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G.R. No.

31012 September 10, 1932

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,


vs.
ESTELA ROMUALDEZ and LUIS MABUNAY, defendants-appellants.

Courtney Whitney, Vicente Nepomuceno and Julio Llorente for appellant Romualdez.
Vicente J. Francisco and Claro M. Recto for appellant Mabunay.
Attorney-General Jaranilla for appellee.

VICKERS, J.:

This is an appeal from the following decision of the Honorable E. P. Revilla, Judge of the Court of
First Instance of Manila:

Estela Romualdez and Luis Mabunay are charged with the crime of falsification of public
and official documents, committed, according to the information, as follows:

That in or about the month of February, 1927, in the City of Manila, Philippine
Islands, the accused Estela Romualdez, who, by appointment of the Supreme
Court of the Philippine Islands, was then taking part in the discharge of public
functions as secretary to the Honorable Norberto Romualdez, one of the Justices
of the Supreme Court, and by reason of said duty had under her care the
compositions and other papers and documents having reference to the
examinations for the admission of candidates to the bar held in the months of
August and September, 1926, which were then kept in the archives of the said
court, confabulating with her coaccused, Luis Mabunay, and acting in common
accord with him, who was then one of the candidates who took the said Bar
Examinations, willfully, illegally, and criminally extracted from the said archives of
the Supreme Court certain public and official documents, to wit: the compositions,
which were written, prepared and submitted by the accused, Luis Mabunay in that
examination. Once in possession of the same, the said accused Estela Romualdez
and Luis Mabunay, conspiring together and acting in common accord, willfully,
illegally, and criminally erased the grade of fifty-eight (58%) given by the
correctors Alfonso Felix and M. Guevara to the composition in Remedial Law, which
was written and prepared by the accused Luis Mabunay, and in its place wrote
sixty-four (64%); and also erased the grade of sixty-three (63%) given by
correctors Jeronimo Samson and Amado del Rosario to the composition in Civil
Law written and prepared by the said Luis Mabunay, and in its place wrote seventy-
three (73%), and by means of these alterations the said accused Estela Romualdez
and Luis Mabunay were able to change the relative merits of those compositions,
thereby attributing to the said correctors, statements and declarations contrary to
what they really made, and the accused Estela Romualdez and Luis Mabunay thus
succeeded by means of falsifications made by them in the aforesaid public and
official documents in making it appear that Luis Mabunay obtained the general
average required by the rules of the Supreme Court, and in securing the latter's
admission to the practice of law, as in fact he was admitted, to the great prejudice
of the public.
Upon arraignment the accused pleaded not guilty.

Both the prosecution and the defense produced an abundance of evidence, oral and
documentary, the presentation of which consumed considerable of the court's time.

UNDISPUTED FACTS

There is no question whatsoever as to the following facts which are not disputed either
by the prosecution or by the defense:

The accused Estela Romualdez was appointed upon the recommendation of Justice
Norberto Romualdez of the Supreme Court of the Philippine Islands as his secretary on
November 1, 1921, and continued as such until September 15, 1928.

The accused Luis Mabunay was one of the candidates duly admitted to the bar
examinations held in 1926.

The clerk of the Supreme Court, Mr. Vicente Albert, who was appointed to that office on
July 11, 1912, acts every year as the secretary ex oficio of the examination committee for
admission to the bar.

The Supreme Court of the Philippine Islands designated Justice Norberto Romualdez as
chairman of the examination committee for admission to the bar in the year 1926, and
upon recommendation of Clerk Vicente Albert, he appointed the following as members of
the examination committee, with their respective subjects: Attorney Francisco Ortigas,
Civil Law; Judge Vicente Nepomuceno, Mercantile Law; Attorney Godofredo Reyes,
Criminal Law; Judge Jose Abreu, Remedial Law; Attorney C. A. DeWitt, International Law;
Attorney-General Delfin Jaranilla, Political Law; and Attorney Carlos Ledesma, Legal Ethics.

Upon recommendation also of clerk of court Mr. Vicente Albert, a committee of correctors
was appointed, composed of the following attorneys: Amado del Rosario, Assistant
Director of Civil Service, and Jeronimo Samson, deputy clerk of the Supreme Court, as
correctors in Civil Law; Rafael Amparo, Secretary of Justice Johnson, and Fulgencio Vega,
Secretary of Justice Malcolm, as correctors in Mercantile Law; Cecilio Apostol, Assistant
City Fiscal, and Remo, of the Bureau of Audits, as correctors in Penal Law; Marciano
Guevara, of the Bureau of Audits and Alfonso Felix, Assistant City Fiscal, as correctors in
Remedial law; Juan Lantin, of the Executive Bureau, and the accused Estela Romualdez,
as correctors in Political Law; Rufino Luna, of the Executive Bureau, and Zoilo Castrillo, of
the Bureau of Lands, as correctors in International Law; and Anatalio Mañalac, of the
Bureau of Lands, and Jeronimo Samson as correctors in Legal Ethics. On account of illness,
Mr. Remo was substituted by Jeronimo Samson as corrector in Penal Law. All said
correctors were designated by clerk of court Albert with the approval of the chairman of
the examination committee.

The work of the members of the examination committee was limited to the preparation
of the questions in their respective subjects and of a memorandum or note of the articles,
legal provisions and jurisprudence showing the sources from which the questions were
taken. The work of reviewing and grading the compositions was entrusted to the
correctors designated for each subject. Each corrector was furnished with this note or
memorandum, and a set of rules, patterned after those of the Civil Service, was prepared
by corrector Amado del Rosario to guide the correctors in grading the examination papers.

The correctors worked separately in reviewing and grading the papers on the subject
assigned to them, noting the grades given to each answer, not on the composition, but in
a separate note book, which were later checked with the grades given by the other
corrector in the same subject, for the purpose of determining the general average to be
given to the composition.

The report of the examination committee on the final result of the bar examination for the
year 1926 was submitted, under date of March 2, 1927, to the Supreme Court and was
published on the fifth of said month. In the list of successful candidates (Exhibit C-5) there
appeared the name of candidate Luis Mabunay with a general average of 75%. The grades
of Mabunay in each subject, according to the list Exhibit C-2, which was prepared after
the publication of the result of the examination, are: 73 in Civil Law, 77 in Mercantile Law,
69 in Penal Law, 76 in Political Law, 86 in International Law, 64 in Remedial Law, 80 in
Legal Ethics and Practical Exercises. However, a later revision of the composition of Luis
Mabunay showed that the grades of seventy-three (73 in Civil Law (Exhibit B-1), and sixty-
four (64) in Remedial Law (Exhibit B-2) had been written on the first page of said
compositions after striking out the grades of sixty-three (63) therefore given to the
composition in Civil Law, Exhibit B-1, and fifty-eight (58) theretofore given to the
composition in Remedial Law, Exhibit B-2. The investigation of this irregularity by the City
Fiscal of Manila led to the filing of the information in this case.

Admission of the accused Estela Romualdez

Before the prosecuting attorney had finished presenting his evidence tending to show the
identity of the person who altered the grades appearing on the first pages of the
compositions Exhibits-B-1 and B-2, the accused Estela Romualdez spontaneously and with
the conformity of her attorneys made of record an admission as follows (p. 395, s. n.):

"In Exhibit B-1 the words seventy-three and the figures 73% inclosed in
parenthesis are in my regular handwriting, and in Exhibit B-2 the words sixty-four
and the figures 64% inclosed in parenthesis appearing in said composition are also
in my regular handwriting."

Authority of the accused Estela Romualdez to alter or change the grades

In view of the admission made by the accused Estela Romualdez that she was the person
who wrote on the compositions Exhibits B-1 and B-2 the words and figures alleged to
have been falsified, it now appears that the burden of establishing the authority under
which said changes and alterations were made is on the accused. On this point the
evidence for the defense tended to show that the accused Estela Romualdez, both in her
capacity as private secretary of the chairman of the examination committee and as
corrector and at the same time supervisor of the correctors, was authorized by said
chairman to revise the compositions already reviewed by the other correctors and to
change the grades given by them.
Justice Romualdez, testifying as a witness for the defense, said that he considered the
accused Estela Romualdez and Deputy Clerk Samson as supervisors of the correctors; and
explaining the powers of the former he said (page 721, s. n.):

"As such supervisor I think there was on occasion when I gave her to understand
that in order to do justice to the compositions, she could review the compositions
already graded by the other correctors; provided, I want to add, that the new
revision was done in order to do justice to the compositions and before the names
of the candidates were known."

Referring to the alterations made by the accused Estela Romualdez to the grades given
by the corresponding correctors to compositions Exhibits B-1 and B-2, this same witness
testified that said alterations were made within the limits of the powers he had given to
said accused (pages 723, 726, s. n.).

For her part the accused Estela Romualdez, testifying as a witness in her own behalf, said
that the chairman of the examining committee, gave her to understand that she "was
authorized to correct any composition in any subject" in the bar examinations of the year
1926 and that she had never corrected any composition after the name of the
corresponding candidate was identified (pages 782, 783, s. n.). She denied having known
Luis Mabunay, and said that the first time she saw him was on the first day of the trial of
this case (page 783, s. n.).

Contention of the Prosecuting Attorney

The contention of the prosecuting attorney with respect to the accused Estela Romualdez
may be summarized in two following propositions: 1st — that Justice Romualdez, as
chairman of the examination committee, did not have authority to delegate to his
secretary, the accused Estela Romualdez, the power to revise compositions in subjects in
which she was not a corrector and which had already been graded by the other correctors,
and much less the power to alter or change the grades given to and written on said
compositions; 2nd — that granting that the chairman of the examination committee had
such authority, the accused Estela Romualdez did not exercise the same in the manner
prescribed by said chairman, namely, in order to do justice to the compositions and on
the condition that the revision and the changes of grades should be made before the
names of the candidates, to whom the compositions belonged, were known.

In support of the first proposition, the prosecuting attorneys maintains that Justice
Romualdez was appointed by the Supreme Court as chairman of the bar examination
committee of the year 1926, so that he would supervise the examinations in accordance
with law and the rules, and that precisely, in accordance with the rules the chairman can
not by himself exercise the individual powers of the committee, among which were the
powers to review, and to change or alter the grades given to the compositions.

As to the second proposition, the prosecuting attorney maintains that the evidence
adduced by the prosecution, specially the testimony of the Deputy Clerk Samson, shows
that the accused Estela Romualdez made the changes in the grades given by the
correctors to compositions Exhibits B-1 and B-2, in order to favor the accused Luis
Mabunay, to whom she knew said compositions belonged, thus violating the conditions
imposed upon her by the chairman of the examination committee when she was given
said authority.

As to the accused Luis Mabunay, the prosecuting attorney also maintains that the evidence
for the prosecution shows that he was in connivance with the accused Estela Romualdez
in the alteration by the latter of his grades in Civil Law and Remedial Law for the purpose
of raising to 75% the general average of 72.8 which he had obtained.

Theory of the Defense

In reply to the contention of the prosecuting attorney, the defense argues that the power
of supervision given by Justice Romualdez to his secretary, the accused Estela Romualdez,
is not contrary to law, rules or precedents. This assertion is based on the testimony of
said Justice that the appointment of a committee of attorneys in accordance with section
2 of the rules had not been followed by the Supreme Court for a number of years prior to
1926, and that when said court designated Justice Romualdez as chairman of the
examination committee without designating the examiners, it left that function to said
chairman, and conferred upon him ample powers to do what in his judgment was most in
line with justice and the law, and that no Court of First Instance has jurisdiction to
determine the propriety or illegality of the procedure employed by the chairman of the
examination committee, or of the powers conferred by him upon his secretary, inasmuch
as said chairman was responsible only to the Supreme Court for his acts.

The defense also claims that the accused Estela Romualdez could not have known to
whom compositions Exhibits B-1 and B-2 belonged at the time of making the alteration of
the grades appearing on the first pages thereof, because, according to the testimony of
said accused, corroborated by that of Catalina Pons, who was one of those who helped in
the preparation of the list of candidates Exhibit C-1, the envelopes containing the names
and the identification numbers of the candidates were opened just one day before the
publication of the result of the examination, and that in order to finish this work and to
place the names of the candidates on said list, they had to work continuously from 8
o'clock in the morning until 8 o'clock in the evening on the day prior to the publication of
the result of the examinations.

Considerations on the evidence and contentions of both parties

Upon an examination of the testimony of Justice Romualdez, as a witness for the defense,
the court finds that the accused Estela Romualdez, as secretary of the chairman of the
examination committee, and Jeronimo Samson, as deputy clerk of the Supreme Court
were considered by said chairman not only as correctors in the subjects assigned to them
but also as supervisors of the correctors (page 721, s. n.), both of them with equal powers
and authority so that neither could consider himself superior to the other (page 727, s.
n.). It appears, however, that while the chairman of the committee gave his secretary,
the accused Estela Romualdez, to understand that she "was authorized to revise the
compositions already graded by the other correctors provided the new revisions were
made for the purpose of doing justice to the compositions and that the same were mad
before the names of the candidates were known" (pages 721, 722, s. n.), he did not do
the same with respect to Deputy Clerk Jeronimo Samson, to whom he said nothing about
this matter (page 768, s. n.). It also appears that the accused Estela Romualdez had never
informed the chairman of the committee about the corrections or alterations made by her
in compositions Exhibits B-1 and B-2; neither did the latter examine said compositions to
determine whether or not their merits justified the changes so made, and he only knew
of said changes upon the filing of the information against his said secretary (page 728, s.
n.). For her part, she made no report to the chairman of the examination committee of
any error or injustice committed by any corrector, and she only told him during the
progress of the work of grading the papers that they were being graded very strictly and
that "she feared that some injustice might be committed" (page 729, s. n.), and for that
reason Justice Romualdez told his secretary, Estela Romualdez, that "should a case of the
kind come to her knowledge, she should take special notice of the same in order to do
justice," that is to say, if any person should bring to her attention any such case in which,
in her opinion, some injustice had been committed, she was authorized to put things in
order (page 781, s. n.), and the revision in such cases was left to the judgment of his
secretary (page 780, s. n.).

The powers conferred in the manner above stated, by Justice Romualdez as chairman of
the examination committee upon his secretary, Estela Romualdez, gave her so ample a
discretionary power of supervision that in its exercise she should act independently, not
only of the correctors and of her cosupervisor Jeronimo Samson, but also of the
examination committee. Now, granting that Justice Romualdez, as a chairman of the
committee appointed by the Supreme Court to conduct the bar examinations of 1926, was
authorized to confer such power of supervision upon his secretary Estela Romualdez, in
what manner did she exercise that power when she made the changes in the compositions
in question?

The accused Estela Romualdez who, according to her own admission, made the alterations
of the grades originally given by the correctors to compositions of Exhibits B-1 and B-2, is
the only person who could give an account of and explain the circumstances under which
said alterations were made. But said accused, testifying as a witness in her own behalf,
was not able to explain how and under what circumstances she made those alterations.
When pressed by the fiscal during the cross-examination to state the circumstances under
which she came across those compositions Exhibits B-1 and B-2 the accused Estela
Romualdez said: "If I were to make any statement with reference to the circumstances
under which I came across these compositions, you would compel me to tell a lie, because
I do not really remember" (page 823, s. n.). Neither does the accused remember why she
did not put her initials under or at the side of those alterations she made on compositions
Exhibits B-1 and B-2, limiting herself to say, when she saw the other compositions
(Exhibits 3-1, X, X-1 and X-2) bearing her initials which were exhibited to her by the fiscal,
that she placed her initials on said compositions because she graded them as corrector,
and she did not put her initials on compositions Exhibits B-1 and B-2 because she revised
them in her capacity as supervisor (pages 824- 832, s. n.). She also said, that, as corrector,
she had instructions to put her initials when writing the original grade on any composition,
but as supervisor "she was under no obligation" to put her initials (page 830, s. n.) and
that the chairman of the examination committee "has not gone into such minor details"
(page 831, s. n.). Upon being questioned by the fiscal as to why she wrote the altered
grade on composition Exhibit B-2 on the same line and immediately before the initials of
the correctors she said: "Because on that occasion it pleased me to do so" (page 836, s.
n.). Neither does the accused remember whether or not she exercised her supervisory
authority with respect to the other five compositions forming part of those marked as
Exhibits B-1 and B-2 (page 840, s. n.); and when asked by the fiscal for an explanation
as to why the increase given by her to the grades originally given to said compositions
had the effect of raising the general average of the compositions of the same candidate
to 75%, the accused answered that "the fiscal ought to know that in this life there are
happy coincidences" (page 848, s. n.). With these answers and others appearing in her
testimony, the accused instead of giving a satisfactory explanation of her conduct, has
demonstrated that with the encouragement given by Justice Romualdez to the effect that
the new revision of the compositions was left to her discretion (page 780, s. n.) she
assumed that the powers exercised by her in the bar examinations of 1926 were such that
she could revise any composition in any subject already graded and increase or decrease
the grades given by the correctors; in other words, that she could, at her pleasure, do or
undo the work done by the correctors without the necessity of accounting to anybody for
it (page 834, s. n.), or of keeping a note or memorandum of the compositions so revised
and the alteration of the grades.

The evidence, however, shows that Justice Romualdez himself in reviewing, in his capacity
as chairman of the examination committee, the compositions of the candidates who filed
motions for reconsideration of the grades given them, after the publication of the result
of the examinations, performed his work with such diligence and zeal that he noted in a
memorandum book (Exhibit F) not only the grades given to each answer of the candidate,
but also the total grade obtained by the candidate in the revision, together with such other
data which would explain the increase of the grades of this or that candidate.

The court is loath to believe that Justice Romualdez had given his secretary to understand
that she had such unlimited powers, or that the Supreme Court in designating said Justice
as chairman of the bar examination committee of the year 1926, authorizing him to confer
such powers upon his secretary, because it is an undisputed fact that his designation was
made so that he should conduct the examinations in accordance with law and the rules.

But, even granting that when the accused Estela Romualdez altered the grades given by
the correctors to compositions Exhibits B-1 and B-2 she acted in the exercise of the powers
conferred upon her by the chairman of the examination committee, is there any ground
in support of her claim that she made those alterations only to do justice to the
compositions, and without knowing the name of the candidate to whom they belonged?

Without giving any weight to the testimony of the witness for the prosecution, Juan
Villaflor, which, according to the defense is not worthy of credit because of the
contradictions and inconsistencies therein noted, the record contains other evidence
establishing certain facts from which such knowledge can be inferred.

It has been proved that after the revision and grading of all the compositions numbering
over 8,000, a list, Exhibit C-1, was prepared in pencil. This list was prepared with the
intervention of the said Jeronimo Samson and Josephine Stevens, assisted by Catalina
Pons, Juan Villaflor and the accused Estela Romualdez. However, before the preparation
of this list, sometime during the first day of February, 1927, the sealed envelopes
containing the identification numbers attached to each composition were opened. Said
numbers were written either on the upper part of each envelope or on the first page of
the composition, and that work lasted several days (pages 162, 163, s. n.). In the list
Exhibit C-1 the numbers of the candidates contained in the envelopes attached to the
compositions were first written (page 166, s. n.), and then the grades in each subject,
followed by the general average (pages 71, 184, s. n.), leaving in the blank the space
intended for the names (page 166, s. n.). Deputy Clerk Samson wrote on an adding
machine the grades in each composition as they were read out by one of the helpers, and
then the corresponding general average as computed by him (page 71, s. n.), and, at the
same time, Josephine Stevens wrote said grades in the space corresponding to each
subject (page 188, s. n.). The roll of paper used by Deputy Clerk Samson on the adding
machine was presented as Exhibit C-6.

After the list Exhibit C-1 containing the grades in each subject and the general average of
each candidate, who was theretofore known by his identification number only, was
prepared, the envelopes containing the names corresponding to the identification
numbers written on said list were taken from the safe of the office of the clerk, and the
names of the candidates were inserted in said list by those who assisted in the preparation
thereof (pages 166, 167, s. n.) among whom was the accused Estela Romualdez, who
admitted, upon cross-examination, having written many of the names appearing on
several pages of said list (pages 859-861, s. n.). After said list Exhibit C-1 was prepared
the examination committee submitted to the Supreme Court a report recommending the
admission to the bar and not only for those candidates with a general average of 75% or
more, but also of those who had obtained a general average of 70 or more but below
75%, and said automatic increase was ordered noted on said list Exhibit C-1. However,
this recommendation was not approved by the Supreme Court on the ground that said
automatic increase was arbitrary (pages 73, 74, s. n.), and for that reason the clerk of
court, Mr. Albert, instructed his deputy, Mr. Samson, to prepare another list containing
only the names of the candidates who had originally obtained a general average of 75%
without having obtained less than 60% in any subject, and in pursuance thereof the
typewritten list Exhibit C-5 was prepared (page 77, s. n.), which was approved by the
Supreme Court and published on March 5, 1927. In this list Luis Mabunay is included with
an average of 75%.

Eight or ten days after the publication of the result of the examinations the list Exhibit C-
2 was prepared in the same form as Exhibit C-1 taking the grades directly from the
compositions; while one of the helpers read them, Deputy Clerk Samson listed them on
the adding machine and computed the general average of each candidate. The roll of
paper used by Deputy Samson on this occasion was also presented and marked as Exhibit
C-7.

Both rolls, Exhibits C-6 and C-7, as well as the lists Exhibits C-1 and C-2, were kept in the
office of Justice Romualdez and were only taken out when the investigation of the
irregularities in the examinations of 1926 was commenced (page 81, s. n.). And only in
the course of that investigation it was discovered that the grades of candidate Luis
Mabunay, identified with number 898 in roll Exhibit C-6 and in the list Exhibit C-1, which
had been prepared simultaneously, did not agree, because, while roll Exhibit C-6 shows
that the grade in Civil Law of candidate No. 898 is 63, the list Exhibit C-1 shows that the
grade of the same candidate is 73; and while roll Exhibit C-6 shows that the grade of
candidate No. 898 was 58 (in Remedial Law), his grade in the list Exhibit C-1 is 64 (in the
same subject), a difference also being noted between the general average of candidate
No. 898 in Exhibit C-6, which is 72.8%, and his general average on Exhibit C-1, which is
75% (pages 73, 74, s. n.). This discovery led to the revision of the compositions of Luis
Mabunay in the examinations of 1926, which were united to his personal record (Exhibit
B), which showed that the grades given to, and written by the respective correctors on
the compositions of said candidate in Civil Law Exhibit B-1 and Remedial Law Exhibit B-2
had been altered, and further, that the grades that appeared on said compositions before
the alterations were identical with those that appeared on the roll, Exhibit C-6. An ocular
inspection of page 29 of said Exhibit C-1 shows at first glance that the numbers 73, 64,
and 75 in the columns corresponding to Civil Law, Remedial Law and General Average,
respectively, were written after erasing with rubber what was there originally written. It
may also be noted, upon an examination of the alterations appearing on the first pages
of compositions Exhibits B-1 and B-2, that the grades originally written by the correctors,
authenticated by their initials, had been stricken out in such a way that it is difficult to
make out said original grades, leaving, however, intact, the initials of the correctors.

From these facts it is inferred: First, that the person who erased and altered the grades
written by the correctors on the first pages of compositions Exhibits B-1 and B-2 wished
to make it appear that said alterations had been made by the correctors themselves;
second, that said alterations were made after the grades written by the correctors had
been noted on the adding machine in roll Exhibit C-6 and on the list Exhibit C-1 which
were prepared simultaneously; third, that after said alterations had been made, and in
order that the grades so altered should agree with the grades already written on the list
Exhibit C-1, the grades in Civil Law and Remedial Law were erased with rubber, and in
place thereof were written the grades now appearing in said compositions. The accused
Estela Romualdez having admitted that she was the author of such alterations, the only
logical inference from her admission and the facts above set out, is that she was also the
person who erased not only the grades originally written by the correctors on the
compositions Exhibits B-1 and B-2 but also those appearing in the columns corresponding
to Civil Law and Remedial Law on the list Exhibit C-1, and the same person who wrote the
grades now appearing in said columns, and which agree with those written by her on
compositions Exhibits B-1 and B-2. Now, if the accused Estela Romualdez erased in the
manner stated the grades originally written, and substituted for them the grades now
appearing in said compositions Exhibits B-1 and B-2 as well as in the columns
corresponding to Civil Law and Remedial Law in the list Exhibit C-1, it cannot be doubted
that in making such erasures and alterations she not only acted with the intent of
concealing her identity, but she also knew the number and the name of the candidate to
whom said composition belonged, because at that time the numbers and the names of
the candidates were already written on the list Exhibit C-1, and that list was kept in the
office of Justice Romualdez (page 83, s. n.), were she had complete and absolute control
as private secretary and supervisor of the examinations.

Participation of the accused Luis Mabunay

Discarding the testimony of witness Juan Villaflor in which he says that one Luis Mabunay
called up the accused Estela Romualdez on the telephone a few days before the
publication of the results of the examinations, there is, indeed, no direct proof in the
record showing the participation of the accused Luis Mabunay. However, there is other
evidence for the prosecution establishing certain facts which show strong indications that
he operated in the act before or at the time of its execution by his coaccused. It has been
proved beyond a reasonable doubt that the accused Luis Mabunay was one of the
candidates who took the bar examinations in 1926; that the general average obtained by
him, according to the computation appearing on the roll Exhibit C-6 of the adding machine
and that originally written in the list Exhibit C-1 was 72.8%; that after the Supreme Court
denied the recommendation of the examination committee that all grades from and
between 70% and 75% be automatically raised to 75%, his name, nevertheless, appeared
in the list of successful candidates which was published on March 5, 1927 (Exhibit C-5),
and that said inclusion was due to the increase of these grades in Civil Law (Exhibit B-1)
and Remedial Law (Exhibit B-2), which was made by his coaccused by erasing and altering
the grades theretofore given by the correctors.

It is true that the accused Estela Romualdez, in her desire to show that she had no motive
whatsoever for favoring his coaccused Luis Mabunay, testified that she did not know him
and that the first time she saw him was on the first day of the trial of this case. However,
in view of her inability to explain why precisely the compositions of said Luis Mabunay had
been benefited by the revision, and in view of the admission of Justice Romualdez that
the power to revise conferred upon Estela Romualdez could be exercised by her in the
compositions already graded by the correctors in all cases of injustice which came to her
knowledge, or which might be brought to her attention (page 781, s. n.), her testimony
lacks foundation, because it is absurd to believe that her revision of the compositions of
her coaccused Luis Mabunay was due only and solely to a happy coincidence.

Furthermore, the accused Mabunay made no effort to contradict the evidence for the
prosecution with reference to his withdrawal of the amount of P600 from his savings
account in the Philippine Trust Company on the second day of March, 1927, or three days
before the publication of the result of the examinations (Exhibit I) which, when correlated
with the deposit of the sum of P400 made by the accused Estela Romualdez in her current
account (Exhibit H) with the Bank of the Philippine Islands on the seventh day of said
March, 1927, may, perhaps, give an explanation of the motive of said accused for
increasing the grades of Mabunay with just the necessary points to reach the lowest
passing general average. It is also true that Estela Romualdez testified that said amount
had been sent to her by her cousin named Prisca Magpayo Redona from the province for
the purchase of merchandise for sale at the latter's store (page 791, s. n.), but the
testimony in that respect was not corroborated either by her said cousin, or by any other
persons mentioned by her as the bearers of said amount, or by the corresponding check
or postal money order, as she had done when referring other deposits in the bank.

Conclusion

In view of the foregoing considerations, the court finds that the allegations of the
information are sufficiently supported by the evidence and that the accused, Estela
Romualdez and Luis Mabunay are guilty beyond a reasonable doubt; the former as
principal and the latter as accomplice, of the crime of falsification of official documents
with which they are charged and, therefore, a judgment is rendered sentencing Estela
Romualdez, who was a Government employee at the time of the commission of the crime,
to suffer, in accordance with article 300 of the Penal Code, as amended by section 1 of
Act No. 2712, six years and one day of prision mayor with the accessory penalties of the
law, to pay a fine of 1,000 pesetas, without subsidiary imprisonment in view of the nature
of the penalty, and also to suffer the penalty of perpetual disqualification from public
office; and her coaccused Luis Mabunay, who was a private individual with respect to said
examination, to suffer, under the provisions of article 301 as amended by section 2 of Act
No. 2712 and article 67 of the Penal Code, the penalty of four months and one day of
arresto mayor, with the accessory penalties of the law, and to pay a fine of 250 pesetas,
with subsidiary imprisonment in case of insolvency, and each to pay one-half part of the
costs.

The appellant Estela Romualdez through her attorneys makes the following assignments of error:

I. The trial court erred in finding the accused, Estela Romualdez, guilty of the crime of
"falsification of public and official documents" and in sentencing her to suffer
imprisonment without due process of law, contrary to section 3, Act of Congress of August
29, 1916, entitled "An Act to Declare the Purpose of the People of the United States as to
the future Political Status of the People of the Philippine Islands, and to Provide a More
Autonomous Government for those Islands".

II. The trial court erred in not finding, that the accused, Estela Romualdez, was fully
authorized to make the alterations she in fact made on the composition papers of Luis
Mabunay, Exhibits B-1 and B-2 of the Government, and in denying full credit to the
uncontradicted testimony of Mr. Justice Norberto Romualdez, chairman of the bar
examining committee for the year 1926, concerning the authority granted her.

III. The trial court erred in failing to extend to the accused Estela Romualdez a fair and
impartial trial.

The attorneys for the appellant Luis Mabunay allege that the trial court committed the following
errors:

I. The trial court erred in not crediting the uncontradicted testimony of Justice Romualdez
with reference to his authority as chairman of the bar examination committee of the year
1926, to confer upon the accused Estela Romualdez, the powers he in fact conferred upon
her, in connection with said examination.

II. It also erred in not crediting the uncontradicted testimony of Justice Romualdez as to
the fact that he, as chairman of the bar examination committee of 1926, really and truly
conferred upon the accused Estela Romualdez the powers which she exercised in that
examination.

III. It also erred in concluding that the accused Estela Romualdez did not exercise the
powers conferred upon her by the chairman of the bar examination committee of 1926,
within the limits fixed by said chairman, to wit: that the new revision and grading of the
compositions be made in order to do justice thereto, and before the names of the
corresponding candidates were known.
IV. It likewise erred in concluding that the accused Estela Romualdez changed the general
average and the grades of candidate Luis Mabunay in Civil Law and Remedial law on the
list Exhibit C-1.

V. The lower court erred in not admitting the expert testimony of Wm. J. Rhode, Felicisimo
Feria, and Claro M. Recto, as well as Exhibits 26 and 27, containing the opinion of said
lawyers as to the grades to which said compositions Exhibits B-1 and B-2 were justly
entitled.

VI. It also erred in not concluding that Jeronimo Samson used the same powers exercised
by the accused in the bar examination of 1926.

VII. Granting that the accused Estela Romualdez knew that compositions Exhibits B-1 and
B-2 belonged to her coaccused Luis Mabunay when she reviewed and regraded them, the
court erred in concluding that said act constitutes the offense charged in the information.

VIII. Granting that Justice Romualdez, as chairman of the bar examination committee of
1926, was not authorized by the Supreme Court to confer upon Estela Romualdez the
powers which she exercised in that examination, the court erred in concluding that she
altered the grades of said compositions willfully and feloniously.

IX. The lower court also erred in concluding that Estela Romualdez intended to conceal
her identity when she revised and regraded compositions Exhibits B-1 and B-2.

X. It also erred in concluding that the accused Estela Romualdez, in exercising her powers
as supervisor of the correctors in said bar examinations, revised compositions Exhibits B-
1 and B-2 only, in order to regrade them.

XI. It also erred in suggesting that her motive, in revising and regrading said compositions
Exhibits B-1 and B-2, was the fact that she had received from her coaccused Luis Mabunay
the sum of P400.

XII. Granting that the accused Estela Romualdez committed the offense of falsification
with which she is charged, the lower court erred in concluding that Luis Mabunay
participated in its commission.

In addition to the usual brief for each of the accused, the attorneys for the appellants filed a joint
memorandum on July 10, 1929. The Attorney-General filed a brief on behalf of the People of the
Philippine Islands and a reply to the memorandum for the defense.

The court at that time consisted of nine members, one of whom, Justice Romualdez, was
disqualified to sit in this case. Upon a consideration of the case on its merits, four justices were
in favor of affirming the decision of the trial court and the same number were in favor of acquitting
the defendants. The court being unable to reach a decision in the usual course, an attempt was
made on February 11, 1930 to break the deadlock, as is evidenced by the following resolution:

The court having under consideration again the case of People vs. Romualdez, et al., No.
31012, those participating being all the members of the court, except Mr. Justice
Romualdez, who was disqualified, it was moved that following precedents elsewhere,
particularly in the United States Supreme Court, to the effect that when there is an equal
division in the court and there is no prospect of a change in the vote the judgment
appealed from stand affirmed, and in accordance with the action taken in the case of
Nacionalista Party vs.Municipal Board of Manila, No. 21265 — the judgment in the case at
bar be affirmed. Mr. Chief Justice Avanceña and Messrs. Justices Malcolm, Ostrand, and
Johns voted in favor of the motion. Messrs. Justices Johnson, Street, Villamor, and Villa-
Real voted against the motion. Mr. Justice Johnson based his dissent on the peculiar
statutory provisions in force in the Philippine Islands. For want of a majority, the motion
was lost.

The court thereupon directed that the clerk retain the record in the case until the further
order of the court.

On January 12, 1931 Luis Mabunay filed a motion praying that the case against him be considered
separately and he be absolved from the complaint. This motion was denied by the court. He
renewed his motion on August 1, 1931. This motion was also denied on the ground that no
severance had been asked for in the lower court, and for the further reason that there was a
prospect that the membership of the court would soon be increased.

The membership of the court was finally increased to eleven, and due to the death or retirement
of three justices only six of the former members remained. On June 23, 1932 Courtney Whitney
as attorney for Estela Romualdez filed a petition praying that this case be set for a rehearing
before the court as newly constituted. This motion was granted. On July 2, 1932 he filed a motion
for the dismissal of the information, alleging that because of the inability of the court to reach a
determination from the facts as to the guilt or innocence of the defendant-appellant Estela
Romualdez, she had been denied her right to a speedy trial. This motion was denied.

After a reargument of the case, the attorney for Estela Romualdez filed an additional
memorandum, to which the Attorney-General filed a reply.

Under the first assignment of error, the attorneys for Estela Romualdez maintain that even if the
lower court's findings of fact be justified by the evidence of record, "they fail to sustain that any
criminal offense, recognized under the laws of the Philippine Islands, has been committed." They
contend that the appointment of the committee of attorneys by Justice Romualdez to read and
grade the examination papers was not warranted by law, and that therefore the alteration by the
defendant Estela Romualdez, under the circumstances alleged in the information, of the grades
in question did not constitute a crime.

The testimony of Justice Romualdez, who was a witness for the defense, completely refutes this
contention. He testified that the bar examining committee was composed of two groups of
attorneys: Those that were appointed to prepare the questions, and those that were appointed
to grade the papers. He further testified that the court was informed of the way in which the
examination was conducted and that it approved thereof. There were more than a thousand
candidates and some eight thousand papers. According to the contention of appellant's attorneys
only the seven attorneys appointed to prepare the questions or the court itself could lawfully
grade these papers. Such a contention is clearly untenable. The attorneys that prepared the
questions did not intervene in the grading of the papers, but they prepared a key to the questions,
which served the other group of attorneys, the readers or "correctors", as a guide in grading the
papers. The intervention of the "correctors" was just as legal as that of the attorneys that
prepared the questions, and the intervention of the two groups of attorneys was perfectly regular
and valid.

It is also contended that the examination papers which the defendant Estela Romualdez altered
were not public or official documents. That contention is likewise without merit. As stated by her
attorneys, the examination of candidates for admission to the bar is a judicial function. It cannot
therefore be maintained with any show of reason that the papers submitted by the candidates in
the course of the examination were not public and official documents, or that the alteration, under
the circumstances alleged in the information, of the grades given to such papers by the
"correctors" was not a crime. (In re Del Rosario, 52 Phil., 399, where this court refers to the
falsification of his examination papers as "falsification of public documents"; People vs. Castro
and Doe, 54 Phil., 41, where the conviction of Castro for the falsification of his examination papers
was affirmed.)

In accordance with the established practice of the court to have one of its members each year
make all the necessary arrangements for the bar examination, the Chief Justice in 1926
designated Justice Romualdez for that purpose, and in pursuance thereof he appointed one group
of attorneys to prepare the questions and another group to grade the papers. If any of these
attorneys were designated by the clerk of the court, it was with the advice and consent and on
the authority of Justice Romualdez.

The phrase "falsification of a document" is not used in articles 300 and 301 of the Penal code in
the ordinary acceptation of the words. It has a technical meaning, and according to article 300
may be committed in the following eight ways:

1. By counterfeiting or imitating any handwriting, signature, or rubric.

2. By causing it to appear that persons have participated in any act or proceeding when
they did not in fact so participate.

3. By attributing to persons who have participated in an act or proceeding statements


other than those in fact made by them.

4. By making untruthful statements in a narration of facts.

5. By altering true dates.

6. By making any alteration or intercalation in a genuine document which changes its


meaning.

7. By issuing in authenticated form a document purporting to be a copy of an original


document when no such original exists, or by including in such a copy a statement contrary
to, or different from, that of the genuine original.

8. By intercalating any instrument or note relative to the issuance thereof in a protocol,


registry or official book.
The acts of the accused are covered by paragraphs 2, 3, and 6. She made the alterations in the
grades in such a way as to make it appear that the "correctors" had participated therein, because
she blotted out the grades of the "correctors" and wrote new and increased grades opposite their
initials, without indicating by her own initials that she had made the alterations. She in that way
attributed to the "correctors" statements other than those in fact made by them. Her only
explanation of why she altered the grades in that way was that it pleased her to do so.

A decision in point has just come to hand. It is reported in 180 N. E., 725, and is referred to in
the American Bar Association Journal for August, 1932, p. 497. A bill was presented in the
Massachusetts Senate prohibiting the marking of the examination papers of applicants for
admission to the bar by any person not a member of the board of bar examiners. The Senate
wished to know whether such a bill, if enacted, would be an unconstitutional interference with
the functions of the Judicial Department, and asked the Justices of the Supreme Judicial Court
for an advisory opinion. They replied that such a law would be unconstitutional. In the course of
the opinion they said: "If the judicial department decides that the marking of the written
examinations may be performed by competent persons not members of the board but acting
under the direction of such members, that pertains directly to the ascertainment of the
qualifications of applicants. It is a definite attribute of the judicial department and not an
immaterial incident." It was also stated that the plan of employing assistants to aid the bar
examiners in marking the papers had been approved by the Supreme Judicial Court.

In the second assignment of error, the attorney for Estela Romualdez maintains that the trial
court erred in not finding that she was fully authorized to make the alterations she in fact made
on the examination papers of Luis Mabunay, Exhibits B-1 and B-2, and in denying full credit to
the uncontradicted testimony of Justice Norberto Romualdez, chairman of the bar examining
committee for the year 1926, concerning the authority granted her.

In the first place, we find it difficult to believe that Justice Romualdez ever gave the accused the
authority which she claims to have received; and in the second place, even if it be assumed that
he gave her the alleged authority, she did not exercise it in accordance with the terms thereof.

The defense would have us believe that Justice Romualdez regarded his secretary, Estela
Romualdez, and the deputy clerk, Jeronimo Samson, who were themselves "correctors" as
supervisors of the other "correctors", and that he authorized Estela Romualdez to revise any
grade to correct an injustice, without consulting or notifying the other supervisor, Samson, or the
"correctors' who had graded the paper, without requiring her to initial the alteration, or to make
any record thereof or any report to him or to anybody else.

Justice Romualdez was designated by the Chief Justice to conduct the examination in accordance
with the law and the Rules of Court. He himself had no such authority as he is alleged to have
given his secretary. He is presumed to have discharged his duties in accordance with the law,
and it is inconceivable that he would without any warrant of law give or attempt to give his
secretary the unlimited authority which she claims to have received, thereby enabling her to alter
at will any grade or any paper, without making any record thereof or any report to anybody. The
mere statement of such a claim shows that it is preposterous.
No such authority was given to Samson, who according to Justice Romualdez was regarded by
him as a supervisor of equal rank with Estela Romualdez. Samson was never notified that he was
regarded as a supervisor, and he never acted in that capacity.

Let us notice how this unlimited authority is alleged to have been granted to the accused Estela
Romualdez.

It was not in writing or evidenced by any memorandum. It was not even a positive statement.
Justice Romualdez testified that he believed that on a certain occasion he gave his secretary to
understand that if a case should be brought to her attention she might revise any grade to prevent
an injustice, so long as she did not know the name of the candidate to whom the paper belonged.
When asked where she was when the pretended authority was given to her, the accused could
not remember.

There was according to the theory of the defense nothing to prevent Samson from revising the
revision of Estela Romualdez, because she did not initial the changes made by her, and he was
supposed to be a supervisor of equal rank.

If it be admitted for the sake of argument that the accused Estela Romualdez was given the
authority which she claims to have received, nevertheless she was not authorized to change the
grades now in question, because when she made the changes she already knew that the papers
belonged to her coaccused Luis Mabunay. The evidence fully sustaining that conclusion is carefully
set forth by the trial court, and it is unnecessary for us to review it. The testimony of Justice
Romualdez to the effect that the accused acted within the authority granted her in changing the
grades in question was a mere expression of opinion. It was clearly inadmissible and not binding
on the court. The accused Estela Romualdez did not even attempt to explain under what
circumstances she raised the grades of her coaccused so as to enable him to obtain the necessary
general average of 75 per cent. She did not confer with the "correctors" who had graded the
papers in question. She di not attempt to explain how she arrived at the increased grades, or
how she came to revise the grades in question, how she happened to pick these two papers out
of eight thousand. She could not point to any other grades that had been altered by her.

Under the second assignment of error the attorney for Estela Romualdez also alleges that she
freely and voluntarily admitted from the start of the trial of her case that the alterations had been
made by her, and concludes therefrom that she acted in good faith. We cannot agree either with
the statement of fact or the conclusion. The accused Estela Romualdez did not admit that the
alterations were made by her until after the prosecuting attorney had presented three hundred
and fifty pages of testimony and announced his readiness to prove by three handwriting experts
that the alterations were in the handwriting of the accused. The evidence shows that before the
trial defendant's attorney from the fiscal's office a photograph that had been made for the purpose
of comparing a specimen of defendant's handwriting and that of the altered grades. The fact that
the defendant Estela Romualdez made the alterations under the circumstances which we have
mentioned, when she already knew that the papers belonged to Mabunay, disproves any
contention that she acted in good faith.

In the case of the United States vs. Ballesteros (25 Phil., 634), this court said:
When the unlawful acts charged against an accused are established by competent
evidence, criminal intent may be and will be presumed, unless such intent is rebutted by
the introduction of evidence sufficient to overcome this presumption, and satisfactorily
disclosing the absence of such criminal intent.

The third assignment of error made by the appellant Estela Romualdez is that the trial court erred
in failing to extend to her a fair and impartial trial. We shall not waste much time on this
assignment of error, which is utterly without merit. The record itself completely refutes any such
contention. If the learned trial judge erred, it was in permitting the attorneys for the defendants
too great latitude in arguing their objections. Arguments four and five pages long were
incorporated into the stenographic record of the evidence. The record shows a most unjustifiable
attack on the good faith of the fiscal and a persistent effort to embarrass him in presenting his
evidence against the accused.

The appellant Luis Mabunay makes twelve assignments of error. They are for the most part
embraced in the assignments of error of his coaccused which we have already considered. These
remain only his fifth, eleventh, and twelfth assignments of error. In his fifth assignment of error
it is alleged that the lower court erred in not admitting the expert testimony of attorneys Wm. J.
Rhode, Felicisimo Feria, and Claro M. Recto, and in rejecting Exhibits 26 and 27, which contain
the opinion of said attorneys as to the correct grades which the examination papers Exhibits B-1
and B-2 deserved.

The lower court sustained the objection to the admission of the testimony of these three attorneys
on the ground that it was not the best evidence, and suggested that the defense might call the
members of the examining committee that prepared the questions in Remedial Law and Civil Law
and the key thereto. The attorneys for the defense did not see fit to adopt the suggestion of the
court. It is not true therefore that the lower court deprived the accused of an opportunity of
showing that the examination papers in question deserved the increased grades which the
defendant Estela Romualdez gave them. The attorneys that prepared the questions and the key
to the answers were certainly the persons best qualified to decide whether or not the questions
were correctly answered. The opinion of other attorneys, who had nothing to do with the
examination, would only lead to confusion. We find no merit in this assignment of error.

The eleventh assignment of error is that the trial court erred in insinuating that the motive of the
accused Estela Romualdez in reviewing and regrading the examination papers Exhibits B-1 and
B-2 was the fact that she had received four hundred pesos from her co-accused Luis Mabunay.

The twelfth assignment of error is that if it be assumed that the accused Estela Romualdez
committed the crime of falsification imputed to her in the information, the court erred in
concluding that the accused Luis Mabunay participated in its commission.

For the sake of convenience we shall consider these two assignments of error together.

In the first place we should like to say that there is no evidence to show that Estela Romualdez
ever reviewed the examination papers of her coaccused. So far as the evidence shows, she merely
raised his grades in two subjects, thus giving him by "a happy coincidence", to use her own
words, a passing mark. She could not or would not enlighten the court as to why she raised the
grades of Luis Mabunay so as to enable him to be admitted to the bar. As already stated, the
record does not show that she raised the grades of any other candidate.

The evidence shows that Luis Mabunay had failed in two previous examinations, and that he
failed in the examination in question, receiving a general average of only 72.8%. The bar
examining committee recommended that not only those having the required general average of
75 per cent be admitted, but also that those who had received between 70 and 75 per cent. This
is referred to in the record as "an automatic increase". It was not automatic but arbitrary, and
was disapproved by the Supreme Court, and the committee was directed to prepare a new list
and to include therein only those who had obtained a general average of 75 per cent. The name
of Luis Mabunay was included in the new list submitted three days later, notwithstanding the fact
that he had obtained a general average of only 72.8 per cent, precisely because Estela Romualdez
had in the meantime raised the grades now in question so that he appeared to have obtained the
general average required for admission to the bar.

The evidence shows that on March 2, 1927 Luis Mabunay withdrew P600 from the Philippine
Trust Co., and that on March 7, 1927 Estela Romualdez deposited P510 in the Bank of the
Philippine Islands. Luis Mabunay did not testify, and he did not present any evidence to show for
what purpose he withdrew P600 from the bank immediately after the first list was disapproved.

In the case of United States vs. Tria (17 Phil., 303, 307), Justice Moreland speaking for the court
said:

An accused person sometimes owes a duty to himself if not to the State. If he does not
perform that duty he may not always expect the State to perform it for him. If he fails to
meet the obligation which he owes to himself, when to meet it is the easiest of easy
things, he is hardy indeed if he demand and expect the same full and wide consideration
which the State voluntarily gives to those who by reasonable effort seek to help
themselves. This is particularly so when he not only declines to help himself but actively
conceals from the State the very means by which it may assist him.

In the famous case of the Commonwealth vs. Webster (5 Cushing, 295, 316), Chief Justice Shaw
laid down the following rule:

When pretty stringent proof of circumstances is produced, tending to support the charge,
and it is apparent that the accused is so situated that he could offer evidence of all the
facts and circumstances as they existed, and show, if such was the truth, that the
suspicious circumstances can be accounted for consistency with his innocence, and he
fails to offer such proof, the natural conclusion is, that the proof, if produced, instead of
rebutting, would tend to sustain the charge. But this is to be cautiously applied, and only
in cases where it is manifest that proofs are in the power of the accused, not accessible
to the prosecution.

Estela Romualdez showed that of the sum of P510 P100 was paid to her by her mother and only
P10 by her brother, but she could not satisfactorily prove where the remaining P400 came from.
She said it was sent to her by her cousin, Prisca Magpayo Redona, for the purchase of goods, but
she could not name the person that brought the money to her, or explain why she deposited it
in the bank. She did not attempt to show that she had paid it out by means of checks for the
purchase of goods for her cousin. She did not call her cousin as a witness.

An accused person runs the risk of an inference against him because of failure to produce
evidence. The inference, unless the failure to produce evidence is explained away, is that
the tenor of the specific unproduced evidence would not support the party's case. (U.
S. vs. Sarikala, 37 Phil., 486.)

In the case just cited the court quoted with approval the following rules as stated by Dean
Wigmore in his work on Evidence, Vol. IV, p. 3148:

The failure to produce evidence, in general, other than his own testimony, is open to
inference against a party accused, with the same limitations applicable to civil parties.
Here the effect of the burden of proof has sometimes tended to confuse. It is true that
the burden is on the prosecution, and that the accused is not required by any rule of law
to produce evidence; but nevertheless he runs the risk of an inference from
nonproduction. This seeming paradox, which has been already sufficiently noticed in
treating of the general principle, has misled a few courts to deny that any inference may
be drawn.

The alterations in the grades made by Estela Romualdez were made for the sole use and benefit
of her coaccused Luis Mabunay. They were made willfully and illegally, and after the Supreme
Court had rejected those candidates that had received less than 75 per cent. The alterations were
therefore made after Mabunay had failed, and he withdrew the money after he had time to learn
from his coaccused that he had failed. It was under those circumstances incumbent upon the
accused Mabunay to present evidence to show for what purpose he withdrew the six hundred
pesos from the bank. As this court said in the case of Worcester vs. Ocampo (22 Phil., 42):

When the circumstances in proof tend to fix the liability on a party who has it in his power
to offer evidence of all the facts as they existed and rebut the inferences which the
circumstances in proof tend to establish, and he fails to offer such proof, the natural
conclusion is that the proof, if produced, instead of rebutting would support the inferences
against him, and the court is justified in acting upon that conclusion.

The case of In re Del Rosario (52 Phil., 399), is directly on point. Felipe del Rosario failed for the
third time in the bar examination of 1926. He then filed a motion for the revision of his grades,
based on an alleged mistake in computation. This motion was granted, and he was admitted to
the bar. It was subsequently found that alterations had been made in his examination papers,
and he and Juan Villaflor were prosecuted for the falsification of a public document. Villaflor
assumed full responsibility for the commission of the crime, and testified that Del Rosario did not
know anything about the making of the alterations. The trial court acquitted Del Rosario, but
upon a view of the case for the purpose of taking disciplinary actin against him Justice Malcolm,
speaking for the court in banc, said:

It is asking a great deal of the members of the court to have them believe that Felipe del
Rosario was totally unaware of the illegal machinations culminating in the falsification of
public documents, of which he was the sole beneficiary.
The attorney's certificate of Felipe del Rosario was cancelled.

In the case of People vs. Bella Bautista (53 Phil., 158), the accused was charged with the
falsification of a public document. The evidence showed that in the Register of Attorneys the
name of an attorney had been erased, and that the accused had written his own name in that
space, although he had not admitted to the bar. The accused contended that he wrote his name
in the register under the direction of an employee of the court, and that he acted in good faith.
He was convicted, and on appeal the decision was affirmed. This court in its decision said: "The
trial court suggests in the opinion that the offense committed required the participation of some
unfaithful employee of the court. But this fact, as the court found, did not lessen the criminal
responsibility of the appellant."

It is alleged in the information that the accused conspired together and acted in common accord
in the commission of the crime. As the Attorney-General says, a conspiracy can seldom be proved
except by circumstantial evidence, but once it is proved, the acts of one of the conspirators are
the acts of all. (U. S. vs. Ipil., 27 Phil., 530.)

The existence of the assent of minds which is involved in a conspiracy may be, and, from
the secrecy of the crime, usually must be, inferred by the jury from proof of facts and
circumstances which, taken together, apparently indicate that they are merely parts of
some complete whole. If it is proved that two or more persons aimed by their acts towards
the accomplishment of the same unlawful object, each doing a part so that their acts,
though apparently independent, were in fact connected and cooperative, indicating a
closeness of personal association and a concurrence of sentiment, a conspiracy may be
inferred though no actual meeting among them to concert means is proved. Evidence of
actual participation, rather than of passive acquiescence, is desirable. But proof of
acquiescence in, or consent to, the actions of others is relevant to show the criminal
intention of the passive party, and generally the smallest degree of consent or collusion
among parties lets in the act or words of one against the others. (Underhill on Criminal
Evidence, pp. 795, 796.)

For the foregoing reasons, we find that the conclusions of the trial court are fully justified by the
evidence.

As the accused Estela Romualdez took advantage of her official position in committing the crime,
the trial court found her guilty of a violation of article 300 of the Penal Code, as amended by Act
No. 2712, and sentenced her to suffer six years and one day of prision mayor, and the accessory
penalties provided by law, to pay a fine of 1,000 pesetas, and to suffer perpetual disqualification
to hold any public office.

The penalty provided by the Penal Code is prision mayor in full extent, or from six years and one
day to twelve years, and the penalty under the Revised Penal Code being the same, and there
being no aggravating or mitigating circumstance present in the commission of the crime, the
penalty should be imposed in the medium degree, which is from eight years and one day to ten
years. The penalty imposed on the appellant Estela Romualdez is therefore increased to eight
years and one day of prision mayor.
The trial court found the defendant Luis Mabunay guilty as an accomplice under article 301 of the
Penal Code, the crime not being connected with the performance of his duties as an employee of
the Government, and sentenced him to suffer four months and one day of arresto mayor, and
the accessory penalties provided by law, and to pay a fine of 250 pesetas, with subsidiary
imprisonment in case of insolvency. The defendants were each sentenced to pay one-half of the
costs.

We find that the lower court erred in holding that Luis Mabunay was merely an accomplice. He
was a conspirator and coprincipal of Estela Romualdez. The penalty provided by article 301 of the
Penal Code, as amended by Act No. 2712, is prision correccional in the maximum degree, but
that has been changed by the Revised Penal Code toprision correccional in the medium and
maximum degrees, and the medium degree of that penalty is from three years, six months, and
twenty-one days to four years, nine months and ten days. The prison sentence of Luis Mabunay
is therefore increased to three years, six months, and twenty- one days of prision correccional.

The decision of the trial court is modified as hereinabove stated. In all other respects it is affirmed,
with the costs against the appellants.

Resolution March 18, 1954

In the Matter of the Petitions for Admission to the Bar of Unsuccessful Candidates of
1946 to 1953;
ALBINO CUNANAN, ET AL., petitioners.

Jose M. Aruego, M.H. de Joya, Miguel R. Cornejo, and Antonio Enrile Inton for petitioners.
Office of the Solicitor General Juan R. Liwag for respondent.

DIOKNO, J.:

In recent years few controversial issues have aroused so much public interest and concern as
Republic Act No. 972, popularly known as the "Bar Flunkers' Act of 1953." Under the Rules of
Court governing admission to the bar, "in order that a candidate (for admission to the Bar) may
be deemed to have passed his examinations successfully, he must have obtained a general
average of 75 per cent in all subjects, without falling below 50 per cent in any subject." (Rule
127, sec. 14, Rules of Court). Nevertheless, considering the varying difficulties of the different
bar examinations held since 1946 and the varying degree of strictness with which the examination
papers were graded, this court passed and admitted to the bar those candidates who had
obtained an average of only 72 per cent in 1946, 69 per cent in 1947, 70 per cent in 1948, and
74 per cent in 1949. In 1950 to 1953, the 74 per cent was raised to 75 per cent.

Believing themselves as fully qualified to practice law as those reconsidered and passed by this
court, and feeling conscious of having been discriminated against (See Explanatory Note to R.A.
No. 972), unsuccessful candidates who obtained averages of a few percentage lower than those
admitted to the Bar agitated in Congress for, and secured in 1951 the passage of Senate Bill No.
12 which, among others, reduced the passing general average in bar examinations to 70 per cent
effective since 1946. The President requested the views of this court on the bill. Complying with
that request, seven members of the court subscribed to and submitted written comments adverse
thereto, and shortly thereafter the President vetoed it. Congress did not override the veto.
Instead, it approved Senate Bill No. 371, embodying substantially the provisions of the vetoed
bill. Although the members of this court reiterated their unfavorable views on the matter, the
President allowed the bill to become a law on June 21, 1953 without his signature. The law, which
incidentally was enacted in an election year, reads in full as follows:

REPUBLIC ACT NO. 972

AN ACT TO FIX THE PASSING MARKS FOR BAR EXAMINATIONS FROM NINETEEN
HUNDRED AND FORTY-SIX UP TO AND INCLUDING NINETEEN HUNDRED AND
FIFTY-FIVE.

Be it enacted by the Senate and House of Representatives of the Philippines in


Congress assembled:

SECTION 1. Notwithstanding the provisions of section fourteen, Rule numbered one


hundred twenty-seven of the Rules of Court, any bar candidate who obtained a general
average of seventy per cent in any bar examinations after July fourth, nineteen hundred
and forty-six up to the August nineteen hundred and fifty-one bar examinations; seventy-
one per cent in the nineteen hundred and fifty-two bar examinations; seventy-two per
cent in the in the nineteen hundred and fifty-three bar examinations; seventy-three per
cent in the nineteen hundred and fifty-four bar examinations; seventy-four per cent in the
nineteen hundred and fifty-five bar examinations without a candidate obtaining a grade
below fifty per cent in any subject, shall be allowed to take and subscribe the
corresponding oath of office as member of the Philippine Bar: Provided, however, That
for the purpose of this Act, any exact one-half or more of a fraction, shall be considered
as one and included as part of the next whole number.

SEC. 2. Any bar candidate who obtained a grade of seventy-five per cent in any subject
in any bar examination after July fourth, nineteen hundred and forty-six shall be deemed
to have passed in such subject or subjects and such grade or grades shall be included in
computing the passing general average that said candidate may obtain in any subsequent
examinations that he may take.

SEC. 3. This Act shall take effect upon its approval.

Enacted on June 21, 1953, without the Executive approval.

After its approval, many of the unsuccessful postwar candidates filed petitions for admission to
the bar invoking its provisions, while others whose motions for the revision of their examination
papers were still pending also invoked the aforesaid law as an additional ground for admission.
There are also others who have sought simply the reconsideration of their grades without,
however, invoking the law in question. To avoid injustice to individual petitioners, the court first
reviewed the motions for reconsideration, irrespective of whether or not they had invoked
Republic Act No. 972. Unfortunately, the court has found no reason to revise their grades. If they
are to be admitted to the bar, it must be pursuant to Republic Act No. 972 which, if declared
valid, should be applied equally to all concerned whether they have filed petitions or not. A
complete list of the petitioners, properly classified, affected by this decision, as well as a more
detailed account of the history of Republic Act No. 972, are appended to this decision as Annexes
I and II. And to realize more readily the effects of the law, the following statistical data are set
forth:

(1) The unsuccessful bar candidates who are to be benefited by section 1 of Republic Act No. 972
total 1,168, classified as follows:

1946 (August) 206 121 18


1946 (November) 477 228 43
1947 749 340 0
1948 899 409 11
1949 1,218 532 164
1950 1,316 893 26
1951 2,068 879 196
1952 2,738 1,033 426
1953 2,555 968 284
TOTAL 12,230 5,421 1,168

Of the total 1,168 candidates, 92 have passed in subsequent examination, and only 586 have
filed either motions for admission to the bar pursuant to said Republic Act, or mere motions for
reconsideration.

(2) In addition, some other 10 unsuccessful candidates are to be benefited by section 2 of said
Republic Act. These candidates had each taken from two to five different examinations, but failed
to obtain a passing average in any of them. Consolidating, however, their highest grades in
different subjects in previous examinations, with their latest marks, they would be sufficient to
reach the passing average as provided for by Republic Act No. 972.

(3) The total number of candidates to be benefited by this Republic Acts is therefore 1,094, of
which only 604 have filed petitions. Of these 604 petitioners, 33 who failed in 1946 to 1951 had
individually presented motions for reconsideration which were denied, while 125 unsuccessful
candidates of 1952, and 56 of 1953, had presented similar motions, which are still pending
because they could be favorably affected by Republic Act No. 972, — although as has been
already stated, this tribunal finds no sufficient reasons to reconsider their grades

UNCONSTITUTIONALITY OF REPUBLIC ACT NO. 972

Having been called upon to enforce a law of far-reaching effects on the practice of the legal
profession and the administration of justice, and because some doubts have been expressed as
to its validity, the court set the hearing of the afore-mentioned petitions for admission on the sole
question of whether or not Republic Act No. 972 is constitutional.
We have been enlightened in the study of this question by the brilliant assistance of the members
of the bar who have amply argued, orally an in writing, on the various aspects in which the
question may be gleaned. The valuable studies of Messrs. E. Voltaire Garcia, Vicente J. Francisco,
Vicente Pelaez and Buenaventura Evangelista, in favor of the validity of the law, and of the U.P.
Women's Lawyers' Circle, the Solicitor General, Messrs. Arturo A. Alafriz, Enrique M. Fernando,
Vicente Abad Santos, Carlos A. Barrios, Vicente del Rosario, Juan de Blancaflor, Mamerto V.
Gonzales, and Roman Ozaeta against it, aside from the memoranda of counsel for petitioners,
Messrs. Jose M. Aruego, M.H. de Joya, Miguel R. Cornejo and Antonio Enrile Inton, and of
petitioners Cabrera, Macasaet and Galema themselves, has greatly helped us in this task. The
legal researchers of the court have exhausted almost all Philippine and American jurisprudence
on the matter. The question has been the object of intense deliberation for a long time by the
Tribunal, and finally, after the voting, the preparation of the majority opinion was assigned to a
new member in order to place it as humanly as possible above all suspicion of prejudice or
partiality.

Republic Act No. 972 has for its object, according to its author, to admit to the Bar, those
candidates who suffered from insufficiency of reading materials and inadequate preparation.
Quoting a portion of the Explanatory Note of the proposed bill, its author Honorable Senator Pablo
Angeles David stated:

The reason for relaxing the standard 75 per cent passing grade is the tremendous
handicap which students during the years immediately after the Japanese occupation has
to overcome such as the insufficiency of reading materials and the inadequacy of the
preparation of students who took up law soon after the liberation.

Of the 9,675 candidates who took the examinations from 1946 to 1952, 5,236 passed. And now
it is claimed that in addition 604 candidates be admitted (which in reality total 1,094), because
they suffered from "insufficiency of reading materials" and of "inadequacy of preparation."

By its declared objective, the law is contrary to public interest because it qualifies 1,094 law
graduates who confessedly had inadequate preparation for the practice of the profession, as was
exactly found by this Tribunal in the aforesaid examinations. The public interest demands of legal
profession adequate preparation and efficiency, precisely more so as legal problem evolved by
the times become more difficult. An adequate legal preparation is one of the vital requisites for
the practice of law that should be developed constantly and maintained firmly. To the legal
profession is entrusted the protection of property, life, honor and civil liberties. To approve
officially of those inadequately prepared individuals to dedicate themselves to such a delicate
mission is to create a serious social danger. Moreover, the statement that there was an
insufficiency of legal reading materials is grossly exaggerated. There were abundant materials.
Decisions of this court alone in mimeographed copies were made available to the public during
those years and private enterprises had also published them in monthly magazines and annual
digests. The Official Gazette had been published continuously. Books and magazines published
abroad have entered without restriction since 1945. Many law books, some even with revised and
enlarged editions have been printed locally during those periods. A new set of Philippine Reports
began to be published since 1946, which continued to be supplemented by the addition of new
volumes. Those are facts of public knowledge.

Notwithstanding all these, if the law in question is valid, it has to be enforced.


The question is not new in its fundamental aspect or from the point of view of applicable
principles, but the resolution of the question would have been easier had an identical case of
similar background been picked out from the jurisprudence we daily consult. Is there any
precedent in the long Anglo-Saxon legal history, from which has been directly derived the judicial
system established here with its lofty ideals by the Congress of the United States, and which we
have preserved and attempted to improve, or in our contemporaneous judicial history of more
than half a century? From the citations of those defending the law, we can not find a case in
which the validity of a similar law had been sustained, while those against its validity cite, among
others, the cases of Day (In re Day, 54 NE 646), of Cannon (State vs. Cannon, 240 NW, 441),
the opinion of the Supreme Court of Massachusetts in 1932 (81 ALR 1061), of Guariña (24 Phil.,
37), aside from the opinion of the President which is expressed in his vote of the original bill and
which the postponement of the contested law respects.

This law has no precedent in its favor. When similar laws in other countries had been
promulgated, the judiciary immediately declared them without force or effect. It is not within our
power to offer a precedent to uphold the disputed law.

To be exact, we ought to state here that we have examined carefully the case that has been cited
to us as a favorable precedent of the law — that of Cooper (22 NY, 81), where the Court of
Appeals of New York revoked the decision of the Supreme court of that State, denying the petition
of Cooper to be admitted to the practice of law under the provisions of a statute concerning the
school of law of Columbia College promulgated on April 7, 1860, which was declared by the Court
of Appeals to be consistent with the Constitution of the state of New York.

It appears that the Constitution of New York at that time provided:

They (i.e., the judges) shall not hold any other office of public trust. All votes for either of
them for any elective office except that of the Court of Appeals, given by the Legislature
or the people, shall be void. They shall not exercise any power of appointment to public
office. Any male citizen of the age of twenty-one years, of good moral character, and who
possesses the requisite qualifications of learning and ability, shall be entitled to admission
to practice in all the courts of this State. (p. 93).

According to the Court of Appeals, the object of the constitutional precept is as follows:

Attorneys, solicitors, etc., were public officers; the power of appointing them had
previously rested with the judges, and this was the principal appointing power which they
possessed. The convention was evidently dissatisfied with the manner in which this power
had been exercised, and with the restrictions which the judges had imposed upon
admission to practice before them. The prohibitory clause in the section quoted was aimed
directly at this power, and the insertion of the provision" expecting the admission of
attorneys, in this particular section of the Constitution, evidently arose from its connection
with the object of this prohibitory clause. There is nothing indicative of confidence in the
courts or of a disposition to preserve any portion of their power over this subject, unless
the Supreme Court is right in the inference it draws from the use of the word `admission'
in the action referred to. It is urged that the admission spoken of must be by the court;
that to admit means to grant leave, and that the power of granting necessarily implies the
power of refusing, and of course the right of determining whether the applicant possesses
the requisite qualifications to entitle him to admission.

These positions may all be conceded, without affecting the validity of the act. (p. 93.)

Now, with respect to the law of April 7, 1860, the decision seems to indicate that it provided that
the possession of a diploma of the school of law of Columbia College conferring the degree of
Bachelor of Laws was evidence of the legal qualifications that the constitution required of
applicants for admission to the Bar. The decision does not however quote the text of the law,
which we cannot find in any public or accessible private library in the country.

In the case of Cooper, supra, to make the law consistent with the Constitution of New York, the
Court of Appeals said of the object of the law:

The motive for passing the act in question is apparent. Columbia College being an
institution of established reputation, and having a law department under the charge of
able professors, the students in which department were not only subjected to a formal
examination by the law committee of the institution, but to a certain definite period of
study before being entitled to a diploma of being graduates, the Legislature evidently, and
no doubt justly, considered this examination, together with the preliminary study required
by the act, as fully equivalent as a test of legal requirements, to the ordinary examination
by the court; and as rendering the latter examination, to which no definite period of
preliminary study was essential, unnecessary and burdensome.

The act was obviously passed with reference to the learning and ability of the applicant,
and for the mere purpose of substituting the examination by the law committee of the
college for that of the court. It could have had no other object, and hence no greater
scope should be given to its provisions. We cannot suppose that the Legislature designed
entirely to dispense with the plain and explicit requirements of the Constitution; and the
act contains nothing whatever to indicate an intention that the authorities of the college
should inquire as to the age, citizenship, etc., of the students before granting a diploma.
The only rational interpretation of which the act admits is, that it was intended to make
the college diploma competent evidence as to the legal attainments of the applicant, and
nothing else. To this extent alone it operates as a modification of pre-existing statutes,
and it is to be read in connection with these statutes and with the Constitution itself in
order to determine the present condition of the law on the subject. (p.89)

xxx xxx xxx

The Legislature has not taken from the court its jurisdiction over the question of
admission, that has simply prescribed what shall be competent evidence in certain cases
upon that question. (p.93)

From the foregoing, the complete inapplicability of the case of Cooper with that at bar may be
clearly seen. Please note only the following distinctions:

(1) The law of New York does not require that any candidate of Columbia College who failed in
the bar examinations be admitted to the practice of law.
(2) The law of New York according to the very decision of Cooper, has not taken from the court
its jurisdiction over the question of admission of attorney at law; in effect, it does not decree the
admission of any lawyer.

(3) The Constitution of New York at that time and that of the Philippines are entirely different on
the matter of admission of the practice of law.

In the judicial system from which ours has been evolved, the admission, suspension, disbarment
and reinstatement of attorneys at law in the practice of the profession and their supervision have
been disputably a judicial function and responsibility. Because of this attribute, its continuous and
zealous possession and exercise by the judicial power have been demonstrated during more than
six centuries, which certainly "constitutes the most solid of titles." Even considering the power
granted to Congress by our Constitution to repeal, alter supplement the rules promulgated by this
Court regarding the admission to the practice of law, to our judgment and proposition that the
admission, suspension, disbarment and reinstatement of the attorneys at law is a legislative
function, properly belonging to Congress, is unacceptable. The function requires (1) previously
established rules and principles, (2) concrete facts, whether past or present, affecting determinate
individuals. and (3) decision as to whether these facts are governed by the rules and principles;
in effect, a judicial function of the highest degree. And it becomes more undisputably judicial,
and not legislative, if previous judicial resolutions on the petitions of these same individuals are
attempted to be revoked or modified.

We have said that in the judicial system from which ours has been derived, the act of admitting,
suspending, disbarring and reinstating attorneys at law in the practice of the profession is
concededly judicial. A comprehensive and conscientious study of this matter had been undertaken
in the case of State vs. Cannon (1932) 240 NW 441, in which the validity of a legislative enactment
providing that Cannon be permitted to practice before the courts was discussed. From the text of
this decision we quote the following paragraphs:

This statute presents an assertion of legislative power without parallel in the history of
the English speaking people so far as we have been able to ascertain. There has been
much uncertainty as to the extent of the power of the Legislature to prescribe the ultimate
qualifications of attorney at law has been expressly committed to the courts, and the act
of admission has always been regarded as a judicial function. This act purports to
constitute Mr. Cannon an attorney at law, and in this respect it stands alone as an
assertion of legislative power. (p. 444)

Under the Constitution all legislative power is vested in a Senate and Assembly. (Section
1, art. 4.) In so far as the prescribing of qualifications for admission to the bar are
legislative in character, the Legislature is acting within its constitutional authority when it
sets up and prescribes such qualifications. (p. 444)

But when the Legislature has prescribed those qualifications which in its judgment will
serve the purpose of legitimate legislative solicitude, is the power of the court to impose
other and further exactions and qualifications foreclosed or exhausted? (p. 444)

Under our Constitution the judicial and legislative departments are distinct, independent,
and coordinate branches of the government. Neither branch enjoys all the powers of
sovereignty which properly belongs to its department. Neither department should so act
as to embarrass the other in the discharge of its respective functions. That was the scheme
and thought of the people setting upon the form of government under which we exist.
State vs. Hastings, 10 Wis., 525; Attorney General ex rel. Bashford vs. Barstow, 4 Wis.,
567. (p. 445)

The judicial department of government is responsible for the plane upon which the
administration of justice is maintained. Its responsibility in this respect is exclusive. By
committing a portion of the powers of sovereignty to the judicial department of our state
government, under 42a scheme which it was supposed rendered it immune from
embarrassment or interference by any other department of government, the courts cannot
escape responsibility fir the manner in which the powers of sovereignty thus committed
to the judicial department are exercised. (p. 445)

The relation at the bar to the courts is a peculiar and intimate relationship. The bar is an
attache of the courts. The quality of justice dispense by the courts depends in no small
degree upon the integrity of its bar. An unfaithful bar may easily bring scandal and
reproach to the administration of justice and bring the courts themselves into disrepute.
(p.445)

Through all time courts have exercised a direct and severe supervision over their bars, at
least in the English speaking countries. (p. 445)

After explaining the history of the case, the Court ends thus:

Our conclusion may be epitomized as follows: For more than six centuries prior to the
adoption of our Constitution, the courts of England, concededly subordinate to Parliament
since the Revolution of 1688, had exercise the right of determining who should be
admitted to the practice of law, which, as was said in Matter of the Sergeant's at Law, 6
Bingham's New Cases 235, "constitutes the most solid of all titles." If the courts and
judicial power be regarded as an entity, the power to determine who should be admitted
to practice law is a constituent element of that entity. It may be difficult to isolate that
element and say with assurance that it is either a part of the inherent power of the court,
or an essential element of the judicial power exercised by the court, but that it is a power
belonging to the judicial entity and made of not only a sovereign institution, but made of
it a separate independent, and coordinate branch of the government. They took this
institution along with the power traditionally exercise to determine who should constitute
its attorney at law. There is no express provision in the Constitution which indicates an
intent that this traditional power of the judicial department should in any manner be
subject to legislative control. Perhaps the dominant thought of the framers of our
constitution was to make the three great departments of government separate and
independent of one another. The idea that the Legislature might embarrass the judicial
department by prescribing inadequate qualifications for attorneys at law is inconsistent
with the dominant purpose of making the judicial independent of the legislative
department, and such a purpose should not be inferred in the absence of express
constitutional provisions. While the legislature may legislate with respect to the
qualifications of attorneys, but is incidental merely to its general and unquestioned power
to protect the public interest. When it does legislate a fixing a standard of qualifications
required of attorneys at law in order that public interests may be protected, such
qualifications do not constitute only a minimum standard and limit the class from which
the court must make its selection. Such legislative qualifications do not constitute the
ultimate qualifications beyond which the court cannot go in fixing additional qualifications
deemed necessary by the course of the proper administration of judicial functions. There
is no legislative power to compel courts to admit to their bars persons deemed by them
unfit to exercise the prerogatives of an attorney at law. (p. 450)

Furthermore, it is an unlawful attempt to exercise the power of appointment. It is quite


likely true that the legislature may exercise the power of appointment when it is in
pursuance of a legislative functions. However, the authorities are well-nigh unanimous
that the power to admit attorneys to the practice of law is a judicial function. In all of the
states, except New Jersey (In re Reisch, 83 N.J. Eq. 82, 90 A. 12), so far as our
investigation reveals, attorneys receive their formal license to practice law by their
admission as members of the bar of the court so admitting. Cor. Jur. 572; Ex
parte Secombre, 19 How. 9,15 L. Ed. 565; Ex parteGarland, 4 Wall. 333, 18 L. Ed. 366;
Randall vs. Brigham, 7 Wall. 53, 19 L. Ed. 285; Hanson vs. Grattan, 48 Kan, 843, 115 P.
646, 34 L.R.A. 519; Danforth vs. Egan, 23 S. D. 43, 119 N.W. 1021, 130 Am. St. Rep.
1030, 20 Ann. Cas. 413.

The power of admitting an attorney to practice having been perpetually exercised by the
courts, it having been so generally held that the act of the court in admitting an attorney
to practice is the judgment of the court, and an attempt as this on the part of the
Legislature to confer such right upon any one being most exceedingly uncommon, it seems
clear that the licensing of an attorney is and always has been a purely judicial function,
no matter where the power to determine the qualifications may reside. (p. 451)

In that same year of 1932, the Supreme Court of Massachusetts, in answering a consultation of
the Senate of that State, 180 NE 725, said:

It is indispensible to the administration of justice and to interpretation of the laws that


there be members of the bar of sufficient ability, adequate learning and sound moral
character. This arises from the need of enlightened assistance to the honest, and
restraining authority over the knavish, litigant. It is highly important, also that the public
be protected from incompetent and vicious practitioners, whose opportunity for doing
mischief is wide. It was said by Cardoz, C.L., in People ex rel. Karlin vs. Culkin, 242 N.Y.
456, 470, 471, 162 N.E. 487, 489, 60 A.L.R. 851: "Membership in the bar is a privilege
burden with conditions." One is admitted to the bar "for something more than private
gain." He becomes an "officer of the court", and ,like the court itself, an instrument or
agency to advance the end of justice. His cooperation with the court is due "whenever
justice would be imperiled if cooperation was withheld." Without such attorneys at law
the judicial department of government would be hampered in the performance of its
duties. That has been the history of attorneys under the common law, both in this country
and England. Admission to practice as an attorney at law is almost without exception
conceded to be a judicial function. Petition to that end is filed in courts, as are other
proceedings invoking judicial action. Admission to the bar is accomplish and made open
and notorious by a decision of the court entered upon its records. The establishment by
the Constitution of the judicial department conferred authority necessary to the exercise
of its powers as a coordinate department of government. It is an inherent power of such
a department of government ultimately to determine the qualifications of those to be
admitted to practice in its courts, for assisting in its work, and to protect itself in this
respect from the unfit, those lacking in sufficient learning, and those not possessing good
moral character. Chief Justice Taney stated succinctly and with finality in Ex
parte Secombe, 19 How. 9, 13, 15 L. Ed. 565, "It has been well settled, by the rules and
practice of common-law courts, that it rests exclusively with the court to determine who
is qualified to become one of its officers, as an attorney and counselor, and for what cause
he ought to be removed." (p.727)

In the case of Day and others who collectively filed a petition to secure license to practice the
legal profession by virtue of a law of state (In re Day, 54 NE 646), the court said in part:

In the case of Ex parte Garland, 4 Wall, 333, 18 L. Ed. 366, the court, holding the test
oath for attorneys to be unconstitutional, explained the nature of the attorney's office as
follows: "They are officers of the court, admitted as such by its order, upon evidence of
their possessing sufficient legal learning and fair private character. It has always been the
general practice in this country to obtain this evidence by an examination of the parties.
In this court the fact of the admission of such officers in the highest court of the states to
which they, respectively, belong for, three years preceding their application, is regarded
as sufficient evidence of the possession of the requisite legal learning, and the statement
of counsel moving their admission sufficient evidence that their private and professional
character is fair. The order of admission is the judgment of the court that the parties
possess the requisite qualifications as attorneys and counselors, and are entitled to appear
as such and conduct causes therein. From its entry the parties become officers of the
court, and are responsible to it for professional misconduct. They hold their office during
good behavior, and can only be deprived of it for misconduct ascertained and declared by
the judgment of the court after opportunity to be heard has been afforded. Ex
parte Hoyfron, admission or their exclusion is not the exercise of a mere ministerial power.
It is the exercise of judicial power, and has been so held in numerous cases. It was so
held by the court of appeals of New York in the matter of the application of Cooper for
admission. Re Cooper 22 N. Y. 81. "Attorneys and Counselors", said that court, "are not
only officers of the court, but officers whose duties relate almost exclusively to
proceedings of a judicial nature; and hence their appointment may, with propriety, be
entrusted to the court, and the latter, in performing his duty, may very justly considered
as engaged in the exercise of their appropriate judicial functions." (pp. 650-651).

We quote from other cases, the following pertinent portions:

Admission to practice of law is almost without exception conceded everywhere to be the


exercise of a judicial function, and this opinion need not be burdened with citations in this
point. Admission to practice have also been held to be the exercise of one of the inherent
powers of the court. — Re Bruen, 102 Wash. 472, 172 Pac. 906.

Admission to the practice of law is the exercise of a judicial function, and is an inherent
power of the court. — A.C. Brydonjack, vs. State Bar of California, 281 Pac. 1018; See
Annotation on Power of Legislature respecting admission to bar, 65, A.L. R. 1512.
On this matter there is certainly a clear distinction between the functions of the judicial and
legislative departments of the government.

The distinction between the functions of the legislative and the judicial departments is
that it is the province of the legislature to establish rules that shall regulate and govern in
matters of transactions occurring subsequent to the legislative action, while the judiciary
determines rights and obligations with reference to transactions that are past or conditions
that exist at the time of the exercise of judicial power, and the distinction is a vital one
and not subject to alteration or change either by legislative action or by judicial decree.

The judiciary cannot consent that its province shall be invaded by either of the other
departments of the government. — 16 C.J.S., Constitutional Law, p. 229.

If the legislature cannot thus indirectly control the action of the courts by requiring of
them construction of the law according to its own views, it is very plain it cannot do so
directly, by settling aside their judgments, compelling them to grant new trials, ordering
the discharge of offenders, or directing what particular steps shall be taken in the progress
of a judicial inquiry. — Cooley's Constitutional Limitations, 192.

In decreeing the bar candidates who obtained in the bar examinations of 1946 to 1952, a general
average of 70 per cent without falling below 50 per cent in any subject, be admitted in mass to
the practice of law, the disputed law is not a legislation; it is a judgment — a judgment revoking
those promulgated by this Court during the aforecited year affecting the bar candidates
concerned; and although this Court certainly can revoke these judgments even now, for justifiable
reasons, it is no less certain that only this Court, and not the legislative nor executive department,
that may be so. Any attempt on the part of any of these departments would be a clear usurpation
of its functions, as is the case with the law in question.

That the Constitution has conferred on Congress the power to repeal, alter or supplement the
rule promulgated by this Tribunal, concerning the admission to the practice of law, is no valid
argument. Section 13, article VIII of the Constitution provides:

Section 13. The Supreme Court shall have the power to promulgate rules concerning
pleading, practice, and procedure in all courts, and the admission to the practice of law.
Said rules shall be uniform for all courts of the same grade and shall not diminish, increase
or modify substantive rights. The existing laws on pleading, practice and procedure are
hereby repealed as statutes, and are declared Rules of Court, subject to the power of the
Supreme Court to alter and modify the same. The Congress shall have the power to repeal,
alter, or supplement the rules concerning pleading, practice, and procedure, and the
admission to the practice of law in the Philippines. — Constitution of the Philippines, Art.
VIII, sec. 13.

It will be noted that the Constitution has not conferred on Congress and this Tribunal equal
responsibilities concerning the admission to the practice of law. the primary power and
responsibility which the Constitution recognizes continue to reside in this Court. Had Congress
found that this Court has not promulgated any rule on the matter, it would have nothing over
which to exercise the power granted to it. Congress may repeal, alter and supplement the rules
promulgated by this Court, but the authority and responsibility over the admission, suspension,
disbarment and reinstatement of attorneys at law and their supervision remain vested in the
Supreme Court. The power to repeal, alter and supplement the rules does not signify nor permit
that Congress substitute or take the place of this Tribunal in the exercise of its primary power on
the matter. The Constitution does not say nor mean that Congress may admit, suspend, disbar
or reinstate directly attorneys at law, or a determinate group of individuals to the practice of law.
Its power is limited to repeal, modify or supplement the existing rules on the matter, if according
to its judgment the need for a better service of the legal profession requires it. But this power
does not relieve this Court of its responsibility to admit, suspend, disbar and reinstate attorneys
at law and supervise the practice of the legal profession.

Being coordinate and independent branches, the power to promulgate and enforce rules for the
admission to the practice of law and the concurrent power to repeal, alter and supplement them
may and should be exercised with the respect that each owes to the other, giving careful
consideration to the responsibility which the nature of each department requires. These powers
have existed together for centuries without diminution on each part; the harmonious delimitation
being found in that the legislature may and should examine if the existing rules on the admission
to the Bar respond to the demands which public interest requires of a Bar endowed with high
virtues, culture, training and responsibility. The legislature may, by means of appeal, amendment
or supplemental rules, fill up any deficiency that it may find, and the judicial power, which has
the inherent responsibility for a good and efficient administration of justice and the supervision
of the practice of the legal profession, should consider these reforms as the minimum standards
for the elevation of the profession, and see to it that with these reforms the lofty objective that
is desired in the exercise of its traditional duty of admitting, suspending, disbarring and reinstating
attorneys at law is realized. They are powers which, exercise within their proper constitutional
limits, are not repugnant, but rather complementary to each other in attaining the establishment
of a Bar that would respond to the increasing and exacting necessities of the administration of
justice.

The case of Guariña (1913) 24 Phil., 37, illustrates our criterion. Guariña took examination and
failed by a few points to obtain the general average. A recently enacted law provided that one
who had been appointed to the position of Fiscal may be admitted to the practice of law without
a previous examination. The Government appointed Guariña and he discharged the duties of
Fiscal in a remote province. This tribunal refused to give his license without previous
examinations. The court said:

Relying upon the provisions of section 2 of Act No. 1597, the applicant in this case seeks
admission to the bar, without taking the prescribed examination, on the ground that he
holds the office of provincial fiscal for the Province of Batanes.

Section 2 of Act No. 1597, enacted February 28, 1907, is as follows:

Sec. 2. Paragraph one of section thirteen of Act Numbered One Hundred and ninety,
entitled "An Act providing a Code of Procedure in Civil Actions and Special Proceedings in
the Philippine Islands," is hereby amended to read as follows:

1. Those who have been duly licensed under the laws and orders of the Islands under the
sovereignty of Spain or of the United States and are in good and regular standing as
members of the bar of the Philippine Islands at the time of the adoption of this
code; Provided, That any person who, prior to the passage of this act, or at any time
thereafter, shall have held, under the authority of the United States, the position of justice
of the Supreme Court, judge of the Court of First Instance, or judge or associate judge of
the Court of Land Registration, of the Philippine Islands, or the position of Attorney
General, Solicitor General, Assistant Attorney General, assistant attorney in the office of
the Attorney General, prosecuting attorney for the City of Manila, city attorney of Manila,
assistant city attorney of Manila, provincial fiscal, attorney for the Moro Province, or
assistant attorney for the Moro Province, may be licensed to practice law in the courts of
the Philippine Islands without an examination, upon motion before the Supreme Court
and establishing such fact to the satisfaction of said court.

The records of this court disclose that on a former occasion this appellant took, and failed
to pass the prescribed examination. The report of the examining board, dated March 23,
1907, shows that he received an average of only 71 per cent in the various branches of
legal learning upon which he was examined, thus falling four points short of the required
percentage of 75. We would be delinquent in the performance of our duty to the public
and to the bar, if, in the face of this affirmative indication of the deficiency of the applicant
in the required qualifications of learning in the law at the time when he presented his
former application for admission to the bar, we should grant him license to practice law
in the courts of these Islands, without first satisfying ourselves that despite his failure to
pass the examination on that occasion, he now "possesses the necessary qualifications of
learning and ability."

But it is contented that under the provisions of the above-cited statute the applicant is
entitled as of right to be admitted to the bar without taking the prescribed examination
"upon motion before the Supreme Court" accompanied by satisfactory proof that he has
held and now holds the office of provincial fiscal of the Province of Batanes. It is urged
that having in mind the object which the legislator apparently sought to attain in enacting
the above-cited amendment to the earlier statute, and in view of the context generally
and especially of the fact that the amendment was inserted as a proviso in that section of
the original Act which specifically provides for the admission of certain candidates without
examination. It is contented that this mandatory construction is imperatively required in
order to give effect to the apparent intention of the legislator, and to the candidate's
claim de jure to have the power exercised.

And after copying article 9 of Act of July 1, 1902 of the Congress of the United States, articles 2,
16 and 17 of Act No. 136, and articles 13 to 16 of Act 190, the Court continued:

Manifestly, the jurisdiction thus conferred upon this court by the commission and
confirmed to it by the Act of Congress would be limited and restricted, and in a case such
as that under consideration wholly destroyed, by giving the word "may," as used in the
above citation from Act of Congress of July 1, 1902, or of any Act of Congress prescribing,
defining or limiting the power conferred upon the commission is to that extent invalid and
void, as transcending its rightful limits and authority.

Speaking on the application of the law to those who were appointed to the positions enumerated,
and with particular emphasis in the case of Guariña, the Court held:
In the various cases wherein applications for the admission to the bar under the provisions
of this statute have been considered heretofore, we have accepted the fact that such
appointments had been made as satisfactory evidence of the qualifications of the
applicant. But in all of those cases we had reason to believe that the applicants had been
practicing attorneys prior to the date of their appointment.

In the case under consideration, however, it affirmatively appears that the applicant was
not and never had been practicing attorney in this or any other jurisdiction prior to the
date of his appointment as provincial fiscal, and it further affirmatively appears that he
was deficient in the required qualifications at the time when he last applied for admission
to the bar.

In the light of this affirmative proof of his defieciency on that occasion, we do not think
that his appointment to the office of provincial fiscal is in itself satisfactory proof if his
possession of the necessary qualifications of learning and ability. We conclude therefore
that this application for license to practice in the courts of the Philippines, should be
denied.

In view, however, of the fact that when he took the examination he fell only four points
short of the necessary grade to entitle him to a license to practice; and in view also of the
fact that since that time he has held the responsible office of the governor of the Province
of Sorsogon and presumably gave evidence of such marked ability in the performance of
the duties of that office that the Chief Executive, with the consent and approval of the
Philippine Commission, sought to retain him in the Government service by appointing him
to the office of provincial fiscal, we think we would be justified under the above-cited
provisions of Act No. 1597 in waiving in his case the ordinary examination prescribed by
general rule, provided he offers satisfactory evidence of his proficiency in a special
examination which will be given him by a committee of the court upon his application
therefor, without prejudice to his right, if he desires so to do, to present himself at any of
the ordinary examinations prescribed by general rule. — (In re Guariña, pp. 48-49.)

It is obvious, therefore, that the ultimate power to grant license for the practice of law belongs
exclusively to this Court, and the law passed by Congress on the matter is of permissive character,
or as other authorities say, merely to fix the minimum conditions for the license.

The law in question, like those in the case of Day and Cannon, has been found also to suffer from
the fatal defect of being a class legislation, and that if it has intended to make a classification, it
is arbitrary and unreasonable.

In the case of Day, a law enacted on February 21, 1899 required of the Supreme Court, until
December 31 of that year, to grant license for the practice of law to those students who began
studying before November 4, 1897, and had studied for two years and presented a diploma issued
by a school of law, or to those who had studied in a law office and would pass an examination,
or to those who had studied for three years if they commenced their studies after the
aforementioned date. The Supreme Court declared that this law was unconstitutional being,
among others, a class legislation. The Court said:
This is an application to this court for admission to the bar of this state by virtue of
diplomas from law schools issued to the applicants. The act of the general assembly
passed in 1899, under which the application is made, is entitled "An act to amend section
1 of an act entitled "An act to revise the law in relation to attorneys and counselors,"
approved March 28, 1884, in force July 1, 1874." The amendment, so far as it appears in
the enacting clause, consists in the addition to the section of the following: "And every
application for a license who shall comply with the rules of the supreme court in regard
to admission to the bar in force at the time such applicant commend the study of law,
either in a law or office or a law school or college, shall be granted a license under this
act notwithstanding any subsequent changes in said rules". — In re Day et al, 54 N.Y., p.
646.

. . . After said provision there is a double proviso, one branch of which is that up to
December 31, 1899, this court shall grant a license of admittance to the bar to the holder
of every diploma regularly issued by any law school regularly organized under the laws of
this state, whose regular course of law studies is two years, and requiring an attendance
by the student of at least 36 weeks in each of such years, and showing that the student
began the study of law prior to November 4, 1897, and accompanied with the usual proofs
of good moral character. The other branch of the proviso is that any student who has
studied law for two years in a law office, or part of such time in a law office, "and part in
the aforesaid law school," and whose course of study began prior to November 4, 1897,
shall be admitted upon a satisfactory examination by the examining board in the branches
now required by the rules of this court. If the right to admission exists at all, it is by virtue
of the proviso, which, it is claimed, confers substantial rights and privileges upon the
persons named therein, and establishes rules of legislative creation for their admission to
the bar. (p. 647.)

Considering the proviso, however, as an enactment, it is clearly a special legislation,


prohibited by the constitution, and invalid as such. If the legislature had any right to admit
attorneys to practice in the courts and take part in the administration of justice, and could
prescribe the character of evidence which should be received by the court as conclusive
of the requisite learning and ability of persons to practice law, it could only be done by a
general law, persons or classes of persons. Const. art 4, section 2. The right to practice
law is a privilege, and a license for that purpose makes the holder an officer of the court,
and confers upon him the right to appear for litigants, to argue causes, and to collect fees
therefor, and creates certain exemptions, such as from jury services and arrest on civil
process while attending court. The law conferring such privileges must be general in its
operation. No doubt the legislature, in framing an enactment for that purpose, may classify
persons so long as the law establishing classes in general, and has some reasonable
relation to the end sought. There must be some difference which furnishes a reasonable
basis for different one, having no just relation to the subject of the legislation. Braceville
Coal Co. vs. People, 147 Ill. 66, 35 N.E. 62; Ritchie vs. People, 155 Ill. 98, 40 N.E.
454; Railroad Co. vs. Ellis, 165 U.S. 150, 17 Sup. Ct. 255.

The length of time a physician has practiced, and the skill acquired by experience, may
furnish a basis for classification (Williams vs. People 121 Ill. 48, II N.E. 881); but the place
where such physician has resided and practiced his profession cannot furnish such basis,
and is an arbitrary discrimination, making an enactment based upon it void (State vs.
Pennyeor, 65 N.E. 113, 18 Atl. 878). Here the legislature undertakes to say what shall
serve as a test of fitness for the profession of the law, and plainly, any classification must
have some reference to learning, character, or ability to engage in such practice. The
proviso is limited, first, to a class of persons who began the study of law prior to November
4, 1897. This class is subdivided into two classes — First, those presenting diplomas issued
by any law school of this state before December 31, 1899; and, second, those who studied
law for the period of two years in a law office, or part of the time in a law school and part
in a law office, who are to be admitted upon examination in the subjects specified in the
present rules of this court, and as to this latter subdivision there seems to be no limit of
time for making application for admission. As to both classes, the conditions of the rules
are dispensed with, and as between the two different conditions and limits of time are
fixed. No course of study is prescribed for the law school, but a diploma granted upon the
completion of any sort of course its managers may prescribe is made all-sufficient. Can
there be anything with relation to the qualifications or fitness of persons to practice law
resting upon the mere date of November 4, 1897, which will furnish a basis of
classification. Plainly not. Those who began the study of law November 4th could qualify
themselves to practice in two years as well as those who began on the 3rd. The classes
named in the proviso need spend only two years in study, while those who commenced
the next day must spend three years, although they would complete two years before the
time limit. The one who commenced on the 3rd. If possessed of a diploma, is to be
admitted without examination before December 31, 1899, and without any prescribed
course of study, while as to the other the prescribed course must be pursued, and the
diploma is utterly useless. Such classification cannot rest upon any natural reason, or bear
any just relation to the subject sought, and none is suggested. The proviso is for the sole
purpose of bestowing privileges upon certain defined persons. (pp. 647-648.)

In the case of Cannon above cited, State vs. Cannon, 240 N.W. 441, where the legislature
attempted by law to reinstate Cannon to the practice of law, the court also held with regards to
its aspect of being a class legislation:

But the statute is invalid for another reason. If it be granted that the legislature has power
to prescribe ultimately and definitely the qualifications upon which courts must admit and
license those applying as attorneys at law, that power can not be exercised in the manner
here attempted. That power must be exercised through general laws which will apply to
all alike and accord equal opportunity to all. Speaking of the right of the Legislature to
exact qualifications of those desiring to pursue chosen callings, Mr. Justice Field in the
case of Dent. vs. West Virginia, 129 U.S. 114, 121, 9 S. Ct. 232, 233, 32 L. Ed. 626, said:
"It is undoubtedly the right of every citizen of the United States to follow any lawful calling,
business or profession he may choose, subject only to such restrictions as are imposed
upon all persons of like age, sex, and condition." This right may in many respects be
considered as a distinguishing feature of our republican institutions. Here all vocations are
all open to every one on like conditions. All may be pursued as sources of livelihood, some
requiring years of study and great learning for their successful prosecution. The interest,
or, as it is sometimes termed, the "estate" acquired in them — that is, the right to continue
their prosecution — is often of great value to the possessors and cannot be arbitrarily
taken from them, any more than their real or personal property can be thus taken. It is
fundamental under our system of government that all similarly situated and possessing
equal qualifications shall enjoy equal opportunities. Even statutes regulating the practice
of medicine, requiring medications to establish the possession on the part of the
application of his proper qualifications before he may be licensed to practice, have been
challenged, and courts have seriously considered whether the exemption from such
examinations of those practicing in the state at the time of the enactment of the law
rendered such law unconstitutional because of infringement upon this general principle.
State vs. Thomas Call, 121 N.C. 643, 28 S.E. 517; see, also, The State ex rel. Winkler vs.
Rosenberg, 101 Wis. 172, 76 N.W. 345; State vs. Whitcom, 122 Wis. 110, 99 N.W. 468.

This law singles out Mr. Cannon and assumes to confer upon him the right to practice law
and to constitute him an officer of this Court as a mere matter of legislative grace or favor.
It is not material that he had once established his right to practice law and that one time
he possessed the requisite learning and other qualifications to entitle him to that right.
That fact in no matter affect the power of the Legislature to select from the great body of
the public an individual upon whom it would confer its favors.

A statute of the state of Minnesota (Laws 1929, c. 424) commanded the Supreme Court
to admit to the practice of law without examination, all who had served in the military or
naval forces of the United States during the World War and received a honorable discharge
therefrom and who (were disabled therein or thereby within the purview of the Act of
Congress approved June 7th, 1924, known as "World War Veteran's Act, 1924 and whose
disability is rated at least ten per cent thereunder at the time of the passage of this Act."
This Act was held |unconstitutional on the ground that it clearly violated the quality clauses
of the constitution of that state. In re Application of George W. Humphrey, 178 Minn. 331,
227 N.W. 179.

A good summary of a classification constitutionally acceptable is explained in 12 Am. Jur. 151-


153 as follows:

The general rule is well settled by unanimity of the authorities that a classification to be
valid must rest upon material differences between the person included in it and those
excluded and, furthermore, must be based upon substantial distinctions. As the rule has
sometimes avoided the constitutional prohibition, must be founded upon pertinent and
real differences, as distinguished from irrelevant and artificial ones. Therefore, any law
that is made applicable to one class of citizens only must be based on some substantial
difference between the situation of that class and other individuals to which it does not
apply and must rest on some reason on which it can be defended. In other words, there
must be such a difference between the situation and circumstances of all the members of
the class and the situation and circumstances of all other members of the state in relation
to the subjects of the discriminatory legislation as presents a just and natural cause for
the difference made in their liabilities and burdens and in their rights and privileges. A law
is not general because it operates on all within a clause unless there is a substantial reason
why it is made to operate on that class only, and not generally on all. (12 Am. Jur. pp.
151-153.)

Pursuant to the law in question, those who, without a grade below 50 per cent in any subject,
have obtained a general average of 69.5 per cent in the bar examinations in 1946 to 1951, 70.5
per cent in 1952, 71.5 per cent in 1953, and those will obtain 72.5 per cent in 1954, and 73.5 per
cent in 1955, will be permitted to take and subscribe the corresponding oath of office as members
of the Bar, notwithstanding that the rules require a minimum general average of 75 per cent,
which has been invariably followed since 1950. Is there any motive of the nature indicated by the
abovementioned authorities, for this classification ? If there is none, and none has been given,
then the classification is fatally defective.

It was indicated that those who failed in 1944, 1941 or the years before, with the general average
indicated, were not included because the Tribunal has no record of the unsuccessful candidates
of those years. This fact does not justify the unexplained classification of unsuccessful candidates
by years, from 1946-1951, 1952, 1953, 1954, 1955. Neither is the exclusion of those who failed
before said years under the same conditions justified. The fact that this Court has no record of
examinations prior to 1946 does not signify that no one concerned may prove by some other
means his right to an equal consideration.

To defend the disputed law from being declared unconstitutional on account of its retroactivity,
it is argued that it is curative, and that in such form it is constitutional. What does Rep. Act 972
intend to cure ? Only from 1946 to 1949 were there cases in which the Tribunal permitted
admission to the bar of candidates who did not obtain the general average of 75 per cent: in
1946 those who obtained only 72 per cent; in the 1947 and those who had 69 per cent or more;
in 1948, 70 per cent and in 1949, 74 per cent; and in 1950 to 1953, those who obtained 74 per
cent, which was considered by the Court as equivalent to 75 per cent as prescribed by the Rules,
by reason of circumstances deemed to be sufficiently justifiable. These changes in the passing
averages during those years were all that could be objected to or criticized. Now, it is desired to
undo what had been done — cancel the license that was issued to those who did not obtain the
prescribed 75 per cent ? Certainly not. The disputed law clearly does not propose to do so.
Concededly, it approves what has been done by this Tribunal. What Congress lamented is that
the Court did not consider 69.5 per cent obtained by those candidates who failed in 1946 to 1952
as sufficient to qualify them to practice law. Hence, it is the lack of will or defect of judgment of
the Court that is being cured, and to complete the cure of this infirmity, the effectivity of the
disputed law is being extended up to the years 1953, 1954 and 1955, increasing each year the
general average by one per cent, with the order that said candidates be admitted to the Bar. This
purpose, manifest in the said law, is the best proof that what the law attempts to amend and
correct are not the rules promulgated, but the will or judgment of the Court, by means of simply
taking its place. This is doing directly what the Tribunal should have done during those years
according to the judgment of Congress. In other words, the power exercised was not to repeal,
alter or supplement the rules, which continue in force. What was done was to stop or suspend
them. And this power is not included in what the Constitution has granted to Congress, because
it falls within the power to apply the rules. This power corresponds to the judiciary, to which such
duty been confided.

Article 2 of the law in question permits partial passing of examinations, at indefinite intervals. The
grave defect of this system is that it does not take into account that the laws and jurisprudence
are not stationary, and when a candidate finally receives his certificate, it may happen that the
existing laws and jurisprudence are already different, seriously affecting in this manner his
usefulness. The system that the said law prescribes was used in the first bar examinations of this
country, but was abandoned for this and other disadvantages. In this case, however, the fatal
defect is that the article is not expressed in the title will have temporary effect only from 1946 to
1955, the text of article 2 establishes a permanent system for an indefinite time. This is contrary
to Section 21 (1), article VI of the Constitution, which vitiates and annuls article 2 completely;
and because it is inseparable from article 1, it is obvious that its nullity affect the entire law.

Laws are unconstitutional on the following grounds: first, because they are not within the
legislative powers of Congress to enact, or Congress has exceeded its powers; second, because
they create or establish arbitrary methods or forms that infringe constitutional principles; and
third, because their purposes or effects violate the Constitution or its basic principles. As has
already been seen, the contested law suffers from these fatal defects.

Summarizing, we are of the opinion and hereby declare that Republic Act No. 972 is
unconstitutional and therefore, void, and without any force nor effect for the following reasons,
to wit:

1. Because its declared purpose is to admit 810 candidates who failed in the bar examinations of
1946-1952, and who, it admits, are certainly inadequately prepared to practice law, as was exactly
found by this Court in the aforesaid years. It decrees the admission to the Bar of these candidates,
depriving this Tribunal of the opportunity to determine if they are at present already prepared to
become members of the Bar. It obliges the Tribunal to perform something contrary to reason and
in an arbitrary manner. This is a manifest encroachment on the constitutional responsibility of the
Supreme Court.

2. Because it is, in effect, a judgment revoking the resolution of this Court on the petitions of
these 810 candidates, without having examined their respective examination papers, and
although it is admitted that this Tribunal may reconsider said resolution at any time for justifiable
reasons, only this Court and no other may revise and alter them. In attempting to do it directly
Republic Act No. 972 violated the Constitution.

3. By the disputed law, Congress has exceeded its legislative power to repeal, alter and
supplement the rules on admission to the Bar. Such additional or amendatory rules are, as they
ought to be, intended to regulate acts subsequent to its promulgation and should tend to improve
and elevate the practice of law, and this Tribunal shall consider these rules as minimum norms
towards that end in the admission, suspension, disbarment and reinstatement of lawyers to the
Bar, inasmuch as a good bar assists immensely in the daily performance of judicial functions and
is essential to a worthy administration of justice. It is therefore the primary and inherent
prerogative of the Supreme Court to render the ultimate decision on who may be admitted and
may continue in the practice of law according to existing rules.

4. The reason advanced for the pretended classification of candidates, which the law makes, is
contrary to facts which are of general knowledge and does not justify the admission to the Bar
of law students inadequately prepared. The pretended classification is arbitrary. It is undoubtedly
a class legislation.

5. Article 2 of Republic Act No. 972 is not embraced in the title of the law, contrary to what the
Constitution enjoins, and being inseparable from the provisions of article 1, the entire law is void.

6. Lacking in eight votes to declare the nullity of that part of article 1 referring to the examinations
of 1953 to 1955, said part of article 1, insofar as it concerns the examinations in those years,
shall continue in force.
A.C. No. L-1117 March 20, 1944

THE DIRECTOR OF RELIGIOUS AFFAIRS, complainant,


vs.
ESTANISLAO R. BAYOT, respondent.

Office of the Solicitor General De la Costa and Solicitor Feria for complainant.
Francisco Claravall for respondent.

OZAETA, J.:

The respondent, who is an attorney-at-law, is charged with malpractice for having published an
advertisement in the Sunday Tribune of June 13, 1943, which reads as follows:

Marriage

license promptly secured thru our assistance & the annoyance of delay or publicity avoided
if desired, and marriage arranged to wishes of parties. Consultation on any matter free
for the poor. Everything confidential.

Legal assistance service


12 Escolta, Manila, Room, 105
Tel. 2-41-60.

Appearing in his own behalf, respondent at first denied having published the said advertisement;
but subsequently, thru his attorney, he admitted having caused its publication and prayed for
"the indulgence and mercy" of the Court, promising "not to repeat such professional misconduct
in the future and to abide himself to the strict ethical rules of the law profession." In further
mitigation he alleged that the said advertisement was published only once in the Tribune and that
he never had any case at law by reason thereof.

Upon that plea the case was submitted to the Court for decision.

It is undeniable that the advertisement in question was a flagrant violation by the respondent of
the ethics of his profession, it being a brazen solicitation of business from the public. Section 25
of Rule 127 expressly provides among other things that "the practice of soliciting cases at law for
the purpose of gain, either personally or thru paid agents or brokers, constitutes malpractice." It
is highly unethical for an attorney to advertise his talents or skill as a merchant advertises his
wares. Law is a profession and not a trade. The lawyer degrades himself and his profession who
stoops to and adopts the practices of mercantilism by advertising his services or offering them to
the public. As a member of the bar, he defiles the temple of justice with mercenary activities as
the money-changers of old defiled the temple of Jehovah. "The most worth and effective
advertisement possible, even for a young lawyer, . . . is the establishment of a well-merited
reputation for professional capacity and fidelity to trust. This cannot be forced but must be the
outcome of character and conduct." (Canon 27, Code of Ethics.)
In In re Tagorda, 53 Phil., the respondent attorney was suspended from the practice of law for
the period of one month for advertising his services and soliciting work from the public by writing
circular letters. That case, however, was more serious than this because there the solicitations
were repeatedly made and were more elaborate and insistent.

Considering his plea for leniency and his promise not to repeat the misconduct, the Court is of
the opinion and so decided that the respondent should be, as he hereby is, reprimanded.

A.M. No. 2756 June 5, 1986

PRUDENTIAL BANK, complainant,


vs.
JUDGE JOSE P. CASTRO and ATTY. BENJAMIN M. GRECIA, respondents.

PER CURIAM:

Prudential Bank (Complainant Bank) instituted this administrative case on April 11, 1985, praying
this Court to investigate Respondent Judge Jose P. Castro, presiding over Regional Trial Court,
National Capital Judicial Region, Branch LXXXV, Quezon City, (Respondent Judge), and Atty.
Benjamin M. Grecia (Respondent Grecia), in connection with their actuations in a civil case (the
RTC CASE), tried and decided by Respondent Judge and where plaintiff was represented by
Respondent Grecia.

The RTC CASE was entitled "Macro Textile Mills Corporation, Plaintiff, vs. Prudential Bank & Trust
Co., Aka The Prudential Bank and Benjamin Baens del Rosario, Notary Public for Quezon City,
Defendants". Plaintiff in the RTC Case shall hereinafter be referred to simply as MACRO. It was
the registered owner of a 19,493 sq. m. lot in Quezon City, covered by TCT No. 261842 (the
"MACRO PROPERTY"), alleged to have a value of about P20 million.

What has been prayed for by Complainant Bank is the exercise by this Court of its power to
discipline Respondent Judge, and the initiation of proceedings for the disbarment or suspension
of Respondent Grecia.

Based on documents submitted to this Court, the relevant facts upon which this Resolution is
based may be stated as follows:

1. The President and General Manager of MACRO is named Go Cun Uy. He is also a partner of,
or a signatory for, a partnership named Galaxy Tricot Manufacturing Co. (GALAXY, for short).

2. As of January 24, 1983, MACRO and GALAXY, together, were indebted to Complainant Bank in
the principal sum of P9,510,000.00.
3. On the said date of January 24, 1983, MACRO, through Go Cun Uy, executed a mortgage over
the MACRO PROPERTY ("notarized" on January 26, 1983) in favor of Complainant Bank to
guarantee the then, as well as future, obligations of MACRO and/or GALAXY in favor of the
mortgagee.

4. More than a year after, or on April 11, 1984, Complainant Bank sent a letter of demand to
MACRO/GALAXY demanding payment of their pending obligations in the total sum of P
l1,629,503.92, exclusive of interest.

5. On July 12, 1984, Benjamin Baens del Rosario, as a Notary Public for Quezon City, issued a
"Notice of Sale By Notary", scheduled for August 6, 1984, for the extrajudicial foreclosure sale of
the MACRO PROPERTY.

6. On August 2, 1984, MACRO filed the Complaint in the RTC CASE through Atty. Mario E.
Valderama, alleging principally that Go Cun Uy had no authority to mortgage the MACRO
PROPERTY and that his execution of the mortgage was due to fraudulent manipulations of
Complainant Bank. The Complaint further stated that MACRO was entitled "to actual damages
amounting to at least P50,000,000.00 as well as to compensatory damages." Preliminary
attachment was prayed for on "so much of the properties of defendant Bank and defendant
Notary as may be sufficient to satisfy any judgment that may be rendered against them. "

7. Four days thereafter, or on August 6, 1984, the Complaint was amended over the signature of
Respondent Grecia. The amendments are of no substantial relevance to this Resolution. The same
prayer for preliminary attachment was reiterated.

8. On the same date of August 6,1984, Respondent Judge, stating that the sale had not taken
place on that date, issued an Order temporarily restraining the Register of Deeds of Quezon City
from registering any Deed of Sale of the MACRO PROPERTY

9. Respondent Judge then resolved the RTC CASE through a summary judgment rendered on
November 16, 1984. In the Decision, the mortgage of the MACRO PROPERTY was declared null
and void, and Complainant Bank and Notary Public Del Rosario were ordered to pay MACRO more
than P33 million in damages plus 20% attorney's fees.

10. Further, paragraph 2 of the dispositive part of the Decision provided as follows:

2. The Register of Deeds of Quezon City to cancel immediately the registration and
annotation of the Deed of Real Estate Mortgage dated January 26, 1983, as well
as its foreclosure, notice of sale and certificate of sale on the Original Transfer
Certificate of Title No. 261842;

The foregoing paragraph 2 is of primary relevance to this Resolution. What will be noted therein
is that the owner's duplicate of TCT No. 261842, still in the possession of Complainant Bank, was
not declared cancelled. The continued existence of that owner's duplicate could prevent the
registration of a sale of the MACRO PROPERTY without it being surrendered to the Register of
Deeds as the law requires the production of the owner's duplicate certificate whenever any
voluntary instrument is presented for registration (Sec. 53, P.D. No. 1529, the Property
Registration Decree).
11. On December 7, 1984, Complainant Bank filed a Motion for Reconsideration of the summary
judgment.

12. Without ruling on Complainant Bank's Motion for Reconsideration, Respondent Judge, in an
Order dated January 7, 1985, amended paragraph 2 of his Decision, by directing the Register of
Deeds of Quezon City —

... to cancel immediately the registration of the Deed of real estate mortgage dated
January 24, 1983 on the back of TCT No. 261842 pursuant to the aforesaid
decision, and to issue in favor of the plaintiff another owner's copy of said transfer
certificate of title after said cancellation, in lieu of the copy in the possession of
the defendant-bank which is hereby deemed cancelled.

The amendment of paragraph 2 ordered the cancellation of the owner's duplicate of TCT No.
261842, in the possession of Complainant Bank, and the issuance of a new owner's duplicate of
said TCT to MACRO. Thus, MACRO was placed in a position to dispose of the MACRO PROPERTY.

13. (a) Seven days thereafter, or on January 14, 1985, MACRO sold the MACRO PROPERTY to
Falconi Marketing and Manufacturing, Inc. (FALCONI for short) for P6 million.

(b) On January 15, 1985, TCT No. 261842 was cancelled and TCT No. 326740 was issued in the
name of FALCONI.

14. On February 7, 1985, Respondent Judge denied Complainant Bank's Motion for
Reconsideration "not only for being pro forma but also for lack of merit." Upon receipt of the
corresponding Order on February 13, 1985, Complainant Bank filed a notice of appeal to the
Intermediate Appellate Court.

15. Consequent to the denial of the Motion for Reconsideration filed by Complainant Bank,
Respondent Judge, in his Order of February 13, 1985, considered his Decision in the RTC CASE
to be final and ordered the issuance of a Writ of Execution, which also constituted a denial of
Complainant Bank's appeal.

16. (a) On February 18, 1985, Complainant Bank came to this Court on Mandamus/Certiorari
(G.R. No. 69907), asking that Respondent Judge be ordered to allow its appeal from the Decision
rendered in the RTC CASE to the Intermediate Appellate Court and to annul the Order and Writ
of Execution he had previously issued.

(b) probably because of the Order of this Court restraining execution of the Decision in the RTC
CASE, Respondent Judge, on March 13, 1985, gave course to the appeal of Complainant Bank to
the Intermediate Appellate Court.

17. (a) On April 1, 1985, Complainant Bank caused a Notice of Lis Pendens to be annotated on
FALCONI's title.

(b) In G.R. No. 69907, this Court on May 31, 1985, set aside the Resolution of January 7, 1985
of Respondent Judge.
(c) On June 26, 1985, the Acting Register of Deeds of Quezon City denied the request of
Complainant Bank, invoking this Court's resolution in G.R. No. 69907, for the cancellation of TCT
No. 326740 in the name of FALCONI.

(d) Sometime in June, 1985, FALCONI instituted a Complaint against Complainant Bank and the
Register of Deeds of Quezon City for the cancellation of the Notice of Lis Pendens on its TCT No.
326740, which case is pending before the Regional Trial Court of Quezon City, Branch LXXXVI.

(e) On September 23, 1985, this Court in G.R. No. 69907, ordered the Register of Deeds (i) to
cancel the new owner's DUPLICATE OF TCT No. 261842; (ii) to restore the old TCT No. 261842,
with the annotated mortgage lien in favor of Complainant Bank; and (iii) to cancel TCT No. 326740
in the name of FALCONI.

Nothing in this Resolution should be construed as a determination of a factual issue in the


controversy between Complainant Bank and MACRO in the RTC CASE, which is now pending
before the Intermediate Appellate Court. This Resolution deals only with the steps taken by
Respondent Judge in regards to the RTC CASE when he was still acting on it. Considered in the
light of the facts related above, we find he had committed serious and grave misfeasance in
connection with his actuations in the said RTC CASE in that:

(a) In both original and amended Complaints in the RTC CASE, it was apparent that MACRO was
suing for an amount of at least P50 million. On the very date of August 6, 1984, when the
Amended Complaint was filed, which was only four days after the original Complaint was
instituted, Respondent Judge was already aware, per his Order of attachment, that MACRO "in
its verified complaint and affidavit", was asking defendants "to pay the sum of P50,000,000.00
as actual and compensatory damages which plaintiff seeks to recover from defendant in this
case."

In the original and amended Complaints, the prayers did not ask for damages specifically in the
sum of more than P50 million clearly in order to avoid payment of filing fees of more than
P100,000.00. The filing fee actually paid was only P210.00.

Ordinarily, a Trial Judge may be excused from immediately noting a mistake made by the Clerk
of Court in assessing filing fees. However, considering Respondent Judge's realization of the
mistake, on August 6, 1984, the date he issued his Order for preliminary attachment, and his
actuations thereafter in the RTC CASE, his failure to require payment of the correct amount of
filing fees indicated his partiality towards, not to say confabulation with, MACRO and/or its
lawyers.

(b) The summary judgment was ill-conceived. For one thing, the Amended Complaint had charged
Complainant Bank with fraud and deceit. Under the law, good faith is to be presumed, and the
fraud and deceit imputed to Complainant Bank cannot be other than a question of fact, which
should have been resolved after due reception of evidence pro and contra. There was nothing in
the Answer, and in its pleadings in connection with MACRO's Motion for summary judgment,
which could indubitably be deemed an admission, or proof, of Complainant Bank's alleged fraud
and deceit. Respondent Judge's statements to the contrary are bereft of veracity.
Worse errors have been committed by Trial Judges but, in the RTC CASE, the erroneous
promulgation of the summary judgment indicates, in the light of the entire scenario, that the
error was deliberate in order to favor plaintiff, or that it was in actual confabulation with plaintiff
and its lawyers.

(c) The issuance of the summary judgment was bad enough. The grant therein of damages in
the amount of more than P33 million, plus 20% attorney's fees, when the property involved in
the litigation was alleged in the amended complaint (Annex "F") as.P20 million (sold to FALCONI
for P6 million) immediately raises the thought that Respondent Judge had really taken a stand of
partiality in favor of MACRO and its lawyers.

(d) The Order of January 7, 1985 of Respondent Judge also shows his partiality to, or his
confabulation with MACRO and the latter's lawyers.

The summary judgment was rendered on November 16, 1984, and notice thereof was served on
Complainant Bank on November 26, 1984. The latter filed a Motion for Reconsideration on
December 6, 1984. If, as Respondent Judge has ruled, the Motion for Reconsideration was pro
forms the summary judgment became final on December 11, 1984. Respondent Judge, therefore,
would no longer have authority to amend his Decision on January 7. 1985. When the Motion for
Reconsideration was denied on February 7, 1985, Respondent Judge should also have set aside
his Order of January 7, 1985 amending the summary judgment. It can now become clear that
deferment of action on Complainant Bank's Motion for Reconsideration was precisely for the
purpose of allowing amendment of the Decision on January 7, 1985.

The Order of January 7, 1985 was set aside in G.R. No. 69907. It is now for us to state herein
that Respondent Judge, in issuing such Order, clearly intended to favor MACRO by allowing it to
sell, as it did sell, the MACRO property to FALCONI on January 14,1985.

(e) Respondent Judge, in his Order of March 13, 1985, gave course to the appeal of Complainant
Bank although he had already ruled that the latter had lost the right of appeal. That Order of
March 13, 1985 was issued after Complainant Bank had instituted G.R. No. 69907 on February
19, 1985, asking that Respondent Judge be ordered to allow its appeal from the summary
judgment. The Order of March 13, 1985 was clearly intended to render G.R. No. 69907 moot and
academic. Said Order was disrespectful of this Court. If at all, Respondent Judge should have
come to this Court in said G.R. No. 69907, to ask for leave to allow the appeal of Complainant
Bank with admission that he had realized that his previous denial of the appeal was erroneous.
And it may be recalled that, in De Leon vs. Castro, 104 SCRA 241 (1981), this Court had occasion
to state that Respondent's Judge's "submission of false certificates of service under Section 5 of
the Judiciary Law is not excusable."

WHEREFORE, the Court RESOLVES:

1. Respondent Judge is hereby ordered dismissed from the service, with forfeiture of all retirement
benefits and pay and with prejudice to reinstatement in any branch of the government or any of
its agencies or instrumentalities. This decision is immediately executory.

2. The Complaint for disbarment and suspension of respondent Atty. Benjamin M. Grecia is hereby
referred to the Solicitor General for investigation, report and recommendation. Let the relevant
pleadings in this case in regards to Respondent GRECIA, and relevant pleadings as well as the
Decision in G.R. No. 69907 be furnished the Solicitor General for the purpose.

SO ORDERED.

A.C. No. 3694 June 17, 1993

ALBERTO FERNANDEZ, ISABELO ONGTENGCO, ACHILLES BARTOLOME, AND ST.


LUKES MEDICAL CENTER, complainants,
vs.
ATTORNEY BENJAMIN M. GRECIA, respondent.

Norberto Gonzales for Fernandez.

Bu Castro for Ongtengco & Bartolome.

Quasha, Asperilla, Ancheta, Peña & Nolasco for St. Luke's Hospital.

Joaquin P. Yuseco for respondent Benjamin Grecia.

PER CURIAM:

This disbarment complaint against Attorney Benjamin M. Grecia was filed on August 20, 1991 by
Doctors Alberto Fernandez, Isabelo Ongtengco and Achilles Bartolome and the St. Luke's Medical
Center (hereafter "St. Luke's" for brevity) where they are accredited medical practitioners. The
respondent is charged with dishonesty and grave misconduct in connection with the theft of some
pages from a medical chart which was material evidence in a damage suit filed by his clients
against the aforenamed doctors and St. Luke's.

Disciplinary proceedings like this one are in a class by themselves. As we observed in In Re


Almacen, 31 SCRA 562,600, they are neither purely civil nor purely criminal. "Public interests is
the primary objective, and the real question for determination is whether or not the attorney is
still a fit person to be allowed the privileges as such." The purpose is "to protect the court and
the public from the misconduct of officers of the court" (In Re Montagne & Dominguez, 3 Phil.
577, 588), or to remove from the profession a person whose misconduct has proved him unfit to
be entrusted with the duties and responsibilities belonging to the office of an attorney (Ledesma
vs. Climaco, 57 SCRA 473; Atienza vs. Evangelista, 80 SCRA 338).

Disbarment is nothing new to respondent Grecia. On November 12, 1987, he was disbarred for
his immoral complicity or "unholy alliance" with a judge in Quezon City to rip off banks and
Chinese business firms which had the misfortune to be sued in the latter's court (Prudential Bank
vs. Judge Jose P. Castro and Atty. Benjamin M. Grecia [Adm. Case No. 2756], 155 SCRA 604).
Three years later, on December 18, 1990, the Court, heeding his pleas for compassions and his
promise to mend his ways, reinstated him in the profession. Only eight (8) months later, on
August 20, 1991, he was back before the court facing another charge of dishonesty and unethical
practice. Apparently, the earlier disciplinary action that the Court took against him did not
effectively reform him.

The complaint of St. Luke's against Attorney Grecia was referred by the Court to Deputy Court of
Administrator Juanito A. Bernad for investigation, report and recommendation. The following are
Judge Bernad's findings:

The late Fe Linda Aves was seven (7) months pregnant when she was admitted as a patient at
St. Luke's Hospital on December 20, 1990. She complained of dizziness, hypertension, and
abdominal pains with vaginal bleeding. Dr. Fernandez, head of the OB-GYNE Department of St.
Luke's, Dr. Ongtengco, Jr., a cardiologist, and Dr. Bartolome, a urologist, examined Mrs. Aves
and diagnosed her problem as mild pre-eclampsia (p. 63, Rollo). Five (5) days later, on Christmas
day, December 25, 1990, Mrs. Aves was discharged from the hospital, to celebrate Christmas
with her family.

However, she was rushed back to the hospital the next day, December 26, 1990. On December
27, 1990, she died together with her unborn child.

Blaming the doctors of St. Luke's for his wife's demise, Attorney Damaso B. Aves, along with his
three (3) minor children, brought an action for damages against the hospital and the attending
physicians of his wife. Their counsel, respondent Attorney Benjamin Grecia, filed a complaint
entitled: "Attorney Damaso B. Aves, et al. vs. St. Luke's Medical Center, Drs. Alberto Fernandez,
Isabelo Ongtengco, Jr. and Achilles Bartolome" in the Regional Trial Court of Valenzuela, Bulacan,
where it was docketed as Civil Case No. 3548-V and assigned to Branch 172, presided over by
Judge Teresita Dizon-Capulong.

On July 4, 1991, the medical records of Fe Linda Aves were produced in court by St. Luke's, as
requested by Attorney Grecia. The records were entrusted to the Acting Branch Clerk of Court,
Avelina Robles.

On July 16, 1991, between 8:30-9:00 o' clock in the morning, upon arriving in court for another
hearing of the case, Attorney Grecia borrowed from Mrs. Robles the folder containing the medical
records of Mrs. Aves.

While leafing through the folder, Grecia surreptitiously tore off two (2) pages of the medical
records. The respondent's act was notified by Mrs. Robles and Maria Arnet Sandico, a clerk. They
saw Grecia crumple the papers and place them inside the right pocket of his coat. He immediately
returned the folder to Mrs. Roblesa (who was momentarily rendered speechless by his audacious
act) and left the office.

Mrs. Robles examined the medical chart and found pages "72" and "73" missing. She ordered
Sandico to follow the respondent. Sandico saw Grecia near the canteen at the end of the building,
calling a man (presumably his driver) who was leaning against a parked car (presumably Grecia's
car). When the man approached, Grecia gave him the crumpled papers which he took from his
coatpocket. Sandico returned to the office and reported what she had seen to Mrs. Robles. The
latter in turn reported it to Judge Capulong. The three of
them — Judge Capulong, Mrs. Robles and Ms. Sandico — went downstairs. Ms. Sandico pointed
to Judge Capulong the man to whom Grecia had given the papers which he had filched from
medical folder of Linda Aves. Judge Capulong told Sandico to bring the man to her chamber. On
the way back to chamber, Judge Capulong saw the plaintiff, Attorney Damaso Aves, and St.
Luke's counsel, Attorney Melanie Limson. She requested them to come to her office.

In the presence of Attorneys Aves and Limson, Mrs. Robles, Ms. Sandico, and a visitor, Judge
Capulong confronted the man and ordered him to give her the papers which Grecia had passed
on to him. The man at first denied that he had the papers in his possession. However, when
Sandico declared that she saw Grecia hand over the papers to him, the man sheepishly took them
from his pants pocket and gave them to Judge Capulong. When the crumpled pages "72" and
"73" of the medical folder were shown to Sandico, she identified them as the same papers that
she saw Grecia hand over to the man.

After the confrontation, Sandicio and Robles went back to their office. Mrs. Robles collapsed in a
dead faint and was rushed to the Fatima Hospital where she later regained consciousness.

In the ensuing excitement and confusion of recovering the stolen exhibits, no one thought of
ascertaining the identity of the man from whom they were recovered. Judge Capulong belatedly
realized this, so she directed the Valenzuela Police to find out who he was. She also ordered
Sandico to submit a formal report of the theft of the exhibits to the police.

A police investigator, PO3 Arnold Alabastro, tried to ascertain the name of Grecia's driver who
was known only as "SID." He located Grecia's house in Quezon City. Although he was not allowed
to enter the premises, he was able to talk with a house maid. He pretended to be a cousin of
"SID" and asked for the latter. The housemaid informed him that "SID" was sent home to his
province by Grecia.

He talked with Grecia himself but the latter denied that he had a driver named "SID."

PO3 Alabastro also talked wit one of Grecia's neighbors across the street. The neighbor confirmed
that Grecia's driver was a fellow named "SID".

The incident caused enormous emotional strain to the personnel of Judge Capulong's court, so
much so that the Acting Branch Clerk of Court, Avelina Robles, was hospitalized. Because of the
incident, Judge Capulong inhibited herself from conducting the trial of Civil Case No. 3548-V.

On August 20, 1991, St. Luke's failed this disbarment case against Grecia.

At the investigation of the case by Judge Bernad, Attorney Damaso Aves, the surviving spouse of
the late Fe Linda Aves and plaintiff in Civil case No. 3548-V, testified that it was Attorney Bu
Castro, counsel of the defendants in said Civil Case No. 3548-V, who lifted two pages from the
medical folder which lay among some papers on top of the table of Acting Branch Clerk of Court
Robles. When he allegedly went outside the courthouse to wait for Attorney Grecia to arrive, he
noticed Attorney Castro come out of the building and walk toward a man in the parking lot to
whom he handed a piece of paper. Afterward, Attorney Castro reentered the courthouse.
Respondent Grecia denied any knowledge of the theft of the exhibits in the Aves case. He alleged
that the person who was caught in possession of the detached pages of the medical record was
actually "planted" by his adversaries to discredit him and destroy his reputation.

He denied that he had a driver. He alleged that his car was out of order on July 16, 1991, so he
was fetched by the driver of Attorney Aves in the latter's "Maxima" car. He arrived in the
courthouse at exactly 9:15 in the morning and went straight to the courtroom on the second floor
of the building. He did not leave the place until his case was called at 9:40. Since it was allegedly
a very warm day, he wore a dark blue barong tagalog, not a business suit. He branded the
testimony of Ms. Sandico as an absolute falsehood. He alleged that he would not have done the
act imputed to him, because the medical chart was the very foundation of the civil case which he
filed against St. Luke's and its doctors. He wondered why the man, alleged to be his driver, to
whom he supposedly gave the detached pages of the medical chart, was neither held nor
arrested. His identity was not even established.

He likewise branded the testimony of Police Investigator Alabastro as a fabrication for he had
never seen him before.

He underscored the fact that none of the lawyers in the courthouse, nor any of the court
personnel, accosted him about the purloined pages of the medical record and he alleged that the
unidentified man remained in the courtroom even after the confrontation in the Judge's chamber.

In evaluating the testimonies of the witnesses, Judge Bernad found the court employee, Maria
Arnie Sandico, and Acting branch Clerk of Court Avelina Robles entirely credible and "without any
noticeable guile nor attempt at fabrication, remaining constant even under pressure of cross
examination" (p. 11, Judge Bernad's Report).

That the Acting Branch Clerk of Court, Mrs. Robles, who is not even a lawyer, and her lowly clerk,
Ms. Sandico, did not promptly raise a hue and cry on seeing Grecia tear off two pages of the
medical record, was understandable for they hesitated to confront a man of his stature.
Nevertheless, they had the presence of mind to immediately report the matter to their Judge who
forthwith took appropriate steps to recover the exhibits. Robles, Sandico and PO3 Alabastro had
absolutely no motive to testify falsely against the respondent.

While Judge Capulong took the blame for failing to ascertain the identity of Attorney Grecia's
"driver," her swift action in summoning and confronting him led to the recovery of the stolen
pages of the medical chart.

Unfortunately, the inquiry made by Police Investigation Arnold Alabastro into identity of the man
was fruitless for he was never seen again.

Attorney Aves' allegation that it was St. Luke's counsel, Attorney Castro, not Grecia, who stole
the pages from the medical folder and slipped them to an unidentified man, is an incredible
fabrication. Not only is it directly contradicted by Mrs. Robles and Ms. Sandico, but, significantly,
Attorney Aves failed to mention it during the confrontation with the man inside Judge Capulong's
chamber where he (Attorney Aves) was present.
His other allegation that he saw the man inside the courtroom afterwards, is not credible for he
would have called the attention of Judge Capulong who, he knew, had been looking for the man
to ascertain his identity.

In view of his obvious bias for his counsel, Aves' testimony was properly disregarded by the
investigator, Judge Bernad. Likewise wanting in truth and candor was Grecia's testimony. Judge
Bernad noted that while Grecia was punctilious when testifying on the hour of his arrival in court
(9:15 A.M.) on July 16, 1991, and he even remembered that on that day he wore a dark blue
barong tagalog (an apparel that has no pockets), his memory was not sharp when he was cross-
examined regarding more recent events. For instance, he insisted that Judge Bernad was absent
on August 4, 1992, but the truth is that a hearing was held on that date as shown by the
transcript.

When he was confronted with exhibits "A" and "B," Grecia tried to make an issue of the absence
of a court order to deposit Linda Aves' medical chart in court. He forgot that it was he who asked
that the chart be left with the clerk of court.

His allegation that he would be the last person to remove pages 72 and 73 of the medical chart
for the entries therein are favorable to his client's cause is specious. As a matter of fact, the
entries show that after Mrs. Aves was readmitted to the hospital on December 26, 1990, the
doctors were able to stabilize her blood pressure with a normal reading of 120/80.

On the basis of the evidence presented before Judge Bernad, the Court is convinced that the
charge against Attorney Benjamin M. Grecia is true. By stealing two pages from Linda Aves'
medical chart and passing them on to his driver, he violated Rule 1.01, canon 1 of the Rules of
Professional Responsibility as well as canon 7 thereof which provide that:

Canon 1. . . .

Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral and
deceitful conduct.

Canon 7. A lawyer shall at all times uphold the integrity and dignity of the legal
profession and support the activities of the Integrated Bar.

A lawyer is an officer of the courts; he is "like the court itself, an instrument or agency to advance
the ends of justice" (People ex rel Karlin vs. Culkin, 60 A.L.R. 851, 855). An incorrigible practitioner
of "dirty tricks," like Grecia would be ill-suited to discharge the role of "an instrument to advance
the ends of justice."

The importance of integrity and good moral character as part of a lawyer's equipment in the
practice of his profession has been stressed by this Court repeatedly.

. . . The bar should maintain a high standard of legal proficiency as well as of


honesty and fair dealing. Generally speaking, a lawyer can do honor to the legal
profession by faithfully performing his duties to society, to the bar, to the courts
and to his clients. To this end, nothing should be done by any member of the legal
fraternity which might tend to lessen in any degree the confidence of the public in
the fidelity, honesty and integrity of the profession. (Marcelo vs. Javier, Sr., A.C.
No. 3248, September 18, 1992, pp. 13-14.)

. . . . The nature of the office of an attorney at law requires that he shall be a


person of good moral character. This qualification is not only a condition precedent
to admission to the practice of law; its continued possession is also essential for
remaining in the practice of law, in the exercise of privileges of members of the
Bar. Gross misconduct on the part of a lawyer, although not related to the
discharge of professional duties as a member of the bar, which puts his moral
character in serious doubt, renders him unfit to continue in the practice of law.
(Melendrez vs. Decena, 176 SCRA 662, 676.)

. . . public policy demands that legal work in representation of parties litigant


should be entrusted only to those possessing tested qualifications and who are
sworn to observe the rules and the ethics of the profession, a s well as being
subject for judicial disciplinary control for the protection of court, clients and the
public. (Phil. Association of Free Labor Unions [PAFLU] vs. Binalbagan Isabela
Sugar Company, 42 SCRA 302, 305.)

By descending to the level of a common thief, respondent Grecia has demeaned and disgraced
the legal profession. He has demonstrated his moral unfitness to continue as a member of the
honorable fraternity of lawyers. He has forfeited his membership in the BAR.

Generally, a lawyer may be disbarred or suspended for any misconduct, whether


in his professional or private capacity, which shows him to be wanting in moral
character, in honesty, probity and good demeanor or unworthy to continue as an
officer of the court, or an unfit or unsafe person to enjoy the privileges and to
manage the business of others in the capacity of an attorney, or for conduct which
tends to bring reproach on the legal profession or to injure it in the favorable
opinion of the public. (Marcelo vs. Javier, Sr., A.C. No. 3248, September 18, 1992,
p. 15.)

WHEREFORE, the Court finds Attorney Benjamin Grecia guilty of grave misconduct, dishonesty,
and grossly unethical behavior as a lawyer. Considering that this is his second offense against the
canons of the profession, the Court resolved to impose upon him once more the supreme penalty
of DISBARMENT. His license to practice law in the Philippines is hereby CANCELLED and the Bar
Confidant is ordered to strike out his name from the Roll of Attorneys.

SO ORDERED.

A.M. No. 94-1-061-SC March 29, 1995

ATTY. JOAQUIN YUSECO and BENJAMIN GRECIA, complainants,


vs.
DEPUTY COURT ADMINISTRATOR JUANITO A. BERNAD, respondent.
MENDOZA, J.:

This complaint was filed by Atty. Joaquin Yuseco and Benjamin Grecia against Deputy Court
Administrator Juanito A. Bernad, charging him with suppressing facts and making false
statements in his report to the Court in the disbarment case against complainant Grecia for the
purpose of causing injury to him (Grecia).

The complaint for disbarment against Grecia was filed by Doctors Alberto Fernandez, Isabelo
Ongtengco and Achilles Bartolome and the St. Luke's Medical Center who charged him with
dishonesty and grave misconduct in connection with the theft of some pages of a medical chart
used in evidence in a damage suit1 filed by Grecia's clients against the doctors and the hospital.
The disbarment case2 was assigned to respondent Bernad for investigation, report and
recommendation.3 On December 18, 1992,4 respondent submitted report in which Bernad found
therein respondent Benjamin Grecia guilty of the charges. Bernad refrained from recommending
the penalty but instead left the matter to the Court to determine, observing that whether the
penalty should be disbarment or suspension, the two are "severe forms of disciplinary action
[which] should be resorted to only in cases where a lawyer demonstrates an attribute or course
of conduct wholly inconsistent with approved professional standard."5

On June 17, 1993, the Court rendered a decision in which it adopted the findings of respondent
and ordered the disbarment of complainant Benjamin Grecia.6

Grecia filed a motion for new investigation and reconsideration but his motion was denied by the
Court in its resolution of August 12, 1993.7 He later sought reconsideration.

Grecia also moved for the reconsideration of the resolution of July 27, 1993 which denied his
motion for extension to file a motion for reconsideration and directed the entry of final judgment.
But in its resolution of October 19, 1993,8the Court denied both motions of the complainant and
reiterated its resolution directing entry of final judgment.

Benjamin Grecia and his counsel in the disbarment case, Atty. Joaquin Yuseco, thereafter filed
this complaint for "falsification by a public officer" as defined in Art. 171 of the Revised Penal
Code and for violation of §3(e) of the Anti-Graft and Corrupt Practices Act (Rep Act. No. 3019)
with the Office of the Ombudsman. This Court, taking cognizance of the complaint against Deputy
Court Administrator Juanito A. Bernad, required him to comment.

On August 25, 1994, the Office of the Ombudsman dismissed the complaint on the ground that
it was based on matters already decided by this Court in the disbarment case.

Complainants charge respondent with (1) submitting a report and recommendation to this Court
in the disbarment case without furnishing complainant Benjamin Grecia with a copy thereof; (2)
falsifying his written report by narrating facts which are absolutely false; (3) deliberately not
revealing his relationship with former Chief Justice Marcelo Fernan, whose brother-in-law, Atty.
Pompeyo Nolasco of the Quasha law firm, is the counsel for complainant-doctors in the
disbarment case as well as in Civil Case No. 3548-V-91 which Grecia had filed against the doctors
and the hospital.
We have considered the grounds of the complaint and found them to be without merit.
Accordingly we have resolved to dismiss the complaint.

First. Respondent had no duty to complainant to furnish him a copy of his report in the disbarment
case. That report was submitted to the Court solely for its use.9 It was the decision of the Court,
in connection with which the report was required, that complainant Grecia, as respondent in the
disbarment proceeding, was entitled to receive. What was important was that he was given a
copy of the Court's decision ordering his disbarment and not that a copy of respondent's report
be furnished to him.

Second. Complainants cite fourteen (14) cases or instances in which respondent allegedly made
false statements in his report to the Court. These instances, however, are the same ones cited in
complainant Grecia's motion for new investigation and reconsideration which this Court denied
way back on August 12, 1993.

This is shown by the following table, with indication of the corresponding pages of the complaint
and the Motion for New Investigation and Reconsideration filed in the disbarment case (Adm.
Case No. 3694).

Page No. Page No.


No. Allegations against Bernad OMB-93- Adm. Case
3223 No. 3694
1 ATTY. GRECIA HAS NO REASON 5(A) 14(B.2)
OR MOTIVE TO REMOVE OR
DETACH THE ALLEGED PAGES 72
AND 73 OF THE MEDICAL CHART
BECAUSE THE ENTRIES AND
CONTENTS THEREOF ARE
MATERIAL AND FAVORABLE TO
THE CLAIM OF HIS CLIENTS
AGAINST COMPLAINANTS.
2 THE CORRUPT PRACTICES AND 7(B) 10(A.1)
UNHOLY ALLIANCE OF JUDGE
BERNAD.
3 MASSIVE SUPPRESSION OF 9(C) 16(C)
WHOLE BODY OF EVIDENCE
DECISIVE OF THE INNOCENCE
OF ATTY. GRECIA.
4 JUDGE BERNAD SUPPRESSED AND 21(D) 28(C.9)
WITHHELD FROM THE COURT THE
STRONG AND POSITIVE DECLARA-
TION OF JUDGE TERESITA
CAPULONG THAT ATTY. GRECIA
WAS NOT PRESENT WHEN THE
ALLEGED INCIDENT HAPPENED
AND THAT SHE DID NOT ASK HIM
TO EXPLAIN ANYTHING.
5 JUDGE BERNAD SUPPRESSED AND 22(E) 30(C.10)
WITHHELD FROM THE COURT THE
ADMISSION OF COMPLAINANTS'
LAWYER, ATTY. BU CASTRO, THAT
HE WAS THE ONE WHO BORROWED
THE MEDICAL CHART AND NOT
ATTY. GRECIA.
6 JUDGE BERNAD SUPPRESSED THE 25(F) 32(C.11)
FACT THAT THERE WAS NO
CONFUSION AND THAT THE MAN
FROM WHOM JUDGE CAPULONG
ALLEGEDLY GOT THE PAGES OF
MEDICAL RECORD STAYED IN THE
COURTROOM FOR SOMETIME BUT
NEITHER THE CLERK, THE JUDGE
NOR THE LAWYERS OF THE
COMPLAINANTS CAUSED HIS
ARREST, FILED A MOTION FOR
CONTEMPT OR GOT HIS NAME
AND FULL IDENTITY.
7 JUDGE BERNAD CRIMINALLY 29(G) 36(C.12)
SUPPRESSED AND WITHHELD
THE FACT THAT NO COMPLAINT
AND NO AFFIDAVIT WAS FILED
IN THE CASE AND THAT THE
RECORDS OF CIVIL CASE NO.
3548-V-91 DO NOT CONTAIN ANY
REPORT, AFFIDAVIT OR
COMPLAINT OR INFORMATION
ON AN ALLEGED UNTOWARD
INCIDENT.
8 JUDGE BERNAD SUPPRESSED 31(H) 38(C.13)
THE FACT THAT LONG AFTER
THE ALLEGED INCIDENT, THE
QUASHA LAW OFFICE GOT
BACK THE MEDICAL CHART
WITHOUT ANY PROTEST OR
RESERVATION THAT ANY
PAGE OR PAGES THEREOF WERE
LOST, DETACHED, TORN OR
CRUMPLED.
9 JUDGE BERNAD DID NOT EXERT 32(I) 39(C.14)
EFFORT TO HAVE THE MYSTERY
MAN PRODUCED BEFORE HIM
SO HE CAN BE CONFRONTED. HE
ALONE CAN PROVE WHAT PAPER
OR PAPERS WERE GIVEN TO HIM
AND WHO GAVE IT TO HIM.
10 EVIDENCE OF SIMILAR ACT OF 37(J) 39(C.15)
PLANTING EVIDENCE BY THE
QUASHA LAW OFFICE WAS
SUPPRESSED BY JUDGE BERNAD.
11 THE POLICE HAS RECENTLY 37(K) 2
GOTTEN HOLD OF THIS
EXTREMELY VITAL WITNESS,
THE "UNIDENTIFIED MAN"
MENTIONED IN THE DECISION
OF THE SUPREME COURT.
12 JUDGE BERNAD SUPPRESSED 43(L) 43(C.16)
AND DID NOT INCLUDE IN HIS
FINDINGS THE FOLLOWING
FACTS WHICH ARE DECIDEDLY
DESTRUCTIVE OF HIS
ABSOLUTELY FALSE FINDINGS
OF FACTS: No one identified pages
72 and 73 of the medical chart as the
one detached; pages 72 and 73 were
not yet marked as exhibits of any party
on July 16, 1991; no evidence was
offered to link respondent to the
unidentified man, etc.
13 JUDGE BERNAD FAILED TO HAVE 51(M) 51(D)
THE MAN TO WHOM THE
ALLEGED PAGES OF THE MEDICAL
REPORT WERE ALLEGEDLY
HANDED LOCATED AND BROUGHT
TO HIM FOR QUESTIONING.
14 EVIL MOTIVE BEHIND THE 52(N) 9(A)
COMPLAINT AGAINST ATTY.
GRECIA.

Indeed, Grecia's complaint is nothing but an attempt to circumvent the resolution of this Court
declaring the decision in the disbarment case final.

Third. What complainants must know is that while the Court in the disbarment case agreed with
much of what was contained in the report of the Deputy Court Administrator, it did so only after
it had examined the record of the case and found the report to be in accordance with the
evidence. To the extent that the Court agreed with the findings of respondent, his findings
became those of the Court and complainants have no basis for charging suppression of material
facts. Indeed, "the Court assumes full responsibility for all its acts. Its personnel cannot answer
and should not be made to answer for acts of the Court." 10 It is presumptuous for complainants
to presume that because of alleged omissions and suppression of material facts in the report the
Court was thereby misled in its decision.

The truth is that even a cursory examination of the grounds alleged in the present complaint will
show the utter baselessness of the charges. Complainants' allege —

[1] Respondent did not include or mention in the slightest degree the contents and
handwritten entries in the stolen pages which show beyond doubt that they were
favorable to Grecia's clients.

This allegation is made in an effort to show that Grecia had no motive in stealing the pages. This
defense might be considered if there was no evidence that Grecia had been seen removing the
pages. But the fact is that two witnesses, who are personnel of the RTC in which the case was
being heard, pointed to Grecia as the person who had removed two pages of the medical chart.

[2] Respondent suppressed the testimony of Judge Capulong that Grecia was not
present when the incident happened.

Judge Teresita Dizon-Capulong, before whom the case was pending at the time of the incident,
did not testify that complainant was not present at the time of the incident. What she said was
that she "could not see Atty. Grecia" during the confrontation with the unidentified person found
in possession of the stolen pages. Judge Capulong's testimony did not exculpate Grecia. To the
contrary, according to Judge Capulong, it was either Mrs. Avelina Robles, from whom Grecia
allegedly got the medical chart, or Ms. Sandico, another court personnel who saw Grecia tear off
the pages, who reported to her that Grecia had pulled pages of the medical record. 11

[3] Respondent suppressed the fact that it was the lawyers of complainants in the
disbarment case who had secured a falsified document and passed it off as the
missing pages which were recovered from an unidentified person.
There was no credible evidence presented in the disbarment proceedings to prove this allegation.
The alleged discrepancy with respect to appearance and numbering of the stolen pages between
the original copies and the photocopies was more apparent than real. It was mentioned in
respondent's report but given no weight in view of the satisfactory explanation given by the
personnel of St. Luke's who prepared the original copy and caused the numbering of the pages
to be made in accordance with standard procedure. 12

[4] Respondent suppressed the material contradictions in the testimony of the two
court personnel and the inherent impossibility of their testimony due to the
arrangement of the chairs, tables, desk, etc., that completely obstructed their view
and sight. Respondent also wrongfully withheld pictures which show their relative
positions.

Contrary to complainants' claim, there were no material contradictions in the testimonies of the
court personnel. Their testimonies were spontaneous and direct to the point, which make them
credible and truthful.13 On the other hand, the pictures submitted by Grecia do not show that the
witnesses could not have seen him in the act of detaching the pages. The arrangement of the
chairs, tables and desks did not obstruct the view of the inside of the court. Anyone sitting on
any of the chairs could easily be seen from any part of the court.

[5] Respondent suppressed the admission of Mrs. Robles on cross-examination


that she did not see Grecia removing the pages from the medical record.

The records contain no such admission by Mrs. Robles. Nowhere in the report of the hearings
conducted, particularly the hearing of August 4, 1992 when Mrs. Robles testified, does it appear
that Mrs. Robles contradicted her earlier testimony that she had seen Grecia removing two pages
of the medical chart. To the contrary, together with Ms. Sandico, Mrs. Robles stoutly maintained
that it was Grecia who had detached the pages.

[6] Respondent suppressed and withheld from the court the admission of
complainants' lawyer, Atty. Bu Castro, that he was the one who borrowed the
medical chart and not Atty. Grecia.

It was unnecessary to mention this considering that according to Mrs. Robles, the official
custodian of the report, both Atty. Castro and Grecia had separately borrowed the report. What
was important was that there was direct testimony as to who was responsible for tearing off the
pages.

[7] Respondent suppressed the fact that there was no confusion and that the man
from whom Judge Capulong allegedly got the pages of the medical record stayed
in the courtroom for sometime but neither the clerk, the judge nor the lawyers of
the complainants caused his arrest, filed a motion for contempt, or got his name
and full identity.

This is not true. The removal of pages of the medical report created a commotion in the court as
a result of which Mrs. Robles fainted and she had to be taken to the hospital. The records show
this happened after the stolen pages had been recovered and the incident was reported to the
police at the instance of Judge Capulong. Mrs. Robles, Ms. Sandico and Judge Capulong gave
testimonies about the incident to respondent Bernad at the hearing of the disbarment case.

[8] Respondent criminally suppressed and withheld the fact that no complaint and
no affidavit was filed in the case and that the records of Civil Case No. 3548-V-91
do not contain any report, affidavit or complaint or information on the alleged
untoward incident.

There was no evidence in the record of the disbarment case to show the supposed lack of
complaint against Grecia or the unidentified person as a result of the incident. Accordingly no
such "fact" could have been mentioned in the report. Nor was it material that there was allegedly
no complaint made of the attempt to destroy evidence by the removal of certain pages of the
medical record. Judge Capulong explained that she and the court personnel were so unnerved by
the incident that they failed to get the name of the person from whom they recovered the missing
pages and charge him in court. The Judge testified, however, that she instructed Ms. Sandico to
report the matter to the police.

Nor is there truth to the claim of the complainants that no report or information regarding the
incident was mentioned in the damage suit, Civil Case No. 3548-V-91. In her orders dated July
16, 1991 and July 23, 1991, Judge Capulong specifically mentioned the "untoward incident" which
she explained in her testimony to be the incident involving the tearing off of pages of the medical
chart.

[9] Respondent suppressed the fact that long after the alleged incident, the
Quasha Law Office got back the medical chart without any protest or reservation
that any page or pages thereof were lost, detached, torn or crumpled.

Whether the medical record was intact and received by the law office without protest that it was
not complete is immaterial to the charge against complainant Grecia. The issue against him was
the removal, not the recovery, of the pages in question.

[10] Respondent did not exert effort to have the mystery man produced before
him so he can be confronted. He alone can prove what paper or papers were given
to him and who gave it to him. He did not seek the help of the National Bureau of
Investigation to find the unidentified person.

Respondent did not have a duty to bring the unidentified man before him. That was the duty of
the parties to the case. His job was to make findings on the basis of evidence submitted to him.
On the basis of such evidence Grecia was found to have torn off the pages and later given them
to the unknown person.

[11] Respondent withheld evidence of similar act of planting evidence by the


Quasha Law Office.

This is not true. On page 15 of his report respondent stated:

These statements of Atty. Yuseco were controverted by the lawyers from the
Quasha Law Office who asserted that in the Tan Ping Hok case, there was no
eyewitness to sustain the charge of evidence planting, while in the instant case,
there are two eyewitnesses who are judicial personnel and whose integrity as
witnesses was never doubted nor put in issue by both parties.

[12] Respondent suppressed and did not include in his findings the following facts
which are decidedly destructive of his absolutely false findings of facts:

a. No one identified the stolen pages as the ones which had been
detached.

This allegation is false. At the hearing held on August 4, 1992, the pages were identified by Mrs.
Robles as those which had been filched by Grecia and later recovered from the unidentified
person. They were marked as Exhibits A and B. 14

b. The testimony of Damaso Aves that he saw Atty. Castro holding


the medical record and later hand a piece of paper to the
unidentified person.

The testimony of Aves was accounted for in respondent's report, although respondent did not
give it much weight for the following reason stated in his report:

Assuming arguendo that the unidentified man accosted and confronted by Judge
Capulong was the man actually seen by Atty. Aves receiving the questioned papers
from Atty. Castro, it is rather surprising why Atty. Aves did not mention such
incident to Judge Capulong during the meeting in her chambers. And instead of
simply insisting that nobody, but nobody, took interest in detaining the unidentified
man and establishing his identity, why did not Atty. Aves take such initiative
considering that he has as much interest in establishing the identity of that person?
Moreover, from among those concerned, he alone had the opportunity to observe
that the unidentified man was still present in the courtroom even after the
confrontation in the chamber of Judge Capulong.

[13] Respondent failed to reveal the evil motive behind the complaint against
Grecia. This motive originated from Grecia's successful cross-examination of the
doctors who were the defendants in the case for damages from whom damaging
admissions were elicited.

This was mentioned although again it was not believed by respondent. On page 15 of his report,
respondent Bernad stated:

On the purported scheme to destroy respondent Atty. Grecia, this has something
to do with the hearing on June 24, 1991 where the latter succeeded in calling Dr.
Alberto Fernandez to the witness stand as his hostile witness and allegedly elicited
from him damaging admissions over the vigorous objections of Atty. Bu Castro. A
perusal of the transcript of stenographic notes taken during the hearing (Exhibits
"E to E-42", pp. 219 to 261, ibid) do not, however, show such fiasco.
Fourth. Complainants allege that respondent Bernad is a close personal friend of Atty. Pompeyo
Nolasco, counsel of the complainants in the disbarment case against Grecia, and that because of
this Bernad's objectivity and impartiality were in "grave doubt and in serious question."

Atty. Nolasco is a brother-in-law of former Chief Justice Marcelo B. Fernan. While acknowledging
his gratitude to the former Chief Justice for appointing him to his present position, respondent
denies that he is beholden to the former Chief Justice or that he maintains "fellowship" with him
and Atty. Nolasco. As respondent points out, the fact was that the disbarment case was assigned
to him three months after Chief Justice Fernan had retired from the Court. Indeed, aside from
this allegation, there is no evidence in the record to support the charge of complainants.

In conclusion, we find no basis for the charge that respondent suppressed material facts in his
report which this Court adopted in its decision disbarring complainant Grecia. What complainants
charge as suppressions in the report are in reality omissions of facts which in the exercise of
sound judgment were found to be immaterial. Complainants confuse appreciation of evidence
with suppression of facts. The so-called omissions are the inevitable result of the evaluation of
the evidence — the sifting of the grain from the chaff — rather that the suppression of truth.

WHEREFORE, the complaint is DISMISSED.

SO ORDERED.

G.R. No. 187257

REPUBLIC OF THE PHILIPPINES, represented by the OFFICE OF THE SOLICITOR


GENERAL (OSG) as the PEOPLE'S TRIBUNE, and the NATIONAL POWER
BOARD, Petitioners
vs.
HON. LUISITO G. CORTEZ, Presiding Judge, Regional Trial Court, Branch 84, Quezon
City, ABNER P. ELERIA, MELITO B. LUPANGCO, NAPOCOR EMPLOYEES
CONSOLIDATED UNION (NECU), and NAPOCOR EMPLOYEES AND WORKERS UNION
(NEWU), Respondents

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

G.R. No. 187776

ROLANDO G. ANDAYA, in his capacity as Secretary of the Department of Budget and


Management and member of the Board of Directors of the National Power
Corporation, Petitioners,
vs.
HON. LUISITO G. CORTEZ, Presiding Judge, Regional Trial Court, Branch 84, Quezon
City, ABNER P. ELERIA, MELITO B. LUPANGCO, NAPOCOR EMPLOYEES
CONSOLIDATED UNION and NAPOCOR EMPLOYEES AND WORKERS
UNION, Respondents.
DECISION

LEONEN, J.:

The implementation of Republic Act No. 6758 resulted in the integration of all allowances
previously received, including Cost of Living Allowance and Amelioration Allowance, into the basic
standardized salary. When a government entity ceases to be covered by Republic Act No. 6758,
the new position classification and compensation plan must also include all allowances previously
received in the basic salary, in line with the principle of non-diminution of pay.

This is a consolidated case resulting from a Petition for Mandamus filed by the president of the
National Power Corporation Employees Consolidated Union (NECU) and the president of the
National Power Corporation Employees and Workers Union (NEWU) before the Regional Trial
Court, Branch 84, Quezon City.1 The Petition sought to direct the National Power Corporation
(NAPOCOR), its President and its Board of Directors to release and pay the Cost of Living
Allowance (COLA) and Amelioration Allowance (AA) to all NAPOCOR employees beginning July 1,
1989 to March 16, 1999.2 The Petition for Mandamus was granted by the trial court and the
NAPOCOR was ordered to pay a total of ₱6,496,055,339.98 as back payment for COLA and AA
with an additional ₱704,777,508.60 as legal interest.3

NAPOCOR was created under Commonwealth Act No. 1204 as a government-owned and
controlled corporation. Under the law, its National Power Board was authorized to fix the
compensation of its officers and employees.5

In 1976, a salary standardization and compensation plan for public employees, including that of
government-owned and controlled corporations, was enacted through Presidential Decree No.
985.6 The Decree likewise provided that notwithstanding the standardization and compensation
plan, additional incentives may be established by government-owned and controlled corporations
from their corporate funds.7 Pursuant to the Decree, then President Ferdinand E. Marcos issued
Letter of Implementation No. 97,8 granting additional financial incentives to employees of
government-owned and controlled corporation performing critical functions, among which was
NAPOCOR.9 The additional incentives included COLA and AA.10

On August 21, 1989, Congress enacted Republic Act No. 6758, or the Compensation and Position
Classification Act of 1989, to standardize compensation and benefits of public employees,
effective July 1, 1989.11 The law applied to all positions, whether appointive or elective, including
those in government-owned and controlled corporations.12The law also provided that all
allowances and other additional compensation not otherwise stated "shall be deemed
included"13 in the prescribed standardized salary rates. Section 12 reads:

Section 12. Consolidation of Allowances and Compensation. - All allowances, except for
representation and transportation allowances; clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be determined by the DBM, shall be deemed
included in the standardized salary rates herein prescribed. Such other additional compensation,
whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated
into the standardized salary rates shall continue to be authorized.
Existing additional compensation of any national government official or employee paid from local
funds of a local government unit shall be absorbed into the basic salary of said official or employee
and shall be paid by the National Government.

On October 2, 1989, the Department of Budget and Management issued Corporate Compensation
Circular No. 10 (DBM-CCC No. 10),14 which provided for the integration of COLA, AA, and other
allowances into the standardized salaries of public employees effective November 1, 1989.15

On April 5, 1993, Congress enacted Republic Act No. 7648, or the Electric Power Crisis Act of
1993, allowing the President of the Philippines to upgrade the compensation of NAPOCOR
employees "at rates comparable to those prevailing in privately-owned power utilities[.]"16

Pursuant to Republic Act No. 7648, then President Fidel V. Ramos issued Memorandum Order No.
19817 providing for a different position classification and compensation plan for NAPOCOR
employees to take effect on January 1, 1994.18

On August 12, 1998, this Court promulgated De Jesus v. Commission on Audit,19 which found
DBM-CCC No. 10 ineffective for lack of publication in the Official Gazette or in a newspaper of
general circulation.20 Thus, the circular only became effective on March 16, 1999.21

In Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 v. Commission on
Audit,22 this Court recognized that the ineffectivity of DBM-CCC No. 10 from July 1, 1989 to March
16, 1999 created a "legal limbo" wherein the COLA and AA were "not effectively integrated into
the standardized salaries."23 Hence, during the period of the legal limbo, affected employees
would be entitled to receive the two allowances:

To stress, the failure to publish DBM-CCC No. 10 meant that the COLA and the amelioration
allowance were not effectively integrated into the standardized salaries of the PPA employees as
of July 1, 1989. The integration became effective only on March 16, 1999. Thus, in between those
two dates, they were still entitled to receive the two allowances.24

On December 28, 2007, Abner P. Eleria, president of NECU, and Melito B. Lupanggo, president
of NEWU, filed a Petition for Mandamus with the Regional Trial Court of Quezon City, Branch 84,
praying that NAPOCOR be ordered to release the COLA and AA due them.25 NECU and NEWU
filed their Motion for Leave of Court to file a Petition-in-Intervention, which was granted by the
trial court on March 14, 2008.26 The trial court consolidated the petitions and treated them as a
class suit.27

NECU and NEWU alleged that they requested NAPOCOR to release their COLA and AA on March
12, 2006.28NAPOCOR subsequently created a Committee29 "to study ... the grant of [the]
additional allowances[.]"30

On May 28, 2007, the Committee issued a Certification that the COLA and AA were not integrated
into the salaries of NAPOCOR employees hired from July 1, 1989 to March 16, 1999.31 NAPOCOR
"thereafter referred the matter to the Department of Budget and Management[.]"32

On September 18, 2007, then Secretary of Budget and Management Rolando Andaya, Jr.
(Secretary Andaya, Jr.) wrote a letter to NAPOCOR stating that the determination of whether the
COLA and AA were factually integrated rested with it since the payment of the allowances did not
require the prior approval of the Budget and Management Secretary.33

NECU and NEWU again requested the release of their COLA and AA pursuant to Secretary Andaya,
Jr.'s letter. NAPOCOR again referred the matter to the Committee for further study. Due to the
continued refusal of NAPOCOR to release the allowances, NECU and NEWU were constrained to
file the Petition for Mandamus.34

In its Consolidated Comment before the trial court, the Office of the Solicitor General, on behalf
of NAPOCOR, alleged that the Notice of Position Allocation and Salary Adjustment (NPASA) of
employees should be examined to find out if the COLA and AA were nevertheless integrated into
the salaries despite the ineffectivity of DBM-CCC No. 10. The affected employees must also show
that they suffered a diminution of pay as a result of its implementation. The Office of the Solicitor
General likewise pointed out that the COLA and AA were not among those allowances specifically
excluded in Section 12 of Republic Act No. 6758 and thus were deemed to have been included in
the standardized salary rates.35

In their Reply with Motion for Judgment on the Pleadings before the trial court, NECU and NEWU
submitted the following documents to prove right to COLA and AA:

a. Letter of [NPC President] Del Callar dated October 9, 2007 categorizing the workers/employees
of the NAPOCOR into three groups, viz:

a. l NPC employees who were incumbent as of June 30, 1989 are no longer entitled to their COLA
and AA from July 1, 1989 to December 31, 1993 since said allowances have been factually
integrated into their salaries but entitled to COLA and AA from January 1, 1994 to March 15,
1999;

a.2 NPC employees hired between July 1, 1989 and December 31, 1993 are entitled to COLA and
AA since said benefits were not factually integrated into their salaries from their date of
employment up to March 15, 1999; and

a.3 NPC employees as of January 1, 1994 to March 15, 1999 are entitled to COLA and AA from
their date of employment up to March 15, 1999.

b. Certification issued by Mr. Alexander P. Japon, NPC's Senior Finance Department Manager
dated April 22, 2008 admitting its obligation to pay COLAs and AAs due the NPC
workers/employees as well as certifying the availability of funds in the amount of ₱8.5 Billion for
the purpose and pursuant to DBM CCC No. 12; and

c. Letter of [NPC President] Del Callar dated April 23, 2008 to the NAPOCOR Board certifying the
NPC stand to pay the COLA and AA to the workers/employees.36 (Citations omitted)

The Office of the Solicitor General filed an Omnibus Motion seeking to withdraw its appearance
as counsel for NAPOCOR and asking for leave to intervene as the People's Tribune. The Motion
stated that the position taken by NAPOCOR ran counter to the Office of the Solicitor General's
stand that the COLA and AA were already integrated into the standardized salaries.37
The Department of Budget and Management likewise submitted a Supplemental Comment to the
trial court, arguing that the COLA and AA were already integrated into the standardized salary
rates, as shown in their Notice of Position Allocation and Salary Adjustment.38 It further posited
that De Jesus only applied in instances where the integration of allowance was by "mere legal
fiction"39 and that Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 was
similarly inapplicable since there was already a factual integration of allowances.40 It likewise
pointed out that the new compensation plan for NAPOCOR employees did not include the grant
of additional COLA and AA and that the 2008 General Appropriations Act prohibited the use of
savings for additional COLA and AA.41 It maintained that the test to the entitlement of additional
allowances was whether there was a diminution of pay as a result of the law's implementation
and that mandamus only lied "where there is a clear legal right sought to be enforced."42

On November 28, 2008, the Regional Trial Court rendered its Decision43 in favor of NECU and
NEWU. According to the trial court, the determination of whether the COLA and AA had been
factually integrated was already resolved when the NAPOCOR Committee certified that the COLA
and AA of the employees from July 1, 1989 to December 31, 1993 were not factually integrated
into their standardized salaries.44 The trial court also cited De Jesus, Philippine Ports Authority
(PPA) Employees Hired After July 1, 1989, and Metropolitan Waterworks and Sewerage System
v. Bautista, et al.45 in support of the conclusion that the employees were entitled to COLA and AA
from 1989 to 1999 as a matter of right.46 The dispositive portion of the Decision reads:

WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered in favor
of the petitioners and intervenors NECU & NEWU and against the respondents National Power
Corporation, its President and Board of Directors ordering them as follows:

1. To RELEASE and to PAY the amount of SIX BILLION FOUR HUNDRED NINETY SIX
MILLION FIFTY-FIVE THOUSAND THREE HUNDRED THIRTY NINE PESOS AND
NINETYEIGHT CENTAVOS [Php 6,496,055,339.98], Philippine Currency representing the
COLAs and AAs and TO PAY the amount of SEVEN HUNDRED FOUR MILLION SEVEN
HUNDRED SEVENTY-SEVEN THOUSAND FIVE HUNDRED EIGHT
HUNDERED (sic) PESOS AND SIXTY CENTAVOS [Php 704,777,508.60], Philippine
Currency, representing interest computed from December 28, 2007, within 30 days from finality
of this Decision to petitioners, intervenors and other non-union employees similarly situated.

The said monetary judgment shall earn another interest of 12% per annum from date of finality
of the decision until its full satisfaction.

2. To PAY Attorney's fees in the amount of ₱100,000.00 in favor of the Petitioners


and ₱200,000.00 in favor of the Intervenors NECU & NEWU;

3. To DEDUCT the amount of ONE HU[N]DRED FORTY-FIVE MILLION FOUR HUNDRED


SIXTY-FOUR THOUSAND EIGHT HUNDRED SEVENTY-TWO PESOS AND FIFTY-FIVE
CENTAVOS [Php 145,464,872.55] representing the deficiency payment of docket and
other legal fees to be taken from the said lists of NAPOCOR officials, workers, and employees
including non-union beneficiaries similarly situated, and to REMIT AND PAY the same to the
Office of the Clerk of Court of the Regional Trial Court of Quezon City, within 15 days from finality
of this Decision, and finally, to FURNISH this court proof of compliance hereof. The said Amount
shall be without prejudice and subject to the final computation and assessment of the Office of
the Clerk of Court. The said docket and legal fees shall be a lien on this judgment and shall be
first satisfiedpursuant to the provisions of Rule 141 and Rule 39 of the Rules of Court.

4. DECLARING the Consultancy Agreement to be valid and binding between the counsels and
the Petitioners and the Intervenors NECU & NEWU, and its members.

4.1 To DEDUCT the FIVE percent (5%) of the amount payable to each of the NAPOCOR
employees including non-union beneficiaries similarly situated for the said attorney's fees PRO
RATA, AND to PAY the amount deducted to Atty. Napoleon Uy Galit and Atty. Jonathan S.
Presquito, after deducting the appropriate taxes.

SO ORDERED.47 (Emphasis and underscoring in the original, citation omitted)

The Office of the Solicitor General filed a Notice of Appeal of this Decision.48 Secretary Andaya,
Jr. also filed a Motion for Reconsideration, arguing, among others, that the employees were duly
notified that their COLA and AA were already integrated into their standardized salaries and that
a Certification could be used as basis since this was merely advisory for the Board of
Directors.49 NECU and NEWU, on the other hand, filed an Urgent Motion for Execution even within
the period for appeal alleging that the needed amount had already been certified available and
that the release of the allowances did not require the approval of the Department of Budget and
Management.50

In a Joint Order51 dated March 20, 2009, the Regional Trial Court denied the Notice of Appeal
and Motion for Reconsideration; and granted the Motion for Execution.52

The trial court noted that since the Office of the Solicitor General withdrew its appearance as
counsel for NAPOCOR and entered its appearance as the People's Tribune, it could no longer file
an appeal that would accrue to NAPOCOR' s benefit.53 The trial court also reiterated that the
Committee Certification was approved by the NAPOCOR President and was included in NAPOCOR'
s Certified Obligation from 2001 to 2007. As a Certified Obligation submitted to Congress, its
funds were already earmarked for the payment of the obligation.54

The trial court likewise found that the Motion for Execution could be granted since NAPOCOR
could set aside the funds needed for the payment of the COLA and AA. Its payment would not
only redound to the benefit of the affected employees and their families, but also to the economy
due to increased consumer spending. The National Treasury could also benefit from the tax
remittances due from these allowances.55 The dispositive portion of the Joint Order reads:

WHEREFORE, in the light of the foregoing considerations, the Court resolves as follows, viz:

1. GRANTS the Motion for Execution filed by NPC workers, petitioners and intervenors NECU
& NEWU.

Accordingly, the Branch Clerk of Court is directed to forthwith issue the Certificate of Finality
of Judgment and the Writ of Execution to enforce the Court's Decision dated November 28,
2008.
Let the corresponding Writ of Execution be issued and served simultaneous with the service of
this Order to the parties to be implemented by the deputy sheriff of this Court.

The initial computation of filing fees amounting to ONE HUNDRED FORTY-FIVE MILLION
FOUR HUNDRED SIXTY FOUR THOUSAND EIGHT HUNDRED SEVENTY-TWO PESOS
AND FIFTYFIVE CENTAVOS, [Php 145,464, 872.55], Philippine Currency, SHALL be
first executed and paid to the Clerk of Court of RTC Quezon City, pursuant to the provisions
of Rule 141 of the Revised Rules of Court, to be eventually remitted to the account of the Supreme
Court.

2. GRANTS the motion of petitioners and intervenors to Deposit the Amount Equivalent to
Judgment Award and Interest.

Accordingly, ORDERS the NPC Management through its President, NPC BOARD, and
Treasurer to DEPOSIT the amount of SIX BILLION FOUR HUNDRED NINETY SIX
MILLION FIFTY-FIVE THOUSAND THREE HUNDRED THIRTY NINE PESOS AND NINETY
EIGHT CENTAVOS [Php 6,496,055,339.98], Philippine Currency representing the COLAs
and AAs, and the amount of SEVEN HUNDRED FOUR MILLION SEVEN HUNDRED
SEVENTY SEVEN THOUSAND FIVE HUNDRED EIGHT PESOS AND SIXTY CENTAVOS
(Php 704,777,508.60), Philippine Currency, representing interestcomputed from
December 28, 2007, with Land Bank of the Philippines, with high yielding bearing interest, within
30 days from receipt hereof.

Thereafter, to SUBMIT their COMPLIANCE hereto within 15 days from date of deposit
of said amounts for the information of the Court.

The said amount shall be under Custodia Legis of the Court pending its distribution to the listed
and qualified beneficiaries or pending appeal with the Higher Court.

3. DENIES and DISMISSES the Notice of Appeal filed by the Office of the Solicitor General
for utter lack of merit.

4. DENIES the Motion for Reconsideration filed by the Public Respondent Hon. Rolando G.
Andaya, Jr. with finality.

SO ORDERED.56

On March 23, 2009, the trial court issued a Certificate of Finality of Judgment57 and a Writ of
Execution.58

Aggrieved, the Office of the Solicitor General, acting as the People's Tribune filed a Petition
for Certiorari and Prohibition (With Urgent Prayer for the Immediate Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction),59 docketed by this Court as G.R. No.
187257.

The Department of Budget and Management, through then Secretary Andaya, Jr., also filed a
Motion for Reconsideration of the Joint Order dated March 20, 2009 and a Motion to Quash the
Writ of Execution dated March 23, 2009.60 While the Motions were pending before the trial court,
the Department of Budget and Management filed a Petition for Certiorari and Prohibition61 with
this Court, docketed as G.R. No. 187776.

On April 14, 2009, the Office of the Solicitor General filed a Very Urgent Plea for a Temporary
Restraining Order62 to enjoin the implementation of the trial court's November 28, 2008 Decision,
March 20, 2009 Joint Order, and March 23, 2009 Writ of Execution.

In a Resolution63 dated April 15, 2009, this Court issued a TemporaryRestraining Order64 to enjoin
the implementation of the Writ of Execution.

On April 21, 2009, NECU and NEWU filed a Petition65 before this Court, docketed as G.R. No.
187359, seeking to restrain the implementation and enforcement of the Operations and
Maintenance Agreement entered into by NAPOCOR and Power Sector Assets and Liabilities
Management (PSALM).66 The Petition alleged that certain provisions of the Agreement regarding
the remittance of NAPOCOR' s revenues to PSALM was an attempt to thwart the execution of the
trial court's November 28, 2008 Decision.67

Another Petition68 was filed by the Power Generation Employees Association-NPC (PGEA-NPC),
seeking to restrain the implementation of the Operations and Maintenance Agreement, arguing
that the Agreement contravened the provisions of Republic Act No. 9136 or the Electric Power
Industry Reform Act of 2001.69 This Petition was docketed as G.R. No. 187420.70

In the Resolution71 dated July 13, 2009, this Court consolidated G.R. No. 187359 with G.R. Nos.
187257 and 187776. Upon motion of the Office of the Solicitor General, this Court, in the
Resolution72 dated September 9, 2009 also consolidated G.R. No. 187420 with these cases.

On February 17, 2011, NECU and NEWU filed an Omnibus Motion73 seeking to withdraw the
Petition in G.R. No. 187359 and to detach the petition from G.R. No. 187420 and have it
consolidated instead with G.R. No. 156208,74 a case then pending on the extent by which PSALM
would answer for NAPOCOR' s liabilities.

In a Resolution75 dated June 22, 2011, the Court granted the Motion to Withdraw the Petition in
G.R. No. 187359 but denied the prayer to have G.R. No. 187420 consolidated with G.R. No.
156208. The Court then considered G.R. No. 187359 as closed and terminated.76

On March 10, 2014, this Court, in the Resolution77 resolving the motion of NECU and
NEWU,78 deconsolidated G.R. No. 187420 from G.R. Nos. 187257 and 187776. Thus, only the
Petitions in G.R. Nos. 187257 and 187776 are to be resolved in this Decision.

Procedural

Whether the Regional Trial Court committed grave abuse of discretion in dismissing the Notice of
Appeal filed by the Office of the Solicitor General as the People's Tribune.

Whether the appeals were timely filed as to bar the finality of the Decision dated November 28,
2008.
Whether the case presented pure issues of law that should have been appealed directly to this
Court through a petition for review under Rule 45 of the Rules of Court.

Whether the trial court erred in deciding the case based on a judgment on the pleadings.

Substantive

Whether NAPOCOR employees are entitled to the payment of their COLA and AA from the period
of July 1, 1989 to March 16, 1999.

Whether the COLA and AA were already deemed factually integrated into the standardized salaries
pursuant to Section 12 of Republic Act No. 6758.

Whether the COLA and AA were already integrated into the standardized salaries pursuant to the
New Compensation Plan for NAPOCOR employees in Republic Act No. 7648 and Memorandum
No. 198, series of 1994.

Whether the trial court violated the Constitution when it ordered NAPOCOR to back pay COLA
and AA from its corporate funds.

Procedural Issues

The Office of the Solicitor General maintains that it filed its Notice of Appeal before the trial court
as the People's Tribune with the authority and duty to uphold the best interests of the
State.79 Although it was initially tasked with representing the NAPOCOR and its Board of Directors,
it withdrew as counsel.80 The trial court also granted its motion for leave to intervene as the
People's Tribune, so it had standing to file its own petition on its "perceived best interest of the
State."81

The Office of the Solicitor General argues that its Notice of Appeal was timely filed and thus, the
trial court had the ministerial duty to give due course to it.82 It also pointed out that the trial
court's November 28, 2008 Decision had not yet attained finality since the Writ of Execution was
issued by the trial court on March 23, 2009, merely three calendar days after it issued its Joint
Order on March 20, 2009.83

The Department of Budget and Management likewise points out that the issuance of a Writ of
Execution was premature since it still had a fresh 15-day period within which to appeal the
Decision when its Motion for Reconsideration was denied by the trial court in its March 20, 2009
Joint.84 Order. It also agrees that the Office of the Solicitor General had standing to file a Notice
of Appeal as the People's Tribune.85 It avers that the Regional Trial Court should not have decided
mainly on the pleadings since the case raises several substantive issues.86

NECU and NEWU, on the other hand, insist that the Notice of Appeal was correctly denied since
the case only presented pure issues of law, which required a direct resort to this Court under Rule
45 of the Rules of Court.87 They also contend that the Department of Budget and Management's
Motion for Reconsideration was correctly denied since it did not contain a notice of
hearing.88 Since the appeal was not perfected, there was no bar to the Decision attaining
finality.89 They argue that a judgment on the pleadings was proper since the facts were
undisputed.90

NECU and NEWU further claim that the Office of the Solicitor General, as the People's Tribune,
"should realize that upon the 16,000 workers' lawful and legitimate demand to their long withheld
wages, the 80 million Filipinos are behind them in this honorable quest."91 They argue that the
Department of Budget and Management has no standing to appeal since it is the Secretary of the
Department, who is designated as a member of the NAPOCOR Board of Directors. They point out
that then Secretary Andaya, Jr. instructed NAPOCOR "to proceed [with the] payment of the
workers['] COLA/AA from its Corporate Funds."92

Substantive Issues

The Office of the Solicitor General contends that Section 1293 of Republic Act No. 6758 already
integrated all allowances into standardized salary rates, including the COLA and AA since these
allowances were not specifically mentioned in the exempted allowances under the law.94 It
cites Gutierrez, et al. v. Department of Budget and Management, et al.,95promulgated after De
Jesus, Philippine Ports Authority (PPA) Employees Hired After July 1, 1989, and Metropolitan
Waterworks and Sewerage System, wherein this Court stated that the COLA was already deemed
integrated into the standardized salary rates of public employees.96

The Office of the Solicitor General argues that the Certification of NAPOCOR's Board was not
binding since it did not specify the premise of its conclusion that the COLA and the AA were not
factually integrated and the persons who certified the document stood to benefit from the
certification.97 It cites NAPOCOR Employees Consolidated Union (NECU) v. National Power
Corporation (NPC),98 wherein this Court used the Notice of Position Allocation and Salary
Adjustment to conclude that the employee welfare allowance was already deemed factually
integrated into the standardized salary rates.99 It claims that De Jesus, Philippine Ports Authority
(PPA) Employees Hired After July 1, 1989, and Metropolitan Waterworks and Sewerage
System were inapplicable since NAPOCOR Employees Consolidated Union (NECU) already
clarified that the non- publication of DBM-CCC No. 10 did not render ineffective Section 12 of
Republic Act No. 6758.100 The Office of the Solicitor General also points out that the back pay of
COLA and AA in addition to the standardized salary was an "additional compensation that [was]
prohibited by the Constitution[.]"101

The Department of Budget and Management echoes the Office of the Solicitor General's argument
that the COLA and AA were already deemed factually integrated into the standardized salary rates
as shown in its Notice of Position Allocation and Salary Adjustment.102 It presents the 1992 notices
of several employees, where it was clearly stated that the COLA and AA were received in addition
to their salaries and other benefits.103 Also submitted is a Memorandum from the Office of the
General Counsel of NAPOCOR, stating that the employees actually received their COLA and AA
from July 1, 1989 to August 31, 1992 and that these allowances were deemed factually integrated
into their salaries from September 1992 to December 31, 1993.104

The Department of Budget and Management maintains that the New Compensation Plan pursuant
to Republic Act No. 7648 and Memorandum No. 198, series of 1994 did not authorize the grant
of additional COLA and AA from January 1, 1994.105 The law provided that only the President of
the Philippines could upgrade the compensation of the employees; thus, only those allowances
in the compensation plan could be modified by the NAPOCOR Board of Directors.106 It points out
that NECU and NEWU have not shown "any evidence of diminution [of] pay to justify their claim
for additional COLA and AA[,]"107 as required by this Court in NAPOCOR Employees Consolidated
Union (NECU).108

The Department of Budget and Management also argues that the trial court violated the
Constitution when it ordered NAPOCOR to pay the COLA and AA from its corporate funds without
the required appropriation for that purpose.109It alleges that Executive Order No. 518, series of
1979 requires that government-owned and controlled corporations prepare their Corporate
Operating Budgets to obligate the amounts used for its operations and "serves [as] the
appropriation[s] cover for the utilization of corporate funds[.]"110 When the NAPOCOR officers
were asked specifically where in their Corporate Operating Budget the payment of COLA and AA
would be included, they stated that it "was not included in the [Corporate Operating Budget]
approved by Congress."111 Despite lacking the requisite Congressional approval, the trial court
still ordered the NAPOCOR officials the release of the corporate funds, in direct contravention to
the Constitution.112

NECU and NEWU, on the other hand, maintain that De Jesus, Philippine Ports Authority (PPA)
Employees Hired After July 1, 1989, and Metropolitan Waterworks and Sewerage System have all
decreed that they were entitled to their COLA and AA from July 1, 1989 to March 16, 1999.113 The
Office of the Solicitor General is trying to confuse the issue by citing NAPOCOR Employees
Consolidated Union (NECU), which concerned the employee welfare fund allowance, and not the
COLA and AA.114 They also point out that the Office of the Solicitor General "selectively"115chose
the three Notices of Position Allocation and Salary Adjustment instead of subpoenaing the notices
of all the workers.116 They insist that Memorandum No. 198, series of 1994 did not include the
COLA and AA on the presumption that DBM-CCC No. 10 was still in effect.117 They also argue that
the funds to be used to pay are the corporate funds of the NAPOCOR, which could be subject to
garnishment.118

Generally, the Office of the Solicitor General "represent[s] the Government of the Philippines, its
agencies and instrumentalities and its officials and agents in any litigation, proceeding,
investigation or matter requiring the services of lawyers."119

The exception to this rule is when it acts as the "People's Tribune." As such, it represents the
best interests of the State, and may take an adverse position from the government agency under
litigation. In Pimentel, Jr. v. Commission on Elections:120

True, the Solicitor General is mandated to represent the Government, its agencies and
instrumentalities and its officials and agents in any litigation, proceeding, investigation or matter
requiring the services of a lawyer. However, the Solicitor General may, as it has in instances take
a position adverse and contrary to that of the Government on the reasoning that it is incumbent
upon him to present to the court what he considers would legally uphold the best interest of the
government although it may run counter to a client's position.121

The rationale for the Solicitor General's role is further explained in Gonzales v. Hon. Chavez:122
Indeed, in the final analysis, it is the Filipino people as a collectivity that constitutes the Republic
of the Philippines. Thus, the distinguished client of the OSG is the people themselves of which
the individual lawyers in said office are a part.

....

Moreover, endowed with a broad perspective that spans the legal interests of virtually the entire
government officialdom, the OSG may be expected to transcend the parochial concerns of a
particular client agency and instead, promote and protect the public weal. Given such objectivity,
it can discern, metaphorically speaking, the panoply that is the forest and not just the individual
trees. Not merely will it strive for a legal victory circumscribed by the narrow interests of the client
office or official, but as well, the vast concerns of the sovereign which it is committed to serve.123

In this instance, the Office of the Solicitor General initially represented NAPOCOR and its Board
of Directors in the proceedings before the Regional Trial Court. It later on filed an Omnibus Motion
To Withdraw Appearance as Counsel for Respondents and For Leave to Intervene as People's
Tribune,124 which was granted by the trial court in its June 20, 2008 Order.125 In denying the
Office of the Solicitor General's Notice of Appeal, the trial court stated:

The Court is of the humble opinion and so holds that OSG has ceased to be the counsel of NPC
and the subsequent filing of the notice of appeal is not appropriately filed or such notice will
accrue to the benefit of NPC.126

In granting the Office of the Solicitor General's Omnibus Motion, the trial court allowed a party,
separate from NAPOCOR- the People's Tribune - to enter its appearance in the case. As with any
other party, it was allowed to file a Notice of Appeal separately from NAPOCOR. Its Notice of
Appeal was not for the benefit of NAPOCOR; rather, it was for the protection of the interests of
the State. Its Notice of Appeal would have been timely filed.

A similar issue was raised regarding the Department of Budget and Management's standing to
file a Motion for Reconsideration of the November 28, 2008 Decision.

The case was brought against NAPOCOR and its Board of Directors, which included the Secretary
of Budget and Management.127 All members of the Board were served a copy of the petition
before the trial court but only then Secretary Andaya, Jr. filed his Comment.128 Thus, when he
filed a Motion for Reconsideration of the trial court's Decision, it was "as a member of the Board
of Directors of the [NAPOCOR.]"129 Being a party to the case, the Secretary of the Budget and
Management had standing to file the Motion for Reconsideration.

NECU and NEWU likewise assail Secretary Andaya, Jr.'s Motion for Reconsideration for failing to
state a notice of hearing.

Generally, all written motions are required to include a notice of hearing and must be addressed
to all parties and served to them at least three (3) days before the date of the hearing.130 When
a party fails to comply, "the running of the period to appeal is not tolled by [the] filing or
pendency."131 This three-day notice rule, however, is not absolute. The motion may still be acted
upon by the court "provided doing so will neither cause prejudice to the other party nor violate
his or her due process rights."132
The trial court in this case nevertheless conducted a hearing on January 23, 2009 and resolved
the Motion for Reconsideration on its merits.133 NECU and NEWU likewise did not allege any
violation to their right to due process due to the lack of a notice of hearing. Thus, the filing of the
Motion of Reconsideration was able to toll the running of the period of appeal.

II

The Office of the Solicitor General's appeal required a review of the documentary evidence
presented, thus, it was necessary to first file a notice of appeal with the trial court under Rule 41
of the Rules of Court. A direct appeal with this Court through a petition for review under Rule 45
of the Rules of Court would have been dismissed outright for presenting questions of fact.

There are three modes of appeal from a decision or final order from the Regional Trial Court. The
first mode is an ordinary appeal to the Court of Appeals in cases decided by the trial court in the
exercise of its original jurisdiction. This is done by filing a notice of appeal with the trial
court.134 The second mode is through a petition for review with the Court of Appeals in cases
decided in the exercise of the trial court's appellate jurisdiction.135 The third mode is by filing a
petition for review on certiorari with this Court if the appeal involves only questions of law.136

Only the third mode of appeal limits the scope of the issues to be brought. The first and second
modes of appeal thus involve appeals where there are both questions of law and of fact. The test
used to determine whether there is a question of fact or of law "is not the appellation given to
such question by the party raising the same; rather, it is whether the appellate court can
determine the issue raised without reviewing or evaluating the evidence, in which case, it is a
question of law; otherwise it is a question of fact."137

By filing a Notice of Appeal, the Office of the Solicitor General intended to appeal to the Court of
Appeals via an ordinary appeal under Rule 41, sec. 1 (a). NECU and NEWU questioned this mode
of appeal on the ground that only questions of law were presented.

The Office of the Solicitor General's main argument, however, was that the COLA and AA were
already factually integrated into the standardized salary rates of NAPOCOR' s employees. It had
intended this fact to be established by documentary evidence such as the Notice of Position
Allocation and Salary Adjustment. NECU and NEWU likewise presented documentary evidence
before the trial court to establish their position. In order to review any appeal of the case, it would
have been necessary to review the weight and evidentiary value of the documents presented.
These would have been questions of fact better addressed in an ordinary appeal before the Court
of Appeals.

The Office of the Solicitor General, thus, did not err in first filing a notice of appeal before the
Regional Trial Court.

III

Considering that the Office of the Solicitor General represented an adverse position, a judgment
on the pleadings was improper in this instance.
A judgment on the pleadings may be allowed in cases "[w]here an answer fails to tender an issue,
or otherwise admits the material allegations of the adverse party's pleading[.]"138 NECU and
NEWU's documentary evidence consisted of documents by the NAPOCOR Board of Directors
stating that the employees were entitled to the back pay of their COLA and AA. Thus, the Regional
Trial Court concluded that since the NAPOCOR admitted the material allegations of the complaint,
a judgment on the pleadings was proper.139

The trial court, however, operated on the mistaken assumption that the Office of the Solicitor
General represented NAPOCOR. At this point in the proceedings, the Office of the Solicitor General
had already withdrawn its appearance as counsel for NAPOCOR and entered its appearance as
the People's Tribune.140 In presenting an adverse position, the Office of the Solicitor General could
not be deemed to have admitted the material allegations of the complaint.

IV

COLA and AA are already deemed integrated into the standardized salaries of the NAPOCOR
employees from July 1, 1989 to December 31, 1993.

Before the enactment of Republic Act No. 6758, previous compensation and position classification
laws, such as Presidential Decree No. 985, as amended by Presidential Decree No. 1597,141 only
granted allowances and fringe benefits upon the recommendation of the Commissioner of Budget
and the approval of the President of the Philippines.142 Republic Act No. 6758 aimed "to
standardize salary rates among government personnel and do away with multiple allowances and
other incentive packages and the resulting differences in compensation among them."143 Thus,
Section 12 of Republic Act No. 6758 introduced the concept of integration of allowance upon the
standardization of the salary rates.144 Section 12 states:

Section 12. Consolidation of Allowances and Compensation. - All allowances, except for
representation and transportation allowances; clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be determined by the DBM, shall be deemed
included in the standardized salary rates herein prescribed. Such other additional compensation,
whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated
into the standardized salary rates shall continue to be authorized.

Existing additional compensation of any national government official or employee paid from local
funds of a local government unit shall be absorbed into the basic salary of said official or employee
and shall be paid by the National Government.

As a general rule, "all allowances are deemed included in the standardized salary [rates]."145 The
following allowances, however, are deemed not to have been integrated:

... representation and transportation allowances; clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be determined by the DBM ...146
The phrase "such other additional compensation not otherwise specified herein as may be
determined by the DBM" specifies that the Department of Budget and Management has the
delegated authority to determine other allowances that are not deemed integrated into the
standardized salaries.147 The Department of Budget and Management subsequently issued DBM-
CCC No. 10, enumerating all allowances deemed included in the basic salary and discontinuing
all allowances and fringe benefits granted on top of the basic salary.148 Item 4.1 states:

4.1 The present salary of an incumbent for purposes of this Circular shall refer to the sum total
of actual basic salary including allowances enumerated hereunder, being received as of June 30,
1989 and authorized pursuant to P.D. No. 985 and other legislative or administrative issuances:

4.1.1 Cost-of-Living Allowance/Bank Equity Pay (COLA/BEP) equivalent to forty percent (40%) of
basic salary or ₱300.00 per month, whichever is higher;

4.1.2 Amelioration Allowance equivalent to ten percent (10%) of basic salary of ₱150.00 per
month, whichever is higher;

4.1.3 COLA guaranteed to GOCCs/GFIs covered by the Compensation and Position Classification
Plan for the regular agencies/offices of the National Government and to GOCCs/GFIs following
the Compensation and Position Classification Plan under LOimp. No. 104/CCC No. 1 and
LOimp.No. 97/CCC No. 2 in the amount of ₱550.00 per month for those whose monthly basic
salary is ₱1,500 and below, and P500 for those whose monthly basic salary is ₱1,501 and above,
granted on top of the COLA/BEP mentioned in Item No. 4.1.1 above[.]149

Item No. 5.6 of the Circular states:

Payment of other allowances/fringe benefits and all other forms of compensation granted on top
of basic salary, whether in cash or in kind, .. . shall be discontinued effective November 1, 1989.
Payment made for such allowances/fringe benefits after said date shall be considered as illegal
disbursement of public funds.150

In De Jesus, the Commission on Audit disallowed the payment of honoraria to employees of the
Local Water Utilities Administration on the ground that this was a fringe benefit granted on top
of the basic salary.151 This Court, however, set aside the disallowance and rendered DBM-CCC
No. 10 ineffective for non-publication in the Official Gazette or in a newspaper of general
circulation:

[I]t is decisively clear that DBM-CCC No. 10, which completely disallows payment of allowances
and other additional compensation to government officials and employees, starting November 1,
1989, is not a mere interpretative or internal regulation. It is something more than that. And why
not, when it tends to deprive government workers of their allowances and additional
compensation sorely needed to keep body and soul together. At the very least, before the said
circular under attack may be permitted to substantially reduce their income, the government
officials and employees concerned should be apprised and alerted by the publication of subject
circular in the Official Gazette or in a newspaper of general circulation in the Philippines - to the
end that they be given amplest opportunity to voice out whatever opposition they may have, and
to ventilate their stance on the matter. This approach is more in keeping with democratic precepts
and rudiments of fairness and transparency.
In light of the foregoing disquisition on the ineffectiveness of DBM-CCC No. 10 due to its non-
publication in the Official Gazette or in a newspaper of general circulation in the country, as
required by law, resolution of the other issue at bar is unnecessary.152

In Philippine Ports Authority (PPA) Employees Hired After July 1, 1989, the Philippine Ports
Authority had been paying its officials and employees COLA and AA prior to the issuance of DBM-
CCC No. 10.153 Upon the issuance of the Circular, it discontinued the payment of these allowances
as these were already deemed integrated into the standardized salaries.154 De Jesus, however,
rendered the Circular ineffective for non-publication. Thus, a question arose as to whether the
employees were entitled to the back pay of their COLA and AA.

This Court held that since the Philippine Port Authority has already granted these allowances to
its employees, the employees should continue to receive them during the period of ineffectivity
of DBM-CCC No. 10:

The parties fail to cite any law barring the continuation of the grant of the COLA and the
amelioration allowance during the period when DBM-CCC No. 10 was in legal limbo.

The present case should be distinguished from PNB v. Palma, in which the respondents sought
by mandamus to compel the petitioner therein to grant them certain fringe benefits and
allowances that continued to be given to Philippine National Bank (PNB) employees hired prior to
July 1, 1989. This Court held that PNB could not be compelled to do so, because the respondents
had been hired after that date. Under Section 12 of RA 6758, only "incumbent" government
employees (as of July 1, 1989) already receiving those benefits may continue to receive them,
apart from their standardized pay.

In the present case, the PP A already granted herein petitioners the COLA and the amelioration
allowances, even if they were hired after July 1, 1989. The only issue is whether they should have
continued to receive the benefits during the period of the "ineffectivity" of DBC-CCC No. 1 O; that
is, from July 1, 1989 to March 16, 1999, the period during which those allowances were not
deemed integrated into their standard salary rates. Furthermore, in the PNB Decision, the
employees claimed a right to receive the allowances from July 1, 1989 to January 1, 1997. PNB
was able to grant the benefits post facto, because on that date (January 1, 1997) it had already
been privatized and was thus no longer subject to the restrictions imposed by RA 6758 (the Salary
Standardization Law).

Tellingly, the subject matter of the PNB case involved benefits that had not been deemed
integrated into, but in fact exempted from, the standardized salary rates. In the present case,
the subject matter refers to those deemed included, but were placed "in limbo" as a result of this
Court's ruling in De Jesus v. COA.

To stress, the failure to publish DBM-CCC No. 10 meant that the COLA and the amelioration
allowance were not effectively integrated into the standardized salaries of the PPA employees as
of July 1, 1989. The integration became effective only on March 16, 1999. Thus, in between those
two dates, they were still entitled to receive the two allowances.155

Thus, Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 clarified that those who
were already receiving COLA and AA as of July 1, 1989, but whose receipt was discontinued
due to the issuance of DBM-CCC No. 10, were entitled to receive such allowances
during the period of the Circular's ineffectivity, or from July l, 1989 to March 16, 1999.
The same factual premise was present in Metropolitan Waterworks and Sewerage
System, wherein this Court reiterated that those already receiving COLA as of July l,
1989 were entitled to its payment from 1989 to 1999.156

In neither of these cases did this Court suggest that the compensation of the employees after the
promulgation of Republic Act No. 6758 would be increased with the addition of the COLA and
AA. If the total compensation package were the same, then clearly the COLA or AA, or both
were factually integrated.

NECU and NEWU anchor their entitlement to the back pay of COLA and AA from July 1, 1989 to
March 16, 1999 on these three cases. It is necessary to examine first if the officers and employees
of the NAPOCOR were already receiving COLA and AA from July 1, 1989 and whether their receipt
of these allowances were discontinued due to the issuance of DBM-CCC No. 10.

In NAPOCOR Employees Consolidated Union (NECU), this Court was confronted with the issue of
whether the employees' welfare allowance was deemed integrated into the standardized salaries
of the NAPOCOR employees.157 In holding that the employee welfare allowance was already
deemed integrated, this Court also found that the NAPOCOR employees were already receiving
COLA and AA prior to the effectivity of Republic Act No. 6758:

The State aims in Rep. Act No. 6758 to provide equal pay for substantially equal work and to
base differences in pay upon substantive differences in duties and responsibilities, and
qualification requirements of the positions. Prior to the effectivity of that law, NPC employees
were receiving, aside from cost of living allowance, myriad of allowances like social amelioration
allowance, emergency allowance, longevity pay and employee welfare allowance.158 (Citation
omitted)

NAPOCOR Employees Consolidated Union (NECU) also clarifies that Philippine Ports Authority
(PPA) Employees Hired After July 1, 1989 was inapplicable since it only applied to back pay of
COLA and AA that was previously withheld and not to those who continued to receive these
benefits even after the issuance of DBM-CCC No. 10:

The Court has, to be sure, taken stock of its recent ruling in Philippine Ports Authority (PPA)
Employees Hired After July I, 1989 vs. Commission on Audit. Sadly, however, our pronouncement
therein is not on all fours applicable owing to differing factual milieu. There, the Commission on
Audit allowed the payment of back cost of living allowance (COLA) and amelioration allowance
previously withheld from PPA employees pursuant to the heretofore ineffective DBM-CCC No. 10,
but limited the back payment only to incumbents as of July 1, 1989 who were already then
receiving both allowances. COA considered the COLA and amelioration allowance of PP A
employees as "not integrated" within the purview of the second sentence of Section 12 of Rep.
Act No. 6758, which, according to COA confines the payment of "not integrated" benefits only to
July 1, 1989 incumbents already enjoying said allowances.

In setting aside COA's ruling, we held in PPA Employees that there was no basis to use the
elements of incumbency and prior receipt as standards to discriminate against the petitioners
therein. For, DBM -CCC No. 10, upon which the incumbency and prior receipt requirements are
contextually predicated, was in legal limbo from July 1, 1989 (effective date of the unpublished
DBM-CCC No. 10) to March 16, 1999 (date of effectivity of the heretofore unpublished DBM
circular). And being in legal limbo, the benefits otherwise covered by the circular, if properly
published, were likewise in legal limbo as they cannot be classified either as effectively integrated
or not integrated benefits.

There lies the difference.

Here, the employee welfare allowance was, as above demonstrated, integrated by NPC into the
employees' standardized salary rates effective July 1, 1989 pursuant to Rep. Act No. 6758. Unlike
in PPA Employees, the element of discrimination between incumbents as of July 1, 1989 and
those joining the force thereafter is not obtaining in this case. And while after July 1, 1989, PPA
employees can rightfully complain about the discontinuance of payment of COLA and amelioration
allowance effected due to the incumbency and prior receipt requirements set forth in DBM-CCC
No[.] 10, NPC cannot do likewise with respect to their welfare allowance since NPC has, for all
intents and purposes, never really discontinued the payment thereof.159 (Citation omitted)

Republic Act No. 6758 remained effective during the period of ineffectivity of DBM-CCC No.
10.160 Thus, the COLA and AA of NAPOCOR officers and employees were integrated into the
standardized salaries effective July 1, 1989 pursuant to Section 12 of Republic Act No. 6758,
which provides:

Section 12. Consolidation of Allowances and Compensation. - All allowances, except for
representation and transportation allowances; clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be determined by the DBM, shall be deemed
included in the standardized salary rates herein prescribed. Such other additional compensation,
whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated
into the standardized salary rates shall continue to be authorized.

Existing additional compensation of any national government official or employee paid from local
funds of a local government unit shall be absorbed into the basic salary of said official or employee
and shall be paid by the National Government.

Unlike in Philippine Ports Authority (PPA) Employees Hired After July 1, 1989, there would be no
basis to distinguish between those hired before July 1, 1989 and those hired after July 1, 1989.
Both sets of NAPOCOR employees were continuously receiving their COLA and AA since these
allowances were already factually integrated into the standardized salaries pursuant to Section
12 of Republic Act No. 6758.

In order to settle any confusion, we abandon any other interpretation of our ruling in Philippine
Ports Authority (PPA) Employees Hired After July 1, 1989 with regard to the entitlement of the
NAPOCOR officers and employees to the back payment of COLA and AA during the period of legal
limbo. To grant any back payment of COLA and AA despite their factual integration into the
standardized salary would cause salary distortions161 in the Civil Service. It would also provide
unequal protection to those employees whose COLA and AA were proven to have been factually
discontinued from the period of Republic Act No. 6758's effectivity.
Generally, abandoned doctrines of this Court are given only prospective effect.162 However, a
strict interpretation of this doctrine, when it causes a breach of a fundamental constitutional right,
cannot be countenanced. In this case, it will result in a violation of the equal protection clause of
the Constitution.

Furthermore, Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 only applies if
the compensation package of those hired before the effectivity of Republic Act No. 6758 actually
decreased; or in the case of those hired after, if they received a lesser compensation package as
a result of the deduction of COLA or AA. Neither situation applies in this case.

NECU and NEWU take exception to the application of NAPOCOR Employees Consolidated Union
(NECU) to this case, arguing that this case involved COLA and AA, and not the employee welfare
allowance. NECU and NEWU, however, are arguing on semantics. At its most basic, NAPOCOR
Employees Consolidated Union (NECU) involved an allowance appearing in the Notices of Position
Allocation and Salary Adjustment to have already been integrated into the basic salary. The two
allowances involved in this case appear on the same notices.

The prior acts of the parties likewise support the finding that from July 1, 1989 to December 31,
1993, the COLA and AA were already deemed integrated into the basic salary.

On March 20, 2006, the Department of Budget and Management issued Corporate Compensation
Circular No. 12,163 providing the guidelines for implementation of this Court's decisions on the
grant of additional allowances to officers and employees of government-owned and controlled
corporations and government financial institutions. It stated, in part:

For employees hired after July 1, 1989 or the effectivity of RA 6758, a finding that the subject
allowance was factually integrated into the basic salaries of incumbents as of July 1, 1989 shall
mean that said allowances were likewise paid and factually integrated into the basic salaries of
those hired after July 1, 1989.

Any finding that the concerned allowance was not factually integrated into the basic salary, and
hence, has not been paid, shall be supported by sworn certifications from the President of the
concerned GOCC/GFI, its Vice President for Human Resource and Finance, and other relevant
officers directly in charge thereof, or officials with equivalent ranks and responsibilities, attesting
to the fact that the subject allowance was not factually integrated in the basic salary after
accomplishment of the above matrix, and as supported by the foregoing documents.164

Pursuant to this Circular, NAPOCOR submitted to the Department of Budget and Management a
Certification165dated May 28, 2007166 stating:

This is to certify that the Cost of Living Allowance (COLA) and Amelioration Allowance (AA) to be
paid to the four thousand nine hundred thirteen (4,913) NPC employees hired during the period
01 July 1989 to 31 December 1993 per the attached matrix were not factually integrated in their
respective basic salaries for the subject period.

This is to further certify that the COLA and AA to be paid to the nine thousand seven hundred
seventy-seven (9,777) NPC employees concerned during the period 01 January 1994 to 16 March
1999 have not been factually integrated into the basic salaries of the subject employees.
Attached herewith is the accomplished matrix prescribed under DBM CCC# 12, which forms an
integral part of this certification.167

The Department of Budget and Management, through Secretary Andaya, Jr., wrote a
letter168 dated September 18, 2007 concerning the submission of these documents, stating:

Based on CCC No. 12, determination of whether such allowances authorized by the Supreme
Court to be granted have factually been integrated or not and paid to the NPC employees
concerned now rests with the NPC management. The documents enumerated under paragraph
2.1 to 2.4 of said Circular shall serve as basis for determining whether their officials and
employees are still entitled to payment of such allowances. It may be noted that CCC No. 12 does
not require GOCCs/GFIs to submit the said documents to the Department of Budget and
Management. Likewise, payment of such allowances does not require prior approval of the DBM
Secretary.

The findings of the NPC as to who are entitled to payment of back COLA and AA can only be
possible after a diligent and exhaustive review and evaluation of all pertinent documents
enumerated in CCC No. 12. May we call your attention, however, to the following[:]

a) NPC employees who were incumbents of positions as of June 30, 1989 are no longer entitled
to COLA and AA for the period July 1, 1989 to December 31, 1993 since said allowances have
been factually integrated into the standardized salaries as clearly reflected in a Notice of Position
Allocation and Salary Adjustment (NPASA) of an employee submitted by NPC in connection with
the En bane decision of the Supreme Court in the case NAPOCOR EMPLOYEES CONSOLIDATED
UNION[,] et al. vs. THE NATIONAL POWER CORPORATION, et al. under G.R. No. 157492 dated
March 10, 2006. As reflected in the said NPASA, not only the Welfare Allowance was integrated,
but likewise the COLA and Amelioration Allowance being claimed by the NPC employees.

b) For employees hired between July 1, 1989 and December 31, 1993, it is inconceivable that
NPC was not aware of the Implementation of RA No. 6758. The SSL had already been in effect
on July 1, 1989 and as such, the hiring rate under the SSL should have been allowed to NPC
employees hired effective the said period. NPC could not have continuously and separately
granted any COLA and AA to those hired effective July 1, 1989 and thereafter.

c) It may also be worth mentioning that in CY 1994, NPC adopted a new Salary Pay [sic] pursuant
to RA No. 7643, the Energy Power Crisis Act, as implemented by Memorandum Order (MO) 198.
Under the said Salary Plan, the COLA and AA are no longer subsisting and these have already
been integrated into the standardized salary of employees effective July 1, 1989.169

In a letter170 dated October 9, 2007, President Cyril C. del Callar (President del Callar) conceded
Secretary Andaya, Jr.'s first point but took exception to the second and third point:

[W]e would like to make some clarifications on the following concerns made on our request:

a) NPC employees who were incumbents of positions as of June 30, 1989 are no
longer entitled to COLA and AA for the period July 1, 1989 to December 31, 1993 since
said allowances have been factually integrated into the standardized rates as
reflected in a NPASA of an employee submitted by NPC in connection with the En bane
decision of the Supreme Court ........ by NPC employees ..

Your position on item a) above is the same with our position as stated in our letter of 10 May
2007. NPC employees who were incumbents of positions as of 30 June 1989 may not be entitled
to COLA and AA because during the period 01July1989 to 31 December 1993, these employees
either actually received such benefits or the said benefits were already factually integrated into
their respective standardized salaries.

Attached are copies of pay slips of employees who were incumbents as of 30 June 1989 to
illustrate that their COLA and AA were integrated into their standardized salaries during the
covered period.

b) For employees hired between July 1, 1989 and December 31, 1993, it is
inconceivable that NPC was not aware of the implementation of RA No. 6758. The SSL
had already been in effect on July 1, 1989 and as such, the hiring rate under the SSL
should have been allowed to NPC employees hired effective the said period. NPC could
not have continuously and separately granted any COLA and AA to those hired
effective July 1, 1989 and thereafter.

NPC is very much aware of the implementation of RA 6758 and that the SSL took effect on 01
July 1989. However, we would like to remind you that CCC No. 10 was declared ineffective by
the Supreme Court due to its non-publication in the Official Gazette in the case of De Jesus, et
al. vs. COA (294 SCRA 152). In the case of Philippine Ports Authority Employees vs. COA (GR No.
160396, September 6, 2005), the High Court ruled that the failure to publish DBM-CCC No. 10
meant that the COLA and AA were not effectively integrated into the standardized salaries. It was
further ruled that "All - not only incumbents as of July 1, 1989 - should be allowed to receive
back pay corresponding to the said benefits, from July 1, 1989 to the new effectivity of DBM-CCC
No. 10 - - March 16, 1999.

Attached for your reference are copies of pay slips of NPC employees hired after the effectivity
of the SSL to serve as proof that the subject benefits were not factually integrated into the
respective basic salaries of employees hired after June 30, 1989. Being non-incumbents as of 30
June 1989, nothing was integrated into their salaries effective July 1, 1989 or respective dates
they were actually employed thereafter. The COLA and AA were not part of the total compensation
package they were receiving during the period 01July1989 to 31December1993.

c) It may also be worth mentioning that in CY 1994, NPC adopted a new Salary Pay
[sic]pursuant to RA No. 6743 [sic], the Energy Power Crisis Act, as implemented by
Memorandum Order (MO) 198. Under the said Salary Plan, the COLA and AA are no
longer subsisting and these have already been integrated into the standardized salary
of employees effective July 1, 1989.

The new NPC Pay Plan which took effect in 1994 was authorized under Memorandum Order (MO)
198. The salary and benefits level accorded to NPC personnel was aligned with the private sector
and was based on the result of the study conducted by SGV. The grant of several existing
govemment-mandated allowances was allowed. However, the COLA and AA were not included in
the Schedule of Monthly Allowances due to the belief that DBM-CCC No. 10 was still in
effect.171 (Emphasis in the original)

Unfortunately, the attached Notices of Position Allocation and Salary Adjustment and pay slips
only served to prove that from July 1, 1989 to December 31, 1993, the COLA and AA were already
deemed integrated into the basic salary. According to the various Notices of Position Allocation
and Salary Adjustment172 submitted to this Court, the receipt of COLA and AA was not
discontinued due to the implementation of Republic Act No. 6758. One employee, Ernesto
Camagong (Mr. Camagong), was a Plant Equipment Operator, classified as Salary Grade 10:

JOB GRADE: 10 WITH A SALARY AS OF 06/30/89 AS


FOLLOWS: BASIC SALARY [₱] 3,912.00
COST OF LIVING ALLOWANCE (COLA) 1,564.80
ADDITIONAL COLA 200.00
SOCIAL AMELIORATION ALLOWANCE 391.20
EMERGENCY ALLOWANCE 255.00
RED CIRCLE RATE (RCR) 1,592.10
LONGEVITY PAY 200.00
EMPLOYEE WELFARE ALLOWANCE 391.20
TOTAL AS OF 06130189 8,506.30
SALARY ADJUSTMENT EFFECTIVE JULY 1, 1989 NONE
TRANSITION ALLOWANCE EFFECTIVE JULY 1, 1989 4,120.30
ADJUSTED SALARY EFFECTIVE JULY 1, 1989 4,386.00
TOTAL COMPENSATION EFFECTIVE JULY 1, 1989 8,506.30 173

Prior to Republic Act No. 6758, or on June 30, 1989, Mr. Camagong was receiving a total salary
of ₱8,506.30. Upon the effectivity of the law, or on July 1, 1989, all allowances, except those
specifically excluded, were deemed integrated into his basic salary. To stress, all allowances
previously granted were already deemed integrated into the standardized salary rates by July 1,
1989.

As shown above, Mr. Camagong's adjusted salary of ₱4,386.00 already included all allowances
previously received. This amount is obviously less than his previous total compensation of
₱8,506.30. The law, however, provided a remedy in the form of a transition allowance. NAPOCOR
Employees Consolidated Union (NECU) explains:

When Rep. Act No. 6758 became effective on July 1, 1989, the new position title of Camagong
was Plant Equipment Operator B with a salary grade of 14 and with a monthly salary of ₱4,386.00.

Admittedly, in the case of Camagong, his monthly gross income of ₱8,506.30 prior to the
effectivity of Rep. Act No. 6758, was thereafter reduced to only ₱4,386.00. The situation,
however, is duly addressed by the law itself. For, while Rep. Act No. 6758 aims at standardizing
the salary rates of government employees, yet the legislature has adhered to the policy of non-
diminution of pay when it enacted said law. So it is that Section 17 thereof precisely provides for
a "transition allowance," as follows:
Section 1 7. Salaries of Incumbents. - Incumbents of positions presently receiving salaries and
additional compensation/fringe benefits including those absorbed from local government units
and other emoluments, the aggregate of which exceeds the standardized salary rate as herein
prescribed, shall continue to receive such excess compensation, which shall be referred to as
transition allowance. The transition allowance shall be reduced by the amount of salary
adjustment that the incumbent shall receive in the future.

The transition allowance referred to herein shall be treated as part of the basic salary for purposes
of computing retirement pay, year-end bonus and other similar benefits.

As basis for computation of the first across-the-board salary adjustment of incumbents with
transition allowance, no incumbent who is receiving compensation exceeding the standardized
salary rate at the time of the effectivity of this Act, shall be assigned a salary lower than ninety
percent (90%) of his present compensation or the standardized salary rate, whichever is higher.
Subsequent increases shall be based on the resultant adjusted salary.

Evidently, the transition allowance under the aforequoted provision was purposely meant to
bridge the difference in pay between the pre-R.A. 6758 salary of government employees and
their standardized pay rates thereafter, and because non-diminution of pay is the governing
principle in Rep. Act No. 6758, Camagong, pursuant to Section 17 of that law was given a
transition allowance of ₱4,120.30. This explains why, in the case of Camagong, his gross monthly
income remained at ₱8,506.30, as can be seen in his NP ASA, clearly showing that the allowances
he used to receive prior to the effectivity of Rep. Act No. 6758, were integrated into his
standardized salary rate.174 (Citation omitted)

The integration of COLA into the standardized salary rates is not repugnant to the law. Gutierrez,
et al. v. Department of Budget and Management, et al.175 explains:

COLA is not in the nature of an allowance intended to reimburse expenses incurred by officials
and employees of the government in the performance of their official functions. It is not payment
in consideration of the fulfillment of official duty. As defined, cost of living refers to "the level of
prices relating to a range of everyday items" or "the cost of purchasing those goods and services
which are included in an accepted standard level of consumption." Based on this premise, COLA
is a benefit intended to cover increases in the cost of living. Thus, it is and should be integrated
into the standardized salary rates.176

Thus, it would be incongruous to grant any alleged back pay of COLA and AA from July 1, 1989
to December 31, 1993, when the NAPOCOR officers and employees have already received such
allowances for this period. The grant would be tantamount to additional compensation, which is
proscribed by Section 8, Article IX (B) of the Constitution:

SECTION 8. No elective or appointive public officer or employee shall receive additional, double,
or indirect compensation, unless specifically authorized by law, nor accept without the consent of
the Congress, any present, emolument, office, or title of any kind from any foreign government.

Pensions or gratuities shall not be considered as additional, double, or indirect compensation.


Mandamus cannot lie to compel the performance of an unconstitutional act.177 The Regional Trial
Court clearly acted in grave abuse of discretion in ordering the back payment, to the affected
NAPOCOR officers and employees, the COLA and AA for the period of July 1, 1989 to December
31, 1993.

The question remains, however, as to the entitlement of NECU and NEWU to the back pay of
COLA and AA from January 1, 1994 to March 16, 1999.1âwphi1

The enactment of Republic Act No. 7648, or the Electric Power Crisis Act of 1993 authorized the
President of the Philippines to reorganize NAPOCOR and to upgrade its compensation plan. From
this period, NAPOCOR ceased to be covered by the standardized salary rates of Republic Act No.
6758.

Pursuant to Republic Act No. 7648, then President Fidel V. Ramos issued Memorandum Order No.
198, providing for a different position classification and compensation plan for NAPOCOR
employees to take effect on January 1, 1994. The compensation plan states:

SEC. 2. COMPENSATION PLAN. The NPC Compensation Plan consists of the following:

2.1 Total monthly compensation structure as shown in Annex "A" which shall include:

2.1.1 Monthly basic salary schedule as shown in Annex "B"; and

2.1.2 Schedule of monthly allowances as provided in Annex "C" which include existing government
mandated allowances such as PERA and Additional Compensation, and Rice Subsidy, and
Reimbursable Allowances, i.e., RRA, RT A and RDA, provided however, that the NP Board is
hereby authorized to further rationalize and/or revise the rates for such allowances as may be
necessary; and

2.2 "Pay for Performance". Pay for Performance is a variable component of the total annual cash
compensation consisting of bonuses and incentives but excluding the 13th month pay, earned on
the basis of corporate and/or group performance or productivity, following a Productivity
Enhancement Program (PEP), and step-increases given in recognition of superior individual
performance using a performance rating system, duly approved by the NP Board. The corporate
or group productivity or incentive bonus shall range from zero (0) to four (4) months basic salary,
to be given in lump-sum for each year covered by the PEP. The in-step increases on the other
hand, once granted, shall form part of the monthly basic salary.

Thus, Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 is inapplicable for the
period following the enactment of Republic Act No. 7648. This case interprets provisions of
Republic Act No. 6758. The "legal limbo" contemplated in this case does not apply to a period
where a new position classification and compensation plan has already been enacted. Thus,
entitlement to the back pay of COLA and AA from 1994 to 1999 should not be premised on this
case.
The question as to whether the COLA and AA were deemed integrated in this new compensation
plan was the subject of then NAPOCOR President del Callar's letter178 dated May 10, 2007 to
Secretary Andaya, Jr. Secretary Andaya, Jr. replied:

It may also be worth mentioning that in CY 1994, NPC adopted a new Salary Pay [sic] pursuant
to RA No. 6743 [sic], the Energy Power Crisis Act, as implemented by Memorandum Order (MO)
198. Under the said Salary Plan, the COLA and AA are no longer subsisting and these have already
been integrated into the standardized salary of employees effective July 1, 1989.179

NAPOCOR's Office of the General Counsel disagreed with this assessment, stating that
Memorandum Order No. 198, series of 1994 did not include the COLA and AA "presumably due
to the belief that DBM-CCC No. 10 was still in effect (the Supreme Court decisions declaring the
said Circular as ineffective were not yet promulgated as of that time)."180 This sentiment was
echoed in President del Callar's letter181 dated October 9, 2007 to Secretary Andaya, Jr.

This statement, however, fails to take into account that DBM-CCC No. 10 implements Republic
Act No. 6758,182 not Republic Act No. 7648. By January 1, 1994, NAPOCOR officers and employees
were no longer covered by the standardized salary rates of Republic Act No. 6758. Thus, the
effectivity or ineffectivity of DBM-CCC No. 10 from January 1, 1994 is irrelevant.

Memorandum Order No. 198, series of 1994 only includes the basic salary and the following
allowances: Personal Economic Relief Allowance (PERA) and Additional Compensation, Rice
Subsidy, and Reimbursable Allowances. Republic Act No. 7648 also provides that only the
President of the Philippines can upgrade the compensation of NAPOCOR personnel:

SECTION 5. Reorganization of the National Power Corporation. - The President is hereby


empowered to reorganize the NAPOCOR, to make it more effective, innovative, and responsive
to the power crisis. For this purpose, the President may abolish or create offices; split, group, or
merge positions; transfer functions, equipment, properties, records and personnel; institute
drastic cost-cutting measures and take such other related actions necessary to carry out the
purpose herein declared. Nothing in this Section shall result in the diminution of the present
salaries and benefits of the personnel of the NAPOCOR: Provided, That any official or employee
of the NAPOCOR who may be phased out by reason of the reorganization authorized herein shall
be entitled to such benefits as may be determined by the Board of Directors of the NAPOCOR,
with the approval of the President.

The President may upgrade the compensation of the personnel of the NAPOCOR at rates
comparable to those prevailing in privately-owned power utilities to take effect upon approval by
Congress of the NAPOCOR's budget for 1994. (Emphasis supplied)

In issuing Memorandum No. 198, series of 1994, the President determined that the New
Compensation Plan for the NAPOCOR personnel shall include the basic salary, PERA and Additional
Compensation, Rice Subsidy, and Reimbursable Allowances. The discretion of the President to
specify the new salary rates, however, is qualified by the statement: "Nothing in this Section shall
result in the diminution of the present salaries and benefits of the personnel of the
NAPOCOR." This qualification is repeated in Section 7 of the Memorandum:
SEC. 7. NON-DIMINUTION IN PAY. Nothing in this Order shall result in the reduction of the
compensation and benefits entitlements of NPC personnel prior to the effectivity of this Order.

The Board of Directors is authorized to rationalize or revise only the rates for PERA and Additional
Compensation, Rice Subsidy, and Reimbursable Allowances:

2.1.2 Schedule of monthly allowances as provided in Annex "C" which include existing government
mandated allowances such as PERA and Additional Compensation, and Rice Subsidy, and
Reimbursable Allowances, i.e., RRA, RTA and RDA, provided however, that the NP Board is hereby
authorized to further rationalize and/or revise the rates for such allowances as may be
necessary[.]183(Emphasis supplied)

As previously discussed, COLA and AA were already deemed integrated into the basic
standardized salary from July 1, 1989 to December 31, 1993. These allowances need not be
separately granted. All basic salaries by December 31, 1993 already included the COLA and AA.

Thus, in order to conclude that the NAPOCOR employees were not able to receive their COLA and
AA upon the implementation of the New Compensation Plan, it must first be determined whether
its implementation resulted in the diminution of their salaries and benefits.

Evidence on record, however, shows that the affected employees suffered no diminution in their
compensation upon the implementation of the New Compensation Plan on January 1, 1994.

The pay slips184 of an employee, Melinda A. Bancolita, from December 1993 to January 1994 are
instructive. For the period of December 1 to 7, 1993, she had the position of "SR IRD/IRM
OFFICER", and was receiving a total compensation of ₱8,017.40.185 From January 1 to 7, 1994,
she held the same position and was still receiving a total compensation of ₱8,017.40.186 The pay
slips187 of another employee, Corazon C. San Andres, from this period are similarly instructive.
For the period of December 1 to 7, 1993, she held the position of "SECRETARY A," and was
receiving a total compensation of ₱3,917.00.188 From January 1 to 7, 1993, she held the same
position and was receiving the same amount of compensation.189

Considering there was no diminution in the salaries and benefits of the NAPOCOR employees
upon the implementation of the New Compensation Plan, there was no basis for the Regional
Trial Court to grant NECU and NEWU's money claims. To repeat, the indiscriminate grant of
additional allowances would be tantamount to additional compensation, which is proscribed by
Section 8,190 Article IX (B) of the Constitution.

VI

The Regional Trial Court committed grave abuse of discretion in ordering the immediate execution
of its November 28, 2008 Decision even before the lapse of the period for appeal.

Execution issues as a matter of right only "upon the expiration of the period to appeal ... if no
appeal has been duly perfected."191 The Regional Trial Court denied the Office of the Solicitor
General's Notice of Appeal and the Department of Budget and Management's Motion for
Reconsideration in the Joint Order dated March 20, 2009. From this date, the parties had 15 days
to file an ordinary appeal,192 a petition for review with the Court of Appeals193or a petition for
review with the Supreme Court.194 They also had 60 days to file a petition for certiorari,
prohibition, or mandamus with the Court of Appeals or the Supreme Court.195 Despite these clear
periods for appeal, the Regional Trial Court issued a Certificate of Finality of Judgment196 and a
Writ of Execution197 on March 23, 2009, or a mere three (3) calendar days from the issuance of
its Joint Order.

The Regional Trial Court premises its order of finality on the alleged failure of the Office of the
Solicitor General, as counsel for NAPOCOR and its Board of Directors, to perfect its appeal.198 As
previously discussed, the Office of the Solicitor General's Notice of Appeal was timely filed. The
Regional Trial Court failed to take into account that by the time the Office of the Solicitor General
filed its appeal, it ceased to represent NAPOCOR and its Board of Directors. The Decision dated
November 28, 2008 should not have been considered final and executory as against the Office of
the Solicitor General, acting as the People's Tribune.

Even assuming that the Office of the Solicitor General failed to file a timely appeal, the Department
of Budget and Management, through Secretary Andaya, Jr., was able to file its Motion for
Reconsideration of the November 28, 2008 Decision. Upon the denial of the Motion, Secretary
Andaya, Jr. still had a fresh period within which to appeal the Decision with a higher court. Thus,
the November 28, 2008 Decision would not have been considered final and executory as against
the Department of Budget and Management.

The Regional Trial Court likewise found "strong and compelling reasons"199 for the immediate
issuance of its Decision. In particular, it stated that:

[O]n the basis of the testimonies of the aforementioned key officers of the NPC who categorically
stated that NPC had sold and has been selling all its power plants and transmission lines and the
proceeds thereof were given to Power Sector Assets and Liabilities Management ["PSA[L]M"] for
payment of its obligations to the exclusion of the present COLAs and AAs; that at present, NPC
has ₱400 Million bank deposits but the payment of COLAs and AAs can be sourced from the
revenues of generated funds and guaranteed receivables from 58 power customers; that the
effect of selling all the NPC's power plants and transmission lines will result to lesser future income
that cannot meet the present judgment award. That if ordered by the Court, the management
can set aside funds based on the present generated income revenues where NPC has been
receiving ₱10 Billion per month from the present 58 customers.200 (Citation omitted)

The preparation of corporate operating budgets of government-owned and controlled


corporations is governed by Executive Order No. 518, series of 1979.201 Through Republic Act No.
7638,202 NAPOCOR was placed under the supervision of the Department of Energy, and their
corporate operating budgets were submitted to Congress for approval.203

An examination of the testimony the Regional Trial Court relied on reveals that the corporate
officers attempted to mask the back payment of additional COLA and AA as a Certified Obligation,
to avoid scrutiny by Congress:

COURT: Can you explain to the Court what does the administration or management of National
Power Corporation, as certified obligation insofar as this matter is concerned?
[NPC VP EDMUNDO ANGULUAN]: No, your Honor, what we do is we advise the finance to include
this in our certified obligation at the end of the year. That should be the case.

COURT: Are you telling to the Court that this obligation amounting to ₱6,496,055,339.98 plus 2
billion estimated amount of back COLA for those persons who claimed their salary thru
disbursement voucher were included in the year 2005 of certified obligation?

A: Yes, your Honor.

COURT: So what happened after the same has been submitted in Congress, was it approved by
Congress?

A: It is only internal to us, your Honor, the inclusion of the certified obligation submitted to the
Finance is internal to the NPC and this has been carried on for two (2) [years}. Because during
the first year, we were not successful in getting paid of the cost of living so we included it again
in the CO.

COURT: So, when it is included as certified obligation, can you please explain to the Court in a
common parlance, what did the corporation do insofar as this obligations are concerned? Am I
correct to say or to state that as a certified obligation that seems to be that the NPC or the
management recognized this proposition will be due and payable?

A: Yes, your Honor.

COURT: Does it also mean that as certified obligation they are now earmarking portion of their
funds for the payments of this obligation?

A: Yes, your Honor.204 (Emphasis supplied, citation omitted)

It should be noted that the corporate officers of NAPOCOR, including Vice President Anguluan,
also stand to benefit from the back payment of any additional COLA and AA.

In any case, the back payment of any compensation to public officers and employees cannot be
done through a writ of execution. Under Section 26 of the Government Auditing Code of the
Philippines,205 only the Commission on Audit has the jurisdiction to settle claims "of any sort"
against the government:

SECTION 26. General Jurisdiction. - The authority and powers of the Commission shall extend to
and comprehend all matters relating to auditing procedures, systems and controls, the keeping
of the general accounts of the Government, the preservation of vouchers pertaining thereto for
a period of ten years, the examination and inspection of the books, records, and papers relating
to those accounts; and the audit and settlement of the accounts of all persons respecting funds
or property received or held by them in an accountable capacity, as well as the examination,
audit, and settlement of all debts and claims of any sort due from or owing to the Government
or any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all
government-owned or controlled corporations, including their subsidiaries, and other self-
goveming [sic] boards, commissions, or agencies of the Government, and as herein prescribed,
including non-governmental entities subsidized by the government, those funded by donation
through the government, those required to pay levies or government share, and those for which
the government has put up a counterpart fund or those partly funded by the government.
(Emphasis supplied)

Money claims and judgments against the government must first be filed with the Commission on
Audit. Trial courts have already been strongly cautioned against the issuance of writs of execution
in cases involving the disbursement of public funds in Supreme Court Administrative Circular No.
10-2000:206

[SUPREME COURT] ADMINISTRATIVE CIRCULAR NO. 10-2000

TO: All Judges of Lower Courts

SUBJECT: Exercise of Utmost Caution, Prudence and Judiciousness in the Issuance of Writs of
Execution to Satisfy Money Judgments Against Government Agencies and Local Government Units

In order to prevent possible circumvention of the rules and procedures of the Commission on
Audit, judges are hereby enjoined to observe utmost caution, prudence and judiciousness in the
issuance of writs of execution to satisfy money judgments against government agencies and local
government units.

Judges should bear in mind that in Commissioner of Public Highways v. San Diego (31 SCRA 617,
625 [1970]), this Court explicitly stated:

The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant's action 'only up to the completion of proceedings
anterior to the stage of execution' and that the power of the Court ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the corresponding appropriation as required
by law. The functions and public services rendered by the State cannot be allowed to be paralyzed
or disrupted by the diversion of public funds from their legitimate and specific objects, as
appropriated by law.

Moreover, it is settled jurisprudence that upon determination of State liability, the prosecution,
enforcement or satisfaction thereof must still be pursued in accordance with the rules and
procedures laid down in P.D. No. 1445 [,] otherwise known as the Government Auditing Code of
the Philippines (Department of Agriculture [vs.] NLRC, 227 SCRA 693, 701- 02 [1993]
citing Republic vs. Villasor, 54 SCRA 84 [1973]). All money claims against the Government must
first be filed with the Commission on Audit which must act upon it within sixty days. Rejection of
the claim will authorize the claimant to elevate the matter to the Supreme Court on certiorari and
in effect sue the State thereby (P.D. 1445, Sections 49-50)[.]

Thus, in National Electrification Administration v. Morales,207 this Court held that while any
entitlement to the back payment of allowances under Republic Act No. 6758 may be adjudicated
before the trial court, the parties must file a separate action before the Commission on Audit for
the satisfaction of any judgment award.208
The Regional Trial Court should have been more prudent in granting the immediate execution,
considering that the execution of the judgment award involves the payment of almost ₱8.5 billion
in public funds. As previously discussed, there was no legal basis to grant the back payment of
additional COLA and AA to NAPOCOR personnel from July 1, 1989 to March 16, 1999.

WHEREFORE, the Petitions for Certiorari and Prohibition in G.R. Nos.


187257 and 187776 are GRANTED. The Decision dated November 28, 2008, Joint Order
dated March 20, 2009, and Writ of Execution dated March 23, 2009 of the Regional Trial Court of
Quezon City, Branch 84 in Civil Case No. Q-07-61728 are VACATED and SET ASIDE. The
Temporary Restraining Order dated April 15, 2009 is made PERMANENT.

SO ORDERED.