B.

FISCAL AUTONOMY
CSC v. DEPARTMENT
Automatic release of approved annual appropriations to Civil Service Commission,
a constitutional commission which is vested with fiscal autonomy, should thus be
construed to mean that no condition to fund releases to it may be imposed.
FACTS: The total funds appropriated by General Appropriations Act of 2002 (GAA)
for Civil Service Commission (CSC) was P285,660,790.44. CSC complains that the
total funds released by Department of Budget and Management (DBM) was only
P279,853,398.14, thereby leaving an unreleased balance of P5,807,392.30.
CSC contends that the funds were intentionally withheld by DBM on the ground of
their no report, no release policy. Hence, CSC filed a petition for mandamus
seeking to compel the DBM to release the balance of its budget for fiscal year 2002.
At the same time, it seeks a determination by this Court of the extent of the
constitutional concept of fiscal autonomy.
ISSUE: Whether or not DBMs policy, no report, no release is constitutional
HELD: DBMs act of withholding the subject funds from CSC due to revenue shortfall
is hereby declared unconstitutional.
The no report, no release policy may not be validly enforced against offices vested
with fiscal autonomy is not disputed. Indeed, such policy cannot be enforced against
offices possessing fiscal autonomy without violating Article IX (A), Section 5 of the
Constitution, which provides that the Commission shall enjoy fiscal autonomy and
that their approved appropriations shall be automatically and regularly released.
The Court held in the case of, Batangas v. Romulo, automatic release in Section
6, Article X of the Constitution is defined as an automatic manner; without
thought or conscious intention. Being automatic, thus, connotes something
mechanical, spontaneous and perfunctory. As such the LGUs are not required to
perform any act to receive the just share accruing to them from the national
coffers.
By parity of construction, automatic release of approved annual appropriations
to petitioner, a constitutional commission which is vested with fiscal autonomy,
should thus be construed to mean that no condition to fund releases to it may be
imposed. This conclusion is consistent with the Resolution of this Court which
effectively prohibited the enforcement of a no report, no release policy against
the Judiciary which has also been granted fiscal autonomy by the Constitution.
Furthermore, the Constitution grants the enjoyment of fiscal autonomy only to the
Judiciary, the Constitutional Commissions, of which petitioner is one, and the
Ombudsman. To hold that the CSC may be subjected to withholding or reduction of
funds in the event of a revenue shortfall would, to that extent, place CSC and the
other entities vested with fiscal autonomy on equal footing with all others which are
not granted the same autonomy, thereby reducing to naught the distinction
established by the Constitution.
RE: CLARIFYING (2006)
GSIS v. HEIRS OF CABALLERO
FACTS:
Fernando C. Caballero (Fernando) was the registered owner of a residential lot
designated as Lot No. 3355, Ts-268, covered by TCT No. T-16035 of the Register of
Deeds of Cotabato, containing an area of 800 square meters and situated at Rizal
Street, Mlang, Cotabato. On the said lot, respondent built a residential/commercial
building consisting of two (2) stories.
Fernando and his wife, Sylvia Caballero, secured a loan from petitioner Government
Service Insurance System (GSIS) in the amount of P20,000.00, as evidenced by a
promissory note. Fernando and his wife likewise executed a real estate mortgage on
the same date, mortgaging the afore-stated property as security.
Fernando defaulted on the payment of his loan with the GSIS. Hence, the mortgage
covering the subject property was foreclosed, and the same was sold at a public
auction where the petitioner was the only bidder in the amount of P36,283.00. For
failure of Fernando to redeem the said property within the designated period, GSIS
executed an Affidavit of Consolidation of Ownership. Consequently, TCT No. T-
16035 was cancelled and TCT No. T-45874 was issued in the name of petitioner.
GSIS wrote a letter to Fernando, informing him of the consolidation of title in its
favor, and requesting payment of monthly rental in view of Fernando's continued
occupancy of the subject property. In reply, Fernando requested that he be allowed
to repurchase the same through partial payments. Negotiation as to the repurchase
by Fernando of the subject property went on for several years, but no agreement
was reached between the parties.
GSIS scheduled the subject property for public bidding. On the scheduled date of
bidding, Fernando's daughter, Jocelyn Caballero, submitted a bid in the amount of
P350,000.00, while Carmelita Mercantile Trading Corporation (CMTC) submitted a
bid in the amount of P450,000.00. Since CMTC was the highest bidder, it was
awarded the subject property. The Board of Trustees of the GSIS issued Resolution
No. 199 confirming the award of the subject property to CMTC for a total
consideration of P450,000.00. Thereafter, a Deed of Absolute Sale was executed
between petitioner and CMTC on July 27, 1989, transferring the subject property to
CMTC. Consequently, TCT No. T-45874 in the name of GSIS was cancelled, and TCT
No. T-76183 was issued in the name of CMTC.
Due to the foregoing, Fernando, represented by his daughter and attorney-in-fact,
Jocelyn Caballero, filed with the Regional Trial Court (RTC) of Kabacan, Cotabato a
Complaint against CMTC, the GSIS and its responsible officers, and the Register of
Deeds of Kidapawan, Cotabato. Fernando prayed, among others, that judgment be
rendered: declaring GSIS Board of Trustees Resolution No. 199, dated May 16, 1989,
null and void; declaring the Deed of Absolute Sale between petitioner and CMTC
null and void ab initio; declaring TCT No. 76183 of the Register of Deeds of
Kidapawan, Cotabato, likewise, null and void ab initio; declaring the bid made by
Fernando in the amount of P350,000.00 for the repurchase of his property as the
winning bid; and ordering petitioner to execute the corresponding Deed of Sale of
the subject property in favor of Fernando. He also prayed for payment of moral
damages, exemplary damages, attorney's fees and litigation expenses.
In his complaint, Fernando alleged that there were irregularities in the conduct of
the bidding. CMTC misrepresented itself to be wholly owned by Filipino citizens. It
misrepresented its working capital. Its representative Carmelita Ang Hao had no
prior authority from its board of directors in an appropriate board resolution to
participate in the bidding. The corporation is not authorized to acquire real estate or
invest its funds for purposes other than its primary purpose. Fernando further
alleged that the GSIS allowed CMTC to bid despite knowledge that said corporation
has no authority to do so. The GSIS also disregarded Fernando's prior right to buy
back his family home and lot in violation of the laws. The Register of Deeds of
Cotabato acted with abuse of power and authority when it issued the TCT in favor of
CMTC without requiring the CMTC to submit its supporting papers as required by
the law.
GSIS and its officers filed their Answer with Affirmative Defenses and Counterclaim.
The GSIS alleged that Fernando lost his right of redemption. He was given the
chance to repurchase the property; however, he did not avail of such option
compelling the GSIS to dispose of the property by public bidding as mandated by
law. There is also no "prior right to buy back" that can be exercised by Fernando.
Further, it averred that the articles of incorporation and other papers of CMTC were
all in order. In its counterclaim, petitioner alleged that Fernando owed GSIS the sum
of P130,365.81, representing back rentals, including additional interests from
January 1973 to February 1987, and the additional amount of P249,800.00,
excluding applicable interests, representing rentals Fernando unlawfully collected
from Carmelita Ang Hao from January 1973 to February 1988.
After trial, the RTC, in its Decision, 1994, ruled in favor of GSIS and dismissed the
complaint. In the same decision, the trial court granted GSIS's counterclaim and
directed Fernando to pay GSIS the rentals paid by CMTC in the amount of
P249,800.00. The foregoing amount was collected by Fernando from the CMTC and
represents payment which was not turned over to GSIS, which was entitled to
receive the rent from the date of the consolidation of its ownership over the subject
property.
Fernando filed a motion for reconsideration, which was denied by the RTC.
Aggrieved by the Decision, the Caballeros filed a Notice of Appeal. The CA, in its
Decision dated December 17, 2002, affirmed the decision of the RTC with the
modification that the portion of the judgment ordering Fernando to pay rentals in
the amount of P249,800.00, in favor of GSIS, be deleted. GSIS filed a motion for
reconsideration, which the CA denied in a Resolution dated. Hence, the instant
petition.
An Ex Parte Motion for Substitution of Party, was filed by the surviving heirs of
Fernando, who died on February 12, 2002. They prayed that they be allowed to be
substituted for the deceased, as respondents in this case.
ISSUE:
Whether or not the CA committed an error of law in holding that GSISs
counterclaim of rentals collected by the Caballeros against CMTC is in the nature of
a permissive counterclaim which required the payment of GSIS of docket fees
before the Trial Court can acquire jurisdiction over the said counterclaim.
RULING:
GSIS submits that its counterclaim for the rentals collected by Fernando from the
CMTC is in the nature of a compulsory counterclaim in the original action of
Fernando against GSIS for annulment of bid award, deed of absolute sale and TCT
No. 76183. Caballero, on the other hand, alleged that GSIS's counterclaim is
permissive and its failure to pay the prescribed docket fees results into the dismissal
of its claim.
To determine whether a counterclaim is compulsory or not, the Court has devised
the following tests: (a) Are the issues of fact and law raised by the claim and by the
counterclaim largely the same? (b) Would res judicata bar a subsequent suit on
defendant's claims, absent the compulsory counterclaim rule? (c) Will substantially
the same evidence support or refute plaintiff's claim as well as the defendant's
counterclaim? and (d) Is there any logical relation between the claim and the
counterclaim? A positive answer to all four questions would indicate that the
counterclaim is compulsory.
Tested against the above-mentioned criteria, the SC agreed with the CA's view that
GSIS's counterclaim for the recovery of the amount representing rentals collected
by Fernando from the CMTC is permissive.The evidence needed by Fernando to
cause the annulment of the bid award, deed of absolute sale and TCT is different
from that required to establish GSIS's claim for the recovery of rentals.
The issue in the main action, i.e., the nullity or validity of the bid award, deed of
absolute sale and TCT in favor of CMTC, is entirely different from the issue in the
counterclaim, i.e., whether GSIS is entitled to receive the CMTC's rent payments
over the subject property when it (GSIS) became the owner of the subject property
by virtue of the consolidation of ownership of the property in its favor.
The rule in permissive counterclaims is that for the trial court to acquire jurisdiction,
the counterclaimant is bound to pay the prescribed docket fees. This, GSIS did not
do, because it asserted that its claim for the collection of rental payments was a
compulsory counterclaim. Since petitioner failed to pay the docket fees, the RTC did
not acquire jurisdiction over its permissive counterclaim. The judgment rendered by
the RTC, insofar as it ordered Fernando to pay GSIS the rentals which he collected
from CMTC, is considered null and void. Any decision rendered without jurisdiction
is a total nullity and may be struck down at any time, even on appeal before this
Court.

Petitioner further argues that assuming that its counterclaim is permissive, the trial
court has jurisdiction to try and decide the same, considering petitioner's exemption
from all kinds of fees.
In In Re: Petition for Recognition of the Exemption of the Government Service
Insurance System from Payment of Legal Fees, the Court ruled that the provision in
the Charter of the GSIS, i.e., Section 39 of Republic Act No. 8291, which exempts it
from "all taxes, assessments, fees, charges or duties of all kinds," cannot operate to
exempt it from the payment of legal fees. This was because, unlike the 1935 and
1973 Constitutions, which empowered Congress to repeal, alter or supplement the
rules of the Supreme Court concerning pleading, practice and procedure, the 1987
Constitution removed this power from Congress. Hence, the Supreme Court now
has the sole authority to promulgate rules concerning pleading, practice and
procedure in all courts.
In said case, the Court ruled that: The separation of powers among the three co-
equal branches of our government has erected an impregnable wall that keeps the
power to promulgate rules of pleading, practice and procedure within the sole
province of this Court. The other branches trespass upon this prerogative if they
enact laws or issue orders that effectively repeal, alter or modify any of the
procedural rules promulgated by this Court. Viewed from this perspective, the claim
of a legislative grant of exemption from the payment of legal fees under Section 39
of RA 8291 necessarily fails.

Congress could not have carved out an exemption for the GSIS from the payment of
legal fees without transgressing another equally important institutional safeguard of
the Court's independence fiscal autonomy. Fiscal autonomy recognizes the power
and authority of the Court to levy, assess and collect fees, including legal fees.
Moreover, legal fees under Rule 141 have two basic components, the Judiciary
Development Fund (JDF) and the Special Allowance for the Judiciary Fund (SAJF).
The laws which established the JDF and the SAJF expressly declare the identical
purpose of these funds to "guarantee the independence of the Judiciary as
mandated by the Constitution and public policy." Legal fees therefore do not only
constitute a vital source of the Court's financial resources but also comprise an
essential element of the Court's fiscal independence. Any exemption from the
payment of legal fees granted by Congress to government-owned or controlled
corporations and local government units will necessarily reduce the JDF and the
SAJF. Undoubtedly, such situation is constitutionally infirm for it impairs the Court's
guaranteed fiscal autonomy and erodes its independence.
GSIS also invoked our ruling in Sun Insurance Office, Ltd. v. Judge Asuncion, where
the Court held that:
x x x x
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but, subsequently,
the judgment awards a claim not specified in the pleading, or if specified the same
has been left for determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court
or his duly authorized deputy to enforce said lien and assess and collect the
additional fee.
In Ayala Corporation v. Madayag, the Court, in interpreting the third rule laid down
in Sun Insurance Office, Ltd. v. Judge Asuncion regarding awards of claims not
specified in the pleading, held that the same refers only to damages arising after the
filing of the complaint or similar pleading as to which the additional filing fee
therefor shall constitute a lien on the judgment.
The amount of any claim for damages, therefore, arising on or before the filing of
the complaint or any pleading should be specified. While it is true that the
determination of certain damages as exemplary or corrective damages is left to the
sound discretion of the court, it is the duty of the parties claiming such damages to
specify the amount sought on the basis of which the court may make a proper
determination, and for the proper assessment of the appropriate docket fees. The
exception contemplated as to claims not specified or to claims although specified
are left for determination of the court is limited only to any damages that may arise
after the filing of the complaint or similar pleading for then it will not be possible for
the claimant to specify nor speculate as to the amount thereof. (Emphasis supplied.)
Petitioner's claim for payment of rentals collected by Fernando from the CMTC did
not arise after the filing of the complaint; hence, the rule laid down in Sun Insurance
finds no application in the present case.
Due to the non-payment of docket fees on petitioner's counterclaim, the trial court
never acquired jurisdiction over it and, thus, there is no need to discuss the second
issue raised by petitioner.
C. COMPOSITION (Sec. 4)
1. APPOINTMENT
DE CASTRO v. JUDICIAL & BAR COUNCIL
FACTS:
The compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010 occurs
just days after the coming presidential elections on May 10, 2010.
These cases trace their genesis to the controversy that has arisen from the
forthcoming compulsory retirement of Chief Justice Puno on May 17, 2010, or seven
days after the presidential election. Under Section 4(1), in relation to Section 9,
Article VIII, that vacancy shall be filled within ninety days from the occurrence
thereof from a list of at least three nominees prepared by the Judicial and Bar
Council for every vacancy. Also considering that Section 15, Article VII (Executive
Department) of the Constitution prohibits the President or Acting President from
making appointments within two months immediately before the next presidential
elections and up to the end of his term, except temporary appointments to
executive positions when continued vacancies therein will prejudice public service
or endanger public safety.
The JBC, in its en banc meeting of January 18, 2010, unanimously agreed to start the
process of filling up the position of Chief Justice.
Conformably with its existing practice, the JBC automatically considered for the
position of Chief Justice the five most senior of the Associate Justices of the Court,
namely: Associate Justice Antonio T. Carpio; Associate Justice Renato C. Corona;
Associate Justice Conchita Carpio Morales; Associate Justice Presbitero J. Velasco,
Jr.; and Associate Justice Antonio Eduardo B. Nachura. However, the last two
declined their nomination through letters dated January 18, 2010 and January 25,
2010, respectively.
The OSG contends that the incumbent President may appoint the next Chief Justice,
because the prohibition under Section 15, Article VII of the Constitution does not
apply to appointments in the Supreme Court. It argues that any vacancy in the
Supreme Court must be filled within 90 days from its occurrence, pursuant to
Section 4(1), Article VIII of the Constitution; that had the framers intended the
prohibition to apply to Supreme Court appointments, they could have easily
expressly stated so in the Constitution, which explains why the prohibition found in
Article VII (Executive Department) was not written in Article VIII (Judicial
Department); and that the framers also incorporated in Article VIII ample
restrictions or limitations on the Presidents power to appoint members of the
Supreme Court to ensure its independence from political vicissitudes and its
insulation from political pressures, such as stringent qualifications for the
positions, the establishment of the JBC, the specified period within which the
President shall appoint a Supreme Court Justice.
A part of the question to be reviewed by the Court is whether the JBC properly
initiated the process, there being an insistence from some of the oppositors-
intervenors that the JBC could only do so once the vacancy has occurred (that is,
after May 17, 2010). Another part is, of course, whether the JBC may resume its
process until the short list is prepared, in view of the provision of Section 4(1),
Article VIII, which unqualifiedly requires the President to appoint one from the short
list to fill the vacancy in the Supreme Court (be it the Chief Justice or an Associate
Justice) within 90 days from the occurrence of the vacancy.
ISSUE: Whether the incumbent President can appoint the successor of Chief Justice
Puno upon his retirement.
HELD:
Prohibition under Section 15, Article VII does not apply to appointments to fill a
vacancy in the Supreme Court or to other appointments to the Judiciary.
Two constitutional provisions are seemingly in conflict.
The first, Section 15, Article VII (Executive Department), provides: Section 15. Two
months immediately before the next presidential elections and up to the end of his
term, a President or Acting President shall not make appointments, except
temporary appointments to executive positions when continued vacancies therein
will prejudice public service or endanger public safety.
The other, Section 4 (1), Article VIII (Judicial Department), states: Section 4. (1). The
Supreme Court shall be composed of a Chief Justice and fourteen Associate Justices.
It may sit en banc or in its discretion, in division of three, five, or seven Members.
Any vacancy shall be filled within ninety days from the occurrence thereof.
Had the framers intended to extend the prohibition contained in Section 15, Article
VII to the appointment of Members of the Supreme Court, they could have explicitly
done so. They could not have ignored the meticulous ordering of the provisions.
They would have easily and surely written the prohibition made explicit in Section
15, Article VII as being equally applicable to the appointment of Members of the
Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. That such
specification was not done only reveals that the prohibition against the President or
Acting President making appointments within two months before the next
presidential elections and up to the end of the Presidents or Acting Presidents
term does not refer to the Members of the Supreme Court.

Had the framers intended to extend the prohibition contained in Section 15, Article
VII to the appointment of Members of the Supreme Court, they could have explicitly
done so. They could not have ignored the meticulous ordering of the provisions.
They would have easily and surely written the prohibition made explicit in Section
15, Article VII as being equally applicable to the appointment of Members of the
Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. That such
specification was not done only reveals that the prohibition against the President or
Acting President making appointments within two months before the next
presidential elections and up to the end of the Presidents or Acting Presidents
term does not refer to the Members of the Supreme Court
Section 14, Section 15, and Section 16 are obviously of the same character, in that
they affect the power of the President to appoint. The fact that Section 14 and
Section 16 refer only to appointments within the Executive Department renders
conclusive that Section 15 also applies only to the Executive Department. This
conclusion is consistent with the rule that every part of the statute must be
interpreted with reference to the context, i.e. that every part must be considered
together with the other parts, and kept subservient to the general intent of the
whole enactment. It is absurd to assume that the framers deliberately situated
Section 15 between Section 14 and Section 16, if they intended Section 15 to cover
all kinds of presidential appointments. If that was their intention in respect of
appointments to the Judiciary, the framers, if only to be clear, would have easily and
surely inserted a similar prohibition in Article VIII, most likely within Section 4 (1)
thereof.
RE: SENIORITY AMONG THE FOUR MOST RECENT APPOINTMENTS, AM No. 10-4-
22,SC, Sept. 28,2010
2. EN BANC/DIVISION CASES
PUBLIC INTEREST v. ELMA

FORTICH v. CORONA
The Office of the President modified its decision which had already become final
and executory.
FACTS:
On November 7, 1997, the Office of the President (OP) issued a win-win
Resolution which reopened case O.P. Case No. 96-C-6424. The said Resolution
substantially modified its March 29, 1996 Decision. The OP had long declared the
said Decision final & executory after the DARs Motion for Reconsideration was
denied for having been filed beyond the 15-day reglementary period.
The SC then struck down as void the OPs act, it being in gross disregard of the rules
& basic legal precept that accord finality to administrative determinations.
The respondents contended in their instant motion that the win-win Resolution
of November 7, 1997 is not void since it seeks to correct an erroneous ruling,
hence, the March 29, 1996 decisioncould not as yet become final and executory
as to be beyond modification. They further explained that the DARs failure to file
their Motion for Reconsideration on time was excusable.
ISSUE:
Was the OPs modification of the Decision void or a valid exercise of its powers and
prerogatives?
1. Whether the DARs late filing of the Motion for Reconsideration is excusable.
2. Whether the respondents have shown a justifiable reason for the relaxation of
rules.
3. Whether the issue is a question of technicality.


HELD:
1.
No.
Sec.7 of Administrative Order No. 18, dated February 12, 1987, mandates that
decisions/resolutions/orders of the Office of the President shallbecome final after
the lapse of 15 days from receipt of a copy therof xxx unless a Motion for
Reconsideration thereof is filed within such period.
The respondents explanation that the DARs office procedure made it
impossibleto file its Motion for Reconsideration on time since the said decision
had to be referred to its different departments cannot be considered a valid
justification. While there is nothing wrong with such referral, the DAR must not
disregard the reglementary period fixed by law, rule or regulation.
The rules relating to reglementary period should not be made subservient to the
internal office procedure of an administrative body.
2.
No. The final & executory character of the OP Decision can no longer be disturbed
or substantially modified. Res judicata has set in and the adjudicated affair should
forever be put to rest.
Procedural rules should be treated with utmost respect and due regard since they
are designed to facilitate the adjudication of cases to remedy the worsening
problem of delay in the resolution of rival claims and in the administration of justice.
The Constitution guarantees that all persons shall have a right to the speedy
disposition of their cases before all judicial, quasi-judicial and administrative
bodies.
While a litigation is not a game of technicalities, every case must be prosecuted in
accordance with the prescribed procedure to ensure an orderly & speedy
administration of justice. The flexibility in the relaxation of rules was never
intended to forge a bastion for erring litigants to violate the rules with impunity.
A liberal interpretation & application of the rules of procedure can only be resorted
to in proper cases and under justifiable causes and circumstances.
3.
No. It is a question of substance & merit.
A decision/resolution/order of an administrative body, court or tribunal which is
declared void on the ground that the same was rendered Without or in Excess of
Jurisdiction, or with Grave Abuse of Discretion, is a mere technicality of law or
procedure. Jurisdiction is an essential and mandatory requirement before a case or
controversy can be acted on. Moreover, an act is still invalid if done in excess of
jurisdiction or with grave abuse of discretion.
In the instant case, several fatal violations of law were committed. These grave
breaches of law, rules & settled jurisprudence are clearly substantial, not of
technical nature.

When the March 29, 1996 OP Decision was declared final and executory, vested
rights were acquired by the petitioners, and all others who should be benefited by
the said Decision.
In the words of the learned Justice Artemio V. Panganiban in Videogram Regulatory
Board vs CA, et al., just as a losing party has the right to file an appeal within the
prescribed period, the winning party also has the correlative right to enjoy the
finality of the resolution of his/her case.
FIRESTONE v. CA
LEAGUE OF CITIES v. COMELEC
During the 11th Congress, 57 bills seeking the conversion of municipalities into
component cities were filed before the House of Representatives. However,
Congress acted only on 33 bills. It did not act on bills converting 24 other
municipalities into cities. During the 12th Congress, R.A. No. 9009 became effective
revising Section 450 of the Local Government Code. It increased the income
requirement to qualify for conversion into a city from P20 million annual income to
P100 million locally-generated income. In the 13th Congress, 16 of the 24
municipalities filed, through their respective sponsors, individual cityhood bills. Each
of the cityhood bills contained a common provision exempting the particular
municipality from the 100 million income requirement imposed by R.A. No. 9009.
Are the cityhood laws converting 16 municipalities into cities constitutional?
SUGGESTED ANSWER:
November 18, 2008 Ruling
No. The SC (voting 6-5) ruled that the exemptions in the City Laws is
unconstitutional because sec. 10, Art. X of the Constitution requires that such
exemption must be written into the LGC and not into any other laws. The Cityhood
Laws violate sec. 6, Art. X of the Constitution because they prevent a fair and just
distribution of the national taxes to local government units. The criteria, as
prescribed in sec. 450 of the LGC, must be strictly followed because such criteria
prescribed by law, are material in determining the just share of local government
units (LGUs) in national taxes. (League of Cities of the Philippines v. Comelec GR
No. 176951, November 18, 2008)
March 31, 2009 Ruling
No. The SC denied the first Motion for Reconsideration. 7-5 vote.
April 28, 2009 Ruling
No. The SC En Banc, by a split vote (6-6), denied a second motion for
reconsideration.

December 21, 2009 Ruling
Yes. The SC (voting 6-4) reversed its November 18, 2008 decision and declared as
constitutional the Cityhood Laws or Republic Acts (RAs) converting 16 municipalities
into cities. It said that based on Congress deliberations and clear legislative intent
was that the then pending cityhood bills would be outside the pale of the minimum
income requirement of PhP100 million that Senate Bill No. 2159 proposes; and RA
9009 would not have any retroactive effect insofar as the cityhood bills are
concerned. The conversion of a municipality into a city will only affect its status as a
political unit, but not its property as such, it added. The Court held that the
favorable treatment accorded the sixteen municipalities by the cityhood laws rests
on substantial distinction.
The Court stressed that respondent LGUs were qualified cityhood applicants before
the enactment of RA 9009. To impose on them the much higher income
requirement after what they have gone through would appear to be indeed unfair.
Thus, the imperatives of fairness dictate that they should be given a legal remedy
by which they should be allowed to prove that they have all the necessary
qualifications for city status using the criteria set forth under the LGC of 1991 prior
to its amendment by RA 9009. (GR No. 176951, League of Cities of the Philippines v.
COMELEC; GR No. 177499, League of Cities of the Philippines v. COMELEC; GR No.
178056, League of Cities of the Philippines v. COMELEC, December 21, 2009) NOTE:
The November 18, 2008 ruling already became final and executory and was
recorded in the SCs Book of Entries of Judgments on May 21, 2009.)
August 24, 2010 Ruling
No. The SC (voting 7-6) granted the motions for reconsideration of the League of
Cities of the Philippines (LCP), et al. and reinstated its November 18, 2008 decision
declaring unconstitutional the Cityhood Laws or Republic Acts (RAs) converting 16
municipalities into cities. Undeniably, the 6-6 vote did not overrule the prior
majority en banc Decision of 18 November 2008, as well as the prior majority en
banc Resolution of 31 March 2009 denying reconsideration. The tie-vote on the
second motion for reconsideration is not the same as a tie-vote on the main
decision where there is no prior decision, the Court said. In the latest resolution,
the Court reiterated its November 18, 2008 ruling that the Cityhood Laws violate
sec. 10, Art. X of the Constitution which expressly provides that no cityshall be
createdexcept in accordance with the criteria established in the local government
code. It stressed that while all the criteria for the creation of cities must be
embodied exclusively in the Local Government Code, the assailed Cityhood Laws
provided an exemption from the increased income requirement for the creation of
cities under sec. 450 of the LGC. The unconstitutionality of the Cityhood Laws lies
in the fact that Congress provided an exemption contrary to the express language of
the Constitution.Congress exceeded and abused its law-making power, rendering
the challenged Cityhood Laws void for being violative of the Constitution, the Court
held.
The Court further held that limiting the exemption only to the 16 municipalities
violates the requirement that the classification must apply to all similarly situated.
Municipalities with the same income as the 16 respondent municipalities cannot
convert into cities, while the 16 respondent municipalities can. Clearly, as worded
the exemption provision found in the Cityhood Laws, even if it were written in
Section 450 of the Local Government Code, would still be unconstitutional for
violation of the equal protection clause. (GR No. 176951, League of Cities of the
Philippines v. Comelec; GR No. 177499, League of Cities of the Philippines v.
Comelec; GR No. 178056, League of Cities of the Philippines v. Comelec, August 24,
2010)
February 15, 2011 Ruling
Yes, the laws are constitutional. The February 15, 2011 resolution is the fourth
ruling since the High Court first resolved the Cityhood case in 2008.


April 12, 2011Ruling
Yes! Its final. The 16 Cityhood Laws are constitutional. We should not ever lose
sight of the fact that the 16 cities covered by the Cityhood Laws not only had
conversion bills pending during the 11th Congress, but have also complied with the
requirements of the [Local Government Code] LGC prescribed prior to its
amendment by RA No. 9009. Congress undeniably gave these cities all the
considerations that justice and fair play demanded. Hence, this Court should do no
less by stamping its imprimatur to the clear and unmistakable legislative intent and
by duly recognizing the certain collective wisdom of Congress, the SC said.
The Court stressed that Congress clearly intended that the local government units
covered by the Cityhood Laws be exempted from the coverage of RA 9009, which
imposes a higher income requirement of PhP100 million for the creation of cities.
The Court reiterated that while RA 9009 was being deliberated upon, the Congress
was well aware of the pendency of conversion bills of several municipalities,
including those covered by the Cityhood Laws. It pointed out that RA 9009 took
effect on June 30, 2001, when the 12th Congress was incipient. By reason of the
clear legislative intent to exempt the municipalities covered by the conversion bills
pending during the 11th Congress, the House of Representatives adopted Joint
Resolution No. 29 entitled Joint Resolution to Exempt Certain Municipalities
Embodied in Bills Filed in Congress before June 30, 2001 from the coverage of
Republic Act No. 9009. However, the Senate failed to act on the said Joint
Resolution. Even so, the House readopted Joint Resolution No. 29 as Joint
Resolution No. 1 during the 12th Congress, and forwarded the same for approval to
the Senate, which again failed to prove it. Eventually, the conversion bills of
respondents were individually filed in the Lower House and fellesters.blogspot.com
were all unanimously and favorably voted upon. When forwarded to the Senate, the
bills were also unanimously approved. The acts of both Chambers of Congress show
that the exemption clauses ultimately incorporated in the Cityhood Laws are but the
express articulations of the clear legislative intent to exempt the respondents,
without exception, from the coverage of RA No. 9009. Thereby, RA 9009, and, by
necessity, the LCG, were amended, not by repeal but by way of the express
exemptions being embodied in the exemption clauses.
The Court held that the imposition of the income requirement of P100 million from
local sources under RA 9009 was arbitrary. While the Constitution mandates that
the creation of local government units must comply with the criteria laid down in
the LGC, it cannot be justified to insist that the Constitution must have to yield to
every amendment to the LGC despite such amendment imminently producing
effects contrary to the original thrusts of the LGC to promote autonomy,
decentralization, countryside development, and the concomitant national growth.
(GR No. 176951, League of City of the Philippines v. COMELEC; GR No. 177499,
League of City of the Philippines v. COMELEC: GR No. 178056, League of City of the
Philippines v. COMELEC, April 12, 2011)
LU v. LU YM Sr.
D. JUDICIAL POWER
1. JURISDICTION
PLANTERS v. FERTIPHIL
FACTS: Petitioner PPI and respondent Fertiphil are private corporations
incorporated under Philippinelaws, both engaged in the importation and
distribution of fertilizers, pesticides and agriculturalchemicals.Marcos issued Letter
of Instruction (LOI) 1465, imposing a capital recovery component of Php10.00
perbag of fertilizer. The levy was to continue until adequate capital was raised to
make PPI financiallyviable. Fertiphil remitted to the Fertilizer and Pesticide Authority
(FPA), which was then remitted thedepository bank of PPI. Fertiphil paid P6,689,144
to FPA from 1985 to 1986.After the 1986 Edsa Revolution, FPA voluntarily stopped
the imposition of the P10 levy. Fertiphildemanded from PPI a refund of the amount
it remitted, however PPI refused. Fertiphil filed a complaintfor collection and
damages, questioning the constitutionality of LOI 1465, claiming that it was
unjust,unreasonable, oppressive, invalid and an unlawful imposition that amounted
to a denial of due process.PPI argues that Fertiphil has no locus standi to question
the constitutionality of LOI No. 1465 because itdoes not have a "personal and
substantial interest in the case or will sustain direct injury as a result of its
enforcement." It asserts that Fertiphil did not suffer any damage from the
imposition because"incidence of the levy fell on the ultimate consumer or the
farmers themselves, not on the sellerfertilizer company.
ISSUE: Whether or not Fertiphil has locus standi to question the constitutionality of
LOI No. 1465. What is the power of taxation?
RULING: Fertiphil has locus standi because it suffered direct injury; doctrine of
standing is a mereprocedural technicality which may be waived.The imposition of
the levy was an exercise of the taxation power of the state. While it is true that
thepower to tax can be used as an implement of police power, the primary purpose
of the levy was revenuegeneration. If the purpose is primarily revenue, or if revenue
is, at least, one of the real and substantialpurposes, then the exaction is properly
called a tax.Police power and the power of taxation are inherent powers of the
State. These powers are distinct andhave different tests for validity. Police power is
the power of the State to enact legislation that mayinterfere with personal liberty or
property in order to promote the general welfare, while the power of taxation is the
power to levy taxes to be used for public purpose. The main purpose of police
power isthe regulation of a behavior or conduct, while taxation is revenue
generation. The "lawful subjects" and"lawful means" tests are used to determine
the validity of a law enacted under the police power. Thepower of taxation, on the
other hand, is circumscribed by inherent and constitutional limitations.
BRITISH AMERICAN v. CAMACHO
GEROCHI v. DEPARTMENT OF ENERGY
Facts: RA 9136, otherwise known as the Electric Power Industry Reform Act of 2001
(EPIRA), which sought to impose a universal charge on all end-users of electricity for
the purpose of funding NAPOCORs projects, was enacted and took effect in 2001.
Petitioners contest the constitutionality of the EPIRA, stating that the imposition of
the universal charge on all end-users is oppressive and confiscatory and amounts to
taxation without representation for not giving the consumers a chance to be heard
and be represented.
Issue: Whether or not the universal charge is a tax.
Held: NO. The assailed universal charge is not a tax, but an exaction in the exercise
of the States police power. That public welfare is promoted may be gleaned from
Sec. 2 of the EPIRA, which enumerates the policies of the State regarding
electrification. Moreover, the Special Trust Fund feature of the universal charge
reasonably serves and assures the attainment and perpetuity of the purposes for
which the universal charge is imposed (e.g. to ensure the viability of the countrys
electric power industry), further boosting the position that the same is an exaction
primarily in pursuit of the States police objectives
If generation of revenue is the primary purpose and regulation is merely incidental,
the imposition is a tax; but if regulation is the primary purpose, the fact that
revenue is incidentally raised does not make the imposition a tax.
The taxing power may be used as an implement of police power. The theory behind
the exercise of the power to tax emanates from necessity; without taxes,
government cannot fulfill its mandate of promoting the general welfare and well-
being of the people.
KIDA v. SENATE
THE FACTS
Several laws pertaining to the Autonomous Region in Muslim Mindanao (ARMM)
were enacted by Congress. Republic Act (RA) No. 6734 is the organic act that
established the ARMM and scheduled the first regular elections for the ARMM
regional officials. RA No. 9054 amended the ARMM Charter and reset the regular
elections for the ARMM regional officials to the second Monday of September 2001.
RA No. 9140 further reset the first regular elections to November 26, 2001. RA No.
9333 reset for the third time the ARMM regional elections to the 2nd Monday of
August 2005 and on the same date every 3 years thereafter.
Pursuant to RA No. 9333, the next ARMM regional elections should have been held
on August 8, 2011. COMELEC had begun preparations for these elections and had
accepted certificates of candidacies for the various regional offices to be elected.
But on June 30, 2011, RA No. 10153 was enacted, resetting the next ARMM regular
elections to May 2013 to coincide with the regular national and local elections of
the country.
In these consolidated petitions filed directly with the Supreme Court, the petitioners
assailed the constitutionality of RA No. 10153.
II. THE ISSUES:
1. Does the 1987 Constitution mandate the synchronization of elections [including
the ARMM elections]?
2. Does the passage of RA No. 10153 violate the three-readings-on-separate-days
rule under Section 26(2), Article VI of the 1987 Constitution?
3. Is the grant [to the President] of the power to appoint OICs constitutional?
III. THE RULING
[The Supreme Court] DISMISSED the petitions and UPHELD the constitutionality of
RA No. 10153 in toto.]
1. YES, the 1987 Constitution mandates the synchronization of elections.
While the Constitution does not expressly state that Congress has to synchronize
national and local elections, the clear intent towards this objective can be gleaned
from the Transitory Provisions (Article XVIII) of the Constitution, which show the
extent to which the Constitutional Commission, by deliberately making adjustments
to the terms of the incumbent officials, sought to attain synchronization of
elections. The Constitutional Commission exchanges, read with the provisions of the
Transitory Provisions of the Constitution, all serve as patent indicators of the
constitutional mandate to hold synchronized national and local elections, starting
the second Monday of May 1992 and for all the following elections.
In this case, the ARMM elections, although called regional elections, should be
included among the elections to be synchronized as it is a local election based on
the wording and structure of the Constitution.
Thus, it is clear from the foregoing that the 1987 Constitution mandates the
synchronization of elections, including the ARMM elections.
2. NO, the passage of RA No. 10153 DOES NOT violate the three-readings-on-
separate-days requirement in Section 26(2), Article VI of the 1987 Constitution.
The general rule that before bills passed by either the House or the Senate can
become laws they must pass through three readings on separate days, is subject to
the EXCEPTION when the President certifies to the necessity of the bills immediate
enactment. The Court, in Tolentino v. Secretary of Finance, explained the effect of
the Presidents certification of necessity in the following manner:
The presidential certification dispensed with the requirement not only of printing
but also that of reading the bill on separate days. The phrase "except when the
President certifies to the necessity of its immediate enactment, etc." in Art. VI,
Section 26[2] qualifies the two stated conditions before a bill can become a law: [i]
the bill has passed three readings on separate days and [ii] it has been printed in its
final form and distributed three days before it is finally approved.
In the present case, the records show that the President wrote to the Speaker of the
House of Representatives to certify the necessity of the immediate enactment of a
law synchronizing the ARMM elections with the national and local elections.
Following our Tolentino ruling, the Presidents certification exempted both the
House and the Senate from having to comply with the three separate readings
requirement.
3. YES, the grant [to the President] of the power to appoint OICs in the ARMM is
constitutional

[During the oral arguments, the Court identified the three options open to Congress
in order to resolve the problem on who should sit as ARMM officials in the interim
[in order to achieve synchronization in the 2013 elections]: (1) allow the
[incumbent] elective officials in the ARMM to remain in office in a hold over
capacity until those elected in the synchronized elections assume office; (2) hold
special elections in the ARMM, with the terms of those elected to expire when
those elected in the [2013] synchronized elections assume office; or (3) authorize
the President to appoint OICs, [their respective terms to last also until those elected
in the 2013 synchronized elections assume office.]
3.1. 1st option: Holdover is unconstitutional since it would extend the terms of
office of the incumbent ARMM officials
We rule out the [hold over] option since it violates Section 8, Article X of the
Constitution. This provision states:
Section 8. The term of office of elective local officials, except barangay officials,
which shall be determined by law, shall be three years and no such official shall
serve for more than three consecutive terms. [emphases ours]
Since elective ARMM officials are local officials, they are covered and bound by the
three-year term limit prescribed by the Constitution; they cannot extend their term
through a holdover. xxx.
If it will be claimed that the holdover period is effectively another term mandated
by Congress, the net result is for Congress to create a new term and to appoint the
occupant for the new term. This view like the extension of the elective term is
constitutionally infirm because Congress cannot do indirectly what it cannot do
directly, i.e., to act in a way that would effectively extend the term of the
incumbents. Indeed, if acts that cannot be legally done directly can be done
indirectly, then all laws would be illusory. Congress cannot also create a new term
and effectively appoint the occupant of the position for the new term. This is
effectively an act of appointment by Congress and an unconstitutional intrusion into
the constitutional appointment power of the President. Hence, holdover
whichever way it is viewed is a constitutionally infirm option that Congress could
not have undertaken.
Even assuming that holdover is constitutionally permissible, and there had been
statutory basis for it (namely Section 7, Article VII of RA No. 9054) in the past, we
have to remember that the rule of holdover can only apply as an available option
where no express or implied legislative intent to the contrary exists; it cannot apply
where such contrary intent is evident.
Congress, in passing RA No. 10153, made it explicitly clear that it had the intention
of suppressing the holdover rule that prevailed under RA No. 9054 by completely
removing this provision. The deletion is a policy decision that is wholly within the
discretion of Congress to make in the exercise of its plenary legislative powers; this
Court cannot pass upon questions of wisdom, justice or expediency of legislation,
except where an attendant unconstitutionality or grave abuse of discretion results.
3.2. 2nd option: Calling special elections is unconstitutional since COMELEC, on its
own, has no authority to order special elections.
The power to fix the date of elections is essentially legislative in nature. [N]o
elections may be held on any other date for the positions of President, Vice
President, Members of Congress and local officials, except when so provided by
another Act of Congress, or upon orders of a body or officer to whom Congress may
have delegated either the power or the authority to ascertain or fill in the details in
the execution of that power.
Notably, Congress has acted on the ARMM elections by postponing the scheduled
August 2011 elections and setting another date May 13, 2011 for regional
elections synchronized with the presidential, congressional and other local
elections. By so doing, Congress itself has made a policy decision in the exercise of
its legislative wisdom that it shall not call special elections as an adjustment
measure in synchronizing the ARMM elections with the other elections.


After Congress has so acted, neither the Executive nor the Judiciary can act to the
contrary by ordering special elections instead at the call of the COMELEC. This
Court, particularly, cannot make this call without thereby supplanting the legislative
decision and effectively legislating. To be sure, the Court is not without the power
to declare an act of Congress null and void for being unconstitutional or for having
been exercised in grave abuse of discretion. But our power rests on very narrow
ground and is merely to annul a contravening act of Congress; it is not to supplant
the decision of Congress nor to mandate what Congress itself should have done in
the exercise of its legislative powers.
Thus, in the same way that the term of elective ARMM officials cannot be extended
through a holdover, the term cannot be shortened by putting an expiration date
earlier than the three (3) years that the Constitution itself commands. This is what
will happen a term of less than two years if a call for special elections shall
prevail. In sum, while synchronization is achieved, the result is at the cost of a
violation of an express provision of the Constitution.
3.3. 3rd option: Grant to the President of the power to appoint ARMM OICs in the
interim is valid.
The above considerations leave only Congress chosen interim measure RA No.
10153 and the appointment by the President of OICs to govern the ARMM during
the pre-synchronization period pursuant to Sections 3, 4 and 5 of this law as the
only measure that Congress can make. This choice itself, however, should be
examined for any attendant constitutional infirmity.
At the outset, the power to appoint is essentially executive in nature, and the
limitations on or qualifications to the exercise of this power should be strictly
construed; these limitations or qualifications must be clearly stated in order to be
recognized. The appointing power is embodied in Section 16, Article VII of the
Constitution, which states:


Section 16. The President shall nominate and, with the consent of the Commission
on Appointments, appoint the heads of the executive departments, ambassadors,
other public ministers and consuls or officers of the armed forces from the rank of
colonel or naval captain, and other officers whose appointments are vested in him
in this Constitution. He shall also appoint all other officers of the Government
whose appointments are not otherwise provided for by law, and those whom he
may be authorized by law to appoint. The Congress may, by law, vest the
appointment of other officers lower in rank in the President alone, in the courts, or
in the heads of departments, agencies, commissions, or boards. [emphasis ours]
This provision classifies into four groups the officers that the President can appoint.
These are:
First, the heads of the executive departments; ambassadors; other public ministers
and consuls; officers of the Armed Forces of the Philippines, from the rank of
colonel or naval captain; and other officers whose appointments are vested in the
President in this Constitution;
Second, all other officers of the government whose appointments are not otherwise
provided for by law;
Third, those whom the President may be authorized by law to appoint; and
Fourth, officers lower in rank whose appointments the Congress may by law vest in
the President alone.
Since the Presidents authority to appoint OICs emanates from RA No. 10153, it falls
under the third group of officials that the President can appoint pursuant to Section
16, Article VII of the Constitution. Thus, the assailed law facially rests on clear
constitutional basis.


If at all, the gravest challenge posed by the petitions to the authority to appoint
OICs under Section 3 of RA No. 10153 is the assertion that the Constitution requires
that the ARMM executive and legislative officials to be elective and representative
of the constituent political units. This requirement indeed is an express limitation
whose non-observance in the assailed law leaves the appointment of OICs
constitutionally defective.
After fully examining the issue, we hold that this alleged constitutional problem is
more apparent than real and becomes very real only if RA No. 10153 were to be
mistakenly read as a law that changes the elective and representative character of
ARMM positions. RA No. 10153, however, does not in any way amend what the
organic law of the ARMM (RA No. 9054) sets outs in terms of structure of
governance. What RA No. 10153 in fact only does is to appoint officers-in-charge
for the Office of the Regional Governor, Regional Vice Governor and Members of
the Regional Legislative Assembly who shall perform the functions pertaining to the
said offices until the officials duly elected in the May 2013 elections shall have
qualified and assumed office. This power is far different from appointing elective
ARMM officials for the abbreviated term ending on the assumption to office of the
officials elected in the May 2013 elections.
[T]he legal reality is that RA No. 10153 did not amend RA No. 9054. RA No. 10153,
in fact, provides only for synchronization of elections and for the interim measures
that must in the meanwhile prevail. And this is how RA No. 10153 should be read
in the manner it was written and based on its unambiguous facial terms. Aside from
its order for synchronization, it is purely and simply an interim measure responding
to the adjustments that the synchronization requires.
2. POWER OF JUDICIAL REVIEW
REQUISITES OF A JUDICIAL INQUIRY

a. Actual Case/Controversy
DUMLAO v. COMELEC
Dumlao was the former governor of Nueva Vizcaya. He has retired from his
office and he has been receiving retirement benefits therefrom. He filed for
reelection to the same office for the 1980 local elections. On the other hand, BP
52 was passed (par 1 thereof) providing disqualification for the likes of Dumlao.
Dumlao assailed the BP averring that it is class legislation hence
unconstitutional. His petition was joined by Atty. Igot and Salapantan Jr. These
two however have different issues. The suits of Igot and Salapantan are more of
a taxpayers suit assailing the other provisions of BP 52 regarding the term of
office of the elected officials, the length of the campaign and the provision
barring persons charged for crimes may not run for public office and that the
filing of complaints against them and after preliminary investigation would
already disqualify them from office. In general, Dumlao invoked equal
protection in the eye of the law.
ISSUE: Whether or not the there is cause of action.
HELD: The SC pointed out the procedural lapses of this case for this case would
never have been merged. Dumlaos cause is different from Igots. They have
separate issues. Further, this case does not meet all the requisites so that itd be
eligible for judicial review. There are standards that have to be followed in the
exercise of the function of judicial review, namely: (1) the existence of an
appropriate case; (2) an interest personal and substantial by the party raising
the constitutional question; (3) the plea that the function be exercised at the
earliest opportunity; and (4) the necessity that the constitutional question be
passed upon in order to decide the case. In this case, only the 3rd requisite was
met. The SC ruled however that the provision barring persons charged for
crimes may not run for public office and that the filing of complaints against
them and after preliminary investigation would already disqualify them from
office as null and void.
The assertion that Sec 4 of BP 52 is contrary to the safeguard of equal
protection is neither well taken. The constitutional guarantee of equal
protection of the laws is subject to rational classification. If the groupings are
based on reasonable and real differentiations, one class can be treated and
regulated differently from another class. For purposes of public service,
employees 65 years of age, have been validly classified differently from younger
employees. Employees attaining that age are subject to compulsory retirement,
while those of younger ages are not so compulsorily retirable.
In respect of election to provincial, city, or municipal positions, to require that
candidates should not be more than 65 years of age at the time they assume
office, if applicable to everyone, might or might not be a reasonable
classification although, as the Solicitor General has intimated, a good policy of
the law should be to promote the emergence of younger blood in our political
elective echelons. On the other hand, it might be that persons more than 65
years old may also be good elective local officials.
Retirement from government service may or may not be a reasonable
disqualification for elective local officials. For one thing, there can also be
retirees from government service at ages, say below 65. It may neither be
reasonable to disqualify retirees, aged 65, for a 65-year old retiree could be a
good local official just like one, aged 65, who is not a retiree.
But, in the case of a 65-year old elective local official (Dumalo), who has retired
from a provincial, city or municipal office, there is reason to disqualify him from
running for the same office from which he had retired, as provided for in the
challenged provision.
GUINGONA v. CA
TAN v. PEOPLE
Facts:
On October 26, 1989, about 6:30 p.m., in the town proper of Cajidiocan,
Sibuyan Island, Romblon, Forest Guards Joseph Panadero and Eduardo Rabino
intercepted a dump truck loaded with narra and white lauan lumber. The truck
was driven by Petitioner Fred Moreno, an employee of A & E Construction.
Again, about 8:00 p.m. on October 30, 1989, this time in Barangay Cambajao,
Forest Guards Panadero and Rabino apprehended another dump truck with
Plate No. DEK-646 loaded with tanguile lumber. Said truck was driven by Crispin
Cabudol, also an employee of A & E Construction. Both motor vehicles, as well
as the construction firm, were owned by Petitioner Alejandro Tan. In both
instances, no documents showing legal possession of the lumber were, upon
demand, presented to the forest guards; thus, the pieces of lumber were
confiscated.
Tan and Moreno, together with Ismael Ramilo, caretaker and timekeeper of A &
E Construction, were charged by First Assistant Provincial Prosecutor Felix R.
Rocero with violation of Section 68,[6] PD No. 705, as amended by EO No. 277.
The accused were all convicted for failure to comply with the Forestry Reform
Code which requires: (1) an auxiliary invoice, (2) a certificate of origin, (3) a sales
invoice, (4) scale/tally sheets and (5) a lumber dealer permit. The CA found no
cogent reason for the reversal or modification of the decision.
Issue:
(1) Whether or not Section 68 of EO 277 is unconstitutional.
(2) Whether or not "lumber" is to be construed as "timber" and/or forest
product within the contemplation of PD 705.
Held:
(1) Section 68 deals with penalizing the "cutting, gathering and/or collecting
timber or other forest products without license.". One of the essential requisites
for a successful judicial inquiry into the constitutionality of a law is the existence
of an actual case or controversy involving a conflict of legal rights susceptible of
judicial determination. As Respondent Court of Appeals correctly pointed out,
petitioners were not charged with the *unlawful+ possession of firewood, bark,
honey, beeswax, and even grass, shrub, the associated water or fish; thus,
the inclusion of any of these enumerated items in EO 277 is absolutely of no
concern to petitioners. They are not asserting a legal right for which they are
entitled to a judicial determination at this time. Besides, they did not present
any convincing evidence of a clear and unequivocal breach of the Constitution
that would justify the nullification of said provision. A statute is always
presumed to be constitutional, and one who attacks it on the ground of
unconstitutionality must convincingly prove its invalidity.
(2) In Mustang Lumber Inc v. CA, Supreme Court held that lumber is included in
the term timber. Lumber is a processed log or processed forest raw material.
Clearly, the Code uses the term lumber in its ordinary or common usage. In the
1993 copyright edition of Websters Third New International Dictionary, lumber
is defined, inter alia, as timber or logs after being prepared for the market.
Simply put, lumber is a processed log or timber. To exclude possession of
"lumber" from the acts penalized in Section 68 would emasculate the law itself.
PORMENTERO v. ESTRADA
Pormento vs. Estrada was yet another disqualification case filed against Erap. It was
first filed with the Comelec, and it went all the way to the Supreme Court. The
petition was dismissed by the Comelec, which sustained Estradas argument that he
is not covered by Section 4, Article VII since he is not an incumbent president
intending to run for re-election, and that he did not even serve a minimum of four
years.
After his Motion for Reconsideration was denied by the Comelec en banc, Atty.
Pormento brought the matter to the Supreme Court. He argued that that the spirit
of the constitutional ban on presidents seeking re-election is absolute, and that
Erap cannot to be voted upon by virtue of his self-imposed condition under his
pardon that states that he has publicly committed to no longer seek any elective
position or office.
...only to be denied due course for mootness
The Supreme Court was overtaken by the May 2010 elections without having
resolved the petition. In the presidential race, Erap placed second to now-
incumbent President Benigno Simeon Noynoy Aquino.
The Court only promulgated its decision (styled resolution by the ponente, Chief
Justice Renato Corona) on August 31, 2010. In this unanimous decision, the Court,
instead of deciding on the merits of the controversy, opted instead to DENY DUE
COURSE to the petition and to DISMISS it for being moot and academic. The Court
held:
Private respondent was not elected President the second time he ran. Since the
issue on the proper interpretation of the phrase any reelection *sic+ will be
premised on a persons second (whether immediate or not) election as President,
there is no case or controversy to be resolved in this case. No live conflict of legal
rights exists. There is in this case no definite, concrete, real or substantial
controversy that touches on the legal relations of parties having adverse legal
interests. No specific relief may conclusively be decreed upon by this Court in this
case that will benefit any of the parties herein. As such, one of the essential
requisites for the exercise of the power of judicial review, the existence of an actual
case or controversy, is sorely lacking in this case.
As a rule, this Court may only adjudicate actual, ongoing controversies. The Court is
not empowered to decide moot questions or abstract propositions, or to declare
principles or rules of law which cannot affect the result as to the thing in issue in the
case before it. In other words, when a case is moot, it becomes non-justiciable.
An action is considered moot when it no longer presents a justiciable controversy
because the issues involved have become academic or dead or when the matter in
dispute has already been resolved and hence, one is not entitled to judicial
intervention unless the issue is likely to be raised again between the parties. There
is nothing for the court to resolve as the determination thereof has been overtaken
by subsequent events.
Assuming an actual case or controversy existed prior to the proclamation of a
President who has been duly elected in the May 10, 2010 elections, the same is no
longer true today. Following the results of that elections, private respondent was
not elected President for the second time. Thus, any discussion of his reelection
[sic] will simply be hypothetical and speculative. It will serve no useful or practical
purpose.
Rare opportunity to interpret Section 4, Article VII wasted
The Court chose to heed prudence and took the route of judicial restraint. This
tack is understandable, given the personalities involved (a virtually unknown
petitioner against a popular ex-President), and the passing of the urgency to rule on
the matter. The ruling is legally defensible in all fronts.
But the Court could have very well chosen to decide the case despite the mootness
of the issue. After all, it is capable of repetition yet evading review. This is an
exception to the moot-and-academic rule. Although the May 2010 elections are
over and Erap did not win, he may in fact again run in the May 2016 presidential
elections.
A more liberal approach to the actual-case-or-controversy requirement of judicial
review or in other words, choosing judicial activism over judicial restraint would
have definitively settled once and for all the meaning of Section 4, Article VII. By
being conservative, by avoiding what it calls the "temptation that magistrates,
lawyers, legal scholars and law students alike would find hard to resist," the Court
wasted the golden opportunity to enrich Philippine jurisprudence.
I would not have been surprised if it were Retired Justice Vicente V. Mendoza who
wrote the decision for the Court. After all, he is one of the most consistent judicial
conservatives ever to grace the Supreme Court. The rest of these incumbent
magistrates have no clearly-defined judicial philosophy on the matter of judicial
review and judicial power. They tend to vacillate between activism and
conservativism depending on the personalities and considerations involved.
Sayang. An activist approach would have been reinforced by a discussion on what is
referred in Salonga vs. Pao as the symbolic function of the High Tribunal to
"educat[e] [the] bench and [the] bar." But since the gods have already delivered the
verdict, we, ordinary mortals, would have to abide by it. We would have to wait for
yet another Erap moment in the indeterminate future to definitively get educated
on this matter.
DE CASTRO v. JBC
FACTS: The compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010
occurs just days after the coming presidential elections on May 10, 2010.
These cases trace their genesis to the controversy that has arisen from the
forthcoming compulsory retirement of Chief Justice Puno on May 17, 2010, or seven
days after the presidential election. Under Section 4(1), in relation to Section 9,
Article VIII, that vacancy shall be filled within ninety days from the occurrence
thereof from a list of at least three nominees prepared by the Judicial and Bar
Council for every vacancy. Also considering that Section 15, Article VII (Executive
Department) of the Constitution prohibits the President or Acting President from
making appointments within two months immediately before the next presidential
elections and up to the end of his term, except temporary appointments to
executive positions when continued vacancies therein will prejudice public service
or endanger public safety.
The JBC, in its en banc meeting of January 18, 2010, unanimously agreed to start the
process of filling up the position of Chief Justice.
Conformably with its existing practice, the JBC automatically considered for the
position of Chief Justice the five most senior of the Associate Justices of the Court,
namely: Associate Justice Antonio T. Carpio; Associate Justice Renato C. Corona;
Associate Justice Conchita Carpio Morales; Associate Justice Presbitero J. Velasco,
Jr.; and Associate Justice Antonio Eduardo B. Nachura. However, the last two
declined their nomination through letters dated January 18, 2010 and January 25,
2010, respectively.
The OSG contends that the incumbent President may appoint the next Chief Justice,
because the prohibition under Section 15, Article VII of the Constitution does not
apply to appointments in the Supreme Court. It argues that any vacancy in the
Supreme Court must be filled within 90 days from its occurrence, pursuant to
Section 4(1), Article VIII of the Constitution; that had the framers intended the
prohibition to apply to Supreme Court appointments, they could have easily
expressly stated so in the Constitution, which explains why the prohibition found in
Article VII (Executive Department) was not written in Article VIII (Judicial
Department); and that the framers also incorporated in Article VIII ample
restrictions or limitations on the Presidents power to appoint members of the
Supreme Court to ensure its independence from political vicissitudes and its
insulation from political pressures, such as stringent qualifications for the
positions, the establishment of the JBC, the specified period within which the
President shall appoint a Supreme Court Justice.
A part of the question to be reviewed by the Court is whether the JBC properly
initiated the process, there being an insistence from some of the oppositors-
intervenors that the JBC could only do so once the vacancy has occurred (that is,
after May 17, 2010). Another part is, of course, whether the JBC may resume its
process until the short list is prepared, in view of the provision of Section 4(1),
Article VIII, which unqualifiedly requires the President to appoint one from the short
list to fill the vacancy in the Supreme Court (be it the Chief Justice or an Associate
Justice) within 90 days from the occurrence of the vacancy.
ISSUE: Whether the incumbent President can appoint the successor of Chief Justice
Puno upon his retirement.
HELD:
Prohibition under Section 15, Article VII does not apply to appointments to fill a
vacancy in the Supreme Court or to other appointments to the Judiciary.
Two constitutional provisions are seemingly in conflict.
The first, Section 15, Article VII (Executive Department), provides: Section 15. Two
months immediately before the next presidential elections and up to the end of his
term, a President or Acting President shall not make appointments, except
temporary appointments to executive positions when continued vacancies therein
will prejudice public service or endanger public safety.
The other, Section 4 (1), Article VIII (Judicial Department), states: Section 4. (1). The
Supreme Court shall be composed of a Chief Justice and fourteen Associate Justices.
It may sit en banc or in its discretion, in division of three, five, or seven Members.
Any vacancy shall be filled within ninety days from the occurrence thereof.
Had the framers intended to extend the prohibition contained in Section 15, Article
VII to the appointment of Members of the Supreme Court, they could have explicitly
done so. They could not have ignored the meticulous ordering of the provisions.
They would have easily and surely written the prohibition made explicit in Section
15, Article VII as being equally applicable to the appointment of Members of the
Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. That such
specification was not done only reveals that the prohibition against the President or
Acting President making appointments within two months before the next
presidential elections and up to the end of the Presidents or Acting Presidents
term does not refer to the Members of the Supreme Court.
Had the framers intended to extend the prohibition contained in Section 15, Article
VII to the appointment of Members of the Supreme Court, they could have explicitly
done so. They could not have ignored the meticulous ordering of the provisions.
They would have easily and surely written the prohibition made explicit in Section
15, Article VII as being equally applicable to the appointment of Members of the
Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. That such
specification was not done only reveals that the prohibition against the President or
Acting President making appointments within two months before the next
presidential elections and up to the end of the Presidents or Acting Presidents
term does not refer to the Members of the Supreme Court.
Section 14, Section 15, and Section 16 are obviously of the same character, in that
they affect the power of the President to appoint. The fact that Section 14 and
Section 16 refer only to appointments within the Executive Department renders
conclusive that Section 15 also applies only to the Executive Department. This
conclusion is consistent with the rule that every part of the statute must be
interpreted with reference to the context, i.e. that every part must be considered
together with the other parts, and kept subservient to the general intent of the
whole enactment. It is absurd to assume that the framers deliberately situated
Section 15 between Section 14 and Section 16, if they intended Section 15 to cover
all kinds of presidential appointments. If that was their intention in respect of
appointments to the Judiciary, the framers, if only to be clear, would have easily and
surely inserted a similar prohibition in Article VIII, most likely within Section 4 (1)
thereof.
b. PROPER PARTY
AGAN JR. v. PIATCO
FACTS:
On October 5, 1994, AEDC submitted an unsolicited proposal to the Government
through the DOTC/MIAA for the development of NAIA International Passenger
Terminal III (NAIA IPT III).
DOTC constituted the Prequalification Bids and Awards Committee (PBAC) for the
implementation of the project and submitted with its endorsement proposal to the
NEDA, which approved the project.
On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in two daily
newspapers of an invitation for competitive or comparative proposals on AEDCs
unsolicited proposal, in accordance with Sec. 4-A of RA 6957, as amended.
On September 20, 1996, the consortium composed of Peoples Air Cargo and
Warehousing Co., Inc. (Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and
Security Bank Corp. (Security Bank) (collectively, Paircargo Consortium) submitted
their competitive proposal to the PBAC. PBAC awarded the project to Paircargo
Consortium. Because of that, it was incorporated into Philippine International
Airport Terminals Co., Inc.
AEDC subsequently protested the alleged undue preference given to PIATCO and
reiterated its objections as regards the prequalification of PIATCO.
On July 12, 1997, the Government and PIATCO signed the Concession Agreement
for the Build-Operate-and-Transfer Arrangement of the NAIA Passenger Terminal III
(1997 Concession Agreement). The Government granted PIATCO the franchise to
operate and maintain the said terminal during the concession period and to collect
the fees, rentals and other charges in accordance with the rates or schedules
stipulated in the 1997 Concession Agreement. The Agreement provided that the
concession period shall be for twenty-five (25) years commencing from the in-
service date, and may be renewed at the option of the Government for a period not
exceeding twenty-five (25) years. At the end of the concession period, PIATCO shall
transfer the development facility to MIAA.
Meanwhile, the MIAA which is charged with the maintenance and operation of the
NAIA Terminals I and II, had existing concession contracts with various service
providers to offer international airline airport services, such as in-flight catering,
passenger handling, ramp and ground support, aircraft maintenance and provisions,
cargo handling and warehousing, and other services, to several international airlines
at the NAIA.
On September 17, 2002, the workers of the international airline service providers,
claiming that they would lose their job upon the implementation of the questioned
agreements, filed a petition for prohibition. Several employees of MIAA likewise
filed a petition assailing the legality of the various agreements.
During the pendency of the cases, PGMA, on her speech, stated that she will not
honor (PIATCO) contracts which the Executive Branchs legal offices have
concluded (as) null and void.
ISSUE:
Whether or not the State can temporarily take over a business affected with public
interest.


RULING:
Yes. PIATCO cannot, by mere contractual stipulation, contravene the Constitutional
provision on temporary government takeover and obligate the government to pay
reasonable cost for the use of the Terminal and/or Terminal Complex.
Article XII, Section 17 of the 1987 Constitution provides:
Section 17. In times of national emergency, when the public interest so requires, the
State may, during the emergency and under reasonable terms prescribed by it,
temporarily take over or direct the operation of any privately owned public utility or
business affected with public interest.
The above provision pertains to the right of the State in times of national
emergency, and in the exercise of its police power, to temporarily take over the
operation of any business affected with public interest. The duration of the
emergency itself is the determining factor as to how long the temporary takeover by
the government would last. The temporary takeover by the government extends
only to the operation of the business and not to the ownership thereof. As such the
government is not required to compensate the private entity-owner of the said
business as there is no transfer of ownership, whether permanent or temporary.
The private entity-owner affected by the temporary takeover cannot, likewise, claim
just compensation for the use of the said business and its properties as the
temporary takeover by the government is in exercise of its police power and not of
its power of eminent domain.
Article XII, section 17 of the 1987 Constitution envisions a situation wherein the
exigencies of the times necessitate the government to temporarily take over or
direct the operation of any privately owned public utility or business affected with
public interest. It is the welfare and interest of the public which is the paramount
consideration in determining whether or not to temporarily take over a particular
business. Clearly, the State in effecting the temporary takeover is exercising its
police power. Police power is the most essential, insistent, and illimitable of
powers. Its exercise therefore must not be unreasonably hampered nor its exercise
be a source of obligation by the government in the absence of damage due to
arbitrariness of its exercise. Thus, requiring the government to pay reasonable
compensation for the reasonable use of the property pursuant to the operation of
the business contravenes the Constitution.