, respondent's certificate of candidacy is canceled.

The Motion for Reconsideration filed by Frivaldo remained unacted upon until after the May 8, 1995 elections. So, his candidacy continued and he was voted for during the elections held on said date. On May 11, 1995, the Comelec en banc 7 affirmed the aforementioned Resolution of the Second Division. The Provincial Board of Canvassers completed the canvass of the election returns and a Certificate of Votes 8 dated May 27, 1995 was issued showing the following votes obtained by the candidates for the position of Governor of Sorsogon:
Antonio H. Escudero, Jr. 51,060 Juan G. Frivaldo 73,440 Raul R. Lee 53,304 Isagani P. Ocampo 1,925

On June 9, 1995, Lee filed in said SPA No. 95-028, a (supplemental) petition 9 praying for his proclamation as the duly-elected Governor of Sorsogon. In an order 10 dated June 21, 1995, but promulgated according to the petition "only on June 29, 1995," the Comelec en banc directed "the Provincial Board of Canvassers of Sorsogon to reconvene for the purpose of proclaiming candidate Raul Lee as the winning gubernatorial candidate in the province of Sorsogon on June 29, 1995 . . ." Accordingly, at 8:30 in the evening of June 30, 1995, Lee was proclaimed governor of Sorsogon. On July 6, 1995, Frivaldo filed with the Comelec a new petition, 11 docketed as SPC No. 95-317, praying for the annulment of the June 30, 1995 proclamation of Lee and for his own proclamation. He alleged that on June 30, 1995, at 2:00 in the afternoon, he took his oath of allegiance as a citizen of the Philippines after "his petition for repatriation under P.D. 725 which he filed with the Special Committee on Naturalization in

September 1994 had been granted". As such, when "the said order (dated June 21, 1995) (of the Comelec) . . . was released and received by Frivaldo on June 30, 1995 at 5:30 o'clock in the evening, there was no more legal impediment to the proclamation (of Frivaldo) as governor . . ." In the alternative, he averred that pursuant to the two cases of Labo vs. Comelec, 12 the Vice-Governor - not Lee - should occupy said position of governor. On December 19, 1995, the Comelec First Division promulgated the herein assailed Resolution 13 holding that Lee, "not having garnered the highest number of votes," was not legally entitled to be proclaimed as duly-elected governor; and that Frivaldo, "having garnered the highest number of votes, and . . . having reacquired his Filipino citizenship by repatriation on June 30, 1995 under the provisions of Presidential Decree No. 725 . . . (is) qualified to hold the office of governor of Sorsogon"; thus:
PREMISES CONSIDERED, the Commission (First Division), therefore RESOLVES to GRANT the Petition. Consistent with the decisions of the Supreme Court, the proclamation of Raul R. Lee as Governor of Sorsogon is hereby ordered annulled, being contrary to law, he not having garnered the highest number of votes to warrant his proclamation. Upon the finality of the annulment of the proclamation of Raul R. Lee, the Provincial Board of Canvassers is directed to immediately reconvene and, on the basis of the completed canvass, proclaim petitioner Juan G. Frivaldo as the duly elected Governor of Sorsogon having garnered the highest number of votes, and he having reacquired his Filipino citizenship by repatriation on June 30, 1995 under the provisions of Presidential Decree No. 725 and, thus, qualified to hold the office of Governor of Sorsogon. Conformably with Section 260 of the Omnibus Election Code ( B.P. Blg. 881), the Clerk of the Commission is directed to notify His Excellency the President of the Philippines, and the Secretary of the Sangguniang Panlalawigan of the Province of Sorsogon of this resolution immediately upon the due implementation thereof.

On December 26, 1995, Lee filed a motion for reconsideration which was denied by the Comelec en banc in its Resolution 14 promulgated on February 23, 1996. On February 26, 1996, the present petition was filed. Acting on the prayer for a temporary restraining order, this Court issued on February 27, 1996 a Resolution which inter alia directed the parties "to maintain the status quo prevailing prior to the filing of this petition." The Issues in G.R. No. 123755 Petitioner Lee's "position on the matter at hand may briefly be capsulized in the following propositions" 15:
First -- The initiatory petition below was so far insufficient in form and substance to warrant the exercise by the COMELEC of its jurisdiction with the result that, in effect, the COMELEC acted without jurisdiction in taking cognizance of and deciding said petition;

Second -- The judicially declared disqualification of respondent was a continuing condition and rendered him ineligible to run for, to be elected to and to hold the Office of Governor; Third -- The alleged repatriation of respondent was neither valid nor is the effect thereof retroactive as to cure his ineligibility and qualify him to hold the Office of Governor; and Fourth -- Correctly read and applied, the Labo Doctrine fully supports the validity of petitioner's proclamation as duly elected Governor of Sorsogon.

G.R. No. 120295 This is a petition to annul three Resolutions of the respondent Comelec, the first two of which are also at issue in G.R. No. 123755, as follows:
1. Resolution 16 of the Second Division, promulgated on May 1, 1995, disqualifying Frivaldo from running for governor of Sorsogon in the May 8, 1995 elections "on the ground that he is not a citizen of the Philippines"; 2. Resolution 17 of the Comelec en banc, promulgated on May 11, 1995; and 3. Resolution 18 of the Comelec en banc, promulgated also on May 11, 1995 suspending the proclamation of, among others, Frivaldo.

The Facts and the Issue The facts of this case are essentially the same as those in G.R. No. 123755. However, Frivaldo assails the above-mentioned resolutions on a different ground: that under Section 78 of the Omnibus Election Code, which is reproduced hereinunder:
Sec. 78. Petition to deny due course or to cancel a certificate of candidacy . -- A verified petition seeking to deny due course or to cancel a certificate of candidacy may be filed by any person exclusively on the ground that any material representation contained therein as required under Section 74 hereof is false. The petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy and shall be decided, after notice and hearing, not later than fifteen days before the election . (Emphasis supplied.)

the Comelec had no jurisdiction to issue said Resolutions because they were not rendered "within the period allowed by law" i.e., "not later than fifteen days before the election." Otherwise stated, Frivaldo contends that the failure of the Comelec to act on the petition for disqualification within the period of fifteen days prior to the election as provided by law is a jurisdictional defect which renders the said Resolutions null and void. By Resolution on March 12, 1996, the Court consolidated G.R. Nos. 120295 and 123755 since they are intimately related in their factual environment and are identical in the ultimate question raised, viz., who should occupy the position of governor of the province of Sorsogon.

On March 19, 1995, the Court heard oral argument from the parties and required them thereafter to file simultaneously their respective memoranda. The Consolidated Issues From the foregoing submissions, the consolidated issues may be restated as follows: 1. Was the repatriation of Frivaldo valid and legal? If so, did it seasonably cure his lack of citizenship as to qualify him to be proclaimed and to hold the Office of Governor? If not, may it be given retroactive effect? If so, from when? 2. Is Frivaldo's "judicially declared" disqualification for lack of Filipino citizenship a continuing bar to his eligibility to run for, be elected to or hold the governorship of Sorsogon? 3. Did the respondent Comelec have jurisdiction over the initiatory petition in SPC No. 95-317 considering that said petition is not "a pre-proclamation case, an election protest or a quo warranto case"? 4. Was the proclamation of Lee, a runner-up in the election, valid and legal in light of existing jurisprudence? 5. Did the respondent Commission on Elections exceed its jurisdiction in promulgating the assailed Resolutions, all of which prevented Frivaldo from assuming the governorship of Sorsogon, considering that they were not rendered within the period referred to in Section 78 of the Omnibus Election Code, viz., "not later than fifteen days before the elections"? The First Issue: Frivaldo's Repatriation The validity and effectivity of Frivaldo's repatriation is the lis mota, the threshold legal issue in this case. All the other matters raised are secondary to this. The Local Government Code of 1991 19 expressly requires Philippine citizenship as a qualification for elective local officials, including that of provincial governor, thus:
Sec. 39. Qualifications. -- (a) An elective local official must be a citizen of the Philippines; a registered voter in the barangay, municipality, city, or province or, in the case of a member of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan, the district where he intends to be elected; a resident therein for at least one (1) year immediately preceding the day of the election; and able to read and write Filipino or any other local language or dialect. (b) Candidates for the position of governor, vice governor or member of the sangguniang panlalawigan, or mayor, vice mayor or member of the sangguniang panlungsod of highly urbanized cities must be at least twenty-three (23) years of age on election day.

xxx xxx xxx

Inasmuch as Frivaldo had been declared by this Court 20 as a non-citizen, it is therefore incumbent upon him to show that he has reacquired citizenship; in fine, that he possesses the qualifications prescribed under the said statute (R.A. 7160). Under Philippine law, 21 citizenship may be reacquired by direct act of Congress, by naturalization or by repatriation. Frivaldo told this Court in G.R. No. 104654 22 and during the oral argument in this case that he tried to resume his citizenship by direct act of Congress, but that the bill allowing him to do so "failed to materialize, notwithstanding the endorsement of several members of the House of Representatives" due, according to him, to the "maneuvers of his political rivals." In the same case, his attempt at naturalization was rejected by this Court because of jurisdictional, substantial and procedural defects. Despite his lack of Philippine citizenship, Frivaldo was overwhelmingly elected governor by the electorate of Sorsogon, with a margin of 27,000 votes in the 1988 elections, 57,000 in 1992, and 20,000 in 1995 over the same opponent Raul Lee. Twice, he was judicially declared a non-Filipino and thus twice disqualified from holding and discharging his popular mandate. Now, he comes to us a third time, with a fresh vote from the people of Sorsogon and a favorable decision from the Commission on Elections to boot. Moreover, he now boasts of having successfully passed through the third and last mode of reacquiring citizenship: by repatriation under P.D. No. 725, with no less than the Solicitor General himself, who was the prime opposing counsel in the previous cases he lost, this time, as counsel for co-respondent Comelec, arguing the validity of his cause (in addition to his able private counsel Sixto S. Brillantes, Jr.). That he took his oath of allegiance under the provisions of said Decree at 2:00 p.m. on June 30, 1995 is not disputed. Hence, he insists that he -- not Lee -- should have been proclaimed as the duly-elected governor of Sorsogon when the Provincial Board of Canvassers met at 8:30 p.m. on the said date since, clearly and unquestionably, he garnered the highest number of votes in the elections and since at that time, he already reacquired his citizenship. En contrario, Lee argues that Frivaldo's repatriation is tainted with serious defects, which we shall now discuss in seriatim. First, Lee tells us that P.D. No. 725 had "been effectively repealed", asserting that "then President Corazon Aquino exercising legislative powers under the Transitory Provisions of the 1987 Constitution, forbade the grant of citizenship by Presidential Decree or Executive Issuances as the same poses a serious and contentious issue of policy which the present government, in the exercise of prudence and sound discretion, should best leave to the judgment of the first Congress under the 1987 Constitution", adding that in her memorandum dated March 27, 1987 to the members of the Special Committee on Naturalization constituted for purposes of Presidential Decree No. 725, President Aquino directed them "to cease and desist from undertaking any and all proceedings within your functional area of responsibility as defined under Letter of Instructions (LOI) No. 270 dated April 11, 1975, as amended." 23

This memorandum dated March 27, 1987 24 cannot by any stretch of legal hermeneutics be construed as a law sanctioning or authorizing a repeal of P.D. No. 725. Laws are repealed only by subsequent ones 25 and a repeal may be express or implied. It is obvious that no express repeal was made because then President Aquino in her memorandum -- based on the copy furnished us by Lee -- did not categorically and/or impliedly state that P.D. 725 was being repealed or was being rendered without any legal effect. In fact, she did not even mention it specifically by its number or text. On the other hand, it is a basic rule of statutory construction that repeals by implication are not favored. An implied repeal will not be allowed "unless it is convincingly and unambiguously demonstrated that the two laws are clearly repugnant and patently inconsistent that they cannot co-exist". 26 The memorandum of then President Aquino cannot even be regarded as a legislative enactment, for not every pronouncement of the Chief Executive even under the Transitory Provisions of the 1987 Constitution can nor should be regarded as an exercise of her law-making powers. At best, it could be treated as an executive policy addressed to the Special Committee to halt the acceptance and processing of applications for repatriation pending whatever "judgment the first Congress under the 1987 Constitution" might make. In other words, the former President did not repeal P.D. 725 but left it to the first Congress -- once created -- to deal with the matter. If she had intended to repeal such law, she should have unequivocally said so instead of referring the matter to Congress. The fact is she carefully couched her presidential issuance in terms that clearly indicated the intention of "the present government, in the exercise of prudence and sound discretion" to leave the matter of repeal to the new Congress. Any other interpretation of the said Presidential Memorandum, such as is now being proffered to the Court by Lee, would visit unmitigated violence not only upon statutory construction but on common sense as well. Second, Lee also argues that "serious congenital irregularities flawed the repatriation proceedings," asserting that Frivaldo's application therefor was "filed on June 29, 1995 . . . (and) was approved in just one day or on June 30, 1995 . . .", which "prevented a judicious review and evaluation of the merits thereof." Frivaldo counters that he filed his application for repatriation with the Office of the President in Malacaang Palace on August 17, 1994. This is confirmed by the Solicitor General. However, the Special Committee was reactivated only on June 8, 1995, when presumably the said Committee started processing his application. On June 29, 1995, he filled up and re-submitted the FORM that the Committee required. Under these circumstances, it could not be said that there was "indecent haste" in the processing of his application. Anent Lee's charge that the "sudden reconstitution of the Special Committee on Naturalization was intended solely for the personal interest of respondent," 27 the Solicitor General explained during the oral argument on March 19, 1996 that such allegation is simply baseless as there were many others who applied and were considered for repatriation, a list of whom was submitted by him to this Court, through a Manifestation 28 filed on April 3, 1996.

On the basis of the parties' submissions, we are convinced that the presumption of regularity in the performance of official duty and the presumption of legality in the repatriation of Frivaldo have not been successfully rebutted by Lee. The mere fact that the proceedings were speeded up is by itself not a ground to conclude that such proceedings were necessarily tainted. After all, the requirements of repatriation under P.D. No. 725 are not difficult to comply with, nor are they tedious and cumbersome. In fact, P.D. 725 29 itself requires very little of an applicant, and even the rules and regulations to implement the said decree were left to the Special Committee to promulgate. This is not unusual since, unlike in naturalization where an alien covets a first-time entry into Philippine political life, in repatriation the applicant is a former natural-born Filipino who is merely seeking to reacquire his previous citizenship. In the case of Frivaldo, he was undoubtedly a natural-born citizen who openly and faithfully served his country and his province prior to his naturalization in the United States -- a naturalization he insists was made necessary only to escape the iron clutches of a dictatorship he abhorred and could not in conscience embrace -- and who, after the fall of the dictator and the reestablishment of democratic space, wasted no time in returning to his country of birth to offer once more his talent and services to his people. So too, the fact that ten other persons, as certified to by the Solicitor General, were granted repatriation argues convincingly and conclusively against the existence of favoritism vehemently posited by Raul Lee. At any rate, any contest on the legality of Frivaldo's repatriation should have been pursued before the Committee itself, and, failing there, in the Office of the President, pursuant to the doctrine of exhaustion of administrative remedies. Third, Lee further contends that assuming the assailed repatriation to be valid, nevertheless it could only be effective as at 2:00 p.m. of June 30, 1995 whereas the citizenship qualification prescribed by the Local Government Code "must exist on the date of his election, if not when the certificate of candidacy is filed," citing our decision in G.R. 104654 30 which held that "both the Local Government Code and the Constitution require that only Philippine citizens can run and be elected to public office." Obviously, however, this was a mere obiter as the only issue in said case was whether Frivaldo's naturalization was valid or not -- and NOT the effective date thereof. Since the Court held his naturalization to be invalid, then the issue of when an aspirant for public office should be a citizen was NOT resolved at all by the Court. Which question we shall now directly rule on. Under Sec. 39 of the Local Government Code, "(a)n elective local official must be:
* a citizen of the Philippines; * a registered voter in the barangay, municipality, city, or province . . . where he intends to be elected; * a resident therein for at least one (1) year immediately preceding the day of the election;

* able to read and write Filipino or any other local language or dialect. * In addition, "candidates for the position of governor . . . must be at least twenty-three (23) years of age on election day.

From the above, it will be noted that the law does not specify any particular date or time when the candidate must possess citizenship, unlike that for residence (which must consist of at least one year's residency immediately preceding the day of election) and age (at least twenty three years of age on election day). Philippine citizenship is an indispensable requirement for holding an elective public office, 31 and the purpose of the citizenship qualification is none other than to ensure that no alien, i.e., no person owing allegiance to another nation, shall govern our people and our country or a unit of territory thereof. Now, an official begins to govern or to discharge his functions only upon his proclamation and on the day the law mandates his term of office to begin. Since Frivaldo re-assumed his citizenship on June 30, 1995 -- the very day 32 the term of office of governor (and other elective officials) began -- he was therefore already qualified to be proclaimed, to hold such office and to discharge the functions and responsibilities thereof as of said date. In short, at that time, he was already qualified to govern his native Sorsogon. This is the liberal interpretation that should give spirit, life and meaning to our law on qualifications consistent with the purpose for which such law was enacted. So too, even from a literal (as distinguished from liberal) construction, it should be noted that Section 39 of the Local Government Code speaks of "Qualifications" of "ELECTIVE OFFICIALS", not of candidates. Why then should such qualification be required at the time of election or at the time of the filing of the certificates of candidacies, as Lee insists? Literally, such qualifications -unless otherwise expressly conditioned, as in the case of age and residence -- should thus be possessed when the "elective [or elected] official" begins to govern, i.e., at the time he is proclaimed and at the start of his term -- in this case, on June 30, 1995. Paraphrasing this Court's ruling in Vasquez vs. Giap and Li Seng Giap & Sons, 33 if the purpose of the citizenship requirement is to ensure that our people and country do not end up being governed by aliens, i.e., persons owing allegiance to another nation, that aim or purpose would not be thwarted but instead achieved by construing the citizenship qualification as applying to the time of proclamation of the elected official and at the start of his term. But perhaps the more difficult objection was the one raised during the oral argument 34 to the effect that the citizenship qualification should be possessed at the time the candidate (or for that matter the elected official) registered as a voter. After all, Section 39, apart from requiring the official to be a citizen, also specifies as another item of qualification, that he be a "registered voter". And, under the law 35 a "voter" must be a citizen of the Philippines. So therefore, Frivaldo could not have been a voter -- much less a validly registered one -- if he was not a citizen at the time of such registration. The answer to this problem again lies in discerning the purpose of the requirement. If the law intended the citizenship qualification to be possessed prior to election consistent with the requirement of being a registered voter, then it would not have made citizenship

a SEPARATE qualification. The law abhors a redundancy. It therefore stands to reason that the law intended CITIZENSHIP to be a qualification distinct from being a VOTER, even if being a voter presumes being a citizen first. It also stands to reason that the voter requirement was included as another qualification (aside from "citizenship"), not to reiterate the need for nationality but to require that the official be registered as a voter IN THE AREA OR TERRITORY he seeks to govern, i.e., the law states: "a registered voter in the barangay, municipality, city, or province . . . where he intends to be elected." It should be emphasized that the Local Government Code requires an elective official to be a registered voter. It does not require him to vote actually. Hence, registration -- not the actual voting -- is the core of this "qualification". In other words, the law's purpose in this second requirement is to ensure that the prospective official is actually registered in the area he seeks to govern -- and not anywhere else. Before this Court, Frivaldo has repeatedly emphasized -- and Lee has not disputed -that he "was and is a registered voter of Sorsogon, and his registration as a voter has been sustained as valid by judicial declaration . . . In fact, he cast his vote in his precinct on May 8, 1995." 36 So too, during the oral argument, his counsel steadfastly maintained that "Mr. Frivaldo has always been a registered voter of Sorsogon. He has voted in 1987, 1988, 1992, then he voted again in 1995. In fact, his eligibility as a voter was questioned, but the court dismissed (sic) his eligibility as a voter and he was allowed to vote as in fact, he voted in all the previous elections including on May 8, 1995." 37 It is thus clear that Frivaldo is a registered voter in the province where he intended to be elected. There is yet another reason why the prime issue of citizenship should be reckoned from the date of proclamation, not necessarily the date of election or date of filing of the certificate of candidacy. Section 253 of the Omnibus Election Code 38 gives any voter, presumably including the defeated candidate, the opportunity to question the ELIGIBILITY (or the disloyalty) of a candidate. This is the only provision of the Code that authorizes a remedy on how to contest before the Comelec an incumbent's ineligibility arising from failure to meet the qualifications enumerated under Sec. 39 of the Local Government Code. Such remedy of Quo Warranto can be availed of "within ten days after proclamation" of the winning candidate. Hence, it is only at such time that the issue of ineligibility may be taken cognizance of by the Commission. And since, at the very moment of Lee's proclamation (8:30 p.m., June 30, 1995), Juan G. Frivaldo was already and indubitably a citizen, having taken his oath of allegiance earlier in the afternoon of the same day, then he should have been the candidate proclaimed as he unquestionably garnered the highest number of votes in the immediately preceding elections and such oath had already cured his previous "judicially-declared" alienage. Hence, at such time, he was no longer ineligible. But to remove all doubts on this important issue, we also hold that the repatriation of Frivaldo RETROACTED to the date of the filing of his application on August 17, 1994.

It is true that under the Civil Code of the Philippines, 39 "(l)aws shall have no retroactive effect, unless the contrary is provided." But there are settled exceptions 40 to this general rule, such as when the statute is CURATIVE or REMEDIAL in nature or when it CREATES NEW RIGHTS. According to Tolentino, 41 curative statutes are those which undertake to cure errors and irregularities, thereby validating judicial or administrative proceedings, acts of public officers, or private deeds and contracts which otherwise would not produce their intended consequences by reason of some statutory disability or failure to comply with some technical requirement. They operate on conditions already existing, and are necessarily retroactive in operation. Agpalo, 42 on the other hand, says that curative statutes are "healing acts . . . curing defects and adding to the means of enforcing existing obligations . . . (and) are intended to supply defects, abridge superfluities in existing laws, and curb certain evils. . . . By their very nature, curative statutes are retroactive . . . (and) reach back to past events to correct errors or irregularities and to render valid and effective attempted acts which would be otherwise ineffective for the purpose the parties intended." On the other hand, remedial or procedural laws, i.e., those statutes relating to remedies or modes of procedure, which do not create new or take away vested rights, but only operate in furtherance of the remedy or confirmation of such rights, ordinarily do not come within the legal meaning of a retrospective law, nor within the general rule against the retrospective operation of statutes. 43 A reading of P.D. 725 immediately shows that it creates a new right, and also provides for a new remedy, thereby filling certain voids in our laws. Thus, in its preamble, P.D. 725 expressly recognizes the plight of "many Filipino women (who) had lost their Philippine citizenship by marriage to aliens" and who could not, under the existing law (C.A. No. 63, as amended) avail of repatriation until "after the death of their husbands or the termination of their marital status" and who could neither be benefitted by the 1973 Constitution's new provision allowing "a Filipino woman who marries an alien to retain her Philippine citizenship . . ." because "such provision of the new Constitution does not apply to Filipino women who had married aliens before said constitution took effect." Thus, P.D. 725 granted a new right to these women -- the right to re-acquire Filipino citizenship even during their marital coverture, which right did not exist prior to P.D. 725. On the other hand, said statute also provided a new remedy and a new right in favor of other "natural born Filipinos who (had) lost their Philippine citizenship but now desire to re-acquire Philippine citizenship", because prior to the promulgation of P.D. 725 such former Filipinos would have had to undergo the tedious and cumbersome process of naturalization, but with the advent of P.D. 725 they could now re-acquire their Philippine citizenship under the simplified procedure of repatriation. The Solicitor General 44 argues:
By their very nature, curative statutes are retroactive, (DBP vs. CA, 96 SCRA 342), since they are intended to supply defects, abridge superfluities in existing laws (Del Castillo vs.

Securities and Exchange Commission, 96 Phil. 119) and curb certain evils (Santos vs. Duata, 14 SCRA 1041). In this case, P.D. No. 725 was enacted to cure the defect in the existing naturalization law, specifically C.A. No. 63 wherein married Filipino women are allowed to repatriate only upon the death of their husbands, and natural-born Filipinos who lost their citizenship by naturalization and other causes faced the difficulty of undergoing the rigid procedures of C.A. 63 for reacquisition of Filipino citizenship by naturalization. Presidential Decree No. 725 provided a remedy for the aforementioned legal aberrations and thus its provisions are considered essentially remedial and curative.

In light of the foregoing, and prescinding from the wording of the preamble, it is unarguable that the legislative intent was precisely to give the statute retroactive operation. "(A) retrospective operation is given to a statute or amendment where the intent that it should so operate clearly appears from a consideration of the act as a whole, or from the terms thereof." 45 It is obvious to the Court that the statute was meant to "reach back" to those persons, events and transactions not otherwise covered by prevailing law and jurisprudence. And inasmuch as it has been held that citizenship is a political and civil right equally as important as the freedom of speech, liberty of abode, the right against unreasonable searches and seizures and other guarantees enshrined in the Bill of Rights, therefore the legislative intent to give retrospective operation to P.D. 725 must be given the fullest effect possible. "(I)t has been said that a remedial statute must be so construed as to make it effect the evident purpose for which it was enacted , so that if the reason of the statute extends to past transactions , as well as to those in the future, then it will be so applied although the statute does not in terms so direct, unless to do so would impair some vested right or violate some constitutional guaranty." 46 This is all the more true of P.D. 725, which did not specify any restrictions on or delimit or qualify the right of repatriation granted therein. At this point, a valid question may be raised: How can the retroactivity of P.D. 725 benefit Frivaldo considering that said law was enacted on June 5, 1975, while Frivaldo lost his Filipino citizenship much later, on January 20, 1983, and applied for repatriation even later, on August 17, 1994? While it is true that the law was already in effect at the time that Frivaldo became an American citizen, nevertheless, it is not only the law itself (P.D. 725) which is to be given retroactive effect, but even the repatriation granted under said law to Frivaldo on June 30, 1995 is to be deemed to have retroacted to the date of his application therefor, August 17, 1994. The reason for this is simply that if, as in this case, it was the intent of the legislative authority that the law should apply to past events -- i.e., situations and transactions existing even before the law came into being -- in order to benefit the greatest number of former Filipinos possible thereby enabling them to enjoy and exercise the constitutionally guaranteed right of citizenship, and such legislative intention is to be given the fullest effect and expression, then there is all the more reason to have the law apply in a retroactive or retrospective manner to situations, events and transactions subsequent to the passage of such law . That is, the repatriation granted to Frivaldo on June 30, 1995 can and should be made to take effect as of date

of his application. As earlier mentioned, there is nothing in the law that would bar this or would show a contrary intention on the part of the legislative authority; and there is no showing that damage or prejudice to anyone, or anything unjust or injurious would result from giving retroactivity to his repatriation. Neither has Lee shown that there will result the impairment of any contractual obligation, disturbance of any vested right or breach of some constitutional guaranty. Being a former Filipino who has served the people repeatedly, Frivaldo deserves a liberal interpretation of Philippine laws and whatever defects there were in his nationality should now be deemed mooted by his repatriation. Another argument for retroactivity to the date of filing is that it would prevent prejudice to applicants. If P.D. 725 were not to be given retroactive effect, and the Special Committee decides not to act, i.e., to delay the processing of applications for any substantial length of time, then the former Filipinos who may be stateless, as Frivaldo -having already renounced his American citizenship -- was, may be prejudiced for causes outside their control. This should not be. In case of doubt in the interpretation or application of laws, it is to be presumed that the law-making body intended right and justice to prevail. 47 And as experience will show, the Special Committee was able to process, act upon and grant applications for repatriation within relatively short spans of time after the same were filed. 48 The fact that such interregna were relatively insignificant minimizes the likelihood of prejudice to the government as a result of giving retroactivity to repatriation. Besides, to the mind of the Court, direct prejudice to the government is possible only where a person's repatriation has the effect of wiping out a liability of his to the government arising in connection with or as a result of his being an alien, and accruing only during the interregnum between application and approval, a situation that is not present in the instant case. And it is but right and just that the mandate of the people, already twice frustrated, should now prevail. Under the circumstances, there is nothing unjust or iniquitous in treating Frivaldo's repatriation as having become effective as of the date of his application, i.e., on August 17, 1994. This being so, all questions about his possession of the nationality qualification -- whether at the date of proclamation (June 30, 1995) or the date of election (May 8, 1995) or date of filing his certificate of candidacy (March 20, 1995) would become moot. Based on the foregoing, any question regarding Frivaldo's status as a registered voter would also be deemed settled. Inasmuch as he is considered as having been repatriated -- i.e., his Filipino citizenship restored -- as of August 17, 1994, his previous registration as a voter is likewise deemed validated as of said date. It is not disputed that on January 20, 1983 Frivaldo became an American. Would the retroactivity of his repatriation not effectively give him dual citizenship, which under Sec. 40 of the Local Government Code would disqualify him "from running for any elective

local position?" 49 We answer this question in the negative, as there is cogent reason to hold that Frivaldo was really STATELESS at the time he took said oath of allegiance and even before that, when he ran for governor in 1988. In his Comment, Frivaldo wrote that he "had long renounced and had long abandoned his American citizenship -- long before May 8, 1995. At best, Frivaldo was stateless in the interim -- when he abandoned and renounced his US citizenship but before he was repatriated to his Filipino citizenship." 50 On this point, we quote from the assailed Resolution dated December 19, 1995: 51
By the laws of the United States, petitioner Frivaldo lost his American citizenship when he took his oath of allegiance to the Philippine Government when he ran for Governor in 1988, in 1992, and in 1995. Every certificate of candidacy contains an oath of allegiance to the Philippine Government."

These factual findings that Frivaldo has lost his foreign nationality long before the elections of 1995 have not been effectively rebutted by Lee. Furthermore, it is basic that such findings of the Commission are conclusive upon this Court, absent any showing of capriciousness or arbitrariness or abuse. 52 The Second Issue: Is Lack of Citizenship a Continuing Disqualification? Lee contends that the May 1, 1995 Resolution 53 of the Comelec Second Division in SPA No. 95-028 as affirmed in toto by Comelec En Banc in its Resolution of May 11, 1995 "became final and executory after five (5) days or on May 17, 1995, no restraining order having been issued by this Honorable Court. 54 Hence, before Lee "was proclaimed as the elected governor on June 30, 1995, there was already a final and executory judgment disqualifying" Frivaldo. Lee adds that this Court's two rulings (which Frivaldo now concedes were legally "correct") declaring Frivaldo an alien have also become final and executory way before the 1995 elections, and these "judicial pronouncements of his political status as an American citizen absolutely and for all time disqualified (him) from running for, and holding any public office in the Philippines." We do not agree. It should be noted that our first ruling in G.R. No. 87193 disqualifying Frivaldo was rendered in connection with the 1988 elections while that in G.R. No. 104654 was in connection with the 1992 elections. That he was disqualified for such elections is final and can no longer be changed. In the words of the respondent Commission (Second Division) in its assailed Resolution: 55
The records show that the Honorable Supreme Court had decided that Frivaldo was not a Filipino citizen and thus disqualified for the purpose of the 1988 and 1992 elections. However, there is no record of any "final judgment" of the disqualification of Frivaldo as a candidate for the May 8, 1995 elections. What the Commission said in its Order of June 21, 1995 (implemented on June 30, 1995), directing the proclamation of Raul R. Lee, was

that Frivaldo was not a Filipino citizen "having been declared by the Supreme Court in its Order dated March 25, 1995, not a citizen of the Philippines ." This declaration of the Supreme Court, however, was in connection with the 1992 elections.

Indeed, decisions declaring the acquisition or denial of citizenship cannot govern a person's future status with finality. This is because a person may subsequently reacquire, or for that matter lose, his citizenship under any of the modes recognized by law for the purpose. Hence, in Lee vs. Commissioner of Immigration, 56 we held:
Everytime the citizenship of a person is material or indispensable in a judicial or administrative case, whatever the corresponding court or administrative authority decides therein as to such citizenship is generally not considered res judicata, hence it has to be threshed out again and again, as the occasion demands.

The Third Issue: Comelec's Jurisdiction Over The Petition in SPC No. 95-317 Lee also avers that respondent Comelec had no jurisdiction to entertain the petition in SPC No. 95-317 because the only "possible types of proceedings that may be entertained by the Comelec are a pre-proclamation case, an election protest or a quo warranto case". Again, Lee reminds us that he was proclaimed on June 30, 1995 but that Frivaldo filed SPC No. 95-317 questioning his (Lee's) proclamation only on July 6, 1995 -- "beyond the 5-day reglementary period." Hence, according to him, Frivaldo's "recourse was to file either an election protest or a quo warranto action." This argument is not meritorious. The Constitution 57 has given the Comelec ample power to "exercise exclusive original jurisdiction over all contests relating to the elections, returns and qualifications of all elective . . . provincial . . . officials." Instead of dwelling at length on the various petitions that Comelec, in the exercise of its constitutional prerogatives, may entertain, suffice it to say that this Court has invariably recognized the Commission's authority to hear and decide petitions for annulment of proclamations -- of which SPC No. 95-317 obviously is one. 58 Thus, in Mentang vs. COMELEC, 59 we ruled:
The petitioner argues that after proclamation and assumption of office, a preproclamation controversy is no longer viable. Indeed, we are aware of cases holding that pre-proclamation controversies may no longer be entertained by the COMELEC after the winning candidate has been proclaimed. (citing Gallardo vs. Rimando, 187 SCRA 463; Salvacion vs. COMELEC, 170 SCRA 513; Casimiro vs. COMELEC, 171 SCRA 468.) This rule, however, is premised on an assumption that the proclamation is no proclamation at all and the proclaimed candidate's assumption of office cannot deprive the COMELEC of the power to make such declaration of nullity. ( citing Aguam vs. COMELEC, 23 SCRA 883; Agbayani vs. COMELEC, 186 SCRA 484.)

The Court however cautioned that such power to annul a proclamation must "be done within ten (10) days following the proclamation." Inasmuch as Frivaldo's petition was filed only six (6) days after Lee's proclamation, there is no question that the Comelec correctly acquired jurisdiction over the same.

The Fourth Issue: Was Lee's Proclamation Valid? Frivaldo assails the validity of the Lee proclamation. We uphold him for the following reasons: First. To paraphrase this Court in Labo vs. COMELEC, 60 "the fact remains that he (Lee) was not the choice of the sovereign will," and in Aquino vs. COMELEC, 61 Lee is "a second placer, . . . just that, a second placer." In spite of this, Lee anchors his claim to the governorship on the pronouncement of this Court in the aforesaid Labo 62 case, as follows:
The rule would have been different if the electorate fully aware in fact and in law of a candidate's disqualification so as to bring such awareness within the realm of notoriety, would nonetheless cast their votes in favor of the ineligible candidate. In such case, the electorate may be said to have waived the validity and efficacy of their votes by notoriously misapplying their franchise or throwing away their votes, in which case, the eligible candidate obtaining the next higher number of votes may be deemed elected.

But such holding is qualified by the next paragraph, thus:


But this is not the situation obtaining in the instant dispute. It has not been shown, and none was alleged, that petitioner Labo was notoriously known as an ineligible candidate, much less the electorate as having known of such fact. On the contrary, petitioner Labo was even allowed by no less than the Comelec itself in its resolution dated May 10, 1992 to be voted for the office of the city Payor as its resolution dated May 9, 1992 denying due course to petitioner Labo's certificate of candidacy had not yet become final and subject to the final outcome of this case.

The last-quoted paragraph in Labo, unfortunately for Lee, is the ruling appropriate in this case because Frivaldo was in 1995 in an identical situation as Labo was in 1992 when the Comelec's cancellation of his certificate of candidacy was not yet final on election day as there was in both cases a pending motion for reconsideration, for which reason Comelec issued an (omnibus) resolution declaring that Frivaldo (like Labo in 1992) and several others can still be voted for in the May 8, 1995 election, as in fact, he was. Furthermore, there has been no sufficient evidence presented to show that the electorate of Sorsogon was "fully aware in fact and in law" of Frivaldo's alleged disqualification as to "bring such awareness within the realm of notoriety;" in other words, that the voters intentionally wasted their ballots knowing that, in spite of their voting for him, he was ineligible. If Labo has any relevance at all, it is that the vicegovernor -- and not Lee -- should be pro- claimed, since in losing the election, Lee was, to paraphrase Labo again, "obviously not the choice of the people" of Sorsogon. This is the emphatic teaching of Labo:
The rule, therefore, is: the ineligibility of a candidate receiving majority votes does not entitle the eligible candidate receiving the next highest number of votes to be declared elected. A minority or defeated candidate cannot be deemed elected to the office.

Second. As we have earlier declared Frivaldo to have seasonably reacquired his citizenship and inasmuch as he obtained the highest number of votes in the 1995 elections, he -- not Lee -- should be proclaimed. Hence, Lee's proclamation was patently erroneous and should now be corrected. The Fifth Issue: Is Section 78 of the Election Code Mandatory? In G.R. No. 120295, Frivaldo claims that the assailed Resolution of the Comelec (Second Division) dated May 1, 1995 and the confirmatory en banc Resolution of May 11, 1995 disqualifying him for want of citizenship should be annulled because they were rendered beyond the fifteen (15) day period prescribed by Section 78, of the Omnibus Election Code which reads as follows:
Sec. 78. Petition to deny due course or to cancel a certificate of candidacy . -- A verified petition seeking to deny due course or to cancel a certificate of candidacy may be filed by any person exclusively on the ground that any material representation contained therein as required under Section 74 hereof is false. The petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy and shall be decided after notice and hearing, not later than fifteen days before the election . (Emphasis supplied.)

This claim is now moot and academic inasmuch as these resolutions are deemed superseded by the subsequent ones issued by the Commission (First Division) on December 19, 1995, affirmed en banc 63 on February 23, 1996; which both upheld his election. At any rate, it is obvious that Section 78 is merely directory as Section 6 of R.A. No. 6646 authorizes the Commission to try and decide petitions for disqualifications even after the elections, thus:
Sec. 6. Effect of Disqualification Case. -- Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be counted. If for any reason a candidate is not declared by final judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such election, the Court or Commission shall continue with the trial and hearing of the action, inquiry or protest and upon motion of the complainant or any intervenor, may during the pendency thereof order the suspension of the proclamation of such candidate whenever the evidence of his guilt is strong. (emphasis supplied)

Refutation of Mr. Justice Davide's Dissent In his dissenting opinion, the esteemed Mr. Justice Hilario G. Davide, Jr. argues that President Aquino's memorandum dated March 27, 1987 should be viewed as a suspension (not a repeal, as urged by Lee) of P.D. 725. But whether it decrees a suspension or a repeal is a purely academic distinction because the said issuance is not a statute that can amend or abrogate an existing law. The existence and subsistence of P.D. 725 were recognized in the first Frivaldo case; 64 viz., "(u)nder CA No. 63 as amended by CA No. 473 and P.D. No. 725, Philippine citizenship maybe reacquired by . . . repatriation". He also contends that by allowing

Frivaldo to register and to remain as a registered voter, the Comelec and in effect this Court abetted a "mockery" of our two previous judgments declaring him a non-citizen. We do not see such abetting or mockery. The retroactivity of his repatriation, as discussed earlier, legally cured whatever defects there may have been in his registration as a voter for the purpose of the 1995 elections. Such retroactivity did not change his disqualifications in 1988 and 1992, which were the subjects of such previous rulings. Mr. Justice Davide also believes that Quo Warranto is not the sole remedy to question the ineligibility of a candidate, citing the Comelec's authority under Section 78 of the Omnibus Election Code allowing the denial of a certificate of candidacy on the ground of a false material representation therein as required by Section 74. Citing Loong, he then states his disagreement with our holding that Section 78 is merely directory. We really have no quarrel. Our point is that Frivaldo was in error in his claim in G.R. No. 120295 that the Comelec Resolutions promulgated on May 1, 1995 and May 11, 1995 were invalid because they were issued "not later than fifteen days before the election" as prescribed by Section 78. In dismissing the petition in G.R. No. 120295, we hold that the Comelec did not commit grave abuse of discretion because "Section 6 of R.A. 6646 authorizes the Comelec to try and decide disqualifications even after the elections." In spite of his disagreement with us on this point, i.e., that Section 78 "is merely directory", we note that just like us, Mr. Justice Davide nonetheless votes to "DISMISS G.R. No. 120295". One other point. Loong, as quoted in the dissent, teaches that a petition to deny due course under Section 78 must be filed within the 25-day period prescribed therein. The present case however deals with the period during which the Comelec may decide such petition. And we hold that it may be decided even after the fifteen day period mentioned in Section 78. Here, we rule that a decision promulgated by the Comelec even after the elections is valid but Loong held that a petition filed beyond the 25-day period is out of time. There is no inconsistency nor conflict. Mr. Justice Davide also disagrees with the Court's holding that, given the unique factual circumstances of Frivaldo, repatriation may be given retroactive effect. He argues that such retroactivity "dilutes" our holding in the first Frivaldo case. But the first (and even the second Frivaldo) decision did not directly involve repatriation as a mode of acquiring citizenship. If we may repeat, there is no question that Frivaldo was not a Filipino for purposes of determining his qualifications in the 1988 and 1992 elections. That is settled. But his supervening repatriation has changed his political status -- not in 1988 or 1992, but only in the 1995 elections. Our learned colleague also disputes our holding that Frivaldo was stateless prior to his repatriation, saying that "informal renunciation or abandonment is not a ground to lose American citizenship". Since our courts are charged only with the duty of determining who are Philippine nationals, we cannot rule on the legal question of who are or who are not Americans. It is basic in international law that a State determines ONLY those who are its own citizens -- not who are the citizens of other countries. 65 The issue here is: the Comelec made a finding of fact that Frivaldo was stateless and such finding has not

been shown by Lee to be arbitrary or whimsical. Thus, following settled case law, such finding is binding and final. The dissenting opinion also submits that Lee who lost by chasmic margins to Frivaldo in all three previous elections, should be declared winner because "Frivaldo's ineligibility for being an American was publicly known". First, there is absolutely no empirical evidence for such "public" knowledge. Second, even if there is, such knowledge can be true post facto only of the last two previous elections. Third, even the Comelec and now this Court were/are still deliberating on his nationality before, during and after the 1995 elections. How then can there be such "public" knowledge? Mr. Justice Davide submits that Section 39 of the Local Government Code refers to the qualifications of elective local officials, i.e., candidates, and not elected officials, and that the citizenship qualification [under par. (a) of that section] must be possessed by candidates, not merely at the commencement of the term, but by election day at the latest. We see it differently. Section 39, par. (a) thereof speaks of "elective local official" while par. (b) to (f) refer to "candidates". If the qualifications under par. (a) were intended to apply to "candidates" and not elected officials, the legislature would have said so, instead of differentiating par. (a) from the rest of the paragraphs. Secondly, if Congress had meant that the citizenship qualification should be possessed at election day or prior thereto, it would have specifically stated such detail, the same way it did in pars. (b) to (f) far other qualifications of candidates for governor, mayor, etc. Mr. Justice Davide also questions the giving of retroactive effect to Frivaldo's repatriation on the ground, among others, that the law specifically provides that it is only after taking the oath of allegiance that applicants shall be deemed to have reacquired Philippine citizenship. We do not question what the provision states. We hold however that the provision should be understood thus: that after taking the oath of allegiance the applicant is deemed to have reacquired Philippine citizenship, which reacquisition (or repatriation) is deemed for all purposes and intents to have retroacted to the date of his application therefor. In any event, our "so too" argument regarding the literal meaning of the word "elective" in reference to Section 39 of the Local Authority Code, as well as regarding Mr. Justice Davide's thesis that the very wordings of P.D. 725 suggest non-retroactivity, were already taken up rather extensively earlier in this Decision. Mr. Justice Davide caps his paper with a clarion call: "This Court must be the first to uphold the Rule of Law." We agree -- we must all follow the rule of law. But that is NOT the issue here. The issue is how should the law be interpreted and applied in this case so it can be followed, so it can rule! At balance, the question really boils down to a choice of philosophy and perception of how to interpret and apply laws relating to elections: literal or liberal; the letter or the spirit, the naked provision or its ultimate purpose; legal syllogism or substantial justice; in isolation or in the context of social conditions; harshly against or gently in favor of the

voters' obvious choice. In applying election laws, it would be far better to err in favor of popular sovereignty than to be right in complex but little understood legalisms. Indeed, to inflict a thrice rejected candidate upon the electorate of Sorsogon would constitute unmitigated judicial tyranny and an unacceptable assault upon this Court's conscience. EPILOGUE In sum, we rule that the citizenship requirement in the Local Government Code is to be possessed by an elective official at the latest as of the time he is proclaimed and at the start of the term of office to which he has been elected. We further hold P.D. No. 725 to be in full force and effect up to the present, not having been suspended or repealed expressly nor impliedly at any time, and Frivaldo's repatriation by virtue thereof to have been properly granted and thus valid and effective. Moreover, by reason of the remedial or curative nature of the law granting him a new right to resume his political status and the legislative intent behind it, as well as his unique situation of having been forced to give up his citizenship and political aspiration as his means of escaping a regime he abhorred, his repatriation is to be given retroactive effect as of the date of his application therefor, during the pendency of which he was stateless, he having given up his U.S. nationality. Thus, in contemplation of law, he possessed the vital requirement of Filipino citizenship as of the start of the term of office of governor, and should have been proclaimed instead of Lee. Furthermore, since his reacquisition of citizenship retroacted to August 17, 1994, his registration as a voter of Sorsogon is deemed to have been validated as of said date as well. The foregoing, of course, are precisely consistent with our holding that lack of the citizenship requirement is not a continuing disability or disqualification to run for and hold public office. And once again, we emphasize herein our previous rulings recognizing the Comelec's authority and jurisdiction to hear and decide petitions for annulment of proclamations. This Court has time and again liberally and equitably construed the electoral laws of our country to give fullest effect to the manifest will of our people, 66 for in case of doubt, political laws must be interpreted to give life and spirit to the popular mandate freely expressed through the ballot. Otherwise stated, legal niceties and technicalities cannot stand in the way of the sovereign will. Consistently, we have held:
. . . (L)aws governing election contests must be liberally construed to the end that the will of the people in the choice of public officials may not be defeated by mere technical objections (citations omitted). 67

The law and the courts must accord Frivaldo every possible protection, defense and refuge, in deference to the popular will. Indeed, this Court has repeatedly stressed the importance of giving effect to the sovereign will in order to ensure the survival of our democracy. In any action involving the possibility of a reversal of the popular electoral choice, this Court must exert utmost effort to resolve the issues in a manner that would give effect to the will of the majority, for it is merely sound public policy to cause elective offices to be filled by those who are the choice of the majority. To successfully challenge a winning candidate's qualifications, the petitioner must clearly demonstrate that the ineligibility is so patently antagonistic 68 to constitutional and legal principles that

overriding such ineligibility and thereby giving effect to the apparent will of the people, would ultimately create greater prejudice to the very democratic institutions and juristic traditions that our Constitution and laws so zealously protect and promote. In this undertaking, Lee has miserably failed. In Frivaldo's case. it would have been technically easy to find fault with his cause. The Court could have refused to grant retroactivity to the effects of his repatriation and hold him still ineligible due to his failure to show his citizenship at the time he registered as a voter before the 1995 elections. Or, it could have disputed the factual findings of the Comelec that he was stateless at the time of repatriation and thus hold his consequent dual citizenship as a disqualification "from running for any elective local position." But the real essence of justice does not emanate from quibblings over patchwork legal technicality. It proceeds from the spirit's gut consciousness of the dynamic role of law as a brick in the ultimate development of the social edifice. Thus, the Court struggled against and eschewed the easy, legalistic, technical and sometimes harsh anachronisms of the law in order to evoke substantial justice in the larger social context consistent with Frivaldo's unique situation approximating venerability in Philippine political life. Concededly, he sought American citizenship only to escape the clutches of the dictatorship. At this stage, we cannot seriously entertain any doubt about his loyalty and dedication to this country. At the first opportunity, he returned to this land, and sought to serve his people once more. The people of Sorsogon overwhelmingly voted for him three times. He took an oath of allegiance to this Republic every time he filed his certificate of candidacy and during his failed naturalization bid. And let it not be overlooked, his demonstrated tenacity and sheer determination to re-assume his nationality of birth despite several legal set-backs speak more loudly, in spirit, in fact and in truth than any legal technicality, of his consuming intention and burning desire to re-embrace his native Philippines even now at the ripe old age of 81 years. Such loyalty to and love of country as well as nobility of purpose cannot be lost on this Court of justice and equity. Mortals of lesser mettle would have given up. After all, Frivaldo was assured of a life of ease and plenty as a citizen of the most powerful country in the world. But he opted, nay, single-mindedly insisted on returning to and serving once more his struggling but beloved land of birth. He therefore deserves every liberal interpretation of the law which can be applied in his favor. And in the final analysis, over and above Frivaldo himself, the indomitable people of Sorsogon most certainly deserve to be governed by a leader of their overwhelming choice. WHEREFORE, in consideration of the foregoing: (1) The petition in G.R. No. 123755 is hereby DISMISSED. The assailed Resolutions of the respondent Commission are AFFIRMED. (2) The petition in G.R. No. 120295 is also DISMISSED for being moot and academic. In any event, it has no merit. No costs.

SO ORDERED. Padilla, Regalado, Romero, Bellosillo, Francisco, Hermosisima, Jr. and Torres, Jr., JJ., concur. Melo, Vitug and Kapunan, JJ., concurs in the result. Narvasa, C.J. and Mendoza, J., took no part.

Separate Opinions
PUNO, J., concurring: I concur with the path-breaking ponencia of Mr. Justice Panganiban which is pro-people and pierces the myopia of legalism. Upholding the sovereign will of the people which is the be-all and the end-all of republicanism, it rests on a foundation that will endure time and its tempest. The sovereignty of our people is the primary postulate of the 1987 Constitution. For this reason, it appears as the first in our declaration of principles and state policies. Thus, section 1 of Article II of our fundamental law proclaims that "[t]he Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them." The same principle served as the bedrock of our 1973 and 1935 Constitutions. 1 It is one of the few principles whose truth has been cherished by the Americans as self-evident. Section 4, Article IV of the U.S. Constitution makes it a duty of the Federal government to guarantee to every state a "republican form of government." With understandable fervor, the American authorities imposed republicanism as the cornerstone of our 1935 Constitution then being crafted by its Filipino framers. 2 Borne out of the 1986 people power EDSA revolution, our 1987 Constitution is more people-oriented. Thus, section 4 of Article II provides as a state policy that the prime

duty of the Government is "to serve and protect the people." Section 1, Article XI also provides that ". . . public officers . . . must at all times be accountable to the people . . ." Sections 15 and 1 of Article XIII define the role and rights of people's organizations. Section 5(2) of Article XVI mandates that "[t]he state shall strengthen the patriotic spirit and nationalist consciousness of the military, and respect for people's rights in the performance of their duty." And section 2 of Article XVII provides that "amendments to this Constitution may likewise be directly proposed by the people through initiative . . ." All these provisions and more are intended to breathe more life to the sovereignty of our people. To be sure, the sovereignty of our people is not a kabalistic principle whose dimensions are buried in mysticism. Its metes and bounds are familiar to the framers of our Constitutions. They knew that in its broadest sense, sovereignty is meant to be supreme, the jus summi imperu, the absolute right to govern. 3 Former Dean Vicente Sinco 4 states that an essential quality of sovereignty is legal omnipotence, viz.: "Legal theory establishes certain essential qualities inherent in the nature of sovereignty. The first is legal omnipotence. This means that the sovereign is legally omnipotent and absolute in relation to other legal institutions. It has the power to determine exclusively its legal competence. Its powers are original, not derivative. It is the sole judge of what it should do at any given time." 5 Citing Barker, 6 he adds that a more amplified definition of sovereignty is that of "a final power of final legal adjustment of all legal issues ." The U.S. Supreme Court expressed the same thought in the landmark case of Yick Wo v. Hopkins, 7 where it held that ". . . sovereignty itself is, of course, not subject to law , for it is the author and source of law; but in our system, while sovereign powers are delegated to the agencies of government, sovereignty itself remains with the people, by whom and for whom all government exists and acts." In our Constitution, the people established a representative democracy as distinguished from a pure democracy. Justice Isagani Cruz explains: 8
xxx xxx xxx A republic is a representative government, a government run by and for the people. It is not a pure democracy where the people govern themselves directly. The essence of republicanism is representation and renovation, the selection by the citizenry of a corps of public functionaries who derive their mandate from the people and act on their behalf, serving for a limited period only, after which they are replaced or retained, at the option of their principal. Obviously, a republican government is a responsible government whose officials hold and discharge their position as a public trust and shall, according to the Constitution, "at all times be accountable to the people" they are sworn to serve . The purpose of a republican government it is almost needless to state, is the promotion of the common welfare according to the will of the people themselves .

I appreciate the vigorous dissent of Mr. Justice Davide. I agree that sovereignty is indivisible but it need not always be exercised by the people together, all the time. 9 For this reason, the Constitution and our laws provide when the entire electorate or only some of them can elect those who make our laws and those who execute our laws. Thus, the entire electorate votes for our senators but only our district electorates vote

for our congressmen, only our provincial electorates vote for the members of our provincial boards, only our city electorates vote for our city councilors, and only our municipal electorates vote for our councilors. Also, the entire electorate votes for our President and Vice-President but only our provincial electorates vote for our governors, only our city electorates vote for our mayors, and only our municipal electorates vote for our mayors. By defining and delimiting the classes of voters who can exercise the sovereignty of the people in a given election, it cannot be claimed that said sovereignty has been fragmented. It is my respectful submission that the issue in the case at bar is not whether the people of Sorsogon should be given the right to defy the law by allowing Frivaldo to sit as their governor. Rather, the issue is: whether the will of the voters of Sorsogon clearly choosing Frivaldo as governor ought to be given a decisive value considering the uncertainty of the law on when a candidate ought to satisfy the qualification of citizenship. The uncertainty of law and jurisprudence, both here and abroad, on this legal issue cannot be denied. In the United States, 10 there are two (2) principal schools of thought on the matter. One espouses the view that a candidate must possess the qualifications for office at the time of his election. The other ventures the view that the candidate should satisfy the qualifications at the time he assumes the powers of the office. I am unaware of any Philippine decision that has squarely resolved this difficult question of law. The ponencia of Mr. Justice Panganiban adhered to the second school of thought while Mr. Justice Davide dissents. I emphasize the honest-to-goodness difference in interpreting our law on the matter for this is vital to dispel the fear of Mr. Justice Davide that my opinion can bring about ill effects to the State. Mr. Justice Davide's fear is based on the assumption that Frivaldo continues to be disqualified and we cannot allow him to sit as governor without transgressing the law. I do not concede this assumption for as stressed above, courts have been sharply divided by this mind boggling issue. Given this schism, I do not see how we can derogate on the sovereignty of the people by according more weight to the votes of the people of Sorsogon. Mr. Justice Davide warns that should the people of Batanes stage a rebellion, we cannot prosecute them "because of the doctrine of people's sovereignty." With due respect, the analogy is not appropriate. In his hypothetical case, rebellion is concededly a crime, a violation of Article 134 of the Revised Penal Code, an offense against the sovereignty of our people. In the case at bar, it cannot be held with certitude that the people of Sorsogon violated the law by voting for Frivaldo as governor . Frivaldo's name was in the list of candidates allowed by COMELEC to run for governor. At that time too, Frivaldo was taking all steps to establish his Filipino citizenship. And even our jurisprudence has not settled the issue when a candidate should possess the qualification of citizenship. Since the meaning of the law is arguable then and now, I cannot imagine how it will be disastrous for the State if we tilt the balance in the case at bar in favor of the people of Sorsogon.

In sum, I respectfully submit that the sovereign will of our people should be resolutory of the case at bar which is one of its kind, unprecedented in our political history. For three (3) times, Frivaldo ran as governor of the province of Sorsogon. For two (2) times, he was disqualified on the ground of citizenship. The people of Sorsogon voted for him as their governor despite his disqualification. The people never waffled in their support for Frivaldo. In 1988, they gave him a winning margin of 27,000; in 1992, they gave him a winning spread of 57,000; in 1995, he posted a margin of 20,000. Clearly then, Frivaldo is the overwhelming choice of the people of Sorsogon. In election cases, we should strive to align the will of the legislature as expressed in its law with the will of the sovereign people as expressed in their ballots. For law to reign, it must respect the will of the people. For in the eloquent prose of Mr. Justice Laurel, ". . . an enfranchised citizen is a particle of popular sovereignty and is the ultimate source of established authority." 11 The choice of the governed on who shall be their governor merits the highest consideration by all agencies of government. In cases where the sovereignty of the people is at stake, we must not only be legally right but also politically correct. We cannot fail by making the people succeed. DAVIDE, JR., J., dissenting: After deliberating on the re-formulated issues and the conclusions reached by my distinguished colleague, Mr. Justice Artemio V. Panganiban, I find myself unable to join him. I I agree with petitioner Lee that Frivaldo's repatriation was void, but not on the ground that President Corazon C. Aquino's 27 March 1987 memorandum "effectively repealed" P.D. No. 725. In my view, the said memorandum only suspended the implementation of the latter decree by divesting the Special Committee on Naturalization of its authority to further act on grants of citizenship under LOI No. 270, as amended, P.D. No. 836, as amended; P.D. No. 1379; and "any other related laws, orders, issuances and rules and regulations." A reading of the last paragraph of the memorandum can lead to no other conclusion, thus:
In view of the foregoing, you as Chairman and members of the Special Committee on Naturalization, are hereby directed to cease and desist from undertaking any and all proceedings within your functional area of responsibility, as defined in Letter of Instruction No. 270 dated April 11, 1975, as amended, Presidential Decree No. 836 dated December 3, 1975, as amended, and Presidential Decree No. 1379 dated May 17, 1978, relative to the grant of citizenship under the said laws, and any other related laws, orders, issuances and rules and regulations. (emphasis supplied)

It is self-evident that the underscored clause can only refer to those related to LOI No. 270, P.D. No. 836, and P.D. No. 1379. There is no doubt in my mind that P.D. No. 725 is one such "related law" as it involves the reacquisition of Philippine citizenship by repatriation and designates the Special Committee on Naturalization created under LOI No. 270 to receive and act on (i.e., approve or disapprove) applications under the said decree. The power of President Aquino to suspend these issuances by virtue of the 27

March 1987 memorandum is beyond question considering that under Section 6, Article XVIII of the 1987 Constitution, she exercised legislative power until the Congress established therein convened on the fourth Monday of July 1987. I disagree with the view expressed in the ponencia that the memorandum of 27 March 1987 was merely a declaration of "executive policy," and not an exercise of legislative power. LOI No. 270, P.D. No. 836, P.D. No. 1379 and "any other related laws," such as P.D. No. 725, were issued by President Ferdinand E. Marcos in the exercise of his legislative powers -- not executive power. These laws relate to the acquisition (by naturalization) and reacquisition (by repatriation) of Philippine citizenship, and in light of Sections 1(4) and 3, Article IV of the 1987 Constitution (naturalization and reacquisition of Philippine citizenship shall be in accordance with law), it is indubitable that these subjects are a matter of legislative prerogative. In the same vein, the creation of the Special Committee on Naturalization by LOI No. 270 and the conferment of the power to accept and act on applications under P.D. No. 725 are clearly legislative acts. Accordingly, the revocation of the cease and desist order and the reactivation or revival of the Committee can be done only by legislative fiat, i.e., by Congress, since the President had long lost his authority to exercise "legislative power." Considering that Congress has not seen it fit to do so, the President cannot, in the exercise of executive power, lift the cease and desist order nor reactivate/reconstitute/revive the Committee. A multo fortiori, the Committee cannot validly accept Frivaldo's application for repatriation and approve it. II Even assuming arguendo that Frivaldo's repatriation is valid, it did not "cure his lack of citizenship." I depart from the view in the ponencia that Section 39 of the Local Government Code of 1991 does not specify the time when the citizenship requirement must be met, and that being the case, then it suffices that citizenship be possessed upon commencement of the term of the office involved; therefore, since Frivaldo "reassumed" his Philippine citizenship at 2:00 p.m. on 30 June 1995 and the term of office of Governor commenced at 12:00 noon of that day, he had, therefore, complied with the citizenship requirement. In the first place, Section 39 actually prescribes the qualifications of elective local officials and not those of an elected local official. These adjectives are not synonymous, as the ponencia seems to suggest. The first refers to the nature of the office, which requires the process of voting by the electorate involved; while the second refers to a victorious candidate for an elective office. The section unquestionably refers to elective -- not elected -- local officials. It falls under Title Two entitled ELECTIVE OFFICIALS; under Chapter 1 entitled Qualifications and Election; and paragraph (a) thereof begins with the phrase "An elective local official," while paragraphs (b) to (f) thereof speak of candidates. It reads as follows:
Sec. 39. Qualifications. -- (a) An elective local official must be a citizen of the Philippines; a registered voter in the barangay, municipality, city, or province or, in the case of a

member of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan, the district where he intends to be elected; a resident therein for at least one (1) year immediately preceding the day of the election; and able to read and write Filipino or any other local language or dialect. (b) Candidates for the position of governor, vice governor or member of the sangguniang panlalawigan, or mayor, vice mayor or member of the sangguniang panlungsod of highly urbanized cities must be at least twenty-three (23) years of age on election day. (c) Candidates for the position of mayor or vice mayor of independent component cities, component cities, or municipalities must be at least twenty-one (21) years of age on election day. (d) Candidates for the position of member of the sangguniang panlungsod or sangguniang bayan must be at least eighteen (18) years of age on election day. (e) Candidates for the position of punong barangay or member of the sangguniang barangay must be at least eighteen (18) years of age on election day. (f) Candidates for the sangguniang kabataan must be at least fifteen (15) years of age but not more than twenty-one (21) years of age on election day (emphasis supplied)

It is thus obvious that Section 39 refers to no other than the qualifications of candidates for elective local offices and their election. Hence, in no way may the section be construed to mean that possession of qualifications should be reckoned from the commencement of the term of office of the elected candidate. For another, it is not at all true that Section 39 does not specify the time when the citizenship requirement must be possessed. I submit that the requirement must be satisfied, or that Philippine citizenship must be possessed, not merely at the commencement of the term, but at an earlier time, the latest being election day itself. Section 39 is not at all ambiguous nor uncertain that it meant this to be, as one basic qualification of an elective local official is that he be "A REGISTERED VOTER IN THE BARANGAY, MUNICIPALITY, CITY OR PROVINCE . . . WHERE HE INTENDS TO VOTE." This simply means that he possesses all the qualifications to exercise the right of suffrage. The fundamental qualification for the exercise of this sovereign right is the possession of Philippine citizenship. No less than the Constitution makes it the first qualification, as Section 1, Article V thereof provides:
Sec. 1. Suffrage may be exercised by all citizens of the Philippines not otherwise disqualified by law, who are at least eighteen years of age, and who shall have resided in the Philippines for at least one year and in the place wherein they propose to vote for at least six months immediately preceding the election. . . . (emphasis supplied)

And Section 117 of the Omnibus Election Code of the Philippines (B.P. Blg. 881) expressly provides for the qualifications of a voter. Thus:
Sec. 117 Qualifications of a voter. -- Every citizen of the Philippines, not otherwise disqualified by law, eighteen years of age or over, who shall have resided in the Philippines for one year and in the city or municipality wherein he proposes to vote for at

least six months immediately preceding the election, may be a registered voter. (emphasis supplied)

It is undisputed that this Court twice voided Frivaldo's election as Governor in the 1988 and 1992 elections on the ground that for lack of Philippine citizenship -- he being a naturalized citizen of the United States of America -- he was DISQUALIFIED to be elected as such and to serve the position (Frivaldo vs. Commission on Elections, 174 SCRA 245 [1989]; Republic of the Philippines vs. De la Rosa, 232 SCRA 785 [1994]). This disqualification inexorably nullified Frivaldo's registration as a voter and declared it void ab initio. Our judgments therein were self-executory and no further act, e.g., a COMELEC order to cancel his registration as a voter or the physical destruction of his voter's certificate, was necessary for the ineffectivity. Thus, he was never considered a registered voter for the elections of May 1992, and May 1995, as there is no showing that Frivaldo registered anew as a voter for the latter elections. Even if he did -- in obvious defiance of his decreed disqualification -- this did not make him a Filipino citizen, hence it was equally void ab initio. That he filed his certificate of candidacy for the 1995 elections and was even allowed to vote therein were of no moment. Neither act made him a Filipino citizen nor nullified the judgments of this Court. On the contrary, said acts made a mockery of our judgments. For the Court now to validate Frivaldo's registration as a voter despite the judgments of disqualification is to modify the said judgments by making their effectivity and enforceability dependent on a COMELEC order cancelling his registration as a voter, or on the physical destruction of his certificate of registration as a voter which, of course, was never our intention. Moreover, to sanction Frivaldo's registration as a voter would be to sacrifice substance in favor of form (the piece of paper that is the book of voters or list of voters or voter's ID), and abet the COMELEC's incompetence in failing to cancel Frivaldo's registration and allowing him to vote. The second reason in the ponencia as to why the citizenship disqualification should be reckoned not from the date of the election nor the filing of the certificate of candidacy, but from the date of proclamation, is that the only available remedy to question the ineligibility (or disloyalty) of a candidate is a petition for quo warranto which, under Section 253 of the Omnibus Election Code, may be filed only within ten days from proclamation and not earlier. I beg to differ. Clearly, quo warranto is not the sole remedy available to question a candidate's ineligibility for public office. Section 78 of the Omnibus Election Code allows the filing of a petition to deny due course to or cancel the certificate of candidacy on the ground that any material representation contained therein, as required by Section 74, is false. Section 74, in turn, requires that the person filing the certificate of candidacy must state, inter alia, that he is eligible for the office, which means that he has all the qualifications (including, of course, fulfilling the citizenship requirement) and none of the disqualifications as provided by law. The petition under Section 78 may be filed at any time not later than 25 days from the filing of the certificate of candidacy . The section reads in full as follows:

Sec. 78. Petition to deny due course to or cancel a certificate of candidacy . -- A verified petition seeking to deny due course or to cancel a certificate of candidacy may be filed by any person exclusively on the ground that any material representation contained therein as required under Section 74 hereof is false. The petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days before the election.

This remedy was recognized in Loong vs. Commission on Elections (216 SCRA 760, 768 [1992]), where this Court held:
Thus, if a person qualified to file a petition to disqualify a certain candidate fails to file the petition within the 25-day period Section 78 of the Code for whatever reasons, the election laws do not leave him completely helpless as he has another chance to raise the disqualification of the candidate by filing a petition for quo warranto within ten (10) days from the proclamation of the results of the election, as provided under Section 253 of the Code. Section 1, Rule 21 of the Comelec Rules of Procedure similarly provides that any voter contesting the election of any regional, provincial or city official on the ground of ineligibility or of disloyalty to the Republic of the Philippines may file a petition for quo warranto with the Electoral Contest Adjudication Department. The petition may be filed within ten (10) days from the date the respondent is proclaimed (Section 2).

Likewise, Rule 25 of the Revised COMELEC Rules of Procedure allows the filing of a petition for disqualification on the ground of failure to possess all the qualifications of a candidate as provided by the Constitution or by existing laws, "any day after the last day for filing of certificates of candidacy but not later than the date of proclamation." Sections 1 and 3 thereof provide:
Rule 25 -- Disqualification of Candidates Sec. 1. Grounds for Disqualification. Any candidate who does not possess all the qualifications of a candidate as provided for by the Constitution or by existing law or who commits any act declared by law to be grounds for disqualification may be disqualified from continuing as a candidate. xxx xxx xxx Sec. 3. Period to File Petition. The petition shall be filed any day after the last day for filing of certificates of candidacy but not later than the date of proclamation .

While the validity of this rule insofar as it concerns petitions for disqualification on the ground of lack of all qualifications may be doubtful, its invalidity is not in issue here. In this connection, it would seem appropriate to take up the last issue grappled within the ponencia, viz., is Section 78 of the Omnibus Election Code mandatory? The answer is provided in Loong.
We also do not find merit in the contention of respondent Commission that in the light of the provisions of Sections 6 and 7 of Rep. Act No. 6646, a petition to deny due course to or cancel a certificate of candidacy may be filed even beyond the 25-day period

prescribed by Section 78 of the Code, as long as it is filed within a reasonable time from the discovery of the ineligibility. Sections 6 and 7 of Rep. Act No. 6646 are here re-quoted: Sec. 6. Effect of Disqualification case. Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be counted. If for any reason a candidate is not declared by final judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such election, the Court or Commission shall continue with the trial and hearing of the action, inquiry or protest and, upon motion of the complainant or any intervenor, may during the pendency thereof order the suspension of the proclamation of such candidate whenever the evidence of his guilt is strong. Sec. 7. Petition to Deny Due Course To or Cancel a Certificate of Candidacy. The procedure hereinabove provided shall apply to petitions to deny due course to or cancel a certificate of candidacy as provided in Section 78 of Batas Pambansa Blg. 881. It will be noted that nothing in Sections 6 or 7 modifies or alters the 25- day period prescribed by Section 78 of the Code for filing the appropriate action to cancel a certificate of candidacy on account of any false representation made therein. On the contrary, said Section 7 affirms and reiterates Section 78 of the Code. We note that Section 6 refers only to the effects of a disqualification case which may be based on grounds other than that provided under Section 78 of the Code. But Section 7 of Rep. Act No. 6646 also makes the effects referred to in Section 6 applicable to disqualification cases filed under Section 78 of the Code. Nowhere in Sections 6 and 7 of Rep. Act No. 6646 is mention made of the period within which these disqualification cases may be filed. This is because there are provisions in the Code which supply the periods within which a petition relating to disqualification of candidates must be filed, such as Section 78, already discussed, and Section 253 on petitions for quo warranto.

I then disagree with the asseveration in the ponencia that Section 78 is merely directory because Section 6 of R.A. No. 6646 authorizes the COMELEC to try and decide petitions for disqualification even after elections. I submit that Section 6 refers to disqualifications under Sections 12 and 68 of the Omnibus Election Code and consequently modifies Section 72 thereof. As such, the proper court or the COMELEC are granted the authority to continue hearing the case after the election, and during the pendency of the case, suspend the proclamation of the victorious candidate, if the evidence against him is strong. Sections 12, 68, and 72 of the Code provide:
Sec. 12. Disqualifications. Any person who has been declared by competent authority insane or incompetent, or has been sentenced by final judgment for subversion, insurrection, rebellion or for any offense for which he has been sentenced to a penalty of more than eighteen months or for a crime involving moral turpitude, shall be disqualified to be a candidate and to hold any office, unless he has been given plenary pardon or granted amnesty. The disqualifications to be a candidate herein provided shall be deemed removed upon declaration by competent authority that said insanity or incompetence had been removed

or after the expiration of a period of five years from his service of sentence, unless within the same period he again becomes disqualified. xxx xxx xxx Sec. 68. Disqualifications. Any candidate who, in an action or protest in which he is a party is declared by final decision of a competent court guilty of, or found by the Commission of having (a) given money or other material consideration to influence, induce or corrupt the voters or public officials performing electoral functions; (b) committed acts of terrorism to enhance his candidacy; (c) spent in his election campaign an amount in excess of that allowed by this Code; (d) solicited, received or made any contribution prohibited under Sections 89, 95, 96, 97 and 104; or (e) violated any of Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-paragraph 6, shall be disqualified from continuing as a candidate, or if he has been elected, from holding the office. Any person who is a permanent resident of or an immigrant to a foreign country shall not be qualified to run for any elective office under this Code, unless said person has waived his status as permanent resident or immigrant of a foreign country in accordance with the residence requirement provided for in the election laws. (Sec. 25, 1971 EC) Sec. 72. Effects of disqualification cases and priority. The Commission and the courts shall give priority to cases of disqualification by reason of violation of this Act to the end that a final decision shall be rendered not later than seven days before the election in which the disqualification is sought. Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be counted. Nevertheless, if for any reason, a candidate is not declared by final judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such election, his violation of the provisions of the preceding sections shall not prevent his proclamation and assumption to office.

III Still assuming that the repatriation is valid, I am not persuaded by the arguments in support of the thesis that Frivaldo's repatriation may be given retroactive effect, as such goes against the spirit and letter of P.D. No. 725. The spirit adheres to the principle that acquisition or re-acquisition of Philippine citizenship is not a right, but a mere privilege. Before the advent of P.D. No. 725, only the following could apply for repatriation: (a) Army, Navy, or Air Corps deserters; and (b) a woman who lost her citizenship by reason of her marriage to an alien after the death of her spouse (Section 2[2], C.A. No. 63). P.D. NO. 725 expanded this to include Filipino women who lost their Philippine citizenship by marriage to aliens even before the death of their alien husbands, or the termination of their marital status and to natural-born Filipino citizens who lost their Philippine citizenship but subsequently desired to reacquire the latter. Turning now to the letter of the law, P.D. No. 725 expressly provides that repatriation takes effect only after taking the oath of allegiance to the Republic of the Philippines, thus:

. . . may reacquire Philippine citizenship . . . by applying with the Special Committee on Naturalization created by Letter of Instruction No. 270, and, if their applications are approved, taking the necessary oath of allegiance to the Republic of the Philippines , AFTER WHICH THEY SHALL BE DEEMED TO HAVE REACQUIRED PHILIPPINE CITIZENSHIP. (emphasis and capitalization supplied)

Clearly then, the steps to reacquire Philippine citizenship by repatriation under the decree are: (1) filing the application; (2) action by the committee; and (3) taking of the oath of allegiance if the application is approved. It is only UPON TAKING THE OATH OF ALLEGIANCE that the applicant is deemed ipso jure to have reacquired Philippine citizenship. If the decree had intended the oath taking to retroact to the date of the filing of the application, then it should not have explicitly provided otherwise. This theory in the ponencia likewise dilutes this Court's pronouncement in the first Frivaldo case that what reacquisition of Filipino citizenship requires is an act "formally rejecting [the] adopted state and reaffirming . . . allegiance to the Philippines." That act meant nothing less than taking of the oath of allegiance to the Republic of the Philippines. If we now take this revision of doctrine to its logical end, then it would also mean that if Frivaldo had chosen and reacquired Philippine citizenship by naturalization or through Congressional action, such would retroact to the filing of the petition for naturalization or the bill granting him Philippine citizenship. This is a proposition which both the first and second Frivaldo cases soundly rejected. The other reason adduced in the ponencia in support of the proposition that P.D. No. 725 can be given retroactive effect is its alleged curative or remedial nature. Again, I disagree. In the first place, by no stretch of legal hermeneutics may P.D. No. 725 be characterized as a curative or remedial statute:
Curative or remedial statutes are healing acts. They are remedial by curing defects and adding to the means of enforcing existing obligations. The rule in regard to curative statutes is that if the thing omitted or failed to be done, and which constitutes the defect sought to be removed or made harmless, is something the legislature might have dispensed with by a previous statute, it may do so by a subsequent one. Curative statutes are intended to supply defects, abridge superfluities in existing laws, and curb certain evils. They are intended to enable a person to carry into effect that which they have designed and intended, but has failed of expected legal consequence by reason of some statutory disability or irregularity in their own action. They make valid that which, before the enactment of the statute, was invalid. (RUBEN E. AGPALO, Statutory Construction, Second ed. [1990], 270-271, citations omitted).

P.D. No. 725 provides for the reacquisition of Philippine citizenship lost through the marriage of a Filipina to an alien and through naturalization in a foreign country of natural-born Filipino citizens. It involves then the substantive, nay primordial, right of citizenship. To those for whom it is intended, it means, in reality, the acquisition of " a new right," as the ponencia cannot but concede. Therefore, it may not be said to merely remedy or cure a defect considering that one who has lost Philippine citizenship does

not have the right to reacquire it. As earlier stated, the Constitution provides that citizenship, once lost, may only be reacquired in the manner provided by law. Moreover, it has also been observed that:
The idea is implicit from many of the cases that remedial statutes are statutes relating to procedure and not substantive rights. (Sutherland, Statutory Construction, Vol. 3, Third ed. [1943], 5704 at 74, citations omitted).

If we grant for the sake of argument, however, that P.D. No. 725 is curative or remedial statute, it would be an inexcusable error to give it a retroactive effect since it explicitly provides the date of its effectivity. Thus:
This Decree shall take effect immediately. Done in the city of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred and seventy five.

Nevertheless, if the retroactivity is to relate only to the reacquisition of Philippine citizenship, then nothing therein supports such theory, for as the decree itself unequivocally provides, it is only after taking the oath of allegiance to the Republic of the Philippines that the applicant is DEEMED TO HAVE REACQUIRED PHILIPPINE CITIZENSHIP. IV Assuming yet again, for the sake of argument, that taking the oath of allegiance retroacted to the date of Frivaldo's application for repatriation, the same could not be said insofar as it concerned the United States of America, of which he was a citizen. For under the laws of the United States of America, Frivaldo remained an American national until he renounced his citizenship and allegiance thereto at 2:00 p.m. on 30 June 1995, when he took his oath of allegiance to the Republic of the Philippines. Section 401 of the Nationality Act of 1940 of the United States of America provides that a person who is a national of the United States of America, whether by birth or naturalization, loses his nationality by, inter alia, "(b) Taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state" (SIDNEY KANSAS, U.S. Immigration Exclusion and Deportation and Citizenship of the United States of America, Third ed., [1948] 341-342). It follows then that on election day and until the hour of the commencement of the term for which he was elected - noon of 30 June 1995 as per Section 43 of the Local Government Code - Frivaldo possessed dual citizenship, viz., (a) as an American citizen; and (b) as a Filipino citizen through the adoption of the theory that the effects of his taking the oath of allegiance were retrospective. Hence, he was disqualified to run for Governor for yet another reason: possession of dual citizenship, in accordance with Section 40 (d) of the Local Government Code. V

The assertion in the ponencia that Frivaldo may be considered STATELESS on the basis of his claim that he "had long renounced and had long abandoned his American citizenship - long before May 8, 1985" - is untenable, for the following reasons: first, it is based on Frivaldo's unproven, self-serving allegation; second, informal renunciation or abandonment is not a ground to lose American citizenship; and third, simply put, never did the status of a STATELESS person attach to Frivaldo. Statelessness may be either de jure, which is the status of individuals stripped of their nationality by their former government without having an opportunity to acquire another; or de facto, which is the status of individuals possessed of a nationality whose country does not give them protection outside their own country, and who are commonly, albeit imprecisely, referred to as refugees (JORGE R. COQUIA, et al., Conflict of Laws Cases, Materials and Comments, 1995 ed., 290). Specifically, under Chapter 1, Article 1 of the United Nations Convention Regarding the Status of Stateless Persons (Philippine Treaty Series, Compiled and Annotated by Haydee B. Yorac, vol. III, 363), a stateless person is defined as "a person who is not considered as a national by any State under the operation of its law." However, it has not been shown that the United States of America ever ceased to consider Frivaldo its national at any time before he took his oath of allegiance to the Republic of the Philippines on 30 June 1995. VI Finally, I find it in order to also express my view on the concurring opinion of Mr. Justice Reynato S. Puno. I am absolutely happy to join him in his statement that "[t]he sovereignty of our people is the primary postulate of the 1987 Constitution" and that the said Constitution is "more people-oriented," "borne [as it is] out of the 1986 people power EDSA revolution." I would even go further by saying that this Constitution is proGod (Preamble), pro-people (Article II, Sections 1, 3, 4, 5, 9, 15, 16; Article XI, Section 1, Article XII, Sections 1, 6; Article XIII, Sections 1, 11, 15, 16, 18; Article XVI, Sections 5(2), 6), pro-Filipino (Article XII, Sections 1, 2, 10, 11, 12, 14; Article XIV, Sections 1, 4(2), 13; Article XVI, Section 11), pro-poor (Article II, Sections 9, 10, 18, 21; Article XII, Sections 1, 2(3); Article XIII, Sections 1, 3, 4, 5, 6, 7, 9, 10, 11, 13), pro-life (Article II, Section 12), and pro-family (Article II, Section 12; Article XV). Nevertheless, I cannot be with him in carrying out the principle of sovereignty beyond what I perceive to be the reasonable constitutional parameters. The doctrine of people's sovereignty is founded on the principles of democracy and republicanism and refers exclusively to the sovereignty of the people of the Philippines. Section 1 of Article II is quite clear on this, thus:
Sec. 1. The Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them.

And the Preamble makes it clear when it solemnly opens it with a clause "We, the sovereign Filipino people . . ." Thus, this sovereignty is an attribute of the Filipino people as one people, one body. That sovereign power of the Filipino people cannot be fragmentized by looking at it as the supreme authority of the people of any of the political subdivisions to determine their own destiny; neither can we convert and treat every fragment as the whole. In such a case, this Court would provide the formula for the division and destruction of the State and render the Government ineffective and inutile. To illustrate the evil, we may consider the enforcement of laws or the pursuit of a national policy by the executive branch of the government, or the execution of a judgment by the courts. If these are opposed by the overwhelming majority of the people of a certain province, or even a municipality, it would necessarily follow that the law, national policy, or judgment must not be enforced, implemented, or executed in the said province or municipality. More concretely, if, for instance, the vast majority of the people of Batanes rise publicly and take up arms against the Government for the purpose of removing from the allegiance to the said Government or its laws, the territory of the Republic of the Philippines or any part thereof, or any body of land, naval, or other armed forces, or depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives, then those who did so -- and which are composed of the vast majority of the people of Batanes -- a political subdivision -- cannot be prosecuted for or be held guilty of rebellion in violation of Article 134 of the Revised Penal Code because of the doctrine of peoples' sovereignty. Indeed, the expansion of the doctrine of sovereignty by investing upon the people of a mere political subdivision that which the Constitution places in the entire Filipino people, may be disastrous to the Nation. So it is in this case if we follow the thesis in the concurring opinion. Thus, simply because Frivaldo had obtained a margin of 20,000 votes over his closest rival, Lee, i.e., a vast majority of the voters of Sorsogon had expressed their sovereign will for the former, then this Court must yield to that will and must, therefore, allow to be set aside, for Frivaldo, not just the laws on qualifications of candidates and elective officials and naturalization and reacquisition of Philippine citizenship, but even the final and binding decisions of this Court affecting him. This Court must be the first to uphold the Rule of Law. I vote then to DISMISS G.R. No. 120295 and GRANT G.R. No. 123755.

Separate Opinions PUNO, J., concurring: I concur with the path-breaking ponencia of Mr. Justice Panganiban which is pro-people and pierces the myopia of legalism. Upholding the sovereign will of the people which is

the be-all and the end-all of republicanism, it rests on a foundation that will endure time and its tempest. The sovereignty of our people is the primary postulate of the 1987 Constitution. For this reason, it appears as the first in our declaration of principles and state policies. Thus, section 1 of Article II of our fundamental law proclaims that "[t]he Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them." The same principle served as the bedrock of our 1973 and 1935 Constitutions. 1 It is one of the few principles whose truth has been cherished by the Americans as self-evident. Section 4, Article IV of the U.S. Constitution makes it a duty of the Federal government to guarantee to every state a "republican form of government." With understandable fervor, the American authorities imposed republicanism as the cornerstone of our 1935 Constitution then being crafted by its Filipino framers. 2 Borne out of the 1986 people power EDSA revolution, our 1987 Constitution is more people-oriented. Thus, section 4 of Article II provides as a state policy that the prime duty of the Government is "to serve and protect the people." Section 1, Article XI also provides that ". . . public officers . . . must at all times be accountable to the people . . ." Sections 15 and 1 of Article XIII define the role and rights of people's organizations. Section 5(2) of Article XVI mandates that "[t]he state shall strengthen the patriotic spirit and nationalist consciousness of the military, and respect for people's rights in the performance of their duty." And section 2 of Article XVII provides that "amendments to this Constitution may likewise be directly proposed by the people through initiative . . ." All these provisions and more are intended to breathe more life to the sovereignty of our people. To be sure, the sovereignty of our people is not a kabalistic principle whose dimensions are buried in mysticism. Its metes and bounds are familiar to the framers of our Constitutions. They knew that in its broadest sense, sovereignty is meant to be supreme, the jus summi imperu, the absolute right to govern. 3 Former Dean Vicente Sinco 4 states that an essential quality of sovereignty is legal omnipotence, viz.: "Legal theory establishes certain essential qualities inherent in the nature of sovereignty. The first is legal omnipotence. This means that the sovereign is legally omnipotent and absolute in relation to other legal institutions. It has the power to determine exclusively its legal competence. Its powers are original, not derivative. It is the sole judge of what it should do at any given time." 5 Citing Barker, 6 he adds that a more amplified definition of sovereignty is that of "a final power of final legal adjustment of all legal issues ." The U.S. Supreme Court expressed the same thought in the landmark case of Yick Wo v. Hopkins, 7 where it held that ". . . sovereignty itself is, of course, not subject to law , for it is the author and source of law; but in our system, while sovereign powers are delegated to the agencies of government, sovereignty itself remains with the people, by whom and for whom all government exists and acts." In our Constitution, the people established a representative democracy as distinguished from a pure democracy. Justice Isagani Cruz explains: 8

xxx xxx xxx A republic is a representative government, a government run by and for the people. It is not a pure democracy where the people govern themselves directly. The essence of republicanism is representation and renovation, the selection by the citizenry of a corps of public functionaries who derive their mandate from the people and act on their behalf, serving for a limited period only, after which they are replaced or retained, at the option of their principal. Obviously, a republican government is a responsible government whose officials hold and discharge their position as a public trust and shall, according to the Constitution, "at all times be accountable to the people" they are sworn to serve . The purpose of a republican government it is almost needless to state, is the promotion of the common welfare according to the will of the people themselves .

I appreciate the vigorous dissent of Mr. Justice Davide. I agree that sovereignty is indivisible but it need not always be exercised by the people together, all the time. 9 For this reason, the Constitution and our laws provide when the entire electorate or only some of them can elect those who make our laws and those who execute our laws. Thus, the entire electorate votes for our senators but only our district electorates vote for our congressmen, only our provincial electorates vote for the members of our provincial boards, only our city electorates vote for our city councilors, and only our municipal electorates vote for our councilors. Also, the entire electorate votes for our President and Vice-President but only our provincial electorates vote for our governors, only our city electorates vote for our mayors, and only our municipal electorates vote for our mayors. By defining and delimiting the classes of voters who can exercise the sovereignty of the people in a given election, it cannot be claimed that said sovereignty has been fragmented. It is my respectful submission that the issue in the case at bar is not whether the people of Sorsogon should be given the right to defy the law by allowing Frivaldo to sit as their governor. Rather, the issue is: whether the will of the voters of Sorsogon clearly choosing Frivaldo as governor ought to be given a decisive value considering the uncertainty of the law on when a candidate ought to satisfy the qualification of citizenship. The uncertainty of law and jurisprudence, both here and abroad, on this legal issue cannot be denied. In the United States, 10 there are two (2) principal schools of thought on the matter. One espouses the view that a candidate must possess the qualifications for office at the time of his election. The other ventures the view that the candidate should satisfy the qualifications at the time he assumes the powers of the office. I am unaware of any Philippine decision that has squarely resolved this difficult question of law. The ponencia of Mr. Justice Panganiban adhered to the second school of thought while Mr. Justice Davide dissents. I emphasize the honest-to-goodness difference in interpreting our law on the matter for this is vital to dispel the fear of Mr. Justice Davide that my opinion can bring about ill effects to the State. Mr. Justice Davide's fear is based on the assumption that Frivaldo continues to be disqualified and we cannot allow him to sit as governor without transgressing the law. I do not concede this assumption for as stressed above, courts have been sharply divided by this mind boggling issue. Given this schism, I do not see

how we can derogate on the sovereignty of the people by according more weight to the votes of the people of Sorsogon. Mr. Justice Davide warns that should the people of Batanes stage a rebellion, we cannot prosecute them "because of the doctrine of people's sovereignty." With due respect, the analogy is not appropriate. In his hypothetical case, rebellion is concededly a crime, a violation of Article 134 of the Revised Penal Code, an offense against the sovereignty of our people. In the case at bar, it cannot be held with certitude that the people of Sorsogon violated the law by voting for Frivaldo as governor . Frivaldo's name was in the list of candidates allowed by COMELEC to run for governor. At that time too, Frivaldo was taking all steps to establish his Filipino citizenship. And even our jurisprudence has not settled the issue when a candidate should possess the qualification of citizenship. Since the meaning of the law is arguable then and now, I cannot imagine how it will be disastrous for the State if we tilt the balance in the case at bar in favor of the people of Sorsogon. In sum, I respectfully submit that the sovereign will of our people should be resolutory of the case at bar which is one of its kind, unprecedented in our political history. For three (3) times, Frivaldo ran as governor of the province of Sorsogon. For two (2) times, he was disqualified on the ground of citizenship. The people of Sorsogon voted for him as their governor despite his disqualification. The people never waffled in their support for Frivaldo. In 1988, they gave him a winning margin of 27,000; in 1992, they gave him a winning spread of 57,000; in 1995, he posted a margin of 20,000. Clearly then, Frivaldo is the overwhelming choice of the people of Sorsogon. In election cases, we should strive to align the will of the legislature as expressed in its law with the will of the sovereign people as expressed in their ballots. For law to reign, it must respect the will of the people. For in the eloquent prose of Mr. Justice Laurel, ". . . an enfranchised citizen is a particle of popular sovereignty and is the ultimate source of established authority." 11 The choice of the governed on who shall be their governor merits the highest consideration by all agencies of government. In cases where the sovereignty of the people is at stake, we must not only be legally right but also politically correct. We cannot fail by making the people succeed. DAVIDE, JR., J., dissenting: After deliberating on the re-formulated issues and the conclusions reached by my distinguished colleague, Mr. Justice Artemio V. Panganiban, I find myself unable to join him. I I agree with petitioner Lee that Frivaldo's repatriation was void, but not on the ground that President Corazon C. Aquino's 27 March 1987 memorandum "effectively repealed" P.D. No. 725. In my view, the said memorandum only suspended the implementation of the latter decree by divesting the Special Committee on Naturalization of its authority to further act on grants of citizenship under LOI No. 270, as amended, P.D. No. 836, as

amended; P.D. No. 1379; and "any other related laws, orders, issuances and rules and regulations." A reading of the last paragraph of the memorandum can lead to no other conclusion, thus:
In view of the foregoing, you as Chairman and members of the Special Committee on Naturalization, are hereby directed to cease and desist from undertaking any and all proceedings within your functional area of responsibility, as defined in Letter of Instruction No. 270 dated April 11, 1975, as amended, Presidential Decree No. 836 dated December 3, 1975, as amended, and Presidential Decree No. 1379 dated May 17, 1978, relative to the grant of citizenship under the said laws, and any other related laws, orders, issuances and rules and regulations. (emphasis supplied)

It is self-evident that the underscored clause can only refer to those related to LOI No. 270, P.D. No. 836, and P.D. No. 1379. There is no doubt in my mind that P.D. No. 725 is one such "related law" as it involves the reacquisition of Philippine citizenship by repatriation and designates the Special Committee on Naturalization created under LOI No. 270 to receive and act on (i.e., approve or disapprove) applications under the said decree. The power of President Aquino to suspend these issuances by virtue of the 27 March 1987 memorandum is beyond question considering that under Section 6, Article XVIII of the 1987 Constitution, she exercised legislative power until the Congress established therein convened on the fourth Monday of July 1987. I disagree with the view expressed in the ponencia that the memorandum of 27 March 1987 was merely a declaration of "executive policy," and not an exercise of legislative power. LOI No. 270, P.D. No. 836, P.D. No. 1379 and "any other related laws," such as P.D. No. 725, were issued by President Ferdinand E. Marcos in the exercise of his legislative powers -- not executive power. These laws relate to the acquisition (by naturalization) and reacquisition (by repatriation) of Philippine citizenship, and in light of Sections 1(4) and 3, Article IV of the 1987 Constitution (naturalization and reacquisition of Philippine citizenship shall be in accordance with law), it is indubitable that these subjects are a matter of legislative prerogative. In the same vein, the creation of the Special Committee on Naturalization by LOI No. 270 and the conferment of the power to accept and act on applications under P.D. No. 725 are clearly legislative acts. Accordingly, the revocation of the cease and desist order and the reactivation or revival of the Committee can be done only by legislative fiat, i.e., by Congress, since the President had long lost his authority to exercise "legislative power." Considering that Congress has not seen it fit to do so, the President cannot, in the exercise of executive power, lift the cease and desist order nor reactivate/reconstitute/revive the Committee. A multo fortiori, the Committee cannot validly accept Frivaldo's application for repatriation and approve it. II Even assuming arguendo that Frivaldo's repatriation is valid, it did not "cure his lack of citizenship." I depart from the view in the ponencia that Section 39 of the Local Government Code of 1991 does not specify the time when the citizenship requirement must be met, and that being the case, then it suffices that citizenship be possessed

upon commencement of the term of the office involved; therefore, since Frivaldo "reassumed" his Philippine citizenship at 2:00 p.m. on 30 June 1995 and the term of office of Governor commenced at 12:00 noon of that day, he had, therefore, complied with the citizenship requirement. In the first place, Section 39 actually prescribes the qualifications of elective local officials and not those of an elected local official. These adjectives are not synonymous, as the ponencia seems to suggest. The first refers to the nature of the office, which requires the process of voting by the electorate involved; while the second refers to a victorious candidate for an elective office. The section unquestionably refers to elective -- not elected -- local officials. It falls under Title Two entitled ELECTIVE OFFICIALS; under Chapter 1 entitled Qualifications and Election; and paragraph (a) thereof begins with the phrase "An elective local official," while paragraphs (b) to (f) thereof speak of candidates. It reads as follows:
Sec. 39. Qualifications. -- (a) An elective local official must be a citizen of the Philippines; a registered voter in the barangay, municipality, city, or province or, in the case of a member of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan, the district where he intends to be elected; a resident therein for at least one (1) year immediately preceding the day of the election; and able to read and write Filipino or any other local language or dialect. (b) Candidates for the position of governor, vice governor or member of the sangguniang panlalawigan, or mayor, vice mayor or member of the sangguniang panlungsod of highly urbanized cities must be at least twenty-three (23) years of age on election day. (c) Candidates for the position of mayor or vice mayor of independent component cities, component cities, or municipalities must be at least twenty-one (21) years of age on election day. (d) Candidates for the position of member of the sangguniang panlungsod or sangguniang bayan must be at least eighteen (18) years of age on election day. (e) Candidates for the position of punong barangay or member of the sangguniang barangay must be at least eighteen (18) years of age on election day. (f) Candidates for the sangguniang kabataan must be at least fifteen (15) years of age but not more than twenty-one (21) years of age on election day (emphasis supplied)

It is thus obvious that Section 39 refers to no other than the qualifications of candidates for elective local offices and their election. Hence, in no way may the section be construed to mean that possession of qualifications should be reckoned from the commencement of the term of office of the elected candidate. For another, it is not at all true that Section 39 does not specify the time when the citizenship requirement must be possessed. I submit that the requirement must be satisfied, or that Philippine citizenship must be possessed, not merely at the commencement of the term, but at an earlier time, the latest being election day itself. Section 39 is not at all ambiguous nor uncertain that it meant this to be, as one basic

qualification of an elective local official is that he be "A REGISTERED VOTER IN THE BARANGAY, MUNICIPALITY, CITY OR PROVINCE . . . WHERE HE INTENDS TO VOTE." This simply means that he possesses all the qualifications to exercise the right of suffrage. The fundamental qualification for the exercise of this sovereign right is the possession of Philippine citizenship. No less than the Constitution makes it the first qualification, as Section 1, Article V thereof provides:
Sec. 1. Suffrage may be exercised by all citizens of the Philippines not otherwise disqualified by law, who are at least eighteen years of age, and who shall have resided in the Philippines for at least one year and in the place wherein they propose to vote for at least six months immediately preceding the election. . . . (emphasis supplied)

And Section 117 of the Omnibus Election Code of the Philippines (B.P. Blg. 881) expressly provides for the qualifications of a voter. Thus:
Sec. 117 Qualifications of a voter. -- Every citizen of the Philippines, not otherwise disqualified by law, eighteen years of age or over, who shall have resided in the Philippines for one year and in the city or municipality wherein he proposes to vote for at least six months immediately preceding the election, may be a registered voter. (emphasis supplied)

It is undisputed that this Court twice voided Frivaldo's election as Governor in the 1988 and 1992 elections on the ground that for lack of Philippine citizenship -- he being a naturalized citizen of the United States of America -- he was DISQUALIFIED to be elected as such and to serve the position (Frivaldo vs. Commission on Elections, 174 SCRA 245 [1989]; Republic of the Philippines vs. De la Rosa, 232 SCRA 785 [1994]). This disqualification inexorably nullified Frivaldo's registration as a voter and declared it void ab initio. Our judgments therein were self-executory and no further act, e.g., a COMELEC order to cancel his registration as a voter or the physical destruction of his voter's certificate, was necessary for the ineffectivity. Thus, he was never considered a registered voter for the elections of May 1992, and May 1995, as there is no showing that Frivaldo registered anew as a voter for the latter elections. Even if he did -- in obvious defiance of his decreed disqualification -- this did not make him a Filipino citizen, hence it was equally void ab initio. That he filed his certificate of candidacy for the 1995 elections and was even allowed to vote therein were of no moment. Neither act made him a Filipino citizen nor nullified the judgments of this Court. On the contrary, said acts made a mockery of our judgments. For the Court now to validate Frivaldo's registration as a voter despite the judgments of disqualification is to modify the said judgments by making their effectivity and enforceability dependent on a COMELEC order cancelling his registration as a voter, or on the physical destruction of his certificate of registration as a voter which, of course, was never our intention. Moreover, to sanction Frivaldo's registration as a voter would be to sacrifice substance in favor of form (the piece of paper that is the book of voters or list of voters or voter's ID), and abet the COMELEC's incompetence in failing to cancel Frivaldo's registration and allowing him to vote. The second reason in the ponencia as to why the citizenship disqualification should be reckoned not from the date of the election nor the filing of the certificate of candidacy,

but from the date of proclamation, is that the only available remedy to question the ineligibility (or disloyalty) of a candidate is a petition for quo warranto which, under Section 253 of the Omnibus Election Code, may be filed only within ten days from proclamation and not earlier. I beg to differ. Clearly, quo warranto is not the sole remedy available to question a candidate's ineligibility for public office. Section 78 of the Omnibus Election Code allows the filing of a petition to deny due course to or cancel the certificate of candidacy on the ground that any material representation contained therein, as required by Section 74, is false. Section 74, in turn, requires that the person filing the certificate of candidacy must state, inter alia, that he is eligible for the office, which means that he has all the qualifications (including, of course, fulfilling the citizenship requirement) and none of the disqualifications as provided by law. The petition under Section 78 may be filed at any time not later than 25 days from the filing of the certificate of candidacy . The section reads in full as follows:
Sec. 78. Petition to deny due course to or cancel a certificate of candidacy . -- A verified petition seeking to deny due course or to cancel a certificate of candidacy may be filed by any person exclusively on the ground that any material representation contained therein as required under Section 74 hereof is false. The petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days before the election.

This remedy was recognized in Loong vs. Commission on Elections (216 SCRA 760, 768 [1992]), where this Court held:
Thus, if a person qualified to file a petition to disqualify a certain candidate fails to file the petition within the 25-day period Section 78 of the Code for whatever reasons, the election laws do not leave him completely helpless as he has another chance to raise the disqualification of the candidate by filing a petition for quo warranto within ten (10) days from the proclamation of the results of the election, as provided under Section 253 of the Code. Section 1, Rule 21 of the Comelec Rules of Procedure similarly provides that any voter contesting the election of any regional, provincial or city official on the ground of ineligibility or of disloyalty to the Republic of the Philippines may file a petition for quo warranto with the Electoral Contest Adjudication Department. The petition may be filed within ten (10) days from the date the respondent is proclaimed (Section 2).

Likewise, Rule 25 of the Revised COMELEC Rules of Procedure allows the filing of a petition for disqualification on the ground of failure to possess all the qualifications of a candidate as provided by the Constitution or by existing laws, "any day after the last day for filing of certificates of candidacy but not later than the date of proclamation." Sections 1 and 3 thereof provide:
Rule 25 -- Disqualification of Candidates Sec. 1. Grounds for Disqualification. Any candidate who does not possess all the qualifications of a candidate as provided for by the Constitution or by existing law or who

commits any act declared by law to be grounds for disqualification may be disqualified from continuing as a candidate. xxx xxx xxx Sec. 3. Period to File Petition. The petition shall be filed any day after the last day for filing of certificates of candidacy but not later than the date of proclamation .

While the validity of this rule insofar as it concerns petitions for disqualification on the ground of lack of all qualifications may be doubtful, its invalidity is not in issue here. In this connection, it would seem appropriate to take up the last issue grappled within the ponencia, viz., is Section 78 of the Omnibus Election Code mandatory? The answer is provided in Loong.
We also do not find merit in the contention of respondent Commission that in the light of the provisions of Sections 6 and 7 of Rep. Act No. 6646, a petition to deny due course to or cancel a certificate of candidacy may be filed even beyond the 25-day period prescribed by Section 78 of the Code, as long as it is filed within a reasonable time from the discovery of the ineligibility. Sections 6 and 7 of Rep. Act No. 6646 are here re-quoted: Sec. 6. Effect of Disqualification case. Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be counted. If for any reason a candidate is not declared by final judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such election, the Court or Commission shall continue with the trial and hearing of the action, inquiry or protest and, upon motion of the complainant or any intervenor, may during the pendency thereof order the suspension of the proclamation of such candidate whenever the evidence of his guilt is strong. Sec. 7. Petition to Deny Due Course To or Cancel a Certificate of Candidacy. The procedure hereinabove provided shall apply to petitions to deny due course to or cancel a certificate of candidacy as provided in Section 78 of Batas Pambansa Blg. 881. It will be noted that nothing in Sections 6 or 7 modifies or alters the 25- day period prescribed by Section 78 of the Code for filing the appropriate action to cancel a certificate of candidacy on account of any false representation made therein. On the contrary, said Section 7 affirms and reiterates Section 78 of the Code. We note that Section 6 refers only to the effects of a disqualification case which may be based on grounds other than that provided under Section 78 of the Code. But Section 7 of Rep. Act No. 6646 also makes the effects referred to in Section 6 applicable to disqualification cases filed under Section 78 of the Code. Nowhere in Sections 6 and 7 of Rep. Act No. 6646 is mention made of the period within which these disqualification cases may be filed. This is because there are provisions in the Code which supply the

periods within which a petition relating to disqualification of candidates must be filed, such as Section 78, already discussed, and Section 253 on petitions for quo warranto.

I then disagree with the asseveration in the ponencia that Section 78 is merely directory because Section 6 of R.A. No. 6646 authorizes the COMELEC to try and decide petitions for disqualification even after elections. I submit that Section 6 refers to disqualifications under Sections 12 and 68 of the Omnibus Election Code and consequently modifies Section 72 thereof. As such, the proper court or the COMELEC are granted the authority to continue hearing the case after the election, and during the pendency of the case, suspend the proclamation of the victorious candidate, if the evidence against him is strong. Sections 12, 68, and 72 of the Code provide:
Sec. 12. Disqualifications. Any person who has been declared by competent authority insane or incompetent, or has been sentenced by final judgment for subversion, insurrection, rebellion or for any offense for which he has been sentenced to a penalty of more than eighteen months or for a crime involving moral turpitude, shall be disqualified to be a candidate and to hold any office, unless he has been given plenary pardon or granted amnesty. The disqualifications to be a candidate herein provided shall be deemed removed upon declaration by competent authority that said insanity or incompetence had been removed or after the expiration of a period of five years from his service of sentence, unless within the same period he again becomes disqualified. xxx xxx xxx Sec. 68. Disqualifications. Any candidate who, in an action or protest in which he is a party is declared by final decision of a competent court guilty of, or found by the Commission of having (a) given money or other material consideration to influence, induce or corrupt the voters or public officials performing electoral functions; (b) committed acts of terrorism to enhance his candidacy; (c) spent in his election campaign an amount in excess of that allowed by this Code; (d) solicited, received or made any contribution prohibited under Sections 89, 95, 96, 97 and 104; or (e) violated any of Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-paragraph 6, shall be disqualified from continuing as a candidate, or if he has been elected, from holding the office. Any person who is a permanent resident of or an immigrant to a foreign country shall not be qualified to run for any elective office under this Code, unless said person has waived his status as permanent resident or immigrant of a foreign country in accordance with the residence requirement provided for in the election laws. (Sec. 25, 1971 EC) Sec. 72. Effects of disqualification cases and priority. The Commission and the courts shall give priority to cases of disqualification by reason of violation of this Act to the end that a final decision shall be rendered not later than seven days before the election in which the disqualification is sought. Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be counted. Nevertheless, if for any reason, a candidate is not declared by final judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such election, his violation of the provisions of the preceding sections shall not prevent his proclamation and assumption to office.

III Still assuming that the repatriation is valid, I am not persuaded by the arguments in support of the thesis that Frivaldo's repatriation may be given retroactive effect, as such goes against the spirit and letter of P.D. No. 725. The spirit adheres to the principle that acquisition or re-acquisition of Philippine citizenship is not a right, but a mere privilege. Before the advent of P.D. No. 725, only the following could apply for repatriation: (a) Army, Navy, or Air Corps deserters; and (b) a woman who lost her citizenship by reason of her marriage to an alien after the death of her spouse (Section 2[2], C.A. No. 63). P.D. NO. 725 expanded this to include Filipino women who lost their Philippine citizenship by marriage to aliens even before the death of their alien husbands, or the termination of their marital status and to natural-born Filipino citizens who lost their Philippine citizenship but subsequently desired to reacquire the latter. Turning now to the letter of the law, P.D. No. 725 expressly provides that repatriation takes effect only after taking the oath of allegiance to the Republic of the Philippines, thus:
. . . may reacquire Philippine citizenship . . . by applying with the Special Committee on Naturalization created by Letter of Instruction No. 270, and, if their applications are approved, taking the necessary oath of allegiance to the Republic of the Philippines , AFTER WHICH THEY SHALL BE DEEMED TO HAVE REACQUIRED PHILIPPINE CITIZENSHIP. (emphasis and capitalization supplied)

Clearly then, the steps to reacquire Philippine citizenship by repatriation under the decree are: (1) filing the application; (2) action by the committee; and (3) taking of the oath of allegiance if the application is approved. It is only UPON TAKING THE OATH OF ALLEGIANCE that the applicant is deemed ipso jure to have reacquired Philippine citizenship. If the decree had intended the oath taking to retroact to the date of the filing of the application, then it should not have explicitly provided otherwise. This theory in the ponencia likewise dilutes this Court's pronouncement in the first Frivaldo case that what reacquisition of Filipino citizenship requires is an act "formally rejecting [the] adopted state and reaffirming . . . allegiance to the Philippines." That act meant nothing less than taking of the oath of allegiance to the Republic of the Philippines. If we now take this revision of doctrine to its logical end, then it would also mean that if Frivaldo had chosen and reacquired Philippine citizenship by naturalization or through Congressional action, such would retroact to the filing of the petition for naturalization or the bill granting him Philippine citizenship. This is a proposition which both the first and second Frivaldo cases soundly rejected. The other reason adduced in the ponencia in support of the proposition that P.D. No. 725 can be given retroactive effect is its alleged curative or remedial nature. Again, I disagree. In the first place, by no stretch of legal hermeneutics may P.D. No. 725 be characterized as a curative or remedial statute:

Curative or remedial statutes are healing acts. They are remedial by curing defects and adding to the means of enforcing existing obligations. The rule in regard to curative statutes is that if the thing omitted or failed to be done, and which constitutes the defect sought to be removed or made harmless, is something the legislature might have dispensed with by a previous statute, it may do so by a subsequent one. Curative statutes are intended to supply defects, abridge superfluities in existing laws, and curb certain evils. They are intended to enable a person to carry into effect that which they have designed and intended, but has failed of expected legal consequence by reason of some statutory disability or irregularity in their own action. They make valid that which, before the enactment of the statute, was invalid. (RUBEN E. AGPALO, Statutory Construction, Second ed. [1990], 270-271, citations omitted).

P.D. No. 725 provides for the reacquisition of Philippine citizenship lost through the marriage of a Filipina to an alien and through naturalization in a foreign country of natural-born Filipino citizens. It involves then the substantive, nay primordial, right of citizenship. To those for whom it is intended, it means, in reality, the acquisition of " a new right," as the ponencia cannot but concede. Therefore, it may not be said to merely remedy or cure a defect considering that one who has lost Philippine citizenship does not have the right to reacquire it. As earlier stated, the Constitution provides that citizenship, once lost, may only be reacquired in the manner provided by law. Moreover, it has also been observed that:
The idea is implicit from many of the cases that remedial statutes are statutes relating to procedure and not substantive rights. (Sutherland, Statutory Construction, Vol. 3, Third ed. [1943], 5704 at 74, citations omitted).

If we grant for the sake of argument, however, that P.D. No. 725 is curative or remedial statute, it would be an inexcusable error to give it a retroactive effect since it explicitly provides the date of its effectivity. Thus:
This Decree shall take effect immediately. Done in the city of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred and seventy five.

Nevertheless, if the retroactivity is to relate only to the reacquisition of Philippine citizenship, then nothing therein supports such theory, for as the decree itself unequivocally provides, it is only after taking the oath of allegiance to the Republic of the Philippines that the applicant is DEEMED TO HAVE REACQUIRED PHILIPPINE CITIZENSHIP. IV Assuming yet again, for the sake of argument, that taking the oath of allegiance retroacted to the date of Frivaldo's application for repatriation, the same could not be said insofar as it concerned the United States of America, of which he was a citizen. For under the laws of the United States of America, Frivaldo remained an American national until he renounced his citizenship and allegiance thereto at 2:00 p.m. on 30 June 1995,

when he took his oath of allegiance to the Republic of the Philippines. Section 401 of the Nationality Act of 1940 of the United States of America provides that a person who is a national of the United States of America, whether by birth or naturalization, loses his nationality by, inter alia, "(b) Taking an oath or making an affirmation or other formal declaration of allegiance to a foreign state" (SIDNEY KANSAS, U.S. Immigration Exclusion and Deportation and Citizenship of the United States of America, Third ed., [1948] 341-342). It follows then that on election day and until the hour of the commencement of the term for which he was elected - noon of 30 June 1995 as per Section 43 of the Local Government Code - Frivaldo possessed dual citizenship, viz., (a) as an American citizen; and (b) as a Filipino citizen through the adoption of the theory that the effects of his taking the oath of allegiance were retrospective. Hence, he was disqualified to run for Governor for yet another reason: possession of dual citizenship, in accordance with Section 40 (d) of the Local Government Code. V The assertion in the ponencia that Frivaldo may be considered STATELESS on the basis of his claim that he "had long renounced and had long abandoned his American citizenship - long before May 8, 1985" - is untenable, for the following reasons: first, it is based on Frivaldo's unproven, self-serving allegation; second, informal renunciation or abandonment is not a ground to lose American citizenship; and third, simply put, never did the status of a STATELESS person attach to Frivaldo. Statelessness may be either de jure, which is the status of individuals stripped of their nationality by their former government without having an opportunity to acquire another; or de facto, which is the status of individuals possessed of a nationality whose country does not give them protection outside their own country, and who are commonly, albeit imprecisely, referred to as refugees (JORGE R. COQUIA, et al., Conflict of Laws Cases, Materials and Comments, 1995 ed., 290). Specifically, under Chapter 1, Article 1 of the United Nations Convention Regarding the Status of Stateless Persons (Philippine Treaty Series, Compiled and Annotated by Haydee B. Yorac, vol. III, 363), a stateless person is defined as "a person who is not considered as a national by any State under the operation of its law." However, it has not been shown that the United States of America ever ceased to consider Frivaldo its national at any time before he took his oath of allegiance to the Republic of the Philippines on 30 June 1995. VI Finally, I find it in order to also express my view on the concurring opinion of Mr. Justice Reynato S. Puno. I am absolutely happy to join him in his statement that "[t]he sovereignty of our people is the primary postulate of the 1987 Constitution" and that the said Constitution is "more people-oriented," "borne [as it is] out of the 1986 people power EDSA revolution." I would even go further by saying that this Constitution is proGod (Preamble), pro-people (Article II, Sections 1, 3, 4, 5, 9, 15, 16; Article XI, Section

1, Article XII, Sections 1, 6; Article XIII, Sections 1, 11, 15, 16, 18; Article XVI, Sections 5(2), 6), pro-Filipino (Article XII, Sections 1, 2, 10, 11, 12, 14; Article XIV, Sections 1, 4(2), 13; Article XVI, Section 11), pro-poor (Article II, Sections 9, 10, 18, 21; Article XII, Sections 1, 2(3); Article XIII, Sections 1, 3, 4, 5, 6, 7, 9, 10, 11, 13), pro-life (Article II, Section 12), and pro-family (Article II, Section 12; Article XV). Nevertheless, I cannot be with him in carrying out the principle of sovereignty beyond what I perceive to be the reasonable constitutional parameters. The doctrine of people's sovereignty is founded on the principles of democracy and republicanism and refers exclusively to the sovereignty of the people of the Philippines. Section 1 of Article II is quite clear on this, thus:
Sec. 1. The Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them.

And the Preamble makes it clear when it solemnly opens it with a clause "We, the sovereign Filipino people . . ." Thus, this sovereignty is an attribute of the Filipino people as one people, one body. That sovereign power of the Filipino people cannot be fragmentized by looking at it as the supreme authority of the people of any of the political subdivisions to determine their own destiny; neither can we convert and treat every fragment as the whole. In such a case, this Court would provide the formula for the division and destruction of the State and render the Government ineffective and inutile. To illustrate the evil, we may consider the enforcement of laws or the pursuit of a national policy by the executive branch of the government, or the execution of a judgment by the courts. If these are opposed by the overwhelming majority of the people of a certain province, or even a municipality, it would necessarily follow that the law, national policy, or judgment must not be enforced, implemented, or executed in the said province or municipality. More concretely, if, for instance, the vast majority of the people of Batanes rise publicly and take up arms against the Government for the purpose of removing from the allegiance to the said Government or its laws, the territory of the Republic of the Philippines or any part thereof, or any body of land, naval, or other armed forces, or depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives, then those who did so -- and which are composed of the vast majority of the people of Batanes -- a political subdivision -- cannot be prosecuted for or be held guilty of rebellion in violation of Article 134 of the Revised Penal Code because of the doctrine of peoples' sovereignty. Indeed, the expansion of the doctrine of sovereignty by investing upon the people of a mere political subdivision that which the Constitution places in the entire Filipino people, may be disastrous to the Nation. So it is in this case if we follow the thesis in the concurring opinion. Thus, simply because Frivaldo had obtained a margin of 20,000 votes over his closest rival, Lee, i.e., a vast majority of the voters of Sorsogon had expressed their sovereign will for the former, then this Court must yield to that will and must, therefore, allow to be set aside, for Frivaldo, not just the laws on qualifications of candidates and elective officials and

naturalization and reacquisition of Philippine citizenship, but even the final and binding decisions of this Court affecting him. This Court must be the first to uphold the Rule of Law. I vote then to DISMISS G.R. No. 120295 and GRANT G.R. No. 123755.
1 Composed of Pres. CoFootnotesmm. Regalado E. Maambong, ponente; Comm. Graduacion A.R. Claravall, concurring, and Comm. Julio F. Desamito, dissenting. 2 In SPC No. 95-317, entitled Juan G. Frivaldo, petitioner, vs. Raul R. Lee, respondent; rollo, pp. 110129. 3 Signed by Chairman Bernardo P. Pardo, Comms. Regalado E. Maambong, Remedios A. SalazarFernando, Manolo B. Gorospe and Teresita Dy-Liaco Flores. Chairman Pardo certified that "Commissioner Julio F. Desamito was on official travel at the time of the deliberation and resolution of this case. However, the Commission has reserved to Comm. Desamito the right to submit a dissenting opinion." Rollo, pp. 159-171. 4 Rollo, pp. 46-49. 5 Rollo, pp. 50-55. The Second Division was composed of Pres. Comm. Remedios A. Salazar-Fernando, ponente; Comm. Teresita Dy-Liaco Flores, concurring, and Comm. Manolo B. Gorospe ("on official business"). 6 Frivaldo was naturalized as an American citizen on January 20, 1983. In G.R. No. 87193, Frivaldo vs. Commission on Elections, 174 SCRA 245 (June 23, 1989), the Supreme Court, by reason of such naturalization, declared Frivaldo "not a citizen of the Philippines and therefore DISQUALIFIED from serving as Governor of the Province of Sorsogon." On February 28, 1992, the Regional Trial Court of Manila granted the petition for naturalization of Frivaldo. However, the Supreme Court in G.R. No. 104654, Republic of the Philippines vs. De la Rosa, et al., 232 SCRA 785 (June 6, 1994), overturned this grant, and Frivaldo was "declared not a citizen of the Philippines" and ordered to vacate his office. On the basis of this latter Supreme Court ruling, the Comelec disqualified Frivaldo in SPA No. 95-028. 7 Signed by Chairman Bernardo P. Pardo and the six incumbent commissioners, namely, Regalado E. Maambong, Remedios A. Salazar-Fernando, Manolo B. Gorospe, Graduacion A. Reyes-Claravall, Julio F. Desamito and Teresita Dy-Liaco Flores; rollo, pp. 56-57. 8 Rollo, p. 60. 9 Rollo, pp. 61-67. 10 Rollo, pp. 86-87. The Comelec considered the votes cast for Frivaldo as "stray votes", and thus Lee was held as having garnered the "highest number of votes." 11 Rollo, pp. 88-97. This is the forerunner of the present case. 12 211 SCRA 297 (July 3, 1992) and 176 SCRA 1 (August 1, 1989). 13 Rollo, pp. 110-128. 14 Rollo, pp. 159-170.

15 Rollo, pp. 16-17; petition, pp. 14-15. 16 Rollo, pp. 10-15. This is the same resolution referred to in footnote no. 5. 17 Rollo, pp. 16-17. This is the same resolution referred to in footnote no. 7. 18 Rollo, pp. 18-21. This is signed also by the Chairman and the six other Comelec Commissioners. 19 Republic Act No. 7160. 20 See footnote no. 6, supra. 21 In debunking Frivaldo's claim of citizenship, this Court in G.R. No. 87193, supra, p. 254, observed that "(i)f he (Frivaldo) really wanted to disavow his American citizenship and reacquire Philippine citizenship, petitioner should have done so in accordance with the laws of our country. Under C.A. No. 63 as amended by C.A. No. 473 and P.D. 725, Philippine citizenship may be reacquired by direct act of Congress, by naturalization, or by repatriation." 22 Supra, p. 794. 23 Petition, p. 27; rollo, p. 29. 24 The full text of said memorandum reads as follows: MEMORANDUM TO : The Solicitor General The Undersecretary of Foreign Affairs The Director-General National Intelligence Coordinating Agency The previous administration's practice of granting citizenship by Presidential Decree or any other executive issuance, and the derivative administrative authority thereof, poses a serious and contentious issue of policy which the present government, in the exercise of prudence and sound discretion, should best leave to the judgment of the first Congress under the 1987 Constitution. In view of the foregoing, you as Chairman and members of the Special Committee on Naturalization, are hereby directed to cease and desist from undertaking any and all proceedings within your functional area of responsibility, as defined in Letter of Instructions No. 270 dated April 11, 1975, as amended, Presidential Decree No. 836 dated December 3, 1975, as amended, and Presidential Decree No. 1379 dated May 17, 1978, relative to the grant of citizenship under the said laws, and any other related laws, orders, issuances and rules and regulations. (Sgd.) Corazon C. Aquino Manila, March 27, 1987. 25 Art. 7, Civil Code of the Philippines.

26 Cf. Ty, et al. vs. Trampe, et al., G.R. No. 117577 (December 1, 1995). 27 Petition, p. 28; rollo, p. 30. 28 The aforesaid Manifestation reads as follows: MANIFESTATION The Solicitor General, as Chairman of the Special Committee on Naturalization, hereby manifests that the following persons have been repatriated by virtue of Presidential Decree No. 725, since June 8, 1995: 1. Juan Gallanosa Frivaldo R-000900 2. Manuel Reyes Sanchez 901 3. Ma. Nelly Dessalla Ty 902 4. Terry Herrera and Antonio Ching 903 5. Roberto Salas Benedicto 904 6. Winthrop Santos Liwag 905 7. Samuel M. Buyco 906 8. Joselito Holganza Ruiz 907 9. Samuel Villanueva 908 10. Juan Leonardo Collas, Jr. 909 11. Felicilda Otilla Sacnanas-Chua 910 29 The text of P.D. 725 is reproduced below: PRESIDENTIAL DECREE No. 725 PROVIDING FOR REPATRIATION OF FILIPINO WOMEN WHO HAD LOST THEIR PHILIPPINE CITIZENSHIP BY MARRIAGE TO ALIENS AND OF NATURAL BORN FILIPINOS. WHEREAS, there are many Filipino women who had lost their Philippine citizenship by marriage to aliens; WHEREAS, while the new Constitution allows a Filipino woman who marries an alien to retain her Philippine citizenship unless by her act or omission, she is deemed under the law to have renounced her Philippine citizenship, such provision of the new Constitution does not apply to Filipino women who had married aliens before said constitution took effect;

WHEREAS, the existing law (C.A. No. 63, as amended) allows the repatriation of Filipino women who lost their citizenship by reason of their marriage to aliens only after the death of their husbands or the termination of their marital status; and WHEREAS, there are natural born Filipinos who have lost their Philippine citizenship but now desire to reacquire Philippine citizenship; Now, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby decree and order that: (1) Filipino women who lost their Philippine citizenship by marriage to aliens; and (3) natural born Filipinos who have lost their Philippine citizenship may reacquire Philippine citizenship through repatriation by applying with the Special Committee on Naturalization created by Letter of Instructions No. 270, and, if their applications are approved, taking the necessary oath of allegiance to the Republic of the Philippines, after which they shall be deemed to have reacquired Philippine citizenship. The Commission on Immigration and Deportation shall thereupon cancel their certificate of registration. The aforesaid Special Committee is hereby authorized to promulgate rules and regulations and prescribe the appropriate forms and the required fees for the effective implementation of this Decree. This Decree shall take effect immediately. Done in the City of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred and seventyfive. 30 See footnote no. 6, supra. 31 Cf. Labo, Jr. vs. Comelec, 211 SCRA 297 (July 3, 1992). 32 The term of office of all local elective officials elected after the effectivity of this Code shall be three (3) years, starting from noon of June 30, 1992 or such date as may be provided for by law, . . ." Sec. 43, Local Government Code. 33 96 Phil. 447, 453 (1955). 34 The following are excerpts from the transcript of stenographic notes of the oral argument held on March 19, 1996: JUSTICE PANGANIBAN: Mr. Counsel, it is your position then that the candidate should be a citizen at the time of proclamation? ATTY. BRILLANTES: Yes, Your Honor, it is required that he must be a citizen at the time of proclamation and not only that, at the time that he assumes the office he must have the continuing qualification as a citizen. JUSTICE PANGANIBAN: Should that not be reckoned from the time of filing of certificate of candidacy or at least the day of the election? ATTY. BRILLANTES: Yes, Your Honor, there are positions taken that it should be reckoned from the date of certificate of candidacy as in the case of qualification for Batasang Pambansa before under B.P. 53 - it says that for purposes of residence it must be reckoned . . . from the time of the filing of the certificate, for purposes of age, from the time of the date of the election. But when we go over all the provisions of law under current laws, Your Honor, there is no qualification requirement insofar as citizenship is

concern(ed) as to when, as to when you should be a citizen of the Philippines and we say that if there is no provision under any existing law which requires that you have to be a citizen of the Philippines on the date of the filing or on the date of election then it has to be equitably interpreted to mean that if you are already qualified at the time that the office is supposed to be assumed then you should be allowed to assume the office. JUSTICE PANGANIBAN: Is it not also true that under the Local Autonomy Code the candidate should also be a registered voter and to be a registered voter one must be a citizen? ATTY. BRILLANTES: Yes, Your Honor, in fact, Mr. Frivaldo has always been a registered voter of Sorsogon. He has voted in 1987, 1988, 1992, then he voted again in 1995. In fact, his eligibility as a voter was questioned but the Court dismissed ( sic) his eligibility as a voter and he was allowed to vote as in fact, he voted in all the previous elections including on May 8, 1995. JUSTICE PANGANIBAN: But the fact that he voted does not make him a citizen. The fact is, he was declared not a citizen by this Court twice. ATTY. BRILLANTES: That is true, Your Honor, we admit that he has been twice declared not citizen and we admit the ruling of the Supreme Court is correct but the fact is, Your Honor, the matter of his eligibility to vote as being a registered voter was likewise questioned before the judiciary. There was a ruling by the Municipal Court, there was a ruling by the Regional Trial Court and he was sustained as a valid voter, so he voted. JUSTICE PANGANIBAN: I raised this question in connection with your contention that citizenship should be determined as of the time of proclamation and not as of the time of the election or at the time of the filing of the certificate of candidacy. ATTY. BRILLANTES: That is true, Your Honor. JUSTICE PANGANIBAN: And is it your contention that under the law, particularly the Local Autonomy Code, the law does not specify when citizenship should be possessed by the candidate, is that not correct? ATTY. BRILLANTES: That is right, Your Honor, there is no express provision. JUSTICE PANGANIBAN: I am also asking you that under the Local Autonomy Code the candidate for governor or for other local positions should be a voter and to be a voter one must be a citizen? ATTY. BRILLANTES: That is right, Your Honor, but the fact of voting is not an issue here because he was allowed to vote and he did in fact vote and in fact, he was a registered voter. (TSN, March 19, 1996.) 35 Section 117, Batas Pambansa Blg. 881, otherwise known as "The Omnibus Election Code of the Philippines", as amended, provides for the various qualifications of voters, one of which is Filipino citizenship. 36 Comment, p. 11; rollo, p. 259. 37 See footnote no. 33.

38 Section 253 reads as follows: Sec. 253. Petition for quo warranto. -- Any voter contesting the election of any member of the Congress, regional, provincial, or city officer on the ground of ineligibility or of disloyalty to the Republic of the Philippines shall file a sworn petition for quo warranto with the Commission within ten days after the proclamation of the results of the election. (Art. XIV, Sec. 60, BP 697; Art. XVIII, Sec. 189, par. 2, 1978 EC). Any voter contesting the election of any municipal or barangay officer on the ground of ineligibility or of disloyalty to the Republic of the Philippines shall file a sworn petition for quo warranto with the regional trial court or metropolitan or municipal trial court, respectively, within ten days after the proclamation of the results of the election. (Art. XVIII, Sec. 189, par. 2, 1978 EC). 39 Art. 4, New Civil Code. See also Gallardo vs. Borromeo, 161 SCRA 500 (May 25, 1988), and Nilo vs. Court of Appeals, 128 SCRA 519 (April 2, 1984). 40 Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines , Vol. I, 1990 ed., p. 23 states: Exceptions to Rule. -- Statutes can be given retroactive effect in the following cases: (1) when the law itself so expressly provides, (2) in case of remedial statutes, (3) in case of curative statutes, (4) in case of laws interpreting others, and (5) in case of laws creating new rights. 41 Id., p. 25. 42 Agpalo, Statutory Construction, 1990 ed., pp. 270-271. 43 73 Am Jur 2d, Sec. 354, p. 489, cited in Castro vs. Sagales, 94 Phil. 208, 210 (1953). 44 Memorandum, p. 9. 45 73 Am Jur 2d, Sec. 351, p. 488. 46 73 Am Jur 2d, Sec. 354, p. 490; emphasis supplied. 47 Art. 10, Civil Code of the Philippines. 48 Based on the "Corrected Compliance" dated May 16, 1996 filed by the Solicitor General, it appears that, excluding the case of Frivaldo, the longest interval between date of filing of an application for repatriation and its approval was three months and ten days; the swiftest action was a same-day approval. 49 Sec. 40. Disqualifications. -- The following persons are disqualified from running for any elective local position: xxx xxx xxx (d) Those with dual citizenship;" 50 p. 11; rollo, p. 259. 51 Resolution, p. 12; rollo, p. 121.

52 Cf. Navarro vs. Commission on Elections, 228 SCRA 596 (December 17, 1993); Arao vs. Commission on Elections, 210 SCRA 290 (June 23, 1992). 53 The dispositive portion of said Resolution reads: WHEREFORE, this Division resolves to GRANT the petition and declares that respondent is DISQUALIFIED to run for the office of Provincial Governor of Sorsogon on the ground that he is not a citizen of the Philippines. Accordingly respondent's certificate of candidacy is cancelled. 54 Petition, p. 19; rollo, p. 21. 55 Resolution promulgated on December 19, 1995, p. 7; rollo, p. 116. 56 42 SCRA 561, 565 (December 20, 1971), citing Moy Ya Lim Yao vs. Commissioner of Immigration, L21289, October 4, 1971. 57 Art. IX, Sec. 2. 58 SPC No. 95-317 is entitled "Annulment of Proclamation" and contains the following prayer: WHEREFORE, it is most respectfully prayed of this Honorable Commission that after due notice and hearing an Oder (sic) /Resolution/Decision be issued as follows: a) Annulling/setting aside the 30 June 1995 proclamation of respondent as the duly election ( sic), Governor of Sorsogon for being contrary to law; b) Ordering the proclamation of the petitioner as duly elected governor of Sorsogon; xxx xxx xxx 59 229 SCRA 666, 674 (February 4, 1994). 60 211 SCRA 297, 309 (July 3, 1992). 61 G.R. No. 120265, September 18, 1995. 62 Supra, at p. 312. 63 See footnotes 2 and 3. 64 174 SCRA 245, 254 (June 23, 1959). 65 Salonga and Yap, Public International Law, 1966 ed., p. 239. 66 In Espinosa vs. Aquino, (Electoral Case No. 9, Senate Electoral Tribunal [SET]), the election of the late Senator Benigno S. Aquino, Jr. was upheld, despite his not being of the required age on the day of the election, although he celebrated his thirty-fifth birthday before his proclamation. Much later, in 1990, this Court held in Aznar vs. Comelec (185 SCRA 703, May 25, 1990) that even if Emilio "Lito" Osmea held an Alien Certificate of Registration as an American citizen, he was still not disqualified from occupying the local elective post of governor, since such certificate did not preclude his being " still a Filipino." The holding in Aquino was subsequently nullified by the adoption of the 1987 Constitution (Art. VI, Sec. 3), which specified that the age qualification must be possessed on the day of the elections, and

not on the day of the proclamation of the winners by the board of canvassers. On the other hand, Sec. 40 of Republic Act No. 7160 (Local Government Code of 1991) which took effect on January 1, 1992, provides that those with dual citizenship are disqualified from running for any elective local position, and effectively overturns the ruling in Aznar. But the point is that to the extent possible, and unless there exist provisions to the contrary, the laws have always been interpreted to give fullest effect to the political will. 67 Benito vs. Commission on Elections, 235 SCRA 436, 442 (August 17, 1994). 68 This antagonism was clearly present in the two earlier cases involving Frivaldo. See footnote no. 6. PUNO, J., concurring: 1 The 1987 Constitution added the word "democratic" in the statement of the principle. 2 Section 24(a) of the Tydings-McDuffie Law which authorized the Filipino people to draft a Constitution in 1934 required that the "constitution formulated and drafted shall be republican in form." This Court has observed that even before the Tydings-McDuffie Law, the Philippine Bill and the Jones Law have ". . . extended the powers of a republican form of government modeled after that of the United States to the Philippines." Roa v. Collector of Customs, 23 Phil. 315, 340 [1912], Severino v. Gov. General, 16 Phil. 366, 383 [1910], US v. Bull, 15 Phil. 7, 27 [1910]. 3 Words and Phrases, Vol. 39 A., p. 68 citing Cherokee Nation v. Southern Kan. R. Co., 33 F. 900, 906. 4 Dean of the UP College of Law; later President of U.P., and Delegate to the 1971 Constitutional Convention. 5 Since, Philippine Political Law, Principles and Concepts, 1954, ed., p. 22. 6 Barker, Principles of Social and Political Theory, p. 59 (1952 ed.). 7 118 US 356. 8 Cruz, Philippine Political Law, p. 49, [1991 ed.]. 9 Sinco, op. cit., pp. 23-24. 10 3 AM JUR 2d 889-890; 63 AM JUR 2d 653; 67 CSJ 926. 11 Moya v. del Fierro, 69 Phil. 199.

EN BANC

LOIDA NICOLAS-LEWIS, GREGORIO B. MACABENTA, ALEJANDRO A. ESCLAMADO, ARMANDO B. HEREDIA, REUBEN S. SEGURITAN, ERIC LACHICA FURBEYRE, TERESITA A. CRUZ, JOSEFINA OPENA DISTERHOFT, MERCEDES V. OPENA, CORNELIO R. NATIVIDAD, EVELYN D. NATIVIDAD,

G.R. No. 162759

Present:

PANGANIBAN, C.J., PUNO, QUISUMBING,

P etitioners,

YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO-MORALES,

- versus -

CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, and VELASCO, JR., JJ.

COMMISSION ON ELECTIONS,

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

GARCIA, J.:

In this petition for certiorari and mandamus, petitioners, referring to themselves as "duals" or dual citizens, pray that they and others who retained or reacquired Philippine citizenship under Republic Act (R.A.) No. 9225, the Citizenship Retention and Re-Acquisition Act of 2003, be allowed to avail themselves of the mechanism provided under the Overseas Absentee Voting Act of 2003 (R.A. 9189) and that the Commission on Elections (COMELEC) accordingly be ordered to allow them to vote and register as absentee voters under the aegis of R.A. 9189.

The facts:

Petitioners are successful applicants for recognition of Philippine citizenship under R.A. 9225 which accords to such applicants the right of suffrage, among others. Long before the May 2004 national and local elections, petitioners sought

registration and certification as "overseas absentee voter" only to be advised by the Philippine Embassy in the United States that, per a COMELEC letter to the Department of Foreign Affairs dated September 23, 2003, they have yet no right to vote in such elections owing to their lack of the one-year residence requirement prescribed by the Constitution. The same letter, however, urged the different Philippine posts abroad not to discontinue their campaign for voters registration, as the residence restriction adverted to would contextually affect merely certain individuals who would likely be eligible to vote in future elections.

Prodded for clarification by petitioner Loida Nicolas-Lewis in the light of the ruling in Macalintal vs. COMELEC on the residency requirement, the COMELEC wrote in response:

Although R.A. 9225 enjoys the presumption of constitutionality , it is the Commission's position that those who have availed of the law cannot exercise the right of suffrage given under the OAVL for the reason that the OAVL was not enacted for them. Hence, as Filipinos who have merely re-acquired their citizenship on 18 September 2003 at the earliest, and as law and jurisprudence now stand, they are considered regular voters who have to meet the requirements of residency, among others under Section 1, Article 5 of the Constitution.

Faced with the prospect of not being able to vote in the May 2004 elections owing to the COMELEC's refusal to include them in the National Registry of Absentee Voters, petitioner Nicolas-Lewis et al., filed on April 1, 2004 this petition for certiorari and mandamus.

A little over a week before the May 10, 2004 elections, or on April 30, 2004, the COMELEC filed a Comment, therein praying for the denial of the petition. As may be expected, petitioners were not able to register let alone vote in said elections.

On May 20, 2004, the Office of the Solicitor General (OSG) filed a Manifestation (in Lieu of Comment), therein stating that all qualified overseas Filipinos, including dual citizens who care to exercise the right of suffrage, may do so , observing, however, that the conclusion of the 2004 elections had rendered the petition moot and academic.

The holding of the 2004 elections had, as the OSG pointed out, indeed rendered the petition moot and academic, but insofar only as petitioners participation in such political exercise is concerned. The broader and transcendental issue tendered or subsumed in the petition, i.e., the propriety of allowing duals to participate and vote as absentee voter in future elections, however, remains unresolved.

Observing the petitioners and the COMELECs respective formulations of the issues, the same may be reduced into the question of whether or not petitioners and others who might have meanwhile retained and/or reacquired Philippine citizenship pursuant to R.A. 9225 may vote as absentee voter under R.A. 9189.

The Court resolves the poser in the affirmative, and thereby accords merit to the petition.

In esse, this case is all about suffrage. A quick look at the governing provisions on the right of suffrage is, therefore, indicated.

We start off with Sections 1 and 2 of Article V of the Constitution, respectively reading as follows:

SECTION 1. Suffrage may be exercised by all citizens of the Philippines not otherwise disqualified by law, who are at least eighteen years of age, and who shall have resided in the Philippines for at least one year and in the place wherein they propose to vote for at least six months immediately preceding the election. xxx.

SEC 2. The Congress shall provide a system for absentee voting by qualified Filipinos abroad.

In a nutshell, the aforequoted Section 1 prescribes residency requirement as a general eligibility factor for the right to vote. On the other hand, Section 2 authorizes Congress to devise a system wherein an absentee may vote, implying that a non-resident may, as an exception to the residency prescription in the preceding section, be allowed to vote.

In response to its above mandate, Congress enacted R.A. 9189 - the OAVL - identifying in its Section 4 who can vote under it and in the following section who cannot, as follows:

Section 4. Coverage. All citizens of the Philippines abroad, who are not otherwise disqualified by law, at least eighteen (18) years of age on the day of elections, may vote for president, vice-president, senators and party-list representatives. Section 5. Disqualifications. disqualified from voting under this Act: The following shall be

(a) Those who have lost their Filipino citizenship in accordance with Philippine laws;

(b) Those who have expressly renounced their Philippine citizenship and who have pledged allegiance to a foreign country;

(c) Those who have [been] convicted in a final judgment by a court or tribunal of an offense punishable by imprisonment of not less than one (1) year, including those who have been found guilty of Disloyalty as defined under Article 137 of the Revised Penal Code, .;

(d) An immigrant or a permanent resident who is recognized as such in the host country, unless he/she executes, upon registration, an affidavit prepared for the purpose by the Commission declaring that he/she shall resume actual physical permanent residence in the Philippines not later than three (3) years from approval of his/her registration under this Act. Such affidavit shall also state that he/she has not applied for citizenship in another country. Failure to return shall be the cause for the removal of the name of the immigrant or permanent resident from the National Registry of

Absentee Voters and his/her permanent disqualification to vote in absentia.

(e) Any citizen of the Philippines abroad previously declared insane or incompetent by competent authority . (Words in bracket added.)

Notably, Section 5 lists those who cannot avail themselves of the absentee voting mechanism. However, Section 5(d) of the enumeration respecting Filipino immigrants and permanent residents in another country opens an exception and qualifies the disqualification rule. Section 5(d) would, however, face a constitutional challenge on the ground that, as narrated in Macalintal, it -

violates Section 1, Article V of the 1987 Constitution which requires that the voter must be a resident in the Philippines for at least one year and in the place where he proposes to vote for at least six months immediately preceding an election. [The challenger] cites Caasi vs. Court of Appeals to support his claim [where] the Court held that a green card holder immigrant to the [US] is deemed to have abandoned his domicile and residence in the Philippines.

[The challenger] further argues that Section 1, Article V of the Constitution does not allow provisional registration or a promise by a voter to perform a condition to be qualified to vote in a political exercise; that the legislature should not be allowed to circumvent the requirement of the Constitution on the right of suffrage by providing a condition thereon which in effect amends or alters the aforesaid residence requirement to qualify a Filipino abroad to vote. He claims that the right of suffrage should not be granted to anyone who, on the date of the election, does not possess the qualifications provided for by Section 1, Article V of the Constitution. (Words in bracket added.)

As may be recalled, the Court upheld the constitutionality of Section 5(d) of R.A. 9189 mainly on the strength of the following premises:

As finally approved into law, Section 5(d) of R.A. No. 9189 specifically disqualifies an immigrant or permanent resident who is recognized as such in the host country because immigration or permanent residence in another country implies renunciation of one's residence in his country of origin. However, same Section allows an immigrant and permanent resident abroad to register as voter for as long as he/she executes an affidavit to show that he/she has not abandoned his domicile in pursuance of the constitutional intent expressed in Sections 1 and 2 of Article V that all citizens of the Philippines not otherwise disqualified by law must be entitled to exercise the right of suffrage and, that Congress must establish a system for absentee voting; for otherwise, if actual, physical residence in the Philippines is required, there is no sense for the framers of the Constitution to mandate Congress to establish a system for absentee voting.

Contrary to the claim of [the challenger], the execution of the affidavit itself is not the enabling or enfranchising act. The affidavit required in Section 5(d) is not only proof of the intention of the immigrant or permanent resident to go back and resume residency in the Philippines, but more significantly, it serves as an explicit expression that he had not in fact abandoned his domicile of origin. Thus, it is not correct to say that the execution of the affidavit under Section 5(d) violates the Constitution that proscribes provisional registration or a promise by a voter to perform a condition to be qualified to vote in a political exercise.

Soon after Section 5(d) of R.A. 9189 passed the test of constitutionality, Congress enacted R.A. 9225 the relevant portion of which reads:

SEC. 2. Declaration of Policy. It is hereby declared the policy of the State that all Philippine citizens who become citizens of another country shall be deemed not to have lost their Philippine citizenship under the conditions of this Act.

SEC. 3. Retention of Philippine Citizenship . Any provision of law to the contrary notwithstanding, natural-born citizens of the Philippines who have lost their Philippine citizenship by reason of their naturalization as citizens of a foreign country are hereby deemed to have re-acquired Philippine citizenship upon taking the following oath of allegiance to the Republic:

xxx

xxx

xxx

Natural-born citizens of the Philippines who, after the effectivity of this Act, become citizens of a foreign country shall retain their Philippine citizenship upon taking the aforesaid oath.

SEC. 4. Derivative Citizenship. The unmarried child, whether legitimate, illegitimate or adopted, below eighteen (18) years of age, of those who re-acquire Philippine citizenship upon effectivity of this Act shall be deemed citizens of the Philippines.

SEC. 5. Civil and Political Rights and Liabilities . Those who retain or re-acquire Philippine citizenship under this Act shall enjoy full civil and political rights and be subject to all attendant liabilities and responsibilities under existing laws of the Philippines and the following conditions:

(1) Those intending to exercise their right of suffrage must meet the requirements under Section 1, Article V of the Constitution, Republic Act No. 9189, otherwise known as The Overseas Absentee Voting Act of 2003 and other existing laws;

(2) Those seeking elective public office in the Philippines shall meet the qualifications for holding such public office as required by the Constitution and existing laws and, at the time of the filing of the certificate of candidacy, make a personal and sworn renunciation of any and all foreign citizenship ;

3)

xxx

xxx

xxx.

(4) xxx

xxx

xxx;

(5) That right to vote or be elected or appointed to any public office in the Philippines cannot be exercised by, or extended to, those who:

(a) are candidates for or are occupying any public office in the country of which they are naturalized citizens; and/or

(b) are in active service as commissioned or non-commissioned officers in the armed forces of the country which they are naturalized citizens.

After what appears to be a successful application for recognition of Philippine citizenship under R.A. 9189, petitioners now invoke their right to enjoy political rights, specifically the right of suffrage, pursuant to Section 5 thereof.

Opposing the petitioners bid, however, respondent COMELEC invites attention to the same Section 5 (1) providing that duals can enjoy their right to vote, as an adjunct to political rights, only if they meet the requirements of Section 1, Article V of the Constitution, R.A. 9189 and other existing laws. Capitalizing on what at first blush is the clashing provisions of the aforecited provision of the Constitution, which, to repeat, requires residency in the Philippines for a certain period, and R.A. 9189 which grants a Filipino non-resident absentee voting rights, COMELEC argues:

4.

DUALS MUST FIRST ESTABLISH THEIR DOMICILE/ RESIDENCE IN THE PHILIPPINES

4.01.

The inclusion of such additional and specific requirements in RA 9225 is logical. The duals, upon renouncement of their Filipino citizenship and acquisition of foreign citizenship, have practically and legally abandoned their domicile and severed their legal ties to the homeland as a consequence. Having subsequently acquired a second citizenship ( i.e., Filipino) then, duals must, for purposes of voting, first of all, decisively and definitely establish their domicile through positive acts;

The Court disagrees.

As may be noted, there is no provision in the dual citizenship law - R.A. 9225 - requiring "duals" to actually establish residence and physically stay in the Philippines first before they can exercise their right to vote. On the contrary, R.A. 9225, in implicit acknowledgment that duals are most likely non-residents,

grants under its Section 5(1) the same right of suffrage as that granted an absentee voter under R.A. 9189. It cannot be overemphasized that R.A. 9189 aims, in essence, to enfranchise as much as possible all overseas Filipinos who, save for the residency requirements exacted of an ordinary voter under ordinary conditions, are qualified to vote. Thus, wrote the Court in Macalintal:

It is clear from these discussions of the Constitutional Commission that [it] intended to enfranchise as much as possible all Filipino citizens abroad who have not abandoned their domicile of origin. The Commission even intended to extend to young Filipinos who reach voting age abroad whose parents domicile of origin is in the Philippines, and consider them qualified as voters for the first time.

It is in pursuance of that intention that the Commission provided for Section 2 [Article V] immediately after the residency requirement of Section 1. By the doctrine of necessary implication in statutory construction, , the strategic location of Section 2 indicates that the Constitutional Commission provided for an exception to the actual residency requirement of Section 1 with respect to qualified Filipinos abroad. The same Commission has in effect declared that qualified Filipinos who are not in the Philippines may be allowed to vote even though they do not satisfy the residency requirement in Section 1, Article V of the Constitution.

That Section 2 of Article V of the Constitution is an exception to the residency requirement found in Section 1 of the same Article was in fact the subject of debate when Senate Bill No. 2104, which became R.A. No. 9189, was deliberated upon on the Senate floor, thus:

Senator Arroyo. Mr. President, this bill should be looked into in relation to the constitutional provisions. I think the sponsor and I would agree that the Constitution is supreme in any statute that we may enact.

Let me Constitution .

read

Section

1,

Article

V,

of

the

xxx

xxx

xxx

Now, Mr. President, the Constitution says, who shall have resided in the Philippines. They are permanent immigrants. They have changed residence so they are barred under the Constitution. This is why I asked whether this committee amendment which in fact does not alter the original text of the bill will have any effect on this?

Senator Angara. Good question, Mr. President. And this has been asked in various fora. This is in compliance with the Constitution. One, the interpretation here of residence is synonymous with domicile.

As the gentleman and I know, Mr. President, domicile is the intent to return to one's home. And the fact that a Filipino may have been physically absent from the Philippines and may be physically a resident of the United States, for example, but has a clear intent to return to the Philippines, will make him qualified as a resident of the Philippines under this law.

This is consistent, Mr. President, with the constitutional mandate that we that Congress must provide a franchise to overseas Filipinos.

If we read the Constitution and the suffrage principle literally as demanding physical presence, then there is no way we can provide for offshore voting to our offshore kababayan, Mr. President.

Senator Arroyo. Mr. President, when the Constitution says, in Section 2 of Article V, it reads: The Congress shall provide a system for securing the secrecy and sanctity of the ballot as well as a system for absentee voting by qualified Filipinos abroad.

The key to this whole exercise, Mr. President, is qualified. In other words, anything that we may do or say in granting our compatriots abroad must be anchored on the proposition that they are qualified. Absent the qualification, they cannot vote. And residents (sic) is a qualification.

xxx

xxx

xxx

Look at what the Constitution says In the place wherein they propose to vote for at least six months immediately preceding the election.

Mr. President, all of us here have run (sic) for office.

I live in Makati. My neighbor is Pateros . We are separated only by a creek. But one who votes in Makati cannot vote in Pateros unless he resides in Pateros for six months. That is how restrictive our Constitution is. .

As I have said, if a voter in Makati would want to vote in Pateros, yes, he may do so. But he must do so, make the transfer six months before the election, otherwise, he is not qualified to vote.

xxx

xxx

xxx

Senator Angara. It is a good point to raise, Mr. President. But it is a point already well-debated even in the constitutional commission of 1986. And the reason Section 2 of Article V was placed immediately after the six-month/one-year residency requirement is to demonstrate unmistakably that Section 2 which authorizes absentee voting is an exception to the six-month/one-year residency requirement . That is the first principle, Mr. President, that one must remember.

The second reason, Mr. President, is that under our jurisprudence residency has been interpreted as synonymous with domicile.

But the third more practical reason, is, if we follow the interpretation of the gentleman, then it is legally and constitutionally impossible to give a franchise to vote to overseas Filipinos who do not physically live in the country, which is quite ridiculous because that is exactly the whole point of this exercise to enfranchise them and empower them to vote. (Emphasis and words in bracket added; citations omitted)

Lest it be overlooked, no less than the COMELEC itself admits that the Citizenship Retention and Re-Acquisition Act expanded the coverage of overseas absentee voting. According to the poll body:

1.05 With the passage of RA 9225 the scope of overseas absentee voting has been consequently expanded so as to include Filipinos who are also citizens of other countries, subject, however, to the strict prerequisites indicated in the pertinent provisions of RA 9225;

Considering the unison intent of the Constitution and R.A. 9189 and the expansion of the scope of that law with the passage of R.A. 9225, the irresistible conclusion is that "duals" may now exercise the right of suffrage thru the absentee voting scheme and as overseas absentee voters. R.A. 9189 defines the terms adverted to in the following wise:

Absentee Voting refers to the process by which qualified citizens of the Philippines abroad exercise their right to vote;

Overseas Absentee Voter refers to a citizen of the Philippines who is qualified to register and vote under this Act, not otherwise disqualified by law, who is abroad on the day of elections;

While perhaps not determinative of the issue tendered herein, we note that the expanded thrust of R.A. 9189 extends also to what might be tag as the next generation of "duals". This may be deduced from the inclusion of the provision on derivative citizenship in R.A. 9225 which reads:

SEC. 4. Derivative Citizenship. The unmarried child, whether legitimate, illegitimate or adopted, below eighteen (18) years of age, of those who re-acquire Philippine citizenship upon effectivity of this Act shall be deemed citizens of the Philippines.

It is very likely that a considerable number of those unmarried children below eighteen (18) years of age had never set foot in the Philippines. Now then, if the next generation of "duals" may nonetheless avail themselves the right to enjoy full civil and political rights under Section 5 of the Act, then there is neither no rhyme nor reason why the petitioners and other present day "duals," provided they meet the requirements under Section 1, Article V of the Constitution in relation to R.A. 9189, be denied the right of suffrage as an overseas absentee voter. Congress could not have plausibly intended such absurd situation.

WHEREFORE,

the

instant

petition

is

GRANTED.

Accordingly, the Court rules and so holds that those who retain or re-acquire Philippine citizenship under Republic Act No. 9225, the Citizenship Retention and Re-Acquisition Act of 2003, may exercise the right to vote under the system of absentee voting in Republic Act No. 9189, the Overseas Absentee Voting Act of 2003.

SO ORDERED.

CANCIO C. GARCIA Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN Chief Justice

REYNATO S. PUNO Associate Justice

LEONARDO A. QUISUMBING Associate Justice

CONSUELO YNARES-SANTIAGO Associate Justice

ANGELINA SANDOVALGUTIERREZ Associate Justice

ANTONIO T. CARPIO Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

RENATO C. CORONA Associate Justice

CONCHITA CARPIO MORALES Associate Justice

ROMEO J. CALLEJO, SR. Associate Justice

ADOLFO S. AZCUNA Associate Justice

DANTE O. TINGA Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

ARTEMIO V. PANGANIBAN Chief Justice


Also known as Overseas Absentee Voting Law or OAVL for short. Signed by Florentino A. Tuason Jr., as then COMELEC Committee Chairman on Overseas Absentee Voting ; Rollo, p. 33. G.R. No. 157013, July 10, 2003, 405 SCRA 614. Concluding paragraph of letter dated November 4, 2003 of the Comelec to the Balane Tamase Alampay Law Office (counsel for petitioners); Rollo, pp. 42-51. The other petitioners executed deeds of Special Power of Attorney (SPA), therein authorizing Loida Nicolas Lewis to file the Petition; Rollo, pp. 92-112. Rollo, pp. 53-67. Rollo, pp. 77-78. Published in the February 16, 2003 issues of Today and Daily Tribune.

G.R. No. 88831, 8 November 1990, 191 SCRA 229. Macalintal v. COMELEC, supra. Id. at 645. Constitution, Article V, Section 1: at least one year and in the place wherein they propose to vote for at least six months immediately preceding the election . COMELEC's Memorandum, p. 6, appended to the Rollo. Macalintal v. COMELEC, supra, at pp. 641-644. COMELEC's Memorandum, p. 4, appended to the Rollo

EN BANC

GAUDENCIO M. CORDORA, Petitioner,

G.R. No. 176947

Present:

PUNO, C.J., QUISUMBING, YNARES-SANTIAGO,*

CARPIO, AUSTRIA-MARTINEZ, CORONA, - versus CARPIO MORALES, TINGA,** CHICO-NAZARIO, VELASCO, JR.,*** NACHURA, LEONARDO-DE CASTRO, BRION, and PERALTA, JJ.

COMMISSION ON ELECTIONS and GUSTAVO S. TAMBUNTING, Respondents.

Promulgated:

February 19, 2009

x-------------------------------------------------- x

DECISION

CARPIO, J.:

The Case

This is a petition for certiorari and mandamus, with prayer for the issuance of a temporary restraining order under Rule 65 of the 1997 Rules of Civil Procedure. In EO Case No. 05-17, Gaudencio M. Cordora (Cordora) accused Gustavo S. Tambunting (Tambunting) of an election offense for violating Section 74 in relation to Section 262 of the Omnibus Election Code. The Commission on Elections (COMELEC) En Banc dismissed Cordoras complaint in a Resolution dated 18 August 2006. The present petition seeks to reverse the 18 August 2006 Resolution as well as the Resolution dated 20 February 2007 of the COMELEC En Banc which denied Cordoras motion for reconsideration.

The Facts

In his complaint affidavit filed before the COMELEC Law Department, Cordora asserted that Tambunting made false assertions in the following items:

That Annex A [Tambuntings Certificate of Candidacy for the 2001 elections] and Annex B [Tambuntings Certificate of Candidacy for the 2004 elections] state, among others, as follows, particularly Nos. 6, 9 and 12 thereof: 1. No. 6 I am a Natural Born/Filipino Citizen 2. No. 9 No. of years of Residence before May 14, 2001. 36 in the Philippines and 25 in the Constituency where I seek to be elected; 3. No. 12 I am ELIGIBLE for the office I seek to be elected. (Boldface and capitalization in the original)

Cordora stated that Tambunting was not eligible to run for local public office because Tambunting lacked the required citizenship and residency requirements. To disprove Tambuntings claim of being a natural-born Filipino citizen, Cordora presented a certification from the Bureau of Immigration which stated that, in two instances, Tambunting claimed that he is an American: upon arrival in the Philippines on 16 December 2000 and upon departure from the Philippines on 17 June 2001. According to Cordora, these travel dates confirmed that Tambunting acquired American citizenship through naturalization in Honolulu, Hawaii on 2 December 2000. Cordora concluded:
That Councilor Gustavo S. Tambunting contrary to the provision of Sec 74 (OEC): [sic] Re: CONTENTS OF CERTIFICATE OF CANDIDACY: which requires the declarant/affiant to state, among others, under oath, that he is a Filipino (No. 6), No. 9- residence requirement which he lost when [he was] naturalized as an American Citizen on December 2, 2000 at [sic]

Honolulu, Hawaii, knowingly and willfully affirmed and reiterated that he possesses the above basic requirements under No. 12 that he is indeed eligible for the office to which he seeks to be elected, when in truth and in fact, the contrary is indubitably established by his own statements before the Philippine Bureau of Immigration x x x. (Emphases in the original)

Tambunting, on the other hand, maintained that he did not make any misrepresentation in his certificates of candidacy. To refute Cordoras claim that Tambunting is not a natural-born Filipino, Tambunting presented a copy of his birth certificate which showed that he was born of a Filipino mother and an American father. Tambunting further denied that he was naturalized as an American citizen. The certificate of citizenship conferred by the US government after Tambuntings father petitioned him through INS Form I-130 (Petition for Relative) merely confirmed Tambuntings citizenship which he acquired at birth. Tambuntings possession of an American passport did not mean that Tambunting is not a Filipino citizen. Tambunting also took an oath of allegiance on 18 November 2003 pursuant to Republic Act No. 9225 (R.A. No. 9225), or the Citizenship Retention and Reacquisition Act of 2003.

Tambunting further stated that he has resided in the Philippines since birth. Tambunting has imbibed the Filipino culture, has spoken the Filipino language, and has been educated in Filipino schools. Tambunting maintained that proof of his

loyalty and devotion to the Philippines was shown by his service as councilor of Paraaque.

To refute Cordoras claim that the number of years of residency stated in Tambuntings certificates of candidacy is false because Tambunting lost his residency because of his naturalization as an American citizen, Tambunting contended that the residency requirement is not the same as citizenship.

The Ruling of the COMELEC Law Department

The COMELEC Law Department recommended the dismissal of Cordoras complaint against Tambunting because Cordora failed to substantiate his charges against Tambunting. Cordoras reliance on the certification of the Bureau of Immigration that Tambunting traveled on an American passport is not sufficient to prove that Tambunting is an American citizen.

The Ruling of the COMELEC En Banc

The COMELEC En Banc affirmed the findings and the resolution of the COMELEC Law Department. The COMELEC En Banc was convinced that Cordora failed to support his accusation against Tambunting by sufficient and convincing evidence.

The dispositive portion of the COMELEC En Bancs Resolution reads as follows:

WHEREFORE, premises considered, the instant complaint is hereby DISMISSED for insufficiency of evidence to establish probable cause. SO ORDERED.

Commissioner Rene V. Sarmiento (Commissioner Sarmiento) wrote a separate opinion which concurred with the findings of the En Banc Resolution. Commissioner Sarmiento pointed out that Tambunting could be considered a dual citizen. Moreover, Tambunting effectively renounced his American citizenship when he filed his certificates of candidacy in 2001 and 2004 and ran for public office.

Cordora filed a motion for reconsideration which raised the same grounds and the same arguments in his complaint. In its Resolution promulgated on 20 February 2007, the COMELEC En Banc dismissed Cordoras motion for reconsideration for lack of merit.

The Issue

Cordora submits that the COMELEC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it declared that there is no sufficient evidence to support probable cause that may warrant the prosecution of Tambunting for an election offense.

Cordoras petition is not an action to disqualify Tambunting because of Tambuntings failure to meet citizenship and residency requirements. Neither is the present petition an action to declare Tambunting a non-Filipino and a non-resident. The present petition seeks to prosecute Tambunting for knowingly making untruthful statements in his certificates of candidacy.

The Ruling of the Court

The petition has no merit. We affirm the ruling of the COMELEC En Banc.

Whether there is Probable Cause to Hold Tambunting for Trial for Having Committed an Election Offense

There was no grave abuse of discretion in the COMELEC En Bancs ruling that there is no sufficient and convincing evidence to support a finding of probable cause to hold Tambunting for trial for violation of Section 74 in relation to Section 262 of the Omnibus Election Code.

Probable cause constitutes those facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed. Determining probable cause is an intellectual activity premised on the prior physical presentation or submission of documentary or

testimonial proofs either confirming, negating or qualifying the allegations in the complaint.

Section 74 of the Omnibus Election Code reads as follows:

Contents of certificate of candidacy. The certificate of candidacy shall state that the person filing it is announcing his candidacy for the office stated therein and that he is eligible for said office; x x x the political party to which he belongs; civil status; his date of birth; residence; his post office address for all election purposes; his profession or occupation; that he will support and defend the Constitution of the Philippines and will maintain true faith and allegiance thereto; that he will obey the laws, legal orders and decrees promulgated by the duly constituted authorities; that he is not a permanent resident or immigrant to a foreign country; that the obligation imposed by his oath is assumed voluntarily, without mental reservation or purpose of evasion; and that the facts stated in the certificate of candidacy are true to the best of his knowledge. xxx The person filing a certificate of candidacy shall also affix his latest photograph, passport size; a statement in duplicate containing his bio-data and program of government not exceeding one hundred words, if he so desires.

Section 262 of the Omnibus Election Code, on the other hand, provides that violation of Section 74, among other sections in the Code, shall constitute an election offense.

Tambuntings Dual Citizenship

Tambunting does not deny that he is born of a Filipino mother and an American father. Neither does he deny that he underwent the process involved in INS Form I-130 (Petition for Relative) because of his fathers citizenship. Tambunting claims that because of his parents differing citizenships, he is both Filipino and American by birth. Cordora, on the other hand, insists that Tambunting is a naturalized American citizen.

We agree with Commissioner Sarmientos observation that Tambunting possesses dual citizenship. Because of the circumstances of his birth, it was no longer necessary for Tambunting to undergo the naturalization process to acquire American citizenship. The process involved in INS Form I-130 only served to confirm the American citizenship which Tambunting acquired at birth. The certification from the Bureau of Immigration which Cordora presented contained two trips where Tambunting claimed that he is an American. However, the same certification showed nine other trips where Tambunting claimed that he is Filipino. Clearly, Tambunting possessed dual citizenship prior to the filing of his certificate of candidacy before the 2001 elections. The fact that Tambunting had dual citizenship did not disqualify him from running for public office.

Requirements for dual citizens from birth who desire to run for public office

We deem it necessary to reiterate our previous ruling in Mercado v. Manzano, wherein we ruled that dual citizenship is not a ground for disqualification from running for any elective local position.

To begin with, dual citizenship is different from dual allegiance. The former arises when, as a result of the concurrent application of the different laws of two or more states, a person is simultaneously considered a national by the said states. For instance, such a situation may arise when a person whose parents are citizens of a state which adheres to the principle of jus sanguinis is born in a state which follows the doctrine of jus soli. Such a person, ipso facto and without any voluntary act on his part, is concurrently considered a citizen of both states. Considering the citizenship clause (Art. IV) of our Constitution, it is possible for the following classes of citizens of the Philippines to possess dual citizenship: (1) Those born of Filipino fathers and/or mothers in foreign countries which follow the principle of jus soli; (2) Those born in the Philippines of Filipino mothers and alien fathers if by the laws of their fathers country such children are citizens of that country; (3) Those who marry aliens if by the laws of the latters country the former are considered citizens, unless by their act or omission they are deemed to have renounced Philippine citizenship. There may be other situations in which a citizen of the Philippines may, without performing any act, be also a citizen of another state; but the above cases are clearly possible given the constitutional provisions on citizenship. Dual allegiance, on the other hand, refers to the situation in which a person simultaneously owes, by some positive act, loyalty to two or more states. While dual citizenship is involuntary, dual allegiance is the result of an individuals volition.

xxx [I]n including 5 in Article IV on citizenship, the concern of the Constitutional Commission was not with dual citizens per se but with naturalized citizens who maintain their allegiance to their countries of origin even after their naturalization. Hence, the phrase dual citizenship in R.A. No. 7160, 40(d) and in R.A. No. 7854, 20 must be understood as referring to dual allegiance. Consequently, persons with mere dual citizenship do not fall under this disqualification. Unlike those with dual allegiance, who must, therefore, be subject to strict process with respect to the termination of their status, for candidates with dual citizenship, it should suffice if, upon the filing of their certificates of candidacy, they elect Philippine citizenship to terminate their status as persons with dual citizenship considering that their condition is the unavoidable consequence of conflicting laws of different states. As Joaquin G. Bernas, one of the most perceptive members of the Constitutional Commission, pointed out: [D]ual citizenship is just a reality imposed on us because we have no control of the laws on citizenship of other countries. We recognize a child of a Filipino mother. But whether or not she is considered a citizen of another country is something completely beyond our control. By electing Philippine citizenship, such candidates at the same time forswear allegiance to the other country of which they are also citizens and thereby terminate their status as dual citizens. It may be that, from the point of view of the foreign state and of its laws, such an individual has not effectively renounced his foreign citizenship. That is of no moment as the following discussion on 40(d) between Senators Enrile and Pimentel clearly shows: SENATOR ENRILE. Mr. President, I would like to ask clarification of line 41, page 17: Any person with dual citizenship is disqualified to run for any elective local position. Under the present Constitution, Mr. President, someone whose mother is a citizen of the Philippines but his father is a foreigner is a natural-born citizen of the Republic. There is no requirement that such a natural-born citizen, upon reaching the age of majority, must elect or give up Philippine citizenship. On the assumption that this person would carry two passports, one belonging to the country of his or her father and one belonging to the Republic of the Philippines, may such a situation disqualify the person to run for a local government position? SENATOR PIMENTEL. To my mind, Mr. President, it only means that at the moment when he would want to run for public office, he has to repudiate one of his citizenships. SENATOR ENRILE. Suppose he carries only a Philippine passport but the country of origin or the country of the father claims that person, nevertheless, as a citizen,? No one can renounce. There are such countries in the world.

SENATOR PIMENTEL. Well, the very fact that he is running for public office would, in effect, be an election for him of his desire to be considered a Filipino citizen. SENATOR ENRILE. But, precisely, Mr. President, the Constitution does not require an election. Under the Constitution, a person whose mother is a citizen of the Philippines is, at birth, a citizen without any overt act to claim the citizenship. SENATOR PIMENTEL. Yes. What we are saying, Mr. President, is: Under the Gentlemans example, if he does not renounce his other citizenship, then he is opening himself to question. So, if he is really interested to run, the first thing he should do is to say in the Certificate of Candidacy that: I am a Filipino citizen, and I have only one citizenship. SENATOR ENRILE. But we are talking from the viewpoint of Philippine law, Mr. President. He will always have one citizenship, and that is the citizenship invested upon him or her in the Constitution of the Republic. SENATOR PIMENTEL. That is true, Mr. President. But if he exercises acts that will prove that he also acknowledges other citizenships, then he will probably fall under this disqualification. (Emphasis supplied)

We have to consider the present case in consonance with our rulings in Mercado v. Manzano, Valles v. COMELEC, and AASJS v. Datumanong. Mercado and Valles involve similar operative facts as the present case. Manzano and Valles, like Tambunting, possessed dual citizenship by the circumstances of their birth. Manzano was born to Filipino parents in the United States which follows the doctrine of jus soli. Valles was born to an Australian mother and a Filipino father in Australia. Our rulings in Manzano and Valles stated that dual citizenship is different from dual allegiance both by cause and, for those desiring to run for public

office, by effect. Dual citizenship is involuntary and arises when, as a result of the concurrent application of the different laws of two or more states, a person is simultaneously considered a national by the said states. Thus, like any other natural-born Filipino, it is enough for a person with dual citizenship who seeks public office to file his certificate of candidacy and swear to the oath of allegiance contained therein. Dual allegiance, on the other hand, is brought about by the individuals active participation in the naturalization process. AASJS states that, under R.A. No. 9225, a Filipino who becomes a naturalized citizen of another country is allowed to retain his Filipino citizenship by swearing to the supreme authority of the Republic of the Philippines. The act of taking an oath of allegiance is an implicit renunciation of a naturalized citizens foreign citizenship.

R.A. No. 9225, or the Citizenship Retention and Reacquisition Act of 2003, was enacted years after the promulgation of Manzano and Valles. The oath found in Section 3 of R.A. No. 9225 reads as follows:

I __________ , solemnly swear (or affirm) that I will support and defend the Constitution of the Republic of the Philippines and obey the laws and legal orders promulgated by the duly constituted authorities of the Philippines; and I hereby declare that I recognize and accept the supreme authority of the Philippines and will maintain true faith and allegiance thereto; and that I impose this obligation upon myself voluntarily without mental reservation or purpose of evasion.

In Sections 2 and 3 of R.A. No. 9225, the framers were not concerned with dual citizenship per se, but with the status of naturalized citizens who maintain their allegiance to their countries of origin even after their naturalization. Section 5(3) of R.A. No. 9225 states that naturalized citizens who reacquire Filipino citizenship and desire to run for elective public office in the Philippines shall meet the qualifications for holding such public office as required by the Constitution and existing laws and, at the time of filing the certificate of candidacy, make a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to administer an oath aside from the oath of allegiance prescribed in Section 3 of R.A. No. 9225. The twin requirements of swearing to an Oath of Allegiance and executing a Renunciation of Foreign Citizenship served as the bases for our recent rulings in Jacot v. Dal and COMELEC, Velasco v. COMELEC, and Japzon v. COMELEC, all of which involve natural-born Filipinos who later became naturalized citizens of another country and thereafter ran for elective office in the Philippines. In the present case, Tambunting, a natural-born Filipino, did not subsequently become a naturalized citizen of another country. Hence, the twin requirements in R.A. No. 9225 do not apply to him.

Tambuntings residency

Cordora concluded that Tambunting failed to meet the residency requirement because of Tambuntings naturalization as an American. Cordoras reasoning fails because Tambunting is not a naturalized American. Moreover, residency, for the purpose of election laws, includes the twin elements of the fact of residing in a fixed place and the intention to return there permanently, and is not dependent upon citizenship.

In view of the above, we hold that Cordora failed to establish that Tambunting indeed willfully made false entries in his certificates of candidacy. On the contrary, Tambunting sufficiently proved his innocence of the charge filed against him. Tambunting is eligible for the office which he sought to be elected and fulfilled the citizenship and residency requirements prescribed by law.

WHEREFORE, we DISMISS the petition. We AFFIRM the Resolutions of the Commission on Elections En Banc dated 18 August 2006 and 20 February 2007 in EO Case No. 05-17.

SO ORDERED.

ANTONIO T. CARPIO Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief Justice

(On official leave) LEONARDO A. QUISUMBING CONSUELO YNARESSANTIAGO

Associate Justice

Associate Justice

MA. ALICIA AUSTRIAMARTINEZ Associate Justice

RENATO C. CORONA Associate Justice

CONCHITA CARPIO MORALES Associate Justice

(On official leave) DANTE O. TINGA Associate Justice

(On official leave)

MINITA V. CHICO-NAZARIO Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice

ARTURO D. BRION Associate Justice

DIOSDADO M. PERALTA Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO Chief Justice

* ** ***

On official leave. On official leave. On official leave.

Rollo, pp. 36-41. Penned by Commissioner Florentino A. Tuason, Jr., with Chairman Benjamin S. Abalos, Sr., Commissioners Resurreccion Z. Borra, Romeo A. Brawner, Rene V. Sarmiento, and Nicodemo T. Ferrer concurring. Id. at 44-47. Penned by Commissioner Rene V. Sarmiento, with Chairman Benjamin S. Abalos, Sr., Commissioners Resurreccion Z. Borra, Florentino A. Tuason, Jr., Romeo A. Brawner, and Nicodemo T. Ferrer concurring. Id. at 29. Id. at 30. Id. at 40. Kilosbayan, Inc. v. COMELEC, 345 Phil. 1141, 1173 (1997). See Valles v. Commission on Elections, 392 Phil. 327 (2000). 367 Phil. 132, 144-145, 147-149 (1999). Citations omitted. 367 Phil. 132 (1999). 392 Phil. 327 (2000).

G.R. No. 160869, 11 May 2007, 523 SCRA 108. Id. at 117. G.R. No. 179848, 29 November 2008. G.R. No. 180051, 24 December 2008. G.R. No. 180088, 19 January 2009. See Romualdez-Marcos v. Commission on Elections, G.R. No. 119976, 18 September 1995, 248 SCRA 300.

FIRST DIVISION

FRABELLE CORPORATION,

FISHING Petitioner,

G.R. No. 158560

Present: versus PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ, THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY, PHILAM PROPERTIES CORPORATION and PERF REALTY CORPORATION, Respondents. CORONA, AZCUNA, and GARCIA, JJ.

Promulgated:

August 17, 2007

x -------------------------------------------------------------------------------------x

DECISION SANDOVAL-GUTIERREZ, J.:

Before us is the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision and Resolution of the Court of Appeals dated December 2, 2002 and May 30, 2003, respectively, in CA-G.R. SP No. 71389.

The facts are:

Philam Properties Corporation, Philippine American Life Insurance Company, and PERF Realty Corporation, herein respondents, are all corporations duly organized and existing under Philippine laws.

On May 8, 1996, respondents entered into a Memorandum of Agreement (1996 MOA) whereby each agreed to contribute cash, property, and services for the construction and development of Philamlife Tower, a 45-storey office condominium along Paseo de Roxas, Makati City.

On December 6, 1996, respondents executed a Deed of Assignment (1996 DOA) wherein they assigned to Frabelle Properties Corporation (Frabelle) their rights and obligations under the 1996 MOA with respect to the construction, development, and subsequent ownership of Unit No. 38-B located at the 38th floor of Philamlife Tower. The parties also stipulated that the assignee shall be deemed as a co-developer of the construction project with respect to Unit No. 38-B.

Frabelle, in turn, assigned to Frabelle Fishing Corporation (Frabelle Fishing), petitioner herein, its rights, obligations and interests over Unit No. 38-B.

On March 9, 1998, petitioner Frabelle Fishing and respondents executed a Memorandum of Agreement (1998 MOA) to fund the construction of designated office floors in Philamlife Tower.

The dispute between the parties started when petitioner found material concealment on the part of respondents regarding certain details in the 1996 DOA and 1998 MOA and their gross violation of their contractual obligations as condominium developers. These violations are: (a) the non-construction of a

partition wall between Unit No. 38-B and the rest of the floor area; and (b) the reduction of the net usable floor area from four

hundred sixty eight (468) square meters to only three hundred fifteen (315) square meters.

Dissatisfied with its existing arrangement with respondents, petitioner, on October 22, 2001, referred the matter to the Philippine Dispute Resolution Center, Inc. (PDRCI) for arbitration. However, in a letter dated November 7, 2001, respondents manifested their refusal to submit to PDRCIs jurisdiction.

On February 11, 2002, petitioner filed with the Housing and Land Use Regulatory Board (HLURB), Expanded National Capital Region Field Office a complaint for reformation of instrument, specific performance and damages against respondents, Petitioner docketed as HLURB Case No. REM-021102-11791.

alleged, among others, that the contracts do not reflect the true intention of the parties; and that it is a mere buyer and not codeveloper and/or co-owner of the condominium unit.

After

considering

their

respective

memoranda,

HLURB

Arbiter Atty. Dunstan T. San Vicente, with the approval of HLURB Regional Director Jesse A. Obligacion, issued an Order dated May 14, 2002, the dispositive portion of which reads:

Accordingly, respondents plea for the outright dismissal of the present case is denied. Set the initial preliminary hearing of this case on June 25, 2002 at 10:00 A.M.

IT IS SO ORDERED.

Respondents then filed with the Court of Appeals a petition for prohibition with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction, docketed as CA-G.R. SP No. 71389. Petitioner claimed, among others, that the HLURB has no jurisdiction over the subject matter of the controversy and that the contracts between the parties provide for compulsory arbitration.

On December 2, 2002, the Court of Appeals rendered its Decision granting the petition, thus:

WHEREFORE, premises considered, the petition is GRANTED. Public respondents Atty. Dunstan San Vicente and Jesse A. Obligacion of the Housing and Land Use Regulatory Board, Expanded National Capital Region Field Office are hereby permanently ENJOINED and PROHIBITED from further proceeding with and acting on HLURB Case No. REM-021102-11791. The order of May 14, 2002 is hereby SET ASIDE and the complaint is DISMISSED. SO ORDERED.

In dismissing petitioners complaint, the Court of Appeals held that the HLURB has no jurisdiction over an action for reformation of contracts. Trial Court. The jurisdiction lies with the Regional

Forthwith, petitioner filed a motion for reconsideration but it was denied by the appellate court in its Resolution dated May 30, 2003.

Hence, the instant petition for review on certiorari.

The issues for our resolution are: (1) whether the HLURB has jurisdiction over the complaint for reformation of instruments, specific performance and damages; and (2) whether the parties should initially resort to arbitration.

The petition lacks merit.

As the records show, the complaint filed by petitioner with the HLURB is one for reformation of instruments. Petitioner claimed that the terms of the contract are not clear and prayed that they should be reformed to reflect the true stipulations of the parties. Petitioner prayed:

WHEREFORE, in view of all the foregoing, it is respectfully prayed of this Honorable Office that after due notice and hearing, a judgment be please rendered:

1. Declaring that the instruments executed by the complainant FRABELLE and respondent PHILAM to have been in fact a Contract to Sell. The parties are thereby governed by the provisions of P.D. 957 entitled, Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for Violations Thereof as

buyer and developer, respectively, of a condominium unit and not as co-developer and/or co-owner of the same;

x x x (Emphasis supplied)

We hold that being an action for reformation of instruments, petitioners complaint necessarily falls under the jurisdiction of the Regional Trial Court pursuant to Section 1, Rule 63 of the 1997 Rules of Civil Procedure, as amended, which provides:
SECTION 1. Who may file petition. Any person interested under a deed, will, contract or other written instrument, whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties thereunder. An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule. (Emphasis ours)

As correctly held by the Court of Appeals, any disagreement as to the nature of the parties relationship which would require first an amendment or reformation of their contract is an issue which the courts may and can resolve without the need of the expertise and specialized knowledge of the HLURB.

With regard to the second and last issue, paragraph 4.2 of the 1998 MOA mandates that any dispute between or among the parties shall finally be settled by arbitration conducted in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. Petitioner referred the dispute to the PDRCI but respondents refused to submit to its jurisdiction.

It bears stressing that such arbitration agreement is the law between the parties. They are, therefore, expected to abide by it in good faith.

This Court has previously held that arbitration is one of the alternative methods of dispute resolution that is now rightfully vaunted as the wave of the future in international relations, and is recognized worldwide. To brush aside a contractual agreement calling for arbitration in case of disagreement between the parties would therefore be a step backward.

WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 71389 are AFFIRMED.

Costs against petitioner.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief Justice Chairperson

RENATO C. CORONA Associate Justice

ADOLFO S. AZCUNA Associate Justice

CANCIO C. GARCIA Associate Justice CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice

Penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by Associate Justice Ruben T. Reyes (now a member of this Court) and Associate Justice Edgardo F. Sundiam. Annex 1 of the petition, rollo, pp. 207-215. Annex 2 of the petition, id., pp. 216-223. Paragraph 2 of the 1996 DOA reads, Upon the effectivity and subject to the stipulations of this Assignment, the Assignee shall be deemed as a co-developer of the Project to the extent of the Assigned Office Space and Assigned Slots, and in such capacity shall have all the rights and obligations of a co-developer under the MOA, including but not limited to the

obligation of providing funds to finance the cost of construction of the Assigned Office Space and Assigned Slots, and the right of receiving the Assigned Office Space and Assigned Slots upon completion of construction thereof. Annex 3 of the petition, rollo, pp. 224-243. Id., pp. 314-318. Id., p. 319. Annex A of the petition, id., pp. 36-50. Annex G of the petition, id., pp. 179-183. Annex H of the petition, id., pp. 184-211. Annex K of the petition, id., pp. 260-270. Annex L of the petition, id., pp. 271-289. Id., pp. 293-294. Annex 3, supra at 228. Fiesta World Mall Corporation v. Linberg Philippines, Inc., G.R. No. 152471, August 18, 2006, 499 SCRA 332, 338, citing LM Power Engineering Corporation v. Capitol Industrial Construction Groups, Inc., 399 SCRA 562 (2003). Sea-Land Service, Inc. v. Court of Appeals, G.R. No. 126212, March 2, 2000, 327 SCRA 135, citing BF Corporation v. Court of Appeals, 288 SCRA 267, 286 (1998).

Republic of the Philippines SUPREME COURT Manila

SECOND DIVISION

KOREA TECHNOLOGIES CO., LTD.,

G.R. No. 143581

Petitioner, Present:

- versus -

QUISUMBING, J., Chairperson, CARPIO, CARPIO MORALES,

HON. ALBERTO A. LERMA, in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION, Respondents.

TINGA, and VELASCO, JR., JJ.

Promulgated:

January 7, 2008

x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

In our jurisdiction, the policy is to favor alternative methods of resolving disputes, particularly in civil and commercial disputes. Arbitration along with mediation, conciliation, and negotiation, being inexpensive, speedy and less hostile methods have long been favored by this Court. The petition before us puts at issue an arbitration clause in a contract mutually agreed upon by the parties stipulating that they would submit themselves to arbitration in a foreign country. Regrettably, instead of hastening the resolution of their dispute, the parties wittingly or unwittingly prolonged the controversy.

Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.

On March 5, 1997, PGSMC and KOGIES executed a Contract whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The contract was executed in the Philippines. On April 7, 1997, the parties executed, in Korea, an Amendment for Contract No. KLP-970301 dated March 5, 1997 amending the terms of payment. The contract and its amendment stipulated that KOGIES will ship the machinery and facilities necessary for manufacturing LPG cylinders for which PGSMC would pay USD 1,224,000. KOGIES would install and initiate the operation of the plant for which PGSMC bound itself to pay USD 306,000 upon the plants production of the 11-kg. LPG cylinder samples. Thus, the total contract price amounted to USD 1,530,000.

On October 14, 1997, PGSMC entered into a Contract of Lease with Worth Properties, Inc. (Worth) for use of Worths 5,079-square meter property with a 4,032-square meter warehouse building to house the LPG manufacturing plant. The monthly rental was PhP 322,560 commencing on January 1, 1998 with a 10% annual increment clause. Subsequently, the machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. PGSMC paid KOGIES USD 1,224,000.

However, gleaned from the Certificate executed by the parties on January 22, 1998, after the installation of the plant, the initial operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the parties to agree that KOGIES would be deemed to have completely complied with the terms and conditions of the March 5, 1997 contract.

For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks: (1) BPI Check No. 0316412 dated January 30, 1998 for PhP 4,500,000; and (2) BPI Check No. 0316413 dated March 30, 1998 for PhP 4,500,000.

When KOGIES deposited the checks, these were dishonored for the reason PAYMENT STOPPED. Thus, on May 8, 1998, KOGIES sent a demand letter to PGSMC threatening criminal action for violation of Batas Pambansa Blg. 22 in

case of nonpayment. On the same date, the wife of PGSMCs President faxed a letter dated May 7, 1998 to KOGIES President who was then staying at a Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for.

On May 14, 1998, PGSMC replied that the two checks it issued KOGIES were fully funded but the payments were stopped for reasons previously made known to KOGIES.

On June 1, 1998, PGSMC informed KOGIES that PGSMC was canceling their Contract dated March 5, 1997 on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, equipment, and facilities installed in the Carmona plant. Five days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-Complaint for Estafa docketed as I.S. No. 98-03813 against Mr. Dae Hyun Kang, President of KOGIES.

On June 15, 1998, KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract.

On June 23, 1998, PGSMC again wrote KOGIES reiterating the contents of its June 1, 1998 letter threatening that the machineries, equipment, and facilities installed in the plant would be dismantled and transferred on July 4, 1998. Thus, on July 1, 1998, KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the Contract as amended.

On July 3, 1998, KOGIES filed a Complaint for Specific Performance, docketed as Civil Case No. 98-117 against PGSMC before the Muntinlupa City Regional Trial Court (RTC). The RTC granted a temporary restraining order (TRO) on July 4, 1998, which was subsequently extended until July 22, 1998. In its complaint, KOGIES alleged that PGSMC had initially admitted that the checks that were stopped were not funded but later on claimed that it stopped payment of the checks for the reason that their value was not received as the former allegedly breached their contract by altering the quantity and lowering the quality of the machinery and equipment installed in the plant and failed to make the plant operational although it earlier certified to the contrary as shown in a January 22, 1998 Certificate. Likewise, KOGIES averred that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration. KOGIES also asked that PGSMC be restrained from dismantling and transferring the machinery and equipment installed in the plant which the latter threatened to do on July 4, 1998.

On July 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO since Art. 15, the arbitration clause, was null and void for being against public policy as it ousts the local courts of jurisdiction over the instant controversy.

On July 17, 1998, PGSMC filed its Answer with Compulsory Counterclaim asserting that it had the full right to dismantle and transfer the machineries and equipment because it had paid for them in full as stipulated in the contract; that KOGIES was not entitled to the PhP 9,000,000 covered by the checks for failing to completely install and make the plant operational; and that KOGIES was liable for damages amounting to PhP 4,500,000 for altering the quantity and lowering the quality of the machineries and equipment. Moreover, PGSMC averred that it has already paid PhP 2,257,920 in rent (covering January to July 1998) to Worth and it was not willing to further shoulder the cost of renting the premises of the plant considering that the LPG cylinder manufacturing plant never became operational.

After the parties submitted their Memoranda, on July 23, 1998, the RTC issued an Order denying the application for a writ of preliminary injunction, reasoning that PGSMC had paid KOGIES USD 1,224,000, the value of the machineries and equipment as shown in the contract such that KOGIES no longer had proprietary rights over them. And finally, the RTC held that Art. 15 of the Contract as amended was invalid as it tended to oust the trial court or any other court jurisdiction over any dispute that may arise between the parties. KOGIES

prayer for an injunctive writ was denied. The dispositive portion of the Order stated:

WHEREFORE, in view of the foregoing consideration, this Court believes and so holds that no cogent reason exists for this Court to grant the writ of preliminary injunction to restrain and refrain defendant from dismantling the machineries and facilities at the lot and building of Worth Properties, Incorporated at Carmona, Cavite and transfer the same to another site: and therefore denies plaintiffs application for a writ of preliminary injunction.

On July 29, 1998, KOGIES filed its Reply to Answer and Answer to Counterclaim. KOGIES denied it had altered the quantity and lowered the quality of the machinery, equipment, and facilities it delivered to the plant. It claimed that it had performed all the undertakings under the contract and had already produced certified samples of LPG cylinders. It averred that whatever was unfinished was PGSMCs fault since it failed to procure raw materials due to lack of funds. KOGIES, relying on Chung Fu Industries (Phils.), Inc. v. Court of Appeals, insisted that the arbitration clause was without question valid.

After KOGIES filed a Supplemental Memorandum with Motion to Dismiss answering PGSMCs memorandum of July 22, 1998 and seeking dismissal of PGSMCs counterclaims, KOGIES, on August 4, 1998, filed its Motion for Reconsideration of the July 23, 1998 Order denying its application for an

injunctive writ claiming that the contract was not merely for machinery and facilities worth USD 1,224,000 but was for the sale of an LPG manufacturing plant consisting of supply of all the machinery and facilities and transfer of technology for a total contract price of USD 1,530,000 such that the dismantling and transfer of the machinery and facilities would result in the dismantling and transfer of the very plant itself to the great prejudice of KOGIES as the still unpaid owner/seller of the plant. Moreover, KOGIES points out that the arbitration clause under Art. 15 of the Contract as amended was a valid arbitration stipulation under Art. 2044 of the Civil Code and as held by this Court in Chung Fu Industries (Phils.), Inc.

In the meantime, PGSMC filed a Motion for Inspection of Things to determine whether there was indeed alteration of the quantity and lowering of quality of the machineries and equipment, and whether these were properly installed. KOGIES opposed the motion positing that the queries and issues raised in the motion for inspection fell under the coverage of the arbitration clause in their contract.

On September 21, 1998, the trial court issued an Order (1) granting PGSMCs motion for inspection; (2) denying KOGIES motion for reconsideration of the July 23, 1998 RTC Order; and (3) denying KOGIES motion to dismiss PGSMCs compulsory counterclaims as these counterclaims fell within the requisites of compulsory counterclaims.

On October 2, 1998, KOGIES filed an Urgent Motion for Reconsideration of the September 21, 1998 RTC Order granting inspection of the plant and denying dismissal of PGSMCs compulsory counterclaims.

Ten days after, on October 12, 1998, without waiting for the resolution of its October 2, 1998 urgent motion for reconsideration, KOGIES filed before the Court of Appeals (CA) a petition for certiorari docketed as CA-G.R. SP No. 49249, seeking annulment of the July 23, 1998 and September 21, 1998 RTC Orders and praying for the issuance of writs of prohibition, mandamus, and preliminary injunction to enjoin the RTC and PGSMC from inspecting, dismantling, and transferring the machineries and equipment in the Carmona plant, and to direct the RTC to enforce the specific agreement on arbitration to resolve the dispute.

In the meantime, on October 19, 1998, the RTC denied KOGIES urgent motion for reconsideration and directed the Branch Sheriff to proceed with the inspection of the machineries and equipment in the plant on October 28, 1998.

Thereafter, KOGIES filed a Supplement to the Petition in CA-G.R. SP No. 49249 informing the CA about the October 19, 1998 RTC Order. It also reiterated its prayer for the issuance of the writs of prohibition, mandamus and preliminary injunction which was not acted upon by the CA. KOGIES asserted that the Branch Sheriff did not have the technical expertise to ascertain whether or not the

machineries and equipment conformed to the specifications in the contract and were properly installed.

On November 11, 1998, the Branch Sheriff filed his Sheriffs Report finding that the enumerated machineries and equipment were not fully and properly installed.

The Court of Appeals affirmed the trial court and declared the arbitration clause against public policy

On May 30, 2000, the CA rendered the assailed Decision affirming the RTC Orders and dismissing the petition for certiorari filed by KOGIES. The CA found that the RTC did not gravely abuse its discretion in issuing the assailed July 23, 1998 and September 21, 1998 Orders. Moreover, the CA reasoned that KOGIES contention that the total contract price for USD 1,530,000 was for the whole plant and had not been fully paid was contrary to the finding of the RTC that PGSMC fully paid the price of USD 1,224,000, which was for all the machineries and equipment. According to the CA, this determination by the RTC was a factual finding beyond the ambit of a petition for certiorari.

On the issue of the validity of the arbitration clause, the CA agreed with the lower court that an arbitration clause which provided for a final determination of the legal rights of the parties to the contract by arbitration was against public policy.

On the issue of nonpayment of docket fees and non-attachment of a certificate of non-forum shopping by PGSMC, the CA held that the counterclaims of PGSMC were compulsory ones and payment of docket fees was not required since the Answer with counterclaim was not an initiatory pleading. For the same reason, the CA said a certificate of non-forum shopping was also not required.

Furthermore, the CA held that the petition for certiorari had been filed prematurely since KOGIES did not wait for the resolution of its urgent motion for reconsideration of the September 21, 1998 RTC Order which was the plain, speedy, and adequate remedy available. According to the CA, the RTC must be given the opportunity to correct any alleged error it has committed, and that since the assailed orders were interlocutory, these cannot be the subject of a petition for certiorari.

Hence, we have this Petition for Review on Certiorari under Rule 45.

The Issues

Petitioner posits that the appellate court committed the following errors:
a. PRONOUNCING THE QUESTION OF OWNERSHIP OVER THE MACHINERY AND FACILITIES AS A QUESTION OF FACT BEYOND THE AMBIT OF A PETITION FOR CERTIORARI INTENDED ONLY FOR CORRECTION OF ERRORS OF JURISDICTION OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF JURISDICTION, AND CONCLUDING THAT THE TRIAL COURTS FINDING ON THE SAME QUESTION WAS IMPROPERLY RAISED IN THE PETITION BELOW; b. DECLARING AS NULL AND VOID THE ARBITRATION CLAUSE IN ARTICLE 15 OF THE CONTRACT BETWEEN THE PARTIES FOR BEING CONTRARY TO PUBLIC POLICY AND FOR OUSTING THE COURTS OF JURISDICTION; c. DECREEING PRIVATE RESPONDENTS COUNTERCLAIMS TO BE ALL COMPULSORY NOT NECESSITATING PAYMENT OF DOCKET FEES AND CERTIFICATION OF NON-FORUM SHOPPING; d. RULING THAT THE PETITION WAS FILED PREMATURELY WITHOUT WAITING FOR THE RESOLUTION OF THE MOTION FOR RECONSIDERATION OF THE ORDER DATED SEPTEMBER 21, 1998 OR WITHOUT GIVING THE TRIAL COURT AN OPPORTUNITY TO CORRECT ITSELF; e. PROCLAIMING THE TWO ORDERS DATED JULY 23 AND SEPTEMBER 21, 1998 NOT TO BE PROPER SUBJECTS OF CERTIORARI AND PROHIBITION FOR BEING INTERLOCUTORY IN NATURE; f. NOT GRANTING THE RELIEFS AND REMEDIES PRAYED FOR IN HE (SIC) PETITION AND, INSTEAD, DISMISSING THE SAME FOR ALLEGEDLY WITHOUT MERIT.

The Courts Ruling

The petition is partly meritorious.

Before we delve into the substantive issues, we shall first tackle the procedural issues.

The rules on the payment of docket fees for counterclaims and cross claims were amended effective August 16, 2004

KOGIES strongly argues that when PGSMC filed the counterclaims, it should have paid docket fees and filed a certificate of non-forum shopping, and that its failure to do so was a fatal defect.

We disagree with KOGIES.

As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim dated July 17, 1998 in accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the time the Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states, A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein.

On July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaims being compulsory in nature. We stress, however, that effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or crossclaims.

As to the failure to submit a certificate of forum shopping, PGSMCs Answer is not an initiatory pleading which requires a certification against forum shopping under Sec. 5 of Rule 7, 1997 Revised Rules of Civil Procedure. It is a responsive pleading, hence, the courts a quo did not commit reversible error in denying KOGIES motion to dismiss PGSMCs compulsory counterclaims.

Interlocutory orders proper subject of certiorari

Citing Gamboa v. Cruz, the CA also pronounced that certiorari and Prohibition are neither the remedies to question the propriety of an interlocutory order of the trial court. The CA erred on its reliance on Gamboa. Gamboa involved the denial of a motion to acquit in a criminal case which was not assailable in an action for certiorari since the denial of a motion to quash required the accused to plead and to continue with the trial, and whatever objections the

accused had in his motion to quash can then be used as part of his defense and subsequently can be raised as errors on his appeal if the judgment of the trial court is adverse to him. The general rule is that interlocutory orders cannot be challenged by an appeal. Thus, in Yamaoka v. Pescarich Manufacturing Corporation, we held:

The proper remedy in such cases is an ordinary appeal from an adverse judgment on the merits, incorporating in said appeal the grounds for assailing the interlocutory orders. Allowing appeals from interlocutory orders would result in the sorry spectacle of a case being subject of a counterproductive ping-pong to and from the appellate court as often as a trial court is perceived to have made an error in any of its interlocutory rulings. However, where the assailed interlocutory order was issued with grave abuse of discretion or patently erroneous and the remedy of appeal would not afford adequate and expeditious relief, the Court allows certiorari as a mode of redress.

Also, appeals from interlocutory orders would open the floodgates to endless occasions for dilatory motions. Thus, where the interlocutory order was issued without or in excess of jurisdiction or with grave abuse of discretion, the remedy is certiorari.

The alleged grave abuse of discretion of the respondent court equivalent to lack of jurisdiction in the issuance of the two assailed orders coupled with the fact that there is no plain, speedy, and adequate remedy in the ordinary course of law amply provides the basis for allowing the resort to a petition for certiorari under Rule 65.

Prematurity of the petition before the CA

Neither do we think that KOGIES was guilty of forum shopping in filing the petition for certiorari. Note that KOGIES motion for reconsideration of the July 23, 1998 RTC Order which denied the issuance of the injunctive writ had already been denied. Thus, KOGIES only remedy was to assail the RTCs interlocutory order via a petition for certiorari under Rule 65.

While the October 2, 1998 motion for reconsideration of KOGIES of the September 21, 1998 RTC Order relating to the inspection of things, and the allowance of the compulsory counterclaims has not yet been resolved, the circumstances in this case would allow an exception to the rule that before certiorari may be availed of, the petitioner must have filed a motion for reconsideration and said motion should have been first resolved by the court a quo. The reason behind the rule is to enable the lower court, in the first instance, to pass upon and correct its mistakes without the intervention of the higher court.

The September 21, 1998 RTC Order directing the branch sheriff to inspect the plant, equipment, and facilities when he is not competent and knowledgeable on said matters is evidently flawed and devoid of any legal support. Moreover, there is an urgent necessity to resolve the issue on the dismantling of the facilities and any further delay would prejudice the interests of KOGIES. Indeed, there is

real and imminent threat of irreparable destruction or substantial damage to KOGIES equipment and machineries. We find the resort to certiorari based on the gravely abusive orders of the trial court sans the ruling on the October 2, 1998 motion for reconsideration to be proper.

The Core Issue: Article 15 of the Contract

We now go to the core issue of the validity of Art. 15 of the Contract, the arbitration clause. It provides:

Article 15. Arbitration.All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this Contract or for the breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award rendered by the arbitration(s) shall be final and binding upon both parties concerned. (Emphasis supplied.)

Petitioner claims the RTC and the CA erred in ruling that the arbitration clause is null and void.

Petitioner is correct.

Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus. The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044 provides, Any stipulation that the arbitrators award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040. (Emphasis supplied.)

Arts. 2038, 2039, and 2040 abovecited refer to instances where a compromise or an arbitral award, as applied to Art. 2044 pursuant to Art. 2043, may be voided, rescinded, or annulled, but these would not denigrate the finality of the arbitral award.

The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been shown to be contrary to any law, or against morals, good customs, public order, or public policy. There has been no showing that the parties have not dealt with each other on equal footing. We find no reason why the arbitration clause should not be respected and complied with by both parties. In Gonzales v. Climax Mining Ltd., we held that submission to arbitration is a contract and that a clause in a contract providing that all matters in dispute between the parties shall be referred to arbitration is a contract. Again in Del Monte Corporation-USA v. Court of Appeals, we likewise ruled that [t]he provision to

submit to arbitration any dispute arising therefrom and the relationship of the parties is part of that contract and is itself a contract.

Arbitration clause not contrary to public policy

The arbitration clause which stipulates that the arbitration must be done in Seoul, Korea in accordance with the Commercial Arbitration Rules of the KCAB, and that the arbitral award is final and binding, is not contrary to public policy. This Court has sanctioned the validity of arbitration clauses in a catena of cases. In the 1957 case of Eastboard Navigation Ltd. v. Juan Ysmael and Co., Inc., this Court had occasion to rule that an arbitration clause to resolve differences and breaches of mutually agreed contractual terms is valid. In BF Corporation v. Court of Appeals, we held that [i]n this jurisdiction, arbitration has been held valid and constitutional. Even before the approval on June 19, 1953 of Republic Act No. 876, this Court has countenanced the settlement of disputes through arbitration. Republic Act No. 876 was adopted to supplement the New Civil Codes provisions on arbitration. And in LM Power Engineering Corporation v. Capitol Industrial Construction Groups, Inc., we declared that:

Being an inexpensive, speedy and amicable method of settling disputes, arbitrationalong with mediation, conciliation and negotiationis encouraged by the Supreme Court. Aside from unclogging judicial dockets, arbitration also hastens the resolution of disputes, especially of the commercial kind. It is thus regarded as the wave of the future in international civil and commercial disputes. Brushing aside a contractual agreement calling for arbitration between the parties would be a step backward.

Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration.

Having said that the instant arbitration clause is not against public policy, we come to the question on what governs an arbitration clause specifying that in case of any dispute arising from the contract, an arbitral panel will be constituted in a foreign country and the arbitration rules of the foreign country would govern and its award shall be final and binding.

RA 9285 incorporated the UNCITRAL Model law to which we are a signatory

For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004 entitled

An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes, promulgated on April 2, 2004. Secs. 19 and 20 of Chapter 4 of the Model Law are the pertinent provisions:

CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATION SEC. 19. Adoption of the Model Law on International Commercial Arbitration.International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the Model Law) adopted by the United Nations Commission on International Trade Law on June 21, 1985 (United Nations Document A/40/17) and recommended for enactment by the General Assembly in Resolution No. 40/72 approved on December 11, 1985, copy of which is hereto attached as Appendix A. SEC. 20. Interpretation of Model Law.In interpreting the Model Law, regard shall be had to its international origin and to the need for uniformity in its interpretation and resort may be made to the travaux preparatories and the report of the Secretary General of the United Nations Commission on International Trade Law dated March 25, 1985 entitled, International Commercial Arbitration: Analytical Commentary on Draft Trade identified by reference number A/CN. 9/264.

While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law which has a retroactive effect. Likewise, KOGIES filed its application for arbitration before the KCAB on July 1, 1998 and it is still pending because no arbitral award has yet been rendered. Thus, RA 9285 is applicable to the instant case. Well-settled is the rule that procedural laws are construed to be applicable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that sense and to that extent. As a general

rule, the retroactive application of procedural laws does not violate any personal rights because no vested right has yet attached nor arisen from them.

Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following:

(1)

The RTC must refer to arbitration in proper cases

Under Sec. 24, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause, and mandates the referral to arbitration in such cases, thus:

SEC. 24. Referral to Arbitration.A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later than the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.

(2)

Foreign arbitral awards must be confirmed by the RTC

Foreign arbitral awards while mutually stipulated by the parties in the arbitration clause to be final and binding are not immediately enforceable or cannot be implemented immediately. Sec. 35 of the UNCITRAL Model Law stipulates the requirement for the arbitral award to be recognized by a competent court for enforcement, which court under Sec. 36 of the UNCITRAL Model Law may refuse recognition or enforcement on the grounds provided for. RA 9285 incorporated these provisos to Secs. 42, 43, and 44 relative to Secs. 47 and 48, thus:

SEC. 42. Application of the New York Convention.The New York Convention shall govern the recognition and enforcement of arbitral awards covered by said Convention. The recognition and enforcement of such arbitral awards shall be filed with the Regional Trial Court in accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages. The applicant shall establish that the country in which foreign arbitration award was made in party to the New York Convention. xxxx SEC. 43. Recognition and Enforcement of Foreign Arbitral Awards Not Covered by the New York Convention.The recognition and enforcement of foreign arbitral awards not covered by the New York Convention shall be done in accordance with procedural rules to be promulgated by the Supreme Court. The Court may, on grounds of comity and reciprocity, recognize and enforce a nonconvention award as a convention award. SEC. 44. Foreign Arbitral Award Not Foreign Judgment.A foreign arbitral award when confirmed by a court of a foreign country, shall be recognized and enforced as a foreign arbitral award and not as a judgment of a foreign court.

A foreign arbitral award, when confirmed by the Regional Trial Court, shall be enforced in the same manner as final and executory decisions of courts of law of the Philippines xxxx SEC. 47. Venue and Jurisdiction.Proceedings for recognition and enforcement of an arbitration agreement or for vacations, setting aside, correction or modification of an arbitral award, and any application with a court for arbitration assistance and supervision shall be deemed as special proceedings and shall be filed with the Regional Trial Court (i) where arbitration proceedings are conducted; (ii) where the asset to be attached or levied upon, or the act to be enjoined is located; (iii) where any of the parties to the dispute resides or has his place of business; or (iv) in the National Judicial Capital Region, at the option of the applicant. SEC. 48. Notice of Proceeding to Parties.In a special proceeding for recognition and enforcement of an arbitral award, the Court shall send notice to the parties at their address of record in the arbitration, or if any part cannot be served notice at such address, at such partys last known address. The notice shall be sent al least fifteen (15) days before the date set for the initial hearing of the application.

It is now clear that foreign arbitral awards when confirmed by the RTC are deemed not as a judgment of a foreign court but as a foreign arbitral award, and when confirmed, are enforced as final and executory decisions of our courts of law.

Thus, it can be gleaned that the concept of a final and binding arbitral award is similar to judgments or awards given by some of our quasi-judicial bodies, like the National Labor Relations Commission and Mines Adjudication Board, whose final judgments are stipulated to be final and binding, but not immediately executory in the sense that they may still be judicially reviewed, upon the instance of any party. Therefore, the final foreign arbitral awards are similarly situated in that they need first to be confirmed by the RTC.

(3)

The RTC has jurisdiction to review foreign arbitral awards

Sec. 42 in relation to Sec. 45 of RA 9285 designated and vested the RTC with specific authority and jurisdiction to set aside, reject, or vacate a foreign arbitral award on grounds provided under Art. 34(2) of the UNCITRAL Model Law. Secs. 42 and 45 provide:

SEC. 42. Application of the New York Convention.The New York Convention shall govern the recognition and enforcement of arbitral awards covered by said Convention. The recognition and enforcement of such arbitral awards shall be filed with the Regional Trial Court in accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages. The applicant shall establish that the country in which foreign arbitration award was made is party to the New York Convention. If the application for rejection or suspension of enforcement of an award has been made, the Regional Trial Court may, if it considers it proper, vacate its decision and may also, on the application of the party claiming recognition or enforcement of the award, order the party to provide appropriate security.

xxxx SEC. 45. Rejection of a Foreign Arbitral Award.A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedures and rules to be promulgated by the Supreme Court only on those grounds enumerated under

Article V of the New York Convention. Any other ground raised shall be disregarded by the Regional Trial Court.

Thus, while the RTC does not have jurisdiction over disputes governed by arbitration mutually agreed upon by the parties, still the foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or vacate it. In this sense, what this Court held in Chung Fu Industries (Phils.), Inc. relied upon by KOGIES is applicable insofar as the foreign arbitral awards, while final and binding, do not oust courts of jurisdiction since these arbitral awards are not absolute and without exceptions as they are still judicially reviewable. Chapter 7 of RA 9285 has made it clear that all arbitral awards, whether domestic or foreign, are subject to judicial review on specific grounds provided for. (4) Grounds for judicial review different in domestic and foreign arbitral awards

The differences between a final arbitral award from an international or foreign arbitral tribunal and an award given by a local arbitral tribunal are the specific grounds or conditions that vest jurisdiction over our courts to review the awards.

For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law.

For final domestic arbitral awards, which also need confirmation by the RTC pursuant to Sec. 23 of RA 876 and shall be recognized as final and executory decisions of the RTC, they may only be assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876.

(5)

RTC decision of assailed foreign arbitral award appealable

Sec. 46 of RA 9285 provides for an appeal before the CA as the remedy of an aggrieved party in cases where the RTC sets aside, rejects, vacates, modifies, or corrects an arbitral award, thus:

SEC. 46. Appeal from Court Decision or Arbitral Awards.A decision of the Regional Trial Court confirming, vacating, setting aside, modifying or correcting an arbitral award may be appealed to the Court of Appeals in accordance with the rules and procedure to be promulgated by the Supreme Court. The losing party who appeals from the judgment of the court confirming an arbitral award shall be required by the appellate court to post a counterbond executed in favor of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the Supreme Court.

Thereafter, the CA decision may further be appealed or reviewed before this Court through a petition for review under Rule 45 of the Rules of Court. PGSMC has remedies to protect its interests

Thus, based on the foregoing features of RA 9285, PGSMC must submit to the foreign arbitration as it bound itself through the subject contract. While it may have misgivings on the foreign arbitration done in Korea by the KCAB, it has available remedies under RA 9285. Its interests are duly protected by the law which requires that the arbitral award that may be rendered by KCAB must be confirmed here by the RTC before it can be enforced.

With our disquisition above, petitioner is correct in its contention that an arbitration clause, stipulating that the arbitral award is final and binding, does not oust our courts of jurisdiction as the international arbitral award, the award of which is not absolute and without exceptions, is still judicially reviewable under certain conditions provided for by the UNCITRAL Model Law on ICA as applied and incorporated in RA 9285.

Finally, it must be noted that there is nothing in the subject Contract which provides that the parties may dispense with the arbitration clause.

Unilateral rescission improper and illegal

Having ruled that the arbitration clause of the subject contract is valid and binding on the parties, and not contrary to public policy; consequently, being

bound to the contract of arbitration, a party may not unilaterally rescind or terminate the contract for whatever cause without first resorting to arbitration. What this Court held in University of the Philippines v. De Los Angeles and reiterated in succeeding cases, that the act of treating a contract as rescinded on account of infractions by the other contracting party is valid albeit provisional as it can be judicially assailed, is not applicable to the instant case on account of a valid stipulation on arbitration. Where an arbitration clause in a contract is availing, neither of the parties can unilaterally treat the contract as rescinded since whatever infractions or breaches by a party or differences arising from the contract must be brought first and resolved by arbitration, and not through an extrajudicial rescission or judicial action.

The issues arising from the contract between PGSMC and KOGIES on whether the equipment and machineries delivered and installed were properly installed and operational in the plant in Carmona, Cavite; the ownership of equipment and payment of the contract price; and whether there was substantial compliance by KOGIES in the production of the samples, given the alleged fact that PGSMC could not supply the raw materials required to produce the sample LPG cylinders, are matters proper for arbitration. Indeed, we note that on July 1, 1998, KOGIES instituted an Application for Arbitration before the KCAB in Seoul, Korea pursuant to Art. 15 of the Contract as amended. Thus, it is incumbent upon PGSMC to abide by its commitment to arbitrate.

Corollarily, the trial court gravely abused its discretion in granting PGSMCs Motion for Inspection of Things on September 21, 1998, as the subject matter of the motion is under the primary jurisdiction of the mutually agreed arbitral body, the KCAB in Korea. In addition, whatever findings and conclusions made by the RTC Branch Sheriff from the inspection made on October 28, 1998, as ordered by the trial court on October 19, 1998, is of no worth as said Sheriff is not technically competent to ascertain the actual status of the equipment and machineries as installed in the plant.

For these reasons, the September 21, 1998 and October 19, 1998 RTC Orders pertaining to the grant of the inspection of the equipment and machineries have to be recalled and nullified.

Issue on ownership of plant proper for arbitration

Petitioner assails the CA ruling that the issue petitioner raised on whether the total contract price of USD 1,530,000 was for the whole plant and its installation is beyond the ambit of a Petition for Certiorari.

Petitioners position is untenable.

It is settled that questions of fact cannot be raised in an original action for certiorari. Whether or not there was full payment for the machineries and equipment and installation is indeed a factual issue prohibited by Rule 65.

However, what appears to constitute a grave abuse of discretion is the order of the RTC in resolving the issue on the ownership of the plant when it is the arbitral body (KCAB) and not the RTC which has jurisdiction and authority over the said issue. The RTCs determination of such factual issue constitutes grave abuse of discretion and must be reversed and set aside.

RTC has interim jurisdiction to protect the rights of the parties

Anent the July 23, 1998 Order denying the issuance of the injunctive writ paving the way for PGSMC to dismantle and transfer the equipment and machineries, we find it to be in order considering the factual milieu of the instant case.

Firstly, while the issue of the proper installation of the equipment and machineries might well be under the primary jurisdiction of the arbitral body to decide, yet the RTC under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim measures to protect vested rights of the parties. Sec. 28 pertinently provides:

SEC. 28. Grant of interim Measure of Protection .(a) It is not incompatible with an arbitration agreement for a party to request, before constitution of the tribunal, from a Court to grant such measure . After constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection, or modification thereof, may be made with the arbitral or to the extent that the arbitral tribunal has no power to act or is unable to act effectivity, the request may be made with the Court . The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator, who has been nominated, has accepted the nomination and written communication of said nomination and acceptance has been received by the party making the request. (b) The following rules on interim or provisional relief shall be observed: Any party may request that provisional relief be granted against the adverse party. Such relief may be granted: (i) (ii) (iii) (iv) to prevent irreparable loss or injury; to provide security for the performance of any obligation; to produce or preserve any evidence; or to compel any other appropriate act or omission.

(c) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified in the order. (d) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise relief, the party against whom the relief is requested, the grounds for the relief, and the evidence supporting the request. (e) The order shall be binding upon the parties.

(f) Either party may apply with the Court for assistance in implementing or enforcing an interim measure ordered by an arbitral tribunal. (g) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all expenses, and reasonable attorney's fees, paid in obtaining the orders judicial enforcement. (Emphasis ours.)

Art. 17(2) of the UNCITRAL Model Law on ICA defines an interim measure of protection as:

Article 17. Power of arbitral tribunal to order interim measures xxx xxx xxx

(2) An interim measure is any temporary measure, whether in the form of an award or in another form, by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party to: (a) Maintain or restore the status quo pending determination of the dispute; (b) Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself; (c) Provide a means of preserving assets out of which a subsequent award may be satisfied; or (d) Preserve evidence that may be relevant and material to the resolution of the dispute.

Art. 17 J of UNCITRAL Model Law on ICA also grants courts power and jurisdiction to issue interim measures:

Article 17 J. Court-ordered interim measures A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration.

In the recent 2006 case of Transfield Philippines, Inc. v. Luzon Hydro Corporation, we were explicit that even the pendency of an arbitral proceeding does not foreclose resort to the courts for provisional reliefs. We explicated this way:

As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the courts for provisional reliefs. The Rules of the ICC, which governs the parties arbitral dispute, allows the application of a party to a judicial authority for interim or conservatory measures. Likewise, Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to petition the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute in arbitration. In addition, R.A. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, allows the filing of provisional or interim measures with the regular courts whenever the arbitral tribunal has no power to act or to act effectively.

It is thus beyond cavil that the RTC has authority and jurisdiction to grant interim measures of protection.

Secondly, considering that the equipment and machineries are in the possession of PGSMC, it has the right to protect and preserve the equipment and machineries in the best way it can. Considering that the LPG plant was nonoperational, PGSMC has the right to dismantle and transfer the equipment and machineries either for their protection and preservation or for the better way to make good use of them which is ineluctably within the management discretion of PGSMC.

Thirdly, and of greater import is the reason that maintaining the equipment and machineries in Worths property is not to the best interest of PGSMC due to the prohibitive rent while the LPG plant as set-up is not operational. PGSMC was losing PhP322,560 as monthly rentals or PhP3.87M for 1998 alone without considering the 10% annual rent increment in maintaining the plant.

Fourthly, and corollarily, while the KCAB can rule on motions or petitions relating to the preservation or transfer of the equipment and machineries as an interim measure, yet on hindsight, the July 23, 1998 Order of the RTC allowing the transfer of the equipment and machineries given the non-recognition by the lower courts of the arbitral clause, has accorded an interim measure of protection to PGSMC which would otherwise been irreparably damaged.

Fifth, KOGIES is not unjustly prejudiced as it has already been paid a substantial amount based on the contract. Moreover, KOGIES is amply protected by the arbitral action it has instituted before the KCAB, the award of which can be enforced in our jurisdiction through the RTC. Besides, by our decision, PGSMC is compelled to submit to arbitration pursuant to the valid arbitration clause of its contract with KOGIES.

PGSMC to preserve the subject equipment and machineries

Finally, while PGSMC may have been granted the right to dismantle and transfer the subject equipment and machineries, it does not have the right to convey or dispose of the same considering the pending arbitral proceedings to settle the differences of the parties. PGSMC therefore must preserve and maintain the subject equipment and machineries with the diligence of a good father of a family until final resolution of the arbitral proceedings and enforcement of the award, if any.

WHEREFORE, this petition is PARTLY GRANTED, in that:

(1)

The May 30, 2000 CA Decision in CA-G.R. SP No. 49249 is

REVERSED and SET ASIDE;

(2)

The September 21, 1998 and October 19, 1998 RTC Orders in Civil

Case No. 98-117 are REVERSED and SET ASIDE;

(3)

The parties are hereby ORDERED to submit themselves to the

arbitration of their dispute and differences arising from the subject Contract before the KCAB; and

(4)

PGSMC is hereby ALLOWED to dismantle and transfer the

equipment and machineries, if it had not done so, and ORDERED to preserve and maintain them until the finality of whatever arbitral award is given in the arbitration proceedings.

No pronouncement as to costs.

SO ORDERED.

PRESBITERO J. VELASCO, JR. Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING Associate Justice

Chairperson

ANTONIO T. CARPIO Associate Justice

CONCHITA CARPIO MORALES Associate Justice

DANTE O. TINGA Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING

Associate Justice Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice

Id. at 58-65; signed by KOGIES President Dae Hyun Kang and PGSMC President Honorio Santiago. Id. at 94. Id. at 208-218; signed by PGSMC President Honorio Santiago and Worth President Wilson L. Chua. Id. at 95; signed by KOGIES President Dae Hyun Kang and PGSMC President Honorio Santiago.

Id. at 207. Id. at 221. Id. at 222. Id. at 47-51; dated July 1, 1998. Id. at 66-82. Id. at 97. Id. at 83-89. G.R. No. 96283, February 25, 1992, 206 SCRA 545. Rollo, pp. 108-111. Id. at 98-100. Supra note 12. Rollo, pp. 101-105. Id. at 113-115. Id. at 120-146; dated October 9, 1998. Id. at 119. Id. at 116-118. Id. at 266-268. Id. at 40. Penned by Associate Justice Elvi John S. Asuncion and concurred in by Associate Justices Ma. Alicia Austria-Martinez and Portia Alio-Hormachuelos. Id. at 16-17; original in boldface.

SEC. 5. Certification against forum shopping.The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not

theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court where his aforesaid complaint or initiatory pleading has been filed. (Emphasis supplied.)

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions. G.R. No. L-56291, June 27, 1988, 162 SCRA 642. Rollo, p. 45. La Tondea Distillers, Inc. v. Ponferrada, G.R. No. 109656, November 21, 1996, 264 SCRA 540; Mendoza v. Court of Appeals, G.R. No. 81909, September 5, 1991, 201 SCRA 343; MB Finance Corporation v. Abesamis, G.R. No. 93875, March 22, 1991, 195 SCRA 592; Quisumbing v. Gumban, G.R. No. 85156, February 5, 1991, 193 SCRA 520. G.R. No. 146079, July 20, 2001, 361 SCRA 672, 680-681, citing Go v. Court of Appeals, G.R. No. 128954, October 8, 1998, 297 SCRA 574. I Regalado, REMEDIAL LAW COMPENDIUM 502 (2002). Id. at 721 (8th rev. ed.). Art. 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence, or falsity of documents is subject to the provisions of Article 1330 [voidable] of this Code. However, one of the parties cannot set up a mistake of fact as against the other if the latter, by virtue of the compromise, has withdrawn from a litigation already commenced. Art. 2039. When the parties compromise generally on all differences which they might have with each other, the discovery of documents referring to one or more but not to all of the questions settled shall not itself be a cause for annulment or rescission of the compromise, unless said documents have been concealed by one of the parties.

But the compromise may be annulled or rescinded if it refers only to one thing to which one of the parties has no right, as shown by the newly-discovered documents. Art. 2040. If after a litigation has been decided by a final judgment, a compromise should be agreed upon, either or both parties being unaware of the existence of the final judgment, the compromise may be rescinded. Ignorance of a judgment which may be revoked or set aside is not a valid ground for attacking a compromise. Art. 2043. The provisions of the preceding Chapter upon compromises shall also be applicable to arbitrations. G.R. No. 161957 and G.R. No. 167994, January 22, 2007, 512 SCRA 148; citing Manila Electric Co. v. Pasay Transportation Co., 57 Phil. 600 (1932). Id. at 603. G.R. No. 136154, February 7, 2001, 351 SCRA 373, 381. 102 Phil. 1 (1957). G.R. No. 120105, March 27, 1998, 288 SCRA 267, 286. G.R. No. 141833, March 26, 2003, 399 SCRA 562, 569-570; citations omitted. Adopted by the UNCITRAL on June 21, 1985 (United Nations Document A/40/17) and recommended for enactment by the General Assembly in Resolution No. 40/72, approved on 11 December 1985. Subsequently amended on July 7, 2006. In the Matter to Declare in Contempt of Court Hon. Simeon A. Datumanong, Secretary of DPWH, G.R. No. 150274, August 4, 2006, 497 SCRA 626, 636-637; citing Calacala v. Republic, G.R. No. 154415, July 28, 2005, 464 SCRA 438, 446. Id. Art. 35(1) provides: Article 35. Recognition and enforcement (1) An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of this article and of article 36. An Act to Authorize the Making of Arbitration and Submission Agreements, to Provide for the Appointment of Arbitrators and the Procedure for Arbitration in Civil Controversies, and for Other Purposes (1953).

RA 9285, Sec. 40. Id., Sec. 41. G.R. No. L-28602, September 29, 1970, 35 SCRA 102. See Lorenzo Shipping Corp. v. BJ Marthel International, Inc. , G.R. No. 145483. November 19, 2004, 443 SCRA 163; Subic Bay Metropolitan Authority v. Universal International Group of Taiwan, G.R. No. 131680, September 14, 2000, 340 SCRA 359; Philippine National Construction Corp. v. Mars Construction Enterprises, Inc ., G.R. No. 133909, February 15, 2000, 325 SCRA 624; Cheng v. Genato, G.R. No. 129760, December 29, 1998, 300 SCRA 722; Goldenrod, Inc. v. Court of Appeals, G.R. No. 126812, November 24, 1998, 299 SCRA 141; Adelfa Properties, Inc. v. Court of Appeals, G.R. No. 111238, January 25, 1995; 240 SCRA 565; Bowe v. Court of Appeals, G.R. No. 95771, March 19, 1993, 220 SCRA 158; Lim v. Court of Appeals, G.R. No. 85733, February 23, 1990, 182 SCRA 564. Suarez v. NLRC, G.R. No. 124723, July 31, 1998, 293 SCRA 496, 502. G.R. No. 146717, May 19, 2006, 490 SCRA 14, 20-21.

Cf. Article 1173 of the Civil Code. EN BANC [G.R. No. 151445. April 11, 2002] ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners, vs. HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCY GLORIA MACAPAGAL-ARROYO, and HONORABLE ANGELO REYES in his capacity as Secretary of National Defense, respondents.

SANLAKAS and PARTIDO NG MANGGAGAWA, petitioners-intervenors, vs. GLORIA MACAPAGAL-ARROYO, ALBERTO ROMULO, ANGELO REYES, respondents.
DECISION DE LEON, JR., J.: This case involves a petition for certiorari and prohibition as well as a petition-in-intervention, praying that respondents be restrained from proceeding with the so-called Balikatan 02-1 and that after due notice and hearing, that judgment be rendered issuing a permanent writ of injunction and/or prohibition against the deployment of U.S. troops in Basilan and Mindanao for being illegal and in violation of the Constitution.

The facts are as follows: Beginning January of this year 2002, personnel from the armed forces of the United States of America started arriving in Mindanao to take part, in conjunction with the Philippine military, in Balikatan 02-1. These so-called Balikatan exercises are the largest combined training operations involving Filipino and American troops. In theory, they are a simulation of joint military maneuvers pursuant to the Mutual Defense Treaty, a bilateral defense agreement entered into by the Philippines and the United States in 1951. Prior to the year 2002, the last Balikatan was held in 1995. This was due to the paucity of any formal agreement relative to the treatment of United States personnel visiting the Philippines. In the meantime, the respective governments of the two countries agreed to hold joint exercises on a reduced scale. The lack of consensus was eventually cured when the two nations concluded the Visiting Forces Agreement (VFA) in 1999. The entry of American troops into Philippine soil is proximately rooted in the international antiterrorism campaign declared by President George W. Bush in reaction to the tragic events that occurred on September 11, 2001. On that day, three (3) commercial aircrafts were hijacked, flown and smashed into the twin towers of the World Trade Center in New York City and the Pentagon building in Washington, D.C. by terrorists with alleged links to the al-Qaeda (the Base), a Muslim extremist organization headed by the infamous Osama bin Laden. Of no comparable historical parallels, these acts caused billions of dollars worth of destruction of property and incalculable loss of hundreds of lives. On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando filed this petition for certiorari and prohibition, attacking the constitutionality of the joint exercise. They were joined subsequently by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-list organizations, who filed a petition-in-intervention on February 11, 2002. Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and PARTIDO, on the other hand, aver that certain members of their organization are residents of Zamboanga and Sulu, and hence will be directly affected by the operations being conducted in Mindanao. They likewise pray for a relaxation on the rules relative to locus standi citing the unprecedented importance of the issue involved. On February 7, 2002 the Senate conducted a hearing on the Balikatan exercise wherein VicePresident Teofisto T. Guingona, Jr., who is concurrently Secretary of Foreign Affairs, presented the Draft Terms of Reference (TOR). Five days later, he approved the TOR, which we quote hereunder: I. POLICY LEVEL

1. The Exercise shall be Consistent with the Philippine Constitution and all its activities shall be in consonance with the laws of the land and the provisions of the RP-US Visiting Forces Agreement (VFA).

2. The conduct of this training Exercise is in accordance with pertinent United Nations resolutions against global terrorism as understood by the respective parties. 3. No permanent US basing and support facilities shall be established. Temporary structures such as those for troop billeting, classroom instruction and messing may be set up for use by RP and US Forces during the Exercise. 4. The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the authority of the Chief of Staff, AFP. In no instance will US Forces operate independently during field training exercises (FTX). AFP and US Unit Commanders will retain command over their respective forces under the overall authority of the Exercise Co-Directors. RP and US participants shall comply with operational instructions of the APP during the FTX. 5. The exercise shall be conducted and completed within a period of not more than six months, with the projected participation of 660 US personnel and 3,800 RP Forces. The Chief of Staff, AFP shall direct the Exercise Co-Directors to wind up and terminate the Exercise and other activities within the six month Exercise period. 6. The Exercise is a mutual counter-terrorism advising, assisting and training Exercise relative to Philippine efforts against the ASG, and will be conducted on the Island of Basilan. Further advising, assisting and training exercises shall be conducted in Malagutay and the Zamboanga area. Related activities in Cebu will be for support of the Exercise. 7. Only 160 US Forces organized in 12-man Special Forces Teams shall be deployed with AFP field commanders. The US teams shall remain at the Battalion Headquarters and, when approved, Company Tactical headquarters where they can observe and assess the performance of the APP Forces. 8. US exercise participants shall not engage in combat, without prejudice to their right of self-defense. 9. These terms of Reference are for purposes of this Exercise only and do not create additional legal obligations between the US Government and the Republic of the Philippines. II. 1. EXERCISE LEVEL TRAINING

a. The Exercise shall involve the conduct of mutual military assisting, advising and training of RP and US Forces with the primary objective of enhancing the operational capabilities of both forces to combat terrorism. b. At no time shall US Forces operate independently within RP territory.

c. Flight plans of all aircraft involved in the exercise will comply with the local air traffic regulations.

2.

ADMINISTRATION & LOGISTICS

a. RP and US participants shall be given a country and area briefing at the start of the Exercise. This briefing shall acquaint US Forces on the culture and sensitivities of the Filipinos and the provisions of the VFA. The briefing shall also promote the full cooperation on the part of the RP and US participants for the successful conduct of the Exercise. b. RP and US participating forces may share, in accordance with their respective laws and regulations, in the use of their resources, equipment and other assets. They will use their respective logistics channels. c. Medical evaluation shall be jointly planned and executed utilizing RP and US assets and resources. d. Legal liaison officers from each respective party shall be appointed by the Exercise Directors. 3. PUBLIC AFFAIRS

a. Combined RP-US Information Bureaus shall be established at the Exercise Directorate in Zamboanga City and at GHQ, AFP in Camp Aguinaldo, Quezon City. b. Local media relations will be the concern of the AFP and all public affairs guidelines shall be jointly developed by RP and US Forces. c. Socio-Economic Assistance Projects shall be planned and executed jointly by RP and US Forces in accordance with their respective laws and regulations, and in consultation with community and local government officials. Contemporaneously, Assistant Secretary for American Affairs Minerva Jean A. Falcon and United States Charge d Affaires Robert Fitts signed the Agreed Minutes of the discussion between the Vice-President and Assistant Secretary Kelly. Petitioners Lim and Ersando present the following arguments: I THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY (MDT) in 1951 TO PROVIDE MUTUAL MILITARY ASSISTANCE IN ACCORDANCE WITH THE CONSTITUTIONAL PROCESSES OF EACH COUNTRY ONLY IN THE CASE OF AN ARMED ATTACK BY AN EXTERNAL AGGRESSOR, MEANING A THIRD COUNTRY AGAINST ONE OF THEM. BY NO STRETCH OF THE IMAGINATION CAN IT BE SAID THAT THE ABU SAYYAF BANDITS IN BASILAN CONSTITUTE AN EXTERNAL ARMED FORCE THAT HAS

SUBJECT THE PHILIPPINES TO AN ARMED EXTERNAL ATTACK TO WARRANT U.S. MILITARY ASSISTANCE UNDER THE MDT OF 1951. II NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN SOLDIERS TO ENGAGE IN COMBAT OPERATIONS IN PHILIPPINE TERRITORY, NOT EVEN TO FIRE BACK IF FIRED UPON. Substantially the same points are advanced by petitioners SANLAKAS and PARTIDO. In his Comment, the Solicitor General points to infirmities in the petitions regarding, inter alia, Lim and Ersandos standing to file suit, the prematurity of the action, as well as the impropriety of availing of certiorari to ascertain a question of fact. Anent their locus standi, the Solicitor General argues that first, they may not file suit in their capacities as taxpayers inasmuch as it has not been shown that Balikatan 02-1 involves the exercise of Congress taxing or spending powers. Second, their being lawyers does not invest them with sufficient personality to initiate the case, citing our ruling in Integrated Bar of the Philippines v. Zamora. Third, Lim and Ersando have failed to demonstrate the requisite showing of direct personal injury. We agree. It is also contended that the petitioners are indulging in speculation. The Solicitor General is of the view that since the Terms of Reference are clear as to the extent and duration of Balikatan 02-1, the issues raised by petitioners are premature, as they are based only on a fear of future violation of the Terms of Reference. Even petitioners resort to a special civil action for certiorari is assailed on the ground that the writ may only issue on the basis of established facts. Apart from these threshold issues, the Solicitor General claims that there is actually no question of constitutionality involved. The true object of the instant suit, it is said, is to obtain an interpretation of the VFA. The Solicitor General asks that we accord due deference to the executive determination that Balikatan 02-1 is covered by the VFA, considering the Presidents monopoly in the field of foreign relations and her role as commander-in-chief of the Philippine armed forces. Given the primordial importance of the issue involved, it will suffice to reiterate our view on this point in a related case: Notwithstanding, in view of the paramount importance and the constitutional significance of the issues raised in the petitions, this Court, in the exercise of its sound discretion, brushes aside the procedural barrier and takes cognizance of the petitions, as we have done in the early Emergency Powers Cases, where we had occasion to rule: x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were involving only an indirect and general interest shared in common with the public. The Court dismissed the objection that they were not proper parties and ruled that transcendental importance to the public of these cases demands that they be settled promptly and

definitely, brushing aside, if we must, technicalities of procedure. We have since then applied the exception in many other cases. [citation omitted] This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC, Daza vs. Singson, and Basco vs. Phil. Amusement and Gaming Corporation, where we emphatically held: Considering however the importance to the public of the case at bar, and in keeping with the Courts duty, under the 1987 Constitution, to determine whether or not the other branches of the government have kept themselves within the limits of the Constitution and the laws that they have not abused the discretion given to them, the Court has brushed aside technicalities of procedure and has taken cognizance of this petition. xxx Again, in the more recent case of Kilosbayan vs. Guingona, Jr., this Court ruled that in cases of transcendental importance, the court may relax the standing requirements and allow a suit to prosper even where there is no direct injury to the party claiming the right of judicial review. Although courts generally avoid having to decide a constitutional question based on the doctrine of separation of powers, which enjoins upon the departments of the government a becoming respect for each others acts, this Court nevertheless resolves to take cognizance of the instant petitions. Hence, we treat with similar dispatch the general objection to the supposed prematurity of the action. At any rate, petitioners' concerns on the lack of any specific regulation on the latitude of activity US personnel may undertake and the duration of their stay has been addressed in the Terms of Reference. The holding of Balikatan 02-1 must be studied in the framework of the treaty antecedents to which the Philippines bound itself. The first of these is the Mutual Defense Treaty (MDT, for brevity). The MDT has been described as the core of the defense relationship between the Philippines and its traditional ally, the United States. Its aim is to enhance the strategic and technological capabilities of our armed forces through joint training with its American counterparts; the Balikatan is the largest such training exercise directly supporting the MDTs objectives. It is this treaty to which the VFA adverts and the obligations thereunder which it seeks to reaffirm. The lapse of the US-Philippine Bases Agreement in 1992 and the decision not to renew it created a vacuum in US-Philippine defense relations, that is, until it was replaced by the Visiting Forces Agreement. It should be recalled that on October 10, 2000, by a vote of eleven to three, this court upheld the validity of the VFA. The VFA provides the regulatory mechanism by which United States military and civilian personnel [may visit] temporarily in the Philippines in connection with activities approved by the Philippine Government. It contains provisions relative to entry and departure of American personnel, driving and vehicle registration, criminal jurisdiction, claims, importation and exportation, movement of vessels and aircraft, as well as the

duration of the agreement and its termination. It is the VFA which gives continued relevance to the MDT despite the passage of years. Its primary goal is to facilitate the promotion of optimal cooperation between American and Philippine military forces in the event of an attack by a common foe. The first question that should be addressed is whether Balikatan 02-1 is covered by the Visiting Forces Agreement. To resolve this, it is necessary to refer to the VFA itself. Not much help can be had therefrom, unfortunately, since the terminology employed is itself the source of the problem. The VFA permits United States personnel to engage, on an impermanent basis, in activities, the exact meaning of which was left undefined. The expression is ambiguous, permitting a wide scope of undertakings subject only to the approval of the Philippine government. The sole encumbrance placed on its definition is couched in the negative, in that United States personnel must abstain from any activity inconsistent with the spirit of this agreement, and in particular, from any political activity. All other activities, in other words, are fair game. We are not left completely unaided, however. The Vienna Convention on the Law of Treaties, which contains provisos governing interpretations of international agreements, state: SECTION 3. INTERPRETATION OF TREATIES Article 31 General rule of interpretation 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) (b) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty; any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the party.

3.

There shall be taken into account, together with the context: (a) (b) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;

(c) 4.

any relevant rules of international law applicable in the relations between the parties.

A special meaning shall be given to a term if it is established that the parties so intended. Article 32 Supplementary means of interpretation

Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) (b) leaves the meaning ambiguous or obscure; or leads to a result which is manifestly absurd or unreasonable.

It is clear from the foregoing that the cardinal rule of interpretation must involve an examination of the text, which is presumed to verbalize the parties intentions. The Convention likewise dictates what may be used as aids to deduce the meaning of terms, which it refers to as the context of the treaty, as well as other elements may be taken into account alongside the aforesaid context. As explained by a writer on the Convention, [t]he Commissions proposals (which were adopted virtually without change by the conference and are now reflected in Articles 31 and 32 of the Convention) were clearly based on the view that the text of a treaty must be presumed to be the authentic expression of the intentions of the parties; the Commission accordingly came down firmly in favour of the view that the starting point of interpretation is the elucidation of the meaning of the text, not an investigation ab initio into the intentions of the parties. This is not to say that the travaux prparatoires of a treaty, or the circumstances of its conclusion, are relegated to a subordinate, and wholly ineffective, role. As Professor Briggs points out, no rigid temporal prohibition on resort to travaux prparatoires of a treaty was intended by the use of the phrase supplementary means of interpretation in what is now Article 32 of the Vienna Convention. The distinction between the general rule of interpretation and the supplementary means of interpretation is intended rather to ensure that the supplementary means do not constitute an alternative, autonomous method of interpretation divorced from the general rule. The Terms of Reference rightly fall within the context of the VFA. After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the word activities arose from accident. In our view, it was deliberately made that way to give both parties a certain leeway in negotiation. In this manner, visiting US forces may sojourn in Philippine territory for purposes other than military. As conceived, the joint exercises may include training on new techniques of patrol and surveillance to protect the nations marine resources, sea search-and-rescue operations to assist vessels in distress, disaster relief operations,

civic action projects such as the building of school houses, medical and humanitarian missions, and the like. Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to assume that Balikatan 02-1, a mutual anti-terrorism advising, assisting and training exercise, falls under the umbrella of sanctioned or allowable activities in the context of the agreement. Both the history and intent of the Mutual Defense Treaty and the VFA support the conclusion that combat-related activities as opposed to combat itself such as the one subject of the instant petition, are indeed authorized. That is not the end of the matter, though. Granted that Balikatan 02-1 is permitted under the terms of the VFA, what may US forces legitimately do in furtherance of their aim to provide advice, assistance and training in the global effort against terrorism? Differently phrased, may American troops actually engage in combat in Philippine territory? The Terms of Reference are explicit enough. Paragraph 8 of section I stipulates that US exercise participants may not engage in combat except in self-defense. We wryly note that this sentiment is admirable in the abstract but difficult in implementation. The target of Balikatan 02-1, the Abu Sayyaf, cannot reasonably be expected to sit idly while the battle is brought to their very doorstep. They cannot be expected to pick and choose their targets for they will not have the luxury of doing so. We state this point if only to signify our awareness that the parties straddle a fine line, observing the honored legal maxim Nemo potest facere per alium quod non potest facere per directum. The indirect violation is actually petitioners worry, that in reality, Balikatan 02-1 is actually a war principally conducted by the United States government, and that the provision on self-defense serves only as camouflage to conceal the true nature of the exercise. A clear pronouncement on this matter thereby becomes crucial. In our considered opinion, neither the MDT nor the VFA allow foreign troops to engage in an offensive war on Philippine territory. We bear in mind the salutary proscription stated in the Charter of the United Nations, to wit: Article 2 The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in accordance with the following Principles. xxx xxx xxx xxx

4. All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations. xxx xxx xxx xxx

In the same manner, both the Mutual Defense Treaty and the Visiting Forces Agreement, as in all other treaties and international agreements to which the Philippines is a party, must be read in the context of the 1987 Constitution. In particular, the Mutual Defense Treaty was concluded way

before the present Charter, though it nevertheless remains in effect as a valid source of international obligation. The present Constitution contains key provisions useful in determining the extent to which foreign military troops are allowed in Philippine territory. Thus, in the Declaration of Principles and State Policies, it is provided that: xxx xxx xxx xxx

SEC. 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations. xxx xxx xxx xxx

SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states the paramount consideration shall be national sovereignty, territorial integrity, national interest, and the right to self-determination. SEC. 8. The Philippines, consistent with the national interest, adopts and pursues a policy of freedom from nuclear weapons in the country. xxx xxx xxx xxx

The Constitution also regulates the foreign relations powers of the Chief Executive when it provides that [n]o treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the members of the Senate. Even more pointedly, the Transitory Provisions state: Sec. 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines and the United States of America concerning Military Bases, foreign military bases, troops or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the Senate and, when the Congress so requires, ratified by a majority of the votes cast by the people in a national referendum held for that purpose, and recognized as a treaty by the other contracting state. The aforequoted provisions betray a marked antipathy towards foreign military presence in the country, or of foreign influence in general. Hence, foreign troops are allowed entry into the Philippines only by way of direct exception. Conflict arises then between the fundamental law and our obligations arising from international agreements. A rather recent formulation of the relation of international law vis--vis municipal law was expressed in Philip Morris, Inc. v. Court of Appeals, to wit: xxx Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of international law are given a standing equal, not superior, to national legislation.

This is not exactly helpful in solving the problem at hand since in trying to find a middle ground, it favors neither one law nor the other, which only leaves the hapless seeker with an unsolved dilemma. Other more traditional approaches may offer valuable insights. From the perspective of public international law, a treaty is favored over municipal law pursuant to the principle of pacta sunt servanda. Hence, [e]very treaty in force is binding upon the parties to it and must be performed by them in good faith. Further, a party to a treaty is not allowed to invoke the provisions of its internal law as justification for its failure to perform a treaty. Our Constitution espouses the opposing view. Witness our jurisdiction as stated in section 5 of Article VIII: The Supreme Court shall have the following powers: xxx xxx xxx xxx

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final judgments and order of lower courts in: (A) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. xxx xxx xxx xxx

In Ichong v. Hernandez, we ruled that the provisions of a treaty are always subject to qualification or amendment by a subsequent law, or that it is subject to the police power of the State. In Gonzales v. Hechanova, xxx As regards the question whether an international agreement may be invalidated by our courts, suffice it to say that the Constitution of the Philippines has clearly settled it in the affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not be deprived of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or writ of error as the law or the rules of court may provide, final judgments and decrees of inferior courts in (1) All cases in which the constitutionality or validity of any treaty, law, ordinance, or executive order or regulation is in question. In other words, our Constitution authorizes the nullification of a treaty, not only when it conflicts with the fundamental law, but, also, when it runs counter to an act of Congress. The foregoing premises leave us no doubt that US forces are prohibited from engaging in an offensive war on Philippine territory. Yet a nagging question remains: are American troops actively engaged in combat alongside Filipino soldiers under the guise of an alleged training and assistance exercise? Contrary to what petitioners would have us do, we cannot take judicial notice of the events transpiring down

south, as reported from the saturation coverage of the media. As a rule, we do not take cognizance of newspaper or electronic reports per se, not because of any issue as to their truth, accuracy, or impartiality, but for the simple reason that facts must be established in accordance with the rules of evidence. As a result, we cannot accept, in the absence of concrete proof, petitioners allegation that the Arroyo government is engaged in doublespeak in trying to pass off as a mere training exercise an offensive effort by foreign troops on native soil. The petitions invite us to speculate on what is really happening in Mindanao, to issue, make factual findings on matters well beyond our immediate perception, and this we are understandably loath to do. It is all too apparent that the determination thereof involves basically a question of fact. On this point, we must concur with the Solicitor General that the present subject matter is not a fit topic for a special civil action for certiorari. We have held in too many instances that questions of fact are not entertained in such a remedy. The sole object of the writ is to correct errors of jurisdiction or grave abuse of discretion. The phrase grave abuse of discretion has a precise meaning in law, denoting abuse of discretion too patent and gross as to amount to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law, or where the power is exercised in an arbitrary and despotic manner by reason of passion and personal hostility. In this connection, it will not be amiss to add that the Supreme Court is not a trier of facts. Under the expanded concept of judicial power under the Constitution, courts are charged with the duty to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. From the facts obtaining, we find that the holding of Balikatan 02-1 joint military exercise has not intruded into that penumbra of error that would otherwise call for correction on our part. In other words, respondents in the case at bar have not committed grave abuse of discretion amounting to lack or excess of jurisdiction. WHEREFORE, the petition and the petition-in-intervention are hereby DISMISSED without prejudice to the filing of a new petition sufficient in form and substance in the proper Regional Trial Court. SO ORDERED. Bellosillo, Melo, Mendoza, Quisumbing, and Carpio, JJ., concur. Davide, Jr., C.J., and Puno, J., join the main and separate opinion of J. Panganiban. Vitug, J., in the result. Kapunan, J., see dissenting opinion. Panganiban, J., see separate opinion. Ynares-Santiago, and Sandoval-Gutierrez, JJ., join the dissenting opinion of J. Kapunan.

For ready reference, the text of the treaty is reproduced herein: MUTUAL DEFENSE TREATY BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE UNITED STATES OF AMERICA 30 August 1951 The parties to this Treaty, Reaffirming their faith in the purposes and principles of the Charter of the United Nations and their desire to live in peace with all peoples and all Governments, and desiring to strengthen the fabric of peace in the Pacific Area, Recalling with mutual pride the historic relationship which brought their two peoples together in a common bond of sympathy and mutual ideals to fight side-by-side against imperialist aggression during the last war, Desiring to declare publicly and formally their sense of unity and their common determination to defend themselves against external armed attack, so that no potential aggressor could be under the illusion that either of them stands alone in the Pacific Area, Desiring further to strengthen their present efforts for collective defense for the preservation of peace and security pending the development of a more comprehensive system of regional security in the Pacific Area, Agreeing that nothing in this present instrument shall be considered or interpreted as in any way or sense altering or diminishing any existing agreements or understandings between the United States of America and the Republic of the Philippines, Have agreed as follows: ARTICLE I. The Parties undertake, as set forth in the Charter of the United Nations, to settle any international disputes in which they may be involved by peaceful means in such a manner that international peace and security and justice are not endangered and to refrain in their international relations from the threat or use of force in any manner inconsistent with the purpose of the United Nations. ARTICLE II. In order more effectively to achieve the objective of this Treaty, the Parties separately and jointly by self-help and mutual aid will maintain and develop their individual and collective capacity to resist armed attack. ARTICLE III.

The Parties, through their Foreign Ministers or their deputies, will consult together from time to time regarding the implementation of this Treaty and whenever in the opinion of either of them the territorial integrity, political independence or security of either of the Parties is threatened by external armed attack in the Pacific. ARTICLE IV. Each Party recognizes that an armed attack in the Pacific Area on either of the Parties would be dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes. Any such armed attack and all measures taken as a result thereof shall be immediately reported to the Security Council of the United Nations. Such measures shall be terminated when the Security Council has taken the measures necessary to restore and maintain international peace and security. ARTICLE V. For the purpose of Article IV, an armed attack on either of the Parties is deemed to include an attack on the metropolitan territory of either of the Parties, or on the island territories under its jurisdiction in the Pacific or on its armed forces, public vessels or aircraft used in the Pacific. ARTICLE VI. This Treaty does not affect and shall not be interpreted as affecting in any way the rights and obligations of the Parties under the Charter of the United Nations or the responsibility of the United Nations for the maintenance of international peace and security. ARTICLE VII. This Treaty shall be ratified by the United States of America and the Republic of the Philippines in accordance with their respective constitutional processes and will come into force when instruments of ratification thereof have been exchanged by them at Manila. ARTICLE VIII. This Treaty shall remain in force indefinitely. Either Party may terminate it one year after notice has been given to the other party. IN WITNESS WHEREOF the undersigned Plenipotentiaries have signed this Treaty. DONE in duplicate at Washington this thirtieth day of August, 1951. xxx xxx xxx xxx

The day before, the first petition in connection with the joint military enterprise was filed -- G.R. No. 151433, entitled In the Matter of Declaration as Constitutional and Legal the Balikatan RP-US Military Exercises. Petitioner therein Atty. Eduardo B. Inlayo manifested that he would be perfectly comfortable should the Court merely note his petition. We did not oblige him; in a Resolution dated February 12, 2002, we dismissed his petition on the grounds of insufficiency in form and substance and lack of jurisdiction. After extending a hearty Valentines greeting to the Court en banc, Atty. Inlayo promised to laminate the aforesaid resolution as a testimonial of his once upon a time participation in an issue of national consequence. Annex 1 of the Comment. Annex 2 of the Comment. The Minutes state: Secretary Guingona and Assistant Secretary Kelly welcomed the holding of Balikatan 02-1 exercise (the Exercise) and the conclusion of the Terms of Reference for the Exercise. Assistant Secretary Kelly thanked Secretary Guingona for Secretary Guingonas personal approval of the Terms of Reference. Both Secretary Guingona and Assistant Secretary Kelly emphasized the importance of cooperating, within the bounds provided for by their respective constitutions and laws, in the fight against international terrorism. Both Secretary Guingona and Assistant Secretary Kelly expressed the belief that the Exercise shall not in any way contribute to any escalation of other conflicts in Mindanao, shall not adversely affect the progress of ongoing peace negotiations between the Government of the Philippines and other parties, and shall not put at risk the friendly relations between the Philippines and its neighbors as well as with other states. Secretary Guingona stated that he had in mind the ongoing peace negotiations with the NDF and the MILF and he emphasized that it is important to make sure that the Exercise shall not in any way hinder those negotiations. Both Secretary Guingona and Assistant Secretary Kelly stated that they look forward to the realization of the nearly US$100 million in security assistance for fiscal years 2001-2002 agreed upon between H.E. President Gloria Macapagal-Arroyo and H.E. President George W. Bush last November 2001. Secretary Guingona stated that the Philippines welcomes the assistance that the U.S. will be providing, saying that while Filipino soldier does not lack experience, courage and determination, they could benefit from additional knowledge and updated military technologies. Assistant Secretary Kelly said that he is glad the U.S. is able to provide advice, assistance and training and reiterated the policy position expressed by H.E. President George W. Bush during his State of the Nation Address that U.S. forces are in the Philippines to advise, assist and train Philippine military forces.

Both Secretary Guingona and Assistant Secretary Kelly reiterated that, as provided in the Terms of Reference, U.S. Forces shall not engage in combat during the Exercise, except in accordance with their right to act in self-defense. Both Secretary Guingona and Assistant Secretary Kelly reiterated that, pursuant to Article II of the Visiting Forces Agreement, U.S. forces are bound to respect the laws of the Philippines during the Exercise. Both Secretary Guingona and Assistant Secretary Kelly recognized that, pursuant to Article VI of the Visiting Forces Agreement, both the U.S. and Philippine Governments waive any and all claims against the other for any deaths or injuries to their military and civilian personnel from the Exercise. Secretary Guingona and Assistant Secretary Kelly designated Ambassador Minerva Falcon and Charge d Affaires, a.i. Robert Fitts to initial these minutes. Both secretary Guingona and Assistant Secretary Kelly agreed to consult from time to time on matters relating to the Exercise as well as on other matters. 338 SCRA 81, 100-101 (2000). BAYAN, et. al. v. Zamora, 342 SCRA 449 (2000). BAYAN, et. al. v. Zamora, et. al., 342 SCRA 449 (2000). Article I [Definitions], VFA. Article II [Respect for Law], VFA. I.M. SINCLAIR, THE VIENNA CONVENTION ON THE LAW OF TREATIES 71-72 (1973). No one is allowed to do indirectly what he is prohibited to do directly. Sec. 21, Art. VII. 224 SCRA 576, 593 (1993). Vienna Convention on the Law of Treaties, art. 26. Id, art. 27. However, this is without prejudice to the provisions of art. 46 of the convention, which provides: 1. A State may not invoke the fact that its consent to be bound by a treaty has been expressed in violation of a provision of its internal law regarding competence to conclude treaties as invalidating its consent unless that violation was manifest and concerned a rule of its internal law of fundamental importance.

2. A violation is manifest if it would be objectively evident to any State conducting itself in the manner in accordance with normal practice and in good faith. 101 Phil. 1155, 1191 (1957). 9 SCRA 230, 242 (1963). Pertinent sections of Rule 129 provide: SECTION 1. Judicial notice, when mandatory.A court shall take judicial notice, without the introduction of evidence, of the existence and territorial extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the Philippines, the official acts of the legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of time, and the geographical divisions. Likewise, it is also provided in the next succeeding section: SEC. 2. Judicial notice, when discretionary.A court may take judicial notice of matters which are of public knowledge, or are capable of unquestionable demonstration, or ought to be known to judges because of their judicial functions. Sanchez v. National Labor Relations Commission, 312 SCRA 727 (1999). Hervas v. Court of Appeals, 319 SCRA 776 (1999); Valmonte v. Court of Appeals, 303 SCRA 278 (1999). Article VIII, section 1. FIRST DIVISION [G.R. Nos. 160054-55. July 21, 2004] MANOLO P. SAMSON, petitioner, vs. HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge, Regional Trial Court of Quezon City, Branch 90, PEOPLE OF THE PHILIPPINES and CATERPILLAR, INC., respondents. DECISION YNARES-SANTIAGO, J.: Assailed in this petition for certiorari is the March 26, 2003 Order[1] of the Regional Trial Court of Quezon City, Branch 90, which denied petitioners (1) motion to quash the information; and (2) motion for reconsideration of the August 9, 2002 Order denying his motion to suspend the arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44. Petitioner also questioned its August 5, 2003 Order[2] which denied his motion for reconsideration. The undisputed facts show that on March 7, 2002, two informations for unfair competition under Section 168.3 (a), in relation to Section 170, of the Intellectual Property Code (Republic Act No. 8293), similarly worded save for the dates and places of commission, were filed against

petitioner Manolo P. Samson, the registered owner of ITTI Shoes. The accusatory portion of said informations read: That on or about the first week of November 1999 and sometime prior or subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, above-named accused, owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng Corporation located at Robinsons Galleria, EDSA corner Ortigas Avenue, Quezon City, did then and there willfully, unlawfully and feloniously distribute, sell and/or offer for sale CATERPILLAR products such as footwear, garments, clothing, bags, accessories and paraphernalia which are closely identical to and/or colorable imitations of the authentic Caterpillar products and likewise using trademarks, symbols and/or designs as would cause confusion, mistake or deception on the part of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior adopter, user and owner of the following internationally: CATERPILLAR, CAT, CATERPILLAR & DESIGN, CAT AND DESIGN, WALKING MACHINES and TRACK-TYPE TRACTOR & DESIGN. CONTRARY TO LAW.[3] On April 19, 2002, petitioner filed a motion to suspend arraignment and other proceedings in view of the existence of an alleged prejudicial question involved in Civil Case No. Q-00-41446 for unfair competition pending with the same branch; and also in view of the pendency of a petition for review filed with the Secretary of Justice assailing the Chief State Prosecutors resolution finding probable cause to charge petitioner with unfair competition. In an Order dated August 9, 2002, the trial court denied the motion to suspend arraignment and other proceedings. On August 20, 2002, petitioner filed a twin motion to quash the informations and motion for reconsideration of the order denying motion to suspend, this time challenging the jurisdiction of the trial court over the offense charged. He contended that since under Section 170 of R.A. No. 8293, the penalty5 of imprisonment for unfair competition does not exceed six years, the offense is cognizable by the Municipal Trial Courts and not by the Regional Trial Court, per R.A. No. 7691. In its assailed March 26, 2003 Order, the trial court denied petitioners twin motions.6 A motion for reconsideration thereof was likewise denied on August 5, 2003. Hence, the instant petition alleging that respondent Judge gravely abused its discretion in issuing the assailed orders. The issues posed for resolution are (1) Which court has jurisdiction over criminal and civil cases for violation of intellectual property rights? (2) Did the respondent Judge gravely abuse his discretion in refusing to suspend the arraignment and other proceedings in Criminal Case Nos. Q-02-108043-44 on the ground of (a) the existence of a prejudicial question; and (b) the pendency of a petition for review with the Secretary of Justice on the finding of probable cause for unfair competition?

Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty for infringement of registered marks, unfair competition, false designation of origin and false description or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty Thousand Pesos to Two Hundred Thousand Pesos, to wit: SEC. 170. Penalties. Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000.00) to Two hundred thousand pesos (P200,000.00), shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155 [Infringement], Section 168 [Unfair Competition] and Section 169.1 [False Designation of Origin and False Description or Representation]. Corollarily, Section 163 of the same Code states that actions (including criminal and civil) under Sections 150, 155, 164, 166, 167, 168 and 169 shall be brought before the proper courts with appropriate jurisdiction under existing laws, thus SEC. 163. Jurisdiction of Court. All actions under Sections 150, 155, 164 and 166 to 169 shall be brought before the proper courts with appropriate jurisdiction under existing laws. (Emphasis supplied) The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The Trademark Law) which provides that jurisdiction over cases for infringement of registered marks, unfair competition, false designation of origin and false description or representation, is lodged with the Court of First Instance (now Regional Trial Court) SEC. 27. Jurisdiction of Court of First Instance. All actions under this Chapter [V Infringement] and Chapters VI [Unfair Competition] and VII [False Designation of Origin and False Description or Representation], hereof shall be brought before the Court of First Instance. We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No. 8293. The repealing clause of R.A. No. 8293, reads SEC. 239. Repeals. 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby repealed. (Emphasis added) Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it would not have used the phrases parts of Acts and inconsistent herewith; and it would have simply stated Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended are hereby repealed. It would have removed all doubts that said specific laws had been rendered without force and effect. The use of the phrases parts of Acts and inconsistent herewith only means that the repeal pertains only to provisions which are repugnant or not susceptible of harmonization with R.A. No. 8293.7 Section 27 of R.A. No. 166, however, is consistent and in harmony with Section 163 of R.A. No. 8293. Had

R.A. No. 8293 intended to vest jurisdiction over violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly stated so under Section 163 thereof. Moreover, the settled rule in statutory construction is that in case of conflict between a general law and a special law, the latter must prevail. Jurisdiction conferred by a special law to Regional Trial Courts must prevail over that granted by a general law to Municipal Trial Courts.8 In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws9 conferring jurisdiction over violations of intellectual property rights to the Regional Trial Court. They should therefore prevail over R.A. No. 7691, which is a general law.10 Hence, jurisdiction over the instant criminal case for unfair competition is properly lodged with the Regional Trial Court even if the penalty therefor is imprisonment of less than 6 years, or from 2 to 5 years and a fine ranging from P50,000.00 to P200,000.00. In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual property rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19, 2002 designating certain Regional Trial Courts as Intellectual Property Courts. On June 17, 2003, the Court further issued a Resolution consolidating jurisdiction to hear and decide Intellectual Property Code and Securities and Exchange Commission cases in specific Regional Trial Courts designated as Special Commercial Courts. The case of Mirpuri v. Court of Appeals,11 invoked by petitioner finds no application in the present case. Nowhere in Mirpuri did we state that Section 27 of R.A. No. 166 was repealed by R.A. No. 8293. Neither did we make a categorical ruling therein that jurisdiction over cases for violation of intellectual property rights is lodged with the Municipal Trial Courts. The passing remark in Mirpuri on the repeal of R.A. No. 166 by R.A. No. 8293 was merely a backgrounder to the enactment of the present Intellectual Property Code and cannot thus be construed as a jurisdictional pronouncement in cases for violation of intellectual property rights. Anent the second issue, petitioner failed to substantiate his claim that there was a prejudicial question. In his petition, he prayed for the reversal of the March 26, 2003 order which sustained the denial of his motion to suspend arraignment and other proceedings in Criminal Case Nos. Q02-108043-44. For unknown reasons, however, he made no discussion in support of said prayer in his petition and reply to comment. Neither did he attach a copy of the complaint in Civil Case No. Q-00-41446 nor quote the pertinent portion thereof to prove the existence of a prejudicial question. At any rate, there is no prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other.12 Under Rule 111, Section 3 of the Revised Rules on Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In the case at bar, the common element in the acts constituting unfair competition under Section 168 of R.A. No. 8293 is fraud.13 Pursuant to Article 33 of the Civil Code, in cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the

criminal action, may be brought by the injured party. Hence, Civil Case No. Q-00-41446, which as admitted14 by private respondent also relate to unfair competition, is an independent civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will justify the suspension of the criminal cases at bar. Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure provides SEC. 11. Suspension of arraignment. Upon motion by the proper party, the arraignment shall be suspended in the following cases xxx xxx xxx

(c) A petition for review of the resolution of the prosecutor is pending at either the Department of Justice, or the Office of the President; Provided, that the period of suspension shall not exceed sixty (60) days counted from the filing of the petition with the reviewing office. While the pendency of a petition for review is a ground for suspension of the arraignment, the aforecited provision limits the deferment of the arraignment to a period of 60 days reckoned from the filing of the petition with the reviewing office. It follows, therefore, that after the expiration of said period, the trial court is bound to arraign the accused or to deny the motion to defer arraignment. In the instant case, petitioner failed to establish that respondent Judge abused his discretion in denying his motion to suspend. His pleadings and annexes submitted before the Court do not show the date of filing of the petition for review with the Secretary of Justice.15 Moreover, the Order dated August 9, 2002 denying his motion to suspend was not appended to the petition. He thus failed to discharge the burden of proving that he was entitled to a suspension of his arraignment and that the questioned orders are contrary to Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure. Indeed, the age-old but familiar rule is that he who alleges must prove his allegations. In sum, the dismissal of the petition is proper considering that petitioner has not established that the trial court committed grave abuse of discretion. So also, his failure to attach documents relevant to his allegations warrants the dismissal of the petition, pursuant to Section 3, Rule 46 of the Rules of Civil Procedure, which states: SEC. 3. Contents and filing of petition; effect of non-compliance with requirements . The petition shall contain the full names and actual addresses of all the petitioners and respondents, a concise statement of the matters involved, the factual background of the case, and the grounds relied upon for the relief prayed for. It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original copy intended for the court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the record as are referred to therein, and other documents relevant or pertinent thereto.

xxx

xxx

xxx

The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. (Emphasis added) WHEREFORE, in view of all the foregoing, the petition is DISMISSED. SO ORDERED. Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.

[1] [2] [3] 5

Rollo, p. 25. Issued by Judge Reynaldo B. Daway. Rollo, p. 26. Id., pp. 27-28.

Imprisonment from two (2) years to five (5) years and a fine ranging from Fifty Thousand Pesos (P50,000.00) to Two Hundred Thousand Pesos (P200,000.00). The dispositive portion thereof states: IN VIEW OF THE FOREGOING, the accuseds aforecited Motion To Quash Information and Motion For Reconsideration Of Order Denying Motion To Suspend is denied for lack of merit. (Rollo, p. 25)
6 7 8 9

Agpalo, The Law on Trademark, Infringement and Unfair Competition, 2000 Edition, pp. 1-2. Manzano v. Valera, G.R. No. 122068, 8 July 1998, 292 SCRA 66, 74.

Faberge Incorporated v. Intermediate Appellate Court, G.R. No. 71189, 4 November 1992, 215 SCRA 316, 323.
10 11 12 13 14 15

Manzano v. Valera, supra, p. 73. 376 Phil. 628 (1999). People v. Consing, Jr., G.R. No. 148193, 16 January 2003, 395 SCRA 366, 371. Agpalo, supra, p. 234. Rollo, p. 47.

The petition and reply to comment do not disclose whether the issue of probable cause has already been resolved with finality.

EN BANC

GOVERNMENT OF HONG KONG SPECIAL ADMINISTRATIVE REGION, represented by the Philippine Department of Justice, Petitioner,

G.R. No. 153675

Present:

PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, - versus CARPIO MORALES, CALLEJO, SR., AZCUNA,

TINGA, CHICO-NAZARIO, GARCIA, VELASCO, JR., and NACHURA, JJ.

HON. FELIXBERTO T. OLALIA, JR. and JUAN ANTONIO MUOZ,

Promulgated:

April 19, 2007 Respondents. x------------------------------------------------------------------------------------x

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, seeking to nullify the two Orders of the Regional Trial Court (RTC), Branch 8, Manila (presided by respondent Judge Felixberto T. Olalia, Jr.)

issued in Civil Case No. 99-95773. These are: (1) the Order dated December 20, 2001 allowing Juan Antonio Muoz, private respondent, to post bail; and (2) the Order dated April 10, 2002 denying the motion to vacate the said Order of December 20, 2001 filed by the Government of Hong Kong Special Administrative Region, represented by the Philippine Department of Justice (DOJ), petitioner. The petition alleges that both Orders were issued by respondent judge with grave abuse of discretion amounting to lack or excess of jurisdiction as there is no provision in the Constitution granting bail to a potential extraditee.

The facts are:

On January 30, 1995, the Republic of the Philippines and the then British Crown Agreement for the Colony of Hong Kong signed an of Accused and Convicted Surrender

Persons. It took effect on June 20, 1997.

On July 1, 1997, Hong Kong reverted back to the Peoples Republic of China and became the Hong Kong Special Administrative Region.

Private respondent Muoz was charged before the Hong Kong Court with three (3) counts of the offense of accepting an advantage as agent, in violation of Section 9 (1) (a) of the Prevention of Bribery Ordinance, Cap. 201 of Hong Kong. penalized by the common law of Hong Kong. He also faces seven (7) counts of the offense of conspiracy to defraud, On August 23, 1997 and October 25, 1999, warrants of arrest were issued against him. If convicted, he faces a jail term of seven (7) to fourteen (14) years for each charge.

On September 13, 1999, the DOJ received from the Hong Kong Department of Justice a request for the provisional arrest of private respondent. The DOJ then forwarded the request to the National Bureau of Investigation (NBI) which, in turn, filed with the RTC of Manila, Branch 19 an application for the provisional arrest of private respondent.

On September 23, 1999, the RTC, Branch 19, Manila issued an Order of Arrest against private respondent. That same day, the NBI agents arrested and detained him.

On October 14, 1999, private respondent filed with the Court of Appeals a petition for certiorari, prohibition and

mandamus with application for preliminary mandatory injunction and/or writ of habeas corpus questioning the validity of the Order of Arrest.

On November 9, 1999, the Court of Appeals rendered its Decision declaring the Order of Arrest void.

On November 12, 1999, the DOJ filed with this Court a petition for review on certiorari, docketed as G.R. No. 140520, praying that the Decision of the Court of Appeals be reversed.

On December 18, 2000, this Court rendered a Decision granting the petition of the DOJ and sustaining the validity of the Order of Arrest against private respondent. The Decision became final and executory on April 10, 2001.

Meanwhile, as early as November 22, 1999, petitioner Hong Kong Special Administrative Region filed with the RTC of Manila a petition for the extradition of private respondent, docketed as Civil Case No. 99-95733, raffled off to Branch 10, presided by Judge Ricardo Bernardo, Jr. For his part, private respondent filed,

in the same case,- a petition for bail which was opposed by petitioner.

After hearing, or on October 8, 2001, Judge Bernardo, Jr. issued an Order denying the petition for bail, holding that there is no Philippine law granting bail in extradition cases and that private respondent is a high flight risk.

On October 22, 2001, Judge Bernardo, Jr. inhibited himself from further hearing Civil Case No. 99-95733. It was then raffled off to Branch 8 presided by respondent judge.

On October 30, 2001, private respondent filed a motion for reconsideration of the Order denying his application for bail. This was granted by respondent judge in an Order dated December 20, 2001 allowing private respondent to post bail, thus:

In conclusion, this Court will not contribute to accuseds further erosion of civil liberties. The petition for bail is granted subject to the following conditions:

1.

Bail is set at Php750,000.00 in cash with the condition that accused hereby undertakes that he will appear and answer the

issues raised in these proceedings and will at all times hold himself amenable to orders and processes of this Court, will further appear for judgment. If accused fails in this undertaking, the cash bond will be forfeited in favor of the government;

2.

Accused must surrender his valid passport to this Court;

3.

The Department of Justice is given immediate notice and discretion of filing its own motion for hold departure order before this Court even in extradition proceeding; and

4.

Accused is required to report to the government prosecutors handling this case or if they so desire to the nearest office, at any time and day of the week; and if they further desire, manifest before this Court to require that all the assets of accused, real and personal, be filed with this Court soonest, with the condition that if the accused flees from his undertaking, said assets be forfeited in favor of the government and that the corresponding lien/annotation be noted therein accordingly.

SO ORDERED.

On December 21, 2001, petitioner filed an urgent motion to vacate the above Order, but it was denied by respondent judge in his Order dated April 10, 2002.

Hence, the instant petition. Petitioner alleged that the trial court committed grave abuse of discretion amounting to lack or

excess of jurisdiction in admitting private respondent to bail; that there is nothing in the Constitution or statutory law providing that a potential extraditee has a right to bail, the right being limited solely to criminal proceedings.

In his comment on the petition, private respondent maintained that the right to bail guaranteed under the Bill of Rights extends to a prospective extraditee; and that extradition is a harsh process resulting in a prolonged deprivation of ones liberty.

Section 13, Article III of the Constitution provides that the right to bail shall not be impaired, thus:

Sec. 13. All persons, except those charged with offenses punishable by reclusion perpetua when evidence of guilt is strong, shall, before conviction, be bailable by sufficient sureties, or be released on recognizance as may be provided by law. The right to bail shall not be impaired even when the privilege of the writ of habeas corpus is suspended. Excessive bail shall not be required.

Jurisprudence on extradition is but in its infancy in this jurisdiction. Nonetheless, this is not the first time that this Court

has an occasion to resolve the question of whether a prospective extraditee may be granted bail.

In Government of United States of America v. Hon. Guillermo G. Purganan, Presiding Judge, RTC of Manila, Branch 42, and Mark B. Jimenez, a.k.a. Mario Batacan Crespo , this Court, speaking through then Associate Justice Artemio V. Panganiban, later Chief Justice, held that the constitutional provision on bail does not apply to extradition proceedings. It is available only in criminal proceedings, thus:

x x x. As suggested by the use of the word conviction, the constitutional provision on bail quoted above, as well as Section 4, Rule 114 of the Rules of Court, applies only when a person has been arrested and detained for violation of Philippine criminal laws. It does not apply to extradition proceedings because extradition courts do not render judgments of conviction or acquittal.

Moreover, the constitutional right to bail flows from the presumption of innocence in favor of every accused who should not be subjected to the loss of freedom as thereafter he would be entitled to acquittal, unless his guilt be proved beyond reasonable doubt ( De la Camara v. Enage, 41 SCRA 1, 6, September 17, 1971, per Fernando, J., later CJ). It follows that the constitutional provision on bail will not apply to a case like extradition, where the presumption of innocence is not at issue.

The provision in the Constitution stating that the right to bail shall not be impaired even when the privilege of the writ of habeas

corpus is suspended does not detract from the rule that the constitutional right to bail is available only in criminal proceedings. It must be noted that the suspension of the privilege of the writ of habeas corpus finds application only to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion (Sec. 18, Art. VIII, Constitution). Hence, the second sentence in the constitutional provision on bail merely emphasizes the right to bail in criminal proceedings for the aforementioned offenses. It cannot be taken to mean that the right is available even in extradition proceedings that are not criminal in nature.

At first glance, the above ruling applies squarely to private respondents case. However, this Court cannot ignore the following trends in international law: (1) the growing importance of the individual person in public international law who, in the 20 th century, has gradually attained global recognition; (2) the higher value now being given to human rights in the international sphere; (3) the corresponding duty of countries to observe these universal human rights in fulfilling their treaty obligations; and (4) the duty of this Court to balance the rights of the individual under our fundamental law, on one hand, and the law on extradition, on the other.

The modern trend in public international law is the primacy placed on the worth of the individual person and the sanctity of human rights. Slowly, the recognition that the individual person may properly be a subject of international law is

now taking root. The vulnerable doctrine that the subjects of international law are limited only to states was dramatically eroded towards the second half of the past century. For one, the Nuremberg and Tokyo trials after World War II resulted in the unprecedented spectacle of individual defendants for acts characterized as violations of the laws of war, crimes against peace, and crimes against humanity. Recently, under the Nuremberg principle, Serbian leaders have been persecuted for war crimes and crimes against humanity committed in the former Yugoslavia. These significant events show that the individual person is now a valid subject of international law.

On a more positive note, also after World War II, both international organizations and states gave recognition and importance to human rights. Thus, on December 10, 1948, the United all the Nations other General Assembly rights adopted of every the Universal were Declaration of Human Rights in which the right to life, liberty and fundamental person proclaimed. While not a treaty, the principles contained in the said Declaration are now recognized as customarily binding upon the members of the international community. Thus, in Mejoff v. Director of Prisons, this Court, in granting bail to a prospective deportee, held that under the Constitution, the principles set forth in that Declaration are part of the law of the land. In 1966, the UN

General Assembly also adopted the International Covenant on Civil and Political Rights which the Philippines signed and ratified. Fundamental among the rights enshrined therein are the rights of every person to life, liberty, and due process.

The Philippines, along with the other members of the family of nations, committed to uphold the fundamental human rights as well as value the worth and dignity of every person. This commitment is enshrined in Section II, Article II of our Constitution which provides: The State values the dignity of every human person and guarantees full respect for human rights. The Philippines, therefore, has the responsibility of protecting and promoting the right of every person to liberty and due process, ensuring that those detained or arrested can participate in the proceedings before a court, to enable it to decide without delay on the legality of the detention and order their release if justified. In other words, the Philippine authorities are under obligation to make available to every person under detention such remedies which safeguard their fundamental right to liberty. These remedies include the right to be admitted to bail. While this Court in Purganan limited the exercise of the right to bail to criminal proceedings, however, in light of the various international treaties giving recognition and protection to human rights, particularly the right to life and liberty, a reexamination of this Courts ruling in Purganan is in order.

First, we note that the exercise of the States power to deprive an individual of his liberty is not necessarily limited to criminal proceedings. Respondents in

administrative proceedings, such as deportation and quarantine, have likewise been detained.

Second, to limit bail to criminal proceedings would be to close our eyes to our jurisprudential history. Philippine jurisprudence has not limited the exercise of the right to bail to criminal proceedings only. This Court has admitted to bail persons who are not involved in criminal proceedings. In fact, bail has been allowed in this jurisdiction to persons in detention during the pendency of administrative proceedings, taking into cognizance the obligation of the Philippines under international conventions to uphold human rights.

The 1909 case of US v. Go-Sioco is illustrative. In this case, a Chinese facing deportation for failure to secure the necessary certificate of registration was granted bail pending his appeal. After noting that the prospective deportee had committed no crime, the Court opined that To refuse him bail is to treat him as a person who has committed the most serious crime known to law; and that while deportation is not a criminal proceeding, some of the machinery used is the machinery of criminal law. Thus, the provisions relating to bail was applied to deportation proceedings.

In Mejoff v. Director of Prisons and Chirskoff v. Commission of Immigration, this Court ruled that foreign nationals against whom no formal criminal charges have been filed may be released on bail pending the finality of an

order of deportation. As previously stated, the Court in Mejoff relied upon the Universal declaration of Human Rights in sustaining the detainees right to bail.

If bail can be granted in deportation cases, we see no justification why it should not also be allowed in extradition cases. Likewise, considering that the Universal Declaration of Human Rights applies to deportation cases, there is no reason why it cannot be invoked in extradition cases. After all, both are administrative proceedings where the innocence or guilt of the person detained is not in issue.

Clearly, the right of a prospective extraditee to apply for bail in this jurisdiction must be viewed in the light of the various treaty obligations of the Philippines concerning respect for the promotion and protection of human rights. Under these treaties, the presumption lies in favor of human liberty. Thus, the Philippines should see to it that the right to liberty of every individual is not impaired.

Section 2(a) of Presidential Decree (P.D.) No. 1069 (The Philippine Extradition Law) defines extradition as the removal of an accused from the Philippines with the object of placing him at the disposal of foreign authorities to enable the requesting state or government to hold him in connection with any criminal investigation directed against him or the execution of a penalty

imposed on him under the penal or criminal law of the requesting state or government.

Extradition has thus been characterized as the right of a foreign power, created by treaty, to demand the surrender of one accused or convicted of a crime within its territorial jurisdiction, and the correlative duty of the other state to surrender him to the demanding state. It is not a criminal proceeding. Even if the potential extraditee is a criminal, an extradition proceeding is not by its nature criminal, for it is not punishment for a crime, even though such punishment may follow extradition. different nations. It is sui generis, tracing its existence wholly to treaty obligations between It is not a trial to determine the guilt or Nor is it a fullinnocence of the potential extraditee. character.

blown civil action, but one that is merely administrative in Its object is to prevent the escape of a person accused or convicted of a crime and to secure his return to the state from which he fled, for the purpose of trial or punishment.

But while extradition is not a criminal proceeding, it is characterized by the following: (a) it entails a deprivation of liberty on the part of the potential extraditee and (b) the means employed to attain the purpose of extradition is also the machinery of criminal law. This is shown by Section 6 of P.D.

No. 1069 (The Philippine Extradition Law) which mandates the immediate arrest and temporary detention of the accused if such will best serve the interest of justice. We further note that Section 20 allows the requesting state in case of urgency to ask for the provisional arrest of the accused, pending receipt of the request for extradition; and that release from provisional arrest shall not prejudice re-arrest and extradition of the accused if a request for extradition is received subsequently.

Obviously,

an

extradition

proceeding,

while

ostensibly A

administrative, bears all earmarks of a criminal process.

potential extraditee may be subjected to arrest, to a prolonged restraint of liberty, and forced to transfer to the demanding state following the proceedings. Temporary detention may be a necessary step in the process of extradition, but the length of time of the detention should be reasonable.

Records show that private respondent was arrested on September 23, 1999, and remained incarcerated until December 20, 2001, when the trial court ordered his admission to bail. In other words, he had been detained for over two (2) years without having been convicted of any crime. By any

standard, such an extended period of detention is a serious deprivation of his fundamental right to liberty. In fact, it was this prolonged deprivation of liberty which prompted the extradition court to grant him bail.

While our extradition law does not provide for the grant of bail to an extraditee, however, there is no provision prohibiting him or her from filing a motion for bail, a right to due process under the Constitution.

The applicable standard of due process, however, should not be the same as that in criminal proceedings. In the latter, the standard of due process is premised on the presumption of innocence of the accused. As Purganan correctly points out, it is from this major premise that the ancillary presumption in favor of admitting to bail arises. Bearing in mind the purpose of extradition proceedings, the premise behind the issuance of the arrest warrant and the temporary detention is the possibility of flight of the potential extraditee. This is based on the assumption that such extraditee is a fugitive from justice. Given the foregoing, the prospective extraditee thus bears the onus probandi of showing that he or she is not a flight risk and should be granted bail.

The time-honored principle of pacta sunt servanda demands that the Philippines honor its obligations under the Extradition Treaty it entered into with the Hong Kong Special Administrative Region. Failure to comply with these obligations is a setback in our foreign relations and defeats the purpose of extradition. However, it does not necessarily mean that in keeping with its treaty obligations, the Philippines should diminish a potential extraditees rights to life, liberty, and due process. More so, where these rights are guaranteed, not only by our Constitution, but also by international conventions, to which the Philippines is a party. We should not, therefore, deprive an extraditee of his right to apply for bail, provided that a certain standard for the grant is satisfactorily met.

An extradition proceeding being sui generis, the standard of proof required in granting or denying bail can neither be the proof beyond reasonable doubt in criminal cases nor the standard of proof of preponderance of evidence in civil cases. While administrative in character, the standard of substantial evidence used in administrative cases cannot likewise apply given the object of extradition law which is to prevent the prospective extraditee from fleeing our jurisdiction. In his Separate Opinion in Purganan, then Associate Justice, now Chief Justice Reynato S. Puno, proposed that a new standard which he termed clear and

convincing evidence should be used in granting bail in extradition cases. According to him, this standard should be lower than proof beyond reasonable doubt but higher than preponderance of evidence. The potential extraditee must prove by clear and convincing evidence that he is not a flight risk and will abide with all the orders and processes of the extradition court.

In this case, there is no showing that private respondent presented evidence to show that he is not a flight risk. Consequently, this case should be remanded to the trial court to determine whether private respondent may be granted bail on the basis of clear and convincing evidence.

WHEREFORE, we DISMISS the petition. This case is REMANDED to the trial court to determine whether private respondent is entitled to bail on the basis of clear and convincing evidence. If not, the trial court should order the cancellation of his bail bond and his immediate detention; and thereafter, conduct the extradition proceedings with dispatch.

SO ORDERED.

ANGELINA SANDOVALGUTIERREZ Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief Justice

LEONARDO A. QUISUMBING Associate Justice

CONSUELO YNARES-SANTIAGO Associate Justice

ANTONIO T. CARPIO Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

RENATO C. CORONA Associate Justice

CONCHITA CARPIO MORALES Associate Justice

ROMEO J. CALLEJO, SR. Associate Justice

ADOLFO S. AZCUNA Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

DANTE O. TINGA Associate Justice

CANCIO C. GARCIA Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court .

REYNATO PUNO Chief Justice

S.

G.R. No. 148571, September 24, 2002, 389 SCRA 623, 664.

90 Phil. 70 (1951). Sec. 2, Art. II states The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.

In cases involving quarantine to prevent the spread of communicable diseases, bail is not available. See State v. Hutchinson, 18 So.2d. 723, 246 Ala. 48; Varholy v. Sweat, 15 So.2d. 267, 153 Fla. 571, Baker v. Strautz, 54 NE2d. 441, 386 lll. 360.

12 Phil. 490 (1909). Supra, footnote 2. 90 Phil. 256 (1951). Factor v. Laubenheimer, 290 US 276, 78 L. Ed. 315, 54 S. Ct. 101; Terlindon v. Ames, 184 US 270, 46 L.Ed. 534, 22 S.Ct. 484; Fong Yue Ting v. US, 149 US 698, 37 L.Ed. 905, 13 S.Ct. 1016; Fitzpatrick v. Williams, 46 F2d. 40; US v. Godwin, 97 F. Supp. 252, affd. 191 F2d. 932; Dominguez v. State, 234 SW 701, 90 Tex. Crim. 92.

Secretary of Justice v. Lantion, G.R. No. 139465, October 17, 2000, 343 SCRA 377.

US ex rel Oppenheim v. Hecht, 16 F2d. 955, cert den. 273 US 969, 71 L. Ed. 883, 47 S. Ct. 572.

State v. Chase, 107 So. 541, 91 Fla. 413; State v. Quigg, 108 So. 409, 91 Fla. 197.

Benson v. McMahon, 127 US 457, 32 L. Ed. 234, 8 S. Ct. 1240; Jimenez v. Aristequieta, 311 F2d. 547, stay den. 314 F2d. 649.

Spatola v. US, 741 F. Supp. 362, Affd. 925 F2d. 615.

Re Henderson, 145 NW 574, 27 ND 155; State ex rel Tresoder v. Remann, 4 P2d. 866, 165 Wash. 92. Beaulieu v. Hartigan, 554 F.2d 1.

SECOND DIVISION

REPUBLIC OF THE PHILIPPINES, Represented by THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), Petitioner,

G.R. No. 174629

Present:

QUISUMBING, J., Chairperson, - versus AUSTRIA MARTINEZ,* CARPIO MORALES, TINGA, and HON. ANTONIO M. EUGENIO, JR., AS PRESIDING JUDGE OF RTC, MANILA, BRANCH 34, PANTALEON ALVAREZ and LILIA CHENG, Promulgated: VELASCO, JR., JJ.

Respondents.

February 14, 2008

x ---------------------------------------------------------------------------------------x

DECISION

TINGA, J.:

The present petition for certiorari and prohibition under Rule 65 assails the orders and resolutions issued by two different courts in two different cases. The courts and cases in question are the Regional Trial Court of Manila, Branch 24, which heard SP Case No. 06-114200 and the Court of Appeals, Tenth Division, which heared CA-G.R. SP No. 95198. Both cases arose as part of the aftermath of the ruling of this Court in Agan v. PIATCO nullifying the concession agreement awarded to the Philippine International Airport Terminal Corporation (PIATCO) over the Ninoy Aquino International Airport International Passenger Terminal 3 (NAIA 3) Project.

I.

Following the promulgation of Agan, a series of investigations concerning the award of the NAIA 3 contracts to PIATCO were undertaken by the Ombudsman and the Compliance and Investigation Staff (CIS) of petitioner Anti-Money Laundering Council (AMLC). On 24 May 2005, the Office of the Solicitor General (OSG) wrote the AMLC requesting the latters assistance in obtaining more evidence to completely reveal the financial trail of corruption

surrounding the [NAIA 3] Project, and also noting that petitioner Republic of the Philippines was presently defending itself in two international arbitration cases filed in relation to the NAIA 3 Project. The CIS conducted an intelligence database search on the financial transactions of certain individuals involved in the award, including respondent Pantaleon Alvarez (Alvarez) who had been the Chairman of the PBAC Technical Committee, NAIA-IPT3 Project. By this time, Alvarez had already been charged by the Ombudsman with violation of Section 3(j) of R.A. No. 3019. The search revealed that Alvarez maintained eight (8) bank accounts with six (6) different banks.

On 27 June 2005, the AMLC issued Resolution No. 75, Series of 2005, whereby the Council resolved to authorize the Executive Director of the AMLC to sign and verify an application to inquire into and/or examine the [deposits] or investments of Pantaleon Alvarez, Wilfredo Trinidad, Alfredo Liongson, and Cheng Yong, and their related web of accounts wherever these may be found, as defined under Rule 10.4 of the Revised Implementing Rules and Regulations; and to authorize the AMLC Secretariat to conduct an inquiry into subject accounts once the Regional Trial Court grants the application to inquire into and/or examine the bank accounts of those four individuals. The resolution enumerated the particular bank accounts of Alvarez, Wilfredo Trinidad (Trinidad), Alfredo Liongson (Liongson) and Cheng Yong which were to be the subject of the inquiry. The rationale for the said resolution was founded on the cited findings of the CIS that amounts were transferred from a Hong Kong bank account owned by Jetstream Pacific Ltd. Account to bank accounts in the Philippines maintained by Liongson and Cheng Yong. The Resolution also noted that [b]y awarding the contract to PIATCO despite its lack of financial capacity, Pantaleon Alvarez caused undue injury to the government by giving PIATCO unwarranted benefits, advantage, or preference in the discharge of his official administrative functions through manifest partiality, evident bad faith, or gross inexcusable negligence, in violation of Section 3(e) of Republic Act No. 3019.

Under the authority granted by the Resolution, the AMLC filed an application to inquire into or examine the deposits or investments of Alvarez, Trinidad, Liongson and Cheng Yong

before the RTC of Makati, Branch 138, presided by Judge (now Court of Appeals Justice) Sixto Marella, Jr. The application was docketed as AMLC No. 05-005. The Makati RTC heard the testimony of the Deputy Director of the AMLC, Richard David C. Funk II, and received the documentary evidence of the AMLC. Thereafter, on 4 July 2005, the Makati RTC rendered an Order (Makati RTC bank inquiry order) granting the AMLC the authority to inquire and examine the subject bank accounts of Alvarez, Trinidad, Liongson and Cheng Yong, the trial court being satisfied that there existed [p]robable cause [to] believe that the deposits in various bank accounts, details of which appear in paragraph 1 of the Application, are related to the offense of violation of Anti-Graft and Corrupt Practices Act now the subject of criminal prosecution before the Sandiganbayan as attested to by the Informations, Exhibits C, D, E, F, and G. Pursuant to the Makati RTC bank inquiry order, the CIS proceeded to inquire and examine the deposits, investments and related web accounts of the four.

Meanwhile, the Special Prosecutor of the Office of the Ombudsman, Dennis Villa-Ignacio, wrote a letter dated 2 November 2005, requesting the AMLC to investigate the accounts of Alvarez, PIATCO, and several other entities involved in the nullified contract. The letter adverted to probable cause to believe that the bank accounts were used in the commission of unlawful activities that were committed in relation to the criminal cases then pending before the Sandiganbayan. Attached to the letter was a memorandum on why the investigation of the [accounts] is necessary in the prosecution of the above criminal cases before the Sandiganbayan.

In response to the letter of the Special Prosecutor, the AMLC promulgated on 9 December 2005 Resolution No. 121 Series of 2005, which authorized the executive director of the AMLC to inquire into and examine the accounts named in the letter, including one maintained by Alvarez with DBS Bank and two other accounts in the name of Cheng Yong with Metrobank. The Resolution characterized the memorandum attached to the Special Prosecutors letter as extensively justif[ying] the existence of probable cause that the bank accounts of the persons

and entities mentioned in the letter are related to the unlawful activity of violation of Sections 3(g) and 3(e) of Rep. Act No. 3019, as amended.

Following the December 2005 AMLC Resolution, the Republic, through the AMLC, filed an application before the Manila RTC to inquire into and/or examine thirteen (13) accounts and two (2) related web of accounts alleged as having been used to facilitate corruption in the NAIA 3 Project. Among said accounts were the DBS Bank account of Alvarez and the Metrobank accounts of Cheng Yong. The case was raffled to Manila RTC, Branch 24, presided by respondent Judge Antonio Eugenio, Jr., and docketed as SP Case No. 06-114200.

On 12 January 2006, the Manila RTC issued an Order (Manila RTC bank inquiry order) granting the Ex Parte Application expressing therein [that] the allegations in said application to be impressed with merit, and in conformity with Section 11 of R.A. No. 9160, as amended, otherwise known as the Anti-Money Laundering Act (AMLA) of 2001 and Rules 11.1 and 11.2 of the Revised Implementing Rules and Regulations. Authority was thus granted to the AMLC to inquire into the bank accounts listed therein.

On 25 January 2006, Alvarez, through counsel, entered his appearance before the Manila RTC in SP Case No. 06-114200 and filed an Urgent Motion to Stay Enforcement of Order of January 12, 2006. Alvarez alleged that he fortuitously learned of the bank inquiry order, which was issued following an ex parte application, and he argued that nothing in R.A. No. 9160 authorized the AMLC to seek the authority to inquire into bank accounts ex parte. The day after Alvarez filed his motion, 26 January 2006, the Manila RTC issued an Order staying the enforcement of its bank inquiry order and giving the Republic five (5) days to respond to Alvarezs motion.

The Republic filed an Omnibus Motion for Reconsideration of the 26 January 2006 Manila RTC Order and likewise sought to strike out Alvarezs motion that led to the issuance of said order. For his part, Alvarez filed a Reply and Motion to Dismiss the application for bank inquiry order. On 2 May 2006, the Manila RTC issued an Omnibus Order granting the Republics Motion for Reconsideration, denying Alvarezs motion to dismiss and reinstating in full force and effect the Order dated 12 January 2006. In the omnibus order, the Manila RTC reiterated that the material allegations in the application for bank inquiry order filed by the Republic stood as the probable cause for the investigation and examination of the bank accounts and investments of the respondents.

Alvarez filed on 10 May 2006 an Urgent Motion expressing his apprehension that the AMLC would immediately enforce the omnibus order and would thereby render the motion for reconsideration he intended to file as moot and academic; thus he sought that the Republic be refrained from enforcing the omnibus order in the meantime. Acting on this motion, the Manila RTC, on 11 May 2006, issued an Order requiring the OSG to file a comment/opposition and reminding the parties that judgments and orders become final and executory upon the expiration of fifteen (15) days from receipt thereof, as it is the period within which a motion for reconsideration could be filed. Alvarez filed his Motion for Reconsideration of the omnibus order on 15 May 2006. 2006, but the motion was denied by the Manila RTC in an Order dated 5 July

On 11 July 2006, Alvarez filed an Urgent Motion and Manifestation wherein he manifested having received reliable information that the AMLC was about to implement the Manila RTC bank inquiry order even though he was intending to appeal from it. On the premise that only a final and executory judgment or order could be executed or implemented, Alvarez sought that the AMLC be immediately ordered to refrain from enforcing the Manila RTC bank inquiry order.

On 12 July 2006, the Manila RTC, acting on Alvarezs latest motion, issued an Order directing the AMLC to refrain from enforcing the order dated January 12, 2006 until the expiration of the period to appeal, without any appeal having been filed. On the same day, Alvarez filed a Notice of Appeal with the Manila RTC.

On 24 July 2006, Alvarez filed an Urgent Ex Parte Motion for Clarification. Therein, he alleged having learned that the AMLC had began to inquire into the bank accounts of the other persons mentioned in the application for bank inquiry order filed by the Republic. Considering that the Manila RTC bank inquiry order was issued ex parte, without notice to those other persons, Alvarez prayed that the AMLC be ordered to refrain from inquiring into any of the other bank deposits and alleged web of accounts enumerated in AMLCs application with the RTC; and that the AMLC be directed to refrain from using, disclosing or publishing in any proceeding or venue any information or document obtained in violation of the 11 May 2006 RTC Order.

On 25 July 2006, or one day after Alvarez filed his motion, the Manila RTC issued an Order wherein it clarified that the Ex Parte Order of this Court dated January 12, 2006 can not be implemented against the deposits or accounts of any of the persons enumerated in the AMLC Application until the appeal of movant Alvarez is finally resolved, otherwise, the appeal would be rendered moot and academic or even nugatory. In addition, the AMLC was ordered not to disclose or publish any information or document found or obtained in [v]iolation of the May 11, 2006 Order of this Court. The Manila RTC reasoned that the other persons mentioned in AMLCs application were not served with the courts 12 January 2006 Order. This 25 July 2006 Manila RTC Order is the first of the four rulings being assailed through this petition.

In response, the Republic filed an Urgent Omnibus Motion for Reconsideration dated 27 July 2006, urging that it be allowed to immediately enforce the bank inquiry order against

Alvarez and that Alvarezs notice of appeal be expunged from the records since appeal from an order of inquiry is disallowed under the Anti money Laundering Act (AMLA).

Meanwhile, respondent Lilia Cheng filed with the Court of Appeals a Petition for Certiorari, Prohibition and Mandamus with Application for TRO and/or Writ of Preliminary Injunction dated 10 July 2006, directed against the Republic of the Philippines through the AMLC, Manila RTC Judge Eugenio, Jr. and Makati RTC Judge Marella, Jr.. She identified herself as the wife of Cheng Yong with whom she jointly owns a conjugal bank account with Citibank that is covered by the Makati RTC bank inquiry order, and two conjugal bank accounts with Metrobank that are covered by the Manila RTC bank inquiry order. Lilia Cheng imputed grave abuse of discretion on the part of the Makati and Manila RTCs in granting AMLCs ex parte applications for a bank inquiry order, arguing among others that the ex parte applications violated her constitutional right to due process, that the bank inquiry order under the AMLA can only be granted in connection with violations of the AMLA and that the AMLA can not apply to bank accounts opened and transactions entered into prior to the effectivity of the AMLA or to bank accounts located outside the Philippines.

On 1 August 2006, the Court of Appeals, acting on Lilia Chengs petition, issued a Temporary Restraining Order enjoining the Manila and Makati trial courts from implementing, enforcing or executing the respective bank inquiry orders previously issued, and the AMLC from enforcing and implementing such orders. On even date, the Manila RTC issued an Order resolving to hold in abeyance the resolution of the urgent omnibus motion for reconsideration then pending before it until the resolution of Lilia Chengs petition for certiorari with the Court of Appeals. The Court of Appeals Resolution directing the issuance of the temporary restraining order is the second of the four rulings assailed in the present petition.

The third assailed ruling was issued on 15 August 2006 by the Manila RTC, acting on the Urgent Motion for Clarification dated 14 August 2006 filed by Alvarez. It appears that the 1 August 2006 Manila RTC Order had amended its previous 25 July 2006 Order by deleting the last paragraph which stated that the AMLC should not disclose or publish any information or document found or obtained in violation of the May 11, 2006 Order of this Court. In this new motion, Alvarez argued that the deletion of that paragraph would allow the AMLC to implement the bank inquiry orders and publish whatever information it might obtain thereupon even before the final orders of the Manila RTC could become final and executory. In the 15 August 2006 Order, the Manila RTC reiterated that the bank inquiry order it had issued could not be implemented or enforced by the AMLC or any of its representatives until the appeal therefrom was finally resolved and that any enforcement thereof would be unauthorized.

The present Consolidated Petition for certiorari and prohibition under Rule 65 was filed on 2 October 2006, assailing the two Orders of the Manila RTC dated 25 July and 15 August 2006 and the Temporary Restraining Order dated 1 August 2006 of the Court of Appeals. Through an Urgent Manifestation and Motion dated 9 October 2006, petitioner informed the Court that on 22 September 2006, the Court of Appeals hearing Lilia Chengs petition had granted a writ of preliminary injunction in her favor. Thereafter, petitioner sought as well the nullification of the 22 September 2006 Resolution of the Court of Appeals, thereby constituting the fourth ruling assailed in the instant petition.

The Court had initially granted a Temporary Restraining Order dated 6 October 2006 and later on a Supplemental Temporary Restraining Order dated 13 October 2006 in petitioners favor, enjoining the implementation of the assailed rulings of the Manila RTC and the Court of Appeals. However, on respondents motion, the Court, through a Resolution dated 11 December 2006, suspended the implementation of the restraining orders it had earlier issued.

Oral arguments were held on 17 January 2007. The Court consolidated the issues for argument as follows:

1. Did the RTC-Manila, in issuing the Orders dated 25 July 2006 and 15 August 2006 which deferred the implementation of its Order dated 12 January 2006, and the Court of Appeals, in issuing its Resolution dated 1 August 2006, which ordered the status quo in relation to the 1 July 2005 Order of the RTCMakati and the 12 January 2006 Order of the RTC-Manila, both of which authorized the examination of bank accounts under Section 11 of Rep. Act No. 9160 (AMLA), commit grave abuse of discretion? (a) Is an application for an order authorizing inquiry into or examination of bank accounts or investments under Section 11 of the AMLA ex-parte in nature or one which requires notice and hearing? (b) What legal procedures and standards should be observed in the conduct of the proceedings for the issuance of said order? (c) Is such order susceptible to legal challenges and judicial review? 2. Is it proper for this Court at this time and in this case to inquire into and pass upon the validity of the 1 July 2005 Order of the RTC-Makati and the 12 January 2006 Order of the RTC-Manila, considering the pendency of CA G.R. SP No. 95-198 (Lilia Cheng v. Republic) wherein the validity of both orders was challenged?

After the oral arguments, the parties were directed to file their respective memoranda, which they did, and the petition was thereafter deemed submitted for resolution.

II.

Petitioners general advocacy is that the bank inquiry orders issued by the Manila and Makati RTCs are valid and immediately enforceable whereas the assailed rulings, which effectively stayed the enforcement of the Manila and Makati RTCs bank inquiry orders, are sullied with grave abuse of discretion. These conclusions flow from the posture that a bank inquiry order, issued upon a finding of probable cause, may be issued ex parte and, once issued, is immediately executory. Petitioner further argues that the information obtained following the bank inquiry is necessarily beneficial, if not indispensable, to the AMLC in discharging its awesome responsibility regarding the effective implementation of the AMLA and that any restraint in the disclosure of such information to appropriate agencies or other judicial fora would render meaningless the relief supplied by the bank inquiry order.

Petitioner raises particular arguments questioning Lilia Chengs right to seek injunctive relief before the Court of Appeals, noting that not one of the bank inquiry orders is directed against her. Her cryptic assertion that she is the wife of Cheng Yong cannot, according to petitioner, metamorphose into the requisite legal standing to seek redress for an imagined injury or to maintain an action in behalf of another. In the same breath, petitioner argues that Alvarez cannot assert any violation of the right to financial privacy in behalf of other persons whose bank accounts are being inquired into, particularly those other persons named in the Makati RTC bank inquiry order who did not take any step to oppose such orders before the courts.

Ostensibly, the proximate question before the Court is whether a bank inquiry order issued in accordance with Section 10 of the AMLA may be stayed by injunction. Yet in arguing that it does, petitioner relies on what it posits as the final and immediately executory character of the bank inquiry orders issued by the Manila and Makati RTCs. Implicit in that position is the notion that the inquiry orders are valid, and such notion is susceptible to review and validation based on what appears on the face of the orders and the applications which triggered their issuance, as well as the provisions of the AMLA governing the issuance of such orders. Indeed, to test the viability of petitioners argument, the Court will have to be satisfied that the subject

inquiry orders are valid in the first place. However, even from a cursory examination of the applications for inquiry order and the orders themselves, it is evident that the orders are not in accordance with law.

III.

A brief overview of the AMLA is called for.

Money laundering has been generally defined by the International Criminal Police Organization (Interpol) `as any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources. Even before the passage of the AMLA, the problem was addressed by the Philippine government through the issuance of various circulars by the Bangko Sentral ng Pilipinas. Yet ultimately, legislative proscription was necessary, especially with the inclusion of the Philippines in the Financial Action Task Forces list of non-cooperative countries and territories in the fight against money laundering. The original AMLA, Republic Act (R.A.) No. 9160, was passed in 2001. It was amended by R.A. No. 9194 in 2003.

Section 4 of the AMLA states that [m]oney laundering is a crime whereby the proceeds of an unlawful activity as [defined in the law] are transacted, thereby making them appear to have originated from legitimate sources. The section further provides the three modes through which the crime of money laundering is committed. Section 7 creates the AMLC and defines its powers, which generally relate to the enforcement of the AMLA provisions and the initiation of legal actions authorized in the AMLA such as civil forefeiture proceedings and complaints for the prosecution of money laundering offenses.

In addition to providing for the definition and penalties for the crime of money laundering, the AMLA also authorizes certain provisional remedies that would aid the AMLC in the enforcement of the AMLA. These are the freeze order authorized under Section 10, and the bank inquiry order authorized under Section 11.

Respondents posit that a bank inquiry order under Section 11 may be obtained only upon the pre-existence of a money laundering offense case already filed before the courts. The conclusion is based on the phrase upon order of any competent court in cases of violation of this Act, the word cases generally understood as referring to actual cases pending with the courts.

We are unconvinced by this proposition, and agree instead with the then Solicitor General who conceded that the use of the phrase in cases of was unfortunate, yet submitted that it should be interpreted to mean in the event there are violations of the AMLA, and not that there are already cases pending in court concerning such violations. If the contrary position is adopted, then the bank inquiry order would be limited in purpose as a tool in aid of litigation of live cases, and wholly inutile as a means for the government to ascertain whether there is sufficient evidence to sustain an intended prosecution of the account holder for violation of the AMLA. Should that be the situation, in all likelihood the AMLC would be virtually deprived of its character as a discovery tool, and thus would become less circumspect in filing complaints against suspect account holders. After all, under such set-up the preferred strategy would be to allow or even encourage the indiscriminate filing of complaints under the AMLA with the hope or expectation that the evidence of money laundering would somehow surface during the trial. Since the AMLC could not make use of the bank inquiry order to determine whether there is evidentiary basis to prosecute the suspected malefactors, not filing any case at all would not be an alternative. Such unwholesome set-up should not come to pass. Thus Section 11 cannot be interpreted in a way that would emasculate the remedy it has established and encourage the unfounded initiation of complaints for money laundering.

Still, even if the bank inquiry order may be availed of without need of a pre-existing case under the AMLA, it does not follow that such order may be availed of ex parte. There are several reasons why the AMLA does not generally sanction ex parte applications and issuances of the bank inquiry order.

IV.

It is evident that Section 11 does not specifically authorize, as a general rule, the issuance ex parte of the bank inquiry order. We quote the provision in full:

SEC. 11. Authority to Inquire into Bank Deposits. Notwithstanding the provisions of Republic Act No. 1405, as amended, Republic Act No. 6426, as amended, Republic Act No. 8791, and other laws, the AMLC may inquire into or examine any particular deposit or investment with any banking institution or non bank financial institution upon order of any competent court in cases of violation of this Act, when it has been established that there is probable cause that the deposits or investments are related to an unlawful activity as defined in Section 3(i) hereof or a money laundering offense under Section 4 hereof, except that no court order shall be required in cases involving unlawful activities defined in Sections 3(i)1, (2) and (12). To ensure compliance with this Act, the Bangko Sentral ng Pilipinas (BSP) may inquire into or examine any deposit of investment with any banking institution or non bank financial institution when the examination is made in the course of a periodic or special examination, in accordance with the rules of examination of the BSP. (Emphasis supplied)

Of course, Section 11 also allows the AMLC to inquire into bank accounts without having to obtain a judicial order in cases where there is probable cause that the deposits or

investments are related to kidnapping for ransom, certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking and other violations under R.A. No. 6235, destructive arson and murder. Since such special circumstances do not apply in this case, there is no need for us to pass comment on this proviso. Suffice it to say, the proviso contemplates a situation distinct from that which presently confronts us, and for purposes of the succeeding discussion, our reference to Section 11 of the AMLA excludes said proviso.

In the instances where a court order is required for the issuance of the bank inquiry order, nothing in Section 11 specifically authorizes that such court order may be issued ex parte. It might be argued that this silence does not preclude the ex parte issuance of the bank inquiry order since the same is not prohibited under Section 11. Yet this argument falls when the immediately preceding provision, Section 10, is examined.

SEC. 10. Freezing of Monetary Instrument or Property. The Court of Appeals, upon application ex parte by the AMLC and after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity as defined in Section 3(i) hereof, may issue a freeze order which shall be effective immediately. The freeze order shall be for a period of twenty (20) days unless extended by the court.

Although oriented towards different purposes, the freeze order under Section 10 and the bank inquiry order under Section 11 are similar in that they are extraordinary provisional reliefs which the AMLC may avail of to effectively combat and prosecute money laundering offenses. Crucially, Section 10 uses specific language to authorize an ex parte application for the provisional relief therein, a circumstance absent in Section 11. If indeed the legislature had intended to authorize ex parte proceedings for the issuance of the bank inquiry order, then it could have easily expressed such intent in the law, as it did with the freeze order under Section 10.

Even more tellingly, the current language of Sections 10 and 11 of the AMLA was crafted at the same time, through the passage of R.A. No. 9194. Prior to the amendatory law, it was the AMLC, not the Court of Appeals, which had authority to issue a freeze order, whereas a bank inquiry order always then required, without exception, an order from a competent court. It was through the same enactment that ex parte proceedings were introduced for the first time into the AMLA, in the case of the freeze order which now can only be issued by the Court of Appeals. It certainly would have been convenient, through the same amendatory law, to allow a similar ex parte procedure in the case of a bank inquiry order had Congress been so minded. Yet nothing in the provision itself, or even the available legislative record, explicitly points to an ex parte judicial procedure in the application for a bank inquiry order, unlike in the case of the freeze order.

That the AMLA does not contemplate ex parte proceedings in applications for bank inquiry orders is confirmed by the present implementing rules and regulations of the AMLA, promulgated upon the passage of R.A. No. 9194. With respect to freeze orders under Section 10, the implementing rules do expressly provide that the applications for freeze orders be filed ex parte, but no similar clearance is granted in the case of inquiry orders under Section 11. These implementing rules were promulgated by the Bangko Sentral ng Pilipinas, the Insurance Commission and the Securities and Exchange Commission, and if it was the true belief of these institutions that inquiry orders could be issued ex parte similar to freeze orders, language to that effect would have been incorporated in the said Rules. This is stressed not because the implementing rules could authorize ex parte applications for inquiry orders despite the absence of statutory basis, but rather because the framers of the law had no intention to allow such ex parte applications.

Even the Rules of Procedure adopted by this Court in A.M. No. 05-11-04-SC to enforce the provisions of the AMLA specifically authorize ex parte applications with respect to freeze

orders under Section 10 but make no similar authorization with respect to bank inquiry orders under Section 11.

The Court could divine the sense in allowing ex parte proceedings under Section 10 and in proscribing the same under Section 11. A freeze order under Section 10 on the one hand is aimed at preserving monetary instruments or property in any way deemed related to unlawful activities as defined in Section 3(i) of the AMLA. The owner of such monetary instruments or property would thus be inhibited from utilizing the same for the duration of the freeze order. To make such freeze order anteceded by a judicial proceeding with notice to the account holder would allow for or lead to the dissipation of such funds even before the order could be issued.

On the other hand, a bank inquiry order under Section 11 does not necessitate any form of physical seizure of property of the account holder. What the bank inquiry order authorizes is the examination of the particular deposits or investments in banking institutions or non-bank financial institutions. The monetary instruments or property deposited with such banks or financial institutions are not seized in a physical sense, but are examined on particular details such as the account holders record of deposits and transactions. Unlike the assets subject of the freeze order, the records to be inspected under a bank inquiry order cannot be physically seized or hidden by the account holder. Said records are in the possession of the bank and therefore cannot be destroyed at the instance of the account holder alone as that would require the extraordinary cooperation and devotion of the bank.

Interestingly, petitioners memorandum does not attempt to demonstrate before the Court that the bank inquiry order under Section 11 may be issued ex parte, although the petition itself did devote some space for that argument. The petition argues that the bank inquiry order is a special and peculiar remedy, drastic in its name, and made necessary because of a public necessity [t]hus, by its very nature, the application for an order or inquiry must necessarily, be

ex parte. This argument is insufficient justification in light of the clear disinclination of Congress to allow the issuance ex parte of bank inquiry orders under Section 11, in contrast to the legislatures clear inclination to allow the ex parte grant of freeze orders under Section 10.

Without doubt, a requirement that the application for a bank inquiry order be done with notice to the account holder will alert the latter that there is a plan to inspect his bank account on the belief that the funds therein are involved in an unlawful activity or money laundering offense. Still, the account holder so alerted will in fact be unable to do anything to conceal or cleanse his bank account records of suspicious or anomalous transactions, at least not without the wholehearted cooperation of the bank, which inherently has no vested interest to aid the account holder in such manner.

V.

The necessary implication of this finding that Section 11 of the AMLA does not generally authorize the issuance ex parte of the bank inquiry order would be that such orders cannot be issued unless notice is given to the owners of the account, allowing them the opportunity to contest the issuance of the order. Without such a consequence, the legislated distinction between ex parte proceedings under Section 10 and those which are not ex parte under Section 11 would be lost and rendered useless.

There certainly is fertile ground to contest the issuance of an ex parte order. Section 11 itself requires that it be established that there is probable cause that the deposits or investments are related to unlawful activities, and it obviously is the court which stands as arbiter whether there is indeed such probable cause. The process of inquiring into the existence of probable cause would involve the function of determination reposed on the trial court. Determination clearly

implies a function of adjudication on the part of the trial court, and not a mechanical application of a standard pre-determination by some other body. The word "determination" implies deliberation and is, in normal legal contemplation, equivalent to "the decision of a court of justice."

The court receiving the application for inquiry order cannot simply take the AMLCs word that probable cause exists that the deposits or investments are related to an unlawful activity. It will have to exercise its own determinative function in order to be convinced of such fact. The account holder would be certainly capable of contesting such probable cause if given the opportunity to be apprised of the pending application to inquire into his account; hence a notice requirement would not be an empty spectacle. It may be so that the process of obtaining the inquiry order may become more cumbersome or prolonged because of the notice requirement, yet we fail to see any unreasonable burden cast by such circumstance. After all, as earlier stated, requiring notice to the account holder should not, in any way, compromise the integrity of the bank records subject of the inquiry which remain in the possession and control of the bank.

Petitioner argues that a bank inquiry order necessitates a finding of probable cause, a characteristic similar to a search warrant which is applied to and heard ex parte. We have examined the supposed analogy between a search warrant and a bank inquiry order yet we remain to be unconvinced by petitioner.

The Constitution and the Rules of Court prescribe particular requirements attaching to search warrants that are not imposed by the AMLA with respect to bank inquiry orders. A constitutional warrant requires that the judge personally examine under oath or affirmation the complainant and the witnesses he may produce, such examination being in the form of searching questions and answers. Those are impositions which the legislative did not specifically prescribe

as to the bank inquiry order under the AMLA, and we cannot find sufficient legal basis to apply them to Section 11 of the AMLA. Simply put, a bank inquiry order is not a search warrant or warrant of arrest as it contemplates a direct object but not the seizure of persons or property.

Even as the Constitution and the Rules of Court impose a high procedural standard for the determination of probable cause for the issuance of search warrants which Congress chose not to prescribe for the bank inquiry order under the AMLA, Congress nonetheless disallowed ex parte applications for the inquiry order. We can discern that in exchange for these procedural standards normally applied to search warrants, Congress chose instead to legislate a right to notice and a right to be heard characteristics of judicial proceedings which are not ex parte. Absent any demonstrable constitutional infirmity, there is no reason for us to dispute such legislative policy choices.

VI.

The Courts construction of Section 11 of the AMLA is undoubtedly influenced by right to privacy considerations. If sustained, petitioners argument that a bank account may be inspected by the government following an ex parte proceeding about which the depositor would know nothing would have significant implications on the right to privacy, a right innately cherished by all notwithstanding the legally recognized exceptions thereto. The notion that the government could be so empowered is cause for concern of any individual who values the right to privacy which, after all, embodies even the right to be let

alone, the most comprehensive of rights and the right most valued by civilized people.

One might assume that the constitutional dimension of the right to privacy, as applied to bank deposits, warrants our present inquiry. We decline to do so. Admittedly, that question has proved controversial in American jurisprudence. Notably, the United States Supreme Court in U.S. v. Miller held that there was no legitimate expectation of privacy as to the bank records of a depositor. Moreover, the text of our Constitution has not bothered with the triviality of allocating specific rights peculiar to bank deposits.

However, sufficient for our purposes, we can assert there is a right to privacy governing bank accounts in the Philippines, and that such right finds application to the case at bar. The source of such right is statutory, expressed as it is in R.A. No. 1405 otherwise known as the Bank Secrecy Act of 1955. The right to privacy is enshrined in Section 2 of that law, to wit:

SECTION 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation. (Emphasis supplied)

Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a basic state policy in the Philippines. Subsequent laws, including the AMLA, may have added exceptions to the Bank Secrecy Act, yet the secrecy of bank deposits still lies as the general rule.

It falls within the zones of privacy recognized by our laws. The framers of the 1987 Constitution likewise recognized that bank accounts are not covered by either the right to information under Section 7, Article III or under the requirement of full public disclosure under Section 28, Article II. Unless the Bank Secrecy Act is repealed or

amended, the legal order is obliged to conserve the absolutely confidential nature of Philippine bank deposits.

Any exception to the rule of absolute confidentiality must be specifically legislated. Section 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts may be examined by any person, government official, bureau or office; namely when: (1) upon written permission of the depositor; (2) in cases of impeachment; (3) the examination of bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of public officials; and (4) the money deposited or invested is the subject matter of the litigation. Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been recognized by this Court as constituting an additional exception to the rule of absolute confidentiality, and there have been other similar recognitions as well.

The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC may inquire into a bank account upon order of any competent court in cases of violation of the AMLA, it having been established that there is probable cause that the deposits or investments are related to unlawful activities as defined in Section 3(i) of the law, or a money laundering offense under Section 4 thereof. Further, in instances where there is probable cause that the deposits or investments are related to kidnapping for ransom, certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking and other violations under R.A. No. 6235, destructive arson and murder, then there is no need for the AMLC to obtain a court order before it could inquire into such accounts.

It cannot be successfully argued the proceedings relating to the bank inquiry order under Section 11 of the AMLA is a litigation encompassed in one of the exceptions to the Bank Secrecy Act which is when the money deposited or invested is the subject matter of the litigation. The orientation of the bank inquiry order is simply to serve as a provisional relief or remedy. As earlier stated, the application for such does not entail a full-blown trial.

Nevertheless, just because the AMLA establishes additional exceptions to the Bank Secrecy Act it does not mean that the later law has dispensed with the general principle established in the older law that [a]ll deposits of whatever nature with banks or banking institutions in the Philippines x x x are hereby considered as of an absolutely confidential nature. Indeed, by force of statute, all bank deposits are absolutely confidential, and that nature is unaltered even by the legislated exceptions referred to above. There is disfavor towards construing these exceptions in such a manner that would authorize unlimited discretion on the part of the government or of any party seeking to enforce those exceptions and inquire into bank deposits. If there are doubts in upholding the absolutely confidential nature of bank deposits

against affirming the authority to inquire into such accounts, then such doubts must be resolved in favor of the former. Such a stance would persist unless Congress passes a law reversing the general state policy of preserving the absolutely confidential nature of Philippine bank accounts.

The presence of this statutory right to privacy addresses at least one of the arguments raised by petitioner, that Lilia Cheng had no personality to assail the inquiry orders before the Court of Appeals because she was not the subject of said orders. AMLC Resolution No. 75, which served as the basis in the successful application for the Makati inquiry order, expressly adverts to Citibank Account No. 88576248 owned by Cheng Yong and/or Lilia G. Cheng with Citibank N.A., whereas Lilia Chengs petition before the Court of Appeals is accompanied by a certification from Metrobank that Account Nos. 300852436-0 and 700149801-7, both of which are among the subjects of the Manila inquiry order, are accounts in the name of Yong Cheng or Lilia Cheng. Petitioner does not specifically deny that Lilia Cheng holds rights of ownership over the three said accounts, laying focus instead on the fact that she was not named as a subject of either the Makati or Manila RTC inquiry orders. We are reasonably convinced that Lilia Cheng has sufficiently demonstrated her joint ownership of the three accounts, and such conclusion leads us to acknowledge that she has the standing to assail via certiorari the inquiry orders authorizing the examination of her bank accounts as the orders interfere with her statutory right to maintain the secrecy of said accounts.

While petitioner would premise that the inquiry into Lilia Chengs accounts finds root in Section 11 of the AMLA, it cannot be denied that the authority to inquire under Section 11 is only exceptional in character, contrary as it is to the general rule preserving the secrecy of bank deposits. Even though she may not have been the subject of the inquiry orders, her bank accounts nevertheless were, and she thus has the standing to vindicate the right to secrecy that attaches to said accounts and their owners. This statutory right to privacy will not prevent the courts from authorizing the inquiry anyway upon the fulfillment of the requirements set forth under Section

11 of the AMLA or Section 2 of the Bank Secrecy Act; at the same time, the owner of the accounts have the right to challenge whether the requirements were indeed complied with.

VII.

There is a final point of concern which needs to be addressed. Lilia Cheng argues that the AMLA, being a substantive penal statute, has no retroactive effect and the bank inquiry order could not apply to deposits or investments opened prior to the effectivity of Rep. Act No. 9164, or on 17 October 2001. Thus, she concludes, her subject bank accounts, opened between 1989 to 1990, could not be the subject of the bank inquiry order lest there be a violation of the constitutional prohibition against ex post facto laws.

No ex post facto law may be enacted, and no law may be construed in such fashion as to permit a criminal prosecution offensive to the ex post facto clause. As applied to the AMLA, it is plain that no person may be prosecuted under the penal provisions of the AMLA for acts committed prior to the enactment of the law on 17 October 2001. As much was understood by the lawmakers since they deliberated upon the AMLA, and indeed there is no serious dispute on that point.

Does the proscription against ex post facto laws apply to the interpretation of Section 11, a provision which does not provide for a penal sanction but which merely authorizes the inspection of suspect accounts and deposits? The answer is in the affirmative. In this jurisdiction, we have defined an ex post facto law as one which either:

(1) makes criminal an act done before the passage of the law and which was innocent when done, and punishes such an act; (2) committed; aggravates a crime, or makes it greater than it was, when

(3) changes the punishment and inflicts a greater punishment than the law annexed to the crime when committed; (4) alters the legal rules of evidence, and authorizes conviction upon less or different testimony than the law required at the time of the commission of the offense; (5) assuming to regulate civil rights and remedies only, in effect imposes penalty or deprivation of a right for something which when done was lawful; and (6) deprives a person accused of a crime of some lawful protection to which he has become entitled, such as the protection of a former conviction or acquittal, or a proclamation of amnesty . (Emphasis supplied)

Prior to the enactment of the AMLA, the fact that bank accounts or deposits were involved in activities later on enumerated in Section 3 of the law did not, by itself, remove such accounts from the shelter of absolute confidentiality. Prior to the AMLA, in order that bank accounts could be examined, there was need to secure either the written permission of the depositor or a court order authorizing such examination, assuming that they were involved in cases of bribery or dereliction of duty of public officials, or in a case where the money deposited or invested was itself the subject matter of the litigation. The passage of the AMLA stripped another layer off the rule on absolute confidentiality that provided a measure of lawful protection to the account holder. For that reason, the application of the bank inquiry order as a means of inquiring into records of transactions entered into prior to the passage of the AMLA would be constitutionally infirm, offensive as it is to the ex post facto clause.

Still, we must note that the position submitted by Lilia Cheng is much broader than what we are willing to affirm. She argues that the proscription against ex post facto laws goes as far as to prohibit any inquiry into deposits or investments included in bank accounts opened prior to the effectivity of the AMLA even if the suspect transactions were entered into when the law had

already taken effect. The Court recognizes that if this argument were to be affirmed, it would create a horrible loophole in the AMLA that would in turn supply the means to fearlessly engage in money laundering in the Philippines; all that the criminal has to do is to make sure that the money laundering activity is facilitated through a bank account opened prior to 2001. Lilia Cheng admits that actual money launderers could utilize the ex post facto provision of the Constitution as a shield but that the remedy lay with Congress to amend the law. We can hardly presume that Congress intended to enact a self-defeating law in the first place, and the courts are inhibited from such a construction by the cardinal rule that a law should be interpreted with a view to upholding rather than destroying it.

Besides, nowhere in the legislative record cited by Lilia Cheng does it appear that there was an unequivocal intent to exempt from the bank inquiry order all bank accounts opened prior to the passage of the AMLA. There is a cited exchange between Representatives Ronaldo Zamora and Jaime Lopez where the latter confirmed to the former that deposits are supposed to be exempted from scrutiny or monitoring if they are already in place as of the time the law is enacted. That statement does indicate that transactions already in place when the AMLA was passed are indeed exempt from scrutiny through a bank inquiry order, but it cannot yield any interpretation that records of transactions undertaken after the enactment of the AMLA are similarly exempt. Due to the absence of cited authority from the legislative record that unqualifiedly supports respondent Lilia Chengs thesis, there is no cause for us to sustain her interpretation of the AMLA, fatal as it is to the anima of that law.

IX.

We are well aware that Lilia Chengs petition presently pending before the Court of Appeals likewise assails the validity of the subject bank inquiry orders and precisely seeks the annulment of said orders. Our current declarations may indeed have the effect of preempting that0 petition. Still, in order for this Court to rule on the petition at bar which insists on the enforceability of the said bank inquiry orders, it is necessary for us to consider and rule on the same question which after all is a pure question of law.

WHEREFORE, the PETITION is DISMISSED. No pronouncement as to costs.

SO ORDERED.

DANTE O. TINGA Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING Associate Justice Chairperson

MA. ALICIA AUSTRIA MARTINEZ

CONCHITA CARPIO MORALES

Associate Justice

Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING Associate Justice Chairperson, Second Division

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice

*As replacement of Justice Antonio T. Carpio who inhibited himself per Administrative Circular No. 84-2007.

Entitled In the Matter of the Application for An Order Allowing An Inquiry Into Certain Bank Accounts or Investments and Related Web of Accounts, The Republic of the Philippines Represented by the Anti-Money Laundering Council, Applicant.

Entitled Lilia Cheng v. Republic of the Philippines represented by the Anti-Money Laundering Council (AMLC), Hon. Antonio M. Eugenio, As Presiding Judge of the RTC Manila, Br. 24; Hon. Sixto Marella, Jr., as Presiding Judge of RTC, Makati City, Br. 38; and John Does.

G.R. No. 155001.

Rollo, p. 96.

Id. at 97.

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: (j) Knowingly approving or granting any license, permit, privilege or benefit in favor of any person not qualified for or not legally entitled to such license, permit, privilege or advantage, or of a mere representative or dummy of one who is not so qualified or entitled.

Rollo, p. 98.

Id. at 96-100.

Id. at 99-100.

Id. at 98.

Id.

Id. at 99.

Id. at 101.

Id.

Id.

Id. at 27.

Id. at 104.

Id.

Id. at 105-107.

Id. at 106.

See id. at 109-110.

Id. at 109.

Id. at 111.

Id. at 111-117.

Id. at 111.

Id. at 118.

Id. at 119-130.

Id. at 131-141.

Id. at 142-147.

Id. at 146.

Id. at 148-149.

Id. at 150.

Id. at 151-158.

Id. at 167.

Id. at 168-169.

Id. at 171. .

Id. at 172-173.

Id. at 174-175.

Id. at 174.

Id. at 175.

Id. at 68-69.

Id. at 69.

Id.

Id. at 176-186.

Id. at 187-249.

Id. at 189.

Id. at 200-201.

Id. at 73-77.

Id. at 78.

Order dated 15 August 2006, see id. at 71.

Id. at 285-287.

Id. at 285-286.

Id. at 286.

Id. at 71.

Id. at 6-65.

Id. at 299-304.

See id. at 310.

Id. at 302.

Id. at 297-298.

Id. at 312-313.

Id. at 549-551.

Id. at 752-753.

See rollo, pp. 786-828; 867-910; 913-936.

See Funds derived from criminal activities (FOPAC) , (http://www.interpol.int/Public/ FinancialCrime/MoneyLaundering/default.asp, last visited 8 December 2007). See also J.M.B. TIROL, THE ANTI-MONEY LAUNDERING LAW OF THE PHILIPPINES Annotated (2nd ed., 2007), at 3.

TIROL, supra note 64, at 4-6. The Financial Action Task Force was established in 1989 by the so-called Group of 7 countries to formulate and encourage the adoption of international standards and measures to fight money laundering and related activities. Id. at 28.

Republic Act No. 9160 (2002), Sec. 4.

Republic Act No. 9160 (2002), Secs. 7(3) and (4).

See rollo, pp. 809-810, 932.

Id. at 600-601.

Republic Act No. 9194 (2003), Sec. 11.

Under Article 267 of the Revised Penal Code.

Particularly Sections 4, 5, 6, 8, 9, 10, 12, 13, 14, 15, and 16 thereof.

Republic Act No. 9194 (2003), Sec. 10.

Unlike in the present law which authorizes the issuance without need of judicial order when there is probable cause that the deposits are involved in such specifically enumerated crimes as kidnapping, hijacking, destructive arson and murder, and violations of some provisions of the Dangerous Drugs Act of 2002. See Sec. 11, R.A. No. 9194, in connection with Section 3(i).

Rule 10.1. When the AMLC may apply for the freezing of any monetary instrument or property.

(a) after an investigation conducted by the AMLC and upon determination that probable cause exists that a monetary instrument or property is in any way related to any unlawful activity as defined under section 3(i). The AMLC may file an ex-parte application before the the Court of Appeals for the issuance of a freeze order on any monetary instrument or property subject thereof prior to the institution or in the course of, the criminal proceedings involving the unlawful activity to which said monetary instrument or property is any way related. Rule 10.1, Revised Implementing Rules And Regulations R.A. No. 9160, As Amended By R.A. No. 9194. (Emphasis supplied)

See Rule 11.1, Revised Implementing Rules And Regulations R.A. No. 9160, As Amended By R.A. No. 9194. Rule 11.1. Authority to Inquire into Bank Deposits With Court Order. Notwithstanding the provisions of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, and other laws, the AMLC may inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution AND THEIR SUBSIDIARIES AND AFFILIATES upon order of any competent court in cases of violation of this Act, when it has been established that there is probable cause that the deposits or investments involved are related to an unlawful activity as defined in Section 3(j) hereof or a money laundering offense under Section 4 hereof; except in cases as provided under Rule 11.2.

Republic Act No. 9160 (See Section 18, AMLA).

Effective 15 December 2005.

See Title VIII, Sec. 44, Rule Of Procedure In Cases Of Civil Forfeiture, Asset Preservation, And Freezing Of Monetary Instrument, Property, Or Proceeds Representing, Involving, Or Relating To An Unlawful Activity Or Money Laundering Offense Under Republic Act No. 9160, As Amended.

Republic Act No. 9160 (2002), Sec. 11.

See J. Tinga, Concurring and Dissenting, Gonzales v. Abaya, G.R. No. 164007, 10 August 2006, 498 SCRA 445, 501; citing 12 Words and Phrases (1954 ed.), p. 478-479 and 1 BOUVIER'S LAW DICTIONARY (8th ed., 1914), p. 858.

CONST., Art. III, Sec. 2.

2000 RULES OF CRIMINAL PROCEDURE, Rule 126, Sec. 5.

Perhaps the prophecy of Justice Brandeis, dissenting in Olmstead v. U.S., 227 U.S. 438, 473 (1928), has come to pass: "[T]ime works changes, brings into existence new conditions and purposes." Subtler and more far-reaching means of invading privacy have become available to the Government. Discovery and invention have made it possible for the Government, by means far more effective than stretching upon the rack, to obtain disclosure in court of what is whispered in the closetMoreover, "in the application of a constitution, our contemplation cannot be only of what has, been but of what may be." The progress of science in furnishing the Government with means of espionage is not likely to stop with wiretapping. Ways may someday be developed by which the Government, without removing papers from secret drawers, can reproduce them in court, and by which it will be enabled to expose to a jury the most intimate occurrences of the home. Id. at 473-474.

425 U.S. 435 (1976).

Even if we direct our attention to the original checks and deposit slips, rather than to the microfilm copies actually viewed and obtained by means of the subpoena, we perceive no legitimate "expectation of privacy" in their contents. The checks are not confidential communications but negotiable instruments to be used in commercial transactions. All of the documents obtained, including financial statements and deposit slips, contain only information voluntarily conveyed to the banks and exposed to their employees in the ordinary course of business. The lack of any legitimate expectation of privacy concerning the information kept in bank records was assumed by Congress in enacting the Bank Secrecy Act, the expressed purpose of which is to require records to be maintained because they "have a high degree of usefulness in criminal, tax, and regulatory investigations and proceedings." Ibid. The passage by the U.S. Congress in 1978 of the Right to Financial Privacy Act was essentially in reaction to the Miller ruling. TIROL, supra note 64, at 155.

See TIROL, supra note 64, citing GABRIEL SINGSON, LAW AND JURISPRUDENCE ON SECRECY OF BANK DEPOSITS, 46 Ateneo Law Journal 670, 682.

See Ople v. Torres, 354 Phil. 948 (1998).

The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law."

Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest."

Chavez v. PCGG, 360 Phil. 133, 161, citing V Record of the Constitutional Commission 25 (1986).

See Phil. National Bank v. Gancayco, et al., 122 Phil. 503, 506-507 (1965).

Section 8 of R.A. Act No. 6770, or the Ombudsman Act of 1989 empowers the Ombudsman to [a]dminister oaths, issue subpoena and subpoena duces tecum and take testimony in any investigation or inquiry, including the power to examine and have access to bank accounts and records. See Sec. 8, Rep. Act No. 6770 (1989). In Marquez v. Hon. Desierto, 412 Phil. 387 (2001), the Court, interpreted this provision in line with the absolutely confidential nature of bank deposits under the Bank Secrecy Act, infra, and mandated: there must be a pending case before a court of competent jurisdiction[;] the account must be clearly identified, the inspection limited to the subject matter of the pending case before the court of competent jurisdiction[;] the bank personnel and the account holder must be notified to be present during the inspection, and such inspection may cover only the account identified in the pending case. Id. at 397. With respect to the Ombudsmans power of inquiry into bank deposits, Marquez remains good law. See Ejercito v. Sandiganbayan, G.R. Nos. 157294-95, 30 November 2006, 509 SCRA 190, 224 and 226.

Under Article 267 of the Revised Penal Code.

Particularly Sections 4, 5, 6, 8, 9, 10, 12, 13, 14, 15, and 16 thereof.

Republic Act No. 1405 (1955), Sec. 2.

Rollo, p. 98.

A copy of such certification was attached to Chengs Comment as Annex 2. See id. at 421.

CONST., Art. III, Sec. 22.

In the Matter of the Petition for the Declaration of the Petitioners Rights and Duties under Sec. 8 of R.A. No. 6132, 146 Phil. 429, 431-432 (1970). See also Tan v. Barrios, G.R. Nos. 85481-82, 18 October 1990, 703.

Interpretate fienda est ut res valeat quam pereat.

Rollo, p. 818, citing House Committee Deliberations on 26 September 2001.

EN BANC

SPOUSES PNP DIRECTOR ELISEO D. DELA PAZ (Ret.) and MARIA FE C.

G.R. No. 184849

DELA PAZ, Petitioners,

Present:

PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, CARPIO, AUSTRIA-MARTINEZ, CORONA, - versus CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION, and PERALTA, JJ. SENATE COMMITTEE ON FOREIGN RELATIONS and the SENATE SERGEANTAT-ARMS JOSE BALAJADIA, JR., Respondents.

Promulgated:

February 13, 2009

x-----------------------------------------------------------------------------------------x

RESOLUTION

NACHURA, J.:

This is a Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court filed on October 28, 2008 by petitionersspouses General (Ret.) Eliseo D. dela Paz (Gen. Dela Paz) and Mrs. Maria Fe C. dela Paz (Mrs. Dela Paz) assailing, allegedly for having been rendered with grave abuse of discretion amounting to lack or excess of jurisdiction, the orders of respondent Senate Foreign Relations Committee Senator (respondent Miriam Committee), through its Chairperson, Defensor-Santiago (Senator

Santiago), (1) denying petitioners Challenge to Jurisdiction with Motion to Quash Subpoenae and (2) commanding respondent Senate Sergeant-at-Arms Jose Balajadia, Jr. (Balajadia) to immediately arrest petitioners during the Senate committee hearing last October 23, 2008. The petition thus prays that respondent Committee be enjoined from conducting its hearings involving petitioners, and to enjoin Balajadia from implementing the verbal arrest order against them.

The antecedents are as follow

On October 6, 2008, a Philippine delegation of eight (8) senior Philippine National Police (PNP) officers arrived in Moscow, Russia to attend the 77th General Assembly Session of the International Criminal Police Organization (ICPO)-INTERPOL in St. Petersburg from October 6-10, 2008. With the delegation was Gen. Dela Paz, then comptroller and special disbursing officer of the PNP. Gen. Dela Paz, however, was to retire from the PNP on October 9, 2008.

On October 11, 2008, Gen. Dela Paz was apprehended by the local authorities at the Moscow airport departure area for failure to declare in written form the 105,000 euros [approximately P6,930,000.00] found in his luggage. In addition, he was also found to have in his possession 45,000 euros (roughly equivalent to P2,970,000.00).

Petitioners were detained in Moscow for questioning. After a few days, Gen. Dela Paz and the PNP delegation were allowed to

return to the Philippines, but the Russian government confiscated the euros.

On October 21, 2008, Gen. Dela Paz arrived in Manila, a few days after Mrs. Dela Paz. Awaiting them were subpoenae earlier issued by respondent Committee for the investigation it was to conduct on the Moscow incident on October 23, 2008.

On October 23, 2008, respondent Committee held its first hearing. Instead of attending the hearing, petitioners filed with respondent Committee a pleading denominated Challenge to Jurisdiction with Motion to Quash Subpoena . Senator Santiago emphatically defended respondent Committees jurisdiction and commanded Balajadia to arrest petitioners.

Hence, this Petition.

Petitioners argue that respondent Committee is devoid of any jurisdiction to investigate the Moscow incident as the matter does not involve state to state relations as provided in paragraph 12, Section 13, Rule 10 of the Senate Rules of Procedure (Senate Rules). They further claim that respondent Committee violated

the same Senate Rules when it issued the warrant of arrest without the required signatures of the majority of the members of respondent Committee. They likewise assail the very same Senate Rules because the same were not published as required by the Constitution, and thus, cannot be used as the basis of any investigation involving them relative to the Moscow incident.

Respondent Committee filed its Comment on January 22, 2009.

The petition must inevitably fail. First. Section 16(3), Article VI of the Philippine Constitution states: Each House shall determine the rules of its proceedings.

This provision has been traditionally construed as a grant of full discretionary authority to the Houses of Congress in the formulation, adoption and promulgation of its own rules. As such, the exercise of this power is generally exempt from judicial supervision and interference, except on a clear showing of such arbitrary and improvident use of the power as will constitute a denial of due process.

The challenge to the jurisdiction of the Senate Foreign Relations Committee, raised by petitioner in the case at bench, in effect, asks this Court to inquire into a matter that is within the full discretion of the Senate. The issue partakes of the nature of a political question that, in Taada v. Cuenco, was characterized as a question which, under the Constitution, is 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. Further, pursuant to this constitutional grant of virtually unrestricted authority to determine its own rules, the Senate is at liberty to alter or modify these rules at any time it may see fit, subject only to the imperatives of quorum, voting and publication.

Thus, it is not for this Court to intervene in what is clearly a question of policy, an issue dependent upon the wisdom, not the legality, of the Senates action.

Second. Even if it is within our power to inquire into the validity of the exercise of jurisdiction over the petitioners by the Senate Foreign Relations Committee, we are convinced that

respondent Committee has acted within the proper sphere of its authority.

Paragraph 12, Section 13, Rule 10 of the Senate Rules provides:

12) Committee on Foreign Relations. Fifteen (15) members. All matters relating to the relations of the Philippines with other nations generally; diplomatic and consular services; the Association of Southeast Asian Nations; the United Nations Organization and its agencies; multi-lateral organizations, all international agreements, obligations and contracts; and overseas Filipinos.

A reading of the above provision unmistakably shows that the investigation of the Moscow incident involving petitioners is well within the respondent Committees jurisdiction.

The Moscow incident could create ripples in the relations between the Philippines and Russia. Gen. Dela Paz went to Moscow in an official capacity, as a member of the Philippine delegation to the INTERPOL Conference in St. Petersburg, carrying a huge amount of public money ostensibly to cover the expenses to be incurred by the delegation. For his failure to

comply

with

immigration

and

currency

laws,

the

Russian

government confiscated the money in his possession and detained him and other members of the delegation in Moscow.

Furthermore, the matter affects Philippine international obligations. We take judicial notice of the fact that the Philippines is a state-party to the United Nations Convention Against Corruption provisions foreign and the United with the Nations Convention of Against Transnational Organized Crime. dealing The two conventions contain movement considerable

currency across borders. The Moscow incident would reflect on our countrys compliance with the obligations required of stateparties under these conventions. Thus, the respondent Committee can properly inquire into this matter, particularly as to the source and purpose of the funds discovered in Moscow as this would involve the Philippines commitments under these conventions.

Third. The Philippine Senate has decided that the legislative inquiry will be jointly conducted by the respondent Committee and the Senate Committee on Accountability of Public Officers and Investigations (Blue Ribbon Committee).

Pursuant to paragraph 36, Section 13, Rule 10 of the Senate Rules, the Blue Ribbon Committee may conduct investigations on all matters relating in its office to by malfeasance, officers and agencies, misfeasance employees of subdivisions and the and nonfeasance government,

branches,

instrumentalities, and on any matter of public interest on its own initiative or brought to its attention by any of its members. It is, thus, beyond cavil that the Blue Ribbon Committee can investigate Gen. Dela Paz, a retired PNP general and member of the official PNP delegation to the INTERPOL Conference in Russia,

who had with him millions which may have been sourced from public funds.

Fourth. Subsequent to Senator Santiagos verbal command to Balajadia to arrest petitioners, the Philippine Senate issued a formal written Order of arrest, signed by ten (10) senators, with the Senate President himself approving it, in accordance with the Senate Rules.

Fifth. The Philippine Senate has already published its Rules of Procedure Governing Inquiries in Aid of Legislation in two newspapers of general circulation.

Sixth. The arrest order issued against the petitioners has been rendered ineffectual. In the legislative inquiry held on November 15, 2008, jointly by the respondent Committee and the Senate Blue Ribbon Committee, Gen. Dela Paz voluntarily appeared and answered the questions propounded by the Committee members. Having submitted himself to the jurisdiction of the Senate Committees, there was no longer any necessity to implement the order of arrest. Furthermore, in the same hearing, Senator Santiago granted the motion of Gen. Dela Paz to dispense with the presence of Mrs. Dela Paz for

humanitarian considerations.

Consequently, the order for her

arrest was effectively withdrawn.

WHEREFORE, the petition is DISMISSED for lack of merit and for being moot and academic.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief Justice

CONSUELO YNARES-SANTIAGO
LEONARDO A. QUISUMBING
Associate Justice

Associate Justice

ANTONIO T. CARPIO
Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ


Associate Justice

RENATO C. CORONA
Associate Justice

CONCHITA CARPIO MORALES


Associate Justice

ADOLFO S. AZCUNA Associate Justice

DANTE O. TINGA Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

PRESBITERO J. VELASCO, JR.


Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice

ARTURO D. BRION Associate Justice

DIOSDADO M. PERALTA Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO Chief Justice

Rollo, pp. 3-21.

Id. at 28. Id. at 126-137.

See Morrero v. Bocar, 37 O.G. 445. 100 Phil. 101 (1957). Art. 14(2) of the United Nations Convention Against Corruption provides State parties shall consider implementing feasible measures to detect and monitor the movement of cash and appropriate negotiable instruments across their borders, subject to safeguards to ensure proper use of information and without impeding in any way the movement of legitimate capital. Such measures may include a requirement that individuals and businesses report the cross border transfer of substantial quantities of cash and appropriate negotiable instruments. The United Nations Convention Against Transnational Organized Crime provides

Art. 7(1), Each State Party: (a) Shall institute a comprehensive domestic and regulatory and supervisory regime for banks and non-bank financial institutions and, where appropriate, other bodies particularly susceptible to money-laundering, within its competence, in order to deter and detect all forms of money-laundering, which regime shall emphasize requirements for customer identification, record-keeping and the reporting of suspicious transactions; Art. 7(2): State Parties shall consider implementing feasible measures to detect and monitor the movement of cash and appropriate negotiable instruments across their borders, subject to safeguards to ensure proper use of information and without impeding in any way the movement of legitimate capital. Such measures may include a requirement that individuals and businesses report the cross-border transfer of substantial quantities of cash and appropriate negotiable instruments. (Underscoring supplied.) Rollo, pp. 138-139. Publication was made in the October 31, 2008 issues of the Manila Daily Bulletin and the Malaya. Rollo, p. 143. Republic Act No. 8171 An Act Providing For The Repatriation Of Filipinos Who Have Lost Their Philippine Citizenship By Marriage to Aliens And Of Natural-Born Filipinos Section 1. Filipino women who have lost their Philippine citizenship by marriage to aliens and natural-born Filipinos who have lost their Philippine citizenship, including their minor children, on account of political or economic necessity, may reacquire Philippine citizenship through repatriation in the manner provided in Section 4 of Commonwealth Act No. 63, as amended: Provided, That the applicant is not a: (1) Person opposed to organized government or affiliated with any association or group of persons who uphold and teach doctrines opposing organized government; (2) Person defending or teaching the necessity or propriety of violence, personal assault, or association for the predominance of their ideas; (3) Person convicted of crimes involving moral turpitude; or (4) Person suffering from mental alienation or incurable contagious diseases. Sec. 2. Repatriation shall be effected by taking the necessary oath of allegiance to the Republic of the Philippines and registration in the proper civil registry and in the Bureau

of Immigration. The Bureau of Immigration shall thereupon cancel the pertinent alien certificate of registration and issue the certificate of identification as Filipino citizen to the repatriated citizen. Sec. 3. All laws, decrees, orders, rules and regulations, or parts thereof inconsistent with this Act are hereby repealed or amended accordingly. Sec. 4. This Act shall take effect thirty (30) days after its publication in a newspaper of general circulation. Lapsed into law on July 3, 1995 without the President's signature, pursuant to Sec. 27(1), Article VI of the Constitution Congress of the Philippines Twelfth Congress Third Regular Session

Begun held in Metro Manila on Monday, the twenty-eighth day of July, two thousand three.

Republic Act No. 9225

August 29, 2003

AN ACT MAKING THE CITIZENSHIP OF PHILIPPINE CITIZENS WHO ACQUIRE FOREIGN CITIZENSHIP PERMANENT. AMENDING FOR THE PURPOSE COMMONWEALTH ACT. NO. 63, AS AMENDED AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Short Title this act shall be known as the "Citizenship Retention and Reacquisition Act of 2003." Section 2. Declaration of Policy - It is hereby declared the policy of the State that all Philippine citizens of another country shall be deemed not to have lost their Philippine citizenship under the conditions of this Act. Section 3. Retention of Philippine Citizenship - Any provision of law to the contrary notwithstanding, natural-born citizenship by reason of their naturalization as citizens of a foreign country are hereby deemed to have re-acquired Philippine citizenship upon taking the following oath of allegiance to the Republic:

"I _____________________, solemny swear (or affrim) that I will support and defend the Constitution of the Republic of the Philippines and obey the laws and legal orders promulgated by the duly constituted authorities of the Philippines; and I hereby declare that I recognize and accept the supreme authority of the Philippines and will maintain true faith and allegiance thereto; and that I imposed this obligation upon myself voluntarily without mental reservation or purpose of evasion." Natural born citizens of the Philippines who, after the effectivity of this Act, become citizens of a foreign country shall retain their Philippine citizenship upon taking the aforesaid oath. Section 4. Derivative Citizenship - The unmarried child, whether legitimate, illegitimate or adopted, below eighteen (18) years of age, of those who re-acquire Philippine citizenship upon effectivity of this Act shall be deemed citizenship of the Philippines. Section 5. Civil and Political Rights and Liabilities - Those who retain or re-acquire Philippine citizenship under this Act shall enjoy full civil and political rights and be subject to all attendant liabilities and responsibilities under existing laws of the Philippines and the following conditions: (1) Those intending to exercise their right of surffrage must Meet the requirements under Section 1, Article V of the Constitution, Republic Act No. 9189, otherwise known as "The Overseas Absentee Voting Act of 2003" and other existing laws; (2) Those seeking elective public in the Philippines shall meet the qualification for holding such public office as required by the Constitution and existing laws and, at the time of the filing of the certificate of candidacy, make a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to administer an oath; (3) Those appointed to any public office shall subscribe and swear to an oath of allegiance to the Republic of the Philippines and its duly constituted authorities prior to their assumption of office: Provided, That they renounce their oath of allegiance to the country where they took that oath; (4) Those intending to practice their profession in the Philippines shall apply with the proper authority for a license or permit to engage in such practice; and (5) That right to vote or be elected or appointed to any public office in the Philippines cannot be exercised by, or extended to, those who: (a) are candidates for or are occupying any public office in the country of which they are naturalized citizens; and/or (b) are in active service as commissioned or non-commissioned officers in the armed forces of the country which they are naturalized citizens.

Section 6. Separability Clause - If any section or provision of this Act is held unconstitutional or invalid, any other section or provision not affected thereby shall remain valid and effective. Section 7. Repealing Clause - All laws, decrees, orders, rules and regulations inconsistent with the provisions of this Act are hereby repealed or modified accordingly. Section 8. Effectivity Clause This Act shall take effect after fifteen (15) days following its publication in the Official Gazette or two (2) newspaper of general circulation. Republic of the Philippines Congress of the Philippines Metro Manila Fourteenth Congress Third Regular Session Begun and held in Metro Manila, on Monday, the twenty-seventh day of July, two thousand nine. REPUBLIC ACT NO. 9729 AN ACT MAINSTREAMING CLIMATE CHANGE INTO GOVERNMENT POLICY FORMULATIONS, ESTABLISHING THE FRAMEWORK STRATEGY AND PROGRAM ON CLIMATE CHANGE, CREATING FOR THIS PURPOSE THE CLIMATE CHANGE COMMISSION, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Title. This Act shall be known as the Climate Change Act of 2009. Section 2. Declaration of Policy. It is the policy of the State to afford full protection and the advancement of the right of the people to a healthful ecology in accord with the rhythm and harmony of nature. In this light, the State has adopted the Philippine Agenda 21 framework which espouses sustainable development, to fulfill human needs while maintaining the quality of the natural environment for current and future generations. Towards this end, the State adopts the principle of protecting the climate system for the benefit of humankind, on the basis of climate justice or common but differentiated responsibilities and the Precautionary Principle to guide decision-making in climate risk management. As a party to the United Nations Framework Convention on Climate Change, the State adopts the ultimate objective of the Convention which is the stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system which should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.1awphil As a party to the Hyogo

Framework for Action, the State likewise adopts the strategic goals in order to build national and local resilience to climate change-related disasters. Recognizing the vulnerability of the Philippine archipelago and its local communities, particularly the poor, women, and children, to potential dangerous consequences of climate change such as rising seas, changing landscapes, increasing frequency and/or severity of droughts, fires, floods and storms, climate-related illnesses and diseases, damage to ecosystems, biodiversity loss that affect the countrys environment, culture, and economy, the State shall cooperate with the global community in the resolution of climate change issues, including disaster risk reduction. It shall be the policy of the State to enjoin the participation of national and local governments, businesses, nongovernment organizations, local communities and the public to prevent and reduce the adverse impacts of climate change and, at the same time, maximize the benefits of climate change. It shall also be the policy of the State to incorporate a gender-sensitive, pro-children and pro-poor perspective in all climate change and renewable energy efforts, plans and programs. In view thereof, the State shall strengthen, integrate, consolidate and institutionalize government initiatives to achieve coordination in the implementation of plans and programs to address climate change in the context of sustainable development. Further recognizing that climate change and disaster risk reduction are closely interrelated and effective disaster risk reduction will enhance climate change adaptive capacity, the State shall integrate disaster risk reduction into climate change programs and initiatives. Cognizant of the need to ensure that national and subnational government policies, plans, programs and projects are founded upon sound environmental considerations and the principle of sustainable development, it is hereby declared the policy of the State to systematically integrate the concept of climate change in various phases of policy formulation, development plans, poverty reduction strategies and other development tools and techniques by all agencies and instrumentalities of the government. Section 3. Definition of Terms. For purposes of this Act, the following shall have the corresponding meanings: (a) Adaptation refers to the adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities. (b) Adaptive capacity refers to the ability of ecological, social or economic systems to adjust to climate change including climate variability and extremes, to moderate or offset potential damages and to take advantage of associated opportunities with changes in climate or to cope with the consequences thereof. (c) Anthropogenic causes refer to causes resulting from human activities or produced by human beings.

(d) Climate Change refers to a change in climate that can be identified by changes in the mean and/or variability of its properties and that persists for an extended period typically decades or longer, whether due to natural variability or as a result of human activity. (e) Climate Variability refers to the variations in the average state and in other statistics of the climate on all temporal and spatial scales beyond that of individual weather events. (f) Climate Risk refers to the product of climate and related hazards working over the vulnerability of human and natural ecosystems. (g) Disaster refers to a serious disruption of the functioning of a community or a society involving widespread human, material, economic or environmental losses and impacts which exceed the ability of the affected community or society to cope using its own resources. (h) Disaster risk reduction refers to the concept and practice of reducing disaster risks through systematic efforts to analyze and manage the causal factors of disasters, including through reduced exposure to hazards, lessened vulnerability of people and property, wise management of land and the environment, and improved preparedness for adverse events. (i) Gender mainstreaming refers to the strategy for making womens as well as mens concerns and experiences an integral dimension of the design, implementation, monitoring, and evaluation of policies and programs in all political, economic, and societal spheres so that women and men benefit equally and inequality is not perpetuated. It is the process of assessing the implications for women and men of any planned action, including legislation, policies, or programs in all areas and at all levels. (j) Global Warming refers to the increase in the average temperature of the Earths near-surface air and oceans that is associated with the increased concentration of greenhouse gases in the atmosphere. (k) Greenhouse effect refers to the process by which the absorption of infrared radiation by the atmosphere warms the Earth. (l) Greenhouse gases (GHG) refers to constituents of the atmosphere that contribute to the greenhouse effect including, but not limited to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. (m) Mainstreaming refers to the integration of policies and measures that address climate change into development planning and sectoral decision-making.

(n) Mitigation in the context of climate change, refers to human intervention to address anthropogenic emissions by sources and removals by sinks of all GHG, including ozone- depleting substances and their substitutes. (o) Mitigation potential shall refer to the scale of GHG reductions that could be made, relative to emission baselines, for a given level of carbon price (expressed in cost per unit of carbon dioxide equivalent emissions avoided or reduced). (p) Sea level rise refers to an increase in sea level which may be influenced by factors like global warming through expansion of sea water as the oceans warm and melting of ice over land and local factors such as land subsidence. (q) Vulnerability refers to the degree to which a system is susceptible to, or unable to cope with, adverse effects of climate change, including climate variability and extremes. Vulnerability is a function of the character, magnitude, and rate of climate change and variation to which a system is exposed, its sensitivity, and its adaptive capacity. Section 4. Creation of the Climate Change Commission. There is hereby established a Climate Change Commission, hereinafter referred to as the Commission. The Commission shall be an independent and autonomous body and shall have the same status as that of a national government agency. It shall be attached to the Office of the President. The Commission shall be the sole policy-making body of the government which shall be tasked to coordinate, monitor and evaluate the programs and action plans of the government relating to climate change pursuant to the provisions of this Act. The Commission shall be organized within sixty (60) days from the effectivity of this Act. Section 5. Composition of the Commission. The Commission shall be composed of the President of the Republic of the Philippines who shall serve as the Chairperson, and three (3) Commissioners to be appointed by the President, one of whom shall serve as the Vice Chairperson of the Commission. The Commission shall have an advisory board composed of the following: (a) Secretary of the Department of Agriculture; (b) Secretary of the Department of Energy; (c) Secretary of the Department of Environment and Natural Resources; (d) Secretary of the Department of Education; (e) Secretary of the Department of Foreign Affairs;

(f) Secretary of the Department of Health; (g) Secretary of the Department of the Interior and Local Government; (h) Secretary of the Department of National Defense, in his capacity as Chair of the National Disaster Coordinating Council; (i) Secretary of the Department of Public Works and Highways; (j) Secretary of the Department of Science and Technology; (k) Secretary of the Department of Social Welfare and Development; (l) Secretary of the Department of Trade and Industry; (m) Secretary of the Department of Transportation and Communications; (n) Director-General of the National Economic and Development Authority, in his capacity as Chair of the Philippine Council for Sustainable Development; (o) Director-General of the National Security Council; (p) Chairperson of the National Commission on the Role of Filipino Women; (q) President of the League of Provinces; (r) President of the League of Cities; (s) President of the League of Municipalities; (t) President of the Liga ng mga Barangay; (u) Representative from the academe; (v) Representative from the business sector; and (w) Representative from nongovernmental organizations. At least one (1) of the sectoral representatives shall come from the disaster risk reduction community. The representatives shall be appointed by the President from a list of nominees submitted by their respective groups. They shall serve for a term of six (6) years without reappointment unless their representation is withdrawn by the sector they represent. Appointment to any vacancy shall be only for the unexpired term of the predecessor.

Only the ex officio members of the advisory board shall appoint a qualified representative who shall hold a rank of no less than an Undersecretary. Section 6. Meetings of the Commission. The Commission shall meet once every three (3) months, or as often as may be deemed necessary by the Chairperson. The Chairperson may likewise call upon other government agencies for the proper implementation of this Act. Section 7. Qualifications, Tenure, Compensation of Commissioners. The Commissioners must be Filipino citizens, residents of the Philippines, at least thirty (30) years of age at the time of appointment, with at least ten (10) years of experience on climate change and of proven honesty and ntegrity. The Commissioners shall be experts in climate change by virtue of their educational background, training and experience: Provided, That at least one (1) Commissioner shall be female: Provided, further, That in no case shall the Commissioners come from the same sector: Provided, finally, That in no case shall any of the Commissioners appoint representatives to act on their behalf. The Commissioners shall hold office for a period of six (6) years, and may be subjected to reappointment: Provided, That no person shall serve for more than two (2) consecutive terms: Provided, further, That in case of a vacancy, the new appointee shall fully meet the qualifications of a Commissioner and shall hold office for the unexpired portion of the term only: Provided, finally, That in no case shall a Commissioner be designated in a temporary or acting capacity. The Vice Chairperson and the Commissioners shall have the rank and privileges of a Department Secretary and Undersecretary, respectively. They shall be entitled to corresponding compensation and other emoluments and shall be subject to the same disqualifications. Section 8. Climate Change Office. There is hereby created a Climate Change Office that shall assist the Commission. It shall be headed by a Vice Chairperson of the Commission who shall act as the Executive Director of the Office. The Commission shall have the authority to determine the number of staff and create corresponding positions necessary to facilitate the proper implementation of this Act, subject to civil service laws, rules and regulations. The officers and employees of the Commission shall be appointed by the Executive Director. Section 9. Powers and Functions of the Commission. The Commission shall have the following powers and functions: (a) Ensure the mainstreaming of climate change, in synergy with disaster risk reduction, into the national, sectoral and local development plans and programs; (b) Coordinate and synchronize climate change programs of national government agencies; (c) Formulate a Framework Strategy on Climate Change to serve as the basis for a program for climate change planning, research and development, extension, and monitoring of activities on climate change;

(d) Exercise policy coordination to ensure the attainment of goals set in the framework strategy and program on climate change; (e) Recommend legislation, policies, strategies, programs on and appropriations for climate change adaptation and mitigation and other related activities; (f) Recommend key development investments in climate- sensitive sectors such as water resources, agriculture, forestry, coastal and marine resources, health, and infrastructure to ensure the achievement of national sustainable development goals; (g) Create an enabling environment for the design of relevant and appropriate risksharing and risk-transfer instruments; (h) Create an enabling environment that shall promote broader multi-stakeholder participation and integrate climate change mitigation and adaptation; (i) Formulate strategies on mitigating GHG and other anthropogenic causes of climate change; (j) Coordinate and establish a close partnership with the National Disaster Coordinating Council in order to increase efficiency and effectiveness in reducing the peoples vulnerability to climate-related disasters; (k) In coordination with the Department of Foreign Affairs, represent the Philippines in the climate change negotiations; (l) Formulate and update guidelines for determining vulnerability to climate change impacts and adaptation assessments and facilitate the provision of technical assistance for their implementation and monitoring; (m) Coordinate with local government units (LGUs) and private entities to address vulnerability to climate change impacts of regions, provinces, cities and municipalities; (n) Facilitate capacity building for local adaptation planning, implementation and monitoring of climate change initiatives in vulnerable communities and areas; (o) Promote and provide technical and financial support to local research and development programs and projects in vulnerable communities and areas; and (p) Oversee the dissemination of information on climate change, local vulnerabilities and risks, relevant laws and protocols and adaptation and mitigation measures. Section 10. Panel of Technical Experts. The Commission shall constitute a national panel of technical experts consisting of practitioners in disciplines that are related to climate change, including disaster risk reduction.

The Panel shall provide technical advice to the Commission in climate science, technologies, and best practices for risk assessment and enhancement of adaptive capacity of vulnerable human settlements to potential impacts of climate change. The Commission shall set the qualifications and compensation for the technical experts. It shall provide resources for the operations and activities of the Panel. Section 11. Framework Strategy and Program on Climate Change. The Commission shall, within six (6) months from the effectivity of this Act, formulate a Framework Strategy on Climate Change. The Framework shall serve as the basis for a program for climate change planning, research and development, extension, and monitoring of activities to protect vulnerable communities from the adverse effects of climate change. The Framework shall be formulated based on climate change vulnerabilities, specific adaptation needs, and mitigation potential, and in accordance with the international agreements. The Framework shall be reviewed every three (3) years, or as may be deemed necessary. Section 12. Components of the Framework Strategy and Program on Climate Change. The Framework shall include, but not limited to, the following components: (a) National priorities; (b) Impact, vulnerability and adaptation assessments; (c) Policy formulation; (d) Compliance with international commitments; (e) Research and development; (f) Database development and management; (g) Academic programs, capability building and mainstreaming; (h) Advocacy and information dissemination; (i) Monitoring and evaluation; and (j) Gender mainstreaming. Section 13. National Climate Change Action Plan. The Commission shall formulate a National Climate Change Action Plan in accordance with the Framework within one (1) year after the formulation of the latter.

The National Climate Change Action Plan shall include, but not limited to, the following components: (a) Assessment of the national impact of climate change; (b) The identification of the most vulnerable communities/areas, including ecosystems to the impacts of climate change, variability and extremes; (c) The identification of differential impacts of climate change on men, women and children; (d) The assessment and management of risk and vulnerability; (e) The identification of GHG mitigation potentials; and (f) The identification of options, prioritization of appropriate adaptation measures for joint projects of national and local governments. Section 14. Local Climate Change Action Plan. The LGUs shall be the frontline agencies in the formulation, planning and implementation of climate change action plans in their respective areas, consistent with the provisions of the Local Government Code, the Framework, and the National Climate Change Action Plan. Barangays shall be directly involved with municipal and city governments in prioritizing climate change issues and in identifying and implementing best practices and other solutions. Municipal and city governments shall consider climate change adaptation, as one of their regular functions. Provincial governments shall provide technical assistance, enforcement and information management in support of municipal and city climate change action plans. Inter-local government unit collaboration shall be maximized in the conduct of climate- related activities. LGUs shall regularly update their respective action plans to reflect changing social, economic, and environmental conditions and emerging issues. The LGUs shall furnish the Commission with copies of their action plans and all subsequent amendments, modifications and revisions thereof, within one (1) month from their adoption. The LGUs shall mobilize and allocate necessary personnel, resources and logistics to effectively implement their respective action plans. The local chief executive shall appoint the person responsible for the formulation and implementation of the local action plan. It shall be the responsibility of the national government to extend technical and financial assistance to LGUs for the accomplishment of their Local Climate Change Action Plans. The LGU is hereby expressly authorized to appropriate and use the amount from its Internal Revenue Allotment necessary to implement said local plan effectively, any provision in the Local Government Code to the contrary notwithstanding.

Section 15. Role of Government Agencies. To ensure the effective implementation of the framework strategy and program on climate change, concerned agencies shall perform the following functions: (a) The Department of Education (DepED) shall integrate climate change into the primary and secondary education curricula and/or subjects, such as, but not limited to, science, biology, sibika, history, including textbooks, primers and other educational materials, basic climate change principles and concepts; (b) The Department of the Interior and Local Government (DILG) and Local Government Academy shall facilitate the development and provision of a training program for LGUs in climate change. The training program shall include socioeconomic, geophysical, policy, and other content necessary to address the prevailing and forecasted conditions and risks of particular LGUs. It shall likewise focus on women and children, especially in the rural areas, since they are the most vulnerable; (c) The Department of Environment and Natural Resources (DENR) shall oversee the establishment and maintenance of a climate change information management system and network, including on climate change risks, activities and investments, in collaboration with other concerned national government agencies, institutions and LGUs; (d) The Department of Foreign Affairs (DFA) shall review international agreements related to climate change and make the necessary recommendation for ratification and compliance by the government on matters pertaining thereto; (e) The Philippine Information Agency (PIA) shall disseminate information on climate change, local vulnerabilities and risk, relevant laws and protocols and adaptation and mitigation measures; and (f) Government financial institutions, shall, any provision in their respective charters to the contrary notwithstanding, provide preferential financial packages for climate changerelated projects. In consultation with the Bangko Sentral ng Pilipinas (BSP), they shall, within thirty (30) days from the effectivity of this Act, issue and promulgate the implementing guidelines therefor. The Commission shall evaluate, recommend the approval of loans and monitor the use of said funds of LGUs. Section 16. Coordination with Various Sectors. In the development and implementation of the National Climate Change Action Plan, and the local action plans, the Commission shall coordinate with the nongovernment organizations (NGOs), civic organizations, academe, peoples organizations, the private and corporate sectors and other concerned stakeholder groups. Section 17. Authority to Receive Donations and/or Grants. The Commission is hereby authorized to accept grants, contributions, donations, endowments, bequests, or gifts in cash, or in kind from local and foreign sources in support of the development and implementation of

climate change programs and plans: Provided, That in case of donations from foreign governments, acceptance thereof shall be subject to prior clearance and approval of the President of the Philippines upon recommendation of the Secretary of Foreign Affairs: Provided, further, That such donations shall not be used to fund personal services expenditures and other operating expenses of the Commission. The proceeds shall be used to finance: (a) Research, development, demonstration and promotion of technologies; (b) Conduct of assessment of vulnerabilities to climate change impacts, resource inventory, and adaptation capability building; (c) Advocacy, networking and communication activities in the conduct of information campaign; and (d) Conduct of such other activities reasonably necessary to carry out the objectives of this Act, as may be defined by the Commission. Section 18. Funding Allocation for Climate Change. All relevant government agencies and LGUs shall allocate from their annual appropriations adequate funds for the formulation, development and implementation, including training, capacity building and direct intervention, of their respective climate change programs and plans. It shall also include public awareness campaigns on the effects of climate change and energy-saving solutions to mitigate these effects, and initiatives, through educational and training programs and micro-credit schemes, especially for women in rural areas. In subsequent budget proposals, the concerned offices and units shall appropriate funds for program/project development and implementation including continuing training and education in climate change.1avvphi1 Section 19. Joint Congressional Oversight Committee. There is hereby created a Joint Congressional Oversight Committee to monitor the implementation of this Act. The Oversight Committee shall be composed of five (5) Senators and five (5) Representatives to be appointed by the Senate President and the Speaker of the House of Representatives, respectively. The Oversight Committee shall be co-chaired by a Senator and a Representative to be designated by the Senate President and the Speaker of the House of Representatives, respectively. Its funding requirement shall be charged against the appropriations of Congress. Section 20. Annual Report. The Commission shall submit to the President and to both Houses of Congress, not later than March 30 of every year following the effectivity of this Act, or upon the request of the Congressional Oversight Committee, a report giving a detailed account of the status of the implementation of this Act, a progress report on the implementation of the National Climate Change Action Plan and recommend legislation, where applicable and necessary. LGUs shall submit annual progress reports on the implementation of their respective local action plan to the Commission within the first quarter of the following year.

Section 21. Appropriations. The sum of Fifty million pesos (Php50,000,000.00) is hereby appropriated as initial operating fund in addition to the unutilized fund of the Presidential Task Force on Climate Change and the Office of the Presidential Adviser on Global Warming and Climate Change. The sum shall be sourced from the Presidents contingent fund. Thereafter, the amount necessary to effectively carry out the provisions of this Act shall be included in the annual General Appropriations Act. Section 22. Implementing Rules and Regulations. Within ninety (90) days after the approval of this Act, the Commission shall, upon consultation with government agencies, LGUs, private sector, NGOs and civil society, promulgate the implementing rules and regulations of this Act: Provided, That failure to issue rules and regulations shall not in any manner affect the executory nature of the provisions of this Act. Section 23. Transitory Provisions. Upon the organization of the Commission, the Presidential Task Force on Climate Change created under Administrative Order No. 171 and the InterAgency Committee on Climate Change created by virtue of Administrative Order No. 220, shall be abolished: Provided, That their powers and functions shall be absorbed by the Commission: Provided, further, That the officers and employees thereof shall continue in a holdover capacity until such time as the new officers and employees of the Commission shall have been duly appointed pursuant to the provisions of this Act. All qualified regular or permanent employees who may be transferred to the Commission shall not suffer any loss in seniority or rank or decrease in emoluments. Any employee who cannot be absorbed by the Commission shall be entitled to a separation pay under existing retirement laws. Section 24. Separability Clause. If for any reason any section or provision of this Act is declared as unconstitutional or invalid, the other sections or provisions hereof shall not be affected thereby. Section 25. Repealing Clause. All laws, ordinances, rules and regulations, and other issuances or parts thereof which are inconsistent with this Act are hereby repealed or modified accordingly. Section 26. Effectivity. This Act shall take effect fifteen (15) days after the completion of its publication in the Official Gazette or in at least two (2) national newspapers of general circulation. Approved, Republic of the Philippines Congress of the Philippines Metro Manila Twelfth Congress Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand three. Republic Act No. 9285 April 2, 2004

AN ACT TO INSTITUTIONALIZE THE USE OF AN ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE PHILIPPINES AND TO ESTABLISH THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: CHAPTER 1 - GENERAL PROVISIONS SECTION 1. Title. - This act shall be known as the "Alternative Dispute Resolution Act of 2004." SEC. 2. Declaration of Policy. - it is hereby declared the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. As such, the State shall provide means for the use of ADR as an efficient tool and an alternative procedure for the resolution of appropriate cases. Likewise, the State shall enlist active private sector participation in the settlement of disputes through ADR. This Act shall be without prejudice to the adoption by the Supreme Court of any ADR system, such as mediation, conciliation, arbitration, or any combination thereof as a means of achieving speedy and efficient means of resolving cases pending before all courts in the Philippines which shall be governed by such rules as the Supreme Court may approve from time to time. SEC. 3. Definition of Terms. - For purposes of this Act, the term: (a) "Alternative Dispute Resolution System" means any process or procedure used to resolve a dispute or controversy, other than by adjudication of a presiding judge of a court or an officer of a government agency, as defined in this Act, in which a neutral third party participates to assist in the resolution of issues, which includes arbitration, mediation, conciliation, early neutral evaluation, mini-trial, or any combination thereof; (b) "ADR Provider" means institutions or persons accredited as mediator, conciliator, arbitrator, neutral evaluator, or any person exercising similar functions in any Alternative Dispute Resolution system. This is without prejudice to the rights of the parties to choose nonaccredited individuals to act as mediator, conciliator, arbitrator, or neutral evaluator of their dispute. Whenever reffered to in this Act, the term "ADR practitioners" shall refer to individuals acting as mediator, conciliator, arbitrator or neutral evaluator;

(c) "Authenticate" means to sign, execute or adopt a symbol, or encrypt a record in whole or in part, intended to identity the authenticating party and to adopt, accept or establish the authenticity of a record or term; (d) "Arbitration" means a voluntary dispute resolution process in which one or more arbitrators, appointed in accordance with the agreement of the parties, or rules promulgated pursuant to this Act, resolve a dispute by rendering an award; (e) "Arbitrator" means the person appointed to render an award, alone or with others, in a dispute that is the subject of an arbitration agreement; (f) "Award" means any partial or final decision by an arbitrator in resolving the issue in a controversy; (g) "Commercial Arbitration" An arbitration is "commercial if it covers matter arising from all relationships of a commercial nature, whether contractual or not; (h) "Confidential information" means any information, relative to the subject of mediation or arbitration, expressly intended by the source not to be disclosed, or obtained under circumstances that would create a reasonable expectation on behalf of the source that the information shall not be disclosed. It shall include (1) communication, oral or written, made in a dispute resolution proceedings, including any memoranda, notes or work product of the neutral party or non-party participant, as defined in this Act; (2) an oral or written statement made or which occurs during mediation or for purposes of considering, conducting, participating, initiating, continuing of reconvening mediation or retaining a mediator; and (3) pleadings, motions manifestations, witness statements, reports filed or submitted in an arbitration or for expert evaluation; (i) "Convention Award" means a foreign arbitral award made in a Convention State; (j) "Convention State" means a State that is a member of the New York Convention; (k) "Court" as referred to in Article 6 of the Model Law shall mean a Regional Trial Court; (l) "Court-Annexed Mediation" means any mediation process conducted under the auspices of the court, after such court has acquired jurisdiction of the dispute; (m) "Court-Referred Mediation" means mediation ordered by a court to be conducted in accordance with the Agreement of the Parties when as action is prematurely commenced in violation of such agreement; (n) "Early Neutral Evaluation" means an ADR process wherein parties and their lawyers are brought together early in a pre-trial phase to present summaries of their cases and receive a nonbinding assessment by an experienced, neutral person, with expertise in the subject in the substance of the dispute;

(o) "Government Agency" means any government entity, office or officer, other than a court, that is vested by law with quasi-judicial power to resolve or adjudicate dispute involving the government, its agencies and instrumentalities, or private persons; (p) "International Party" shall mean an entity whose place of business is outside the Philippines. It shall not include a domestic subsidiary of such international party or a coventurer in a joint venture with a party which has its place of business in the Philippines. The term foreigner arbitrator shall mean a person who is not a national of the Philippines. (q) "Mediation" means a voluntary process in which a mediator, selected by the disputing parties, facilitates communication and negotiation, and assist the parties in reaching a voluntary agreement regarding a dispute. (r) "Mediator" means a person who conducts mediation; (s) "Mediation Party" means a person who participates in a mediation and whose consent is necessary to resolve the dispute; (t) "Mediation-Arbitration" or Med-Arb is a step dispute resolution process involving both mediation and arbitration; (u) "Mini-Trial" means a structured dispute resolution method in which the merits of a case are argued before a panel comprising senior decision makers with or without the presence of a neutral third person after which the parties seek a negotiated settlement; (v) "Model Law" means the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985; (w) "New York Convention" means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards approved in 1958 and ratified by the Philippine Senate under Senate Resolution No. 71; (x) "Non-Convention Award" means a foreign arbitral award made in a State which is not a Convention State; (y) "Non-Convention State" means a State that is not a member of the New York Convention. (z) "Non-Party Participant" means a person, other than a party or mediator, who participates in a mediation proceeding as a witness, resource person or expert; (aa) "Proceeding" means a judicial, administrative, or other adjudicative process, including related pre-hearing motions, conferences and discovery;

(bb) "Record" means an information written on a tangible medium or stored in an electronic or other similar medium, retrievable form; and (cc) "Roster" means a list of persons qualified to provide ADR services as neutrals or to serve as arbitrators. SEC. 4. Electronic Signatures in Global and E-Commerce Act. - The provisions of the Electronic Signatures in Global and E-Commerce Act, and its implementing Rules and Regulations shall apply to proceeding contemplated in this Act. SEC. 5. Liability of ADR Provider and Practitioner. - The ADR providers and practitioners shall have the same civil liability for the Acts done in the performance of then duties as that of public officers as provided in Section 38 (1), Chapter 9, Book of the Administrative Code of 1987. SEC. 6. Exception to the Application of this Act. - The provisions of this Act shall not apply to resolution or settlement of the following: (a) labor disputes covered by Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, as amended and its Implementing Rules and Regulations; (b) the civil status of persons; (c) the validity of a marriage; (d) any ground for legal separation; (e) the jurisdiction of courts; (f) future legitime; (g) criminal liability; and (h) those which by law cannot be compromised. CHAPTER 2 - MEDIATION SEC. 7. Scope. - The provisions of this Chapter shall cover voluntary mediation, whether ad hoc or institutional, other than court-annexed. The term "mediation' shall include conciliation. SEC. 8. Application and Interpretation. - In applying construing the provisions of this Chapter, consideration must be given to the need to promote candor or parties and mediators through confidentiality of the mediation process, the policy of fostering prompt, economical, and amicable resolution of disputes in accordance with the principles of integrity of determination by the parties, and the policy that the decision-making authority in the mediation process rests with the parties. SEC. 9. Confidentiality of Information. - Information obtained through mediation proceedings shall be subject to the following principles and guidelines: (a) Information obtained through mediation shall be privileged and confidential. (b) A party, a mediator, or a nonparty participant may refuse to disclose and may prevent any other person from disclosing a mediation communication. (c) Confidential Information shall not be subject to discovery and shall be inadmissible if any adversarial proceeding, whether judicial or quasi-judicial, However, evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely by reason of its use in a mediation.

(d) In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not be compelled to disclose confidential information obtained during mediation: (1) the parties to the dispute; (2) the mediator or mediators; (3) the counsel for the parties; (4) the nonparty participants; (5) any persons hired or engaged in connection with the mediation as secretary, stenographer, clerk or assistant; and (6) any other person who obtains or possesses confidential information by reason of his/her profession. (e) The protections of this Act shall continue to apply even of a mediator is found to have failed to act impartially. (f) a mediator may not be called to testify to provide information gathered in mediation. A mediator who is wrongfully subpoenaed shall be reimbursed the full cost of his attorney's fees and related expenses. SEC. 10. Waiver of Confidentiality. - A privilege arising from the confidentiality of information may be waived in a record, or orally during a proceeding by the mediator and the mediation parties. A privilege arising from the confidentiality of information may likewise be waived by a nonparty participant if the information is provided by such nonparty participant. A person who discloses confidential information shall be precluded from asserting the privilege under Section 9 of this Chapter to bar disclosure of the rest of the information necessary to a complete understanding of the previously disclosed information. If a person suffers loss or damages in a judicial proceeding against the person who made the disclosure. A person who discloses or makes a representation about a mediation is preclude from asserting the privilege under Section 9, to the extent that the communication prejudices another person in the proceeding and it is necessary for the person prejudiced to respond to the representation of disclosure. SEC. 11. Exceptions to Privilege. (a) There is no privilege against disclosure under Section 9 if mediation communication is: (1) in an agreement evidenced by a record authenticated by all parties to the agreement; (2) available to the public or that is made during a session of a mediation which is open, or is required by law to be open, to the public; (3) a threat or statement of a plan to inflict bodily injury or commit a crime of violence;

(4) internationally used to plan a crime, attempt to commit, or commit a crime, or conceal an ongoing crime or criminal activity; (5) sought or offered to prove or disprove abuse, neglect, abandonment, or exploitation in a proceeding in which a public agency is protecting the interest of an individual protected by law; but this exception does not apply where a child protection matter is referred to mediation by a court or a public agency participates in the child protection mediation; (6) sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against mediator in a proceeding; or (7) sought or offered to prove or disprove a claim of complaint of professional misconduct of malpractice filed against a party, nonparty participant, or representative of a party based on conduct occurring during a mediation. (b) There is no privilege under Section 9 if a court or administrative agency, finds, after a hearing in camera, that the party seeking discovery of the proponent of the evidence has shown that the evidence is not otherwise available, that there is a need for the evidence that substantially outweighs the interest in protecting confidentiality, and the mediation communication is sought or offered in: (1) a court proceeding involving a crime or felony; or (2) a proceeding to prove a claim or defense that under the law is sufficient to reform or avoid a liability on a contract arising out of the mediation. (c) A mediator may not be compelled to provide evidence of a mediation communication or testify in such proceeding. (d) If a mediation communication is not privileged under an exception in subsection (a) or (b), only the portion of the communication necessary for the application of the exception for nondisclosure may be admitted. The admission of particular evidence for the limited purpose of an exception does not render that evidence, or any other mediation communication, admissible for any other purpose. SEC. 12. Prohibited Mediator Reports. - A mediator may not make a report, assessment, evaluation, recommendation, finding, or other communication regarding a mediation to a court or agency or other authority that make a ruling on a dispute that is the subject of a mediation, except: (a) Where the mediation occurred or has terminated, or where a settlement was reached. (b) As permitted to be disclosed under Section 13 of this Chapter.

SEC. 13. Mediator's Disclosure and Conflict of Interest. - The mediation shall be guided by the following operative principles: (a) Before accepting a mediation, an individual who is requested to serve as a mediator shall: (1) make an inquiry that is reasonable under the circumstances to determinate whether there are any known facts that a reasonable individual would consider likely to affect the impartiality of the mediator, including a financial or personal interest in the outcome of the mediation and any existing or past relationship with a party or foreseeable participant in the mediation; and (2) disclosure to the mediation parties any such fact known or learned as soon as is practical before accepting a mediation. (b) If a mediation learns any fact described in paragraph (a) (1) of this section after accepting a mediation, the mediator shall disclose it as soon as practicable. At the request of a mediation party, an individual who is requested to serve as mediator shall disclose his/her qualifications to mediate a dispute. This Act does not require that a mediator shall have special qualifications by background or profession unless the special qualifications of a mediator are required in the mediation agreement or by the mediation parties. SEC. 14. Participation in Mediation. - Except as otherwise provided in this Act, a party may designate a lawyer or any other person to provide assistance in the mediation. A lawyer of this right shall be made in writing by the party waiving it. A waiver of participation or legal representation may be rescinded at any time. SEC. 15. Place of Mediation. - The parties are free to agree on the place of mediation. Failing such agreement, the place of mediation shall be any place convenient and appropriate to all parties. SEC. 16. Effect of Agreement to Submit Dispute to Mediation Under Institutional Rules. - An agreement to submit a dispute to mediation by any institution shall include an agreement to be bound by the internal mediation and administrative policies of such institution. Further, an agreement to submit a dispute to mediation under international mediation rule shall be deemed to include an agreement to have such rules govern the mediation of the dispute and for the mediator, the parties, their respective counsel, and nonparty participants to abide by such rules. In case of conflict between the institutional mediation rules and the provisions of this Act, the latter shall prevail. SEC. 17. Enforcement of Mediated Settlement Agreement. - The mediation shall be guided by the following operative principles:

(a) A settlement agreement following successful mediation shall be prepared by the parties with the assistance of their respective counsel, if any, and by the mediator. The parties and their respective counsels shall endeavor to make the terms and condition thereof complete and make adequate provisions for the contingency of breach to avoid conflicting interpretations of the agreement. (b) The parties and their respective counsels, if any, shall sign the settlement agreement. The mediator shall certify that he/she explained the contents of the settlement agreement to the parties in a language known to them. (c) If the parties so desire, they may deposit such settlement agreement with the appropriate Clerk of a Regional Trial Court of the place where one of the parties resides. Where there is a need to enforce the settlement agreement, a petition may be filed by any of the parties with the same court, in which case, the court shall proceed summarily to hear the petition, in accordance with such rules of procedure as may be promulgated by the Supreme Court. (d) The parties may agree in the settlement agreement that the mediator shall become a sole arbitrator for the dispute and shall treat the settlement agreement as an arbitral award which shall be subject to enforcement under Republic Act No. 876, otherwise known as the Arbitration Law, notwithstanding the provisions of Executive Order No. 1008 for mediated dispute outside of the CIAC. CHAPTER 3 - OTHER ADR FORMS SEC. 18. Referral of Dispute to other ADR Forms. - The parties may agree to refer one or more or all issues arising in a dispute or during its pendency to other forms of ADR such as but not limited to (a) the evaluation of a third person or (b) a mini-trial, (c) mediation-arbitration, or a combination thereof. For purposes of this Act, the use of other ADR forms shall be governed by Chapter 2 of this Act except where it is combined with arbitration in which case it shall likewise be governed by Chapter 5 of this Act. CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATION SEC. 19. Adoption of the Model Law on International Commercial Arbitration. - International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the "Model Law") adopted by the United Nations Commission on International Trade Law on June 21, 1985 (United Nations Document A/40/17) and recommended approved on December 11, 1985, copy of which is hereto attached as Appendix "A". SEC. 20. Interpretation of Model Law. - In interpreting the Model Law, regard shall be had to its international origin and to the need for uniformity in its interpretation and resort may be made to the travaux preparatories and the report of the Secretary General of the United Nations

Commission on International Trade Law dated March 25, 1985 entitled, "International Commercial Arbitration: Analytical Commentary on Draft Trade identified by reference number A/CN. 9/264." SEC. 21. Commercial Arbitration. - An arbitration is "commercial" if it covers matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a transactions: any trade transaction for the supply or exchange of goods or services; distribution agreements; construction of works; commercial representation or agency; factoring; leasing, consulting; engineering; licensing; investment; financing; banking; insurance; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road. SEC. 22. Legal Representation in International Arbitration. - In international arbitration conducted in the Philippines, a party may be presented by any person of his choice. Provided, that such representative, unless admitted to the practice of law in the Philippines, shall not be authorized to appear as counsel in any Philippine court, or any other quasi-judicial body whether or not such appearance is in relation to the arbitration in which he appears. SEC. 23. Confidential of Arbitration Proceedings. - The arbitration proceedings, including the records, evidence and the arbitral award, shall be considered confidential and shall not be published except (1) with the consent of the parties, or (2) for the limited purpose of disclosing to the court of relevant documents in cases where resort to the court is allowed herein. Provided, however, that the court in which the action or the appeal is pending may issue a protective order to prevent or prohibit disclosure of documents or information containing secret processes, developments, research and other information where it is shown that the applicant shall be materially prejudiced by an authorized disclosure thereof. SEC. 24. Referral to Arbitration. - A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later that the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. SEC. 25. Interpretation of the Act. - In interpreting the Act, the court shall have due regard to the policy of the law in favor of arbitration. Where action is commenced by or against multiple parties, one or more of whom are parties who are bound by the arbitration agreement although the civil action may continue as to those who are not bound by such arbitration agreement. SEC. 26. Meaning of "Appointing Authority.". - "Appointing Authority" as used in the Model Law shall mean the person or institution named in the arbitration agreement as the appointing authority; or the regular arbitration arbitration institution under whose rules the arbitration is agreed to be conducted. Where the parties have agreed to submit their dispute to institutional arbitration rules, and unless they have agreed to a different procedure, they shall be deemed to have agreed to procedure under such arbitration rules for the selection and appointment of arbitrators. In ad hoc arbitration, the default appointment of an arbitrator shall be made by the

National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative. SEC. 27. What Functions May be Performed by Appointing Authority. - The functions referred to in Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law shall be performed by the Appointing Authority, unless the latter shall fail or refuse to act within thirty (30) days from receipt of the request in which case the applicant may renew the application with the Court. SEC. 28. Grant of Interim Measure of Protection. (a) It is not incompatible with an arbitration agreement for a party to request, before constitution of the tribunal, from a Court an interim measure of protection and for the Court to grant such measure. After constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection or modification thereof, may be made with the arbitral tribunal or to the extent that the arbitral tribunal has no power to act or is unable to act effectively, the request may be made with the Court. The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator who has been nominated, has accepted the nomination and written communication of said nomination and acceptance has been received by the party making request. (b) The following rules on interim or provisional relief shall be observed: (1) Any party may request that provision relief be granted against the adverse party: (2) Such relief may be granted: (i) to prevent irreparable loss or injury: (ii) to provide security for the performance of any obligation; (iii) to produce or preserve any evidence; or (iv) to compel any other appropriate act or omission. (3) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified in the order. (4) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise relief, the party against whom the relief is requested, the grounds for the relief, and evidence supporting the request. (5) The order shall be binding upon the parties.

(6) Either party may apply with the Court for assistance in Implementing or enforcing an interim measure ordered by an arbitral tribunal. (7) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all expenses, and reasonable attorney's fees, paid in obtaining the order's judicial enforcement. SEC. 29. Further Authority for Arbitrator to Grant Interim Measure of Protection . - Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any party to take such interim measures of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute following the rules in Section 28, paragraph 2. Such interim measures may include but shall not be limited to preliminary injuction directed against a party, appointment of receivers or detention, preservation, inspection of property that is the subject of the dispute in arbitration. Either party may apply with the Court for assistance in implementing or enforcing an interim measures ordered by an arbitral tribunal. SEC. 30. Place of Arbitration. - The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be in Metro Manila, unless the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties shall decide on a different place of arbitration. The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts, or the parties, or for inspection of goods, other property or documents. SEC. 31. Language of the Arbitration. - The parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the language to be used shall be English in international arbitration, and English or Filipino for domestic arbitration, unless the arbitral tribunal shall determine a different or another language or languages to be used in the proceedings. This agreement or determination, unless otherwise specified therein, shall apply to any written statement by a party, any hearing and any award, decision or other communication by the arbitral tribunal. The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined in accordance with paragraph 1 of this section. CHAPTER 5 - DOMESTIC ARBITRATION SEC. 32. Law Governing Domestic Arbitration. - Domestic arbitration shall continue to be governed by Republic Act No. 876, otherwise known as "The Arbitration Law" as amended by this Chapter. The term "domestic arbitration" as used herein shall mean an arbitration that is not international as defined in Article (3) of the Model Law.

SEC. 33. Applicability to Domestic Arbitration. - Article 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model Law and Section 22 to 31 of the preceding Chapter 4 shall apply to domestic arbitration. CHAPTER 6 - ARBITRATION OF CONSTRUCTION DISPUTES SEC. 34. Arbitration of Construction Disputes: Governing Law. - The arbitration of construction disputes shall be governed by Executive Order No. 1008, otherwise known as the Constitution Industry Arbitration Law. SEC. 35. Coverage of the Law. - Construction disputes which fall within the original and exclusive jurisdiction of the Construction Industry Arbitration Commission (the "Commission") shall include those between or among parties to, or who are otherwise bound by, an arbitration agreement, directly or by reference whether such parties are project owner, contractor, subcontractor, quantity surveyor, bondsman or issuer of an insurance policy in a construction project. The Commission shall continue to exercise original and exclusive jurisdiction over construction disputes although the arbitration is "commercial" pursuant to Section 21 of this Act. SEC. 36. Authority to Act as Mediator or Arbitrator. - By written agreement of the parties to a dispute, an arbitrator may act as mediator and a mediator may act as arbitrator. The parties may also agree in writing that, following a successful mediation, the mediator shall issue the settlement agreement in the form of an arbitral award. SEC. 37. Appointment of Foreign Arbitrator. - The Construction Industry Arbitration Commission (CIAC) shall promulgate rules to allow for the appointment of a foreign arbitrator or coarbitrator or chairman of a tribunal a person who has not been previously accredited by CIAC: Provided, That: (a) the dispute is a construction dispute in which one party is an international party (b) the person to be appointed agreed to abide by the arbitration rules and policies of CIAC; (c) he/she is either coarbitrator upon the nomination of the international party; or he/she is the common choice of the two CIAC-accredited arbitrators first appointed one of whom was nominated by the international party; and (d) the foreign arbitrator shall be of different nationality from the international party. SEC. 38. Applicability to Construction Arbitration. - The provisions of Sections 17 (d) of Chapter 2, and Section 28 and 29 of this Act shall apply to arbitration of construction disputes covered by this Chapter.

SEC. 39. Court to Dismiss Case Involving a Construction Dispute. - A regional trial court which a construction dispute is filed shall, upon becoming aware, not later than the pretrial conference, that the parties had entered into an arbitration to be conducted by the CIAC, unless both parties, assisted by their respective counsel, shall submit to the regional trial court a written agreement exclusive for the Court, rather than the CIAC, to resolve the dispute. CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL AWARDS A. DOMESTIC AWARDS SEC. 40. Confirmation of Award. - The confirmation of a domestic arbitral award shall be governed by Section 23 of R.A. 876. A domestic arbitral award when confirmed shall be enforced in the same manner as final and executory decisions of the Regional Trial Court. The confirmation of a domestic award shall be made by the regional trial court in accordance with the Rules of Procedure to be promulgated by the Supreme Court. A CIAC arbitral award need not be confirmed by the regional trial court to be executory as provided under E.O. No. 1008. SEC. 41. Vacation Award. - A party to a domestic arbitration may question the arbitral award with the appropriate regional trial court in accordance with the rules of procedure to be promulgated by the Supreme Court only on those grounds enumerated in Section 25 of Republic Act No. 876. Any other ground raised against a domestic arbitral award shall be disregarded by the regional trial court. B. FOREIGN ARBITRAL AWARDS SEC. 42. Application of the New York Convention. - The New York Convention shall govern the recognition and enforcement of arbitral awards covered by the said Convention. The recognition and enforcement of such arbitral awards shall be filled with regional trial court in accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages. The applicant shall establish that the country in which foreign arbitration award was made is a party to the New York Convention. If the application for rejection or suspension of enforcement of an award has been made, the regional trial court may, if it considers it proper, vacate its decision and may also, on the

application of the party claiming recognition or enforcement of the award, order the party to provide appropriate security. SEC. 43. Recognition and Enforcement of Foreign Arbitral Awards Not Covered by the New York Convention. - The recognition and enforcement of foreign arbitral awards not covered by the New York Convention shall be done in accordance with procedural rules to be promulgated by the Supreme Court. The Court may, grounds of comity and reciprocity, recognize and enforce a nonconvention award as a convention award. SEC. 44. Foreign Arbitral Award Not Foreign Judgment. - A foreign arbitral award when confirmed by a court of a foreign country, shall be recognized and enforced as a foreign arbitral award and not a judgment of a foreign court. A foreign arbitral award, when confirmed by the regional trial court, shall be enforced as a foreign arbitral award and not as a judgment of a foreign court. A foreign arbitral award, when confirmed by the regional trial court, shall be enforced in the same manner as final and executory decisions of courts of law of the Philippines. SEC. 45. Rejection of a Foreign Arbitral Award. - A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated under Article V of the New York Convention. Any other ground raised shall be disregarded by the regional trial court. SEC. 46. Appeal from Court Decisions on Arbitral Awards. - A decision of the regional trial court confirming, vacating, setting aside, modifying or correcting an arbitral award may be appealed to the Court of Appeals in accordance with the rules of procedure to be promulgated by the Supreme Court. The losing party who appeals from the judgment of the court confirming an arbitral award shall required by the appealant court to post counterbond executed in favor of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the Supreme Court. SEC. 47. Venue and Jurisdiction. - Proceedings for recognition and enforcement of an arbitration agreement or for vacation, setting aside, correction or modification of an arbitral award, and any application with a court for arbitration assistance and supervision shall be deemed as special proceedings and shall be filled with the regional trial court (i) where arbitration proceedings are conducted; (ii) where the asset to be attached or levied upon, or the act to be enjoined is located; (iii) where any of the parties to the dispute resides or has his place of business; or (iv) in the National Judicial Capital Region, at the option of the applicant. SEC. 48. Notice of Proceeding to Parties. - In a special proceeding for recognition and enforcement of an arbitral award, the Court shall send notice to the parties at their address of record in the arbitration, or if any party cannot be served notice at such address, at such party's

last known address. The notice shall be sent at least fifteen (15) days before the date set for the initial hearing of the application. CHAPTER 8 - MISCELLANEOUS PROVISIONS SEC. 49. Office for Alternative Dispute Resolution. - There is hereby established the Office for Alternative Dispute Resolution as an attached agency to the Department of Justice (DOJ) which shall have a Secretariat to be headed by an executive director. The executive director shall be appointed by the President of the Philippines. The objective of the office are: (a) to promote, develop and expand the use of ADR in the private and public sectors; and To assist the government to monitor, study and evaluate the use by the public and the private sector of ADR, and recommend to Congress needful statutory changes to develop. Strengthen and improve ADR practices in accordance with world standards. SEC. 50. Powers and Functions of the Office for Alternative Dispute Resolution . - The Office for Alternative Dispute Resolution shall have the following powers and functions: (a) To formulate standards for the training of the ADR practitioners and service providers; (b) To certify that such ADR practitioners and ADR service providers have undergone the professional training provided by the office; (c) To coordinate the development, implementation, monitoring, and evaluation of government ADR programs; (d) To charge fees for their services; and (e) To perform such acts as may be necessary to carry into effect the provisions of this Act. SEC. 51. Appropriations. - The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following its enactment into law and thereafter. SEC. 52. Implementing Rules and Regulations (IRR). - Within one (1) month after the approval of this Act, the secretary of justice shall convene a committee that shall formulate the appropriate rules and regulations necessary for the implementation of this Act. The committee, composed of representatives from: (a) the Department of Justice;

(b) the Department of Trade and Industry; (c) the Department of the Interior and Local Government; (d) the president of the Integrated Bar of the Philippines; (e) A representative from the arbitration profession; and (f) A representative from the mediation profession; and (g) A representative from the ADR organizations shall within three (3) months after convening, submit the IRR to the Joint Congressional Oversight Committee for review and approval. The Oversight Committee shall be composed of the chairman of the Senate Committee on Justice and Human Rights, chairman of the House Committee on Justice, and one (1) member each from the majority and minority of both Houses. The Joint Oversight Committee shall become functus officio upon approval of the IRR. SEC. 53. Applicability of the Katarungan Pambarangay. - This Act shall not be interpreted to repeal, amend or modify the jurisdiction of the Katarungan Pambarangay under Republic Act No. 7160, otherwise known as the Local Government Code of 1991. SEC. 54. Repealing Clause. - All laws, decrees, executive orders, rules and regulations which are inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly. SEC. 55. Separability Clause. - If for any reason or reasons, any portion or provision of this Act shall be held unconstitutional or invalid, all other parts or provisions not affected shall thereby continue to remain in full force and effect. SEC. 56. Effectivity. - This act shall take effect fifteen days (15) after its publication in at least two (2) national newspapers of general circulation.