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Section 1:THREE FOLD GOAL OF THE ECONOMY

Lee Hong Hok vs David
G.R. No. L-30389, Dec. 27, 1972
FACTS:
This is regari!g a "iece o# $a! %hich A!ia!o Da&i ac'(ire $a%#($ )i)$e )here)o, "(rs(a!) )o his
*isce$$a!eo(s sa$es a""$ica)io!. A#)er a""ro&a$ o# his a""$ica)io!, )he Direc)or o# La!s iss(e a!
orer o# a%ar a! iss(a!ce o# sa$es "a)e!), co&eri!g sai $o) +, &ir)(e o# %hich )he -!ersecre)ar,
o# Agric($)(re a! Na)(ra$ Reso(rces iss(e a .isce$$a!eo(s Sa$es /a)e!). The Regis)er o# Dees
)he! iss(e a! origi!a$ cer)i#ica)e o# )i)$e )o Da&i. D(ri!g a$$ )his )i*e, Lee 0o!g 1o2 i !o) o""ose
!or #i$e a!, a&erse c$ai*.
3SS-4: 5he)her or !o) Lee 0o!g 1o2 *a, '(es)io! )he go&er!*e!) gra!)
04LD: 6!$, )he Go&er!*e!), re"rese!)e +, )he Direc)or o# La!s or )he Secre)ar, o# Agric($)(re a!
Na)(ra$ Reso(rces, ca! +ri!g a! ac)io! )o ca!ce$ a &oi cer)i#ica)e o# )i)$e iss(e "(rs(a!) )o a &oi
"a)e!). This %as !o) o!e +, sai o##icers +() +, "ri&a)e "ar)ies $i2e )he "$ai!)i##s, %ho ca!!o) c$ai*
)ha) )he "a)e!) a! )i)$e iss(e #or )he $a! i!&o$&e are &oi si!ce )he, are !o) )he regis)ere o%!ers
)hereo# !or ha )he, +ee! ec$are as o%!ers i! )he caas)ra$ "roceei!gs a#)er c$ai*i!g i) as )heir
"ri&a)e "ro"er),.
The #ac) )ha) )he gra!) %as *ae +, )he go&er!*e!) is (!is"()e. 5he)her )he gra!) %as i!
co!#or*i), %i)h )he $a% or !o) is a '(es)io! %hich )he go&er!*e!) *a, raise, +() (!)i$ i) is raise +,
)he go&er!*e!) a! se) asie, )he e#e!a!) ca!!o) '(es)io! i). The $ega$i), o# )he gra!) is a '(es)io!
+e)%ee! )he gra!)ee a! )he go&er!*e!). The ecisio! o# res"o!e!) Co(r) o# A""ea$s o# 7a!(ar,
31, 1989 a! i)s reso$()io! o# .arch 19, 1989 are a##ir*e.
Lee Hong Kok ! David" G!R! No! L#$%$&' Dece()e* +,- 1',+
Sec! + A*t! .// 1'&, Constit0tion
3*"eri(* &. Do*i!i(*
$ega$i), o# )he gra!) is a '(es)io! +e)%ee! )he gra!)ee a! )he go&er!*e!)
FACTS:
A!ia!o Da&i ac'(ire $a%#($ )i)$e "(rs(a!) )o his *isce$$a!eo(s sa$es a""$ica)io! i! accora!ce %i)h
%hich a! orer o# a%ar a! #or iss(a!ce o# a sa$es "a)e!) :;si*i$ar )o "(+$ic a(c)io!< %as *ae +,
)he Direc)or o# La!s o! 7(!e 18, 19=8, co&eri!g Lo) 2892.
6! )he +asis o# )he orer o# a%ar o# )he Direc)or o# La!s )he -!ersecre)ar, o# Agric($)(re
a! Na)(ra$ Reso(rces iss(e o! A(g(s) 28, 19=9, .isce$$a!eo(s Sa$es /a)e!) No. >-1209 "(rs(a!)
)o %hich 6CT No. =10 %as iss(e +, )he Regis)er o# Dees o# Naga Ci), o! 6c)o+er 21, 19=9.
La! i! '(es)io! is !o) a "ri&a)e "ro"er), as )he Direc)or o# La!s a! )he Secre)ar, o# Agric($)(re
a! Na)(ra$ Reso(rces ha&e a$%a,s s(s)ai!e )he "(+$ic charac)er #or ha&i!g +ee! #or*e +,
rec$a*a)io! :as o""ose )o "ei))io!ers co!)e!)io! )ha) i) is accre)io!<
The o!$, re*e,: ac)io! #or reco!&e,a!ce o! )he gro(! o# #ra( - ?() )here %as !o #ra( i! )his case
3SS-4S: 1. 5@N Lee 0o!g 1o2 ca! '(es)io! )he gra!). - N6
5@N Da&i has origi!a$ ac'(isi)io! o# )i)$e. A B4S
04LD: Co(r) o# A""ea$s A##ir*e. :!o $ega$ C(s)i#ica)io! #or !($$i#,i!g )he righ) o# Da&i )o )he is"()e
$o) arisi!g #ro* )he gra!) *ae i! his #a&or +, res"o!e!) o##icia$s<
6!$, )he Go&er!*e!), re"rese!)e +, )he Direc)or o# La!s, or )he Secre)ar, o# Agric($)(re
a! Na)(ra$ Reso(rces, ca! +ri!g a! ac)io! )o ca!ce$ a &oi cer)i#ica)e o# )i)$e iss(e "(rs(a!) )o a
&oi "a)e!). The $ega$i), o# )he gra!) is a '(es)io! +e)%ee! )he gra!)ee a! )he go&er!*e!). /ri&a)e
"ar)ies $i2e )he "$ai!)i##s ca!!o) c$ai* )ha) )he "a)e!) a! )i)$e iss(e #or )he $a! i!&o$&e are &oi
si!ce )he, are !o) )he regis)ere o%!ers )hereo# !or ha )he, +ee! ec$are as o%!ers i! )he
caas)ra$ "roceei!gs o# Naga Caas)re a#)er c$ai*i!g i) as )heir "ri&a)e "ro"er),.
5e$$-se))$e R($e : !o "(+$ic $a! ca! +e ac'(ire +, "ri&a)e "erso!s %i)ho() a!, gra!), eD"ress or
i*"$ie, #ro* )he go&er!*e!)
Ca+ac(g &. Lao: ho$er o# a $a! ac'(ire (!er a #ree "a)e!) is *ore #a&ora+$, si)(a)e )ha! )ha) o#
a! o%!er o# regis)ere "ro"er),. No) o!$, oes a #ree "a)e!) ha&e a #orce a! e##ec) o# a Torre!s Ti)$e,
+() i! ai)io! )he "erso! )o %ho* i) is gra!)e has $i2e%ise i! his #a&or )he righ) )o re"(rchase %i)hi!
a "erio o# = ,ears.
3*"eri(* &. Do*i!i(*
3*"eri(* - go&er!*e!) a()hori), "ossesse +, )he s)a)e %hich is a""ro"ria)e$, e*+race i! )he
co!ce") o# so&ereig!),
Do*i!i(* - ca"aci), )o o%! or ac'(ire "ro"er),. The (se o# )his )er* is a""ro"ria)e %i)h re#ere!ce )o
$a!s he$ +, )he s)a)e i! i)s "ro"rie)ar, charac)er. 3! s(ch ca"aci),, i) *a, "ro&ie #or )he eD"$oi)a)io!
a! (se o# $a!s a! o)her !a)(ra$ reso(rces, i!c$(i!g )heir is"osi)io!, eDce") as $i*i)e +, )he
Co!s)i)()io!.
+! Ca*ino ! /ns01a* Gove*n(ent 21'%'"
Land Titles and Deeds – Regalian Doctrine – Statute of Limitations
FACTS:
6! 7(!e 23, 1903, .a)eo CariEo %e!) )o )he Co(r) o# La! Regis)ra)io! )o "e)i)io! his i!scri")io! as
)he o%!er o# a 198 hec)are $a! heFs +ee! "ossessi!g i! )he )he! *(!ici"a$i), o# ?ag(io. .a)eo o!$,
"rese!)e "ossessor, i!#or*a)io! a! !o o)her oc(*e!)a)io!. The S)a)e o""ose )he "e)i)io!
a&erri!g )ha) )he $a! is "ar) o# )he -S *i$i)ar, reser&a)io!. The CLR r($e i! #a&or o# .a)eo. The
S)a)e a""ea$e. .a)eo $os). .a)eo a&erre )ha) a gra!) sho($ +e gi&e! )o hi* +, reaso! o#
i**e*oria$ (se a! occ("a)io! as i! )he "re&io(s case Ca!si!o &s >a$eG H Tig$ao &s Go&er!*e!).
3SS-4:
5he)her or !o) .a)eo is )he righ)#($ o%!er o# )he $a! +, &ir)(e o# his "ossessio! o# i) #or so*e )i*e.
04LD:
No. The s)a)()e o# $i*i)a)io!s i !o) r(! agai!s) )he go&er!*e!). The go&er!*e!) is s)i$$ )he a+so$()e
o%!er o# )he $a! :rega$ia! oc)ri!e<. F(r)her, .a)eoFs "ossessio! o# )he $a! has !o) +ee! o# s(ch a
charac)er as )o re'(ire )he "res(*")io! o# a gra!). No o!e has $i&e ("o! i) #or *a!, ,ears. 3) %as
!e&er (se #or a!,)hi!g +() "as)(rage o# a!i*a$s, eDce") i!sig!i#ica!) "or)io!s )hereo#, a! si!ce )he
i!s(rrec)io! agai!s) S"ai! i) has a""are!)$, !o) +ee! (se +, )he "e)i)io!er #or a!, "(r"ose.
5hi$e )he S)a)e has a$%a,s recog!iGe )he righ) o# )he occ("a!) )o a ee i# he "ro&es a "ossessio!
#or a s(##icie!) $e!g)h o# )i*e, ,e) i) has a$%a,s i!sis)e )ha) he *(s) *a2e )ha) "roo# +e#ore )he "ro"er
a*i!is)ra)i&e o##icers, a! o+)ai! #ro* )he* his ee, a! (!)i$ he i )he S)a)e re*ai!e )he
a+so$()e o%!er.
2. Cari!o >. 3!s($ar Go&er!*e!) :1909<
212 -.S. 999 Fe+r(ar, 23, 1909 Lesso!s A""$ica+$e: :La! Ti)$es a! Dees<
Sec. 2 Ar). I33 1987 Co!s)i)()io!
FACTS:
Cari!o is a! 3goro) o# )he /ro&i!ce o# ?e!g(e), %here )he $a! $ies #i$e #or %ri) o# error +eca(se )he
CF3 a! SC is*isse his "e)i)io! #or a""$ica)io!
For *ore )ha! =0 ,ears +e#ore )he Trea), o# /aris, A"ri$ 11, 1899, he a! his a!ces)ors ha he$ )he
$a! as recog!iGe o%!ers +, )he 3goro)s. :gra!#a)her *ai!)ai! #e!ces #or ho$i!g ca))$eJ#a)her ha
c($)i&a)e "ar)s a! (se "ar)s #or "as)(ri!g ca))$eJhe (se i) #or "as)(re<
1893-1899 H 1898-1897: he *ae a! a""$ica)io! +() %i)h !o a&ai$
1901: "e)i)io! a$$egi!g o%!ershi" (!er )he *or)gage $a% a! )he $a!s %ere regis)ere )o hi* +()
"rocess o!$, es)a+$ishe "ossessor, )i)$e
4&e! i# )he a""$ica!) ha&e )i)$e, he ca!!o) ha&e i) regis)ere, +eca(se )he /hi$i""i!e Co**issio!Ks Ac)
No. 928, o# 1903, eDce")s )he /ro&i!ce o# ?e!g(e) a*o!g o)hers #ro* i)s o"era)io!
3SS-4: 5@N Cari!o has o%!ershi" a! is e!)i)$e )o regis)ra)io!.
04LD: B4S. /e)i)io! Gra!)e.
La! %as !o) regis)ere, a! )here#ore +eca*e, i# i) %as !o) a$%a,s, "(+$ic $a!.
S"a!ish La%: L5here s(ch "ossessors sha$$ !o) +e a+$e )o "ro(ce )i)$e ees, i) sha$$ +e s(##icie!) i#
)he, sha$$ sho% )ha) a!cie!) "ossessio!, as a &a$i )i)$e +, "rescri")io!.L For c($)i&a)e $a!, 20 ,ears,
(!i!)err(")e, is e!o(gh. For (!c($)i&a)e, 30.
A""$ica!)Ks "ossessio! %as !o) (!$a%#($, a! !o a))e*") a) a!, s(ch "roceei!gs agai!s) hi* or his
#a)her e&er %as *ae.
4&er, !a)i&e %ho ha !o) a "a"er )i)$e is !o) a )res"asser.
There *(s) +e a "res(*")io! agai!s) )he go&er!*e!) %he! a "ri&a)e i!i&i(a$ c$ai*s "ro"er), as his
or her o%!. 3) %e!) so #ar as )o sa, )ha) )he $a!s %i$$ +e ee*e "ri&a)e a+se!) co!)rar, "roo#.
/sagani C*03 vs DENR
Fac)s: Cr(G, a !o)e co!s)i)()io!a$is), assai$e )he &a$ii), o# )he RA 8371 or )he 3!ige!o(s /eo"$eFs
Righ)s Ac) o! )he gro(! )ha) )he $a% a*o(!) )o a! (!$a%#($ e"ri&a)io! o# )he S)a)eFs o%!ershi" o&er
$a!s o# )he "(+$ic o*ai! as %e$$ as *i!era$s a! o)her !a)(ra$ reso(rces )herei!, i! &io$a)io! o# )he
rega$ia! oc)ri!e e*+oie i! Sec)io! 2, Ar)ic$e I33 o# )he Co!s)i)()io!. The 3/RA $a% +asica$$,
e!(*era)es )he righ)s o# )he i!ige!o(s "eo"$es o&er a!ces)ra$ o*ai!s %hich *a, i!c$(e !a)(ra$
reso(rces. Cr(G e) a$ co!)e! )ha), +, "ro&ii!g #or a! a$$-e!co*"assi!g e#i!i)io! o# Ma!ces)ra$
o*ai!sN a! Ma!ces)ra$ $a!sN %hich *igh) e&e! i!c$(e "ri&a)e $a!s #o(! %i)hi! sai areas,
Sec)io!s 3:a< a! 3:+< o# sai $a% &io$a)e )he righ)s o# "ri&a)e $a!o%!ers.
3SS-4: 5he)her or !o) )he 3/RA $a% is (!co!s)i)()io!a$.
04LD: The SC e$i+era)e ("o! )he *a))er. A#)er e$i+era)io! )he, &o)e a! reache a 7-7 &o)e.
The, e$i+era)e agai! a! )he sa*e res($) )ra!s"ire. Si!ce )here %as !o *aCori), &o)e, Cr(GFs
"e)i)io! %as is*isse a! )he 3/RA $a% %as s(s)ai!e. 0e!ce, a!ces)ra$ o*ai!s *a, i!c$(e
"(+$ic o*ai! A so*eho% agai!s) )he rega$ia! oc)ri!e.
SANTA ROSA M/N/NG COM4ANY S! 5OSE LE/DO- 5R!
GR O L-99109 Dece*+er 1, 1987
FACTS: /resie!)ia$ Decree No.1219 %as iss(e re'(iri!g ho$ers o# s(+sis)i!g a! &a$i "a)e!)a+$e
*i!i!g c$ai*s $oca)e (!er )he "ro&isio!s o# )he /hi$i""i!e ?i$$ o# 1902 )o #i$e a *i!i!g $ease o#
a""$ica)io! %i)hi! o!e :1< ,ear #ro* )he a""ro&a$ o# )he Decree. To "ro)ec) i)s righ)s, "e)i)io!er Sa!)a
Rosa .i!i!g Co*"a!, #i$es a s"ecia$ ci&i$ ac)io! #or cer)iorari a! "rohi+i)io! co!#ro!)i!g )he sai
Decree as (!co!s)i)()io!a$ i! )ha) i) a*o(!)s )o a e"ri&a)io! o# "ro"er), %i)ho() (e "rocess o# $a%.
S(+se'(e!)$,, )hree :3< a,s a#)er, "e)i)io!er #i$e a *i!i!g $ease a""$ica)io!, +() M(!er "ro)es)N, %i)h
a reser&a)io! )ha) i) is !o) %ai&i!g i)s righ)s o&er i)s *i!i!g c$ai*s (!)i$ )he &a$ii), o# )he Decree sha$$
ha&e +ee! "asse ("o! +, )he Co(r).
The res"o!e!)s a$$ege )ha) "e)i)io!er has !o s)a!i!g )o #i$e )he i!s)a!) "e)i)io! a! '(es)io! )he
Decree as i) #ai$e )o #($$, eDha(s) a*i!is)ra)i&e re*eies.
3SS-4: 5he)her or !o) /resie!)ia$ Decree No. 1219 is co!s)i)()io!a$.
04LD: Bes, /resie!)ia$ Decree No. 1219 is co!s)i)()io!a$, e&e! ass(*i!g arg(e!o )ha) "e)i)io!ers
%as !o) +o(! )o eDha(s) a*i!is)ra)i&e re*eies #or i)s *i!i!g c$ai*s )o +e &a$i i! )he o()se). 3) is a
&a$i eDercise o# )he so&ereig! "o%er o# )he S)a)e, as o%!er, o&er )he $a!s o# )he "(+$ic o*ai!, o#
%hich "e)i)io!erFs *i!i!g c$ai*s s)i$$ #or* a "ar). .oreo&er, /resie!)ia$ Decree No. 1219 is i! accor
%i)h Sec. 8, Ar) I3> o# )he 1937 Co!s)i)()io!.
SAN M/G6EL COR4ORAT/ON S! CO6RT OF A44EALS- digested
:GR O =7887, .a, 28, 1990< (Law on Natural Resources, Tax Declaration and Receipts)
FACTS: This is a "e)i)io! #or re&ie% o! cer)iorari %here "e)i)io!er Sa! .ig(e$ Cor"ora)io! %ho
"(rchase Lo) 889 #ro* Si$&erio /ereG, see2s )he re&ersa$ o# )he ecisio! o# )he Co(r) o# A""ea$s
e!,i!g i)s a""$ica)io! #or regis)ra)io! o# )he sai $a! i! &ie% o# i)s #ai$(re )o sho% e!)i)$e*e!) )here)o.
The So$ici)or Ge!era$ o""ose a! a""ea$e )he a""$ica)io! co!)e!i!g )ha) )he $a! i! '(es)io! is
"ar) o# "(+$ic o*ai! a! )ha) "e)i)io!er +ei!g a "ri&a)e cor"ora)io! is is'(a$i#ie #ro* ho$i!g
a$ie!a+$e $a!s o# )he "(+$ic o*ai!. 3! )his case, "e)i)io!er c$ai*s )ha) i)s "reecessor-i!-i!)eres) ha
o"e!, eDc$(si&e a! (!is"()e "ossessio! o# )he $a! i! '(es)io! +ase o! oc(*e!)ar, e&ie!ce
o# )aD ec$ara)io!s a! recei")s, a! )es)i*o!ia$ e&ie!ce o# &e!or Si$&erio /ereG.
3SS-4: 5he)her or !o) )he e&ie!ce "rese!)e +, )he "e)i)io!er is s(##icie!) )o %arra!) a r($i!g )ha)
"e)i)io!er a!@or i)s "reecessor-i!-i!)eres) has a regis)ra+$e righ) o&er Lo) 889.
04LD: No, oc(*e!)ar, e&ie!ce o# )aD ec$ara)io!s a! recei")s are !o) co!c$(si&e e&ie!ce o#
o%!ershi" or righ) o# "ossessio! o&er a "iece o# $a! +() *ere i!icia o# a c$ai* o# o%!ershi". The,
o!$, +eco*e s)ro!g e&ie!ce o# o%!ershi" o# $a! ac'(ire +, "rescri")io! %he! acco*"a!ie +,
"roo# o# ac)(a$ "ossessio!. A$so, )he )es)i*o!, o# &e!or Si$&erio /ereG as "roo# o# ac)(a$ "ossessio!
is %ea2 a! %as !o) corro+ora)e +, o)her %i)!esses.
G!R! No! &7$++ A8*i1 $%- 1''1
ALFREDO M! ALMEDA- LEONARDO M! ALMEDA and ERNESTO M! ALMEDA- 8etitione*s-
vs! HON! CO6RT OF A44EALS and RE469L/C OF THE 4H/L/44/NES
FACTS:
?ac2gro(!: /e)i)io! #or re&ie% +ase o! )he ecisio! o# CA re&ersi!g )he ecisio! o# )he RTC. 3)
he$ )ha) "ri&a)e res"o!e!)s ha !o) '(a$i#ie #or a gra!) (!er Sec)io! 98:+< o# Co**o!%ea$)h Ac)
191 %hich re'(ires "(+$ic, "eace#($, co!)i!(o(s, a&erse "ossessio! +, )he a""$ica!)s i! )he co!ce")
o# a! o%!er, #or a "erio o# a) $eas) 30 ,ears. The, ha&e )o )heir crei) o!$, se&e!)ee! :17< ,ears
"ossessio! a! occ("a)io! o# )he $a!, co(!)e #ro* 7a!(ar, 23, 1988, %he! i) %as ec$are
a$ie!a+$e a! is"osa+$e, (" )o Se")e*+er 12, 1989, %he! )heir a""$ica)io! #or regis)ra)io! %as #i$e
7(!e 1=, 193= - 4*i$ia!o A$*ea :Fa)her o# /e)i)io!ers< a! Aria!o A$*ea
7a!(ar, 13, 1988 A Dec$are )he $a! as is"osa+$e a! a$ie!a+$e
Se")e*+er 12, 1989 A Regis)ra)io!
L6CAT36N: ?arrio /a*"a!gi! /a)eros, RiGa$, a! escri+e i! S(r&e, /$a! /s(-128=39.
LAND AR4A: 1,208 s'(are *e)ers
R4G3STRAT36N: Se")e*+er 12, 1989, )he A$*ea +ro)hers a""$ie #or )he regis)ra)io! o# )he $a! i!
)he Regio!a$ Tria$ Co(r) o# /asig, ?ra!ch CL>3 :LRC Case No. N-10771<
/ART34S:
?ro)hers - ALFR4D6 .. AL.4DA, L46NARD6 .. AL.4DA a! 4RN4ST6 .. AL.4DA
D3R4CT6R 6F LANDS
6N 50AT GR6-NDS:
The $a! a""$ie #or %as i!a$ie!a+$e #ores) $a! +e#ore i)s re$ease as a$ie!a+$e a! is"osa+$e $a!
o! 7a!(ar, 3, 1988. The a""$ica!)sK "ossessio! )hereo# "rior )o 7a!(ar, 3, 1988 %as i!&a$i #or
"(r"oses o# a gra!) (!er Sec)io! 98:+< o# )he /(+$ic La! Ac)
3SS-4:
5@N )he $a! c$assi#ica)io! o! )he (ra)io! o# )he occ("a)io! o# "e)i)io!ers a##ec)s )he rec2o!i!g "oi!)
o# )he co*"()a)io! o# )he 30-,ear o"e! a! co!)i!(o(s "ossessio!
04LD
The Co(r) o# A""ea$s correc)$, r($e )ha) )he "ri&a)e res"o!e!)s ha !o) '(a$i#ie #or a gra!) (!er
Sec)io! 98:+< o# )he /(+$ic La! Ac) +eca(se )heir "ossessio! o# )he $a! %hi$e i) %as s)i$$ i!a$ie!a+$e
#ores) $a!, or +e#ore i) %as ec$are a$ie!a+$e a! is"osa+$e $a! o# )he "(+$ic o*ai! o! 7a!(ar,
13, 1988, co($ !o) ri"e! i!)o "ri&a)e o%!ershi", a! sho($ +e eDc$(e #ro* )he co*"()a)io! o# )he
30-,ear o"e! a! co!)i!(o(s "ossessio! i! co!ce") o# o%!er re'(ire (!er Sec)io! 98:+< o# Co*.
Ac) 191. 3) accors %i)h o(r r($i!g i! Director of Lands vs.Court of ppeals, !"arra #is$ar et al., 178
SCRA 708.
Di*ecto* o: Lands vs! Ka1a;i /nvest(ents /nc!
Fac)s:
This is a! a""ea$ #ro* )he ecisio! o# )he Co(r) o# Firs) 3!s)a!ce :!o% Regio!a$ Tria$ Co(r)< o#
/a*"a!ga, e!,i!g )he a""$ica)io! o# 1a$ahi 3!&es)*e!)s, 3!c. :1a$ahi, #or shor)< #or regis)ra)io! o#
Lo) No. 18=1-? o# )he F$oria+$a!ca Caas)re. 3! i)s ecisio!, )he Co(r) o# A""ea$s #o(! )he #o$$o%i!g
#ac)s )o +e es)a+$ishe +, )he e&ie!ce: 6! Dece*+er 12, 1983, 1a$ahi 3!&es)*e!), 3!c. *o&e #or a!
a&a!ce heari!g o# Lo) No. 18=1-?, F$oria+$a!ca Caas)re. 4&ie!ce %as "rese!)e a! 1a$ahiKs
)i)$e %as )o +e regis)ere (!er )he "ro&isio!s o# Ac) 998. The ?(rea( o# Fores)r,Ks o""osi)io! is
+ase o! )he gro(! )ha) )hese $a!s are "ar) o# )he &as) "(+$ic #ores), 2!o%! as T3.?4R LAND o#
/roCec) No. 11, 4Dhi+i) 9, Direc)or o# Fores)r,. -!)i$ !o% )hese $a!s are !o) re$ease +, )he "ro"er
a()hori)ies as a$ie!a+$e agric($)(ra$ $a!sP i!s)ea o! A(g(s) 9, 1988, )he /resie!) o# )he /hi$i""i!es
iss(e /roc$a*a)io! No. 82, ec$ari!g )hese $a!s as "ar) o# )he .). Dors) Fores) Reser&e.
3ss(e: a. 5he)her or !o) *i!i!g c$ai*s, ac'(ire, regis)ere, "er#ec)e ac)e, a! "a)e!)a+$e (!er
)he 6$ .i!i!g La%, *a)(re )o "ri&a)e o%!ershi" %hich %o($ e!)i)$e )he c$ai*a!)-a""$ica!) )o )he
o%!ershi" )hereo#.
+. 5hich age!c, has )he a()hori), )o eDa*i!e, "rocess a! #i! o() %he)her or !o) )he re'(ire*e!)s
o# )he Ac) o# Co!gress o# 1902 ha&e +ee! co*"$ie %i)h, +, )he a""$ica!) Q )he co(r)s or )he ?(rea(
o# .i!esR
04LD: S.ere $oca)io! oes !o) *ea! a+so$()e o%!ershi" o&er )he a##ec)e $a! or )he $oca)e c$ai*.
3) *ere$, segrega)es )he $oca)e $a! or area #ro* )he "(+$ic o*ai! +, +arri!g o)her %o($ +e
$oca)ors #ro* $oca)i!g )he sa*e a! a""ro"ria)i!g #or )he*se$&es )he *i!era$s #o(! )herei!. To r($e
o)her%ise %o($ i*"$, )ha) $oca)io! is a$$ )ha) is !eee )o ac'(ire a! *ai!)ai! righ)s o&er a $oca)e
*i!i!g c$ai*. This, )he Co(r) ca!!o) a""ro&e or sa!c)io! +eca(se i) is co!)rar, )o )he i!)e!)io! o# )he
$a%*a2er )ha) )he $oca)or sho($ fait$full% and consistentl% co*"$, %i)h )he re'(ire*e!)s #or a!!(a$
%or2 a! i*"ro&e*e!)s i! )he $oca)e *i!i!g c$ai*s. 3) is !o) c$ear i# c$ai*a!) 1a$ahi has #($$,
co*"$ie %i)h )he re'(ire*e!)s o# )he Ac) o# Co!gress o# 1902. This is a #ac)(a$ iss(e %hich is !o)
%i)hi! )he sco"e o# o(r C(risic)io!. The recors sho% )ha) c$ai*a!) has a$rea, #i$e a *i!i!g $ease
a""$ica)io! :". 3=7, Recor o! A""ea$<. 3)s *i!i!g c$ai*s, )here#ore, are ee*e co&ere +, /.D.
1219, a! )he ?(rea( o# .i!es *a,, accori!g$, "rocess )he sa*e as a $ease a""$ica)io!, i!
accora!ce %i)h /.D. 983, "(rs(a!) )o Sec. 2 o# /.D. No. 1219. 3) is (!ers)oo o# co(rse )ha) "rior )o
)he a""ro&a$ o# )he $ease a""$ica)io!, )he a""$ica!) *(s) sho% )ha) i) has #($$, a! #ai)h#($$, co*"$ie
%i)h )he re'(ire*e!)s o# )he /hi$i""i!e ?i$$ o# 1902, i! e##ec) ("ho$i!g )he isse!)i!g o"i!io! o#
7(s)ice Co!ce"cio! i! )he Go$ Cree2 .i!i!g case. As )o %he)her or !o) )he ?(rea( o# .i!es is
$i2e%ise '(a$i#ie )o r($e o! %he)her )here has +ee! #($$ a! #ai)h#($ co*"$ia!ce %i)h )he re'(ire*e!)s
o# )he /hi$i""i!e ?i$$ o# 1902 as a*e!e, )he Co(r) r($e )ha) )he ?(rea( o# .i!es is so e*"o%ere
as a coro$$ar, #(!c)io! i! )he "rocessi!g o# *i!i!g $ease a""$ica)io!s. The ecisio! o# )he CF3 o#
/a*"a!ga, :!o% Regio!a$ Tria$ Co(r)< is here+, AFF3R.4D, %i)h )he .6D3F3CAT36N i! )ha) 1a$ahiKs
*i!i!g c$ai*s *a, +e "rocesse as a *i!i!g $ease a""$ica)io! +, )he ?(rea( o# .i!es.
&! RE469L/C OF THE 4H/L/44/NES S! 4EDRO O! ENC/SO- G!R! No! 1<%1=7
CALL476, SR., &.:
?e#ore (s is a "e)i)io! #or re&ie% o! certiorari (!er R($e 9= o# )he R($es o# Co(r), as
a*e!e, assai$i!g )he Decisio!
T1U
o# )he Co(r) o# A""ea$s :CA< a)e Se")e*+er 28, 2003,
%hich a##ir*e )he Decisio!
T2U
o# )he Regio!a$ Tria$ Co(r) :RTC<, 3+a, Va*+a$es, ?ra!ch 71,
"ro*($ga)e o! 7($, 31, 2001 i! LRC Case No. RTC-N-7=-3. The CA a! )he )ria$ co(r)
aC(ica)e Lo) No. 2278-A, Ca. 8=2-D, .asi!$oc Caas)re i! #a&or o# res"o!e!) /ero 6.
4!ciso, "(rs(a!) )o Sec)io! 29 o# /resie!)ia$ Decree :/.D.< No. 1=29.
The #ac)s, as c($$e #ro* )he recors o# )he case, sho% )ha) o! A"ri$ 29, 2000, )he
res"o!e!), a$$egi!g )o +e )he o%!er i! #ee si*"$e o# a "arce$ o# resie!)ia$ $a! $oca)e
i!#aranga% So()h /o+$acio!, .asi!$oc, Va*+a$es, #i$e a "e)i)io! #or $a! regis)ra)io! +e#ore
)he RTC o# 3+a, Va*+a$es. The $o) is escri+e as #o$$o%s:
A "arce$ o# $a! :Lo) 2278-A o# )he s(+i&isio! "$a! Cs-03-012=82-D +ei!g
a "or)io! o# Lo) 2278, Ca. 8=2-D L.R.C. Rec. No.<, si)(a)e i! )he ?arrio o#
So()h /o+$acio!, .(!ici"a$i), o# .asi!$oc, /ro&i!ce o# Va*+a$es. ?o(!e
o! )he N5., a$o!g $i!e 1-2 +, S)a. L(cia S)ree)P o! )he N4., a$o!g $i!e 2-3 +,
Ca"). A$+righ) S)ree)P o! )he S4. H S5. a$o!g $i!e 3-9-1 +, Lo) 2278-? o# )he
s(+. "$a!. ?egi!!i!g a) a "oi!) *ar2e M1N o! "$a! +ei!g N. 39 eg. 3=F4.,
12.0= *. #ro* ?LL..1,
Ca. 8=2-D.
)he!ce N. 18 eg. 13F4., 32.98 *. )o "oi!). 2P
)he!ce S. 7= eg. 0=F4., 99.83 *. )o "oi!). 3P
)he!ce S. 18 eg. 19F5., 33.38 *. )o "oi!). 9P
)he!ce N. 73 eg. =7F5., 99.78 *. )o "oi!). o#P
+egi!!i!gP co!)ai!i!g a! area o# 6N4 T06-SAND F6-R 0-NDR4D S4>4NTB-
F3>4 :1,97=< s'(are *e)ers. A$$ "oi!)s re#erre )o are i!ica)e o! )he "$a! a! are
*ar2e o! )he gro(! +, /.S. c,$. co!c. *o!s. 1= D 90 c*s. ?eari!gsP )r(eP a)e o#
origi!a$ s(r&e,P Se"). 1927-7($, 1928 a! )ha) o# )he s(+i&isio! s(r&e,P 7($, 22,
1999 a! %as a""ro&e o! 7a!. 20, 2000.
T3U
The res"o!e!) a&erre, inter alia, )ha) he ac'(ire )i)$e )o )he sai $o) +, &ir)(e o# a! eD)raC(icia$
se))$e*e!) o# es)a)e a! '(i)c$ai* o! .arch 1=, 1999P )he sai "ro"er), is !o) )e!a!)e or occ("ie
+, a!, "erso! o)her )ha! )he res"o!e!) a! his #a*i$, %ho are i! ac)(a$ "h,sica$ "ossessio! o# )he
sa*eP a! )he res"o!e!) a! his "reecessors-i!-i!)eres) ha&e +ee! i! co!)i!(o(s, "eace#($, o"e!,
!o)orio(s, (!i!)err(")e a! a&erse "ossessio! o# )he $a! i! )he co!ce") o# a! o%!er #or !o) $ess
)ha! 30 ,ears i**eia)e$, "recei!g )he #i$i!g o# )he a""$ica)io!.
T9U
/e)i)io!er Re"(+$ic o# )he /hi$i""i!es, )hro(gh )he 6##ice o# )he So$ici)or Ge!era$ :6SG<, o""ose )he
a""$ica)io! o! )he #o$$o%i!g gro(!s: :a< !ei)her )he res"o!e!) !or his "reecessors-i!-i!)eres) ha&e
+ee! i! o"e!, co!)i!(o(s, eDc$(si&e, a! !o)orio(s "ossessio! a! occ("a)io! o# )he s(+Cec) $a!
si!ce 7(!e 12, 199= or "rior )here)oP :+< )he res"o!e!) #ai$e )o a(ce a!, *(!i*e!) o# )i)$e a!@or
)he )aD ec$ara)io! %i)h )he a""$ica)io! )o "ro&e "ona fide ac'(isi)io! o# )he $a! a""$ie #or or i)s
o"e!, co!)i!(o(s, eDc$(si&e a! !o)orio(s "ossessio! a! occ("a)io! )hereo# i! )he co!ce") o# o%!er
si!ce 7(!e 12, 199= or "rior )here)oP :c< )he a$$ege )aD ec$ara)io! a&er)e )o i! )he a""$ica)io! oes
!o) a""ear )o +e ge!(i!e a! )he )aD ec$ara)io!s i!ica)e s(ch "ossessio! )o +e o# rece!) &i!)ageP
:< )he c$ai* o# o%!ershi" i! #ee si*"$e o! )he +asis o# S"a!ish )i)$e or gra!) ca! !o $o!ger +e a&ai$e
o# +, )he res"o!e!) co!sieri!g )ha) he #ai$e )o #i$e a! a""ro"ria)e a""$ica)io! #or regis)ra)io! %i)hi!
)he "erio o# siD *o!)hs #ro* Fe+r(ar, 18, 1978 as re'(ire +, /.D. No. 892P a! :e< )he s(+Cec) $a!
is a "or)io! o# )he "(+$ic o*ai! +e$o!gi!g )o )he Re"(+$ic o# )he /hi$i""i!es %hich is !o) s(+Cec) )o
"ri&a)e a""ro"ria)io!.
T=U
A#)er ascer)ai!i!g )ha) )he C(risic)io!a$ re'(ire*e!)s #or )he a""$ica)io! %ere o!e i! accora!ce %i)h
)he $a% (ri!g )he i!i)ia$ heari!g
T8U
o! No&e*+er 9, 2000, )he )ria$ co(r) iss(e a! 6rer o#
De#a($)
T7U
o! 7a!(ar, 3, 2001 agai!s) a$$ "erso!s %i)h )he eDce")io! o# )he go&er!*e!).
The res"o!e!) "rese!)e )aD recei")s )o sho% )ha) )he "ro"er), %as ec$are #or )aDa)io! "(r"oses
i! his !a*e. 0e a$so )es)i#ie )ha) he ac'(ire )he "ro"er), +, i!heri)a!ce #ro* his ecease #a)her,
>ice!)e 4!ciso, %ho ie o! .a, 18, 1991. 0e )he! i**eia)e$, )oo2 "ossessio! o# )he "ro"er), a!
co!s)r(c)e a ho(se )hereo! i! 1991. 6! .arch 1=, 1999, he a! his si+$i!gs eDec()e a!
eD)raC(icia$ se))$e*e!) o# es)a)e %here )he $a! %as aC(ica)e i! his #a&or.
The res"o!e!) #(r)her !arra)e )ha) )he "ro"er), %as origi!a$$, o%!e +, )he .(!ici"a$i), o#
.asi!$oc, Va*+a$es. 6! 6c)o+er =, 1988, )he *(!ici"a$i), "asse Reso$()io! No. 71,
T8U
(!er)a2i!g )o
co!s)r(c) a roa a$o!g )he shore$i!e o# )he po"lacion, +() re'(iri!g $a!o%!ers aCoi!i!g )he roas )o
share i! )he eD"e!ses #or a! i!!er %a$$ aCace!) )o )heir $o)s. 3! &ie% o# )his, )he sa*e reso$()io!
"ro&ie )ha):
504R4AS, %here )he a+o&e $a!o%!ers share i! )he co!s)r(c)io! o# )he roas, )he
sa*e *a, +e gi&e! )he "riori), )o ac'(ire s(ch ai)io!a$ a&ai$a+$e areas +,
"(rchase, i# s(ch ai)io!a$ areas are !o) !eee +, )he go&er!*e!) #or "(+$ic (se,
)he a&a!ces o# )he $a!o%!ers as a res($) o# his TsicU co!s)r(c)io! :i!!er %a$$< +e
co!siere as "rice o# )he $a!, "ro&ie )ha) )he cos) a! &a$(e o# )he i!!er %a$$
eDcees )he assesse &a$(e o# )he $a!, a! i# )he cos) o# )he i!!er %a$$ is $ess )ha!
)he assesse &a$(e o# )he $a!, )he $a!o%!ers %i$$ ha&e )o "a, )he corres"o!i!g
+a$a!ce )o )he go&er!*e!)P W
T9U
6! .arch 8, 1989, )he .(!ici"a$i), o# .asi!$oc, Va*+a$es "asse s(""$e*e!)ar, Reso$()io! No.
102,
T10U
%hich s)a)e )ha) i! co!siera)io! o# )he #i!a!cia$ assis)a!ce eD)e!e +, )he a+())i!g "ro"er),
o%!ers, a! +eca(se )he go&er!*e!) !o $o!ger !eee )he ai)io!a$ areas #or "(+$ic (se, )he
*(!ici"a$i), %as a()horiGi!g )he .(!ici"a$ .a,or )o e!)er i!)o a! sig! ees o# "(rchase +e)%ee!
)he *(!ici"a$i), a! )he $a!o%!ers co!cer!e. Co!se'(e!)$,, )he .(!ici"a$ Co(!ci$ o# .asi!$oc,
Va*+a$es (!a!i*o(s$, a""ro&e Reso$()io! No. 102-A
T11U
a)e .arch 1=, 1989, a()horiGi!g i)s
*a,or )o eDec()e a ee o# sa$e i! #a&or o# 0o!ora)o 4aEo, co&eri!g a "or)io! o# )he rec$ai*e $o)s
!o $o!ger !eee #or "(+$ic (se. 0o!ora)o %as )h(s e!)i)$e )o +(, )he $o) #or his he$" i! carr,i!g o()
)he "roCec) e!&isio!e i! Reso$()io! No. 71, a! a#)er )he s(+*issio! o# a! i)e*iGe s)a)e*e!) o# )he
cos) o# )he co!s)r(c)io! o# )he i!!er %a$$ a$o!g S)a. L(cia S)ree).
3**eia)e$, )herea#)er, )he .(!ici"a$i), o# .asi!$oc, Va*+a$es, re"rese!)e +, i)s .a,or,
/.A. 4aEo, eDec()e a Dee o# A+so$()e Sa$e
T12U
co&eri!g a "iece o# rec$ai*e $a!
co!)ai!i!g *ore or $ess 2,790 s'(are *e)ers i! #a&or o# 0o!ora)o 4aEo. The ee s)a)e
)ha) )he &e!ee co!s)r(c)e )he i!!er %a$$ !eee )o #aci$i)a)e )he #a+rica)io! o# a "or)io! o#
S)a. L(cia S)ree), %hich %as o""osi)e his $o), a! )he eD)e!sio!s o# .agsa,sa, a! Ca").
A$+righ) S)ree)s a) a )o)a$ eD"e!se o# /1,883.80. Co!sieri!g )ha) )he assesse &a$(e o# )he
$o) %as /2,092.=0, or /908.70 *ore )ha! )he &e!ee s"e!) #or )he co!s)r(c)io! o# )he i!!er
%a$$, )he &e!ee "ai /908.70 )o )he &e!or.
The res"o!e!) a*i))e )ha) 0o!ora)o %as his (!c$e, +ei!g his #a)herFs ha$#-+ro)her.
T13U
0e
#(r)her !arra)e )ha) o! Dece*+er 9, 1980, )he s"o(ses 0o!ora)o a! 4s"era!Ga 4aEo so$
)he $o) )o >ice!)e ?. 4!ciso #or /2,092.=0 via a Dee o# A+so$()e Sa$e.
T19U
6! 7a!(ar, 17,
1981, >ice!)e 4!ciso, Na)i&ia 4aEo As(!cio! a! The$*a A. 4aEo e!)ere i!)o a Dee
o# /ar)i)io!
T1=U
i!&o$&i!g )he sa*e "arce$ o# $a!. >ice!)e %as a%are o!e-ha$# o# )he )o)a$
area o# )he "ro"er),, 1,398 s'(are *e)ers, *ore or $essP Na)i&ia a! The$*a go) o!e-#o(r)h
each, or a""roDi*a)e$, 897.= s'(are *e)ers i!i&i(a$$,.
No cross-eDa*i!a)io! %as co!(c)e a! !o e&ie!ce %as a(ce +, )he go&er!*e!) )o
co!)ro&er) )he a""$ica)io! #or regis)ra)io!.
6! .a, 8, 2001, Direc)or Fe$i!o .. Cor)eG o# )he De"ar)*e!) o! Regis)ra)io! s(+*i))e )he
Re"or)
T18U
o# )he La! Regis)ra)io! A()hori),, i!#or*i!g )he )ria$ co(r) )ha) i) %as !o) i! a
"osi)io! )o &eri#, %he)her )he "arce$ o# $a! s(+Cec) o# regis)ra)io! %as a$rea, co&ere +, a
$a! "a)e!) a! "re&io(s$, a""ro&e iso$a)e s(r&e,. Ac)i!g o! )his re"or), )he )ria$ co(r)
irec)e )he La!s .a!age*e!) ?(rea(, )he Co**(!i), 4!&iro!*e!) a! Na)(ra$
Reso(rces 6##ice o# 3+a, Va*+a$es, a! )he
De"ar)*e!) o# 4!&iro!*e!) a! Na)(ra$ Reso(rces Regio!a$ 4Dec()i&e Direc)or #or Regio!
333, Sa! Fer!a!o, /a*"a!ga, )o s(+*i) a re"or) o! )he s)a)(s o# )he "arce$ o# $a!.
T17U
5i)ho() %ai)i!g #or )he #i!a$ re"or), )he )ria$ co(r) gra!)e )he a""$ica)io! #or regis)ra)io! o!
7($, 31, 2001, )he is"osi)i&e "or)io! o# )he ecisio! reas:
504R4F6R4, )his Co(r), a#)er co!#ir*i!g )he 6rer o# Ge!era$ De#a($) e!)ere i!)o )he
recor o# )his case o! 7a!(ar, 3, 2001 here+, aC(ica)es Lo) No. 2278-A, Ca. 8=2-D,
.asi!$oc Caas)re, co!)ai!i!g a! area o# 1,97= s'(are *e)ers, si)(a)e a) ?rg,. So()h
/o+$acio!, .asi!$oc, Va*+a$es, /hi$i""i!es, as a""eari!g o! )he a""ro&e /$a! No. Cs-03-
012=82-D :4Dhi+i) M.N< a! a$so i! )he Tech!ica$ Descri")io! o# sai $o) :4Dhi+i) M1N< i! #a&or o#
)he a""$ica!) %hose aress is a) ?rg,. So()h /o+$acio!, .asi!$oc, Va*+a$es, /hi$i""i!es, i!
accora!ce %i)h Sec)io! 29 o# /resie!)ia$ Decree No. 1=29. This aC(ica)io! ho%e&er is
s(+Cec) )o )he &ario(s ease*e!)s@reser&a)io!s "ro&ie #or (!er "er)i!e!) $a%s, /resie!)ia$
Decree a!@or /resie!)ia$ Le))ers o# 3!s)r(c)io!, %hich sho($ +e a!!o)a)e@"roCec)e i! )he
)i)$e )o +e iss(e.
6!ce )his ecisio! +eco*es #i!a$, $e) )he corres"o!i!g ecree a! )i)$e +e iss(e.
S6 6RD4R4D.
T18U

The )ria$ co(r) r($e )ha) )he res"o!e!) sa)is#ac)ori$, "ro&e his o%!ershi" i! #ee si*"$e, as
%e$$ as )he ie!)i), o# )he $a! so(gh) )o +e )i)$e. Li2e%ise, )he )ria$ co(r) #o(! )ha) )he
res"o!e!), as %e$$ as his "reecessors-i!-i!)eres), ha +ee! i! o"e!, "eace#($, co!)i!(o(s,
"(+$ic, a&erse, a! (!er a "ona fide c$ai* o# o%!ershi". Accori!g )o )he )ria$ co(r), )here
%as !o e&ie!ce )ha) )he s(+Cec) "arce$ o# $a! %as %i)hi! a!, go&er!*e!) reser&a)io!, or
)ha) )he a""$ica!) %as is'(a$i#ie #ro* o%!i!g rea$ "ro"er), (!er )he Co!s)i)()io!.
T19U
The Re"(+$ic o# )he /hi$i""i!es a""ea$e )he case +e#ore )he CA, co!)e!i!g )ha) )he )ria$
co(r) erre i! gra!)i!g )he a""$ica)io! es"i)e his #ai$(re )o "ro&e regis)ra+$e )i)$e o&er Lo) No.
2278-A.
The CA is"ose o# )he a""ea$ o! Se")e*+er 28, 2003 a! a##ir*e )he ecisio! o# )he )ria$ co(r).
The fallo o# )he ecisio! reas:
504R4F6R4, "re*ises co!siere, )he assai$e ecisio! a)e 7($, 31, 2001 o#
)he RTC, ?ra!ch 71 o# 3+a, Va*+a$es i! LRC Case No. RTC-N-7=-1 is here+,
AFF3R.4D.
S6 6RD4R4D.
T20U
The "e)i)io!er is"e!se %i)h )he #i$i!g o# a *o)io! #or reco!siera)io! a! #or)h%i)h #i$e )he
i!s)a!) "e)i)io!.
The 6SG assig!e )he #o$$o%i!g error )o )he a""e$$a)e co(r):
T04 C6-RT 6F A//4ALS 4RR4D 6N A X-4ST36N 6F LA5 3N
GRANT3NG R4S/6ND4NTFS /4T3T36N F6R R4G3STRAT36N SANS ANB
S0653NG T0AT T04 S-?74CT /R6/4RTB 5AS /R4>36-SLB
D4CLAR4D AL34NA?L4 AND D3S/6SA?L4 LANDS 6F T04 /-?L3C
D6.A3N.
T21U
The "e)i)io!er co!)e!s )ha) )he #irs) a! "ri*oria$ e$e*e!) i! orer )o %arra!) )he
regis)ra)io! o# )i)$e is )o sho% )ha) )he $a! *(s) +e a! a$ie!a+$e a! is"osa+$e $a! o# )he
"(+$ic o*ai!. 6! )his !o)e, )he "e)i)io!er +e$ie&es )ha) )he res"o!e!) #ai$e )o a(ce a!,
e&ie!ce )o sho% )ha) )he s(+Cec) $a! %as a$rea, "re&io(s$, ec$are "ar) o# s(ch a$ie!a+$e
a! is"osa+$e $a! o# )he "(+$ic o*ai!. F(r)her*ore, )he "e)i)io!er as )ha) (!er )he
Rega$ia! oc)ri!e, a$$ $a!s o# )he "(+$ic o*ai! +e$o!g )o )he S)a)e, a! )hose !o) o)her%ise
a""eari!g )o +e c$ear$, %i)hi! "ri&a)e o%!ershi" are "res(*e )o +e$o!g )o i).
3! his co**e!) )o )he "e)i)io!, )he res"o!e!) asser)s )ha) )he CA %as correc) i! a##ir*i!g )he
ecisio! o# )he $a! regis)ra)io! co(r). The res"o!e!) ci)es )he #o$$o%i!g C(s)i#ica)io! o# )he
CA i! s(""or)i!g his c$ai* o&er Lo) No. 2278-A:
Recors re&ea$ )ha) s(+Cec) $a! is a resie!)ia$ $a! o%!e +, )he
.(!ici"a$i), o# .asi!$oc, Va*+a$es. The .(!ici"a$i), o# .asi!$oc, )hro(gh
Reso$()io!s 71, 102 a! 102-A-29 so$ )he s(+Cec) $a! )o 0o!ora)o 4aEo
as e&ie!ce +, )he Dee o# A+so$()e Sa$e a)e .arch 31, 1989 eDec()e
+, )he .(!ici"a$ .a,or.
Ar)ic$e 923 o# )he Ci&i$ Coe "ro&ies )ha):
MAr). 923. The "ro"er), o# "ro&i!ces, ci)ies, a!
*(!ici"a$i)ies is i&ie i!)o "ro"er), #or "(+$ic (se a!
"a)ri*o!ia$ "ro"er),.N
/ro"er)ies o# "o$i)ica$ s(+i&isio!TsU %hich are "a)ri*o!ia$ i! charac)er *a,
+e a$ie!a)e. ?, a!a$og,, %he! a *(!ici"a$i),Fs "ro"er)ies #or "(+$ic (se are
!o $o!ger i!)e!e #or s(ch (se, )he sa*e +eco*e "a)ri*o!ia$ a! *a, +e
)he s(+Cec) o# a co!)rac). Th(s, )he Dee o# A+so$()e Sa$e eDec()e +, a!
+e)%ee! )he .(!ici"a$ .a,or o# .asi!$oc a! 0o!ora)o 4aEo %as a &a$i
co!)rac). S(+Cec) $a! %as $i2e%ise so$ +, 0o!ora)o 4aEo )o "e)i)io!er-
a""e$$eeFs #a)her, >ice!)e 4!ciso, +, &ir)(e o# a Dee o# A+so$()e Sa$e. Fro*
)he!, s(+Cec) $a! cha!ge ha! (!)i$ i) %as ac'(ire +, "e)i)io!er-a""e$$ee
%he! his si+$i!gs eDec()e a! 4D)raC(icia$ /ar)i)io! assig!i!g sai $a! )o
hi*. 3) %as ec$are #or )aDa)io! "(r"oses i! his !a*e (!er TaD Dec$ara)io!
No. 007-0700R. W
S(+Cec) $a! %as rec$assi#ie as resie!)ia$. 3) %as a$rea, segrega)e #ro*
)he "(+$ic o*ai! a! ass(*e )he charac)er o# "ri&a)e o%!ershi". 3) %as
rec$ai*e +, )he .(!ici"a$i), o# .asi!$oc a! e&e!)(a$$, aC(ica)e )o
0o!ora)o 4aEo. The .(!ici"a$i), o# .asi!$oc *(s) ha&e +ee! i! "ossessio!
o# )he s(+Cec) $a! e&e! +e#ore 1989 co!sieri!g )ha) i) %as origi!a$$,
s(r&e,e %a, +ac2 i! 1927-1928. 3! )he eDercise o# i)s "ro"rie)ar, righ), )he
.(!ici"a$i), o# .asi!$oc &a$i$, co!&e,e )he s(+Cec) $a! )o "e)i)io!er-
a""e$$eeFs "reecessors-i!-i!)eres). /e)i)io!er-a""e$$eeFs "ossessio! a!
occ("a)io! o# )he s(+Cec) $a! is co!)i!(o(s, "(+$ic, a&erse a!
(!i!)err(")e a! i! )he co!ce") a! o%!er a! !o o)her "erso! c$ai*e
"ossessio! a! o%!ershi" o# )he sa*e. Ar)ic$e 1137 o# )he Ci&i$ Coe
"ro&ies:
MAr). 1137. 6%!ershi" a! o)her rea$ righ)s o&er i**o&a+$es
a$so "rescri+e :sic< )hro(gh (!i!)err(")e a&erse
"ossessio! )hereo# #or )hir), ,ears, %i)ho() !ee o# )i)$es or o#
goo #ai)h.N
/are!)he)ica$$,, "e)i)io!er-a""e$$eeFs "ossessio! )ac2e %i)h )ha) o# his
"reecessors-i!-i!)eres) a$rea, co*"$ie %i)h )he )hir), :30<-,ear
re'(ire*e!) o# o"e!, co!)i!(o(s, eDc$(si&e a! !o)orio(s "ossessio!
re'(ire (!er )he $a%.
/resci!i!g #ro* )he #oregoi!g, "e)i)io!er-a""e$$ee s(##icie!)$, a!
sa)is#ac)ori$, "ro&e his rea$ a! a+so$()e o%!ershi" i! #ee si*"$eP )ha) he
has a regis)ra+$e )i)$e o&er )he s(+Cec) $a! a! )ha) he co*"$ie %i)h )he
re'(ire*e!)s (!er )he $a% )o %arra!) regis)ra)io! o# )i)$e o&er )he s(+Cec)
$a!.
T22U
The "e)i)io! is *eri)orio(s.
5hi$e i) is )he r($e )ha) #i!i!gs o# #ac) o# a""e$$a)e co(r)s are co!c$(si&e ("o! )his Co(r),
a*o!g )he recog!iGe eDce")io!s is %here )he #i!i!gs o# #ac) are !o) s(""or)e +, )he
recor or are co!s"ic(o(s$, erro!eo(s as )o co!s)i)()e a serio(s a+(se o# iscre)io!.
T23U
This
is )he si)(a)io! i! )his case.
Sec)io! 19:1< o# /.D. No. 1=29, o)her%ise 2!o%! as )he /ro"er), Regis)ra)io! Decree, "ro&ies:
S4C. 19. '$o ma% appl%. AThe #o$$o%i!g "erso!s *a, #i$e i! )he "ro"er Co(r) o# Firs)
3!s)a!ce a! a""$ica)io! #or regis)ra)io! o# )i)$e )o $a!, %he)her "erso!a$$, or )hro(gh
)heir ($, a()horiGe re"rese!)a)i&es:
Those %ho +, )he*se$&es or )hro(gh )heir "reecessors-i!-i!)eres) ha&e +ee! i!
o"e!, co!)i!(o(s, eDc$(si&e a! !o)orio(s "ossessio! a! occ("a)io! o# a$ie!a+$e
a! is"osa+$e $a!s o# )he "(+$ic o*ai! (!er a "ona fide c$ai* o# o%!ershi"
si!ce 7(!e 12, 199=, or ear$ier.
A""$ica!)s #or regis)ra)io! o# )i)$e *(s) )here#ore "ro&e )he #o$$o%i!g: :a< )ha) )he $a! #or*s
"ar) o# )he is"osa+$e a! a$ie!a+$e $a!s o# )he "(+$ic o*ai!P a! :+< )ha) )he, ha&e +ee!
i! o"e!, co!)i!(o(s, eDc$(si&e,
a! !o)orio(s "ossessio! a! occ("a)io! o# )he sa*e (!er a "ona fide c$ai* o# o%!ershi"
ei)her si!ce )i*e i**e*oria$, or si!ce 7(!e 12, 199=. 3) is !o) is"()e )ha) )he $a! so(gh) )o
+e regis)ere %as origi!a$$, "ar) o# )he rec$a*a)io! "roCec) (!er)a2e! +, )he .(!ici"a$i), o#
.asi!$oc, Va*+a$es. The "re&ai$i!g r($e is )ha) rec$ai*e is"osa+$e $a!s o# )he "(+$ic
o*ai! *a, o!$, +e $ease a! !o) so$ )o "ri&a)e "ar)ies. These $a!s re*ai!e sui generis,
as )he o!$, a$ie!a+$e or is"osa+$e $a!s o# )he "(+$ic o*ai! %hich )he go&er!*e!) co($
!o) se$$ )o "ri&a)e "ar)ies eDce") i# )he $egis$a)(re "asses a $a% a()horiGi!g s(ch sa$e.
Rec$ai*e $a!s re)ai! )heir i!here!) "o)e!)ia$ as areas #or "(+$ic (se or "(+$ic ser&ice.
T29U
The o%!ershi" o# $a!s rec$ai*e #ro* #oreshore areas is roo)e i! )he Rega$ia! oc)ri!e,
%hich ec$ares )ha) a$$ $a!s a! %a)ers o# )he "(+$ic o*ai! +e$o!g )o )he S)a)e.
T2=U
6!
No&e*+er 7, 1938, )he Na)io!a$ Asse*+$, a""ro&e Co**o!%ea$)h Ac) No. 191, a$so 2!o%!
as )he /(+$ic La! Ac), co*"i$i!g a$$ )he eDis)i!g $a%s o! $a!s o# )he "(+$ic o*ai!. This
re*ai!s )o )his a, )he eDis)i!g a! a""$ica+$e ge!era$ $a% go&er!i!g )he c$assi#ica)io! a!
is"osi)io! o# $a!s o# )he "(+$ic o*ai!. The S)a)e "o$ic, "rohi+i)i!g )he sa$e o# go&er!*e!)
rec$ai*e, #oreshore a! *arsh, a$ie!a+$e $a!s o# )he "(+$ic o*ai! )o "ri&a)e i!i&i(a$s
co!)i!(e (!er )he 193= Co!s)i)()io!.
3!ee, )here is !o)hi!g )o s(""or) )he res"o!e!)Fs c$ai* )ha) )he "ro"er), M%as rec$assi#ie
as resie!)ia$ W a$rea, segrega)e #ro* )he "(+$ic o*ai! a! ass(*e )he charac)er o#
"ri&a)e o%!ershi".N A) )he
*o*e!), i) is !o) c$ear as )o %he! )he "ro"er a()hori)ies c$assi#ie )he s(+Cec) as a$ie!a+$e
a! is"osa+$e. 3) *(s) +e s)resse )ha) i!co!)ro&er)i+$e e&ie!ce *(s) +e "rese!)e )o
es)a+$ish )ha) )he $a! s(+Cec) o# )he a""$ica)io! is a$ie!a+$e or is"osa+$e.
T28U
Accori!g )o )he CA, M)he .(!ici"a$i), o# .asi!$oc *(s) ha&e +ee! i! "ossessio! o# )he
s(+Cec) $a! e&e! +e#ore 1989 co!sieri!g )ha) i) %as origi!a$$, s(r&e,e %a, +ac2 i! 1927-
1928.N This is !o) )he 2i! o# "ossessio! a! occ("a)io! co!)e*"$a)e (!er )he $a%. 5hi$e
)he s(+Cec) "ro"er), %as s)i$$ i! )he ha!s o# )he *(!ici"a$i),, i) %as (!e!ia+$, "ar) o# )he
"(+$ic o*ai!. The *(!ici"a$i), ca!!o) )he! +e co!siere a "reecessor-i!-i!)eres) o# )he
a""$ica!) #ro* %ho* )he "erio o# "ossessio! a! occ("a)io! re'(ire +, $a% *a, +e
rec2o!e %i)h. A!, o)her i!)er"re)a)io! %o($ +e a!gero(s$, e)ri*e!)a$ )o o(r !a)io!a$
"a)ri*o!,.
4&e! ass(*i!g )ha) 0o!ora)o 4aEo, )he res"o!e!)Fs ear$ies) "reecessor-i!-i!)eres),
"ossesse )he "ro"er), as ear$, as 1989, )he res"o!e!)Fs c$ai* *(s) s)i$$ #ai$, as he %as
(!a+$e )o "ro&e o"e!, co!)i!(o(s, eDc$(si&e, a! !o)orio(s "ossessio! a! occ("a)io! o# )he
s(+Cec) $a! (!er a "ona fide c$ai* o# ac'(isi)io! o# o%!ershi". As )he Co(r) r($e
i! Repu"lic v( lcona"a:
T27U
The $a% s"ea2s o# possession and occupation. Si!ce )hese %ors are
se"ara)e +, )he co!C(!c)io! and, )he c$ear i!)e!)io! o# )he $a% is !o) )o
*a2e o!e s,!o!,*o(s %i)h )he o)her. /ossessio! is +roaer )ha!
occ("a)io! +eca(se i) i!c$(es co!s)r(c)i&e "ossessio!. 5he!, )here#ore, )he
$a% as )he %or occupation, i) see2s )o e$i*i) )he a$$ e!co*"assi!g e##ec)
o# co!s)r(c)i&e "ossessio!. Ta2e! )oge)her %i)h )he %ors o"e!, co!)i!(o(s,
eDc$(si&e a! !o)orio(s, )he %or occupation ser&es )o high$igh) )he #ac) )ha)
#or a! a""$ica!) )o '(a$i#,, his "ossessio! *(s) !o) +e a *ere #ic)io!. Ac)(a$
"ossessio! o# a $a! co!sis)s i! )he *a!i#es)a)io! o# ac)s o# o*i!io! o&er i)
o# s(ch a !a)(re as a "ar), %o($ !a)(ra$$, eDercise o&er his o%! "ro"er),.
The res"o!e!)Fs "ossessio! a! )ha) o# his M"reecessors-i!-i!)eres)N %i$$ !o) s(##ice #or
"(r"oses o# C(icia$ co!#ir*a)io! o# )i)$e. 5ha) is ca)egorica$$, re'(ire +, $a% is o"e!,
co!)i!(o(s, eDc$(si&e, a! !o)orio(s "ossessio! a! occ("a)io! (!er a "ona fide c$ai* o#
o%!ershi" si!ce 7(!e 12, 199= or ear$ier.
The e&ie!ce o! recor sho%s )ha) a ho(se %as co!s)r(c)e o! )he s(+Cec) "ro"er), o!$, i!
1991. Cer)ai! iscre"a!cies $i2e%ise s(rro(! )he a""$ica)io! #or regis)ra)io!: 0o!ora)o
4aEo so$ a "arce$ o# $a! co!sis)i!g o# 2,790 s'(are *e)ers o! Dece*+er 9, 1980 )o
>ice!)e 4!ciso a$o!eP o! 7a!(ar, 17, 1981, >ice!)e 4!ciso, Na)i&ia 4aEo As(!cio! a!
The$*a 4aEo eDec()e a ee o# "ar)i)io! co&eri!g )he sa*e $o). 5h, %as )here a !ee )o
"ar)i)io! )he "ro"er), i# )he e!)ire $a! ha a$rea, +ee! so$ )o >ice!)eR The Co(r) a$so
!o)es )ha) i! )he sai ee o# "ar)i)io!, o!e-ha$# o# )he )o)a$ area o# )he $a!, %hich %as 1,398
s'(are *e)ers, %as aC(ica)e i! #a&or o# >ice!)eP ho%e&er, i! )he res"o!e!)Fs a""$ica)io!
#or regis)ra)io!, )he $a! so(gh) )o +e regis)ere co!sis)s o# 1,97= s'(are *e)ers.
5e$$-e!)re!che is )he r($e )ha) )he +(re! o# "roo# i! $a! regis)ra)io! cases res)s o! )he
a""$ica!) %ho *(s) sho% c$ear, "osi)i&e a! co!&i!ci!g e&ie!ce )ha) his a$$ege "ossessio!
a! occ("a)io! %ere o# )he !a)(re a! (ra)io! re'(ire +, $a%. ?are a$$ega)io!s, %i)ho()
*ore, o !o) a*o(!) )o "re"o!era!) e&ie!ce )ha) %o($ shi#) )he +(re! )o )he o""osi)or.
T28U
4&ie!)$,, )he res"o!e!) #ai$e )o "ro&e )ha) :1< Lo) No. 2278-A %as c$assi#ie as "ar) o# )he
is"osa+$e a! a$ie!a+$e $a! o# )he "(+$ic o*ai!P a! :2< he a! his "reecessors-i!-
i!)eres) ha&e +ee! i! o"e!, co!)i!(o(s, eDc$(si&e, a! !o)orio(s "ossessio! a! occ("a)io!
)hereo# i! )he co!ce") o# o%!ers si!ce )i*e i**e*oria$, or #ro* 7(!e 12, 199=.
504R4F6R4, )he "e)i)io! is GRANT4D. The Decisio! o# )he Co(r) o# A""ea$s a)e
Se")e*+er 28, 2003 i! CA-G.R. C> No. 728=9 is R4>4RS4D a! S4T AS3D4. Res"o!e!)
/ero 6. 4!cisoFs a""$ica)io! #or regis)ra)io! a! iss(a!ce o# )i)$e )o Lo) No. 2278-A, Ca.
8=2-D, .asi!$oc Caas)re, is here+, D3S.3SS4D #or $ac2 o# *eri).
S6 6RD4R4D.
'!G!R! No! 1$$+7% 501> '- +%%+ FRANC/SCO /! CHAE?- 8etitione*-
vs!469L/C ESTATES A6THOR/TY and AMAR/ COASTAL 9AY DEELO4MENT COR4ORAT/ON-
FACTS:
/(+$ic 4s)a)es A()hori), :L/4AL #or +re&i),< )o isc$ose a$$ #ac)s o! /4AKs )he! o!-goi!g re!ego)ia)io!s
%i)h A*ari Coas)a$ ?a, a! De&e$o"*e!) Cor"ora)io! :LA.AR3L #or +re&i),< )o rec$ai* "or)io!s o#
.a!i$a ?a,.
The /(+$ic 4s)a)es A()hori), is )he ce!)ra$ i*"$e*e!)i!g age!c, )as2e )o (!er)a2e rec$a*a)io!
"roCec)s !a)io!%ie. 3) )oo2 o&er )he $easi!g a! se$$i!g #(!c)io!s o# )he D4NR i!so#ar as rec$ai*e or
a+o() )o +e rec$ai*e #oreshore $a!s are co!cer!e.
/4A so(gh) )he )ra!s#er )o A.AR3, a "ri&a)e cor"ora)io!, o# )he o%!ershi" o# 77.39 hec)ares o# )he
Freeo* 3s$a!s. /4A a$so so(gh) )o ha&e 290.1=8 hec)ares o# s(+*erge areas o# .a!i$a ?a, )o
A.AR3
L6CAT36N: .a!i$a ?a,, Freeo* 3s$a!s
LAND AR4A: )*+(, $ectares of reclaimed lands and su"merged areas of -anila #a%, 1=7.891
hec)ares, 2=0 hec)ares o# s(+*erge areas s(rro(!i!g )hese is$a!s
R4G3STRAT36N:
/ART34S:
FRANC3SC6 3. C0A>4V , /4A , A.AR3
6N 50AT GR6-NDS:
Fi!a$$,, /4A )heoriGes )ha) )he Lac) o# co!&e,i!g )he o%!ershi" o# )he rec$ai*e $a!s )o "(+$ic
res"o!e!) /4A )ra!s#or*e s(ch $a!s o# )he "(+$ic o*ai! )o "ri&a)e $a!s.L This )heor, is echoe
+, A.AR3 %hich *ai!)ai!s )ha) )he Liss(a!ce o# )he s"ecia$ "a)e!) $eai!g )o )he e&e!)(a$ iss(a!ce o#
)i)$e )a2es )he s(+Cec) $a! a%a, #ro* )he $a! o# "(+$ic o*ai! a! co!&er)s )he "ro"er), i!)o
"a)ri*o!ia$ or "ri&a)e "ro"er),.L 3! shor), /4A a! A.AR3 co!)e! )ha) %i)h )he iss(a!ce o# S"ecia$
/a)e!) No. 3=17 a! )he corres"o!i!g cer)i#ica)es o# )i)$es, )he 1=7.89 hec)ares co*"risi!g )he
Freeo* 3s$a!s ha&e +eco*e "ri&a)e $a!s o# /4A.
3SS-4: 5he)her or !o) )he )ra!s#er is &a$i.
04LD
/ri&a)e $a!s )a2e! +, )he Go&er!*e!) #or "(+$ic (se (!er i)s "o%er o# e*i!e!) o*ai! +eco*e
(!'(es)io!a+$, "ar) o# )he "(+$ic o*ai!. Ne&er)he$ess, Sec)io! 8= o# /D No. 1=29 a()horiGes )he
Regis)er o# Dees )o iss(e i! )he !a*e o# )he Na)io!a$ Go&er!*e!) !e% cer)i#ica)es o# )i)$e co&eri!g
s(ch eD"ro"ria)e $a!s
A$ie!a+$e $a!s o# )he "(+$ic o*ai! Lgra!)e, o!a)e, or )ra!s#erre )o a "ro&i!ce, *(!ici"a$i),, or
+ra!ch or s(+i&isio! o# )he Go&er!*e!),L as "ro&ie i! Sec)io! 80 o# CA No. 191, *a, +e
regis)ere (!er )he Torre!s S,s)e* "(rs(a!) )o Sec)io! 103 o# /D No. 1=29. S(ch regis)ra)io!,
ho%e&er, is eD"ress$, s(+Cec) )o )he co!i)io! i! Sec)io! 80 o# CA No. 191 )ha) )he $a! Lsha$$ !o) +e
a$ie!a)e, e!c(*+ere or o)her%ise is"ose of in a manner affecting its title, except w$en
aut$ori.ed "% Congress.L This "ro&isio! re#ers )o go&er!*e!) rec$ai*e, #oreshore a! *arsh, $a!s
o# )he "(+$ic o*ai! )ha) ha&e +ee! )i)$e +() s)i$$ ca!!o) +e a$ie!a)e or e!c(*+ere (!$ess
eD"ress$, a()horiGe +, Co!gress. The !ee #or $egis$a)i&e a()hori), "re&e!)s )he regis)ere $a! o#
)he "(+$ic o*ai! #ro* +eco*i!g "ri&a)e $a! )ha) ca! +e is"ose o# )o '(a$i#ie "ri&a)e "ar)ies.
This sche*e, i# a$$o%e, ca! e&e! +e a""$ie )o a$ie!a+$e agric($)(ra$ $a!s o# )he "(+$ic o*ai! si!ce
/4A ca! Lac'(ire D D D a!, a! a$$ 2i!s o# $a!s.L This %i$$ o"e! )he #$ooga)es )o cor"ora)io!s a!
e&e! i!i&i(a$s ac'(iri!g h(!res o# hec)ares o# a$ie!a+$e $a!s o# )he "(+$ic o*ai! (!er )he
g(ise )ha) i! )he ha!s o# /4A )hese $a!s are "ri&a)e $a!s. This %i$$ res($) i! cor"ora)io!s a*assi!g
h(ge $a!ho$i!gs !e&er +e#ore see! i! )his co(!)r, - crea)i!g )he &er, e&i$ )ha) )he co!s)i)()io!a$ +a!
%as esig!e )o "re&e!). This %i$$ co*"$e)e$, re&erse )he c$ear irec)io! o# co!s)i)()io!a$ e&e$o"*e!)
i! )his co(!)r,.
The 1=7.89 hec)ares o# rec$ai*e $a!s co*"risi!g )he Freeo* 3s$a!s, !o% co&ere +, cer)i#ica)es
o# )i)$e i! )he !a*e o# /4A, are a$ie!a+$e $a!s o# )he "(+$ic o*ai!. /4A *a, $ease )hese $a!s )o
"ri&a)e cor"ora)io!s +() *a, !o) se$$ or )ra!s#er o%!ershi" o# )hese $a!s )o "ri&a)e cor"ora)io!s. /4A
*a, o!$, se$$ )hese $a!s )o /hi$i""i!e ci)iGe!s, s(+Cec) )o )he o%!ershi" $i*i)a)io!s i! )he 1987
Co!s)i)()io! a! eDis)i!g $a%s.
The =92.1= hec)ares o# s(+*erge areas o# .a!i$a ?a, re*ai! i!a$ie!a+$e !a)(ra$ reso(rces o# )he
"(+$ic o*ai! (!)i$ c$assi#ie as a$ie!a+$e or is"osa+$e $a!s o"e! )o is"osi)io! a! ec$are !o
$o!ger !eee #or "(+$ic ser&ice. The go&er!*e!) ca! *a2e s(ch c$assi#ica)io! a! ec$ara)io! o!$,
a#)er /4A has rec$ai*e )hese s(+*erge areas. 6!$, )he! ca! )hese $a!s '(a$i#, as agric($)(ra$
$a!s o# )he "(+$ic o*ai!, %hich are )he o!$, !a)(ra$ reso(rces )he go&er!*e!) ca! a$ie!a)e. 3! )heir
"rese!) s)a)e, )he =92.1= hec)ares o# s(+*erge areas are i!a$ie!a+$e a! o()sie )he co**erce o#
*a!.
Si!ce )he A*e!e 7>A see2s )o )ra!s#er )o A.AR3, a "ri&a)e cor"ora)io!, o%!ershi" o# 77.39
hec)ares110 o# )he Freeo* 3s$a!s, s(ch )ra!s#er is &oi #or +ei!g co!)rar, )o Sec)io! 3, Ar)ic$e I33 o#
)he 1987 Co!s)i)()io! %hich "rohi+i)s "ri&a)e cor"ora)io!s #ro* ac'(iri!g a!, 2i! o# a$ie!a+$e $a! o#
)he "(+$ic o*ai!.
Si!ce )he A*e!e 7>A a$so see2s )o )ra!s#er )o A.AR3 o%!ershi" o# 290.1=8 hec)ares111 o# s)i$$
s(+*erge areas o# .a!i$a ?a,, s(ch )ra!s#er is &oi #or +ei!g co!)rar, )o Sec)io! 2, Ar)ic$e I33 o# )he
1987 Co!s)i)()io! %hich "rohi+i)s )he a$ie!a)io! o# !a)(ra$ reso(rces o)her )ha! agric($)(ra$ $a!s o#
)he "(+$ic o*ai!. /4A *a, rec$ai* )hese s(+*erge areas. Therea#)er, )he go&er!*e!) ca! c$assi#,
)he rec$ai*e $a!s as a$ie!a+$e or is"osa+$e, a! #(r)her ec$are )he* !o $o!ger !eee #or "(+$ic
ser&ice. S)i$$, )he )ra!s#er o# s(ch rec$ai*e a$ie!a+$e $a!s o# )he "(+$ic o*ai! )o A.AR3 %i$$ +e &oi
i! &ie% o# Sec)io! 3, Ar)ic$e I33 o# )he 1987 Co!s)i)()io! %hich "rohi+i)s "ri&a)e cor"ora)io!s #ro*
ac'(iri!g a!, 2i! o# a$ie!a+$e $a! o# )he "(+$ic o*ai!.
1%! La0*e1 vs Ga*cia
G!R! No! '+%1$! 501> +7- 1''% G!R! No! '+%=,- 501> +7- 1''%
O5EDA- 8etitione*- vs! E.EC6T/E SECRETARY MACARA/G- 5R!- et a$
FACTS:
These are )%o "e)i)io!s #or "rohi+i)io! see2i!g )o e!Coi! res"o!e!)s, )heir re"rese!)a)i&es a!
age!)s #ro* "roceei!g %i)h )he +ii!g #or )he sa$e o# )he 3,179 s'(are *e)ers o# $a! a) 308
Ro""o!ggi, =-Cho*e .i!a)o-2(, To2,o, 7a"a! sche($e o! Fe+r(ar, 21, 1990.
The s(+Cec) "ro"er), i! )his case is o!e o# )he #o(r :9< "ro"er)ies i! 7a"a! ac'(ire +, )he /hi$i""i!e
go&er!*e!) (!er )he Re"ara)io!s Agree*e!) e!)ere i!)o %i)h 7a"a! o! .a, 9, 19=8, a! is "ar) o#
)he i!e*!i#ica)io! )o )he Fi$i"i!o "eo"$e #or )heir $osses i! $i#e a! "ro"er), a! )heir s(##eri!g (ri!g
5or$ 5ar 33.
As i!)e!e, )he s(+Cec) "ro"er), +eca*e )he si)e o# )he /hi$i""i!e 4*+ass, (!)i$ )he $a))er %as
)ra!s#erre )o Na*"eiai o! 7($, 22, 1978. D(e )o )he #ai$(re o# o(r go&er!*e!) )o "ro&ie !ecessar,
#(!s, )he Ro""o!gi "ro"er), has re*ai!e (!e&e$o"e si!ce )ha) )i*e.
A "ro"osa$ %as "rese!)e )o /resie!) CoraGo! C. A'(i!o +, #or*er /hi$i""i!e A*+assaor )o
7a"a!, Car$os 7. >a$eG, )o *a2e )he "ro"er), )he s(+Cec) o# a $ease agree*e!) %i)h a 7a"a!ese #ir*
%here, a) )he e! o# )he $ease "erio, a$$ )he )hree $ease +(i$i!gs sha$$ +e occ("ie a! (se +, )he
/hi$i""i!e go&er!*e!). 6! A(g(s) 11, 1988, /resie!) A'(i!o crea)e a co**i))ee )o s)(, )he
is"osi)io!@()i$iGa)io! o# /hi$i""i!e go&er!*e!) "ro"er)ies i! To2,o a! 1o+e.
6! 7($, 2=, 1987, )he /resie!) iss(e 4Dec()i&e 6rer No. 298 e!)i)$i!g !o!-Fi$i"i!o ci)iGe!s or
e!)i)ies )o a&ai$ o# re"ara)io!sF ca"i)a$ goos a! ser&ices i! )he e&e!) o# sa$e, $ease or is"osi)io!.
The #o(r "ro"er)ies i! 7a"a! i!c$(i!g )he Ro""o!gi %ere s"eci#ica$$, *e!)io!e i! )he #irs)
M5hereasN c$a(se.
A*is) o""osi)io! +, &ario(s sec)ors, )he 4Dec()i&e +ra!ch o# )he go&er!*e!) has +ee! "(shi!g, %i)h
grea) &igor, i)s ecisio! )o se$$ )he re"ara)io!s "ro"er)ies s)ar)i!g %i)h )he Ro""o!gi $o). The "ro"er),
has )%ice +ee! se) #or +ii!g a) a *i!i*(* #$oor "rice a) Y22= *i$$io!.
3SS-4S:
The "e)i)io!er i! G.R. No. 92013 raises )he #o$$o%i!g iss(es:
Ca! )he Ro""o!gi "ro"er), a! o)hers o# i)s 2i! +e a$ie!a)e +, )he /hi$i""i!e
Go&er!*e!)RP a!
Does )he Chie# 4Dec()i&e, her o##icers a! age!)s, ha&e )he a()hori), a! C(risic)io!, )o se$$
)he Ro""o!gi "ro"er),R
3! G.R. N6. 92097, a"ar) #ro* '(es)io!i!g )he a()hori), o# )he go&er!*e!) )o a$ie!a)e )he Ro""o!gi
"ro"er), assai$s )he co!s)i)()io!a$i), o# 4Dec()i&e 6rer No. 298, )he "e)i)io!er a$so '(es)io!s )he
+ii!g "roce(res o# )he Co**i))ee o! )he -)i$iGa)io! or Dis"osi)io! o# /hi$i""i!e Go&er!*e!)
/ro"er)ies i! 7a"a! #or +ei!g iscri*i!a)or, agai!s) Fi$i"i!o ci)iGe!s a! Fi$i"i!o-o%!e e!)i)ies +,
e!,i!g )he* )he righ) )o +e i!#or*e a+o() )he +ii!g re'(ire*e!)s.
04LD:
The "e)i)io! is gra!)e. As "ro"er), o# "(+$ic o*i!io!, )he Ro""o!gi $o) is o()sie )he co**erce o#
*a!. 3) ca!!o) +e a$ie!a)e. 3)s o%!ershi" is a s"ecia$ co$$ec)i&e o%!ershi" #or ge!era$ (se a!
e!Co,*e!), a! a""$ica)io! )o )he sa)is#ac)io! o# co$$ec)i&e !ees, a! resies i! )he socia$ gro(". The
"(r"ose is !o) )o ser&e )he S)a)e as a C(riica$ "erso!, +() )he ci)iGe!sP i) is i!)e!e #or )he co**o!
a! "(+$ic %e$#are a! ca!!o) +e )he o+Cec) o# a""ro"ria)io!. :Ta2e! #ro* 3 .a!resa, 88-89P ci)e i!
To$e!)i!o, Co**e!)aries o! )he Ci&i$ Coe o# )he /hi$i""i!es, 1983 4i)io!, >o$. 33, ". 28<.
The Ro""o!gi "ro"er), is correc)$, c$assi#ie (!er "aragra"h 2 o# Ar)ic$e 920 o# )he Ci&i$ Coe as
"ro"er), +e$o!gi!g )o )he S)a)e a! i!)e!e #or so*e "(+$ic ser&ice.
The #ac) )ha) )he Ro""o!gi si)e has !o) +ee! (se #or a $o!g )i*e #or ac)(a$ 4*+ass, ser&ice oes
!o) a()o*a)ica$$, co!&er) i) )o "a)ri*o!ia$ "ro"er),. A!, s(ch co!&ersio! ha""e!s o!$, i# )he "ro"er),
is %i)hra%! #ro* "(+$ic (se :Ce+( 6D,ge! a! Ace),$e!e Co. &. ?erci$$es, 88 SCRA 981 T197=U<. A
"ro"er), co!)i!(es )o +e "ar) o# )he "(+$ic o*ai!, !o) a&ai$a+$e #or "ri&a)e a""ro"ria)io! or o%!ershi"
M(!)i$ )here is a #or*a$ ec$ara)io! o! )he "ar) o# )he go&er!*e!) )o %i)hra% i) #ro* +ei!g s(ch
:3g!acio &. Direc)or o# La!s, 108 /hi$. 33= T1980U<.
A! a+a!o!*e!) o# )he i!)e!)io! )o (se )he Ro""o!gi "ro"er), #or "(+$ic ser&ice a! )o *a2e i)
"a)ri*o!ia$ "ro"er), (!er Ar)ic$e 922 o# )he Ci&i$ Coe *(s) +e e#i!i)e. A+a!o!*e!) ca!!o) +e
i!#erre #ro* )he !o!-(se a$o!e s"ecia$$, i# )he !o!-(se %as a))ri+()a+$e !o) )o )he go&er!*e!)Fs o%!
e$i+era)e a! i!(+i)a+$e %i$$ +() )o a $ac2 o# #i!a!cia$ s(""or) )o re"air a! i*"ro&e )he "ro"er),
:See 0eirs o# Fe$i!o Sa!)iago &. LaGarao, 188 SCRA 388 T1988U<. A+a!o!*e!) *(s) +e a cer)ai!
a! "osi)i&e ac) +ase o! correc) $ega$ "re*ises.
A *ere )ra!s#er o# )he /hi$i""i!e 4*+ass, )o Na*"eiai i! 1978 is !o) re$i!'(ish*e!) o# )he
Ro""o!gi "ro"er),Fs origi!a$ "(r"ose.
4Dec()i&e 6rer No. 298, )ho(gh i)s )i)$e ec$ares a! Ma()hori), )o se$$N, oes !o) ha&e a "ro&isio! i!
)his )eD) eD"ress$, a()horiGi!g )he sa$e o# )he #o(r "ro"er)ies "roc(re #ro* 7a"a! #or )he go&er!*e!)
sec)or. 3) *ere$, i!)e!s )o *a2e )he "ro"er)ies a&ai$a+$e )o #oreig!ers a! !o) )o Fi$i"i!os a$o!e i!
case o# a sa$e, $ease or o)her is"osi)io!.
Re" Ac) No. 88=7, oes !o) a()horiGe )he 4Dec()i&e De"ar)*e!) )o se$$ )he Ro""o!gi "ro"er),. 3)
*ere$, e!(*era)es "ossi+$e so(rces o# #()(re #(!i!g )o a(g*e!) :as a! %he! !eee< )he Agraria!
Re#or* F(! crea)e (!er 4Dec()i&e 6rer No. 299.
.oreo&er, /resie!) A'(i!oFs a""ro&a$ o# )he reco**e!a)io! +, )he i!&es)iga)i!g co**i))ee )o se$$
)he Ro""o!gi "ro"er), %as "re*a)(re or, a) )he &er, $eas), co!i)io!e o! a &a$i cha!ge i! )he "(+$ic
charac)er o# )he Ro""o!gi "ro"er),. 3) oes !o) ha&e )he #orce a! e##ec) o# $a% si!ce )he /resie!)
a$rea, $os) her $egis$a)i&e "o%ers. The Co!gress ha a$rea, co!&e!e #or *ore )ha! a ,ear.
Ass(*i!g )ha) )he Ro""o!gi "ro"er), is !o $o!ger o# "(+$ic o*i!io!, )here is a!o)her o+s)ac$e )o i)s
sa$e +, )he res"o!e!)s. There is !o $a% a()horiGi!g i)s co!&e,a!ce, a! )h(s, )he Co(r) sees !o
co*"e$$i!g reaso! )o )ac2$e )he co!s)i)()io!a$ iss(e raise +, "e)i)io!er 6Cea.
1%! La0*e1 vs! Ga*cia
Sa1vado* H! La0*e1 vs! Ra(on Ga*cia- et! A1!
G! R! No! '+%1$! 501> +7- 1''%!
/utierre., &(
Doct*ine: A "ro"er), co!)i!(es )o +e "ar) o# )he "(+$ic o*ai!, !o) a&ai$a+$e #or "ri&a)e a""ro"ria)io!
or o%!ershi" (!)i$ )here is a #or*a$ ec$ara)io! o! )he "ar) o# )he go&er!*e!) )o %i)hra% i) #ro* +ei!g
s(ch.
Facts: The s(+Cec) Ro""o!gi "ro"er), is o!e o# )he #o(r "ro"er)ies i! 7a"a! ac'(ire +, )he
/hi$i""i!e go&er!*e!) (!er )he Re"ara)io!s Agree*e!) e!)ere i!)o %i)h 7a"a! o! 9 .a, 19=8, )he
o)her $o)s +ei!g )he Na*"eiai /ro"er), :si)e o# /hi$i""i!e 4*+ass, Cha!cer,<, )he 1o+e Co**ercia$
/ro"er), :Co**ercia$ $o) (se as %areho(se a! "ar2i!g $o) o# co!s($a)e s)a##<, a! )he 1o+e
Resie!)ia$ /ro"er), :a &aca!) resie!)ia$ $o)<.
The "ro"er)ies a! )he ca"i)a$ goos a! ser&ices "roc(re #ro* )he 7a"a!ese go&er!*e!) #or
!a)io!a$ e&e$o"*e!) "roCec)s are "ar) o# )he i!e*!i#ica)io! )o )he Fi$i"i!o "eo"$e #or )heir $osses i!
$i#e a! "ro"er), a! )heir s(##eri!g (ri!g 5or$ 5ar 33.
The Re"ara)io!s Agree*e!) "ro&ies )ha) re"ara)io!s &a$(e a) Y==0 *i$$io! %o($ +e "a,a+$e i! 20
,ears i! accora!ce %i)h a!!(a$ sche($es o# "roc(re*e!)s )o +e #iDe +, )he /hi$i""i!e a!
7a"a!ese go&er!*e!)s :Ar)ic$e 2, Re"ara)io!s Agree*e!)<.
The Ro""o!gi "ro"er), %as ac'(ire #ro* )he 7a"a!ese go&er!*e!) (!er )he Seco! Bear
Sche($e a! $is)e (!er )he heai!g MGo&er!*e!) Sec)orN, )hro(gh Re"ara)io!s Co!)rac) 300
a)e 27 7(!e 19=8. The Ro"o!ggi "ro"er), co!sis)s o# )he $a! a! +(i$i!g M#or )he Cha!cer, o# )he
/hi$i""i!e 4*+ass,.N As i!)e!e, i) +eca*e )he si)e o# )he /hi$i""i!e 4*+ass, (!)i$ )he $a))er %as
)ra!s#erre )o Na*"eiai o! 22 7($, 1978 %he! )he Ro""o!gi +(i$i!g !eee *aCor re"airs. D(e )o
)he #ai$(re o# o(r go&er!*e!) )o "ro&ie !ecessar, #(!s, )he Ro""o!gi "ro"er), has re*ai!e
(!e&e$o"e si!ce )ha) )i*e.
D(ri!g )he i!c(*+e!c, o# /resie!) A'(i!o, a "ro"osa$ %as *ae +, #or*er /hi$i""i!e A*+assaor
)o 7a"a!, Car$os 7. >a$eG, )o $ease )he s(+Cec) "ro"er), )o 1aCi*a Cor"ora)io!, a 7a"a!ese #ir*, i!
eDcha!ge o# )he co!s)r(c)io! o# 2 +(i$i!gs i! Ro""o!gi, 1 +(i$i!g i! Na*"eiai, a! )he re!o&a)io!
o# )he /hi$i""i!e Cha!cer, i! Na*"eiai. The Go&er!*e!) i !o) ac) #a&ora+$, )o sai "ro"osa$, +()
i!s)ea, o! 11 A(g(s) 1988, /resie!) A'(i!o crea)e a co**i))ee )o s)(, )he is"osi)io! or
()i$iGa)io! o# /hi$i""i!e go&er!*e!) "ro"er)ies i! To2,o a! 1o+e )ho(gh A6-3, a! A6 3-A )o 3-D.
6! 2= 7($, 1987, )he /resie!) iss(e 46 298 e!)i)$i!g !o!-Fi$i"i!o ci)iGe!s or e!)i)ies )o a&ai$ o#
re"ara)io!sF ca"i)a$ goos a! ser&ices i! )he e&e!) o# sa$e, $ease or is"osi)io!. The #o(r "ro"er)ies
i! 7a"a! i!c$(i!g )he Ro""o!gi %ere s"eci#ica$$, *e!)io!e i! )he #irs) M5hereasN c$a(se. A*is)
o""osi)io! +, &ario(s sec)ors, )he 4Dec()i&e +ra!ch o# )he go&er!*e!) has +ee! "(shi!g, %i)h grea)
&igor, i)s ecisio! )o se$$ )he re"ara)io!s "ro"er)ies s)ar)i!g %i)h )he Ro""o!gi $o).
T%o "e)i)io!s #or "rohi+i)io! %ere #i$e see2i!g )o e!Coi! res"o!e!)s, )heir re"rese!)a)i&es a!
age!)s #ro* "roceei!g %i)h )he +ii!g #or )he sa$e o# )he 3,179 s'. *. o# $a! a) 308 Ro""o!ggi, =-
Cho*e .i!a)o-2(, To2,o, 7a"a! sche($e o! 21 Fe+r(ar, 1990P )he )e*"orar, res)ai!i!g orer o#
%hich %as gra!)e +, )he co(r) o! 20 Fe+r(ar, 1990. 3! G.R. No. 92097, a %ri) o# *a!a*(s %as
"ra,e #or )o co*"e$ )he res"o!e!)s )o #($$, isc$ose )o )he "(+$ic )he +asis o# )heir ecisio! )o "(sh
)hro(gh %i)h )he sa$e o# )he Ro""o!gi "ro"er), i!s"i)e o# s)ro!g "(+$ic o""osi)io! a! )o eD"$ai! )he
"roceei!gs %hich e##ec)i&e$, "re&e!) )he "ar)ici"a)io! o# Fi$i"i!o ci)iGe!s a! e!)i)ies i! )he +ii!g
"rocess.
/ss0es: Ca! )he Ro""o!gi "ro"er), a! o)hers o# i)s 2i! +e a$ie!a)e +, )he /hi$i""i!e Go&er!*e!)R
Does )he Chie# 4Dec()i&e, her o##icers a! age!)s, ha&e )he a()hori), a! C(risic)io!, )o se$$ )he
Ro""o!gi "ro"er),R
He1d: No. The Ro""o!gi "ro"er), %as ac'(ire )oge)her %i)h )he o)her "ro"er)ies )hro(gh re"ara)io!
agree*e!)s. The, %ere assig!e )o )he go&er!*e!) sec)or a! )ha) )he Ro""o!gi "ro"er), %as
s"eci#ica$$, esig!a)e (!er )he agree*e!) )o ho(se )he /hi$i""i!e e*+ass,. 3) is o# "(+$ic o*i!io!
(!$ess i) is co!&i!ci!g$, sho%! )ha) )he "ro"er), has +eco*e "a)ri*o!ia$. The res"o!e!)s ha&e
#ai$e )o o so.
As "ro"er), o# "(+$ic o*i!io!, )he Ro""o!gi $o) is o()sie )he co**erce o# *a!. 3) ca!!o) +e
a$ie!a)e. 3)s o%!ershi" is a s"ecia$ co$$ec)i&e o%!ershi" #or ge!era$ (se a! "a,*e!), i! a""$ica)io!
)o )he sa)is#ac)io! o# co$$ec)i&e !ees, a! resies i! )he socia$ gro(". The "(r"ose is !o) )o ser&e )he
S)a)e as )he C(riica$ "erso! +() )he ci)iGe!sP i) is i!)e!e #or )he co**o! a! "(+$ic %e$#are a!
ca!!o) +e )he o+Cec) o# a""ro"ria)io!.
The #ac) )ha) )he Ro""o!gi si)e has !o) +ee! (se #or a $o!g )i*e #or ac)(a$ 4*+ass, ser&ice oes!F)
a()o*a)ica$$, co!&er) i) )o "a)ri*o!ia$ "ro"er),. A!, s(ch co!&ersio! ha""e!s o!$, i# )he "ro"er), is
%i)hra%! #ro* "(+$ic (se. A "ro"er), co!)i!(es )o +e "ar) o# )he "(+$ic o*ai!, !o) a&ai$a+$e #or
"ri&a)e a""ro"ria)io! or o%!ershi" (!)i$ )here is a #or*a$ ec$ara)io! o! )he "ar) o# )he go&er!*e!) )o
%i)hra% i) #ro* +ei!g s(ch.
11! Mine*s Association o: t;e 4;i1i88ines v! Facto*an- Case Digest
G!R! No! '&$$+ 5an0a*> 1<- 1''7
Fac)s :
For*er /resie!) CoraGo! A'(i!o iss(e 4Dec()i&e 6rer Nos 211 a! 279 i! )he eDercise o# her
$egis$a)i&e "o%ers. 46 No. 211 "rescri+es )he i!)eri* "roce(res i! )he "rocessi!g a! a""ro&a$ o#
a""$ica)io!s #or )he eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! o# *i!era$s "(rs(a!) )o Sec)io! 2, Ar)ic$e
I33 o# )he 1987 Co!s)i)()io!. 46 No. 279 a()horiGes )he D4NR Secre)ar, )o !ego)ia)e a! co!c$(e
Coi!)-&e!)(re, co-"ro(c)io!, or "ro(c)io!- shari!g agree*e!)s #or )he eD"$ora)io!, e&e$o"*e!), a!
()i$iGa)io! o# *i!era$ reso(rces.
The iss(a!ce a! )he i*"ei!g i*"$e*e!)a)io! +, )he D4NR o# A*i!is)ra)i&e 6rer Nos. =7 %hich
ec$ares )ha) a$$ eDis)i!g *i!i!g $eases or agree*e!)s %hich %ere gra!)e a#)er )he e##ec)i&i), o# )he
1987 Co!s)i)()io!Wsha$$ +e co!&er)e i!)o "ro(c)io!-shari!g agree*e!)s %i)hi! o!e :1< ,ear #ro*
)he e##ec)i&i), o# )hese g(ie$i!es.N a! A*i!is)ra)i&e 6rer No. 82 %hich "ro&ies )ha) a #ai$(re )o
s(+*i) Le))er o# 3!)e!) a! .i!era$ /ro(c)io!-Shari!g Agree*e!) %i)hi! 2 ,ears #ro* )he e##ec)i&i), o#
)he De"ar)*e!) A*i!is)ra)i&e 6rer No. =7 sha$$ ca(se )he a+a!o!*e!) o# )he *i!i!g, '(arr,, a!
sa! a! gra&e$ c$ai*s, a#)er )heir res"ec)i&e e##ec)i&i), a)es co*"e$$e )he .i!ers Associa)io! o# )he
/hi$i""i!es, 3!c., a! orga!iGa)io! co*"ose o# *i!i!g "ros"ec)ors a! c$ai* o%!ers a! c$ai*
ho$ers, )o #i$e )he i!s)a!) "e)i)io! assai$i!g )heir &a$ii), a! co!s)i)()io!a$i), +e#ore )his Co(r).
3ss(e :
Are )he )%o De"ar)*e!) A*i!is)ra)i&e 6rers &a$iR
R($i!g :
Bes. /e)i)io!erKs i!sis)e!ce o! )he a""$ica)io! o# /resie!)ia$ Decree No. 983, as a*e!e, as )he
go&er!i!g $a% o! )he acce")a!ce a! a""ro&a$ o# ec$ara)io!s o# $oca)io! a! a$$ o)her 2i!s o#
a""$ica)io!s #or )he eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o# *i!era$ reso(rces "(rs(a!) )o
4Dec()i&e 6rer No. 211, is erro!eo(s. /resie!)ia$ Decree No. 983, as a*e!e, "er)ai!s )o )he o$
s,s)e* o# eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! o# !a)(ra$ reso(rces )hro(gh L$ice!se, co!cessio!
or $easeL %hich, ho%e&er, has +ee! isa$$o%e +, Ar)ic$e I33, Sec)io! 2 o# )he 1987 Co!s)i)()io!. ?,
&ir)(e o# )he sai co!s)i)()io!a$ *a!a)e a! i)s i*"$e*e!)i!g $a%, 4Dec()i&e 6rer No. 279 %hich
s("ersee 4Dec()i&e 6rer No. 211, )he "ro&isio!s ea$i!g o! L$ice!se, co!cessio! or $easeL o#
*i!era$ reso(rces (!er /resie!)ia$ Decree No. 983, as a*e!e, a! o)her eDis)i!g *i!i!g $a%s
are ee*e re"ea$e a!, )here#ore, cease )o o"era)e as )he go&er!i!g $a%. 3! o)her %ors, i! a$$
o)her areas o# a*i!is)ra)io! a! *a!age*e!) o# *i!era$ $a!s, )he "ro&isio!s o# /resie!)ia$ Decree
No. 983, as a*e!e, a! o)her eDis)i!g *i!i!g $a%s, s)i$$ go&er!. Sec)io! 7 o# 4Dec()i&e 6rer No.
279 "ro&ies, )h(s:
Sec. 7. A$$ "ro&isio!s o# /resie!)ia$ Decree No. 983, as a*e!e, o)her eDis)i!g *i!i!g $a%s, a!
)heir i*"$e*e!)i!g r($es a! reg($a)io!s, or "ar)s )hereo#, %hich are !o) i!co!sis)e!) %i)h )he
"ro&isio!s o# )his 4Dec()i&e 6rer, sha$$ co!)i!(e i! #orce a! e##ec).
5e$$ -se))$e is )he r($e, ho%e&er, )ha) regar$ess o# )he reser&a)io! c$a(se, *i!i!g $eases or
agree*e!)s gra!)e +, )he S)a)e, s(ch as )hose gra!)e "(rs(a!) )o 4Dec()i&e 6rer No. 211
re#erre )o )his "e)i)io!, are s(+Cec) )o a$)era)io!s )hro(gh a reaso!a+$e eDercise o# )he "o$ice "o%er o#
)he S)a)e.
Accori!g$,, )he S)a)e, i! )he eDercise o# i)s "o$ice "o%er i! )his regar, *a, !o) +e "rec$(e +, )he
co!s)i)()io!a$ res)ric)io! o! !o!-i*"air*e!) o# co!)rac) #ro* a$)eri!g, *oi#,i!g a! a*e!i!g )he
*i!i!g $eases or agree*e!)s gra!)e (!er /resie!)ia$ Decree No. 983, as a*e!e, "(rs(a!) )o
4Dec()i&e 6rer No. 211. /o$ice /o%er, +ei!g co-eD)e!si&e %i)h )he !ecessi)ies o# )he case a! )he
e*a!s o# "(+$ic i!)eres)P eD)e!s )o a$$ )he &i)a$ "(+$ic !ees. The "assage o# 4Dec()i&e 6rer No.
279 %hich s("ersee 4Dec()i&e 6rer No. 211 "ro&ie $ega$ +asis #or )he D4NR Secre)ar, )o carr,
i!)o e##ec) )he *a!a)e o# Ar)ic$e I33, Sec)io! 2 o# )he 1987 Co!s)i)()io!.
504R4F6R4, )he "e)i)io! is D3S.3SS4D #or $ac2 o# *eri).
11! GR! No! '&$$+
Mine*s Association o: t;e 4;i1i88ines vs! Facto*an
5an0a*> 1<- 1''7
0acts
For*er /resie!) CoraGo! A'(i!o iss(e 4Dec()i&e 6rer Nos. 211 a! 279 as "ar )o her
i!)eri* $egis$a)i&e "o%ers. 4Dec()i&e 6rer No. 211 "rescri+es )he i!)eri* "roce(res i! )he
"rocessi!g a! a""ro&a$ o# a""$ica)io!s #or )he eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! o#
*i!era$s "(rs(a!) )o Sec)io! 2, Ar)ic$e I33 o# )he 1987 Co!s)i)()io!. 4Dec()i&e 6rer No. 279
a()horiGes )he De"ar)*e!) o# Na)(ra$ Reso(rces :D4NR< Secre)ar, )o !ego)ia)e a!
co!c$(e Coi!) &e!)(re, co-"ro(c)io! or "ro(c)io!-shari!g agree*e!)s #or )he eD"$ora)io!,
e&e$o"*e!), a! ()i$iGa)io! o# *i!era$ reso(rces.
/e)i)io!er is a! orga!iGa)io! co*"ose o# *i!i!g "ros"ec)ors a! c$ai*o%!ers or
c$ai*ho$ers '(es)io!s )he co!s)i)()io!a$i), o# )he )%o a*i!is)ra)i&e orers :DA6< iss(e +,
)he! Secre)ar, o# D4NR F($ge!cio Fac)ora! 7r. "(rs(a!) )o )he a+o&e*e!)io!e eDec()i&e
iss(a!ces. De"ar)*e!) A*i!is)ra)i&e 6rer No. =7 ec$ares Ma$$ eDis)i!g *i!i!g $ease or
agree*e!)s %hich are gra!)e a#)er )he e##ec)i&i), o# )he 1987 Co!s)i)()io!Wsha$$ +e
co!&er)e i!)o "ro(c)io!-shari!g agree*e!)s %i)hi! o!e :1< ,ear #ro* )he e##ec)i&i), o# )hese
g(ie$i!es.N 3! re$a)io! )o )his, DA6 No. 82 "ro&ies )ha) a #ai$(re )o s(+*i) Le))er o# 3!)e!)
:L63< a! .i!era$ /ro(c)io!-Shari!g Agree*e!) :./SA< %i)hi! #ro* )he e##ec)i&i), o#
De"ar)*e!) A*i!is)ra)i&e 6rer No. =7 sha$$ ca(se )he a+a!o!*e!) o# *i!i!g, '(arr,, a!
sa! a! gra&e$ c$ai*s.
F(r)her*ore, i) c$ai*s )ha) )he DA6s are iss(e i! eDcess o# C(risic)io! a! are i!co!sis)e!)
%i)h )he eDec()i&e orers. A$so, DA6 No. =7 &io$a)es )he !o!-i*"air*e!) c$a(se o# )he 1987
Co!s)i)()io! #or )he (!($, "re-)er*i!a)io! o# )he eDis)i!g *i!i!g $eases a! o)her *i!i!g
agree*e!)s a! a()o*a)ic co!&ersio! o# sai agree*e!)s i!)o "ro(c)io!-shari!g
agree*e!)s %i)hi! o!e :1< ,ear #ro* i)s e##ec)i&i),.
The Co(r), ac)i!g o! "e)i)io!erKs (rge!) eD-"ar)e "e)i)io! #or iss(a!ce o# a res)rai!i!g
orer@"re$i*i!ar, i!C(!c)io!, iss(e a Te*"orar, Res)rai!i!g 6rer, ("o! "os)i!g o# a /=00,
000.00 +o!, e!Coi!i!g )he e!#orce*e!) a! i*"$e*e!)a)io! o# D4NR A*i!is)ra)i&e 6rer
Nos. =7 a! 82, as a*e!e, Series o# 1989 a! 1990, res"ec)i&e$,.
!ssues
Di )he D4NR Secre)ar, ac) %i)h gra&e a+(se o# iscre)io! i! )he iss(a!ce o# )he )%o DA6sR
Are )he )%o DA6s &a$iR
Ruling
3) ca!!o) +e es)a+$ishe )ha) )he Secre)ar, %e!) +e,o! %ha) is "rescri+e +, )he 46 279. Sec)io! 8
o# )he sai iss(a!ce s"eci#ica$$, a()horiGes hi* )o "ro*($ga)e s(ch s(""$e*e!)ar, r($es a!
reg($a)io!s as *a, +e !ecessar, )o e##ec)i&e$, i*"$e*e!) )he "ro&isio!s )hereo#. A$so, )he DA6s a!
)he 46s are re$a)e i! orer )o carr, o() )he *a!a)e o# Ar)ic$e I33, Sec)io! 2 o# )he 1987 Co!s)i)()io!.
The )%o are reaso!a+$, irec)e )o )he acco*"$ish*e!) o# )he "(r"oses o# )he $a% (!er %hich )he,
%ere iss(e a! %ere i!)e!e )o sec(re )he "ara*o(!) i!)eres) o# )he "(+$ic, )heir eco!o*ic gro%)h
a! %e$#are. Their co!s)i)()io!a$i), *(s) +e s(s)ai!e a! )heir #orce a! e##ec) ("he$ #or )he, %ere
"ar) o# )he $egi)i*a)e eDercise o# )he "o$ice "o%er o# )he S)a)e. The !o!-i*"air*e!) c$a(se
g(ara!)ee +, )he 1987 Co!s)i)()io! sho($ !o) "re&ai$ o&er )he $egi)i*a)e eDercise o# "o$ice "o%er
si!ce i) has +ee! r($e +, )he Co(r) )ha) s(ch "o%er is !o) a+so$()e. Th(s, i) is a &a$i eDercise.
Disposition
504R4F6R4, )he "e)i)io! is D3S.3SS4D #or $ac2 o# *eri). The Te*"orar, Res)rai!i!g 6rer
iss(e o! 7($, 2, 1991 is here+, L3FT4D.
1+! Re80)1ic vs! Rose(oo*
Re80)1ic o: t;e 4;i1i88ines vs! Rose(oo* Mining and Deve1o8(ent Co*8o*ation- et a1!
G!R! No! 1=''+, Ma*c; $%- +%%=
1angani"an, &(2
Facts: /e)i)io!er Rose*oor .i!i!g a! De&e$o"*e!) Cor"ora)io! a#)er ha&i!g +ee! gra!)e
"er*issio! )o "ros"ec) #or *ar+$e e"osi)s i! )he *o(!)ai!s o# ?ia2-!a-?a)o, Sa! .ig(e$, ?($aca!,
s(cceee i! isco&eri!g *ar+$e e"osi)s o# high '(a$i), a! i! co**ercia$ '(a!)i)ies i! .o(!)
.a+io %hich #or*s "ar) o# )he ?ia2-!a-?a)o *o(!)ai! ra!ge.
The "e)i)io!er )he! a""$ie %i)h )he ?(rea( o# .i!es, !o% .i!es a! Geoscie!ces ?(rea(, #or )he
iss(a!ce o# )he corres"o!i!g $ice!se )o eD"$oi) sai *ar+$e e"osi)s.
Lice!se No. 33 %as iss(e +, )he ?(rea( o# .i!es i! #a&or o# )he herei! "e)i)io!ers. Shor)$,
)herea#)er, Res"o!e!) 4r!es)o .acea ca!ce$$e )he "e)i)io!erFs $ice!se s)a)i!g )ha) )heir $ice!se
ha i$$ega$$, +ee! iss(e, +eca(se i) &io$a)e Sec)io! 89 o# /D 983P a! )ha) )here %as !o *ore
"(+$ic i!)eres) ser&e +, )he co!)i!(e eDis)e!ce or re!e%a$ o# )he $ice!se. The $a))er reaso! %as
co!#ir*e +, )he $a!g(age o# /roc$a*a)io! No. 89. Accori!g )o )his $a%, "(+$ic i!)eres) %o($ +e
ser&e +, re&er)i!g )he "arce$ o# $a! )ha) %as eDc$(e +, /roc$a*a)io! No. 2209 )o )he #or*er
s)a)(s o# )ha) $a! as "ar) o# )he ?ia2-!a-?a)o !a)io!a$ "ar2.
/ss0e: 5he)her or !o) /resie!)ia$ /roc$a*a)io! No. 89 is &a$i.
He1d: Bes. 5e ca!!o) s(s)ai! )he arg(*e!) )ha) /roc$a*a)io! No. 89 is a +i$$ o# a))ai!erP )ha) is, a
$egis$a)i&e ac) %hich i!#$ic)s "(!ish*e!) %i)ho() C(icia$ )ria$.N 3)s ec$ara)io! )ha) XL/ No. 33 is a
"a)e!) !($$i), is cer)ai!$, !o) a ec$ara)io! o# g(i$). Nei)her is )he ca!ce$$a)io! o# )he $ice!se a
"(!ish*e!) %i)hi! )he "(r&ie% o# )he co!s)i)()io!a$ "roscri")io! agai!s) +i$$s o# a))ai!er.
Too, )here is !o *eri) i! )he arg(*e!) )ha) )he "roc$a*a)io! is a! eD "os) #ac)o $a%. 3) is se))$e )ha) a!
eD "os) #ac)o $a% is $i*i)e i! i)s sco"e o!$, )o *a))ers cri*i!a$ i! !a)(re. /roc$a*a)io! 89, %hich
*ere$, res)ore )he area eDc$(e #ro* )he ?ia2-!a-?a)o !a)io!a$ "ar2 +, ca!ce$i!g res"o!e!)sF
$ice!se, is c$ear$, !o) "e!a$ i! charac)er.
A$so a) )he )i*e /resie!) A'(i!o iss(e /roc$a*a)io! No. 89 o! .arch 9, 1987, she %as s)i$$ &a$i$,
eDercisi!g $egis$a)i&e "o%ers (!er )he /ro&isio!a$ Co!s)i)()io! o# 1988. Sec)io! 1 o# Ar)ic$e 33 o#
/roc$a*a)io! No. 3, %hich "ro*($ga)e )he /ro&isio!a$ Co!s)i)()io!, gra!)e her $egis$a)i&e "o%er
(!)i$ a $egis$a)(re is e$ec)e a! co!&e!e (!er a !e% Co!s)i)()io!. The gra!) o# s(ch "o%er is a$so
eD"$ici)$, recog!iGe a! "ro&ie #or i! Sec)io! 8 o# Ar)ic$e I>33 o# )he 1987 Co!s)i)()io!.
13. La ?(ga$-?K$aa! Tri+a$ Associa)io!, 3!c. & D4NR :Na)(ra$ Reso(rces<
LA ?-GAL-?KLAAN TR3?AL ASS6C3AT36N, 3NC. & D4NR
G.R. No. 127882 7a!(ar, 27, 2009
FACTS: The "rese!) "e)i)io! #or *a!a*(s a! "rohi+i)io! assai$s )he co!s)i)()io!a$i), o# Re"(+$ic
Ac) No. 7992, o)her%ise 2!o%! as )he /03L3//3N4 .3N3NG ACT 6F 199=, a$o!g %i)h )he
3*"$e*e!)i!g R($es a! Reg($a)io!s iss(e "(rs(a!) )here)o, De"ar)*e!) o# 4!&iro!*e!) a!
Na)(ra$ Reso(rces :D4NR< A*i!is)ra)i&e 6rer 98-90, a! o# )he Fi!a!cia$ a! Tech!ica$ Assis)a!ce
Agree*e!) :FTAA< e!)ere i!)o o! .arch 30, 199= +, )he Re"(+$ic o# )he /hi$i""i!es a! 5.C
:/hi$i""i!es<, 3!c. :5.C/<, a cor"ora)io! orga!iGe (!er /hi$i""i!e $a%s.
3SS-4S: Di )he D4NR Secre)ar, ac)e %i)ho() or i! eDcess o# C(risic)io!: :1< D D D i! sig!i!g a!
"ro*($ga)i!g D4NR A*i!is)ra)i&e 6rer No. 98-90 i*"$e*e!)i!g Re"(+$ic Ac) No. 7992, )he $a))er
+ei!g (!co!s)i)()io!a$ i! )ha) i) a$$o%s #($$, #oreig! o%!e cor"ora)io!s )o eD"$ore, e&e$o", ()i$iGe a!
eD"$oi) *i!era$ reso(rces i! a *a!!er co!)rar, )o Sec)io! 2, "aragra"h 9, Ar)ic$e I33 o# )he
Co!s)i)()io!P :2< D D D i! reco**e!i!g a""ro&a$ o# a! i*"$e*e!)i!g )he Fi!a!cia$ a! Tech!ica$
Assis)a!ce Agree*e!) +e)%ee! )he /resie!) o# )he Re"(+$ic o# )he /hi$i""i!es a! 5es)er! .i!i!g
Cor"ora)io! /hi$i""i!es 3!c. +eca(se )he sa*e is i$$ega$ a! (!co!s)i)()io!a$.
TR($i!gs #or )he s(+s)a!)i&e iss(es are !o) i!c$(e i! )his iges) si!ce a$rea, re&erse +, a!o)her
caseU
04LD: As )o "roce(ra$ iss(es: ; Re'(isi)es o# C(icia$ re&ie% - B4S, 61AB.
5he! a! iss(e o# co!s)i)()io!a$i), is raise, )his Co(r) ca! eDercise i)s "o%er o# C(icia$ re&ie% o!$, i#
)he #o$$o%i!g re'(isi)es are "rese!):
The eDis)e!ce o# a! ac)(a$ a! a""ro"ria)e caseP - The cha$$e!ge agai!s) )he co!s)i)()io!a$i), o# R.A.
No. 7992 a! DA6 No. 98-90 $i2e%ise #($#i$$s )he re'(isi)es o# C(s)icia+i$i),. A$)ho(gh )hese $a%s %ere
!o) i! #orce %he! )he s(+Cec) FTAA %as e!)ere i!)o, )he '(es)io! as )o )heir &a$ii), is ri"e #or
aC(ica)io!.
A "erso!a$ a! s(+s)a!)ia$ i!)eres) o# )he "ar), raisi!g )he co!s)i)()io!a$ '(es)io!P - "e)i)io!ers ha&e
s)a!i!g )o raise )he co!s)i)()io!a$i), o# )he '(es)io!e FTAA as )he, a$$ege a "erso!a$ a!
s(+s)a!)ia$ i!C(r,
The eDercise o# C(icia$ re&ie% is "$eae a) )he ear$ies) o""or)(!i),P a! - 5.C/ "oi!)s o() )ha) )he
"e)i)io! %as #i$e o!$, a$*os) )%o ,ears a#)er )he eDec()io! o# )he FTAA, he!ce, !o) raise a) )he
ear$ies) o""or)(!i),.*The )hir re'(isi)e sho($ !o) +e )a2e! )o *ea! )ha) )he '(es)io! o#
co!s)i)()io!a$i), *(s) +e raise i**eia)e$, a#)er )he eDec()io! o# )he s)a)e ac)io! co*"$ai!e o#. Tha)
)he '(es)io! o# co!s)i)()io!a$i), has !o) +ee! raise +e#ore is !o) a &a$i reaso! #or re#(si!g )o a$$o% i)
)o +e raise $a)er. A co!)rar, r($e %o($ *ea! )ha) a $a%, o)her%ise (!co!s)i)()io!a$, %o($ $a"se i!)o
co!s)i)()io!a$i), +, )he *ere #ai$(re o# )he "ro"er "ar), )o "ro*")$, #i$e a case )o cha$$e!ge )he sa*e.
The co!s)i)()io!a$ '(es)io! is )he $is *o)a o# )he case
;/ro"rie), o# "rohi+i)io! a! *a!a*(s - B4S, 61AB.
The "e)i)io! #or "rohi+i)io! a) +ar is )h(s a! a""ro"ria)e re*e,. 5hi$e )he eDec()io! o# )he co!)rac)
i)se$# *a, +e #ai) acco*"$i, i)s i*"$e*e!)a)io! is !o). /(+$ic res"o!e!)s, i! +eha$# o# )he Go&er!*e!),
ha&e o+$iga)io!s )o #($#i$$ (!er sai co!)rac). /e)i)io!ers see2 )o "re&e!) )he* #ro* #($#i$$i!g s(ch
o+$iga)io!s o! )he )heor, )ha) )he co!)rac) is (!co!s)i)()io!a$ a!, )here#ore, &oi.
;0ierarch, o# co(r)s - B4S, 61AB.
The re"erc(ssio!s o# )he iss(es i! )his case o! )he /hi$i""i!e *i!i!g i!(s)r,, i# !o) )he !a)io!a$
eco!o*,, as %e$$ as )he !o&e$), )hereo#, co!s)i)()e eDce")io!a$ a! co*"e$$i!g circ(*s)a!ces )o
C(s)i#, resor) )o )his Co(r) i! )he #irs) i!s)a!ce.
3! a$$ e&e!)s, )his Co(r) has )he iscre)io! )o )a2e cog!iGa!ce o# a s(i) %hich oes !o) sa)is#, )he
re'(ire*e!)s o# a! ac)(a$ case or $ega$ s)a!i!g %he! "ara*o(!) "(+$ic i!)eres) is i!&o$&e. 5he!
)he iss(es raise are o# "ara*o(!) i*"or)a!ce )o )he "(+$ic, )his Co(r) *a, +r(sh asie )ech!ica$i)ies
o# "roce(re.
RAT36: :1< The S)a)e *a, irec)$, (!er)a2e s(ch ac)i&i)ies or i) *a, e!)er i!)o co-"ro(c)io!, Coi!)
&e!)(re, or "ro(c)io!-shari!g agree*e!)s %i)h Fi$i"i!o ci)iGe!s, or cor"ora)io!s or associa)io!s a)
$eas) siD), "er ce!)(* o# %hose ca"i)a$ is o%!e +, s(ch ci)iGe!s.
Co!so!a!) %i)h )he S)a)eKs L#($$ s("er&isio! a! co!)ro$L o&er !a)(ra$ reso(rces, Sec)io! 2 o##ers )he
S)a)e )%o Lo")io!s.L182 6!e, )he S)a)e *a, irec)$, (!er)a2e )hese ac)i&i)ies i)se$#P or )%o, i) *a,
e!)er i!)o co-"ro(c)io!, Coi!) &e!)(re, or "ro(c)io!-shari!g agree*e!)s %i)h Fi$i"i!o ci)iGe!s, or
e!)i)ies a) $eas) 80Z o# %hose ca"i)a$ is o%!e +, s(ch ci)iGe!s.
A )hir o")io! is #o(! i! )he )hir "aragra"h o# )he sa*e sec)io!:
The Co!gress *a,, +, $a%, a$$o% s*a$$-sca$e ()i$iGa)io! o# !a)(ra$ reso(rces +, Fi$i"i!o ci)iGe!s, as
%e$$ as coo"era)i&e #ish #ar*i!g, %i)h "riori), )o s(+sis)e!ce #isher*e! a! #ish-%or2ers i! ri&ers,
$a2es, +a,s, a! $agoo!s.
5hi$e )he seco! a! )hir o")io!s are $i*i)e o!$, )o Fi$i"i!o ci)iGe!s or, i! )he case o# )he #or*er, )o
cor"ora)io!s or associa)io!s a) $eas) 80Z o# )he ca"i)a$ o# %hich is o%!e +, Fi$i"i!os, a #o(r)h a$$o%s
)he "ar)ici"a)io! o# #oreig!-o%!e cor"ora)io!s. The #o(r)h a! #i#)h "aragra"hs o# Sec)io! 2 "ro&ie:
The /resie!) *a, e!)er i!)o agree*e!)s %i)h #oreig!-o%!e cor"ora)io!s i!&o$&i!g ei)her )ech!ica$
or #i!a!cia$ assis)a!ce #or $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o# *i!era$s,
"e)ro$e(*, a! o)her *i!era$ oi$s accori!g )o )he ge!era$ )er*s a! co!i)io!s "ro&ie +, $a%,
+ase o! rea$ co!)ri+()io!s )o )he eco!o*ic gro%)h a! ge!era$ %e$#are o# )he co(!)r,. 3! s(ch
agree*e!)s, )he S)a)e sha$$ "ro*o)e )he e&e$o"*e!) a! (se o# $oca$ scie!)i#ic a! )ech!ica$
reso(rces.
The /resie!) sha$$ !o)i#, )he Co!gress o# e&er, co!)rac) e!)ere i!)o i! accora!ce %i)h )his
"ro&isio!, %i)hi! )hir), a,s #ro* i)s eDec()io!.
A$)ho(gh Sec)io! 2 sa!c)io!s )he "ar)ici"a)io! o# #oreig!-o%!e cor"ora)io!s i! )he eD"$ora)io!,
e&e$o"*e!), a! ()i$iGa)io! o# !a)(ra$ reso(rces, i) i*"oses cer)ai! $i*i)a)io!s or co!i)io!s )o
agree*e!)s %i)h s(ch cor"ora)io!s.
Firs), )he "ar)ies )o FTAAs. 6!$, )he /resie!), i! +eha$# o# )he S)a)e, *a, e!)er i!)o )hese
agree*e!)s, a! o!$, %i)h cor"ora)io!s. ?, co!)ras), (!er )he 1973 Co!s)i)()io!, a Fi$i"i!o ci)iGe!,
cor"ora)io! or associa)io! *a, e!)er i!)o a ser&ice co!)rac) %i)h a L#oreig! "erso! or e!)i),.L
Seco!, )he siGe o# )he ac)i&i)ies: o!$, $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! is a$$o%e.
The )er* L$arge-sca$e (s(a$$, re#ers )o &er, ca"i)a$-i!)e!si&e ac)i&i)ies.L183
Thir, )he !a)(ra$ reso(rces s(+Cec) o# )he ac)i&i)ies is res)ric)e )o *i!era$s, "e)ro$e(* a! o)her
*i!era$ oi$s, )he i!)e!) +ei!g )o $i*i) ser&ice co!)rac)s )o )hose areas %here Fi$i"i!o ca"i)a$ *a, !o) +e
s(##icie!).189
Fo(r)h, co!sis)e!c, %i)h )he "ro&isio!s o# s)a)()e. The agree*e!)s *(s) +e i! accora!ce %i)h )he
)er*s a! co!i)io!s "ro&ie +, $a%.
Fi#)h, Sec)io! 2 "rescri+es cer)ai! s)a!ars #or e!)eri!g i!)o s(ch agree*e!)s. The agree*e!)s *(s)
+e +ase o! rea$ co!)ri+()io!s )o eco!o*ic gro%)h a! ge!era$ %e$#are o# )he co(!)r,.
SiD)h, )he agree*e!)s *(s) co!)ai! r(i*e!)ar, s)i"($a)io!s #or )he "ro*o)io! o# )he e&e$o"*e!)
a! (se o# $oca$ scie!)i#ic a! )ech!ica$ reso(rces.
Se&e!)h, )he !o)i#ica)io! re'(ire*e!). The /resie!) sha$$ !o)i#, Co!gress o# e&er, #i!a!cia$ or
)ech!ica$ assis)a!ce agree*e!) e!)ere i!)o %i)hi! )hir), a,s #ro* i)s eDec()io!.
Fi!a$$,, )he sco"e o# )he agree*e!)s. 5hi$e )he 1973 Co!s)i)()io! re#erre )o Lser&ice co!)rac)s #or
#i!a!cia$, )ech!ica$, *a!age*e!), or o)her #or*s o# assis)a!ceL )he 1987 Co!s)i)()io! "ro&ies #or
Lagree*e!)s. . . i!&o$&i!g ei)her #i!a!cia$ or )ech!ica$ assis)a!ce.L 3) +ears !o)i!g )ha) )he "hrases
Lser&ice co!)rac)sL a! L*a!age*e!) or o)her #or*s o# assis)a!ceL i! )he ear$ier co!s)i)()io! ha&e
+ee! o*i))e.
13NDS 6F .3N4RAL AGR44.4NTS :i*"or)a!)<
The S)a)e, +ei!g )he o%!er o# )he !a)(ra$ reso(rces, is accore )he "ri*ar, "o%er a! res"o!si+i$i),
i! )he eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! )hereo#. As s(ch, i) *a, (!er)a2e )hese ac)i&i)ies
)hro(gh #o(r *oes:
The S)a)e *a, irec)$, (!er)a2e s(ch ac)i&i)ies.
The S)a)e *a, e!)er i!)o co-"ro(c)io!, Coi!) &e!)(re or "ro(c)io!-shari!g agree*e!)s %i)h
Fi$i"i!o ci)iGe!s or '(a$i#ie cor"ora)io!s.
Co!gress *a,, +, $a%, a$$o% s*a$$-sca$e ()i$iGa)io! o# !a)(ra$ reso(rces +, Fi$i"i!o ci)iGe!s.
For )he $arge-sca$e eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! o# *i!era$s, "e)ro$e(* a! o)her
*i!era$ oi$s, )he /resie!) *a, e!)er i!)o agree*e!)s %i)h #oreig!-o%!e cor"ora)io!s
i!&o$&i!g )ech!ica$ or #i!a!cia$ assis)a!ce.
4Dce") )o charge )he .i!es a! Geoscie!ces ?(rea( o# )he D4NR %i)h "er#or*i!g researches a!
s(r&e,s, a! a "assi!g *e!)io! o# go&er!*e!)-o%!e or co!)ro$$e cor"ora)io!s,188 R.A. No. 7992
oes !o) s"eci#, ho% )he S)a)e sho($ go a+o() )he #irs) *oe. The )hir *oe, o! )he o)her ha!, is
go&er!e +, Re"(+$ic Ac) No. 7078 :)he /eo"$eKs S*a$$-Sca$e .i!i!g Ac) o# 1991< a! o)her "er)i!e!)
$a%s. R.A. No. 7992 "ri*ari$, co!cer!s i)se$# %i)h )he seco! a! #o(r)h *oes.
.i!era$ "ro(c)io! shari!g, co-"ro(c)io! a! Coi!) &e!)(re agree*e!)s are co$$ec)i&e$, c$assi#ie +,
R.A. No. 7992 as L*i!era$ agree*e!)s.L
.3N4RAL /R6D-CT36N S0AR3NG AGR44.4NTS :./SA<
The Go&er!*e!) "ar)ici"a)es )he $eas) i! a *i!era$ "ro(c)io! shari!g agree*e!) :./SA<. 3! a!
./SA, )he Go&er!*e!) gra!)s )he co!)rac)or )he eDc$(si&e righ) )o co!(c) *i!i!g o"era)io!s %i)hi!
a co!)rac) area a! shares i! )he gross o()"(). The ./SA co!)rac)or "ro&ies )he #i!a!ci!g,
)ech!o$og,, *a!age*e!) a! "erso!!e$ !ecessar, #or )he agree*e!)Ks i*"$e*e!)a)io!. The )o)a$
go&er!*e!) share i! a! ./SA is )he eDcise )aD o! *i!era$ "ro(c)s (!er Re"(+$ic Ac) No. 7729,
a*e!i!g Sec)io! 1=1:a< o# )he Na)io!a$ 3!)er!a$ Re&e!(e Coe, as a*e!e.
C6-/R6D-CT36N AGR44.4NT :CA<
763NT >4NT-R4 AGR44.4NT :7>A<
3! a co-"ro(c)io! agree*e!) :CA<, )he Go&er!*e!) "ro&ies i!"()s )o )he *i!i!g o"era)io!s o)her
)ha! )he *i!era$ reso(rce, %hi$e i! a Coi!) &e!)(re agree*e!) :7>A<, %here )he Go&er!*e!) e!Co,s
)he grea)es) "ar)ici"a)io!, )he Go&er!*e!) a! )he 7>A co!)rac)or orga!iGe a co*"a!, %i)h +o)h
"ar)ies ha&i!g e'(i), shares. Asie #ro* ear!i!gs i! e'(i),, )he Go&er!*e!) i! a 7>A is a$so e!)i)$e
)o a share i! )he gross o()"().
The Go&er!*e!) *a, e!)er i!)o a CA or 7>A %i)h o!e or *ore co!)rac)ors. The Go&er!*e!)Ks share
i! a CA or 7>A is se) o() i! Sec)io! 81 o# )he $a%:
The share o# )he Go&er!*e!) i! co-"ro(c)io! a! Coi!) &e!)(re agree*e!)s sha$$ +e !ego)ia)e +,
)he Go&er!*e!) a! )he co!)rac)or )a2i!g i!)o co!siera)io! )he: :a< ca"i)a$ i!&es)*e!) o# )he "roCec),
:+< )he ris2s i!&o$&e, :c< co!)ri+()io! o# )he "roCec) )o )he eco!o*,, a! :< o)her #ac)ors )ha) %i$$
"ro&ie #or a #air a! e'(i)a+$e shari!g +e)%ee! )he Go&er!*e!) a! )he co!)rac)or. The Go&er!*e!)
sha$$ a$so +e e!)i)$e )o co*"e!sa)io!s #or i)s o)her co!)ri+()io!s.
%hich sha$$ +e agree ("o! +, )he "ar)ies, a! sha$$ co!sis), a*o!g o)her )hi!gs, )he co!)rac)orKs
i!co*e )aD, eDcise )aD, s"ecia$ a$$o%a!ce, %i)hho$i!g )aD (e #ro* )he co!)rac)orKs #oreig!
s)oc2ho$ers arisi!g #ro* i&ie! or i!)eres) "a,*e!)s )o )he sai #oreig! s)oc2ho$ers, i! case o# a
#oreig! !a)io!a$ a! a$$ s(ch o)her )aDes, ()ies a! #ees as "ro&ie #or (!er eDis)i!g $a%s.
A$$ *i!era$ agree*e!)s gra!) )he res"ec)i&e co!)rac)ors )he eDc$(si&e righ) )o co!(c) *i!i!g
o"era)io!s a! )o eD)rac) a$$ *i!era$ reso(rces #o(! i! )he co!)rac) area. A L'(a$i#ie "erso!L *a,
e!)er i!)o a!, o# )he *i!era$ agree*e!)s %i)h )he Go&er!*e!). A L'(a$i#ie "erso!L is a!, ci)iGe! o#
)he /hi$i""i!es %i)h ca"aci), )o co!)rac), or a cor"ora)io!, "ar)!ershi", associa)io!, or coo"era)i&e
orga!iGe or a()horiGe #or )he "(r"ose o# e!gagi!g i! *i!i!g, %i)h )ech!ica$ a! #i!a!cia$ ca"a+i$i),
)o (!er)a2e *i!era$ reso(rces e&e$o"*e!) a! ($, regis)ere i! accora!ce %i)h $a% a) $eas) siD),
"er ce!)(* :80Z< o# )he ca"i)a$ o# %hich is o%!e +, ci)iGe!s o# )he /hi$i""i!es D D D.
F3NANC3AL 6R T4C0N3CAL ASS3STANC4 AGR44.4NTS
The #o(r)h *oe i!&o$&es L#i!a!cia$ or )ech!ica$ assis)a!ce agree*e!)s.L A! FTAA is e#i!e as La
co!)rac) i!&o$&i!g #i!a!cia$ or )ech!ica$ assis)a!ce #or $arge-sca$e eD"$ora)io!, e&e$o"*e!), a!
()i$iGa)io! o# !a)(ra$ reso(rces.L
A!, '(a$i#ie "erso! %i)h )ech!ica$ a! #i!a!cia$ ca"a+i$i), )o (!er)a2e $arge-sca$e eD"$ora)io!,
e&e$o"*e!), a! ()i$iGa)io! o# !a)(ra$ reso(rces i! )he /hi$i""i!es *a, e!)er i!)o s(ch agree*e!)
irec)$, %i)h )he Go&er!*e!) )hro(gh )he D4NR. For )he "(r"ose o# gra!)i!g a! FTAA, a $ega$$,
orga!iGe #oreig!-o%!e cor"ora)io! :a!, cor"ora)io!, "ar)!ershi", associa)io!, or coo"era)i&e ($,
regis)ere i! accora!ce %i)h $a% i! %hich $ess )ha! =0Z o# )he ca"i)a$ is o%!e +, Fi$i"i!o ci)iGe!s<
is ee*e a L'(a$i#ie "erso!.L
6)her )ha! )he i##ere!ce i! co!)rac)orsK '(a$i#ica)io!s, )he "ri!ci"a$ is)i!c)io! +e)%ee! *i!era$
agree*e!)s a! FTAAs is )he *aDi*(* co!)rac) area )o %hich a '(a$i#ie "erso! *a, ho$ or +e
gra!)e. LLarge-sca$eL (!er R.A. No. 7992 is e)er*i!e +, )he siGe o# )he co!)rac) area, as
o""ose )o )he a*o(!) i!&es)e :-S Y=0,000,000.00<, %hich %as )he s)a!ar (!er 4.6. 279.
Li2e a CA or a 7>A, a! FTAA is s(+Cec) )o !ego)ia)io!. The Go&er!*e!)Ks co!)ri+()io!s, i! )he #or* o#
)aDes, i! a! FTAA is ie!)ica$ )o i)s co!)ri+()io!s i! )he )%o *i!era$ agree*e!)s, sa&e )ha) i! a! FTAA:
The co$$ec)io! o# Go&er!*e!) share i! #i!a!cia$ or )ech!ica$ assis)a!ce agree*e!) sha$$ co**e!ce
a#)er )he #i!a!cia$ or )ech!ica$ assis)a!ce agree*e!) co!)rac)or has #($$, reco&ere i)s "re-o"era)i!g
eD"e!ses, eD"$ora)io!, a! e&e$o"*e!) eD"e!i)(res, i!c$(si&e.
6?3T4R D3CTA:
The Rega$ia! oc)ri!e a! )he A*erica! s,s)e*, )here#ore, i##er i! o!e esse!)ia$ res"ec). -!er )he
Rega$ia! )heor,, *i!era$ righ)s are !o) i!c$(e i! a gra!) o# $a! +, )he s)a)eP (!er )he A*erica!
oc)ri!e, *i!era$ righ)s are i!c$(e i! a gra!) o# $a! +, )he go&er!*e!).
1$! LA 96GAL#9@LAAN vs DENR 5an! +1- +%%=
Fac)s: R.A. No. 7992 e#i!es )he *oes o# *i!era$ agree*e!)s #or *i!i!g o"era)io!s, o()$i!es )he
"roce(re #or )heir #i$i!g a! a""ro&a$, assig!*e!)@)ra!s#er a! %i)hra%a$, a! #iDes )heir )er*s.
Si*i$ar "ro&isio!s go&er! #i!a!cia$ or )ech!ica$ assis)a!ce agree*e!)s.
/e)i)io!ers #i$e )he "rese!) "e)i)io! #or "rohi+i)io! a! *a!a*(s, %i)h a "ra,er #or a )e*"orar,
res)rai!i!g orer a$$egi!g )ha) a) )he )i*e o# )he #i$i!g o# )he "e)i)io!, 100 FTAA a""$ica)io!s ha
a$rea, +ee! #i$e, co&eri!g a! area o# 8.9 *i$$io! hec)ares, 89 o# %hich a""$ica)io!s are +, #($$,
#oreig!-o%!e cor"ora)io!s co&eri!g a )o)a$ o# =.8 *i$$io! hec)ares, a! a) $eas) o!e +, a #($$, #oreig!-
o%!e *i!i!g co*"a!, o&er o##shore areas.
3ss(e: Are #oreig!-o%!e cor"ora)io!s i! )he $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o#
"e)ro$e(*, *i!era$s a! *i!era$ oi$s $i*i)e )o M)ech!ica$N or M#i!a!cia$N assis)a!ce o!$,R
R($i!g: 6!$, )ech!ica$ assis)a!ce or #i!a!cia$ assis)a!ce agree*e!)s *a, +e e!)ere i!)o, a! o!$,
#or $arge-sca$e ac)i&i)ies. These are co!)rac) #or*s %hich recog!iGe a! asser) o(r so&ereig!), a!
o%!ershi" o&er !a)(ra$ reso(rces si!ce )he #oreig! e!)i), is C(s) a "(re co!)rac)or a! !o) a +e!e#icia$
o%!er o# o(r eco!o*ic reso(rces. The "ro"osa$ recog!iGes )he !ee #or ca"i)a$ a! )ech!o$og, )o
e&e$o" o(r !a)(ra$ reso(rces %i)ho() sacri#ici!g o(r so&ereig!), a! co!)ro$ o&er s(ch reso(rces +,
)he sa#eg(ar o# a s"ecia$ $a% %hich re'(ires )%o-)hirs &o)e o# a$$ )he *e*+ers o# )he Legis$a)(re.
3) is )r(e )ha) )he %or M)ech!ica$N e!co*"asses a +roa !(*+er o# "ossi+$e ser&ices. 0o%e&er, )he
$a% #o$$o%s )he *aDi* Mcas(s o*is(s "ro o*isso ha+e!(s es)N %hich *ea!s a "erso!, o+Cec) or
)hi!g o*i))e #ro* a! e!(*era)io! *(s) +e he$ )o ha&e +ee! o*i))e i!)e!)io!a$$,.
LA 96GAL#9@LAAN vs DENR Dec! 1- +%%=
Fac)s: 6! 7a!(ar, 27, 2009, )he Co(r) e! +a!c "ro*($ga)e i)s Decisio! gra!)i!g )he /e)i)io! a!
ec$ari!g )he (!co!s)i)()io!a$i), o# cer)ai! "ro&isio!s o# RA 7992, DA6 98-90, as %e$$ as o# )he e!)ire
FTAA eDec()e +e)%ee! )he go&er!*e!) a! 5.C/, *ai!$, o! )he #i!i!g )ha) FTAAs are ser&ice
co!)rac)s "rohi+i)e +, )he 1987 Co!s)i)()io!.
The Decisio! s)r(c2 o%! )he s(+Cec) FTAA #or +ei!g si*i$ar )o ser&ice co!)rac)s, %hich, )ho(gh
"er*i))e (!er )he 1973 Co!s)i)()io!, %ere s(+se'(e!)$, e!o(!ce #or +ei!g a!)i)he)ica$ )o )he
"ri!ci"$e o# so&ereig!), o&er o(r !a)(ra$ reso(rces, +eca(se )he, a$$o%e #oreig! co!)ro$ o&er )he
eD"$oi)a)io! o# o(r !a)(ra$ reso(rces, )o )he "reC(ice o# )he Fi$i"i!o !a)io!.
3ss(e: Are #oreig!-o%!e cor"ora)io!s i! )he $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o#
"e)ro$e(*, *i!era$s a! *i!era$ oi$s $i*i)e )o M)ech!ica$N or M#i!a!cia$N assis)a!ce o!$,R
R($i!g: 6!$, )ech!ica$ assis)a!ce or #i!a!cia$ assis)a!ce agree*e!)s *a, +e e!)ere i!)o, a! o!$,
#or $arge-sca$e ac)i&i)ies. F($$ co!)ro$ is !o) a!a)he*a)ic )o a,-)o-a, *a!age*e!) +, )he co!)rac)or,
"ro&ie )ha) )he S)a)e re)ai!s )he "o%er )o irec) o&era$$ s)ra)eg,P a! )o se) asie, re&erse or *oi#,
"$a!s a! ac)io!s o# )he co!)rac)or. The iea o# #($$ co!)ro$ is si*i$ar )o )ha) %hich is eDercise +, )he
+oar o# irec)ors o# a "ri&a)e cor"ora)io!: )he "er#or*a!ce o# *a!ageria$, o"era)io!a$, #i!a!cia$,
*ar2e)i!g a! o)her #(!c)io!s *a, +e e$ega)e )o s(+ori!a)e o##icers or gi&e! )o co!)rac)(a$
e!)i)ies, +() )he +oar re)ai!s #($$ resi(a$ co!)ro$ o# )he +(si!ess.
1=! AG!R! No! 1==$%+! Ma> +,- +%%=B
4H/L/44/NE GEOTHERMAL /NC!- petitioner, vs. NAT/ONAL 4OCER
COR4ORAT/ON- respondent.
?e#ore )his Co(r) is a "e)i)io! #or re&ie% o! certiorari see2i!g )o se) asie a! !($$i#, )he .arch 29,
2000 Decisio! a! A(g(s) 2, 2000 Reso$()io! o# )he Co(r) o# A""ea$s i! CA-G.R. S/ No. 938=3,
M1$ilippine /eot$ermal !ncorporated v( 3on( Teodoro 1( Regino as 1residing &udge of t$e Regional
Trial Court of 4ue.on Cit%, #ranc$ 56, and t$e National 1ower Corp.N
T;e antecedent :acts o: t;e case a*e as :o11oDs:
6! Se")e*+er 10, 1971, )he Na)io!a$ /o%er Cor"ora)io! :N/C< e!)ere i!)o a ser&ice co!)rac)
T1U
%i)h
/hi$i""i!e Geo)her*a$, 3!c. :/G3<, a cor"ora)io! orga!iGe a! eDis)i!g (!er )he $a%s
o# Ca$i#or!ia, -!i)e S)a)es o# A*erica, #or )he eD"$ora)io! a! eD"$oi)a)io! o# geo)her*a$ reso(rces
co&eri!g )he Ti%i a! .a2-?a! Geo)her*a$ Fie$s. Sec)io! 3.1 o# sai co!)rac) "ro&ies:
Sec)io! 3 A Ter*
3.1 The )er* o# )his co!)rac) sha$$ +e )%e!),-#i&e :2=< ,ears re!e%a+$e #or a!o)her )%e!),-#i&e :2=<
,ears ("o! )he o")io! o# /G3 (!er )he sa*e )er*s a! co!i)io!s se) #or)h herei!.A$+ei) )he ser&ice
co!)rac) %as )o eD"ire i! 1998, )he !ego)ia)io!s #or i)s re!e%a$ s)ar)e as ear$, as 1999. N/C,
ho%e&er, %as o(+)#($ %he)her a re!e%a$ %o($ +e co!s)i)()io!a$ i! $igh) o# Sec)io! 2, Ar)ic$e I33 o# )he
1987 Co!s)i)()io! reai!g:
S4CT36N 2. A$$ $a!s o# )he "(+$ic o*ai!, %a)ers, *i!era$s, coa$, "e)ro$e(* a! o)her *i!era$ oi$s,
a$$ #orces o# "o)e!)ia$ e!erg,, #isheries, #ores)s or )i*+er, %i$$i#e, #$ora a! #a(!a, a! o)her !a)(ra$
reso(rces are o%!e +, )he s)a)e. 5i)h )he eDce")io! o# agric($)(ra$ $a!s, a$$ o)her !a)(ra$ reso(rces
sha$$ !o) +e a$ie!a)e. T;e eE81o*ation- deve1o8(ent- and 0ti1i3ation o: nat0*a1 *eso0*ces s;a11
)e 0nde* t;e :011 cont*o1 and s08e*vision o: t;e state. The s)a)e *a, irec)$, (!er)a2e s(ch
ac)i&i)ies, or i) *a, e!)er i!)o co-"ro(c)io!, Coi!) &e!)(re, or "ro(c)io!-shari!g agree*e!)s %i)h
Fi$i"i!o ci)iGe!s, or cor"ora)io!s or associa)io!s a) $eas) siD), per centum o# %hose ca"i)a$ is o%!e
+, s(ch ci)iGe!s. S(ch agree*e!)s *a, +e #or a "erio !o) eDceei!g )%e!),-#i&e ,ears, re!e%a+$e
#or !o) *ore )ha! )%e!),-#i&e ,ears, a! (!er s(ch )er*s a! co!i)io!s as *a, +e "ro&ie +, $a%.
3! cases o# %a)er righ)s #or irriga)io!, %a)er s(""$,, #isheries, or i!(s)ria$ (ses o)her )ha! )he
e&e$o"*e!) o# %a)er "o%er, +e!e#icia$ (se *a, +e )he *eas(re a! $i*i) o# )he gra!).
D D D :4*"hasis s(""$ie<
As )he ser&ice co!)rac) co!)ai!e a! ar+i)ra$ c$a(se, /G3 #i$e o! 7($, 8, 1998 a re'(es) #or
ar+i)ra)io!
T2U
%i)h )he 3!)er!a)io!a$ Co(r) o# Ar+i)ra)io! :3CA< o# )he 3!)er!a)io!a$ Cha*+er o#
Co**erce :3CC<.
6! A(g(s) 21, 1998, )he N/C #i$e +e#ore )he Regio!a$ Tria$ Co(r) :RTC< o# X(eGo! Ci), a "e)i)io! #or
ec$ara)or, re$ie#
T3U
agai!s) /G3 "ra,i!g #or )he e)er*i!a)io! o# )he co!s)i)()io!a$i), o# Sec)io! 3 o# )he
ser&ice co!)rac), s"eci#ica$$, )he a+o&e-'(o)e "ro&isio! )hereo# o! )he re!e%a$ o# )he co!)rac) a) )he
o")io! o# /G3.
6! 6c)o+er 2, 1998, /G3 #i$e a *o)io! )o is*iss
T9U
)he "e)i)io! #or ec$ara)or, re$ie# a$$egi!g, a*o!g
o)her )hi!gs, )ha) )he )ria$ co(r) has !o C(risic)io! o&er i) i! $igh) o# )he "e!i!g ar+i)ra)io!
"roceei!gs i) i!s)i)()e.
?, 6rer
T=U
o# Dece*+er 3, 1998, ?ra!ch 89 o# )he X(eGo! Ci), RTC e!ie )he *o)io! )o is*iss o!
)he gro(! )ha) )he $ega$i), or co!s)i)()io!a$i), o# )he re!e%a$ o# )he ser&ice co!)rac) is a! iss(e %hich
o!$, a reg($ar co(r) o# C(s)ice *a, reso$&e or se))$e.
/G3 #i$e a *o)io! #or reco!siera)io!
T8U
%hich %as e!ie +, 6rer
T7U
o# .arch 8, 1997.
/G3 )h(s assai$e )he e!ia$ +, )he )ria$ co(r) o# i)s *o)io! )o is*iss +, cer)iorari a! "rohi+i)io!
+e#ore )he Co(r) o# A""ea$s, a$$egi!g )ha):
R4S/6ND4NT 7-DG4 C6..3TT4D GRA>4 A?-S4 6F D3SCR4T36N A.6-NT3NG
T6 LAC1 6R 4IC4SS 6F 3TS 7-R3SD3CT36N 3N N6T GRANT3NG T04 .6T36N T6
D3S.3SS R4S/6ND4NT N/CFS /4T3T36N F6R D4CLARAT6RB R4L34F F3L4D ?B
/G3 F6R T04 R4AS6NS T0AT:
?B 4STA?L3S04D 7-R3S/R-D4NC4, T04 CAS4 ?4L65 S06-LD ?4
D3S.3SS4D 3N >345 6F T04 /4ND3NG AR?3TRAT36N /R6C44D3NG 6>4R T04
SA.4 S-?74CT .ATT4R ?4CA-S4 :i< R4S/6ND4NT 7-DG4 D64S N6T 0A>4
7-R3SD3CT36N T6 TA14 C6GN3VANC4 6F T04 CAS4P :ii< T04R4 3S AN6T04R
ACT36N /4ND3NG ?4T544N T04 /ART34S F6R T04 SA.4 CA-S4P AND :iii<
T04 /4T3T36N ?4L65 STAT4S N6 CA-S4 6F ACT36N.
C6NST3T-T36NAL AND /-?L3C /6L3CB 3SS-4S, 3F ANB, S06-LD ?4 RA3S4D
F3RST 3N T04 AR?3TRAT36N /R6C44D3NG, AND S-?S4X-4NTLB, 3F
5ARRANT4D, 3N T04 /R6C44D3NG F6R T04 4NF6RC4.4NT 6F T04
AR?3TRAL A5ARD.
R4S/6ND4NT N/C 0AS 4NGAG4D 3N F6R-. S06//3NG.
T04 R4.4DB 6F D4CLARAT6RB R4L34F 3S ?6T0 /R4.AT-R4 AND
ACAD4.3C A /R4.AT-R4 ?4CA-S4 3T S06-LD ?4 RA3S4D F3RST 3N T04
AR?3TRAT6N /R6C44D3NG AND 3N T04 4NF6RC4.4NT /R6C44D3NG 6F
T04 AR?3TRAL A5ARD 3F ST3LL N4C4SSARBP AND ACAD4.3C ?4CA-S4 ?B
N/CFS 65N C6ND-CT, T04R4 3S ALR4ADB A ?R4AC0 6F T04 S4R>3C4
C6NTRACTP AND
T04 R4/-?L3C 6F T04 /03L3//3N4S, A /ARTB 3N T04 AR?3TRAT36N CAS4
?4CA-S4 6F 3TS S6>4R43GN G-ARANTB, 3S A N4C4SSARB /ARTB 3N T03S
CAS4P AND T04 A?S4NC4 6F A N4C4SSARB /ARTB 3N A CAS4 F6R
D4CLARAT6RB R4L34F, 3S A 7-R3SD3CT36NAL D4F4CT.
T8U
R4S/6ND4NT 7-DG4 C6..3TT4D GRA>4 A?-S4 6F D3SCR4T36N 3N D4NB3NG
/4T3T36N4R 3TS R3G0T T6 /R6C4D-RAL D-4 /R6C4SS AND 3N ?43NG ?3AS4D
3N FA>6R 6F N/C T6 S4R36-S /R47-D3C4 6F /G3.
/e!i!g ecisio! o# )he "e)i)io! +, )he Co(r) o# A""ea$s, /G3 a! N/C #i$e o! 7($, 10, 1998 a Coi!)
*o)io! )o s(s"e! "roceei!gs
T9U
as )he "ar)ies %ere eD"$ori!g )he "ossi+i$i), o# a*ica+$e se))$e*e!).
5i)ho() reso$&i!g )he Coi!) *o)io! )o s(s"e!, )he Co(r) o# A""ea$s re!ere a Decisio!
T10U
o# .arch
29, 2000 is*issi!g /G3Fs "e)i)io!.
0e!ce, )he i!s)a!) "e)i)io! raisi!g )he #o$$o%i!g arg(*e!)s:
/!
T04 C6-RT 6F A//4ALS 0AD N6 7-R3SD3CT36N T6 R4ND4R T04 D4C3S36N 3N T04 L3G0T
6F A /4ND3NG 763NT .6T36N T6 S-S/4ND F3L4D ?B T04 /ART34S.
//!
T04 /4T3T36N F6R D4CLARAT6RB R4L34F S06-LD 0A>4 ?44N D3S.3SS4D ?B T04
R4G36NAL TR3AL C6-RT AS 54LL AS ?B T04 C6-RT 6F A//4ALS 3N >345 6F T04
/4ND3NG AR?3TRAT36N /R6C44D3NGS 6>4R T04 SA.4 S-?74CT .ATT4R 3N >345 6F A
?R4AC0 6F T04 C6NTRACT S-?74CT 6F T04 /4T3T36N.
///!
T04 D4C3S36NS 6F T04 C6-RT 6F A//4ALS AND 6F T04 R4G36NAL TR3AL C6-RT AR4
N-LL AND >63D F6R ?43NG .AT4R3ALLB 3NF4CT4D, C6NSC36-SLB 6R -NC6NSC36-SLB,
53T0 6?>36-S ?ADG4S 6F ?3AS AND /R47-D3C4.
T11U
D(ri!g )he "e!e!c, o# )he i!s)a!) "e)i)io!, /G3 a! )he N/C #i$e se&era$ Coi!) *o)io!s )o s(s"e!
"roceei!gs
T12U
("o! )he gro(! )ha) )he, %ere !ego)ia)i!g #or )he se))$e*e!) o# )he case. The *o)io!s
%ere gra!)e +, )his Co(r).
T13U
6! Dece*+er 22, 2003, /G3 a! N/C #i$e a 7oi!) .o)io! )o A""ro&e Co*"ro*ise Agree*e!) a! )o
Dis*iss +ase o! Co*"ro*ise Agree*e!) a$$egi!g )ha), a*o!g o)hers )hi!gs:
D D D
33. The #ac) )ha) )he Co*"ro*ise Agree*e!) a! i)s a*e!*e!) %e!) )hro(gh s(ch eDha(s)i&e
re&ie% +, i##ere!) age!cies o# go&er!*e!) a! )ha) )he sa*e "asse )horo(gh scr()i!, a))es)s )o )he
&a$ii), a! so(!!ess o# )he )er*s o# co*"ro*ise co!)ai!e )herei!. 3) *(s) +e "oi!)e o() )ha) )his
agree*e!) %as s)(ie a! eDa*i!e +, age!cies o# go&er!*e!) irec)$, ea$i!g %i)h )he s(+Cec) o#
)he agree*e!) a! %ho are i! )he +es) "osi)io!, +, )heir s2i$$ a! )ech!ica$ eD"er)ise, )o assess )he
&a$ii), o# )he )er*s a! )he +e!e#i) accr(i!g )o )he s)a)e.
D D D
38. D D D The Co*"ro*ise Agree*e!) is !o) co!)rar, )o $a% +eca(se i) i! #ac) irec)$, aresse )o
)he &er, hear) o# )he co!s)i)()io!a$ iss(es i!&o$&e i! )his co!)ro&ers,. Th(s T/G3U a! TN/CU
ha&e ag*eed to te*(inate t;e Se*vice Cont*act s0)Fect (atte* o: t;e dis80te- in :avo* o: a neD
Geot;e*(a1 Sa1es Cont*act and a 4D 1==+ Geot;e*(a1 Se*vice Cont*act- and 4G/ ;as
co((itted to :o*( a 4;i1i88ine co(8an> :o* t;e deve1o8(ent and o8e*ation o: t;e TiDi and
Mak#9an s)ea*#ie$s :Sec. 8.1 )hereo#< on a going#:o*Da*d )asis- t;e*e)> e::ective1> e*asing an>
do0)t as to t;e 1ega1it> o: t;e co(8*o(ise.
D D D
38. D D D TTheU Co*"ro*ise Agree*e!) is !o) co!)rar, )o *ora$s. The arra!ge*e!) is co**ercia$$,
a&a!)ageo(s )o )he Go&er!*e!) o# )he /hi$i""i!es, N/C, /SAL. a! )he co!s(*i!g "(+$ic. As
a+o&e-s)a)e, !o $ess )ha! )he N4DA has co!#ir*e )ha) )he go&er!*e!) s)a!s )o gai! o&er -S
Y2=8 .i$$io! +, e!)eri!g i!)o )his co*"ro*ise. D D D
39. D D D TTheU Co*"ro*ise Agree*e!) is !o) co!)rar, )o "(+$ic "o$ic,. 3) has +ee! ca)egorica$$,
ec$are +, )he s)a)e )ha) "ri&a)e sec)or "ar)ici"a)io! a! "ri&a)iGa)io! o# s)a)e-o%!e e!)er"rises a!
)heir asse)s is e!co(rage i! orer )o acce$era)e eco!o*ic "rogress a! e&e$o"*e!) as e&ie!ce
+, &ario(s $a%s a! iss(a!cesT.U D D D :4*"hasis s(""$ie<
The assai$e ecisio! o# )he Co(r) o# A""ea$s %e$$s o! )he iss(e o# C(risic)io! o# )he RTC o&er )he
N/C "e)i)io! #or ec$ara)or, re$ie# o! )he co!s)i)()io!a$i), o# )he ser&ice co!)rac).
Si!ce o!$, )he iss(e o# C(risic)io! o&er )he co!s)i)()io!a$i), o# a co!)rac) %as e$e&a)e )o )his Co(r), i)
is +e,o! i)s C(risic)io! )o "ass ("o! a! a""ro&e )he Co*"ro*ise Agree*e!) o# )he "ar)ies, %ho
ha&e, as )herei! s)a)e, Magree )o )er*i!a)e )he ser&ice co!)rac) s(+Cec) o# )he is"()e, i! #a&or o#N a
series o# agree*e!)s )ha) s)ar) %i)h M/ro&isio!a$,N #o$$o%e +, M3!)eri*,N )he! MTra!si)io!,N a! #i!a$$,
MGeo)her*a$ Reso(rces Sa$es Co!)rac) :GRSC<,N )he #orgi!g o# %hich agree*e!)s is i!)e!e )o
Me##ec)i&e$, erase a!, o(+) as )o )he $ega$i), o# )he co*"ro*ise.N
3! $igh) o# )he #oregoi!g e&e$o"*e!), %hi$e )his Co(r) e!ies )he "ar)iesF 7oi!) .o)io! )o A""ro&e )he
Co*"ro*ise Agree*e!), i) #i!s )he .o)io! )o Dis*iss %e$$-)a2e!.
CHEREFORE, )he .o)io! )o Dis*iss )he i!s)a!) "e)i)io! is here+, GRANT4D.
SO ORDERED!
17! 5G S0((it Ho1dings /NC! vs! Co0*t o: A88ea1s G.R. No. 129293 7a!(ar, 31, 200=
Fac)s:
The Na)io!a$ 3!&es)*e!) a! De&e$o"*e!) Cor"ora)io! :N3DC<, a go&er!*e!) cor"ora)io!, e!)ere
i!)o a 7oi!) >e!)(re Agree*e!) :7>A< %i)h 1a%asa2i 0ea&, 3!(s)ries, L). o# 1o+e, 7a"a!
:1A5ASA13< #or )he co!s)r(c)io!, o"era)io! a! *a!age*e!) o# )he S(+ic Na)io!a$ Shi",ar 3!c.,
:SNS< %hich s(+se'(e!)$, +eca*e )he /hi$i""i!e Shi",ar a! 4!gi!eeri!g Cor"ora)io!
:/03LS4C6<.
-!er )he 7>A, )he NDC a! 1A5ASA13 %i$$ co!)ri+()e /330. #or )he ca"i)a$iGa)io! o# /03LS4C6 i!
)he "ro"or)io! o# 80Z-90Z res"ec)i&e$,. 6!e o# i)s sa$ie!) #ea)(res is )he gra!) )o )he "ar)ies o# )he
righ) o# #irs) re#(sa$ sho($ ei)her o# )he* ecie )o se$$, assig! or )ra!s#er i)s i!)eres) i! )he Coi!)
&e!)(re.
N3DC )ra!s#erre a$$ i)s righ)s, )i)$e a! i!)eres) i! /03LS4C6 )o )he /hi$i""i!e Na)io!a$ ?a!2 :/N?<.
S(ch i!)eres)s %ere s(+se'(e!)$, )ra!s#erre )o )he Na)io!a$ Go&er!*e!) "(rs(a!) )o a!
A*i!is)ra)i&e 6rer.
5he! )he #or*er /resie!) A'(i!o iss(e /roc$a*a)io! No. =0 es)a+$ishi!g )he Co**i))ee o!
/ri&a)iGa)io! :C6/< a! )he Asse) /ri&a)iGa)io! Tr(s) :A/T< )o )a2e )i)$e )o, a! "ossessio! o#,
co!ser&e, *a!age a! is"ose o# !o!-"er#or*i!g asse)s o# )he Na)io!a$ Go&er!*e!), a )r(s)
agree*e!) %as e!)ere i!)o +e)%ee! )he Na)io!a$ Go&er!*e!) a! )he A/T %herei! )he $a))er %as
!a*e )he )r(s)ee o# )he Na)io!a$ Go&er!*e!)Fs share i! /03LS4C6.
3! )he i!)eres) o# )he !a)io!a$ eco!o*, a! )he go&er!*e!), )he C6/ a! )he A/T ee*e i) +es) )o
se$$ )he Na)io!a$ Go&er!*e!)Fs share i! /03LS4C6 )o "ri&a)e e!)i)ies. A#)er a series o# !ego)ia)io!s
+e)%ee! )he A/T a! 1A5ASA13 , )he, agree )ha) )he $a))erFs righ) o# #irs) re#(sa$ (!er )he 7>A +e
MeDcha!geN #or )he righ) )o )o" +, =Z, )he highes) +i #or )he sai shares. The, #(r)her agree )ha)
1A5ASA13 %o($. +e e!)i)$e )o !a*e a co*"a!, i! %hich i) %as a s)oc2ho$er, %hich co($ eDercise
)he righ) )o )o". 1A5ASA13 )he! i!#or*e A/T )ha) /hi$,ars 0o$i!gs, 3!c. :/03< %o($ eDercise i)s
righ) )o )o".
A) )he "(+$ic +ii!g, "e)i)io!er 7.G. S(**i) 0o$i!gs 3!c. s(+*i))e a +i o# T%o ?i$$io! a! Thir),
.i$$io! /esos :/h"2,030,000,000.00< %i)h a! ac2!o%$ege*e!) o# 1A5ASA13@/03LBARDS righ) )o
)o".
As "e)i)io!er %as ec$are )he highes) +ier, )he C6/ a""ro&e )he sa$e Ms(+Cec) )o )he righ) o#
1a%asa2i 0ea&, 3!(s)ries, 3!c. @ /03LBARDS 0o$i!gs 3!c. )o )o" 7GFs +i +, =Z as s"eci#ie i! )he
+ii!g r($es.N
6! )he o)her ha!, )he res"o!e!) +, &ir)(e o# righ) )o )o" +, =Z, )he highes) +i #or )he sai shares
)i*e$, eDercise )he sa*e.
/e)i)io!ers, i! )heir *o)io! #or reco!siera)io!, raise, i!)er a$ia, )he iss(e o! )he *ai!)e!a!ce o# )he
80Z-90Z re$a)io!shi" +e)%ee! )he N3DC a! 1A5ASA13 arisi!g #ro* )he Co!s)i)()io! +eca(se
/03LS4C6 is a $a!ho$i!g cor"ora)io! a! !ee !o) +e a "(+$ic ()i$i), )o +e +o(! +, )he 80Z-90Z
co!s)i)()io!a$ $i*i)a)io!.
3SS-4:
5he)her or !o) )he res"o!e!) is "rohi+i)e )o "ossess )he is"()e "ro"er), co!sieri!g )he
"rohi+i)io! s)i"($a)e i! )he 1987 Co!s)i)()io! agai!s) #oreig! o%!e co*"a!ies.
R-L3NG:
The co(r) ("he$ )he &a$ii), o# )he *()(a$ righ)s o# #irs) re#(sa$ (!er )he 7>A +e)%ee! 1A5ASA13
a! N3DC.
The righ) o# #irs) re#(sa$ is a "ro"er), righ) o# /03LS4C6 shareho$ers, 1A5ASA13 a! N3DC, (!er
)he )er*s o# )heir 7>A. This righ) a$$o%s )he* )o "(rchase )he shares o# )heir co-shareho$er +e#ore
)he, are o##ere )o a )hir "ar),. The agree*e!) o# co-shareho$ers )o *()(a$$, gra!) )his righ) )o
each o)her, +, i)se$#, oes !o) co!s)i)()e a &io$a)io! o# )he "ro&isio!s o# )he Co!s)i)()io! $i*i)i!g $a!
o%!ershi" )o Fi$i"i!os a! Fi$i"i!o cor"ora)io!s. As /03LBARDS correc)$, "()s i), i# /03LS4C6 s)i$$
o%!s )he $a!, )he righ) o# #irs) re#(sa$ ca! +e &a$i$, assig!e )o a '(a$i#ie Fi$i"i!o e!)i), i! orer )o
*ai!)ai! )he 80Z-90Z ra)io!. This )ra!s#er +, i)se$#, oes !o) a*o(!) )o a &io$a)io! o# )he A!)i-
D(**, La%s, a+se!) "roo# o# a!, #ra(($e!) i!)e!). The )ra!s#er co($ +e *ae ei)her )o a !o*i!ee
or s(ch o)her "ar), %hich )he ho$er o# )he righ) o# #irs) re#(sa$ #ee$s i) ca! co*#or)a+$, o +(si!ess
%i)h.
A$)er!a)i&e$,, /03LS4C6 *a, i&es) o# i)s $a!ho$i!gs, i! %hich case 1A5ASA13, i! eDercisi!g i)s
righ) o# #irs) re#(sa$, ca! eDcee 90Z o# /03LS4C6Fs e'(i),. 3! #ac), i! ca! e&e! +e sai )ha) i# )he
#oreig! shareho$i!gs o# a $a!ho$i!g cor"ora)io! eDees 90Z, i) is !o) )he #oreig! s)oc2ho$ersF
o%!ershi" o# )he shares %hich is a&erse$, a##ec)e +() )he ca"aci), o# )he cor"ora)io! )o %o! $a!Q
)ha) is, )he cor"ora)io! +eco*es is'(a$i#ie )o o%! $a!.
This #i!s s(""or) (!er )he +asic cor"ora)e $a% "ri!ci"$e )ha) )he cor"ora)io! a! i)s s)oc2ho$ers
are se"ara)e C(icia$ e!)i)ies. 3! )his &ei!, )he righ) o# #irs) re#(sa$ o&er shares "er)ai!s )o )he
shareho$ers %hereas )he ca"aci), )o o%! $a! "er)ai!s )o )he cor"ora)io!. 0e!ce, )he #ac) )ha)
/03LS4C6 o%!s $a! ca!!o) e"ri&e s)oc2ho$ers o# )heir righ) o# #irs) re#(sa$. No 1aD disG0a1i:ies a
8e*son :*o( 80*c;asing s;a*es in a 1and;o1ding co*8o*ation even i: t;e 1atte* Di11 eEceed t;e
a11oDed :o*eign eG0it>- D;at t;e 1aD disG0a1i:ies is t;e co*8o*ation :*o( oDning 1and!
Section $: Land o: t;e 40)1ic Do(ain
G!R! No! $1<&&! Dece()e* 1,- 1''%!H
D/RECTOR OF LANDS- D/RECTOR OF FORESTRY and RE469L/C OF THE 4H/L/44/NES-
8etitione*s- vs! HON! 56AN 4! AI6/NO
FACTS:
The ce!)er o# co!)ro&ers, i! )he i!s)a!) "e)i)io! #or re&ie% o! cer)iorari is a $i*es)o!e-rich 70-
hec)are $a! i! ?(ca,, A+ra 88 hec)ares o# %hich are, accori!g )o "e)i)io!ers, %i)hi! )he
Ce!)ra$ Cori$$era Fores) Reser&e.
/ri&a)e res"o!e!) A+ra 3!(s)ria$ Cor"ora)io! :A3C #or +re&i),<, a ($, regis)ere cor"ora)io!
es)a+$ishe #or )he "(r"ose o# se))i!g (" a ce*e!) #ac)or,, c$ai*s o! )he o)her ha!, )o +e )he
o%!er i! #ee si*"$e o# )he %ho$e 70-hec)are area i!ica)e i! s(r&e, "$a!s /S--217=18,
/S--217=19 a! /S--217=20 %i)h a )o)a$ assesse &a$(e o# /8,729.98. Th(s, o!
Se")e*+er 23, 198=, i) #i$e i! )he )he! Co(r) o# Firs) 3!s)a!ce o# A+ra a! a""$ica)io! #or
regis)ra)io! i! i)s !a*e o# sai "arce$s o# $a! (!er )he La! Regis)ra)io! Ac) or, i! )he
a$)er!a)i&e, (!er Sec. 98 o# Co**o!%ea$)h Ac) No. 1911 as a*e!e +, Re"(+$ic Ac) No.
1992 i!as*(ch as i)s "reecessors-i!-i!)eres) ha a$$ege$, +ee! i! "ossessio! )hereo# si!ce
7($, 28, 1899.
3SS-4:
5he)her or !o) $o%er co(r) erre i! gra!)i!g )he a""$ica)io! #or regis)ra)io! o# )he "arce$s o#
$a! !o)%i)hs)a!i!g "e)i)io!ers #i!i!g )ha) )he, are %i)hi! )he #ores) Go!e.
R-L3NG:
B4S. Fores) $a!s or #ores) reser&es are i!ca"a+$e o# "ri&a)e a""ro"ria)io! a! "ossessio!
)hereo#, ho%e&er $o!g, ca!!o) co!&er) )he* i!)o "ri&a)e "ro"er)ies. This r($i!g is "re*ise o! )he
rega$ia! oc)ri!e e!shri!e !o) o!$, i! )he 193= a! 1973 Co!s)i)()io!s +() a$so i! )he 1987
Co!s)i)()io! Ar)ic$e I333.
The $o%er co(r) c$ose i)s e,es )o a +asic oc)ri!e i! $a! regis)ra)io! cases )ha) )he i!c$(sio!
i! a )i)$e o# a "ar) o# )he "(+$ic o*ai! !($$i#ies )he )i)$e. 3)s ecisio! )o orer )he regis)ra)io! o#
a! i!a$ie!a+$e $a! i! #a&or o# A3C (!er )he *isco!ce")io! )ha) i) is i*"era)i&e #or )he
Direc)or o# Fores)r, )o o+Cec) )o i)s eDc$(sio! #ro* )he #ores) reser&e e&e! i! )he #ace o# i)s
#i!i!g )ha) i!ee a siGa+$e "or)io! o# )he Ce!)ra$ Cori$$era Fores) Reser&e is i!&o$&e,
ca!!o) +e a$$o%e )o s)a, (!re&erse. 3) +e)ra,s a! i!here!) i!#ir*i), %hich *(s) +e
correc)e.
Re80)1ic vs! CA
Re80)1ic o: t;e 4;i1i88ines- 9eng0et J Atok vs! Co0*t o: A88ea1s J De La Rosa
G!R! No! L#=$'$&- A8*i1 17- 1'&&
Cru., &(2
Doct*ine: The o%!er o# a "iece o# $a! has righ)s !o) o!$, )o i)s s(r#ace +() a$so )o e&er,)hi!g
(!er!ea)h a! )he airs"ace a+o&e i) (" )o a reaso!a+$e heigh). The righ)s o&er )he $a! are
i!i&isi+$e a! )he $a! i)se$# ca!!o) +e ha$# agric($)(ra$ a! ha$# *i!era$. The c$assi#ica)io! *(s) +e
ca)egorica$P )he $a! *(s) +e ei)her co*"$e)e$, *i!era$ or co*"$e)e$, agric($)(ra$.
Facts: These cases arose #ro* )he a""$ica)io! #or regis)ra)io! o# a "arce$ o# $a! #i$e o! Fe+r(ar, 11,
198=, +, 7ose e $a Rosa o! his o%! +eha$# a! o! +eha$# o# his )hree chi$re!, >ic)oria, ?e!Ca*i!
a! 4(aro. The $a!, si)(a)e i! T(i!g, 3)ogo!, ?e!g(e) /ro&i!ce, %as i&ie i!)o 9 $o)s a!
co&ere +, "$a! /s(-22=009. Accori!g )o )he a""$ica)io!, Lo)s 1-= %ere so$ )o 7ose e $a Rosa a!
Lo)s 8-9 )o his chi$re! +, .a*a,a ?a$+a$io a! 7ai*e A$+er)o, res"ec)i&e$,, i! 1989.
The a""$ica)io! %as se"ara)e$, o""ose +, ?e!g(e) Co!so$ia)e, 3!c. as )o Lo)s 1-=, A)o2 ?ig
5ege Cor"ora)io!, as )o /or)io!s o# Lo)s 1-= a! a$$ o# Lo)s 8-9, a! +, )he Re"(+$ic o# )he
/hi$i""i!es, )hro(gh )he ?(rea( o# Fores)r, De&e$o"*e!), as )o $o)s 1-9.
3! s(""or) o# )he a""$ica)io!, +o)h ?a$+a$io a! A$+er)o )es)i#ie )ha) )he, ha ac'(ire )he s(+Cec)
$a! +, &ir)(e o# "rescri")io! ?a$+a$io c$ai*e )o ha&e recei&e Lo)s 1-= #ro* her #a)her shor)$, a#)er
)he Li+era)io!.
?e!g(e) o""ose o! )he gro(! )ha) )he 7(!e ?(g *i!era$ c$ai* co&eri!g Lo)s 1-= %as so$ )o i) o!
Se")e*+er 22, 1939, +, )he s(ccessors-i!-i!)eres) o# 7a*es 1e$$,, %ho $oca)e )he c$ai* i!
Se")e*+er 1909 a! recore i) o! 6c)o+er 19, 1909. Fro* )he a)e o# i)s "(rchase, ?e!g(e) ha
+ee! i! ac)(a$, co!)i!(o(s a! eDc$(si&e "ossessio! o# )he $a! i! co!ce") o# o%!er, as e&ie!ce +,
i)s co!s)r(c)io! o# ai)s, i)s a##ia&i)s o# a!!(a$ assess*e!), i)s geo$ogica$ *a""i!gs, geo$ogica$
sa*"$i!gs a! )re!ch sie c()s, a! i)s "a,*e!) o# )aDes o! )he $a!.
For i)s "ar), A)o2 a$$ege )ha) a "or)io! o# Lo)s 1-= a! a$$ o# Lo)s 8-9 %ere co&ere +, )he 4**a a!
Freia *i!era$ c$ai*s $oca)e +, 0arriso! a! Re,!o$s o! Dece*+er 2=, 1930, a! recore o!
7a!(ar, 2, 1931, i! )he o##ice o# )he *i!i!g recorer o# ?ag(io. These c$ai*s %ere "(rchase #ro*
)hese $oca)ors o! No&e*+er 2, 1931, +, A)o2, %hich has si!ce )he! +ee! i! o"e!, co!)i!(o(s a!
eDc$(si&e "ossessio! o# )he sai $o)s as e&ie!ce +, i)s a!!(a$ assess*e!) %or2 o! )he c$ai*s,
s(ch as )he +ori!g o# )(!!e$s, a! i)s "a,*e!) o# a!!(a$ )aDes )hereo!.
The ?(rea( o# Fores)r, De&e$o"*e!) a$so i!)er"ose i)s o+Cec)io!, arg(i!g )ha) )he $a! so(gh) )o +e
regis)ere %as co&ere +, )he Ce!)ra$ Cori$$era Fores) Reser&e (!er /roc$a*a)io! No. 217 a)e
Fe+r(ar, 18, 1929. .oreo&er, +, reaso! o# i)s !a)(re, i) %as !o) s(+Cec) )o a$ie!a)io! (!er )he
Co!s)i)()io!s o# 193= a! 1973.
The )ria$ co(r) e!ie )he a""$ica)io!, ho$i!g )ha) )he a""$ica!)s ha #ai$e )o "ro&e )heir c$ai* o#
"ossessio! a! o%!ershi" o# )he $a! so(gh) )o +e regis)ere.
The a""$ica!)s a""ea$e )o )he res"o!e!) co(r), %hich re&erse )he )ria$ co(r) a! recog!iGe )he
c$ai*s o# )he a""$ica!), +() s(+Cec) )o )he righ)s o# ?e!g(e) a! A)o2 res"ec)i!g )heir *i!i!g c$ai*s. 3!
o)her %ors, )he Co(r) o# A""ea$s a##ir*e )he s(r#ace righ)s o# )he e $a Rosas o&er )he $a! %hi$e a)
)he sa*e )i*e reser&i!g )he s(+-s(r#ace righ)s o# ?e!g(e) a! A)o2 +, &ir)(e o# )heir *i!i!g c$ai*s.
?o)h ?e!g(e) a! A)o2 ha&e a""ea$e )o )his Co(r), i!&o2i!g )heir s("erior righ) o# o%!ershi".
/ss0e: 5he)her res"o!e!) co(r)Fs ecisio!, i.e. M)he s(r#ace righ)s o# )he e $a Rosas o&er )he $a!
%hi$e a) )he sa*e )i*e reser&i!g )he s(+-s(r#ace righ)s o# ?e!g(e) a! A)o2 +, &ir)(e o# )heir *i!i!g
c$ai*,N is correc).
He1d: No. 6(r ho$i!g is )ha) ?e!g(e) a! A)o2 ha&e eDc$(si&e righ)s )o )he "ro"er), i! '(es)io! +,
&ir)(e o# )heir res"ec)i&e *i!i!g c$ai*s %hich )he, &a$i$, ac'(ire +e#ore )he Co!s)i)()io! o# 193=
"rohi+i)e )he a$ie!a)io! o# a$$ $a!s o# )he "(+$ic o*ai! eDce") agric($)(ra$ $a!s, s(+Cec) )o &es)e
righ)s eDis)i!g a) )he )i*e o# i)s ao")io!. The $a! %as !o) a! co($ !o) ha&e +ee! )ra!s#erre )o )he
"ri&a)e res"o!e!)s +, &ir)(e o# ac'(isi)i&e "rescri")io!, !or co($ i)s (se +e share si*($)a!eo(s$,
+, )he* a! )he *i!i!g co*"a!ies #or agric($)(ra$ a! *i!era$ "(r"oses. 3) is )r(e )ha) )he s(+Cec)
"ro"er), %as co!siere #ores) $a! a! i!c$(e i! )he Ce!)ra$ Cori$$era Fores) Reser&e, +() )his
i !o) i*"air )he righ)s a$rea, &es)e i! ?e!g(e) a! A)o2 a) )ha) )i*e. S(ch righ)s %ere !o)
a##ec)e ei)her +, )he s)ric)(re i! )he Co**o!%ea$)h Co!s)i)()io! agai!s) )he a$ie!a)io! o# a$$ $a!s o#
)he "(+$ic o*ai! eDce") )hose agric($)(ra$ i! !a)(re #or )his %as *ae s(+Cec) )o eDis)i!g righ)s. The
"er#ec)io! o# )he *i!i!g c$ai* co!&er)e )he "ro"er), )o *i!era$ $a! a! (!er )he $a%s )he! i! #orce
re*o&e i) #ro* )he "(+$ic o*ai!. ?, s(ch ac), )he $oca)ors ac'(ire eDc$(si&e righ)s o&er )he $a!,
agai!s) e&e! )he go&er!*e!), %i)ho() !ee o# a!, #(r)her ac) s(ch as )he "(rchase o# )he $a! or )he
o+)e!)io! o# a "a)e!) o&er i). As )he $a! ha +eco*e )he "ri&a)e "ro"er), o# )he $oca)ors, )he, ha )he
righ) )o )ra!s#er )he sa*e, as )he, i, )o ?e!g(e) a! A)o2. The Co(r) o# A""ea$s C(s)i#ie )his +,
sa,i!g )here is M!o co!#$ic) o# i!)eres)N +e)%ee! )he o%!ers o# )he s(r#ace righ)s a! )he o%!ers o# )he
s(+-s(r#ace righ)s. This is ra)her oc)ri!e, #or i) is a %e$$-2!o%! "ri!ci"$e )ha) )he o%!er o# "iece o#
$a! has righ)s !o) o!$, )o i)s s(r#ace +() a$so )o e&er,)hi!g (!er!ea)h a! )he airs"ace a+o&e i) ("
)o a reaso!a+$e heigh). -!er )he a#oresai r($i!g, )he $a! is c$assi#ie as *i!era$ (!er!ea)h a!
agric($)(ra$ o! )he s(r#ace, s(+Cec) )o se"ara)e c$ai*s o# )i)$e. This is a$so i##ic($) )o (!ers)a!,
es"ecia$$, i! i)s "rac)ica$ a""$ica)io!.
The Co(r) #ee$s )ha) )he righ)s o&er )he $a! are i!i&isi+$e a! )ha) )he $a! i)se$# ca!!o) +e ha$#
agric($)(ra$ a! ha$# *i!era$. The c$assi#ica)io! *(s) +e ca)egorica$P )he $a! *(s) +e ei)her
co*"$e)e$, *i!era$ or co*"$e)e$, agric($)(ra$. 3! )he i!s)a!) case, as a$rea, o+ser&e, )he $a! %hich
%as origi!a$$, c$assi#ie as #ores) $a! cease )o +e so a! +eca*e *i!era$ Q a! co*"$e)e$,
*i!era$ Q o!ce )he *i!i!g c$ai*s %ere "er#ec)e. As $o!g as *i!i!g o"era)io!s %ere +ei!g
(!er)a2e! )hereo!, or (!er!ea)h, i) i !o) cease )o +e so a! +eco*e agric($)(ra$, e&e! i# o!$,
"ar)$, so, +eca(se i) %as e!c$ose %i)h a #e!ce a! %as c($)i&a)e +, )hose %ho %ere (!$a%#($$,
occ(",i!g )he s(r#ace.
This is a! a""$ica)io! o# )he Rega$ia! oc)ri!e %hich, as i)s !a*e i*"$ies, is i!)e!e #or )he +e!e#i) o#
)he S)a)e, !o) o# "ri&a)e "erso!s. The r($e si*"$, reser&es )o )he S)a)e a$$ *i!era$s )ha) *a, +e #o(!
i! "(+$ic a! e&e! "ri&a)e $a! e&o)e )o Magric($)(ra$, i!(s)ria$, co**ercia$, resie!)ia$ or :#or< a!,
"(r"ose o)her )ha! *i!i!g.N Th(s, i# a "erso! is )he o%!er o# agric($)(ra$ $a! i! %hich *i!era$s are
isco&ere, his o%!ershi" o# s(ch $a! oes !o) gi&e hi* )he righ) )o eD)rac) or ()i$iGe )he sai
*i!era$s %i)ho() )he "er*issio! o# )he S)a)e )o %hich s(ch *i!era$s +e$o!g.
The #$a% i! )he reaso!i!g o# )he res"o!e!) co(r) is i! s(""osi!g )ha) )he righ)s o&er )he $a! co($
+e (se #or +o)h *i!i!g a! !o!-*i!i!g "(r"oses si*($)a!eo(s$,. The correc) i!)er"re)a)io! is )ha)
o!ce *i!era$s are isco&ere i! )he $a!, %ha)e&er )he (se )o %hich i) is +ei!g e&o)e a) )he )i*e,
s(ch (se *a, +e isco!)i!(e +, )he S)a)e )o e!a+$e i) )o eD)rac) )he *i!era$s )herei! i! )he eDercise
o# i)s so&ereig! "reroga)i&e. The $a! is )h(s co!&er)e )o *i!era$ $a! a! *a, !o) +e (se +, a!,
"ri&a)e "ar),, i!c$(i!g )he regis)ere o%!er )hereo#, #or a!, o)her "(r"ose )ha) %i$$ i*"ee )he *i!i!g
o"era)io!s )o +e (!er)a2e! )herei!, For )he $oss s(s)ai!e +, s(ch o%!er, he is o# co(rse e!)i)$e )o
C(s) co*"e!sa)io! (!er )he .i!i!g La%s or i! a""ro"ria)e eD"ro"ria)io! "roceei!gs.
A8eE Mining Co!- /nc! v! So0t;east Mindanao Go1d Mining Co*8! 2+%%<"
Fac)s:
The case i!&o$&es )he MDi%a$%a$ Go$ R(sh AreaN :Di%a$%a$<, a rich )rac) o# *i!era$ $a! $oca)e
i!sie )he Ag(sa!-Da&ao-S(rigao Fores) Reser&e i! Da&ao e$ Nor)e a! Da&ao 6rie!)a$. Si!ce )he
ear$, 1980s, Di%a$%a$ has +ee! s)or*e +, co!#$ic)s +ro(gh) a+o() +, !(*ero(s *i!i!g c$ai*s o&er
i). 6! .arch 10, 1988, .arco""er .i!i!g Cor"ora)io! :..C< %as gra!)e a! 4D"$ora)io! /er*i) :4/
133< +, )he ?(rea( o# .i!es a! Geo-Scie!ces :?.G<. A $o!g +a))$e e!s(e +e)%ee! A"eD a!
..C %i)h )he $a))er see2i!g )he ca!ce$$a)io! o# )he *i!i!g c$ai*s o# A"eD o! )he gro(! )ha) s(ch
*i!i!g c$ai*s %ere %i)hi! a #ores) reser&a)io! :Ag(sa!-Da&ao-S(rigao Fores) Reser&e< a! )h(s )he
ac'(isi)io! o! *i!i!g righ)s sho($ ha&e +ee! )hro(gh a! a""$ica)io! #or a "er*i) )o "ros"ec) %i)h )he
?FD a! !o) )hro(gh regis)ra)io! o# a D6L %i)h )he ?.G. 5he! i) reache )he SC i! 1991, )he Co(r)
r($e agai!s) A"eD ho$i!g )ha) )he area is a #ores) reser&e a! )h(s i) sho($ ha&e a""$ie #or a
"er*i) )o "ros"ec) %i)h )he ?FD. 6! Fe+r(ar, 18 1999, ..C assig!e a$$ i)s righ)s )o 4/ 133 )o
So()heas) .i!a!ao Go$ .i!i!g Cor"ora)io! :S4.<, a o*es)ic cor"ora)io! %hich is a$$ege )o +e a
100Z-o%!e s(+siiar, o# ..C. S(+se'(e!)$,, ?.G regis)ere S4.Fs .i!era$ /ro(c)io! Shari!g
Agree*e!) :./SA< a""$ica)io! a! )he Dee o# Assig!*e!). Se&era$ o""osi)io!s %ere #i$e. The
/a!e$ o# Ar+i)ra)ors crea)e +, )he D4NR ("he$ )he &a$ii), o# 4/ 133. D(ri!g )he "e!e!c, o# )he
case, D4NR A6 No. 2002-18 %as iss(e ec$ari!g a! e*erge!c, si)(a)io! i! )he Di%a$%a$ Go$
R(sh Area a! oreri!g )he s)o""age o# a$$ *i!i!g o"era)io!s )herei!.
3ss(es: 1. 5@N 4/ 133 a! i)s s(+se'(e!) )ra!s#er )o S4. is &a$i.
2. 5@N )he D4NR Secre)ar, has a()hori), )o iss(e DA6 88 ec$ari!g 729 hec)ares o# )he areas
co&ere +, )he Ag(sa!-Da&ao-S(rigao Fores) Reser&e as !o!-#ores) $a!s a! o"e! )o s*a$$sca$e
*i!i!g "(r"oses.
3. 5ho :a*o!g "e)i)io!ers A"eD a! ?a$i)e< has "riori), righ) o&er Di%a$%a$R
0e$@Ra)io:
3N>AL3D. 6!e o# )he )er*s a! co!i)io!s o# 4/ 133 is: MTha) )his "er*i)
sha$$ +e #or )he eDc$(si&e (se a! +e!e#i) o# )he "er*i))ee or his ($,
a()horiGe age!)s a! sha$$ +e (se #or *i!era$ eD"$ora)io! "(r"oses o!$,
a! #or !o o)her "(r"ose.N 5hi$e i) *a, +e )r(e )ha) S4. is a 100Z
s(+siiar, cor"ora)io! o# ..C, )here is !o sho%i!g )ha) )he #or*er is )he
($, a()horiGe age!) o# )he $a))er. As s(ch, )he assig!*e!) is !($$ a! &oi
as i) irec)$, co!)ra&e!es )he )er*s a! co!i)io!s o# )he gra!) o# 4/ 133. a.
The Dee o# Assig!*e!) %as a )o)a$ a+ica)io! o# ..CFs righ)s o&er )he
"er*i). 3) is !o) a *ere gra!) o# a()hori), )o S4. as age!). +. Reaso! #or )he
s)i"($a)io!. 4D"$ora)io! "er*i)s are s)ric)$, gra!)e )o e!)i)ies or i!i&i(a$s
"ossessi!g )he reso(rces a! ca"a+i$i), )o (!er)a2e *i!i!g o"era)io!s.
5i)ho() s(ch a co!i)io!, !o!-'(a$i#ie e!)i)ies or i!i&i(a$s co($
circ(*&e!) )he s)ric) re'(ire*e!)s (!er )he $a% +, )he si*"$e eD"eie!c, o#
ac'(iri!g )he "er*i) #ro* )he origi!a$ "er*i))ee. c. Se"ara)e "erso!a$i),. The
#ac) )ha) S4. is a 100Z s(+siiar, o# ..C oes !o) a()o*a)ica$$, *a2e i)
a! age!) o# ..C. A cor"ora)io! is a! ar)i#icia$ +ei!g i!&es)e +, $a% %i)h a
"erso!a$i), se"ara)e a! is)i!c) #ro* "erso!s co*"osi!g i) as %e$$ as #ro*
)ha) o# a!, o)her $ega$ e!)i), )o %hich i) *a, +e re$a)e. A+se!) a!, c$ear
"roo# )o )he co!)rar,, S4. is a se"ara)e a! is)i!c) e!)i), #ro* ..C. .
Doc)ri!e o# "ierci!g )he cor"ora)e &ei$ i!a""$ica+$e. 6!$, i! cases %here )he
cor"ora)e #ic)io! %as (se as a shie$ #or #ra(, i$$ega$i), or i!e'(i), *a, )he
&ei$ +e "ierce a! re*o&e. The oc)ri!e o# "ierci!g )he cor"ora)e &ei$
ca!!o) )here#ore +e (se as a &ehic$e )o co**i) "rohi+i)e ac)s. The
assig!*e!) o# )he "er*i) i! #a&or o# S4. is ()i$iGe )o circ(*&e!) )he
co!i)io! o# !o! )ra!s#era+i$i), o# )he eD"$ora)io! "er*i). To a$$o% S4. )o
a&ai$ i)se$# o# )his oc)ri!e a! )o a""ro&e )he &a$ii), o# )he assig!*e!) is )a!)a*o(!) )o sa!c)io!i!g
a! i$$ega$ ac) %hich is %ha) )he oc)ri!e "recise$, see2s )o #ores)a$$. e. /D 983 re'(ires a""ro&a$ o#
Secre)ar, o# D4NR. A$so, /D 983 :.i!era$ Reso(rces De&e$o"*e!) Decree<, %hich is )he go&er!i!g
$a% %he! )he assig!*e!) %as eDec()e, eD"$ici)$, re'(ires )ha) )he )ra!s#er or assig!*e!) o# *i!i!g
righ)s, i!c$(i!g )he righ) )o eD"$ore a *i!i!g area, *(s) +e %i)h )he "rior a""ro&a$ o# )he Secre)ar, o#
D4NR. S(ch is !o) "rese!) i! )his case. #. 4/ 133 eD"ire +, !o!-re!e%a$. A$)ho(gh 4/ 133 %as
eD)e!e #or 12 *o!)hs (!)i$ 7($, 8, 1999, ..C !e&er re!e%e i)s "er*i) "rior a! a#)er i)s
eD"ira)io!.
5i)h )he eD"ira)io! o# 4/ 133 o! 7($, 8, 1999, ..C $os) a!, righ) )o )he Di%a$%a$ Go$ R(sh Area.
S4., o! )he o)her ha!, has !o) ac'(ire a!, righ) )o )he sai area +eca(se )he )ra!s#er o# 4/ 133 i!
i)s #a&or is i!&a$i. 0e!ce, +o)h ..C a! S4. ha&e !o) ac'(ire a!, &es)e righ) o&er )he area
co&ere +, 4/ 133. 2. N6. The D4NR Secre)ar, has !o "o%er )o co!&er) #ores) reser&es i!)o !o!-
#ores) reser&es. S(ch "o%er is &es)e %i)h )he /resie!). The D4NR Secre)ar, *a, o!$, reco**e!
)o )he /resie!) %hich #ores) reser&a)io!s are )o +e %i)hra%! #ro* )he co&erage )hereo#. Th(s, DA6
No. 88 is !($$ a! &oi #or ha&i!g +ee! iss(e i! eDcess o# )he D4NR Secre)ar,Fs a()hori),.
:Si!ce i)Fs +ee! he$ )ha) !ei)her ..C !or S4. has a!, righ) o&er Di%a$%a$,
i) is )h(s !ecessar, )o *a2e a e)er*i!a)io! o# )he eDis)i!g righ) o# )he
re*ai!i!g c$ai*a!)s, "e)i)io!ers A"eD a! ?a$i)e, i! )he is"()e.< The iss(e
o! %ho has "riori), righ) o&er Di%a$%a$ is ee*e o&er)a2e! +, )he iss(a!ce
o# /roc$a*a)io! 297 a! DA6 No. 2002-18, +o)h +ei!g co!s)i)()io!a$$,-
sa!c)io!e ac)s o# )he 4Dec()i&e ?ra!ch. .i!i!g o"era)io!s i! )he Di%a$%a$
.i!era$ Reser&a)io! are !o%, )here#ore, %i)hi! )he #($$ co!)ro$ o# )he S)a)e
)hro(gh )he eDec()i&e +ra!ch. /(rs(a!) )o Sec. = o# RA 7992, )he S)a)e ca!
ei)her: :1< irec)$, (!er)a2e )he eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! o#
)he area or :2< o") )o a%ar *i!i!g o"era)io!s i! )he *i!era$ reser&a)io! )o
"ri&a)e e!)i)ies i!c$(i!g "e)i)io!ers A"eD a! ?a$i)e, i# i) %ishes. The
eDercise o# )his "reroga)i&e $ies %i)h )he 4Dec()i&e De"ar)*e!) o&er %hich
co(r)s %i$$ !o) i!)er#ere.
No! L#,$%%+! Dece()e* +'- 1'&<!H
THE D/RECTOR OF LANDS- 8etitione*- vs! /NTERMED/ATE A44ELLATE CO6RT and ACME
4LYCOOD J ENEER CO! /NC!- ETC!- *es8ondents!
FACTS:
The Direc)or o# La!s has +ro(gh) )his a""ea$ +, cer)iorari #ro* a C(g*e!) o# )he
3!)er*eia)e A""e$$a)e Co(r) a##ir*i!g a ecisio! o# )he Co(r) o# Firs) 3!s)a!ce o# 3sa+e$a,
%hich orere regis)ra)io! i! #a&or o# Ac*e /$,%oo H >e!eer Co., 3!c. o# #i&e "arce$s o# $a!
*eas(ri!g 981, 390 s'(are *e)ers, *ore or $ess, ac'(ire +, i) #ro* .aria!o a! Acer 3!#ie$,
*e*+ers o# )he D(*aga) )ri+e.
The $a! s(+Cec)s o# )he La! Regis)ra)io! "roceei!gs %as a!ces)ra$$, ac'(ire +, Ac*e
/$,%oo H >e!eer Co., 3!c., o! 6c)o+er 29, 1982, #ro* .aria!o 3!#ie$ a! Acer 3!#ie$, +o)h
*e*+ers o# )he D(*aga) )ri+e a! as s(ch are c($)(ra$ *i!ori)ies.
3SS-4:
5he)her or !o) )he )i)$e )ha) )he 3!#ie$s ha )ra!s#erre )o Ac*e i! 1982 co($ +e co!#ir*e i!
#a&or o# )he $a))er i! "roceei!gs i!s)i)()e +, i) i! 1981 %he! )he 1973 Co!s)i)()io! %as
a$rea, i! e##ec), ha&i!g i! *i! )he "rohi+i)io! )herei! agai!s) "ri&a)e cor"ora)io!s ho$i!g
$a!s o# )he "(+$ic o*ai! eDce") i! $ease !o) eDceei!g 1,000 hec)ares.
R-L3NG:
The correc) r($e, is )ha) a$ie!a+$e "(+$ic $a! he$ +, a "ossessor, "erso!a$$, or )hro(gh his
"reecessors-i!-i!)eres), o"e!$,, co!)i!(o(s$, a! eDc$(si&e$, #or )he "rescri+e s)a)()or,
"erio :30 ,ears (!er The /(+$ic La! Ac), as a*e!e< is co!&er)e )o "ri&a)e "ro"er), +,
)he *ere $a"se or co*"$e)io! o# sai "erio, i"so C(re.
Fo$$o%i!g )ha) r($e a! o! )he +asis o# )he (!is"()e #ac)s, )he $a! s(+Cec) o# )his a""ea$
%as a$rea, "ri&a)e "ro"er), a) )he )i*e i) %as ac'(ire #ro* )he 3!#ie$s +, Ac*e. Ac*e
)here+, ac'(ire a regis)ra+$e )i)$e, )here +ei!g a) )he )i*e !o "rohi+i)io! agai!s) sai
cor"ora)io!Ks ho$i!g or o%!i!g "ri&a)e $a!.
504R4F6R4, )here +ei!g !o re&ersi+$e error i! )he a""ea$e C(g*e!) o# )he 3!)er*eia)e
A""e$$a)e Co(r), )he sa*e is here+, a##ir*e.
C;ave3 v 40)1ic Estate A0t;o*it> GR No! 1$$+7%- 501> '- +%%+
Fac)s:
6! No&e*+er 20, 1973, )he go&er!*e!) )hro(gh )he Co**issio!er o# /(+$ic 0igh%a,s sig!e a
co!)rac) %i)h )he Co!s)r(c)io! a! De&e$o"*e!) Cor"ora)io! o# )he /hi$i""i!es :CDC/< )o rec$ai*
cer)ai! #oreshore a! o##shore areas o# .a!i$a ?a,. The co!)rac) a$so i!c$(e )he co!s)r(c)io! o#
/hases 3 a! 33 o# )he .a!i$a-Ca&i)e Coas)a$ Roa. CDC/ o+$iga)e i)se$# )o carr, o() a$$ )he %or2s i!
co!siera)io! o# #i#), "erce!) o# )he )o)a$ rec$ai*e $a!.
6! A"ri$ 2=, 199= )he /4A e!)ere i!)o a 7oi!) >e!)(re Agree*e!) :7>A< %i)h A.AR3 )o e&e$o" )he
Freeo* 3s$a!s. This 7>A %as e!)ere i!)o )hro(gh !ego)ia)io! %i)ho() "(+$ic +ii!g.
The Se!a)e Co**i))ee o! Go&er!*e!) Cor"ora)io!s a! /(+$ic 4!)er"rises, a! )he Co**i))ee o!
Acco(!)a+i$i), o# /(+$ic 6##icers a! 3!&es)iga)io!s, co!(c)e a Coi!) i!&es)iga)io!. A*o!g )he
co!c$(sio! are: )ha) )he rec$ai*e $a!s /4A see2s )o )ra!s#er )o A.AR3 (!er )he 7>A are $a!s o#
)he "(+$ic o*ai! %hich )he go&er!*e!) has !o) c$assi#ie as a$ie!a+$e $a!s a! )here#ore /4A
ca!!o) a$ie!a)e )hese $a!s, )he cer)i#ica)es o# )he )i)$e co&eri!g )he Freeo* 3s$a!s are )h(s &oi,
a! )he 7>A i)se$# is i$$ega$.
6! Dece*+er =, 1997, /resie!) Ra*os crea)e a Lega$ Tas2 Force )o co!(c) a s)(, o! )he
$ega$i), o# )he 7>A. The Tas2 Force ("he$ )he $ega$i), o# )he 7>A, co!)rar, )o )he co!c$(sio!s o# )he
Se!a)e Co**i))ees.
6! A"ri$ 27, 1998, /e)i)io!er as )aD"a,er #i$e )he i!s)a!) "e)i)io! #or *a!a*(s %i)h "ra,er #or )he
iss(a!ce o# a %ri) o# "re$i*i!ar, i!C(!c)io! a! TR6. /e)i)io!er co!)e!s )he go&er!*e!) s)a!s )o
$ose +i$$io!s o# "esos i! )he sa$e +, /4A o# )he rec$ai*e $a!s )o A.AR3. /e)i)io!er "ra,s )ha) /4A
"(+$ic$, isc$ose )he )er*s o# a!, re!ego)ia)io! o# )he 7>A. F(r)her*ore, "e)i)io!er assai$s )he sa$e )o
A.AR3 o# $a!s o# )he "(+$ic o*ai!s as +$a)a!) &io$a)io! o# Sec 3, Ar) I33 o# )he Co!s)i)()io!
"rohi+i)i!g )he sa$e o# a$ie!a+$e $a!s o# )he "(+$ic o*ai! )o "ri&a)e cor"ora)io!s. /e)i)io!er asser)
)ha) he see2s )o e!Coi! )he $oss o# +i$$io! o# "esos i! "ro"er)ies o# )he S)a)e )ha) are o# "(+$ic
o*i!io!.
3ss(e:
5he)her or !o) )he "e)i)io!er has $ega$ s)a!i!g )o +ri!g )he s(i).
Ra)io Decie!i:
The "e)i)io!er has s)a!i!g )o +ri!g )he )aD"a,erFs s(i) +eca(se )he "e)i)io! see2s )o co*"e$ /4A )o
co*"$, %i)h i)s co!s)i)()io!a$ ()ies. This ()ies are "ar)ic($ar$, i! a!s%er o# )he righ) o# ci)iGe!s )o
i!#or*a)io! o! *a))ers o# "(+$ic co!cer!, a! o# a co!s)i)()io!a$ "ro&isio! i!)e!e )o i!s(re )he
e'(i)a+$e is)ri+()io! o# a$ie!a+$e $a!s o# )he "(+$ic o*ai! a*o!g Fi$i"i!o ci)iGe!s. F(r)her*ore, )he
co(r) co!siere )ha) )he "e)i)io! raise *a))ers o# )ra!sce!e!)a$ i*"or)a!ce )o) eh "(+$ic. The *ere
#ac) )ha) )he "e)i)io!er is a ci)iGe! sa)is#ies )he re'(ire*e!) o# "erso!a$ i!)eres) %he! )he "roceei!g
i!&o$&es )he asser)io! o# a "(+$ic righ). A$so, ori!ar, )aD"a,ers ha&e a righ) )o i!i)ia)e a! "rosec()e
ac)io!s '(es)io!i!g )he &a$ii), o# ac)s or orers o# go&er!*e!) age!cies or i!s)r(*e!)a$i)ies i# )he
iss(es raise are o# "ara*o(!) "(+$ic i!)eres) a! i# )he, i**eia)e$, a##ec) )he socia$, eco!o*ic a!
*ora$ %e$$ +ei!g o# )he "eo"$e.
The a*e!e 7>A oes !o) *a2e )he iss(e *oo) a! acae*ic si!ce )his co*"e$s )he co(r) )o i!s(re
)he go&er!*e!) i)se$# oes !o) &io$a)e a "ro&isio! o# )he Co!s)i)()io! i!)e!e )o sa#eg(ar )he
!a)io!a$ "a)ri*o!,. The co!)e!) o# )he a*e!e 7>A see2s )o )ra!s#er )i)$e a! o%!ershi" o#
rec$ai*e $a!s )o a si!g$e cor"ora)io!. The co(r) oes !o) hesi)a)e )o reso$&e )he $ega$ or
co!s)i)()io!a$ iss(es raise )o #or*($a)e co!)ro$$i!g "ri!ci"$es )o g(ie )he +e!ch, +ar a! )he "(+$ic.
The i!s)a!) case raises co!s)i)()io!a$ iss(es o# )ra!sce!e!)a$ i*"or)a!ce )o )he "(+$ic. Co(r) ca!
reso$&e )his case %i)ho() e)er*i!i!g a!, #ac)(a$ iss(e re$a)e )o )he case. The i!s)a!) case is a
"e)i)io! #or *a!a*(s %hich #a$$s (!er )he origi!a$ C(risic)io! o# )he Co(r). F(r)her*ore, /4A %as
(!er a "osi)i&e $ega$ (), )o isc$ose )o )he "(+$ic )he )er*s a! co!i)io!s #or )he sa$e o# i)s $a!s.
The "ri!ci"$e o# eDha(s)io! o# a*i!is)ra)i&e re*eies oes !o) a""$, %he! )he iss(e i!&o$&e is
"(re$, $ega$ or co!s)i)()io!a$ '(es)io!.
The righ) )o i!#or*a)io! i!c$(es o##icia$ i!#or*a)io! o! o!-goi!g !ego)ia)io!s +e#ore a #i!a$ agree*e!)
as re'(ire +, )he co!s)i)()io!.
The S("re*e Co(r) gra!)e )he "e)i)io!. /4A a! A*ari Coas)a$ ?a, De&e$o"*e!) Cor"ora)io! are
"er*a!e!)$, e!Coi!e #ro* i*"$e*e!)i!g )he a*e!e 7>A %hich is here+, ec$are !($$ a! &oi a+
i!i)io.
Sec!= S8eci:ic Li(its o: Fo*est 1ands and Nationa1 4a*k
LA 96GAL#9@LAAN vs DENR Dec! 1- +%%=
LA 96GAL#9@LAAN vs DENR 5an! +1- +%%=
Sec!7 Ancest*a1 Lands and Do(ain
C*03 vs! DENR
Section <: Co((on Goods
AG!R! No! 1$+'++! A8*i1 +1- 1''&B
TELECOMM6N/CAT/ONS AND 9ROADCAST ATTORNEYS OF THE 4H/L/44/NES- /NC! and GMA
NETCORK- /NC!- petitioners, vs. THE COMM/SS/ON ON ELECT/ONS- respondent!
D E C / S / O N
MENDO?A- J!:
3! 7sme8a v( C7-9L9C, G.R. No. 132231, ecie .arch 31, 1998,
T1U
%e ("he$ )he &a$ii), o#
[11:+< o# R.A. No. 8898 %hich "rohi+i)s )he sa$e or o!a)io! o# "ri!) s"ace or air )i*e #or "o$i)ica$ as,
eDce") )o )he Co**issio! o! 4$ec)io!s (!er [90, o# ?./. No. 881, )he 6*!i+(s 4$ec)io! Coe, %i)h
res"ec) )o "ri!) *eia, a! [92, %i)h res"ec) )o +roacas) *eia. 3! )he "rese!) case, %e co!sier
)he &a$ii), o# [92 o# ?./. ?$g. No. 881 agai!s) c$ai*s )ha) )he re'(ire*e!) )ha) raio a! )e$e&isio!
)i*e +e gi&e! #ree )a2es "ro"er), %i)ho() (e "rocess o# $a%P )ha) i) &io$a)es )he e*i!e!) o*ai!
c$a(se o# )he Co!s)i)()io! %hich "ro&ies #or )he "a,*e!) o# C(s) co*"e!sa)io!P )ha) i) e!ies
+roacas) *eia )he e'(a$ "ro)ec)io! o# )he $a%sP a! )ha), i! a!, e&e!), i) &io$a)es )he )er*s o# )he
#ra!chise o# "e)i)io!er G.A Ne)%or2, 3!c.
/e)i)io!er Te$eco**(!ica)io!s a! ?roacas) A))or!e,s o# )he /hi$i""i!es, 3!c. is a! orga!iGa)io! o#
$a%,ers o# raio a! )e$e&isio! +roacas)i!g co*"a!ies. The, are s(i!g as ci)iGe!s, )aD"a,ers, a!
regis)ere &o)ers. The o)her "e)i)io!er, G.A Ne)%or2, 3!c., o"era)es raio a! )e$e&isio!
+roacas)i!g s)a)io!s )hro(gho() )he /hi$i""i!es (!er a #ra!chise gra!)e +, Co!gress.
/e)i)io!ers cha$$e!ge )he &a$ii), o# [92 o! )he gro(! :1< )ha) i) )a2es "ro"er), %i)ho() (e "rocess o#
$a% a! %i)ho() C(s) co*"e!sa)io!P :2< )ha) i) e!ies raio a! )e$e&isio! +roacas) co*"a!ies )he
e'(a$ "ro)ec)io! o# )he $a%sP a! :3< )ha) i) is i! eDcess o# )he "o%er gi&e! )o )he C6.4L4C )o
s("er&ise or reg($a)e )he o"era)io! o# *eia o# co**(!ica)io! or i!#or*a)io! (ri!g )he "erio o#
e$ec)io!.
The Question of Standing
A) )he )hresho$ o# )his s(i) is )he '(es)io! o# s)a!i!g o# "e)i)io!er Te$eco**(!ica)io!s a!
?roacas) A))or!e,s o# )he /hi$i""i!es, 3!c. :T4L4?A/<. As a$rea, !o)e, i)s *e*+ers asser) a!
i!)eres) as $a%,ers o# raio a! )e$e&isio! +roacas)i!g co*"a!ies a! as ci)iGe!s, )aD"a,ers, a!
regis)ere &o)ers.
3! )hose cases
T2U
i! %hich ci)iGe!s %ere a()horiGe )o s(e, )his Co(r) ("he$ )heir s)a!i!g i! &ie% o#
)he M)ra!sce!e!)a$ i*"or)a!ceN o# )he co!s)i)()io!a$ '(es)io! raise %hich C(s)i#ie )he gra!)i!g o#
re$ie#. 3! co!)ras), i! )he case a) +ar, as %i$$ "rese!)$, +e sho%!, "e)i)io!ersF s(+s)a!)i&e c$ai* is
%i)ho() *eri). To )he eD)e!), )here#ore, )ha) a "ar),Fs s)a!i!g is e)er*i!e +, )he s(+s)a!)i&e *eri)
o# his case or a "re$i*i!ar, es)i*a)e )hereo#, "e)i)io!er T4L4?A/ *(s) +e he$ )o +e %i)ho()
s)a!i!g. 3!ee, a ci)iGe! %i$$ +e a$$o%e )o raise a co!s)i)()io!a$ '(es)io! o!$, %he! he ca! sho%
)ha) he has "erso!a$$, s(##ere so*e ac)(a$ or )hrea)e!e i!C(r, as a res($) o# )he a$$ege$, i$$ega$
co!(c) o# )he go&er!*e!)P )he i!C(r, is #air$, )racea+$e )o )he cha$$e!ge ac)io!P a! )he i!C(r, is
$i2e$, )o +e reresse +, a #a&ora+$e ac)io!.
T3U
.e*+ers o# "e)i)io!er ha&e !o) sho%! )ha) )he, ha&e
s(##ere har* as a res($) o# )he o"era)io! o# [92 o# ?./. ?$g. 881.
Nor o *e*+ers o# "e)i)io!er T4L4?A/ ha&e a! i!)eres) as regis)ere &o)ers si!ce )his case oes
!o) co!cer! )heir righ) o# s(##rage. Their i!)eres) i! [92 o# ?./. ?$g. 881 sho($ +e "recise$, i!
("ho$i!g i)s &a$ii),.
.(ch $ess o )he, ha&e a! i!)eres) as )aD"a,ers si!ce )his case oes !o) i!&o$&e )he eDercise +,
Co!gress o# i)s )aDi!g or s"e!i!g "o%er.
T9U
A "ar), s(i!g as a )aD"a,er *(s) s"eci#ica$$, sho% )ha) he
has a s(##icie!) i!)eres) i! "re&e!)i!g )he i$$ega$ eD"e!i)(re o# *o!e, raise +, )aDa)io! a! )ha) he
%i$$ s(s)ai! a irec) i!C(r, as a res($) o# )he e!#orce*e!) o# )he '(es)io!e s)a)()e.
Nor i!ee as a cor"ora)e e!)i), oes T4L4?A/ ha&e s)a!i!g )o asser) )he righ)s o# raio a!
)e$e&isio! +roacas)i!g co*"a!ies. S)a!i!g :us tertii %i$$ +e recog!iGe o!$, i# i) ca! +e sho%! )ha)
)he "ar), s(i!g has so*e s(+s)a!)ia$ re$a)io! )o )he )hir "ar),, or )ha) )he )hir "ar), ca!!o) asser) his
co!s)i)()io!a$ righ), or )ha) )he righ) o# )he )hir "ar), %i$$ +e i$()e (!$ess )he "ar), i! co(r) is a$$o%e
)o es"o(se )he )hir "ar),Fs co!s)i)()io!a$ c$ai*. No!e o# )hese circ(*s)a!ces is here "rese!). The
*ere #ac) )ha) T4L4?A/ is co*"ose o# $a%,ers i! )he +roacas) i!(s)r, oes !o) e!)i)$e )he* )o
+ri!g )his s(i) i! )heir !a*e as re"rese!)a)i&es o# )he a##ec)e co*"a!ies.
Ne&er)he$ess, %e ha&e ecie )o )a2e )his case si!ce )he o)her "e)i)io!er, G.A Ne)%or2, 3!c.,
a""ears )o ha&e )he re'(isi)e s)a!i!g )o +ri!g )his co!s)i)()io!a$ cha$$e!ge. /e)i)io!er o"era)es raio
a! )e$e&isio! +roacas) s)a)io!s i! )he /hi$i""i!es a##ec)e +, )he e!#orce*e!) o# [92 o# ?./. ?$g.
881 re'(iri!g raio a! )e$e&isio! +roacas) co*"a!ies )o "ro&ie #ree air )i*e )o )he C6.4L4C #or
)he (se o# ca!ia)es #or ca*"aig! a! o)her "o$i)ica$ "(r"oses.
/e)i)io!er c$ai*s )ha) i) s(##ere $osses r(!!i!g )o se&era$ *i$$io! "esos i! "ro&ii!g C6.4L4C Ti*e
i! co!!ec)io! %i)h )he 1992 "resie!)ia$ e$ec)io! a! )he 199= se!a)oria$ e$ec)io! a! )ha) i) s)a!s )o
s(##er e&e! *ore sho($ i) +e re'(ire )o o so agai! )his ,ear. /e)i)io!erFs a$$ega)io! )ha) i) %i$$ s(##er
$osses agai! +eca(se i) is re'(ire )o "ro&ie #ree air )i*e is s(##icie!) )o gi&e i) s)a!i!g )o '(es)io!
)he &a$ii), o# [92.
T=U
Ai*ing o: COMELEC Ti(e- a
Reasona)1e Condition :o*
G*ant o: 4etitione*Ks
F*anc;ise
As "oi!)e o() i! o(r ecisio! i! 7sme8a v( C7-9L9C, [11:+< o# R.A. No. 8898 a! [90 a! [92 o#
?./. ?$g. 881 are "ar) a! "arce$ o# a reg($a)or, sche*e esig!e )o e'(a$iGe )he o""or)(!i), o#
ca!ia)es i! a! e$ec)io! i! regar )o )he (se o# *ass *eia #or "o$i)ica$ ca*"aig!s. These s)a)()or,
"ro&isio!s s)a)e i! re$e&a!) "ar)s:
R.A. No. 8898
S4C. 11. 1ro$i"ited 0orms of 9lection 1ropaganda. - 3! ai)io! )o )he #or*s o# e$ec)io! "ro"aga!a
"rohi+i)e (!er Sec)io! 8= o# ?a)as /a*+a!sa ?$g. 881, i) sha$$ +e (!$a%#($:
. . . .
:+< #or a!, !e%s"a"ers, raio +roacas)i!g or )e$e&isio! s)a)io!, or o)her *ass *eia, or a!, "erso!
*a2i!g (se o# )he *ass *eia )o se$$ or )o gi&e #ree o# charge "ri!) s"ace or air )i*e #or ca*"aig! or
o)her "o$i)ica$ "(r"oses eDce") )o )he Co**issio! as "ro&ie (!er Sec)io! 90 a! 92 o# ?a)as
/a*+a!sa ?$g. 881. A!, *ass *eia co$(*!is), co**e!)a)or, a!!o(!cer or "erso!a$i), %ho is a
ca!ia)e #or a!, e$ec)i&e "(+$ic o##ice sha$$ )a2e a $ea&e o# a+se!ce #ro* his %or2 as s(ch (ri!g )he
ca*"aig! "erio.
?./. ?$g. 881, :6*!i+(s 4$ec)io! Coe<
S4C. 90. Comelec space. - The Co**issio! sha$$ "roc(re s"ace i! a) $eas) o!e !e%s"a"er o#
ge!era$ circ($a)io! i! e&er, "ro&i!ce or ci),: 1rovided, $owever, Tha) i! )he a+se!ce o# sai
!e%s"a"er, "(+$ica)io! sha$$ +e o!e i! a!, o)her *agaGi!e or "erioica$ i! sai "ro&i!ce or ci),,
%hich sha$$ +e 2!o%! as MCo*e$ec S"aceN %herei! ca!ia)es ca! a!!o(!ce )heir ca!iac,. Sai
s"ace sha$$ +e a$$oca)e, #ree o# charge, e'(a$$, a! i*"ar)ia$$, +, )he Co**issio! a*o!g a$$
ca!ia)es %i)hi! )he area i! %hich )he !e%s"a"er is circ($a)e. :Sec. 9=, 1978 4C<.
S4C. 92. Comelec time. - The Co**issio! sha$$ "roc(re raio a! )e$e&isio! )i*e )o +e 2!o%! as
MCo*e$ec Ti*eN %hich sha$$ +e a$$oca)e e'(a$$, a! i*"ar)ia$$, a*o!g )he ca!ia)es %i)hi! )he area
o# co&erage o# a$$ raio a! )e$e&isio! s)a)io!s. For )his "(r"ose, )he #ra!chise o# a$$ raio
+roacas)i!g a! )e$e&isio! s)a)io!s are here+, a*e!e so as )o "ro&ie raio or )e$e&isio! )i*e,
#ree o# charge, (ri!g )he "erio o# )he ca*"aig!. :Sec. 98, 1978 4C<
Th(s, )he $a% "rohi+i)s *ass *eia #ro* se$$i!g or o!a)i!g "ri!) s"ace a! air )i*e )o )he ca!ia)es
a! re'(ires )he C6.4L4C i!s)ea )o "roc(re "ri!) s"ace a! air )i*e #or a$$oca)io! )o )he
ca!ia)es. 3) %i$$ +e !o)e )ha) %hi$e [90 o# ?./. ?$g. 881 re'(ires )he C6.4L4C )o "roc(re "ri!)
s"ace %hich, as %e ha&e he$, sho($ +e "ai #or, [92 s)a)es )ha) air )i*e sha$$ +e "roc(re +, )he
C6.4L4C #ree o# charge.
/e)i)io!ers co!)e! )ha) [92 o# ?/ ?$g. 881 &io$a)es )he (e "rocess c$a(se
T8U
a! )he e*i!e!)
o*ai! "ro&isio!
T7U
o# )he Co!s)i)()io! +, )a2i!g air )i*e #ro* raio a! )e$e&isio!
+roacas)i!g s)a)io!s %i)ho() "a,*e!) o# C(s) co*"e!sa)io!. /e)i)io!ers c$ai* )ha) )he "ri*ar,
so(rce o# re&e!(e o# )he raio a! )e$e&isio! s)a)io!s is )he sa$e o# air )i*e )o a&er)isers a! )ha) )o
re'(ire )hese s)a)io!s )o "ro&ie #ree air )i*e is )o a()horiGe a )a2i!g %hich is !o) Ma e *i!i*is
)e*"orar, $i*i)a)io! or res)rai!) ("o! )he (se o# "ri&a)e "ro"er),.N Accori!g )o "e)i)io!ers, i! 1992,
)he G.A Ne)%or2, 3!c. $os) /22,998,=80.00 i! "ro&ii!g #ree air )i*e o# o!e :1< ho(r e&er, *or!i!g
#ro* .o!a,s )o Fria,s a! o!e :1< ho(r o! T(esa,s a! Th(rsa,s #ro* 7:00 )o 8:00 ".*. :"ri*e
)i*e< a!, i! )his ,earFs e$ec)io!s, i) s)a!s )o $ose /=8,980,8=0.00 i! &ie% o# C6.4L4CFs
re'(ire*e!) )ha) raio a! )e$e&isio! s)a)io!s "ro&ie a) $eas) 30 *i!()es o# "ri*e )i*e ai$, #or )he
C6.4L4C Ti*e.
T8U
/e)i)io!ersF arg(*e!) is %i)ho() *eri). A$$ +roacas)i!g, %he)her +, raio or +, )e$e&isio! s)a)io!s, is
$ice!se +, )he go&er!*e!). Air%a&e #re'(e!cies ha&e )o +e a$$oca)e as )here are *ore i!i&i(a$s
%ho %a!) )o +roacas) )ha! )here are #re'(e!cies )o assig!.
T9U
A #ra!chise is )h(s a "ri&i$ege s(+Cec),
a*o!g o)her )hi!gs, )o a*e!*e!) +, Co!gress i! accora!ce %i)h )he co!s)i)()io!a$ "ro&isio! )ha)
Ma!, s(ch #ra!chise or righ) gra!)e . . . sha$$ +e s(+Cec) )o a*e!*e!), a$)era)io! or re"ea$ +, )he
Co!gress %he! )he co**o! goo so re'(ires.N
T10U
The iea )ha) +roacas) s)a)io!s *a, +e re'(ire )o "ro&ie C6.4L4C Ti*e #ree o# charge is !o)
!e%. 3) goes +ac2 )o )he 4$ec)io! Coe o# 1971 :R.A. No. 8388<, %hich "ro&ie:
S4C. 99. Regulation of election propaganda t$roug$ mass media. - :a< The #ra!chises o# a$$ raio
+roacas)i!g a! )e$e&isio! s)a)io!s are here+, a*e!e so as )o re'(ire each s(ch s)a)io! )o #(r!ish
#ree o# charge, ("o! re'(es) o# )he Co**issio! To! 4$ec)io!sU, (ri!g )he "erio o# siD), a,s +e#ore
)he e$ec)io! !o) *ore )ha! #i#)ee! *i!()es o# "ri*e )i*e o!ce a %ee2 %hich sha$$ +e 2!o%! as
MCo*e$ec Ti*eN a! %hich sha$$ +e (se eDc$(si&e$, +, )he Co**issio! )o isse*i!a)e &i)a$ e$ec)io!
i!#or*a)io!. Sai MCo*e$ec Ti*eN sha$$ +e co!siere as "ar) o# )he "(+$ic ser&ice )i*e sai s)a)io!s
are re'(ire )o #(r!ish )he Go&er!*e!) #or )he isse*i!a)io! o# "(+$ic i!#or*a)io! a! e(ca)io!
(!er )heir res"ec)i&e #ra!chises or "er*i)s.
This "ro&isio! %as carrie o&er %i)h s$igh) *oi#ica)io! +, )he 1978 4$ec)io! Coe :/.D. No. 1298<,
%hich "ro&ie:
S4C. 98. C7-9L9C Time. - The Co**issio! To! 4$ec)io!sU sha$$ "roc(re raio a! )e$e&isio! )i*e
)o +e 2!o%! as MC6.4L4C Ti*eN %hich sha$$ +e a$$oca)e e'(a$$, a! i*"ar)ia$$, a*o!g )he
ca!ia)es %i)hi! )he area o# co&erage o# sai raio a! )e$e&isio! s)a)io!s. For )his "(r"ose, )he
#ra!chises o# a$$ raio +roacas)i!g a! )e$e&isio! s)a)io!s are here+, a*e!e so as )o re'(ire s(ch
s)a)io!s )o #(r!ish )he Co**issio! raio or )e$e&isio! )i*e, #ree o# charge, (ri!g )he "erio o# )he
ca*"aig!, a) $eas) o!ce +() !o) o#)e!er )ha! e&er, o)her a,.
S(+s)a!)ia$$, )he sa*e "ro&isio! is !o% e*+oie i! [92 o# ?./. ?$g. 881.
3!ee, "ro&isio!s #or C6.4L4C Ti*e ha&e +ee! *ae +, a*e!*e!) o# )he #ra!chises o# raio
a! )e$e&isio! +roacas) s)a)io!s a!, (!)i$ )he "rese!) case %as +ro(gh), s(ch "ro&isio!s ha !o)
+ee! )ho(gh) o# as )a2i!g "ro"er), %i)ho() C(s) co*"e!sa)io!. Ar). I33, [11 o# )he Co!s)i)()io!
a()horiGes )he a*e!*e!) o# #ra!chises #or M)he co**o! goo.N 5ha) +e))er *eas(re ca! +e
co!cei&e #or )he co**o! goo )ha! o!e #or #ree air )i*e #or )he +e!e#i) !o) o!$, o# ca!ia)es +()
e&e! *ore o# )he "(+$ic, "ar)ic($ar$, )he &o)ers, so )ha) )he, %i$$ +e #($$, i!#or*e o# )he iss(es i! a!
e$ec)io!R MT3U) is )he righ) o# )he &ie%ers a! $is)e!ers, !o) )he righ) o# )he +roacas)ers, %hich is
"ara*o(!).N
T11U
Nor i!ee ca! )here +e a!, co!s)i)()io!a$ o+Cec)io! )o )he re'(ire*e!) )ha) +roacas) s)a)io!s gi&e
#ree air )i*e. 4&e! i! )he -!i)e S)a)es, )here are res"o!si+$e scho$ars %ho +e$ie&e )ha) go&er!*e!)
co!)ro$s o! +roacas) *eia ca! co!s)i)()io!a$$, +e i!s)i)()e )o e!s(re i&ersi), o# &ie%s a!
a))e!)io! )o "(+$ic a##airs )o #(r)her )he s,s)e* o# #ree eD"ressio!. For )his "(r"ose, +roacas)
s)a)io!s *a, +e re'(ire )o gi&e #ree air )i*e )o ca!ia)es i! a! e$ec)io!.
T12U
Th(s, /ro#essor Cass R.
S(!s)ei! o# )he -!i&ersi), o# Chicago La% Schoo$, i! (rgi!g re#or*s i! reg($a)io!s a##ec)i!g )he
+roacas) i!(s)r,, %ri)es:
9lections. 5e co($ o a $o) )o i*"ro&e co&erage o# e$ec)ora$ ca*"aig!s. .os) i*"or)a!),
go&er!*e!) sho($ e!s(re #ree *eia )i*e #or ca!ia)es. A$*os) a$$ 4(ro"ea! !a)io!s *a2e s(ch
"ro&isio!P )he -!i)e S)a)es oes !o). /erha"s go&er!*e!) sho($ "a, #or s(ch )i*e o! i)s
o%!. /erha"s +roacas)ers sho($ ha&e )o o##er i) as a co!i)io! #or recei&i!g a $ice!se. /erha"s a
co**i)*e!) )o "ro&ie #ree )i*e %o($ co(!) i! #a&or o# )he gra!) o# a $ice!se i! )he #irs)
i!s)a!ce. S)e"s o# )his sor) %o($ si*($)a!eo(s$, "ro*o)e a))e!)io! )o "(+$ic a##airs a! grea)er
i&ersi), o# &ie%. The, %o($ a$so he$" o&erco*e )he is)or)i!g e##ec)s o# Mso(!+i)esN a! )he
corrosi&e #i!a!cia$ "ress(res #ace +, ca!ia)es i! see2i!g )i*e o! )he *eia.
T13U
3! )r()h, raio a! )e$e&isio! +roacas)i!g co*"a!ies, %hich are gi&e! #ra!chises, o !o) o%! )he
air%a&es a! #re'(e!cies )hro(gh %hich )he, )ra!s*i) +roacas) sig!a$s a! i*ages. The, are
*ere$, gi&e! )he )e*"orar, "ri&i$ege o# (si!g )he*. Si!ce a #ra!chise is a *ere "ri&i$ege, )he
eDercise o# )he "ri&i$ege *a, reaso!a+$, +e +(re!e %i)h )he "er#or*a!ce +, )he gra!)ee o# so*e
#or* o# "(+$ic ser&ice. Th(s, i! De ;illata v( Stanle%,
T19U
a reg($a)io! re'(iri!g i!)eris$a! &esse$s
$ice!se )o e!gage i! )he i!)eris$a! )rae )o carr, *ai$ a!, #or )his "(r"ose, )o gi&e a&a!ce !o)ice
)o "os)a$ a()hori)ies o# a)e a! ho(r o# sai$i!gs o# &esse$s a! o# cha!ges o# sai$i!g ho(rs )o e!a+$e
)he* )o )e!er *ai$ #or )ra!s"or)a)io! a) )he $as) "rac)ica+$e ho(r "rior )o )he &esse$Fs e"ar)(re, %as
he$ )o +e a reaso!a+$e co!i)io! #or )he s)a)e gra!) o# $ice!se. A$)ho(gh )he '(es)io! o#
co*"e!sa)io! #or )he carriage o# *ai$ %as !o) i! iss(e, )he Co(r) s)ro!g$, i*"$ie )ha) s(ch ser&ice
co($ +e %i)ho() co*"e!sa)io!, as i! #ac) (!er S"a!ish so&ereig!), )he *ai$ %as carrie #ree.
T1=U
3! 1$ilippine Long Distance Telep$one Compan% v( NTC,
T18U
)he Co(r) orere )he /LDT )o a$$o% )he
i!)erco!!ec)io! o# i)s o*es)ic )e$e"ho!e s,s)e* %i)h )he i!)er!a)io!a$ ga)e%a, #aci$i), o# 4as)er!
Te$eco*. The Co(r) ci)e :1< )he "ro&isio!s o# )he $egis$a)i&e #ra!chise a$$o%i!g s(ch i!)erco!!ec)io!P
:2< )he a+se!ce o# a!, "h,sica$, )ech!ica$, or eco!o*ic +asis #or res)ric)i!g )he $i!2i!g (" o# )%o
se"ara)e )e$e"ho!e s,s)e*sP a! :3< )he "ossi+i$i), o# i!crease i! )he &o$(*e o# i!)er!a)io!a$ )ra##ic
a! *ore e##icie!) ser&ice, a) *ore *oera)e cos), as a res($) o# i!)erco!!ec)io!.
Si*i$ar$,, i! )he ear$ier case o# 1LDT v( NTC,
T17U
i) %as he$:
S(ch reg($a)io! o# )he (se a! o%!ershi" o# )e$eco**(!ica)io!s s,s)e*s is i! )he eDercise o# )he
"$e!ar, "o$ice "o%er o# )he S)a)e #or )he "ro*o)io! o# )he ge!era$ %e$#are. The 1987 Co!s)i)()io!
recog!iGes )he eDis)e!ce o# )ha) "o%er %he! i) "ro&ies:
MSec. 8. The (se o# "ro"er), +ears a socia$ #(!c)io!, a! a$$ eco!o*ic age!)s sha$$ co!)ri+()e )o )he
co**o! goo. 3!i&i(a$s a! "ri&a)e gro("s, i!c$(i!g cor"ora)io!s, coo"era)i&es, a! si*i$ar
co$$ec)i&e orga!iGa)io!s, sha$$ ha&e )he righ) )o o%!, es)a+$ish, a! o"era)e eco!o*ic e!)er"rises,
s(+Cec) )o )he (), o# )he S)a)e )o "ro*o)e is)ri+()i&e C(s)ice a! )o i!)er&e!e %he! )he co**o!
goo so e*a!sN :Ar)ic$e I33<.
The i!)erco!!ec)io! %hich has +ee! re'(ire o# /LDT is a #or* o# Mi!)er&e!)io!N %i)h "ro"er), righ)s
ic)a)e +, M)he o+Cec)i&e o# go&er!*e!) )o "ro*o)e )he ra"i eD"a!sio! o# )e$eco**(!ica)io!s
ser&ices i! a$$ areas o# )he /hi$i""i!es, . . . )o *aDi*iGe )he (se o# )e$eco**(!ica)io!s #aci$i)ies
a&ai$a+$e, . . . i! recog!i)io! o# )he &i)a$ ro$e o# co**(!ica)io!s i! !a)io! +(i$i!g . . . a! to ensure
t$at all users of t$e pu"lic telecommunications service $ave access to all ot$er users of t$e service
w$erever t$e% ma% "e wit$in t$e 1$ilippines at an accepta"le standard of service and at reasona"le
costN :D6TC Circ($ar No. 90-298<. -!o(+)e$,, )he e!co*"assi!g o+Cec)i&e is )he co**o!
goo. The NTC, as )he reg($a)or, age!c, o# )he S)a)e, *ere$, eDercise i)s e$ega)e a()hori), )o
reg($a)e )he (se o# )e$eco**(!ica)io!s !e)%or2s %he! i) ecree i!)erco!!ec)io!.
3! )he gra!)i!g o# )he "ri&i$ege )o o"era)e +roacas) s)a)io!s a! )herea#)er s("er&isi!g raio a!
)e$e&isio! s)a)io!s, )he s)a)e s"e!s co!siera+$e "(+$ic #(!s i! $ice!si!g a! s("er&isi!g s(ch
s)a)io!s.
T18U
3) %o($ +e s)ra!ge i# i) ca!!o) e&e! re'(ire )he $ice!sees )o re!er "(+$ic ser&ice +,
gi&i!g #ree air )i*e.
Co!siera+$e e##or) is *ae i! )he isse!) o# .r. 7(s)ice /a!ga!i+a! )o sho% )ha) )he "ro(c)io! o#
)e$e&isio! "rogra*s i!&o$&es $arge eD"e!i)(re a! re'(ires )he (se o# e'(i"*e!) #or %hich h(ge
i!&es)*e!)s ha&e )o +e *ae. The isse!) ci)es )he c$ai* o# G.A Ne)%or2 )ha) )he gra!) o# #ree air
)i*e )o )he C6.4L4C #or )he (ra)io! o# )he 1998 ca*"aig! "erio %o($ cos) )he co*"a!,
/=2,380,000, re"rese!)i!g re&e!(e i) %o($ o)her%ise ear! i# )he air )i*e %ere so$ )o a&er)isers,
a! )he a*o(!) o# /8,800,8=0, re"rese!)i!g )he cos) o# "ro(ci!g a "rogra* #or )he C6.4L4C
Ti*e, or )he )o)a$ a*o(!) o# /=8,980,8=0.
The c$ai* )ha) "e)i)io!er %o($ +e $osi!g /=2,380,000 i! (!rea$iGe re&e!(e #ro* a&er)isi!g is
+ase o! )he ass(*")io! )ha) air )i*e is M#i!ishe "ro(c)N %hich, i) is sai, +eco*e )he "ro"er), o#
)he co*"a!,, $i2e oi$ "ro(ce #ro* re#i!i!g or si*i$ar !a)(ra$ reso(rces a#)er (!ergoi!g a "rocess
#or )heir "ro(c)io!. ?() air )i*e is !o) o%!e +, +roacas) co*"a!ies. As he$ i!Red Lion
#roadcasting Co( v( 0(C(C(,
T19U
%hich ("he$ )he righ) o# a "ar), "erso!a$$, a))ac2e )o re"$,, M$ice!ses
)o +roacas) o !o) co!#er o%!ershi" o# esig!a)e #re'(e!cies, +() o!$, )he )e*"orar, "ri&i$ege o#
(si!g )he*.N Co!se'(e!)$,, Ma $ice!se "er*i)s +roacas)i!g, +() )he $ice!see has !o co!s)i)()io!a$
righ) )o +e )he o!e %ho ho$s )he $ice!se or )o *o!o"o$iGe a raio #re'(e!c, )o )he eDc$(sio! o# his
#e$$o% ci)iGe!s. There is !o)hi!g i! )he Firs) A*e!*e!) %hich "re&e!)s )he Go&er!*e!) #ro*
re'(iri!g a $ice!see )o share his #re'(e!c, %i)h o)hers a! )o co!(c) hi*se$# as a "roD, or #i(ciar,
%i)h o+$iga)io!s )o "rese!) )hose &ie%s a! &oices %hich are re"rese!)a)i&e o# his co**(!i), a!
%hich %o($ o)her%ise, +, !ecessi),, +e +arre #ro* )he air%a&es.N
T20U
As raio a! )e$e&isio!
+roacas) s)a)io!s o !o) o%! )he air%a&es, !o "ri&a)e "ro"er), is )a2e! +, )he re'(ire*e!) )ha) )he,
"ro&ie air )i*e )o )he C6.4L4C.
7(s)ice /a!ga!i+a!Fs isse!) '(o)es #ro* To$e!)i!o o! )he Civil Code %hich sa,s )ha) M)he air $a!es
)he*se$&es Sare !o) "ro"er), +eca(se )he, ca!!o) +e a""ro"ria)e #or )he +e!e#i) o# a!, i!i&i(a$.FN
:".=< Tha) *ea!s !ei)her )he S)a)e !or )he s)a)io!s o%! )he air $a!es. Be) )he isse!) a$so sa,s )ha)
MThe #ra!chise ho$ers ca! reco&er )heir h(ge i!&es)*e!)s o!$, +, se$$i!g air )i*e )o a&er)isers.N :".
13< 3# air $a!es ca!!o) +e a""ro"ria)e, ho% ca! )he, +e (se )o "ro(ce air )i*e %hich )he #ra!chise
ho$ers ca! se$$ )o reco&er )heir i!&es)*e!)R There is a co!)raic)io! here.
As )o )he ai)io!a$ a*o(!) o# /8,800,8=0, i) is c$ai*e )ha) )his is )he cos) o# "ro(ci!g a "rogra*
a! i) is #or s(ch i)e*s as Mse)s a! "ro"s,N M&ieo )a"es,N M*isce$$a!eo(s :o)her re!)a$, s(""$ies,
)ra!s"or)a)io!, e)c.<,N a! M)ech!ica$ #aci$i)ies :)ech!ica$ cre% s(ch as irec)or a! ca*era*a! as %e$$
as So! air "$(gsF<.N There is !o +asis #or )his c$ai*. 4D"e!ses #or )hese i)e*s %i$$ +e #or )he acco(!)
o# )he ca!ia)es. C6.4L4C Reso$()io! No. 2983, [8:< s"eci#ica$$, "ro&ies i! )his co!!ec)io!:
:< Ai)io!a$ ser&ices s(ch as )a"e-recori!g or &ieo-)a"i!g o# "rogra*s, )he "re"ara)io! o# &is(a$
ais, )er*s a! co!i)io! )hereo#, a! )he co!siera)io! )o +e "ai )here#or *a, +e arra!ge +, )he
ca!ia)es %i)h )he raio@)e$e&isio! s)a)io! co!cer!e. 0o%e&er, !o raio@)e$e&isio! s)a)io! sha$$
*a2e a!, iscri*i!a)io! a*o!g ca!ia)es re$a)i&e )o charges, )er*s, "rac)ices or #aci$i)ies #or i!
co!!ec)io! %i)h )he ser&ices re!ere.
3) is (!#or)(!a)e )ha) i! )he e##or) )o sho% )ha) )here is )a2i!g o# "ri&a)e "ro"er), %or)h *i$$io!s o#
"esos, )he (!s(+s)a!)ia)e charge is *ae )ha) +, i)s ecisio! )he Co(r) "er*i)s )he Mgra! $arce!, o#
"recio(s )i*e,N a! a$$o%s i)se$# )o +eco*e M)he "eo"$eFs (!%i))i!g o""ressor.N The charge is rea$$,
(!#or)(!a)e. 3! &ac<man v( Rosen"aum Co(,
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7(s)ice 0o$*es %as so i!ce!se +, )he resis)a!ce o#
"ro"er), o%!ers )o )he erec)io! o# "ar), %a$$s )ha) he %as $e )o sa, i! his origi!a$ ra#), Ma s)a)()e,
%hich e*+oies )he co**(!i),Fs (!ers)a!i!g o# )he reci"roca$ righ)s a! ()ies o# !eigh+ori!g
$a!o%!ers, oes !o) !ee )o i!&o2e )he "e)), $arce!, o# )he "o$ice "o%er i! i)s
C(s)i#ica)io!.N 0o$*esFs +re)hre! correc)e his )as)e, a! 0o$*es ha )o a*e! )he "assage so )ha) i!
)he e! i) s"o2e o!$, o# i!&o2i!g M)he "o$ice "o%er.N
T22U
7(s)ice 0o$*es s"o2e o# )he M"e)), $arce!,N o#
)he "o$ice "o%er. No% %e are +ei!g )o$ o# )he Mgra! $arce!, T+, *ea!s o# )he "o$ice "o%erU o#
"recio(s air )i*e.N
Giving Free Air Time a Duty
Assumed by Petitioner
/e)i)io!ers c$ai* )ha) [92 is a! i!&a$i a*e!*e!) o# R.A. No. 72=2 %hich gra!)e G.A Ne)%or2,
3!c. a #ra!chise #or )he o"era)io! o# raio a! )e$e&isio! +roacas)i!g s)a)io!s. The, arg(e )ha)
a$)ho(gh [= o# R.A. No. 72=2 gi&es )he go&er!*e!) )he "o%er )o )e*"orari$, (se a! o"era)e )he
s)a)io!s o# "e)i)io!er G.A Ne)%or2 or )o a()horiGe s(ch (se a! o"era)io!, )he eDercise o# )his righ)
*(s) +e co*"e!sa)e.
The ci)e "ro&isio! o# R.A. No. 72=2 s)a)es:
S4C. =. Rig$t of /overnment. - A s"ecia$ righ) is here+, reser&e )o )he /resie!) o# )he /hi$i""i!es,
i! )i*es o# re+e$$io!, "(+$ic "eri$, ca$a*i),, e*erge!c,, isas)er or is)(r+a!ce o# "eace a! orer, )o
)e*"orari$, )a2e o&er a! o"era)e )he s)a)io!s o# )he gra!)ee, )o )e*"orari$, s(s"e! )he o"era)io! o#
a!, s)a)io! i! )he i!)eres) o# "(+$ic sa#e),, sec(ri), a! "(+$ic %e$#are, or )o a()horiGe )he )e*"orar,
(se a! o"era)io! )hereo# +, a!, age!c, o# )he Go&er!*e!), ("o! (e co*"e!sa)io! )o )he gra!)ee,
#or )he (se o# sai s)a)io!s (ri!g )he "erio %he! )he, sha$$ +e so o"era)e.
The +asic #$a% i! "e)i)io!erFs arg(*e!) is )ha) i) ass(*es )ha) )he "ro&isio! #or C6.4L4C Ti*e
co!s)i)()es )he (se a! o"era)io! o# )he s)a)io!s o# )he G.A Ne)%or2, 3!c. This is !o) so. -!er [92
o# ?./. ?$g. 881, )he C6.4L4C oes !o) )a2e o&er )he o"era)io! o# raio a! )e$e&isio! s)a)io!s +()
o!$, )he a$$oca)io! o# air )i*e )o )he ca!ia)es #or )he "(r"ose o# e!s(ri!g, a*o!g o)her )hi!gs, e'(a$
o""or)(!i),, )i*e, a! )he righ) )o re"$, as *a!a)e +, )he Co!s)i)()io!.
T23U
3!ee, i) is %ro!g )o c$ai* a! a*e!*e!) o# "e)i)io!erFs #ra!chise #or )he reaso! )ha) ?./. ?$g. 881,
%hich is sai )o ha&e a*e!e R.A. No. 72=2, ac)(a$$, a!)ea)e i).
T29U
The "ro&isio! o# [92 o# ?./.
?$g. 881 *(s) +e ee*e i!s)ea )o +e i!cor"ora)e i! R.A. No. 72=2. A!, i!ee, [9 o# )he $a))er
s)a)()e oes.
For )he #ac) is )ha) )he (), i*"ose o! )he G.A Ne)%or2, 3!c. +, i)s #ra!chise )o re!er Mae'(a)e
"(+$ic ser&ice )i*eN i*"$e*e!)s [92 o# ?./. ?$g. 881. -!o(+)e$,, i)s "(r"ose is )o e!a+$e )he
go&er!*e!) )o co**(!ica)e %i)h )he "eo"$e o! *a))ers o# "(+$ic i!)eres). Th(s, R.A. No. 72=2
"ro&ies:
S4C. 9. Responsi"ilit% to t$e 1u"lic. - The gra!)ee sha$$ "ro&ie ae'(a)e "(+$ic ser&ice )i*e )o
e!a+$e )he Go&er!*e!), )hro(gh )he sai +roacas)i!g s)a)io!s, )o reach )he "o"($a)io! o! i*"or)a!)
"(+$ic iss(esP "ro&ie a) a$$ )i*es so(! a! +a$a!ce "rogra**i!gP "ro*o)e "(+$ic "ar)ici"a)io!
s(ch as i! co**(!i), "rogra**i!gP assis) i! )he #(!c)io!s o# "(+$ic i!#or*a)io! a! e(ca)io!P
co!#or* )o )he e)hics o# ho!es) e!)er"riseP a! !o) (se i)s s)a)io! #or )he +roacas)i!g o# o+sce!e a!
i!ece!) $a!g(age, s"eech, ac) or sce!e, or #or )he isse*i!a)io! o# e$i+era)e$, #a$se i!#or*a)io! or
%i$$#($ *isre"rese!)a)io!, or )o )he e)ri*e!) o# )he "(+$ic i!)eres), or )o i!ci)e, e!co(rage, or assis) i!
s(+&ersi&e or )reaso!a+$e ac)s. :4*"hasis ae<
3) is !o)e%or)h, )ha) [99 o# R.A. No. 8388, #ro* %hich [92 o# ?./. ?$g. 881 %as )a2e!, eD"ress$,
"ro&ie )ha) )he C6.4L4C Ti*e sho($ M+e co!siere as "ar) o# )he "(+$ic ser&ice )i*e sai
s)a)io!s are re'(ire )o #(r!ish )he Go&er!*e!) #or )he isse*i!a)io! o# "(+$ic i!#or*a)io! a!
e(ca)io! (!er )heir res"ec)i&e #ra!chises or "er*i)s.N There is !o reaso! )o s(""ose )ha) [92 o#
?./. ?$g. 881 co!siers )he C6.4L4C Ti*e )herei! "ro&ie )o +e o)her%ise )ha! as a "(+$ic ser&ice
%hich "e)i)io!er is re'(ire )o re!er (!er [9 o# i)s char)er :R.A. No. 72=2<. 3! s(*, ?./. ?$g. 881,
[92 is !o) a! i!&a$i a*e!*e!) o# "e)i)io!erFs #ra!chise +() )he e!#orce*e!) o# a (), &o$(!)ari$,
ass(*e +, "e)i)io!er i! acce")i!g a "(+$ic gra!) o# "ri&i$ege.
Th(s #ar, %e ha&e co!#i!e )he isc(ssio! )o )he "ro&isio! o# [92 o# ?./. ?$g. 881 #or #ree air )i*e
%i)ho() )a2i!g i!)o acco(!) C6.4L4C Reso$()io! No. 2983-A, [2 o# %hich s)a)es:
S4C. 2. /rant of =Comelec Time(> - 4&er, raio +roacas)i!g a! )e$e&isio! s)a)io! o"era)i!g (!er
#ra!chise sha$$ gra!) )he Co**issio!, ("o! "a,*e!) o# C(s) co*"e!sa)io!, a) $eas) )hir), :30< *i!()es
o# "ri*e )i*e ai$,, )o +e 2!o%! as MCo*e$ec Ti*eN, e##ec)i&e Fe+r(ar, 10, 1998 #or ca!ia)es #or
/resie!), >ice-/resie!) a! Se!a)ors, a! e##ec)i&e .arch 27, 1998, #or ca!ia)es #or $oca$
e$ec)i&e o##ices, (!)i$ .a, 9, 1998. :4*"hasis ae<
This is +eca(se )he a*e!*e!) "ro&ii!g #or )he "a,*e!) o# MC(s) co*"e!sa)io!N is i!&a$i, +ei!g i!
co!)ra&e!)io! o# [92 o# ?./. ?$g. 881 )ha) raio a! )e$e&isio! )i*e gi&e! (ri!g )he "erio o# )he
ca*"aig! sha$$ +e M#ree o# charge.N 3!ee, Reso$()io! No. 2983 origi!a$$, "ro&ie )ha) )he )i*e
a$$oca)e sha$$ +e M#ree o# charge,N C(s) as [92 re'(ires s(ch )i*e )o +e gi&e! M#ree o# charge.N The
a*e!*e!) a""ears )o +e a reac)io! )o "e)i)io!ersF c$ai* i! )his case )ha) )he origi!a$ "ro&isio! %as
(!co!s)i)()io!a$ +eca(se i) a$$ege$, a()horiGe )he )a2i!g o# "ro"er), %i)ho() C(s) co*"e!sa)io!.
The So$ici)or Ge!era$, re$,i!g o! )he a*e!*e!), c$ai*s )ha) )here sho($ +e !o *ore is"()e
+eca(se )he "a,*e!) o# co*"e!sa)io! is !o% "ro&ie #or. 3) is +asic, ho%e&er, )ha) a!
a*i!is)ra)i&e age!c, ca!!o), i! )he eDercise o# $a%*a2i!g, a*e! a s)a)()e o# Co!gress. Si!ce [2
o# Reso$()io! No. 2983-A is i!&a$i, i) ca!!o) +e i!&o2e +, )he "ar)ies.
La A!!os F!e"time for Programming
by Stations, #ot $onfis%ation of
Air Time by $&'(L($
3) is c$ai*e )ha) )here is !o s)a!ar i! )he $a% )o g(ie )he C6.4L4C i! "roc(ri!g #ree air )i*e a!
)ha) M)heore)ica$$, )he C6.4L4C ca! e*a! a$$ o# )he air )i*e o# s(ch s)a)io!s.N
T2=U
/e)i)io!ers o !o)
c$ai* )ha) C6.4L4C Reso$()io! No. 2983-A ar+i)rari$, se'(es)ers raio a! )e$e&isio! )i*e. 5ha)
)he, c$ai* is )ha) +eca(se o# )he +rea)h o# )he s)a)()or, $a!g(age, )he "ro&isio! i! '(es)io! is
s(sce")i+$e o# M(!+ri$e, ar+i)rar, a! o""ressi&e eDercise.N
T28U
The co!)e!)io! has !o +asis. For o!e, )he C6.4L4C is re'(ire )o "roc(re #ree air )i*e #or
ca!ia)es M%i)hi! )he area o# co&erageN o# a "ar)ic($ar raio or )e$e&isio! +roacas)er so )ha) i)
ca!!o), #or eDa*"$e, "roc(re s(ch )i*e #or ca!ia)es o()sie )ha) area. A) %ha) )i*e o# )he a, a!
ho% *(ch )i*e )he C6.4L4C *a, "roc(re %i$$ ha&e )o +e e)er*i!e +, i) i! re$a)io! )o )he o&era$$
o+Cec)i&e o# i!#or*i!g )he "(+$ic a+o() )he ca!ia)es, )heir '(a$i#ica)io!s a! )heir "rogra*s o#
go&er!*e!). As s)a)e i! 7sme8a v( C7-9L9C, )he C6.4L4C Ti*e "ro&ie #or i! [92, as %e$$ as
)he C6.4L4C S"ace "ro&ie #or i! [90, is i! $ie( o# "ai as %hich ca!ia)es are "rohi+i)e )o
ha&e (!er [11:+< o# R.A. No. 8898. Accori!g$,, )his o+Cec)i&e *(s) +e 2e") i! *i! i! e)er*i!i!g
)he e)ai$s o# )he C6.4L4C Ti*e as %e$$ as )hose o# )he C6.4L4C S"ace.
There %o($ i!ee +e o+Cec)io! )o )he gra!) o# "o%er )o )he C6.4L4C i# [92 %ere so e)ai$e as )o
$ea&e !o roo* #or acco**oa)io! o# )he e*a!s o# raio a! )e$e&isio! "rogra**i!g. For %ere )ha)
)he case, )here co($ +e a! i!)r(sio! i!)o )he ei)oria$ "reroga)i&es o# raio a! )e$e&isio! s)a)io!s.
Differentia! Treatment of
)road%ast 'edia Justified
/e)i)io!ers co*"$ai! )ha) ?./. ?$g. 881, [92 si!g$es o() raio a! )e$e&isio! s)a)io!s )o "ro&ie #ree air
)i*e. The, co!)e! )ha) !e%s"a"ers a! *agaGi!es are !o) si*i$ar$, re'(ire as, i! #ac),
i! 1$ilippine 1ress !nstitute v( C7-9L9C
T27U
%e ("he$ )heir righ) )o )he "a,*e!) o# C(s) co*"e!sa)io!
#or )he "ri!) s"ace )he, *a, "ro&ie (!er [90.
The arg(*e!) %i$$ !o) +ear a!a$,sis. 3) res)s o! )he #a$$ac, )ha) +roacas) *eia are e!)i)$e )o )he
sa*e )rea)*e!) (!er )he #ree s"eech g(ara!)ee o# )he Co!s)i)()io! as )he "ri!) *eia. There are
i*"or)a!) i##ere!ces i! )he charac)eris)ics o# )he )%o *eia, ho%e&er, %hich C(s)i#, )heir i##ere!)ia$
)rea)*e!) #or #ree s"eech "(r"oses. ?eca(se o# )he "h,sica$ $i*i)a)io!s o# )he +roacas) s"ec)r(*,
)he go&er!*e!) *(s), o# !ecessi),, a$$oca)e +roacas) #re'(e!cies )o )hose %ishi!g )o (se
)he*. There is !o si*i$ar C(s)i#ica)io! #or go&er!*e!) a$$oca)io! a! reg($a)io! o# )he "ri!) *eia.
T28U
3! )he a$$oca)io! o# $i*i)e reso(rces, re$e&a!) co!i)io!s *a, &a$i$, +e i*"ose o! )he gra!)ees or
$ice!sees. The reaso! #or )his is )ha), as a$rea, !o)e, )he go&er!*e!) s"e!s "(+$ic #(!s #or )he
a$$oca)io! a! reg($a)io! o# )he +roacas) i!(s)r,, %hich i) oes !o) o i! )he case o# )he "ri!)
*eia. To re'(ire )he raio a! )e$e&isio! +roacas) i!(s)r, )o "ro&ie #ree air )i*e #or )he
C6.4L4C Ti*e is a #air eDcha!ge #or %ha) )he i!(s)r, ge)s.
Fro* a!o)her "oi!) o# &ie%, )his Co(r) has a$so he$ )ha) +eca(se o# )he (!i'(e a! "er&asi&e
i!#$(e!ce o# )he +roacas) *eia, MT!Uecessari$, . . . )he #reeo* o# )e$e&isio! a! raio +roacas)i!g
is so*e%ha) $esser i! sco"e )ha! )he #reeo* accore )o !e%s"a"er a! "ri!) *eia.N
T29U
The +roacas) *eia ha&e a$so es)a+$ishe a (!i'(e$, "er&asi&e "rese!ce i! )he $i&es o# a$$
Fi$i"i!os. Ne%s"a"ers a! c(rre!) +oo2s are #o(! o!$, i! *e)ro"o$i)a! areas a! i! )he "o+$acio!es
o# *(!ici"a$i)ies accessi+$e )o #as) a! reg($ar )ra!s"or)a)io!. 4&e! here, )here are $o% i!co*e
*asses %ho #i! )he cos) o# +oo2s, !e%s"a"ers, a! *agaGi!es +e,o! )heir h(*+$e *ea!s. ?asic
!ees $i2e #oo a! she$)er "er#orce e!Co, high "riori)ies.
6! )he o)her ha!, )he )ra!sis)or raio is #o(! e&er,%here. The )e$e&isio! se) is a$so +eco*i!g
(!i&ersa$. Their *essage *a, +e si*($)a!eo(s$, recei&e +, a !a)io!a$ or regio!a$ a(ie!ce o#
$is)e!ers i!c$(i!g )he i!i##ere!) or (!%i$$i!g %ho ha""e! )o +e %i)hi! reach o# a +$ari!g raio or
)e$e&isio! se). The *a)eria$s +roacas) o&er )he air%a&es reach e&er, "erso! o# e&er, age, "erso!s
o# &ar,i!g s(sce")i+i$i)ies )o "ers(asio!, "erso!s o# i##ere!) 3.X.s a! *e!)a$ ca"a+i$i)ies, "erso!s
%hose reac)io!s )o i!#$a**a)or, or o##e!si&e s"eech %o($ +e i##ic($) )o *o!i)or or "reic). The
i*"ac) o# )he &i+ra!) s"eech is #orce#($ a! i**eia)e. -!$i2e reaers o# )he "ri!)e %or2, )he raio
a(ie!ce has $esser o""or)(!i), )o cogi)a)e, a!a$,Ge, a! reCec) )he ())era!ce.
T30U
/e)i)io!ersF asser)io! )here#ore )ha) [92 o# ?./. ?$g. 881 e!ies )he* )he e'(a$ "ro)ec)io! o# )he $a%
has !o +asis. 3! ai)io!, )heir "$ea )ha) [92 :#ree air )i*e< a! [11:+< o# R.A. No. 8898 :+a! o! "ai
"o$i)ica$ as< sho($ +e i!&a$ia)e %o($ "a&e )he %a, #or a re)(r! )o )he o$ regi*e %here *o!e,e
ca!ia)es co($ *o!o"o$iGe *eia a&er)isi!g )o )he isa&a!)age o# ca!ia)es %i)h $ess
reso(rces. Tha) is %ha) Co!gress )rie )o re#or* i! 1987 %i)h )he e!ac)*e!) o# R.A. No. 8898. 5e
are !o) #ree )o se) asie )he C(g*e!) o# Co!gress, es"ecia$$, i! $igh) o# )he rece!) #ai$(re o# i!)eres)e
"ar)ies )o ha&e )he $a% re"ea$e or a) $eas) *oi#ie.
*e+uirement of $&'(L($ Time, a
*easonab!e ("er%ise of the
State,s Poer to *egu!ate
-se of Fran%hises
Fi!a$$,, i) is arg(e )ha) )he "o%er )o s("er&ise or reg($a)e gi&e! )o )he C6.4L4C (!er Ar). 3I-C, [9
o# )he Co!s)i)()io! oes !o) i!c$(e )he "o%er )o "rohi+i). 3! )he #irs) "$ace, %ha) )he C6.4L4C is
a()horiGe )o s("er&ise or reg($a)e +, Ar). 3I-C, [9 o# )he Co!s)i)()io!,
T31U
a*o!g o)her )hi!gs, is )he
(se +, *eia o# i!#or*a)io! o# )heir #ra!chises or "er*i)s, %hi$e %ha) Co!gress :!o) )he C6.4L4C<
"rohi+i)s is )he sa$e or o!a)io! o# "ri!) s"ace or air )i*e #or "o$i)ica$ as. 3! o)her %ors, )he o+Cec) o#
s("er&isio! or reg($a)io! is i##ere!) #ro* )he o+Cec) o# )he "rohi+i)io!. 3) is a!o)her #a$$ac, #or
"e)i)io!ers )o co!)e! )ha) )he "o%er )o reg($a)e oes !o) i!c$(e )he "o%er )o "rohi+i). This *a,
ha&e #orce i# )he o+Cec) o# )he "o%er %ere )he sa*e.
3! )he seco! "$ace, )he "rohi+i)io! i! [11:+< o# R.A. No. 8898 is o!$, ha$# o# )he reg($a)or, "ro&isio!
i! )he s)a)()e. The o)her ha$# is )he *a!a)e )o )he C6.4L4C )o "roc(re "ri!) s"ace a! air )i*e #or
a$$oca)io! )o ca!ia)es. As %e sai i! 7sme8a v( C7-9L9C:
The )er* "o$i)ica$ Ma +a!,N %he! (se )o escri+e [11:+< o# R.A. No. 8898, is *is$eai!g, #or e&e!
as [11:+< "rohi+i)s )he sa$e or o!a)io! o# "ri!) s"ace a! air )i*e )o "o$i)ica$ ca!ia)es, i) *a!a)es
)he C6.4L4C )o "roc(re a! i)se$# a$$oca)e )o )he ca!ia)es s"ace a! )i*e i! )he *eia. There is
!o s(""ressio! o# "o$i)ica$ as +() o!$, a reg($a)io! o# )he )i*e a! *a!!er o# a&er)isi!g.
. . . .
. . . 5ha) is i!&o$&e here is si*"$, reg($a)io! o# )his !a)(re. 3!s)ea o# $ea&i!g ca!ia)es )o
a&er)ise #ree$, i! )he *ass *eia, )he $a% "ro&ies #or a$$oca)io!, +, )he C6.4L4C o# "ri!) s"ace
a! air )i*e )o gi&e a$$ ca!ia)es e'(a$ )i*e a! s"ace #or )he "(r"ose o# e!s(ri!g M#ree, orer$,,
ho!es), "eace#($, a! crei+$e e$ec)io!s.N
5i)h )he "rohi+i)io! o! *eia a&er)isi!g +, ca!ia)es )he*se$&es, )he C6.4L4C Ti*e a!
C6.4L4C S"ace are a+o() )he o!$, *ea!s )hro(gh %hich ca!ia)es ca! a&er)ise )heir
'(a$i#ica)io!s a! "rogra*s o# go&er!*e!). .ore )ha! *ere$, e"ri&i!g ca!ia)es o# )i*e #or )heir
as, )he #ai$(re o# +roacas) s)a)io!s )o "ro&ie air )i*e (!$ess "ai +, )he go&er!*e!) %o($ c$ear$,
e"ri&e )he "eo"$e o# )heir righ) )o 2!o%. Ar). 333, [7 o# )he Co!s)i)()io! "ro&ies )ha) M)he righ) o# )he
"eo"$e )o i!#or*a)io! o! *a))ers o# "(+$ic co!cer! sha$$ +e recog!iGe,N %hi$e Ar). I33, [8 s)a)es )ha)
M)he (se o# "ro"er), +ears a socia$ #(!c)io! Ta!U )he righ) )o o%!, es)a+$ish, a! o"era)e eco!o*ic
e!)er"rises TisU s(+Cec) )o )he (), o# )he S)a)e )o "ro*o)e is)ri+()i&e C(s)ice a! )o i!)er&e!e %he!
)he co**o! goo so e*a!s.N
To a##ir* )he &a$ii), o# [92 o# ?./. ?$g. 881 is )o ho$ "(+$ic +roacas)ers )o )heir o+$iga)io! )o see )o i)
)ha) )he &arie), a! &igor o# "(+$ic e+a)e o! iss(es i! a! e$ec)io! is *ai!)ai!e. For %hi$e +roacas)
*eia are !o) *ere co**o! carriers +() e!)i)ies %i)h #ree s"eech righ)s, )he, are a$so "(+$ic
)r(s)ees charge %i)h )he (), o# e!s(ri!g )ha) )he "eo"$e ha&e access )o )he i&ersi), o# &ie%s o!
"o$i)ica$ iss(es. This righ) o# )he "eo"$e is "ara*o(!) )o )he a()o!o*, o# +roacas) *eia. To a##ir*
)he &a$ii), o# [92, )here#ore, is $i2e%ise )o ("ho$ )he "eo"$eFs righ) )o i!#or*a)io! o! *a))ers o# "(+$ic
co!cer!. The (se o# "ro"er), +ears a socia$ #(!c)io! a! is s(+Cec) )o )he s)a)eFs (), )o i!)er&e!e #or
)he co**o! goo. ?roacas) *eia ca! #i! )heir C(s) a! highes) re%ar i! )he #ac) )ha) %ha)e&er
a$)r(is)ic ser&ice )he, *a, re!er i! co!!ec)io! %i)h )he ho$i!g o# e$ec)io!s is #or )ha) co**o! goo.
For )he #oregoi!g reaso!s, )he "e)i)io! is is*isse.
SO ORDERED!
Sec! , : 4R/ATE LANDS
Re80)1ic vs CA +$7 sc*a 7<,
G!R! No! 1==%7, 5an0a*> 1,- +%%7
RE469L/C OF THE 4H/L/44/NES- "e)i)io!er,
&s.
THE HONORA9LE CO6RT OF A44EALS and CORA?ON NAG6/T, respondents.
D 4 C 3 S 3 6 N
T/NGA- J..
This is a 1etition for Review on Certiorari (!er R($e 9= o# )he 1997 R($es o# Ci&i$ /roce(re, see2i!g
)o re&ie% )he Decisio!
1
o# )he SiD)h Di&isio! o# )he Co(r) o# A""ea$s a)e 7($, 12, 2000 i! CA-G.R.
S/ No. =1921. The a""e$$a)e co(r) a##ir*e )he ecisio!s o# +o)h )he Regio!a$ Tria$ Co(r)
:RTC<,
2
?ra!ch 8, o# 1a$i+o, A2$a! a)e Fe+r(ar, 28, 1999, a! )he 7)h .(!ici"a$ Circ(i) Tria$ Co(r)
:.CTC<
3
o# 3+aCa,-Na+as, A2$a! a)e Fe+r(ar, 18, 1998, %hich gra!)e )he a""$ica)io! #or
regis)ra)io! o# a "arce$ o# $a! o# CoraGo! Nag(i) :Nag(i)<, )he res"o!e!) herei!.
The #ac)s are as #o$$o%s:
6! 7a!(ar, =, 1993, Nag(i), a Fi$i"i!o ci)iGe!, o# $ega$ age a! *arrie )o .a!o$i)o S. Nag(i), #i$e
%i)h )he .CTC o# 3+aCa,-Na+as, A2$a!, a "e)i)io! #or regis)ra)io! o# )i)$e o# a "arce$ o# $a! si)(a)e i!
?rg,. -!io!, Na+as, A2$a!. The "arce$ o# $a! is esig!a)e as Lo) No. 10099, Ca. 7=8-D, Na+as
Caas)re, A/ A 080919-019779, a! co!)ai!s a! area o# 31,379 s'(are *e)ers. The a""$ica)io!
see2s C(icia$ co!#ir*a)io! o# res"o!e!)Fs i*"er#ec) )i)$e o&er )he a#oresai $a!.
6! Fe+r(ar, 20, 199=, )he co(r) he$ i!i)ia$ heari!g o! )he a""$ica)io!. The "(+$ic "rosec()or,
a""eari!g #or )he go&er!*e!), a! 7ose A!ge$es, re"rese!)i!g )he heirs o# R(s)ico A!ge$es, o""ose
)he "e)i)io!. 6! a $a)er a)e, ho%e&er, )he heirs o# R(s)ico A!ge$es #i$e a #or*a$ o""osi)io! )o )he
"e)i)io!. A$so o! Fe+r(ar, 20, 199=, )he co(r) iss(e a! orer o# ge!era$ e#a($) agai!s) )he %ho$e
%or$ eDce") as )o )he heirs o# R(s)ico A!ge$es a! )he go&er!*e!).
The e&ie!ce o! recor re&ea$s )ha) )he s(+Cec) "arce$ o# $a! %as origi!a$$, ec$are #or )aDa)io!
"(r"oses i! )he !a*e o# Ra*o! -r+a!o :-r+a!o< i! 199= (!er TaD Dec$ara)io! No. 3888 (!)i$
1991.
9
6! 7($, 9, 1992, -r+a!o eDec()e a Dee o# X(i)c$ai* i! #a&or o# )he heirs o# 0o!ora)o
.a*i!g :.a*i!g<, %herei! he re!o(!ce a$$ his righ)s )o )he s(+Cec) "ro"er), a! co!#ir*e )he sa$e
*ae +, his #a)her )o .a*i!g so*e)i*e i! 19== or 19=8.
=
S(+se'(e!)$,, )he heirs o# .a*i!g
eDec()e a ee o# a+so$()e sa$e i! #a&or o# res"o!e!) Nag(i) %ho )here("o! s)ar)e occ(",i!g )he
sa*e. She co!s)i)()e .a!(e$ ?$a!co, 7r. as her a))or!e,-i!-#ac) a! a*i!is)ra)or. The a*i!is)ra)or
i!)ro(ce i*"ro&e*e!)s, "$a!)e )rees, s(ch as *ahoga!,, coco!() a! ge*e$i!a )rees i! ai)io!
)o eDis)i!g coco!() )rees %hich %ere )he! =0 )o 80 ,ears o$, a! "ai )he corres"o!i!g )aDes (e
o! )he s(+Cec) $a!. A) "rese!), )here are "arce$s o# $a! s(rro(!i!g )he s(+Cec) $a! %hich ha&e
+ee! iss(e )i)$es +, &ir)(e o# C(icia$ ecrees. Nag(i) a! her "reecessors-i!-i!)eres) ha&e occ("ie
)he $a! o"e!$, a! i! )he co!ce") o# o%!er %i)ho() a!, o+Cec)io! #ro* a!, "ri&a)e "erso! or e&e!
)he go&er!*e!) (!)i$ she #i$e her a""$ica)io! #or regis)ra)io!.
A#)er )he "rese!)a)io! o# e&ie!ce #or Nag(i), )he "(+$ic "rosec()or *a!i#es)e )ha) )he go&er!*e!)
i !o) i!)e! )o "rese!) a!, e&ie!ce %hi$e o""osi)or 7ose A!ge$es, as re"rese!)a)i&e o# )he heirs o#
R(s)ico A!ge$es, #ai$e )o a""ear (ri!g )he )ria$ es"i)e !o)ice. 6! Se")e*+er 27, 1997, )he .CTC
re!ere a ecisio! oreri!g )ha) )he s(+Cec) "arce$ +e +ro(gh) (!er )he o"era)io! o# )he /ro"er),
Regis)ra)io! Decree or /resie!)ia$ Decree :/.D.< No. 1=29 a! )ha) )he )i)$e )here)o regis)ere a!
co!#ir*e i! )he !a*e o# Nag(i).
8
The Re"(+$ic o# )he /hi$i""i!es :Re"(+$ic<, )hr( )he 6##ice o# )he So$ici)or Ge!era$ :6SG<, #i$e a
*o)io! #or reco!siera)io!. The 6SG s)resse )ha) )he $a! a""$ie #or %as ec$are a$ie!a+$e a!
is"osa+$e o!$, o! 6c)o+er 1=, 1980, "er )he cer)i#ica)io! #ro* Regio!a$ 4Dec()i&e Direc)or Rao($ T.
Geo$$eg(e o# )he De"ar)*e!) o# 4!&iro!*e!) a! Na)(ra$ Reso(rces, Regio! >3.
7
0o%e&er, )he co(r)
e!ie )he *o)io! #or reco!siera)io! i! a! orer a)e Fe+r(ar, 18, 1998.
8
?awp$i?(n@t
Therea#)er, )he Re"(+$ic a""ea$e )he ecisio! a! )he orer o# )he .CTC )o )he RTC, 1a$i+o, A2$a!,
?ra!ch 8. 6! Fe+r(ar, 28, 1999, )he RTC re!ere i)s ecisio!, is*issi!g )he a""ea$.
9
-!a(!)e, )he Re"(+$ic e$e&a)e )he case )o )he Co(r) o# A""ea$s &ia R($e 92 o# )he 1997 R($es o#
Ci&i$ /roce(re. 6! 7($, 12, 2000, )he a""e$$a)e co(r) re!ere a ecisio! is*issi!g )he "e)i)io! #i$e
+, )he Re"(+$ic a! a##ir*e in toto )he assai$e ecisio! o# )he RTC.
0e!ce, )he "rese!) "e)i)io! #or re&ie% raisi!g a "(re '(es)io! o# $a% %as #i$e +, )he Re"(+$ic o!
Se")e*+er 9, 2000.
10
The 6SG assai$s )he ecisio! o# )he Co(r) o# A""ea$s co!)e!i!g )ha) )he a""e$$a)e co(r) gra&e$,
erre i! ho$i!g )ha) )here is !o !ee #or )he go&er!*e!)Fs "rior re$ease o# )he s(+Cec) $o) #ro* )he
"(+$ic o*ai! +e#ore i) ca! +e co!siere a$ie!a+$e or is"osa+$e %i)hi! )he *ea!i!g o# /.D. No.
1=29, a! )ha) Nag(i) ha +ee! i! "ossessio! o# Lo) No. 10099 i! )he co!ce") o# o%!er #or )he
re'(ire "erio.
11
0e!ce, )he ce!)ra$ '(es)io! #or reso$()io! is %he)her is !ecessar, (!er Sec)io! 19:1< o# )he /ro"er),
Regis)ra)io! Decree )ha) )he s(+Cec) $a! +e #irs) c$assi#ie as a$ie!a+$e a! is"osa+$e +e#ore )he
a""$ica!)Fs "ossessio! (!er a "ona fide c$ai* o# o%!ershi" co($ e&e! s)ar).
The 6SG i!&o2es o(r ho$i!g i! Director of Lands v( !ntermediate ppellate Cour)
12
i! arg(i!g )ha) )he
"ro"er), %hich is i! o"e!, co!)i!(o(s a! eDc$(si&e "ossessio! *(s) #irs) +e a$ie!a+$e. Si!ce )he
s(+Cec) $a! %as ec$are a$ie!a+$e o!$, o! 6c)o+er 1=, 1980, Nag(i) co($ !o) ha&e *ai!)ai!e
a "ona fide c$ai* o# o%!ershi" si!ce 7(!e 12, 199=, as re'(ire +, Sec)io! 19 o# )he /ro"er),
Regis)ra)io! Decree, si!ce "rior )o 1980, )he $a! %as !o) a$ie!a+$e or is"osa+$e, )he 6SG arg(es.
Sec)io! 19 o# )he /ro"er), Regis)ra)io! Decree, go&er!i!g origi!a$ regis)ra)io! "roceei!gs, +ears
c$ose eDa*i!a)io!. 3) eD"ress$, "ro&ies:
S4CT36N 19. 5ho *a, a""$,.Q The #o$$o%i!g "erso!s *a, #i$e i! )he "ro"er Co(r) o# Firs) 3!s)a!ce
a! a""$ica)io! #or regis)ra)io! o# )i)$e )o $a!, %he)her "erso!a$$, or )hro(gh )heir ($, a()horiGe
re"rese!)a)i&es:
:1< )hose %ho +, )he*se$&es or )hro(gh )heir "reecessors-i!-i!)eres) ha&e +ee! i! o"e!, co!)i!(o(s,
eDc$(si&e a! !o)orio(s "ossessio! a! occ("a)io! o# a$ie!a+$e a! is"osa+$e $a!s o# )he "(+$ic
o*ai! (!er a +o!a #ie c$ai* o# o%!ershi" si!ce 7(!e 12, 199=, or ear$ier.
:2< Those %ho ha&e ac'(ire o%!ershi" o&er "ri&a)e $a!s +, "rescri")io! (!er )he "ro&isio!s o#
eDis)i!g $a%s.
. . . .
There are )hree o+&io(s re'(isi)es #or )he #i$i!g o# a! a""$ica)io! #or regis)ra)io! o# )i)$e (!er Sec)io!
19:1< A )ha) )he "ro"er), i! '(es)io! is a$ie!a+$e a! is"osa+$e $a! o# )he "(+$ic o*ai!P )ha) )he
a""$ica!)s +, )he*se$&es or )hro(gh )heir "reecessors-i!-i!)eres) ha&e +ee! i! o"e!, co!)i!(o(s,
eDc$(si&e a! !o)orio(s "ossessio! a! occ("a)io!, a!P )ha) s(ch "ossessio! is (!er a "ona
fide c$ai* o# o%!ershi" si!ce 7(!e 12, 199= or ear$ier.
/e)i)io!er s(gges)s a! i!)er"re)a)io! )ha) )he a$ie!a+$e a! is"osa+$e charac)er o# )he $a! sho($
ha&e a$rea, +ee! es)a+$ishe si!ce 7(!e 12, 199= or ear$ier. This is !o) +or!e o() +, )he "$ai!
*ea!i!g o# Sec)io! 19:1<. LSi!ce 7(!e 12, 199=,L as (se i! )he "ro&isio!, '(a$i#ies i)s a!)ecee!)
"hrase L(!er a +o!a#ie c$ai* o# o%!ershi".L Ge!era$$, s"ea2i!g, '(a$i#,i!g %ors res)ric) or *oi#,
o!$, )he %ors or "hrases )o %hich )he, are i**eia)e$, associa)e, a! !o) )hose is)a!)$, or
re*o)e$, $oca)e.
13
d proximum antecedents fiat relation nisi impediatur sentencia.
?esies, %e are *i!#($ o# )he a+s(ri), )ha) %o($ res($) i# %e ao") "e)i)io!erFs "osi)io!. A+se!) a
$egis$a)i&e a*e!*e!), )he r($e %o($ +e, ao")i!g )he 6SGFs &ie%, )ha) a$$ $a!s o# )he "(+$ic o*ai!
%hich %ere !o) ec$are a$ie!a+$e or is"osa+$e +e#ore 7(!e 12, 199= %o($ !o) +e s(sce")i+$e )o
origi!a$ regis)ra)io!, !o *a))er )he $e!g)h o# (!cha$$e!ge "ossessio! +, )he occ("a!). S(ch
i!)er"re)a)io! re!ers "aragra"h :1< o# Sec)io! 19 &ir)(a$$, i!o"era)i&e a! e&e! "rec$(es )he
go&er!*e!) #ro* gi&i!g i) e##ec) e&e! as i) ecies )o rec$assi#, "(+$ic agric($)(ra$ $a!s as a$ie!a+$e
a! is"osa+$e. The (!reaso!a+$e!ess o# )he si)(a)io! %o($ e&e! +e aggra&a)e co!sieri!g )ha)
+e#ore 7(!e 12, 199=, )he /hi$i""i!es %as !o) ,e) e&e! co!siere a! i!e"e!e!) s)a)e.
3!s)ea, )he *ore reaso!a+$e i!)er"re)a)io! o# Sec)io! 19:1< is )ha) i) *ere$, re'(ires )he "ro"er),
so(gh) )o +e regis)ere as a$rea, a$ie!a+$e a! is"osa+$e a) )he )i*e )he a""$ica)io! #or regis)ra)io!
o# )i)$e is #i$e. 3# )he S)a)e, a) )he )i*e )he a""$ica)io! is *ae, has !o) ,e) ee*e i) "ro"er )o re$ease
)he "ro"er), #or a$ie!a)io! or is"osi)io!, )he "res(*")io! is )ha) )he go&er!*e!) is s)i$$ reser&i!g )he
righ) )o ()i$iGe )he "ro"er),P he!ce, )he !ee )o "reser&e i)s o%!ershi" i! )he S)a)e irres"ec)i&e o# )he
$e!g)h o# a&erse "ossessio! e&e! i# i! goo #ai)h. 0o%e&er, i# )he "ro"er), has a$rea, +ee!
c$assi#ie as a$ie!a+$e a! is"osa+$e, as i) is i! )his case, )he! )here is a$rea, a! i!)e!)io! o! )he
"ar) o# )he S)a)e )o a+ica)e i)s eDc$(si&e "reroga)i&e o&er )he "ro"er),.
This reai!g a$ig!s co!#or*a+$, %i)h o(r ho$i!g i! Repu"lic v( Court of ppeals .
19
Therei!, )he Co(r)
!o)e )ha) L)o "ro&e )ha) )he $a! s(+Cec) o# a! a""$ica)io! #or regis)ra)io! is a$ie!a+$e, a! a""$ica!)
*(s) es)a+$ish )he eDis)e!ce o# a "osi)i&e ac) o# )he go&er!*e!) s(ch as a "resie!)ia$ "roc$a*a)io!
or a! eDec()i&e orerP a! a*i!is)ra)i&e ac)io!P i!&es)iga)io! re"or)s o# ?(rea( o# La!s i!&es)iga)orsP
a! a $egis$a)i&e ac) or a s)a)()e.L
1=
3! )ha) case, )he s(+Cec) $a! ha +ee! cer)i#ie +, )he D4NR as
a$ie!a+$e a! is"osa+$e i! 1980, )h(s )he Co(r) co!c$(e )ha) )he a$ie!a+$e s)a)(s o# )he $a!,
co*"o(!e +, )he es)a+$ishe #ac) )ha) )herei! res"o!e!)s ha occ("ie )he $a! e&e! +e#ore
1927, s(##ice )o a$$o% )he a""$ica)io! #or regis)ra)io! o# )he sai "ro"er),. 3! )he case a) +ar, e&e! )he
"e)i)io!er a*i)s )ha) )he s(+Cec) "ro"er), %as re$ease a! cer)i#ie as %i)hi! a$ie!a+$e a!
is"osa+$e Go!e i! 1980 +, )he D4NR.
18
This case is is)i!g(isha+$e #ro* #racewell v( Court of ppeals,
17
%herei! )he Co(r) !o)e )ha) %hi$e
)he c$ai*a!) ha +ee! i! "ossessio! si!ce 1908, i) %as o!$, i! 1972 )ha) )he $a!s i! '(es)io! %ere
c$assi#ie as a$ie!a+$e a! is"osa+$e. Th(s, )he +i a) regis)ra)io! )herei! i !o) s(ccee.
3! #racewell, )he c$ai*a!) ha #i$e his a""$ica)io! i! 1983, or !i!e :9< ,ears +e#ore )he "ro"er), %as
ec$are a$ie!a+$e a! is"osa+$e.?awp$i?(n@t Th(s, i! )his case, %here )he a""$ica)io! %as *ae
,ears a#)er )he "ro"er), ha +ee! cer)i#ie as a$ie!a+$e a! is"osa+$e, )he#racewell r($i!g oes !o)
a""$,.
A i##ere!) r($e o+)ai!s #or #ores) $a!s,
18
s(ch as )hose %hich #or* "ar) o# a reser&a)io! #or "ro&i!cia$
"ar2 "(r"oses
19
)he "ossessio! o# %hich ca!!o) ri"e! i!)o o%!ershi".
20
3) is e$e*e!)ar, i! )he $a%
go&er!i!g !a)(ra$ reso(rces )ha) #ores) $a! ca!!o) +e o%!e +, "ri&a)e "erso!s. As he$ i! 1alomo
v( Court of ppeals,
21
#ores) $a! is !o) regis)ra+$e a! "ossessio! )hereo#, !o *a))er ho% $e!g)h,,
ca!!o) co!&er) i) i!)o "ri&a)e "ro"er),, (!$ess s(ch $a!s are rec$assi#ie a! co!siere is"osa+$e
a! a$ie!a+$e.
22
3! )he case a) +ar, )he "ro"er), i! '(es)io! %as (!is"()e$, c$assi#ie as is"osa+$e
a! a$ie!a+$eP he!ce, )he r($i!g i! 1alomo is i!a""$ica+$e, as correc)$, he$ +, )he Co(r) o# A""ea$s.
23
3) *(s) +e !o)e )ha) )he "rese!) case %as ecie +, )he $o%er co(r)s o! )he +asis o# Sec)io! 19:1<
o# )he /ro"er), Regis)ra)io! Decree, %hich "er)ai!s )o origi!a$ regis)ra)io! )hro(gh ori!ar,
regis)ra)io! "roceei!gs. The righ) )o #i$e )he a""$ica)io! #or regis)ra)io! eri&es #ro* a "ona fide c$ai*
o# o%!ershi" goi!g +ac2 )o 7(!e 12, 199= or ear$ier, +, reaso! o# )he c$ai*a!)Fs o"e!, co!)i!(o(s,
eDc$(si&e a! !o)orio(s "ossessio! o# a$ie!a+$e a! is"osa+$e $a!s o# )he "(+$ic o*ai!.
A si*i$ar righ) is gi&e! (!er Sec)io! 98:+< o# )he /(+$ic La! Ac), %hich reas:
Sec. 98. The #o$$o%i!g escri+e ci)iGe!s o# )he /hi$i""i!es, occ(",i!g $a!s o# )he "(+$ic o*ai! or
c$ai*i!g )o o%! a!, s(ch $a! or a! i!)eres) )herei!, +() )hose )i)$es ha&e !o) +ee! "er#ec)e or
co*"$e)e, *a, a""$, )o )he Co(r) o# Firs) 3!s)a!ce o# )he "ro&i!ce %here )he $a! is $oca)e #or
co!#ir*a)io! o# )heir c$ai*s a! )he iss(a!ce o# a cer)i#ica)e o# )i)$e )here#or, (!er )he La!
Regis)ra)io! Ac), )o %i):
DDD DDD DDD
:+< Those %ho +, )he*se$&es or )hro(gh )heir "reecessors i! i!)eres) ha&e +ee! i! o"e!,
co!)i!(o(s, eDc$(si&e, a! !o)orio(s "ossessio! a! occ("a)io! o# agric($)(ra$ $a!s o# )he "(+$ic
o*ai!, (!er a +o!a #ie c$ai* o# ac'(isi)io! o# o%!ershi", #or a) $eas) )hir), ,ears i**eia)e$,
"recei!g )he #i$i!g o# )he a""$ica)io! #or co!#ir*a)io! o# )i)$e eDce") %he! "re&e!)e +, %ar or #orce
*aCe(re. These sha$$ +e co!c$(si&e$, "res(*e )o ha&e "er#or*e a$$ )he co!i)io!s esse!)ia$ )o a
Go&er!*e!) gra!) a! sha$$ +e e!)i)$e )o a cer)i#ica)e o# )i)$e (!er )he "ro&isio!s o# )his cha")er.
5he! )he /(+$ic La! Ac) %as #irs) "ro*($ga)e i! 1938, )he "erio o# "ossessio! ee*e !ecessar,
)o &es) )he righ) )o regis)er )heir )i)$e )o agric($)(ra$ $a!s o# )he "(+$ic o*ai! co**e!ce #ro* 7($,
28, 1899. 0o%e&er, )his "erio %as a*e!e +, R.A. No. 1992, %hich "ro&ie )ha) )he "ona
fide c$ai* o# o%!ershi" *(s) ha&e +ee! #or a) $eas) )hir), :30< ,ears. The! i! 1977, Sec)io! 98:+< o#
)he /(+$ic La! Ac) %as agai! a*e!e, )his )i*e +, /.D. No. 1073, %hich "egge )he rec2o!i!g
a)e a) 7(!e 12, 199=. This !e% s)ar)i!g "oi!) is co!cora!) %i)h Sec)io! 19:1< o# )he /ro"er),
Regis)ra)io! Decree.
3!ee, )here are !o *a)eria$ i##ere!ces +e)%ee! Sec)io! 19:1< o# )he /ro"er), Regis)ra)io! Decree
a! Sec)io! 98:+< o# )he /(+$ic La! Ac), as a*e!e. Tr(e, )he /(+$ic La! Ac) oes re#er )o
Lagric($)(ra$ $a!s o# )he "(+$ic o*ai!,L %hi$e )he /ro"er), Regis)ra)io! Decree (ses )he )er*
La$ie!a+$e a! is"osa+$e $a!s o# )he "(+$ic o*ai!.L 3) *(s) +e !o)e )ho(gh )ha) )he Co!s)i)()io!
ec$ares )ha) La$ie!a+$e $a!s o# )he "(+$ic o*ai! sha$$ +e $i*i)e )o agric($)(ra$ $a!s.L
29
C$ear$,, )he
s(+Cec) $a!s (!er Sec)io! 98:+< o# )he /(+$ic La! Ac) a! Sec)io! 19:1< o# )he /ro"er),
Regis)ra)io! Decree are o# )he sa*e ),"e.
Di )he e!ac)*e!) o# )he /ro"er), Regis)ra)io! Decree a! )he a*e!a)or, /.D. No. 1073 "rec$(e
)he a""$ica)io! #or regis)ra)io! o# a$ie!a+$e $a!s o# )he "(+$ic o*ai!, "ossessio! o&er %hich
co**e!ce o!$, a#)er 7(!e 12, 199=R 3) i !o), co!sieri!g Sec)io! 19:2< o# )he /ro"er),
Regis)ra)io! Decree, %hich go&er!s a! a()horiGes )he a""$ica)io! o# L)hose %ho ha&e ac'(ire
o%!ershi" o# "ri&a)e $a!s +, "rescri")io! (!er )he "ro&isio!s o# eDis)i!g $a%s.L
/rescri")io! is o!e o# )he *oes o# ac'(iri!g o%!ershi" (!er )he Ci&i$ Coe.
2=
There is a co!sis)e!)
C(ris"r(e!)ia$ r($e )ha) "ro"er)ies c$assi#ie as a$ie!a+$e "(+$ic $a! *a, +e co!&er)e i!)o "ri&a)e
"ro"er), +, reaso! o# o"e!, co!)i!(o(s a! eDc$(si&e "ossessio! o# a) $eas) )hir), :30< ,ears.
28
5i)h
s(ch co!&ersio!, s(ch "ro"er), *a, !o% #a$$ %i)hi! )he co!)e*"$a)io! o# L"ri&a)e $a!sL (!er Sec)io!
19:2<, a! )h(s s(sce")i+$e )o regis)ra)io! +, )hose %ho ha&e ac'(ire o%!ershi" )hro(gh
"rescri")io!. Th(s, e&e! i# "ossessio! o# )he a$ie!a+$e "(+$ic $a! co**e!ce o! a a)e $a)er )ha!
7(!e 12, 199=, a! s(ch "ossessio! +ei!g +ee! o"e!, co!)i!(o(s a! eDc$(si&e, )he! )he "ossessor
*a, ha&e )he righ) )o regis)er )he $a! +, &ir)(e o# Sec)io! 19:2< o# )he /ro"er), Regis)ra)io! Decree.
The $a! i! '(es)io! %as #o(! )o +e coca$ i! !a)(re, i) ha&i!g +ee! "$a!)e %i)h coco!() )rees !o%
o&er #i#), ,ears o$.
27
The i!here!) !a)(re o# )he $a! +() co!#ir*s i)s cer)i#ica)io! i! 1980 as a$ie!a+$e,
he!ce agric($)(ra$. There is !o i*"ei*e!) )o )he a""$ica)io! o# Sec)io! 19:1< o# )he /ro"er),
Regis)ra)io! Decree, as correc)$, acco*"$ishe +, )he $o%er co(r)s.lAvvp$i?(net
The 6SG "osi)s )ha) )he Co(r) o# A""ea$s erre i! ho$i!g )ha) Nag(i) ha +ee! i! "ossessio! i! )he
co!ce") o# o%!er #or )he re'(ire "erio. The arg(*e!) +egs )he '(es)io!. 3) is agai! hi!ge o! )he
asser)io!Qsho%! ear$ier )o +e (!#o(!eQ)ha) )here co($ ha&e +ee! !o "ona fide c$ai* o#
o%!ershi" "rior )o 1980, %he! )he s(+Cec) $a! %as ec$are a$ie!a+$e or is"osa+$e.
5e #i! !o reaso! )o is)(r+ )he co!c$(sio! o# +o)h )he RTC a! )he Co(r) o# A""ea$s )ha) Nag(i) ha
)he righ) )o a""$, #or regis)ra)io! o%i!g )o )he co!)i!(o(s "ossessio! +, her a! her "reecessors-i!-
i!)eres) o# )he $a! si!ce 199=. The +asis o# s(ch co!c$(sio! is "ri*ari$, #ac)(a$, a! )he Co(r)
ge!era$$, res"ec)s )he #ac)(a$ #i!i!gs *ae +, $o%er co(r)s. No)a+$,, "ossessio! si!ce 199= %as
es)a+$ishe )hro(gh "roo# o# )he eDis)e!ce o# =0 )o 80-,ear o$ )rees a) )he )i*e Nag(i) "(rchase )he
"ro"er), as %e$$ as )aD ec$ara)io!s eDec()e +, -r+a!o i! 199=. A$)ho(gh )aD ec$ara)io!s a! rea$),
)aD "a,*e!) o# "ro"er), are !o) co!c$(si&e e&ie!ce o# o%!ershi", !e&er)he$ess, )he, are
goo indicia o# )he "ossessio! i! )he co!ce") o# o%!er #or !o o!e i! his righ) *i! %o($ +e "a,i!g
)aDes #or a "ro"er), )ha) is !o) i! his ac)(a$ or a) $eas) co!s)r(c)i&e "ossessio!. The, co!s)i)()e a)
$eas) "roo# )ha) )he ho$er has a c$ai* o# )i)$e o&er )he "ro"er),. The &o$(!)ar, ec$ara)io! o# a "iece o#
"ro"er), #or )aDa)io! "(r"oses *a!i#es)s !o) o!$, o!eFs si!cere a! ho!es) esire )o o+)ai! )i)$e )o )he
"ro"er), a! a!!o(!ces his a&erse c$ai* agai!s) )he S)a)e a! a$$ o)her i!)eres)e "ar)ies, +() a$so
)he i!)e!)io! )o co!)ri+()e !eee re&e!(es )o )he Go&er!*e!). S(ch a! ac) s)re!g)he!s o!eFs "ona
fide c$ai* o# ac'(isi)io! o# o%!ershi".
28
Co!sieri!g )ha) )he "ossessio! o# )he s(+Cec) "arce$ o# $a! +, )he res"o!e!) ca! +e )race +ac2 )o
)ha) o# her "reecessors-i!-i!)eres) %hich co**e!ce si!ce 199= or #or a$*os) #i#), :=0< ,ears, i) is
i!ee +e,o! a!, c$o( o# o(+) )ha) she has ac'(ire )i)$e )here)o %hich *a, +e "ro"er$, +ro(gh)
(!er )he o"era)io! o# )he Torre!s s,s)e*. Tha) she has +ee! i! "ossessio! o# )he $a! i! )he
co!ce") o# a! o%!er, o"e!, co!)i!(o(s, "eace#($ a! %i)ho() a!, o""osi)io! #ro* a!, "ri&a)e "erso!
a! )he go&er!*e!) i)se$# *a2es her righ) )here)o (!o(+)e$, se))$e a! eser&i!g o# "ro)ec)io!
(!er )he $a%.
CHEREFORE, #oregoi!g "re*ises co!siere, )he assai$e Decision o# )he Co(r) o# A""ea$s a)e
7($, 12, 2000 is here+, AFF3R.4D. No cos)s.
+- ?a*agosa s CA
G!R! No! 1%<=%1
Se8te()e* +'- +%%%
S4O6SES FLORENT/NO ?ARAGO?A AND ERL/NDA ENR/I6E?#?ARAGO?A S! THE
HONORA9LE CO6RT OF A44EALS
Facts:
F$a&io VaragoGa Ca!o %as )he regis)ere o%!er o# cer)ai! "arce$s o# $a!. 0e ha #o(r chi$re!
!a*e$,: G$oria, VacariaG, F$ore!)i!o a! A$+er)a, a$$ s(r!a*e VaragoGa. 6! Dece*+er 9, 1989, he
ie %i)ho() a %i$$ a! %as s(r&i&e +, his #o(r chi$re!.
6! Dece*+er 28, 1981, "ri&a)e res"o!e!) A$+er)a VaragoGa-.orga! #i$e a co*"$ai!) %i)h )he Co(r)
o# Firs) 3!s)a!ce agai!s) "e)i)io!er-s"o(ses F$ore!)i!o a! 4r$i!a #or e$i&er, o# her i!heri)a!ce
share a! #or "a,*e!) o# a*ages. She c$ai*s )ha) she is a !a)(ra$-+or! Fi$i"i!o ci)iGe! a! )he
,o(!ges) chi$ o# )he $a)e F$a&io. She #(r)her a$$ege )ha) her #a)her i! his $i#e)i*e "ar)i)io!e )he
"ro"er)ies a*o!g his #o(r chi$re!. The shares o# her +ro)hers a! sis)er %ere gi&e! )o )he* i!
a&a!ce +, %a, o# ee o# sa$e, +() %i)ho() &a$i co!siera)io!, %hi$e her share %as !o) co!&e,e +,
%a, o# ee o# sa$e )he!.
/e)i)io!ers e!ie 2!o%$ege o# a! a$$ege is)ri+()io! +, %a, o# ees o# sa$e )o )he* +, )heir
#a)her. The, e!ie 2!o%$ege o# )he a$$ege i!)e!)io! o# )heir #a)her )o co!&e, )he ci)e $o)s )o
A$+er)a, *(ch *ore, )he reaso! #or his #ai$(re )o o so +eca(se she +eca*e a! A*erica! ci)iGe!.
The, e!ie )ha) )here %as "ar)i)io!i!g o# )he es)a)e o# )heir #a)her (ri!g his $i#e)i*e.
The Regio!a$ Tria$ Co(r) re!ere C(g*e!) aC(ica)i!g Lo) 971 i! )he !a*e o# F$a&io VaragoGa
Ca!o )o A$+er)a VaragoGa-.orga! as a""er)ai!i!g her share i! his es)a)e.
/ss0es:
5he)her )he "ar)i)io! i!)er &i&os +, F$a&io VaragoGa Ca!o o# his "ro"er)ies is &a$i.
:2< 5he)her )he &a$ii), o# )he ee o# sa$e a! co!se'(e!)$,, )he )ra!s#er cer)i#ica)e o# )i)$e o&er )he
$o) regis)ere i! )he !a*e o# "e)i)io!ers ca! +e a &a$i s(+Cec) *a))er o# )he e!)ire "roceei!g #or )he
e$i&er, o# i!heri)a!ce share.
R01ing:
?o)h )he )ria$ co(r) a! )he "(+$ic res"o!e!) #o(! )ha) (ri!g )he $i#e)i*e o# F$a&io, he a$rea,
"ar)i)io!e a! is)ri+()e his "ro"er)ies a*o!g his )hree chi$re!, eDce")i!g "ri&a)e res"o!e!)
)hro(gh ees o# sa$e. A ee o# sa$e %as !o) eDec()e i! #a&or o# "ri&a)e res"o!e!) +eca(se she
ha +eco*e a! A*erica! ci)iGe! a! )he Co!s)i)()io! "rohi+i)e a sa$e i! her #a&or.
3) is +asic i! )he $a% o# s(ccessio! )ha) a "ar)i)io! i!)er &i&os *a, +e o!e #or as $o!g as $egi)i*es are
!o) "reC(ice. -!#or)(!a)e$,, co$$a)io! ca!!o) +e o!e i! )his case %here )he origi!a$ "e)i)io! #or
e$i&er, o# i!heri)a!ce share o!$, i*"$eae o!e o# )he o)her co*"($sor, heirs. The "e)i)io! *(s)
)here#ore +e is*isse %i)ho() "reC(ice )o )he i!s)i)()io! o# a !e% "roceei!g %here a$$ )he
i!is"e!sa+$e "ar)ies are "rese!) #or )he righ)#($ e)er*i!a)io! o# )heir res"ec)i&e $egi)i*e a! i# )he
$egi)i*es %ere "reC(ice +, )he "ar)i)io!i!g i!)er &i&os.
/ri&a)e res"o!e!), i! s(+*i))i!g her "e)i)io! #or )he e$i&er, o# i!heri)a!ce share, %as i! e##ec)
'(es)io!i!g )he &a$ii), o# )he ee o# sa$e i! #a&or o# "e)i)io!er a! co!se'(e!)$,, )he )ra!s#er o#
cer)i#ica)e o# )i)$e iss(e i! )he $a))erFs !a*e. a$)ho(gh )he )ria$ co(r), as a! o+i)er, *ae a #i!i!g o#
&a$ii), o# )he co!&e,a!ce o# )he sai $o), si!ce accori!g )o i), "ri&a)e res"o!e!) i !o) '(es)io! )he
ge!(i!e!ess o# )he sig!a)(re o# )he ecease, !e&er)he$ess, %he! )he case %as e$e&a)e )o )he
Co(r) o# A""ea$s, )he $a))er ec$are )he sa$e )o +e #ic)i)io(s +eca(se o# #i!i!g o# *ar2e i##ere!ces
i! )he sig!a)(re o# F$a&io i! )he ee o# sa$e &is-\-&is sig!a)(res #o(! i! ear$ier oc(*e!)s. Co($
)his +e o!eR The "e)i)io! is a co$$a)era$ a))ac2. A cer)i#ica)e o# )i)$e sha$$ !o) +e s(+Cec) )o co$$a)era$
a))ac2. 3) ca!!o) +e a$)ere, *oi#ie or ca!ce$$e eDce") i! a irec) "roceei!g i! accora!ce %i)h
$a%.
$!Ra(i*e3 v! da! De Ra(i*e3
G!R! No! L#+,'7+ Fe)*0a*> 17- 1'&+
Fac)s: The ecease %as s(r&i&e +, his s"o(se, 2 gra!!e"he%s, a! his co*"a!io!. The
a*i!is)ra)or s(+*i))e a "ar)i)io! )o )he co(r) %hich i&ie )he es)a)e i!)o 2: o!e-ha$# %o($ go )o
)he %io% i! sa)is#ac)io! o# her $egi)i*eP )he o)her ha$#, %hich is )he #ree "or)io!, %o($ go )o )he
gra!!e"he%sP ho%e&er, 1@3 o# )he #ree "or)io! is charge %i)h )he %io%Fs (s(#r(c) a! )he
re*ai!i!g 2@3 %i)h a (s(#r(c) i! #a&or o# )he co*"a!io!.
The gra!!e"he%s o""ose )he s(+s)i)()io! o! )he gro(! )ha) )he 1
s)
heirs are !o) re$a)e )o
)he s(+s)i)()es %i)hi! )he 1
s)
egree.
3ss(e: 5he)her )he #ieico**issar, s(+s)i)()io! is &a$i i# )he s(+s)i)()es are re$a)e )o )he
co*"a!io! %i)hi! o!e egree.
Decisio!: SC r($e )ha) )he #ieico**issar, s(+s)i)()io! is &oi. The s(+s)i)()es :gra!!e"he%s< are
!o) re$a)e )o )he co*"a!io! %i)hi! o!e egree. 3! e##ec), )he SC r($e )ha) Mo!e egreeN *ea!s Mo!e
ge!era)io!N a! !o) Mo!e esig!a)io!.N So, i) #o$$o%s )ha) )he #ieico**issar, ca! o!$, +e ei)her a
chi$ or a "are!) o# )he 1
s)
heir.
1. No. L-27952. February 15, 1982.*
TESTATE ESTATE OF JOSE EUGENIO RAIRE!, ARIA LUISA "ALA#IOS,
A$%&'&()ra)r&*, +e)&)&o'er-a++e,,ee, -(. AR#ELLE .. /.A..E RAIRE!, ET AL.,
o++o(&)or(, JORGE a'$ RO0ERTO RAIRE!, ,e1a)ee(, o++o(&)or(-a++e,,a')(.
FACTS:
Jose Eugenio Ramirez, a Filipino national, died in Spain on December 11, 19!, "it#
onl$ #is "ido" as compulsor$ #eir% &is "ill "as admitted to probate b$ t#e Court o' First
(nstance o' )anila, *ranc# +, on Jul$ ,-, 19.% )aria /uisa 0alacios "as appointed
administratri1 o' t#e estate%
2n June ,3, 19, t#e administratri1 submitted a pro4ect o' partition as 'ollo"s: t#e
propert$ o' t#e deceased is to be di5ided into t"o parts% 2ne part s#all go to t#e "ido" 6en
plenodominio7 in satis'action o' #er legitime8 t#e ot#er part or 6'ree portion7 s#all go to Jorge
and Roberto Ramirez 6en nudapropriedad%7 Furt#ermore, one t#ird 91:3; o' t#e 'ree portion is
c#arged "it# t#e "ido"<s usu'ruct and t#e remaining t"o=t#ird 9,:3; "it# a usu'ruct in 'a5or o'
>anda%
(SS?E:
Does t#e Constitutional pro5ision "#ic# enables aliens to ac@uire pri5ate lands e1tend to
testamentar$ successionA
R?/(BC:
B2% T#e court a @uo up#eld t#e 5alidit$ o' t#e usu'ruct gi5en to >anda on t#e ground
t#at t#e Constitution co5ers not onl$ succession b$ operation o' la" but also testamentar$
succession% T#e Constitutional pro5ision "#ic# enables aliens to ac@uire pri5ate lands does not
e1tend to testamentar$ succession 'or ot#er"ise t#e pro#ibition "ill be 'or naug#t and
meaningless% An$ alien "ould be able to circum5ent t#e pro#ibition b$ pa$ing mone$ to a
0#ilippine lando"ner in e1c#ange 'or a de5ise o' a piece o' land%
Ha1i1i vs CA
G!R! No! 11$7$'
Ma*c; 1+- 1''&
CELSO R! HAL/L/ and ARTH6R R! HAL/L/- 8etitione*s- vs! CO6RT OF A44EALS- HELEN
MEYERS G6?MAN- DA/D REY G6?MAN and EM/L/ANO CATAN/AG- *es8ondents
The #ac)(a$ #i!i!gs o# a )ria$ co(r), %he! a##ir*e +, )he Co(r) o# A""ea$s, *a, !o $o!ger +e
re&ie%e a! re&erse +, )his Co(r) i! a "e)i)io! #or re&ie% (!er R($e 9= o# )he R($es o# Co(r). The
)ra!s#er o# a! i!)eres) i! a "iece o# $a! )o a! a$ie! *a, !o $o!ger +e assai$e o! co!s)i)()io!a$
gro(!s a#)er )he e!)ire "arce$ has +ee! so$ )o a '(a$i#ie ci)iGe!.
T;e Case
These #a*i$iar a! $o!g-se))$e oc)ri!es are a""$ie +, )his Co(r) i! e!,i!g )his "e)i)io! (!er R($e
9= )o se) asie )he Decisio!T1U o# )he Co(r) o# A""ea$sT2U i! CA-GR C> No. 37829 "ro*($ga)e o!
Se")e*+er 19, 1993, )he is"osi)i&e "or)io! o# %hich s)a)es:T3U
M504R4F6R4, a! ("o! a$$ )he #oregoi!g, )he Decisio! o# )he co(r) +e$o% a)e .arch 10, 1992
is*issi!g )he co*"$ai!) #or $ac2 o# *eri) is AFF3R.4D %i)ho() "ro!o(!ce*e!) as )o cos)s.N
T;e Facts
The #ac)(a$ a!)ecee!)s, as !arra)e +, Res"o!e!) Co(r), are !o) is"()e +, )he "ar)ies. 5e
re"ro(ce )he* i! "ar), as #o$$o%s:
MSi*eo! e G(G*a!, a! A*erica! ci)iGe!, ie so*e)i*e i! 1988, $ea&i!g rea$ "ro"er)ies i! )he
/hi$i""i!es. 0is #orce heirs %ere his %io%, e#e!a!) a""e$$ee Therei! "ri&a)e res"o!e!)U 0e$e!
.e,ers G(G*a!, a! his so!, e#e!a!) a""e$$ee Ta$so herei! "ri&a)e res"o!e!)U Da&i Re,
G(G*a!, +o)h o# %ho* are a$so A*erica! ci)iGe!s. 6! A(g(s) 9, 1989, 0e$e! eDec()e a ee o#
'(i)c$ai* :A!!eD A-Co*"$ai!)<, assig!i!gT,U )ra!s#erri!g a! co!&e,i!g )o Da&i Re, a$$ her righ)s,
)i)$es a! i!)eres)s i! a! o&er siD "arce$s o# $a! %hich )he )%o o# )he* i!heri)e #ro* Si*eo!.
A*o!g )he sai "arce$s o# $a! is )ha) !o% i! $i)iga)io!, D D D si)(a)e i! ?ag+ag(i!, S)a. .aria,
?($aca!, co!)ai!i!g a! area o# 8,89= s'(are *e)ers, co&ere +, Tra!s#er Cer)i#ica)e o# Ti)$e No. T-
170=19 o# )he Regis)r, o# Dees o# ?($aca!. The '(i)c$ai* ha&i!g +ee! regis)ere, TCT No. T-
170=19 %as ca!ce$$e a! TCT No. T-1202=9 %as iss(e i! )he !a*e o# a""e$$ee Da&i Re,
G(G*a!.
6! Fe+r(ar, =, 1991, Da&i Re, G(G*a! so$ sai "arce$ o# $a! )o e#e!a!)-a""e$$ee Ta$so herei!
"ri&a)e res"o!e!)U 4*i$ia!o Ca)a!iag, ("o! %hich TCT No. T-1202=9 %as ca!ce$$e a! TCT No. T-
130721:.< %as iss(e i! )he $a))erFs !a*e.NT9U
/e)i)io!ers, %ho are o%!ers o# )he aCoi!i!g $o), #i$e a co*"$ai!) +e#ore )he Regio!a$ Tria$ Co(r) o#
.a$o$os, ?($aca!, '(es)io!i!g )he co!s)i)()io!a$i), a! &a$ii), o#
)he )%o co!&e,a!ces -- +e)%ee! 0e$e! G(G*a! a! Da&i Re, G(G*a!, a! +e)%ee! )he $a))er a!
4*i$ia!o Ca)a!iag -- a! c$ai*i!g o%!ershi" )here)o +ase o! )heir righ) o# $ega$ ree*")io! (!er
Ar). 1821T=Uo# )he Ci&i$ Coe.
3! i)s ecisio!T8U a)e .arch 10, 1992,T7U )he )ria$ co(r) is*isse )he co*"$ai!). 3) r($e )ha) 0e$e!
G(G*a!Fs %ai&er o# her i!heri)a!ce i! #a&or o# her so! %as !o) co!)rar, )o )he co!s)i)()io!a$
"rohi+i)io! agai!s) )he sa$e o# $a! )o a! a$ie!, si!ce )he "(r"ose o# )he %ai&er %as si*"$, )o
a()horiGe Da&i Re, G(G*a! )o is"ose o# )heir "ro"er)ies i! accora!ce %i)h )he Co!s)i)()io! a!
)he $a%s o# )he /hi$i""i!es, a! !o) )o s(+&er) )he*. 6! )he seco! iss(e, i) he$ )ha) )he s(+Cec)
$a! %as (r+a!P he!ce, "e)i)io!ers ha !o reaso! )o i!&o2e )heir righ) o# ree*")io! (!er Ar). 1821
o# )he Ci&i$ Coe.
The 0a$i$is so(gh) a re&ersa$ #ro* )he Co(r) o# A""ea$s %hich, ho%e&er, e!ie )heir a""ea$.
Res"o!e!) Co(r) a##ir*e )he #ac)(a$ #i!i!g o# )he )ria$ co(r) )ha) )he s(+Cec) $a! %as (r+a!. Ci)i!g
TeCio &s. Va*aco*aT8U a! Ba" &s. Gragea,T9U i) #(r)her he$ )ha), a$)ho(gh )he )ra!s#er o# )he $a!
)o Da&i Re, *a, ha&e +ee! i!&a$i #or +ei!g co!)rar, )o )he Co!s)i)()io!, )here %as !o *ore "oi!) i!
a$$o%i!g herei! "e)i)io!ers )o reco&er )he "ro"er),, si!ce i) has "asse o! )o a! %as )h(s a$rea,
o%!e +, a '(a$i#ie "erso!.
0e!ce, )his "e)i)io!.
/ss0es
The "e)i)io! s(+*i)s )he #o$$o%i!g assig!*e!) o# errors:
MD D D )he 0o!ora+$e Co(r) o# A""ea$s -
4rre i! a##ir*i!g )he co!c$(sio! o# )he )ria$ co(r) )ha) )he $a! i! '(es)io! is (r+a!, !o) r(ra$
4rre i! e!,i!g "e)i)io!ersF righ) o# ree*")io! (!er Ar). 1821 o# )he Ci&i$ Coe
0a&i!g co!siere )he co!&e,a!ce #ro* 0e$e! .e,ers G(G*a! )o her so! Da&i Re,
G(G*a! i$$ega$, erre i! !o) ec$ari!g )he sa*e !($$ a! &oiT.UNT11U
T;e Co0*tKs R01ing
The "e)i)io! has !o *eri).
Firs) 3ss(e: The La! 3s -r+a!P
Th(s, No Righ) o# Ree*")io!
The #irs) )%o errors assig!e +, "e)i)io!ers +ei!g i!)erre$a)e -- )he e)er*i!a)io! o# )he #irs) +ei!g a
"rere'(isi)e )o )he reso$()io! o# )he seco! -- sha$$ +e isc(sse )oge)her.
S(+Cec) La! 3s -r+a!
5he)her )he $a! i! is"()e is r(ra$ or (r+a! is a #ac)(a$ '(es)io! %hich, as a r($e, is !o) re&ie%a+$e
+, )his Co(r).T12U ?asic a! $o!g-se))$e is )he oc)ri!e )ha) #i!i!gs o# #ac) o# a )ria$ C(ge, %he!
a##ir*e +, )he Co(r) o# A""ea$s, are +i!i!g ("o! )he S("re*e Co(r). This a*i)s o# o!$, a #e%
eDce")io!s, s(ch as %he! )he #i!i!gs are gro(!e e!)ire$, o! s"ec($a)io!, s(r*ises or co!Cec)(resP
%he! a! i!#ere!ce *ae +, )he a""e$$a)e co(r) #ro* i)s #ac)(a$ #i!i!gs is *a!i#es)$, *is)a2e!, a+s(r
or i*"ossi+$eP %he! )here is gra&e a+(se o# iscre)io! i! )he a""recia)io! o# #ac)sP %he! )he #i!i!gs
o# )he a""e$$a)e co(r) go +e,o! )he iss(es o# )he case, r(! co!)rar, )o )he a*issio!s o# )he "ar)ies
)o )he case or #ai$ )o !o)ice cer)ai! re$e&a!) #ac)s %hich, i# "ro"er$, co!siere, %i$$ C(s)i#, a i##ere!)
co!c$(sio!P %he! )here is a *isa""recia)io! o# #ac)sP %he! )he #i!i!gs o# #ac) are co!c$(sio!s %i)ho()
*e!)io! o# )he s"eci#ic e&ie!ce o! %hich )he, are +ase, are "re*ise o! )he a+se!ce o# e&ie!ce
or are co!)raic)e +, e&ie!ce o! recor.T13U
The i!s)a!) case oes !o) #a$$ %i)hi! a!, o# )he a#oreci)e eDce")io!s. 3! #ac), )he co!c$(sio! o# )he
)ria$ co(r) -- )ha) )he s(+Cec) "ro"er), is (r+a! $a! -- is +ase o! c$ear a! co!&i!ci!g e&ie!ce, as
sho%! i! i)s ecisio! %hich is"ose )h(s:
MD D D As o+ser&e +, )he co(r), a$*os) a$$ )he roasies a$o!g )he !a)io!a$ ghigh%a, TsicU o#
?ag+ag(i!, S)a. .aria, ?($aca!, are $i!e (" %i)h resie!)ia$, co**ercia$ or i!(s)ria$
es)a+$ish*e!)s. Li!e (" a$o!g )he ?ag+ag(i! Roa are #ac)ories o# #ees, %oocra#)s TsicU a!
gar*e!)s, co**ercia$ s)ores #or )ires, ("ho$s)er, *a)eria$s, #ees s(""$, a! s"are "ar)s. Loca)e
)herei! $i2e%ise %ere )he /e"si-Co$a 5areho(se, )he Cr(G 0os"i)a$, )hree gaso$i!e s)a)io!s,
a"ar)*e!) +(i$i!gs #or co**ercia$ "(r"oses a! co!s)r(c)io! #ir*s. There is !o o(+), )here#ore,
)ha) )he co**(!i), is a co**ercia$ area )hri&i!g i! +(si!ess ac)i&i)ies. 6!$, a shor) "or)io! o# sai
roa TisU &aca!). 3) is )o +e !o)e )ha) i! )he TaD Dec$ara)io! i! )he !a*e o# 0e$e! .e,ers G(G*a!T,U
)he s(+Cec) $a! is )er*e agric($)(ra$T,U %hi$e i! )he $e))er aresse )o e#e!a!) 4*i$ia!o Ca)a!iag,
a)e 6c)o+er 3, 1991, )he La! Reg($a)or, ?oar a))es)e )ha) )he s(+Cec) "ro"er), is co**ercia$
a! )he )re! o# e&e$o"*e!) a$o!g )he roa is co**ercia$. The ?oarFs c$assi#ica)io! is +ase o!
)he "rese!) co!i)io! o# )he "ro"er), a! )he co**(!i), )herea). Sai c$assi#ica)io! is #ar *ore $a)er
TsicU )ha! )he )aD ec$ara)io!.NT19U
No Gro(! )o 3!&o2e Righ) o# Ree*")io!
3! &ie% o# )he #i!i!g )ha) )he s(+Cec) $a! is (r+a! i! charac)er, "e)i)io!ers ha&e i!ee !o righ) )o
i!&o2e Ar). 1821 o# )he Ci&i$ Coe, %hich "res(""oses )ha) )he $a! so(gh) )o +e reee*e is r(ra$.
The "ro&isio! is c$ear$, %ore a! a*i)s o# !o a*+ig(i), i! co!s)r(c)io!:
MART. 1821. The o%!ers o# aCoi!i!g $a!s sha$$ a$so ha&e )he righ) o# ree*")io! %he! a "iece o#
r(ra$ $a!, )he area o# %hich oes !o) eDcee o!e hec)are, is a$ie!a)e, (!$ess )he gra!)ee oes !o)
o%! a!, r(ra$ $a!.
DDD DDD DDDN
-!er )his ar)ic$e, +o)h $a!s -- )ha) so(gh) )o +e reee*e a! )he aCace!) $o) +e$o!gi!g )o )he
"erso! eDercisi!g )he righ) o# ree*")io! -- *(s) +e r(ra$. 3# o!e or +o)h are (r+a!, )he righ) ca!!o)
+e i!&o2e.T1=U The "(r"ose o# )his "ro&isio! %hich is $i*i)e i! sco"e )o r(ra$ $a!s !o) eDceei!g
o!e hec)are, is )o #a&or agric($)(ra$ e&e$o"*e!).T18U The s(+Cec) $a! !o) +ei!g r(ra$ a!, )here#ore,
!o) agric($)(ra$, )his "(r"ose %o($ !o) +e ser&e i# "e)i)io!ers are gra!)e )he righ) o# ree*")io!
(!er Ar). 1821. /$ai!$,, (!er )he circ(*s)a!ces, )he, ca!!o) i!&o2e i).
Seco! 3ss(e: Sa$e )o Ca)a!iag >a$i
Nei)her o %e #i! a!, re&ersi+$e error i! )he a""e$$a)e co(r)Fs ho$i!g )ha) )he sa$e o# )he s(+Cec) $a!
)o /ri&a)e Res"o!e!) Ca)a!iag re!ers *oo) a!, '(es)io! o! )he co!s)i)()io!a$i), o# )he "rior
)ra!s#er *ae +, 0e$e! G(G*a! )o her so! Da&i Re,.
Tr(e, 0e$e! G(G*a!Fs ee o# '(i)c$ai* -- i! %hich she assig!e, )ra!s#erre a! co!&e,e )o Da&i
Re, a$$ her righ)s, )i)$es a! i!)eres)s o&er )he "ro"er), she ha i!heri)e #ro* her h(s+a! -- co$$ie
%i)h )he Co!s)i)()io!, Ar)ic$e I33, Sec)io! 7 o# %hich "ro&ies:
MS4C. 7. Sa&e i! cases o# herei)ar, s(ccessio!, !o "ri&a)e $a!s sha$$ +e )ra!s#erre or co!&e,e
eDce") )o i!i&i(a$s, cor"ora)io!s, or associa)io!s '(a$i#ie )o ac'(ire or ho$ $a!s o# )he "(+$ic
o*ai!.N
The $a!*ar2 case o# 1ri&e!2o &s. Regis)er o# DeesT17U se))$e )he iss(e as )o %ho are '(a$i#ie
:a! is'(a$i#ie< )o o%! "(+$ic as %e$$ as "ri&a)e $a!s i! )he /hi$i""i!es. Fo$$o%i!g a $o!g isco(rse
*ai!)ai!i!g )ha) )he M"(+$ic agric($)(ra$ $a!sN *e!)io!e i! Sec)io! 1, Ar)ic$e I333 o# )he 193=
Co!s)i)()io!, i!c$(e resie!)ia$, co**ercia$ a! i!(s)ria$ $a!s, )he Co(r) )he! s)a)e:
M-!er sec)io! 1 o# Ar)ic$e I333 T!o% Sec. 2, Ar). I33U o# )he Co!s)i)()io!, S!a)(ra$ reso(rces, %i)h )he
eDce")io! o# "(+$ic agric($)(ra$ $a!, sha$$ !o) +e a$ie!a)e,F a! %i)h res"ec) )o "(+$ic agric($)(ra$
$a!s, )heir a$ie!a)io! is $i*i)e )o Fi$i"i!o ci)iGe!s. ?() )his co!s)i)()io!a$ "(r"ose co!ser&i!g
agric($)(ra$ reso(rces i! )he ha!s o# Fi$i"i!o ci)iGe!s *a, easi$, +e e#ea)e +, )he Fi$i"i!o ci)iGe!s
)he*se$&es %ho *a, a$ie!a)e )heir agric($)(ra$ $a!s i! #a&or o# a$ie!s. 3) is "ar)$, )o "re&e!) )his
res($) )ha) sec)io! = is i!c$(e i! Ar)ic$e I333, a! i) reas as #o$$o%s:
SSec. =. Sa&e i! cases o# herei)ar, s(ccessio!, !o "ri&a)e agric($)(ra$ $a! %i$$ +e )ra!s#erre or
assig!e eDce") )o i!i&i(a$s, cor"ora)io!s or associa)io!s '(a$i#ie )o ac'(ire or ho$ $a!s o# )he
"(+$ic o*ai! i! )he /hi$i""i!es.F
This co!s)i)()io!a$ "ro&isio! c$oses )he o!$, re*ai!i!g a&e!(e )hro(gh %hich agric($)(ra$ reso(rces
*a, $ea2 i!)o a$ie!sF ha!s. 3) %o($ cer)ai!$, +e #()i$e )o "rohi+i) )he a$ie!a)io! o# "(+$ic agric($)(ra$
$a!s )o a$ie!s i#, a#)er a$$, )he, *a, +e #ree$, so a$ie!a)e ("o! )heir +eco*i!g "ri&a)e agric($)(ra$
$a!s i! )he ha!s o# Fi$i"i!o ci)iGe!s. -!o(+)e$,, as a+o&e i!ica)e, sec)io! = T!o% Sec. 7U is
i!)e!e )o i!s(re )he "o$ic, o# !a)io!a$iGa)io! co!)ai!e i! sec)io! 1 T!o% Sec. 2U. ?o)h sec)io!s
*(s), )here#ore, +e rea )oge)her #or )he, ha&e )he sa*e "(r"ose a! )he sa*e s(+Cec) *a))er. 3)
*(s) +e !o)ice )ha) )he "erso!s agai!s) %ho* )he "rohi+i)io! is irec)e i! sec)io! = T!o% Sec. 7U
are )he &er, sa*e "erso!s %ho (!er sec)io! 1 T!o% Sec. 2U are is'(a$i#ie S)o ac'(ire or ho$ $a!s
o# )he "(+$ic o*ai! i! )he /hi$i""i!es.F A! )he s(+Cec) *a))er o# +o)h sec)io!s is )he sa*e, !a*e$,,
)he !o! )ra!s#era+i$i), o# Sagric($)(ra$ $a!F )o a$ie!s. D D DNT18U
The 1ri&e!2o r($e %as rece!)$, rei)era)e i! 6!g Chi!g /o &s. Co(r) o# A""ea$s,T19U %hich
i!&o$&es a sa$e o# $a! )o a Chi!ese ci)iGe!. The Co(r) sai:
MThe ca"aci), )o ac'(ire "ri&a)e $a! is *ae e"e!e!) ("o! )he ca"aci), )o ac'(ire or ho$ $a!s o#
)he "(+$ic o*ai!. /ri&a)e $a! *a, +e )ra!s#erre or co!&e,e o!$, )o i!i&i(a$s or e!)i)ies
S'(a$i#ie )o ac'(ire $a!s o# )he "(+$ic o*ai!F :33 ?er!as, The Co!s)i)()io! o# )he /hi$i""i!es 939-990
T1988 e.U<.
The 193= Co!s)i)()io! reser&e )he righ) )o "ar)ici"a)e i! )he Sis"osi)io!, eD"$oi)a)io!, e&e$o"*e!)
a! ()i$iGa)io!F o# a$$ S$a!s o# )he "(+$ic o*ai! a! o)her !a)(ra$ reso(rces o# )he /hi$i""i!esF #or
Fi$i"i!o ci)iGe!s or cor"ora)io!s a) $eas) siD), "erce!) o# )he ca"i)a$ o# %hich %as o%!e +, Fi$i"i!os.
A$ie!s, %he)her i!i&i(a$s or cor"ora)io!s, ha&e +ee! is'(a$i#ie #ro* ac'(iri!g "(+$ic $a!sP he!ce,
)he, ha&e a$so +ee! is'(a$i#ie #ro* ac'(iri!g "ri&a)e $a!s.NT20U
3! #i!e, !o!-Fi$i"i!os ca!!o) ac'(ire or ho$ )i)$e )o "ri&a)e $a!s or )o $a!s o# )he "(+$ic o*ai!,
eDce") o!$, +, %a, o# $ega$ s(ccessio!.T21U
?() %ha) is )he e##ec) o# a s(+se'(e!) sa$e +, )he is'(a$i#ie a$ie! &e!ee )o a '(a$i#ie Fi$i"i!o
ci)iGe!R This is !o) a !o&e$ '(es)io!. 7(ris"r(e!ce is co!sis)e!) )ha) Mi# $a! is i!&a$i$, )ra!s#erre
)o a! a$ie! %ho s(+se'(e!)$, +eco*es a ci)iGe! or )ra!s#ers i) )o a ci)iGe!, )he #$a% i! )he origi!a$
)ra!sac)io! is co!siere c(re a! )he )i)$e o# )he )ra!s#eree is re!ere &a$i.NT22U
Th(s, i! -!i)e Ch(rch ?oar o# 5or$ .i!is)ries &s. Se+as)ia!,T23U i! %hich a! a$ie! resie!) %ho
o%!e "ro"er)ies i! )he /hi$i""i!es e&ise )o a! A*erica! !o!-s)oc2 cor"ora)io! "ar) o# his shares
o# s)oc2 i! a Fi$i"i!o cor"ora)io! )ha) o%!e a )rac) o# $a! i! Da&ao e$ Nor)e, )he Co(r) s(s)ai!e
)he i!&a$ii), o# s(ch $egac,. 0o%e&er, ("o! "roo# )ha) o%!ershi" o# )he A*erica! cor"ora)io! has
"asse o! )o a 100 "erce!) Fi$i"i!o cor"ora)io!, )he Co(r) r($e )ha) )he e#ec) i! )he %i$$ %as
Mrec)i#ie +, )he s(+se'(e!) )ra!s#er o# )he "ro"er),.N
The "rese!) case is si*i$ar )o De Cas)ro &s. Ta!.T29U 3! )ha) case, a resie!)ia$ $o) %as so$ )o a
Chi!ese. -"o! his ea)h, his %io% a! chi$re! eDec()e a! eD)raC(icia$ se))$e*e!), %here+, sai
$o) %as a$$o))e )o o!e o# his so!s %ho +eca*e a !a)(ra$iGe Fi$i"i!o. The Co(r) i !o) a$$o% )he
origi!a$ &e!or )o ha&e )he sa$e a!!($$e a! )o reco&er )he "ro"er),, #or )he reaso! )ha) )he $a! has
si!ce +eco*e )he "ro"er), o# a !a)(ra$iGe Fi$i"i!o ci)iGe! %ho is co!s)i)()io!a$$, '(a$i#ie )o o%!
$a!.
Li2e%ise, i! )he cases o# Sarsosa &s. C(e!co,T2=U Goi!eG &s. /a2 L(e!,T28U >as'(eG &s. Li Se!g
Gia"T27U a! 0errera &s. L(, 1i* G(a!,T28U %hich si*i$ar$, i!&o$&e )he sa$e o# $a! )o a! a$ie! %ho
)herea#)er so$ )he sa*e )o a Fi$i"i!o ci)iGe!, )he Co(r) agai! a""$ie )he r($e )ha) )he s(+se'(e!) sa$e
ca! !o $o!ger +e i*"(g!e o! )he +asis o# )he i!&a$ii), o# )he i!i)ia$ )ra!s#er.
The ra)io!a$e o# )his "ri!ci"$e %as eD"$ai!e i! >as'(eG &s. Li Se!g Gia" )h(s:
MD D D T3U# )he +a! o! a$ie!s #ro* ac'(iri!g !o) o!$, agric($)(ra$ +() a$so (r+a! $a!s, as co!s)r(e +,
)his Co(r) i! )he 1ri&e!2o case, is )o "reser&e )he !a)io!Fs $a!s #or #()(re ge!era)io!s o# Fi$i"i!os,
)ha) ai* or "(r"ose %o($ !o) +e )h%ar)e +() achie&e +, *a2i!g $a%#($ )he ac'(isi)io! o# rea$
es)a)e +, a$ie!s %ho +eca*e Fi$i"i!o ci)iGe!s +, !a)(ra$iGa)io!.NT29U
Accori!g$,, si!ce )he is"()e $a! is !o% o%!e +, /ri&a)e Res"o!e!) Ca)a!iag, a Fi$i"i!o ci)iGe!,
)he "rior i!&a$i )ra!s#er ca! !o $o!ger +e assai$e. The o+Cec)i&e o# )he co!s)i)()io!a$ "ro&isio! -- )o
2ee" o(r $a! i! Fi$i"i!o ha!s -- has +ee! ser&e.
504R4F6R4, )he "e)i)io! is here+, D4N34D. The cha$$e!ge Decisio! is AFF3R.4D. Cos)s
agai!s) "e)i)io!er.
S6 6RD4R4D.
Lee vs Re80)1ic
LEE S! RE469L/C OF THE 4H/L/44/NES
FACTS:
The case (!er co!siera)io! is a "e)i)io! #or re&ie% o! certiorari o# )he ecisio! o# )he Co(r) o#
A""ea$s !($$i#,i!g )ha) o# )he Regio!a$ Tria$ Co(r), RoDas Ci),, i! Reco!s)i)()io! Case No. R-1928,
"er)ai!i!g )o Lo) 398, Ca"iG Caas)re, co&ere +, 6rigi!a$ Cer)i#ica)e o# Ti)$e No. 3389. So*e)i*e i!
.arch 1938, Ra#ae$, Car*e!, Fra!cisco, 7r., Ra*o!, Lo(res, .ercees, Co!ce"cio!, .aria!o,
7ose, Lore)o, .a!(e$, RiGa$ a! 7i**,, a$$ s(r!a*e Di!g$asa! so$ )o Lee Lio!g, a Chi!ese ci)iGe!,
a "arce$ o# $a! %i)h a! a""roDi*a)e area o# 1,831 s'(are *e)ers, esig!a)e as Lo) 398 a!
co&ere +, 6rigi!a$ Cer)i#ica)e o# Ti)$e No. 3389, si)(a)e a) )he cor!er o# RoDas A&e!(e a! /a&ia
S)ree), RoDas Ci),.0o%e&er, i! 1998, )he #or*er o%!ers #i$e %i)h )he Co(r) o# Firs) 3!s)a!ce, Ca"iG
a! ac)io! agai!s) )he heirs o# Lee Lio!g #or a!!($*e!) o# sa$e a! reco&er, o# $a!. The "$ai!)i##s
assai$e )he &a$ii), o# )he sa$e +eca(se o# )he co!s)i)()io!a$ "rohi+i)io! agai!s) a$ie!s ac'(iri!g
o%!ershi" o# "ri&a)e agric($)(ra$ $a!, i!c$(i!g resie!)ia$, co**ercia$ or i!(s)ria$ $a!. Re+(##e i!
)he )ria$ co(r) a! )he Co(r) o# A""ea$s, "$ai!)i##s a""ea$e )o )he S("re*e Co(r). The S("re*e Co(r)
r($e )ha) gra!)i!g )he sa$e )o +e !($$ a! &oi a! ca! !o) gi&e )i)$e )o )he &e!ee, i) oes !o)
!ecessari$, #o$$o% )here#ro* )ha) )he )i)$e re*ai!e i! )he &e!or, %ho ha a$so &io$a)e )he
co!s)i)()io!a$ "rohi+i)io!, or )ha) he :&e!or< has )he righ) )o reco&er )he )i)$e o# %hich he has i&es)e
hi*se$# +, his ac) i! ig!ori!g )he "rohi+i)io!. The! )he sa*e o%!ers #i$e a! ac)io! #or )he reco&er, o#
)he $a! a! )he heirs o# Lee Lio!g #i$e a *o)io! )o is*iss i) +() )he )ria$ co(r) e!ie i). 6!
Se")e*+er 7, 1993, 4$iGa+e)h .a!(e$-Lee a! /aci)a B( Lee #i$e %i)h )he Regio!a$ Tria$ Co(r),
RoDas Ci), a "e)i)io! #or reco!s)i)()io! o# )i)$e o# Lo) No. 398 o# )he Ca"iG Caas)re, #or*er$, co&ere
+, 6rigi!a$ Cer)i#ica)e o# Ti)$e No. 3389 o# )he Regis)er o# Dees o# RoDas Ci),. 6! 7a!(ar, 2=, 199=,
)he So$ici)or Ge!era$ #i$e %i)h )he Co(r) o# A""ea$s a "e)i)io! #or a!!($*e!) o# C(g*e!) i!
Reco!s)i)()io! Case No. 1928, a$$egi!g )ha) )he Regio!a$ Tria$ Co(r), RoDas Ci), ha !o C(risic)io!
o&er )he case.
3ss(e: 5he)her or !o) )he sa$e o# $a! )o a$ie!s is &io$a+$e (!er )he 193= Co!s)i)()io!.
The #ac) )ha) )he Co(r) i !o) a!!($ )he sa$e o# )he $a! )o a! a$ie! i !o) &a$ia)e )he )ra!sac)io!,
#or i) %as s)i$$ co!)rar, )o )he co!s)i)()io!a$ "roscri")io! agai!s) a$ie!s ac'(iri!g $a!s o# )he "(+$ic or
"ri&a)e o*ai!. A$)ho(gh o%!ershi" o# )he $a! ca!!o) re&er) )o )he origi!a$ se$$ers, +eca(se o# )he
oc)ri!e o# pari delicto, )he So$ici)or Ge!era$ *a, i!i)ia)e a! ac)io! #or re&ersio! or eschea) o# )he $a!
)o )he S)a)e, s(+Cec) )o o)her e#e!ses, as herea#)er se) #or)h. The co!s)i)()io!a$ "roscri")io! o! a$ie!
o%!ershi" o# $a!s o# )he "(+$ic or "ri&a)e o*ai! %as i!)e!e )o "ro)ec) $a!s #ro* #a$$i!g i! )he
ha!s o# !o!-Fi$i"i!os. 3! )his case, ho%e&er, )here %o($ +e !o *ore "(+$ic "o$ic, &io$a)e si!ce )he
$a! is i! )he ha!s o# Fi$i"i!os '(a$i#ie )o ac'(ire a! o%! s(ch $a!. The Co(r) R4>4RS4S a!
S4TS AS3D4 )he ecisio! o# )he Co(r) o# A""ea$s i! CA-G. R. S/ No. 38279. 3! $ie( )hereo#, )he
Co(r) se)s asie )he orer o# reco!s)i)()io! o# )i)$e i! Reco!s)i)()io! Case No. R-1928, Regio!a$ Tria$
Co(r), RoDas Ci),, a! is*isses )he "e)i)io!, %i)ho() "reC(ice.
ALFRED FR/T? FREN?EL- 8etitione*- vs! EDERL/NA 4! CAT/TO- *es8ondent!
Facts:
/e)i)io!er A$#re Fri)G Fre!Ge$ is a! A(s)ra$ia! ci)iGe! o# Ger*a! esce!). 0e is a! e$ec)rica$
e!gi!eer +, "ro#essio!, +() %or2e as a "i$o) %i)h )he Ne% G(i!ea Air$i!es. 0e arri&e i! )he
/hi$i""i!es i! 1979, s)ar)e e!gagi!g i! +(si!ess i! )he co(!)r,P )%o ,ears )herea#)er, he
*arrie Teresi)a Sa!)os, a Fi$i"i!o ci)iGe!.
3! 1981, A$#re a! Teresi)a se"ara)e #ro* +e a! +oar %i)ho() o+)ai!i!g a i&orce. 3! 1983, A$#re
arri&e i! S,!e,, A(s)ra$ia #or a &aca)io!. 0e %e!) )o 1i!gFs Cross, a !igh) s"o) i! S,!e,, #or a
*assage %here he *e) 4er$i!a Ca)i)o, a Fi$i"i!a a! a !a)i&e o# ?aCaa, Da&ao Ci),.
-!2!o%! )o A$#re, she resie #or a )i*e i! Ger*a!, a! %as *arrie )o 1$a(s .($$er, a Ger*a!
!a)io!a$. She $e#) Ger*a!, a! )rie her $(c2 i! S,!e,, A(s)ra$ia, %here she #o(! e*"$o,*e!) as a
*asse(se i! )he 1i!gFs Cross !igh)c$(+.
A$#re %as so e!a*ore %i)h 4er$i!a )ha) he "ers(ae her )o s)o" %or2i!g a) 1i!gFs Cross, re)(r!
)o )he /hi$i""i!es, a! e!gage i! a %ho$eso*e +(si!ess o# her o%!. 0e a$so "ro"ose )ha) )he, *ee)
i! .a!i$a, )o %hich she asse!)e. A$#re ga&e her *o!e, #or her "$a!e #are )o )he /hi$i""i!es. 5i)hi!
)%o %ee2s o# 4er$i!aFs arri&a$ i! .a!i$a, A$#re Coi!e her. A$#re rei)era)e his "ro"osa$ #or 4er$i!a
)o s)a, i! )he /hi$i""i!es a! e!gage i! +(si!ess, e&e! o##eri!g )o #i!a!ce her +(si!ess &e!)(re.
4er$i!a %as e$igh)e a) )he iea a! "ro"ose )o "() (" a +ea(), "ar$or. A$#re ha""i$, agree.
A$#re )o$ 4er$i!a )ha) he %as *arrie +() )ha) he %as eager )o i&orce his %i#e i! A(s)ra$ia. A$#re
"ro"ose *arriage )o 4er$i!a, +() she re"$ie )ha) )he, sho($ %ai) a $i))$e +i) $o!ger.
A$#re %e!) +ac2 )o /a"(a Ne% G(i!ea )o res(*e his %or2 as a "i$o).
Si!ce A$#re 2!e% )ha) as a! a$ie! he %as is'(a$i#ie #ro* o%!i!g $a!s i! )he /hi$i""i!es, he
agree )ha) o!$, 4er$i!aFs !a*e %o($ a""ear i! )he ee o# sa$e as )he +(,er o# )he "ro"er),, as
%e$$ as i! )he )i)$e co&eri!g )he sa*e. A#)er a$$, he %as "$a!!i!g )o *arr, 4er$i!a a! he +e$ie&e )ha)
a#)er )heir *arriage, )he )%o o# )he* %o($ Coi!)$, o%! )he "ro"er),.
5he! 4er$i!a $e#) #or Ger*a!, )o &isi) 1$a(s, she ha her #a)her Narciso Ca)i)o a! her )%o sis)ers
occ(", )he "ro"er),.
A$#re ecie )o s)a, i! )he /hi$i""i!es #or goo a! $i&e %i)h 4er$i!a. 0e re)(r!e )o A(s)ra$ia a!
so$ his #i+er g$ass "$eas(re +oa) )o 7oh! Rei i! 1989. 0e a$so so$ his )e$e&isio! a! &ieo +(si!ess
i! /a"(a Ne% G(i!ea. 0e ha his "erso!a$ "ro"er)ies shi""e )o )he /hi$i""i!es a! s)ore a) Sa!
Fra!cisco e$ .o!)e, X(eGo! Ci),.
6! 7($, 28, 1989, %hi$e A$#re %as i! /a"(a Ne% G(i!ea, he recei&e a Le))er a)e Dece*+er 7,
1983 #ro* 1$a(s .($$er %ho %as )he! resii!g i! ?er$i!, Ger*a!,. 1$a(s i!#or*e A$#re )ha) he a!
4er$i!a ha +ee! *arrie o! 6c)o+er 18, 1978 a! ha a +$iss#($ *arrie $i#e (!)i$ A$#re i!)r(e
)herei!.
1$a(s s)a)e )ha) he 2!e% o# A$#re a! 4er$i!aFs a*oro(s re$a)io!shi", a! isco&ere )he sa*e
so*e)i*e i! No&e*+er 1983 %he! he arri&e i! .a!i$a. 0e a$so +egge A$#re )o $ea&e 4er$i!a
a$o!e a! )o re)(r! her )o hi*, sa,i!g )ha) A$#re co($ !o) "ossi+$, +(i$ his #()(re o! his :1$a(sF<
*is#or)(!e.
A$#re ha occasio! )o )a$2 )o Sa$$, .acCarro!, a c$ose #rie! o# 4er$i!a. 0e i!'(ire i# )here %as
a!, )r()h )o 1$a(sF s)a)e*e!)s a! Sa$$, co!#ir*e )ha) 1$a(s %as *arrie )o 4er$i!a.
5he! A$#re co!#ro!)e 4er$i!a, she a*i))e )ha) she a! 1$a(s %ere, i!ee, *arrie. ?() she
ass(re A$#re )ha) she %o($ i&orce 1$a(s. A$#re %as a""ease. 0e agree )o co!)i!(e )he
a*oro(s re$a)io!shi" a! %ai) #or )he o()co*e o# 4er$i!aFs "e)i)io! #or i&orce. A#)er a$$, he i!)e!e
)o *arr, her. 0e re)ai!e )he ser&ices o# Rech)sa!%]$)i! ?a!Gha# %i)h o##ices i! ?er$i!, as her co(!se$
%ho i!#or*e her o# )he "rogress o# )he "roceei!gs. A$#re "ai #or )he ser&ices o# )he $a%,er.
4er$i!a o#)e! %ro)e $e))ers )o her #a*i$, i!#or*i!g )he* o# her $i#e %i)h A$#re. 3! a Le))er a)e
7a!(ar, 21, 198=, she %ro)e a+o() ho% A$#re ha #i!a!ce )he "(rchases o# so*e rea$ "ro"er)ies,
)he es)a+$ish*e!) o# her +ea(), "ar$or +(si!ess, a! her "e)i)io! )o i&orce 1$a(s.
3! )he *ea!)i*e, 4er$i!aFs "e)i)io! #or i&orce %as e!ie +eca(se 1$a(s o""ose )he sa*e. A
seco! "e)i)io! #i$e +, her *e) )he sa*e #a)e. 1$a(s %a!)e ha$# o# a$$ )he "ro"er)ies o%!e +,
4er$i!a i! )he /hi$i""i!es +e#ore he %o($ agree )o a i&orce. 5orse, 1$a(s )hrea)e!e )o #i$e a
+iga*, case agai!s) 4er$i!a.
A$#re "ro"ose )he crea)io! o# a "ar)!ershi" )o 4er$i!a, or as a! a$)er!a)i&e, )he es)a+$ish*e!) o# a
cor"ora)io!, %i)h 4er$i!a o%!i!g 30Z o# )he e'(i), )hereo#. She i!i)ia$$, agree )o "() (" a
cor"ora)io! a! co!)ac)e A)),. Ar*a!o Do*i!g(eG )o "re"are )he !ecessar, oc(*e!)s. 4er$i!a
cha!ge her *i! a) )he $as) *i!()e %he! she %as a&ise )o i!sis) o! c$ai*i!g o%!ershi" o&er )he
"ro"er)ies ac'(ire +, )he* (ri!g )heir co&er)(re.
A$#re a! 4er$i!aFs re$a)io!shi" s)ar)e e)eriora)i!g. 4er$i!a ha !o) +ee! a+$e )o sec(re a i&orce
#ro* 1$a(s. The $a))er co($ charge her #or +iga*, a! co($ e&e! i!&o$&e A$#re, %ho hi*se$# %as
s)i$$ *arrie. To a&oi co*"$ica)io!s, A$#re ecie )o $i&e se"ara)e$, #ro* 4er$i!a a! c() o## a$$
co!)ac)s %i)h her. 3! o!e o# her $e))ers )o A$#re, 4er$i!a co*"$ai!e )ha) he ha r(i!e her $i#e. She
a*i))e )ha) )he *o!e, (se #or )he "(rchase o# )he "ro"er)ies i! Da&ao %ere his. She o##ere )o
co!&e, )he "ro"er)ies eee )o her +, A)),. .aroecheo Ca*"oreo!o a! Roo$#o .ore$os,
as2i!g A$#re )o "re"are her a##ia&i) #or )he sai "(r"ose a! se! i) )o her #or her sig!a)(re. The $as)
s)ra% #or A$#re ca*e o! Se")e*+er 2, 198=, %he! so*eo!e s*ashe )he #ro!) a! rear %i!shie$s
o# A$#reFs car a! a*age )he %i!o%s. A$#re )herea#)er eDec()e a! a##ia&i)-co*"$ai!) chargi!g
4er$i!a a! Sa$$, .acCarro! %i)h *a$icio(s *ischie#.
6! 6c)o+er 1=, 198=, A$#re %ro)e )o 4er$i!aFs #a)her, co*"$ai!i!g )ha) 4er$i!a ha )a2e! a$$ his $i#e
sa&i!gs a! +eca(se o# )his, he %as &ir)(a$$, "e!!i$ess. 0e #(r)her acc(se )he Ca)i)o #a*i$, o#
ac'(iri!g #or )he*se$&es )he "ro"er)ies he ha "(rchase %i)h his o%! *o!e,. 0e e*a!e )he
re)(r! o# a$$ )he a*o(!)s )ha) 4er$i!a a! her #a*i$, ha Ms)o$e!N a! )(r! o&er a$$ )he "ro"er)ies
ac'(ire +, hi* a! 4er$i!a (ri!g )heir co&er)(re.
A$#re #i$e a Co*"$ai!) a)e 6c)o+er 28, 198=, agai!s) 4er$i!a, %i)h )he Regio!a$ Tria$ Co(r) o#
X(eGo! Ci),, #or reco&er, o# rea$ a! "erso!a$ "ro"er)ies $oca)e i! X(eGo! Ci), a! .a!i$a. 3! his
co*"$ai!), A$#re a$$ege, i!)er a$ia, )ha) 4er$i!a, %i)ho() his 2!o%$ege a! co!se!), *a!age )o
)ra!s#er #(!s #ro* )heir Coi!) acco(!) i! 0S?C 0o!g 1o!g, )o her o%! acco(!) %i)h )he sa*e +a!2.
-si!g )he sai #(!s, 4er$i!a %as a+$e )o "(rchase )he "ro"er)ies s(+Cec) o# )he co*"$ai!)s. 0e a$so
a$$ege )ha) )he +ea(), "ar$or i! 4r*i)a %as es)a+$ishe %i)h his o%! #(!s, a! )ha) )he X(eGo! Ci),
"ro"er), %as $i2e%ise ac'(ire +, hi* %i)h his "erso!a$ #(!s.
4er$i!a #ai$e )o #i$e her a!s%er a! %as ec$are i! e#a($). A$#re a(ce his e&ie!ce eD-"ar)e.
A$#re "ra,e )ha) a#)er heari!g, C(g*e!) +e re!ere i! his #a&or. /ss0es:
5he)her )he Co(r) o# A""ea$s erre i! a""$,i!g )he r($e o# 3! /ari De$ic)o si!ce +o)h
"ar)ies are !o) e'(a$$, g(i$), +() ra)her i) %as )he res"o!e!) %ho e*"$o,e #ra(
%he! she i !o) i!#or* "e)i)io!er )ha) she %as a$rea, *arrieR
5he)her )he i!)e!)io! o# )he "e)i)io!er is !o) )o o%! rea$ "ro"er)ies i! )he /hi$i""i!es
+() )o se$$ )he* as "(+$ic a(c)io! )o +e a+$e )o reco&er his *o!e, (se i! "(rchasi!g
)he*R
R01ing:
The )ria$ co(r) r($e )ha) +ase o! oc(*e!)ar, e&ie!ce, )he "(rchaser o# )he )hree "arce$s o# $a!
s(+Cec) o# )he co*"$ai!) %as 4er$i!a. The co(r) #(r)her s)a)e )ha) e&e! i# A$#re %as )he +(,er o# )he
"ro"er)ies, he ha !o ca(se o# ac)io! agai!s) 4er$i!a #or )he reco&er, o# )he sa*e +eca(se as a!
a$ie!, he %as is'(a$i#ie #ro* ac'(iri!g a! o%!i!g $a!s i! )he /hi$i""i!es.
The sa$e o# )he )hree "arce$s o# $a! )o )he "e)i)io!er %as !($$ a! &oi a+ i!i)io. A""$,i!g )he "ari
e$ic)o oc)ri!e, )he "e)i)io!er %as "rec$(e #ro* reco&eri!g )he "ro"er)ies #ro* )he res"o!e!).
A$#re a""ea$e )he ecisio! )o )he Co(r) o# A""ea$s i! %hich )he "e)i)io!er "osi)e )he &ie% )ha)
a$)ho(gh he "ra,e i! his co*"$ai!) i! )he co(r) a '(o )ha) he +e ec$are )he o%!er o# )he )hree
"arce$s o# $a!, he ha !o i!)e!)io! o# o%!i!g )he sa*e "er*a!e!)$,.
0is "ri!ci"a$ i!)e!)io! )herei! %as )o +e ec$are )he )ra!sie!) o%!er #or )he "(r"ose o# se$$i!g )he
"ro"er)ies a) "(+$ic a(c)io!, ($)i*a)e$, e!a+$i!g hi* )o reco&er )he *o!e, he ha s"e!) #or )he
"(rchase )hereo#.
6! .arch 8, 2000, )he CA re!ere a ecisio! a##ir*i!g i! )o)o )he ecisio! o# )he RTC. The
a""e$$a)e co(r) r($e )ha) )he "e)i)io!er 2!o%i!g$, &io$a)e )he Co!s)i)()io!P he!ce, %as +arre #ro*
reco&eri!g )he *o!e, (se i! )he "(rchase o# )he )hree "arce$s o# $a!. 3) he$ )ha) )o a$$o% )he
"e)i)io!er )o reco&er )he *o!e, (se #or )he "(rchase o# )he "ro"er)ies %o($ e*+o$e! a$ie!s )o
&io$a)e )he Co!s)i)()io!, a! e#ea), ra)her )ha! e!ha!ce, )he "(+$ic "o$ic,.
4&e! i#, as c$ai*e +, )he "e)i)io!er, )he sa$es i! '(es)io! %ere e!)ere i!)o +, hi* as )he rea$
&e!ee, )he sai )ra!sac)io!s are i! &io$a)io! o# )he Co!s)i)()io!P he!ce, are !($$ a! &oi a+ i!i)io.
A co!)rac) )ha) &io$a)es )he Co!s)i)()io! a! )he $a%, is !($$ a! &oi a! &es)s !o righ)s a! crea)es
!o o+$iga)io!s. 3) "ro(ces !o $ega$ e##ec) a) a$$. The "e)i)io!er, +ei!g a "ar), )o a! i$$ega$ co!)rac),
ca!!o) co*e i!)o a co(r) o# $a% a! as2 )o ha&e his i$$ega$ o+Cec)i&e carrie o(). 6!e %ho $oses his
*o!e, or "ro"er), +, 2!o%i!g$, e!gagi!g i! a co!)rac) or )ra!sac)io! %hich i!&o$&es his o%! *ora$
)(r"i)(e *a, !o) *ai!)ai! a! ac)io! #or his $osses. To hi* %ho *o&es i! e$i+era)io! a!
"re*ei)a)io!, )he $a% is (!,ie$i!g. The $a% %i$$ !o) ai ei)her "ar), )o a! i$$ega$ co!)rac) or
agree*e!)P i) $ea&es )he "ar)ies %here i) #i!s )he*.
-!er Ar)ic$e 1912 o# )he Ne% Ci&i$ Coe, )he "e)i)io!er ca!!o) ha&e )he s(+Cec) "ro"er)ies eee )o
hi* or a$$o% hi* )o reco&er )he *o!e, he ha s"e!) #or )he "(rchase )hereo#. 4'(i), as a r($e %i$$
#o$$o% )he $a% a! %i$$ !o) "er*i) )ha) )o +e o!e i!irec)$, %hich, +eca(se o# "(+$ic "o$ic,, ca!!o) +e
o!e irec)$,. 5here )he %ro!g o# o!e "ar), e'(a$s )ha) o# )he o)her, )he e#e!a!) is i! )he s)ro!ger
"osi)io! ... i) sig!i#ies )ha) i! s(ch a si)(a)io!, !ei)her a co(r) o# e'(i), !or a co(r) o# $a% %i$$ a*i!is)er
a re*e,. The r($e is eD"resse i! )he *aDi*s: 4I D6L6 .AL6 N6N 6R3T-R ACT36 a! 3N /AR3
D4L3CT6 /6T36R 4ST C6ND3T36 D4F4ND4NT3S.
F()i$e, )oo, is "e)i)io!erFs re$ia!ce o! Ar)ic$e 22 o# )he Ne% Ci&i$ Coe %hich reas:
Ar). 22. 4&er, "erso! %ho )hro(gh a! ac) o# "er#or*a!ce +, a!o)her, or a!, o)her *ea!s, ac'(ires or
co*es i!)o "ossessio! o# so*e)hi!g a) )he eD"e!se o# )he $a))er %i)ho() C(s) or $ega$ gro(!, sha$$
re)(r! )he sa*e )o hi*.
The "ro&isio! is eD"resse i! )he *aDi*: M.4.6 C-. ALT4R3-S D4T4R D4TR4.4NT6
/R6T4STN :No "erso! sho($ (!C(s)$, e!rich hi*se$# a) )he eD"e!se o# a!o)her<. A! ac)io! #or
reco&er, o# %ha) has +ee! "ai %i)ho() C(s) ca(se has +ee! esig!a)e as a! accio! i! re* &erso.
This "ro&isio! oes !o) a""$, i#, as i! )his case, )he ac)io! is "roscri+e +, )he Co!s)i)()io! or +, )he
a""$ica)io! o# )he "ari e$ic)o oc)ri!e. 3) *a, +e (!#air a! (!C(s) )o +ar )he "e)i)io!er #ro* #i$i!g a!
accio! i! re* &erso o&er )he s(+Cec) "ro"er)ies, or #ro* reco&eri!g )he *o!e, he "ai #or )he sai
"ro"er)ies, +(), as Lor .a!s#ie$ s)a)e i! )he ear$, case o# 0o$*a! &s. 7oh!so!: MThe o+Cec)io! )ha)
a co!)rac) is i**ora$ or i$$ega$ as +e)%ee! )he "$ai!)i## a! )he e#e!a!), so(!s a) a$$ )i*es &er, i$$
i! )he *o()h o# )he e#e!a!). 3) is !o) #or his sa2e, ho%e&er, )ha) )he o+Cec)io! is e&er a$$o%eP +() i)
is #o(!e i! ge!era$ "ri!ci"$es o# "o$ic,, %hich )he e#e!a!) has )he a&a!)age o#, co!)rar, )o )he
rea$ C(s)ice, as +e)%ee! hi* a! )he "$ai!)i##.N
3N L3G0T 6F ALL T04 F6R4G63NG, )he "e)i)io! is D3S.3SS4D. The ecisio! o# )he Co(r) o#
A""ea$s is AFF3R.4D i! )o)o.
Cos)s agai!s) )he "e)i)io!er.
S6 6RD4R4D.
M011e* vs! M011e* GR No. 19981=, A(g(s) 29, 2008
Fac)s:
/e)i)io!er 4$e!a ?(e!a&e!)(ra .($$er a! res"o!e!) 0e$*() .($$er %ere *arrie i! 0a*+(rg,
Ger*a!,. The co("$e resie i! Ger*a!, a) a ho(se o%!e +, res"o!e!)Fs "are!)s +() ecie )o
*o&e a! resie "er*a!e!)$, i! )he /hi$i""i!es. Res"o!e!) ha i!heri)e )he ho(se
i! Ger*a!, #ro* his "are!)s %hich he so$ a! (se )he "rocees #or )he "(rchase o# a "arce$ o#
$a! i! A!)i"o$o, RiGa$ a) )he cos) o# /=28,000.00 a! )he co!s)r(c)io! o# a ho(se a*o(!)i!g )o
/2,300,000.00. The A!)i"o$o "ro"er), %as regis)ere i! )he !a*e o# "e)i)io!er.
D(e )o i!co*"a)i+i$i)ies a! res"o!e!)Fs a$$ege %o*a!iGi!g, ri!2i!g, a! *a$)rea)*e!), )he
s"o(ses e&e!)(a$$, se"ara)e. Res"o!e!) #i$e a "e)i)io! #or se"ara)io! o# "ro"er)ies +e#ore )he
Regio!a$ Tria$ Co(r) o# X(eGo! Ci),. The )ria$ co(r) re!ere a ecisio! %hich )er*i!a)e )he regi*e
o# a+so$()e co**(!i), o# "ro"er), +e)%ee! )he "e)i)io!er a! res"o!e!). 3) a$so ecree )he
se"ara)io! o# "ro"er)ies +e)%ee! )he* a! orere )he e'(a$ "ar)i)io! o# "erso!a$ "ro"er)ies $oca)e
%i)hi! )he co(!)r,, eDc$(i!g )hose ac'(ire +, gra)(i)o(s )i)$e (ri!g )he *arriage. 5i)h regar )o )he
A!)i"o$o "ro"er),, )he co(r) he$ )ha) i) %as ac'(ire (si!g "ara"her!a$ #(!s o# )he res"o!e!).
0o%e&er, i) r($e )ha) res"o!e!) ca!!o) reco&er his #(!s +eca(se )he "ro"er), %as "(rchase i!
&io$a)io! o# Sec)io! 7, Ar)ic$e I33 o# )he Co!s)i)()io!.
Res"o!e!) a""ea$e )o )he Co(r) o# A""ea$s. Res"o!e!) c$ai*s )ha) he is !o) "ra,i!g #or )ra!s#er
o# o%!ershi" o# )he A!)i"o$o "ro"er), +() *ere$, rei*+(rse*e!)P )ha) )he #(!s "ai +, hi* #or )he
sai "ro"er), %ere i! co!siera)io! o# his *arriage )o "e)i)io!erP )ha) )he #(!s %ere gi&e! )o
"e)i)io!er i! )r(s)P a! )ha) e'(i), e*a!s )ha) res"o!e!) sho($ +e rei*+(rse o# his "erso!a$
#(!s. The Co(r) o# A""ea$s r($e i! #a&or o# )he res"o!e!) a! *oi#ie )he )ria$ co(r)Fs Decisio!.
3ss(e:
5he)her res"o!e!) is e!)i)$e )o rei*+(rse*e!) o# )he #(!s (se #or )he ac'(isi)io! o# )he A!)i"o$o
"ro"er),.
0e$:
Sec)io! 7, Ar)ic$e I33 o# )he 1987 Co!s)i)()io! s)a)es: Sa&e i! cases o# herei)ar, s(ccessio!, !o
"ri&a)e $a!s sha$$ +e )ra!s#erre or co!&e,e eDce") )o i!i&i(a$s, cor"ora)io!s, or associa)io!s
'(a$i#ie )o ac'(ire or ho$ $a!s o# )he "(+$ic o*ai!. A$ie!s, %he)her i!i&i(a$s or cor"ora)io!s, are
is'(a$i#ie #ro* ac'(iri!g $a!s o# )he "(+$ic o*ai!. 0e!ce, )he, are a$so is'(a$i#ie #ro*
ac'(iri!g "ri&a)e $a!s. The "ri*ar, "(r"ose o# )he co!s)i)()io!a$ "ro&isio! is )he co!ser&a)io! o# )he
!a)io!a$ "a)ri*o!,.
Res"o!e!) %as a%are o# )he co!s)i)()io!a$ "rohi+i)io! a! eD"ress$, a*i))e his 2!o%$ege )hereo#
)o )his Co(r). 0e ec$are )ha) he ha )he A!)i"o$o "ro"er), )i)$e i! )he !a*e o# "e)i)io!er +eca(se o#
)he sai "rohi+i)io!. 0is a))e*") a) s(+se'(e!)$, asser)i!g or c$ai*i!g a righ) o! )he sai "ro"er),
ca!!o) +e s(s)ai!e.
The Co(r) o# A""ea$s erre i! ho$i!g )ha) a! i*"$ie )r(s) %as crea)e a! res($)e +, o"era)io! o#
$a% i! &ie% o# "e)i)io!erFs *arriage )o res"o!e!). Sa&e #or )he eDce")io! "ro&ie i! cases o#
herei)ar, s(ccessio!, res"o!e!)Fs is'(a$i#ica)io! #ro* o%!i!g $a!s i! )he /hi$i""i!es is a+so$()e.
No) e&e! a! o%!ershi" i! )r(s) is a$$o%e. ?esies, %here )he "(rchase is *ae i! &io$a)io! o# a!
eDis)i!g s)a)()e a! i! e&asio! o# i)s eD"ress "ro&isio!, !o )r(s) ca! res($) i! #a&or o# )he "ar), %ho is
g(i$), o# )he #ra(. To ho$ o)her%ise %o($ a$$o% circ(*&e!)io! o# )he co!s)i)()io!a$ "rohi+i)io!.
To a$$o% rei*+(rse*e!) %o($ i! e##ec) "er*i) res"o!e!) )o e!Co, )he #r(i)s o# a "ro"er), %hich he is
!o) a$$o%e )o o%!. Th(s, i) is $i2e%ise "roscri+e +, $a%.
&!Mat;eDs vs Ta>1o*
Fac)s: 6! 7(!e 30, 1988, res"o!e!) ?e!Ca*i! A. Ta,$or :?e!Ca*i!<, a ?ri)ish s(+Cec), *arrie
7ose$,! C. Ta,$or :7ose$,!<, a 17-,ear o$ Fi$i"i!a. 6! 7(!e 9, 1989, %hi$e )heir *arriage %as
s(+sis)i!g, 7ose$,! +o(gh) #ro* Diosa .. .ar)i! a 1,299 s'(are-*e)er $o) :?oraca, "ro"er),< si)(a)e
a) .a!oc-.a!oc, ?oraca, 3s$a!, .a$a,, A2$a!, #or a! i! co!siera)io! o# /129,000.00. The sa$e
%as a$$ege$, #i!a!ce +, ?e!Ca*i!. 7ose$,! a! ?e!Ca*i!, a$so (si!g )he $a))erFs #(!s, co!s)r(c)e
i*"ro&e*e!)s )hereo! a! e&e!)(a$$, co!&er)e )he "ro"er), )o a &aca)io! a! )o(ris) resor) 2!o%!
as )he A*ira$ ?e! ?o% 3!!. A$$ re'(ire "er*i)s a! $ice!ses #or )he o"era)io! o# )he resor) %ere
o+)ai!e i! )he !a*e o# Gi!!a Ce$es)i!o, 7ose$,!Fs sis)er. 0o%e&er, ?e!Ca*i! a! 7ose$,! ha a
#a$$i!g o(), a! 7ose$,! ra! a%a, %i)h 1i* /hi$i""se!. 6! 7(!e 8, 1992, 7ose$,! eDec()e a S"ecia$
/o%er o# A))or!e, :S/A< i! #a&or o# ?e!Ca*i!, a()horiGi!g )he $a))er )o *ai!)ai!, se$$, $ease, a! s(+-
$ease a! o)her%ise e!)er i!)o co!)rac) %i)h )hir "ar)ies %i)h res"ec) )o )heir ?oraca, "ro"er),. 6!
7($, 20, 1992, 7ose$,! as $essor a! "e)i)io!er /hi$i" .a))he%s as $essee, e!)ere i!)o a! Agree*e!)
o# Lease :Agree*e!)< i!&o$&i!g )he ?oraca, "ro"er), #or a "erio o# 2= ,ears, %i)h a! a!!(a$ re!)a$ o#
/12,000.00. The agree*e!) %as sig!e +, )he "ar)ies a! eDec()e +e#ore a No)ar, /(+$ic.
/e)i)io!er )herea#)er )oo2 "ossessio! o# )he "ro"er), a! re!a*e )he resor) as .(sic Gare! Resor).
C$ai*i!g )ha) )he Agree*e!) %as !($$ a! &oi si!ce i) %as e!)ere i!)o +, 7ose$,! %i)ho() his
:?e!Ca*i!Fs< co!se!), ?e!Ca*i! i!s)i)()e a! ac)io! #or Dec$ara)io! o# N($$i), o# Agree*e!) o# Lease
%i)h Da*ages agai!s) 7ose$,! a! )he "e)i)io!er. ?e!Ca*i! c$ai*e )ha) his #(!s %ere (se i! )he
ac'(isi)io! a! i*"ro&e*e!) o# )he ?oraca, "ro"er),, a! co("$e %i)h )he #ac) )ha) he %as 7ose$,!Fs
h(s+a!, a!, )ra!sac)io! i!&o$&i!g sai "ro"er), re'(ire his co!se!).
3ss(e: Ca! a! a$ie! h(s+a! !($$i#, a $ease co!)rac) e!)ere i!)o +, his Fi$i"i!a %i#e+o(gh) (ri!g
)heir *arriageR
0e$: The r($e is c$ear a! i!#$eDi+$e: a$ie!s are a+so$()e$, !o) a$$o%e )o ac'(ire "(+$ic or "ri&a)e
$a!s i! )he /hi$i""i!es, sa&e o!$, i! co!s)i)()io!a$$, recog!iGe eDce")io!s. There is !o r($e *ore
se))$e )ha! )his co!s)i)()io!a$ "rohi+i)io!, as *ore a! *ore a$ie!s a))e*") )o circ(*&e!) )he
"ro&isio! +, )r,i!g )o o%! $a!s )hro(gh a!o)her. 3! a $o!g $i!e o# cases, %e ha&e se))$e iss(es )ha)
irec)$, or i!irec)$, i!&o$&e )he a+o&e co!s)i)()io!a$ "ro&isio!. 5e ha cases %here a$ie!s %a!)e
)ha) a "ar)ic($ar "ro"er), +e ec$are as "ar) o# )heir #a)herFs es)a)eP )ha) )he, +e rei*+(rse )he
#(!s (se i! "(rchasi!g a "ro"er), )i)$e i! )he !a*e o# a!o)herP )ha) a! i*"$ie )r(s) +e ec$are i!
)heir :a$ie!sF< #a&orP a! )ha) a co!)rac) o# sa$e +e !($$i#ie #or )heir $ac2 o# co!se!). ?e!Ca*i! has !o
righ) )o !($$i#, )he Agree*e!) o# Lease +e)%ee! 7ose$,! a! "e)i)io!er. ?e!Ca*i!, +ei!g a! a$ie!, is
a+so$()e$, "rohi+i)e #ro* ac'(iri!g "ri&a)e a! "(+$ic $a!s i! )he /hi$i""i!es. Co!sieri!g )ha)
7ose$,! a""eare )o +e )he esig!a)e M&e!eeN i! )he Dee o# Sa$e o# sai "ro"er),, she ac'(ire
so$e o%!ershi" )here)o. This is )r(e e&e! i# %e s(s)ai! ?e!Ca*i!Fs c$ai* )ha) he "ro&ie )he #(!s #or
s(ch ac'(isi)io!. ?, e!)eri!g i!)o s(ch co!)rac) 2!o%i!g )ha) i) %as i$$ega$, !o i*"$ie )r(s) %as
crea)e i! his #a&orP !o rei*+(rse*e!) #or his eD"e!ses ca! +e a$$o%eP a! !o ec$ara)io! ca! +e
*ae )ha) )he s(+Cec) "ro"er), %as "ar) o# )he co!C(ga$@co**(!i), "ro"er), o# )he s"o(ses. 3! a!,
e&e!), he ha a! has !o ca"aci), or "erso!a$i), )o '(es)io! )he s(+se'(e!) $ease o# )he ?oraca,
"ro"er), +, his %i#e o! )he )heor, )ha) i! so oi!g, he %as *ere$, eDercisi!g )he "reroga)i&e o# a
h(s+a! i! res"ec) o# co!C(ga$ "ro"er),. To s(s)ai! s(ch a )heor, %o($ co(!)e!a!ce i!irec)
co!)ro&ersio! o# )he co!s)i)()io!a$ "rohi+i)io!. 3# )he "ro"er), %ere )o +e ec$are co!C(ga$, )his %o($
accor )he a$ie! h(s+a! a s(+s)a!)ia$ i!)eres) a! righ) o&er )he $a!, as he %o($ )he! ha&e a
ecisi&e &o)e as )o i)s )ra!s#er or is"osi)io!. This is a righ) )ha) )he Co!s)i)()io! oes !o) "er*i) hi*
)o ha&e.
9. JACOBUS BERNHARD HULST v. PR BUILDERS INC. (G.R. No. 156364)
FACTS:
The Petitioner and his spouse, both Dutch Nationals, entered into a ontract to !ell "ith PR
#uilders, $nc. to purchase a %1&'s( ) residential unit in the respondent*s to"nhouse pro+ect
in #atana,as. -hen PR #uilder*s .ailed to co)pl/ "ith their 0erbal pro)ise to co)plete the
pro+ect, the spouses 1ulst 2led a co)plaint .or recession o. contract "ith interest, da)a,es
and attorne/*s .ees be.ore the 1ousin, and 3and Re,ulator/ #oard (134R#), "hich then "as
,ranted. 5 -rit o. 67ecution "as then addressed to the 67'89cio !heri: o. the RT o.
Tanauan, #atan,as, but upon the co)plaint o. the respondent, the le0/ "as set aside,
lea0in, onl/ the respondent*s personal properties to be le0ied 2rst. The !heri: set a public
auction o. the said le0ied properties, ho"e0er, the respondent 2led a )otion to (uash -rit o.
le0/ on the ,round that the sheri: )ade an o0er le0/ since the a,,re,ate appraised 0alue
o. the properties at P6,5&& per s( ) is P;3,616,&&&. $nstead o. resol0in, the ob+ection o. the
respondent*s re,ardin, the auction, the !heri: proceeded "ith the auction since there "as
no restrainin, order .ro) the 134R#. The 15 parcels o. land "as then a"arded to 1oll/
Properties Realt/ at a bid o. P5,45&,653. 8n the sa)e da/, the !heri: re)itted the le,al .ees
and sub)itted to contracts o. sale to 134R#, ho"e0er, he then recei0ed orders to suspend
proceedin,s on the auction .or the reason that the )ar<et 0alue o. the properties "as not
.air. There "as disparit/ bet"een the appraised 0alue and the 0alue )ade b/ the petitioner
and the !heri:, "hich should*0e been loo<ed into b/ the !heri: be.ore )a<in, the sale.
-hile an inade(uac/ in price is not a ,round to annul such sale, the court is +usti2ed to such
inter0ention "here the price shoc<s the conscience.
ISSUE:
1. -hether or not the !heri: erred in the 0alue that "as attached to the properties durin,
the auction and as "ell as disre,ardin, the ob+ection )ade b/ the respondent*s=
%. -hether or not the )ar<et 0alue o. the said propert/ "as inade(uate=
%. -hether or not the spouses 1ulst*s re(uest .or da)a,es is actionable=
HELD:
1. No. 5ccordin, to the Rules o. ourt, the 0alue o. the propert/ le0ied is not re(uired to be
e7actl/ the sa)e as the +ud,)ent debt. $n the le0/ o. propert/, the !heri: does not
deter)ine the e7act 0aluation o. the le0ied propert/. The !heri: is le.t to his o"n +ud,)ent.
1e should be allo"ed a reasonable )ar,in bet"een the 0alue o. the propert/ le0ied upon
and the a)ount o. the e7ecution> the .act that the !heri: le0ies upon a little )ore than is
necessar/ to satis./ the e7ecution does not render his actions i)proper.
$n the absence o. a restrainin, order, no error can be i)puted to the !heri: in
proceedin, "ith the auction sale despite the pendin, )otion to (uash the le0/ 2led b/ the
respondents "ith the 134R#. !heri:?s, as o9cers char,ed "ith the tas< o. the en.orce)ent
and@or i)ple)entation o. +ud,)ents, )ust act "ith considerable dispatch so as not to
undul/ dela/ the ad)inistration o. +ustice. $t is not "ithin the +urisdiction o. the !heri: to
consider and resol0e respondent*s ob+ection to the continuation o. the conduct o. the
auction sale. The !heri: has no authorit/, on his o"n, to suspend the auction sale. 1is dut/
bein, )inisterial, he has no discretion to postpone the conduct o. the auction sale.
2. No. The 134R# 5rbiter and Director had no su9cient .actual basis to deter)ine the 0alue
o. the le0ied propert/. The 5ppraisal report, that "as sub)itted, "as based on the pro+ected
0alue o. the to"nhouse pro+ect a.ter it shall ha0e been .ull/ de0eloped, that is, on the
assu)ption that the residential units appraised had alread/ been built. !ince it is undisputed
that the to"nhouse pro+ect did not push throu,h, the pro+ected 0alue did not beco)e a
realit/. Thus, the appraisal 0alue cannot be e(uated "ith the .air )ar<et 0alue.
3. No. 4nder 5rticle 1%, !ec.A o. the 1B;A onstitution, .orei,n nationals, the spouses 1ulst,
are dis(uali2ed .or) o"nin, real propert/. 1o"e0er, under article 1414 o. the i0il ode,
one "ho repudiates the a,ree)ent and de)ands his )one/ be.ore the ille,al act has ta<en
place is entitled to reco0er. Petitioner is there.ore entitled to reco0er "hat he has paid,
althou,h the basis o. his clai) .or rescission, "hich "as ,ranted b/ the 134R#, "as not the
.act that he is not allo"ed to ac(uire pri0ate land under the Philippine onstitution. #ut
petitioner is entitled to the reco0er/ onl/ o. the a)ount o. P3,1;A,5&&.&&, representin, the
purchase price paid to respondent. No da)a,es )a/ be reco0ered on the basis o. a 0oid
contract> bein, none7istent, the a,ree)ent produces no +uridical tie bet"een the parties
in0ol0ed. Curther, petitioner is not entitled to actual as "ell as interests thereon, )oral and
e7e)plar/ da)a,es and attorne/*s .ees.
Sec! & EEce8tion :o* Fo*(e* Fi1i8ino citi3en
Re". &s CA 23= SCRA =87
Sec! ' /nde8endent Econo(ic and 41anning Agenc>
Sec!1% Fi1i8ini3ation
1! MANILA PRINCE HOTEL VS. GSIS
Facts:
The contro0ers/ arose "hen respondent Go0ern)ent !er0ice $nsurance !/ste) (G!$!),
pursuant to the pri0atiDation pro,ra) o. the Philippine Go0ern)ent under Procla)ation
No. 5& dated ; Dece)ber 1B;6, decided to sell throu,h public biddin, 3&E to 51E o.
the issued and outstandin, shares o. respondent Fanila 1otel orporation. $n a close
biddin, held on 1; !epte)ber 1BB5 onl/ t"o (%) bidders participatedG petitioner Fanila
Prince 1otel orporation, a Cilipino corporation, "hich o:ered to bu/ 51E o. the F1 or
15,3&&,&&& shares at P41.5; per share, and Renon, #erhad, a Fala/sian 2r), "ith $TT'
!heraton as its hotel operator, "hich bid .or the sa)e nu)ber o. shares at P44.&& per
share, or P%.4% )ore than the bid o. petitioner.
Pendin, the declaration o. Renon, #erhad as the "innin, bidder@strate,ic partner and
the e7ecution o. the necessar/ contracts, )atched the bid price o. P44.&& per share
tendered b/ Renon, #erhad.
8n 1A 8ctober 1BB5, perhaps apprehensi0e that respondent G!$! has disre,arded the
tender o. the )atchin, bid and that the sale o. 51E o. the F1 )a/ be hastened b/
respondent G!$! and consu))ated "ith Renon, #erhad, petitioner ca)e to this ourt
on prohibition and )anda)us.
$n the )ain, petitioner in0o<es !ec. 1&, second par., 5rt. H$$, o. the 1B;A onstitution
and sub)its that the Fanila 1otel has been identi2ed "ith the Cilipino nation and has
practicall/ beco)e a historical )onu)ent "hich reIects the 0ibranc/ o. Philippine
herita,e and culture. $t is a proud le,ac/ o. an earlier ,eneration o. Cilipinos "ho
belie0ed in the nobilit/ and sacredness o. independence and its po"er and capacit/ to
release the .ull potential o. the Cilipino people. To all intents and purposes, it has
beco)e a part o. the national patri)on/. 6 Petitioner also ar,ues that since 51E o. the
shares o. the F1 carries "ith it the o"nership o. the business o. the hotel "hich is
o"ned b/ respondent G!$!, a ,o0ern)ent'o"ned and controlled corporation, the hotel
business o. respondent G!$! bein, a part o. the touris) industr/ is un(uestionabl/ a
part o. the national econo)/.
Iss!:
-hether or Not the sale o. Fanila 1otel to Renon, #erhad is 0iolati0e o. the
onstitutional pro0ision o. Cilipino Cirst polic/ and is there.ore null and 0oid.
H!"#:
The Fanila 1otel or, .or that )atter, 51E o. the F1, is not +ust an/ co))odit/ to be
sold to the hi,hest bidder solel/ .or the sa<e o. pri0atiDation. The Fanila 1otel has
pla/ed and continues to pla/ a si,ni2cant role as an authentic repositor/ o. t"entieth
centur/ Philippine histor/ and culture. This is the plain and si)ple )eanin, o. the
Cilipino Cirst Polic/ pro0ision o. the Philippine onstitution. 5nd this ourt, heedin, the
clarion call o. the onstitution and acceptin, the dut/ o. bein, the elderl/ "atch)an o.
the nation, "ill continue to respect and protect the sanctit/ o. the onstitution. $t "as
thus ordered that G!$! accepts the )atchin, bid o. petitioner F5N$35 PR$N6 18T63
8RP8R5T$8N to purchase the sub+ect 51E o. the shares o. the Fanila 1otel
orporation at P44.&& per share and therea.ter to e7ecute the necessar/ clearances and
to do such other acts and deeds as )a/ be necessar/ .or purpose.
+! AG!R! No! 11%++$! A8*i1 &- 1'',B
ARMY AND NAY CL69 OF MAN/LA- /NC!- petitioner, vs!
HONORA9LE CO6RT OF A44EALS- HON! C/LFREDO D! REYES-
as 50dge REG/ONAL TR/AL CO6RT OF MAN/LA- 9RANCH $<
2:o*(e*1> 29*anc; 1,"- HON! A! CAESAR SANGCO- as 50dge-
METRO4OL/TAN TR/AL CO6RT- 9RANCH 1,#MAN/LA and t;e
C/TY OF MAN/LA- *e8*esented ;e*ein )> MAYOR ALFREDO
L/M- respondents.
D E C / S / O N
KA46NAN- J!:
The i!s)a!) "e)i)io! see2s )o a!!($ )he ecisio! o# )he Co(r) o# A""ea$s
a##ir*i!g )he ecisio! o# )he Regio!a$ Tria$ Co(r), Na)io!a$ Ca"i)a$ Regio!,
?ra!ch 38, .a!i$a %hich a##ir*e )he s(**ar, C(g*e!) re!ere +, )he
.e)ro"o$i)a! Tria$ Co(r) o# .a!i$a, ?ra!ch 17.
6! No&e*+er 29, 1989 )he Ci), o# .a!i$a #i$e a! ac)io! agai!s) herei!
"e)i)io!er %i)h )he .TC #or eCec)*e!). The co*"$ai!) a$$ege )ha):
1. Tha) "$ai!)i## is a *(!ici"a$ cor"ora)io! ($, orga!iGe a! eDis)i!g +, &ir)(e o# Re".
Ac) No. 909, as a*e!e, %i)h o##ices a) Ci), 0a$$ ?(i$i!g, .a!i$a, re"rese!)e i!
)his ac)io! +, i)s i!c(*+e!) Ci), .a,or, 0o!. Ge*i$ia!o C. Lo"eG, 7r., %i)h )he sa*e
aress as "$ai!)i##P
De#e!a!) is $i2e%ise a cor"ora)io! orga!iGe (!er )he $a%s o# )he /hi$i""i!es %i)h
o##ices a) )he Ar*, a! Na&, C$(+ ?(i$i!g, L(!e)a, .a!i$a, %here i) *a, +e ser&e
%i)h s(**o!sP
2. Tha) "$ai!)i## is )he o%!er o# a "arce$ o# $a! %i)h a! area o# 12,70=.30 s'. *.
$oca)e a) So()h ?o($e&ar cor!er .a!i$a ?a,, .a!i$a, co&ere +, TCT No.
1=8888@10=9 o# )he Regis)er o# Dees o# .a!i$a, )oge)her %i)h )he i*"ro&e*e!)s
)hereo! 2!o%! as )he Ar*, a! Na&, o# .a!i$aP
3. Tha) e#e!a!) is occ(",i!g )he a+o&e-escri+e $a! a! )he Ar*, a! Na&, C$(+
?(i$i!g +, &ir)(e o# a Co!)rac) o# Lease eDec()e +e)%ee! "$ai!)i## a! e#e!a!) i!
7a!(ar, 1983, co", o# %hich is a))ache here)o as A!!eD LALP
9. Tha) "aragra"h 1 o# )he sai Co!)rac) o# Lease "ro&ies )ha):
91; T#at t#e /ESSEE s#all construct, at its o"n e1pense, a modern multi=storied
#otel at a cost o' not less t#an F(FTD )(//(2B 0ES2S 90.E,EEE%EE; 9sic;, "#ic#
s#all automaticall$ belong to t#e /ESS2R upon t#e e1piration and:or termination o'
t#e lease agreement, "it#out rig#t o' t#e /ESSEE 'or reimbursement 'or t#e costs o'
its construction8 0R2F(DED, &2>EFER, t#at construction o' t#e said #otel s#all be
commenced "it#in one 91; $ear, and completed as 'ar as practicable "it#in 'i5e 9.;
$ears, 'rom date o' appro5al b$ proper go5ernment o''icials o' t#is lease agreement8
0R2F(DED, F?RT&ER, t#at t#e plans and speci'ication 'or t#e same #otel s#all be
appro5ed 'irst b$ t#e /ESS2R be'ore actual construction8
=. Tha) i! &io$a)io! o# )he a#ore'(o)e "ro&isio!, e#e!a!) has #ai$e a!@or re#(se )o
co!s)r(c) a *oer! *($)i-s)orie ho)e$ "ro&ie #or )herei!, $o!g a#)er )he eD"ira)io!
"erio )herei! s)i"($a)e a! es"i)e e*a!s o# "$ai!)i##, )o )he "reC(ice o# "$ai!)i##
%ho has agree )o e#e!a!)Ks co!)i!(e re)e!)io! o# )he "ro"er), o! a $ease-+ac2
agree*e!) o! )he +asis o# )he %arra!)ies o# e#e!a!) )o "() (" a co!)e*"orar,
*($)i-s)orie +(i$i!gP
8. Tha) "aragra"h 3 o# )he Co!)rac) o# Lease a$so s)i"($a)es )ha):
93; T#at t#e /ESSEE s#all pa$ a rent o' T>2 &?BDRED F(FTD
T&2?SABD 0ES2S 90,.E,EEE%EE; a $ear, "#ic# ma$ be paid b$ t#e /ESSEE
in t"el5e 91,; e@uall$ mont#l$ installments "it#in t#e 'irst 'i5e 9.; da$s o'
eac# mont#, "it#out t#e necessit$ o' a demand, sub4ect, #o"e5er, to rental
ad4ustment a'ter t#e 'irst 'i5e 9.; da$s o' eac# mont#, "it#out t#e necessit$ o' a
demand, sub4ect, #o"e5er, to rental ad4ustment a'ter t#e 'irst 'i5e $ears o' t#is
lease, at t#e rate o' not more t#an ten per centum 91EG; per annum e5er$ t"o
$ears, or on t#e basis o' t#e increase in t#e pre5ailing marHet 5alue o' t#e
leased premises "#ic#e5er is #ig#er o' t#e t"o criteria8
7. Tha) e#e!a!) a$so re!ege o! i)s re!)a$ o+$iga)io! !o)%i)hs)a!i!g "$ai!)i##Ks
e*a! )o "a,, #or i)s (se a! occ("a!c, o# )he "$ai!)i##Ks "ro"er),, s)ar)i!g #ro*
7a!(ar, 1983 )o )he "rese!), a! i)s re!)a$ acco(!) s)oo a) /1,809,188.70 as o#
.a,, 1989P
8. Tha) i! "aragra"h 9 o# )he Co!)rac) o# Lease, i) is a$so "ro&ie )ha):
9!; T#at t#e /ESSEE s#all pa$ t#e realt$ ta1 due on t#e land, including t#ose
assessed against t#e impro5ements t#ereon, as "ell as all go5ernment license, permits,
'ees and c#arges prescribed b$ la", 0residential decrees and ordinances 'or t#e leased
premises, including t#ose 'or t#e establis#ment and operation o' a modern multi=
storied #otel and all constructions and modi'ications pursuant to t#e pro5isions o' t#is
Contract8
9. Tha) e#e!a!) &io$a)e i)s (!er)a2i!g )o "a, )he )aDes (e o! )he $a! a!
i*"ro&e*e!), so *(ch so )ha) as o# Dece*+er 1989, i)s aggrega)e rea$), )aD
$ia+i$i), a*o(!)s )o /3,818,913.81P
10. Tha) re"ea)e e*a!s o# "$ai!)i## ha +ee! *ae ("o! )he e#e!a!) )o
co*"$, %i)h i)s a#oresai co!)rac)(a$ o+$iga)io!s, +() e#e!a!) ho%e&er re*ai!e
(!#aGeP i) s)i$$ #ai$e )o "er#or* a!, o# i)s co!)rac)(a$ o+$iga)io!s.
11. Tha) as a res($), "$ai!)i## resci!e )heir Co!)rac) o# Lease a! e*a!e
e#e!a!) )o &aca)e, )he $as) o# %hich %as co!)ai!e i! a $e))er a)e .a, 29, 1989,
co", o# %hich is a))ache here)o as ANN4I L?L. To a)e ho%e&er, e#e!a!)
ho%e&er, has !o) +(ge a! i!ch #ro* )he "ro"er), o# "$ai!)i##P
12. Tha) )he reaso!a+$e re!)a$ &a$(e #or e#e!a!)Ks co!)i!(e (se a!
occ("a!c, o# )he s(+Cec) "re*ises %hich is a "ri*e "ro"er), a$o!g RoGas :sic<
?o($e&ar i! L(!e)a area is/838,987.00 a *o!)h i! )he co!)eD) o# )he "re&ai$i!g
re!)a$ ra)es o# co*"ara+$e rea$ "ro"er),P
T1U
6! Dece*+er 29, 1989 or %i)hi! )he reg$e*e!)ar, "erio, "e)i)io!er #i$e
i)s a!s%er )o )he co*"$ai!). S(+se'(e!)$,, o! Fe+r(ar, 22, 1990, i) #i$e a
L.o)io! #or Lea&e )o Fi$e a! #or A*issio! o# A*e!e A!s%erL a$$ege$,
asser)i!g ai)io!a$ s"ecia$ a! a##ir*a)i&e e#e!ses.
6! .a, 23, 1990, )he Ci), o# .a!i$a #i$e a .o)io! #or S(**ar,
7(g*e!)
T2U
o! )he gro(! )ha) )here eDis)s !o ge!(i!e )ria+$e iss(e i! )he
case.
6! 7($, 27, 1990, )he .TC e!ie )he "e)i)io!erKs *o)io! #or $ea&e )o
a*i) i)s a*e!e a!s%er #or $ac2 o# *eri). Th(s, o! 6c)o+er =, 1990, a
ecisio! %as re!ere %i)h )he #o$$o%i!g is"osi)i&e "or)io!:
>&EREF2RE, premises considered, 4udgment is #ereb$ rendered in 'a5or o' t#e
plainti'', ordering t#e de'endant:
a; and all persons claiming rig#ts or title under it, to immediate 9sic;
5acate and surrender to t#e plainti'', t#e premises more particularl$ described as
t#e Arm$ and Ba5$ Club *ldg% located at Sout# *oule5ard corner )anila *a$,
)anila8
b; to pa$, all "it# legal interest t#ereon, its rental arrearages at t#e rate
o' 0,.E,EEE%EE per $ear "it# a corresponding ten 91EG; percent increase e5er$ t"o
$ears 'rom Januar$, 19I3 until it 'inall$ 5acates and surrenders t#e premises to t#e
plainti''8
c; t#e costs o' suit%
S2 2RDERED%
J3K
6! a""ea$, )he Regio!a$ Tria$ Co(r) "resie +, 7(ge 5i$#reo D. Re,es
a##ir*e in toto )he s(**ar, C(g*e!) o# )he .e)ro"o$i)a! Tria$ Co(r).
T9U
/e)i)io!er e$e&a)e i)s case )o )he Co(r) o# A""ea$s. 6! 6c)o+er 30, 1992,
)he Co(r) o# A""ea$s is*isse )he a""ea$.
6! .a, 18, 1998, )he Co(r) o# A""ea$s iss(e a reso$()io! e!,i!g )he
*o)io! #or reco!siera)io! o# )he ecisio! a)e 6c)o+er 30, 1992. A) )he
sa*e )i*e, i) a$so e!ie )he Ci), o# .a!i$aKs *o)io! #or iss(a!ce o# a %ri) o#
eDec()io! "e!i!g a""ea$.
/e)i)io!er #i$e )he i!s)a!) "e)i)io! raisi!g )he #o$$o%i!g iss(es:
1% RES02BDEBT C2?RTS CRAFE/D ERRED (B ?0&2/D(BC T&E
2?STER 2F &ERE(B 0ET(T(2BER FR2) T&E D(S0?TED 0RE)(SES >&(C&
(S A C/EAR TRABSCRESS(2B 2F T&E F2R)A/ DEC/ARAT(2B 2F T&E
S(TE 2F &ERE(B 0ET(T(2BER AS A &(ST2R(CA/ /ABD)ARL%
,% >&ET&ER 2R B2T RES02BDEBT C2?RT 2F A00EA/S SER(2?S/D
ERRED (B AFF(R)(BC T&E DEC(S(2BS 2F RES02BDEBT )ETR202/(TAB
TR(A/ C2?RT 9)TC; ABD REC(2BA/ TR(A/ C2?RT 9RTC; J?DCES
DEBD(BC AD)(SS(2B 2F 0ET(T(2BERMS A)EBDED ABS>ER%
3% >&ET&ER 2R B2T RES02BDEBT C2?RT 2F A00EA/S ERRED (B
AFF(R)(BC T&E S?))ARD J?DC)EBT REBDERED *D RES02BDEBT
)TC ABD RTC J?DCES%
!% >&ET&ER 2R B2T RES02BDEBT C2?RT 2F A00EA/S ERRED (B
B2T &2/D(BC T&AT 0ET(T(2BER >AS DEB(ED D?E 0R2CESS *D T&E
REBD(T(2B 2F S?))ARD J?DC)EBT ACA(BST (T%
.% AS AB (BC(DEBT T2 T&E )A(B (SS?E, T&E 0R20ERTD, S?*JECT
)ATTER 2F T&(S CASE, (S 2F 0?*/(C D2)A(B ABD T&EREF2RE, T&E
C2BTRACT 2F /EASE E+EC?TED *D T&E C(TD 2F )AB(/A (B FAF2R 2F
0ET(T(2BER (S F2(D%
J.K
There is !o *eri) i! )he "e)i)io!.
A*is) a$$ )he iss(es raise +, )he "e)i)io!er, )he i!s)a!) case is a si*"$e
eCec)*e!) s(i).
There is !o is"()e )ha) )he Ci), o# .a!i$a is )he o%!er o# a "ri*e "arce$ o#
$a! %i)h a! area o# 12,70=.30 s'(are *e)ers $oca)e a) So()h ?o($e&ar
cor!er .a!i$a ?a, )oge)her %i)h )he i*"ro&e*e!) )hereo! 2!o%! as Ar*, a!
Na&, C$(+ o# .a!i$a. /e)i)io!er e!)ere i!)o a $ease co!)rac) %i)h "ri&a)e
res"o!e!) so*e)i*e i! 7a!(ar,, 1983. 3! sai $ease co!)rac), i) agree )o: 1<
"a, a! a!!(a$ a re!) o# /2=0,000.00 %i)h a 10Z i!crease e&er, )%o :2< ,earsP
2< "a, )he rea$), )aD (e o! )he $a!P a! 3< co!s)r(c) a *oer! *($)i-s)ore,
ho)e$ "ro&ie #or )herei! %i)hi! #i&e :=< ,ears %hich sha$$ +e$o!g )o )he Ci),
("o! eD"ira)io! or )er*i!a)io! o# )he $ease %i)ho() righ) o# rei*+(rse*e!) #or
)he cos) o# co!s)r(c)io!.
T8U
/e)i)io!er #ai$e )o "a, )he re!)s #or se&e! :7< co!sec()i&e ,ears. As o#
6c)o+er, 1989 %he! )he ac)io! %as #i$e, re!)a$ arrears +a$$oo!e )o /7.2
*i$$io!. Rea$ es)a)e )aDes o! )he $a! acc(*($a)e )o /8,==1,908.28 as o#
.a,, 1971. .oreo&er, "e)i)io!er #ai$e )o erec) a *($)i-s)ore, ho)e$ i! )he
si)e. For &io$a)io!s o# )he $ease co!)rac) a! a#)er se&era$ e*a!s, )he Ci),
o# .a!i$a ha !o o)her reco(rse +() )o #i$e )he ac)io! #or i$$ega$ e)ai!er a!
e*a! "e)i)io!erKs e&ic)io! #ro* )he "re*ises. Ar)ic$e 1873 o# )he Ne% Ci&i$
Coe is eD"$ici):
ART. 1273. T#e lessor ma$ 4udiciall$ e4ect t#e lessee 'or an$ o' t#e 'ollo"ing
causes:
:1< 5he! )he "erio agree ("o!, or )ha) %hich is #iDe #or )he (ra)io! o# $eases (!er
ar)ic$es 1882 a! 1887, has eD"ireP
:2< Lac2 o# "a,*e!) o# )he "rice s)i"($a)eP
:3< >io$a)io! o# a!, o# )he co!i)io!s agree ("o! i! )he co!)rac)P
:9< 5he! )he $essee e&o)es )he )hi!g $ease )o a!, (se or ser&ice !o) s)i"($a)e
%hich ca(ses )he e)eriora)io! )hereo#P or i# he oes !o) o+ser&e )he re'(ire*e!) i!
No. 2 o# ar)ic$e 18=7, as regars )he (se )hereo#.
The eCec)*e!) o# )e!a!)s o# agric($)(ra$ $a!s is go&er!e +, s"ecia$ $a%s. :e*"hasis
s(""$ie<
/e)i)io!er i!&o2es a! ca"i)a$iGes o! )he #ac) )ha) )he Ar*, a! Na&, C$(+
has +ee! ec$are a !a)io!a$ his)orica$ $a!*ar2 +, )he Na)io!a$ 0is)orica$
Co**issio! o! 7(!e 29, 1992 %hich )he $o%er co(r)s a$$ege$, !e&er ga&e
(e co!siera)io!. Th(s, i)s eDis)e!ce sho($ !o) i! a!, %a, +e (!er*i!e
+, )he si*"$e eCec)*e!) s(i) #i$e agai!s) i). /e)i)io!er co!)e!s )ha) a$$ "ar)ies
are e!Coi!e +, $a% )o "reser&e i)s eDis)e!ce a! si)e.
To s(""or) i)s c$ai*, "e)i)io!er "rese!)e )he Cer)i#ica)e o# Tra!s#er a!
Acce")a!ce o# )he 0is)orica$ .ar2er gra!)e )o i) "(rs(a!) )o R.A. 9898, as
a*e!e +, /D 379 %hich "ro&ies )ha) i) sha$$ +e L)he "o$ic, o# )he S)a)e )o
"reser&e a! "ro)ec) )he i*"or)a!) c($)(ra$ "ro"er)ies a! Na)io!a$ C($)(ra$
Treas(res o# )he !a)io! a! )o sa#eg(ar )heir i!)ri!sic &a$(e.L
T7U
The .ar2er reas as #o$$o%s:
CERT(F(CATE 2F TRABSFER
ABD
ACCE0TABCE 2F &(ST2R(CA/ )ARLER
AR)D ABD BAFD C/?*
T2 A// 0ERS2BS T2 >&2) T&ESE 0RESEBTS )AD C2)E:
*e it Hno"n t#at t#e Bational &istorical (nstitute, in t#e e1ercise o' its aut#orit$
5ested b$ la" and in compliance "it# its mandate to #onor national #eroes and
perpetuate t#e glor$ o' t#eir deeds, and to preser5e #istorical sites, #as trans'erred t#is
#istorical marHer unto Administration o' Arm$ and Ba5$ Club, "#o #as agreed to
accept t#e same and to maintain it as a sacred dut$%
(B >(TBESS >&ERE2F, t#e parties #a5e #ereunto set t#eir #ands t#is ,9t# da$
o' June, 199,, in )anila%
BAT(2BA/ &(ST2R(CA/ (BST(T?TE
b$:
9SCD%; (//EC(*/E 9SCD%;
(//EC(*/E
CA0T% F(CEBTE J% *R(//ABTES SERAF(B
D% N?(AS2B
Trans'eree Trans'ero
r
Attested:
9SCD; (//EC(*/E 9SCD%;
(//EC(*/E
C&(EF S?0T J2SE 0ERC(FA/ AD(2BC AFE/(BA )%
CASTABEDA
S?*SCR(*ED ABD S>2RB to be'ore me in )anila, 0#ilippines, t#is ,9t# da$ o'
June, 199, b$ t#e a''iants%
9SCD%; (//EC(*/E 9SCD%; (//EC(*/E
*CEB ABT2B(2 F% R?ST(A C2/ )AB?E/ R% C?EFARA
9SCD%; (//EC(*/E 9SCD%; (//EC(*/E
RA)2B J% S(DTABCC2, JR% CA0T% DAB(E/ A% ARRE2/A
9SCD%; /20E )% FE/ASC2
B2TARD 0?*/(C
)$ Commission E1pires Dec% 31, 1993
Bot% Reg% Bo% ,9- 0TR
E,,EII
0age 1 1=,=9,,
)anila
*ooH (( (*0
3,E19-
Series o' 199, 1,=1I=91,
0asig
JIK
5hi$e )he ec$ara)io! )ha) i) is a his)orica$ $a!*ar2 is !o) o+Cec)io!a+$e,
)he recog!i)io! is, ho%e&er, s"ecio(s. 5e )a2e )he occasio! )o e$(cia)e o!
)he &ie%s o# Fr. 7oa'(i! ?er!as %ho %as i!&i)e as amicus curiae i! )he
rece!) case o# -anila 1rince 3otel v( /S!S
T9U
%here )he his)orica$ charac)er o#
.a!i$a 0o)e$ %as a$so ea$) %i)h. 0e s)a)e )ha):
T#e countr$Ms artistic and #istoric "ealt# is t#ere'ore a proper sub4ect 'or t#e e1ercise
o' police po"er:O% % % "#ic# t#e State ma$ regulate%O T#is is a 'unction o' t#e
legislature% And once regulation comes in, due process also comes into pla$% >#en
t#e classi'ication o' propert$ into #istorical treasures or landmarHs "ill in5ol5e t#e
imposition o' limits on o"ners#ip, t#e *ill o' Rig#ts demands t#at it be done "it# due
process bot# substanti5e and procedural% (n recognition o' t#is constitutional
principle, t#e State in 'act #as promulgated la"s, bot# general and special, on t#e
sub4ect%
1 1 1 t#e current general la" on t#e sub4ect is R%A% !I!, appro5ed on June 1I, 19,
and amended b$ 0%D% Bo% 3-!% T#e Act prescribes t#e manner o' classi'$ing #istorical
and cultural properties t#us:
Sec% !% T#e Bational )useum, #ereina'ter re'erred to as t#e )useum s#all be t#e
agenc$ o' t#e go5ernment "#ic#, s#all implement t#e pro5isions o' t#is Act%
Sec% .% T#e Director o' t#e )useum, #ereina'ter re'erred to as t#e Director, s#all
undertaHe a census o' t#e important cultural properties o' t#e 0#ilippines, Heep a
record o' t#eir o"ners#ip, location, and condition, and maintain an up=to=date register
o' t#e same% 0ri5ate collectors and o"ners o' important cultural properties and public
and pri5ate sc#ools in possession o' t#ese items, s#all be re@uired to register t#eir
collections "it# t#e )useum "#en re@uired b$ t#e Director and to report to t#e same
o''ice "#en re@uired b$ t#e Director an$ ne" ac@uisitions, sales, or trans'ers t#ereo'%
Sec% % T#e Director is aut#orized to con5ene panels o' e1perts, as o'ten as t#e need
'or t#eir ser5ices ma$ arise, eac# to be composed o' t#ree competent men in t#e
specialized 'ileds o' ant#ropolog$, natural sciences, #istor$ and arc#i5es, 'ine arts,
p#ilatel$ and numismatics, and s#rines and monuments, etc% Eac# panel s#all, a'ter
care'ul stud$ and deliberation, decide "#ic# among t#e cultural properties in t#eir
'ield o' specialization s#all be designated as OBational Cultural TreasuresO or
O(mportant Cultural 0roperties%O T#e Director is 'urt#er aut#orized to con5ene panels
o' e1perts to declassi'$ designated OBational Cultural Treasures%O
T#e Director s#all "it#in ten da$s o' suc# action b$ t#e panel transmit t#eir decision
and cause t#e designation=list to be publis#ed in at least t"o ne"spapers o' general
circulation% T#e same procedure s#all be 'ollo"ed in t#e declassi'ication o' important
cultural properties and national treasures%
Sec% -% (n designation o' a particular cultural propert$ as a Onational cultural
treasure,O t#e 'ollo"ing procedure s#all be obser5ed:
a% *e'ore t#e actual designation, t#e o"ner, i' t#e propert$ is pri5atel$ o"ned, s#all
be noti'ied at least 'i'teen da$s prior to t#e intended designation, and #e s#all be
in5ited to attend t#e deliberation and gi5en a c#ance to be #eard% Failure on t#e part o'
t#e o"ner to attend t#e deliberation s#all not bar t#e panel to render its decision%
Decision s#all be gi5en b$ t#e panel "it#in a "eeH a'ter its deliberation% (n t#e e5ent
t#at t#e o"ner desires to seeH reconsideration o' t#e designation made b$ t#e panel, #e
ma$ do so "it#in da$s 'rom t#e date t#at t#e decision #as been rendered% (' no re@uest
'or reconsideration is 'iled a'ter t#is period, t#e designation is t#en considered 'inal
and e1ecutor$% An$ re@uest 'or reconsideration 'iled "it#in t#irt$ da$s and
subse@uentl$ again denied b$ t#e panel, ma$ be 'urt#er appealed to anot#er panel
c#airmanned b$ t#e Secretar$ o' Education, "it# t"o e1perts as members appointed
b$ t#e Secretar$ o' Education% T#eir decision s#all be 'inal and binding%
b% >it#in eac# Hind or class o' ob4ects, onl$ t#e rare and
uni@ue ob4ects ma$ be designated as OBational Cultural Treasures%O T#e
remainder, i' an$, s#all be treated as cultural propert$%
c% Designated OBational Cultural TreasuresO s#all be marHed, described, and
p#otograp#ed b$ t#e Bational )useum% T#e o"ner retains possession o' t#e same but
t#e )useum s#all Heep a record containing suc# in'ormation as: name o' article,
o"ner, period, source, location, condition, description, p#otograp#, identi'$ing marHs,
appro1imate 5alue, and ot#er pertinent data%
T#us, 'or )anila &otel to be treated as special cultural or #istorical propert$, it must
go t#roug# t#e procedure described abo5e% Elo@uent nationalistic endorsements o'
classi'ication "ill not trans'orm a piece o' propert$ into a legall$ recognized #istorical
landmarH% % % %
3! )he case a) +ar, )here is !o sho%i!g )ha) )he a+o&e "roce(re has +ee!
co*"$ie %i)h. The Ci), o# .a!i$a e&e! o+ser&e )ha) )he sig!a)ories )here)o
are o##icers a! *e*+ers o# )he C$(+
T10U
*a2i!g s(ch cer)i#ica)io! se$#-
ser&i!g. 3) +ehoo&es (s )o )hi!2 %h, )he ec$ara)io! %as co!#erre o!$, i!
1992, )hree :3< ,ears a#)er )he ac)io! #or eCec)*e!) %as i!s)i)()e. 5e ca!
o!$, s(r*ise )ha) )his %as *ere$, a! a#)er)ho(gh), a! a))e*") )o )h%ar) a!,
$ega$ ac)io! )a2e! agai!s) )he "e)i)io!er. No!e)he$ess, s(ch cer)i#ica)io! oes
!o) gi&e a!, a()hori), )o )he "e)i)io!er )o $a, c$ai* o# o%!ershi", or a!, righ)
o&er )he s(+Cec) "ro"er),. No%here i! )he $a% oes i) s)a)e )ha) s(ch
recog!i)io! gra!)s "ossessor, righ)s o&er )he "ro"er), )o )he "e)i)io!er. Nor is
)he Na)io!a$ 0is)orica$ Co**issio! gi&e! )he a()hori), )o &es) s(ch righ) o#
o%!ershi" or "ossessio! o# a "ri&a)e "ro"er), )o )he "e)i)io!er. The $a%
*ere$, s)a)es )ha) i) sha$$ +e )he "o$ic, o# s)a)e )o "reser&e a! "ro)ec) )he
i*"or)a!) c($)(ra$ "ro"er)ies a! Na)io!a$ C($)(ra$ Treas(res o# )he !a)io! a!
)o sa#eg(ar )heir i!)ri!sic &a$(e. 3! $i!e %i)h )his, a!, res)ora)io!,
reco!s)r(c)io! or "reser&a)io! o# his)orica$ +(i$i!gs sha$$ o!$, +e *ae (!er
)he s("er&isio! o# )he Direc)or o# )he Na)io!a$ .(se(*.
T11U
The a()hori), o# )he
Na)io!a$ 0is)orica$ Co**issio! is $i*i)e o!$, )o )he s("er&isio! o# a!,
reco!s)r(c)io!, res)ora)io! or "reser&a)io! o# )he archi)ec)(ra$ esig! o# )he
ie!)i#ie his)orica$ +(i$i!g a! !o)hi!g *ore. 4&e! ass(*i!g )ha) s(ch
recog!i)io! *ae +, )he Na)io!a$ 0is)orica$ Co**issio! is &a$i, )he his)orica$
sig!i#ica!ce o# )he C$(+, i# a!,, sha$$ !o) +e a##ec)e i# "e)i)io!erKs e&ic)io! #ro*
)he "re*ises is %arra!)e. -!#or)(!a)e$,, "e)i)io!er is *ere$, a $essee o# )he
"ro"er),. ?, &ir)(e o# )he $ease co!)rac), "e)i)io!er ha o+$iga)io!s )o
#($#i$$. /e)i)io!er ca! !o) C(s) hie +ehi! so*e recog!i)io! +es)o%e ("o! i)
i! orer )o esca"e #ro* i)s o+$iga)io! or re*ai! i! "ossessio!. 3) &io$a)e )he
)er*s a! co!i)io!s o# )he $ease co!)rac). Th(s, "e)i)io!erKs e&ic)io! #ro* )he
"re*ises is i!e&i)a+$e.
A!e!) )he "roce(ra$ iss(es raise, )he Co(r) #i!s !o re&ersi+$e error i!
)he s(**ar, C(g*e!) re!ere +, )he )ria$ co(r).
A s(**ar, C(g*e!) is o!e gra!)e +, )he co(r) ("o! *o)io! +, a "ar),
#or a! eD"ei)io(s se))$e*e!) o# )he case, )here a""eari!g #ro* )he "$eai!gs,
e"osi)io!s, a*issio!s, a! a##ia&i)s )ha) )here are !o i*"or)a!) '(es)io!s
or iss(es o# #ac) i!&o$&e :eDce") as )o )he a*o(!) o# a*ages<, a! )ha)
)here#ore )he *o&i!g "ar), is e!)i)$e )o a C(g*e!) as a *a))er o# $a%.
T12U
3! )he case a) +ar, )here is c$ear$, !o s(+s)a!)ia$ )ria+$e iss(e. 3! )he
A!s%er #i$e o! Dece*+er 29, 1989, "e)i)io!er oes !o) e!, )he eDis)e!ce o#
)he $ease co!)rac) eDec()e %i)h )he Ci), o# .a!i$a i! 7a!(ar, 1983. 3)
a*i))e )ha) i) #ai$e )o "a, )he re!)s a! rea$ es)a)e )aDes a! co!s)r(c)io!
o# a *($)i-s)ore, +(i$i!g.
3) "() (" )he e#e!se )ha) i) %as (!a+$e )o #($#i$$ i)s o+$iga)io!s o# )he
co!)rac) (e )o eco!o*ic recessio! i! 1989 as a! a#)er*a)h o# )he Ni!o,
A'(i!o assassi!a)io!. Co!sieri!g )ha) )here is !o ge!(i!e iss(e as )o a!,
*a)eria$ #ac), a s(**ar, C(g*e!) is "ro"er. The arg(*e!) )ha) i) %as
ec$are a his)orica$ $a!*ar2, is !o) a s(+s)a!)ia$ iss(e o# #ac) %hich oes
!o), i! a!, %a,, a$)er or a##ec) )he *eri) o# )he eCec)*e!) s(i).
Li2e%ise, %e #i! !o error *(ch $ess a!, a+(se o# a()hori), o! )he "ar) o#
)he $o%er co(r) i! !o) a*i))i!g )he A*e!e A!s%er. Asie #ro* )he #ac) )ha)
i) %as #i$e o!e :1< ,ear a#)er )he origi!a$ a!s%er %as #i$e, i) "() (" e#e!ses
%hich are e!)ire$, i! co!)raic)io! )o i)s origi!a$ a!s%er. This is i!
co!)ra&e!)io! o# )he r($es o# "roce(re.
T13U
0a&i!g a*i))e i! )he origi!a$
a!s%er )ha) )he Ci), o# .a!i$a is )he regis)ere o%!er o# )he "ro"er), a! )ha)
i) $ease )he "ro"er), #ro* i), "e)i)io!er ca! !o) !o% e!, s(ch c$ai* o#
o%!ershi". The Co(r) o# A""ea$s correc)$, o+ser&e o! )his "oi!):
*e t#at as it ma$, at t#is last stage, a'ter #erein petitioner #as dealt "it# t#e pri5ate
respondent as t#e o"ner o' t#e leased premises and obtained bene'its 'rom said
acHno"ledgment o' suc# o"ners#ip 'or almost #al' a centur$, #erein petitioner cannot
be permitted to assume an inconsistent position b$ den$ing said pri5ate respondentMs
o"ners#ip o' t#e leased premises "#en t#e situation calls 'or it% &erein petitioner
cannot be allo"ed to double deal, recognizing #erein pri5ate respondentMs title o5er
t#e leased premises and entering into a lease contract and ot#er co5enants, and
t#erea'ter a'ter 'ailing to compl$ "it# its obligation pro5ided 'or in t#e lease
agreement attempt to repudiate t#e o"ners#ip o' pri5ate respondent o' t#e sub4ect
propert$%
J1!K
CHEREFORE, )he ecisio! o# )he Co(r) o# A""ea$s is AFF3R.4D. The
i!s)a!) "e)i)io! is D4N34D, #or $ac2 o# *eri).
SO ORDERED!
3. T5N5D5 0. 5NG5R5
October 26, 2012 § Leave a comment
%A% !R5 1;, Fa/ %, 1BBA
Cacts G
This is a petition see<in, to nulli./ the Philippine rati2cation o. the -orld Trade 8r,aniDation (-T8)
5,ree)ent. Petitioners (uestion the concurrence o. herein respondents actin, in their capacities as
!enators 0ia si,nin, the said a,ree)ent.
The -T8 opens access to .orei,n )ar<ets, especiall/ its )a+or tradin, partners, throu,h the reduction
o. tari:s on its e7ports, particularl/ a,ricultural and industrial products. Thus, pro0ides ne"
opportunities .or the ser0ice sector cost and uncertaint/ associated "ith e7portin, and )ore
in0est)ent in the countr/. These are the predicted bene2ts as reIected in the a,ree)ent and as
0ie"ed b/ the si,nator/ !enators, a J.ree )ar<etK espoused b/ -T8.
Petitioners on the other hand 0ie"ed the -T8 a,ree)ent as one that li)its, restricts and i)pair
Philippine econo)ic so0erei,nt/ and le,islati0e po"er. That the Cilipino Cirst polic/ o. the onstitution
"as ta<en .or ,ranted as it ,i0es .orei,n tradin, inter0ention.
$ssue G -hether or not there has been a ,ra0e abuse o. discretion a)ountin, to lac< or e7cess o.
+urisdiction on the part o. the !enate in ,i0in, its concurrence o. the said -T8 a,ree)ent.
1eldG
$n its Declaration o. Principles and state policies, the onstitution Jadopts the ,enerall/ accepted
principles o. international la" as part o. the la" o. the land, and adheres to the polic/ o. peace,
e(ualit/, +ustice, .reedo), cooperation and a)it/ , "ith all nations. #/ the doctrine o. incorporation,
the countr/ is bound b/ ,enerall/ accepted principles o. international la", "hich are considered
auto)aticall/ part o. our o"n la"s. Pacta sunt ser0anda L international a,ree)ents )ust be per.or)ed
in ,ood .aith. 5 treat/ is not a )ere )oral obli,ation but creates a le,all/ bindin, obli,ation on the
parties.
Throu,h -T8 the so0erei,nt/ o. the state cannot in .act and realit/ be considered as absolute because
it is a re,ulation o. co))ercial relations a)on, nations. !uch as "hen Philippines +oined the 4nited
Nations (4N) it consented to restrict its so0erei,nt/ ri,ht under the Jconcept o. so0erei,nt/ as
autoli)itation.K -hat !enate did "as a 0alid e7ercise o. authorit/. 5s to deter)ine "hether such
e7ercise is "ise, bene2cial or 0iable is outside the real) o. +udicial in(uir/ and re0ie". The act o.
si,nin, the said a,ree)ent is not a le,islati0e restriction as -T8 allo"s "ithdra"al o. )e)bership
should this be the political desire o. a )e)ber. 5lso, it should not be 0ie"ed as a li)itation o.
econo)ic so0erei,nt/. -T8 re)ains as the onl/ 0iable structure .or )ultilateral tradin, and the
0eritable .oru) .or the de0elop)ent o. international trade la". $ts alternati0e is isolation, sta,nation i.
not econo)ic sel.'destruction. Thus, the people be allo"ed, throu,h their dul/ elected o9cers, )a<e
their .ree choice.
Petition is D$!F$!!6D .or lac< o. )erit.
S!c.11 P$"%c Ut%"%t%!s
1! 9agatsing vs Co((ittee
!R! No! 11+$'' 501> 1=- 1''7
RE4RESENTAT/E AMADO S! 9AGATS/NG- "e)i)io!er,
&s.
COMM/TTEE ON 4R/AT/?AT/ON- 4H/L/44/NE NAT/ONAL O/L COM4ANY and THE HONORA9LE E.EC6T/E
SECRETARY- res"o!e!)s!
G!R! No! 117''= 501> 1=- 1''7
NE4TAL/ A! GON?ALES- ERNESTO A! MACEDA- 5OHN H! OSMELA- C/G9ERTO E! TALADA- 5OKER O!
ARROYO- AMADO D! 9AGATS/NG- and RENE A!! SAG6/SAG- "e)i)io!ers,
&s.
DELF/N LA?ARO- in ;is ca8acit> as C;ai*(an o: t;e 4;i1i88ine Nationa1 Oi1 Co(8an>- MON/CO 5ACO9- in
;is ca8acit> as 4*esident o: 4NOC- COMM/TTEE ON 4R/AT/?AT/ON- 4H/L/44/NE NAT/ONAL O/L COM4ANY-
4ETRON COR4ORAT/ON- and ARAMCO OERSEAS COM4ANY 9!!- res"o!e!)s!

I6/ASON- J..
The "e)i)io! #or "rohi+i)io! i! G.R. No. 112399 so(gh): :1< )o !($$i#, )he +ii!g co!(c)e #or )he sa$e o# a +$oc2 o#
shares co!s)i)()i!g 90Z o# )he ca"i)a$ s)oc2 :90Z +$oc2< o# /e)ro! Cor"ora)io! :/4TR6N< a! )he a%ar *ae )o
Ara*co 6&erseas Co*"a!,, ?.>. :ARA.C6< as )he highes) +ier i! )he +ii!g co!(c)e o! Dece*+er 1=, 1993P
a! :2< )o s)o" )he sa$e o# sai +$oc2 o# shares )o ARA.C6. The S(""$e*e!)a$ /e)i)io! i! sai case so(gh) )o a!!($
)he +ii!g o# )he 90Z +$oc2 he$ o! Dece*+er 1=, 1993 a! )o se) asie )he a%ar gi&e! )o ARA.C6 :Rollo, "".
99-99<.
The "e)i)io! #or "rohi+i)io! a! certiorari i! G.R. No. 11=999 so(gh) )o a!!($ )he sa$e o# )he sa*e +$oc2 o# /e)ro!
shares s(+Cec) o# )he "e)i)io! i! G.R. No. 112399.
The "e)i)io! i! G.R. No. 112399 as2e #or )he iss(a!ce o# a )e*"orar, res)rai!i!g orer )o s)o" res"o!e!)s #ro*
se$$i!g )he 90Z +$oc2 )o a #oreig! +(,er :Rollo, ". 1=<. The "e)i)io! #or a )e*"orar, res)rai!i!g orer %as rei)era)e i!
a *o)io! #i$e s(+se'(e!)$, :Rollo, "". 107-108<.
The "e)i)io! i! G.R. No. 11=999 as2e #or )he iss(a!ce o# a )e*"orar, res)rai!i!g orer a! a %ri) o# "re$i*i!ar,
i!C(!c)io! )o res)rai! a! e!Coi! "(+$ic res"o!e!)s L#ro* "roceei!g %i)h )he "roCec)e i!i)ia$ "(+$ic o##eri!g o! 7($,
18, 1999 o# )he 20Z o# /e)ro!L :Rollo, ". 33<.
The -rge!) S(""$e*e!)a$ /e)i)io! i! sai case rei)era)e )he "ra,er #or )he i**eia)e iss(a!ce o# a "re$i*i!ar,
i!C(!c)io! )o e!Coi! )he i!i)ia$ "(+$ic o##eri!g o# )he /e)ro! shares :Rollo, "". 223-22=<.
Ac)io!s o! )he "e)i)io!s a! *o)io!s #or )he iss(a!ce o# a )e*"orar, res)rai!i!g orer a! a %ri) o# "re$i*i!ar,
i!C(!c)io! %ere e#erre.
The "e)i)io! i! G.R. No. 112399 %as #i$e +, Re"rese!)a)i&e A*ao S. ?aga)si!g %hi$e )he "e)i)io! i! G.R. No.
11=999 %as #i$e +, Se!a)ors Ne")a$i A. Go!Ga$es, 4r!es)o A. .acea, 7oh! 0. 6s*eEa a! 5ig+er)o 4. TaEaa,
Re"rese!)a)i&es 7o2er Arro,o a! A*ao D. ?aga)si!g a! #or*er Se!a)or Re!e A.>. Sag(isag Q a$$ i! )heir
ca"aci), as *e*+ers o# Co!gress, )aD"a,ers a! co!cer!e ci)iGe!s, eDce") i! )he case o# .r. Sag(isag, %ho s(e
as a "ri&a)e $a% "rac)i)io!er, *e*+er o# )he 3!)egra)e ?ar o# )he /hi$i""i!es, )aD"a,er a! co!cer!e ci)iGe!.
Res"o!e!) .o!ico >. 7aco+ %as i*"$eae i! G.R. No. 11=999 i! his ca"aci), as /resie!) o# res"o!e!)
/hi$i""i!e Na)io!a$ 6i$ Co*"a!, :/N6C<. A) )he )i*e o# )he #i$i!g o# )he "e)i)io!, he ha cease )o +e )he /resie!) o#
/N6C a! a *e*+er o# i)s go&er!i!g +oar. 0o%e&er, he is )he Chair*a! o# )he ?oar o# Direc)ors a! Chie#
4Dec()i&e 6##icer o# /4TR6N, a res"o!e!) i! +o)h cases. 0e as2e #or )he is*issa$ o# )he "e)i)io! o! )he gro(!
)ha) ha&i!g cease )o +e /N6C /resie!), "e)i)io!ers ha !o *ore ca(se o# ac)io! agai!s) hi*. 5e e!, )he *o)io!
i! &ie% o# )he #ac) )ha) )he "e)i)io! '(es)io!s his ac)s as /resie!) o# /N6C.
3! G.R. No. 11=999, ARA.C6 e!)ere a $i*i)e a""eara!ce )o '(es)io! )he C(risic)io! o&er i)s "erso!, a$$egi!g )ha)
i) is a #oreig! co*"a!, orga!iGe (!er )he $a%s o# )he Ne)her$a!s, )ha) i) is !o) oi!g !or $ice!se )o o +(si!ess i!
)he /hi$i""i!es, a! )ha) i) oes !o) *ai!)ai! a! o##ice or a +(si!ess aress i! a! has !o) a""oi!)e a resie!)
age!) #or )he /hi$i""i!es :Rollo, ". 290<.
3
/4TR6N %as origi!a$$, regis)ere %i)h )he Sec(ri)ies a! 4Dcha!ge Co**issio! :S4C< i! 1988 (!er )he cor"ora)e
!a*e L4sso /hi$i""i!es, 3!c.L :4SS6< as a s(+siiar, o# 4sso 4as)er!, 3!c. a! .o+i$ /e)ro$e(* Co*"a!,, 3!c.
3! 1973, a) )he heigh) o# )he %or$-%ie oi$ crisis +ro(gh) a+o() +, )he .i$e 4as) co!#$ic)s, )he /hi$i""i!e
go&er!*e!) ac'(ire 4SS6 )hro(gh )he /N6C. 4SS6 +eca*e a %ho$$,-o%!e co*"a!, o# )he go&er!*e!) (!er
)he cor"ora)e !a*e /4TR6N a! as a s(+siiar, o# /N6C.
3! ac'(iri!g /4TR6N, )he go&er!*e!) ai*e )o ha&e a +(##er agai!s) )he &agaries o# oi$ "rices i! )he i!)er!a)io!a$
*ar2e). 3) %as #e$) )ha) /4TR6N ca! ser&e as a co(!)er#oi$ agai!s) "rice *a!i"($a)io! )ha) *igh) go (!chec2e i# a$$
)he oi$ co*"a!ies %ere #oreig!-o%!e. 3!ee, /4TR6N he$"e a$$e&ia)e )he e!erg, crises )ha) &isi)e )he co(!)r,
#ro* 1973 )o 1979, 1979 )o 1980, a! 1990 )o 1991.
/4TR6N o%!s )he $arges), *os) *oer! co*"$eD re#i!er, i! )he /hi$i""i!es %i)h a !a*e"$a)e ca"aci), o# 1==,000
+arre$s "er s)rea* a,. 3) is a$so )he co(!)r,Ks +igges) co*+i!e re)ai$ a! %ho$esa$e *ar2e) o# re#i!e "e)ro$e(*
"ro(c)s. 3! 1992, i) gar!ere a 39.8Z share o# a$$ o*es)ic "ro(c)s so$, a! a) ,ear e! i)s asse)s )o)a$$e /29.9
+i$$io!. /4TR6NKs i!co*e as o# Se")e*+er 1993 %as /2.7 +i$$io!. 3) is $is)e as )he No. 1 cor"ora)io! i! )er*s o#
asse)s a! i!co*e i! )he /hi$i""i!es.
6! Dece*+er 8, 1988, /resie!) CoraGo! C. A'(i!o "ro*($ga)e /roc$a*a)io! No. =0 i! )he eDercise o# her
$egis$a)i&e "o%er (!er )he Freeo* Co!s)i)()io!.
The /roc$a*a)io! is e!)i)$e L/roc$ai*i!g a! La(!chi!g a /rogra* #or )he 4D"ei)io(s Dis"osi)io! a! /ri&a)iGa)io!
o# Cer)ai! Go&er!*e!) Cor"ora)io!s a!@or )he Asse)s )hereo#, a! Crea)i!g )he Co**i))ee o! /ri&a)iGa)io! a! )he
Asse) /ri&a)iGa)io! Tr(s).L
3*"$ici) i! )he /roc$a*a)io! is )he !ee )o raise re&e!(e #or )he Go&er!*e!) a! )he iea$ o# $ea&i!g +(si!ess )o )he
"ri&a)e sec)or. The Go&er!*e!) ca! )he! co!ce!)ra)e o! )he e$i&er, o# +asic ser&ices a! )he "er#or*a!ce o# &i)a$
"(+$ic #(!c)io!s.
6! Dece*+er 2, 1991, /resie!) Fie$ >. Ra*os !o)e )ha) LT)Uhe "ri&a)iGa)io! "rogra* has "ro&e! s(ccess#($ a!
+e!e#icia$ )o )he eco!o*, i! )er*s o# eD"a!i!g "ri&a)e eco!o*ic ac)i&i),, i*"ro&i!g i!&es)*e!) c$i*a)e, +roae!i!g
o%!ershi" +ase a! e&e$o"i!g ca"i)a$ *ar2e)s, a! ge!era)i!g s(+s)a!)ia$ re&e!(es #or "riori), go&er!*e!)
eD"e!i)(re,L +() LT)Uhere is s)i$$ *(ch "o)e!)ia$ #or har!essi!g "ri&a)e i!i)ia)i&e )o (!er)a2e i! +eha$# o# go&er!*e!)
cer)ai! ac)i&i)ies %hich ca! +e *ore e##ec)i&e$, a! e##icie!)$, (!er)a2e! +, )he "ri&a)e sec)orL :G.R. No.
112399, Rollo, ". 31<.
3! i)s *ee)i!g he$ o! Se")e*+er 9, 1992, )he /N6C ?oar o# Direc)ors a""ro&e S"eci#ic Thr(s) No. 8 a! *o&e
L)o +ri!g )o )he a))e!)io! o# )he A*i!is)ra)io! )he !ee )o "ri&a)iGe /e)ro! %he)her or !o) )here %i$$ +e ereg($a)io! To#
)he oi$ i!(s)r,UL :G.R. No. 112399, Rollo ". 87<.
3! a $e))er a)e 6c)o+er 21, 1992, Secre)ar, Ra*o! R. De$ Rosario, as Chair*a! o# )he Co**i))ee o! /ri&a)iGa)io!,
e!orse )o /resie!) Ra*os )he "ro"osa$ o# /N6C )o L"ri&a)iGe 8=Z o# )he s)oc2 o# /e)ro!, o"e! )o +o)h #oreig! as
%e$$ as o*es)ic i!&es)ors.L Secre)ar, De$ Rosario ae: LThe e!)r, o# #oreig! i!&es)ors i! )his #ie$ is eD"ec)e )o
res($) i! i*"ro&e )ech!o$og, a! 2!o%-ho% a! %i$$ e!a+$e /e)ro! )o ha&e access )o i!)er!a)io!a$ i!#or*a)io!
!e)%or2 as %e$$ as access )o eD)er!a$ *ar2e)s a! re#i!i!g co!)rac)sL :G.R. No. 112399,Rollo, ". 72<.
6! 7a!(ar, 9, 1993, a #o$$o%-(" $e))er %as se!) +, Secre)ar, De$ Rosario i!#or*i!g )he /resie!) )ha): LThe
"ri&a)iGa)io! o# /e)ro!, reco**e!e +, +o)h )he *a!age*e!) o# /hi$i""i!e Na)io!a$ 6i$ Co*"a!, :/N6C< a! )he
Co**i))ee o! /ri&a)iGa)io! :C6/<, %i$$ se! )he righ) sig!a$s )ha) *a, re-ig!i)e i!&es)or i!)eres) i! )he /hi$i""i!es #or
1993L :G.R. No. 112399, Rollo, ". 73<.
3! a $e))e a)e 7a!(ar, 8, 1993, Secre)ar, esig!a)e De$#i! L. LaGaro o# )he De"ar)*e!) o# 4!erg,, #a&ora+$,
e!orse #or a""ro&a$ )he "$a! )o se$$ (" )o 8=Z o# )he ca"i)a$ s)oc2 o# /4TR6N. 0e a$so !o)e )ha) )he sai "$a!
%as Lco!sis)e!) %i)h )he 4!erg, Sec)or Ac)io! /$a! a""ro&e +, )he /resie!) a! )he Ca+i!e) o! No&e*+er 27,
1992L :G.R. No. 112399, Rollo, ". 79<.
6! 7a!(ar, 12, 1993, )he Ca+i!e) a""ro&e )he "ri&a)iGa)io! o# /4TR6N as "ar) o# )he 4!erg, Sec)or Ac)io! /$a!.
6! .arch 2=, 1993, )he Go&er!*e!) Cor"ora)e .o!i)ori!g a! Coori!a)i!g Co**i))ee :GC.CC< reco**e!e a
100Z "ri&a)iGa)io! o# /4TR6N.
6! .arch 31, 1993, )he /N6C ?oar o# Direc)ors "asse a reso$()io! a()horiGi!g )he co*"a!, )o !ego)ia)e a!
co!c$(e a co!)rac) %i)h )he co!sor)i(* o# Sa$o*o! ?ro)hers o# 0o!g2o!g Li*i)e a! /C3 Ca"i)a$ Cor"ora)io! #or
#i!a!cia$ a&isor, ser&ices )o +e re!ere )o /4TR6N.
6! A"ri$ 1, 1993, )he GC.CC reco**e!e )o C6/ )he "ri&a)iGa)io! o# o!$, 8=Z o# )he ca"i)a$ s)oc2 o# /4TR6N,
i!s)ea o# )he 100Z "ri&a)iGa)io! "re&io(s$, reco**e!e.
6! 7(!e 10, 1993, i! a $e))er aresse )o Secre)ar, 4r!es)o C. Le(!g, )he C6/ Chair*a!, /resie!) Ra*os
a""ro&e )he "ri&a)iGa)io! o# /4TR6N (" )o a *aDi*(* o# 8=Z o# i)s ca"i)a$ s)oc2.
The /e)ro! /ri&a)iGa)io! 5or2i!g Co**i))ee :/5C< %as )h(s #or*e. 3) #i!a$iGe a "ri&a)iGa)io! s)ra)eg, %i)h 90Z o#
)he shares )o +e so$ )o a s)ra)egic "ar)!er a! 20Z )o )he ge!era$ "(+$ic )hro(gh )he i!i)ia$ "(+$ic o##eri!g a!
e*"$o,ees s)oc2 o")io! "$a!.
The Co**issio! o! A(i) :C6A< %as co!s($)e as )o )he &a$(a)io! *e)hoo$ogies a! "ri&a)iGa)io! "rocess. The
"ri&a)iGa)io! "$a! %as a$so "rese!)e )o )he C6/ o! 7($, 23, 1993, a! )o )he /resie!) o! 7($, 31, 1993 #or )heir
a""ro&a$.
6! A(g(s) 10, 1993, )he /resie!) a""ro&e )he 90Z Q 90Z Q 20Z "ri&a)iGa)io! s)ra)eg, o# /4TR6N. 3! )he "ress
re$ease o! )he "resie!)ia$ a""ro&a$ o# )he sai "ri&a)iGa)io!, )he 6##ice o# )he /resie!) co**e!)e:
For /e)ro!, gai!i!g a $o!g-)er* s)ra)egic "ar)!er )ha) %i$$ e!s(re s)a+$e cr(e oi$ s(""$ies a!@or
a&a!ce i)s )ech!o$ogica$ a! #i!a!cia$ "osi)io! %i$$ +e a e#i!i)e a&a!)age. 3! ai)io!, i)s "ar)ia$
"ri&a)iGa)io! %i$$ "ro&ie )he #$eDi+i$i), a! $e&e$ "$a,i!g #ie$ i) !ees )o re*ai! a *aCor, a!
)here#ore i!#$(e!)ia$ "$a,er i! )he oi$ i!(s)r,. 3! 1992, /e)ro! o*i!a)e )he oi$ i!(s)r, %i)h a
co**a!i!g 90Z *ar2e) share :G.R. No. 112399, Rollo, ". 83<.
The i!&i)a)io! )o +i %as "(+$ishe i! se&era$ !e%s"a"ers o# ge!era$ circ($a)io!, +o)h $oca$ a! #oreig!. The ea$i!e
#or )he s(+*issio! o# "ro"osa$s %as se) #or Dece*+er 1=, 1993 a) =:00 /...
/4TR6N #(r!ishe )he 6##ice o# )he So$ici)or Ge!era$ :6SG< %i)h co"ies o# )he ra#) o# )he s)oc2 "(rchase agree*e!)
a! shareho$ersK agree*e!), %i)h a re'(es) #or )he re&ie% o# )he sa*e.
3! a *ee)i!g o# )he /e)ro! /5C he$ o! Dece*+er 1=, 1993 a) 12:00 !oo!, i) ecie )ha) 5es)*o!) 0o$i!gs
:54ST.6NT< %as is'(a$i#ie #ro* "ar)ici"a)i!g i! )he +ii!g #or i)s a$$ege #ai$(re )o co*"$, %i)h )he )ech!ica$ a!
#i!a!cia$ re'(ire*e!)s #or a s)ra)egic "ar)!er.
Sa$o*o! ?ro)hers &a$(e /4TR6N a) -SY800 *i$$io! a! )he 90Z +$oc2 a) -SY290 *i$$io!. For )he e!)ire /e)ro!
shares, res"o!e!) Secre)ar, LaGaro "ro"ose a &a$(a)io! o# -SY1.9 +i$$io!P /e)ro! *a!age*e!), -SY8=7 *i$$io!P
a! Fra!ces 6!a)e, a *e*+er o# )he /e)ro! /5C, a &a$(a)io! o# -SY793 *i$$io! )o -SY1 +i$$io!.
Fi!a$$,, )he #$oor "rice +i #or )he 90Z +$oc2 %as #iDe a) -SY990 *i$$io!.
The +is o# /e)ro$ia* Nasio!a$ ?erha :/4TR6NAS<, ARA.C6 a! 54ST.6NT %ere s(+*i))e %hi$e )he #$oor
"rice %as +ei!g isc(sse.
A) a+o() 8:1= /... a! +e#ore )he +is %ere o"e!e, 54ST.6NT )hro(gh i)s re"rese!)a)i&e, .a!(e$ 4s)re$$a,
s(+*i))e ai)io!a$ oc(*e!)s )o "ro&e i)s #i!a!cia$ ca"a+i$i), )o carr, o() )he "(rchase o# )he 90Z +$oc2. The
/N6C ?oar o# Direc)ors ao")e Reso$()io! No. 88=, S. 1993, reCec)i!g )he +i o# 54ST.6NT #or !o) ha&i!g *e)
)he "re-'(a$i#ica)io! cri)eria o# #i!a!cia$ ca"a+i$i),, $o!g-)er* cr(e s(""$, a&ai$a+i$i),, a! )ech!ica$ a! *a!age*e!)
eD"er)ise i! )he oi$ +(si!ess. 3) %as #(r)her reso$&e )ha) )he +i s(+*i))e +, 54ST.6NT %o($ +e re)(r!e
(!o"e!e.
A) 8:30 /..., )he o)her )%o +is %ere o"e!e. The +i o# ARA.C6 %as #or -SY=02 *i$$io! %hi$e )he +i o#
/4TR6NAS %as #or -SY921 *i$$io!. The /N6C ?oar o# Direc)ors )he! "asse Reso$()io! No. 888, S. 1993,
ec$ari!g ARA.C6 )he %i!!i!g +ier.
6! Dece*+er 1=, 1993, )he 6SG i!#or*e /4TR6N )ha) )he ra#)s o# )he s)oc2 "(rchase agree*e!) a!
shareho$ersK agree*e!) co!)ai!e !o $ega$$, o+Cec)io!a+$e "ro&isio!s a! co($ +e )he +asis #or /4TR6NKs
!ego)ia)io! %i)h )he %i!!i!g +ier.
6! Dece*+er 18, 1993, res"o!e!) .o!ico 7aco+, i! his ca"aci), as /resie!) a! Chie# 4Dec()i&e 6##icer o#
/N6C, e!orse )o )he C6/ )he +i o# ARA.C6 #or a""ro&a$. The C6/ ga&e i)s a""ro&a$ o! )he sa*e a,. A$so o!
)he sa*e a,, .a!(e$ 4s)re$$a #i$e a co*"$ai!) i! +eha$# o# 54ST.6NT %i)h /N6C, '(es)io!i!g )he a%ar o# )he
90Z +$oc2 o# /e)ro! shares )o ARA.C6. The C6/ a!s%ere 4s)re$$aKs $e))er o! 7a!(ar, 19, 1999, eD"$ai!i!g %h,
54ST.6NTKs +i %as re)(r!e (!o"e!e.
6! Fe+r(ar, 3, 1999, /N6C a! ARA.C6 sig!e )he S)oc2 /(rchase Agree*e!) a! o! .arch 9, 1999, )he )%o
co*"a!ies sig!e )he Shareho$ersK Agree*e!).
/(+$ic res"o!e!)s s(+*i))e )o )he Sec(ri)ies a! 4Dcha!ge Co**issio! :S4C< a "ro"ose "rice #or )he i!i)ia$
"(+$ic o##eri!g o# )he 20Z +$oc2 se) #or 7($, 18, 1999, )he seco! "hase o# /4TR6NKs "ri&a)iGa)io!. /4TR6N
"ro"ose a "rice o# +e)%ee! /7.00 a! /18.00 "er share +() )he S4C a""ro&e a "rice o# /9.00 "er share.
33
/4TR6N '(es)io!s )he locus standi o# "e)i)io!ers )o #i$e )he ac)io! :Rollo, "". 979-989<. /e)i)io!ers ho%e&er,
co(!)ere )ha) )he, #i$e )he ac)io! i! )heir ca"aci), as *e*+ers o# Co!gress.
3! 1$ilippine Constitution ssociation v. 3on( Salvador 9nriBue., G.R. No. 11310=, A(g(s) 19, 1999, %e he$ )ha) )he
*e*+ers o# Co!gress ha&e )he $ega$ s)a!i!g )o '(es)io! )he &a$ii), o# ac)s o# )he 4Dec()i&e %hich i!C(res )he* i!
)heir "erso! or )he i!s)i)()io! o# Co!gress )o %hich )he, +e$o!g. 3! )he $a))er case, )he ac)s ca(se eri&a)i&e +()
!o!e)he$ess s(+s)a!)ia$ i!C(r, %hich ca! +e '(es)io!e +, *e*+ers o# Co!gress :1e!!e, &. 7a*es, 912 F. S("".
3=3 T1978U<. 3! )he a+se!ce o# a c$ai* )ha) )he co!)rac) i! '(es)io! &io$a)e )he righ)s o# "e)i)io!ers or i*"er*issi+$,
i!)r(e i!)o )he o*ai! o# )he Legis$a)(re, "e)i)io!ers ha&e !o $ega$ s)a!i!g )o i!s)i)()e )he i!s)a!) ac)io! i! )heir
ca"aci), as *e*+ers o# Co!gress.
0o%e&er, "e)i)io!ers ca! +ri!g )he ac)io! i! )heir ca"aci), as )aD"a,ers (!er )he oc)ri!e $ai o%! i! Cilos"a%an,
!nc( v( /uingona, 232 SCRA 110 :1999<. -!er sai r($i!g, )aD"a,ers *a, '(es)io! co!)rac)s e!)ere i!)o +, )he
!a)io!a$ go&er!*e!) or go&er!*e!)-o%!e or co!)ro$$e cor"ora)io!s a$$ege )o +e i! co!)ra&e!)io! o# )he $a%. As
$o!g as )he r($i!g i! Cilos"a%an o! locus standi is !o) re&erse, %e ha&e !o choice +() )o #o$$o% i) a! ("ho$ )he
$ega$ s)a!i!g o# "e)i)io!ers as )aD"a,ers )o i!s)i)()e )he "rese!) ac)io!.
333
A. /e)i)io!ers i! G.R. Nos. 112399 a! 11=999 c$ai* )ha) )he i!c$(sio! o# /4TR6N i! )he "ri&a)iGa)io! "rogra*
co!)ra&e!e )he ec$are "o$ic, o# )he S)a)e )o is"ose o# o!$, !o!-"er#or*i!g asse)s o# )he go&er!*e!) a!
go&er!*e!)-o%!e or co!)ro$$e cor"ora)io!s %hich ha&e +ee! #o(! (!!ecessar, or i!a""ro"ria)e #or )he
go&er!*e!) sec)or )o *ai!)ai!. The, co!)e! )ha) /4TR6N is !ei)her a !o!-"er#or*i!g asse) !or is i) (!!ecessar, or
i!a""ro"ria)e #or )he go&er!*e!) )o *ai!)ai! or o"era)e :G.R. No. 112399, Rollo, "". 3-9, 8-13P G.R. No.
11=999, Rollo, "". 19-17, 218-217<.
To sa, )ha) o!$, !o!-"er#or*i!g asse)s sho($ +e )he s(+Cec) o# "ri&a)iGa)io! oes !o) co!#or* %i)h )he rea$i)ies o#
eco!o*ic $i#e. 3! )he %or$ o# +(si!ess a! #i!a!ce, i) is i##ic($) )o se$$ a +(si!ess i! ire, #i!a!cia$ is)ress. As
e!)re"re!e(r Do! 4(ge!io Lo"eG (se )o a&er) )o his ,o(!ger eDec()i&es: LDo!K) +(, heaaches. Do!K) e&e! acce")
)he* i# )he, are o##ere )o ,o( o! a si$&er "$a))er.L 3) is o!$, i! a #ire sa$e )ha) )he go&er!*e!) ca! eD"ec) )o ge) ri o#
i)s !o!-"er#or*i!g asse)s, *ore so i# )he se'(e!ci!g "a))er! i!sis)e +, "e)i)io!ers :i!i)ia$ "(+$ic o##eri!g o# 10Z +$oc2
)o s*a$$ i!&es)ors< is #o$$o%e.
5hi$e /roc$a*a)io! No. =0 *a!a)es )ha) !o!-"er#or*i!g asse)s sho($ "ro*")$, +e so$, i) oes !o) "rohi+i) )he
is"osa$ o# )he o)her 2i!s o# asse)s, %he)her "er#or*i!g, !ecessar, or a""ro"ria)e.
Sec)io! 1 o# )he /roc$a*a)io! reas:
Statement of 1olic%. Q 3) sha$$ +e )he "o$ic, o# )he S)a)e )o "ro*o)e "ri&a)iGa)io! )hro(gh a! orer$,,
coori!a)e a! e##icie!) "rogra* #or )he "ro*") is"osi)io! o# )he $arge !(*+er o# !o!-"er#or*i!g
asse)s o# )he go&er!*e!) #i!a!cia$ i!s)i)()io!s, a! cer)ai! go&er!*e!)-o%!e or co!)ro$$e
cor"ora)io!s %hich ha&e +ee! #o(! (!!ecessar, or i!a""ro"ria)e #or )he go&er!*e!) sec)or )o
*ai!)ai!.
The sai "ro&isio! c$assi#ies )%o ),"es o# asse)s: :1< No!-"er#or*i!g asse)s o# go&er!*e!) #i!a!cia$ i!s)i)()io!sP a!
:2< Go&er!*e!)-o%!e or co!)ro$$e cor"ora)io!s %hich ha&e +ee! #o(! (!!ecessar, or i!a""ro"ria)e #or )he
go&er!*e!) sec)or )o *ai!)ai!.
-!er )he /roc$a*a)io!, i) is )he C6/ %hich is )as2e %i)h )he (), o# ie!)i#,i!g a! arra!gi!g )he sa$e o#
go&er!*e!) asse)s. Sec)io! =:1< o# )he /roc$a*a)io! "ro&ies:
1owers and 0unctions. Q The Co**i))ee sha$$ ha&e )he #o$$o%i!g "o%ers a! #(!c)io!s:
:1< To ie!)i#, )o )he /resie!) o# )he /hi$i""i!es, a! arra!ge #or )ra!s#er )o )he Na)io!a$
Go&er!*e!) a!@or )o )he Tr(s) a! )he s(+se'(e!) i&es)*e!) )o )he "ri&a)e sec)or o# :a< s(ch
!o!-"er#or*i!g asse)s as *a, +e ie!)i#ie +, )he Co**i))ee, a! a""ro&e +, )he /resie!), #or
)ra!s#er #ro* )he go&er!*e!) +a!2s #or is"osa$ +, )he Tr(s) or )he go&er!*e!) +a!2s, a! :+<
s(ch go&er!*e!) cor"ora)io!s, %he)her "are!) or s(+siiar,, a!@or s(ch o# )heir asse)s, as *a,
ha&e +ee! reco**e!e +, )he Co**i))ee #or is"osi)io!, a! 1rovided, )ha) no suc$
identification, recommendation or approval s$all "e necessar% w$ere a parent corporation decides
on its own to divest of, in w$ole or in part, or liBuidate a su"sidiar% corporation organi.ed under t$e
Corporation CodeP 1rovided furt$er, )ha) a!, s(ch i!e"e!e!) is"osi)io! sha$$ +e (!er)a2e! %i)h
)he "rior a""ro&a$ o# )he Co**i))ee a! i! accora!ce %i)h )he ge!era$ is"osi)io! g(ie$i!es as
)he Co**i))ee *a, "ro&ieP 1rovided, finall%, )ha) i! e&er, case )he sa$e or is"osi)io! sha$$ +e
a""ro&e +, )he Co**i))ee %i)h res"ec) )o )he +(,er a! "rice o!$,P :4*"hasis s(""$ie<.
DDD DDD DDD
A#)er a $o!g s)(, +, /N6C, /4TR6N %as #o(! )o +e Li!a""ro"ria)e or (!!ecessar,L #or )he go&er!*e!) )o
*ai!)ai! +eca(se re#i!i!g a! *ar2e)i!g o# "e)ro$e(* is a! as"ec) o# )he i!(s)r, %hich is +e))er $e#) )o )he "ri&a)e
sec)or. 3! *a2i!g s(ch #i!i!g, /N6C %as g(ie +, Sec)io! 9:a< o# /roc$a*a)io! No. =0, %hich "ro&ies:
. . . :a< i&es)i!g )o )he "ri&a)e sec)or i! )he soo!es) "ossi+$e )i*e )hro(gh )he a""ro"ria)e
is"osi)io! e!)i)ies, )hose asse)s %i)h &ia+$e "ro(c)i&e "o)e!)ia$ as goi!g co!cer!s, )a2i!g i!)o
acco(!) %here a""ro"ria)e )he i*"$ica)io!s o# s(ch )ra!s#ers o! sec)ora$ "ro(c)i&e ca"aci)ies a!
*ar2e) $i*i)a)io!, . . . . These o+Cec)i&es are )o +e "(rs(e %i)hi! )he co!)eD) o# #(r)heri!g )he
!a)io!a$ eco!o*, )hro(gh s)re!g)he!e a! re&i)a$iGe "ri&a)e e!)er"rise s,s)e*.
The ecisio! o# /N6C )o "ri&a)iGe /4TR6N a! )he a""ro&a$ o# )he C6/ o# s(ch "ri&a)iGa)io!, +ei!g *ae i!
accora!ce %i)h /roc$a*a)io! No. =0, ca!!o) +e re&ie%e +, )his Co(r). S(ch ac)s are eDercises o# )he eDec()i&e
#(!c)io! as )o %hich )he Co(r) %i$$ !o) "ass C(g*e!) ("o! or i!'(ire i!)o )heir %iso* :L$a*as &. 6r+os, 202 SCRA
899 T1991U<.
S(ch ie!)i#ica)io! +, )he C6/ o# )he go&er!*e!) cor"ora)io!s )o +e "ri&a)iGe %as !o) e&e! !ecessar, i! )he case o#
/4TR6N. -!er Sec)io! =:1< o# /roc$a*a)io! No. =0 L. . . TNUo s(ch ie!)i#ica)io!, reco**e!a)io! or a""ro&a$ sha$$
+e !ecessar, %here a "are!) cor"ora)io! ecies o! i)s o%! )o i&es) o#, i! %ho$e or i! "ar), or $i'(ia)e a s(+siiar,
cor"ora)io! orga!iGe (!er )he Cor"ora)io! CoeP . . . .L
The o!$, "ar)ici"a)io! o# )he C6/ i! )he sa$e o# )he /e)ro! shares +, /N6C, )he "are!) cor"ora)io!, %as )he a""ro&a$
o# )he +(,ers a! "rice. The $as) se!)e!ce o# "aragra"h :1< o# Sec)io! = "ro&ies:
. . . 1rovided, finall%, )ha) i! e&er, case )he sa$e or is"osi)io! sha$$ +e a""ro&e +, )he Co**i))ee
%i)h res"ec) )o )he +(,er a! "rice o!$,.
/N6C, i! "ri&a)iGi!g /4TR6N, %as si*"$, eDercisi!g i)s cor"ora)e "o%er )o is"ose o# a$$ or a "or)io! o# i)s shares i!
a s(+siiar,. /N6C %as crea)e (!er /.D. No. 339, as a*e!e +, /.D. No. 927, %hich e*"o%ers i) )o ac'(ire
shares o# )he ca"i)a$ s)oc2 o# a!, o)her cor"ora)io! a! )o is"ose o# )he sa*e shares.
?esies, i# o!$, !o!-"er#or*i!g asse)s are i!)e!e )o +e so$, i) %o($ +e (!!ecessar, )o "ro&ie i! )he
/roc$a*a)io! #or )he reha+i$i)a)io! o# go&er!*e!) cor"ora)io!s )o *a2e )he sa*e *ore a))rac)i&e )o i!&es)ors a!
"o)e!)ia$ +(,ers.
Sec)io! = :=< o# /roc$a*a)io! No. =0 "ro&ies:
3! i)s iscre)io!, )o a""ro&e or isa""ro&e, s(+Cec) )o )he a&ai$a+i$i), o# #(!s #or s(ch "(r"ose, )he
reha+i$i)a)io! o# asse)s "e!i!g is"osi)io! +, )he Tr(s) or a!, o)her go&er!*e!) age!c, a()horiGe
+, )he Co**i))ee, or )he Tr(s) %i)h )he a""ro&a$ o# )he Co**i))ee, 1rovided )ha), )he +(ge) #or
each reha+i$i)a)io! "roCec) sha$$ +e $i2e%ise s(+Cec) )o "rior a""ro&a$ +, )he Co**i))ee.
No%here i! )he /roc$a*a)io! ca! o!e i!#er )ha) i) "rohi+i)s a "ar)ia$ "ri&a)iGa)io! o# &i)a$, a""ro"ria)e a! "er#or*i!g
cor"ora)io!s o%!e +, )he go&er!*e!).
/roc$a*a)io! No. =0 co!)ai!e a! A!!eD $is)i!g )he cor"ora)io!s )o +e "ri&a)iGe a! )hose )o +e re)ai!e. 5hi$e
/4TR6N %as *e!)io!e a*o!g )he cor"ora)io!s )o +e re)ai!e, Sec)io! 8 o# )he /roc$a*a)io! irec)e a co!)i!(i!g
s)(, o! %ha) cor"ora)io!s sho($ +e reco**e!e #or "ri&a)iGa)io!.
3) is *ar2%or)h, )ha) )he sai A!!eD i !o) i!ica)e )he "erce!)age o# shares )ha) %i$$ +e "ri&a)iGe or )ha) %i$$ +e
re)ai!e. 3) ca! +e i!)er"re)e )o *ea! )ha) a$$ )he shares o# )he cor"ora)io!s i! )he $is) )o +e "ri&a)iGe *a, +e so$,
%hi$e o!$, so*e o# )he shares o# )he o)her cor"ora)io!s *a, +e so$. 3) is a$so %or)h, o# !o)e )ha) )he $is) o#
cor"ora)io!s )o +e re)ai!e ae )he "hrase LAs o# 31 A(g(s) 1992,L *ea!i!g )ha) a!, o# )he cor"ora)io!s
*e!)io!e )herei! *a, +e e$is)e a#)er )ha) a)e i# a s)(, %o($ C(s)i#, s(ch ac)io!.
The go&er!*e!) is !o) is"osi!g o# a$$ o# i)s shares i! /4TR6N +() is re)ai!i!g a 90Z +$oc2. Toge)her %i)h )he
%ie$,-he$ 20Z o# )he "ri&a)e sec)or co!)ro$ o# /4TR6N +, )he go&er!*e!) is ass(re. 5i)h s(ch e'(i), i!
/4TR6N, )he go&er!*e!) ca! a$so *ai!)ai! a %i!o% )o )he oi$ i!(s)r, a! a) )he sa*e )i*e share i! )he "ro#i)s o#
)he co*"a!,.
The "ri&a)iGa)io! o# /4TR6N co($ %e$$ +e (!er)a2e! (!er $a%s o)her )ha! /roc$a*a)io! No. =0.
6# sig!i#ica!ce is Sec)io! 2:c< o# R.A. No. 7181, %hich "ro&ies )ha):
/ri&a)iGa)io! o# go&er!*e!) asse)s c$assi#ie as a strategic industr% +, )he Na)io!a$ 4co!o*ic a!
De&e$o"*e!) A()hori), sha$$ #irs) +e a""ro&e +, )he /resie!) o# )he /hi$i""i!es :4*"hasis
s(""$ie<.
Sec)io! 8, )he re"ea$i!g c$a(se o# R.A. No. 7181, eD"ress$, re"ea$e Sec)io!s 3 a! 10 o# /roc$a*a)io! No. =0 a!
a$$ o)her $a%s, orers a! r($es a! reg($a)io!s %hich are i!co!sis)e!) )here%i)h.
The o!$, re'(ire*e!) (!er R.A. No. 7181 i! orer )o "ri&a)iGe a s)ra)egic i!(s)r, $i2e /4TR6N is )he a""ro&a$ o#
)he /resie!). 3! )he case o# /4TR6NKs "ri&a)iGa)io!, )he /resie!) ga&e his a""ro&a$ !o) o!$, o!ce +() )%ice.
/4TR6NKs "ri&a)iGa)io! is a$so i! $i!e %i)h a! is "ar) o# )he /hi$i""i!e 4!erg, /rogra* (!er R.A. No. 7838. Sec)io!
=:+< o# )he $a% "ro&ies )ha) )he /hi$i""i!e 4!erg, /rogra* sha$$ i!c$(e a "o$ic, irec)io! )o%ars )he "ri&a)iGa)io! o#
go&er!*e!) age!cies re$a)e )o e!erg,.
-!er /.D. No. 339, )he $a% crea)i!g /N6C, sai cor"ora)io! is gra!)e )he a()hori), LT)Uo es)a+$ish a! *ai!)ai!
o##ices, +ra!ches, age!cies, s(+siiaries, corres"o!e!)s or o)her (!i)s a!,%here as *a, +e !eee +, )he
Co*"a!, a! reorga!iGe or a+o$ish )he sa*e as i) *a, ee* "ro"er.L
?. /e)i)io!ers !eD) '(es)io! )he reg($ari), a! &a$ii), o# )he +ii!g :G.R. No. 112399, Rollo, "". 97-99P G.R. No.
11=999, Rollo, "". 17-29, 221<. /e)i)io!ers i! G.R. No. 11=999 c$ai* )ha) )he "(+$ic +ii!g %as )ai!)e %i)h has)e
a! ar+i)rari!ess a! )ha) )here %as a #ai$e +ii!g +eca(se )here %as o!$, o!e o##eror :Rollo, "". 17-29<.
Ta2i!g )he c(ge$s #or 54ST.6NT, "e)i)io!ers (rge )ha) sai +ier %as o!$, gi&e! )%o a,s )o co!(c) a re&ie%
/4TR6NKs &as) +(si!ess o"era)io!s i! orer )o co*"$, %i)h )he )ech!ica$ a! #i!a!cia$ re'(ire*e!)s #or "re-
'(a$i#ica)io!. /e)i)io!ers a$so co*"$ai! )ha) )he "re-'(a$i#ica)io! a! ac)(a$ +ii!g %ere co!(c)e o! )he sa*e a,,
)h(s e!,i!g a is'(a$i#ie +ier a! o""or)(!i), )o "ro)es) or )o a""ea$. The, '(es)io! )he #iDi!g o# )he #$oor "rice o!
)he sa*e a, as )he "(+$ic +ii!g a! o!$, a#)er )he +is ha +ee! s(+*i))e. Li2e%ise, )he, sa, )ha) )he a""ro&a$
o# )he +i o# ARA.C6 +, )he Asse)s /ri&a)iGa)io! Tr(s) o! )he sa*e a, i) is s(+*i))e is a!o*a$o(s :G.R. No.
11=999, Rollo, "". 22-29<.
6! )he c$ai* )ha) )here %as a #ai$e +ii!g, "e)i)io!ers co!)e! )ha) )here %ere o!$, )hree +iers. 6!e o# )he*,
/4TR6NAS, s(+*i))e a +i $o%er )ha! )he #$oor "rice %hi$e a seco!, #ai$e )o "re-'(a$i#,. Ci)i!g Sec)io! >-2-a o#
C6A Circ($ar No. 89-298 a)e 7a!(ar, 27, 1989, )he, arg(e )ha) %here o!$, o!e +ier '(a$i#ies, )here is a #ai$(re o#
"(+$ic a(c)io! :G.R. No. 11=999, Rollo, ". 22<.
5he! a #ai$(re o# +ii!g )a2es "$ace is e#i!e i! Circ($ar No. 89-298 o# )he Co**issio! o! A(i), %hich "rescri+es
)he LA(i) G(ie$i!es o! )he Di&es)*e!) or Dis"osa$ o# /ro"er), a! o)her Asse)s o# )he Na)io!a$ Go&er!*e!)
Age!cies a! 3!s)r(*e!)a$i)ies, Loca$ Go&er!*e!) -!i)s a! Go&er!*e!)-6%!e or Co!)ro$$e Cor"ora)io!s a!
)heir S(+siiaries.L
>. .6D4S 6R D3S/6SAL@D3>4ST.4NT:
DDD DDD DDD
2 Sale T$ru Negotiation
For C(s)i#ia+$e reaso!s a! as e*a!e +, )he eDige!cies o# )he ser&ice, is"osa$ )hr( !ego)ia)e
sa$e *a, +e resor)e )o a! (!er)a2e! +, )he "ro"er co**i))ee or +o, i! )he age!c, or e!)i),
co!cer!e )a2i!g i!)o co!siera)io! )he #o$$o%i!g #ac)ors:
a. There %as a #ai$(re o# "(+$ic a(c)io!. As e!&isio!e i! )his Circ($ar, )here is a #ai$(re o# "(+$ic
a(c)io! i! a!, o# )he #o$$o%i!g i!s)a!ces:
1 i# )here is o!$, o!e o##eror.
3! )his case, )he o##er or +i, i# sea$e, sha$$ !o) +e o"e!e.
2 i# a$$ )he o##ers@)e!ers are !o!-co*"$,i!g or (!acce")a+$e.
A )e!er is !o!-co*"$,i!g or (!acce")a+$e %he! i) oes !o) co*"$, %i)h )he
"rescri+e $ega$, )ech!ica$ a! #i!a!cia$ re'(ire*e!) #or "re-'(a$i#ica)io!.
-!er sai C6A Circ($ar, )here is a #ai$(re o# +ii!g %he!: 1< )here is o!$, o!e o##erorP or :2< %he! a$$ )he o##ers are
!o!-co*"$,i!g or (!acce")a+$e.
3! )he case a) +e!ch, )here %ere )hree o##erors: SA-D3 ARA.C6, /4TR6NAS a! 54ST.6NT.
5hi$e )%o o##erors %ere is'(a$i#ie, /4TR6NAS #or s(+*i))i!g a +i +e$o% )he #$oor "rice a! 54ST.6NT #or
)ech!ica$ reaso!s, !o) a$$ )he o##erors %ere is'(a$i#ie. To co!s)i)()e a #ai$e +ii!g (!er )he C6A Circ($ar, a$$ )he
o##erors *(s) +e is'(a$i#ie.
/e)i)io!ers (rge )ha) i! e##ec) )here %as o!$, o!e +ier a! )ha) i) ca! !o) +e sai )ha) )here %as a co*"e)i)io! o!
La! e'(a$ #oo)i!gL :G.R. No. 112399, Rollo, ". 122<. ?() )he C6A Circ($ar oes !o) s"ea2 o# acce")e +is +() o#
o##erors, %i)ho() is)i!c)io! as )o %he)her )he, %ere is'(a$i#ie.
The C6A i)se$#, )he age!c, )ha) ao")e )he r($es o! +ii!g "roce(re )o +e #o$$o%e +, go&er!*e!) o##ices a!
cor"ora)io!s, ha ("he$ )he &a$ii), a! $ega$i), o# )he '(es)io!e +ii!g. The i!)er"re)a)io! o# a! age!c, o# i)s o%!
r($es sho($ +e gi&e! *ore %eigh) )ha! )he i!)er"re)a)io! +, )ha) age!c, o# )he $a% i) is *ere$, )as2e )o a*i!is)er.
The case o# Danville -aritime, !nc. v. Commission on udit, 17= SCRA 701 :1989<, re$ie ("o! +, "e)i)io!er, is
i!a""ro"ria)e. 3! sai case, )here %as o!$, o!e o##eror i! )he +ii!g. The Co(r) sai: L. . . T3U# )here is o!$, o!e
"ar)ici"a)i!g +ier, )he +ii!g is !o!-co*"e)i)i&e a!, he!ce, #a$$s shor) o# )he re'(ire*e!). There %o($, i! #ac), +e
!o +ii!g a) a$$ si!ce, o+&io(s$,, )he $o!e "ar)ici"a!) ca!!o) co*"e)e agai!s) hi*se$#.L
C. Accori!g )o "e)i)io!ers, )he $a% *a!a)es )he o##er #or sa$e o# 10Z o# )he /e)ro! shares )o s*a$$ i!&es)ors +e#ore
a sa$e o# )he 90Z +$oc2 o# shares )o ARA.C6 ca! +e *ae.
The, )heoriGe )ha) )he +es) %a, )o e)er*i!e )he rea$ *ar2e) "rice o# /e)ro! shares %as )o #irs) ha&e a "(+$ic o##eri!g
as re'(ire +, R.A. No. 7181. The re&erse "roce(re #o$$o%e +, "ri&a)e res"o!e!)s, accori!g )o "e)i)io!ers, ga&e
(!%arra!)e +e!e#i)s )o "ri&a)e res"o!e!)s +eca(se )he, +o(gh) )he /e)ro! shares a) o!$, /8.70 "er share %he!
)he shares #e)che as high as /18.00 "er share i! )he s)oc2 *ar2e) :G.R. No. 11=999,Rollo, "". 29-27<.
To +o$s)er )heir )heor,, "e)i)io!ers ci)e Sec)io! 2:< o# R.A. No. 7181, %hich "ro&ies:
A *i!i*(* o# )e! :10< "erce!) o# )he sa$e o# asse)s i! cor"ora)io! #or* sha$$ #irs) +e o##ere )o s*a$$
$oca$ i!&es)ors i!c$(i!g Fi$i"i!o 6&erseas 5or2ers a! %here "rac)ica+$e a$so i! )he sa$e o# a!,
"h,sica$ asse).
/e)i)io!ers a$so i!&o2e )he 3*"$e*e!)i!g G(ie$i!es "ro*($ga)e )o i*"$e*e!) R.A. No. 7181, %hich "ro&ies:
3! )he sa$e o# asse)s i! cor"ora)e #or*, a) $eas) 10Z o# )he )o)a$ shares #or "ri&a)iGa)io! sha$$ #irs) +e
o##ere )o s*a$$ $oca$ i!&es)ors. 4*"$o,ees S)oc2 6%!ershi" /$a!s :4S6/S< a! "(+$ic o##eri!gs
sha$$ co(!) )o%ars co*"$ia!ce %i)h )hese "ro&isio!s . . . :Sec. 3<.
5e agree %i)h /4TR6N )ha) )he $a!g(age o# Sec)io! 2:< o# R.A. No. 7181 oes !o) *a!a)e a!, se'(e!ci!g #or )he
is"osi)io! o# shares i! a go&er!*e!)-o%!e cor"ora)io! +ei!g "ri&a)iGe.
3) is )he (!#or)(!a)e (se o# )he %or L#irs)L i! Sec)io! 2:< o# R.A. No. 7181 )ha) )hre% "e)i)io!ers o## )rac2 a! ca(se
)he* )o *isrea )he "ro&isio! as o!e re'(iri!g a *a!a)or, se'(e!ci!g o# )he sa$e. As a %i) o!ce sai, i# a ce!)i"ee
%o($ +e co*"e$$e )o #o$$o% a "rescri+e se'(e!ci!g o# i)s s)e"s, i) co($ !e&er *o&e a! i!ch.
A reaso!a+$e reai!g o# )he "ro&isio! is )ha) i) *ere$, gi&es a righ) o# #irs) re#(sa$ +, )he s*a$$ i!&es)ors visDaDvis)he
10Z +$oc2 o# shares. As #ar as )he 10Z +$oc2 is co!cer!e, )he s*a$$ i!&es)ors sha$$ ha&e a #irs) cha!ce )o s(+scri+e
)here)o %he!e&er i) is o##ere. The o##er *a, +e *ae +e#ore, a#)er or si*($)a!eo(s %i)h )he o##er o# )he shares )o
s)ra)egic "ar)!ers or *aCor i!&es)ors e"e!i!g o! )he "re&ai$i!g co!i)io! o# )he *ar2e). Cer)ai!$,, i! a! i!i)ia$ "(+$ic
o##eri!g, i) is goo C(g*e!) a! +(si!ess se!se )ha) sho($ "re&ai$, ra)her )ha! )he rigi a! i!#$eDi+$e r($es o# s)e"
o!e, s)e" )%o, e)c.
The R($es a! Reg($a)io!s iss(e +, )he C6/ )o i*"$e*e!) R.A. No. 7181 se) asie 10Z o# )he shares s(+Cec) o#
)he "ri&a)iGa)io! )o +e o##ere #irs) )o )he s*a$$ $oca$ i!&es)ors, a! *ae c$ear )ha) as #ar as sai 10Z +$oc2 is
co!cer!e, )he s*a$$ i!&es)ors sha$$ ha&e )he #irs) crac2 )o +(, )he sa*e. These R($es ha&e +ee! co!sis)e!)$,
a""$ie i! "re&io(s "ri&a)iGa)io!s, a! )he, co!s)i)()e a co!)e*"ora!eo(s co!s)r(c)io! a! i!)er"re)a)io! o# a $a% +,
)he i*"$e*e!)i!g, a*i!is)ra)i&e age!c,. S(ch co!s)r(c)io! is accore grea) res"ec) +, )he Co(r) :Nes)$e
/hi$i""i!es, 3!c. &. Co(r) o# A""ea$s, 203 SCRA =09 T1991U<.
5ha) Co!gress c$ear$, *a!a)e i! R.A. No. 7181 %as )ha) a) $eas) 10Z o# )he shares o# a "ri&a)iGe cor"ora)io!
*(s) +e reser&e a! o##ere #or sa$e )o )he ge!era$ "(+$ic. 3! )he e$i+era)io! o# )he Co!gressio!a$ Co**i))ee o!
Go&er!*e!)-6%!e a! Co!)ro$$e Cor"ora)io!s o! Dece*+er 18, 1991, )he Co**i))ee s"o2e o# ha&i!g )he 10Z
se) asie %i)ho() i*"ei!g )he "ri&a)iGa)io! "rocess.
No)e )ha) %he! )he +ii!g o# )he 90Z +$oc2 o# /e)ro! shares ha +ee! a!!o(!ce, )he 10Z +$oc2 #or o##eri!g )o )he
s*a$$ $oca$ i!&es)ors ha +ee! ie!)i#ie, reser&e a! se) asie. This is *ore )ha! a s(+s)a!)ia$ co*"$ia!ce %i)h )he
*a!a)e o# $a%.
There is grea) ris2 i! #irs) *a2i!g a! i!i)ia$ "(+$ic o##eri!g o# )he 10Z +$oc2 +e#ore +ii!g o() )he 90Z +$oc2 )o a
s)ra)egic "ar)!er. 3) *a, ha""e! )ha) )he "rice o# )he shares o##ere i!i)ia$$, )o )he "(+$ic "$(!ges +e$o% )he o##eri!g
"rice a""ro&e +, )he S4C.
The se!si)i&e *ar2e) #orces i!&o$&e i! i!i)ia$ "(+$ic o##eri!gs re!er (!rea$is)ic a!, $egis$a)i&e *a!a)e )o #o$$o% a
se'(e!ci!g i! )he sa$e o# go&er!*e!)-o%!e shares i! )he *ar2e). The $egis$a)ors, "rac)ica$ *e! o# a##airs as )he,
are, %ere a%are o# )he &agaries, &aria+$es a! &icissi)(es o# )he s)oc2 *ar2e) %he! )he, e!ac)e R.A. No. 7181. 3) is
*ore reaso!a+$e )o rea )he sai $a% as $ea&i!g )o )he C6/ a! )he go&er!*e!) cor"ora)io!s co!cer!e )o
e)er*i!e )he se'(e!ci!g o# )he sa$e )o s)ra)egic i!&es)ors a! )he ge!era$ "(+$ic. To re'(ire )he o##er o# 10Z )o )he
ge!era$ "(+$ic +e#ore )he sa$e o# a +$oc2 )o a s)ra)egic "ar)!er *a, e$a, or e&e! i*"ee )he e!)ire "ri&a)iGa)io!
"rogra*.
The c$ear "o$ic, +ehi! /roc$a*a)io! No. =0 is )o gi&e )he C6/ a! A/T *aDi*(* #$eDi+i$i), i! )heir o"era)io! )o
e!s(re )he *os) e##icie!) i*"$e*e!)a)io! o# )he "ri&a)iGa)io! "rogra*.
-!er Sec)io! =:3< o# )he /roc$a*a)io!, #($$ "o%ers are gi&e! )he C6/ )o es)a+$ish L*a!a)or, as %e$$ as i!ica)i&e
g(ie$i!es #or . . . )he is"osi)io!
o# . . . asse)s.L -!er Sec)io! 12:2< )hereo#, )he A/T is gi&e! )he L%ies) $a)i)(e o# #$eDi+i$i), . . . "ar)ic($ar$, i! )he
areas o# . . . is"osi)io! . . . .L
/e)i)io!ers ca! !o) re$, o! 6"i!io! No. 128, Series o# 1992 a)e Se")e*+er 28, 1992. The '(er, "ose )o )he
Secre)ar, o# 7(s)ice i! sai o"i!io! %as )he $ega$i), o# )he "$a! o# Na)io!a$ De&e$o"*e!) Cor"ora)io! )o "ass o! )o )he
"ros"ec)i&e +(,er o# i)s shares i! a $oca$ +a!2 )he res"o!si+i$i), o# co*"$,i!g %i)h )he re'(ire*e!) "rescri+e i!
Sec)io! 2:< o# R.A. No. 7181 )ha) a *i!i*(* o# 10Z o# )he shares o# a cor"ora)io! Lsha$$ #irs) +e o##ere )o s*a$$
$oca$ i!&es)ors . . . .L The Secre)ar, o# 7(s)ice !a)(ra$$, o"i!e )ha) sai "ro"osa$ co($ !o) $ega$$, +e o!e o! )he
"ri!ci"a$ gro(! )ha) )he Lo+ser&a!ce o# )his $ega$ re'(ire*e!) is i!c(*+e!) ("o! )he is"osi)io! e!)i),, %hich i! )his
case is NDC, +() as co!)e*"$a)e, )he sa$e )o s*a$$ i!&es)ors sha$$ +e (!er)a2e! +, )he "ri&a)e +(,er o# )he T$oca$
+a!2KsU shares.L The '(er, "ose )o )he Secre)ar, o# 7(s)ice %as !o) a+o() )he se'(e!ci!g o# )he sa$e o# )he 10Z
+$oc2.
5e ca! !o) see ho% )he #ai$(re )o is"ose )he 10Z +$oc2 )o )he ge!era$ "(+$ic +e#ore )he sa$e o# )he 90Z +$oc2 )o
ARA.C6 ga&e )he $a))er (!%arra!)e +e!e#i)s.
Ac)(a$$, ARA.C6 "ai a )o)a$ o# /19,871,98=,308.00 #or )he ac'(isi)io! o# )he /e)ro! shares. This aggrega)e a*o(!)
re"rese!)s i! "eso )er*s: :1< )he -SY=02 *i$$io! %i!!i!g +i "ai +, ARA.C6 )o /N6C o! .arch 9, 1999P a! :2<
)he ai)io!a$ a*o(!) o# -SY30,327,987.00 re*i))e o! 7($, 11, 1999, re"rese!)i!g )he L"(rchase "rice aC(s)*e!)L
s)i"($a)e i! )he S)oc2 /(rchase Agree*e!). Co!se'(e!)$,, ARA.C6Ks ac'(isi)io! cos) %as /7.338 "er share.
A #air co*"ariso! +e)%ee! )he ARA.C6 "rice a! )he 3/6 "rice sho($ )a2e i!)o co!siera)io! )he $e&e$s o# #i!a!cia$,
$ega$ a! *isce$$a!eo(s cos)s irec)$, re$a)e )o )he ARA.C6 "(rchase, i!c$(i!g )he co!se'(e!) o""or)(!i), cos) or
i!co*e )o /N6C a! )he Na)io!a$ Go&er!*e!), ha )he "rocees +ee! i!&es)e i! /hi$i""i!e Treas(r, ?i$$s #ro*
.arch 9 a! 7($, 11, res"ec)i&e$,, )o Se")e*+er 7, 1999. 6! )his +asis, )he e##ec)i&e "rocees o! )he ARA.C6
"(rchase a*o(!) )o /7.8==9 "er share, a! !o) /8.70 as c$ai*e +, "e)i)io!ers :G.R. No. 11=999, Rollo, "". =08-
=07<. 6! )he o)her ha!, )he se$$erKs eD"e!ses i!c(rre i! co!!ec)io! %i)h )he 3/6, i!c$(i!g )aDes a! o)her #ees
"ai )o )he Na)io!a$ Go&er!*e!), reache a )o)a$ o# /833.081 *i$$io! or /0.833 "er share :G.R. No. 11=999, Rollo, ".
=07<.
To *a2e #(r)her a #air co*"ariso! +e)%ee! )he )%o "rices, )he "rocees #ro* )he 3/6 sho($ +e !e) o# /N6CKs share
i! /4TR6NKs !e) i!co*e #ro* .arch )o A(g(s) 1999, +eca(se i! e##ec) i) %as gi&i!g (" )his a*o(!) i! #a&or o# )he
3/6 i!&es)ors. As "roCec)e, )he )o)a$ !e) i!co*e o# /4TR6N #ro* .arch )o A(g(s) 1999 is /1,870,=00.00. T%e!),
"erce!) o# )his is /379,100.00 %hich )ra!s$a)es )o a "er share re(c)io! o# /0.3791 #ro* )he 3/6 "rocees. This
%o($ #(r)her eroe )he e##ec)i&e "rocees #ro* )he 3/6 sa$e )o /7.7929 "er share.
Fi!a$$,, cash i&ie!s o# /2 +i$$io! a! "ro"er), i&ie!s o# /1=3 *i$$io!, or a )o)a$ o# /2.1=3 +i$$io! %as ec$are
a! )ra!s#erre )o /N6C +e#ore )he ARA.C6 "(rchase %as e##ec)e. 3*"()i!g s(ch i&ie!s %o($ )ra!s$a)e )he
e##ec)i&e "rocees )o /N6C #ro* )he ARA.C6 sa$e )o /8.288= "er share :/7.8==9 "$(s /0.9308 Tor 90Z o# /2.1=3
?i$$io!U<. -si!g )his #ig(re, )he 3/6 "rocees o# /7.7929 "er share is e#i!i)e$, $o%er )ha! )he ARA.C6 "rocees o#
/8.288=.
-!$i2e )he ori!ar, +(,ers o# shares $is)e i! )he s)oc2 eDcha!ge, ARA.C6, as a s)ra)egic i!&es)or, ha )o s"e! #or
)he (e i$ige!ce re&ie% o# )he +(si!ess a! recors o# /4TR6N.
Asie #ro* )his *o!e)ar, co!siera)io!s, /N6C eri&e )he #o$$o%i!g &a$(e-ae +e!e#i)s:
1< /N6C is ass(re o# a! ae'(a)e s(""$, o# cr(e oi$. The e$e*e!) o# (!cer)ai!), o! so(rces o# cr(e oi$ s(""$, is
re(ce, i# !o) e$i*i!a)e, ARA.C6 +ei!g )he %or$Ks $arges) 2!o%! "ro(cer a! eD"or)er o# #i&e i##ere!) ),"es o#
cr(e oi$.
2< /N6CKs re#i!er, ca! achie&e o")i*(* e##icie!c, +eca(se o# +e))er cr(e s$a)es.
3< ARA.C6 has )o ho$ o! )o )he /e)ro! shares #or )he !eD) #i&e ,ears. Asie #ro* i)s s)a+i$iGi!g e##ec) o! )he *ar2e)
"rice o# /e)ro! shares, )his ho$i!g "erio %i$$ "re&e!) ARA.C6 #ro* eri&i!g a!, s"ec($a)i&e gai!s. -!$i2e
ARA.C6, )he +(,ers o# )he 3/6 ca! se$$ )heir shares a!, )i*e %i)ho() co!s)rai!)s.
9< ARA.C6Ks "rese!ce i! /4TR6N has a )re*e!o(s, (!'(a!)i#ia+$e i!#$(e!ce i! i!&es)orKs co!#ie!ce i! /4TR6N
as a "(+$ic$,-$is)e co*"a!,. This co!#ie!ce co($ !o) +e ge!era)e i# /4TR6NKs "ar)!er has a +a )rac2 recor.
=< ARA.C6 %i$$ assis) /N6C i! raisi!g #(!s )o #i!a!ce )he *ore )ha! /12 +i$$io! i! "roCec)e ca"i)a$ eD"e!i)(res
re'(ire o&er )he !eD) #o(r ,ears )o *a2e /4TR6N co*"e)i)i&e.
The "rici!g o# shares o# s)oc2 is a high$, s"ecia$iGe #ie$ )ha) is +e))er $e#) )o )he eD"er)s. 3) i!&o$&es a! i!'(ir, i!)o
)he ear!i!g "o)e!)ia$, i&ie! his)or,, +(si!ess ris2s, ca"i)a$ s)r(c)(re, *a!age*e!), asse) &a$(es o# )he co*"a!,P
)he "re&ai$i!g +(si!ess c$i*a)eP )he "o$i)ica$ a! eco!o*ic co!i)io!sP a! a *,ria o# o)her #ac)ors )ha) +ear o! )he
&a$(a)io! o# shares :>a! 0or!e, Fi!a!cia$ .a!age*e!) a! /o$ic, 8=2-8=3 T8)h e.U<P Le##$er a! Far%e$$, The S)oc2
.ar2e) =73-=7= T3r e.U<.
D. Fi!a$$,, "e)i)io!ers co!)e! )ha) /4TR6N is a "(+$ic ()i$i),, i! %hich #oreig! o%!ershi" o# i)s e'(i), sha$$ !o) eDcee
90Z )hereo# a! )he #oreig! "ar)ici"a)io! i! )he go&er!i!g +o, sha$$ +e $i*i)e )o )heir "ro"or)io!a)e share i! i)s
ca"i)a$. Accori!g )o "e)i)io!ers, ARA.C6 is e!)i)$e o!$, )o a *aDi*(* o# #o(r sea)s i! )he )e!-*a! +oar +() %as
gi&e! #i&e sea)s :G.R. No. 112389, Rollo, "". 30-89P G.R. No. 11=999, Rollo, "". 30-31, 202-212<.
This iss(e hi!ges o! %he)her )he +(si!ess o# oi$ re#i!i!g is a L"(+$ic ()i$i),L %i)hi! )he "(r&ie% o# Sec)io! 11, Ar)ic$e I33
o# )he 1987 Co!s)i)()io! :ao")e #ro* Sec. =, Ar). I3> o# )he 1973 Co!s)i)()io!<, %hich "ro&ies:
No #ra!chise, cer)i#ica)e, or a!, o)her #or* o# a()horiGa)io! #or )he o"era)io! o# a "(+$ic utilit% sha$$
+e gra!)e eDce") )o citi.ens of t$e 1$ilippines or to corporations or associations organi.ed under
t$e laws of t$e 1$ilippines at least sixt% per centum of w$ose capital is owned "% suc$ citi.ens, !or
sha$$ s(ch #ra!chise, cer)i#ica)e or a()horiGa)io! +e eDc$(si&e i! charac)er #or a $o!ger "erio )ha!
#i#), ,ears. Nei)her sha$$ a!, s(ch #ra!chise or righ) +e gra!)e eDce") (!er )he co!i)io! )ha) i)
sha$$ +e s(+Cec) )o a*e!*e!), a$)era)io!, or re"ea$ +, )he Co!gress %he! )he co**o! goo so
re'(ires. The S)a)e sha$$ e!co(rage e'(i), "ar)ici"a)io! i! "(+$ic ()i$i)ies +, )he ge!era$ "(+$ic. T$e
participation of foreign investors in t$e governing "od% of an% pu"lic utilit% enterprise s$all "e
limited to t$eir proportionate s$are in its capital and all t$e executive and managing officers of suc$
corporation or association must "e citi.ens of t$e 1$ilippines :4*"hasis s(""$ie<.
3*"$e*e!)i!g Sec)io! 8 o# Ar)ic$e I3> o# )he 193= Co!s)i)()io!, )he "roge!i)or o# Sec)io! = o# Ar)ic$e I3> o# )he 1973
Co!s)i)()io!, is Sec)io! 13:+< o# )he /(+$ic Ser&ice Ac), %hich "ro&ies:
The )er* L"(+$ic ser&iceL i!c$(es e&er, "erso! )ha) !o% or herea#)er *a, o%!, o"era)e, *a!age,
or co!)ro$ i! )he /hi$i""i!es, #or hire or co*"e!sa)io!, %i)h ge!era$ or $i*i)e c$ie!)e$e, %he)her
"er*a!e!), occasio!a$, or accie!)a$ a! o!e #or ge!era$ +(si!ess "(r"oses, a!, co**o!
carrier, rai$roa, s)ree) rai$%a,, . . . a! o)her si*i$ar "(+$ic ser&ices: . . . .
.ore "er)i!e!) is Sec)io! 7 o# R.A. No. 387, )he /e)ro$e(* Ac) o# 1999, %hich "ro&ies:
/e)ro$e(* o"era)io! a "(+$ic ()i$i),. Q 4&er,)hi!g re$a)i!g )o )he eD"$ora)io! #or a! eD"$oi)a)io! o#
"e)ro$e(* %hich *a, co!sis) !a)(ra$$, or +e$o% )he s(r#ace o# )he ear)h, a! e&er,)hi!g re$a)i!g )o
)he *a!(#ac)(re, refining, s)orage, or )ra!s"or)a)io! +, s"ecia$ *e)hos o# "e)ro$e(*, as "ro&ie
#or i! )his Ac), is here+, ec$are )o +e o# "(+$ic ()i$i), :Rollo, ". =19P 4*"hasis s(""$ie<.
A L"(+$ic ()i$i),L (!er )he Co!s)i)()io! a! )he /(+$ic Ser&ice La% is o!e orga!iGe L#or hire or co*"e!sa)io!L )o
ser&e )he "(+$ic, %hich is gi&e! )he righ) )o e*a! i)s ser&ice. /4TR6N is !o) e!gage i! oi$ re#i!i!g #or hire a!
co*"e!sa)io! )o "rocess )he oi$ o# o)her "ar)ies.
Li2e%ise, )he ac)i&i)ies co!siere as L"(+$ic ()i$i),L (!er Sec)io! 7 o# R.A. No. 387 re#er o!$, )o "e)ro$e(* %hich is
i!ige!o(s )o )he /hi$i""i!es. 0e!ce, )he re#i!i!g o# "e)ro$e(* "ro(c)s so(rce #ro* a+roa as is o!e +, /e)ro!, is
!o) %i)hi! )he co!)e*"$a)io! o# )he $a%.
5e agree %i)h )he o"i!io! o# )he Secre)ar, o# 7(s)ice )ha) )he re#i!i!g o# i*"or)e cr(e oi$ is !o) reg($a)e +,, !or is
i) %i)hi! )he sco"e a! "(r&ie% o# )he /e)ro$e(* Ac) o# 1999. 0e sai:
4Da*i!a)io! o# o(r s)a)()e +oo2s #ai$s )o re&ea$ a!, $a% or $ega$ "ro&isio! %hich, i! eD"$ici) )er*s,
ei)her "er*i)s or "rohi+i)s )he es)a+$ish*e!) a! o"era)io! o# oi$ re#i!eries )ha) %o($ re#i!e o!$,
i*"or)e cr(e oi$ :6"i!io!, No. 287, S. 19==<.
504R4F6R4, )he "e)i)io!s are D3S.3SS4D.
+! A1)ano Re>es
A1)ano vs Re>es 1,7 SCRA +<=
Fact: On 20 April 1987, the Phil. Ports Authority (PPA) adopted a resolution directing
mgmt. to prepare the n!itation to "id and all rele!ant #idding documents necessary $or
the pu#lic #idding o$ the de!elopment, mgmt., and operation o$ the %anila ntl. &ontainer
'erminal (%&') and authori(ed the "oard &hairman )ecretary *eyes to o!ersee and
implement the pro+ect.
)ecretary *eyes created a 7,man %&' "idding &ommittee to e!aluate all #ids and
recommend to the "oard the #est #id. 'he PPA pu#lished the n!itation to "id -ith the
reser!ation that it had the right to re+ect any #id and to accept such #id it may deem
ad!antageous to the go!t.
)e!en companies su#mitted #ids. 'he &ommittee recommended that the contract
#e a-arded to ntl. &ontainer 'erminal )er!ices (&')) on the ground that it o$$ered the
#est technical and $inancial proposal. )ecretary *eyes a-arded the contract to
&'). "e$ore the contract could #e signed, t-o cases -ere $iled .uestioning the legality or
regularity o$ the #idding. 'he $irst -as a special action $or prohi#ition -ith prelim
in+unction $iled #y Alo, a concerned ta/payer. 'he second -as a ci!il case $or prohi#ition
-ith prayer $or '*O $iled #y )harp &o. -hich acti!ely participated in the #idding.
'he President appro!ed the proposed %&' contract. 'he PPA and &'0)
per$ected the contract. *odol$o Al#ano, a mem#er o$ the 1ouse o$ *epresentati!es $iled the
present case assailing the a-ard o$ the contract on the ground that since the %&' is a
pu#lic utility, it needs a legislati!e $ranchise #e$ore it can legally operate as a pu#lic utility.
ssue 2 3ether or not a legislati!e $ranchise is necessary.
1eld 2 4O. Petition dismissed.
A $ranchise specially granted #y &ongress is not necessary $or the operation o$ the
%&' #y a pri!ate entity. A contract entered into #y the PPA and such entity is su#stantial
compliance -ith the la-. 1. 5/ecuti!e Order 4o. 60 authori(ed the PPA to ta7e o!er,
manage and operate the %&' in accordance -ith P8 897 (*e!ised &harter o$ the PPA). P8
897 e/pressly empo-ers the PPA to pro!ide ser!ices -ithin Port 8istricts :-hether on its
o-n, #y contract or other-ise.: 'here$ore, under 5O 60 and P8 897, the PPA may contract
-ith &') $or the mgmt., operation and de!t. o$ the %&'.
2. 5!en i$ the %&' #e considered a pu#lic utility or a pu#lic ser!ice on the theory that it is
a -har$ or a doc7 as contemplated #y the Pu#lic )er!ice Act, its operation -ould not
necessarily call $or a legislati!e $ranchise. ;egislati!e $ranchises are not re.uired #e$ore
each and e!ery pu#lic utility may operate. 'he la- has granted certain administrati!e
agencies the po-er to grant licenses $or or to authori(e the operation o$ certain pu#lic
utilities.
'hat the &onsti pro!ides that the issuance o$ a $ranchise $or the operation o$ a pu#lic
utility shall #e su#+ect to amendment, alteration or repeal #y &ongress does not necessarily
imply that only &ongress has the po-er to grant such authori(ation. 'here are se!eral la-s
granting speci$ied agencies in the 5/ecuti!e 8ept. the po-er to issue such authori(ation $or
certain classes o$ pu#lic utilities. < 1. ;'0*" -rt &erti$icates o$ Pu#lic &on!enience
authori(ing the operation o$ pu#lic land transportation ser!ices pro!ided #y motori(ed
!ehicles= 2. 5*" -rt operation o$ electric po-er utilities and ser!ices e/cept electric coops>
*eading 5O 60 and P8 897 together, the PPA has #een empo-ered to underta7e #y
itsel$ or to authori(e the operation and mgmt. o$ the %&' #y another #y contract. 'he
latter po-er ha!ing #een delegated to the PPA, a legislati!e $ranchise is no longer
necessary. n this case, the PPA?s contracting -ith &') is -holly -ithin its +urisdiction
and po-ers.
6. 'he a-ard o$ the contract to &') is all the authori(ation that is necessary. 'he a-ard
made #y the PPA and the President en+oys the presumption o$ !alidity and regularity o$
o$$icial action. 'here is no e!idence to the contrary.
@. Al#ano has standing to assail the contract. 3hile the e/penditure o$ pu#lic $unds may
not #e in!ol!ed under the contract, pu#lic interest is de$initely in!ol!ed considering the
important role o$ the %&P in the economic de!t. o$ the country and the magnitude o$ the
amount in!ol!ed. 1e has su$$icient standing since a pu#lic right (disclosure pro!ision) is
sought to #e en$orced.
9. 'here in no con$lict among the 6 #ranches o$ go!t. 'he 5/ecuti!e 8ept. has not
contra!ened an act o$ &ongress. 'here is no usurpation o$ po-ers o$ another #ranch.
A. 'he determination o$ the -inning #id should #e le$t to the sound +udgment o$ the PPA. t
is in the #est position to e!aluate the #ids. t has the technical e/pertise -hich neither the
&ourt nor &ongress has. 4o a#use o$ discretion has #een sho-n.
Public Utility and Service in view of the Transpotation Law in
The Philippines
2a" C;at is a 80)1ic 0ti1it>M
A pub!i% uti!ity is a )0siness o* se*vice engaged in *eg01a*1> s0881>ing t;e 80)1ic
Dit; so(e co((odit> o* se*vice o: 80)1ic conseG0ence s0c; as e1ect*icit>- gas- Date*-
t*ans8o*tation- te1e8;one o* te1eg*a8; se*vice! A8a*t :*o( stat0tes D;ic; de:ine t;e
80)1ic 0ti1ities t;at a*e Dit;in t;e 80*vieD o: s0c; stat0tes- it Do01d )e di::ic01t to
const*0ct a de:inition o: a 80)1ic 0ti1it> D;ic; Do01d :it eve*> conceiva)1e case! As its
na(e indicates- ;oDeve*- t;e te*( 80)1ic 0ti1it> i(81ies a 80)1ic 0se and se*vice to t;e
80)1ic! 2A(! 50*! +d ! <=- 8!7='!" 2A1)ano vs Re>es"
2)" C;at is a 80)1ic se*viceM
T;e 40)1ic Se*vice Act 2CA No! 1=< as a(ended" 8*ovides t;at t;e te*( 80)1ic
se*vice Ninc10des eve*> 8e*son t;at noD o* ;e*ea:te* (a> oDn- o8e*ate- (anage- o*
cont*o1 in t;e 4;i1i88ines- :o* ;i*e o* co(8ensation- Dit; gene*a1 o* 1i(ited c1iente1e-
D;et;e* 8e*(anent- occasiona1 o* accidenta1- and done :o* gene*a1 )0siness 80*8oses-
an> co((on ca**ie*- *ai1*oad- st*eet *ai1Da>- t*action *ai1Da>- s0)#Da> (oto* ve;ic1e-
eit;e* :o* :*eig;t o* 8assenge*- o* )ot; Dit; o* Dit;o0t :iEed *o0te and D;ateve* (a> )e
its c1assi:ication- :*eig;t o* ca**ie* se*vice o* an> c1ass- eE8*ess se*vice- stea()oat- o*
stea(s;i8 1ine- 8ontines- :e**ies- and Date* c*a:t- engaged in t;e t*ans8o*tation o:
8assenge*s and :*eig;t o* )ot;- s;i8>a*d- (a*ine *e8ai*s;o8- ADa*e;o0seB- D;a*: o*
dock- ice 81ant- ice *e:*ige*ation 81ant- cana1- i**igation s>ste(- gas- e1ect*ic 1ig;t- ;eat
and 8oDe*- Date* s0881> and 8oDe*- 8et*o1e0(- seDe*age s>ste(- Di*e o* Di*e1ess
co((0nications s>ste(- Di*e o* Di*e1ess )*oadcasting stations and ot;e* si(i1a* 80)1ic
se*vices!!!N ASec! 1$2)"B 2A1)ano vs Re>es"
$!Tatad v Ga*cia
F&a'c%sc( Tata#) J(*' Os+!,a a'# R(#("-( B%a.(' v. J!ss Ga&c%a) J&. /DOTC S!c.0)
EDSA LRT C(&1. Lt#.
G.R. No. 114%%% 5pril 6, 1BB5
Quiason, J.
FACTS:
 D8T planned to construct a li,ht rail"a/ transit line alon, 6D!5, a )a+or thorou,h.are in
Fetropolitan Fanila, "hich shall tra0erse the cities o. Pasa/, MueDon, Fandalu/on, and
Fa<ati
 R5 No. 6B5A entitled J5n 5ct 5uthoriDin, the Cinancin,, onstruction, 8peration and
Faintenance o. $n.rastructure Pro+ects b/ the Pri0ate !ector, and Cor 8ther PurposesK or
#8T 3a" pro0ided .or t"o sche)es .or the 2nancin,, construction and operation o.
,o0ern)ent pro+ects throu,h pri0ate initiati0e and in0est)entG #uild'8perate'Trans.er
(#8T) or #uild'Trans.er (#T)
 Pre(uali2cation #ids and 5"ards o))ittee (P#5) and the Technical o))ittee "ere
created b/ the D8T in relation to 6D!5 3i,ht Rail Transit $$$ pro+ect
 onl/ the 6D!5 3RT onsortiu) (later called 6D!5 3RT orporation, 3td.) )et the
re(uire)ents o. P#5
 D8T re(uested presidential appro0al o. the contract but then 67e. !ec. Drilon con0e/ed
that the Pres. could not si,n the sa)e. !o D8T and pri0ate respondents re'ne,otiated the
a,ree)ent.
 The a,ree)ent pro0ided inter alia that upon .ull or partial co)pletion and 0iabilit/ thereo.,
pri0ate respondent shall deli0er the use and possession o. the co)pleted portion to D8T
"hich shall operate the sa)e.
 R5 No. AA1; L a)ended R5 No. 6B5A> it e7pressl/ pro0ides .or #3T sche)e and allo"s
direct ne,otiation o. #3T contracts
ISSUE: -8N 6D!5 3RT orp., 3td., a .orei,n corporation can o"n 6D!5 3RT $$$, a public
utilit/
HELD: Nes.
 -hat pri0ate respondent o"ns are the rail trac<s, rollin, stoc<s li<e the coaches, rail
stations, ter)inals and the po"er plant, not a public utilit/. -hile a .ranchise is needed to
operate these .acilities to ser0e the public, the/ do not b/ the)sel0es constitute a public
utilit/. -hat constitutes a public utilit/ is not their o"nership but their use to ser0e the
public.
 !ec. 11, 5rt. H$$ o. the onst.G JNo .ranchise, certi2cate or an/ other .or) o. authoriDation
.or the operation o. a public utilit/ shall be ,ranted e7cept to citiDens o. the Philippines or
to corporations or associations or,aniDed under the la"s o. the Philippines at least si7t/
per centu) o. "hose capital is o"ned b/ such citiDens, nor shall such .ranchise, certi2cate
or authoriDation be e7clusi0e character or .or a lon,er period than 2.t/ /ears.K
 there is a distinction bet"een the JoperationK o. a public utilit/ and the o"nership o. the
.acilities and e(uip)ent used to ser0e the public
 (2'!&s*%1 ' a relation in la" b/ 0irtue o. "hich a thin, pertainin, to one person is
co)pletel/ sub+ected to his "ill in e0er/thin, not prohibited b/ la" or the concurrence "ith
the ri,hts o. another
 operation o. a rail s/ste) as a public utilit/ L includes the transportation o. passen,ers
.ro) one point to another point, their loadin, and unloadin, at desi,nated places and the
)o0e)ent o. the trains at pre'scheduled ti)es
 ri,ht to operate a public utilit/ )a/ e7ist independentl/ and separatel/ .ro) the o"nership
o. the .acilities thereo.. 8ne can o"n said .acilities "ithout operatin, the) as a public
utilit/, or con0ersel/, one )a/ operate a public utilit/ "ithout o"nin, the .acilities used to
ser0e the public
 6D!5 3RT orp. 3td. L )erel/ the o"ner o. the .acilities necessar/ to operate the 6D!5 3RT
$$$
 on co)pletion date o. the 3RT pro+ect, 6D!5 3RT orp. 3td. "ill i))ediatel/ deli0er
possession o. the 3RT s/ste) b/ "a/ o. lease .or %5 /ears, durin, "hich period D8T shall
operate the sa)e as a co))on carrier and pri0ate respondent shall pro0ide technical
)aintenance and repair ser0ices to D8T> technical )aintenance consists o. pro0idin, 1)
repair and )aintenance .acilities .or the depot and rail lines, ser0ices .or routine clearin,
and securit/> and %) producin, and distributin, )aintenance )anuals and dra"in,s .or the
entire s/ste)
 6D!5 3RT orp. 3td. shall also train D8T personnel .or .a)iliariDation "ith the operation,
use, )aintenance and repair o. the rollin, stoc<, po"er plant, substations, electrical,
si,nalin,, co))unications and all other e(uip)ent as supplied in the a,ree)ent.
 !ince D8T shall operate the 6D!5 3RT $$$, it shall assu)e all the obli,ations and liabilities
o. a co))on carrier.
 BOT sc*!+! ' contractor underta<es the construction and 2nancin, in in.rastructure
.acilit/, and operates and )aintains the sa)e> contractor operates the .acilit/ .or a 27ed
period durin, "hich it )a/ reco0er its e7penses and in0est)ent in the pro+ect plus a
reasonable rate o. return thereon> a.ter the e7piration o. the a,reed ter), the contractor
trans.ers the o"nership and operation o. the pro+ect to the ,o0ern)ent
 BT sc*!+! ' contractor underta<es the construction and 2nancin, o. the .acilit/, but a.ter
co)pletion, the o"nership and operation thereo. are turned o0er to the ,o0ern)ent. The
,o0ern)ent, in turn, shall pa/ the contractor its total in0est)ent on the pro+ect in addition
to a reasonable rate o. return. $. pa/)ent is to be e:ected throu,h a)ortiDation pa/)ents
b/ the ,o0ern)ent in.rastructure a,enc/ or local ,o0ern)ent unit concerned, this shall be
)ade in accordance "ith a sche)e proposed in the bid and incorporated in the contract
 BLT sc*!+! "hich is challen,ed b/ petitioners is but a 0ariation o. the #T sche)e
 "!as! L contract "here one o. the parties binds hi)sel. to ,i0e to another the en+o/)ent
or use o. a thin, .or a certain price and .or a period "hich )a/ be de2nite or inde2nite but
not lon,er than BB /ears> no trans.er o. o"nership at the end o. the lease period
 "!as!31&c*as! a4&!!+!'t ' parties stipulate that title to the leased pre)ises shall be
trans.erred to the lessee at the end o. the lease period upon the pa/)ent o. an a,reed
su)
 the clai) that the #3T sche)e and direct ne,otiation o. contracts are not conte)plated b/
the #8T 3a" has no" been rendered )oot and acade)ic b/ R5 No. AA1;
 !ection 3 thereo. authoriDes all ,o0ern)ent in.rastructure a,encies, ,o0ern)ent'o"ned
and controlled corporations and local ,o0ern)ent units to enter into contract "ith an/ dul/
pre(uali2ed proponent .or the 2nancin,, construction, operation and )aintenance o. an/
2nanciall/ 0iable in.rastructure or de0elop)ent .acilit/ throu,h a #8T, #T, #3T, #88 (#uild'
o"n'and'operate), 58 (ontract'add'operate), D8T (De0elop'operate'and'trans.er), R8T
(Rehabilitate'operate'and'trans.er), and R88 (Rehabilitate'o"n'operate)
=!Te1eco( v co(e1ec
7! 5G S0((it Ho1dings
<!associated Co((0nications v!NTC
ASSOCIATED COMMUNICATIONS 5 6IRELESS SERVICES 7 UNITED
BROADCASTING NET6OR8S) 1!t%t%('!&) vs.
NATIONAL TELECOMMUNICATIONS COMMISSION) &!s1('#!'t.
(The (uestion that has ta<en a lon, li.e is "hether the operation o. a radio or tele0ision
station re(uires a con,ressional .ranchise.)
Facts:
8n No0e)ber 11, 1B31, 5ct No. 3;46, entitled O5n 5ct Pro0idin, .or the Re,ulation o.
Radio !tations and Radio o))unications in the Philippines and .or 8ther Purposes,O
"as enacted. !ec. 1 o. the la" reads, 0iDG
O!ec. 1. No person, 2r), co)pan/, association, or corporation shall construct, install,
establish, or operate a radio trans)ittin, station, or a radio recei0in, station used .or
co))ercial purposes, or a radio broadcastin, station, "ithout ha0in, 2rst obtained a
.ranchise there.or .ro) the on,ress o. the Philippines...O
Pursuant to the abo0e pro0ision, on,ress enacted in 1B65 R.5. No. 4551, entitled O5n
5ct Grantin, Farcos P. Qilla0erde, Pr. and -in.red 6. Qilla0erde a Cranchise to onstruct,
$nstall, Faintain and 8perate Public Radiotelephone and Radiotele,raph oastal
!tations, and Public Ci7ed and Public #ased and 3and Fobile !tations "ithin the
PhilippinesR $t ,a0e the ,rantees a 5&'/ear .ranchise. $n 1B6B, the .ranchise "as
trans.erred to petitioner 5ssociated o))unications S -ireless !er0ices L 4nited
#roadcastin, Net"or<, $nc. (5-! .or bre0it/) throu,h on,ress? oncurrent Resolution
No. 5;. Petitioner 5-! then en,a,ed in the installation and operation o. se0eral radio
stations around the countr/.
$n 1BA4, P.D. No. 5A6'5, ORe,ulatin, the 8"nership and 8peration o. Radio and
Tele0ision !tations and .or other PurposesO "as issued, "ith the .ollo"in, pertinent
pro0isions on .ranchise o. radio and tele0ision broadcastin, s/ste)sG
!ec. 1. No radio station or tele0ision channel )a/ obtain a .ranchise unless it has
su9cient capital on the basis o. e(uit/ .or its operation .or at least one /ear, includin,
purchase o. e(uip)ent.
!ec. 6. 5ll .ranchises, ,rants, licenses, per)its, certi2cates or other .or)s o. authorit/ to
operate radio or tele0ision broadcastin, s/ste)s shall ter)inate on Dece)ber 31, 1B;1.
Therea.ter, irrespecti0e o. an/ .ranchise, ,rant, license, per)it, certi2cate or other
.or)s o. authorit/ to operate ,ranted b/ an/ o9ce, a,enc/ or person, no radio or
tele0ision station shall be authoriDed to operate "ithout the authorit/ o. the #oard o.
o))unications and the !ecretar/ o. Public -or<s and o))unications or their
successors "ho ha0e the ri,ht and authorit/ to assi,n to (uali2ed parties .re(uencies,
channels or other )eans o. identi./in, broadcastin, s/ste).
5 .e" /ears later or in 1BAB, 6.8. No. 5464 "as issued. $t inte,rated the #oard o.
o))unications and the Teleco))unications ontrol #ureau under the $nte,rated
Reor,aniDation Plan o. 1BA% into the NT.
5)on, the po"ers 0ested in the NT under !ec. 15 o. 6.8. No. 546 are the .ollo"in,G
a. $ssue erti2cate o. Public on0enience .or the operation o. co))unication utilities
and ser0icesR
c. Grant per)its .or the use o. radio .re(uencies .or "ireless telephone and tele,raph
s/ste)s and radio co))unication s/ste)sR
4pon ter)ination o. petitioner?s .ranchise on Dece)ber 31, 1B;1 pursuant to P.D. No.
5A6'5, it continued operatin, its radio stations under per)its ,ranted b/ the NT.
Iss!:
1as 6.8. No 546 )odi2ed the .ranchisin, and licensin, arran,e)ent .or radio and
tele0ision broadcastin, s/ste)s under 5ct No. 3;46 and P.D. No. 5A6'5> conse(uentl/,
the re(uire)ent o. obtainin, a con,ressional@le,islati0e .ranchise can alread/ be
dispensed "ith=
R"%'4:
6.8. No. 546 inte,rated the #oard o. o))unications and the Teleco))unications
#ureau into a sin,le entit/ <no"n as the NT, and 0ested the ne" bod/ "ith broad
po"ers, a)on, the), the po"er to issue erti2cates o. Public on0enience .or the
operation o. co))unications utilities, includin, radio and tele0isions broadcastin,
s/ste)s and the po"er to ,rant per)its .or the use o. radio .re(uencies. 5dditionall/,
NT "as 0ested "ith broad rule )a<in, authorit/ Tto encoura,e a lar,er and )ore
e:ecti0e use o. co))unications, radio and tele0ision broadcastin, .acilities, and to
)aintain e:ecti0e co)petition a)on, pri0ate entities in these acti0ities "hene0er the
o))ission 2nds it reasonabl/ .easible.
$n the recent case o. 5lbano 0s. Re/es (1A5 !R5 %64), the !upre)e ourt held that
T.ranchises issued b/ on,ress are not re(uired be.ore each and e0er/ public utilit/ )a/
operate.? 5d)inistrati0e a,encies )a/ be e)po"ered b/ la" Tto ,rant licenses .or or to
authoriDe the operation o. certain public utilities.? The !upre)e ourt stated that the
pro0ision in the onstitution (5rt. H$$, !ec. 11) Tthat the issuance o. a .ranchise,
certi2cate or other .or) o. authoriDation .or the operation o. a public utilit/ shall be
sub+ect to a)end)ent, alteration or repeal b/ on,ress, does not necessaril/ i)pl/ . . .
that onl/ on,ress has the po"er to ,rant such authoriDation. 8ur statute boo<s are
replete "ith la"s ,rantin, speci2ed a,encies in the 67ecuti0e #ranch the po"er to issue
such authoriDation .or certain classes o. public utilities.?
-e belie0e that 6.8. No. 546 is one la" "hich authoriDes an ad)inistrati0e a,enc/, the
NT, to issue authoriDations .or the operation o. radio and tele0ision broadcastin,
s/ste)s "ithout need o. a prior .ranchise issued b/ on,ress.
1o"e0er, on Fa/ 3, 1BB4, the NT, the o))ittee on 3e,islati0e Cranchises o.
on,ress, and the Uapisanan n, ),a #rod<aster sa Pilipinas o. "hich petitioner is a
)e)ber o. ,ood standin,, entered into a Fe)orandu) o. 4nderstandin, (F84) that
re(uires a con,ressional .ranchise to operate radio and tele0ision stations. The F84
states in partG
TThe NT shall continue to issue and ,rant per)its or authoriDations to operate radio
and tele0ision broadcast stations "ithin their )andate under !ection 15 o. 67ecuti0e
8rder No. 546, pro0ided that such te)porar/ per)its or authoriDation to operate shall
be 0alid .or t"o (%) /ears "ithin "hich the per)ittee shall be re(uired to 2le an
application .or le,islati0e .ranchise "ith on,ress not later than Dece)ber 31, 1BB4>
pro0ided 2nall/, that i. the per)ittee o. the te)porar/ per)it or authoriDation to
operate .ails to secure the le,islati0e .ranchise "ith on,ress "ithin this period, the NT
shall not e7tend or rene" its per)it or authoriDation to operate an/ .urther.?
Petitioner stresses that 5ct. No. 3;46 co0ers onl/ the operation o. radio and not
tele0ision stations. the ourt o. 5ppeals held that a con,ressional .ranchise is re(uired
.or the operation o. radio and tele0ision broadcastin, stations as this re(uire)ent under
5ct No. 3;46 "as not e7pressl/ repealed b/ P.D. No. 5A6'5 nor 6.8. No. 546.
The appellate court correctl/ ruled that a con,ressional .ranchise is necessar/ .or
petitioner to operate tele0ision hannel. 60en assu)in, that 5ct No. 3;46 applies onl/
to radio stations and not to tele0ision stations as petitioner ada)antl/ insists, the
subse(uent P.D. No. 5A6'5 clearl/ sho"s in !ection 1 that a .ranchise is re(uired to
operate radio as "ell as tele0ision stations.
There is nothin, in P.D. No. 5A6'5 "hich re0eals an/ intention to do a"a/ "ith the
re(uire)ent o. a .ranchise .or the operation o. radio and tele0ision stations. !ection 6 o.
P.D. No. 5A6'5 )erel/ identi2es the re,ulator/ a,encies .ro) "ho) authoriDations, in
addition to the re(uired con,ressional .ranchise, )ust be secured a.ter Dece)ber 31,
1B;1.
Thus, "hile it is correct to sa/ that speci2ed a,encies in the 67ecuti0e #ranch ha0e the
po"er to issue authoriDation .or certain classes o. public utilities, this does not )ean
that the authoriDation or P issued b/ the NT dispenses "ith the re(uire)ent o. a
.ranchise as this is clearl/ re(uired under P.D. No. 5A6'5.
The petitioner ho"e0er insists that the onstitution pro0ides in 5rt. H$$, !ec. 11 that the
issuance o. a .ranchise, certi2cate or other .or) o. authoriDation .or the operation o. a
public utilit/ shall be sub+ect to a)end)ent, alteration or repeal b/ on,ress does not
necessaril/ i)pl/, as petitioner posits, that onl/ on,ress has the po"er to ,rant such
authoriDation. 8ur statute boo<s are replete "ith la"s ,rantin, speci2ed a,encies in the
67ecuti0e #ranch the po"er to issue such authoriDation .or certain classes o. public
utilities.
-here there is a la" such as P.D. No. 5A6'5 "hich re(uires a .ranchise .or the operation
o. radio and tele0ision stations, that la" )ust be .ollo"ed until subse(uentl/ repealed.
There is nothin, in the subse(uent 6.8. No. 546 "hich e0inces an intent to dispense
"ith the .ranchise re(uire)ent. Thus, "hile it is correct to sa/ that speci2ed a,encies in
the 67ecuti0e #ranch ha0e the po"er to issue authoriDation .or certain classes o. public
utilities, this does not )ean that the authoriDation or P issued b/ the NT dispenses
"ith the re(uire)ent o. a .ranchise as this is clearl/ re(uired under P.D. No. 5A6'5.
5nd "hether or not the bene2ts o. the Fe)orandu) ircular e7tend to petitioner, the
.act is, as correctl/ pointed out b/ the appellate court, petitioner .ailed to secure a
le,islati0e .ranchise b/ Dece)ber 31, 1BBB.
There.ore, as lon, as the la" re)ains unchan,ed, the re(uire)ent o. a .ranchise to
operate a tele0ision station )ust be upheld. The call to dispense "ith the re(uisite
le,islati0e .ranchise )ust, ho"e0er, be addressed to on,ress as the la")a<er o. the
land .or the ourt?s .unction is to interpret and not to re"rite the la".
!o ordered.
9. East!&' T!"!c(+
:G.R. N(. 13;<<2. J"= 23) 2>>?@
EASTERN TELECOMMUNICATIONS PHILIPPINES) INC. a'#
TELECOMMUNICATIONS TECHNOLOGIES) INC.) petitioners, vs. INTERNATIONAL
COMMUNICATION CORPORATION) respondent.
Facts:
The role o. the teleco))unications industr/ in Philippine pro,ress and de0elop)ent
cannot be understated. Ti)e "as "hen the industr/ "as do)inated b/ a .e" '' an
oli,arch/ o. sorts "here the elite )ade the decisions and ser.do) had no choice but
ac(uiesce. !ensin, the need to abro,ate their do)inion, the ,o0ern)ent .or)ulated
policies in order to create an en0iron)ent conduci0e to the entr/ o. ne" pla/ers. Thus,
in 8ctober 1BB&, the National Teleco))unications De0elop)ent Plan 1BB1'%&1& (NTDP)
"as .or)ulated and ca)e into bein,. Desi,ned b/ the Depart)ent o. Transportation
and o))unications (D8T), the NTDP pro0ides .or the .ra)e"or< o. ,o0ern)ent
policies, ob+ecti0es and strate,ies that "ill ,uide the industr/?s de0elop)ent .or the
ne7t %& /ears. 5s e7pected, "ith it ca)e the increase in the de)and .or
teleco))unications ser0ices, especiall/ in the area o. local e7chan,e carrier ser0ice
(36!).
onco)itantl/, the D8T issued ,uidelines .or the rationaliDation o. local e7chan,e
teleco))unications ser0ice. $n particular, the D8T issued on !epte)ber 3&, 1BB1,
Depart)ent ircular No. B1'%6&, "ith the purpose o. )ini)iDin, or eli)inatin,
situations "herein )ultiple operators pro0ide local e7chan,e ser0ice in a ,i0en area.
Therea.ter, on Pul/ 1%, 1BB3, then President Cidel Q. Ra)os issued 67ecuti0e 8rder No.
1&B entitled 3ocal 67chan,e arrier !er0ice. !ection % thereo. pro0ides that all e7istin,
$nternational Gate"a/ Cacilit/ ($GC) operatorsV%W are re(uired to pro0ide local e7chan,e
carrier ser0ices in unser0ed and underser0ed areas, includin, Fetro Fanila, thereb/
pro)otin, uni0ersal access to basic teleco))unications ser0ice.
Ta<in, ad0anta,e o. the opportunities brou,ht about b/ the passa,e o. these la"s,
se0eral $GC operators applied .or PN to install, operate and )aintain local e7chan,e
carrier ser0ices in certain areas. Respondent $nternational o))unication orporation,
no" <no"n as #a/an Teleco))unications orporation or #a/antel,V4W applied .or and
"as ,i0en b/ the NT a Pro0isional 5uthorit/ (P5)V5W on Farch 3, 1BB5, to install,
operate and pro0ide local e7chan,e ser0ice in MueDon it/, Falabon and QalenDuela,
Fetro Fanila, and the entire #icol re,ion. Fean"hile, petitioner Teleco))unications
Technolo,ies Philippines, $nc. (TTP$), as an a9liate o. petitioner 6astern
Teleco))unications Philippines, $nc. (6TP$), "as ,ranted b/ the NT a P5 on !epte)ber
%5, 1BB6, to install, operate and )aintain a local e7chan,e ser0ice in the Pro0inces o.
#atanes, a,a/an Qalle/, $sabela, Ualin,a'5pa/ao, Nue0a QiDca/a, $.u,ao, Muirino, the
cities o. Fanila and aloocan, and the Funicipalit/ o. Na0otas, Fetro Fanila.
$t appears, ho"e0er, that be.ore TTP$ "as able to .ull/ acco)plish its rollout obli,ation,
$ applied .or and "as ,i0en a P5 b/ the NT on No0e)ber 1&, 1BBA, to install, operate
and )aintain a local e7chan,e ser0ice in Fanila and Na0otas,V6W t"o areas "hich "ere
alread/ co0ered b/ TTP$ under its P5 dated !epte)ber %5, 1BB6.
5,,rie0ed, petitioners 2led a petition .or re0ie" "ith the ourt o. 5ppeals "ith
application .or a te)porar/ restrainin, order and a "rit o. preli)inar/ in+unction,
doc<eted as 5'G.R. !P No. 46&4A, ar,uin, that the NT co))itted ,ra0e abuse o.
discretion in ,rantin, a pro0isional authorit/ to respondent $ to operate in areas
alread/ assi,ned to TTP$.
Iss!:
-hether or not the 1onorable ourt o. 5ppeals co))itted a serious error o. la" in
upholdin, the 8rder o. the NT ,rantin, a P5 to Respondent to operate 36 ser0ices in
Fanila and Na0otas "hich are areas alread/ assi,ned to petitioner TTP$ under a prior
and subsistin, P5=
H!"#:
5.ter a re0ie" o. the records o. this case, the ourt 2nds no ,ra0e abuse o. discretion
co))itted b/ the ourt o. 5ppeals in sustainin, the NT?s ,rant o. pro0isional authorit/
to $.
The po"er o. the NT to ,rant a pro0isional authorit/ has lon, been settled. 5s the
re,ulator/ a,enc/ o. the national ,o0ern)ent "ith +urisdiction o0er all
teleco))unications entities, it is clothed "ith authorit/ and ,i0en a)ple discretion to
,rant a pro0isional per)it or authorit/.V11W $t also has the authorit/ to issue erti2cates
o. Public on0enience and Necessit/ (PN) .or the installation, operation, and
)aintenance o. co))unications .acilities and ser0ices, radio co))unications s/ste)s,
telephone and tele,raph s/ste)s, includin, the authorit/ to deter)ine the areas o.
operations o. applicants .or teleco))unications ser0ices.V1%W $n this re,ard, the NT is
clothed "ith su9cient discretion to act on )atters solel/ "ithin its co)petence.V13W
$n ,rantin, $ the P5 to operate a local e7chan,e carrier ser0ice in the Fanila and
Na0otas areas, the NT too< into consideration $?s 2nancial and technical resources
and .ound the) to be ade(uate. The NT also noted $?s per.or)ance in co)pl/in,
"ith its rollout obli,ations under the pre0ious P5 ,ranted to it.
The ourt "ill not inter.ere "ith these 2ndin,s o. the NT, as these are )atters that are
addressed to its sound discretion, bein, the ,o0ern)ent a,enc/ entrusted "ith the
re,ulation o. acti0ities co)in, under its special and technical .orte.V15W Foreo0er, the
e7ercise o. ad)inistrati0e discretion is a polic/ decision and a )atter that can best be
dischar,ed b/ the ,o0ern)ent a,enc/ concerned, and not b/ the courts.
!i)ilarl/ in this case, the ,rant o. a P5 to $ to operate in areas co0ered b/ TTP$ is not
tainted "ith an/ ,ra0e abuse o. discretion as it "as issued b/ the NT a.ter ta<in, into
account $?s technical and 2nancial capabilities, and in <eepin, "ith the polic/ o.
health/ co)petition .ostered b/ 6.8. No. 1&B and R.5. No. AB%5.
The po"er o. the NT in ,rantin, or den/in, a pro0isional authorit/ to operate a local
e7chan,e carrier ser0ice is a (uasi'+udicial .unction,V%&W a sphere in "hich the D8T
cannot intrude upon. $. at all, the ser0ice area sche)e pro0ided in D8T Dept. ircular
No. B1'%6& is onl/ one o. the .actors, but should not in an/ "a/, tie do"n the NT in its
deter)ination o. the propriet/ o. a ,rant o. a pro0isional authorit/ to a (uali2ed
applicant .or local e7chan,e ser0ice.
True, NT F No. 11'B'B3 re(uires prior consultation "ith the NT o. the proposed
ser0ice areas. 5s petitioners the)sel0es ar,ue, prior consultation allo"s the NT to
assess the i)pact o. the proposed application on the 0iabilit/ o. the local e7chan,e
operator in the area desired b/ the "ould'be applicant and on the 0iabilit/ o. the entire
teleco))unications industr/ as "ell as rationaliDe the plans to )ini)iDe an/ ad0erse
i)pact.V%1W $n this case, prior consultation "as substantiall/ co)plied "ith and its
purpose acco)plished, "hen $ 2led its application and the NT "as ,i0en the
opportunit/ to assess $?s 0iabilit/ to render local e7chan,e ser0ice in the Fanila and
Na0otas areas, and its i)pact on the teleco))unications industr/.
$t is also true that NT F No. ;'B'B5 allo"s a dul/ en.ranchised entit/ to )aintain a
local e7chan,e net"or< i. it is sho"n that an e7istin, authoriDed local e7chan,e
operator .ails to satis./ the de)and .or local e7chan,e ser0ice.V%%W $n this case, the NT
noted the increasin, rate in the de)and .or local lines "ithin the Fanila and Na0otas
areas, and in order .or these areas to catch up "ith its nei,hborin, cities, installation o.
lines )ust be sped up.V This, in .act, is tanta)ount to a 2ndin, that the e7istin, local
e7chan,e operator .ailed to )eet the ,ro"in, de)and .or local lines.
$?s technical and 2nancial capabilities, as "ell as the ,ro"th rate in the nu)ber o.
lines in particular areas, are )atters "ithin NT?s co)petence and should be accorded
respect. The NT is ,i0en "ide latitude in the e0aluation o. e0idence and in the
e7ercise o. its ad+udicati0e .unctions, and this includes the authorit/ to ta<e +udicial
notice o. .acts "ithin its special co)petence.
;. Ga+$(a V T!v!s
Camboa 5% Te5es, CR Bo% 1-.-9, June ,I, ,E11
., SCRA 9E
definition of the term capital to satisfy the nationality requirement under Sec. 11, Art. XII
FACTS:
0/DT "as granted a 'ranc#ise to engage in t#e telecommunications business in 19,I t#roug# Act% Bo%
3!3% During )artial /a" , percent o' t#e outstanding common s#ares "ere sold b$ Ceneral Telep#one
and Electronics Corporation 9CTE; 9an American compan$; to 0#ilippine Telecommunications
(n5estment Corporation 90T(C;, "#o in turn assigned 111,!1. s#ares o' stocH o' 0T(C 9! percent o'
outstanding capital stocH; to 0rime &oldings (nc% 90&(;% T#ese s#ares o' 0T(C "ere later se@uestered b$
0CCC and ad4udged b$ t#e court to belong to t#e Republic%
.! percent o' 0T(C s#ares "ere sold to &ong Long=based 'irm First 0aci'ic, and t#e remaining ! percent
"as sold t#roug# public bidding b$ t#e (nter=Agenc$ 0ri5atization Council, and e5entuall$ ended up
being boug#t b$ First 0aci'ic subsidiar$ )etro 0aci'ic Asset &oldings (nc%9)0A&; a'ter t#e corporation
e1ercised it<s rig#t o' 'irst re'usal% T#e transaction "as an indirect sale o' 1, million s#ares or %3 percent
o' t#e outstanding common s#ares o' 0/DT, maHing First 0aci'ic<s common s#are#oldings o' 0/DT to 3-
percent and t#e total common s#are#oldings o' 'oreigners in 0/DT to I1%!- percent% Japanese BTT
DoCo)o o"ns .1%. percent o' t#e ot#er 'oreign s#are#oldings:e@uit$%
0etitioner Camboa, alleged t#at t#e sale o' 111,!1. s#ares to )0A& 5iolates Sec% 11 o' Art% +(( o' t#e
Constitution, "#ic# limits 'oreign o"ners#ip o' t#e capital o' a public utilit$ to not more t#an !E percent%
(SS?E:
91; >#et#er petitioner<s c#oice o' remed$ "as properA
9,; >#et#er t#e term 6capital7 under Sec% 11, Article +(( o' t#e Constitution re'ers onl$ to t#e total
common s#ares or to t#e total outstanding stocH o' 0/DT 9public utilit$;A
&E/D:
91; B2% &o"e5er, since t#e t#res#old and purel$ legal issue on t#e de'inition o' t#e term 6capital7 in
Section 11, Article +(( o' t#e Constitution #as 'ar=reac#ing implications to t#e national econom$, t#e
Court treats t#e petition 'or declarator$ relie' as one 'or mandamus% (t is "ell=settled t#at t#is Court ma$
treat a petition 'or declarator$ relie' as one 'or mandamus i' t#e issue in5ol5ed #as 'ar=reac#ing
implications%
9,;T#e term 6capital7 in Section 11, Article +(( o' t#e Constitution re4er( o',y )o (5are( o4 ()o67e')&),e$
)o -o)e &' )5e e,e6)&o' o4 $&re6)or(, and t#us in t#e present case onl$ to common s#ares, and not to t#e
total outstanding capital stocH comprising bot# common and non=5oting pre'erred s#ares%T5e S#
$&re6)e$ )5e SE# )o a++,y )5&( $e4&'&)&o' &' $e)er%&'&'1 85a) 8a( )5e e*)e') o4 a,,o8ab,e 4ore&1'
o8'er(5&+ &' "L.T, a'$ &' 6a(e o4 -&o,a)&o', &%+o(e )5e a++ro+r&a)e +e'a,)y u'$er )5e ,a8.
Consistent "it# t#e constitutional mandate t#at t#e 6State s#all de5elop a sel'=reliant and independent
national econom$ e''ecti5el$ controlled b$ Filipinos,7 t#e term OcapitalO means t#e outstanding capital
stocH entitled to 5ote 95oting stocH;, coupled "it# bene'icial o"ners#ip, bot# o' "#ic# results to
Oe''ecti5e control%O
O)ere legal title is insu''icient to meet t#e E percent Filipino o"ned 6capital7 re@uired in t#e
Constitution 'or certain industries% Full bene'icial o"ners#ip o' E percent o' t#e outstanding capital
stocH, coupled "it# E percent o' t#e 5oting rig#ts, is re@uired%O (n t#is case, suc# t"in re@uirements must
appl$ uni'orml$ and across t#e board to all classes o' s#ares comprising t#e capital% T#us, Ot#e E=!E
o"ners#ip re@uirement in 'a5or o' Filipino citizens must appl$ separatel$ to eac# class o' s#ares, "#et#er
common, pre'erred non=5oting, pre'erred 5oting or an$ ot#er class o' s#ares%O T#is guarantees t#at t#e
6controlling interest7 in public utilities al"a$s lies in t#e #ands o' Filipino citizens%
A broader de'inition "ould un4usti'iabl$ disregards "#o o"ns t#e all=important 5oting stocH, "#ic#
necessaril$ e@uates to control o' t#e public utilit$ "ould be contrar$ to Sec% 11, Art% +((, a sel'=e1ecuting
pro5ision o' t#e Constitution%
A similar de'inition is 'ound in Section 1E, Article +(( o' t#e Constitution, t#e Foreign (n5estments Act o'
1991 and it<s (RR, Regulation o' A"ard o' Co5ernment Contracts or R%A% Bo% .1I3, 0#ilippine (n5entors
(ncenti5es Act or R%A% Bo% 3I.E, )agna Carta 'or )icro, Small and )edium Enterprises or R%A% Bo%
9--, 0#ilippine 25erseas S#ipping De5elopment Act or R%A% Bo% -!-1, Domestic S#ipping
De5elopment Act o' ,EE! or R%A% Bo% 9,9., 0#ilippine Tec#nolog$ Trans'er Act o' ,EE9 or R%A% Bo%
1EE.., and S#ip )ortgage Decree or 0%D% Bo% 1.,1%
9. "AG#OR -( 0IR 295 S#RA 338
G!R! No! 1,+%&, Ma*c; 17- +%11
4H/L/44/NE AM6SEMENT AND GAM/NG COR4ORAT/ON 24AGCOR"- /e)i)io!er,
&s.
THE 96REA6 OF /NTERNAL REEN6E 29/R"- *e8*esented ;e*ein )> HON! 5OSE MAR/O 96LAG- in ;is
o::icia1 ca8acit> as COMM/SS/ONER OF /NTERNAL REEN6E- /(+$ic Res"o!e!),
5OHN DOE and 5ANE DOE- D;o a*e 8e*sons acting :o*- in )e;a1:- o* 0nde* t;e a0t;o*it> o: Res8ondent!/(+$ic
a! /ri&a)e Res"o!e!)s.
D 4 C 3 S 3 6 N
4ERALTA- J..
For reso$()io! o# )his Co(r) is )he /e)i)io! #or Cer)iorari a! /rohi+i)io!
1
%i)h "ra,er #or )he iss(a!ce o# a Te*"orar,
Res)rai!i!g 6rer a!@or /re$i*i!ar, 3!C(!c)io!, a)e A"ri$ 17, 2008, o# "e)i)io!er /hi$i""i!e A*(se*e!) a! Ga*i!g
Cor"ora)io! :/AGC6R<, see2i!g )he ec$ara)io! o# !($$i), o# Sec)io! 1 o# Re"(+$ic Ac) :R.A.< No. 9337 i!so#ar as i)
a*e!s Sec)io! 27 :c< o# )he Na)io!a$ 3!)er!a$ Re&e!(e Coe o# 1997, +, eDc$(i!g "e)i)io!er #ro* eDe*")io! #ro*
cor"ora)e i!co*e )aD #or +ei!g re"(g!a!) )o Sec)io!s 1 a! 10 o# Ar)ic$e 333 o# )he Co!s)i)()io!. /e)i)io!er #(r)her
see2s )o "rohi+i) )he i*"$e*e!)a)io! o# ?(rea( o# 3!)er!a$ Re&e!(e :?3R< Re&e!(e Reg($a)io!s No. 18-200= #or
+ei!g co!)rar, )o $a%.
The (!is"()e #ac)s #o$$o%.
/AGC6R %as crea)e "(rs(a!) )o /resie!)ia$ Decree :/.D.< No. 1087-A
2
o! 7a!(ar, 1, 1977. Si*($)a!eo(s )o i)s
crea)io!, /.D. No. 1087-?
3
:s(""$e*e!)i!g /.D. No. 1087-A< %as iss(e eDe*")i!g /AGC6R #ro* )he "a,*e!) o#
a!, ),"e o# )aD, eDce") a #ra!chise )aD o# #i&e "erce!) :=Z< o# )he gross re&e!(e.
9
Therea#)er, o! 7(!e 2, 1978, /.D.
No. 1399 %as iss(e eD"a!i!g )he sco"e o# /AGC6RKs eDe*")io!.
=
To co!so$ia)e )he $a%s "er)ai!i!g )o )he #ra!chise a! "o%ers o# /AGC6R, /.D. No. 1889
8
%as iss(e. Sec)io! 13
)hereo# reas as #o$$o%s:
Sec. 13. 9xemptions( Q D D D
:1< C(s)o*s D()ies, )aDes a! o)her i*"os)s o! i*"or)a)io!s. - A$$ i*"or)a)io!s o# e'(i"*e!), &ehic$es,
a()o*o+i$es, +oa)s, shi"s, +arges, aircra#) a! s(ch o)her ga*+$i!g "ara"her!a$ia, i!c$(i!g accessories or
re$a)e #aci$i)ies, #or )he so$e a! eDc$(si&e (se o# )he casi!os, )he "ro"er a! e##icie!) *a!age*e!) a!
a*i!is)ra)io! )hereo# a! s(ch o)her c$(+s, recrea)io! or a*(se*e!) "$aces )o +e es)a+$ishe (!er a! +,
&ir)(e o# )his Fra!chise sha$$ +e eDe*") #ro* )he "a,*e!) o# ()ies, )aDes a! o)her i*"os)s, i!c$(i!g a$$
2i!s o# #ees, $e&ies, or charges o# a!, 2i! or !a)(re.
>esse$s a!@or accessor, #err, +oa)s i*"or)e or )o +e i*"or)e +, a!, cor"ora)io! ha&i!g eDis)i!g
co!)rac)(a$ arra!ge*e!)s %i)h )he Cor"ora)io!, #or )he so$e a! eDc$(si&e (se o# )he casi!o or )o +e (se )o
ser&ice )he o"era)io!s a! re'(ire*e!)s o# )he casi!o, sha$$ $i2e%ise +e )o)a$$, eDe*") #ro* )he "a,*e!) o#
a$$ c(s)o*s ()ies, )aDes a! o)her i*"os)s, i!c$(i!g a$$ 2i!s o# #ees, $e&ies, assess*e!)s or charges o#
a!, 2i! or !a)(re, %he)her Na)io!a$ or Loca$.
:2< 3!co*e a! o)her )aDes. - :a< Fra!chise 0o$er: No )aD o# a!, 2i! or #or*, i!co*e or o)her%ise, as %e$$
as #ees, charges, or $e&ies o# %ha)e&er !a)(re, %he)her Na)io!a$ or Loca$, sha$$ +e assesse a! co$$ec)e
(!er )his Fra!chise #ro* )he Cor"ora)io!P !or sha$$ a!, #or* o# )aD or charge a))ach i! a!, %a, )o )he
ear!i!gs o# )he Cor"ora)io!, eDce") a Fra!chise TaD o# #i&e "erce!) :=Z<o# )he gross re&e!(e or ear!i!gs
eri&e +, )he Cor"ora)io! #ro* i)s o"era)io! (!er )his Fra!chise. S(ch )aD sha$$ +e (e a! "a,a+$e
'(ar)er$, )o )he Na)io!a$ Go&er!*e!) a! sha$$ +e i! $ie( o# a$$ 2i!s o# )aDes, $e&ies, #ees or assess*e!)s o#
a!, 2i!, !a)(re or escri")io!, $e&ie, es)a+$ishe, or co$$ec)e +, a!, *(!ici"a$, "ro&i!cia$ or !a)io!a$
go&er!*e!) a()hori),.
:+< 6)hers: The eDe*")io! herei! gra!)e #or ear!i!gs eri&e #ro* )he o"era)io!s co!(c)e
(!er )he #ra!chise, s"eci#ica$$, #ro* )he "a,*e!) o# a!, )aD, i!co*e or o)her%ise, as %e$$ as a!,
#or* o# charges, #ees or $e&ies, sha$$ i!(re )o )he +e!e#i) o# a! eD)e! )o cor"ora)io!:s<,
associa)io!:s<, age!c,:ies<, or i!i&i(a$:s< %i)h %ho* )he Cor"ora)io! or o"era)or has a!,
co!)rac)(a$ re$a)io!shi" i! co!!ec)io! %i)h )he o"era)io!s o# )he casi!o:s< a()horiGe )o +e
co!(c)e (!er )his Fra!chise a! )o )hose recei&i!g co*"e!sa)io! or o)her re*(!era)io! #ro*
)he Cor"ora)io! as a res($) o# esse!)ia$ #aci$i)ies #(r!ishe a!@or )ech!ica$ ser&ices re!ere )o
)he Cor"ora)io! or o"era)or.
The #ee or re*(!era)io! o# #oreig! e!)er)ai!ers co!)rac)e +, )he Cor"ora)io! or o"era)or i! "(rs(a!ce o#
)his "ro&isio! sha$$ +e #ree o# a!, )aD.
:3< Dividend !ncome. ^ No)%i)hs)a!i!g a!, "ro&isio! o# $a% )o )he co!)rar,, i! )he e&e!) )he Cor"ora)io!
sho($ ec$are a cash i&ie! i!co*e corres"o!i!g )o )he "ar)ici"a)io! o# )he "ri&a)e sec)or sha$$, as a!
i!ce!)i&e )o )he +e!e#iciaries, +e s(+Cec) o!$, )o a #i!a$ #$a) i!co*e ra)e o# )e! "erce!) :10Z< o# )he reg($ar
i!co*e )aD ra)es. The i&ie! i!co*e sha$$ !o) i! s(ch case +e co!siere as "ar) o# )he +e!e#iciariesK
)aDa+$e i!co*eP "ro&ie, ho%e&er, )ha) s(ch i&ie! i!co*e sha$$ +e )o)a$$, eDe*")e #ro* i!co*e or
o)her #or* o# )aDes i# i!&es)e %i)hi! siD :8< *o!)hs #ro* )he a)e )he i&ie! i!co*e is recei&e i! )he
#o$$o%i!g:
:a< o"era)io! o# )he casi!o:s< or i!&es)*e!)s i! a!, a##i$ia)e ac)i&i), )ha) %i$$ ($)i*a)e$, reo(! )o
)he +e!e#i) o# )he Cor"ora)io!P or a!, o)her cor"ora)io! %i)h %ho* )he Cor"ora)io! has a!, eDis)i!g
arra!ge*e!)s i! co!!ec)io! %i)h or re$a)e )o )he o"era)io!s o# )he casi!o:s<P
:+< Go&er!*e!) +o!s, sec(ri)ies, )reas(r, !o)es, or go&er!*e!) e+e!)(resP or
:c< ?63-regis)ere or eD"or)-orie!)e cor"ora)io!:s<.
7
/AGC6RKs )aD eDe*")io! %as re*o&e i! 7(!e 1989 )hro(gh /.D. No. 1931, +() i) %as $a)er res)ore +, Le))er o#
3!s)r(c)io! No. 1930, %hich %as iss(e i! Se")e*+er 1989.
6! 7a!(ar, 1, 1998, R.A. No. 8929,
8
o)her%ise 2!o%! as )he National !nternal Revenue Code of ?EE+, )oo2 e##ec).
Sec)io! 27 :c< o# R.A. No. 8929 "ro&ies )ha) go&er!*e!)-o%!e a! co!)ro$$e cor"ora)io!s :G6CCs< sha$$ "a,
cor"ora)e i!co*e )aD, eDce") "e)i)io!er /AGC6R, )he Go&er!*e!) Ser&ice a! 3!s(ra!ce Cor"ora)io!, )he Socia$
Sec(ri), S,s)e*, )he /hi$i""i!e 0ea$)h 3!s(ra!ce Cor"ora)io!, a! )he /hi$i""i!e Chari), S%ee"s)a2es 6##ice, )h(s:
:c< /overnmentDowned or Controlled Corporations, gencies or !nstrumentalities. - The "ro&isio!s o# eDis)i!g s"ecia$
ge!era$ $a%s )o )he co!)rar, !o)%i)hs)a!i!g, a$$ cor"ora)io!s, age!cies or i!s)r(*e!)a$i)ies o%!e a! co!)ro$$e +,
)he Go&er!*e!), eDce") )he Go&er!*e!) Ser&ice a! 3!s(ra!ce Cor"ora)io! :GS3S<, )he Socia$ Sec(ri), S,s)e*
:SSS<, )he /hi$i""i!e 0ea$)h 3!s(ra!ce Cor"ora)io! :/03C<, )he /hi$i""i!e Chari), S%ee"s)a2es 6##ice :/CS6<,
a! )he /hi$i""i!e A*(se*e!) a! Ga*i!g Cor"ora)io! :/AGC6R<, sha$$ "a, s(ch ra)e o# )aD ("o! )heir )aDa+$e
i!co*e as are i*"ose +, )his Sec)io! ("o! cor"ora)io!s or associa)io!s e!gage i! si*i$ar +(si!ess, i!(s)r,, or
ac)i&i),.
9
5i)h )he e!ac)*e!) o# R.A. No. 9337
10
o! .a, 29, 200=, cer)ai! sec)io!s o# )he Na)io!a$ 3!)er!a$ Re&e!(e Coe o#
1997 %ere a*e!e. The "ar)ic($ar a*e!*e!) )ha) is a) iss(e i! )his case is Sec)io! 1 o# R.A. No. 9337, %hich
a*e!e Sec)io! 27 :c< o# )he Na)io!a$ 3!)er!a$ Re&e!(e Coe o# 1997 +, eDc$(i!g /AGC6R #ro* )he e!(*era)io!
o# G6CCs )ha) are eDe*") #ro* "a,*e!) o# cor"ora)e i!co*e )aD, )h(s:
:c< /overnmentDowned or Controlled Corporations, gencies or !nstrumentalities( - The "ro&isio!s o# eDis)i!g s"ecia$
ge!era$ $a%s )o )he co!)rar, !o)%i)hs)a!i!g, a$$ cor"ora)io!s, age!cies, or i!s)r(*e!)a$i)ies o%!e a! co!)ro$$e +,
)he Go&er!*e!), eDce") )he Go&er!*e!) Ser&ice a! 3!s(ra!ce Cor"ora)io! :GS3S<, )he Socia$ Sec(ri), S,s)e*
:SSS<, )he /hi$i""i!e 0ea$)h 3!s(ra!ce Cor"ora)io! :/03C<, a! )he /hi$i""i!e Chari), S%ee"s)a2es 6##ice :/CS6<,
sha$$ "a, s(ch ra)e o# )aD ("o! )heir )aDa+$e i!co*e as are i*"ose +, )his Sec)io! ("o! cor"ora)io!s or associa)io!s
e!gage i! si*i$ar +(si!ess, i!(s)r,, or ac)i&i),.
Di##ere!) gro("s ca*e )o )his Co(r) &ia "e)i)io!s #or certiorari a! "rohi+i)io!
11
assai$i!g )he &a$ii), a!
co!s)i)()io!a$i), o# R.A. No. 9337, i! "ar)ic($ar:
1< Sec)io! 9, %hich i*"oses a 10Z >a$(e Ae TaD :>AT< o! sa$e o# goos a! "ro"er)iesP Sec)io! =,
%hich i*"oses a 10Z >AT o! i*"or)a)io! o# goosP a! Sec)io! 8, %hich i*"oses a 10Z >AT o! sa$e o#
ser&ices a! (se or $ease o# "ro"er)ies, a$$ co!)ai! a (!i#or* "ro&iso a()horiGi!g )he /resie!), ("o! )he
reco**e!a)io! o# )he Secre)ar, o# Fi!a!ce, )o raise )he >AT ra)e )o 12Z. The sai "ro&isio!s %ere a$$ege
)o +e &io$a)i&e o# Sec)io! 28 :2<, Ar)ic$e >3 o# )he Co!s)i)()io!, %hich sec)io! &es)s i! Co!gress )he eDc$(si&e
a()hori), )o #iD )he ra)e o# )aDes, a! o# Sec)io! 1, Ar)ic$e 333 o# )he Co!s)i)()io! o! (e "rocess, as %e$$ as o#
Sec)io! 28 :2<, Ar)ic$e >3 o# )he Co!s)i)()io!, %hich sec)io! "ro&ies #or )he L!o a*e!*e!) r($eL ("o! )he
$as) reai!g o# a +i$$P
2< Sec)io!s 8 a! 12 %ere a$$ege )o +e &io$a)i&e o# Sec)io! 1, Ar)ic$e 333 o# )he Co!s)i)()io!, or )he g(ara!)ee
o# e'(a$ "ro)ec)io! o# )he $a%s, a! Sec)io! 28 :1<, Ar)ic$e >3 o# )he Co!s)i)()io!P a!
3< o)her )ech!ica$ as"ec)s o# )he "assage o# )he $a%, '(es)io!i!g )he *a!!er i) %as "asse.
6! Se")e*+er 1, 200=, )he Co(r) is*isse a$$ )he "e)i)io!s a! ("he$ )he co!s)i)()io!a$i), o# R.A. No. 9337.
12
6! )he sa*e a)e, res"o!e!) ?3R iss(e Re&e!(e Reg($a)io!s :RR< No. 18-200=,
13
s"eci#ica$$, ie!)i#,i!g /AGC6R
as o!e o# )he #ra!chisees s(+Cec) )o 10Z >AT i*"ose (!er Sec)io! 108 o# )he Na)io!a$ 3!)er!a$ Re&e!(e Coe o#
1997, as a*e!e +, R.A. No. 9337. The sai re&e!(e reg($a)io!, i! "ar), reas:
Sec. 9. 108-3. De#i!i)io!s a! S"eci#ic R($es o! Se$ec)e Ser&ices. Q
D D D D
:h< D D D
Gross Recei")s o# a$$ o)her #ra!chisees, o)her )ha! )hose co&ere +, Sec. 119 o# )he TaD Coe, regar$ess o# ho%
)heir #ra!chisees *a, ha&e +ee! gra!)e, sha$$ +e s(+Cec) )o )he 10Z >AT i*"ose (!er Sec.108 o# )he TaD Coe.
This i!c$(es, a*o!g o)hers, )he /hi$i""i!e A*(se*e!) a! Ga*i!g Cor"ora)io! :/AGC6R<, a! i)s $ice!sees or
#ra!chisees.
0e!ce, )he "rese!) "e)i)io! #or cer)iorari.
/AGC6R raises )he #o$$o%i!g iss(es:
3
504T04R 6R N6T RA 9337, S4CT36N 1 :C< 3S N-LL AND >63D # !N!T!7 F6R ?43NG R4/-GNANT T6 T04
4X-AL /R6T4CT36N TCLA-S4U 4.?6D34D 3N S4CT36N 1, ART3CL4 333 6F T04 1987 C6NST3T-T36N.
33
504T04R 6R N6T RA 9337, S4CT36N 1 :C< 3S N-LL AND >63D # !N!T!7 F6R ?43NG R4/-GNANT T6 T04
N6N-3./A3R.4NT TCLA-S4U 4.?6D34D 3N S4CT36N 10, ART3CL4 333 6F T04 1987 C6NST3T-T36N.
333
504T04R 6R N6T RR 18-200=, S4CT36N 9.108-3, /ARAGRA/0 :0< 3S N-LL AND >63D # !N!T!7F6R ?43NG
?4B6ND T04 SC6/4 6F T04 ?AS3C LA5, RA 8929, S4CT36N 108, 3NS6FAR AS T04 SA3D R4G-LAT36N
3./6S4D >AT 6N T04 S4R>3C4S 6F T04 /4T3T36N4R AS 54LL AS /4T3T36N4RFS L3C4NS44S 6R
FRANC03S44S 504N T04 ?AS3C LA5, AS 3NT4R/R4T4D ?B A//L3CA?L4 7-R3S/R-D4NC4, D64S N6T
3./6S4 >AT 6N /4T3T36N4R 6R 6N /4T3T36N4RFS L3C4NS44S 6R FRANC03S44S.
19
The ?3R, i! i)s Co**e!)
1=
a)e Dece*+er 29, 2008, co(!)ers:
3
S4CT36N 1 6F R.A. N6. 9337 AND S4CT36N 13 :2< 6F /.D. 1889 AR4 ?6T0 >AL3D AND C6NST3T-T36NAL
/R6>3S36NS 6F LA5S T0AT S06-LD ?4 0AR.6N36-SLB C6NSTR-4D T6G4T04R S6 AS T6 G3>4
4FF4CT T6 ALL 6F T043R /R6>3S36NS 504N4>4R /6SS3?L4.
33
S4CT36N 1 6F R.A. N6. 9337 3S N6T >36LAT3>4 6F S4CT36N 1 AND S4CT36N 10, ART3CL4 333 6F T04 1987
C6NST3T-T36N.
333
?3R R4>4N-4 R4G-LAT36NS AR4 /R4S-.4D >AL3D AND C6NST3T-T36NAL -NT3L STR3C14N D65N ?B
LA5F-L A-T06R3T34S.
The 6##ice o# )he So$ici)or Ge!era$ :6SG<, +, %a, o# .a!i#es)a)io! 3! Lieu o# Co**e!),
18
co!c(rre %i)h )he
arg(*e!)s o# )he "e)i)io!er. 3) ae )ha) a$)ho(gh )he S)a)e is #ree )o se$ec) )he s(+Cec)s o# )aDa)io! a! )ha) )he
i!e'(i), res($)i!g #ro* si!g$i!g o() a "ar)ic($ar c$ass #or )aDa)io! or eDe*")io! is !o) a! i!#ri!ge*e!) o# )he
co!s)i)()io!a$ $i*i)a)io!, a )aD $a% *(s) o"era)e %i)h )he sa*e #orce a! e##ec) )o a$$ "erso!s, #ir*s a! cor"ora)io!s
"$ace i! a si*i$ar si)(a)io!. F(r)her*ore, accori!g )o )he 6SG, "(+$ic res"o!e!) ?3R eDceee i)s s)a)()or,
a()hori), %he! i) e!ac)e RR No. 18-200=, +eca(se )he $a))erKs "ro&isio!s are co!)rar, )o )he *a!a)es o# /.D. No.
1889 i! re$a)io! )o R.A. No. 9337.
The *ai! iss(e is %he)her or !o) /AGC6R is s)i$$ eDe*") #ro* cor"ora)e i!co*e )aD a! >AT %i)h )he e!ac)*e!) o#
R.A. No. 9337.
A#)er a care#($ s)(, o# )he "osi)io!s "rese!)e +, )he "ar)ies, )his Co(r) #i!s )he "e)i)io! "ar)$, *eri)orio(s.
-!er Sec)io! 1 o# R.A. No. 9337, a*e!i!g Sec)io! 27 :c< o# )he Na)io!a$ 3!)er!a$ Re&e!(e Coe o# 1977, "e)i)io!er
is !o $o!ger eDe*") #ro* cor"ora)e i!co*e )aD as i) has +ee! e##ec)i&e$, o*i))e #ro* )he $is) o# G6CCs )ha) are
eDe*") #ro* i). /e)i)io!er arg(es )ha) s(ch o*issio! is (!co!s)i)()io!a$, as i) is &io$a)i&e o# i)s righ) )o e'(a$ "ro)ec)io!
o# )he $a%s (!er Sec)io! 1, Ar)ic$e 333 o# )he Co!s)i)()io!:
Sec. 1. No "erso! sha$$ +e e"ri&e o# $i#e, $i+er),, or "ro"er), %i)ho() (e "rocess o# $a%, !or sha$$ a!, "erso! +e
e!ie )he e'(a$ "ro)ec)io! o# )he $a%s.
3! Cit% of -anila &. Laguio, &r(,
17
)his Co(r) eD"o(!e )he *ea!i!g a! sco"e o# e'(a$ "ro)ec)io!, )h(s:
4'(a$ "ro)ec)io! re'(ires )ha) a$$ "erso!s or )hi!gs si*i$ar$, si)(a)e sho($ +e )rea)e a$i2e, +o)h as )o righ)s
co!#erre a! res"o!si+i$i)ies i*"ose. Si*i$ar s(+Cec)s, i! o)her %ors, sho($ !o) +e )rea)e i##ere!)$,, so as )o
gi&e (!(e #a&or )o so*e a! (!C(s)$, iscri*i!a)e agai!s) o)hers. The g(ara!)ee *ea!s )ha) !o "erso! or c$ass o#
"erso!s sha$$ +e e!ie )he sa*e "ro)ec)io! o# $a%s %hich is e!Co,e +, o)her "erso!s or o)her c$asses i! $i2e
circ(*s)a!ces. The Le'(a$ "ro)ec)io! o# )he $a%s is a "$ege o# )he "ro)ec)io! o# e'(a$ $a%s.L 3) $i*i)s go&er!*e!)a$
iscri*i!a)io!. The e'(a$ "ro)ec)io! c$a(se eD)e!s )o ar)i#icia$ "erso!s +() o!$, i!so#ar as )heir "ro"er), is
co!cer!e.
D D D D
Legis$a)i&e +oies are a$$o%e )o c$assi#, )he s(+Cec)s o# $egis$a)io!. 3# )he c$assi#ica)io! is reaso!a+$e, )he $a% *a,
o"era)e o!$, o! so*e a! !o) a$$ o# )he "eo"$e %i)ho() &io$a)i!g )he e'(a$ "ro)ec)io! c$a(se. The c$assi#ica)io! *(s),
as a! i!is"e!sa+$e re'(isi)e, !o) +e ar+i)rar,. To +e &a$i, i) *(s) co!#or* )o )he #o$$o%i!g re'(ire*e!)s:
1< 3) *(s) +e +ase o! s(+s)a!)ia$ is)i!c)io!s.
2< 3) *(s) +e ger*a!e )o )he "(r"oses o# )he $a%.
3< 3) *(s) !o) +e $i*i)e )o eDis)i!g co!i)io!s o!$,.
9< 3) *(s) a""$, e'(a$$, )o a$$ *e*+ers o# )he c$ass.
18
3) is !o) co!)es)e )ha) +e#ore )he e!ac)*e!) o# R.A. No. 9337, "e)i)io!er %as o!e o# )he #i&e G6CCs eDe*")e #ro*
"a,*e!) o# cor"ora)e i!co*e )aD as sho%! i! R.A. No. 8929, Sec)io! 27 :c< o# %hich, reas:
:c< Go&er!*e!)-o%!e or Co!)ro$$e Cor"ora)io!s, Age!cies or 3!s)r(*e!)a$i)ies. - The "ro&isio!s o# eDis)i!g s"ecia$
or ge!era$ $a%s )o )he co!)rar, !o)%i)hs)a!i!g, a$$ cor"ora)io!s, age!cies or i!s)r(*e!)a$i)ies o%!e a! co!)ro$$e
+, )he Go&er!*e!), eDce") )he Go&er!*e!) Ser&ice a! 3!s(ra!ce Cor"ora)io! :GS3S<, )he Socia$ Sec(ri), S,s)e*
:SSS<, )he /hi$i""i!e 0ea$)h 3!s(ra!ce Cor"ora)io! :/03C<, )he /hi$i""i!e Chari), S%ee"s)a2es 6##ice :/CS6<, a!
)he /hi$i""i!e A*(se*e!) a! Ga*i!g Cor"ora)io! :/AGC6R<, sha$$ "a, s(ch ra)e o# )aD ("o! )heir )aDa+$e i!co*e
as are i*"ose +, )his Sec)io! ("o! cor"ora)io!s or associa)io!s e!gage i! si*i$ar +(si!ess, i!(s)r,, or ac)i&i),.
19
A "er(sa$ o# )he $egis$a)i&e recors o# )he ?ica*era$ Co!#ere!ce .ee)i!g o# )he Co**i))ee o! 5a,s o! .ea!s a)e
6c)o+er 27, 1997 %o($ sho% )ha) )he eDe*")io! o# /AGC6R #ro* )he "a,*e!) o# cor"ora)e i!co*e )aD %as (e )o
)he ac'(iesce!ce o# )he Co**i))ee o! 5a,s o! .ea!s )o )he re'(es) o# /AGC6R )ha) i) +e eDe*") #ro* s(ch
)aD.
20
The recors o# )he ?ica*era$ Co!#ere!ce .ee)i!g re&ea$:
06N. R. D3AV. The o)her )hi!g, sir, is %e --- 3 !o)ice %e i*"ose a )aD o! $o))o %i!!i!gs.
C0A3R.AN 4NR3L4. 5a$a !a, )i!a!gga$ !a !a*i! ,o!.
06N. R. D3AV. Ti!a!gga$ !a +a !a)i! ,o!R
C0A3R.AN 4NR3L4. 6o.
06N. R. D3AV. ?eca(se 3 %as %o!eri!g %he)her %e co&ere )he )aD o! --- 5he)her o! a (!i&ersa$ +asis, %e
i!c$(e a )aD o! coc2#igh)i!g %i!!i!gs.
C0A3R.AN 4NR3L4. No, %e re*o&e )he ---
06N. R. D3AV. 3 . . . :i!a(i+$e< !a)i! ,o!g $o))oR
C0A3R.AN 4NR3L4. /a)i /AGC6R )i!a!gga$ ("o! re'(es).
C0A3R.AN 7A>34R. Beah, /hi$i""i!e 3!s(ra!ce Co**issio!.
C0A3R.AN 4NR3L4. /hi$i""i!e 3!s(ra!ce --- 0ea$)h, hea$)h +a. Bo! a!g re'(es) !g Chair*a!, 3 %i$$ acce").
:$a(gh)er< /ag-/ag-i+ig ,o!, *a$i$ii) !a sa )ao ,o!.
06N. R6IAS. .r. Chair*a!, 3 %o!er i# i! )he re&e!(e gai!ers i# %e #ac)ore i! a! a*o(!) )ha) %o($ re#$ec) )he
>AT a! o)her sa$es )aDes---
C0A3R.AN 4NR3L4. No, %eFre )a$2i!g o# )his *eas(re o!$,. 5e %i$$ !o) --- :isco!)i!(e<
06N. R6IAS. No, !o, !o, !o, #ro* )he --- arisi!g #ro* )he eDe*")io!. Ass(*i!g )ha) %he! %e re$ease )he *o!e,
i!)o )he ha!s o# )he "(+$ic, )he, %i$$ !o) (se )ha) )o --- #or %a$$"a"er. The, %i$$ s"e! )ha) eh, .r. Chair*a!. So %he!
)he, s"e! )ha)---
C0A3R.AN 4NR3L4. ThereFs a >AT.
06N. R6IAS. There %i$$ +e a >AT a! )here %i$$ +e o)her sa$es )aDes !o. 3s )here a '(a!)i#ica)io!R 3s )here a!
a""roDi*a)io!R
C0A3R.AN 7A>34R. No) a!,)hi!g.
06N. R6IAS. So, i! e##ec), %e ha&e s)eri$iGe )ha) e!)ire se&e! +i$$io!. 3! e##ec), i) is !o) circ($a)i!g i! )he eco!o*,
%hich is (!rea$is)ic.
C0A3R.AN 4NR3L4. 3) oes, i) oes, +eca(se )his is )a2e! a! s"e!) +, go&er!*e!), so*e+o, recei&es i) i! )he
#or* o# %ages a! s(""$ies a! o)her ser&ices a! o)her goos. The, are !o) +ei!g )a2e! #ro* )he "(+$ic a! s)ore
i! a &a($).
C0A3R.AN 7A>34R. Tha) 7.7 $oss +eca(se o# )aD eDe*")io!. Tha) %i$$ +e eD)ra i!co*e #or )he )aD"a,ers.
06N. R6IAS. /recise$,, so )he, %i$$ +e s"e!i!g i).
21
The isc(ssio! a+o&e +ears o() )ha) (!er R.A. No. 8929, )he eDe*")io! o# /AGC6R #ro* "a,i!g cor"ora)e i!co*e
)aD %as !o) +ase o! a c$assi#ica)io! sho%i!g s(+s)a!)ia$ is)i!c)io!s %hich *a2e #or rea$ i##ere!ces, +() )o rei)era)e,
)he eDe*")io! %as gra!)e ("o! )he re'(es) o# /AGC6R )ha) i) +e eDe*") #ro* )he "a,*e!) o# cor"ora)e i!co*e
)aD.
5i)h )he s(+se'(e!) e!ac)*e!) o# R.A. No. 9337, a*e!i!g R.A. No. 8929, /AGC6R has +ee! eDc$(e #ro* )he
e!(*era)io! o# G6CCs )ha) are eDe*") #ro* "a,i!g cor"ora)e i!co*e )aD. The recors o# )he ?ica*era$ Co!#ere!ce
.ee)i!g a)e A"ri$ 18, 200=, o# )he Co**i))ee o! )he Disagreei!g /ro&isio!s o# Se!a)e ?i$$ No. 19=0 a! 0o(se ?i$$
No. 3===, sho% )ha) i) is )he $egis$a)i&e i!)e!) )ha) /AGC6R +e s(+Cec) )o )he "a,*e!) o# cor"ora)e i!co*e )aD, )h(s:
T04 C0A3R.AN :S4N. R4CT6<. Bes, 6s*eEa, )he "ro"o!e!) o# )he a*e!*e!).
S4N. 6S.4_A. Beah. .r. Chair*a!, o!e o# )he reaso!s %h, %eKre e&e! co!sieri!g )his >AT +i$$ is %e %a!) )o sho%
)he %or$ %ho o(r crei)ors, )ha) %e are i!creasi!g o##icia$ re&e!(es )ha) go )o )he !a)io!a$ +(ge). -!#or)(!a)e$,
)oa,, /agcor is (!o##icia$.
No%, i! 2003, 3 )oo2 a '(ic2 $oo2 )his *or!i!g, /agcor ha a !e) i!co*e o# 9.7 +i$$io! a#)er "a,i!g so*e s*a$$ )aDes
)ha) )he, are s(+Cec)e )o. 6# )he 9.7 +i$$io!, )he, c$ai* )he, re*i))e )o !a)io!a$ go&er!*e!) se&e! +i$$io!.
/ag2a)a"os, )here are o)her s"eci#ic re*i))a!ces $i2e )o )he /hi$i""i!e S"or)s Co**issio!, e)c., as *a!a)e +,
&ario(s $a%s, a! )he! a+o() 900 *i$$io! )o )he /resie!)Ks Socia$ F(!. ?() a$$ i! a$$, )heir !e) "ro#i) )oa, sho($ +e
a+o() 12 +i$$io!. Tha)Ks %h, 3 a* '(es)io!i!g )his )%o +i$$io!. 9eca0se D;i1e essentia11> t;e> c1ai( t;at t;e (one>
goes to gove*n(ent- and / Di11 acce8t t;at F0st :o* t;e sake o: a*g0(ent! /t does not 8ass t;*o0g; t;e
a88*o8*iation 8*ocess! And / t;ink t;at at 1east i: De can ca8t0*e $7 8e*cent o* $+ 8e*cent t;*o0g; t;e
)0dgeta*> 8*ocess- :i*st- it is *e:1ected in o0* o::icia1 inco(e o: gove*n(ent D;ic; is a881ied to t;e nationa1
)0dget- and second1>- it goes t;*o0g; D;at is constit0tiona11> (andated as Cong*ess a88*o8*iating and
de:ining D;e*e t;e (one> is s8ent and not t;*o0g; a )oa*d o: di*ecto*s t;at ;as a)so10te1> no
acco0nta)i1it>!
R4/. /-4NT4?4LLA. 5e$$, %i)h a$$ (e res"ec), .r. Chair*a!, #o$$o% (" $a!g.
There is %iso* i! )he co**e!)s o# *, goo #rie! #ro* Ce+(, Se!a)or 6s*eEa.
S4N. 6S.4_A. A! Negros.
R4/. /-4NT4?4LLA. A! Negros a) )he sa*e )i*e a, 1asi*a!%a. ?() 3 %o($ !o) %a!) )o "() *, #rie!s #ro* )he
De"ar)*e!) o# Fi!a!ce i! a i##ic($) "osi)io!, +() *a, %e 2!o% ,o(r co**e!)s o! )his 2!o%i!g )ha) as Se!a)or
6s*eEa C(s) *e!)io!e, he sai, L3 acce") )ha) )ha) a $o) o# i) is goi!g )o s"e!i!g #or +asic ser&ices,L ,o( 2!o%, goi!g
)o *os), 3 )hi!2, s(""ose$, a $o) or *os) o# i) sho($ go )o go&er!*e!) s"e!i!g, socia$ ser&ices a! )he $i2e. 5ha) is
,o(r co**e!) o! )hisR This is goi!g )o a##ec) a $o) o# ser&ices o! )he go&er!*e!) sie.
T04 C0A3R.AN :R4/. LA/-S<. .r. Chair, .r. Chair.
S4N. 6S.4_A. 3) goes #ro* "oc2e) )o )he o)her, .o!ico.
R4/. /-4NT4?4LLA. 3 2!o% )ha). ?() 3 %a!)e )o as2 )he*, .r. Se!a)or, +eca(se ,o( *a, ha&e ,o(r o%! "re-
C(g*e!) o! )his a! 3 o!K) +$a*e ,o(. 3 o!K) +$a*e ,o(. A! 3 2!o% ,o( ha&e ,o(r o%! research. ?() %i$$ )his !o)
a##ec) a $o), )he is+(rse*e!)s o! socia$ ser&ices a! o)herR
R4/. L6CS3N. .r. Chair*a!. .r. Chair*a!, i# 3 ca! a )o )ha) '(es)io! a$so. 5o($!K) i) +e easier #or ,o( )o eD"$ai!
)o, sa,, #oreig! crei)ors, ho% o ,o( eD"$ai! )o )he* )ha) i# )here is a #isca$ ga" so*e o# o(r riches) cor"ora)io!s has
T+ee!U s"are T#ro*U )aDa)io! +, )he go&er!*e!) %hich is o!e rich so(rce o# re&e!(es. No%, %h, o ,o( sa&e, %h, o
,o( s"are cer)ai! go&er!*e!) cor"ora)io!s o! )ha), $i2e /agcorR So, %o($ i) +e easier #or ,o( )o *a2e a! arg(*e!)
i# e&er,)hi!g %as eD"ose )o )aDa)io!R
R4/. T4>4S. .r. Chair, "$ease.
T04 C0A3R.AN :R4/. LA/-S<. Ca! %e as2 )he D6F )o res"o! )o )hose +e#ore %e ca$$ Co!gress*a! Te&esR
.R. /-R3S3.A. Tha!2 ,o(, .r. Chair.
Yes- :*o( de:inite1> i(8*oving t;e co11ection- it Di11 ;e18 0s )eca0se it Di11 t;en ente* as an o::icia1 *even0e
a1t;o0g; D;en dividends dec1a*e it a1so goes in as ot;e* inco(e! :sic<
D D D D
R4/. T4>4S. .r. Chair*a!.
D D D D
T04 C0A3R.AN :R4/. LA/-S<. Co!gress*a! Te&es.
R4/. T4>4S. Yea;! 4agco* is cont*o11ed 0nde* Section +,- t;at is on inco(e taE! NoD- De a*e ta1king ;e*e on
va10e#added taE! Do >o0 (ean to sa> De a*e going to a(end it :*o( inco(e taE to va10e#added taE- as :a* as
4agco* is conce*nedM
T04 C0A3R.AN :S4N. R4CT6<. No! Ce a*e F0st a(ending t;at section Dit; *ega*d to t;e eEe(8tion :*o(
inco(e taE o: 4agco*!
D D D D
R4/. N6GRAL4S. .r. Chair*a!, .r. Chair*a!. .r. Chair*a!.
T04 C0A3R.AN :R4/. LA/-S<. Co!gress*a! Nogra$es.
R4/. N6GRAL4S. 7(s) a "oi!) o# i!'(ir, #ro* )he Chair. 5ha) eDac)$, are )he #(!c)io!s o# /agcor )ha) are >ATa+$eR
5ha) %i$$ %e >AT i! /agcorR
T04 C0A3R.AN :R4/. LA/-S<. This is o! o%! i!co*e )aD. This is /agcor i!co*e )aD.
R4/. N6GRAL4S. No, )ha)Ks %h,. A!o!g i-&a->a) !a)i! sa 2a!,a. Sa$e o# %ha)R
D D D D
R4/. >3LLAF-4RT4. .r. Chair*a!, *, '(es)io! is, %ha) are %e >ATi!g /agcor %i)h, is i) )he . . .
R4/. N6GRAL4S. .r. Chair*a!, )his is a secre) agree*e!) or )he %a, )he, cra#) )heir co!)rac), %hich +asisR
T04 C0A3R.AN :S4N. R4CT6<. Cong*ess(an Nog*a1es- t;e Senate ve*sion does not disc0ss a AT on
4agco* )0t it F0st takes aDa> t;ei* eEe(8tion :*o( non#8a>(ent o: inco(e taE!
22
TaDa)io! is )he r($e a! eDe*")io! is )he eDce")io!.
23
The +(re! o# "roo# res)s ("o! )he "ar), c$ai*i!g eDe*")io! )o
"ro&e )ha) i) is, i! #ac), co&ere +, )he eDe*")io! so c$ai*e.
29
As a r($e, )aD eDe*")io!s are co!s)r(e s)ro!g$,
agai!s) )he c$ai*a!).
2=
4De*")io!s *(s) +e sho%! )o eDis) c$ear$, a! ca)egorica$$,, a! s(""or)e +, c$ear $ega$
"ro&isio!.
28
3! )his case, /AGC6R #ai$e )o "ro&e )ha) i) is s)i$$ eDe*") #ro* )he "a,*e!) o# cor"ora)e i!co*e )aD, co!sieri!g )ha)
Sec)io! 1 o# R.A. No. 9337 a*e!e Sec)io! 27 :c< o# )he Na)io!a$ 3!)er!a$ Re&e!(e Coe o# 1997 +, o*i))i!g
/AGC6R #ro* )he eDe*")io!. The $egis$a)i&e i!)e!), as sho%! +, )he isc(ssio!s i! )he ?ica*era$ Co!#ere!ce
.ee)i!g, is )o re'(ire /AGC6R )o "a, cor"ora)e i!co*e )aDP he!ce, )he o*issio! or re*o&a$ o# /AGC6R #ro*
eDe*")io! #ro* )he "a,*e!) o# cor"ora)e i!co*e )aD. 3) is a +asic "rece") o# s)a)()or, co!s)r(c)io! )ha) )he eD"ress
*e!)io! o# o!e "erso!, )hi!g, ac), or co!se'(e!ce eDc$(es a$$ o)hers as eD"resse i! )he #a*i$iar *aDi* eD"ressio
(!i(s es) eDc$(sio a$)eri(s.
27
Th(s, )he eD"ress *e!)io! o# )he G6CCs eDe*")e #ro* "a,*e!) o# cor"ora)e i!co*e
)aD eDc$(es a$$ o)hers. No) +ei!g eDce")e, "e)i)io!er /AGC6R *(s) +e regare as co*i!g %i)hi! )he "(r&ie% o#
)he ge!era$ r($e )ha) G6CCs sha$$ "a, cor"ora)e i!co*e )aD, eD"resse i! )he *aDi*: eDce")io #ir*a) reg($a* i!
casi+(s !o! eDce")is.
28
/AGC6R ca!!o) #i! s(""or) i! )he e'(a$ "ro)ec)io! c$a(se o# )he Co!s)i)()io!, as )he $egis$a)i&e recors o# )he
?ica*era$ Co!#ere!ce .ee)i!g a)e 6c)o+er 27, 1997, o# )he Co**i))ee o! 5a,s a! .ea!s, sho% )ha)
/AGC6RFs eDe*")io! #ro* "a,*e!) o# cor"ora)e i!co*e )aD, as "ro&ie i! Sec)io! 27 :c< o# R.A. No. 8929, or )he
Na)io!a$ 3!)er!a$ Re&e!(e Coe o# 1997, %as !o) *ae "(rs(a!) )o a &a$i c$assi#ica)io! +ase o! s(+s)a!)ia$
is)i!c)io!s a! )he o)her re'(ire*e!)s o# a reaso!a+$e c$assi#ica)io! +, $egis$a)i&e +oies, so )ha) )he $a% *a,
o"era)e o!$, o! so*e, a! !o) a$$, %i)ho() &io$a)i!g )he e'(a$ "ro)ec)io! c$a(se. The $egis$a)i&e recors sho% )ha) )he
+asis o# )he gra!) o# eDe*")io! )o /AGC6R #ro* cor"ora)e i!co*e )aD %as /AGC6RFs o%! re'(es) )o +e eDe*")e.
/e)i)io!er #(r)her co!)e!s )ha) Sec)io! 1 :c< o# R.A. No. 9337 is !($$ a! &oi a" initio #or &io$a)i!g )he !o!-
i*"air*e!) c$a(se o# )he Co!s)i)()io!. /e)i)io!er a&ers )ha) $a%s #or* "ar) o#, a! is rea i!)o, )he co!)rac) e&e!
%i)ho() )he "ar)ies eD"ress$, sa,i!g so. /e)i)io!er s)a)es )ha) )he "ri&a)e "ar)ies@i!&es)ors )ra!sac)i!g %i)h i)
co!siere )he )aD eDe*")io!s, %hich i!(re )o )heir +e!e#i), as )he *ai! co!siera)io! a! i!(ce*e!) #or )heir
ecisio! )o )ra!sac)@i!&es) %i)h i). /e)i)io!er arg(es )ha) )he %i)hra%a$ o# i)s eDe*")io! #ro* cor"ora)e i!co*e )aD +,
R.A. No. 9337 has )he e##ec) o# cha!gi!g )he *ai! co!siera)io! a! i!(ce*e!) #or )he )ra!sac)io!s o# "ri&a)e
"ar)ies %i)h i)P )h(s, )he a*e!a)or, "ro&isio! is &io$a)i&e o# )he !o!-i*"air*e!) c$a(se o# )he Co!s)i)()io!.
/e)i)io!erFs co!)e!)io! $ac2s *eri).
The !o!-i*"air*e!) c$a(se is co!)ai!e i! Sec)io! 10, Ar)ic$e 333 o# )he Co!s)i)()io!, %hich "ro&ies )ha) !o $a%
i*"airi!g )he o+$iga)io! o# co!)rac)s sha$$ +e "asse. The !o!-i*"air*e!) c$a(se is $i*i)e i! a""$ica)io! )o $a%s )ha)
eroga)e #ro* "rior ac)s or co!)rac)s +, e!$argi!g, a+rigi!g or i! a!, *a!!er cha!gi!g )he i!)e!)io! o# )he
"ar)ies.
29
There is i*"air*e!) i# a s(+se'(e!) $a% cha!ges )he )er*s o# a co!)rac) +e)%ee! )he "ar)ies, i*"oses !e%
co!i)io!s, is"e!ses %i)h )hose agree ("o! or %i)hra%s re*eies #or )he e!#orce*e!) o# )he righ)s o# )he "ar)ies.
30
As regars #ra!chises, Sec)io! 11, Ar)ic$e I33 o# )he Co!s)i)()io!
31
"ro&ies )ha) !o #ra!chise or righ) sha$$ +e gra!)e
eDce") (!er )he co!i)io! )ha) i) sha$$ +e s(+Cec) )o a*e!*e!), a$)era)io!, or re"ea$ +, )he Co!gress %he! )he
co**o! goo so re'(ires.
32
3! .a!i$a 4$ec)ric Co*"a!, &. /ro&i!ce o# Lag(!a,
33
)he Co(r) he$ )ha) a #ra!chise "ar)a2es )he !a)(re o# a gra!),
%hich is +e,o! )he "(r&ie% o# )he !o!-i*"air*e!) c$a(se o# )he Co!s)i)()io!.
39
The "er)i!e!) "or)io! o# )he case
s)a)es:
5hi$e )he Co(r) has, !o) )oo i!#re'(e!)$,, re#erre )o )aD eDe*")io!s co!)ai!e i! s"ecia$ #ra!chises as +ei!g i! )he
!a)(re o# co!)rac)s a! a "ar) o# )he i!(ce*e!) #or carr,i!g o! )he #ra!chise, )hese eDe*")io!s, !e&er)he$ess, are
#ar #ro* +ei!g s)ric)$, co!)rac)(a$ i! !a)(re. Co!)rac)(a$ )aD eDe*")io!s, i! )he rea$ se!se o# )he )er* a! %here )he
!o!-i*"air*e!) c$a(se o# )he Co!s)i)()io! ca! righ)$, +e i!&o2e, are )hose agree )o +, )he )aDi!g a()hori), i!
co!)rac)s, s(ch as )hose co!)ai!e i! go&er!*e!) +o!s or e+e!)(res, $a%#($$, e!)ere i!)o +, )he* (!er e!a+$i!g
$a%s i! %hich )he go&er!*e!), ac)i!g i! i)s "ri&a)e ca"aci),, shes i)s c$oa2 o# a()hori), a! %ai&es i)s go&er!*e!)a$
i**(!i),. Tr($,, )aD eDe*")io!s o# )his 2i! *a, !o) +e re&o2e %i)ho() i*"airi!g )he o+$iga)io!s o# co!)rac)s. These
co!)rac)(a$ )aD eDe*")io!s, ho%e&er, are !o) )o +e co!#(se %i)h )aD eDe*")io!s gra!)e (!er #ra!chises. A
#ra!chise "ar)a2es )he !a)(re o# a gra!) %hich is +e,o! )he "(r&ie% o# )he !o!-i*"air*e!) c$a(se o# )he
Co!s)i)()io!. 3!ee, Ar)ic$e I33, Sec)io! 11, o# )he 1987 Co!s)i)()io!, $i2e i)s "rec(rsor "ro&isio!s i! )he 193= a! )he
1973 Co!s)i)()io!s, is eD"$ici) )ha) !o #ra!chise #or )he o"era)io! o# a "(+$ic ()i$i), sha$$ +e gra!)e eDce") (!er )he
co!i)io! )ha) s(ch "ri&i$ege sha$$ +e s(+Cec) )o a*e!*e!), a$)era)io! or re"ea$ +, Co!gress as a! %he! )he
co**o! goo so re'(ires.
3=
3! )his case, /AGC6R %as gra!)e a #ra!chise )o o"era)e a! *ai!)ai! ga*+$i!g casi!os, c$(+s a! o)her recrea)io!
or a*(se*e!) "$aces, s"or)s, ga*i!g "oo$s, i(e., +as2e)+a$$, #oo)+a$$, $o))eries, e)c., %he)her o! $a! or sea, %i)hi! )he
)erri)oria$ C(risic)io! o# )he Re"(+$ic o# )he /hi$i""i!es.
38
-!er Sec)io! 11, Ar)ic$e I33 o# )he Co!s)i)()io!, /AGC6RFs
#ra!chise is s(+Cec) )o a*e!*e!), a$)era)io! or re"ea$ +, Co!gress s(ch as )he a*e!*e!) (!er Sec)io! 1 o# R.A.
No. 9377. 0e!ce, )he "ro&isio! i! Sec)io! 1 o# R.A. No. 9337, a*e!i!g Sec)io! 27 :c< o# R.A. No. 8929 +,
%i)hra%i!g )he eDe*")io! o# /AGC6R #ro* cor"ora)e i!co*e )aD, %hich *a, a##ec) a!, +e!e#i)s )o /AGC6RFs
)ra!sac)io!s %i)h "ri&a)e "ar)ies, is !o) &io$a)i&e o# )he !o!-i*"air*e!) c$a(se o# )he Co!s)i)()io!.
A!e!) )he &a$ii), o# RR No. 18-200=, )he Co(r) ho$s )ha) )he "ro&isio! s(+Cec)i!g /AGC6R )o 10Z >AT is i!&a$i #or
+ei!g co!)rar, )o R.A. No. 9337. No%here i! R.A. No. 9337 is i) "ro&ie )ha) "e)i)io!er ca! +e s(+Cec)e )o >AT. R.A.
No. 9337 is c$ear o!$, as )o )he re*o&a$ o# "e)i)io!erKs eDe*")io! #ro* )he "a,*e!) o# cor"ora)e i!co*e )aD, %hich
%as a$rea, aresse a+o&e +, )his Co(r).
As "oi!)e o() +, )he 6SG, R.A. No. 9337 i)se$# eDe*")s "e)i)io!er #ro* >AT "(rs(a!) )o Sec)io! 7 :2< )hereo#, %hich
reas:
Sec. 7. Sec)io! 109 o# )he sa*e Coe, as a*e!e, is here+, #(r)her a*e!e )o rea as #o$$o%s:
Sec)io! 109. 9xempt Transactions. - :1< S(+Cec) )o )he "ro&isio!s o# S(+sec)io! :2< hereo#, )he #o$$o%i!g )ra!sac)io!s
sha$$ +e eDe*") #ro* )he &a$(e-ae )aD:
D D D D
:2< Tra!sac)io!s %hich are eDe*") (!er i!)er!a)io!a$ agree*e!)s )o %hich )he /hi$i""i!es is a sig!a)or, or 0nde*
s8ecia1 1aDs- eDce") /resie!)ia$ Decree No. =29.
37
/e)i)io!er is eDe*") #ro* )he "a,*e!) o# >AT, +eca(se /AGC6RFs char)er, /.D. No. 1889, is a s"ecia$ $a% )ha) gra!)s
"e)i)io!er eDe*")io! #ro* )aDes.
.oreo&er, )he eDe*")io! o# /AGC6R #ro* >AT is s(""or)e +, Sec)io! 8 o# R.A. No. 9337, %hich re)ai!e Sec)io!
108 :?< :3< o# R.A. No. 8929, )h(s:
TR.A. No. 9337U, S4C. 8. Sec)io! 108 o# )he sa*e Coe :R.A. No. 8929<, as a*e!e, is here+, #(r)her a*e!e )o
rea as #o$$o%s:
S4C. 108. >a$(e-Ae TaD o! Sa$e o# Ser&ices a! -se or Lease o# /ro"er)ies. Q
:A< Ra)e a! ?ase o# TaD. Q There sha$$ +e $e&ie, assesse a! co$$ec)e, a &a$(e-ae )aD e'(i&a$e!) )o )e!
"erce!) :10Z< o# gross recei")s eri&e #ro* )he sa$e or eDcha!ge o# ser&ices, i!c$(i!g )he (se or $ease o#
"ro"er)ies: D D D
D D D D
:?< Tra!sac)io!s S(+Cec) )o Vero /erce!) :0Z< Ra)e. Q The #o$$o%i!g ser&ices "er#or*e i! )he /hi$i""i!es +, >AT-
regis)ere "erso!s sha$$ +e s(+Cec) )o Gero "erce!) :0Z< ra)eP
D D D D
:3< Ser&ices re!ere )o "erso!s or e!)i)ies %hose eDe*")io! (!er s"ecia$ $a%s or i!)er!a)io!a$ agree*e!)s )o
%hich )he /hi$i""i!es is a sig!a)or, e##ec)i&e$, s(+Cec)s )he s(""$, o# s(ch ser&ices )o Gero "erce!) :0Z< ra)eP
D D D D
38
As "oi!)e o() +, "e)i)io!er, a$)ho(gh R.A. No. 9337 i!)ro(ce a*e!*e!)s )o Sec)io! 108 o# R.A. No. 8929 +,
i*"osi!g >AT o! o)her ser&ices !o) "re&io(s$, co&ere, i) i !o) a*e! )he "or)io! o# Sec)io! 108 :?< :3< )ha)
s(+Cec)s )o Gero "erce!) ra)e ser&ices "er#or*e +, >AT-regis)ere "erso!s )o "erso!s or e!)i)ies %hose eDe*")io!
(!er s"ecia$ $a%s or i!)er!a)io!a$ agree*e!)s )o %hich )he /hi$i""i!es is a sig!a)or, e##ec)i&e$, s(+Cec)s )he s(""$,
o# s(ch ser&ices )o 0Z ra)e.
/e)i)io!erKs eDe*")io! #ro* >AT (!er Sec)io! 108 :?< :3< o# R.A. No. 8929 has +ee! )horo(gh$, a! eD)e!si&e$,
isc(sse i! Commissioner of !nternal Revenue v( cesite (1$ilippines) 3otel Corporation(
39
Acesi)e %as )he o%!er
a! o"era)or o# )he 0o$ia, 3!! .a!i$a /a&i$io! 0o)e$. 3) $ease a "or)io! o# )he ho)e$Fs "re*ises )o /AGC6R. 3)
i!c(rre >AT a*o(!)i!g )o /30,1=2,892.02 #ro* i)s re!)a$ i!co*e a! sa$e o# #oo a! +e&erages )o /AGC6R #ro*
7a!(ar, 1998 )o A"ri$ 1997. Acesi)e )rie )o shi#) )he sai )aDes )o /AGC6R +, i!cor"ora)i!g i) i! )he a*o(!)
assesse )o /AGC6R. 0o%e&er, /AGC6R re#(se )o "a, )he )aDes +eca(se o# i)s )aD-eDe*") s)a)(s. /AGC6R "ai
o!$, )he a*o(!) (e )o Acesi)e *i!(s >AT i! )he s(* o# /30,1=2,892.02. Acesi)e "ai >AT i! )he a*o(!)
o# /30,1=2,892.02 )o )he Co**issio!er o# 3!)er!a$ Re&e!(e, #eari!g )he $ega$ co!se'(e!ces o# i)s !o!-"a,*e!). 3!
.a, 1998, Acesi)e so(gh) )he re#(! o# )he a*o(!) i) "ai as >AT o! )he gro(! )ha) i)s )ra!sac)io! %i)h /AGC6R
%as s(+Cec) )o Gero ra)e as i) %as re!ere )o a )aD-eDe*") e!)i),. The Co(r) r($e )ha) /AGC6R a! Acesi)e %ere
+o)h eDe*") #ro* "a,i!g >AT, )h(s:
D D D D
/AGC6R is eDe*") #ro* "a,*e!) o# i!irec) )aDes
3) is (!is"()e )ha) /.D. 1889, )he char)er crea)i!g /AGC6R, gra!)s )he $a))er a! eDe*")io! #ro* )he "a,*e!) o#
)aDes. Sec)io! 13 o# /.D. 1889 "er)i!e!)$, "ro&ies:
Sec. 13. 9xemptions. Q
D D D D
:2< !ncome and ot$er taxes. - :a< Fra!chise 0o$er: No )aD o# a!, 2i! or #or*, i!co*e or o)her%ise, as %e$$ as #ees,
charges or $e&ies o# %ha)e&er !a)(re, %he)her Na)io!a$ or Loca$, sha$$ +e assesse a! co$$ec)e (!er )his
Fra!chise #ro* )he Cor"ora)io!P !or sha$$ a!, #or* o# )aD or charge a))ach i! a!, %a, )o )he ear!i!gs o# )he
Cor"ora)io!, eDce") a Fra!chise TaD o# #i&e :=Z< "erce!) o# )he gross re&e!(e or ear!i!gs eri&e +, )he Cor"ora)io!
#ro* i)s o"era)io! (!er )his Fra!chise. S(ch )aD sha$$ +e (e a! "a,a+$e '(ar)er$, )o )he Na)io!a$ Go&er!*e!) a!
sha$$ +e i! $ie( o# a$$ 2i!s o# )aDes, $e&ies, #ees or assess*e!)s o# a!, 2i!, !a)(re or escri")io!, $e&ie, es)a+$ishe
or co$$ec)e +, a!, *(!ici"a$, "ro&i!cia$, or !a)io!a$ go&er!*e!) a()hori),.
:+< 7t$ers: The eDe*")io!s herei! gra!)e #or ear!i!gs eri&e #ro* )he o"era)io!s co!(c)e (!er )he #ra!chise
s"eci#ica$$, #ro* )he "a,*e!) o# a!, )aD, i!co*e or o)her%ise, as %e$$ as a!, #or* o# charges, #ees or $e&ies, sha$$
i!(re )o )he +e!e#i) o# a! eD)e! )o cor"ora)io!:s<, associa)io!:s<, age!c,:ies<, or i!i&i(a$:s< %i)h %ho* )he
Cor"ora)io! or o"era)or has a!, co!)rac)(a$ re$a)io!shi" i! co!!ec)io! %i)h )he o"era)io!s o# )he casi!o:s< a()horiGe
)o +e co!(c)e (!er )his Fra!chise a! )o )hose recei&i!g co*"e!sa)io! or o)her re*(!era)io! #ro* )he
Cor"ora)io! or o"era)or as a res($) o# esse!)ia$ #aci$i)ies #(r!ishe a!@or )ech!ica$ ser&ices re!ere )o )he
Cor"ora)io! or o"era)or.
/e)i)io!er co!)e!s )ha) )he a+o&e )aD eDe*")io! re#ers o!$, )o /AGC6RKs irec) )aD $ia+i$i), a! !o) )o i!irec) )aDes,
$i2e )he >AT.
5e isagree.
A c$ose scr()i!, o# )he a+o&e "ro&isos c$ear$, gi&es /AGC6R a +$a!2e) eDe*")io! )o )aDes %i)h !o is)i!c)io! o!
%he)her )he )aDes are irec) or i!irec). 5e are o!e %i)h )he CA r($i!g )ha) /AGC6R is a$so eDe*") #ro* i!irec)
)aDes, $i2e >AT, as #o$$o%s:
-!er )he a+o&e "ro&isio! TSec)io! 13 :2< :+< o# /.D. 1889U, )he )er* LCor"ora)io!L or o"era)or re#ers )o /AGC6R.
A$)ho(gh )he $a% oes !o) s"eci#ica$$, *e!)io! /AGC6RKs eDe*")io! #ro* i!irec) )aDes, /AGC6R is (!o(+)e$,
eDe*") #ro* s(ch )aDes +eca(se )he $a% eDe*")s #ro* )aDes "erso!s or e!)i)ies co!)rac)i!g %i)h /AGC6R i! casi!o
o"era)io!s. A$)ho(gh, i##ere!)$, %ore, )he "ro&isio! c$ear$, eDe*")s /AGC6R #ro* i!irec) )aDes. 3! #ac), i) goes
o!e s)e" #(r)her +, gra!)i!g )aD eDe*") s)a)(s )o "erso!s ea$i!g %i)h /AGC6R i! casi!o o"era)io!s. The
(!*is)a2a+$e co!c$(sio! is )ha) /AGC6R is !o) $ia+$e #or )he /30, 1=2,892.02 >AT a! !ei)her is Acesi)e as )he $a))er
is e##ec)i&e$, s(+Cec) )o Gero "erce!) ra)e (!er Sec. 108 ? :3<, R.A. 8929. :4*"hasis s(""$ie.<
3!ee, +, eD)e!i!g )he eDe*")io! )o e!)i)ies or i!i&i(a$s ea$i!g %i)h /AGC6R, )he $egis$a)(re c$ear$, gra!)e
eDe*")io! a$so #ro* i!irec) )aDes. 3) *(s) +e !o)e )ha) )he i!irec) )aD o# >AT, as i! )he i!s)a!) case, ca! +e shi#)e
or "asse )o )he +(,er, )ra!s#eree, or $essee o# )he goos, "ro"er)ies, or ser&ices s(+Cec) )o >AT. Th(s, )> eEtending
t;e taE eEe(8tion to entities o* individ0a1s dea1ing Dit; 4AGCOR in casino o8e*ations- it is eEe(8ting
4AGCOR :*o( )eing 1ia)1e to indi*ect taEes!
T;e (anne* o: c;a*ging AT does not (ake 4AGCOR 1ia)1e to said taE!
3) is )r(e )ha) >AT ca! ei)her +e i!cor"ora)e i! )he &a$(e o# )he goos, "ro"er)ies, or ser&ices so$ or $ease, i! %hich
case i) is co*"()e as 1@11 o# s(ch &a$(e, or charge as a! ai)io!a$ 10Z )o )he &a$(e. >eri$,, )he se$$er or $essor
has )he o")io! )o #o$$o% ei)her %a, i! chargi!g i)s c$ie!)s a! c(s)o*er. 3! )he i!s)a!) case, Acesi)e #o$$o%e )he $a))er
*e)ho, )ha) is, chargi!g a! ai)io!a$ 10Z o# )he gross sa$es a! re!)a$s. ?e )ha) as i) *a,, )he (se o# ei)her
*e)ho, a! i! "ar)ic($ar, )he #irs) *e)ho, oes !o) e!igra)e )he #ac) )ha) /AGC6R is eDe*") #ro* a! i!irec) )aD,
$i2e >AT.
>AT eDe*")io! eD)e!s )o Acesi)e
Th(s, %hi$e i) %as "ro"er #or /AGC6R !o) )o "a, )he 10Z >AT charge +, Acesi)e, )he $a))er is !o) $ia+$e #or )he
"a,*e!) o# i) as i) is eDe*") i! )his "ar)ic($ar )ra!sac)io! +, o"era)io! o# $a% )o "a, )he i!irec) )aD. S(ch eDe*")io!
#a$$s %i)hi! )he #or*er Sec)io! 102 :+< :3< o# )he 1977 TaD Coe, as a*e!e :!o% Sec. 108 T+U T3U o# R.A. 8929<,
%hich "ro&ies:
Sec)io! 102. ;alueDadded tax on sale of services(- :a< Ra)e a! +ase o# )aD - There sha$$ +e $e&ie, assesse a!
co$$ec)e, a &a$(e-ae )aD e'(i&a$e!) )o 10Z o# gross recei")s eri&e +, a!, "erso! e!gage i! )he sa$e o#
ser&ices D D DP /ro&ie, )ha) )he #o$$o%i!g ser&ices "er#or*e i! )he /hi$i""i!es +, >AT regis)ere "erso!s sha$$ +e
s(+Cec) )o 0Z.
D D D D
:3< Ser&ices re!ere )o "erso!s or e!)i)ies %hose eDe*")io! (!er s"ecia$ $a%s or i!)er!a)io!a$ agree*e!)s )o
%hich )he /hi$i""i!es is a sig!a)or, e##ec)i&e$, s(+Cec)s )he s(""$, o# s(ch ser&ices )o Gero :0Z< ra)e :e*"hasis
s(""$ie<.
The ra)io!a$e #or )he eDe*")io! #ro* i!irec) )aDes "ro&ie #or i! /.D. 1889 a! )he eD)e!sio! o# s(ch eDe*")io! )o
e!)i)ies or i!i&i(a$s ea$i!g %i)h /AGC6R i! casi!o o"era)io!s are +es) e$(cia)e #ro* )he 1987 case
o#Commissioner of !nternal Revenue &. &o$n /otamco H Sons, !nc(, %here )he a+so$()e )aD eDe*")io! o# )he 5or$
0ea$)h 6rga!iGa)io! :506< ("o! a! i!)er!a)io!a$ agree*e!) %as ("he$. 5e he$ i! sai case )ha) )he eDe*")io! o#
co!)rac)ee 506 sho($ +e i*"$e*e!)e )o *ea! )ha) )he e!)i), or "erso! eDe*") is )he co!)rac)or i)se$# %ho
co!s)r(c)e )he +(i$i!g o%!e +, co!)rac)ee 506, a! s(ch oes !o) &io$a)e )he r($e )ha) )aD eDe*")io!s are
"erso!a$ +eca(se )he *a!i#es) i!)e!)io! o# )he agree*e!) is )o eDe*") )he co!)rac)or so )ha) !o co!)rac)orKs )aD *a,
+e shi#)e )o )he co!)rac)ee 506. Th(s, )he "ro&iso i! /.D. 1889, eD)e!i!g )he eDe*")io! )o e!)i)ies or i!i&i(a$s
ea$i!g %i)h /AGC6R i! casi!o o"era)io!s, is c$ear$, )o "roscri+e a!, i!irec) )aD, $i2e >AT, )ha) *a, +e shi#)e )o
/AGC6R.
90
A$)ho(gh )he +asis o# )he eDe*")io! o# /AGC6R a! Acesi)e #ro* >AT i! )he case o# The Co**issio!er o# 3!)er!a$
Re&e!(e &. Acesi)e :/hi$i""i!es< 0o)e$ Cor"ora)io! %as Sec)io! 102 :+< o# )he 1977 TaD Coe, as a*e!e, %hich
sec)io! %as re)ai!e as Sec)io! 108 :?< :3< i! R.A. No. 8929,
91
i) is s)i$$ a""$ica+$e )o )his case, si!ce )he "ro&isio!
re$ie ("o! has +ee! re)ai!e i! R.A. No. 9337.
92
?avvp$i?
3) is se))$e r($e )ha) i! case o# iscre"a!c, +e)%ee! )he +asic $a% a! a r($e or reg($a)io! iss(e )o i*"$e*e!) sai
$a%, )he +asic $a% "re&ai$s, +eca(se )he sai r($e or reg($a)io! ca!!o) go +e,o! )he )er*s a! "ro&isio!s o# )he
+asic $a%.
93
RR No. 18-200=, )here#ore, ca!!o) go +e,o! )he "ro&isio!s o# R.A. No. 9337. Si!ce /AGC6R is eDe*")
#ro* >AT (!er R.A. No. 9337, )he ?3R eDceee i)s a()hori), i! s(+Cec)i!g /AGC6R )o 10Z >AT (!er RR No. 18-
200=P he!ce, )he sai reg($a)or, "ro&isio! is here+, !($$i#ie.
CHEREFORE- )he "e)i)io! is /ARTLB GRANT4D. Sec)io! 1 o# Re"(+$ic Ac) No. 9337, a*e!i!g Sec)io! 27 :c< o#
)he Na)io!a$ 3!)er!a$ Re&e!(e Coe o# 1997, +, eDc$(i!g "e)i)io!er /hi$i""i!e A*(se*e!) a! Ga*i!g Cor"ora)io!
#ro* )he e!(*era)io! o# go&er!*e!)-o%!e a! co!)ro$$e cor"ora)io!s eDe*")e #ro* cor"ora)e i!co*e )aD is &a$i
a! co!s)i)()io!a$, %hi$e ?3R Re&e!(e Reg($a)io!s No. 18-200= i!so#ar as i) s(+Cec)s /AGC6R )o 10Z >AT is !($$
a! &oi #or +ei!g co!)rar, )o )he Na)io!a$ 3!)er!a$ Re&e!(e Coe o# 1997, as a*e!e +, Re"(+$ic Ac) No. 9337.
No cos)s.
S6 6RD4R4D.
Section 1+: Fi1i8ino Fi*st 4o1ic>
1. Ta!aa & A!gara
Sec! 1<! Co*8o*ations
1! NDC v 49
National Development Company and New Agrix vs. Philippine Veterans Bank
(192 SCRA 257)
Facts:
Agrix Marketing executed in favor of respondent a real estate mortgage over three
parcels of land. Agrix later on went bankrupt. In order to rehabilitate the company,
then President Marcos issued Presidential Decree 1717 which mandated, among
others, the extinguishing of all the mortgages and liens attaching to the property of
Agrix, and creating a Claims Committee to process claims against the company to be
administered mainly by NDC. Respondent thereon fled a claim against the company
before the Committee. Petitioners however fled a petition with the RTC of Calamba,
Laguna invoking the provision of the law which cancels all mortgage liens against it.
Respondent took measures to extrajudicially foreclose which the petitioners opposed
by fling another case in the same court. These cases were consolidated. The RTC held
in favor of the respondent on the ground of unconstitutionality of the decree; mainly
violation of the separation of powers, impairment of obligation of contracts, and
violation of the equal protection clause. Hence this petition.
Issue:
• Is the respondent estopped from questioning the constitutionality of the law
since they frst abided by it by fling a claim with the Committee?
• Is PD 1717 unconstitutional?
Ruling:
On the issue of estoppel, the Court held that it could not apply in the present
case since when the respondent fled his claim, President Marcos was the supreme
ruler of the country and they could not question his acts even before the courts
because of his absolute power over all government institutions when he was the
President.
The creation of New Agrix as mandated by the decree was also ruled as
unconstitutional since it violated the prohibition that the Batasang Pambansa
(Congress) shall not provide for the formation, organization, or regulation of private
corporations unless such corporations are owned or controlled by the government.
PD 1717 was held as unconstitutional on the other grounds that it was an
invalid exercise of police power, It had no lawful subject and no lawful method. It
violated due process by extinguishing all mortgages and liens and interests which are
property rights unjustly taken. It also violated the equal protection clause by lumping
together all secured and unsecured creditors. It also impaired the obligation of
contracts, even though it only involved purely private interests.
Sec. 17 Temporary Take Over
DEMOSTHENES P. AGAN) JR vs. P*%"%11%'! I't!&'at%('a" A%& T!&+%'a"s C(.) I'c.
/PIATCO0
Facts:
#e.ore this ourt are the separate Fotions .or Reconsideration 2led b/ respondent
Philippine $nternational 5ir Ter)inals o., $nc. (P$5T8).
#rieI/, the proceedin,s. 8n 8ctober 5, 1BB4, 5sia?s 6)er,in, Dra,on orp. (56D)
sub)itted an unsolicited proposal to the Philippine Go0ern)ent throu,h the
Depart)ent o. Transportation and o))unication (D8T) and Fanila $nternational
5irport 5uthorit/ (F$55) .or the construction and de0elop)ent o. the N5$5 $PT $$$ under a
build'operate'and'trans.er arran,e)ent pursuant to R.5. No. 6B5A, as a)ended b/ R.5.
No. AA1; (#8T 3a").
4
$n accordance "ith the #8T 3a" and its $)ple)entin, Rules and
Re,ulations ($)ple)entin, Rules), the D8T@F$55 in0ited the public .or sub)ission o.
co)petiti0e and co)parati0e proposals to the unsolicited proposal o. 56D. 8n
!epte)ber %&, 1BB6 a consortiu) co)posed o. the People?s 5ir ar,o and -arehousin,
o., $nc. (Paircar,o), Phil. 5ir and Grounds !er0ices, $nc. (P5G!) and !ecurit/ #an< orp.
(!ecurit/ #an<) (collecti0el/, Paircar,o onsortiu)), sub)itted their co)petiti0e
proposal to the Pre(uali2cation #ids and 5"ards o))ittee (P#5).
5.ter 2ndin, that the Paircar,o onsortiu) sub)itted a bid superior to the unsolicited
proposal o. 56D and a.ter .ailure b/ 56D to )atch the said bid, the D8T issued the
notice o. a"ard .or the N5$5 $PT $$$ pro+ect to the Paircar,o onsortiu), "hich later
or,aniDed into herein respondent P$5T8. 1ence, on Pul/ 1%, 1BBA, the Go0ern)ent,
throu,h then D8T !ecretar/ 5rturo T. 6nrile, and P$5T8, throu,h its President, 1enr/
T. Go, si,ned the Ooncession 5,ree)ent .or the #uild'8perate'and'Trans.er
5rran,e)ent o. the Nino/ 5(uino $nternational 5irport Passen,er Ter)inal $$$O (1BBA
oncession 5,ree)ent). 8n No0e)ber %6, 1BB;, the 1BBA oncession 5,ree)ent "as
superseded b/ the 5)ended and Restated oncession 5,ree)ent (5R5) containin,
certain re0isions and )odi2cations .ro) the ori,inal contract. 5 series o. supple)ental
a,ree)ents "as also entered into b/ the Go0ern)ent and P$5T8. The Cirst !upple)ent
"as si,ned on 5u,ust %A, 1BBB, the !econd !upple)ent on !epte)ber 4, %&&&, and the
Third !upple)ent on Pune %%, %&&1 (collecti0el/, !upple)ents) (the 1BBA oncession
5,ree)ent, 5R5 and the !upple)ents collecti0el/ re.erred to as the P$5T8
ontracts).
8n !epte)ber 1A, %&&%, 0arious petitions "ere 2led be.ore this C(&t t( a''" t*!
1<<9 C('c!ss%(' A4&!!+!'t) t*! ARCA a'# t*! S11"!+!'ts and to prohibit the
public respondents D8T and F$55 .ro) i)ple)entin, the).
$n a decision dated Fa/ 5, %&&3, this ourt ,ranted the said petitions and declared the
1BBA oncession 5,ree)ent, the 5R5 and the !upple)ents null and 0oid.
Respondent P$5T8, respondent'on,ress)en and respondents'inter0enors no" see<
the re0ersal o. the Fa/ 5, %&&3 decision and pra/ that the petitions be dis)issed.
A. L!4a" Sta'#%'4
Respondent P$5T8 stands pat "ith its ar,u)ent that petitioners lac< le,al personalit/
to 2le the cases at bar as the/ are not real parties in interest "ho are bound principall/
or subsidiaril/ to the P$5T8 ontracts. Curther, respondent P$5T8 contends that
petitioners .ailed to sho" an/ le,all/ de)andable or en.orceable ri,ht to +usti./ their
standin, to 2le the cases at bar.
These ar,u)ents are not di9cult to deIect. The deter)ination o. "hether a person )a/
institute an action or beco)e a part/ to a suit brin,s to .ore the concepts o. real part/ in
interest, capacit/ to sue and standin, to sue. To the le,all/ discernin,, these three
concepts are di:erent althou,h co))onl/ directed to"ards ensurin, that onl/ certain
parties can )aintain an action.
;
5s de2ned in the Rules o. ourt, a real part/ in interest
is the part/ "ho stands to be bene2ted or in+ured b/ the +ud,)ent in the suit or the
part/ entitled to the a0ails o. the suit.
B
apacit/ to sue deals "ith a situation "here a
person "ho )a/ ha0e a cause o. action is dis(uali2ed .ro) brin,in, a suit under
applicable la" or is inco)petent to brin, a suit or is under so)e le,al disabilit/ that
"ould pre0ent hi) .ro) )aintainin, an action unless represented b/ a ,uardian ad
lite). 3e,al standin, is rele0ant in the real) o. public la". $n certain instances, courts
ha0e allo"ed pri0ate parties to institute actions challen,in, the 0alidit/ o.
,o0ern)ental action .or 0iolation o. pri0ate ri,hts or constitutional principles.
1&
$n these
cases, courts appl/ the doctrine o. le,al standin, b/ deter)inin, "hether the part/ has
a #%&!ct a'# 1!&s('a" %'t!&!st %' t*! c('t&(v!&s= a'# 2*!t*!& sc* 1a&t= *as
ssta%'!# (& %s %' %++%'!'t #a'4!& (- ssta%'%'4 a' %'A&= as a &!s"t (- t*!
act c(+1"a%'!# (-) a standard "hich is distinct .ro) the concept o. real part/ in
interest.
11
Feasured b/ this /ardstic<, the application o. the doctrine on le,al standin,
necessaril/ in0ol0es a preli)inar/ consideration o. the )erits o. the case and is not
purel/ a procedural issue.
1%
onsiderin, the nature o. the contro0ers/ and the issues raised in the cases at
bar, this ourt a9r)s its rulin, that the petitioners ha0e the re(uisite le,al
standin,. The petitioners in G.R. Nos. 155&&1 and 155661 are e)plo/ees o.
ser0ice pro0iders operatin, at the e7istin, international airports and e)plo/ees
o. F$55 "hile petitioners'inter0enors are ser0ice pro0iders "ith e7istin, contracts
"ith F$55 and the/ "ill all sustain direct in+ur/ upon the i)ple)entation o. the
P$5T8 ontracts. The 1BBA oncession 5,ree)ent and the 5R5 both pro0ide
that upon the co))ence)ent o. operations at the N5$5 $PT $$$, N5$5 Passen,er
Ter)inals $ and $$ "ill cease to be used as international passen,er ter)inals.
13

Curther, the 5R5 pro0idesG (d) Cor the purpose o. an orderl/ transition, F$55
shall not rene" an/ e7pired concession a,ree)ent relati0e to an/ ser0ice or
operation currentl/ bein, underta<en at the Nino/ 5(uino $nternational 5irport
Passen,er Ter)inal $, or e7tend an/ concession a,ree)ent "hich )a/ e7pire
subse(uent hereto, e7cept to the e7tent that the continuation o. the e7istin,
ser0ices and operations shall lapse on or be.ore the $n'!er0ice Date.
14
#e/ond iota o. doubt, the i)ple)entation o. the P$5T8 ontracts, "hich the petitioners
and petitioners'inter0enors denounce as unconstitutional and ille,al, "ould depri0e
the) o. their sources o. li0elihood. 4nder settled +urisprudence, one*s e)plo/)ent,
pro.ession, trade, or callin, is a propert/ ri,ht and is protected .ro) "ron,.ul
inter.erence.
15
$t is also sel. e0ident that the petitionin, ser0ice pro0iders stand in
i))inent dan,er o. losin, le,iti)ate business in0est)ents in the e0ent the P$5T8
ontracts are upheld.
80er and abo0e all these, constitutional and other le,al issues "ith .ar'reachin,
econo)ic and social i)plications are e)bedded in the cases at bar, hence, this ourt
liberall/ ,ranted le,al standin, to the petitionin, )e)bers o. the 1ouse o.
Representati0es. Cirst, at sta<e is the build'operate'andLtrans.er contract o. the
countr/?s pre)ier international airport "ith a pro+ected capacit/ o. 1& )illion
passen,ers a /ear. !econd, the hu,e a)ount o. in0est)ent to co)plete the pro+ect is
esti)ated to be P13,&&&,&&&,&&&.&&. Third, the pri)ar/ issues posed in the cases at bar
de)and a discussion and interpretation o. the onstitution, the #8T 3a" and its
i)ple)entin, rules "hich ha0e not been passed upon b/ this ourt in pre0ious cases.
The/ can chart the .uture inIo" o. in0est)ent under the #8T 3a".
#e.ore "ritin, 2nis to the issue o. le,al standin,, the ourt notes the bid o. ne" parties
to participate in the cases at bar as respondents'inter0enors, na)el/, (1) the P$5T8
6)plo/ees and (%) NFT5$ (collecti0el/, the Ne" Respondents'$nter0enors). 5.ter the
ourt?s Decision, the Ne" Respondents'$nter0enors 2led separate Fotions .or
Reconsideration'$n'$nter0ention alle,in, pre+udice and direct in+ur/. P$5T8 e)plo/ees
clai) that Othe/ ha0e a direct and personal interest Vin the contro0ers/W... since the/
stand to lose their +obs should the ,o0ern)ent?s contract "ith P$5T8 be declared null
and 0oid.O
16
NFT5$, on the other hand, represents itsel. as a corporation co)posed o.
responsible ta7'pa/in, Cilipino citiDens "ith the ob+ecti0e o. Oprotectin, and sustainin,
the ri,hts o. its )e)bers to ci0il liberties, decent li0elihood, opportunities .or social
ad0ance)ent, and to a ,ood, conscientious and honest ,o0ern)ent.O
1A
The Rules o. ourt ,o0ern the ti)e o. 2lin, a Fotion to $nter0ene. !ection %, Rule 1B
pro0ides that a Fotion to $nter0ene should be 2led Obe.ore rendition o. +ud,)ent....O The
Ne" Respondents'$nter0enors 2led their separate )otions a.ter a decision has been
pro)ul,ated in the present cases. The/ ha0e not o:ered an/ "orth/ e7planation to
+usti./ their late inter0ention. onse(uentl/, their Fotions .or Reconsideration'$n'
$nter0ention are denied .or the rules cannot be rela7ed to a"ait liti,ants "ho sleep on
their ri,hts. $n an/ e0ent, a side,lance at these late )otions "ill sho" that the/ hoist no
no0el ar,u)ents.
A. T!+1(&a&= taB!(v!& (- $s%'!ss aC!ct!# 2%t* 1$"%c %'t!&!st %' t%+!s (-
'at%('a" !+!&4!'c=
!ection 1A, 5rticle H$$ o. the 1B;A onstitution ,rants the !tate in ti)es o. national
e)er,enc/ the ri,ht to te)poraril/ ta<e o0er the operation o. an/ business a:ected
"ith public interest. This ri,ht is an e7ercise o. police po"er "hich is one o. the inherent
po"ers o. the !tate.
Police po"er has been de2ned as the Ostate authorit/ to enact le,islation that )a/
inter.ere "ith personal libert/ or propert/ in order to pro)ote the ,eneral "el.are.O
54
$t
consists o. t"o essential ele)ents. Cirst, it is an i)position o. restraint upon libert/ or
propert/. !econd, the po"er is e7ercised .or the bene2t o. the co))on ,ood. $ts
de2nition in elastic ter)s underscores its all'enco)passin, and co)prehensi0e
e)brace.
55
$t is and still is the O)ost essential, insistent, and illi)itableO
56
o. the !tate?s
po"ers. $t is .a)iliar <no"led,e that '"%B! t*! 1(2!& (- !+%'!'t #(+a%') 1("%c!
1(2!& %s !D!&c%s!# 2%t*(t 1&(v%s%(' -(& Ast c(+1!'sat%(' .or its para)ount
consideration is public "el.are.
5A
$t is also settled that public interest on the occasion o. a national e)er,enc/ is the
pri)ar/ consideration "hen the ,o0ern)ent decides to te)poraril/ ta<e o0er or direct
the operation o. a public utilit/ or a business a:ected "ith public interest. The nature
and e7tent o. the e)er,enc/ is the )easure o. the duration o. the ta<eo0er as "ell as
the ter)s thereo.. $t is the !tate that prescribes such reasonable ter)s "hich "ill ,uide
the i)ple)entation o. the te)porar/ ta<eo0er as dictated b/ the e7i,encies o. the ti)e.
5s "e ruled in our Decision, this po"er o. the !tate can not be ne,ated b/ an/ part/ nor
should its e7ercise be a source o. obli,ation .or the !tate.
!ection 5.1&(c), 5rticle Q o. the 5R5 pro0ides that respondent P$5T8 Oshall be entitled
to reasonable co)pensation .or the duration o. the te)porar/ ta<eo0er b/ GRP, "hich
co)pensation shall ta<e into account the reasonable cost .or the use o. the Ter)inal
and@or Ter)inal o)ple7.O
5;
$t clearl/ obli,ates the ,o0ern)ent in the e7ercise o. its
police po"er to co)pensate respondent P$5T8 and this obli,ation is o:ensi0e to the
onstitution. Police po"er can not be di)inished, let alone de.eated b/ an/ contract .or
its para)ount consideration is public "el.are and interest.
5B
5,ain, respondent P$5T8?s reliance on the case o. H!%&s (- S4%ta' v. C%t= (-
Ma'#a"=('4
6&
to +usti./ its clai) .or reasonable co)pensation .or the Go0ern)ent?s
te)porar/ ta<eo0er o. N5$5 $PT $$$ in ti)es o. national e)er,enc/ is erroneous. -hat
"as in0ol0ed in H!%&s (- S4%ta' is the e7ercise o. the state?s po"er o. e)inent
do)ain and not o. police po"er, hence, +ust co)pensation "as a"arded. The cases at
bar "ill not in0ol0e the e7ercise o. the po"er o. e)inent do)ain.
B. M('(1("=
!ection 1B, 5rticle H$$ o. the 1B;A onstitution )andates that the !tate prohibit or
re,ulate )onopolies "hen public interest so re(uires. Fonopolies are not per se
prohibited. Gi0en its susceptibilit/ to abuse, ho"e0er, the !tate has the bounden dut/ to
re,ulate )onopolies to protect public interest. !uch re,ulation )a/ be called .or,
especiall/ in sensiti0e areas such as the operation o. the countr/?s pre)ier international
airport, considerin, the public interest at sta<e.
#/ 0irtue o. the P$5T8 contracts, N5$5 $PT $$$ "ould be the onl/ international passen,er
airport operatin, in the $sland o. 3uDon, "ith the e7ception o. those alread/ operatin, in
!ubic #a/ Creeport !pecial 6cono)ic Xone (O!#C!6XO), lar< !pecial 6cono)ic Xone
(O!6XO) and in 3aoa, it/. 4ndeniabl/, the contracts "ould create a )onopol/ in the
operation o. an international co))ercial passen,er airport at the N5$5 in .a0or o.
P$5T8.
The ,rant to respondent P$5T8 o. the e7clusi0e ri,ht to operate N5$5 $PT $$$ should not
e7e)pt it .ro) re,ulation b/ the ,o0ern)ent. The ,o0ern)ent has the ri,ht, indeed the
dut/, to protect the interest o. the public. Part o. this dut/ is to assure that respondent
P$5T8?s e7ercise o. its ri,ht does not 0iolate the le,al ri,hts o. third parties. -e
reiterate our rulin, that "hile the ser0ice pro0iders presentl/ operatin, at N5$5
Ter)inals $ and $$ do not ha0e the ri,ht to de)and .or the rene"al or e7tension o. their
contracts to continue their ser0ices in N5$5 $PT $$$, those "ho ha0e subsistin, contracts
be/ond the $n'!er0ice Date o. N5$5 $PT $$$ can not be arbitraril/ or unreasonabl/ treated.
Cinall/, the Respondent on,ress)en assert that at least t"o (%) co))ittee reports b/
the 1ouse o. Representati0es .ound the P$5T8 contracts 0alid and contend that this
ourt, b/ ta<in, co,niDance o. the cases at bar, re0ie"ed an action o. a co'e(ual bod/.
61
The/ insist that the ourt )ust respect the 2ndin,s o. the said co))ittees o. the 1ouse
o. Representati0es.
6%
-ith due respect, "e cannot subscribe to their sub)ission. There
is a .unda)ental di:erence bet"een a case in court and an in0esti,ation o. a
con,ressional co))ittee. The purpose o. a +udicial proceedin, is to settle the dispute in
contro0ers/ b/ ad+udicatin, the le,al ri,hts and obli,ations o. the parties to the case.
8n the other hand, a con,ressional in0esti,ation is conducted in aid o. le,islation.
63
$ts
ai) is to assist and reco))end to the le,islature a possible action that the bod/ )a/
ta<e "ith re,ard to a particular issue, speci2call/ as to "hether or not to enact a ne"
la" or a)end an e7istin, one. onse(uentl/, this ourt cannot treat the 2ndin,s in a
con,ressional co))ittee report as bindin, because the .acts elicited in con,ressional
hearin,s are not sub+ect to the ri,ors o. the Rules o. ourt on ad)issibilit/ o. e0idence.
The ourt in assu)in, +urisdiction o0er the petitions at bar si)pl/ per.or)ed its
constitutional dut/ as the arbiter o. le,al disputes properl/ brou,ht be.ore it, especiall/
in this instance "hen public interest re(uires nothin, less.
%. Da0id 0s F5capa,al'5rro/o
Da0id 0s. 5rro/o G.R. No. 1A13B6 Fa/ 3, %&&6
0acts o$ the case2
During the celebration of People Power I, President Arroyo issued Presidential Proclamation 1017 (PP 1017 for brevity declaring a
state of national emergency! "he President also issued #eneral $rder (#!$! %o! & implementing PP 1017!
"he President stated that over the past months, elements in political opposition have conspired with e'treme left represented by
%D() **P) %PA and military adventurists, which caused her to declare such order! "he President considered aims to oust the
President and ta+e) over reigns of government as clear and present danger!
$n ,arch -, President Arroyo lifted PP 1017!
.olicitor #eneral argued that the basis of declaring PP 1017 was that the intent of the *onstitution is to give full discretionary powers
to the President in determining the necessity of calling out the A(P!
/owever despite the contentions of the .olicitor #eneral, the ,agdalo group indicted the $a+wood mutiny and called to wear red
bands on their left arms to show disgust!
At the same time $plan /ac+le I was discovered, which constitutes plans of bombings and attac+s on P,A Alumni /omecoming in
0aguio, the same event where the President was invited! "he ne't morning after the alumni homecoming celebration, a bomb was
found inside the campus!
P%P *hief Arturo 1omibao also intercepted information that P%P) .A( members are planning to defect from the administration,
while on the same view *ongressman Peping *o2uanco plotted moves to bring down the Arroyo Administration!
/uge number of soldiers 2oined the rallies to provide critical mass and armed component to Anti) Arroyo protests!
0ombings of telephone communication towers and cell sites in 0ulacaan and 0ataan was also considered as an additional factual
basis after the issuance of PP 1017 and #$ &!
0ecause of these incidental series of events which clearly presents a critical situation, President Arroyo cancelled all activities related
to 3D.A People Power I! ,i+e Arroyo, then 3'ecutive .ecretary, announced that warrantless arrest and ta+eover of facilities can be
implemented!
.ucceeding this announcement was the arrest of 4andy David, a (ilipino 2ournalist and 5P professor due to a mista+e of fact that he
was actually involved in the street rallies! .ei6ure of Daily "ribune, ,alaya and Abante)) all local news publication, too+ place
which, according to the P%P, was meant to show a strong presence to tell the media outlets not to connive or do anything that would
help rebels in bringing down the government! Police also arrested *ongressman *rispin 0eltran, who then represented the
Ana+pawis Party!
ssue2
7hether or not the issuance of Presidential Proclamation PP 1017 is unconstitutional8 7hether or not the arrest of 4andy David and
the sei6ure of Daily "ribune et! al!, is unconstitutional8
*uling o$ the court2
4espondents claim that such petition is moot and academic based on the issuance of PP 1017, but the *ourt re2ects such contention!
A moot and academic case is one that ceases to present a 2usticiable controversy! In this case, the *ourt is convinced that the
President was 2ustified in issuing PP 1017 which calls for military aid!
,ost people then e9uate it to martial law, but such case is different wherein the basis then was the 1:7- *onstitution! 5nder the
present 1:;7 *onstitution, the President may summon armed forces to aid him in supporting lawless violence!
"he President<s declaration of state rebellion was merely an act declaring a status or conduction of a public moment of interest! .tate
of national emergency, however, is the prerogative of the President! /er e'ercise of emergency powers such as the ta+ing over of
privately owned utility re9uires delegation from the *ongress, which is entirely different from the martial law!
As to the sei6ure of the Daily "ribune and the arrest of 4andy David, the *ourt considers those actions unlawful based on the fact
that it violates the constitutional mandate of freedom of e'pression!
Ra!o$# S. Da&i &. G$oria .aca"aga$-Arro,o, G.R. No. 171398, .a, 3, 2008 :a!
o)her co!so$ia)e cases<
D E C / S / O N
SANDOAL#G6T/ERRE?- J.:
/! THE FACTS
6! Fe+r(ar, 29, 2008, as )he Fi$i"i!o !a)io! ce$e+ra)e )he 20)h A!!i&ersar, o# )he 4DSA /eo"$e /o%er 3,
/resie!) Arro,o iss(e // 1017, i*"$e*e!)e +, G.6. No. =, ec$ari!g a s)a)e o# !a)io!a$ e*erge!c,, )h(s:
NOC- THEREFORE, 3, G$oria .aca"aga$-Arro,o, /resie!) o# )he Re"(+$ic o# )he /hi$i""i!es a!
Co**a!er-i!-Chie# o# )he Ar*e Forces o# )he /hi$i""i!es, +, &ir)(e o# )he "o%ers &es)e ("o! *e +,
Sec)io! 18, Ar)ic$e 7 o# )he /hi$i""i!e Co!s)i)()io! %hich s)a)es )ha): MThe /resie!). . . %he!e&er i)
+eco*es !ecessar,, . . . *a, ca$$ o() :)he< ar*e #orces )o "re&e!) or s(""ress. . .re+e$$io!. . .,N a! i!
*, ca"aci), as )heir Co**a!er-i!-Chie#, o here+, co**a! )he Ar*e Forces o# )he /hi$i""i!es, )o
*ai!)ai! $a% a! orer )hro(gho() )he /hi$i""i!es, "re&e!) or s(""ress a$$ #or*s o# $a%$ess &io$e!ce as
%e$$ as a!, ac) o# i!s(rrec)io! or re+e$$io! a! )o e!#orce o+eie!ce )o a$$ )he $a%s a! )o a$$ ecrees,
orers a! reg($a)io!s "ro*($ga)e +, *e "erso!a$$, or ("o! *, irec)io!P a! as "ro&ie i! Sec)io!
17, Ar)ic$e 12 o# )he Co!s)i)()io! o here+, ec$are a S)a)e o# Na)io!a$ 4*erge!c,.
3! )heir "rese!)a)io! o# )he #ac)(a$ +ases o# // 1017 a! G.6. No. =, res"o!e!)s s)a)e )ha) )he "roDi*a)e
ca(se +ehi! )he eDec()i&e iss(a!ces %as )he co!s"irac, a*o!g so*e *i$i)ar, o##icers, $e#)is) i!s(rge!)s o# )he Ne%
/eo"$eFs Ar*,, a! so*e *e*+ers o# )he "o$i)ica$ o""osi)io! i! a "$o) )o (!sea) or assassi!a)e /resie!)
Arro,o.

The, co!siere )he ai* )o o(s) or assassi!a)e )he /resie!) a! )a2e-o&er )he rei!s o# go&er!*e!) as a
c$ear a! "rese!) a!ger.
/e)i)io!ers Da&i a! L$a*as %ere arres)e %i)ho() %arra!)s o! Fe+r(ar, 29, 2008 o! )heir %a, )o 4DSA.
.ea!%hi$e, )he o##ices o# )he !e%s"a"er Dai$, Tri+(!e, %hich %as "ercei&e )o +e a!)i-Arro,o, %as searche %i)ho()
%arra!) a) a+o() 1:00 A... o! Fe+r(ar, 2=, 2008. SeiGe #ro* )he "re*ises A i! )he a+se!ce o# a!, o##icia$ o# )he
Dai$, Tri+(!e eDce") )he sec(ri), g(ar o# )he +(i$i!g A %ere se&era$ *a)eria$s #or "(+$ica)io!. The $a% e!#orcers, a
co*"osi)e )ea* o# /N/ a! AF/ o##icers, ci)e as +asis o# )he %arra!)$ess arres)s a! )he %arra!)$ess search a!
seiG(re %as /resie!)ia$ /roc$a*a)io! 1017 iss(e +, )he! /resie!) G$oria .aca"aga$-Arro,o i! )he eDercise o# her
co!s)i)()io!a$ "o%er )o ca$$ o() )he Ar*e Forces o# )he /hi$i""i!es )o "re&e!) or s(""ress $a%$ess &io$e!ce.
//! THE /SS6E
1. 5ere )he %arra!)$ess arres)s o# "e)i)io!ers Da&i, e) a$., *ae "(rs(a!) )o // 1017, &a$iR
2. 5as )he %arra!)$ess search a! seiG(re o! )he Dail% Tri"uneFs o##icesco!(c)e "(rs(a!) )o // 1017 &a$iR
///! THE R6L/NG
GT$e Court partiall% /RNT9D t$e petitions(H
/. #&, the arrant!ess arrests of petitioners David, et a!., made pursuant to PP /0/1, ere #&T
va!id.
TSUearches, seiG(res a! arres)s are no*(a11> (!reaso!a+$e (!$ess a()horiGe +, a &a$i$, iss(e search
%arra!) or %arra!) o# arres). Sec)io! =, R($e 113 o# )he Re&ise R($es o! Cri*i!a$ /roce(re "ro&ies T#or )he
#o$$o%i!g circ(*s)a!ces o# &a$i %arra!)$ess arres)sU:
Sec. =. Arrest ithout arrant2 hen !afu!( - A "eace o##icer or a "ri&a)e "erso! *a,, %i)ho()
a %arra!), arres) a "erso!:
:a< 5he!, i! his "rese!ce, )he "erso! )o +e arres)e has co**i))e, is ac)(a$$, co**i))i!g, or is a))e*")i!g
)o co**i) a! o##e!se.
:+< 5he! a! o##e!se has C(s) +ee! co**i))e a! he has "ro+a+$e ca(se )o +e$ie&e +ase o! "erso!a$
2!o%$ege o# #ac)s or circ(*s)a!ces )ha) )he "erso! )o +e arres)e has co**i))e i)P a!
D D D.
Nei)her o# )he T"ro&isio!s o! in flagrante !or ho) "(rs(i) %arra!)$ess arres)sU C(s)i#ies "e)i)io!er Da&iFs
%arra!)$ess arres). D(ri!g )he i!'(es) #or )he charges o# i!ci)i!g )o sei)io! a! &io$a)io! o# ?/ 880, a$$ )ha) )he
arres)i!g o##icers co($ i!&o2e %as )heir o+ser&a)io! )ha) so*e ra$$,is)s %ere %eari!g )-shir)s %i)h )he i!&ec)i&e =7ust
/loria Now>a! )heir erro!eo(s ass(*")io! )ha) "e)i)io!er Da&i %as )he $eaer o# )he ra$$,.Co!se'(e!)$,, )he 3!'(es)
/rosec()or orere his i**eia)e re$ease o! )he gro(! o# i!s(##icie!c, o# e&ie!ce. 0e !o)e )ha) "e)i)io!er Da&i
%as !o) %eari!g )he s(+Cec) )-shir) a! e&e! i# he %as %eari!g i), s(ch #ac) is i!s(##icie!) )o charge hi* %i)h i!ci)i!g )o
sei)io!.
3. #&, the arrant!ess sear%h and sei4ure on the Dai!y Tribune,s offi%es%ondu%ted pursuant to PP
/0/1 as #&T va!id.
TTUhe search Ta! seiG(re i! )he Dai$, Tri+(!e "re*isesU is i$$ega$. R($e 128 o# The Re&ise R($es o!
Cri*i!a$ /roce(re $a,s o%! )he s)e"s i! )he co!(c) o# search a! seiG(re. Sec)io! 9 re'(ires )ha) a search
%arra!) +e iss(e ("o! "ro+a+$e ca(se i! co!!ec)io! %i)h o!e s"eci#ic o##e!ce )o +e e)er*i!e "erso!a$$, +, )he
C(ge a#)er eDa*i!a)io! (!er oa)h or a##ir*a)io! o# )he co*"$ai!a!) a! )he %i)!esses he *a, "ro(ce. Sec)io! 8
*a!a)es )ha) )he search o# a ho(se, roo*, or a!, o)her "re*ise +e *ae i! )he "rese!ce o# )he $a%#($ occ("a!)
)hereo# or a!, *e*+er o# his #a*i$, or i! )he a+se!ce o# )he $a))er, i! )he "rese!ce o# )%o :2< %i)!esses o# s(##icie!)
age a! iscre)io! resii!g i! )he sa*e $oca$i),. A! Sec)io! 9 s)a)es )ha) )he %arra!) *(s) irec) )ha) i) +e ser&e i!
)he a,)i*e, (!$ess )he "ro"er), is o! )he "erso! or i! )he "$ace orere )o +e searche, i! %hich case a irec)io!
*a, +e i!ser)e )ha) i) +e ser&e a) a!, )i*e o# )he a, or !igh). A$$ )hese r($es %ere &io$a)e +, )he C3DG o"era)i&es.
5E SCR ?*I – 1olitical Law – T$e 9xecutive #ranc$ – 1residential 1roclamation ?I?+ – Ta<e Care Clause – Ta<e
7ver 1ower – Calling 7ut 1ower
#ill of Rig$ts D 0reedom of Speec$ – 7ver"readt$
3! Fe+r(ar, 2008, (e )o )he esca"e o# so*e .aga$o *e*+ers a! )he isco&er, o# a "$a! :6"$a! 0ac2$e 3< )o
assassi!a)e )he "resie!), )he! "resie!) G$oria .aca"aga$-Arro,o :G.A< iss(e /resie!)ia$ /roc$a*a)io! 1017
://1017< a! is )o +e i*"$e*e!)e +, Ge!era$ 6rer No. = :G6 =<. The sai $a% %as ai*e )o s(""ress
$a%$ess!ess a! )he co!!i&a!ce o# eD)re*is)s )o +ri!g o%! )he go&er!*e!).
/(rs(a!) )o s(ch //, G.A ca!ce$$e a$$ "$a!s )o ce$e+ra)e 4DSA 3 a! a) )he sa*e )i*e re&o2e a$$ "er*i)s iss(e
#or ra$$ies a! o)her "(+$ic orga!iGa)io!@*ee)i!g. No)%i)hs)a!i!g )he ca!ce$$a)io! o# )heir ra$$, "er*i), 1i$(sa!g .a,o
-!o :1.-< hea Ra!o$# Da&i "roceee )o ra$$, %hich $e )o his arres).
La)er )ha) a,, )he Dai$, Tri+(!e, %hich Cacho-6$i&ares is )he ei)or, %as raie +, )he C3DG a! )he, seiGe a!
co!#isca)e a!)i-G.A ar)ic$es a! %ri)e ("s. La)er s)i$$, a!o)her 2!o%! a!)i-G.A !e%s age!c, :.a$a,a< %as raie
a! seiGe. 6! )he sa*e a,, ?e$)ra! o# A!a2"a%is, %as a$so arres)e. 0is arres) %as ho%e&er gro(!e o! a
%arra!) o# arres) iss(e %a, +ac2 i! 198= #or his ac)io!s agai!s) .arcos. 0is s(""or)ers ca!!o) &isi) hi* i! Cai$
+eca(se o# )he c(rre!) i*"osi)io! o# // 1017 a! G6 =.
3! .arch, G.A iss(e // 1021 %hich ec$are )ha) )he s)a)e o# !a)io!a$ e*erge!c, cease )o eDis). Da&i a! so*e
o""osi)io! Co!gress*e! a&erre )ha) //1017 is (!co!s)i)()io!a$ #or i) has !o #ac)(a$ +asis a! i) ca!!o) +e &a$i$,
ec$are +, )he "resie!) #or s(ch "o%er is re"ose i! Co!gress. A$so s(ch ec$ara)io! is ac)(a$$, a ec$ara)io! o#
*ar)ia$ $a%. 6$i&ares-Cacho a$so a&erre )ha) )he e*erge!c, co!)e*"$a)e i! )he Co!s)i)()io! are )hose o# !a)(ra$
ca$a*i)ies a! )ha) s(ch is a! o&er+rea)h. /e)i)io!ers c$ai* )ha) // 1017 is a! o&er+rea)h +eca(se i) e!croaches
("o! "ro)ec)e a! (!"ro)ec)e righ)s. The So$-Ge! arg(e )ha) )he iss(e has +eco*e *oo) a! acae*ic +,
reaso! o# )he $i#)i!g o# // 1017 +, &ir)(e o# )he ec$ara)io! o# // 1021. The So$-Ge! a&erre )ha) // 1017 is %i)hi!
)he "resie!)Fs ca$$i!g o() "o%er, )a2e care "o%er a! )a2e o&er "o%er.
/SS6E: 5he)her or !o) // 1017 a! G6 = is co!s)i)()io!a$.
HELD: // 1017 a! i)s i*"$e*e!)i!g G6 are "ar)$, co!s)i)()io!a$ a! "ar)$, (!co!s)i)()io!a$.
The iss(e ca!!o) +e co!siere as *oo) a! acae*ic +, reaso! o# )he $i#)i!g o# )he '(es)io!e //. 3) is s)i$$ i! #ac)
o"era)i&e +eca(se )here are "ar)ies s)i$$ a##ec)e (e )o )he a$$ege &io$a)io! o# )he sai //. 0e!ce, )he SC ca! )a2e
cog!i)io! o# )he case a) +ar. The SC r($e )ha) // 1017 is co!s)i)()io!a$ i! "ar) a! a) )he sa*e )i*e so*e "ro&isio!s
o# %hich are (!co!s)i)()io!a$. The SC r($e i! )he #o$$o%i!g %a,P
Reso$()io! +, )he SC o! )he Fac)(a$ ?asis o# i)s ec$ara)io!
The "e)i)io!ers %ere !o) a+$e )o "ro&e )ha) G.A has !o #ac)(a$ +asis i! iss(i!g // 1017 a! G6 =. A reai!g o# )he
So$ici)or Ge!era$Fs Co!so$ia)e Co**e!) a! .e*ora!(* sho%s a e)ai$e !arra)io! o# )he e&e!)s $eai!g )o )he
iss(a!ce o# // 1017, %i)h s(""or)i!g re"or)s #or*i!g "ar) o# )he recors. .e!)io!e are )he esca"e o# )he .aga$o
Gro(", )heir a(acio(s )hrea) o# )he .aga$o D-Da,, )he e#ec)io!s i! )he *i$i)ar,, "ar)ic($ar$, i! )he /hi$i""i!e
.ari!es, a! )he re"ro&i!g s)a)e*e!)s #ro* )he co**(!is) $eaers. There %as a$so )he .i!()es o# )he 3!)e$$ige!ce
Re"or) a! Sec(ri), Gro(" o# )he /hi$i""i!e Ar*, sho%i!g )he gro%i!g a$$ia!ce +e)%ee! )he N/A a! )he *i$i)ar,.
/e)i)io!ers "rese!)e !o)hi!g )o re#()e s(ch e&e!)s. Th(s, a+se!) a!, co!)rar, a$$ega)io!s, )he Co(r) is co!&i!ce
)ha) )he /resie!) %as C(s)i#ie i! iss(i!g // 1017 ca$$i!g #or *i$i)ar, ai. 3!ee, C(gi!g )he serio(s!ess o# )he
i!cie!)s, G.A %as !o) eD"ec)e )o si*"$, #o$ her ar*s a! o !o)hi!g )o "re&e!) or s(""ress %ha) she +e$ie&e
%as $a%$ess &io$e!ce, i!&asio! or re+e$$io!. 0o%e&er, )he eDercise o# s(ch "o%er or (), *(s) !o) s)i#$e $i+er),.
Reso$()io! +, )he SC o! )he 6&er+rea)h Theor,
Firs) a! #ore*os), )he o&er+rea)h oc)ri!e is a! a!a$,)ica$ )oo$ e&e$o"e #or )es)i!g So! )heir #acesF s)a)()es i! #ree
s"eech cases. The 7 co!so$ia)e cases a) +ar are !o) "ri*ari$, S#reeo* o# s"eechF cases. A$so, a "$ai! reai!g o#
// 1017 sho%s )ha) i) is !o) "ri*ari$, irec)e )o s"eech or e&e! s"eech-re$a)e co!(c). 3) is ac)(a$$, a ca$$ ("o! )he
AF/ )o "re&e!) or s(""ress a$$ #or*s o# $a%$ess &io$e!ce. .oreo&er, )he o&er+rea)h oc)ri!e is !o) i!)e!e #or
)es)i!g )he &a$ii), o# a $a% )ha) Sre#$ec)s $egi)i*a)e s)a)e i!)eres) i! *ai!)ai!i!g co*"rehe!si&e co!)ro$ o&er har*#($,
co!s)i)()io!a$$, (!"ro)ec)e co!(c).F -!o(+)e$,, $a%$ess &io$e!ce, i!s(rrec)io! a! re+e$$io! are co!siere
Shar*#($F a! Sco!s)i)()io!a$$, (!"ro)ec)e co!(c).F Th(s, c$ai*s o# #acia$ o&er+rea)h are e!)er)ai!e i! cases
i!&o$&i!g s)a)()es %hich, +, )heir )er*s, see2 )o reg($a)e o!$, Ss"o2e! %orsF a! agai!, )ha) So&er+rea)h c$ai*s, i#
e!)er)ai!e a) a$$, ha&e +ee! c(r)ai$e %he! i!&o2e agai!s) ori!ar, cri*i!a$ $a%s )ha) are so(gh) )o +e a""$ie )o
"ro)ec)e co!(c).F 0ere, )he i!co!)ro&er)i+$e #ac) re*ai!s )ha) // 1017 "er)ai!s )o a s"ec)r(* o# co!(c), !o) #ree
s"eech, %hich is *a!i#es)$, s(+Cec) )o s)a)e reg($a)io!.
Reso$()io! +, )he SC o! )he Ca$$i!g 6() /o%er Doc)ri!e
6! )he +asis o# Sec 17, Ar) 7 o# )he Co!s)i)()io!, G.A ec$are // 1017. The SC co!siere )he /resie!)Fs Sca$$i!g-
o()F "o%er as a iscre)io!ar, "o%er so$e$, &es)e i! his %iso*, i) s)resse )ha) S)his oes !o) "re&e!) a! eDa*i!a)io!
o# %he)her s(ch "o%er %as eDercise %i)hi! "er*issi+$e co!s)i)()io!a$ $i*i)s or %he)her i) %as eDercise i! a *a!!er
co!s)i)()i!g gra&e a+(se o# iscre)io!. The SC r($e )ha) G.A has &a$i$, ec$are // 1017 #or )he Co!s)i)()io!
gra!)s )he /resie!), as Co**a!er-i!-Chie#, a Sse'(e!ceF o# gra(a)e "o%ers. Fro* )he *os) )o )he $eas) +e!ig!,
)hese are: )he ca$$i!g-o() "o%er, )he "o%er )o s(s"e! )he "ri&i$ege o# )he %ri) o# ha+eas cor"(s, a! )he "o%er )o
ec$are .ar)ia$ La%. The o!$, cri)erio! #or )he eDercise o# )he ca$$i!g-o() "o%er is )ha) S%he!e&er i) +eco*es
!ecessar,,F )he /resie!) *a, ca$$ )he ar*e #orces S)o "re&e!) or s(""ress $a%$ess &io$e!ce, i!&asio! or re+e$$io!.F
A! s(ch cri)erio! has +ee! *e).
Reso$()io! +, )he SC o! )he Ta2e Care Doc)ri!e
/(rs(a!) )o )he 2
!
se!)e!ce o# Sec 17, Ar) 7 o# )he Co!s)i)()io! :0e sha$$ e!s(re )ha) )he $a%s +e #ai)h#($$, eDec()e.<
)he "resie!) ec$are // 1017. Da&i e) a$ a&erre )ha) // 1017 ho%e&er &io$a)e Sec 1, Ar) 8 o# )he Co!s)i)()io!
#or i) arroga)e $egis$a)i&e "o%er )o )he /resie!). S(ch "o%er is &es)e i! Co!gress. The, assai$ )he c$a(se S)o
e!#orce o+eie!ce )o a$$ )he $a%s a! )o a$$ ecrees, orers a! reg($a)io!s "ro*($ga)e +, *e "erso!a$$, or ("o!
*, irec)io!.F The SC !o)e )ha) s(ch "ro&isio! is si*i$ar )o )he "o%er )ha) gra!)e #or*er /resie!) .arcos
$egis$a)i&e "o%ers :as "ro&ie i! // 1081<. The SC r($e )ha) )he assai$e // 1017 is (!co!s)i)()io!a$ i!so#ar as i)
gra!)s G.A )he a()hori), )o "ro*($ga)e Secrees.F Legis$a)i&e "o%er is "ec($iar$, %i)hi! )he "ro&i!ce o# )he
Legis$a)(re. Sec 1, Ar)ic$e 8 ca)egorica$$, s)a)es )ha) ST)Uhe $egis$a)i&e "o%er sha$$ +e &es)e i! )he Co!gress o# )he
/hi$i""i!es %hich sha$$ co!sis) o# a Se!a)e a! a 0o(se o# Re"rese!)a)i&es.F To +e s(re, !ei)her .ar)ia$ La% !or a
s)a)e o# re+e$$io! !or a s)a)e o# e*erge!c, ca! C(s)i#, G.AFTs eDercise o# $egis$a)i&e "o%er +, iss(i!g ecrees. The
"resie!) ca! o!$, M)a2e careN o# )he carr,i!g o() o# $a%s +() ca!!o) crea)e or e!ac) $a%s.
Reso$()io! +, )he SC o! )he Ta2e 6&er /o%er Doc)ri!e
The "resie!) ca!!o) &a$i$, orer )he )a2i!g o&er o# "ri&a)e cor"ora)io!s or i!s)i)()io!s s(ch as )he Dai$, Tri+(!e
%i)ho() a!, a()hori), #ro* Co!gress. 6! )he o)her ha!, )he %or e*erge!c, co!)e*"$a)e i! )he co!s)i)()io! is !o)
$i*i)e )o !a)(ra$ ca$a*i)ies +() ra)her i) a$so i!c$(es re+e$$io!. The SC *ae a is)i!c)io!P )he "resie!) ca! ec$are
)he s)a)e o# !a)io!a$ e*erge!c, +() her eDercise o# e*erge!c, "o%ers oes !o) co*e a()o*a)ica$$, a#)er i) #or s(ch
eDercise !ees a()hori), #ro* Co!gress. The a()hori), #ro* Co!gress *(s) +e +ase o! )he #o$$o%i!g:
:1< There *(s) +e a %ar or o)her e*erge!c,.
:2< The e$ega)io! *(s) +e #or a $i*i)e "erio o!$,.
:3< The e$ega)io! *(s) +e s(+Cec) )o s(ch res)ric)io!s as )he Co!gress *a, "rescri+e.
:9< The e*erge!c, "o%ers *(s) +e eDercise )o carr, o() a !a)io!a$ "o$ic, ec$are +, Co!gress.
Reso$()io! +, )he SC o! )he 3ss(e )ha) // 1017 is a .ar)ia$ La% Dec$ara)io!
The SC r($e )ha) // 1017 is !o) a .ar)ia$ La% ec$ara)io! a! is !o) )a!)a*o(!) )o i). 3) is a &a$i eDercise o# )he
ca$$i!g o() "o%er o# )he "resie!) +, )he "resie!).
Sec. 18 Nationalism
1! Republic vs PLDT
4epublic v P1D"
Fac)s:
/LDT a! RCA Co**(!ica)io!s 3!c :%hich is !o) a "ar), )o )his case +() has co!)rac)(a$ re$a)io!s %i)h e "ar)ies<
e!)ere i!)o a! agree*e!) %here )e$e"ho!e *essages, co*i!g #ro* )he -S a! recei&e +, RCAKs o*es)ic s)a)io!
co($ a()o*a)ica$$, +e )ra!s#erre )o )he $i!es o# /LDT a! &ice &ersa.
The ?(rea( o# Te$eco**(!ica)io!s se) (" i)s o%! Go&er!*e!) Te$e"ho!e S,s)e* :GTS< +, re!)i!g )he )r(!2 $i!es o#
/LDT )o e!a+$e go&er!*e!) o##ices )o ca$$ "ri&a)e "ar)ies. 6!e o# )he *a!, r($es "rohi+i)s )he (se o# )he ser&ice #or
his "ri&a)e (se.
Re"(+$ic o# )he /hi$i""i!es e!)ere i!)o a! agree*e!) %i)h RCA #or a Coi!) o&erseas )e$e"ho!e ser&ice %here )he
?(rea( %o($ co!&e, raio-)e$e"ho!e o&erseas ca$$s recei&e +, )he RCAKs s)a)io! )o a! #ro* $oca$ resie!)s.
/LDT co*"$ai!e )ha) )he ?(rea( %as &io$a)i!g )he co!i)io!s #or (si!g )he )r(!2 $i!es !o) o!$, #or )he (se o#
go&er!*e!) o##ices +() e&e! )o ser&e "ri&a)e "erso!s or )he ge!era$ "(+$ic. /LDT ga&e a !o)ice )ha) i# &io$a)io!s %ere
!o) s)o""e, /LDT %o($ se&er )he co!!ec)io!s -%hich /LDT i.
Re"(+$ic s(e /LDT co**a!i!g /LDT )o eDec()e a co!)rac), )hro(gh )he ?(rea(, #or )he (se o# )he #aci$i)ies o#
e#e!a!)Ks )e$e"ho!e s,s)e* )hro(gho() )he /hi$i""i!es (!er s(ch )er*s a! co!i)io!s as )he co(r) #i!s i)
reaso!a+$e.
3ss(e:
5he)her or !o) Re"(+$ic ca! co**a! /LDT )o eDec()e )he co!)rac).
0e$:
No. The ?(rea( %as crea)e i! "(rs(a!ce o# a s)a)e "o$ic, reorga!iGi!g )he go&er!*e!) o##ices )o *ee) )he
eDige!cies a))e!a!) ("o! )he es)a+$ish*e!) o# a #ree Go&K) o# )he /hi$.
5he! )he ?(rea( s(+scri+e )o )he )r(!2 $i!es, e#e!a!) 2!e% or sho($ ha&e 2!o%! )ha) )heir (se +, )he
s(+scri+er %as *ore or $ess "(+$ic a! a$$ e*+raci!g i! !a)(re.
The acce")a!ce +, )he e#e!a!) o# )he "a,*e!) o# re!)a$s, es"i)e i)s 2!o%$ege )ha) )he "$ai!)i## ha eD)e!e )he
(se o# )he )r(!2 $i!es )o co**ercia$ "(r"oses, i*"$ies asse!) +, )he e#e!a!) )o s(ch eD)e!e (se. Si!ce )his
re$a)io!shi" has +ee! *ai!)ai!e #or a $o!g )i*e a! )he "(+$ic has "a)ro!iGe +o)h )e$e"ho!e s,s)e*s, a! )heir
i!)erco!!ec)io! is )o )he "(+$ic co!&e!ie!ce, i) is )oo $a)e #or )he e#e!a!) )o c$ai* *is(se o# i)s #aci$i)ies, a! i) is !o)
!o% a) $i+er), )o (!i$a)era$$, se&er )he "h,sica$ co!!ec)io! o# )he )r(!2 $i!es.
To ("ho$ /LDTKs co!)e!)io! is )o s(+ori!a)e )he !ees o# )he ge!era$ "(+$ic.
CAS4 D3G4ST: Re"(+$ic &s. /LDT
:1989<
FACTS:
So*e)i*e i! 1933, )he e#e!a!) /LDT e!)ere i!)o a! agree*e!) %i)h RCA Co**(!ica)io!s 3!c., a!
A*erica! cor"ora)io!, %here+, )e$e"ho!e *essages co*i!g #ro* )he -S a! recei&e +, RCAFs o*es)ic
s)a)io!, co($ a()o*a)ica$$, +e )ra!s#erre )o )he $i!es o# /LDT, a! &ice &ersa.
The "$ai!)i## )hro(gh )he ?(rea( o# Te$eco**(!ica)io!s, a#)er ha&i!g se) (" i)s o%! Go&er!*e!)
Te$e"ho!e S,s)e*, +, ()i$iGi!g i)s o%! a""ro"ria)io! a! e'(i"*e!) a! +, re!)i!g )r(!2 $i!es o# )he /LDT,
e!)ere i!)o a! agree*e!) %i)h RCA #or a Coi!) o&erseas )e$e"ho!e ser&ice.
A$$egi!g )ha) "$ai!)i## is i! co*"e)i)io! %i)h )he*, /LDT !o)i#ie )he #or*er a! recei&i!g !o re"$,,
isco!!ec)e )he )r(!2 $i!es +ei!g re!)e +, )he sa*eP )h(s, "ro*")i!g )he "$ai!)i## )o #i$e a case +e#ore )he CF3
"ra,i!g #or C(g*e!) co**a!i!g /LDT )o eDec()e a co!)rac) %i)h )he ?(rea( #or )he (se o# )he #aci$i)ies o#
/LDTFs )e$e"ho!e s,s)e*, a! #or a %ri) o# "re$i*i!ar, i!C(!c)io! agai!s) )he e#e!a!) )o res)rai! )he
se&era!ce o# )he eDis)i!g )r(!2 $i!es a! res)ore )hose se&ere.
3SS-4:
5he)her or !o) )he e#e!a!) /LDT ca! +e co*"e$$e )o e!)er i!)o a co!)rac) %i)h )he "$ai!)i##.
04LD:
M D D D %hi$e )he Re"(+$ic *a, !o) co*"e$ )he /LDT )o ce$e+ra)e a co!)rac) %i)h i), )he Re"(+$ic *a,, i!
)he eDercise o# )he so&ereig! "o%er o# e*i!e!) o*ai!, re'(ire )he )e$e"ho!e co*"a!, )o "er*i)
i!)erco!!ec)io! o# )he go&er!*e!) )e$e"ho!e s,s)e* a! )ha) o# )he /LDT, as )he !ees o# )he go&er!*e!)
ser&ice *a, re'(ire, s(+Cec) )o )he "a,*e!) o# C(s) co*"e!sa)io! )o +e e)er*i!e +, )he co(r).N
REPUBLIC VS. PLDT :2E SCRA 32>F G.R. N(. L31GG?1F 29 Ja' 1<E<@
!aturda/, Panuar/ 31, %&&B Posted b/ o:eeholic -rites
3abelsG ase Di,ests, Political 3a"
Facts: The plainti: Republic o. the Philippines is a political entit/ e7ercisin, ,o0ern)ent
po"ers throu,h one o. its branches, the #ureau o. Teleco))unication. 1erein de.endant,
P3DT is a public ser0ice corporation holdin, a .ranchise to install operates and )aintains a
telephone s/ste). 5.ter its creation, the #8T set up its o"n ,o0ern)ent telephone s/ste)
b/ utiliDin, its o"n appropriations and other e(uip)ent and b/ rentin, trun< lines o. the
P3DT to enable the ,o0t o9ces to call pri0atel/. #8T entered into an a,ree)ent "ith the
R5 co))unications .or +oint o0erseas telephone ser0ice "hereb/ #8T "ould con0e/
o0erseas calls recei0ed b/ R5 to local residents. P3DT co)plained to the #8T that it "as a
0iolation o. the condition o. their a,ree)ent since the #8T had used trun< lines onl/ .or the
use o. ,o0ern)ent o9ces but e0en to ser0e pri0ate persons or the ,eneral public in
co)petition "ith the business o. P3DT. !ubse(uentl/, the plainti: co))enced suit a,ainst
P3DT as<in, the court +ud,)ent be rendered orderin, the P3DT to e7ecute a contract "ith
the plainti:, throu,h the #8T .or the use o. the .acilities o. P3DT*s telephone s/ste)
throu,hout the countr/ under such conditions as the court )a/ consider reasonable. The C$
rendered +ud,)ent statin, that it could not co)pel P3DT to enter into such a,ree)ent.
1ence this petition.
Iss!: -hether or Not P3DT )a/ be co)pelled to enter into such a,ree)ent.
H!"#: Nes, the state, )a/, in the interest o. national "el.are trans.er utilities to public
o"nership upon pa/)ent o. +ust co)pensation, there is no reason "h/ the state )a not
re(uire a public utilit/ to render ser0ices in the ,eneral interest pro0ided +ust co)pensation
is paid.
REPUBLIC OF THE PHILIPPINES VS. PLDT) #%4!st!#
Posted b/ Pius Forados on No0e)ber ;, %&11
%6 !R5 6%& (1B6B) (Constitutional Law – Eminent omain, E!"ro"riation, Just
Com"ensation#
C5T!G Public petitioner co))enced a suit a,ainst pri0ate respondent pra/in, .or the ri,ht
o. the #ureau o. Teleco))unications to de)and interconnection bet"een the Go0ern)ent
Telephone !/ste) and that o. P3DT, so that the Go0ern)ent Telephone !/ste) could )a<e
use o. the lines and .acilities o. the P3DT. Pri0ate respondent contends that it cannot be
co)pelled to enter into a contract "here no a,ree)ent is had bet"een the).
$!!46G -hether or not interconnection bet"een P3DT and the Go0ern)ent Telephone
!/ste) can be a 0alid ob+ect .or e7propriation.
163DG Nes, in the e7ercise o. the so0erei,n po"er o. e)inent do)ain, the Republic )a/
re(uire the telephone co)pan/ to per)it interconnection as the needs o. the ,o0ern)ent
ser0ice )a/ re(uire, sub+ect to the pa/)ent o. +ust co)pensation. The use o. lines and
ser0ices to allo" inter'ser0ice connection bet"een the both telephone s/ste)s, throu,h
e7propriation can be a sub+ect to an ease)ent o. ri,ht o. "a/.
PLDT vs NTC
C;este* Ca)a13a *eco((ends ;is visito*s to 81ease *ead t;e o*igina1 J :011 teEt o: t;e case cited! .ie EieO
/(R( No( 556I6 7cto"er ?5, ?EEI
4H/L/44/NE LONG D/STANCE TELE4HONE CO! A4LDTB- 8etitione*-
vs!
THE NAT/ONAL TELECOMM6N/CAT/ONS COMM/SS/ON AND CELLCOM- /NC!- 2E.4RESS TELECOMM6N/CAT/ONS CO!- /NC!
AETC/B"- *es8ondents!
EN 9ANC
Facts:
There are )%o :2< 6rers, !a*e$,, 6rer o# 12 Dece*+er 1988 gra!)i!g "ri&a)e res"o!e!) 4D"ress Te$eco**(!ica)io!s Co., 3!c. :4TC3<
"ro&isio!a$ a()hori), )o i!s)a$$, o"era)e a! *ai!)ai! a Ce$$($ar .o+i$e Te$e"ho!e S,s)e* i! .e)ro-.a!i$a :/hase A< i! accora!ce %i)h
s"eci#ie co!i)io!sP a! )he 6rer, a)e 8 .a, 1988, e!,i!g reco!siera)io!, e!ac)e +, )he res"o!e!) Na)io!a$ Te$eco**(!ica)io!s
Co**issio! :NTC< +() assai$e +, "e)i)io!er /hi$i""i!e Lo!g Dis)a!ce Te$e"ho!e Co*"a!, :/LDT<.
4TC3 #i$e a! a""$ica)io! %i)h NTC #or )he iss(a!ce o# a Cer)i#ica)e o# /(+$ic Co!&e!ie!ce a! Necessi), :C/CN< )o co!s)r(c), i!s)a$$,
es)a+$ish, o"era)e a! *ai!)ai! a Ce$$($ar .o+i$e Te$e"ho!e S,s)e* a! a! A$"ha N(*eric /agi!g S,s)e* i! .e)ro .a!i$a a! i! )he
So()her! L(Go! regio!s, %i)h a "ra,er #or "ro&isio!a$ a()hori), )o o"era)e /hase A o# i)s "ro"osa$ %i)hi! .e)ro .a!i$a.
?() i! a! 6rer, a)e 12 No&e*+er 1987, NTC o&err($e /LDTKs 6""osi)io! a! ec$are )ha) Re". Ac) No. 2090 :19=8< sho($ +e $i+era$$,
co!s)r(e as )o i!c$(e a*o!g )he ser&ices (!er sai #ra!chise )he o"era)io! o# a ce$$($ar *o+i$e )e$e"ho!e ser&ice.
A#)er e&a$(a)i!g )he reco!siera)io! so(gh) +, /LDT, )he NTC, i! 6c)o+er 1988, *ai!)ai!e i)s r($i!g )ha) $i+era$$, co!s)r(e, a""$ica!)Ks
#ra!chise carries %i)h i) )he "ri&i$ege )o o"era)e a! *ai!)ai! a ce$$($ar *o+i$e )e$e"ho!e ser&ice.
3! a L.o)io! )o Se) Asie )he 6rerL gra!)i!g "ro&isio!a$ a()hori),, /LDT a$$ege esse!)ia$$, )ha) )he i!)erco!!ec)io! orere %as i! &io$a)io!
o# (e "rocess a! )ha) )he gra!) o# "ro&isio!a$ a()hori), %as C(risic)io!a$$, a! "roce(ra$$, i!#ir*.
/LDT (rges )he Co(r) )o a!!($ )he NTC 6rers o# 12 Dece*+er 1988 a! 8 .a, 1989 a! )o orer 4TC3 )o esis) #ro*, s(s"e!, a!@or
isco!)i!(e a!, a! a$$ ac)s i!)e!e #or i)s i*"$e*e!)a)io!.
/ss0es:
1. 5he)her )he s)a)(s a! co&erage o# Re". Ac) No. 2090 i!c$(es #ra!chiseP
2. 5he)her )here is )ra!s#er o# shares o# s)oc2 o# a cor"ora)io! i! ho$i!g a C/CNP a!
3. 5he)her )here is a !ee )o *erge "ri!ci"$e a! "roce(re o# i!)erco!!ec)io!.
He1d:
There is !o gra&e a+(se o# iscre)io! o! )he "ar) o# NTC, ("o! )he #o$$o%i!g co!siera)io!s:
?( NTC &urisdiction
The NTC is )he reg($a)or, age!c, o# )he !a)io!a$ go&er!*e!) %i)h C(risic)io! o&er a$$ )e$eco**(!ica)io!s e!)i)ies. 3) is $ega$$, c$o)he %i)h
a()hori), a! gi&e! a*"$e iscre)io! )o gra!) a "ro&isio!a$ "er*i) or a()hori),. 3! #ac), NTC *a,, o! i)s o%! i!i)ia)i&e, gra!) s(ch re$ie# e&e! i!
)he a+se!ce o# a *o)io! #ro* a! a""$ica!).
5ha) )he NTC gra!)e %as s(ch a "ro&isio!a$ a()hori),, %i)h a e#i!i)e eD"ir, "erio o# eigh)ee! :18< *o!)hs (!$ess soo!er re!e%e, a!
%hich *a, +e re&o2e, a*e!e or re&ise +, )he NTC. 3) is a$so $i*i)e )o .e)ro .a!i$a o!$,.
5ha) is *ore, )he *ai! "roceei!gs are c$ear$, )o co!)i!(e as s)a)e i! )he NTC 6rer o# 8 .a, 1989.
The "ro&isio!a$ a()hori), %as iss(e a#)er (e heari!g, rece")io! o# e&ie!ce a! e&a$(a)io!, %i)h )he heari!gs a))e!e +, &ario(s
o""osi)ors, i!c$(i!g /LDT. 3) %as gra!)e o!$, a#)er a "ri*a #acie sho%i!g )ha) 4TC3 has )he !ecessar, $ega$, #i!a!cia$, a! )ech!ica$
ca"a+i$i)ies a! )ha) "(+$ic i!)eres), co!&e!ie!ce, a! !ecessi), so e*a!e.
0e!ce, )he #i!a$ o()co*e o# )he a""$ica)io! res)s %i)hi! )he eDc$(si&e "reroga)i&e o# )he NTC. 5he)her or !o) a C/CN %o($ e&e!)(a$$, iss(e
%o($ e"e! o! )he e&ie!ce )o +e "rese!)e (ri!g )he heari!gs s)i$$ )o +e co!(c)e, a! o!$, a#)er a #($$ e&a$(a)io! o# )he "roo# )h(s
"rese!)e.
J( T$e Coverage of 9TC!Ks 0ranc$ise
Re". Ac) No. 2090 gra!)s 4TC3 :#or*er$, FAC3< L)he righ) a! "ri&i$ege o# co!s)r(c)i!g, i!s)a$$i!g, es)a+$ishi!g a! o"era)i!g i! )he e!)ire
/hi$i""i!es raio s)a)io!s #or rece")io! a! )ra!s*issio! o# *essages o! raio s)a)io!s i! )he #oreig! a! o*es)ic "(+$ic #iDe "oi!)-)o-"oi!)
a! "(+$ic +ase, aero!a()ica$ a! $a! *o+i$e s)a)io!s, ... %i)h )he corres"o!i!g re$a, s)a)io!s #or )he rece")io! a! )ra!s*issio! o# %ire$ess
*essages o! raio)e$egra"h, a!@or raio)e$e"ho!, ....L /LDT *ai!)ai!s )ha) )he sco"e o# )he #ra!chise is $i*i)e )o Lraio s)a)io!sL a!
eDc$(es )e$e"ho!e ser&ices s(ch as )he es)a+$ish*e!) o# )he "ro"ose Ce$$($ar .o+i$e Te$e"ho!e S,s)e* :C.TS<. 0o%e&er, i! i)s 6rer o#
12 No&e*+er 1987, )he NTC co!s)r(e )he )ech!ica$ )er* Lraio)e$e"ho!,L $i+era$$, as )o i!c$(e )he o"era)io! o# a ce$$($ar *o+i$e )e$e"ho!e
s,s)e*.
)( T$e Status of 9TC! 0ranc$ise
/LDT a$$eges )ha) )he 4TC3 #ra!chise ha $a"se i!)o !o!eDis)e!ce #or #ai$(re o# )he #ra!chise ho$er )o +egi! a! co*"$e)e co!s)r(c)io! o#
)he raio s,s)e* a()horiGe (!er )he #ra!chise as eD"$ici)$, re'(ire i! Sec)io! 9 o# i)s #ra!chise, Re". Ac) No. 2090.
.ore i*"or)a!)$,, /LDTKs a$$ega)io! "ar)a2es o# a Co$$a)era$ a))ac2 o! a #ra!chise Re". Ac) No. 2090<, %hich is !o) a$$o%e.
A #ra!chise is a "ro"er), righ) a! ca!!o) +e re&o2e or #or#ei)e %i)ho() (e "rocess o# $a%. The e)er*i!a)io! o# )he righ) )o )he eDercise o#
a #ra!chise, or %he)her )he righ) )o e!Co, s(ch "ri&i$ege has +ee! #or#ei)e +, !o!-(ser, is *ore "ro"er$, )he s(+Cec) o# )he "reroga)i&e %ri) o#
'(o %arra!)o, )he righ) )o asser) %hich, as a r($e, +e$o!gs )o )he S)a)e L("o! co*"$ai!) or o)her%iseL :Sec)io!s 1, 2 a! 3, R($e 88, R($es o#
Co(r)<, 2 )he reaso! +ei!g )ha) )he a+(se o# a #ra!chise is a "(+$ic %ro!g a! !o) a "ri&a)e i!C(r,. A #or#ei)(re o# a #ra!chise %i$$ ha&e )o +e
ec$are i! a irec) "roceei!g #or )he "(r"ose +ro(gh) +, )he S)a)e +eca(se a #ra!chise is gra!)e +, $a% a! i)s (!$a%#($ eDercise is
"ri*ari$, a co!cer! o# Go&er!*e!).
6( 9TC!Ks Stoc< Transactions
4TC3 a*i)s )ha) i! 1989, )he A$+er)os, as origi!a$ o%!ers o# *ore )ha! 90Z o# )he o()s)a!i!g ca"i)a$ s)oc2 so$ )heir ho$i!gs )o )he 6r+es.
3! 1988, )he A$+er)os re-ac'(ire )he shares )he, ha so$ )o )he 6r+es. 3! 1987, )he A$+er)os so$ *ore )ha! 90Z o# )heir shares )o 0oracio
Ba$(!g. Therea#)er, )he "rese!) s)oc2ho$ers ac'(ire )heir 4TC3 shares. .oreo&er, i! 1989, 4TC3 ha i!crease i)s ca"i)a$ s)oc2 #ro*
/90,000.00 )o /380,000.00P a! i! 1987, #ro* /380,000.00 )o /90..
3! o)her %ors, )ra!s#ers o# shares o# a "(+$ic ()i$i), cor"ora)io! !ee o!$, NTC a""ro&a$, !o) Co!gressio!a$ a()horiGa)io!. 5ha) )ra!s"ire i!
4TC3 %ere a series o# )ra!s#ers o# shares s)ar)i!g i! 1989 (!)i$ 1987. ?() agai!, %he)her 4TC3 has o##e!e agai!s) a "ro&isio! o# i)s
#ra!chise, or has s(+Cec)e i) )o *is(se or a+(se, *a, *ore "ro"er$, +e i!'(ire i!)o i! '(o %arra!)o "roceei!gs i!s)i)()e +, )he S)a)e. 3)
is )he co!i)io! o# e&er, #ra!chise )ha) i) is s(+Cec) )o a*e!*e!), a$)era)io!, or re"ea$ %he! )he co**o! goo so re'(ires :1987
Co!s)i)()io!, Ar)ic$e I33, Sec)io! 11<.
,( T$e NTC !nterconnection 7rder
3! )he "ro&isio!a$ a()hori), gra!)e +, NTC )o 4TC3, o!e o# )he co!i)io!s i*"ose %as )ha) )he $a))er a! /LDT %ere )o e!)er i!)o a!
i!)erco!!ec)io! agree*e!) )o +e Coi!)$, s(+*i))e )o NTC #or a""ro&a$.
Re". Ac) No. 8899, or )he .(!ici"a$ Te$e"ho!e Ac) o# 1989, a""ro&e o! 8 Fe+r(ar, 1990, *a!a)es i!)erco!!ec)io! "ro&ii!g as i) oes
)ha) La$$ o*es)ic )e$eco**(!ica)io!s carriers or ()i$i)ies ... sha$$ +e i!)erco!!ec)e )o )he "(+$ic s%i)ch )e$e"ho!e !e)%or2.L S(ch reg($a)io!
o# )he (se a! o%!ershi" o# )e$eco**(!ica)io!s s,s)e*s is i! )he eDercise o# )he "$e!ar, "o$ice "o%er o# )he S)a)e #or )he "ro*o)io! o# )he
ge!era$ %e$#are.
The i*"or)a!ce a! e*"hasis gi&e! )o i!)erco!!ec)io! a)es +ac2 )o .i!is)r, Circ($ar No. 82-81, a)e 8 Dece*+er 1982P De"ar)*e!) o#
Tra!s"or)a)io! a! Co**(!ica)io! :D6TC< Circ($ar No. 87-188, iss(e i! 1987P The shari!g o# re&e!(e %as a! ai)io!a$ #ea)(re
co!siere i! D6TC Circ($ar No. 90-298, a)e 19 7(!e 1990, $a,i!g o%! )he L/o$ic, o! 3!)erco!!ec)io! a! Re&e!(e Shari!g +, /(+$ic
Co**(!ica)io!s Carriers.L
The NTC orer )o i!)erco!!ec) a$$o%s )he "ar)ies )he*se$&es )o isc(ss a! agree ("o! )he s"eci#ic )er*s a! co!i)io!s o# )he
i!)erco!!ec)io! agree*e!) i!s)ea o# )he NTC i)se$# $a,i!g o%! )he s)a!ars o# i!)erco!!ec)io! %hich i) ca! &er, %e$$ i*"ose. Th(s i) is
)ha) /LDT ca!!o) C(s)i#ia+$, c$ai* e!ia$ o# c$(e "rocess. 3) has +ee! hear. 3) %i$$ co!)i!(e )o +e hear i! )he *ai! "roceei!gs.
*( Lltimate Considerations
The ecisi&e co!siera)io!s are "(+$ic !ee, "(+$ic i!)eres), a! )he co**o! goo. Those %ere )he o&errii!g #ac)ors %hich *o)i&a)e NTC
i! gra!)i!g "ro&isio!a$ a()hori), )o 4TC3.
Free co*"e)i)io! i! )he i!(s)r, *a, a$so "ro&ie )he a!s%er )o a *(ch-esire i*"ro&e*e!) i! )he '(a$i), a! e$i&er, o# )his ),"e o# "(+$ic
()i$i),, )o i*"ro&e )ech!o$og,, #as) a! ha!, *o+i$e ser&ice, a! re(ce (ser issa)is#ac)io!. A#)er a$$, !ei)her /LDT !or a!, o)her "(+$ic
()i$i), has a co!s)i)()io!a$ righ) )o a *o!o"o$, "osi)io! i! &ie% o# )he Co!s)i)()io!a$ "roscri")io! )ha) !o #ra!chise cer)i#ica)e or a()horiGa)io!
sha$$ +e eDc$(si&e i! charac)er or sha$$ $as) $o!ger )ha! #i#), :=0< ,ears.
R01ing:
There is !o gra&e a+(se o# iscre)io!, )a!)a*o(!) )o $ac2 o# or eDcess o# C(risic)io!, o! )he "ar) o# )he NTC i! iss(i!g i)s cha$$e!ge 6rers
o# 12 Dece*+er 1988 a! 8 .a, 1989 i! NTC Case No. 87-39, a! )his /e)i)io! is D3S.3SS4D #or $ac2 o# *eri).
+! PLDT vs. NTC
GR ;;4&4, 1; 8ctober 1BB&> 6n #anc, Felencio'1errera (P)
CactsG 8n %% Pune 1B5;, R5 %&B& "as enacted ,rantin, Celi7 5lberto S o. (later 6T$) a
.ranchise to
establish radio stations .or do)estic and transoceanic teleco))unications. 8n 13 Fa/
1B;A, 6T$ 2led an
application "ith the NT .or the issuance o. a certi2cate o. public con0enience and
necessit/ to operate, etc.
a ellular Fobile Telephone !/ste) and an alpha nu)eric pa,in, s/ste) in Fetro Fanila
and in the
!outhern 3uDon re,ions, "ith a pra/er .or pro0isional authorit/ to operate "ithin Fetro
Fanila. P3DT 2led
an opposition "ith a )otion to dis)iss. 8n 1% No0e)ber 1B;A, NT o0erruled P3DT?s
opposition and
declared R5 %&B& should be liberall/ construed so as to include the operation o. a
cellular )obile telephone
ser0ice as part o. ser0ices o. the .ranchise. 8n 1% Dece)ber 1B;;, NT ,ranted 6T$
pro0isional authorit/
Teleco))unications 3a", %&&4 ( 1 )Di,ests (#erne Guerrero)
to install, operate, and )aintain a cellular )obile telephone ser0ice initiall/ in Fetro
Fanila sub+ect to the
ter)s and conditions set .orth in its order, includin, an interconnection a,ree)ent to be
entered "ith P3DT.
P3DT 2led a )otion to set aside order "hich "as denied b/ the NT on ; Fa/ 1B;B. P3DT
challen,ed the
1% Dece)ber 1B;; and ; Fa/ 1B;B NT orders be.ore the !upre)e ourt throu,h a
special ci0il action .or
certiorari and prohibition.
$ssueG -hether the pro0isional authorit/ "as properl/ ,ranted.
1eldG The pro0isional authorit/ ,ranted b/ the NT ("hich is the re,ulator/ a,enc/ o. the
National
Go0ern)ent o0er all teleco))unications entities) has a de2nite e7pir/ period o. 1;
)onths unless sooner
rene"ed> )a/ be re0o<ed, a)ended or re0ised b/ the NT> co0ers one o. .our phases>
li)ited to Fetro
Fanila onl/> and does not authoriDe the installation and operation o. an alphanu)eric
pa,in, s/ste). $t "as
.urther issued a.ter due hearin,, "ith P3DT attendin, and ,ranted a.ter a pri)a .acie
sho"in, that 6T$ had the necessar/ le,al, 2nancial and technical capabilities> and that
public interest, con0enience and necessit/ so
de)anded. Pro0isional authorit/ "ould be )eanin,less i. the ,rantee "ere not allo"ed
to operate, as its
li.eti)e is li)ited and )a/ be re0o<ed b/ the NT at an/ ti)e in accordance "ith la".
$ssueG -hether 6T$?s .ranchise includes operation o. cellular )obile telephone s/ste)
(FT!)
1eldG The NT construed the technical ter) Jradiotelephon/K liberall/ as to include the
operation o. a
cellular )obile telephone s/ste). The construction ,i0en b/ an ad)inistrati0e a,enc/
possessed o. the
necessar/ special <no"led,e, e7pertise and e7perience and deser0es ,reat "ei,ht and
respect. $t can onl/ be
set aside b/ +udicial inter0ention on proo. o. ,ross abuse o. discretion, .raud or error o.
la".
$ssueG -hether P3DT can re.use interconnection "ith 6T$.
1eldG The NT )erel/ e7ercised its dele,ated authorit/ to re,ulate the use o.
teleco))unication net"or<s
"hen it decreed interconnection. P3DT cannot re.use interconnection as such is
)andated under R5 6B4B or
the Funicipal Telephone 5ct o. 1B;B. -hat interconnection see<s to acco)plish is to
enable the s/ste) to
reach out to the ,reatest nu)ber o. people possible in line "ith ,o0ern)ental policies.
-ith the broader
reach, public interest and con0enience "ill be better ser0ed. Public need, public interest,
and the co))on
,ood are the decisi0e, i. not the ulti)ate, considerations. To these public and national
interests, public utilit/
co)panies )ust /ield.
The NT order does not depri0e P3DT due process as it allo"s the parties the)sel0es to
discuss and a,ree
upon the speci2c ter)s and conditions o. the interconnection a,ree)ent instead o. the
NT itsel. la/in,
do"n the standards o. interconnection "hich it can 0er/ "ell i)pose.
S!ct%(' 1<: M('(1("%!s a'# C(+$%'at%('s
1. 4!erg, Reg($a)or, ?oar >s Ca. GR 113079
2. ENERGH REGULATORH BOARD) petitioner, vs. COURT OF APPEALS a'#
PETROLEUM DISTRIBUTORS AND SERVICES CORPORATION) respondents.
3. Facts:
?. Petitioner Pilipinas !hell Petroleu) orporation (!hell) is en,a,ed in the business
o. i)portin, crude oil, re2nin, the sa)e and sellin, 0arious petroleu) products
throu,h a net"or< o. ser0ice stations throu,hout the countr/.
;. Pri0ate respondent Petroleu) Distributors and !er0ice orporation (PD!) o"ns
and operates a alte7 ser0ice station at the corner o. the F$5 and Do)estic
Roads in Pasa/ it/.
E. 8n Pune 3&,1B;3, !hell 2led "ith the (uonda) #ureau o. 6ner,/ 4tiliDation (#64)
an application .or authorit/ to relocate its !hell !er0ice !tation at Ta)bo,
ParaYa(ue, Fetro Fanila, to $)elda Farcos 50enue o. the sa)e )unicipalit/. The
application, "hich "as doc<eted as #64 ase No. ;3'&B'131B, "as initiall/
re+ected b/ the #64 because !hell?s old site had been closed .or 20e (5) /ears
such that the relocation o. the sa)e to a ne" site "ould a)ount to a ne"
construction o. a ,asoline outlet, "hich construction "as then the sub+ect o. a
)oratoriu). !ubse(uentl/, ho"e0er, #64 rela7ed its position and ,a0e due
course to the application.
9. PD! 2led an opposition to the application on the ,rounds thatG 1.W there are
ade(uate ser0ice stations attendin, to the )otorists? re(uire)ents in the tradin,
area co0ered b/ the application> %.W ruinous co)petition "ill result .ro) the
establish)ent o. the proposed ne" ser0ice station> and 3.W there is a decline not
an increase in the 0olu)e o. sales in the area. T"o other co)panies, na)el/
Petrophil and alte7, also opposed the application on the ,round that !hell .ailed
to co)pl/ "ith the +urisdictional re(uire)ents.
G. $n a Resolution dated Farch 6, 1B;4, the #64 dis)issed the application on
+urisdictional ,rounds and .or lac< o. J.ull titleK o. the lessor o0er the proposed
site. 1o"e0er, on Fa/ A, 1B;4, the #64 reinstated the sa)e application and
therea.ter conducted a hearin, thereon.
<. 8n Pune 3, 1B;6, the #64 rendered a decision den/in, !hell?s application on a
2ndin, that there "as Jno necessit/ .or an additional petroleu) products retail
outlet in $)elda Farcos 50enue, ParaYa(ue.K Dissatis2ed, !hell appealed to the
89ce o. 6ner,/ 5:airs (865).
1>. Fean"hile, on Fa/ ;, 1B;A, 67ecuti0e 8rder No. 1A% "as issued creatin,
the 6ner,/ Re,ulator/ #oard (6R#) and trans.errin, to it the re,ulator/ and
ad+udicator/ .unctions o. the #64.
11. 8n Fa/ B, 1B;;, the 865 rendered a decision den/in, the appeal o. !hell
and a9r)in, the #64 decision. !hell )o0ed .or reconsideration and pra/ed .or a
ne" hearin, or the re)and o. the case .or .urther proceedin,s. $n a supple)ent
to said )otion, !hell sub)itted a ne" .easibilit/ stud/ to +usti./ its application.
12. The 865 issued an order on Pul/ 11, 1B;;, re)andin, the case to the 6R#
.or .urther e0aluation and consideration, notin, therein that the Jupdated sur0e/
conducted b/ !hellK cited ne" de0elop)ents such as the accessibilit/ o. $)elda
Farcos 50enue, no" #eni,no 5(uino, Pr. 50enue, to ParaYa(ue residents alon,
!ucat Road and the population ,ro"th in the tradin, area.
13. 5.ter the records o. #64 ase No. ;3'&B'131B "as re)anded to the 6R#,
!hell 2led on Farch 3, 1B;B an a)ended application, intended .or the sa)e
purpose as its ori,inal application, "hich "as doc<eted as 6R# ase No. ;B'5A.
This a)ended application "as li<e"ise opposed b/ PD!.
1?. 8n !epte)ber 1A, 1BB1, the 6R# rendered a Decision allo"in, !hell to
establish the ser0ice station in #eni,no 5(uino, Pr. 50enue.
1;. PD! 2led a )otion .or reconsideration o. the .ore,oin, Decision. The
)otion "as, ho"e0er, denied b/ 6R# in an 8rder dated Cebruar/ 14, 1BB%.
1E. 5,,rie0ed, PD! ele0ated its cause on 5pril 1, 1BB% to the ourt o.
5ppeals, "here the sa)e "as doc<eted as 5'G.R. !P No. %A661.
19. Therea.ter, in a Decision dated No0e)ber ;, 1BB3, the appellate court?s
Tenth Di0ision re0ersed the 6R# +ud,)ent. W Dissatis2ed, both !hell and 6R#
ele0ated the )atter to this ourt b/ "a/ o. these petitions, "hich "ere ordered
consolidated b/ the ourt in a Resolution dated Pul/ %5,1BB4.
1G. $t appears, ho"e0er, .ro) the record that e0en as the proceedin,s in 5'
G.R. !P No. %A661 "ere pendin, in the appellate court, alte7 2led on Panuar/
%4, 1BB% a si)ilar application .or the construction o. a ser0ice station in the
sa)e area "ith the 6R#, doc<eted as 6R# ase No. ;A'3B3. This application "as
li<e"ise opposed b/ respondent PD!, citin, the sa)e ,rounds it raised in
opposin, !hell?s application in 6R# ase No. ;B'5A.
1<. $n the a.oresaid case, petitioner 6R# therea.ter rendered a Decision dated
Pune 1B, 1BB% appro0in, the application o. alte7. This 6R# Decision "as
challen,ed b/ PD!, a,ain on the sa)e ,rounds it raised in 5'G.R. !P No.
%A661, in a petition .or re0ie" 2led "ith the ourt o. 5ppeals, "here the sa)e
"as doc<eted as 5'G.R. !P No. %B&BB.
2>. !ubse(uentl/, the appellate court?s !i7teenth Di0ision dis)issed PD!?s
petition in a Decision dated Fa/ 14, 1BB3
21. Iss!:
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$N P5!!$NG P4DGF6NT 5ND F5U$NG PR8N84N6F6NT! 8N P4R63N 68N8F$
5ND P83$N $!!46! 8N P6TR8364F #4!$N6!! -1$1 5R6 -$T1$N T16 R653F
8C T16 6N6RGN R6G435T8RN #85RD -1$1 15! 5 R68GN$X6D 6HP6RT$!6 $N
8$3 68N8F$!=
23. H!"#:
2?. (!ec. 1B 5rt. H$$) The pro0ision is a state)ent o. public polic/ on
)onopolies and on co)binations in restraint o. trade. !ec. 1B is anti'trust in
histor/ and spirit. $t espouses co)petition. 8nl/ co)petition "hich is .air can
release the creati0e .orces o. the )ar<et. o)petition underlies the pro0ision.
The ob+ecti0e o. anti'trust la" is Jto assure a co)petiti0e econo)/ based upon
the belie. that throu,h co)petition producers "ill stri0e to satis./ consu)er
"ants at the lo"est price "ith the sacri2ce o. the .e"est resources. o)petition
a)on, producers allo"s consu)ers to bid .or ,oods and ser0ices and, thus
)atches their desires "ith societ/?s opportunit/ costs. 5dditionall/, there is a
reliance upon Jthe operation o. the J)ar<etK s/ste) (.ree enterprise) to decide
"hat shall be produced, ho" resources shall be allocated in the production
process, and to "ho) 0arious products "ill be distributed. The )ar<et s/ste)
relies on the consu)er to decide "hat and ho" )uch shall be produced, and on
co)petition, a)on, producers "ho "ill )anu.acture it.
+!Ga*cia vs EEec0tive Sec*eta*> GR 1$+=71
G.R. N(. 132?;1 D!c!+$!& 19) 1<<<
CONGRESSMAN ENRIIUE T. GARCIA) petitioner,
0s.
HON. RENATO C. CORONA) %' *%s ca1ac%t= as t*! ED!ct%v! S!c&!ta&=) HON.
FRANCISCO VIRAH) %' *%s ca1ac%t= as t*! S!c&!ta&= (- E'!&4=) CALTEJ
PHILIPPINES INC.) PILIPINAS SHELL PETROLEUM CORP. a'# PETRON CORP.)
respondents.
Facts:
R.5. ;1;& "as struc< do"n as in0alid because three <e/ pro0isions intended to pro)ote
.ree co)petition "ere sho"n to achie0e the opposite result. Fore speci2call/, this ourt
ruled that its pro0isions on tari: di:erential, stoc<in, o. in0entories, and predator/
pricin, inhibit .air co)petition, encoura,e )onopolistic po"er, and inter.ere "ith the
.ree interaction o. the )ar<et .orces.
-hile R.5. ;1;& contained a separabilit/ clause, it "as declared unconstitutional in its
entiret/ since the three (3) o:endin, pro0isions so per)eated the la" that the/ "ere so
inti)atel/ the esse o. the la". Thus, the "hole statute had to be in0alidated.
5s a result o. the Tatad decision, on,ress enacted Republic 5ct No. ;4AB, a ne"
dere,ulation la" "ithout the o:endin, pro0isions o. the earlier la". Petitioner 6nri(ue T.
Garcia, a )e)ber o. on,ress, has no" brou,ht this petition see<in, to declare !ection
1B thereo., "hich sets the ti)e o. .ull dere,ulation, unconstitutional. 5.ter .ailin, in his
atte)pts to ha0e on,ress incorporate in the la" the econo)ic theor/ he espouses,
petitioner no" as<s us, in the na)e o. upholdin, the onstitution, to undo a 0iolation
"hich he clai)s on,ress has co))itted.
The assailed !ection 1B o. R.5. ;4AB states in .ullG
!ec. 1B. $tart o% &ull ere'ulation. Z Cull dere,ulation o. the $ndustr/ shall start 20e (5)
)onths .ollo"in, the e:ecti0it/ o. this 5ctG (rovi)e), *owever, That "hen the public
interest so re(uires, the President )a/ accelerate the start o. .ull dere,ulation upon the
reco))endation o. the D86 and the Depart)ent o. Cinance (D8C) "hen the prices o.
crude oil and petroleu) products in the "orld )ar<et are declinin, and the 0alue o. the
peso in relation to the 4! dollar is stable, ta<in, into account rele0ant trends and
prospects> (rovi)e), %urt*er, That the .ore,oin, pro0ision not"ithstandin,, the 20e (5)'
)onth Transition Phase shall continue to appl/ to 3PG, re,ular ,asoline and <erosene as
sociall/'sensiti0e petroleu) products and said petroleu) products shall be co0ered b/
the auto)atic pricin, )echanis) durin, the said period.
4pon the i)ple)entation o. .ull dere,ulation as pro0ided herein, the Transition Phase is
dee)ed ter)inated and the .ollo"in, la"s are repealedG
a) Republic 5ct No. 61A3, as a)ended>
b) !ection 5 o. 67ecuti0e 8rder No. 1A%, as a)ended>
c) 3etter o. $nstruction No. 1431, dated 8ctober 15, 1B;4>
d) 3etter o. $nstruction No. 1441, dated No0e)ber %&, 1B;4, as a)ended>
e) 3etter o. $nstruction No. 146&, dated Fa/ B, 1B;5>
.) Presidential Decree No. 1;;B> and
,) Presidential Decree No. 1B56, as a)ended b/ 67ecuti0e 8rder No. 13AG
(rovi)e), *owever, That in case .ull dere,ulation is started b/ the President in the
e7ercise o. the authorit/ pro0ided in this !ection, the .ore,oin, la"s shall continue to be
in .orce and e:ect "ith respect to 3PG, re,ular ,asoline and <erosene .or the rest o. the
20e (5)')onth period.
Petitioner contends that !ection 1B o. R.5. ;4AB, "hich prescribes the period .or the
re)o0al o. price control on ,asoline and other 2nished products and .or the .ull
dere,ulation o. the local do"nstrea) oil industr/, is patentl/ contrar/ to public interest
and there.ore unconstitutional because "ithin the short span o. 20e )onths, the )ar<et
is still do)inated and controlled b/ an oli,opol/ o. the three (3) pri0ate respondents,
na)el/, !hell, alte7 and Petron.
The ob+ecti0e o. the petition is decepti0el/ si)ple. $t states that i. the constitutional
)andate a,ainst )onopolies and co)binations in restraint o.
trade
2
is to be obe/ed, there should be inde2nite and open'ended price controls on
,asoline and other oil products .or as lon, as necessar/. This "ill alle,edl/ pre0ent the
O#i, 3O Z !hell, alte7 and Petron Z .ro) price'27in, and o0erpricin,. Petitioner calls
the inde2nite retention o. price controls as Opartial dere,ulationO.
Iss!s:
5re the )ethod and the )anner chosen b/ Go0ern)ent to acco)plish its cherished
,oal o:ensi0e to the onstitution= $s inde2nite price control in the )anner proposed b/
petitioner the onl/ .easible and le,al "a/ to achie0e it=
H!"#:
Petition is dis)isse.
The pro0isions on tari: di:erential, stoc<in, o. in0entories, and predator/ pricin,
inhibited .air co)petition, encoura,ed )onopolistic po"er and inter.ered "ith the .ree
interaction o. the )ar<et .orces.
The )ost i)portant part o. dere,ulation is .reedo) .ro) price control. $ndeed, the .ree
pla/ o. )ar<et .orces throu,h dere,ulation and "hen to i)ple)ent it represent one
option to sol0e the proble)s o. the oil'consu)in, public.
R.5. ;4AB, the present dere,ulation la", "as enacted to i)ple)ent 5rticle H$$, !ection
1B o. the onstitution "hich pro0idesG
[The !tate shall re,ulate or prohibit )onopolies "hen the public interest so re(uires.
No co)binations in restraint o. trade or un.air co)petition shall be allo"ed.
This is so because the Go0ern)ent belie0es that dere,ulation "ill e0entuall/ pre0ent
)onopol/. The si)plest .or) o. )onopol/ e7ists "hen there is onl/ one seller or
producer o. a product or ser0ice .or "hich there are no substitutes. $n its )ore co)ple7
.or), )onopol/ is de2ned as the +oint ac(uisition or )aintenance b/ )e)bers o. a
conspirac/, .or)ed .or that purpose, o. the po"er to control and do)inate trade and
co))erce in a co))odit/ to such an e7tent that the/ are able, as a ,roup, to e7clude
actual or potential co)petitors .ro) the 2eld, acco)panied "ith the intention and
purpose to e7ercise such po"er.
-here t"o or three or a .e" co)panies act in concert to control )ar<et prices and
resultant pro2ts, the )onopol/ is called an oli,opol/ or cartel. $t is a co)bination in
restraint o. trade.
8ur rulin, in +ata) is cate,orical that the onstitution*s 5rticle H$$, !ection 1B, is anti'
trust in histor/ and spirit. $t espouses co)petition. -e ha0e stated that onl/ co)petition
"hich is .air can release the creati0e .orces o. the )ar<et.
$n his recital o. the antecedent circu)stances, petitioner repeats in abbre0iated .or)
the .actual 2ndin,s and conclusions "hich led the ourt to declare R.5. ;1;&
unconstitutional. The .orei,n oli,opol/ or cartel .or)ed b/ respondents !hell, alte7 and
Petron, their indul,in, in price'27in, and o0erpricin,, their bloc<ade tactics "hich
e:ecti0el/ obstructed the entr/ o. ,enuine co)petitors, the dan,ers posed b/ the oil
cartel to national securit/ and econo)ic de0elop)ent, and other pre0ailin, senti)ents
are stated as a7io)atic truths. The/ are repeated in capsuliDed conte7t as the current
bac<,round .acts o. the present petition.
The e)pirical e7istence o. this deplorable situation "as precisel/ the reason "h/
on,ress enacted the oil dere,ulation la". The e0ils arisin, .ro) conspiratorial acts o.
)onopol/ are reco,niDed as clear and present. #ut the enu)eration o. the e0ils b/ our
+ata) decision "as not .or the purpose o. +usti./in, continued ,o0ern)ent control,
especiall/ price control. The ob+ecti0e "as, rather, the opposite. The e0ils "ere
e)phasiDed to sho" the need .or .ree co)petition in a dere,ulated industr/. 5nd to be
sure, the )easures to address these e0ils are .or on,ress to deter)ine, but the/ ha0e
to )eet the test o. constitutional 0alidit/.
The ourt respects the le,islati0e 2ndin, that dere,ulation is the polic/ ans"er to the
proble)s. $t bears stressin, that R.5. ;1;& "as declared in0alid not because
dere,ulation is unconstitutional. The la" "as struc< do"n because, as cra.ted, three <e/
pro0isions plainl/ encoura,ed the continued e7istence i. not the proli.eration o. the
constitutionall/ proscribed e0ils o. )onopol/ and restraint o. trade.
$n sharp contrast, the present petition lac<s a .actual .oundation speci2call/ hi,hli,htin,
the need to declare the challen,ed pro0ision unconstitutional. There is a dearth o.
rele0ant, reliable, and substantial e0idence to support petitioner*s theor/ that price
control )ust continue e0en as Go0ern)ent is tr/in, its best to ,et out o. re,ulatin, the
oil industr/. The .acts o. the petition are, in the )ain, a ,eneral dissertation on the e0ils
o. )onopol/.
Petitioner o0erloo<s the .act that on,ress enacted the dere,ulation la" e7actl/
because o. the )onopol/ e0ils he )entions in his petition. on,ress instituted the li.tin,
o. price controls in the belie. that .ree and .air co)petition "as the best re)ed/ a,ainst
)onopol/ po"er. $n other "ords, petitioner*s .acts are also the reasons "h/ on,ress
li.ted price controls and "h/ the President accelerated the process. The .acts adduced
in .a0or o. continued and inde2nite price control are the sa)e .acts "hich supported
"hat on,ress belie0es is an e7ercise o. "isdo) and discretion "hen it chose the path
o. speed/ dere,ulation and re+ected on,ress)an Garcia*s econo)ic theor/.
The petition states that it is usin, the 0er/ thou,hts and "ords o. the ourt in its +ata)
decision. Those thou,hts and "ords, ho"e0er, "ere directed a,ainst the tari:
di:erential, the in0entor/ re(uire)ent, and predator/ pricin,, not a,ainst dere,ulation
as a polic/ and not a,ainst the li.tin, o. price controls.
Petitioner, there.ore, en,a,es in a le,al parado7. 1e .ails to sho" ho" there can be
dere,ulation "hile retainin, ,o0ern)ent price control. Dere,ulation )eans the li.tin, o.
control, ,o0ernance and direction throu,h rule or re,ulation. $t )eans that the re,ulated
industr/ is .reed .ro) the controls, ,uidance, and restrictions to "hich it used to be
sub+ected. The use o. the "ord OpartialO to (uali./ dere,ulation is su,ar'coatin,.
Petitioner is reall/ a,ainst dere,ulation at this ti)e.
EB *ABC
:G.R. No. 132951. .e6e%ber 17, 1999;
#ONGRESSAN ENRI<UE T. GAR#IA, petitioner, vs. =ON. RENATO #.
#ORONA, &' 5&( 6a+a6&)y a( )5e E*e6u)&-e Se6re)ary, =ON.
FRAN#IS#O /IRA>, &' 5&( 6a+a6&)y a( )5e Se6re)ary o4 E'er1y,
#ALTE? "=ILI""INES IN#., "ILI"INAS S=ELL "ETROLEU
#OR". a'$ "ETRON #OR"., respondents.
. E # I S I O N
>NARES-SANTIAGO, J.@
2n Bo5ember ., 199-, t#is Court in Tatad v. Secretary of the Department of
Energy and agman, et al., v. !on. "u#en Torres, et al.,
J1K
declared Republic Act Bo% I1IE,
entitled 6An Act Deregulating t#e Do"nstream 2il (ndustr$ and For 2t#er 0urposes7,
unconstitutional, and its implementing E1ecuti5e 2rder Bo% 39, 5oid%
R%A% I1IE "as strucH do"n as in5alid because t#ree He$ pro5isions intended to promote 'ree
competition "ere s#o"n to ac#ie5e t#e opposite result% )ore speci'icall$, t#is Court ruled t#at
its pro5isions on tari'' di''erential, stocHing o' in5entories, and predator$ pricing in#ibit 'air
competition, encourage monopolistic po"er, and inter'ere "it# t#e 'ree interaction o' t#e marHet
'orces%
>#ile R%A% I1IE contained a separabilit$ clause, it "as declared unconstitutional in its
entiret$ since t#e t#ree 93; o''ending pro5isions so permeated t#e la" t#at t#e$ "ere so
intimatel$ t#e esse o' t#e la"% T#us, t#e "#ole statute #ad to be in5alidated%
As a result o' t#e Tatad decision, Congress enacted Republic Act Bo% I!-9, a ne"
deregulation la" "it#out t#e o''ending pro5isions o' t#e earlier la"% 0etitioner Enri@ue T%
Carcia, a member o' Congress, #as no" broug#t t#is petition seeHing to declare Section 19
t#ereo', "#ic# sets t#e time o' 'ull deregulation, unconstitutional% A'ter 'ailing in #is attempts to
#a5e Congress incorporate in t#e la" t#e economic t#eor$ #e espouses, petitioner no" asHs us, in
t#e name o' up#olding t#e Constitution, to undo a 5iolation "#ic# #e claims Congress #as
committed%
T#e assailed Section 19 o' R%A% I!-9 states in 'ull:
SE#. 19. Start of Full Deregulation. === Full deregulation o' t#e (ndustr$ s#all start
'i5e 9.; mont#s 'ollo"ing t#e e''ecti5it$ o' t#is Act: $rovided, ho%ever, T#at "#en
t#e public interest so re@uires, t#e 0resident ma$ accelerate t#e start o' 'ull
deregulation upon t#e recommendation o' t#e D2E and t#e Department o' Finance
9D2F; "#en t#e prices o' crude oil and petroleum products in t#e "orld marHet are
declining and t#e 5alue o' t#e peso in relation to t#e ?S dollar is stable, taHing into
account rele5ant trends and prospects8 $rovided, further, T#at t#e 'oregoing pro5ision
not"it#standing, t#e 'i5e 9.;=mont# Transition 0#ase s#all continue to appl$ to /0C,
regular gasoline and Herosene as sociall$=sensiti5e petroleum products and said
petroleum products s#all be co5ered b$ t#e automatic pricing mec#anism during t#e
said period%
?pon t#e implementation o' 'ull deregulation as pro5ided #erein, t#e Transition 0#ase
is deemed terminated and t#e 'ollo"ing la"s are repealed:
a; Republic Act Bo% 1-3, as amended8
b; Section . o' E1ecuti5e 2rder Bo% 1-,, as amended8
c; /etter o' (nstruction Bo% 1!31, dated 2ctober 1., 19I!8
d; /etter o' (nstruction Bo% 1!!1, dated Bo5ember ,E, 19I!, as amended8
e; /etter o' (nstruction Bo% 1!E, dated )a$ 9, 19I.8
'; 0residential Decree Bo% 1II98 and
g; 0residential Decree Bo% 19., as amended b$ E1ecuti5e 2rder Bo% 13-:
$rovided, ho%ever, T#at in case 'ull deregulation is started b$ t#e 0resident in t#e
e1ercise o' t#e aut#orit$ pro5ided in t#is Section, t#e 'oregoing la"s s#all continue to
be in 'orce and e''ect "it# respect to /0C, regular gasoline and Herosene 'or t#e rest
o' t#e 'i5e 9.;=mont# period%
0etitioner contends t#at Section 19 o' R%A% I!-9, "#ic# prescribes t#e period 'or t#e
remo5al o' price control on gasoline and ot#er 'inis#ed products and 'or t#e 'ull deregulation o'
t#e local do"nstream oil industr$, is patentl$ contrar$ to public interest and t#ere'ore
unconstitutional because "it#in t#e s#ort span o' 'i5e mont#s, t#e marHet is still dominated and
controlled b$ an oligopol$ o' t#e t#ree 93; pri5ate respondents, namel$, S#ell, Calte1 and 0etron%
T#e ob4ecti5e o' t#e petition is decepti5el$ simple% (t states t#at i' t#e constitutional
mandate against monopolies and combinations in restraint o' trade
J,K
is to be obe$ed, t#ere s#ould
be inde'inite and open=ended price controls on gasoline and ot#er oil products 'or as long as
necessar$% T#is "ill allegedl$ pre5ent t#e 6*ig 37 === S#ell, Calte1 and 0etron === 'rom price=
'i1ing and o5erpricing% 0etitioner calls t#e inde'inite retention o' price controls as 6partial
deregulation7%
T#e grounds relied upon in t#e petition are:
A.
SECT(2B 19 2F R%A% B2% I!-9 >&(C& 0R2F(DES F2R F?//
DEREC?/AT(2B F(FE 9.; )2BT&S 2R EAR/(ER F2//2>(BC T&E
EFFECT(F(TD 2F T&E /A>, (S C/AR(BC/D 0R2=2/(C202/D, ABT(=
C2)0ET(T(2B ABD ABT(=0E20/E, ABD (S T&EREF2RE 0ATEBT/D
?BC2BST(T?T(2BA/ F2R *E(BC (B CR2SS ABD CDB(CA/
C2BTRAFEBT(2B 2F T&E C2BST(T?T(2BA/ 02/(CD ABD C2))ABD
E)*2D(ED (B ARTC/E +((, SECT(2B 19 2F T&E 19I- C2BST(T?T(2B
ACA(BST )2B202/(ES ABD C2)*(BAT(2BS (B RESTRA(BT 2F TRADE%
*%
SA(D SECT(2B 19 2F R%A% Bo% I!-9 (S C/AR(BC/D 0R2=2/(C202/D, ABT(=
C2)0ET(T(2B ABD ABT(=0E20/E, F2R T&E F?RT&ER REAS2B T&AT (T
0A/0A*/D ABD CDB(CA//D F(2/ATES T&E FERD 2*JECT(FE ABD
0?R02SE 2F R%A% B2% I!-9, >&(C& (S T2 EBS?RE A TR?/D C2)0ET(T(FE
)ARLET ?BDER A REC()E 2F FA(R 0R(CES%
C%
SA(D SECT(2B 19 2F R%A% Bo% I!-9, *E(BC C/AR(BC/D 0R2=2/(C202/D,
ABT(=C2)0ET(T(2B ABD ABT(=0E20/E, *E(BC 0ATEBT/D
?BC2BST(T?T(2BA/ ABD *E(BC 0A/0A*/D F(2/AT(FE 2F T&E /A><S
02/(CD ABD 0?R02SE 2F EBS?R(BC A TR?/D C2)0ET(T(FE )ARLET
?BDER A REC()E 2F FA(R 0R(CES, (S A FERD CRAFE ABD CR(EF2?S
A*?SE 2F D(SCRET(2B 2B T&E 0ART 2F T&E /EC(S/AT(FE ABD
E+EC?T(FE *RABC&ES 2F C2FERB)EBT%
..
0RE)AT?RE F?// DEREC?/AT(2B ?BDER SECT(2B 19 2F R%A% B2% I!-9
)AD ABD S&2?/D T&EREF2RE *E DEC/ARED B?// ABD F2(D EFEB AS
T&E REST 2F (TS 0R2F(S(2BS RE)A(B (B F2RCE, S?C& AS T&E
TRABS(T(2B 0&ASE 2R 0ART(A/ DEREC?/AT(2B >(T& 0R(CE
C2BTR2/S T&AT EBS?RES T&E 0R2TECT(2B 2F T&E 0?*/(C (BTEREST
*D 0REFEBT(BC T&E *(C 3 2/(C202/D<S 0R(CE=F(+(BC ABD
2FER0R(C(BC%
J3K
T#e issues in5ol5ed in t#e deregulation o' t#e do"nstream oil industr$ are o' paramount
signi'icance% T#e rami'ications, international and local in scope, are comple1% T#e impact on
t#e nation<s econom$ is per5asi5e and 'ar=reac#ing% T#e amounts in5ol5ed in t#e oil business are
immense% Fluctuations in t#e suppl$ and price o' oil products #a5e a dramatic e''ect on economic
de5elopment and public "el'are% As pointed out in t#e Tataddecision, 'e" cases carr$ a
surpassing importance on t#e dail$ li'e o' e5er$ Filipino% T#e issues a''ect e5er$bod$ 'rom t#e
poorest "age=earners and t#eir 'amilies to t#e ric#est entrepreneurs, 'rom industrial giants to
#umble consumers%
2ur decision in t#is case is complicated b$ t#e unstable oil prices in t#e "orld marHet% E5en
as t#is case is pending, t#e price o' 20EC oil is escalating to record le5els% >e #a5e to
emp#asize t#at our decision #as not#ing to do "it# "orld"ide 'luctuations in oil prices and t#e
counter=measures o' Co5ernment eac# time a ne" de5elopment taHes place%
T#e most important part o' deregulation is 'reedom 'rom price control% (ndeed, t#e 'ree pla$
o' marHet 'orces t#roug# deregulation and "#en to implement it represent one option to sol5e t#e
problems o' t#e oil=consuming public% T#ere are ot#er considerations "#ic# ma$ be taHen into
account suc# as t#e reduction o' ta1es on oil products, t#e reinstitution o' an 2il 0rice
Stabilization Fund, t#e c#oice bet"een go5ernment subsidies taHen 'rom t#e regular ta1pa$ing
public on one #and and t#e increased costs being s#ouldered onl$ b$ users o' oil products on t#e
ot#er, and most important, t#e immediate repeal o' t#e oil deregulation la" as "rong
polic$% 0etitioner "ants t#e setting o' prices to be done b$ Co5ernment instead o' being
determined b$ 'ree marHet 'orces% &is pre'erence is continued price control "it# no 'i1ed end in
sig#t% A simple glance at t#e 'actors surrounding t#e present problems besetting t#e oil industr$
s#o"s t#at t#e$ are economic in nature%
R%A% I!-9, t#e present deregulation la", "as enacted to implement Article +((, Section 19
o' t#e Constitution "#ic# pro5ides:
T#e State s#all regulate or pro#ibit monopolies "#en t#e public interest so
re@uires% Bo combinations in restraint o' trade or un'air competition s#all be allo"ed%
T#is is so because t#e Co5ernment belie5es t#at deregulation "ill e5entuall$ pre5ent
monopol$% T#e simplest 'orm o' monopol$ e1ists "#en t#ere is onl$ one seller or producer o' a
product or ser5ice 'or "#ic# t#ere are no substitutes% (n its more comple1 'orm, monopol$ is
de'ined as t#e 4oint ac@uisition or maintenance b$ members o' a conspirac$, 'ormed 'or t#at
purpose, o' t#e po"er to control and dominate trade and commerce in a commodit$ to suc# an
e1tent t#at t#e$ are able, as a group, to e1clude actual or potential competitors 'rom t#e 'ield,
accompanied "it# t#e intention and purpose to e1ercise suc# po"er%
J!K
>#ere t"o or t#ree or a 'e" companies act in concert to control marHet prices and resultant
pro'its, t#e monopol$ is called an oligopol$ or cartel% (t is a combination in restraint o' trade%
T#e perennial s#ortage o' oil suppl$ in t#e 0#ilippines is e1acerbated b$ t#e 'urt#er 'act t#at
t#e importation, re'ining, and marHeting o' t#is precious commodit$ are in t#e #ands o' a cartel,
local but made up o' 'oreign=o"ned corporations% *e'ore t#e start o' deregulation, t#e t#ree
pri5ate respondents controlled t#e entire oil industr$ in t#e 0#ilippines%
(t bears reiterating at t#e outset t#at t#e deregulation o' t#e oil industr$ is a polic$
determination o' t#e #ig#est order% (t is un@uestionabl$ a priorit$ program o' Co5ernment% T#e
Department o' Energ$ Act o' 199,
J.K
e1pressl$ mandates t#at t#e de5elopment and updating o' t#e
e1isting 0#ilippine energ$ program 6s#all include a polic$ direction to"ards deregulation o' t#e
po"er and energ$ industr$%7
*e t#at as it ma$, "e are not concerned "it# "#et#er or not t#ere s#ould be
deregulation% T#is is outside our 4urisdiction% T#e 4udgment on t#e issue is a settled matter and
onl$ Congress can re5erse it% Rat#er, t#e @uestion t#at "e s#ould address #ere is === are t#e
met#od and t#e manner c#osen b$ Co5ernment to accomplis# its c#eris#ed goal o''ensi5e to t#e
ConstitutionA (s inde'inite price control in t#e manner proposed b$ petitioner t#e onl$ 'easible
and legal "a$ to ac#ie5e itA
0etitioner #as taHen upon #imsel' a most c#allenging tasH% ?n@uestionabl$, t#e direction
to"ards "#ic# t#e nation<s e''orts at economic and social upli'tment s#ould be addressed is a
'unction o' Congress and t#e 0resident% (n t#e e1ercise o' t#is 'unction, Congress and t#e
0resident #a5e ob5iousl$ determined t#at speed$ deregulation is t#e ans"er to t#e acHno"ledged
dominion b$ oligopolistic 'orces o' t#e oil industr$% T#us, immediatel$ a'ter R%A% I1IE "as
declared unconstitutional in t#e Tatad case, Congress tooH resolute steps to 'as#ion ne"
legislation to"ards t#e ob4ecti5e o' t#e earlier la"% (n5oHing t#e Constitution, petitioner no"
"ants to slo" do"n t#e process%
>#ile t#e Court respects t#e 'irm resol5e displa$ed b$ Congress and t#e 0resident, all
departments o' Co5ernment are e@uall$ bound b$ t#e so5ereign "ill e1pressed in t#e commands
o' t#e Constitution% T#ere is a need 'or utmost care i' t#is Court is to 'ait#'ull$ disc#arge its
duties as arbitral guardian o' t#e Constitution% >e cannot encroac# on t#e polic$ 'unctions o' t#e
t"o ot#er great departments o' Co5ernment% *ut neit#er can "e ignore an$ o5erstepping o'
constitutional limitations% /ocating t#e correct balance bet"een legalit$ and polic$,
constitutional boundaries and 'reedom o' action, and 5alidit$ and e1pedition is t#is Court<s
dilemma as it resol5es t#e legitimac$ o' a Co5ernment program aimed at gi5ing e5er$ Filipino a
more secure, 'ul'illing and abundant li'e%
2ur ruling in Tatad is categorical t#at t#e Constitution<s Article +((, Section 19, is anti=trust
in #istor$ and spirit% (t espouses competition% >e #a5e stated t#at onl$ competition "#ic# is 'air
can release t#e creati5e 'orces o' t#e marHet% >e ruled t#at t#e principle "#ic# underlies t#e
constitutional pro5ision is competition% T#us:
Section 19, Article +(( o' our Constitution is anti=trust in #istor$ and in spirit% (t
espouses competition% T#e desirabilit$ o' competition is t#e reason 'or t#e pro#ibition
against restraint o' trade, t#e reason 'or t#e interdiction o' un'air competition, and t#e
reason 'or regulation o' unmitigated monopolies% Competition is t#us t#e underl$ing
principle o' section 19, Article +(( o' our Constitution "#ic# cannot be 5iolated b$
R%A% Bo% I1IE% >e subscribe to t#e obser5ation o' 0ro'% Cell#orn t#at t#e ob4ecti5e
o' anti=trust la" is 6to assure a competiti5e econom$, based upon t#e belie' t#at
t#roug# competition producers "ill stri5e to satis'$ consumer "ants at t#e lo"est
price "it# t#e sacri'ice o' t#e 'e"est resources% Competition among producers allo"s
consumers to bid 'or goods and ser5ices, and t#us matc#es t#eir desires "it# societ$<s
opportunit$ costs%7 &e adds "it# appropriateness t#at t#ere is a reliance upon 6t#e
operation o' t#e PmarHet< s$stem 9'ree enterprise; to decide "#at s#all be produced,
#o" resources s#all be allocated in t#e production process, and to "#om t#e 5arious
products "ill be distributed% T#e marHet s$stem relies on t#e consumer to decide
"#at and #o" muc# s#all be produced, and on competition, among producers to
determine "#o "ill manu'acture it%7
JK
(n #is recital o' t#e antecedent circumstances, petitioner repeats in abbre5iated 'orm t#e
'actual 'indings and conclusions "#ic# led t#e Court to declare R%A% I1IE unconstitutional% T#e
'oreign oligopol$ or cartel 'ormed b$ respondents S#ell, Calte1 and 0etron, t#eir indulging in
price='i1ing and o5erpricing, t#eir blocHade tactics "#ic# e''ecti5el$ obstructed t#e entr$ o'
genuine competitors, t#e dangers posed b$ t#e oil cartel to national securit$ and economic
de5elopment, and ot#er pre5ailing sentiments are stated as a1iomatic trut#s% T#e$ are repeated
in capsulized conte1t as t#e current bacHground 'acts o' t#e present petition%
T#e empirical e1istence o' t#is deplorable situation "as precisel$ t#e reason "#$ Congress
enacted t#e oil deregulation la"% T#e e5ils arising 'rom conspiratorial acts o' monopol$ are
recognized as clear and present% *ut t#e enumeration o' t#e e5ils b$ our Tatad decision "as not
'or t#e purpose o' 4usti'$ing continued go5ernment control, especiall$ price control% T#e
ob4ecti5e "as, rat#er, t#e opposite% T#e e5ils "ere emp#asized to s#o" t#e need 'or 'ree
competition in a deregulated industr$% And to be sure, t#e measures to address t#ese e5ils are 'or
Congress to determine, but t#e$ #a5e to meet t#e test o' constitutional 5alidit$%
T#e Court respects t#e legislati5e 'inding t#at deregulation is t#e polic$ ans"er to t#e
problems% (t bears stressing t#at R%A% I1IE "as declared in5alid not because deregulation is
unconstitutional% T#e la" "as strucH do"n because, as cra'ted, t#ree He$ pro5isions plainl$
encouraged t#e continued e1istence i' not t#e proli'eration o' t#e constitutionall$ proscribed e5ils
o' monopol$ and restraint o' trade%
(n s#arp contrast, t#e present petition lacHs a 'actual 'oundation speci'icall$ #ig#lig#ting t#e
need to declare t#e c#allenged pro5ision unconstitutional% T#ere is a deart# o' rele5ant, reliable,
and substantial e5idence to support petitioner<s t#eor$ t#at price control must continue e5en as
Co5ernment is tr$ing its best to get out o' regulating t#e oil industr$% T#e 'acts o' t#e petition
are, in t#e main, a general dissertation on t#e e5ils o' monopol$%
0etitioner o5erlooHs t#e 'act t#at Congress enacted t#e deregulation la" e1actl$ because o'
t#e monopol$ e5ils #e mentions in #is petition% Congress instituted t#e li'ting o' price controls in
t#e belie' t#at 'ree and 'air competition "as t#e best remed$ against monopol$ po"er% (n ot#er
"ords, petitioner<s 'acts are also t#e reasons "#$ Congress li'ted price controls and "#$ t#e
0resident accelerated t#e process% T#e 'acts adduced in 'a5or o' continued and inde'inite price
control are t#e same 'acts "#ic# supported "#at Congress belie5es is an e1ercise o' "isdom and
discretion "#en it c#ose t#e pat# o' speed$ deregulation and re4ected Congressman Carcia<s
economic t#eor$%
T#e petition states t#at it is using t#e 5er$ t#oug#ts and "ords o' t#e Court in
its Tatad decision% T#ose t#oug#ts and "ords, #o"e5er, "ere directed against t#e tari''
di''erential, t#e in5entor$ re@uirement, and predator$ pricing, not against deregulation as a
polic$ and not against t#e li'ting o' price controls%
A dramatic, at times e1pansi5e and grandilo@uent, reiteration o' t#e same bacHground
circumstances narrated in Tatad does not s@uarel$ sustain petitioner<s no5el t#esis t#at t#ere can
be deregulation "it#out li'ting price controls%
0etitioner ma$ call t#e industr$ sub4ect to price controls as deregulated% (n enacting t#e
c#allenged pro5ision, Congress, on t#e ot#er #and, #as declared t#at an$ industr$ "#ose prices
and pro'its are 'i1ed b$ go5ernment aut#orit$ remains a #ig#l$ regulated one%
0etitioner, t#ere'ore, engages in a legal parado1% &e 'ails to s#o" #o" t#ere can be
deregulation "#ile retaining go5ernment price control% Deregulation means t#e li'ting o' control,
go5ernance and direction t#roug# rule or regulation% (t means t#at t#e regulated industr$ is 'reed
'rom t#e controls, guidance, and restrictions to "#ic# it used to be sub4ected% T#e use o' t#e
"ord 6partial7 to @uali'$ deregulation is sugar=coating% 0etitioner is reall$ against deregulation
at t#is time%
0etitioner states t#at price control is good% &e claims t#at it "as t#e regulation o' t#e
importation o' 'inis#ed oil products "#ic# led to t#e e1it o' competitors and t#e consolidation
and dominion o' t#e marHet b$ an oligopol$, not price control% Congress and t#e 0resident t#inH
ot#er"ise%
T#e argument t#at price control is not t#e 5illain in t#e intrusion and gro"t# o' monopol$
appears to be pure t#eor$ not 5alidated b$ e1perience% T#ere can be no den$ing t#e 'act t#at t#e
e5ils mentioned in t#e petition arose "#ile t#ere "as price control% T#e dominance o' t#e so=
called 6*ig 37 became entrenc#ed during t#e regime o' price control% )ore importantl$, t#e
ascertainment o' t#e cause and t#e met#od o' dismantling t#e oligopol$ t#us created are a matter
o' legislati5e and e1ecuti5e c#oice% T#e 4udicial process is e@uipped to #andle legalit$ but not
"isdom o' c#oice and t#e e''icac$ o' solutions%
0etitioner engages in anot#er contradiction "#en #e puts 'or"ard "#at #e calls a sel'=
e5ident trut#% &e states t#at a trul$ competiti5e marHet and 'air prices cannot be legislated into
e1istence% &o"e5er, t#e trul$ competiti5e marHet is not being created or 'as#ioned b$ t#e
c#allenged legislation% T#e marHet is simpl$ 'reed 'rom legislati5e controls and allo"ed to gro"
and de5elop 'ree 'rom go5ernment inter'erence% R%A% I!-9 actuall$ allo"s t#e 'ree pla$ o'
suppl$ and demand to dictate prices% 0etitioner "ants a go5ernment o''icial or board to continue
per'orming t#is tasH% (nde'inite and open=ended price control as ad5ocated b$ petitioner "ould
be to continue a regime o' legislated regulation "#ere 'ree competition cannot possibl$
'louris#% Control is t#e antit#esis o' competition% To grant t#e petition "ould mean t#at t#e
Co5ernment is not Heen on allo"ing a 'ree marHet to de5elop% 0etitioner<s 6sel'=e5ident trut#7
t#us supports t#e 5alidit$ o' t#e pro5ision o' la" #e opposes%
Be" pla$ers in t#e oil industr$ inter5ened in t#is case% According to t#em, it is t#e 'ree
marHet polic$ and atmosp#ere o' deregulation "#ic# attracted and broug#t t#e ne" participants,
t#emsel5es included, into t#e marHet% T#e inter5enors e1press t#eir 'ear t#at t#is Court "ould
o5errule legislati5e polic$ and replace it "it# petitioner<s o"n legislati5e program%
T#e 'actual allegations o' t#e inter5enors #a5e not been re'uted and "e see no reason to
doubt t#em% T#eir argument t#at t#e co=e1istence o' man$ 5iable ri5als create 'ree marHet
conditions induces competition in product @ualit$ and per'ormance and maHes a5ailable to
consumers an e1panded range o' c#oices cannot be seriousl$ disputed%
2n t#e ot#er #and, t#e pleadings o' public and pri5ate respondents bot# put 'ort# t#e
argument t#at t#e c#allenged pro5ision is a polic$ decision o' Congress and t#at t#e "isdom o'
t#e pro5ision is outside t#e aut#orit$ o' t#is Court to consider% >e agree% As "e #a5e ruled
in &orfe v. &utuc
J-K
:
9(;t is "ell to remember t#at t#is Court, in t#e language o' Justice /aurel, 6does not
pass upon @uestion or "isdom, 4ustice or e1pedienc$ o' legislation%7 As e1pressed b$
Justice Tuason: 6(t is not t#e pro5ince o' t#e courts to super5ise legislation and Heep
it "it#in t#e bounds o' propriet$ and common sense% T#at is primaril$ and
e1clusi5el$ a legislati5e concern%7 T#ere can be no possible ob4ection t#en to t#e
obser5ation o' Justice )ontema$or: 6As long as la"s do not 5iolate an$
Constitutional pro5ision, t#e Courts merel$ interpret and appl$ t#em regardless o'
"#et#er or not t#e$ are "ise or salutar$%7 For t#e$, according to Justice /abrador, 6are
not supposed to o5erride legitimate polic$ and 1 1 1 ne5er in@uire into t#e "isdom
o' t#e la"%7
(t is t#us settled, to parap#rase C#ie' Justice Concepcion in 'on(ales v. )ommission
on Elections, t#at onl$ congressional po"er or competence, not t#e "isdom o' t#e
action taHen, ma$ be t#e basis 'or declaring a statute in5alid% T#is is as it oug#t to
be% T#e principle o' separation o' po"ers #as in t#e main "isel$ allocated t#e
respecti5e aut#orit$ o' eac# department and con'ined its 4urisdiction to suc# a
sp#ere% T#ere "ould t#en be intrusion not allo"able under t#e Constitution i' on a
matter le't to t#e discretion o' a coordinate branc#, t#e 4udiciar$ "ould substitute its
o"n% (' t#ere be ad#erence to t#e rule o' la", as t#ere oug#t to be, t#e last o''ender
s#ould be t#e courts o' 4ustice, to "#ic# rig#tl$ litigants submit t#eir contro5ers$
precisel$ to maintain unimpaired t#e supremac$ o' legal norms and
prescriptions% T#e attacH on t#e 5alidit$ o' t#e c#allenged pro5ision liHe"ise inso'ar
as t#ere ma$ be ob4ections, e5en i' 5alid and cogent, on its "isdom cannot be
sustained%
(n t#is petition, Congressman Carcia seeHs to re5i5e t#e long settled issue o' t#e timeliness
o' 'ull deregulation, "#ic# issue #e #ad earlier submitted to t#is Court b$ "a$ o' a 0artial
)otion 'or Reconsideration in t#eTatad case% (n our Resolution dated December 3, 199-, "#ic#
#as long become 'inal and e1ecutor$, "e stated:
>e s#all 'irst resol5e petitioner Carcia<s linc#pin contention t#at t#e 'ull deregulation
decreed b$ R%A% Bo% I1IE to start at t#e end o' )arc# 199- is unconstitutional% For
prescinding 'rom t#is premise, petitioner suggests t#at 6"e simpl$ go bacH to t#e
transition period, price control "ill be re5i5ed t#roug# t#e automatic pricing
mec#anism based on Singapore 0osted 0rices% T#e Energ$ Regulator$
*oard 1 1 1 "ould pla$ a limited and ministerial role o' computing t#e mont#l$
price ceiling o' eac# and e5er$ petroleum 'uel product, using t#e automatic pricing
'ormula% >#ile t#e 20SF "ould return, t#is co5erage "ould be limited to mont#l$
price increases in e1cess o' 0E%.E per liter%7
>e are not impressed b$ petitioner Carcia<s submission% 0etitioner #as no basis in
condemning as unconstitutional per se t#e date 'i1ed b$ Congress 'or t#e beginning o'
t#e 'ull deregulation o' t#e do"nstream oil industr$% 2ur Decision merel$ 'aulted t#e
E1ecuti5e 'or 'actoring t#e depletion o' 20SF in ad5ancing t#e date o' 'ull
deregulation to Februar$ 199-% Bonet#eless, t#e error o' t#e E1ecuti5e is no" a non=
issue 'or t#e 'ull deregulation set b$ Congress itsel' at t#e end o' )arc# 199- #as
alread$ come to pass% )arc# 199- is not an arbitrar$ date% *$ t#at date, t#e transition
period #as ended and it "as e1pected t#at t#e people "ould #a5e ad4usted to t#e role
o' marHet 'orces in s#aping t#e prices o' petroleum and its products% T#e c#oice o'
)arc# 199- as t#e date o' 'ull deregulation is a 4udgment o' Congress and its
4udgment call cannot be impugned b$ t#is Court%
JIK
Reduced to its basic arguments, it can be seen t#at t#e c#allenge in t#is petition is not against
t#e legalit$ o' deregulation% 0etitioner does not e1pressl$ c#allenge deregulation% T#e issue,
@uite simpl$, is t#e timeliness or t#e "isdom o' t#e date "#en 'ull deregulation s#ould be
e''ecti5e%
(n t#is regard, "#at constitutes reasonable time is not 'or 4udicial determination% Reasonable
time in5ol5es t#e appraisal o' a great 5ariet$ o' rele5ant conditions, political, social and
economic% T#e$ are not "it#in t#e appropriate range o' e5idence in a court o' 4ustice% (t "ould
be an e1tra5agant e1tension o' 4udicial aut#orit$ to assert 4udicial notice as t#e basis 'or t#e
determination%
J9K
>e repeat t#at "#at petitioner decries as unsuccess'ul is not a 'inal result% (t is onl$ a
beginning% T#e Court is not inclined to sti'le deregulation as enacted b$ Congress 'rom its 5er$
start% >e lea5e alone t#e program o' deregulation at t#is stage% Reasonable time "ill pro5e t#e
"isdom or 'oll$ o' t#e deregulation program 'or "#ic# Congress and not t#e Court is
accountable%
0etitioner argues 'urt#er t#at t#e public interest re@uires price controls "#ile t#e oligopol$
e1ists, 'or t#at is t#e onl$ "a$ t#e public can be protected 'rom monopol$ or oligopol$
pricing% *ut is inde'inite price control t#e onl$ 'easible and legal "a$ to en'orce t#e
constitutional mandate against oligopoliesA
Article 1I o' t#e Re5ised 0enal Code, as amended, punis#es as a 'elon$ t#e creation o'
monopolies and combinations in restraint o' trade% T#e Solicitor Ceneral, on t#e ot#er #and,
cites pro5isions o' R%A% I!-9 intended to pre5ent competition 'rom being corrupted or
manipulated% Section 11, entitled 6Anti=Trust Sa'eguards7, de'ines and pro#ibits cartelization
and predator$ pricing% (t penalizes t#e persons and o''icers in5ol5ed "it# imprisonment o' t#ree
93; to se5en 9-; $ears and 'ines ranging 'rom 2ne million to T"o million pesos% For t#is
purpose, a Joint TasH Force 'rom t#e Department o' Energ$ and Department o' Justice is created
under Section 1! to in5estigate and order t#e prosecution o' 5iolations%
Sections I and 9 o' t#e Act, mean"#ile, direct t#e Departments o' Foreign A''airs, Trade and
(ndustr$, and Energ$ to undertaHe strategies, incenti5es and bene'its, including international
in'ormation campaigns, ta1 #olida$s and 5arious ot#er agreements and utilizations, to in5ite and
encourage t#e entr$ o' ne" participants% Section pro5ides 'or uni'orm tari''s at t#ree percent
93G;%
Section 13 o' t#e Act pro5ides 'or 6Remedies7, under "#ic# t#e 'iling o' actions b$
go5ernment prosecutors and t#e in5estigation o' pri5ate complaints b$ t#e TasH Force is
pro5ided% Sections 1! and 1. pro5ide #o" t#e Department o' Energ$ s#all monitor and pre5ent
t#e occurrence o' collusi5e pricing in t#e industr$%
(t can be seen, t#ere'ore, t#at instead o' t#e price controls ad5ocated b$ t#e petitioner,
Congress #as enacted anti=trust measures "#ic# it belie5es "ill promote 'ree and 'air
competition% ?pon t#e ot#er #and, t#e disciplined, determined, consistent and 'ait#'ul e1ecution
o' t#e la" is t#e 'unction o' t#e 0resident% As stated b$ public respondents, t#e remed$ against
unreasonable price increases is not t#e nulli'ication o' Section 19 o' R%A% I!-9 but t#e setting
into motion o' its 5arious ot#er pro5isions%
For t#is Court to declare unconstitutional t#e He$ pro5ision around "#ic# t#e la"<s anti=trust
measures are clustered "ould mean a constitutionall$ interdicted distrust o' t#e "isdom o'
Congress and o' t#e determined e1ercise o' e1ecuti5e po"er%
&a5ing decided t#at deregulation is t#e polic$ to 'ollo", Congress and t#e 0resident #a5e
t#e dut$ to set up t#e proper and e''ecti5e mac#iner$ to ensure t#at it "orHs% T#is is somet#ing
"#ic# cannot be ad4udicated into e1istence% T#is Court is onl$ an umpire o' last resort "#ene5er
t#e Constitution or a la" appears to #a5e been 5iolated% T#ere is no s#o"ing o' a constitutional
5iolation in t#is case%
A=EREFORE, t#e petition is D(S)(SSED%
$! Tatad vs Sec. of energy (281 scra 330)
9. =9Bual 1rotection> – 7il Deregulation Law
=. Co!sieri!g )ha) oi$ is !o) e!e*ic )o )his co(!)r,, his)or, sho%s )ha) )he go&er!*e!) has a$%a,s +ee!
#i!i!g %a,s )o a$$e&ia)e )he oi$ i!(s)r,. The go&er!*e!) crea)e $a%s acco**oa)e )hese i!!o&a)io!s i!
)he oi$ i!(s)r,. 6!e s(ch $a% is )he Do%!s)rea* 6i$ Dereg($a)io! Ac) o# 1998 or RA 8180. This $a% a$$o%s
)ha) Ma!, "erso! or e!)i), *a, i*"or) or "(rchase a!, '(a!)i), o# cr(e oi$ a! "e)ro$e(* "ro(c)s #ro* a
#oreig! or o*es)ic so(rce, $ease or o%! a! o"era)e re#i!eries a! o)her o%!s)rea* oi$ #aci$i)ies a!
*ar2e) s(ch cr(e oi$ or (se )he sa*e #or his o%! re'(ire*e!),N s(+Cec) o!$, )o *o!i)ori!g +, )he
De"ar)*e!) o# 4!erg,. Ta)a assai$s )he co!s)i)()io!a$i), o# )he $a%. 0e c$ai*s, a*o!g o)hers, )ha) )he
i*"osi)io! o# i##ere!) )ari## ra)es o! i*"or)e cr(e oi$ a! i*"or)e re#i!e "e)ro$e(* "ro(c)s &io$a)es )he
e'(a$ "ro)ec)io! c$a(se. Ta)a co!)e!s )ha) )he 3Z-7Z )ari## i##ere!)ia$ (!($, #a&ors )he )hree eDis)i!g oi$
re#i!eries a! iscri*i!a)es agai!s) "ros"ec)i&e i!&es)ors i! )he o%!s)rea* oi$ i!(s)r, %ho o !o) ha&e
)heir o%! re#i!eries a! %i$$ ha&e )o so(rce re#i!e "e)ro$e(* "ro(c)s #ro* a+roa.3Z is )o +e )aDe o!
(!re#i!e cr(e "ro(c)s a! 7Z o! re#i!e cr(e "ro(c)s.
8. /SS6E: 5he)her or !o) RA 8180 is co!s)i)()io!a$.
7. HELD: The SC ec$are )he (!co!s)i)()io!a$i), o# RA 8180 +eca(se i) &io$a)e Sec 19 o# Ar) 12 o# )he
Co!s)i)()io!. 3) &io$a)e )ha) "ro&isio! +eca(se i) o!$, s)re!g)he!s o$igo"o$, %hich is co!)rar, )o #ree
co*"e)i)io!. 3) ca!!o) +e e!ie )ha) o(r o%!s)rea* oi$ i!(s)r, is o"era)e a! co!)ro$$e +, a! o$igo"o$,,
a #oreig! o$igo"o$, a) )ha). /e)ro!, She$$ a! Ca$)eD s)a! as )he o!$, *aCor $eag(e "$a,ers i! )he oi$ *ar2e).
A$$ o)her "$a,ers +e$o!g )o )he $i$$i"()ia! $eag(e. As )he o*i!a!) "$a,ers, /e)ro!, She$$ a! Ca$)eD +oas) o#
eDis)i!g re#i!eries o# &ario(s ca"aci)ies. The )ari## i##ere!)ia$ o# 9Z )here#ore %or2s )o )heir i**e!se +e!e#i).
Be), )his is o!$, o!e ege o# )he )ari## i##ere!)ia$. The o)her ege c()s a! c()s ee" i! )he hear) o# )heir
co*"e)i)ors. 3) erec)s a high +arrier )o )he e!)r, o# !e% "$a,ers. Ne% "$a,ers )ha) i!)e! )o e'(a$iGe )he
*ar2e) "o%er o# /e)ro!, She$$ a! Ca$)eD +, +(i$i!g re#i!eries o# )heir o%! %i$$ ha&e )o s"e! +i$$io!s o#
"esos. Those %ho %i$$ !o) +(i$ re#i!eries +() co*"e)e %i)h )he* %i$$ s(##er )he h(ge isa&a!)age o#
i!creasi!g )heir "ro(c) cos) +, 9Z. The, %i$$ +e co*"e)i!g o! a! (!e&e! #ie$. The arg(*e!) )ha) )he 9Z
)ari## i##ere!)ia$ is esira+$e +eca(se i) %i$$ i!(ce "ros"ec)i&e "$a,ers )o i!&es) i! re#i!eries "()s )he car)
+e#ore )he horse. The #irs) !ee is )o a))rac) !e% "$a,ers a! )he, ca!!o) +e a))rac)e +, +(re!i!g )he*
%i)h hea&, isi!ce!)i&es. 5i)ho() !e% "$a,ers +e$o!gi!g )o )he $eag(e o# /e)ro!, She$$ a! Ca$)eD,
co*"e)i)io! i! o(r o%!s)rea* oi$ i!(s)r, is a! i$e rea*.
8. RA 8180 is (!co!s)i)()io!a$ o! )he gro(! i!)er a$ia )ha) i) iscri*i!a)e agai!s) )he M!e% "$a,ersN i!so#ar as
i) "$ace )he* a) a co*"e)i)i&e isa&a!)age &is-\-&is )he es)a+$ishe oi$ co*"a!ies +, re'(iri!g )he* )o
*ee) cer)ai! co!i)io!s a$rea, +ei!g o+ser&e +, )he $a))er
4 Eastern Assurance vs LTFRB
AG!R! No! 1=',1,! Octo)e* ,- +%%$B
EASTERN ASS6RANCE J S6RETY COR4ORAT/ON
2EASCO"- petitioner, vs. LAND TRANS4ORTAT/ON
FRANCH/S/NG and REG6LATORY 9OARD 2LTFR9"- respondent!
D E C / S / O N
4ANGAN/9AN- J..
The o"era)io! o# *o!o"o$ies is !o) )o)a$$, +a!!e +, )he Co!s)i)()io!.
0o%e&er, )he S)a)e sha$$ reg($a)e )he* %he! "(+$ic i!)eres) so re'(ires. 3! )he
"rese!) case, )he )%o co!sor)ia o# i!s(ra!ce co*"a!ies )ha) ha&e +ee!
a()horiGe )o iss(e "asse!ger i!s(ra!ce "o$icies are ae'(a)e$, reg($a)e +,
)he La! Tra!s"or)a)io! Fra!chisi!g a! Reg($a)or, ?oar :LTFR?< )o "ro)ec)
)he rii!g "(+$ic. 5hi$e i!i&i(a$ i!s(ra!ce co*"a!ies *a, so*eho% +e
a&erse$, a##ec)e +, )his sche*e, )he "ara*o(!) "(+$ic i!)eres) i!&o$&e
*(s) +e ("he$. 3! a!, e&e!), a$$ $egi)i*a)e i!s(ra!ce co*"a!ies are a$$o%e
)o +eco*e *e*+ers o# )he co!sor)ia. Th(s, )here is !o res)rai!) o# )rae or
(!#air co*"e)i)io! i!&o$&e.
T;e Case
?e#ore (s is a /e)i)io! #or Re&ie%
T1U
(!er R($e 9= o# )he R($es o# Co(r),
see2i!g )o se) asie )he A(g(s) 20, 2001 Decisio!
T2U
o# )he Co(r) o#
A""ea$s
T3U
:CA< i! CA-GR S/ No. 83199. The is"osi)i&e "or)io! o# )he assai$e
Decisio! reas as #o$$o%s:
6>&EREF2RE, in 5ie" o' t#e 'oregoing premises, t#e 0etition is #ereb$
D(S)(SSED 'or lacH o' merit% Bo costs%7
J!K
T;e Facts
The #ac)(a$ a!)ecee!)s o# )he case are s(**ariGe +, )he CA as #o$$o%s:
6J(Kn its desire to impro5e public ser5ice and its assistance to t#e 5ictims o' road
accidents in5ol5ing 0?Fs Jpublic utilit$ 5e#iclesK, t#e J/and Transportation
Franc#ising and Regulator$K *oard conducted a t#oroug# in5estigation on t#e
su''icienc$ o' e1isting insurance policies 'or 0?Fs% (n t#e course o' its in5estigation,
t#e *oard disco5ered t#at insurance co5erage o' 0?Fs "as onl$ 0.E,EEE%EE 'or t#e
entire 5e#icle regardless o' t#e number o' passengers or persons Hilled or in4ured%
6T#e *oard, t#en, undertooH 1 1 1 nation"ide consultations among t#e transport
operators and insurance companies and #eld meetings "it# t#e o''icials o' t#e
(nsurance Commission%
6T#erea'ter, t#e *oard issued Memorandum Circular No. 99-011 'i1ing t#e insurance
co5erage o' 0?Fs on t#e basis o' t#e number o' persons t#at ma$ be Hilled or in4ured
instead o' t#e entire 5e#icle alone% T#e co5erage is denominated as $assenger
Accident Insurance )overage *0A(C;, "#ic# 'i1es t#e co5erage o' 0.E,EEE%EE per
passenger%
6During t#e e''ecti5it$ o' &emorandum )ircular +o. ,,-.11, t#e *oard recei5ed
se5eral complaints 'rom 5arious transport organizations suc# as t#e Federation o'
Jeepne$ 2perators and Dri5ers Association o' t#e
0#ilippines */E01DA$2, 0agHaHaisa ng mga Sama#an ng Tsuper at 2perator
Bation"ide *$IST1+2, and t#e 0#ilippine Con'ederation o' Dri5ers 2rganization,
Alliance o' Concerned Transport 2perators *$)D1-A)T12. T#e t#rust o' t#eir
complaints are: 91; t#e proli'eration o' 'aHe insurance policies8 9,; t#e predator$
pricing among competing insurance 'irms8 93; t#e proli'eration o' 'i1ers in t#e
premises o' t#e /TFR* endorsing certain insurance companies8 and 9!; t#e
Pmoonlig#ting< b$ personnel o' t#e /TFR* "#o induced operators to secure t#eir
policies 'rom 'a5ored companies%
6To address t#ese complaints, t#e *oard #eld a series o' meetings "it# t#e o''icers o'
5arious transport groups composed o' operators o' bus, 4eepne$ and ta1i as "ell as
representati5es o' se5eral insurance companies and o''icials o' t#e (nsurance
Commission%
6(n a meeting #eld on 1, December ,EEE, "#ere #erein petitioner Eastern Assurance
Q Suret$ Corporation *EAS)1, 'or bre5it$; "as represented b$ a certain Dante
*aronia, t#e transport groups proposed t#e creation o' JaK Pt%o-group system3 and o'
JaK 4#lac5listing scheme.3
6(n a letter dated 19 Januar$ ,EE1, t#e a'oresaid proposal "as t#en re'erred b$ t#e
*oard to t#e (nsurance Commission 'or con'irmation, to "it:
P1% T#e Commission interposes no ob4ection to, t#ere being no legal obstacle to t#e
same, 1 1 1 t#e suggestion o' 5arious insurance groups to allo" onl$ t"o 9,; groups to
participate in t#e 0assenger Accident (nsurance 0rogram 90A(0; o' t#e /TFR*% (t is
understood t#at all insurance companies accredited b$ t#e Commission ma$
participate in t#e program b$ 4oining an$ o' t#e groups%
P,% T#e Commission interposes no ob4ection, t#ere being no legal obstacle to t#e
same, to t#e suggestion o' t#e 5arious transport groups to create an accreditation and
de=listing criteria to be used in t#e implementation o' t#e 0A(0, 1 1 1 and
P3% T#e Commission also is o' t#e position t#at t#e /TFR* ma$, on its o"n set up,
re@uire and implement t#e t"o groups s$stem and:or t#e accreditation and de=listing
criteria "it#out need o' prior appro5al 'rom t#e Commission%< 1 1 1
62n 3E Januar$ ,EE1, (nsurance Commissioner Eduardo )alinis "rote /TFR*
C#airman Dante )% /antin, t#e "#ole te1t o' "#ic#, reads:
P>e #ereb$ con'irm t#e points enumerated in $our letter o' Januar$ 19, ,EE1
regarding t#e implementation o' t#e 0assenger 0ersonal Accident (nsurance 0rogram
90A(0; o' t#e /TFR*, as t#e same aim to ac#ie5e a simple and s$stematic
implementation o' said program%<
6T#us, on 1 Februar$ ,EE1, public respondent /TFR* issued t#e #erein
assailed Memorandum Circular No. 2001-001 t#at reads, as 'ollo"s:
P)E)2RABD?) C(RC?/AR B2% ,EE1=EE1
PS?*JECT: Amending )emorandum Circular Bo% 99=E11
90assenger Accident (nsurance Re@uirement o' 0?F 2perators;
P(% 0REFAT2RD STATE)EBT
P(n response to numerous complaints 'rom passenger accident 5ictims in5ol5ing
public utilit$ 5e#icles, t#e *oard passed )emorandum Circular Bo% 99=E11 dated
June ,,, 1999 re@uiring all public utilit$ 5e#icles to secure a Pno 'ault< passenger
accident insurance% T#is circular "as 'urt#er re'ined "it# t#e passage o'
)emorandum Circular Bo% ,EEE=E1E dated )arc# ,-, ,EEE%
BA4)er a year o4 &%+,e%e')a)&o', )5e 0oar$ 'o8 5a( re6e&-e$ 'u%erou(
6o%+,a&')( 6o%&'1 4ro% -ar&ou( )ra'(+or) 1rou+( a'$ 4ro% &)( re1&o'a, o44&6e(.
T5e(e 6o%+,a&')( :ra'1e; 4ro% 'o'-+ay%e') or ,a)e +ay%e') o4 6,a&%(, 4a7e
6er)&4&6a)e( o4 6o-er, +re$a)ory +r&6&'1, 'o'-+ay%e') or u'$er +ay%e') o4 )a*e(,
1ra4) a'$ 6orru+)&o', a'$ )5e 'o' &%+,e%e')a)&o' o4 )5e 6o%+u)er&Ce$ $a)a ba'7
o4 a,, +ub,&6 u)&,&)y -e5&6,e(.
P(n addressing t#ese concerns, t#e di''erent transport groups proposed t#e creation o' a
t"o 9,; group s$stem "#ereb$ all insurance companies "#o "ould liHe to participate
in t#e passenger accident insurance program o' t#e /TFR* must 4oin an$ o' t#e t"o
groups, and t#at t#e passenger insurance re@uirement o' t#e 0?F operators be di5ided
bet"een t#ese t"o groups on t#e basis o' t#e number o' t#eir respecti5e /T2 license
plates% T#e transport group argue t#at t#roug# t#is sc#eme t#e 'ollo"ing ob4ecti5es
"ill be attained:
P1% FaHe certi'icates o' co5er "ill be minimized, i' not eradicated,
due to better monitoring o' operations as t#ere "ould onl$ be t"o
Hinds o' certi'icates t#at "ould be circulating%
P,% 0a$ment o' t#e proper ta1es can be assured%
P3% Cra't and corruption "ill be minimized, i' not eliminated, since
discretion as to "#ic# insurance compan$ to patronize "ill be
remo5ed%
P!% 0a$ment o' claims "ill be prompt due to better monitoring%
P.% T#e proposed computerized data banH o' all 0?FJ,K nation"ide
"ill be attained "it#out a single cost to go5ernment%<
P(t must be noted t#at t#e passenger accident insurance program o' t#e /TFR* "as
implemented a'ter numerous dialogues "it# all t#e transport organizations
nation"ide, and onl$ a'ter all issues raised #a5e been su''icientl$ addressed% )ore
importantl$, t#is program is "it#out an$ cost to t#e go5ernment% T#e added insurance
e1pense is s#ouldered b$ t#e 0?F operators%
P(n pursuing t#is proposal 'urt#er, t#e *oard conducted meetings and con'erences "it#
t#e transport operators and "it# t#e insurance companies% (t also met J"it#K t#e
(nsurance Commission "#ere t#e latter, in its letter dated Januar$ 3E, ,EE1, con'irmed
t#at it #as no ob4ection to t#e proposal o' t#e 5arious transport groups, t#ere being no
legal impediment to t#e same%
P((% A)EBD)EBTS
PA)EBD)EBTS T2 )%C% B2% 99=E11
P(B F(E> 2F T&E F2REC2(BC 0RE)(SES, and upon t#e clamor o' t#e transport
operators "#o are t#e ones pa$ing t#e added insurance cost, paragrap# se5en 9-; o'
)emorandum Circular Bo% 99=E11 is #ereb$ amended to read as 'ollo"s:
BI' or$er )o %a7e (ure )5a) 4u)ure 6,a&%( o4 "U/ o+era)or( a'$ +a((e'1er
a66&$e') -&6)&%( are +a&$ 8&)5&' )5e reDu&re$ )&%e, a'$ &' or$er )o %&'&%&Ce, &4
'o) e,&%&'a)e, 4a7e 6er)&4&6a)e( o4 6o-er a'$ 1ra4) a'$ 6orru+)&o', a( 8e,, a( )o
e'(ure )5e +ay%e') o4 )5e +ro+er )a*e( %u65 'ee$e$ by )5e 1o-er'%e'), a( 8e,,
a( )o 6rea)e a 6o%+u)er&Ce$ $a)a ba'7 8&)5ou) a'y 6o() )o )5e 1o-er'%e') 85&65
&( 'e6e((ary 4or )ra'(+or) +,a''&'1:,; )5e 0oar$ 8&,, o',y a66e+), a( +roo4 o4
6o%+,&a'6e o4 )5&( +ro1ra%, &'(ura'6e +o,&6:&;e(E6er)&4&6a)e( o4 6o-er $u,y
a++ro-e$ by )5e I'(ura'6e #o%%&((&o' (+e6&4&6a,,y 4or )5&( +roFe6), a'$ &((ue$
by a'y o4 )5e )8o 1rou+( a( au)5or&Ce$ by )5e 0oar$.G
PCREAT(2B 2F T&E T>2 CR2?0 SDSTE)
PAccordingl$, as t#ere is alread$ one group dul$ aut#orized b$ t#e *oard to participate
in t#is program in t#e person o' t#e 0assenger Accident )anagers, (nc% 90A)( 'or
bre5it$;, T&ERE (S A BEED T2 F2R) AB2T&ER CR2?0 (B 2RDER T2
F?//D ()0/E)EBT T&E 0R2CRA)% All ot#er insurance companies "#o "is# to
continue participating in t#e program, t#ere'ore, are #ereb$ re@uired to eit#er 4oin
0A)( or 'orm a second group%
P(n order to maintain t#eir good standing "it# t#e *oard, eac# group must maintain
and present to t#e *oard proo' o' compliance "it# t#e 'ollo"ing minimum
re@uirements:
P1% )embers#ip o' at least ten 91E; insurance companies "it# 5alid
and subsisting license issued b$ t#e (nsurance Commission8
P,% Aggregate paid=up capitalization o' 0.EE )illion8
P3% Compliance "it# t#e computerized datJaK as re@uired b$ t#e
*oard8
P!% 0a$ment o' all claims "it#in se5en 9-; calendar da$s 'rom
submission o' all documents8
P.% (ssuance o' one 91; certi'icate o' co5er "it# t#e standard 'orm
and contents dul$ appro5ed b$ t#e (nsurance Commission and t#e
*oard8 and
P% Submission and compliance "it# all ot#er reports 1 1 1 and
re@uirements o' t#e *oard%<
P2DD=EFEB SDSTE)
P(n order to address t#e issue o' gra't and corruption, t#ere is a need to remo5e
discretion on t#e part o' go5ernment o''icials% Accordingl$, t#e *oard supports t#e
proposal o' t#e transport groups and #ereb$ adopts t#e 'ollo"ing s$stem:
PAll 0?F<s co5ered b$ t#is program "#ose /T2 license plate, as per latest /T2
2''icial Receipt, #as an e5en middle number must #a5e an insurance polic$:certi'icate
co5er coming 'rom t#e 'irst insurance group 9in its case 0A)(;, "#ile t#ose "it# an
odd middle number must #a5e a polic$:co5er coming 'rom t#e second group% T#is
odd=e5en s$stem s#all be interc#anged on a $ear to $ear basis in order to ensure
e@ualit$ and 'airness in distribution% Accordingl$, t#e *oard "ill not accept, as proo'
o' compliance "it# t#is program, an$ insurance polic$:co5er t#at does not compl$
"it# t#is odd=e5en sc#eme, e1cept in t#e 'ollo"ing cases "#ere t#e operator ma$
c#oose t#e insurance group o' its c#oice pro5ided i' is one o' t#e t"o aut#orized b$
t#e *oard, to "it:
P1% >#ere t#e operator or 'ranc#ise #older #as .E or
more operating units registered in its name8
P,% >#ere t#e operator 'iles a 5eri'ied petition "it#
t#e *oard 4usti'$ing #is pre'erence o5er t#e ot#er
group% (n t#is case, t#e *oard ma$ allo" a s"itc#
i' it can be s#o"n t#at t#ere are more bene'its to
be attained J'romK t#e insurance group o' #is
c#oice, and pro5ided 'urt#er t#at t#ese bene'its
are legal and do not result to an$ 'orm o'
predator$ pricing, suc# as 1 1 1 un4usti'ied
commissions and discounts%<
P2t#er t#an J'orK t#ese reasonsJ,K no s"itc# ma$ be allo"ed b$ an$ o''icer o' t#e
/TFR* unless ot#er"ise dul$ appro5ed b$ t#e *oard en banc%
PEFFECT(F(TD 2F T&E T>2 CR2?0 SDSTE)
PT#e e''ecti5it$ o' t#e t"o group s$stem "ill taHe place on )arc# 1, ,EE1, unless
ot#er"ise e1tended b$ t#e *oard en banc%
P(((% (BTER() C?(DE/(BES
P(n t#e meantime, in order to immediatel$ address t#e concerns o' t#e transport
groups, t#e 'ollo"ing s#ould be strictl$ complied "it#:
P1% Bo insurance compan$, its agents and emplo$ees s#all resort to
predator$ pricingJ,K "#ic# means selling or o''ering to sell an$
product at a price unreasonabl$ belo" t#e industr$ a5erage cost so
as to attract customers to t#e detriment o' competitors%
P,% T#e amount o' commission:discount "#ic# a compan$ "ill o''er
in t#e marHet s#ould be in "riting and dul$ appro5ed b$ t#e
/TFR*, "#o, in turn, "ill coordinate t#e same "it# t#e (nsurance
Commission% An$ 5iolation o' t#e declared commission:discount
s#all be sub4ect to t#e penalties pro5ided 'or #erein%
P3% 2nl$ branc# o''ices dul$ identi'ied b$ t#e compan$, toget#er
"it# t#e designated o''icer=in=c#arge, and submitted in "riting to
t#e /TFR* s#all issue, distribute, marHet or release t#e re@uired
polic$:certi'icate o' co5er%
P!% 0a$ment o' all claims s#ould be made "it#in se5en 9-; calendar
da$s 'rom submission o' all t#e re@uired 1 1 1 documents%
Accordingl$, t#e compan$ s#all pro5ide t#e /TFR* "it# t#e list
o' re@uired documents%<
PAn$ insurance compan$ 'ound to #a5e 5iolated an$ o' t#e abo5e pro#ibitions s#all,
a'ter notice and #earing, be banned permanentl$ 'rom participating in t#e program
eit#er directl$ or indirectl$, including its principal stocH#olders, He$ o''icers and
successors=in=interest i' e5idence "arrants% T#e *oard, ma$, in t#e interest o' t#e
public, issue a cease and desist order en4oining a compan$ 'rom participating in t#e
program 'or not more t#an t#irt$ 93E; da$s pending 'ull in5estigation%
BA,, &'(ura'6e 6o%+a'&e( 85o are Hb,a67,&()e$I &' a'y 1o-er'%e') a1e'6y or
&'()ru%e')a,&)y &'6,u$&'1 6our) a'$ o)5er Dua(&-Fu$&6&a, a1e'6&e( are
au)o%a)&6a,,y $&(a,,o8e$ )o +ar)&6&+a)e &' )5&( +ro1ra%. A66or$&'1,y, 'o +o,&6y or
6er)&4&6a)e o4 6o-er (5a,, be a66e+)e$ 4ro% )5e(e 6o%+a'&e( a( +roo4 o4
6o%+,&a'6e 8&)5 )5&( +ro1ra%. T5e 0oar$ (5a,, &((ue 4ro% )&%e )o )&%e )5e ,&() o4
)5e Hb,a67,&()e$I or (u(+e'$e$ 6o%+a'&e(.
PAll insurance policiesJ:Kcerti'icates o' co5er issued b$ t#eir insurance companies in
t#eir indi5idual capacities prior to t#e e''ecti5it$ o' t#e 6T"o Croup S$stem7 s#all
remain in 'ull 'orce and e''ect until its e1piration, and said companies s#all be
primaril$ liable 'or t#e pa$ment o' claims sub4ect o' said policies:certi'icates o' co5er%
D D D D D D D D D
6For t#e dissemination and implementation o' t#e a'ore@uoted &emorandum, t#e
/TFR* made a one mont# nation"ide in'ormation campaign on t#e nature o' 4the
t%o-group system3 and o' 4the #lac5listing scheme.3And in a meeting "it# t#e
di''erent insurance companies, including t#e representati5e o' petitioner EASC2, t#e
(nsurance Commission representati5e JreadK be'ore t#e participants t#e insurance
'irms b,a67,&()e$ b$ t#e Regional Trial Court o' Nuezon Cit$ "#ic# includes
petitioner EASC2% T#e purpose o' t#is in'ormation is to a''ord t#e blacHlisted 'irms
an opportunit$ to clear t#eir records and settle t#e claims against t#em%7
J.K
C$ai*i!g )ha) .e*ora!(* Circ($ar No. 2001-001 a! )he i*"$e*e!)i!g
Circ($ars ha e"ri&e i) o# i)s righ) )o e!gage i! )he "asse!ger accie!)
i!s(ra!ce +(si!ess, 4as)er! Ass(ra!ce H S(re), Cor"ora)io! :4ASC6< #i$e a
/e)i)io! #or Certiorari a! /rohi+i)io! %i)h )he CA '(es)io!i!g )he &a$ii), o#
)hose iss(a!ces.
R01ing o: t;e Co0*t o: A88ea1s
The CA r($e )ha) .e*ora!(* Circ($ar No. 2001-001 ha !o) +ee!
iss(e ultra vires +, )he LTFR? a! co!s)i)()e a &a$i eDercise o# "o$ice
"o%er. 0e!ce, )he a""e$$a)e co(r) r($e:
61 1 1 JTK#e *oard #as t#e po"er to re@uire as a condition 'or t#e issuance o'
certi'icate o' public con5enience an insurance polic$ or certi'icate pro5ided b$ a
member o' one o' t#e t"o accredited groups% T#e clear purpose o' t#e condition is to
ensure t#e bene'it o' t#e riding public and pedestrians "#o ma$ become 5ictims o'
accidents in5ol5ing 0?Fs% For t#is purpose, t#e *oard ma$, as it did, coordinate "it#
t#e (nsurance Commission, t#e go5ernmental agenc$ regulating t#e insurance
business, 'or t#e adoption o' Pthe t%o-group and #lac5listing system< to en#ance t#e
insurance co5erage o' passengers and persons "#o become 5ictims o' accident 'or
t#eir bene'it or o' t#eir #eirs%
6>it#out doubt, t#e imposition o' t#e re@uirements is germane to t#e po"ers,
'unctions and purpose o' t#e *oard as a regulator$ bod$ in c#arge o' administering
public utilities% 1 1 1%7
JK
.oreo&er, )he CA #o(! )ha) )he Circ($ar ha !o) &io$a)e )he "ro&isio!s o#
)he Co!s)i)()io! o! #ree e!)er"rise, e'(a$ "ro)ec)io! a! s(+s)a!)i&e (e
"rocess. The a""e$$a)e co(r) eD"$ai!e M)ha) /A3C 33 a! /A.3 *ere$, ser&e
as se*vice a*(s o# )heir res"ec)i&e *e*+ers. 3! o)her %ors, )hese )%o :2<
gro("s, s)ric)$, s"ea2i!g, are !o) e!gage i! i!s(ra!ce +(si!ess. .oreo&er,
)he S)%o-gro(" @ co!sor)i(*F sche*e (!er )he Me(o*and0( Ci*c01a* No!
+%%1#%%1 is o"e! )o a$$ i!s(ra!ce #ir*s T)ha)U %a!) )o Coi! a!, o# )he )%o
gro("s. 3) oes !o) &es) a!, "ri&i$ege or a&a!)age )o a!, si!g$e #ir* or gro("
)o carr, o() )he +(si!ess o# "ro&ii!g )he i!s(ra!ce co&erage (!er )he
"rogra*. The #ac) )ha) )he "rogra* is o"e! )o a$$ i!s(ra!ce #ir*s i!c$(i!g
"e)i)io!er !ega)es i)s "re)e!se o# eDc$(si&i),. No #ir* is iscri*i!a)e agai!s)
si!ce )he )%o co!sor)ia ca!!o) re#(se *e*+ershi" i! )heir res"ec)i&e gro("s
)o a!, i!)eres)e #ir* T)ha)U %a!)s a! is '(a$i#ie )o Coi!.N
T7U
0e!ce, )his /e)i)io!.
T8U
T;e /ss0es
3! i)s .e*ora!(*, "e)i)io!er raises )he #o$$o%i!g iss(es #or o(r
co!siera)io!:
6a; t#e assailed /TFR* circulars "it# Jt#eirK implementing circulars 5iolatJeK t#e
constitutional proscription against monopol$, combination in restraint o' trade and
un'air competitionJ8K b; t#ere is a 5iolation o' Jt#eK e@ual protection clause8 c; /TFR*
e1ceeded its legal mandate because it e1ercised administrati5e control:4urisdiction
o5er insurance companies "#ic# properl$ and e1clusi5el$ belongs to t#e (nsurance
CommissionJ8K d; EASC2, petitioner, "as disen'ranc#iseJdK o' its legitimate
insurance business8 1 1 1 e; t#e Court o' Appeals erred in ruling t#at t#e J0Ketition 'or
JCKertiorari "#ic# raises purel$ legal issues is not e1empt 'rom t#e rule on e1#austion
o' administrati5e remedies, contrar$ to e1isting 4urisprudence on t#e matterJ8 ';K t#e
Court o' Appeals committed gra5e abuse in completel$ disregarding 5ital 'acts borne
b$ t#e records and admissions b$ t#e parties8 and 1 1 1 Jg;K 1 1 1 noted t#e assailed
/TFR* memorandum circular did not compl$ "it# publication re@uirements 'or its
5alidit$%7
J9K
The *ai! iss(e i! )he case +e#ore (s, as i! )he Co(r) o# A""ea$s, is )he
&a$ii), o# .e*ora!(* Circ($ar Nos. 2001-001 a! 2001-010.
T;e Co0*tKs R01ing
The /e)i)io! has !o *eri).
Main /ss0e:
5a!idity of the LTF*) 'emorandum $ir%u!ars
/e)i)io!er co!)e!s )ha) .e*ora!(* Circ($ar No. 2001-001 a! )he
s(+se'(e!) i*"$e*e!)i!g Circ($ars &io$a)e )he co!s)i)()io!a$ "roscri")io!
agai!s) *o!o"o$, as %e$$ as (!#air co*"e)i)io! a! co*+i!a)io! i! res)rai!) o#
)rae. /e)i)io!er #(r)her arg(es )ha) )hese %ere iss(e %i)h gra&e a+(se o#
iscre)io! a! %i)ho() C(risic)io! o! )he "ar) o# )he LTFR?.
'onopo!y
The co!s)i)()io!a$ "ro&isio! o! *o!o"o$ies is #o(! i! Ar)ic$e I33 as
#o$$o%s:
6Sec% 19% T#e State s#all regulate or pro#ibit monopolies "#en t#e public interest so
re@uires% Bo combinations in restraint o' trade or un'air competition s#all be allo"ed%7
5hi$e e*+raci!g #ree e!)er"rise as a! eco!o*ic cree, )he Co!s)i)()io!
oes !o) )o)a$$, "rohi+i) )he o"era)io! o# *o!o"o$ies.
T10U
0o%e&er, i) *a!a)es
)he S)a)e )o reg($a)e )he* %he! "(+$ic i!)eres) so re'(ires.
3!)e!se co*"e)i)io! has $e i!s(ra!ce co*"a!ies@age!)s o##eri!g
i!s(ra!ce "o$icies #or "(+$ic ()i$i), &ehic$es )o resor) )o r(i!o(s )ac)ics )o se$$
)heir ser&ices. No)orio(s age!)s o# )hese co*"a!ies ha&e e!gage i!
"rea)or, "rici!g -- se$$i!g )he co*"($sor, i!s(ra!ce co&erage a) a!
(!+e$ie&a+$e isco(!) o# siD), )o eigh), "erce!) :80 )o 80Z< o## )he *ar2e)
ra)e. The h(ge co&erage a! $ia+i$i), (!er )he M!o-#a($) c$a(seN o# )he
"asse!ger accie!) i!s(ra!ce are gross$, is"ro"or)io!a)e )o )he s*a$$
"re*i(*s ac)(a$$, +ei!g "ai.
.oreo&er, i##ere!) "erso!s or o"era)ors %ere iss(e cer)i#ica)es o# co&er
:C6C< or "o$icies +eari!g )he sa*e !(*+er. Th(s, c$ai*s (!er )hese "o$icies
%ere !o) "ai, or "a,*e!)s %ere (!reaso!a+$, e$a,e, res($)i!g i! "reC(ice
)o )he rii!g "(+$ic.
The "rese!) case sho%s a c$ear "(+$ic !ecessi), )o reg($a)e )he
"ro$i#era)io! o# s(ch i!s(ra!ce co*"a!ies. ?eca(se o# )he /-> o"era)orsF
co*"$ai!)s, )he LTFR? )h(s assesse )he si)(a)io!. 3) #o(! )ha) i! orer )o
"ro)ec) )he i!)eres)s o# )he rii!g "(+$ic a! )o reso$&e "ro+$e*s i!&o$&i!g )he
"asse!ger i!s(ra!ce co&erage o# /->s, i) ha )o iss(e .e*ora!(* Circ($ar
No. 2001-001 a()horiGi!g )he )%o-gro(" s,s)e*. S(+se'(e!)$,, i) "ro*($ga)e
.e*ora!(* Circ($ar No. 2001-010 accrei)i!g /A.3 a! /A3C 33 as )he )%o
gro("s a$$o%e )o "ar)ici"a)e i! )he "rogra*.
.e*ora!(* Circ($ar No. 2001-010 re'(ire )ha) MTaU$$ "(+$ic ()i$i),
&ehic$es %hose LT6 $ice!se "$a)e, as "er $a)es) LT6 6##icia$ Recei"), %i)h a!
4>4N *i$e !(*+er :0, 2, 9, 8 a! 8< sha$$ +e i!s(re %i)h -C/? i!s(ra!ce
:/A.3<, %hi$e )hose %i)h a! 6DD *i$e !(*+er :1, 3, =, 7 a! 9< sha$$ +e
i!s(re %i)h Grea) Do*es)ic 3!s(ra!ce :/A3C 2< D D D.N
T11U
-!o(+)e$,, .e*ora!(* Circ($ar No. 2001-010 a()horiGe a!
reg($a)e )%o se"ara)e *o!o"o$ies. 3! /arcia v( Corona,
T12U
)he Co(r) s)a)e:
6T#e simplest 'orm o' monopol$ e1ists "#en t#ere is onl$ one seller or producer o' a
product or ser5ice 'or "#ic# t#ere are no substitute% (n its more comple1 'orm,
monopol$ is de'ined as t#e 4oint ac@uisition or maintenance b$ members o' a
conspirac$ 'ormed 'or t#at purpose, o' t#e po"er to control and dominate trade and
commerce in a commodit$ to suc# an e1tent t#at t#e$ are able, as a group, to e1clude
actual or potential competitors 'rom t#e 'ield, accompanied "it# t#e intention or
purpose to e1ercise suc# po"er%7
J13K
3) sho($ +e s)resse )ha) /->s, as co**o! carriers, are e!gage i! a
+(si!ess a##ec)e %i)h "(+$ic i!)eres).
T19U
-!er Ar)ic$e 17=8 o# )he Ci&i$ Coe, i!
cases o# ea)h or i!C(ries )o "asse!gers, co**o! carriers are "res(*e )o +e
a) #a($) a! are re'(ire )o co*"e!sa)e )he &ic)i*s, (!$ess )he, o+ser&e
eD)raori!ar, i$ige!ce. To ass(re )his co*"e!sa)io!, /->s are re'(ire )o
o+)ai! i!s(ra!ce "o$icies.
T1=U
4&e! %i)h )his i!s(ra!ce re'(ire*e!), )he rii!g "(+$ic re*ai!s a) ris2 o#
i!ae'(a)e co&er, +eca(se *a!, i!s(ra!ce co*"a!ies are i!i&i(a$$,
i!ca"a+$e o# *ee)i!g )he co*"e!sa)io! s)a!ars. 5orse, )he "er!icio(s
co*"e)i)io! a! #ra(($e!) "rac)ices escri+e a+o&e ha&e res($)e i! #ai$(re
)o *ee) )he co*"e!sa)io! re'(ire*e!)s o# )he $a%.
3!ee, i! a()horiGi!g a! reg($a)i!g )he )%o i!s(ra!ce *o!o"o$ies, )he
LTFR? ac)e %i)hi! i)s "reroga)i&es i! "ro*o)i!g "(+$ic i!)eres) a! "ro)ec)i!g
)he rii!g "(+$ic. A#)er a$$, )he co!sor)ia are o"e! )o a$$ i!s(ra!ce co*"a!ies,
i!c$(i!g "e)i)io!er. There is !o iscri*i!a)io! agai!s) a!, $egi)i*a)e i!s(rer.
6! )he %ho$e, )he "(+$ic is gi&e! "ro)ec)io! %i)ho() (!#air co*"e)i)io! or
(!(e res)rai!) o# )rae. As )he Co(r) o# A""ea$s "oi!)e o(), )he )%o
co!sor)ia are !o) e!gage i! )he i!s(ra!ce +(si!essP )he, *ere$, ser&e as
Mser&ice ar*sN o# )heir res"ec)i&e *e*+ers.
A) +o))o*, )he s(+Cec) .e*ora!(* Circ($ars %ere iss(e #or )he s)a)e
"(r"ose o# "ro*o)i!g "(+$ic i!)eres)P a! o# "ro)ec)i!g )he rii!g "(+$ic a!
/-> o"era)ors #ro* +ei!g e#ra(e +, #a2e, (!er&a$(e or *isre"rese!)e
i!s(ra!ce "o$icies.
Grave Abuse of Dis%retion
3! a$$egi!g gra&e a+(se o# iscre)io! o! )he "ar) o# )he LTFR?, "e)i)io!er
escri+es a) $e!g)h "o)e!)ia$ isas)ers )o )he i!s(ri!g "(+$ic )ha) *a, res($)
#ro* )he )%o-gro(" s,s)e* a()horiGe +, )he assai$e Circ($ars. /e)i)io!er
ca$$s i!)o '(es)io! )he %iso* o# )hose Circ($ars +, "roCec)i!g sce!arios
%hich, ho%e&er, ca!!o) +e "ro"er$, aresse a! reso$&e i! )he "rese!)
case. Li)iga)io!s are $i*i)e )o reso$&i!g ac)(a$, !o) h,"o)he)ica$,
co!)ro&ersies.
Do(+)s o! )he ca"a+i$i), o# )he assai$e Circ($ars )o "ro&ie a! ae'(a)e
$o!g-)er* so$()io! )o /-> o"era)orsF i!s(ra!ce "ro+$e*s are !o) $ega$$,
s(##icie!) )o s)ri2e o%! )hose Circ($ars. 3! o(r #or* o# go&er!*e!), co(r)s
ca!!o) i!'(ire i!)o )he %iso* or )he eD"eie!c, o# )he ac)s o# )he eDec()i&e
or )he $egis$a)i&e +ra!ches o# go&er!*e!), (!$ess )here is a c$ear sho%i!g )ha)
)hose ac)s are co!s)i)()io!a$$, i!#ir* or ha&e +ee! co**i))e %i)h gra&e
a+(se o# iscre)io! a*o(!)i!g )o $ac2 or eDcess o# C(risic)io!.
6(n Angara v. Electoral )ommission, Justice /aurel made it clear t#at Pt#e 4udiciar$
does not pass upon @uestions o' "isdom, 4ustice or e1pedienc$ o' legislation%< And
'ittingl$ so 'or in t#e e1ercise o' 4udicial po"er, "e are allo"ed onl$ Pto settle actual
contro5ersies in5ol5ing rig#ts "#ic# are legall$ demandable and en'orceable, Pand
ma$ not annul an act o' t#e political departments simpl$ because "e 'eel it is un"ise
or impractical% (t is true t#at, under t#e e1panded concept o' t#e political @uestion, "e
ma$ no" also Pdetermine "#et#er or not t#ere #as been a gra5e abuse o' discretion
amounting to lacH or e1cess o' 4urisdiction on t#e part o' an$ branc# or
instrumentalit$ o' t#e Co5ernment%<7
J1K
?, gra&e a+(se o# iscre)io! is *ea!) s(ch ca"ricio(s a! %hi*sica$
eDercise o# C(g*e!) e'(i&a$e!) )o $ac2 o# C(risic)io!. .ere a+(se o#
iscre)io! is !o) e!o(gh. 3) *(s) +e grave, as %he! i) is eDercise ar+i)rari$, or
es"o)ica$$, +, reaso! o# "assio! or "erso!a$ hos)i$i),P a! s(ch a+(se *(s)
+e so "a)e!) a! so gross as )o a*o(!) )o a! e&asio! o# a "osi)i&e (), or )o
a &ir)(a$ re#(sa$ )o "er#or* )he (), e!Coi!e or )o ac) a) a$$ i! co!)e*"$a)io! o#
$a%.
T17U
The C(ris"r(e!)ia$ e$e*e!)s o# ar+i)rari!ess, es"o)is*, "assio! a!
hos)i$i), ha&e !o) +ee! sho%! )o eDis) (!er )he "rese!) circ(*s)a!ces.
F(r)her, "e)i)io!er arg(es )ha) )he LTFR?Fs has)e i! accrei)i!g /A.3 a!
/A3C 33 is a! i!ica)io! o# gra&e a+(se o# iscre)io!. 0o%e&er, si!ce )he )%o-
gro(" s,s)e* %as )o )a2e e##ec) s)ar)i!g .arch 1, 2001, accrei)i!g )he )%o
gro("s o! Fe+r(ar, 28, 2001 %as !o) (!reaso!a+$e. 3! )he a+se!ce o#
co!)rar, e&ie!ce, %e *(s) ("ho$ )he "res(*")io! o# reg($ari), i! )he
"er#or*a!ce o# ()ies +, "(+$ic o##icers.
T18U
Authority and Jurisdi%tion
/e)i)io!er co!)e!s )ha) i! iss(i!g )he assai$e Circ($ars, )he LTFR?
e##ec)i&e$, e$i*i)e, reg($a)e a! co!)ro$$e )he +(si!ess o# "asse!ger
accie!) i!s(ra!ce. 3) arg(es )ha) )he ?oar ac)e %i)ho() C(risic)io! a!
(s(r"e )he eDc$(si&e C(risic)io! o# )he 3!s(ra!ce Co**issio!.
4Dec()i&e 6rer No. 202,
T19U
%hich crea)e )he LTFR?, co!#erre )he
#o$$o%i!g "o%ers o! )he ?oar:
6SEC% .% $o%ers and /unctions of the and Transportation /ranchising and
"egulatory 6oard. T#e *oard s#all #a5e t#e 'ollo"ing po"ers and 'unctions:
D D D D D D D D D
6b% To issue, amend, re5ise, suspend or cancel Certi'icates o' 0ublic Con5enience or
permits aut#orizing t#e operation o' public land transportation ser5ices pro5ided b$
motorized 5e#icles, and to prescribe t#e appropriate terms and conditions t#ere'ore8
D D D D D D D D D
6H% To 'ormulate, promulgate, administer, implement and en'orce rules and regulations
on land transportation public utilities, standards o' measurements and:or design, and
rules and regulations re@uiring operators o' an$ public land transportation ser5ice to
equip, install and pro5ide in t#eir utilities and in t#eir stations
suc# devices, equipment facilities and operating procedures and techniques as ma$
promote sa'et$, protection, com'ort and con5enience to persons and propert$ in t#eir
c#arges as "ell as t#e sa'et$ o' persons and propert$ "it#in t#eir areas o' operations8
6l% To coordinate and cooperate "it# ot#er go5ernment agencies and entities
concerned "it# an$ aspect in5ol5ing public land transportation ser5ices "it# t#e end
in 5ie" o' e''ecting continuing impro5ement o' suc# ser5ices8 and
6m% To per'orm suc# ot#er 'unctions and duties as ma$ be pro5ided b$ la", or as ma$
be necessary, or proper or incidental to t#e purposes and ob4ecti5es o' t#is E1ecuti5e
2rder%7 9(talics supplied;
/aragra"h M+N gi&es )he LTFR? )he "o%er )o "rescri+e a""ro"ria)e )er*s
a! co!i)io!s #or )he iss(a!ce, a*e!*e!), re&isio!, a! s(s"e!sio! or
ca!ce$$a)io! o# cer)i#ica)es o# "(+$ic co!&e!ie!ce :C/C< or o# "er*i)s
a()horiGi!g )he o"era)io! o# "(+$ic $a! )ra!s"or)a)io! ser&ices. -!er )his
"aragra"h, )he ?oar has )he "reroga)i&e )o re'(ire, as a co!i)io! #or )he
iss(a!ce o# C/Cs, )ha) a! a""$ica!) ge) i!s(ra!ce co&erage #ro* a "ar)ic($ar
gro(" o# i!s(ra!ce co*"a!ies.
Coro$$ar, )o )his "o%er *(s) !ecessari$, +e co!s)r(e )he a()hori), o# )he
LTFR? )o re'(ire i!s(ra!ce co*"a!ies )o gro(" )he*se$&es #or )he "(r"ose
o# "ro&ii!g "asse!ger accie!) i!s(ra!ce co&erage. /aragra"h M*N irec)$,
a()horiGes i) )o "er#or* s(ch o)her #(!c)io!s as *a, +e !ecessar, or
i!cie!)a$ )o )he "(r"oses a! o+Cec)i&es o# 46 202.
?, "ro&ii!g "asse!ger accie!) i!s(ra!ce "o$icies )o o"era)ors o# /->s,
i!s(ra!ce co*"a!ies a! )heir +(si!esses irec)$, a##ec) "(+$ic $a!
)ra!s"or)a)io!. ?, $i*i)i!g i)s reg($a)io! o# s(ch co*"a!ies )o )he seg*e!) o#
)heir +(si!ess )ha) irec)$, a##ec)s "(+$ic $a! )ra!s"or)a)io!, )he LTFR? has
ac)e %i)hi! i)s C(risic)io! i! iss(i!g )he assai$e Circ($ars.
A*i!is)ra)i&e +oies $i2e )he LTFR? ha&e eD"er)ise i! s"eci#ic *a))ers
%i)hi! )he "(r&ie% o# )heir res"ec)i&e C(risic)io!s. Th(s, )he $a% co!cees )o
)he* )he "o%er )o "ro*($ga)e r($es a! reg($a)io!s )o i*"$e*e!) )he "o$icies
o# a gi&e! s)a)()e -- "ro&ie s(ch r($es a! reg($a)io!s co!#or* )o )he )er*s
a! s)a!ars "rescri+e +, )ha) s)a)()e a! "(r"or) )o carr, i)s ge!era$
"o$icies i!)o e##ec).
T20U
3) sho($ a$so +e "oi!)e o() )ha) +e#ore iss(i!g )he Circ($ars, )he LTFR?
*ae "ro"er re"rese!)a)io! a! coori!a)io! %i)h )he 3!s(ra!ce Co**issio!,
%hich ha !o o+Cec)io! )o )he )%o-co!sor)ia sche*e.
(AS$&,s )usiness
Si!ce "e)i)io!er has #ai$e )o sho% a!, coge!) reaso! )o s)ri2e o%! )he
assai$e Circ($ars, )heir i*"$e*e!)a)io! ca!!o) +e res)rai!e. The, *a,
i!ee a&erse$, a##ec) i)s +(si!ess, +() )he "ro)ec)io! o# )he ge!era$ %e$#are
is o# "ara*o(!) i*"or)a!ce. /e)i)io!erFs i!i&i(a$ +(si!ess i!)eres)s *(s) +e
s(+ori!a)e )o )he +e!e#i) o# )he grea)er !(*+er. Salus populi est suprema
lex( Sic utere tuo ut alienum non laedas.
T21U
Pub!i%ation
/e)i)io!er raises #or )he #irs) )i*e i! i)s .e*ora!(* )he iss(e o# )he
a$$ege !o!co*"$ia!ce %i)h )he "(+$ica)io! re'(ire*e!), %hich *(s) #irs) +e
*e) +e#ore )he assai$e Circ($ars ca! +e ee*e &a$i. This arg(*e!) is
i*"ro"er a) )his s)age. /oi!)s o# $a%, )heories, iss(es a! arg(*e!)s !o)
ae'(a)e$, +ro(gh) )o )he a))e!)io! o# )he $o%er co(r) !ee !o) +e -- a!
ori!ari$, %i$$ !o) +e -- co!siere +, a re&ie%i!g co(r), as )he, ca!!o) +e
raise #or )he #irs) )i*e o! a""ea$.
T22U
3!ee, i) is se))$e C(ris"r(e!ce )ha) a!
iss(e )ha) %as !ei)her raise i! )he co*"$ai!) or i! )he co(r) +e$o% ca!!o) +e
raise #or )he #irs) )i*e o! a""ea$, as )o o so %o($ +e o##e!si&e )o )he +asic
r($es o# #air "$a,, C(s)ice, a! (e "rocess.
T23U
CHEREFORE, )he /e)i)io! is D9N!9D a! )he assai$e
Decisio! 00!R-9D. Cos)s agai!s) "e)i)io!er.
SO ORDERED!
5. Avon v Luna GR 153674
AON COSMET/CS vs! L6NA
711 SCRA $,<
FACTS: The "rese!) "e)i)io! s)e**e #ro* a co*"$ai!) a)e 1 Dece*+er 1988, #i$e +, herei!
res"o!e!) L(!a a$$egi!g, i!)er a$ia` )ha) she +ega! %or2i!g #or ?ea()i#o!), 3!c. i! 1972, #irs) as a
#ra!chise ea$er a! )he! a ,ear $a)er, as a S("er&isor. So*e)i*e i! 1978, A&o! Cos*e)ics, 3!c.
:A&o!<, herei! "e)i)io!er, ac'(ire a! )oo2 o&er )he *a!age*e!) a! o"era)io!s o# ?ea()i#o!), 3!c.
No!e)he$ess, res"o!e!) L(!a co!)i!(e %or2i!g #or sai s(ccessor co*"a!,. Asie #ro* her %or2
as a s("er&isor, res"o!e!) L(!a a$so ac)e as a *a2e-(" ar)is) o# "e)i)io!er A&o!Fs Thea)rica$
/ro*o)io!Fs Gro(", #or %hich she recei&e a "er ie* #or each )hea)rica$ "er#or*a!ce.
The co!)rac) %as )ha):
The $ompany agrees.
1< To a$$o% )he S("er&isor )o "(rchase a) %ho$esa$e )he "ro(c)s o# )he Co*"a!,.
The Supervisor agrees.
1< To "(rchase "ro(c)s #ro* )he Co*"a!, eDc$(si&e$, #or resa$e a! )o +e res"o!si+$e #or o+)ai!i!g
a$$ "er*i)s a! $ice!ses re'(ire )o se$$ )he "ro(c)s o! re)ai$.
The $ompany and the Supervisor mutua!!y agree.
1< Tha) )his agree*e!) i! !o %a, *a2es )he S("er&isor a! e*"$o,ee or age!) o# )he Co*"a!,,
)here#ore, )he S("er&isor has !o a()hori), )o +i! )he Co*"a!, i! a!, co!)rac)s %i)h o)her "ar)ies.
2< Tha) )he S("er&isor is a! i!e"e!e!) re)ai$er@ea$er i!so#ar as )he Co*"a!, is co!cer!e, a!
sha$$ ha&e )he so$e iscre)io! )o e)er*i!e %here a! ho% "ro(c)s "(rchase #ro* )he Co*"a!,
%i$$ +e so$. 0o%e&er, )he S("er&isor sha$$ !o) se$$ s(ch "ro(c)s )o s)ores, s("er*ar2e)s or )o a!,
e!)i), or "erso! %ho se$$s )hi!gs a) a #iDe "$ace o# +(si!ess.
3< Tha) )his agree*e!) s("ersees a!, agree*e!)@s +e)%ee! )he Co*"a!, a! )he S("er&isor.
9< Tha) )he S("er&isor sha$$ se$$ or o##er )o se$$, is"$a, or "ro*o)e o!$, a! eDc$(si&e$, "ro(c)s so$
+, )he Co*"a!,.
=< 4i)her "ar), *a, )er*i!a)e )his agree*e!) a) %i$$, %i)h or %i)ho() ca(se, a) a!, )i*e ("o! !o)ice )o
)he o)her.
La)er, res"o!e!) L(!a e!)ere i!)o )he sa$es #orce o# Sa!re /hi$i""i!es %hich ca(se her
)er*i!a)io! #or )he a$$ege &io$a)io! o# )he )er*s o# )he co!)rac). The )ria$ co(r) r($e i! #a&or o# L(!a
)ha) )he co!)rac) %as co!)rar, )o "(+$ic "o$ic, )h(s )he is*issa$ %as !o) "ro"er. The Co(r) o#
A""ea$s a##ir*e )he ecisio!, he!ce )his "e)i)io!.
/SS6E:
5he)her )he Co(r) o# A""ea$s erre i! r($i!g )ha) )he S("er&isorFs Agree*e!) %as i!&a$i #or +ei!g
co!)rar, )o "(+$ic "o$ic,
5he)her )here %as s(+&ersio! o# )he a()o!o*, o# co!)rac)s +, )he $o%er co(r)s
HELD: Agree*e!)s i! &io$a)io! o# ore! "a+$ico *(s) +e co!siere as )hose %hich co!#$ic) %i)h $a%,
%he)her "ro"er$,, s)ric)$, a! %ho$$, a "(+$ic $a% :erecho< or %he)her a $a% o# )he "erso!, +() $a%
%hich i! cer)ai! res"ec)s a##ec)s )he i!)eres) o# socie),. /$ai!$, "(), "(+$ic "o$ic, is )ha) "ri!ci"$e o#
)he $a% %hich ho$s )ha) !o s(+Cec) or ci)iGe! ca! $a%#($$, o )ha) %hich has a )e!e!c, )o +e
i!C(rio(s )o )he "(+$ic or agai!s) )he "(+$ic goo. As a""$ie )o co!)rac)s, i! )he a+se!ce o# eD"ress
$egis$a)io! or co!s)i)()io!a$ "rohi+i)io!, a co(r), i! orer )o ec$are a co!)rac) &oi as agai!s) "(+$ic
"o$ic,, *(s) #i! )ha) )he co!)rac) as )o )he co!siera)io! or )hi!g )o +e o!e, has a )e!e!c, )o
i!C(re )he "(+$ic, is agai!s) )he "(+$ic goo, or co!)ra&e!es so*e es)a+$ishe i!)eres)s o# socie),, or
is i!co!sis)e!) %i)h so(! "o$ic, a! goo *ora$s, or )e!s c$ear$, )o (!er*i!e )he sec(ri), o#
i!i&i(a$ righ)s, %he)her o# "erso!a$ $ia+i$i), or o# "ri&a)e "ro"er),.
Fro* a!o)her "ers"ec)i&e, )he *ai! o+Cec)io! )o eDc$(si&e ea$i!g is i)s )e!e!c, )o #orec$ose
eDis)i!g co*"e)i)ors or !e% e!)ra!)s #ro* co*"e)i)io! i! )he co&ere "or)io! o# )he re$e&a!) *ar2e)
(ri!g )he )er* o# )he agree*e!). 6!$, )hose arra!ge*e!)s %hose "ro+a+$e e##ec) is )o #orec$ose
co*"e)i)io! i! a s(+s)a!)ia$ share o# )he $i!e o# co**erce a##ec)e ca! +e co!siere as &oi #or
+ei!g agai!s) "(+$ic "o$ic,. The #orec$os(re e##ec), i# a!,, e"e!s o! )he *ar2e) share i!&o$&e. The
re$e&a!) *ar2e) #or )his "(r"ose i!c$(es )he #($$ ra!ge o# se$$i!g o""or)(!i)ies reaso!a+$, o"e! )o
ri&a$s, !a*e$,, a$$ )he "ro(c) a! geogra"hic sa$es )he, *a, reai$, co*"e)e #or, (si!g easi$,
co!&er)i+$e "$a!)s a! *ar2e)i!g orga!iGa)io!s.
A""$,i!g )he "recei!g "ri!ci"$es )o )he case a) +ar, )here is !o)hi!g i!&a$i or co!)rar, )o "(+$ic
"o$ic, ei)her i! )he o+Cec)i&es so(gh) )o +e a))ai!e +, "aragra"h =, i.e., )he eDc$(si&i), c$a(se, i!
"rohi+i)i!g res"o!e!) L(!a, a! a$$ o)her A&o! s("er&isors, #ro* se$$i!g "ro(c)s o)her )ha! )hose
*a!(#ac)(re +, "e)i)io!er A&o!.
0a&i!g he$ )ha) )he MeDc$(si&i), c$a(seN as e*+oie i! "aragra"h = o# )he S("er&isorFs Agree*e!)
is &a$i a! !o) agai!s) "(+$ic "o$ic,, %e !o% "ass )o a co!siera)io! o# res"o!e!) L(!aFs
o+Cec)io!s )o )he &a$ii), o# her )er*i!a)io! as "ro&ie #or (!er "aragra"h 8 o# )he S("er&isorFs
Agree*e!) gi&i!g "e)i)io!er A&o! )he righ) )o )er*i!a)e or ca!ce$ s(ch co!)rac). The "aragra"h 8 or
)he M)er*i!a)io! c$a(seN )herei! eD"ress$, "ro&ies )ha):
The Co*"a!, a! )he S("er&isor *()(a$$, agree:
8< 4i)her "ar), *a, )er*i!a)e )his agree*e!) a) %i$$, %i)h or %i)ho() ca(se, a) a!, )i*e ("o! !o)ice )o
)he o)her.
3! )he case a) +ar, )he )er*i!a)io! c$a(se o# )he S("er&isorFs Agree*e!) c$ear$, "ro&ies #or )%o
%a,s o# )er*i!a)i!g a!@or ca!ce$i!g )he co!)rac). 6!e *oe oes !o) eDc$(e )he o)her. The
co!)rac) "ro&ie )ha) i) ca! +e )er*i!a)e or ca!ce$$e #or ca(se, i) a$so s)a)e )ha) i) ca! +e
)er*i!a)e %i)ho() ca(se, +o)h a) a!, )i*e a! a#)er %ri))e! !o)ice. Th(s, %he)her or !o) )he
)er*i!a)io! or ca!ce$$a)io! o# )he S("er&isorFs Agree*e!) %as M#or ca(se,N is i**a)eria$. The o!$,
re'(ire*e!) is )ha) o# !o)ice )o )he o)her "ar),. 5he! "e)i)io!er A&o! chose )o )er*i!a)e )he co!)rac),
#or ca(se, res"o!e!) L(!a %as ($, !o)i#ie )hereo#.
5or)h s)ressi!g is )ha) )he righ) )o (!i$a)era$$, )er*i!a)e or ca!ce$ )he S("er&isorFs Agree*e!) %i)h or
%i)ho() ca(se is e'(a$$, a&ai$a+$e )o res"o!e!) L(!a, s(+Cec) )o )he sa*e !o)ice re'(ire*e!).
6+&io(s$,, !o a&a!)age is )a2e! agai!s) each o)her +, )he co!)rac)i!g "ar)ies.
0e!ce, )he "e)i)io! %as gra!)e.
Ar) 12
LA ?-GAL-?FLAAN &s D4NR, :G.R. No. 127882, 7a!(ar, 27, 2009<
FACTS:
6! 7($, 2=, 1987, )he! /resie!) CoraGo! C. A'(i!o iss(e 4Dec()i&e 6rer :4.6.< No. 2798
a()horiGi!g )he D4NR Secre)ar, )o acce"), co!sier a! e&a$(a)e "ro"osa$s #ro* #oreig!-o%!e
cor"ora)io!s or #oreig! i!&es)ors #or co!)rac)s or agree*e!)s i!&o$&i!g ei)her )ech!ica$ or #i!a!cia$
assis)a!ce #or $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o# *i!era$s, %hich, ("o!
a""ro"ria)e reco**e!a)io! o# )he Secre)ar,, )he /resie!) *a, eDec()e %i)h )he #oreig! "ro"o!e!).
6! .arch 3, 199=, )he! /resie!) Fie$ >. Ra*os a""ro&e R.A. No. 7992 )o Lgo&er! )he eD"$ora)io!,
e&e$o"*e!), ()i$iGa)io! a! "rocessi!g o# a$$ *i!era$ reso(rces.L /e)i)io!ers assai$ )he
co!s)i)()io!a$i), o# Re"(+$ic Ac) No. 7992,= o)her%ise 2!o%! as )he /03L3//3N4 .3N3NG ACT 6F
199=, a$o!g %i)h )he 3*"$e*e!)i!g R($es a! Reg($a)io!s iss(e "(rs(a!) )here)o, De"ar)*e!) o#
4!&iro!*e!) a! Na)(ra$ Reso(rces :D4NR< A*i!is)ra)i&e 6rer 98-90, a! o# )he Fi!a!cia$ a!
Tech!ica$ Assis)a!ce Agree*e!) :FTAA< e!)ere i!)o o! .arch 30, 199= +, )he Re"(+$ic o# )he
/hi$i""i!es a! 5.C :/hi$i""i!es<, 3!c. :5.C/<, a cor"ora)io! orga!iGe (!er /hi$i""i!e $a%s.
3SS-4:
Are #oreig!-o%!e cor"ora)io!s i! )he $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o#
"e)ro$e(*, *i!era$s a! *i!era$ oi$s $i*i)e )o M)ech!ica$N or M#i!a!cia$N assis)a!ce o!$,R
R-L3NG:
Accori!g$,, #o$$o%i!g )he $i)era$ )eD) o# )he Co!s)i)()io! "ro&ie +, Sec)io! 2, Ar)ic$e I33, assis)a!ce
accore +, #oreig!-o%!e cor"ora)io!s i! )he $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o#
"e)ro$e(*, *i!era$s a! *i!era$ oi$s sho($ +e $i*i)e )o L)ech!ica$L or L#i!a!cia$L assis)a!ce o!$,.
Th(s, R.A. No. 7992 is i!&a$i i!so#ar as sai Ac) a()horiGes ser&ice co!)rac)s. A$)ho(gh )he s)a)()e
e*"$o,s )he "hrase L#i!a!cia$ a! )ech!ica$ agree*e!)sL i! accora!ce %i)h )he 1987 Co!s)i)()io!, i)
ac)(a$$, )rea)s )hese agree*e!)s as ser&ice co!)rac)s )ha) gra!) +e!e#icia$ o%!ershi" )o #oreig!
co!)rac)ors co!)rar, )o )he #(!a*e!)a$ $a%.
LA ?-GAL-?FLAAN &s D4NR, :G.R. No. 127882, Dece*+er 1, 2009<
FACTS:
This is a /e)i)io! #or /rohi+i)io! a! .a!a*(s +e#ore )he Co(r) )ha) cha$$e!ges )he co!s)i)()io!a$i),
o# :1< Re"(+$ic Ac) No. TRAU 7992 :The /hi$i""i!e .i!i!g Ac) o# 199=<P :2< i)s 3*"$e*e!)i!g R($es a!
Reg($a)io!s :D4NR A*i!is)ra)i&e 6rer No. TDA6U 98-90<P a! :3< )he FTAA a)e .arch 30, 199=,
eDec()e +, )he go&er!*e!) %i)h 5es)er! .i!i!g Cor"ora)io! :/hi$i""i!es<, 3!c. :5.C/<.
3SS-4:
Are #oreig!-o%!e cor"ora)io!s i! )he $arge-sca$e eD"$ora)io!, e&e$o"*e!), a! ()i$iGa)io! o#
"e)ro$e(*, *i!era$s a! *i!era$ oi$s $i*i)e )o M)ech!ica$N or M#i!a!cia$N assis)a!ce o!$,R
R-L3NG:
The Co(r) i !o) see ho% a""$,i!g a s)ric)$, $i)era$ or &er+a $egis i!)er"re)a)io! o# "aragra"h 9 co($
i!eDora+$, $ea )o )he co!c$(sio!s arri&e a) i! )he "o!e!cia. Firs), )he ra#)ersK choice o# %ors --
)heir (se o# )he "hrase agree*e!)s D D D i!&o$&i!g ei)her )ech!ica$ or #i!a!cia$ assis)a!ce -- oes !o)
i!ica)e )he i!)e!) )o eDc$(e o)her *oes o# assis)a!ce. The ra#)ers o")e )o (se i!&o$&i!g %he!
)he, co($ ha&e si*"$, sai agree*e!)s #or #i!a!cia$ or )ech!ica$ assis)a!ce, i# )ha) %as )heir i!)e!)io!
)o +egi! %i)h. 3! )his case, )he $i*i)a)io! %o($ +e &er, c$ear a! !o #(r)her e+a)e %o($ e!s(e. 3!
co!)ras), )he (se o# )he %or Li!&o$&i!gL sig!i#ies )he "ossi+i$i), o# )he i!c$(sio! o# o)her #or*s o#
assis)a!ce or ac)i&i)ies ha&i!g )o o %i)h, o)her%ise re$a)e )o or co*"a)i+$e %i)h #i!a!cia$ or )ech!ica$
assis)a!ce. The %or Li!&o$&i!gL as (se i! )his co!)eD) has )hree co!!o)a)io!s )ha) ca! +e
i##ere!)ia)e )h(s: o!e, )he se!se o# Lco!cer!i!g,L Lha&i!g )o o %i)h,L or La##ec)i!gLP )%o, Le!)ai$i!g,L
Lre'(iri!g,L Li*"$,i!gL or L!ecessi)a)i!gLP a! )hree, Li!c$(i!g,L Lco!)ai!i!gL or Lco*"risi!g.L /$ai!$,,
!o!e o# )he )hree co!!o)a)io!s co!&e, a se!se o# eDc$(si&i),. .oreo&er, )he %or Li!&o$&i!g,L %he!
(!ers)oo i! )he se!se o# Li!c$(i!g,L as i! i!c$(i!g )ech!ica$ or #i!a!cia$ assis)a!ce, !ecessari$,
i*"$ies )ha) )here are ac)i&i)ies o)her )ha! )hose )ha) are +ei!g i!c$(e. 3! o)her %ors, i# a!
agree*e!) i!c$(es )ech!ica$ or #i!a!cia$ assis)a!ce, )here is a"ar) #ro* s(ch assis)a!ce -- so*e)hi!g
e$se a$rea, i!, a! co&ere or *a, +e co&ere +,, )he sai agree*e!). Th(s, )he (se o# )he %or
Li!&o$&i!gL i*"$ies )ha) )hese agree*e!)s %i)h #oreig! cor"ora)io!s are !o) $i*i)e )o *ere #i!a!cia$ or
)ech!ica$ assis)a!ce. The i##ere!ce i! se!se +eco*es &er, a""are!) %he! %e C(D)a"ose
Lagree*e!)s #or )ech!ica$ or #i!a!cia$ assis)a!ceL agai!s) Lagree*e!)s i!c$(i!g )ech!ica$ or #i!a!cia$
assis)a!ce.L This *(ch is (!a$)era+$, c$ear i! a &er+a $egis a""roach.
Seco!, i# )he rea$ i!)e!)io! o# )he ra#)ers %as )o co!#i!e #oreig! cor"ora)io!s )o #i!a!cia$ or )ech!ica$
assis)a!ce a! !o)hi!g *ore, )heir $a!g(age %o($ ha&e cer)ai!$, +ee! so (!*is)a2a+$, res)ric)i&e
a! s)ri!ge!) as )o $ea&e !o o(+) i! a!,o!eKs *i! a+o() )heir )r(e i!)e!). For eDa*"$e, )he, %o($
ha&e (se )he se!)e!ce #oreig! cor"ora)io!s are a+so$()e$, "rohi+i)e #ro* i!&o$&e*e!) i! )he
*a!age*e!) or o"era)io! o# *i!i!g or si*i$ar &e!)(res or %ors o# si*i$ar i*"or). A search #or s(ch
s)ri!ge!) %ori!g ,ie$s !ega)i&e res($)s. Th(s, )here %as a co!scio(s a! e$i+era)e ecisio! )o
a&oi )he (se o# res)ric)i&e %ori!g )ha) +es"ea2s a! i!)e!) !o) )o (se )he eD"ressio! Lagree*e!)s D D
D i!&o$&i!g ei)her )ech!ica$ or #i!a!cia$ assis)a!ceL i! a! eDc$(sio!ar, a! $i*i)i!g *a!!er.
C0A>4V &s /4A, :G.R. No. 1332=0, No&e*+er 11, 2003<
FACTS:
This "e)i)io! as2e )he Co(r) )o $egi)i*iGe a go&er!*e!) co!)rac) )ha) co!&e,e )o a "ri&a)e e!)i),
1=7.89 hec)ares o# rec$ai*e "(+$ic $a!s a$o!g RoDas ?o($e&ar i! .e)ro .a!i$a a) )he !ego)ia)e
"rice o# /1,200 "er s'(are *e)er. 0o%e&er, "(+$ishe re"or)s "$ace )he *ar2e) "rice o# $a! !ear )ha)
area a) )ha) )i*e a) a high o# /90,000 "er s'(are *e)er. The i##ere!ce i! "rice is a s)aggeri!g
/190.18 +i$$io!, e'(i&a$e!) )o )he +(ge) o# )he e!)ire 7(iciar, #or se&e!)ee! ,ears a! *ore )ha!
)hree )i*es )he .arcos S%iss e"osi)s )ha) )his Co(r) #or#ei)e i! #a&or o# )he go&er!*e!).
/(+$ic 4s)a)es A()hori), :/4A<, (!er )he 7>A, o+$iga)e i)se$# )o co!&e, )i)$e a! "ossessio! o&er )he
/ro"er),, co!sis)i!g o# a""roDi*a)e$, 6!e .i$$io! Fi&e 0(!re Se&e!), 4igh) Tho(sa! Fo(r
0(!re For), 6!e :1,=78,991< S'(are .e)ers #or a )o)a$ co!siera)io! o# 6!e ?i$$io! 4igh) 0(!re
Ni!e), Fo(r .i$$io! 6!e 0(!re T%e!), Ni!e Tho(sa! T%o 0(!re :/1,899,129,200.00< /esos,
or a "rice o# 6!e Tho(sa! T%o 0(!re :/1,200.00< /esos "er s'(are *e)er.
3SS-4:
5he)her or !o) s)i"($a)io!s i! )he A*e!e 7>A #or )he )ra!s#er )o A.AR3 o# $a!s, rec$ai*e or )o +e
rec$ai*e o! "or)io!s o# .a!i$a ?a,, &io$a)e )he Co!s)i)()io!R
R-L3NG:
S(+*erge $a!s, $i2e )he %a)ers :sea or +a,< a+o&e )he*, are "ar) o# )he S)a)eFs i!a$ie!a+$e !a)(ra$
reso(rces. S(+*erge $a!s are "ro"er), o# "(+$ic o*i!io!, a+so$()e$, i!a$ie!a+$e a! o()sie )he
co**erce o# *a!. This is a$so )r(e %i)h res"ec) )o #oreshore $a!s. A!, sa$e o# s(+*erge or
#oreshore $a!s is &oi +ei!g co!)rar, )o )he Co!s)i)()io! as i) &io$a)es Sec)io! 2, Ar)ic$e I33. 3! )he
i!s)a!) case, )he +($2 o# )he $a!s s(+Cec) o# )he A*e!e 7>A are s)i$$ s(+*erge $a!s e&e! )o )his
&er, a,, a! )here#ore i!a$ie!a+$e a! o()sie )he co**erce o# *a!. 6# )he 7=0 hec)ares s(+Cec) o#
)he A*e!e 7>A, =92.1= hec)ares or 78Z o# )he )o)a$ area are s)i$$ s(+*erge, "er*a!e!)$, (!er
)he %a)ers o# .a!i$a ?a,. -!er )he A*e!e 7>A, )he /4A co!&e,e )o A*ari )he s(+*erge $a!s
e&e! +e#ore )heir ac)(a$ rec$a*a)io!, a$)ho(gh )he oc(*e!)a)io! o# )he ee o# )ra!s#er a!
iss(a!ce o# )he cer)i#ica)es o# )i)$e %o($ +e *ae o!$, a#)er ac)(a$ rec$a*a)io!. This Reso$()io! oes
!o) "reC(ice a!, i!!oce!) )hir "ar), "(rchaser o# )he rec$ai*e $a!s co&ere +, )he A*e!e 7>A.
Nei)her )he /4A !or A*ari has so$ a!, "or)io! o# )he rec$ai*e $a!s )o )hir "ar)ies. Ti)$e )o )he
rec$ai*e $a!s re*ai!s %i)h )he /4A. As he$ i! )he 9 7($, 2002 Decisio!, )he A*e!e 7>A
L&io$a)es g$ari!g$, Sec)io!s 2 a! 3, Ar)ic$e I33 o# )he 1987 Co!s)i)()io!.L
.a)he%s &s Ta,$or
Fac)s: 6! 7(!e 30, 1988, res"o!e!) ?e!Ca*i! A. Ta,$or :?e!Ca*i!<, a ?ri)ish s(+Cec), *arrie
7ose$,! C. Ta,$or :7ose$,!<, a 17-,ear o$ Fi$i"i!a. 6! 7(!e 9, 1989, %hi$e )heir *arriage %as
s(+sis)i!g, 7ose$,! +o(gh) #ro* Diosa .. .ar)i! a 1,299 s'(are-*e)er $o) :?oraca, "ro"er),< si)(a)e
a) .a!oc-.a!oc, ?oraca, 3s$a!, .a$a,, A2$a!, #or a! i! co!siera)io! o# /129,000.00. The sa$e
%as a$$ege$, #i!a!ce +, ?e!Ca*i!. 7ose$,! a! ?e!Ca*i!, a$so (si!g )he $a))erFs #(!s, co!s)r(c)e
i*"ro&e*e!)s )hereo! a! e&e!)(a$$, co!&er)e )he "ro"er), )o a &aca)io! a! )o(ris) resor) 2!o%!
as )he A*ira$ ?e! ?o% 3!!. A$$ re'(ire "er*i)s a! $ice!ses #or )he o"era)io! o# )he resor) %ere
o+)ai!e i! )he !a*e o# Gi!!a Ce$es)i!o, 7ose$,!Fs sis)er. 0o%e&er, ?e!Ca*i! a! 7ose$,! ha a
#a$$i!g o(), a! 7ose$,! ra! a%a, %i)h 1i* /hi$i""se!. 6! 7(!e 8, 1992, 7ose$,! eDec()e a S"ecia$
/o%er o# A))or!e, :S/A< i! #a&or o# ?e!Ca*i!, a()horiGi!g )he $a))er )o *ai!)ai!, se$$, $ease, a! s(+-
$ease a! o)her%ise e!)er i!)o co!)rac) %i)h )hir "ar)ies %i)h res"ec) )o )heir ?oraca, "ro"er),. 6!
7($, 20, 1992, 7ose$,! as $essor a! "e)i)io!er /hi$i" .a))he%s as $essee, e!)ere i!)o a! Agree*e!)
o# Lease :Agree*e!)< i!&o$&i!g )he ?oraca, "ro"er), #or a "erio o# 2= ,ears, %i)h a! a!!(a$ re!)a$ o#
/12,000.00. The agree*e!) %as sig!e +, )he "ar)ies a! eDec()e +e#ore a No)ar, /(+$ic.
/e)i)io!er )herea#)er )oo2 "ossessio! o# )he "ro"er), a! re!a*e )he resor) as .(sic Gare! Resor).
C$ai*i!g )ha) )he Agree*e!) %as !($$ a! &oi si!ce i) %as e!)ere i!)o +, 7ose$,! %i)ho() his
:?e!Ca*i!Fs< co!se!), ?e!Ca*i! i!s)i)()e a! ac)io! #or Dec$ara)io! o# N($$i), o# Agree*e!) o# Lease
%i)h Da*ages agai!s) 7ose$,! a! )he "e)i)io!er. ?e!Ca*i! c$ai*e )ha) his #(!s %ere (se i! )he
ac'(isi)io! a! i*"ro&e*e!) o# )he ?oraca, "ro"er),, a! co("$e %i)h )he #ac) )ha) he %as 7ose$,!Fs
h(s+a!, a!, )ra!sac)io! i!&o$&i!g sai "ro"er), re'(ire his co!se!).
3ss(e: Ca! a! a$ie! h(s+a! !($$i#, a $ease co!)rac) e!)ere i!)o +, his Fi$i"i!a %i#e+o(gh) (ri!g
)heir *arriageR
0e$: The r($e is c$ear a! i!#$eDi+$e: a$ie!s are a+so$()e$, !o) a$$o%e )o ac'(ire "(+$ic or "ri&a)e
$a!s i! )he /hi$i""i!es, sa&e o!$, i! co!s)i)()io!a$$, recog!iGe eDce")io!s. There is !o r($e *ore
se))$e )ha! )his co!s)i)()io!a$ "rohi+i)io!, as *ore a! *ore a$ie!s a))e*") )o circ(*&e!) )he
"ro&isio! +, )r,i!g )o o%! $a!s )hro(gh a!o)her. 3! a $o!g $i!e o# cases, %e ha&e se))$e iss(es )ha)
irec)$, or i!irec)$, i!&o$&e )he a+o&e co!s)i)()io!a$ "ro&isio!. 5e ha cases %here a$ie!s %a!)e
)ha) a "ar)ic($ar "ro"er), +e ec$are as "ar) o# )heir #a)herFs es)a)eP )ha) )he, +e rei*+(rse )he
#(!s (se i! "(rchasi!g a "ro"er), )i)$e i! )he !a*e o# a!o)herP )ha) a! i*"$ie )r(s) +e ec$are i!
)heir :a$ie!sF< #a&orP a! )ha) a co!)rac) o# sa$e +e !($$i#ie #or )heir $ac2 o# co!se!). ?e!Ca*i! has !o
righ) )o !($$i#, )he Agree*e!) o# Lease +e)%ee! 7ose$,! a! "e)i)io!er. ?e!Ca*i!, +ei!g a! a$ie!, is
a+so$()e$, "rohi+i)e #ro* ac'(iri!g "ri&a)e a! "(+$ic $a!s i! )he /hi$i""i!es. Co!sieri!g )ha)
7ose$,! a""eare )o +e )he esig!a)e M&e!eeN i! )he Dee o# Sa$e o# sai "ro"er),, she ac'(ire
so$e o%!ershi" )here)o. This is )r(e e&e! i# %e s(s)ai! ?e!Ca*i!Fs c$ai* )ha) he "ro&ie )he #(!s #or
s(ch ac'(isi)io!. ?, e!)eri!g i!)o s(ch co!)rac) 2!o%i!g )ha) i) %as i$$ega$, !o i*"$ie )r(s) %as
crea)e i! his #a&orP !o rei*+(rse*e!) #or his eD"e!ses ca! +e a$$o%eP a! !o ec$ara)io! ca! +e
*ae )ha) )he s(+Cec) "ro"er), %as "ar) o# )he co!C(ga$@co**(!i), "ro"er), o# )he s"o(ses. 3! a!,
e&e!), he ha a! has !o ca"aci), or "erso!a$i), )o '(es)io! )he s(+se'(e!) $ease o# )he ?oraca,
"ro"er), +, his %i#e o! )he )heor, )ha) i! so oi!g, he %as *ere$, eDercisi!g )he "reroga)i&e o# a
h(s+a! i! res"ec) o# co!C(ga$ "ro"er),. To s(s)ai! s(ch a )heor, %o($ co(!)e!a!ce i!irec)
co!)ro&ersio! o# )he co!s)i)()io!a$ "rohi+i)io!. 3# )he "ro"er), %ere )o +e ec$are co!C(ga$, )his %o($
accor )he a$ie! h(s+a! a s(+s)a!)ia$ i!)eres) a! righ) o&er )he $a!, as he %o($ )he! ha&e a
ecisi&e &o)e as )o i)s )ra!s#er or is"osi)io!. This is a righ) )ha) )he Co!s)i)()io! oes !o) "er*i) hi*
)o ha&e.
Re"(+$ic &s 4s)o!i$$o
Fac)s: This case origi!a)e #ro* a! a""$ica)io! #or regis)ra)io! o# a "arce$ o# $a! 2!o%! as Lo) No.
9318 o# )he caas)ra$ s(r&e, o# Caga,a! e 6ro co!sis)i!g To#U a! area o# 3=7,888 s'(are *e)ers,
#i$e +, T)heU origi!a$ TaU""$ica!), NaGaria ?o*+eo %i)h )he e#(!c) Co(r) o# Firs) 3!s)a!ce o# .isa*is
6rie!)a$ o! 7($, 22, 19=9. 3! her a""$ica)io!, ?o*+eo c$ai*e )ha) sai "arce$ o# $a! %as "re&io(s$,
o%!e a! "ossesse +, a cer)ai! Rose!o ?acas si!ce 1899 (!)i$ i) %as so$ )o her +, )he heirs o#
Rose!o ?acas, re"rese!)e +, )heir a))or!e,-i!-#ac) a! heir hi*se$#, Ca$is)ro ?acas +, &ir)(e o# a!
A+so$()e Sa$e o# Rea$), o! 7(!e 19, 19=9.
MA#)er (e !o)ice a! "(+$ica)io! o# sai a""$ica)io!, o!$, )he /ro&i!cia$ Fisca$ o# .isa*is 6rie!)a$, i!
+eha$# o# )he Chie# o# S)a## o# )he Ar*e Forces o# )he /hi$i""i!es TAF/U a! )he Direc)or o# T)heU
?(rea( o# La!TsU #i$e i)s o""osi)io! )here)o, a$$egi!g )ha) Lo) 9318 is !o) a regis)ra+$e $a! "(rs(a!)
)o /resie!)ia$ /roc$a*a)io! No. 28=, %hich )oo2 e##ec) o! .arch 31, 1938, a! %hich ec$are Lo)
9318 reser&e #or )he (se o# )he /hi$i""i!e Ar*,,
3ss(e: Does )he /(+$ic La! Ac) re'(ire a C(icia$ orer )o crea)e a *i$i)ar, reser&a)io!R
0e$: To segrega)e "or)io!s o# )he "(+$ic o*ai! as reser&a)io!s #or )he (se o# )he Re"(+$ic o# )he
/hi$i""i!es or a!, o# i)s +ra!ches, $i2e )he Ar*e Forces o# )he /hi$i""i!es, a$$ )ha) is !eee is a
"resie!)ia$ "roc$a*a)io! )o )ha) e##ec). A Co(r) C(g*e!) is !o) !ecessar, )o *a2e )he "roc$a*a)io!
e##ec)i&e or &a$i.
The /(+$ic La! Ac) re'(ires a""$ica!)s #or co!#ir*a)io! o# i*"er#ec) )i)$es )o "ro&e :1< )ha) )he $a! is
a$ie!a+$e "(+$ic $a!P a! :2< )ha) )heir o"e!, co!)i!(o(s, eDc$(si&e a! !o)orio(s "ossessio! a!
occ("a)io! o# )he "ro"er), has )a2e! "$ace ei)her si!ce )i*e i**e*oria$ or #or )he "erio "rescri+e
+, $a%. 5he! )he $ega$ co!i)io!s are co*"$ie %i)h, )he "ossessor o# )he $a! -- +, o"era)io! o# $a%
-- ac'(ires a righ) )o a go&er!*e!) gra!), %i)ho() !ecessi)a)i!g )he iss(a!ce o# a cer)i#ica)e o# )i)$e.
A#)er a *e)ic($o(s re&ie% o# )he Decisio!s o# +o)h )he )ria$ a! )he a""e$$a)e co(r)s, as %e$$ as o# )he
e&ie!ce o! recor, )he Co(r) #i!s )ha) res"o!e!)s #ai$e )o sa)is#, )he a+o&e $ega$ re'(ire*e!)s.
S4CT36N 3
SAAD &ers(s Re"(+$ic
FACTS: The i!s)a!) "e)i)io! #or re&ie% assai$s )he ecisio! o# )he Co(r) o# A""ea$s %hich i!&a$ia)e
)he sa$e o# )he Lo) No. 1939 o# Ca-31=-D, a "arce$ o# $a! %i)h a! area o# 12.8977 hec)ares $oca)e
i! ?ara!ga, A+(go!, Si+o!ga, Ce+( )o "e)i)io!er.
SAAD Agro-3!(s)ries, 3!c. is irec)e )o s(rre!er )he o%!erKs ("$ica)e co", o# 6rigi!a$ Cer)i#ica)e
o# Ti)$e TNo.U 0-8887 )o )he Regis)er o# Dees o# Ce+( Ci), %hich %as orere )o ca!ce$ 6CT TNo.U 0-
8887 a! a$$ o)her )ra!s#er cer)i#ica)es o# )i)$e )ha) *a, ha&e +ee! s(+se'(e!)$, iss(e.
/e)i)io!er #i$e a *o)io! #or reco!siera)io!, c$ai*i!g i!s(##icie!c, o# e&ie!ce a! #ai$(re )o co!sier
"er)i!e!) $a%s, "ro&e #()i$e as i) %as is*isse #or $ac2 o# *eri).
3SS-4: 5ha) is )he Rega$ia! Doc)ri!eR
R-L3NG: The Co(r) has a$%a,s recog!iGe a! ("he$ )he Rega$ia! oc)ri!e as )he +asic #o(!a)io!
o# )he S)a)eKs "ro"er), regi*e.-!er )he Rega$ia! oc)ri!e or C(ra rega$ia, a$$ $a!s o# )he "(+$ic
o*ai! +e$o!g )o )he S)a)e, a! )he S)a)e is )he so(rce o# a!, asser)e righ) )o o%!ershi" i! $a! a!
charge %i)h )he co!ser&a)io! o# s(ch "a)ri*o!,. -!er )his oc)ri!e, $a!s !o) o)her%ise a""eari!g
)o +e c$ear$, %i)hi! "ri&a)e o%!ershi" are "res(*e )o +e$o!g )o )he S)a)e. 3! i!s)a!ces %here a
"arce$ o# $a! co!siere )o +e i!a$ie!a+$e $a! o# )he "(+$ic o*ai! is #o(! (!er "ri&a)e
o%!ershi", )he Go&er!*e!) is a$$o%e +, $a% )o #i$e a! ac)io! #or re&ersio!, %hich is a! ac)io! %here
)he ($)i*a)e re$ie# so(gh) is )o re&er) )he $a! )o )he go&er!*e!) (!er )he Rega$ia! oc)ri!e.
Co!sieri!g )ha) )he $a! s(+Cec) o# )he ac)io! origi!a)e #ro* a gra!) +, )he go&er!*e!), i)s
ca!ce$$a)io! is a *a))er +e)%ee! )he gra!)or a! )he gra!)ee.
Da&i &s. Arro,o G.R. !os.171398
Fac)s: 3! )heir "rese!)a)io! o# )he #ac)(a$ +ases o# // 1017 a! G.6. No. =, res"o!e!)s s)a)e )ha)
)he "roDi*a)e ca(se +ehi! )he eDec()i&e iss(a!ces %as )he co!s"irac, a*o!g so*e *i$i)ar,
o##icers, $e#)is) i!s(rge!)s o# )he Ne% /eo"$eFs Ar*, :N/A<, a! so*e *e*+ers o# )he "o$i)ica$
o""osi)io! i! a "$o) )o (!sea) or assassi!a)e /resie!) Arro,o.9 The, co!siere )he ai* )o o(s) or
assassi!a)e )he /resie!) a! )a2e-o&er )he reig!s o# go&er!*e!) as a c$ear a! "rese!) a!ger.
D(ri!g )he ora$ arg(*e!)s he$ o! .arch 7, 2008, )he So$ici)or Ge!era$ s"eci#ie )he #ac)s $eai!g )o
)he iss(a!ce o# // 1017 a! G.6. No. =. Sig!i#ica!)$,, )here %as !o re#()a)io! #ro* "e)i)io!ersF
co(!se$s.
The So$ici)or Ge!era$ arg(e )ha) )he i!)e!) o# )he Co!s)i)()io! is )o gi&e #($$ iscre)io!ar, "o%ers )o
)he /resie!) i! e)er*i!i!g )he !ecessi), o# ca$$i!g o() )he ar*e #orces. 0e e*"hasiGe )ha) !o!e
o# )he "e)i)io!ers has sho%! )ha) // 1017 %as %i)ho() #ac)(a$ +ases. 5hi$e he eD"$ai!e )ha) i) is !o)
res"o!e!)sF )as2 )o s)a)e )he #ac)s +ehi! )he '(es)io!e /roc$a*a)io!, ho%e&er, )he, are
"rese!)i!g )he sa*e, !arra)e here(!er, #or )he e$(cia)io! o# )he iss(es.
iss(e: i! )i*es o# !a)io!a$ e*erge!c,, *a, )he "resie!) eDcercise "o%ers (!er sec)io! 17, ar)ic$e Dii
%i)ho() co!gressio!a$ a()hori),R
R($i!g: )he /resie!) *a, eDercise s(ch "o%ers (!er Sec)io! 17, Ar)ic$e I33 o!$, (!er )he gra!) o#
co!gressio!a$ a""ro&a$. Cer)ai!$,, )he !o)io! )ha) co!gressio!a$ a()hori), is re'(ire (!er Sec)io!
17, Ar)ic$e I33 is !o) e&ie!) #ro* )he "ro&isio!. 4&e! Fr. ?er!as !o)es )ha) Sec)io! 17 oes !o)
re'(ire, as oes Ar)ic$e >3, Sec)io! 23:2<, )ha) )he a()horiGa)io! +e L+, $a%L, )h(s $ea&i!g )he
i*"ressio! )ha) )he a()horiGa)io! ca! co*e #ro* )he /resie!)
.a))he%s &s. )a,$or g.r. !o. 189=89
#ac)s: 6! 7(!e 30, 1988, res"o!e!) ?e!Ca*i! A. Ta,$or :?e!Ca*i!<, a ?ri)ish s(+Cec), *arrie
7ose$,! C. Ta,$or :7ose$,!<, a 17-,ear o$ Fi$i"i!a.T9U 6! 7(!e 9, 1989, %hi$e )heir *arriage %as
s(+sis)i!g, 7ose$,! +o(gh) #ro* Diosa .. .ar)i! a 1,299 s'(are-*e)er $o) :?oraca, "ro"er),< si)(a)e
a) .a!oc-.a!oc, ?oraca, 3s$a!, .a$a,, A2$a!, #or a! i! co!siera)io! o# /129,000.00.T=U The sa$e
%as a$$ege$, #i!a!ce +, ?e!Ca*i!.T8U 7ose$,! a! ?e!Ca*i!, a$so (si!g )he $a))erFs #(!s,
co!s)r(c)e i*"ro&e*e!)s )hereo! a! e&e!)(a$$, co!&er)e )he "ro"er), )o a &aca)io! a! )o(ris)
resor) 2!o%! as )he A*ira$ ?e! ?o% 3!!.T7U A$$ re'(ire "er*i)s a! $ice!ses #or )he o"era)io! o# )he
resor) %ere o+)ai!e i! )he !a*e o# Gi!!a Ce$es)i!o, 7ose$,!Fs sis)er.T8U
0o%e&er, ?e!Ca*i! a! 7ose$,! ha a #a$$i!g o(), a! 7ose$,! ra! a%a, %i)h 1i* /hi$i""se!. 6!
7(!e 8, 1992, 7ose$,! eDec()e a S"ecia$ /o%er o# A))or!e, :S/A< i! #a&or o# ?e!Ca*i!, a()horiGi!g
)he $a))er )o *ai!)ai!, se$$, $ease, a! s(+-$ease a! o)her%ise e!)er i!)o co!)rac) %i)h )hir "ar)ies
%i)h res"ec) )o )heir ?oraca, "ro"er),.
3ss(e: ca! a! a$ie! !($$i#, a $ease co!)rac) e!)ere i!)o +, his #i$i"i!a %i#e o&er a $a! +o(gh) (ri!g
)heir *arriageR
r($i!g: No, he oes !o) ha&e a!, righ), ?e!Ca*i! has !o righ) )o !($$i#, )he Agree*e!) o# Lease
+e)%ee! 7ose$,! a! "e)i)io!er. ?e!Ca*i!, +ei!g a! a$ie!, is a+so$()e$, "rohi+i)e #ro* ac'(iri!g
"ri&a)e a! "(+$ic $a!s i! )he /hi$i""i!es. Co!sieri!g )ha) 7ose$,! a""eare )o +e )he esig!a)e
M&e!eeN i! )he Dee o# Sa$e o# sai "ro"er),, she ac'(ire so$e o%!ershi" )here)o. This is )r(e e&e!
i# %e s(s)ai! ?e!Ca*i!Fs c$ai* )ha) he "ro&ie )he #(!s #or s(ch ac'(isi)io!. ?, e!)eri!g i!)o s(ch
co!)rac) 2!o%i!g )ha) i) %as i$$ega$, !o i*"$ie )r(s) %as crea)e i! his #a&orP !o rei*+(rse*e!) #or his
eD"e!ses ca! +e a$$o%eP a! !o ec$ara)io! ca! +e *ae )ha) )he s(+Cec) "ro"er), %as "ar) o# )he
co!C(ga$@co**(!i), "ro"er), o# )he s"o(ses.
Sec. o# D4NR &s. ,a" g.r. !o. 187707
Fac)s: /e)i)io!ers-c$ai*a!)s co!)e!e )ha) )here is !o !ee #or a "roc$a*a)io! rec$assi#,i!g ?oraca,
i!)o agric($)(ra$ $a!. ?ei!g c$assi#ie as !ei)her *i!era$ !or )i*+er $a!, )he is$a! is ee*e
agric($)(ra$ "(rs(a!) )o )he /hi$i""i!e ?i$$ o# 1902 a! Ac) No. 928, 2!o%! as )he #irs) /(+$ic La! Ac).
T32U Th(s, )heir "ossessio! i! )he co!ce") o# o%!er #or )he re'(ire "erio e!)i)$e )he* )o C(icia$
co!#ir*a)io! o# i*"er#ec) )i)$e.
6""osi!g )he "e)i)io!, )he 6SG arg(e )ha) "e)i)io!ers-c$ai*a!)s o !o) ha&e a &es)e righ) o&er )heir
occ("ie "or)io!s i! )he is$a!. ?oraca, is a! (!c$assi#ie "(+$ic #ores) $a! "(rs(a!) )o Sec)io! 3:a<
o# /D No. 70=. ?ei!g "(+$ic #ores), )he c$ai*e "or)io!s o# )he is$a! are i!a$ie!a+$e a! ca!!o) +e
)he s(+Cec) o# C(icia$ co!#ir*a)io! o# i*"er#ec) )i)$e. 3) is o!$, )he eDec()i&e e"ar)*e!), !o) )he co(r)s,
%hich has a()hori), )o rec$assi#, $a!s o# )he "(+$ic o*ai! i!)o a$ie!a+$e a! is"osa+$e $a!s. There
is a !ee #or a "osi)i&e go&er!*e!) ac) i! orer )o re$ease )he $o)s #or is"osi)io!.
3ss(e: 3s /G.AKs "resie!)ia$ "roc$ai*a)io! !o. 108= c$assi#,i!g +oraca, is$a! i!)o 900 hec)ares o#
reser&e a! #ores) $a! a! 828 hec)ares o# agric($)(ra$ $a! :a$ie!a+$e a! is"osa+$e< &a$i a!
co!s)i)()io!a$R
R($i!g: 3! iss(i!g /roc$a*a)io! No. 1089, /resie!) G$oria .aca"aga$-Arro,o *ere$, eDercise )he
a()hori), gra!)e )o her )o c$assi#, $a!s o# )he "(+$ic o*ai!, "res(*a+$, s(+Cec) )o eDis)i!g &es)e
righ)s. C$assi#ica)io! o# "(+$ic $a!s is )he eDc$(si&e "reroga)i&e o# )he 4Dec()i&e De"ar)*e!), )hro(gh
)he 6##ice o# )he /resie!). /roc$a*a)io! No. 1089 c$assi#ies ?oraca, i!)o 900 hec)ares o# reser&e
#ores) $a! a! 828.98 hec)ares o# agric($)(ra$ $a!. The /roc$a*a)io! $i2e%ise "ro&ies #or a 1=-
*e)er +(##er Go!e o! each sie o# )he ce!)er $i!e o# roas a! )rai$s, %hich are reser&e #or righ) o#
%a, a! %hich sha$$ #or* "ar) o# )he area reser&e #or #ores) $a! "ro)ec)io! "(r"oses.
Co!)rar, )o "ri&a)e c$ai*a!)sF arg(*e!), )here %as !o)hi!g i!&a$i or irreg($ar, *(ch $ess
(!co!s)i)()io!a$, a+o() )he c$assi#ica)io! o# ?oraca, 3s$a! *ae +, )he /resie!) )hro(gh
/roc$a*a)io! No. 1089. 3) %as %i)hi! her a()hori), )o *a2e s(ch c$assi#ica)io!, s(+Cec) )o eDis)i!g
&es)e righ)s.
Cha&eG &s. /4A G.R. 1332=0 C($, 9, 2002
Fac)s: 6! No&e*+er 20, 1973, )he go&er!*e!), )hro(gh )he Co**issio!er o# /(+$ic 0igh%a,s,
sig!e a co!)rac) %i)h )he Co!s)r(c)io! a! De&e$o"*e!) Cor"ora)io! o# )he /hi$i""i!es :LCDC/L #or
+re&i),< )o rec$ai* cer)ai! #oreshore a! o##shore areas o# .a!i$a ?a,. The co!)rac) a$so i!c$(e )he
co!s)r(c)io! o# /hases 3 a! 33 o# )he .a!i$a-Ca&i)e Coas)a$ Roa. CDC/ o+$iga)e i)se$# )o carr, o()
a$$ )he %or2s i! co!siera)io! o# #i#), "erce!) o# )he )o)a$ rec$ai*e $a!.
6! Fe+r(ar, 9, 1977, )he! /resie!) Feri!a! 4. .arcos iss(e /resie!)ia$ Decree No. 1089
crea)i!g /4A. /D No. 1089 )as2e /4A L)o rec$ai* $a!, i!c$(i!g #oreshore a! s(+*erge areas,L
a! L)o e&e$o", i*"ro&e, ac'(ire, D D D $ease a! se$$ a!, a! a$$ 2i!s o# $a!s.L1 6! )he sa*e
a)e, )he! /resie!) .arcos iss(e /resie!)ia$ Decree No. 108= )ra!s#erri!g )o /4A )he L$a!s
rec$ai*e i! )he #oreshore a! o##shore o# )he .a!i$a ?a,L2 (!er )he .a!i$a-Ca&i)e Coas)a$ Roa
a! Rec$a*a)io! /roCec) :.CCRR/<.
6! Dece*+er 29, 1981, )he! /resie!) .arcos iss(e a *e*ora!(* irec)i!g /4A )o a*e! i)s
co!)rac) %i)h CDC/, so )ha) LTAU$$ #()(re %or2s i! .CCRR/ D D D sha$$ +e #(!e a! o%!e +, /4A.L
Accori!g$,, /4A a! CDC/ eDec()e a .e*ora!(* o# Agree*e!) a)e Dece*+er 29, 1981
3ss(e: %he)her or !o) )he s)i"($a)io!s i! )he A*e!e 7>A #or )he )ra!s#er )o A.AR3 o# $a!s,
rec$ai*e or )o +e rec$ai*e, &io$a)e )he Co!s)i)()io!R
r($i!g: ,es, C$ear$,, )he A*e!e 7>A &io$a)es g$ari!g$, Sec)io!s 2 a! 3, Ar)ic$e I33 o# )he 1987
Co!s)i)()io!. -!er Ar)ic$e 1909112 o# )he Ci&i$ Coe, co!)rac)s %hose Lo+Cec) or "(r"ose is co!)rar,
)o $a%,L or %hose Lo+Cec) is o()sie )he co**erce o# *e!,L are Li!eDis)e!) a! &oi #ro* )he
+egi!!i!g.L The Co(r) *(s) "er#or* i)s (), )o e#e! a! ("ho$ )he Co!s)i)()io!, a! )here#ore
ec$ares )he A*e!e 7>A !($$ a! &oi a+ i!i)io.
Cha&eG &s. /4A G.R. 1332=0 !o&. 11, 2003
Fac)s: Fac)s: 6! No&e*+er 20, 1973, )he go&er!*e!), )hro(gh )he Co**issio!er o# /(+$ic
0igh%a,s, sig!e a co!)rac) %i)h )he Co!s)r(c)io! a! De&e$o"*e!) Cor"ora)io! o# )he /hi$i""i!es
:LCDC/L #or +re&i),< )o rec$ai* cer)ai! #oreshore a! o##shore areas o# .a!i$a ?a,. The co!)rac) a$so
i!c$(e )he co!s)r(c)io! o# /hases 3 a! 33 o# )he .a!i$a-Ca&i)e Coas)a$ Roa. CDC/ o+$iga)e i)se$#
)o carr, o() a$$ )he %or2s i! co!siera)io! o# #i#), "erce!) o# )he )o)a$ rec$ai*e $a!.
6! Fe+r(ar, 9, 1977, )he! /resie!) Feri!a! 4. .arcos iss(e /resie!)ia$ Decree No. 1089
crea)i!g /4A. /D No. 1089 )as2e /4A L)o rec$ai* $a!, i!c$(i!g #oreshore a! s(+*erge areas,L
a! L)o e&e$o", i*"ro&e, ac'(ire, D D D $ease a! se$$ a!, a! a$$ 2i!s o# $a!s.L1 6! )he sa*e
a)e, )he! /resie!) .arcos iss(e /resie!)ia$ Decree No. 108= )ra!s#erri!g )o /4A )he L$a!s
rec$ai*e i! )he #oreshore a! o##shore o# )he .a!i$a ?a,L2 (!er )he .a!i$a-Ca&i)e Coas)a$ Roa
a! Rec$a*a)io! /roCec) :.CCRR/<.
6! Dece*+er 29, 1981, )he! /resie!) .arcos iss(e a *e*ora!(* irec)i!g /4A )o a*e! i)s
co!)rac) %i)h CDC/, so )ha) LTAU$$ #()(re %or2s i! .CCRR/ D D D sha$$ +e #(!e a! o%!e +, /4A.L
Accori!g$,, /4A a! CDC/ eDec()e a .e*ora!(* o# Agree*e!) a)e Dece*+er 29, 1981
3ss(e: %he)her or !o) )he s)i"($a)io!s i! )he A*e!e 7>A #or )he )ra!s#er )o A.AR3 o# $a!s,
rec$ai*e or )o +e rec$ai*e, &io$a)e )he Co!s)i)()io!R
r($i!g: ,es, To a$$o% &as) areas o# rec$ai*e $a!s o# )he "(+$ic o*ai! )o +e )ra!s#erre )o /4A as
"ri&a)e $a!s %i$$ sa!c)io! a gross &io$a)io! o# )he co!s)i)()io!a$ +a! o! "ri&a)e cor"ora)io!s #ro*
ac'(iri!g a!, 2i! o# a$ie!a+$e $a! o# )he "(+$ic o*ai!. /4A %i$$ si*"$, )(r! aro(!, as /4A has
!o% o!e (!er )he A*e!e 7>A, a! )ra!s#er se&era$ h(!res o# hec)ares o# )hese rec$ai*e a!
s)i$$ )o +e rec$ai*e $a!s )o a si!g$e "ri&a)e cor"ora)io! i! o!$, o!e )ra!sac)io!. This sche*e %i$$
e##ec)i&e$, !($$i#, )he co!s)i)()io!a$ +a! i! Sec)io! 3, Ar)ic$e I33 o# )he 1987 Co!s)i)()io! %hich %as
i!)e!e )o i##(se e'(i)a+$, )he o%!ershi" o# a$ie!a+$e $a!s o# )he "(+$ic o*ai! a*o!g Fi$i"i!os,
!o% !(*+eri!g o&er 80 *i$$io! s)ro!g.
SAAD &s. Re"(+$ic
Fac)s: 6! 18 6c)o+er 1987, Socorro 6rc($$o :6rc($$o< #i$e her a""$ica)io! #or Free /a)e!) #or Lo) No.
1939 o# Ca-31=-D, a "arce$ o# $a! %i)h a! area o# 12.8977 hec)ares $oca)e i! ?ara!ga, A+(go!,
Si+o!ga, Ce+(. Therea#)er, o! 19 Fe+r(ar, 1971, )he Secre)ar, o# Agric($)(re a! Na)(ra$ Reso(rces
iss(e Free /a)e!) No. 973908 #or Lo) No. 1939, %hi$e )he Regis)r, o# Dees #or )he /ro&i!ce o#
Ce+( iss(e 6rigi!a$ Cer)i#ica)e o# Ti)$e :6CT< No. 0-8887 o&er )he sai $o).1 S(+se'(e!)$,, )he
s(+Cec) $o) %as so$2 )o SAAD Agro- 3!(s)ries, 3!c. :"e)i)io!er< +, o!e o# 6rc($$oKs heirs.
So*e)i*e i! 199=, )he Re"(+$ic o# )he /hi$i""i!es, )hro(gh )he So$ici)or Ge!era$, #i$e a co*"$ai!)3
#or a!!($*e!) o# )i)$e a! re&ersio! o# )he $o) co&ere +, Free /a)e!) No. 973908 a! 6CT No. 0-
8887 a! re&ersio! o# Lo) No. 1939 o# Ca-31=-D )o )he *ass o# )he "(+$ic o*ai!, o! )he gro(!
)ha) )he iss(a!ce o# )he sai #ree "a)e!) a! )i)$e #or Lo) No. 1939 %as irreg($ar a! erro!eo(s,
#o$$o%i!g )he isco&er, )ha) )he $o) is a$$ege$, "ar) o# )he )i*+er$a! a! #ores) reser&e o# Si+o!ga,
Ce+(. The isco&er, %as *ae a#)er /ero -rge$$o #i$e a $e))er-co*"$ai!) %i)h )he Regio!a$
4Dec()i&e Direc)or o# )he Fores) .a!age*e!) Sec)or, De"ar)*e!) o# 4!&iro!*e!) a! Na)(ra$
Reso(rces :D4NR< Regio! >33, Ce+( Ci),, a+o() )he a$$ege i$$ega$ c())i!g o# *a!gro&e )rees a!
co!s)r(c)io! o# i2es %i)hi! )he area co&ere +, -rge$$oKs Fish"o! Lease Agree*e!).9 6! 19 7($,
199=, -rge$$o #i$e a co*"$ai!)-i!-i!)er&e!)io! agai!s) )he heirs o# 6rc($$o, ao")i!g )he a$$ega)io!s o#
res"o!e!).= 0o%e&er, )he heirs #ai$e )o #i$e )heir a!s%er )o )he co*"$ai!) a! %ere )h(s ec$are i!
e#a($).
3ss(e: 5ha) is Rega$ia! Doc)ri!eR
R($i!g: )he Rega$ia! oc)ri!e or C(ra rega$ia, a$$ $a!s o# )he "(+$ic o*ai! +e$o!g )o )he S)a)e, a!
)he S)a)e is )he so(rce o# a!, asser)e righ) )o o%!ershi" i! $a! a! charge %i)h )he co!ser&a)io!
o# s(ch "a)ri*o!,.19 -!er )his oc)ri!e, $a!s !o) o)her%ise a""eari!g )o +e c$ear$, %i)hi! "ri&a)e
o%!ershi" are "res(*e )o +e$o!g )o )he S)a)e.20 3! i!s)a!ces %here a "arce$ o# $a! co!siere )o
+e i!a$ie!a+$e $a! o# )he "(+$ic o*ai! is #o(! (!er "ri&a)e o%!ershi", )he Go&er!*e!) is a$$o%e
+, $a% )o #i$e a! ac)io! #or re&ersio!,21 %hich is a! ac)io! %here )he ($)i*a)e re$ie# so(gh) is )o re&er)
)he $a! )o )he go&er!*e!) (!er )he Rega$ia! oc)ri!e. Co!sieri!g )ha) )he $a! s(+Cec) o# )he
ac)io! origi!a)e #ro* a gra!) +, )he go&er!*e!), i)s ca!ce$$a)io! is a *a))er +e)%ee! )he gra!)or a!
)he gra!)ee
Re"(+$ic &s. 4s)o!i$o G.R. !o. 1=7308
Fac)s: This case origi!a)e #ro* a! a""$ica)io! #or regis)ra)io! o# a "arce$ o# $a! 2!o%! as Lo) No.
9318 o# )he caas)ra$ s(r&e, o# Caga,a! e 6ro co!sis)i!g To#U a! area o# 3=7,888 s'(are *e)ers,
#i$e +, T)heU origi!a$ TaU""$ica!), NaGaria ?o*+eo %i)h )he e#(!c) Co(r) o# Firs) 3!s)a!ce o# .isa*is
6rie!)a$ o! 7($, 22, 19=9. 3! her a""$ica)io!, ?o*+eo c$ai*e )ha) sai "arce$ o# $a! %as "re&io(s$,
o%!e a! "ossesse +, a cer)ai! Rose!o ?acas si!ce 1899 (!)i$ i) %as so$ )o her +, )he heirs o#
Rose!o ?acas, re"rese!)e +, )heir a))or!e,-i!-#ac) a! heir hi*se$#, Ca$is)ro ?acas +, &ir)(e o# a!
A+so$()e Sa$e o# Rea$), :4Dhi+i) SAF< o! 7(!e 19, 19=9.
A#)er (e !o)ice a! "(+$ica)io! o# sai a""$ica)io!, o!$, )he /ro&i!cia$ Fisca$ o# .isa*is 6rie!)a$, i!
+eha$# o# )he Chie# o# S)a## o# )he Ar*e Forces o# )he /hi$i""i!es TAF/U a! )he Direc)or o# T)heU
?(rea( o# La!TsU #i$e i)s o""osi)io! )here)o, a$$egi!g )ha) Lo) 9318 is !o) a regis)ra+$e $a! "(rs(a!)
)o /resie!)ia$ /roc$a*a)io! No. 28=, %hich )oo2 e##ec) o! .arch 31, 1938, a! %hich ec$are Lo)
9318 reser&e #or )he (se o# )he /hi$i""i!e Ar*,
3ss(e: Does )he /(+$ic La! Ac) re'(ire a C(icia$ orer )o crea)e a *i$i)ar, reser&a)io!R
R($i!g: No, i) oes !o) !ee a!, C(icia$ orer. he "ro&iso re'(iri!g )he reser&a)io! )o +e s(+Cec) )o
"ri&a)e righ)s *ea!s )ha) "erso!s c$ai*i!g righ)s o&er )he reser&e $a! are !o) "rec$(e #ro*
"ro&i!g )heir c$ai*s.
F(r)her*ore, o!$, a "osi)i&e ac) o# )he /resie!) is !eee )o segrega)e a "iece o# $a! #or a "(+$ic
"(r"ose. 3) *(s) +e !o)e )ha) %hi$e Sec)io! =3 gra!)s a()hori), )o )he irec)or o# $a!s -- )hro(gh )he
so$ici)or ge!era$ -- )o #i$e a "e)i)io! agai!s) c$ai*a!)s o# )he reser&e $a!, )he #i$i!g o# )ha) "e)i)io! is
!o) *a!a)or,. The irec)or o# $a!s is re'(ire )o #i$e a "e)i)io! o!$, M%he!e&er i! )he o"i!io! o# )he
/resie!) "(+$ic i!)eres) re'(ires i).
La ?(ga$ ?KLaa! &s. D4NR. G.R. !o. 127882 7a!(ar, 21, 2009
Fac)s: 6! A(g(s) 1=, 199=, )he! D4NR Secre)ar, >ic)or 6. Ra*os iss(e D4NR A*i!is)ra)i&e
6rer :DA6< No. 9=-23, s. 199=, o)her%ise 2!o%! as )he 3*"$e*e!)i!g R($es a! Reg($a)io!s o#
R.A. No. 7992. This %as $a)er re"ea$e +, DA6 No. 98-90, s. 1998 %hich %as ao")e o! Dece*+er
20, 1998.
6! 7a!(ar, 10, 1997, co(!se$s #or "e)i)io!ers se!) a $e))er )o )he D4NR Secre)ar, e*a!i!g )ha) )he
D4NR s)o" )he i*"$e*e!)a)io! o# R.A. No. 7992 a! DA6 No. 98-90,3= gi&i!g )he D4NR #i#)ee! a,s
#ro* recei")38 )o ac) )hereo!. The D4NR, ho%e&er, has ,e) )o res"o! or ac) o! "e)i)io!ersK $e))er.37
/e)i)io!ers )h(s #i$e )he "rese!) "e)i)io! #or "rohi+i)io! a! *a!a*(s, %i)h a "ra,er #or a )e*"orar,
res)rai!i!g orer. The, a$$ege )ha) a) )he )i*e o# )he #i$i!g o# )he "e)i)io!, 100 FTAA a""$ica)io!s ha
a$rea, +ee! #i$e, co&eri!g a! area o# 8.9 *i$$io! hec)ares,38 89 o# %hich a""$ica)io!s are +, #($$,
#oreig!-o%!e cor"ora)io!s co&eri!g a )o)a$ o# =.8 *i$$io! hec)ares, a! a) $eas) o!e +, a #($$, #oreig!-
o%!e *i!i!g co*"a!, o&er o##shore areas.39 /e)i)io!ers c$ai* )ha) )he D4NR Secre)ar, ac)e
%i)ho() or i! eDcess o# C(risic)io!.
3ss(e: Are Foreig!-o%!e cor"ora)io!s i! )he $arge sca$e eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! o#
"e)ro$e(*, *i!era$s a! *i!era$ oi$ $i*i)e )o L)ech!ica$L a! L#i!a!cia$L assis)a!ce o!$,R
R($i!g: Bes, As "rior$, "oi!)e o(), )he "hrase L*a!age*e!) or o)her #or*s o# assis)a!ceL i! )he 1973
Co!s)i)()io! %as e$e)e i! )he 1987 Co!s)i)()io!, %hich a$$o%s o!$, L)ech!ica$ or #i!a!cia$
assis)a!ce.L Cas(s o*is(s "ro o*isso ha+e!(s es). A "erso!, o+Cec) or )hi!g o*i))e #ro* a!
e!(*era)io! *(s) +e he$ )o ha&e +ee! o*i))e i!)e!)io!a$$,.228 As %i$$ +e sho%! $a)er, )he
*a!age*e!) or o"era)io! o# *i!i!g ac)i&i)ies +, #oreig! co!)rac)ors, %hich is )he "ri*ar, #ea)(re o#
ser&ice co!)rac)s, %as "recise$, )he e&i$ )ha) )he ra#)ers o# )he 1987 Co!s)i)()io! so(gh) )o eraica)e.
Res"o!e!)s i!sis) )ha) agree*e!)s i!&o$&i!g L)ech!ica$ or #i!a!cia$ assis)a!ceL is C(s) a!o)her )er*
#or ser&ice co!)rac)s. The, co!)e! )ha) )he "roceei!gs o# )he C6NC6. i!ica)e L)ha) a$)ho(gh )he
)er*i!o$og, Kser&ice co!)rac)K %as a&oie T+, )he Co!s)i)()io!U, )he co!ce") i) re"rese!)e %as !o).L
The, a )ha) LT)Uhe co!ce") is e*+oie i! )he "hrase Kagree*e!)s i!&o$&i!g #i!a!cia$ or )ech!ica$
assis)a!ce.KL229 A! "oi!) o() ho% *e*+ers o# )he C6NC6. re#erre )o )hese agree*e!)s as
Lser&ice co!)rac)s.
La ?(ga$ ?KLaa! &s. D4NR. G.R. !o. 127882 Dece*+er 1, 2009
Fac)s: 6! A(g(s) 1=, 199=, )he! D4NR Secre)ar, >ic)or 6. Ra*os iss(e D4NR A*i!is)ra)i&e
6rer :DA6< No. 9=-23, s. 199=, o)her%ise 2!o%! as )he 3*"$e*e!)i!g R($es a! Reg($a)io!s o#
R.A. No. 7992. This %as $a)er re"ea$e +, DA6 No. 98-90, s. 1998 %hich %as ao")e o! Dece*+er
20, 1998.
6! 7a!(ar, 10, 1997, co(!se$s #or "e)i)io!ers se!) a $e))er )o )he D4NR Secre)ar, e*a!i!g )ha) )he
D4NR s)o" )he i*"$e*e!)a)io! o# R.A. No. 7992 a! DA6 No. 98-90,3= gi&i!g )he D4NR #i#)ee! a,s
#ro* recei")38 )o ac) )hereo!. The D4NR, ho%e&er, has ,e) )o res"o! or ac) o! "e)i)io!ersK $e))er.37
/e)i)io!ers )h(s #i$e )he "rese!) "e)i)io! #or "rohi+i)io! a! *a!a*(s, %i)h a "ra,er #or a )e*"orar,
res)rai!i!g orer. The, a$$ege )ha) a) )he )i*e o# )he #i$i!g o# )he "e)i)io!, 100 FTAA a""$ica)io!s ha
a$rea, +ee! #i$e, co&eri!g a! area o# 8.9 *i$$io! hec)ares,38 89 o# %hich a""$ica)io!s are +, #($$,
#oreig!-o%!e cor"ora)io!s co&eri!g a )o)a$ o# =.8 *i$$io! hec)ares, a! a) $eas) o!e +, a #($$, #oreig!-
o%!e *i!i!g co*"a!, o&er o##shore areas.39 /e)i)io!ers c$ai* )ha) )he D4NR Secre)ar, ac)e
%i)ho() or i! eDcess o# C(risic)io!.
3ss(e: Are Foreig!-o%!e cor"ora)io!s i! )he $arge sca$e eD"$ora)io!, e&e$o"*e!) a! ()i$iGa)io! o#
"e)ro$e(*, *i!era$s a! *i!era$ oi$ $i*i)e )o L)ech!ica$L a! L#i!a!cia$L assis)a!ce o!$,R
R($i!g: No, i) is !o) $i*i)e )o L)ech!ica$L or #i!a!cia$L assis)a!ce o!$,, )he co(r) o !o) see ho%
a""$,i!g a s)ric)$, $i)era$ or &er+a $egis i!)er"re)a)io! o# "aragra"h 9 co($ i!eDora+$, $ea )o )he
co!c$(sio!s arri&e a) i! )he "o!e!cia. Firs), )he ra#)ersK choice o# %ors -- )heir (se o# )he "hrase
agree*e!)s D D D i!&o$&i!g ei)her )ech!ica$ or #i!a!cia$ assis)a!ce -- oes !o) i!ica)e )he i!)e!) )o
eDc$(e o)her *oes o# assis)a!ce. The ra#)ers o")e )o (se i!&o$&i!g %he! )he, co($ ha&e si*"$,
sai agree*e!)s #or #i!a!cia$ or )ech!ica$ assis)a!ce, i# )ha) %as )heir i!)e!)io! )o +egi! %i)h. 3! )his
case, )he $i*i)a)io! %o($ +e &er, c$ear a! !o #(r)her e+a)e %o($ e!s(e.
3! co!)ras), )he (se o# )he %or Li!&o$&i!gL sig!i#ies )he "ossi+i$i), o# )he i!c$(sio! o# o)her #or*s o#
assis)a!ce or ac)i&i)ies ha&i!g )o o %i)h, o)her%ise re$a)e )o or co*"a)i+$e %i)h #i!a!cia$ or )ech!ica$
assis)a!ce. The %or Li!&o$&i!gL as (se i! )his co!)eD) has )hree co!!o)a)io!s )ha) ca! +e
i##ere!)ia)e )h(s: o!e, )he se!se o# Lco!cer!i!g,L Lha&i!g )o o %i)h,L or La##ec)i!gLP )%o, Le!)ai$i!g,L
Lre'(iri!g,L Li*"$,i!gL or L!ecessi)a)i!gLP a! )hree, Li!c$(i!g,L Lco!)ai!i!gL or Lco*"risi!g.L38
/$ai!$,, !o!e o# )he )hree co!!o)a)io!s co!&e, a se!se o# eDc$(si&i),. .oreo&er, )he %or Li!&o$&i!g,L
%he! (!ers)oo i! )he se!se o# Li!c$(i!g,L as i! i!c$(i!g )ech!ica$ or #i!a!cia$ assis)a!ce,
!ecessari$, i*"$ies )ha) )here are ac)i&i)ies o)her )ha! )hose )ha) are +ei!g i!c$(e. 3! o)her %ors, i#
a! agree*e!) i!c$(es )ech!ica$ or #i!a!cia$ assis)a!ce, )here is a"ar) #ro* s(ch assis)a!ce --
so*e)hi!g e$se a$rea, i!, a! co&ere or *a, +e co&ere +,, )he sai agree*e!).
3! shor), i) a$$o%s #or )he "ossi+i$i), )ha) *a))ers, o)her )ha! )hose eD"$ici)$, *e!)io!e, co($ +e *ae
"ar) o# )he agree*e!). Th(s, %e are !o% $e )o )he co!c$(sio! )ha) )he (se o# )he %or Li!&o$&i!gL
i*"$ies )ha) )hese agree*e!)s %i)h #oreig! cor"ora)io!s are !o) $i*i)e )o *ere #i!a!cia$ or )ech!ica$
assis)a!ce. The i##ere!ce i! se!se +eco*es &er, a""are!) %he! %e C(D)a"ose Lagree*e!)s #or
)ech!ica$ or #i!a!cia$ assis)a!ceL agai!s) Lagree*e!)s i!c$(i!g )ech!ica$ or #i!a!cia$ assis)a!ce.L
This *(ch is (!a$)era+$, c$ear i! a &er+a $egis a""roach.