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1)

EN BANC

[G.R. No. 122156. February 3, 1997]

MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION,
COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL, respondents.
DECISION
BELLOSILLO, J.:

The Filipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference to qualified Filipinos,[1] is invoked by petitioner in its bid to acquire 51% of
the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain that the provision
is not self-executing but requires an implementing legislation for its enforcement. Corollarily, they ask whether the 51% shares form part of
the national economy and patrimony covered by the protective mantle of the Constitution.
The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the
Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued
and outstanding shares of respondent MHC. The winning bidder, or the eventual strategic partner, is to provide management expertise
and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila
Hotel.[2] In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a
Filipino corporation, which offered to buy 51% of the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm,
with ITT-Sheraton as its hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of
petitioner.
Pertinent provisions of the bidding rules prepared by respondent GSIS state I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC 1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the Highest
Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified Bidders:
a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International Marketing/Reservation
System Contract or other type of contract specified by the Highest Bidder in its strategic plan for the Manila Hotel x x x x
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS x x x x
K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/ OGCC (Office of the Government Corporate Counsel) are
obtained.[3]
Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the execution of the necessary contracts,
petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong Berhad.[4]
In a subsequent letter dated 10 October 1995 petitioner sent a managers check issued by Philtrust Bank for Thirty-three Million Pesos
(P33,000,000.00) as Bid Security to match the bid of the Malaysian Group, Messrs. Renong Berhad x x x x[5] which respondent GSIS refused
to accept.
On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale of

51% of the MHC may be hastened by respondent GSIS and consummated with Renong Berhad, petitioner came to this Court on prohibition
and mandamus. On 18 October 1995 the Court issued a temporary restraining order enjoining respondents from perfecting and
consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The case
was then set for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been
identified with the Filipino nation and has practically become a historical monument which reflects the vibrancy of Philippine heritage and
culture. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and sacredness of independence and its power
and capacity to release the full potential of the Filipino people. To all intents and purposes, it has become a part of the national patrimony.[6]
Petitioner also argues that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel which is owned by
respondent GSIS, a government-owned and controlled corporation, the hotel business of respondent GSIS being a part of the tourism
industry is unquestionably a part of the national economy. Thus, any transaction involving 51% of the shares of stock of the MHC is clearly
covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987 Constitution, applies.[7]
It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part of
the national economy petitioner should be preferred after it has matched the bid offer of the Malaysian firm. For the bidding rules mandate
that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have
validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share.[8]
Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of
principle and policy since it is not a self-executing provision and requires implementing legislation(s) x x x x Thus, for the said provision to
operate, there must be existing laws to lay down conditions under which business may be done.[9]
Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimony which only refers
to lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna and all marine wealth in its territorial sea, and exclusive marine zone as cited in the first and second
paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the guests who have slept in the hotel
and the events that have transpired therein which make the hotel historic, these alone do not make the hotel fall under the patrimony of the
nation. What is more, the mandate of the Constitution is addressed to the State, not to respondent GSIS which possesses a personality of its
own separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still inapplicable
since what is being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor the land upon which the building
stands. Certainly, 51% of the equity of the MHC cannot be considered part of the national patrimony. Moreover, if the disposition of the
shares of the MHC is really contrary to the Constitution, petitioner should have questioned it right from the beginning and not after it had
lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided
that these Qualified Bidders are willing to match the highest bid in terms of price per share, is misplaced. Respondents postulate that the
privilege of submitting a matching bid has not yet arisen since it only takes place if for any reason, the Highest Bidder cannot be awarded the
Block of Shares. Thus the submission by petitioner of a matching bid is premature since Renong Berhad could still very well be awarded the
block of shares and the condition giving rise to the exercise of the privilege to submit a matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its
discretion in a capricious, whimsical manner, and if ever it did abuse its discretion it was not so patent and gross as to amount to an evasion
of a positive duty or a virtual refusal to perform a duty enjoined by law. Similarly, the petition for mandamus should fail as petitioner has no
clear legal right to what it demands and respondents do not have an imperative duty to perform the act required of them by petitioner.
We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation. It is supreme,
imperious, absolute and unalterable except by the authority from which it emanates. It has been defined as the fundamental and paramount
law of the nation.[10] It prescribes the permanent framework of a system of government, assigns to the different departments their respective
powers and duties, and establishes certain fixed principles on which government is founded. The fundamental conception in other words is
that it is a supreme law to which all other laws must conform and in accordance with which all private rights must be determined and all
public authority administered.[11] Under the doctrine of constitutional supremacy, if a law or contract violates any norm of the constitution
that law or contract whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes
is null and void and without any force and effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the
nation, it is deemed written in every statute and contract.

Admittedly, some constitutions are merely declarations of policies and principles. Their provisions command the legislature to enact
laws and carry out the purposes of the framers who merely establish an outline of government providing for the different departments of the
governmental machinery and securing certain fundamental and inalienable rights of citizens.[12] A provision which lays down a general
principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing. But a provision which is complete in itself and
becomes operative without the aid of supplementary or enabling legislation, or that which supplies sufficient rule by means of which the right
it grants may be enjoyed or protected, is self-executing. Thus a constitutional provision is self-executing if the nature and extent of the right
conferred and the liability imposed are fixed by the constitution itself, so that they can be determined by an examination and construction of
its terms, and there is no language indicating that the subject is referred to the legislature for action.[13]
As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often
become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory enactments, and
the function of constitutional conventions has evolved into one more like that of a legislative body. Hence, unless it is expressly provided that
a legislative act is necessary to enforce a constitutional mandate, the presumption now is that all provisions of the constitution are selfexecuting. If the constitutional provisions are treated as requiring legislation instead of self-executing, the legislature would have the power
to ignore and practically nullify the mandate of the fundamental law.[14] This can be cataclysmic. That is why the prevailing view is, as it
has always been, that x x x x in case of doubt, the Constitution should be considered self-executing rather than non-self-executing x x x x Unless the contrary is
clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule would give the legislature
discretion to determine when, or whether, they shall be effective. These provisions would be subordinated to the will of the lawmaking body,
which could make them entirely meaningless by simply refusing to pass the needed implementing statute.[15]
Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they quote from
discussions on the floor of the 1986 Constitutional Commission MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the wording of
PREFERENCE is given to QUALIFIED FILIPINOS, can it be understood as a preference to qualified Filipinos visa-vis Filipinos who are not qualified. So, why do we not make it clear? To qualified Filipinos as against aliens?
THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word QUALIFIED?
MR. RODRIGO. No, no, but say definitely TO QUALIFIED FILIPINOS as against whom? As against aliens or over aliens ?
MR. NOLLEDO. Madam President, I think that is understood. We use the word QUALIFIED because the existing laws or
prospective laws will always lay down conditions under which business may be done. For example, qualifications on
capital, qualifications on the setting up of other financial structures, et cetera (underscoring supplied by respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.[16]
Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-executing but
simply for purposes of style. But, certainly, the legislature is not precluded from enacting further laws to enforce the constitutional provision
so long as the contemplated statute squares with the Constitution. Minor details may be left to the legislature without impairing the selfexecuting nature of constitutional provisions.
In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its enforcement, provide a convenient
remedy for the protection of the rights secured or the determination thereof, or place reasonable safeguards around the exercise of the right.
The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-executing constitutional provision
does not render such a provision ineffective in the absence of such legislation. The omission from a constitution of any express provision for a
remedy for enforcing a right or liability is not necessarily an indication that it was not intended to be self-executing. The rule is that a selfexecuting provision of the constitution does not necessarily exhaust legislative power on the subject, but any legislation must be in harmony
with the constitution, further the exercise of constitutional right and make it more available.[17] Subsequent legislation however does not
necessarily mean that the subject constitutional provision is not, by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the tenor of the first and
third paragraphs of the same section which undoubtedly are not self-executing.[18] The argument is flawed. If the first and third paragraphs
are not self-executing because Congress is still to enact measures to encourage the formation and operation of enterprises fully owned by
Filipinos, as in the first paragraph, and the State still needs legislation to regulate and exercise authority over foreign investments within its

national jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the second paragraph can only be self-executing as it does
not by its language require any legislation in order to give preference to qualified Filipinos in the grant of rights, privileges and concessions
covering the national economy and patrimony. A constitutional provision may be self-executing in one part and non-self-executing in another.
[19]
Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies,
which are basically not self-executing and only placed in the Constitution as moral incentives to legislation, not as judicially enforceable
rights - are simply not in point. Basco v. Philippine Amusements and Gaming Corporation[20] speaks of constitutional provisions on personal
dignity,[21] the sanctity of family life,[22] the vital role of the youth in nation-building,[23] the promotion of social justice,[24] and the values
of education.[25] Tolentino v. Secretary of Finance[26] refers to constitutional provisions on social justice and human rights[27] and on
education.[28] Lastly, Kilosbayan, Inc. v. Morato[29] cites provisions on the promotion of general welfare,[30] the sanctity of family life,[31]
the vital role of the youth in nation-building[32] and the promotion of total human liberation and development.[33] A reading of these
provisions indeed clearly shows that they are not judicially enforceable constitutional rights but merely guidelines for legislation. The very
terms of the provisions manifest that they are only principles upon which legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in
itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision does not
require any legislation to put it in operation. It is per se judicially enforceable. When our Constitution mandates that [i]n the grant of rights,
privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos, it means just that qualified Filipinos shall be preferred. And when our Constitution declares that a right exists in certain specified circumstances an action
may be maintained to enforce such right notwithstanding the absence of any legislation on the subject; consequently, if there is no statute
especially enacted to enforce such constitutional right, such right enforces itself by its own inherent potency and puissance, and from which
all legislations must take their bearings. Where there is a right there is a remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986 Constitutional Commission[34] explains The patrimony of the Nation that should be conserved and developed refers not only to our rich natural resources but also
to the cultural heritage of our race. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop
not only our lands, forests, mines and other natural resources but also the mental ability or faculty of our people.
We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage.[35] When the Constitution speaks of national
patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term natural
resources, but also to the cultural heritage of the Filipinos.
Manila Hotel has become a landmark - a living testimonial of Philippine heritage. While it was restrictively an American hotel when
it first opened in 1912, it immediately evolved to be truly Filipino. Formerly a concourse for the elite, it has since then become the venue of
various significant events which have shaped Philippine history. It was called the Cultural Center of the 1930s. It was the site of the
festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest House of the Philippine Government it
plays host to dignitaries and official visitors who are accorded the traditional Philippine hospitality.[36]
The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City.[37] During World War II
the hotel was converted by the Japanese Military Administration into a military headquarters. When the American forces returned to
recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places for their final stand. Thereafter, in
the 1950s and 1960s, the hotel became the center of political activities, playing host to almost every political convention. In 1970 the hotel
reopened after a renovation and reaped numerous international recognitions, an acknowledgment of the Filipino talent and ingenuity.

In

1986 the hotel was the site of a failed coup d etat where an aspirant for vice-president was proclaimed President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the
Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty, independence and
nationhood. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51% of the equity of the MHC comes
within the purview of the constitutional shelter for it comprises the majority and controlling stock, so that anyone who acquires or owns the
51% will have actual control and management of the hotel. In this instance, 51% of the MHC cannot be disassociated from the hotel and the
land on which the hotel edifice stands. Consequently, we cannot sustain respondents claim that the Filipino First Policy provision is not
applicable since what is being sold is only 51% of the outstanding shares of the corporation, not the Hotel building nor the land upon which the
building stands.[38]
The argument is pure sophistry. The term qualified Filipinos as used in our Constitution also includes corporations at least 60% of
which is owned by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission -

THE PRESIDENT. Commissioner Davide is recognized.


MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would consist in
substituting the words QUALIFIED FILIPINOS with the following: CITIZENS OF THE PHILIPPINES OR
CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY
SUCH CITIZENS.
xxxx
MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a
corporation that is 80-percent Filipino, do we not give it preference?
MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by
Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent Filipino.
MR. DAVIDE. I want to get that meaning clear because QUALIFIED FILIPINOS may refer only to individuals and not to
juridical personalities or entities.
MR. MONSOD. We agree, Madam President.[39]
xxxx
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO.

The amendment will read:

IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS

COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO
QUALIFIED FILIPINOS. And the word Filipinos here, as intended by the proponents, will include not only
individual Filipinos but also Filipino-controlled entities or entities fully-controlled by Filipinos.[40]
The phrase preference to qualified Filipinos was explained thus MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can ask
a question.
MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS.
MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified,
will the Filipino enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred?
MR. NOLLEDO. The answer is yes.
MR. FOZ. Thank you.[41]
Expounding further on the Filipino First Policy provision Commissioner Nolledo continues
MR. NOLLEDO. Yes, Madam President. Instead of MUST, it will be SHALL - THE STATE SHALL GIVE PREFERENCE
TO QUALIFIED FILIPINOS. This embodies the so-called Filipino First policy. That means that Filipinos should
be given preference in the grant of concessions, privileges and rights covering the national patrimony.[42]
The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified by
Commissioner Nolledo[43] Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias in all economic concerns. It is better known as the FILIPINO FIRST
Policy x x x x This provision was never found in previous Constitutions x x x x

The term qualified Filipinos simply means that preference shall be given to those citizens who can make a viable contribution to the
common good, because of credible competence and efficiency. It certainly does NOT mandate the pampering and preferential treatment to
Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate preference would be counterproductive and
inimical to the common good.
In the granting of economic rights, privileges, and concessions, when a choice has to be made between a qualified foreigner and a qualified
Filipino, the latter shall be chosen over the former.
Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as one of the qualified
bidders. It was pre-qualified by respondent GSIS in accordance with its own guidelines so that the sole inference here is that petitioner has
been found to be possessed of proven management expertise in the hotel industry, or it has significant equity ownership in another hotel
company, or it has an overall management and marketing proficiency to successfully operate the Manila Hotel.[44]
The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and
requires implementing legislation is quite disturbing. The attempt to violate a clear constitutional provision - by the government itself - is
only too distressing. To adopt such a line of reasoning is to renounce the duty to ensure faithfulness to the Constitution. For, even some of
the provisions of the Constitution which evidently need implementing legislation have juridical life of their own and can be the source of a
judicial remedy. We cannot simply afford the government a defense that arises out of the failure to enact further enabling, implementing or
guiding legislation. In fine, the discourse of Fr. Joaquin G. Bernas, S.J., on constitutional government is apt The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress acts - provided that
there are discoverable legal standards for executive action. When the executive acts, it must be guided by its own understanding of the
constitutional command and of applicable laws. The responsibility for reading and understanding the Constitution and the laws is not the
sole prerogative of Congress. If it were, the executive would have to ask Congress, or perhaps the Court, for an interpretation every time the
executive is confronted by a constitutional command. That is not how constitutional government operates.[45]
Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which by itself
possesses a separate and distinct personality. This argument again is at best specious. It is undisputed that the sale of 51% of the MHC
could only be carried out with the prior approval of the State acting through respondent Committee on Privatization. As correctly pointed
out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the sale of the assets of respondents GSIS and MHC a state action. In
constitutional jurisprudence, the acts of persons distinct from the government are considered state action covered by the Constitution (1)
when the activity it engages in is a public function; (2) when the government is so significantly involved with the private actor as to make
the government responsible for his action; and, (3) when the government has approved or authorized the action. It is evident that the act of
respondent GSIS in selling 51% of its share in respondent MHC comes under the second and third categories of state action. Without doubt
therefore the transaction, although entered into by respondent GSIS, is in fact a transaction of the State and therefore subject to the
constitutional command.[46]
When the Constitution addresses the State it refers not only to the people but also to the government as elements of the State. After
all, government is composed of three (3) divisions of power - legislative, executive and judicial. Accordingly, a constitutional mandate directed
to the State is correspondingly directed to the three (3) branches of government. It is undeniable that in this case the subject constitutional
injunction is addressed among others to the Executive Department and respondent GSIS, a government instrumentality deriving its
authority from the State.
It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding rules expressly
provide that the highest bidder shall only be declared the winning bidder after it has negotiated and executed the necessary contracts, and
secured the requisite approvals. Since the Filipino First Policy provision of the Constitution bestows preference on qualified Filipinos the
mere tending of the highest bid is not an assurance that the highest bidder will be declared the winning bidder. Resultantly, respondents are
not bound to make the award yet, nor are they under obligation to enter into one with the highest bidder. For in choosing the awardee
respondents are mandated to abide by the dictates of the 1987 Constitution the provisions of which are presumed to be known to all the
bidders and other interested parties.
Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in the
bidding rules issued by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is a basic principle in
constitutional law that all laws and contracts must conform with the fundamental law of the land. Those which violate the Constitution lose
their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [i]f for any reason the Highest Bidder cannot be awarded the Block of Shares,
GSIS may offer this to other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the

highest bid in terms of price per share.[47] Certainly, the constitutional mandate itself is reason enough not to award the block of shares
immediately to the foreign bidder notwithstanding its submission of a higher, or even the highest, bid. In fact, we cannot conceive of a
stronger reason than the constitutional injunction itself.
In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights, privileges and
concessions covering the national economy and patrimony, thereby exceeding the bid of a Filipino, there is no question that the Filipino will
have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the award should go to the
Filipino. It must be so if we are to give life and meaning to the Filipino First Policy provision of the 1987 Constitution. For, while this may
neither be expressly stated nor contemplated in the bidding rules, the constitutional fiat is omnipresent to be simply disregarded. To ignore
it would be to sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution and laws of the
Philippines are understood to be always open to public scrutiny. These are given factors which investors must consider when venturing into
business in a foreign jurisdiction. Any person therefore desiring to do business in the Philippines or with any of its agencies or
instrumentalities is presumed to know his rights and obligations under the Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was well
aware from the beginning that a foreigner could participate in the bidding is meritless. Undoubtedly, Filipinos and foreigners alike were
invited to the bidding. But foreigners may be awarded the sale only if no Filipino qualifies, or if the qualified Filipino fails to match the
highest bid tendered by the foreign entity. In the case before us, while petitioner was already preferred at the inception of the bidding
because of the constitutional mandate, petitioner had not yet matched the bid offered by Renong Berhad. Thus it did not have the right or
personality then to compel respondent GSIS to accept its earlier bid. Rightly, only after it had matched the bid of the foreign firm and the
apparent disregard by respondent GSIS of petitioners matching bid did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. To insist
on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the foreign group is to insist that
government be treated as any other ordinary market player, and bound by its mistakes or gross errors of judgment, regardless of the
consequences to the Filipino people. The miscomprehension of the Constitution is regrettable. Thus we would rather remedy the indiscretion
while there is still an opportunity to do so than let the government develop the habit of forgetting that the Constitution lays down the basic
conditions and parameters for its actions.
Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules, respondent GSIS is left
with no alternative but to award to petitioner the block of shares of MHC and to execute the necessary agreements and documents to effect
the sale in accordance not only with the bidding guidelines and procedures but with the Constitution as well. The refusal of respondent GSIS
to execute the corresponding documents with petitioner as provided in the bidding rules after the latter has matched the bid of the Malaysian
firm clearly constitutes grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to be used as a
guideline for future legislation but primarily to be enforced; so must it be enforced. This Court as the ultimate guardian of the Constitution
will never shun, under any reasonable circumstance, the duty of upholding the majesty of the Constitution which it is tasked to defend. It is
worth emphasizing that it is not the intention of this Court to impede and diminish, much less undermine, the influx of foreign investments.
Far from it, the Court encourages and welcomes more business opportunities but avowedly sanctions the preference for Filipinos whenever
such preference is ordained by the Constitution. The position of the Court on this matter could have not been more appropriately articulated
by Chief Justice Narvasa As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the executive about
the wisdom and feasibility of legislation economic in nature, the Supreme Court has not been spared criticism for decisions perceived as
obstacles to economic progress and development x x x x in connection with a temporary injunction issued by the Courts First Division
against the sale of the Manila Hotel to a Malaysian Firm and its partner, certain statements were published in a major daily to the effect that
that injunction again demonstrates that the Philippine legal system can be a major obstacle to doing business here.
Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or set itself
up as the judge of whether they are viable or attainable, it is its bounden duty to make sure that they do not violate the Constitution or the
laws, or are not adopted or implemented with grave abuse of discretion amounting to lack or excess of jurisdiction. It will never shirk that
duty, no matter how buffeted by winds of unfair and ill-informed criticism.[48]
Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the
character of the asset, should not take precedence over non-material values. A commercial, nay even a budgetary, objective should not be
pursued at the expense of national pride and dignity. For the Constitution enshrines higher and nobler non-material values. Indeed, the

Court will always defer to the Constitution in the proper governance of a free society; after all, there is nothing so sacrosanct in any economic
policy as to draw itself beyond judicial review when the Constitution is involved.[49]
Nationalism is inherent in the very concept of the Philippines being a democratic and republican state, with sovereignty residing in
the Filipino people and from whom all government authority emanates. In nationalism, the happiness and welfare of the people must be the
goal. The nation-state can have no higher purpose. Any interpretation of any constitutional provision must adhere to such basic concept.
Protection of foreign investments, while laudible, is merely a policy. It cannot override the demands of nationalism.[50]
The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder solely for the sake of
privatization. We are not talking about an ordinary piece of property in a commercial district. We are talking about a historic relic that has
hosted many of the most important events in the short history of the Philippines as a nation. We are talking about a hotel where heads of
states would prefer to be housed as a strong manifestation of their desire to cloak the dignity of the highest state function to their official
visits to the Philippines. Thus the Manila Hotel has played and continues to play a significant role as an authentic repository of twentieth
century Philippine history and culture. In this sense, it has become truly a reflection of the Filipino soul - a place with a history of grandeur;
a most historical setting that has played a part in the shaping of a country.[51]
This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark - this Grand
Old Dame of hotels in Asia - to a total stranger. For, indeed, the conveyance of this epic exponent of the Filipino psyche to alien hands cannot
be less than mephistophelian for it is, in whatever manner viewed, a veritable alienation of a nations soul for some pieces of foreign silver.
And so we ask: What advantage, which cannot be equally drawn from a qualified Filipino, can be gained by the Filipinos if Manila Hotel - and
all that it stands for - is sold to a non-Filipino? How much of national pride will vanish if the nations cultural heritage is entrusted to a
foreign entity? On the other hand, how much dignity will be preserved and realized if the national patrimony is safekept in the hands of a
qualified, zealous and well-meaning Filipino? This is the plain and simple meaning of the Filipino First Policy provision of the Philippine
Constitution. And this Court, heeding the clarion call of the Constitution and accepting the duty of being the elderly watchman of the nation,
will continue to respect and protect the sanctity of the Constitution.
WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE
ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed to CEASE and DESIST from selling
51% of the shares of the Manila Hotel Corporation to RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE
HOTEL CORPORATION to purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00 per share and thereafter to
execute the necessary agreements and documents to effect the sale, to issue the necessary clearances and to do such other acts and deeds as
may be necessary for the purpose.
SO ORDERED.
Digest
Pursuant to the privatization program of the government, GSIS decided to sell 30-51% of the Manila Hotel Corporation. Two
bidders participated, MPH and Malaysian Firm Renong Berhad. MPHs bid was at P41.58/per share while RBs bid was at P44.00/share. RB
was the highest bidder hence it was logically considered as the winning bidder but is yet to be declared so. Pending declaration, MPH
matches RBs bid and invoked the Filipino First policy enshrined under par. 2, Sec. 10, Art. 12 of the 1987 Constitution**, but GSIS refused
to accept. In turn MPH filed a TRO to avoid the perfection/consummation of the sale to RB.

RB then assailed the TRO issued in favor of MPH arguing among others that:
Par. 2, Sec. 10, Art. 12 of the 1987 Constitution needs an implementing law because it is merely a statement of principle and policy (not selfexecuting);
Even if said passage is self-executing, Manila Hotel does not fall under national patrimony.
ISSUE: Whether or not RB should be admitted as the highest bidder and hence be proclaimed as the legit buyer of shares.
HELD: No. MPH should be awarded the sale pursuant to Art 12 of the 1987 Const. This is in light of the Filipino First Policy.
Par. 2, Sec. 10, Art. 12 of the 1987 Constitution is self executing. The Constitution is the fundamental, paramount and supreme law of the
nation, it is deemed written in every statute and contract.
Manila Hotel falls under national patrimony. Patrimony in its plain and ordinary meaning pertains to heritage. When the Constitution
speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the
term natural resources, but also to the cultural heritage of the Filipinos. It also refers to our intelligence in arts, sciences and letters.

Therefore, we should develop not only our lands, forests, mines and other natural resources but also the mental ability or faculty of our
people. Note that, for more than 8 decades (9 now) Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of
the Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty, independence
and nationhood.
Herein resolved as well is the term Qualified Filipinos which not only pertains to individuals but to corporations as well and other juridical
entities/personalities. The term qualified Filipinos simply means that preference shall be given to those citizens who can make a viable
contribution to the common good, because of credible competence and efficiency. It certainly does NOT mandate the pampering and
preferential treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate preference would
be counter productive and inimical to the common good.
In the granting of economic rights, privileges, and concessions, when a choice has to be made between a qualified foreigner and a qualified
Filipino, the latter shall be chosen over the former.
**Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to
citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such
higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified
Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national
goals and priorities.

2) Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-2662

March 26, 1949

SHIGENORI KURODA, petitioner,


vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO DUQUE, Colonel MARGARITO TORALBA, Colonel
IRENEO BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO ARANAS, MELVILLE S. HUSSEY and ROBERT
PORT, respondents.
Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.
Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla and S. Melville Hussey for respondents.
MORAN, C.J.:
Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding General of the Japanese Imperial Forces
in The Philippines during a period covering 19433 and 19444 who is now charged before a military Commission convened by the Chief of Staff
of the Armed forces of the Philippines with having unlawfully disregarded and failed "to discharge his duties as such command, permitting
them to commit brutal atrocities and other high crimes against noncombatant civilians and prisoners of the Imperial Japanese Forces in
violation of the laws and customs of war" comes before this Court seeking to establish the illegality of Executive Order No. 68 of the
President of the Philippines: to enjoin and prohibit respondents Melville S. Hussey and Robert Port from participating in the prosecution of
petitioner's case before the Military Commission and to permanently prohibit respondents from proceeding with the case of petitioners.
In support of his case petitioner tenders the following principal arguments.
First. "That Executive Order No. 68 is illegal on the ground that it violates not only the provision of our constitutional law but also our
local laws to say nothing of the fact (that) the Philippines is not a signatory nor an adherent to the Hague Convention on Rules and
Regulations covering Land Warfare and therefore petitioners is charged of 'crimes' not based on law, national and international." Hence
petitioner argues "That in view off the fact that this commission has been empanelled by virtue of an unconstitutional law an illegal order
this commission is without jurisdiction to try herein petitioner."

Second. That the participation in the prosecution of the case against petitioner before the Commission in behalf of the United State of
America of attorneys Melville Hussey and Robert Port who are not attorneys authorized by the Supreme Court to practice law in the
Philippines is a diminution of our personality as an independent state and their appointment as prosecutor are a violation of our
Constitution for the reason that they are not qualified to practice law in the Philippines.
Third. That Attorneys Hussey and Port have no personality as prosecution the United State not being a party in interest in the case.
Executive Order No. 68, establishing a National War Crimes Office prescribing rule and regulation governing the trial of accused war
criminals, was issued by the President of the Philippines on the 29th days of July, 1947 This Court holds that this order is valid and
constitutional. Article 2 of our Constitution provides in its section 3, that
The Philippines renounces war as an instrument of national policy and adopts the generally accepted principles of international law
as part of the of the nation.
In accordance with the generally accepted principle of international law of the present day including the Hague Convention the Geneva
Convention and significant precedents of international jurisprudence established by the United Nation all those person military or civilian
who have been guilty of planning preparing or waging a war of aggression and of the commission of crimes and offenses consequential and
incidental thereto in violation of the laws and customs of war, of humanity and civilization are held accountable therefor. Consequently in the
promulgation and enforcement of Execution Order No. 68 the President of the Philippines has acted in conformity with the generally
accepted and policies of international law which are part of the our Constitution.
The promulgation of said executive order is an exercise by the President of his power as Commander in chief of all our armed forces as upheld
by this Court in the case of Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when we said
War is not ended simply because hostilities have ceased. After cessation of armed hostilities incident of war may remain pending
which should be disposed of as in time of war. An importance incident to a conduct of war is the adoption of measure by the military
command not only to repel and defeat the enemies but to seize and subject to disciplinary measure those enemies who in their
attempt to thwart or impede our military effort have violated the law of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed
the power to create a military commission for the trial and punishment of war criminals is an aspect of waging war. And in the
language of a writer a military commission has jurisdiction so long as a technical state of war continues. This includes the period of
an armistice or military occupation up to the effective of a treaty of peace and may extend beyond by treaty agreement.
(Cowles Trial of War Criminals by Military Tribunals, America Bar Association Journal June, 1944.)
Consequently, the President as Commander in Chief is fully empowered to consummate this unfinished aspect of war namely the trial and
punishment of war criminal through the issuance and enforcement of Executive Order No. 68.
Petitioner argues that respondent Military Commission has no Jurisdiction to try petitioner for acts committed in violation of the Hague
Convention and the Geneva Convention because the Philippines is not a signatory to the first and signed the second only in 1947. It cannot be
denied that the rules and regulation of the Hague and Geneva conventions form, part of and are wholly based on the generally accepted
principals of international law. In facts these rules and principles were accepted by the two belligerent nation the United State and Japan
who were signatories to the two Convention, Such rule and principles therefore form part of the law of our nation even if the Philippines was
not a signatory to the conventions embodying them for our Constitution has been deliberately general and extensive in its scope and is not
confined to the recognition of rule and principle of international law as continued inn treaties to which our government may have been or
shall be a signatory.
Furthermore when the crimes charged against petitioner were allegedly committed the Philippines was under the sovereignty of United
States and thus we were equally bound together with the United States and with Japan to the right and obligation contained in the treaties
between the belligerent countries. These rights and obligation were not erased by our assumption of full sovereignty. If at all our emergency
as a free state entitles us to enforce the right on our own of trying and punishing those who committed crimes against crimes against our
people. In this connection it is well to remember what we have said in the case of Laurel vs. Misa (76 Phil., 372):
. . . The change of our form government from Commonwealth to Republic does not affect the prosecution of those charged with the
crime of treason committed during then Commonwealth because it is an offense against the same sovereign people. . . .
By the same token war crimes committed against our people and our government while we were a Commonwealth are triable and punishable
by our present Republic.
Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and Robert Port in the prosecution of his case on
the ground that said attorney's are not qualified to practice law in Philippines in accordance with our Rules of court and the appointment of
said attorneys as prosecutors is violative of our national sovereignty.

In the first place respondent Military Commission is a special military tribunal governed by a special law and not by the Rules of court which
govern ordinary civil court. It has already been shown that Executive Order No. 68 which provides for the organization of such military
commission is a valid and constitutional law. There is nothing in said executive order which requires that counsel appearing before said
commission must be attorneys qualified to practice law in the Philippines in accordance with the Rules of Court. In facts it is common in
military tribunals that counsel for the parties are usually military personnel who are neither attorneys nor even possessed of legal training.
Secondly the appointment of the two American attorneys is not violative of our nation sovereignty. It is only fair and proper that United
States, which has submitted the vindication of crimes against her government and her people to a tribunal of our nation should be allowed
representation in the trial of those very crimes. If there has been any relinquishment of sovereignty it has not been by our government but by
the United State Government which has yielded to us the trial and punishment of her enemies. The least that we could do in the spirit of
comity is to allow them representation in said trials.
Alleging that the United State is not a party in interest in the case petitioner challenges the personality of attorneys Hussey and Port as
prosecutors. It is of common knowledge that the United State and its people have been equally if not more greatly aggrieved by the crimes
with which petitioner stands charged before the Military Commission. It can be considered a privilege for our Republic that a leader nation
should submit the vindication of the honor of its citizens and its government to a military tribunal of our country.
The Military Commission having been convened by virtue of a valid law with jurisdiction over the crimes charged which fall under the
provisions of Executive Order No. 68, and having said petitioner in its custody, this Court will not interfere with the due process of such
Military commission.
For all the foregoing the petition is denied with costs de oficio.
Paras, Feria, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur.

Separate Opinions
PERFECTO, J., dissenting:
A military commission was empanelled on December 1, 1948 to try Lt. Gen. Shigenori Kuroda for Violation of the laws and customs of land
warfare.
Melville S. Hussey and Robert Port, American citizens and not authorized by the Supreme Court to practice law were appointed prosecutor
representing the American CIC in the trial of the case.
The commission was empanelled under the authority of Executive Order No. 68 of the President of the Philippines the validity of which is
challenged by petitioner on constitutional grounds. Petitioner has also challenged the personality of Attorneys Hussey and Port to appear as
prosecutors before the commission.
The charges against petitioner has been filed since June 26, 1948 in the name of the people of the Philippines as accusers.
We will consideration briefly the challenge against the appearance of Attorneys Hussey and Port. It appearing that they are aliens and have
not been authorized by the Supreme Court to practice law there could not be any question that said person cannot appear as prosecutors in
petitioner case as with such appearance they would be practicing law against the law.
Said violation vanishes however into insignificance at the side of the momentous question involved in the challenge against the validity of
Executive Order No. 68. Said order is challenged on several constitutional ground. To get a clear idea of the question raised it is necessary to
read the whole context of said order which is reproduced as follows:
EXECUTIVE ORDER NO. 68.
ESTABLISHING A NATIONAL WAR CRIMES OFFICE AND PRESCRIBING RULES AND REGULATION
GOVERNING THE TRIAL OF ACCUSED WAR CRIMINAL.
I, Manuel Roxas president of the Philippines by virtue of the power vested in me by the Constitution and laws of the Philippines do
hereby establish a National War Crimes Office charged with the responsibility of accomplishing the speedy trial of all Japanese
accused of war crimes committed in the Philippines and prescribe the rules and regulation such trial.

The National War crimes office is established within the office of the Judge Advocate General of the Army of the Philippines and
shall function under the direction supervision and control of the Judge Advocate General. It shall proceed to collect from all
available sources evidence of war crimes committed in the Philippines from the commencement of hostilities by Japan in December
1941, maintain a record thereof and bring about the prompt trial maintain a record thereof and bring about the prompt trial of the
accused.
The National War Crimes Office shall maintain direct liaison with the Legal Section General Headquarters, Supreme Commander
for the Allied power and shall exchange with the said Office information and evidence of war crimes.
The following rules and regulation shall govern the trial off person accused as war criminals:
ESTABLISHMENT OF MILITARY COMMISSIONS
(a) General. person accused as war criminal shall be tried by military commission to be convened by or under the authority of the
Philippines.
II. JURISDICTION
(a) Over Person. Thee military commission appointed hereunder shall have jurisdiction over all persons charged with war crimes
who are in the custody of the convening authority at the time of the trial.
(b) Over Offenses. The military commission established hereunder shall have jurisdiction over all offenses including but not
limited to the following:
(1) The planning preparation initiation or waging of a war of aggression or a war in violation of international treaties agreement or
assurance or participation in a common plan or conspiracy for the accomplishment of any of the foregoing.
(2) Violation of the laws or customs of war. Such violation shall include but not be limited to murder ill-treatment or deportation to
slave labor or for other purpose of civilian population of or in occupied territory; murder or ill-treatment of prisoners of war or
internees or person on the seas or elsewhere; improper treatment of hostage; plunder of public or private property wanton
destruction of cities towns or village; or devastation not justified by military necessity.
(3) Murder extermination enslavement deportation and other inhuman acts committed against civilian population before or during
the war or persecution on political racial or religion ground in executive of or in connection with any crime defined herein whether
or not in violation of the local laws.
III. MEMBERSHIP OF COMMISSIONS
(a) Appointment. The members of each military commission shall be appointed by the President of the Philippines or under
authority delegated by him. Alternates may be appointed by the convening authority. Such shall attend all session of the
commission, and in case of illness or other incapacity of any principal member, an alternate shall take the place of that member.
Any vacancy among the members or alternates, occurring after a trial has begun, may be filled by the convening authority but the
substance of all proceeding had evidence taken in that case shall be made known to the said new member or alternate. This facts
shall be announced by the president of the commission in open court.
(b) Number of Members. Each commission shall consist of not less than three (3) members.
(c) Qualifications. The convening authority shall appoint to the commission persons whom he determines to be competent to
perform the duties involved and not disqualified by personal interest or prejudice, provided that no person shall be appointed to
hear a case in which he personally investigated or wherein his presence as a witness is required. One specially qualified member
whose ruling is final in so far as concerns the commission on an objection to the admissibility of evidence offered during the trial.
(d) Voting. Except as to the admissibility of evidence all rulings and finding of the Commission shall be by majority vote except
that conviction and sentence shall be by the affirmative vote of not less than conviction and sentence shall be by the affirmative vote
of not less than two-thirds (2\3) of the member present.
(e) Presiding Member. In the event that the convening authority does not name one of the member as the presiding member, the
senior officer among the member of the Commission present shall preside.
IV. PROSECUTORS
(a) Appointment. The convening authority shall designate one or more person to conduct the prosecution before each commission.

(b) Duties. The duties of the prosecutor are:


(1) To prepare and present charges and specifications for reference to a commission.
(2) To prepare cases for trial and to conduct the prosecution before the commission of all cases referred for trial.
V. POWER AND PROCEDURE OF COMMISSION
(a) Conduct of the Trial. A Commission shall:
(1) Confine each trial strictly to fair and expeditious hearing on the issues raised by the charges, excluding irrelevant issues or
evidence and preventing any unnecessary delay or interference.
(2) Deal summarily with any contumacy or contempt, imposing any appropriate punishment therefor.
(3) Hold public session when otherwise decided by the commission.
(4) Hold each session at such time and place as it shall determine, or as may be directed by the convening authority.
(b) Rights of the Accused. The accused shall be entitled:
(1) To have in advance of the trial a copy of the charges and specifications clearly worded so as to apprise the accused of each offense
charged.
(2) To be represented, prior to and during trial, by counsel appointed by the convening authority or counsel of his own choice, or to
conduct his own defense.
(3) To testify in his own behalf and have his counsel present relevant evidence at the trial in support of his defense, and crossexamine each adverse witness who personally appears before the commission.
(4) To have the substance of the charges and specifications, the proceedings and any documentary evidence translated, when he is
unable otherwise to understand them.
(c) Witnesses. The Commission shall have power:
(1) To summon witnesses and require their attendance and testimony; to administer oaths or affirmations to witnesses and other
persons and to question witnesses.
(2) To require the production of documents and other evidentiary material.
(3) To delegate the Prosecutors appointed by the convening authority the powers and duties set forth in (1) and (2) above.
(4) To have evidence taken by a special commissioner appointed by the commission.
(d) Evidence.
(1) The commission shall admit such evidence as in its opinion shall be of assistance in proving or disproving the charge, or such as
in the commission's opinion would have probative value in the mind of a reasonable man. The commission shall apply the rules of
evidence and pleading set forth herein with the greatest liberality to achieve expeditious procedure. In particular, and without
limiting in any way the scope of the foregoing general rules, the following evidence may be admitted:
(a) Any document, irrespective of its classification, which appears to the commission to have been signed or issued by any officer,
department, agency or member of the armed forces of any Government without proof of the signature or of the issuance of the
document.
(b) Any report which appears to the commission to have been signed or issued by the International Red Cross or a member of any
medical service personnel, or by any investigator or intelligence officer, or by any other person whom commission considers as
possessing knowledge of the matters contained in the report.
(c) Affidavits, depositions or other signed statements.

(d) Any diary, letter to other document, including sworn statements, appearing to the commission to contain information relating to
the charge.
(e) A copy of any document or other secondary evidence of the contents, if the original is not immediately available.
(2) The commission shall take judicial notice of facts of common knowledge, official government documents of any nation, and the
proceedings, records and findings of military or other agencies of any of the United Nation.
(3) A commission may require the prosecution and the defense to make a preliminary offer of proof whereupon the commission may
rule in advance on the admissibility of such evidence.
(4) The official position of the accused shall not absolve him from responsibility nor be considered in mitigation of punishment.
Further action pursuant to an order of the accused's superior, or of his Government, shall not constitute a defense, but may be
considered in mitigation of punishment if the commission determines that justice so requires.
(5) All purposed confessions or statements of the accused shall bee admissible in evidence without any showing that they were
voluntarily made. If it is shown that such confession or statement was procured by mean which the commission believe to have been
of such a character that may have caused the accused to make a false statement the commission may strike out or disregard any
such portion thereof as was so procured.
(e) Trial Procedure. The proceedings of each trial shall be conducted substantially as follows unless modified by the commission
to suit the particular circumstances:
(1) Each charge and specification shall be read or its substance stated in open court.
(2) The presiding member shall ask each accused whether he pleads "Guilty" or "Not guilty."
(3) The prosecution shall make its opening statement."(4) The presiding member may at this or any other time require the
prosecutor to state what evidence he proposes to submit to the commission and the commission thereupon may rule upon the
admissibility of such evidence.
(4) The witnesses and other evidence for the prosecution shall be heard or presented. At the close of the case for the prosecution, the
commission may, on motion of the defense for a finding of not guilty, consider and rule whether he evidence before the commission
may defer action on any such motion and permit or require the prosecution to reopen its case and produce any further available
evidence.
(5) The defense may make an opening statement prior to presenting its case. The presiding member may, at this any other time
require the defense to state what evidence it proposes to submit to the commission where upon the commission may rule upon the
admissibility of such evidence.
(6) The witnesses and other evidence for the defense shall be heard or presented. Thereafter, the prosecution and defense may
introduce such evidence in rebuttal as the commission may rule as being admissible.
(7) The defense and thereafter the prosecution shall address the commission.
(8) The commission thereafter shall consider the case in closed session and unless otherwise directed by the convening authority,
announce in open court its judgment and sentence if any. The commission may state the reason on which judgment is based.
( f ) Record of Proceedings. Each commission shall make a separate record of its proceeding in the trial of each case brought
before it. The record shall be prepared by the prosecutor under the direction of the commission and submitted to the defense
counsel. The commission shall be responsible for its accuracy. Such record, certified by the presiding member of the commission or
his successor, shall be delivered to the convening authority as soon as possible after the trial.
(g) Sentence. The commission may sentence an accused, upon conviction to death by hanging or shooting, imprisonment for life or
for any less term, fine or such other punishment as the commission shall determine to be proper.
(h) Approval of Sentence. No. sentence of a military commission shall be carried into effect until approved by the chief off Staff:
Provided, That no sentence of death or life imprisonment shall be carried into execution until confirmed by the President of the
Philippines. For the purpose of his review the Chief of Staff shall create a Board of Review to be composed of not more than three
officers none of whom shall be on duty with or assigned to the Judge Advocate General's Office. The Chief of Staff shall have
authority to approve, mitigate remit in whole or in part, commute, suspend, reduce or otherwise alter the sentence imposed, or
(without prejudice to the accused) remand the case for rehearing before a new military commission; but he shall not have authority

to increase the severity of the sentence. Except as herein otherwise provided the judgment and sentence of a commission shall final
and not subject to review by any other tribunal.
VI. RULE-MAKING POWER
Supplementary Rule and Forms. Each commission shall adopt rules and forms to govern its procedure, not inconsistent with the
provision of this Order, or such rules and forms as may be prescribed by the convening authority]or by the President of the
Philippines.
VII. The amount of amount of seven hundred thousand pesos is hereby set aside out of the appropriations for the Army of the
Philippines for use by the National War Crimes Office in the accomplishment of its mission as hereinabove set forth, and shall be
expended in accordance with the recommendation of the Judge Advocate General as approved by the President. The buildings,
fixtures, installations, messing, and billeting equipment and other property herefore used by then Legal Section, Manila Branch, of
the General Headquarters, Supreme Commander for the Allied Power, which will be turned over by the United States Army to the
Philippines Government through the Foreign Liquidation Commission and the Surplus Property Commission are hereby
specification reserved for use off the National War Crimes Office.
Executive Order No. 64, dated August 16, 1945, is hereby repealed.
Done in the City of Manila, this 29th day of July in the year of Our Lord, nineteen hundred and forty-seven, and of the
Independence of the Philippines, the second.
MANUEL ROXAS
President of the Philippines
By the President:
EMILIO ABELLO
Chief of the Executive Office
EXECUTIVE LEGISLATION
Executive Order No. 68 is a veritable piece of Legislative measure, without the benefit of congressional enactment.
The first question that is trust at our face spearheading a group of other no less important question, is whether or not the President of the
Philippines may exercise the legislative power expressly vested in Congress by the Constitution. .
The Constitution provides:
The Legislative powers shall be vested in a Congress of the Philippines which shall consist of a Senate and House of
Representatives. (Section 1, Article VI.)
While there is no express provision in the fundamental law prohibiting the exercise of legislative power by agencies other than Congress, a
reading of the whole context of the Constitution would dispel any doubt as to the constitutional intent that the legislative power is to be
exercised exclusively by Congress, subject only to the veto power of the President of the President of the Philippines, to the specific provision
which allow the president of the Philippines to suspend the privileges of the writ of habeas corpus and to place any part of the Philippines
under martial law, and to the rule-making power expressly vested by the Constitution in the Supreme Court.
There cannot be any question that the member of the Constitutional Convention were believers in the tripartite system of government as
originally enunciated by Aristotle, further elaborated by Montequieu and accepted and practiced by modern democracies, especially the
United State of America, whose Constitution, after which ours has been patterned, has allocated the three power of government
legislative, executive, judicial to distinct and separate department of government.
Because the power vested by our Constitution to the several department of the government are in the nature of grants, not recognition of preexisting power, no department of government may exercise any power or authority not expressly granted by the Constitution or by law by
virtue express authority of the Constitution.
Executive Order No. 68 establishes a National War Crimes Office and the power to establish government office is essentially legislative.
The order provides that person accused as war criminals shall be tried by military commissions. Whether such a provision is substantive or
adjective, it is clearly legislative in nature. It confers upon military commissions jurisdiction to try all persons charge with war crimes. The

power to define and allocate jurisdiction for the prosecution of person accused of any crime is exclusively vested by the Constitution in
Congress. .
It provides rules of procedure for the conduct of trial of trial. This provision on procedural subject constitutes a usurpation of the rule-making
power vested by Constitution in the Supreme Court.
It authorized military commission to adopt additional rule of procedure. If the President of the Philippines cannot exercise the rule -making
power vested by the Constitution in the Supreme Court, he cannot, with more reason, delegate that power to military commission.
It appropriates the sum of P7000,000 for the expenses of the National War Crimes office established by the said Executive Order No. 68. This
constitutes another usurpation of legislative power as the power to vote appropriations belongs to Congress.
Executive Order No. 68., is, therefore, null and void, because, though it the President of the Philippines usurped power expressly vested by
the Constitution in Congress and in the Supreme Court.
Challenged to show the constitutional or legal authority under which the President issued Executive Order No. 68, respondent could not give
any definite answer. They attempted, however, to suggest that the President of the Philippines issued Executive Order No. 68 under the
emergency power granted to him by Commonwealth Act No. 600, as amended by Commonwealth Act No. 620, and Commonwealth Act No.
671, both of which are transcribed below:

COMMONWEALTH ACT NO. 600.


AN ACT DECLARING A STATE OF EMERGENCY AND AUTHORIZING THE PRESIDENT TO PROMULGATE
RULES AND REGULATION TO SAFEGUARD THE INTEGRITY OF THE PHILIPPINES AND TO INSURE THE
TRANQUILITY OF ITS INHABITANTS.
Be it enacted by the National Assembly of the Philippines:
SECTION 1. The existence of war in many parts of the world has created a national emergency which makes it necessary to invest
the President of the Philippines with extraordinary power in order to safeguard the integrity of the Philippines and to insure the
tranquility of its inhabitants, by suppressing espionage, lawlessness, and all subversive to the people adequate shelter and clothing
and sufficient food supply, and by providing means for the speedy evacuation of the civilian population the establishment of an air
protective service and the organization of volunteer guard units, and to adopt such other measures as he may deem necessary for
the interest of the public. To carry out this policy the President is authorized to promulgate rules and regulations which shall have
the force and effect off law until the date of adjournment of the next regulation which shall have the force and effect of law until the
date of adjournment of the next regular session of the First Congress of the Philippines, unless sooner amended or repealed by the
Congress of Philippines. Such rules and regulation may embrace the following objects: (1) to suppress espionage and other
subversive activities; (2) to require all able-bodied citizens (a) when not engaged in any lawful occupation, to engage in farming or
other productive activities or (b) to perform such services as may bee necessary in the public interest; (3) to take over farm lands in
order to prevent or shortage of crops and hunger and destitution; (4) to take over industrial establishment in order to insure
adequate production, controlling wages and profits therein; (5) to prohibit lockouts and strikes whenever necessary to prevent the
unwarranted suspension of work in productive enterprises or in the interest of national security; (6) to regulate the normal hours of
work for wage-earning and salaried employees in industrial or business undertakings of all kinds; (7) to insure an even distribution
of labor among the productive enterprises; (8) to commandership and other means of transportation in order to maintain, as much
as possible, adequate and continued transportation facilities; (9) to requisition and take over any public service or enterprise for use
or operation by the Government;(10) to regulate rents and the prices of articles or commodities of prime necessity, both imported
and locally produced or manufactured; and (11) to prevent, locally or generally, scarcity, monopolization, hoarding injurious
speculations, and private control affecting the supply, distribution and movement of foods, clothing, fuel, fertilizer, chemical,
building, material, implements, machinery, and equipment required in agriculture and industry, with power to requisition these
commodities subject to the payment of just compensation. (As amended by Com. Act No. 620.)
SEC. 2. For the purpose of administering this Act and carrying out its objective, the President may designate any officer, without
additional compensation, or any department, bureau, office, or instrumentality of the National Government.
SEC. 3. Any person, firm, or corporation found guilty of the violation of any provision of this Act or of this Act or any of the rules or
regulations promulgated by the President under the authority of section one of this Act shall be punished by imprisonment of not
more than ten years or by a fine of not more than ten thousand pesos, or by both. If such violation is committed by a firm or
corporation, the manager, managing director, or person charge with the management of the business of such firm, or corporation
shall be criminally responsible therefor.

SEC. 4. The President shall report to the national Assembly within the first ten days from the date of the opening of its next
regular session whatever action has been taken by him under the authority herein granted.
SEC. 5. To carry out the purposed of this Act, the President is authorized to spend such amounts as may be necessary from the sum
appropriated under section five Commonwealth Act Numbered four hundred and ninety-eight.
SEC. 6. If any province of this Act shall be declared by any court of competent jurisdiction to be unconstitutional and void, such
declaration shall not invalidate the remainder of this Act.
SEC. 7. This Act shall take upon its approval.
Approved, August 19, 1940.

COMMONWEALTH ACT NO. 671


AN ACT DECLARING A STATE OF TOTAL EMERGENCY AS A RESULT OF WAR INVOLVING THE PHILIPPINES
AND AUTHORIZING THE PRESIDENT TO PROMULGATE RULE AND REGULATIONS TO MEET SUCH
EMERGENCY.
Be it enacted the National Assembly of the Philippines;
SECTION 1. The existed of war between the United State and other countries of Europe and Asia, which involves the Philippines,
makes it necessary to invest the President with extraordinary powers in order to meet the resulting emergency.
SEC. 2. Pursuant to the provision of Article VI, section 16, of the Constitution, the President is hereby authorized, during the
existence of the emergency, to promulgate such rules and regulation as he may deem necessary to carry out the national policy
declared in section 1 hereof. Accordingly, he is, among other things, empowered (a) to transfer the seat of the Government or any of
its subdivisions, branches, department, offices, agencies or instrumentalities; (b) to reorganize the Government of the
Commonwealth including the determination of the order of precedence of the heads of the Executive Department; (c) to create new
subdivision, branches, departments, offices, agency or instrumentalities of government and to abolish any of those already existing;
(d) to continue in force laws and appropriation which would lapse or otherwise became inoperative, and to modify or suspend the
operation or application of those of an administrative character; (e) to imposed new taxes or to increase, reduce, suspend, or abolish
those in existence; (f) to raise funds through the issuance of bonds or otherwise, and to authorize the expensive of the proceeds
thereof; (g) to authorize the National, provincial, city or municipal governments to incur in overdrafts for purposes that he may
approve; (h) to declare the suspension of the collection of credits or the payment of debts; and (i) to exercise such other power as he
may deem necessary to enable the Government to fulfill its responsibilities and to maintain and enforce its authority.
SEC. 3. The President of the Philippines report thereto all the rules and regulation promulgated by him under the power herein
granted.
SEC. 4. This Act shall take effect upon its approval and the rules and regulations. promulgated hereunder shall be in force and
effect until the Congress of the Philippines shall otherwise provide.
Approved December 16, 1941.
The above Acts cannot validly be invoked, Executive Order No. 68 was issued on July 29, 1947. Said Acts had elapsed upon the liberation of
the Philippines form the Japanese forces or, at the latest, when the surrender of Japan was signed in Tokyo on September 2, 1945.
When both Acts were enacted by the Second National Assembly, we happened to have taken direct part in their consideration and passage,
not only as one of the members of said legislative body as chairman of the Committee on Third Reading population Known as the "Little
Senate." We are, therefore in a position to state that said measures were enacted by the second national Assembly for the purpose of facing
the emergency of impending war and of the Pacific War that finally broke out with the attack of Pearl Harbor on December 7, 1941. We
approved said extraordinary measures, by which under the exceptional circumstances then prevailing legislative power were delegated to the
President of the Philippines, by virtue of the following provisions of the Constitution:
In time of war or other national emergency, the Congress may by law authorize the President, for a limited period and subject to
such restrictions as it may prescribe to promulgate rules and regulations to carry out declared national policy. (Article VI, section
26.)

It has never been the purpose of the National Assembly to extend the delegation beyond the emergency created by the war as to extend it
farther would be violative of the express provision of the Constitution. We are of the opinion that there is no doubt on this question.; but if
there could still be any the same should be resolved in favor of the presumption that the National Assembly did not intend to violate the
fundamental law.
The absurdity of the contention that the emergency Acts continued in effect even after the surrender of Japan can not be gainsaid. Only a few
months after liberation and even before the surrender of Japan, or since the middle of 1945, the Congress started to function normally. In the
hypothesis that the contention can prevail, then, since 1945, that is, four years ago, even after the Commonwealth was already replaced by
the Republic of the Philippines with the proclamation of our Independence, two district, separate and independence legislative organs,
Congress and the President of the Philippines would have been and would continue enacting laws, the former to enact laws of every nature
including those of emergency character, and the latter to enact laws, in the form of executive orders, under the so-called emergency powers.
The situation would be pregnant with dangers to peace and order to the rights and liberties of the people and to Philippines democracy.
Should there be any disagreement between Congress and the President of the Philippines, a possibility that no one can dispute the President
of the Philippines may take advantage of he long recess of Congress (two-thirds of every year ) to repeal and overrule legislative enactments
of Congress, and may set up a veritable system of dictatorship, absolutely repugnant to the letter and spirit of the Constitution.
Executive Order No. 68 is equally offensive to the Constitution because it violates the fundamental guarantees of the due process and equal
protection of the law. It is especially so, because it permit the admission of many kinds evidence by which no innocent person can afford to get
acquittal and by which it is impossible to determine whether an accused is guilty or not beyond all reasonable doubt.
The rules of evidence adopted in Executive Order No. 68 are a reproduction of the regulation governing the trial of twelve criminal, issued by
General Douglas Mac Arthur, Commander in Chief of the United State Armed Forces in Western Pacific, for the purpose of trying among
other, General Yamashita and Homma. What we said in our concurring and dissenting opinion to the decision promulgated on December 19,
1945, in the Yamashita case, L-129, and in our concurring and dissenting opinion to the resolution of January 23, 1946 in disposing the
Homma case, L-244, are perfectly applicable to the offensive rules of evidence in Executive Order No. 68. Said rules of evidence are
repugnant to conscience as under them no justice can expected.
For all the foregoing, conformably with our position in the Yamashita and Homma cases, we vote to declare Executive Order No. 68 null and
void and to grant petition.
digest
Political Law Generality Accepted Principles of International Law
Kuroda was the highest ranking Japanese officer stationed in the Philippines during the Japanese occupation. He was then charged before
the Military Commission due to the atrocities that were done against non combatant civilians and prisoners during the war. His trial was in
pursuant to EO No. 68 which established the National War Crimes Office and prescribing rules and regulations governing the trial of accused
war criminals. Kuroda is questioning the legality of the said EO arguing that the same is not provided for in the Constitution. He further
underscores the fact that the Philippines is not a signatory of the Hague Convention on Rules and Regulations Covering Land Warfare hence
we cannot impose against him any criminal charges because it has no laws to base on, national or international.
ISSUE: Whether or not Kuroda can be charged in Philippine courts?
HELD: EO No. 68 is constitutional hence the Philippine courts can take cognizance of the case at bar. EO No 68 is in pursuant to the
constitutional provision that states the Philippines renounces war as an instrument of national policy, and adopts the generally accepted
principles of international law as part of the law of the nation. The Hague Convention and other similar conventions whose principles are
generally accepted are hence considered as part of the law of the land.

3) EN BANC
[G.R. No. L-5. September 17, 1945.]
CO CHAM (alias CO CHAM), petitioner, vs. EUSEBIO VALDEZ, TAN KEH and ARSENIO P. DIZON, Judge of
First Instance of Manila, respondents.
Marcelino Lontok, for petitioner.
P. A. Revilla, for respondent Valdez Tan Keh.
Respondent Judge Dizon, in his own behalf.

SYLLABUS
1.POLITICAL AND INTERNATIONAL LAW; VALIDITY OF ACTS OF "DE FACTO" GOVERNMENT. It is a legal truism in
political and international law that all acts and proceedings of the legislative, executive, and judicial departments of a de
facto government are good and valid.
2.ID.; KINDS OF "FACTO" GOVERNMENTS. There are several kinds of de facto governments. The first, or government de
facto in a proper legal sense, is that government that gets possession and control of, or usurps, by force or by the voice of the majority,
the rightful legal government and maintains itself against the will of the latter, such as the government of England under the
Commonwealth, first the Parliament and later by Cromwell as Protector. The second is that which is established and maintained by
military forces who invade and occupy a territory of the enemy in the course of war, and which is denominated a government of
paramount force, as the cases of Castine, in Maine, which was reduced to British possession in the in the war of 1812, and of Tampico,
Mexico, occupied during the war with Mexico, by the troops of the United States. And the third is that established as an independent
government by the inhabitants of a country who rise in insurrection against the parent state, such as the government of the Southern
Confederacy in revolt against the Union during the war of secession.
3.ID.; DISTINGUISHING CHARACTERISTICS OF SECOND KIND OF "DE FACTO" GOVERNMENT. The distinguishing
characteristics of the second kind of de facto government, more aptly denominated a government of paramount force, are (1), that its
existence is maintained by active military power within the territories and against the rightful authority of an established and lawful
government; and (2), that while it exist it must necessarily be obeyed in civil matters by private citizens who, by acts of obedience
rendered in submission to such force, do not become responsible, as wrongdoers, for those acts, though not warranted by the laws of the
rightful government. Actual governments of this sort are established over districts differing greatly in extent and conditions. They are
usually administered by military authority, but they may be administered, also, by civil authority, supported more or less directly by
military force.
4.ID.; ID.; POWERS AND DUTIES OF GOVERNMENT OF PARAMOUNT FORCE. The powers and duties of de
facto governments of this description are regulated in Section III of the Hague Convention of 1907, which is a revision of the provisions
of the Hague Conventions of 1899 on the same subject of Military Authority over Hostile Territory. Article 43 of said Section III provides
that "the authority of the legitimate power having actually passed into the hands of the occupants, the latter shall take all steps in his
power to reestablish and issue, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force
in the country."
5.ID.; ID.; ID.; PHILIPPINE EXECUTIVE COMMISSION, A "DE FACTO" GOVERNMENT OF THE SECOND KIND. It is
evident that the Philippine Executive Commission, which was organized by Order No. 1, issued on January 23, 1942 by the Commander
of the Japanese forces, was a civil government established by the military forces, was a civil government established by the military
forces of occupation and therefore a de facto government of the second Kind. It was not different from the government established by the
British in Castine, Maine, or by the United States in Tampico, Mexico. As Halleck says, "the government established over an enemy's
territory during the military occupation may exercise all the powers given by the laws of war to the conqueror over the conquered, and is
subject to all restrictions which that code imposes. It is of little consequence whether such government be called a military or civil
government. Its character is the same and the source of its authority the same. In either case it is a government imposed by the laws of
war, and so far as it concerns the inhabitants of such territory or the rest of the world, those laws alone determine the legality or
illegality of its acts." (Vol. 2, p. 466.) The fact that the Philippine Executive Commission was a civil and not a military government and
was run by Filipinos and not by Japanese nationals, is of no consequence.
6.ID.; ID.; ID.; SO-CALLED REPUBLIC OF THE PHILIPPINES, OF SAME CHARACTER AS PHILIPPINE EXECUTIVE
COMMISSION. The so-called Republic of the Philippines, apparently established and organized as a sovereign state independent
from any other government by the Filipino people, was, in truth and reality, a government established by the belligerent occupants or
the Japanese forces of occupation. It was of the same character as the Philippine Executive Commission, and the ultimate source of its
authority was the same the Japanese military authority and government. Japan had no legal power to grant independence to the
Philippines or transfer the sovereignty of the United States to, or recognize the latest sovereignty of, the Filipino people, before its
military occupation and possession of the islands had matured into an absolute and permanent dominion or sovereignty by a treaty of
peace or other means recognized in the law of nations. For it is a well-established doctrine in international law, recognized in Article 45
of the Hague Convention of 1907 (which prohibits compulsion of the population of the occupied territory to swear allegiance to the
hostile power), that belligerent occupation, being essentially provisional, does not serve to transfer sovereignty over the territory
controlled although the de juregovernment is during the period of occupancy deprived of the power to exercise its rights as such. Even if
the Republic of the Philippines had been established by the free will of the Filipino people who, taking advantage of the withdrawal of
the American forces from the Islands, had organized an independent government under that name with the support and backing of
Japan, such government would have been considered as one established by the Filipinos in insurrection or rebellion against the parent
state of the United States. And, as such, it would have been a de facto government similar to that organized by the confederate states
during the war of secession and recognized by the as such by the Supreme Court of the United States in numerous cases; and similar to
the short-lived government established by the Filipino insurgents in the Islands of Cebu during the Spanish-American war, recognized
as a de facto government by same court in the case of McCleod vs. United States (229 U. S., 416).

7.ID.; ID.; ID.; VALIDITY OF JUDICIAL ACTS AND PROCEEDINGS OF PHILIPPINE EXECUTIVE COMMISSION AND
REPUBLIC OF THE PHILIPPINES AFTER REOCCUPATION OF THE PHILIPPINES. The governments of the Philippine
Executive Commission and the Republic of the Philippines during Japanese military occupation being de facto governments, it
necessarily follows that the judicial acts and proceedings of the courts of justice of those governments, which are not of a political
complexion, were good and valid, and, by virtue of the well-known principle of postliminy (postliminium) in international law, remained
good and valid after the liberation or reoccupation of the Philippines by the American and Filipino forces under the leadership of
General Douglas MacArthur.
8.ID.; ID.; ID.; SCOPE OF PROCLAMATION OF GENERAL DOUGLAS MACARTHUR ANNULLING ALL "PROCESSES OF
ANY OTHER GOVERNMENT IN THE PHILIPPINE." The phrase "processes of any other government" is broad and may refer not
only to judicial processes, but also to administrative or legislative, as well as constitutional, processes of the Republic of the Philippines
of other governmental agencies established in the Islands during the Japanese occupation. Taking into consideration the fact that,
according to the well-known principles of international law all judgments and judicial proceedings, which are not of a political
complexion, of thede facto governments during the Japanese military occupation were good and valid before and remained so after the
occupied territory had come again into the power of the titular sovereign, it should be presumed that it was not, and could not have been,
the intention of General Douglas MacArthur, in using the phrase "processes of any other government" in said proclamation, to refer to
judicial processes, in violation of said principles of international law. The only reasonable construction of the said phrase is that it refers
to governmental processes other than judicial processes or court proceedings, for according to a well-known rule of statutory
construction, set forth in 25 R. C. L., p. 1028, "a statute ought never to be construed to violate the law of nations if any other possible
construction remains."
9.ID.; ID.; ID.; JURISDICTION OF COURTS OF COMMONWEALTH TO CONTINUE PROCEEDINGS IN ACTIONS
PENDING IN COURTS DURING JAPANESE MILITARY OCCUPATION. Although in theory the authority of the local civil and
judicial administration is suspended as a matter of course as soon as military occupation takes place, in practice the invader does not
usually take the administration of justice into his own hands, but continues the ordinary courts or tribunals to administer the laws of
the country which he is enjoined, unless absolutely prevented, to respect. Following this practice and the precepts of the law of nations,
the Commander in Chief of the Japanese forces proclaimed on January 3, 1943, when Manila was occupied, the military administration
under martial law over the territory occupied by the army, and ordered that "all the laws now in force in the Commonwealth, as well as
executive and judicial institutions, shall continue to be effective for the time being as in the past," and "all public officials shall remain in
their present post and carry on faithfully their duties as before." When the Philippine Executive Commission was organized by Order
No. 1 of the Japanese Commander in Chief, on January 23, 1943, the Chairman of the Executive Commission, by Executive Orders Nos.
1 and 4 of January 30 and February 5, respectively, continued the Supreme Court, Court of Appeals, Court of First Instance, and
justices of the peace courts, with the same jurisdiction, in conformity with the instructions given by the Commander in Chief of the
Imperial Japanese army in Order No.3 of February 20, 1942. And on October 14, 1943 when the so-called Republic of the Philippines
was inaugurated, the same courts were continued with no substantial change in the organization and jurisdiction thereof. If the
proceedings pending in the different courts of the Islands prior to the Japanese military occupation had been continued during the
Japanese military administration, the Philippine Executive Commission, and the so-called Republic of the Philippines, it stands to
reason the same courts, which become reestablished and conceived of as having been in continued existence upon the reoccupation and
liberation of the Philippines by virtue of the principle of postliminy (Hall, International Law, 7th ed., p. 526), may continue the
proceedings in cases then pending in said courts, without necessity of enacting a law conferring jurisdiction upon them to continue said
proceedings.

10.ID.; ID.; ID.; CONTINUITY OF LAW. It is a legal maxim that, excepting that of a political nature, "Law once established
continues until changed by some competent legislative power. It is not changed merely by chance of sovereignty." (Joseph H. Beale, Cases
on Conflict of Laws, III, Summary section 9, citing Commonwealthvs. Chapman, 13 Met., 68.) As the same author says, in his Treatise
on the Conflict of Laws (Cambridge, 1916, section 131): "There can be no break or interregnum in law. From the time the law comes into
existence with the first-felt corporateness of a primitive people it must last until the final disappearance of human society. Once created,
it persist until a change takes place, and when changed it continues in such changed condition until the next change, and so forever.
Conquest or colonization is impotent to bring law to amend; in spite of change of constitution, the law continues unchanged until the
new sovereign by legislative act creates a change." As courts are creatures of statutes and their existence depends upon that of the laws
which create and confer upon them their jurisdiction, it is evident that such laws, not being of a political nature, are not abrogated by a
change of sovereignty, and continues in force "ex proprio vigore" unless and until repealed by legislative acts. A proclamation that said
laws and courts are expressly continued is not necessary in order that they may continue in force. Such proclamation, if made, is but a
declaration of the intention of respecting and not repealing those laws. As a consequence, enabling laws or acts providing that
proceedings pending in one court be continued by or transferred to another court, are not required by the mere change of government or
sovereignty. They are necessary only in case the former courts are abolished or their jurisdiction so changed that they can no longer
continue taking cognizance of the cases and proceedings commenced therein, in order that the new courts or the courts having
jurisdiction over said cases may continue the proceedings.

DECISION

FERIA, J p:
This is a petition for mandamus in which petitioner prays that the respondent judge of the lower court be ordered to continue
the proceedings in civil case No. 3012 of said court, which were initialed under the regime of the so-called Republic of the Philippines
established during the Japanese military occupation of these Islands.
The respondent judge refused to take cognizance of and continue the proceedings in said case on the ground that the
proclamation issued on October 23, 1944, by General Douglas MacArthur had the effect of invalidating and nullifying all judicial
proceedings and judgments of the court of the Philippines under the Philippine Executive Commission and the Republic of the
Philippines established during the Japanese military occupation, and that, furthermore, the lower court courts have no jurisdiction to
take cognizance of and continue judicial proceedings pending in the courts of the defunct Republic of the Philippines in the absence of an
enabling law granting such authority. And the same respondent, in his answer and memorandum filed in this Court, contends that the
governments established in the Philippines during Japanese occupation were not de facto governments.
On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the next day their Commander in Chief
proclaimed "Military Administration, under martial law over the districts occupied by the Army." In said proclamation, it was also
provided that "so far as the Military Administration permits, all the laws now in force in the Commonwealth, as well as executive and
judicial institutions, shall continue to be effective for the time being as in the past," and "all public officials shall remain in their present
posts and carry on faithfully their duties as before."
A civil government or central administrative organization under the name of "Philippine Executive Commission" was
organized by Order No. 1 issued on January 23, 1942, by the Commander in Chief of the Japanese Forces in the Philippines, and Jorge
B. Vargas, who was appointed Chairman thereof, was instructed to proceed to the immediate coordination of the existing central
administrative organs and of judicial courts, based upon what had existed theretofore, with the approval of the said Commander in
Chief, who was to exercise jurisdiction over judicial courts.
The Chairman of the Executive Commission, as head of the central administrative organization, issued Executive Orders Nos.
1 and 4, dated January 30 and February 5, 1942, respectively, in which the Supreme Court, Court of Appeals, Courts of First Instance,
and the justices of the peace and municipal courts under the Commonwealth were continued with the same jurisdiction, in conformity
with the instructions given to the said Chairman of the Executive Commission by the Commander in Chief of Japanese Forces in the
Philippines in the latter's Order No. 3 of February 20, 1942, concerning basic principles to be observed by the Philippine Executive
Commission in exercising legislative, executive and judicial powers. Section 1 of said Order provided that "activities of the
administrative organs and judicial courts in the Philippines shall be based upon the existing statutes, orders, ordinances and
customs . . . "
On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but no substantial change was effected
thereby in the organization and jurisdiction of the different courts that functioned during the Philippine Executive Commission, and in
the laws they administered and enforced.
On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur issued a proclamation to the
People of the Philippines which declared:
"1.That the Government of the Commonwealth of the Philippines is, subject to the supreme authority of the
Government of the United States, the sole and only government having legal and valid jurisdiction over the people in
areas of the Philippines free of enemy occupation and control;
"2.That the laws now existing on the statute books of the Commonwealth of the Philippines and the
regulations promulgated pursuant thereto are in full force and effect and legally binding upon the people in areas of the
Philippines free of enemy occupation and control; and.
"3.That all laws, regulations and processes of any other government in the Philippines than that of the said
Commonwealth are null and void and without legal effect in areas of the Philippines free of enemy occupation and
control."
On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945, General Douglas MacArthur, on
behalf of the Government of United States, solemnly declared "the full powers and responsibilities under the Constitution restored to the
Commonwealth whose seat is here reestablished as provided by law."
In the light of these facts and events of contemporary history, the principal questions to be resolved in the present case may be
reduced to the following: (1) Whether the judicial acts and proceedings of the courts existing in the Philippines under the Philippine
Executive Commission and the Republic of the Philippines were good and valid and remained so even after the liberation or
reoccupation of the Philippines by the United States and Filipino forces; (2) Whether the proclamation issued on October 23, 1944, by
General Douglas MacArthur, Commander in Chief of United States Army, in which he declared "that all laws, regulations and processes

of any other government in the Philippines than that of the said Commonwealth are null and void and without legal effect in areas of the
Philippines free of enemy occupation and control," has invalidated all judgments and judicial acts and proceedings of the said courts;
and (3) If the said judicial acts and proceedings have not been invalidated by said proclamation, whether the present courts of the
Commonwealth, which were the same courts existing prior to, and continued during, the Japanese military occupation of the
Philippines, may continue those proceedings pending in said courts at the time the Philippines were reoccupied and liberated by the
United States and Filipino forces, and the Commonwealth of the Philippines was reestablished in the Islands.
We shall now proceed to consider the first question, that is, whether or not under the rules of international law the judicial
acts and proceedings of the courts established in the Philippines under the Philippine Executive Commission and the Republic of the
Philippines were good and valid and remained good and valid even after the liberation or reoccupation of the Philippines by the United
States and Filipino forces.
1.It is a legal truism in political and international law that all acts and proceedings of the legislative, executive, and judicial
department of a de facto government are good and valid. The question to be determined is whether or not the governments established in
these islands under the names of Philippine Executive Commission and Republic of the Philippines during the Japanese occupation or
regime were de facto governments. If they were, the judicial acts and proceedings of those governments remain good and valid even after
the liberation or reoccupation of the Philippines by the American and Filipino Forces.
There are several kinds of de facto governments. The first, or government de facto in a proper legal sense, is that government
that gets possession and control of, or usurps, by force or by the voice of the majority, the rightful legal government and maintains itself
against the will of the latter, such government of England under the Commonwealth, first by Parliament and later by Cromwell as
Protector. The second is that which is established and maintained by military forces who invade and occupy a territory of the enemy in
the course of war, and which is denominated a government of paramount force, as the cases of Castine, in Maine, which was reduced to
British possession in the war of 1812, and of Tampico, Mexico, occupied during the war with Mexico, by the troops of the United States.
And the third is that established as an independent government of the Southern Confederacy in revolt against the Union during the war
of secession. We are not concerned in the present case with the first kind, but only with the second and third kinds of de
facto governments.

Speaking of government "de facto" of the second kind, the Supreme Court of the United States, in the case of Thorington vs.
Smith (8 Wall., 1), said: "But there is another description of government, called also by publicists a government de facto, but which
might, perhaps, be more aptly denominated a government of paramount force. Its distinguishing characteristics are: (1), that its
existence is maintained by active military power within the territories, and against the rightful authority of an established and lawful
government; and (2), that while it exist it must necessarily be obeyed in civil matters by private citizens who, by acts of obedience
rendered in submission to such force, do not become responsible, as wrongdoers, for those acts, though not warranted by the laws of the
rightful government. Actual governments of this sort are established over districts differing greatly in extent and conditions. They are
usually administered directly by military force . . .. One example of this sort of government is found in the case of Castine, in Maine,
reduced to British possession in the war of 1812 . . .. U. S. vs. Rice (4 Wheaton, 253). A like example is found in the case of Tampico,
occupied during the war with Mexico, by the troops of the United States . . ..Fleming vs. Page ( Howard, 614). These were cases of
temporary possession of territory by lawful and regular governments at war with the country of which the territory so possessed was
part."
The powers and duties of de facto governments of this description are regulated in Section III of the Hague Conventions of
1907, which is a revision of the provisions of the Hague Conventions of 1899 on the same subject of Military Authority over Hostile
Territory. Article 43 of said Section III provides that "the authority of the legitimate power having actually passed into the hands of the
occupant, the latter shall take all steps in his power to reestablish and insure, as far as possible, public order and safety, while
respecting, unless absolutely prevented, the laws in force in the country."
According to these precepts of the Hague Conventions, as the belligerent occupant has the right and is burdened with the duty
to insure public order and safety during his military occupation, he possesses all the powers of a de facto government, and he can
suspend the old laws and promulgate new ones and make changes in the old as he may see fit, but he is enjoined to respect, unless
absolutely prevented by the circumstances prevailing in the occupied territory, the municipal laws in force which enforce public order
and regulate the social and commercial life of the country. On the other hand, laws of a political nature or affecting political relations,
such as, among others, the right of assembly, the right to bear arms, the freedom of the press, and the right to travel freely in the
territory occupied are considered as suspended or in abeyance during the military occupation. Although the local and civil
administration of justice is suspended as a matter of course as soon as a country is militarily occupied, it is not usual for the invader to
take the whole administration into his own hands. In practice, the local ordinary tribunals are authorized to continue administering
justice; and the judges and other judicial officers are kept in their post if they accept the authority of the belligerent occupant or are
required to continue in their positions under the supervision of the military or civil authorities appointed by the Commander in Chief of
the occupant. These principles and practice have the sanction of all publicists who have considered the subject, and have been asserted
by the Supreme Court and applied by the Presidents of the United States.

The doctrine upon this subject is thus summed up by Halleck, in his work on International Law (Vol. 2, p. 444): "The right of
one belligerent to occupy and govern the territory of the enemy while in its military possession, is one of the incidents of war, and flows
directly from the right to conquer. We, therefore, do not no look to the Constitution or political institutions of the conqueror, for authority
to establish a government for the territory of the enemy in his possession, during its military occupation, nor for the rules by which the
powers of such government are regulated and limited. Such authority and such rules are derived directly from the laws of war, as
established by the usage of the world, and confirmed by the writings of publicists and decisions of courts in fine, from the law of
nations . . .. The municipal laws of a conquered territory, or the laws which regulate private rights, continue in force during military
occupation, except so far as they are suspended or changed by the acts of the conqueror . . .. He, nevertheless, has all the powers of a de
facto government, and can at his pleasure either change the existing laws or make new ones."
And applying the principles for the exercise of military authority in an occupied territory, which were later embodied in the
said Hague Conventions, President McKinley, in his executive order to the Secretary of War of May 19, 1898, relating to the occupation
of the Philippines by the United States forces, said in part: "Though the powers of the military occupant are absolutely and supreme,
and immediately operate upon the political condition of the inhabitants, the municipal laws of the conquered territory, such as affect
private rights of person and property and provide for the punishment of crime, are considered as continuing in force, so far as they are
compatible with the new order of things, until they are suspended or superseded by the occupying belligerent; and in practice they are
not usually abrogated, but are allowed to remain in force and to be administered by the ordinary tribunals, substantially as they were
before the occupation. This enlightened practice is, so far as possible, to be adhered to on the present occasion. The judges and the other
officials connected with the administration of justice may, if they accept the authority of the United States, continue to administer the
ordinary law of the land as between man and man under the supervision of the American Commander in Chief." (Richardson's Messages
and Papers of President, X, p. 209.)
As to de facto government of the third kind, the Supreme Court of the United States, in the same case of Thorington vs.
Smith, supra, recognized the government set up by the Confederate States as a de facto government. In that case, it was held that "the
central government established for the insurgent States differed from the temporary governments at Castine and Tampico in the
circumstance that its authority did not originate in lawful acts of regular war; but it was not, on the account, less actual or less supreme.
And we think that it must be classed among the governments of which these are examples . . .."
In the case of Williams vs. Bruffy (96 U. S. 176., 192), the Supreme Court of the United States, discussing the validity of the
acts of the Confederate States, said: "The same general form of government, the same general laws for the administration of justice and
the protection of private rights, which had existed in the States prior to the rebellion, remained during its continuance and afterwards.
As far as the Acts of the States do not impair or tend to impair the supremacy of the national authority, or the just rights of citizens
under the Constitution, they are, in general, to be treated as valid and binding. As we said in Horn vs. Lockhart (17 Wall., 570; 21 Law.
ed., 657): "The existence of a state of insurrection and war did not loosen the bonds of society, or do away with civil government or the
regular administration of the laws. Order was to be preserved, police regulations maintained, crime prosecuted, property protected,
contracts enforced, marriages celebrated, estates settled, and the transfer and descent of property regulated, precisely as in the time of
peace. No one, that we are aware of, seriously questions the validity of judicial or legislative Acts in the insurrectionary States touching
these and kindred subjects, where they were not hostile in their purpose or mode of enforcement to the authority of National
Government, and did not impair the rights of citizens under the Constitution'. The same doctrine has been asserted in numerous other
cases."
And the same court, in the case of Baldy vs. Hunter (171 U. S., 388, 400), held: "That what occurred or was done in respect of
such matters under the authority of the laws of these local de facto governments should not be disregarded or held to be
invalid merely because those governments were organized in hostility to the Union established by the national Constitution; this,
because the existence of war between the United States and the Confederate States did not relieve those who were within the
insurrectionary lines from the necessity of civil obedience, nor destroy the bonds of society nor do away with civil government or the
regular administration of the laws, and because transactions in the ordinary course of civil society as organized within the enemy's
territory although they may have indirectly or remotely promoted the ends of the de facto or unlawful government organized to effect a
dissolution of the Union, were without blame 'except when proved to have been entered into with actual intent to further invasion or
insurrection;' and "That judicial and legislative acts in the respective states composing the so-called Confederate States should be
respected by the courts if they were not hostile in their purpose or mode of enforcement to the authority of the National Government,
and did not impair the rights of citizens under the Constitution."
In view of the foregoing, it is evident that the Philippine Executive Commission, which was organized by Order No. 1, issued on
January 23, 1942, by the Commander of the Japanese Forces, was a civil government established by the military forces of occupation
and therefore a de facto government of the second kind. It was not different from the government established by the British in Castine,
Maine, or by the United States in Tampico, Mexico. As Halleck says, "The government established over an enemy's territory during the
military occupation may exercise all the powers given by the laws of war to the conqueror over the conquered, and is subject to all
restrictions which that code imposes. It is of little consequence whether such government be called a military or civil government. Its
character is the same and the source of its authority the same. In either case it is a government imposed by the appellants of such
territory or the rest of the world, those laws alone determine the legality or illegality of its acts." (Vol. 2, p. 466.) The fact that the
Philippines Executive Commission was a civil and not a military government and was run by Filipinos and not by Japanese nationals, is
of no consequence. In 1806, when Napoleon occupied the greater part of Prussia, he retained the existing administration under the
general direction of a French official (Langfrey History of Napoleon, I IV, 25); and in the same way, the Duke of Wellington, on invading

France, authorized the local authorities to continue the exercise of their functions, apparently without appointing an English superior.
(Wellington Despatches, XI, 307.) The Germans, on the other hand, when they invaded France in 1870, appointed their own officials, at
least in Alsace and Lorraine, in every department of administration and of every rank. (Calvo, pars, 2186-93; Hall, International Law,
7th ed., p. 505, note 2.)

The so-called Republic of the Philippines, apparently established and organized as a sovereign state independent from any
other government by the Filipino people, was in truth and reality, a government established by the belligerent occupant or the Japanese
forces of occupation. It was of the same character as the Philippine Executive Commission, and the ultimate source of its authority was
the same the Japanese military authority and government. As General MacArthur stated in his proclamation of October 23, 1944, a
portion of which has been already quoted, under enemy duress, a so-called government styled as the 'Republic of the Philippines' was
established on October 14, 1943, based upon neither the free expression of the people's will nor the sanction of the Government of the
United States." Japan had no legal power to grant independence to the Philippines or transfer the sovereignty of, the Filipino people,
before its military occupation and possession of the Islands had matured into an absolute and permanent dominion or sovereignty by a
treaty of peace or other means recognized in the law of nations. For it is a well-established doctrine in international law, recognized in
Article 45 of the Hague Conventions of 1907 (which prohibits compulsion of the population of the occupied territory to swear allegiance
to the hostile power), that belligerent occupation, being essentially provisional, does not serve to transfer sovereignty over the territory
controlled although the de juregovernment is during the period of occupancy deprived of the power to exercise its rights as such. (Thirty
Hogshead of Sugar vs. Boyle, 9 Cranch, 191; United States vs. Rice, 4 Wheat., 246; Fleming vs. Page, 9 Howard, 603; Downes vs. Bidwell,
182 U. S., 345.) The formation of the Republic of the Philippines was a scheme contrived by Japan to delude the Filipino people into
believing in the apparent magnanimity of the Japanese gesture of transferring or turning over the rights of government into the hands
of Filipinos. It was established under the mistaken belief or at least the neutrality of the Filipino people in her war against the United
States and other allied nations.
Indeed, even if the Republic of the Philippines had been established by the free will of the Filipino people who, taking
advantage of the withdrawal of the American forces from the Islands, and the occupation thereof by the Japanese forces of invasion, had
organized and independent government under the name with the support and backing of Japan, such government would had been
considered as one established by the Filipinos in insurrection or rebellion against the parent state or the United States. And, as such, it
would had been a de facto government similar to that organized by the confederate states during the war of secession and recognized as
such by the Supreme Court of the United States in numerous cases, notably those of Thorington vs. Smith, Williams vs. Bruffy, and
Badly vs. Hunter, above quoted; and similar to the short-lived government established by the Filipino insurgents in the Islands of Cebu
during the Spanish-American war, recognized as de facto government by the Supreme Court of the United States in the case of Mc
Leod vs. United States (299 U. S., 416). According to the facts in the last-named case, the Spanish forces evacuated the Islands of Cebu
on December 25, 1898, having first appointed a provisional government, and shortly afterwards, the Filipinos, formerly in insurrection
against Spain, took possession of the Islands and established a republic, governing the Islands until possession thereof was surrendered
to the United States on February 22, 1898. And the said Supreme Court held in that case that "such government was of the class of de
facto government described in I Moore's International Law Digest, S 20, . . . 'called also by publicists a government de facto, but which
might, perhaps, be more aptly denominated a government de facto, but which might, perhaps, be more aptly denominated a government
of paramount force . . .'." That is to say, that the government of a country in possession of belligerent forces in insurrection or rebellion
against the parent state, rest upon the same principles as that of a territory occupied by the hostile army of an enemy at regular war
with the legitimate power.
The governments by the Philippine Executive Commission and the republic of the Philippines during the Japanese military
occupation being de facto governments, it necessarily follows that the judicial acts and proceedings of the courts of justice of those
governments, which are not of political complexion, were good and valid, and, by virtue of the well-known principle of postliminy
(postliminium) in international law, remained good and valid after the liberation or reoccupation of the Philippines by the American and
Filipino forces under the leadership of General Douglas McArthur. According to that well-known principle in international law, the fact
that a territory which has been occupied by an enemy comes again into the power of its legitimate government or sovereignty, "does not,
except in a very few cases, wipe out the effects of acts done by an invader, which for one reason or another it is within his competence to
do. Thus judicial acts done under his control, when they are not of a political complexion, administrative acts so done, to the extent that
they may take effect during the continuance of his control, and the various acts done during the same time by private persons under the
sanction of municipal law, remain good. Were it otherwise, the whole social life of a community would be paralyzed by an invasion; and
as between the state and individuals the evil would be scarcely less, it would be hard to example that payment of taxes made under
duress should be ignored, and it would be contrary to the general interest that sentences passed upon criminals should be annulled by
the disappearance of the intrusive government." (Hall, International Law, 7th ed., 518.) And when the occupation and the abandonment
have been each an incident of the same war as in the present case, postliminy applies, even though the occupant has acted as conqueror
and for the time substituted his own sovereignty, as the Japanese intended to do apparently in granting independence to the Philippines
and establishing the so-called Republic of the Philippines. (Taylor, International Law, p. 615.)
That not only judicial but also legislative acts of de facto governments, which are not of a political complexion, are and remain
valid after reoccupation of a territory occupied by a belligerent occupant, it confirmed by the Proclamation issued by General Douglas
McArthur on October 23, 1944, which declares null and void all laws, regulations and proceedings of the governments established in the

Philippines during Japanese occupation, for it would have been necessary for said proclamation to abrogate them if they were invalid ab
initio.
2.The second questions hinges upon the interpretation of the phrase "processes of any other government" as used in the abovequoted proclamation of General Douglas McArthur of October 23, 1944 that is, whether it was the intention of the Commander in
Chief of the American Forces to annul and avoid thereby all judgments and judicial proceedings of the courts established in the
Philippines during the Japanese military occupation.
The phrase "processes of any other government" is broad and may refer not only to judicial processes, but also to
administrative or legislative, as well as constitutional, processes of the Republic of the Philippines or other governmental agencies
established in the Islands during the Japanese occupation. Taking into consideration the fact, that as above indicated, according to the
well-known principles of international law all judgments and judicial proceedings, which are not of a political complexion, of the de
facto governments during the Japanese military occupation were good and valid before and remained so after the occupied territory had
come again into the power of the titular sovereign, it should be presumed that it was not, and could not have been, the intention of
General Douglas McArthur, in using the phrase "processes of any other government" in said proclamation, to refer to judicial processes
in violation of said principles of international law. The only reasonable construction of the said phrase is that it refers to governmental
processes other than judicial processes or court proceedings, for according to a well-known rule of statutory construction, set forth in 25
R. C., p. 1028, "a statute ought never to be construed to violate the law of nations if any other possible construction remains."
It is true that the commanding general of a belligerent army of occupation, as an agent of his government, may not unlawfully
suspend existing laws and promulgate new ones in the occupied territory, if and when the exigencies of the military occupation demand
such action. But even assuming that, under the law of nations, the legislative power of a commander in chief of military forces who
liberates or reoccupies his own territory which has been occupied by an enemy, during the military and before the restoration on the civil
regime, is as broad as that of the commander in chief of the military forces of invasion and occupation (although the exigencies of
military reoccupation are evidently less than those of occupation), it is to be presumed that General Douglas McArthur, who was acting
as an agent or a representative of the Government and the President of the United States, constitutional commander in chief of the
United States Army, did not intend to act against the principles of the law of nations asserted by the Supreme Court of the United
States from the early period of its existence, applied by the Presidents of the United States, and later embodied in the Hague Convention
of 1907, as above indicated. It is not to be presumed that General Douglas McArthur, who enjoined in the same proclamation of October
23, 1944, "upon the loyal citizens of the Philippines full respect and obedience to the Constitution of the Commonwealth of the
Philippines," should not only reverse the international policy and practice of his own government, but also disregard in the same breath
the provisions of section 3, Article II, of our Constitution, which provides that "The Philippines renounces war as an instrument of
national policy, and adopts the generally accepted principles of international law as part of the law of the Nation."

Moreover, from a contrary construction great inconvenience and public hardship would result, and great public interest would
be endangered and sacrificed, for disputes or suits already adjudged would have to be again settled, accrued or vested rights nullified,
sentences passed on criminal set aside, and criminals might easily become immune for evidence against them may have already
disappeared or be no longer available, especially now that almost all court records in the Philippines have been destroyed by fire as a
consequence of the war. And it is another well-established rule of statutory construction that where great inconvenience will result from
a particular construction, or great public interests would be endangered or sacrificed, or great mischief done, such construction is to be
avoided, or the court ought to presume that such construction was not intended by the makers of the law, unless required by clear and
unequivocal words. (25 R. C. L., pp. 1025, 1027.)
The mere conception or thought of possibility that the titular sovereign or his representatives who reoccupies a territory
occupied by an enemy, may set aside or annul all the judicial acts or proceedings of the tribunals which the belligerent occupant had the
right and duty to establish in order to insure public order and safety during military occupation, would be sufficient to paralyze the
social life of the country or occupied territory, for it would have to be expected that litigants would not willingly submit their litigation to
courts whose judgments or decisions may afterwards be annulled, and criminals would not be deterred from committing crimes or
offenses in the expectancy that they may escape the penalty if judgments rendered against them may be afterwards set aside.
That the proclamation has not invalidated all the judgments and proceedings of the courts of justice during the Japanese
regime, is impliedly confirmed by Executive Order No. 37, which has the force of law, issued by the President of the Philippines on March
10, 1945, by virtue of the emergency legislative power vested in him by the Constitution and the laws of the Commonwealth of the
Philippines. Said Executive Order abolished the Court of Appeals, and provided "that all cases which have heretofore been duly appealed
to the Court of Appeals shall be transmitted to the Supreme Court for final decision." This provision impliedly recognizes that the
judgments and proceedings of the courts during Japanese military occupation have not been invalidated by the proclamation of General
MacArthur of October 23, because the said Order does not say or refer to cases which had been duly appealed to said court prior to the
Japanese occupation, but to cases which had theretofore, that is, up to March 10, 1945, been duly appealed to the Court of Appeals; and
it is to be presumed that almost all, if not all, appealed cases pending in the Court of Appeals prior to the Japanese military occupation
of Manila on January 2, 1942, had been disposed of by the latter before the restoration of the Commonwealth Government in 1945; while
almost all, if not all, appealed cases pending on March 10, 1945 in the Court of Appeals were from judgments rendered by the Court of
First Instance during the Japanese regime.

The respondent judge quotes a portion of Wheaton's International Law which says: "Moreover when it is said that an
occupier's act are valid and under international law should not be abrogated by the subsequent conqueror, it must be remembered that
no crucial instances exist to show that if his acts should be reversed, any international wrong would committed. What does happen is
that most matters are allowed to stand by the restored government, but the matter can hardly be put further than this." (Wheaton,
International Law, War, 7th English edition of 1944, p. 245.) And from this quotation the respondent judge "draws the conclusion that
whether the acts of the occupant should be considered valid or not, is a question that is up to the restored government to decide; that
there is no rule of international law that denies to the restored government the right to exercise its discretion on the matter, imposing
upon it in its instead the obligation of recognizing and enforcing the acts of the overthrown government."
There is no doubt that the subsequent conqueror has the right to abrogate most of the acts of the occupier, such as the laws,
regulations and processes other than judicial of the government established by the belligerent occupant. But in view of the fact that the
proclamation uses the words "processes of any other government" and not judicial processes" precisely, it is not necessary to determine
whether or not General Douglas MacArthur had power to annul and set aside all judgments and proceedings of the courts during
Japanese occupation. The question to be determined is whether or not it was his intention, as representative of the President of the
United States, to avoid or nullify them. If the proclamation had, expressly or by necessary implication, declared null and void the judicial
processes of any other government, it would be necessary for this court to decide in the present case whether or not General Douglas
MacArthur had authority to declare, undoubtedly because the author thereof was fully aware of the limitations of his powers as
Commander in Chief of the Military Forces of liberation or subsequent conqueror.
Not only the Hague Regulations, but also the principles of international law, as they result from the usages established
between civilized nations, the laws of humanity and the requirements of the public conscience, constitute or form the law of nations.
Preamble of the Hague Conventions; Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of the Hague Regulations
or Conventions which we have already quoted in discussing the first question, imposes upon the occupant the to establish courts; and
Article 23 (h), section II, of the same Conventions, which prohibits the belligerent occupant "to declare . . . suspended . . . in a Court of
Law the rights and action of the nationals of the hostile party," forbids him to make any declaration preventing the inhabitants from
using their court to assert or enforce their civil rights. (Decision of the Court of Appeals of England in the case of Porter vs.
Fruedenburg, L. R. [1915], 1 K. B., 857.) If a belligerent occupant is required to establish courts of justice in the territory occupied, and
forbidden to prevent the nationals thereof from asserting or enforcing therein their civil rights, by necessary implication, the military
commander of the forces of liberation or the restored government is restrained from nullifying or setting aside the judgments rendered
by said courts in their litigation during the period of occupation. Otherwise, the purpose of these precepts of the Hague Conventions
would be thwarted, for to declare them null and void would be tantamount to suspending in said courts the rights and action of the
nationals of the territory during the military occupation thereof by the enemy. It goes without saying that a law that enjoins a person to
do something will not at the same time empower another to undo the same. Although the question whether the President or
commanding officer of the United States Army has violated restraints imposed by the constitution and laws of his country is obviously of
a domestic nature, yet, in construing and applying limitations imposed on the executive authority, the Supreme Court of the United
States, in the case of Ochoa vs. Hernandez (230 U. S., 139), has declared that they "arise from general rules of international law and
from fundamental principles known wherever the American flag flies."
In the case of Raymund vs. Thomas (91 U. S., 712), a special order issued by the officer in command of the forces of the United
States in South Carolina after the end of the Civil War, wholly annulling a decree rendered by a court of chancery in that State in a case
within its jurisdiction, was declared void, and not warranted by the acts approved respectively March 2, 1867 (14 Stat., 428), and July 19
of the same year (15 id., 14), which defined the powers and duties of military officers in command of the several states then lately in
rebellion. In the course of its decision the court said: "We have looked carefully through the acts of March 2, 1867 and July 19, 1867.
They give very large governmental powers to the military commanders designated, within the States committed respectively to their
jurisdiction; but we have found nothing to warrant the order here in question . . .. The clearest language would be necessary to satisfy us
that Congress intended that the power given by these acts should be so exercised . . ..It was an arbitrary stretch of authority, needful to
no good end that can be imagined. Whether Congress could have conferred the power to do such an act is a question we are not called
upon to consider. It is an unbending rule of law that the exercise of military power, where the rights of the citizens are concerned, shall
never be pushed beyond what the exigencies requires. (Mitchell vs. Harmony, 13 How., 115; Warden vs. Bailey, 4 Taunt., 67; Fabrigas vs.
Moysten, 1 Cowp., 161; s. c., 1 Smith's L. C., pt. 2, p. 934.) Viewing the subject before us from the standpoint indicated, we hold that the
order was void."
It is, therefor, evident that the proclamation of General MacArthur of October 23, 1944, which declared that "all laws,
regulations and processes of any other government in the Philippines than that of the said Commonwealth are null and void without
legal effect in areas of the Philippines free of enemy occupation and control," has not invalidated the judicial acts and proceedings, which
are not of political complexion, of the courts of justice in the Philippines that were continued by the Philippine Executive Commission
and the Republic of the Philippines during the Japanese military occupation, and that said judicial acts and proceedings were good and
valid before and are now good and valid after the reoccupation or liberation of the Philippines by the American and Filipino forces.

3.The third and last question is whether or not the courts of the Commonwealth, which are the same as those existing prior to,
and continued during, the Japanese military occupation by the Philippine Commission and by the so-called Republic of the Philippines,

have jurisdiction to continue now the proceedings in actions pending in said courts at the time the Philippine Islands were reoccupied or
liberated by the American and Filipino forces, and the Commonwealth Government was restored.
Although in theory the authority of the local civil and judicial administration is suspended as a matter of course as soon as
military occupation takes place, in practice the invader does not usually take the administration of justice into his own hands, but
continues the ordinary courts or tribunal to administer the laws of the country which he is enjoined, unless absolutely prevented, to
respect. As stated in the above-quoted Executive Order of President McKinley to the Secretary of War on May 19, 1898, "in practice, they
(the municipal laws) are not usually abrogated but are allowed to remain in force and to be administered by the ordinary tribunals
substantially as they were before the occupation. This enlightened practice is, so far as possible, to be adhered to on the present
occasion." And Taylor in this connection says: "From a theoretical point of view it may be said that the conqueror is armed with the right
to substitute his arbitrary will for all pre-existing forms of government, legislative, executive and judicial. From the stand-point of actual
practice such arbitrary will is restrained by the provision of the law of nations which compels the conqueror to continue local laws and
institutions so far as military necessity will permit." (Taylor, International Public Law, p. 596.) Undoubtedly, this practice has been
adopted in order that the ordinary pursuits and business of society may not be unnecessarily deranged, inasmuch as belligerent
occupation is essentially provisional, and the government established by the occupant of transient character.
Following these practice and precepts of the law of nations, the Commander in Chief of the Japanese Forces proclaimed on
January 3, 1945, when Manila was occupied, the military administration under martial law over the territory occupied by the army, and
ordered that "all the laws now in force in the Commonwealth, as well as executive and judicial institutions, shall continue to be effective
for the time being as in the past," and "all public officials shall remain in their present posts and carry on faithfully their duties as
before." When the Philippine Executive Commission was organized by Order No. 1 of the Japanese Commander in Chief, on January 23,
1942, the Chairman of the Executive Commission, by Executive Orders Nos. 1 and 4 of January 30 and February 5, respectively,
continued the Supreme Court, Court of Appeals, Court of First Instance, and justices of the peace courts, with the same jurisdiction, in
conformity with the instructions given by the Commander in Chief of the Imperial Japanese Army in Order No. 3 of February 20, 1942.
And October 14, 1943 when the so-called Republic of the Philippines was inaugurated, the same courts were continued with no
substantial change in the organization and jurisdiction thereof.
If the proceedings pending in the different courts of the Islands prior to the Japanese military occupation had been continued
during the Japanese military administration, the Philippine Executive Commission, and the so-called Republic of the Philippines, it
stands to reason that the same courts, which have become reestablished and conceived of as having been in continued existence upon the
reoccupation and liberation of the Philippines by virtue of the principle of postliminy (Hall, International Law, 7th ed., p. 516), may
continue the proceedings in cases then pending in said courts, without necessity of enacting a law conferring jurisdiction upon them to
continue said proceedings. As Taylor graphically points out in speaking of said principle "a state or other governmental entity, upon the
removal of a foreign military forces, resumes its old place with its right and duties substantially unimpaired . . .. Such political
resurrection is the result of a law analogous to that which enables elastic bodies to regain their original shape upon the removal of the
external force, and subject to the same exception in case of absolute crushing of the whole fibre and content." (Taylor, International
Public Law, p. 615.)
The argument advanced by the respondent judge in his resolution in support of his conclusion that the Court of First Instance
of Manila presided over by him "has no authority to take cognizance of, and continue said proceedings (of this case) to final judgment
until and unless the Government of the Commonwealth of the Philippines . . . shall have provided for the transfer of the jurisdiction of
the courts of the now defunct Republic of the Philippines, and the cases commenced and left pending therein," is "that said courts were
of a government alien to the Commonwealth Government. The laws they enforced were, true enough, laws of the Commonwealth prior to
Japanese occupation, but they had become the laws and the courts had become the institutions of Japan by adoption (U. S. vs.
Reiter, 27 F. Cases, No. 16146), as they became later on the laws and institutions of the Philippine Executive Commission and the
Republic of the Philippines."
The court in the said case of U. S. vs. Reiter did not and could not say that the laws and institutions of the country occupied, if
continued by the conqueror or occupant, become the laws and the courts, by adoption, of the sovereign nation that is militarily occupying
the territory. Because, as already shown, belligerent or military occupation is essentially provisional and does not serve to transfer the
sovereignty over the occupied territory to the occupant. What the court said was that, if such laws and institution are continued in use
by the occupant, they become his and derive their force from him, in the sense that he may continue or set them aside. The laws and
institutions or courts so continued remain the laws and institutions or courts of occupied territory. The laws and courts of the
Philippines, therefore, did not become, by being continued as required by the law of nations, laws and courts of Japan. The provision of
Article 45, section III, of the Hague Conventions of the 1907 which prohibits any compulsion of the population of occupied territory to
swear allegiance to the hostile power, "extends to prohibit everything which would assert or imply a change made by the invader in the
legitimate sovereignty. This duty is neither to innovate in the political life of the occupied districts, nor needlessly to break the
continuity of their legal life. Hence, so far as the courts of justice are allowed to continue administering the territorial laws, they must be
allowed to give their sentences in the name of the legitimate sovereign" (Westlake, Int. Law, Part II, second ed., p. 102). According to
Wheaton, however, the victor need not allow the use of that of the legitimate government. When in 1870, the Germans in France
attempted to violate that rule by ordering, after the fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name
of the "High German Powers occupying Alsace and Lorraine," upon the ground that the exercise of their powers in the name of the
French people and government was at least an implied recognition of the Republic, the courts refused to obey and suspended their

sitting. Germany originally ordered the use of the name of "High German Powers occupying Alsace and Lorraine," but later offered to
allow the use of the name of the Emperor or a compromise. (Wheaton, International Law, War, 7th English ed., of 1944, p. 244.)
Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established continues until changed by
some competent legislative power. It is not change merely by change of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III,
Summary Section 9, citing Commonwealth vs. Chapman, 13 Met., 68.) As the same author says, in his Treatise on the Conflict of Laws
(Cambridge, 1916, Section 131): "There can be no break or interregnum in law. From the time the law comes into existence with the
first-felt corporateness of a primitive people it must last until the final disappearance of human society. Once created, it persists until a
change takes place, and when changed it continues in such changed condition until the next change, and so forever. Conquest or
colonization is impotent to bring law to an end; in spite of change of constitution, the law continues unchanged until the new sovereign
by legislative act creates a change."
As court are creatures of statutes and their existence depends upon that of the laws which create and confer upon them their
jurisdiction, it is evident that such laws, not being of a political nature, are not abrogated by a change of sovereignty, and continue in
force "ex proprio vigore" unless and until repealed by legislative acts. A proclamation that said laws and courts are expressly continued
is not necessary in order that they may continue in force. Such proclamation, if made, is but a declaration of the intention of respecting
and not repealing those laws. Therefore, even assuming that Japan had legally acquired sovereignty over these Islands, which she had
afterwards transferred to the so-called Republic of the Philippines, and that the laws and the courts of these Islands had become the
court of Japan, as the said courts and the laws creating and conferring jurisdiction upon them have continued in force until now, it
necessarily follows that the same courts may continue exercising the same jurisdiction over cases pending therein before the restoration
of the Commonwealth Government, unless and until they are abolished or the laws creating and conferring jurisdiction upon them are
repealed by the said government.

As a consequence, enabling laws or acts providing that proceedings pending in one court be continued by or transferred to
another court, are not required by the mere change of government or sovereignty. They are necessary only in case the former courts are
abolished or their jurisdiction so changed that they can no longer continue taking cognizance of the cases and proceedings commenced
therein, in order that the new courts or the courts having jurisdiction over said cases may continue the proceedings. When the Spanish
sovereignty in the Philippines Islands ceased and the Islands came into the possession of the United States, the Audiencia" or Supreme
Court was continued and did not cease to exist, and proceeded to take cognizance of the actions pending therein upon the cessation of
the Spanish sovereignty until the said "Audiencia" or Supreme Court was abolished, and the Supreme Court created in Chapter II of Act
No. 136 was substituted in lieu thereof. And the Courts of First Instance of the Islands during the Spanish regime continued taking
cognizance of cases pending therein upon the change of sovereignty, until section 65 of the same Act No. 136 abolished them and created
in its Chapter IV the present Courts of First Instance in substitution of the former. Similarly, no enabling acts were enacted during the
Japanese occupation, but a mere proclamation or order that the courts in the Islands were continued.
On the other hand, during the American regime, when section 78 of Act No. 136 was enacted abolishing the civil jurisdiction of
the provost courts created by the military government of occupation in the Philippines during the Spanish-American war of 1898, the
same section 78 provided for the transfer of all civil actions then pending in the said provost courts to the proper tribunals, that is, to the
justices of the peace courts, Courts of First Instance, or Supreme Court having jurisdiction over them according to law. And later on,
when the criminal jurisdiction of provost courts in the City of Manila was abolished by section 3 of Act No. 186, the same section
provided that criminal cases pending therein within the jurisdiction of the municipal courts created by Act No. 183 were transferred to
the latter.
That the present courts are the same courts which had been functioning during the Japanese regime and, therefore, can
continue the proceedings in cases pending therein prior to the restoration of the Commonwealth of the Philippines, is confirmed by
Executive Order No. 37 which we have already quoted in support of our conclusion in connection with the second question. Said
Executive Order provides "(1) that the Court of Appeals, created and established under Commonwealth Act No. 3, as amended, be
abolished, as it is hereby abolished," and "(2) that all cases which have heretofore been duly appealed to the Court of Appeals shall be
transmitted to the Supreme Court for final decision. . . .". In so providing, the said Order considers that the Court of Appeals abolished
was the same that existed prior to, and continued after, the restoration of the Commonwealth Government; for, as we have stated in
discussing the previous question, almost all, if not all, of the cases pending therein, or which had theretofore (that is, up to March 10,
1945) been duly appealed to said court, must have been cases coming from the Courts of First Instance during the so-called Republic of
the Philippines. If the Court of Appeals abolished by the said Executive Order was not the same one which had been functioning during
the Republic, but that which had existed up to that time of the Japanese occupation, it would have provided that all the cases which had,
prior to and up to that occupation on January 2, 1942, been duly appealed to the said Court of Appeals shall be transmitted to the
Supreme Court for final decision.
It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment, the proceedings in cases, not of
political complexion, pending therein at the time of the restoration of the Commonwealth Government.

Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has jurisdiction to continue to
final judgment the proceedings in civil case No. 3012, which involves civil rights of the parties under the laws of the Commonwealth
Government, pending in said court at the time of the restoration of the said Government; and that the respondent judge of the court,
having refused to act and continue the said proceedings, which the law specifically enjoins him to do as a duty resulting from his office as
presiding judge of that court, mandamus is the speedy and adequate remedy in the ordinary course of law, especially taking into
consideration the fact that the question of jurisdiction herein involved does affect not only this particular case, but many other cases now
pending in all the courts of these Islands.
In view of all the foregoing, it is adjudged and decreed that a writ of a mandamus issue, directed to the respondent judge of the
Court of First Instance of Manila, ordering him to take cognizance of and continue to final judgment the proceedings in civil case No.
3012 of said court. No pronouncement as to costs. So ordered.
Moran, C.J., Ozaeta, Paras, Jarannila and Pablo, JJ., concur.

Separate Opinions
DE JOYA, J., concurring:
The principal question involved in this case is the validity of the proceedings held in civil case No. 3012, in the Court of First
Instance of the City of Manila, under the now defunct Philippine Republic, during Japanese occupation; and the effect on said
proceedings of the proclamation of General Douglas MacArthur, dated October 23, 1944. The decision of this question requires the
application of principles of International Law, in connection with the municipal law in force in this country, before and during Japanese
occupation.
Questions of International Law must be decided as matters of general awl (Juntington vs. Attril, 146 U. S., 657; 13 Sup. Ct.,
224; 36 Law. ed., 1123); and (International Law is no alien in this Tribunal, as, under the Constitution of the commonwealth of the
Philippines, it is a part of the fundamental law of the land) (Article II, section 3).
As International Law is an integral part of our laws, it must be ascertained and administered by this Court, whenever
questions of right depending upon it are presented for our determination, sitting as an international as well as a domestic Tribunal
(Kansas vs. Colorado, 184 U.S., 146; 22 Sup. Ct., 552; 46 Law. ed., 838).
Since International Law is a body of rules actually accepted by nations as regulating their mutual relations, the proof of the
existence of a given rule is to be found in the consent of nations to abide by that rule; and this consent is evidenced chiefly by the usages
and customs of nations, and to ascertain what these usages and customs are, the universal practice is to turn to the writings of
publicists and to the decisions of the highest courts of the 677; 20 Sup. Cit., 290; 44 Law. ed., 320).
But while usage is the older and original source of International Law, great international treaties are a later source of
increasing importance, such as The Hague Conventions of 1899 and 1907.
The Hague Convention of 1899, respecting laws and customs of war on land, expressly declares that:
army.
itself.

"ARTICLE XLII.Territory is considered occupied when it is actually placed under the authority of the hostile
"The occupation applies only to the territory where such authority is established, and in a position to assert

"ARTICLE XLIII.The authority of the legitimate power having actually passed into the hands of the occupant,
the latter shall take all steps in his power to reestablish and insure, as far as possible, public order and safety, while
respecting, unless absolutely prevented, the laws in force in the country." (32 Stat. II, 1821.)
The above provisions of The Hague Convention have been adopted by the nations giving adherence to them, among which is
the United States of America (32 Stat. II, 1821).
The commander in chief of the invading forces or military occupant may exercise governmental authority, but only when in
actual possession of the enemy's territory, and this-authority will be exercised upon principles of International Law (New Orleans vs.
Steamship Co. [1874], 20 Wall., 387; Kelly vs. Sanders [1878], 99 U. S., 441; MacLeod vs. U. S., 299 U. S., 416; 33 Sup. Ct., 955; 57 Law.
ed., 1260; II Oppenheim on International Law, section 167).
There can be no question that the Philippines was under Japanese military occupation, from January, 1942, up to the time of
the reconquest by the armed forces of the United States of the Island of Luzon, in February, 1945.
It will thus be readily seen that the civil laws of the invaded State continue in force, in so far as they do not affect the hostile
occupant unfavorably. The regular judicial Tribunals of the occupied territory continue to act in cases not affecting the military
occupation, and it is not usual for the invader to take the whole administration into his own hands, partly because it is easier to preserve
order through the agency of the native officials, and partly because the latter are more competent to administer the laws in force within
the territory, and the military occupant generally keeps in their posts such of the judicial and administrative officers as are willing to

serve under him, subjecting them only to supervision by the military authorities, or by superior civil authorities appointed by him.
(Young vs. U. S., 97 U. S., 39; 24 Law. ed., 992; Coleman vs. U. S., 229 U. S., 416; 33 Sup. Ct., 955; 57 Law. ed., 1260; Taylor on
International Law, sections 576, 578; Wilson on International Law, pp. 331-37; Hall on International Law, 6th Edition [1909], pp. 464,
465, 475, 476; Lawrence on International Law, pp. 331-37; Hall on International Law, 7th ed., pp. 412, 413; Davis, Elements of
International Law, 3d ed., pp. 330-332; 335; Holland on International Law, 2d ed., pp. 121-23.)

It is, therefore, evident that the establishment of the government under the so-called Philippine Republic, during Japanese
occupation, respecting the laws in force in the country, and permitting the local courts to function and administer such laws, as
proclaimed in the City of Manila, by the Commander in chief of the Japanese Imperial Forces, on January 3, 1942, was in accordance
with the rules and principles of International Law.
If the military occupant is thus in duty bound to establish in the territory under military occupation governmental agencies for
the preservation of peace and order and for the proper administration of justice, in accordance with the laws in force within said
territory, it must necessarily follow that the judicial proceedings conducted before the courts established by the military occupant must
be considered legal and valid, even after said government established by the military occupant has been displaced by the legitimate
government of the territory.
Thus the judgments rendered by the Confederate Courts, during the American Civil War, merely settling the rights of private
parties actually within their jurisdiction, not tending to defeat the legal rights of citizens of the United States, nor in furtherance of law
passed in aid of the rebellion, had been declared valid and binding (Cock vs. Oliver, 1 Woods, 437; Fed. Cas., Nos. 3, 164; Coleman vs.
Tennessee, 97 U. S., 509; 24 Law. ed., 118; Williams vs. Bruffy, 96 U. S., 176; Horn vs. Lockhart, 17 Wall., 570; Sprott vs. United States,
20 id., 459; Texas vs. White, 7 id., 700; Ketchum vs. Buckley [1878], 99 U.S., 188); and the judgment of a court of Georgia rendered in
November, 1861, for the purchase money of slaves was held valid judgment when entered, and enforceable in 1871 (French vs. Tumlin,
10 Am. Law. Reg. [N. S.], 641; Fed. Case, No. 5104).
Said judgments rendered by the courts of the states constituting the Confederate States of America were considered legal and
valid and enforceable, even after the termination of the American Civil War, because they had been rendered by the courts of a de
facto government. The Confederate States were a de facto government in the sense that its citizens were bound to render the government
obedience in civil matters, and did not become responsible, as wrong-doers, for such acts of obedience (Thorington vs. Smith, 8 Wall. [U.
S.], 9; 19 Law. ed., 361).
In the case of Ketchum vs. Buckley ([1878], 99 U. S., 188), the Court held "It is now settled law in this court that during the
late civil war the same general form of government, the same general law for the administration of justice and the protection of private
rights, which had existed in the States prior to the rebellion, remained during its continuance and afterwards. As far as the acts of the
States did not impair or tend to impair the supremacy of the national authority, or the just and legal rights of the citizens, under the
Constitution, they are in general to be treated as valid and binding." (Williams vs. Bruffy, 96 U. S., 176; Horn vs. Lockhart, 17 Wall., 570;
Sprott vs. United States, 20 id., 459; Texas vs. White, 7 id., 700.)
The government established in the Philippines, during Japanese occupation, would seem to fall under the following definition
of de facto government given by the Supreme Court of the United States:
"But there is another description of government, called also by publicists, a government de facto, but which
might, perhaps, be more aptly denominated a government of paramount force. Its distinguishing characteristics are (1)
that its existence is maintained by active military power within the territories, and against the rightful authority of an
established and lawful government; and (2) that while it exists it must necessarily be obeyed in civil matters by private
citizens who, by acts of obedience rendered in submission to such force, do not become responsible, as wrongdoers, for
those acts, though not warranted by the laws of the rightful government. Actual governments of this sort are
established over districts differing greatly in extent and conditions. They are usually administered directly by military
authority, but they may be administered, also, by civil authority, supported more or less directly by military force."
(Macleod vs. United States [1913], 229 U. S., 416.)
The government established in the Philippines, under the so- called Philippine Republic, during Japanese occupation, was and
should be considered as a de factogovernment; and that the judicial proceedings conducted before the courts which had been established
in this country, during said Japanese occupation, are to be considered legal and valid and enforceable, even after the liberation of this
country by the American forces, as long as the said judicial proceedings had been conducted, under the laws of the Commonwealth of the
Philippines.
The judicial proceedings involved in the case under consideration merely refer to the settlement of property rights, under the
provisions of the Civil Code, in force in this country under the Commonwealth government, before and during Japanese occupation.
Now, petitioner contends that the judicial proceedings in question are null and void, under the provisions of the proclamation
issued by General Douglas MacArthur, dated October 23, 1944; as said proclamation "nullifies all the laws, regulations and processes of
any other government in the Philippines than that of the Commonwealth of the Philippines."
In other words, petitioner demands a literal interpretation of said proclamation issued by General Douglas MacArthur, a
contention which, in our opinion, is untenable, as it would inevitably produce judicial chaos and uncertainties.
When an act is susceptible of two or more constructions, one of which will maintain and the others destroy it, the courts will
always adopt the former (U. S. vs. Coombs [1838], 12 Pet., 72; 9 Law. ed., 1004; Board of Supervisors of Granada Country vs. Brown
[1884], 112 U. S., 261; 28 Law. ed., 704; 5 Sup. Ct. Rep., 125; In reGuarina [1913], 24 Phil., 37; Fuentes vs. Director of Prisons [1924], 46

Phil., 22; Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385). The judiciary, always alive to the dictates of national welfare, can properly
incline the scales of its decisions in favor of that solution which will most effectively promote the public policy (Smith, Bell & Co., Ltd. vs.
Natividad [1919], 40 Phil., 136). All laws should receive a sensible construction. General terms should be so limited in their application
as not to lead to injustice, oppression or an absurd consequence. It will always, therefore, be presumed that the legislature intended
exceptions to its language, which would avoid results of this character. The reason of the law in such cases should prevail over its letter
(U. S. vs. Kirby, 7 Wall. [U. S.], 482; 19 Law. ed., 278; Church of Holy Trinity vs. U. S., 143 U. S., 461; 12 Sup. Ct., 511; 36 Law. ed., 226;
Jacobson vs. Massachusetts, 197 U. S., 39; 25 Sup. Ct., 358; 49 Law. ed., 643; 3 Ann. Cas., 765; In re Allen, 2 Phil., 630). The duty of the
court in construing a statute, which is reasonably susceptible of two constructions to adopt that which saves its constitutionality,
includes the duty of avoiding a construction which raises grave and doubtful constitutional questions, if it can be avoided (U. S. vs.
Delaware & Hudson Co., 213 U. S., 366; 29 Sup. Ct., 527; 53 Law. ed., 836).
According to the rules and principles of International Law, and the legal doctrines cited above, the judicial proceedings
conducted before the courts of justice, established here during Japanese military occupation, merely applying the municipal law of the
territory, such as the provisions of our Civil Code, which have no political or military significance, should be considered legal, valid and
binding.
It is to be presumed that General Douglas MacArthur is familiar with said rules and principles, as International Law is an
integral part of the fundamental law of the land, in accordance with the provisions of the Constitution of the United States. And it is
also to be presumed that General MacArthur has acted, in accordance with said rules and principles of International Law, which have
been sanctioned by the Supreme Court of the United States, as the nullification of all judicial proceedings conducted before our courts,
during Japanese occupation, would lead to injustice and absurd results, and would be highly detrimental to public interests.
For the foregoing reasons, I concur in the majority opinion.
PERFECTO, J., dissenting:
Law must be obeyed. To keep the bonds of society, it must not be evaded. On its supremacy depends the stability of states and
nations. No government can prevail without it. The preservation of the human race itself hinges on law.
Since time immemorial, man has relied on law as an essential means of attaining his purposes, his objectives, his mission in
life. More than twenty-two centuries before the Christian Era, on orders of the Assyrian King Hammurabi, the first known code was
engraved in black diorite with cuneiform characters. Nine centuries later Emperor Hung Wu, in the cradle of the most ancient
civilization, compiled the Code of the Great Ming. The laws of Manu were written in the vedic India. Moses received at Sinai the ten
commandments. Draco, Lycurgus, Solon made laws in Greece. Even ruthless Jengiskhan used laws to keep discipline among the nomad
hordes with which he conquered the greater part of the European and Asiatic continents.
Animal and plant species must follow the mendelian heredity rules and other biological laws to survive. Thanks to them, the
chalk cliffs of the infusoria show the marvel of an animal so tiny as to be imperceptible to the naked eye creating a whole mountain.
Even the inorganic world has to conform to law. Planets and stars follow the laws discovered by Kepler, known as the law-maker of
heavens. If, endowed with rebellious spirit, they should happen to challenge the law of universal gravity, the immediate result would be
cosmic chaos. The tiny and twinkling points of light set above us on the velvet darkness of the night will cease to inspire us with dreams
of more beautiful and happier worlds.

ignore it?

Again we are called upon to do our duty. Here is a law that we must apply. Shall we shrink? Shall we circumvent it? Can we

The laws enacted by the legislators shall be useless if courts are not ready to apply them. It is actual application to real issues
which gives laws the breath of life.
In the varied and confused market of human endeavor there are so many things that might induce us to forget the elementals.
There are so many events, so many problems, so many preoccupations that are pushing among themselves to attract our attention, and
we might miss the nearest and most familiar things, like the man who went around his house to look for a pencil perched on one of his
ears.
THE OCTOBER PROCLAMATION
In October, 1944, the American Armed Forces of Liberation landed successfully in Leyte.
When victory in the island was accomplished, after the most amazing and spectacular war operations, General of the Army
Douglas MacArthur, as Commander in Chief of the American Army, decided to reestablish, in behalf of the United States, the
Commonwealth Government.
Then he was confronted with the question as to what policy to adopt in regards to the official acts of the governments
established in the Philippines by the Japanese regime. He might have thought of recognizing the validity of some of said acts, but,
certainly, there were acts which he should declare null and void, whether against the policies of the American Government, whether
inconsistent with military strategy and operations, whether inconsistent with military strategy and operations, whether detrimental to
the interests of the American or Filipino peoples, whether for any other strong or valid reasons.
But, which to recognize, and which not? He was not in a position to gather enough information for a safe basis to distinguish
and classify which acts must be nullified, and which must be validated. At the same time he had to take immediate action. More
pressing military matters were requiring his immediate attention. He followed the safer course: to nullify all the legislative, executive,

and judicial acts and processes under the Japanese regime. After all, when the Commonwealth Government is already functioning, with
proper information, he will be in a position to declare by law, through its Congress, which acts and processes must be revived and
validated in the public interest.
So on October 23, 1944, the Commander in Chief issued the following proclamation:
"GENERAL HEADQUARTERS
"SOUTHWEST PACIFIC AREA

"OFFICE OF THE COMMANDER IN CHIEF


"PROCLAMATION
"To the People of the Philippines:
"WHEREAS the military forces under my command have landed in Philippine soil as a prelude to the
liberation of the entire territory of the Philippines; and
"WHEREAS the seat of the Government of the Commonwealth of the Philippines has been re-established in
the Philippines under President Sergio Osmea and the members of his cabinet; and
"WHEREAS, under enemy duress, a so-called government styled as the 'Republic of the Philippines' was
established on October 14, 1943, based upon neither the free expression of the people's will nor the sanction of the
Government of the United States, and is purporting to exercise Executive, Judicial and Legislative powers of
government over the people;
"Now, therefore, I, Douglas MacArthur, General, United States Army, as Commander in Chief of the military
forces committed to the liberation of the Philippines, do hereby proclaim and declare:
"1.That the Government of the Commonwealth of the Philippines is, subject to the supreme
authority of the Government of the United States, the sole and only government having legal and valid
jurisdiction over the people in areas of the Philippines free of enemy occupation and control;
"2.That the laws now existing on the statute books of the Commonwealth of the Philippines and the
regulations promulgated pursuant thereto are in full force and effect and legally binding upon the people in
areas of the Philippines free of enemy occupation and control; and
"3.That all laws, regulations and processes of any other government in the Philippines than that of
the said Commonwealth are null and void and without legal effect in areas of the Philippines free of enemy
occupation and control; and
"I do hereby announce my purpose progressively to restore and extend to the people of the Philippines the
sacred right of government by constitutional process under the regularly constituted Commonwealth Government as
rapidly as the several occupied areas are liberated and the military situation will otherwise permit;
"I do enjoin upon all loyal citizens of the Philippines full respect for and obedience to the Constitution of the
Commonwealth of the Philippines and the laws, regulations and other acts of their duty constituted government whose
seat is now firmly re-established on Philippine soil.
"October 23, 1944.
"DOUGLAS MACARTHUR
"General, U. S. Army
"Commander in Chief"

IS THE OCTOBER PROCLAMATION A LAW?


In times of war the Commander in Chief of an army is vested with extraordinary inherent powers, as a natural result of the
nature of the military operations aimed to achieve the purposes of his country in the war, victory being paramount among them.
Said Commander in Chief may establish in the occupied or reoccupied territory, under his control, a complete system of
government; he may appoint officers and employees to manage the affairs of said government; he may issue proclamations, instructions,
orders, all with the full force of laws enacted by a duly constituted legislature; he may set the policies that should be followed by the
public administration organized by him; he may abolish the said agencies. In fact, he is the supreme ruler and law-maker of the territory
under his control, with powers limited only by the receipts of the fundamental laws of his country.

"California, or the port of San Francisco, had been conquered by the arms of the United States as early as
1846. Shortly afterward the United States had military possession of all upper California. Early in 1847 the President,
as constitutional commander in chief of the army and navy, authorized the military and naval commander of our forces
in California to exercise the belligerent rights of a conqueror, and to form a civil government for the conquered country,
and to impose duties on imports and tonnage as military contributions for the support of the government, and of the
army which has the conquest in possession. . . ." (Cross vs. Harrison, 16 Howard, 164, 189.)
"In May, 1862, after the capture of New Orleans by the United States Army, General Butler, then in command
of the army at that place, issued a general order appointing Major J. M. Bell, volunteer aide-de-camp, of the division
staff, provost judge of the city, and directed that he should be obeyed and respected accordingly. The same order
appointed Capt. J. H. French provost marshal of the city, and Capt. Stafford deputy provost marshal. A few days after
this order the Union Bank lent to the plaintiffs the sum of $130,000, and subsequently, the loan not having been repaid,
brought suit before the provost judge to recover the debt. The defense was taken that the judge had no jurisdiction over
civil cases, but judgment was given against the borrowers, and they paid the money under protest. To recover it back is
the object of the present suit, and the contention of the plaintiffs is that the judgment was illegal and void, because the
Provost Court had no jurisdiction of the case. The judgment of the District Court was against the plaintiffs, and this
judgment was affirmed by the Supreme Court of the State. To this affirmance error is now assigned.
"The argument of the plaintiffs in error is that the establishment of the Provost Court, the appointment of the
judge, and his action as such in the case brought by the Union Bank against them were invalid, because in violation of
the Constitution of the United States, which vests the judicial power of the General government in one Supreme Court
and in such inferior courts as Congress may from time to time ordain and establish, and that under this constitutional
provision they were entitled to immunity from any liability imposed by the judgment of the Provost Court. Thus, it is
claimed, a Federal question is presented, and the highest court of the State having decided against the immunity
claimed, our jurisdiction is invoked.
"Assuming that the case is thus brought within our right to review it, the controlling question is whether the
commanding general of the army which captured New Orleans and held it in May, 1862, had authority after the capture
of the city to establish a court and appoint a judge with power to try and adjudicate civil causes. Did the Constitution of
the United States prevent the creation of civil courts in captured districts during the war of the rebellion, and their
creation by military authority?
"This cannot be said to be an open question. The subject came under consideration by this court in The
Grapeshot, where it was decided that when, during the late civil war, portions of the insurgent territory were occupied
by the National forces, it was within the constitutional authority of the President, as commander in chief, to establish
therein provisional courts for the hearing and determination of all causes arising under the laws of the States or of the
United States, and it was ruled that a court instituted by President Lincoln for the State of Louisiana, with authority
to hear, try, and determine civil causes, was lawfully authorized to exercise such jurisdiction. Its establishment by
military authority was held to be no violation of the constitutional provision that 'the judicial power of the United
States shall be vested in one Supreme Court and in such inferior courts as the Congress may from time to time ordain
and establish.' That clause of the Constitution has no application to the abnormal condition of conquered territory in
the occupancy of the conquering army. It refers only to courts of the United States, which military courts are not. As
was said in the opinion of the court, delivered by Chief Justice Chase, in The Grapeshot, 'It became the duty of the
National government, wherever the insurgent power was overthrown, and the territory which had been dominated by it
was occupied by the National forces, to provide, as far as possible, so long as the war continued, for the security of
persons and property and for the administration of justice. The duty of the National government in this respect was no
other than that which devolves upon a regular belligerent, occupying during war the territory of another belligerent. It
was a military duty, to be performed by the President, as Commander in Chief, and intrusted as such with the direction
of the military force by which the occupation was held.'

"Thus it has been determined that the power to establish by military authority courts for the administration
of civil as well as criminal justice in portions of the insurgent States occupied by the National forces, is precisely the
same as that which exists when foreign territory has been conquered and is occupied by the conquerors. What that
power is has several times been considered. In Leitensdorfer & Houghton vs. Webb, may be found a notable illustration.
Upon the conquest of New Mexico, in 1846, the commanding officer of the conquering army, in virtue of the power of
conquest and occupancy, and with the sanction and authority of the President, ordained a provisional government for
the country. The ordinance created courts, with both civil and criminal jurisdiction. It did not undertake to change the
municipal laws of the territory, but it established a judicial system with a superior or appellate court, and with circuit
courts, the jurisdiction of which was declared to embrace, first, all criminal causes that should not otherwise be
provided for by law; and secondly, original and exclusive cognizance of all civil cases not cognizable before the prefects
and alcaldes. But though these courts and this judicial system were established by the military authority of the United
States, without any legislation of Congress, this court ruled that they were lawfully established. And there was no
express order for their establishment emanating from the President or the Commander in Chief. The ordinance was the
act of General Kearney, the commanding officer of the army occupying the conquered territory.
"In view of these decisions it is not to be questioned that the Constitution did not prohibit the creation by
military authority of courts for the trial of civil causes during the civil war in conquered portions of the insurgent

States. The establishment of such courts is but the exercise of the ordinary rights of conquest. The plaintiffs in error,
therefore, had no constitutional immunity against subjection to the judgments of such courts. They argue, however,
that if this be conceded, still General Butler had no authority to establish such a court; that the President alone, as
Commander in Chief, had such authority. We do not concur in this view. General Butler was in command of the
conquering and occupying army. He was commissioned to carry on the war in Louisiana. He was, therefore, invested
with all the powers of making war, except so far as they were denied to him by the Commander in Chief, and among
these powers, as we have seen, was that of establishing courts in conquered territory. It must be presumed that he
acted under the orders of his superior officer, the President, and that his acts, in the prosecution of the war, were the
acts of his commander in chief." (Mechanics' etc. Bank vs. Union Bank, 89 U. S. [22 Wall.], 276-298.)
There is no question, therefore, that when General of the Army Douglas MacArthur issued the October Proclamation, he did it
in the legitimate exercise of his powers. He did it as the official representative of the supreme authority of the United States of America.
Consequently, said proclamation is legal, valid, and binding.
Said proclamation has the full force of a law. In fact, of a paramount law. Having been issued in the exercise of the American
sovereignty, in case of conflict, it can even supersede, not only the ordinary laws of the Commonwealth of the Philippines, but also our
Constitution itself while we remain under the American flag.
"PROCESSES" IN THE OCTOBER PROCLAMATION
In the third section of the dispositive part of the October Proclamation, it is declared that all laws, regulations, and processes
of any other government in the Philippines than that of the Commonwealth, are null and void.
Does the word "processes" used in the proclamation include judicial processes?
In its broadest sense, process is synonymous with proceedings or procedures and embraces all the steps and proceedings in a
judicial cause from its commencement to its conclusion.
"PROCESS.In Practice. The means of compelling a defendant to appear in court after suing out the
original writ, in civil, and after indictment, in criminal cases.
"The method taken by law to compel a compliance with the original writ or command as of the court.
"A writ, warrant, subpoena, or other formal writing issued by authority of law; also the means of
accomplishing an end, including judicial proceedings; Gollobitchvs. Rainbow, 84 Ia., 567; 51 N. W., 48; the means or
method pointed out by a statute, or used to acquire jurisdiction of the defendants, whether by writ or notice. Wilson vs.
R. Co. (108 Mo., 588; 18 S. W., 286; 32 Am. St. Rep., 624)." (3 Bouvier's Law Dictionary, p. 2731.)
"A.Process generally.1.Definition. As a legal term, process is a generic word of very comprehensive
signification and many meanings. In its broadest sense it is equivalent to, or synonymous with, 'proceedings' or
'procedure,' and embraces all the steps and proceedings in a cause from its commencement to its conclusion. Sometimes
the term is also broadly defined as the means whereby a court compels a compliance with its demands. 'Process' and
'writ' or 'writs' are synonymous in the sense that every writ is a process, and in a narrow sense of the term 'process' is
limited to judicial writs in an action, or at least to writs or writings issued from or out of a court, under the seal thereof,
and returnable thereto; but it is not always necessary to construe the term so strictly as to limit it to a writ issued by a
court in the exercise of its ordinary jurisdiction; the term is sometimes defined as a writ or other formal writing issued
by authority of law or by some court, body, or official having authority to issue it; and it is frequently used to designate
a means, by writ or otherwise, or acquiring jurisdiction of defendant or his property, or of bringing defendant into, or
compelling him to appear in, court to answer.
"As employed in statutes the legal meaning of the word 'process' varies according to the context, subject
matter, and spirit of the statute in which it occurs. In some jurisdictions codes or statutes variously define 'process' as
signifying or including: A writ or summons issued in the course of judicial proceedings; all writs, warrants, summonses,
and orders of courts of justice or judicial officers; or any writ, declaration, summons, order, or subpoena whereby any
action, suit, or proceeding shall be commenced, or which shall be issued in or upon any action, suit or proceeding. (50 C.
J., pp. 441, 442.)
"The definition of 'process' given by Lord Coke comprehends any lawful warrant, authority, or proceeding by
which a man may be arrested. He says: 'Process of law is twofold, namely, by the King's writ, or by due proceeding and
warrant, either in deed or in law, without writ.' (People vs. Nevins [N. Y.], 1 Hill, 154, 169, 170; State vs. Shaw, 50 A.,
863, 869; 73 Vt., 149.)
"Baron Comyn says that process, in a large acceptance, comprehends the whole proceedings after the original
and before judgment; but generally it imports the writs which issue out of any court to bring the party to answer, or for
doing execution, and all process out of the King's courts ought to be in the name of the King. It is called 'process'
because it proceeds or goes out upon former matter, either original or judicial. Gilmer vs. Bird, 15 Fla., 410, 421." (34
Words and Phrases, permanent edition, 1940 edition, p. 147.)
"In a broad sense the word 'process' includes the means whereby a court compels the appearance of the
defendant before it, or a compliance with its demands, and any and every writ, rule, order, notice, or decree, including
any process of execution that may issue in or upon any action, suit, or legal proceedings, and is not restricted to mesne
process. In a narrow or restricted sense it means those mandates of the court intending to bring parties into court or to

require them to answer proceedings there pending. Colquitt Nat. Bank vs. Poitivint, 83 S. E., 198, 199; 15 Ga. App.,
329." (34 Words and Phrases, permanent edition, 1940 edition, p. 148.)
"A 'process' is an instrument in an epistolary form running in the name of the sovereign of a state and issued
out of a court of justice, or by a judge thereof, at the commencement of an action or at any time during its progress or
incident thereto, usually under seal of the court, duly attested and directed to some municipal officer or to the party to
be bound by it, commanding the commission of some act at or within a specified time, or prohibiting the doing of some
act. The cardinal requisites are that the instrument issue from a court of justice, or a judge thereof; that it run in the
name of the sovereign of the state; that it be duly attested, but not necessarily by the judge, though usually, but not
always, under seal; and that it be directed to some one commanding or prohibiting the commission of an act. Watsonvs.
Keystone Ironworks Co., 74 P., 272, 273; 70 Kan., 43." (34 Words and Phrases, permanent edition, 1940 edition, p. 148.)
"Jacobs in his Law Dictionary says: 'Process' has two qualifications: First, it is largely taken for all the
proceedings in any action or prosecution, real or personal, civil or criminal, from the beginning to the end; secondly,
that is termed the 'process' by which a man is called into any temporal court, because the beginning or principal part
thereof, by which the rest is directed or taken. Strictly, it is the proceeding after the original, before judgment. A policy
of fire insurance contained the condition that if the property shall be sold or transferred, or any change takes place in
the title or possession, whether by legal process or judicial decree or voluntary transfer or convenience, then and in very
such case the policy shall be void. The term 'legal process,' as used in the policy, means what is known as a writ; and, as
attachment or execution on the writs are usually employed to effect a change of title to property, they are or are
amongst the processes contemplated by the policy. The words 'legal process' mean all the proceedings in an action or
proceeding. They would necessarily embrace the decree, which ordinarily includes the proceedings. Perryvs. Lorillard
Fire Ins. Co., N. Y., 6 Lans., 201, 204. See also, Tipton vs. Cordova, 1 N. M., 383, 385." (34 Words and Phrases,
permanent edition, 1940 edition, p. 148.)

"'Process' in a large acceptation, is nearly synonymous with 'proceedings,' and means the entire proceedings
in an action, from the beginning to the end. In a stricter sense, it is applied to the several judicial writs issued in an
action. Hanna vs. Russell, 12 Minn., 80, 86 (Gil., 43, 45)." (34 Words and Phrases, permanent edition, 1940 edition,
149.)
"The term 'process' as commonly applied, intends that proceeding by which a party is called into court, but it
has a more enlarged signification, and covers all the proceedings in a court, from the beginning to the end of the suit;
and, in this view, all proceedings which may be had to bring testimony into court, whether viva voce or in writing, may
be considered the process of the court. Rich vs. Trimble, Vt., 2 Tyler, 349, 350." Id.
"'Process' in its broadest sense comprehends all proceedings to the accomplishment of an end, including
judicial proceedings. Frequently its signification is limited to the means of bringing a party into court. In the
Constitution process which at the common law would have run in the name of the king is intended. In the Code process
issued from a court is meant. Mc Kenna vs. Cooper, 101 P., 662, 663; 79 Kan., 847, quoting Hanna vs. Russel, 12 Minn.,
80. (Gil., 43); Black Com. 279; Bouv. law Dict." (34 Words and Phrases, permanent edition, 1940 edition, p. 149.)
"'Judicial process' includes the mandate of a court to its officers, and a means whereby courts compel the
appearance of parties, or compliance with its commands, and includes a summons. Ex parte Hill, 51 So., 786, 787; 165
Ala., 365.
"'Judicial process' comprehends all the acts of the court from the beginning of the proceeding to its end, and in
a narrower sense is the means of compelling a defendant to appear in court after suing out the original writ in civil
cases and after the indictment in criminal cases, and in every sense is the act of the court and includes any means of
acquiring jurisdiction and includes attachment, garnishment, or execution, and also a writ. Blair vs. Maxbass Security
Bank of Maxbass, 176 N. W., 98, 100; 44 N. D. 12." (23 Words and Phrases, permanent edition, 1940 edition, p. 328.)
There is no question that the word process, as used in the October Proclamation, includes all judicial processes or proceedings.
The intention of the author of the proclamation of including judicial processes appears clearly in the preamble of the
document.
The second "Whereas," states that a so-called government styled as the "Republic of the Philippines," based upon neither the
free expression of the people's will nor the sanction of the Government of the United States, and is "purporting to exercise Executive,
Judicial, and Legislative powers of government over the people."
It is evident from the above-mentioned words that it was the purpose of General MacArthur to declare null and void all acts of
government under the Japanese regime, and he used, in section 3 of the dispositive part, the word laws, as pertaining to the legislative
branch, the word regulations, as pertaining to the executive branch, and lastly, the word processes, as pertaining to the judicial branch
of the government which functioned under the Japanese regime.
It is reasonable to assume that he might include in the word "processes," besides those of judicial character, those of executive
or administrative character. At any rate, judicial processes cannot be excluded.

THE WORDS OF THE PROCLAMATION EXPRESS UNMISTAKABLY


THE INTENTION OF THE AUTHOR

The October Proclamation is written in such a way that it is impossible to make a mistake as to the intention of its author.
Oliver Wendell Holmes, perhaps the wisest man who had ever sat in the Supreme Court of the United States, stated the
following:
"When the words in their literal sense have a plain meaning, courts must be very cautious in allowing their
imagination to give them a different one." Guild vs. Walter, 182 Mass., 225, 226 (1902).
Upon questions of construction when arbitrary rule is involved, it is always more important to consider the
words and the circumstances than even strong analogies in earlier decisions. The successive neglect of a series of small
distinctions, in the effort to follow precedent, is very liable to end in perverting instruments from their plain meaning.
In no other branch of the law (trusts) is so much discretion required in dealing with authority. . . . There is a strong
presumption in favor of giving them words their natural meaning, and against reading them as if they said something
else, which they are not fitted to express." Merrill vs. Preston, 135 Mass., 451, 455 (1883).
When the words of an instrument are free from ambiguity and doubt, and express plainly, clearly and distinctly the sense of
the framer, there is no occasion to resort to other means of interpretation. It is not allowable to interpret what needs no interpretation.
Very strong expressions have been used by the courts to emphasize the principle that they are to derive their knowledge of the
legislative intention from the words or language of the statute itself which the legislature has used to express it. The language of a
statute is its most natural guide. We are not at liberty to imagine an intent and bind the letter to that intent.
The Supreme Court of the United States said: "The primary and general rule of statutory construction is that the intent of the
law- maker is to be found in the language that he has used. He is presumed to know the meaning of words and the rules of grammar.
The courts have no function of legislation, and simply seek to ascertain the will of the legislator. It is true that there are cases in which
the letter of the statute is not deemed controlling, but the cases are few and exceptional, and only arise where there are cogent reasons
for believing that the letter does not fully and accurately disclose the intent. No mere omission, no mere failure to provide for
contingencies, which it may seem wise should have specifically provided for will justify any judicial addition to the language of the
statute." (United States vs. Goldenberg, 168 U. S., 95, 102, 103; 18 S. C. Rep., 3; 42 Law. ed., 394.)
That the Government of the Commonwealth of the Philippines shall be the sole and only government in our country; that our
laws are in full force and effect and legally binding; that "all laws, regulations and processes of any other government are null and void
and without legal effect", are provisions clearly, distinctly, unmistakably expressed in the October Proclamation, as to which there is no
possibility of error, and there is absolutely no reason in trying to find different meanings of the plain words employed in the document.
As we have already seen, the annulled processes are precisely judicial processes, procedures and proceedings, including the
one which is under our consideration.
THE OCTOBER PROCLAMATION ESTABLISHES A CLEAR POLICY
Although, as we have already stated, there is no possible mistakes as to the meaning of the words employed in the October
Proclamation, and the text of the document expresses, in clear-cut sentences, the true purposes of its author, it might not be amiss to
state here what was the policy intended to be established by said proclamation.
It is a matter of judicial knowledge that in the global war just ended on September 2, 1945, by the signatures on the document
of unconditional surrender affixed by representatives of the Japanese government, the belligerents on both sides resorted to what we
may call war weapons of psychological character.
So Japan, since its military forces occupied Manila, had waged an intensive campaign of propaganda, intended to destroy the
faith of the Filipino people in America, to wipe out all manifestations of American or occidental civilization, to create interest in all
things Japanese, which the imperial officers tried to present as the acme of oriental culture, and to arouse racial prejudice among
orientals and occidentals, to induce the Filipinos to rally to the cause of Japan, which she tried to make us believe is the cause of the
inhabitants of all East Asia.
It is, then, natural that General MacArthur should take counter- measures to neutralize or annul completely all vestiges of
Japanese influence, specially those which might jeopardize in any way his military operations and his means of achieving the main
objective of the campaign of liberation, that is, to restore in our country constitutional processes and the high ideals which constitute the
very essence of democracy.
It was necessary to free, not only our territory, but also our spiritual patrimony. It was necessary, not only to restore to us the
opportunity of enjoying the physical treasures which a beneficent Providence accumulated on this bountiful land, the true paradise in
the western Pacific, but to restore the full play of our ideology, that wonderful admixture of sensible principles of human conduct,
bequeathed to us by our Malayan ancestors, the moral principles of Christianity assimilated by our people from teachers of Spain, and
the common-sense rules of the American democratic way of life.
It was necessary to free that ideology from any Japanese impurity.

Undoubtedly, the author of the proclamation thought that the laws, regulations, and processes of all the branches of the
governments established under the Japanese regime, if allowed to continue and to have effect, might be a means of keeping and
spreading in our country the Japanese influence, with the same deadly effect as the mines planted by the retreating enemy.
The government offices and agencies which functioned during the Japanese occupation represented a sovereignty and ideology
antagonistic to the sovereignty and ideology which MacArthur's forces sought to restore in our country.
Under Chapter I of the Japanese Constitution, it is declared that Japan shall be reigned and governed by a line of Emperors
unbroken for ages eternal (Article 1); that the Emperor is sacred and inviolable (Article 3); that he is the head of the Empire, combining
in himself the rights of sovereignty (Article 4); that he exercises the legislative power (Article 5); that he gives sanction to laws, and
orders to be promulgated and executed (Article 6); that he has the supreme command of the Army and Navy (Article 11); that he
declares war, makes peace, and concludes treaties (Article 13).

There is no reason for allowing to remain any vestige of Japanese ideology, the ideology of a people which, as confessed in a
book we have at our desk, written by a Japanese, insists in doing many things precisely in a way opposite to that followed by the rest of
the world.
It is the ideology of a people which insists in adopting the policy of self-delusion; that believes that their Emperor is a direct
descendant of gods and he himself is a god, and that the typhoon which occurred on August 14, 1281, which destroyed the fleet with
which Kublai Khan tried to invade Japan was the divine wind of Ise; that defies the heinous crime of the ronin, the 47 assassins who, in
order to avenge the death of their master Asano Naganori, on February 3, 1703, entered stealthily into the house of Yoshinaka Kiro and
killed him treacherously.
It is an ideology which dignifies harakiri or sepukku, the most bloody and repugnant form of suicide, and on September 13,
1912, on the occasion of the funeral of Emperor Meiji, induced General Maresuke Nogi and his wife to practice the abhorrent "junshi",
and example of which is offered to us in the following words of an historian:
"When the Emperor's brother Yamato Hiko, died in 2 B. C., we are told that, following the occasion, his
attendants were assembled to form the hito-bashira (pillar-men) to gird the grave. They were buried alive in a circle up
to the neck around the tomb and 'for several days they died not, but wept and wailed day and night. At last they died
and rotted. Dogs and cows gathered and ate them.'" (Gowen, an Outline of History of Japan, p. 50.)
The practice shows that the Japanese are the spiritual descendants of the Sumerians, the ferocious inhabitants of Babylonia
who, 3500 years B. C., appeared in history as the first human beings to honor their patesis by killing and entombing with him his widow,
his ministers, and notable men and women of his kingdom, selected by the priests to partake of such abominable honor. (Brodeur, The
Pageant of Civilization, pp. 62-66.)
General MacArthur sought to annul completely the official acts of the governments under the Japanese occupation, because
they were done at the shadow of the Japanese dictatorship, the same which destroyed the independence of Korea, the "Empire of
Morning Freshness"; they violated the territorial integrity of China, invaded Manchuria, and initiated therein the deceitful system of
puppet governments, by designating irresponsible Pu Yi as Emperor of Manchukuo; they violated the trusteeship granted by the Treaty
of Versailles by usurping the mandated islands in the Pacific; they initiated what they call China Incident, without war declaration, and,
therefore, in complete disregard of an elemental international duty; they attacked Pearl Harbor treacherously, and committed a long
series of flagrant violations of international law that have logically bestowed on Japan the title of the bandit nation in the social world.
The conduct of the Japanese during the occupation shows a shocking anachronism of a modern world power which seems to be
the re- incarnation of one of those primitive social types of pre-history, whose proper place must be found in an archeological collection.
It represents a backward jump in the evolution of ethical and juridical concepts, a reversion that, more than a simple pathological state,
represents a characteristic and well defined case of sociological teratology.
Since they entered the threshold of our capital, the Japanese had announced that for every one of them killed they would kill
ten prominent Filipinos. They promised to respect our rights by submitting us to wholesale and indiscriminate slapping, tortures, and
atrocious massacres. Driving nails in the cranium, extraction of teeth and eyes, burning of organs, hangings, diabolical zonings, looting
of properties, establishment of redlight districts, machine-gunning of women and children, interment of alive persons, they are just mere
preludes of the promised paradise that they called "Greater East Asia Co-Prosperity Sphere."
They promised religious liberty by compelling all protestant sects to unite, against the religious scruples and convictions of
their members, in one group, and by profaning convents, seminaries, churches, and other cult centers of the Catholics, utilizing them as
military barracks, munition dumps, artillery bases, deposits of bombs and gasoline, torture chambers and zones, and by compelling the
government officials and employees to face and to bow in adoration before that caricature of divinity in the imperial palace of Tokyo.
The Japanese offered themselves to be our cultural mentors by depriving us of the use of our schools and colleges, by
destroying our books and other means of culture, by falsifying the contents of school texts, by eliminating free press, the radio, all
elemental principles of civilized conduct, by establishing classes of rudimentary Japanese so as to reduce the Filipinos to the mental
level of the rude Japanese guards, and by disseminating all kinds of historical, political, and cultural falsehoods.
Invoking our geographical propinquity and race affinity, they had the insolence of calling us their brothers, without the
prejudice of placing us in the category of slaves, treating the most prominent Filipinos in a much lower social and political category than
that of the most ignorant and brutal subject of the Emperor.
The civil liberties of the citizens were annulled. Witnesses and litigants were slapped and tortured during investigations. In
the prosecuting attorney's offices, no one was safe. When the Japanese arrested a person, the lawyer who dared to intercede was also

placed under arrest. Even courts were not free from their despotic members. There were judges who had to trample laws and shock their
conscience in order not to disgust a Nipponese.
The most noble of all professions, so much so that the universities of the world could not conceive of a higher honor that may be
conferred than that of Doctor of Laws, became the most despised. It was dangerous to practice the profession by which faith in the
effectiveness of law is maintained; citizens feel confident in the protection of their liberties, honor, and dignity; the weak may face the
powerful; the lowest citizen is not afraid of the highest official; civil equality becomes a reality; justice is administered with more
efficiency; and democracy becomes the best system of government and the best guaranty for the welfare and happiness of the individual
human being. In fact, the profession of law was annulled, and the best lawyers for the unfortunate prisoners in Fort Santiago and other
centers of torture were the military police, concubines, procurers, and spies, the providers of war materials and shameful pleasures, and
the accomplices in fraudulent transactions, which were the specialty of many naval and military Japanese officers.
The courts and the Filipino government officials were completely helpless in the question of protecting the constitutional
liberties and fundamental rights of the citizens who happen to be unfortunate enough to fall under the dragnet of the hated kempei.
Even the highest government officials were not safe from arrest and imprisonment in the dreaded military dungeons, where torture or
horrible death were always awaiting the defenseless victim of Japanese brutality.
May any one be surprised if General MacArtur decided to annul all the judicial processes?
The evident policy of the author of the October Proclamation can be seen if we take into consideration the following provisions
of the Japanese Constitution:
Emperor.

"ART. 57.The Judicature shall be exercised by the Courts of Law according to law, in the name of the

"ART. 61.No suit at law, which relates to rights alleged to have been infringed by the illegal measures of the
executive authority . . . shall be taken cognizance of by a Court of Law."
INTERNATIONAL LAW
Nobody dared challenge the validity of the October Proclamation.
Nobody dared challenged the authority of the military Commander in Chief who issued it.
Certainly not because of the awe aroused by the looming figure of General of the Army Douglas MacArthur, the Allied
Supreme Commander, the military hero, the greatest American general, the Liberator of the Philippines, the conqueror of Japan, the
gallant soldier under whose authority the Emperor of Japan, who is supposed to rule supreme for ages as a descendant of gods, is
receiving orders with the humility of a prisoner of war.
No challenge has been hurled against the proclamation or the authority of the author to issue it, because everybody
acknowledges the full legality of its issuance.
But because the proclamation will affect the interest and rights of a group of individuals, and to protect the same, a way is
being sought to neutralize the effect of the proclamation.
The way found is to invoke international law. The big and resounding word is considered as a shibboleth powerful enough to
shield the affected persons from the annulling impact.
Even then, international law is not invoked to challenge the legality or authority of the proclamation, but only to construe it in
a convenient way so that judicial processes during the Japanese occupation, through an exceptional effort of the imagination, might be
segregated from the processes mentioned in the proclamation.
An author said that the law of nations, the "jus gentiun", is not a fixed nor immutable science. On the contrary, it is developing
incessantly, it is perpetually changing in forms. In each turn it advances or recedes, according to the vicissitudes of history, and
following the monotonous rhythm of the ebb and rise of the tide of the sea.
"Le droit des gens, en effet, n'est point une science fixe est immuable: bien au contraire, il se developpe sans
cesse, il change eternellement de formes; tour a tour il avance et il recule, selon less vicissitudes de l'histoire et suivan
un rhythme monotone qui est comme le flux et le reflux d'n mer." (M. Revon, De l'existence du droit international sous
la republique romain.)

Another author has this to say:


"International law, if it is or can be a science at all, or can be, at most, a regulative science, dealing with the
conduct of States, that is, human beings in a certain capacity; and its principles and prescriptions are not, like those of
science proper, final and unchanging. The substance of science proper is already made for man; the substance of
international is actually made by man, and different ages make differently." (Coleman Philippson, The International
Law and Custom of Ancient Greece and Rome, Vol. I, p. 50.)
"Law must be stable, and yet it cannot stand still." (Pound, Interpretations of Legal History, p. 1) Justice Cardozo adds: "Here
is the great antinomy confronting us at every turn. Rest and motion, unrelieved and unchecked, are equally destructive. The law, like
human kind, if life is to continue, must find some path of compromise." (The Growth of Law, p. 2.) Law is just one of the manifestations
of human life, and "Life has relations not capable of division into inflexible compartments. The moulds expand and shrink." (Glanzer vs.
Shepard, 233 N. Y., 236, 241.) The characteristic plasticity of law is very noticeable, much more than in any other department, in
international law.

"In certain matters it is clear we have made substantial progress, but in other points, he (M. Revon)
maintains, we have retrograded; for example, in the middle ages the oath was not always respected as faithfully as in
ancient Rome; and nearer our own times, in the seventeenth century, Grotius proclaims the unquestioned right of
belligerents to massacre the women and children of the enemy; and in our more modern age the due declaration of war
which Roman always conformed to has not been invariably observed." (Coleman Philippson, The International Law and
Custom of Ancient Greece and Rome, Vol. I, p. 209.)
Now let us see if any principle of international law may affect the enforcement of the October Proclamation.
In this study we should be cautioned not to allow ourselves to be deluded by generalities and vagueness which are likely to lead
us easily to error, in view of the absence of codification and statutory provisions.
Our Constitution provides:
"The Philippines renounces war as an instrument of national policy, and adopts the generally accepted
principles of international law as part of the law of the Nation." (Sec. 3, Art. II.)
There being no codified principles of international law, or enactments of its rules, we cannot rely on merely legal precepts.
With the exception of international conventions and treaties and, just recently, the Charter of the United Nations, adopted in
the San Francisco Conference on June 26, 1945, we have to rely on unsystematized judicial pronouncements and reasonings and on
theories, theses, and propositions that we may find in the works of authors and publicists.
Due to that characteristic pliability and imprecision of international law, the drafters of our Constitution had to content
themselves with "generally accepted principles."
We must insist, therefore, that the principles should be specific and unmistakably defined, and that there is definite and
conclusive evidence to the effect that they are generally accepted among the civilized nations of the world and that they belong to the
current era and no other epochs of history.
The temptation of assuming the role of a legislator is greater in international law than in any other department of law, since
there are no parliaments, congresses, legislative assemblies which can enact laws and specific statutes on the subject. It must be our
concern to avoid falling in so a great temptation, as its dangers are incalculable. It would be like building castles in the thin air, or trying
to find an exit in the thick dark forest where we are irretrievably lost. We must also be very careful in our logic. In so vast a field as
international law, the fanciful wanderings of the imagination often impair the course of dialectics.
THE OCTOBER PROCLAMATION AND INTERNATIONAL LAW
Is there any principle of international law that may affect the October Proclamation?
We tried in vain to find out in the majority opinion anything as to the existence of any principle of international law under
which the authority of General MacArthur to issue the proclamation can effectively be challenged.
No principle of international law has been, or could be, invoked as a basis for denying the author of the document legal
authority to issue the same or any part thereof.
We awaited in vain for any one to dare deny General MacArthur the authority, under international law, to declare null and
void and without effect, not only the laws and regulations of the governments under the Japanese regime, but all the processes of said
governments, including judicial processes.
If General MacArthur, as Commander in Chief of the American Armed Forces of Liberation, had authority, full and legal, to
issue the proclamation, the inescapable result will be the complete voidance and nullity of all judicial processes, procedures, and
proceedings of all courts under the Japanese regime.
But those who are sponsoring the cause of said judicial processes try to achieve their aim, not by direct means, but by following
a tortuous side-road.
They accept and recognize the full authority of the author of the proclamation to issue it and all its parts, but they maintain
that General MacArthur did not and could not have in mind the idea of nullifying the judicial processes during the Japanese occupation,
because that will be in violation of the principles of international law.
If we follow the reasoning of the majority opinion we will have to reach the conclusion that the word "processes" does not
appear at all in the October Proclamation.
It is stated more than once, and reiterated with dogmatic emphasis, that under the principles of international law the judicial
processes under an army of occupation cannot be invalidated.
But we wanted in vain for the specific principle of international law, only one of those alluded to, to be pointed out to us.
If the law exists, it can be pointed out. If the principle exists, it can be stated specifically. The word is being used very often in
plural, principles, but we need only one to be convinced.
The imagined principles are so shrouded in a thick maze of strained analogies and reasoning, that we confess our inability
even to have a fleeting glimpse at them through their thick and invulnerable wrappers.
At every turn international law, the blatant words, are haunting us with the deafening bray of a trumpet, but after the
transient sound has fled away, absorbed by the resiliency of the vast atmosphere, the announced principles, which are the very soul of
international law, would disappear too with the lightning speed of vanishing dream.

WEAKNESS OF THE MAJORITY POSITION


In the majority opinion three questions are propounded: first, whether judicial acts and proceedings during the Japanese
occupation are valid even after liberation; second, whether the October Proclamation has invalidated all judgments and judicial
proceedings under the Japanese regime; and third, whether the present courts of the Commonwealth may continue the judicial
proceedings pending at the time of liberation.
As regards the first question, it is stated that it is a legal truism in political and international law that all acts of a de
facto government are good and valid, that the governments established during the Japanese occupation, that is, the Philippine Executive
Commission and the Republic of the Philippines, were de facto governments, and that it necessarily follows that the judicial acts and
proceedings of the courts of those governments, "which are not of a political complexion," were good and valid, and, by virtue of the
principle of postliminum, remain good and valid after the liberation.
In the above reasoning we will see right away how the alleged legal truism in political and international law, stated as a
premise in a sweeping way, as an absolute rule, is immediately qualified by the exception as to judicial acts and proceedings which are of
a "political complexion."
So it is the majority itself which destroys the validity of what it maintains as a legal truism in political and international law,
by stating from the beginning the absolute proposition that all acts and proceedings of the legislative, executive, and judicial
departments of a de facto government are good and valid.
It is to be noted that no authority, absolutely no authority, has been cited to support the absolute and sweeping character of
the majority proposition as stated in their opinion.
No authority could be cited, because the majority itself loses faith in the validity of such absolute and sweeping proposition, by
establishing an unexplained exception as regards the judicial acts and proceedings of a "political complexion."
Besides, it is useless to try to find in the arguments of the majority anything that may challenge the power, the authority of
a de jure government to annul the official acts of a de facto government, or the legal and indisputable authority of the restored legitimate
government to refuse to recognize the official acts, legislative, executive and judicial, of the usurping government, once the same is
ousted.
As to the second question, the majority argues that, the judicial proceedings and judgments of the de facto governments under
the Japanese regime being good and valid, "it should be presumed that it was not, and could not have been, the intention of General
Douglas MacArthur to refer to judicial processes, when he used the last word in the October Proclamation, and that it only refers to
governmental processes other than judicial processes or court proceedings."
To weakness and absolute ineffectiveness of the argument are self-evident.
It is maintained that when General MacArthur declared the processes of the governments under the Japanese regime null and
void, he could not refer to judicial processes, because the same are valid and remained so under the legal truism announced by the
majority to the effect that, under political and international law, all official acts of a de facto government, legislative, executive or
judicial, are valid.

But we have seen already how the majority excepted from said legal truism the judicial processes of "political complexion."
And now it is stated that in annulling the processes of the government under Japanese occupation, General MacArthur
referred to "processes other than judicial processes."
That is, the legislative and executive processes.
But, did not the majority maintain that all acts and proceedings of legislative and executive departments of a de
facto government are good and valid? Did it not maintain that they are so as a "legal truism in political and international law?
"Now, if the reasoning of the majority to the effect that General MacArthur could not refer to judicial processes because they
are good and valid in accordance with international law, why should the same reasoning not apply to legislative and executive processes?
Why does the majority maintain that, notwithstanding the fact that, according to said legal truism, legislative and executive
official acts of de facto governments are good and valid, General MacArthur referred to the latter in his annulling proclamation, but not
to judicial processes?
If the argument is good so as to exclude judicial processes from the effect of the October Proclamation, we can see no logic in
considering it bad with respect to legislative and executive processes.
If the argument is bad with respect to legislative and executive processes, there is no logic in holding that it is not good with
respect to judicial processes.
Therefore, if the argument of the majority opinion is good, the inevitable conclusion is that General MacArthur did not declare
null and void any processes at all, whether legislative processes, executive processes, or judicial processes, and that the word "processes"
used by him in the October Proclamation is a mere surplusage or an ornamental literary appendix.
The absurdity of the conclusion unmasks the utter futility of the position of the majority, which is but a mere legal pretense
that can not stand the least analysis or the test of logic.
A great legal luminary admonished that we must have courage to unmask pretense if we are to reach a peace that will abide
beyond the fleeting hour.

It is admitted that the commanding general of a belligerent army of occupation as an agent of his government, "may not
unlawfully suspend existing laws and promulgate new ones in the occupied territory if and when exigencies of the military occupation
demand such action," but it is doubted whether the commanding general of the army of the restored legitimate government can exercise
the same broad legislative powers.
We beg to disagree with a theory so unreasonable and subversive.
We cannot accept that the commanding general of an army of occupation, of a rebellious army, of an invading army, or of a
usurping army, should enjoy greater legal authority during the illegal, and in the case of the Japanese, iniquitous and bestial
occupation, than the official representative of the legitimate government, once restored in the territory wrested from the brutal invaders
and aggressors. We cannot agree with such legal travesty.
Broad and unlimited powers are granted and recognized in the commanding general of an army of invasion, but the shadow of
the vanishing alleged principle of international law is being brandished to gag, manacle, and make completely powerless the commander
of an army of liberation to wipe out the official acts of the government of usurpation, although said acts might impair the military
operation or neutralize the public policies of the restored legitimate government.
We are not unmindful of the interests of the persons who might be adversely affected by the annulment of the judicial
processes of the governments under the Japanese regime, but we can not help smiling when we hear that chaos will reign or that the
world will sink.
It is possible that some criminals will be let loose unpunished, but nobody has ever been alarmed that the President, in the
exercise of his constitutional powers of pardon and amnesty, had in the past released many criminals from imprisonment. And let us not
forget that, due to human limitations, in all countries, under all governments, in peace or in war, there were, there are, and there will
always be unpunished criminals, and that situation never caused despair to any one.
We can conceive of inconveniences and hardships, but they are necessary contributions to great and noble purposes. Untold
sacrifices were always offered to attain high ideals and in behalf of worthy causes.
We cannot refrain from feeling a paternal emotion for those who are trembling with all sincerity because of the belief that the
avoidance of judicial proceedings of the governments under the Japanese regime "would paralyze the social life of the country." To allay
such fear we must remind them that the country that produced many great heroes and martyrs; that contributed some of the highest
moral figures that humanity has ever produced in all history; which is inhabited by a race which was able to traverse in immemorial
times the vast expanses of the Indian Ocean and the Pacific with inadequate means of navigation, and to inhabit in many islands so
distantly located, from Madagascar to the eastern Pacific; which made possible the wonderful resistance of Bataan and Corregidor, can
not have a social life so frail as to be easily paralyzed by the annulment of some judicial proceedings. The Japanese vandalisms during
the last three years of nightmares and bestial oppression, during the long period of our national slavery, and the wholesale massacres
and destructions in Manila and many other cities and municipalities and populated areas, were not able to paralyze the social life of our
people. Let us not lose faith so easily in the inherent vitality of the social life of the people and country of Rizal and Mabini.
It is insinuated that because of the thought that the representative of the restored sovereign power may set aside all judicial
processes of the army of occupation, in the case of a future invasion, litigants will not submit their cases to courts whose judgment may
afterwards be annulled, and criminals would not be deterred from committing offenses in the expectancy that they may escape penalty
upon liberation of the country. We hope that Providence will never allow the Philippines to fall again under the arms of an invading
army, but if such misfortune will happen, let the October Proclamation serve as a notice to the ruthless invaders that the official acts of
the government of occupation will not merit any recognition from the legitimate government, specially if they should not conduct
themselves, as exemplified by the Japanese, in accordance with the rules of action of a civilized state.
One conclusive evidence of the untenableness of the majority position is the fact that it had to resort to Executive Order No. 37,
issued on March 10, 1945, providing "that all cases that have heretofore been appealed to the Court of Appeals shall be transmitted to
the Supreme Court for final decision." The far-fetched theory is advanced that this provision impliedly recognizes the court processes
during the Japanese military occupation, on the false assumption that it refers to the Court of Appeals existing during the Japanese
regime. It is self-evident that the Executive Order could have referred only to the Commonwealth Court of Appeals, which is the one
declared abolished in said order. Certainly no one will entertain the absurd idea that the President of the Philippines could have thought
of abolishing the Court of Appeals under the government during the Japanese occupation. Said Court of Appeals disappeared with the
ouster of the Japanese military administration from which it derived its existence and powers. The Court of Appeals existing on March
10, 1945, at the time of the issuance of Executive Order No. 37, was the Commonwealth Court of Appeals and it was the only one that
could be abolished.
Without discussing the correctness of the principle stated, the majority opinion quotes from Wheaton the following: "Moreover
when it is said that an occupier's acts are valid and under international law should not be abrogated by the subsequent conqueror, it
must be remembered that no crucial instances exist to show that if his acts should be reversed, any international wrong would be
committed. What does happen is that most matters are allowed to stand by the restored government, but the matter can hardly be put
further than this," (Wheaton, International Law, War, 7th English edition of 1944, p. 245.)
Then it says that there is no doubt that the subsequent conqueror has the right to abrogate most of the acts of the occupier,
such as the laws, regulations and processes other than judicial of the government established by the belligerent occupant.
It is evident that the statement just quoted is a complete diversion from the principle stated in an unmistakable way by
Wheaton, who says in definite terms that "it must be remembered that no crucial instances exist to show that if his acts (the occupant's)
should be reversed, any international wrong would be committed."

It can be clearly seen that Wheaton does not make any distinction or point our any exception.
But in the majority opinion the principle is qualified, without stating any reason therefor, by limiting the right of the restored
government to annul "most of the acts of the occupier' and "processes other than judicial."
The statement made by the respondent judge after quoting the above-mentioned principle, as stated by Wheaton, to the effect
that whether the acts of the military occupant should be considered valid or not, is a question that is up to the restored government to
decide, and that there is no rule of international law that denies to the restored government the right to exercise its discretion on the
matter, is quoted without discussion in the majority opinion.
As the statement is not disputed, we are entitled to presume that it is concurred in and, therefore, the qualifications made in
the statement in the majority opinion seem to be completely groundless.

THE DUTIES IMPOSED ON OCCUPANT ARMY ARE NOT


LIMITATIONS TO THE RIGHTS OF THE LEGITIMATE GOVERNMENT

The majority opinion is accumulating authorities to show the many duties imposed by international law on the military
occupant of an invaded country.
And from said duties it is deduced that the legitimate government, once restored in his own territory, is bound to respect all
the officials acts of the government established by the usurping army, except judicial processes of political complexion.
The reasoning calls for immediate opposition. It is absolutely contrary to all principles of logic.
Between the duties imposed on the military occupant and the legal prerogatives of the legitimate government there are no
logical relationship or connection that might bind the ones with the others.
The military occupant is duty bound to protect the civil rights of the inhabitants, but why should the legitimate government
necessarily validate the measures adopted by said occupant in the performance of this duty, if the legitimate government believes the
duty to annul them for weighty reasons?
The military occupant is duty bound to establish courts of justice. Why should the legitimate government validate the acts of
said courts, if it is convinced that said courts were absolutely powerless, as was the case during the Japanese occupation, to stop the
horrible abuses of the military police, to give relief to the victims of zoning and Fort Santiago tortures, to protect the fundamental
human rights of the Filipinos life, property, and personal freedom?
The majority opinion recognizes in the military occupant the power to annul the official acts of the ousted and supplanted
legitimate government, a privilege which is inversely denied to the last. This preference and predilection in favor of the military
occupant, that is in favor of the invader and usurper, and against the legitimate government, is simply disconcerting, if we have to say
the least.
PRESUMPTIONS AND SUPPOSITIONS AGAINST TRUTH AND FACTS
The invading military occupant is duty bound to establish and maintain courts of justice in the invaded territory, for the
protection of the inhabitants thereof. It is presumed that the restored legitimate government will respect the acts of said courts of the
army of occupation. Therefore, it is a principle of international law that said acts are valid and should be respected by the legitimate
government. It is presumed that General MacArthur is acquainted with such principle, discovered or revealed through presumptive
operations, and it is presumed that he had not the intention of declaring null and void the judicial processes of the government during
the Japanese regime. Therefore, his October Proclamation, declaring null and void and without effect "all processes" of said government,
in fact, did not annul the Japanese regime judicial processes.
So runs the logic of the majority.
They don't mind that General MacArthur speaks in the October Proclamation as follows:
"NOW, THEREFORE, I, Douglas MacArthur, General, United States Army, as Commander-in-Chief of the
military forces committed to the liberation of the Philippines, do hereby proclaim and declare:
xxx xxx xxx
"3.That all laws, regulations and processes of any other government in the Philippines than that of the said
Commonwealth are null and void and without legal effect in areas of the Philippines free of enemy occupation and
control." (Emphasis supplied.)
General MacArthur says categorically "all processes", but the majority insists on reading differently, that is: "NOT ALL
processes."

The majority presume, suppose, against the unequivocal meaning of simple and well known words, that when General
MacArthur said "all processes", in fact, he said "not all processes", because it is necessary, by presumption, by supposition, to exclude
judicial processes.
If where General MacArthur says "all", the majority shall insist on reading "not all", it is impossible to foresee the
consequences of such so stubborn attitude, but it is possible to understand how they reached the unacceptable conclusion which we
cannot avoid opposing and exposing.
Are we to adopt and follow the policy of deciding cases submitted to our consideration, by presumptions and suppositions
putting aside truths and facts? Are we to place in the documents presented to us, such as the October Proclamation, different words
than what are written therein? Are we to read "not all", where it is written "all"?
We are afraid that such procedure is not precisely the most appropriate to keep public confidence in the effectiveness of the
administration of justice.
That is why we must insist that in the October Proclamation should be read what General MacArthur has written in it, that
is, that, besides laws and regulations, he declared and proclaimed null and void "ALL PROCESSES", including naturally judicial
processes, of the governments under the Japanese regime.

THE COMMONWEALTH COURTS HAVE NO JURISDICTION TO


CONTINUE JAPANESE REGIME JUDICIAL PROCESSES

Now we come to the third and last question propounded in the majority opinion.
The jurisdiction of the Commonwealth tribunals is to defined, prescribed, and apportioned by legislative act.
It is provided so in our Constitution. (Section 2, Article VIII.)
The Commonwealth courts of justice are continuations of the courts established before the inauguration of the Commonwealth
and before the Constitution took effect on November 15, 1935. And their jurisdiction is the same as provided by existing laws at the time
of the inauguration of the Commonwealth Government.
Act No. 136 of the Philippine Commission, known as the Organic Act of the courts of justice of the Philippines, is the one that
defines the jurisdiction of justice of the peace and municipal courts, Courts of First Instance, and the Supreme Court. It is not necessary
to mention here the jurisdiction of the Courts of Appeals, because the same has been abolished by Executive Order No. 37.
No provision may be found in Act No. 136, nor in any other law of the Philippines, conferring on the Commonwealth tribunals
jurisdiction to continue the judicial processes or proceedings of tribunals belonging to other governments, such as the governments
established during the Japanese occupation.
The jurisdiction of our justice of the peace and municipal courts is provided in Section 68, Chapter V, of Act No. 136. The
original and appellate jurisdiction of the Courts of First Instance is provided in sections 56 and 57, Chapter IV, of Act No. 136. The
original and appellate jurisdiction of the Supreme Court is provided in sections 17 and 18, Chapter II, of the same Act. The provisions of
the above-cited sections do not authorize, even implicitly, any of the said tribunals to execute or order the execution of the decisions and
judgments of other governments, nor to continue the processes or proceedings of said tribunals.

NECESSITY OF ENABLING ACT UNDER THE LEGAL DOCTRINE


PREVAILING IN THE PHILIPPINES AND IN
THE UNITED STATES

Taking aside the question as to whether the judicial processes of the government established during the Japanese occupation
should be considered valid or not, in order that said processes could be continued and the Commonwealth tribunals could exercise proper
jurisdiction to continue them, under a well-established legal doctrine, prevailing not only in the Philippines, but also in the United
States, it is necessary to that effect to enact the proper enabling law.
Almost half a century ago, in the instructions given by President McKinley on April 7, 1900, for the guidance of the Philippine
Commission, it was stated that, in all the forms of the government and administrative provisions which they were authorized to
prescribe, the Commission should bear in mind that the government which they were establishing was designed not for the satisfaction

of the Americans or for the expression of their theoretical views, but for the happiness, peace, and prosperity of the people of the
Philippines, and the measures adopted should be made to conform to their customs, their habits, and even their prejudices, to the fullest
extent consistent with the accomplishment of the indispensable requisites of just and effective government.
Notwithstanding the policy so outlined, it was not enough for the Philippine Commission to create and establish the courts of
justice provided in Act No. 136, in order that said tribunals could take cognizance and continue the judicial proceedings of the tribunals
existing in the Philippines at the time of the American occupation.
It needed specific enabling provisions in order that the new tribunals might continue the processes pending in the tribunals
established by the Spaniards, and which continued to function until they were substituted by the courts created by the Philippine
Commission.
So it was done in regards to the transfer of the cases pending before the Spanish Audiencia to the newly created Supreme
Court, in sections 38 and 39 of Act No. 136, quoted as follows:
"SEC. 38.Disposition of causes, actions, proceedings, appeals, records, papers, and so forth, pending in the
existing Supreme Court and in the 'Contencioso Administrativo.' All records, books, papers, causes, actions,
proceedings, and appeals lodged, deposited, or pending in the existing Audiencia or Supreme Court, or pending by
appeal before the Spanish tribunal called 'Contencioso Administrativo,' are transferred to the Supreme Court above
provided for, which has the same power and jurisdiction over them as if they had been in the first instance lodged, filed,
or pending therein, or, in case of appeal, appealed thereto.
"SEC. 39.Abolition of existing Supreme Court. The existing Audiencia or Supreme Court is hereby
abolished, and the Supreme Court is provided by this Act is substituted in place thereof."
Sections 64 and 65 of the same Act followed the same Act followed the same procedure as regards the transfer of cases and
processes pending in the abolished Spanish Courts of First Instance to the tribunals of the same name established by the Philippine
Commission.

"SEC. 64.Disposition of records, papers, causes, and appeals, now pending in the existing Courts of First
Instance. All records, books, papers, actions, proceedings, and appeals lodged, deposited, or pending in the Court of
First Instance as now constituted of or in any province, are transferred to the Court of First Instance of such province
hereby established, which shall have the same power and jurisdiction over them as if they had been primarily lodged,
deposited, filed, or commenced therein, or in cases of appeal, appealed thereto.
"SEC. 65.Abolition of existing Courts of First Instance. The existing Courts of First Instance are hereby
abolished, and the Courts of First Instance provided by this Act are substituted in place thereof."
The same procedure has been followed by the Philippine Commission even though the courts of origin of the judicial processes
to be transferred and continued belonged to the same government and sovereignty of the courts which are empowered to continue said
processes.
So section 78 of Act No. 136, after the repeal of all acts conferring upon American provost courts in the Philippines jurisdiction
over civil actions, expressly provided that said civil actions, expressly provided that said civil actions shall be transferred to the newly
created tribunals.
And it provided specifically that "the Supreme Court, Courts of First Instance, and courts of the justices of the peace
established by this Act (No. 136) are authorized to try and determine the actions so transferred to them respectively from the provost
courts, in the same manner and with the same legal effect as though such actions had originally been commenced in the courts created"
by virtue of said Act.
MUNICIPAL COURTS UNDER ACT NO. 183
On July 30, 1901, the Philippine Commission enacted the Organic Act of the City of Manila, No. 183.
Two municipal courts for the city were created by section 40 of said Act, one for the northern side of Pasig River and the other
for the southern side.
They were courts with criminal jurisdiction on identical cases under the jurisdiction of the justices of the peace then existing in
Manila. Although both courts were of the same jurisdiction, in order that the criminal cases belonging to the justice of the peace courts
may be transferred to the municipal courts just created, and the proceedings may be continued by the same, the Philippine Commission
considered it necessary to pass the proper enabling act.
So on August 5, 1901, it enacted Act No. 186, section 2 of which provides that all criminal cases and proceedings pending in the
justices of the peace of Manila are transferred to the municipal courts, which are conferred the jurisdiction to continue said cases and
proceedings.
THE CABANTAG CASE
On August 1, 1901, Narciso Cabantag was convicted of murder by a military commission. (Cabantag vs. Wolfe, 6 Phil., 273.)
The decision was confirmed on December 10, 1901, and his execution by hanging was set for January 12, 1902.
On December 26, 1901, he fled, but surrendered to the authorities on July 18, 1902. The Civil Governor on December 2, 1903,
commuted the death penalty to 20 years imprisonment. The commutation was approved by the Secretary of War, following instructions
of the President.

Cabantag filed later a writ of habeas corpus on the theory that, with the abolition of the military commission which convicted
him, there was no existing tribunal which could order the execution of the penalty of imprisonment.
The Supreme Court denied the writ, but stated that, if the petitioner had filed the writ before the enactment of Act No. 865,
the question presented to the Supreme Court would have been different.
Act No. 865, enacted on September 3, 1903, is an enabling law, wherein it is provided that decisions rendered by provost courts
and military commissions shall be ordered executed by Courts of First Instance in accordance with the procedure outlined in said Act.
It is evident from the foregoing that this Supreme Court has accepted and confirmed the doctrine of the necessity of an
enabling act in order that our Courts of First Instance could exercise jurisdiction to execute the decisions of the abolished provost courts
and military commission.
It is evident that the doctrine is applicable, with more force, to the judicial processes coming from governments deriving their
authority from a foreign enemy state.
THE DOCTRINE IN THE UNITED STATES
It is also evident that the Congress of the United States, by enacting the Bill of the Philippines on July 1, 1902, confirmed also
the same doctrine.
In effect, in section 9 of said Act, the Congress approved what the Philippine Commission did as to the jurisdiction of the
courts established and transfer of cases and judicial processes, as provided in Acts Nos. 136, 186, and 865.
The same doctrine was adopted by the United States government as part of its international policy, as could be seen in Article
XII of the Treaty concluded with Spain on December 10, 1898, in Paris.
Even in 1866 the Congress of the United States followed the same doctrine.
"The suit, shown by the record, was originally instituted in the District Court of the United States for the
District of Louisiana, where a decree was rendered for the libellant. From the decree an appeal was taken to the Circuit
Court, where the case was pending, when, in 1861, the proceedings of the court were interrupted by the civil war.
Louisiana had become involved in the rebellion, and the courts and officers of the United States were excluded from its
limits. In 1862, however, the National authority had been partially re-established in the State, though still liable to be
overthrown by the vicissitudes of war. The troops of the Union occupied New Orleans, and held military possession of
the city and such other portions of the State as had submitted to the General Government. The nature of this
occupation and possession was fully explained in the case of The Venice.
"Whilst it continued, on the 20th of October, 1862, President Lincoln, by proclamation, instituted a
Provisional Court of the State of Louisiana, with authority, among other powers, to hear, try and determine all causes
in admiralty. Subsequently, by consent of parties, this cause was transferred into the Provisional Court thus
constituted, and was heard, and a decree was again rendered in favor of the libellants. Upon the restoration of civil
authority in the State, the Provisional Court, limited in duration, according to the terms of the proclamation, by that
event, ceased to exist.
"On the 28th of July, 1866, Congress enacted that all suits, causes, and proceedings in the Provisional Court,
proper for the jurisdiction of the Circuit Court of the United States for the Eastern District of Louisiana, should be
transferred to that court, and heard and determined therein; and that all judgments, orders, and decrees of the
Provisional Court in causes transferred to the Circuit Court should at once become the orders, judgments, and decrees
of that court, and might be enforced, pleaded and proved accordingly.
"It is questioned upon these facts whether the establishment by the President of a Provisional Court was
warranted by the Constitution.
xxx xxx xxx
"We have no doubt that the Provisional Court of Louisiana was properly established by the President in the
exercise of this constitutional authority during the war; or that Congress had power, upon the close of the war, and the
dissolution of the Provisional Court, to provide for the transfer of cases pending in that court, and of its judgments and
decrees, to the proper courts of the United States." (U.S. Reports, Wallace, Vol. 9, The Grapeshot, 131-133.)

JUDGMENTS OF REBEL COURTS IN LOUISIANA WHERE VALIDATED


BY CONSTITUTIONAL PROVISION

During the civil war in 1861, the prevailing rebel forces established their own government in Louisiana.

When the rebel forces were overpowered by the Union forces and the de facto government was replaced by the de jure
government, to give effect to the judgments and other judicial acts of the rebel government, from January 26, 1861, up to the date of the
adoption of the State Constitution, a provision to said effect was inserted in said document.
Section 149 of the Louisiana Constitution reads as follows:
"All rights, actions, prosecutions, claims, contracts, and all laws in force at the time of the adoption of this
constitution, and not inconsistent therewith, shall continue as if it had been adopted; all judgments and judicial sales,
marriages, and executed contracts made in good faith and in accordance with existing laws in this State rendered,
made, or entered into, between the 26th day of January, 1861, and the date when this Constitution shall be adopted,
are hereby declared to be valid," etc. (U.S. Reports, Wallace, Vol. 22, Mechanics' etc. Bank vs. Union Bank, 281.)

EVEN AMONG SISTER STATES OF THE UNITED STATES


JUDGMENTS ARE NOT EXECUTORY

The member states of the United States of America belong to the same nation, to the same country, and are under the same
sovereignty.
But judgments rendered in one state are not executory in other states.
To give them effect in other states it is necessary to initiate an original judicial proceedings, and therein the defendants in the
domestic suit may plead in bar the sister state judgment puis darrien continuance. (Wharton, on the Conflict of laws, Vol. II, p. 1411.)
"Under the Constitution of the United States, when a judgment of one state in the Union is offered in a court
of a sister state as the basis of a suit nil debet cannot be pleaded. The only proper plea is nul tiel record." (Id., pp. 1413.)
"It is competent for the defendant, however, to an action on a judgment of a sister state, as to an action on a
foreign judgment, to set up as a defense, want of jurisdiction of the court rendering the judgment; and, as indicating
such want of jurisdiction, to aver by plea that the defendant was not an inhabitant of the state rendering the judgment,
and had not been served with process, and did not enter his appearance; or that the attorney was without authority to
appear." (Id., pp. 1414-1415.)

The inevitable consequence is that the courts of the Commonwealth of the Philippines, in the absence of an enabling act or of
an express legislative grant, have no jurisdiction to take cognizance and continue the judicial processes, procedures, and proceedings of
the tribunals which were created by the Japanese Military Administration and functioned under the Vargas Philippine Executive
Commission or the Laurel Republic of the Philippines, deriving their authority from the Emperor, the absolute ruler of Japan, the
invading enemy, and not from the Filipino people in whom, according to the Constitution, sovereignty resides, and from whom all powers
of government emanate.
The position of Honorable Arsenio P. Dizon, the respondent judge of the Court of First Instance of Manila, in declaring himself
without jurisdiction nor authority to continue the proceedings which provoked the present controversy, being a judicial process of a
Japanese sponsored government, is absolutely correct, under the legal doctrines established by the United States and the Philippine
Government, and consistently, invariably, and without exception, followed by the same.
If we accept, for the sake of argument, the false hypothesis that the Commonwealth tribunals have jurisdiction to continue the
judicial processes left pending by the courts of the governments established under the Japanese regime, the courts which disappeared
and, automatically, ceased to function with the ouster of the enemy, the position of Judge Dizon, in declining to continue the case, is still
unassailable, because, for all legal purposes, it is the same as if the judicial processes in said case were not taken at all, as an inevitable
result of the sweeping and absolute annulment declared by General MacArthur in the October Proclamation.
In said proclamation it is declared in unmistakable and definite terms that "ALL PROCESSES" of the Japanese sponsored
governments "ARE NULL AND VOID AND WITHOUT LEGAL EFFECT", and they shall remain so until the Commonwealth, through
its legislative power, decides otherwise in a proper validating act.
The fact that the Japanese invaders, under international law, were in duty bound to establish courts of justice during the
occupation, although they made them completely powerless to safeguard the constitutional rights of the citizens, and mere figureheads
as regards the fundamental liberties of the helpless men, women and children of our people, so much so that said courts could not offer
even the semblance of protection when the life , the liberty, the honor and dignity of our individual citizens were wantonly trampled by
any Japanese, military or civilian, does not change the situation. "ALL PROCESSES" of said court are declared "NULL AND VOID AND
WITHOUT LEGAL EFFECT" in the October Proclamation, and we do not have any other alternative but to accept the law, as said
proclamation has the full force of a law.
The fact that in the past, the legitimate governments, once restored in their own territory, condescended in many cases to
recognize and to give effect to judgments rendered by courts under the governments set up by an invading military occupant or by a

rebel army, does not elevate such condescension to the category of a principle of international law. It cannot be a principle, when
Wheaton declares that no international wrong is done if the acts of the invader are reversed.
Many irrelevant authorities were cited to us as to the duties imposed by international law on military occupants, but no
authority has been cited to the effect that the representative of the restored legitimate government is bound to recognize and accept as
valid the acts and processes of said occupants. On the contrary, Wheaton says that if the occupant's acts are reversed "no international
wrong would be committed."
Following the authority of Wheaton, undisputed by the majority, General MacArthur thought, as the wisest course, of
declaring "NULL AND VOID AND WITHOUT EFFECT," by official proclamation, "ALL PROCESSES" under the Japanese regime, that
is, legislative, executive and judicial processes, which fall under the absolute adjective "ALL".
The declaration is a law. It is a law that everybody is bound to accept and respect, as all laws must be accepted and respected.
It is a law that the tribunals are duty bound to give effect and apply.
We are not unmindful of the adverse consequences to some individuals of the annulment of all the judicial processes under the
Japanese regime, as provided in the October Proclamation, but the tribunals are not the guardians of the legislative authorities, either
an army commander in chief, during war, or a normal legislature, in peace time. The tribunals are not called upon to guide the
legislative authorities as to the wisdom of the laws to be enacted. That is the legislative responsibility. Our duty and our responsibility is
to see to it that the law, once enacted, be applied and complied with.
No matter the consequences, no matter who might be adversely affected, a judge must have the firm resolve and the courage to
do his duty, as, in the present case, Judge Dizon did, without fear nor favor. We cannot see any reason why we should not uphold him in
his stand in upholding the law.
It is our official duty, national and international duty. Yes. Because this Supreme Court is sitting, not only as a national court,
but as an international court, as is correctly stated in the concurring opinion of Justice De Joya, and we should feel the full weight of the
corresponding responsibility, as the American courts with admiralty jurisdiction and the Prize Courts of England did feel. In fact, it is in
the judiciary where, more than in any other department of the government, the international point of view is more pressing, more
imperative, more unavoidable. Justice has no country. It is of all countries. The horizon of justice cannot be limited by the scene where
our tribunals are functioning and moving. That horizon is boundless. That is why in our Constitution the bill of rights has been written
not for Filipinos, but for all persons. They are rights that belong to men, not as Filipinos, American, Russians, Chinese or Malayan, but
as members of humanity. The international character of our duty to administer justice has become more specific by the membership of
our country in the United Nations. And let us not forget, as an elemental thing, as it is; that we must not replace the words of the law
with what we might be inclined to surmise; that what is clearly and definitely provided should not be substituted with conjectures and
suppositions; that we should not try to deduce a contrary intention to that which is unequivocally stated in the law; that we should not
hold valid what is conclusively declared null and void.
The October Proclamation declared "ALL PROCESSES" under the Japanese regime "NULL AND VOID AND WITHOUT
EFFECT", so they must stand. There is no possible way of evasion. "ALL PROCESSES", view of the meaning of the absolute adjective
"ALL", include "JUDICIAL PROCESSES". Allegatio contra factum non est admittenda.
CONCLUSION
For all the foregoing reasons we conclude:
1.That General MacArthur had full legal authority to issue the October Proclamation, and that no principle of international
law is violated by said proclamation, no international wrong being committed by the reversal by the legitimate government of the acts of
the military invader.
2.That said proclamation was issued in full conformity with the official policies to which the United States and Philippine
Governments were committed, and the annulment of all the acts of the governments under the Japanese regime, legislative, executive,
and judicial, is legal, and justified by the wrongs committed by the Japanese.
3.That when General MacArthur proclaimed and declared in the October Proclamation "That all laws, regulations and
processes" of the Japanese sponsored governments, during enemy occupation, "are null and void and without effect", he meant exactly
what he said.
4.That where General MacArthur said "all processes", we must read and understand precisely and exactly "all processes", and
not "some processes". "All" and "some" have incompatible meanings and are not interchangeable.
5.That the word "processes" includes judicial procedures, proceedings, processes, and cases. Therefore, "all processes" must
include "all judicial processes."
6.That we have no right to attribute to General MacArthur an intention different from what he has plainly, clearly,
unmistakably expressed in unambiguous words with familiar meaning generally understood by the common man.
7.That the judicial proceedings here in question are included among those adversely affected by the October Proclamation.
8.That the Commonwealth tribunals have no jurisdiction to take cognizance of nor to continue the judicial proceedings under
the Japanese regime.
9.That to exercise said jurisdiction an enabling act of Congress is necessary.
all.

10.That respondent Judge Dizon did not commit the error complained of in the petition, and that the petition has no merits at

We refuse to follow the course of action taken by the majority in the present case. It is a course based on a mistaken conception
of the principles of international law and of their interpretation and application, and on a pinchbeck and self-contradicting logic in
support of a baseless surmise. It is a course based on misconstruction or misunderstanding of the October Proclamation, in utter
disregard of the most elemental principles of legal hermeneutics. It is a course that leads to nowhere, except to the brink of disaster,
because it is following the dangerous path of ignoring or disobeying the law.
Let us not allow ourselves to be deceived. The issue confronting us is not of passing importance. It is an issue of awesome
magnitude and transcendency. It goes to and reaches the very bottom. It is simple. Lacking in complexities. But it may shake the very
foundation of society, the cornerstone of the state, the primary pillar of the nation. It may dry the very foundation of social life, the
source of the vitalizing sap that nurtures the body politic. The issue is between the validity of one or more Japanese-regime processes
and the sanctity of the law.

That is the question, reduced to its ultimate terms. It is simple dilemma that is facing us. It is the alpha and omega of the
whole issue. Either the processes, or the law. We have to select between two, which to uphold. It is a dilemma that does not admit of
middle terms, or of middle ways where we can loiter with happy unconcern. We are in the crossroad: which way shall we follow? The
processes and the law are placed in the opposite ends of the balance. Shall we incline the balance of justice to uphold the processes and
defeat law, or vice versa?
We feel jittery because some judicial processes might be rescinded or annulled, but we do not tremble with sincere alarm at the
thought of putting the law under the axe, of sentencing law to be executed by the guillotine. We feel uneasy, fancying chaos and
paralyzation of social life, because some litigants in cases during the Japanese regime will be affected in their private interests, with the
annulment of some judicial processes, but we adopt an attitude of complete nonchalance in throwing law overboard. This baffling
attitude is a judicial puzzle that nobody will understand. So it is better that we should shift to a more understandable way, that which is
conformable to the standard that the world expects in judicial action.
No amount of arguments and elucubrations, no amount of speculative gymnastics, no amount of juggling of immaterial
principles of international law, no amount of presumptions and suppositions, surmises and conjectures, no amount of dexterity in
juridical exegesis can divert our attention from the real, simple, looming hypostasis of the issue before us: Law. It is Law with all its
majestic grandeur which we are defying and intending to overthrow from the sacred pedestal where the ages had placed her as a
goddess, to be enshrined, obeyed, and venerated by men, forever. Let us not dare to lay our profaning hands on her vestal virginity, lest
the oracle should fling at us the thunder of his prophetic anathema.
We cannot therefore vote except for the denial of the petition.
HILADO, J., dissenting:
I dissent from the opinion of the majority and, pursuant to the Constitution, proceed to state the reason for my dissent.
The proceedings involved in the case at bar were commenced by a complaint filed by the instant petitioner, as plaintiff, on
November 18, 1944, in civil case No. 3012 of the so-called Court of First Instance of Manila, the complaint bearing this heading and title:
"The Republic of the Philippines In the Court of First Instance of Manila" (Annex X of Exhibit A of petition for mandamus). The
farthest that said proceedings had gone before the record was burned or destroyed during the battle for Manila, was the filing by counsel
for plaintiff therein of their opposition to a motion for dismissal filed by opposing counsel.
It is, therefore, plain that the case had not been heard on the merit when the record was burned or destroyed.
The respondent judge, in his order dated June 6, 1945, disposing of the petition dated May 25, 1945 filed by petitioner, as
plaintiff in said case, and of the petition filed by respondent Eusebio Valdez Tan Keh, as defendant therein, on May 31, 1945, held: first,
that by virtue of the proclamation of General MacArthur quoted above, all laws, regulations and processes of any other government in
the Philippines than that of the Commonwealth became null and void and without legal effect in Manila on February 3, 1945 or, at the
latest, on February 27 of the same year; second, that the proceedings and processes had in the present case having been before a court of
the Republic of the Philippines and in accordance with the laws and regulations of said Republic, the same are now void and without
legal effect; third, that this Court, as one of the different courts of general jurisdiction of the Commonwealth of the Philippines, has no
authority to take cognizance of and continue said proceedings to final judgment, until and unless the Government of the Philippines, in
the manner and form provided by law, shall have provided for the transfer of the jurisdiction of the courts of the now defunct Republic of
the Philippines, and the causes commenced and left pending therein, to the courts created and organized by virtue of the provisions of
Act No. 4007, as revived by Executive Order No. 36, or for the validation of all proceedings had in said courts."
Petitioner prays that this Court declare that the respondent judge should not have ordered the suspension of the proceedings
in civil case No. 3012 and should continue and dispose of all the incidents in said case till its complete termination. In my opinion, the
petition should be denied.
In stating the reasons for this dissent, we may divide the arguments under the following propositions:
1.The proceedings in said civil case No. 3012 are null and void under General of the Army MacArthur's proclamation of
October 23, 1944 (41 Off. Gaz., 147, 148);
2.(a) The government styled as, first, the "Philippine Executive Commission" and later as the "Republic of the Philippines",
established here by the Commander in Chief of the Imperial Japanese Forces or by his order was not a de facto government the so
called Court of First Instance of Manila was not a de facto court, and the judge who presided it was not a de facto judge; (b) the rules of

International Law regarding the establishment of a de facto government in territory belonging to a belligerent but occupied or controlled
by an opposing belligerent are in applicable to the governments thus established here by Japan;
3.The courts of those governments were entirely different from our Commonwealth courts before and after the Japanese
occupation;
4.The question boils down to whether the Commonwealth Government, as now restored, is to be bound by the acts of either or
both of those Japanese-sponsored governments;
5.Even considerations of policy or practical convenience militate against petitioner's contention.
I
The proceedings in said civil case No. 3012 are null and void under General of the Army MacArthur's
proclamation of October 23, 1944 (41 Off. Gaz., 147,148).
In this proclamation, after reciting certain now historic facts, among which was that so-called government styled as the
"Republic of the Philippines" was established on October 14, 1943 "under enemy duress" . . .based upon neither the free expression of the
people's will nor the sanction of the Government of the United States," the great Commander-in-Chief proclaimed and declared:
xxx xxx xxx
3."That all laws, regulations and processes of any other government in the Philippines than that of the said
Commonwealth are null and void and without legal effect in areas of the Philippines free of enemy occupation and
control; and
xxx xxx xxx
"I do enjoin upon all loyal citizens of the Philippines full respect for and obedience to the Constitution of the
Commonwealth of the Philippines and the laws, regulations and other acts of their duly constituted government whose
seat is now firmly re-established on Philippine soil."
The evident meaning and effect of the 3rd paragraph above quoted is, I think, that as the different areas of the Philippines
were progressively liberated, the declaration of nullity therein contained shall attach to the law, regulations and processes thus
condemned in so far as said areas were concerned. Mark that the proclamation did not provide such laws, regulations and processes
shall be or are annulled, but that they are null and void. Annulment implies some degree of effectiveness in the act annulled previous to
the annulment, but a declaration of nullity denotes that the act is null and void ab initio the nullity precedes the declaration. The
proclamation speaks in the present tense, not in the future. If so, the fact that the declaration of nullity as to the condemned laws,
regulations and processes in areas not yet free from enemy occupation and control upon the date of the proclamation, would attach
thereto at a later date, is no argument for giving them validity or effectiveness in the interregnum. By the very terms of the
proclamation itself, that nullity had to date back from the inception of such laws, regulations and processes; and to dispel any shadow of
doubt which may still remain, we need only consider the concluding paragraph of the proclamation wherein the Commander in Chief of
the army of liberation solemnly enjoined upon all loyal citizens of the Philippines full respect for and obedience to the Constitution of the
Commonwealth of the Philippines and the laws, regulations and other acts of their duly constituted government. This is all-inclusive
it comprises not only the loyal citizens in the liberated areas but also those in areas still under enemy occupation and control. It will be
noticed that the complaint in said civil case No. 3012 was filed twenty-six days after the above-quoted proclamation of General of the
Army MacArthur. If the parties to said case were to consider the proceedings therein up to the date of the liberation of Manila valid and
binding, they would hardly be complying with the severe injunction to render full respect for and obedience to our Constitution and the
laws, regulations and other acts of our duly constituted government from October 23, 1944, onwards. Indeed, to my mind, in choosing
between these two courses of action, they would be dangerously standing on the dividing line between loyalty and disloyalty to this
country and its government.
The proceedings in question, having been had before the liberation of Manila, were unquestionably "processes" of the
Japanese- sponsored government in the Philippines within the meaning of the aforesaid proclamation of General of the Army
MacArthur and, consequently, fall within the condemnation of that proclamation. Being processes of a branch of a government which
had been established in hostility to the Commonwealth Government, as well as the United States Government, they could not very well
be considered by the parties to be valid and binding, at least after October 23, 1944, without said parties incurring in disobedience and
contempt of the proclamation which enjoins them to render full respect for and obedience to our Constitution and the laws, regulations
and other acts of our duly constituted government. Nine days after the inauguration of the so-called "Republic of the Philippines,"
President Franklin Delano Roosevelt of the United States declared in one of his most memorable pronouncements about the activities of
the enemy in the Philippines, as follows:

"On the fourteenth of this month, a puppet government was set up in the Philippine Islands with Jose P.
Laurel, formerly a justice of the Philippine Supreme Court, as 'president.' Jorge Vargas, formerly a member of the
Philippine Commonwealth Cabinet and Benigno Aquino, also formerly a member of that cabinet, were closely
associated with Laurel in this movement. The first act of the new puppet regime was to sign a military alliance with
Japan. The second act was a hypocritical appeal for American sympathy which was made in fraud and deceit, and was
designed to confuse and mislead the Filipino people.
"I wish to make it clear that neither the former collaborationist 'Philippine Executive Commission' nor the
present 'Philippine Republic' has the recognition or sympathy of the Government of the United States. . . .

"Our sympathy goes out to those who remain loyal to the United States and the Commonwealth that great
majority of the Filipino people who have been deceived by the promises of the enemy.
"October 23, 1943.

"FRANKLIN DELANO ROOSEVELT


President of the United States"

(From U.S. Naval War College International Law Documents, 1943, pp. 93,94.)
It is a fact of contemporary history that while President Manuel L. Quezon of the Philippines was in Washington, D.C., with
his exiled government, he also repeatedly condemned both the "Philippine Executive Commission" and the "Philippine Republic," as they
had been established by or under orders of the Commander in Chief of the Imperial Japanese Forces. With these two heads of the
Governments of United States and the Commonwealth of the Philippines condemning the "puppet regime" from its very inception, it is
beyond my comprehension to see how the proceedings in question could be considered valid and binding without adopting an attitude
incompatible with theirs. As President Roosevelt said in his above quoted message, "Our sympathy goes out to those who remain loyal to
the United States and the Commonwealth that great majority of the Filipino people who have not been deceived by the promises of
the enemy."
The most that I can concede is that while the Japanese Army of occupation was in control in the Islands and their paramount
military strength gave those of our people who were within their reach no other alternative, these had to obey their orders and decrees,
but the only reason for such obedience would be that paramount military strength and not any intrinsic legal validity in the enemy's
orders and decrees. And once that paramount military strength disappeared, the reason for the obedience vanished, and obedience
should likewise cease.
As was stated by the Supreme Court of the United States in the case of Williams vs. Bruffy (96 U.S., 176; 24 Law. ed., 719), "In
the face of an overwhelming force, obedience in such matters may often be a necessity and, in the interest of order, a duty. No concession
is thus made to the rightfulness of the authority exercised." (Emphasis ours.) The court there refers to its own former decision in
Thorington vs. Smith, and makes it clear that the doctrine in the Thorington case, so far as the effects of the acts of the provisional
government maintained by the British in Castine, from September, 1814 to the Treaty of Peace in 1815, and the consideration of
Tampico as United States territory, were concerned, was limited to the period during which the British, in the first case, retained
possession of Castine, and the United States, in the second, retained possession of Tampico. In referring to the Confederate Government
during the Civil War, as mentioned in the Thorington case, the court again says in effect that the actual supremacy of the Confederate
Government over a portion of the territory of the Union was the only reason for holding that its inhabitants could not but obey its
authority. But the court was careful to limit this to the time when that actual supremacy existed, when it said: ". . . individual resistance
to its authority then would have been futile and, therefore, unjustifiable." (Emphasis ours.)
Because of its persistence, we beg leave to quote the following paragraph from that leading decision:
"There is nothing in the language used in Thorington vs. Smith (supra), which conflicts with these views. In
that case, the Confederate Government is characterized as one of paramount force, and classed among the governments
of which the one maintained by Great Britain in Castine, from September, 1814, to the Treaty of Peace in 1815, and the
one maintained by the United States in Tampico, during our War with Mexico, are examples. Whilst the
British retained possession of Castine, the inhabitants were held to be subject to such laws as the British Government
chose to recognize and impose. Whilst the United States retained possession of Tampico, it was held that it must be
regarded and respected as their territory. The Confederate Government, the court observed, differed from these
temporary governments in the circumstance that its authority did not originate in lawful acts of regular war; but it was
not, on that account, less actual or less supreme; and its supremacy, while not justifying acts of hostility to the United
States, 'Made obedience to its authority in civil and local matters not only a necessity, but a duty.' All that was meant
by this language was, that as the actual supremacy of the Confederate Government existed over certain territory,
individual resistance to its authority thenwould have been futile and, therefore, unjustifiable. In the face of an
overwhelming force, obedience in such matters may often be a necessity and, in the interest of order, a duty. No
concession is thus made to the rightfulness of the authority exercised." (Williams vs. Bruffy, 24 Law ed., 719; emphasis
ours.)
The majority opinion, in considering valid the proceedings in questions, invokes the rule that when a belligerent army occupies
a territory belonging to the enemy, the former, through its Commander in Chief, has the power to establish thereon what the decisions
and treaties have variously denominated provisional or military government, and the majority holds that the Japanese-sponsored
government in the Philippines was such a government. Without prejudice to later discussing the effects which the renunciation of war as
an instrument of national policy contained in our Commonwealth Constitution, as well as in the Briand-Kellog Pact, must have produced
in this rule in so far as the Philippines is concerned, let us set forth some considerations apropos of this conclusion of the majority. If the
power to establish here such a provisional government is recognized in the Commander in Chief of the invasion army, why should we not
recognize at least an equal power in the Commander in Chief of the liberation army to overthrow that government with all of its acts, at

least those of an executory nature upon the time of liberation? Considering the theory maintained by the majority, it would seem that
they would recognize in the Japanese Commander in Chief the power to overthrow the Commonwealth Government, and all of its acts
and institutions if he had chosen to. Why should at least an equal power be denied the Commander in Chief of the United States Army
to overthrow the substitute government thus erected by the enemy with all of its acts and institutions which are still not beyond
retrieve? Hereafter we shall have occasion to discuss the aspects of this question from the point of view of policy or the practical
convenience of the inhabitants. If the Japanese Commander in Chief represented the sovereignty of Japan, the American Commander in
Chief represented the sovereignty of the United States, as well as the Government of the Commonwealth. If Japan had won this war, her
paramount military supremacy would have continued to be exerted upon the Filipino people, and out of sheer physical compulsion this
country would have had to bow to the continuance of the puppet regime that she had set up here for an indefinite time. In such a case,
we admit that, not because the acts of that government would have intrinsically been legal and valid, but simply because of the
paramount military force to which our people would then have continued to be subjected, they would have had to recognize as binding
and obligatory the acts of the different departments of that government. But fortunately for the Filipinos and for the entire civilized
world, Japan was defeated. And I now ask: Now that Japan has been defeated, why should the Filipinos be still bound to respect or
recognize validity in the acts of that Japanese- sponsored government which has been so severely condemned by both the heads of the
United States and our Commonwealth Government throughout the duration of the war? If we were to draw a parallel between that
government and that which was established by the Confederate States during the American Civil War, we will find that both met with
ultimate failure. And, in my opinion, the conclusion to be drawn should be the same in both cases.
As held by the United States Supreme Court in Williams vs. Bruffy (supra), referring to the Confederate Government, its
failure carried with it the dissipation of its pretentions and the breaking down in pieces of the whole fabric of its government. The Court
said among other things:
"The immense power exercised by the government of the Confederate States for nearly 4 years, the territory
over which it extended, the vast resources it wielded, and the millions who acknowledged its authority, present an
imposing spectacle well fitted to mislead the mind in considering the legal character of that organization. It claimed to
represent an independent nation and to possess sovereign powers; and as such to displace the jurisdiction and
authority of the United States from nearly half of their territory and, instead of their laws, to substitute and enforce
those of its own enactment. Its pretensions being resisted, they were submitted to the arbitrament of war. In that
contest the Confederacy failed; and in its failure its pretensions were dissipated, its armies scattered, and the whole
fabric of its government broken in pieces." (24 Law ed., 719; emphasis ours.)

By analogy, if the Japanese invasion and occupation of the Philippines had been lawful which, however, is not the case
and if Japan had succeeded in permanently maintaining the government that she established in the Philippines, which would have been
the case had victory been hers, there would be more reason for holding the acts of that government valid, but because Japan has lost the
war and therefore, failed in giving permanence to that government, the contrary conclusion should legitimately follow.
The validity of legislation exercised by either contestant "depends not upon the existence of hostilities but upon the ultimate
success of the party by which it is adopted" (emphasis ours). And, referring to the overthrow of the Confederacy, the Court said, "when its
military forces were overthrown, it utterly perished, and with it all its enactments" (emphasis ours).
The majority cite on pages 9-10 of their opinion a passage from the same case of Williams vs. Bruffy, supra, which is a
mere obiter dictum. The majority opinion says that in this passage the Court was "discussing the validity of the acts of the Confederate
States". In the first place, an examination of the decision will reveal that the controversy dealt with an act of the Confederate
Government, not of the Confederate States individually; and in the second place, the quoted passage refers to something which was not
in issue in the case, namely, the acts of the individual States composing the Confederacy. But even this passage clearly places the case at
bar apart from the Court's pronouncement therein. The quoted passage commences by stating that "The same general form of
government, the same general laws for the administration of justice and the protection of private rights, which has existed in the States
prior to the rebellion, remained during the (its) continuance and afterwards." In the case at bar, the same general form of the
Commonwealth Government did not continue under the Japanese, for the simple reason that one of the first acts of the invaders was to
overthrow the Commonwealth Constitution and, therefore, the constitutional government which existed thereunder, as an effect of the
following acts and decrees of the Commander in Chief of the Imperial Japanese Forces:
1.Order No. 3, dated February 20, 1942 of the Commander in Chief of the Imperial Japanese Forces to the Chairman of the
Philippine Executive Commission directed that, in the exercise of legislative, executive and judicial powers in the Philippines, the
"activities" of the "administrative organs and judicial courts in the Philippines shall be based upon the existing statutes, orders,
ordinances and customs until further orders," etc., significantly omitting the Commonwealth Constitution (1 Official Journal of the
Japanese Military Administration, page 34). Under the frame of government existing in this Commonwealth upon the date of the
Japanese invasion, the Constitution was the very fountain-head of the validity and effects of all the "statutes, orders, and ordinances"
mentioned by the Japanese Commander in Chief, and in overthrowing the Constitution he, in effect, overthrew all of them.
2.Instruction No. 6 of the Japanese Military Administration (Vol. 1, pages 36 et seq., Official Gazzette, edited at the Office of
the Executive Commission) gave the "Detailed Instructions Based on Guiding Principles of Administration," and among other things
required "The entire personnel shall be required to pledge their loyalty to the Imperial Japanese Forces . . .." (This, of course, was
repugnant to the frame of government existing here under the Commonwealth Constitution upon the date of invasion.)
3.Proclamation dated January 3, 1942 of the Japanese Commander in Chief provided in paragraph 3 that "The Authorities
and the People of the Commonwealth should sever their relations with the U.S.A. . . ." (This is likewise, repugnant to the Commonwealth
Constitution and to the Government of that Commonwealth which was expressly made subject made subject to the supreme sovereignty

of the United States until complete independence is granted, not by the mere will of the United States, but by virtue of an agreement
between that Government and ours, under the Tydings-McDuffie Act.)
The individual States of the Confederacy and their governments existed prior to the Civil War and had received the sanction
and recognition of the Union Government, for which the Federal Supreme Court was speaking in the Williams-Bruffy case; while the
Japanese- sponsored governments of the "Philippine Executive Commission" and the "Republic of the Philippines" neither existed here
before the war nor had received the recognition or sanction of either the United States or the Commonwealth Government nay, they
had received the most vigorous condemnation of both.
The Court further says in Williams vs. Bruffy (supra):
"No case has been cited in argument , and we think none can be found, in which the Acts of a portion of a
State unsuccessfully attempting to establish a separate revolutionary government have been sustained as a matter of
legal right. As justly observed by the late Chief Justice in the case of Shortridge vs. Macon, 1 Abb. U.S., 58, decided at
the circuit, and, in all material respects like the one at bar, 'Those who engage in rebellion must consider the
consequences. If they succeed, rebellion becomes revolution, and the new government will justify its founders. If they
fall, all their acts hostile to the rightful government are violations of law, and originate no rights which can be
recognized by the courts of the nation whose authority and existence have been alike assailed.' S. C., Chase, Dec., 136."
(Williams vs. Bruffy, 96 U.S., 176; 24 Law. ed., 716,718.) (Italics ours.)
I am of opinion that the principles thus enunciated for the case of an unsuccessful rebellion should be applied with greater
force to the case of a belligerent who loses the war. And since the founding of the Japanese-sponsored government in the Philippines was
designed to supplant and did actually supplant the rightful government and since all its acts could not but be hostile to the latter
(however blameless the officials who acted under enemy duress might be), and since Japan failed, all said acts, particularly those of the
Japanese-sponsored court in said civil case No. 3012, "are violations of law, and originate no rights which can be recognized by the courts
of the nation whose authority and existence have been alike assailed", quoting the language of the court in Shortridge vs. Macon, cited
by Mr. Justice Field in Williams vs. Bruffy,supra (24 Law. ed., 718).
II
(a)The government styled as, first, the "Philippine Executive Commission" and later as the "Republic of the
Philippines", established here by the Commander in Chief of the Imperial Japanese Forces or by his order was not a de
facto government the so-called Court of First Instance of Manila was not a de facto court, and the judge who presided
it was not de facto judge;
(b)The rules of International Law regarding the establishment of a de facto government in territory belonging
to a belligerent but occupied or controlled by an opposing belligerent are inapplicable to the governments thus
established here by Japan.
Under the doctrine of Williams vs. Bruffy, supra, and the pertinent case therein cited, the short-lived provisional governments
thus established by the Japanese in the Philippines should be classified, at best, as a government of paramount force. But this is not all.
The Constitution of this Commonwealth which has been expressly approved by the United States Governments, in Article II, section 3,
under the heading "Declaration of Principles", renounces war as an instrument of national policy. This renunciation of war as an
instrument of national policy follows an equal renunciation in the Briand-Kellog Pact. The rules of International Law, cited in support of
the power or right of a belligerent army of occupation to set up a provisional government on occupied enemy territory, were evolved prior
to the first World War, but the horrors and devastations of the war convinced, at least the governments of the United States and France,
that they should thereafter renounce was as an instrument of national policy, and they consequently subscribed the Briand-Kellog Pact.
Those horrors and devastations were increased a hundred fold, if not more, in this second World War, but even before this war occurred,
our own people , through our Constitutional delegates, who framed the Commonwealth Constitution also adopted the same doctrine, and
embodied an express renunciation of war as an instrument of national policy in the instrument that they drafted. It is true that in
section 3, Article II, above-cited, our Constitution adopts the generally accepted principles of International Law as a part of the law of
the Nation. But, of course, this adoption is exclusive of those principles of International Law which might involve recognition of war as
an instrument of national policy. It is plain that on the side of the Allies, the present war is purely defensive. When Japan started said
war, treacherously and without previous declaration, and attacked Pearl Harbor and the Philippines on those two fateful days of
December 7 and 8, 1941, she employed war as instrument of her national policy. Under the Briand-Kellog Pact and our Commonwealth
Constitution, the United States and the Commonwealth Government could not possibly have recognized in Japan any right, as against
them, to employ that war as an instrument of her national policy, and, consequently, they could not have recognized in Japan the power
to set up in the Philippines the puppet government that she later set up, because such power would be a mere incident or consequence of
the war itself. The authorities agree that such a power, under the cited rules, is said to be a right derived from war. (67 C. J., p. 421, sec
171.) There can be no question that the United States and the Commonwealth Governments were free to refuse to be bound by those
rules when they made their respective renunciations above referred to. Indeed, all the United Nations have exercised this free right in
their Charter recently signed at San Francisco.

As a necessary consequence of this, those rules of International Law were no longer applicable to the Philippines and to the
United States at the time of the Japanese invasion and as a corollary, it follows that we have no legal foundation on which to base the
proposition that the acts of that Japanese-sponsored government in the Philippines were valid & binding. Moreover, I am of opinion,
that although at the time of Japanese invasion & up to the present, the United States retains over the Philippines, a certain measure of
sovereignty, it is only for certain specified purposes enumerated in the Tydings-McDuffie Act and the Commonwealth Constitution.
(Ordinance appended to the Constitution.) And our territory was at the time of the Japanese invasion not a territory of the United

States, within the meaning of the laws of war governing war-like operations on enemy territory. Our territory is significantly called "The
National Territory" in Article I of our Constitution and this bears the stamp of express approval of the United States Government. The
Philippines has been recognized and admitted as a member of the United Nations. We, therefore, had our own national & territorial
identity previous to that invasion. Our nation was not at war with Japan and has never been. The Japanese, themselves, were
proclaiming to the world that they were not at war with the Filipinos. And in line with this, the Japanese army, in time released Filipino
war prisoners captured in Bataan. Lt. Gen. Maeda, Chief of Staff, Imperial Japanese Forces, in his speech of January 2, 1942, said:
". . . we had not the slightest intentions to make your people our enemy; rather we considered them as our
friends who will join us hand-in-hand in the establishment of an orderly Greater East Asia . . . ." (Official Gazette,
edited at the Office of the Executive Commission, Vol. I, p. 55.)
If the Philippines was a neutral territory when invaded by the Japanese, the following principles from Lawrence, International
Law (7th ed.), p. 603 are pertinent:
"The Duties of Belligerent States towards Neutral States. . . . To refrain from carrying on hostilities within
neutral territory. We have already seen that, though this obligation was recognized in theory during the infancy of
International law, it was often very imperfectly observed in practice. But in modern times it has been strictly enforced,
and any State which knowingly ordered warlike operations to be carried on in neutral territory, . . . would bring down
upon itself the reprobation of civilized mankind. Hostilities may be carried on in the territory of either belligerent, on
the high seas, and in the territory belonging to no one. Neutral land and neutral territorial waters are sacred. No acts
of warfare may lawfully take place within them. . . ." (Emphasis ours.)
In all the cases and authorities supporting the power or right to set up a provisional government, the belligerent had the right
to invade or occupy the territory in the first instance. Such was not the case with the Philippines. President Roosevelt, in his message to
the Filipino people, soon after the landing of American Forces in Leyte, on October 20, 1944, characterized Japan's invasion and
occupation of the Philippines as "the barbarous, unprovoked and treacherous attack upon the Philippines," and he announced the
American people's "firm determination to punish the guilty." (41 Off. Gaz., 149.) (Italics ours.) The illustrious leader of the United
Nations could not have declared in more unmistakable terms the utter illegality of that invasion and occupation. If the establishment of
a provisional government in occupied territory by a belligerent is "a mere application or extension of the force by which the invasion or
occupation was effected" (67 C. J., p. 421, sec 171), the illegality of the invasion, would necessarily permeate that government, which was
its mere application or extension.
The fact that shortly before December 8, 1941, the date of the "barbarous, unprovoked and treacherous attack," the meager
and almost untrained forces of the Philippine Army had been inducted into the American Army, did not change the neutral status of the
Philippines. That military measure had been adopted for purely defensive purposes. Nothing could be farther from the minds of the
government and military leaders of the United States and the Philippines in adopting it than to embark upon any aggressive or warlike
enterprise against any other nation. It is an old and honored rule dating as far back as the 18th century than even solemn promises of
assistance made before the war by a neutral to a nation which later becomes a belligerent, would not change the status of the neutral
even if such promises were carried out, so long as they were made for purely defensive purposes. In the words of Vattel "when a
sovereign furnishes the succor due in virtue of a former defensive alliance, he does not associate himself in the war. Therefore he may
fulfill his engagements and yet preserve an exact neutrality." (Lawrence, Principles of International Law [7th ed.], pp. 585, 586.)
If the Filipinos had, from contemptible cowardice and fear, allowed their shores to be invaded, and their territory occupied by
the Japanese without resistance, such invasion and occupation would undoubtedly have been considered in violation of International
Law. Should the Filipinos be punished for having had the patriotism, bravery, and heroism to fight in defense of the sacredness of their
land, the sanctity of their homes, and the honor and dignity of their government, by giving validity, in whatever limited measure, to the
lawless acts of the ruthless enemy who thus overran their country, and robbed them of the tranquility and happiness of their daily lives?
And yet, to my mind, to give any measure of validity or binding effect to the proceedings of the Japanese-sponsored Court of First
Instance of Manila, involved herein, would be to give that much validity or effect to the acts of those same invaders. To equalize the
consequences of a lawful and a wrongful invasion of occupation, would be to equalize right and wrong, uphold the creed that might
makes right, and adopt "the law of the jungle."
If said Japanese-sponsored government was not a de facto government, it would seem clearly to follow that its "Court of First
Instance of Manila" was not a de factocourt. But it should additionally be stated that for it to be a de facto court, its judge had to be a de
facto judge, which he could not be, as presently demonstrated.
As said by President Osmea, in replying to the speech of General of the Army MacArthur when the latter turned over to him
the full powers and responsibilities of the Commonwealth Government, on February 27, 1945:
xxx xxx xxx
"The time has come when the world should know that when our forces surrendered in Bataan and Corregidor,
resistance to the enemy was taken up by the people itself resistance which was inarticulate and disorganized in its
inception but which grew from day to day and from island to island, until it broke out into an open warfare against the
enemy.
"The fight against the enemy was truly a people's war because it counted with the wholehearted support of
the masses. From the humble peasant to the barrio school teacher, from the volunteer guard to the women's auxiliary
service units, from the loyal local official to the barrio folk each and every one of those contributed his share in the
great crusade for liberation.

"The guerillas knew that without the support of the civilian population, they could not survive. Whole towns
and villages dared enemy reprisal to oppose the hated invader openly or give assistance to the underground movement .
. ." (41 Off. Gaz., 88,89.)
Under these facts, taken together with General of the Army MacArthur's accurate statement that the "Republic of the
Philippines" had been established under enemy duress, it must be presumed to say the least that the judge who presided over the
proceedings in question during the Japanese occupation, firstly, accepted his appointment under duress; and secondly, acted by virtue of
that appointment under the same duress. In such circumstances he could not have acted in the bona fide belief that the new "courts"
created by or under the orders of the Japanese Military Commander in Chief had been legally created among them the "Court of First
Instance of Manila," that the Chairman of the "Philippine Executive Commission" or the President of the "Republic of the
Philippines", whoever appointed him, had conferred upon him a valid title to his office and a legitimate jurisdiction to act as such judge.
Good faith is essential for the existence of a de facto judge (Tayco vs. Capistrano, 53 Phil., 866, 872). The very idea of enemy duress
would necessarily imply that but for the duress exerted upon him by the enemy he would have refused to accept the appointment and to
act thereunder. And why? Because he must be presumed to know that the office to which he was thus appointed had been created by the
enemy in open defiance of the Commonwealth Constitution and the laws and regulations promulgated by our Commonwealth
Government, and that his acceptance of said office and his acting therein, if willfully done, would have been no less than an open
hostility to the very sovereignty of the United States and to the Commonwealth Government, and a renunciation of his allegiance to
both. There is no middle ground here. Either the judge acted purely under duress, in which case his acts would be null and void; or
maliciously in defiance of said governments, in which case his acts would be null and void for more serious reasons.
The courts created here by the Japanese government had to look for the source of their supposed authority to the orders of the
Japanese Military Commander in Chief and the so-called Constitution of the "Republic of the Philippines," which had been adopted in a
manner which would shock the conscience of democratic peoples, and which was designed to supplant the Constitution which had been
duly adopted by the Filipino people in a Constitutional Convention of their duly elected Constitutional Delegates. And it was decreed
that the Commander in Chief of the Imperial Japanese Forces "shall exercise jurisdiction over judicial courts." (Vol. 1, p.7, Official
Journal of the Japanese Military Administration, cited on pp. 2,3, of the order of the respondent judge complained of and marked
Exhibit H of the petition for mandamus.) How can our present courts legitimately recognize any efficacy in the proceedings of such an
exotic judicial system, wherein the Commander in Chief of the Imperial Japanese Forces possessed the highest judicial jurisdiction?

III
The courts of those governments were entirely different from our Commonwealth courts before and after the
Japanese occupation.
Executive Order No. 36 of the President of the Philippines, dated March 10, 1945, in its very first paragraph, states the prime
concern of the government "to re-establish the courts as fast as provinces are liberated from the Japanese occupation." If the courts
under the Japanese-sponsored government of the "Republic of the Philippines" were the same Commonwealth courts that existed here
under the Constitution at the time of the Japanese invasion, President Osmea would not be speaking of re-establishing those courts in
his aforesaid Executive Order. Forsooth, how could those courts of the Commonwealth of the Philippines when they were not functioning
under the Constitution of the Commonwealth and the laws enacted in pursuance of said Constitution? The jurisdiction of the
Commonwealth courts was defined and conferred under the Commonwealth Constitution and the pertinent legislation enacted
thereunder, that of the Japanese- sponsored courts was defined and conferred by the orders and decrees of the Japanese Commander in
Chief, and, perhaps, the decrees of the "Philippine Executive Commission" and the laws of the so-called Legislature under the Republic,
which was not composed of the elected representatives of the people. The Justices and Judges of the Commonwealth courts had to be
appointed by the President of the Commonwealth with confirmation by the Commission on Appointments, pursuant to the
Commonwealth Constitution. The Chief Justice of the Supreme Court, under the "Philippine Executive Commission" was appointed by
the Commander in Chief of the Imperial Japanese Forces, and the Associate Justices of the Supreme Court, the Presiding Justice and
Associate Justices of the Court of Appeals, the Judges of First Instance and of all inferior courts were appointed by the Chairman of the
Executive Commission, at first, and later, by the President of the republic, of course, without confirmation by the Commission on
Appointments under the Commonwealth Constitution. The Chief Justice and Associate Justices of the Supreme Court, the Presiding
and Associate Justices of the Court of Appeals, and the Judges of First Instance and of all inferior courts in the Commonwealth judicial
system, had to swear to support and defend the Commonwealth Constitution, while this was impossible under that Japanese-sponsored
government. In the Commonwealth judicial system, if a Justice or Judge should die or be incapacitated to continue in the discharge of
his official duties, his successor was appointed by the Commonwealth President with confirmation by the Commission on Appointments,
and said successor had to swear to support and defend the Commonwealth Constitution; in the exotic judicial system implanted here by
the Japanese, if a Justice or Judge should die or be so incapacitated, his successor would be appointed by the Japanese Commander in
Chief, if the dead or incapacitated incumbent should be the Chief Justice of the Supreme Court, or otherwise, by the Chairman of the
"Executive Commission" or the President of the "Republic", of course without confirmation by the Commission on Appointments of the
Commonwealth Congress, and, of course, without the successor swearing to support and defend the Commonwealth Constitution.
If, as we believe having conclusively shown, the Japanese-sponsored courts were not the same Commonwealth courts, the
conclusion is unavoidable that any jurisdiction possessed by the former and any cases left pending therein, were not and could not be
automatically transferred to the Commonwealth courts which were re- established under Executive Order No. 36. For this purpose, a
special legislation was necessary.
Executive Order No. 37, in my humble opinion, does not, as held by the majority, imply that the President recognized as valid
the proceedings in all cases appealed to the Court of Appeals. Section 2 of that order simply provides that all cases which have
been duly appealed to the Court of Appeals shall be transmitted to the Supreme Court for final decision. The adverb "duly" would

indicate that the President foresaw the possibility of appeals not having been duly taken. All cases appealed to the Court of Appeals
before the war and otherwise duly appealed, would come under the phrase "duly appealed" in this section of the Executive Order. But
considering the determined and firm attitude of the Commonwealth Government towards those Japanese-sponsored governments since
the beginning, it would seem inconceivable that President Osmea, in section 2 of Executive Order No. 37, intended to include therein
appeals taken to the Japanese- sponsored Court of Appeals, or from the Japanese sponsored inferior courts. It should be remembered
that in the Executive Order immediately preceding and issued on the same date, the said President speaks of re-establishing the courts
as fast as provinces were liberated from the Japanese occupation.
IV
The question boils down to whether the Commonwealth Government, as now restored, is to be bound by the
acts of either or both of those Japanese-sponsored governments.
In the last analysis, in deciding the question of validity or nullity of the proceedings involved herein, we are confronted with
the necessity to decide whether the Court of First Instance of Manila and this Supreme Court, as re-established under the
Commonwealth Constitution, and the entire Commonwealth Government, are to be bound by the acts of the said Japanese-sponsored
court and government. To propound this question, to my mind, to answer it most decidedly in the negative, not only upon the ground of
legal principles but also for reasons of national dignity and international decency. To answer the question in the affirmative would be
nothing short of legalizing the Japanese invasion and occupation of the Philippines. Indeed, it would be virtual submission to the
dictation of an invader our people's just hatred of whom gave rise to the epic Philippine resistance movement, which has won the
admiration of the entire civilized world.
V
Even considerations of policy or practical convenience militate against petitioner's contention.
In this connection, the respondent judge, in his order of June 6, 1945, complained of, has the following to say:
"It is contended, however, that the judicial system implanted by the Philippine Executive Commission and the
Republic was the same as that of the Commonwealth prior to Japanese occupation; that the laws administered and
enforced by said courts during the existence of said regime were the same laws on the statute books of the
Commonwealth before Japanese occupation, and that even the judges who presided them were, in many instances, the
same persons who held the position prior to Japanese occupation. All this may be true, but other facts are just as
stubborn and pitiless. One of them is that said courts were of a government alien to the Commonwealth Government.
The laws they enforced were, true enough, laws of the Commonwealth prior to Japanese occupation, but they had
become the laws and the Courts had become the institutions of Japan by adoption (U.S. vs. Reiter, 27 F. Case No.
16, 146), as they became later on the laws and institutions of the Philippine Executive Commission and the Republic of
the Philippines. No amount of argument or legal fiction can obliterate this fact."
Besides, I am of the opinion that the validity of the acts of the courts in the "judicial system implanted by the Philippine
Executive Commission and the Republic" would not depend upon the laws that they "administered and enforced", but upon
the authority by virtue of which they acted. If the members of this Court were to decide the instant case in strict accordance with the
Constitution and laws of the Commonwealth but not by the authority that they possess in their official capacity as the Supreme Court of
the Philippines, but merely as lawyers, their decision would surely be null and void. And yet, I am firmly of opinion that whoever was the
"judge" of the Japanese- sponsored Court of First Instance of Manila who presided over the said court when the proceedings and
processes in dispute were had, in acting by virtue of the supposed authority which he was supposed to have received from that
government, did so with no more legal power than if he had acted as a mere lawyer applying the same laws to the case. If duplication of
work or effort, or even if confusion, should be alleged to possibly arise from a declaration of nullity of judicial proceedings had before
those Japanese-sponsored courts, it should suffice to answer that the party so complaining in voluntarily resorting to such courts should
be prepared to assume the consequences of his voluntary act. On the other hand, his convenience should not be allowed to visit upon the
majority of the inhabitants of this country, the dire consequences of a sweeping and wholesale validation of judicial proceedings in those
courts. Let us set forth a few considerations apropos of this assertion. It is a fact of general knowledge that during the Japanese
occupation of the Philippines, the overwhelming majority of our people and other resident inhabitants were literally afraid to go to any
place where there were Japanese sentries, soldiers or even civilians, and that these sentries were posted at the entrance into cities and
towns and at government offices; that the feared Japanese "M.P.'s" or "Kempeitai's" were a constant terror to them; and lastly, that the
greater number who lived of had evacuated to places far from the Japanese, were also afraid of the fifth columnists who, unfortunately,
were found precisely in the cities and towns where the courts were located; and as a consequence, the great majority of the people were
very strongly averse to traveling any considerable distance from their homes and were, one might say, in constant hiding. Add to these
circumstances, the fact of the practical absence of transportation facilities and the no less important fact of the economic structure
having been so dislocated as to have impoverished the many in exchange for the enrichment of the few and we shall have a fair picture
of the practical difficulties which the ordinary litigant would in those days have encountered in defending his rights against anyone of
the favored few who would bring him to court. It should be easy to realize how hard it was for instance, to procure the attendance of
witnesses, principally because of the fact that most of them were in hiding or, at least, afraid to enter the cities and towns, and also
because of the generally difficult and abnormal conditions prevailing. Under such conditions, cases of denial of a party's day in court, as
known in our constitutional government, were to be expected. Such denial might arise from many a cause. It might be the party's fear to
appear before the court because in doing so, he would have had to get near the feared Japanese. It might be because he did not recognize
any legal authority in that court, or it might be his down-right repugnance of the hated enemy. And I dare say that among such people
would be found more than seventeen million of the eighteen million Filipinos. These are but a few of countless causes. So that if some
form of validation of such judicial proceedings were to be attempted, all necessary safeguards should be provided to avoid that in any
particular case the validation should violate any litigant's constitutional right to his day in court, within the full meaning of the phrase,

or any other constitutional or statutory right of his. More people, I am afraid, would be prejudiced than would be benefited by a
wholesale validation of said proceedings.

Much concern has been shown for the possible confusion which might result from a decision declaring null and void the acts
and processes of the Japanese-sponsored governments in the Philippines. I think, this aspect of the question has been unduly stressed.
The situation is not without remedy, but the remedy lies with the legislature and not with the courts. As the courts cannot create a new
or special jurisdiction for themselves, which is a legislative function, and as the situation demands such new or special jurisdiction, let
the legislature act in the premises. For instance, the Congress may enact a law conferring a special jurisdiction upon the courts of its
selection, whereby said courts may, after hearing all the parties interested, and taking all the necessary safeguards, so that, a party's
day in court or other constitutional or statutory right under the Commonwealth Government should not be prejudiced by any of said
acts, processes or proceedings, particularly those in the Japanese-sponsored courts, and subject to such other conditions as the special
law may provide, validate the corresponding acts, processes or proceedings. This, is to my mind, would be more conducive to a maximum
of benefit and a minimum of prejudice to the inhabitants of this country, rather than the procedure favored by the majority.
Finally, let us not equalize the conditions then prevailing in Manila to that prevailing in the provinces, where the greater
number of the people were then living outside the towns, in the farms and the hills. These people constitute the great majority of the
eighteen million Filipinos. To them the semblance of an administration of justice which the Japanese allowed, was practically unknown.
But they constituted the majority of loyal citizens to whom President Roosevelt's message of October 23, 1943 refers. They the
majority of our people had an unshaken faith in the arrival of American aid here and the final triumph of the Allied cause. They were
willing to wait for the restoration of their rightful government, with its courts and other institutions, for the settlement of their
differences. Nay, in their common hardships and sufferings under the yoke of foreign oppression, they had not much time to think of such
differences, if they did not utterly forget them. Their undoubted hatred of the invader was enough to keep them away from the judicial
system that said invader allowed them to have. Those who voluntarily went to the courts in those tragic days belong to the small
minority.
As to public order why! any public order which then existed was not due to the courts or other departments of the puppet
government. It was maintained at the point of the bayonet by the Japanese army, and in their own unique fashion.

Digest
Facts of the case: Co Kim Chan had a pending civil case, initiated during the Japanese occupation, with the Court of First
Instance of Manila. After the Liberation of the Manila and the American occupation, Judge Arsenio Dizon refused to continue
hearings on the case, saying that a proclamation issued by General Douglas MacArthur had invalidated and nullified all
judicial proceedings and judgments of the courts of the Philippines and, without an enabling law, lower courts have no
jurisdiction to take cognizance of and continue judicial proceedings pending in the courts of the defunct Republic of the
Philippines (the Philippine government under the Japanese).
The court resolved three issues:
1.

Whether or not judicial proceedings and decisions made during the Japanese occupation were valid and remained

valid even after the American occupation;


2.

Whether or not the October 23, 1944 proclamation MacArthur issued in which he declared that all laws, regulations

and processes of any other government in the Philippines than that of the said Commonwealth are null and void and without
legal effect in areas of the Philippines free of enemy occupation and control invalidated all judgments and judicial acts and
proceedings of the courts;
3.

And whether or not if they were not invalidated by MacArthurs proclamation, those courts could continue hearing

the cases pending before them.


Ratio: Political and international law recognizes that all acts and proceedings of a de facto government are good and valid.
The Philippine Executive Commission and the Republic of the Philippines under the Japanese occupation may be considered
de facto governments, supported by the military force and deriving their authority from the laws of war.
Municipal laws and private laws, however, usually remain in force unless suspended or changed by the conqueror. Civil
obedience is expected even during war, for the existence of a state of insurrection and war did not loosen the bonds of
society, or do away with civil government or the regular administration of the laws. And if they were not valid, then it would
not have been necessary for MacArthur to come out with a proclamation abrogating them.
The second question, the court said, hinges on the interpretation of the phrase processes of any other government and
whether or not he intended it to annul all other judgments and judicial proceedings of courts during the Japanese military

occupation.
IF, according to international law, non-political judgments and judicial proceedings of de facto governments are valid and
remain valid even after the occupied territory has been liberated, then it could not have been MacArthurs intention to refer
to judicial processes, which would be in violation of international law.
A well-known rule of statutory construction is: A statute ought never to be construed to violate the law of nations if any
other possible construction remains.
Another is that where great inconvenience will result from a particular construction, or great mischief done, such
construction is to be avoided, or the court ought to presume that such construction was not intended by the makers of the
law, unless required by clear and unequivocal words.
Annulling judgments of courts made during the Japanese occupation would clog the dockets and violate international law,
therefore what MacArthur said should not be construed to mean that judicial proceedings are included in the phrase
processes of any other governments.
In the case of US vs Reiter, the court said that if such laws and institutions are continued in use by the occupant, they become
his and derive their force from him. The laws and courts of the Philippines did not become, by being continued as required by
the law of nations, laws and courts of Japan.
It is a legal maxim that, excepting of a political nature, law once established continues until changed by some competent
legislative power. IT IS NOT CHANGED MERELY BY CHANGE OF SOVEREIGNTY. Until, of course, the new sovereign by
legislative act creates a change.
Therefore, even assuming that Japan legally acquired sovereignty over the Philippines, and the laws and courts of the
Philippines had become courts of Japan, as the said courts and laws creating and conferring jurisdiction upon them have
continued in force until now, it follows that the same courts may continue exercising the same jurisdiction over cases pending
therein before the restoration of the Commonwealth Government, until abolished or the laws creating and conferring
jurisdiction upon them are repealed by the said government.
DECISION: Writ of mandamus issued to the judge of the Court of First Instance of Manila, ordering him to take cognizance of
and continue to final judgment the proceedings in civil case no. 3012.
Summary of ratio:
1.

International law says the acts of a de facto government are valid and civil laws continue even during occupation

unless repealed.
2.

MacArthur annulled proceedings of other governments, but this cannot be applied on judicial proceedings because

such a construction would violate the law of nations.


3.

Since the laws remain valid, the court must continue hearing the case pending before it.

***3 kinds of de facto government: one established through rebellion (govt gets possession and control through force or the
voice of the majority and maintains itself against the will of the rightful government)
through occupation (established and maintained by military forces who invade and occupy a territory of the enemy in the
course of war; denoted as a government of paramount force)
through insurrection (established as an independent government by the inhabitants of a country who rise in insurrection
against the parent state

4) EN BANC
[G.R. No. L-7995. May 31, 1957.]

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships
adversely affected by Republic Act No. 1180, petitioner, vs. JAIME HERNANDEZ, Secretary of Finance, and
MARCELINO SARMIENTO, City Treasuer of Manila, respondent.

Ozaeta, Lichauco & Picazo and Sycip, Quisumbing, Salazar & Associates for petitioner.
Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent Secretary of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.

SYLLABUS
1.CONSTITUTIONAL LAW; POLICE POWER; NATURE AND SCOPE. Police power is far-reaching in scope, and it is
almost impossible to limit its sweep. It derives its existence from the very existence of the State itself, and does not need to be expressed
or defined in its scope. It is said to be co-extensive with self - protection and survival, and as such it is the most positive and active of all
governmental processes, the most essential, insistent and illimitable. Especially is it so under a modern democratic framework where
the demands of society and of nations have multiplied to almost unimaginable proportions; the field and scope of police power has
become almost boundless, just as the fields of public interest and public welfare have become almost all-embracing and have transcended
human foresight.
2.ID.; GUARANTEES IN SECTION I, ARTICLE III OF THE CONSTITUTION; UNIVERSALITY OF APPLICATION. The
constitutional guarantees in Section I, Article III, of the Constitution, which embody the essence of individual liberty and freedom in
democracies, are not limited to citizens alone but are admittedly universal in their application, without regard to any differences of race,
of color, or of nationality (Yiek Wo vs. Hopkins, 30 L. ed., 220, 226).
3.ID.; LAW DEPRIVATION OF LIFE, LIBERTY OR PROPERTY; TEST OR STANDARD. The conflict between police power
and the guarantees of due process and equal protection of the laws is more apparent than real. Properly related, the power and the
guarantees are supposed to coexist. The balancing is the essence, or the indispensable means for the attainment of legitimate
aspirations of any democratic society. There can be no absolute power, whoever exercises it, for that would be tyranny. Yet there can
neither be absolute liberty, for that would mean license and anarchy. So the State can deprive persons of life, liberty or property,
provided there is due process of law; and persons may be classified into classes and groups, provided everyone is given the equal
protection of the law. The test or standard, as always, is reason. The police power legislation must be firmly grounded on public interest
and welfare, and a reasonable relation must exist between purposes and means. And if distinction or classification has been made, there
must be a reasonable basis for said distinction.
4.ID.; EQUAL PROTECTION OF THE LAW CLAUSE; WHEN NOT DEEMED INFRINGED BY LEGISLATION. The equal
protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of
inequality. It is not intended to prohibit legislation, which is limited either in the object to which it is directed or by territory within
which it is to operate. It does not demand absolute equality among residents; it merely requires that all persons shall be treated alike,
under like circumstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause is not
infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such
class, and reasonable grounds exist for making a distinction between those who fall within such class and those who do not (2 Cooley,
Constitutional Limitations, 824-825).
5.ID.; ID.; LEGISLATIVE POWER TO MAKE DISTINCTION AND CLASSIFICATION AMONG PERSONS; CITIZENSHIP
AS GROUND FOR CLASSIFICATION. The Power of the legislature to make distinctions and classifications among persons is not
curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide scope of discretion, and a law can be
violative of the constitutional limitation only when the classification is without reasonable basis. Citizenship is a legal and valid ground
for classification.
6.ID.; ID.; NATIONALIZATION OF RETAIL TRADE; CLASSIFICATION IN REPUBLIC ACT NO. 1180 ACTUAL, REAL
AND REASONABLE. The classification in the law of retail traders into nationals and aliens is actual, real and reasonable. All
persons of one class are treated alike, and it cannot be said that the classification is patently unreasonable and unfounded. Hence, it is

the duty of this Court to declare that the legislature acted within its legitimate prerogative and it cannot declare that the act transcends
the limits of equal protection established by the Constitution.
7.ID.; ID.; ID.; ID.; TEST OF REASONABLENESS. The law in question is deemed absolutely necessary to bring about the
desired legislative objective, i.e., to free the national economy from alien control and dominance. It is not necessarily unreasonable
because it affects private rights and privileges (II Am. Jur., pp. 1080-1081). The test of reasonableness of a law is the appropriateness or
adequacy under all circumstances of the means adopted to carry out its purpose into effect. Judged by this test, the disputed legislation,
which is not merely reasonable but actually necessary, must be considered not to have infringed the constitutional limitation of
reasonableness.
8.ID.; ID.; ID.; ID.; ID.; REPUBLIC ACT NO. 1180 TOLERANT AND REASONABLE. A cursory study of the provisions of
the law immediately reveals how tolerant and reasonable the Legislature has been. The law is made prospective and recognizes the right
and privilege of those already engaged in the occupation to continue therein during the rest of their lives; and similar recognition of the
right to continue is accorded associations of aliens. The right or privilege is denied only to persons upon conviction of certain offenses.
9.ID.; ID.; ID.; ATTAINMENT OF LEGISLATIVE ASPIRATIONS OF A PEOPLE NOT BEYOND THE LIMITS OF
LEGISLATIVE AUTHORITY. If political independence is a legitimate aspiration of a people, then economic independence is none of
less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic control and domination of others,
especially if not of their own race or country. The removal and eradication of the shackles of foreign economic control and domination is
one of the noblest motives that a national legislature may pursue. It is impossible to conceive that legislation that seeks to bring it about
can infringe the constitutional limitation of due process. The attainment of a legitimate aspiration of a people can never be beyond the
limits of legislative authority.
10.ID.; ID.; ID.; NATIONALISTIC TENDENCY MANIFESTED IN THE CONSTITUTION. Nationalistic tendency is
manifested in various provisions of the Constitution. The nationalization of the retail trade is only a continuance of the nationalistic
protective policy laid down as a primary objective of the Constitution. It cannot therefore be said that a law imbued with the same
purpose and spirit underlying many of the provisions of the Constitution is unreasonable, invalid or unconstitutional.
11.ID.; LEGISLATIVE DEPARTMENT; EXERCISE OF LEGISLATIVE DISCRETION NOT SUBJECT TO JUDICIAL
REVIEW. The exercise of legislative discretion is not subject to judicial review. The Court will not inquire into the motives of the
Legislature, nor pass upon general matters of legislative judgment. The Legislature is primarily the judge of the necessity of an
enactment or of any of its provisions, and every presumption is in favor of its validity, and though the Court may hold views inconsistent
with the wisdom of the law, it may not annul the legislation if not palpably in excess of the legislative power.
12.ID.; TITLES OF BILLS; PROHIBITION AGAINST DUPLICITY; PRESENCE OF DUPLICITY NOT SHOWN IN TITLE
OR PROVISIONS OF REPUBLIC ACT NO. 1180. What Section 21(1) of Article VI of the Constitution prohibits is duplicity, that is, if
its title completely fails to apprise the legislators or the public of the nature, scope and consequences of the law or its operation (I
Sutherland, Statutory Construction, Sec. 1707, p. 297). A cursory consideration of the title and the provisions of the bill fails to show the
presence of duplicity. It is true that the term "regulate" does not and may not readily and at first glance convey the idea of
"nationalization" and "prohibition", which terms express the two main purposes and objectives of the law. But "regulate" is a broader
term than either prohibition or nationalization. Both of these have always been included within the term "regulation".
13.ID.; ID.; ID.; ID.; USE OF GENERAL TERMS IN TITLE OF BILL. The general rule is for the use of general terms in the
title of a bill; the title need not be an index to the entire contents of the law (I Sutherland, Statutory Construction, Sec. 4803, p. 345).
The above rule was followed when the title of the Act in question adopted the more general term "regulate" instead of "nationalize" or
"prohibit".
14.ID.; ID.; ID.; ID.; PURPOSE OF CONSTITUTIONAL DIRECTIVE REGARDING SUBJECT OF A BILL. One purpose of
the constitutional directive that the subject of a bill should be embraced in its title is to apprise the legislators of the purposes, the
nature and scope of its provisions, and prevent the enactment into law of matters which have not received the notice, action and study of
the legislators or of the public. In case at bar it cannot be claimed that the legislators have not been apprised of the nature of the law,
especially the nationalization and prohibition provisions. The legislators took active interest in the discussion of the law, and a great
many of the persons affected by the prohibition in the law conducted a campaign against its approval. It cannot be claimed, therefore,
that the reasons for declaring the law invalid ever existed.

15.ID.; INTERNATIONAL TREATIES AND OBLIGATIONS NOT VIOLATED BY REPUBLIC ACT No. 1180; TREATIES
SUBJECT TO QUALIFICATION OR AMENDMENT BY SUBSEQUENT LAW. The law does not violate international treaties and
obligations. The United Nations Charter imposes no strict or legal obligations regarding the rights and freedom of their subjects (Jans
Kelsen, The Law of the United Nations, 1951 ed., pp. 29-32), and the Declaration of Human Rights contains nothing more than a mere
recommendation, or a common standard of achievement for all peoples and all nations. The Treaty of Amity between the Republic of the
Philippines and the Republic of China of April 18, 1947 guarantees equality of treatment to the Chinese nationals "upon the same terms

as the nationals of any other country". But the nationals of China are not discriminated against because nationals of all other countries,
except those of the United States, who are granted special rights by the Constitution, are all Prohibited from engaging in the retail
trade. But even supposing that the law infringes upon the said treaty, the treaty is always subject to qualification or amendment by a
subsequent law (U.S. vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope of the police power of the
State (Palston vs. Pennsylvania 58 L. ed., 539).

DECISION

LABRADOR, J p:
I. The case and the issue, in general
This Court has before it the delicate task of passing upon the validity and constitutionality of a legislative enactment,
fundamental and far-reaching in significance The enactment poses questions of due process, police power and equal protection of the
laws. It also poses an important issue of fact, that is whether the conditions which the disputed law purports to remedy really or actually
exist. Admittedly springing from a deep, militant, and positive nationalistic impulse, the law purports to protect citizen and country
from the alien retailer. Through it, and within the field of economy it regulates, Congress attempts to translate national aspirations for
economic independence and national security, rooted in the drive and urge for national survival and welfare, into a concrete and tangible
measures designed to free the national retailer from the competing dominance of the alien, so that the country and the nation may be
free from a supposed economic dependence and bondage. Do the facts and circumstances justify the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the retail trade business.
The main provisions of the Act are: (1) a prohibition against persons, not citizens of the Philippines, and against associations,
partnerships, or corporations the capital of which are not wholly owned by citizens of the Philippines, from engaging directly or
indirectly in the retail trade; (2) an exception from the above prohibition in favor of aliens actually engaged in said business on May 15,
1954, who are allowed to continue to engage therein, unless their licenses are forfeited in accordance with the law, until their death or
voluntary retirement in case of natural persons, and for ten years after the approval of the Act or until the expiration of term in case of
juridical persons; (3) an exception therefrom in favor of citizens and juridical entities of the United States; (4) a provision for the
forfeiture of licenses (to engage in the retail business) for violation of the laws on nationalization, economic control weights and
measures and labor and other laws relating to trade, commerce and industry; (5) a prohibition against the establishment or opening by
aliens actually engaged in the retail business of additional stores or branches of retail business, (6) a provision requiring aliens actually
engaged in the retail business to present for registration with the proper authorities a verified statement concerning their businesses,
giving, among other matters, the nature of the business, their assets and liabilities and their offices and principal offices of juridical
entities; and (7) a provision allowing the heirs of aliens now engaged in the retail business who die, to continue such business for a
period of six months for purposes of liquidation.
III. Grounds upon which petition is based Answer thereto
Petitioner, for and in his own behalf and on behalf of other alien residents, corporations and partnerships adversely affected by
the provisions of Republic Act No. 1180, brought this action to obtain a judicial declaration that said Act is unconstitutional, and to
enjoin the Secretary of Finance and all other persons acting under him, particularly city and municipal treasurers, from enforcing its
provisions. Petitioner attacks the constitutionality of the Act, contending that: (1) it denies to alien residents the equal protection of the
laws and deprives them of their liberty and property without due process of law; (2) the subject of the Act is not expressed or
comprehended in the title thereof; (3) the Act violates international and treaty obligations of the Republic of the Philippines; (4) the
provisions of the Act against the transmission by aliens of their retail business thru hereditary succession, and those requiring 100%
Filipino capitalization for a corporation or entity to entitle it to engage in the retail business, violate the spirit of Sections 1 and 5,
Article XIII and Section 8 of Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was passed in the valid exercise
of the police power of the State, which exercise is authorized in the Constitution in the interest of national economic survival; (2) the Act
has only one subject embraced in the title; (3) no treaty or international obligations are infringed; (4) as regards hereditary succession,
only the form is affected but the value of the property is not impaired, and the institution of inheritance is only of statutory origin.
IV. Preliminary consideration of legal principles involved
a.The police power.

There is no question that the Act was approved in the exercise of the police power, but petitioner claims that its exercise in this
instance is attended by a violation of the constitutional requirements of due process and equal protection of the laws. But before
proceeding to the consideration and resolution of the ultimate issue involved, it would be well to bear in mind certain basic and
fundamental, albeit preliminary, considerations in the determination of the ever recurrent conflict between police power and the
guarantees of due process and equal protection of the laws. What is the scope of police power and how are the due process and equal
protection clauses related to it? What is the province and power of the legislature, and what is the function and duty of the courts? These
consideration must be clearly and correctly understood that their application to the facts of the case may be brought forth with clarity
and the issue accordingly resolved.
It has been said that police power is so far-reaching in scope, that it has become almost impossible to limit its sweep. As it
derives its existence from the very existence of the State itself, it does not need to be expressed or defined in its scope; it is said to be coextensive with self-protection and survival, and as such it is the most positive and active of all governmental processes, the most
essential, insistent and illimitable. Especially is it so under a modern democratic framework where the demands of society and of
nations have multiplied to almost unimaginable proportions; the field and scope of police power has become almost boundless, just as the
fields of public interest and public welfare have become almost all- embracing and have transcended human foresight. Otherwise stated,
as we cannot foresee the needs and demands of public interest and welfare in this constantly changing and progressive world, so we
cannot delimit beforehand the extent or scope of police power by which and through which the State seeks to attain or achieve public
interest or welfare. So it is that Constitutions do not define the scope or extent of the police power of the State; what they do is to set
forth the limitations thereof. The most important of these are the due process clause and the equal protection clause.
b.Limitations on police power.
The basic limitations of due process and equal protection are found in the following provisions of our Constitution:
"SECTION 1.(1)No person shall be deprived of life, liberty or property without due process of law, nor shall
any person be denied the equal protection of the laws." (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual liberty and freedom in democracies, are not limited to citizens
alone but are admittedly universal in their application, without regard to any differences of race, of color, or of nationality. (Yick Wo vs.
Hopkins, 30, L. ed. 220, 226.)
c.The equal protection clause.
The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination
or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the object to which it is directed or by
territory within which it is to operate. It does not demand absolute equality among residents; it merely requires that all persons shall be
treated alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause
is not infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within
such class, and reasonable grounds exists for making a distinction between those who fall within such class and those who do not. (2
Cooley, Constitutional Limitations, 824-825.)

d.The due process clause.


The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police power, Is there
public interest, a public purpose; is public welfare involved? Is the Act reasonably necessary for the accomplishment of the legislature's
purpose; is it not unreasonable, arbitrary or oppressive? Is there sufficient foundation or reason in connection with the matter involved;
or has there not been a capricious use of the legislative power? Can the aims conceived be achieved by the means used, or is it not merely
an unjustified interference with private interest? These are the questions that we ask when the due process test is applied.
The conflict, therefore, between police power and the guarantees of due process and equal protection of the laws is more
apparent than real. Properly related, the power and the guarantees are supposed to coexist. The balancing is the essence or, shall it be
said, the indispensable means for the attainment of legitimate aspirations of any democratic society. There can be no absolute power,
whoever exercise it, for that would be tyranny. Yet there can neither be absolute liberty, for that would mean license and anarchy. So the
State can deprive persons of life, liberty and property, provided there is due process of law; and persons may be classified into classes
and groups, provided everyone is given the equal protection of the law. The test or standard, as always, is reason. The police power
legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and means.
And if distinction and classification has been made, there must be a reasonable basis for said distinction.
e.Legislative discretion not subject to judicial review.

Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not be overlooked, in the
first place, that the legislature, which is the constitutional repository of police power and exercises the prerogative of determining the
policy of the State, is by force of circumstances primarily the judge of necessity, adequacy or reasonableness and wisdom, of any law
promulgated in the exercise of the police power, or of the measures adopted to implement the public policy or to achieve public interest.
On the other hand, courts, although zealous guardians of individual liberty and right, have nevertheless evinced a reluctance to
interfere with the exercise of the legislative prerogative. They have done so early where there has been a clear, patent or palpable
arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts are not supposed to override legitimate policy, and
courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into the issue involved. If the disputed legislation
were merely a regulation, as its title indicates, there would be no question that it falls within the legitimate scope of legislative power.
But it goes further and prohibits a group of residents, the aliens, from engaging therein. The problem becomes more complex because its
subject is a common, trade or occupation, as old as society itself, which from time immemorial has always been open to residents,
irrespective of race, color or citizenship.
a.Importance of retail trade in the economy of the nation.
In a primitive economy where families produce all that they consume and consume all that they produce, the dealer, of course,
is unknown. But as group life develops and families begin to live in communities producing more than what they consume and needing
an infinite number of things they do not produce, the dealer comes into existence. As villages develop into big communities and
specialization in production begins, the dealer's importance is enhanced. Under modern conditions and standards of living, in which
man's needs have multiplied and diversified to unlimited extents and proportions, the retailer comes as essential as the producer,
because thru him the infinite variety of articles, goods and commodities needed for daily life are placed within the easy reach of
consumers. Retail dealers perform the functions of capillaries in the human body, thru which all the needed food and supplies are
ministered to members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in the life of the community. He ministers to the resident's
daily needs, food in all its increasing forms, and the various little gadgets and things needed for home and daily life. He provides his
customers around his store with the rice or corn, the fish, the salt, the vinegar, the spices needed for the daily cooking. He has cloths to
sell, even the needle and the thread to sew them or darn the clothes that wear out. The retailer, therefore, from the lowly peddler, the
owner of a small sari-sari store, to the operator of a department store or a supermarket is so much a part of day-to-day existence.
b.The alien retailer's traits.
The alien retailer must have started plying his trade in this country in the bigger centers of population (Time there was when
he was unknown in provincial towns and villages). Slowly but gradually he invaded towns and villages; now he predominates in the
cities and big centers of population. He even pioneers in far away nooks where the beginnings of community life appear, ministering to
the daily needs of the residents and purchasing their agricultural produce for sale in the towns. It is an undeniable fact that in many
communities the alien has replaced the native retailer. He has shown in this trade, industry without limit, and the patience and
forbearance of a slave. Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and insolent
neighbors and customers are made in his face, but he heeds them not, and he forgets and forgives. The community takes no note of him,
as he appears to be harmless and extremely useful.
c.Alleged alien control and dominance.
There is a general feeling on the part of the public, which appears to be true to fact, about the controlling and dominant
position that the alien retailer holds in the nation's economy. Food and other essentials, clothing, almost all articles of daily life reach the
residents mostly through him. In big cities and centers of population he has acquired not only predominance, but apparent control over
distribution of almost all kinds of goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other
goods and articles. And were it not for some national corporations like the Naric, the Namarco, the Facomas and the Accfa, his control
over principal foods and products would easily become full and complete.
Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said that the fear is
unfounded and the threat is imagined; in another, it is charged that the law is merely the result of racialism and pure and unabashed
nationalism. Alienage, it is said, is not an element of control; also so many unmanageable factors in the retail business make control
virtually impossible. The first argument which brings up an issue of fact merits serious consideration. The others are matters of opinion
within the exclusive competence of the legislature and beyond our prerogative to pass upon and decide.
The best evidence are the statistics on the retail trade, which put down the figures in black and white. Between the
constitutional convention year (1935), when the fear of alien domination and control of the retail trade already filled the minds of our

leaders with fears and misgivings, and the year of the enactment of the nationalization of the retail trade act (1954), official statistics
unmistakably point out to the ever-increasing dominance and control by the alien of the retail trade, as witness the following tables:
AssetsGross Sales
Year and Retailer'sNo.-Estab-Per centPer cent
NationalityishmentsPesosDistri-PesosDistributionbution
1941:
Filipino106,671200,323,13855.82174,181,9245174
Chinese15,356118,348,69232.98148,813,23944.21
Others1,64640,187,09011.2013,630,2394.05
1947:
Filipino111,107208,658,94665.05279,583,33357.03
Chinese13,774106,156,21833.56205,701,13441.96
Others3548,761,260.494,927,1681.01
1948:
Filipino113,631213,342,26467.30467,161,66760.51
Chinese12,08793,155,45929.38294,894,22738.20
Others42210,514,6753.329,995,4021.29
1949:
Filipino113,659213,451,60260.89462,532,90153.47
Chinese16,248125,223,33635.72392,414,87545.36
Others48612,056,3653.3910,078,3641.17
1951:
Filipino119,352224,053,62061.09466,058,05253.07
Chinese17,429134,325,30336.60404,481,38446.06
Others3478,614,0252.317,645,327.87
AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item Gross Sales
Year and Retailer'sAssets(Pesos)
Nationality(Pesos)
1941:
Filipino1,8781,633
Chinese7,7079,691
Others24,4158,281
1947:
Filipino1,8782,516
Chinese7,70714,934
Others24,74913,919
1948: (Census)

Filipino1,8784,111
Chinese7,70724,398
Others24,91623,686
1949:
Filipino1,8784,069
Chinese7,70724,152
Others24,80720,737
1951:
Filipino1,8773,905
Chinese7,70733,207
Others24,82422,033
(Estimates Assets and Gross Sales of Retail Establishments, By year and Nationality of Owners, Benchmark:
1948 Census, issued by the Bureau of Census and Statistics, Department of Commerce and Industry; pp. 18-19 of
Answer.)
The above statistics do not include corporations and partnerships, while the figures on Filipino establishments already include mere
market vendors, whose capital is necessarily small.
The above figures reveal that in percentage distribution of assets and of gross sales, alien participation has steadily increased
during the years. It is true, of course, that Filipinos have the edge in the number of retailers, but aliens more than make up for the
numerical gap through their assets and gross sales which average between six and seven times those of the very many Filipino retailers
Numbers in retailers, here, do not imply superiority; the alien invests more capital, buys and sells six to seven times more, and gains
much more. The same of official report, pointing out to the known predominance of foreign elements in the retail trade, remarks that the
Filipino retailers were largely engaged in minor retailer enterprises. As observed by respondents, the native investment is thinly spread,
and the Filipino retailer is practically helpless in matters of capital, credit, price and supply.

d.Alien control and threat, subject of apprehension in Constitutional Convention.


It is this domination and control, which we believe has been sufficiently shown to exist, that is the legislature's target in the
enactment of the disputed nationalization law. If they did not exist as a fact the sweeping remedy of nationalization would never have
been adopted. The framers of our Constitution also believed in the existence of this alien dominance and control when they approved a
resolution categorically declaring among other things, that "it is the sense of the Convention that the public interest requires the
nationalization of the retail trade; . . ." (II Aruego, The Framing of the Philippine Constitution, 662-663, quoted on page 67 of Petitioner.)
That was twenty-two years ago; and the events since then have not been either pleasant or comforting. Dean Since of the University of
the Philippines College of Law, commenting on the patrimony clause of the Preamble opines that the fathers of our Constitution were
merely translating the general preoccupation of Filipinos "of the dangers from alien interests that had already brought under their
control the commercial and other economic activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114); and analyzing the
concern of the members of the constitutional convention for the economic life of the citizens, in connection with the nationalistic
provisions of the Constitution, he says:
"But there has been a general feeling that alien dominance over the economic life of the country is not
desirable and that if such a situation should remain, political independence alone is no guarantee to national stability
and strength. Filipino private capital is not big enough to wrest from alien hands the control of the national economy.
Moreover, it is but of recent formation and hence, largely inexperienced, timid and hesitant. Under such conditions, the
government as the instrumentality of the national will, has to step in and assume the initiative, if not the leadership,
in the struggle for the economic freedom of the nation in somewhat the same way that it did in the crusade for political
freedom. Thus . . . It (the Constitution) envisages an organized movement for the protection of the nation not only
against the possibilities of armed invasion but also against its economic subjugation by alien interests in the economic
field." (Phil. Political Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other quarters. Filipino business men, manufacturers and
producers believe so; they fear the business coming from alien control, and they express sentiments of economic independence. Witness
thereto is Resolution No. 1, approved on July 18, 1953, of the Fifth National Convention of Filipino Businessmen, and a similar
resolution, approved on March 20, 1954, of the Second National Convention of Manufacturers and Producers. The man in the street also
believes, and fears, alien predominance and control; so our newspapers, which have editorially pointed out not only to control but to alien

stranglehold. We, therefore, find alien domination and control to be a fact, a reality proved by official statistics, and felt by all the
sections and groups that compose the Filipino community.
e.Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not seem to lie in the predominance alone; there is a
prevailing feeling that such predominance may truly endanger the national interest. With ample capital, unity of purpose and action
and thorough organization, alien retailers and merchants can act in such complete unison and concert on such vital matters as the fixing
of prices, the determination of the amount of goods or articles to be made available in the market, and even the choice of the goods or
articles they would or would not patronize or distribute, that fears of dislocation of the national economy and of the complete
subservience of national retailers and of the consuming public are not entirely unfounded. Nationals, producers and consumers alike,
can be placed completely at their mercy. This is easily illustrated. Suppose an article of daily use is desired to be prescribed by the
aliens, because the producer or importer does not offer them sufficient profits, or because a new competing article offers bigger profits for
its introduction. All that aliens would do is to agree to refuse to sell the first article, eliminating it from their stocks, offering the new
one as a substitute. Hence, the producers or importers of the prescribed article, or its consumers, find the article suddenly out of
circulation. Freedom of trade is thus curtailed and free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious influences of alien domination. Grave abuses have
characterized the exercise of the retail trade by aliens. It is a fact within judicial notice, which courts of justice may not properly overlook
or ignore in the interests of truth and justice, that there exists a general feeling on the part of the public that alien participation in the
retail trade has been attended by a pernicious and intolerable practices, the mention of a few of which would suffice for our purposes;
that at some time or other they have cornered the market of essential commodities, like corn and rice, creating artificial scarcities to
justify and enhance profits to unreasonable proportions; that they have hoarded essential foods to the inconvenience and prejudice of the
consuming public, so much so that the Government has had to establish the National Rice and Corn Corporation to save the public from
their continuous hoarding practices and tendencies; that they have violated price control laws, especially on foods and essential
commodities, such that the legislature had to enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic
deportation for price control convictions; that they have secret combinations among themselves to control prices, cheating the operation
of the law of supply and demand; that they have connived to boycott honest merchants and traders who would not cater or yield to their
demands, in unlawful restraint of freedom of trade and enterprise. They are believed by the public to have evaded tax laws, smuggled
goods and money into and out of the land, violated import and export prohibitions, control laws and the like, in derision and contempt of
lawful authority. It is also believed that they have engaged in corrupting public officials with fabulous bribes, indirectly causing the
prevalence of graft and corruption in the Government. As a matter of fact appeals to unscrupulous aliens have been made both by the
Government and by their own lawful diplomatic representatives, action which impliedly admits a prevailing feeling about the existence
of many of the above practices.
The circumstances above set forth create well founded fears that worse things may come in the future. The present dominance
of the alien retailer, especially in the big centers of population, therefore, becomes a potential source of danger on occasions of war or
other calamity. We do not have here in this country isolated groups of harmless aliens retailing goods among nationals; what we have
are well organized and powerful groups that dominate the distribution of goods and commodities in the communities and big centers of
population. They owe no allegiance or loyalty to the State, and the State cannot rely upon them in times of crisis or emergency. While the
national holds his life, his person and his property subject to the needs of his country, the alien may even become the potential enemy of
the State.
f.Law enacted in interest of national economic survival and security.
We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not the product of racial
hostility, prejudice or discrimination, but the expression of the legitimate desire and determination of the people, thru their authorized
representatives, to free the nation from the economic situation that has unfortunately been saddled upon it rightly or wrongly, to its
disadvantage. The law is clearly in the interest of the public, any of the national security itself, and indisputably falls within the scope of
police power, thru which and by which the State insures its existence and security and the supreme welfare of its citizens.
VI. The Equal Protection Limitation
a.Objections to alien participation in retail trade.
The next question that now poses solution is, Does the law deny the equal protection of the laws? As pointed out above, the
mere fact of alienage is the root and cause of the distinction between the alien and the national as a trader. The alien resident owes
allegiance to the country of his birth or his adopted country; his stay here is for personal convenience; he is attracted by the lure of gain
and profit. His aim or purpose of stay, we admit, is neither illegitimate nor immoral, but he is naturally lacking in that spirit of loyalty
and enthusiasm for this country where he temporarily stays and makes his living, or of that spirit of regard, sympathy and consideration
for his Filipino customers as would prevent him from taking advantage of their weakness and exploiting them. The faster he makes his
pile, the earlier can the alien go back to his beloved country and his beloved kin and country men. The experience of the country is that

the alien retailer has shown such utter disregard for his customers and the people on whom he makes his profit, that it has been found
necessary to adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really makes a genuine contribution to national income
and wealth. He undoubtedly contributes to general distribution, but the gains and profits he makes are not invested in industries that
would help the country's economy and increase national wealth. The alien's interest in this country being merely transient and
temporary, it would indeed be ill-advised to continue entrusting the very important function of retail distribution to his hands.

The practices resorted to by aliens in the control of distribution, as already pointed out above, their secret manipulations of
stocks of commodities and prices, their utter disregard of the welfare of their customers and of the ultimate happiness of the people of
the nation of which they are mere guests, which practices, manipulations and disregard do not attend the exercise of the trade by the
nationals, show the existence of real and actual, positive and fundamental differences between an alien and a national which fully justify
the legislative classification adopted in the retail trade measure. These differences are certainly a valid reason for the State to prefer the
national over the alien in the retail trade. We would be doing violence to fact and reality were we to hold that no reason or ground for a
legitimate distinction can be found between one and the other.
b.Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual and real, furnish
sufficient grounds for legislative classification of retail traders into nationals and aliens. Some may disagree with the wisdom of the
legislature's classification. To this we answer, that this is the prerogative of the law-making power. Since the Court finds that the
classification is actual, real and reasonable, and all persons of one class are treated alike, and as it cannot be said that the classification
is patently unreasonable and unfounded, it is in duty bound to declare that the legislature acted within its legitimate prerogative and it
cannot declare that the act transcends the limit of equal protection established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and classifications among persons is not curtailed or denied
by the equal protection of the laws clause. The legislative power admits of a wide scope of discretion, and a law can be violative of the
constitutional limitation only when the classification is without reasonable basis. In addition to the authorities we have earlier cited, we
can also refer to the case of Lindsley vs. Natural Carbonic Gas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined the
application of equal protection clause to a law sought to be voided as contrary thereto:
". . . '1. The equal protection clause of the Fourteenth Amendment does not take from the state the power to
classify in the adoption of police laws, but admits of the exercise of the wide scope of discretion in that regard, and
avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary. 2. A classification
having some reasonable basis does not offend against that clause merely because it is not made with mathematical
nicety, or because in practice it results in some inequality. 3. When the classification in such a law is called in question,
if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the
law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing
that it does not rest upon any reasonable basis, but is essentially arbitrary.'"
c.Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for classification has already been affirmatively
decided in this jurisdiction as well as in various courts in the United States. In the case of Smith Bell & Co. vs. Natividad, 40 Phil. 136,
where the validity of Act No. 2761 of the Philippine Legislature was in issue, because of a condition therein limiting the ownership of
vessels engaged in coastwise trade to corporations formed by citizens of the Philippine Islands or the United States, thus denying the
right to aliens, it was held that the Philippine Legislature did not violate the equal protection clause of the Philippine Bill of Rights. The
Legislature in enacting the law had as ultimate purpose the encouragement of Philippine shipbuilding and the safety for these Islands
from foreign interlopers. We held that this was a valid exercise of the police power, and all presumptions are in favor of its
constitutionality. In substance, we held that the limitation of domestic ownership of vessels engaged in coastwise trade to citizens of the
Philippines does not violate the equal protection of the law and due process of law clauses of the Philippine Bill of Rights. In rendering
said decision we quoted with approval the concurring opinion of Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"'Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts licensing gaming
houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of that character, and forms part of an
extensive system, the object of which is to encourage American shipping, and place them on an equal footing with the
shipping of other nations. Almost every commercial nation reserves to its own subjects a monopoly of its coasting trade;
and a countervailing privilege in favor of American shipping is contemplated, in the whole legislation of the United
States on this subject. It is not to give the vessel an American character, that the license is granted; that effect has been
correctly attributed to the act of her enrollment. But it is to confer on her American privileges, as contra distinguished
from foreign; and to preserve the Government from fraud by foreigners; in surreptitiously intruding themselves into the

American commercial marine, as well as frauds upon the revenue in the trade coastwise, that this whole system is
projected.'"
The rule in general is as follows:
"Aliens are under no special constitutional protection which forbids a classification otherwise justified simply
because the limitation of the class falls along the lines of nationality. That would be requiring a higher degree of
protection for aliens as a class than for similar classes of American citizens. Broadly speaking, the difference in status
between citizens and aliens constitutes a basis for reasonable classification in the exercise of police power." (2 Am. Jur.
468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers and peddlers, which
provided that no one can obtain a license unless he is, or has declared his intention, to become a citizen of the United States, was held
valid, for the following reason: It may seem wise to the legislature to limit the business of those who are supposed to have regard for the
welfare, good order and happiness of the community, and the court cannot question this judgment and conclusion. In Bloomfield vs.
State, 99 N.E. 309 (Ohio, 1912), a statute which prevented certain persons, among them aliens, from engaging in the traffic of liquors,
was found not to be the result of race hatred, or in hospitality, or a deliberate purpose to discriminate, but was based on the belief that
an alien cannot be sufficiently acquainted with 'our institutions and our life as to enable him to appreciate the relation of this particular
business to our entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U.S. 392, 71 L. ed. 1115
(1926), the U. S. Supreme Court had under consideration an ordinance of the city of Cincinnati prohibiting the issuance of licenses
(pools and billiard rooms) to aliens. It held that plainly irrational discrimination against aliens is prohibited, but it does not follow that
alien race and allegiance may not bear in some instances such a relation to a legitimate object of legislation as to be made the basis of
permitted classification, and that it could not state that the legislation is clearly wrong; and that latitude must be allowed for the
legislative appraisement of local conditions and for the legislative choice of methods for controlling an apprehended evil. The case of
State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington,
1922), the business of pawnbroking was considered as having tendencies injuring public interest, and limiting it to citizens is within the
scope of police power. A similar statute denying aliens the right to engage in auctioneering was also sustained in Wright vs. May, L. R.
A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that aliens are judicially
known to have different interests, knowledge, attitude, psychology and loyalty, hence the prohibition of issuance of licenses to them for
the business of pawnbroker, pool, billiard, card room, dance hall, is not an infringement of constitutional rights. In Templar vs. Michigan
State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the licensing of aliens as barbers was held void, but the
reason for the decision was the court's finding that the exercise of the business by the aliens does not in any way affect the morals, the
health, or even the convenience of the community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a California
statute banning the issuance of commercial fishing licenses to persons ineligible to citizenship was held void, because the law conflicts
with Federal power over immigration, and because there is no public interest in the mere claim of ownership of the waters and the fish
in them, so there was no adequate justification for the discrimination. It further added that the law was the outgrowth of antagonism
toward persons of Japanese ancestry. However, two Justices dissented on the theory that fishing rights have been treated traditionally
as natural resources. In Fraser vs. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax on every
employer of foreign-born unnaturalized male persons over 21 years of age, was declared void because the court found that there was no
reason for the classification and the tax was an arbitrary deduction from the daily wage of an employee.

d.Authorities contra explained.


It is true that some decisions of the Federal court and of the State courts in the United States hold that the distinction
between aliens and citizens is not a valid ground for classification. But in these decisions the laws declared invalid were found to be
either arbitrary, unreasonable or capricious, or were the result or product of racial antagonism and hostility, and there was no question
of public interest involved or pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared
invalid a Philippine law making unlawful the keeping of books of account in any language other than English, Spanish or any other local
dialect, but the main reasons for the decisions are: (1) that if Chinese were driven out of business there would be no other system of
distribution, and (2) that the Chinese would fall prey to all kinds of fraud, because they would be deprived of their right to be advised of
their business and to direct its conduct. The real reason for the decision, therefore, is the court's belief that no public benefit would be
derived from the operation of the law and on the other hand it would deprive Chinese of something indispensable for carrying on their
business. In Yick Wo vs. Hopkins, 30 L. ed. 220 (1885) an ordinance conferring power on officials to withhold consent in the operation of
laundries both as to persons and place, was declared invalid, but the court said that the power granted was arbitrary, that there was no
reason for the discrimination which attended the administration and implementation of the law, and that the motive thereof was mere
racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to engage as hawkers and peddlers was
declared void, because the discrimination bore no reasonable and just relation to the act in respect to which the classification was
proposed.
The case at bar is radically different, and the facts make them so. As we already have said, aliens do not naturally possess the
sympathetic consideration and regard for customers with whom they come in daily contact, nor the patriotic desire to help bolster the
nation's economy, except in so far as it enhances their profit, nor the loyalty and allegiance which the national owes to the land. These

limitations on the qualifications of aliens have been shown on many occasions and instances, especially in times of crisis and emergency.
We can do no better than borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and significance of the
distinction between the alien and the national, thus:
". . . It may be judicially known, however, that aliens coming into this country are without the intimate
knowledge of our laws, customs, and usages that our own people have. So it is likewise known that certain classes of
aliens are of different psychology from our fellow countrymen. Furthermore, it is natural and reasonable to suppose
that the foreign born, whose allegiance is first to their own country, and whose ideals of governmental environment and
control have been engendered and formed under entirely different regimes and political systems, have not the same
inspiration for the public weal, nor are they as well disposed toward the United States, as those who by citizenship, are
a part of the government itself. Further enlargement, is unnecessary. I have said enough so that obviously it cannot be
affirmed with absolute confidence that the Legislature was without plausible reason for making the classification, and
therefore appropriate discrimination against aliens as it relates to the subject of legislation. . . ."
VII. The Due Process of Law Limitation
a.Reasonability, the test of the limitation; determination by legislature decisive.
We now come to due process as a limitation on the exercise of the police power. It has been stated by the highest authority in
the United States that:
". . . And the guaranty of due process, as has often been held, demands only that the law shall not be
unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation to the
subject sought to be attained. . . ."
xxx xxx xxx
"So far as the requirement of due process is concerned and in the absence of other constitutional restriction a
state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce
that policy by legislation adapted to its purpose. The courts are without authority either to declare such policy, or, when
it is declared by the legislature, to override it. If the laws passed are seen to have a reasonable relation to a proper
legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process are satisfied, and
judicial determination to that effect renders a court functus officio. . . ." (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
". . . Too much significance cannot be given to the word 'reasonable' in considering the scope of the police
power in a constitutional sense, for the test used to determine the constitutionality of the means employed by the
legislature is to inquire whether the restrictions it imposes on rights secured to individuals by the Bill of Rights are
unreasonable, and not whether it imposes any restrictions on such rights. . . ."
xxx xxx xxx
". . . A statute to be within this power must also be reasonable in its operation upon the persons whom it
affects, must not be for the annoyance of a particular class, and must not be unduly oppressive." (11 Am. Jur. Sec. 302,
pp. 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388, it was also held:
". . . To justify the state in thus interposing its authority in behalf of the public, it must appear, first, that the
interests of the public generally, as distinguished from those of a particular class, require such interference; and
second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive
upon individuals. . . ."
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of constitutionality:
"In determining whether a given act of the Legislature, passed in the exercise of the police power to regulate
the operation of a business, is or is not constitutional, one of the first questions to be considered by the court is whether
the power as exercised has a sufficient foundation in reason in connection with the matter involved, or is an arbitrary,
oppressive, and capricious use of that power, without substantial relation to the health, safety, morals, comfort, and
general welfare of the public."

b.Petitioner's argument considered.


Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long ago recognized as
essential to the orderly pursuit of happiness by free men; that it is a gainful and honest occupation and therefore beyond the power of
the legislature to prohibit and penalize. This argument overlooks fact and reality and rests on an incorrect assumption and premise, i.e.,
that in this country where the occupation is engaged in by petitioner, it has been so engaged by him, by the alien, in an honest creditable
and unimpeachable manner, without harm or injury to the citizens and without ultimate danger to their economic peace, tranquility and
welfare. But the Legislature has found, as we have also found and indicated, that the privilege has been so grossly abused by the alien,
thru the illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic control of the occupation and threatens a
deadly stranglehold on the nation's economy endangering the national security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the facts and circumstances,
but this, Is the exclusion in the future of aliens from the retail trade unreasonable, arbitrary and capricious, taking into account the
illegitimate and pernicious form and manner in which the aliens have heretofore engaged therein? As thus correctly stated the answer is
clear. The law in question is deemed absolutely necessary to bring about the desired legislative objective, i.e., to free national economy
from alien control and dominance. It is not necessarily unreasonable because it affects private rights and privileges (11 Am. Jur. pp.
1080-1081.) The test of reasonableness of a law is the appropriateness or adequacy under all circumstances of the means adopted to
carry out its purpose into effect (Id.) Judged by this test, disputed legislation, which is not merely reasonable but actually necessary,
must be considered not to have infringed the constitutional limitation of reasonableness.

into law:

The necessity of the law in question is explained in the explanatory note that accompanied the bill, which later was enacted

"This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens of the
Philippines from having a strangle hold upon our economic life. If the persons who control this vital artery of our
economic life are the ones who owe no allegiance to this Republic, who have no profound devotion to our free
institutions, and who have no permanent stake in our people's welfare, we are not really the masters of our own destiny.
All aspects of our life, even our national security, will be at the mercy of other people.
"In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not citizens of
the Philippines of their means of livelihood. While this bill seeks to take away from the hands of persons who are not
citizens of the Philippines a power that can be wielded to paralyze all aspects of our national life and endanger our
national security it respects existing rights.

"The approval of this bill is necessary for our national survival."


If political independence is a legitimate aspiration of a people, then economic independence is none the less legitimate.
Freedom and liberty are not real and positive if the people are subject to the economic control and domination of others, especially if not
of their own race or country. The removal and eradication of the shackles of foreign economic control and domination, is one of the
noblest motives that a national legislature may pursue. It is impossible to conceive that legislation that seeks to bring it about can
infringe the constitutional limitation of due process. The attainment of a legitimate aspiration of a people can never be beyond the limits
of legislative authority.
c.Law expressly held by Constitutional Convention to be within the sphere of legislative action.
The framers of the Constitution could not have intended to impose the constitutional restrictions of due process on the
attainment of such a noble motive as freedom from economic control and domination, thru the exercise of the police power. The fathers of
the Constitution must have given to the legislature full authority and power to enact legislation that would promote the supreme
happiness of the people, their freedom and liberty. On the precise issue now before us, they expressly made their voice clear; they
adopted a resolution expressing their belief that the legislation in question is within the scope of the legislative power. Thus they
declared in their Resolution:
"'That it is the sense of the Convention that the public interest requires the nationalization of retail trade; but
it abstains from approving the amendment introduced by the Delegate for Manila, Mr. Araneta, and others on this
matter because it is convinced that the National Assembly is authorized to promulgate a law which limits to Filipino
and American citizens the privilege to engage in the retail trade.'" (II Aruego, The Framing of the Philippine
Constitution, 662- 663, quoted on pages 66 and 67 of the Memorandum for the Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various provisions of the Constitution. Thus in the
preamble, a principal objective is the conservation of the patrimony of the nation and as corollary thereto the provision limiting to
citizens of the Philippines the exploitation, development and utilization of its natural resources. And in Section 8 of Article XIV, it is

provided that "no franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to
citizens of the Philippines." The nationalization of the retail trade is only a continuance of the nationalistic protective policy laid down as
a primary objective of the Constitution. Can it be said that a law imbued with the same purpose and spirit underlying many of the
provisions of the Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval of the radical
measure is, therefore, fully justified. It would have been recreant to its duties towards the country and its people would it view the sorry
plight of the nationals with complacency and refuse or neglect to adopt a remedy commensurate with the demands of public interest and
national survival. As the repository of the sovereign power of legislation, the Legislature was in duty bound to face the problem and
meet, through adequate measures, the danger and threat that alien domination of retail trade poses to national economy.
d.Provisions of law not unreasonable.
A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the Legislature has been. The
law is made prospective and recognizes the right and privilege of those already engaged in the occupation to continue therein during the
rest of their lives; and similar recognition of the right to continue is accorded associations of aliens. The right or privilege is denied to
those only upon conviction of certain offenses. In the deliberations of the Court on this case, attention was called to the fact that the
privilege should not have been denied to children and heirs of aliens now engaged in the retail trade. Such provision would defeat the
law itself, its aims and purposes. Besides, the exercise of legislative discretion is not subject to judicial review It is well settled that the
Court will not inquire into the motives of the Legislature, nor pass upon general matters of legislative judgment. The Legislature is
primarily the judge of the necessity of an enactment or of any of its provisions, and every presumption is in favor of its validity, and
though the Court may hold views inconsistent with the wisdom of the law, it may not annul the legislation if not palpably in excess of the
legislative power. Furthermore, the test of the validity of a law attacked as a violation of due process, is not its reasonableness, but its
unreasonableness, and we find the provisions are not unreasonable. These principles also answer various other arguments raised
against the law, some of which are: that the law does not promote general welfare; that thousands of aliens would be thrown out of
employment; that prices will increase because of the elimination of competition; that there is no need for the legislation; that adequate
replacement is problematical; that there may be general breakdown; that there would be repercussions from foreigners; etc. Many of
these arguments are directed against the supposed wisdom of the law which lies solely within the legislative prerogative; they do not
import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is misleading or
deceptive, as it conceals the real purpose of the bill, which is to nationalize the retail business and prohibit aliens from engaging therein.
The constitutional provision which is claimed to be violated in Section 21 (1) of Article VI, which reads:
"No bill which may be enacted into law shall embrace more then one subject which shall be expressed in the
title of the bill".
What the above provision prohibits is duplicity, that is, if its title completely fails to apprise the legislators or the public of the
nature, scope and consequences of the law or its operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297.) A cursory
consideration of the title and the provisions of the bill fails to show the presence of duplicity. It is true that the term "regulate" does not
and may not readily and at first glance convey the idea of "nationalization" and "prohibition", which terms express the two main
purposes and objectives of the law. But "regulate" is a broader term than either prohibition or nationalization. Both of these have always
been included within the term regulation.
"Under the title of an act to 'regulate', the sale of intoxicating liquors, the Legislature may prohibit the sale of
intoxicating liquors." (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
"Within the meaning of the Constitution requiring that the subject of every act of the Legislature shall be
stated in the title, the title 'To regulate the sale of intoxicating liquors, etc." sufficiently expresses the subject of an
act prohibiting the sale of such liquors to minors and to persons in the habit of getting intoxicated; such matters being
properly included within the subject of regulating the sale." (Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of
Answer.)
"The word 'regulate' is of broad import, and necessarily implies some degree of restraint and prohibition of acts
usually done in connection with the thing to be regulated. While word regulate' does not ordinarily convey meaning of
prohibit, there is no absolute reason why it should not have such meaning when used in delegating police power in
connection with a thing the best or only efficacious regulation of which involves suppression." (State vs. Morton, 162 So.
718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has also been said that the title need not be an index to
the entire contents of the law (I Sutherland, Statutory Construction, Sec. 4803, p. 345.) The above rule was followed when the title of the

Act in question adopted the more general term "regulate" instead of "nationalize" or "prohibit". Furthermore, the law also contains other
rules for the regulation of the retail trade, which may not be included in the terms "nationalization" or "prohibition"; so were the title
changed from "regulate" to "nationalize" or "prohibit", there would have been many provisions not falling within the scope of the title
which would have made the Act invalid. The use of the term "regulate", therefore, is in accord with the principle governing the drafting
of statutes, under which a simple or general term should be adopted in the title, which would include all other provisions found in the
body of the Act.
One purpose of the constitutional directive that the subject of a bill should be embraced in its title is to apprise the legislators
of the purposes, the nature and scope of its provisions, and prevent the enactment into law of matters which have not received the notice,
action and study of the legislators or of the public. In the case at bar it cannot be claimed that the legislators have not been apprised of
the nature of the law, especially the nationalization and prohibition provisions. The legislators took active interest in the discussion of
the law, and a great many of the persons affected by the prohibition in the law conducted a campaign against its approval. It cannot be
claimed, therefore, that the reasons for declaring the law invalid ever existed. The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations

Another subordinate argument against the validity of the law is the supposed violation thereby of the Charter of the United
Nations and of the Declaration of Human Rights adopted by the United Nations General Assembly. We find no merit in the above
contention. The United Nations Charter imposes no strict or legal obligations regarding the rights and freedom of their subjects (Hans
Kelsen, The Law of the United Nations, 1951 ed. pp. 29-32), and the Declaration of Human Rights contains nothing more than a mere
recommendation, or a common standard of achievement for all peoples and all nations (Id. p. 39.) That such is the import of the United
Nations Charter aid of the Declaration of Human Rights can be inferred from the fact that members of the United Nations Organization,
such as Norway and Denmark, prohibit foreigners from engaging in retail trade, and in most nations of the world laws against foreigners
engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947 is also claimed to be
violated by the law in question. All that the treaty guarantees is equality of treatment to the Chinese nationals "upon the same terms as
the nationals of any other country." But the nationals of China are not discriminated against because nationals of all other countries,
except those of the United States, who are granted special rights by the Constitution, are all prohibited from engaging in the retail
trade. But even supposing that the law infringes upon the said treaty, the treaty is always subject to qualification or amendment by a
subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope of the police power of the
State (Palston vs. Pennsylvania, 58 L. ed. 539.).
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real actual threat and danger
to national economy posed by alien dominance and control of the retail business and free citizens and country from such dominance and
control; that the enactment clearly falls within the scope of the police power of the State, thru which and by which it protects its own
personality and insures its security and future; that the law does not violate the equal protection clause of the Constitution because
sufficient grounds exist for the distinction between alien and citizen in the exercise of the occupation regulated, nor the due process of
law clause, because the law is prospective in operation and recognizes the privilege of aliens already engaged in the occupation and
reasonably protects their privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us to be plainly evident
as a matter of fact it seems not only appropriate but actually necessary and that in any case such matter falls within the
prerogative of the Legislature, with whose power and discretion the Judicial department of the Government may not interfere; that the
provisions of the law are clearly embraced in the title, and this suffers from no duplicity and has not misled the legislators or the
segment of the population affected; and that it cannot be said to be void for supposed conflict with treaty obligations because no treaty
has actually been entered into on the subject and the police power may not be curtailed or surrendered by any treaty or any other
conventional agreement.
Some members of the Court are of the opinion that the radical effects of the law could have been made less harsh in its impact
on the aliens. Thus it is stated that more time should have been given in the law for the liquidation of existing businesses when the time
comes for them to close. Our legal duty, however, is merely to determine if the law falls within the scope of legislative authority and does
not transcend the limitations of due process and equal protection guaranteed in the Constitution. Remedies against the harshness of the
law should be addressed to the Legislature; they are beyond our power and jurisdiction.
The petition is hereby denied, with costs against petitioner.
Paras, C.J., Bengzon, Reyes A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.

5)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-21897

October 22, 1963

RAMON A. GONZALES, petitioner,


vs.
RUFINO G. HECHANOVA, as Executive Secretary, MACARIO PERALTA, JR., as Secretary of Defense, PEDRO GIMENEZ, as
Auditor General, CORNELIO BALMACEDA, as Secretary of Commerce and Industry, and SALVADOR MARINO, Secretary of
Justice, respondents.
Ramon A. Gonzales in his own behalf as petitioner.
Office of the Solicitor General and Estanislao Fernandez for respondents.
CONCEPCION, J.:
This is an original action for prohibition with preliminary injunction.
It is not disputed that on September 22, 1963, respondent Executive Secretary authorized the importation of 67,000 tons of foreign rice to be
purchased from private sources, and created a rice procurement committee composed of the other respondents herein 1 for the implementation
of said proposed importation. Thereupon, or September 25, 1963, herein petitioner, Ramon A. Gonzales a rice planter, and president of the
Iloilo Palay and Corn Planters Association, whose members are, likewise, engaged in the production of rice and corn filed the petition
herein, averring that, in making or attempting to make said importation of foreign rice, the aforementioned respondents "are acting without
jurisdiction or in excess of jurisdiction", because Republic Act No. 3452 which allegedly repeals or amends Republic Act No. 220 explicitly
prohibits the importation of rice and corn "the Rice and Corn Administration or any other government agency;" that petitioner has no other
plain, speedy and adequate remedy in the ordinary course of law; and that a preliminary injunction is necessary for the preservation of the
rights of the parties during the pendency this case and to prevent the judgment therein from coming ineffectual. Petitioner prayed, therefore,
that said petition be given due course; that a writ of preliminary injunction be forthwith issued restraining respondent their agents or
representatives from implementing the decision of the Executive Secretary to import the aforementioned foreign rice; and that, after due
hearing, judgment be rendered making said injunction permanent.
Forthwith, respondents were required to file their answer to the petition which they did, and petitioner's pray for a writ of preliminary
injunction was set for hearing at which both parties appeared and argued orally. Moreover, a memorandum was filed, shortly thereafter, by
the respondents. Considering, later on, that the resolution said incident may require some pronouncements that would be more appropriate
in a decision on the merits of the case, the same was set for hearing on the merits thereafter. The parties, however, waived the right to argue
orally, although counsel for respondents filed their memoranda.
I. Sufficiency of petitioner's interest.
Respondents maintain that the status of petitioner as a rice planter does not give him sufficient interest to file the petition herein and secure
the relief therein prayed for. We find no merit in this pretense. Apart from prohibiting the importation of rice and corn "by the Rice and Corn
Administration or any other government agency". Republic Act No. 3452 declares, in Section 1 thereof, that "the policy of the Government" is
to "engage in the purchase of these basic foods directly from those tenants, farmers, growers, producers and landowners in the
Philippines who wish to dispose of their products at a price that will afford them a fair and just return for their labor and capital
investment. ... ." Pursuant to this provision, petitioner, as a planter with a rice land of substantial proportion, 2 is entitled to a chance to sell to
the Government the rice it now seeks to buy abroad. Moreover, since the purchase of said commodity will have to be effected with public
funds mainly raised by taxation, and as a rice producer and landowner petitioner must necessarily be a taxpayer, it follows that he has
sufficient personality and interest to seek judicial assistance with a view to restraining what he believes to be an attempt to unlawfully
disburse said funds.
II. Exhaustion of administrative remedies.

Respondents assail petitioner's right to the reliefs prayed for because he "has not exhausted all administrative remedies available to him
before coming to court". We have already held, however, that the principle requiring the previous exhaustion of administrative remedies is not
applicable where the question in dispute is purely a legal one",3 or where the controverted act is "patently illegal" or was performed without
jurisdiction or in excess of jurisdiction, 4 or where the respondent is a department secretary, whose acts as an alter-ego of the President bear
the implied or assumed approval of the latter,5 unless actually disapproved by him,6 or where there are circumstances indicating the urgency
of judicial intervention. 7 The case at bar fails under each one of the foregoing exceptions to the general rule. Respondents' contention is,
therefore, untenable.
III. Merits of petitioner's cause of action.
Respondents question the sufficiency of petitioner's cause of action upon the theory that the proposed importation in question is not governed
by Republic Acts Nos. 2207 and 3452, but was authorized by the President as Commander-in-Chief "for military stock pile purposes" in the
exercise of his alleged authority under Section 2 of Commonwealth Act No. 1; 8 that in cases of necessity, the President "or his subordinates
may take such preventive measure for the restoration of good order and maintenance of peace"; and that, as Commander-in-Chief of our
armed forces, "the President ... is duty-bound to prepare for the challenge of threats of war or emergency without waiting for any special
authority".
Regardless of whether Republic Act No. 3452 repeals Republic Act No. 2207, as contended by petitioner herein - on which our view need not
be expressed we are unanimously of the opinion - assuming that said Republic Act No. 2207 is still in force that the two Acts are
applicable to the proposed importation in question because the language of said laws is such as to include within the purview
thereof all importations of rice and corn into the Philippines". Pursuant to Republic Act No. 2207, "it shall be unlawful for any person,
association, corporation or government agencyto import rice and corn into any point in the Philippines", although, by way of exception, it adds,
that "the President of the Philippines may authorize the importation of these commodities through any government agency that he may
designate", is the conditions prescribed in Section 2 of said Act are present. Similarly, Republic Act No. 3452 explicitly enjoins "the Rice and
Corn Administration or any government agency" from importing rice and corn.
Respondents allege, however, that said provisions of Republic Act Nos. 2207 and 3452, prohibiting the importation of rice and corn by any
"government agency", do not apply to importations "made by the Government itself", because the latter is not a "government agency". This
theory is devoid of merit. The Department of National Defense and the Armed Forces of the Philippines, as well as respondents herein, and
each and every officer and employee of our Government, our government agencies and/or agents. The applicability of said laws even to
importations by the Government as such, becomes more apparent when we consider that:
1. The importation permitted in Republic Act No. 2207 is to be authorized by the "President of the Philippines" and, hence, by or on behalf of
the Government of the Philippines;
2. Immediately after enjoining the Rice and Corn administration and any other government agency from importing rice and corn, Section 10
of Republic Act No. 3452 adds "that the importation of rice and corn is left to private partiesupon payment of the corresponding taxes", thus
indicating that only "private parties" may import rice under its provisions; and
3. Aside from prescribing a fine not exceeding P10,000.00 and imprisonment of not more than five (5) years for those who shall violate any
provision of Republic Act No. 3452 or any rule and regulation promulgated pursuant thereto, Section 15 of said Act provides that "if the
offender is a public official and/or employees", he shall be subject to the additional penalty specified therein. A public official is an officer of
the Government itself, as distinguished from officers or employees of instrumentalities of the Government. Hence, the duly authorized acts of
the former are those of the Government, unlike those of a government instrumentality which may have a personality of its own, distinct and
separate from that of the Government, as such. The provisions of Republic Act No. 2207 are, in this respect, even more explicit. Section 3
thereof provides a similar additional penalty for any "officer or employee of the Government" who "violates, abets or tolerates the violation of
any provision" of said Act. Hence, the intent to apply the same to transactions made by the very government is patent.
Indeed, the restrictions imposed in said Republic Acts are merely additional to those prescribed in Commonwealth Act No. 138, entitled "An
Act to give native products and domestic entities the preference in the purchase of articles for the Government." Pursuant to Section 1 thereof:
The Purchase and Equipment Division of the Government of the Philippines and other officers and employees of the municipal and
provincial governments and the Government of the Philippines and of chartered cities, boards, commissions, bureaus, departments,
offices, agencies, branches, and bodies of any description, including government-owned companies, authorized to requisition,
purchase, or contract or make disbursements for articles, materials, and supplies for public use, public buildings, or public works
shall give preference to materials ... produced ... in the Philippines or in the United States, and to domestic entities, subject to the
conditions hereinbelow specified. (Emphasis supplied.)
Under this provision, in all purchases by the Government, including those made by and/or for the armed forces,preference shall be given to
materials produced in the Philippines. The importation involved in the case at bar violates this general policy of our Government, aside from
the provisions of Republic Acts Nos. 2207 and 3452.

The attempt to justify the proposed importation by invoking reasons of national security predicated upon the "worsening situation in Laos
and Vietnam", and "the recent tension created by the Malaysia problem" - and the alleged powers of the President as Commander-in-Chief of
all armed forces in the Philippines, under Section 2 of the National Defense Act (Commonwealth Act No. 1), overlooks the fact that the
protection of local planters of rice and corn in a manner that would foster and accelerate self-sufficiency in the local production of said
commodities constitutes a factor that is vital to our ability to meet possible national emergency. Even if the intent in importing goods in
anticipation of such emergency were to bolster up that ability, the latter would, instead, be impaired if the importation were so made as to
discourage our farmers from engaging in the production of rice.
Besides, the stockpiling of rice and corn for purpose of national security and/or national emergency is within the purview of Republic Act No.
3452. Section 3 thereof expressly authorizes the Rice and Corn Administration "to accumulate stocks as a national reserve in such quantities
as it may deem proper and necessary to meet any contingencies". Moreover, it ordains that "the buffer stocks held as a national reserve ... be
deposited by the administration throughout the country under the proper dispersal plans ... and may be released only upon the occurrence of
calamities or emergencies ...". (Emphasis applied.)
Again, the provisions of Section 2 of Commonwealth Act No. 1, upon which respondents rely so much, are not self-executory. They merely
outline the general objectives of said legislation. The means for the attainment of those objectives are subject to congressional legislation.
Thus, the conditions under which the services of citizens, as indicated in said Section 2, may be availed of, are provided for in Sections 3, 4
and 51 to 88 of said Commonwealth Act No. 1. Similarly, Section 5 thereof specifies the manner in which resources necessary for our national
defense may be secured by the Government of the Philippines, but only "during a national mobilization",9 which does not exist. Inferentially,
therefore, in the absence of a national mobilization, said resources shall be produced in such manner as Congress may by other laws provide
from time to time. Insofar as rice and corn are concerned, Republic Acts Nos. 2207 and 3452, and Commonwealth Act No. 138 are such laws.
Respondents cite Corwin in support of their pretense, but in vain. An examination of the work cited 10 shows that Corwin referred to the
powers of the President during "war time"11 or when he has placed the country or a part thereof under "martial law". 12 Since neither condition
obtains in the case at bar, said work merely proves that respondents' theory, if accepted, would, in effect, place the Philippines under martial
law, without a declaration of the Executive to that effect. What is worse, it would keep us perpetually under martial law.
It has been suggested that even if the proposed importation violated Republic Acts Nos. 2207 and 3452, it should, nevertheless, be permitted
because "it redounds to the benefit of the people". Salus populi est suprema lex, it is said.
If there were a local shortage of rice, the argument might have some value. But the respondents, as officials of this Government, have
expressly affirmed again and again that there is no rice shortage. And the importation is avowedly for stockpile of the Army not the civilian
population.
But let us follow the respondents' trend of thought. It has a more serious implication that appears on the surface. It implies that if an
executive officer believes that compliance with a certain statute will not benefit the people, he is at liberty to disregard it. That idea must be
rejected - we still live under a rule of law.
And then, "the people" are either producers or consumers. Now as respondents explicitly admit Republic Acts Nos. 2207 and 3452 were
approved by the Legislature for the benefit of producers and consumers, i.e., the people, it must follow that the welfare of the people lies
precisely in the compliance with said Acts.
It is not for respondent executive officers now to set their own opinions against that of the Legislature, and adopt means or ways to set those
Acts at naught. Anyway, those laws permit importation but under certain conditions, which have not been, and should be complied with.
IV. The contracts with Vietnam and Burma
It is lastly contended that the Government of the Philippines has already entered into two (2) contracts for the Purchase of rice, one with the
Republic of Vietnam, and another with the Government of Burma; that these contracts constitute valid executive agreements under
international law; that such agreements became binding effective upon the signing thereof by representatives the parties thereto; that in case
of conflict between Republic Acts Nos. 2207 and 3452 on the one hand, and aforementioned contracts, on the other, the latter should prevail,
because, if a treaty and a statute are inconsistent with each other, the conflict must be resolved under the American jurisprudence in
favor of the one which is latest in point of time; that petitioner herein assails the validity of acts of the Executive relative to foreign relations
in the conduct of which the Supreme Court cannot interfere; and the aforementioned contracts have already been consummated, the
Government of the Philippines having already paid the price of the rice involved therein through irrevocable letters of credit in favor of the
sell of the said commodity. We find no merit in this pretense.
The Court is not satisfied that the status of said tracts as alleged executive agreements has been sufficiently established. The parties to said
contracts do not pear to have regarded the same as executive agreements. But, even assuming that said contracts may properly considered as
executive agreements, the same are unlawful, as well as null and void, from a constitutional viewpoint, said agreements being inconsistent
with the provisions of Republic Acts Nos. 2207 and 3452. Although the President may, under the American constitutional system enter into
executive agreementswithout previous legislative authority, he may not, by executive agreement, enter into a transaction which
is prohibitedby statutes enacted prior thereto. Under the Constitution, the main function of the Executive is to enforce laws enacted by

Congress. The former may not interfere in the performance of the legislative powers of the latter, except in the exercise of his veto power. He
may not defeat legislative enactments that have acquired the status of law, by indirectly repealing the same through an executive
agreement providing for the performance of the very act prohibited by said laws.
The American theory to the effect that, in the event of conflict between a treaty and a statute, the one which is latest in point of time shall
prevail, is not applicable to the case at bar, for respondents not only admit, but, also insist that the contracts adverted to are not treaties.
Said theory may be justified upon the ground that treaties to which the United States is signatory require the advice and consent of its
Senate, and, hence, of a branch of the legislative department. No such justification can be given as regards executive agreements not
authorized by previous legislation, without completely upsetting the principle of separation of powers and the system of checks and balances
which are fundamental in our constitutional set up and that of the United States.
As regards the question whether an international agreement may be invalidated by our courts, suffice it to say that the Constitution of the
Philippines has clearly settled it in the affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not be
deprived "of its jurisdiction to review, revise, reverse, modify, or affirm on appeal,certiorari, or writ of error as the law or the rules of court
may provide, final judgments and decrees of inferior courts in (1) All cases in which the constitutionality or validity of any treaty, law,
ordinance, or executive order or regulation is in question". In other words, our Constitution authorizes the nullification of a treaty, not only
when it conflicts with the fundamental law, but, also, when it runs counter to an act of Congress.
The alleged consummation of the aforementioned contracts with Vietnam and Burma does not render this case academic, Republic Act No.
2207 enjoins our Government not from entering into contracts for the purchase of rice, but from importing rice, except under the conditions
Prescribed in said Act. Upon the other hand, Republic Act No. 3452 has two (2) main features, namely: (a) it requires the Government to
purchase rice and corn directly from our local planters, growers or landowners; and (b) it prohibits importations of rice by the Government,
and leaves such importations to private parties. The pivotal issue in this case is whether the proposed importation which has not been
consummated as yet is legally feasible.
Lastly, a judicial declaration of illegality of the proposed importation would not compel our Government to default in the performance of such
obligations as it may have contracted with the sellers of the rice in question, because, aside from the fact that said obligations may be
complied with without importing the commodity into the Philippines, the proposed importation may still be legalized by complying with the
provisions of the aforementioned laws.
V. The writ of preliminary injunction.
The members of the Court have divergent opinions on the question whether or not respondents herein should be enjoined from implementing
the aforementioned proposed importation. However, the majority favors the negative view, for which reason the injunction prayed for cannot
be granted.
WHEREFORE, judgment is hereby rendered declaring that respondent Executive Secretary had and has no power to authorize the
importation in question; that he exceeded his jurisdiction in granting said authority; said importation is not sanctioned by law and is
contrary to its provisions; and that, for lack of the requisite majority, the injunction prayed for must be and is, accordingly denied. It is so
ordered.
Bengzon, CJ, Padilla, Labrador, Reyes, J.B.L., Dizon and Makalintal, JJ., concur.
Paredes and Regala, JJ., concur in the result.

6)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
August 15, 1961
IN RE: PETITION OF ARTURO EFREN GARCIA for admission to the Philippine Bar without taking the examination.
ARTURO EFREN GARCIA, petitioner.
RESOLUTION
BARRERA, J.:

Arturo E. Garcia has applied for admission to the practice of law in the Philippines without submitting to the required bar examinations. In
his verified petition, he avers, among others, that he is a Filipino citizen born in Bacolor City, Province of Negros Occidental, of Filipino
parentage; that he had taken and finished in Spain, the course of "Bachillerato Superior"; that he was approved, selected and qualified by the
"Instituto de Cervantes" for admission to the Central University of Madrid where he studied and finished the law course graduating there as
"Licenciado En Derecho"; that thereafter he was allowed to practice the law profession in Spain; and that under the provision of the Treaty of
Academic Degrees and the Exercise of Professions between the Republic of the Philippines and the Spanish state, he is entitled to practice
the law profession in the Philippines without submitting to the required bar examinations.
After due consideration, the Court resolved to deny the petition on the following grounds:
(1) the provisions of the Treaty on Academic Degrees and the Exercise of Professions between the Republic of the Philippines and the Spanish
State can not be invoked by applicant. Under Article 11 thereof;
The Nationals of each of the two countries who shall have obtained recognition of the validity of their academic degrees by virtue of
the stipulations of this Treaty, can practice their professions within the territory of the Other, . . .. (Emphasis supplied).
from which it could clearly be discerned that said Treaty was intended to govern Filipino citizens desiring to practice their profession in
Spain, and the citizens of Spain desiring to practice their professions in the Philippines. Applicant is a Filipino citizen desiring to practice the
legal profession in the Philippines. He is therefore subject to the laws of his own country and is not entitled to the privileges extended to
Spanish nationals desiring to practice in the Philippines.
(2) Article I of the Treaty, in its pertinent part, provides .
The nationals of both countries who shall have obtained degree or diplomas to practice the liberal professions in either of the
Contracting States, issued by competent national authorities, shall be deemed competent to exercise said professions in the
territory of the Other, subject to the laws and regulations of the latter. . . ..
It is clear, therefore, that the privileges provided in the Treaty invoked by the applicant are made expressly subject to the laws and
regulations of the contracting State in whose territory it is desired to exercise the legal profession; and Section 1 of Rule 127, in connection
with Sections 2,9, and 16 thereof, which have the force of law, require that before anyone can practice the legal profession in the Philippine he
must first successfully pass the required bar examinations; and
(3) The aforementioned Treaty, concluded between the Republic of the Philippines and the Spanish State could not have been intended to
modify the laws and regulations governing admission to the practice of law in the Philippines, for the reason that the Executive Department
may not encroach upon the constitutional prerogative of the Supreme Court to promulgate rules for admission to the practice of law in the
Philippines, the lower to repeal, alter or supplement such rules being reserved only to the Congress of the Philippines. (See Sec. 13, Art VIII,
Phil. Constitution).
Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Paredes, Dizon, De Leon and Natividad, JJ., concur.
Bautista Angelo, J., on leave, took no part.
Concepcion, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
7)

G.R. No. L-45892

July 13, 1938

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
TRANQUILINO LAGMAN, defendant-appellant.
----------------------------8)

G.R. No. L-45893

July 13, 1938

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
PRIMITIVO DE SOSA, defendant-appellant.

Severino P. Izon for appellants.


Office of the Solicitor-General Tuason for appellee.
AVANCEA, J.:
In these two cases (G.R. Nos. L-45892 and 45893), the appellants Tranquilino and Primitivo de Sosa are charged with a violation of section
60 of Commonwealth Act No. 1, known as the National Defense Law. It is alleged that these two appellants, being Filipinos and having
reached the age of twenty years in 1936, willfully and unlawfully refused to register in the military service between the 1st and 7th of April of
said year, notwithstanding the fact that they had been required to do so. The evidence shows that these two appellants were duly notified by
the corresponding authorities to appear before the Acceptance Board in order to register for military service in accordance with law, and that
the said appellants, in spite of these notices, had not registered up to the date of the filing of the information.
The appellants do not deny these facts, but they allege in defense that they have not registered in the military service because Primitivo de
Sosa is fatherless and has a mother and a brother eight years old to support, and Tranquilino Lagman also has a father to support, has no
military learnings, and does not wish to kill or be killed.
Each of these appellants was sentenced by the Court of First Instance to one month and one day of imprisonment, with the costs.
In this instance, the validity of the National Defense Law, under which the accused were sentenced, is impugned on the ground that it is
unconstitutional. Section 2, Article II of the Constitution of the Philippines provides as follows:
SEC. 2. The defense of the state is a prime duty of government, and in the fulfillment of this duty all citizens may be required by
law to render personal military or civil service.
The National Defense Law, in so far as it establishes compulsory military service, does not go against this constitutional provision but is, on
the contrary, in faithful compliance therewith. The duty of the Government to defend the State cannot be performed except through an army.
To leave the organization of an army to the will of the citizens would be to make this duty of the Government excusable should there be no
sufficient men who volunteer to enlist therein.1vvphl.nt
In the United States the courts have held in a series of decisions that the compulsory military service adopted by reason of the civil war and
the world war does not violate the Constitution, because the power to establish it is derived from that granted to Congress to declare war and
to organize and maintain an army. This is so because the right of the Government to require compulsory military service is a consequence of
its duty to defend the State and is reciprocal with its duty to defend the life, liberty, and property of the citizen. In the case of Jacobson vs.
Massachusetts (197 U.S., 11; 25 Sup. Ct. Rep., 385), it was said that, without violating the Constitution, a person may be compelled by force,
if need be, against his will, against his pecuniary interests, and even against his religious or political convictions, to take his place in the
ranks of the army of his country, and risk the chance of being shot down in its defense. In the case of United States vs. Olson (253 Fed., 233),
it was also said that this is not deprivation of property without due process of law, because, in its just sense, there is no right of property to
an office or employment.
The circumstance that these decisions refer to laws enacted by reason on the actual existence of war does not make our case any different,
inasmuch as, in the last analysis, what justifies compulsory military service is the defense of the State, whether actual or whether in
preparation to make it more effective, in case of need. The circumstance that the appellants have dependent families to support does not
excuse them from their duty to present themselves before the Acceptance Board because, if such circumstance exists, they can ask for
determent in complying with their duty and, at all events, they can obtain the proper pecuniary allowance to attend to these family
responsibilities (secs. 65 and 69 of Commonwealth Act No. 1).
The appealed judgment rendered in these two cases is affirmed, with the costs to the appellants. So ordered.
Villa-Real, Imperial, Diaz, Laurel and Concepcion, JJ., concur.

9)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-45459

March 13, 1937

GREGORIO AGLIPAY, petitioner,


vs.
JUAN RUIZ, respondent.
Vicente Sotto for petitioner.
Office of the Solicitor-General Tuason for respondent.
LAUREL, J.:
The petitioner, Mons. Gregorio Aglipay, Supreme Head of the Philippine Independent Church, seeks the issuance from this court of a writ of
prohibition to prevent the respondent Director of Posts from issuing and selling postage stamps commemorative of the Thirty-third
International Eucharistic Congress.
In May, 1936, the Director of Posts announced in the dailies of Manila that he would order the issues of postage stamps commemorating the
celebration in the City of Manila of the Thirty-third international Eucharistic Congress, organized by the Roman Catholic Church. The
petitioner, in the fulfillment of what he considers to be a civic duty, requested Vicente Sotto, Esq., member of the Philippine Bar, to denounce
the matter to the President of the Philippines. In spite of the protest of the petitioner's attorney, the respondent publicly announced having
sent to the United States the designs of the postage stamps for printing as follows:
"In the center is chalice, with grape vine and stalks of wheat as border design. The stamps are blue, green, brown, cardinal red, violet and
orange, 1 inch by 1,094 inches. The denominations are for 2, 6, 16, 20, 36 and 50 centavos." The said stamps were actually issued and sold
though the greater part thereof, to this day, remains unsold. The further sale of the stamps is sought to be prevented by the petitioner herein.
The Solicitor-General contends that the writ of prohibition is not the proper legal remedy in the instant case, although he admits that the
writ may properly restrain ministerial functions. While, generally, prohibition as an extraordinary legal writ will not issue to restrain or
control the performance of other than judicial or quasi-judicial functions (50 C. J., 6580, its issuance and enforcement are regulated by
statute and in this jurisdiction may issue to . . . inferior tribunals, corporations, boards, or persons, whether excercising functions judicial or
ministerial, which are without or in excess of the jurisdiction of such tribunal, corporation, board, or person, . . . ." (Secs. 516 and 226, Code of
Civil Procedure.) The terms "judicial" and "ministerial" used with reference to "functions" in the statute are undoubtedly comprehensive and
include the challenged act of the respondent Director of Posts in the present case, which act because alleged to be violative of the Constitution
is a fortiorari "without or in excess of . . . jurisdiction." The statutory rule, therefore, in the jurisdiction is that the writ of prohibition is not
confined exclusively to courts or tribunals to keep them within the limits of their own jurisdiction and to prevent them from encroaching upon
the jurisdiction of other tribunals, but will issue, in appropriate cases, to an officer or person whose acts are without or in excess of his
authority. Not infrequently, "the writ is granted, where it is necessary for the orderly administration of justice, or to prevent the use of the
strong arm of the law in an oppressive or vindictive manner, or a multiplicity of actions." (Dimayuga and Fajardo vs. Fernandez [1923], 43
Phil., 304, 307.)
The more important question raised refers to the alleged violation of the Constitution by the respondent in issuing and selling postage
stamps commemorative of the Thirty-third International Eucharistic Congress. It is alleged that this action of the respondent is violative of
the provisions of section 23, subsection 3, Article VI, of the Constitution of the Philippines, which provides as follows:
No public money or property shall ever be appropriated, applied, or used, directly or indirectly, for the use, benefit, or support of any
sect, church, denomination, secretarian, institution, or system of religion, or for the use, benefit, or support of any priest, preacher,
minister, or other religious teacher or dignitary as such, except when such priest, preacher, minister, or dignitary is assigned to the
armed forces or to any penal institution, orphanage, or leprosarium.
The prohibition herein expressed is a direct corollary of the principle of separation of church and state. Without the necessity of adverting to
the historical background of this principle in our country, it is sufficient to say that our history, not to speak of the history of mankind, has
taught us that the union of church and state is prejudicial to both, for ocassions might arise when the estate will use the church, and the
church the state, as a weapon in the furtherance of their recognized this principle of separation of church and state in the early stages of our
constitutional development; it was inserted in the Treaty of Paris between the United States and Spain of December 10, 1898, reiterated in
President McKinley's Instructions of the Philippine Commission, reaffirmed in the Philippine Bill of 1902 and in the autonomy Act of August
29, 1916, and finally embodied in the constitution of the Philippines as the supreme expression of the Filipino people. It is almost trite to say
now that in this country we enjoy both religious and civil freedom. All the officers of the Government, from the highest to the lowest, in taking
their oath to support and defend the constitution, bind themselves to recognize and respect the constitutional guarantee of religious freedom,
with its inherent limitations and recognized implications. It should be stated that what is guaranteed by our Constitution is religious liberty,
not mere religious toleration.
Religious freedom, however, as a constitutional mandate is not inhibition of profound reverence for religion and is not denial of its influence
in human affairs. Religion as a profession of faith to an active power that binds and elevates man to his Creator is recognized. And, in so far
as it instills into the minds the purest principles of morality, its influence is deeply felt and highly appreciated. When the Filipino people, in
the preamble of their Constitution, implored "the aid of Divine Providence, in order to establish a government that shall embody their ideals,
conserve and develop the patrimony of the nation, promote the general welfare, and secure to themselves and their posterity the blessings of

independence under a regime of justice, liberty and democracy," they thereby manifested reliance upon Him who guides the destinies of men
and nations. The elevating influence of religion in human society is recognized here as elsewhere. In fact, certain general concessions are
indiscriminately accorded to religious sects and denominations. Our Constitution and laws exempt from taxation properties devoted
exclusively to religious purposes (sec. 14, subsec. 3, Art. VI, Constitution of the Philippines and sec. 1, subsec. 4, Ordinance appended thereto;
Assessment Law, sec. 344, par. [c]. Adm. Code). Sectarian aid is not prohibited when a priest, preacher, minister or other religious teacher or
dignitary as such is assigned to the armed forces or to any penal institution, orphanage or leprosarium 9 sec. 13, subsec. 3, Art. VI,
Constitution of the Philippines). Optional religious instruction in the public schools is by constitutional mandate allowed (sec. 5, Art. XIII,
Constitution of the Philippines, in relation to sec. 928, Adm. Code). Thursday and Friday of Holy Week, Thanksgiving Day, Christmas Day,
and Sundays and made legal holidays (sec. 29, Adm. Code) because of the secular idea that their observance is conclusive to beneficial moral
results. The law allows divorce but punishes polygamy and bigamy; and certain crimes against religious worship are considered crimes
against the fundamental laws of the state (see arts. 132 and 133, Revised Penal Code).
In the case at bar, it appears that the respondent Director of Posts issued the postage stamps in question under the provisions of Act No. 4052
of the Philippine Legislature. This Act is as follows:
No. 4052. AN ACT APPROPRIATING THE SUM OF SIXTY THOUSAND PESOS AND MAKING THE SAME AVAILABLE OUT
OF ANY FUNDS IN THE INSULAR TREASURY NOT OTHERWISE APPROPRIATED FOR THE COST OF PLATES AND
PRINTING OF POSTAGE STAMPS WITH NEW DESIGNS, AND FOR OTHER PURPOSES.
Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the authority of the
same:
SECTION 1. The sum of sixty thousand pesos is hereby appropriated and made immediately available out of any funds in the Insular
Treasury not otherwise appropriated, for the costs of plates and printing of postage stamps with new designs, and other expenses incident
thereto.
SEC. 2. The Director of Posts, with the approval of the Secretary of Public Works and Communications, is hereby authorized to dispose of the
whole or any portion of the amount herein appropriated in the manner indicated and as often as may be deemed advantageous to the
Government.
SEC. 3. This amount or any portion thereof not otherwise expended shall not revert to the Treasury.
SEC. 4. This act shall take effect on its approval.
Approved, February 21, 1933.
It will be seen that the Act appropriates the sum of sixty thousand pesos for the costs of plates and printing of postage stamps with new
designs and other expenses incident thereto, and authorizes the Director of Posts, with the approval of the Secretary of Public Works and
Communications, to dispose of the amount appropriated in the manner indicated and "as often as may be deemed advantageous to the
Government". The printing and issuance of the postage stamps in question appears to have been approved by authority of the President of the
Philippines in a letter dated September 1, 1936, made part of the respondent's memorandum as Exhibit A. The respondent alleges that the
Government of the Philippines would suffer losses if the writ prayed for is granted. He estimates the revenue to be derived from the sale of
the postage stamps in question at P1,618,17.10 and states that there still remain to be sold stamps worth P1,402,279.02.
Act No. 4052 contemplates no religious purpose in view. What it gives the Director of Posts is the discretionary power to determine when the
issuance of special postage stamps would be "advantageous to the Government." Of course, the phrase "advantageous to the Government"
does not authorize the violation of the Constitution. It does not authorize the appropriation, use or application of public money or property for
the use, benefit or support of a particular sect or church. In the present case, however, the issuance of the postage stamps in question by the
Director of Posts and the Secretary of Public Works and Communications was not inspired by any sectarian denomination. The stamps were
not issue and sold for the benefit of the Roman Catholic Church. Nor were money derived from the sale of the stamps given to that church. On
the contrary, it appears from the latter of the Director of Posts of June 5, 1936, incorporated on page 2 of the petitioner's complaint, that the
only purpose in issuing and selling the stamps was "to advertise the Philippines and attract more tourist to this country." The officials
concerned merely, took advantage of an event considered of international importance "to give publicity to the Philippines and its people"
(Letter of the Undersecretary of Public Works and Communications to the President of the Philippines, June 9, 1936; p. 3, petitioner's
complaint). It is significant to note that the stamps as actually designed and printed (Exhibit 2), instead of showing a Catholic Church chalice
as originally planned, contains a map of the Philippines and the location of the City of Manila, and an inscription as follows: "Seat XXXIII
International Eucharistic Congress, Feb. 3-7,1937." What is emphasized is not the Eucharistic Congress itself but Manila, the capital of the
Philippines, as the seat of that congress. It is obvious that while the issuance and sale of the stamps in question may be said to be inseparably
linked with an event of a religious character, the resulting propaganda, if any, received by the Roman Catholic Church, was not the aim and
purpose of the Government. We are of the opinion that the Government should not be embarassed in its activities simply because of
incidental results, more or less religious in character, if the purpose had in view is one which could legitimately be undertaken by appropriate
legislation. The main purpose should not be frustrated by its subordinate to mere incidental results not contemplated. (Vide Bradfield vs.
Roberts, 175 U. S., 295; 20 Sup. Ct. Rep., 121; 44 Law. ed., 168.)

We are much impressed with the vehement appeal of counsel for the petitioner to maintain inviolate the complete separation of church and
state and curb any attempt to infringe by indirection a constitutional inhibition. Indeed, in the Philippines, once the scene of religious
intolerance and prescription, care should be taken that at this stage of our political development nothing is done by the Government or its
officials that may lead to the belief that the Government is taking sides or favoring a particular religious sect or institution. But, upon very
serious reflection, examination of Act No. 4052, and scrutiny of the attending circumstances, we have come to the conclusion that there has
been no constitutional infraction in the case at bar, Act No. 4052 grants the Director of Posts, with the approval of the Secretary of Public
Works and Communications, discretion to misuse postage stamps with new designs "as often as may be deemed advantageous to the
Government." Even if we were to assume that these officials made use of a poor judgment in issuing and selling the postage stamps in
question still, the case of the petitioner would fail to take in weight. Between the exercise of a poor judgment and the unconstitutionality of
the step taken, a gap exists which is yet to be filled to justify the court in setting aside the official act assailed as coming within a
constitutional inhibition.
The petition for a writ of prohibition is hereby denied, without pronouncement as to costs. So ordered.
Avancea, C.J., Villa-Real, Abad Santos, Imperial, Diaz and Concepcion, JJ., concur.

10)
SUPREME COURT
FIRST DIVISION
MAXIMO CALALANG,
Petitioner,
-versus- G.R. No. 47800
December 2, 1940
A. D. WILLIAMS, ET AL.,
Respondents.
x--------------------------------------------------x
DECISION
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court this petition for a writ of
prohibition against the respondents, A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public
Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan
Dominguez, as Acting Chief of Police of Manila. chanroblespublishingcompany
It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to the Director of
Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along
Rosario Street extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.;
and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of
one year from the date of the opening of the Colgante Bridge to traffic; that the Chairman of the National Traffic Commission, on July 18,
1940 recommended to the Director of Public Works the adoption of the measure proposed in the resolution aforementioned, in pursuance of
the provisions of Commonwealth Act No. 548 which authorizes said Director of Public Works, with the approval of the Secretary of Public
Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads; that on
August 2, 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications, recommended to
the latter the approval of the recommendation made by the Chairman of the National Traffic Commission as aforesaid, with the modification
that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at
Antipolo Street to Azcarraga Street; that on August 10, 1940, the Secretary of Public Works and Communications, in his second indorsement
addressed to the Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to
traffic of animal-drawn vehicles, between the points and during the hours as above indicated, for a period of one year from the date of the
opening of the Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be
enforced the rules and regulations thus adopted; that as a consequence of such enforcement, all animal-drawn vehicles are not allowed to
pass and pick up passengers in the places above-mentioned to the detriment not only of their owners but of the riding public as well.
chanroblespublishingcompany
It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works, with the approval of the Secretary of
Public Works and Communications, is authorized to promulgate rules and regulations for the regulation and control of the use of and traffic
on national roads and streets is unconstitutional because it constitutes an undue delegation of legislative power. This contention is
untenable. As was observed by this court in Rubi vs. Provincial Board of Mindoro (39 Phil, 660, 700), The rule nowhere been better stated
than in the early Ohio case decided by Judge Ranney, and since followed in a multitude of cases, namely: The true distinction therefore is
between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can
be made. (Cincinnati, W. & Z. R. Co. vs. Commrs. Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman
vs. Southard (10 Wheat., 1) may be committed by the Legislature to an executive department or official. The Legislature may make decisions
of executive departments or subordinate officials thereof, to whom it has committed the execution of certain acts, final on questions of fact.

(U.S. vs. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is to give prominence to the necessity of the case.
chanroblespublishingcompany
Section 1 of Commonwealth Act No. 548 reads as follows:
SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads by acts of the
National Assembly or by executive orders of the President of the Philippines, the Director of Public Works, with the approval of the
Secretary of Public Works and Communications, shall promulgate the necessary rules and regulations to regulate and control the
use of and traffic on such roads and streets. Such rules and regulations, with the approval of the President, may contain provisions
controlling or regulating the construction of buildings or other structures within a reasonable distance from along the national
roads. Such roads may be temporarily closed to any or all classes of traffic by the Director of Public Works and his duly authorized
representatives whenever the condition of the road or the traffic thereon makes such action necessary or advisable in the public
convenience and interest, or for a specified period, with the approval of the Secretary of Public Works and Communications.
chanroblespublishingcompany
The above provisions of law do not confer legislative power upon the Director of Public Works and the Secretary of Public Works and
Communications. The authority therein conferred upon them and under which they promulgated the rules and regulations now complained
of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said
Act, to wit, to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National
Assembly or by executive orders of the President of the Philippines and to close them temporarily to any or all classes of traffic whenever
the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest. The delegated power,
if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which
the application of said law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine when and
how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly. It must depend on the
discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the
law. But it cannot be said that the exercise of such discretion is the making of the law. As was said in Lockes Appeal (72 Pa. 491): To assert
that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the
public welfare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know. The
proper distinction the court said was this: The Legislature cannot delegate its power to make the law; but it can make a law to delegate a
power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be
to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the
law-making power, and, must, therefore, be a subject of inquiry and determination outside of the halls of legislation. (Field vs. Clark, 143 U.
S. 649, 694; 36 L. Ed. 294.)
In the case of People vs. Rosenthal and Osmea, G.R. Nos. 46076 and 46077, promulgated June 12, 1939, and in Pangasinan Transportation
vs. The Public Service Commission, G.R. No. 47065, promulgated June 26, 1940, this Court had occasion to observe that the principle of
separation of powers has been made to adapt itself to the complexities of modern governments, giving rise to the adoption, within certain
limits, of the principle of subordinate legislation, not only in the United States and England but in practically all modern governments.
Accordingly, with the growing complexity of modern life, the multiplication of the subjects of governmental regulations, and the increased
difficulty of administering the laws, the rigidity of the theory of separation of governmental powers has, to a large extent, been relaxed by
permitting the delegation of greater powers by the legislative and vesting a larger amount of discretion in administrative and executive
officials, not only in the execution of the laws, but also in the promulgation of certain rules and regulations calculated to promote public
interest. chanroblespublishingcompany
The petitioner further contends that the rules and regulations promulgated by the respondents pursuant to the provisions of Commonwealth
Act No. 548 constitute an unlawful interference with legitimate business or trade and abridge the right to personal liberty and freedom of
locomotion. Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the paramount police power of the state.
chanroblespublishingcompany
Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote safe transit upon and avoid
obstructions on national roads, in the interest and convenience of the public. In enacting said law, therefore, the National Assembly was
prompted by considerations of public convenience and welfare. It was inspired by a desire to relieve congestion of traffic. which is, to say the
least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in order to promote the
general welfare may interfere with personal liberty, with property, and with business and occupations. Persons and property may be
subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and prosperity of the state (U.S. vs. Gomez
Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing without
which life is a misery, but liberty should not be made to prevail over authority because then society will fall into anarchy. Neither should
authority be made to prevail over liberty because then the individual will fall into slavery. The citizen should achieve the required balance of
liberty and authority in his mind through education and personal discipline, so that there may be established the resultant equilibrium,
which means peace and order and happiness for all. The moment greater authority is conferred upon the government, logically so much is
withdrawn from the residuum of liberty which resides in the people. The paradox lies in the fact that the apparent curtailment of liberty is
precisely the very means of insuring its preservation. chanroblespublishingcompany
The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins vs. Los Angeles (195 U.S. 223, 238; 49
L. ed. 169), the right to exercise the police power is a continuing one, and a business lawful today may in the future, because of the changed
situation, the growth of population or other causes, become a menace to the public health and welfare, and be required to yield to the public
good. And in People vs. Pomar (46 Phil., 440), it was observed that advancing civilization is bringing within the police power of the state
today things which were not thought of as being within such power yesterday. The development of civilization, the rapidly increasing
population, the growth of public opinion, with an increasing desire on the part of the masses and of the government to look after and care for
the interests of the individuals of the state, have brought within the police power many questions for regulation which formerly were not so
considered. chanroblespublishingcompany

The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional precept regarding the promotion of
social justice to insure the well-being and economic security of all the people. The promotion of social justice, however, is to be achieved not
through a mistaken sympathy towards any given group. Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but
the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government
of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic
and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle
of salus populi est suprema lex. chanroblespublishingcompany
Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society
and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent
with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about
the greatest good to the greatest number. chanroblespublishingcompany
IN VIEW OF THE FOREGOING, the Writ of Prohibition Prayed for is hereby denied, with costs against the petitioner. So ordered.
Avancea, C.J., Imperial, Diaz and Horrilleno, JJ., concur.

11)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO,
FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO,
FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J.
PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO,
CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D.
TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE
SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO
AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE PHILIPPINES, respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to Mycenae after performing
his eleventh labor. The two wrestled mightily and Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even
stronger to resume their struggle. This happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it
dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body was touching his Mother Earth.
Thus forewarned, Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and death, of men and women
who, like Antaeus need the sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But
it is more than a slogan. Through the brooding centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security of all the
people," 1 especially the less privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership and profits."

Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the
tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article XIII on
Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people. These include
a call in the following words for the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to
receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small landowners. The State shall further provide
incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by the Congress of the
Philippines on August 8, 1963, in line with the above-stated principles. This was substantially superseded almost a decade later by P.D. No.
27, which was promulgated on October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform. Thus, on July 17, 1987,
President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for
the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by
Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics
for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power from the President and started
its own deliberations, including extensive public hearings, on the improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which President
Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them
suppletory effect insofar as they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will be the subject of one common discussion and resolution, The different
antecedents of each case will require separate treatment, however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and his wife and a 5hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands
by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers, due process, equal
protection and the constitutional limitation that no private property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid also for
violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners. Moreover, it does not
conform to Article VI, Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same may be made only by a court of justice and
not by the President of the Philippines. They invoke the recent cases of EPZA v. Dulay 5 and Manotok v. National Food Authority. 6 Moreover,
the just compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property rights as
protected by due process. The equal protection clause is also violated because the order places the burden of solving the agrarian problems on
the owners only of agricultural lands. No similar obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands occupied by them, E.O. No.
228 ignored judicial prerogatives and so violated due process. Worse, the measure would not solve the agrarian problem because even the
small farmers are deprived of their lands and the retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases of Chavez v. Zobel, 7 Gonzales v.
Estrella, 8 and Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of
just compensation by the executive authorities conformably to the formula prescribed under the questioned order is at best initial or
preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to the order is
premature because no valuation of their property has as yet been made by the Department of Agrarian Reform. The petitioners are also not
proper parties because the lands owned by them do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits on tenanted lands and that in
any event their petition is a class suit brought in behalf of landowners with landholdings below 24 hectares. They maintain that the
determination of just compensation by the administrative authorities is a final ascertainment. As for the cases invoked by the public
respondent, the constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the validity of the
imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have
been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare land, who complained that
the DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his
tenant on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition that
the above- mentioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros Occidental. Co-petitioner Planters'
Committee, Inc. is an organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131
and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to
Congress and not the President. Although they agree that the President could exercise legislative power until the Congress was convened,
she could do so only to enact emergency measures during the transition period. At that, even assuming that the interim legislative power of
the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating the constitutional
provisions on just compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY
BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which
shall be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received
through the Presidential Commission on Good Government and such other sources as government may deem appropriate. The amounts
collected and accruing to this special fund shall be considered automatically appropriated for the purpose authorized in this Proclamation the
amount appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated expropriation has yet to be raised and
cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with
money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the
Land Bank of the Philippines "shall compensate the landowner in an amount to be established by the government, which shall be based on
the owner's declaration of current fair market value as provided in Section 4 hereof, but subject to certain controls to be defined and
promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid fully in money but in any of several modes
that may consist of part cash and part bond, with interest, maturing periodically, or direct payment in cash or bond as may be mutually
agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of the sugar planters'
situation. There is no tenancy problem in the sugar areas that can justify the application of the CARP to them. To the extent that the sugar
planters have been lumped in the same legislation with other farmers, although they are a separate group with problems exclusively their
own, their right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters (NASP) which claims a membership
of at least 20,000 individual sugar planters all over the country. On September 10, 1987, another motion for intervention was filed, this time
by Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any event, the appropriation is
invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an
initial appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing evidence the necessity for the
exercise of the powers of eminent domain, and the violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land for an amount equal to the
government assessor's valuation of the land for tax purposes. On the other hand, if the landowner declares his own valuation he is unjustly
required to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of Proc. No. 131 and E.O. No.
229. He also justifies the necessity for the expropriation as explained in the "whereas" clauses of the Proclamation and submits that, contrary
to the petitioner's contention, a pilot project to determine the feasibility of CARP and a general survey on the people's opinion thereon are not
indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and should
be differently treated. The Comment also suggests the possibility of Congress first distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the payment of public money without the corresponding
appropriation. There is no rule that only money already in existence can be the subject of an appropriation law. Finally, the earmarking of
fifty billion pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated. The
word "initial" simply means that additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the constitutionality of E.O. No. 229. In
addition to the arguments already raised, Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;
(3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the House of
Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued
to the private respondents, who then refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation Land transfer and asked for
the recall and cancellation of the Certificates of Land Transfer in the name of the private respondents. He claims that on December 24, 1986,
his petition was denied without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted upon when
E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic because they directly effected the transfer of his
land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no private property shall be taken without
due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is anomalous and arbitrary, besides
violating the doctrine of separation of powers. The legislative power granted to the President under the Transitory Provisions refers only to
emergency measures that may be promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying him just compensation
for his land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered as advance
payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small landowners in the program
along with other landowners with lands consisting of seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion for reconsideration filed with the Minister
of Agrarian Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted
pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21. 1972, the tenant-farmer of
agricultural land was deemed the owner of the land he was tilling. The leasehold rentals paid after that date should therefore be considered
amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on December 14, 1987. An appeal to the
Office of the President would be useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not exceeding seven hectares
as long as they are cultivating or intend to cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from his
farmholding until such time as the respective rights of the tenant- farmers and the landowner shall have been determined
in accordance with the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of Agrarian
Reform has so far not issued the implementing rules required under the above-quoted decree. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of retention from persons
who own other agricultural lands of more than 7 hectares in aggregate area or lands used for residential, commercial, industrial or other
purposes from which they derive adequate income for their family. And even assuming that the petitioners do not fall under its terms, the

regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on
Retention by Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978,
(Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on
Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off
Date for Landowners to Apply for Retention and/or to Protest the Coverage of their Landholdings under Operation Land Transfer pursuant to
P.D. No. 27). For failure to file the corresponding applications for retention under these measures, the petitioners are now barred from
invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the pendency of their appeal to
the President of the Philippines. Moreover, the issuance of the implementing rules, assuming this has not yet been done, involves the exercise
of discretion which cannot be controlled through the writ of mandamus. This is especially true if this function is entrusted, as in this case, to
a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not own more than seven
hectares of agricultural land. Moreover, assuming arguendo that the rules were intended to cover them also, the said measures are
nevertheless not in force because they have not been published as required by law and the ruling of this Court in Tanada v. Tuvera. 10 As for
LOI 474, the same is ineffective for the additional reason that a mere letter of instruction could not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three departments of the government, the judiciary is
nonetheless vested with the power to annul the acts of either the legislative or the executive or of both when not conformable to the
fundamental law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed
or readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and
of their respect for the other departments, in striking down the acts of the legislative and the executive as unconstitutional. The policy,
indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring therefor the concurrence
of a majority of the members of the Supreme Court who took part in the deliberations and voted on the issue during their session en banc. 11
And as established by judge made doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper
party, and the resolution of the question is unavoidably necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the
petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or
measures complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the
Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive
orders issued by President Quirino although they were invoking only an indirect and general interest shared in common with the public. The
Court dismissed the objection that they were not proper parties and ruled that "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." We have since then applied this
exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional issues like the ones now before
it, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only
criterion will be the Constitution as God and its conscience give it the light to probe its meaning and discover its purpose. Personal motives
and political considerations are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer fall, and heavily," to use
Justice Laurel's pithy language, where the acts of these departments, or of any public official, betray the people's will as expressed in the
Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn and sacred
obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to

establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. This
is in truth all that is involved in what is termed "judicial supremacy" which properly is the power of judicial review under
the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the constitutionality of the
several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained in Gonzales
v. Estrella and we find no reason to modify or reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and
E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was formally convened and
took over legislative power from her. They are not "midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was
issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct
to say that these measures ceased to be valid when she lost her legislative power for, like any statute, they continue to be in force unless
modified or repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become inoperative simply because of
the dissolution of the legislature that enacted it. By the same token, President Aquino's loss of legislative power did not have the effect of
invalidating all the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the challenged measures and
has specifically provided that they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its provisions.

17

Indeed, some portions

of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been
incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a valid appropriation as
specified in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said
fund, for that is not its principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize the release of
public funds from the treasury.

19

The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian

reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article VI, are not applicable. With
particular reference to Section 24, this obviously could not have been complied with for the simple reason that the House of Representatives,
which now has the exclusive power to initiate appropriation measures, had not yet been convened when the proclamation was issued. The
legislative power was then solely vested in the President of the Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for retention
limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in Section
6 of the law, which in fact is one of its most controversial provisions. This section declares:
Retention Limits. Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any
public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm,
such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform
Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3)
hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That
landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate
said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to be expressed in its title,
deserves only short attention. It is settled that the title of the bill does not have to be a catalogue of its contents and will suffice if the matters
embodied in the text are relevant to each other and may be inferred from the title.

20

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was called, had the force and
effect of law because it came from President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R.
No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that
it was issued by President Marcos, whose word was law during that time.

But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement for publication as this
Court held in Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of the Civil Code, they could
not have any force and effect if they were among those enactments successfully challenged in that case. LOI 474 was published, though, in the
Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot issue to compel the performance
of a discretionary act, especially by a specific department of the government. That is true as a general proposition but is subject to one
important qualification. Correctly and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary
duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise of such duty
occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of mandamus to
compel action. If the duty is purely ministerial, the courts will require specific action. If the duty is purely discretionary,
the courts by mandamus will require action only. For example, if an inferior court, public official, or board should, for an
unreasonable length of time, fail to decide a particular question to the great detriment of all parties concerned, or a court
should refuse to take jurisdiction of a cause when the law clearly gave it jurisdiction mandamus will issue, in the first case
to require a decision, and in the second to require that jurisdiction be taken of the cause.

22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate remedy available from the
administrative authorities, resort to the courts may still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both
powers at the same time on the same subject. In the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all
municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power being exercised
was eminent domain because the property involved was wholesome and intended for a public use. Property condemned under the police
power is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the public
safety, or obscene materials, which should be destroyed in the interest of public morals. The confiscation of such property is not compensable,
unlike the taking of property under the power of expropriation, which requires the payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in a famous aphorism: "The general
rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The
regulation that went "too far" was a law prohibiting mining which might cause the subsidence of structures for human habitation constructed
on the land surface. This was resisted by a coal company which had earlier granted a deed to the land over its mine but reserved all mining
rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held the law could not be sustained without
compensating the grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the police power. He
said:
Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right
theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation.
But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The
restriction here in question is merely the prohibition of a noxious use. The property so restricted remains in the
possession of its owner. The state does not appropriate it or make any use of it. The state merely prevents the owner from
making a use which interferes with paramount rights of the public. Whenever the use prohibited ceases to be noxious
as it may because of further changes in local or social conditions the restriction will have to be removed and the owner
will again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of eminent domain, with the latter
being used as an implement of the former like the power of taxation. The employment of the taxing power to achieve a police purpose has long
been accepted.

26

As for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring to the earlier

case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power) makes the following significant
remarks:
Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on different planets.
Generally speaking, they viewed eminent domain as encompassing public acquisition of private property for
improvements that would be available for public use," literally construed. To the police power, on the other hand, they
assigned the less intrusive task of preventing harmful externalities a point reflected in the Euclid opinion's reliance on an
analogy to nuisance law to bolster its support of zoning. So long as suppression of a privately authored harm bore a
plausible relation to some legitimate "public purpose," the pertinent measure need have afforded no compensation
whatever. With the progressive growth of government's involvement in land use, the distance between the two powers has
contracted considerably. Today government often employs eminent domain interchangeably with or as a useful
complement to the police power-- a trend expressly approved in the Supreme Court's 1954 decision in Berman v. Parker,

which broadened the reach of eminent domain's "public use" test to match that of the police power's standard of "public
purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of Columbia as a proper exercise of
the police power. On the role of eminent domain in the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary,
there is nothing in the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City,

29

decided by a 6-3 vote in 1978, the U.S Supreme Court sustained the respondent's

Landmarks Preservation Law under which the owners of the Grand Central Terminal had not been allowed to construct a multi-story office
building over the Terminal, which had been designated a historic landmark. Preservation of the landmark was held to be a valid objective of
the police power. The problem, however, was that the owners of the Terminal would be deprived of the right to use the airspace above it
although other landowners in the area could do so over their respective properties. While insisting that there was here no taking, the Court
nonetheless recognized certain compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss
caused by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to neighboring properties
the authorized but unused rights accruing to the site prior to the Terminal's designation as a landmark the rights which would have been
exhausted by the 59-story building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites
were proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others
the right to construct larger, hence more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the
measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of
private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of
whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for
which payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required
is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the
farmer-beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several measures before us are challenged as violative of
the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed has already been discussed
and dismissed. It is noted that although they excited many bitter exchanges during the deliberation of the CARP Law in Congress, the
retention limits finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here.
The Court will come to the other claimed violations of due process in connection with our examination of the adequacy of just compensation
as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also become
academic under Section 6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits. There is also the complaint that
they should not be made to share the burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong
to a particular class with particular interests of their own. However, no evidence has been submitted to the Court that the requisites of a
valid classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other
in these same particulars. 31 To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it
must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the
members of the class. 32 The Court finds that all these requisites have been met by the measures here challenged as arbitrary and
discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the
liabilities imposed. 33 The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument
that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is
no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is
accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the lawful
subject and the lawful method. Put otherwise, the interests of the public generally as distinguished from those of a particular class require
the interference of the State and, no less important, the means employed are reasonably necessary for the attainment of the purpose sought
to be achieved and not unduly oppressive upon individuals.

34

As the subject and purpose of agrarian reform have been laid down by the

Constitution itself, we may say that the first requirement has been satisfied. What remains to be examined is the validity of the method
employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the
means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the
Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or
the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration
to say that a, person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the
nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his property,
the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken for public use
without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use
upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to
sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the
parties.

35

It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the

vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the
interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the
time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation is
found in the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the abundant
jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1)
public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first distribute public agricultural lands
in the pursuit of agrarian reform instead of immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the CARP as the Constitution calls for "the just
distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands in the manner prescribed by the
CARP was made by the legislative and executive departments in the exercise of their discretion. We are not justified in reviewing that
discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what is known as the political
question. As explained by Chief Justice Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It refers to "those
questions which, under the Constitution, are to be decided by the people in their sovereign capacity; or in regard to which
full discretionary authority has been delegated to the legislative or executive branch of the government." It is concerned
with issues dependent upon the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted with the enlargement of judicial power, which now includes the
authority of the courts "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government."

37

Even so, this should not be construed as a license for us to reverse the other

departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the redistribution of private landholdings (even
as the distribution of public agricultural lands is first provided for, while also continuing apace under the Public Land Act and other cognate
laws). The Court sees no justification to interpose its authority, which we may assert only if we believe that the political decision is not
unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between the American
bank and the international line, as well as all of the upland north of the present ship canal, throughout its entire length,
was "necessary for the purpose of navigation of said waters, and the waters connected therewith," that determination is
conclusive in condemnation proceedings instituted by the United States under that Act, and there is no room for judicial
review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the Constitution itself No less than the 1987 Charter
calls for agrarian reform, which is the reason why private agricultural lands are to be taken from their owners, subject to the prescribed
maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the
constitutional injunction that the State adopt the necessary measures "to encourage and undertake the just distribution of all agricultural
lands to enable farmers who are landless to own directly or collectively the lands they till." That public use, as pronounced by the
fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.
stressed by this Court that the measure is not the taker's gain but the owner's loss.

40

39

It has been repeatedly

The word "just" is used to intensify the meaning of the

word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample.
41

It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the use of private lands under
the police power. We deal here with an actual taking of private agricultural lands that has dispossessed the owners of their property and
deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following conditions concur: (1) the expropriator
must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal
authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization
of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. All these
requisites are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the condemned property, as
"the compensation is a public charge, the good faith of the public is pledged for its payment, and all the resources of taxation may be
employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner,
upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in
accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of
Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative authorities
in violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection or disregard by the
owner of the offer of the government to buy his land... the DAR shall conduct summary administrative proceedings to determine the compensation for the land by requiring
the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within
fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted
for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other
branch or official of the government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing
that the just compensation for property under expropriation should be either the assessment of the property by the government or the sworn
valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E.
Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on
judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for
final determination.
Thus, although in an expropriation proceeding the court technically would still have the power to determine the just
compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower
value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for

the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process
clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had
before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of a
mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor, and
its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in determining
what is just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of constitutional
just compensation is concerned.
xxx
In the present petition, we are once again confronted with the same question of whether the courts under P.D. No. 1533,
which contains the same provision on just compensation as its predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the decree and to this effect, to appoint commissioners for
such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax documents is unfair
or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the haphazard work of a minor
bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have
actually viewed the property, after evidence and arguments pro and con have been presented, and after all factors and
considerations essential to a fair and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees
constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, the determination of the just
compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly
provides:
Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination
of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still
have the right to review with finality the said determination in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such amount as may be
agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and
17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the
land.
The compensation shall be paid in one of the following modes, at the option of the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned
Twenty-five percent (25%) cash, the balance to be paid in government financial
instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares Thirty
percent (30%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(c) For lands twenty-four (24) hectares and below Thirty-five percent (35%) cash,
the balance to be paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other
qualified investments in accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%)
of the face value of the bonds shall mature every year from the date of issuance
until the tenth (10th) year: Provided, That should the landowner choose to forego
the cash portion, whether in full or in part, he shall be paid correspondingly in
LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the
landowner, his successors-in- interest or his assigns, up to the amount of their face
value, for any of the following:
(i) Acquisition of land or other real properties of the government, including assets
under the Asset Privatization Program and other assets foreclosed by government
financial institutions in the same province or region where the lands for which the
bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled corporations
or shares of stock owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;
(iv) Security for loans with any government financial institution, provided the
proceeds of the loans shall be invested in an economic enterprise, preferably in a
small and medium- scale industry, in the same province or region as the land for
which the bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the use of
these bonds for these purposes will be limited to a certain percentage of the
outstanding balance of the financial instruments; Provided, further, That the
PARC shall determine the percentages mentioned above;
(vi) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it requires the owners of the
expropriated properties to accept just compensation therefor in less than money, which is the only medium of payment allowed. In support of
this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to a just
compensation, which should be neither more nor less, whenever it is possible to make the assessment, than the money
equivalent of said property. Just compensation has always been understood to be the just and complete equivalent of the
loss which the owner of the thing expropriated has to suffer by reason of the expropriation .
In J.M. Tuazon Co. v. Land Tenure Administration,

46

45

(Emphasis supplied.)

this Court held:

It is well-settled that just compensation means the equivalent for the value of the property at the time of its taking.
Anything beyond that is more, and anything short of that is less, than just compensation. It means a fair and full
equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the
expropriating entity. The market value of the land taken is the just compensation to which the owner of condemned
property is entitled, the market value being that sum of money which a person desirous, but not compelled to buy, and an

owner, willing, but not compelled to sell, would agree on as a price to be given and received for such property. (Emphasis
supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is also to the effect that just
compensation for property expropriated is payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner to accept
anything but money, nor can the owner compel or require the condemnor to pay him on any other basis than the value of
the property in money at the time and in the manner prescribed by the Constitution and the statutes. When the power of
eminent domain is resorted to, there must be a standard medium of payment, binding upon both parties, and the law has
fixed that standard as money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and constant
standard of compensation.

48

"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be paid at least
within a reasonable time after the taking, and it is not within the power of the Legislature to substitute for such payment
future obligations, bonds, or other valuable advantage.

49

(Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. And so,
conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional excercise
of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be
taken by the State from its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the
maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community or
of a small segment of the population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to the landglutted owner. Its purpose does not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it
hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in
this program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this
revolution in the farms, calling for "a just distribution" among the farmers of lands that have heretofore been the prison of their dreams but
can now become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of land subject to
expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of P50
billion initially appropriated, which is already staggering as it is by our present standards. Such amount is in fact not even fully available at
this time.
We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a top priority project of
the government. It is a part of this assumption that when they envisioned the expropriation that would be needed, they also intended that the
just compensation would have to be paid not in the orthodox way but a less conventional if more practical method. There can be no doubt that
they were aware of the financial limitations of the government and had no illusions that there would be enough money to pay in cash and in
full for the lands they wanted to be distributed among the farmers. We may therefore assume that their intention was to allow such manner
of payment as is now provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be paid fully with money),
or indeed of the entire amount of the just compensation, with other things of value. We may also suppose that what they had in mind was a
similar scheme of payment as that prescribed in P.D. No. 27, which was the law in force at the time they deliberated on the new Charter and
with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical agreement among the members regarding the
meaning to be given the concept of just compensation as applied to the comprehensive agrarian reform program being contemplated. There
was the suggestion to "fine tune" the requirement to suit the demands of the project even as it was also felt that they should "leave it to
Congress" to determine how payment should be made to the landowner and reimbursement required from the farmer-beneficiaries. Such
innovations as "progressive compensation" and "State-subsidized compensation" were also proposed. In the end, however, no special definition
of the just compensation for the lands to be expropriated was reached by the Commission.

50

On the other hand, there is nothing in the records either that militates against the assumptions we are making of the general sentiments and
intention of the members on the content and manner of the payment to be made to the landowner in the light of the magnitude of the
expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore- quoted
Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has
influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society
or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see the goal of agrarian reform
achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades. We are aware that
invalidation of the said section will result in the nullification of the entire program, killing the farmer's hopes even as they approach
realization and resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the
proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of
value. No less importantly, the government financial instruments making up the balance of the payment are "negotiable at any time." The
other modes, which are likewise available to the landowner at his option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already
remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are of the need
for their forebearance and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform.
Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be viable any more as it appears that
Section 4 of the said Order has been superseded by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall be
that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says that the just compensation shall be
ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just
compensation, in contravention of a well- accepted principle of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of
the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation
is entered and paid, but the condemnor's title relates back to the date on which the petition under the Eminent Domain Act, or the
commissioner's report under the Local Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the
owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis,

53

the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until

just compensation had actually been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v.
McLure, 54 it was held that "actual payment to the owner of the condemned property was a condition precedent to the investment of the title
to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said
that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the
authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that "both on principle and
authority the rule is ... that the right to enter on and use the property is complete, as soon as the property is actually appropriated under the
authority of law for a public use, but that the title does not pass from the owner without his consent, until just compensation has been made to
him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that
the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can
be finally and irrevocably taken from an unwilling owner until compensation is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall "be deemed the
owner" of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however, that full
payment of the just compensation also had to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:


All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of
Presidential Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in the farmers'
cooperatives and full payment of just compensation. Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the
"lease rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full payment of
just compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of
the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title
also remains with the landowner. 57 No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also
be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are
retained by him even now under R.A. No. 6657. This should counter-balance the express provision in Section 6 of the said law that "the
landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the
approval of this Act shall retain the same areas as long as they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the petitioners with the Office of the
President has already been resolved. Although we have said that the doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet to be examined on the administrative level, especially the claim that
the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet exercised their retention rights, if
any, under P.D. No. 27, the Court holds that they are entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on
the whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack from those who point to the
shortcomings of these measures and ask that they be scrapped entirely. To be sure, these enactments are less than perfect; indeed, they
should be continuously re-examined and rehoned, that they may be sharper instruments for the better protection of the farmer's rights. But
we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls
and expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's words,
"it is an experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by our own mistakes. We cannot
expect perfection although we should strive for it by all means. Meantime, we struggle as best we can in freeing the farmer from the iron
shackles that have unconscionably, and for so long, fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are removed, to clear the way for the
true freedom of the farmer. We may now glimpse the day he will be released not only from want but also from the exploitation and disdain of
the past and from his own feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on which he
toils will be his farm. It will be his portion of the Mother Earth that will give him not only the staff of life but also the joy of living. And where
once it bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at last can he banish
from his small plot of earth his insecurities and dark resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional
objections raised in the herein petitions.
2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their
respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized.
4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights
granted by R.A. No. 6657 under the conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to costs.
SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino,
Medialdea and Regalado, JJ., concur.

12)
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 118978 May 23, 1997


PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, * petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and GRACE DE GUZMAN, respondents.

REGALADO, J.:
Seeking relief through the extraordinary writ of certiorari, petitioner Philippine Telegraph and Telephone Company (hereafter, PT & T)
invokes the alleged concealment of civil status and defalcation of company funds as grounds to terminate the services of an employee. That
employee, herein private respondent Grace de Guzman, contrarily argues that what really motivated PT & T to terminate her services was
her having contracted marriage during her employment, which is prohibited by petitioner in its company policies. She thus claims that she
was discriminated against in gross violation of law, such a proscription by an employer being outlawed by Article 136 of the Labor Code.
Grace de Guzman was initially hired by petitioner as a reliever, specifically as a "Supernumerary Project Worker," for a fixed period from
November 21, 1990 until April 20, 1991 vice one C.F. Tenorio who went on maternity leave. 1 Under the Reliever Agreement which she signed
with petitioner company, her employment was to be immediately terminated upon expiration of the agreed period. Thereafter, from June 10,
1991 to July 1, 1991, and from July 19, 1991 to August 8, 1991, private respondent's services as reliever were again engaged by petitioner,
this time in replacement of one Erlinda F. Dizon who went on leave during both periods. 2 After August 8, 1991, and pursuant to their
Reliever Agreement, her services were terminated.
On September 2, 1991, private respondent was once more asked to join petitioner company as a probationary employee, the probationary
period to cover 150 days. In the job application form that was furnished her to be filled up for the purpose, she indicated in the portion for
civil status therein that she was single although she had contracted marriage a few months earlier, that is, on May 26, 1991. 3
It now appears that private respondent had made the same representation in the two successive reliever agreements which she signed on
June 10, 1991 and July 8, 1991. When petitioner supposedly learned about the same later, its branch supervisor in Baguio City, Delia M.
Oficial, sent to private respondent a memorandum dated January 15, 1992 requiring her to explain the discrepancy. In that memorandum,
she was reminded about the company's policy of not accepting married women for employment. 4
In her reply letter dated January 17, 1992, private respondent stated that she was not aware of PT&T's policy regarding married women at
the time, and that all along she had not deliberately hidden her true civil status. 5 Petitioner nonetheless remained unconvinced by her
explanations. Private respondent was dismissed from the company effective January 29, 1992, 6 which she readily contested by initiating a
complaint for illegal dismissal, coupled with a claim for non-payment of cost of living allowances (COLA), before the Regional Arbitration
Branch of the National Labor Relations Commission in Baguio City.
At the preliminary conference conducted in connection therewith, private respondent volunteered the information, and this was incorporated
in the stipulation of facts between the parties, that she had failed to remit the amount of P2,380.75 of her collections. She then executed a
promissory note for that amount in favor of petitioner 7. All of these took place in a formal proceeding and with the agreement of the parties
and/or their counsel.

On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a decision declaring that private respondent, who had already
gained the status of a regular employee, was illegally dismissed by petitioner. Her reinstatement, plus payment of the corresponding back
wages and COLA, was correspondingly ordered, the labor arbiter being of the firmly expressed view that the ground relied upon by petitioner
in dismissing private respondent was clearly insufficient, and that it was apparent that she had been discriminated against on account of her
having contracted marriage in violation of company rules.
On appeal to the National Labor Relations Commission (NLRC), said public respondent upheld the labor arbiter and, in its decision dated
April 29, 1994, it ruled that private respondent had indeed been the subject of an unjust and unlawful discrimination by her employer, PT &
T. However, the decision of the labor arbiter was modified with the qualification that Grace de Guzman deserved to be suspended for three
months in view of the dishonest nature of her acts which should not be condoned. In all other respects, the NLRC affirmed the decision of the
labor arbiter, including the order for the reinstatement of private respondent in her employment with PT & T.
The subsequent motion for reconsideration filed by petitioner was rebuffed by respondent NLRC in its resolution of November 9, 1994, hence
this special civil action assailing the aforestated decisions of the labor arbiter and respondent NLRC, as well as the denial resolution of the
latter.
1. Decreed in the Bible itself is the universal norm that women should be regarded with love and respect but, through the ages, men have
responded to that injunction with indifference, on the hubristic conceit that women constitute the inferior sex. Nowhere has that prejudice
against womankind been so pervasive as in the field of labor, especially on the matter of equal employment opportunities and standards. In
the Philippine setting, women have traditionally been considered as falling within the vulnerable groups or types of workers who must be
safeguarded with preventive and remedial social legislation against discriminatory and exploitative practices in hiring, training, benefits,
promotion and retention.
The Constitution, cognizant of the disparity in rights between men and women in almost all phases of social and political life, provides a
gamut of protective provisions. To cite a few of the primordial ones, Section 14, Article II 8 on the Declaration of Principles and State Policies,
expressly recognizes the role of women in nation-building and commands the State to ensure, at all times, the fundamental equality before
the law of women and men. Corollary thereto, Section 3 of Article XIII 9 (the progenitor whereof dates back to both the 1935 and 1973
Constitution) pointedly requires the State to afford full protection to labor and to promote full employment and equality of employment
opportunities for all, including an assurance of entitlement to tenurial security of all workers. Similarly, Section 14 of Article XIII 10
mandates that the State shall protect working women through provisions for opportunities that would enable them to reach their full
potential.
2. Corrective labor and social laws on gender inequality have emerged with more frequency in the years since the Labor Code was enacted on
May 1, 1974 as Presidential Decree No. 442, largely due to our country's commitment as a signatory to the United Nations Convention on the
Elimination of All Forms of Discrimination Against Women (CEDAW). 11
Principal among these laws are Republic Act No. 6727

12

which explicitly prohibits discrimination against women with respect to terms and

conditions of employment, promotion, and training opportunities; Republic Act No. 6955

13

which bans the "mail-order-bride" practice for a fee

and the export of female labor to countries that cannot guarantee protection to the rights of women workers; Republic Act No. 7192

14

also

known as the "Women in Development and Nation Building Act," which affords women equal opportunities with men to act and to enter into
contracts, and for appointment, admission, training, graduation, and commissioning in all military or similar schools of the Armed Forces of
the Philippines and the Philippine National Police; Republic Act No. 7322 15 increasing the maternity benefits granted to women in the
private sector; Republic Act No. 7877

16

which outlaws and punishes sexual harassment in the workplace and in the education and training

environment; and Republic Act No. 8042,

17

or the "Migrant Workers and Overseas Filipinos Act of 1995," which prescribes as a matter of

policy, inter alia, the deployment of migrant workers, with emphasis on women, only in countries where their rights are secure. Likewise, it
would not be amiss to point out that in the Family Code, 18 women's rights in the field of civil law have been greatly enhanced and expanded.
In the Labor Code, provisions governing the rights of women workers are found in Articles 130 to 138 thereof. Article 130 involves the right
against particular kinds of night work while Article 132 ensures the right of women to be provided with facilities and standards which the
Secretary of Labor may establish to ensure their health and safety. For purposes of labor and social legislation, a woman working in a
nightclub, cocktail lounge, massage clinic, bar or other similar establishments shall be considered as an employee under Article 138. Article
135, on the other hand, recognizes a woman's right against discrimination with respect to terms and conditions of employment on account
simply of sex. Finally, and this brings us to the issue at hand, Article 136 explicitly prohibits discrimination merely by reason of the marriage
of a female employee.
3. Acknowledged as paramount in the due process scheme is the constitutional guarantee of protection to labor and security of tenure. Thus,
an employer is required, as a condition sine qua non prior to severance of the employment ties of an individual under his employ, to
convincingly establish, through substantial evidence, the existence of a valid and just cause in dispensing with the services of such employee,
one's labor being regarded as constitutionally protected property.
On the other hand, it is recognized that regulation of manpower by the company falls within the so-called management prerogatives, which
prescriptions encompass the matter of hiring, supervision of workers, work assignments, working methods and assignments, as well as
regulations on the transfer of employees, lay-off of workers, and the discipline, dismissal, and recall of employees. 19 As put in a case, an

employer is free to regulate, according to his discretion and best business judgment, all aspects of employment, "from hiring to firing," except
in cases of unlawful discrimination or those which may be provided by law.

20

In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any woman worker who contracts marriage
runs afoul of the test of, and the right against, discrimination, afforded all women workers by our labor laws and by no less than the
Constitution. Contrary to petitioner's assertion that it dismissed private respondent from employment on account of her dishonesty, the
record discloses clearly that her ties with the company were dissolved principally because of the company's policy that married women are not
qualified for employment in PT & T, and not merely because of her supposed acts of dishonesty.
That it was so can easily be seen from the memorandum sent to private respondent by Delia M. Oficial, the branch supervisor of the company,
with the reminder, in the words of the latter, that "you're fully aware that the company is not accepting married women employee (sic), as it
was verbally instructed to you." 21 Again, in the termination notice sent to her by the same branch supervisor, private respondent was made
to understand that her severance from the service was not only by reason of her concealment of her married status but, over and on top of
that, was her violation of the company's policy against marriage ("and even told you that married women employees are not applicable [sic] or
accepted in our company.") 22 Parenthetically, this seems to be the curious reason why it was made to appear in the initiatory pleadings that
petitioner was represented in this case only by its said supervisor and not by its highest ranking officers who would otherwise be solidarily
liable with the corporation. 23
Verily, private respondent's act of concealing the true nature of her status from PT & T could not be properly characterized as willful or in
bad faith as she was moved to act the way she did mainly because she wanted to retain a permanent job in a stable company. In other words,
she was practically forced by that very same illegal company policy into misrepresenting her civil status for fear of being disqualified from
work. While loss of confidence is a just cause for termination of employment, it should not be simulated. 24 It must rest on an actual breach of
duty committed by the employee and not on the employer's caprices. 25 Furthermore, it should never be used as a subterfuge for causes which
are improper, illegal, or unjustified. 26
In the present controversy, petitioner's expostulations that it dismissed private respondent, not because the latter got married but because
she concealed that fact, does have a hollow ring. Her concealment, so it is claimed, bespeaks dishonesty hence the consequent loss of
confidence in her which justified her dismissal.
Petitioner would asseverate, therefore, that while it has nothing against marriage, it nonetheless takes umbrage over the concealment of that
fact. This improbable reasoning, with interstitial distinctions, perturbs the Court since private respondent may well be minded to claim that
the imputation of dishonesty should be the other way around.
Petitioner would have the Court believe that although private respondent defied its policy against its female employees contracting marriage,
what could be an act of insubordination was inconsequential. What it submits as unforgivable is her concealment of that marriage yet, at the
same time, declaring that marriage as a trivial matter to which it supposedly has no objection. In other words, PT & T says it gives its
blessings to its female employees contracting marriage, despite the maternity leaves and other benefits it would consequently respond for and
which obviously it would have wanted to avoid. If that employee confesses such fact of marriage, there will be no sanction; but if such
employee conceals the same instead of proceeding to the confessional, she will be dismissed. This line of reasoning does not impress us as
reflecting its true management policy or that we are being regaled with responsible advocacy.
This Court should be spared the ennui of strained reasoning and the tedium of propositions which confuse through less than candid
arguments. Indeed, petitioner glosses over the fact that it was its unlawful policy against married women, both on the aspects of qualification
and retention, which compelled private respondent to conceal her supervenient marriage. It was, however, that very policy alone which was
the cause of private respondent's secretive conduct now complained of. It is then apropos to recall the familiar saying that he who is the cause
of the cause is the cause of the evil caused.
Finally, petitioner's collateral insistence on the admission of private respondent that she supposedly misappropriated company funds, as an
additional ground to dismiss her from employment, is somewhat insincere and self-serving. Concededly, private respondent admitted in the
course of the proceedings that she failed to remit some of her collections, but that is an altogether different story. The fact is that she was
dismissed solely because of her concealment of her marital status, and not on the basis of that supposed defalcation of company funds. That
the labor arbiter would thus consider petitioner's submissions on this supposed dishonesty as a mere afterthought, just to bolster its case for
dismissal, is a perceptive conclusion born of experience in labor cases. For, there was no showing that private respondent deliberately
misappropriated the amount or whether her failure to remit the same was through negligence and, if so, whether the negligence was in
nature simple or grave. In fact, it was merely agreed that private respondent execute a promissory note to refund the same, which she did,
and the matter was deemed settled as a peripheral issue in the labor case.
Private respondent, it must be observed, had gained regular status at the time of her dismissal. When she was served her walking papers on
January 29, 1992, she was about to complete the probationary period of 150 days as she was contracted as a probationary employee on
September 2, 1991. That her dismissal would be effected just when her probationary period was winding down clearly raises the plausible
conclusion that it was done in order to prevent her from earning security of tenure. 27 On the other hand, her earlier stints with the company
as reliever were undoubtedly those of a regular employee, even if the same were for fixed periods, as she performed activities which were

essential or necessary in the usual trade and business of PT & T.

28

The primary standard of determining regular employment is the

reasonable connection between the activity performed by the employee in relation to the business or trade of the employer.

29

As an employee who had therefore gained regular status, and as she had been dismissed without just cause, she is entitled to reinstatement
without loss of seniority rights and other privileges and to full back wages, inclusive of allowances and other benefits or their monetary
equivalent. 30 However, as she had undeniably committed an act of dishonesty in concealing her status, albeit under the compulsion of an
unlawful imposition of petitioner, the three-month suspension imposed by respondent NLRC must be upheld to obviate the impression or
inference that such act should be condoned. It would be unfair to the employer if she were to return to its fold without any sanction
whatsoever for her act which was not totally justified. Thus, her entitlement to back wages, which shall be computed from the time her
compensation was withheld up to the time of her actual reinstatement, shall be reduced by deducting therefrom the amount corresponding to
her three months suspension.
4. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by petitioner PT & T. The Labor Code state, in no
uncertain terms, as follows:
Art. 136. Stipulation against marriage. It shall be unlawful for an employer to require as a condition of employment or
continuation of employment that a woman shall not get married, or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of marriage.
This provision had a studied history for its origin can be traced to Section 8 of Presidential Decree No. 148,
and
Child Labor Law," which amended paragraph (c), Section 12 of Republic Act No. 679,

32

31

better known as the "Women

entitled "An Act to Regulate the Employment of

Women and Children, to Provide Penalties for Violations Thereof, and for Other Purposes." The forerunner to Republic Act No. 679, on the
other hand, was Act No. 3071 which became law on March 16, 1923 and which regulated the employment of women and children in shops,
factories, industrial, agricultural, and mercantile establishments and other places of labor in the then Philippine Islands.
It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita, et al. vs. Philippine Air Lines, 33 a decision that
emanated from the Office of the President. There, a policy of Philippine Air Lines requiring that prospective flight attendants must be single
and that they will be automatically separated from the service once they marry was declared void, it being violative of the clear mandate in
Article 136 of the Labor Code with regard to discrimination against married women. Thus:
Of first impression is the incompatibility of the respondent's policy or regulation with the codal provision of law.
Respondent is resolute in its contention that Article 136 of the Labor Code applies only to women employed in ordinary
occupations and that the prohibition against marriage of women engaged in extraordinary occupations, like flight
attendants, is fair and reasonable, considering the pecularities of their chosen profession.
We cannot subscribe to the line of reasoning pursued by respondent. All along, it knew that the controverted policy has
already met its doom as early as March 13, 1973 when Presidential Decree No. 148, otherwise known as the Women and
Child Labor Law, was promulgated. But for the timidity of those affected or their labor unions in challenging the validity
of the policy, the same was able to obtain a momentary reprieve. A close look at Section 8 of said decree, which amended
paragraph (c) of Section 12 of Republic Act No. 679, reveals that it is exactly the same provision reproduced verbatim in
Article 136 of the Labor Code, which was promulgated on May 1, 1974 to take effect six (6) months later, or on November
1, 1974.
It cannot be gainsaid that, with the reiteration of the same provision in the new Labor Code, all policies and acts against
it are deemed illegal and therefore abrogated. True, Article 132 enjoins the Secretary of Labor to establish standards that
will ensure the safety and health of women employees and in appropriate cases shall by regulation require employers to
determine appropriate minimum standards for termination in special occupations, such as those of flight attendants, but
that is precisely the factor that militates against the policy of respondent. The standards have not yet been established as
set forth in the first paragraph, nor has the Secretary of Labor issued any regulation affecting flight attendants.
It is logical to presume that, in the absence of said standards or regulations which are as yet to be established, the policy
of respondent against marriage is patently illegal. This finds support in Section 9 of the New Constitution, which
provides:
Sec. 9. The State shall afford protection to labor, promote full employment and equality in employment, ensure equal work
opportunities regardless of sex, race, or creed, and regulate the relations between workers and employees. The State shall
assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions
of work . . . .
Moreover, we cannot agree to the respondent's proposition that termination from employment of flight attendants on
account of marriage is a fair and reasonable standard designed for their own health, safety, protection and welfare, as no

basis has been laid therefor. Actually, respondent claims that its concern is not so much against the continued
employment of the flight attendant merely by reason of marriage as observed by the Secretary of Labor, but rather on the
consequence of marriage-pregnancy. Respondent discussed at length in the instant appeal the supposed ill effects of
pregnancy on flight attendants in the course of their employment. We feel that this needs no further discussion as it had
been adequately explained by the Secretary of Labor in his decision of May 2, 1976.
In a vain attempt to give meaning to its position, respondent went as far as invoking the provisions of Articles 52 and 216
of the New Civil Code on the preservation of marriage as an inviolable social institution and the family as a basic social
institution, respectively, as bases for its policy of non-marriage. In both instances, respondent predicates absence of a
flight attendant from her home for long periods of time as contributory to an unhappy married life. This is pure conjecture
not based on actual conditions, considering that, in this modern world, sophisticated technology has narrowed the
distance from one place to another. Moreover, respondent overlooked the fact that married flight attendants can program
their lives to adapt to prevailing circumstances and events.
Article 136 is not intended to apply only to women employed in ordinary occupations, or it should have categorically
expressed so. The sweeping intendment of the law, be it on special or ordinary occupations, is reflected in the whole text
and supported by Article 135 that speaks of non-discrimination on the employment of women.
The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque Mining & Industrial Corporation 34 considered as void a policy of
the same nature. In said case, respondent, in dismissing from the service the complainant, invoked a policy of the firm to consider female
employees in the project it was undertaking as separated the moment they get married due to lack of facilities for married women.
Respondent further claimed that complainant was employed in the project with an oral understanding that her services would be terminated
when she gets married. Branding the policy of the employer as an example of "discriminatory chauvinism" tantamount to denying equal
employment opportunities to women simply on account of their sex, the appellate court struck down said employer policy as unlawful in view
of its repugnance to the Civil Code, Presidential Decree No. 148 and the Constitution.
Under American jurisprudence, job requirements which establish employer preference or conditions relating to the marital status of an
employee are categorized as a "sex-plus" discrimination where it is imposed on one sex and not on the other. Further, the same should be
evenly applied and must not inflict adverse effects on a racial or sexual group which is protected by federal job discrimination laws.
Employment rules that forbid or restrict the employment of married women, but do not apply to married men, have been held to violate Title
VII of the United States Civil Rights Act of 1964, the main federal statute prohibiting job discrimination against employees and applicants on
the basis of, among other things, sex. 35
Further, it is not relevant that the rule is not directed against all women but just against married women. And, where the employer
discriminates against married women, but not against married men, the variable is sex and the discrimination is unlawful.

36

Upon the other

hand, a requirement that a woman employee must remain unmarried could be justified as a "bona fide occupational qualification," or BFOQ,
where the particular requirements of the job would justify the same, but not on the ground of a general principle, such as the desirability of
spreading work in the workplace. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary
for satisfactory job performance. Thus, in one case, a no-marriage rule applicable to both male and female flight attendants, was regarded as
unlawful since the restriction was not related to the job performance of the flight attendants.

37

5. Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any
kind of stipulation against marriage in connection with her employment, but it likewise assaults good morals and public policy, tending as it
does to deprive a woman of the freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and
inalienable right. 38 Hence, while it is true that the parties to a contract may establish any agreements, terms, and conditions that they may
deem convenient, the same should not be contrary to law, morals, good customs, public order, or public policy.

39

Carried to its logical

consequences, it may even be said that petitioner's policy against legitimate marital bonds would encourage illicit or common-law relations
and subvert the sacrament of marriage.
Parenthetically, the Civil Code provisions on the contract of labor state that the relations between the parties, that is, of capital and labor, are
not merely contractual, impressed as they are with so much public interest that the same should yield to the common good.

40

It goes on to

intone that neither capital nor labor should visit acts of oppression against the other, nor impair the interest or convenience of the public.

41

In the final reckoning, the danger of just such a policy against marriage followed by petitioner PT & T is that it strikes at the very essence,
ideals and purpose of marriage as an inviolable social institution and, ultimately, of the family as the foundation of the nation. 42 That it must
be effectively interdicted here in all its indirect, disguised or dissembled forms as discriminatory conduct derogatory of the laws of the land is
not only in order but imperatively required.
ON THE FOREGOING PREMISES, the petition of Philippine Telegraph and Telephone Company is hereby DISMISSED for lack of merit,
with double costs against petitioner.
SO ORDERED.
Romero, Puno, Mendoza and Torres, Jr., JJ., concur.

13)
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. Nos. 120865-71 December 7, 1995


LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH 70, REGIONAL TRIAL COURT OF
BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and CARLITO ARROYO; THE MUNICIPALITY OF BINANGONAN and/or
MAYOR ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH 163, REGIONAL TRIAL COURT
OF PASIG; MANILA MARINE LIFE BUSINESS RESOURCES, INC. represented by, MR. TOBIAS REYNALD M. TIANGCO;
MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR RICARDO D. PAPA, JR., respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE, BRANCH 79, REGIONAL TRIAL
COURT OF MORONG, RIZAL; GREENFIELD VENTURES INDUSTRIAL DEVELOPMENT CORPORATION and R. J. ORION
DEVELOPMENT CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL TRIAL COURT
OF PASIG, METRO MANILA; IRMA FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION, MIRT
CORPORATION and TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF
MORONG, RIZAL; BLUE LAGOON FISHING CORP. and ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA
and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT OF
MORONG, RIZAL; AGP FISH VENTURES, INC., represented by its PRESIDENT ALFONSO PUYAT; MUNICIPALITY OF JALAJALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE, BRANCH 161, REGIONAL TRIAL COURT
OF PASIG, METRO MANILA; SEA MAR TRADING CO. INC.; EASTERN LAGOON FISHING CORP.; MINAMAR FISHING
CORP.; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and profligate consumption and extravagance of the rich or
fishing in the murky waters of the Pasig River and the Laguna Lake or making a clearing in the forest so that he can produce food for his
family, to understand why protecting birds, fish, and trees is more important than protecting him and keeping his family alive.
How do we strike a balance between environmental protection, on the one hand, and the individual personal interests of people, on the other?
Towards environmental protection and ecology, navigational safety, and sustainable development, Republic Act No. 4850 created the "Laguna
Lake Development Authority." This Government Agency is supposed to carry out and effectuate the aforesaid declared policy, so as to
accelerate the development and balanced growth of the Laguna Lake area and the surrounding provinces, cities and towns, in the act clearly
named, within the context of the national and regional plans and policies for social and economic development.
Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections of Republic Act No. 4850 because of the
concern for the rapid expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de Bay, combined with current and
prospective uses of the lake for municipal-industrial water supply, irrigation, fisheries, and the like. Concern on the part of the Government
and the general public over: the environment impact of development on the water quality and ecology of the lake and its related river
systems; the inflow of polluted water from the Pasig River, industrial, domestic and agricultural wastes from developed areas around the
lake; the increasing urbanization which induced the deterioration of the lake, since water quality studies have shown that the lake will
deteriorate further if steps are not taken to check the same; and the floods in Metropolitan Manila area and the lakeshore towns which will
influence the hydraulic system of Laguna de Bay, since any scheme of controlling the floods will necessarily involve the lake and its river
systems, likewise gave impetus to the creation of the Authority.
Section 1 of Republic Act No. 4850 was amended to read as follows:
Sec. 1. Declaration of Policy. It is hereby declared to be the national policy to promote, and accelerate the development
and balanced growth of the Laguna Lake area and the surrounding provinces, cities and towns hereinafter referred to as
the region, within the context of the national and regional plans and policies for social and economic development and to
carry out the development of the Laguna Lake region with due regard and adequate provisions for environmental
management and control, preservation of the quality of human life and ecological systems, and the prevention of undue
ecological disturbances, deterioration and pollution. 1
Special powers of the Authority, pertinent to the issues in this case, include:
Sec. 3. Section 4 of the same Act is hereby further amended by adding thereto seven new paragraphs to be known as
paragraphs (j), (k), (l), (m), (n), (o), and (p) which shall read as follows:
xxx xxx xxx
(j) The provisions of existing laws to the contrary notwithstanding, to engage in fish production and
other aqua-culture projects in Laguna de Bay and other bodies of water within its jurisdiction and in
pursuance thereof to conduct studies and make experiments, whenever necessary, with the
collaboration and assistance of the Bureau of Fisheries and Aquatic Resources, with the end in view of
improving present techniques and practices. Provided, that until modified, altered or amended by the
procedure provided in the following sub-paragraph, the present laws, rules and permits or
authorizations remain in force;
(k) For the purpose of effectively regulating and monitoring activities in Laguna de Bay, the Authority
shall have exclusive jurisdiction to issue new permit for the use of the lake waters for any projects or
activities in or affecting the said lake including navigation, construction, and operation of fishpens, fish
enclosures, fish corrals and the like, and to impose necessary safeguards for lake quality control and
management and to collect necessary fees for said activities and projects: Provided, That the fees
collected for fisheries may be shared between the Authority and other government agencies and
political sub-divisions in such proportion as may be determined by the President of the Philippines
upon recommendation of the Authority's Board: Provided, further, That the Authority's Board may
determine new areas of fishery development or activities which it may place under the supervision of
the Bureau of Fisheries and Aquatic Resources taking into account the overall development plans and
programs for Laguna de Bay and related bodies of water: Provided, finally, That the Authority shall
subject to the approval of the President of the Philippines promulgate such rules and regulations
which shall govern fisheries development activities in Laguna de Bay which shall take into
consideration among others the following: socio-economic amelioration of bonafide resident fishermen
whether individually or collectively in the form of cooperatives, lakeshore town development, a master
plan for fishpen construction and operation, communal fishing ground for lake shore town residents,
and preference to lake shore town residents in hiring laborer for fishery projects;

(l) To require the cities and municipalities embraced within the region to pass appropriate zoning
ordinances and other regulatory measures necessary to carry out the objectives of the Authority and
enforce the same with the assistance of the Authority;
(m) The provisions of existing laws to the contrary notwithstanding, to exercise water rights over
public waters within the Laguna de Bay region whenever necessary to carry out the Authority's
projects;
(n) To act in coordination with existing governmental agencies in establishing water quality standards
for industrial, agricultural and municipal waste discharges into the lake and to cooperate with said
existing agencies of the government of the Philippines in enforcing such standards, or to separately
pursue enforcement and penalty actions as provided for in Section 4 (d) and Section 39-A of this Act:
Provided, That in case of conflict on the appropriate water quality standard to be enforced such
conflict shall be resolved thru the NEDA Board. 2
To more effectively perform the role of the Authority under Republic Act No. 4850, as though Presidential Decree No. 813 were not thought to
be completely effective, the Chief Executive, feeling that the land and waters of the Laguna Lake Region are limited natural resources
requiring judicious management to their optimal utilization to insure renewability and to preserve the ecological balance, the competing
options for the use of such resources and conflicting jurisdictions over such uses having created undue constraints on the institutional
capabilities of the Authority in the light of the limited powers vested in it by its charter, Executive Order No. 927 further defined and
enlarged the functions and powers of the Authority and named and enumerated the towns, cities and provinces encompassed by the term
"Laguna de Bay Region".
Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927 which include in particular the sharing of
fees:
Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within the Lake Region: To effectively regulate and
monitor activities in the Laguna de Bay region, the Authority shall have exclusive jurisdiction to issue permit for the use
of all surface water for any projects or activities in or affecting the said region including navigation, construction, and
operation of fishpens, fish enclosures, fish corrals and the like.
For the purpose of this Executive Order, the term "Laguna de Bay Region" shall refer to the Provinces of Rizal and
Laguna; the Cities of San Pablo, Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns of Tanauan, Sto. Tomas and
Malvar in Batangas Province; the towns of Silang and Carmona in Cavite Province; the town of Lucban in Quezon
Province; and the towns of Marikina, Pasig, Taguig, Muntinlupa, and Pateros in Metro Manila.
Sec 3. Collection of Fees. The Authority is hereby empowered to collect fees for the use of the lake water and its tributaries
for all beneficial purposes including but not limited to fisheries, recreation, municipal, industrial, agricultural, navigation,
irrigation, and waste disposal purpose; Provided, that the rates of the fees to be collected, and the sharing with other
government agencies and political subdivisions, if necessary, shall be subject to the approval of the President of the
Philippines upon recommendation of the Authority's Board, except fishpen fee, which will be shared in the following
manner; 20 percent of the fee shall go to the lakeshore local governments, 5 percent shall go to the Project Development
Fund which shall be administered by a Council and the remaining 75 percent shall constitute the share of LLDA.
However, after the implementation within the three-year period of the Laguna Lake Fishery Zoning and Management Plan,
the sharing will be modified as follows: 35 percent of the fishpen fee goes to the lakeshore local governments, 5 percent goes
to the Project Development Fund and the remaining 60 percent shall be retained by LLDA; Provided, however, that the
share of LLDA shall form part of its corporate funds and shall not be remitted to the National Treasury as an exception to
the provisions of Presidential Decree No. 1234. (Emphasis supplied)
It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna Lake" in this manner:
Sec 41. Definition of Terms.
(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this Act, the same shall refer to Laguna de Bay
which is that area covered by the lake water when it is at the average annual maximum lake level of elevation 12.50
meters, as referred to a datum 10.00 meters below mean lower low water (M.L.L.W). Lands located at and below such
elevation are public lands which form part of the bed of said lake.
Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in the Laguna Lake Region interpreted the
provisions of this law to mean that the newly passed law gave municipal governments the exclusive jurisdiction to issue fishing privileges
within their municipal waters because R.A. 7160 provides:
Sec. 149. Fishery Rentals, Fees and Charges.

(a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose rental
fees or charges therefor in accordance with the provisions of this Section.
(b) The Sangguniang Bayan may:
(1) Grant fishing privileges to erect fish corrals, oyster, mussel or other aquatic beds or bangus fry
areas, within a definite zone of the municipal waters, as determined by it; . . . .
(2) Grant privilege to gather, take or catch bangus fry, prawn fry or kawag-kawag or fry of other
species and fish from the municipal waters by nets, traps or other fishing gears to marginal fishermen
free from any rental fee, charges or any other imposition whatsoever.
xxx xxx xxx
Sec. 447. Power, Duties, Functions and Compensation. . . . .
xxx xxx xxx
(XI) Subject to the provisions of Book II of this Code, grant exclusive privileges of constructing fish
corrals or fishpens, or the taking or catching of bangus fry, prawn fry or kawag-kawag or fry of any
species or fish within the municipal waters.
xxx xxx xxx
Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits. Big fishpen operators took
advantage of the occasion to establish fishpens and fishcages to the consternation of the Authority. Unregulated fishpens and fishcages, as of
July, 1995, occupied almost one-third of the entire lake water surface area, increasing the occupation drastically from 7,000 hectares in 1990
to almost 21,000 hectares in 1995. The Mayor's permit to construct fishpens and fishcages were all undertaken in violation of the policies
adopted by the Authority on fishpen zoning and the Laguna Lake carrying capacity.
To be sure, the implementation by the lakeshore municipalities of separate independent policies in the operation of fishpens and fishcages
within their claimed territorial municipal waters in the lake and their indiscriminate grant of fishpen permits have already saturated the
lake area with fishpens, thereby aggravating the current environmental problems and ecological stress of Laguna Lake.
In view of the foregoing circumstances, the Authority served notice to the general public that:
In compliance with the instructions of His Excellency PRESIDENT FIDEL V. RAMOS given on June 23, 1993 at Pila,
Laguna pursuant to Republic Act 4850 as amended by Presidential Decree 813 and Executive Order 927 series of 1983
and in line with the policies and programs of the Presidential Task Force on Illegal Fishpens and Illegal Fishing, the
general public is hereby notified that:
1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were not registered or to
which no application for registration and/or permit has been filed with Laguna Lake Development Authority as of March
31, 1993 are hereby declared outrightly as illegal.
2. All fishpens, fishcages and other aqua-culture structures so declared as illegal shall be subject to demolition which
shall be undertaken by the Presidential Task Force for Illegal Fishpen and Illegal Fishing.
3. Owners of fishpens, fishcages and other aqua-culture structures declared as illegal shall, without prejudice to
demolition of their structures be criminally charged in accordance with Section 39-A of Republic Act 4850 as amended by
P.D. 813 for violation of the same laws. Violations of these laws carries a penalty of imprisonment of not exceeding 3 years
or a fine not exceeding Five Thousand Pesos or both at the discretion of the court.
All operators of fishpens, fishcages and other aqua-culture structures declared as illegal in accordance with the foregoing
Notice shall have one (1) month on or before 27 October 1993 to show cause before the LLDA why their said fishpens,
fishcages and other aqua-culture structures should not be demolished/dismantled.
One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed fishpens, fishcages and other aquaculture structures advising them to dismantle their respective structures within 10 days from receipt thereof, otherwise, demolition shall be
effected.

Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before various regional trial courts, to wit: (a) Civil
Case No. 759-B, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 70, Binangonan, Rizal, filed by Fleet Development,
Inc. and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction, Regional Trial Court, Branch 162, Pasig, filed by IRMA Fishing and Trading
Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.; (c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional
Trial Court, Branch 163, Pasig, filed by Manila Marine Life Business Resources, Inc. and Tobias Reynaldo M. Tianco; (d) Civil Case No. 556M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil
Case No. 522-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris
Chicken Growers, Inc.; (f) Civil Case No. 554-, for Certiorari and Prohibition, Regional Trial Court, Branch 79, Morong, Rizal, filed by
Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and (g) Civil Case No. 64124, for Injunction, Regional Trial Court,
Branch 15, Pasig, filed by SEA-MAR Trading Co., Inc. and Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.
The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions to dismiss were invariably denied.
Meanwhile, temporary restraining order/writs of preliminary mandatory injunction were issued in Civil Cases Nos. 64124, 759 and 566
enjoining the Authority from demolishing the fishpens and similar structures in question.
Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71, were filed by the Authority with this court.
Impleaded as parties-respondents are concerned regional trial courts and respective private parties, and the municipalities and/or respective
Mayors of Binangonan, Taguig and Jala-jala, who issued permits for the construction and operation of fishpens in Laguna de Bay. The
Authority sought the following reliefs, viz.:
(A) Nullification of the temporary restraining order/writs of preliminary injunction issued in Civil Cases Nos. 64125, 759
and 566;
(B) Permanent prohibition against the regional trial courts from exercising jurisdiction over cases involving the Authority
which is a co-equal body;
(C) Judicial pronouncement that R.A. 7610 (Local Government Code of 1991) did not repeal, alter or modify the provisions
of R.A. 4850, as amended, empowering the Authority to issue permits for fishpens, fishcages and other aqua-culture
structures in Laguna de Bay and that, the Authority the government agency vested with exclusive authority to issue said
permits.
By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to the Court of Appeals.
In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated petitions, the Court of Appeals holding that:
(A) LLDA is not among those quasi-judicial agencies of government whose decision or order are appealable only to the Court of Appeals; (B)
the LLDA charter does vest LLDA with quasi-judicial functions insofar as fishpens are concerned; (C) the provisions of the LLDA charter
insofar as fishing privileges in Laguna de Bay are concerned had been repealed by the Local Government Code of 1991; (D) in view of the
aforesaid repeal, the power to grant permits devolved to and is now vested with their respective local government units concerned.
Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging the following errors:
1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN ERROR WHEN IT RULED THAT THE
LAGUNA LAKE DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.
2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT R.A. 4850 AS
AMENDED BY P.D. 813 AND E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC ACT 7160. THE SAID
RULING IS CONTRARY TO ESTABLISHED PRINCIPLES AND JURISPRUDENCE OF STATUTORY
CONSTRUCTION.
3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED THAT THE POWER
TO ISSUE FISHPEN PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED TO CONCERNED (LAKESHORE)
LOCAL GOVERNMENT UNITS.
We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which agency of the Government the Laguna Lake
Development Authority or the towns and municipalities comprising the region should exercise jurisdiction over the Laguna Lake and its
environs insofar as the issuance of permits for fishery privileges is concerned?
Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, the provisions of Presidential Decree No. 813,
and Section 2 of Executive Order No. 927, cited above, specifically provide that the Laguna Lake Development Authority shall have exclusive
jurisdiction to issue permits for the use of all surface water for any projects or activities in or affecting the said region, including navigation,
construction, and operation of fishpens, fish enclosures, fish corrals and the like. On the other hand, Republic Act No. 7160, the Local
Government Code of 1991, has granted to the municipalities the exclusive authority to grant fishery privileges in municipal waters. The

Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a
definite zone of the municipal waters.
We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the aforementioned laws creating the Laguna Lake
Development Authority and granting the latter water rights authority over Laguna de Bay and the lake region.
The Local Government Code of 1991 does not contain any express provision which categorically expressly repeal the charter of the Authority.
It has to be conceded that there was no intent on the part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal
of laws should be made clear and expressed.
It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a special law. Republic Act No. 7160, the Local
Government Code of 1991, is a general law. It is basic in statutory construction that the enactment of a later legislation which is a general
law cannot be construed to have repealed a special law. It is a well-settled rule in this jurisdiction that "a special statute, provided for a
particular case or class of cases, is not repealed by a subsequent statute, general in its terms, provisions and application, unless the intent to
repeal or alter is manifest, although the terms of the general law are broad enough to include the cases embraced in the special law." 3
Where there is a conflict between a general law and a special statute, the special statute should prevail since it evinces the legislative intent
more clearly than the general statute. The special law is to be taken as an exception to the general law in the absence of special
circumstances forcing a contrary conclusion. This is because implied repeals are not favored and as much as possible, effect must be given to
all enactments of the legislature. A special law cannot be repealed, amended or altered by a subsequent general law by mere implication. 4
Thus, it has to be concluded that the charter of the Authority should prevail over the Local Government Code of 1991.
Considering the reasons behind the establishment of the Authority, which are environmental protection, navigational safety, and sustainable
development, there is every indication that the legislative intent is for the Authority to proceed with its mission.
We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that "Laguna de Bay, like any other single body
of water has its own unique natural ecosystem. The 900 km lake surface water, the eight (8) major river tributaries and several other smaller
rivers that drain into the lake, the 2,920 km basin or watershed transcending the boundaries of Laguna and Rizal provinces, greater portion
of Metro Manila, parts of Cavite, Batangas, and Quezon provinces, constitute one integrated delicate natural ecosystem that needs to be
protected with uniform set of policies; if we are to be serious in our aims of attaining sustainable development. This is an exhaustible natural
resource a very limited one which requires judicious management and optimal utilization to ensure renewability and preserve its
ecological integrity and balance."
"Managing the lake resources would mean the implementation of a national policy geared towards the protection, conservation, balanced
growth and sustainable development of the region with due regard to the inter-generational use of its resources by the inhabitants in this
part of the earth. The authors of Republic Act 4850 have foreseen this need when they passed this LLDA law the special law designed to
govern the management of our Laguna de Bay lake resources."
"Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies where lakeshore local government units
exercise exclusive dominion over specific portions of the lake water. The garbage thrown or sewage discharged into the lake, abstraction of
water therefrom or construction of fishpens by enclosing its certain area, affect not only that specific portion but the entire 900 km of lake
water. The implementation of a cohesive and integrated lake water resource management policy, therefore, is necessary to conserve, protect
and sustainably develop Laguna de Bay." 5
The power of the local government units to issue fishing privileges was clearly granted for revenue purposes. This is evident from the fact
that Section 149 of the New Local Government Code empowering local governments to issue fishing permits is embodied in Chapter 2, Book
II, of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And Other Revenue Raising Power Of Local Government
Units."
On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture structures is for the purpose of
effectively regulating and monitoring activities in the Laguna de Bay region (Section 2, Executive Order No. 927) and for lake quality control
and management. 6 It does partake of the nature of police power which is the most pervasive, the least limitable and the most demanding of
all State powers including the power of taxation. Accordingly, the charter of the Authority which embodies a valid exercise of police power
should prevail over the Local Government Code of 1991 on matters affecting Laguna de Bay.
There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture structures in the Laguna de Bay area. Section 3 of
Executive Order No. 927 provides for the proper sharing of fees collected.
In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our holding that, considering the provisions of
Section 4 of Republic Act No. 4850 and Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake
Development Authority vs. Court of Appeals, 231 SCRA 304, 306, which we quote:

xxx xxx xxx


As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except
in cases where the special law provides for another forum. It must be recognized in this regard that the LLDA, as a
specialized administrative agency, is specifically mandated under Republic Act No. 4850 and its amendatory laws to carry
out and make effective the declared national policy of promoting and accelerating the development and balanced growth of
the Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay,
Quezon and Caloocan with due regard and adequate provisions for environmental management and control, preservation
of the quality of human life and ecological systems, and the prevention of undue ecological disturbances, deterioration and
pollution. Under such a broad grant of power and authority, the LLDA, by virtue of its special charter, obviously has the
responsibility to protect the inhabitants of the Laguna Lake region from the deleterious effects of pollutants emanating
from the discharge of wastes from the surrounding areas. In carrying out the aforementioned declared policy, the LLDA is
mandated, among others, to pass upon and approve or disapprove all plans, programs, and projects proposed by local
government offices/agencies within the region, public corporations, and private persons or enterprises where such plans,
programs and/or projects are related to those of the LLDA for the development of the region.
xxx xxx xxx
. . . . While it is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by
law, it is likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the
exercise of its express powers. In the exercise, therefore, of its express powers under its charter, as a regulatory and quasijudicial body with respect to pollution cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and
desist order" is, perforce, implied. Otherwise, it may well be reduced to a "toothless" paper agency.
there is no question that the Authority has express powers as a regulatory and quasi-judicial body in respect to pollution cases with
authority to issue a "cease and desist order" and on matters affecting the construction of illegal fishpens, fishcages and other aquaculture structures in Laguna de Bay. The Authority's pretense, however, that it is co-equal to the Regional Trial Courts such that
all actions against it may only be instituted before the Court of Appeals cannot be sustained. On actions necessitating the
resolution of legal questions affecting the powers of the Authority as provided for in its charter, the Regional Trial Courts have
jurisdiction.
In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991,
has not repealed the provisions of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, as amended. Thus, the
Authority has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of
municipalities situated therein and the authority to exercise such powers as are by its charter vested on it.
Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed purpose of protecting and developing the
Laguna Lake Region. Otherwise stated, the abrogation of this power would render useless its reason for being and will in effect denigrate, if
not abolish, the Laguna Lake Development Authority. This, the Local Government Code of 1991 had never intended to do.
WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar as they relate to the authority of the
Laguna Lake Development Authority to grant fishing privileges within the Laguna Lake Region.
The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch 78, Morong, Rizal; Judge Herculano Tech,
RTC, Branch 70, Binangonan, Rizal; and Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby declared null and void
and ordered set aside for having been issued with grave abuse of discretion.
The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to construct and operate fishpens, fishcages
and other aqua-culture structures within the Laguna Lake Region, their previous issuances being declared null and void. Thus, the fishing
permits issued by Mayors Isidro B. Pacis, Municipality of Binangonan; Ricardo D. Papa, Municipality of Taguig; and Walfredo M. de la Vega,
Municipality of Jala-jala, specifically, are likewise declared null and void and ordered cancelled.
The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of permits issued by Municipal Mayors within the
Laguna Lake Region, specifically, permits issued to Fleet Development, Inc. and Carlito Arroyo; Manila Marine Life Business Resources, Inc.,
represented by, Mr. Tobias Reynald M. Tiangco; Greenfield Ventures Industrial Development Corporation and R.J. Orion Development
Corporation; IRMA Fishing And Trading Corporation, ARTM Fishing Corporation, BDR Corporation, Mirt Corporation and Trim
Corporation; Blue Lagoon Fishing Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc., represented by its President
Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing Corporation, and MINAMAR Fishing Corporation, are hereby declared
illegal structures subject to demolition by the Laguna Lake Development Authority.
SO ORDERED.
14)

Davide, Jr., Bellosillo and Kapunan, JJ., concur.


G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by their parents
ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor, represented by her parents CALVIN and ROBERTA
SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed FLORES, minors and represented by their parents ENRICO
and NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and DOLORES FORTUN,
GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and represented by their parents GEORGE and MYRA MISA,
BENJAMIN ALAN V. PESIGAN, minor, represented by his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO,
minor, represented by her parents JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor,
represented by her parents FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor, represented by
his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE
GABRIELLE, all surnamed SAENZ, minors, represented by their parents ROBERTO and AURORA SAENZ, KRISTINE, MARY
ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors, represented by their parents MARIO and
HAYDEE KING, DAVID, FRANCISCO and THERESE VICTORIA, all surnamed ENDRIGA, minors, represented by their
parents BALTAZAR and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors, represented by
their parents ANTONIO and MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all surnamed CARDAMA, minors,
represented by their parents MARIO and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed
OPOSA, minors and represented by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN and
ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO,
CRISANTO, ANNA, DANIEL and FRANCISCO, all surnamed BIBAL, minors, represented by their parents FRANCISCO, JR.
and MILAGROS BIBAL, and THE PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of Environment and
Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC, Makati, Branch 66,
respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.

DAVIDE, JR., J.:


In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners dramatically
associate with the twin concepts of "inter-generational responsibility" and "inter-generational justice." Specifically, it touches on the issue of
whether the said petitioners have a cause of action to "prevent the misappropriation or impairment" of Philippine rainforests and "arrest the
unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the Regional Trial Court
(RTC), National Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners, are all minors duly represented and
joined by their respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, nonstock and non-profit corporation organized for the purpose of, inter alia, engaging in concerted action geared for the protection of our
environment and natural resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department
of Environment and Natural Resources (DENR). His substitution in this petition by the new Secretary, the Honorable Angel C. Alcala, was
subsequently ordered upon proper motion by the petitioners. 1 The complaint 2 was instituted as a taxpayers' class suit 3 and alleges that the
plaintiffs "are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural
resource treasure that is the country's virgin tropical forests." The same was filed for themselves and others who are equally concerned about
the preservation of said resource but are "so numerous that it is impracticable to bring them all before the Court." The minors further
asseverate that they "represent their generation as well as generations yet unborn." 4 Consequently, it is prayed for that judgment be
rendered:
. . . ordering defendant, his agents, representatives and other persons acting in his behalf to
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5
The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of thirty million
(30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species of flora and fauna may
be found; these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the habitat of indigenous
Philippine cultures which have existed, endured and flourished since time immemorial; scientific evidence reveals that in order to maintain a
balanced and healthful ecology, the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover
and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses; the distortion and disturbance of this balance
as a consequence of deforestation have resulted in a host of environmental tragedies, such as (a) water shortages resulting from drying up of
the water table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of the water table as a result of the
intrusion therein of salt water, incontrovertible examples of which may be found in the island of Cebu and the Municipality of Bacoor, Cavite,
(c) massive erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded estimated at one
billion (1,000,000,000) cubic meters per annum approximately the size of the entire island of Catanduanes, (d) the endangering and
extinction of the country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and consequential destruction of corals and other
aquatic life leading to a critical reduction in marine resource productivity, (g) recurrent spells of drought as is presently experienced by the
entire country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i) the floodings of lowlands and
agricultural plains arising from the absence of the absorbent mechanism of forests, (j) the siltation and shortening of the lifespan of multibillion peso dams constructed and operated for the purpose of supplying water for domestic uses, irrigation and the generation of electric
power, and (k) the reduction of the earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic
changes such as the phenomenon of global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so capable of unquestionable
demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding, they expressed their intention to present
expert witnesses as well as documentary, photographic and film evidence in the course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.
8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests constituting roughly
53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said rainforests or four
per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely 2.8% of the
entire land mass of the Philippine archipelago and about 3.0 million hectares of immature and uneconomical secondary
growth forests.
11. Public records reveal that the defendant's, predecessors have granted timber license agreements ('TLA's') to various
corporations to cut the aggregate area of 3.89 million hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour nighttime,
Saturdays, Sundays and holidays included the Philippines will be bereft of forest resources after the end of this
ensuing decade, if not earlier.
13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued trend of
deforestation to the plaintiff minor's generation and to generations yet unborn are evident and incontrovertible. As a
matter of fact, the environmental damages enumerated in paragraph 6 hereof are already being felt, experienced and
suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands will work great
damage and irreparable injury to plaintiffs especially plaintiff minors and their successors who may never see, use,
benefit from and enjoy this rare and unique natural resource treasure.
This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he holds in trust
for the benefit of plaintiff minors and succeeding generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to protection by the
State in its capacity as the parens patriae.
16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990, plaintiffs served
upon defendant a final demand to cancel all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage and extreme
prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of plaintiffs,
especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren and devoid of the
wonderful flora, fauna and indigenous cultures which the Philippines had been abundantly blessed with.
19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy enunciated in the
Philippine Environmental Policy which, in pertinent part, states that it is the policy of the State
(a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and
enjoyable harmony with each other;
(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and;
(c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-being. (P.D. 1151, 6
June 1977)
20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the Constitutional
policy of the State to
a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient use of natural
resources (sic)." (Section 1, Article XII of the Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV, id.);
d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind the natural law and violative of plaintiffs'
right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the unabated
hemorrhage of the country's vital life support systems and continued rape of Mother Earth. 6
On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2) grounds, namely:
(1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a political question which properly pertains to
the legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain that (1) the
complaint shows a clear and unmistakable cause of action, (2) the motion is dilatory and (3) the action presents a justiciable question as it
involves the defendant's abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In the said order, not only was the
defendant's claim that the complaint states no cause of action against him and that it raises a political question sustained, the
respondent Judge further ruled that the granting of the relief prayed for would result in the impairment of contracts which is prohibited by
the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this Court to rescind and
set aside the dismissal order on the ground that the respondent Judge gravely abused his discretion in dismissing the action. Again, the
parents of the plaintiffs-minors not only represent their children, but have also joined the latter in this case. 8

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

assumptions and vague conclusions based on unverified data. In fine, plaintiffs fail to state a cause of action in its
Complaint against the herein defendant.
Furthermore, the Court firmly believes that the matter before it, being impressed with political color and involving a
matter of public policy, may not be taken cognizance of by this Court without doing violence to the sacred principle of
"Separation of Powers" of the three (3) co-equal branches of the Government.
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed
for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from
receiving, accepting, processing, renewing or approving new timber license agreements. For to do otherwise would amount
to "impairment of contracts" abhored (sic) by the fundamental law. 11
We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a specific legal right involved
or a specific legal wrong committed, and that the complaint is replete with vague assumptions and conclusions based on unverified data. A
reading of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right the right to a balanced and healthful ecology which, for the first time in our
nation's constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly
provides:
Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the
rhythm and harmony of nature.
This right unites with the right to health which is provided for in the preceding section of the same article:
Sec. 15. The State shall protect and promote the right to health of the people and instill health consciousness among
them.
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not under the
Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the latter. Such a right
belongs to a different category of rights altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and
fittingly stressed by the petitioners the advancement of which may even be said to predate all governments and constitutions. As a matter
of fact, these basic rights need not even be written in the Constitution for they are assumed to exist from the inception of humankind. If they
are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a
balanced and healthful ecology and to health are mandated as state policies by the Constitution itself, thereby highlighting their continuing
importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the second, the day would not be
too far when all else would be lost not only for the present generation, but also for those to come generations which stand to inherit
nothing but parched earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment. During the
debates on this right in one of the plenary sessions of the 1986 Constitutional Commission, the following exchange transpired between
Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:
MR. VILLACORTA:
Does this section mandate the State to provide sanctions against all forms of pollution air, water
and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the
correlative duty of not impairing the same and, therefore, sanctions may be provided for impairment of
environmental balance. 12
The said right implies, among many other things, the judicious management and conservation of the country's forests.
Without such forests, the ecological or environmental balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related provisions of
the Constitution concerning the conservation, development and utilization of the country's natural resources,
Aquino promulgated on 10 June 1987 E.O. No. 192,

14

13

then President Corazon C.

Section 4 of which expressly mandates that the Department of Environment and

Natural Resources "shall be the primary government agency responsible for the conservation, management, development and proper use of

the country's environment and natural resources, specifically forest and grazing lands, mineral, resources, including those in reservation and
watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by
law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos."
Section 3 thereof makes the following statement of policy:
Sec. 3. Declaration of Policy. It is hereby declared the policy of the State to ensure the sustainable use, development,
management, renewal, and conservation of the country's forest, mineral, land, off-shore areas and other natural
resources, including the protection and enhancement of the quality of the environment, and equitable access of the
different segments of the population to the development and the use of the country's natural resources, not only for the
present generation but for future generations as well. It is also the policy of the state to recognize and apply a true value
system including social and environmental cost implications relative to their utilization, development and conservation of
our natural resources.
This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987, 15 specifically in Section 1 thereof
which reads:
Sec. 1. Declaration of Policy. (1) The State shall ensure, for the benefit of the Filipino people, the full exploration and
development as well as the judicious disposition, utilization, management, renewal and conservation of the country's
forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources, consistent with the necessity
of maintaining a sound ecological balance and protecting and enhancing the quality of the environment and the objective
of making the exploration, development and utilization of such natural resources equitably accessible to the different
segments of the present as well as future generations.
(2) The State shall likewise recognize and apply a true value system that takes into account social and environmental cost
implications relative to the utilization, development and conservation of our natural resources.
The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the quality of the
environment." Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the DENR; however, it makes particular
reference to the fact of the agency's being subject to law and higher authority. Said section provides:
Sec. 2. Mandate. (1) The Department of Environment and Natural Resources shall be primarily responsible for the
implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional mandate to control
and supervise the exploration, development, utilization, and conservation of the country's natural resources.
Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy formulation, and have
defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special attention to the
"environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No.
1152 (Philippine Environment Code) were issued. The former "declared a continuing policy of the State (a) to create, develop, maintain and
improve conditions under which man and nature can thrive in productive and enjoyable harmony with each other, (b) to fulfill the social,
economic and other requirements of present and future generations of Filipinos, and (c) to insure the attainment of an environmental quality
that is conducive to a life of dignity and well-being." 16 As its goal, it speaks of the "responsibilities of each generation as trustee and guardian
of the environment for succeeding generations."

17

The latter statute, on the other hand, gave flesh to the said policy.

Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the DENR's duty under
its mandate and by virtue of its powers and functions under E.O. No. 192 and the Administrative Code of 1987 to protect and advance the
said right.
A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives rise to a cause of
action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of discretion, violated their right to a
balanced and healthful ecology; hence, the full protection thereof requires that no further TLAs should be renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal right or rights of the other; and its essential elements are legal
right of the plaintiff, correlative obligation of the defendant, and act or omission of the defendant in violation of said legal
right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of action,

19

the

question submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint itself. No other matter should be
considered; furthermore, the truth of falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically admitted.
The only issue to be resolved in such a case is: admitting such alleged facts to be true, may the court render a valid judgment in accordance
with the prayer in the complaint?

20

In Militante vs. Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the

utmost care and circumspection in passing upon a motion to dismiss on the ground of the absence thereof [cause of action] lest, by its failure
to manifest a correct appreciation of the facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively
nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as well as the
specific averments under the sub-heading CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their
rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing, however, that insofar as the
cancellation of the TLAs is concerned, there is the need to implead, as party defendants, the grantees thereof for they are indispensable
parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by the executive or
legislative branches of Government is not squarely put in issue. What is principally involved is the enforcement of a right vis-a-vis policies
already formulated and expressed in legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer, the
insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative actions from
judicial inquiry or review. The second paragraph of section 1, Article VIII of the Constitution states that:
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member of this Court,
says:
The first part of the authority represents the traditional concept of judicial power, involving the settlement of conflicting
rights as conferred as law. The second part of the authority represents a broadening of judicial power to enable the courts
of justice to review what was before forbidden territory, to wit, the discretion of the political departments of the
government.
As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon even the
wisdom of the decisions of the executive and the legislature and to declare their acts invalid for lack or excess of
jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the meaning of "grave abuse of
discretion," which is a very elastic phrase that can expand or contract according to the disposition of the judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that, even if
we were to assume that the issue presented before us was political in nature, we would still not be precluded from
revolving it under the expanded jurisdiction conferred upon us that now covers, in proper cases, even the political
question. Article VII, Section 1, of the Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in the Constitution.
The court a quo declared that:
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed
for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from
receiving, accepting, processing, renewing or approving new timber license agreements. For to do otherwise would amount
to "impairment of contracts" abhored (sic) by the fundamental law. 24
We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first place, the
respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If he had done so, he
would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits and advantages to the timber
license holders because he would have forever bound the Government to strictly respect the said licenses according to their terms and
conditions regardless of changes in policy and the demands of public interest and welfare. He was aware that as correctly pointed out by the
petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D. No. 705) which provides:
. . . Provided, That when the national interest so requires, the President may amend, modify, replace or rescind any
contract, concession, permit, licenses or any other form of privilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right
protested by the due process clause of the Constitution. In Tan vs. Director of Forestry, 25 this Court held:
. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to
the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it
is only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in
this case.
A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the
authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property or a
property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of
license does not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements are the principal instruments by which the State regulates the
utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid
that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent
or irrevocable right to the particular concession area and the forest products therein. They may be validly amended,
modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed
contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as
amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall be passed.

27

cannot be invoked.
In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an executive
issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked.
Nevertheless, granting further that a law has actually been passed mandating cancellations or modifications, the same cannot still be
stigmatized as a violation of the non-impairment clause. This is because by its very nature and purpose, such as law could have only been
passed in the exercise of the police power of the state for the purpose of advancing the right of the people to a balanced and healthful ecology,
promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of contract, under our system of government, is not meant to be absolute. The same is understood to be
subject to reasonable legislative regulation aimed at the promotion of public health, moral, safety and welfare. In other
words, the constitutional guaranty of non-impairment of obligations of contract is limited by the exercise of the police
power of the State, in the interest of public health, safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life Insurance Co. vs. Auditor General, 30
to wit:
Under our form of government the use of property and the making of contracts are normally matters of private and not of
public concern. The general rule is that both shall be free of governmental interference. But neither property rights nor
contract rights are absolute; for government cannot exist if the citizen may at will use his property to the detriment of his
fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the private right is that of the
public to regulate it in the common interest.
In short, the non-impairment clause must yield to the police power of the state.

31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to enjoin the
respondent Secretary from receiving, accepting, processing, renewing or approving new timber licenses for, save in cases of renewal, no
contract would have as of yet existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to it as a matter of
right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent Judge of 18
July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may therefore amend their complaint to implead as
defendants the holders or grantees of the questioned timber license agreements.

No pronouncement as to costs.
SO ORDERED.
Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur.
Narvasa, C.J., Puno and Vitug, JJ., took no part.

15)
EN BANC
ANTONIO M. SERRANO,

G.R. No. 167614

Petitioner,

Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,

- versus -

CARPIO MORALES,
TINGA,
CHICO-NAZARIO,
VELASCO, Jr.,
NACHURA,
LEONARDO-DE CASTRO,
BRION, and
GALLANT MARITIME SERVICES,

PERALTA, JJ.

INC. and MARLOW NAVIGATION


CO., INC.,

Promulgated:
Respondents.

March 24, 2009


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

DECISION

AUSTRIA-MARTINEZ, J.:

For decades, the toil of solitary migrants has helped lift entire families and communities out of poverty. Their earnings have built
houses, provided health care, equipped schools and planted the seeds of businesses. They have woven together the world by transmitting
ideas and knowledge from country to country. They have provided the dynamic human link between cultures, societies and economies. Yet,
only recently have we begun to understand not only how much international migration impacts development, but how smart
public policies can magnify this effect.

United Nations Secretary-General Ban Ki-Moon


Global Forum on Migration and Development
Brussels, July 10, 2007[1]
For Antonio Serrano (petitioner), a Filipino seafarer, the last clause in the 5th paragraph of Section 10, Republic Act (R.A.) No. 8042,[2] to wit:
Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorized cause as defined
by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per

annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less.
x x x x (Emphasis and underscoring supplied)
does not magnify the contributions of overseas Filipino workers (OFWs) to national development, but exacerbates the hardships borne by them by unduly limiting
their entitlement in case of illegal dismissal to their lump-sum salary either for the unexpired portion of their employment contract or for three months for every
year of the unexpired term, whichever is less (subject clause). Petitioner claims that the last clause violates the OFWs' constitutional rights in that it impairs the
terms of their contract, deprives them of equal protection and denies them due process.
By way of Petition for Review under Rule 45 of the Rules of Court, petitioner assails the December 8, 2004 Decision [3] and April 1, 2005 Resolution[4] of
the Court of Appeals (CA), which applied the subject clause, entreating this Court to declare the subject clause unconstitutional.
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. (respondents) under a Philippine Overseas Employment
Administration (POEA)-approved Contract of Employment with the following terms and conditions:
Duration of contract
12 months
Position
Chief Officer
Basic monthly salary
US$1,400.00
Hours of work
48.0 hours per week
Overtime
US$700.00 per month
Vacation leave with pay
7.00 days per month[5]
On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded employment contract for the position of Second Officer
with a monthly salary of US$1,000.00, upon the assurance and representation of respondents that he would be made Chief Officer by the end of April 1998. [6]
Respondents did not deliver on their promise to make petitioner Chief Officer. [7] Hence, petitioner refused to stay on as Second Officer and was
repatriated to the Philippines on May 26, 1998.[8]
Petitioner's employment contract was for a period of 12 months or from March 19, 1998 up to March 19, 1999, but at the time of his repatriation on May
26, 1998, he had served only two (2) months and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint [9] against respondents for constructive dismissal and for payment of his money claims in the
total amount of US$26,442.73, broken down as follows:
May 27/31, 1998 (5 days) incl. Leave
pay
June 01/30, 1998
July
01/31,
1998
August
01/31,
1998
Sept.
01/30,
1998
Oct. 01/31,
1998

US$

413.90
2,590.00
2,590.00
2,590.00
2,590.00
2,590.00

Nov.
1998

01/30,

2,590.00

Dec.
1998

01/31,

2,590.00

Jan. 01/31,
1999
Feb.
1999

2,590.00

01/28,

2,590.00

Mar. 1/19, 1999 (19 days) incl. leave


pay

1,640.00
------------------------------------------------------------------------------25,382.23

Amount adjusted to chief mate's salary


(March 19/31, 1998 to April 1/30,
1998)
+

TOT

AL CLAIM

1,060.50[10]

-----------------------------------------------------------------------------------US$ 26,442.73[11]

----------

as well as moral and exemplary damages and attorney's fees.


The LA rendered a Decision dated July 15, 1999, declaring the dismissal of petitioner illegal and awarding him monetary benefits, to wit:
WHEREFORE, premises considered, judgment is hereby rendered declaring that the dismissal of the complainant (petitioner) by
the respondents in the above-entitled case was illegal and the respondents are hereby ordered to pay the complainant [petitioner], jointly and
severally, in Philippine Currency, based on the rate of exchange prevailing at the time of payment, the amount of EIGHT THOUSAND
SEVEN HUNDRED SEVENTY U.S. DOLLARS (US $8,770.00), representing the complainants salary for three (3) months of
the unexpired portion of the aforesaid contract of employment.
The respondents are likewise ordered to pay the complainant [petitioner], jointly and severally, in Philippine Currency, based on
the rate of exchange prevailing at the time of payment, the amount of FORTY FIVE U.S. DOLLARS (US$ 45.00), [12] representing the
complainants claim for a salary differential. In addition, the respondents are hereby ordered to pay the complainant, jointly and severally, in
Philippine Currency, at the exchange rate prevailing at the time of payment, the complainants (petitioner's) claim for attorneys fees
equivalent to ten percent (10%) of the total amount awarded to the aforesaid employee under this Decision.
The claims of the complainant for moral and exemplary damages are hereby DISMISSED for lack of merit.
All other claims are hereby DISMISSED.
SO ORDERED.[13]

(Emphasis supplied)

In awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the salary period of three months only -- rather than the
entire unexpired portion of nine months and 23 days of petitioner's employment contract - applying the subject clause. However, the LA applied the salary rate of
US$2,590.00, consisting of petitioner's [b]asic salary, US$1,400.00/month + US$700.00/month, fixed overtime pay, + US$490.00/month, vacation leave pay =
US$2,590.00/compensation per month.[14]
Respondents appealed[15] to the National Labor Relations Commission (NLRC) to question the finding of the LA that petitioner was illegally dismissed.
Petitioner also appealed[16] to the NLRC on the sole issue that the LA erred in not applying the ruling of the Court in Triple Integrated Services, Inc. v.
National Labor Relations Commission[17] that in case of illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of their contracts.[18]
In a Decision dated June 15, 2000, the NLRC modified the LA Decision, to wit:
WHEREFORE, the Decision dated 15 July 1999 is MODIFIED. Respondents are hereby ordered to pay complainant, jointly
and severally, in Philippine currency, at the prevailing rate of exchange at the time of payment the following:
1.
2.
3.

Three (3) months salary


$1,400 x 3
Salary differential
US$4,245.00
10% Attorneys fees
TOTAL

The other findings are affirmed.

US$4,200.00
45.00
424.50
US$4,669.50

SO ORDERED.[19]
The NLRC corrected the LA's computation of the lump-sum salary awarded to petitioner by reducing the applicable salary rate from US$2,590.00 to
US$1,400.00 because R.A. No. 8042 does not provide for the award of overtime pay, which should be proven to have been actually performed, and for vacation leave
pay.[20]
Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the subject clause.[21] The NLRC denied the
motion.[22]
Petitioner filed a Petition for Certiorari[23] with the CA, reiterating the constitutional challenge against the subject clause.[24] After initially dismissing
the petition on a technicality, the CA eventually gave due course to it, as directed by this Court in its Resolution dated August 7, 2003 which granted the petition
for certiorari, docketed as G.R. No. 151833, filed by petitioner.
In a Decision dated December 8, 2004, the CA affirmed the NLRC ruling on the reduction of the applicable salary rate; however, the CA skirted the
constitutional issue raised by petitioner.[25]
His Motion for Reconsideration[26] having been denied by the CA,[27] petitioner brings his cause to this Court on the following grounds:
I
The Court of Appeals and the labor tribunals have decided the case in a way not in accord with applicable decision of the
Supreme Court involving similar issue of granting unto the migrant worker back wages equal to the unexpired portion of his contract of
employment instead of limiting it to three (3) months
II
In the alternative that the Court of Appeals and the Labor Tribunals were merely applying their interpretation of Section 10 of
Republic Act No. 8042, it is submitted that the Court of Appeals gravely erred in law when it failed to discharge its judicial duty to decide
questions of substance not theretofore determined by the Honorable Supreme Court, particularly, the constitutional issues raised by the
petitioner on the constitutionality of said law, which unreasonably, unfairly and arbitrarily limits payment of the award for back wages of
overseas workers to three (3) months.
III
Even without considering the constitutional limitations [of] Sec. 10 of Republic Act No. 8042, the Court of Appeals gravely erred
in law in excluding from petitioners award the overtime pay and vacation pay provided in his contract since under the contract they form
part of his salary.[28]
On February 26, 2008, petitioner wrote the Court to withdraw his petition as he is already old and sickly, and he intends to make use of the monetary
award for his medical treatment and medication.[29] Required to comment, counsel for petitioner filed a motion, urging the court to allow partial execution of the
undisputed monetary award and, at the same time, praying that the constitutional question be resolved.[30]
Considering that the parties have filed their respective memoranda, the Court now takes up the full merit of the petition mindful of the extreme
importance of the constitutional question raised therein.
On the first and second issues
The unanimous finding of the LA, NLRC and CA that the dismissal of petitioner was illegal is not disputed. Likewise not disputed is the salary
differential of US$45.00 awarded to petitioner in all three fora. What remains disputed is only the computation of the lump-sum salary to be awarded to petitioner
by reason of his illegal dismissal.
Applying the subject clause, the NLRC and the CA computed the lump-sum salary of petitioner at the monthly rate of US$1,400.00 covering the period
of three months out of the unexpired portion of nine months and 23 days of his employment contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that, in addition to the US$4,200.00 awarded by the NLRC and the CA, he is
entitled to US$21,182.23 more or a total of US$25,382.23, equivalent to his salaries for the entire nine months and 23 days left of his employment contract,
computed at the monthly rate of US$2,590.00.[31]

The Arguments of Petitioner


Petitioner contends that the subject clause is unconstitutional because it unduly impairs the freedom of OFWs to negotiate for and stipulate in their
overseas employment contracts a determinate employment period and a fixed salary package. [32] It also impinges on the equal protection clause, for it treats OFWs
differently from local Filipino workers (local workers) by putting a cap on the amount of lump-sum salary to which OFWs are entitled in case of illegal
dismissal, while setting no limit to the same monetary award for local workers when their dismissal is declared illegal; that the disparate treatment is not
reasonable as there is no substantial distinction between the two groups; [33] and that it defeats Section 18, [34] Article II of the Constitution which guarantees the
protection of the rights and welfare of all Filipino workers, whether deployed locally or overseas. [35]
Moreover, petitioner argues that the decisions of the CA and the labor tribunals are not in line with existing jurisprudence on the issue of money claims
of illegally dismissed OFWs. Though there are conflicting rulings on this, petitioner urges the Court to sort them out for the guidance of affected OFWs. [36]
Petitioner further underscores that the insertion of the subject clause into R.A. No. 8042 serves no other purpose but to benefit local placement
agencies. He marks the statement made by the Solicitor General in his Memorandum, viz.:
Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that jurisdiction over
the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation. Hence, placement agencies that are in
good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect them and to
promote their continued helpful contribution in deploying Filipino migrant workers, liability for money claims was reduced
under Section 10 of R.A. No. 8042. [37] (Emphasis supplied)
Petitioner argues that in mitigating the solidary liability of placement agencies, the subject clause sacrifices the well-being of OFWs. Not only that, the
provision makes foreign employers better off than local employers because in cases involving the illegal dismissal of employees, foreign employers are liable for
salaries covering a maximum of only three months of the unexpired employment contract while local employers are liable for the full lump-sum salaries of their
employees. As petitioner puts it:
In terms of practical application, the local employers are not limited to the amount of backwages they have to give their employees
they have illegally dismissed, following well-entrenched and unequivocal jurisprudence on the matter. On the other hand, foreign employers
will only be limited to giving the illegally dismissed migrant workers the maximum of three (3) months unpaid salaries notwithstanding the
unexpired term of the contract that can be more than three (3) months.[38]
Lastly, petitioner claims that the subject clause violates the due process clause, for it deprives him of the salaries and other emoluments he is entitled to
under his fixed-period employment contract.[39]
The Arguments of Respondents
In their Comment and Memorandum, respondents contend that the constitutional issue should not be entertained, for this was belatedly interposed by
petitioner in his appeal before the CA, and not at the earliest opportunity, which was when he filed an appeal before the NLRC. [40]
The Arguments of the Solicitor General
The Solicitor General (OSG)[41] points out that as R.A. No. 8042 took effect on July 15, 1995, its provisions could not have impaired petitioner's 1998
employment contract. Rather, R.A. No. 8042 having preceded petitioner's contract, the provisions thereof are deemed part of the minimum terms of petitioner's
employment, especially on the matter of money claims, as this was not stipulated upon by the parties. [42]
Moreover, the OSG emphasizes that OFWs and local workers differ in terms of the nature of their employment, such that their rights to monetary
benefits must necessarily be treated differently. The OSG enumerates the essential elements that distinguish OFWs from local workers: first, while local workers
perform their jobs within Philippine territory, OFWs perform their jobs for foreign employers, over whom it is difficult for our courts to acquire jurisdiction, or
against whom it is almost impossible to enforce judgment; and second, as held in Coyoca v. National Labor Relations Commission[43] and Millares v. National
Labor Relations Commission,[44] OFWs are contractual employees who can never acquire regular employment status, unlike local workers who are or can become
regular employees. Hence, the OSG posits that there are rights and privileges exclusive to local workers, but not available to OFWs; that these peculiarities make
for a reasonable and valid basis for the differentiated treatment under the subject clause of the money claims of OFWs who are illegally dismissed. Thus, the
provision does not violate the equal protection clause nor Section 18, Article II of the Constitution. [45]

Lastly, the OSG defends the rationale behind the subject clause as a police power measure adopted to mitigate the solidary liability of placement
agencies for this redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The survival of legitimate placement agencies
helps [assure] the government that migrant workers are properly deployed and are employed under decent and humane conditions. [46]
The Court's Ruling
The Court sustains petitioner on the first and second issues.
When the Court is called upon to exercise its power of judicial review of the acts of its co-equals, such as the Congress, it does so only when these
conditions obtain: (1) that there is an actual case or controversy involving a conflict of rights susceptible of judicial determination; [47] (2) that the constitutional
question is raised by a proper party[48] and at the earliest opportunity;[49] and (3) that the constitutional question is the very lis mota of the case,[50] otherwise the
Court will dismiss the case or decide the same on some other ground.[51]
Without a doubt, there exists in this case an actual controversy directly involving petitioner who is personally aggrieved that the labor tribunals and the
CA computed his monetary award based on the salary period of three months only as provided under the subject clause.
The constitutional challenge is also timely. It should be borne in mind that the requirement that a constitutional issue be raised at the earliest
opportunity entails the interposition of the issue in the pleadings before a competent court, such that, if the issue is not raised in the pleadings before that
competent court, it cannot be considered at the trial and, if not considered in the trial, it cannot be considered on appeal. [52] Records disclose that the issue on the
constitutionality of the subject clause was first raised, not in petitioner's appeal with the NLRC, but in his Motion for Partial Reconsideration with said labor
tribunal,[53] and reiterated in his Petition for Certiorari before the CA.[54] Nonetheless, the issue is deemed seasonably raised because it is not the NLRC but the CA
which has the competence to resolve the constitutional issue. The NLRC is a labor tribunal that merely performs a quasi-judicial function its function in the
present case is limited to determining questions of fact to which the legislative policy of R.A. No. 8042 is to be applied and to resolving such questions in accordance
with the standards laid down by the law itself;[55]thus, its foremost function is to administer and enforce R.A. No. 8042, and not to inquire into the validity of its
provisions. The CA, on the other hand, is vested with the power of judicial review or the power to declare unconstitutional a law or a provision thereof, such as the
subject clause.[56] Petitioner's interposition of the constitutional issue before the CA was undoubtedly seasonable. The CA was therefore remiss in failing to take
up the issue in its decision.
The third condition that the constitutional issue be critical to the resolution of the case likewise obtains because the monetary claim of petitioner to his
lump-sum salary for the entire unexpired portion of his 12-month employment contract, and not just for a period of three months, strikes at the very core of the
subject clause.
Thus, the stage is all set for the determination of the constitutionality of the subject clause.
Does the subject clause violate Section 10,
Article III of the Constitution on non-impairment
of contracts?

The answer is in the negative.


Petitioner's claim that the subject clause unduly interferes with the stipulations in his contract on the term of his employment and the fixed salary
package he will receive[57] is not tenable.
Section 10, Article III of the Constitution provides:
No law impairing the obligation of contracts shall be passed.
The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation, [58] and cannot affect acts or contracts
already perfected;[59] however, as to laws already in existence, their provisions are read into contracts and deemed a part thereof. [60] Thus, the non-impairment
clause under Section 10, Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging,
abridging or in any manner changing the intention of the parties thereto.

As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment contract between petitioner and
respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties. Rather,
when the parties executed their 1998 employment contract, they were deemed to have incorporated into it all the provisions of R.A. No. 8042.
But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional on the ground that it impinges on the
impairment clause, for the law was enacted in the exercise of the police power of the State to regulate a business, profession or calling, particularly the recruitment
and deployment of OFWs, with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed. [61] Police power
legislations adopted by the State to promote the health, morals, peace, education, good order, safety, and general welfare of the people are generally applicable not
only to future contracts but even to those already in existence, for all private contracts must yield to the superior and legitimate measures taken by the State to
promote public welfare.[62]
Does the subject clause violate Section 1,
Article III of the Constitution, and Section 18,
Article II and Section 3, Article XIII on labor
as a protected sector?

The answer is in the affirmative.


Section 1, Article III of the Constitution guarantees:
No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied the equal
protection of the law.

Section 18,[63] Article II and Section 3,[64] Article XIII accord all members of the labor sector, without distinction as to place of deployment, full protection
of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic security and parity: all monetary benefits
should be equally enjoyed by workers of similar category, while all monetary obligations should be borne by them in equal degree; none should be denied the
protection of the laws which is enjoyed by, or spared the burden imposed on, others in like circumstances. [65]
Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a system of classification into its legislation;
however, to be valid, the classification must comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the purposes of the law; 3)
it is not limited to existing conditions only; and 4) it applies equally to all members of the class. [66]
There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a law: a) the deferential or rational
basis scrutiny in which the challenged classification needs only be shown to be rationally related to serving a legitimate state interest; [67] b) the middle-tier or
intermediate scrutiny in which the government must show that the challenged classification serves an important state interest and that the classification is
at least substantially related to serving that interest; [68] and c) strict judicial scrutiny[69] in which a legislative classification which impermissibly interferes
with the exercise of a fundamental right[70] or operates to the peculiar disadvantage of a suspect class[71] is presumed unconstitutional, and the burden is upon
the government to prove that the classification is necessary to achieve a compelling state interest and that it is the least restrictive means to protect such
interest.[72]
Under American jurisprudence, strict judicial scrutiny is triggered by suspect classifications[73] based on race[74] or gender[75] but not when the
classification is drawn along income categories.[76]
It is different in the Philippine setting. In Central Bank (now Bangko Sentral ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng Pilipinas,
[77]

the constitutionality of a provision in the charter of the Bangko Sentral ng Pilipinas (BSP), a government financial institution (GFI), was challenged for

maintaining its rank-and-file employees under the Salary Standardization Law (SSL), even when the rank-and-file employees of other GFIs had been exempted
from the SSL by their respective charters. Finding that the disputed provision contained a suspect classification based on salary grade, the Court deliberately

employed the standard of strict judicial scrutiny in its review of the constitutionality of said provision. More significantly, it was in this case that the Court revealed
the broad outlines of its judicial philosophy, to wit:
Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded recognition and
respect by the courts of justice except when they run afoul of the Constitution. The deference stops where the classification violates a
fundamental right, or prejudices persons accorded special protection by the Constitution. When these violations arise, this Court
must discharge its primary role as the vanguard of constitutional guaranties, and require a stricter and more exacting adherence to
constitutional limitations. Rational basis should not suffice.
Admittedly, the view that prejudice to persons accorded special protection by the Constitution requires a stricter
judicial scrutiny finds no support in American or English jurisprudence. Nevertheless, these foreign decisions and
authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have been used to support many of our
decisions. We should not place undue and fawning reliance upon them and regard them as indispensable mental crutches without which we
cannot come to our own decisions through the employment of our own endowments. We live in a different ambience and must decide our
own problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own
concept of law and justice. Our laws must be construed in accordance with the intention of our own lawmakers and such intent may be
deduced from the language of each law and the context of other local legislation related thereto. More importantly, they must be construed to
serve our own public interest which is the be-all and the end-all of all our laws. And it need not be stressed that our public interest is distinct
and different from others.
xxxx
Further, the quest for a better and more equal world calls for the use of equal protection as a tool of effective judicial
intervention.
Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims equality as an
ideal precisely in protest against crushing inequities in Philippine society. The command to promote social justice in Article II, Section 10, in
all phases of national development, further explicitated in Article XIII, are clear commands to the State to take affirmative action in the
direction of greater equality. x x x [T]here is thus in the Philippine Constitution no lack of doctrinal support for a more vigorous state effort
towards achieving a reasonable measure of equality.
Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized
groups of society, including labor. Under the policy of social justice, the law bends over backward to accommodate the
interests of the working class on the humane justification that those with less privilege in life should have more in law. And
the obligation to afford protection to labor is incumbent not only on the legislative and executive branches but also on the
judiciary to translate this pledge into a living reality. Social justice calls for the humanization of laws and the equalization
of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be
approximated.
xxxx
Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality, recognizing the
broad discretion given to Congress in exercising its legislative power. Judicial scrutiny would be based on the rational basis test, and the
legislative discretion would be given deferential treatment.
But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of prejudice against
persons favored by the Constitution with special protection, judicial scrutiny ought to be more strict. A weak and watered down
view would call for the abdication of this Courts solemn duty to strike down any law repugnant to the Constitution and the rights it
enshrines. This is true whether the actor committing the unconstitutional act is a private person or the government itself or one of its
instrumentalities. Oppressive acts will be struck down regardless of the character or nature of the actor.
xxxx
In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-employee status. It is akin to a
distinction based on economic class and status, with the higher grades as recipients of a benefit specifically withheld from
the lower grades. Officers of the BSP now receive higher compensation packages that are competitive with the industry, while the poorer,
low-salaried employees are limited to the rates prescribed by the SSL. The implications are quite disturbing: BSP rank-and-file employees
are paid the strictly regimented rates of the SSL while employees higher in rank - possessing higher and better education and opportunities
for career advancement - are given higher compensation packages to entice them to stay. Considering that majority, if not all, the
rank-and-file employees consist of people whose status and rank in life are less and limited, especially in terms of job
marketability, it is they - and not the officers - who have the real economic and financial need for the adjustment . This is in
accord with the policy of the Constitution "to free the people from poverty, provide adequate social services, extend to them a decent standard

of living, and improve the quality of life for all. Any act of Congress that runs counter to this constitutional desideratum deserves
strict scrutiny by this Court before it can pass muster.

(Emphasis supplied)

Imbued with the same sense of obligation to afford protection to labor, the Court in the present case also employs the standard of strict judicial
scrutiny, for it perceives in the subject clause a suspect classification prejudicial to OFWs.
Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer examination reveals that the subject
clause has a discriminatory intent against, and an invidious impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis--vis OFWs with employment contracts of one year or more;
Second, among OFWs with employment contracts of more than one year; and
Third, OFWs vis--vis local workers with fixed-period employment;
OFWs with employment contracts of less than one year vis--vis OFWs with
employment contracts of one year or more
As pointed out by petitioner,[78] it was in Marsaman Manning Agency, Inc. v. National Labor Relations Commission [79] (Second Division, 1999) that the
Court laid down the following rules on the application of the periods prescribed under Section 10(5) of R.A. No. 804, to wit:
A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas
contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (3) months salary for
every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term
of at least one (1) year or more. This is evident from the words for every year of the unexpired term which follows the words
salaries x x x for three months. To follow petitioners thinking that private respondent is entitled to three (3) months salary only simply
because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is
contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word
thereof be given effect since the law-making body is presumed to know the meaning of the words employed in the statue and to have used
them advisedly. Ut res magis valeat quam pereat.[80] (Emphasis supplied)
In Marsaman, the OFW involved was illegally dismissed two months into his 10-month contract, but was awarded his salaries for the remaining 8 months and 6
days of his contract.
Prior to Marsaman, however, there were two cases in which the Court made conflicting rulings on Section 10(5). One was Asian Center for Career and
Employment System and Services v. National Labor Relations Commission (Second Division, October 1998), [81] which involved an OFW who was awarded a twoyear employment contract, but was dismissed after working for one year and two months. The LA declared his dismissal illegal and awarded him SR13,600.00 as
lump-sum salary covering eight months, the unexpired portion of his contract. On appeal, the Court reduced the award to SR3,600.00 equivalent to his three
months salary, this being the lesser value, to wit:
Under Section 10 of R.A. No. 8042, a worker dismissed from overseas employment without just, valid or authorized cause is
entitled to his salary for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less.
In the case at bar, the unexpired portion of private respondents employment contract is eight (8) months. Private respondent
should therefore be paid his basic salary corresponding to three (3) months or a total of SR3,600. [82]
Another was Triple-Eight Integrated Services, Inc. v. National Labor Relations Commission (Third Division, December 1998), [83] which involved an
OFW (therein respondent Erlinda Osdana) who was originally granted a 12-month contract, which was deemed renewed for another 12 months. After serving for
one year and seven-and-a-half months, respondent Osdana was illegally dismissed, and the Court awarded her salaries for the entire unexpired portion of four and
one-half months of her contract.
The Marsaman interpretation of Section 10(5) has since been adopted in the following cases:

Period Applied in the

Case Title

Contract

Period of Service

Unexpired Period

Period

Computation of the
Monetary Award

Skippers v.
Maguad[84]

6 months

2 months

4 months

4 months

Bahia Shipping v.
Reynaldo Chua [85]

9 months

8 months

4 months

4 months

Centennial
Transmarine v. dela
Cruz l[86]

9 months

4 months

5 months

5 months

Talidano v. Falcon[87]

12 months

3 months

9 months

3 months

Univan v.
CA [88]

12 months

3 months

9 months

3 months

Oriental v.
CA [89]

12 months

more than 2

10 months

3 months

PCL v. NLRC[90]

12 months

more or less 9 months

3 months

months
more than 2
months

Olarte v. Nayona[91]

12 months

21 days

11 months and 9 days

3 months

JSS v.
Ferrer[92]

12 months

16 days

11 months and 24 days

3 months

9 months and 7

2 months and 23 days

2 months and 23 days

2 months

Unexpired portion

Pentagon
Adelantar[93]

v. 12 months

days

Phil. Employ v.
Paramio,
et al.[94]

12 months

10 months

Flourish Maritime
v. Almanzor [95]

2 years

26 days

Athenna Manpower 1 year, 10 months


v. Villanos [96]
and 28 days

23 months and 4 days 6 months or 3 months for


each year of contract

1 month

1 year, 9 months and 28 6 months or 3 months for


days
each year of contract

As the foregoing matrix readily shows, the subject clause classifies OFWs into two categories. The first category includes OFWs with fixed-period
employment contracts of less than one year; in case of illegal dismissal, they are entitled to their salaries for the entire unexpired portion of their contract. The
second category consists of OFWs with fixed-period employment contracts of one year or more; in case of illegal dismissal, they are entitled to monetary
award equivalent to only 3 months of the unexpired portion of their contracts.
The disparity in the treatment of these two groups cannot be discounted. In Skippers, the respondent OFW worked for only 2 months out of his 6month contract, but was awarded his salaries for the remaining 4 months. In contrast, the respondent OFWs in Oriental and PCL who had also worked for
about 2 months out of their 12-month contracts were awarded their salaries for only 3 months of the unexpired portion of their contracts. Even the OFWs involved
in Talidano andUnivan who had worked for a longer period of 3 months out of their 12-month contracts before being illegally dismissed were awarded their
salaries for only 3 months.
To illustrate the disparity even more vividly, the Court assumes a hypothetical OFW-A with an employment contract of 10 months at a monthly salary
rate of US$1,000.00 and a hypothetical OFW-B with an employment contract of 15 months with the same monthly salary rate of US$1,000.00. Both commenced
work on the same day and under the same employer, and were illegally dismissed after one month of work. Under the subject clause, OFW-A will be entitled to
US$9,000.00, equivalent to his salaries for the remaining 9 months of his contract, whereas OFW-B will be entitled to only US$3,000.00, equivalent to his salaries
for 3 months of the unexpired portion of his contract, instead of US$14,000.00 for the unexpired portion of 14 months of his contract, as the US$3,000.00 is the
lesser amount.
The disparity becomes more aggravating when the Court takes into account jurisprudence that, prior to the effectivity of R.A. No. 8042 on July
14, 1995,[97] illegally dismissed OFWs, no matter how long the period of their employment contracts, were entitled to their salaries for the entire unexpired portions
of their contracts. The matrix below speaks for itself:

Case Title

Contract Period Period of Service Unexpired Period

Period Applied in the


Computation of the
Monetary Award

ATCI v. CA,
et al.[98]

2 years

2 months

22 months

22 months

Phil. Integrated v.
NLRC[99]

2 years

7 days

23 months and 23
days

23 months and 23 days

JGB v. NLC[100]

2 years

9 months

15 months

15 months

2 years

2 months

22 months

22 months

2 years

5 months

19 months

19 months

Barros v. NLRC, et
al.[103]

12 months

4 months

8 months

8 months

Philippine
Transmarine v.
Carilla[104]

12 months

Agoy v. NLRC

[101]

EDI v. NLRC, et al.


[102]

6 months and 22 5 months and 18 days

5 months and 18 days

days

It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were treated alike in terms of the
computation of their monetary benefits in case of illegal dismissal. Their claims were subjected to a uniform rule of computation: their basic salaries multiplied by
the entire unexpired portion of their employment contracts.
The enactment of the subject clause in R.A. No. 8042 introduced a differentiated rule of computation of the money claims of illegally dismissed OFWs
based on their employment periods, in the process singling out one category whose contracts have an unexpired portion of one year or more and subjecting them
to the peculiar disadvantage of having their monetary awards limited to their salaries for 3 months or for the unexpired portion thereof, whichever is less, but all
the while sparing the other category from such prejudice, simply because the latter's unexpired contracts fall short of one year.
Among OFWs With Employment
Contracts of More Than One Year

Upon closer examination of the terminology employed in the subject clause, the Court now has misgivings on the accuracy of
the Marsaman interpretation.
The Court notes that the subject clause or for three (3) months for every year of the unexpired term, whichever is less contains the qualifying phrases
every year and unexpired term. By its ordinary meaning, the word term means a limited or definite extent of time. [105] Corollarily, that every year is
but part of an unexpired term is significant in many ways: first, the unexpired term must be at least one year, for if it were any shorter, there would be
no occasion for such unexpired term to be measured by every year; and second, the original term must be more than one year, for otherwise, whatever would be
the unexpired term thereof will not reach even a year. Consequently, the more decisive factor in the determination of when the subject clause for three (3) months
for every year of the unexpired term, whichever is less shall apply is not the length of the original contract period as held in Marsaman,[106] but the length of the
unexpired portion of the contract period -- the subject clause applies in cases when the unexpired portion of the contract period is at least one year, which
arithmetically requires that the original contract period be more than one year.

Viewed in that light, the subject clause creates a sub-layer of discrimination among OFWs whose contract periods are for more than one year: those
who are illegally dismissed with less than one year left in their contracts shall be entitled to their salaries for the entire unexpired portion thereof, while those who
are illegally dismissed with one year or more remaining in their contracts shall be covered by the subject clause, and their monetary benefits limited to their
salaries for three months only.
To concretely illustrate the application of the foregoing interpretation of the subject clause, the Court assumes hypothetical OFW-C and OFW-D, who
each have a 24-month contract at a salary rate of US$1,000.00 per month. OFW-C is illegally dismissed on the 12 th month, and OFW-D, on the
13th month. Considering that there is at least 12 months remaining in the contract period of OFW-C, the subject clause applies to the computation of the latter's

monetary benefits. Thus, OFW-C will be entitled, not to US$12,000,00 or the latter's total salaries for the 12 months unexpired portion of the contract, but to the
lesser amount of US$3,000.00 or the latter's salaries for 3 months out of the 12-month unexpired term of the contract. On the other hand, OFW-D is spared from
the effects of the subject clause, for there are only 11 months left in the latter's contract period. Thus, OFW-D will be entitled to US$11,000.00, which is equivalent
to his/her total salaries for the entire 11-month unexpired portion.
OFWs vis--vis Local Workers
With Fixed-Period Employment

As discussed earlier, prior to R.A. No. 8042, a uniform system of computation of the monetary awards of illegally dismissed OFWs was in place. This
uniform system was applicable even to local workers with fixed-term employment. [107]
The earliest rule prescribing a uniform system of computation was actually Article 299 of the Code of Commerce (1888), [108] to wit:
Article 299. If the contracts between the merchants and their shop clerks and employees should have been made of
a fixed period, none of the contracting parties, without the consent of the other, may withdraw from the fulfillment of said
contract until the termination of the period agreed upon.
Persons violating this clause shall be subject to indemnify the loss and damage suffered, with the exception of the provisions
contained in the following articles.
In Reyes v. The Compaia Maritima, [109] the Court applied the foregoing provision to determine the liability of a shipping company for the illegal
discharge of its managers prior to the expiration of their fixed-term employment. The Court therein held the shipping company liable for the salaries of its
managers for theremainder of their fixed-term employment.
There is a more specific rule as far as seafarers are concerned: Article 605 of the Code of Commerce which provides:
Article 605. If the contracts of the captain and members of the crew with the agent should be for a definite period or voyage, they
cannot be discharged until the fulfillment of their contracts, except for reasons of insubordination in serious matters, robbery, theft, habitual
drunkenness, and damage caused to the vessel or to its cargo by malice or manifest or proven negligence.
Article 605 was applied to Madrigal Shipping Company, Inc. v. Ogilvie,[110] in
which the Court held the shipping company liable for the salaries and subsistence allowance of its illegally dismissed employees for the entire unexpired portion of
their employment contracts.
While Article 605 has remained good law up to the present, [111] Article 299 of the Code of Commerce was replaced by Art. 1586 of the Civil Code of 1889,
to wit:

Article 1586. Field hands, mechanics, artisans, and other laborers hired for a certain time and for a certain work cannot
leave or be dismissed without sufficient cause, before the fulfillment of the contract. (Emphasis supplied.)
Citing Manresa, the Court in Lemoine v. Alkan[112] read the disjunctive "or" in Article 1586 as a conjunctive "and" so as to apply the provision to local

workers who are employed for a time certain although for no particular skill. This interpretation of Article 1586 was reiterated in Garcia Palomar v. Hotel de
France Company.[113] And in both Lemoine and Palomar, the Court adopted the general principle that in actions for wrongful discharge founded on Article 1586,
local workers are entitled to recover damages to the extent of the amount stipulated to be paid to them by the terms of their contract. On the computation of the
amount of such damages, the Court in Aldaz v. Gay[114] held:
The doctrine is well-established in American jurisprudence, and nothing has been brought to our attention to the contrary under
Spanish jurisprudence, that when an employee is wrongfully discharged it is his duty to seek other employment of the same kind in the
same community, for the purpose of reducing the damages resulting from such wrongful discharge. However, while this is the general rule,
the burden of showing that he failed to make an effort to secure other employment of a like nature, and that other employment of a like
nature was obtainable, is upon the defendant. When an employee is wrongfully discharged under a contract of employment his
prima facie damage is the amount which he would be entitled to had he continued in such employment until the termination
of the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs. Whitlark, 99 Mich., 492; Farrell vs. School District No. 2, 98Mich., 43.)
[115]

(Emphasis supplied)

On August 30, 1950, the New Civil Code took effect with new provisions on fixed-term employment: Section 2 (Obligations with a Period), Chapter 3,
Title I, and Sections 2 (Contract of Labor) and 3 (Contract for a Piece of Work), Chapter 3, Title VIII, Book IV. [116] Much like Article 1586 of the Civil Code of 1889,
the new provisions of the Civil Code do not expressly provide for the remedies available to a fixed-term worker who is illegally discharged. However, it is noted that
inMackay Radio & Telegraph Co., Inc. v. Rich,[117] the Court carried over the principles on the payment of damages underlying Article 1586 of the Civil Code of
1889 and applied the same to a case involving the illegal discharge of a local worker whose fixed-period employment contract was entered into in 1952, when the
new Civil Code was already in effect.[118]
More significantly, the same principles were applied to cases involving overseas Filipino workers whose fixed-term employment contracts were illegally
terminated, such as in First Asian Trans & Shipping Agency, Inc. v. Ople, [119] involving seafarers who were illegally discharged. In Teknika Skills and Trade
Services, Inc. v. National Labor Relations Commission,[120] an OFW who was illegally dismissed prior to the expiration of her fixed-period employment contract as a
baby sitter, was awarded salaries corresponding to the unexpired portion of her contract. The Court arrived at the same ruling in Anderson v. National Labor
Relations Commission,[121] which involved a foreman hired in 1988 in Saudi Arabia for a fixed term of two years, but who was illegally dismissed after only nine
months on the job -- the Court awarded him salaries corresponding to 15 months, the unexpired portion of his contract. In Asia World Recruitment, Inc. v.
National Labor Relations Commission,[122] a Filipino working as a security officer in 1989 in Angola was awarded his salaries for the remaining period of his 12month contract after he was wrongfully discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations Commission, [123] an OFW whose 12-month
contract was illegally cut short in the second month was declared entitled to his salaries for the remaining 10 months of his contract.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally discharged were treated alike in terms of the
computation of their money claims: they were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the enactment of R.A.
No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have
since been differently treated in that their money claims are subject to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-term
employment.
The Court concludes that the subject clause contains a suspect classification in that, in the computation of the monetary benefits of
fixed-term employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more
in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one
classification of OFWs and burdens it with a peculiar disadvantage.
There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now subjects the classification to a strict
judicial scrutiny, and determines whether it serves a compelling state interest through the least restrictive means.
What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by history. [124] It is
akin to the paramount interest of the state [125] for which some individual liberties must give way, such as the public interest in safeguarding health or maintaining
medical standards,[126] or in maintaining access to information on matters of public concern.[127]
In the present case, the Court dug deep into the records but found no compelling state interest that the subject clause may possibly serve.
The OSG defends the subject clause as a police power measure designed to protect the employment of Filipino seafarers overseas x x x. By limiting the
liability to three months [sic], Filipino seafarers have better chance of getting hired by foreign employers. The limitation also protects the interest of local
placement agencies, which otherwise may be made to shoulder millions of pesos in termination pay. [128]
The OSG explained further:
Often, placement agencies, their liability being solidary, shoulder the payment of money claims in the event that jurisdiction over
the foreign employer is not acquired by the court or if the foreign employer reneges on its obligation. Hence, placement agencies that are in
good faith and which fulfill their obligations are unnecessarily penalized for the acts of the foreign employer. To protect them and to
promote their continued helpful contribution in deploying Filipino migrant workers, liability for money are reduced under
Section 10 of RA 8042.
This measure redounds to the benefit of the migrant workers whose welfare the government seeks to promote. The survival of
legitimate placement agencies helps [assure] the government that migrant workers are properly deployed and are employed under decent
and humane conditions.[129] (Emphasis supplied)

However, nowhere in the Comment or Memorandum does the OSG cite the source of its perception of the state interest sought to be served by the
subject clause.
The OSG locates the purpose of R.A. No. 8042 in the speech of Rep. Bonifacio Gallego in sponsorship of House Bill No. 14314 (HB 14314), from which
the law originated;[130] but the speech makes no reference to the underlying reason for the adoption of the subject clause. That is only natural for none of the 29
provisions in HB 14314 resembles the subject clause.
On the other hand, Senate Bill No. 2077 (SB 2077) contains a provision on money claims, to wit:
Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after
the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of the complaint, the claim arising out of
an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas employment including claims
for actual, moral, exemplary and other forms of damages.

several.

The liability of the principal and the recruitment/placement agency or any and all claims under this Section shall be joint and

Any compromise/amicable settlement or voluntary agreement on any money claims exclusive of damages under this Section shall
not be less than fifty percent (50%) of such money claims: Provided, That any installment payments, if applicable, to satisfy any such
compromise or voluntary settlement shall not be more than two (2) months. Any compromise/voluntary agreement in violation of this
paragraph shall be null and void.
Non-compliance with the mandatory period for resolutions of cases provided under this Section shall subject the responsible
officials to any or all of the following penalties:
(1) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or
caused to be, withheld until the said official complies therewith;
(2) Suspension for not more than ninety (90) days; or
(3) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.
Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have
incurred under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph.
But significantly, Section 10 of SB 2077 does not provide for any rule on the computation of money claims.
A rule on the computation of money claims containing the subject clause was inserted and eventually adopted as the 5 th paragraph of Section 10 of R.A.
No. 8042. The Court examined the rationale of the subject clause in the transcripts of the Bicameral Conference Committee (Conference Committee) Meetings on
the Magna Carta on OCWs (Disagreeing Provisions of Senate Bill No. 2077 and House Bill No. 14314). However, the Court finds no discernible state interest, let
alone a compelling one, that is sought to be protected or advanced by the adoption of the subject clause.
In fine, the Government has failed to discharge its burden of proving the existence of a compelling state interest that would justify the perpetuation of
the discrimination against OFWs under the subject clause.
Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of OFWs by mitigating the solidary liability of
placement agencies, such callous and cavalier rationale will have to be rejected. There can never be a justification for any form of government action that alleviates
the burden of one sector, but imposes the same burden on another sector, especially when the favored sector is composed of private businesses such as placement
agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. The idea that private business interest
can be elevated to the level of a compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement agencies vis-a-vis their foreign principals, there are
mechanisms already in place that can be employed to achieve that purpose without infringing on the constitutional rights of OFWs.
The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers, dated February 4, 2002, imposes
administrative disciplinary measures on erring foreign employers who default on their contractual obligations to migrant workers and/or their Philippine agents.

These disciplinary measures range from temporary disqualification to preventive suspension. The POEA Rules and Regulations Governing the Recruitment and
Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring foreign employers.
Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing the solidary liability of
their foreign principals.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equal protection.
Further, there would be certain misgivings if one is to approach the declaration of the unconstitutionality of the subject clause from the lone perspective
that the clause directly violates state policy on labor under Section 3, [131] Article XIII of the Constitution.
While all the provisions of the 1987 Constitution are presumed self-executing,,[132] there are some which this Court has declared not judicially
enforceable, Article XIII being one,[133] particularly Section 3 thereof, the nature of which, this Court, in Agabon v. National Labor Relations Commission,
[134]

has described to be not self-actuating:


Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in the sense that
these are automatically acknowledged and observed without need for any enabling legislation. However, to declare that the constitutional
provisions are enough to guarantee the full exercise of the rights embodied therein, and the realization of ideals therein expressed, would be
impractical, if not unrealistic. The espousal of such view presents the dangerous tendency of being overbroad and exaggerated. The
guarantees of "full protection to labor" and "security of tenure", when examined in isolation, are facially unqualified, and the broadest
interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of circumstance. This interpretation
implies an unimpeachable right to continued employment-a utopian notion, doubtless-but still hardly within the contemplation of the
framers. Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure the protection and promotion,
not only the rights of the labor sector, but of the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss,
formulating their own conclusion to approximate at least the aims of the Constitution.
Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable right to stave
off the dismissal of an employee for just cause owing to the failure to serve proper notice or hearing. As manifested by several framers of the
1987 Constitution, the provisions on social justice require legislative enactments for their enforceability. [135] (Emphasis added)

Thus, Section 3, Article XIII cannot be treated as a principal source of direct enforceable rights, for the violation of which the questioned clause may be
declared unconstitutional. It may unwittingly risk opening the floodgates of litigation to every worker or union over every conceivable violation of so broad a
concept as social justice for labor.
It must be stressed that Section 3, Article XIII does not directly bestow on the working class any actual enforceable right, but merely clothes it
with the status of a sector for whom the Constitution urges protection through executive or legislative action and judicial recognition. Its utility is best
limited to being an impetus not just for the executive and legislative departments, but for the judiciary as well, to protect the welfare of the working
class. And it was in fact consistent with that constitutional agenda that the Court in Central Bank (now Bangko Sentral ng Pilipinas) Employee
Association, Inc. v. Bangko Sentral ng Pilipinas, penned by then Associate Justice now Chief Justice Reynato S. Puno, formulated the judicial precept
that when the challenge to a statute is premised on the perpetuation of prejudice against persons favored by the Constitution with special protection -such as the working class or a section thereof -- the Court may recognize the existence of a suspect classification and subject the same to strict judicial
scrutiny.
The view that the concepts of suspect classification and strict judicial scrutiny formulated in Central Bank Employee Association exaggerate the
significance of Section 3, Article XIII is a groundless apprehension. Central Bank applied Article XIII in conjunction with the equal protection clause. Article
XIII, by itself, without the application of the equal protection clause, has no life or force of its own as elucidated in Agabon.
Along the same line of reasoning, the Court further holds that the subject clause violates petitioner's right to substantive due process, for it deprives him
of property, consisting of monetary benefits, without any existing valid governmental purpose.[136]
The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the entitlement of OFWs to their three-month salary in
case of illegal dismissal, is to give them a better chance of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is nothing in the
text of the law or the records of the deliberations leading to its enactment or the pleadings of respondent that would indicate that there is an existing governmental
purpose for the subject clause, or even just a pretext of one.

The subject clause does not state or imply any definitive governmental purpose; and it is for that precise reason that the clause violates not just
petitioner's right to equal protection, but also her right to substantive due process under Section 1,[137] Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of nine months and 23 days of his
employment contract, pursuant to law and jurisprudence prior to the enactment of R.A. No. 8042.
On the Third Issue
Petitioner contends that his overtime and leave pay should form part of the salary basis in the computation of his monetary award, because these are
fixed benefits that have been stipulated into his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include overtime and leave pay. For seafarers like petitioner, DOLE Department Order No. 33, series 1996,
provides a Standard Employment Contract of Seafarers, in which salary is understood as the basic wage, exclusive of overtime, leave pay and other bonuses;
whereas overtime pay is compensation for all work performed in excess of the regular eight hours, and holiday pay is compensation for any work performed on
designated rest days and holidays.
By the foregoing definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in the computation of petitioner's monetary
award, unless there is evidence that he performed work during those periods. As the Court held in Centennial Transmarine, Inc. v. Dela Cruz,[138]
However, the payment of overtime pay and leave pay should be disallowed in light of our ruling in Cagampan v. National Labor
Relations Commission, to wit:
The rendition of overtime work and the submission of sufficient proof that said was actually performed are
conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of
30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the
entitlement to such benefit must first be established.
In the same vein, the claim for the day's leave pay for the unexpired portion of the contract is unwarranted
since the same is given during the actual service of the seamen.
WHEREFORE, the Court GRANTS the Petition. The subject clause or for three months for every year of the unexpired term, whichever is less in
the 5 paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1, 2005
th

Resolution of the Court of Appeals are MODIFIED to the effect that petitioner is AWARDED his salaries for the entire unexpired portion of his employment
contract consisting of nine months and 23 days computed at the rate of US$1,400.00 per month.
No costs.
SO ORDERED.

16)
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 118295 May 2, 1997


WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as taxpayers;
GREGORIO ANDOLANA and JOKER ARROYO as members of the House of Representatives and as taxpayers; NICANOR P.
PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC
PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG
KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG
MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as
non-governmental organizations, petitioners,
vs.
EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, AGAPITO AQUINO,
RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA. MACAPAGAL-ARROYO, ORLANDO
MERCADO, BLAS OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and
FREDDIE WEBB, in their respective capacities as members of the Philippine Senate who concurred in the ratification by the
President of the Philippines of the Agreement Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his
capacity as Secretary of Budget and Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer;
RIZALINO NAVARRO, in his capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity as
Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary of Finance; ROBERTO ROMULO, in his
capacity as Secretary of Foreign Affairs; and TEOFISTO T. GUINGONA, in his capacity as Executive Secretary, respondents.

PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership thereto of the vast majority of countries has
revolutionized international business and economic relations amongst states. It has irreversibly propelled the world towards trade
liberalization and economic globalization. Liberalization, globalization, deregulation and privatization, the third-millennium buzz words, are
ushering in a new borderless world of business by sweeping away as mere historical relics the heretofore traditional modes of promoting and
protecting national economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and currency controls.
Finding market niches and becoming the best in specific industries in a market-driven and export-oriented global scenario are replacing ageold "beggar-thy-neighbor" policies that unilaterally protect weak and inefficient domestic producers of goods and services. In the words of
Peter Drucker, the well-known management guru, "Increased participation in the world economy has become the key to domestic economic
growth and prosperity."
Brief Historical Background
To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the establishment of three multilateral
institutions inspired by that grand political body, the United Nations were discussed at Dumbarton Oaks and Bretton Woods. The first
was the World Bank (WB) which was to address the rehabilitation and reconstruction of war-ravaged and later developing countries; the
second, the International Monetary Fund (IMF) which was to deal with currency problems; and the third, the International Trade
Organization (ITO), which was to foster order and predictability in world trade and to minimize unilateral protectionist policies that invite
challenge, even retaliation, from other states. However, for a variety of reasons, including its non-ratification by the United States, the ITO,
unlike the IMF and WB, never took off. What remained was only GATT the General Agreement on Tariffs and Trade. GATT was a
collection of treaties governing access to the economies of treaty adherents with no institutionalized body administering the agreements or
dependable system of dispute settlement.
After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the Tokyo Round and the Uruguay Round,
the world finally gave birth to that administering body the World Trade Organization with the signing of the "Final Act" in Marrakesh,
Morocco and the ratification of the WTO Agreement by its members. 1
Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as articulated by President Fidel V.
Ramos in two letters to the Senate (infra), of improving "Philippine access to foreign markets, especially its major trading partners, through
the reduction of tariffs on its exports, particularly agricultural and industrial products." The President also saw in the WTO the opening of
"new opportunities for the services sector . . . , (the reduction of) costs and uncertainty associated with exporting . . . , and (the attraction of)
more investments into the country." Although the Chief Executive did not expressly mention it in his letter, the Philippines and this is of
special interest to the legal profession will benefit from the WTO system of dispute settlement by judicial adjudication through the
independent WTO settlement bodies called (1) Dispute Settlement Panels and (2) Appellate Tribunal. Heretofore, trade disputes were settled

mainly through negotiations where solutions were arrived at frequently on the basis of relative bargaining strengths, and where naturally,
weak and underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines "to place nationals and products of member-countries on the same footing as
Filipinos and local products" and (2) that the WTO "intrudes, limits and/or impairs" the constitutional powers of both Congress and the
Supreme Court, the instant petition before this Court assails the WTO Agreement for violating the mandate of the 1987 Constitution to
"develop a self-reliant and independent national economy effectively controlled by Filipinos . . . (to) give preference to qualified Filipinos (and
to) promote the preferential use of Filipino labor, domestic materials and locally produced goods."
Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade liberalization and economic
globalization? Does it proscribe Philippine integration into a global economy that is liberalized, deregulated and privatized? These are the
main questions raised in this petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court praying (1) for the
nullification, on constitutional grounds, of the concurrence of the Philippine Senate in the ratification by the President of the Philippines of
the Agreement Establishing the World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of its implementation
and enforcement through the release and utilization of public funds, the assignment of public officials and employees, as well as the use of
government properties and resources by respondent-heads of various executive offices concerned therewith. This concurrence is embodied in
Senate Resolution No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The Department of Trade and Industry (Secretary Navarro, for brevity),
representing the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the
Uruguay Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act, 2 Secretary Navarro on behalf of the Republic of the Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a
view to seeking approval of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the President of the Philippines, 3
stating among others that "the Uruguay Round Final Act is hereby submitted to the Senate for its concurrence pursuant to Section 21,
Article VII of the Constitution."
On August 13, 1994, the members of the Philippine Senate received another letter from the President of the Philippines 4 likewise dated
August 11, 1994, which stated among others that "the Uruguay Round Final Act, the Agreement Establishing the World Trade Organization,
the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services are hereby submitted to the
Senate for its concurrence pursuant to Section 21, Article VII of the Constitution."
On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S. 1083, a resolution entitled
"Concurring in the Ratification of the Agreement Establishing the World Trade Organization." 5
On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which "Resolved, as it is hereby resolved, that the Senate concur, as
it hereby concurs, in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization." 6 The
text of the WTO Agreement is written on pages 137 et seq. of Volume I of the 36-volume Uruguay Round of Multilateral Trade Negotiations
and includes various agreements and associated legal instruments (identified in the said Agreement as Annexes 1, 2 and 3 thereto and
collectively referred to as Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of he

General Agreement on Tariffs and Trade


1994
Agreement on Implementation of Article VII of the
General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating
Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual
Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing
the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines signed 7 the Instrument of Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the Philippines, after having
seen and considered the aforementioned Agreement Establishing the World Trade Organization and the agreements and
associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts
thereof, signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same and every Article and
Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the Agreement Proper and "the associated
legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof."
On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement (and its integral annexes
aforementioned) but also (1) the Ministerial Declarations and Decisions and (2) the Understanding on Commitments in Financial Services. In
his Memorandum dated May 13, 1996, 8 the Solicitor General describes these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide range of matters, such as
measures in favor of least developed countries, notification procedures, relationship of WTO with the International
Monetary Fund (IMF), and agreements on technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on, among other things, standstill or limitations and
qualifications of commitments to existing non-conforming measures, market access, national treatment, and definitions of
non-resident supplier of financial services, commercial presence and new financial service.
On December 29, 1994, the present petition was filed. After careful deliberation on respondents' comment and petitioners' reply thereto, the
Court resolved on December 12, 1995, to give due course to the petition, and the parties thereafter filed their respective memoranda. The
court also requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the United Nations stationed in Geneva, Switzerland, to
submit a paper, hereafter referred to as "Bautista Paper," 9 for brevity, (1) providing a historical background of and (2) summarizing the said
agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2) the transcript of
proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed prior to the Philippine
adherence to the WTO Agreement, which derogate from Philippine sovereignty and (2) copies of the multi-volume WTO
Agreement and other documents mentioned in the Final Act, as soon as possible.

After receipt of the foregoing documents, the Court said it would consider the case submitted for resolution. In a Compliance dated
September 16, 1996, the Solicitor General submitted a printed copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations, and
in another Compliance dated October 24, 1996, he listed the various "bilateral or multilateral treaties or international instruments involving
derogation of Philippine sovereignty." Petitioners, on the other hand, submitted their Compliance dated January 28, 1997, on January 30,
1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who participated in the deliberations and voting leading to the
concurrence are estopped from impugning the validity of the Agreement Establishing the World Trade Organization or of
the validity of the concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade Organization contravene the provisions of Sec.
19, Article II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power which, under Sec. 2, Article VI, 1987 Philippine Constitution is
"vested in the Congress of the Philippines";
E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the exercise of judicial
power.
F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of
jurisdiction when they voted for concurrence in the ratification of the constitutionally-infirm Agreement Establishing the
World Trade Organization.
G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of
jurisdiction when they concurred only in the ratification of the Agreement Establishing the World Trade Organization,
and not with the Presidential submission which included the Final Act, Ministerial Declaration and Decisions, and the
Understanding on Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents "synthesized the several issues raised by petitioners into the following":
1. Whether or not the provisions of the "Agreement Establishing the World Trade Organization and the Agreements and
Associated Legal Instruments included in Annexes one (1), two (2) and three (3) of that agreement" cited by petitioners
directly contravene or undermine the letter, spirit and intent of Section 19, Article II and Sections 10 and 12, Article XII
of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of legislative power by
Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this Honorable Court in
promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate "in the ratification by the President of the Philippines of the Agreement
establishing the World Trade Organization" implied rejection of the treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by petitioners, the Solicitor General has effectively ignored three,
namely: (1) whether the petition presents a political question or is otherwise not justiciable; (2) whether petitioner-members of the Senate
(Wigberto E. Taada and Anna Dominique Coseteng) are estopped from joining this suit; and (3) whether the respondent-members of the
Senate acted in grave abuse of discretion when they voted for concurrence in the ratification of the WTO Agreement. The foregoing
notwithstanding, this Court resolved to deal with these three issues thus:
(1) The "political question" issue being very fundamental and vital, and being a matter that probes into the very jurisdiction of this Court
to hear and decide this case was deliberated upon by the Court and will thus be ruled upon as the first issue;

10

(2) The matter of estoppel will not be taken up because this defense is waivable and the respondents have effectively waived it by not
pursuing it in any of their pleadings; in any event, this issue, even if ruled in respondents' favor, will not cause the petition's dismissal as
there are petitioners other than the two senators, who are not vulnerable to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken up as an integral part of the disposition
of the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did not question the locus standi of petitioners. Hence, they are
also deemed to have waived the benefit of such issue. They probably realized that grave constitutional issues, expenditures of public funds
and serious international commitments of the nation are involved here, and that transcendental public interest requires that the substantive
issues be met head on and decided on the merits, rather than skirted or deflected by procedural matters. 11
To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED, DOES THE
PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC. 19,
ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE
EXERCISE OF LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL POWER BY
THIS COURT IN PROMULGATING RULES ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES SUFFICIENT
AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS
AND DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?
The First Issue: Does the Court
Have Jurisdiction Over the Controversy?
In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no doubt raises a
justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes not only
the right but in fact the duty of the judiciary to settle the dispute. "The question thus posed is judicial rather than political. The duty (to
adjudicate) remains to assure that the supremacy of the Constitution is upheld." 12 Once a "controversy as to the application or interpretation
of a constitutional provision is raised before this Court (as in the instant case), it becomes a legal issue which the Court is bound by
constitutional mandate to decide." 13
The jurisdiction of this Court to adjudicate the matters

14

raised in the petition is clearly set out in the 1987 Constitution,

15

as follows:

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the government.
The foregoing text emphasizes the judicial department's duty and power to strike down grave abuse of discretion on the part of any branch or
instrumentality of government including Congress. It is an innovation in our political law.
Concepcion,

17

16

As explained by former Chief Justice Roberto

"the judiciary is the final arbiter on the question of whether or not a branch of government or any of its officials has acted

without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction.
This is not only a judicial power but a duty to pass judgment on matters of this nature."
As this Court has repeatedly and firmly emphasized in many cases,

18

it will not shirk, digress from or abandon its sacred duty and authority

to uphold the Constitution in matters that involve grave abuse of discretion brought before it in appropriate cases, committed by any officer,
agency, instrumentality or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy in the ordinary course of law, we
have no hesitation at all in holding that this petition should be given due course and the vital questions raised therein ruled upon under Rule
65 of the Rules of Court. Indeed, certiorari, prohibition and mandamus are appropriate remedies to raise constitutional issues and to review
and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this, we have no equivocation.

We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the decision of the President
and the Senate in enlisting the country into the WTO, or pass upon the merits of trade liberalization as a policy espoused by said
international body. Neither will it rule on the propriety of the government's economic policy of reducing/removing tariffs, taxes, subsidies,
quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its constitutional duty "to determine whether or not
there had been a grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in ratifying the WTO
Agreement and its three annexes.
Second Issue: The WTO Agreement
and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the "letter, spirit and intent" of the Constitution mandating "economic nationalism" are violated by the socalled "parity provisions" and "national treatment" clauses scattered in various parts not only of the WTO Agreement and its annexes but
also in the Ministerial Decisions and Declarations and in the Understanding on Commitments in Financial Services.
Specifically, the "flagship" constitutional provisions referred to are Sec 19, Article II, and Secs. 10 and 12, Article XII, of the Constitution,
which are worded as follows:
Article II
DECLARATION OF PRINCIPLES
AND STATE POLICIES
xxx xxx xxx
Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.
xxx xxx xxx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xxx xxx xxx
Sec. 10. . . . The Congress shall enact measures that will encourage the formation and operation of enterprises whose
capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give
preference to qualified Filipinos.
xxx xxx xxx
Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and
adopt measures that help make them competitive.
Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions quoted in their memorandum:
a) In the area of investment measures related to trade in goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994, no Member shall apply any
TRIM that is inconsistent with the provisions of Article II or Article XI of GATT 1994.
2. An illustrative list of TRIMS that are inconsistent with the obligations of general elimination of
quantitative restrictions provided for in paragraph I of Article XI of GATT 1994 is contained in the

19

Annex to this Agreement." (Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay
Round, Legal Instruments, p. 22121, emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of
GATT 1994 include those which are mandatory or enforceable under domestic law or under administrative rulings, or
compliance with which is necessary to obtain an advantage, and which require:
(a) the purchase or use by an enterprise of products of domestic origin or from any domestic source,
whether specified in terms of particular products, in terms of volume or value of products, or in terms
of proportion of volume or value of its local production; or
(b) that an enterprise's purchases or use of imported products be limited to an amount related to the
volume or value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in
paragraph 1 of Article XI of GATT 1994 include those which are mandatory or enforceable under domestic laws or under
administrative rulings, or compliance with which is necessary to obtain an advantage, and which restrict:
(a) the importation by an enterprise of products used in or related to the local production that it
exports;
(b) the importation by an enterprise of products used in or related to its local production by restricting
its access to foreign exchange inflows attributable to the enterprise; or
(c) the exportation or sale for export specified in terms of particular products, in terms of volume or
value of products, or in terms of a preparation of volume or value of its local production. (Annex to the
Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round Legal Documents, p.
22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any other
contracting party shall be accorded treatment no less favorable than that accorded to like products of
national origin in respect of laws, regulations and requirements affecting their internal sale, offering
for sale, purchase, transportation, distribution or use, the provisions of this paragraph shall not
prevent the application of differential internal transportation charges which are based exclusively on
the economic operation of the means of transport and not on the nationality of the product." (Article
III, GATT 1947, as amended by the Protocol Modifying Part II, and Article XXVI of GATT, 14
September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the General Agreement on Tariffs
and Trade 1994, Vol. 1, Uruguay Round, Legal Instruments p. 177, emphasis supplied).
(b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):
Each Member shall accord to the nationals of other Members treatment no less favourable than that it
accords to its own nationals with regard to the protection of intellectual property. . . (par. 1 Article 3,
Agreement on Trade-Related Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, Legal
Instruments, p. 25432 (emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and qualifications set out
therein, each Member shall accord to services and service suppliers of any other Member, in respect of
all measures affecting the supply of services, treatment no less favourable than it accords to its own
like services and service suppliers.

2. A Member may meet the requirement of paragraph I by according to services and service suppliers
of any other Member, either formally suppliers of any other Member, either formally identical
treatment or formally different treatment to that it accords to its own like services and service
suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it
modifies the conditions of completion in favour of services or service suppliers of the Member
compared to like services or service suppliers of any other Member. (Article XVII, General Agreement
on Trade in Services, Vol. 28, Uruguay Round Legal Instruments, p. 22610 emphasis supplied).
It is petitioners' position that the foregoing "national treatment" and "parity provisions" of the WTO Agreement "place nationals and
products of member countries on the same footing as Filipinos and local products," in contravention of the "Filipino First" policy of the
Constitution. They allegedly render meaningless the phrase "effectively controlled by Filipinos." The constitutional conflict becomes more
manifest when viewed in the context of the clear duty imposed on the Philippines as a WTO member to ensure the conformity of its laws,
regulations and administrative procedures with its obligations as provided in the annexed agreements. 20 Petitioners further argue that these
provisions contravene constitutional limitations on the role exports play in national development and negate the preferential treatment
accorded to Filipino labor, domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions are not self-executing and merely set
out general policies; (2) that these nationalistic portions of the Constitution invoked by petitioners should not be read in isolation but should
be related to other relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the cited WTO clauses do not
conflict with Constitution; and (4) that the WTO Agreement contains sufficient provisions to protect developing countries like the Philippines
from the harshness of sudden trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles
Not Self-Executing
By its very title, Article II of the Constitution is a "declaration of principles and state policies." The counterpart of this article in the 1935
Constitution 21 is called the "basic political creed of the nation" by Dean Vicente Sinco.
self-executing principles ready for enforcement through the courts.

23

22

These principles in Article II are not intended to be

They are used by the judiciary as aids or as guides in the exercise of its

power of judicial review, and by the legislature in its enactment of laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato, 24
the principles and state policies enumerated in Article II and some sections of Article XII are not "self-executing provisions, the disregard of
which can give rise to a cause of action in the courts. They do not embody judicially enforceable constitutional rights but guidelines for
legislation."
In the same light, we held in Basco vs. Pagcor 25 that broad constitutional principles need legislative enactments to implement the, thus:
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and 13 (Role of Youth) of
Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987
Constitution, suffice it to state also that these are merely statements of principles and policies. As such, they are basically
not self-executing, meaning a law should be passed by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for
enforcement through the courts. They were rather directives addressed to the executive and to the
legislature. If the executive and the legislature failed to heed the directives of the article, the available
remedy was not judicial but political. The electorate could express their displeasure with the failure of
the executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of board constitutional principles are sourced from basic considerations
of due process and the lack of judicial authority to wade "into the uncharted ocean of social and economic policy making." Mr. Justice
Florentino P. Feliciano in his concurring opinion in Oposa vs. Factoran, Jr., 26 explained these reasons as follows:
My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in
language of a significantly lower order of generality than Article II (15) of the Constitution that is or may be violated by
the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render
judgment grating all or part of the relief prayed for. To my mind, the court should be understood as simply saying that
such a more specific legal right or rights may well exist in our corpus of law, considering the general policy principles
found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have
given petitioners an effective opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable
legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right
claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to
defend themselves intelligently and effectively; in other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or
proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of
Section 1 of Article VIII of the Constitution which reads:
Sec. 1. . . .
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. (Emphasis supplied)
When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area of environmental protection and management, our courts have
no claim to special technical competence and experience and professional qualification. Where no specific, operable norms
and standards are shown to exist, then the policy making departments the legislative and executive departments
must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement
them before the courts should intervene.
Economic Nationalism Should Be Read with
Other Constitutional Mandates to Attain
Balanced Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles relating to the national economy and
patrimony, should be read and understood in relation to the other sections in said article, especially Secs. 1 and 13 thereof which read:
Sec. 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life for all especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural development and agrarian
reform, through industries that make full and efficient use of human and natural resources, and which are competitive in
both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity
to develop. . . .
xxx xxx xxx
Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged.
With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by expressing preference in favor of qualified
Filipinos "in the grant of rights, privileges and concessions covering the national economy and patrimony"

27

and in the use of "Filipino labor,

domestic materials and locally-produced goods"; (2) by mandating the State to "adopt measures that help make them competitive;
by requiring the State to "develop a self-reliant and independent national economy effectively controlled by Filipinos."

29

28

and (3)

In similar language,

the Constitution takes into account the realities of the outside world as it requires the pursuit of "a trade policy that serves the general

welfare and utilizes all forms and arrangements of exchange on the basis of equality ad reciprocity";

30

and speaks of industries "which are

competitive in both domestic and foreign markets" as well as of the protection of "Filipino enterprises against unfair foreign competition and
trade practices."
It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et al., 31 this Court held that "Sec. 10,
second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further
guidelines or implementing laws or rule for its enforcement. From its very words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable." However, as the constitutional provision itself states, it is enforceable only in regard to "the
grants of rights, privileges and concessions covering national economy and patrimony" and not to every aspect of trade and commerce. It
refers to exceptions rather than the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather,
the issue is whether, as a rule, there are enough balancing provisions in the Constitution to allow the Senate to ratify the Philippine
concurrence in the WTO Agreement. And we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it
recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of Filipino
enterprises only against foreign competition and trade practices that are unfair.

32

In other words, the Constitution did not intend to pursue

an isolationist policy. It did not shut out foreign investments, goods and services in the development of the Philippine economy. While the
Constitution does not encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition that is unfair.
WTO Recognizes Need to
Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to protect weak and developing economies,
which comprise the vast majority of its members. Unlike in the UN where major states have permanent seats and veto powers in the Security
Council, in the WTO, decisions are made on the basis of sovereign equality, with each member's vote equal in weight to that of any other.
There is no WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial Conference and the General Council
shall be taken by the majority of the votes cast, except in cases of interpretation of the Agreement or waiver of the
obligation of a member which would require three fourths vote. Amendments would require two thirds vote in general.
Amendments to MFN provisions and the Amendments provision will require assent of all members. Any member may
withdraw from the Agreement upon the expiration of six months from the date of notice of withdrawals. 33
Hence, poor countries can protect their common interests more effectively through the WTO than through one-on-one negotiations with
developed countries. Within the WTO, developing countries can form powerful blocs to push their economic agenda more decisively than
outside the Organization. This is not merely a matter of practical alliances but a negotiating strategy rooted in law. Thus, the basic principles
underlying the WTO Agreement recognize the need of developing countries like the Philippines to "share in the growth in international trade
commensurate with the needs of their economic development." These basic principles are found in the preamble 34 of the WTO Agreement as
follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising
standards of living, ensuring full employment and a large and steadily growing volume of real income and effective
demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the
world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the
environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at
different levels of economic development,
Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the
least developed among them, secure a share in the growth in international trade commensurate with the needs of their
economic development,
Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements
directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory
treatment in international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the
General Agreement on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the
Uruguay Round of Multilateral Trade Negotiations,

Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system, . . .
(emphasis supplied.)
Specific WTO Provisos
Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic principles, the WTO Agreement grants
developing countries a more lenient treatment, giving their domestic industries some protection from the rush of foreign competition. Thus,
with respect to tariffs in general, preferential treatment is given to developing countries in terms of the amount of tariff reduction and the
period within which the reduction is to be spread out. Specifically, GATT requires an average tariff reduction rate of 36% for developed
countries to be effected within a period of six (6) years while developing countries including the Philippines are required to effect an
average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural products by 20% over six (6)
years, as compared to only 13% for developing countries to be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires developed countries to reduce their budgetary outlays for export subsidy
by 36% and export volumes receiving export subsidy by 21% within a period of six (6) years. For developing countries, however, the reduction
rate is only two-thirds of that prescribed for developed countries and a longer period of ten (10) years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade practices including anti-dumping measures,
countervailing measures and safeguards against import surges. Where local businesses are jeopardized by unfair foreign competition, the
Philippines can avail of these measures. There is hardly therefore any basis for the statement that under the WTO, local industries and
enterprises will all be wiped out and that Filipinos will be deprived of control of the economy. Quite the contrary, the weaker situations of
developing nations like the Philippines have been taken into account; thus, there would be no basis to say that in joining the WTO, the
respondents have gravely abused their discretion. True, they have made a bold decision to steer the ship of state into the yet uncharted sea of
economic liberalization. But such decision cannot be set aside on the ground of grave abuse of discretion, simply because we disagree with it
or simply because we believe only in other economic policies. As earlier stated, the Court in taking jurisdiction of this case will not pass upon
the advantages and disadvantages of trade liberalization as an economic policy. It will only perform its constitutional duty of determining
whether the Senate committed grave abuse of discretion.
Constitution Does Not
Rule Out Foreign Competition
Furthermore, the constitutional policy of a "self-reliant and independent national economy"

35

does not necessarily rule out the entry of

foreign investments, goods and services. It contemplates neither "economic seclusion" nor "mendicancy in the international community." As
explained by Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly aware of overdependence on external
assistance for even its most basic needs. It does not mean autarky or economic seclusion; rather, it means avoiding
mendicancy in the international community. Independence refers to the freedom from undue foreign control of the
national economy, especially in such strategic industries as in the development of natural resources and public utilities.

36

The WTO reliance on "most favored nation," "national treatment," and "trade without discrimination" cannot be struck down as
unconstitutional as in fact they are rules of equality and reciprocity that apply to all WTO members. Aside from envisioning a trade policy
based on "equality and reciprocity,"

37

the fundamental law encourages industries that are "competitive in both domestic and foreign

markets," thereby demonstrating a clear policy against a sheltered domestic trade environment, but one in favor of the gradual development
of robust industries that can compete with the best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have shown
capability and tenacity to compete internationally. And given a free trade environment, Filipino entrepreneurs and managers in Hongkong
have demonstrated the Filipino capacity to grow and to prosper against the best offered under a policy of laissez faire.
Constitution Favors Consumers,
Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor does it contain any specific
pronouncement that Filipino companies should be pampered with a total proscription of foreign competition. On the other hand, respondents
claim that WTO/GATT aims to make available to the Filipino consumer the best goods and services obtainable anywhere in the world at the
most reasonable prices. Consequently, the question boils down to whether WTO/GATT will favor the general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?

Will WTO/GATT succeed in promoting the Filipinos' general welfare because it will as promised by its promoters expand the country's
exports and generate more employment?
Will it bring more prosperity, employment, purchasing power and quality products at the most reasonable rates to the Filipino public?
The responses to these questions involve "judgment calls" by our policy makers, for which they are answerable to our people during
appropriate electoral exercises. Such questions and the answers thereto are not subject to judicial pronouncements based on grave abuse of
discretion.
Constitution Designed to Meet
Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and ratified in 1987. That does not mean however
that the Charter is necessarily flawed in the sense that its framers might not have anticipated the advent of a borderless world of business.
By the same token, the United Nations was not yet in existence when the 1935 Constitution became effective. Did that necessarily mean that
the then Constitution might not have contemplated a diminution of the absoluteness of sovereignty when the Philippines signed the UN
Charter, thereby effectively surrendering part of its control over its foreign relations to the decisions of various UN organs like the Security
Council?
It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of contemporary events. They should be
interpreted to cover even future and unknown circumstances. It is to the credit of its drafters that a Constitution can withstand the assaults
of bigots and infidels but at the same time bend with the refreshing winds of change necessitated by unfolding events. As one eminent
political law writer and respected jurist 38 explains:
The Constitution must be quintessential rather than superficial, the root and not the blossom, the base and frame-work
only of the edifice that is yet to rise. It is but the core of the dream that must take shape, not in a twinkling by mandate of
our delegates, but slowly "in the crucible of Filipino minds and hearts," where it will in time develop its sinews and
gradually gather its strength and finally achieve its substance. In fine, the Constitution cannot, like the goddess Athena,
rise full-grown from the brow of the Constitutional Convention, nor can it conjure by mere fiat an instant Utopia. It must
grow with the society it seeks to re-structure and march apace with the progress of the race, drawing from the vicissitudes of
history the dynamism and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law attuned to the
heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that "(e)ach Member shall ensure the conformity of its laws, regulations and administrative procedures with
its obligations as provided in the annexed Agreements."

39

Petitioners maintain that this undertaking "unduly limits, restricts and impairs

Philippine sovereignty, specifically the legislative power which under Sec. 2, Article VI of the 1987 Philippine Constitution is vested in the
Congress of the Philippines. It is an assault on the sovereign powers of the Philippines because this means that Congress could not pass
legislation that will be good for our national interest and general welfare if such legislation will not conform with the WTO Agreement, which
not only relates to the trade in goods . . . but also to the flow of investments and money . . . as well as to a whole slew of agreements on sociocultural matters . . . 40
More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the Congress.

41

And while the

Constitution allows Congress to authorize the President to fix tariff rates, import and export quotas, tonnage and wharfage dues, and other
duties or imposts, such authority is subject to "specified limits and . . . such limitations and restrictions" as Congress may provide, 42 as in fact
it did under Sec. 401 of the Tariff and Customs Code.
Sovereignty Limited by
International Law and Treaties
This Court notes and appreciates the ferocity and passion by which petitioners stressed their arguments on this issue. However, while
sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it is however subject to restrictions and
limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the
Constitution did not envision a hermit-type isolation of the country from the rest of the world. In its Declaration of Principles and State
Policies, the Constitution "adopts the generally accepted principles of international law as part of the law of the land, and adheres to the
policy of peace, equality, justice, freedom, cooperation and amity, with all nations." 43 By the doctrine of incorporation, the country is bound by
generally accepted principles of international law, which are considered to be automatically part of our own laws.

44

One of the oldest and

most fundamental rules in international law is pacta sunt servanda international agreements must be performed in good faith. "A treaty
engagement is not a mere moral obligation but creates a legally binding obligation on the parties . . . A state which has contracted valid
international obligations is bound to make in its legislations such modifications as may be necessary to ensure the fulfillment of the
obligations undertaken." 45

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some
aspects of their state power in exchange for greater benefits granted by or derived from a convention or pact. After all, states, like individuals,
live with coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to limit the exercise of their
otherwise absolute rights. Thus, treaties have been used to record agreements between States concerning such widely diverse matters as, for
example, the lease of naval bases, the sale or cession of territory, the termination of war, the regulation of conduct of hostilities, the formation
of alliances, the regulation of commercial relations, the settling of claims, the laying down of rules governing conduct in peace and the
establishment of international organizations. 46 The sovereignty of a state therefore cannot in fact and in reality be considered absolute.
Certain restrictions enter into the picture: (1) limitations imposed by the very nature of membership in the family of nations and (2)
limitations imposed by treaty stipulations. As aptly put by John F. Kennedy, "Today, no nation can build its destiny alone. The age of selfsufficient nationalism is over. The age of interdependence is here." 47
UN Charter and Other Treaties
Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented to restrict its sovereign rights under the
"concept of sovereignty as auto-limitation." 47-A Under Article 2 of the UN Charter, "(a)ll members shall give the United Nations every
assistance in any action it takes in accordance with the present Charter, and shall refrain from giving assistance to any state against which
the United Nations is taking preventive or enforcement action." Such assistance includes payment of its corresponding share not merely in
administrative expenses but also in expenditures for the peace-keeping operations of the organization. In its advisory opinion of July 20,
1961, the International Court of Justice held that money used by the United Nations Emergency Force in the Middle East and in the Congo
were "expenses of the United Nations" under Article 17, paragraph 2, of the UN Charter. Hence, all its members must bear their
corresponding share in such expenses. In this sense, the Philippine Congress is restricted in its power to appropriate. It is compelled to
appropriate funds whether it agrees with such peace-keeping expenses or not. So too, under Article 105 of the said Charter, the UN and its
representatives enjoy diplomatic privileges and immunities, thereby limiting again the exercise of sovereignty of members within their own
territory. Another example: although "sovereign equality" and "domestic jurisdiction" of all members are set forth as underlying principles in
the UN Charter, such provisos are however subject to enforcement measures decided by the Security Council for the maintenance of
international peace and security under Chapter VII of the Charter. A final example: under Article 103, "(i)n the event of a conflict between
the obligations of the Members of the United Nations under the present Charter and their obligations under any other international
agreement, their obligation under the present charter shall prevail," thus unquestionably denying the Philippines as a member the
sovereign power to make a choice as to which of conflicting obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international pacts both bilateral and multilateral that involve
limitations on Philippine sovereignty. These are enumerated by the Solicitor General in his Compliance dated October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes on income, where the Philippines agreed, among others,
to exempt from tax, income received in the Philippines by, among others, the Federal Reserve Bank of the United States,
the Export/Import Bank of the United States, the Overseas Private Investment Corporation of the United States.
Likewise, in said convention, wages, salaries and similar remunerations paid by the United States to its citizens for labor
and personal services performed by them as employees or officials of the United States are exempt from income tax by the
Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double taxation with respect to taxes
on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all customs duties,
inspection fees and other duties or taxes aircrafts of South Korea and the regular equipment, spare parts and supplies
arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from customs duties, excise taxes,
inspection fees and other similar duties, taxes or charges fuel, lubricating oils, spare parts, regular equipment, stores on
board Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers the same privileges
as those granted to Japanese and Korean air carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines exempted Israeli
nationals from the requirement of obtaining transit or visitor visas for a sojourn in the Philippines not exceeding 59 days.

(i) Bilateral agreement with France exempting French nationals from the requirement of obtaining transit and visitor
visa for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said premises without consent of the Head of Mission concerned.
Special Missions are also exempted from customs duties, taxes and related charges.
(k) Multilateral convention on the Law of Treaties. In this convention, the Philippines agreed to be governed by the
Vienna Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the International Court of Justice.
The International Court of Justice has jurisdiction in all legal disputes concerning the interpretation of a treaty, any
question of international law, the existence of any fact which, if established, would constitute a breach "of international
obligation."
In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and
police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other contracting
states in granting the same privilege and immunities to the Philippines, its officials and its citizens. The same reciprocity characterizes the
Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or
trade, constrain domestic political sovereignty through the assumption of external obligations. But unless anarchy in
international relations is preferred as an alternative, in most cases we accept that the benefits of the reciprocal
obligations involved outweigh the costs associated with any loss of political sovereignty. (T)rade treaties that structure
relations by reference to durable, well-defined substantive norms and objective dispute resolution procedures reduce the
risks of larger countries exploiting raw economic power to bully smaller countries, by subjecting power relations to some
form of legal ordering. In addition, smaller countries typically stand to gain disproportionately from trade liberalization.
This is due to the simple fact that liberalization will provide access to a larger set of potential new trading relationship
than in case of the larger country gaining enhanced success to the smaller country's market.

48

The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without violating the Constitution, based on the
rationale that the Philippines "adopts the generally accepted principles of international law as part of the law of the land and adheres to the
policy of . . . cooperation and amity with all nations."
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) 49 intrudes on the power of the Supreme Court to promulgate rules concerning pleading, practice and
procedures. 50
To understand the scope and meaning of Article 34, TRIPS,

51

it will be fruitful to restate its full text as follows:


Article 34
Process Patents: Burden of Proof

1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in paragraph 1
(b) of Article 28, if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have
the authority to order the defendant to prove that the process to obtain an identical product is different from the patented
process. Therefore, Members shall provide, in at least one of the following circumstances, that any identical product when
produced without the consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been
obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the process and the
owner of the patent has been unable through reasonable efforts to determine the process actually
used.
2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged infringer
only if the condition referred to in subparagraph (a) is fulfilled or only if the condition referred to in subparagraph (b) is
fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing and
business secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of disputable (not the words "in the absence of proof to the contrary")
presumption that a product shown to be identical to one produced with the use of a patented process shall be deemed to have been obtained
by the (illegal) use of the said patented process, (1) where such product obtained by the patented product is new, or (2) where there is
"substantial likelihood" that the identical product was made with the use of the said patented process but the owner of the patent could not
determine the exact process used in obtaining such identical product. Hence, the "burden of proof" contemplated by Article 34 should actually
be understood as the duty of the alleged patent infringer to overthrow such presumption. Such burden, properly understood, actually refers to
the "burden of evidence" (burden of going forward) placed on the producer of the identical (or fake) product to show that his product was
produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the "burden of proof" since, regardless of the presumption provided under
paragraph 1 of Article 34, such owner still has to introduce evidence of the existence of the alleged identical product, the fact that it is
"identical" to the genuine one produced by the patented process and the fact of "newness" of the genuine product or the fact of "substantial
likelihood" that the identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as the present law on the subject, Republic Act No. 165, as
amended, otherwise known as the Patent Law, provides a similar presumption in cases of infringement of patented design or utility model,
thus:
Sec. 60. Infringement. Infringement of a design patent or of a patent for utility model shall consist in unauthorized
copying of the patented design or utility model for the purpose of trade or industry in the article or product and in the
making, using or selling of the article or product copying the patented design or utility model. Identity or substantial
identity with the patented design or utility model shall constitute evidence of copying. (emphasis supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if (1) the product obtained by
the patented process in NEW or (2) there is a substantial likelihood that the identical product was made by the process and the process
owner has not been able through reasonable effort to determine the process used. Where either of these two provisos does not obtain,
members shall be free to determine the appropriate method of implementing the provisions of TRIPS within their own internal systems and
processes.
By and large, the arguments adduced in connection with our disposition of the third issue derogation of legislative power will apply to
this fourth issue also. Suffice it to say that the reciprocity clause more than justifies such intrusion, if any actually exists. Besides, Article 34
does not contain an unreasonable burden, consistent as it is with due process and the concept of adversarial dispute settlement inherent in
our judicial system.
So too, since the Philippine is a signatory to most international conventions on patents, trademarks and copyrights, the adjustment in
legislation and rules of procedure will not be substantial.

52

Fifth Issue: Concurrence Only in the WTO Agreement and


Not in Other Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes but not in the other documents referred to in the
Final Act, namely the Ministerial Declaration and Decisions and the Understanding on Commitments in Financial Services is defective
and insufficient and thus constitutes abuse of discretion. They submit that such concurrence in the WTO Agreement alone is flawed because
it is in effect a rejection of the Final Act, which in turn was the document signed by Secretary Navarro, in representation of the Republic
upon authority of the President. They contend that the second letter of the President to the Senate 53 which enumerated what constitutes the
Final Act should have been the subject of concurrence of the Senate.
"A final act, sometimes called protocol de cloture, is an instrument which records the winding up of the proceedings of a diplomatic conference
and usually includes a reproduction of the texts of treaties, conventions, recommendations and other acts agreed upon and signed by the
plenipotentiaries attending the conference." 54 It is not the treaty itself. It is rather a summary of the proceedings of a protracted conference
which may have taken place over several years. The text of the "Final Act Embodying the Results of the Uruguay Round of Multilateral Trade
Negotiations" is contained in just one page 55 in Vol. I of the 36-volume Uruguay Round of Multilateral Trade Negotiations. By signing said
Final Act, Secretary Navarro as representative of the Republic of the Philippines undertook:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities with a
view to seeking approval of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.

The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required from its signatories, namely,
concurrence of the Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They were approved by the ministers by
virtue of Article XXV: 1 of GATT which provides that representatives of the members can meet "to give effect to those provisions of this
Agreement which invoke joint action, and generally with a view to facilitating the operation and furthering the objectives of this Agreement."
56

The Understanding on Commitments in Financial Services also approved in Marrakesh does not apply to the Philippines. It applies only to
those 27 Members which "have indicated in their respective schedules of commitments on standstill, elimination of monopoly, expansion of
operation of existing financial service suppliers, temporary entry of personnel, free transfer and processing of information, and national
treatment with respect to access to payment, clearing systems and refinancing available in the normal course of business." 57
On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its integral parts,

58

as

follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional frame-work for the conduct of trade relations among its Members in
matters to the agreements and associated legal instruments included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3, (hereinafter referred to as
"Multilateral Agreements") are integral parts of this Agreement, binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to as "Plurilateral Trade
Agreements") are also part of this Agreement for those Members that have accepted them, and are binding on those
Members. The Plurilateral Trade Agreements do not create either obligation or rights for Members that have not accepted
them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter referred to as "GATT 1994") is
legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act
adopted at the conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade
and Employment, as subsequently rectified, amended or modified (hereinafter referred to as "GATT 1947").
It should be added that the Senate was well-aware of what it was concurring in as shown by the members' deliberation on August 25, 1994.
After reading the letter of President Ramos dated August 11, 1994,

59

the senators

of the Republic minutely dissected what the Senate was concurring in, as follows:

60

THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day hearing of this
Committee yesterday. Was the observation made by Senator Taada that what was submitted to the Senate was not the
agreement on establishing the World Trade Organization by the final act of the Uruguay Round which is not the same as
the agreement establishing the World Trade Organization? And on that basis, Senator Tolentino raised a point of order
which, however, he agreed to withdraw upon understanding that his suggestion for an alternative solution at that time
was acceptable. That suggestion was to treat the proceedings of the Committee as being in the nature of briefings for
Senators until the question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new . . . is he making a new submission which improves
on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no misunderstanding, it was his
intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on Senator Tolentino since they were the ones that raised this
question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.

Based on what Secretary Romulo has read, it would now clearly appear that what is being submitted to the Senate for
ratification is not the Final Act of the Uruguay Round, but rather the Agreement on the World Trade Organization as well
as the Ministerial Declarations and Decisions, and the Understanding and Commitments in Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator Tolentino? And after him Senator Neptali
Gonzales and Senator Lina.
SEN. TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us but I saw the draft of
his earlier, and I think it now complies with the provisions of the Constitution, and with the Final Act itself . The
Constitution does not require us to ratify the Final Act. It requires us to ratify the Agreement which is now being submitted.
The Final Act itself specifies what is going to be submitted to with the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as appropriate the WTO Agreement for the
consideration of the respective competent authorities with a view to seeking approval of the Agreement in accordance with
their procedures.
In other words, it is not the Final Act that was agreed to be submitted to the governments for ratification or acceptance as
whatever their constitutional procedures may provide but it is the World Trade Organization Agreement. And if that is the
one that is being submitted now, I think it satisfies both the Constitution and the Final Act itself .
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And they had been adequately
reflected in the journal of yesterday's session and I don't see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the abundance of question.
Then the new submission is, I believe, stating the obvious and therefore I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are invoking this Court's constitutionally
imposed duty "to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of
the Senate in giving its concurrence therein via Senate Resolution No. 97. Procedurally, a writ of certiorari grounded on grave abuse of
discretion may be issued by the Court under Rule 65 of the Rules of Court when it is amply shown that petitioners have no other plain,
speedy and adequate remedy in the ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.

61

Mere

abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal
to perform the duty enjoined or to act at all in contemplation of law. 62 Failure on the part of the petitioner to show grave abuse of discretion
will result in the dismissal of the petition.

63

In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one of two sovereign houses of Congress
and is thus entitled to great respect in its actions. It is itself a constitutional body independent and coordinate, and thus its actions are
presumed regular and done in good faith. Unless convincing proof and persuasive arguments are presented to overthrow such presumptions,
this Court will resolve every doubt in its favor. Using the foregoing well-accepted definition of grave abuse of discretion and the presumption
of regularity in the Senate's processes, this Court cannot find any cogent reason to impute grave abuse of discretion to the Senate's exercise of
its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the Constitution.

64

It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an independent national economy
effectively controlled by Filipinos; and to protect and/or prefer Filipino labor, products, domestic materials and locally produced goods. But it
is equally true that such principles while serving as judicial and legislative guides are not in themselves sources of causes of action.
Moreover, there are other equally fundamental constitutional principles relied upon by the Senate which mandate the pursuit of a "trade
policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity" and the
promotion of industries "which are competitive in both domestic and foreign markets," thereby justifying its acceptance of said treaty. So too,
the alleged impairment of sovereignty in the exercise of legislative and judicial powers is balanced by the adoption of the generally accepted
principles of international law as part of the law of the land and the adherence of the Constitution to the policy of cooperation and amity with
all nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the WTO Agreement thereby making it "a
part of the law of the land" is a legitimate exercise of its sovereign duty and power. We find no "patent and gross" arbitrariness or despotism
"by reason of passion or personal hostility" in such exercise. It is not impossible to surmise that this Court, or at least some of its members,
may even agree with petitioners that it is more advantageous to the national interest to strike down Senate Resolution No. 97. But that is not
a legal reason to attribute grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave abuse in the
exercise of our own judicial power and duty. Ineludably, what the Senate did was a valid exercise of its authority. As to whether such exercise
was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between the elected policy makers and the
people. As to whether the nation should join the worldwide march toward trade liberalization and economic globalization is a matter that our
people should determine in electing their policy makers. After all, the WTO Agreement allows withdrawal of membership, should this be the
political desire of a member.
The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance

65

where "the East will become the

dominant region of the world economically, politically and culturally in the next century." He refers to the "free market" espoused by WTO as
the "catalyst" in this coming Asian ascendancy. There are at present about 31 countries including China, Russia and Saudi Arabia
negotiating for membership in the WTO. Notwithstanding objections against possible limitations on national sovereignty, the WTO remains
as the only viable structure for multilateral trading and the veritable forum for the development of international trade law. The alternative to
WTO is isolation, stagnation, if not economic self-destruction. Duly enriched with original membership, keenly aware of the advantages and
disadvantages of globalization with its on-line experience, and endowed with a vision of the future, the Philippines now straddles the
crossroads of an international strategy for economic prosperity and stability in the new millennium. Let the people, through their duly
authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima, Jr. and Torres, Jr., JJ.,
concur.
Padilla and Vitug, JJ., concur in the result.

17)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 132451 December 17, 1999


CONGRESSMAN ENRIQUE T. GARCIA, petitioner,
vs.
HON. RENATO C. CORONA, in his capacity as the Executive Secretary, HON. FRANCISCO VIRAY, in his capacity as the
Secretary of Energy, CALTEX PHILIPPINES INC., PILIPINAS SHELL PETROLEUM CORP. and PETRON CORP., respondents.

YNARES-SANTIAGO, J.:

On November 5, 1997, this Court in Tatad v. Secretary of the Department of Energy and Lagman, et al., v. Hon. Ruben Torres, et al., 1 declared
Republic Act No. 8180, entitled "An Act Deregulating the Downstream Oil Industry and For Other Purposes", unconstitutional, and its
implementing Executive Order No. 392 void.
R.A. 8180 was struck down as invalid because three key provisions intended to promote free competition were shown to achieve the opposite
result. More specifically, this Court ruled that its provisions on tariff differential, stocking of inventories, and predatory pricing inhibit fair
competition, encourage monopolistic power, and interfere with the free interaction of the market forces.
While R.A. 8180 contained a separability clause, it was declared unconstitutional in its entirety since the three (3) offending provisions so
permeated the law that they were so intimately the esse of the law. Thus, the whole statute had to be invalidated.
As a result of the Tatad decision, Congress enacted Republic Act No. 8479, a new deregulation law without the offending provisions of the
earlier law. Petitioner Enrique T. Garcia, a member of Congress, has now brought this petition seeking to declare Section 19 thereof, which
sets the time of full deregulation, unconstitutional. After failing in his attempts to have Congress incorporate in the law the economic theory
he espouses, petitioner now asks us, in the name of upholding the Constitution, to undo a violation which he claims Congress has committed.
The assailed Section 19 of R.A. 8479 states in full:
Sec. 19. Start of Full Deregulation. Full deregulation of the Industry shall start five (5) months following the effectivity
of this Act: Provided, however, That when the public interest so requires, the President may accelerate the start of full
deregulation upon the recommendation of the DOE and the Department of Finance (DOF) when the prices of crude oil
and petroleum products in the world market are declining and the value of the peso in relation to the US dollar is stable,
taking into account relevant trends and prospects; Provided, further, That the foregoing provision notwithstanding, the
five (5)-month Transition Phase shall continue to apply to LPG, regular gasoline and kerosene as socially-sensitive
petroleum products and said petroleum products shall be covered by the automatic pricing mechanism during the said
period.
Upon the implementation of full deregulation as provided herein, the Transition Phase is deemed terminated and the
following laws are repealed:
a) Republic Act No. 6173, as amended;
b) Section 5 of Executive Order No. 172, as amended;
c) Letter of Instruction No. 1431, dated October 15, 1984;
d) Letter of Instruction No. 1441, dated November 20, 1984, as amended;
e) Letter of Instruction No. 1460, dated May 9, 1985;
f) Presidential Decree No. 1889; and
g) Presidential Decree No. 1956, as amended by Executive Order No. 137:
Provided, however, That in case full deregulation is started by the President in the exercise of the authority provided in
this Section, the foregoing laws shall continue to be in force and effect with respect to LPG, regular gasoline and kerosene
for the rest of the five (5)-month period.
Petitioner contends that Section 19 of R.A. 8479, which prescribes the period for the removal of price control on gasoline and other finished
products and for the full deregulation of the local downstream oil industry, is patently contrary to public interest and therefore
unconstitutional because within the short span of five months, the market is still dominated and controlled by an oligopoly of the three (3)
private respondents, namely, Shell, Caltex and Petron.
The objective of the petition is deceptively simple. It states that if the constitutional mandate against monopolies and combinations in
restraint of
trade 2 is to be obeyed, there should be indefinite and open-ended price controls on gasoline and other oil products for as long as necessary.
This will allegedly prevent the "Big 3" Shell, Caltex and Petron from price-fixing and overpricing. Petitioner calls the indefinite
retention of price controls as "partial deregulation".
The grounds relied upon in the petition are:

A.
Sec. 19 OF R.A. NO. 8479 WHICH PROVIDES FOR FULL DEREGULATION FIVE (5) MONTHS OR EARLIER
FOLLOWING THE EFFECTIVITY OF THE LAW, IS GLARINGLY PRO-OLIGOPOLY, ANTI-COMPETITION AND
ANTI-PEOPLE, AND IS THEREFORE PATENTLY UNCONSTITUTIONAL FOR BEING IN GROSS AND CYNICAL
CONTRAVENTION OF THE CONSTITUTIONAL POLICY AND COMMAND EMBODIED IN ARTCLE XII, SECTION
19 OF THE 1987 CONSTITUTION AGAINST MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE.
B.
SAID SECTION 19 OF R.A. No. 8479 IS GLARINGLY PRO-OLIGOPOLY, ANTI-COMPETITION AND ANTI-PEOPLE,
FOR THE FURTHER REASON THAT IT PALPABLY AND CYNICALLY VIOLATES THE VERY OBJECTIVE AND
PURPOSE OF R.A. NO. 8479, WHICH IS TO ENSURE A TRULY COMPETITIVE MARKET UNDER A REGIME OF
FAIR PRICES.
C.
SAID SECTION 19 OF R.A. No. 8479, BEING GLARINGLY PRO-OLIGOPOLY, ANTI-COMPETITION AND ANTIPEOPLE, BEING PATENTLY UNCONSTITUTIONAL AND BEING PALPABLY VIOLATIVE OF THE LAW'S POLICY
AND PURPOSE OF ENSURING A TRULY COMPETITIVE MARKET UNDER A REGIME OF FAIR PRICES, IS A
VERY GRAVE AND GRIEVOUS ABUSE OF DISCRETION ON THE PART OF THE LEGISLATIVE AND EXECUTIVE
BRANCHES OF GOVERNMENT.
D.
PREMATURE FULL DEREGULATION UNDER SECTION 19 OF R.A. NO. 8479 MAY AND SHOULD THEREFORE BE
DECLARED NULL AND VOID EVEN AS THE REST OF ITS PROVISIONS REMAIN IN FORCE, SUCH AS THE
TRANSITION PHASE OR PARTIAL DEREGULATION WITH PRICE CONTROLS THAT ENSURES THE
PROTECTION OF THE PUBLIC INTEREST BY PREVENTING THE BIG 3 OLIGOPOLY'S PRICE-FIXING AND
OVERPRICING. 3
The issues involved in the deregulation of the downstream oil industry are of paramount significance. The ramifications, international and
local in scope, are complex. The impact on the nation's economy is pervasive and far-reaching. The amounts involved in the oil business are
immense. Fluctuations in the supply and price of oil products have a dramatic effect on economic development and public welfare. As pointed
out in the Tatad decision, few cases carry a surpassing importance on the daily life of every Filipino. The issues affect everybody from the
poorest wage-earners and their families to the richest entrepreneurs, from industrial giants to humble consumers.
Our decision in this case is complicated by the unstable oil prices in the world market. Even as this case is pending, the price of OPEC oil is
escalating to record levels. We have to emphasize that our decision has nothing to do with worldwide fluctuations in oil prices and the
counter-measures of Government each time a new development takes place.
The most important part of deregulation is freedom from price control. Indeed, the free play of market forces through deregulation and when
to implement it represent one option to solve the problems of the oil-consuming public. There are other considerations which may be taken
into account such as the reduction of taxes on oil products, the reinstitution of an Oil Price Stabilization Fund, the choice between
government subsidies taken from the regular taxpaying public on one hand and the increased costs being shouldered only by users of oil
products on the other, and most important, the immediate repeal of the oil deregulation law as wrong policy. Petitioner wants the setting of
prices to be done by Government instead of being determined by free market forces. His preference is continued price control with no fixed
end in sight. A simple glance at the factors surrounding the present problems besetting the oil industry shows that they are economic in
nature.
R.A. 8479, the present deregulation law, was enacted to implement Article XII, Section 19 of the Constitution which provides:
The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade
or unfair competition shall be allowed.
This is so because the Government believes that deregulation will eventually prevent monopoly. The simplest form of monopoly exists when
there is only one seller or producer of a product or service for which there are no substitutes. In its more complex form, monopoly is defined as
the joint acquisition or maintenance by members of a conspiracy, formed for that purpose, of the power to control and dominate trade and
commerce in a commodity to such an extent that they are able, as a group, to exclude actual or potential competitors from the field,
accompanied with the intention and purpose to exercise such power.

Where two or three or a few companies act in concert to control market prices and resultant profits, the monopoly is called an oligopoly or
cartel. It is a combination in restraint of trade.
The perennial shortage of oil supply in the Philippines is exacerbated by the further fact that the importation, refining, and marketing of this
precious commodity are in the hands of a cartel, local but made up of foreign-owned corporations. Before the start of deregulation, the three
private respondents controlled the entire oil industry in the Philippines.
It bears reiterating at the outset that the deregulation of the oil industry is a policy determination of the highest order. It is unquestionably a
priority program of Government. The Department of Energy Act of 1992 5 expressly mandates that the development and updating of the
existing Philippine energy program "shall include a policy direction towards deregulation of the power and energy industry."
Be that as it may, we are not concerned with whether or not there should be deregulation. This is outside our jurisdiction. The judgment on
the issue is a settled matter and only Congress can reverse it. Rather, the question that we should address here is are the method and the
manner chosen by Government to accomplish its cherished goal offensive to the Constitution? Is indefinite price control in the manner
proposed by petitioner the only feasible and legal way to achieve it?
Petitioner has taken upon himself a most challenging task. Unquestionably, the direction towards which the nation's efforts at economic and
social upliftment should be addressed is a function of Congress and the President. In the exercise of this function, Congress and the
President have obviously determined that speedy deregulation is the answer to the acknowledged dominion by oligopolistic forces of the oil
industry. Thus, immediately after R.A. 8180 was declared unconstitutional in the Tatad case, Congress took resolute steps to fashion new
legislation towards the objective of the earlier law. Invoking the Constitution, petitioner now wants to slow down the process.
While the Court respects the firm resolve displayed by Congress and the President, all departments of Government are equally bound by the
sovereign will expressed in the commands of the Constitution. There is a need for utmost care if this Court is to faithfully discharge its duties
as arbitral guardian of the Constitution. We cannot encroach on the policy functions of the two other great departments of Government. But
neither can we ignore any overstepping of constitutional limitations. Locating the correct balance between legality and policy, constitutional
boundaries and freedom of action, and validity and expedition is this Court's dilemma as it resolves the legitimacy of a Government program
aimed at giving every Filipino a more secure, fulfilling and abundant life.
Our ruling in Tatad is categorical that the Constitution's Article XII, Section 19, is anti-trust in history and spirit. It espouses competition.
We have stated that only competition which is fair can release the creative forces of the market. We ruled that the principle which underlies
the constitutional provision is competition. Thus:
Sec. 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses competition. The desirability of
competition is the reason for the prohibition against restraint of trade, the reason for the interdiction of unfair
competition, and the reason for regulation of unmitigated monopolies. Competition is thus the underlying principle of
section 19, Article XII of our Constitution which cannot be violated by R.A. No. 8180. We subscribe to the observation of
Prof. Gellhorn that the objective of anti-trust law is "to assure a competitive economy, based upon the belief that through
competition producers will strive to satisfy consumer wants at the lowest price with the sacrifice of the fewest resources.
Competition among producers allows consumers to bid for goods and services, and thus matches their desires with
society's opportunity costs." He adds with appropriateness that there is a reliance upon "the operation of the "market"
system (free enterprise) to decide what shall be produced, how resources shall be allocated in the production process, and
to whom the various products will be distributed. The market system relies on the consumer to decide what and how
much shall be produced, and on competition, among producers to determine who will manufacture it." 6
In his recital of the antecedent circumstances, petitioner repeats in abbreviated form the factual findings and conclusions which led the
Court to declare R.A. 8180 unconstitutional. The foreign oligopoly or cartel formed by respondents Shell, Caltex and Petron, their indulging
in price-fixing and overpricing, their blockade tactics which effectively obstructed the entry of genuine competitors, the dangers posed by the
oil cartel to national security and economic development, and other prevailing sentiments are stated as axiomatic truths. They are repeated
in capsulized context as the current background facts of the present petition.
The empirical existence of this deplorable situation was precisely the reason why Congress enacted the oil deregulation law. The evils arising
from conspiratorial acts of monopoly are recognized as clear and present. But the enumeration of the evils by our Tatad decision was not for
the purpose of justifying continued government control, especially price control. The objective was, rather, the opposite. The evils were
emphasized to show the need for free competition in a deregulated industry. And to be sure, the measures to address these evils are for
Congress to determine, but they have to meet the test of constitutional validity.
The Court respects the legislative finding that deregulation is the policy answer to the problems. It bears stressing that R.A. 8180 was
declared invalid not because deregulation is unconstitutional. The law was struck down because, as crafted, three key provisions plainly
encouraged the continued existence if not the proliferation of the constitutionally proscribed evils of monopoly and restraint of trade.
In sharp contrast, the present petition lacks a factual foundation specifically highlighting the need to declare the challenged provision
unconstitutional. There is a dearth of relevant, reliable, and substantial evidence to support petitioner's theory that price control must

continue even as Government is trying its best to get out of regulating the oil industry. The facts of the petition are, in the main, a general
dissertation on the evils of monopoly.
Petitioner overlooks the fact that Congress enacted the deregulation law exactly because of the monopoly evils he mentions in his petition.
Congress instituted the lifting of price controls in the belief that free and fair competition was the best remedy against monopoly power. In
other words, petitioner's facts are also the reasons why Congress lifted price controls and why the President accelerated the process. The
facts adduced in favor of continued and indefinite price control are the same facts which supported what Congress believes is an exercise of
wisdom and discretion when it chose the path of speedy deregulation and rejected Congressman Garcia's economic theory.
The petition states that it is using the very thoughts and words of the Court in its Tatad decision. Those thoughts and words, however, were
directed against the tariff differential, the inventory requirement, and predatory pricing, not against deregulation as a policy and not against
the lifting of price controls.
A dramatic, at times expansive and grandiloquent, reiteration of the same background circumstances narrated in Tatad does not squarely
sustain petitioner's novel thesis that there can be deregulation without lifting price controls.
Petitioner may call the industry subject to price controls as deregulated. In enacting the challenged provision, Congress, on the other hand,
has declared that any industry whose prices and profits are fixed by government authority remains a highly regulated one.
Petitioner, therefore, engages in a legal paradox. He fails to show how there can be deregulation while retaining government price control.
Deregulation means the lifting of control, governance and direction through rule or regulation. It means that the regulated industry is freed
from the controls, guidance, and restrictions to which it used to be subjected. The use of the word "partial" to qualify deregulation is sugarcoating. Petitioner is really against deregulation at this time.
Petitioner states that price control is good. He claims that it was the regulation of the importation of finished oil products which led to the
exit of competitors and the consolidation and dominion of the market by an oligopoly, not price control. Congress and the President think
otherwise.
The argument that price control is not the villain in the intrusion and growth of monopoly appears to be pure theory not validated by
experience. There can be no denying the fact that the evils mentioned in the petition arose while there was price control. The dominance of
the so-called "Big 3" became entrenched during the regime of price control. More importantly, the ascertainment of the cause and the method
of dismantling the oligopoly thus created are a matter of legislative and executive choice. The judicial process is equipped to handle legality
but not wisdom of choice and the efficacy of solutions.
Petitioner engages in another contradiction when he puts forward what he calls a self-evident truth. He states that a truly competitive
market and fair prices cannot be legislated into existence. However, the truly competitive market is not being created or fashioned by the
challenged legislation. The market is simply freed from legislative controls and allowed to grow and develop free from government
interference. R.A. 8479 actually allows the free play of supply and demand to dictate prices. Petitioner wants a government official or board to
continue performing this task. Indefinite and open-ended price control as advocated by petitioner would be to continue a regime of legislated
regulation where free competition cannot possibly flourish. Control is the antithesis of competition. To grant the petition would mean that the
Government is not keen on allowing a free market to develop. Petitioner's "self-evident truth" thus supports the validity of the provision of
law he opposes.
New players in the oil industry intervened in this case. According to them, it is the free market policy and atmosphere of deregulation which
attracted and brought the new participants, themselves included, into the market. The intervenors express their fear that this Court would
overrule legislative policy and replace it with petitioner's own legislative program.
The factual allegations of the intervenors have not been refuted and we see no reason to doubt them. Their argument that the co-existence of
many viable rivals create free market conditions induces competition in product quality and performance and makes available to consumers
an expanded range of choices cannot be seriously disputed.
On the other hand, the pleadings of public and private respondents both put forth the argument that the challenged provision is a policy
decision of Congress and that the wisdom of the provision is outside the authority of this Court to consider. We agree. As we have ruled in
Morfe v. Mutuc 7:
(I)t is well to remember that this Court, in the language of Justice Laurel, "does not pass upon question or wisdom, justice
or expediency of legislation." As expressed by Justice Tuason: "It is not the province of the courts to supervise legislation
and keep it within the bounds of propriety and common sense. That is primarily and exclusively a legislative concern."
There can be no possible objection then to the observation of Justice Montemayor: "As long as laws do not violate any
Constitutional provision, the Courts merely interpret and apply them regardless of whether or not they are wise or
salutary." For they, according to Justice Labrador, "are not supposed to override legitimate policy and . . . never inquire
into the wisdom of the law."

It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on Elections, that only congressional
power or competence, not the wisdom of the action taken, may be the basis for declaring a statute invalid. This is as it
ought to be: The principle of separation of powers has in the main wisely allocated the respective authority of each
department and confined its jurisdiction to such a sphere. There would then be intrusion not allowable under the
Constitution if on a matter left to the discretion of a coordinate branch, the judiciary would substitute its own. If there be
adherence to the rule of law, as there ought to be, the last offender should be the courts of justice, to which rightly
litigants submit their controversy precisely to maintain unimpaired the supremacy of legal norms and prescriptions. The
attack on the validity of the challenged provision likewise insofar as there may be objections, even if valid and cogent, on
its wisdom cannot be sustained.
In this petition, Congressman Garcia seeks to revive the long settled issue of the timeliness of full deregulation, which issue he had earlier
submitted to this Court by way of a Partial Motion for Reconsideration in the Tatad case. In our Resolution dated December 3, 1997, which
has long become final and executory, we stated:
We shall first resolve petitioner Garcia's linchpin contention that the full deregulation decreed by R.A. No. 8180 to start at
the end of March 1997 is unconstitutional. For prescinding from this premise, petitioner suggests that "we simply go back
to the transition period, price control will be revived through the automatic pricing mechanism based on Singapore Posted
Prices. The Energy Regulatory Board . . . would play a limited and ministerial role of computing the monthly price ceiling
of each and every petroleum fuel product, using the automatic pricing formula. While the OPSF would return, this
coverage would be limited to monthly price increases in excess of P0.50 per liter.
We are not impressed by petitioner Garcia's submission. Petitioner has no basis in condemning as unconstitutional per se
the date fixed by Congress for the beginning of the full deregulation of the downstream oil industry. Our Decision merely
faulted the Executive for factoring the depletion of OPSF in advancing the date of full deregulation to February 1997.
Nonetheless, the error of the Executive is now a non-issue for the full deregulation set by Congress itself at the end of
March 1997 has already come to pass. March 1997 is not an arbitrary date. By that date, the transition period has ended
and it was expected that the people would have adjusted to the role of market forces in shaping the prices of petroleum
and its products. The choice of March 1997 as the date of full deregulation is a judgment of Congress and its judgment
call cannot be impugned by this Court. 8
Reduced to its basic arguments, it can be seen that the challenge in this petition is not against the legality of deregulation. Petitioner does
not expressly challenge deregulation. The issue, quite simply, is the timeliness or the wisdom of the date when full deregulation should be
effective.
In this regard, what constitutes reasonable time is not for judicial determination. Reasonable time involves the appraisal of a great variety of
relevant conditions, political, social and economic. They are not within the appropriate range of evidence in a court of justice. It would be an
extravagant extension of judicial authority to assert judicial notice as the basis for the determination. 9
We repeat that what petitioner decries as unsuccessful is not a final result. It is only a beginning. The Court is not inclined to stifle
deregulation as enacted by Congress from its very start. We leave alone the program of deregulation at this stage. Reasonable time will prove
the wisdom or folly of the deregulation program for which Congress and not the Court is accountable.
Petitioner argues further that the public interest requires price controls while the oligopoly exists, for that is the only way the public can be
protected from monopoly or oligopoly pricing. But is indefinite price control the only feasible and legal way to enforce the constitutional
mandate against oligopolies?
Art. 186 of the Revised Penal Code, as amended, punishes as a felony the creation of monopolies and combinations in restraint of trade. The
Solicitor General, on the other hand, cites provisions of R.A. 8479 intended to prevent competition from being corrupted or manipulated.
Section 11, entitled "Anti-Trust Safeguards", defines and prohibits cartelization and predatory pricing. It penalizes the persons and officers
involved with imprisonment of three (3) to seven (7) years and fines ranging from One million to Two million pesos. For this purpose, a Joint
Task Force from the Department of Energy and Department of Justice is created under Section 14 to investigate and order the prosecution of
violations.
Sec. 8 and 9 of the Act, meanwhile, direct the Departments of Foreign Affairs, Trade and Industry, and Energy to undertake strategies,
incentives and benefits, including international information campaigns, tax holidays and various other agreements and utilizations, to invite
and encourage the entry of new participants. Section 6 provides for uniform tariffs at three percent (3%).
Sec. 13 of the Act provides for "Remedies", under which the filing of actions by government prosecutors and the investigation of private
complaints by the Task Force is provided. Sections 14 and 15 provide how the Department of Energy shall monitor and prevent the
occurrence of collusive pricing in the industry.
It can be seen, therefore, that instead of the price controls advocated by the petitioner, Congress has enacted anti-trust measures which it
believes will promote free and fair competition. Upon the other hand, the disciplined, determined, consistent and faithful execution of the law

is the function of the President. As stated by public respondents, the remedy against unreasonable price increases is not the nullification of
Section 19 of R.A. 8479 but the setting into motion of its various other provisions.
For this Court to declare unconstitutional the key provision around which the law's anti-trust measures are clustered would mean a
constitutionally interdicted distrust of the wisdom of Congress and of the determined exercise of executive power.
Having decided that deregulation is the policy to follow, Congress and the President have the duty to set up the proper and effective
machinery to ensure that it works. This is something which cannot be adjudicated into existence. This Court is only an umpire of last resort
whenever the Constitution or a law appears to have been violated. There is no showing of a constitutional violation in this case.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Bellosillo, Melo, Puno, Kapunan, Mendoza, Quisumbing, Purisima, Pardo, Buena and De Leon, Jr., JJ., concur.
Davide, Jr., C.J., in the result. I also join Mr. Justice Panganiban in his separate opinion.
Vitug, J., in the result.
Panganiban, J., please see Separate Opinion.
Gonzaga-Reyes, J., took no part. Spouse with counsel for intervenors.
Separate Opinions
PANGANIBAN, J., separate opinion;
In essence, deregulation shifts the burden of price control from the government to the "market forces" in order (1) to eliminate government
intervention that may "do more harm than good" 1 and (2) to achieve a truly competitive market of fair prices. 2 It is also aimed at removing
government abuse and corruption in price-setting. At bottom, deregulation is supposed to provide the best goods and services at the cheapest
prices.
The policy, however, is not an infallible cure to abuse, for the evil sought to be avoided may well pass on to the market players, particularly
when they combine to restrain trade or engage in unfair competition. In the words of Prof. Romulo L. Neri of the Asian Institute of
Management, "[t]he marker is motivated by price and profits (and sadly, not by moral values [or public interest]). The market does not
automatically supply those who need (no matter how badly they need it) but only those who have the money to buy." 3
The buzz words of the third millennium are "deregulation," "globalization" and "liberalization." Territorial frontiers are virtually erased by
these schemes, as goods and services are exchanged across borders unhampered by traditional tariffs, taxes, currency controls, quantitative
restrictions and other protective barriers. Thus, states and governments tend to surrender some of their authorities and powers to the
"market" and to the renewed energy of laissez faire, such that the threats to civil liberties and human rights, including economic rights, may
shift from government abuses to the more bedeviling market forces that transcend boundaries and sovereignties. In developing countries
more than in developed ones, such threats are real and ever present.
Judicial Review
to Checks Abuses
This is where the power of judicial review comes in to examine the legal effects of these new economic paradigms and, in the present
controversy, to check whether the present Oil Deregulation Law (RA 8479) restrains rather than promotes free trade, in contravention of the
Constitution. True, the President and Congress, not this Court, have the power and the prerogative to determine whether to adopt such
market policies and, if so, under what conditions and circumstances. However, all such policies and their ramifications must conform to the
Constitution. Otherwise, this Court has the duty to strike them down, not because they are unwise or inconvenient, but because they are
constitutionally impermissible.
Doctrina