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Republic of the Philippines Sec. 21. Tax on citizens or residents.

SUPREME COURT xxx xxx xxx


Manila (f) Simplified Net Income Tax for the Self-Employed and/or Professionals
EN BANC Engaged in the Practice of Profession. A tax is hereby imposed upon the
taxable net income as determined in Section 27 received during each
G.R. No. 109289 October 3, 1994 taxable year from all sources, other than income covered by paragraphs (b),
RUFINO R. TAN, petitioner, (c), (d) and (e) of this section by every individual whether
vs. a citizen of the Philippines or an alien residing in the Philippines who is self-
RAMON R. DEL ROSARIO, JR., as SECRETARY OF FINANCE & JOSE U. ONG, as employed or practices his profession herein, determined in accordance with
COMMISSIONER OF INTERNAL REVENUE, respondents. the following schedule:
G.R. No. 109446 October 3, 1994 Not over P10,000 3%
CARAG, CABALLES, JAMORA AND SOMERA LAW OFFICES, CARLO A. CARAG, Over P10,000 P300 + 9%
MANUELITO O. CABALLES, ELPIDIO C. JAMORA, JR. and BENJAMIN A. SOMERA, but not over P30,000 of excess over P10,000
JR., petitioners, Over P30,000 P2,100 + 15%
vs. but not over P120,00 of excess over P30,000
RAMON R. DEL ROSARIO, in his capacity as SECRETARY OF FINANCE and JOSE U. Over P120,000 P15,600 + 20%
ONG, in his capacity as COMMISSIONER OF INTERNAL REVENUE, respondents. but not over P350,000 of excess over P120,000
Rufino R. Tan for and in his own behalf. Over P350,000 P61,600 + 30%
Carag, Caballes, Jamora & Zomera Law Offices for petitioners in G.R. 109446. of excess over P350,000
Sec. 29. Deductions from gross income. In computing taxable income
VITUG, J.: subject to tax under Sections 21(a), 24(a), (b) and (c); and 25 (a)(1), there
These two consolidated special civil actions for prohibition challenge, in G.R. No. 109289, the shall be allowed as deductions the items specified in paragraphs (a) to (i) of
constitutionality of Republic Act No. 7496, also commonly known as the Simplified Net Income this section: Provided, however, That in computing taxable income subject
Taxation Scheme ("SNIT"), amending certain provisions of the National Internal Revenue Code to tax under Section 21 (f) in the case of individuals engaged in business or
and, in practice of profession, only the following direct costs shall be allowed as
G.R. No. 109446, the validity of Section 6, Revenue Regulations No. 2-93, promulgated by deductions:
public respondents pursuant to said law. (a) Raw materials, supplies and direct labor;
Petitioners claim to be taxpayers adversely affected by the continued implementation of the (b) Salaries of employees directly engaged in activities in the course of or
amendatory legislation. pursuant to the business or practice of their profession;
In G.R. No. 109289, it is asserted that the enactment of Republic Act (c) Telecommunications, electricity, fuel, light and water;
No. 7496 violates the following provisions of the Constitution: (d) Business rentals;
Article VI, Section 26(1) Every bill passed by the Congress shall embrace (e) Depreciation;
only one subject which shall be expressed in the title thereof. (f) Contributions made to the Government and accredited relief
Article VI, Section 28(1) The rule of taxation shall be uniform and organizations for the rehabilitation of calamity stricken areas declared by the
equitable. The Congress shall evolve a progressive system of taxation. President; and
Article III, Section 1 No person shall be deprived of . . . property without (g) Interest paid or accrued within a taxable year on loans contracted from
due process of law, nor shall any person be denied the equal protection of accredited financial institutions which must be proven to have been incurred
the laws. in connection with the conduct of a taxpayer's profession, trade or business.
In G.R. No. 109446, petitioners, assailing Section 6 of Revenue Regulations No. 2-93, argue For individuals whose cost of goods sold and direct costs are difficult to
that public respondents have exceeded their rule-making authority in applying SNIT to general determine, a maximum of forty per cent (40%) of their gross receipts shall
professional partnerships. be allowed as deductions to answer for business or professional expenses
The Solicitor General espouses the position taken by public respondents. as the case may be.
The Court has given due course to both petitions. The parties, in compliance with the Court's On the basis of the above language of the law, it would be difficult to accept petitioner's view that
directive, have filed their respective memoranda. the amendatory law should be considered as having now adopted a gross income, instead of as
G.R. No. 109289 having still retained the netincome, taxation scheme. The allowance for deductible items, it is
Petitioner contends that the title of House Bill No. 34314, progenitor of Republic Act No. 7496, is true, may have significantly been reduced by the questioned law in comparison with that which
a misnomer or, at least, deficient for being merely entitled, "Simplified Net Income Taxation has prevailed prior to the amendment; limiting, however, allowable deductions from gross
Scheme for the Self-Employed income is neither discordant with, nor opposed to, the net income tax concept. The fact of the
and Professionals Engaged in the Practice of their Profession" (Petition in G.R. No. 109289). matter is still that various deductions, which are by no means inconsequential, continue to be
The full text of the title actually reads: well provided under the new law.
An Act Adopting the Simplified Net Income Taxation Scheme For The Self- Article VI, Section 26(1), of the Constitution has been envisioned so as (a) to prevent log-rolling
Employed and Professionals Engaged In The Practice of Their Profession, legislation intended to unite the members of the legislature who favor any one of unrelated
Amending Sections 21 and 29 of the National Internal Revenue Code, as subjects in support of the whole act, (b) to avoid surprises or even fraud upon the legislature,
Amended. and (c) to fairly apprise the people, through such publications of its proceedings as are usually
The pertinent provisions of Sections 21 and 29, so referred to, of the National Internal Revenue made, of the subjects of legislation. 1 The above objectives of the fundamental law appear to us
Code, as now amended, provide:
to have been sufficiently met. Anything else would be to require a virtual compendium of the law individuals who are earning, I mean, who earn through
which could not have been the intendment of the constitutional mandate. business enterprises and therefore, should file an
Petitioner intimates that Republic Act No. 7496 desecrates the constitutional requirement that income tax return?
taxation "shall be uniform and equitable" in that the law would now attempt to tax single MR. PEREZ. That is correct, Mr. Speaker. This does
proprietorships and professionals differently from the manner it imposes the tax on corporations not apply to corporations. It applies only to individuals.
and partnerships. The contention clearly forgets, however, that such a system of income taxation (See Deliberations on H. B. No. 34314, August 6, 1991, 6:15 P.M.;
has long been the prevailing rule even prior to Republic Act No. 7496. Emphasis ours).
Uniformity of taxation, like the kindred concept of equal protection, merely requires that all Other deliberations support this position, to wit:
subjects or objects of taxation, similarly situated, are to be treated alike both in privileges and MR. ABAYA . . . Now, Mr. Speaker, did I hear the
liabilities (Juan Luna Subdivision vs. Sarmiento, 91 Phil. 371). Uniformity does not forfend Gentleman from Batangas say that this bill is intended
classification as long as: (1) the standards that are used therefor are substantial and not to increase collections as far as individuals are
arbitrary, (2) the categorization is germane to achieve the legislative purpose, (3) the law concerned and to make collection of taxes equitable?
applies, all things being equal, to both present and future conditions, and (4) the classification MR. PEREZ. That is correct, Mr. Speaker.
applies equally well to all those belonging to the same class (Pepsi Cola vs. City of Butuan, 24 (Id. at 6:40 P.M.; Emphasis ours).
SCRA 3; Basco vs. PAGCOR, 197 SCRA 52). In fact, in the sponsorship speech of Senator Mamintal Tamano on the
What may instead be perceived to be apparent from the amendatory law is the legislative intent Senate version of the SNITS, it is categorically stated, thus:
to increasingly shift the income tax system towards the schedular approach 2 in the income This bill, Mr. President, is not applicable to business
taxation of individual taxpayers and to maintain, by and large, the present global treatment 3 on corporations or to partnerships; it is only with respect to
taxable corporations. We certainly do not view this classification to be arbitrary and individuals and professionals. (Emphasis ours)
inappropriate. The Court, first of all, should like to correct the apparent misconception that general professional
Petitioner gives a fairly extensive discussion on the merits of the law, illustrating, in the process, partnerships are subject to the payment of income tax or that there is a difference in the tax
what he believes to be an imbalance between the tax liabilities of those covered by the treatment between individuals engaged in business or in the practice of their respective
amendatory law and those who are not. With the legislature primarily lies the discretion to professions and partners in general professional partnerships. The fact of the matter is that a
determine the nature (kind), object (purpose), extent (rate), coverage (subjects) and situs (place) general professional partnership, unlike an ordinary business partnership (which is treated as a
of taxation. This court cannot freely delve into those matters which, by constitutional fiat, rightly corporation for income tax purposes and so subject to the corporate income tax), is not itself an
rest on legislative judgment. Of course, where a tax measure becomes so unconscionable and income taxpayer. The income tax is imposed not on the professional partnership, which is tax
unjust as to amount to confiscation of property, courts will not hesitate to strike it down, for, exempt, but on the partners themselves in their individual capacity computed on their distributive
despite all its plenitude, the power to tax cannot override constitutional proscriptions. This stage, shares of partnership profits. Section 23 of the Tax Code, which has not been amended at all by
however, has not been demonstrated to have been reached within any appreciable distance in Republic Act 7496, is explicit:
this controversy before us. Sec. 23. Tax liability of members of general professional partnerships. (a)
Having arrived at this conclusion, the plea of petitioner to have the law declared unconstitutional Persons exercising a common profession in general partnership shall be
for being violative of due process must perforce fail. The due process clause may correctly be liable for income tax only in their individual capacity, and the share in the net
invoked only when there is a clear contravention of inherent or constitutional limitations in the profits of the general professional partnership to which any taxable partner
exercise of the tax power. No such transgression is so evident to us. would be entitled whether distributed or otherwise, shall be returned for
G.R. No. 109446 taxation and the tax paid in accordance with the provisions of this Title.
The several propositions advanced by petitioners revolve around the question of whether or not (b) In determining his distributive share in the net income of the partnership,
public respondents have exceeded their authority in promulgating Section 6, Revenue each partner
Regulations No. 2-93, to carry out Republic Act No. 7496. (1) Shall take into account separately his distributive
The questioned regulation reads: share of the partnership's income, gain, loss, deduction,
Sec. 6. General Professional Partnership The general professional or credit to the extent provided by the pertinent
partnership (GPP) and the partners comprising the GPP are covered by R. provisions of this Code, and
A. No. 7496. Thus, in determining the net profit of the partnership, only the (2) Shall be deemed to have elected the itemized
direct costs mentioned in said law are to be deducted from partnership deductions, unless he declares his distributive share of
income. Also, the expenses paid or incurred by partners in their individual the gross income undiminished by his share of the
capacities in the practice of their profession which are not reimbursed or deductions.
paid by the partnership but are not considered as direct cost, are not There is, then and now, no distinction in income tax liability between a person who practices his
deductible from his gross income. profession alone or individually and one who does it through partnership (whether registered or
The real objection of petitioners is focused on the administrative interpretation of public not) with others in the exercise of a common profession. Indeed, outside of the gross
respondents that would apply SNIT to partners in general professional partnerships. Petitioners compensation income tax and the final tax on passive investment income, under the present
cite the pertinent deliberations in Congress during its enactment of Republic Act No. 7496, also income tax system all individuals deriving income from any source whatsoever are treated in
quoted by the Honorable Hernando B. Perez, minority floor leader of the House of almost invariably the same manner and under a common set of rules.
Representatives, in the latter's privilege speech by way of commenting on the questioned We can well appreciate the concern taken by petitioners if perhaps we were to consider
implementing regulation of public respondents following the effectivity of the law, thusly: Republic Act No. 7496 as an entirely independent, not merely as an amendatory, piece of
MR. ALBANO, Now Mr. Speaker, I would like to get the legislation. The view can easily become myopic, however, when the law is understood, as it
correct impression of this bill. Do we speak here of should be, as only forming part of, and subject to, the whole income tax concept and precepts
long obtaining under the National Internal Revenue Code. To elaborate a little, the phrase
"income taxpayers" is an all embracing term used in the Tax Code, and it practically covers all 1 Article VI, Section 26(1) Every bill passed by the Congress shall embrace
persons who derive taxable income. The law, in levying the tax, adopts the most comprehensive only one subject which shall be expressed in the title thereof.
tax situs of nationality and residence of the taxpayer (that renders citizens, regardless of - The title of the bill "Simplified Net Income Taxation Scheme for the Self-
residence, and resident aliens subject to income tax liability on their income from all sources) Employed
and of the generally accepted and internationally recognized income taxable base (that can and Professionals Engaged in the Practice of their Profession" is a misnomer
subject non-resident aliens and foreign corporations to income tax on their income from
Philippine sources). In the process, the Code classifies taxpayers into four main groups, namely: Court:
(1) Individuals, (2) Corporations, (3) Estates under Judicial Settlement and (4) Irrevocable Trusts
- The full text title of the bill is An Act Adopting the Simplified Net Income
(irrevocable both as to corpusand as to income).
Taxation Scheme For The Self-Employed and Professionals Engaged In The
Partnerships are, under the Code, either "taxable partnerships" or "exempt
Practice of Their Profession, Amending Sections 21 and 29 of the National
partnerships." Ordinarily, partnerships, no matter how created or organized, are subject to
Internal Revenue Code, as Amended
income tax (and thus alluded to as "taxable partnerships") which, for purposes of the above
- Amended Sec. 21 of the National Internal Revenue Code speaks of imposing
categorization, are by law assimilated to be within the context of, and so legally contemplated tax on taxable net income received from all sources of self-employed/
as, corporations. Except for few variances, such as in the application of the "constructive receipt practicing professionals while Sec. 29 speaks of the allowed deductions
rule" in the derivation of income, the income tax approach is alike to both juridical persons. from gross income of the said group of people. However, deductible items
Obviously, SNIT is not intended or envisioned, as so correctly pointed out in the discussions in on income are now more limited as compared to the law before the said
Congress during its deliberations on Republic Act 7496, aforequoted, to cover corporations and amendment.
partnerships which are independently subject to the payment of income tax. - Petitioner contends that the law now impose taxes on gross as opposed to
"Exempt partnerships," upon the other hand, are not similarly identified as corporations nor even net income.
considered as independent taxable entities for income tax purposes. A - Court held that limiting the deductible items is still within the purview of
general professional partnership is such an example. 4Here, the partners themselves, not the the concept of net income. It is still income less the expenses and then the
partnership (although it is still obligated to file an income tax return [mainly for administration and remaining amount determines the tax to be paid. The amendment just
data]), are liable for the payment of income tax in their individual capacity computed on their limited the items that fall under the expenses.
respective and distributive shares of profits. In the determination of the tax liability, a partner - The objectives of the law on bill titles are: (a) to prevent log-rolling
does so as an individual, and there is no choice on the matter. In fine, under the Tax Code on legislation intended to unite the members of the legislature who favor any
income taxation, the general professional partnership is deemed to be no more than a mere one of unrelated subjects in support of the whole act, (b) to avoid surprises
mechanism or a flow-through entity in the generation of income by, and the ultimate distribution or even fraud upon the legislature, and (c) to fairly apprise the people,
of such income to, respectively, each of the individual partners. through such publications of its proceedings as are usually made, of the
Section 6 of Revenue Regulation No. 2-93 did not alter, but merely confirmed, the above subjects of legislation. The above objectives of the fundamental law appear
standing rule as now so modified by Republic Act to us to have been sufficiently met.
No. 7496 on basically the extent of allowable deductions applicable to all individual income
taxpayers on their non-compensation income. There is no evident intention of the law, either 2 Petitioner contends that the law would now attempt to tax single
proprietorships and professionals differently from the manner it imposes
before or after the amendatory legislation, to place in an unequal footing or in significant
the tax on corporations and partnerships violating the ff. constitutional
variance the income tax treatment of professionals who practice their respective professions
provisions:
individually and of those who do it through a general professional partnership.
Article VI, Section 28(1) The rule of taxation shall be uniform and
WHEREFORE, the petitions are DISMISSED. No special pronouncement on costs.
equitable. The Congress shall evolve a progressive system of taxation.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno,
Article III, Section 1 No person shall be deprived of . . . property without
Kapunan and Mendoza, JJ., concur.
due process of law, nor shall any person be denied the equal protection of
Padilla and Bidin, JJ., are on leave.
the laws.

Tan vs. Del Rosario Jr. Court:


Consolidated petitions assailing the constitutionality of RA No. 7496 or Simplified Net
Income Taxation Scheme (SNIT). - Uniformity in taxation means those that are similarly situated are to be
ISSUES: treated alike. There is uniformity as long as: (1) the standards that are
used therefor are substantial and not arbitrary, (2) the categorization is
1 WON RA 7496 is unconstitutional (G.R. No. 109289) germane to achieve the legislative purpose, (3) the law applies, all things
2 WON in RA 7496, respondents have exceeded their rule making authority in being equal, to both present and future conditions, and (4) the classification
applying it to general professional partnerships (G.R. No. 109446) applies equally well to all those belonging to the same class
- The court does not view the classification in this instance as arbitrary or
HOLDING AND RATIO: inappropriate. Moreover, the legislature has the discretion to determine the
ISSUE #1 (G.R. No. 109289): NO. The RA did not violate any constitutional nature (kind), object (purpose), extent (rate), coverage (subjects)
provision. and situs (place) of taxation. The Court only intervenes when there is a
Petitioner: The said law violates the ff. provisions of the 3 Constitutional provisions: violation of the constitution, which in this case there is none.
ISSUE # 2 (G.R. No. 109446): NO. Respondents did not exceed authority. private parties, for canteen and small store spaces, and to medical or professional
- Petitioners revolve around the question of whether or not public respondents have practitioners who use the same as their private clinics for their patients whom they
exceeded their authority in promulgating Section 6, Revenue Regulations No. 2-93, charge for their professional services. Almost one-half of the entire area on the left
to carry out Republic Act No. 7496. This is anchored on the administrative side of the building along Quezon Avenue is vacant and idle, while a big portion on
interpretation of public respondents that would apply SNIT to partners in general the right side, at the corner of Quezon Avenue and Elliptical Road, is being leased for
professional partnerships. commercial purposes to a private enterprise known as the Elliptical Orchids
- Petitioners cited the deliberations in the HOR regarding the implementation of the and Garden Center.
said rule in which it was shown that framers did not intend for the bill to be The petitioner accepts paying and non-paying patients. It also renders medical
applicable to business corporations or partnerships. services to out-patients, both paying and non-paying. Aside from its income from
Court: paying patients, the petitioner receives annual subsidies from the government.
On June 7, 1993, both the land and the hospital building of the petitioner were
- A business partnership itself is not a taxpayer, the income tax is imposed assessed for real property taxes in the amount of P4,554,860 by the City Assessor of
on the partners themselves in their individual capacity which is computed Quezon City.[3]Accordingly, Tax Declaration Nos. C-021-01226 (16-2518) and C-021-
on their distributive shares of partnership profits. 01231 (15-2518-A) were issued for the land and the hospital building, respectively.
- There is, then and now, no distinction in income tax liability between a [4]
On August 25, 1993, the petitioner filed a Claim for Exemption [5] from real
person who practices his profession alone or individually and one who does property taxes with the City Assessor, predicated on its claim that it is a charitable
it through partnership (whether registered or not) with others in the institution. The petitioners request was denied, and a petition was, thereafter, filed
exercise of a common profession. before the Local Board of Assessment Appeals of Quezon City (QC-LBAA, for brevity)
- RA 7496 should be takes as an amendatory legislation which is still under for the reversal of the resolution of the City Assessor. The petitioner alleged that
the National Internal Revenue Code. Under such code income taxpayers under Section 28, paragraph 3 of the 1987 Constitution, the property is exempt from
cover all persons with taxable income. It classifies taxpayers into: (1) real property taxes. It averred that a minimum of 60% of its hospital beds are
Individuals, (2) Corporations, (3) Estates under Judicial Settlement and (4) exclusively used for charity patients and that the major thrust of its hospital
Irrevocable Trusts (irrevocable both as to corpus and as to income). operation is to serve charity patients. The petitioner contends that it is a charitable
o Partnerships are, no matter how created or organized, are subject institution and, as such, is exempt from real property taxes. The QC-LBAA rendered
to income tax (and thus alluded to as "taxable partnerships") judgment dismissing the petition and holding the petitioner liable for real property
which, for purposes of the above categorization, are by law taxes.[6]
assimilated to be within the context of, and so legally The QC-LBAAs decision was, likewise, affirmed on appeal by the Central Board of
contemplated as, corporations. Assessment Appeals of Quezon City (CBAA, for brevity)[7] which ruled that the
o SNIT is not intended to cover corporations and partnerships which petitioner was not a charitable institution and that its real properties were not
are independently subject to the payment of income tax. actually, directly and exclusively used for charitable purposes; hence, it was not
o SNIT speaks of general professional partnership which focuses on entitled to real property tax exemption under the constitution and the law. The
the partners themselves as individuals and not on the partnership. petitioner sought relief from the Court of Appeals, which rendered judgment
affirming the decision of the CBAA.[8]
WHEREFORE, the petitions are DISMISSED. No special pronouncement on Undaunted, the petitioner filed its petition in this Court contending that:
costs. SO ORDERED. A. THE COURT A QUO ERRED IN DECLARING PETITIONER AS NOT ENTITLED TO
REALTY TAX EXEMPTIONS ON THE GROUND THAT ITS LAND, BUILDING AND
IMPROVEMENTS, SUBJECT OF ASSESSMENT, ARE NOT ACTUALLY, DIRECTLY AND
EN BANC EXCLUSIVELY DEVOTED FOR CHARITABLE PURPOSES.
[G.R. No. 144104. June 29, 2004] B. WHILE PETITIONER IS NOT DECLARED AS REAL PROPERTY TAX EXEMPT UNDER ITS
LUNG CENTER OF THE PHILIPPINES, petitioner, vs. QUEZON CITY and CHARTER, PD 1823, SAID EXEMPTION MAY NEVERTHELESS BE EXTENDED UPON
CONSTANTINO P. ROSAS, in his capacity as City Assessor of Quezon PROPER APPLICATION.
City,respondents. The petitioner avers that it is a charitable institution within the context of Section
DECISION 28(3), Article VI of the 1987 Constitution. It asserts that its character as a charitable
CALLEJO, SR., J.: institution is not altered by the fact that it admits paying patients and renders
This is a petition for review on certiorari under Rule 45 of the Rules of Court, as medical services to them, leases portions of the land to private parties, and rents
amended, of the Decision[1] dated July 17, 2000 of the Court of Appeals in CA-G.R. SP out portions of the hospital to private medical practitioners from which it derives
No. 57014 which affirmed the decision of the Central Board of Assessment Appeals income to be used for operational expenses. The petitioner points out that for the
holding that the lot owned by the petitioner and its hospital building constructed years 1995 to 1999, 100% of its out-patients were charity patients and of the
thereon are subject to assessment for purposes of real property tax. hospitals 282-bed capacity, 60% thereof, or 170 beds, is allotted to charity
The Antecedents patients. It asserts that the fact that it receives subsidies from the government
The petitioner Lung Center of the Philippines is a non-stock and non-profit entity attests to its character as a charitable institution. It contends that the exclusivity
established on January 16, 1981 by virtue of Presidential Decree No. 1823.[2] It is the required in the Constitution does not necessarily mean solely. Hence, even if a
registered owner of a parcel of land, particularly described as Lot No. RP-3-B-3A-1-B- portion of its real estate is leased out to private individuals from whom it derives
1, SWO-04-000495, located at Quezon Avenue corner Elliptical Road, Central District, income, it does not lose its character as a charitable institution, and its exemption
Quezon City. The lot has an area of 121,463 square meters and is covered by from the payment of real estate taxes on its real property. The petitioner cited our
Transfer Certificate of Title (TCT) No. 261320 of the Registry of Deeds of Quezon ruling in Herrera v. QC-BAA[9] to bolster its pose. The petitioner further contends that
City. Erected in the middle of the aforesaid lot is a hospital known as
the Lung Center of the Philippines. A big space at the ground floor is being leased to
even if P.D. No. 1823 does not exempt it from the payment of real estate taxes, it is the happiness of man.[13] The word charitable is not restricted to relief of the poor or
not precluded from seeking tax exemption under the 1987 Constitution. sick.[14] The test of a charity and a charitable organization are in law the same. The
In their comment on the petition, the respondents aver that the petitioner is not a test whether an enterprise is charitable or not is whether it exists to carry out a
charitable entity. The petitioners real property is not exempt from the payment of purpose reorganized in law as charitable or whether it is maintained for gain, profit,
real estate taxes under P.D. No. 1823 and even under the 1987 Constitution because or private advantage.
it failed to prove that it is a charitable institution and that the said property is Under P.D. No. 1823, the petitioner is a non-profit and non-stock corporation which,
actually, directly and exclusively used for charitable purposes. The respondents subject to the provisions of the decree, is to be administered by the Office of the
noted that in a newspaper report, it appears that graft charges were filed with the President of thePhilippines with the Ministry of Health and the Ministry of Human
Sandiganbayan against the director of the petitioner, its administrative officer, and Settlements. It was organized for the welfare and benefit of the Filipino people
Zenaida Rivera, the proprietress of the Elliptical Orchids and Garden Center, for principally to help combat the high incidence of lung and pulmonary diseases in
entering into a lease contract over 7,663.13 square meters of the property in 1990 the Philippines. The raison detre for the creation of the petitioner is stated in the
for only P20,000 a month, when the monthly rental should be P357,000 a month as decree, viz:
determined by the Commission on Audit; and that instead of complying with the Whereas, for decades, respiratory diseases have been a priority concern, having
directive of the COA for the cancellation of the contract for being grossly prejudicial been the leading cause of illness and death in the Philippines, comprising more than
to the government, the petitioner renewed the same on March 13, 1995 for a 45% of the total annual deaths from all causes, thus, exacting a tremendous toll on
monthly rental of only P24,000. They assert that the petitioner uses the subsidies human resources, which ailments are likely to increase and degenerate into serious
granted by the government for charity patients and uses the rest of its income from lung diseases on account of unabated pollution, industrialization and unchecked
the property for the benefit of paying patients, among other purposes. They aver cigarette smoking in the country;
that the petitioner failed to adduce substantial evidence that 100% of its out- Whereas, the more common lung diseases are, to a great extent, preventable, and
patients and 170 beds in the hospital are reserved for indigent patients. The curable with early and adequate medical care, immunization and through prompt
respondents further assert, thus: and intensive prevention and health education programs;
13. That the claims/allegations of the Petitioner LCP do not speak well of its record of Whereas, there is an urgent need to consolidate and reinforce existing programs,
service. That before a patient is admitted for treatment in the Center, first strategies and efforts at preventing, treating and rehabilitating people affected by
impression is that it is pay-patient and required to pay a certain amount as lung diseases, and to undertake research and training on the cure and prevention of
deposit. That even if a patient is living below the poverty line, he is charged with lung diseases, through a Lung Center which will house and nurture the above and
high hospital bills. And, without these bills being first settled, the poor patient related activities and provide tertiary-level care for more difficult and problematical
cannot be allowed to leave the hospital or be discharged without first paying the cases;
hospital bills or issue a promissory note guaranteed and indorsed by an influential Whereas, to achieve this purpose, the Government intends to provide material and
agency or person known only to the Center; that even the remains of deceased poor financial support towards the establishment and maintenance of a Lung Center for
patients suffered the same fate. Moreover, before a patient is admitted for the welfare and benefit of the Filipino people.[15]
treatment as free or charity patient, one must undergo a series of interviews and The purposes for which the petitioner was created are spelled out in its Articles of
must submit all the requirements needed by the Center, usually accompanied by Incorporation, thus:
endorsement by an influential agency or person known only to the Center. These SECOND: That the purposes for which such corporation is formed are as follows:
facts were heard and admitted by the Petitioner LCP during the hearings before the 1. To construct, establish, equip, maintain, administer and conduct an integrated
Honorable QC-BAA and Honorable CBAA. These are the reasons of indigent patients, medical institution which shall specialize in the treatment, care, rehabilitation and/or
instead of seeking treatment with the Center, they prefer to be treated at the relief of lung and allied diseases in line with the concern of the government to assist
Quezon Institute. Can such practice by the Center be called charitable? [10] and provide material and financial support in the establishment and maintenance of
The Issues a lung center primarily to benefit the people of the Philippines and in pursuance of
The issues for resolution are the following: (a) whether the petitioner is a charitable the policy of the State to secure the well-being of the people by providing them
institution within the context of Presidential Decree No. 1823 and the 1973 and 1987 specialized health and medical services and by minimizing the incidence of lung
Constitutions and Section 234(b) of Republic Act No. 7160; and (b) whether the real diseases in the country and elsewhere.
properties of the petitioner are exempt from real property taxes. 2. To promote the noble undertaking of scientific research related to the prevention
The Courts Ruling of lung or pulmonary ailments and the care of lung patients, including the holding of
The petition is partially granted. a series of relevant congresses, conventions, seminars and conferences;
On the first issue, we hold that the petitioner is a charitable institution within the 3. To stimulate and, whenever possible, underwrite scientific researches on the
context of the 1973 and 1987 Constitutions. To determine whether an enterprise is a biological, demographic, social, economic, eugenic and physiological aspects of lung
charitable institution/entity or not, the elements which should be considered include or pulmonary diseases and their control; and to collect and publish the findings of
the statute creating the enterprise, its corporate purposes, its constitution and by- such research for public consumption;
laws, the methods of administration, the nature of the actual work performed, the 4. To facilitate the dissemination of ideas and public acceptance of information on
character of the services rendered, the indefiniteness of the beneficiaries, and the lung consciousness or awareness, and the development of fact-finding, information
use and occupation of the properties.[11] and reporting facilities for and in aid of the general purposes or objects aforesaid,
In the legal sense, a charity may be fully defined as a gift, to be applied consistently especially in human lung requirements, general health and physical fitness, and
with existing laws, for the benefit of an indefinite number of persons, either by other relevant or related fields;
bringing their minds and hearts under the influence of education or religion, by 5. To encourage the training of physicians, nurses, health officers, social workers and
assisting them to establish themselves in life or otherwise lessening the burden of medical and technical personnel in the practical and scientific implementation of
government.[12] It may be applied to almost anything that tend to promote the well- services to lung patients;
doing and well-being of social man. It embraces the improvement and promotion of
6. To assist universities and research institutions in their studies about lung diseases, an asylum of any kind confined to the reception of objects of charity; and that their
to encourage advanced training in matters of the lung and related fields and to honest pride is much less wounded by being placed in an institution in which paying
support educational programs of value to general health; patients are also received. The fact of receiving money from some of the patients
7. To encourage the formation of other organizations on the national, provincial does not, we think, at all impair the character of the charity, so long as the money
and/or city and local levels; and to coordinate their various efforts and activities for thus received is devoted altogether to the charitable object which the institution is
the purpose of achieving a more effective programmatic approach on the common intended to further.[22]
problems relative to the objectives enumerated herein; The money received by the petitioner becomes a part of the trust fund and must be
8. To seek and obtain assistance in any form from both international and local devoted to public trust purposes and cannot be diverted to private profit or benefit.
[23]
foundations and organizations; and to administer grants and funds that may be
given to the organization; Under P.D. No. 1823, the petitioner is entitled to receive donations. The petitioner
9. To extend, whenever possible and expedient, medical services to the public and, does not lose its character as a charitable institution simply because the gift or
in general, to promote and protect the health of the masses of our people, which has donation is in the form of subsidies granted by the government. As held by the State
long been recognized as an economic asset and a social blessing; Supreme Court of Utah in Yorgason v. County Board of Equalization of Salt Lake
10. To help prevent, relieve and alleviate the lung or pulmonary afflictions and County:[24]
maladies of the people in any and all walks of life, including those who are poor and Second, the government subsidy payments are provided to the project. Thus, those
needy, all without regard to or discrimination, because of race, creed, color or payments are like a gift or donation of any other kind except they come from the
political belief of the persons helped; and to enable them to obtain treatment when government. In both Intermountain Health Care and the present case, the crux is the
such disorders occur; presence or absence of material reciprocity. It is entirely irrelevant to this analysis
11. To participate, as circumstances may warrant, in any activity designed and that the government, rather than a private benefactor, chose to make up the deficit
carried on to promote the general health of the community; resulting from the exchange between St. Marks Tower and the tenants by making a
12. To acquire and/or borrow funds and to own all funds or equipment, educational contribution to the landlord, just as it would have been irrelevant in Intermountain
materials and supplies by purchase, donation, or otherwise and to dispose of and Health Care if the patients income supplements had come from private individuals
distribute the same in such manner, and, on such basis as the Center shall, from rather than the government.
time to time, deem proper and best, under the particular circumstances, to serve its Therefore, the fact that subsidization of part of the cost of furnishing such housing is
general and non-profit purposes and objectives; by the government rather than private charitable contributions does not dictate the
13. To buy, purchase, acquire, own, lease, hold, sell, exchange, transfer and dispose denial of a charitable exemption if the facts otherwise support such an exemption,
of properties, whether real or personal, for purposes herein mentioned; and as they do here.[25]
14. To do everything necessary, proper, advisable or convenient for the In this case, the petitioner adduced substantial evidence that it spent its income,
accomplishment of any of the powers herein set forth and to do every other act and including the subsidies from the government for 1991 and 1992 for its patients and
thing incidental thereto or connected therewith. [16] for the operation of the hospital. It even incurred a net loss in 1991 and 1992 from
Hence, the medical services of the petitioner are to be rendered to the public in its operations.
general in any and all walks of life including those who are poor and the needy Even as we find that the petitioner is a charitable institution, we hold, anent the
without discrimination.After all, any person, the rich as well as the poor, may fall sick second issue, that those portions of its real property that are leased to private
or be injured or wounded and become a subject of charity.[17] entities are not exempt from real property taxes as these are not actually, directly
As a general principle, a charitable institution does not lose its character as such and and exclusively used for charitable purposes.
its exemption from taxes simply because it derives income from paying patients, The settled rule in this jurisdiction is that laws granting exemption from tax are
whether out-patient, or confined in the hospital, or receives subsidies from the construed strictissimi juris against the taxpayer and liberally in favor of the taxing
government, so long as the money received is devoted or used altogether to the power. Taxation is the rule and exemption is the exception. The effect of an
charitable object which it is intended to achieve; and no money inures to the private exemption is equivalent to an appropriation. Hence, a claim for exemption from tax
benefit of the persons managing or operating the institution.[18] In Congregational payments must be clearly shown and based on language in the law too plain to be
Sunday School, etc. v. Board of Review,[19] the State Supreme Court of Illinois held, mistaken.[26] As held in Salvation Army v. Hoehn:[27]
thus: An intention on the part of the legislature to grant an exemption from the taxing
[A]n institution does not lose its charitable character, and consequent exemption power of the state will never be implied from language which will admit of any other
from taxation, by reason of the fact that those recipients of its benefits who are able reasonable construction. Such an intention must be expressed in clear and
to pay are required to do so, where no profit is made by the institution and the unmistakable terms, or must appear by necessary implication from the language
amounts so received are applied in furthering its charitable purposes, and those used, for it is a well settled principle that, when a special privilege or exemption is
benefits are refused to none on account of inability to pay therefor. The fundamental claimed under a statute, charter or act of incorporation, it is to be construed strictly
ground upon which all exemptions in favor of charitable institutions are based is the against the property owner and in favor of the public. This principle applies with
benefit conferred upon the public by them, and a consequent relief, to some extent, peculiar force to a claim of exemption from taxation . [28]
of the burden upon the state to care for and advance the interests of its citizens. [20] Section 2 of Presidential Decree No. 1823, relied upon by the petitioner, specifically
As aptly stated by the State Supreme Court of South Dakota in Lutheran Hospital provides that the petitioner shall enjoy the tax exemptions and privileges:
Association of South Dakota v. Baker:[21] SEC. 2. TAX EXEMPTIONS AND PRIVILEGES. Being a non-profit, non-stock corporation
[T]he fact that paying patients are taken, the profits derived from attendance upon organized primarily to help combat the high incidence of lung and pulmonary
these patients being exclusively devoted to the maintenance of the charity, seems diseases in the Philippines, all donations, contributions, endowments and equipment
rather to enhance the usefulness of the institution to the poor; for it is a matter of and supplies to be imported by authorized entities or persons and by the Board of
common observation amongst those who have gone about at all amongst the Trustees of the Lung Center of the Philippines, Inc., for the actual use and benefit of
suffering classes, that the deserving poor can with difficulty be persuaded to enter the Lung Center, shall be exempt from income and gift taxes, the same further
deductible in full for the purpose of determining the maximum deductible amount In light of the foregoing substantial changes in the Constitution, the petitioner
under Section 30, paragraph (h), of the National Internal Revenue Code, as cannot rely on our ruling in Herrera v. Quezon City Board of Assessment
amended. Appeals which was promulgated on September 30, 1961 before the 1973 and 1987
The Lung Center of the Philippines shall be exempt from the payment of taxes, Constitutions took effect.[38] As this Court held in Province of Abra v. Hernando:[39]
charges and fees imposed by the Government or any political subdivision or Under the 1935 Constitution: Cemeteries, churches, and parsonages or convents
instrumentality thereof with respect to equipment purchases made by, or for appurtenant thereto, and all lands, buildings, and improvements used exclusively for
the Lung Center.[29] religious, charitable, or educational purposes shall be exempt from taxation. The
It is plain as day that under the decree, the petitioner does not enjoy any property present Constitution added charitable institutions, mosques, and non-profit
tax exemption privileges for its real properties as well as the building constructed cemeteries and required that for the exemption of lands, buildings, and
thereon. If the intentions were otherwise, the same should have been among the improvements, they should not only be exclusively but also actually and directly
enumeration of tax exempt privileges under Section 2: used for religious or charitable purposes. The Constitution is worded differently. The
It is a settled rule of statutory construction that the express mention of one person, change should not be ignored. It must be duly taken into consideration. Reliance on
thing, or consequence implies the exclusion of all others. The rule is expressed in past decisions would have sufficed were the words actually as well as directly not
the familiar maxim, expressio unius est exclusio alterius. added. There must be proof therefore of the actual and direct use of the lands,
The rule of expressio unius est exclusio alterius is formulated in a number of buildings, and improvements for religious or charitable purposes to be exempt from
ways. One variation of the rule is principle that what is expressed puts an end to taxation.
that which is implied. Expressium facit cessare tacitum. Thus, where a statute, by its Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled
terms, is expressly limited to certain matters, it may not, by interpretation or to the exemption, the petitioner is burdened to prove, by clear and unequivocal
construction, be extended to other matters. proof, that (a) it is a charitable institution; and (b) its real properties
... are ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable
The rule of expressio unius est exclusio alterius and its variations are canons of purposes. Exclusive is defined as possessed and enjoyed to the exclusion of others;
restrictive interpretation. They are based on the rules of logic and the natural debarred from participation or enjoyment; and exclusively is defined,
workings of the human mind. They are predicated upon ones own voluntary act and in a manner to exclude; as enjoying a privilege exclusively.[40] If real property is used
not upon that of others. They proceed from the premise that the legislature would for one or more commercial purposes, it is not exclusively used for the exempted
not have made specified enumeration in a statute had the intention been not to purposes but is subject to taxation.[41] The words dominant use or principal use
restrict its meaning and confine its terms to those expressly mentioned. [30] cannot be substituted for the words used exclusively without doing violence to the
The exemption must not be so enlarged by construction since the reasonable Constitutions and the law.[42] Solely is synonymous with exclusively.[43]
presumption is that the State has granted in express terms all it intended to grant at What is meant by actual, direct and exclusive use of the property for charitable
all, and that unless the privilege is limited to the very terms of the statute the favor purposes is the direct and immediate and actual application of the property itself to
would be intended beyond what was meant.[31] the purposes for which the charitable institution is organized. It is not the use of the
Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus: income from the real property that is determinative of whether the property is used
(3) Charitable institutions, churches and parsonages or convents appurtenant for tax-exempt purposes.[44]
thereto, mosques, non-profit cemeteries, and all lands, buildings, and The petitioner failed to discharge its burden to prove that the entirety of its real
improvements, actually, directly and exclusively used for religious, charitable or property is actually, directly and exclusively used for charitable purposes. While
educational purposes shall be exempt from taxation. [32] portions of the hospital are used for the treatment of patients and the dispensation
The tax exemption under this constitutional provision covers property taxes only. of medical services to them, whether paying or non-paying, other portions thereof
[33]
As Chief Justice Hilario G. Davide, Jr., then a member of the 1986 Constitutional are being leased to private individuals for their clinics and a canteen. Further, a
Commission, explained: . . . what is exempted is not the institution itself . . .; those portion of the land is being leased to a private individual for her business enterprise
exempted from real estate taxes are lands, buildings and improvements actually, under the business name Elliptical Orchids and Garden Center. Indeed, the
directly and exclusively used for religious, charitable or educational purposes. [34] petitioners evidence shows that it collected P1,136,483.45 as rentals in 1991
Consequently, the constitutional provision is implemented by Section 234(b) of and P1,679,999.28 for 1992 from the said lessees.
Republic Act No. 7160 (otherwise known as the Local Government Code of 1991) as Accordingly, we hold that the portions of the land leased to private entities as well
follows: as those parts of the hospital leased to private individuals are not exempt from such
SECTION 234. Exemptions from Real Property Tax. The following are exempted from taxes.[45] On the other hand, the portions of the land occupied by the hospital and
payment of the real property tax: portions of the hospital used for its patients, whether paying or non-paying, are
... exempt from real property taxes.
(b) Charitable institutions, churches, parsonages or convents appurtenant thereto, IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The
mosques, non-profit or religious cemeteries and all lands, buildings, and respondent Quezon City Assessor is hereby DIRECTED to determine, after due
improvements actually, directly, and exclusively used for religious, charitable or hearing, the precise portions of the land and the area thereof which are leased to
educational purposes.[35] private persons, and to compute the real property taxes due thereon as provided for
We note that under the 1935 Constitution, ... all lands, buildings, and improvements by law.
used exclusively for charitable purposes shall be exempt from taxation.[36] However, SO ORDERED.
under the 1973 and the present Constitutions, for lands, buildings, and Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio, Corona,
improvements of the charitable institution to be considered exempt, the same Carpio-Morales, Azcuna, and Tinga, JJ., concur.
should not only be exclusively used for charitable purposes; it is required that such Vitug, J., on official leave.
property be used actually and directly for such purposes. [37] Ynares-Santiago, and Austria-Martinez, JJ., on leave.
LUNG CENTER OF THE PHILIPPINES VS QUEZON CITY [G.R. No. 115525.]
Posted by kaye lee on 5:15 PM
G.R. No. 144104, June 29, 2004 [Constitutional Law - Article VI: Legislative JUAN T. DAVID, Petitioner, v. TEOFISTO T. GUINGONA, JR., as Executive
Department; Taxation ] Secretary; ROBERTO DE OCAMPO, as Secretary of Finance; LIWAYWAY
VINZONS-CHATO, as Commissioner of Internal Revenue; and their
FACTS: AUTHORIZED AGENTS OR REPRESENTATIVES, Respondents.
Petitioner is a non-stock, non-profit entity established by virtue of PD No. 1823,
seeks exemption from real property taxes when the City Assessor issued Tax [G.R. No. 115543.]
Declarations for the land and the hospital building. Petitioner predicted on its claim
that it is a charitable institution. The request was denied, and a petition hereafter RAUL S. ROCO and the INTEGRATED BAR OF THE PHILIPPINES, Petitioners,
filed before the Local Board of Assessment Appeals of Quezon City (QC-LBAA) for v. THE SECRETARY OF THE DEPARTMENT OF FINANCE; THE COMMISSIONERS
reversal of the resolution of the City Assessor. Petitioner alleged that as a charitable OF THE BUREAU OF INTERNAL REVENUE AND BUREAU OF
institution, is exempted from real property taxes under Sec 28(3) Art VI of the CUSTOMS, Respondents.
Constitution. QC-LBAA dismissed the petition and the decision was likewise affirmed
on appeal by the Central Board of Assessment Appeals of Quezon City. The Court of [G.R. No. 115544.]
Appeals affirmed the judgment of the CBAA.
PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO., INC.;
ISSUE: KAMAHALAN PUBLISHING CORPORATION; PHILIPPINE JOURNALISTS, INC.;
1. Whether or not petitioner is a charitable institution within the context of PD 1823 JOSE L. PAVIA; and OFELIA L. DIMALANTA,Petitioners, v. HON. LIWAYWAY V.
and the 1973 and 1987 Constitution and Section 234(b) of RA 7160. CHATO, in her capacity as Commissioner of Internal Revenue; HON.
TEOFISTO T. GUINGONA, JR., in his capacity as Executive Secretary; and
2. Whether or not petitioner is exempted from real property taxes. HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of
Finance, Respondents.
RULING:
1. Yes. The Court hold that the petitioner is a charitable institution within the context [G.R. No. 115754.]
of the 1973 and 1987 Constitution. Under PD 1823, the petitioner is a non-profit and
non-stock corporation which, subject to the provisions of the decree, is to be CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC.,
administered by the Office of the President with the Ministry of Health and the (CREBA), Petitioner, v. THE COMMISSIONER OF INTERNAL
Ministry of Human Settlements. The purpose for which it was created was to render REVENUE, Respondent.
medical services to the public in general including those who are poor and also the
rich, and become a subject of charity. Under PD 1823, petitioner is entitled to [G.R. No. 115781.]
receive donations, even if the gift or donation is in the form of subsidies granted by
the government. KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA,
EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO
2. Partly No. Under PD 1823, the lung center does not enjoy any property tax SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G.
exemption privileges for its real properties as well as the building constructed FERNANDO, RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL,
thereon. MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND
The property tax exemption under Sec. 28(3), Art. VI of the Constitution of the NATIONALISM, INC. ("MABINI"), FREEDOM FROM DEBT COALITION, INC.,
property taxes only. This provision was implanted by Sec.243 (b) of RA 7160.which PHILIPPINE BIBLE SOCIETY, INC., and WIGBERTO TAADA, Petitioners, v.
provides that in order to be entitled to the exemption, the lung center must be able THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE, THE
to prove that: it is a charitable institution and; its real properties are actually, COMMISSIONER OF INTERNAL REVENUE and THE COMMISSIONER OF
directly and exclusively used for charitable purpose. Accordingly, the portions CUSTOMS, Respondents.
occupied by the hospital used for its patients are exempt from real property taxes
while those leased to private entities are not exempt from such taxes. [G.R. No. 115852.]

Republic of the Philippines PHILIPPINE AIRLINES, INC., Petitioner, v. THE SECRETARY OF FINANCE, and
SUPREME COURT COMMISSIONER OF INTERNAL REVENUE, Respondents.
Manila
EN BANC [G.R. No. 115873.]

EN BANC COOPERATIVE UNION OF THE PHILIPPINES, Petitioners, v. HON. LIWAYWAY


V. CHATO in her capacity as the Commissioner of Internal Revenue, HON.
[G.R. No. 115455. August 25, 1994.] TEOFISTO T. GUINGONA, JR., in his capacity as Executive Secretary, and
HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of
ARTURO M. TOLENTINO, Petitioner, v. THE SECRETARY OF FINANCE and THE Finance, Respondents.
COMMISSIONER OF INTERNAL REVENUE, Respondents.
[G.R. No. 115931.]
C. What is the extent of the power of the Bicameral Conference
PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION, INC., and Committee?
ASSOCIATION OF PHILIPPINE BOOKSELLERS, Petitioners, v. HON. ROBERTO
B. DE OCAMPO, as the Secretary of Finance; HON. LIWAYWAY V. CHATO, as II. Substantive Issues:chanrob1es virtual 1aw library
the Commissioner of Internal Revenue and HON. GUILLERMO PARAYNO, JR.,
in his capacity as the Commissioner of Customs, Respondents. A. Does the law violate the following provisions in the Bill of Rights (Art.
III)?
Arturo M. Tolentino for and in his behalf.
1. 1
Donna Celeste D. Feliciano and Juan T. David for petitioners in G.R. No
115525. 2. 4

Roco, Bunag, Kapunan, Migallos and Jardeleza for petitioner R.S. Roco. 3. 5

Villaraza and Cruz for petitioners in G.R. No. 115544. 4. 10

Carlos A. Raneses and Manuel M. Serrano for petitioner in G.R. No. 115754. B. Does the law violate the following other provisions of the Constitution?

Salonga, Hernandez & Allado for Freedom from Debts Coalition, Inc. & Phil. 1. Art. VI, 28(1)
Bible Society.
2. Art. VI, 28(3)
Estelito P. Mendoza for petitioner in G.R. No. 115852.
These questions will be dealt in the order they are stated above. As will
Panganiban, Benitez, Parlade, Africa & Barinaga Law Offices for petitioners presently be explained not all of these questions are judicially cognizable,
in G.R. No 115873. because not all provisions of the Constitution are self executing and,
therefore, judicially enforceable. The other departments of the
R. B. Rodriguez & Associates for petitioners in G.R. No. 115931. government are equally charged with the enforcement of the Constitution,
especially the provisions relating to them.
Rene A.V. Saguisag for MABINI.
I. PROCEDURAL ISSUES

DECISION The contention of petitioners is that in enacting Republic Act No. 7716, or
the Expanded Valued-Added Tax Law, Congress violated the Constitution
because, although H. No. 11197 had originated in the House of
Representatives, it was not passed by the Senate but was simply
MENDOZA, J.: consolidated with the Senate version (S. No. 1630) in the Conference
Committee to produce the bill which the President signed into law. The
following provisions of the Constitution are cited in support of the
The valued-added tax (VAT) is levied on the sale, barter or exchange of proposition that because Republic Act No. 7716 was passed in this manner,
goods and properties as well as on the sale or exchange of services. It is it did not originate in the House of Representatives and it has not thereby
equivalent to 10% of the gross selling price or gross value in money of become a law:chanrob1es virtual 1aw library
goods or properties sold, bartered or exchanged or of the gross receipts
from the sale or exchange of services. Republic Act No. 7716 seeks to Art. VI, 24: All appropriation, revenue or tariff bills, bills authorizing
widen the tax base of the existing VAT system and enhance its increase of the public debt, bills of local application, and private bills shall
administration by amending the National Internal Revenue Code.cralawnad originate exclusively in the House of Representatives, but the Senate may
propose or concur with amendments.
These are various suits for certiorari and prohibition, challenging the
constitutionality of Republic Act No. 7716 on various grounds summarized Id., 26(2): No bill passed by either House shall become a law unless it has
in the resolution of July 6, 1994 of this Court, as follows:chanrob1es virtual passed three readings on separate days, and printed copies thereof in its
1aw library final form have been distributed to its Members three days before its
passage, except when the President certifies to the necessity of its
I. Procedural Issues:chanrob1es virtual 1aw library immediate enactment to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be allowed, and the vote
A. Does Republic Act No. 7716 violate Art. VI, 24 of the Constitution? thereon shall be taken immediately thereafter, and the yeas and nays
entered in the Journal.
B. Does it violate Art. VI, 26(2) of the Constitution?
It appears that on various dates between July 22, 1992 and August 31,
1993, several bills 1 were introduced in the House of Representatives 1994 to allow time for the registration of business entities. It would have
seeking to amend certain provisions of the National Internal Revenue Code been enforced on July 1, 1994 but its enforcement was stopped because
relative to the value-added tax or VAT. These bills were referred to the the Court, by the vote of 11 to 4 of its members, granted a temporary
House Ways and Means Committee which recommended for approval a restraining order on June 30, 1994.
substitute measure, H. No. 11197, entitled
First. Petitioners contention is that Republic Act No. 7716 did not
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM TO WIDEN "originate exclusively" in the House of Representatives as required by Art.
ITS TAX BASE AND ENHANCE ITS ADMINISTRATION, AMENDING FOR THESE VI, 24 of the Constitution, because it is in fact the result of the
PURPOSES SECTIONS 99, 100, 102, 103, 104, 105, 106, 107, 108 AND 110 consolidation of two distinct bills, H. No. 11197 and S. No. 1630. In this
OF TITLE IV, 112, 115 AND 116 OF TITLE V, AND 236, 237 AND 238 OF TITLE connection, petitioners point out that although Art. VI, 24 was adopted
IX, AND REPEALING SECTIONS 113 AND 114 OF TITLE V, ALL OF THE from the American Federal Constitution, 2 it is notable in two respects: the
NATIONAL INTERNAL REVENUE CODE, AS AMENDED. verb "shall originate" is qualified in the Philippine Constitution by the word
"exclusively" and the phrase "as on other bills" in the American version is
The bill (H. No. 11197) was considered on second reading starting omitted. This means, according to them, that to be considered as having
November 6, 1993 and, on November 17, 1993, it was approved by the originated in the House, Republic Act No. 7716 must retain the essence of
House of Representatives after third and final reading. H. No. 11197.

It was sent to the Senate on November 23, 1993 and later referred by that This argument will not bear analysis. To begin with, it is not the law but
body to its Committee on Ways and Means. the revenue bill which is required by the Constitution to "originate
exclusively" in the House of Representatives. It is important to emphasize
On February 7, 1994, the Senate Committee submitted its report this, because a bill originating in the House may undergo such extensive
recommending approval of S. No. 1630, entitled changes in the Senate that the result may be a rewriting of the whole. The
possibility of a third version by the conference committee will be discussed
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM TO WIDEN later. At this point, what is important to note is that, as a result of the
ITS TAX BASE AND ENHANCE ITS ADMINISTRATION, AMENDING FOR THESE Senate action, a distinct bill may be produced. To insist that a revenue
PURPOSES SECTIONS 99, 100, 102, 103, 104, 105, 107, 108, AND 110 OF statute and not only the bill which initiated the legislative process
TITLE IV, 112 OF TITLE V, AND 236, 237, AND 238 OF TITLE IX, AND culminating in the enactment of the law must substantially be the same
REPEALING SECTIONS 113, 114 and 116 OF TITLE V, ALL OF THE NATIONAL as the House bill would be to deny the Senates power not only to "concur
INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES. with amendments" but also to" propose amendments." It would be to
violate the coequality of legislative power of the two houses of Congress
It was stated that the bill was being submitted "in substitution of Senate and in fact make the House superior to the Senate.
Bill No. 1129, taking into consideration P. S. Res. No. 734 and H. B. No.
11197."cralaw virtua1aw library The contention that the constitutional design is to limit the Senates power
in respect of revenue bills in order to compensate for the grant to the
On February 8, 1994, the Senate began consideration of the bill (S. No. Senate of the treaty-ratifying power 3 and thereby equalize its powers and
1630). It finished debates on the bill and approved it on second reading on those of the House overlooks the fact that the powers being compared are
March 24, 1994. On the same day, it approved the bill on third reading by different. We are dealing here with the legislative power. which under the
the affirmative votes of 13 of its members, with one abstention. Constitution is vested not in any particular chamber but in the Congress of
the Philippines, consisting of "a Senate and a House of Representatives." 4
H. No. 1197 and its Senate version (S. No. 1630) were then referred to a The exercise of the treaty-ratifying power is not the exercise of legislative
conference committee which, after meeting four times (April 13, 19, 21 power. It is the exercise of a check on the executive power. There is,
and 25, 1994), recommended that "House Bill No. 11197, in consolidation therefore, no justification for comparing the legislative powers of the
with Senate Bill No. 1630, be approved in accordance with the attached House and of the Senate on the basis of the possession of such
copy of the bill as reconciled and approved by the conferees."cralaw nonlegislative power by the Senate. The possession of a similar power by
virtua1aw library the U.S. Senate 5 has never been thought of as giving it more legislative
powers than the House of Representatives.
The Conference Committee bill, entitled "AN ACT RESTRUCTURING THE
VALUE-ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE AND In the United States, the validity of a provision (sec. 37) imposing an ad
ENHANCING ITS ADMINISTRATION AND FOR THESE PURPOSES AMENDING valorem tax based on the weight of vessels, which the U.S. Senate had
AND REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL inserted in the Tariff Act of 1909, was upheld against the claim that the
REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES," was provision was a revenue bill which originated in the Senate in
thereafter approved by the House of Representatives on April 27, 1994 contravention of Art. I, 7 of the U.S. Constitution. 6 Nor is the power to
and by the Senate on May 2, 1994. The enrolled bill was then presented to amend limited to adding a provision or two in a revenue bill emanating
the President of the Philippines who, on May 5, 1994, signed it. It became from the House. The U.S. Senate has gone so far as changing the whole of
Republic Act No. 7716. On May 12, 1994, Republic Act No. 7716 was bills following the enacting clause and substituting its own versions. In
published in two newspapers of general circulation and, on May 28, 1994, 1883, for example, it struck out everything after the enacting clause of a
it took effect, although its implementation was suspended until June 30, tariff bill and wrote in its place its own measure, and the House
subsequently accepted the amendment. The U.S. Senate likewise added final form and distributed three days before it is finally approved.
847 amendments to what later became the Payne-Aldrich Tariff Act of
1909; it dictated the schedules of the Tariff Act of 1921; it rewrote an In other words, the "unless" clause must be read in relation to the "except"
extensive tax revision bill in the same year and recast most of the tariff bill clause, because the two are really coordinate clauses of the same
of 1992. 7 Given, then, the power of the Senate to propose amendments, sentence. To construe the "except" clause as simply dispensing with the
the Senate can propose its own version even with respect to bills which second requirement in the "unless" clause (i.e., printing and distribution
are required by the Constitution to originate in the House. three days before final approval) would not only violate the rules of
grammar. It would also negate the very premise of the "except" clause: the
It is insisted, however, that S. No. 1630 was passed not in substitution of necessity of securing the immediate enactment of a bill which is certified
H. No. 11197 but of another Senate bill (S. No. 1129) earlier filed and that in order to meet a public calamity or emergency. For if it is only the
what the Senate did was merely to "take [H. No. 11197] into consideration" printing that is dispensed with by presidential certification, the time saved
in enacting S. No. 1630. There is really no difference between the Senate would be so negligible as to be of any use in insuring immediate
preserving H. No. 11197 up to the enacting clause and then writing its own enactment. It may well be doubted whether doing away with the necessity
version following the enacting clause (which, it would seem, petitioners of printing and distributing copies of the bill three days before the third
admit is an amendment by substitution), and, on the other hand, reading would insure speedy enactment of a law in the face of an
separately presenting a bill of its own on the same subject matter. In emergency requiring the calling of a special election for President and
either case the result are two bills on the same subject. Vice-President. Under the Constitution such a law is required to be made
within seven days of the convening of Congress in emergency session. 11
Indeed, what the Constitution simply means is that the initiative for filing
revenue, tariff, or tax bills, bills authorizing an increase of the public debt, That upon the certification of a bill by the President the requirement of
private bills and bills of local application must come from the House of three readings on separate days and of printing and distribution can be
Representatives on the theory that, elected as they are from the districts, dispensed with is supported by the weight of legislative practice. For
the members of the House can be expected to be more sensitive to the example, the bill defining the certiorari jurisdiction of this Court which, in
local needs and problems. On the other hand, the senators, who are consolidation with the Senate version, became Republic Act No. 5440, was
elected at large, are expected to approach the same problems from the passed on second and third readings in the House of Representatives on
national perspective. Both views are thereby made to bear on the the same day (May 14, 1968) after the bill had been certified by the
enactment of such laws. President as urgent. 12

Nor does the Constitution prohibit the filing in the Senate of a substitute There is, therefore, no merit in the contention that presidential
bill in anticipation of its receipt of the bill from the House, so long as certification dispenses only with the requirement for the printing of the bill
action by the Senate as a body is withheld pending receipt of the House and its distribution three days before its passage but not with the
bill. The Court cannot, therefore, understand the alarm expressed over the requirement of three readings on separate days,
fact that on March 1, 1993, eight months before the House passed H. No. also.chanroblesvirtuallawlibrary
11197, S. No. 1129 had been filed in the Senate. After all it does not
appear that the Senate ever considered it. It was only after the Senate had It is nonetheless urged that the certification of the bill in this case was
received H. No. 11197 on November 23, 1993 that the process of invalid because there was no emergency, the condition stated in the
legislation in respect of it began with the referral to the Senate Committee certification of a "growing budget deficit" not being an unusual condition
on Ways and Means of H. No. 11197 and the submission by the Committee in this country.
on February 7, 1994 of S. No. 1630. For that matter, if the question were
simply the priority in the time of filing of bills, the fact is that it was in the It is noteworthy that no member of the Senate saw fit to controvert the
House that a bill (H. No. 253) to amend the VAT law was first filed on July reality of the factual basis of the certification. To the contrary, by passing
22, 1992. Several other bills had been filed in the House before S. No. 1129 S. No. 1630 on second and third readings on March 24, 1994, the Senate
was filed in the Senate, and H. No. 11197 was only a substitute of those accepted the Presidents certification. Should such certification be now
earlier bills.chanrobles law library reviewed by this Court, especially when no evidence has been shown that,
because S. No. 1630 was taken up on second and third readings on the
Second. Enough has been said to show that it was within the power of the same day, the members of the Senate were deprived of the time needed
Senate to propose S. No. 1630. We not pass to the next argument of for the study of a vital piece of legislation?
petitioners that S. No. 1630 did not pass three readings on separate days
as required by the Constitution 8 because the second and third readings The sufficiency of the factual basis of the suspension of the writ of habeas
were done on the same day, March 24, 1994. But this was because on corpus or declaration of martial law under Art. VII, 18, or the existence of
February 24, 1994 9 and again on March 22, 1994, 10 the President had a national emergency justifying the delegation of extraordinary powers to
certified S. No. 1630 as urgent. The presidential certification dispensed the President under Art. VI, 23(2), is subject to judicial review because
with the requirement not only of printing but also that of reading the bill basic rights of individuals may be at hazard. But the factual basis of
on separate days. The phrase "except when the President certifies to the presidential certification of bills, which involves doing away with
necessity of its immediate enactment, etc." in Art. VI, 26(2) qualified the procedural requirements designed to insure that bills are duly considered
two stated conditions before a bill can become a law: (i) the bill has by members of Congress, certainly should elicit a different standard of
passed three readings on separate days and (ii) it has been printed in its review.
reason why it cannot propose several provisions, collectively considered as
Petitioners also invite attention to the fact that the President certified S. an "amendment in the nature of a substitute," so long as such amendment
No. 1630 and not H. No. 11197. That is because S. No. 1630 was what the is germane to the subject of the bills before the committee. After all, its
Senate was considering. When the matter was before the House, the report was not final but needed the approval of both houses of Congress to
President likewise certified H. No. 9210 then pending in the House. become valid as an act of the legislative department. The charge that in
this case the Conference Committee acted as a third legislative chamber is
Third. Finally it is contended that the bill which became Republic Act No. thus without any basis. 18
7716 is the bill which the Conference Committee prepared by consolidating
H. No. 11197 and S. No. 1630. It is claimed that the Conference Committee Nonetheless, it is argued that under the respective Rules of the Senate
report included provisions not found in either the House bill or the Senate and the House of Representatives a conference committee can only act on
bill and that these provisions were "surreptitiously" inserted by the the differing provisions of a Senate bill and a House bill, and that contrary
Conference Committee. Much is made of the fact that in the last two days to these Rules the Conference Committee inserted provisions not found in
of its session on April 21 and 25, 1994 the Committee met behind closed the bills submitted to it. The following provisions are cited in support of
doors. We are not told, however, whether the provisions were not the this contention:chanrob1es virtual 1aw library
result of the give and take that often mark the proceedings of conference
committees. Rules of the Senate

Nor is there anything unusual or extraordinary about the fact that the Rule XII:chanrob1es virtual 1aw library
Conference Committee met in executive sessions. Often the only way to
reach agreement on conflicting provisions is to meet behind closed doors, Sec. 26. In the event that the Senate does not agree with the House of
with only the conferees present. Otherwise, no compromise is likely to be Representatives on the provision of any bill or joint resolution, the
made. The Court is not about to take the suggestion of a cabal or sinister differences shall be settled by a conference committee of both Houses
motive attributed to the conferees on the basis solely of their "secret which shall meet within ten days after their composition.
meetings" on April 21 and 25, 1994, nor read anything into the incomplete
remarks of the members, marked in the transcript of stenographic notes The President shall designate the members of the conference committee in
by ellipses. The incomplete sentences are probably due to the accordance with subparagraph (c), Section 3 of Rule III.
stenographers own limitations or to the incoherence that sometimes
characterize conversations. William Safire noted some such lapses in Each Conference Committee Report shall contain a detailed and sufficiently
recorded talks even by recent past Presidents of the United States. explicit statement of the changes in or amendments to the subject
measure, and shall be signed by the conferees.
In any event, in the United States conference committees had been
customarily held in executive sessions with only the conferees and their The consideration of such report shall not be in order unless the report has
staffs in attendance. 13 Only in November 1975 was a new rule adopted been filed with the Secretary of the Senate and copies thereof have been
requiring open sessions. Even then a majority of either chambers distributed to the Members.
conferees may vote in public to close the meetings. 14
(Emphasis added)
As to the possibility of an entirely new bill emergency out of a Conference
Committee, it has been explained:chanrob1es virtual 1aw library Rules of the House of Representatives

Under congressional rules of procedure, conference committees are not Rule XIV:chanrob1es virtual 1aw library
expected to make any material change in the measure at issue, either by
deleting provisions to which both houses have already agreed or by Sec. 85. Conference Committee Reports. In the event that the House
inserting new provisions. But this is a difficult provision to enforce. Note does not agree with the Senate on the amendments to any bill or joint
the problem when one house amends a proposal originating in either resolution, the differences may be settled by conference committees of
house by striking out everything following the enacting clause and both Chambers.
substituting provisions which make it an entirely new bill. The versions are
now altogether different, permitting a conference committee to draft The consideration of conference committee reports shall always be in
essentially a new bill . . . 15 order, except when the journal is being read, while the roll is being called
or the House is dividing on any question. Each of the pages of such reports
The result is a third version, which is considered an "amendment in the shall be signed by the conferees. Each report shall contain a detailed,
nature of a substitute," the only requirement for which being that the third sufficiently explicit statement of the changes in or amendments to the
version be germane to the subject of the House and Senate bills. 16 subject measure.

Indeed, this Court recently held that it is within the power of a conference The consideration of such report shall not be in order unless copies thereof
committee to include in its report an entirely new provision that is not are distributed to the Members: Provided, That in the last fifteen days of
found either in the House bill or in the Senate bill. 17 If the committee can each session period it shall be deemed sufficient that three copies of the
propose an amendment consisting of one or two provisions, there is no report, signed as above provided, are deposited in the office of the
Secretary General. conference committee report. For if the purpose of requiring three
readings is to give members of Congress time to study bills, it cannot be
(Emphasis added) gainsaid that H. No. 11197 was passed in the House after three reading;
that in the Senate it was considered on first reading and then referred to a
To be sure, nothing in the Rules limits a conference committee to a committee of that body; that although the Senate committee did not
consideration of conflicting provisions. But Rule XLIV, 112 of the Rules of report out the House bill, it submitted a version (S. No. 1630) which it had
the Senate is cited to the effect that "If there is no Rule applicable to a prepared by "taking into consideration" the House bill; that for its part the
specific case the precedents of the Legislative Department of the Conference Committee consolidated the two bills and prepared a
Philippines shall be resorted to, and as a supplement of these, the Rules compromise version; that the Conference Committee Report was
contained in Jeffersons Manual." The following is then quoted from the thereafter approved by the House and the Senate, presumably after
Jeffersons Manual:chanrob1es virtual 1aw library appropriate study by their members. We cannot say that, as a matter of
fact, the members of Congress were not fully informed of the provisions of
The managers of a conference must confine themselves to the differences the bill. The allegation that the Conference Committee usurped the
committed to them . . . and may not include subjects not within legislative power of Congress is, in our view, without warrant in fact and in
disagreements, even though germane to a question in issue. law.

Note that, according to Rule XLIX, 112, in case there is no specific rule Fourth. Whatever doubts there may be as to the formal validity of Republic
applicable, resort must be to the legislative practice. The Jeffersons Act No. 7716 must be resolved in its favor. Our cases 20 manifest firm
Manual is resorted to only as supplement. It is common place in Congress adherence to the rule that an enrolled copy of a bill is conclusive not only
that conference committee reports include new matters which, though of its provisions but also of its due enactment. Not even claims that a
germane, have not been committed to the committee. This practice was proposed constitutional amendment was invalid because the requisite
admitted by Senator Raul S. Roco, petitioner in G.R. No. 115543, during votes for its approval had not been obtained 21 or that certain provisions
the oral argument in these cases. Whatever, then, may be provided in the of a statute had been "smuggled" in the printing of the bill 22 have moved
Jeffersons Manual must be considered to have been modified by the or persuaded us to look behind the proceedings of a coequal branch of the
legislative practice. If a change is desired in the practice it must be sought government. There is no reason now to depart from this rule.
in Congress since this question is not covered by any constitutional
provision but is only an internal rule of each house. Thus, Art. VI, 16(3) of No claim is here made that the "enrolled bill" rule is absolute. In fact in
the Constitution provides that "Each House may determine the rules of its one case 23 we "went behind" an enrolled bill and consulted the Journal to
proceedings. . . ."cralaw virtua1aw library determine whether certain provisions of a statute had been approved by
the Senate in view of the fact that the President of the Senate himself,
This observation applies to the other contention that the Rules of the two who had signed the enrolled bill, admitted a mistake and withdrew his
chambers were likewise disregarded in the preparation of the Conference signature, so that in effect there was no longer an enrolled bill to
Committee Report because the Report did not contain a "detailed and consider.chanroblesvirtuallawlibrary:red
sufficiently explicit statement of changes in, or amendments to, the
subject measure." The Report used brackets and capital letters to indicate But where allegations that the constitutional procedures for the passage
the changes. This is a standard practice in bill-drafting. We cannot say that of bills have not been observed have no more basis than another
in using these marks and symbols the Committee violated the Rules of the allegation that the Conference Committee "surreptitiously" inserted
Senate and the House. Moreover, this Court is not the proper forum for the provisions into a bill which it had prepared, we should decline the
enforcement of these internal Rules. To the contrary, as we have already invitation to go behind the enrolled copy of the bill. To disregard the
ruled, "parliamentary rules are merely procedural and with their "enrolled bill" rule in such cases would be to disregard the respect due the
observance the courts have no concern." 19 Our concern is with the other two departments of our government.
procedural requirements of the Constitution for the enactment of laws. As
far as these requirements are concerned, we are satisfied that they have Fifth. An additional attack on the formal validity of Republic Act No. 7716
been faithfully observed in these cases.chanrobles virtual lawlibrary is made by the Philippine Airlines, Inc., petitioner in G.R. No. 11582,
namely, that it violates Art. IV, 26(1) which provides that "Every bill
Nor is there any reason for requiring that the Committees Report in these passed by Congress shall embrace only one subject which shall be
cases must have undergone three readings in each of the two houses. If expressed in the title thereof." It is contended that neither H. No. 11197
that be the case, there would be no end to negotiation since each house nor S. No. 1630 provided for removal of exemption of PAL transactions
may seek modifications of the compromise bill. The nature of the bill, from the payment of the VAT and that this was made only in the
therefore, requires that it be acted upon by each house on a "take it or Conference Committee bill which became Republic Act No. 7716 without
leave it" basis, with the only alternative that if it is not approved by both reflecting this fact in its title.
houses, another conference committee must be appointed. But then again
the result would still be a compromise measure that may not be wholly The title of Republic Act No. 7716 is:chanrob1es virtual 1aw library
satisfying to both houses.
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM, WIDENING
Art. VI, 26(2) must, therefore, be construed as referring only to bills ITS TAX BASE AND ENHANCING ITS ADMINISTRATION, AND FOR THESE
introduced for the first time in either house of Congress, not to the PURPOSES AMENDING AND REPEALING THE RELEVANT PROVISIONS OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER ESTABLISH, OPERATE, AND MAINTAIN AIR-TRANSPORT SERVICES IN THE
PURPOSES. PHILIPPINES AND BETWEEN THE PHILIPPINES AND OTHER COUNTRIES.

Among the provisions of the NIRC amended is sec. 103, which originally The trend in our cases is to construe the constitutional requirement in
read:chanrob1es virtual 1aw library such a manner that courts do not unduly interfere with the enactment of
necessary legislation and to consider it sufficient if the title expresses the
Sec. 103. Exempt transactions. The following shall be exempt from the general subject of the statute and all its provisions are germane to the
value-added tax:chanrob1es virtual 1aw library general subject thus expressed. 24

... It is further contended that amendment of petitioners franchise may only


be made by special law, in view of sec. 24 of P.D. No. 1590 which
(q) Transactions which are exempt under special laws or international provides:chanrob1es virtual 1aw library
agreements to which the Philippines is a signatory.
This franchise, as amended, or any section or provision hereof may only be
Among the transactions exempted from the VAT were those of PAL because modified, amended, or repealed expressly by a special law or decree that
it was exempted under its franchise (P.D. No. 1590) from the payment of shall specifically modify, amend, or repeal this franchise or any section or
all "other taxes . . . now or in the near future," in consideration of the provision thereof.cralawnad
payment by it either of the corporate income tax or a franchise tax of 2%.
This provision is evidently intended to prevent the amendment of the
As a result of its amendment by Republic Act No. 7716, 103 of the NIRC franchise by mere implication resulting from the enactment of a later
now provides:chanrob1es virtual 1aw library inconsistent statute, in consideration of the fact that a franchise is a
contract which can be altered only by consent of the parties. Thus in
103. Exempt transactions. The following shall be exempt from the Manila Railroad Co. v. Rafferty, 25 it was held that an Act of the U.S.
value-added tax:chanrob1es virtual 1aw library Congress, which provided for the payment of tax on certain goods and
articles imported into the Philippines, did not amend the franchise of
... plaintiff, which exempted it from all taxes except those mentioned in its
franchise. It was held that a special law cannot be amended by a general
(q) Transactions which are exempt under special laws, except those law.
granted under Presidential Decree Nos. 66, 529, 972, 1491, 1590. . . .
In contrast, in the case at bar, Republic Act No. 7716 expressly amends
The effect of the amendment is to remove the exemption granted to PAL, PALs franchise (P.D. No. 1590) by specifically excepting from the grant of
as far as the VAT is concerned. exemptions from the VAT PALs exemption under P.D. No. 1590. This is
within the power of Congress to do under Art. XII, 11 of the Constitution,
The question is whether this amendment of 103 of the NIRC is fairly which provides that the grant of a franchise for the operation of a public
embraced in the title of Republic Act No. 7716, although no mention is utility is subject to amendment, alteration or repeal by Congress when the
made therein of P.D. No. 1590 as among those which the statute amends. common good so requires.
We think it is, since the title states that the purpose of the statute is to
expand the VAT system, and one way of doing this is to widen its base by II. SUBSTANTIVE ISSUES
withdrawing some of the exemptions granted before. To insist that P.D. No.
1590 be mentioned in the title of the law, in addition to 103 of the NIRC, A. Claims of Press Freedom, Freedom of Thought
in which it is specifically referred to, would be to insist that the title of a
bill should be a complete index of its content. and Religious Freedom

The constitutional requirement that every bill passed by Congress shall The Philippine Press Institute (PPI), petitioner in G.R. No. 115544, is a
embrace only one subject which shall be expressed in its title is intended nonprofit organization of newspaper publishers established for the
to prevent surprise upon the members of Congress and to inform the improvement of journalism in the Philippines. On the other hand,
people of pending legislation so that, if they wish to, they can be heard petitioner in G.R. No. 115781, the Philippine Bible Society (PBS), is a
regarding it. If, in the case at bar, petitioner did not know before that its nonprofit organization engaged in the printing and distribution of bibles
exemption had been withdrawn, it is not because of any defect in the title and other religious articles. Both petitioners claim violations of their rights
but perhaps for the same reason other statutes, although published, pass under 4 and 5 of the Bill of Rights as a result of the enactment of the
unnoticed until some event somehow calls attention to their existence. VAT Law.
Indeed, the title of Republic Act No. 7716 is not any more general than the
title of PALs own franchise under P.D. No. 1590, and yet no mention is The PPI question the law insofar as it has withdrawn the exemption
made of its tax exemption. The title of P.D. No. 1590 is:chanrob1es virtual previously granted to the press under 103 (f) of the NIRC. Although the
1aw library exemption was subsequently restored by administrative regulation with
respect to the circulation income of newspapers, the PPI presses its claim
AN ACT GRANTING A NEW FRANCHISE TO PHILIPPINE AIRLINES, INC. TO because of the possibility that the exemption may still be removed by
mere revocation of the regulation of the Secretary of Finance. On the other to find a differential treatment of the press by the law, much less any
hand, the PBS goes so far as to question the Secretarys power to grant censorial motivation for its enactment. If the press is now required to pay
exemption for two reasons: (1) The Secretary of Finance has no power to a value-added tax on its transactions, it is not because it is being singled
grant tax exemption because this is vested in Congress and requires for its out, much less targeted, for special treatment but only because of the
exercise the vote of a majority of all its members 26 and (2) the removal of the exemption previously granted to it by law. The withdrawal
Secretarys duty is to execute the law. of exemption is all that is involved in these cases. Other transactions,
likewise previously granted exemption, have been delisted as part of the
103 of the NIRC contains a list of transactions exempted from VAT. Among scheme to expand the base and the scope of the VAT system. The law
the transactions previously granted exemption were:chanrob1es virtual would perhaps be open to the charge of discriminatory treatment if the
1aw library only privilege withdrawn had been that granted to the press. But that is
not the case.chanrobles.com : virtual law library
(f) Printing, publication, importation or sale of books and any newspaper,
magazine, review, or bulletin which appears at regular intervals with fixed The situation in the case at bar is indeed a far cry from those cited by the
prices for subscription and sale and which is devoted principally to the PPI in support of its claim that Republic Act No. 7716 subjects the press to
publication of advertisements. discriminatory taxation. In the cases cited, the discriminatory purpose was
clear either from the background of the law or from its operation. For
Republic Act No. 7716 amended 103 by deleting par. (f) with the result example, in Grosjean v. American Press Co., 28 the law imposed a license
that print media became subject to the VAT with respect to all aspects of tax equivalent to 2% of the gross receipts derived from advertisements
their operations. Later, however, based on a memorandum of the Secretary only on newspapers which had a circulation of more than 20,000 copies per
of Justice, respondent Secretary of Finance issued Revenue Regulations week. Because the tax was not based on the volume of advertisement
No. 11-94, dated June 27, 1994, exempting the "circulation income of print alone but was measured by the extent of its circulation as well, the law
media pursuant to 4 Article III of the 1987 Philippine Constitution applied only to the thirteen large newspapers in Louisiana, leaving
guaranteeing against abridgment of freedom of the press, among others." untaxed four papers with circulation of only slightly less than 20,000
The exemption of "circulation income" has left income from copies a week and 120 weekly newspapers which were in serious
advertisements still subject to the VAT. competition with the thirteen newspapers in question. It was well known
that the thirteen newspapers had been critical of Senator Huey Long, and
It is unnecessary to pass upon the contention that the exemption granted the Long-dominated legislature of Louisiana responded by taxing what
is beyond the authority of the Secretary of Finance to give, in view of PPIs Long described as the "lying newspapers" by imposing on them "a tax on
contention that even with the exemption of the circulation revenue of print lying." The effect of the tax was to curtail both their revenue and their
media there is still an unconstitutional abridgment of press freedom circulation. As the U.S. Supreme Court noted, the tax was "a deliberate
because of the imposition of the VAT on the gross receipts of newspapers and calculated device in the guise of a tax to limit the circulation of
from advertisements and on their acquisition of paper, ink and services for information to which the public is entitled in virtue of the constitutional
publication. Even on the assumption that no exemption has effectively guaranties." 29 The case is a classic illustration of the warning that the
been granted to print media transactions, we find no violation of press power to tax is the power to destroy.
freedom in these cases.
In the other case 30 invoked by the PPI, the press was also found to have
To be sure, we are not dealing here with a statute that on its face operates been singled out because everything was exempt from the "use tax" on ink
in the area of press freedom. The PPIs claim is simply that, as applied to and paper, except the press. Minnesota imposed a tax on the sales of
newspapers, the law abridges press freedom. Even with due recognition of goods in that state. To protect the sales tax, it enacted a complementary
its high estate and its importance in a democratic society, however, the tax on the privilege of "using, storing or consuming in that state tangible
press is not immune from general regulation by the State. It has been personal property" by eliminating the residents incentive to get goods
held:chanrob1es virtual 1aw library from outside states where the sales tax might be lower. The Minnesota
Star Tribune was exempted from both taxes from 1967 to 1971. In 1971,
The publisher of a newspaper has no immunity from the application of however, the state legislature amended the tax scheme by imposing the
general laws. He has no special privilege to invade the rights and liberties "use tax" on the cost of paper and ink used for publication. The law was
of others. He must answer for libel. He may be punished for contempt of held to have singled out the press because (1) there was no reason for
court. Like others, he must pay equitable and nondiscriminatory taxes on imposing the "use tax" since the press was exempt from the sales tax and
his business. .27 (2) the "use tax" was laid on an "intermediate transaction rather than the
ultimate retail sale." Minnesota had a heavy burden of justifying the
The PPI does not dispute this point, either. differential treatment and it failed to do so. In addition, the U.S. Supreme
Court found the law to be discriminatory because the legislature, by again
What it contends is that by withdrawing the exemption previously granted amending the law so as to exempt the first $100,000 of paper and ink
to print media transactions involving printing, publication, importation or used, further narrowed the coverage of the tax so that "only a handful of
sale of newspapers, Republic Act No. 7716 has singled out the press for publishers pay any tax at all and even fewer pay any significant amount of
discriminatory treatment and that within the class of mass media the law tax." 31 The discriminatory purpose was thus very clear.
discriminates against print media by giving broadcast media favored
treatment. We have carefully examined this argument, but we are unable More recently, in Arkansas Writers Project, Inc. v. Ragland, 32 it was held
that a law which taxed general interest magazines but not newspapers and But, in this case, the fee in 107, although a fixed amount (P1,000), is not
religious, professional, trade and sports journals was discriminatory imposed for the exercise of a privilege but only for the purpose of
because while the tax did not single out the press as a whole, it targeted a defraying part of the cost of registration. The registration requirement is a
small group within the press. What is more, by differentiating on the basis central feature of the VAT system. It is designed to provide a record of tax
of contents (i.e., between general interest and special interests such as credits because any person who is subject to the payment of the VAT pays
religion or sports) the law became "entirely incompatible with the First an input tax, even as he collects an output tax on sales made or services
Amendments guarantee of freedom of the press."cralaw virtua1aw library rendered. The registration fee is thus a mere administrative fee, one not
imposed on the exercise of a privilege, much less a constitutional
These cases come down to this: that unless justified, the differential right.chanrobles virtual lawlibrary
treatment of the press creates risks of suppression of expression. In
contrast, in the cases at bar, the statute applies to a wide range of goods For the foregoing reasons, we find the attack on Republic Act No. 7716 on
and services. The argument that, by imposing the VAT only on print media the ground that it offends the free speech, press and freedom of religion
whose gross sales exceeds P480,000 but not more than P750,000, the law guarantees of the Constitution to be without merit. For the same reasons,
discriminates 33 is without merit since it has not been shown that as a we find the claim of the Philippine Educational Publishers Association
result the class subject to tax has been unreasonably narrowed. The fact is (PEPA) in G.R. No. 115931 that the increase in the price of books and other
that this limitation does not apply to the press alone but to all sales. Nor is educational materials as a result of the VAT would violate the
impermissible motive shown by the fact that print media and broadcast constitutional mandate to the government to give priority to education,
media are treated differently. The press is taxed on its transactions science and technology (Art. II, sec. 17) to be untenable.
involving printing and publication, which are different from the
transactions of broadcast media. There is thus a reasonable basis for the B. Claims of Regressivity, Denial of Due Process, Equal Protection,
classification.
and Impairment of Contracts
The cases canvassed, it must be stressed, eschew any suggestion that
"owners of newspapers are immune from any forms of ordinary taxation." There is basis for passing upon claims that on its face the statute violates
The license tax in the Grosjean case was declared invalid because it was the guarantees of freedom of speech, press and religion. The possible
"one single in kind, with a long history of hostile misuse against the "chilling effect" which it may have on the essential freedom of the mind
freedom of the press." 34 On the other hand, Minneapolis Star and conscience and the need to assure that the channels of communication
acknowledged that "The First Amendment does not prohibit all regulation are open and operating importunately demand the exercise of this Courts
of the press [and that] the States and the Federal Government can subject power of review.
newspapers to generally applicable economic regulations without creating
constitutional problems." 35 There is, however, no justification for passing upon the claims that the law
also violates the rule that taxation must be progressive and that it denies
What has been said above also disposes of the allegations of the PBS that petitioners right to due process and the equal protection of the laws. The
the removal of the exemption of printing, publication or importation of reason for this different treatment has been cogently stated by an eminent
books and religious articles, as well as their printing and publication, authority on constitutional law thus:" [W]hen freedom of the mind is
likewise violates freedom of thought and of conscience. For as the U.S. imperiled by law, it is freedom that commands a moments of respect; when
Supreme Court unanimously held in Jimmy Swaggart Ministries v. Board of property is imperiled it is the lawmakers judgment that commands
Equalization, 36 the Free Exercise of Religion Clause does not prohibit respect. This dual standard may not precisely reverse the presumption of
imposing a generally applicable sales and use tax on the sale of religious constitutionality in civil liberties cases, but obviously it does set up a
material by a religious organization. hierarchy of values within the due process clause." 41

This brings us to the question whether the registration provision of the Indeed, the absence of threat of immediate harm makes the need for
law, 37 although of general applicability, nonetheless is invalid when judicial intervention less evident and underscores the essential nature of
applied to the press because it lays a prior restraint on its essential petitioners attack on the law on the grounds of regressivity, denial of due
freedom. The case of American Bible Society v. City of Manila 38 is cited by process and equal protection and impairment of contracts as a mere
both the PBS and the PPI in support of their contention that the law academic discussion of the merits of the law. For the fact is that there
imposes censorship. There, this Court held that an ordinance of the City of have even been no notices of assessments issued to petitioners and no
Manila, which imposed a license fee on those engaged in the business of determinations at the administrative levels of their claims so as to
general merchandise, could not be applied to the appellants sale of bibles illuminate the actual operation of the law and enable us to reach sound
and other religious literature. This Court relied on Murdock v. Pennsylvania judgment regarding so fundamental questions as those raised in these
39 in which it was held that, as a license fee is fixed in amount and suits.chanrobles virtual lawlibrary
unrelated to the receipts of the taxpayer, the license fee, when applied to
a religious sect, was actually being imposed as a condition for the exercise Thus, the broad argument against the VAT is that it is regressive and that
of the sects right under the Constitution. For that reason, it was held, the it violates the requirement that "The rule of taxation shall be uniform and
license fee "restrains in advance those constitutional liberties of press and equitable [and] Congress shall evolve a progressive system of taxation."
religion and inevitably tends to suppress their exercise." 40 42 Petitioners in G.R. No. 115781 quote from a paper, entitled "VAT Policy
Issues: Structure, Regressivity, Inflation and Exports" by Alan A. Tait of the
International Monetary Fund, that "VAT payment by low-income human dignity and the reduction of social, economic and political
households will be a higher proportion of their incomes (and expenditures) inequalities (Art. XIII, 1), or for the promotion of the right to "quality
than payments by higher-income households. That is, the VAT will be education" (Art. XIV, 1). These provisions are put in the Constitution as
regressive." Petitioners contend that as a result of the uniform 10% VAT, moral incentives to legislation, not as judicially enforceable rights.
the tax on consumption goods of those who are in the higher-income
bracket, which before were taxed at a rate higher than 10%, has been At all events, our 1988 decision in Kapatiran 45 should have laid to rest
reduced, while basic commodities, which before were taxed at rates the question now raised against the VAT. There similar arguments made
ranging from 3% to 5%, are now taxed at a higher rate. against the original VAT Law (Executive Order No. 273) were held to be
hypothetical, with no more basis than newspaper articles which this Court
Just as vigorously as it is asserted that the law is regressive, the opposite found to be "hearsay and [without] evidentiary value." As Republic Act No.
claim is pressed by respondents that in fact it distributes the tax burden 7716 merely expands the base of the VAT system and its coverage as
to as many goods and services as possible particularly to those which are provided in the original VAT Law, further debate on the desirability and
within the reach of higher-income groups, even as the law exempts basic wisdom of the law should have shifted to Congress.
goods and services. It is thus equitable. The goods and properties subject
to the VAT are those used or consumed by higher-income groups. These Only slightly less abstract but nonetheless hypothetical is the contention
include real properties held primarily for sale to customers or held for of CREBA that the imposition of the VAT on the sales and leases of real
lease in the ordinary course of business, the right or privilege to use estate by virtue of contracts entered into prior to the effectivity of the law
industrial, commercial or scientific equipment, hotels, restaurants and would violate the constitutional provision that "No law impairing the
similar places, tourist buses, and the like. On the other hand, small obligation of contracts shall be passed." It is enough to say that the
business establishments, with annual gross sales of less than P500,000, parties to a contract cannot, through the exercise of prophetic
are exempted. This, according to respondents, removes from the coverage discernment, fetter the exercise of the taxing power of the State. For not
of the law some 30,000 business establishments. On the other hand, an only are existing laws read into contracts in order to fix obligations as
occasional paper 43 of the Center for Research and Communication cites a between parties, but the reservation of essential attributes of sovereign
NEDA study that the VAT has minimal impact on inflation and income power is also read into contracts as a basic postulate of the legal order.
distribution and that while additional expenditure for the lowest income The policy of protecting contracts against impairment presupposes the
class is only P301 or 1.49% a year, that for a family earning P500,000 a maintenance of a government which retains adequate authority to secure
year or more is P8,340 or 2.2%. the peace and good order of society. 46

Lacking empirical data on which to base any conclusion regarding these In truth, the Contract Clause has never been thought as a limitation on the
arguments, any discussion whether the VAT is regressive in the sense that exercise of the States power of taxation save only where a tax exemption
it will hit the "poor" and middle-income group in society harder than it will has been granted for a valid consideration. 47 Such is not the case of PAL
the "rich," as the Cooperative Union of the Philippines (CUP) claims in G.R. in G.R. No. 115852, and we do not understand it to make this claim.
No. 115873, is largely an academic exercise. On the other hand, the CUPs Rather, its position, as discussed above, is that the removal of its tax
contention that Congress withdrawal of exemption of producers exemption cannot be made by a general, but only by a specific,
cooperatives, marketing cooperatives, and service cooperatives, while law.chanroblesvirtual|awlibrary
maintaining that granted to electric cooperatives, not only goes against
the constitutional policy to promote cooperatives as instruments of social The substantive issues raised in some of the cases are presented in
justice (Art. XII, 15) but also denies such cooperatives the equal abstract, hypothetical form because of the lack of a concrete record. We
protection of the law is actually a policy argument. The legislature is not accept that this Court does not only adjudicate private cases; that public
required to adhere to a policy of "all or none" in choosing the subject of actions by "non-Hohfeldian" 48 or ideological plaintiffs are now cognizable
taxation. 44 provided they meet the standing requirement of the Constitution; that
under Art. VIII, 1, par. 2 the Court has a "special function" of vindicating
Nor is the contention of the Chamber of Real Estate and Builders constitutional rights. Nonetheless the feeling cannot be escaped that we
Association (CREBA), petitioner in G.R. 115754, that the VAT will reduce do not have before us in these cases a fully developed factual record that
the mark up of its members by as much as 85% to 90% any more concrete. alone can impart to our adjudication the impact of actuality 49 to insure
It is a mere allegation. On the other hand, the claim of the Philippine Press that decision-making is informed and well grounded. Needless to say, we
Institute, petitioner in G.R. No. 115544, that the VAT will drive some of its do not have power to render advisory opinions or even jurisdiction over
members out of circulation because their profits from advertisements will petitions for declaratory judgment. In effect we are being asked to do what
not be enough to pay for their tax liability, while purporting to be based on the Conference Committee is precisely accused of having done in these
the financial statements of the newspapers in question, still falls short of cases to sit as a third legislative chamber to review legislation.
the establishment of facts by evidence so necessary for adjudicating the
question whether the tax is oppressive and confiscatory. We are told, however, that the power of judicial review is not so much
power as it is duty imposed on this Court by the Constitution and that we
Indeed, regressivity is not a negative standard for courts to enforce. What would be remiss in the performance of that duty if we decline to look
Congress is required by the Constitution to do is to "evolve a progressive behind the barriers set by the principle of separation of powers. Art. VIII,
system of taxation." This is a directive to Congress, just like the directive 1, par. 2 is cited in support of this view:chanrob1es virtual 1aw library
to it to give priority to the enactment of laws for the enhancement of
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and (4) That, in view of the absence of a factual foundation of record, claims
enforceable, and to determine whether or not there has been a grave that the law is regressive, oppressive and confiscatory and that it violates
abuse of discretion amounting to lack or excess of jurisdiction on the part vested rights protected under the Contract Clause are prematurely raised
of any branch or instrumentality of the and do not justify the grant of prospective relief by writ of prohibition.
Government.chanroblesvirtualawlibrary
WHEREFORE, the petitions in these cases are DISMISSED.
To view the judicial power of review as a duty is nothing new. Chief Justice
Marshall said so in 1803, to justify the assertion of this power in Marbury Bidin, Quiason and Kapunan, JJ., concur.
v. Madison:chanrob1es virtual 1aw library Separate Opinions

It is emphatically the province and duty of the judicial department to say


what the law is. Those who apply the rule to particular cases must of NARVASA, C.J., concurring:chanrob1es virtual 1aw library
necessity expound and interpret that rule. If two laws conflict with each
other, the courts must decide on the operation of each. 50 I fully concur with the conclusions set forth in the scholarly opinion of my
learned colleague, Mr. Justice Vicente V. Mendoza. I write this separate
Justice Laurel echoed this justification in 1936 in Angara v. Electoral opinion to express my own views relative to the procedural issues raised
Commission:chanrob1es virtual 1aw library by the various petitions and dealt with by some other Members of the
Court in their separate opinions.
And when the judiciary mediates to allocate constitutional boundaries, it
does not assert any superiority over the other departments; it does not in By their very nature, it would seem, discussions of constitutional issues
reality nullify or invalidate an act of the legislature, but only asserts the prove fertile ground for a not uncommon phenomenon: debate marked by
solemn and sacred obligation assigned to it by the Constitution to passionate partisanship amounting sometimes to impatience with adverse
determine conflicting claims of authority under the Constitution and to views, an eagerness on the part of the proponents on each side to assume
establish for the parties in an actual controversy the rights which that the role of, or be perceived as, staunch defenders of constitutional
instrument secures and guarantees to them. 51 principles, manifesting itself in flights of rhetoric, even hyperbole. The
peril in this, obviously, is a diminution of objectivity that quality which,
This conception of the judicial power has been affirmed in several cases 52 on the part of those charged with the duty and authority of interpreting
of this Court following Angara. the fundamental law, is of the essence of their great function. For the
Court, more perhaps than for any other person or group, it is necessary to
It does not add anything, therefore, to invoke this "duty" to justify this maintain that desirable objectivity. It must make certain that on this as on
Courts intervention in what is essentially a case that at best is not ripe for any other occasion, the judicial function is meticulously performed, the
adjudication. That duty must still be performed in the context of a facts ascertained as comprehensively and as accurately as possible, all the
concrete case or controversy, as Art. VIII, 5(2) clearly defines our issues particularly identified, all the arguments clearly understood; else, it
justification in terms of "cases," and nothing but "cases." That the other may itself be accused, by its own members or by others, of a lack of
departments of the government may have committed a grave abuse of adherence to, or a careless observance of, its own procedures, the
discretion is not an independent ground for exercising our power. signatures of its individual members on its enrolled verdicts
Disregard of the essential limits imposed by the case and controversy notwithstanding.chanrobles lawlibrary : rednad
requirement can in the long run only result in undermining our authority
as a court of law. For, as judges, what we are called upon to render is In the matter now before the Court, and whatever reservations some
judgment according to what may appear to be the opinion of the day. people may entertain about their intellectual limitations or moral scruples,
I cannot bring myself to accept the thesis which necessarily implies that
In the preceding pages we have endeavored to discuss, within limits, the the members of our august Congress, in enacting the expanded VAT law,
validity of Republic Act No. 7716 in its formal and substantive aspects as exposed their ignorance, or indifference to the observance, of the rules of
this has been raised in the various cases before us. To sum up, we procedure set down by the Constitution or by their respective chambers,
hold:chanrob1es virtual 1aw library or what is worse, deliberately ignored those rules for some yet
undiscovered purpose nefarious in nature, or at least some purpose other
(1) That the procedural requirements of the Constitution have been than the public weal; or that a few of their fellows, acting as a bicameral
complied with by Congress in the enactment of the statute; conference committee, by devious schemes and cunning maneuvers, and
in conspiracy with officials of the Executive Department and others,
(2) That judicial inquiry whether the formal requirements for the succeeded in "pulling the wool over the eyes" of all their other colleagues
enactment of statutes beyond those prescribed by the Constitution and foisting on them a bill containing provisions that neither chamber of
have been observed is precluded by the principle of separation of powers; our bicameral legislature conceived or contemplated. This is the thesis
that the petitioners would have this Court approve. It is a thesis I consider
(3) That the law does not abridge freedom of speech, expression or the bereft of any factual or logical foundation.
press, nor interfere with the free exercise of religion, nor deny to any of
the parties the right to an education; and Other than the bare declarations of some of the petitioners, or arguments
from the use and import of the language employed in the relevant after third reading transmits its bill to the Senate, there is origination by
documents and records, there is no evidence before the Court adequate to (or in) the House within the contemplation of the Constitution.
support a finding that the legislators concerned, whether of the upper or
lower chamber, acted otherwise than in good faith, in the honest discharge So it is entirely possible, as intimated, that in expectation of the receipt of
of their functions, in the sincere belief that the established procedures a revenue or tax bill from the House of Representatives, the Senate
were being regularly observed or, at least, that there occurred no serious commences deliberations on its own concept of such a legislative measure.
or fatal deviation therefrom. There is no evidence on which reasonably to this, possibly to save time, so that when the House bill reaches it, its
rest a conclusion that any executive or other official took part in or unduly thoughts and views on the matter are already formed and even reduced to
influenced the proceedings before the bicameral conference committee, or writing in the form of a draft statute. This should not be thought illegal, as
that the members of the latter were motivated by a desire to interdicted by the Constitution. what the Constitution prohibits is for the
surreptitiously introduce improper revisions in the bills which they were Senate to begin the legislative process first, by sending its own revenue
required to reconcile, or that after agreement had been reached on the bill to the House of Representatives for its consideration and action. This
mode and manner of reconciliation of the "disagreeing provisions," had is the initiation that is prohibited to the Senate.
resorted to stratagems or employed under-handed ploys to ensure their
approval and adoption by either House. Neither is there any proof that in But petitioners claim that this last was what in fact happened, that the bill
voting on the Bicameral Conference Committee (BCC) version of the that went through the legislative mill and was finally approved as R.A. No.
reconciled bills, the members of the Senate and the House did so in 7716, was the Senate version, SB 1630. This is disputed by the
ignorance of, or without understanding, the contents thereof or the bills respondents. They claim it was House Bill 11197 that, after being
therein reconciled. transmitted to the Senate, was referred after first reading to its
Committee on Ways and Means; was reported out by said Committee;
Also unacceptable is the theory that since the Constitution requires underwent second and third readings, was sent to the bicameral
appropriation and revenue bills to originate exclusively in the House of conference committee and then, after appropriate proceedings therein
Representatives, it is improper if not unconstitutional for the Senate to culminating in extensive amendments thereof, was finally approved by
formulate, or even think about formulating, its own draft of this type of both Houses and became the Expanded VAT Law.
measure in anticipation of receipt of one transmitted by the lower
Chamber. This is specially cogent as regards much-publicized suggestions On whose die does the truth lie? If it is not possible to make that
for legislation (like the expanded VAT Law) emanating from one or more determination from the pleadings and records before this Court, shall it
legislators, or from the Executive Department, or the private sector, etc. require evidence to be presented? No, on both law and principle. The Court
which understandably could be expected to forthwith generate much will reject a case where the legal issues raised, whatever they may be,
Congressional cogitation. depend for their resolution on still unsettled questions of fact. Petitioners
may not, by raising what are concededly novel and weighty constitutional
Exclusive origination, I submit, should have no reference to time of questions, compel the Court to assume the role of a trier of facts. It is on
conception. As a practical matter, origination should refer to the the contrary their obligation, before raising those questions to this Court,
affirmative act which effectively puts the bicameral legislative procedure to see to it that all issues of fact are settled in accordance with the
in motion, i.e., the transmission by one chamber to the other of a bill for procedures laid down by law for proof of facts. Failing this, petitioners
its adoption. This is the purposeful act which sets the legislative would have only themselves to blame for a peremptory dismissal.
machinery in operation to effectively lead to the enactment of a statute.
until this transmission takes place, the formulation and discussions, or the Now, what is really proven about what happened to HB 11197 after it was
reading for three or more times of proposed measures in either chamber, transmitted to the Senate? It seems to be admitted on all sides that after
would be meaningless in the context of the activity leading towards going through first reading, HB 1197 was referred to the Committee on
concrete legislation. Unless transmitted to the other chamber, a bill Ways and Means chaired by Senator Ernesto Herrera.
prepared by either house cannot possibly become law. In other words, the
first affirmative, efficacious step, the operative act as it were, leading to It is however surmised that after this initial step, HB 1197 was never
actual enactment of a statute, is the transmission of a bill from one house afterwards deliberated on in the Senate, that it was there given nothing
to the other for action by the latter. This is the origination that is spoken more than a "passing glance," and that it never went through a proper
of in the Constitution in its Article VI, Section 24, in reference to second and third reading. There is no competent proof to substantiate this
appropriation, revenue, or tariff bills, etc. claim. What is certain that on February 7, 1994, the Senate Committee on
Ways and Means submitted its Report (No. 349) stating that HB 11197 was
It may be that in the Senate, revenue or tax measures are discussed, even considered, and recommending that SB 1630 be approved "in substitution
drafted, and this before a similar activity takes place in the House. This is of S.B. No. 1129, taking into consideration P.S. Res. No. 734 1 and H.B. No.
of no moment, so long as those measures or bills remain in the Senate and 11197." This Report made known to the Senate, and clearly indicates, that
are not sent over to the House. There is no origination of revenue or tax H.B. No. 11197 was indeed deliberated on by the Committee; in truth, as
measures by the Senate in this case. However, once the House completes Senator Herrera pointed out, the BCC later "agreed to adopt (a broader
the drawing up of a similar tax measure in accordance with the prescribed coverage of the VAT) which is closely adhering to the Senate version . . .
procedure, even if this is done subsequent to the Senates own measure with some new provisions or amendments." The plain implication is that
indeed, even if this be inspired by information that a measure of the same the Senate Committee had indeed discussed HB 11197 in comparison with
nature or on the same subject has been formulated in the Senate and the inconsistent parts of SB 1129 and afterwards proposed amendments to
the former in the form of a new bill (No. 1630) more closely akin to the PURPOSES SECTIONS 99, 100, 102, 103, 104, 106, 107, 108 AND 110 OF
Senate bill (No. 1129). TITLE IV, 112, 115, 117 AND 121 OF TITLE V, AND 236, 237, AND 238 OF
TITLE IX, AND REPEALING SECTIONS 1113, 114, 116, 119 AND 120 OF TITLE
And it is a reasonable to suppose as not that later, during the second and V, ALL OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED AND FOR
third readings on March 24, 1994, the Senators, assembled as a body, had OTHER PURPOSES.
before them copies of HB 11197 and SB 1129, as well as of the
Committees new "SB 1630" that had been recommended for their having met, after full and free conference, has agreed to recommend and
approval, or at the very least were otherwise perfectly aware that they do hereby recommend to their respective Houses that House Bill No.
were considering the particular provisions of these bills. That there was 11197, in consolidation with Senate Bill No. 1630, be approved in
such a deliberation in the Senate on HB 11197 in light of inconsistent accordance with the attached copy of the bill as reconciled and approved
portions of SB 1630, may further be necessarily inferred from the request, by the conferees.
made by the Senate on the same day, March 24, 1994, for the convocation
of a bicameral conference committee to reconcile "the disagreeing Approved."cralaw virtua1aw library
provisions of said bill (SB 1630) and House Bill No. 11197," a request that
could not have been made had not the Senators more or less closely The Report, it will be noted, explicitly adverts to House Bill No. 11197, it
examined the provisions of HB 11197 and compared them with those of being in fact mentioned ahead of Senate Bill No. 1630; graphically shows
the counterpart Senate measures. the very close identity of the subjects of both bills (indicated in their
respective titles); and clearly says that the committee met in" full and free
Were the proceedings before the bicameral conference committee fatally conference" on the "disagreeing provisions" of both bills (obviously in an
flawed? The affirmative is suggested because the committee allegedly effort to reconcile them); and that reconciliation of said "disagreeing
overlooked or ignored the fact that SB 1630 could not validly originate in provisions" had been effected, the BCC having agreed that "House Bill No.
the Senate, and that HB 11197 and SB 1630 never properly passed both 11197, in consolidation with Senate Bill No. 1630, be approved in
chambers. The untenability of these contentions has already been accordance with the attached copy of the bill as reconciled and approved
demonstrated. Now, demonstration of the indefensibility of other by the conferees."cralaw virtua1aw library
arguments purporting to establish the impropriety of the BCC proceedings
will be attempted. It may be concluded, in other words, that, conformably to the procedure
provided in the Constitution with which all the Members of the bicameral
There is the argument, for instance, that the conference committee never conference committee cannot but be presumed to be familiar, and no proof
used HB 11197 even as "frame of reference" because it does not appear to the contrary having been adduced on the point, it was the original bill
that the suggestion therefor (made by House Panel Chairman Exequiel (HB 11197) which said body had considered and deliberated on in detail,
Javier at the bicameral conference committees meeting on April 19, 1994, reconciled or harmonized with SB 1630, and used as basis for drawing up
with the concurrence of Senator Maceda) was ever resolved, the minutes the amended version eventually reported out and submitted to both
being regrettably vague as to what occurred after that suggestion was houses of Congress.
made. It is, however, as reasonable to assume that it was, as it was not,
given the vagueness of the minutes already alluded to. In fact, a reading It is further contended that the BCC was created and convoked
of the BCC Report persuasively demonstrates that HB 11197 was not only prematurely, that SB 1630 should first have been sent to the House of
utilized as a "frame of reference" but actually discussed and deliberated Representatives for concurrence It is maintained, in other words, that the
on.chanrobles.com.ph : virtual law library latter chamber should have refused the Senate request for a bicameral
conference committee to reconcile the "disagreeing provisions" of both
Said BCC Report pertinently states: 2 bills, and should have required that SB 1630 be first transmitted to it. This,
seemingly, is nit-picking given the urgency of the proposed legislation as
"CONFERENCE COMMITTEE REPORT certified by the President (to both houses, in fact). Time was of the
essence, according to the Presidents best judgment as regards which
The Conference Committee on the disagreeing provisions of House Bill No. absolutely no one in either hamber of Congress took exception, general
11197, entitled:chanrob1es virtual 1aw library acceptance being on the contrary otherwise manifested and that
judgment the Court will not now question. In light of that urgency, what
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT) SYSTEM TO WIDEN was so vital or indispensable about such a transmittal that its absence
ITS TAX BASE AND ENHANCE ITS ADMINISTRATION, AMENDING FOR THESE would invalidate all else that had been done towards enactment of the law,
PURPOSES SECTIONS 99, 100, 102, 1013, 104, 105, 106, 107, 108 AND 110 completely escapes me, specially considering that the House had
OF TITLE IV, 112, 115 AND 116 OF TITLE V, AND 236, 237, AND 238 OF TITLE immediately acceded without demur to the request for convocation of the
IX, AND REPEALING SECTIONS 113 SD AND 114 OF TITLE V, ALL OF THE conference committee.
NATIONAL INTERNAL REVENUE CODE, AS AMENDED.
What has just been said should dispose of the argument that the
and Senate Bill No. 1630 entitled:chanrob1es virtual 1aw library statement in the enrolled bill, that "This Act which is a consolidation of
House Bill No. 11197 and Senate Bill No. 11630 was finally passed by the
AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT) SYSTEM TO WIDEN House of Representatives and the Senate on April 27, 1994 and May 2,
ITS TAX BASE AND ENHANCE ITS ADMINISTRATION, AMENDING FOR THESE 1994," necessarily signifies that there were two (20 bills separately
introduced, retaining their independent existence until they reached the forbidden to propose additional new provisions, even on matters
bicameral conference committee where they were consolidated, and necessarily or reasonably connected with or germane to items in the bills
therefore, the VAT law did not originate exclusively in the House having being reconciled?
originated in part in the Senate as SB 1630, which bill was not embodied in
but merely merged with HB 11197, retaining its separate identity until it In answer, it is postulated that the reconciliation function is quite limited.
was joined by the BCC with the house measure. The more logical, and in these cases, the conference committee should have confined itself to
fairer, course is to construe the expression, "consolidation of House Bill reconciliation of differences or inconsistencies only by (a) restoring
No. 11197 and Senate Bill No. 11630" in the context of accompanying and provisions of HB 11197 aliminated by SB 1630, or (b) sustaining wholly or
contemporaneous statements, i.e.: (a) the declaration in the BCC Report, partly the Senate amendments, or (c) as a compromise, agreeing that
supra, that the committee met to reconcile the disagreeing provisions of neither provisions nor amendments be carried into the final form of HB
the two bills, "and after full and free conference" on the matter, agreed 11197 for submission to both chambers of the legislature.
and so recommended that "house Bill No. 11197, in consolidation with
Senate Bill No. 1630, be approved in accordance with the attached copy of The trouble is, it is theorized, the committee incorporated activities or
the bill as reconciled and approved by the conferees;" and (b) the transactions which were not within the contemplation of both bills; it made
avernment of Senator Herrera, in the Report of the Ways and Means additions and deletions which did not enjoy the enlightenment of initial
Committee, supra, that the committee had actually "considered" committee studies; it exercised what is known as an "ex post veto power"
(discussed) HB No. 11197 and taken it "into consideration" in granted to it by no law, rule or regulation, a power that in truth is denied
recommending that its own version of the measure (SB 1630) be the one to it by the rules of both the Senate and the House. In substantiation, the
approved. Senate rule is cited, similar to that of the House, providing that
"differences shall be settled by a conference committee" whose report
That the Senate might have drawn up its own version of the expanded VAT shall contain "detailed and sufficiently explicit statement of the changes in
bill, contemporaneously with or even before the House did, is of no or amendments to the subject measure, . . . (to be) signed by the
moment. It bears repeating in this connection that no VAT bill ever conferees;" as well as the "Jeffersons Manual," adopted by the Senate as
originated in the Senate; neither its SB 1129 or SB 1630 or any of its drafts supplement to its own rules, directing that the managers of the conference
was ever officially transmitted to the House as an initiating bill which, as must confine themselves to differences submitted to them; they may not
already pointed out, is what the Constitution forbids; it was HB 11197 that include subjects not within the disagreements even though germane to a
was first sent to the Senate, underwent first reading, was referred to question in issue."cralaw virtua1aw library
Committee on Ways and means and there discussed in relation to and in
comparison with the counterpart Senate version or versions the mere It is significant that the limiting proviso in the relevant rules has been
formulation of which was, as also already discussed, not prohibited to it construed and applied as directory, not mandatory. During the oral
and afterwards considered by the Senate itself, also in connection with SB argument, counsel for petitioners admitted that the practice for decades
1630, on second and third readings. HB 1197 was in the truest sense, the has been for bicameral conference committees to include such provisions
originating bill. in the reconciled bill as they believed to be germane or necessary and
acceptable to both chambers, even if not within any of the "disagreeing
An issue has also arisen respecting the so-called "enrolled bill doctrine" provision," and the reconciled bills, containing such provisions had
which, it is said, whatever sacrosanct status it might originally have invariably been approved and adopted by both houses of Congress. It is a
enjoyed, is now in bad odor with modern scholars on account of its practice, they say, that should be stopped. But it is a practice that
imputed rigidity and unrealism; it being also submitted that the ruling in establishes in no uncertain manner the prevailing concept in both houses
Mabanag v. Lopez Vito (78 Phil. 1) and the cases reaffirming it, is no longer of Congress of the permissible and acceptable modes of reconciliation that
good law, it being based on a provision of the Code of Civil Procedure 3 their conference committees may adopt, one whose undesirability is not all
long since stricken from the statute books. that patent if not, indeed, incapable of unquestionable demonstration. The
fact is that conference committees only take up bills which have already
I would myself consider the "enrolled bill" theory as laying down a been freely and fully discussed in both chambers of the legislature, but as
presumption of so strong character as to be well nigh absolute or to which there is need of reconciliation in view of "disagreeing provisions"
conclusive, fully in accord with the familiar and fundamental philosophy of between them; and both chambers entrust the function of reconciling the
separation of powers. The result, as far as I am concerned, is to make bills to their delegates at a conference committee with full awareness, and
discussion of the enrolled bill principle purely academic; for as already tacit consent, that conformably with established practice unquestioningly
pointed out, there is no proof worthy of the name of any facts to justify its observed over many years, new provisions may be included even if not
reexamination and, possibly, disregard. within the "disagreeing provisions" but of which, together with other
changes, they will be given detailed and sufficiently explicit information
The other question is, what the nature of the power given to a bicameral prior to voting on the conference committee version.
conference committee of reconciling differences between, or "disagreeing
provisions" in, a bill originating from the House in relation to amendments In any event, a fairly recent decision written for the Court by Senior
proposed by the Senate whether as regards some or all of its Associate Justice Isagani A. Cruz, promulgated on November 11, 1993,
provisions? Is the mode of reconciliation, subject to fixed procedure and (G.R. No. 105371, The Philippine Judges Association, etc., Et. Al. v. Hon.
guidelines? What exactly can the committee do, or not do? Can it only Pete Prado, etc., Et. Al.), should leave no doubt of the continuing vitality of
clarify or revise provisions found in either Senate or House bill? Is it the enrolled bill doctrine and give an insight into the nature of the
reconciling function of bicameral conference committees. In that case, a such official assurances from a coordinate department of the government,
bilateral conference committee was constituted and met to reconcile to which we owe, at the very least, a becoming courtesy." chanrobles law
Senate Bill No. 720 and House Bill No. 4200. It adopted a "reconciled" library : red
measure that was submitted to and approved by both chambers of
Congress and ultimately signed into law by the President, as R.A. No. Withal, an analysis of the changes made by the conference committee in
7354. A provision in this statute (removing the franking privilege from the HB 11197 and SB 1630 by way of reconciling their "disagreeing provision,"
courts, among others) was assailed as being an invalid amendment assailed by petitioners as unauthorized or incongruous reveals that
because it was not included in the original version of either the senate or many of the changes related to actual "disagreeing provisions," and that
the house bill and hence had generated no disagreement between them those that might perhaps be considered as entirely new are nevertheless
which had to be reconciled. The Court held:jgc:chanrobles.com.ph necessarily or logically connected with or germane to particular matters in
the bills being reconciled.
"While it is true that a conference committee is the mechanism for
compromising differences between the Senate and the House, it is not For instance, the change made by the bicameral conference committee
limited in its jurisdiction to this question. Its broader function is described (BCC) concerning amendments to Section 99 of the National Internal
thus:chanrob1es virtual 1aw library Revenue Code (NIRC) the addition of "lessors of goods or properties and
importers of goods" is really reconciliation of disagreeing provisions, for
A conference committee may deal generally with the subject matter or it while HB 11197 mentions as among those subject to tax, "one who sells,
may be limited to resolving the precise differences between the two barters, or exchanges goods or properties and any person who leases
houses. Even where the conference committee is not by rule limited in its personal properties," SB 1630 does not. The change also merely clarifies
jurisdiction, legislative custom severely limits the freedom with which new the provision by providing that the contemplated taxpayers includes
subject matter can be inserted into the conference bill. But occasionally a "importers." The revision as regards the amendment to Section 100, NIRC,
conference committee produces unexpected results, results beyond its is also simple reconciliation, being nothing more than the adoption by the
mandate. These excursions occur even where the rules impose strict BCC of the provision in HB 11197 governing the sale of gold to Bangko
limitations on conference committee jurisdiction. This is symptomatic of Sentral, in contrast to SB 1630 containing no such provision. Similarly, only
the authoritarian power of conference committee (Davies, Legislative Law simple reconciliation was involved as regards approval by the BCC of a
and Process: In A Nutshell, 1987 Ed., p. 81). provision declaring as not exempt, the sale of real properties primarily
held for sale to customers or held for lease in the ordinary course of trade
It is a matter of record that the Conference Committee Report on the bill in or business, which provision is found in HB 11197 but not in SB 1630; as
question was returned to and duly approved by both the Senate and the regards the adoption by the BCC of a provision on life insurance business,
House of Representatives. Thereafter, the bill was enrolled with its contained in SB 1630 but not found in HB 11197; as regards adoption by
certification by Senate President Neptali A. Gonzales and Speaker Ramon the BCC of the provision in SB 1630 for determent of tax on certain goods
V. Mitra of the House of Representatives as having been duly passed by and services for no longer than 3 years, as to which there was no
both Houses of Congress. It was then presented to and approved by counterpart provision in SB 11197; and as regards the fixing of a period for
President Corazon C. Aquino on April 3, 1992. the adoption of implementing rules, a period being prescribed in SB 1630
and none in HB 11197.
Under the doctrine of separation of powers, the Court may not inquire
beyond the certification of the approval of a bill from the presiding officers In respect of other revisions, it would seem that questions logically arose
of Congress. Casco Philippine Chemical Co. v. Gimenez (7 SCRA 347) laid in the course of the discussion of specific "disagreeing provisions" to which
down the rule that the enrolled bill is conclusive upon the Judiciary (except answers were given which, because believed acceptable to both houses of
in matters that have to be entered in the journals like the yeas and nays Congress, were placed in the BCC draft. For example, during consideration
on the final reading of the bill) (Mabanag v. Lopez Vito, 78 Phil. 1). The of radio and television time (Sec. 100, NIRC) dealt with in both House and
journals are themselves also binding on the Supreme Court, as we held in Senate bills, the question apparently came up, the relevance of which is
the old (but still valid) case of U.S. v. Pons (34 Phil. 729), where we apparent on its face, relative to satellite transmission and cable television
explained the reason thus:chanrob1es virtual 1aw library time. Hence, a provision in the BCC bill on the matter. again, while
deliberating on the definition of goods or properties in relation to the
To inquire into the veracity of the journals of the Philippine legislature provision subjecting sales thereof to tax, a question apparently arose,
when they are, as we have said, clear and explicit, would be to violate both logically relevant, about real properties intended to be sold by a person in
the letter and spirit of the organic laws by which the Philippine economic difficulties, or because he wishes to buy a car, i.e., not as part of
Government was brought into existence, to invade a coordinate and a business, the BCC evidently resolved to clarify the matter excluding from
independent department of the Government, and to interfere with the the tax, "real properties held primarily for sale to customers or held for
legitimate powers and functions of the Legislature. Applying these lease in the ordinary course of business." And in the course of
principles, we shall decline to look into the petitioners charges that an consideration of the term, sale or exchange of services (Sec 102, NIRC),
amendment was made upon the last reading of the bill that eventually R.A. the inquiry most probably was posed as to whether the term should be
No. 7354 and that copies thereof in its final form were not distributed understood as including other services: e.g., services of lessors of
among the members of each House. Both the enrolled bill and the property whether real or personal, of warehousemen, of keepers of
legislative journals certify that the measure was duly enacted i.e., in resthouses, pension houses, inns, resorts, or of common carriers, etc., and
accordance with Article VI, Sec. 26(2) of the Constitution. We are bound by presumably the BCC resolved to clarify the matter by including the
services just mentioned. Surely, changes of this nature are obviously to be journals of the Philippine Legislature, when they are, as we have said,
expected in proceedings before bicameral conference committees and may clear and explicit, would be to violate both the letter and the spirit of the
even be considered grist for their mill, given the history of such BCCs and organic laws by which the Philippine Government was brought into
their general practice here and abroad. existence, to invade a coordinate and independent department of the
Government, and to interfere with the legitimate powers and functions of
In any case, all the changes and revisions, and deletions, made by the the Legislature. But counsel in his argument says that the public knows
conference committee were all subsequently considered by and approved that the Assemblys clock was stopped on February 28, 1914, at midnight
by both the Senate and the House, meeting and voting separately. It is an and left so until the determination of the discussion of all pending
unacceptable theorization, to repeat, that when the BCC report and its matters. Or, in other words, the hands of the clock were stayed in order to
proposed bill were submitted to the Senate and the House, the members enable the Assembly to effect and adjournment apparently within the fixed
thereof did not bother to read, or what is worse, having read did not time by the Governors proclamation for the expiration of the special
understand, what was before them, or did not realize that there were new session, in direct violation of the Act of Congress of July 1, 1902. If the
provisions in the reconciled version unrelated to any "disagreeing clock was, in fact, stopped, as here suggested, "the resultant evil might be
provisions," or that said new provisions or revisions were effectively slight as compared with that of altering the probative force and character
concealed from them. of legislative records, and making the proof of legislative action depend
upon uncertain oral evidence, liable to loss by death or absence, and so
Moreover, it certainly was entirely within the power and prerogative of imperfect on account of the treachery of memory."cralaw virtua1aw library
either legislative chamber to reject the BCC bill and require the
organization of a new bicameral conference committee. That this option . . . The journals say that the Legislature adjourned at 12 midnight on
was not exercised by either house only proves that the BCC measure was February 28, 1914. This settles the question, and the court did not err in
found to be acceptable as in fact it was approved and adopted by both declining to go beyond the journals.
chambers.
As one who has always respected the rationale of the separation of
I vote to DISMISS the petitions for lack of merit. powers, I realize only too well the serious implications of the relaxation of
the doctrine except only for the weightiest of reasons. The lowering of the
Feliciano and Melo, JJ., concur. barriers now dividing the three major branches of the government could
lead to invidious incursions by one department into the exclusive domains
CRUZ, J., dissenting:chanrob1es virtual 1aw library of the other departments to the detriment of the proper discharge of the
functions assigned to each of them by the Constitution.cralawnad
It is curious and almost incredible fact that at the hearing of these cases
on July 7, 1994, the lawyers who argued for the petitioners two of them Still, while acknowledging the value of tradition and the reasons for
former presidents of the Senate and the third also a member of that body judicial non-interference announced in Pons, I am not disinclined to take a
all asked this Court to look into the internal operations of their Chamber second look at the ruling from a more pragmatic viewpoint and to tear
and correct the irregularities they claimed had been committed there as down, if we must, the iron curtain it has hung, perhaps improvidently,
well as in the House of Representatives and in the bicameral conference around the proceedings of the legislature.
committee.
I am persuaded even now that where a specific procedure is fixed by the
While a member of the legislature would normally resist such intervention Constitution itself, it should not suffice for Congress to simply say that the
and invoke the doctrine of separation of powers to protect Congress from rules have been observed and flatly consider the matter closed. It does not
what he would call judicial intrusion, these counsel practically implored have to be as final as that. I would imagine that the judiciary, and
the Court to examine the questioned proceedings and to this end go particularly this Court, should be able to verify that statement and
beyond the journals of each House, scrutinize the minutes of the determine for itself, through the exercise of its own powers, if the
committee, and investigate all other matters relating to the passage of the Constitution has, indeed, been obeyed.
bill (or bills) that eventually became R.A. No. 7716.
In fact, the Court has already said that the question of whether certain
In effect, the petitioners would have us disregard the time-honored procedural rules have been followed is justiciable rather than political
inhibitions laid down by the court upon itself in the landmark case of U.S. because what is involved is the legality and not the wisdom of the act in
v. Pons (34 Phil. 725), where it refused to consider extraneous evidence to question. so we ruled in Sanidad v. Commission on Elections (73 SCRA 333)
disprove the recitals in the journals of the Philippine Legislature that it on the amendment of the Constitution; in Daza v. Singson (180 SCRA 496)
had adjourned sine die at midnight of February 28, 1914. Although it was on the composition of the Commission on Appointments; and in the earlier
generally known then that the special session had actually exceeded the case of Taada v. Cuenco (100 SCRA 1101) on the organization of the
deadline fixed by the Governor-General in his proclamation, the Court Senate Electoral Tribunal, among several other cases.
chose to be guided solely by the legislative journals, holding significantly
as follows:chanrob1es virtual 1aw library By the same token, the ascertainment of whether a bill underwent the
obligatory three readings in both Houses of Congress should not be
. . . From their very nature and object, the records of the legislature are as considered an invasion of the territory of the legislature as this would not
important as those of the judiciary, and to inquire into the veracity of the involve an inquiry into its discretion in approving the measure but only the
manner in which the measure was enacted. Senate on April 27, 1994, and May 2, 1994.

These views may upset the conservatives among us who are most Let us turn to Webster for the meaning of certain words,
comfortable when they allow themselves to be petrified by precedents
instead of venturing into uncharted waters. To be sure, there is much to be To "originate" is "to bring into being; to create something (original); to
said of the wisdom of the past expressed by vanished judges talking to the invent; begin; start." The word "exclusively" means "excluding all others"
future. Via trita est tuttisima. Except when there is a need to revise them and is derived from the word "exclusive," meaning "not shared or divided;
because of an altered situation or an emergent idea, precedents should sole; single." Applying these meanings, I would read Section 24 as saying
tell us that, indeed, the trodden path is the safest path. that the bills mentioned therein must be brought into being, or created, or
invented, or begun or started, only or singly or by no other body than the
It could be that the altered situation has arrived to welcome the emergent House of Representatives.
idea. The jurisdiction of this Court has been expanded by the Constitution,
to possibly include the review the petitioners would have us make of the According to the certification, R.A. No. 7716 "is a consolidation of House
congressional proceedings being questioned. Perhaps it is also time to Bill No. 11197 and Senate Bill No. 1630." Again giving the words used their
declare that the activities of Congress can no longer be smoke-screened in natural and ordinary sense conformably to an accepted canon of
the inviolate recitals of its journals to prevent examination of its construction, I would read the word "consolidation" as a "combination or
sacrosanct records in the name of the separation of powers. merger" and derived from the word "consolidate," meaning "to combine
into one; merge; unite."cralaw virtua1aw library
But then again, perhaps all this is not yet necessary at this time and all
these observations are but wishful musings for more activist judiciary. For The two bills were separately introduced in their respective Chambers.
I find that this is not even necessary, at least for me, to leave the trodden Both retained their independent existence until they reached the
path in the search for new adventures in the byways of the law. The bicameral conference committee where they were consolidated. It was this
answer we seek, as I see it, is not far afield It seems to me that it can be consolidated measure that was finally passed by Congress and submitted
found through a study of the enrolled bill alone and that we do not have to to the President of the Philippines for his approval.
go beyond that measure to ascertain if R.A. No. 7716 has been validly
enacted. House Bill No. 11197 originated in the House of Representatives but this
was not the bill that eventually became R.A. No. 7716. The measure that
It is settled in this jurisdiction that in case of conflict between the enrolled was signed into law by President Ramos was the consolidation of that bill
bill and the legislative journals, it is the former that should prevail except and another bill, viz., Senate Bill No. 1630, which was introduced in the
only as to matters that the Constitution requires to be entered in the Senate. The resultant enrolled bill thus did not originate exclusively in the
journals. (Mabanag v. Lopez Vito, 78 Phil. 1). These are the yeas and nays House of Representatives. The enrolled bill itself says that part of it (and it
on the final reading of a bill or on any question at the request of at least does not matter to what extent) originated in the Senate.
one-fifth of the members of the House (Constitution, Art. VI, Sec. 16 [4]),
the objections of the President to a vetoed bill or item (Ibid, Sec 27 [1]), It would have been different if the only participation of the Senate was in
and the names of the members voting for or against the overriding of his the amendment of the measure that was originally proposed in the House
veto (Id. Section 27 [1]), The origin of a bill is not specifically required by of Representatives. But this was not the case. The participation of the
the Constitution to be entered in the journals. Hence, on this particular Senate was not in proposing or concurring with amendments that would
matter, it is the recitals in the enrolled bill and not in the journals that have been incorporated in House Bill No. 11197. Its participation was in
must control. originating its own Senate Bill No. 1630, which was not embodied in but
merged with House Bill No. 11197.
Article VI, Section 24, of the Constitution provides:chanrob1es virtual 1aw
library Senate Bill No. 1630 was not even an amendment by substitution,
assuming this was permissible. To "substitute" means "to take the place
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of; to put or use in place of another." Senate Bill No. 1630 did not, upon its
of the public debt, bills of local application, and private bills shall originate approval, replace (and thus eliminate) House Bill No. 11197. Both bills
exclusively in the House of Representatives, but the Senate may propose retained their separate identities until they were joined or united into
or concur with amendments. what became the enrolled bill and ultimately R.A. No. 7716.

The enrolled bill submitted to and later approved by the President of the The certification in the enrolled bill says it all. It is clear that R.A. No. 7716
Philippines as R.A. No. 7716 was signed by the President of the Senate and did not originate exclusively in the House of Representatives.
the speaker of the House of Representatives. It carried the following
certification over the signatures of the Secretary of the Senate and the To go back to my earlier observations, this conclusions does not require
Acting Secretary of the House of Representatives:chanrob1es virtual 1aw the reversal of U.S. v. Pons and an inquiry by this Court into the
library proceedings of the legislature beyond the recitals of its journals. All we
need to do is consider the certification in the enrolled bill and, without
This Act which is a consolidation of House Bill No. 11197 and Senate Bill entering the precincts of Congress, declare that by its own admission it
No. 11630 was finally passed by the House of Representative and the has, indeed, not complied with the Constitution.
the time-honored doctrine of separation of powers, cannot substitute its
While this Court respects the prerogatives of the other departments, it will judgment for that of the President (and Congress) as to the wisdom,
not hesitate to rise to its higher duty to require from them, if they go justice and advisability of the adoption of the VAT." 3
astray, full and strict compliance with the fundamental law. Our fidelity to
it must be total. There is no loftier principle in our democracy than the This Court should not, as a rule, concern itself with questions of policy,
supremacy of the Constitution, to which all must submit. much less, economic policy. That is better left to the two (2) political
branches of government. That the expanded VAT law is unwise, unpopular
I vote to invalidate R.A. No. 7716 for violation of Article VI, Sec. 24, of the and even anti-poor, among other things said against it, are arguments and
Constitution. considerations within the realm of policy-debate, which only Congress and
the Executive have the authority to decisively confront, alleviate, remedy
PADILLA, J., concurring:chanrob1es virtual 1aw library and resolve.
I II

The original VAT law and the expanded VAT law The procedure followed in the approval of Rep. Act No. 7716.

In Kapatiran v. Tan, 1 where the ponente was the writer of this Separate Petitioners however posit that the present case raises a far-reaching
Opinion, a unanimous Supreme Court en banc upheld the validity of the constitutional question which the Curt is duty-bound to decide under its
original VAT law (Executive Order No. 273, approved on 25 July 1987). It expanded jurisdiction in the 1987 Constitution 4. Petitioners more
will, in my view, be pointless at this time to re-open arguments advanced specifically question and impugn the manner by which the expanded VAT
in said case as to why said VAT law was invalid, and it will be equally law (Rep. Act No. 7716) was approved by Congress. They contend that it
redundant to re-state the principles laid down by the Court in the same was approved in violation of the Constitution from which fact it follows, as
case affirming the validity of the VAT law as a tax measure. And yet, the a consequence, that the law is null and void. Main reliance of the
same arguments are, in effect, marshalled against the merits and petitioners in their assault is Section 24, Art. VI of the Constitution which
substance of the expanded VAT law (Rep. Act No. 7716, approved on 5 May provides:jgc:chanrobles.com.ph
1994). The same Supreme Court decision should therefore dispose, in the
main, of such arguments, for the expanded VAT law is predicated basically "Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase
on the same principles as the original VAT law, except that now the tax of the public debt, bill of local application, and private bills shall originate
base of the VAT imposition has been expanded or broadened. exclusively in the House of Representatives, but the Senate may propose
or concur with amendments."cralaw virtua1aw library
It only needs to be stated what actually should be obvious that a tax
measure, like the expanded VAT law (Republic Act No. 7716), is enacted by While it should be admitted at the outset that there was no rigorous and
Congress and approved by the President in the exercise of the States strict adherence to the literal command of the above provision, it may
power to tax, which is an attribute of sovereignty. And while the power to however be said, after careful reflection, that there was substantial
tax, if exercised without limit, is a power to destroy, and should therefore, compliance with the provision.
not be allowed in such form, it has to be equally recognized that the power
to tax is an essential right of government. Without taxes, basic services to There is no question that House Bill No. 11197 expanding the VAT law
the people can come to a halt; economic progress will be stunted, and, in originated from the House of Representatives. It is undeniably a House
the long run, the people will suffer the pains of stagnation and measure. On the other hand, Senate Bill No. 1129, also expanding the VAT
retrogression. law, originated from the Senate. It is undeniably a Senate measure which,
in point of time, actually antedated House Bill No. 11197.
Consequently, upon careful deliberation, I have no difficulty in reaching
the conclusion that the expanded VAT law comes within the legitimate But it is of record that when House Bill No. 11197 was, after approval by
power of the state to tax. And as I had occasion to previously the House, sent to the Senate, it was referred to, and considered by the
state:jgc:chanrobles.com.ph Senate Committee on Ways and Means (after first reading) together with
Senate Bill No. 1129, and the Committee came out with Senate Bill No.
"Constitutional Law, to begin with, is concerned with power not political 1630 in substitution of Senate Bill No. 1129 but after expressly taking into
convenience, wisdom, exigency, or even necessity. Neither the Executive consideration House Bill No. 11197.
nor the Legislative (Commission on Appointments) can create power where
the Constitution confers none." 2 Since the Senate is, under the above-quoted constitutional provision,
empowered to concur with a revenue measure exclusively originating from
Likewise, in the first VAT case, I said:jgc:chanrobles.com.ph the House, or to propose amendments thereto, to the extent of proposing
amendments by SUBSTITUTION to the House measure, the approval by the
"In any event, if petitioners seriously believe that the adoption and Senate of Senate Bill No. 1630, after it had considered House Bill No.
continued application of the VAT are prejudicial to the general welfare or 11197, may be taken, in my view, as an AMENDMENT BY SUBSTITUTION by
the interests of the majority of the people, they should seek recourse and the Senate not only of Senate Bill No. 1129 but of House Bill No. 11197 as
relief from the political branches of the government. The Court, following well which, it must be remembered, originated exclusively from the House.
emergency and the Senate responded accordingly. While I would be the
But then, in recognition of the fact that House Bill No. 11197 which last to say that this Court cannot review the exercise of such power by the
originated exclusively from the House and Senate Bill No. 1630 contained President in appropriate cases ripe for judicial review, I am not prepared
conflicting provisions, both bills (House Bill No. 11197 and Senate Bill No. however to say that the President gravely abused his discretion in the
1630) were referred to the Bicameral Conference Committee for joint exercise of such power as to require that this Court overturn his action. We
consideration with a view to reconciling their conflicting provisions. have been shown no fact or circumstance which would impugn the
judgment of the President, concurred in by the Senate, that there was an
The Conference Committee came out eventually with a Conference emergency that required the immediate enactment of Senate Bill No. 1630.
Committee Bill which was submitted to both chambers of Congress (the On the other hand, a becoming respect for a co-equal and coordinate
Senate and the House). The Conference Committee reported out a bill department of government points that weight and credibility be given to
consolidating provisions in House Bill No. 11197 and Senate Bill No. 1630. such Presidential judgment.
What transpired in both chambers after the Conference Committee Report
was submitted to them is not clear from the records in this case. What is The authority or power of the Conference Committee to make insertions in
clear however is that both chambers voted separately on the bill reported and deletions from the bills referred to it, namely, House Bill No. 11197
out by the Conference Committee and both chambers approved the bill of and Senate Bill No. 1630 is likewise assailed by petitioners. Again, what
the Conference Committee. appears important here is that both chambers approved and ratified the
bill as reported out by the Conference Committee (with the reported
To me then, what should really be important is that both chambers of insertions and deletions). This is perhaps attributable to the known
Congress approved the bill reported out by the Conference Committee. In legislative practice of allowing a Conference Committee to make insertions
may considered view, the act of both chambers of Congress in approving in and deletions from bills referred to it for consideration, as long as they
the Conference Committee bill, should put an end to any inquiry by this are germane to the subject matter of the bills under consideration.
Court as to how the bill came out. What is more, such separate approvals Besides, when the Conference Committee made the insertions and
CURED whatever constitutional infirmities may have arisen in the deletions complained of by petitioners, was it not actually performing the
procedures leading to such approvals. For, if such infirmities were serious task assigned to it of reconciling conflicting provisions in House Bill No.
enough to impugn the very validity of the measure itself, there would have 11197 and Senate Bill No. 1630?
been an objection or objections from members of both chambers to the
approval. The Court has been shown no such objection on record in both This Court impliedly if not expressly recognized the fact of such legislative
chambers.chanroblesvirtual|awlibrary practice in Philippine Judges Association, etc. v. Hon. Peters Prado, etc., 5
In said case, we stated thus:jgc:chanrobles.com.ph
Petitioners contend that there were violations of Sec. 26 paragraph 2,
Article VI of the Constitution which provides:jgc:chanrobles.com.ph "The petitioners also invoke Sec. 74 of the Rules of the House of
Representatives, requiring that amendment to any bill when the House
"Sec. 26. . . . and the Senate shall have differences thereon may be settled by a
conference committee of both chambers. They stress that Sec. 35 was
(2) No bill passed by either House shall become a law unless it has passed never a subject of any disagreement between both Houses and so the
three readings on separate days, and printed copies thereof in its final second paragraph could not have been validly added as an amendment.
form have been distributed to its Members three days before its passage,
except when the President certifies to the necessity of its immediate These arguments are unacceptable.
enactment to meet a public calamity or emergency. Upon the last reading
of a bill, no amendment thereto shall be allowed, and the vote thereon While it is true that a conference committee is the mechanism for
shall be taken immediately thereafter, and the yeas and nays entered in compromising differences between the Senate and the House, it is not
the Journal."cralaw virtua1aw library limited in its jurisdiction to this question. Its broader function is described
thus:chanrob1es virtual 1aw library
in that, when Senate Bill No. 1630 (the Senate counterpart of House Bill
No. 11197) was approved by the Senate, after it had been reported out by A conference committee may deal generally with the subject matter or it
the Senate Committee on Ways and Means, the bill went through second may be limited to resolving the precise differences between the two
and third readings on the same day (not separate days) and printed copies houses. Even where the conference committee is not by rule limited in its
thereof in its final form were not distributed to the members of the Senate jurisdiction, legislative custom severely limits the freedom with which new
at least three (3) days before its passage by the Senate. But we are told by subject matter can be inserted into the conference bill. But occasionally a
the respondents that the reason for this "short cut" was that the President conference committee produces unexpected results, results beyond its
had certified to the necessity of the bills immediate enactment to meet an mandate. These excursions occur even where the rules impose strict
emergency a certification that, by leave of the same constitutional limitations on conference committee jurisdiction. This is symptomatic of
provision, dispensed with the second and third readings on separate days the authoritarian power of conference committee (Davies, Legislative Law
and the printed form at least three (3) days before its passage. and Process: In A Nutshell, 1986 Ed., p. 81).

We have here then a situation where the President did certify to the It is a matter of record that the Conference Committee Report on the bill in
necessity of Senate Bill No. 1630s immediately enactment to meet an question was returned to and duly approved by both the Senate and the
House of Representatives. Thereafter, the bill was enrolled with its provisions of the law have to be examined separately and carefully.
certification by Senate President Neptali A. Gonzales and Speaker Ramon
V. Mitra of the House of Representatives as having been duly passed by Rep. Act. No. 7716 in imposing a value-added tax on circulation income of
both Houses of Congress. It was then presented to and approved by newspapers and similar publications and on income derived from
President Corazon C. Aquino on April 3, 1992."cralaw virtua1aw library publishing advertisements in newspapers 9, to my mind, violates Sec. 4,
Art. III of the Constitution. Indeed, even the Executive Department has
It would seem that if corrective measures are in order to clip the powers of tried to cure this defect by the issuance of BIR Regulation No. 11-94
the Conference Committee, the remedy should come from either or both precluding implementation of the tax in this area. It should be clear,
chambers of Congress, not from this Court, under the time-honored however, that the BIR regulation cannot amend the law (Rep. Act No.
doctrine of separation of powers. 7716). Only legislation (as distinguished from administration regulation)
can amend an existing law.chanrobles.com.ph : virtual law library
Finally, as certified by the Secretary of the Senate and the Secretary
General of the House of Representatives Freedom of the press was virtually unknown in the Philippines before
1900. In fact, a prime cause of the revolution against Spain at the turn of
"This Act (Rep. Act No. 7716) is a consolidation of House Bill No. 11197 and the 19th century was the repression of the freedom of speech and
Senate Bill No. 1630 (w)as finally passed by the House of Representatives expression and of the press. No less than our national hero, Dr. Jose P.
and the Senate on April 27, 1994 and May 2, 1994 respectively."cralaw Rizal, in "Filipinas Despues de Cien Anos" (The Philippines a Century
virtua1aw library Hence) describing the reforms sine quibus non which the Filipinos were
insisting upon, stated: "The minister . . . who wants his reforms to be
Under the long-accepted doctrine of the "enrolled bill," the Court in reforms, must begin by declaring the press in the Philippines free. . ." 10
deference to a co-equal and coordinate branch of government is held to a
recognition of Rep. Act No. 7716 as a law validly enacted by Congress and, Press freedom in the Philippines has met repressions, most notable of
thereafter, approved by the President on 5 May 1994. Again, we quote which was the closure of almost all forms of existing mass media upon the
from our recent decision in Philippine Judges Association, imposition of martial law on 21 September 1972.
supra:jgc:chanrobles.com.ph
Section 4, Art. III of the Constitution maybe traced to the United States
"Under the doctrine of separation of powers, the Court may not inquire Federal Constitution. The guarantee of Freedom of Expression was planted
beyond the certification of the approval of a bill from the presiding officers in the Philippines by President McKinley in the Magna Carta of Philippine
of Congress. Casco Philippine Chemical Co. v. Gimenez 6 laid down the rule Liberty, Instructions to the Second Philippine Commission on 7 April 1900.
that the enrolled bill is conclusive upon the Judiciary (except in matters
that have to be entered in the journals like the yeas and nays on the final The present constitutional provision which reads:jgc:chanrobles.com.ph
reading of the bill). 7 The journals are themselves also binding on the
Supreme Court, as we held in the old (but still valid) case of U.S. v. Pons, 8 "Sec. 4 No law shall be passed abridging the freedom of speech, of
where we explained the reason thus:chanrob1es virtual 1aw library expression, or of the press, or the right of the people peaceably to
assemble and petition the government for redress of grievances."cralaw
To inquire into the veracity of the journals of the Philippine legislature virtua1aw library
when they are, as we have said, clear and explicit, would be to violate both
the letter and spirit of the organic laws by which the Philippine is essentially the same as that guaranteed in the U.S. Federal Constitution,
Government was brought into existence, to invade a coordinate and for which reason, American case law giving judicial expression as to it
independent department of the Government, and to interfere with the meaning is highly persuasive in the Philippines.
legitimate powers and functions of the Legislature.
The plain words of the provision reveal the clear intention that no prior
Applying these principles, we shall decline to look into the petitioners restraint can be imposed on the exercise of free speech and expression if
charges that an amendment was made upon the last reading of the bill they are to remain effective and meaningful.chanrobles virtual lawlibrary
that eventually became R.A. No. 7354 and that copies thereof in its final
form were not distributed among the members of each House. Both the The U.S. Supreme Court in the leading case of Grosjean v. American Press
enrolled bill and the legislative journals certify that the measure was duly Co., Inc. 11 declared a statute imposing a gross receipts license tax of 2%
enacted i.e., in accordance with Article VI, Sec. 26(2) of the Constitution. on circulation and advertising income of newspaper publishers as
We are bound by such official assurances from a coordinate department of constituting a prior restraint which is contrary to the guarantee of freedom
the government, to which we owe, at the very least, a becoming of the press.
courtesy."cralaw virtua1aw library
III In Bantam Books, Inc. v. Sullivan, 12 the U.S. Supreme Court stated: "Any
system of prior restraint of expression comes to this Court bearing a heavy
presumption against its constitutionality."cralaw virtua1aw library
Press Freedom and Religious Freedom and Rep. Act No. 7716
In this jurisdiction, prior restraint on the exercise of free expression can be
The validity of the passage of Rep. Act No. 7716 notwithstanding, certain justified only on the ground that there is a clear and present danger of a
substantive evil which the State has the right to prevent. 13 showing that the tax violates the due process and equal protection clauses
of the Constitution, this Court, in keeping with the doctrine of separation
In the present case, the tax imposed on circulation and advertising income of powers, has to defer to the discretion and judgment of Congress on this
of newspaper publishers is in the nature of a prior restraint on circulation point.
and free expression and, absent a clear showing that the requisite for
prior restraint is present, the constitutional flaw in the law is at once Philippine Airlines (PAL) in a separate petition (G.R. No. 115852) claims
apparent and should not be allowed to proliferate. that its franchise under PD No. 1590 which makes it liable for a franchise
tax of only 2% of gross revenues "in lieu of all the other fees and charges
Similarly, the imposition of the VAT on the sale and distribution of religious of any kind, nature or description, imposed, levied, established, assessed
articles must be struck down for being contrary to Sec. 5, Art. III of the or collected by any municipal, city, provincial, or national authority or
Constitution which provides:jgc:chanrobles.com.ph government agency, now or in the future," cannot be amended by Rep. Act
No. 7716 as to make it (PAL) liable for a 10% value-added tax on revenues,
"Sec. 5. No law shall be made respecting an establishment of religion, or because Sec. 24 of PD No. 1590 provides that PALs franchise can only be
prohibiting the free exercise thereof. The free exercise and enjoyment of amended, modified or repealed by a special law specifically for that
religious profession and worship, without discrimination or preference, purpose.
shall forever be allowed. No religious test shall be required for the
exercise of civil or political rights."cralaw virtua1aw library The validity of PALS above argument can be tested by ascertaining the
true intention of Congress in enacting Rep. Act No. 7716. Sec. 4 thereof
That such a tax on the sale and distribution of religious articles is dealing with Exempt Transactions states:jgc:chanrobles.com.ph
unconstitutional, has been long settled in American Bible Society, supra.
"Section 103. Exempt Transactions. The following shall be exempt from
Insofar, therefore, as Rep. Act No. 7716 imposes a value-added tax on the the value-added tax:chanrob1es virtual 1aw library
exercise of the above-discussed two (2) basic constitutional rights, Rep. x x x
Act No. 7716 should be declared unconstitutional and of no legal force and
effect.
IV (q) Transactions which are exempt under special law, except those granted
under Presidential Decrees No. 66, 529, 972, 1491, 1590, . . ." (Emphasis
supplied)
Petitions of CREBA and PAL and Rep. Act No. 7716
The repealing clause of Rep. Act No. 7716 further
The Chamber of Real Estate and Builders Association, Inc. (CREBA) filed its reads:jgc:chanrobles.com.ph
own petition (GR No. 11574) arguing that the provisions of Rep. Act No.
7716 imposing a 10% value-added tax on the gross selling price or gross "Sec. 20. Repealing clauses. The provisions of any special law relative to
value in money of every sale, barter or exchange of goods or properties the rate of franchise taxes are hereby expressly repealed.
(Section 2) and a 10% value-added tax on gross receipts derived from the x x x
sale or exchange of services, including the use or lease of properties
(Section 3), violate the equal protection, due process and non-impairment
provisions of the Constitution as well as the rule that taxation should be All other laws, orders, issuances, rules and regulations or parts thereof
uniform, equitable and progressive. inconsistent with this Act are hereby repealed, amended or modified
accordingly" (Emphasis supplied)
The issue of whether or not the value-added tax is uniform, equitable and
progressive has been settled in Kapatiran. There can be no dispute, in my mind, that the clear intent of Congress was
to modify PALs franchise with respect to the taxes it has to pay. To this
CREBA which specifically assails the 10% value-added tax on the gross extent, Rep. Act No. 7716 can be considered as a a special law amending
selling price of real properties, fails to distinguish between a sale of real PALs franchise and its tax liability thereunder. That Rep. Act. No. 7716
properties primarily held for sale to customers or held for lease in the imposes the value-added taxes on other subjects does not make it a
ordinary course of trade or business and isolated sales by individual real general law which cannot amend PD No. 1590.
property owners (Sec. 103[s]). That those engaged in the business of real
estate development realize great profits is of common knowledge and To sum up: it is my considered view that Rep. Act No. 7716 (the expanded
need not be discussed at length here. The qualification in the law that the value-added tax) is a valid law, viewed from both substantive and
10% VAT covers only sales of real property primarily held for sale to procedural standards, except only insofar as it violates Secs. 4 and 5, Art.
customers, i.e. for trade or business thus takes into consideration a III of the Constitution (the guarantees of freedom of expression and the
taxpayers capacity to pay. There is no showing that the consequent free exercise of religion). To that extent, it is, in its present form,
distinction in real estate sales is arbitrary and in violation of the equal unconstitutional.
protection clause of the Constitution. The inherent power to tax of the
State, which is vested in the legislature, includes the power to determine I, therefor, vote to DISMISS the petitions, subject to the above
whom or what to tax, as well as how much to tax. In the absence of a clear qualification.
of substituting the entire H.B. No. 11197 by an altogether completely new
REGALADO, J., dissenting:chanrob1es virtual 1aw library measure of Senate provenance. Ergo, so the justification goes, the Senate
acted perfectly in accordance with its amending power under Section 24,
It would seem like an inconceivable irony that Republic Act No. 7716 Article VI of the Constitution since it merely proposed amendments
which, so respondents claim, was conceived by the collective wisdom of a through a bill allegedly prepared in advance.
bicameral Congress and crafted with sedulous care by two branches of
government should now be embroiled in challenges to its validity for This is a mode of argumentation which, by reason of factual inaccuracy
having been enacted in disregard of mandatory prescriptions of the and logical implausibility, both astounds and confounds. For, it is of official
Constitution itself. Indeed, such impugnment by petitioners goes beyond record that S.B. No. 1630 was filed, certified and enacted in substitution of
merely the procedural flaws in the parturition of the law. Creating and S.B. No. 1129 which in itself was likewise in derogation of the
regulating as it does definite rights to property, but with its own passage Constitutional prohibition against such initiation of a tax bill in the Senate.
having been violative of explicit provisions of the organic law, even In any event, S.B. No. 1630 was neither intended as a bill to be adopted by
without going into the intrinsic merits of the provisions of Republic Act No. the Senate nor to be referred to the bicameral conference committee as a
7716 its substantive invalidity is pro facto necessarily entailed. substitute for H.B. No. 11197. These indelible facts appearing in official
documents cannot be erased by any amount of strained convolutions or
How it was legislated into its present statutory existence is not in serious incredible pretensions that S.B. No. 1630 was supposedly enacted in
dispute and need not detain us except for a recital of some salient and anticipation of H.B. No. 11197.
relevant facts. The House of Representatives passed House Bill No. 11197
1 on third reading on November 17, 1993 and, the following day, it On that score alone, the invocation by the Solicitor General of the hoary
transmitted the same to the Senate for concurrence. On its part, the concept of amendment by substitution falls flat on its face. Worse, his
Senate approved Senate Bill No. 1630 on second and third readings on concomitant citation of Flint to recover from that prone position only
March 24, 1994. It is important to note in this regard that on March 22, succeeded in turning the same postulation over, this time supinely flat on
1994, said S.B. No. 1630 had been certified by President Fidel V. Ramos for its back. As elsewhere noted by some colleagues, which I will just refer to
immediate enactment to meet a public emergency, that is, a growing briefly to avoid duplication, respondents initially sought sanctuary in that
budgetary deficit. There was no such certification for H.B. No. 11197 doctrine supposedly laid down in Flint, thus: "It has, in fact, been held that
although it was the initiating revenue bill.chanrobles lawlibrary : rednad the substitution of an entirely new measure for the one originally
proposed can be supported as a valid amendment." 4 (Emphasis supplied.)
It is, therefore, not only a curious fact but, more importantly, an invalid During the interpellation by the writer at the oral argument held in these
procedure since that Presidential certification was erroneously made for cases, the attention of the Solicitor General was called to the fact that the
and confined to S.B. No. 1630 which was indisputably a tax bill and, under amendment in Flint consisted only of a single item, that is, the
the Constitution, could not validly originate in the Senate. Whatever is substitution of a corporate tax for an inheritance tax proposed in a general
claimed in favor of S.B. No. 1630 under the blessings of that certification, revenue bill; and that the text of the decision therein nowhere contained
such as its alleged exemption from the three separate readings the supposed doctrines he quoted and ascribed to the court, as those were
requirement, is accordingly negated and rendered inutile by the merely summations of arguments of counsel therein. It is indeed a source
inefficacious nature of said certification as it could lawfully have been of disappointment for us, but an admission of desperation on his part,
issued only for a revenue measure originating exclusively from the lower that, instead of making a clarification or a defense of his contention, the
House. To hold otherwise would be to validate a Presidential certification Solicitor General merely reproduced all over again 5 the same quotations
of a bill initiated in the Senate despite the Constitutional prohibition as they appeared in his original consolidated comment, without venturing
against its originating therefrom. any explanation or justification.

Equally of serious significance is the fact that S.B. No. 1630 was reported The aforestated dissemblance, thus unmasked, has further undesirable
out in Committee Report No. 349 submitted to the Senate on February 7, implications on the contentions advanced by respondents in their defense.
1994 and approved by that body "in substitution of S.B. No. 1129," while For, even indulging respondents ex gratia argumenti in their pretension
merely "taking into consideration O.S. No. 734 and H.B. No. 11197." 2 S.B. that S.B. No. 1630 substantiated or replaced H.B. No. 11197, aside from
No. 1630, therefore, was never filed in substitution of either P.S. No. 734 muddling the issue of the true origination of the disputed law, this would
or, more emphatically, of H.B. No. 11197 as these two legislative issuances further enmesh respondents in a hopeless contradiction.chanrobles virtual
were merely taken account of, at the most, as referential bases or lawlibrary
materials.
In a publication authorized by the Senate and from which the Solicitor
This is not a play on misdirection for, in the first instance, the respondents General has liberally quoted, it is reported as an accepted rule therein
assure us that H.B. No. 11197 was actually the sole source of and stated that" (a)n amendment by substitution when approved takes the place of
the whole legislative process which culminated in Republic Act No. 7716. the principal bill. C.R. March 19, 1963, p. 943." 6 Stated elsewise, the
The participation of the Senate in enacting S.B. No. 1630 was, it is principal bill is supplanted and goes out of actuality. Applied to the
claimed, justified as it was merely in pursuance of its power to concur in or present situation, and following respondents submission that H.B. No.
propose amendments to H.B. No. 11197. Citing the 83-year old case of 11197 had been substituted or replaced in its entirety, then in law it had
Flint v. Stone Tracy Co., 3 it is blithely announced that such power to no further existence for purpose of the subsequent stages of legislation
amend includes an amendment by substitution, that is, even to the extent except, possibly, for referential data.
of intellectual rectitude as to give the impression of being mere rhetorics
Now, the enrolled bill thereafter submitted to the President of the in defense of the indefensible.
Philippines, signed by the President of the Senate and the Speaker of the
House of Representatives, carried this solemn certification over the We are told, however, that by our discoursing on the foregoing issues we
signatures of the respective secretaries of both chambers: "This Act which are intruding into non-justiciable areas long declared verboten by such
is a consolidation of House Bill No. 11197 and Senate Bill No. 1630 was time-honored doctrines as those on political questions, the enrolled bill
finally passed by the House of Representatives and the Senate on April 27, theory and the respect due to two co-equal and coordinate branches of
1994, and May 2, 1994." (Italics mine.) In reliance thereon, the Chief Government, all derived from the separation of powers inherent in
Executive signed the same into law as Republic Act No. 7716. republicanism. We appreciate the lectures, but we are not exactly unaware
of the teachings in U.S. v. Pons, 8 Mabanag v. Lopez Vito, 9 Casco
The confusion to which the writer has already confessed is now Philippine Chemical Co., Inc. v. Gimenez, etc., Et Al., 10 Morales v. Subido,
compounded by that official text of the aforequoted certification which etc., 11 and Philippine Judges Association, etc., Et. Al. v. Prado, etc., Et Al.,
speaks, and this cannot be a mere lapsus calami, of two independent and 12 on the one hand, and Taada, Et. Al. v. Cuenco, Et Al., 13 Sanidad, Et.
existing bills (one of them being H.B. No. 11197) which were consolidated Al. v. Commission on Elections, Et Al., 14 and Daza v. Singson, Et Al., 15 on
to produce the enrolled bill. In parliamentary usage, to consolidate two the other, to know which would be applicable to the present controversy
bills, is to unite them into one 7 and which, in the case at bar, necessarily and which should be rejected.
assumes that H.B. No. 1 1197 never became legally inexistent. But did not
the Solicitor General, under the theory of amendment by substitution of But, first, a positional exordium. The writer of this opinion would be among
the entire H.B. No. 11197 by S.B. No. 1630, thereby premise the same the first to acknowledge and enjoin not only courtesy to, but respect for,
upon the replacement, hence the total elimination from the legislative the official acts of the Executive and Legislative departments, but only so
process, of H.B. 11197? long as the same are in accordance with or are defensible under the
fundamental charter and the statutory law. He would readily be numbered
It results, therefore, that to prove compliance with the requirement for the in the ranks of those who would preach a reasoned sermon on the
exclusive origination of H.B. No. 11197, two alternative but inconsistent separation of powers, but with the qualification that the same are not
theories had to be espoused and defended by respondents counsel. To contained in tripartite compartments separated by impermeable
justify the introduction and passage of S.B. No. 1630 in the Senate, it was membranes. He also ascribes to the general validity of American
supposedly enacted only as an amendment by substitution, hence on that constitutional doctrines as a matter of historical and legal necessity, but
theory H.B. No. 11197 had to be considered as displaced and terminated not to the extent of being oblivious to political changes or unmindful of the
from its role or existence. Yet, likewise for the same purpose but this time fallacy of undue generalization arising from myopic disregard of the
on the theory of origination by consolidation, H.B. No. 11197 had to be factual setting of each particular case.
resuscitated so it could be united or merged with S. B. No. 1630. This
latter alternative theory, unfortunately, also exacerbates the These ruminations have likewise been articulated and dissected by my
constitutional defect for then it is an admission of a dual origination of the colleagues, hence it is felt that the only issue which must be set aright in
two tax bills, each respectively initiated in and coming from the lower and this dissenting opinion is the so-called enrolled bill doctrine to which we
upper chambers of Congress. are urged to cling with reptilian tenacity. It will be preliminarily noted that
the official certification appearing right on the face of Republic Act No.
Parenthetically, it was also this writer who pointedly brought this baffling 7716 would even render unnecessary any further judicial inquiry into the
situation to the attention of the Solicitor General during the aforesaid oral proceedings which transpired in the two legislative chambers and, on a
argument, to the extent of reading aloud the certification in full. We had parody of tricameralism, in the bicameral conference committee. Moreover,
hoped thereby to be clarified on these vital issue in respondents projected we have the excellent dissertations of some of my colleagues on these
memorandum, but we have not been favored with an explanation matters, but respondents insist en contra that the congressional
unraveling this dilemma. Verily, by passing sub silentio on these intriguing proceedings cannot properly be inquired into by this Court. Such objection
submissions, respondents have wreaked havoc on both logic and law just confirms a suppressive pattern aimed at sacrificing the rule of law to the
to gloss over their non-compliance with the Constitutional mandate for fiat of expediency.chanrobles.com : virtual law library
exclusive origination of a revenue bill. The procedure required therefor, we
emphatically add, can be satisfied only by complete and strict compliance Respondents thus emplaced on their battlements the pronouncements of
since this is laid down by the Constitution itself and not by a merely this Court in the aforecited case of Philippine Judges Association v. Prado.
statute. 16 Their reliance thereon falls into the same error committed by their
seeking refuge in the Flint case, ante. which, as has earlier been
This writer consequently agrees with the clearly tenable proposition of demonstrated (aside from the quotational misrepresentation), could not
petitioners that when the Senate passed and approved S.B. No. 1630, had be on par with the factual situation in the present case. Flint, to repeat,
it certified by the Chief Executive, and thereafter caused its consideration involved a mere amendment on a single legislative item, that is,
by the bicameral conference committee in total substitution of H.B. No. substituting the proposal therein of an inheritance tax by one on corporate
11197, it clearly and deliberately violated the requirements of the tax. Now, in their submission based on Philippine Judges Association,
Constitution not only in the origination of the bill but in the very respondents studiously avoid mention of the fact that the questioned
enactment of Republic Act No. 7716. Contrarily, the shifting sands of insertion referred likewise to a single item, that is, the repeal of the
inconsistency in the arguments adduced for respondents betray such lack franking privilege theretofore granted to the judiciary. That both cases
cannot be equated with those at bar, considering the multitude of items This Court is firmly committed to the holding that when the journals speak
challenged and the plethora of constitutional violations involved, is too they control, and against such proof the enrolled bill is not conclusive."
obvious to belabor. Legal advocacy and judicial adjudication must have a
becoming sense of qualitative proportion, instead of lapsing into the More enlightening and apropos to the present controversy is the decision
discredited and maligned practice of yielding blind adherence to promulgated on May 13, 1980 by the Supreme Court of Kentucky in D & W
precedents. Auto Supply, Et. Al. v. Department of Revenue, Et Al., 19 pertinent excerpts
wherefrom are extensively reproduced hereunder:jgc:chanrobles.com.ph
The writer unqualifiedly affirms his respect for valid official acts of the two
branches of government and eschews any unnecessary intrusion into their ". . . In arriving at our decision we must, perforce, reconsider the validity
operational management and internal affairs. These, without doubt, are of a long line of decisions of this court which created and nurtured the so-
matters traditionally protected by the republican principle of separation of called enrolled bill doctrine.
powers. Where, however, there is an overriding necessity for judicial x x x
intervention in light of the pervasive magnitude of the problems presented
and the gravity of the constitutional violations alleged, but this Court
cannot perform its constitutional duty expressed in Section 1, Article VIII " [1] Section 46 of the Kentucky Constitution sets out certain procedures
of the Constitution unless it makes the inescapable inquiry, then the that the legislature must follow before a bill can be considered for final
confluence of such factors should compel an exception to the rule as an passage. . . .
ultimate recourse. The cases now before us present both the inevitable x x x
challenge and the inescapable exigency for judicial review. For the Court to
now shirk its bounden duty would not only project it as a citadel of the
timorous and the slothful, but could even undermine its raison detre as ". . . Under the enrolled bill doctrine as it now exists in Kentucky, a court
the highest and ultimate tribunal. may not look behind such a bill, enrolled and certified by the appropriate
officers, to determine if there are any defects.
Hence, this dissenting opinion has touched on events behind and which x x x
transpired prior to the presentation of the enrolled bill for approval into
law. The details of that law which resulted from the legislative action
followed by both houses of Congress, the substantive validity of whose ". . . In Lafferty, passage of the law in question violated this provision, yet
provisions and the procedural validity of which legislative process are here the bill was properly enrolled and approved by the governor. In declining
challenged as unconstitutional, have been graphically presented by to look behind the law to determine the propriety of its enactment, the
petitioners and admirably explained in the respective opinions of my court enunciated three reasons for adopting the enrolled bill rule. First,
brethren. The writer concurs in the conclusions drawn therefrom and the court was reluctant to scrutinize the processes of the legislature, an
rejects the contention that we have unjustifiably breached the dike of the equal branch of government. Second, reasons of convenience prevailed,
enrolled bill doctrine. which discouraged requiring the legislature to preserve its records and
anticipated considerable complex litigation if the court ruled otherwise.
Even in the land of its source, the so-called conclusive presumption of Third, the court acknowledged the poor record-keeping abilities of the
validity originally attributed to that doctrine has long been revisited and General Assembly and expressed a preference for accepting the final bill
qualified, if not altogether rejected. On the competency of judicial inquiry, as enrolled, rather than opening up the records of the legislature. . . .
it has been held that" (u)under the enrolled bill rule by which an enrolled x x x
bill is sole expository of its contents and conclusive evidence of its
existence and valid enactment, it is nevertheless competent for courts to
inquire as to what prerequisites are fixed by the Constitution of which "Nowhere has the rule been adopted without reason, or as a result of
journals of respective houses of Legislature are required to furnish the judicial whim. There are four historical bases for the doctrine. (1) An
evidence." 17 enrolled bill was a record and, as such, was not subject to attack at
common law. (2) Since the legislature is one of the three branches of
In fact, in Gwynn v. Hardee, etc., Et Al., 18 the Supreme Court of Florida government, the courts, being coequal, must indulge in every presumption
declared:jgc:chanrobles.com.ph that legislative acts are valid. (3) When the rule was originally formulated,
record-keeping of the legislatures was so inadequate that a balancing of
"(1) While the presumption is that the enrolled bill, as signed by the equities required that the final act, the enrolled bill, be given efficacy. (4)
legislative officers and filed with the secretary of state, is the bill as it There were theories of convenience as expressed by Kentucky court in
passed, yet this presumption is not conclusive, and when it is shown from Lafferty.
the legislative journals that a bill though engrossed and enrolled, and
signed by the legislative officers, contains provisions that have not passed "The rule is not unanimous in the several states, however, and it has not
both houses, such provisions will be held spurious and not a part of the been without its critics. From an examination of cases and treaties, we can
law. As was said by Mr. Justice Cockrell in the case of Wade v. Atlantic summarize the criticisms as follows: (1) Artificial presumptions, especially
Lumber Co., 51 Fla. 628, text 633, 41 So. 72, 73:chanrob1es virtual 1aw conclusive ones, are not favored. (2) Such a rule frequently (as in the
library present case) produces results which do not accord with facts or
constitutional provisions. (3) The rule is conducive to fraud, forgery,
corruption and other wrongdoings. (4) Modern automatic and electronic
record-keeping devices now used by legislatures remove one of the "We believe that a more reasonable rule is the one which Professor
original reasons for the rule. (5) The rule disregards the primary obligation Sutherland describes as the extrinsic evidence rule. . . . Under this
of the courts to seek the truth and to provide a government. In light of approach there is a prima facie presumption that an enrolled bill is valid,
these considerations, we are convinced that the time has come to re- but such presumption may be overcome by clear, satisfactorily and
examine the enrolled bill doctrine. convincing evidence establishing that constitutional requirements have
not been met.
" [2] This court is not unmindful of the admonition of the doctrine of stare
decisis. The maxim is "Stare decisis et non quieta movere," which simply "We therefore overrule Lafferty v. Huffman and all other cases following
suggests that we stand by precedents and not disturb settled points of the so-called enrolled bill doctrine, to the extent that there is no longer a
law. Yet, this rule is not inflexible, nor is it of such a nature as to require conclusive presumption that an enrolled bill is valid. . . ." (Emphases
perpetuation of error or logic. As we stated in Daniels Admr v. Hoofnel, mine.)
287 Ky 834, 155 S.W. 2d 469, 471-72 (1941) (Citations
omitted):chanrob1es virtual 1aw library Undeniably, the value-added tax system may have its own merits to
commend its continued adoption, and the proposed widening of its base
The force of the rule depends upon the nature of the question to be could achieve laudable governmental objectives if properly formulated and
decided and the extent of the disturbance of rights and practices which a conscientiously implemented. We would like to believe, however, that ours
change in the interpretation of the law or the course of judicial opinions is not only an enlightened democracy nurtured by a policy of transparency
may create. Cogent considerations are whether there is clear error and but one where the edicts of the fundamental law are sacrosanct for all,
urgent reasons for neither justice nor wisdom requires a court to go from barring none. While the realization of the lofty ends of this administration
one doubtful rule to another, and whether or not the evils of the principle should indeed be the devout wish of all, likewise barring none, it can never
that has been followed will be more injurious than can possibly result from be justified by methods which even, if unintended, are suggestive of
a change. Machiavellism.

Certainly, when a theory supporting a rule of law is not grounded on facts, Accordingly, I vote to grant the instant petitions and to invalidate Republic
or upon sound logic, or is unjust, or has been discredited by actual Act No. 7716 for having been enacted in violation of Section 24, Article VI
experience, it should be discarded, and with it the rule it supports. of the Constitution.

" [3] It is clear to us that the major premise of the Lafferty decision, the G.R. No. 115455
poor record-keeping of the legislature, has disappeared. Modern 235 SCRA 630 (1994)
equipment and technology are the rule in record-keeping by our General FACTS
Assembly. Tape recorders, electric typewriters, duplicating machines, RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act that
recording equipment, printing presses, computers, electronic voting seeks to widen the tax base of the existing VAT system and enhance its
machines, and the like remove all doubts and fears as to the ability of the administration by amending the National Internal Revenue Code. There are various
General Assembly to keep accurate and readily accessible records. suits questioning and challenging the constitutionality of RA 7716 on various
grounds.
"It is also apparent that the convenience rule is not appropriate in Tolentino contends that RA 7716 did not originate exclusively from the House of
todays modern and developing judicial philosophy. The fact that the Representatives but is a mere consolidation of HB. No. 11197 and SB. No. 1630 and
number and complexity of lawsuits may increase is not persuasive if one is it did not pass three readings on separate days on the Senate thus violating Article
mindful that the overriding purpose of our judicial system is to discover VI, Sections 24 and 26(2) of the Constitution, respectively.
the truth and see that justice is done. The existence of difficulties and Art. VI, Section 24: All appropriation, revenue or tariff bills, bills authorizing increase
complexities should not deter this pursuit and we reject any doctrine or of the public debt, bills of local application, and private bills shall originate
presumption that so provides. exclusively in the House of Representatives, but the Senate may propose or concur
with amendments.
"Lastly, we address the premise that the equality of the various branches Art. VI, Section 26(2): No bill passed by either House shall become a law unless it
of government requires that we shut our eyes to constitutional failings and has passed three readings on separate days, and printed copies thereof in its final
other errors of our coparceners in government. We simply do not agree. form have been distributed to its Members three days before its passage, except
Section 26 of the Kentucky Constitution provides that any law contrary to when the President certifies to the necessity of its immediate enactment to meet a
the constitution is void. The proper exercise of judicial authority requires public calamity or emergency. Upon the last reading of a bill, no amendment thereto
us to recognize any law which is unconstitutional and to declare it void. shall be allowed, and the vote thereon shall be taken immediately thereafter, and
Without belaboring the point, we believe that under section 228 of the the yeas and nays entered in the Journal.
Kentucky Constitution it is our obligation to support . . . the Constitution ISSUE
of the commonwealth. We are sworn to see that violations of the Whether or not RA 7716 violated Art. VI, Section 24 and Art. VI, Section 26(2) of the
constitution by any person, corporation, state agency or branch of Constitution.
government are brought to light and corrected. To countenance an HELD
artificial rule of law that silences our voices when confronted with
violations of our constitution is not acceptable to this court.
No. The phrase originate exclusively refers to the revenue bill and not to the require the massive infusion and hemorrhage of government funds with minimum or
revenue law. It is sufficient that the House of Representatives initiated the passage negligible "cashout" from Defendant Benjamin Romualdez...
of the bill which may undergo extensive changes in the Senate. xxx xxx xxx
SB. No. 1630, having been certified as urgent by the President need not meet the (m) manipulated, with the support, assistance and collaboration of Philgurantee
requirement not only of printing but also of reading the bill on separate days. officials led by chairman Cesar E.A. Virata and the Senior managers of FMMC/PNI
Holdings, Inc. led by Jose S. Sandejas, Jr., Jose M. Mantecom and Kurt S. Bachmann,
Republic of the Philippines Jr., among others, the formation of Erectors Holdings, Inc. without infusing additional
SUPREME COURT capital solely for the purpose of Erectors Incorporated with Philguarantee in the
Manila amount of P527,387,440.71 with insufficient securities/collaterals just to enable
EN BANC Erectors Inc, to appear viable and to borrow more capitals, so much so that its
obligation with Philgurantee has reached a total of more than P2 Billion as of June
G.R. No. 89914 November 20, 1991 30, 1987.
JOSE F.S. BENGZON JR., ABELARDO TERMULO, JOSE MANTECON, VICENTE (n) at the onset of the present Administration and/or within the week following the
MILLS JR., LEONARDO GAMBOA, KURT BACHMANN JR., JOSE V.E. JIMENEZ, February 1986 People's Revolution, in conspiracy with, supoort, assistance and
ERNESTO CALUYA, AGERICO UNGSON, SUSAN ROXAS, ELVIE CASTILLO, and collaboration of the abovenamed lawyers of the Bengzon Law Offices, or specifically
CYNTHIA SABIDO LIMJAP, petitioners, Defendants Jose F.S. Bengzon, Jr., V.E. Jimenez, Amando V. Faustino, Jr., and Edilberto
vs. S. Narciso, Jr., manipulated, shcemed, and/or executed a series of devices intended
THE SENATE BLUE RIBBON COMMITTEE AND ITS MEMBERS, represented by to conceal and place, and/or for the purpose of concealing and placing, beyond the
and through the CHAIRMAN, HON. WIGBERTO TAADA, respondents, JOSE inquiry and jurisdiction of the Presidential Commission on Good Government (PCGG)
S. SANDEJAS, intervenor. herein Defendant's individual and collective funds, properties, and assets subject of
Bengzon, Zarraga, Narciso, Cudala, Pecson & Bengson for petitioners. and/or suited int he instant Complaint.
Balgos & Perez for intervening petitioner. (o) manuevered, with the technical know-how and legalitic talents of the FMMC
Eddie Tamondong and Antonio T. Tagaro for respondents. senior manager and some of the Bengzon law partners, such as Attys. Jose F.S.
Bengzon, Jr., Edilberto S. Narciso, Jr., Amando V. Faustino, Jose Vicente E. Jimenez
PADILLA, J.:p and Leonardo C. Cruz, the purported sale of defendant Benjamin Romualdez's
This is a petition for prohibition with prayer for the issuance of a temporary interests in the (i) Professional Managers, (ii) A & E International Corporation (A & E),
restraining order and/or injuective relief, to enjoin the respondent Senate Blue (iii) First Manila Managerment Corporation (FMMC), (iv) Philippine World Travel Inc.
Ribbon committee from requiring the petitioners to testify and produce evidence at (PWTI) and its subsidiaries consisting of 36 corporations in all, to PNI Holdings, Inc.
its inquiry into the alleged sale of the equity of Benjamin "Kokoy" Romualdez to the (wjose purported incorporations are all members of Atty. Jose F.S. Bengzon's law
Lopa Group in thirty-six (36) or thirty-nine (39) corporations. firm) for only P5 million on March 3, 1986 or three days after the creation of the
On 30 July 1987, the Republic of the Philippines, represented by the Presidential Presidential Commission on Good Government on February 28, 1986, for the sole
Commission on Good Government (PCGG), assisted by the Solicitor General, filed purpose of deceiving and preempting the Government, particularly the PCGG, and
with the Sandiganbayan Civil Case No. 0035 (PCGG Case No. 35) entitled "Republic making it appear that defendant Benjamin Romualdez had already divested himself
of the Philippines vs. Benjamin "Kokoy" Romualdez, et al.", for reconveyance, of his ownership of the same when in truth and in fact, his interests are well intact
reversion, accounting, restitution and damages. and being protected by Atty. Jose F.S. Bengzon, Jr. and some of his law partners,
The complaint was amended several times by impleading new defendants and/or together with the FMMC senior managers who still control and run the affiars of said
amplifying the allegations therein. Under the Second Amended Complaint, 1 the corporations, and in order to entice the PCGG to approve the said fictitious sale, the
herein petitioners were impleaded as party defendants. above-named defendants offered P20 million as "donation" to the Government;
The complaint insofar as pertinent to herein petitioners, as defendants, alleges (p) misused, with the connivance, support and technical assitance of the Bengzon
among others that: law firm represented by Atty. Jose F.S. Bengzon, Jr. as legal counsel, together with
14. Defendants Benjamin (Kokoy) Romualdez and Juliette Gomez Romualdez, acting defendants Cesar Zalamea, Antonio Ozaeta, Mario D. Camacho amd Senen J.
by themselves and/or in unlawful concert with Defendants Ferdinand E. Marcos and Gabaldon as members of the Board of Directors of the Philippine Commercial
Imelda R. Marcos, and taking undue advantage of their relationship, influence and International bank (PCIB), the Meralco Pension Fund (Fund, for short) in the amount
connection with the latter Defendant spouses, engaged in devices, schemes and of P25 million by cuasing it to be invested in the PCIB and through the Bank's TSG,
strategems to unjuestly enrigh themselves at the expense of Plaintiff and the Filipino assigned to PCI Development and PCI Equity at 50% each, the Fund's (a) 8,028.011
people, among others: common shares in the Bank and (b) "Deposit in Subscription" in the amount of
(a) Obatained, with the active collaboration of Defendants Sene J. Gabaldon, Mario P4,929.972.50 but of the agreed consideration of P28 million for the said
D. Camacho, Mamerto Nepomuceno, Carlos J. Valdez, Cesar C. Zalamea and assignment, PCI Development and PCI Equity were able to pay only P5,500.00
Francisco Tantuico, Atty. Jose Bengzon, Jr. and his law partners, namely: Edilberto S. downpayment and the first amortization of P3,937,500.00 thus prompting the Fund
Narciso, Jr., Jose Vicente E. Jimenez, Amando V. Faustino, Jr., and Leonardo C. Cruz; to rescind its assignment, and the consequent reversion of the assigned brought the
Jose S. Sandejas and his fellow senior managers of FMMC/PNI Holdings groups of total shareholding of the Fund to 11,470,555 voting shares or 36.8% of the voting
companies such as Leonardo Gamboa, Vicente T. Mills, Jr., Jose M. Mantecon, stock of the PCIB, and this development (which the defendants themselves
Abelardo S. Termulo, Rex C. Drilon II and Kurt Bachmann, Jr., control of some of the orchestrated or allowed to happen) was used by them as an excuse for the unlawful
biggest business enterprises in the Philippines, such as the Manila Corporation dismantling or cancellation of the Fund's 10 million shares for allegedly exceeding
(MERALCO), Benguet Consolidated and the Philippine Commercial International Bank the 30-percent ceiling prescribed by Section 12-B of the General Banking Act,
(PCI Bank) by employing devious financial schemes and techniques calculated to although they know for a fact that what the law declares as unlawful and void ab
initio are the subscriptions in excess of the 30% ceiling "to the extent of the excess
over any of the ceilings prescribed ..." and not the whole or entire stockholding excess of its jurisdiction and legislative purpose, in clear and blatant disregard of
which they allowed to stay for six years (from June 30, 1980 to March 24, 1986); their constitutional rights, and to their grave and irreparable damager, prejudice and
(q) cleverly hid behind the veil of corporate entity, through the use of the names and injury, and that there is no appeal nor any other plain, speedy and adequate remedy
managerial expertise of the FMMC senior manager and lawyers identified as Jose B. in the ordinary course of law, the petitioners filed the present petition for prohibition
Sandejas, Leonardo Gamboa, Vicente T. Mills, Abelardo S, Termulo, Edilberto S. with a prayer for temporary restraning order and/or injunctive relief.
Narciso, Jr., Jose M. Mantecon, Rex C. Drilon II, Kurt Bachmann, Jr. together with the Meanwhile, one of the defendants in Civil Case No. 0035 before the Sandiganbayan,
legal talents of corporate lawyers, such as Attys. Jose F.S. Bengzon, Jr., Jose V.E. Jose S. Sandejas, filed with the Court of motion for intervention, 8 which the Court
Jimenez, Amando V. Faustino, Jr., and Leonardo C. Cruz, the ill-gotten wealth of granted in the resolution 9 of 21 December 1989, and required the respondent
Benjamin T. Romualdez including, among others, the 6,229,177 shares in PCIB Senate Blue Ribbon Committee to comment on the petition in intervention. In
registered in the names of Trans Middle East Phils. Equities, Inc. and Edilberto S. compliance, therewith, respondent Senate Blue Ribbon Committee filed its
Narciso, Jr. which they refused to surrender to PCGG despite their disclosure as they comment10 thereon.
tried and continue to exert efforts in getting hold of the same as well as the shares Before discussing the issues raised by petitioner and intervenor, we will first tackle
in Benguet registered in the names of Palm Avenue Holdings and Palm Avenue the jurisdictional question raised by the respondent Committee.
Realty Development Corp. purportedly to be applied as payment for the claim of P70 In its comment, respondent Committee claims that this court cannot properly inquire
million of a "merger company of the First Manila Managerment Corp. group" into the motives of the lawmakers in conducting legislative investigations, much less
supposedly owned by them although the truth is that all the said firms are still cna it enjoin the Congress or any its regular and special commitees like what
beneficially owned by defendants Benjamin Romualdez. petitioners seek from making inquiries in aid of legislation, under the doctrine of
xxx xxx xxx separation of powers, which obtaines in our present system of government.
On 28 September 1988, petitioner (as defendants) filed their respective The contention is untenable. In Angara vs. Electoral Commission, 11 the Court held:
answers. 2 Meanwhile, from 2 to 6 August 1988, conflicting reports on the The separation of powers is a fundamental principle in our system of government. It
disposition by the PCGG of the "Romualdez corporations" were carried in various obtains not hrough express provision but by actual division in our Constitution. Each
metropolitan newspapers. Thus, one newspaper reported that the Romuladez firms department of the government has exclusive cognizance of matters wihtin its
had not been sequestered because of the opposition of certain PCGG officials who jurisdiction, and is supreme within its own sphere. But it does not follow from the
"had worked prviously as lawyers of the Marcos crony firms." Another daily reported fact that the three powers are to be kept separate and distinct that the Constitution
otherwise, while others declared that on 3 March 1986, or shortly after the EDSA intended them to be absolutely unrestrained and independent of each other. The
February 1986 revolution, the Romualdez companies" were sold for P5 million, Constitution has provided for an elaborate system of checks and balances to secure
without PCGG approval, to a holding company controlled by Romualdez, and that coordination in the workings of the various departments of the government...
Ricardo Lopa, the President's brother-in-law, had effectively taken over the firms, xxx xxx xxx
even pending negotiations for the purchase of the corporations, for the same price But in the main, the Constitution has blocked out with deft strokes and in bold lines,
of P5 million which was reportedly way below the fair value of their assets. 3 allotment of power to the executive, the legislative and the judicial departments of
On 13 September 1988, the Senate Minority Floor Leader, Hon. Juan Ponce Enrile the government. The ovelapping and interlacing of funcstions and duties between
delivered a speech "on a matter of personal privilege" before the Senate on the the several deaprtments, however, sometimes makes it hard to say just where the
alleged "take-over personal privilege" before the Senate on the alleged "take-over of political excitement, the great landmarks of the Constitution are apt to be forgotten
SOLOIL Incorporated, the flaship of the First Manila Management of Companies or marred, if not entirely obliterated, in cases of conflict, the judicial departments is
(FMMC) by Ricardo Lopa" and called upon "the Senate to look into the possible the only constitutional organ which can be called upon to determine the proper
violation of the law in the case, particularly with regard to Republic Act No. 3019, the allocation of powers between the several departments and among the integral or
Anti-Graft and Corrupt Practices Act." 4 constituent units thereof.
On motion of Senator Orlando Mercado, the matter was referred by the Senate to xxx xxx xxx
the Committee on Accountability of Public Officers (Blue Ribbon The Constitution is a definition of the powers of government. Who is to determine
Committee). 5 Thereafter, the Senate Blue Ribbon Committee started its the nature, scope and extent of such powers? The Constitution itself has provided for
investigation on the matter. Petitioners and Ricardo Lopa were subpoenaed by the the instrumentality of the judiciary as the rational way. And when the judiciary
Committee to appear before it and testify on "what they know" regarding the "sale mediates to allocate constitutional boundaries; it does not assert any superiority
of thirty-six (36) corporations belonging to Benjamin "Kokoy" Romualdez." over the other departments; it does not inr eality nullify or invalidate an act of the
At the hearing held on 23 May 1989, Ricardo Lopa declined to testify on the ground legislature, but only asserts the solemn and sacred obligation assigned to it by tyhe
that his testimony may "unduly prejudice" the defendants in Civil Case No. 0035 Constitution to determine conflicting claims of authority under the Constitution and
before the Sandiganbayan. Petitioner Jose F.S. Bengzon, Jr. likewise refused to testify to established for the parties in an actual controversy the rights which that
involing his constitutional right to due process, and averring that the publicity instrument secures and guarantess to them. This is in thruth all that is involved in
generated by respondents Committee's inquiry could adversely affect his rights as what is termed "judicial supremacy" which properly is the power of judicial review
well as those of the other petitioners who are his co-defendants in Civil Case No. under the Constitution. Even the, this power of judicial review is limited to actual
0035 before the Sandiganbayan. cases and controversies to be exercised after full opportunity of argument by the
The Senate Blue Ribbon Committee, thereupon, suspended its inquiry and directed parties, and limited further to the constitutional question raised or the very lis
the petitioners to file their memorandum on the constitutional issues raised, after mota presented. Any attempt at abstraction could only lead to dialectics and barren
which, it issued a resolution 6 dated 5 June 1989 rejecting the petitioner's plea to be legal questions and to sterile conclusions unrelated to actualities. Narrowed as its
excused from testifying, and the Committee voted to pursue and continue its function is in this manner, the judiciary does not pass upon questions of wisdom,
investigation of the matter. Senator Neptali Gonzales dissented. 7 justice or expediency of legislation. More thatn that, courts accord the presumption
Claiming that the Senate Blue Ribbon Committee is poised to subpoena them and of constitutionality to legislative enactments, not only because the legislature is
required their attendance and testimony in proceedings before the Committee, in presumed to abide by the Constitution but also becuase the judiciary in the
determination of actual cases and controversies must reflect the wisdom and justice there has been no takeover by him (Lopa); and that theses repeated allegations of a
of the people as expressed through their representatives in the executive and "takeover" on his (Lopa's) part of FMMC are baseless as they are malicious.
legislative departments of the government. The Lopa reply prompted Senator Enrile, during the session of the Senate on 13
The "allocation of constituional boundaries" is a task that this Court must perfomr September 1988, to avail of the privilege hour, 17 so that he could repond to the
under the Constitution. Moreowever, as held in a recent case, 12 "(t)he political said Lopa letter, and also to vindicate his reputation as a Member of the Senate of
question doctrine neither interposes an obstacle to judicial determination of the rival the Philippines, considering the claim of Mr. Lopa that his (Enrile's) charges that he
claims. The jurisdiction to delimit constitutional boundaries has been given to this (Lopa) had taken over the FMMC Group of Companies are "baseless" and
Court. It cannot abdicate that obligation mandated by the 1987 Constitution, "malicious." Thus, in his speech, 18 Senator Enrile said, among others, as follows:
although said provision by no means does away with kthe applicability of the Mr. President, I rise this afternnon on a matter of personal privilege; the privilege
principle in appropriate cases." 13 being that I received, Mr. President, a letter dated September 4, 1988, signed by Mr.
The Court is thus of the considered view that it has jurisdiction over the present ricardo A. Lopa, a.k.a. or Baby Lopa, wherein he denied categorically that he has
controversy for the purpose of determining the scope and extent of the power of the taken over the First Manila Management Group of Companies which includes SOLOIL
Senate Blue Ribbon Committee to conduct inquiries into private affirs in purported Incorporated.
aid of legislation. xxx xxxx xxx
Coming to the specific issues raised in this case, petitioners contend that (1) the In answer to Mr. Lopa, I will quote pertinent portions from an Official Memorandum to
Senate Blue Ribbon Committee's inquiry has no valid legislative purpose, i.e., it is the Presidential Commission of Good Government written and signed by former
not done in aid of legislation; (2) the sale or disposition of hte Romualdez Governor, now Congressman Jose Ramirez, in his capacity as head of the PCGG Task
corporations is a "purely private transaction" which is beyond the power of the Force for Region VIII. In his memorandum dated July 3, 1986, then Governor Ramirez
Senate Blue Ribbon Committee to inquire into; and (3) the inquiry violates their right stated that when he and the members of his task force sought to serve a
to due process. sequestration order on the management of SOLOIL in Tanauan, Leyte, management
The 1987 Constition expressly recognizes the power of both houses of Congress to officials assured him that relatives of the President of the Philippines were personally
conduct inquiries in aid of legislation. 14 Thus, Section 21, Article VI thereof discussing and representing SOLOIL so that the order of sequestration would be
provides: lifted and that the new owner was Mr. Ricardo A. Lopa.
The Senate or the House of Representatives or any of its respective committee may I will quote the pertinent portions in the Ramire's memorandum.
conduct inquiries in aid of legislation in accordance with its duly published rules of The first paragraph of the memorandum reads as follows and I quote, Mr. President:
procedure. The rights of persons appearing in or affected by such inquiries shall be "Our sequestration work of SOLOIL in Tanauan, Leyte was not heeded by
respected. 15 management because they said another representation was being made to this
The power of both houses of Congress to conduct inquiries in aid of legislation is not, Commission for the ventual lifting of our sequestrationorder. They even assured us
therefore, absolute or unlimited. Its exercise is circumscribed by the afore-quoted that Mr. Ricardo Lopa and Peping Cojunangco were personally discussing and
provision of the Constitution. Thus, as provided therein, the investigation must be "in representing SOLOIL, so the order of sequestration will finally be lifted. While we
aid of legislation in accordance with its duly published rules of procedure" and that attempted to carry on our order, management refused to cooperate and vehemently
"the rights of persons appearing in or affected by such inquiries shall be respected." turned down our request to make available to us the records of the company. In fact
It follows then that the rights of persons under the Bill of Rights must be respected, it was obviously clear that they will meet us with forcethe moment we insist on
including the right to due process and the right not to be compelled to testify doing normally our assigned task. In view of the impending threat, and to avoid any
against one's self. untoward incident we decided to temporarily suspend our work until there is a more
The power to conduct formal inquiries or investigations in specifically provided for in categorical stand of this Commission in view of the seemingly influential
Sec. 1 of the Senate Rules of Procedure Governing Inquiries in Aid of represetation being made by SOLOIL for us not to continue our work."
Legislation. Such inquiries may refer to the implementation or re-examination of any Another pertinent portion of the same memorandum is paragraph five, which reads
law or in connection with any proposed legislation or the formulation of future as follows, and I quote Mr. President:
legislation. They may also extend to any and all matters vested by the Constitution "The President, Mr. Gamboa, this is, I understand, the President of SOLOIL, and the
in Congress and/or in the Seante alone. Plant Superintendent, Mr. Jimenez including their chief counsel, Atty. Mandong
As held in Jean L. Arnault vs. Leon Nazareno, et al., 16 the inquiry, to be within the Mendiola are now saying that there have been divestment, and that the new owner
jurisdiction of the legislative body making it, must be material or necessary to the is now Mr. Ricardo Lopa who according to them, is the brother-in-law of the
exervise of a power in it vested by the Constitution, such as to legislate or to expel a President. They even went further by telling us that even Peping Cojuangco who we
member. know is the brother of her excellency is also interested in the ownership and
Under Sec. 4 of the aforementioned Rules, the Senate may refer to any committee management of SOLOIL. When he demanded for supporting papers which will
or committees any speech or resolution filed by any Senator which in tis judgment indicate aforesaid divestment, Messrs. Gamboa, Jimenez and Mendiola refused
requires an appropriate inquiry in aid of legislation. In order therefore to ascertain vehemently to submit these papers to us, instead they said it will be submitted
the character or nature of an inquiry, resort must be had to the speech or resolution directly to this Commission. To our mind their continuous dropping of names is not
under which such an inquiry is proposed to be made. good for this Commission and even to the President if our dersire is to achieve
A perusal of the speech of Senator Enrile reveals that he (Senator Enrile) made a respectability and stability of the government."
statement which was published in various newspapers on 2 September 1988 The contents of the memorandum of then Governor and now Congressman Jose
accusing Mr. Ricardo "Baby" Lopa of "having taken over the FMMC Group of Ramirez were personally confirmed by him in a news interview last September 7,
Companies." As a consequence thereof, Mr. Lopa wrote a letter to Senator Enrile on 1988.
4 September 1988 categorically denying that he had "taken over " the FMMC Group xxx xxxx xxx
of Companies; that former PCGG Chairman Ramon Diaz himself categorically stated
in a telecast interview by Mr. Luis Beltran on Channel 7 on 31 August 1988 that
Also relevant to this case, Mr. President, is a letter of Mr. Ricardo Lopa himself in elementary and secondary levels reforestration, and employment generation for
August 11, 1988 issue of the newspaper Malaya headlined "On Alleged Takeover of rural and urban workers;
Romualdez Firms." WHEREAS, the government and the present leadeship must demonstrate in their
Mr. Lopa states in the last paragraph of the published letter and I quote him: public and private lives integrity, honor and efficient management of government
12. As of this writing, the sales agreement is under review by the PCGG solely to services lest our youth become disillusioned and lose hope and return to an Idelogy
determine the appropriate price. The sale of these companies and our prior rigtht to and form of government which is repugnant to true freedom, democratic
requires them have never been at issue. participation and human rights: Now, therefore, be it.
Perhaps I could not make it any clearer to Mr. Lopa that I was not really making Resolved by the Senate, That the activities of the Presidential Commission on Good
baseless and malicious statements. Government be investigated by the appropriate Committee in connection with the
Senator Enrile concluded his privilege speech in the following tenor: implementation of Section 26, Article XVIII of the Constitution. 19
Mr. President, it may be worthwhile for the Senate to look into the possible violation Thus, the inquiry under Senate Resolution No. 212 is to look into the charges against
of the law in the case particularly with regard to Republic Act No. 3019, the Anti- the PCGG filed by the three (3) stockholders of Oriental Petroleum in connection with
Graft and Corrupt Practices Act, Section 5 of which reads as follows and I quote: the implementation of Section 26, Article XVIII of the Constitution.
Sec. 5. Prohibition on certain relatives. It shall be unlawful for the spouse or for It cannot, therefore, be said that the contemplated inquiry on the subject of the
nay relative, by consanguinity or affinity, within the third civil degree, of the privilege speech of Senator Juan Ponce Enrile, i.e., the alleged sale of the 36 (or 39)
President of the Philippines, the Vice-President of the Philippines, the President of corporations belonging to Benjamin "Kokoy" Romualdez to the Lopa Group is to be
the Senate, or the Speaker of the House of Representatives, to intervene directly or conducted pursuant to Senate Resolution No. 212 because, firstly, Senator Enrile did
indirectly, in any business, transaction, contract or application with the Government: not indict the PCGG, and, secondly, neither Mr. Ricardo Lopa nor the herein
Provided, that this section shall not apply to any person who prior to the assumption petitioners are connected with the government but are private citizens.
of office of any of the above officials to whom he is related, has been already dealing It appeals, therefore, that the contemplated inquiry by respondent Committee is not
with the Government along the same line of business, nor to any transaction, really "in aid of legislation" becuase it is not related to a purpose within the
contract or application filed by him for approval of which is not discretionary on the jurisdiction of Congress, since the aim of the investigation is to find out whether or
part of the officials concerned but depends upon compliance with requisites not the ralatives of the President or Mr. Ricardo Lopa had violated Section 5 RA No.
provided by law, nor to any act lawfully performed in an official capacity or in the 3019, the "Anti-Graft and Corrupt Practices Act", a matter that appears more within
exercise of a profession. the province of the courts rather than of the legislature. Besides, the Court may take
Mr. President, I have done duty to this Senate and to myself. I leave it to this august judicial notice that Mr. Ricardo Lopa died during the pendency of this case. In John T.
Body to make its own conclusion. Watkins vs. United States, 20 it was held held:
Verily, the speech of Senator Enrile contained no suggestion of contemplated ... The power of congress to conduct investigations in inherent in the legislative
legislation; he merely called upon the Senate to look into a possible violation of Sec. process. That power is broad. it encompasses inquiries concerning the
5 of RA No. 3019, otherwise known as "The Anti-Graft and Corrupt Practices Act." I administration of existing laws as well as proposed, or possibly needed statutes. It
other words, the purpose of the inquiry to be conducted by respondent Blue Ribbon includes surveys of defects in our social,economic, or political system for the
commitee was to find out whether or not the relatives of President Aquino, purpose of enabling Congress to remedy them. It comprehends probes into
particularly Mr. ricardo Lopa, had violated the law in connection with the alleged sale departments of the Federal Government to expose corruption, inefficiency or
of the 36 or 39 corporations belonging to Benjamin "Kokoy" Romualdez to the Lopaa waste. But broad asis this power ofinquiry, it is not unlimited. There is no general
Group. There appears to be, therefore, no intended legislation involved. authority to expose the private affairs ofindividuals without justification in terms of
The Court is also not impressed with the respondent Committee's argument that the the functions of congress. This was freely conceded by Solicitor General in his
questioned inquiry is to be conducted pursuant to Senate Resolution No. 212. The argument in this case. Nor is the Congress a law enforcement or trial agency. These
said resolution was introduced by Senator Jose D. Lina in view of the representaions are functions of the executive and judicial departments of government. No inquiry is
made by leaders of school youth, community groups and youth of non-governmental an end in itself; it must be related to and in furtherance of a legitimate task of
organizations to the Senate Committee on Youth and Sports Development, to look Congress. Investigations conducted soly for the personal aggrandizement of the
into the charges against the PCGG filed by three (3) stockholders of Oriental investigators or to "punish" those investigated are indefensible. (emphasis supplied)
petroleum, i.e., that it has adopted a "get-rich-quick scheme" for its nominee- It can not be overlooked that when respondent Committee decide to conduct its
directors in a sequestered oil exploration firm.The pertinent portion of Senate investigation of the petitioners, the complaint in Civil No. 0035 had already been
Resolution No. 212 reads as follows: filed with the Sandiganbayan. A perusal of that complaint shows that one of its
xxx xxx xxx principal causes of action against herein petitioners, as defendants therein, is the
WHEREAS, recent developments have shown that no less than the Solicitor-General alleged sale of the 36 (or 39) corporations belonging to Benjamin "Kokoy"
has stated that the PCGG Chairman and at least three Commissioners should resign Romualdez. Since the issues in said complaint had long been joined by the filing of
and that the agency should rid itself of "ineptness, incompetence and corruption" petitioner's respective answers thereto, the issue sought to be investigated by the
and that the Sandiganbayan has reportedly ordered the PCGG to answer charges respondent Commitee is one over which jurisdiction had been acquired by the
filed by three stockholders of Oriental Petroleum that it has adopted a "get-rich- Sandiganbayan. In short, the issue had been pre-empted by that court. To allow the
quick scheme" for its nominee-directors in a sequestered oil exploration firm; respondent Committee to conduct its own investigation of an issue already before
WHEREAS, leaders of school youth, community groups and youth of non- the Sandiganbayan would not only pose the possibility of conflicting judgments
governmental organization had made representations to the Senate Committee on betweena legislative commitee and a judicial tribunal, but if the Committee's
Youth and Sports Development to look into the charges against the PCGG since said judgment were to be reached before that of the Sandiganbayan, the possibility of its
agency is a symbol of the changes expected by the people when the EDSA influence being made to bear on the ultimate judgment of the Sandiganbayan can
revolution took place and that the ill-gotten wealth to be recovered will fund priority not be discounted.
projects which will benefit our people such as CARP, free education in the
In fine, for the rspondent Committee to probe and inquire into the same justiciable subject of contemplated inquiry before the respondet Committee, the respondent
controversy already before the Sandiganbayan, would be an encroachment into the Senate Blue Ribbon Committee is hereby enjoined from compelling the petitioners
exclusive domain of judicial jurisdiction that had much earlier set in. In Baremblatt and intervenor to testify before it and produce evidence at the said inquiry.
vs. United States, 21 it was held that: SO ORDERED.
Broad as it is, the power is not, howevern, without limitations. Since congress may Fernan, C.J., Melencio-Herrera, Feliciano, Bidin, Grio-Aquino, Medialdea, Regalado,
only investigate into those areas in which it may potentially legislate or appropriate, Davide, Jr. and Romero, JJ., concur.
it cannot inquire into matters which are within the exclusive province of one of the
other branches of the government. Lacking the judicial power given to the Judiciary,
it cannot inquire into mattes that are exclusively the concern of the Judiciary. Neither Separate Opinions
can it suplant the Executive in what exclusively belongs to the Executive. ...
Now to another matter. It has been held that "a congressional committee's right to PARAS, J., concurring:
inquire is 'subject to all relevant limitations placed by the Constitution on I concur principally because any decision of the respondent committee may unduly
governmental action,' including "'the relevant limitations of the Bill of Rights'." 22 influence the Sandiganbayan
In another case GUTIERREZ, JR., J., dissenting:
... the mere semblance of legislative purpose would not justify an inquiry in the face I regret that I must express a strong dissent the Court's opinion in this case.
of the Bill of Rights. The critical element is the exeistence of, and the weight to be The Court is asserting a power which I believe we do not possess. We are
ascribed to, the interest of the Congress in demanding disclosures from an unwilling encroaching on the turf of Congress. We are prohibiting the Senate from proceeding
witness. We cannot simply assume, however, that every congressional investigation with a consitutionally vested function. We are stopping the Senate Blue Ribbon
is justified by a public need that over-balances any private rights affected. To do so Committee from exercising a legislative prerogative investigations in aid of
would be to abdicate the responsibility placed by the Constitution upon the judiciary legislation. We do so becuase we somehow feel that the purported aim is not the
to insure that the Congress does not unjustifiably encroah upon an individual's right real purpose.
to privacy nor abridge his liberty of speech, press, religion or assembly. 23 The Court has no power to second guess the motives behind an act of a House of
One of the basic rights guaranteed by the Constitution to an individual is the right Congress. Neither can we substitute our judgment for its judgment on a matter
against self-incrimination. 24 Thir right constured as the right to remain completely specifically given to it by the Constitution. The scope of the legislative power is
silent may be availed of by the accused in a criminal case; but kit may be invoked broad. it emcompasses practically every aspect of human or corporate behavior
by other witnesses only as questions are asked of them. capable of regulation. How can this Court say that unraveling the tangled and secret
This distinction was enunciated by the Court in Romeo Chavez vs. The Honorable skeins behind the acquisition by Benjamin "Kokoy" Romualdez of 39 corporations
Court of Appeals, et al. 25 thus under the past regime and their sudden sale to the Lopa Group at the outset of the
Petitioner, as accused, occupies a different tier of protection from an ordinary new dispensation will not result in useful legislation?
witness. Whereas an ordinary witness may be compelled to take the witness stand The power of either House of Congress to conduct investigations is inherent. It needs
and claim the privilege as each question requiring an incriminating answer is hot at no textual grant. As stated in Arnault v. Nazareno, 87 Phil. 29 (1950)
him, an accused may altother refuse to take the witness stand and refuse to answer Our form of government being patterned after the American system the framers
any all questions. of our Constitution having drawn largely from American institutions and practices
Moreover, this right of the accused is extended to respondents in administrative we can, in this case, properly draw also from American precedents in interpreting
investigations but only if they partake of the nature of a criminal proceeding or analogous provisions of our Constitution, as we have done in other cases in the past.
analogous to a criminal proceeding. In Galman vs. Pamaran, 26the Court reiterated Although there is no provision in the Constitution expressly investing either House of
the doctrine in Cabal vs. Kapuanan (6 SCRA 1059) to illustrate the right of witnesses Congress with power to make investigations and exact testimony to the end that it
to invoke the right against self-incrimination not only in criminal proceedings but may exercise its legislative functions advisely and effectively, such power is so far
also in all other types of suit incidental to the legislative function as to be implied. In other words, the power of
It was held that: inquiry with process to enforce it is an essential and appropriate auxiliary to
We did not therein state that since he is not an accused and the case is not a the legislative function. A legislative body cannot legislate wisely or effectively in
criminal case, Cabal cannot refuse to take the witness stand and testify, and that he the absence of information respecting the conditions which the legislation is
can invoke his right against self-incrimination only when a question which tends to intended to affect or change: and where the legislative body does not itself possess
elicit an answer that will incriminate him is propounded to him. Clearly then, it is not the requisite information which is not infrequently true recourse must be had to
the characeter of the suit involved but the nature of the proceedings that controls. others who do possess it. ... (At p. 45)
The privilege has consistenly been held to extend to all proceedings sanctioned by The framers of the present Constitution were not content to leave the power
law and to all cases in which punishment is sought to be visited upon a witness, inherent, incidental or implied. The power is now expressed as follows:
whether a party or not. Sec. 21 The Senate or the House of Representatives or may of its respective
We do not here modify these doctrines. If we presently rule that petitioners may not committees may conduct inquiries in aid of legialtion in accordance with its duly
be compelled by the respondent Committee to appear, testify and produce evidenc published rules of precedure. The rights of persons appearing in or affected by such
before it, it is only becuase we hold that the questioned inquiry is not in aid of inquiries shall be respected.
legislation and, if pursued, would be violative of the principle of separation of powers Apart from the formal requirement of publishing the rules of procedure, I agree that
between the legislative and the judicial departments of government, ordained by the there are three queries which, if answered in the affirmative, may give us cause to
Constitution. intervene.
WHEREFORE, the petition is GRANTED. The Court holds that, under the facts, First, is the matter being investigated one on which no valid legislation could
including the circumtance that petitioners are presently impleaded as defendants in possibly be enacted?
a case before the Sandiganbayan, which involves issues intimately related to the
Second, is Congress encroaching on terrain which the Constitution has reserved as Whatever may be said of the Committee on the un-American activities, its
the exclusive domain of another branch of government? authorizing resolution recites it is in aid of legislation and that fact is establshed for
And third, is Congress violating the basic liberties of an individual? courts.
The classic formulation of the power of the Court to interpret the meaning of "in aid And since the matter before us in somethingwe inherited from the American
of legislation" is expressed inKilbourn v. Thompson, 103 U.S. 168 (1880). constitutional system, rulings from the decision of federal courts may be apropos.
The House of Representatives passed a resolution creating a committee to (Stamler v. Willis, 287 F. Supp. 734 [1968]
investigate the financial relations between Jay Cooke and Co., a depositary of federal The Court cannot probe into the motives of the members of the Congress.
funds and a real estate pool. A debtor of Jay Cooke and Co, Kilbourn, general Barsky v. United States, 167 F. 2d 241 [1948]
manager of the pool refused to answer questions put to him by the Committee and The measure of the power of inquiry is the potentiality that constitutional legislation
to produce certain book sna papers. Consequently, he was ordered jailed for forty- might ensue from information derived from such inquiry.
five days. He brought an action for false imprisonment and the Supreme Court The possibility that invalid as well as valid legislation might ensue from an inquiry
decided in his favor. does not limit the power of inquiry, since invalid legislation might ensue from any
Speaking through Justice Miller, the Court ruled: inquiry.
The resolution adopted as a sequence of this preamble contains no hint of any United States v. Shelton, 148 F. Supp. 926 [1957]
intention of final action by Congress on the subject, In all the argument of the case The contention of the defendant that the hearing at which he testified and from
no suggestion has been made of what the House of Respresentatives or the which the indictment arose was not in furtherance og a legislative purpose proceeds
Congress could have done in the way of remedying the wrong or securing the on the assumption that a failure to have specific legislation in contemplation, or a
creditors of Jay Cooke and Co., or even the United States. Was it to be simply a failure to show that legislation was in fact enacted, estabished an absence of
fruitless investigation into the personal affiars of individuals? If so the House of legislative purpose. This argument is patently unsound. The investigative power of
Representatives had no power or authority in the matter more than any other equal Congress is not subject to the limitation that hearings must result in legislation or
number of gentlemen interested for the government of their country. By fruitless we recommendations for legislation.
mean that it could result in no valid legislation on the subject to which the inquiry United States v. Deutch (147 F. Supp. 89 (1956)
referrred. (Kilbourn v. Thompson, Id. at page 388) Under the Constitution of the U.S., the Federal Government is a government of
The Kilbourn decision is, however, crica 1880. The world has turned over many limited powers. The Congress, being the legislative branch of the Federal
times since that era. The same court which validated separate but equal facilities Government, is also clothed with limited legislative powers. In orders, however, to
against of racial discrimination and ruled that a private contract may bar improved carry its legislative powers into effect successfully, it has always been held that
labor standards and social justice legislation has reversed itslef on these and many Congress has the power to secure information concerning matters in respect to
other questions. which it has the authority to legislate. In fact, it would seem that Congress must
In McGrain v. Daugherty, 273 U.S. 135; 71 L. Ed. 580 [1927], the court went beyond secure information in order to legislate intelligently. Beyond that, the Congress has
the express terms of the Senate resolution directing the investigation of a former the right secure information in order to determine whether or not to legislate on a
Attorney General for non-feasance, misfeasance, and malfeasance in office. particular subject matter on which it is within its constitutional powers to act.
It presumed that the action of the Senate was with a legitimate object. (Emphasis Supplied)
... Plainly the subject was one on which legislation could be had and would be The even broader scope of legislative investigation in the Philippine context is
materially aided by the information which the investigation was calculated to elicit. explained by a member of the Constitutional Commission.
This becomes manifest when it is reflected that the functions of the Department of The requirement that the investigation be "in aid of legislation" is an essential
Justice, the powers and duties of the Attorney-General and the duties of his element for establishing the jurisdiction of the legislative body. It is, however, a
assitants, are all subject to regulation by congressional legislation, and that the requirement which is not difficult to satisfy becuase, unlike in the United States,
department is maintained and its activitites are carried on under such appropriations where legislative power is shared by the United State Congress and the states
as in the judgment of Congress are needed from year to year. legislatures, the totality of legislative power is possessed by the Congress nad its
The only legitimate object the Senate could have in ordering the investigation was to legislative field is well-nigh unlimited. "It would be difficult to define any limits by
aid it in legislating, and we think the subject was the real object. An express avowal which the subject matter of its inquiry can be bounded." (Supra, at p. 46) Moreover,
of the object would have been better; but in view of the particular subject matter it is not necessary that every question propounded to a witness must be material to
was not indispenable. In People ex rel. Mc Donald v. Keeler, 99, N.Y. 463, 52 Am. Rep. a proposed legislation. "In other words, the materiality of the question must be
49, 2 N.E. 615, where the Court of Appeals of New york sustained an investigation determined by its direct relation to the subject of the inquiry and not by its indirect
order by the House of Representatives of that state where the resolution contained relation to any proposed or possible legislation. The reason is that the necessity or
no avowal, but disclosed that it definitely related to the administrative of public lack of necessity for legislative action and form and character of the action itself are
office the duties of which were subject to legislative regulation, the court said (pp. determined by the sum total of the information to be gathered as a result of the
485, 487): Where public institutions under the control of the State are ordered to be investigation, and not by a fraction to be gathered as a result of the investigation,
investigated, it is generally with the view of some legislative action respecting them, and not by a fraction of such information elicited from a single question. (Id., at 48)
and the same may be said in respect of public officers,' And again "We are bound to On the basis of this interpretation of what "in aid of legislation" means, it can readily
presume that the action of the legislative body was with a legitimate object if it is be seen that the phrase contributes practically nothing towards protecting
capable of being so construed, and we have no right to assume that the contrary witnesses. Practically any investigation can be in aid of the broad legislative power
was intended." (McGrain v. Daugherty Id., at page 594-595, Emphasis supplied) of Congress. The limitation, therefore cannot effectively prevent what Kilbourn v.
The American Court was more categorical in United States v. Josephson, 333 U.S. Thompson (103 U.S. 168 [1880]) characterized as "roving commissions" or what
858 (1938). It declared that declaration of legislative purpose was conclusive on the Watkins v. United States (354 U.S. 178, 200 [1957] labeled as exposure for the sake
Courts: of exposure. (Bernas, Constitution of the Republic of the Philippines, Vol. II, 1st Ed.,
page 132).
Applying the above principles to the present casem, it can readily be seen that the The Constitution expressly provides that "the rights of persons appearing in or
Senate is investigating an area where it may potentially legislate. The ease with affected by such inquiries shall be respected.
which relatives of the President were allegedly able to amass great wealth under the It should be emphasized that the constitutional restriction does not call for the
past regime is a legitimate area of inquiry. And if we tack on the alleged attempts o f banning or prohibition of investigations where a violation of a basis rights is claimed.
relatives of a succeeding adminsitration to duplicate the feat, the need for remedial It only requires that in the course of the proceedings, the right of persons should
legislation becomes more imperative. be respected.
Our second area of concern is congressional encroachment on matters reserved by What the majority opinion mandates is a blanket prohibition against a witness
the Constitution for the Executive or the Judiciary. testifying at all, simply because he is already facing charges before the
The majority opinion cites the decision in Angara v. Electoral Commission, 63 Phil. Sandiganbayan. To my mind, the Consitution allows him to interpose objections
139 (1936) explaining our power to determined conflicting claims of authority. It is whenever an incriminating question is posed or when he is compelled to reveal his
indeed the function on this Court to allocate constitutional boundaries but in the ocurt defenses, but not ot refuse to take the witness stand completely.
exercise of this "umpire" function we have to take care that we do not keep any of Arnault v. Nazareno, supra, illustrates the reticence, with which the court views
the three great departments of government from performing functions peculiar to petitions to curtail legislative investigations even where an invocation of individual
each department or specifically vested to it sby the Constitution. When a power is liberties is made.
vested, ti carries with is everything legitimately neede to exercise it. In Arnault, the entire country already knew the name of the presidential realtive
It may be argued that the investigation into the Romualdez Lopa transactions is whom the Sentate was trying to link to the Tambobong-Buenavista estate anomalies.
more appropriate for the Department of Justice and the judiciary. This argument Still, the Court did not interfere when Arnault refused to answer specific questions
misses the point of legislative inquiry. directed at him and he was punished for hir refusal. The Court did not restrain the
The prosecution of offenders by the Department of Justice or the Ombudsman and Senate when Arnault was sent o the national penitentiary for an indefinite visit until
their trial before courts of justice is intended to punish persons who violate the law. the name which the Senate wanted him to utter was extracted. Only when the
Legislative investigations go further. The aim is to arrive at policy determinations imprisonment became ureasonably prolonged and the situation in Congress had
which may or may not be enacted into legislation. Referral to prosecutors or courts changed was he released.
of justice is an added bonus. For sure, the Senate Blue Ribbon Committee knows it As pointed out by the respondents, not one question has been asked requiring an
cannot sentence any offender, no matter how overwhelming the proof that it may answer that would incriminate the petitioners. The allegation that their basic rights
gatherm to a jail term. But certainly, the Committee can recommend to Congress are vilolated is not only without basis but is also premature.
how the situation which enabled get-rich-quick schemes to flourish may be I agree with the respondents that the slae of 39 Romualdez corporations to Mr. Lopa
remedied. The fact that the subject of the investigation may currently be undergoing is not a purely private transaction into which the Senate may not inquire. if this were
trial does not restrict the power of Congress to investigate for its own purposes. The so, much of the work of the Presidential Commission on Good Government (PCGG)
legislative purpose is distinctly different from the judicial purpose. as it seeks to recover illegally acquired wealth would be negated. Much of what
In Sinclair v. United States, 279 U.S. 263, 73 L ed. 692 (1928), leases of naval PCGG is trying to recover is the product of arrangements which are not only private
reservations to oil companies were investigated by the United States Senate. On a but also secret and hidden.
finding that certain leases were fraudulent, court action was recommended. In other I therefore, vote to DISMISS the petition.
words, court action on one hand and legislation on the other, are not mutually Narvasa, J., dissents.
exclusive. They may complement each other. CRUZ, J., dissenting:
... It may be conceded that Congress is without authority to compel disclosyres for I regret I am unable to give my concurrence, I do not agree that the investigation
the purpose of aiding the prosecution of pending suits; but the authority of that being conducted by the Blue Ribbon Committee is not in aid of legislation.
body, directly or through it Committees, to require pertinent disclosures in aid of its In Arnault v. Nazareno, 87 Phil. 29, this Court observed that "we are bound to
own consitutional power is not abridged because the information sought to be presume that the action of the legislative body was with a legitimate object if it is
elicited may also be of use in such suits... It is plain that investigation of the matters capable of being so construed, and we have no right ot assume that the contrary
involved in suits brought or to be commenced under the Senate resolution directing was intended." (People ex rel. Mc Donald vs. Keeler, 99 N.Y. 463; 52 Am. Rep., 49; 2
the institution of suits for the cancellation of the leases might directly aid in respect N.E., 615, quoted with approval by the U.S. Supreme Court in McGrain vs.
of legislative action... (Sinclair v. United States, Id.at page 698). Daugherty, 273 U.S. 135). As far as I know, that is still the rule today.
In United States v. Orman, 207 F. 2d Ed. 148 (1953), the court declared that it was More importantly, the presumption is supported by the established facts. The inquiry
pertinent for a legislative committee to seek facts indicating that a witness was is sustainable as an implied of power the legislature and even as expressly limited
linked to unlawful intestate gambling. by the Constitution.
The power of a congressional committee to investigate matters cannot be The inquiry deals with alleged manipulations of public funds and illicit acquisitions of
challenged on the ground that the Committee went beyond the scope of any properties now being claimed by the PCGG for the Republic of the Philippines. The
contemplated legislative and assumed the functions of a grand jury. Whre the genral purpose of the Committee is to ascertain if and how such anomalies have been
subject of investigation is one concerning which Congress can legislate, and the committed. It is settled that the legislature has a right to investigate the disposition
information sought might aid the congressional consideration, in such a situation a of the public funds it has appropriated; indeed, "an inquiry into the expenditure of all
legitimate legislative purpose must be presumed... public money is na indispensable duty of the legislature." Moreover, an investigation
I submit that the filing of indictments or informations or the trial of certain persons of a possible violation of a law may be useful in the drafting of amendatory
cannot, by themselves, half the intitiation or stop the progress of legislative legislation to correct or strengthen that law.
investigations. The ponencia quotes lengthily from Senator Enrile's speech and concludes that it
The other ground which I consider the more important one is where the legislative "contained no suggestions of contemplated legislation; he merely called upon the
investigation violates the liberties of the witnesses. Senate to look into a possible violation of section 5 of R.A. No. 3019." However,
according to McGrain v. Daugherty, supra:
Primarily, the purpose for which legislative inquiry and investigation is pursued is to incidental to the legislative function as to be implied. In other words, the power of
serve as an aid in legislation. Through it, the legislature is able to obtain facts or inquiry with process to enforce it is an essential and appropriate auxiliary to
data in aid fo proposed legislation. However, it is not necessary that the resolution the legislative function. A legislative body cannot legislate wisely or effectively in
ordering an investigation should in terms expressly state that the object of the the absence of information respecting the conditions which the legislation is
inquiry is to obtain data in aid of proposed legislation. It is enough that such purpose intended to affect or change: and where the legislative body does not itself possess
appears from a consideration of the entire proceedings or one in which legislation the requisite information which is not infrequently true recourse must be had to
could be had and would be materially aided by the information which the others who do possess it. ... (At p. 45)
investigation was calculated to elicit. An express avowal of the object would be The framers of the present Constitution were not content to leave the power
better, but such is not indispensable. (Emphasis supplied). inherent, incidental or implied. The power is now expressed as follows:
The petitioner's contention that the questioned investigation would compel them to Sec. 21 The Senate or the House of Representatives or may of its respective
reveal their defense in the cases now pending against them in the Sandigangbayan committees may conduct inquiries in aid of legialtion in accordance with its duly
is untenable. They know or should know that they cannot be compelled to answer published rules of precedure. The rights of persons appearing in or affected by such
incriminating questions. The case of Chavez v. Court of Appeals, 24 SCRA 663, inquiries shall be respected.
where we held that an accused may refuse at the outset to take the stand on the Apart from the formal requirement of publishing the rules of procedure, I agree that
ground that the questions to be put by the prosecutor will tend to incriminate him is, there are three queries which, if answered in the affirmative, may give us cause to
of course, not applicable to them. They are not facing criminal charges before the intervene.
Blue Ribbon Committee. Like any ordinary witness, they can invoke the right against First, is the matter being investigated one on which no valid legislation could
self-incrimination only when and as the incriminating question is propounded. possibly be enacted?
While it is true that the Court is now allowed more leeway in reviewing the Second, is Congress encroaching on terrain which the Constitution has reserved as
traditionally political acts of the legislative and executive departments, the power the exclusive domain of another branch of government?
must be exercised with the utmost circumspection lest we unduly trench on their And third, is Congress violating the basic liberties of an individual?
prerogatives and disarrange the constitutional separation of powers. That power is The classic formulation of the power of the Court to interpret the meaning of "in aid
available to us only if there is a clear showing of a grave abuse of discretion, which I of legislation" is expressed inKilbourn v. Thompson, 103 U.S. 168 (1880).
do not see in the case at bar. The House of Representatives passed a resolution creating a committee to
Guided by the presumption and the facts, I vote to DISMISS the petition. investigate the financial relations between Jay Cooke and Co., a depositary of federal
Narvasa, J., dissents. funds and a real estate pool. A debtor of Jay Cooke and Co, Kilbourn, general
manager of the pool refused to answer questions put to him by the Committee and
to produce certain book sna papers. Consequently, he was ordered jailed for forty-
# Separate Opinions five days. He brought an action for false imprisonment and the Supreme Court
PARAS, J., concurring: decided in his favor.
I concur principally because any decision of the respondent committee may unduly Speaking through Justice Miller, the Court ruled:
influence the Sandiganbayan The resolution adopted as a sequence of this preamble contains no hint of any
GUTIERREZ, JR., J., dissenting: intention of final action by Congress on the subject, In all the argument of the case
I regret that I must express a strong dissent the Court's opinion in this case. no suggestion has been made of what the House of Respresentatives or the
The Court is asserting a power which I believe we do not possess. We are Congress could have done in the way of remedying the wrong or securing the
encroaching on the turf of Congress. We are prohibiting the Senate from proceeding creditors of Jay Cooke and Co., or even the United States. Was it to be simply a
with a consitutionally vested function. We are stopping the Senate Blue Ribbon fruitless investigation into the personal affiars of individuals? If so the House of
Committee from exercising a legislative prerogative investigations in aid of Representatives had no power or authority in the matter more than any other equal
legislation. We do so becuase we somehow feel that the purported aim is not the number of gentlemen interested for the government of their country. By fruitless we
real purpose. mean that it could result in no valid legislation on the subject to which the inquiry
The Court has no power to second guess the motives behind an act of a House of referrred. (Kilbourn v. Thompson, Id. at page 388)
Congress. Neither can we substitute our judgment for its judgment on a matter The Kilbourn decision is, however, crica 1880. The world has turned over many
specifically given to it by the Constitution. The scope of the legislative power is times since that era. The same court which validated separate but equal facilities
broad. it emcompasses practically every aspect of human or corporate behavior against of racial discrimination and ruled that a private contract may bar improved
capable of regulation. How can this Court say that unraveling the tangled and secret labor standards and social justice legislation has reversed itslef on these and many
skeins behind the acquisition by Benjamin "Kokoy" Romualdez of 39 corporations other questions.
under the past regime and their sudden sale to the Lopa Group at the outset of the In McGrain v. Daugherty, 273 U.S. 135; 71 L. Ed. 580 [1927], the court went beyond
new dispensation will not result in useful legislation? the express terms of the Senate resolution directing the investigation of a former
The power of either House of Congress to conduct investigations is inherent. It needs Attorney General for non-feasance, misfeasance, and malfeasance in office.
no textual grant. As stated in Arnault v. Nazareno, 87 Phil. 29 (1950) It presumed that the action of the Senate was with a legitimate object.
Our form of government being patterned after the American system the framers ... Plainly the subject was one on which legislation could be had and would be
of our Constitution having drawn largely from American institutions and practices materially aided by the information which the investigation was calculated to elicit.
we can, in this case, properly draw also from American precedents in interpreting This becomes manifest when it is reflected that the functions of the Department of
analogous provisions of our Constitution, as we have done in other cases in the past. Justice, the powers and duties of the Attorney-General and the duties of his
Although there is no provision in the Constitution expressly investing either House of assitants, are all subject to regulation by congressional legislation, and that the
Congress with power to make investigations and exact testimony to the end that it department is maintained and its activitites are carried on under such appropriations
may exercise its legislative functions advisely and effectively, such power is so far as in the judgment of Congress are needed from year to year.
The only legitimate object the Senate could have in ordering the investigation was to which the subject matter of its inquiry can be bounded." (Supra, at p. 46) Moreover,
aid it in legislating, and we think the subject was the real object. An express avowal it is not necessary that every question propounded to a witness must be material to
of the object would have been better; but in view of the particular subject matter a proposed legislation. "In other words, the materiality of the question must be
was not indispenable. In People ex rel. Mc Donald v. Keeler, 99, N.Y. 463, 52 Am. Rep. determined by its direct relation to the subject of the inquiry and not by its indirect
49, 2 N.E. 615, where the Court of Appeals of New york sustained an investigation relation to any proposed or possible legislation. The reason is that the necessity or
order by the House of Representatives of that state where the resolution contained lack of necessity for legislative action and form and character of the action itself are
no avowal, but disclosed that it definitely related to the administrative of public determined by the sum total of the information to be gathered as a result of the
office the duties of which were subject to legislative regulation, the court said (pp. investigation, and not by a fraction to be gathered as a result of the investigation,
485, 487): Where public institutions under the control of the State are ordered to be and not by a fraction of such information elicited from a single question. (Id., at 48)
investigated, it is generally with the view of some legislative action respecting them, On the basis of this interpretation of what "in aid of legislation" means, it can readily
and the same may be said in respect of public officers,' And again "We are bound to be seen that the phrase contributes practically nothing towards protecting
presume that the action of the legislative body was with a legitimate object if it is witnesses. Practically any investigation can be in aid of the broad legislative power
capable of being so construed, and we have no right to assume that the contrary of Congress. The limitation, therefore cannot effectively prevent what Kilbourn v.
was intended." (McGrain v. Daugherty Id., at page 594-595, Emphasis supplied) Thompson (103 U.S. 168 [1880]) characterized as "roving commissions" or what
The American Court was more categorical in United States v. Josephson, 333 U.S. Watkins v. United States (354 U.S. 178, 200 [1957] labeled as exposure for the sake
858 (1938). It declared that declaration of legislative purpose was conclusive on the of exposure. (Bernas, Constitution of the Republic of the Philippines, Vol. II, 1st Ed.,
Courts: page 132).
Whatever may be said of the Committee on the un-American activities, its Applying the above principles to the present casem, it can readily be seen that the
authorizing resolution recites it is in aid of legislation and that fact is establshed for Senate is investigating an area where it may potentially legislate. The ease with
courts. which relatives of the President were allegedly able to amass great wealth under the
And since the matter before us in somethingwe inherited from the American past regime is a legitimate area of inquiry. And if we tack on the alleged attempts o f
constitutional system, rulings from the decision of federal courts may be apropos. relatives of a succeeding adminsitration to duplicate the feat, the need for remedial
(Stamler v. Willis, 287 F. Supp. 734 [1968] legislation becomes more imperative.
The Court cannot probe into the motives of the members of the Congress. Our second area of concern is congressional encroachment on matters reserved by
Barsky v. United States, 167 F. 2d 241 [1948] the Constitution for the Executive or the Judiciary.
The measure of the power of inquiry is the potentiality that constitutional legislation The majority opinion cites the decision in Angara v. Electoral Commission, 63 Phil.
might ensue from information derived from such inquiry. 139 (1936) explaining our power to determined conflicting claims of authority. It is
The possibility that invalid as well as valid legislation might ensue from an inquiry indeed the function on this Court to allocate constitutional boundaries but in the
does not limit the power of inquiry, since invalid legislation might ensue from any exercise of this "umpire" function we have to take care that we do not keep any of
inquiry. the three great departments of government from performing functions peculiar to
United States v. Shelton, 148 F. Supp. 926 [1957] each department or specifically vested to it sby the Constitution. When a power is
The contention of the defendant that the hearing at which he testified and from vested, ti carries with is everything legitimately neede to exercise it.
which the indictment arose was not in furtherance og a legislative purpose proceeds It may be argued that the investigation into the Romualdez Lopa transactions is
on the assumption that a failure to have specific legislation in contemplation, or a more appropriate for the Department of Justice and the judiciary. This argument
failure to show that legislation was in fact enacted, estabished an absence of misses the point of legislative inquiry.
legislative purpose. This argument is patently unsound. The investigative power of The prosecution of offenders by the Department of Justice or the Ombudsman and
Congress is not subject to the limitation that hearings must result in legislation or their trial before courts of justice is intended to punish persons who violate the law.
recommendations for legislation. Legislative investigations go further. The aim is to arrive at policy determinations
United States v. Deutch (147 F. Supp. 89 (1956) which may or may not be enacted into legislation. Referral to prosecutors or courts
Under the Constitution of the U.S., the Federal Government is a government of of justice is an added bonus. For sure, the Senate Blue Ribbon Committee knows it
limited powers. The Congress, being the legislative branch of the Federal cannot sentence any offender, no matter how overwhelming the proof that it may
Government, is also clothed with limited legislative powers. In orders, however, to gatherm to a jail term. But certainly, the Committee can recommend to Congress
carry its legislative powers into effect successfully, it has always been held that how the situation which enabled get-rich-quick schemes to flourish may be
Congress has the power to secure information concerning matters in respect to remedied. The fact that the subject of the investigation may currently be undergoing
which it has the authority to legislate. In fact, it would seem that Congress must trial does not restrict the power of Congress to investigate for its own purposes. The
secure information in order to legislate intelligently. Beyond that, the Congress has legislative purpose is distinctly different from the judicial purpose.
the right secure information in order to determine whether or not to legislate on a In Sinclair v. United States, 279 U.S. 263, 73 L ed. 692 (1928), leases of naval
particular subject matter on which it is within its constitutional powers to act. reservations to oil companies were investigated by the United States Senate. On a
(Emphasis Supplied) finding that certain leases were fraudulent, court action was recommended. In other
The even broader scope of legislative investigation in the Philippine context is words, court action on one hand and legislation on the other, are not mutually
explained by a member of the Constitutional Commission. exclusive. They may complement each other.
The requirement that the investigation be "in aid of legislation" is an essential ... It may be conceded that Congress is without authority to compel disclosyres for
element for establishing the jurisdiction of the legislative body. It is, however, a the purpose of aiding the prosecution of pending suits; but the authority of that
requirement which is not difficult to satisfy becuase, unlike in the United States, body, directly or through it Committees, to require pertinent disclosures in aid of its
where legislative power is shared by the United State Congress and the states own consitutional power is not abridged because the information sought to be
legislatures, the totality of legislative power is possessed by the Congress nad its elicited may also be of use in such suits... It is plain that investigation of the matters
legislative field is well-nigh unlimited. "It would be difficult to define any limits by involved in suits brought or to be commenced under the Senate resolution directing
the institution of suits for the cancellation of the leases might directly aid in respect N.E., 615, quoted with approval by the U.S. Supreme Court in McGrain vs.
of legislative action... (Sinclair v. United States, Id.at page 698). Daugherty, 273 U.S. 135). As far as I know, that is still the rule today.
In United States v. Orman, 207 F. 2d Ed. 148 (1953), the court declared that it was More importantly, the presumption is supported by the established facts. The inquiry
pertinent for a legislative committee to seek facts indicating that a witness was is sustainable as an implied of power the legislature and even as expressly limited
linked to unlawful intestate gambling. by the Constitution.
The power of a congressional committee to investigate matters cannot be The inquiry deals with alleged manipulations of public funds and illicit acquisitions of
challenged on the ground that the Committee went beyond the scope of any properties now being claimed by the PCGG for the Republic of the Philippines. The
contemplated legislative and assumed the functions of a grand jury. Whre the genral purpose of the Committee is to ascertain if and how such anomalies have been
subject of investigation is one concerning which Congress can legislate, and the committed. It is settled that the legislature has a right to investigate the disposition
information sought might aid the congressional consideration, in such a situation a of the public funds it has appropriated; indeed, "an inquiry into the expenditure of all
legitimate legislative purpose must be presumed... public money is na indispensable duty of the legislature." Moreover, an investigation
I submit that the filing of indictments or informations or the trial of certain persons of a possible violation of a law may be useful in the drafting of amendatory
cannot, by themselves, half the intitiation or stop the progress of legislative legislation to correct or strengthen that law.
investigations. The ponencia quotes lengthily from Senator Enrile's speech and concludes that it
The other ground which I consider the more important one is where the legislative "contained no suggestions of contemplated legislation; he merely called upon the
investigation violates the liberties of the witnesses. Senate to look into a possible violation of section 5 of R.A. No. 3019." However,
The Constitution expressly provides that "the rights of persons appearing in or according to McGrain v. Daugherty, supra:
affected by such inquiries shall be respected. Primarily, the purpose for which legislative inquiry and investigation is pursued is to
It should be emphasized that the constitutional restriction does not call for the serve as an aid in legislation. Through it, the legislature is able to obtain facts or
banning or prohibition of investigations where a violation of a basis rights is claimed. data in aid fo proposed legislation. However, it is not necessary that the resolution
It only requires that in the course of the proceedings, the right of persons should ordering an investigation should in terms expressly state that the object of the
be respected. inquiry is to obtain data in aid of proposed legislation. It is enough that such purpose
What the majority opinion mandates is a blanket prohibition against a witness appears from a consideration of the entire proceedings or one in which legislation
testifying at all, simply because he is already facing charges before the could be had and would be materially aided by the information which the
Sandiganbayan. To my mind, the Consitution allows him to interpose objections investigation was calculated to elicit. An express avowal of the object would be
whenever an incriminating question is posed or when he is compelled to reveal his better, but such is not indispensable. (Emphasis supplied).
ocurt defenses, but not ot refuse to take the witness stand completely. The petitioner's contention that the questioned investigation would compel them to
Arnault v. Nazareno, supra, illustrates the reticence, with which the court views reveal their defense in the cases now pending against them in the Sandigangbayan
petitions to curtail legislative investigations even where an invocation of individual is untenable. They know or should know that they cannot be compelled to answer
liberties is made. incriminating questions. The case of Chavez v. Court of Appeals, 24 SCRA 663,
In Arnault, the entire country already knew the name of the presidential realtive where we held that an accused may refuse at the outset to take the stand on the
whom the Sentate was trying to link to the Tambobong-Buenavista estate anomalies. ground that the questions to be put by the prosecutor will tend to incriminate him is,
Still, the Court did not interfere when Arnault refused to answer specific questions of course, not applicable to them. They are not facing criminal charges before the
directed at him and he was punished for hir refusal. The Court did not restrain the Blue Ribbon Committee. Like any ordinary witness, they can invoke the right against
Senate when Arnault was sent o the national penitentiary for an indefinite visit until self-incrimination only when and as the incriminating question is propounded.
the name which the Senate wanted him to utter was extracted. Only when the While it is true that the Court is now allowed more leeway in reviewing the
imprisonment became ureasonably prolonged and the situation in Congress had traditionally political acts of the legislative and executive departments, the power
changed was he released. must be exercised with the utmost circumspection lest we unduly trench on their
As pointed out by the respondents, not one question has been asked requiring an prerogatives and disarrange the constitutional separation of powers. That power is
answer that would incriminate the petitioners. The allegation that their basic rights available to us only if there is a clear showing of a grave abuse of discretion, which I
are vilolated is not only without basis but is also premature. do not see in the case at bar.
I agree with the respondents that the slae of 39 Romualdez corporations to Mr. Lopa Guided by the presumption and the facts, I vote to DISMISS the petition.
is not a purely private transaction into which the Senate may not inquire. if this were Narvasa, J., dissents.
so, much of the work of the Presidential Commission on Good Government (PCGG)
as it seeks to recover illegally acquired wealth would be negated. Much of what G.R. No. 89914 November 20, 1991 [Section 21, Article 6: Aids in Legislation: On
PCGG is trying to recover is the product of arrangements which are not only private Legislative Investigation]
but also secret and hidden.
I therefore, vote to DISMISS the petition.
Narvasa, J., dissents.
CRUZ, J., dissenting:
I regret I am unable to give my concurrence, I do not agree that the investigation
being conducted by the Blue Ribbon Committee is not in aid of legislation. FACTS:
In Arnault v. Nazareno, 87 Phil. 29, this Court observed that "we are bound to PCGG filed with the Sandiganbayan against Benjamin Romualdez, et al for engaging
presume that the action of the legislative body was with a legitimate object if it is in devices, schemes and stratagems to unjustly enrich themselves at the expense of
capable of being so construed, and we have no right ot assume that the contrary plaintiff and the Filipino people.
was intended." (People ex rel. Mc Donald vs. Keeler, 99 N.Y. 463; 52 Am. Rep., 49; 2 The Senate Minority Floor Leader Enrile delivered a speech before the Senate on the
alleged take-over personal privilege before the Senate on the alleged "takeover of
SOLOIL Inc," the FlagShip of the First Manila Management of Companies or FMMC by
Ricardo Lopa and called upon the Senate to look into the possible violation of the The power to conduct formal inquiries or investigations is specifically provided for in
law in the case with regard to RA 3019 (Anti Graft and Corrupt Practices Act). Sec. 1 of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation.
The Senate Blue Ribbon Committee (Committee on Accountability of Public Officers Such inquiries may refer to the implementation or re-examination of any law or in
[SBRC]) started its investigation on the matter. Petitioners and Ricardo Lopa were connection with any proposed legislation or the formulation of future legislation.
subpoenaed by the SBRC to appear before it and testify on what they know They may also extend to any and all matters vested by the Constitution in Congress
regarding the sale of 36 corporations belonging to Benjamin Romualdez. Lopa and and/or in the Senate alone.
Bengzon refused to testify, invoking their rights to due process, and that their
testimony may unduly prejudice the defendants and petitioners in case before the
Sandiganbayan. It appears, therefore, that the contemplated inquiry by respondent Committee is not
really "in aid of legislation" because it is not related to a purpose within the
jurisdiction of Congress, since the aim of the investigation is to find out whether or
SBRC rejected the petitioner's plea to be excused from testifying and the SBRC not the relatives of the President or Mr. Ricardo Lopa had violated Section 5 RA No.
continued its investigation of the matter. 3019, the "Anti-Graft and Corrupt Practices Act", a matter that appears more within
the province of the courts rather than of the legislature.

The petitioners filed for prohibition with a prayer for TRO and/or injunctive relief,
claiming that the SBRC in requiring their attendance and testimony, acted in excess 3. No. It cannot be said that the contemplated inquiry on the subject of the privilege
of its jurisdiction and legislative purpose. speech of Senator Juan Ponce Enrile, i.e., the alleged sale of the 36 (or 39)
The Supreme Court intervened upon a motion for reconsideration filed by one of the corporations belonging to Benjamin "Kokoy" Romualdez to the Lopa Group is to be
defendants of the civil case. conducted pursuant to Senate Resolution No. 212 because, firstly, Senator Enrile did
not indict the PCGG, and, secondly, neither Mr. Ricardo Lopa nor the herein
petitioners are connected with the government but are private citizens.

ISSUES: 4. Yes. The Constitution expressly provides that "the rights of persons appearing in
1. Whether or not the court has jurisdiction over the case. or affected by such inquiries shall be respected.
2. Whether or not the SBRC's inquiry has valid legislative purpose. It should be emphasized that the constitutional restriction does not call for the
3. whether or not the civil case of Sandiganbayan is beyond the power of the SBRC banning or prohibition of investigations where a violation of a basis rights is claimed.
to inquire into. It only requires that in the course of the proceedings, the right of persons should be
4. Whether or not the inquiry violates the petitioners' right to due process. respected.
What the majority opinion mandates is a blanket prohibition against a witness
testifying at all, simply because he is already facing charges before the
Sandiganbayan. To my mind, the Constitution allows him to interpose objections
RULING: whenever an incriminating question is posed or when he is compelled to reveal his
court defenses, but not to refuse to take the witness stand completely.

1. Yes. In Angara vs Electoral Commission, the Constitution provided for an elaborate Republic of the Philippines
system of checks and balances to secure coordination in the workings of the various SUPREME COURT
departments of the government. The Court has provided that the allocation of Manila
constitutional boundaries is a task which the judiciary must perform under the EN BANC
Constitution. Moreover, as held in a recent case, "(t)he political question doctrine G.R. No. 169777* April 20, 2006
neither interposes an obstacle to judicial determination of the rival claims. The SENATE OF THE PHILIPPINES, represented by FRANKLIN M. DRILON, in his
jurisdiction to delimit constitutional boundaries has been given to this Court. It capacity as Senate President, JUAN M. FLAVIER, in his capacity as Senate
cannot abdicate that obligation mandated by the 1987 Constitution, although said President Pro Tempore, FRANCIS N. PANGILINAN, in his capacity as
provision by no means does away with the applicability of the principle in Majority Leader, AQUILINO Q. PIMENTEL, JR., in his capacity as Minority
appropriate cases." Leader, SENATORS RODOLFO G. BIAZON, "COMPANERA" PIA S. CAYETANO,
The Court is thus of the considered view that it has jurisdiction over the present JINGGOY EJERCITO ESTRADA, LUISA "LOI" EJERCITO ESTRADA, JUAN PONCE
controversy for the purpose of determining the scope and extent of the power of the ENRILE, RICHARD J. GORDON, PANFILO M. LACSON, ALFREDO S.LIM, M. A.
Senate Blue Ribbon Committee to conduct inquiries into private affairs in purported MADRIGAL, SERGIO OSMENA III, RALPH G. RECTO, and MAR
aid of legislation. ROXAS, Petitioners,
vs.
EDUARDO R. ERMITA, in his capacity as Executive Secretary and alter-ego
of President Gloria Macapagal-Arroyo, and anyone acting in his stead and
in behalf of the President of the Philippines,Respondents.
x-------------------------x
2. No. G.R. No. 169659 April 20, 2006
BAYAN MUNA represented by DR. REYNALDO LESACA, JR., Rep. SATUR people, must prevail over any issuance of the government that contravenes its
OCAMPO, Rep. CRISPIN BELTRAN, Rep. RAFAEL MARIANO, Rep. LIZA MAZA, mandates.
Rep. TEODORO CASINO, Rep. JOEL VIRADOR, COURAGE represented by In the exercise of its legislative power, the Senate of the Philippines, through its
FERDINAND GAITE, and COUNSELS FOR THE DEFENSE OF LIBERTIES various Senate Committees, conducts inquiries or investigations in aid of legislation
(CODAL) represented by ATTY. REMEDIOS BALBIN, Petitioners, which call for, inter alia, the attendance of officials and employees of the executive
vs. department, bureaus, and offices including those employed in Government Owned
EDUARDO ERMITA, in his capacity as Executive Secretary and alter-ego of and Controlled Corporations, the Armed Forces of the Philippines (AFP), and the
President Gloria Macapagal-Arroyo, Respondent. Philippine National Police (PNP).
x-------------------------x On September 21 to 23, 2005, the Committee of the Senate as a whole issued
G.R. No. 169660 April 20, 2006 invitations to various officials of the Executive Department for them to appear on
FRANCISCO I. CHAVEZ, Petitioner, September 29, 2005 as resource speakers in a public hearing on the railway project
vs. of the North Luzon Railways Corporation with the China National Machinery and
EDUARDO R. ERMITA, in his capacity as Executive Secretary, AVELINO J. Equipment Group (hereinafter North Rail Project). The public hearing was sparked by
CRUZ, JR., in his capacity as Secretary of Defense, and GENEROSO S. a privilege speech of Senator Juan Ponce Enrile urging the Senate to investigate the
SENGA, in his capacity as AFP Chief of Staff, Respondents. alleged overpricing and other unlawful provisions of the contract covering the North
x-------------------------x Rail Project.
G.R. No. 169667 April 20, 2006 The Senate Committee on National Defense and Security likewise issued
ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner, invitations2 dated September 22, 2005 to the following officials of the AFP: the
vs. Commanding General of the Philippine Army, Lt. Gen. Hermogenes C. Esperon;
HON. EDUARDO R. ERMITA, in his capacity as Executive Inspector General of the AFP Vice Admiral Mateo M. Mayuga; Deputy Chief of Staff
Secretary, Respondent. for Intelligence of the AFP Rear Admiral Tirso R. Danga; Chief of the Intelligence
x-------------------------x Service of the AFP Brig. Gen. Marlu Q. Quevedo; Assistant Superintendent of the
G.R. No. 169834 April 20, 2006 Philippine Military Academy (PMA) Brig. Gen. Francisco V. Gudani; and Assistant
PDP- LABAN, Petitioner, Commandant, Corps of Cadets of the PMA, Col. Alexander F. Balutan, for them to
vs. attend as resource persons in a public hearing scheduled on September 28, 2005 on
EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent. the following: (1) Privilege Speech of Senator Aquilino Q. Pimentel Jr., delivered on
x-------------------------x June 6, 2005 entitled "Bunye has Provided Smoking Gun or has Opened a Can of
G.R. No. 171246 April 20, 2006 Worms that Show Massive Electoral Fraud in the Presidential Election of May 2005";
JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE (2) Privilege Speech of Senator Jinggoy E. Estrada delivered on July 26, 2005 entitled
AMOR AMORANDO, ALICIA A. RISOS-VIDAL, FILEMON C. ABELITA III, "The Philippines as the Wire-Tapping Capital of the World"; (3) Privilege Speech of
MANUEL P. LEGASPI, J. B. JOVY C. BERNABE, BERNARD L. DAGCUTA, Senator Rodolfo Biazon delivered on August 1, 2005 entitled "Clear and Present
ROGELIO V. GARCIA, and the INTEGRATED BAR FOR THE Danger"; (4) Senate Resolution No. 285 filed by Senator Maria Ana Consuelo
PHILIPPINES,Petitioners, Madrigal Resolution Directing the Committee on National Defense and Security to
vs. Conduct an Inquiry, in Aid of Legislation, and in the National Interest, on the Role of
HON. EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent. the Military in the So-called "Gloriagate Scandal"; and (5) Senate Resolution No. 295
DECISION filed by Senator Biazon Resolution Directing the Committee on National Defense
CARPIO MORALES, J.: and Security to Conduct an Inquiry, in Aid of Legislation, on the Wire-Tapping of the
A transparent government is one of the hallmarks of a truly republican state. Even in President of the Philippines.
the early history of republican thought, however, it has been recognized that the Also invited to the above-said hearing scheduled on September 28 2005 was the AFP
head of government may keep certain information confidential in pursuit of the Chief of Staff, General Generoso S. Senga who, by letter 3 dated September 27, 2005,
public interest. Explaining the reason for vesting executive power in only one requested for its postponement "due to a pressing operational situation that
magistrate, a distinguished delegate to the U.S. Constitutional Convention said: demands [his utmost personal attention" while "some of the invited AFP officers are
"Decision, activity, secrecy, and dispatch will generally characterize the proceedings currently attending to other urgent operational matters."
of one man, in a much more eminent degree than the proceedings of any greater On September 28, 2005, Senate President Franklin M. Drilon received from Executive
number; and in proportion as the number is increased, these qualities will be Secretary Eduardo R. Ermita a letter4 dated September 27, 2005 "respectfully
diminished."1 request[ing] for the postponement of the hearing [regarding the NorthRail project] to
History has been witness, however, to the fact that the power to withhold which various officials of the Executive Department have been invited" in order to
information lends itself to abuse, hence, the necessity to guard it zealously. "afford said officials ample time and opportunity to study and prepare for the various
The present consolidated petitions for certiorari and prohibition proffer that the issues so that they may better enlighten the Senate Committee on its investigation."
President has abused such power by issuing Executive Order No. 464 (E.O. 464) last Senate President Drilon, however, wrote5 Executive Secretary Ermita that the
September 28, 2005. They thus pray for its declaration as null and void for being Senators "are unable to accede to [his request]" as it "was sent belatedly" and "[a]ll
unconstitutional. preparations and arrangements as well as notices to all resource persons were
In resolving the controversy, this Court shall proceed with the recognition that the completed [the previous] week."
issuance under review has come from a co-equal branch of government, which thus Senate President Drilon likewise received on September 28, 2005 a letter 6 from the
entitles it to a strong presumption of constitutionality. Once the challenged order is President of the North Luzon Railways Corporation Jose L. Cortes, Jr. requesting that
found to be indeed violative of the Constitution, it is duty-bound to declare it so. For the hearing on the NorthRail project be postponed or cancelled until a copy of the
the Constitution, being the highest expression of the sovereign will of the Filipino
report of the UP Law Center on the contract agreements relative to the project had respect for the rights of public officials appearing in inquiries in aid of legislation.
been secured. (Emphasis and underscoring supplied)
On September 28, 2005, the President issued E.O. 464, "Ensuring Observance of the Also on September 28, 2005, Senate President Drilon received from Executive
Principle of Separation of Powers, Adherence to the Rule on Executive Privilege and Secretary Ermita a copy of E.O. 464, and another letter 8 informing him "that officials
Respect for the Rights of Public Officials Appearing in Legislative Inquiries in Aid of of the Executive Department invited to appear at the meeting [regarding the
Legislation Under the Constitution, and For Other Purposes," 7 which, pursuant to NorthRail project] will not be able to attend the same without the consent of the
Section 6 thereof, took effect immediately. The salient provisions of the Order are as President, pursuant to [E.O. 464]" and that "said officials have not secured the
follows: required consent from the President." On even date which was also the scheduled
SECTION 1. Appearance by Heads of Departments Before Congress. In accordance date of the hearing on the alleged wiretapping, Gen. Senga sent a letter 9 to Senator
with Article VI, Section 22 of the Constitution and to implement the Constitutional Biazon, Chairperson of the Committee on National Defense and Security, informing
provisions on the separation of powers between co-equal branches of the him "that per instruction of [President Arroyo], thru the Secretary of National
government, all heads of departments of the Executive Branch of the government Defense, no officer of the [AFP] is authorized to appear before any Senate or
shall secure the consent of the President prior to appearing before either House of Congressional hearings without seeking a written approval from the President" and
Congress. "that no approval has been granted by the President to any AFP officer to appear
When the security of the State or the public interest so requires and the President so before the public hearing of the Senate Committee on National Defense and Security
states in writing, the appearance shall only be conducted in executive session. scheduled [on] 28 September 2005."
SECTION. 2. Nature, Scope and Coverage of Executive Privilege. Despite the communications received from Executive Secretary Ermita and Gen.
(a) Nature and Scope. - The rule of confidentiality based on executive privilege is Senga, the investigation scheduled by the Committee on National Defense and
fundamental to the operation of government and rooted in the separation of powers Security pushed through, with only Col. Balutan and Brig. Gen. Gudani among all the
under the Constitution (Almonte vs. Vasquez, G.R. No. 95367, 23 May 1995). Further, AFP officials invited attending.
Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public For defying President Arroyos order barring military personnel from testifying before
Officials and Employees provides that Public Officials and Employees shall not use or legislative inquiries without her approval, Brig. Gen. Gudani and Col. Balutan were
divulge confidential or classified information officially known to them by reason of relieved from their military posts and were made to face court martial proceedings.
their office and not made available to the public to prejudice the public interest. As to the NorthRail project hearing scheduled on September 29, 2005, Executive
Executive privilege covers all confidential or classified information between the Secretary Ermita, citing E.O. 464, sent letter of regrets, in response to the invitations
President and the public officers covered by this executive order, including: sent to the following government officials: Light Railway Transit Authority
Conversations and correspondence between the President and the public official Administrator Melquiades Robles, Metro Rail Transit Authority Administrator Roberto
covered by this executive order (Almonte vs. Vasquez G.R. No. 95367, 23 May 1995; Lastimoso, Department of Justice (DOJ) Chief State Counsel Ricardo V. Perez, then
Chavez v. Public Estates Authority, G.R. No. 133250, 9 July 2002); Presidential Legal Counsel Merceditas Gutierrez, Department of Transportation and
Military, diplomatic and other national security matters which in the interest of Communication (DOTC) Undersecretary Guiling Mamonding, DOTC Secretary
national security should not be divulged (Almonte vs. Vasquez, G.R. No. 95367, 23 Leandro Mendoza, Philippine National Railways General Manager Jose Serase II,
May 1995; Chavez v. Presidential Commission on Good Government, G.R. No. Monetary Board Member Juanita Amatong, Bases Conversion Development Authority
130716, 9 December 1998). Chairperson Gen. Narciso Abaya and Secretary Romulo L. Neri. 10 NorthRail President
Information between inter-government agencies prior to the conclusion of treaties Cortes sent personal regrets likewise citing E.O. 464.11
and executive agreements (Chavez v. Presidential Commission on Good On October 3, 2005, three petitions, docketed as G.R. Nos. 169659, 169660, and
Government, G.R. No. 130716, 9 December 1998); 169667, for certiorari and prohibition, were filed before this Court challenging the
Discussion in close-door Cabinet meetings (Chavez v. Presidential Commission on constitutionality of E.O. 464.
Good Government, G.R. No. 130716, 9 December 1998); In G.R. No. 169659, petitioners party-list Bayan Muna, House of Representatives
Matters affecting national security and public order (Chavez v. Public Estates Members Satur Ocampo, Crispin Beltran, Rafael Mariano, Liza Maza, Joel Virador and
Authority, G.R. No. 133250, 9 July 2002). Teodoro Casino, Courage, an organization of government employees, and Counsels
(b) Who are covered. The following are covered by this executive order: for the Defense of Liberties (CODAL), a group of lawyers dedicated to the promotion
Senior officials of executive departments who in the judgment of the department of justice, democracy and peace, all claiming to have standing to file the suit
heads are covered by the executive privilege; because of the transcendental importance of the issues they posed, pray, in their
Generals and flag officers of the Armed Forces of the Philippines and such other petition that E.O. 464 be declared null and void for being unconstitutional; that
officers who in the judgment of the Chief of Staff are covered by the executive respondent Executive Secretary Ermita, in his capacity as Executive Secretary and
privilege; alter-ego of President Arroyo, be prohibited from imposing, and threatening to
Philippine National Police (PNP) officers with rank of chief superintendent or higher impose sanctions on officials who appear before Congress due to congressional
and such other officers who in the judgment of the Chief of the PNP are covered by summons. Additionally, petitioners claim that E.O. 464 infringes on their rights and
the executive privilege; impedes them from fulfilling their respective obligations. Thus, Bayan Muna alleges
Senior national security officials who in the judgment of the National Security that E.O. 464 infringes on its right as a political party entitled to participate in
Adviser are covered by the executive privilege; and governance; Satur Ocampo, et al. allege that E.O. 464 infringes on their rights and
Such other officers as may be determined by the President. duties as members of Congress to conduct investigation in aid of legislation and
SECTION 3. Appearance of Other Public Officials Before Congress. All public officials conduct oversight functions in the implementation of laws; Courage alleges that the
enumerated in Section 2 (b) hereof shall secure prior consent of the President prior tenure of its members in public office is predicated on, and threatened by, their
to appearing before either House of Congress to ensure the observance of the submission to the requirements of E.O. 464 should they be summoned by Congress;
principle of separation of powers, adherence to the rule on executive privilege and and CODAL alleges that its members have a sworn duty to uphold the rule of law,
and their rights to information and to transparent governance are threatened by the all invoking their constitutional right to be informed on matters of public interest,
imposition of E.O. 464. filed their petition for certiorari and prohibition, docketed as G.R. No. 171246, and
In G.R. No. 169660, petitioner Francisco I. Chavez, claiming that his constitutional pray that E.O. 464 be declared null and void.
rights as a citizen, taxpayer and law practitioner, are affected by the enforcement of All the petitions pray for the issuance of a Temporary Restraining Order enjoining
E.O. 464, prays in his petition that E.O. 464 be declared null and void for being respondents from implementing, enforcing, and observing E.O. 464.
unconstitutional. In the oral arguments on the petitions conducted on February 21, 2006, the
In G.R. No. 169667, petitioner Alternative Law Groups, Inc.12 (ALG), alleging that as a following substantive issues were ventilated: (1) whether respondents committed
coalition of 17 legal resource non-governmental organizations engaged in grave abuse of discretion in implementing E.O. 464 prior to its publication in the
developmental lawyering and work with the poor and marginalized sectors in Official Gazette or in a newspaper of general circulation; and (2) whether E.O. 464
different parts of the country, and as an organization of citizens of the Philippines violates the following provisions of the Constitution: Art. II, Sec. 28, Art. III, Sec. 4,
and a part of the general public, it has legal standing to institute the petition to Art. III, Sec. 7, Art. IV. Sec. 1, Art. VI, Sec. 21, Art. VI, Sec. 22, Art. XI, Sec. 1, and Art.
enforce its constitutional right to information on matters of public concern, a right XIII, Sec. 16. The procedural issue of whether there is an actual case or controversy
which was denied to the public by E.O. 464,13 prays, that said order be declared null that calls for judicial review was not taken up; instead, the parties were instructed to
and void for being unconstitutional and that respondent Executive Secretary Ermita discuss it in their respective memoranda.
be ordered to cease from implementing it. After the conclusion of the oral arguments, the parties were directed to submit their
On October 11, 2005, Petitioner Senate of the Philippines, alleging that it has a vital respective memoranda, paying particular attention to the following propositions: (1)
interest in the resolution of the issue of the validity of E.O. 464 for it stands to suffer that E.O. 464 is, on its face, unconstitutional; and (2) assuming that it is not, it is
imminent and material injury, as it has already sustained the same with its unconstitutional as applied in four instances, namely: (a) the so called Fertilizer
continued enforcement since it directly interferes with and impedes the valid scam; (b) the NorthRail investigation (c) the Wiretapping activity of the ISAFP; and
exercise of the Senates powers and functions and conceals information of great (d) the investigation on the Venable contract.22
public interest and concern, filed its petition for certiorari and prohibition, docketed Petitioners in G.R. No. 16966023 and G.R. No. 16977724 filed their memoranda on
as G.R. No. 169777 and prays that E.O. 464 be declared unconstitutional. March 7, 2006, while those in G.R. No. 16966725 and G.R. No. 16983426 filed theirs
On October 14, 2005, PDP-Laban, a registered political party with members duly the next day or on March 8, 2006. Petitioners in G.R. No. 171246 did not file any
elected into the Philippine Senate and House of Representatives, filed a similar memorandum.
petition for certiorari and prohibition, docketed as G.R. No. 169834, alleging that it is Petitioners Bayan Muna et al. in G.R. No. 169659, after their motion for extension to
affected by the challenged E.O. 464 because it hampers its legislative agenda to be file memorandum27 was granted, subsequently filed a manifestation28 dated March
implemented through its members in Congress, particularly in the conduct of 14, 2006 that it would no longer file its memorandum in the interest of having the
inquiries in aid of legislation and transcendental issues need to be resolved to avert issues resolved soonest, prompting this Court to issue a Resolution reprimanding
a constitutional crisis between the executive and legislative branches of the them.29
government. Petitioners submit that E.O. 464 violates the following constitutional provisions:
Meanwhile, by letter14 dated February 6, 2006, Senator Biazon reiterated his Art. VI, Sec. 2130
invitation to Gen. Senga for him and other military officers to attend the hearing on Art. VI, Sec. 2231
the alleged wiretapping scheduled on February 10, 2005. Gen. Senga replied, Art. VI, Sec. 132
however, by letter15 dated February 8, 2006, that "[p]ursuant to Executive Order No. Art. XI, Sec. 133
464, th[e] Headquarters requested for a clearance from the President to allow Art. III, Sec. 734
[them] to appear before the public hearing" and that "they will attend once [their] Art. III, Sec. 435
request is approved by the President." As none of those invited appeared, the Art. XIII, Sec. 16 36
hearing on February 10, 2006 was cancelled.16 Art. II, Sec. 2837
In another investigation conducted jointly by the Senate Committee on Agriculture Respondents Executive Secretary Ermita et al., on the other hand, pray in their
and Food and the Blue Ribbon Committee on the alleged mismanagement and use consolidated memorandum38 on March 13, 2006 for the dismissal of the petitions for
of the fertilizer fund under the Ginintuang Masaganang Ani program of the lack of merit.
Department of Agriculture (DA), several Cabinet officials were invited to the hearings The Court synthesizes the issues to be resolved as follows:
scheduled on October 5 and 26, November 24 and December 12, 2005 but most of 1. Whether E.O. 464 contravenes the power of inquiry vested in Congress;
them failed to attend, DA Undersecretary Belinda Gonzales, DA Assistant Secretary 2. Whether E.O. 464 violates the right of the people to information on matters of
Felix Jose Montes, Fertilizer and Pesticide Authority Executive Director Norlito R. public concern; and
Gicana,17 and those from the Department of Budget and Management 18 having 3. Whether respondents have committed grave abuse of discretion when they
invoked E.O. 464. implemented E.O. 464 prior to its publication in a newspaper of general circulation.
In the budget hearings set by the Senate on February 8 and 13, 2006, Press Essential requisites for judicial review
Secretary and Presidential Spokesperson Ignacio R. Bunye,19 DOJ Secretary Raul M. Before proceeding to resolve the issue of the constitutionality of E.O. 464,
Gonzalez20 and Department of Interior and Local Government Undersecretary Marius ascertainment of whether the requisites for a valid exercise of the Courts power of
P. Corpus21 communicated their inability to attend due to lack of appropriate judicial review are present is in order.
clearance from the President pursuant to E.O. 464. During the February 13, 2005 Like almost all powers conferred by the Constitution, the power of judicial review is
budget hearing, however, Secretary Bunye was allowed to attend by Executive subject to limitations, to wit: (1) there must be an actual case or controversy calling
Secretary Ermita. for the exercise of judicial power; (2) the person challenging the act must have
On February 13, 2006, Jose Anselmo I. Cadiz and the incumbent members of the standing to challenge the validity of the subject act or issuance; otherwise stated,
Board of Governors of the Integrated Bar of the Philippines, as taxpayers, and the he must have a personal and substantial interest in the case such that he has
Integrated Bar of the Philippines as the official organization of all Philippine lawyers, sustained, or will sustain, direct injury as a result of its enforcement; (3) the question
of constitutionality must be raised at the earliest opportunity; and (4) the issue of marginalized and underrepresented sectors, organizations and parties who lack well-
constitutionality must be the very lis mota of the case. 39 defined political constituencies to contribute to the formulation and enactment of
Except with respect to the requisites of standing and existence of an actual case or legislation that will benefit the nation.48
controversy where the disagreement between the parties lies, discussion of the rest As Bayan Muna and Representatives Ocampo et al. have the standing to file their
of the requisites shall be omitted. petitions, passing on the standing of their co-petitioners Courage and Codal is
Standing rendered unnecessary.49
Respondents, through the Solicitor General, assert that the allegations in G.R. Nos. In filing their respective petitions, Chavez, the ALG which claims to be an
169659, 169660 and 169667 make it clear that they, adverting to the non- organization of citizens, and the incumbent members of the IBP Board of Governors
appearance of several officials of the executive department in the investigations and the IBP in behalf of its lawyer members,50 invoke their constitutional right to
called by the different committees of the Senate, were brought to vindicate the information on matters of public concern, asserting that the right to information,
constitutional duty of the Senate or its different committees to conduct inquiry in aid curtailed and violated by E.O. 464, is essential to the effective exercise of other
of legislation or in the exercise of its oversight functions. They maintain that constitutional rights51 and to the maintenance of the balance of power among the
Representatives Ocampo et al. have not shown any specific prerogative, power, and three branches of the government through the principle of checks and balances. 52
privilege of the House of Representatives which had been effectively impaired by It is well-settled that when suing as a citizen, the interest of the petitioner in
E.O. 464, there being no mention of any investigation called by the House of assailing the constitutionality of laws, presidential decrees, orders, and other
Representatives or any of its committees which was aborted due to the regulations, must be direct and personal. In Franciso v. House of
implementation of E.O. 464. Representatives,53 this Court held that when the proceeding involves the assertion of
As for Bayan Munas alleged interest as a party-list representing the marginalized a public right, the mere fact that he is a citizen satisfies the requirement of personal
and underrepresented, and that of the other petitioner groups and individuals who interest.
profess to have standing as advocates and defenders of the Constitution, As for petitioner PDP-Laban, it asseverates that it is clothed with legal standing in
respondents contend that such interest falls short of that required to confer standing view of the transcendental issues raised in its petition which this Court needs to
on them as parties "injured-in-fact." 40 resolve in order to avert a constitutional crisis. For it to be accorded standing on the
Respecting petitioner Chavez, respondents contend that Chavez may not claim an ground of transcendental importance, however, it must establish (1) the character of
interest as a taxpayer for the implementation of E.O. 464 does not involve the the funds (that it is public) or other assets involved in the case, (2) the presence of a
exercise of taxing or spending power.41 clear case of disregard of a constitutional or statutory prohibition by the public
With regard to the petition filed by the Senate, respondents argue that in the respondent agency or instrumentality of the government, and (3) the lack of any
absence of a personal or direct injury by reason of the issuance of E.O. 464, the party with a more direct and specific interest in raising the questions being
Senate and its individual members are not the proper parties to assail the raised.54 The first and last determinants not being present as no public funds or
constitutionality of E.O. 464. assets are involved and petitioners in G.R. Nos. 169777 and 169659 have direct and
Invoking this Courts ruling in National Economic Protectionism Association v. specific interests in the resolution of the controversy, petitioner PDP-Laban is bereft
Ongpin42 and Valmonte v. Philippine Charity Sweepstakes Office, 43 respondents of standing to file its petition. Its allegation that E.O. 464 hampers its legislative
assert that to be considered a proper party, one must have a personal and agenda is vague and uncertain, and at best is only a "generalized interest" which it
substantial interest in the case, such that he has sustained or will sustain direct shares with the rest of the political parties. Concrete injury, whether actual or
injury due to the enforcement of E.O. 464.44 threatened, is that indispensable element of a dispute which serves in part to cast it
That the Senate of the Philippines has a fundamental right essential not only for in a form traditionally capable of judicial resolution. 55 In fine, PDP-Labans alleged
intelligent public decision-making in a democratic system, but more especially for interest as a political party does not suffice to clothe it with legal standing.
sound legislation45 is not disputed. E.O. 464, however, allegedly stifles the ability of Actual Case or Controversy
the members of Congress to access information that is crucial to law- Petitioners assert that an actual case exists, they citing the absence of the executive
making.46 Verily, the Senate, including its individual members, has a substantial and officials invited by the Senate to its hearings after the issuance of E.O. 464,
direct interest over the outcome of the controversy and is the proper party to assail particularly those on the NorthRail project and the wiretapping controversy.
the constitutionality of E.O. 464. Indeed, legislators have standing to maintain Respondents counter that there is no case or controversy, there being no showing
inviolate the prerogative, powers and privileges vested by the Constitution in their that President Arroyo has actually withheld her consent or prohibited the
office and are allowed to sue to question the validity of any official action which they appearance of the invited officials.56 These officials, they claim, merely
claim infringes their prerogatives as legislators. 47 communicated to the Senate that they have not yet secured the consent of the
In the same vein, party-list representatives Satur Ocampo (Bayan Muna), Teodoro President, not that the President prohibited their attendance.57 Specifically with
Casino (Bayan Muna), Joel Virador (Bayan Muna), Crispin Beltran (Anakpawis), Rafael regard to the AFP officers who did not attend the hearing on September 28, 2005,
Mariano (Anakpawis), and Liza Maza (Gabriela) are allowed to sue to question the respondents claim that the instruction not to attend without the Presidents consent
constitutionality of E.O. 464, the absence of any claim that an investigation called by was based on its role as Commander-in-Chief of the Armed Forces, not on E.O. 464.
the House of Representatives or any of its committees was aborted due to the Respondents thus conclude that the petitions merely rest on an unfounded
implementation of E.O. 464 notwithstanding, it being sufficient that a claim is made apprehension that the President will abuse its power of preventing the appearance
that E.O. 464 infringes on their constitutional rights and duties as members of of officials before Congress, and that such apprehension is not sufficient for
Congress to conduct investigation in aid of legislation and conduct oversight challenging the validity of E.O. 464.
functions in the implementation of laws. The Court finds respondents assertion that the President has not withheld her
The national political party, Bayan Muna, likewise meets the standing requirement consent or prohibited the appearance of the officials concerned immaterial in
as it obtained three seats in the House of Representatives in the 2004 elections and determining the existence of an actual case or controversy insofar as E.O. 464 is
is, therefore, entitled to participate in the legislative process consonant with the concerned. For E.O. 464 does not require either a deliberate withholding of consent
declared policy underlying the party list system of affording citizens belonging to
or an express prohibition issuing from the President in order to bar officials from Congress and officers whose positions it is within the power of Congress to regulate
appearing before Congress. or even abolish."
As the implementation of the challenged order has already resulted in the absence Since Congress has authority to inquire into the operations of the executive branch,
of officials invited to the hearings of petitioner Senate of the Philippines, it would it would be incongruous to hold that the power of inquiry does not extend to
make no sense to wait for any further event before considering the present case ripe executive officials who are the most familiar with and informed on executive
for adjudication. Indeed, it would be sheer abandonment of duty if this Court would operations.
now refrain from passing on the constitutionality of E.O. 464. As discussed in Arnault, the power of inquiry, "with process to enforce it," is
Constitutionality of E.O. 464 grounded on the necessity of information in the legislative process. If the
E.O. 464, to the extent that it bars the appearance of executive officials before information possessed by executive officials on the operation of their offices is
Congress, deprives Congress of the information in the possession of these officials. necessary for wise legislation on that subject, by parity of reasoning, Congress has
To resolve the question of whether such withholding of information violates the the right to that information and the power to compel the disclosure thereof.
Constitution, consideration of the general power of Congress to obtain information, As evidenced by the American experience during the so-called "McCarthy era,"
otherwise known as the power of inquiry, is in order. however, the right of Congress to conduct inquiries in aid of legislation is, in theory,
The power of inquiry no less susceptible to abuse than executive or judicial power. It may thus be
The Congress power of inquiry is expressly recognized in Section 21 of Article VI of subjected to judicial review pursuant to the Courts certiorari powers under Section
the Constitution which reads: 1, Article VIII of the Constitution.
SECTION 21. The Senate or the House of Representatives or any of its respective For one, as noted in Bengzon v. Senate Blue Ribbon Committee,61 the inquiry itself
committees may conduct inquiries in aid of legislation in accordance with its duly might not properly be in aid of legislation, and thus beyond the constitutional power
published rules of procedure. The rights of persons appearing in or affected by such of Congress. Such inquiry could not usurp judicial functions. Parenthetically, one
inquiries shall be respected. (Underscoring supplied) possible way for Congress to avoid such a result as occurred in Bengzon is to
This provision is worded exactly as Section 8 of Article VIII of the 1973 Constitution indicate in its invitations to the public officials concerned, or to any person for that
except that, in the latter, it vests the power of inquiry in the unicameral legislature matter, the possible needed statute which prompted the need for the inquiry. Given
established therein the Batasang Pambansa and its committees. such statement in its invitations, along with the usual indication of the subject of
The 1935 Constitution did not contain a similar provision. Nonetheless, in Arnault v. inquiry and the questions relative to and in furtherance thereof, there would be less
Nazareno,58 a case decided in 1950 under that Constitution, the Court already room for speculation on the part of the person invited on whether the inquiry is in
recognized that the power of inquiry is inherent in the power to legislate. aid of legislation.
Arnault involved a Senate investigation of the reportedly anomalous purchase of the Section 21, Article VI likewise establishes crucial safeguards that proscribe the
Buenavista and Tambobong Estates by the Rural Progress Administration. Arnault, legislative power of inquiry. The provision requires that the inquiry be done in
who was considered a leading witness in the controversy, was called to testify accordance with the Senate or Houses duly published rules of procedure,
thereon by the Senate. On account of his refusal to answer the questions of the necessarily implying the constitutional infirmity of an inquiry conducted without duly
senators on an important point, he was, by resolution of the Senate, detained for published rules of procedure. Section 21 also mandates that the rights of persons
contempt. Upholding the Senates power to punish Arnault for contempt, this Court appearing in or affected by such inquiries be respected, an imposition that obligates
held: Congress to adhere to the guarantees in the Bill of Rights.
Although there is no provision in the Constitution expressly investing either House of These abuses are, of course, remediable before the courts, upon the proper suit filed
Congress with power to make investigations and exact testimony to the end that it by the persons affected, even if they belong to the executive branch. Nonetheless,
may exercise its legislative functions advisedly and effectively, such power is so far there may be exceptional circumstances, none appearing to obtain at present,
incidental to the legislative function as to be implied. In other words, the power of wherein a clear pattern of abuse of the legislative power of inquiry might be
inquiry with process to enforce it is an essential and appropriate auxiliary to the established, resulting in palpable violations of the rights guaranteed to members of
legislative function. A legislative body cannot legislate wisely or effectively in the the executive department under the Bill of Rights. In such instances, depending on
absence of information respecting the conditions which the legislation is intended to the particulars of each case, attempts by the Executive Branch to forestall these
affect or change; and where the legislative body does not itself possess the requisite abuses may be accorded judicial sanction.
information which is not infrequently true recourse must be had to others who do Even where the inquiry is in aid of legislation, there are still recognized exemptions
possess it. Experience has shown that mere requests for such information are often to the power of inquiry, which exemptions fall under the rubric of "executive
unavailing, and also that information which is volunteered is not always accurate or privilege." Since this term figures prominently in the challenged order, it being
complete; so some means of compulsion is essential to obtain what is needed. 59 . . . mentioned in its provisions, its preambular clauses, 62 and in its very title, a
(Emphasis and underscoring supplied) discussion of executive privilege is crucial for determining the constitutionality of
That this power of inquiry is broad enough to cover officials of the executive branch E.O. 464.
may be deduced from the same case. The power of inquiry, the Court therein ruled, Executive privilege
is co-extensive with the power to legislate. 60 The matters which may be a proper The phrase "executive privilege" is not new in this jurisdiction. It has been used even
subject of legislation and those which may be a proper subject of investigation are prior to the promulgation of the 1986 Constitution.63 Being of American origin, it is
one. It follows that the operation of government, being a legitimate subject for best understood in light of how it has been defined and used in the legal literature of
legislation, is a proper subject for investigation. the United States.
Thus, the Court found that the Senate investigation of the government transaction Schwartz defines executive privilege as "the power of the Government to withhold
involved in Arnault was a proper exercise of the power of inquiry. Besides being information from the public, the courts, and the Congress." 64 Similarly, Rozell defines
related to the expenditure of public funds of which Congress is the guardian, the it as "the right of the President and high-level executive branch officers to withhold
transaction, the Court held, "also involved government agencies created by information from Congress, the courts, and ultimately the public." 65
Executive privilege is, nonetheless, not a clear or unitary concept. 66 It has beginning with President Washingtons refusal to turn over treaty negotiation records
encompassed claims of varying kinds.67 Tribe, in fact, comments that while it is to the House of Representatives, the U.S. Supreme Court has never adjudicated the
customary to employ the phrase "executive privilege," it may be more accurate to issue.74 However, the U.S. Court of Appeals for the District of Columbia Circuit, in a
speak of executive privileges "since presidential refusals to furnish information may case decided earlier in the same year as Nixon, recognized the Presidents privilege
be actuated by any of at least three distinct kinds of considerations, and may be over his conversations against a congressional subpoena.75 Anticipating the
asserted, with differing degrees of success, in the context of either judicial or balancing approach adopted by the U.S. Supreme Court in Nixon, the Court of
legislative investigations." Appeals weighed the public interest protected by the claim of privilege against the
One variety of the privilege, Tribe explains, is the state secrets privilege invoked by interest that would be served by disclosure to the Committee. Ruling that the
U.S. Presidents, beginning with Washington, on the ground that the information is of balance favored the President, the Court declined to enforce the subpoena. 76
such nature that its disclosure would subvert crucial military or diplomatic In this jurisdiction, the doctrine of executive privilege was recognized by this Court in
objectives. Another variety is the informers privilege, or the privilege of the Almonte v. Vasquez.77Almonte used the term in reference to the same privilege
Government not to disclose the identity of persons who furnish information of subject of Nixon. It quoted the following portion of the Nixon decision which explains
violations of law to officers charged with the enforcement of that law. Finally, a the basis for the privilege:
generic privilege for internal deliberations has been said to attach to "The expectation of a President to the confidentiality of his conversations and
intragovernmental documents reflecting advisory opinions, recommendations and correspondences, like the claim of confidentiality of judicial deliberations, for
deliberations comprising part of a process by which governmental decisions and example, has all the values to which we accord deference for the privacy of all
policies are formulated. 68 citizens and, added to those values, is the necessity for protection of the public
Tribes comment is supported by the ruling in In re Sealed Case, thus: interest in candid, objective, and even blunt or harsh opinions in Presidential
Since the beginnings of our nation, executive officials have claimed a variety of decision-making. A President and those who assist him must be free to explore
privileges to resist disclosure of information the confidentiality of which they felt was alternatives in the process of shaping policies and making decisions and to do so in
crucial to fulfillment of the unique role and responsibilities of the executive branch of a way many would be unwilling to express except privately. These are the
our government. Courts ruled early that the executive had a right to withhold considerations justifying a presumptive privilege for Presidential communications.
documents that might reveal military or state secrets. The courts have also granted The privilege is fundamental to the operation of government and inextricably rooted
the executive a right to withhold the identity of government informers in some in the separation of powers under the Constitution x x x " (Emphasis and
circumstances and a qualified right to withhold information related to pending underscoring supplied)
investigations. x x x"69 (Emphasis and underscoring supplied) Almonte involved a subpoena duces tecum issued by the Ombudsman against the
The entry in Blacks Law Dictionary on "executive privilege" is similarly instructive therein petitioners. It did not involve, as expressly stated in the decision, the right of
regarding the scope of the doctrine. the people to information.78 Nonetheless, the Court recognized that there are certain
This privilege, based on the constitutional doctrine of separation of powers, exempts types of information which the government may withhold from the public, thus
the executive from disclosure requirements applicable to the ordinary citizen or acknowledging, in substance if not in name, that executive privilege may be claimed
organization where such exemption is necessary to the discharge of highly against citizens demands for information.
important executive responsibilities involved in maintaining governmental In Chavez v. PCGG,79 the Court held that this jurisdiction recognizes the common law
operations, and extends not only to military and diplomatic secrets but also to holding that there is a "governmental privilege against public disclosure with respect
documents integral to an appropriate exercise of the executive domestic decisional to state secrets regarding military, diplomatic and other national security
and policy making functions, that is, those documents reflecting the frank matters."80 The same case held that closed-door Cabinet meetings are also a
expression necessary in intra-governmental advisory and deliberative recognized limitation on the right to information.
communications.70 (Emphasis and underscoring supplied) Similarly, in Chavez v. Public Estates Authority, 81 the Court ruled that the right to
That a type of information is recognized as privileged does not, however, necessarily information does not extend to matters recognized as "privileged information under
mean that it would be considered privileged in all instances. For in determining the the separation of powers,"82 by which the Court meant Presidential conversations,
validity of a claim of privilege, the question that must be asked is not only whether correspondences, and discussions in closed-door Cabinet meetings. It also held that
the requested information falls within one of the traditional privileges, but also information on military and diplomatic secrets and those affecting national security,
whether that privilege should be honored in a given procedural setting. 71 and information on investigations of crimes by law enforcement agencies before the
The leading case on executive privilege in the United States is U.S. v. prosecution of the accused were exempted from the right to information.
Nixon, 72 decided in 1974. In issue in that case was the validity of President Nixons From the above discussion on the meaning and scope of executive privilege, both in
claim of executive privilege against a subpoena issued by a district court requiring the United States and in this jurisdiction, a clear principle emerges. Executive
the production of certain tapes and documents relating to the Watergate privilege, whether asserted against Congress, the courts, or the public, is recognized
investigations. The claim of privilege was based on the Presidents general interest only in relation to certain types of information of a sensitive character. While
in the confidentiality of his conversations and correspondence. The U.S. Court held executive privilege is a constitutional concept, a claim thereof may be valid or not
that while there is no explicit reference to a privilege of confidentiality in the U.S. depending on the ground invoked to justify it and the context in which it is made.
Constitution, it is constitutionally based to the extent that it relates to the effective Noticeably absent is any recognition that executive officials are exempt from the
discharge of a Presidents powers. The Court, nonetheless, rejected the Presidents duty to disclose information by the mere fact of being executive officials. Indeed, the
claim of privilege, ruling that the privilege must be balanced against the public extraordinary character of the exemptions indicates that the presumption inclines
interest in the fair administration of criminal justice. Notably, the Court was careful heavily against executive secrecy and in favor of disclosure.
to clarify that it was not there addressing the issue of claims of privilege in a civil Validity of Section 1
litigation or against congressional demands for information. Section 1 is similar to Section 3 in that both require the officials covered by them to
Cases in the U.S. which involve claims of executive privilege against Congress are secure the consent of the President prior to appearing before Congress. There are
rare.73 Despite frequent assertion of the privilege to deny information to Congress,
significant differences between the two provisions, however, which constrain this draft down to Section 31, far from the provision on inquiries in aid of legislation. This
Court to discuss the validity of these provisions separately. gave rise to the following exchange during the deliberations:
Section 1 specifically applies to department heads. It does not, unlike Section 3, MR. GUINGONA. [speaking in his capacity as Chairman of the Committee on Style]
require a prior determination by any official whether they are covered by E.O. 464. We now go, Mr. Presiding Officer, to the Article on Legislative and may I request the
The President herself has, through the challenged order, made the determination chairperson of the Legislative Department, Commissioner Davide, to give his
that they are. Further, unlike also Section 3, the coverage of department heads reaction.
under Section 1 is not made to depend on the department heads possession of any THE PRESIDING OFFICER (Mr. Jamir). Commissioner Davide is recognized.|avvphi|.net
information which might be covered by executive privilege. In fact, in marked MR. DAVIDE. Thank you, Mr. Presiding Officer. I have only one reaction to the
contrast to Section 3 vis--vis Section 2, there is no reference to executive privilege Question Hour. I propose that instead of putting it as Section 31, it should follow
at all. Rather, the required prior consent under Section 1 is grounded on Article VI, Legislative Inquiries.
Section 22 of the Constitution on what has been referred to as the question hour. THE PRESIDING OFFICER. What does the committee say?
SECTION 22. The heads of departments may upon their own initiative, with the MR. GUINGONA. I ask Commissioner Maambong to reply, Mr. Presiding Officer.
consent of the President, or upon the request of either House, as the rules of each MR. MAAMBONG. Actually, we considered that previously when we sequenced this
House shall provide, appear before and be heard by such House on any matter but we reasoned that in Section 21, which is Legislative Inquiry, it is actually a power
pertaining to their departments. Written questions shall be submitted to the of Congress in terms of its own lawmaking; whereas, a Question Hour is not actually
President of the Senate or the Speaker of the House of Representatives at least a power in terms of its own lawmaking power because in Legislative Inquiry, it is in
three days before their scheduled appearance. Interpellations shall not be limited to aid of legislation. And so we put Question Hour as Section 31. I hope Commissioner
written questions, but may cover matters related thereto. When the security of the Davide will consider this.
State or the public interest so requires and the President so states in writing, the MR. DAVIDE. The Question Hour is closely related with the legislative power, and it is
appearance shall be conducted in executive session. precisely as a complement to or a supplement of the Legislative Inquiry. The
Determining the validity of Section 1 thus requires an examination of the meaning of appearance of the members of Cabinet would be very, very essential not only in the
Section 22 of Article VI. Section 22 which provides for the question hour must be application of check and balance but also, in effect, in aid of legislation.
interpreted vis--vis Section 21 which provides for the power of either House of MR. MAAMBONG. After conferring with the committee, we find merit in the
Congress to "conduct inquiries in aid of legislation." As the following excerpt of the suggestion of Commissioner Davide. In other words, we are accepting that and so
deliberations of the Constitutional Commission shows, the framers were aware that this Section 31 would now become Section 22. Would it be, Commissioner Davide?
these two provisions involved distinct functions of Congress. MR. DAVIDE. Yes.84 (Emphasis and underscoring supplied)
MR. MAAMBONG. x x x When we amended Section 20 [now Section 22 on the Consistent with their statements earlier in the deliberations, Commissioners Davide
Question Hour] yesterday, I noticed that members of the Cabinet cannot be and Maambong proceeded from the same assumption that these provisions
compelled anymore to appear before the House of Representatives or before the pertained to two different functions of the legislature. Both Commissioners
Senate. I have a particular problem in this regard, Madam President, because in our understood that the power to conduct inquiries in aid of legislation is different from
experience in the Regular Batasang Pambansa as the Gentleman himself has the power to conduct inquiries during the question hour. Commissioner Davides
experienced in the interim Batasang Pambansa one of the most competent inputs only concern was that the two provisions on these distinct powers be placed closely
that we can put in our committee deliberations, either in aid of legislation or in together, they being complementary to each other. Neither Commissioner
congressional investigations, is the testimonies of Cabinet ministers. We usually considered them as identical functions of Congress.
invite them, but if they do not come and it is a congressional investigation, we The foregoing opinion was not the two Commissioners alone. From the above-
usually issue subpoenas. quoted exchange, Commissioner Maambongs committee the Committee on Style
I want to be clarified on a statement made by Commissioner Suarez when he said shared the view that the two provisions reflected distinct functions of Congress.
that the fact that the Cabinet ministers may refuse to come to the House of Commissioner Davide, on the other hand, was speaking in his capacity as Chairman
Representatives or the Senate [when requested under Section 22] does not mean of the Committee on the Legislative Department. His views may thus be presumed
that they need not come when they are invited or subpoenaed by the committee of as representing that of his Committee.
either House when it comes to inquiries in aid of legislation or congressional In the context of a parliamentary system of government, the "question hour" has a
investigation. According to Commissioner Suarez, that is allowed and their presence definite meaning. It is a period of confrontation initiated by Parliament to hold the
can be had under Section 21. Does the gentleman confirm this, Madam President? Prime Minister and the other ministers accountable for their acts and the operation
MR. DAVIDE. We confirm that, Madam President, because Section 20 refers only to of the government,85 corresponding to what is known in Britain as the question
what was originally the Question Hour, whereas, Section 21 would refer specifically period. There was a specific provision for a question hour in the 1973
to inquiries in aid of legislation, under which anybody for that matter, may be Constitution86 which made the appearance of ministers mandatory. The same
summoned and if he refuses, he can be held in contempt of the House. 83 (Emphasis perfectly conformed to the parliamentary system established by that Constitution,
and underscoring supplied) where the ministers are also members of the legislature and are directly accountable
A distinction was thus made between inquiries in aid of legislation and the question to it.
hour. While attendance was meant to be discretionary in the question hour, it was An essential feature of the parliamentary system of government is the immediate
compulsory in inquiries in aid of legislation. The reference to Commissioner Suarez accountability of the Prime Minister and the Cabinet to the National Assembly. They
bears noting, he being one of the proponents of the amendment to make the shall be responsible to the National Assembly for the program of government and
appearance of department heads discretionary in the question hour. shall determine the guidelines of national policy. Unlike in the presidential system
So clearly was this distinction conveyed to the members of the Commission that the where the tenure of office of all elected officials cannot be terminated before their
Committee on Style, precisely in recognition of this distinction, later moved the term expired, the Prime Minister and the Cabinet remain in office only as long as
provision on question hour from its original position as Section 20 in the original they enjoy the confidence of the National Assembly. The moment this confidence is
lost the Prime Minister and the Cabinet may be changed.87
The framers of the 1987 Constitution removed the mandatory nature of such respect accorded to a co-equal branch of government which is sanctioned by a long-
appearance during the question hour in the present Constitution so as to conform standing custom.
more fully to a system of separation of powers.88 To that extent, the question hour, By the same token, members of the Supreme Court are also exempt from this power
as it is presently understood in this jurisdiction, departs from the question period of of inquiry. Unlike the Presidency, judicial power is vested in a collegial body; hence,
the parliamentary system. That department heads may not be required to appear in each member thereof is exempt on the basis not only of separation of powers but
a question hour does not, however, mean that the legislature is rendered powerless also on the fiscal autonomy and the constitutional independence of the judiciary.
to elicit information from them in all circumstances. In fact, in light of the absence of This point is not in dispute, as even counsel for the Senate, Sen. Joker Arroyo,
a mandatory question period, the need to enforce Congress right to executive admitted it during the oral argument upon interpellation of the Chief Justice.
information in the performance of its legislative function becomes more imperative. Having established the proper interpretation of Section 22, Article VI of the
As Schwartz observes: Constitution, the Court now proceeds to pass on the constitutionality of Section 1 of
Indeed, if the separation of powers has anything to tell us on the subject under E.O. 464.
discussion, it is that the Congress has the right to obtain information from any Section 1, in view of its specific reference to Section 22 of Article VI of the
source even from officials of departments and agencies in the executive branch. In Constitution and the absence of any reference to inquiries in aid of legislation, must
the United States there is, unlike the situation which prevails in a parliamentary be construed as limited in its application to appearances of department heads in the
system such as that in Britain, a clear separation between the legislative and question hour contemplated in the provision of said Section 22 of Article VI. The
executive branches. It is this very separation that makes the congressional right to reading is dictated by the basic rule of construction that issuances must be
obtain information from the executive so essential, if the functions of the Congress interpreted, as much as possible, in a way that will render it constitutional.
as the elected representatives of the people are adequately to be carried out. The The requirement then to secure presidential consent under Section 1, limited as it is
absence of close rapport between the legislative and executive branches in this only to appearances in the question hour, is valid on its face. For under Section 22,
country, comparable to those which exist under a parliamentary system, and the Article VI of the Constitution, the appearance of department heads in the question
nonexistence in the Congress of an institution such as the British question period hour is discretionary on their part.
have perforce made reliance by the Congress upon its right to obtain information Section 1 cannot, however, be applied to appearances of department heads in
from the executive essential, if it is intelligently to perform its legislative tasks. inquiries in aid of legislation. Congress is not bound in such instances to respect the
Unless the Congress possesses the right to obtain executive information, its power refusal of the department head to appear in such inquiry, unless a valid claim of
of oversight of administration in a system such as ours becomes a power devoid of privilege is subsequently made, either by the President herself or by the Executive
most of its practical content, since it depends for its effectiveness solely upon Secretary.
information parceled out ex gratia by the executive. 89 (Emphasis and underscoring Validity of Sections 2 and 3
supplied) Section 3 of E.O. 464 requires all the public officials enumerated in Section 2(b) to
Sections 21 and 22, therefore, while closely related and complementary to each secure the consent of the President prior to appearing before either house of
other, should not be considered as pertaining to the same power of Congress. One Congress. The enumeration is broad. It covers all senior officials of executive
specifically relates to the power to conduct inquiries in aid of legislation, the aim of departments, all officers of the AFP and the PNP, and all senior national security
which is to elicit information that may be used for legislation, while the other officials who, in the judgment of the heads of offices designated in the same section
pertains to the power to conduct a question hour, the objective of which is to obtain (i.e. department heads, Chief of Staff of the AFP, Chief of the PNP, and the National
information in pursuit of Congress oversight function. Security Adviser), are "covered by the executive privilege."
When Congress merely seeks to be informed on how department heads are The enumeration also includes such other officers as may be determined by the
implementing the statutes which it has issued, its right to such information is not as President. Given the title of Section 2 "Nature, Scope and Coverage of Executive
imperative as that of the President to whom, as Chief Executive, such department Privilege" , it is evident that under the rule of ejusdem generis, the determination
heads must give a report of their performance as a matter of duty. In such instances, by the President under this provision is intended to be based on a similar finding of
Section 22, in keeping with the separation of powers, states that Congress may only coverage under executive privilege.
request their appearance. Nonetheless, when the inquiry in which Congress requires En passant, the Court notes that Section 2(b) of E.O. 464 virtually states that
their appearance is "in aid of legislation" under Section 21, the appearance is executive privilege actually covers persons. Such is a misuse of the doctrine.
mandatory for the same reasons stated in Arnault.90 Executive privilege, as discussed above, is properly invoked in relation to specific
In fine, the oversight function of Congress may be facilitated by compulsory process categories of information and not to categories of persons.
only to the extent that it is performed in pursuit of legislation. This is consistent with In light, however, of Sec 2(a) of E.O. 464 which deals with the nature, scope and
the intent discerned from the deliberations of the Constitutional Commission. coverage of executive privilege, the reference to persons being "covered by the
Ultimately, the power of Congress to compel the appearance of executive officials executive privilege" may be read as an abbreviated way of saying that the person is
under Section 21 and the lack of it under Section 22 find their basis in the principle in possession of information which is, in the judgment of the head of office
of separation of powers. While the executive branch is a co-equal branch of the concerned, privileged as defined in Section 2(a). The Court shall thus proceed on the
legislature, it cannot frustrate the power of Congress to legislate by refusing to assumption that this is the intention of the challenged order.
comply with its demands for information. Upon a determination by the designated head of office or by the President that an
When Congress exercises its power of inquiry, the only way for department heads to official is "covered by the executive privilege," such official is subjected to the
exempt themselves therefrom is by a valid claim of privilege. They are not exempt requirement that he first secure the consent of the President prior to appearing
by the mere fact that they are department heads. Only one executive official may be before Congress. This requirement effectively bars the appearance of the official
exempted from this power the President on whom executive power is vested, concerned unless the same is permitted by the President. The proviso allowing the
hence, beyond the reach of Congress except through the power of impeachment. It President to give its consent means nothing more than that the President may
is based on her being the highest official of the executive branch, and the due reverse a prohibition which already exists by virtue of E.O. 464.
Thus, underlying this requirement of prior consent is the determination by a head of the glare of publicity and pressure by interested parties, is essential to protect the
office, authorized by the President under E.O. 464, or by the President herself, that independence of decision-making of those tasked to exercise Presidential,
such official is in possession of information that is covered by executive privilege. Legislative and Judicial power. This is not the situation in the instant
This determination then becomes the basis for the officials not showing up in the case.91 (Emphasis and underscoring supplied)
legislative investigation. Section 3 of E.O. 464, therefore, cannot be dismissed outright as invalid by the mere
In view thereof, whenever an official invokes E.O. 464 to justify his failure to be fact that it sanctions claims of executive privilege. This Court must look further and
present, such invocation must be construed as a declaration to Congress that the assess the claim of privilege authorized by the Order to determine whether it is
President, or a head of office authorized by the President, has determined that the valid.
requested information is privileged, and that the President has not reversed such While the validity of claims of privilege must be assessed on a case to case basis,
determination. Such declaration, however, even without mentioning the term examining the ground invoked therefor and the particular circumstances surrounding
"executive privilege," amounts to an implied claim that the information is being it, there is, in an implied claim of privilege, a defect that renders it invalid per se. By
withheld by the executive branch, by authority of the President, on the basis of its very nature, and as demonstrated by the letter of respondent Executive
executive privilege. Verily, there is an implied claim of privilege. Secretary quoted above, the implied claim authorized by Section 3 of E.O. 464 is not
The letter dated September 28, 2005 of respondent Executive Secretary Ermita to accompanied by any specific allegation of the basis thereof (e.g., whether the
Senate President Drilon illustrates the implied nature of the claim of privilege information demanded involves military or diplomatic secrets, closed-door Cabinet
authorized by E.O. 464. It reads: meetings, etc.). While Section 2(a) enumerates the types of information that are
In connection with the inquiry to be conducted by the Committee of the Whole covered by the privilege under the challenged order, Congress is left to speculate as
regarding the Northrail Project of the North Luzon Railways Corporation on 29 to which among them is being referred to by the executive. The enumeration is not
September 2005 at 10:00 a.m., please be informed that officials of the Executive even intended to be comprehensive, but a mere statement of what is included in the
Department invited to appear at the meeting will not be able to attend the same phrase "confidential or classified information between the President and the public
without the consent of the President, pursuant to Executive Order No. 464 (s. 2005), officers covered by this executive order."
entitled "Ensuring Observance Of The Principle Of Separation Of Powers, Adherence Certainly, Congress has the right to know why the executive considers the requested
To The Rule On Executive Privilege And Respect For The Rights Of Public Officials information privileged. It does not suffice to merely declare that the President, or an
Appearing In Legislative Inquiries In Aid Of Legislation Under The Constitution, And authorized head of office, has determined that it is so, and that the President has
For Other Purposes". Said officials have not secured the required consent from the not overturned that determination. Such declaration leaves Congress in the dark on
President. (Underscoring supplied) how the requested information could be classified as privileged. That the message is
The letter does not explicitly invoke executive privilege or that the matter on which couched in terms that, on first impression, do not seem like a claim of privilege only
these officials are being requested to be resource persons falls under the recognized makes it more pernicious. It threatens to make Congress doubly blind to the
grounds of the privilege to justify their absence. Nor does it expressly state that in question of why the executive branch is not providing it with the information that it
view of the lack of consent from the President under E.O. 464, they cannot attend has requested.
the hearing. A claim of privilege, being a claim of exemption from an obligation to disclose
Significant premises in this letter, however, are left unstated, deliberately or not. information, must, therefore, be clearly asserted. As U.S. v. Reynolds teaches:
The letter assumes that the invited officials are covered by E.O. 464. As explained The privilege belongs to the government and must be asserted by it; it can neither
earlier, however, to be covered by the order means that a determination has been be claimed nor waived by a private party. It is not to be lightly invoked. There must
made, by the designated head of office or the President, that the invited official be a formal claim of privilege, lodged by the head of the department which has
possesses information that is covered by executive privilege. Thus, although it is not control over the matter, after actual personal consideration by that officer. The court
stated in the letter that such determination has been made, the same must be itself must determine whether the circumstances are appropriate for the claim of
deemed implied. Respecting the statement that the invited officials have not privilege, and yet do so without forcing a disclosure of the very thing the privilege is
secured the consent of the President, it only means that the President has not designed to protect.92 (Underscoring supplied)
reversed the standing prohibition against their appearance before Congress. Absent then a statement of the specific basis of a claim of executive privilege, there
Inevitably, Executive Secretary Ermitas letter leads to the conclusion that the is no way of determining whether it falls under one of the traditional privileges, or
executive branch, either through the President or the heads of offices authorized whether, given the circumstances in which it is made, it should be
under E.O. 464, has made a determination that the information required by the respected.93 These, in substance, were the same criteria in assessing the claim of
Senate is privileged, and that, at the time of writing, there has been no contrary privilege asserted against the Ombudsman in Almonte v. Vasquez 94 and, more in
pronouncement from the President. In fine, an implied claim of privilege has been point, against a committee of the Senate in Senate Select Committee on Presidential
made by the executive. Campaign Activities v. Nixon.95
While there is no Philippine case that directly addresses the issue of whether A.O. Smith v. Federal Trade Commission is enlightening:
executive privilege may be invoked against Congress, it is gathered from Chavez v. [T]he lack of specificity renders an assessment of the potential harm resulting from
PEA that certain information in the possession of the executive may validly be disclosure impossible, thereby preventing the Court from balancing such harm
claimed as privileged even against Congress. Thus, the case holds: against plaintiffs needs to determine whether to override any claims of
There is no claim by PEA that the information demanded by petitioner is privileged privilege.96 (Underscoring supplied)
information rooted in the separation of powers. The information does not cover And so is U.S. v. Article of Drug:97
Presidential conversations, correspondences, or discussions during closed-door On the present state of the record, this Court is not called upon to perform this
Cabinet meetings which, like internal-deliberations of the Supreme Court and other balancing operation. In stating its objection to claimants interrogatories,
collegiate courts, or executive sessions of either house of Congress, are recognized government asserts, and nothing more, that the disclosures sought by claimant
as confidential. This kind of information cannot be pried open by a co-equal branch would inhibit the free expression of opinion that non-disclosure is designed to
of government. A frank exchange of exploratory ideas and assessments, free from protect. The government has not shown nor even alleged that those who
evaluated claimants product were involved in internal policymaking, generally, or in The claim of privilege under Section 3 of E.O. 464 in relation to Section 2(b) is thus
this particular instance. Privilege cannot be set up by an unsupported claim. The invalid per se. It is not asserted. It is merely implied. Instead of providing precise and
facts upon which the privilege is based must be established. To find these certain reasons for the claim, it merely invokes E.O. 464, coupled with an
interrogatories objectionable, this Court would have to assume that the evaluation announcement that the President has not given her consent. It is woefully
and classification of claimants products was a matter of internal policy formulation, insufficient for Congress to determine whether the withholding of information is
an assumption in which this Court is unwilling to indulge sua sponte.98 (Emphasis justified under the circumstances of each case. It severely frustrates the power of
and underscoring supplied) inquiry of Congress.
Mobil Oil Corp. v. Department of Energy99 similarly emphasizes that "an agency must In fine, Section 3 and Section 2(b) of E.O. 464 must be invalidated.
provide precise and certain reasons for preserving the confidentiality of requested No infirmity, however, can be imputed to Section 2(a) as it merely provides
information." guidelines, binding only on the heads of office mentioned in Section 2(b), on what is
Black v. Sheraton Corp. of America 100 amplifies, thus: covered by executive privilege. It does not purport to be conclusive on the other
A formal and proper claim of executive privilege requires a specific designation and branches of government. It may thus be construed as a mere expression of opinion
description of the documents within its scope as well as precise and certain reasons by the President regarding the nature and scope of executive privilege.
for preserving their confidentiality. Without this specificity, it is impossible for a court Petitioners, however, assert as another ground for invalidating the challenged order
to analyze the claim short of disclosure of the very thing sought to be protected. As the alleged unlawful delegation of authority to the heads of offices in Section 2(b).
the affidavit now stands, the Court has little more than its sua sponte speculation Petitioner Senate of the Philippines, in particular, cites the case of the United States
with which to weigh the applicability of the claim. An improperly asserted claim of where, so it claims, only the President can assert executive privilege to withhold
privilege is no claim of privilege. Therefore, despite the fact that a claim was made information from Congress.
by the proper executive as Reynolds requires, the Court can not recognize the claim Section 2(b) in relation to Section 3 virtually provides that, once the head of office
in the instant case because it is legally insufficient to allow the Court to make a just determines that a certain information is privileged, such determination is presumed
and reasonable determination as to its applicability. To recognize such a broad claim to bear the Presidents authority and has the effect of prohibiting the official from
in which the Defendant has given no precise or compelling reasons to shield these appearing before Congress, subject only to the express pronouncement of the
documents from outside scrutiny, would make a farce of the whole President that it is allowing the appearance of such official. These provisions thus
procedure.101(Emphasis and underscoring supplied) allow the President to authorize claims of privilege by mere silence.
Due respect for a co-equal branch of government, moreover, demands no less than Such presumptive authorization, however, is contrary to the exceptional nature of
a claim of privilege clearly stating the grounds therefor. Apropos is the following the privilege. Executive privilege, as already discussed, is recognized with respect to
ruling in McPhaul v. U.S:102 information the confidential nature of which is crucial to the fulfillment of the unique
We think the Courts decision in United States v. Bryan, 339 U.S. 323, 70 S. Ct. 724, role and responsibilities of the executive branch,105 or in those instances where
is highly relevant to these questions. For it is as true here as it was there, that if exemption from disclosure is necessary to the discharge of highly important
(petitioner) had legitimate reasons for failing to produce the records of the executive responsibilities.106 The doctrine of executive privilege is thus premised on
association, a decent respect for the House of Representatives, by whose authority the fact that certain informations must, as a matter of necessity, be kept
the subpoenas issued, would have required that (he) state (his) reasons for confidential in pursuit of the public interest. The privilege being, by definition, an
noncompliance upon the return of the writ. Such a statement would have given the exemption from the obligation to disclose information, in this case to Congress, the
Subcommittee an opportunity to avoid the blocking of its inquiry by taking other necessity must be of such high degree as to outweigh the public interest in
appropriate steps to obtain the records. To deny the Committee the opportunity to enforcing that obligation in a particular case.
consider the objection or remedy is in itself a contempt of its authority and an In light of this highly exceptional nature of the privilege, the Court finds it essential
obstruction of its processes. His failure to make any such statement was "a patent to limit to the President the power to invoke the privilege. She may of course
evasion of the duty of one summoned to produce papers before a congressional authorize the Executive Secretary to invoke the privilege on her behalf, in which
committee[, and] cannot be condoned." (Emphasis and underscoring supplied; case the Executive Secretary must state that the authority is "By order of the
citations omitted) President," which means that he personally consulted with her. The privilege being
Upon the other hand, Congress must not require the executive to state the reasons an extraordinary power, it must be wielded only by the highest official in the
for the claim with such particularity as to compel disclosure of the information which executive hierarchy. In other words, the President may not authorize her
the privilege is meant to protect.103 A useful analogy in determining the requisite subordinates to exercise such power. There is even less reason to uphold such
degree of particularity would be the privilege against self-incrimination. Thus, authorization in the instant case where the authorization is not explicit but by mere
Hoffman v. U.S.104 declares: silence. Section 3, in relation to Section 2(b), is further invalid on this score.
The witness is not exonerated from answering merely because he declares that in so It follows, therefore, that when an official is being summoned by Congress on a
doing he would incriminate himself his say-so does not of itself establish the matter which, in his own judgment, might be covered by executive privilege, he
hazard of incrimination. It is for the court to say whether his silence is justified, and must be afforded reasonable time to inform the President or the Executive Secretary
to require him to answer if it clearly appears to the court that he is mistaken. of the possible need for invoking the privilege. This is necessary in order to provide
However, if the witness, upon interposing his claim, were required to prove the the President or the Executive Secretary with fair opportunity to consider whether
hazard in the sense in which a claim is usually required to be established in court, he the matter indeed calls for a claim of executive privilege. If, after the lapse of that
would be compelled to surrender the very protection which the privilege is designed reasonable time, neither the President nor the Executive Secretary invokes the
to guarantee. To sustain the privilege, it need only be evident from the implications privilege, Congress is no longer bound to respect the failure of the official to appear
of the question, in the setting in which it is asked, that a responsive answer to the before Congress and may then opt to avail of the necessary legal means to compel
question or an explanation of why it cannot be answered might be dangerous his appearance.
because injurious disclosure could result." x x x (Emphasis and underscoring The Court notes that one of the expressed purposes for requiring officials to secure
supplied) the consent of the President under Section 3 of E.O. 464 is to ensure "respect for the
rights of public officials appearing in inquiries in aid of legislation." That such rights question in the political forums or, if he is a proper party, even in courts of
must indeed be respected by Congress is an echo from Article VI Section 21 of the justice.108 (Emphasis and underscoring supplied)
Constitution mandating that "[t]he rights of persons appearing in or affected by such Although the above statement was made in reference to statutes, logic dictates that
inquiries shall be respected." the challenged order must be covered by the publication requirement. As explained
In light of the above discussion of Section 3, it is clear that it is essentially an above, E.O. 464 has a direct effect on the right of the people to information on
authorization for implied claims of executive privilege, for which reason it must be matters of public concern. It is, therefore, a matter of public interest which members
invalidated. That such authorization is partly motivated by the need to ensure of the body politic may question before this Court. Due process thus requires that
respect for such officials does not change the infirm nature of the authorization the people should have been apprised of this issuance before it was implemented.
itself. Conclusion
Right to Information Congress undoubtedly has a right to information from the executive branch
E.O 464 is concerned only with the demands of Congress for the appearance of whenever it is sought in aid of legislation. If the executive branch withholds such
executive officials in the hearings conducted by it, and not with the demands of information on the ground that it is privileged, it must so assert it and state the
citizens for information pursuant to their right to information on matters of public reason therefor and why it must be respected.
concern. Petitioners are not amiss in claiming, however, that what is involved in the The infirm provisions of E.O. 464, however, allow the executive branch to evade
present controversy is not merely the legislative power of inquiry, but the right of congressional requests for information without need of clearly asserting a right to do
the people to information. so and/or proffering its reasons therefor. By the mere expedient of invoking said
There are, it bears noting, clear distinctions between the right of Congress to provisions, the power of Congress to conduct inquiries in aid of legislation is
information which underlies the power of inquiry and the right of the people to frustrated. That is impermissible. For
information on matters of public concern. For one, the demand of a citizen for the [w]hat republican theory did accomplishwas to reverse the old presumption in
production of documents pursuant to his right to information does not have the favor of secrecy, based on the divine right of kings and nobles, and replace it with a
same obligatory force as a subpoena duces tecum issued by Congress. Neither does presumption in favor of publicity, based on the doctrine of popular sovereignty.
the right to information grant a citizen the power to exact testimony from (Underscoring supplied)109
government officials. These powers belong only to Congress and not to an individual Resort to any means then by which officials of the executive branch could refuse to
citizen. divulge information cannot be presumed valid. Otherwise, we shall not have merely
Thus, while Congress is composed of representatives elected by the people, it does nullified the power of our legislature to inquire into the operations of government,
not follow, except in a highly qualified sense, that in every exercise of its power of but we shall have given up something of much greater value our right as a people
inquiry, the people are exercising their right to information. to take part in government.
To the extent that investigations in aid of legislation are generally conducted in WHEREFORE, the petitions are PARTLY GRANTED. Sections 2(b) and 3 of Executive
public, however, any executive issuance tending to unduly limit disclosures of Order No. 464 (series of 2005), "Ensuring Observance of the Principle of Separation
information in such investigations necessarily deprives the people of information of Powers, Adherence to the Rule on Executive
which, being presumed to be in aid of legislation, is presumed to be a matter of Privilege and Respect for the Rights of Public Officials Appearing in Legislative
public concern. The citizens are thereby denied access to information which they Inquiries in Aid of Legislation Under the Constitution, and For Other Purposes," are
can use in formulating their own opinions on the matter before Congress opinions declared VOID. Sections 1 and 2(a) are, however, VALID.
which they can then communicate to their representatives and other government SO ORDERED.
officials through the various legal means allowed by their freedom of expression. CONCHITA CARPIO MORALES
Thus holds Valmonte v. Belmonte: Associate Justice
It is in the interest of the State that the channels for free political discussion be
maintained to the end that the government may perceive and be responsive to the Senate vs. Ermita , GR 169777, April 20, 2006
peoples will. Yet, this open dialogue can be effective only to the extent that the Senate vs. Ermita , GR 169777, April 20, 2006
citizenry is informed and thus able to formulate its will intelligently. Only when the
participants in the discussion are aware of the issues and have access to information FACTS:
relating thereto can such bear fruit.107(Emphasis and underscoring supplied) This is a petition for certiorari and prohibition proffer that the President has abused
The impairment of the right of the people to information as a consequence of E.O. power by issuing E.O. 464 Ensuring Observance of the Principles of Separation of
464 is, therefore, in the sense explained above, just as direct as its violation of the Powers, Adherence to the Rule on Executive Privilege and Respect for the Rights of
legislatures power of inquiry. Public Officials Appearing in Legislative Inquiries in Aid of Legislation Under the
Implementation of E.O. 464 prior to its publication Constitution, and for Other Purposes. Petitioners pray for its declaration as null and
While E.O. 464 applies only to officials of the executive branch, it does not follow void for being unconstitutional.
that the same is exempt from the need for publication. On the need for publishing In the exercise of its legislative power, the Senate of the Philippines, through its
even those statutes that do not directly apply to people in general, Taada v. Tuvera various Senate Committees, conducts inquiries or investigations in aid of legislation
states: which call for, inter alia, the attendance of officials and employees of the executive
The term "laws" should refer to all laws and not only to those of general application, department, bureaus, and offices including those employed in Government Owned
for strictly speaking all laws relate to the people in general albeit there are some and Controlled Corporations, the Armed Forces of the Philippines (AFP), and the
that do not apply to them directly. An example is a law granting citizenship to a Philippine National Police (PNP).
particular individual, like a relative of President Marcos who was decreed instant The Committee of the Senate issued invitations to various officials of the Executive
naturalization. It surely cannot be said that such a law does not affect the public Department for them to appear as resource speakers in a public hearing on the
although it unquestionably does not apply directly to all the people. The subject of railway project, others on the issues of massive election fraud in the Philippine
such law is a matter of public interest which any member of the body politic may elections, wire tapping, and the role of military in the so-called Gloriagate Scandal.
Said officials were not able to attend due to lack of consent from the President as PRESIDENT BENIGNO SIMEON C. AQUINO III* and SECRETARY FLORENCIO
provided by E.O. 464, Section 3 which requires all the public officials enumerated in BUTCH ABAD, DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
Section 2(b) to secure the consent of the President prior to appearing before either DECISION
house of Congress. PERLAS-BERNABE, J.:
"Experience is the oracle of truth."1
ISSUE: -James Madison
Is Section 3 of E.O. 464, which requires all the public officials, enumerated in Section Before the Court are consolidated petitions2 taken under Rule 65 of the Rules of
2(b) to secure the consent of the President prior to appearing before either house of Court, all of which assail the constitutionality of the Pork Barrel System. Due to the
Congress, valid and constitutional? complexity of the subject matter, the Court shall heretofore discuss the systems
conceptual underpinnings before detailing the particulars of the constitutional
RULING: challenge.
No. The enumeration in Section 2 (b) of E.O. 464 is broad and is covered by the The Facts
executive privilege. The doctrine of executive privilege is premised on the fact that I. Pork Barrel: General Concept.
certain information must, as a matter of necessity, be kept confidential in pursuit of "Pork Barrel" is political parlance of American -English origin.3 Historically, its usage
the public interest. The privilege being, by definition, an exemption from the may be traced to the degrading ritual of rolling out a barrel stuffed with pork to a
obligation to disclose information, in this case to Congress, the necessity must be of multitude of black slaves who would cast their famished bodies into the porcine
such high degree as to outweigh the public interest in enforcing that obligation in a feast to assuage their hunger with morsels coming from the generosity of their well-
particular case. fed master.4 This practice was later compared to the actions of American legislators
Congress undoubtedly has a right to information from the executive branch in trying to direct federal budgets in favor of their districts. 5 While the advent of
whenever it is sought in aid of legislation. If the executive branch withholds such refrigeration has made the actual pork barrel obsolete, it persists in reference to
information on the ground that it is privileged, it must so assert it and state the political bills that "bring home the bacon" to a legislators district and
reason therefor and why it must be respected. constituents.6 In a more technical sense, "Pork Barrel" refers to an appropriation of
The infirm provisions of E.O. 464, however, allow the executive branch to evade government spending meant for localized projects and secured solely or primarily to
congressional requests for information without need of clearly asserting a right to do bring money to a representative's district.7 Some scholars on the subject further use
so and/or proffering its reasons therefor. By the mere expedient of invoking said it to refer to legislative control of local appropriations.8
provisions, the power of Congress to conduct inquiries in aid of legislation is In the Philippines, "Pork Barrel" has been commonly referred to as lump-sum,
frustrated. discretionary funds of Members of the Legislature,9 although, as will be later
discussed, its usage would evolve in reference to certain funds of the Executive.
Republic of the Philippines II. History of Congressional Pork Barrel in the Philippines.
SUPREME COURT A. Pre-Martial Law Era (1922-1972).
Manila Act 3044,10 or the Public Works Act of 1922, is considered11 as the earliest form of
EN BANC "Congressional Pork Barrel" in the Philippines since the utilization of the funds
G.R. No. 208566 November 19, 2013 appropriated therein were subjected to post-enactment legislator approval.
GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE L. Particularly, in the area of fund release, Section 312 provides that the sums
GONZALEZ REUBEN M. ABANTE and QUINTIN PAREDES SAN appropriated for certain public works projects13"shall be distributed x x x subject to
DIEGO, Petitioners, the approval of a joint committee elected by the Senate and the House of
vs. Representatives. "The committee from each House may also authorize one of its
HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR. SECRETARY OF members to approve the distribution made by the Secretary of Commerce and
BUDGET AND MANAGEMENT FLORENCIO B. ABAD, NATIONAL TREASURER Communications."14 Also, in the area of fund realignment, the same section provides
ROSALIA V. DE LEON SENATE OF THE PHILIPPINES represented by that the said secretary, "with the approval of said joint committee, or of the
FRANKLIN M. DRILON m his capacity as SENATE PRESIDENT and HOUSE OF authorized members thereof, may, for the purposes of said distribution, transfer
REPRESENTATIVES represented by FELICIANO S. BELMONTE, JR. in his unexpended portions of any item of appropriation under this Act to any other item
capacity as SPEAKER OF THE HOUSE, Respondents. hereunder."
x-----------------------x In 1950, it has been documented15 that post-enactment legislator participation
G.R. No. 208493 broadened from the areas of fund release and realignment to the area of project
SOCIAL JUSTICE SOCIETY (SJS) PRESIDENT SAMSON S. identification. During that year, the mechanics of the public works act was modified
ALCANTARA, Petitioner, to the extent that the discretion of choosing projects was transferred from the
vs. Secretary of Commerce and Communications to legislators. "For the first time, the
HONORABLE FRANKLIN M. DRILON in his capacity as SENATE PRESIDENT law carried a list of projects selected by Members of Congress, they being the
and HONORABLE FELICIANO S. BELMONTE, JR., in his capacity as SPEAKER representatives of the people, either on their own account or by consultation with
OF THE HOUSE OF REPRESENTATIVES, Respondents. local officials or civil leaders."16 During this period, the pork barrel process
x-----------------------x commenced with local government councils, civil groups, and individuals appealing
G.R. No. 209251 to Congressmen or Senators for projects. Petitions that were accommodated formed
PEDRITO M. NEPOMUCENO, Former Mayor-Boac, Marinduque Former part of a legislators allocation, and the amount each legislator would eventually get
Provincial Board Member -Province of Marinduque, Petitioner, is determined in a caucus convened by the majority. The amount was then
vs. integrated into the administration bill prepared by the Department of Public Works
and Communications. Thereafter, the Senate and the House of Representatives
added their own provisions to the bill until it was signed into law by the President allocations which shall be duly endorsed by (a) the Senate President and the
the Public Works Act.17 In the 1960s, however, pork barrel legislation reportedly Chairman of the Committee on Finance, in the case of the Senate, and (b) the
ceased in view of the stalemate between the House of Representatives and the Speaker of the House of Representatives and the Chairman of the Committee on
Senate.18 Appropriations, in the case of the House of Representatives; while the list for the
B. Martial Law Era (1972-1986). remaining 50% was to be submitted within six (6) months thereafter. The same
While the previous" Congressional Pork Barrel" was apparently discontinued in 1972 article also stated that the project list, which would be published by the DBM, 35 "shall
after Martial Law was declared, an era when "one man controlled the be the basis for the release of funds" and that "no funds appropriated herein shall be
legislature,"19 the reprieve was only temporary. By 1982, the Batasang Pambansa disbursed for projects not included in the list herein required."
had already introduced a new item in the General Appropriations Act (GAA) called The following year, or in 1998,36 the foregoing provisions regarding the required lists
the" Support for Local Development Projects" (SLDP) under the article on "National and endorsements were reproduced, except that the publication of the project list
Aid to Local Government Units". Based on reports, 20 it was under the SLDP that the was no longer required as the list itself sufficed for the release of CDF Funds.
practice of giving lump-sum allocations to individual legislators began, with each The CDF was not, however, the lone form of "Congressional Pork Barrel" at that time.
assemblyman receiving P500,000.00. Thereafter, assemblymen would communicate Other forms of "Congressional Pork Barrel" were reportedly fashioned and inserted
their project preferences to the Ministry of Budget and Management for approval. into the GAA (called "Congressional Insertions" or "CIs") in order to perpetuate the
Then, the said ministry would release the allocation papers to the Ministry of Local ad ministrations political agenda.37 It has been articulated that since CIs "formed
Governments, which would, in turn, issue the checks to the city or municipal part and parcel of the budgets of executive departments, they were not easily
treasurers in the assemblymans locality. It has been further reported that identifiable and were thus harder to monitor." Nonetheless, the lawmakers
"Congressional Pork Barrel" projects under the SLDP also began to cover not only themselves as well as the finance and budget officials of the implementing agencies,
public works projects, or so- called "hard projects", but also "soft projects", 21 or non- as well as the DBM, purportedly knew about the insertions.38Examples of these CIs
public works projects such as those which would fall under the categories of, among are the Department of Education (DepEd) School Building Fund, the Congressional
others, education, health and livelihood.22 Initiative Allocations, the Public Works Fund, the El Nio Fund, and the Poverty
C. Post-Martial Law Era: Alleviation Fund.39 The allocations for the School Building Fund, particularly, shall
Corazon Cojuangco Aquino Administration (1986-1992). be made upon prior consultation with the representative of the legislative district
After the EDSA People Power Revolution in 1986 and the restoration of Philippine concerned.40 Similarly, the legislators had the power to direct how, where and when
democracy, "Congressional Pork Barrel" was revived in the form of the "Mindanao these appropriations were to be spent.41
Development Fund" and the "Visayas Development Fund" which were created with E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).
lump-sum appropriations of P480 Million and P240 Million, respectively, for the In 1999,42 the CDF was removed in the GAA and replaced by three (3) separate
funding of development projects in the Mindanao and Visayas areas in 1989. It has forms of CIs, namely, the "Food Security Program Fund," 43 the "Lingap Para Sa
been documented23 that the clamor raised by the Senators and the Luzon legislators Mahihirap Program Fund,"44and the "Rural/Urban Development Infrastructure
for a similar funding, prompted the creation of the "Countrywide Development Fund" Program Fund,"45 all of which contained a special provision requiring "prior
(CDF) which was integrated into the 1990 GAA24 with an initial funding ofP2.3 Billion consultation" with the Member s of Congress for the release of the funds.
to cover "small local infrastructure and other priority community projects." It was in the year 200046 that the "Priority Development Assistance Fund" (PDAF)
Under the GAAs for the years 1991 and 1992,25 CDF funds were, with the approval of appeared in the GAA. The requirement of "prior consultation with the respective
the President, to be released directly to the implementing agencies but "subject to Representative of the District" before PDAF funds were directly released to the
the submission of the required list of projects and activities."Although the GAAs from implementing agency concerned was explicitly stated in the 2000 PDAF Article.
1990 to 1992 were silent as to the amounts of allocations of the individual Moreover, realignment of funds to any expense category was expressly allowed,
legislators, as well as their participation in the identification of projects, it has been with the sole condition that no amount shall be used to fund personal services and
reported26 that by 1992, Representatives were receivingP12.5 Million each in CDF other personnel benefits.47 The succeeding PDAF provisions remained the same in
funds, while Senators were receiving P18 Million each, without any limitation or view of the re-enactment48 of the 2000 GAA for the year 2001.
qualification, and that they could identify any kind of project, from hard or F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).
infrastructure projects such as roads, bridges, and buildings to "soft projects" such The 200249 PDAF Article was brief and straightforward as it merely contained a single
as textbooks, medicines, and scholarships.27 special provision ordering the release of the funds directly to the implementing
D. Fidel Valdez Ramos (Ramos) Administration (1992-1998). agency or local government unit concerned, without further qualifications. The
The following year, or in 1993,28 the GAA explicitly stated that the release of CDF following year, 2003,50 the same single provision was present, with simply an
funds was to be made upon the submission of the list of projects and activities expansion of purpose and express authority to realign. Nevertheless, the provisions
identified by, among others, individual legislators. For the first time, the 1993 CDF in the 2003 budgets of the Department of Public Works and Highways 51 (DPWH) and
Article included an allocation for the Vice-President.29 As such, Representatives were the DepEd52 required prior consultation with Members of Congress on the aspects of
allocated P12.5 Million each in CDF funds, Senators, P18 Million each, and the Vice- implementation delegation and project list submission, respectively. In 2004, the
President, P20 Million. 2003 GAA was re-enacted.53
In 1994,30 1995,31 and 1996,32 the GAAs contained the same provisions on project In 2005,54 the PDAF Article provided that the PDAF shall be used "to fund priority
identification and fund release as found in the 1993 CDF Article. In addition, programs and projects under the ten point agenda of the national government and
however, the Department of Budget and Management (DBM) was directed to submit shall be released directly to the implementing agencies." It also introduced the
reports to the Senate Committee on Finance and the House Committee on program menu concept,55 which is essentially a list of general programs and
Appropriations on the releases made from the funds.33 implementing agencies from which a particular PDAF project may be subsequently
Under the 199734 CDF Article, Members of Congress and the Vice-President, in chosen by the identifying authority. The 2005 GAA was re-enacted 56 in 2006 and
consultation with the implementing agency concerned, were directed to submit to hence, operated on the same bases. In similar regard, the program menu concept
the DBM the list of 50% of projects to be funded from their respective CDF was consistently integrated into the 2007, 57 2008,58 2009,59 and 201060 GAAs.
Textually, the PDAF Articles from 2002 to 2010 were silent with respect to the III. History of Presidential Pork Barrel in the Philippines.
specific amounts allocated for the individual legislators, as well as their participation While the term "Pork Barrel" has been typically associated with lump-sum,
in the proposal and identification of PDAF projects to be funded. In contrast to the discretionary funds of Members of Congress, the present cases and the recent
PDAF Articles, however, the provisions under the DepEd School Building Program controversies on the matter have, however, shown that the terms usage has
and the DPWH budget, similar to its predecessors, explicitly required prior expanded to include certain funds of the President such as the Malampaya Funds
consultation with the concerned Member of Congress 61anent certain aspects of and the Presidential Social Fund.
project implementation. On the one hand, the Malampaya Funds was created as a special fund under Section
Significantly, it was during this era that provisions which allowed formal participation 880 of Presidential Decree No. (PD) 910,81 issued by then President Ferdinand E.
of non-governmental organizations (NGO) in the implementation of government Marcos (Marcos) on March 22, 1976. In enacting the said law, Marcos recognized the
projects were introduced. In the Supplemental Budget for 2006, with respect to the need to set up a special fund to help intensify, strengthen, and consolidate
appropriation for school buildings, NGOs were, by law, encouraged to participate. For government efforts relating to the exploration, exploitation, and development of
such purpose, the law stated that "the amount of at least P250 Million of the P500 indigenous energy resources vital to economic growth. 82 Due to the energy-related
Million allotted for the construction and completion of school buildings shall be made activities of the government in the Malampaya natural gas field in Palawan, or the
available to NGOs including the Federation of Filipino-Chinese Chambers of "Malampaya Deep Water Gas-to-Power Project",83 the special fund created under PD
Commerce and Industry, Inc. for its "Operation Barrio School" program, with 910 has been currently labeled as Malampaya Funds.
capability and proven track records in the construction of public school buildings x x On the other hand the Presidential Social Fund was created under Section 12, Title
x."62 The same allocation was made available to NGOs in the 2007 and 2009 GAAs IV84 of PD 1869,85 or the Charter of the Philippine Amusement and Gaming
under the DepEd Budget.63 Also, it was in 2007 that the Government Procurement Corporation (PAGCOR). PD 1869 was similarly issued by Marcos on July 11, 1983.
Policy Board64(GPPB) issued Resolution No. 12-2007 dated June 29, 2007 (GPPB More than two (2) years after, he amended PD 1869 and accordingly issued PD 1993
Resolution 12-2007), amending the implementing rules and regulations 65 of RA on October 31, 1985,86 amending Section 1287 of the former law. As it stands, the
9184,66 the Government Procurement Reform Act, to include, as a form of negotiated Presidential Social Fund has been described as a special funding facility managed
procurement,67 the procedure whereby the Procuring Entity68 (the implementing and administered by the Presidential Management Staff through which the President
agency) may enter into a memorandum of agreement with an NGO, provided that provides direct assistance to priority programs and projects not funded under the
"an appropriation law or ordinance earmarks an amount to be specifically contracted regular budget. It is sourced from the share of the government in the aggregate
out to NGOs."69 gross earnings of PAGCOR.88
G. Present Administration (2010-Present). IV. Controversies in the Philippines.
Differing from previous PDAF Articles but similar to the CDF Articles, the 2011 70 PDAF Over the decades, "pork" funds in the Philippines have increased
Article included an express statement on lump-sum amounts allocated for individual tremendously,89 owing in no small part to previous Presidents who reportedly used
legislators and the Vice-President: Representatives were given P70 Million each, the "Pork Barrel" in order to gain congressional support. 90 It was in 1996 when the
broken down into P40 Million for "hard projects" and P30 Million for "soft projects"; first controversy surrounding the "Pork Barrel" erupted. Former Marikina City
while P200 Million was given to each Senator as well as the Vice-President, with Representative Romeo Candazo (Candazo), then an anonymous source, "blew the lid
a P100 Million allocation each for "hard" and "soft projects." Likewise, a provision on on the huge sums of government money that regularly went into the pockets of
realignment of funds was included, but with the qualification that it may be allowed legislators in the form of kickbacks."91 He said that "the kickbacks were SOP
only once. The same provision also allowed the Secretaries of Education, Health, (standard operating procedure) among legislators and ranged from a low 19 percent
Social Welfare and Development, Interior and Local Government, Environment and to a high 52 percent of the cost of each project, which could be anything from
Natural Resources, Energy, and Public Works and Highways to realign PDAF Funds, dredging, rip rapping, sphalting, concreting, and construction of school
with the further conditions that: (a) realignment is within the same implementing buildings."92 "Other sources of kickbacks that Candazo identified were public funds
unit and same project category as the original project, for infrastructure projects; (b) intended for medicines and textbooks. A few days later, the tale of the money trail
allotment released has not yet been obligated for the original scope of work, and (c) became the banner story of the Philippine Daily Inquirer issue of August 13, 1996,
the request for realignment is with the concurrence of the legislator concerned. 71 accompanied by an illustration of a roasted pig."93 "The publication of the stories,
In the 201272 and 201373 PDAF Articles, it is stated that the "identification of projects including those about congressional initiative allocations of certain lawmakers,
and/or designation of beneficiaries shall conform to the priority list, standard or including P3.6 Billion for a Congressman, sparked public outrage." 94
design prepared by each implementing agency (priority list requirement) x x x." Thereafter, or in 2004, several concerned citizens sought the nullification of the
However, as practiced, it would still be the individual legislator who would choose PDAF as enacted in the 2004 GAA for being unconstitutional. Unfortunately, for lack
and identify the project from the said priority list.74 of "any pertinent evidentiary support that illegal misuse of PDAF in the form of
Provisions on legislator allocations75 as well as fund realignment76 were included in kickbacks has become a common exercise of unscrupulous Members of Congress,"
the 2012 and 2013 PDAF Articles; but the allocation for the Vice-President, which the petition was dismissed.95
was pegged at P200 Million in the 2011 GAA, had been deleted. In addition, the Recently, or in July of the present year, the National Bureau of Investigation (NBI)
2013 PDAF Article now allowed LGUs to be identified as implementing agencies if began its probe into allegations that "the government has been defrauded of
they have the technical capability to implement the projects. 77 Legislators were also some P10 Billion over the past 10 years by a syndicate using funds from the pork
allowed to identify programs/projects, except for assistance to indigent patients and barrel of lawmakers and various government agencies for scores of ghost
scholarships, outside of his legislative district provided that he secures the written projects."96 The investigation was spawned by sworn affidavits of six (6) whistle-
concurrence of the legislator of the intended outside-district, endorsed by the blowers who declared that JLN Corporation "JLN" standing for Janet Lim Napoles
Speaker of the House.78 Finally, any realignment of PDAF funds, modification and (Napoles) had swindled billions of pesos from the public coffers for "ghost projects"
revision of project identification, as well as requests for release of funds, were all using no fewer than 20 dummy NGOs for an entire decade. While the NGOs were
required to be favorably endorsed by the House Committee on Appropriations and supposedly the ultimate recipients of PDAF funds, the whistle-blowers declared that
the Senate Committee on Finance, as the case may be.79 the money was diverted into Napoles private accounts.97 Thus, after its
investigation on the Napoles controversy, criminal complaints were filed before the the Rules of Court (Alcantara Petition), seeking that the "Pork Barrel System" be
Office of the Ombudsman, charging five (5) lawmakers for Plunder, and three (3) declared unconstitutional, and a writ of prohibition be issued permanently
other lawmakers for Malversation, Direct Bribery, and Violation of the Anti-Graft and restraining respondents Franklin M. Drilon and Feliciano S. Belmonte, Jr., in their
Corrupt Practices Act. Also recommended to be charged in the complaints are some respective capacities as the incumbent Senate President and Speaker of the House
of the lawmakers chiefs -of-staff or representatives, the heads and other officials of of Representatives, from further taking any steps to enact legislation appropriating
three (3) implementing agencies, and the several presidents of the NGOs set up by funds for the "Pork Barrel System," in whatever form and by whatever name it may
Napoles.98 be called, and from approving further releases pursuant thereto.106 The Alcantara
On August 16, 2013, the Commission on Audit (CoA) released the results of a three- Petition was docketed as G.R. No. 208493.
year audit investigation99 covering the use of legislators' PDAF from 2007 to 2009, or On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose L.
during the last three (3) years of the Arroyo administration. The purpose of the audit Gonzalez, Reuben M. Abante, Quintin Paredes San Diego (Belgica, et al.), and Jose M.
was to determine the propriety of releases of funds under PDAF and the Various Villegas, Jr. (Villegas) filed an Urgent Petition For Certiorari and Prohibition With
Infrastructures including Local Projects (VILP)100 by the DBM, the application of these Prayer For The Immediate Issuance of Temporary Restraining Order (TRO) and/or
funds and the implementation of projects by the appropriate implementing agencies Writ of Preliminary Injunction dated August 27, 2013 under Rule 65 of the Rules of
and several government-owned-and-controlled corporations (GOCCs). 101 The total Court (Belgica Petition), seeking that the annual "Pork Barrel System," presently
releases covered by the audit amounted to P8.374 Billion in PDAF and P32.664 embodied in the provisions of the GAA of 2013 which provided for the 2013 PDAF,
Billion in VILP, representing 58% and 32%, respectively, of the total PDAF and VILP and the Executives lump-sum, discretionary funds, such as the Malampaya Funds
releases that were found to have been made nationwide during the audit and the Presidential Social Fund,107 be declared unconstitutional and null and void for
period.102 Accordingly, the Co As findings contained in its Report No. 2012-03 (CoA being acts constituting grave abuse of discretion. Also, they pray that the Court
Report), entitled "Priority Development Assistance Fund (PDAF) and Various issue a TRO against respondents Paquito N. Ochoa, Jr., Florencio B. Abad (Secretary
Infrastructures including Local Projects (VILP)," were made public, the highlights of Abad) and Rosalia V. De Leon, in their respective capacities as the incumbent
which are as follows:103 Executive Secretary, Secretary of the Department of Budget and Management
Amounts released for projects identified by a considerable number of legislators (DBM), and National Treasurer, or their agents, for them to immediately cease any
significantly exceeded their respective allocations. expenditure under the aforesaid funds. Further, they pray that the Court order the
Amounts were released for projects outside of legislative districts of sponsoring foregoing respondents to release to the CoA and to the public: (a) "the complete
members of the Lower House. schedule/list of legislators who have availed of their PDAF and VILP from the years
Total VILP releases for the period exceeded the total amount appropriated under 2003 to 2013, specifying the use of the funds, the project or activity and the
the 2007 to 2009 GAAs. recipient entities or individuals, and all pertinent data thereto"; and (b) "the use of
Infrastructure projects were constructed on private lots without these having been the Executives lump-sum, discretionary funds, including the proceeds from the x x x
turned over to the government. Malampaya Funds and remittances from the PAGCOR x x x from 2003 to 2013,
Significant amounts were released to implementing agencies without the latters specifying the x x x project or activity and the recipient entities or individuals, and
endorsement and without considering their mandated functions, administrative and all pertinent data thereto."108 Also, they pray for the "inclusion in budgetary
technical capabilities to implement projects. deliberations with the Congress of all presently off-budget, lump-sum, discretionary
Implementation of most livelihood projects was not undertaken by the funds including, but not limited to, proceeds from the Malampaya Funds and
implementing agencies themselves but by NGOs endorsed by the proponent remittances from the PAGCOR."109 The Belgica Petition was docketed as G.R. No.
legislators to which the Funds were transferred. 208566.110
The funds were transferred to the NGOs in spite of the absence of any Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno (Nepomuceno),
appropriation law or ordinance. filed a Petition dated August 23, 2012 (Nepomuceno Petition), seeking that the PDAF
Selection of the NGOs were not compliant with law and regulations. be declared unconstitutional, and a cease and desist order be issued restraining
Eighty-Two (82) NGOs entrusted with implementation of seven hundred seventy President Benigno Simeon S. Aquino III (President Aquino) and Secretary Abad from
two (772) projects amount to P6.156 Billion were either found questionable, or releasing such funds to Members of Congress and, instead, allow their release to
submitted questionable/spurious documents, or failed to liquidate in whole or in part fund priority projects identified and approved by the Local Development Councils in
their utilization of the Funds. consultation with the executive departments, such as the DPWH, the Department of
Procurement by the NGOs, as well as some implementing agencies, of goods and Tourism, the Department of Health, the Department of Transportation, and
services reportedly used in the projects were not compliant with law. Communication and the National Economic Development Authority. 111 The
As for the "Presidential Pork Barrel", whistle-blowers alleged that" at least P900 Nepomuceno Petition was docketed as UDK-14951.112
Million from royalties in the operation of the Malampaya gas project off Palawan On September 10, 2013, the Court issued a Resolution of even date (a) consolidating
province intended for agrarian reform beneficiaries has gone into a dummy all cases; (b) requiring public respondents to comment on the consolidated petitions;
NGO."104 According to incumbent CoA Chairperson Maria Gracia Pulido Tan (CoA (c) issuing a TRO (September 10, 2013 TRO) enjoining the DBM, National Treasurer,
Chairperson), the CoA is, as of this writing, in the process of preparing "one the Executive Secretary, or any of the persons acting under their authority from
consolidated report" on the Malampaya Funds.105 releasing (1) the remaining PDAF allocated to Members of Congress under the GAA
V. The Procedural Antecedents. of 2013, and (2) Malampaya Funds under the phrase "for such other purposes as
Spurred in large part by the findings contained in the CoA Report and the Napoles may be hereafter directed by the President" pursuant to Section 8 of PD 910 but not
controversy, several petitions were lodged before the Court similarly seeking that for the purpose of "financing energy resource development and exploitation
the "Pork Barrel System" be declared unconstitutional. To recount, the relevant programs and projects of the government under the same provision; and (d) setting
procedural antecedents in these cases are as follows: the consolidated cases for Oral Arguments on October 8, 2013.
On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President of the On September 23, 2013, the Office of the Solicitor General (OSG) filed a
Social Justice Society, filed a Petition for Prohibition of even date under Rule 65 of Consolidated Comment (Comment) of even date before the Court, seeking the
lifting, or in the alternative, the partial lifting with respect to educational and The prevailing rule in constitutional litigation is that no question involving the
medical assistance purposes, of the Courts September 10, 2013 TRO, and that the constitutionality or validity of a law or governmental act may be heard and decided
consolidated petitions be dismissed for lack of merit.113 by the Court unless there is compliance with the legal requisites for judicial
On September 24, 2013, the Court issued a Resolution of even date directing inquiry,117 namely: (a) there must be an actual case or controversy calling for the
petitioners to reply to the Comment. exercise of judicial power; (b) the person challenging the act must have the standing
Petitioners, with the exception of Nepomuceno, filed their respective replies to the to question the validity of the subject act or issuance; (c) the question of
Comment: (a) on September 30, 2013, Villegas filed a separate Reply dated constitutionality must be raised at the earliest opportunity ; and (d) the issue of
September 27, 2013 (Villegas Reply); (b) on October 1, 2013, Belgica, et al. filed a constitutionality must be the very lis mota of the case. 118 Of these requisites, case
Reply dated September 30, 2013 (Belgica Reply); and (c) on October 2, 2013, law states that the first two are the most important119 and, therefore, shall be
Alcantara filed a Reply dated October 1, 2013. discussed forthwith.
On October 1, 2013, the Court issued an Advisory providing for the guidelines to be A. Existence of an Actual Case or Controversy.
observed by the parties for the Oral Arguments scheduled on October 8, 2013. In By constitutional fiat, judicial power operates only when there is an actual case or
view of the technicality of the issues material to the present cases, incumbent controversy.120 This is embodied in Section 1, Article VIII of the 1987 Constitution
Solicitor General Francis H. Jardeleza (Solicitor General) was directed to bring with which pertinently states that "judicial power includes the duty of the courts of justice
him during the Oral Arguments representative/s from the DBM and Congress who to settle actual controversies involving rights which are legally demandable and
would be able to competently and completely answer questions related to, among enforceable x x x." Jurisprudence provides that an actual case or controversy is one
others, the budgeting process and its implementation. Further, the CoA Chairperson which "involves a conflict of legal rights, an assertion of opposite legal claims,
was appointed as amicus curiae and thereby requested to appear before the Court susceptible of judicial resolution as distinguished from a hypothetical or abstract
during the Oral Arguments. difference or dispute.121 In other words, "there must be a contrariety of legal rights
On October 8 and 10, 2013, the Oral Arguments were conducted. Thereafter, the that can be interpreted and enforced on the basis of existing law and
Court directed the parties to submit their respective memoranda within a period of jurisprudence."122 Related to the requirement of an actual case or controversy is the
seven (7) days, or until October 17, 2013, which the parties subsequently did. requirement of "ripeness," meaning that the questions raised for constitutional
The Issues Before the Court scrutiny are already ripe for adjudication. "A question is ripe for adjudication when
Based on the pleadings, and as refined during the Oral Arguments, the following are the act being challenged has had a direct adverse effect on the individual
the main issues for the Courts resolution: challenging it. It is a prerequisite that something had then been accomplished or
I. Procedural Issues. performed by either branch before a court may come into the picture, and the
Whether or not (a) the issues raised in the consolidated petitions involve an actual petitioner must allege the existence of an immediate or threatened injury to itself as
and justiciable controversy; (b) the issues raised in the consolidated petitions are a result of the challenged action."123 "Withal, courts will decline to pass upon
matters of policy not subject to judicial review; (c) petitioners have legal standing to constitutional issues through advisory opinions, bereft as they are of authority to
sue; and (d) the Courts Decision dated August 19, 1994 in G.R. Nos. 113105, resolve hypothetical or moot questions."124
113174, 113766, and 113888, entitled "Philippine Constitution Association v. Based on these principles, the Court finds that there exists an actual and justiciable
Enriquez"114 (Philconsa) and Decision dated April 24, 2012 in G.R. No. 164987, controversy in these cases.
entitled "Lawyers Against Monopoly and Poverty v. Secretary of Budget and The requirement of contrariety of legal rights is clearly satisfied by the antagonistic
Management"115 (LAMP) bar the re-litigatio n of the issue of constitutionality of the positions of the parties on the constitutionality of the "Pork Barrel System." Also, the
"Pork Barrel System" under the principles of res judicata and stare decisis. questions in these consolidated cases are ripe for adjudication since the challenged
II. Substantive Issues on the "Congressional Pork Barrel." funds and the provisions allowing for their utilization such as the 2013 GAA for the
Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws PDAF, PD 910 for the Malampaya Funds and PD 1869, as amended by PD 1993, for
similar thereto are unconstitutional considering that they violate the principles the Presidential Social Fund are currently existing and operational; hence, there
of/constitutional provisions on (a) separation of powers; (b) non-delegability of exists an immediate or threatened injury to petitioners as a result of the
legislative power; (c) checks and balances; (d) accountability; (e) political dynasties; unconstitutional use of these public funds.
and (f) local autonomy. As for the PDAF, the Court must dispel the notion that the issues related thereto had
III. Substantive Issues on the "Presidential Pork Barrel." been rendered moot and academic by the reforms undertaken by respondents. A
Whether or not the phrases (a) "and for such other purposes as may be hereafter case becomes moot when there is no more actual controversy between the parties
directed by the President" under Section 8 of PD 910,116 relating to the Malampaya or no useful purpose can be served in passing upon the merits.125 Differing from this
Funds, and (b) "to finance the priority infrastructure development projects and to description, the Court observes that respondents proposed line-item budgeting
finance the restoration of damaged or destroyed facilities due to calamities, as may scheme would not terminate the controversy nor diminish the useful purpose for its
be directed and authorized by the Office of the President of the Philippines" under resolution since said reform is geared towards the 2014 budget, and not the 2013
Section 12 of PD 1869, as amended by PD 1993, relating to the Presidential Social PDAF Article which, being a distinct subject matter, remains legally effective and
Fund, are unconstitutional insofar as they constitute undue delegations of legislative existing. Neither will the Presidents declaration that he had already "abolished the
power. PDAF" render the issues on PDAF moot precisely because the Executive branch of
These main issues shall be resolved in the order that they have been stated. In government has no constitutional authority to nullify or annul its legal existence. By
addition, the Court shall also tackle certain ancillary issues as prompted by the constitutional design, the annulment or nullification of a law may be done either by
present cases. Congress, through the passage of a repealing law, or by the Court, through a
The Courts Ruling declaration of unconstitutionality. Instructive on this point is the following exchange
The petitions are partly granted. between Associate Justice Antonio T. Carpio (Justice Carpio) and the Solicitor General
I. Procedural Issues. during the Oral Arguments:126
Justice Carpio: The President has taken an oath to faithfully execute the wherein the Court upheld the CoAs disallowance of irregularly disbursed PDAF
law,127 correct? Solicitor General Jardeleza: Yes, Your Honor. funds, it was emphasized that:
Justice Carpio: And so the President cannot refuse to implement the General The COA is endowed with enough latitude to determine, prevent, and disallow
Appropriations Act, correct? irregular, unnecessary, excessive, extravagant or unconscionable expenditures of
Solicitor General Jardeleza: Well, that is our answer, Your Honor. In the case, for government funds. It is tasked to be vigilant and conscientious in safeguarding the
example of the PDAF, the President has a duty to execute the laws but in the face of proper use of the government's, and ultimately the people's, property. The exercise
the outrage over PDAF, the President was saying, "I am not sure that I will continue of its general audit power is among the constitutional mechanisms that gives life to
the release of the soft projects," and that started, Your Honor. Now, whether or not the check and balance system inherent in our form of government.
that (interrupted) It is the general policy of the Court to sustain the decisions of administrative
Justice Carpio: Yeah. I will grant the President if there are anomalies in the project, authorities, especially one which is constitutionally-created, such as the CoA, not
he has the power to stop the releases in the meantime, to investigate, and that is only on the basis of the doctrine of separation of powers but also for their presumed
Section 38 of Chapter 5 of Book 6 of the Revised Administrative Code 128 x x x. So at expertise in the laws they are entrusted to enforce. Findings of administrative
most the President can suspend, now if the President believes that the PDAF is agencies are accorded not only respect but also finality when the decision and order
unconstitutional, can he just refuse to implement it? are not tainted with unfairness or arbitrariness that would amount to grave abuse of
Solicitor General Jardeleza: No, Your Honor, as we were trying to say in the specific discretion. It is only when the CoA has acted without or in excess of jurisdiction, or
case of the PDAF because of the CoA Report, because of the reported irregularities with grave abuse of discretion amounting to lack or excess of jurisdiction, that this
and this Court can take judicial notice, even outside, outside of the COA Report, you Court entertains a petition questioning its rulings. x x x. (Emphases supplied)
have the report of the whistle-blowers, the President was just exercising precisely Thus, if only for the purpose of validating the existence of an actual and justiciable
the duty . controversy in these cases, the Court deems the findings under the CoA Report to be
xxxx sufficient.
Justice Carpio: Yes, and that is correct. Youve seen the CoA Report, there are The Court also finds the third exception to be applicable largely due to the practical
anomalies, you stop and investigate, and prosecute, he has done that. But, does need for a definitive ruling on the systems constitutionality. As disclosed during the
that mean that PDAF has been repealed? Oral Arguments, the CoA Chairperson estimates that thousands of notices of
Solicitor General Jardeleza: No, Your Honor x x x. disallowances will be issued by her office in connection with the findings made in the
xxxx CoA Report. In this relation, Associate Justice Marvic Mario Victor F. Leonen (Justice
Justice Carpio: So that PDAF can be legally abolished only in two (2) cases. Congress Leonen) pointed out that all of these would eventually find their way to the
passes a law to repeal it, or this Court declares it unconstitutional, correct? courts.132 Accordingly, there is a compelling need to formulate controlling principles
Solictor General Jardeleza: Yes, Your Honor. relative to the issues raised herein in order to guide the bench, the bar, and the
Justice Carpio: The President has no power to legally abolish PDAF. (Emphases public, not just for the expeditious resolution of the anticipated disallowance cases,
supplied) but more importantly, so that the government may be guided on how public funds
Even on the assumption of mootness, jurisprudence, nevertheless, dictates that "the should be utilized in accordance with constitutional principles.
moot and academic principle is not a magical formula that can automatically Finally, the application of the fourth exception is called for by the recognition that
dissuade the Court in resolving a case." The Court will decide cases, otherwise moot, the preparation and passage of the national budget is, by constitutional imprimatur,
if: first, there is a grave violation of the Constitution; second, the exceptional an affair of annual occurrence.133 The relevance of the issues before the Court does
character of the situation and the paramount public interest is involved; third, when not cease with the passage of a "PDAF -free budget for 2014." 134 The evolution of the
the constitutional issue raised requires formulation of controlling principles to guide "Pork Barrel System," by its multifarious iterations throughout the course of history,
the bench, the bar, and the public; and fourth, the case is capable of repetition yet lends a semblance of truth to petitioners claim that "the same dog will just
evading review.129 resurface wearing a different collar."135 In Sanlakas v. Executive Secretary,136 the
The applicability of the first exception is clear from the fundamental posture of government had already backtracked on a previous course of action yet the Court
petitioners they essentially allege grave violations of the Constitution with respect used the "capable of repetition but evading review" exception in order "to prevent
to, inter alia, the principles of separation of powers, non-delegability of legislative similar questions from re- emerging."137The situation similarly holds true to these
power, checks and balances, accountability and local autonomy. cases. Indeed, the myriad of issues underlying the manner in which certain public
The applicability of the second exception is also apparent from the nature of the funds are spent, if not resolved at this most opportune time, are capable of
interests involved repetition and hence, must not evade judicial review.
the constitutionality of the very system within which significant amounts of public B. Matters of Policy: the Political Question Doctrine.
funds have been and continue to be utilized and expended undoubtedly presents a The "limitation on the power of judicial review to actual cases and controversies
situation of exceptional character as well as a matter of paramount public interest. carries the assurance that "the courts will not intrude into areas committed to the
The present petitions, in fact, have been lodged at a time when the systems flaws other branches of government."138 Essentially, the foregoing limitation is a
have never before been magnified. To the Courts mind, the coalescence of the CoA restatement of the political question doctrine which, under the classic formulation of
Report, the accounts of numerous whistle-blowers, and the governments own Baker v. Carr,139applies when there is found, among others, "a textually
recognition that reforms are needed "to address the reported abuses of the demonstrable constitutional commitment of the issue to a coordinate political
PDAF"130 demonstrates a prima facie pattern of abuse which only underscores the department," "a lack of judicially discoverable and manageable standards for
importance of the matter. It is also by this finding that the Court finds petitioners resolving it" or "the impossibility of deciding without an initial policy determination
claims as not merely theorized, speculative or hypothetical. Of note is the weight of a kind clearly for non- judicial discretion." Cast against this light, respondents
accorded by the Court to the findings made by the CoA which is the constitutionally- submit that the "the political branches are in the best position not only to perform
mandated audit arm of the government. In Delos Santos v. CoA, 131 a recent case budget-related reforms but also to do them in response to the specific demands of
their constituents" and, as such, "urge the Court not to impose a solution at this Petitioners have come before the Court in their respective capacities as citizen-
stage."140 taxpayers and accordingly, assert that they "dutifully contribute to the coffers of the
The Court must deny respondents submission. National Treasury."146 Clearly, as taxpayers, they possess the requisite standing to
Suffice it to state that the issues raised before the Court do not present political but question the validity of the existing "Pork Barrel System" under which the taxes they
legal questions which are within its province to resolve. A political question refers to pay have been and continue to be utilized. It is undeniable that petitioners, as
"those questions which, under the Constitution, are to be decided by the people in taxpayers, are bound to suffer from the unconstitutional usage of public funds, if the
their sovereign capacity, or in regard to which full discretionary authority has been Court so rules. Invariably, taxpayers have been allowed to sue where there is a claim
delegated to the Legislature or executive branch of the Government. It is concerned that public funds are illegally disbursed or that public money is being deflected to
with issues dependent upon the wisdom, not legality, of a particular any improper purpose, or that public funds are wasted through the enforcement of
measure."141 The intrinsic constitutionality of the "Pork Barrel System" is not an issue an invalid or unconstitutional law,147 as in these cases.
dependent upon the wisdom of the political branches of government but rather a Moreover, as citizens, petitioners have equally fulfilled the standing requirement
legal one which the Constitution itself has commanded the Court to act upon. given that the issues they have raised may be classified as matters "of
Scrutinizing the contours of the system along constitutional lines is a task that the transcendental importance, of overreaching significance to society, or of paramount
political branches of government are incapable of rendering precisely because it is public interest."148 The CoA Chairpersons statement during the Oral Arguments that
an exercise of judicial power. More importantly, the present Constitution has not only the present controversy involves "not merely a systems failure" but a "complete
vested the Judiciary the right to exercise judicial power but essentially makes it a breakdown of controls"149 amplifies, in addition to the matters above-discussed, the
duty to proceed therewith. Section 1, Article VIII of the 1987 Constitution cannot be seriousness of the issues involved herein. Indeed, of greater import than the
any clearer: "The judicial power shall be vested in one Supreme Court and in such damage caused by the illegal expenditure of public funds is the mortal wound
lower courts as may be established by law. It includes the duty of the courts of inflicted upon the fundamental law by the enforcement of an invalid statute. 150 All
justice to settle actual controversies involving rights which are legally demandable told, petitioners have sufficient locus standi to file the instant cases.
and enforceable, and to determine whether or not there has been a grave abuse of D. Res Judicata and Stare Decisis.
discretion amounting to lack or excess of jurisdiction on the part of any branch or Res judicata (which means a "matter adjudged") and stare decisis non quieta et
instrumentality of the Government." In Estrada v. Desierto,142 the expanded concept movere (or simply, stare decisis which means "follow past precedents and do not
of judicial power under the 1987 Constitution and its effect on the political question disturb what has been settled") are general procedural law principles which both
doctrine was explained as follows:143 deal with the effects of previous but factually similar dispositions to subsequent
To a great degree, the 1987 Constitution has narrowed the reach of the political cases. For the cases at bar, the Court examines the applicability of these principles
question doctrine when it expanded the power of judicial review of this court not in relation to its prior rulings in Philconsa and LAMP.
only to settle actual controversies involving rights which are legally demandable and The focal point of res judicata is the judgment. The principle states that a judgment
enforceable but also to determine whether or not there has been a grave abuse of on the merits in a previous case rendered by a court of competent jurisdiction would
discretion amounting to lack or excess of jurisdiction on the part of any branch or bind a subsequent case if, between the first and second actions, there exists an
instrumentality of government. Heretofore, the judiciary has focused on the "thou identity of parties, of subject matter, and of causes of action. 151 This required
shalt not's" of the Constitution directed against the exercise of its jurisdiction. With identity is not, however, attendant hereto since Philconsa and LAMP, respectively
the new provision, however, courts are given a greater prerogative to determine involved constitutional challenges against the 1994 CDF Article and 2004 PDAF
what it can do to prevent grave abuse of discretion amounting to lack or excess of Article, whereas the cases at bar call for a broader constitutional scrutiny of the
jurisdiction on the part of any branch or instrumentality of government. Clearly, the entire "Pork Barrel System." Also, the ruling in LAMP is essentially a dismissal based
new provision did not just grant the Court power of doing nothing. x x x (Emphases on a procedural technicality and, thus, hardly a judgment on the merits in that
supplied) petitioners therein failed to present any "convincing proof x x x showing that,
It must also be borne in mind that when the judiciary mediates to allocate indeed, there were direct releases of funds to the Members of Congress, who
constitutional boundaries, it does not assert any superiority over the other actually spend them according to their sole discretion" or "pertinent evidentiary
departments; does not in reality nullify or invalidate an act of the legislature or the support to demonstrate the illegal misuse of PDAF in the form of kickbacks and has
executive, but only asserts the solemn and sacred obligation assigned to it by the become a common exercise of unscrupulous Members of Congress." As such, the
Constitution."144 To a great extent, the Court is laudably cognizant of the reforms Court up held, in view of the presumption of constitutionality accorded to every law,
undertaken by its co-equal branches of government. But it is by constitutional force the 2004 PDAF Article, and saw "no need to review or reverse the standing
that the Court must faithfully perform its duty. Ultimately, it is the Courts avowed pronouncements in the said case." Hence, for the foregoing reasons, the res judicata
intention that a resolution of these cases would not arrest or in any manner impede principle, insofar as the Philconsa and LAMP cases are concerned, cannot apply.
the endeavors of the two other branches but, in fact, help ensure that the pillars of On the other hand, the focal point of stare decisis is the doctrine created. The
change are erected on firm constitutional grounds. After all, it is in the best interest principle, entrenched under Article 8152 of the Civil Code, evokes the general rule
of the people that each great branch of government, within its own sphere, that, for the sake of certainty, a conclusion reached in one case should be doctrinally
contributes its share towards achieving a holistic and genuine solution to the applied to those that follow if the facts are substantially the same, even though the
problems of society. For all these reasons, the Court cannot heed respondents plea parties may be different. It proceeds from the first principle of justice that, absent
for judicial restraint. any powerful countervailing considerations, like cases ought to be decided alike.
C. Locus Standi. Thus, where the same questions relating to the same event have been put forward
"The gist of the question of standing is whether a party alleges such personal stake by the parties similarly situated as in a previous case litigated and decided by a
in the outcome of the controversy as to assure that concrete adverseness which competent court, the rule of stare decisis is a bar to any attempt to re-litigate the
sharpens the presentation of issues upon which the court depends for illumination of same issue.153
difficult constitutional questions. Unless a person is injuriously affected in any of his Philconsa was the first case where a constitutional challenge against a Pork Barrel
constitutional rights by the operation of statute or ordinance, he has no standing." 145 provision, i.e., the 1994 CDF Article, was resolved by the Court. To properly
understand its context, petitioners posturing was that "the power given to the A. Definition of Terms.
Members of Congress to propose and identify projects and activities to be funded by Before the Court proceeds to resolve the substantive issues of these cases, it must
the CDF is an encroachment by the legislature on executive power, since said power first define the terms "Pork Barrel System," "Congressional Pork Barrel," and
in an appropriation act is in implementation of the law" and that "the proposal and "Presidential Pork Barrel" as they are essential to the ensuing discourse.
identification of the projects do not involve the making of laws or the repeal and Petitioners define the term "Pork Barrel System" as the "collusion between the
amendment thereof, the only function given to the Congress by the Legislative and Executive branches of government to accumulate lump-sum public
Constitution."154 In deference to the foregoing submissions, the Court reached the funds in their offices with unchecked discretionary powers to determine its
following main conclusions: one, under the Constitution, the power of appropriation, distribution as political largesse." 156 They assert that the following elements make up
or the "power of the purse," belongs to Congress; two, the power of appropriation the Pork Barrel System: (a) lump-sum funds are allocated through the appropriations
carries with it the power to specify the project or activity to be funded under the process to an individual officer; (b) the officer is given sole and broad discretion in
appropriation law and it can be detailed and as broad as Congress wants it to be; determining how the funds will be used or expended; (c) the guidelines on how to
and, three, the proposals and identifications made by Members of Congress are spend or use the funds in the appropriation are either vague, overbroad or
merely recommendatory. At once, it is apparent that the Philconsa resolution was a inexistent; and (d) projects funded are intended to benefit a definite constituency in
limited response to a separation of powers problem, specifically on the propriety of a particular part of the country and to help the political careers of the disbursing
conferring post-enactment identification authority to Members of Congress. On the official by yielding rich patronage benefits.157 They further state that the Pork Barrel
contrary, the present cases call for a more holistic examination of (a) the inter- System is comprised of two (2) kinds of discretionary public funds: first, the
relation between the CDF and PDAF Articles with each other, formative as they are Congressional (or Legislative) Pork Barrel, currently known as the PDAF; 158 and,
of the entire "Pork Barrel System" as well as (b) the intra-relation of post-enactment second, the Presidential (or Executive) Pork Barrel, specifically, the Malampaya
measures contained within a particular CDF or PDAF Article, including not only those Funds under PD 910 and the Presidential Social Fund under PD 1869, as amended by
related to the area of project identification but also to the areas of fund release and PD 1993.159
realignment. The complexity of the issues and the broader legal analyses herein Considering petitioners submission and in reference to its local concept and legal
warranted may be, therefore, considered as a powerful countervailing reason history, the Court defines the Pork Barrel System as the collective body of rules and
against a wholesale application of the stare decisis principle. practices that govern the manner by which lump-sum, discretionary funds, primarily
In addition, the Court observes that the Philconsa ruling was actually riddled with intended for local projects, are utilized through the respective participations of the
inherent constitutional inconsistencies which similarly countervail against a full Legislative and Executive branches of government, including its members. The Pork
resort to stare decisis. As may be deduced from the main conclusions of the case, Barrel System involves two (2) kinds of lump-sum discretionary funds:
Philconsas fundamental premise in allowing Members of Congress to propose and First, there is the Congressional Pork Barrel which is herein defined as a kind of
identify of projects would be that the said identification authority is but an aspect of lump-sum, discretionary fund wherein legislators, either individually or collectively
the power of appropriation which has been constitutionally lodged in Congress. From organized into committees, are able to effectively control certain aspects of the
this premise, the contradictions may be easily seen. If the authority to identify funds utilization through various post-enactment measures and/or practices. In
projects is an aspect of appropriation and the power of appropriation is a form of particular, petitioners consider the PDAF, as it appears under the 2013 GAA, as
legislative power thereby lodged in Congress, then it follows that: (a) it is Congress Congressional Pork Barrel since it is, inter alia, a post-enactment measure that
which should exercise such authority, and not its individual Members; (b) such allows individual legislators to wield a collective power;160 and
authority must be exercised within the prescribed procedure of law passage and, Second, there is the Presidential Pork Barrel which is herein defined as a kind of
hence, should not be exercised after the GAA has already been passed; and (c) such lump-sum, discretionary fund which allows the President to determine the manner of
authority, as embodied in the GAA, has the force of law and, hence, cannot be its utilization. For reasons earlier stated,161 the Court shall delimit the use of such
merely recommendatory. Justice Vitugs Concurring Opinion in the same case sums term to refer only to the Malampaya Funds and the Presidential Social Fund.
up the Philconsa quandary in this wise: "Neither would it be objectionable for With these definitions in mind, the Court shall now proceed to discuss the
Congress, by law, to appropriate funds for such specific projects as it may be substantive issues of these cases.
minded; to give that authority, however, to the individual members of Congress in B. Substantive Issues on the Congressional Pork Barrel.
whatever guise, I am afraid, would be constitutionally impermissible." As the Court 1. Separation of Powers.
now largely benefits from hindsight and current findings on the matter, among a. Statement of Principle.
others, the CoA Report, the Court must partially abandon its previous ruling in The principle of separation of powers refers to the constitutional demarcation of the
Philconsa insofar as it validated the post-enactment identification authority of three fundamental powers of government. In the celebrated words of Justice Laurel
Members of Congress on the guise that the same was merely recommendatory. This in Angara v. Electoral Commission,162 it means that the "Constitution has blocked out
postulate raises serious constitutional inconsistencies which cannot be simply with deft strokes and in bold lines, allotment of power to the executive, the
excused on the ground that such mechanism is "imaginative as it is innovative." legislative and the judicial departments of the government." 163 To the legislative
Moreover, it must be pointed out that the recent case of Abakada Guro Party List v. branch of government, through Congress,164 belongs the power to make laws; to the
Purisima155 (Abakada) has effectively overturned Philconsas allowance of post- executive branch of government, through the President,165belongs the power to
enactment legislator participation in view of the separation of powers principle. enforce laws; and to the judicial branch of government, through the Court, 166 belongs
These constitutional inconsistencies and the Abakada rule will be discussed in the power to interpret laws. Because the three great powers have been, by
greater detail in the ensuing section of this Decision. constitutional design, ordained in this respect, "each department of the government
As for LAMP, suffice it to restate that the said case was dismissed on a procedural has exclusive cognizance of matters within its jurisdiction, and is supreme within its
technicality and, hence, has not set any controlling doctrine susceptible of current own sphere."167 Thus, "the legislature has no authority to execute or construe the
application to the substantive issues in these cases. In fine, stare decisis would not law, the executive has no authority to make or construe the law, and the judiciary
apply. has no power to make or execute the law."168 The principle of separation of powers
II. Substantive Issues. and its concepts of autonomy and independence stem from the notion that the
powers of government must be divided to avoid concentration of these powers in (1) scrutiny based primarily on Congress power of appropriation and the budget
any one branch; the division, it is hoped, would avoid any single branch from lording hearings conducted in connection with it, its power to ask heads of departments to
its power over the other branches or the citizenry. 169 To achieve this purpose, the appear before and be heard by either of its Houses on any matter pertaining to their
divided power must be wielded by co-equal branches of government that are equally departments and its power of confirmation; and
capable of independent action in exercising their respective mandates. Lack of (2) investigation and monitoring of the implementation of laws pursuant to the
independence would result in the inability of one branch of government to check the power of Congress to conduct inquiries in aid of legislation.
arbitrary or self-interest assertions of another or others.170 Any action or step beyond that will undermine the separation of powers guaranteed
Broadly speaking, there is a violation of the separation of powers principle when one by the Constitution. (Emphases supplied)
branch of government unduly encroaches on the domain of another. US Supreme b. Application.
Court decisions instruct that the principle of separation of powers may be violated in In these cases, petitioners submit that the Congressional Pork Barrel among
two (2) ways: firstly, "one branch may interfere impermissibly with the others others, the 2013 PDAF Article "wrecks the assignment of responsibilities between
performance of its constitutionally assigned function";171 and "alternatively, the the political branches" as it is designed to allow individual legislators to interfere
doctrine may be violated when one branch assumes a function that more properly is "way past the time it should have ceased" or, particularly, "after the GAA is
entrusted to another."172 In other words, there is a violation of the principle when passed."179 They state that the findings and recommendations in the CoA Report
there is impermissible (a) interference with and/or (b) assumption of another provide "an illustration of how absolute and definitive the power of legislators wield
departments functions. over project implementation in complete violation of the constitutional principle of
The enforcement of the national budget, as primarily contained in the GAA, is separation of powers."180 Further, they point out that the Court in the Philconsa case
indisputably a function both constitutionally assigned and properly entrusted to the only allowed the CDF to exist on the condition that individual legislators limited their
Executive branch of government. In Guingona, Jr. v. Hon. Carague 173 (Guingona, Jr.), role to recommending projects and not if they actually dictate their
the Court explained that the phase of budget execution "covers the various implementation.181
operational aspects of budgeting" and accordingly includes "the evaluation of work For their part, respondents counter that the separations of powers principle has not
and financial plans for individual activities," the "regulation and release of funds" as been violated since the President maintains "ultimate authority to control the
well as all "other related activities" that comprise the budget execution cycle. 174 This execution of the GAA and that he "retains the final discretion to reject" the
is rooted in the principle that the allocation of power in the three principal branches legislators proposals.182 They maintain that the Court, in Philconsa, "upheld the
of government is a grant of all powers inherent in them. 175 Thus, unless the constitutionality of the power of members of Congress to propose and identify
Constitution provides otherwise, the Executive department should exclusively projects so long as such proposal and identification are recommendatory." 183 As
exercise all roles and prerogatives which go into the implementation of the national such, they claim that "everything in the Special Provisions [of the 2013 PDAF Article
budget as provided under the GAA as well as any other appropriation law. follows the Philconsa framework, and hence, remains constitutional." 184
In view of the foregoing, the Legislative branch of government, much more any of its The Court rules in favor of petitioners.
members, should not cross over the field of implementing the national budget since, As may be observed from its legal history, the defining feature of all forms of
as earlier stated, the same is properly the domain of the Executive. Again, in Congressional Pork Barrel would be the authority of legislators to participate in the
Guingona, Jr., the Court stated that "Congress enters the picture when it deliberates post-enactment phases of project implementation.
or acts on the budget proposals of the President. Thereafter, Congress, "in the At its core, legislators may it be through project lists,185 prior consultations186 or
exercise of its own judgment and wisdom, formulates an appropriation act precisely program menus187 have been consistently accorded post-enactment authority to
following the process established by the Constitution, which specifies that no money identify the projects they desire to be funded through various Congressional Pork
may be paid from the Treasury except in accordance with an appropriation made by Barrel allocations. Under the 2013 PDAF Article, the statutory authority of legislators
law." Upon approval and passage of the GAA, Congress law -making role necessarily to identify projects post-GAA may be construed from the import of Special Provisions
comes to an end and from there the Executives role of implementing the national 1 to 3 as well as the second paragraph of Special Provision 4. To elucidate, Special
budget begins. So as not to blur the constitutional boundaries between them, Provision 1 embodies the program menu feature which, as evinced from past PDAF
Congress must "not concern it self with details for implementation by the Articles, allows individual legislators to identify PDAF projects for as long as the
Executive."176 identified project falls under a general program listed in the said menu. Relatedly,
The foregoing cardinal postulates were definitively enunciated in Abakada where the Special Provision 2 provides that the implementing agencies shall, within 90 days
Court held that "from the moment the law becomes effective, any provision of law from the GAA is passed, submit to Congress a more detailed priority list, standard or
that empowers Congress or any of its members to play any role in the design prepared and submitted by implementing agencies from which the legislator
implementation or enforcement of the law violates the principle of separation of may make his choice. The same provision further authorizes legislators to identify
powers and is thus unconstitutional."177 It must be clarified, however, that since the PDAF projects outside his district for as long as the representative of the district
restriction only pertains to "any role in the implementation or enforcement of the concerned concurs in writing. Meanwhile, Special Provision 3 clarifies that PDAF
law," Congress may still exercise its oversight function which is a mechanism of projects refer to "projects to be identified by legislators" 188 and thereunder provides
checks and balances that the Constitution itself allows. But it must be made clear the allocation limit for the total amount of projects identified by each legislator.
that Congress role must be confined to mere oversight. Any post-enactment- Finally, paragraph 2 of Special Provision 4 requires that any modification and
measure allowing legislator participation beyond oversight is bereft of any revision of the project identification "shall be submitted to the House Committee on
constitutional basis and hence, tantamount to impermissible interference and/or Appropriations and the Senate Committee on Finance for favorable endorsement to
assumption of executive functions. As the Court ruled in Abakada: 178 the DBM or the implementing agency, as the case may be." From the foregoing
Any post-enactment congressional measure x x x should be limited to scrutiny and special provisions, it cannot be seriously doubted that legislators have been
investigation.1wphi1 In particular, congressional oversight must be confined to the accorded post-enactment authority to identify PDAF projects.
following: Aside from the area of project identification, legislators have also been accorded
post-enactment authority in the areas of fund release and realignment. Under the
2013 PDAF Article, the statutory authority of legislators to participate in the area of Solicitor General Jardeleza: I do not know, Your Honor; I do not think so but I have no
fund release through congressional committees is contained in Special Provision 5 specific examples. I would doubt very much, Your Honor, because to implement,
which explicitly states that "all request for release of funds shall be supported by the there is a need for a SARO and the NCA. And the SARO and the NCA are triggered by
documents prescribed under Special Provision No. 1 and favorably endorsed by an identification from the legislator.
House Committee on Appropriations and the Senate Committee on Finance, as the xxxx
case may be"; while their statutory authority to participate in the area of fund Solictor General Jardeleza: What we mean by mandatory, Your Honor, is we were
realignment is contained in: first , paragraph 2, Special Provision 4 189 which explicitly replying to a question, "How can a legislator make sure that he is able to get PDAF
state s, among others, that "any realignment of funds shall be submitted to the Funds?" It is mandatory in the sense that he must identify, in that sense, Your Honor.
House Committee on Appropriations and the Senate Committee on Finance for Otherwise, if he does not identify, he cannot avail of the PDAF Funds and his district
favorable endorsement to the DBM or the implementing agency, as the case may would not be able to have PDAF Funds, only in that sense, Your Honor. (Emphases
be ; and, second , paragraph 1, also of Special Provision 4 which authorizes the supplied)
"Secretaries of Agriculture, Education, Energy, Interior and Local Government, Labor Thus, for all the foregoing reasons, the Court hereby declares the 2013 PDAF Article
and Employment, Public Works and Highways, Social Welfare and Development and as well as all other provisions of law which similarly allow legislators to wield any
Trade and Industry190 x x x to approve realignment from one project/scope to another form of post-enactment authority in the implementation or enforcement of the
within the allotment received from this Fund, subject to among others (iii) the budget, unrelated to congressional oversight, as violative of the separation of
request is with the concurrence of the legislator concerned." powers principle and thus unconstitutional. Corollary thereto, informal practices,
Clearly, these post-enactment measures which govern the areas of project through which legislators have effectively intruded into the proper phases of budget
identification, fund release and fund realignment are not related to functions of execution, must be deemed as acts of grave abuse of discretion amounting to lack
congressional oversight and, hence, allow legislators to intervene and/or assume or excess of jurisdiction and, hence, accorded the same unconstitutional treatment.
duties that properly belong to the sphere of budget execution. Indeed, by virtue of That such informal practices do exist and have, in fact, been constantly observed
the foregoing, legislators have been, in one form or another, authorized to throughout the years has not been substantially disputed here. As pointed out by
participate in as Guingona, Jr. puts it "the various operational aspects of Chief Justice Maria Lourdes P.A. Sereno (Chief Justice Sereno) during the Oral
budgeting," including "the evaluation of work and financial plans for individual Arguments of these cases:193
activities" and the "regulation and release of funds" in violation of the separation of Chief Justice Sereno:
powers principle. The fundamental rule, as categorically articulated in Abakada, Now, from the responses of the representative of both, the DBM and two (2) Houses
cannot be overstated from the moment the law becomes effective, any provision of Congress, if we enforces the initial thought that I have, after I had seen the extent
of law that empowers Congress or any of its members to play any role in the of this research made by my staff, that neither the Executive nor Congress frontally
implementation or enforcement of the law violates the principle of separation of faced the question of constitutional compatibility of how they were engineering the
powers and is thus unconstitutional.191 That the said authority is treated as merely budget process. In fact, the words you have been using, as the three lawyers of the
recommendatory in nature does not alter its unconstitutional tenor since the DBM, and both Houses of Congress has also been using is surprise; surprised that all
prohibition, to repeat, covers any role in the implementation or enforcement of the of these things are now surfacing. In fact, I thought that what the 2013 PDAF
law. Towards this end, the Court must therefore abandon its ruling in Philconsa which provisions did was to codify in one section all the past practice that had been done
sanctioned the conduct of legislator identification on the guise that the same is since 1991. In a certain sense, we should be thankful that they are all now in the
merely recommendatory and, as such, respondents reliance on the same falters PDAF Special Provisions. x x x (Emphasis and underscoring supplied)
altogether. Ultimately, legislators cannot exercise powers which they do not have, whether
Besides, it must be pointed out that respondents have nonetheless failed to through formal measures written into the law or informal practices institutionalized
substantiate their position that the identification authority of legislators is only of in government agencies, else the Executive department be deprived of what the
recommendatory import. Quite the contrary, respondents through the statements Constitution has vested as its own.
of the Solicitor General during the Oral Arguments have admitted that the 2. Non-delegability of Legislative Power.
identification of the legislator constitutes a mandatory requirement before his PDAF a. Statement of Principle.
can be tapped as a funding source, thereby highlighting the indispensability of the As an adjunct to the separation of powers principle,194 legislative power shall be
said act to the entire budget execution process:192 exclusively exercised by the body to which the Constitution has conferred the same.
Justice Bernabe: Now, without the individual legislators identification of the project, In particular, Section 1, Article VI of the 1987 Constitution states that such power
can the PDAF of the legislator be utilized? shall be vested in the Congress of the Philippines which shall consist of a Senate and
Solicitor General Jardeleza: No, Your Honor. a House of Representatives, except to the extent reserved to the people by the
Justice Bernabe: It cannot? provision on initiative and referendum.195 Based on this provision, it is clear that only
Solicitor General Jardeleza: It cannot (interrupted) Congress, acting as a bicameral body, and the people, through the process of
Justice Bernabe: So meaning you should have the identification of the project by the initiative and referendum, may constitutionally wield legislative power and no other.
individual legislator? This premise embodies the principle of non-delegability of legislative power, and the
Solicitor General Jardeleza: Yes, Your Honor. only recognized exceptions thereto would be: (a) delegated legislative power to local
xxxx governments which, by immemorial practice, are allowed to legislate on purely local
Justice Bernabe: In short, the act of identification is mandatory? matters;196 and (b) constitutionally-grafted exceptions such as the authority of the
Solictor General Jardeleza: Yes, Your Honor. In the sense that if it is not done and President to, by law, exercise powers necessary and proper to carry out a declared
then there is no identification. national policy in times of war or other national emergency, 197 or fix within specified
xxxx limits, and subject to such limitations and restrictions as Congress may impose, tariff
Justice Bernabe: Now, would you know of specific instances when a project was rates, import and export quotas, tonnage and wharfage dues, and other duties or
implemented without the identification by the individual legislator?
imposts within the framework of the national development program of the (2) The President shall have the power to veto any particular item or items in an
Government.198 appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to
Notably, the principle of non-delegability should not be confused as a restriction to which he does not object.
delegate rule-making authority to implementing agencies for the limited purpose of The presentment of appropriation, revenue or tariff bills to the President, wherein he
either filling up the details of the law for its enforcement (supplementary rule- may exercise his power of item-veto, forms part of the "single, finely wrought and
making) or ascertaining facts to bring the law into actual operation (contingent rule- exhaustively considered, procedures" for law-passage as specified under the
making).199 The conceptual treatment and limitations of delegated rule-making were Constitution.204 As stated in Abakada, the final step in the law-making process is the
explained in the case of People v. Maceren200 as follows: "submission of the bill to the President for approval. Once approved, it takes effect
The grant of the rule-making power to administrative agencies is a relaxation of the as law after the required publication."205
principle of separation of powers and is an exception to the nondelegation of Elaborating on the Presidents item-veto power and its relevance as a check on the
legislative powers. Administrative regulations or "subordinate legislation" calculated legislature, the Court, in Bengzon, explained that:206
to promote the public interest are necessary because of "the growing complexity of The former Organic Act and the present Constitution of the Philippines make the
modern life, the multiplication of the subjects of governmental regulations, and the Chief Executive an integral part of the law-making power. His disapproval of a bill,
increased difficulty of administering the law." commonly known as a veto, is essentially a legislative act. The questions presented
xxxx to the mind of the Chief Executive are precisely the same as those the legislature
Nevertheless, it must be emphasized that the rule-making power must be confined must determine in passing a bill, except that his will be a broader point of view.
to details for regulating the mode or proceeding to carry into effect the law as it has The Constitution is a limitation upon the power of the legislative department of the
been enacted. The power cannot be extended to amending or expanding the government, but in this respect it is a grant of power to the executive department.
statutory requirements or to embrace matters not covered by the statute. Rules that The Legislature has the affirmative power to enact laws; the Chief Executive has the
subvert the statute cannot be sanctioned. (Emphases supplied) negative power by the constitutional exercise of which he may defeat the will of the
b. Application. Legislature. It follows that the Chief Executive must find his authority in the
In the cases at bar, the Court observes that the 2013 PDAF Article, insofar as it Constitution. But in exercising that authority he may not be confined to rules of strict
confers post-enactment identification authority to individual legislators, violates the construction or hampered by the unwise interference of the judiciary. The courts will
principle of non-delegability since said legislators are effectively allowed to indulge every intendment in favor of the constitutionality of a veto in the same
individually exercise the power of appropriation, which as settled in Philconsa is manner as they will presume the constitutionality of an act as originally passed by
lodged in Congress.201 That the power to appropriate must be exercised only through the Legislature. (Emphases supplied)
legislation is clear from Section 29(1), Article VI of the 1987 Constitution which The justification for the Presidents item-veto power rests on a variety of policy goals
states that: "No money shall be paid out of the Treasury except in pursuance of an such as to prevent log-rolling legislation,207 impose fiscal restrictions on the
appropriation made by law." To understand what constitutes an act of appropriation, legislature, as well as to fortify the executive branchs role in the budgetary
the Court, in Bengzon v. Secretary of Justice and Insular Auditor 202 (Bengzon), held process.208 In Immigration and Naturalization Service v. Chadha, the US Supreme
that the power of appropriation involves (a) the setting apart by law of a certain sum Court characterized the Presidents item-power as "a salutary check upon the
from the public revenue for (b) a specified purpose. Essentially, under the 2013 legislative body, calculated to guard the community against the effects of factions,
PDAF Article, individual legislators are given a personal lump-sum fund from which precipitancy, or of any impulse unfriendly to the public good, which may happen to
they are able to dictate (a) how much from such fund would go to (b) a specific influence a majority of that body"; phrased differently, it is meant to "increase the
project or beneficiary that they themselves also determine. As these two (2) acts chances in favor of the community against the passing of bad laws, through haste,
comprise the exercise of the power of appropriation as described in Bengzon, and inadvertence, or design."209
given that the 2013 PDAF Article authorizes individual legislators to perform the For the President to exercise his item-veto power, it necessarily follows that there
same, undoubtedly, said legislators have been conferred the power to legislate exists a proper "item" which may be the object of the veto. An item, as defined in
which the Constitution does not, however, allow. Thus, keeping with the principle of the field of appropriations, pertains to "the particulars, the details, the distinct and
non-delegability of legislative power, the Court hereby declares the 2013 PDAF severable parts of the appropriation or of the bill." In the case of Bengzon v.
Article, as well as all other forms of Congressional Pork Barrel which contain the Secretary of Justice of the Philippine Islands,210 the US Supreme Court characterized
similar legislative identification feature as herein discussed, as unconstitutional. an item of appropriation as follows:
3. Checks and Balances. An item of an appropriation bill obviously means an item which, in itself, is a specific
a. Statement of Principle; Item-Veto Power. appropriation of money, not some general provision of law which happens to be put
The fact that the three great powers of government are intended to be kept separate into an appropriation bill. (Emphases supplied)
and distinct does not mean that they are absolutely unrestrained and independent On this premise, it may be concluded that an appropriation bill, to ensure that the
of each other. The Constitution has also provided for an elaborate system of checks President may be able to exercise his power of item veto, must contain "specific
and balances to secure coordination in the workings of the various departments of appropriations of money" and not only "general provisions" which provide for
the government.203 parameters of appropriation.
A prime example of a constitutional check and balance would be the Presidents Further, it is significant to point out that an item of appropriation must be an item
power to veto an item written into an appropriation, revenue or tariff bill submitted characterized by singular correspondence meaning an allocation of a specified
to him by Congress for approval through a process known as "bill presentment." The singular amount for a specified singular purpose, otherwise known as a "line-
Presidents item-veto power is found in Section 27(2), Article VI of the 1987 item."211 This treatment not only allows the item to be consistent with its definition
Constitution which reads as follows: as a "specific appropriation of money" but also ensures that the President may
Sec. 27. x x x. discernibly veto the same. Based on the foregoing formulation, the existing Calamity
xxxx Fund, Contingent Fund and the Intelligence Fund, being appropriations which state a
specified amount for a specific purpose, would then be considered as "line- item"
appropriations which are rightfully subject to item veto. Likewise, it must be actual items of PDAF appropriation would not have been written into the General
observed that an appropriation may be validly apportioned into component Appropriations Bill and thus effectuated without veto consideration. This kind of
percentages or values; however, it is crucial that each percentage or value must be lump-sum/post-enactment legislative identification budgeting system fosters the
allocated for its own corresponding purpose for such component to be considered as creation of a budget within a budget" which subverts the prescribed procedure of
a proper line-item. Moreover, as Justice Carpio correctly pointed out, a valid presentment and consequently impairs the Presidents power of item veto. As
appropriation may even have several related purposes that are by accounting and petitioners aptly point out, the above-described system forces the President to
budgeting practice considered as one purpose, e.g., MOOE (maintenance and other decide between (a) accepting the entire P24.79 Billion PDAF allocation without
operating expenses), in which case the related purposes shall be deemed knowing the specific projects of the legislators, which may or may not be consistent
sufficiently specific for the exercise of the Presidents item veto power. Finally, with his national agenda and (b) rejecting the whole PDAF to the detriment of all
special purpose funds and discretionary funds would equally square with the other legislators with legitimate projects.215
constitutional mechanism of item-veto for as long as they follow the rule on singular Moreover, even without its post-enactment legislative identification feature, the
correspondence as herein discussed. Anent special purpose funds, it must be added 2013 PDAF Article would remain constitutionally flawed since it would then operate
that Section 25(4), Article VI of the 1987 Constitution requires that the "special as a prohibited form of lump-sum appropriation above-characterized. In particular,
appropriations bill shall specify the purpose for which it is intended, and shall be the lump-sum amount of P24.79 Billion would be treated as a mere funding source
supported by funds actually available as certified by the National Treasurer, or t o be allotted for multiple purposes of spending, i.e., scholarships, medical missions,
raised by a corresponding revenue proposal therein." Meanwhile, with respect to assistance to indigents, preservation of historical materials, construction of roads,
discretionary funds, Section 2 5(6), Article VI of the 1987 Constitution requires that flood control, etc. This setup connotes that the appropriation law leaves the actual
said funds "shall be disbursed only for public purposes to be supported by amounts and purposes of the appropriation for further determination and, therefore,
appropriate vouchers and subject to such guidelines as may be prescribed by law." does not readily indicate a discernible item which may be subject to the Presidents
In contrast, what beckons constitutional infirmity are appropriations which merely power of item veto.
provide for a singular lump-sum amount to be tapped as a source of funding for In fact, on the accountability side, the same lump-sum budgeting scheme has, as
multiple purposes. Since such appropriation type necessitates the further the CoA Chairperson relays, "limited state auditors from obtaining relevant data and
determination of both the actual amount to be expended and the actual purpose of information that would aid in more stringently auditing the utilization of said
the appropriation which must still be chosen from the multiple purposes stated in Funds."216 Accordingly, she recommends the adoption of a "line by line budget or
the law, it cannot be said that the appropriation law already indicates a "specific amount per proposed program, activity or project, and per implementing agency." 217
appropriation of money and hence, without a proper line-item which the President Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF Article,
may veto. As a practical result, the President would then be faced with the as well as all Congressional Pork Barrel Laws of similar operation, to be
predicament of either vetoing the entire appropriation if he finds some of its unconstitutional. That such budgeting system provides for a greater degree of
purposes wasteful or undesirable, or approving the entire appropriation so as not to flexibility to account for future contingencies cannot be an excuse to defeat what the
hinder some of its legitimate purposes. Finally, it may not be amiss to state that Constitution requires. Clearly, the first and essential truth of the matter is that
such arrangement also raises non-delegability issues considering that the unconstitutional means do not justify even commendable ends.218
implementing authority would still have to determine, again, both the actual amount c. Accountability.
to be expended and the actual purpose of the appropriation. Since the foregoing Petitioners further relate that the system under which various forms of
determinations constitute the integral aspects of the power to appropriate, the Congressional Pork Barrel operate defies public accountability as it renders Congress
implementing authority would, in effect, be exercising legislative prerogatives in incapable of checking itself or its Members. In particular, they point out that the
violation of the principle of non-delegability. Congressional Pork Barrel "gives each legislator a direct, financial interest in the
b. Application. smooth, speedy passing of the yearly budget" which turns them "from fiscalizers"
In these cases, petitioners claim that "in the current x x x system where the PDAF is into "financially-interested partners."219 They also claim that the system has an
a lump-sum appropriation, the legislators identification of the projects after the effect on re- election as "the PDAF excels in self-perpetuation of elective officials."
passage of the GAA denies the President the chance to veto that item later Finally, they add that the "PDAF impairs the power of impeachment" as such "funds
on."212 Accordingly, they submit that the "item veto power of the President mandates are indeed quite useful, to well, accelerate the decisions of senators." 220
that appropriations bills adopt line-item budgeting" and that "Congress cannot The Court agrees in part.
choose a mode of budgeting which effectively renders the constitutionally-given The aphorism forged under Section 1, Article XI of the 1987 Constitution, which
power of the President useless."213 states that "public office is a public trust," is an overarching reminder that every
On the other hand, respondents maintain that the text of the Constitution envisions instrumentality of government should exercise their official functions only in
a process which is intended to meet the demands of a modernizing economy and, as accordance with the principles of the Constitution which embodies the parameters of
such, lump-sum appropriations are essential to financially address situations which the peoples trust. The notion of a public trust connotes accountability, 221 hence, the
are barely foreseen when a GAA is enacted. They argue that the decision of the various mechanisms in the Constitution which are designed to exact accountability
Congress to create some lump-sum appropriations is constitutionally allowed and from public officers.
textually-grounded.214 Among others, an accountability mechanism with which the proper expenditure of
The Court agrees with petitioners. public funds may be checked is the power of congressional oversight. As mentioned
Under the 2013 PDAF Article, the amount of P24.79 Billion only appears as a in Abakada,222 congressional oversight may be performed either through: (a) scrutiny
collective allocation limit since the said amount would be further divided among based primarily on Congress power of appropriation and the budget hearings
individual legislators who would then receive personal lump-sum allocations and conducted in connection with it, its power to ask heads of departments to appear
could, after the GAA is passed, effectively appropriate PDAF funds based on their before and be heard by either of its Houses on any matter pertaining to their
own discretion. As these intermediate appropriations are made by legislators only departments and its power of confirmation;223 or (b) investigation and monitoring of
after the GAA is passed and hence, outside of the law, it necessarily means that the
the implementation of laws pursuant to the power of Congress to conduct inquiries In any event, the Court finds the above-stated argument on this score to be largely
in aid of legislation.224 speculative since it has not been properly demonstrated how the Pork Barrel System
The Court agrees with petitioners that certain features embedded in some forms of would be able to propagate political dynasties.
Congressional Pork Barrel, among others the 2013 PDAF Article, has an effect on 5. Local Autonomy.
congressional oversight. The fact that individual legislators are given post- The States policy on local autonomy is principally stated in Section 25, Article II and
enactment roles in the implementation of the budget makes it difficult for them to Sections 2 and 3, Article X of the 1987 Constitution which read as follows:
become disinterested "observers" when scrutinizing, investigating or monitoring the ARTICLE II
implementation of the appropriation law. To a certain extent, the conduct of Sec. 25. The State shall ensure the autonomy of local governments.
oversight would be tainted as said legislators, who are vested with post-enactment ARTICLE X
authority, would, in effect, be checking on activities in which they themselves Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
participate. Also, it must be pointed out that this very same concept of post- Sec. 3. The Congress shall enact a local government code which shall provide for a
enactment authorization runs afoul of Section 14, Article VI of the 1987 Constitution more responsive and accountable local government structure instituted through a
which provides that: system of decentralization with effective mechanisms of recall, initiative, and
Sec. 14. No Senator or Member of the House of Representatives may personally referendum, allocate among the different local government units their powers,
appear as counsel before any court of justice or before the Electoral Tribunals, or responsibilities, and resources, and provide for the qualifications, election,
quasi-judicial and other administrative bodies. Neither shall he, directly or indirectly, appointment and removal, term, salaries, powers and functions and duties of local
be interested financially in any contract with, or in any franchise or special privilege officials, and all other matters relating to the organization and operation of the local
granted by the Government, or any subdivision, agency, or instrumentality thereof, units.
including any government-owned or controlled corporation, or its subsidiary, during Pursuant thereto, Congress enacted RA 7160, 227 otherwise known as the "Local
his term of office. He shall not intervene in any matter before any office of the Government Code of 1991" (LGC), wherein the policy on local autonomy had been
Government for his pecuniary benefit or where he may be called upon to act on more specifically explicated as follows:
account of his office. (Emphasis supplied) Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that
Clearly, allowing legislators to intervene in the various phases of project the territorial and political subdivisions of the State shall enjoy genuine and
implementation a matter before another office of government renders them meaningful local autonomy to enable them to attain their fullest development as
susceptible to taking undue advantage of their own office. self-reliant communities and make them more effective partners in the attainment of
The Court, however, cannot completely agree that the same post-enactment national goals. Toward this end, the State shall provide for a more responsive and
authority and/or the individual legislators control of his PDAF per se would allow him accountable local government structure instituted through a system of
to perpetuate himself in office. Indeed, while the Congressional Pork Barrel and a decentralization whereby local government units shall be given more powers,
legislators use thereof may be linked to this area of interest, the use of his PDAF for authority, responsibilities, and resources. The process of decentralization shall
re-election purposes is a matter which must be analyzed based on particular facts proceed from the National Government to the local government units.
and on a case-to-case basis. xxxx
Finally, while the Court accounts for the possibility that the close operational (c) It is likewise the policy of the State to require all national agencies and offices to
proximity between legislators and the Executive department, through the formers conduct periodic consultations with appropriate local government units,
post-enactment participation, may affect the process of impeachment, this matter nongovernmental and peoples organizations, and other concerned sectors of the
largely borders on the domain of politics and does not strictly concern the Pork community before any project or program is implemented in their respective
Barrel Systems intrinsic constitutionality. As such, it is an improper subject of jurisdictions. (Emphases and underscoring supplied)
judicial assessment. The above-quoted provisions of the Constitution and the LGC reveal the policy of the
In sum, insofar as its post-enactment features dilute congressional oversight and State to empower local government units (LGUs) to develop and ultimately, become
violate Section 14, Article VI of the 1987 Constitution, thus impairing public self-sustaining and effective contributors to the national economy. As explained by
accountability, the 2013 PDAF Article and other forms of Congressional Pork Barrel of the Court in Philippine Gamefowl Commission v. Intermediate Appellate Court: 228
similar nature are deemed as unconstitutional. This is as good an occasion as any to stress the commitment of the Constitution to
4. Political Dynasties. the policy of local autonomy which is intended to provide the needed impetus and
One of the petitioners submits that the Pork Barrel System enables politicians who encouragement to the development of our local political subdivisions as "self -
are members of political dynasties to accumulate funds to perpetuate themselves in reliant communities." In the words of Jefferson, "Municipal corporations are the small
power, in contravention of Section 26, Article II of the 1987 Constitution 225 which republics from which the great one derives its strength." The vitalization of local
states that: governments will enable their inhabitants to fully exploit their resources and more
Sec. 26. The State shall guarantee equal access to opportunities for public service, important, imbue them with a deepened sense of involvement in public affairs as
and prohibit political dynasties as may be defined by law. (Emphasis and members of the body politic. This objective could be blunted by undue interference
underscoring supplied) by the national government in purely local affairs which are best resolved by the
At the outset, suffice it to state that the foregoing provision is considered as not self- officials and inhabitants of such political units. The decision we reach today
executing due to the qualifying phrase "as may be defined by law." In this respect, conforms not only to the letter of the pertinent laws but also to the spirit of the
said provision does not, by and of itself, provide a judicially enforceable Constitution.229 (Emphases and underscoring supplied)
constitutional right but merely specifies guideline for legislative or executive In the cases at bar, petitioners contend that the Congressional Pork Barrel goes
action.226Therefore, since there appears to be no standing law which crystallizes the against the constitutional principles on local autonomy since it allows district
policy on political dynasties for enforcement, the Court must defer from ruling on representatives, who are national officers, to substitute their judgments in utilizing
this issue. public funds for local development.230 The Court agrees with petitioners.
Philconsa described the 1994 CDF as an attempt "to make equal the unequal" and National Treasury. Petitioners submit that Section 8 of PD 910 is not an appropriation
that "it is also a recognition that individual members of Congress, far more than the law since the "primary and specific purpose of PD 910 is the creation of an Energy
President and their congressional colleagues, are likely to be knowledgeable about Development Board and Section 8 thereof only created a Special Fund incidental
the needs of their respective constituents and the priority to be given each thereto.237 In similar regard, petitioners argue that Section 12 of PD 1869 is neither a
project."231Drawing strength from this pronouncement, previous legislators justified valid appropriations law since the allocation of the Presidential Social Fund is merely
its existence by stating that "the relatively small projects implemented under the incidental to the "primary and specific" purpose of PD 1869 which is the amendment
Congressional Pork Barrel complement and link the national development goals to of the Franchise and Powers of PAGCOR.238 In view of the foregoing, petitioners
the countryside and grassroots as well as to depressed areas which are overlooked suppose that such funds are being used without any valid law allowing for their
by central agencies which are preoccupied with mega-projects. 232 Similarly, in his proper appropriation in violation of Section 29(1), Article VI of the 1987 Constitution
August 23, 2013 speech on the "abolition" of PDAF and budgetary reforms, President which states that: "No money shall be paid out of the Treasury except in pursuance
Aquino mentioned that the Congressional Pork Barrel was originally established for a of an appropriation made by law."239
worthy goal, which is to enable the representatives to identify projects for The Court disagrees.
communities that the LGU concerned cannot afford. 233 "An appropriation made by law under the contemplation of Section 29(1), Article VI
Notwithstanding these declarations, the Court, however, finds an inherent defect in of the 1987 Constitution exists when a provision of law (a) sets apart a determinate
the system which actually belies the avowed intention of "making equal the or determinable240 amount of money and (b) allocates the same for a particular
unequal." In particular, the Court observes that the gauge of PDAF and CDF public purpose. These two minimum designations of amount and purpose stem from
allocation/division is based solely on the fact of office, without taking into account the very definition of the word "appropriation," which means "to allot, assign, set
the specific interests and peculiarities of the district the legislator represents. In this apart or apply to a particular use or purpose," and hence, if written into the law,
regard, the allocation/division limits are clearly not based on genuine parameters of demonstrate that the legislative intent to appropriate exists. As the Constitution
equality, wherein economic or geographic indicators have been taken into "does not provide or prescribe any particular form of words or religious recitals in
consideration. As a result, a district representative of a highly-urbanized metropolis which an authorization or appropriation by Congress shall be made, except that it be
gets the same amount of funding as a district representative of a far-flung rural made by law," an appropriation law may according to Philconsa be "detailed
province which would be relatively "underdeveloped" compared to the former. To and as broad as Congress wants it to be" for as long as the intent to appropriate
add, what rouses graver scrutiny is that even Senators and Party-List may be gleaned from the same. As held in the case of Guingona, Jr.: 241
Representatives and in some years, even the Vice-President who do not There is no provision in our Constitution that provides or prescribes any particular
represent any locality, receive funding from the Congressional Pork Barrel as well. form of words or religious recitals in which an authorization or appropriation by
These certainly are anathema to the Congressional Pork Barrels original intent Congress shall be made, except that it be "made by law," such as precisely the
which is "to make equal the unequal." Ultimately, the PDAF and CDF had become authorization or appropriation under the questioned presidential decrees. In other
personal funds under the effective control of each legislator and given unto them on words, in terms of time horizons, an appropriation may be made impliedly (as by
the sole account of their office. past but subsisting legislations) as well as expressly for the current fiscal year (as by
The Court also observes that this concept of legislator control underlying the CDF enactment of laws by the present Congress), just as said appropriation may be made
and PDAF conflicts with the functions of the various Local Development Councils in general as well as in specific terms. The Congressional authorization may be
(LDCs) which are already legally mandated to "assist the corresponding sanggunian embodied in annual laws, such as a general appropriations act or in special
in setting the direction of economic and social development, and coordinating provisions of laws of general or special application which appropriate public funds
development efforts within its territorial jurisdiction."234 Considering that LDCs are for specific public purposes, such as the questioned decrees. An appropriation
instrumentalities whose functions are essentially geared towards managing local measure is sufficient if the legislative intention clearly and certainly appears from
affairs,235 their programs, policies and resolutions should not be overridden nor the language employed (In re Continuing Appropriations, 32 P. 272), whether in the
duplicated by individual legislators, who are national officers that have no law- past or in the present. (Emphases and underscoring supplied)
making authority except only when acting as a body. The undermining effect on local Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave: 242
autonomy caused by the post-enactment authority conferred to the latter was To constitute an appropriation there must be money placed in a fund applicable to
succinctly put by petitioners in the following wise:236 the designated purpose. The word appropriate means to allot, assign, set apart or
With PDAF, a Congressman can simply bypass the local development council and apply to a particular use or purpose. An appropriation in the sense of the
initiate projects on his own, and even take sole credit for its execution. Indeed, this constitution means the setting apart a portion of the public funds for a public
type of personality-driven project identification has not only contributed little to the purpose. No particular form of words is necessary for the purpose, if the intention to
overall development of the district, but has even contributed to "further weakening appropriate is plainly manifested. (Emphases supplied)
infrastructure planning and coordination efforts of the government." Thus, based on the foregoing, the Court cannot sustain the argument that the
Thus, insofar as individual legislators are authorized to intervene in purely local appropriation must be the "primary and specific" purpose of the law in order for a
matters and thereby subvert genuine local autonomy, the 2013 PDAF Article as well valid appropriation law to exist. To reiterate, if a legal provision designates a
as all other similar forms of Congressional Pork Barrel is deemed unconstitutional. determinate or determinable amount of money and allocates the same for a
With this final issue on the Congressional Pork Barrel resolved, the Court now turns particular public purpose, then the legislative intent to appropriate becomes
to the substantive issues involving the Presidential Pork Barrel. apparent and, hence, already sufficient to satisfy the requirement of an
C. Substantive Issues on the Presidential Pork Barrel. "appropriation made by law" under contemplation of the Constitution.
1. Validity of Appropriation. Section 8 of PD 910 pertinently provides:
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, Section 8. Appropriations. x x x
amended by PD 1993), which respectively provide for the Malampaya Funds and the All fees, revenues and receipts of the Board from any and all sources including
Presidential Social Fund, as invalid appropriations laws since they do not have the receipts from service contracts and agreements such as application and processing
"primary and specific" purpose of authorizing the release of public funds from the fees, signature bonus, discovery bonus, production bonus; all money collected from
concessionaires, representing unspent work obligations, fines and penalties under must contain adequate legislative guidelines if the same law delegates rule-making
the Petroleum Act of 1949; as well as the government share representing royalties, authority to the Executive245 either for the purpose of (a) filling up the details of the
rentals, production share on service contracts and similar payments on the law for its enforcement, known as supplementary rule-making, or (b) ascertaining
exploration, development and exploitation of energy resources, shall form part of a facts to bring the law into actual operation, referred to as contingent rule-
Special Fund to be used to finance energy resource development and exploitation making.246 There are two (2) fundamental tests to ensure that the legislative
programs and projects of the government and for such other purposes as may be guidelines for delegated rule-making are indeed adequate. The first test is called the
hereafter directed by the President. (Emphases supplied) "completeness test." Case law states that a law is complete when it sets forth
Whereas Section 12 of PD 1869, as amended by PD 1993, reads: therein the policy to be executed, carried out, or implemented by the delegate. On
Sec. 12. Special Condition of Franchise. After deducting five (5%) percent as the other hand, the second test is called the "sufficient standard test." Jurisprudence
Franchise Tax, the Fifty (50%) percent share of the Government in the aggregate holds that a law lays down a sufficient standard when it provides adequate
gross earnings of the Corporation from this Franchise, or 60% if the aggregate gross guidelines or limitations in the law to map out the boundaries of the delegates
earnings be less than P150,000,000.00 shall be set aside and shall accrue to the authority and prevent the delegation from running riot. 247To be sufficient, the
General Fund to finance the priority infrastructure development projects and to standard must specify the limits of the delegates authority, announce the legislative
finance the restoration of damaged or destroyed facilities due to calamities, as may policy, and identify the conditions under which it is to be implemented. 248
be directed and authorized by the Office of the President of the Philippines. In view of the foregoing, the Court agrees with petitioners that the phrase "and for
(Emphases supplied) such other purposes as may be hereafter directed by the President" under Section 8
Analyzing the legal text vis--vis the above-mentioned principles, it may then be of PD 910 constitutes an undue delegation of legislative power insofar as it does not
concluded that (a) Section 8 of PD 910, which creates a Special Fund comprised of lay down a sufficient standard to adequately determine the limits of the Presidents
"all fees, revenues, and receipts of the Energy Development Board from any and all authority with respect to the purpose for which the Malampaya Funds may be used.
sources" (a determinable amount) "to be used to finance energy resource As it reads, the said phrase gives the President wide latitude to use the Malampaya
development and exploitation programs and projects of the government and for Funds for any other purpose he may direct and, in effect, allows him to unilaterally
such other purposes as may be hereafter directed by the President" (a specified appropriate public funds beyond the purview of the law. That the subject phrase may
public purpose), and (b) Section 12 of PD 1869, as amended by PD 1993, which be confined only to "energy resource development and exploitation programs and
similarly sets aside, "after deducting five (5%) percent as Franchise Tax, the Fifty projects of the government" under the principle of ejusdem generis, meaning that
(50%) percent share of the Government in the aggregate gross earnings of PAGCOR, the general word or phrase is to be construed to include or be restricted to things
or 60%, if the aggregate gross earnings be less than P150,000,000.00" (also a akin to, resembling, or of the same kind or class as those specifically
determinable amount) "to finance the priority infrastructure development projects mentioned,249 is belied by three (3) reasons: first, the phrase "energy resource
and x x x the restoration of damaged or destroyed facilities due to calamities, as development and exploitation programs and projects of the government" states a
may be directed and authorized by the Office of the President of the Philippines" singular and general class and hence, cannot be treated as a statutory reference of
(also a specified public purpose), are legal appropriations under Section 29(1), specific things from which the general phrase "for such other purposes" may be
Article VI of the 1987 Constitution. limited; second, the said phrase also exhausts the class it represents, namely energy
In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly development programs of the government;250 and, third, the Executive department
deemed as a legal appropriation under the said constitutional provision precisely has, in fact, used the Malampaya Funds for non-energy related purposes under the
because, as earlier stated, it contains post-enactment measures which effectively subject phrase, thereby contradicting respondents own position that it is limited
create a system of intermediate appropriations. These intermediate appropriations only to "energy resource development and exploitation programs and projects of the
are the actual appropriations meant for enforcement and since they are made by government."251 Thus, while Section 8 of PD 910 may have passed the completeness
individual legislators after the GAA is passed, they occur outside the law. As such, test since the policy of energy development is clearly deducible from its text, the
the Court observes that the real appropriation made under the 2013 PDAF Article is phrase "and for such other purposes as may be hereafter directed by the President"
not the P24.79 Billion allocated for the entire PDAF, but rather the post-enactment under the same provision of law should nonetheless be stricken down as
determinations made by the individual legislators which are, to repeat, occurrences unconstitutional as it lies independently unfettered by any sufficient standard of the
outside of the law. Irrefragably, the 2013 PDAF Article does not constitute an delegating law. This notwithstanding, it must be underscored that the rest of Section
"appropriation made by law" since it, in its truest sense, only authorizes individual 8, insofar as it allows for the use of the Malampaya Funds "to finance energy
legislators to appropriate in violation of the non-delegability principle as afore- resource development and exploitation programs and projects of the government,"
discussed. remains legally effective and subsisting. Truth be told, the declared
2. Undue Delegation. unconstitutionality of the aforementioned phrase is but an assurance that the
On a related matter, petitioners contend that Section 8 of PD 910 constitutes an Malampaya Funds would be used as it should be used only in accordance with
undue delegation of legislative power since the phrase "and for such other purposes the avowed purpose and intention of PD 910.
as may be hereafter directed by the President" gives the President "unbridled As for the Presidential Social Fund, the Court takes judicial notice of the fact that
discretion to determine for what purpose the funds will be used." 243 Respondents, on Section 12 of PD 1869 has already been amended by PD 1993 which thus moots the
the other hand, urged the Court to apply the principle of ejusdem generis to the parties submissions on the same.252 Nevertheless, since the amendatory provision
same section and thus, construe the phrase "and for such other purposes as may be may be readily examined under the current parameters of discussion, the Court
hereafter directed by the President" to refer only to other purposes related "to proceeds to resolve its constitutionality.
energy resource development and exploitation programs and projects of the Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that the
government."244 Presidential Social Fund may be used "to first, finance the priority infrastructure
The Court agrees with petitioners submissions. development projects and second, to finance the restoration of damaged or
While the designation of a determinate or determinable amount for a particular destroyed facilities due to calamities, as may be directed and authorized by the
public purpose is sufficient for a legal appropriation to exist, the appropriation law Office of the President of the Philippines." The Court finds that while the second
indicated purpose adequately curtails the authority of the President to spend the The decisive question on the propriety of the issuance of the writ of mandamus in
Presidential Social Fund only for restoration purposes which arise from calamities, this case is, whether the information sought by the petitioner is within the ambit of
the first indicated purpose, however, gives him carte blanche authority to use the the constitutional guarantee. (Emphases supplied)
same fund for any infrastructure project he may so determine as a "priority". Verily, Corollarily, in the case of Valmonte v. Belmonte Jr. 257 (Valmonte), it has been clarified
the law does not supply a definition of "priority in frastructure development projects" that the right to information does not include the right to compel the preparation of
and hence, leaves the President without any guideline to construe the same. To "lists, abstracts, summaries and the like." In the same case, it was stressed that it is
note, the delimitation of a project as one of "infrastructure" is too broad of a essential that the "applicant has a well -defined, clear and certain legal right to the
classification since the said term could pertain to any kind of facility. This may be thing demanded and that it is the imperative duty of defendant to perform the act
deduced from its lexicographic definition as follows: "the underlying framework of a required." Hence, without the foregoing substantiations, the Court cannot grant a
system, especially public services and facilities (such as highways, schools, bridges, particular request for information. The pertinent portions of Valmonte are hereunder
sewers, and water-systems) needed to support commerce as well as economic and quoted:258
residential development."253In fine, the phrase "to finance the priority infrastructure Although citizens are afforded the right to information and, pursuant thereto, are
development projects" must be stricken down as unconstitutional since similar to entitled to "access to official records," the Constitution does not accord them a right
the above-assailed provision under Section 8 of PD 910 it lies independently to compel custodians of official records to prepare lists, abstracts, summaries and
unfettered by any sufficient standard of the delegating law. As they are severable, the like in their desire to acquire information on matters of public concern.
all other provisions of Section 12 of PD 1869, as amended by PD 1993, remains It must be stressed that it is essential for a writ of mandamus to issue that the
legally effective and subsisting. applicant has a well-defined, clear and certain legal right to the thing demanded and
D. Ancillary Prayers. 1. that it is the imperative duty of defendant to perform the act required. The
Petitioners Prayer to be Furnished Lists and Detailed Reports. corresponding duty of the respondent to perform the required act must be clear and
Aside from seeking the Court to declare the Pork Barrel System unconstitutional as specific Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126 SCRA 203;
the Court did so in the context of its pronouncements made in this Decision Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.
petitioners equally pray that the Executive Secretary and/or the DBM be ordered to The request of the petitioners fails to meet this standard, there being no duty on the
release to the CoA and to the public: (a) "the complete schedule/list of legislators part of respondent to prepare the list requested. (Emphases supplied)
who have availed of their PDAF and VILP from the years 2003 to 2013, specifying the In these cases, aside from the fact that none of the petitions are in the nature of
use of the funds, the project or activity and the recipient entities or individuals, and mandamus actions, the Court finds that petitioners have failed to establish a "a well-
all pertinent data thereto" (PDAF Use Schedule/List); 254 and (b) "the use of the defined, clear and certain legal right" to be furnished by the Executive Secretary
Executives lump-sum, discretionary funds, including the proceeds from the x x x and/or the DBM of their requested PDAF Use Schedule/List and Presidential Pork Use
Malampaya Funds and remittances from the PAGCOR x x x from 2003 to 2013, Report. Neither did petitioners assert any law or administrative issuance which
specifying the x x x project or activity and the recipient entities or individuals, and would form the bases of the latters duty to furnish them with the documents
all pertinent data thereto"255 (Presidential Pork Use Report). Petitioners prayer is requested. While petitioners pray that said information be equally released to the
grounded on Section 28, Article II and Section 7, Article III of the 1987 Constitution CoA, it must be pointed out that the CoA has not been impleaded as a party to these
which read as follows: cases nor has it filed any petition before the Court to be allowed access to or to
ARTICLE II compel the release of any official document relevant to the conduct of its audit
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and investigations. While the Court recognizes that the information requested is a matter
implements a policy of full public disclosure of all its transactions involving public of significant public concern, however, if only to ensure that the parameters of
interest. disclosure are properly foisted and so as not to unduly hamper the equally important
ARTICLE III Sec. 7. interests of the government, it is constrained to deny petitioners prayer on this
The right of the people to information on matters of public concern shall be score, without prejudice to a proper mandamus case which they, or even the CoA,
recognized. Access to official records, and to documents and papers pertaining to may choose to pursue through a separate petition.
official acts, transactions, or decisions, as well as to government research data used It bears clarification that the Courts denial herein should only cover petitioners plea
as basis for policy development, shall be afforded the citizen, subject to such to be furnished with such schedule/list and report and not in any way deny them, or
limitations as may be provided by law. the general public, access to official documents which are already existing and of
The Court denies petitioners submission. public record. Subject to reasonable regulation and absent any valid statutory
Case law instructs that the proper remedy to invoke the right to information is to file prohibition, access to these documents should not be proscribed. Thus, in Valmonte,
a petition for mandamus. As explained in the case of Legaspi v. Civil Service while the Court denied the application for mandamus towards the preparation of the
Commission:256 list requested by petitioners therein, it nonetheless allowed access to the documents
While the manner of examining public records may be subject to reasonable sought for by the latter, subject, however, to the custodians reasonable
regulation by the government agency in custody thereof, the duty to disclose the regulations,viz.:259
information of public concern, and to afford access to public records cannot be In fine, petitioners are entitled to access to the documents evidencing loans granted
discretionary on the part of said agencies. Certainly, its performance cannot be by the GSIS, subject to reasonable regulations that the latter may promulgate
made contingent upon the discretion of such agencies. Otherwise, the enjoyment of relating to the manner and hours of examination, to the end that damage to or loss
the constitutional right may be rendered nugatory by any whimsical exercise of of the records may be avoided, that undue interference with the duties of the
agency discretion. The constitutional duty, not being discretionary, its performance custodian of the records may be prevented and that the right of other persons
may be compelled by a writ of mandamus in a proper case. entitled to inspect the records may be insured Legaspi v. Civil Service Commission,
But what is a proper case for Mandamus to issue? In the case before Us, the public supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387. The petition, as to the
right to be enforced and the concomitant duty of the State are unequivocably set second and third alternative acts sought to be done by petitioners, is meritorious.
forth in the Constitution.
However, the same cannot be said with regard to the first act sought by petitioners, amount during a specified period for the purpose indicated. It shall cover
i.e., expenditures the release of which is subject to compliance with specific laws or
"to furnish petitioners the list of the names of the Batasang Pambansa members regulations, or is subject to separate approval or clearance by competent
belonging to the UNIDO and PDP-Laban who were able to secure clean loans authority."263
immediately before the February 7 election thru the intercession/marginal note of Based on this definition, it may be gleaned that a SARO only evinces the existence
the then First Lady Imelda Marcos." of an obligation and not the directive to pay. Practically speaking, the SARO does not
The Court, therefore, applies the same treatment here. have the direct and immediate effect of placing public funds beyond the control of
2. Petitioners Prayer to Include Matters in Congressional Deliberations. the disbursing authority. In fact, a SARO may even be withdrawn under certain
Petitioners further seek that the Court "order the inclusion in budgetary circumstances which will prevent the actual release of funds. On the other hand, the
deliberations with the Congress of all presently, off-budget, lump sum, discretionary actual release of funds is brought about by the issuance of the NCA, 264 which is
funds including but not limited to, proceeds from the x x x Malampaya Fund, subsequent to the issuance of a SARO. As may be determined from the statements
remittances from the PAGCOR and the PCSO or the Executives Social Funds." 260 of the DBM representative during the Oral Arguments:265
Suffice it to state that the above-stated relief sought by petitioners covers a matter Justice Bernabe: Is the notice of allocation issued simultaneously with the SARO?
which is generally left to the prerogative of the political branches of government. xxxx
Hence, lest the Court itself overreach, it must equally deny their prayer on this Atty. Ruiz: It comes after. The SARO, Your Honor, is only the go signal for the
score. agencies to obligate or to enter into commitments. The NCA, Your Honor, is already
3. Respondents Prayer to Lift TRO; Consequential Effects of Decision. the go signal to the treasury for us to be able to pay or to liquidate the amounts
The final issue to be resolved stems from the interpretation accorded by the DBM to obligated in the SARO; so it comes after. x x x The NCA, Your Honor, is the go signal
the concept of released funds. In response to the Courts September 10, 2013 TRO for the MDS for the authorized government-disbursing banks to, therefore, pay the
that enjoined the release of the remaining PDAF allocated for the year 2013, the payees depending on the projects or projects covered by the SARO and the NCA.
DBM issued Circular Letter No. 2013-8 dated September 27, 2013 (DBM Circular Justice Bernabe: Are there instances that SAROs are cancelled or revoked?
2013-8) which pertinently reads as follows: Atty. Ruiz: Your Honor, I would like to instead submit that there are instances that the
3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a Special SAROs issued are withdrawn by the DBM.
Allotment Release Order (SARO) has been issued by the DBM and such SARO has Justice Bernabe: They are withdrawn?
been obligated by the implementing agencies prior to the issuance of the TRO, may Atty. Ruiz: Yes, Your Honor x x x. (Emphases and underscoring supplied)
continually be implemented and disbursements thereto effected by the agencies Thus, unless an NCA has been issued, public funds should not be treated as funds
concerned. which have been "released." In this respect, therefore, the disbursement of 2013
Based on the text of the foregoing, the DBM authorized the continued PDAF funds which are only covered by obligated SAROs, and without any
implementation and disbursement of PDAF funds as long as they are: first, covered corresponding NCAs issued, must, at the time of this Decisions promulgation, be
by a SARO; and, second, that said SARO had been obligated by the implementing enjoined and consequently reverted to the unappropriated surplus of the general
agency concerned prior to the issuance of the Courts September 10, 2013 TRO. fund. Verily, in view of the declared unconstitutionality of the 2013 PDAF Article, the
Petitioners take issue with the foregoing circular, arguing that "the issuance of the funds appropriated pursuant thereto cannot be disbursed even though already
SARO does not yet involve the release of funds under the PDAF, as release is only obligated, else the Court sanctions the dealing of funds coming from an
triggered by the issuance of a Notice of Cash Allocation [(NCA)]." 261 As such, PDAF unconstitutional source.
disbursements, even if covered by an obligated SARO, should remain enjoined. This same pronouncement must be equally applied to (a) the Malampaya Funds
For their part, respondents espouse that the subject TRO only covers "unreleased which have been obligated but not released meaning, those merely covered by a
and unobligated allotments." They explain that once a SARO has been issued and SARO under the phrase "and for such other purposes as may be hereafter directed
obligated by the implementing agency concerned, the PDAF funds covered by the by the President" pursuant to Section 8 of PD 910; and (b) funds sourced from the
same are already "beyond the reach of the TRO because they cannot be considered Presidential Social Fund under the phrase "to finance the priority infrastructure
as remaining PDAF." They conclude that this is a reasonable interpretation of the development projects" pursuant to Section 12 of PD 1869, as amended by PD 1993,
TRO by the DBM.262 which were altogether declared by the Court as unconstitutional. However, these
The Court agrees with petitioners in part. funds should not be reverted to the general fund as afore-stated but instead,
At the outset, it must be observed that the issue of whether or not the Courts respectively remain under the Malampaya Funds and the Presidential Social Fund to
September 10, 2013 TRO should be lifted is a matter rendered moot by the present be utilized for their corresponding special purposes not otherwise declared as
Decision. The unconstitutionality of the 2013 PDAF Article as declared herein has the unconstitutional.
consequential effect of converting the temporary injunction into a permanent one. E. Consequential Effects of Decision.
Hence, from the promulgation of this Decision, the release of the remaining PDAF As a final point, it must be stressed that the Courts pronouncement anent the
funds for 2013, among others, is now permanently enjoined. unconstitutionality of (a) the 2013 PDAF Article and its Special Provisions, (b) all
The propriety of the DBMs interpretation of the concept of "release" must, other Congressional Pork Barrel provisions similar thereto, and (c) the phrases (1)
nevertheless, be resolved as it has a practical impact on the execution of the current "and for such other purposes as may be hereafter directed by the President" under
Decision. In particular, the Court must resolve the issue of whether or not PDAF Section 8 of PD 910, and (2) "to finance the priority infrastructure development
funds covered by obligated SAROs, at the time this Decision is promulgated, may projects" under Section 12 of PD 1869, as amended by PD 1993, must only be
still be disbursed following the DBMs interpretation in DBM Circular 2013-8. treated as prospective in effect in view of the operative fact doctrine.
On this score, the Court agrees with petitioners posturing for the fundamental To explain, the operative fact doctrine exhorts the recognition that until the judiciary,
reason that funds covered by an obligated SARO are yet to be "released" under legal in an appropriate case, declares the invalidity of a certain legislative or executive
contemplation. A SARO, as defined by the DBM itself in its website, is "aspecific act, such act is presumed constitutional and thus, entitled to obedience and respect
authority issued to identified agencies to incur obligations not exceeding a given and should be properly enforced and complied with. As explained in the recent case
of Commissioner of Internal Revenue v. San Roque Power Corporation, 266 the doctrine present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles
merely "reflects awareness that precisely because the judiciary is the governmental and the various Congressional Insertions, which confer/red personal, lump-sum
organ which has the final say on whether or not a legislative or executive measure is allocations to legislators from which they are able to fund specific projects which
valid, a period of time may have elapsed before it can exercise the power of judicial they themselves determine; (d) all informal practices of similar import and effect,
review that may lead to a declaration of nullity. It would be to deprive the law of its which the Court similarly deems to be acts of grave abuse of discretion amounting
quality of fairness and justice then, if there be no recognition of what had transpired to lack or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes
prior to such adjudication."267 "In the language of an American Supreme Court as may be hereafter directed by the President" under Section 8 of Presidential
decision: The actual existence of a statute, prior to such a determination of Decree No. 910 and (2) "to finance the priority infrastructure development projects"
unconstitutionality, is an operative fact and may have consequences which cannot under Section 12 of Presidential Decree No. 1869, as amended by Presidential
justly be ignored."268 Decree No. 1993, for both failing the sufficient standard test in violation of the
For these reasons, this Decision should be heretofore applied prospectively. principle of non-delegability of legislative power.
Conclusion Accordingly, the Courts temporary injunction dated September 10, 2013 is hereby
The Court renders this Decision to rectify an error which has persisted in the declared to be PERMANENT. Thus, the disbursement/release of the remaining PDAF
chronicles of our history. In the final analysis, the Court must strike down the Pork funds allocated for the year 2013, as well as for all previous years, and the funds
Barrel System as unconstitutional in view of the inherent defects in the rules within sourced from (1) the Malampaya Funds under the phrase "and for such other
which it operates. To recount, insofar as it has allowed legislators to wield, in varying purposes as may be hereafter directed by the President" pursuant to Section 8 of
gradations, non-oversight, post-enactment authority in vital areas of budget Presidential Decree No. 910, and (2) the Presidential Social Fund under the phrase
execution, the system has violated the principle of separation of powers; insofar as it "to finance the priority infrastructure development projects" pursuant to Section 12
has conferred unto legislators the power of appropriation by giving them personal, of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, which
discretionary funds from which they are able to fund specific projects which they are, at the time this Decision is promulgated, not covered by Notice of Cash
themselves determine, it has similarly violated the principle of non-delegability of Allocations (NCAs) but only by Special Allotment Release Orders (SAROs), whether
legislative power ; insofar as it has created a system of budgeting wherein items are obligated or not, are hereby ENJOINED. The remaining PDAF funds covered by this
not textualized into the appropriations bill, it has flouted the prescribed procedure of permanent injunction shall not be disbursed/released but instead reverted to the
presentment and, in the process, denied the President the power to veto items ; unappropriated surplus of the general fund, while the funds under the Malampaya
insofar as it has diluted the effectiveness of congressional oversight by giving Funds and the Presidential Social Fund shall remain therein to be utilized for their
legislators a stake in the affairs of budget execution, an aspect of governance which respective special purposes not otherwise declared as unconstitutional.
they may be called to monitor and scrutinize, the system has equally impaired On the other hand, due to improper recourse and lack of proper substantiation, the
public accountability ; insofar as it has authorized legislators, who are national Court hereby DENIES petitioners prayer seeking that the Executive Secretary and/or
officers, to intervene in affairs of purely local nature, despite the existence of the Department of Budget and Management be ordered to provide the public and
capable local institutions, it has likewise subverted genuine local autonomy ; and the Commission on Audit complete lists/schedules or detailed reports related to the
again, insofar as it has conferred to the President the power to appropriate funds availments and utilization of the funds subject of these cases. Petitioners access to
intended by law for energy-related purposes only to other purposes he may deem fit official documents already available and of public record which are related to these
as well as other public funds under the broad classification of "priority infrastructure funds must, however, not be prohibited but merely subjected to the custodians
development projects," it has once more transgressed the principle of non- reasonable regulations or any valid statutory prohibition on the same. This denial is
delegability. without prejudice to a proper mandamus case which they or the Commission on
For as long as this nation adheres to the rule of law, any of the multifarious Audit may choose to pursue through a separate petition.
unconstitutional methods and mechanisms the Court has herein pointed out should The Court also DENIES petitioners prayer to order the inclusion of the funds subject
never again be adopted in any system of governance, by any name or form, by any of these cases in the budgetary deliberations of Congress as the same is a matter
semblance or similarity, by any influence or effect. Disconcerting as it is to think that left to the prerogative of the political branches of government.
a system so constitutionally unsound has monumentally endured, the Court urges Finally, the Court hereby DIRECTS all prosecutorial organs of the government to,
the people and its co-stewards in government to look forward with the optimism of within the bounds of reasonable dispatch, investigate and accordingly prosecute all
change and the awareness of the past. At a time of great civic unrest and vociferous government officials and/or private individuals for possible criminal offenses related
public debate, the Court fervently hopes that its Decision today, while it may not to the irregular, improper and/or unlawful disbursement/utilization of all funds under
purge all the wrongs of society nor bring back what has been lost, guides this nation the Pork Barrel System.
to the path forged by the Constitution so that no one may heretofore detract from its This Decision is immediately executory but prospective in effect.
cause nor stray from its course. After all, this is the Courts bounden duty and no SO ORDERED.
others. ESTELA M. PERLAS-BERNABE
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional Associate Justice
violations discussed in this Decision, the Court hereby declares as WE CONCUR:
UNCONSTITUTIONAL: (a) the entire 2013 PDAF Article; (b) all legal provisions of past See Concurring Opinion
and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF MARIA LOURDES P. A. SERENO
Articles and the various Congressional Insertions, which authorize/d legislators Chief Justice
whether individually or collectively organized into committees to intervene,
assume or participate in any of the various post-enactment stages of the budget
execution, such as but not limited to the areas of project identification, modification
and revision of project identification, fund release and/or fund realignment,
unrelated to the power of congressional oversight; (c) all legal provisions of past and
These are consolidated petitions taken under Rule 65 of the Rules of Court, all of
See Concurring Opinion NO PART which assail the constitutionality of the Pork Barrel System.
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.
Associate Justice Associate Justice FACTS:
The NBI Investigation was spawned by sworn affidavits of six (6) whistle-blowers who
declared that JLN Corporation (Janet Lim Napoles) had swindled billions of pesos
I concur and also join the from the public coffers for "ghost projects" using dummy NGOs. Thus, Criminal
I join the Opinion of Justice Carpio, complaints were filed before the Office of the Ombudsman, charging five (5)
concurring opinion of Justice
subject to my Concurring & lawmakers for Plunder, and three (3) other lawmakers for Malversation, Direct
Carpio.
Dissenting Opinion. Bribery, and Violation of the Anti-Graft and Corrupt Practices Act. Also recommended
TERESITA J. LEONARDO-DE
ARTURO D. BRION to be charged in the complaints are some of the lawmakers chiefs -of-staff or
CASTRO
Associate Justice representatives, the heads and other officials of three (3) implementing agencies,
Associate Justice
and the several presidents of the NGOs set up by Napoles.
Whistle-blowers alleged that" at least P900 Million from royalties in the operation of
the Malampaya gas project off Palawan province intended for agrarian reform
DIOSDADO M. PERALTA LUCAS P. BERSAMIN beneficiaries has gone into a dummy NGO. Several petitions were lodged before the
Associate Justice Associate Justice Court similarly seeking that the "Pork Barrel System" be declared unconstitutional

G.R. No. 208493 SJS filed a Petition for Prohibition seeking that the "Pork Barrel
I join the concurring opinion of J. System" be declared unconstitutional, and a writ of prohibition be issued
MARIANO C. DEL CASTILLO A.T. Carpio of the ponencia permanently
Associate Justice ROBERTO A. ABAD G.R. No. 208566 - Belgica, et al filed an Urgent Petition For Certiorari and
Associate Justice Prohibition With Prayer For The Immediate Issuance of Temporary Restraining Order
and/or Writ of Preliminary Injunction seeking that the annual "Pork Barrel System,"
presently embodied in the provisions of the GAA of 2013 which provided for the
2013 PDAF, and the Executives lump-sum, discretionary funds, such as the
MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ Malampaya Funds and the Presidential Social Fund, be declared unconstitutional and
Associate Justice Associate Justice null and void for being acts constituting grave abuse of discretion. Also, they pray
that the Court issue a TRO against respondents

JOSE CATRAL MENDOZA BIENVENIDO L. REYES UDK-14951 A Petition filed seeking that the PDAF be declared unconstitutional,
Associate Justice Associate Justice and a cease and desist order be issued restraining President Benigno Simeon S.
Aquino III (President Aquino) and Secretary Abad from releasing such funds to
Members of Congress
See Concurring Opinion
MARVIC MARIO VICTOR F. LEONEN ISSUES:
Associate Justice 1. Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel
CERTIFICATION Laws similar thereto are unconstitutional considering that they violate the principles
I certify that the conclusions in the above Decision had been reached in consultation of/constitutional provisions on (a) separation of powers; (b) non-delegability of
before the cases were assigned to the writer of the opinion of the Court. legislative power; (c) checks and balances; (d) accountability; (e) political dynasties;
MARIA LOURDES P. A. SERENO and (f) local autonomy.
Chief Justice 2. Whether or not the phrases (under Section 8 of PD 910,116 relating to the
Malampaya Funds, and under Section 12 of PD 1869, as amended by PD 1993,
relating to the Presidential Social Fund, are unconstitutional insofar as they
G.R. No. 208566 November 19, 2013 BELGICA vs. HONORABLE EXECUTIVE constitute undue delegations of legislative power.
SECRETARY PAQUITO N. OCHOA JR, et al, Respondents
G.R. No. 208566 November 19, 2013 HELD:
GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE L. 1. Yes, the PDAF article is unconstitutional. The post-enactment measures which
GONZALEZ REUBEN M. ABANTE and QUINTIN PAREDES SAN govern the areas of project identification, fund release and fund realignment are not
DIEGO, Petitioners, related to functions of congressional oversight and, hence, allow legislators to
vs. intervene and/or assume duties that properly belong to the sphere of budget
HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR, et al, execution. This violates the principle of separation of powers. Congressrole must be
Respondents confined to mere oversight that must be confined to: (1) scrutiny and (2)
PERLAS-BERNABE, J.: investigation and monitoring of the implementation of laws. Any action or step
beyond that will undermine the separation of powers guaranteed by the constitution.
NATURE:
Thus, the court declares the 2013 pdaf article as well as all other provisions of law (2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina Foundation accounts;
which similarly allow legislators to wield any form of post-enactment authority in the (3) Trinidad-Rayby-Palmy Foundation accounts;
implementation or enforcement of the budget, unrelated to congressional oversight, (4) Rosalys-Aguamina Foundation accounts and
as violative of the separation of powers principle and thus unconstitutional. (5) Maler Foundation accounts.
In addition, the petition sought the forfeiture of US$25 million and US$5 million in
treasury notes which exceeded the Marcos couples salaries, other lawful income as
2. Yes. Sec 8 of PD 910- the phrase and for such other purposes as may be well as income from legitimately acquired property. The treasury
hereafter directed by the President constitutes an undue delegation of legislative notes are frozen at the Central Bank of the Philippines, now Bangko Sentral ng
power insofar as it does not lay down a sufficient standard to adequately determine Pilipinas, by virtue of the freeze order issued by the PCGG.
the limits of the Presidents authority with respect to the purpose for which the On October 18, 1993, respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene
Malampaya Funds may be used. It gives the President wide latitude to use the M. Araneta and Ferdinand R. Marcos, Jr. filed their answer.
Malampaya Funds for any other purpose he may direct and, in effect, allows him to Before the case was set for pre-trial, a General Agreement and the Supplemental
unilaterally appropriate public funds beyond the purview of the law. Agreements[6] dated December 28, 1993 were executed by the Marcos children and
then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of
Section 12 of PD 1869, as amended by PD 1993- the phrases: the Marcos family. Subsequently, respondent Marcos children filed a motion dated
December 7, 1995 for the approval of said agreements and for the enforcement
(b) "to finance the priority infrastructure development projects was declared thereof.
constitutional. IT INDICATED PURPOSE ADEQUATELY CURTAILS THE AUTHORITY OF The General Agreement/Supplemental Agreements sought to identify, collate, cause
THE PRESIDENT TO SPEND THE PRESIDENTIAL SOCIAL FUND ONLY FOR the inventory of and distribute all assets presumed to be owned by the Marcos
RESTORATION PURPOSES WHICH ARISE FROM CALAMITIES. family under the conditions contained therein. The aforementioned General
Agreement specified in one of its premises or whereas clauses the fact that
(b) and to finance the restoration of damaged or destroyed facilities due to petitioner obtained a judgment from the Swiss Federal Tribunal on December 21,
calamities, as may be directed and authorized by the Office of the President of the 1990, that the Three Hundred Fifty-six Million U.S. dollars (US$356 million) belongs
Philippines was declared unconstitutional.IT GIVES THE PRESIDENT CARTE BLANCHE in principle to the Republic of the Philippines provided certain conditionalities are
AUTHORITY TO USE THE SAME FUND FOR ANY INFRASTRUCTURE PROJECT HE MAY met x x x. The said decision of the Swiss Federal Supreme Court affirmed the
SO DETERMINE AS A PRIORITY. VERILY, THE LAW DOES NOT SUPPLY A DEFINITION decision of Zurich District Attorney Peter Consandey, granting petitioners request for
OF PRIORITY INFRASTRUCTURE DEVELOPMENT PROJECTS AND HENCE, LEAVES legal assistance.[7] Consandey declared the various deposits in the name of the
THE PRESIDENT WITHOUT ANY GUIDELINE TO CONSTRUE THE SAME. enumerated foundations to be of illegal provenance and ordered that they be frozen
EN BANC to await the final verdict in favor of the parties entitled to restitution.
[G.R. No. 152154. July 15, 2003] Hearings were conducted by the Sandiganbayan on the motion to approve the
REPUBLIC OF THE PHILIPPINES, petitioner, vs. HONORABLE General/Supplemental Agreements. Respondent Ferdinand, Jr. was presented as
SANDIGANBAYAN (SPECIAL FIRST DIVISION), FERDINAND E. MARCOS witness for the purpose of establishing the partial implementation of said
(REPRESENTED BY HIS ESTATE/HEIRS: IMELDA R. MARCOS, MARIA IMELDA agreements.
[IMEE] MARCOS-MANOTOC, FERDINAND R. MARCOS, JR. AND IRENE On October 18, 1996, petitioner filed a motion for summary judgment and/or
MARCOS-ARANETA) AND IMELDA ROMUALDEZ MARCOS, respondents. judgment on the pleadings. Respondent Mrs. Marcos filed her opposition thereto
DECISION which was later adopted by respondents Mrs. Manotoc, Mrs. Araneta and Ferdinand,
CORONA, J.: Jr.
This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set In its resolution dated November 20, 1997, the Sandiganbayan denied petitioners
aside the Resolution dated January 31, 2002 issued by the Special First Division of motion for summary judgment and/or judgment on the pleadings on the ground that
the Sandiganbayan in Civil Case No. 0141 entitled Republic of the Philippines vs. the motion to approve the compromise agreement (took) precedence over the
Ferdinand E. Marcos, et. al., and (2) reinstate its earlier decision dated September motion for summary judgment.
19, 2000 which forfeited in favor of petitioner Republic of the Philippines (Republic) Respondent Mrs. Marcos filed a manifestation on May 26, 1998 claiming she was not
the amount held in escrow in the Philippine National Bank (PNB) in the aggregate a party to the motion for approval of the Compromise Agreement and that she
amount of US$658,175,373.60 as of January 31, 2002. owned 90% of the funds with the remaining 10% belonging to the Marcos estate.
BACKGROUND OF THE CASE Meanwhile, on August 10, 1995, petitioner filed with the District Attorney in Zurich,
On December 17, 1991, petitioner Republic, through the Presidential Commission on Switzerland, an additional request for the immediate transfer of the deposits to an
Good Government (PCGG), represented by the Office of the Solicitor General (OSG), escrow account in the PNB. The request was granted. On appeal by the Marcoses,
filed a petition for forfeiture before the Sandiganbayan, docketed as Civil Case No. the Swiss Federal Supreme Court, in a decision dated December 10, 1997, upheld
0141 entitled Republic of the Philippines vs. Ferdinand E. Marcos, represented by his the ruling of the District Attorney of Zurich granting the request for the transfer of
Estate/Heirs and Imelda R. Marcos, pursuant to RA 1379[1] in relation to Executive the funds. In 1998, the funds were remitted to the Philippines in escrow.
Order Nos. 1,[2] 2,[3] 14[4] and 14-A.[5] Subsequently, respondent Marcos children moved that the funds be placed
In said case, petitioner sought the declaration of the aggregate amount of US$356 in custodia legis because the deposit in escrow in the PNB was allegedly in danger of
million (now estimated to be more than US$658 million inclusive of interest) dissipation by petitioner. The Sandiganbayan, in its resolution dated September 8,
deposited in escrow in the PNB, as ill-gotten wealth. The funds were previously held 1998, granted the motion.
by the following five account groups, using various foreign foundations in certain After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial
Swiss banks: order dated October 28, 1999 and January 21, 2000, respectively, the case was set
(1) Azio-Verso-Vibur Foundation accounts; for trial. After several resettings, petitioner, on March 10, 2000, filed another motion
for summary judgment pertaining to the forfeiture of the US$356 million, based on A. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE PERSONAL
the following grounds: CIRCUMSTANCES OF FERDINAND E. MARCOS AND IMELDA R. MARCOS AS PUBLIC
I OFFICIALS BUT ALSO THE EXTENT OF THEIR SALARIES AS SUCH PUBLIC OFFICIALS,
THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS SUBJECT WHO UNDER THE CONSTITUTION, WERE PROHIBITED FROM ENGAGING IN THE
OF THE PETITION UNDER R.A. NO. 1379 ARE ADMITTED BY RESPONDENTS IN THEIR MANAGEMENT OF FOUNDATIONS.
PLEADINGS AND OTHER SUBMISSIONS MADE IN THE COURSE OF THE PROCEEDING. B. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS DEPOSITS
II AND THEIR OWNERSHIP THEREOF:
RESPONDENTS ADMISSION MADE DURING THE PRE-TRIAL THAT THEY DO NOT HAVE 1. ADMISSIONS IN PRIVATE RESPONDENTS ANSWER;
ANY INTEREST OR OWNERSHIP OVER THE FUNDS SUBJECT OF THE ACTION FOR 2. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS THEY SIGNED AND
FORFEITURE TENDERS NO GENUINE ISSUE OR CONTROVERSY AS TO ANY MATERIAL SOUGHT TO IMPLEMENT;
FACT IN THE PRESENT ACTION, THUS WARRANTING THE RENDITION OF SUMMARY 3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R. MARCOS
JUDGMENT.[8] AND IN THE MOTION TO PLACE THE RES IN CUSTODIA LEGIS; AND
Petitioner contended that, after the pre-trial conference, certain facts were 4. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS VICTIMS.
established, warranting a summary judgment on the funds sought to be forfeited. C. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF
Respondent Mrs. Marcos filed her opposition to the petitioners motion for summary FERDINAND E. MARCOS AND IMELDA R. MARCOS AS PUBLIC OFFICIALS.
judgment, which opposition was later adopted by her co-respondents Mrs. Manotoc, D. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF UNLAWFULLY
Mrs. Araneta and Ferdinand, Jr. ACQUIRED WEALTH.
On March 24, 2000, a hearing on the motion for summary judgment was conducted. II
In a decision[9] dated September 19, 2000, the Sandiganbayan granted petitioners SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT RAISED
motion for summary judgment: ANY GENUINE ISSUE OF FACT CONSIDERING THAT:
CONCLUSION A. PRIVATE RESPONDENTS DEFENSE THAT SWISS DEPOSITS WERE LAWFULLY
There is no issue of fact which calls for the presentation of evidence. ACQUIRED DOES NOT ONLY FAIL TO TENDER AN ISSUE BUT IS CLEARLY A SHAM; AND
The Motion for Summary Judgment is hereby granted. B. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS, PRIVATE
The Swiss deposits which were transmitted to and now held in escrow at the PNB are RESPONDENTS ABANDONED THEIR SHAM DEFENSE OF LEGITIMATE ACQUISITION,
deemed unlawfully acquired as ill-gotten wealth. AND THIS FURTHER JUSTIFIED THE RENDITION OF A SUMMARY JUDGMENT.
DISPOSITION III
WHEREFORE, judgment is hereby rendered in favor of the Republic of the Philippines THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED.
and against the respondents, declaring the Swiss deposits which were transferred to IV
and now deposited in escrow at the Philippine National Bank in the total aggregate THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF DISCRETION IN
value equivalent to US$627,608,544.95 as of August 31, 2000 together with the REVERSING HIMSELF ON THE GROUND THAT ORIGINAL COPIES OF THE
increments thereof forfeited in favor of the State. [10] AUTHENTICATED SWISS DECISIONS AND THEIR AUTHENTICATED TRANSLATIONS
Respondent Mrs. Marcos filed a motion for reconsideration dated September 26, HAVE NOT BEEN SUBMITTED TO THE COURT, WHEN EARLIER THE SANDIGANBAYAN
2000. Likewise, Mrs. Manotoc and Ferdinand, Jr. filed their own motion for HAS QUOTED EXTENSIVELY A PORTION OF THE TRANSLATION OF ONE OF THESE
reconsideration dated October 5, 2000. Mrs. Araneta filed a manifestation dated SWISS DECISIONS IN HIS PONENCIA DATED JULY 29, 1999 WHEN IT DENIED THE
October 4, 2000 adopting the motion for reconsideration of Mrs. Marcos, Mrs. MOTION TO RELEASE ONE HUNDRED FIFTY MILLION US DOLLARS ($150,000,000.00)
Manotoc and Ferdinand, Jr. TO THE HUMAN RIGHTS VICTIMS.
Subsequently, petitioner filed its opposition thereto. V
In a resolution[11] dated January 31, 2002, the Sandiganbayan reversed its PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE
September 19, 2000 decision, thus denying petitioners motion for summary AUTHENTICITY OF THE SWISS FEDERAL SUPREME COURT DECISIONS. [13]
judgment: Petitioner, in the main, asserts that nowhere in the respondents motions for
CONCLUSION reconsideration and supplemental motion for reconsideration were the authenticity,
In sum, the evidence offered for summary judgment of the case did not prove that accuracy and admissibility of the Swiss decisions ever challenged. Otherwise stated,
the money in the Swiss Banks belonged to the Marcos spouses because no legal it was incorrect for the Sandiganbayan to use the issue of lack of authenticated
proof exists in the record as to the ownership by the Marcoses of the funds in escrow translations of the decisions of the Swiss Federal Supreme Court as the basis for
from the Swiss Banks. reversing itself because respondents themselves never raised this issue in their
The basis for the forfeiture in favor of the government cannot be deemed to have motions for reconsideration and supplemental motion for reconsideration.
been established and our judgment thereon, perforce, must also have been without Furthermore, this particular issue relating to the translation of the Swiss court
basis. decisions could not be resurrected anymore because said decisions had been
WHEREFORE, the decision of this Court dated September 19, 2000 is reconsidered previously utilized by the Sandiganbayan itself in resolving a decisive issue before it.
and set aside, and this case is now being set for further proceedings. [12] Petitioner faults the Sandiganbayan for questioning the non-production of the
Hence, the instant petition. In filing the same, petitioner argues that the authenticated translations of the Swiss Federal Supreme Court decisions as this was
Sandiganbayan, in reversing its September 19, 2000 decision, committed grave a marginal and technical matter that did not diminish by any measure the
abuse of discretion amounting to lack or excess of jurisdiction considering that -- conclusiveness and strength of what had been proven and admitted before the
I Sandiganbayan, that is, that the funds deposited by the Marcoses constituted ill-
PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE REQUISITES gotten wealth and thus belonged to the Filipino people.
OF SECTIONS 2 AND 3 OF R.A. NO. 1379: In compliance with the order of this Court, Mrs. Marcos filed her comment to the
petition on May 22, 2002. After several motions for extension which were all
granted, the comment of Mrs. Manotoc and Ferdinand, Jr. and the separate comment (4) Since petitioner failed to prove the three essential elements provided in
of Mrs. Araneta were filed on May 27, 2002. paragraphs (c)[15] (d),[16] and (e)[17] of Section 3, R.A. 1379, the inescapable
Mrs. Marcos asserts that the petition should be denied on the following grounds: conclusion is that the prima facie presumption of unlawful acquisition of the Swiss
A. funds has not yet attached. There can, therefore, be no premature forfeiture of the
PETITIONER HAS A PLAIN, SPEEDY, AND ADEQUATE REMEDY AT THE funds.
SANDIGANBAYAN. (C)
B. IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN STATEMENTS
THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE FOR MADE BY PRIVATE RESPONDENTS OUT OF CONTEXT THAT PETITIONER WAS ABLE TO
FURTHER PROCEEDINGS.[14] TREAT THESE AS JUDICIAL ADMISSIONS SUFFICIENT TO ESTABLISH A PRIMA FACIE
Mrs. Marcos contends that petitioner has a plain, speedy and adequate remedy in AND THEREAFTER A CONCLUSIVE CASE TO JUSTIFY THE FORFEITURE OF THE SWISS
the ordinary course of law in view of the resolution of the Sandiganbayan dated FUNDS.
January 31, 2000 directing petitioner to submit the authenticated translations of the (1) Under Section 27, Rule 130 of the Rules of Court, the General and Supplemental
Swiss decisions. Instead of availing of said remedy, petitioner now elevates the Agreements, as well as the other written and testimonial statements submitted in
matter to this Court. According to Mrs. Marcos, a petition for certiorari which does relation thereto, are expressly barred from being admissible in evidence against
not comply with the requirements of the rules may be dismissed. Since petitioner private respondents.
has a plain, speedy and adequate remedy, that is, to proceed to trial and submit (2) Had petitioner bothered to weigh the alleged admissions together with the other
authenticated translations of the Swiss decisions, its petition before this Court must statements on record, there would be a demonstrable showing that no such judicial
be dismissed. Corollarily, the Sandiganbayans ruling to set the case for further admissions were made by private respondents.
proceedings cannot and should not be considered a capricious and whimsical (D)
exercise of judgment. SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL ELEMENTS TO
Likewise, Mrs. Manotoc and Ferdinand, Jr., in their comment, prayed for the dismissal ESTABLISH A PRIMA FACIE CASE FOR FORFEITURE, AND PRIVATE RESPONDENTS
of the petition on the grounds that: HAVE NOT MADE ANY JUDICIAL ADMISSION THAT WOULD HAVE FREED IT FROM ITS
(A) BURDEN OF PROOF, THE SANDIGANBAYAN DID NOT COMMIT GRAVE ABUSE OF
BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10 DISCRETION IN DENYING THE MOTION FOR SUMMARY JUDGMENT. CERTIORARI,
MARCH 2000, IT WAS ALREADY BARRED FROM DOING SO. THEREFORE, DOES NOT LIE, ESPECIALLY AS THIS COURT IS NOT A TRIER OF FACTS. [18]
(1) The Motion for Summary Judgment was based on private respondents Answer For her part, Mrs. Araneta, in her comment to the petition, claims that obviously
and other documents that had long been in the records of the case. Thus, by the petitioner is unable to comply with a very plain requirement of respondent
time the Motion was filed on 10 March 2000, estoppel by laches had already set in Sandiganbayan. The instant petition is allegedly an attempt to elevate to this Court
against petitioner. matters, issues and incidents which should be properly threshed out at the
(2) By its positive acts and express admissions prior to filing the Motion for Summary Sandiganbayan. To respondent Mrs. Araneta, all other matters, save that pertaining
Judgment on 10 March 1990, petitioner had legally bound itself to go to trial on the to the authentication of the translated Swiss Court decisions, are irrelevant and
basis of existing issues. Thus, it clearly waived whatever right it had to move for impertinent as far as this Court is concerned. Respondent Mrs. Araneta manifests
summary judgment. that she is as eager as respondent Sandiganbayan or any interested person to have
(B) the Swiss Court decisions officially translated in our known language. She says the
EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM FILING THE authenticated official English version of the Swiss Court decisions should be
MOTION FOR SUMMARY JUDGMENT, THE SANDIGANBAYAN IS CORRECT IN RULING presented. This should stop all speculations on what indeed is contained therein.
THAT PETITIONER HAS NOT YET ESTABLISHED A PRIMA FACIE CASE FOR THE Thus, respondent Mrs. Araneta prays that the petition be denied for lack of merit
FORFEITURE OF THE SWISS FUNDS. and for raising matters which, in elaborated fashion, are impertinent and improper
(1) Republic Act No. 1379, the applicable law, is a penal statute. As such, its before this Court.
provisions, particularly the essential elements stated in section 3 thereof, are PROPRIETY OF PETITIONERS
mandatory in nature. These should be strictly construed against petitioner and ACTION FOR CERTIORARI
liberally in favor of private respondents. But before this Court discusses the more relevant issues, the question regarding the
(2) Petitioner has failed to establish the third and fourth essential elements in propriety of petitioner Republic's action for certiorari under Rule 65 [19] of the 1997
Section 3 of R.A. 1379 with respect to the identification, ownership, and approximate Rules of Civil Procedure assailing the Sandiganbayan Resolution dated January 21,
amount of the property which the Marcos couple allegedly acquired during their 2002 should be threshed out.
incumbency. At the outset, we would like to stress that we are treating this case as an exception
(a) Petitioner has failed to prove that the Marcos couple acquired or own the Swiss to the general rule governing petitions for certiorari. Normally, decisions of the
funds. Sandiganbayan are brought before this Court under Rule 45, not Rule 65.
[20]
(b) Even assuming, for the sake of argument, that the fact of acquisition has been But where the case is undeniably ingrained with immense public interest, public
proven, petitioner has categorically admitted that it has no evidence showing how policy and deep historical repercussions, certiorari is allowed notwithstanding the
much of the Swiss funds was acquired during the incumbency of the Marcos couple existence and availability of the remedy of appeal. [21]
from 31 December 1965 to 25 February 1986. One of the foremost concerns of the Aquino Government in February 1986 was the
(3) In contravention of the essential element stated in Section 3 (e) of R.A. 1379, recovery of the unexplained or ill-gotten wealth reputedly amassed by former
petitioner has failed to establish the other proper earnings and income from President and Mrs. Ferdinand E. Marcos, their relatives, friends and business
legitimately acquired property of the Marcos couple over and above their associates. Thus, the very first Executive Order (EO) issued by then President
government salaries. Corazon Aquino upon her assumption to office after the ouster of the Marcoses was
EO No. 1, issued on February 28, 1986. It created the Presidential Commission on
Good Government (PCGG) and charged it with the task of assisting the President in 4. Respondent Ferdinand E. Marcos (now deceased and represented by his
the "recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Estate/Heirs) was a public officer for several decades continuously and without
Marcos, his immediate family, relatives, subordinates and close associates, whether interruption as Congressman, Senator, Senate President and President of the
located in the Philippines or abroad, including the takeover or sequestration of all Republic of the Philippines from December 31, 1965 up to his ouster by direct action
business enterprises and entities owned or controlled by them during his of the people of EDSA on February 22-25, 1986.
administration, directly or through nominees, by taking undue advantage of their 5. Respondent Imelda Romualdez Marcos (Imelda, for short) the former First Lady
public office and/or using their powers, authority, influence, connections or who ruled with FM during the 14-year martial law regime, occupied the position of
relationship." The urgency of this undertaking was tersely described by this Court Minister of Human Settlements from June 1976 up to the peaceful revolution in
in Republic vs. Lobregat[22]: February 22-25, 1986. She likewise served once as a member of the Interim
surely x x x an enterprise "of great pith and moment"; it was attended by "great Batasang Pambansa during the early years of martial law from 1978 to 1984 and as
expectations"; it was initiated not only out of considerations of simple justice but Metro Manila Governor in concurrent capacity as Minister of Human Settlements. x x
also out of sheer necessity - the national coffers were empty, or nearly so. x
In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to xxx xxx xxx
set aside technicalities and formalities that merely serve to delay or impede 11. At the outset, however, it must be pointed out that based on the Official Report
judicious resolution. This Court prefers to have such cases resolved on the merits at of the Minister of Budget, the total salaries of former President Marcos as President
the Sandiganbayan. But substantial justice to the Filipino people and to all parties form 1966 to 1976 was P60,000 a year and from 1977 to 1985, P100,000 a year;
concerned, not mere legalisms or perfection of form, should now be relentlessly and while that of the former First Lady, Imelda R. Marcos, as Minister of Human
firmly pursued. Almost two decades have passed since the government initiated its Settlements from June 1976 to February 22-25, 1986 was P75,000 a year xxx.
search for and reversion of such ill-gotten wealth. The definitive resolution of such ANALYSIS OF RESPONDENTS
cases on the merits is thus long overdue. If there is proof of illegal acquisition, LEGITIMATE INCOME
accumulation, misappropriation, fraud or illicit conduct, let it be brought out now. Let xxx
the ownership of these funds and other assets be finally determined and resolved 12. Based on available documents, the ITRs of the Marcoses for the years 1965-1975
with dispatch, free from all the delaying technicalities and annoying procedural were filed under Tax Identification No. 1365-055-1. For the years 1976 until 1984,
sidetracks.[23] the returns were filed under Tax Identification No. M 6221-J 1117-A-9.
We thus take cognizance of this case and settle with finality all the issues therein. 13. The data contained in the ITRs and Balance Sheet filed by the Marcoses are
ISSUES BEFORE THIS COURT summarized and attached to the reports in the following schedules:
The crucial issues which this Court must resolve are: (1) whether or not respondents Schedule A:
raised any genuine issue of fact which would either justify or negate summary Schedule of Income (Annex T hereof);
judgment; and (2) whether or not petitioner Republic was able to prove its case for Schedule B:
forfeiture in accordance with Sections 2 and 3 of RA 1379. Schedule of Income Tax Paid (Annex T-1 hereof);
(1) THE PROPRIETY OF SUMMARY JUDGMENT Schedule C:
We hold that respondent Marcoses failed to raise any genuine issue of fact in their Schedule of Net Disposable Income (Annex T-2 hereof);
pleadings. Thus, on motion of petitioner Republic, summary judgment should take Schedule D:
place as a matter of right. Schedule of Networth Analysis (Annex T-3 hereof).
In the early case of Auman vs. Estenzo[24], summary judgment was described as a 14. As summarized in Schedule A (Annex T hereof), the Marcoses
judgment which a court may render before trial but after both parties have reported P16,408,442.00 or US$2,414,484.91 in total income over a period of 20
pleaded. It is ordered by the court upon application by one party, supported by years from 1965 to 1984. The sources of income are as follows:
affidavits, depositions or other documents, with notice upon the adverse party who Official Salaries - P 2,627,581.00 - 16.01%
may in turn file an opposition supported also by affidavits, depositions or other Legal Practice - 11,109,836.00 - 67.71%
documents. This is after the court summarily hears both parties with their respective Farm Income - 149,700.00 - .91%
proofs and finds that there is no genuine issue between them. Summary judgment is Others - 2,521,325.00 - 15.37%
sanctioned in this jurisdiction by Section 1, Rule 35 of the 1997 Rules of Civil Total P16,408,442.00 - 100.00%
Procedure: 15. FMs official salary pertains to his compensation as Senate President in 1965 in
SECTION 1. Summary judgment for claimant.- A party seeking to recover upon a the amount of P15,935.00 and P1,420,000.00 as President of the Philippines during
claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time the period 1966 until 1984. On the other hand, Imelda reported salaries and
after the pleading in answer thereto has been served, move with supporting allowances only for the years 1979 to 1984 in the amount of P1,191,646.00. The
affidavits, depositions or admissions for a summary judgment in his favor upon all or records indicate that the reported income came from her salary from the Ministry of
any part thereof.[25] Human Settlements and allowances from Food Terminal, Inc., National Home
Summary judgment is proper when there is clearly no genuine issue as to any Mortgage Finance Corporation, National Food Authority Council, Light Rail Transit
material fact in the action.[26] The theory of summary judgment is that, although an Authority and Home Development Mutual Fund.
answer may on its face appear to tender issues requiring trial, if it is demonstrated 16. Of the P11,109,836.00 in reported income from legal practice, the amount
by affidavits, depositions or admissions that those issues are not genuine but sham of P10,649,836.00 or 96% represents receivables from prior years during the period
or fictitious, the Court is justified in dispensing with the trial and rendering summary 1967 up to 1984.
judgment for petitioner Republic. 17. In the guise of reporting income using the cash method under Section 38 of the
The Solicitor General made a very thorough presentation of its case for forfeiture: National Internal Revenue Code, FM made it appear that he had an extremely
xxx profitable legal practice before he became a President (FM being barred by law from
practicing his law profession during his entire presidency) and that, incredibly, he
was still receiving payments almost 20 years after. The only problem is that in his H. THE AZIO-VERSO-VIBUR
Balance Sheet attached to his 1965 ITR immediately preceeding his ascendancy to FOUNDATION ACCOUNTS
the presidency he did not show any Receivables from client at all, much less 24. On June 11, 1971, Ferdinand Marcos issued a written order to Dr. Theo Bertheau,
the P10,65-M that he decided to later recognize as income. There are no documents legal counsel of Schweizeresche Kreditanstalt or SKA, also known as Swiss Credit
showing any withholding tax certificates. Likewise, there is nothing on record that Bank, for him to establish the AZIO Foundation. On the same date, Marcos executed
will show any known Marcos client as he has no known law office. As previously a power of attorney in favor of Roberto S. Benedicto empowering him to transact
stated, his networth was a mere P120,000.00 in December, 1965. The joint income business in behalf of the said foundation. Pursuant to the said Marcos mandate,
tax returns of FM and Imelda cannot, therefore, conceal the skeletons of their AZIO Foundation was formed on June 21, 1971 in Vaduz. Walter Fessler and Ernst
kleptocracy. Scheller, also of SKA Legal Service, and Dr. Helmuth Merling from Schaan were
18. FM reported a total of P2,521,325.00 as Other Income for the years 1972 up to designated as members of the Board of Trustees of the said foundation. Ferdinand
1976 which he referred to in his return as Miscellaneous Items and Various Marcos was named first beneficiary and the Marcos Foundation, Inc. was second
Corporations. There is no indication of any payor of the dividends or earnings. beneficiary. On November 12, 1971, FM again issued another written order naming
19. Spouses Ferdinand and Imelda did not declare any income from any deposits Austrahil PTY Ltd. In Sydney, Australia, as the foundations first and sole
and placements which are subject to a 5% withholding tax. The Bureau of Internal beneficiary. This was recorded on December 14, 1971.
Revenue attested that after a diligent search of pertinent records on file with the 25. In an undated instrument, Marcos changed the first and sole beneficiary to
Records Division, they did not find any records involving the tax transactions of CHARIS FOUNDATION. This change was recorded on December 4, 1972.
spouses Ferdinand and Imelda in Revenue Region No. 1, Baguio City, Revenue 26. On August 29, 1978, the AZIO FOUNDATION was renamed to VERSO
Region No.4A, Manila, Revenue Region No. 4B1, Quezon City and Revenue No. 8, FOUNDATION. The Board of Trustees remained the same. On March 11, 1981, Marcos
Tacloban, Leyte. Likewise, the Office of the Revenue Collector of Batac. Further, BIR issued a written directive to liquidated VERSO FOUNDATION and to transfer all its
attested that no records were found on any filing of capital gains tax return involving assets to account of FIDES TRUST COMPANY at Bank Hofman in Zurich under the
spouses FM and Imelda covering the years 1960 to 1965. account Reference OSER. The Board of Trustees decided to dissolve the foundation
20. In Schedule B, the taxable reported income over the twenty-year period on June 25, 1981.
was P14,463,595.00 which represents 88% of the gross income. The Marcoses paid 27. In an apparent maneuver to bury further the secret deposits beneath the thick
income taxes totaling P8,233,296.00 or US$1,220,667.59. The business expenses in layers of corporate entities, FM effected the establishment of VIBUR FOUNDATION on
the amount of P861,748.00 represent expenses incurred for subscription, postage, May 13, 1981 in Vaduz. Atty. Ivo Beck and Limag Management, a wholly-owned
stationeries and contributions while the other deductions in the amount of subsidiary of Fides Trust, were designated as members of the Board of Trustees. The
P567,097.00 represents interest charges, medicare fees, taxes and licenses. The account was officially opened with SKA on September 10, 1981. The beneficial
total deductions in the amount of P1,994,845.00 represents 12% of the total gross owner was not made known to the bank since Fides Trust Company acted as
income. fiduciary. However, comparison of the listing of the securities in the safe deposit
21. In Schedule C, the net cumulative disposable income amounts to P6,756,301.00 register of the VERSO FOUNDATIONas of February 27, 1981 with that of VIBUR
or US$980,709.77. This is the amount that represents that portion of the Marcoses FOUNDATION as of December 31, 1981 readily reveals that exactly the same
income that is free for consumption, savings and investments. The amount is arrived securities were listed.
at by adding back to the net income after tax the personal and additional 28. Under the foregoing circumstances, it is certain that the VIBUR FOUNDATION is
exemptions for the years 1965-1984, as well as the tax-exempt salary of the the beneficial successor of VERSO FOUNDATION.
President for the years 1966 until 1972. 29. On March 18, 1986, the Marcos-designated Board of Trustees decided to
22. Finally, the networth analysis in Schedule D, represents the total accumulated liquidate VIBUR FOUNDATION. A notice of such liquidation was sent to the Office of
networth of spouses, Ferdinand and Imelda. Respondents Balance Sheet attached to the Public Register on March 21, 1986.However, the bank accounts and respective
their 1965 ITR, covering the year immediately preceding their ascendancy to the balances of the said VIBUR FOUNDATION remained with SKA. Apparently, the
presidency, indicates an ending networth of P120,000.00 which FM declared as liquidation was an attempt by the Marcoses to transfer the foundations funds to
Library and Miscellaneous assets. In computing for the networth, the income another account or bank but this was prevented by the timely freeze order issued by
approach was utilized. Under this approach, the beginning capital is increased or the Swiss authorities. One of the latest documents obtained by the PCGG from the
decreased, as the case may be, depending upon the income earned or loss Swiss authorities is a declaration signed by Dr. Ivo Beck (the trustee) stating that the
incurred. Computations establish the total networth of spouses Ferdinand and beneficial owner of VIBUR FOUNDATION is Ferdinand E. Marcos. Another document
Imelda, for the years 1965 until 1984 in the total amount of US$957,487.75, signed by G. Raber of SKA shows that VIBUR FOUNDATION is owned by the Marcos
assuming the income from legal practice is real and valid x x x. Familie
G. THE SECRET MARCOS DEPOSITS 30. As of December 31, 1989, the balance of the bank accounts of VIBUR
IN SWISS BANKS FOUNDATION with SKA, Zurich, under the General Account No. 469857 totaled
23. The following presentation very clearly and overwhelmingly show in detail how $3,597,544.00
both respondents clandestinely stashed away the countrys wealth to Switzerland I. XANDY-WINTROP: CHARIS-SCOLARI-
and hid the same under layers upon layers of foundations and other corporate VALAMO-SPINUS-AVERTINA
entities to prevent its detection. Through their dummies/nominees, fronts or agents FOUNDATION ACCOUNTS
who formed those foundations or corporate entities, they opened and maintained 31. This is the most intricate and complicated account group. As the Flow Chart
numerous bank accounts. But due to the difficulty if not the impossibility of hereof shows, two (2) groups under the foundation organized by Marcos
detecting and documenting all those secret accounts as well as the enormity of the dummies/nominees for FMs benefit, eventually joined together and became one (1)
deposits therein hidden, the following presentation is confined to five identified account group under the AVERTINA FOUNDATION for the benefit of both FM and
accounts groups, with balances amounting to about $356-M with a reservation for Imelda. This is the biggest group from where the $50-M investment fund of the
the filing of a supplemental or separate forfeiture complaint should the need arise.
Marcoses was drawn when they bought the Central Banks dollar-denominated the Regulations. FM gave a power of attorney to Roberto S. Benedicto on February
treasury notes with high-yielding interests. 15, 1972 to act in his behalf with regard to Charis Foundation.
32. On March 20, 1968, after his second year in the presidency, Marcos opened bank 39. On December 13, 1974, Charis Foundation was renamed Scolari Foundation but
accounts with SKA using an alias or pseudonym WILLIAM SAUNDERS, apparently to the directors remained the same. On March 11, 1981 FM ordered in writing that the
hide his true identity. The next day, March 21, 1968, his First Lady, Mrs. Imelda Valamo Foundation be liquidated and all its assets be transferred to Bank Hofmann,
Marcos also opened her own bank accounts with the same bank using an American- AG in favor of Fides Trust Company under the account Reference OMAL. The Board of
sounding alias, JANE RYAN. Found among the voluminous documents in Malacaang Directors decided on the immediate dissolution of Valamo Foundation on June 25,
shortly after they fled to Hawaii in haste that fateful night of February 25, 1986, 1981.
were accomplished forms for Declaration/Specimen Signatures submitted by the 40 The SPINUS FOUNDATION was established on May 13, 1981 in Vaduz with Atty.
Marcos couple. Under the caption signature(s) Ferdinand and Imelda signed their Ivo Beck and Limag Management, a wholly-owned subsidiary of Fides Trust Co., as
real names as well as their respective aliases underneath. These accounts were members of the Foundations Board of Directors. The account was officially opened
actively operated and maintained by the Marcoses for about two (2) years until their with SKA on September 10, 1981. The beneficial owner of the foundation was not
closure sometime in February, 1970 and the balances transferred to XANDY made known to the bank since Fides Trust Co. acted as fiduciary. However, the list of
FOUNDATION. securities in the safe deposit register of Valamo Foundation as of December 31,
33. The XANDY FOUNDATION was established on March 3, 1970 in Vaduz. C.W. 1980 are practically the same with those listed in the safe deposit register of Spinus
Fessler, C. Souviron and E. Scheller were named as members of the Board of Foundation as of December 31, 1981. Under the circumstances, it is certain that the
Trustees. Spinus Foundation is the beneficial successor of the Valamo Foundation.
34. FM and Imelda issued the written mandate to establish the foundation to Markus 41. On September 6, 1982, there was a written instruction from Spinus Foundation
Geel of SKA on March 3, 1970. In the handwritten Regulations signed by the Marcos to SKA to close its Swiss Franc account and transfer the balance to Avertina
couple as well as in the type-written Regulations signed by Markus Geel both dated Foundation. In July/August, 1982, several transfers from the foundations German
February 13, 1970, the Marcos spouses were named the first beneficiaries, the marks and US dollar accounts were made to Avertina Category CAR totaling DM
surviving spouse as the second beneficiary and the Marcos children Imee, Ferdinand, 29.5-M and $58-M, respectively. Moreover, a comparison of the list of securities of
Jr. (Bongbong) and Irene as equal third beneficiaries. the Spinus Foundation as of February 3, 1982 with the safe deposit slips of the
35. The XANDY FOUNDATION was renamed WINTROP FOUNDATION on August 29, Avertina Foundation Category CAR as of August 19, 1982 shows that all the
1978. The Board of Trustees remained the same at the outset. However, on March securities of Spinus were transferred to Avertina.
27, 1980, Souviron was replaced by Dr. Peter Ritter. On March 10. 1981, Ferdinand J. TRINIDAD-RAYBY-PALMY
and Imelda Marcos issued a written order to the Board of Wintrop to liquidate the FOUNDATION ACCOUNTS
foundation and transfer all its assets to Bank Hofmann in Zurich in favor of FIDES 42. The Trinidad Foundation was organized on August 26, 1970 in Vaduz with C.W.
TRUST COMPANY. Later, WINTROP FOUNDATION was dissolved. Fessler and E. Scheller of SKA and Dr. Otto Tondury as the foundations
36. The AVERTINA FOUNDATION was established on May 13, 1981 in Vaduz with Atty. directors. Imelda issued a written mandate to establish the foundation to Markus
Ivo Beck and Limag Management, a wholly-owned subsidiary of FIDES TRUST CO., as Geel on August 26, 1970. The regulations as well as the agreement, both dated
members of the Board of Trustees. Two (2) account categories, namely: CAR and August 28, 1970 were likewise signed by Imelda. Imelda was named the first
NES, were opened on September 10, 1981. The beneficial owner of AVERTINA was beneficiary and her children Imelda (Imee), Ferdinand, Jr. (Bongbong) and, Irene
not made known to the bank since the FIDES TRUST CO. acted as fiduciary. However, were named as equal second beneficiaries.
the securities listed in the safe deposit register of WINTROP FOUNDATION Category 43. Rayby Foundation was established on June 22, 1973 in Vaduz with Fessler,
R as of December 31, 1980 were the same as those listed in the register of Scheller and Ritter as members of the board of directors. Imelda issued a written
AVERTINA FOUNDATION Category CAR as of December 31, 1981. Likewise, the mandate to Dr. Theo Bertheau to establish the foundation with a note that the
securities listed in the safe deposit register of WINTROP FOUNDATION Category S as foundations capitalization as well as the cost of establishing it be debited against the
of December 31, 1980 were the same as those listed in the register of Avertina account of Trinidad Foundation. Imelda was named the first and only beneficiary of
Category NES as of December 31, 1981.Under the circumstances, it is certain that Rayby foundation. According to written information from SKA dated November 28,
the beneficial successor of WINTROP FOUNDATION is AVERTINA FOUNDATION. The 1988, Imelda apparently had the intention in 1973 to transfer part of the assets of
balance of Category CAR as of December 31, 1989 amounted to US$231,366,894.00 Trinidad Foundation to another foundation, thus the establishment of Rayby
while that of Category NES as of 12-31-83 was US$8,647,190.00. Latest documents Foundation. However, transfer of assets never took place. On March 10, 1981,
received from Swiss authorities included a declaration signed by IVO Beck stating Imelda issued a written order to transfer all the assets of Rayby Foundation to
that the beneficial owners of AVERTINA FOUNDATION are FM and Imelda. Another Trinidad Foundation and to subsequently liquidate Rayby. On the same date, she
document signed by G. Raber of SKA indicates that Avertina Foundation is owned by issued a written order to the board of Trinidad to dissolve the foundation and
the Marcos Families. transfer all its assets to Bank Hofmann in favor of Fides Trust Co. Under the account
37. The other groups of foundations that eventually joined AVERTINA were also Reference Dido, Rayby was dissolved on April 6, 1981 and Trinidad was liquidated on
established by FM through his dummies, which started with the CHARIS August 3, 1981.
FOUNDATION. 44. The PALMY FOUNDATION was established on May 13, 1981 in Vaduz with Dr. Ivo
38. The CHARIS FOUNDATION was established in VADUZ on December 27, 1971. Beck and Limag Management, a wholly-owned subsidiary of Fides Trust Co, as
Walter Fessler and Ernst Scheller of SKA and Dr. Peter Ritter were named members of the Foundations Board of Directors. The account was officially opened
as directors. Dr. Theo Bertheau, SKA legal counsel, acted as founding director in with the SKA on September 10, 1981. The beneficial owner was not made known to
behalf of FM by virtue of the mandate and agreement dated November 12, 1971. FM the bank since Fides Trust Co. acted as fiduciary. However, when one compares the
himself was named the first beneficiary and Xandy Foundation as second beneficiary listing of securities in the safe deposit register of Trinidad Foundation as of
in accordance with the handwritten instructions of FM on November 12, 1971 and December 31,1980 with that of the Palmy Foundation as of December 31, 1980, one
can clearly see that practically the same securities were listed. Under the
circumstances, it is certain that the Palmy Foundation is the beneficial successor of 53. All the five (5) group accounts in the over-all flow chart have a total balance of
the Trinidad Foundation. about Three Hundred Fifty Six Million Dollars ($356,000,000.00) as shown by Annex
45. As of December 31, 1989, the ending balance of the bank accounts of Palmy R-5 hereto attached as integral part hereof.
Foundation under General Account No. 391528 is $17,214,432.00. x x x x x x.[27]
46. Latest documents received from Swiss Authorities included a declaration signed Respondents Imelda R. Marcos, Maria Imelda M. Manotoc, Irene M. Araneta and
by Dr. Ivo Beck stating that the beneficial owner of Palmy Foundation is Imelda. Ferdinand Marcos, Jr., in their answer, stated the following:
Another document signed by Raber shows that the said Palmy Foundation is owned xxx xxx xxx
by Marcos Familie. 4. Respondents ADMIT paragraphs 3 and 4 of the Petition.
K. ROSALYS-AGUAMINA 5. Respondents specifically deny paragraph 5 of the Petition in so far as it states that
FOUNDATION ACCOUNTS summons and other court processes may be served on Respondent Imelda R. Marcos
47. Rosalys Foundation was established in 1971 with FM as the beneficiary. Its at the stated address the truth of the matter being that Respondent Imelda R.
Articles of Incorporation was executed on September 24, 1971 and its By-Laws on Marcos may be served with summons and other processes at No. 10-B Bel Air
October 3, 1971. This foundation maintained several accounts with Swiss Bank Condominium 5022 P. Burgos Street, Makati, Metro Manila, and ADMIT the rest.
Corporation (SBC) under the general account 51960 where most of the bribe monies xxx xxx xxx
from Japanese suppliers were hidden. 10. Respondents ADMIT paragraph 11 of the Petition.
48. On December 19, 1985, Rosalys Foundation was liquidated and all its assets 11. Respondents specifically DENY paragraph 12 of the Petition for lack of
were transferred to Aguamina Corporations (Panama) Account No. 53300 with SBC. knowledge sufficient to form a belief as to the truth of the allegation since
The ownership by Aguamina Corporation of Account No. 53300 is evidenced by an Respondents were not privy to the transactions and that they cannot remember
opening account documents from the bank. J. Christinaz and R.L. Rossier, First Vice- exactly the truth as to the matters alleged.
President and Senior Vice President, respectively, of SBC, Geneva issued a 12. Respondents specifically DENY paragraph 13 of the Petition for lack of
declaration dated September 3, 1991 stating that the by-laws dated October 3, 1971 knowledge or information sufficient to form a belief as to the truth of the allegation
governing Rosalys Foundation was the same by-law applied to Aguamina since Respondents cannot remember with exactitude the contents of the alleged
Corporation Account No. 53300. They further confirmed that no change of beneficial ITRs and Balance Sheet.
owner was involved while transferring the assets of Rosalys to Aguamina. Hence, FM 13. Respondents specifically DENY paragraph 14 of the Petition for lack of
remains the beneficiary of Aguamina Corporation Account No. 53300. knowledge or information sufficient to form a belief as to the truth of the allegation
As of August 30, 1991, the ending balance of Account No. 53300 amounted to since Respondents cannot remember with exactitude the contents of the alleged
$80,566,483.00. ITRs.
L. MALER FOUNDATION ACCOUNTS 14. Respondents specifically DENY paragraph 15 of the Petition for lack of
49. Maler was first created as an establishment. A statement of its rules and knowledge or information sufficient to form a belief as to the truth of the allegation
regulations was found among Malacaang documents. It stated, among others, that since Respondents cannot remember with exactitude the contents of the alleged
50% of the Companys assets will be for sole and full right disposal of FM and Imelda ITRs.
during their lifetime, which the remaining 50% will be divided in equal parts among 15. Respondents specifically DENY paragraph 16 of the Petition for lack of
their children. Another Malacaang document dated October 19,1968 and signed by knowledge or information sufficient to form a belief as to the truth of the allegation
Ferdinand and Imelda pertains to the appointment of Dr. Andre Barbey and Jean since Respondents cannot remember with exactitude the contents of the alleged
Louis Sunier as attorneys of the company and as administrator and manager of all ITRs.
assets held by the company. The Marcos couple, also mentioned in the said 16. Respondents specifically DENY paragraph 17 of the Petition insofar as it
document that they bought the Maler Establishment from SBC, Geneva. On the attributes willful duplicity on the part of the late President Marcos, for being false,
same date, FM and Imelda issued a letter addressed to Maler Establishment, stating the same being pure conclusions based on pure assumption and not allegations of
that all instructions to be transmitted with regard to Maler will be signed with the fact; and specifically DENY the rest for lack of knowledge or information sufficient to
word JOHN LEWIS. This word will have the same value as the couples own personal form a belief as to the truth of the allegation since Respondents cannot remember
signature. The letter was signed by FM and Imelda in their signatures and as John with exactitude the contents of the alleged ITRs or the attachments thereto.
Lewis. 17. Respondents specifically DENY paragraph 18 of the Petition for lack of
50. Maler Establishment opened and maintained bank accounts with SBC, Geneva. knowledge or information sufficient to form a belief as to the truth of the allegation
The opening bank documents were signed by Dr. Barbey and Mr. Sunnier as since Respondents cannot remember with exactitude the contents of the alleged
authorized signatories. ITRs.
51. On November 17, 1981, it became necessary to transform Maler Establishment 18. Respondents specifically DENY paragraph 19 of the Petition for lack of
into a foundation. Likewise, the attorneys were changed to Michael Amaudruz, et. al. knowledge or information sufficient to form a belief as to the truth of the allegation
However, administration of the assets was left to SBC. The articles of incorporation since Respondents cannot remember with exactitude the contents of the alleged
of Maler Foundation registered on November 17, 1981 appear to be the same ITRs and that they are not privy to the activities of the BIR.
articles applied to Maler Establishment. On February 28, 1984, Maler Foundation 19. Respondents specifically DENY paragraph 20 of the Petition for lack of
cancelled the power of attorney for the management of its assets in favor of SBC knowledge or information sufficient to form a belief as to the truth of the allegation
and transferred such power to Sustrust Investment Co., S.A. since Respondents cannot remember with exactitude the contents of the alleged
52. As of June 6, 1991, the ending balance of Maler Foundations Account Nos. ITRs.
254,508 BT and 98,929 NY amount SF 9,083,567 and SG 16,195,258, respectively, 20. Respondents specifically DENY paragraph 21 of the Petition for lack of
for a total of SF 25,278,825.00. GM only until December 31, 1980. This account was knowledge or information sufficient to form a belief as to the truth of the allegation
opened by Maler when it was still an establishment which was subsequently since Respondents cannot remember with exactitude the contents of the alleged
transformed into a foundation. ITRs.
21. Respondents specifically DENY paragraph 22 of the Petition for lack of (f) Memorandum dated December 12, 2000 of Mrs. Marcos and Memorandum dated
knowledge or information sufficient to form a belief as to the truth of the allegation December 17, 2000 of the Marcos children;
since Respondents cannot remember with exactitude the contents of the alleged (g) Manifestation dated May 26, 1998; and
ITRs. (h) General/Supplemental Agreement dated December 23, 1993.
22. Respondents specifically DENY paragraph 23 insofar as it alleges that An examination of the foregoing pleadings is in order.
Respondents clandestinely stashed the countrys wealth in Switzerland and hid the Respondents Answer dated October 18, 1993.
same under layers and layers of foundation and corporate entities for being false, In their answer, respondents failed to specifically deny each and every allegation
the truth being that Respondents aforesaid properties were lawfully acquired. contained in the petition for forfeiture in the manner required by the rules. All they
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the gave were stock answers like they have no sufficient knowledge or they could not
Petition for lack of knowledge or information sufficient to form a belief as to the truth recall because it happened a long time ago, and, as to Mrs. Marcos, the funds were
of the allegation since Respondents were not privy to the transactions regarding the lawfully acquired, without stating the basis of such assertions.
alleged Azio-Verso-Vibur Foundation accounts, except that as to Respondent Imelda Section 10, Rule 8 of the 1997 Rules of Civil Procedure, provides:
R. Marcos she specifically remembers that the funds involved were lawfully acquired. A defendant must specify each material allegation of fact the truth of which he does
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36,37, 38, 39, 40, not admit and, whenever practicable, shall set forth the substance of the matters
and 41 of the Petition for lack of knowledge or information sufficient to form a belief upon which he relies to support his denial. Where a defendant desires to deny only a
as to the truth of the allegations since Respondents are not privy to the transactions part of an averment, he shall specify so much of it as is true and material and shall
and as to such transaction they were privy to they cannot remember with exactitude deny the remainder. Where a defendant is without knowledge or information
the same having occurred a long time ago, except that as to Respondent Imelda R. sufficient to form a belief as to the truth of a material averment made in the
Marcos she specifically remembers that the funds involved were lawfully acquired. complaint, he shall so state, and this shall have the effect of a denial. [28]
25. Respondents specifically DENY paragraphs 42, 43, 44, 45, and 46, of the Petition The purpose of requiring respondents to make a specific denial is to make them
for lack of knowledge or information sufficient to form a belief as to the truth of the disclose facts which will disprove the allegations of petitioner at the trial, together
allegations since Respondents were not privy to the transactions and as to such with the matters they rely upon in support of such denial. Our jurisdiction adheres to
transaction they were privy to they cannot remember with exactitude the same this rule to avoid and prevent unnecessary expenses and waste of time by
having occurred a long time ago, except that as to Respondent Imelda R. Marcos she compelling both parties to lay their cards on the table, thus reducing the controversy
specifically remembers that the funds involved were lawfully acquired. to its true terms. As explained in Alonso vs. Villamor,[29]
26. Respondents specifically DENY paragraphs 49, 50, 51 and 52, of the Petition for A litigation is not a game of technicalities in which one, more deeply schooled and
lack of knowledge or information sufficient to form a belief as to the truth of the skilled in the subtle art of movement and position, entraps and destroys the other. It
allegations since Respondents were not privy to the transactions and as to such is rather a contest in which each contending party fully and fairly lays before the
transaction they were privy to they cannot remember with exactitude the same court the facts in issue and then, brushing aside as wholly trivial and indecisive all
having occurred a long time ago, except that as to Respondent Imelda R. Marcos she imperfections of form and technicalities of procedure, asks that justice be done upon
specifically remembers that the funds involved were lawfully acquired. the merits. Lawsuits, unlike duels, are not to be won by a rapiers thrust.
Upon careful perusal of the foregoing, the Court finds that respondent Mrs. Marcos On the part of Mrs. Marcos, she claimed that the funds were lawfully acquired.
and the Marcos children indubitably failed to tender genuine issues in their answer However, she failed to particularly state the ultimate facts surrounding the lawful
to the petition for forfeiture. A genuine issue is an issue of fact which calls for the manner or mode of acquisition of the subject funds. Simply put, she merely stated in
presentation of evidence as distinguished from an issue which is fictitious and her answer with the other respondents that the funds were lawfully acquired without
contrived, set up in bad faith or patently lacking in substance so as not to constitute detailing how exactly these funds were supposedly acquired legally by them. Even in
a genuine issue for trial. Respondents defenses of lack of knowledge for lack of this case before us, her assertion that the funds were lawfully acquired remains bare
privity or (inability to) recall because it happened a long time ago or, on the part of and unaccompanied by any factual support which can prove, by the presentation of
Mrs. Marcos, that the funds were lawfully acquired are fully insufficient to tender evidence at a hearing, that indeed the funds were acquired legitimately by the
genuine issues. Respondent Marcoses defenses were a sham and evidently Marcos family.
calibrated to compound and confuse the issues. Respondents denials in their answer at the Sandiganbayan were based on their
The following pleadings filed by respondent Marcoses are replete with indications of alleged lack of knowledge or information sufficient to form a belief as to the truth of
a spurious defense: the allegations of the petition.
(a) Respondents' Answer dated October 18, 1993; It is true that one of the modes of specific denial under the rules is a denial through
(b) Pre-trial Brief dated October 4, 1999 of Mrs. Marcos, Supplemental Pre-trial Brief a statement that the defendant is without knowledge or information sufficient to
dated October 19, 1999 of Ferdinand, Jr. and Mrs. Imee Marcos-Manotoc adopting the form a belief as to the truth of the material averment in the complaint. The question,
pre-trial brief of Mrs. Marcos, and Manifestation dated October 19, 1999 of Irene however, is whether the kind of denial in respondents answer qualifies as the
Marcos-Araneta adopting the pre-trial briefs of her co- respondents; specific denial called for by the rules. We do not think so. In Morales vs. Court of
(c) Opposition to Motion for Summary Judgment dated March 21, 2000, filed by Mrs. Appeals,[30] this Court ruled that if an allegation directly and specifically charges a
Marcos which the other respondents (Marcos children) adopted; party with having done, performed or committed a particular act which the latter did
(d) Demurrer to Evidence dated May 2, 2000 filed by Mrs. Marcos and adopted by not in fact do, perform or commit, a categorical and express denial must be made.
the Marcos children; Here, despite the serious and specific allegations against them, the Marcoses
(e) Motion for Reconsideration dated September 26, 2000 filed by Mrs. Marcos; responded by simply saying that they had no knowledge or information sufficient to
Motion for Reconsideration dated October 5, 2000 jointly filed by Mrs. Manotoc and form a belief as to the truth of such allegations. Such a general, self-serving claim of
Ferdinand, Jr., and Supplemental Motion for Reconsideration dated October 9, 2000 ignorance of the facts alleged in the petition for forfeiture was insufficient to raise an
likewise jointly filed by Mrs. Manotoc and Ferdinand, Jr.; issue. Respondent Marcoses should have positively stated how it was that they were
supposedly ignorant of the facts alleged.[31]
To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for the same having occurred a long time ago, except as to respondent Imelda R.
forfeiture stated: Marcos, she specifically remembers that the funds involved were lawfully acquired.
23. The following presentation very clearly and overwhelmingly show in detail how 25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for
both respondents clandestinely stashed away the countrys wealth to Switzerland lack of knowledge or information sufficient to from a belief as to the truth of the
and hid the same under layers upon layers of foundations and other corporate allegations since respondents were not privy to the transactions and as to such
entities to prevent its detection. Through their dummies/nominees, fronts or agents transaction they were privy to, they cannot remember with exactitude, the same
who formed those foundations or corporate entities, they opened and maintained having occurred a long time ago, except that as to respondent Imelda R. Marcos, she
numerous bank accounts. But due to the difficulty if not the impossibility of specifically remembers that the funds involved were lawfully acquired.
detecting and documenting all those secret accounts as well as the enormity of the 26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the petition for
deposits therein hidden, the following presentation is confined to five identified lack of knowledge and information sufficient to form a belief as to the truth of the
accounts groups, with balances amounting to about $356-M with a reservation for allegations since respondents were not privy to the transactions and as to such
the filing of a supplemental or separate forfeiture complaint should the need arise. [32] transaction they were privy to they cannot remember with exactitude the same
Respondents lame denial of the aforesaid allegation was: having occurred a long time ago, except that as to respondent Imelda R. Marcos, she
22. Respondents specifically DENY paragraph 23 insofar as it alleges that specifically remembers that the funds involved were lawfully acquired.
Respondents clandestinely stashed the countrys wealth in Switzerland and hid the The matters referred to in paragraphs 23 to 26 of the respondents answer pertained
same under layers and layers of foundations and corporate entities for being false, to the creation of five groups of accounts as well as their respective ending balances
the truth being that Respondents aforesaid properties were lawfully acquired. [33] and attached documents alleged in paragraphs 24 to 52 of the Republics petition for
Evidently, this particular denial had the earmark of what is called in the law on forfeiture. Respondent Imelda R. Marcos never specifically denied the existence of
pleadings as a negative pregnant, that is, a denial pregnant with the admission of the Swiss funds. Her claim that the funds involved were lawfully acquired was an
the substantial facts in the pleading responded to which are not squarely denied. It acknowledgment on her part of the existence of said deposits. This only reinforced
was in effect an admission of the averments it was directed at. [34] Stated otherwise, her earlier admission of the allegation in paragraph 23 of the petition for forfeiture
a negative pregnant is a form of negative expression which carries with it an regarding the existence of the US$356 million Swiss bank deposits.
affirmation or at least an implication of some kind favorable to the adverse party. It The allegations in paragraphs 47[37] and 48[38] of the petition for forfeiture referring to
is a denial pregnant with an admission of the substantial facts alleged in the the creation and amount of the deposits of the Rosalys-Aguamina Foundation as well
pleading. Where a fact is alleged with qualifying or modifying language and the as the averment in paragraph 52-a[39] of the said petition with respect to the sum of
words of the allegation as so qualified or modified are literally denied, has been held the Swiss bank deposits estimated to be US$356 million were again not specifically
that the qualifying circumstances alone are denied while the fact itself is admitted. denied by respondents in their answer. The respondents did not at all respond to the
[35]
issues raised in these paragraphs and the existence, nature and amount of the Swiss
In the instant case, the material allegations in paragraph 23 of the said petition were funds were therefore deemed admitted by them. As held in Galofa vs. Nee Bon Sing,
[40]
not specifically denied by respondents in paragraph 22 of their answer. The denial if a defendants denial is a negative pregnant, it is equivalent to an admission.
contained in paragraph 22 of the answer was focused on the averment in paragraph Moreover, respondents denial of the allegations in the petition for forfeiture for lack
23 of the petition for forfeiture that Respondents clandestinely stashed the countrys of knowledge or information sufficient to form a belief as to the truth of the
wealth in Switzerland and hid the same under layers and layers of foundations and allegations since respondents were not privy to the transactions was just a
corporate entities. Paragraph 22 of the respondents answer was thus a denial pretense. Mrs. Marcos privity to the transactions was in fact evident from her
pregnant with admissions of the following substantial facts: signatures on some of the vital documents[41]attached to the petition for forfeiture
(1) the Swiss bank deposits existed and which Mrs. Marcos failed to specifically deny as required by the rules.[42]
(2) that the estimated sum thereof was US$356 million as of December, 1990. It is worthy to note that the pertinent documents attached to the petition for
Therefore, the allegations in the petition for forfeiture on the existence of the Swiss forfeiture were even signed personally by respondent Mrs. Marcos and her late
bank deposits in the sum of about US$356 million, not having been specifically husband, Ferdinand E. Marcos, indicating that said documents were within their
denied by respondents in their answer, were deemed admitted by them pursuant to knowledge. As correctly pointed out by Sandiganbayan Justice Francisco Villaruz, Jr.
Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure: in his dissenting opinion:
Material averment in the complaint, xxx shall be deemed admitted when not The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3)
specifically denied. xxx.[36] approving regulations of the Foundations for the distribution of capital and income of
By the same token, the following unsupported denials of respondents in their answer the Foundations to the First and Second beneficiary (who are no other than FM and
were pregnant with admissions of the substantial facts alleged in the Republics his family), 4) opening of bank accounts for the Foundations, 5) changing the names
petition for forfeiture: of the Foundations, 6) transferring funds and assets of the Foundations to other
23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Foundations or Fides Trust, 7) liquidation of the Foundations as substantiated by the
Petition for lack of knowledge or information sufficient to form a belief as to the truth Annexes U to U-168, Petition [for forfeiture] strongly indicate that FM and/or Imelda
of the allegation since respondents were not privy to the transactions regarding the were the real owners of the assets deposited in the Swiss banks, using the
alleged Azio-Verso-Vibur Foundation accounts, except that, as to respondent Imelda Foundations as dummies.[43]
R. Marcos, she specifically remembers that the funds involved were lawfully How could respondents therefore claim lack of sufficient knowledge or information
acquired. regarding the existence of the Swiss bank deposits and the creation of five groups of
24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, accounts when Mrs. Marcos and her late husband personally masterminded and
41 of the Petition for lack of knowledge or information sufficient to form a belief as to participated in the formation and control of said foundations? This is a fact
the truth of the allegations since respondents were not privy to the transactions and respondent Marcoses were never able to explain.
as to such transactions they were privy to, they cannot remember with exactitude Not only that. Respondents' answer also technically admitted the genuineness and
due execution of the Income Tax Returns (ITRs) and the balance sheets of the late
Ferdinand E. Marcos and Imelda R. Marcos attached to the petition for forfeiture, as documents to be deduced at the trial thus made known, in addition to the particular
well as the veracity of the contents thereof. issues of fact and law, it becomes apparent if genuine issues are being put forward
The answer again premised its denials of said ITRs and balance sheets on the necessitating the holding of a trial. Likewise, the parties are obliged not only to
ground of lack of knowledge or information sufficient to form a belief as to the truth make a formal identification and specification of the issues and their proofs, and to
of the contents thereof. Petitioner correctly points out that respondents' denial was put these matters in writing and submit them to the court within the specified period
not really grounded on lack of knowledge or information sufficient to form a belief for the prompt disposition of the action.[50]
but was based on lack of recollection. By reviewing their own records, respondent The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos
Marcoses could have easily determined the genuineness and due execution of the children, merely stated:
ITRs and the balance sheets. They also had the means and opportunity of verifying xxx
the same from the records of the BIR and the Office of the President. They did not. WITNESSES
When matters regarding which respondents claim to have no knowledge or 4.1 Respondent Imelda will present herself as a witness and reserves the right to
information sufficient to form a belief are plainly and necessarily within their present additional witnesses as may be necessary in the course of the trial.
knowledge, their alleged ignorance or lack of information will not be considered a xxx
specific denial.[44] An unexplained denial of information within the control of the DOCUMENTARY EVIDENCE
pleader, or is readily accessible to him, is evasive and is insufficient to constitute an 5.1 Respondent Imelda reserves the right to present and introduce in evidence
effective denial.[45] documents as may be necessary in the course of the trial.
The form of denial adopted by respondents must be availed of with sincerity and in Mrs. Marcos did not enumerate and describe the documents constituting her
good faith, and certainly not for the purpose of confusing the adverse party as to evidence. Neither the names of witnesses nor the nature of their testimony was
what allegations of the petition are really being challenged; nor should it be made stated. What alone appeared certain was the testimony of Mrs. Marcos only who in
for the purpose of delay.[46] In the instant case, the Marcoses did not only present fact had previously claimed ignorance and lack of knowledge. And even then, the
unsubstantiated assertions but in truth attempted to mislead and deceive this Court substance of her testimony, as required by the rules, was not made known either.
by presenting an obviously contrived defense. Such cunning tactics of respondents are totally unacceptable to this Court. We hold
Simply put, a profession of ignorance about a fact which is patently and necessarily that, since no genuine issue was raised, the case became ripe for summary
within the pleaders knowledge or means of knowing is as ineffective as no denial at judgment.
all.[47]Respondents ineffective denial thus failed to properly tender an issue and the OPPOSITION TO MOTION FOR SUMMARY JUDGMENT
averments contained in the petition for forfeiture were deemed judicially admitted DATED MARCH 21, 2000
by them. The opposition filed by Mrs. Marcos to the motion for summary judgment dated
As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.: March 21, 2000 of petitioner Republic was merely adopted by the Marcos children as
Its specific denial of the material allegation of the petition without setting forth the their own opposition to the said motion. However, it was again not accompanied by
substance of the matters relied upon to support its general denial, when such affidavits, depositions or admissions as required by Section 3, Rule 35 of the 1997
matters were plainly within its knowledge and it could not logically pretend Rules on Civil Procedure:
ignorance as to the same, therefore, failed to properly tender on issue.[48] x x x The adverse party may serve opposing affidavits, depositions, or admissions at
Thus, the general denial of the Marcos children of the allegations in the petition for least three (3) days before hearing. After hearing, the judgment sought shall be
forfeiture for lack of knowledge or information sufficient to form a belief as to the rendered forthwith if the pleadings, supporting affidavits, depositions, and
truth of the allegations since they were not privy to the transactions cannot admissions on file, show that, except as to the amount of damages, there is no
rightfully be accepted as a defense because they are the legal heirs and successors- genuine issue as to any material fact and that the moving party is entitled to a
in-interest of Ferdinand E. Marcos and are therefore bound by the acts of their father judgment as a matter of law.[51]
vis-a-vis the Swiss funds. The absence of opposing affidavits, depositions and admissions to contradict the
PRE-TRIAL BRIEF DATED OCTOBER 18, 1993 sworn declarations in the Republics motion only demonstrated that the averments of
The pre-trial brief of Mrs. Marcos was adopted by the three Marcos children. In said such opposition were not genuine and therefore unworthy of belief.
brief, Mrs. Marcos stressed that the funds involved were lawfully acquired. But, as in Demurrer to Evidence dated May 2, 2000;[52]
their answer, they failed to state and substantiate how these funds were acquired Motions for Reconsideration;[53] and Memoranda
lawfully. They failed to present and attach even of Mrs. Marcos and the Marcos children [54]
a single document that would show and prove the truth of their allegations. Section All these pleadings again contained no allegations of facts showing their lawful
6, Rule 18 of the 1997 Rules of Civil Procedure provides: acquisition of the funds. Once more, respondents merely made general denials
The parties shall file with the court and serve on the adverse party, x x x their without alleging facts which would have been admissible in evidence at the hearing,
respective pre-trial briefs which shall contain, among others: thereby failing to raise genuine issues of fact.
xxx Mrs. Marcos insists in her memorandum dated October 21, 2002 that, during the
(d) the documents or exhibits to be presented, stating the purpose thereof; pre-trial, her counsel stated that his client was just a beneficiary of the funds,
xxx contrary to petitioner Republics allegation that Mrs. Marcos disclaimed ownership of
(f) the number and names of the witnesses, and the substance of their respective or interest in the funds.
testimonies.[49] This is yet another indication that respondents presented a fictitious defense
It is unquestionably within the courts power to require the parties to submit their because, during the pre-trial, Mrs. Marcos and the Marcos children denied ownership
pre-trial briefs and to state the number of witnesses intended to be called to the of or interest in the Swiss funds:
stand, and a brief summary of the evidence each of them is expected to give as well PJ Garchitorena:
as to disclose the number of documents to be submitted with a description of the Make of record that as far as Imelda Marcos is concerned through the statement of
nature of each. The tenor and character of the testimony of the witnesses and of the Atty. Armando M. Marcelo that the US$360 million more or less subject matter of the
instant lawsuit as allegedly obtained from the various Swiss Foundations do not show that such issues are not genuine, then summary judgment as prescribed by
belong to the estate of Marcos or to Imelda Marcos herself. Thats your statement of the rules must ensue as a matter of law. [56]
facts? In sum, mere denials, if unaccompanied by any fact which will be admissible in
Atty. MARCELO: evidence at a hearing, are not sufficient to raise genuine issues of fact and will not
Yes, Your Honor. defeat a motion for summary judgment.[57] A summary judgment is one granted
PJ Garchitorena: upon motion of a party for an expeditious settlement of the case, it appearing from
Thats it. Okay. Counsel for Manotoc and Manotoc, Jr. What is your point here? Does the pleadings, depositions, admissions and affidavits that there are no important
the estate of Marcos own anything of the $360 million subject of this case. questions or issues of fact posed and, therefore, the movant is entitled to a
Atty. TECSON: judgment as a matter of law. A motion for summary judgment is premised on the
We joined the Manifestation of Counsel. assumption that the issues presented need not be tried either because these are
PJ Garchitorena: patently devoid of substance or that there is no genuine issue as to any pertinent
You do not own anything? fact. It is a method sanctioned by the Rules of Court for the prompt disposition of a
Atty. TECSON: civil action where there exists no serious controversy.[58] Summary judgment is a
Yes, Your Honor. procedural device for the prompt disposition of actions in which the pleadings raise
PJ Garchitorena: only a legal issue, not a genuine issue as to any material fact. The theory of
Counsel for Irene Araneta? summary judgment is that, although an answer may on its face appear to tender
Atty. SISON: issues requiring trial, if it is established by affidavits, depositions or admissions that
I join the position taken by my other compaeros here, Your Honor. those issues are not genuine but fictitious, the Court is justified in dispensing with
xxx the trial and rendering summary judgment for petitioner.[59]
Atty. SISON: In the various annexes to the petition for forfeiture, petitioner Republic attached
Irene Araneta as heir do (sic) not own any of the amount, Your Honor. [55] sworn statements of witnesses who had personal knowledge of the Marcoses'
We are convinced that the strategy of respondent Marcoses was to confuse participation in the illegal acquisition of funds deposited in the Swiss accounts under
petitioner Republic as to what facts they would prove or what issues they intended the names of five groups or foundations. These sworn statements substantiated the
to pose for the court's resolution. There is no doubt in our mind that they were ill-gotten nature of the Swiss bank deposits. In their answer and other subsequent
leading petitioner Republic, and now this Court, to perplexity, if not trying to drag pleadings, however, the Marcoses merely made general denials of the allegations
this forfeiture case to eternity. against them without stating facts admissible in evidence at the hearing, thereby
Manifestation dated May 26, 1998 filed by MRS. failing to raise any genuine issues of fact.
Marcos; General/Supplemental Compromise Under these circumstances, a trial would have served no purpose at all and would
Agreement dated December 28, 1993 have been totally unnecessary, thus justifying a summary judgment on the petition
These pleadings of respondent Marcoses presented nothing but feigned defenses. In for forfeiture. There were no opposing affidavits to contradict the sworn declarations
their earlier pleadings, respondents alleged either that they had no knowledge of the of the witnesses of petitioner Republic, leading to the inescapable conclusion that
existence of the Swiss deposits or that they could no longer remember anything as it the matters raised in the Marcoses answer were false.
happened a long time ago. As to Mrs. Marcos, she remembered that it was lawfully Time and again, this Court has encountered cases like this which are either only half-
acquired. heartedly defended or, if the semblance of a defense is interposed at all, it is only to
In her Manifestation dated May 26, 1998, Mrs. Marcos stated that: delay disposition and gain time. It is certainly not in the interest of justice to allow
COMES NOW undersigned counsel for respondent Imelda R. Marcos, and before this respondent Marcoses to avail of the appellate remedies accorded by the Rules of
Honorable Court, most respectfully manifests: Court to litigants in good faith, to the prejudice of the Republic and ultimately of the
That respondent Imelda R, Marcos owns 90% of the subject matter of the above- Filipino people. From the beginning, a candid demonstration of respondents good
entitled case, being the sole beneficiary of the dollar deposits in the name of the faith should have been made to the court below.Without the deceptive reasoning
various foundations alleged in the case; and argumentation, this protracted litigation could have ended a long time ago.
That in fact only 10% of the subject matter in the above-entitled case belongs to the Since 1991, when the petition for forfeiture was first filed, up to the present, all
estate of the late President Ferdinand E. Marcos. respondents have offered are foxy responses like lack of sufficient knowledge or lack
In the Compromise/Supplemental Agreements, respondent Marcoses sought to of privity or they cannot recall because it happened a long time ago or, as to Mrs.
implement the agreed distribution of the Marcos assets, including the Swiss Marcos, the funds were lawfully acquired. But, whenever it suits them, they also
deposits. This was, to us, an unequivocal admission of ownership by the Marcoses of claim ownership of 90% of the funds and allege that only 10% belongs to the Marcos
the said deposits. estate. It has been an incredible charade from beginning to end.
But, as already pointed out, during the pre-trial conference, respondent Marcoses In the hope of convincing this Court to rule otherwise, respondents Maria Imelda
denied knowledge as well as ownership of the Swiss funds. Marcos-Manotoc and Ferdinand R. Marcos Jr. contend that "by its positive acts and
Anyway we look at it, respondent Marcoses have put forth no real defense. The facts express admissions prior to filing the motion for summary judgment on March 10,
pleaded by respondents, while ostensibly raising important questions or issues of 2000, petitioner Republic had bound itself to go to trial on the basis of existing
fact, in reality comprised mere verbiage that was evidently wanting in substance issues. Thus, it had legally waived whatever right it had to move for summary
and constituted no genuine issues for trial. judgment."[60]
We therefore rule that, under the circumstances, summary judgment is proper. We do not think so. The alleged positive acts and express admissions of the
In fact, it is the law itself which determines when summary judgment is called for. petitioner did not preclude it from filing a motion for summary judgment.
Under the rules, summary judgment is appropriate when there are no genuine issues Rule 35 of the 1997 Rules of Civil Procedure provides:
of fact requiring the presentation of evidence in a full-blown trial. Even if on their Rule 35
face the pleadings appear to raise issue, if the affidavits, depositions and admissions Summary Judgment
Section 1. Summary judgment for claimant. - A party seeking to recover upon a parties, and there is no limitation on the power of the court to make such
claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any a determination at any stage of the litigation." (emphasis ours)
time after the pleading in answer thereto has been served, move with On the basis of the aforequoted disquisition, "any stage of the litigation" means that
supporting affidavits, depositions or admissions for a summary judgment in his favor "even if the plaintiff has proceeded to trial, this does not preclude him from
upon all or any part thereof. thereafter moving for summary judgment."[66]
Section 2. Summary judgment for defending party. - A party against whom a claim, In the case at bar, petitioner moved for summary judgment after pre-trial and before
counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any its scheduled date for presentation of evidence. Respondent Marcoses argue that, by
time, move with supporting affidavits, depositions or admissions for a summary agreeing to proceed to trial during the pre-trial conference, petitioner "waived" its
judgment in his favor as to all or any part thereof. (Emphasis ours) [61] right to summary judgment.
Under the rule, the plaintiff can move for summary judgment at any time after the This argument must fail in the light of the New York Supreme Court ruling which we
pleading in answer thereto (i.e., in answer to the claim, counterclaim or cross-claim) apply by analogy to this case. In Ecker,[67] the defendant opposed the motion for
has been served."No fixed reglementary period is provided by the Rules. How else summary judgment on a ground similar to that raised by the Marcoses, that is, "that
does one construe the phrase "any time after the answer has been served? plaintiff had waived her right to summary judgment" by her act of proceeding to
This issue is actually one of first impression. No local jurisprudence or authoritative trial. If, as correctly ruled by the New York court, plaintiff was allowed to move for
work has touched upon this matter. This being so, an examination of foreign laws summary judgment even after trial and submission of the case for resolution, more
and jurisprudence, particularly those of the United States where many of our laws so should we permit it in the present case where petitioner moved for summary
and rules were copied, is in order. judgment before trial.
Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to Therefore, the phrase "anytime after the pleading in answer thereto has been
recover upon a claim, counterclaim or cross-claim may move for summary judgment served" in Section 1, Rule 35 of our Rules of Civil Procedure means "at any stage of
at any time after the expiration of 20 days from the commencement of the action or the litigation." Whenever it becomes evident at any stage of the litigation that no
after service of a motion for summary judgment by the adverse party, and that a triable issue exists, or that the defenses raised by the defendant(s) are sham or
party against whom a claim, counterclaim or cross-claim is asserted may move for frivolous, plaintiff may move for summary judgment. A contrary interpretation would
summary judgment at any time. go against the very objective of the Rule on Summary Judgment which is to "weed
However, some rules, particularly Rule 113 of the Rules of Civil Practice of New York, out sham claims or defenses thereby avoiding the expense and loss of time involved
specifically provide that a motion for summary judgment may not be made until in a trial."[68]
issues have been joined, that is, only after an answer has been served. [62] Under said In cases with political undertones like the one at bar, adverse parties will often do
rule, after issues have been joined, the motion for summary judgment may be almost anything to delay the proceedings in the hope that a future administration
made at any stage of the litigation.[63] No fixed prescriptive period is provided. sympathetic to them might be able to influence the outcome of the case in their
Like Rule 113 of the Rules of Civil Practice of New York, our rules also provide that a favor. This is rank injustice we cannot tolerate.
motion for summary judgment may not be made until issues have been joined, The law looks with disfavor on long, protracted and expensive litigation and
meaning, the plaintiff has to wait for the answer before he can move for summary encourages the speedy and prompt disposition of cases. That is why the law and the
judgment.[64] And like the New York rules, ours do not provide for a fixed rules provide for a number of devices to ensure the speedy disposition of cases.
reglementary period within which to move for summary judgment. Summary judgment is one of them.
This being so, the New York Supreme Court's interpretation of Rule 113 of the Rules Faithful therefore to the spirit of the law on summary judgment which seeks to avoid
of Civil Practice can be applied by analogy to the interpretation of Section 1, Rule 35, unnecessary expense and loss of time in a trial, we hereby rule that petitioner
of our 1997 Rules of Civil Procedure. Republic could validly move for summary judgment any time after the respondents
Under the New York rule, after the issues have been joined, the motion for summary answer was filed or, for that matter, at any subsequent stage of the litigation. The
judgment may be made at any stage of the litigation. And what exactly does the fact that petitioner agreed to proceed to trial did not in any way prevent it from
phrase "at any stage of the litigation" mean? In Ecker vs. Muzysh,[65] the New York moving for summary judgment, as indeed no genuine issue of fact was ever validly
Supreme Court ruled: raised by respondent Marcoses.
"PER CURIAM. This interpretation conforms with the guiding principle enshrined in Section 6, Rule 1
Plaintiff introduced her evidence and the defendants rested on the case made by the of the 1997 Rules of Civil Procedure that the "[r]ules should be liberally construed in
plaintiff. The case was submitted. Owing to the serious illness of the trial justice, a order to promote their objective of securing a just, speedy and inexpensive
decision was not rendered within sixty days after the final adjournment of the term disposition of every action and proceeding."[69]
at which the case was tried. With the approval of the trial justice, the plaintiff moved Respondents further allege that the motion for summary judgment was based on
for a new trial under Section 442 of the Civil Practice Act. The plaintiff also moved respondents' answer and other documents that had long been in the records of the
for summary judgment under Rule 113 of the Rules of Civil Practice. The motion case. Thus, by the time the motion was filed on March 10, 2000, estoppel by laches
was opposed mainly on the ground that, by proceeding to trial, the had already set in against petitioner.
plaintiff had waived her right to summary judgment and that the answer and We disagree. Estoppel by laches is the failure or neglect for an unreasonable or
the opposing affidavits raised triable issues. The amount due and unpaid under the unexplained length of time to do that which, by exercising due diligence, could or
contract is not in dispute. The Special Term granted both motions and the should have been done earlier, warranting a presumption that the person has
defendants have appealed. abandoned his right or declined to assert it. [70] In effect, therefore, the principle of
The Special Term properly held that the answer and the opposing affidavits raised no laches is one of estoppel because "it prevents people who have slept on their rights
triable issue. Rule 113 of the Rules of Civil Practice and the Civil Practice Act from prejudicing the rights of third parties who have placed reliance on the inaction
prescribe no limitation as to the time when a motion for summary of the original parties and their successors-in-interest".[71]
judgment must be made. The object of Rule 113 is to empower the court to
summarily determine whether or not a bona fide issue exists between the
A careful examination of the records, however, reveals that petitioner was in fact That spouses Ferdinand and Imelda Marcos were public officials during the time
never remiss in pursuing its case against respondent Marcoses through every material to the instant case was never in dispute. Paragraph 4 of respondent
remedy available to it, including the motion for summary judgment. Marcoses' answer categorically admitted the allegations in paragraph 4 of the
Petitioner Republic initially filed its motion for summary judgment on October 18, petition for forfeiture as to the personal circumstances of Ferdinand E. Marcos as a
1996. The motion was denied because of the pending compromise agreement public official who served without interruption as Congressman, Senator, Senate
between the Marcoses and petitioner. But during the pre-trial conference, the President and President of the Republic of the Philippines from December 1, 1965 to
Marcoses denied ownership of the Swiss funds, prompting petitioner to file another February 25, 1986.[77] Likewise, respondents admitted in their answer the contents of
motion for summary judgment now under consideration by this Court. It was the paragraph 5 of the petition as to the personal circumstances of Imelda R. Marcos
subsequent events that transpired after the answer was filed, therefore, which who once served as a member of the Interim Batasang Pambansa from 1978 to
prevented petitioner from filing the questioned motion. It was definitely not because 1984 and as Metro Manila Governor, concurrently Minister of Human Settlements,
of neglect or inaction that petitioner filed the (second) motion for summary from June 1976 to February 1986.[78]
judgment years after respondents' answer to the petition for forfeiture. Respondent Mrs. Marcos also admitted in paragraph 10 of her answer the allegations
In invoking the doctrine of estoppel by laches, respondents must show not only of paragraph 11 of the petition for forfeiture which referred to the accumulated
unjustified inaction but also that some unfair injury to them might result unless the salaries of respondents Ferdinand E. Marcos and Imelda R. Marcos. [79] The combined
action is barred.[72] accumulated salaries of the Marcos couple were reflected in the Certification dated
This, respondents failed to bear out. In fact, during the pre-trial conference, the May 27, 1986 issued by then Minister of Budget and Management Alberto Romulo.
[80]
Marcoses disclaimed ownership of the Swiss deposits. Not being the owners, as they The Certification showed that, from 1966 to 1985, Ferdinand E. Marcos and
claimed, respondents did not have any vested right or interest which could be Imelda R. Marcos had accumulated salaries in the amount of P1,570,000
adversely affected by petitioner's alleged inaction. and P718,750, respectively, or a total of P2,288,750:
But even assuming for the sake of argument that laches had already set in, the Ferdinand E. Marcos, as President
doctrine of estoppel or laches does not apply when the government sues as a 1966-1976 at P60,000/year P660,000
sovereign or asserts governmental rights.[73] Nor can estoppel validate an act that 1977-1984 at P100,000/year 800,000
contravenes law or public policy.[74] 1985 at P110,000/year 110,000
As a final point, it must be emphasized that laches is not a mere question of time P1,570,00
but is principally a question of the inequity or unfairness of permitting a right or Imelda R. Marcos, as Minister
claim to be enforced or asserted.[75] Equity demands that petitioner Republic should June 1976-1985 at P75,000/year P718,000
not be barred from pursuing the people's case against the Marcoses. In addition to their accumulated salaries from 1966 to 1985 are the Marcos couples
(2) The Propriety of Forfeiture combined salaries from January to February 1986 in the amount
The matter of summary judgment having been thus settled, the issue of whether or of P30,833.33. Hence, their total accumulated salaries amounted to P2,319,583.33.
not petitioner Republic was able to prove its case for forfeiture in accordance with Converted to U.S. dollars on the basis of the corresponding peso-dollar exchange
the requisites of Sections 2 and 3 of RA 1379 now takes center stage. rates prevailing during the applicable period when said salaries were received, the
The law raises the prima facie presumption that a property is unlawfully acquired, total amount had an equivalent value of $304,372.43.
hence subject to forfeiture, if its amount or value is manifestly disproportionate to The dollar equivalent was arrived at by using the official annual rates of exchange of
the official salary and other lawful income of the public officer who owns it. Hence, the Philippine peso and the US dollar from 1965 to 1985 as well as the official
Sections 2 and 6 of RA 1379[76] provide: monthly rates of exchange in January and February 1986 issued by the Center for
xxxxxx Statistical Information of the Bangko Sentral ng Pilipinas.
Section 2. Filing of petition. Whenever any public officer or employee has acquired Prescinding from the aforesaid admissions, Section 4, Rule 129 of the Rules of Court
during his incumbency an amount or property which is manifestly out of proportion provides that:
to his salary as such public officer or employee and to his other lawful income and Section 4. Judicial admissions An admission, verbal or written, made by a party in
the income from legitimately acquired property, said property shall be the course of the proceedings in the same case does not require proof. The
presumed prima facie to have been unlawfully acquired. admission may be contradicted only by showing that it was made through palpable
xxxxxx mistake or that no such admission was made.[81]
Sec. 6. Judgment If the respondent is unable to show to the satisfaction of the court It is settled that judicial admissions may be made: (a) in the pleadings filed by the
that he has lawfully acquired the property in question, then the court shall declare parties; (b) in the course of the trial either by verbal or written manifestations or
such property in question, forfeited in favor of the State, and by virtue of such stipulations; or (c) in other stages of judicial proceedings, as in the pre-trial of the
judgment the property aforesaid shall become the property of the case.[82] Thus, facts pleaded in the petition and answer, as in the case at bar, are
State. Provided, That no judgment shall be rendered within six months before any deemed admissions of petitioner and respondents, respectively, who are not
general election or within three months before any special election. The Court may, permitted to contradict them or subsequently take a position contrary to or
in addition, refer this case to the corresponding Executive Department for inconsistent with such admissions.[83]
administrative or criminal action, or both. The sum of $304,372.43 should be held as the only known lawful income of
From the above-quoted provisions of the law, the following facts must be established respondents since they did not file any Statement of Assets and Liabilities (SAL), as
in order that forfeiture or seizure of the Swiss deposits may be effected: required by law, from which their net worth could be determined. Besides, under the
(1) ownership by the public officer of money or property acquired during his 1935 Constitution, Ferdinand E. Marcos as President could not receive any other
incumbency, whether it be in his name or otherwise, and emolument from the Government or any of its subdivisions and instrumentalities.
[84]
(2) the extent to which the amount of that money or property exceeds, i. e., is Likewise, under the 1973 Constitution, Ferdinand E. Marcos as President could not
grossly disproportionate to, the legitimate income of the public officer. receive during his tenure any other emolument from the Government or any other
source.[85] In fact, his management of businesses, like the administration of
foundations to accumulate funds, was expressly prohibited under the 1973 In their answer, aside from admitting the existence of the subject funds,
Constitution: respondents likewise admitted ownership thereof. Paragraph 22 of respondents'
Article VII, Sec. 4(2) The President and the Vice-President shall not, during their answer stated:
tenure, hold any other office except when otherwise provided in this Constitution, 22. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that
nor may they practice any profession, participate directly or indirectly in the respondents clandestinely stashed the country's wealth in Switzerland and hid the
management of any business, or be financially interested directly or indirectly in any same under layers and layers of foundations and corporate entities for being false,
contract with, or in any franchise or special privilege granted by the Government or the truth being that respondents' aforesaid properties were lawfully
any other subdivision, agency, or instrumentality thereof, including any government acquired. (emphasis supplied)
owned or controlled corporation. By qualifying their acquisition of the Swiss bank deposits as lawful, respondents
Article VII, Sec. 11 No Member of the National Assembly shall appear as counsel unwittingly admitted their ownership thereof.
before any court inferior to a court with appellate jurisdiction, x x x. Neither shall he, Respondent Mrs. Marcos also admitted ownership of the Swiss bank deposits by
directly or indirectly, be interested financially in any contract with, or in any failing to deny under oath the genuineness and due execution of certain actionable
franchise or special privilege granted by the Government, or any subdivision, documents bearing her signature attached to the petition. As discussed earlier,
agency, or instrumentality thereof including any government owned or controlled Section 11, Rule 8[86] of the 1997 Rules of Civil Procedure provides that material
corporation during his term of office. He shall not intervene in any matter before any averments in the complaint shall be deemed admitted when not specifically denied.
office of the government for his pecuniary benefit. The General[87] and Supplemental[88] Agreements executed by petitioner and
Article IX, Sec. 7 The Prime Minister and Members of the Cabinet shall be subject to respondents on December 28, 1993 further bolstered the claim of petitioner
the provision of Section 11, Article VIII hereof and may not appear as counsel before Republic that its case for forfeiture was proven in accordance with the requisites of
any court or administrative body, or manage any business, or practice any Sections 2 and 3 of RA 1379. The whereas clause in the General Agreement declared
profession, and shall also be subject to such other disqualification as may be that:
provided by law. WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal
Their only known lawful income of $304,372.43 can therefore legally and fairly serve on December 21, 1990, that the $356 million belongs in principle to the Republic of
as basis for determining the existence of a prima facie case of forfeiture of the Swiss the Philippines provided certain conditionalities are met, but even after 7 years, the
funds. FIRST PARTY has not been able to procure a final judgment of conviction against the
Respondents argue that petitioner was not able to establish a prima facie case for PRIVATE PARTY.
the forfeiture of the Swiss funds since it failed to prove the essential elements under While the Supplemental Agreement warranted, inter alia, that:
Section 3, paragraphs (c), (d) and (e) of RA 1379. As the Act is a penal statute, its In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY
provisions are mandatory and should thus be construed strictly against the shall be entitled to the equivalent of 25% of the amount that may be eventually
petitioner and liberally in favor of respondent Marcoses. withdrawn from said $356 million Swiss deposits.
We hold that it was not for petitioner to establish the Marcoses other lawful income The stipulations set forth in the General and Supplemental Agreements undeniably
or income from legitimately acquired property for the presumption to apply because, indicated the manifest intent of respondents to enter into a compromise with
as between petitioner and respondents, the latter were in a better position to know petitioner. Corollarily, respondents willingness to agree to an amicable settlement
if there were such other sources of lawful income. And if indeed there was such with the Republic only affirmed their ownership of the Swiss deposits for the simple
other lawful income, respondents should have specifically stated the same in their reason that no person would acquiesce to any concession over such huge dollar
answer. Insofar as petitioner Republic was concerned, it was enough to specify the deposits if he did not in fact own them.
known lawful income of respondents. Respondents make much capital of the pronouncement by this Court that the
Section 9 of the PCGG Rules and Regulations provides that, in determining prima General and Supplemental Agreements were null and void. [89] They insist that
facie evidence of ill-gotten wealth, the value of the accumulated assets, properties nothing in those agreements could thus be admitted in evidence against them
and other material possessions of those covered by Executive Order Nos. 1 and 2 because they stood on the same ground as an accepted offer which, under Section
must be out of proportion to the known lawful income of such persons. The 27, Rule 130[90] of the 1997 Rules of Civil Procedure, provides that in civil cases, an
respondent Marcos couple did not file any Statement of Assets and Liabilities (SAL) offer of compromise is not an admission of any liability and is not admissible in
from which their net worth could be determined. Their failure to file their SAL was in evidence against the offeror.
itself a violation of law and to allow them to successfully assail the Republic for not We find no merit in this contention. The declaration of nullity of said agreements was
presenting their SAL would reward them for their violation of the law. premised on the following constitutional and statutory infirmities: (1) the grant of
Further, contrary to the claim of respondents, the admissions made by them in their criminal immunityto the Marcos heirs was against the law; (2) the PCGGs
various pleadings and documents were valid. It is of record that respondents commitment to exempt from all forms of taxes the properties to be retained by
judicially admitted that the money deposited with the Swiss banks belonged to the Marcos heirs was against the Constitution; and (3) the governments undertaking
them. to cause the dismissal of all cases filed against the Marcoses pending before the
We agree with petitioner that respondent Marcoses made judicial admissions of their Sandiganbayan and other courts encroached on the powers of the judiciary. The
ownership of the subject Swiss bank deposits in their answer, the reasons relied upon by the Court never in the least bit even touched on the veracity
General/Supplemental Agreements, Mrs. Marcos' Manifestation and Constancia and truthfulness of respondents admission with respect to their ownership of the
dated May 5, 1999, and the Undertaking dated February 10, 1999. We take note of Swiss funds. Besides, having made certain admissions in those agreements,
the fact that the Associate Justices of the Sandiganbayan were unanimous in holding respondents cannot now deny that they voluntarily admitted owning the subject
that respondents had made judicial admissions of their ownership of the Swiss Swiss funds, notwithstanding the fact that the agreements themselves were later
funds. declared null and void.
The following observation of Sandiganbayan Justice Catalino Castaeda, Jr. in the
decision dated September 19, 2000 could not have been better said:
x x x The declaration of nullity of the two agreements rendered the same without would be. But nevertheless, I was happy to see that as far as the PCGG is concerned,
legal effects but it did not detract from the admissions of the respondents contained that the agreement was perfected and that we were beginning to implement it and
therein. Otherwise stated, the admissions made in said agreements, as quoted that was a source of satisfaction to me because I thought that finally it will be the
above, remain binding on the respondents.[91] end.[96]
A written statement is nonetheless competent as an admission even if it is contained Ferdinand Jr.'s pronouncements, taken in context and in their entirety, were a
in a document which is not itself effective for the purpose for which it is made, either confirmation of respondents recognition of their ownership of the Swiss bank
by reason of illegality, or incompetency of a party thereto, or by reason of not being deposits. Admissions of a party in his testimony are receivable against him. If a
signed, executed or delivered. Accordingly, contracts have been held as competent party, as a witness, deliberately concedes a fact, such concession has the force of a
evidence of admissions, although they may be unenforceable. [92] judicial admission.[97] It is apparent from Ferdinand Jr.s testimony that the Marcos
The testimony of respondent Ferdinand Marcos, Jr. during the hearing on the motion family agreed to negotiate with the Philippine government in the hope of finally
for the approval of the Compromise Agreement on April 29, putting an end to the problems besetting the Marcos family regarding the Swiss
1998 also lent credence to the allegations of petitioner Republic that respondents accounts. This was doubtlessly an acknowledgment of ownership on their part. The
admitted ownership of the Swiss bank accounts. We quote the salient portions of rule is that the testimony on the witness stand partakes of the nature of a formal
Ferdinand Jr.s formal declarations in open court: judicial admission when a party testifies clearly and unequivocally to a fact which is
ATTY. FERNANDO: peculiarly within his own knowledge.[98]
Mr. Marcos, did you ever have any meetings with PCGG Chairman Magtanggol C. In her Manifestation[99] dated May 26, 1998, respondent Imelda Marcos furthermore
Gunigundo? revealed the following:
F. MARCOS, JR.: That respondent Imelda R. Marcos owns 90% of the subject matter of the above-
Yes. I have had very many meetings in fact with Chairman. entitled case, being the sole beneficiary of the dollar deposits in the name of the
ATTY. FERNANDO: various foundations alleged in the case;
Would you recall when the first meeting occurred? That in fact only 10% of the subject matter in the above-entitled case belongs to the
PJ GARCHITORENA: estate of the late President Ferdinand E. Marcos;
In connection with what? xxx xxx xxx
ATTY. FERNANDO: Respondents ownership of the Swiss bank accounts as borne out by Mrs. Marcos'
In connection with the ongoing talks to compromise the various cases initiated by manifestation is as bright as sunlight. And her claim that she is merely a beneficiary
PCGG against your family? of the Swiss deposits is belied by her own signatures on the appended copies of the
F. MARCOS, JR.: documents substantiating her ownership of the funds in the name of the
The nature of our meetings was solely concerned with negotiations towards foundations. As already mentioned, she failed to specifically deny under oath the
achieving some kind of agreement between the Philippine government and the authenticity of such documents, especially those involving William Saunders and
Marcos family. The discussions that led up to the compromise agreement were Jane Ryan which actually referred to Ferdinand Marcos and Imelda Marcos,
initiated by our then counsel Atty. Simeon Mesina x x x. [93] respectively. That failure of Imelda Marcos to specifically deny the existence, much
xxx xxx xxx less the genuineness and due execution, of the instruments bearing her signature,
ATTY. FERNANDO: was tantamount to a judicial admission of the genuineness and due execution of
What was your reaction when Atty. Mesina informed you of this possibility? said instruments, in accordance with Section 8, Rule 8 [100] of the 1997 Rules of Civil
F. MARCOS, JR.: Procedure.
My reaction to all of these approaches is that I am always open, we are always open, Likewise, in her Constancia[101] dated May 6, 1999, Imelda Marcos prayed for the
we are very much always in search of resolution to the problem of the family and approval of the Compromise Agreement and the subsequent release and transfer of
any approach that has been made us, we have entertained. And so my reaction was the $150 million to the rightful owner. She further made the following
the same as what I have always why not? Maybe this is the one that will finally put manifestations:
an end to this problem.[94] xxx xxx xxx
xxx xxx xxx 2. The Republics cause of action over the full amount is its forfeiture in favor of the
ATTY. FERNANDO: government if found to be ill-gotten. On the other hand, the Marcoses defend
Basically, what were the true amounts of the assets in the bank? that it is a legitimate asset. Therefore, both parties have an inchoate right of
PJ GARCHITORENA: ownership over the account. If it turns out that the account is of lawful origin, the
So, we are talking about liquid assets here? Just Cash? Republic may yield to the Marcoses. Conversely, the Marcoses must yield to the
F. MARCOS, JR.: Republic. (underscoring supplied)
Well, basically, any assets. Anything that was under the Marcos name in any of the xxx xxx xxx
banks in Switzerland which may necessarily be not cash. [95] 3. Consistent with the foregoing, and the Marcoses having committed themselves to
xxx xxx xxx helping the less fortunate, in the interest of peace, reconciliation and unity,
PJ GARCHITORENA: defendant MADAM IMELDA ROMUALDEZ MARCOS, in firm abidance thereby, hereby
x x x What did you do in other words, after being apprised of this contract in affirms her agreement with the Republic for the release and transfer of the US Dollar
connection herewith? 150 million for proper disposition, without prejudice to the final outcome of the
F. MARCOS, JR.: litigation respecting the ownership of the remainder.
I assumed that we are beginning to implement the agreement because this was Again, the above statements were indicative of Imeldas admission of the Marcoses
forwarded through the Philippine government lawyers through our lawyers and then, ownership of the Swiss deposits as in fact the Marcoses defend that it (Swiss
subsequently, to me. I was a little surprised because we hadnt really discussed the deposits) is a legitimate (Marcos) asset.
details of the transfer of the funds, what the bank accounts, what the mechanism
On the other hand, respondents Maria Imelda Marcos-Manotoc, Ferdinand Marcos, Jr. SEC. 31. Admission by privies. Where one derives title to property from another,
and Maria Irene Marcos-Araneta filed a motion[102] on May 4, 1998 asking the the act, declaration, or omission of the latter, while holding the title, in relation to
Sandiganbayan to place the res (Swiss deposits) in custodia legis: the property, is evidence against the former.[107]
7. Indeed, the prevailing situation is fraught with danger! Unless the aforesaid Swiss The declarations of a person are admissible against a party whenever a privity of
deposits are placed in custodia legis or within the Courts protective mantle, its estate exists between the declarant and the party, the term privity of estate
dissipation or misappropriation by the petitioner looms as a distinct possibility. generally denoting a succession in rights.[108] Consequently, an admission of one in
Such display of deep, personal interest can only come from someone who believes privity with a party to the record is competent. [109] Without doubt, privity exists
that he has a marked and intimate right over the considerable dollar deposits. Truly, among the respondents in this case. And where several co-parties to the record are
by filing said motion, the Marcos children revealed their ownership of the said jointly interested in the subject matter of the controversy, the admission of one is
deposits. competent against all.[110]
Lastly, the Undertaking[103] entered into by the PCGG, the PNB and the Marcos Respondents insist that the Sandiganbayan is correct in ruling that petitioner
foundations on February 10, 1999, confirmed the Marcoses ownership of the Swiss Republic has failed to establish a prima facie case for the forfeiture of the Swiss
bank deposits. The subject Undertaking brought to light their readiness to pay the deposits.
human rights victims out of the funds held in escrow in the PNB. It stated: We disagree. The sudden turn-around of the Sandiganbayan was really strange, to
WHEREAS, the Republic of the Philippines sympathizes with the plight of the human say the least, as its findings and conclusions were not borne out by the voluminous
rights victims-plaintiffs in the aforementioned litigation through the Second Party, records of this case.
desires to assist in the satisfaction of the judgment awards of said human rights Section 2 of RA 1379 explicitly states that whenever any public officer or employee
victims-plaintiffs, by releasing, assigning and or waiving US$150 million of the funds has acquired during his incumbency an amount of property which is manifestly out
held in escrow under the Escrow Agreements dated August 14, 1995, although the of proportion to his salary as such public officer or employee and to his other lawful
Republic is not obligated to do so under final judgments of the Swiss courts dated income and the income from legitimately acquired property, said property shall be
December 10 and 19, 1997, and January 8, 1998; presumed prima facie to have been unlawfully acquired. x x x
WHEREAS, the Third Party is likewise willing to release, assign and/or waive all its The elements which must concur for this prima facie presumption to apply are:
rights and interests over said US$150 million to the aforementioned human rights (1) the offender is a public officer or employee;
victims-plaintiffs. (2) he must have acquired a considerable amount of money or property during his
All told, the foregoing disquisition negates the claim of respondents that petitioner incumbency; and
failed to prove that they acquired or own the Swiss funds and that it was only by (3) said amount is manifestly out of proportion to his salary as such public officer or
arbitrarily isolating and taking certain statements made by private respondents out employee and to his other lawful income and the income from legitimately acquired
of context that petitioner was able to treat these as judicial admissions. The Court is property.
fully aware of the relevance, materiality and implications of every pleading and It is undisputed that spouses Ferdinand and Imelda Marcos were former public
document submitted in this case. This Court carefully scrutinized the proofs officers. Hence, the first element is clearly extant.
presented by the parties. We analyzed, assessed and weighed them to ascertain if The second element deals with the amount of money or property acquired by the
each piece of evidence rightfully qualified as an admission. Owing to the far- public officer during his incumbency. The Marcos couple indubitably acquired and
reaching historical and political implications of this case, we considered and owned properties during their term of office. In fact, the five groups of Swiss
examined, individually and totally, the evidence of the parties, even if it might have accounts were admittedly owned by them. There is proof of the existence and
bordered on factual adjudication which, by authority of the rules and jurisprudence, ownership of these assets and properties and it suffices to comply with the second
is not usually done by this Court. There is no doubt in our mind that respondent element.
Marcoses admitted ownership of the Swiss bank deposits. The third requirement is met if it can be shown that such assets, money or property
We have always adhered to the familiar doctrine that an admission made in the is manifestly out of proportion to the public officers salary and his other lawful
pleadings cannot be controverted by the party making such admission and becomes income. It is the proof of this third element that is crucial in determining whether
conclusive on him, and that all proofs submitted by him contrary thereto or a prima facie presumption has been established in this case.
inconsistent therewith should be ignored, whether an objection is interposed by the Petitioner Republic presented not only a schedule indicating the lawful income of the
adverse party or not.[104] This doctrine is embodied in Section 4, Rule 129 of the Marcos spouses during their incumbency but also evidence that they had huge
Rules of Court: deposits beyond such lawful income in Swiss banks under the names of five different
SEC. 4. Judicial admissions. An admission, verbal or written, made by a party in the foundations. We believe petitioner was able to establish the prima facie presumption
course of the proceedings in the same case, does not require proof. The admission that the assets and properties acquired by the Marcoses were manifestly and
may be contradicted only by showing that it was made through palpable mistake or patently disproportionate to their aggregate salaries as public officials. Otherwise
that no such admission was made.[105] stated, petitioner presented enough evidence to convince us that the Marcoses had
In the absence of a compelling reason to the contrary, respondents judicial dollar deposits amounting to US $356 million representing the balance of the Swiss
admission of ownership of the Swiss deposits is definitely binding on them. accounts of the five foundations, an amount way, way beyond their aggregate
The individual and separate admissions of each respondent bind all of them legitimate income of only US$304,372.43 during their incumbency as government
pursuant to Sections 29 and 31, Rule 130 of the Rules of Court: officials.
SEC. 29. Admission by co-partner or agent. The act or declaration of a partner or Considering, therefore, that the total amount of the Swiss deposits was considerably
agent of the party within the scope of his authority and during the existence of the out of proportion to the known lawful income of the Marcoses, the presumption that
partnership or agency, may be given in evidence against such party after the said dollar deposits were unlawfully acquired was duly established. It was sufficient
partnership or agency is shown by evidence other than such act or declaration. The for the petition for forfeiture to state the approximate amount of money and
same rule applies to the act or declaration of a joint owner, joint debtor, or other property acquired by the respondents, and their total government salaries. Section 9
person jointly interested with the party.[106] of the PCGG Rules and Regulations states:
Prima Facie Evidence. Any accumulation of assets, properties, and other material the Swiss court for the foundations to participate in the proceedings was for the
possessions of those persons covered by Executive Orders No. 1 and No. 2, whose purpose of protecting whatever nominal interest they might have had in the assets
value is out of proportion to their known lawful income is prima facie deemed ill- as formal owners. But inasmuch as their ownership was subsequently repudiated by
gotten wealth. Imelda Marcos, they could no longer be considered as indispensable parties and
Indeed, the burden of proof was on the respondents to dispute this presumption and their participation in the proceedings became unnecessary.
show by clear and convincing evidence that the Swiss deposits were lawfully In Republic vs. Sandiganbayan,[119] this Court ruled that impleading the firms which
acquired and that they had other legitimate sources of income. A presumption are the res of the action was unnecessary:
is prima facie proof of the fact presumed and, unless the fact thus prima And as to corporations organized with ill-gotten wealth, but are not themselves
facie established by legal presumption is disproved, it must stand as proved. [111] guilty of misappropriation, fraud or other illicit conduct in other words, the
Respondent Mrs. Marcos argues that the foreign foundations should have been companies themselves are not the object or thing involved in the action, the res
impleaded as they were indispensable parties without whom no complete thereof there is no need to implead them either. Indeed, their impleading is not
determination of the issues could be made. She asserts that the failure of petitioner proper on the strength alone of their having been formed with ill-gotten funds,
Republic to implead the foundations rendered the judgment void as the joinder of absent any other particular wrongdoing on their part
indispensable parties was a sine qua non exercise of judicial power. Furthermore, the Such showing of having been formed with, or having received ill-gotten funds,
non-inclusion of the foreign foundations violated the conditions prescribed by the however strong or convincing, does not, without more, warrant identifying the
Swiss government regarding the deposit of the funds in escrow, deprived them of corporations in question with the person who formed or made use of them to give
their day in court and denied them their rights under the Swiss constitution and the color or appearance of lawful, innocent acquisition to illegally amassed wealth at
international law.[112] the least, not so as place on the Government the onus of impleading the former with
The Court finds that petitioner Republic did not err in not impleading the foreign the latter in actions to recover such wealth. Distinguished in terms of juridical
foundations. Section 7, Rule 3 of the 1997 Rules of Civil Procedure, [113] taken from personality and legal culpability from their erring members or stockholders, said
Rule 19b of the American Federal Rules of Civil Procedure, provides for the corporations are not themselves guilty of the sins of the latter, of the embezzlement,
compulsory joinder of indispensable parties. Generally, an indispensable party must asportation, etc., that gave rise to the Governments cause of action for recovery;
be impleaded for the complete determination of the suit. However, failure to join an their creation or organization was merely the result of their members (or
indispensable party does not divest the court of jurisdiction since the rule regarding stockholders) manipulations and maneuvers to conceal the illegal origins of the
indispensable parties is founded on equitable considerations and is not jurisdictional. assets or monies invested therein. In this light, they are simply the res in the actions
Thus, the court is not divested of its power to render a decision even in the absence for the recovery of illegally acquired wealth, and there is, in principle, no cause of
of indispensable parties, though such judgment is not binding on the non-joined action against them and no ground to implead them as defendants in said actions.
party.[114] Just like the corporations in the aforementioned case, the foreign foundations here
An indispensable party[115] has been defined as one: were set up to conceal the illegally acquired funds of the Marcos spouses. Thus, they
[who] must have a direct interest in the litigation; and if this interest is such that it were simply the res in the action for recovery of ill-gotten wealth and did not have to
cannot be separated from that of the parties to the suit, if the court cannot render be impleaded for lack of cause of action or ground to implead them.
justice between the parties in his absence, if the decree will have an injurious effect Assuming arguendo, however, that the foundations were indispensable parties, the
upon his interest, or if the final determination of the controversy in his absence will failure of petitioner to implead them was a curable error, as held in the previously
be inconsistent with equity and good conscience. cited case ofRepublic vs. Sandiganbayan:[120]
There are two essential tests of an indispensable party: (1) can relief be afforded the Even in those cases where it might reasonably be argued that the failure of the
plaintiff without the presence of the other party? and (2) can the case be decided on Government to implead the sequestered corporations as defendants is indeed a
its merits without prejudicing the rights of the other party? [116] There is, however, no procedural abberation, as where said firms were allegedly used, and actively
fixed formula for determining who is an indispensable party; this can only be cooperated with the defendants, as instruments or conduits for conversion of public
determined in the context and by the facts of the particular suit or litigation. funds and property or illicit or fraudulent obtention of favored government contracts,
In the present case, there was an admission by respondent Imelda Marcos in her etc., slight reflection would nevertheless lead to the conclusion that the defect is not
May 26, 1998 Manifestation before the Sandiganbayan that she was the sole fatal, but one correctible under applicable adjective rules e.g., Section 10, Rule 5 of
beneficiary of 90% of the subject matter in controversy with the remaining 10% the Rules of Court [specifying the remedy of amendment during trial to authorize or
belonging to the estate of Ferdinand Marcos.[117] Viewed against this admission, the to conform to the evidence]; Section 1, Rule 20 [governing amendments before
foreign foundations were not indispensable parties. Their non-participation in the trial], in relation to the rule respecting omission of so-called necessary or
proceedings did not prevent the court from deciding the case on its merits and indispensable parties, set out in Section 11, Rule 3 of the Rules of Court. It is
according full relief to petitioner Republic. The judgment ordering the return of the relevant in this context to advert to the old familiar doctrines that the omission to
$356 million was neither inimical to the foundations interests nor inconsistent with implead such parties is a mere technical defect which can be cured at any stage of
equity and good conscience. The admission of respondent Imelda Marcos only the proceedings even after judgment; and that, particularly in the case of
confirmed what was already generally known: that the foundations were established indispensable parties, since their presence and participation is essential to the very
precisely to hide the money stolen by the Marcos spouses from petitioner Republic. life of the action, for without them no judgment may be rendered, amendments of
It negated whatever illusion there was, if any, that the foreign foundations owned the complaint in order to implead them should be freely allowed, even on appeal, in
even a nominal part of the assets in question. fact even after rendition of judgment by this Court, where it appears that the
The rulings of the Swiss court that the foundations, as formal owners, must be given complaint otherwise indicates their identity and character as such indispensable
an opportunity to participate in the proceedings hinged on the assumption that they parties.[121]
owned anominal share of the assets.[118] But this was already refuted by no less than Although there are decided cases wherein the non-joinder of indispensable parties in
Mrs. Marcos herself. Thus, she cannot now argue that the ruling of the fact led to the dismissal of the suit or the annulment of judgment, such cases do not
Sandiganbayan violated the conditions set by the Swiss court. The directive given by jibe with the matter at hand. The better view is that non-joinder is not a ground to
dismiss the suit or annul the judgment. The rule on joinder of indispensable parties Quisumbing, Sandoval-Gutierrez, J., on official leave.
is founded on equity. And the spirit of the law is reflected in Section 11, Rule 3[122] of Carpio, J., no part.
the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the ground of
non-joinder or misjoinder of parties and allows the amendment of the complaint at Republic of the Philippines
any stage of the proceedings, through motion or on order of the court on its own SUPREME COURT
initiative.[123] Manila
Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section 7, EN BANC
Rule 3[124] on indispensable parties was copied, allows the joinder of indispensable G.R. No. 146710-15 March 2, 2001
parties even after judgment has been entered if such is needed to afford the moving JOSEPH E. ESTRADA, petitioner,
party full relief.[125] Mere delay in filing the joinder motion does not necessarily result vs.
in the waiver of the right as long as the delay is excusable.[126] Thus, respondent Mrs. ANIANO DESIERTO, in his capacity as Ombudsman, RAMON GONZALES,
Marcos cannot correctly argue that the judgment rendered by the Sandiganbayan VOLUNTEERS AGAINST CRIME AND CORRUPTION, GRAFT FREE PHILIPPINES
was void due to the non-joinder of the foreign foundations. The court had jurisdiction FOUNDATION, INC., LEONARD DE VERA, DENNIS FUNA, ROMEO CAPULONG
to render judgment which, even in the absence of indispensable parties, was binding and ERNESTO B. FRANCISCO, JR., respondent.
on all the parties before it though not on the absent party. [127] If she really felt that ----------------------------------------
she could not be granted full relief due to the absence of the foreign foundations, G.R. No. 146738 March 2, 2001
she should have moved for their inclusion, which was allowable at any stage of the JOSEPH E. ESTRADA, petitioner,
proceedings. She never did. Instead she assailed the judgment rendered. vs.
In the face of undeniable circumstances and the avalanche of documentary GLORIA MACAPAGAL-ARROYO, respondent.
evidence against them, respondent Marcoses failed to justify the lawful nature of PUNO, J.:
their acquisition of the said assets. Hence, the Swiss deposits should be considered On the line in the cases at bar is the office of the President. Petitioner Joseph Ejercito
ill-gotten wealth and forfeited in favor of the State in accordance with Section 6 of Estrada alleges that he is the President on leave while respondent Gloria Macapagal-
RA 1379: Arroyo claims she is the President. The warring personalities are important enough
SEC. 6. Judgment. If the respondent is unable to show to the satisfaction of the but more transcendental are the constitutional issues embedded on the parties'
court that he has lawfully acquired the property in question, then the court shall dispute. While the significant issues are many, the jugular issue involves the
declare such property forfeited in favor of the State, and by virtue of such judgment relationship between the ruler and the ruled in a democracy, Philippine style.
the property aforesaid shall become property of the State x x x. First, we take a view of the panorama of events that precipitated the crisis in the
THE FAILURE TO PRESENT AUTHENTICATED office of the President.
TRANSLATIONS OF THE SWISS DECISIONS In the May 11, 1998 elections, petitioner Joseph Ejercito Estrada was elected
Finally, petitioner Republic contends that the Honorable Sandiganbayan Presiding President while respondent Gloria Macapagal-Arroyo was elected Vice-President.
Justice Francis Garchitorena committed grave abuse of discretion in reversing Some ten (10) million Filipinos voted for the petitioner believing he would rescue
himself on the ground that the original copies of the authenticated Swiss decisions them from life's adversity. Both petitioner and the respondent were to serve a six-
and their authenticated translations were not submitted to the court a quo. Earlier PJ year term commencing on June 30, 1998.
Garchitorena had quoted extensively from the unofficial translation of one of these From the beginning of his term, however, petitioner was plagued by a plethora of
Swiss decisions in his ponencia dated July 29, 1999 when he denied the motion to problems that slowly but surely eroded his popularity. His sharp descent from power
release US$150 Million to the human rights victims. started on October 4, 2000. Ilocos Sur Governor, Luis "Chavit" Singson, a longtime
While we are in reality perplexed by such an incomprehensible change of heart, friend of the petitioner, went on air and accused the petitioner, his family and
there might nevertheless not be any real need to belabor the issue. The friends of receiving millions of pesos from jueteng lords.1
presentation of the authenticated translations of the original copies of the Swiss The expos immediately ignited reactions of rage. The next day, October 5, 2000,
decision was not de rigueur for the public respondent to make findings of fact and Senator Teofisto Guingona, Jr., then the Senate Minority Leader, took the floor and
reach its conclusions. In short, the Sandiganbayans decision was not dependent on delivered a fiery privilege speech entitled "I Accuse." He accused the petitioner of
the determination of the Swiss courts. For that matter, neither is this Courts. receiving some P220 million in jueteng money from Governor Singson from
The release of the Swiss funds held in escrow in the PNB is dependent solely on the November 1998 to August 2000. He also charged that the petitioner took from
decision of this jurisdiction that said funds belong to the petitioner Republic. What is Governor Singson P70 million on excise tax on cigarettes intended for Ilocos Sur. The
important is our own assessment of the sufficiency of the evidence to rule in favor of privilege speech was referred by then Senate President Franklin Drilon, to the Blue
either petitioner Republic or respondent Marcoses. In this instance, despite the Ribbon Committee (then headed by Senator Aquilino Pimentel) and the Committee
absence of the authenticated translations of the Swiss decisions, the evidence on on Justice (then headed by Senator Renato Cayetano) for joint investigation. 2
hand tilts convincingly in favor of petitioner Republic. The House of Representatives did no less. The House Committee on Public Order and
WHEREFORE, the petition is hereby GRANTED. The assailed Resolution of the Security, then headed by Representative Roilo Golez, decided to investigate the
Sandiganbayan dated January 31, 2002 is SET ASIDE. The Swiss deposits which were expos of Governor Singson. On the other hand, Representatives Heherson Alvarez,
transferred to and are now deposited in escrow at the Philippine National Bank in the Ernesto Herrera and Michael Defensor spearheaded the move to impeach the
estimated aggregate amount of US$658,175,373.60 as of January 31, 2002, plus petitioner.
interest, are hereby forfeited in favor of petitioner Republic of the Philippines. Calls for the resignation of the petitioner filled the air. On October 11, Archbishop
SO ORDERED. Jaime Cardinal Sin issued a pastoral statement in behalf of the Presbyteral Council of
Davide, Jr., C.J., Bellosillo, Panganiban, Ynares-Santiago, Austria-Martinez, Carpio- the Archdiocese of Manila, asking petitioner to step down from the presidency as he
Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur. had lost the moral authority to govern.3 Two days later or on October 13, the
Puno, and Vitug, JJ., in the result Catholic Bishops Conference of the Philippines joined the cry for the resignation of
the petitioner.4 Four days later, or on October 17, former President Corazon C. quickly moved for the indefinite postponement of the impeachment proceedings
Aquino also demanded that the petitioner take the "supreme self-sacrifice" of until the House of Representatives shall have resolved the issue of resignation of the
resignation.5 Former President Fidel Ramos also joined the chorus. Early on, or on public prosecutors. Chief Justice Davide granted the motion. 20
October 12, respondent Arroyo resigned as Secretary of the Department of Social January 18 saw the high velocity intensification of the call for petitioner's
Welfare and Services6 and later asked for petitioner's resignation.7 However, resignation. A 10-kilometer line of people holding lighted candles formed a human
petitioner strenuously held on to his office and refused to resign. chain from the Ninoy Aquino Monument on Ayala Avenue in Makati City to the EDSA
The heat was on. On November 1, four (4) senior economic advisers, members of Shrine to symbolize the people's solidarity in demanding petitioner's resignation.
the Council of Senior Economic Advisers, resigned. They were Jaime Augusto Zobel Students and teachers walked out of their classes in Metro Manila to show their
de Ayala, former Prime Minister Cesar Virata, former Senator Vicente Paterno and concordance. Speakers in the continuing rallies at the EDSA Shrine, all masters of
Washington Sycip.8 On November 2, Secretary Mar Roxas II also resigned from the the physics of persuasion, attracted more and more people. 21
Department of Trade and Industry.9 On November 3, Senate President Franklin On January 19, the fall from power of the petitioner appeared inevitable. At 1:20
Drilon, and House Speaker Manuel Villar, together with some 47 representatives p.m., the petitioner informed Executive Secretary Edgardo Angara that General
defected from the ruling coalition, Lapian ng Masang Pilipino. 10 Angelo Reyes, Chief of Staff of the Armed Forces of the Philippines, had defected. At
The month of November ended with a big bang. In a tumultuous session on 2:30 p.m., petitioner agreed to the holding of a snap election for President where he
November 13, House Speaker Villar transmitted the Articles of would not be a candidate. It did not diffuse the growing crisis. At 3:00 p.m.,
Impeachment11 signed by 115 representatives, or more than 1/3 of all the members Secretary of National Defense Orlando Mercado and General Reyes, together with
of the House of Representatives to the Senate. This caused political convulsions in the chiefs of all the armed services went to the EDSA Shrine. 22 In the presence of
both houses of Congress. Senator Drilon was replaced by Senator Pimentel as former Presidents Aquino and Ramos and hundreds of thousands of cheering
Senate President. Speaker Villar was unseated by Representative Fuentebella. 12 On demonstrators, General Reyes declared that "on behalf of Your Armed Forces, the
November 20, the Senate formally opened the impeachment trial of the petitioner. 130,000 strong members of the Armed Forces, we wish to announce that we are
Twenty-one (21) senators took their oath as judges with Supreme Court Chief Justice withdrawing our support to this government."23 A little later, PNP Chief, Director
Hilario G. Davide, Jr., presiding.13 General Panfilo Lacson and the major service commanders gave a similar stunning
The political temperature rose despite the cold December. On December 7, the announcement.24Some Cabinet secretaries, undersecretaries, assistant secretaries,
impeachment trial started.14 The battle royale was fought by some of the marquee and bureau chiefs quickly resigned from their posts. 25 Rallies for the resignation of
names in the legal profession. Standing as prosecutors were then House Minority the petitioner exploded in various parts of the country. To stem the tide of rage,
Floor Leader Feliciano Belmonte and Representatives Joker Arroyo, Wigberto Taada, petitioner announced he was ordering his lawyers to agree to the opening of the
Sergio Apostol, Raul Gonzales, Oscar Moreno, Salacnib Baterina, Roan Libarios, highly controversial second envelope.26 There was no turning back the tide. The tide
Oscar Rodriguez, Clavel Martinez and Antonio Nachura. They were assisted by a had become a tsunami.
battery of private prosecutors led by now Secretary of Justice Hernando Perez and January 20 turned to be the day of surrender. At 12:20 a.m., the first round of
now Solicitor General Simeon Marcelo. Serving as defense counsel were former Chief negotiations for the peaceful and orderly transfer of power started at Malacaang''
Justice Andres Narvasa, former Solicitor General and Secretary of Justice Estelito P. Mabini Hall, Office of the Executive Secretary. Secretary Edgardo Angara, Senior
Mendoza, former City Fiscal of Manila Jose Flaminiano, former Deputy Speaker of the Deputy Executive Secretary Ramon Bagatsing, Political Adviser Angelito Banayo,
House Raul Daza, Atty. Siegfried Fortun and his brother, Atty. Raymund Fortun. The Asst. Secretary Boying Remulla, and Atty. Macel Fernandez, head of the Presidential
day to day trial was covered by live TV and during its course enjoyed the highest Management Staff, negotiated for the petitioner. Respondent Arroyo was
viewing rating. Its high and low points were the constant conversational piece of the represented by now Executive Secretary Renato de Villa, now Secretary of Finance
chattering classes. The dramatic point of the December hearings was the testimony Alberto Romulo and now Secretary of Justice Hernando Perez. 27 Outside the palace,
of Clarissa Ocampo, senior vice president of Equitable-PCI Bank. She testified that there was a brief encounter at Mendiola between pro and anti-Estrada protesters
she was one foot away from petitioner Estrada when he affixed the signature "Jose which resulted in stone-throwing and caused minor injuries. The negotiations
Velarde" on documents involving a P500 million investment agreement with their consumed all morning until the news broke out that Chief Justice Davide would
bank on February 4, 2000.15 administer the oath to respondent Arroyo at high noon at the EDSA Shrine.
After the testimony of Ocampo, the impeachment trial was adjourned in the spirit of At about 12:00 noon, Chief Justice Davide administered the oath to respondent
Christmas. When it resumed on January 2, 2001, more bombshells were exploded by Arroyo as President of the Philippines.28 At 2:30 p.m., petitioner and his family
the prosecution. On January 11, Atty. Edgardo Espiritu who served as petitioner's hurriedly left Malacaang Palace.29 He issued the following press statement: 30
Secretary of Finance took the witness stand. He alleged that the petitioner jointly "20 January 2001
owned BW Resources Corporation with Mr. Dante Tan who was facing charges of STATEMENT FROM
insider trading.16 Then came the fateful day of January 16, when by a vote of 11- PRESIDENT JOSEPH EJERCITO ESTRADA
1017 the senator-judges ruled against the opening of the second envelope which At twelve o'clock noon today, Vice President Gloria Macapagal-Arroyo took her oath
allegedly contained evidence showing that petitioner held P3.3 billion in a secret as President of the Republic of the Philippines. While along with many other legal
bank account under the name "Jose Velarde." The public and private prosecutors minds of our country, I have strong and serious doubts about the legality and
walked out in protest of the ruling. In disgust, Senator Pimentel resigned as Senate constitutionality of her proclamation as President, I do not wish to be a factor that
President.18 The ruling made at 10:00 p.m. was met by a spontaneous outburst of will prevent the restoration of unity and order in our civil society.
anger that hit the streets of the metropolis. By midnight, thousands had assembled It is for this reason that I now leave Malacaang Palace, the seat of the presidency of
at the EDSA Shrine and speeches full of sulphur were delivered against the this country, for the sake of peace and in order to begin the healing process of our
petitioner and the eleven (11) senators. nation. I leave the Palace of our people with gratitude for the opportunities given to
On January 17, the public prosecutors submitted a letter to Speaker Fuentebella me for service to our people. I will not shirk from any future challenges that may
tendering their collective resignation. They also filed their Manifestation of come ahead in the same service of our country.
Withdrawal of Appearance with the impeachment tribunal.19Senator Raul Roco
I call on all my supporters and followers to join me in to promotion of a constructive Guingona's nomination in Resolution No. 178.45 Senator Guingona, Jr. took his oath
national spirit of reconciliation and solidarity. as Vice President two (2) days later.46
May the Almighty bless our country and beloved people. On February 7, the Senate passed Resolution No. 83 declaring that the impeachment
MABUHAY! court is functus officio and has been terminated.47 Senator Miriam Defensor-Santiago
(Sgd.) JOSEPH EJERCITO ESTRADA" stated "for the record" that she voted against the closure of the impeachment court
It also appears that on the same day, January 20, 2001, he signed the following on the grounds that the Senate had failed to decide on the impeachment case and
letter:31 that the resolution left open the question of whether Estrada was still qualified to run
"Sir: for another elective post.48
By virtue of the provisions of Section 11, Article VII of the Constitution, I am hereby Meanwhile, in a survey conducted by Pulse Asia, President Arroyo's public
transmitting this declaration that I am unable to exercise the powers and duties of acceptance rating jacked up from 16% on January 20, 2001 to 38% on January 26,
my office. By operation of law and the Constitution, the Vice-President shall be the 2001.49 In another survey conducted by the ABS-CBN/SWS from February 2-7, 2001,
Acting President. results showed that 61% of the Filipinos nationwide accepted President Arroyo as
(Sgd.) JOSEPH EJERCITO ESTRADA" replacement of petitioner Estrada. The survey also revealed that President Arroyo is
A copy of the letter was sent to former Speaker Fuentebella at 8:30 a.m. on January accepted by 60% in Metro Manila, by also 60% in the balance of Luzon, by 71% in
20.23 Another copy was transmitted to Senate President Pimentel on the same day the Visayas, and 55% in Mindanao. Her trust rating increased to 52%. Her
although it was received only at 9:00 p.m.33 presidency is accepted by majorities in all social classes: 58% in the ABC or middle-
On January 22, the Monday after taking her oath, respondent Arroyo immediately to-upper classes, 64% in the D or mass class, and 54% among the E's or very poor
discharged the powers the duties of the Presidency. On the same day, this Court class.50
issued the following Resolution in Administrative Matter No. 01-1-05-SC, to wit: After his fall from the pedestal of power, the petitioner's legal problems appeared in
"A.M. No. 01-1-05-SC In re: Request of Vice President Gloria Macapagal-Arroyo to clusters. Several cases previously filed against him in the Office of the Ombudsman
Take her Oath of Office as President of the Republic of the Philippines before the were set in motion. These are: (1) OMB Case No. 0-00-1629, filed by Ramon A.
Chief Justice Acting on the urgent request of Vice President Gloria Macapagal- Gonzales on October 23, 2000 for bribery and graft and corruption; (2) OMB Case
Arroyo to be sworn in as President of the Republic of the Philippines, addressed to No. 0-00-1754 filed by the Volunteers Against Crime and Corruption on November
the Chief Justice and confirmed by a letter to the Court, dated January 20, 2001, 17, 2000 for plunder, forfeiture, graft and corruption, bribery, perjury, serious
which request was treated as an administrative matter, the court Resolve misconduct, violation of the Code of Conduct for Government Employees, etc; (3)
unanimously to confirm the authority given by the twelve (12) members of the Court OMB Case No. 0-00-1755 filed by the Graft Free Philippines Foundation, Inc. on
then present to the Chief Justice on January 20, 2001 to administer the oath of office November 24, 2000 for plunder, forfeiture, graft and corruption, bribery, perjury,
of Vice President Gloria Macapagal-Arroyo as President of the Philippines, at noon of serious misconduct; (4) OMB Case No. 0-00-1756 filed by Romeo Capulong, et al., on
January 20, 2001. November 28, 2000 for malversation of public funds, illegal use of public funds and
This resolution is without prejudice to the disposition of any justiciable case that may property, plunder, etc.; (5) OMB Case No. 0-00-1757 filed by Leonard de Vera, et al.,
be filed by a proper party." on November 28, 2000 for bribery, plunder, indirect bribery, violation of PD 1602, PD
Respondent Arroyo appointed members of her Cabinet as well as ambassadors and 1829, PD 46, and RA 7080; and (6) OMB Case No. 0-00-1758 filed by Ernesto B.
special envoys.34Recognition of respondent Arroyo's government by foreign Francisco, Jr. on December 4, 2000 for plunder, graft and corruption.
governments swiftly followed. On January 23, in a reception or vin d' honneur at A special panel of investigators was forthwith created by the respondent
Malacaang, led by the Dean of the Diplomatic Corps, Papal Nuncio Antonio Franco, Ombudsman to investigate the charges against the petitioner. It is chaired by
more than a hundred foreign diplomats recognized the government of respondent Overall Deputy Ombudsman Margarito P. Gervasio with the following as
Arroyo.35 US President George W. Bush gave the respondent a telephone call from members, viz: Director Andrew Amuyutan, Prosecutor Pelayo Apostol, Atty. Jose de
the White House conveying US recognition of her government. 36 Jesus and Atty. Emmanuel Laureso. On January 22, the panel issued an Order
On January 24, Representative Feliciano Belmonte was elected new Speaker of the directing the petitioner to file his counter-affidavit and the affidavits of his witnesses
House of Representatives.37The House then passed Resolution No. 175 "expressing as well as other supporting documents in answer to the aforementioned complaints
the full support of the House of Representatives to the administration of Her against him.
Excellency, Gloria Macapagal-Arroyo, President of the Philippines." 38 It also approved Thus, the stage for the cases at bar was set. On February 5, petitioner filed with this
Resolution No. 176 "expressing the support of the House of Representatives to the Court GR No. 146710-15, a petition for prohibition with a prayer for a writ of
assumption into office by Vice President Gloria Macapagal-Arroyo as President of the preliminary injunction. It sought to enjoin the respondent Ombudsman from
Republic of the Philippines, extending its congratulations and expressing its support "conducting any further proceedings in Case Nos. OMB 0-00-1629, 1754, 1755,
for her administration as a partner in the attainment of the nation's goals under the 1756, 1757 and 1758 or in any other criminal complaint that may be filed in his
Constitution."39 office, until after the term of petitioner as President is over and only if legally
On January 26, the respondent signed into law the Solid Waste Management Act. 40 A warranted." Thru another counsel, petitioner, on February 6, filed GR No. 146738 for
few days later, she also signed into law the Political Advertising ban and Fair Election Quo Warranto. He prayed for judgment "confirming petitioner to be the lawful and
Practices Act.41 incumbent President of the Republic of the Philippines temporarily unable to
On February 6, respondent Arroyo nominated Senator Teofisto Guingona, Jr., as her discharge the duties of his office, and declaring respondent to have taken her oath
Vice President.42 The next day, February 7, the Senate adopted Resolution No. 82 as and to be holding the Office of the President, only in an acting capacity pursuant
confirming the nomination of Senator Guingona, Jr.43Senators Miriam Defensor- to the provisions of the Constitution." Acting on GR Nos. 146710-15, the Court, on
Santiago, Juan Ponce Enrile, and John Osmena voted "yes" with reservations, citing the same day, February 6, required the respondents "to comment thereon within a
as reason therefor the pending challenge on the legitimacy of respondent Arroyo's non-extendible period expiring on 12 February 2001." On February 13, the Court
presidency before the Supreme Court. Senators Teresa Aquino-Oreta and Robert ordered the consolidation of GR Nos. 146710-15 and GR No. 146738 and the filing of
Barbers were absent.44 The House of Representatives also approved Senator the respondents' comments "on or before 8:00 a.m. of February 15."
On February 15, the consolidated cases were orally argued in a four-hour hearing. United States, the most authoritative guidelines to determine whether a question is
Before the hearing, Chief Justice Davide, Jr. 51 and Associate Justice Artemio political were spelled out by Mr. Justice Brennan in the 1962 case or Baker v.
Panganiban52 recused themselves on motion of petitioner's counsel, former Senator Carr,56 viz:
Rene A. Saguisag. They debunked the charge of counsel Saguisag that they have "x x x Prominent on the surface of any case held to involve a political question is
"compromised themselves by indicating that they have thrown their weight on one found a textually demonstrable constitutional commitment of the issue to a
side" but nonetheless inhibited themselves. Thereafter, the parties were given the coordinate political department or a lack of judicially discoverable and manageable
short period of five (5) days to file their memoranda and two (2) days to submit their standards for resolving it, or the impossibility of deciding without an initial policy
simultaneous replies. determination of a kind clearly for non-judicial discretion; or the impossibility of a
In a resolution dated February 20, acting on the urgent motion for copies of court's undertaking independent resolution without expressing lack of the respect
resolution and press statement for "Gag Order" on respondent Ombudsman filed by due coordinate branches of government; or an unusual need for unquestioning
counsel for petitioner in G.R. No. 146738, the Court resolved: adherence to a political decision already made; or the potentiality of embarrassment
"(1) to inform the parties that the Court did not issue a resolution on January 20, from multifarious pronouncements by various departments on question. Unless one
2001 declaring the office of the President vacant and that neither did the Chief of these formulations is inextricable from the case at bar, there should be no
Justice issue a press statement justifying the alleged resolution; dismissal for non justiciability on the ground of a political question's presence. The
(2) to order the parties and especially their counsel who are officers of the Court doctrine of which we treat is one of 'political questions', not of 'political cases'."
under pain of being cited for contempt to refrain from making any comment or In the Philippine setting, this Court has been continuously confronted with cases
discussing in public the merits of the cases at bar while they are still pending calling for a firmer delineation of the inner and outer perimeters of a political
decision by the Court, and question.57 Our leading case is Tanada v. Cuenco,58 where this Court, through
(3) to issue a 30-day status quo order effective immediately enjoining the former Chief Justice Roberto Concepcion, held that political questions refer "to those
respondent Ombudsman from resolving or deciding the criminal cases pending questions which, under the Constitution, are to be decided by the people in their
investigation in his office against petitioner, Joseph E. Estrada and subject of the sovereign capacity, or in regard to whichfull discretionary authority has been
cases at bar, it appearing from news reports that the respondent Ombudsman may delegated to the legislative or executive branch of the government. It is concerned
immediately resolve the cases against petitioner Joseph E. Estrada seven (7) days with issues dependent upon the wisdom, not legality of a particular measure." To a
after the hearing held on February 15, 2001, which action will make the cases at bar great degree, the 1987 Constitution has narrowed the reach of the political question
moot and academic."53 doctrine when it expanded the power of judicial review of this court not only to settle
The parties filed their replies on February 24. On this date, the cases at bar were actual controversies involving rights which are legally demandable and
deemed submitted for decision. enforceable but also to determine whether or not there has been a grave
The bedrock issues for resolution of this Court are: abuse of discretion amounting to lack or excess of jurisdiction on the part
I of any branch or instrumentality of government.59 Heretofore, the judiciary
Whether the petitions present a justiciable controversy. has focused on the "thou shalt not's" of the Constitution directed against the
II exercise of its jurisdiction.60 With the new provision, however, courts are given a
Assuming that the petitions present a justiciable controversy, whether petitioner greater prerogative to determine what it can do to prevent grave abuse of discretion
Estrada is a President on leave while respondent Arroyo is an Acting President. amounting to lack or excess of jurisdiction on the part of any branch or
III instrumentality of government. Clearly, the new provision did not just grant
Whether conviction in the impeachment proceedings is a condition precedent for the the Court power of doing nothing. In sync and symmetry with this intent are
criminal prosecution of petitioner Estrada. In the negative and on the assumption other provisions of the 1987 Constitution trimming the so called political thicket.
that petitioner is still President, whether he is immune from criminal prosecution. Prominent of these provisions is section 18 of Article VII which empowers this Court
IV in limpid language to "x x x review, in an appropriate proceeding filed by any citizen,
Whether the prosecution of petitioner Estrada should be enjoined on the ground of the sufficiency of the factual basis of the proclamation of martial law or the
prejudicial publicity. suspension of the privilege of the writ (of habeas corpus) or the extension thereof x
We shall discuss the issues in seriatim. x x."
I Respondents rely on the case of Lawyers League for a Better Philippines
Whether or not the cases and/or Oliver A. Lozano v. President Corazon C. Aquino, et al.61 and related
At bar involve a political question cases62 to support their thesis that since the cases at bar involve the legitimacy of
Private respondents54 raise the threshold issue that the cases at bar pose a political the government of respondent Arroyo, ergo, they present a political question. A
question, and hence, are beyond the jurisdiction of this Court to decide. They more cerebral reading of the cited cases will show that they are inapplicable. In the
contend that shorn of its embroideries, the cases at bar assail the "legitimacy of the cited cases, we held that the government of former President Aquino was the
Arroyo administration." They stress that respondent Arroyo ascended the presidency result of a successful revolution by the sovereign people, albeit a peaceful one.
through people power; that she has already taken her oath as the 14 th President of No less than the Freedom Constitution63 declared that the Aquino government
the Republic; that she has exercised the powers of the presidency and that she has was installed through a direct exercise of the power of the Filipino people "in
been recognized by foreign governments. They submit that these realities on ground defiance of the provisions of the 1973 Constitution, as amended." In is
constitute the political thicket, which the Court cannot enter. familiar learning that the legitimacy of a government sired by a successful revolution
We reject private respondents' submission. To be sure, courts here and abroad, have by people power is beyond judicial scrutiny for that government automatically orbits
tried to lift the shroud on political question but its exact latitude still splits the best out of the constitutional loop. In checkered contrast, the government of
of legal minds. Developed by the courts in the 20th century, the political question respondent Arroyo is not revolutionary in character. The oath that she took at
doctrine which rests on the principle of separation of powers and on prudential the EDSA Shrine is the oath under the 1987 Constitution.64 In her oath, she
considerations, continue to be refined in the mills of constitutional law. 55 In the categorically swore to preserve and defend the 1987 Constitution. Indeed,
she has stressed that she is discharging the powers of the presidency under the democracy, it is the people who count; those who are deaf to their
authority of the 1987 Constitution.1wphi1.nt grievances are ciphers."
In fine, the legal distinction between EDSA People Power I EDSA People Power II is Needless to state, the cases at bar pose legal and not political questions. The
clear. EDSA I involves the exercise of the people power of principal issues for resolution require the proper interpretation of certain provisions
revolution which overthrew the whole government. EDSA II is an exercise in the 1987 Constitution, notably section 1 of Article II,74 and section 875 of Article VII,
ofpeople power of freedom of speech and freedom of assembly to petition and the allocation of governmental powers under section 11 76 of Article VII. The
the government for redress of grievances which only affected the office of issues likewise call for a ruling on the scope of presidential immunity from suit. They
the President. EDSA I is extra constitutional and the legitimacy of the new also involve the correct calibration of the right of petitioner against prejudicial
government that resulted from it cannot be the subject of judicial review, but EDSA publicity. As early as the 1803 case of Marbury v. Madison,77 the doctrine has
II is intra constitutional and the resignation of the sitting President that it caused been laid down that "it is emphatically the province and duty of the judicial
and the succession of the Vice President as President are subject to judicial department to say what the law is . . ." Thus, respondent's in vocation of the
review. EDSA I presented a political question; EDSA II involves legal doctrine of political question is but a foray in the dark.
questions. A brief discourse on freedom of speech and of the freedom of assembly II
to petition the government for redress of grievance which are the cutting edge of Whether or not the petitioner
EDSA People Power II is not inappropriate. Resigned as President
Freedom of speech and the right of assembly are treasured by Filipinos. Denial of We now slide to the second issue. None of the parties considered this issue as
these rights was one of the reasons of our 1898 revolution against Spain. Our posing a political question. Indeed, it involves a legal question whose factual
national hero, Jose P. Rizal, raised the clarion call for the recognition of freedom of ingredient is determinable from the records of the case and by resort to judicial
the press of the Filipinos and included it as among "the reforms sine quibus notice. Petitioner denies he resigned as President or that he suffers from a
non."65 TheMalolos Constitution, which is the work of the revolutionary Congress permanent disability. Hence, he submits that the office of the President was not
in 1898, provided in its Bill of Rights that Filipinos shall not be deprived (1) of the vacant when respondent Arroyo took her oath as President.
right to freely express his ideas or opinions, orally or in writing, through the use of The issue brings under the microscope the meaning of section 8, Article VII of the
the press or other similar means; (2) of the right of association for purposes of Constitution which provides:
human life and which are not contrary to public means; and (3) of the right to send "Sec. 8. In case of death, permanent disability, removal from office or resignation of
petitions to the authorities, individually or collectively." These fundamental rights the President, the Vice President shall become the President to serve the unexpired
were preserved when the United States acquired jurisdiction over the term. In case of death, permanent disability, removal from office, or resignation of
Philippines. In the Instruction to the Second Philippine Commission of April 7, 1900 both the President and Vice President, the President of the Senate or, in case of his
issued by President McKinley, it is specifically provided "that no law shall be passed inability, the Speaker of the House of Representatives, shall then act as President
abridging the freedom of speech or of the press or of the rights of the people to until the President or Vice President shall have been elected and qualified.
peaceably assemble and petition the Government for redress of grievances." The x x x."
guaranty was carried over in the Philippine Bill, the Act of Congress of July 1, 1902 The issue then is whether the petitioner resigned as President or should be
and the Jones Law, the Act of Congress of August 29, 1966.66 considered resigned as of January 20, 2001 when respondent took her oath as the
Thence on, the guaranty was set in stone in our 1935 Constitution,67 and 14th President of the Public. Resignation is not a high level legal abstraction. It is a
the 197368 Constitution. These rights are now safely ensconced in section 4, factual question and its elements are beyond quibble: there must be an intent
Article III of the 1987 Constitution, viz: to resign and the intent must be coupled by acts of relinquishment. 78 The
"Sec. 4. No law shall be passed abridging the freedom of speech, of expression, or of validity of a resignation is not government by any formal requirement as to form. It
the press, or the right of the people peaceably to assemble and petition the can be oral. It can be written. It can be express. It can be implied. As long as the
government for redress of grievances." resignation is clear, it must be given legal effect.
The indispensability of the people's freedom of speech and of assembly to In the cases at bar, the facts show that petitioner did not write any formal letter of
democracy is now self-evident. The reasons are well put by Emerson: first, freedom resignation before he evacuated Malacaang Palace in the afternoon of January 20,
of expression is essential as a means of assuring individual fulfillment; second, it is 2001 after the oath-taking of respondent Arroyo. Consequently, whether or not
an essential process for advancing knowledge and discovering truth; third, it is petitioner resigned has to be determined from his act and omissions before, during
essential to provide for participation in decision-making by all members of society; and after January 20, 2001 or by the totality of prior, contemporaneous and
and fourth, it is a method of achieving a more adaptable and hence, a more stable posterior facts and circumstantial evidence bearing a material relevance
community of maintaining the precarious balance between healthy cleavage and on the issue.
necessary consensus."69 In this sense, freedom of speech and of assembly Using this totality test, we hold that petitioner resigned as President.
provides a framework in which the "conflict necessary to the progress of a To appreciate the public pressure that led to the resignation of the petitioner, it is
society can take place without destroying the society." 70 In Hague v. important to follow the succession of events after the expos of Governor Singson.
Committee for Industrial Organization,71 this function of free speech and The Senate Blue Ribbon Committee investigated. The more detailed revelations of
assembly was echoed in the amicus curiae filed by the Bill of Rights Committee of petitioner's alleged misgovernance in the Blue Ribbon investigation spiked the hate
the American Bar Association which emphasized that "the basis of the right of against him. The Articles of Impeachment filed in the House of Representatives
assembly is the substitution of the expression of opinion and belief by talk rather which initially was given a near cipher chance of succeeding snowballed. In express
than force; and this means talk for all and by all."72 In the relatively recent case speed, it gained the signatures of 115 representatives or more than 1/3 of the House
of Subayco v. Sandiganbayan,73 this Court similar stressed that " it should be of Representatives. Soon, petitioner's powerful political allies began deserting him.
clear even to those with intellectual deficits that when the sovereign people Respondent Arroyo quit as Secretary of Social Welfare. Senate President Drilon and
assemble to petition for redress of grievances, all should listen.For in a former Speaker Villar defected with 47 representatives in tow. Then, his respected
senior economic advisers resigned together with his Secretary of Trade and Industry.
As the political isolation of the petitioner worsened, the people's call for his The President says. "Pagod na pagod na ako. Ayoko na masyado nang
resignation intensified. The call reached a new crescendo when the eleven (11) masakit. Pagod na ako sa red tape, bureaucracy, intriga. (I am very tired. I
members of the impeachment tribunal refused to open the second envelope. It sent don't want any more of this it's too painful. I'm tired of the red tape, the
the people to paroxysms of outrage. Before the night of January 16 was over, the bureaucracy, the intrigue.)
EDSA Shrine was swarming with people crying for redress of their grievance. Their I just want to clear my name, then I will go." 88
number grew exponentially. Rallies and demonstration quickly spread to the Again, this is high grade evidence that the petitioner has resigned. The
countryside like a brush fire. intent to resign is clear when he said "x x x Ayoko na masyado nang masakit."
As events approached January 20, we can have an authoritative window on "Ayoko na" are words of resignation.
the state of mind of the petitioner. The window is provided in the "Final Days of The second round of negotiation resumed at 7:30 a.m. According to the Angara
Joseph Ejercito Estrada," the diary of Executive Secretary Angara serialized in Diary, the following happened:
the Philippine Daily Inquirer.79 The Angara Diary reveals that in the morning of "Opposition's deal
January 19, petitioner's loyal advisers were worried about the swelling of the crowd 7:30 a.m. Rene arrives with Bert Romulo and (Ms. Macapagal's spokesperson) Rene
at EDSA, hence, they decided to create an ad hoc committee to handle it. Their Corona. For this round, I am accompanied by Dondon Bagatsing and Macel.
worry would worsen. At 1:20 p.m., petitioner pulled Secretary Angara into his small Rene pulls out a document titled "Negotiating Points." It reads:
office at the presidential residence and exclaimed: "Ed, seryoso na ito. Kumalas na si '1. The President shall sign a resignation document within the day, 20 January 2001,
Angelo (Reyes) (Ed, this is serious. Angelo has defected.)" 80 An hour later or at 2:30 that will be effective on Wednesday, 24 January 2001, on which day the Vice
p.m., the petitioner decided to call for a snap presidential election and stressed he President will assume the Presidency of the Republic of the Philippines.
would not be a candidate. The proposal for a snap election for president in 2. Beginning to day, 20 January 2001, the transition process for the assumption of
May where he would not be a candidate is an indicium that petitioner had the new administration shall commence, and persons designated by the Vice
intended to give up the presidency even at that time. At 3:00 p.m., General President to various positions and offices of the government shall start their
Reyes joined the sea of EDSA demonstrators demanding the resignation of the orientation activities in coordination with the incumbent officials concerned.
petitioner and dramatically announced the AFP's withdrawal of support from the 3. The Armed Forces of the Philippines and the Philippine National Police shall
petitioner and their pledge of support to respondent Arroyo. The seismic shift of function under the Vice President as national military and police authority effective
support left petitioner weak as a president. According to Secretary Angara, he asked immediately.
Senator Pimentel to advise petitioner to consider the option of "dignified exit or 4. The Armed Forced of the Philippines, through its Chief of Staff, shall guarantee the
resignation."81 Petitioner did not disagree but listened intently.82 The sky security of the President and his family as approved by the national military and
was falling fast on the petitioner. At 9:30 p.m., Senator Pimentel repeated to the police authority (Vice President).
petitioner the urgency of making a graceful and dignified exit. He gave the proposal 5. It is to be noted that the Senate will open the second envelope in connection with
a sweetener by saying that petitioner would be allowed to go abroad with enough the alleged savings account of the President in the Equitable PCI Bank in accordance
funds to support him and his family.83 Significantly, the petitioner expressed no with the rules of the Senate, pursuant to the request to the Senate President.
objection to the suggestion for a graceful and dignified exit but said he Our deal
would never leave the country.84 At 10:00 p.m., petitioner revealed to Secretary We bring out, too, our discussion draft which reads:
Angara, "Ed, Angie (Reyes) guaranteed that I would have five days to a week in the The undersigned parties, for and in behalf of their respective principals, agree and
palace."85 This is proof that petitioner had reconciled himself to the reality undertake as follows:
that he had to resign. His mind was already concerned with the five-day '1. A transition will occur and take place on Wednesday, 24 January 2001, at which
grace period he could stay in the palace. It was a matter of time. time President Joseph Ejercito Estrada will turn over the presidency to Vice President
The pressure continued piling up. By 11:00 p.m., former President Ramos called up Gloria Macapagal-Arroyo.
Secretary Angara and requested, "Ed, magtulungan tayo para magkaroon tayo ng '2. In return, President Estrada and his families are guaranteed security and safety of
(let's cooperate to ensure a) peaceful and orderly transfer of power."86 There their person and property throughout their natural lifetimes. Likewise, President
was no defiance to the request. Secretary Angara readily agreed. Again, we note Estrada and his families are guarantee freedom from persecution or retaliation from
that at this stage, the problem was already about a peaceful and orderly government and the private sector throughout their natural lifetimes.
transfer of power. The resignation of the petitioner was implied. This commitment shall be guaranteed by the Armed Forces of the Philippines (AFP)
The first negotiation for a peaceful and orderly transfer of power immediately through the Chief of Staff, as approved by the national military and police authorities
started at 12:20 a.m. of January 20, that fateful Saturday. The negotiation was Vice President (Macapagal).
limited to three (3) points: (1) the transition period of five days after the petitioner's '3. Both parties shall endeavor to ensure that the Senate sitting as an impeachment
resignation; (2) the guarantee of the safety of the petitioner and his family, and (3) court will authorize the opening of the second envelope in the impeachment trial as
the agreement to open the second envelope to vindicate the name of the proof that the subject savings account does not belong to President Estrada.
petitioner.87 Again, we note that the resignation of petitioner was not a '4. During the five-day transition period between 20 January 2001 and 24 January
disputed point. The petitioner cannot feign ignorance of this fact.According 2001 (the 'Transition Period"), the incoming Cabinet members shall receive an
to Secretary Angara, at 2:30 a.m., he briefed the petitioner on the three points and appropriate briefing from the outgoing Cabinet officials as part of the orientation
the following entry in the Angara Diary shows the reaction of the program.
petitioner, viz: During the Transition Period, the AFP and the Philippine National Police (PNP) shall
"x x x function Vice President (Macapagal) as national military and police authorities.
I explain what happened during the first round of negotiations. Both parties hereto agree that the AFP chief of staff and PNP director general shall
The President immediately stresses that he just wants the five-day period obtain all the necessary signatures as affixed to this agreement and insure faithful
promised by Reyes, as well as to open the second envelope to clear his name. implementation and observance thereof.
If the envelope is opened, on Monday, he says, he will leave by Monday.
Vice President Gloria Macapagal-Arroyo shall issue a public statement in the form The President is too stunned for words:
and tenor provided for in "Annex A" heretofore attached to this agreement." 89 Final meal
The second round of negotiation cements the reading that the petitioner has 12 noon Gloria takes her oath as president of the Republic of the Philippines.
resigned. It will be noted that during this second round of negotiation, the 12:20 p.m. The PSG distributes firearms to some people inside the compound.
resignation of the petitioner was again treated as a given fact. The only unsettled The president is having his final meal at the presidential Residence with the few
points at that time were the measures to be undertaken by the parties during and friends and Cabinet members who have gathered.
after the transition period. By this time, demonstrators have already broken down the first line of defense at
According to Secretary Angara, the draft agreement, which was premised on the Mendiola. Only the PSG is there to protect the Palace, since the police and military
resignation of the petitioner was further refined. It was then, signed by their side have already withdrawn their support for the President.
and he was ready to fax it to General Reyes and Senator Pimentel to await the 1 p.m. The President's personal staff is rushing to pack as many of the Estrada
signature of the United Opposition. However, the signing by the party of the family's personal possessions as they can.
respondent Arroyo was aborted by her oath-taking. The Angara diary narrates the During lunch, Ronnie Puno mentions that the president needs to release a final
fateful events, viz;90 statement before leaving Malacaang.
"xxx The statement reads: At twelve o'clock noon today, Vice President Gloria Macapagal-
11:00 a.m. Between General Reyes and myself, there is a firm agreement on the Arroyo took her oath as President of the Republic of the Philippines. While along with
five points to effect a peaceful transition. I can hear the general clearing all these many other legal minds of our country, I have strong and serious doubts about the
points with a group he is with. I hear voices in the background. legality and constitutionality of her proclamation as President, I do not wish to be a
Agreement. factor that will prevent the restoration of unity and order in our civil society.
The agreement starts: 1. The President shall resign today, 20 January 2001, which It is for this reason that I now leave Malacaang Palace, the seat of the presidency of
resignation shall be effective on 24 January 2001, on which day the Vice President this country, for the sake of peace and in order to begin the healing process of our
will assume the presidency of the Republic of the Philippines. nation. I leave the Palace of our people with gratitude for the opportunities given to
xxx me for service to our people. I will not shirk from any future challenges that may
The rest of the agreement follows: come ahead in the same service of our country.
2. The transition process for the assumption of the new administration shall I call on all my supporters and followers to join me in the promotion of a constructive
commence on 20 January 2001, wherein persons designated by the Vice President to national spirit of reconciliation and solidarity.
various government positions shall start orientation activities with incumbent May the Almighty bless our country and our beloved people.
officials. MABUHAY!"'
'3. The Armed Forces of the Philippines through its Chief of Staff, shall guarantee the It was curtain time for the petitioner.
safety and security of the President and his families throughout their natural In sum, we hold that the resignation of the petitioner cannot be doubted. It was
lifetimes as approved by the national military and police authority Vice President. confirmed by his leaving Malacaang. In the press release containing his final
'4. The AFP and the Philippine National Police (PNP) shall function under the Vice statement, (1) he acknowledged the oath-taking of the respondent as President of
President as national military and police authorities. the Republic albeit with reservation about its legality; (2) he emphasized he was
'5. Both parties request the impeachment court to open the second envelope in the leaving the Palace, the seat of the presidency, for the sake of peace and in order to
impeachment trial, the contents of which shall be offered as proof that the subject begin the healing process of our nation. He did not say he was leaving the Palace
savings account does not belong to the President. due to any kind inability and that he was going to re-assume the presidency as soon
The Vice President shall issue a public statement in the form and tenor provided for as the disability disappears: (3) he expressed his gratitude to the people for the
in Annex "B" heretofore attached to this agreement. opportunity to serve them. Without doubt, he was referring to the past opportunity
11:20 a.m. I am all set to fax General Reyes and Nene Pimentel our agreement, given him to serve the people as President (4) he assured that he will not shirk from
signed by our side and awaiting the signature of the United opposition. any future challenge that may come ahead in the same service of our country.
And then it happens. General Reyes calls me to say that the Supreme Court has Petitioner's reference is to a future challenge after occupying the office of the
decided that Gloria Macapagal-Arroyo is President and will be sworn in at 12 noon. president which he has given up; and (5) he called on his supporters to join him in
'Bakit hindi naman kayo nakahintay? Paano na ang agreement (why couldn't you the promotion of a constructive national spirit of reconciliation and solidarity.
wait? What about the agreement)?' I asked. Certainly, the national spirit of reconciliation and solidarity could not be attained if
Reyes answered: 'Wala na, sir (it's over, sir).' he did not give up the presidency. The press release was petitioner's valedictory, his
I ask him: Di yung transition period, moot and academic na?' final act of farewell. His presidency is now in the part tense.
And General Reyes answers: ' Oo nga, I delete na natin, sir (yes, we're deleting the It is, however, urged that the petitioner did not resign but only took a temporary
part).' leave dated January 20, 2001 of the petitioner sent to Senate President Pimentel and
Contrary to subsequent reports, I do not react and say that there was a double cross. Speaker Fuentebella is cited. Again, we refer to the said letter, viz:
But I immediately instruct Macel to delete the first provision on resignation since this "Sir.
matter is already moot and academic. Within moments, Macel erases the first By virtue of the provisions of Section II, Article VII of the Constitution, I am hereby
provision and faxes the documents, which have been signed by myself, Dondon and transmitting this declaration that I am unable to exercise the powers and duties of
Macel, to Nene Pimentel and General Reyes. my office. By operation of law and the Constitution, the Vice President shall be the
I direct Demaree Ravel to rush the original document to General Reyes for the Acting president.
signatures of the other side, as it is important that the provisions on security, at (Sgd.) Joseph Ejercito Estrada"
least, should be respected. To say the least, the above letter is wrapped in mystery. 91 The pleadings filed by the
I then advise the President that the Supreme Court has ruled that Chief Justice petitioner in the cases at bar did not discuss, may even intimate, the circumstances
Davide will administer the oath to Gloria at 12 noon. that led to its preparation. Neither did the counsel of the petitioner reveal to the
Court these circumstances during the oral argument. It strikes the Court as strange There is another reason why petitioner's contention should be rejected. In the cases
that the letter, despite its legal value, was never referred to by the petitioner during at bar, the records show that when petitioner resigned on January 20, 2001, the
the week-long crisis. To be sure, there was not the slightest hint of its existence cases filed against him before the Ombudsman were OMB Case Nos. 0-00-1629, 0-
when he issued his final press release. It was all too easy for him to tell the Filipino 00-1755, 0-00-1756, 0-00-1757 and 0-00-1758. While these cases have been filed,
people in his press release that he was temporarily unable to govern and that he the respondent Ombudsman refrained from conducting the preliminary investigation
was leaving the reins of government to respondent Arroyo for the time bearing. of the petitioner for the reason that as the sitting President then, petitioner was
Under any circumstance, however, the mysterious letter cannot negate the immune from suit. Technically, the said cases cannot be considered as pending for
resignation of the petitioner. If it was prepared before the press release of the the Ombudsman lacked jurisdiction to act on them. Section 12 of RA No. 3019
petitioner clearly as a later act. If, however, it was prepared after the press released, cannot therefore be invoked by the petitioner for it contemplates of cases whose
still, it commands scant legal significance. Petitioner's resignation from the investigation or prosecution do not suffer from any insuperable legal obstacle like
presidency cannot be the subject of a changing caprice nor of a whimsical will the immunity from suit of a sitting President.
especially if the resignation is the result of his reputation by the people. There is Petitioner contends that the impeachment proceeding is an administrative
another reason why this Court cannot given any legal significance to petitioner's investigation that, under section 12 of RA 3019, bars him from resigning. We hold
letter and this shall be discussed in issue number III of this Decision. otherwise. The exact nature of an impeachment proceeding is debatable. But even
After petitioner contended that as a matter of fact he did not resign, he also argues assuming arguendo that it is an administrative proceeding, it can not be considered
that he could not resign as a matter of law. He relies on section 12 of RA No. 3019, pending at the time petitioner resigned because the process already broke down
otherwise known as the Anti-graft and Corrupt Practices Act, which allegedly when a majority of the senator-judges voted against the opening of the second
prohibits his resignation, viz: envelope, the public and private prosecutors walked out, the public prosecutors filed
"Sec. 12. No public officer shall be allowed to resign or retire pending an their Manifestation of Withdrawal of Appearance, and the proceedings were
investigation, criminals or administrative, or pending a prosecution against him, for postponed indefinitely. There was, in effect, no impeachment case pending against
any offense under this Act or under the provisions of the Revised Penal Code on petitioner when he resigned.
bribery." III
A reading of the legislative history of RA No. 3019 will hardly provide any comfort to Whether or not the petitioner Is only temporarily unable to Act as
the petitioner. RA No. 3019 originated form Senate Bill No. 293. The original draft of President.
the bill, when it was submitted to the Senate, did not contain a provision similar to We shall now tackle the contention of the petitioner that he is merely temporarily
section 12 of the law as it now stands. However, in his sponsorship speech, Senator unable to perform the powers and duties of the presidency, and hence is a President
Arturo Tolentino, the author of the bill, "reserved to propose during the period of on leave. As aforestated, the inability claim is contained in the January 20, 2001
amendments the inclusion of a provision to the effect that no public official who is letter of petitioner sent on the same day to Senate President Pimentel and Speaker
under prosecution for any act of graft or corruption, or is under administrative Fuentebella.
investigation, shall be allowed to voluntarily resign or retire." 92 During the period of Petitioner postulates that respondent Arroyo as Vice President has no power to
amendments, the following provision was inserted as section 15: adjudge the inability of the petitioner to discharge the powers and duties of the
"Sec. 15. Termination of office No public official shall be allowed to resign or retire presidency. His significant submittal is that "Congress has the ultimate authority
pending an investigation, criminal or administrative, or pending a prosecution under the Constitution to determine whether the President is incapable of
against him, for any offense under the Act or under the provisions of the Revised performing his functions in the manner provided for in section 11 of article
Penal Code on bribery. VII."95 This contention is the centerpiece of petitioner's stance that he is a
The separation or cessation of a public official form office shall not be a bar to his President on leave and respondent Arroyo is only an Acting President.
prosecution under this Act for an offense committed during his incumbency." 93 An examination of section 11, Article VII is in order. It provides:
The bill was vetoed by then President Carlos P. Garcia who questioned the legality of "SEC. 11. Whenever the President transmits to the President of the Senate and the
the second paragraph of the provision and insisted that the President's immunity Speaker of the House of Representatives his written declaration that he is unable to
should extend after his tenure. discharge the powers and duties of his office, and until he transmits to them a
Senate Bill No. 571, which was substantially similar Senate Bill No. 293, was written declaration to the contrary, such powers and duties shall be discharged by
thereafter passed. Section 15 above became section 13 under the new bill, but the the Vice-President as Acting President.
deliberations on this particular provision mainly focused on the immunity of the Whenever a majority of all the Members of the Cabinet transmit to the President of
President, which was one of the reasons for the veto of the original bill. There was the Senate and to the Speaker of the House of Representatives their written
hardly any debate on the prohibition against the resignation or retirement of a public declaration that the President is unable to discharge the powers and duties of his
official with pending criminal and administrative cases against him. Be that as it office, the Vice-President shall immediately assume the powers and duties of the
may, the intent of the law ought to be obvious. It is to prevent the act of resignation office as Acting President.
or retirement from being used by a public official as a protective shield to stop the Thereafter, when the President transmits to the President of the Senate and to the
investigation of a pending criminal or administrative case against him and to Speaker of the House of Representatives his written declaration that no inability
prevent his prosecution under the Anti-Graft Law or prosecution for bribery under exists, he shall reassume the powers and duties of his office. Meanwhile, should a
the Revised Penal Code. To be sure, no person can be compelled to render service majority of all the Members of the Cabinet transmit within five days to the President
for that would be a violation of his constitutional right. 94 A public official has the right of the Senate and to the Speaker of the House of Representatives their written
not to serve if he really wants to retire or resign. Nevertheless, if at the time he declaration that the President is unable to discharge the powers and duties of his
resigns or retires, a public official is facing administrative or criminal investigation or office, the Congress shall decide the issue. For that purpose, the Congress shall
prosecution, such resignation or retirement will not cause the dismissal of the convene, if it is not in session, within forty-eight hours, in accordance with its rules
criminal or administrative proceedings against him. He cannot use his resignation or and without need of call.
retirement to avoid prosecution.
If the Congress, within ten days after receipt of the last written declaration, or, if not (Sgd.) ROBERTO P. NAZARENO
in session, within twelve days after it is required to assemble, determines by a two- Secretary General"
thirds vote of both Houses, voting separately, that the President is unable to On February 7, 2001, the House of the Representatives passed House Resolution
discharge the powers and duties of his office, the Vice-President shall act as No. 17898 which states:
President; otherwise, the President shall continue exercising the powers and duties "RESOLUTION CONFIRMING PRESIDENT GLORIA MACAPAGAL-ARROYO'S NOMINATION
of his office." OF SENATOR TEOFISTO T. GUINGONA, JR. AS VICE PRESIDENT OF THE REPUBLIC OF
That is the law. Now, the operative facts: THE PHILIPPINES
1. Petitioner, on January 20, 2001, sent the above letter claiming WHEREAS, there is a vacancy in the Office of the Vice President due to the
inability to the Senate President and Speaker of the House; assumption to the Presidency of Vice President Gloria Macapagal-Arroyo;
2. Unaware of the letter, respondent Arroyo took her oath of office as WHEREAS, pursuant to Section 9, Article VII of the Constitution, the President in the
President on January 20, 2001 at about 12:30 p.m.; event of such vacancy shall nominate a Vice President from among the members of
3. Despite receipt of the letter, the House of Representatives passed the Senate and the House of Representatives who shall assume office upon
on January 24, 2001 House Resolution No. 175;96 confirmation by a majority vote of all members of both Houses voting separately;
On the same date, the House of the Representatives passed House Resolution No. WHEREAS, Her Excellency, President Gloria Macapagal-Arroyo has nominated Senate
17697 which states: Minority Leader Teofisto T. Guingona Jr., to the position of Vice President of the
"RESOLUTION EXPRESSING THE SUPPORT OF THE HOUSE OF REPRESENTATIVES TO Republic of the Philippines;
THE ASSUMPTION INTO OFFICE BY VICE PRESIDENT GLORIA MACAPAGAL-ARROYO AS WHEREAS, Senator Teofisto T. Guingona Jr., is a public servant endowed with
PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, EXTENDING ITS integrity, competence and courage; who has served the Filipino people with
CONGRATULATIONS AND EXPRESSING ITS SUPPORT FOR HER ADMINISTRATION AS A dedicated responsibility and patriotism;
PARTNER IN THE ATTAINMENT OF THE NATION'S GOALS UNDER THE CONSTITUTION WHEREAS, Senator Teofisto T. Guingona, Jr. possesses sterling qualities of true
WHEREAS, as a consequence of the people's loss of confidence on the ability of statesmanship, having served the government in various capacities, among others,
former President Joseph Ejercito Estrada to effectively govern, the Armed Forces of as Delegate to the Constitutional Convention, Chairman of the Commission on Audit,
the Philippines, the Philippine National Police and majority of his cabinet had Executive Secretary, Secretary of Justice, Senator of the Philippines qualities which
withdrawn support from him; merit his nomination to the position of Vice President of the Republic: Now,
WHEREAS, upon authority of an en banc resolution of the Supreme Court, Vice therefore, be it
President Gloria Macapagal-Arroyo was sworn in as President of the Philippines on 20 Resolved as it is hereby resolved by the House of Representatives, That the House
January 2001 before Chief Justice Hilario G. Davide, Jr.; of Representatives confirms the nomination of Senator Teofisto T. Guingona, Jr. as
WHEREAS, immediately thereafter, members of the international community had the Vice President of the Republic of the Philippines.
extended their recognition to Her Excellency, Gloria Macapagal-Arroyo as President Adopted,
of the Republic of the Philippines; (Sgd.) FELICIANO BELMONTE JR.
WHEREAS, Her Excellency, President Gloria Macapagal-Arroyo has espoused a policy Speaker
of national healing and reconciliation with justice for the purpose of national unity This Resolution was adopted by the House of Representatives on February 7, 2001.
and development; (Sgd.) ROBERTO P. NAZARENO
WHEREAS, it is axiomatic that the obligations of the government cannot be achieved Secretary General"
if it is divided, thus by reason of the constitutional duty of the House of (4) Also, despite receipt of petitioner's letter claiming inability, some twelve (12)
Representatives as an institution and that of the individual members thereof of members of the Senate signed the following:
fealty to the supreme will of the people, the House of Representatives must ensure "RESOLUTION
to the people a stable, continuing government and therefore must remove all WHEREAS, the recent transition in government offers the nation an opportunity for
obstacles to the attainment thereof; meaningful change and challenge;
WHEREAS, it is a concomitant duty of the House of Representatives to exert all WHEREAS, to attain desired changes and overcome awesome challenges the nation
efforts to unify the nation, to eliminate fractious tension, to heal social and political needs unity of purpose and resolve cohesive resolute (sic) will;
wounds, and to be an instrument of national reconciliation and solidarity as it is a WHEREAS, the Senate of the Philippines has been the forum for vital legislative
direct representative of the various segments of the whole nation; measures in unity despite diversities in perspectives;
WHEREAS, without surrending its independence, it is vital for the attainment of all WHEREFORE, we recognize and express support to the new government of President
the foregoing, for the House of Representatives to extend its support and Gloria Macapagal-Arroyo and resolve to discharge and overcome the nation's
collaboration to the administration of Her Excellency, President Gloria Macapagal- challenges." 99
Arroyo, and to be a constructive partner in nation-building, the national interest On February 7, the Senate also passed Senate Resolution No. 82100 which states:
demanding no less: Now, therefore, be it "RESOLUTION CONFIRMING PRESIDENT GLORIA MACAPAGAL ARROYO'S NOMINATION
Resolved by the House of Representatives, To express its support to the assumption OF SEM. TEOFISTO T. GUINGONA, JR. AS VICE PRESIDENT OF THE REPUBLIC OF THE
into office by Vice President Gloria Macapagal-Arroyo as President of the Republic of PHILIPPINES
the Philippines, to extend its congratulations and to express its support for her WHEREAS, there is vacancy in the Office of the Vice President due to the assumption
administration as a partner in the attainment of the Nation's goals under the to the Presidency of Vice President Gloria Macapagal-Arroyo;
Constitution. WHEREAS, pursuant to Section 9 Article VII of the Constitution, the President in the
Adopted, event of such vacancy shall nominate a Vice President from among the members of
(Sgd.) FELICIANO BELMONTE JR. the Senate and the House of Representatives who shall assume office upon
Speaker confirmation by a majority vote of all members of both Houses voting separately;
This Resolution was adopted by the House of Representatives on January 24, 2001.
WHEREAS, Her Excellency, President Gloria Macapagal-Arroyo has nominated Senate Philippines. Following Taada v. Cuenco,102 we hold that this Court cannot exercise
Minority Leader Teofisto T. Guingona, Jr. to the position of Vice President of the its judicial power or this is an issue "in regard to which full discretionary authority
Republic of the Philippines; has been delegated to the Legislative xxx branch of the government." Or to use the
WHEREAS, Sen. Teofisto T. Guingona, Jr. is a public servant endowed with integrity, language in Baker vs. Carr,103 there is a "textually demonstrable or a lack of
competence and courage; who has served the Filipino people with dedicated judicially discoverable and manageable standards for resolving it." Clearly, the Court
responsibility and patriotism; cannot pass upon petitioner's claim of inability to discharge the power and duties of
WHEREAS, Sen. Teofisto T. Guingona, Jr. possesses sterling qualities of true the presidency. The question is political in nature and addressed solely to
statemanship, having served the government in various capacities, among others, Congress by constitutional fiat. It is a political issue, which cannot be decided by
as Delegate to the Constitutional Convention, Chairman of the Commission on Audit, this Court without transgressing the principle of separation of powers.
Executive Secretary, Secretary of Justice, Senator of the land - which qualities merit In fine, even if the petitioner can prove that he did not resign, still, he
his nomination to the position of Vice President of the Republic: Now, therefore, be it cannot successfully claim that he is a President on leave on the ground
Resolved, as it is hereby resolved, That the Senate confirm the nomination of Sen. that he is merely unable to govern temporarily. That claim has been laid to
Teofisto T. Guingona, Jr. as Vice President of the Republic of the Philippines. rest by Congress and the decision that respondent Arroyo is the de jure,
Adopted, president made by a co-equal branch of government cannot be reviewed
(Sgd.) AQUILINO Q. PIMENTEL JR. by this Court.
President of the Senate IV
This Resolution was adopted by the Senate on February 7, 2001. Whether or not the petitioner enjoys immunity from suit.
(Sgd.) LUTGARDO B. BARBO Assuming he enjoys immunity, the extent of the immunity
Secretary of the Senate" Petitioner Estrada makes two submissions: first, the cases filed against him before
On the same date, February 7, the Senate likewise passed Senate Resolution No. the respondent Ombudsman should be prohibited because he has not been
83101 which states: convicted in the impeachment proceedings against him; andsecond, he
"RESOLUTION RECOGNIZING THAT THE IMPEACHMENT COURT IS FUNCTUS OFFICIO enjoys immunity from all kinds of suit, whether criminal or civil.
Resolved, as it is hereby resolved. That the Senate recognize that the Impeachment Before resolving petitioner's contentions, a revisit of our legal history executive
Court is functus officioand has been terminated. immunity will be most enlightening. The doctrine of executive immunity in this
Resolved, further, That the Journals of the Impeachment Court on Monday, January jurisdiction emerged as a case law. In the 1910 case of Forbes, etc. vs. Chuoco
15, Tuesday, January 16 and Wednesday, January 17, 2001 be considered approved. Tiaco and Crosfield,104 the respondent Tiaco, a Chinese citizen, sued petitioner W.
Resolved, further, That the records of the Impeachment Court including the "second Cameron Forbes, Governor-General of the Philippine Islands. J.E. Harding and C.R.
envelope" be transferred to the Archives of the Senate for proper safekeeping and Trowbridge, Chief of Police and Chief of the Secret Service of the City of Manila,
preservation in accordance with the Rules of the Senate. Disposition and retrieval respectively, for damages for allegedly conspiring to deport him to China. In
thereof shall be made only upon written approval of the Senate president. granting a writ of prohibition, this Court, speaking thru Mr. Justice Johnson, held:
Resolved, finally. That all parties concerned be furnished copies of this Resolution. " The principle of nonliability, as herein enunciated, does not mean that the judiciary
Adopted, has no authority to touch the acts of the Governor-General; that he may, under
(Sgd.) AQUILINO Q. PIMENTEL, JR. cover of his office, do what he will, unimpeded and unrestrained. Such a
President of the Senate construction would mean that tyranny, under the guise of the execution of the law,
This Resolution was adopted by the Senate on February 7, 2001. could walk defiantly abroad, destroying rights of person and of property, wholly free
(Sgd.) LUTGARDO B. BARBO from interference of courts or legislatures. This does not mean, either that a person
Secretary of the Senate" injured by the executive authority by an act unjustifiable under the law has n
(5) On February 8, the Senate also passed Resolution No. 84 "certifying to the remedy, but must submit in silence. On the contrary, it means, simply, that the
existence of vacancy in the Senate and calling on the COMELEC to fill up such governors-general, like the judges if the courts and the members of the Legislature,
vacancy through election to be held simultaneously with the regular election on May may not be personally mulcted in civil damages for the consequences of an act
14, 2001 and the Senatorial candidate garnering the thirteenth (13 th) highest executed in the performance of his official duties. The judiciary has full power to,
number of votes shall serve only for the unexpired term of Senator Teofisto T. and will, when the mater is properly presented to it and the occasion justly warrants
Guingona, Jr.' it, declare an act of the Governor-General illegal and void and place as nearly as
(6) Both houses of Congress started sending bills to be signed into law by possible in status quo any person who has been deprived his liberty or his property
respondent Arroyo as President. by such act. This remedy is assured to every person, however humble or of
(7) Despite the lapse of time and still without any functioning Cabinet, without any whatever country, when his personal or property rights have been invaded, even by
recognition from any sector of government, and without any support from the Armed the highest authority of the state. The thing which the judiciary can not do is mulct
Forces of the Philippines and the Philippine National Police, the petitioner continues the Governor-General personally in damages which result from the performance of
to claim that his inability to govern is only momentary. his official duty, any more than it can a member of the Philippine Commission of the
What leaps to the eye from these irrefutable facts is that both houses of Philippine Assembly. Public policy forbids it.
Congress have recognized respondent Arroyo as the President. Implicitly Neither does this principle of nonliability mean that the chief executive may not be
clear in that recognition is the premise that the inability of petitioner personally sued at all in relation to acts which he claims to perform as such official.
Estrada. Is no longer temporary. Congress has clearly rejected petitioner's On the contrary, it clearly appears from the discussion heretofore had, particularly
claim of inability. that portion which touched the liability of judges and drew an analogy between such
The question is whether this Court has jurisdiction to review the claim of liability and that of the Governor-General, that the latter is liable when he acts in a
temporary inability of petitioner Estrada and thereafter revise the decision case so plainly outside of his power and authority that he can not be said to have
of both Houses of Congress recognizing respondent Arroyo as president of the exercised discretion in determining whether or not he had the right to act. What is
held here is that he will be protected from personal liability for damages not only provide him that kind of an immunity, he might be spending all his time facing
when he acts within his authority, but also when he is without authority, provided he litigation's, as the President-in-exile in Hawaii is now facing litigation's almost daily?
actually used discretion and judgement, that is, the judicial faculty, in determining Fr. Bernas. The reason for the omission is that we consider it understood in present
whether he had authority to act or not. In other words, in determining the question jurisprudence that during his tenure he is immune from suit.
of his authority. If he decide wrongly, he is still protected provided the question of Mr. Suarez. So there is no need to express it here.
his authority was one over which two men, reasonably qualified for that position, Fr. Bernas. There is no need. It was that way before. The only innovation made by
might honestly differ; but he s not protected if the lack of authority to act is so plain the 1973 Constitution was to make that explicit and to add other things.
that two such men could not honestly differ over its determination. In such case, be Mr. Suarez. On that understanding, I will not press for any more query, Madam
acts, not as Governor-General but as a private individual, and as such must answer President.
for the consequences of his act." I think the Commissioner for the clarifications."
Mr. Justice Johnson underscored the consequences if the Chief Executive was not We shall now rule on the contentions of petitioner in the light of this history. We
granted immunity from suit, viz"xxx. Action upon important matters of state reject his argument that he cannot be prosecuted for the reason that he must first
delayed; the time and substance of the chief executive spent in wrangling litigation; be convicted in the impeachment proceedings. The impeachment trial of petitioner
disrespect engendered for the person of one of the highest officials of the state and Estrada was aborted by the walkout of the prosecutors and by the events that led to
for the office he occupies; a tendency to unrest and disorder resulting in a way, in his loss of the presidency. Indeed, on February 7, 2001, the Senate passed Senate
distrust as to the integrity of government itself." 105 Resolution No. 83 "Recognizing that the Impeachment Court is Functus
Our 1935 Constitution took effect but it did not contain any specific provision on Officio."109 Since, the Impeachment Court is now functus officio, it is untenable for
executive immunity. Then came the tumult of the martial law years under the late petitioner to demand that he should first be impeached and then convicted before
President Ferdinand E. Marcos and the 1973 Constitution was born. In 1981, it was he can be prosecuted. The plea if granted, would put a perpetual bar against his
amended and one of the amendments involved executive immunity. Section 17, prosecution. Such a submission has nothing to commend itself for it will place him in
Article VII stated: a better situation than a non-sitting President who has not been subjected to
"The President shall be immune from suit during his tenure. Thereafter, no suit impeachment proceedings and yet can be the object of a criminal prosecution. To be
whatsoever shall lie for official acts done by him or by others pursuant to his specific sure, the debates in the Constitutional Commission make it clear that when
orders during his tenure. impeachment proceedings have become moot due to the resignation of the
The immunities herein provided shall apply to the incumbent President referred to in President, the proper criminal and civil cases may already be filed against him,
Article XVII of this Constitution. viz:110
In his second Vicente G. Sinco professional Chair lecture entitled, "Presidential "xxx
Immunity and All The King's Men: The Law of Privilege As a Defense To Actions For Mr. Aquino. On another point, if an impeachment proceeding has been filed against
Damages,"106 petitioner's learned counsel, former Dean of the UP College of Law, the President, for example, and the President resigns before judgement of conviction
Atty. Pacificao Agabin, brightened the modifications effected by this constitutional has been rendered by the impeachment court or by the body, how does it affect the
amendment on the existing law on executive privilege. To quote his disquisition: impeachment proceeding? Will it be necessarily dropped?
"In the Philippines, though, we sought to do the Americans one better by enlarging Mr. Romulo. If we decide the purpose of impeachment to remove one from office,
and fortifying the absolute immunity concept. First, we extended it to shield the then his resignation would render the case moot and academic. However, as the
President not only form civil claims but also from criminal cases and other claims. provision says, the criminal and civil aspects of it may continue in the ordinary
Second, we enlarged its scope so that it would cover even acts of the President courts."
outside the scope of official duties. And third, we broadened its coverage so as to This is in accord with our ruling In Re: Saturnino Bermudez 111 that 'incumbent
include not only the President but also other persons, be they government officials Presidents are immune from suit or from being brought to court during the period of
or private individuals, who acted upon orders of the President. It can be said that at their incumbency and tenure" but not beyond. Considering the peculiar
that point most of us were suffering from AIDS (or absolute immunity defense circumstance that the impeachment process against the petitioner has been aborted
syndrome)." and thereafter he lost the presidency, petitioner Estrada cannot demand as a
The Opposition in the then Batasan Pambansa sought the repeal of this Marcosian condition sine qua non to his criminal prosecution before the Ombudsman that he be
concept of executive immunity in the 1973 Constitution. The move was led by them convicted in the impeachment proceedings. His reliance on the case of Lecaroz vs.
Member of Parliament, now Secretary of Finance, Alberto Romulo, who argued that Sandiganbayan112 and related cases113 are inapropos for they have a different factual
the after incumbency immunity granted to President Marcos violated the principle milieu.
that a public office is a public trust. He denounced the immunity as a return to the We now come to the scope of immunity that can be claimed by petitioner as a non-
anachronism "the king can do no wrong." 107 The effort failed. sitting President. The cases filed against petitioner Estrada are criminal in character.
The 1973 Constitution ceased to exist when President Marcos was ousted from office They involve plunder, bribery and graft and corruption. By no stretch of the
by the People Power revolution in 1986. When the 1987 Constitution was crafted, its imagination can these crimes, especially plunder which carries the death penalty, be
framers did not reenact the executive immunity provision of the 1973 Constitution. covered by the alleged mantle of immunity of a non-sitting president. Petitioner
The following explanation was given by delegate J. Bernas vis:108 cannot cite any decision of this Court licensing the President to commit criminal acts
"Mr. Suarez. Thank you. and wrapping him with post-tenure immunity from liability. It will be anomalous to
The last question is with reference to the Committee's omitting in the draft proposal hold that immunity is an inoculation from liability for unlawful acts and conditions.
the immunity provision for the President. I agree with Commissioner Nolledo that the The rule is that unlawful acts of public officials are not acts of the State and the
Committee did very well in striking out second sentence, at the very least, of the officer who acts illegally is not acting as such but stands in the same footing as any
original provision on immunity from suit under the 1973 Constitution. But would the trespasser.114
Committee members not agree to a restoration of at least the first sentence that the Indeed, critical reading of current literature on executive immunity will reveal a
President shall be immune from suit during his tenure, considering that if we do not judicial disinclination to expand the privilege especially when it impedes the search
for truth or impairs the vindication of a right. In the 1974 case of US v. Nixon, 115 US Teehankee, Jr.,128 later reiterated in the case of Larranaga vs. court of Appeals, et
President Richard Nixon, a sitting President, was subpoenaed to produce certain al.,129 we laid down the doctrine that:
recordings and documents relating to his conversations with aids and advisers. "We cannot sustain appellant's claim that he was denied the right to impartial trial
Seven advisers of President Nixon's associates were facing charges of conspiracy to due to prejudicial publicity. It is true that the print and broadcast media gave the
obstruct Justice and other offenses, which were committed in a burglary of the case at bar pervasive publicity, just like all high profile and high stake criminal trials.
Democratic National Headquarters in Washington's Watergate Hotel during the 972 Then and now, we rule that the right of an accused to a fair trial is not incompatible
presidential campaign. President Nixon himself was named an unindicted co- to a free press. To be sure, responsible reporting enhances accused's right to a fair
conspirator. President Nixon moved to quash the subpoena on the ground, among trial for, as well pointed out, a responsible press has always been regarded as the
others, that the President was not subject to judicial process and that he should first criminal field xxx. The press does not simply publish information about trials but
be impeached and removed from office before he could be made amenable to guards against the miscarriage of justice by subjecting the police, prosecutors, and
judicial proceedings. The claim was rejected by the US Supreme Court. It concluded judicial processes to extensive public scrutiny and criticism.
that "when the ground for asserting privilege as to subpoenaed materials sought for Pervasive publicity is not per se prejudicial to the right of an accused to fair trial. The
use in a criminal trial is based only on the generalized interest in confidentiality, it mere fact that the trial of appellant was given a day-to-day, gavel-to-gavel coverage
cannot prevail over the fundamental demands of due process of law in the fair does not by itself prove that the publicity so permeated the mind of the trial judge
administration of criminal justice." In the 1982 case of Nixon v. Fitzgerald, 116 the US and impaired his impartiality. For one, it is impossible to seal the minds of members
Supreme Court further held that the immunity of the president from civil damages of the bench from pre-trial and other off-court publicity of sensational criminal cases.
covers only "official acts." Recently, the US Supreme Court had the occasion to The state of the art of our communication system brings news as they happen
reiterate this doctrine in the case of Clinton v. Jones 117 where it held that the US straight to our breakfast tables and right to our bedrooms. These news form part of
President's immunity from suits for money damages arising out of their official acts our everyday menu of the facts and fictions of life. For another, our idea of a fair and
is inapplicable to unofficial conduct. impartial judge is not that of a hermit who is out of touch with the world. We have
There are more reasons not to be sympathetic to appeals to stretch the scope of not installed the jury system whose members are overly protected from publicity
executive immunity in our jurisdiction. One of the great themes of the 1987 lest they lose there impartially. xxx xxx xxx. Our judges are learned in the law and
Constitution is that a public office is a public trust.118 It declared as a state policy trained to disregard off-court evidence and on-camera performances of parties to
that "the State shall maintain honesty and integrity in the public service and take litigation. Their mere exposure to publications and publicity stunts does not per se
positive and effective measures against graft and corruptio." 119 it ordained that fatally infect their impartiality.
"public officers and employees must at all times be accountable to the people, serve At best, appellant can only conjure possibility of prejudice on the part of the trial
them with utmost responsibility, integrity, loyalty, and efficiency act with patriotism judge due to the barrage of publicity that characterized the investigation and trial of
and justice, and lead modest lives."120 It set the rule that 'the right of the State to the case. In Martelino, et al. v. Alejandro, et al., we rejected this standard of
recover properties unlawfully acquired by public officials or employees, from them or possibility of prejudice and adopted the test of actual prejudice as we ruled that to
from their nominees or transferees, shall not be barred by prescription, latches or warrant a finding of prejudicial publicity, there must be allegation and proof that the
estoppel."121 It maintained the Sandiganbayan as an anti-graft court.122 It created the judges have been unduly influenced, not simply that they might be, by the barrage
office of the Ombudsman and endowed it with enormous powers, among which is to of publicity. In the case at a bar, the records do not show that the trial judge
"investigate on its own, or on complaint by any person, any act or omission of any developed actual bias against appellants as a consequence of the extensive media
public official, employee, office or agency, when such act or omission appears to be coverage of the pre-trial and trial of his case. The totality of circumstances of the
illegal, unjust improper or inefficient." 123 The Office of the Ombudsman was also case does not prove that the trial judge acquired a fixed opinion as a result of
given fiscal autonomy.124 These constitutional policies will be devalued if we sustain prejudicial publicity, which is incapable of change even by evidence presented
petitioner's claim that a non-sitting president enjoys immunity from suit for criminal during the trial. Appellant has the burden to prove this actual bias and he has not
acts committed during his incumbency. discharged the burden.'
V We expounded further on this doctrine in the subsequent case of Webb vs. Hon. Raul
Whether or not the prosecution of petitioner de Leon, etc.130 and its companion cases, viz:
Estrada should be enjoined due to prejudicial publicity "Again petitioners raise the effect of prejudicial publicity on their right to due
Petitioner also contends that the respondent Ombudsman should be stopped from process while undergoing preliminary investigation. We find no procedural
conducting the investigation of the cases filed against him due to the barrage of impediment to its early invocation considering the substantial risk to their liberty
prejudicial publicity on his guilt. He submits that the respondent Ombudsman has while undergoing a preliminary investigation.
developed bias and is all set file the criminal cases violation of his right to due xxx
process. The democratic settings, media coverage of trials of sensational cases cannot be
There are two (2) principal legal and philosophical schools of thought on how to deal avoided and oftentimes, its excessiveness has been aggravated by kinetic
with the rain of unrestrained publicity during the investigation and trial of high developments in the telecommunications industry. For sure, few cases can match
profile cases.125 The British approach the problem with the presumption that the high volume and high velocity of publicity that attended the preliminary
publicity will prejudice a jury. Thus, English courts readily stay and stop criminal investigation of the case at bar. Our daily diet of facts and fiction about the case
trials when the right of an accused to fair trial suffers a threat. 126 The American continues unabated even today. Commentators still bombard the public with views
approach is different. US courts assume a skeptical approach about the potential not too many of which are sober and sublime. Indeed, even the principal actors in
effect of pervasive publicity on the right of an accused to a fair trial. They have the case the NBI, the respondents, their lawyers and their sympathizers have
developed different strains of tests to resolve this issue, i.e., substantial; probability participated in this media blitz. The possibility of media abuses and their threat to a
of irreparable harm, strong likelihood, clear and present danger, etc. fair trial notwithstanding, criminal trials cannot be completely closed to the press
This is not the first time the issue of trial by publicity has been raised in this Court to and public. In the seminal case of Richmond Newspapers, Inc. v. Virginia, it was
stop the trials or annul convictions in high profile criminal cases.127 In People vs. xxx
a. The historical evidence of the evolution of the criminal trial in Anglo- Resolution carries no indubitable indicia of bias for it does not appear that they
American justice demonstrates conclusively that at the time this Nation's considered any extra-record evidence except evidence properly adduced by the
organic laws were adopted, criminal trials both here and in England had parties. The length of time the investigation was conducted despite its summary
long been presumptively open, thus giving assurance that the proceedings nature and the generosity with which they accommodated the discovery motions of
were conducted fairly to all concerned and discouraging perjury, the petitioners speak well of their fairness. At no instance, we note, did petitioners seek
misconduct of participants, or decisions based on secret bias or partiality. In the disqualification of any member of the DOJ Panel on the ground of bias resulting
addition, the significant community therapeutic value of public trials was from their bombardment of prejudicial publicity." (emphasis supplied)
recognized when a shocking crime occurs a community reaction of outrage Applying the above ruling, we hold that there is not enough evidence to
and public protest often follows, and thereafter the open processes of warrant this Court to enjoin the preliminary investigation of the petitioner
justice serve an important prophylactic purpose, providing an outlet for by the respondent Ombudsman. Petitioner needs to offer more than hostile
community concern, hostility and emotion. To work effectively, it is headlines to discharge his burden of proof.131 He needs to show more weighty social
important that society's criminal process satisfy the appearance of justice,' science evidence to successfully prove the impaired capacity of a judge to render a
Offutt v. United States, 348 US 11, 14, 99 L ED 11, 75 S Ct 11, which can bias-free decision. Well to note, the cases against the petitioner are still
best be provided by allowing people to observe such process. From this undergoing preliminary investigation by a special panel of prosecutors in the office
unbroken, uncontradicted history, supported by reasons as valid today as in of the respondent Ombudsman. No allegation whatsoever has been made by the
centuries past, it must be concluded that a presumption of openness petitioner that the minds of the members of this special panel have already been
inheres in the very nature of a criminal trial under this Nation's system of infected by bias because of the pervasive prejudicial publicity against him. Indeed,
justice, Cf., e,g., Levine v. United States, 362 US 610, 4 L Ed 2d 989, 80 S Ct the special panel has yet to come out with its findings and the Court cannot second
1038. guess whether its recommendation will be unfavorable to the petitioner.
b. The freedoms of speech. Press and assembly, expressly guaranteed by the The records show that petitioner has instead charged respondent Ombudsman
First Amendment, share a common core purpose of assuring freedom of himself with bias. To quote petitioner's submission, the respondent Ombudsman
communication on matters relating to the functioning of government. In "has been influenced by the barrage of slanted news reports, and he has buckled to
guaranteeing freedom such as those of speech and press, the First the threats and pressures directed at him by the mobs." 132 News reports have also
Amendment can be read as protecting the right of everyone to attend trials been quoted to establish that the respondent Ombudsman has already prejudged
so as give meaning to those explicit guarantees; the First Amendment right the cases of the petitioner133 and it is postulated that the prosecutors investigating
to receive information and ideas means, in the context of trials, that the the petitioner will be influenced by this bias of their superior.
guarantees of speech and press, standing alone, prohibit government from Again, we hold that the evidence proffered by the petitioner is insubstantial. The
summarily closing courtroom doors which had long been open to the public accuracy of the news reports referred to by the petitioner cannot be the subject of
at the time the First Amendment was adopted. Moreover, the right of judicial notice by this Court especially in light of the denials of the respondent
assembly is also relevant, having been regarded not only as an Ombudsman as to his alleged prejudice and the presumption of good faith and
independent right but also as a catalyst to augment the free exercise of the regularity in the performance of official duty to which he is entitled. Nor can we
other First Amendment rights with which the draftsmen deliberately linked adopt the theory of derivative prejudice of petitioner, i.e., that the
it. A trial courtroom is a public place where the people generally and prejudice of respondent Ombudsman flows to his subordinates. In truth, our
representatives of the media have a right to be present, and where their Revised Rules of Criminal Procedure, give investigation prosecutors the
presence historically has been thought to enhance the integrity and quality independence to make their own findings and recommendations albeit they are
of what takes place. reviewable by their superiors.134 They can be reversed but they can not be compelled
c. Even though the Constitution contains no provision which be its terms cases which they believe deserve dismissal. In other words, investigating
guarantees to the public the right to attend criminal trials, various prosecutors should not be treated like unthinking slot machines. Moreover, if the
fundamental rights, not expressly guaranteed, have been recognized as respondent Ombudsman resolves to file the cases against the petitioner and the
indispensable to the enjoyment of enumerated rights. The right to attend latter believes that the findings of probable cause against him is the result of bias,
criminal trial is implicit in the guarantees of the First Amendment: without he still has the remedy of assailing it before the proper court.
the freedom to attend such trials, which people have exercised for VI.
centuries, important aspects of freedom of speech and of the press be Epilogue
eviscerated. A word of caution to the "hooting throng." The cases against the petitioner will now
Be that as it may, we recognize that pervasive and prejudicial publicity under certain acquire a different dimension and then move to a new stage - - - the Office of the
circumstances can deprive an accused of his due process right to fair trial. Thus, Ombudsman. Predictably, the call from the majority for instant justice will hit a
in Martelino, et al. vs. Alejandro, et al., we held that to warrant a finding of higher decibel while the gnashing of teeth of the minority will be more threatening.
prejudicial publicity there must be allegation and proof that the judges have been It is the sacred duty of the respondent Ombudsman to balance the right of the State
unduly influenced, not simply that they might be, by the barrage of publicity. In the to prosecute the guilty and the right of an accused to a fair investigation and trial
case at bar, we find nothing in the records that will prove that the tone and content which has been categorized as the "most fundamental of all freedoms." 135To be sure,
of the publicity that attended the investigation of petitioners fatally infected the the duty of a prosecutor is more to do justice and less to prosecute. His is the
fairness and impartiality of the DOJ Panel. Petitioners cannot just rely on the obligation to insure that the preliminary investigation of the petitioner shall have a
subliminal effects of publicity on the sense of fairness of the DOJ Panel, for these are circus-free atmosphere. He has to provide the restraint against what Lord Bryce calls
basically unbeknown and beyond knowing. To be sure, the DOJ Panel is composed of "the impatient vehemence of the majority." Rights in a democracy are not decided
an Assistant Chief State Prosecutor and Senior State Prosecutors. Their long by the mob whose judgment is dictated by rage and not by reason. Nor are rights
experience in criminal investigation is a factor to consider in determining whether necessarily resolved by the power of number for in a democracy, the dogmatism of
they can easily be blinded by the klieg lights of publicity. Indeed, their 26-page the majority is not and should never be the definition of the rule of law. If democracy
has proved to be the best form of government, it is because it has respected the The Republic filed the petition for certiorari.
right of the minority to convince the majority that it is wrong. Tolerance of ISSUE:
multiformity of thoughts, however offensive they may be, is the key to man's Prepared by: Danna Bongon
progress from the cave to civilization. Let us not throw away that key just to pander DLSU CoL GO2
to some people's prejudice. W/N petitioner Republic was able to prove its case for forfeiture in accordance with
IN VIEW WHEREOF, the petitions of Joseph Ejercito Estrada challenging the the requisites of Sections 26
respondent Gloria Macapagal-Arroyo as the de jure 14th President of the Republic and 37
are DISMISSED. of RA 1379.
SO ORDERED. HELD:
RA 1379 raises the prima facie presumption that a property is unlawfully
acquired, hence subject to forfeiture, if its amount or value is manifestly
Republic v. Sandiganbayan disproportionate to the official salary and other lawful income of the public
GR. No. 152154 July 15, 2003 officer who owns it.
EN BANC o The following facts must be established in order that forfeiture or
Corona, J. seizure of the Swiss deposits may be effected:
The PresidentPrivileges and Salary (1) ownership by the public officer of money or
Facts: property acquired during his incumbency, whether it be in his
Republic (petitioner), through the Presidential Commission on Good name or otherwise, and
Government (PCGG), represented by the Office of the Solicitor General (OSG), (2) the extent to which the amount of that money or property
filed a petition for forfeiture before the Sandiganbayan pursuant to RA 13791 exceeds, i. e., is grossly disproportionate to, the legitimate
. income of the public officer.
o declaration of the aggregate amount of US$ 356M deposited in escrow (3) that the said amount is manifestly out of proportion to his
in the PNB, as ill-gotten wealth. salary as such public officer or employee and to his other lawful
The funds were previously held by 5 account groups, using income and the income from legitimately acquired property.
various foreign foundations in certain Swiss banks. The Republic was able to establish a prima facie case for the forfeiture of the
In addition, the Republic sought the forfeiture of US$25 million Swiss funds pursuant to RA 1379.
and US$5 million in treasury notes which exceeded the Marcos o Ferdinand and Imelda Marcos were public officers.
couple's salaries2 3 4 5 o Ferdinand and Imelda Marcos had acquired and owned properties
, other lawful income as well as income during their term of office, as evidenced by their admittance regarding
from legitimately acquired property. The treasury notes are the ownership of the Swiss accounts.
frozen at the Central Bank of the Philippines, now Bangko o The Swiss accounts of the Marcoses had balances amounting to US
Sentral ng Pilipinas, by virtue of the freeze order issued by the $356 million, a figure beyond the aggregate legitimate income of
PCGG. $304,372.43.
Before the case was set for pre-trial, a General Agreement and the The Petition was granted.
Supplemental Agreement dated December 28, 1993 were executed by the The Swiss deposits which were transferred to and are now deposited in
Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global escrow at the Philippine National Bank in the estimated aggregate amount of
settlement of the assets of the Marcos family. US$658,175,373.60 as of January 31, 2002, plus interest, are hereby forfeited
o The General Agreement/Supplemental Agreements sought to identify, in favor of petitioner Republic of the Philippines.
collate, cause the inventory of and distribute all assets presumed to be RATIO DECIDENDI: (1973 CONST)
owned by the Marcos family under the conditions contained therein. Article VII, Sec. 4(2) The President and the Vice-President shall not, during
The General Agreement specified in one of its premises or "whereas their tenure, hold any other office except when otherwise provided in this
clauses" the fact that petitioner "obtained a judgment from the Swiss Constitution, nor may they practice any profession, participate directly or
Federal Tribunal on December 21, 1990, that the Three Hundred Fiftysix indirectly in the management of any business, or be financially interested
Million U.S. dollars (US$356 million) belongs in principle to the directly or indirectly in any contract with, or in any franchise or special
Republic of the Philippines provided certain conditionalities are met x x privilege granted by the Government or any other subdivision, agency, or
x." instrumentality thereof, including any government owned or controlled
Hearings were conducted by the Sandiganbayan on the motion to approve corporation.
the General/Supplemental Agreements. Article VII, Sec. 11 No Member of the National Assembly shall appear as
In a resolution dated 31 January 2002, the Sandiganbayan denied the counsel before any court inferior to a court with appellate jurisdiction, x x
Republic's motion for summary judgment. x. Neither shall he, directly or indirectly, be interested financially in any
o "The evidence offered for summary judgment of the case did not prove Prepared by: Danna Bongon
that the money in the Swiss Banks belonged to the Marcos spouses DLSU CoL GO2
because no legal proof exists in the record as to the ownership by the contract with, or in any franchise or special privilege granted by the
Marcoses of the funds in escrow from the Swiss Banks. The basis for Government, or any subdivision, agency, or instrumentality thereof including
the forfeiture in favor of the government cannot be deemed to have any government owned or controlled corporation during his term of
been established and our judgment thereon, perforce, must also have office. He shall not intervene in any matter before any office of the
been without basis." government for his pecuniary benefit.
Article IX, Sec. 7 The Prime Minister and Members of the Cabinet shall be "I just want to clear my name, then I will go.
subject to the provision of Section 11, Article VIII hereof and may not appear The SC held that this is high grade evidence that the petitioner has resigned. The
as counsel before any court or administrative body, or manage any business, intent to resign is clear when he said x x x Ayoko na masyado nang masakit.
or practice any profession, and shall also be subject to such other Ayoko na are words of resignation.
disqualification as may be provided by law. 3. During the negotiations, the resignation of the petitioner was treated as a
given fact. The only unsettled points at that time were the measures to be
Estrada v. Arroyo undertaken by the parties during and after transition period.
4. His resignation was also confirmed by his leaving Malacaang. In the press
Estrada V. Arroyo release containing his final statement, (1) he acknowledged the oath-taking
G.R. No. 146738 of the respondent as President of the Republic albeit with the reservation
about its legality; (2) he emphasized he was leaving the Palace, the seat of
FACTS: Petitioner sought to enjoin the respondent Ombudsman from conducting any the presidency, for the sake of peace and in order to begin the healing
further proceedings in any criminal complaint that may be filed in his office, until process of our nation. He did not say he was leaving the Palace due to any
after the term of petitioner as President is over and only if legally warranted. Erap kind of inability and he was going to re-assume the presidency as soon as
also filed a Quo Warranto case, praying for the disability disappears; (3) he expressed his gratitude to the people for
judgment confirming petitioner to be the lawful and incumbent President of the the opportunity to serve them. Without doubt, he was referring to the past
Republic of the Philippines temporarily unable to discharge the duties of his office, opportunity given him to serve the people as President; (4) he assured that
and declaring respondent to have taken her oath as and to be holding the Office of he will not shirk from any future challenge that may come ahead in the
the President, only in an acting capacity pursuant to the provisions of the same service of our country. Petitioners reference is to a future challenge
Constitution. after occupying the office of the president which he has given up; and (5)
he called on his supporters to join him in the promotion of a constructive
HELD: national spirit of reconciliation and solidarity. Certainly, the national spirit of
FIRST: The cases at bar pose legal and not political questions. reconciliation and solidarity could not be attained if he did not give up the
presidency. The press release was petitioners valedictory, his final act of
The principal issues for resolution require the proper interpretation of certain farewell. His presidency is now in the past tense.
provisions in the 1987 Constitution, notably section 1 of Article II, and section 8 of
Article VII, and the allocation of governmental powers under section II of Article VII. THIRD: The petitioner is permanently unable to act as President.
The issues likewise call for a ruling on the scope of presidential immunity from suit.
They also involve the correct calibration of the right of petitioner against prejudicial Section 11 of Article VII provides that Congress has the ultimate authority under the
publicity. As early as the 1803 case of Marbury v. Madison, the doctrine has been Constitution to determine whether the President is incapable of performing his
laid down that it is emphatically the province and duty of the judicial department to functions. Both houses of Congress have recognized respondent Arroyo as the
say what the law is . . . President.

The Court also distinguished between EDSA People Power I and EDSA People Power The House of Representative passed on January 24, 2001 House Resolution No. l75
II. EDSA I involves the exercise of the people power of revolution which overthrew which states: RESOLUTION EXPRESSING THE SUPPORT OF THE HOUSE OF
the whole government. EDSA II is an exercise of people power of freedom of speech REPRESENTATIVES TO THE ASSUMPTION INTO OFFICE BY VICE PRESIDENT GLORIA
and freedom of assembly to petition the government for redress of grievances which MACAPAGAL-ARROYO AS PRESIDENT OFTHE REPUBLIC OF THE PHILIPPINES,
only affected the office of the President. EDSA I is extra constitutional and the EXTENDING ITS CONGRATULATIONS AND EXPRESSING ITS SUPPORT FOR HER
legitimacy of the new government that resulted from it cannot be the subject of ADMINISTRATION AS A PARTNER IN THE ATTAINMENT OF THE NATIONS GOALS
judicial review, but EDSA II is intra constitutional and the resignation of the sitting UNDER THE CONSTITUTION. The Senate also passed Senate Resolution No. 82
President that it caused and the succession of the Vice President as President are which states: RESOLUTION CONFIRMING PRESIDENT GLORIA MACAPAGAL-ARROYOS
subject to judicial review. EDSA I presented political question; EDSA II involves legal NOMINATION OF SEN. TEOFISTO T. GUINGONA, JR. AS VICE PRESIDENT OF THE
questions. REPUBLIC OF THE PHILIPPINES

SECOND: Using the totality test, the SC held that petitioner resigned as President. Implicitly clear in that recognition is the premise that the inability of petitioner
Estrada is no longer temporary. Congress has clearly rejected petitioners claim of
1. The proposal for a snap election for president in May where he would not be inability. Even if petitioner can prove that he did not resign, still, he cannot
a candidate is an indicium that petitioner had intended to give up the successfully claim that he is a President on leave on the ground that he is merely
presidency even at that time. unable to govern temporarily. That claim has been laid to rest by Congress and the
2. The Angara diary shows that the President wanted only five-day period decision that respondent Arroyo is the de jure President made by a co-equal branch
promised by Reyes, as well as to open the second envelop to clear his of government cannot be reviewed by the Supreme Court.
name.
"If the envelope is opened, on Monday, he says, he will leave by Monday. FOURTH: The petitioner does not enjoy immunity from suit.
"The President says. Pagod na pagod na ako. Ayoko na masyado nang masakit.
Pagod na ako sa red tape, bureaucracy, intriga. (I am very tired. I dont want any The Supreme Court rejected petitioners argument that he cannot be prosecuted for
more of this its too painful. Im tired of the red tape, the bureaucracy, the the reason that he must first be convicted in the impeachment proceedings. The
intrigue.) impeachment trial of petitioner Estrada was aborted by the walkout of the
prosecutors and by the events that led to his loss of the presidency. On February 7, that unlawful acts of public officials are not acts of the State and the officer who acts
2001, the Senate passed Senate Resolution No. 83 Recognizing that the illegally is not acting as such but stands in the same footing as any other trespasser.
Impeachment Court is Functus Officio. Since the Impeachment Court is now functus
officio, it is untenable for petitioner to demand that he should first be impeached FIFTH: Petitioner was not denied the right to impartial trial.
and then convicted before he can be prosecuted. The plea, if granted, would put a
perpetual bar against his prosecution. The debates in the Constitutional Commission Pervasive publicity is not per se prejudicial to the right of an accused to fair trial. The
make it clear that when impeachment proceedings have become moot due to the mere fact that the trial of appellant was given a day-to-day, gavel-to-gavel coverage
resignation of the President, the proper criminal and civil cases may already be filed does not by itself prove that the publicity so permeated the mind of the trial judge
against him. and impaired his impartiality. In the case at bar, the records do not show that the
trial judge developed actual bias against appellant as a consequence of the
The SC also ruled in In re: Saturnino Bermudez that incumbent Presidents are extensive media coverage of the pre-trial and trial of his case. The totality of
immune from suit or from being brought to court during the period of their circumstances of the case does not prove that the trial judge acquired a fixed
incumbency and tenure but not beyond. Considering the peculiar circumstance that opinion as a result of prejudicial publicity which is incapable if change even by
the impeachment process against the petitioner has been aborted and thereafter he evidence presented during the trial. Appellant has the burden to prove this actual
lost the presidency, petitioner cannot demand as a condition sine qua non to his bias and he has not discharged the burden.
criminal prosecution before the Ombudsman that he be convicted in the
impeachment proceedings.

Also, petitioner cannot cite any decision of the SC licensing the President to commit
criminal acts and wrapping him with post-tenure immunity from liability. The rule is

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