Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-19650 September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-
appellant.

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and
laid the groundwork for a promotional scheme calculated to drum up patronage for its oil
products. Denominated "Caltex Hooded Pump Contest", it calls for participants therein to
estimate the actual number of liters a hooded gas pump at each Caltex station will dispense
during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its
advertising agency, and their immediate families excepted, participation is to be open
indiscriminately to all "motor vehicle owners and/or licensed drivers". For the privilege to
participate, no fee or consideration is required to be paid, no purchase of Caltex products
required to be made. Entry forms are to be made available upon request at each Caltex station
where a sealed can will be provided for the deposit of accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level, called "Dealer
Contest", the contestant whose estimate is closest to the actual number of liters dispensed by the
hooded pump thereat is to be awarded the first prize; the next closest, the second; and the next,
the third. Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a
Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and
a screwdriver set for third. The first-prize winner in each station will then be qualified to join in
the "Regional Contest" in seven different regions. The winning stubs of the qualified contestants
in each region will be deposited in a sealed can from which the first-prize, second-prize and
third-prize winners of that region will be drawn. The regional first-prize winners will be entitled
to make a three-day all-expenses-paid round trip to Manila, accompanied by their respective
Caltex dealers, in order to take part in the "National Contest". The regional second-prize and
third-prize winners will receive cash prizes of P500 and P300, respectively. At the national level,
the stubs of the seven regional first-prize winners will be placed inside a sealed can from which
the drawing for the final first-prize, second-prize and third-prize winners will be made. Cash
prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for
third; and P650 as consolation prize for each of the remaining four participants.
Foreseeing the extensive use of the mails not only as amongst the media for publicizing the
contest but also for the transmission of communications relative thereto, representations were
made by Caltex with the postal authorities for the contest to be cleared in advance for mailing,
having in view sections 1954(a), 1982 and 1983 of the Revised Administrative Code, the
pertinent provisions of which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the

following classes, whether sealed as first-class matter or not, shall be imported into the
Philippines through the mails, or to be deposited in or carried by the mails of the
Philippines, or be delivered to its addressee by any officer or employee of the Bureau of
Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining
to, or conveying or purporting to convey any information concerning any lottery, gift
enterprise, or similar scheme depending in whole or in part upon lot or chance, or any
scheme, device, or enterprise for obtaining any money or property of any kind by means
of false or fraudulent pretenses, representations, or promises.

"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or

company is engaged in conducting any lottery, gift enterprise, or scheme for the
distribution of money, or of any real or personal property by lot, chance, or drawing of
any kind, or that any person or company is conducting any scheme, device, or enterprise
for obtaining money or property of any kind through the mails by means of false or
fraudulent pretenses, representations, or promises, the Director of Posts may instruct any
postmaster or other officer or employee of the Bureau to return to the person, depositing
the same in the mails, with the word "fraudulent" plainly written or stamped upon the
outside cover thereof, any mail matter of whatever class mailed by or addressed to such
person or company or the representative or agent of such person or company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer
service.—The Director of Posts may, upon evidence satisfactory to him that any person
or company is engaged in conducting any lottery, gift enterprise or scheme for the
distribution of money, or of any real or personal property by lot, chance, or drawing of
any kind, or that any person or company is conducting any scheme, device, or enterprise
for obtaining money or property of any kind through the mails by means of false or
fraudulent pretenses, representations, or promise, forbid the issue or payment by any
postmaster of any postal money order or telegraphic transfer to said person or company
or to the agent of any such person or company, whether such agent is acting as an
individual or as a firm, bank, corporation, or association of any kind, and may provide by
regulation for the return to the remitters of the sums named in money orders or
telegraphic transfers drawn in favor of such person or company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31,
1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to
justify its position that the contest does not violate the anti-lottery provisions of the Postal Law.
Unimpressed, the then Acting Postmaster General opined that the scheme falls within the
purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel's
letter of December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that
there being involved no consideration in the part of any contestant, the contest was not, under
controlling authorities, condemnable as a lottery. Relying, however, on an opinion rendered by
the Secretary of Justice on an unrelated case seven years before (Opinion 217, Series of 1953),
the Postmaster General maintained his view that the contest involves consideration, or that, if it
does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in
his letter of December 10, 1960 not only denied the use of the mails for purposes of the proposed
contest but as well threatened that if the contest was conducted, "a fraud order will have to be
issued against it (Caltex) and all its representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief
against Postmaster General Enrico Palomar, praying "that judgment be rendered declaring its
'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to
allow petitioner the use of the mails to bring the contest to the attention of the public". After
issues were joined and upon the respective memoranda of the parties, the trial court rendered
judgment as follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex
Hooded Pump Contest' announced to be conducted by the petitioner under the rules
marked as Annex B of the petitioner does not violate the Postal Law and the respondent
has no right to bar the public distribution of said rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether
the petition states a sufficient cause of action for declaratory relief; and second, whether the
proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in
seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the
applicable legal basis for the remedy at the time it was invoked, declaratory relief is available to
any person "whose rights are affected by a statute . . . to determine any question of construction
or validity arising under the . . . statute and for a declaration of his rights thereunder" (now
section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to
established jurisprudence on the matter, laid down certain conditions sine qua non therefor, to
wit: (1) there must be a justiciable controversy; (2) the controversy must be between persons
whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in
the controversy; and (4) the issue involved must be ripe for judicial determination (Tolentino vs.
The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs.
Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R.
No. L-8964, July 31, 1956). The gravamen of the appellant's stand being that the petition herein
states no sufficient cause of action for declaratory relief, our duty is to assay the factual bases
thereof upon the foregoing crucible.
As we look in retrospect at the incidents that generated the present controversy, a number of
significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of some
consequence, concededly has the unquestioned right to exploit every legitimate means, and to
avail of all appropriate media to advertise and stimulate increased patronage for its products. In
contrast, the appellant, as the authority charged with the enforcement of the Postal Law,
admittedly has the power and the duty to suppress transgressions thereof — particularly thru the
issuance of fraud orders, under Sections 1982 and 1983 of the Revised Administrative Code,
against legally non-mailable schemes. Obviously pursuing its right aforesaid, the appellee laid
out plans for the sales promotion scheme hereinbefore detailed. To forestall possible difficulties
in the dissemination of information thereon thru the mails, amongst other media, it was found
expedient to request the appellant for an advance clearance therefor. However, likewise by virtue
of his jurisdiction in the premises and construing the pertinent provisions of the Postal Law, the
appellant saw a violation thereof in the proposed scheme and accordingly declined the request. A
point of difference as to the correct construction to be given to the applicable statute was thus
reached. Communications in which the parties expounded on their respective theories were
exchanged. The confidence with which the appellee insisted upon its position was matched only
by the obstinacy with which the appellant stood his ground. And this impasse was climaxed by
the appellant's open warning to the appellee that if the proposed contest was "conducted, a fraud
order will have to be issued against it and all its representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's
insistent assertion of its claim to the use of the mails for its proposed contest, and the challenge
thereto and consequent denial by the appellant of the privilege demanded, undoubtedly spawned
a live controversy. The justiciability of the dispute cannot be gainsaid. There is an active
antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a
real — not a mere theoretical — question or issue. The contenders are as real as their interests
are substantial. To the appellee, the uncertainty occasioned by the divergence of views on the
issue of construction hampers or disturbs its freedom to enhance its business. To the appellant,
the suppression of the appellee's proposed contest believed to transgress a law he has sworn to
uphold and enforce is an unavoidable duty. With the appellee's bent to hold the contest and the
appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by
the ominous shadow of an imminent and inevitable litigation unless their differences are settled
and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs. Republic of the Philippines,
G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is
long past when it can rightly be said that merely the appellee's "desires are thwarted by its own
doubts, or by the fears of others" — which admittedly does not confer a cause of action. Doubt,
if any there was, has ripened into a justiciable controversy when, as in the case at bar, it was
translated into a positive claim of right which is actually contested (III Moran, Comments on the
Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast Theaters, 36 Ariz.,
251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of
construction because the said appellant "simply applied the clear provisions of the law to a given
set of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief.
The infirmity of this pose lies in the fact that it proceeds from the assumption that, if the
circumstances here presented, the construction of the legal provisions can be divorced from the
matter of their application to the appellee's contest. This is not feasible. Construction, verily, is
the art or process of discovering and expounding the meaning and intention of the authors of the
law with respect to its application to a given case, where that intention is rendered doubtful,
amongst others, by reason of the fact that the given case is not explicitly provided for in the
law (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not the
scheme proposed by the appellee is within the coverage of the prohibitive provisions of the
Postal Law inescapably requires an inquiry into the intended meaning of the words used therein.
To our mind, this is as much a question of construction or interpretation as any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand
can amount to nothing more than an advisory opinion the handing down of which is anathema to
a declaratory relief action. Of course, no breach of the Postal Law has as yet been committed.
Yet, the disagreement over the construction thereof is no longer nebulous or contingent. It has
taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate
resolution. With the battle lines drawn, in a manner of speaking, the propriety — nay, the
necessity — of setting the dispute at rest before it accumulates the asperity distemper, animosity,
passion and violence of a full-blown battle which looms ahead (III Moran, Comments on the
Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasing the
language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in
22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it
has been cast, would be to force it to choose between undesirable alternatives. If it cannot obtain
a final and definitive pronouncement as to whether the anti-lottery provisions of the Postal Law
apply to its proposed contest, it would be faced with these choices: If it launches the contest and
uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened with
the certain imposition, of a fraud order with its concomitant stigma which may attach even if the
appellee will eventually be vindicated; if it abandons the contest, it becomes a self-appointed
censor, or permits the appellant to put into effect a virtual fiat of previous censorship which is
constitutionally unwarranted. As we weigh these considerations in one equation and in the spirit
of liberality with which the Rules of Court are to be interpreted in order to promote their object
(section 1, Rule 1, Revised Rules of Court) — which, in the instant case, is to settle, and afford
relief from uncertainty and insecurity with respect to, rights and duties under a law — we can see
in the present case any imposition upon our jurisdiction or any futility or prematurity in our
intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down
in this case if he believes that it will not have the final and pacifying function that a declaratory
judgment is calculated to subserve. At the very least, the appellant will be bound. But more than
this, he obviously overlooks that in this jurisdiction, "Judicial decisions applying or interpreting
the law shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In effect,
judicial decisions assume the same authority as the statute itself and, until authoritatively
abandoned, necessarily become, to the extent that they are applicable, the criteria which must
control the actuations not only of those called upon to abide thereby but also of those in duty
bound to enforce obedience thereto. Accordingly, we entertain no misgivings that our resolution
of this case will terminate the controversy at hand.
It is not amiss to point out at this juncture that the conclusion we have herein just reached is not
without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a
corporation engaged in promotional advertising was advised by the county prosecutor that its
proposed sales promotion plan had the characteristics of a lottery, and that if such sales
promotion were conducted, the corporation would be subject to criminal prosecution, it was held
that the corporation was entitled to maintain a declaratory relief action against the county
prosecutor to determine the legality of its sales promotion plan. In pari materia, see also: Bunis
vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo,
Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical
terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely non-
mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny
the use of the facilities of the postal service to, any information concerning "any lottery, gift
enterprise, or scheme for the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind". Upon these words hinges the resolution of the second issue
posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate",
Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the postal
authorities under the abovementioned provisions of the Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the authoritative one for this
jurisdiction is that of the United States Supreme Court, in analogous cases having to do
with the power of the United States Postmaster General, viz.: The term "lottery" extends
to all schemes for the distribution of prizes by chance, such as policy playing, gift
exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three
essential elements of a lottery are: First, consideration; second, prize; and third, chance.
(Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs. Coyne [1903], 194
U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker
[1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction
Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too
obvious in the disputed scheme to be the subject of contention. Consequently as the appellant
himself concedes, the field of inquiry is narrowed down to the existence of the element of
consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in
the same case just cited, this Court has laid down a definitive yard-stick in the following terms
—

In respect to the last element of consideration, the law does not condemn the gratuitous
distribution of property by chance, if no consideration is derived directly or indirectly
from the party receiving the chance, but does condemn as criminal schemes in which a
 valuable consideration of some kind is paid directly or indirectly for the chance to draw a
prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in
which the invitation to participate therein is couched. Thus —

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to
buy anything? Simply estimate the actual number of liter the Caltex gas pump with the
hood at your favorite Caltex dealer will dispense from — to —, and win valuable
prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought,
any service be rendered, or any value whatsoever be given for the privilege to participate. A
prospective contestant has but to go to a Caltex station, request for the entry form which is
available on demand, and accomplish and submit the same for the drawing of the winner.
Viewed from all angles or turned inside out, the contest fails to exhibit any discernible
consideration which would brand it as a lottery. Indeed, even as we head the stern injunction,
"look beyond the fair exterior, to the substance, in order to unmask the real element and
pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra,
p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a
gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex
products simply to win a prize would actually be indirectly paying a consideration for the
privilege to join the contest. Perhaps this would be tenable if the purchase of any Caltex product
or the use of any Caltex service were a pre-requisite to participation. But it is not. A contestant, it
hardly needs reiterating, does not have to buy anything or to give anything of value.

Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would
naturally benefit the sponsor in the way of increased patronage by those who will be encouraged
to prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The
required element of consideration does not consist of the benefit derived by the proponent of the
contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.)
788, is whether the participant pays a valuable consideration for the chance, and not whether
those conducting the enterprise receive something of value in return for the distribution of the
prize. Perspective properly oriented, the standpoint of the contestant is all that matters, not that of
the sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive,
some benefit in the way of patronage or otherwise, as a result of the drawing; does not
supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App.,
98 S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest"
proposed by the appellee is not a lottery that may be administratively and adversely dealt with
under the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money,
or of any real or personal property by lot, chance, or drawing of any kind", which is equally
prescribed? Incidentally, while the appellant's brief appears to have concentrated on the issue of
consideration, this aspect of the case cannot be avoided if the remedy here invoked is to achieve
its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the
appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the
Secretary of Justice, which opined in effect that a scheme, though not a lottery for want of
consideration, may nevertheless be a gift enterprise in which that element is not essential, the
determination of whether or not the proposed contest — wanting in consideration as we have
found it to be — is a prohibited gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit
words, there appears to be a consensus among lexicographers and standard authorities that the
term is commonly applied to a sporting artifice of under which goods are sold for their market
value but by way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850;
34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with
Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs.
Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs.
State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly cannot embrace
the scheme at bar. As already noted, there is no sale of anything to which the chance offered is
attached as an inducement to the purchaser. The contest is open to all qualified contestants
irrespective of whether or not they buy the appellee's products.

Going a step farther, however, and assuming that the appellee's contest can be encompassed
within the broadest sweep that the term "gift enterprise" is capable of being extended, we think
that the appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings
there are indeed holding that a gift enterprise involving an award by chance, even in default of
the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs.
States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E.,
88; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114
Mont. 52). But this is only one side of the coin. Equally impressive authorities declare that, like a
lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the tripartite
elements of prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113
Colo., 326; D'Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S.,
2d., 796; City and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S.,
1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga.
App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is
explained by the fact that the specific statutory provisions relied upon are not identical. In some
cases, as pointed out in 54 C.J.S., 851, the terms "lottery" and "gift enterprise" are used
interchangeably (Bills vs. People, supra); in others, the necessity for the element of consideration
or chance has been specifically eliminated by statute. (54 C.J.S., 351-352, citing Barker vs.
State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson
that we derive from this state of the pertinent jurisprudence is, therefore, that every case must be
resolved upon the particular phraseology of the applicable statutory provision.
Taking this cue, we note that in the Postal Law, the term in question is used in association with
the word "lottery". With the meaning of lottery settled, and consonant to the well-known
principle of legal hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon
although only insofar as the element of chance is concerned — it is only logical that the term
under a construction should be accorded no other meaning than that which is consistent with the
nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a
consideration, so also must the term "gift enterprise" be so construed. Significantly, there is not
in the law the slightest indicium of any intent to eliminate that element of consideration from the
"gift enterprise" therein included.

This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to
the determination thereof being an accepted extrinsic aid in statutory construction. Mail fraud
orders, it is axiomatic, are designed to prevent the use of the mails as a medium for
disseminating printed matters which on grounds of public policy are declared non-mailable. As
applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized
necessity to suppress their tendency to inflame the gambling spirit and to corrupt public morals
(Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208). Since in gambling it is inherent that
something of value be hazarded for a chance to gain a larger amount, it follows ineluctably that
where no consideration is paid by the contestant to participate, the reason behind the law can
hardly be said to obtain. If, as it has been held —

Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is

not resorted to as a device to evade the law and no consideration is derived, directly or
indirectly, from the party receiving the chance, gambling spirit not being cultivated or
stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words
and Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded
to hold that, under the prohibitive provisions of the Postal Law which we have heretofore
examined, gift enterprises and similar schemes therein contemplated are condemnable only if,
like lotteries, they involve the element of consideration. Finding none in the contest here in
question, we rule that the appellee may not be denied the use of the mails for purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory
relief, and that the "Caltex Hooded Pump Contest" as described in the rules submitted by the
appellee does not transgress the provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

[G.R. No. L-8451. December 20, 1957.]

THE ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO,

INC., Petitioner, v. THE LAND REGISTRATION COMMISSION and THE REGISTER
OF DEEDS OF DAVAO CITY, Respondents.

Teodoro Padilla for Petitioner.

Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose G. Bautista and
Solicitor Troadio T. Quianzon, Jr. for Respondents.

SYLLABUS

1. CORPORATIONS SOLE; COMPONENTS AND PURPOSE OF; POWER TO HOLD AND

TRANSMIT CHURCH PROPERTIES TO HIS SUCCESSOR IN OFFICE. — A corporation
sole is a special form of corporation usually associated with clergy . . . designed to facilitate the
exercise of the functions of ownership of the church which was regarded as the property owner (I
Bouvier’s Law Dictionary, p. 682-683). It consists of one person only, and his successors (who
will always be one at a time), in some particular, who are incorporated by law in order to give
them some legal advantages particularly that of perpetuity which in their natural persons they
could not have . . . (Reid v. Barry, 93 Fla. 849 112 So. 846). Through this legal fiction, church
properties acquired by the incumbent of a corporation sole pass, by operation of law, upon his
death not to his personal heirs but to his successor in office. A corporation sole, therefore, is
created not only to administer the temporalities of the church or religious society where he
belongs, but also to hold and transmit the same to his successor in said office.

2. ID.; PERSONALITY OF SEPARATE AND DISTINCT FROM THAT OF ROMAN

PONTIFF. — Although a branch of the Universal Roman Catholic Apostolic Church, every
Roman Catholic Church in different countries, if it exercises its mission and is lawfully
incorporated in accordance with laws of the country where it is located, is considered an entity or
person with all the rights and privileges granted to such artificial being under laws of that
country, separate and distinct from the personality of the Roman Pontiff or the Holy See, without
prejudice to its religious relations with the latter which are governed by the Common Law or
their rules and regulations.

3. ID.; ID.; POWER AND QUALIFICATION TO PURCHASE IN ITS NAME PRIVATE

LANDS; 60 PER CENTUM REQUIREMENT NOT INTENDED TO CORPORATION SOLE.
— Under the circumstances of the present case, it is safe to state that even before the
establishment of the Philippine Commonwealth and of the Republic of the Philippines every
corporation sole then organized and registered had by express provision of law (Corporation
Law, Public Act. 1459) the necessary power and qualification to purchase in its name private
lands located in the territory in which it exercised its functions or ministry and for which it was
created, independently of the nationality of its incumbent unique and single number and head,
the bishop of the diocese. It can be also maintained without fear of being gainsaid that the
Roman Catholic Apostolic Church in the Philippines has no nationality and that the frames of the
Constitution did not have in mind the religious corporation sole when they provided that 60 per
centum of the capital thereof be owned by Filipino citizens. Thus, if this constitutional provision
were not intended for corporation sole, it is obvious that this could not be regulated or restricted
by said provision.

4. ID.; ID.; ID.; ID.; CONSTITUTIONAL REQUIREMENT LIMITED TO OWNERSHIP NOT

TO CONTROL. — But the Corporation Law and the Canon Law are explicit in their provisions
that a corporation sole or "ordinary" is not the owner of the properties that he may acquire but
merely the administrator thereof and holds the same in trust for the church to which the
corporation is an organized and constituents part. Being mere administrator of the temporalities
or properties titled in his name, the constitutional provision requiring 60 per centum Filipino
ownership is not applicable. The said constitutional provision is limited by it terms to ownership
alone and does not extend to control unless the control over the property affected has been
devised to circumvent the real purpose of the constitution.

5. ID.; CORPORATION SOLE WITHOUT NATIONALITY; NATIONALITY OF

CONSTITUENTS DETERMINES WHETHER CONSTITUTIONAL REQUIREMENTS IS
APPLICABLE. — The corporation sole by reason of their peculiar constitution and form of
operation have no designed owner of its temporalities, although by the terms of the law it can be
safely implied that they ordinarily hold them in trust for the benefit of the Roman Catholic
faithful of their respective locality or diocese. They can not be considered as aliens because they
have no nationality at all. In determining, therefore, whether the constitutional provision
requiring 60 per centum Filipino capital is applicable to corporations sole, the nationality of the
constituents of the diocese, and not the nationality of the actual incumbent of the parish, must be
taken into consideration. In the present case, even if the question of nationality be considered, the
aforesaid constitutional requirement is fully met and satisfied, considering that the corporation
sole in question is composed of an overwhelming majority of Filipinos.

DECISION

FELIX, J.:

This is a petition for mandamus filed by the Roman Catholic Apostolic Administrator of Davao
seeking the reversal of a resolution issued by the Land Registration Commissioner in L.R.C.
Consulta No. 14. The facts of the case are as follows:
On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao,
executed a deed of sale of a parcel of land located in the same city covered by Transfer
Certificate of Title No. 2263, in favor of the Roman Catholic Administrator of Davao, Inc., a
corporation sole organized and existing in accordance with Philippine laws, with Msgr. Clovis
Thibault, a Canadian citizen, as actual incumbent. When the deed of sale was presented to the
Register of Deeds of Davao for registration, the latter

having in mind a previous resolution of the Fourth Branch of the Court of First Instance of
Manila wherein the Carmelite Nuns of Davao were made to prepare an affidavit to the effect that
60 per cent of the members of their corporation were Filipino citizens when they sought to
register in favor of their congregation a deed of donation of a parcel of land —

required said corporation sole to submit a similar affidavit declaring that 60 per cent of the
members thereof were Filipino citizens.

The vendee in a letter dated June 28, 1954, expressed willingness to submit an affidavit, but not
in the same tenor as that made by the Prioress of the Carmelite Nuns because the two cases were
not similar, for whereas the congregation of the Carmelite Nuns had five incorporators, the
corporation sole has only one; that according to their articles of incorporation, the organization
of the Carmelite Nuns became the owner of properties donated to it, whereas the case at bar, the
totality of the Catholic population of Davao would become the owner of the property sought to
be registered.

As the Register of Deeds entertained some doubts as to the registerability of the document, the
matter was referred to the Land Registration Commissioner en consulta for resolution in
accordance with section 4 of Republic Act No. 1151. Proper hearing on the matter was
conducted by the Commissioner and after the petitioner corporation had filed its memorandum, a
resolution was rendered on September 21, 1954, holding that in view of the provisions of
Sections 1 and 5 of Article XIII of the Philippine Constitution, the vendee was not qualified to
acquire private lands in the Philippines in the absence of proof that at least 60 per centum of the
capital, property, or assets of the Roman Catholic Administrator of Davao, Inc., was actually
owned or controlled by Filipino citizens, there being no question that the present incumbent of
the corporation sole was a Canadian citizen. It was also the opinion of the Land Registration
Commissioner that section 159 of the Corporation Law relied upon by the vendee was rendered
inoperative by the aforementioned provisions of the Constitution with respect to real estate,
unless the precise condition set therein — that at least 60 per cent of its capital is owned by
Filipino citizens — be present, and, therefore, ordered the Register of Deeds of Davao to deny
registration of the deed of sale in the absence of proof of compliance with such condition.

After the motion to reconsider said resolution was denied, an action for mandamus was instituted
with this Court by said corporation sole, alleging that under the Corporation Law, the Canon
Law as well as the settled jurisprudence on the matter, the deed of sale executed by Mateo L.
Rodis in favor of petitioner is actually a deed of sale in favor of the Catholic Church which is
qualified to acquire private agricultural lands for the establishment and maintenance of places of
worship, and prayed that judgment be rendered reserving and setting aside the resolution of the
Land Registration Commissioner in question. In its resolution of November 15, 1954, this Court
gave due course to this petition providing that the procedure prescribed for appeals from the
Public Service Commission or the Securities and Exchange Commission (Rule 43), be followed.

Section 5 of Article XIII of the Philippine Constitution reads as follows:

SEC. 5. Save in cases of hereditary succession, no private agricultural land shall be transferred or
assigned except to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain in the Philippines.

Section 1 of the same Article also provides the following:

SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources
of the Philippines belong to the State, and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines, or to corporations or associations at least
sixty per centum of the capital of which is owned by such citizens, SUBJECT TO ANY
EXISTING RIGHT, grant, lease, or concession AT THE TIME OF THE INAUGURATION OF
THE GOVERNMENT ESTABLISHED UNDER THIS CONSTITUTION. Natural resources,
with the exception of public agricultural land, shall not be alienated, and no license, concession,
or lease for the exploitation, development, or utilization of any of the natural resources shall be
granted for a period exceeding twenty-five years, renewable for another twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and limit of the
grant.

In virtue of the foregoing mandates of the Constitution, who are considered "qualified" to acquire
and hold agricultural lands in the Philippines? What is the effect of these constitutional
prohibition on the right of a religious corporation recognized by our Corporation Law and
registered as a corporation sole, to possess, acquire and register real estates in its name when the
Head, Manager, Administrator or actual incumbent is an alien?

Petitioner consistently maintained that a corporation sole, irrespective of the citizenship of its
incumbent, is not prohibited or disqualified to acquire and hold real properties. The Corporation
Law and the Canon Law are explicit in their provisions that a corporation sole or "ordinary" is
not the owner of the properties that he may acquire but merely the administrator thereof. The
Canon Law also specified that church temporalities are owned by the Catholic Church as a
"moral person" or by the dioceses as minor "moral persons" with the ordinary or bishop as
administrator.

And elaborating on the composition of the Catholic Church in the Philippines, petitioner
explained that as a religious society or organization, it is made up of 2 elements or divisions —
the clergy or religious members and the faithful or lay members. The 1948 figures of the Bureau
of Census and Statistics showed that there were 277,551 Catholics in Davao and aliens residing
therein numbered 3,465. Even granting that all these foreigners are Catholics, petitioner contends
that Filipino citizens form more than 80 per cent of the entire Catholics population of that area.
As to its clergy and religious composition, counsel for petitioner presented the Catholic
Directory of the Philippines for 1954 (Annex A) which revealed that as of that year, Filipino
clergy and women novices comprise already 60.5 per cent of the group. It was, therefore, alleged
that the constitutional requirement was fully met and satisfied.

Respondents, on the other hand, averred that although it might be true that petitioner is not the
owner of the land purchased, yet he has control over the same, with full power to administer,
take possession of, alienate, transfer, encumber, sell or dispose of any or all lands and their
improvements registered in the name of the corporation sole and can collect, receive, demand or
sue for all money or values of any kind that may become due or owing to said corporation, and
vested with authority to enter into agreements with any persons, concerns or entities in
connection with said real properties, or in other words, actually exercising all rights of ownership
over the properties. It was their stand that the theory that properties registered in the name of the
corporation sole are held in trust for the benefit of the Catholic population of a place, as of
Davao in the case at bar, should not be sustained because a conglomeration of persons cannot
just be pointed out as the cestui que trust or recipient of the benefits from the property allegedly
administered in their behalf. Neither can it be said that the mass of people referred to as such
beneficiary exercise any right of ownership over the same. This set-up, respondents argued, falls
short of a trust. Respondents instead tried to prove that in reality, the beneficiary of ecclesiastical
properties are not the members or faithful of the church but someone else, by quoting a portion
of the oath of fidelity subscribed by a bishop upon his elevation to the episcopacy wherein he
promises to render to the Pontifical Father or his successors an account of his pastoral office and
of all things appertaining to the state of this church.

Respondents likewise advanced the opinion that in construing the constitutional provision calling
for 60 per cent Filipino citizenship, the criterion is not membership in the society but ownership
of the properties or assets thereof.

In solving the problem thus submitted to our consideration, We can say the following: A
corporation sole is a special form of corporation usually associated with the clergy. Conceived
and introduced into the common law by sheer necessity, this legal creation which was referred to
as "that unhappy freak of English law" was designed to facilitate the exercise of the functions of
ownership carried on by the clerics for and on behalf of the church which was regarded as the
property owner (See I Bouvier’s Law Dictionary, p. 682-683).

A corporation sole consists of one person only, and his successors (who will always be one at a
time), in some particular station, who are incorporated by law in order to give them some legal
capacities and advantages, particularly that of perpetuity, which in their natural persons they
could not have had. In this sense, the king is a sole corporation; so is a bishop, or deans, distinct
from their several chapters (Reid v. Barry, 93 Fla. 849, 112 So. 846).

The provisions of our Corporation law on religious corporations are illuminating and sustain the
stand of petitioner. Section 154 thereof provides:

SEC 154. — For the administration of the temporalities of any religious denomination, society or
church and the management of the estates and properties thereof, it shall be lawful for the bishop,
chief priest, or presiding elder of any such religious denomination, society or church to become a
corporation sole, unless inconsistent with the rules, regulations or discipline of his religious
denomination, society, or church or forbidden by competent authority thereof.

See also the pertinent provisions of the succeeding sections of the same Corporation Law copied
hereunder:

SEC. 155. In order to become a corporation sole the bishop, chief priest, or presiding elder of
any religious denomination, society, or church must file with the Securities and Exchange
Commissioner articles of incorporation setting forth the following facts:

x x x

(3) That as such bishop, chief priest, or presiding elder he is charged with the administration of
the temporalities and the management of the estates, and properties of his religious
denomination, society, or church within its territorial jurisdiction, describing it;

x x x

(As amended by Commonwealth Act No. 287).

SEC. 157. From and after the filing with the Securities & Exchange Commissioner of the said
articles of incorporation, verified by affidavit or affirmation as aforesaid and accompanied by the
copy of the commission, certificate of election, or letters of appointment of the bishop, chief
priest, or presiding elder, duly certified as prescribed in the section immediately preceding such
bishop, chief priest, or presiding elder, as the case may be, shall become a corporation sole, and
all temporalities, estates, and properties of the religious denomination, society, or church
therefore administered or managed by him as such bishop, chief priest, or presiding elder shall be
held in trust by him as a corporation sole, for the use, purpose, behoof, and sole benefit of his
religious denomination, society, or church, including hospitals, schools, colleges, orphan
asylums; parsonages, and cemeteries thereof. For the filing of such articles of incorporation, the
Securities & Exchange Commissioner shall collect twenty-five pesos. (As amended by
Commonwealth Act No. 287); and

SEC. 163. The right to administer all temporalities and all property held or owned by a religious
order or society, or by the diocese, synod, or district organization of any religious denomination
or church shall, on its incorporation, pass to the corporation and shall be held in trust for the use,
purpose, behoof, and benefit of the religious society, or order so incorporated or of the church of
which the diocese, synod, or district organization is an organized and constituent part.

The Canon Law contains similar provisions regarding the duties of the corporation sole or
ordinary as administrator of the church properties, as follows:

"Al Ordinario local pertenence vigilar diligentemente sobre la administracion de todos los bienes
eclesiasticos que se hallan en su territorio y no estuvieren sustraidos de su jurisdiccio n, salvas
las prescripciones legitimas que le concedan mas amplios dsrechos.

"Teniendo en cuenta los derechos y las legitimas costumbres y circunstancias, procuraran los
Ordinarios regular todo lo concerniente a la administracion de los bienes eclesiasticos, dando las
oportunas instrucciones particulares dentro del marco del derecho comun." (Title XXVIII,
Codigo da Derecho Canonico, Lib. III, Canon 1519). *

That leaves no room for doubt that the bishops or archbishops, as the case may be, as
corporation’s sole are merely administrators of the church properties that come to their
possession, and which they hold in trust for the church. It can also be said that while it is true that
church properties could be administered by a natural person, problems regarding succession to
said properties can not be avoided to rise upon his death. Through this legal fiction, however,
church properties acquired by the incumbent of a corporation sole pass, by operation of law,
upon his death not to his personal heirs but to his successor in office. It could be seen, therefore,
that a corporation sole is created not only to administer the temporalities of the church or
religious society where he belongs but also to hold and transmit the same to his successor in said
office. If the ownership or title to the properties do not pass to the administrators, who are the
owners of church properties?

Bouscaren and Elis, S. J., authorities on canon law, on their treatise comment:

"In matters regarding property belonging to the Universal Church and to the Apostolic See, the
Supreme Pontiff exercises his office of supreme administrator through the Roman Curia; in
matters regarding other church property, through the administrators of the individual moral
persons in the Church according to that norms, laid down in the Code of Cannon Law. This does
not mean, however, that the Roman Pontiff is the owner of all church property; but merely that
he is the supreme guardian" (Bouscaren and Ellis, Canon Law, A Text and Commentary, p. 764).

And this Court, citing Campos y Pulido, Legislacion y Jurisprudencia Canonica, ruled in the case
of Trinidad v. Roman Catholic Archbishop of Manila, 63 Phil. 881, that:

"The second question to be decided is in whom the ownership of the properties constituting the
endowment of the ecclesiastical or collative chaplaincies is vested.

‘Canonists entertain different opinions as to the person in whom the ownership of the
ecclesiastical properties is vested, with respect to which we shall, for our purpose, confine
ourselves to stating with Donoso that, while many doctors cited by Fagnano believe that it
resides in the Roman Pontiff as Head of the Universal Church, it is more probable that
ownership, strictly speaking, does not reside in the latter, and, consequently, ecclesiastical
properties are owned by churches, institutions and canonically established private corporations to
which said properties have been donated’."

Considering that nowhere can We find any provision conferring ownership of church properties
on the Pope although he appears to be the supreme administrator or guardian of his flock, nor on
the corporations sole or heads of dioceses as they are admittedly mere administrators of said
properties, ownership of these temporalities logically fall and devolve upon the church, diocese
or congregation acquiring the same. Although this question of ownership of ecclesiastical
properties has off and on been mentioned in several decisions of this Court yet in no instance
was the subject of citizenship of this religious society been passed upon.

We are not unaware of the opinion expressed by the late Justice Perfecto in his dissent in the case
of Agustines v. Court of First Instance of Bulacan, 80 Phil. 565, to the effect that "the Roman
Catholic Archbishop of Manila is only a branch of a universal church by the Pope, with
permanent residence in Rome, Italy." There is no question that the Roman Catholic Church
existing in the Philippines is a tributary and part of that international religious organization, for
the word "Roman" clearly expresses its unity with and recognizes the authority of the Pope in
Rome. However, lest We become hasty in drawing conclusions, We have to analyze and take
note of the nature of the government established in the Vatican City, of which it was said:

"GOVERNMENT. In the Roman Catholic Church supreme authority and jurisdiction over clergy
and laity alike is held by the pope who (since the Middle Ages) is elected by the cardinals
assembled in conclave, and holds office until his death or legitimate abdication. . . . While the
pope is obviously independent of the laws made, and the officials appointed, by himself or his
predecessors, he usually exercises his administrative authority according to the code of canon
law and through the congregations, tribunals and offices of the Curia Romana. In their respective
territories (called generally dioceses) and over their respective subjects, the patriarchs,
metropolitans or archbishops and bishops exercise a jurisdiction which is called ordinary (as
attached by law to an office and so distinguished from delegated jurisdiction which is given to a
person. . . . ." (Collier’s Encyclopedia, Vol. 17, p. 93.)

While it is true and We have to concede that in the profession of their faith, the Roman Pontiff is
the supreme head; that in religious matters, in the exercise of their belief, the Catholic
congregation of the faithful throughout world seeks the guidance and direction of their Spiritual
Father in the Vatican, yet it cannot be said that there is a merger of personalities resultant therein.
Neither can it be said that the political and civil rights of the faithful, inherent or acquired under
the laws of their country, are affected by that relationship with the Pope. The fact that the Roman
Catholic Church in almost every country springs from that society that saw its beginning in
Europe and the fact that the clergy of this faith derive their authorities and receive orders from
the Holy See do not give or bestow the citizenship of the Pope upon these branches. Citizenship
is a political right which cannot be acquired by a sort of "radiation." We have to realize that
although there is a fraternity among all the catholic countries and the dioceses therein all over the
globe, this universality that the word "catholic" implies, merely characterize their faith, a
uniformity in the practice and interpretation of their dogma and in the exercise of their belief, but
certainly they are separate and independent from one another in jurisdiction, governed by
different laws under which they are incorporated, and entirely independent of the others in the
management and ownership of their temporalities. To allow theory that the Roman Catholic
Churches all over the world follow the citizenship of their Supreme Head, the Pontifical Father,
would lead to the absurdity of finding the citizens of a country who embrace the Catholic faith
and become members of that religious society, likewise citizens of the Vatican or of Italy. And
this is more so if We consider that the Pope himself may be an Italian or national of any other
country of the world. The same thing may be said with regard to the nationality or citizenship of
the corporation sole created under the laws of the Philippines, which is not altered by the change
of citizenship of the incumbent bishops or heads of said corporations sole.

We must, therefore, declare that although a branch of the Universal Roman Catholic Apostolic
Church, every Roman Catholic Church in different countries, if it exercises its mission and is
lawfully incorporated in accordance with the laws of the country where it is located, is
considered an entity or person with all the rights and privileges granted to such artificial being
under the laws of that country, separate and distinct from the personality of the Roman Pontiff or
the Holy See, without prejudice to its religious relations with the latter which are governed by
the Canon Law or their rules and regulations.

We certainly are conscious of the fact that whatever conclusion We may draw on this matter will
have a far reaching influence, nor can We overlook the pages of history that arouse indignation
and criticisms against church landholdings. This nurtured feeling that showballed into a strong
nationalistic sentiment manifested itself when the provisions on natural resources to be embodied
in the Philippines Constitution were framed, but all that has been said on this regard referred
more particularly to landholdings of religious corporations known as "Friar Estates" which have
already been acquired by our Government, and not to properties held corporations sole which,
We repeat, are properties held in trust for the benefit of the faithful residing within its territorial
jurisdiction. Though that same feeling probably precipitated and influenced to a large extent the
doctrine laid down in the celebrated Krivenko decision, We have to take this matter in the light
of legal provisions and jurisprudence actually obtaining, irrespective of sentiments.

The question now left for our determination is whether the Roman Catholic Apostolic Church in
the Philippines, or better still, the corporation sole named the Roman Catholic Apostolic
Administrator of Davao, Inc., is qualified to acquire private agricultural lands in the Philippines
pursuant to the provisions of Article XIII of the Constitution.

We see from sections 1 and 5 of said Article quoted before, that only persons or corporations
qualified to acquire or hold lands of the public domain in the Philippines may acquire or be
assigned and hold private agricultural lands. Consequently, the decisive factor in the present
controversy hinges on the proposition of whether or not the petitioner in this case can acquire
agricultural lands of the public domain.

From the data secured from the Securities and Exchange Commission, We find that the Roman
Catholic Bishop of Zamboanga was incorporated as a corporation sole) in September, 1912,
principally to administer its temporalities and manage its properties. Probably due to the ravages
of the last war, its articles of incorporation were reconstructed in the Securities and Exchange
Commission on April 8, 1948. At first, this corporation sole administered all the temporalities of
the church existing or located in the island of Mindanao. Later on, however, new dioceses were
formed and new corporations sole were created to correspond with the territorial jurisdiction of
the new dioceses, one of them being petitioner herein, the Roman Catholic Apostolic
Administrator of Davao, Inc., which was registered with the Securities and Exchange
Commission on September 12, 1950, and succeeded in the administration of all the
"temporalities" of the Roman Catholic Church existing in Davao.

According to our Corporation Law, Public Act No. 1459, approved April 1, 1906, a corporation
sole

is organized and composed of a single individual, the head of any religious society or church, for
the ADMINISTRATION of the temporalities of such society of church. By "temporalities" is
meant estates and properties not used exclusively for religious worship. The successors in office
of such religious head or chief priest incorporated as a corporation sole shall become the
corporation sole on ascension to office, and shall be permitted to transact business as such on
filing with the Securities and Exchange Commission a copy of his commission, certificate of
election or letter of appointment duly certified by any notary public or clerk of court of record
(Guevara’s The Philippine Corporation Law, p. 223).

The Corporation Law also contains the following provisions:

SECTION 159. Any corporation sole may purchase and hold real estate and personal property
for its church, charitable, benevolent, or educational purposes, and may receive bequests or gifts
for such purposes. Such corporation may mortgage or sell real property held by it upon obtaining
an order for that purpose from the Court of First Instance of the province in which the property is
situated; but before making the order proof must be made to the satisfaction of the Court that
notice of the application for leave to mortgage or sell has been given by publication or otherwise
in such manner and for such time as said Court or the Judge thereof may have directed, and that
it is to the interest of the corporation that leave to mortgage or sell should be granted. The
application for leave to mortgage or sell must be made by petition, duly verified by the bishop,
chief priest, or presiding elder, acting as corporation sole, and may be opposed by any member
of the religious denomination, society or church represented by the corporation sole: Provided,
however, That in cases where the rules, regulations, and discipline of the religious denomination,
society or church concerned represented by such corporation sole regulate the methods of
acquiring, holding, selling and mortgaging real estate and personal property, such rules,
regulations, and discipline shall control and the intervention of the Courts shall not be necessary.

It can, therefore, be noticed that the power of a corporation sole to purchase real property, like
the power exercised in the case at bar, is not restricted although the power to sell or mortgage
sometimes is, depending upon the rules, regulations, and discipline of the church concerned
represented by said corporation sole. If corporations sole can purchase and sell real estate for its
church, charitable, benevolent, or educational purposes, can they register said real properties? As
provided by law, lands held in trust for specific purposes may be subject of registration (section
69, Act 496), and the capacity of a corporation sole, like petitioner herein, to register lands
belonging to it is acknowledged, and title thereto may be issued in its name (Bishop of Nueva
Segovia v. Insular Government, 26 Phil. 300-1913). Indeed it is absurd to conceive that while the
corporations sole that might be in need of acquiring lands for the erection of temples where the
faithful can pray, or schools and cemeteries which they are expressly authorized by law to
acquire in connection with the propagation of the Roman Catholic Apostolic faith or in
furtherance of their freedom of religion, they could not register said properties in their name. As
professor Javier J. Nepomuceno very well says "Man in his search for the immortal and
imponderable, has, even before the dawn of recorded history, erected temples to the Unknown
God, and there is no doubt that he will continue to do so for all time to come, as long as he
continues ‘imploring the aid of Divine Providence’" (Nepomuceno’s Corporation Sole, VI
Ateneo Law Journal, No. 1, p. 41, September, 1956). Under the circumstances of this case, We
might safely state that even before the establishment of the Philippine Commonwealth and of the
Republic of the Philippines every corporation sole then organized and registered had by express
provision of law the necessary power and qualification to purchase in its name private lands
located in the territory in which it exercised its functions or ministry and for which it was
created, independently of the nationality of its incumbent unique and single member and head,
the bishop of the diocese. It can be also maintained without fear of being gainsaid that the
Roman Catholic Apostolic Church in the Philippines has no nationality and that the framers of
the Constitution, as will be hereunder explained, did not have in mind the religious corporations
sole when they provided that 60 per centum of the capital thereof be owned by Filipino citizens.

There could be no controversy as to the fact that a duly registered corporation sole is an artificial
being having the right of succession and the power, attributes, and properties expressly
authorized by law or incident to its existence (section 1, Corporation Law). In outlining the
general powers of a corporation, Public Act No. 1459 provides among others:

SEC. 13. Every corporation has the power:

x x x

(5) To purchase, hold, convey, sell, lease, let, mortgage, encumber, and otherwise deal with such
real and personal property as the purposes for which the corporation was formed may permit, and
the transaction of the lawful business of the corporation may reasonably and necessarily require,
unless otherwise prescribed in this Act: . . . .

In implementation of the same and specifically made applicable to a form of corporation

recognized by the same law, Section 159 aforequoted expressly allowed the corporation sole to
purchase and hold real as well as personal properties necessary for the promotion of the objects
for which said corporation sole is created. Respondent Land Registration Commissioner,
however, maintained that since the Philippine Constitution is a later enactment than Public Act
No. 1459, the provisions of Section 159 in amplification of Section 13 thereof, as regard real
properties, should be considered repealed by the former.

There is reason to believe that when the specific provision of the Constitution invoked by
respondent Commissioner was under consideration, the framers of the same did not have in mind
or overlooked this particular form of corporation. It is undeniable that the nationalization and
conservation of our natural resources was one of the dominating objectives of the Convention
and in drafting the present Article XIII of the Constitution, the delegates were goaded by the
desire (1) to insure their conservation for Filipino posterity; (2) to serve as an instrument of
national defense, helping prevent the extension into the country of foreign control through
peaceful economic penetration; and (3) to prevent making the Philippines a source of
international conflicts with the consequent danger to its internal security and independence (See
The Framing of the Philippine Constitution by Professor Jose M. Aruego, a Delegate to the
Constitutional Convention, Vol. II. P. 592-604). In the same book Delegate Aruego, explaining
the reason behind the first consideration, wrote:
"At the time of the framing of the Philippine Constitution. Filipino capital had been known to be
rather shy. Filipinos hesitated as a general rule to invest a considerable sum of their capital for
the development, exploitation and utilization of the natural resources of the country. They had
not as yet been so used to corporate enterprises as the peoples of the west. This general apathy,
the delegates knew, would mean the retardation of the development of the natural resources,
unless foreign capital would be encouraged to come and help in that development. They knew
that the nationalization of the natural resources would certainly not encourage the
INVESTMENT OF FOREIGN CAPITAL, into them. But there was a general feeling in the
Convention that it was better to have such a development retarded or even postponed together
until such time when the Filipinos would be ready and willing to undertake it rather than permit
the natural resources to be placed under the ownership or control of foreigners in order that they
might be immediately developed, with the Filipinos of the future serving not as owners but
utmosts as tenants or workers under foreign masters. By all means, the delegates believed, the
natural resources should be conserved for Filipino posterity."

It could be distilled from the foregoing that the framers of the Constitution intended said
provisions as barrier for foreigners or corporations financed by such foreigners to acquire,
exploit and develop our natural resources, saving these undeveloped wealth for our people to
clear and enrich when they are already prepared and capable of doing so. But that is not the case
of corporations sole in the Philippines, for, We repeat, they are mere administrators of the
"temporalities" or properties titled in their name and for the benefit of the members of their
respective religion composed of an overwhelming majority of Filipinos. No mention nor allusion
whatsoever is made in the Constitution as to the prohibition against or the ability of the Roman
Catholic Church in the Philippines to acquire and hold agricultural lands. Although there were
some discussions on landholdings, they were mostly confined in the inclusion of the provision
allowing the Government to break big landed estates to put an end to absentee landlordism.

But let us suppose, for the sake of argument, that the above referred to inhibitory clause of
Section 1 of Article XIII of the Constitution does have bearing on the petitioner’s case; even so
the clause requiring that at least 60 per centum of the capital of the corporation be owned by
Filipinos is subordinated to the petitioner’s aforesaid right already existing at the time of the
inauguration of the Commonwealth and the Republic of the Philippines. In the language of Mr.
Justice Jose P. Laurel (a Delegate to the Constitutional Convention), in his concurring opinion in
the case of Gold Creek Mining Corporation petitioner v. Eulogio Rodriguez, Secretary of
Agriculture and Commerce, and Quirico Abadilla, Director of the Bureau of Mines, respondent,
66 Phil. 259:

"The saving clause in the section involved of the Constitution was originally embodied in the
report submitted by the Committee on Nationalization and Preservation of Lands and Other
Natural Resources to the Constitutional Convention on September 17, 1934. It was later inserted
in the first draft of the Constitution as section 13 of Article XIII thereof, and finally incorporated
as we find it now. Slight have been the changes undergone by the proviso from the time when it
came out of the committee until it was finally adopted. When first submitted and as inserted in
the first draft of the Constitution it reads: ‘subject to any right, grant, lease or concession existing
in respect thereto as the date of the adoption of the Constitution’. As finally adopted, the proviso
reads: ‘subject to any existing right, grant, lease or concession at the time of the inauguration of
the Government established under this Constitution’. This recognition is not mere graciousness
but springs from the just character of the government established. The framers of the
Constitution were not obscured by the rhetoric of democracy or swayed to hostility by an intense
spirit of nationalism. They well knew that conservation of our natural resources did not mean
destruction or annihilation of acquired property rights. Withal, they erected a government neither
episodic nor stationary but well-nigh conservative in the protection of property rights. This
notwithstanding nationalistic and socialistic traits discoverable upon even a sudden dip into a
variety of the provisions embodied in the instrument."

The writer of this decision wishes to state at this juncture that during the deliberation of this case
he submitted to the consideration of the Court the question that may be termed the "vested right
saving clause" contained in Section 1, Article XIII of the Constitution, but some of the members
of this Court either did not agree with the theory of the writer, or were not ready to take a
definite stand on the particular point I am now to discuss deferring our ruling on such debatable
question for a better occasion, inasmuch as the determination thereof is not absolutely necessary
for the solution of the problem involved in this case. In his desire to face the issues squarely, the
writer will endeavour, at least as a digression, to explain and develop his theory, not as a
lucubration of the Court, but of his own, for he deems it better and convenient to go over the
cycle of reasons that are linked to one another and that step by step lead Us to conclude as We do
in the dispositive part of this decision.

It will be noticed that Section 1 of Article XIII of the Constitution provides, among other things,
that "all agricultural lands of the public domain and their disposition shall be limited to citizens
of Philippines or to corporations at least 60 per centum of the capital of which is owned by such
citizens, SUBJECT TO ANY EXISTING RIGHT AT THE TIME OF THE INAUGURATION
OF THE GOVERNMENT ESTABLISHED UNDER THIS CONSTITUTION."

As recounted by Mr. Justice Laurel in the aforementioned case of Gold Creek Mining
Corporation v. Rodriguez Et. Al., 66 Phil. 259, "this recognition (in the clause already quoted), is
not mere graciousness but springs from the just character of the government established. The
framers of the Constitution were not obscured by the rhetoric of democracy or swayed to
hostility by an intense spirit of nationalism. They well knew that conservation of our natural
resources did not mean destruction or annihilation of ACQUIRED PROPERTY RIGHTS."

But respondents’ counsel may argue that the preexisting right of acquisition of public or private
lands by a corporation which does not fulfill this 60 per cent requisite, refers to purchases or
acquisitions made prior to the effectivity of the Constitution and not to later transactions. This
argument would imply that even assuming that petitioner had at the time of the enactment of the
Constitution the right to purchase real property, that power or right could not be exercised after
the effectivity of our Constitution, because said power or right of corporations sole, like the
herein petitioner, conferred in virtue of the aforequoted provisions of the Corporation Law, could
no longer be exercised in view of the requisite therein prescribed that at least 60 per centum of
the capital of the corporation had to be Filipino. It has been shown before that: (1) the
corporation sole, unlike the ordinary corporations which are formed by no less than 5
incorporators, is composed of only one person, usually the head or bishop of the diocese, a unit
which is not subject to expansion for the purpose of determining any percentage whatsoever; (2)
the corporation sole is only the administrator and not the owner of the temporalities located in
the territory comprised by said corporation sole; (3) such temporalities are administered for and
on behalf of the faithful residing in the diocese or territory of the corporation sole; and (4) the
latter, as such, has no nationality and the citizenship of the incumbent Ordinary has nothing to do
with the operation, management or administration of the corporation sole, nor affects the
citizenship of the faithful connected with their respective diocese or corporation sole.

In view of these peculiarities of the corporation sole, it would seem obvious that when the
specific provision of the Constitution invoked by respondent Commissioner (section 1, Art.
XIII), was under consideration, the framers of the same did not have in mind or overlooked this
particular form of corporation. If this were so, as the facts and circumstances already indicated
tend to prove it to be so, then the inescapable conclusion would be that this requirement of at
least 60 per cent of Filipino capital was never intended to apply to corporations sole, and the
existence or not of a vested right becomes unquestionably immaterial.

But let us assume that the questioned proviso is material, yet We might say that a reading of said
Section 1 will show that it does not refer to any actual acquisition of land but to the right,
qualification or power to acquire and hold private real property. The population of the
Philippines, Catholic to a high percentage, is ever increasing. In the practice of religion of their
faithful the corporation sole may be in need of more temples where to pray, more schools where
the children of the congregation could be taught in the principles of their religion, more hospitals
where their sick could be treated, more hallow or consecrated grounds or cemeteries where
Catholics could be buried, many more than those actually existing at the time of the enactment of
our Constitution. This being the case, could it be logically maintained that because the
corporation sole which, by express provision of law, has the power to hold and acquire real estate
and personal property for its churches, charitable benevolent, or educational purposes (section
159, Corporation Law) it has to stop its growth and restrain its necessities just because the
corporation sole is a non-stock corporation composed of only one person who in his unity does
not admit of any percentage, especially when that person is not the owner but merely an
administrator of the temporalities of the corporation sole? The writer leaves the answer to
whoever may read and consider this portion of the decision.

Anyway, as stated before, this question is not a decisive factor in disposing this case, for even if
We were to disregard such saving clause of the Constitution, which reads: subject to any existing
right, grant, etc., at the time of the inauguration of the Government established under this
Constitution, yet We would have, under the evidence on record, sufficient grounds to uphold
petitioner’s contention on this matter.

In this case of the Register of Deeds of Rizal v. Ung Sui Si Temple, * G. R. No. L-6776,
promulgated May 21, 1955, wherein this question was considered from a different angle, this
Court, through Mr. Justice J. B. L. Reyes, said:

"The fact that the appellant religious organization has no capital stock does not suffice to escape
the Constitutional inhibition, since it is admitted that its members are of foreign nationality. The
purpose of the sixty per centum requirement is obviously to ensure that corporation or
associations allowed to acquired agricultural land or to exploit natural resources shall be
controlled by Filipinos; and the spirit of the Constitution demands that in the absence of capital
stock, the controlling membership should be composed of Filipino citizens."

In that case respondent-appellant Ung Siu Si Temple was not a corporation sole but a corporation
aggregate, i.e., an unregistered organization operating through 3 trustees, all of Chinese
nationality, and that is why this Court laid down the doctrine just quoted. With regard to
petitioner, the Roman Catholic Administrator of Davao, Inc., which likewise is a non-stock
corporation, the case is different, because it is a registered corporation sole, evidently of no
nationality and registered mainly to administer the temporalities and manage the properties
belonging to the faithful of said church residing in Davao. But even if we were to go over the
record to inquire into the composing membership to determine whether the citizenship
requirement is satisfied or not, we would find undeniable proof that the members of the Roman
Catholic Apostolic faith within the territory of Davao are predominantly Filipino citizens. As
indicated before, petitioner has presented evidence to establish that the clergy and lay members
of this religion fully covers the percentage of Filipino citizens required by the Constitution.
These facts are not controverted by respondents and our conclusion in this point is sensibly
obvious.

Dissenting Opinion — Discussed. — After having developed our theory in this case and arrived
at the findings and conclusions already expressed in this decision. We now deem it proper to
analyze and delve into the basic foundation on which the dissenting opinion stands up. Being
aware of the transcendental and far-reaching effects that Our ruling on the matter might have,
this case was thoroughly considered from all points of view, the Court sparing no effort to solve
the delicate problems involved herein.

At the deliberations had to attain this end, two ways were open to a prompt dispatch of the case:
(1) the reversal of the doctrine We laid down in the celebrated Krivenko case by excluding urban
lots and properties from the grasp of the term "private agricultural lands" used in section 5,
Article XIII of the Constitution; and (2) by driving Our reasons to a point that might indirectly
cause the appointment of Filipino bishops or Ordinary to head the corporations sole created to
administer the temporalities of the Roman Catholic Church in the Philippines. With regard to the
first way, a great majority of the members of this Court were not yet prepared nor agreeable to
follow that course, for reasons that are obvious. As to the second way, it seems to be misleading
because the nationality of the head of a diocese constituted as a corporation sole has no material
bearing on the functions of the latter, which are limited to the administration of the temporalities
of the Roman Catholic Apostolic Church in the Philippines.

Upon going over the grounds on which the dissenting opinion is based, it may be noticed that its
author lingered on the outskirts of the issues, thus throwing the main points in controversy out of
focus. Of course We fully agree, as stated by Professor Aruego, that the framers of our
Constitution had at heart to insure the conservation of the natural resources of Our motherland
for Filipino posterity; to serve them as an instrument of national defense, helping prevent the
extension into the country of foreign control through peaceful economic penetration; and to
prevent making the Philippines a source of international conflicts with the consequent danger to
its internal security and independence. But all these precautions adopted by the Delegates to Our
Constitutional Assembly could not have been intended for or directed against cases like the one
at bar. The emphasis and wanderings on the statement that once the capacity of a corporation
sole to acquire private agricultural lands is admitted there will be no limit to the areas that it may
hold and that this will pave the way for the "revival or revitalization of religious landholdings
that proved so troublesome in our past", cannot even furnish the "penumbra" of a threat to the
future of the Filipino people. In the first place, the right of Filipino citizens, including those of
foreign extraction, and Philippine corporations, to acquire private lands is not subject to any
restriction or limit as to quantity or area, and We certainly do not see any wrong in that. The
right of Filipino citizens and corporations to acquire public agricultural lands is already limited
by law. In the second place, corporations sole cannot be considered as aliens because they have
no nationality at all. Corporations sole are, under the law, mere administrators of the
temporalities of the Roman Catholic Church in the Philippines. In the third place, every
corporation, be it aggregate or sole, is only entitled to purchase, convey, sell, lease, let,
mortgage, encumber and otherwise deal with real properties when it is pursuant to or in
consonance with the purposes for which the corporation was formed, and when the transactions
of the lawful business of the corporation reasonably and necessarily require such dealing —
section 13-(5) of the Corporation Law, Public Act No. 1459 — and considering these provisions
in conjunction with Section 159 of the same law which provides that a corporation sole may only
"purchase and hold real estate and personal properties for its church, charitable, benevolent or
educational purposes", the above mentioned fear of revitalization of religious landholdings in the
Philippines is absolutely dispelled. The fact that the law thus expressly authorizes the
corporations sole to receive bequests or gifts of real properties (which were the main source that
the friars had to acquire their big haciendas during the Spanish regime), is a clear indication that
the requisite that bequests or gifts of real estate be for charitable, benevolent, or educational
purposes, was, in the opinion of the legislators, considered sufficient and adequate protection
against the revitalization of religious landholdings.

Finally, and as previously stated, We have reason to believe that when the Delegates to the
Constitutional Convention drafted and approved Article XIII of the Constitution, they did not
have in mind the corporation sole. We come to this finding because the Constitutional Assembly,
composed as it was by a great number of eminent lawyers and jurists, was like any other
legislative body empowered to enact either the Constitution of the country or any public statute,
presumed to know the conditions existing as to particular subject matter when it enacted a statute
(Board of Com’rs of Orange County v. Bain, 92 S. E. 176; 173 N. C. 377).

"Immemorial customs are presumed to have been always in the mind of the Legislature in
enacting legislation." (In re Kruger’s Estate, 121 A. 109; 277 Pa. 326).

"The Legislative is presumed to have a knowledge of the state of the law on the subjects upon
which it legislates." (Clover Valley Land & Stock Co. v. Lamb Et. Al., 187, p. 723, 726.)

"The Court in construing a statute, will assume that the legislators acted with full knowledge of
the prior legislation on the subject and its construction by the courts." (Johns v. Town of
Sheridan, 89 N. E. 899, 44 Ind. App. 620.)

"The Legislature is presumed to have been familiar with the subject with which it was
dealing . . . ." (Landers v. Commonwealth, 101 S. E. 778, 781.)
"The Legislature is presumed to know principles of statutory construction" (People v. Lowell,
230 N. W. 202, 250 Mich. 349, followed in P. v. Woodworth, 230 N. W. 211, 250 Mich. 436.)

"It is not to be presumed that a provision was inserted in a constitution or statute without reason,
or that a result was intended inconsistent with the judgment of men of common sense guided by
reason." (Mitchell v. Lawden, 123 N. E. 566, 288 Ill. 326.) See City of Decatur v. German, 142
N. E. 252, 310 Ill. 591, and many other authorities that can be cited in support hereof.

Consequently, the Constitutional Assembly must have known:

1. That a corporation sole is organized by and composed of a single individual, the head of any
religious society or church operating within the zone, area or jurisdiction covered by said
corporation sole (Article 155, Public Act No. 1459);

2. That a corporation sole is a non-stock corporation;

3. That the Ordinary (the corporation sole proper) does not own the temporalities which he
merely administers;

4. That under the law the nationality of said Ordinary or of any administrator has absolutely no
bearing on the nationality of the person desiring to acquire real property in the Philippines by
purchase or other lawful means other than by hereditary succession, who, according to the
Constitution must be a Filipino (sections 1 and 5, Article XIII);

5. That section 159 of the Corporation Law expressly authorized the corporation sole to purchase
and hold real estate for its church, charitable, benevolent or educational purposes, and to receive
bequests or gifts for such purposes;

6. That in approving our Magna Carta the Delegates to the Constitutional Convention, almost all
of whom were Roman Catholics, could not have intended to curtail all the propagation of the
Roman Catholic faith or the expansion of the activities of their church, knowing pretty well that
with the growth of our population more places of worship, more schools where our youth could
be taught and trained; more hallow grounds where to bury our dead would be needed in the
course of time.

Long before the enactment of our Constitution the law authorized the corporations sole even to
receive bequests or gifts of real estates send this Court could not, without any clear and specific
provision of the Constitution, declare that any real property donated, let us say this year, could
no longer be registered in the name of the corporation sole to which it was conveyed. That would
be an absurdity that should not receive our sanction on the pretext that corporations sole which
have no nationality and are non-stock corporations composed of only one person in the capacity
of administrator, have to establish first that at least sixty per centum of their capital belong to
Filipino citizens. The new Civil Code even provides:

"ART. 10. — In case of doubt in the interpretation or application of laws, it is presumed that the
lawmaking body intended right and justice to prevail."

Moreover, under the laws of the Philippines, the administrator of the properties of a Filipino can
acquire, in the name of the latter, private lands without any limitation whatsoever, and that is so
because the properties thus acquired are not for and would not belong to the administrator but to
the Filipino whom he represents. But the dissenting Justice inquires: If the Ordinary is only the
administrator, for whom does he administer? And who can alter or overrule his acts? We will
forthwith proceed to answer these questions. The corporations sole by reason of their peculiar
constitution and form of operation have no designed owner of its temporalities, although by the
terms of the law it can be safely implied that the Ordinary holds them in trust for the benefit of
the Roman Catholic faithful of their respective locality or diocese. Borrowing the very words of
the law, We may say that the temporalities of every corporation sole are held in trust for the use,
purpose, behoof and benefit of the religious society, or order so incorporated or of the church to
which the diocese, synod, or district organization is an organized and constituent part (section
163 of the Corporation Law).

In connection with the powers of the Ordinary over the temporalities of the corporation sole, let
us see now what is the meaning and scope of the word "control." According to the Merriam-
Webster’s New International Dictionary, 2nd ed., p. 580, one of the acceptations of the word
"control" is:

"4. To exercise restraining or directing influence over; to dominate; regulate; hence, to hold from
action; to curb; subject, also, Obs. — to overpower.

"SYN: restrain, rule, govern, guide, direct; check, subdue."

It is true that under section 159 of the Corporation Law, the intervention of the courts is not
necessary, to mortgage or sell real property held by the corporation sole where the rules,
regulations and discipline of the religious denomination, society or church concerned represented
by such corporation sole regulate the methods of acquiring, holding, selling and mortgaging real
estate, and that the Roman Catholic faithful residing in the jurisdiction of the corporation sole
has no say either in the manner of acquiring or of selling real property. It may be also admitted
that the faithful of the diocese cannot govern or overrule the acts of the Ordinary, but all this
does not mean that the latter can administer the temporalities of the corporation sole without
check or restraint. We must not forget that when a corporation sole is incorporated under
Philippine laws, the head and only member thereof subjects himself to the jurisdiction of the
Philippine courts of justice and these tribunals can thus entertain grievances arising out of or
with respect to the temporalities of the church which came into the possession of the corporation
sole as administrator. It may be alleged that the courts cannot intervene as to the matters of
doctrine or teachings of the Roman Catholic Church. That is correct, but the courts may step in,
at the instance of the faithful for whom the temporalities are being held in trust, to check undue
exercise by the corporation sole of its powers as administrator to insure that they are used for the
purpose or purposes for which the corporation sole was created.

American authorities have these to say:

It has been held that the courts have jurisdiction over an action brought by persons claiming to be
members of a church, who allege a wrongful and fraudulent diversion of the church property to
uses foreign to the purposes of the church, since no ecclesiastical question is involved and equity
will protect from wrongful diversion of the property (Hendryx v. Peoples United Church, 42
Wash. 336, 4 L.R.A. — n.s. -1154).

The courts of the State have no general jurisdiction and control over the officers of such
corporations in respect to the performance of their official duties; but as in respect to the property
which they hold for the corporation, they stand in position of TRUSTEES and the courts may
exercise the same supervision as in other cases of trust (Ramsey v. Hicks, 174 Ind. 428, 91 N. E.
344, 92 N. E. 164, 30 L.R.A. — n.s. -665; Hendryx v. Peoples United Church, supra.)

Courts of the state do not interfere with the administration of church rules or discipline unless
civil rights become involved and which must be protected (Morris St., Baptist Church v. Dart, 67
S. C. 338, 45 S. E. 753, and others). (All cited in Vol. II, Cooley’s Constitutional Limitations, p.
960-964.)

If the Constitutional Assembly was aware of all the facts above enumerated and of the provisions
of law relative to existing conditions as to management and operation of corporations sole in the
Philippines, and if, on the other hand, almost all of the Delegates thereto embraced the Roman
Catholic faith, can it be imagined even for an instant that when Article XIII of the Constitution
was approved the framers thereof intended to prevent or curtail from then on the acquisition by
corporations sole, either by purchase or donation, of real properties that they might need for the
propagation of the faith and for other religious and Christian activities such as the moral
education of the youth, the care, attention and treatment of the sick and the burial of the dead of
the Roman Catholic faithful residing in the jurisdiction of the respective corporations sole? The
mere indulgence in said thought would impress upon Us a feeling of apprehension and absurdity.
And that is precisely the leit motiv that permeates the whole fabric of the dissenting opinion.

It seems from the foregoing that the main problem We are confronted With in this appeal, hinges
around the necessity of a proper and adequate interpretation of sections 1 and 5 of Article XIII of
the Constitution. Let Us then be guided by the principles of statutory construction laid down by
the authorities on the matter.

"The most important single factor in determining the intention of the people from whom the
constitution emanated is the language in which it is expressed. The words employed are to be
taken in their natural sense, except that legal or technical terms are to be given their technical
meaning. The imperfections of language as a vehicle for conveying meanings result in
ambiguities that must be resolved by resort to extraneous aids for discovering the intent of the
framers. Among the more important of these are a consideration of the history of the times when
the provision was adopted and of the purposes aimed at in its adoption. The debates of
constitutional conventions, contemporaneous construction, and practical construction by the
legislative and executive departments, especially if long continued, may be resorted to to resolve,
but not to create, ambiguities. . . . . Consideration of the consequences flowing from alternative
constructions of doubtful provisions constitutes an important interpretative device. . . . The
purposes of many of the broadly phrased constitutional limitations were the promotion of
policies that do not lend themselves to definite and specific formulation. The courts have had to
define those policies and have often drawn on natural law and natural rights theories in doing so.
The interpretation of constitutions tends to respond to changing conceptions of political and
social values. The extent to which these extraneous aids affect the judicial construction of
constitutions cannot be formulated in precise rules, but their influence cannot be ignored in
describing the essentials of the process" (Rottschaeffer on Constitutional Law, 1939 ed., p. 18-
19).

"There are times when even the literal expression of legislation may be inconsistent with the
general objectives of policy behind it, and on the basis of the equity or spirit of the statute the
courts rationalize a restricted meaning of the latter. A restricted interpretation is usually applied
where the effect of a literal interpretation will make for injustice and absurdity or, in the words of
one court, the language must be so unreasonable ‘as to shock general common sense’." (Vol. 3,
Sutherland on Statutory Construction, 3rd ed., 150.)

"A constitution is not intended to be a limitation on the development of a country nor an

obstruction to its progress and foreign relations" (Moscow Fire Inc. Co. of Moscow, Russia v.
Bank of New York & Trust Co., 294 N. Y. S. 648; 56 N. E. 2d 745, 293 N. Y. 749).

"Although the meaning or principles of a constitution remain fixed and unchanged from the time
of its adoption, a constitution must be construed as if intended to stand for a great length of time,
and it is progressive and not static. Accordingly, it should not receive too narrow or literal an
interpretation but rather the meaning given it should be applied in such manner as to meet new or
changed conditions as they arise" (U.S. v. Classic, 313 U.S. 299, 85 L. Ed., 1368).

"Effect should be given to the purpose indicated by a fair interpretation of the language used and
that construction which effectuates, rather than that which destroys a plain intent or purpose of a
constitutional provision, is not only favored but will be adopted" (State ex rel. Randolph Country
v. Walden, 206 S. W. 2d 979).

"It is quite generally held that in arriving at the intent and purpose the Construction should be
broad or liberal or equitable, as the better method of ascertaining that intent, rather than
technical" (Great Southern Life Ins. Co. v. City of Austin, 243 S.W. 778).

All these authorities uphold our conviction that the framers of the constitution had not in mind
the corporations sole, nor intended to apply them the provisions of sections 1 and 5 of said
Article XIII when they passed and approved the same. And if it were so as We think it is, herein
petitioner, the Roman Catholic Apostolic Administrator of Davao, Inc., could not be deprived of
the right to acquire by purchase or donation real properties for charitable, benevolent and
educational purposes, nor of the right to register the same in its name with the Register of Deeds
of Davao, an indispensable requisite prescribed by the Land Registration Act for lands covered
by the Torrens system.

We leave as the last theme for discussion the much debated question above referred to as "the
vested right saving clause" contained in section 1, Article XIII of the Constitution. The
dissenting Justice hurls upon the personal opinion expressed on the matter by the writer of the
decision the most pointed darts of his severe criticism. We think, however, that this strong
dissent should have been spared, because as clearly indicated before, some members of this
Court either did not agree with the theory of the writer or were not ready to take a definite stand
on that particular point, so that there being no majority opinion thereon there was no need of any
dissension therefrom. But as the criticism has been made the writer deems it necessary to say a
few words of explanation.

The writer fully agrees with the dissenting Justice that ordinarily "a capacity to acquire
(property) in futuro, is not in itself a vested or existing property right that the Constitution
protects from impairment. For a property right to be vested (or acquired) there must be a
transition from the potential or contingent to the actual, and the proprietary interest must have
attached to a thing; it must have become ‘fixed and established’" (Balboa v. Farrales, 51 Phil.
498). But the case at bar has to be considered as an exception to the rule because among the
rights granted by section 159 of the Corporation Law was the right to receive bequests or gifts of
real properties for charitable, benevolent and educational purposes. And this right to receive such
bequests or gifts (which implies donations in futuro), is not a mere potentiality that could be
impaired without any specific provision in the Constitution to that effect, especially when the
impairment would disturbingly affect the propagation of the religious faith of the immense
majority of the Filipino people and the curtailment of the activities of their Church. That is why
the writer gave as a basis of his contention what Professor Aruego said in his book "The Framing
of the Philippine Constitution" and the enlightening opinion of Mr. Justice Jose P. Laurel,
another Delegate to the Constitutional Convention, in his concurring opinion in the case of
Goldcreek Mining Company v. Eulogio Rodriguez Et. Al., 66 Phil. 269. Anyway the majority of
the Court did not deem necessary to pass upon said "vested right saving clause" for the final
determination of this case.

JUDGMENT

Wherefore, the Resolution of the respondent Land Registration Commission of September 21,
1954, holding that in view of the provisions of sections 1 and 5 of Article XIII of the Philippine
Constitution the vendee (petitioner) is not qualified to acquire lands in the Philippines in the
absence of proof that at least 60 per centum of the capital, properties or assets of the Roman
Catholic Apostolic Administrator of Davao, Inc., is actually owned or controlled by Filipino
citizens, and denying the registration of the deed of sale in the absence of proof of compliance
with such requisite, is hereby reversed. Consequently, the respondent Register of Deeds of the
City of Davao is ordered to register the deed of sale executed by Mateo L. Rodis in favor of the
Roman Catholic Apostolic Administrator of Davao, Inc., which is the subject of the present
litigation. No pronouncement is made as to costs. It is so ordered.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-26100 February 28, 1969

CITY OF BAGUlO, REFORESTATION ADMINISTRATION,

FRANCISCO G. JOAQUIN, SR., FRANCISCO G. JOAQUIN, JR., and TERESITA J.
BUCHHOLZ petitioners,
vs.
HON. PIO R. MARCOS, Judge of the Court of First Instance of Baguio,
BELONG LUTES, and the HONORABLE COURT OF APPEALS, respondents.

1st Assistant City Fiscal Dionisio C. Claridad, Augusto Tobias and Feria, Feria, Lugtu and La'O
for petitioners.
Bernardo C. Ronquillo for respondents.

SANCHEZ, J.:

Petitioners attack the jurisdiction of the Court of First Instance of Baguio to reopen cadastral
proceedings under Republic Act 931. Private petitioner's specifically question the ruling of the
Court of Appeals that they have no personality to oppose reopening. The three-pronged
contentions of all the petitioners are: (1) the reopening petition was filed outside the 40-year
period next preceding the approval of Republic Act 931; (2) said petition was not published; and
(3) private petitioners, as lessees of the public land in question, have court standing under
Republic Act 931. The facts follow:

On April 12, 1912, the cadastral proceedings sought to be reopened, Civil Reservation Case No.
1, GLRO Record No. 211, Baguio Townsite, were instituted by the Director of Lands in the
Court of First Instance of Baguio. It is not disputed that the land here involved (described in Plan
Psu-186187) was amongst those declared public lands by final decision rendered in that case
on November 13, 1922.

On July 25, 1961, respondent Belong Lutes petitioned the cadastral court to reopen said Civil
Reservation Case No. 1 as to the parcel of land he claims. His prayer was that the land be
registered in his name upon the grounds that: (1) he and his predecessors have been in actual,
open, adverse, peaceful and continuous possession and cultivation of the land since Spanish
times, or before July 26, 1894, paying the taxes thereon; and (2) his predecessors were illiterate
Igorots without personal notice of the cadastral proceedings aforestated and were not able to file
their claim to the land in question within the statutory period.
On December 18, 1961, private petitioners Francisco G. Joaquin, Sr., Francisco G. Joaquin, Jr.,
and Teresita J. Buchholz registered opposition to the reopening. Ground: They are tree farm
lessees upon agreements executed by the Bureau of Forestry in their favor for 15,395.65 square
meters on March. 16, 1959, for 12,108 square meters on July 24, 1959, and for 14,771 square
meters on July 17, 1959, respectively.

On May 5, 1962, the City of Baguio likewise opposed reopening.

On May 8, 1962, upon Lutes' opposition, the cadastral court denied private petitioners' right to
intervene in the case because of a final declaratory relief judgment dated March 9, 1962
in Yaranon vs. Castrillo [Civil Case 946, Court of First Instance of Baguio] which declared that
such tree farm leases were null and void.

On May 18, 1962, private petitioners moved to reconsider. They averred that said declaratory
relief judgment did not bind them, for they were not parties to that action.

On September 14, 1962, the cadastral court reversed its own ruling of May 8, 1962, allowed
petitioners to cross-examine the witnesses of respondent Lutes.

On October 16, 1962, Lutes replied to and moved to dismiss private petitioners' opposition to his
reopening petition. On October 25, 1962, private petitioners' rejoinder was filed.

On August 5, 1963, the cadastral court dismissed private petitioners' opposition to the reopening.
A motion to reconsider was rejected by the court on November 5, 1963.

On January 6, 1964, it was the turn of the City of Baguio to lodge a motion to dismiss the
petition to reopen. This motion was adopted as its own by the Reforestation Administration.
They maintained the position that the declaratory judgment in Civil Case 946 was not binding on
those not parties thereto. Respondent Lutes opposed on February 24, 1964. On April 6, 1964,
private petitioners reiterated their motion to dismiss on jurisdictional grounds.

On September 17, 1964, the court denied for lack of merit the City's motion as well as the April
6, 1964 motion to dismiss made by private petitioners.

On November 13, 1964, all the petitioners went to the Court of Appeals on certiorari,
prohibition, and mandamus with preliminary injunction. 1 They then questioned the cadastral
court's jurisdiction over the petition to reopen and the latter's order of August 5, 1963 dismissing
private petitioners' opposition. The appellate court issued a writ of preliminary injunction upon a
P500-bond.

Then came the judgment of the Court of Appeals of September 30, 1965. The court held that
petitioners were not bound by the declaratory judgment heretofore hated. Nevertheless, the
appellate court ruled that as lessees, private petitioners had no right to oppose the reopening of
the cadastral case. Petitioners moved to reconsider. It was thwarted on May 6, 1966.
Petitioners now seek redress from this Court. On July 6, 1966, respondents moved to dismiss the
petition before us. On August 5, 1966, petitioners opposed. On August 12, 1966, we gave due
course.

1. Do private petitioners have personality to appear in the reopening proceedings?

First, to the controlling statute, Republic Act 931, effective June 20, 1953.

The title of the Act reads —

AN ACT TO AUTHORIZE THE FILING IN THE PROPER COURT, UNDER CERTAIN

CONDITIONS, OF CERTAIN CLAIMS OF TITLE TO PARCELS OF LAND THAT HAVE
BEEN DECLARED PUBLIC LAND, BY VIRTUE OF JUDICIAL DECISIONS RENDERED
WITHIN THE FORTY YEARS NEXT PRECEDING THE APPROVAL OF THIS ACT.

Section 1 thereof provides —

SECTION 1. All persons claiming title to parcels of land that have been the object of
cadastral proceedings, who at the time of the survey were in actual possession of the
same, but for some justifiable reason had been unable to file their claim in the proper
court during the time limit established by law, in case such parcels of land, on account of
their failure to file such claims, have been, or are about to be declared land of the public
domain by virtue of judicial proceedings instituted within the forty years next preceding
the approval of this Act, are hereby granted the right within five years 2 after the date on
which this Act shall take effect, to petition for a reopening of the judicial proceedings
under the provisions of Act Numbered Twenty-two hundred and fifty-nine, as
amended, only with respect to such of said parcels of land as have not been alienated,
reserved, leased, granted, or otherwise provisionally or permanently disposed of by the
Government, and the competent Court of First Instance, upon receiving such petition,
shall notify the Government through the Solicitor General, and if after hearing the parties,
said court shall find that all conditions herein established have been complied with, and
that all taxes, interests and penalties thereof have been paid from the time when land tax
should have been collected until the day when the motion is presented, it shall order said
judicial proceedings reopened as if no action has been taken on such parcels. 3

We concede that in Leyva vs. Jandoc, L-16965, February 28, 1962, a land registration case where
oppositors were "foreshore lessees of public land", a principle was hammered out that although
Section 34, Land Registration Act, 4 "apparently authorizes any person claiming any kind of
interest to file an opposition to an application for registration, ... nevertheless ... the opposition
must be based on a right of dominion or some other real right independent of, and not at all
subordinate to, the rights of the Government."5 The opposition, according to the Leyva decision,
"must necessarily be predicated upon the property in question being part of the public
domain." Leyva thus pronounced that "it is incumbent upon the duly authorized representatives
of the Government to represent its interests as well as private claims intrinsically dependent upon
it."
But the Leyva case concerned an ordinary land registration proceeding under the provisions of
the Land Registration Act. Normally and logically, lessees cannot there present issues of
ownership. The case at bar, however, stands on a different footing. It involves a special statute
R.A. 931, which allows a petition for reopening on lands "about to be declared"
or already "declared land of the public domain" by virtue of judicial proceedings. Such right,
however, is made to cover limited cases, i.e., "only with respect to such of said parcels of land as
have not been alienated, reserved, leased, granted, or
otherwise provisionally or permanently disposed of by the Government." 6 The lessee's right is
thus impliedly recognized by R.A. 931. This statutory phrase steers the present case clear from
the impact of the precept forged by Leyva. So it is, that if the land subject of a petition to reopen
has already been leased by the government, that petition can no longer prosper.

This was the holding in Director of Land vs. Benitez, L-21368, March 31, 1966. The reopening
petition there filed was opposed by the Director of Lands in behalf of 62 lessees of public land
holding revocable permits issued by the government. We struck down the petition in that Case
because the public land, subject-matter of the suit, had already been leased by the government to
private persons.

Of course, the Benitez ruling came about not by representations of the lessees alone, but through
the Director of Lands. But we may well scale the heights of injustice or abet violations of R.A.
931 if we entertain the view that only the Director of Lands 7 can here properly oppose the
reopening petition. Suppose the lands office fails to do so? Will legitimate lessees be left at the
mercy of government officials? Should the cadastral court close its eyes to the fact of lease that
may be proved by the lessees themselves, and which is enough to bar the reopening petition?
R.A. 931 could not have intended that this situation should happen. The point is that, with the
fact of lease, no question of ownership need be inquired into pursuant to R.A. 931. From this
standpoint, lessees have sufficient legal interest in the proceedings.

The right of private petitioners to oppose a reopening petition here becomes the more patent
when we take stock of their averment that they have introduced improvements on the land
affected. It would seem to us that lessees insofar as R.A. 931 is concerned, come within the
purview of those who, according to the Rules of Court, 8 may intervene in an action. For, they are
persons who have "legal interest in the matter in litigation, or in the success of either of the
parties." 9 In the event herein private petitioners are able to show that they are legitimate lessees,
then their lease will continue. And this because it is sufficient that it be proven that the land is
leased to withdraw it from the operation of Republic Act 931 and place it beyond the reach of a
petition for reopening. 10

In line with the Court of Appeals' conclusion, not disputed by respondent Lutes herein, the
cadastral court should have ruled on the validity of private petitioners 'tree farm leases — on the
merits. Because there is need for Lutes' right to reopen and petitioners' right to continue as
lessees to be threshed out in that court.

We, accordingly, hold that private petitioners, who aver that they are lessees, have the necessary
personality to intervene in and oppose respondent Lutes' petition for reopening.
2. Petitioners next contend that the reopening petition below, filed under R.A. 931, should have
been published in accordance with the Cadastral Act.

To resolve this contention, we need but refer to a very recent decision of this Court in De Castro
vs. Marcos, supra, involving exactly the same set of facts bearing upon the question. We there
held, after a discussion of law and jurisprudence, that: "In sum, the subject matter of the petition
for reopening — a parcel of land claimed by respondent Akia — was already embraced in the
cadastral proceedings filed by the Director of Lands. Consequently, the Baguio cadastral court
already acquired jurisdiction over the said property. The petition, therefore, need not be
published." We find no reason to break away from such conclusion.

Respondent Lutes attached to the record a certified true copy of the November 13, 1922 decision
in the Baguio Townsite Reservation case to show, amongst others, that the land here involved
was part of that case. Petitioners do not take issue with respondent Lutes on this point of fact.

We here reiterate our ruling in De Castro, supra, that the power of the cadastral court below over
petitions to reopen, as in this case, is not jurisdictionally tainted by want of publication.

3. A question of transcendental importance is this: Does the cadastral court have power to reopen
the cadastral proceedings upon the application of respondent Lutes?

The facts are: The cadastral proceedings sought to be reopened were instituted on April
12, 1912. Final decision was rendered on November 13, 1922. Lutes filed the petition to reopen
on July 25, 1961.

It will be noted that the title of R.A. 931, heretofore transcribed, authorizes "the filing in the
proper court, under certain conditions, of certain claims of title to parcels of land that have been
declared public land, by virtue of judicial decisions rendered within the forty years next
preceding the approval of this Act." The body of the statute, however, in its Section 1, speaks of
parcels of land that "have been, or are about to be declared land of the public domain, by virtue
of judicial proceedings instituted within the forty years next preceding the approval of this Act."
There thus appears to be a seeming inconsistency between title and body.

It must be stressed at this point that R.A. 931 is not under siege on constitutional grounds. No
charge has been made hero or in the courts below that the statute offends the constitutional
injunction that the subject of legislation must be expressed in the title thereof. Well-entrenched
in constitutional law is the precept that constitutional questions will not be entertained by courts
unless they are "specifically raised, insisted upon and adequately argued." 11 At any rate it cannot
be seriously disputed that the subject of R.A. 931 is expressed in its title.

This narrows our problem down to one of legal hermeneutics.

Many are the principles evolved in the interpretation of laws. It is thus not difficult to stray away
from the true path of construction, unless we constantly bear in mind the goal we seek. The
office of statutory interpretation, let us not for a moment forget, is to determine legislative intent.
In the words of a well-known authority, "[t]he true object of all interpretation is to ascertain the
meaning and will of the law-making body, to the end that it may be enforced." 12 In varying
language, "the, purpose of all rules or maxims" in interpretation "is to discover the true intention
of the law." 13 They "are only valuable when they subserve this purpose." 14 In fact, "the spirit or
intention of a statute prevails over the letter thereof." 15 A statute "should be construed according
to its spirit and reason, disregarding as far as necessary, the letter of the law." 16 By this, we do
not "correct the act of the Legislature, but rather ... carry out and give due course to" its true
intent. 17

It should be certain by now that when engaged in the task of construing an obscure expression in
the law 18 or where exact or literal rendering of the words would not carry out the legislative
intent, 19 the title thereof may be resorted to in the ascertainment of congressional will. Reason
therefor is that the title of the law may properly be regarded as an index of or clue or guide to
legislative intention. 20 This is especially true in this jurisdiction. For the reason that by specific
constitutional precept, "[n]o bill which may be enacted into law shall embrace more than one
subject which shall be expressed in the title of the bill." 21 In such case, courts "are compelled by
the Constitution to consider both the body and the title in order to arrive at the legislative
intention." 22

With the foregoing guideposts on hand, let us go back to the situation that confronts us. We take
another look at the title of R.A. 931, viz: "AN ACT TO AUTHORIZE THE FILING IN THE
PROPER COURT, UNDER CERTAIN CONDITIONS, OF CERTAIN CLAIMS OF TITLE TO
PARCELS OF LAND THAT HAVE BEEN DECLARED PUBLIC LAND, BY VIRTUE OF
JUDICIAL DECISIONS RENDERED WITHIN THE FORTY YEARS NEXT PRECEDING
THE APPROVAL OF THIS ACT." Readily to be noted is that the title is not merely composed
of catchwords. 23 It expresses in language clear the very substance of the law itself. From this, it
is easy to see that Congress intended to give some effect to the title of R.A. 931.

To be carefully noted is that the same imperfection in the language of R.A. 931 aforesaid —
from which surfaces a seeming inconsistency between the title and the body — attended
Commonwealth Act 276, the present statute's predecessor. That prior law used the very same
language in the body thereof and in its title. We attach meaning to this circumstance. Had the
legislature meant to shake off any legal effects that the title of the statute might have, it had a
chance to do so in the reenactment of the law. Congress could have altered with great facility the
wording of the title of R.A. 931. The fact is that it did not.

It has been observed that "in modern practice the title is adopted by the Legislature, more
thoroughly read than the act itself, and in many states is the subject of constitutional
regulation." 24 The constitutional in jurisdiction that the subject of the statute must be expressed
in the title of the bill, breathes the spirit of command because "the Constitution does not exact of
Congress the obligation to read during its deliberations the entire text of the bill." 25 Reliance,
therefore, may be placed on the title of a bill, which, while not an enacting part, no doubt "is in
some sort a part of the act, although only a formal part." 26 These considerations are all the more
valid here because R.A. 931 was passed without benefit of congressional debate in the House
from which it originated as House Bill 1410, 27 and in the Senate. 28
The title now under scrutiny possesses the strength of clarity and positiveness. It recites that it
authorizes court proceedings of claims to parcels of land declared public land "by virtue of
judicial decisions rendered within the forty years next preceding the approval of this Act." That
title is written "in capital letters" — by Congress itself; such kind of a title then "is not to be
classed with words or titles used by compilers of statutes" because "it is the legislature
speaking." 29 Accordingly, it is not hard to come to a deduction that the phrase last quoted from
R.A. 931 — "by virtue of judicial decisions rendered" — was but inadvertently omitted from the
body. Parting from this premise, there is, at bottom, no contradiction between title and body. In
line with views herein stated, the title belongs to that type of titles which; should be regarded as
part of the rules or provisions expressed in the body. 30 At the very least, the words "by virtue of
judicial decisions rendered" in the title of the law stand in equal importance to the phrase in
Section 1 thereof, "by virtue of judicial proceedings instituted."

Given the fact then that there are two phrases to consider the choice of construction we must give
to the statute does not need such reflection. We lean towards a liberal view. And this, because of
the principle long accepted that remedial legislation should receive the blessings of liberal
construction. 31 And, there should be no quibbling as to the fact that R.A. 931 is a piece of
remedial legislation. In essence, it provides a mode of relief to landowners who, before the Act,
had no legal means of perfecting their titles. This is plainly evident from the explanatory note
thereof, which reads:

This bill is intended to give an opportunity to any person or claimant who has any interest
in any parcel of land which has been declared as public land in cadastral proceeding for
failure of said person or claimant to present his claim within the time prescribed by law.

There are many meritorious cases wherein claimants to certain parcels of land have not
had the opportunity to answer or appear at the hearing of cases affecting their claims in
the corresponding cadastral proceedings for lack of sufficient notice or for other reasons
and circumstances which are beyond their control. Under C.A. No. 276, said persons or
claimants have no more legal remedy as the effectivity of said Act expired in 1940.

This measure seeks to remedy the lack of any existing law within said persons or
claimants with meritorious claims or interests in parcels of land may seek justice and
protection. This bill proposes to give said persons or claimants their day in court.
Approval of this bill is earnestly requested.

In fine, we say that lingual imperfections in the drafting of a statute should never be permitted to
hamstring judicial search for legislative intent, which can otherwise be discovered. Legal
technicalities should not abort the beneficent effects intended by legislation.

The sum of all the foregoing is that, as we now view Republic Act 931, claims of title that may
be filed thereunder embrace those parcels of land that have been declared public land "by virtue
of judicial decisions rendered within the forty years next preceding the approval of this Act."
Therefore, by that statute, the July 25, 1961 petition of respondent Belong Lutes to reopen Civil
Reservation Case No. 1, GLRO Record No. 211 of the cadastral court of Baguio, the decision on
which was rendered on November 13, 1922, comes within the 40-year period.
FOR THE REASONS GIVEN, the petition for certiorari is hereby granted; the cadastral court's
orders of August 5, 1963, November 5, 1963 and September 17, 1964 are hereby declared null
and void and the cadastral court is hereby directed to admit petitioners' oppositions and proceed
accordingly. No costs. So ordered.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 170633 October 17, 2007

MCC INDUSTRIAL SALES CORPORATION, petitioner,

vs.
SSANGYONG CORPORATION, respondents.

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari of the Decision1 of the Court of Appeals in
CA-G.R. CV No. 82983 and its Resolution2 denying the motion for reconsideration thereof.

Petitioner MCC Industrial Sales (MCC), a domestic corporation with office at Binondo, Manila,
is engaged in the business of importing and wholesaling stainless steel products. 3 One of its
suppliers is the Ssangyong Corporation (Ssangyong), 4 an international trading company5 with
head office in Seoul, South Korea and regional headquarters in Makati City, Philippines. 6 The
two corporations conducted business through telephone calls and facsimile or telecopy
transmissions.7 Ssangyong would send the pro forma invoices containing the details of the steel
product order to MCC; if the latter conforms thereto, its representative affixes his signature on
the faxed copy and sends it back to Ssangyong, again by fax. 8

On April 13, 2000, Ssangyong Manila Office sent, by fax, a letter9 addressed to Gregory Chan,
MCC Manager [also the President10 of Sanyo Seiki Stainless Steel Corporation], to confirm
MCC's and Sanyo Seiki's order of 220 metric tons (MT) of hot rolled stainless steel under a
preferential rate of US$1,860.00 per MT. Chan, on behalf of the corporations, assented and
affixed his signature on the conforme portion of the letter.11

On April 17, 2000, Ssangyong forwarded to MCC Pro Forma Invoice No. ST2-
POSTSO40112 containing the terms and conditions of the transaction. MCC sent back by fax to
Ssangyong the invoice bearing the conformity signature13 of Chan. As stated in the pro
forma invoice, payment for the ordered steel products would be made through an irrevocable
letter of credit (L/C) at sight in favor of Ssangyong. 14 Following their usual practice, delivery of
the goods was to be made after the L/C had been opened.

In the meantime, because of its confirmed transaction with MCC, Ssangyong placed the order
with its steel manufacturer, Pohang Iron and Steel Corporation (POSCO), in South Korea 15 and
paid the same in full.
Because MCC could open only a partial letter of credit, the order for 220MT of steel was split
into two,16 one for 110MT covered by Pro Forma Invoice No. ST2-POSTS0401-117 and another
for 110MT covered by ST2-POSTS0401-2,18 both dated April 17, 2000.

On June 20, 2000, Ssangyong, through its Manila Office, informed Sanyo Seiki and Chan, by
way of a fax transmittal, that it was ready to ship 193.597MT of stainless steel from Korea to the
Philippines. It requested that the opening of the L/C be facilitated.19 Chan affixed his signature
on the fax transmittal and returned the same, by fax, to Ssangyong. 20

Two days later, on June 22, 2000, Ssangyong Manila Office informed Sanyo Seiki, thru Chan,
that it was able to secure a US$30/MT price adjustment on the contracted price of
US$1,860.00/MT for the 200MT stainless steel, and that the goods were to be shipped in
two tranches, the first 100MT on that day and the second 100MT not later than June 27, 2000.
Ssangyong reiterated its request for the facilitation of the L/C's opening. 21

Ssangyong later, through its Manila Office, sent a letter, on June 26, 2000, to the Treasury Group
of Sanyo Seiki that it was looking forward to receiving the L/C details and a cable copy thereof
that day.22 Ssangyong sent a separate letter of the same date to Sanyo Seiki requesting for the
opening of the L/C covering payment of the first 100MT not later than June 28, 2000. 23 Similar
letters were transmitted by Ssangyong Manila Office on June 27, 2000. 24 On June 28, 2000,
Ssangyong sent another facsimile letter to MCC stating that its principal in Korea was already in
a difficult situation25 because of the failure of Sanyo Seiki and MCC to open the L/C's.

The following day, June 29, 2000, Ssangyong received, by fax, a letter signed by Chan,
requesting an extension of time to open the L/C because MCC's credit line with the bank had
been fully availed of in connection with another transaction, and MCC was waiting for an
additional credit line.26 On the same date, Ssangyong replied, requesting that it be informed of
the date when the L/C would be opened, preferably at the earliest possible time, since its Steel
Team 2 in Korea was having problems and Ssangyong was incurring warehousing costs. 27 To
maintain their good business relationship and to support MCC in its financial predicament,
Ssangyong offered to negotiate with its steel manufacturer, POSCO, another US$20/MT
discount on the price of the stainless steel ordered. This was intimated in Ssangyong's June 30,
2000 letter to MCC.28 On July 6, 2000, another follow-up letter29 for the opening of the L/C was
sent by Ssangyong to MCC.

However, despite Ssangyong's letters, MCC failed to open a letter of credit. 30 Consequently, on
August 15, 2000, Ssangyong, through counsel, wrote Sanyo Seiki that if the L/C's were not
opened, Ssangyong would be compelled to cancel the contract and hold MCC liable for damages
for breach thereof amounting to US$96,132.18, inclusive of warehouse expenses, related
interests and charges.31

Later, Pro Forma Invoice Nos. ST2-POSTS080-132 and ST2-POSTS080-233 dated August 16,
2000 were issued by Ssangyong and sent via fax to MCC. The invoices slightly varied the terms
of the earlier pro forma invoices (ST2-POSTSO401, ST2-POSTS0401-1 and ST2-
POSTS0401-2), in that the quantity was now officially 100MT per invoice and the price was
reduced to US$1,700.00 per MT. As can be gleaned from the photocopies of the said August 16,
2000 invoices submitted to the court, they both bear the conformity signature of MCC Manager
Chan.

On August 17, 2000, MCC finally opened an L/C with PCIBank for US$170,000.00 covering
payment for 100MT of stainless steel coil under Pro Forma Invoice No. ST2-POSTS080-
2.34 The goods covered by the said invoice were then shipped to and received by MCC. 35

MCC then faxed to Ssangyong a letter dated August 22, 2000 signed by Chan, requesting for a
price adjustment of the order stated in Pro Forma Invoice No. ST2-POSTS080-1, considering
that the prevailing price of steel at that time was US$1,500.00/MT, and that MCC lost a lot of
money due to a recent strike.36

Ssangyong rejected the request, and, on August 23, 2000, sent a demand letter 37 to Chan for the
opening of the second and last L/C of US$170,000.00 with a warning that, if the said L/C was
not opened by MCC on August 26, 2000, Ssangyong would be constrained to cancel the contract
and hold MCC liable for US$64,066.99 (representing cost difference, warehousing expenses,
interests and charges as of August 15, 2000) and other damages for breach. Chan failed to reply.

Exasperated, Ssangyong through counsel wrote a letter to MCC, on September 11, 2000,
canceling the sales contract under ST2-POSTS0401-1 /ST2-POSTS0401-2, and demanding
payment of US$97,317.37 representing losses, warehousing expenses, interests and charges. 38

Ssangyong then filed, on November 16, 2001, a civil action for damages due to breach of
contract against defendants MCC, Sanyo Seiki and Gregory Chan before the Regional Trial
Court of Makati City. In its complaint,39 Ssangyong alleged that defendants breached their
contract when they refused to open the L/C in the amount of US$170,000.00 for the remaining
100MT of steel under Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2.

After Ssangyong rested its case, defendants filed a Demurrer to Evidence 40 alleging that
Ssangyong failed to present the original copies of the pro forma invoices on which the civil
action was based. In an Order dated April 24, 2003, the court denied the demurrer, ruling that the
documentary evidence presented had already been admitted in the December 16, 2002
Order41 and their admissibility finds support in Republic Act (R.A.) No. 8792, otherwise known
as the Electronic Commerce Act of 2000. Considering that both testimonial and documentary
evidence tended to substantiate the material allegations in the complaint, Ssangyong's evidence
sufficed for purposes of a prima facie case. 42

After trial on the merits, the RTC rendered its Decision43 on March 24, 2004, in favor of
Ssangyong. The trial court ruled that when plaintiff agreed to sell and defendants agreed to buy
the 220MT of steel products for the price of US$1,860 per MT, the contract was perfected. The
subject transaction was evidenced by Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-
POSTS0401-2, which were later amended only in terms of reduction of volume as well as the
price per MT, following Pro Forma Invoice Nos. ST2-POSTS080-1 and ST2-POSTS080-2.
The RTC, however, excluded Sanyo Seiki from liability for lack of competent evidence.
The fallo of the decision reads:
 WHEREFORE, premises considered, Judgment is hereby rendered ordering defendants
MCC Industrial Sales Corporation and Gregory Chan, to pay plaintiff, jointly and
severally the following:

1) Actual damages of US$93,493.87 representing the outstanding principal claim plus

interest at the rate of 6% per annum from March 30, 2001.

2) Attorney's fees in the sum of P50,000.00 plus P2,000.00 per counsel's appearance in
court, the same being deemed just and equitable considering that by reason of defendants'
breach of their obligation under the subject contract, plaintiff was constrained to litigate
to enforce its rights and recover for the damages it sustained, and therefore had to engage
the services of a lawyer.

3) Costs of suit.

No award of exemplary damages for lack of sufficient basis.

SO ORDERED.44

On April 22, 2004, MCC and Chan, through their counsel of record, Atty. Eladio B. Samson,
filed their Notice of Appeal.45 On June 8, 2004, the law office of Castillo Zamora & Poblador
entered its appearance as their collaborating counsel.

In their Appeal Brief filed on March 9, 2005, 46 MCC and Chan raised before the CA the
following errors of the RTC:

I. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING THAT

APPELLANTS VIOLATED THEIR CONTRACT WITH APPELLEE

A. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING

THAT APPELLANTS AGREED TO PURCHASE 200 METRIC TONS OF
STEEL PRODUCTS FROM APPELLEE, INSTEAD OF ONLY 100 METRIC
TONS.

1. THE HONORABLE COURT A QUO PLAINLY ERRED IN

ADMITTING IN EVIDENCE THE PRO FORMA INVOICES WITH
REFERENCE NOS. ST2- POSTS0401-1 AND ST2-POSTS0401-2.

II. THE HONORABLE COURT A QUO PLAINLY ERRED IN AWARDING ACTUAL

DAMAGES TO APPELLEE.

III. THE HONORABLE COURT A QUO PLAINLY ERRED IN AWARDING

ATTORNEY'S FEES TO APPELLEE.
 IV. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING
APPELLANT GREGORY CHAN JOINTLY AND SEVERALLY LIABLE WITH
APPELLANT MCC.47

On August 31, 2005, the CA rendered its Decision48 affirming the ruling of the trial court, but
absolving Chan of any liability. The appellate court ruled, among others, that Pro Forma Invoice
Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E", "E-1" and "F") were admissible
in evidence, although they were mere facsimile printouts of MCC's steel orders. 49 The dispositive
portion of the appellate court's decision reads:

WHEREFORE, premises considered, the Court holds:

(1) The award of actual damages, with interest, attorney's fees and costs ordered by the
lower court is hereby AFFIRMED.

(2) Appellant Gregory Chan is hereby ABSOLVED from any liability.

SO ORDERED.50

A copy of the said Decision was received by MCC's and Chan's principal counsel, Atty. Eladio
B. Samson, on September 14, 2005.51 Their collaborating counsel, Castillo Zamora &
Poblador,52 likewise, received a copy of the CA decision on September 19, 2005. 53

On October 4, 2005, Castillo Zamora & Poblador, on behalf of MCC, filed a motion for
reconsideration of the said decision.54 Ssangyong opposed the motion contending that the
decision of the CA had become final and executory on account of the failure of MCC to file the
said motion within the reglementary period. The appellate court resolved, on November 22,
2005, to deny the motion on its merits,55 without, however, ruling on the procedural issue raised.

Aggrieved, MCC filed a petition for review on certiorari56 before this Court, imputing the
following errors to the Court of Appeals:

THE COURT OF APPEALS DECIDED A LEGAL QUESTION NOT IN

ACCORDANCE WITH JURISPRUDENCE AND SANCTIONED A DEPARTURE
FROM THE USUAL AND ACCEPTED COURSE OF JUDICIAL PROCEEDINGS BY
REVERSING THE COURT A QUO'S DISMISSAL OF THE COMPLAINT IN CIVIL
CASE NO. 02-124 CONSIDERING THAT:

I. THE COURT OF APPEALS ERRED IN SUSTAINING THE

ADMISSIBILITY IN EVIDENCE OF THE PRO-FORMA INVOICES WITH
REFERENCE NOS. ST2-POSTSO401-1 AND ST2-POSTSO401-2, DESPITE
THE FACT THAT THE SAME WERE MERE PHOTOCOPIES OF
FACSIMILE PRINTOUTS.

II. THE COURT OF APPEALS FAILED TO APPRECIATE THE OBVIOUS

FACT THAT, EVEN ASSUMING PETITIONER BREACHED THE
 SUPPOSED CONTRACT, THE FACT IS THAT PETITIONER FAILED TO
PROVE THAT IT SUFFERED ANY DAMAGES AND THE AMOUNT
THEREOF.

III. THE AWARD OF ACTUAL DAMAGES IN THE AMOUNT OF

US$93,493.87 IS SIMPLY UNCONSCIONABLE AND SHOULD HAVE BEEN
AT LEAST REDUCED, IF NOT DELETED BY THE COURT OF APPEALS. 57

In its Comment, Ssangyong sought the dismissal of the petition, raising the following arguments:
that the CA decision dated 15 August 2005 is already final and executory, because MCC's
motion for reconsideration was filed beyond the reglementary period of 15 days from receipt of a
copy thereof, and that, in any case, it was a pro forma motion; that MCC breached the contract
for the purchase of the steel products when it failed to open the required letter of credit; that the
printout copies and/or photocopies of facsimile or telecopy transmissions were properly admitted
by the trial court because they are considered original documents under R.A. No. 8792; and that
MCC is liable for actual damages and attorney's fees because of its breach, thus, compelling
Ssangyong to litigate.

The principal issues that this Court is called upon to resolve are the following:

I – Whether the CA decision dated 15 August 2005 is already final and executory;

II – Whether the print-out and/or photocopies of facsimile transmissions are electronic evidence
and admissible as such;

III – Whether there was a perfected contract of sale between MCC and Ssangyong, and, if in the
affirmative, whether MCC breached the said contract; and

IV – Whether the award of actual damages and attorney's fees in favor of Ssangyong is proper
and justified.

-I-

It cannot be gainsaid that in Albano v. Court of Appeals,58 we held that receipt of a copy of the
decision by one of several counsels on record is notice to all, and the period to appeal
commences on such date even if the other counsel has not yet received a copy of the decision. In
this case, when Atty. Samson received a copy of the CA decision on September 14, 2005, MCC
had only fifteen (15) days within which to file a motion for reconsideration conformably with
Section 1, Rule 52 of the Rules of Court, or to file a petition for review on certiorari in
accordance with Section 2, Rule 45. The period should not be reckoned from September 29,
2005 (when Castillo Zamora & Poblador received their copy of the decision) because notice to
Atty. Samson is deemed notice to collaborating counsel.

We note, however, from the records of the CA, that it was Castillo Zamora & Poblador, not Atty.
Samson, which filed both MCC's and Chan's Brief and Reply Brief. Apparently, the arrangement
between the two counsels was for the collaborating, not the principal, counsel to file the appeal
brief and subsequent pleadings in the CA. This explains why it was Castillo Zamora & Poblador
which filed the motion for the reconsideration of the CA decision, and they did so on October 5,
2005, well within the 15-day period from September 29, 2005, when they received their copy of
the CA decision. This could also be the reason why the CA did not find it necessary to resolve
the question of the timeliness of petitioner's motion for reconsideration, even as the CA denied
the same.

Independent of this consideration though, this Court assiduously reviewed the records and found
that strong concerns of substantial justice warrant the relaxation of this rule.

In Philippine Ports Authority v. Sargasso Construction and Development Corporation,59 we

ruled that:

In Orata v. Intermediate Appellate Court, we held that where strong considerations of

substantive justice are manifest in the petition, this Court may relax the strict application
of the rules of procedure in the exercise of its legal jurisdiction. In addition to the basic
merits of the main case, such a petition usually embodies justifying circumstance which
warrants our heeding to the petitioner's cry for justice in spite of the earlier negligence of
counsel. As we held in Obut v. Court of Appeals:

[W]e cannot look with favor on a course of action which would place the
administration of justice in a straight jacket for then the result would be a poor
kind of justice if there would be justice at all. Verily, judicial orders, such as the
one subject of this petition, are issued to be obeyed, nonetheless a non-compliance
is to be dealt with as the circumstances attending the case may warrant. What
should guide judicial action is the principle that a party-litigant is to be given the
fullest opportunity to establish the merits of his complaint or defense rather than
for him to lose life, liberty, honor or property on technicalities.

The rules of procedure are used only to secure and not override or frustrate justice. A six-
day delay in the perfection of the appeal, as in this case, does not warrant the outright
dismissal of the appeal. In Development Bank of the Philippines vs. Court of Appeals, we
gave due course to the petitioner's appeal despite the late filing of its brief in the appellate
court because such appeal involved public interest. We stated in the said case that the
Court may exempt a particular case from a strict application of the rules of procedure
where the appellant failed to perfect its appeal within the reglementary period, resulting
in the appellate court's failure to obtain jurisdiction over the case. In Republic vs.
Imperial, Jr., we also held that there is more leeway to exempt a case from the strictness
of procedural rules when the appellate court has already obtained jurisdiction over the
appealed case. We emphasize that:

[T]he rules of procedure are mere tools intended to facilitate the attainment of
justice, rather than frustrate it. A strict and rigid application of the rules must
always be eschewed when it would subvert the rule's primary objective of
enhancing fair trials and expediting justice. Technicalities should never be used to
defeat the substantive rights of the other party. Every party-litigant must be
 afforded the amplest opportunity for the proper and just determination of his
cause, free from the constraints of technicalities. 60

Moreover, it should be remembered that the Rules were promulgated to set guidelines in the
orderly administration of justice, not to shackle the hand that dispenses it. Otherwise, the courts
would be consigned to being mere slaves to technical rules, deprived of their judicial discretion.
Technicalities must take a backseat to substantive rights. After all, it is circumspect leniency in
this respect that will give the parties the fullest opportunity to ventilate the merits of their
respective causes, rather than have them lose life, liberty, honor or property on sheer
technicalities.61

The other technical issue posed by respondent is the alleged pro forma nature of MCC's motion
for reconsideration, ostensibly because it merely restated the arguments previously raised and
passed upon by the CA.

In this connection, suffice it to say that the mere restatement of arguments in a motion for
reconsideration does not per se result in a pro forma motion. In Security Bank and Trust
Company, Inc. v. Cuenca,62 we held that a motion for reconsideration may not be necessarily pro
forma even if it reiterates the arguments earlier passed upon and rejected by the appellate court.
A movant may raise the same arguments precisely to convince the court that its ruling was
erroneous. Furthermore, the pro forma rule will not apply if the arguments were not sufficiently
passed upon and answered in the decision sought to be reconsidered.

- II -

The second issue poses a novel question that the Court welcomes. It provides the occasion for
this Court to pronounce a definitive interpretation of the equally innovative provisions of the
Electronic Commerce Act of 2000 (R.A. No. 8792) vis-à-vis the Rules on Electronic Evidence.

Although the parties did not raise the question whether the original facsimile transmissions are
"electronic data messages" or "electronic documents" within the context of the Electronic
Commerce Act (the petitioner merely assails as inadmissible evidence the photocopies of the
said facsimile transmissions), we deem it appropriate to determine first whether the said fax
transmissions are indeed within the coverage of R.A. No. 8792 before ruling on whether the
photocopies thereof are covered by the law. In any case, this Court has ample authority to go
beyond the pleadings when, in the interest of justice or for the promotion of public policy, there
is a need to make its own findings in order to support its conclusions. 63

Petitioner contends that the photocopies of the pro forma invoices presented by respondent
Ssangyong to prove the perfection of their supposed contract of sale are inadmissible in evidence
and do not fall within the ambit of R.A. No. 8792, because the law merely admits as the best
evidence the original fax transmittal. On the other hand, respondent posits that, from a reading of
the law and the Rules on Electronic Evidence, the original facsimile transmittal of the pro
forma invoice is admissible in evidence since it is an electronic document and, therefore, the best
evidence under the law and the Rules. Respondent further claims that the photocopies of these
fax transmittals (specifically ST2-POSTS0401-1 and ST2-POSTS0401-2) are admissible under
the Rules on Evidence because the respondent sufficiently explained the non-production of the
original fax transmittals.

In resolving this issue, the appellate court ruled as follows:

Admissibility of Pro Forma

Invoices; Breach of Contract
by Appellants

Turning first to the appellants' argument against the admissibility of the Pro Forma
Invoices with Reference Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E",
"E-1" and "F", pp. 215-218, Records), appellants argue that the said documents are
inadmissible (sic) being violative of the best evidence rule.

The argument is untenable.

The copies of the said pro-forma invoices submitted by the appellee are admissible in
evidence, although they are mere electronic facsimile printouts of appellant's orders. Such
facsimile printouts are considered Electronic Documents under the New Rules on
Electronic Evidence, which came into effect on August 1, 2001. (Rule 2, Section 1 [h],
A.M. No. 01-7-01-SC).

"(h) 'Electronic document' refers to information or the representation of

information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an obligation
extinguished, or by which a fact may be proved and affirmed, which is received,
recorded, transmitted, stored, processed, retrieved or produced electronically. It
includes digitally signed documents and any printout or output, readable by sight
or other means, which accurately reflects the electronic data message or electronic
document. For purposes of these Rules, the term 'electronic document' may be
used interchangeably with 'electronic data message'.

An electronic document shall be regarded as the equivalent of an original document

under the Best Evidence Rule, as long as it is a printout or output readable by sight or
other means, showing to reflect the data accurately. (Rule 4, Section 1, A.M. No. 01-7-
01-SC)

The ruling of the Appellate Court is incorrect. R.A. No. 8792,64 otherwise known as the
Electronic Commerce Act of 2000, considers an electronic data message or an electronic
document as the functional equivalent of a written document for evidentiary purposes.65 The
Rules on Electronic Evidence66 regards an electronic document as admissible in evidence if it
complies with the rules on admissibility prescribed by the Rules of Court and related laws, and is
authenticated in the manner prescribed by the said Rules.67 An electronic document is also the
equivalent of an original document under the Best Evidence Rule, if it is a printout or output
readable by sight or other means, shown to reflect the data accurately.68
Thus, to be admissible in evidence as an electronic data message or to be considered as the
functional equivalent of an original document under the Best Evidence Rule, the writing must
foremost be an "electronic data message" or an "electronic document."

The Electronic Commerce Act of 2000 defines electronic data message and electronic document
as follows:

Sec. 5. Definition of Terms. For the purposes of this Act, the following terms are
defined, as follows:

xxx

c. "Electronic Data Message" refers to information generated, sent, received or stored by

electronic, optical or similar means.

xxx

f. "Electronic Document" refers to information or the representation of information, data,

figures, symbols or other modes of written expression, described or however represented,
by which a right is established or an obligation extinguished, or by which a fact may be
proved and affirmed, which is received, recorded, transmitted, stored, processed,
retrieved or produced electronically.

The Implementing Rules and Regulations (IRR) of R.A. No. 8792, 69 which was signed on July
13, 2000 by the then Secretaries of the Department of Trade and Industry, the Department of
Budget and Management, and then Governor of the Bangko Sentral ng Pilipinas, defines the
terms as:

Sec. 6. Definition of Terms. For the purposes of this Act and these Rules, the following
terms are defined, as follows:

xxx

(e) "Electronic Data Message" refers to information generated, sent, received or stored by
electronic, optical or similar means, but not limited to, electronic data interchange (EDI),
electronic mail, telegram, telex or telecopy. Throughout these Rules, the term "electronic
data message" shall be equivalent to and be used interchangeably with "electronic
document."

xxxx

(h) "Electronic Document" refers to information or the representation of information,

data, figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by which a
fact may be proved and affirmed, which is received, recorded, transmitted, stored,
processed, retrieved or produced electronically. Throughout these Rules, the term
 "electronic document" shall be equivalent to and be used interchangeably with
"electronic data message."

The phrase "but not limited to, electronic data interchange (EDI), electronic mail, telegram,
telex or telecopy" in the IRR's definition of "electronic data message" is copied from the Model
Law on Electronic Commerce adopted by the United Nations Commission on International Trade
Law (UNCITRAL),70 from which majority of the provisions of R.A. No. 8792 were
taken.71 While Congress deleted this phrase in the Electronic Commerce Act of 2000, the drafters
of the IRR reinstated it. The deletion by Congress of the said phrase is significant and pivotal, as
discussed hereunder.

The clause on the interchangeability of the terms "electronic data message" and "electronic
document" was the result of the Senate of the Philippines' adoption, in Senate Bill 1902, of the
phrase "electronic data message" and the House of Representative's employment, in House Bill
9971, of the term "electronic document."72 In order to expedite the reconciliation of the two
versions, the technical working group of the Bicameral Conference Committee adopted both
terms and intended them to be the equivalent of each one. 73 Be that as it may, there is a slight
difference between the two terms. While "data message" has reference to information
electronically sent, stored or transmitted, it does not necessarily mean that it will give rise to a
right or extinguish an obligation,74 unlike an electronic document. Evident from the law,
however, is the legislative intent to give the two terms the same construction.

The Rules on Electronic Evidence promulgated by this Court defines the said terms in the
following manner:

SECTION 1. Definition of Terms. – For purposes of these Rules, the following terms are
defined, as follows:

xxxx

(g) "Electronic data message" refers to information generated, sent, received or stored by
electronic, optical or similar means.

(h) "Electronic document" refers to information or the representation of information, data,

figures, symbols or other modes of written expression, described or however represented,
by which a right is established or an obligation extinguished, or by which a fact may be
proved and affirmed, which is received, recorded, transmitted, stored, processed,
retrieved or produced electronically. It includes digitally signed documents and print-out
or output, readable by sight or other means, which accurately reflects the electronic data
message or electronic document. For purposes of these Rules, the term "electronic
document" may be used interchangeably with "electronic data message."

Given these definitions, we go back to the original question: Is an original printout of a facsimile
transmission an electronic data message or electronic document?
The definitions under the Electronic Commerce Act of 2000, its IRR and the Rules on Electronic
Evidence, at first glance, convey the impression that facsimile transmissions are electronic data
messages or electronic documents because they are sent by electronic means. The expanded
definition of an "electronic data message" under the IRR, consistent with the UNCITRAL Model
Law, further supports this theory considering that the enumeration "xxx [is] not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy." And to telecopy
is to send a document from one place to another via a fax machine.75

As further guide for the Court in its task of statutory construction, Section 37 of the Electronic
Commerce Act of 2000 provides that

Unless otherwise expressly provided for, the interpretation of this Act shall give due
regard to its international origin and the need to promote uniformity in its application
and the observance of good faith in international trade relations. The generally accepted
principles of international law and convention on electronic commerce shall likewise be
considered.

Obviously, the "international origin" mentioned in this section can only refer to the UNCITRAL
Model Law, and the UNCITRAL's definition of "data message":

"Data message" means information generated, sent, received or stored by electronic,

optical or similar means including, but not limited to, electronic data interchange (EDI),
electronic mail, telegram, telex or telecopy.76

is substantially the same as the IRR's characterization of an "electronic data message."

However, Congress deleted the phrase, "but not limited to, electronic data interchange (EDI),
electronic mail, telegram, telex or telecopy," and replaced the term "data message" (as found in
the UNCITRAL Model Law ) with "electronic data message." This legislative divergence from
what is assumed as the term's "international origin" has bred uncertainty and now impels the
Court to make an inquiry into the true intent of the framers of the law. Indeed, in the construction
or interpretation of a legislative measure, the primary rule is to search for and determine the
intent and spirit of the law.77 A construction should be rejected that gives to the language used in
a statute a meaning that does not accomplish the purpose for which the statute was enacted, and
that tends to defeat the ends which are sought to be attained by the enactment. 78

Interestingly, when Senator Ramon B. Magsaysay, Jr., the principal author of Senate Bill 1902
(the predecessor of R.A. No. 8792), sponsored the bill on second reading, he proposed to adopt
the term "data message" as formulated and defined in the UNCITRAL Model Law. 79 During the
period of amendments, however, the term evolved into "electronic data message," and the phrase
"but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy" in the UNCITRAL Model Law was deleted. Furthermore, the term "electronic data
message," though maintaining its description under the UNCITRAL Model Law, except for the
aforesaid deleted phrase, conveyed a different meaning, as revealed in the following proceedings:

xxxx
Senator Santiago. Yes, Mr. President. I will furnish a copy together with the explanation
of this proposed amendment.

And then finally, before I leave the Floor, may I please be allowed to go back to Section
5; the Definition of Terms. In light of the acceptance by the good Senator of my proposed
amendments, it will then become necessary to add certain terms in our list of terms to be
defined. I would like to add a definition on what is "data," what is "electronic record" and
what is an "electronic record system."

If the gentleman will give me permission, I will proceed with the proposed amendment
on Definition of Terms, Section 5.

Senator Magsaysay. Please go ahead, Senator Santiago.

Senator Santiago. We are in Part 1, short title on the Declaration of Policy, Section 5,
Definition of Terms.

At the appropriate places in the listing of these terms that have to be defined since these
are arranged alphabetically, Mr. President, I would like to insert the term DATA and its
definition. So, the amendment will read: "DATA" MEANS REPRESENTATION, IN
ANY FORM, OF INFORMATION OR CONCEPTS.

The explanation is this: This definition of "data" or "data" as it is now fashionably

pronounced in America - - the definition of "data" ensures that our bill applies to any
form of information in an electronic record, whether these are figures, facts or ideas.

So again, the proposed amendment is this: "DATA" MEANS REPRESENTATIONS, IN

ANY FORM, OF INFORMATION OR CONCEPTS.

Senator Magsaysay. May I know how will this affect the definition of "Data Message"
which encompasses electronic records, electronic writings and electronic documents?

Senator Santiago. These are completely congruent with each other. These are compatible.
When we define "data," we are simply reinforcing the definition of what is a data
message.

Senator Magsaysay. It is accepted, Mr. President.

Senator Santiago. Thank you. The next term is "ELECTRONIC RECORD." The
proposed amendment is as follows:

"ELECTRONIC RECORD" MEANS DATA THAT IS RECORDED OR STORED ON

ANY MEDIUM IN OR BY A COMPUTER SYSTEM OR OTHER SIMILAR DEVICE,
THAT CAN BE READ OR PERCEIVED BY A PERSON OR A COMPUTER
SYSTEM OR OTHER SIMILAR DEVICE. IT INCLUDES A DISPLAY, PRINTOUT
OR OTHER OUTPUT OF THAT DATA.
The explanation for this term and its definition is as follows: The term "ELECTRONIC
RECORD" fixes the scope of our bill. The record is the data. The record may be on any
medium. It is electronic because it is recorded or stored in or by a computer system or a
similar device.

The amendment is intended to apply, for example, to data on magnetic strips on cards or
in Smart cards. As drafted, it would not apply to telexes or faxes, except computer-
generated faxes, unlike the United Nations model law on electronic commerce. It would
also not apply to regular digital telephone conversations since the information is not
recorded. It would apply to voice mail since the information has been recorded in or by a
device similar to a computer. Likewise, video records are not covered. Though when the
video is transferred to a website, it would be covered because of the involvement of the
computer. Music recorded by a computer system on a compact disc would be covered.

In short, not all data recorded or stored in digital form is covered. A computer or a
similar device has to be involved in its creation or storage. The term "similar device"
does not extend to all devices that create or store data in digital form. Although things
that are not recorded or preserved by or in a computer system are omitted from this bill,
these may well be admissible under other rules of law. This provision focuses on
replacing the search for originality proving the reliability of systems instead of that of
individual records and using standards to show systems reliability.

Paper records that are produced directly by a computer system such as printouts are
themselves electronic records being just the means of intelligible display of the contents
of the record. Photocopies of the printout would be paper record subject to the usual
rules about copies, but the original printout would be subject to the rules of admissibility
of this bill.

However, printouts that are used only as paper records and whose computer origin is
never again called on are treated as paper records. In that case, the reliability of the
computer system that produces the record is irrelevant to its reliability.

Senator Magsaysay. Mr. President, if my memory does not fail me, earlier, the lady
Senator accepted that we use the term "Data Message" rather than "ELECTRONIC
RECORD" in being consistent with the UNCITRAL term of "Data Message." So with the
new amendment of defining "ELECTRONIC RECORD," will this affect her accepting of
the use of "Data Message" instead of "ELECTRONIC RECORD"?

Senator Santiago. No, it will not. Thank you for reminding me. The term I would like to
insert is ELECTRONIC DATA MESSAGE in lieu of "ELECTRONIC RECORD."

Senator Magsaysay. Then we are, in effect, amending the term of the definition of
"Data Message" on page 2A, line 31, to which we have no objection.

Senator Santiago. Thank you, Mr. President.

 xxxx

Senator Santiago. Mr. President, I have proposed all the amendments that I desire to,
including the amendment on the effect of error or change. I will provide the language of
the amendment together with the explanation supporting that amendment to the
distinguished sponsor and then he can feel free to take it up in any session without any
further intervention.

Senator Magsaysay. Before we end, Mr. President, I understand from the proponent of
these amendments that these are based on the Canadian E-commerce Law of 1998. Is that
not right?

Senator Santiago. That is correct.80

Thus, when the Senate consequently voted to adopt the term "electronic data message," it was
consonant with the explanation of Senator Miriam Defensor-Santiago that it would not apply "to
telexes or faxes, except computer-generated faxes, unlike the United Nations model law on
electronic commerce." In explaining the term "electronic record" patterned after the E-
Commerce Law of Canada, Senator Defensor-Santiago had in mind the term "electronic data
message." This term then, while maintaining part of the UNCITRAL Model Law's terminology
of "data message," has assumed a different context, this time, consonant with the term
"electronic record" in the law of Canada. It accounts for the addition of the word "electronic" and
the deletion of the phrase "but not limited to, electronic data interchange (EDI), electronic mail,
telegram, telex or telecopy." Noteworthy is that the Uniform Law Conference of Canada,
explains the term "electronic record," as drafted in the Uniform Electronic Evidence Act, in a
manner strikingly similar to Sen. Santiago's explanation during the Senate deliberations:

"Electronic record" fixes the scope of the Act. The record is the data. The record may be
any medium. It is "electronic" because it is recorded or stored in or by a computer system
or similar device. The Act is intended to apply, for example, to data on magnetic strips on
cards, or in smart cards. As drafted, it would not apply to telexes or faxes (except
computer-generated faxes), unlike the United Nations Model Law on Electronic
Commerce. It would also not apply to regular digital telephone conversations, since the
information is not recorded. It would apply to voice mail, since the information has been
recorded in or by a device similar to a computer. Likewise video records are not covered,
though when the video is transferred to a Web site it would be, because of the
involvement of the computer. Music recorded by a computer system on a compact disk
would be covered.

In short, not all data recorded or stored in "digital" form is covered. A computer or
similar device has to be involved in its creation or storage. The term "similar device"
does not extend to all devices that create or store data in digital form. Although things
that are not recorded or preserved by or in a computer system are omitted from this Act,
they may well be admissible under other rules of law. This Act focuses on replacing the
search for originality, proving the reliability of systems instead of that of individual
records, and using standards to show systems reliability.
 Paper records that are produced directly by a computer system, such as printouts, are
themselves electronic records, being just the means of intelligible display of the contents
of the record. Photocopies of the printout would be paper records subject to the usual
rules about copies, but the "original" printout would be subject to the rules of
admissibility of this Act.

However, printouts that are used only as paper records, and whose computer origin is
never again called on, are treated as paper records. See subsection 4(2). In this case the
reliability of the computer system that produced the record is relevant to its reliability. 81

There is no question then that when Congress formulated the term "electronic data message," it
intended the same meaning as the term "electronic record" in the Canada law. This construction
of the term "electronic data message," which excludes telexes or faxes, except computer-
generated faxes, is in harmony with the Electronic Commerce Law's focus on "paperless"
communications and the "functional equivalent approach"82 that it espouses. In fact, the
deliberations of the Legislature are replete with discussions on paperless and digital transactions.

Facsimile transmissions are not, in this sense, "paperless," but verily are paper-based.

A facsimile machine, which was first patented in 1843 by Alexander Bain,83 is a device that can
send or receive pictures and text over a telephone line. It works by digitizing an image—dividing
it into a grid of dots. Each dot is either on or off, depending on whether it is black or white.
Electronically, each dot is represented by a bit that has a value of either 0 (off) or 1 (on). In this
way, the fax machine translates a picture into a series of zeros and ones (called a bit map) that
can be transmitted like normal computer data. On the receiving side, a fax machine reads the
incoming data, translates the zeros and ones back into dots, and reprints the picture. 84 A fax
machine is essentially an image scanner, a modem and a computer printer combined into a highly
specialized package. The scanner converts the content of a physical document into a digital
image, the modem sends the image data over a phone line, and the printer at the other end makes
a duplicate of the original document.85 Thus, in Garvida v. Sales, Jr.,86 where we explained the
unacceptability of filing pleadings through fax machines, we ruled that:

A facsimile or fax transmission is a process involving the transmission and reproduction

of printed and graphic matter by scanning an original copy, one elemental area at a time,
and representing the shade or tone of each area by a specified amount of electric current.
The current is transmitted as a signal over regular telephone lines or via microwave relay
and is used by the receiver to reproduce an image of the elemental area in the proper
position and the correct shade. The receiver is equipped with a stylus or other device that
produces a printed record on paper referred to as a facsimile.

x x x A facsimile is not a genuine and authentic pleading. It is, at best, an exact copy
preserving all the marks of an original. Without the original, there is no way of
determining on its face whether the facsimile pleading is genuine and authentic and was
originally signed by the party and his counsel. It may, in fact, be a sham pleading.87
Accordingly, in an ordinary facsimile transmission, there exists an original paper-
based information or data that is scanned, sent through a phone line, and re-printed at the
receiving end. Be it noted that in enacting the Electronic Commerce Act of 2000, Congress
intended virtual or paperless writings to be the functional equivalent and to have the same legal
function as paper-based documents.88 Further, in a virtual or paperless environment, technically,
there is no original copy to speak of, as all direct printouts of the virtual reality are the same, in
all respects, and are considered as originals.89 Ineluctably, the law's definition of "electronic data
message," which, as aforesaid, is interchangeable with "electronic document," could not have
included facsimile transmissions, which have an original paper-based copy as sent and a paper-
based facsimile copy as received. These two copies are distinct from each other, and have
different legal effects. While Congress anticipated future developments in communications and
computer technology90 when it drafted the law, it excluded the early forms of technology, like
telegraph, telex and telecopy (except computer-generated faxes, which is a newer development
as compared to the ordinary fax machine to fax machine transmission), when it defined the term
"electronic data message."

Clearly then, the IRR went beyond the parameters of the law when it adopted verbatim the
UNCITRAL Model Law's definition of "data message," without considering the intention of
Congress when the latter deleted the phrase "but not limited to, electronic data interchange
(EDI), electronic mail, telegram, telex or telecopy." The inclusion of this phrase in the IRR
offends a basic tenet in the exercise of the rule-making power of administrative agencies. After
all, the power of administrative officials to promulgate rules in the implementation of a statute is
necessarily limited to what is found in the legislative enactment itself. The implementing rules
and regulations of a law cannot extend the law or expand its coverage, as the power to amend or
repeal a statute is vested in the Legislature.91 Thus, if a discrepancy occurs between the basic law
and an implementing rule or regulation, it is the former that prevails, because the law cannot be
broadened by a mere administrative issuance—an administrative agency certainly cannot amend
an act of Congress.92 Had the Legislature really wanted ordinary fax transmissions to be covered
by the mantle of the Electronic Commerce Act of 2000, it could have easily lifted without a bit
of tatter the entire wordings of the UNCITRAL Model Law.

Incidentally, the National Statistical Coordination Board Task Force on the Measurement of E-
Commerce,93 on November 22, 2006, recommended a working definition of "electronic
commerce," as "[a]ny commercial transaction conducted through electronic, optical and similar
medium, mode, instrumentality and technology. The transaction includes the sale or purchase of
goods and services, between individuals, households, businesses and governments conducted
over computer-mediated networks through the Internet, mobile phones, electronic data
interchange (EDI) and other channels through open and closed networks." The Task Force's
proposed definition is similar to the Organization of Economic Cooperation and Development's
(OECD's) broad definition as it covers transactions made over any network, and, in addition, it
adopted the following provisions of the OECD definition: (1) for transactions, it covers sale or
purchase of goods and services; (2) for channel/network, it considers any computer-mediated
network and NOT limited to Internet alone; (3) it excludes transactions received/placed using
fax, telephone or non-interactive mail; (4) it considers payments done online or offline; and (5) it
considers delivery made online (like downloading of purchased books, music or software
programs) or offline (deliveries of goods).94
We, therefore, conclude that the terms "electronic data message" and "electronic document," as
defined under the Electronic Commerce Act of 2000, do not include a facsimile transmission.
Accordingly, a facsimile transmission cannot be considered as electronic evidence. It is not the
functional equivalent of an original under the Best Evidence Rule and is not admissible
as electronic evidence.

Since a facsimile transmission is not an "electronic data message" or an "electronic document,"

and cannot be considered as electronic evidence by the Court, with greater reason is a photocopy
of such a fax transmission not electronic evidence. In the present case, therefore, Pro Forma
Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"), which
are mere photocopies of the original fax transmittals, are not electronic evidence, contrary to the
position of both the trial and the appellate courts.

- III -

Nevertheless, despite the pro forma invoices not being electronic evidence, this Court finds that
respondent has proven by preponderance of evidence the existence of a perfected contract of
sale.

In an action for damages due to a breach of a contract, it is essential that the claimant proves (1)
the existence of a perfected contract, (2) the breach thereof by the other contracting party and (3)
the damages which he/she sustained due to such breach. Actori incumbit onus probandi. The
burden of proof rests on the party who advances a proposition affirmatively.95 In other words, a
plaintiff in a civil action must establish his case by a preponderance of evidence, that is, evidence
that has greater weight, or is more convincing than that which is offered in opposition to it. 96

In general, contracts are perfected by mere consent,97 which is manifested by the meeting of the
offer and the acceptance upon the thing and the cause which are to constitute the contract. The
offer must be certain and the acceptance absolute.98 They are, moreover, obligatory in whatever
form they may have been entered into, provided all the essential requisites for their validity are
present.99 Sale, being a consensual contract, follows the general rule that it is perfected at the
moment there is a meeting of the minds upon the thing which is the object of the contract and
upon the price. From that moment, the parties may reciprocally demand performance, subject to
the provisions of the law governing the form of contracts. 100

The essential elements of a contract of sale are (1) consent or meeting of the minds, that is, to
transfer ownership in exchange for the price, (2) object certain which is the subject matter of the
contract, and (3) cause of the obligation which is established. 101

In this case, to establish the existence of a perfected contract of sale between the parties,
respondent Ssangyong formally offered in evidence the testimonies of its witnesses and the
following exhibits:

Exhibit Description Purpose

E Pro forma Invoice dated 17 To show that defendants contracted
April 2000 with Contract with plaintiff for the delivery of 110
 No. ST2-POSTS0401- MT of stainless steel from Korea
1, photocopy payable by way of an irrevocable letter
of credit in favor of plaintiff, among
other conditions.
E-1 Pro forma Invoice dated 17 To show that defendants sent their
April 2000 with Contract confirmation of the (i) delivery to it of
No. ST2- the specified stainless steel products,
POSTS0401, contained in (ii) defendants' payment thereof by
facsimile/thermal paper faxed way of an irrevocable letter of credit in
by defendants to plaintiff favor of plaintiff, among other
showing the printed conditions.
transmission details on the
upper portion of said paper as
coming from defendant MCC
on 26 Apr 00 08:41AM
E-2 Conforme signature of Mr. To show that defendants sent their
Gregory Chan, contained in confirmation of the (i) delivery to it of
facsimile/thermal paper faxed the total of 220MT specified stainless
by defendants to plaintiff steel products, (ii) defendants'
showing the printed payment thereof by way of an
transmission details on the irrevocable letter of credit in favor of
upper portion of said paper as plaintiff, among other conditions.
coming from defendant MCC
on 26 Apr 00 08:41AM
F Pro forma Invoice dated 17 To show that defendants contracted
April 2000 with Contract with plaintiff for delivery of another
No. ST2-POSTSO401- 110 MT of stainless steel from Korea
2, photocopy payable by way of an irrevocable letter
of credit in favor of plaintiff, among
other conditions.
G Letter to defendant SANYO To prove that defendants were
SEIKE dated 20 June informed of the date of L/C opening
2000, contained in and defendant's conforme/approval
facsimile/thermal paper thereof.
G-1 Signature of defendant
Gregory Chan, contained in
facsimile/thermal paper.
H Letter to defendants dated 22 To prove that defendants were
June 2000, original informed of the successful price
adjustments secured by plaintiff in
favor of former and were advised of
the schedules of its L/C opening.
I Letter to defendants dated 26 To prove that plaintiff repeatedly
June 2000, original requested defendants for the agreed
J Letter to defendants dated 26 opening of the Letters of Credit,
June 2000, original defendants' failure and refusal to
K Letter to defendants dated 27 comply with their obligations and the
June 2000, original problems of plaintiff is incurring by
reason of defendants' failure and
L Facsimile message to
refusal to open the L/Cs.
defendants dated 28 June
2000, photocopy
M Letter from defendants dated To prove that defendants admit of their
29 June 2000, contained in liabilities to plaintiff, that they
facsimile/thermal paper faxed requested for "more extension" of time
by defendants to plaintiff for the opening of the Letter of Credit,
showing the printed and begging for favorable
transmission details on the understanding and consideration.
upper portion of said paper as
coming from defendant MCC
on 29 June 00 11:12 AM
M-1 Signature of defendant
Gregory Chan, contained in
facsimile/thermal paper faxed
by defendants to plaintiff
showing the printed
transmission details on the
upper portion of said paper as
coming from defendant MCC
on June 00 11:12 AM
N Letter to defendants dated 29
June 2000, original
O Letter to defendants dated 30 To prove that plaintiff reiterated its
June 2000, photocopy request for defendants to L/C opening
after the latter's request for extension
of time was granted, defendants'
failure and refusal to comply therewith
extension of time notwithstanding.
P Letter to defendants dated 06
July 2000, original
Q Demand letter to defendants To prove that plaintiff was constrained
dated 15 Aug 2000, original to engaged services of a lawyer for
collection efforts.
R Demand letter to defendants To prove that defendants opened the
dated 23 Aug 2000, original first L/C in favor of plaintiff, requested
for further postponement of the final
L/C and for minimal amounts, were
urged to open the final L/C on time,
 and were informed that failure to
comply will cancel the contract.
S Demand letter to defendants To show defendants' refusal and
dated 11 Sept 2000, original failure to open the final L/C on time,
the cancellation of the contract as a
consequence thereof, and final demand
upon defendants to remit its
obligations.
W Letter from plaintiff To prove that there was a perfected
SSANGYONG to defendant sale and purchase agreement between
SANYO SEIKI dated 13 April the parties for 220 metric tons of steel
2000, with fax back from products at the price of US$1,860/ton.
defendants SANYO
SEIKI/MCC to plaintiff
SSANGYONG, contained in
facsimile/thermal paper with
back-up photocopy
W-1 Conforme signature of To prove that defendants, acting
defendant Gregory Chan, through Gregory Chan, agreed to the
contained in facsimile/thermal sale and purchase of 220 metric tons of
paper with back-up photocopy steel products at the price of
US$1,860/ton.
W-2 Name of sender MCC To prove that defendants sent their
Industrial Sales Corporation conformity to the sale and purchase
agreement by facsimile transmission.
X Pro forma Invoice dated 16 To prove that defendant MCC agreed
August 2000, photocopy to adjust and split the confirmed
purchase order into 2 shipments at 100
metric tons each at the discounted
price of US$1,700/ton.
X-1 Notation "1/2", photocopy To prove that the present Pro forma
Invoice was the first of 2 pro forma
invoices.
X-2 Ref. No. ST2-POSTS080- To prove that the present Pro
1, photocopy forma Invoice was the first of 2 pro
forma invoices.
X-3 Conforme signature of To prove that defendant MCC, acting
defendant Gregory through Gregory Chan, agreed to the
Chan, photocopy sale and purchase of the balance of
100 metric tons at the discounted price
of US$1,700/ton, apart from the other
order and shipment of 100 metric tons
which was delivered by plaintiff
SSANGYONG and paid for by
defendant MCC.
 DD Letter from defendant MCC to
plaintiff SSANGYONG dated
22 August 2000, contained in
facsimile/thermal paper with
back-up photocopy
DD-1 Ref. No. ST2-POSTS080-
1, contained in
facsimile/thermal paper with
back-up photocopy
DD-2 Signature of defendant
Gregory Chan, contained in
facsimile/thermal paper with
back-up photocopy
To prove that there was a perfected
sale and purchase agreement between
plaintiff SSANGYONG and defendant
MCC for the balance of 100 metric
tons, apart from the other order and
shipment of 100 metric tons which
was delivered by plaintiff
SSANGYONG and paid for by
defendant MCC.
To prove that there was a perfected
sale and purchase agreement between
plaintiff SSANGYONG and defendant
MCC for the balance of 100 metric
tons, apart from the other order and
shipment of 100 metric tons which
was delivered by plaintiff
SSANGYONG and paid for by
defendant MCC.
To prove that defendant MCC, acting
through Gregory Chan, agreed to the
sale and purchase of the balance of
100 metric tons, apart from the other
order and shipment of 100 metric tons
which was delivered by plaintiff
Ssangyong and paid for by defendant
MCC.102

Significantly, among these documentary evidence presented by respondent, MCC, in its petition
before this Court, assails the admissibility only of Pro Forma Invoice Nos. ST2-POSTS0401-
1 and ST2-POSTS0401-2 (Exhibits "E" and "F"). After sifting through the records, the Court
found that these invoices are mere photocopies of their original fax transmittals. Ssangyong
avers that these documents were prepared after MCC asked for the splitting of the original order
into two, so that the latter can apply for an L/C with greater facility. It, however, failed to explain
why the originals of these documents were not presented.

To determine whether these documents are admissible in evidence, we apply the ordinary Rules
on Evidence, for as discussed above we cannot apply the Electronic Commerce Act of 2000 and
the Rules on Electronic Evidence.

Because these documents are mere photocopies, they are simply secondary evidence, admissible
only upon compliance with Rule 130, Section 5, which states, "[w]hen the original document has
been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or
existence and the cause of its unavailability without bad faith on his part, may prove its contents
by a copy, or by a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated." Furthermore, the offeror of secondary evidence must prove the
predicates thereof, namely: (a) the loss or destruction of the original without bad faith on the part
of the proponent/offeror which can be shown by circumstantial evidence of routine practices of
destruction of documents; (b) the proponent must prove by a fair preponderance of evidence as
to raise a reasonable inference of the loss or destruction of the original copy; and (c) it must be
shown that a diligent and bona fide but unsuccessful search has been made for the document in
the proper place or places. It has been held that where the missing document is the foundation of
the action, more strictness in proof is required than where the document is only collaterally
involved.103

Given these norms, we find that respondent failed to prove the existence of the original fax
transmissions of Exhibits E and F, and likewise did not sufficiently prove the loss or destruction
of the originals. Thus, Exhibits E and F cannot be admitted in evidence and accorded probative
weight.

It is observed, however, that respondent Ssangyong did not rely merely on Exhibits E and F to
prove the perfected contract. It also introduced in evidence a variety of other documents, as
enumerated above, together with the testimonies of its witnesses. Notable among them are Pro
Forma Invoice Nos. ST2-POSTS080-1 and ST2-POSTS080-2 which were issued by Ssangyong
and sent via fax to MCC. As already mentioned, these invoices slightly varied the terms of the
earlier invoices such that the quantity was now officially 100MT per invoice and the price
reduced to US$1,700.00 per MT. The copies of the said August 16, 2000 invoices submitted to
the court bear the conformity signature of MCC Manager Chan.

Pro Forma Invoice No. ST2-POSTS080-1 (Exhibit "X"), however, is a mere photocopy of its
original. But then again, petitioner MCC does not assail the admissibility of this document in the
instant petition. Verily, evidence not objected to is deemed admitted and may be validly
considered by the court in arriving at its judgment.104 Issues not raised on appeal are deemed
abandoned.

As to Pro Forma Invoice No. ST2-POSTS080-2 (Exhibits "1-A" and "2-C"), which was
certified by PCIBank as a true copy of its original,105 it was, in fact, petitioner MCC which
introduced this document in evidence. Petitioner MCC paid for the order stated in this invoice.
Its admissibility, therefore, is not open to question.

These invoices (ST2-POSTS0401, ST2-POSTS080-1 and ST2-POSTS080-2), along with the

other unchallenged documentary evidence of respondent Ssangyong, preponderate in favor of the
claim that a contract of sale was perfected by the parties.

This Court also finds merit in the following observations of the trial court:

Defendants presented Letter of Credit (Exhibits "1", "1-A" to "1-R") referring to Pro
Forma Invoice for Contract No. ST2POSTS080-2, in the amount of US$170,000.00, and
which bears the signature of Gregory Chan, General Manager of MCC. Plaintiff, on the
other hand, presented Pro Forma Invoice referring to Contract No. ST2-POSTS080-1, in
the amount of US$170,000.00, which likewise bears the signature of Gregory Chan,
MCC. Plaintiff accounted for the notation "1/2" on the right upper portion of the Invoice,
that is, that it was the first of two (2) pro forma invoices covering the subject contract
 between plaintiff and the defendants. Defendants, on the other hand, failed to account for
the notation "2/2" in its Pro Forma Invoice (Exhibit "1-A"). Observably further, both Pro
Forma Invoices bear the same date and details, which logically mean that they both apply
to one and the same transaction.106

Indeed, why would petitioner open an L/C for the second half of the transaction if there was no
first half to speak of?

The logical chain of events, as gleaned from the evidence of both parties, started with the
petitioner and the respondent agreeing on the sale and purchase of 220MT of stainless steel at
US$1,860.00 per MT. This initial contract was perfected. Later, as petitioner asked for several
extensions to pay, adjustments in the delivery dates, and discounts in the price as originally
agreed, the parties slightly varied the terms of their contract, without necessarily novating it, to
the effect that the original order was reduced to 200MT, split into two deliveries, and the price
discounted to US$1,700 per MT. Petitioner, however, paid only half of its obligation and failed
to open an L/C for the other 100MT. Notably, the conduct of both parties sufficiently established
the existence of a contract of sale, even if the writings of the parties, because of their contested
admissibility, were not as explicit in establishing a contract.107 Appropriate conduct by the
parties may be sufficient to establish an agreement, and while there may be instances where the
exchange of correspondence does not disclose the exact point at which the deal was closed, the
actions of the parties may indicate that a binding obligation has been undertaken.108

With our finding that there is a valid contract, it is crystal-clear that when petitioner did not open
the L/C for the first half of the transaction (100MT), despite numerous demands from respondent
Ssangyong, petitioner breached its contractual obligation. It is a well-entrenched rule that the
failure of a buyer to furnish an agreed letter of credit is a breach of the contract between buyer
and seller. Indeed, where the buyer fails to open a letter of credit as stipulated, the seller or
exporter is entitled to claim damages for such breach. Damages for failure to open a commercial
credit may, in appropriate cases, include the loss of profit which the seller would reasonably
have made had the transaction been carried out.109

- IV -

This Court, however, finds that the award of actual damages is not in accord with the evidence
on record. It is axiomatic that actual or compensatory damages cannot be presumed, but must be
proven with a reasonable degree of certainty.110 In Villafuerte v. Court of Appeals,111 we
explained that:

Actual or compensatory damages are those awarded in order to compensate a party for an
injury or loss he suffered. They arise out of a sense of natural justice and are aimed at
repairing the wrong done. Except as provided by law or by stipulation, a party is entitled
to an adequate compensation only for such pecuniary loss as he has duly proven. It is
hornbook doctrine that to be able to recover actual damages, the claimant bears the onus
of presenting before the court actual proof of the damages alleged to have been suffered,
thus:
 A party is entitled to an adequate compensation for such pecuniary loss actually
suffered by him as he has duly proved. Such damages, to be recoverable, must not
only be capable of proof, but must actually be proved with a reasonable degree of
certainty. We have emphasized that these damages cannot be presumed and
courts, in making an award must point out specific facts which could afford a
basis for measuring whatever compensatory or actual damages are borne.112

In the instant case, the trial court awarded to respondent Ssangyong US$93,493.87 as actual
damages. On appeal, the same was affirmed by the appellate court. Noticeably, however, the trial
and the appellate courts, in making the said award, relied on the following documents submitted
in evidence by the respondent: (1) Exhibit "U," the Statement of Account dated March 30, 2001;
(2) Exhibit "U-1," the details of the said Statement of Account); (3) Exhibit "V," the contract of
the alleged resale of the goods to a Korean corporation; and (4) Exhibit "V-1," the authentication
of the resale contract from the Korean Embassy and certification from the Philippine Consular
Office.

The statement of account and the details of the losses sustained by respondent due to the said
breach are, at best, self-serving. It was respondent Ssangyong itself which prepared the said
documents. The items therein are not even substantiated by official receipts. In the absence of
corroborative evidence, the said statement of account is not sufficient basis to award actual
damages. The court cannot simply rely on speculation, conjecture or guesswork as to the fact and
amount of damages, but must depend on competent proof that the claimant had suffered, and on
evidence of, the actual amount thereof.113

Furthermore, the sales contract and its authentication certificates, Exhibits "V" and "V-1,"
allegedly evidencing the resale at a loss of the stainless steel subject of the parties' breached
contract, fail to convince this Court of the veracity of its contents. The steel items indicated in
the sales contract114 with a Korean corporation are different in all respects from the items ordered
by petitioner MCC, even in size and quantity. We observed the following discrepancies:

List of commodities as stated in Exhibit "V":

COMMODITY: Stainless Steel HR Sheet in Coil, Slit Edge

SPEC: SUS304 NO. 1
SIZE/Q'TY:
2.8MM X 1,219MM X C 8.193MT
3.0MM X 1,219MM X C 7.736MT
3.0MM X 1,219MM X C 7.885MT
3.0MM X 1,219MM X C 8.629MT
4.0MM X 1,219MM X C 7.307MT
4.0MM X 1,219MM X C 7.247MT
4.5MM X 1,219MM X C 8.450MT
4.5MM X 1,219MM X C 8.870MT
5.0MM X 1,219MM X C 8.391MT
 6.0MM X 1,219MM X C 6.589MT
6.0MM X 1,219MM X C 7.878MT
6.0MM X 1,219MM X C 8.397MT
TOTAL: 95.562MT115

List of commodities as stated in Exhibit "X" (the invoice that was not paid):

DESCRIPTION: Hot Rolled Stainless Steel Coil SUS 304

SIZE AND QUANTITY:
2.6 MM X 4' X C 10.0MT
3.0 MM X 4' X C 25.0MT
4.0 MM X 4' X C 15.0MT
4.5 MM X 4' X C 15.0MT
5.0 MM X 4' X C 10.0MT
6.0 MM X 4' X C 25.0MT
TOTAL: 100MT116

From the foregoing, we find merit in the contention of MCC that Ssangyong did not adequately
prove that the items resold at a loss were the same items ordered by the petitioner. Therefore, as
the claim for actual damages was not proven, the Court cannot sanction the award.

Nonetheless, the Court finds that petitioner knowingly breached its contractual obligation and
obstinately refused to pay despite repeated demands from respondent. Petitioner even asked for
several extensions of time for it to make good its obligation. But in spite of respondent's
continuous accommodation, petitioner completely reneged on its contractual duty. For such
inattention and insensitivity, MCC must be held liable for nominal damages. "Nominal damages
are 'recoverable where a legal right is technically violated and must be vindicated against an
invasion that has produced no actual present loss of any kind or where there has been a breach of
contract and no substantial injury or actual damages whatsoever have been or can be
shown.'"117 Accordingly, the Court awards nominal damages of P200,000.00 to respondent
Ssangyong.

As to the award of attorney's fees, it is well settled that no premium should be placed on the right
to litigate and not every winning party is entitled to an automatic grant of attorney's fees. The
party must show that he falls under one of the instances enumerated in Article 2208 of the Civil
Code.118 In the instant case, however, the Court finds the award of attorney's fees proper,
considering that petitioner MCC's unjustified refusal to pay has compelled respondent
Ssangyong to litigate and to incur expenses to protect its rights.

WHEREFORE, PREMISES CONSIDERED, the appeal is PARTIALLY GRANTED. The

Decision of the Court of Appeals in CA-G.R. CV No. 82983 is MODIFIED in that the award of
actual damages is DELETED. However, petitioner is ORDERED to pay
respondent NOMINAL DAMAGES in the amount of P200,000.00, and the ATTORNEY'S
FEES as awarded by the trial court.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 170735 December 17, 2007

IMMACULADA L. GARCIA, petitioner,

vs.
SOCIAL SECURITY COMMISSION LEGAL AND COLLECTION, SOCIAL
SECURITY SYSTEM, respondents.

DECISION

CHICO-NAZARIO, J.:

This is petition for review on Certiorari under Rule 45 of the Rules of Court is assailing the 2
June 2005 Decision1 and 8 December 2005 Resolution2 both of the Court of Appeals in CA-G.R.
SP No. 85923. the appellate court affirmed the --- Order and --- Resolution both of the Social
Security Commission (SSC) in SSC Case No. 10048, finding Immaculada L. Garcia (Garcia), the
sole surviving director of Impact Corporation, petitioner herein, liable for unremitted, albeit
collected, SSS contributions.

Petitioner Immaculada L. Garcia, Eduardo de Leon, Ricardo de Leon, Pacita Fernandez, and
Consuelo Villanueva were directors3 of Impact Corporation. The corporation was engaged in the
business of manufacturing aluminum tube containers and operated two factories. One was a
"slug" foundry-factory located in Cuyapo, Nueva Ecija, while the other was an Extrusion Plant in
Cainta, Metro Manila, which processed the "slugs" into aluminum collapsible tubes and similar
containers for toothpaste and other related products.

Records show that around 1978, Impact Corporation started encountering financial problems. By
1980, labor unrest besieged the corporation.

In March 1983, Impact Corporation filed with the Securities and Exchange Commission (SEC) a
Petition for Suspension of Payments,4 docketed as SEC Case No. 02423, in which it stated that:

[Impact Corporation] has been and still is engaged in the business of manufacturing
aluminum tube containers x x x.

xxxx

In brief, it is an on-going, viable, and profitable enterprise.

On 8 May 1985, the union of Impact Corporation filed a Notice of Strike with the Ministry of
Labor which was followed by a declaration of strike on 28 July 1985. Subsequently, the Ministry
of Labor certified the labor dispute for compulsory arbitration to the National Labor Relations
Commission (NLRC) in an Order5 dated 25 August 1985. The Ministry of Labor, in the same
Order, noted the inability of Impact Corporation to pay wages, 13th month pay, and SSS
remittances due to cash liquidity problems. A portion of the order reads:

On the claims of unpaid wages, unpaid 13th month pay and non-remittance of loan
amortization and SSS premiums, we are for directing the company to pay the same to the
workers and to remit loan amortizations and SSS premiums previously deducted from
their wages to the Social Security System. Such claims were never contested by the
company both during the hearing below and in our office. In fact, such claims were
admitted by the company although it alleged cash liquidity as the main reason for such
non-payment.

WHEREFORE, the dispute at Impact Corporation is hereby certified to the National

Labor Relations Commission for compulsory arbitration in accordance with Article 264
(g) of the Labor Code, as amended.

xxxx

The company is directed to pay all the entitled workers unpaid wages, unpaid 13th month
pay and to remit to the Social Security System loan amortizations and SSS premiums
previously deducted from the wages of the workers.6

On 3 July 1985, the Social Security System (SSS), through its Legal and Collection Division
(LCD), filed a case before the SSC for the collection of unremitted SSS premium contributions
withheld by Impact Corporation from its employees. The case which impleaded Impact
Corporation as respondent was docketed as SSC Case No. 10048. 7

Impact Corporation was compulsorily covered by the SSS as an employer effective 15 July 1963
and was assigned Employer I.D. No. 03-2745100-21.

In answer to the allegations raised in SSC Case No. 10048, Impact Corporation, through its then
Vice President Ricardo de Leon, explained in a letter dated 18 July 1985 that it had been
confronted with strikes in 1984 and layoffs were effected thereafter. It further argued that
the P402,988.93 is erroneous. It explained among other things, that its operations had been
suspended and that it was waiting for the resolution on its Petition for Suspension of Payments
by the SEC under SEC Case No. 2423. Despite due notice, the corporation failed to appear at the
hearings. The SSC ordered the investigating team of the SSS to determine if it can still file its
claim for unpaid premium contributions against the corporation under the Petition for Suspension
of Payments.

In the meantime, the Petition for Suspension of Payments was dismissed which was pending
before the SEC in an Order8 dated 12 December 1985. Impact Corporation resumed operations
but only for its winding up and dissolution.9 Due to Impact Corporation’s liability and cash flow
problems, all of its assets, namely, its machineries, equipment, office furniture and fixtures, were
sold to scrap dealers to answer for its arrears in rentals.
On 1 December 1995, the SSS-LCD filed an amended Petition10 in SSC Case No. 10048 wherein
the directors of Impact Corporation were directly impleaded as respondents, namely: Eduardo de
Leon, Ricardo de Leon,11 Pacita Fernandez, Consuelo Villanueva, and petitioner. The amounts
sought to be collected totaled P453,845.78 and P10,856.85 for the periods August 1980 to
December 1984 and August 1981 to July 1984, respectively, and the penalties for late remittance
at the rate of 3% per month from the date the contributions fell due until fully paid pursuant to
Section 22(a) of the Social Security Law,12 as amended, in the amounts of P49,941.67
and P2,474,662.82.

Period Unremitted Penalties Total

Amount (3% Interest Per
Month)
August 1980 to December 1984 P 453,845.78 P49, 941.67 503,787.45
August 1981 to July 1984 P 10,856.85 P2, 474, 662.82 2,485,519.67

Summonses were not served upon Eduardo de Leon, Pacita Fernandez, and Consuelo
Villanueva, their whereabouts unknown. They were all later determined to be deceased. On the
other hand, due to failure to file his responsive pleading, Ricardo de Leon was declared in
default.

Petitioner filed with the SSC a Motion to Dismiss13 on grounds of prescription, lack of cause of
action and cessation of business, but the Motion was denied for lack of merit.14 In her Answer
with Counterclaim15 dated 20 May 1999, petitioner averred that Impact Corporation had ceased
operations in 1980. In her defense, she insisted that she was a mere director without managerial
functions, and she ceased to be such in 1982. Even as a stockholder and director of Impact
Corporation, petitioner contended that she cannot be made personally liable for the corporate
obligations of Impact Corporation since her liability extended only up to the extent of her unpaid
subscription, of which she had none since her subscription was already fully paid. The petitioner
raised the same arguments in her Position Paper. 16

On 23 January 1998, Ricardo de Leon died following the death, too, of Pacita Fernandez died on
7 February 2000. In an Order dated 11 April 2000, the SSC directed the System to check if
Impact Corporation had leviable properties to which the investigating team of respondent SSS
manifested that the Impact Corporation had already been dissolved and its assets disposed of.17

In a Resolution dated 28 May 2003, the Social Security Commission ruled in favor of SSS and
declared petitioner liable to pay the unremitted contributions and penalties, stating the following:

WHEREFORE, premises considered, this Commission finds, and so holds, that

respondents Impact Corporation and/or Immaculada L. Garcia, as director and
responsible officer of the said corporation, is liable to pay the SSS the amounts of
P442,988.93, representing the unpaid SS contributions of their employees for the period
August 1980 to December 1984, not inclusive, and P10,856.85, representing the balance
of the unpaid SS contributions in favor of Donato Campos, Jaime Mascarenas, Bonifacio
Franco and Romeo Fullon for the period August 1980 to December 1984, not inclusive,
as well as the 3% per month penalty imposed thereon for late payment in the amounts
 of P3,194,548.63 and P78,441.33, respectively, computed as of April 30, 2003. This is
without prejudice to the right of the SSS to collect the penalties accruing after April 30,
2003 and to institute other appropriate actions against the respondent corporation and/or
its responsible officers.

Should the respondents pay their liability for unpaid SSS contributions within sixty (60)
days from receipt of a copy of this Resolution, the 3% per month penalty for late payment
thereof shall be deemed condoned pursuant to SSC Res. No. 397-S.97, as amended by
SSC Res. Nos. 112-S.98 and 982-S.99, implementing the provision on condonation of
penalty under Section 30 of R.A. No. 8282.

In the event the respondents fail to pay their liabilities within the aforestated period, let a
writ of execution be issued, pursuant to Section 22 (c) [2] of the SS Law, as amended, for
the satisfaction of their liabilities to the SSS. 18

Petitioner filed a Motion for Reconsideration19 of the afore-quoted Decision but it was denied for
lack of merit in an Order20 dated 4 August 2004, thus:

Nowhere in the questioned Resolution dated May 28, 2003 is it stated that the other
directors of the defunct Impact Corporation are absolved from their contribution and
penalty liabilities to the SSS. It is certainly farthest from the intention of the petitioner
SSS or this Commission to pin the entire liability of Impact Corporation on movant
Immaculada L. Garcia, to the exclusion of the directors of the corporation namely:
Eduardo de Leon, Ricardo de Leon, Pacita Fernandez and Conzuelo Villanueva, who
were all impleaded as parties-respondents in this case.

The case record shows that there was failure of service of summonses upon respondents
Eduardo de Leon, Pacita Fernandez and Conzuelo Villanueva, who are all deceased, for
the reason that their whereabouts are unknown. Moreover, neither the legal heirs nor the
estate of the defaulted respondent Ricardo de Leon were substituted as parties-
respondents in this case when he died on January 23, 1998. Needless to state, the
Commission did not acquire jurisdiction over the persons or estates of the other directors
of Impact Corporation, hence, it could not validly render any pronouncement as to their
liabilities in this case.

Furthermore, the movant cannot raise in a motion for reconsideration the defense that she
was no longer a director of Impact Corporation in 1982, when she was allegedly eased
out by the managing directors of Impact Corporation as purportedly shown in the Deed of
Sale and Assignment of Shares of Stock dated January 22, 1982. This defense was neither
pleaded in her Motion to Dismiss dated January 17, 1996 nor in her Answer with
Counterclaim dated May 18, 1999 and is, thus, deemed waived pursuant to Section 1,
Rule 9 of the 1997 Rules of Civil Procedure, which has suppletory application to the
Revised Rules of Procedure of the Commission.

Finally, this Commission has already ruled in the Order dated April 27, 1999 that since
the original Petition was filed by the SSS on July 3, 1985, and was merely amended on
 December 1, 1995 to implead the responsible officers of Impact Corporation, without
changing its causes of action, the same was instituted well within the 20-year prescriptive
period provided under Section 22 (b) of the SS Law, as amended, considering that the
contribution delinquency assessment covered the period August 1980 to December 1984.

In view thereof, the instant Motion for Reconsideration is hereby denied for lack of merit.

Petitioner elevated her case to the Court of Appeals via a Petition for Review. Respondent SSS
filed its Comment dated 20 January 2005, and petitioner submitted her Reply thereto on 4 April
2005.

The Court of Appeals, applying Section 28(f) of the Social Security Law, 21 again ruled against
petitioner. It dismissed the petitioner’s Petition in a Decision dated 2 June 2005, the dispositive
portion of which reads:

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. The
assailed Resolution dated 28 May 2003 and the Order dated 4 August 2004 of the Social
Security Commission are AFFIRMED in toto.22

Aggrieved, petitioner filed a Motion for Reconsideration of the appellate court’s Decision but her
Motion was denied in a Resolution dated 8 December 2005.

Hence, the instant Petition in which petitioner insists that the Court of Appeals committed grave
error in holding her solely liable for the collected but unremitted SSS premium contributions and
the consequent late penalty payments due thereon. Petitioner anchors her Petition on the
following arguments:

I. SECTION 28(F) OF THE SSS LAW PROVIDES THAT A MANAGING HEAD,

DIRECTOR OR PARTNER IS LIABLE ONLY FOR THE PENALTIES OF THE
EMPLOYER CORPORATION AND NOT FOR UNPAID SSS CONTRIBUTIONS OF
THE EMPLOYER CORPORATION.

II. UNDER THE SSS LAW, IT IS THE MANAGING HEADS, DIRECTORS OR

PARTNERS WHO SHALL BE LIABLE TOGETHER WITH THE CORPORATION.
IN THIS CASE, PETITIONER HAS CEASED TO BE A STOCKHOLDER OF
IMPACT CORPORATION IN 1982. EVEN WHILE SHE WAS A STOCKHOLDER,
SHE NEVER PARTICIPATED IN THE DAILY OPERATIONS OF IMPACT
CORPORATION.

III. UNDER SECTION 31 OF THE CORPORATION CODE, ONLY DIRECTORS,

TRUSTEES OR OFFICERS WHO PARTICIPATE IN UNLAWFUL ACTS OR ARE
GUILTY OF GROSS NEGLIGENCE AND BAD FAITH SHALL BE PERSONALLY
LIABLE. OTHERWISE, BEING A MERE STOCKHOLDER, SHE IS LIABLE ONLY
TO THE EXTENT OF HER SUBSCRIPTION.
 IV. IMPACT CORPORATION SUFFERED IRREVERSIBLE ECONOMIC LOSSES,
EVENTS WHICH WERE NEITHER DESIRED NOR CAUSED BY ANY ACT OF
THE PETITIONER. THUS, BY REASON OF FORTUITOUS EVENTS, THE
PETITIONER SHOULD BE ABSOLVED FROM LIABILITY.

V. RESPONDENT SOCIAL SECURITY SYSTEM FAILED MISERABLY IN

EXERTING EFFORTS TO ACQUIRE JURISDICTION OVER THE LEVIABLE
ASSETS OF IMPACT CORPORATION, PERSON/S AND/OR ESTATE/S OF THE
OTHER DIRECTORS OR OFFICERS OF IMPACT CORPORATION.

VI. THE HONORABLE COMMISSION SERIOUSLY ERRED IN NOT RENDERING

A JUDGMENT BY DEFAULT AGAINST THE DIRECTORS UPON WHOM IT
ACQUIRED JURISDICTION.

Based on the foregoing, petitioner prays that the Decision dated 2 June 2005 and the Resolution
dated 8 December 2005 of the Court of Appeals be reversed and set aside, and a new one be
rendered absolving her of any and all liabilities under the Social Security Law.

In sum, the core issue to be resolved in this case is whether or not petitioner, as the only
surviving director of Impact Corporation, can be made solely liable for the corporate obligations
of Impact Corporation pertaining to unremitted SSS premium contributions and penalties
therefore.

As a covered employer under the Social Security Law, it is the obligation of Impact Corporation
under the provisions of Sections 18, 19 and 22 thereof, as amended, to deduct from its duly
covered employee’s monthly salaries their shares as premium contributions and remit the same
to the SSS, together with the employer’s shares of the contributions to the petitioner, for and in
their behalf.

From all indications, the corporation has already been dissolved. Respondents are now going
after petitioner who is the only surviving director of Impact Corporation.

A cursory review of the alleged grave errors of law committed by the Court of Appeals above
reveals there seems to be no dispute as to the assessed liability of Impact Corporation for the
unremitted SSS premiums of its employees for the period January 1980 to December 1984.

There is also no dispute as to the fact that the employees’ SSS premium contributions have been
deducted from their salaries by Impact Corporation.

Petitioner in assailing the Court of Appeals Decision, distinguishes the penalties from the
unremitted or unpaid SSS premium contributions. She points out that although the appellate
court is of the opinion that the concerned officers of an employer corporation are liable for
the penalties for non-remittance of premiums, it still affirmed the SSC Resolution holding
petitioner liable for the unpaid SSS premium contributions in addition to the penalties.
Petitioner avers that under the aforesaid provision, the liability does not include liability for the
unremitted SSS premium contributions.

Petitioner’s argument is ridiculous. The interpretation petitioner would like us to adopt finds no
support in law or in jurisprudence. While the Court of Appeals Decision provided that Section
28(f) refers to the liabilities pertaining to penalty for the non-remittance of SSS employee
contributions, holding that it is distinct from the amount of the supposed SSS remittances,
petitioner mistakenly concluded that Section 28(f) is applicable only to penalties and not to the
liability of the employer for the unremitted premium contributions. Clearly, a simplistic
interpretation of the law is untenable. It is a rule in statutory construction that every part of the
statute must be interpreted with reference to the context, i.e., that every part of the statute must
be considered together with the other parts, and kept subservient to the general intent of the
whole enactment.23 The liability imposed as contemplated under the foregoing Section 28(f) of
the Social Security Law does not preclude the liability for the unremitted amount. Relevant to
Section 28(f) is Section 22 of the same law.

SEC. 22. Remittance of Contributions. -- (a) The contributions imposed in the preceding
Section shall be remitted to the SSS within the first ten (10) days of each calendar month
following the month for which they are applicable or within such time as the Commission
may prescribe. Every employer required to deduct and to remit such contributions shall
be liable for their payment and if any contribution is not paid to the SSS as herein
prescribed, he shall pay besides the contribution a penalty thereon of three percent (3%)
per month from the date the contribution falls due until paid. If deemed expedient and
advisable by the Commission, the collection and remittance of contributions shall be
made quarterly or semi-annually in advance, the contributions payable by the employees
to be advanced by their respective employers: Provided, That upon separation of an
employee, any contribution so paid in advance but not due shall be credited or refunded
to his employer.

Under Section 22(a), every employer is required to deduct and remit such contributions penalty
refers to the 3% penalty that automatically attaches to the delayed SSS premium contributions.
The spirit, rather than the letter of a law determines construction of a provision of law. It is a
cardinal rule in statutory construction that in interpreting the meaning and scope of a term used
in the law, a careful review of the whole law involved, as well as the intendment of the law, must
be made.24 Nowhere in the provision or in the Decision can it be inferred that the persons liable
are absolved from paying the unremitted premium contributions.

Elementary is the rule that when laws or rules are clear, it is incumbent upon the judge to apply
them regardless of personal belief or predilections - when the law is unambiguous and
unequivocal, application not interpretation thereof is imperative. 25 However, where the language
of a statute is vague and ambiguous, an interpretation thereof is resorted to. An interpretation
thereof is necessary in instances where a literal interpretation would be either impossible or
absurd or would lead to an injustice. A law is deemed ambiguous when it is capable of being
understood by reasonably well-informed persons in either of two or more senses. 26 The fact that
a law admits of different interpretations is the best evidence that it is vague and ambiguous. 27 In
the instant case, petitioner interprets Section 28(f) of the Social Security Law as applicable only
to penalties and not to the liability of the employer for the unremitted premium contributions.
Respondents present a more logical interpretation that is consistent with the provisions as a
whole and with the legislative intent behind the Social Security Law.

This Court cannot be made to accept an interpretation that would defeat the intent of the law and
its legislators.28

Petitioner also challenges the finding of the Court of Appeals that under Section 28(f) of the
Social Security Law, a mere director or officer of an employer corporation, and not necessarily a
"managing" director or officer, can be held liable for the unpaid SSS premium contributions.

Section 28(f) of the Social Security Law provides the following:

(f) If the act or omission penalized by this Act be committed by an association,

partnership, corporation or any other institution, its managing head, directors or partners
shall be liable to the penalties provided in this Act for the offense.

This Court agrees in petitioner’s observation that the SSS did not even deny nor rebut the claim
that petitioner was not the "managing head" of Impact Corporation. However, the Court of
Appeals rightly held that petitioner, as a director of Impact Corporation, is among those officers
covered by Section 28(f) of the Social Security Law.

Petitioner invokes the rule in statutory construction called ejusdem generic; that is, where general
words follow an enumeration of persons or things, by words of a particular and specific meaning,
such general words are not to be construed in their widest extent, but are to be held as applying
only to persons or things of the same kind or class as those specifically mentioned. According to
petitioner, to be held liable under Section 28(f) of the Social Security Law, one must be the
"managing head," "managing director," or "managing partner." This Court though finds no need
to resort to statutory construction. Section 28(f) of the Social Security Law imposes penalty on:

(1) the managing head;

(2) directors; or

(3) partners, for offenses committed by a juridical person

The said provision does not qualify that the director or partner should likewise be a "managing
director" or "managing partner."29 The law is clear and unambiguous.

Petitioner nonetheless raises the defense that under Section 31 of the Corporation Code, only
directors, trustees or officers who participate in unlawful acts or are guilty of gross negligence
and bad faith shall be personally liable, and that being a mere stockholder, she is liable only to
the extent of her subscription.

Section 31 of the Corporation Code, stipulating on the liability of directors, trustees, or officers,
provides:
 SEC. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully
and knowingly vote for or assent to patently unlawful acts of the corporation or who are
guilty of gross negligence or bad faith in directing the affairs of the corporation or
acquire any personal or pecuniary interest in conflict with their duty as such directors, or
trustees shall be liable jointly and severally for all damages resulting therefrom suffered
by the corporation, its stockholders or members and other persons.

Basic is the rule that a corporation is invested by law with a personality separate and distinct
from that of the persons composing it as well as from that of any other legal entity to which it
may be related. A corporation is a juridical entity with legal personality separate and distinct
from those acting for and in its behalf and, in general, from the people comprising it. Following
this, the general rule applied is that obligations incurred by the corporation, acting through its
directors, officers and employees, are its sole liabilities. 30 A director, officer, and employee of a
corporation are generally not held personally liable for obligations incurred by the corporation.

Being a mere fiction of law, however, there are peculiar situations or valid grounds that can exist
to warrant the disregard of its independent being and the lifting of the corporate veil. This
situation might arise when a corporation is used to evade a just and due obligation or to justify a
wrong, to shield or perpetrate fraud, to carry out other similar unjustifiable aims or intentions, or
as a subterfuge to commit injustice and so circumvent the law.31 Thus, Section 31 of the
Corporation Law provides:

Taking a cue from the above provision, a corporate director, a trustee or an officer, may be held
solidarily liable with the corporation in the following instances:

1. When directors and trustees or, in appropriate cases, the officers of

a corporation--

(a) vote for or assent to patently unlawful acts of the corporation;

(b) act in bad faith or with gross negligence in directing the corporate affairs;

(c) are guilty of conflict of interest to the prejudice of the corporation, its
stockholders or members, and other persons.

2. When a director or officer has consented to the issuance of watered stocks or who,
having knowledge thereof, did not forthwith file with the corporate secretary his written
objection thereto.

3. When a director, trustee or officer has contractually agreed or stipulated to hold

himself personally and solidarily liable with the Corporation.

4. When a director, trustee or officer is made, by specific provision of law, personally

liable for his corporate action. 32

The aforesaid provision states:

 SEC. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully
and knowingly vote for or assent to patently unlawful acts of the corporation or who are
guilty of gross negligence or bad faith in directing the affairs of the corporation or
acquire any personal or pecuniary interest in conflict with their duty as such directors, or
trustees shall be liable jointly and severally for all damages resulting therefrom suffered
by the corporation, its stockholders or members and other persons.

The situation of petitioner, as a director of Impact Corporation when said corporation failed to
remit the SSS premium contributions falls exactly under the fourth situation. Section 28(f) of the
Social Security Law imposes a civil liability for any act or omission pertaining to the violation of
the Social Security Law, to wit:

(f) If the act or omission penalized by this Act be committed by an association,

partnership, corporation or any other institution, its managing head, directors or partners
shall be liable to the penalties provided in this Act for the offense.

In fact, criminal actions for violations of the Social Security Law are also provided under the
Revised Penal Code. The Social Security Law provides, in Section 28 thereof, to wit:

(h) Any employer who, after deducting the monthly contributions or loan amortizations
from his employees’ compensation, fails to remit the said deductions to the SSS within
thirty (30) days from the date they became due shall be presumed to have
misappropriated such contributions or loan amortizations and shall suffer the penalties
provided in Article Three hundred fifteen of the Revised Penal Code.

(i) Criminal action arising from a violation of the provisions of this Act may be
commenced by the SSS or the employee concerned either under this Act or in appropriate
cases under the Revised Penal Code: x x x.

Respondents would like this Court to apply another exception to the rule that the persons
comprising a corporation are not personally liable for acts done in the performance of their
duties.

The Court of Appeals in the appealed Decision stated:

Anent the unpaid SSS contributions of Impact Corporation’s employees, the officers of a
corporation are liable in behalf of a corporation, which no longer exists or has ceased
operations. Although as a rule, the officers and members of a corporation are not
personally liable for acts done in performance of their duties, this rule admits of
exception, one of which is when the employer corporation is no longer existing and is
unable to satisfy the judgment in favor of the employee, the officers should be held liable
for acting on behalf of the corporation. Following the foregoing pronouncement,
petitioner, as one of the directors of Impact Corporation, together with the other directors
of the defunct corporation, are liable for the unpaid SSS contributions of their
employees.33
On the other hand, the SSC, in its Resolution, presented this discussion:

Although as a rule, the officers and members of a corporation are not personally liable for
acts done in the performance of their duties, this rule admits of exceptions, one of which
is when the employer corporation is no longer existing and is unable to satisfy the
judgment in favor of the employee, the officers should be held liable for acting on behalf
of the corporation. x x x.34

The rationale cited by respondents in the two preceding paragraphs need not have been applied
because the personal liability for the unremitted SSS premium contributions and the late penalty
thereof attaches to the petitioner as a director of Impact Corporation during the period the
amounts became due and demandable by virtue of a direct provision of law.

Petitioner’s defense that since Impact Corporation suffered irreversible economic losses, and by
reason of fortuitous events, she should be absolved from liability, is also untenable. The evidence
adduced totally belies this claim. A reference to the copy of the Petition for Suspension of
Payments filed by Impact Corporation on 18 March 1983 before the SEC contained an admission
that:

"[I]t has been and still is engaged in business" and "has been and still is engaged in the
business of manufacturing aluminum tube containers" and "in brief, it is an on-going,
viable, and profitable enterprise" which has "sufficient assets" and "actual and potential
income-generation capabilities."

The foregoing document negates petitioner’s assertion and supports the contention that during
the period involved Impact Corporation was still engaged in business and was an ongoing,
viable, profitable enterprise. In fact, the latest SSS form RIA submitted by Impact Corporation is
dated 7 May 1984. The assessed SSS premium contributions and penalty are obligations imposed
upon Impact Corporation by law, and should have been remitted to the SSS within the first 10
days of each calendar month following the month for which they are applicable or within such
time as the SSC prescribes.35

This Court also notes the evident failure on the part of SSS to issue a judgment in default against
Ricardo de Leon, who was the vice-president and officer of the corporation, upon his non-filing
of a responsive pleading after summons was served on him. As can be gleaned from Section 11
of the SSS Revised Rules of Procedure, the Commissioner is mandated to render a decision
either granting or denying the petition. Under the aforesaid provision, if respondent fails to
answer within the time prescribed, the Hearing Commissioner may, upon motion of petitioner,
or motu proprio, declare respondent in default and proceed to receive petitioner’s evidence ex
parte and thereafter recommend to the Commission either the granting or denial of the petition as
the evidence may warrant.36

On a final note, this Court sees it proper to quote verbatim respondents’ prefatory statement in
their Comment:
 The Social Security System is a government agency imbued with a salutary purpose to
carry out the policy of the State to establish, develop, promote and perfect a sound and
viable tax exempt social security system suitable to the needs of the people throughout
the Philippines which shall promote social justice and provide meaningful protection to
members and their beneficiaries against the hazards of disability, sickness, maternity, old-
age, death and other contingencies resulting in loss of income or financial burden.

The soundness and viability of the funds of the SSS in turn depends on the contributions
of its covered employee and employer members, which it invests in order to deliver the
basic social benefits and privileges to its members. The entitlement to and amount of
benefits and privileges of the covered members are contribution-based. Both the
soundness and viability of the funds of the SSS as well as the entitlement and amount of
benefits and privileges of its members are adversely affected to a great extent by the non-
remittance of the much-needed contributions.37

The sympathy of the law on social security is toward its beneficiaries. This Court will not turn a
blind eye on the perpetration of injustice. This Court cannot and will not allow itself to be made
an instrument nor be privy to any attempt at the perpetration of injustice.

Following the doctrine laid down in Laguna Transportation Co., Inc. v. Social Security
System,38 this Court rules that although a corporation once formed is conferred a juridical
personality separate and distinct from the persons comprising it, it is but a legal fiction
introduced for purposes of convenience and to subserve the ends of justice. The concept cannot
be extended to a point beyond its reasons and policy, and when invoked in support of an end
subversive of this policy, will be disregarded by the courts.

WHEREFORE, pursuant to the foregoing, the Decision of the Court of Appeals dated 2 June
2005 in CA-G.R. SP No. 85923 is hereby AFFIRMED WITH FINALITY. Petitioner
Immaculada L. Garcia, as sole surviving director of Impact Corporation is hereby ORDERED to
pay for the collected and unremitted SSS contributions of Impact Corporation. The case
is REMANDED to the SSS for computation of the exact amount and collection thereof.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-30642 April 30, 1985

PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and
NESTOR S. FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S.
FLORESCA, JR., CELSO S. FLORESCA, MELBA S. FLORESCA, JUDITH S.
FLORESCA and CARMEN S. FLORESCA;

LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor
children LINDA, ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez; and
DANIEL MARTINEZ and TOMAS MARTINEZ;

SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor
children JOSE, ESTELA, JULITA SALUD and DANILO, all surnamed OBRA;

LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor
children EDNA, GEORGE and LARRY III, all surnamed VILLAR;

DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her
minor children EDITHA, ELIZABETH, DIVINA, RAYMUNDO, NESTOR and
AURELIO, JR. all surnamed LANUZA;

EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor
children JOSE, LORENZO, JR., MARIA, VENUS and FELIX, all surnamed
ISLA, petitioners,
vs.
PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of
Branch XIII, Court of First Instance of Manila, respondents.

Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

MAKASIAR, J.:
This is a petition to review the order of the former Court of First Instance of Manila, Branch
XIII, dated December 16, 1968 dismissing petitioners' complaint for damages on the ground of
lack of jurisdiction.

Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter
referred to as Philex), who, while working at its copper mines underground operations at Tuba,
Benguet on June 28, 1967, died as a result of the cave-in that buried them in the tunnels of the
mine. Specifically, the complaint alleges that Philex, in violation of government rules and
regulations, negligently and deliberately failed to take the required precautions for the protection
of the lives of its men working underground. Portion of the complaint reads:

xxx xxx xxx

9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with
gross and reckless negligence and imprudence and deliberate failure to take the
required precautions for the due protection of the lives of its men working
underground at the time, and in utter violation of the laws and the rules and
regulations duly promulgated by the Government pursuant thereto, allowed great
amount of water and mud to accumulate in an open pit area at the mine above
Block 43-S-1 which seeped through and saturated the 600 ft. column of broken
ore and rock below it, thereby exerting tremendous pressure on the working
spaces at its 4300 level, with the result that, on the said date, at about 4 o'clock in
the afternoon, with the collapse of all underground supports due to such enormous
pressure, approximately 500,000 cubic feet of broken ores rocks, mud and water,
accompanied by surface boulders, blasted through the tunnels and flowed out and
filled in, in a matter of approximately five (5) minutes, the underground workings,
ripped timber supports and carried off materials, machines and equipment which
blocked all avenues of exit, thereby trapping within its tunnels of all its men
above referred to, including those named in the next preceding paragraph,
represented by the plaintiffs herein;

10. That out of the 48 mine workers who were then working at defendant
PHILEX's mine on the said date, five (5) were able to escape from the terrifying
holocaust; 22 were rescued within the next 7 days; and the rest, 21 in number,
including those referred to in paragraph 7 hereinabove, were left mercilessly to
their fate, notwithstanding the fact that up to then, a great many of them were still
alive, entombed in the tunnels of the mine, but were not rescued due to defendant
PHILEX's decision to abandon rescue operations, in utter disregard of its bounden
legal and moral duties in the premises;

xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and
regulations duly promulgated by the duly constituted authorities as set out by the
Special Committee above referred to, in their Report of investigation, pages 7-13,
Annex 'B' hereof, but also failed completely to provide its men working
 underground the necessary security for the protection of their lives
notwithstanding the fact that it had vast financial resources, it having made,
during the year 1966 alone, a total operating income of P 38,220,254.00, or net
earnings, after taxes of P19,117,394.00, as per its llth Annual Report for the year
ended December 31, 1966, and with aggregate assets totalling P 45,794,103.00 as
of December 31, 1966;

xxx xxx xxx

(pp. 42-44, rec.)

A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of
petitioners based on an industrial accident are covered by the provisions of the Workmen's
Compensation Act (Act 3428, as amended by RA 772) and that the former Court of First
Instance has no jurisdiction over the case. Petitioners filed an opposition dated May 27, 1968 to
the said motion to dismiss claiming that the causes of action are not based on the provisions of
the Workmen's Compensation Act but on the provisions of the Civil Code allowing the award of
actual, moral and exemplary damages, particularly:

Art. 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre- existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this Chapter.

Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-
delict.

(b) Art. 1173—The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and corresponds
with the circumstances of the persons, of the time and of the place. When
negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2
shall apply.

Art. 2201. x x x x x x x x x

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the non-
performance of the obligation.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant

acted with gross negligence.

After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27,
1968 dismissing the case on the ground that it falls within the exclusive jurisdiction of the
Workmen's Compensation Commission. On petitioners' motion for reconsideration of the said
order, respondent Judge, on September 23, 1968, reconsidered and set aside his order of June 27,
1968 and allowed Philex to file an answer to the complaint. Philex moved to reconsider the
aforesaid order which was opposed by petitioners.

On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled
that in accordance with the established jurisprudence, the Workmen's Compensation
Commission has exclusive original jurisdiction over damage or compensation claims for work-
connected deaths or injuries of workmen or employees, irrespective of whether or not the
employer was negligent, adding that if the employer's negligence results in work-connected
deaths or injuries, the employer shall, pursuant to Section 4-A of the Workmen's Compensation
Act, pay additional compensation equal to 50% of the compensation fixed in the Act.

Petitioners thus filed the present petition.

In their brief, petitioners raised the following assignment of errors:

THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS-

PETITIONERS' COMPLAINT FOR LACK OF JURISDICTION.

II

THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR

DISTINCTION BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL
CODE AND CLAIMS FOR COMPENSATION UNDER THE WORKMEN'S
COMPENSATION ACT.

In the first assignment of error, petitioners argue that the lower court has jurisdiction over the
cause of action since the complaint is based on the provisions of the Civil Code on damages,
particularly Articles 2176, 2178, 1173, 2201 and 2231, and not on the provisions of the
Workmen's Compensation Act. They point out that the complaint alleges gross and brazen
negligence on the part of Philex in failing to take the necessary security for the protection of the
lives of its employees working underground. They also assert that since Philex opted to file a
motion to dismiss in the court a quo, the allegations in their complaint including those contained
in the annexes are deemed admitted.

In the second assignment of error, petitioners asseverate that respondent Judge failed to see the
distinction between the claims for compensation under the Workmen's Compensation Act and
the claims for damages based on gross negligence of Philex under the Civil Code. They point out
that workmen's compensation refers to liability for compensation for loss resulting from injury,
disability or death of the working man through industrial accident or disease, without regard to
the fault or negligence of the employer, while the claim for damages under the Civil Code which
petitioners pursued in the regular court, refers to the employer's liability for reckless and wanton
negligence resulting in the death of the employees and for which the regular court has
jurisdiction to adjudicate the same.

On the other hand, Philex asserts that work-connected injuries are compensable exclusively
under the provisions of Sections 5 and 46 of the Workmen's Compensation Act, which read:

SEC. 5. Exclusive right to compensation.—The rights and remedies granted by

this Act to an employee by reason of a personal injury entitling him to
compensation shall exclude all other rights and remedies accruing to the
employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws because of said injury ...

SEC. 46. Jurisdiction.— The Workmen's Compensation Commissioner shall have

exclusive jurisdiction to hear and decide claims for compensation under the
Workmen's Compensation Act, subject to appeal to the Supreme Court, ...

Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that
"all claims of workmen against their employer for damages due to accident suffered in the course
of employment shall be investigated and adjudicated by the Workmen's Compensation
Commission," subject to appeal to the Supreme Court.

Philex maintains that the fact that an employer was negligent, does not remove the case from the
exclusive character of recoveries under the Workmen's Compensation Act; because Section 4-A
of the Act provides an additional compensation in case the employer fails to comply with the
requirements of safety as imposed by law to prevent accidents. In fact, it points out that Philex
voluntarily paid the compensation due the petitioners and all the payments have been accepted in
behalf of the deceased miners, except the heirs of Nazarito Floresca who insisted that they are
entitled to a greater amount of damages under the Civil Code.

In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo
Angara, now President of the University of the Philippines, Justice Manuel Lazaro, as corporate
counsel and Assistant General Manager of the GSIS Legal Affairs Department, and
Commissioner on Elections, formerly UP Law Center Director Froilan Bacungan, appeared
as amici curiae and thereafter, submitted their respective memoranda.

The issue to be resolved as WE stated in the resolution of November 26, 1976, is:

Whether the action of an injured employee or worker or that of his heirs in case of
his death under the Workmen's Compensation Act is exclusive, selective or
cumulative, that is to say, whether his or his heirs' action is exclusively restricted
to seeking the limited compensation provided under the Workmen's
Compensation Act or whether they have a right of selection or choice of action
between availing of the worker's right under the Workmen's Compensation Act
and suing in the regular courts under the Civil Code for higher damages (actual,
moral and/or exemplary) from the employer by virtue of negligence (or fault) of
the employer or of his other employees or whether they may avail cumulatively of
 both actions, i.e., collect the limited compensation under the Workmen's
Compensation Act and sue in addition for damages in the regular courts.

There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured
employee or worker, or the heirs in case of his death, may initiate a complaint to recover
damages (not compensation under the Workmen's Compensation Act) with the regular court on
the basis of negligence of an employer pursuant to the Civil Code provisions. Atty. Angara
believes otherwise. He submits that the remedy of an injured employee for work-connected
injury or accident is exclusive in accordance with Section 5 of the Workmen's Compensation
Act, while Atty. Bacungan's position is that the action is selective. He opines that the heirs of the
employee in case of his death have a right of choice to avail themselves of the benefits provided
under the Workmen's Compensation Act or to sue in the regular court under the Civil Code for
higher damages from the employer by virtue of negligence of the latter. Atty. Bocobo's stand is
the same as that of Atty. Bacungan and adds that once the heirs elect the remedy provided for
under the Act, they are no longer entitled to avail themselves of the remedy provided for under
the Civil Code by filing an action for higher damages in the regular court, and vice versa.

On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to

dismiss on the ground that they have amicably settled their claim with respondent Philex. In the
resolution of September 7, 1978, WE dismissed the petition only insofar as the aforesaid
petitioners are connected, it appearing that there are other petitioners in this case.

WE hold that the former Court of First Instance has jurisdiction to try the case,

It should be underscored that petitioners' complaint is not for compensation based on the
Workmen's Compensation Act but a complaint for damages (actual, exemplary and moral) in the
total amount of eight hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not
invoke the provisions of the Workmen's Compensation Act to entitle them to compensation
thereunder. In fact, no allegation appeared in the complaint that the employees died from
accident arising out of and in the course of their employments. The complaint instead alleges
gross and reckless negligence and deliberate failure on the part of Philex to protect the lives of its
workers as a consequence of which a cave-in occurred resulting in the death of the employees
working underground. Settled is the rule that in ascertaining whether or not the cause of action is
in the nature of workmen's compensation claim or a claim for damages pursuant to the provisions
of the Civil Code, the test is the averments or allegations in the complaint (Belandres vs. Lopez
Sugar Mill, Co., Inc., 97 Phil. 100).

In the present case, there exists between Philex and the deceased employees a contractual
relationship. The alleged gross and reckless negligence and deliberate failure that amount to bad
faith on the part of Philex, constitute a breach of contract for which it may be held liable for
damages. The provisions of the Civil Code on cases of breach of contract when there is fraud or
bad faith, read:

Art. 2232. In contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner.
 Art. 2201. In contracts and quasi-contracts, the damages for which the obligor
who acted in good faith is able shall be those that are the natural and probable
consequences of the breach of the obligation, and which the parties have foreseen
or could have reasonably foreseen at the time the obligation was constituted.

In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the non-
performance of the obligation.

Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as
assessed by the court.

The rationale in awarding compensation under the Workmen's Compensation Act differs from
that in giving damages under the Civil Code. The compensation acts are based on a theory of
compensation distinct from the existing theories of damages, payments under the acts being
made as compensation and not as damages (99 C.J.S. 53). Compensation is given to mitigate the
harshness and insecurity of industrial life for the workman and his family. Hence, an employer is
liable whether negligence exists or not since liability is created by law. Recovery under the Act
is not based on any theory of actionable wrong on the part of the employer (99 C.J.S. 36).

In other words, under the compensation acts, the employer is liable to pay compensation benefits
for loss of income, as long as the death, sickness or injury is work-connected or work-
aggravated, even if the death or injury is not due to the fault of the employer (Murillo vs.
Mendoza, 66 Phil. 689). On the other hand, damages are awarded to one as a vindication of the
wrongful invasion of his rights. It is the indemnity recoverable by a person who has sustained
injury either in his person, property or relative rights, through the act or default of another (25
C.J.S. 452).

The claimant for damages under the Civil Code has the burden of proving the causal relation
between the defendant's negligence and the resulting injury as well as the damages suffered.
While under the Workmen's Compensation Act, there is a presumption in favor of the deceased
or injured employee that the death or injury is work-connected or work-aggravated; and the
employer has the burden to prove otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs.
WCC, 93 SCRA 551; Maria Cristina Fertilizer Corp. vs. WCC, 60 SCRA 228).

The claim of petitioners that the case is not cognizable by the Workmen's Compensation
Commission then, now Employees Compensation Commission, is strengthened by the fact that
unlike in the Civil Code, the Workmen's Compensation Act did not contain any provision for an
award of actual, moral and exemplary damages. What the Act provided was merely the right of
the heirs to claim limited compensation for the death in the amount of six thousand (P6,000.00)
pesos plus burial expenses of two hundred (P200.00) pesos, and medical expenses when incurred
(Sections 8, 12 and 13, Workmen's Compensation Act), and an additional compensation of only
50% if the complaint alleges failure on the part of the employer to "install and maintain safety
appliances or to take other precautions for the prevention of accident or occupational disease"
(Section 4-A, Ibid.). In the case at bar, the amount sought to be recovered is over and above that
which was provided under the Workmen's Compensation Act and which cannot be granted by
the Commission.

Moreover, under the Workmen's Compensation Act, compensation benefits should be paid to an
employee who suffered an accident not due to the facilities or lack of facilities in the industry of
his employer but caused by factors outside the industrial plant of his employer. Under the Civil
Code, the liability of the employer, depends on breach of contract or tort. The Workmen's
Compensation Act was specifically enacted to afford protection to the employees or workmen. It
is a social legislation designed to give relief to the workman who has been the victim of an
accident causing his death or ailment or injury in the pursuit of his employment (Abong vs.
WCC, 54 SCRA 379).

WE now come to the query as to whether or not the injured employee or his heirs in case of
death have a right of selection or choice of action between availing themselves of the worker's
right under the Workmen's Compensation Act and suing in the regular courts under the Civil
Code for higher damages (actual, moral and exemplary) from the employers by virtue of that
negligence or fault of the employers or whether they may avail themselves cumulatively of both
actions, i.e., collect the limited compensation under the Workmen's Compensation Act and sue in
addition for damages in the regular courts.

In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442,
ruled that an injured worker has a choice of either to recover from the employer the fixed
amounts set by the Workmen's Compensation Act or to prosecute an ordinary civil action against
the tortfeasor for higher damages but he cannot pursue both courses of action simultaneously.

In Pacaña WE said:

In the analogous case of Esguerra vs. Munoz Palma, involving the application of
Section 6 of the Workmen's Compensation Act on the injured workers' right to
sue third- party tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes, again
speaking for the Court, pointed out that the injured worker has the choice of
remedies but cannot pursue both courses of action simultaneously and thus
balanced the relative advantage of recourse under the Workmen's Compensation
Act as against an ordinary action.

As applied to this case, petitioner Esguerra cannot maintain his action for
damages against the respondents (defendants below), because he has elected to
seek compensation under the Workmen's Compensation Law, and his claim (case
No. 44549 of the Compensation Commission) was being processed at the time he
filed this action in the Court of First Instance. It is argued for petitioner that as the
damages recoverable under the Civil Code are much more extensive than the
amounts that may be awarded under the Workmen's Compensation Act, they
should not be deemed incompatible. As already indicated, the injured laborer was
initially free to choose either to recover from the employer the fixed amounts set
by the Compensation Law or else, to prosecute an ordinary civil action against the
tortfeasor for higher damages. While perhaps not as profitable, the smaller
 indemnity obtainable by the first course is balanced by the claimant's being
relieved of the burden of proving the causal connection between the defendant's
negligence and the resulting injury, and of having to establish the extent of the
damage suffered; issues that are apt to be troublesome to establish satisfactorily.
Having staked his fortunes on a particular remedy, petitioner is precluded from
pursuing the alternate course, at least until the prior claim is rejected by the
Compensation Commission. Anyway, under the proviso of Section 6 aforequoted,
if the employer Franklin Baker Company recovers, by derivative action against
the alleged tortfeasors, a sum greater than the compensation he may have paid the
herein petitioner, the excess accrues to the latter.

Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-
party tortfeasor, said rule should likewise apply to the employer-tortfeasor.

Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been
dismissed in the resolution of September 7, 1978 in view of the amicable settlement reached by
Philex and the said heirs.

With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May
14, 1968 before the court a quo, that the heirs of the deceased employees, namely Emerito Obra,
Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and
claims for compensation to the Regional Office No. 1 of the then Department of Labor and all of
them have been paid in full as of August 25, 1967, except Saturnino Martinez whose heirs
decided that they be paid in installments (pp. 106-107, rec.). Such allegation was admitted by
herein petitioners in their opposition to the motion to dismiss dated May 27, 1968 (pp. 121-122,
rec.) in the lower court, but they set up the defense that the claims were filed under the
Workmen's Compensation Act before they learned of the official report of the committee created
to investigate the accident which established the criminal negligence and violation of law by
Philex, and which report was forwarded by the Director of Mines to the then Executive Secretary
Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.).

WE hold that although the other petitioners had received the benefits under the Workmen's
Compensation Act, such may not preclude them from bringing an action before the regular court
because they became cognizant of the fact that Philex has been remiss in its contractual
obligations with the deceased miners only after receiving compensation under the Act. Had
petitioners been aware of said violation of government rules and regulations by Philex, and of its
negligence, they would not have sought redress under the Workmen's Compensation
Commission which awarded a lesser amount for compensation. The choice of the first remedy
was based on ignorance or a mistake of fact, which nullifies the choice as it was not an
intelligent choice. The case should therefore be remanded to the lower court for further
proceedings. However, should the petitioners be successful in their bid before the lower court,
the payments made under the Workmen's Compensation Act should be deducted from the
damages that may be decreed in their favor.

B
Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant
case. The Court merely applies and gives effect to the constitutional guarantees of social justice
then secured by Section 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution,
and now by Sections 6, 7, and 9 of Article 11 of the DECLARATION OF PRINCIPLES AND
STATE POLICIES of the 1973 Constitution, as amended, and as implemented by Articles 2176,
2177, 2178, 1173, 2201, 2216, 2231 and 2232 of the New Civil Code of 1950.

To emphasize, the 1935 Constitution declares that:

Sec. 5. The promotion of social justice to insure the well-being and economic
security of all the people should be the concern of the State (Art. II).

Sec. 6. The State shall afford protection to labor, especially to working women,
and minors, and shall regulate the relations between landowner and tenant, and
between labor and capital in industry and in agriculture. The State may provide
for compulsory arbitration (Art. XIV).

The 1973 Constitution likewise commands the State to "promote social justice to insure the
dignity, welfare, and security of all the people "... regulate the use ... and disposition of private
property and equitably diffuse property ownership and profits "establish, maintain and ensure
adequate social services in, the field of education, health, housing, employment, welfare and
social security to guarantee the enjoyment by the people of a decent standard of living" (Sections
6 and 7, Art. II, 1973 Constitution); "... afford protection to labor, ... and regulate the relations
between workers and employers ..., and assure the rights of workers to ... just and humane
conditions of work" (Sec. 9, Art. II, 1973 Constitution, emphasis supplied).

The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article

11 of the 1973 Constitution and re-stated as a declaration of basic policy in Article 3 of the New
Labor Code, thus:

Art. 3. Declaration of basic policy.—The State shall afford protection to labor,

promote full employment, ensure equal work opportunities regardless of sex, race
or creed, and regulate the relations between workers and employers. The State
shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work. (emphasis supplied).

The aforestated constitutional principles as implemented by the aforementioned articles of the

New Civil Code cannot be impliedly repealed by the restrictive provisions of Article 173 of the
New Labor Code. Section 5 of the Workmen's Compensation Act (before it was amended by
R.A. No. 772 on June 20, 1952), predecessor of Article 173 of the New Labor Code, has been
superseded by the aforestated provisions of the New Civil Code, a subsequent law, which took
effect on August 30, 1950, which obey the constitutional mandates of social justice enhancing as
they do the rights of the workers as against their employers. Article 173 of the New Labor Code
seems to diminish the rights of the workers and therefore collides with the social justice
guarantee of the Constitution and the liberal provisions of the New Civil Code.
The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973
Constitution are statements of legal principles to be applied and enforced by the courts. Mr.
Justice Robert Jackson in the case of West Virginia State Board of Education vs. Barnette, with
characteristic eloquence, enunciated:

The very purpose of a Bill of Rights was to withdraw certain subjects from the
vicissitudes of political controversy, to place them beyond the reach of majorities
and officials and to establish them as legal principles to be applied by the courts.
One's right to life, liberty, and property, to free speech, a free press, freedom of
worship and assembly, and other fundamental rights may not be submitted to
vote; they depend on the outcome of no elections (319 U.S. 625, 638, 87 L.ed.
1638, emphasis supplied).

In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the
New Labor Code and the Civil Code direct that the doubts should be resolved in favor of the
workers and employees.

Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as
amended, promulgated on May 1, 1974, but which took effect six months thereafter, provides
that "all doubts in the implementation and interpretation of the provisions of this Code, including
its implementing rules and regulations, shall be resolved in favor of labor" (Art. 2, Labor Code).

Article 10 of the New Civil Code states: "In case of doubt in the interpretation or application of
laws, it is presumed that the law-making body intended right and justice to prevail. "

More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of doubt, all
labor legislation and all labor contracts shall be construed in favor of the safety and decent living
of the laborer."

Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the
Workmen's Compensation Act provided:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this
Act to an employee by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury (emphasis supplied).

Employers contracting laborecsrs in the Philippine Islands for work outside the
same may stipulate with such laborers that the remedies prescribed by this Act
shall apply exclusively to injuries received outside the Islands through accidents
happening in and during the performance of the duties of the employment; and all
service contracts made in the manner prescribed in this section shall be presumed
to include such agreement.
Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428, was
amended by Commonwealth Act No. 772 on June 20, 1952, thus:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this
Act to an employee by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury.

Employers contracting laborers in the Philippine Islands for work outside the
same shall stipulate with such laborers that the remedies prescribed by this Act
shall apply to injuries received outside the Island through accidents happening in
and during the performance of the duties of the employment. Such stipulation
shall not prejudice the right of the laborers to the benefits of the Workmen's
Compensation Law of the place where the accident occurs, should such law be
more favorable to them (As amended by section 5 of Republic Act No. 772).

Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable
provisions of the New Civil Code, because said Article 173 provides:

Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of

the State Insurance Fund under this Title shall be exclusive and in place of all
other liabilities of the employer to the employee, his dependents or anyone
otherwise entitled to receive damages on behalf of the employee or his
dependents. The payment of compensation under this Title shall bar the recovery
of benefits as provided for in Section 699 of the Revised Administrative Code,
Republic Act Numbered Eleven hundred sixty-one, as amended, Commonwealth
Act Numbered One hundred eighty- six, as amended, Commonwealth Act
Numbered Six hundred ten, as amended, Republic Act Numbered Forty-eight
hundred Sixty-four, as amended, and other laws whose benefits are administered
by the System during the period of such payment for the same disability or death,
and conversely (emphasis supplied).

As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the
Revised Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No.
610, as amended, R.A. No. 4864, as amended, and all other laws whose benefits are administered
by the System (referring to the GSIS or SSS).

Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the New
Labor Code does not even remotely, much less expressly, repeal the New Civil Code provisions
heretofore quoted.

It is patent, therefore, that recovery under the New Civil Code for damages arising from
negligence, is not barred by Article 173 of the New Labor Code. And the damages recoverable
under the New Civil Code are not administered by the System provided for by the New Labor
Code, which defines the "System" as referring to the Government Service Insurance System or
the Social Security System (Art. 167 [c], [d] and [e] of the New Labor Code).

Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part
of the law of the land.

Article 8 of the New Civil Code provides:

Art. 8. Judicial decisions applying or interpreting the laws or the Constitution

shall form a part of the legal system of the Philippines.

The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:

Article 8 of the Civil Code of the Philippines decrees that judicial decisions
applying or interpreting the laws or the Constitution form part of this jurisdiction's
legal system. These decisions, although in themselves not laws, constitute
evidence of what the laws mean. The application or interpretation placed by the
Court upon a law is part of the law as of the date of the enactment of the said law
since the Court's application or interpretation merely establishes the
contemporaneous legislative intent that the construed law purports to carry into
effect" (65 SCRA 270, 272-273 [1975]).

WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute
itself (Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).

The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before and after it
was amended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in
favor of the deceased, ailing or injured employee to the compensation provided for therein. Said
Section 5 was not accorded controlling application by the Supreme Court in the 1970 case of
Pacana vs. Cebu Autobus Company (32 SCRA 442) when WE ruled that an injured worker has a
choice of either to recover from the employer the fixed amount set by the Workmen's
Compensation Act or to prosecute an ordinary civil action against the tortfeasor for greater
damages; but he cannot pursue both courses of action simultaneously. Said Pacana case penned
by Mr. Justice Teehankee, applied Article 1711 of the Civil Code as against the Workmen's
Compensation Act, reiterating the 1969 ruling in the case of Valencia vs. Manila Yacht Club (28
SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz Palma (104 Phil. 582), both
penned by Justice J.B.L. Reyes. Said Pacana case was concurred in by Justices J.B.L. Reyes,
Dizon, Makalintal, Zaldivar, Castro, Fernando and Villamor.

Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the
first paragraph of Section 5 of the Workmen's Compensation Act, as amended, and does not even
refer, neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen's
Compensation Act did, with greater reason said Article 173 must be subject to the same
interpretation adopted in the cases of Pacana, Valencia and Esguerra aforementioned as the
doctrine in the aforesaid three (3) cases is faithful to and advances the social justice guarantees
enshrined in both the 1935 and 1973 Constitutions.
It should be stressed likewise that there is no similar provision on social justice in the American
Federal Constitution, nor in the various state constitutions of the American Union. Consequently,
the restrictive nature of the American decisions on the Workmen's Compensation Act cannot
limit the range and compass of OUR interpretation of our own laws, especially Article 1711 of
the New Civil Code, vis-a-vis Article 173 of the New Labor Code, in relation to Section 5 of
Article II and Section 6 of Article XIV of the 1935 Constitution then, and now Sections 6, 7 and
9 of the Declaration of Principles and State Policies of Article II of the 1973 Constitution.

The dissent seems to subordinate the life of the laborer to the property rights of the employer.
The right to life is guaranteed specifically by the due process clause of the Constitution. To
relieve the employer from liability for the death of his workers arising from his gross or wanton
fault or failure to provide safety devices for the protection of his employees or workers against
the dangers which are inherent in underground mining, is to deprive the deceased worker and his
heirs of the right to recover indemnity for the loss of the life of the worker and the consequent
loss to his family without due process of law. The dissent in effect condones and therefore
encourages such gross or wanton neglect on the part of the employer to comply with his legal
obligation to provide safety measures for the protection of the life, limb and health of his worker.
Even from the moral viewpoint alone, such attitude is un-Christian.

It is therefore patent that giving effect to the social justice guarantees of the Constitution, as
implemented by the provisions of the New Civil Code, is not an exercise of the power of law-
making, but is rendering obedience to the mandates of the fundamental law and the
implementing legislation aforementioned.

The Court, to repeat, is not legislating in the instant case.

It is axiomatic that no ordinary statute can override a constitutional provision.

The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New
Labor Code subvert the rights of the petitioners as surviving heirs of the deceased mining
employees. Section 5 of the Workmen's Compensation Act and Article 173 of the New Labor
Code are retrogressive; because they are a throwback to the obsolete laissez-faire doctrine of
Adam Smith enunciated in 1776 in his treatise Wealth of Nations (Collier's Encyclopedia, Vol.
21, p. 93, 1964), which has been discarded soon after the close of the 18th century due to the
Industrial Revolution that generated the machines and other mechanical devices (beginning with
Eli Whitney's cotton gin of 1793 and Robert Fulton's steamboat of 1807) for production and
transportation which are dangerous to life, limb and health. The old socio-political-economic
philosophy of live-and-let-live is now superdesed by the benign Christian shibboleth of live-and-
help others to live. Those who profess to be Christians should not adhere to Cain's selfish
affirmation that he is not his brother's keeper. In this our civilization, each one of us is our
brother's keeper. No man is an island. To assert otherwise is to be as atavistic and ante-deluvian
as the 1837 case of Prisley vs. Fowler (3 MN 1,150 reprint 1030) invoked by the dissent, The
Prisley case was decided in 1837 during the era of economic royalists and robber barons of
America. Only ruthless, unfeeling capitalistics and egoistic reactionaries continue to pay
obeisance to such un-Christian doctrine. The Prisley rule humiliates man and debases him;
because the decision derisively refers to the lowly worker as "servant" and utilizes with
aristocratic arrogance "master" for "employer." It robs man of his inherent dignity and
dehumanizes him. To stress this affront to human dignity, WE only have to restate the quotation
from Prisley, thus: "The mere relation of the master and the servant never can imply an
obligation on the part of the master to take more care of the servant than he may reasonably be
expected to do himself." This is the very selfish doctrine that provoked the American Civil War
which generated so much hatred and drew so much precious blood on American plains and
valleys from 1861 to 1864.

"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the law
insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law
killeth; its spirit giveth life."

It is curious that the dissenting opinion clings to the myth that the courts cannot legislate.

That myth had been exploded by Article 9 of the New Civil Code, which provides that "No judge
or court shall decline to render judgment by reason of the silence, obscurity or insufficiency of
the laws. "

Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in
certain instances, the court, in the language of Justice Holmes, "do and must legislate" to fill in
the gaps in the law; because the mind of the legislator, like all human beings, is finite and
therefore cannot envisage all possible cases to which the law may apply Nor has the human mind
the infinite capacity to anticipate all situations.

But about two centuries before Article 9 of the New Civil Code, the founding fathers of the
American Constitution foresaw and recognized the eventuality that the courts may have to
legislate to supply the omissions or to clarify the ambiguities in the American Constitution and
the statutes.

'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but
denies that the power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The
Federalist, Modern Library, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede
that the court is even independent of the Nation itself (A.F.L. vs. American Sash Company, 1949
335 US 538).

Many of the great expounders of the American Constitution likewise share the same view. Chief
Justice Marshall pronounced: "It is emphatically the province and duty of the Judicial department
to say what the law is (Marbury vs. Madison I Cranch 127 1803), which was re-stated by Chief
Justice Hughes when he said that "the Constitution is what the judge says it is (Address on May
3, 1907, quoted by President Franklin Delano Roosevelt on March 9, 1937). This was reiterated
by Justice Cardozo who pronounced that "No doubt the limits for the judge are narrower. He
legislates only between gaps. He fills the open spaces in the law. " (The Nature of the Judicial
Process, p. 113). In the language of Chief Justice Harlan F. Stone, "The only limit to the judicial
legislation is the restraint of the judge" (U.S. vs. Butler 297 U.S. 1 Dissenting Opinion, p. 79),
which view is also entertained by Justice Frankfurter and Justice Robert Jackson. In the rhetoric
of Justice Frankfurter, "the courts breathe life, feeble or strong, into the inert pages of the
Constitution and all statute books."

It should be stressed that the liability of the employer under Section 5 of the Workmen's
Compensation Act or Article 173 of the New Labor Code is limited to death, ailment or injury
caused by the nature of the work, without any fault on the part of the employers. It is correctly
termed no fault liability. Section 5 of the Workmen's Compensation Act, as amended, or Article
173 of the New Labor Code, does not cover the tortious liability of the employer occasioned by
his fault or culpable negligence in failing to provide the safety devices required by the law for
the protection of the life, limb and health of the workers. Under either Section 5 or Article 173,
the employer remains liable to pay compensation benefits to the employee whose death, ailment
or injury is work-connected, even if the employer has faithfully and diligently furnished all the
safety measures and contrivances decreed by the law to protect the employee.

The written word is no longer the "sovereign talisman." In the epigrammatic language of Mr.
Justice Cardozo, "the law has outgrown its primitive stage of formalism when the precise word
was the sovereign talisman, and every slip was fatal" (Wood vs. Duff Gordon 222 NW 88;
Cardozo, The Nature of the Judicial Process 100). Justice Cardozo warned that: "Sometimes the
conservatism of judges has threatened for an interval to rob the legislation of its efficacy. ...
Precedents established in those items exert an unhappy influence even now" (citing Pound,
Common Law and Legislation 21 Harvard Law Review 383, 387).

Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although
with a cautionary undertone: "that judges do and must legislate, but they can do so only
interstitially they are confined from molar to molecular motions" (Southern Pacific Company vs.
Jensen, 244 US 204 1917). And in the subsequent case of Springer vs. Government (277 US 188,
210-212, 72 L.ed. 845, 852- 853), Justice Holmes pronounced:

The great ordinances of the Constitution do not establish and divide fields of
black and white. Even the more specific of them are found to terminate in a
penumbra shading gradually from one extreme to the other. x x x. When we come
to the fundamental distinctions it is still more obvious that they must be received
with a certain latitude or our government could not go on.

To make a rule of conduct applicable to an individual who but for such action
would be free from it is to legislate yet it is what the judges do whenever they
determine which of two competing principles of policy shall prevail.

xxx xxx xxx

It does not seem to need argument to show that however we may disguise it by
veiling words we do not and cannot carry out the distinction between legislative
and executive action with mathematical precision and divide the branches into
waterlight compartments, were it ever so desirable to do so, which I am far from
believing that it is, or that the Constitution requires.
True, there are jurists and legal writers who affirm that judges should not legislate, but
grudgingly concede that in certain cases judges do legislate. They criticize the assumption by the
courts of such law-making power as dangerous for it may degenerate into Judicial tyranny. They
include Blackstone, Jeremy Bentham, Justice Black, Justice Harlan, Justice Roberts, Justice
David Brewer, Ronald Dworkin, Rolf Sartorious, Macklin Fleming and Beryl Harold Levy. But
said Justices, jurists or legal commentators, who either deny the power of the courts to legislate
in-between gaps of the law, or decry the exercise of such power, have not pointed to examples of
the exercise by the courts of such law-making authority in the interpretation and application of
the laws in specific cases that gave rise to judicial tyranny or oppression or that such judicial
legislation has not protected public interest or individual welfare, particularly the lowly workers
or the underprivileged.

On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory
enactments expanding the scope of such provisions to protect human rights. Foremost among
them is the doctrine in the cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs.
Wainright (372 US 335), Escubedo vs. Illinois (378 US 478), which guaranteed the accused
under custodial investigation his rights to remain silent and to counsel and to be informed of such
rights as even as it protects him against the use of force or intimidation to extort confession from
him. These rights are not found in the American Bill of Rights. These rights are now
institutionalized in Section 20, Article IV of the 1973 Constitution. Only the peace-and-order
adherents were critical of the activism of the American Supreme Court led by Chief Justice Earl
Warren.

Even the definition of Identical offenses for purposes of the double jeopardy provision was
developed by American judicial decisions, not by amendment to the Bill of Rights on double
jeopardy (see Justice Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And these judicial
decisions have been re-stated in Section 7 of Rule 117 of the 1985 Rules on Criminal Procedure,
as well as in Section 9 of Rule 117 of the 1964 Revised Rules of Court. In both provisions, the
second offense is the same as the first offense if the second offense is an attempt to commit the
first or frustration thereof or necessarily includes or is necessarily included in the first offense.

The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also
developed by judicial decisions in the United States and in the Philippines even before people vs.
Ylagan (58 Phil. 851-853).

Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US
537) as securing to the Negroes equal but separate facilities, which doctrine was revoked in the
case of Brown vs. Maryland Board of Education (349 US 294), holding that the equal protection
clause means that the Negroes are entitled to attend the same schools attended by the whites-
equal facilities in the same school-which was extended to public parks and public buses.

De-segregation, not segregation, is now the governing principle.

Among other examples, the due process clause was interpreted in the case of People vs. Pomar
(46 Phil. 440) by a conservative, capitalistic court to invalidate a law granting maternity leave to
working women-according primacy to property rights over human rights. The case of People vs.
Pomar is no longer the rule.

As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949),
Justice Holmes had been railing against the conservatism of Judges perverting the guarantee of
due process to protect property rights as against human rights or social justice for the working
man. The law fixing maximum hours of labor was invalidated. Justice Holmes was vindicated
finally in 1936 in the case of West Coast Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where
the American Supreme Court upheld the rights of workers to social justice in the form of
guaranteed minimum wage for women and minors, working hours not exceeding eight (8) daily,
and maternity leave for women employees.

The power of judicial review and the principle of separation of powers as well as the rule on
political questions have been evolved and grafted into the American Constitution by judicial
decisions (Marbury vs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385;
Springer vs. Government, 277 US 210-212, 72 L. ed. 852, 853).

It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a
separate concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of
political question as beyond the ambit of judicial review. There is nothing in both the American
and Philippine Constitutions expressly providing that the power of the courts is limited by the
principle of separation of powers and the doctrine on political questions. There are numerous
cases in Philippine jurisprudence applying the doctrines of separation of powers and political
questions and invoking American precedents.

Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly
vest in the Supreme Court the power to review the validity or constitutionality of any legislative
enactment or executive act.

WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED

AND SET ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER
PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES BE DECREED IN
FAVOR OF HEREIN PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM
PURSUANT TO THE WORKMEN'S COMPENSATION ACT SHALL BE DEDUCTED. NO
COSTS.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-43760 August 21, 1976

PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), petitioner

vs.
BUREAU OF LABOR RELATIONS, HONORABLE CARMELO C. NORIEL,
NATIONAL FEDERATION OF FREE LABOR UNIONS (NAFLU), and PHILIPPINE
BLOOMING MILLS CO., INC., respondents.

Guevara, Pineda, Guevara & Castillon for petitioner.

Olalia Dimapilis & Associates for respondent Union (NAFLU)

Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V. Diaz for respondent Bureau
of Labor Relations, etc., et al.

FERNANDO, Acting C.J.:

A certification by respondent Director of Labor Relations, Carmelo C. Noriel, that respondent

National Federation of Free Labor Unions (NAFLU) as the exclusive bargaining agent of all the
employees in the Philippine Blooming Mills, Company, Inc. disregarding the objection raised by
petitioner, the Philippine Association of Free Labor Unions (PAFLU), is assailed in this
certiorari proceeding. Admittedly, in the certification election held on February 27, 1976,
respondent Union obtained 429 votes as against 414 of petitioner Union. Again, admittedly,
under the Rules and Regulations implementing the present Labor Code, a majority of the valid
votes cast suffices for certification of the victorious labor union as the sole and exclusive
bargaining agent.1 There were four votes cast by employees who did not want any union. 2 On
its face therefore, respondent Union ought to have been certified in accordance with the above
applicable rule. Petitioner, undeterred, would seize upon the doctrine announced in the case
of Allied Workers Association of the Philippines v. Court of Industrial Relations3 that spoiled
ballots should be counted in determining the valid votes cast. Considering there were seventeen
spoiled ballots, it is the submission that there was a grave abuse of discretion on the part of
respondent Director. Implicit in the comment of respondent Director of Labor Relations,
4 considered as an answer, is the controlling weight to be accorded the implementing rule above-
cited, no inconsistency being shown between such rule and the present Labor Code. Under such
a view, the ruling in the Allied Workers Association case that arose during the period when it
was the Industrial Peace Act 5, that was in effect and not the present law, no longer possesses
relevance. It cannot and should not be applied. It is not controlling. There was no abuse of
discretion then, much less a grave one.

This Court is in agreement. The law is on the side of respondent Director, not to mention the
decisive fact appearing in the Petition itself that at most, only ten of the spoiled ballots "were
intended for the petitioner Union,"6 thus rendering clear that it would on its own showing obtain
only 424 votes as against 429 for respondent Union. certiorari does not lie.

1. What is of the essence of the certification process, as noted in Lakas Ng Manggagawang

Pilipino v. Benguet Consolidated, Inc.7 "is that every labor organization be given the opportunity
in a free and honest election to make good its claim that it should be the exclusive collective
bargaining representative."8 Petitioner cannot complain. It was given that opportunity. It lost in a
fair election. It came out second best. The implementing rule favors, as it should, respondent
Union, It obtained a majority of the valid votes cast. So our law Prescribes. It is equally the case
in the United States as this excerpt from the work of Cox and Bok makes clear: "It is a well-
settled rule that a representative will he certified even though less than a majority of all the
employees in the unit cast ballots in favor of the union. It is enough that the union be designated
by a majority of the valid ballots, and this is so even though only a small proportion of the
eligible voters participates. Following the analogy of political elections, the courts have approved
this practice of the Board."9

2. There is this policy consideration. The country is at present embarked on a wide-scale

industrialization project. As a matter of fact, respondent firm is engaged in such activity.
Industrialization, as noted by Professor Smith, Merrifield and Rothschild, "can thrive only as
there is developed a. stable structure of law and order in the productive sector."10 That objective
is best attained in a collective bargaining regime, which is a manifestation of industrial
democracy at work, if there be no undue obstacles placed in the way of the choice of a
bargaining representative. To insist on the absolute majority where there are various unions and
where the possibility of invalid ballots may not be ruled out, would be to frustrate that goal. For
the probability of a long drawn-out, protracted process is not easy to dismiss. That is not unlikely
given the intensity of rivalry among unions capable of enlisting the allegiance of a group of
workers. It is to avoid such a contingency that there is this explicit pronouncement in the
implementing rule. It speaks categorically. It must be obeyed. That was what respondent Director
did.

3. Nor can fault of a grave and serious character be imputed to respondent Director presumably
because of failure to abide by the doctrine or pronouncement of this Court in the aforesaid Allied
Workers Association case. The reliance is on this excerpt from the opinion: "However, spoiled
ballots, i.e., those which are defaced, torn or marked (Rules for Certification Elections, Rule II,
sec. 2[j]) should be counted in determining the majority since they are nevertheless votes cast by
those who are qualified to do so." 11 Nothing can be clearer than that its basis is a paragraph in a
section of the then applicable rules for certification elections. 12 They were promulgated under
the authority of the then prevailing Industrial Peace Act. 13 That Legislation is no longer in force,
having been superseded by the present Labor Code which took effect on November 1, 1974. This
certification election is governed therefore, as was made clear, by the present Labor Code and
the Rules issued thereunder. Absent a showing that such rules and regulations -are violative of
the Code, this Court cannot ignore their existence. When, as should be the case, a public official
acts in accordance with a norm therein contained, no infraction of the law is committed.
Respondent Director did, as he ought to, comply with its terms. He took into consideration only
the "valid votes" as was required by the Rules. He had no choice as long as they remain in force.
In a proper showing, the judiciary can nullify any rule it found in conflict with the governing
statute. 14 That was not even attempted here. All that petitioner did was to set forth in two
separate paragraphs the applicable rule followed by respondent Director 15 and the governing
article. 16 It did not even bother to discuss why such rule was in conflict with the present Labor
Code. It failed to point out any repugnancy. Such being the case, respondent Director must be
upheld.

4. The conclusion reached by us derives further support from the deservedly high repute attached
to the construction placed by the executive officials entrusted with the responsibility of applying
a statute. The Rules and Regulations implementing the present Labor Code were issued by
Secretary Blas Ople of the Department of Labor and took effect on February 3, 1975, the present
Labor Code having been made known to the public as far back as May 1, 1974, although its date
of effectivity was postponed to November 1, 1974, although its date of effectivity was postponed
to November 1, 1974. It would appear then that there was more than enough time for a really
serious and careful study of such suppletory rules and regulations to avoid any inconsistency
with the Code. This Court certainly cannot ignore the interpretation thereafter embodied in the
Rules. As far back as In re Allen," 17 a 1903 decision, Justice McDonough, as ponente, cited this
excerpt from the leading American case of Pennoyer v. McConnaughy, decided in 1891: "The
principle that the contemporaneous construction of a statute by the executive officers of the
government, whose duty it is to execute it, is entitled to great respect, and should ordinarily
control the construction of the statute by the courts, is so firmly embedded in our jurisprudence
that no authorities need be cited to support it." 18 There was a paraphrase by Justice Malcolm of
such a pronouncement in Molina v. Rafferty," 19 a 1918 decision: "Courts will and should respect
the contemporaneous construction placed upon a statute by the executive officers whose duty it
is to enforce it, and unless such interpretation is clearly erroneous will ordinarily be controlled
thereby." 20 Since then, such a doctrine has been reiterated in numerous decisions . 21 As was
emphasized by Chief Justice Castro, "the construction placed by the office charged with
implementing and enforcing the provisions of a Code should he given controlling weight. " 22

WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner Philippine
Association of Free Labor Unions (PAFLU).
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 179579 February 1, 2012

COMMISSIONER OF CUSTOMS and the DISTRICT COLLECTOR OF THE PORT OF

SUBIC, Petitioners,
vs.
HYPERMIX FEEDS CORPORATION, Respondent.

DECISION

SERENO, J.:

Before us is a Petition for Review under Rule 45,1 assailing the Decision2 and the Resolution3 of
the Court of Appeals (CA), which nullified the Customs Memorandum Order (CMO) No. 27-
20034 on the tariff classification of wheat issued by petitioner Commissioner of Customs.

The antecedent facts are as follows:

On 7 November 2003, petitioner Commissioner of Customs issued CMO 27-2003. Under the
Memorandum, for tariff purposes, wheat was classified according to the following: (1) importer
or consignee; (2) country of origin; and (3) port of discharge. 5 The regulation provided an
exclusive list of corporations, ports of discharge, commodity descriptions and countries of origin.
Depending on these factors, wheat would be classified either as food grade or feed grade. The
corresponding tariff for food grade wheat was 3%, for feed grade, 7%.

CMO 27-2003 further provided for the proper procedure for protest or Valuation and
Classification Review Committee (VCRC) cases. Under this procedure, the release of the articles
that were the subject of protest required the importer to post a cash bond to cover the tariff
differential.6

A month after the issuance of CMO 27-2003, on 19 December 2003, respondent filed a Petition
for Declaratory Relief7 with the Regional Trial Court (RTC) of Las Piñas City. It anticipated the
implementation of the regulation on its imported and perishable Chinese milling wheat in transit
from China.8 Respondent contended that CMO 27-2003 was issued without following the
mandate of the Revised Administrative Code on public participation, prior notice, and
publication or registration with the University of the Philippines Law Center.

Respondent also alleged that the regulation summarily adjudged it to be a feed grade supplier
without the benefit of prior assessment and examination; thus, despite having imported food
grade wheat, it would be subjected to the 7% tariff upon the arrival of the shipment, forcing them
to pay 133% more than was proper.

Furthermore, respondent claimed that the equal protection clause of the Constitution was
violated when the regulation treated non-flour millers differently from flour millers for no reason
at all.

Lastly, respondent asserted that the retroactive application of the regulation was confiscatory in
nature.

On 19 January 2004, the RTC issued a Temporary Restraining Order (TRO) effective for twenty
(20) days from notice.9

Petitioners thereafter filed a Motion to Dismiss. 10 They alleged that: (1) the RTC did not have
jurisdiction over the subject matter of the case, because respondent was asking for a judicial
determination of the classification of wheat; (2) an action for declaratory relief was improper; (3)
CMO 27-2003 was an internal administrative rule and not legislative in nature; and (4) the
claims of respondent were speculative and premature, because the Bureau of Customs (BOC)
had yet to examine respondent’s products. They likewise opposed the application for a writ of
preliminary injunction on the ground that they had not inflicted any injury through the issuance
of the regulation; and that the action would be contrary to the rule that administrative issuances
are assumed valid until declared otherwise.

On 28 February 2005, the parties agreed that the matters raised in the application for preliminary
injunction and the Motion to Dismiss would just be resolved together in the main case. Thus, on
10 March 2005, the RTC rendered its Decision11 without having to resolve the application for
preliminary injunction and the Motion to Dismiss.

The trial court ruled in favor of respondent, to wit:

WHEREFORE, in view of the foregoing, the Petition is GRANTED and the subject Customs
Memorandum Order 27-2003 is declared INVALID and OF NO FORCE AND EFFECT.
Respondents Commissioner of Customs, the District Collector of Subic or anyone acting in their
behalf are to immediately cease and desist from enforcing the said Customs Memorandum Order
27-2003.

SO ORDERED.12

The RTC held that it had jurisdiction over the subject matter, given that the issue raised by
respondent concerned the quasi-legislative powers of petitioners. It likewise stated that a petition
for declaratory relief was the proper remedy, and that respondent was the proper party to file it.
The court considered that respondent was a regular importer, and that the latter would be
subjected to the application of the regulation in future transactions.

With regard to the validity of the regulation, the trial court found that petitioners had not
followed the basic requirements of hearing and publication in the issuance of CMO 27-2003. It
likewise held that petitioners had "substituted the quasi-judicial determination of the commodity
by a quasi-legislative predetermination."13 The lower court pointed out that a classification based
on importers and ports of discharge were violative of the due process rights of respondent.

Dissatisfied with the Decision of the lower court, petitioners appealed to the CA, raising the
same allegations in defense of CMO 27-2003.14 The appellate court, however, dismissed the
appeal. It held that, since the regulation affected substantial rights of petitioners and other
importers, petitioners should have observed the requirements of notice, hearing and publication.

Hence, this Petition.

Petitioners raise the following issues for the consideration of this Court:

I. THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE WHICH IS

NOT IN ACCORD WITH THE LAW AND PREVAILING JURISPRUDENCE.

II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT THE

TRIAL COURT HAS JURISDICTION OVER THE CASE.

The Petition has no merit.

We shall first discuss the propriety of an action for declaratory relief.

Rule 63, Section 1 provides:

Who may file petition. – Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or
any other governmental regulation may, before breach or violation thereof, bring an action in the
appropriate Regional Trial Court to determine any question of construction or validity arising,
and for a declaration of his rights or duties, thereunder.

The requirements of an action for declaratory relief are as follows: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the
party seeking declaratory relief must have a legal interest in the controversy; and (4) the issue
involved must be ripe for judicial determination. 15 We find that the Petition filed by respondent
before the lower court meets these requirements.

First, the subject of the controversy is the constitutionality of CMO 27-2003 issued by petitioner
Commissioner of Customs. In Smart Communications v. NTC,16 we held:

The determination of whether a specific rule or set of rules issued by an administrative agency
contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the
Constitution vests the power of judicial review or the power to declare a law, treaty, international
or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the
courts, including the regional trial courts. This is within the scope of judicial power, which
includes the authority of the courts to determine in an appropriate action the validity of the acts
of the political departments. Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis
supplied)

Meanwhile, in Misamis Oriental Association of Coco Traders, Inc. v. Department of Finance

Secretary,17 we said:

xxx [A] legislative rule is in the nature of subordinate legislation, designed to implement a
primary legislation by providing the details thereof. xxx

In addition such rule must be published. On the other hand, interpretative rules are designed to
provide guidelines to the law which the administrative agency is in charge of enforcing.

Accordingly, in considering a legislative rule a court is free to make three inquiries: (i) whether
the rule is within the delegated authority of the administrative agency; (ii) whether it is
reasonable; and (iii) whether it was issued pursuant to proper procedure. But the court is not free
to substitute its judgment as to the desirability or wisdom of the rule for the legislative body, by
its delegation of administrative judgment, has committed those questions to administrative
judgments and not to judicial judgments. In the case of an interpretative rule, the inquiry is not
into the validity but into the correctness or propriety of the rule. As a matter of power a court,
when confronted with an interpretative rule, is free to (i) give the force of law to the rule; (ii) go
to the opposite extreme and substitute its judgment; or (iii) give some intermediate degree of
authoritative weight to the interpretative rule. (Emphasis supplied)

Second, the controversy is between two parties that have adverse interests. Petitioners are
summarily imposing a tariff rate that respondent is refusing to pay.

Third, it is clear that respondent has a legal and substantive interest in the implementation of
CMO 27-2003. Respondent has adequately shown that, as a regular importer of wheat, on 14
August 2003, it has actually made shipments of wheat from China to Subic. The shipment was
set to arrive in December 2003. Upon its arrival, it would be subjected to the conditions of CMO
27-2003. The regulation calls for the imposition of different tariff rates, depending on the factors
enumerated therein. Thus, respondent alleged that it would be made to pay the 7% tariff applied
to feed grade wheat, instead of the 3% tariff on food grade wheat. In addition, respondent would
have to go through the procedure under CMO 27-2003, which would undoubtedly toll its time
and resources. The lower court correctly pointed out as follows:

xxx As noted above, the fact that petitioner is precisely into the business of importing wheat,
each and every importation will be subjected to constant disputes which will result into (sic)
delays in the delivery, setting aside of funds as cash bond required in the CMO as well as the
resulting expenses thereof. It is easy to see that business uncertainty will be a constant
occurrence for petitioner. That the sums involved are not minimal is shown by the discussions
during the hearings conducted as well as in the pleadings filed. It may be that the petitioner can
later on get a refund but such has been foreclosed because the Collector of Customs and the
Commissioner of Customs are bound by their own CMO. Petitioner cannot get its refund with
the said agency. We believe and so find that Petitioner has presented such a stake in the outcome
of this controversy as to vest it with standing to file this petition.18 (Emphasis supplied)

Finally, the issue raised by respondent is ripe for judicial determination, because litigation is
inevitable19 for the simple and uncontroverted reason that respondent is not included in the
enumeration of flour millers classified as food grade wheat importers. Thus, as the trial court
stated, it would have to file a protest case each time it imports food grade wheat and be subjected
to the 7% tariff.

It is therefore clear that a petition for declaratory relief is the right remedy given the
circumstances of the case.

Considering that the questioned regulation would affect the substantive rights of respondent as
explained above, it therefore follows that petitioners should have applied the pertinent provisions
of Book VII, Chapter 2 of the Revised Administrative Code, to wit:

Section 3. Filing. – (1) Every agency shall file with the University of the Philippines Law Center
three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of
this Code which are not filed within three (3) months from that date shall not thereafter be the
bases of any sanction against any party of persons.

xxx xxx xxx

Section 9. Public Participation. - (1) If not otherwise required by law, an agency shall, as far as
practicable, publish or circulate notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates
shall have been published in a newspaper of general circulation at least two (2) weeks
before the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

When an administrative rule is merely interpretative in nature, its applicability needs nothing
further than its bare issuance, for it gives no real consequence more than what the law itself has
already prescribed. When, on the other hand, the administrative rule goes beyond merely
providing for the means that can facilitate or render least cumbersome the implementation of the
law but substantially increases the burden of those governed, it behooves the agency to accord at
least to those directly affected a chance to be heard, and thereafter to be duly informed, before
that new issuance is given the force and effect of law. 20

Likewise, in Tañada v. Tuvera,21 we held:

The clear object of the above-quoted provision is to give the general public adequate notice of
the various laws which are to regulate their actions and conduct as citizens. Without such notice
and publication, there would be no basis for the application of the maxim "ignorantia legis non
excusat." It would be the height of injustice to punish or otherwise burden a citizen for the
transgression of a law of which he had no notice whatsoever, not even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the publication of laws
taken so vital significance that at this time when the people have bestowed upon the President a
power heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass
media of the debates and deliberations in the Batasan Pambansa – and for the diligent ones,
ready access to the legislative records – no such publicity accompanies the law-making process
of the President. Thus, without publication, the people have no means of knowing what
presidential decrees have actually been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees. (Emphasis supplied)

Because petitioners failed to follow the requirements enumerated by the Revised Administrative
Code, the assailed regulation must be struck down.

Going now to the content of CMO 27-3003, we likewise hold that it is unconstitutional for being
violative of the equal protection clause of the Constitution.

The equal protection clause means that no person or class of persons shall be deprived of the
same protection of laws enjoyed by other persons or other classes in the same place in like
circumstances. Thus, the guarantee of the equal protection of laws is not violated if there is a
reasonable classification. For a classification to be reasonable, it must be shown that (1) it rests
on substantial distinctions; (2) it is germane to the purpose of the law; (3) it is not limited to
existing conditions only; and (4) it applies equally to all members of the same class.22

Unfortunately, CMO 27-2003 does not meet these requirements. We do not see how the quality
of wheat is affected by who imports it, where it is discharged, or which country it came from.

Thus, on the one hand, even if other millers excluded from CMO 27-2003 have imported food
grade wheat, the product would still be declared as feed grade wheat, a classification subjecting
them to 7% tariff. On the other hand, even if the importers listed under CMO 27-2003 have
imported feed grade wheat, they would only be made to pay 3% tariff, thus depriving the state of
the taxes due. The regulation, therefore, does not become disadvantageous to respondent only,
but even to the state.

It is also not clear how the regulation intends to "monitor more closely wheat importations and
thus prevent their misclassification." A careful study of CMO 27-2003 shows that it not only
fails to achieve this end, but results in the opposite. The application of the regulation forecloses
the possibility that other corporations that are excluded from the list import food grade wheat; at
the same time, it creates an assumption that those who meet the criteria do not import feed grade
wheat. In the first case, importers are unnecessarily burdened to prove the classification of their
wheat imports; while in the second, the state carries that burden.
Petitioner Commissioner of Customs also went beyond his powers when the regulation limited
the customs officer’s duties mandated by Section 1403 of the Tariff and Customs Law, as
amended. The law provides:

Section 1403. – Duties of Customs Officer Tasked to Examine, Classify, and Appraise Imported
Articles. – The customs officer tasked to examine, classify, and appraise imported articles shall
determine whether the packages designated for examination and their contents are in accordance
with the declaration in the entry, invoice and other pertinent documents and shall make return in
such a manner as to indicate whether the articles have been truly and correctly declared in the
entry as regard their quantity, measurement, weight, and tariff classification and not imported
contrary to law. He shall submit samples to the laboratory for analysis when feasible to do so and
when such analysis is necessary for the proper classification, appraisal, and/or admission into the
Philippines of imported articles.

Likewise, the customs officer shall determine the unit of quantity in which they are usually
bought and sold, and appraise the imported articles in accordance with Section 201 of this Code.

Failure on the part of the customs officer to comply with his duties shall subject him to the
penalties prescribed under Section 3604 of this Code.1âwphi1

The provision mandates that the customs officer must first assess and determine the classification
of the imported article before tariff may be imposed. Unfortunately, CMO 23-2007 has already
classified the article even before the customs officer had the chance to examine it. In effect,
petitioner Commissioner of Customs diminished the powers granted by the Tariff and Customs
Code with regard to wheat importation when it no longer required the customs officer’s prior
examination and assessment of the proper classification of the wheat.

It is well-settled that rules and regulations, which are the product of a delegated power to create
new and additional legal provisions that have the effect of law, should be within the scope of the
statutory authority granted by the legislature to the administrative agency. It is required that the
regulation be germane to the objects and purposes of the law; and that it be not in contradiction
to, but in conformity with, the standards prescribed by law.23

In summary, petitioners violated respondent’s right to due process in the issuance of CMO 27-
2003 when they failed to observe the requirements under the Revised Administrative Code.
Petitioners likewise violated respondent’s right to equal protection of laws when they provided
for an unreasonable classification in the application of the regulation. Finally, petitioner
Commissioner of Customs went beyond his powers of delegated authority when the regulation
limited the powers of the customs officer to examine and assess imported articles.

WHEREFORE, in view of the foregoing, the Petition is DENIED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 150947 July 15, 2003

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
MICHEL J. LHUILLIER PAWNSHOP, INC., respondent.

DAVIDE, JR., C.J.:

Are pawnshops included in the term lending investors for the purpose of imposing the 5%
percentage tax under then Section 116 of the National Internal Revenue Code (NIRC) of 1977, as
amended by Executive Order No. 273?

Petitioner Commissioner of Internal Revenue (CIR) filed the instant petition for review to set
aside the decision1 of 20 November 2001 of the Court of Appeals in CA G.R. SP No. 62463,
which affirmed the decision of 13 December 2000 of the Court of Tax Appeals (CTA) in CTA
Case No. 5690 cancelling the assessment issued against respondent Michel J. Lhuillier
Pawnshop, Inc. (hereafter Lhuillier) in the amount of P3,360,335.11 as deficiency percentage tax
for 1994, inclusive of interest and surcharges.

The facts are as follows:

On 11 March 1991, CIR Jose U. Ong issued Revenue Memorandum Order (RMO) No.
15-91 imposing a 5% lending investor’s tax on pawnshops; thus:

A restudy of P.D. [No.] 114 shows that the principal activity of pawnshops is lending
money at interest and incidentally accepting a "pawn" of personal property delivered by
the pawner to the pawnee as security for the loan.(Sec. 3, Ibid). Clearly, this makes
pawnshop business akin to lending investor’s business activity which is broad enough to
encompass the business of lending money at interest by any person whether natural or
juridical. Such being the case, pawnshops shall be subject to the 5% lending investor’s
tax based on their gross income pursuant to Section 116 of the Tax Code, as amended.

This RMO was clarified by Revenue Memorandum Circular (RMC) No. 43-91 on 27 May 1991,
which reads:

1. RM[O] 15-91 dated March 11, 1991.

This Circular subjects to the 5% lending investor’s tax the gross income of pawnshops
pursuant to Section 116 of the Tax Code, and it thus revokes BIR Ruling No[]. 6-90, and
 VAT Ruling Nos. 22-90 and 67-90. In order to have a uniform cut-off date, avoid
unfairness on the part of tax- payers if they are required to pay the tax on past
transactions, and so as to give meaning to the express provisions of Section 246 of the
Tax Code, pawnshop owners or operators shall become liable to the lending investor’s
tax on their gross income beginning January 1, 1991. Since the deadline for the filing of
percentage tax return (BIR Form No. 2529A-0) and the payment of the tax on lending
investors covering the first calendar quarter of 1991 has already lapsed, taxpayers are
given up to June 30, 1991 within which to pay the said tax without penalty. If the tax is
paid after June 30, 1991, the corresponding penalties shall be assessed and computed
from April 21, 1991.

Since pawnshops are considered as lending investors effective January 1, 1991, they also become
subject to documentary stamp taxes prescribed in Title VII of the Tax Code. BIR Ruling No.
325-88 dated July 13, 1988 is hereby revoked.

On 11 September 1997, pursuant to these issuances, the Bureau of Internal Revenue (BIR) issued
Assessment Notice No. 81-PT-13-94-97-9-118 against Lhuillier demanding payment of
deficiency percentage tax in the sum of P3,360,335.11 for 1994 inclusive of interest and
surcharges.

On 3 October 1997, Lhuillier filed an administrative protest with the Office of the Revenue
Regional Director contending that (1) neither the Tax Code nor the VAT Law expressly imposes
5% percentage tax on the gross income of pawnshops; (2) pawnshops are different from lending
investors, which are subject to the 5% percentage tax under the specific provision of the Tax
Code; (3) RMO No. 15-91 is not implementing any provision of the Internal Revenue laws but is
a new and additional tax measure on pawnshops, which only Congress could enact; (4) RMO
No. 15-91 impliedly amends the Tax Code and is therefore taxation by implication, which is
proscribed by law; and (5) RMO No. 15-91 is a "class legislation" because it singles out
pawnshops among other lending and financial operations.

On 12 October 1998, Deputy BIR Commissioner Romeo S. Panganiban issued Warrant of

Distraint and/or Levy No. 81-043-98 against Lhuillier’s property for the enforcement and
payment of the assessed percentage tax.

Its protest having been unacted upon, Lhuillier, in a letter dated 3 March 1998, elevated the
matter to the CIR. Still, the protest was not acted upon by the CIR. Thus, on 11 November 1998,
Lhuillier filed a "Notice and Memorandum on Appeal" with the Court of Tax Appeals invoking
Section 228 of Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997, which
provides:

Section 228. Protesting of Assessment. …

If the protest is denied in whole or in part, or is not acted upon within one hundred eighty
(180) days from submission of documents, the taxpayer adversely affected by the
decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from
 receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period;
otherwise, the decision shall become final, executory and demandable.

The case was docketed as CTA Case No. 5690.

On 19 November 1998, the CIR filed with the CTA a motion to dismiss Lhuillier’s
petition on the ground that it did not state a cause of action, as there was no action yet on
the protest.

Lhuillier opposed the motion to dismiss and moved for the issuance of a writ of
preliminary injunction praying that the BIR be enjoined from enforcing the warrant of
distraint and levy.

For Lhuillier’s failure to appear on the scheduled date of hearing, the CTA denied the
motion for the issuance of a writ of preliminary injunction. However, on Lhuillier’s
motion for reconsideration, said denial was set aside and a hearing on the motion for the
issuance of a writ of preliminary injunction was set.

On 30 June 1999, after due hearing, the CTA denied the CIR’s motion to dismiss and
granted Lhuillier’s motion for the issuance of a writ of preliminary injunction.

On 13 December 2000, the CTA rendered a decision declaring (1) RMO No. 15-91 and
RMC No. 43-91 null and void insofar as they classify pawnshops as lending investors
subject to 5% percentage tax; and (2) Assessment Notice No. 81-PT-13-94-97-9-118 as
cancelled, withdrawn, and with no force and effect. 2

Dissatisfied, the CIR filed a petition for review with the Court of Appeals praying that the
aforesaid decision be reversed and set aside and another one be rendered ordering Lhuillier to
pay the 5% lending investor’s tax for 1994 with interests and surcharges.

Upon due consideration of the issues presented by the parties in their respective memoranda, the
Court of Appeals affirmed the CTA decision on 20 November 2001.

The CIR is now before this Court via this petition for review on certiorari, alleging that the Court
of Appeals erred in holding that pawnshops are not subject to the 5% lending investor’s tax. He
invokes then Section 116 of the Tax Code, which imposed a 5% percentage tax on lending
investors. He argues that the legal definition of lending investors provided in Section 157 (u) of
the Tax Code is broad enough to include pawnshop operators. Section 3 of Presidential Decree
No. 114 states that the principal business activity of a pawnshop is lending money; thus, a
pawnshop easily falls under the legal definition of lending investors. RMO No. 15-91 and RMC
No. 43-91, which subject pawnshops to the 5% lending investor’s tax based on their gross
income, are valid. Being mere interpretations of the NIRC, they need not be published. Lastly,
the CIR invokes the case of Commissioner of Internal Revenue vs. Agencia Exquisite of Bohol,
Inc.,3 where the Court of Appeals’ Special Fourteenth Division ruled that a pawnshop is subject
to the 5% lending investor’s tax.4
Lhuillier, on the other hand, maintains that before and after the amendment of the Tax Code by
E.O. No. 273, which took effect on 1 January 1988, pawnshops and lending investors were
subjected to different tax treatments. Pawnshops were required to pay an annual fixed tax of
only P1,000, while lending investors were subject to a 5% percentage tax on their gross income
in addition to their fixed annual taxes. Accordingly, during the period from April 1982 up to
December 1990, the CIR consistently ruled that a pawnshop is not a lending investor and should
not therefore be required to pay percentage tax on its gross income.

Lhuillier likewise asserts that RMO No. 15-91 and RMC No. 43-91 are not implementing rules
but are new and additional tax measures, which only Congress is empowered to enact. Besides,
they are invalid because they have never been published in the Official Gazette or any newspaper
of general circulation.

Lhuillier further points out that pawnshops are strictly regulated by the Central Bank pursuant to
P.D. No. 114, otherwise known as The Pawnshop Regulation Act. On the other hand, there is no
special law governing lending investors. Due to the wide differences between the two,
pawnshops had never been considered as lending investors for tax purposes. In fact, in 1994,
Congress passed House Bill No. 11197,5 which attempted to amend Section 116 of the NIRC, as
amended, to include owners of pawnshops as among those subject to percentage tax. However,
the Senate Bill and the subsequent Bicameral Committee version, which eventually became the
E-VAT Law, did not incorporate such proposed amendment.

Lastly, Lhuillier argues that following the maxim in statutory construction "expressio unius est
exclusio alterius," it was not the intention of the Legislature to impose percentage taxes on
pawnshops because if it were so, pawnshops would have been included as among the businesses
subject to the said tax. Inasmuch as revenue laws impose special burdens upon taxpayers, the
enforcement of such laws should not be extended by implication beyond the clear import of the
language used.

We are therefore called upon to resolve the issue of whether pawnshops are subject to the 5%
lending investor’s tax. Corollary to this issue are the following questions: (1) Are RMO No. 15-
91 and RMC No. 43-91 valid? (2) Were they issued to implement Section 116 of the NIRC of
1977, as amended? (3) Are pawnshops considered "lending investors" for the purpose of the
imposition of the lending investor’s tax? (4) Is publication necessary for the validity of RMO No.
15-91 and RMC No. 43-91.

RMO No. 15-91 and RMC No. 43-91 were issued in accordance with the power of the CIR to
make rulings and opinions in connection with the implementation of internal revenue laws,
which was bestowed by then Section 245 of the NIRC of 1977, as amended by E.O. No.
273.6 Such power of the CIR cannot be controverted. However, the CIR cannot, in the exercise
of such power, issue administrative rulings or circulars not consistent with the law sought to be
applied. Indeed, administrative issuances must not override, supplant or modify the law, but must
remain consistent with the law they intend to carry out. Only Congress can repeal or amend the
law.7
The CIR argues that both issuances are mere rules and regulations implementing then Section
116 of the NIRC, as amended, which provided:

SEC. 116. Percentage tax on dealers in securities; lending investors. - Dealers in

securities and lending investors shall pay a tax equivalent to six (6) per centum of their
gross income. Lending investors shall pay a tax equivalent to five (5%) percent of their
gross income.

It is clear from the aforequoted provision that pawnshops are not specifically included. Thus, the
question is whether pawnshops are considered lending investors for the purpose of imposing
percentage tax.

We rule in the negative.

Incidentally, we observe that both parties, as well as the Court of Tax Appeals and the Court of
Appeals, refer to the National Internal Revenue Code as the Tax Code. They did not specify
whether the provisions they cited were taken from the NIRC of 1977, as amended, or the NIRC
of 1986, as amended. For clarity, it must be pointed out that the NIRC of 1977 as renumbered
and rearranged by E.O. No. 273 is a later law than the NIRC of 1986, as amended by P.D. Nos.
1991, 1994, 2006 and 2031. The citation of the specific Code is important for us to determine the
intent of the law.

Under Section 157(u) of the NIRC of 1986, as amended, the term lending investor includes "all
persons who make a practice of lending money for themselves or others at interest." A
pawnshop, on the other hand, is defined under Section 3 of P.D. No. 114 as "a person or entity
engaged in the business of lending money on personal property delivered as security for loans
and shall be synonymous, and may be used interchangeably, with pawnbroker or pawn
brokerage."

While it is true that pawnshops are engaged in the business of lending money, they are not
considered "lending investors" for the purpose of imposing the 5% percentage taxes for the
following reasons:

First. Under Section 192, paragraph 3, sub-paragraphs (dd) and (ff), of the NIRC of 1977,
prior to its amendment by E.O. No. 273, as well as Section 161, paragraph 2, sub-
paragraphs (dd) and (ff), of the NIRC of 1986, pawnshops and lending investors were
subjected to different tax treatments; thus:

(3) Other Fixed Taxes. – The following fixed taxes shall be collected as follows, the
amount stated being for the whole year, when not otherwise specified:

….

(dd) Lending investors –

1. In chartered cities and first class municipalities, one thousand pesos;

 2. In second and third class municipalities, five hundred pesos;

3. In fourth and fifth class municipalities and municipal districts, two hundred fifty pesos:
Provided, That lending investors who do business as such in more than one province shall
pay a tax of one thousand pesos.

….

(ff) Pawnshops, one thousand pesos (underscoring ours)

Second. Congress never intended pawnshops to be treated in the same way as lending investors.
Section 116 of the NIRC of 1977, as renumbered and rearranged by E.O. No. 273, was basically
lifted from Section 1758 of the NIRC of 1986, which treated both tax subjects differently.
Section 175 of the latter Code read as follows:

Sec. 175. Percentage tax on dealers in securities, lending investors. -- Dealers in

securities shall pay a tax equivalent to six (6%) percent of their gross income. Lending
investors shall pay a tax equivalent to five (5%) percent of their gross income. (As
amended by P.D. No. 1739, P.D. No. 1959 and P.D. No. 1994).

We note that the definition of lending investors found in Section 157 (u) of the NIRC of 1986 is
not found in the NIRC of 1977, as amended by E.O. No. 273, where Section 116 invoked by the
CIR is found. However, as emphasized earlier, both the NIRC of 1986 and the NIRC of 1977
dealt with pawnshops and lending investors differently. Verily then, it was the intent of Congress
to deal with both subjects differently. Hence, we must likewise interpret the statute to conform
with such legislative intent.

Third. Section 116 of the NIRC of 1977, as amended by E.O. No. 273, subjects to percentage tax
dealers in securities and lending investors only. There is no mention of pawnshops. Under the
maxim expressio unius est exclusio alterius, the mention of one thing implies the exclusion of
another thing not mentioned. Thus, if a statute enumerates the things upon which it is to operate,
everything else must necessarily and by implication be excluded from its operation and
effect.9 This rule, as a guide to probable legislative intent, is based upon the rules of logic and
natural workings of the human mind.10

Fourth. The BIR had ruled several times prior to the issuance of RMO No. 15-91 and RMC 43-
91 that pawnshops were not subject to the 5% percentage tax imposed by Section 116 of the
NIRC of 1977, as amended by E.O. No. 273. This was even admitted by the CIR in RMO No.
15-91 itself. Considering that Section 116 of the NIRC of 1977, as amended, was practically
lifted from Section 175 of the NIRC of 1986, as amended, and there being no change in the law,
the interpretation thereof should not have been altered.

It may not be amiss to state that, as pointed out by the respondent, pawnshops was sought to be
included as among those subject to 5% percentage tax by House Bill No. 11197 in 1994. Section
13 thereof reads:
 Section 13. Section 116 of the National Internal Revenue Code, as amended, is hereby
further amended to read as follows:

"SEC. 116. Percentage tax on dealers in securities; lending investors; OWNERS

OF PAWNSHOPS; FOREIGN CURRENCY DEALERS AND/OR MONEY
CHANGERS. – Dealers in securities shall pay a tax equivalent to Six (6%) per
centum of their gross income. Lending investors, OWNERS OF PAWNSHOPS
AND FOREIGN CURRENCY DEALERS AND/OR MONEY CHANGERS shall
pay a tax equivalent to Five (5%) percent of their gross income."

If pawnshops were covered within the term lending investor, there would have been no need to
introduce such amendment to include owners of pawnshops. At any rate, such proposed
amendment was not adopted. Instead, the approved bill which became R.A. No. 7716 11 repealed
Section 116 of NIRC of 1977, as amended, which was the basis of RMO No. 15-91 and RMC
No. 43-91; thus:

SEC. 20. Repealing Clauses. -- The provisions of any special law relative to the rate of
franchise taxes are hereby expressly repealed. Sections 113, 114 and 116 of the National
Internal Revenue Code are hereby repealed.

Section 21 of the same law provides that the law shall take effect fifteen (15) days after
its complete publication in the Official Gazette or in at least two (2) national newspapers
of general circulation whichever comes earlier. R.A. No. 7716 was published in the
Official Gazette on 1 August 199412; in the Journal and Malaya newspapers, on 12 May
1994; and in the Manila Bulletin, on 5 June 1994. Thus, R.A. No. 7716 is deemed
effective on 27 May 1994.

Since Section 116 of the NIRC of 1977, which breathed life on the questioned administrative
issuances, had already been repealed, RMO 15-91 and RMC 43-91, which depended upon it, are
deemed automatically repealed. Hence, even granting that pawnshops are included within the
term lending investors, the assessment from 27 May 1994 onward would have no leg to stand on.

Adding to the invalidity of the RMC No. 43-91 and RMO No. 15-91 is the absence of
publication. While the rule-making authority of the CIR is not doubted, like any other
government agency, the CIR may not disregard legal requirements or applicable principles in the
exercise of quasi-legislative powers.

Let us first distinguish between two kinds of administrative issuances: the legislative rule and the
interpretative rule. A legislative rule is in the nature of subordinate legislation, designed to
implement a primary legislation by providing the details thereof. An interpretative rule, on the
other hand, is designed to provide guidelines to the law which the administrative agency is in
charge of enforcing.13

In Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance

Secretary,14 this Tribunal ruled:
 … In the same way that laws must have the benefit of public hearing, it is generally
required that before a legislative rule is adopted there must be hearing. In this connection,
the Administrative Code of 1987 provides:

Public Participation. - If not otherwise required by law, an agency shall, as far as

practicable, publish or circulate notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates
shall have been published in a newspaper of general circulation at least two weeks before
the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

In addition, such rule must be published.

When an administrative rule is merely interpretative in nature, its applicability needs nothing
further than its bare issuance, for it gives no real consequence more than what the law itself has
already prescribed. When, on the other hand, the administrative rule goes beyond merely
providing for the means that can facilitate or render least cumbersome the implementation of the
law but substantially increases the burden of those governed, it behooves the agency to accord at
least to those directly affected a chance to be heard, and thereafter to be duly informed, before
that new issuance is given the force and effect of law. 15

RMO No. 15-91 and RMC No. 43-91 cannot be viewed simply as implementing rules or
corrective measures revoking in the process the previous rulings of past Commissioners.
Specifically, they would have been amendatory provisions applicable to pawnshops. Without
these disputed CIR issuances, pawnshops would not be liable to pay the 5% percentage tax,
considering that they were not specifically included in Section 116 of the NIRC of 1977, as
amended. In so doing, the CIR did not simply interpret the law. The due observance of the
requirements of notice, hearing, and publication should not have been ignored.

There is no need for us to discuss the ruling in CA-G.R. SP No. 59282 entitled Commissioner of
Internal Revenue v. Agencia Exquisite of Bohol Inc., which upheld the validity of RMO No. 15-
91 and RMC No. 43-91. Suffice it to say that the judgment in that case cannot be binding upon
the Supreme Court because it is only a decision of the Court of Appeals. The Supreme Court, by
tradition and in our system of judicial administration, has the last word on what the law is; it is
the final arbiter of any justifiable controversy. There is only one Supreme Court from whose
decisions all other courts should take their bearings.16

In view of the foregoing, RMO No. 15-91 and RMC No. 43-91 are hereby declared null and
void. Consequently, Lhuillier is not liable to pay the 5% lending investor’s tax.

WHEREFORE, the petition is hereby DISMISSED for lack of merit. The decision of the Court
of Appeals of 20 November 2001 in CA-G.R. SP No. 62463 is AFFIRMED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-16704 March 17, 1962

VICTORIAS MILLING COMPANY, INC., petitioner-appellant,

vs.
SOCIAL SECURITY COMMISSION, respondent-appellee.

Ross, Selph and Carrascoso for petitioner-appellant.

Office of the Solicitor General and Ernesto T. Duran for respondent-appellee.

BARRERA, J.:

On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the following
tenor:

Effective November 1, 1958, all Employers in computing the premiums due the System,
will take into consideration and include in the Employee's remuneration all bonuses and
overtime pay, as well as the cash value of other media of remuneration. All these will
comprise the Employee's remuneration or earnings, upon which the 3-1/2% and 2-1/2%
contributions will be based, up to a maximum of P500 for any one month.

Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., through counsel,
wrote the Social Security Commission in effect protesting against the circular as contradictory to
a previous Circular No. 7, dated October 7, 1957 expressly excluding overtime pay and bonus in
the computation of the employers' and employees' respective monthly premium contributions,
and submitting, "In order to assist your System in arriving at a proper interpretation of the term
'compensation' for the purposes of" such computation, their observations on Republic Act 1161
and its amendment and on the general interpretation of the words "compensation",
"remuneration" and "wages". Counsel further questioned the validity of the circular for lack of
authority on the part of the Social Security Commission to promulgate it without the approval of
the President and for lack of publication in the Official Gazette.

Overruling these objections, the Social Security Commission ruled that Circular No. 22 is not a
rule or regulation that needed the approval of the President and publication in the Official
Gazette to be effective, but a mere administrative interpretation of the statute, a mere statement
of general policy or opinion as to how the law should be construed.

Not satisfied with this ruling, petitioner comes to this Court on appeal.

The single issue involved in this appeal is whether or not Circular No. 22 is a rule or regulation,
as contemplated in Section 4(a) of Republic Act 1161 empowering the Social Security
Commission "to adopt, amend and repeal subject to the approval of the President such rules and
regulations as may be necessary to carry out the provisions and purposes of this Act."

There can be no doubt that there is a distinction between an administrative rule or regulation and
an administrative interpretation of a law whose enforcement is entrusted to an administrative
body. When an administrative agency promulgates rules and regulations, it "makes" a new law
with the force and effect of a valid law, while when it renders an opinion or gives a statement of
policy, it merely interprets a pre-existing law (Parker, Administrative Law, p. 197; Davis,
Administrative Law, p. 194). Rules and regulations when promulgated in pursuance of the
procedure or authority conferred upon the administrative agency by law, partake of the nature of
a statute, and compliance therewith may be enforced by a penal sanction provided in the law.
This is so because statutes are usually couched in general terms, after expressing the policy,
purposes, objectives, remedies and sanctions intended by the legislature. The details and the
manner of carrying out the law are often times left to the administrative agency entrusted with its
enforcement. In this sense, it has been said that rules and regulations are the product of a
delegated power to create new or additional legal provisions that have the effect of law.
(Davis, op. cit., p. 194.)

A rule is binding on the courts so long as the procedure fixed for its promulgation is followed
and its scope is within the statutory authority granted by the legislature, even if the courts are not
in agreement with the policy stated therein or its innate wisdom (Davis, op. cit., 195-197). On the
other hand, administrative interpretation of the law is at best merely advisory, for it is the courts
that finally determine what the law means.

Circular No. 22 in question was issued by the Social Security Commission, in view of the
amendment of the provisions of the Social Security Law defining the term "compensation"
contained in Section 8 (f) of Republic Act No. 1161 which, before its amendment, reads as
follows:

(f) Compensation — All remuneration for employment include the cash value of any
remuneration paid in any medium other than cash except (1) that part of the remuneration
in excess of P500 received during the month; (2) bonuses, allowances or overtime pay;
and (3) dismissal and all other payments which the employer may make, although not
legally required to do so.

Republic Act No. 1792 changed the definition of "compensation" to:

(f) Compensation — All remuneration for employment include the cash value of any
remuneration paid in any medium other than cash except that part of the remuneration in
excess of P500.00 received during the month.

It will thus be seen that whereas prior to the amendment, bonuses, allowances, and overtime pay
given in addition to the regular or base pay were expressly excluded, or exempted from the
definition of the term "compensation", such exemption or exclusion was deleted by the
amendatory law. It thus became necessary for the Social Security Commission to interpret the
effect of such deletion or elimination. Circular No. 22 was, therefore, issued to apprise those
concerned of the interpretation or understanding of the Commission, of the law as amended,
which it was its duty to enforce. It did not add any duty or detail that was not already in the law
as amended. It merely stated and circularized the opinion of the Commission as to how the law
should be construed. 1äwphï1.ñët

The case of People v. Jolliffe (G.R. No. L-9553, promulgated on May 30, 1959) cited by
appellant, does not support its contention that the circular in question is a rule or regulation.
What was there said was merely that a regulation may be incorporated in the form of a circular.
Such statement simply meant that the substance and not the form of a regulation is decisive in
determining its nature. It does not lay down a general proposition of law that any circular,
regardless of its substance and even if it is only interpretative, constitutes a rule or regulation
which must be published in the Official Gazette before it could take effect.

The case of People v. Que Po Lay (50 O.G. 2850) also cited by appellant is not applicable to the
present case, because the penalty that may be incurred by employers and employees if they
refuse to pay the corresponding premiums on bonus, overtime pay, etc. which the employer pays
to his employees, is not by reason of non-compliance with Circular No. 22, but for violation of
the specific legal provisions contained in Section 27(c) and (f) of Republic Act No. 1161.

We find, therefore, that Circular No. 22 purports merely to advise employers-members of the
System of what, in the light of the amendment of the law, they should include in determining the
monthly compensation of their employees upon which the social security contributions should be
based, and that such circular did not require presidential approval and publication in the Official
Gazette for its effectivity.

It hardly need be said that the Commission's interpretation of the amendment embodied in its
Circular No. 22, is correct. The express elimination among the exemptions excluded in the old
law, of all bonuses, allowances and overtime pay in the determination of the "compensation"
paid to employees makes it imperative that such bonuses and overtime pay must now be included
in the employee's remuneration in pursuance of the amendatory law. It is true that in previous
cases, this Court has held that bonus is not demandable because it is not part of the wage, salary,
or compensation of the employee. But the question in the instant case is not whether bonus is
demandable or not as part of compensation, but whether, after the employer does, in fact, give or
pay bonus to his employees, such bonuses shall be considered compensation under the Social
Security Act after they have been received by the employees. While it is true that terms or words
are to be interpreted in accordance with their well-accepted meaning in law, nevertheless, when
such term or word is specifically defined in a particular law, such interpretation must be adopted
in enforcing that particular law, for it can not be gainsaid that a particular phrase or term may
have one meaning for one purpose and another meaning for some other purpose. Such is the case
that is now before us. Republic Act 1161 specifically defined what "compensation" should mean
"For the purposes of this Act". Republic Act 1792 amended such definition by deleting same
exemptions authorized in the original Act. By virtue of this express substantial change in the
phraseology of the law, whatever prior executive or judicial construction may have been given to
the phrase in question should give way to the clear mandate of the new law.
IN VIEW OF THE FOREGOING, the Resolution appealed from is hereby affirmed, with costs
against appellant. So ordered.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-6355-56 August 31, 1953

PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-appellees,

vs.
SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant.

Office of the Solicitor General Juan R. Liwag and Solicitor Jose P. Alejandro for appellant.
Manuel O. Chan for appellees.

MONTEMAYOR, J.:

This is a joint appeal from the decision of the Court of First Instance of Manila declaring section
13 of Republic Act No. 590 unconstitutional, and ordering the appellant Saturnino David as
Collector of Internal Revenue to re-fund to Justice Pastor M. Endencia the sum of P1,744.45,
representing the income tax collected on his salary as Associate Justice of the Court of Appeals
in 1951, and to Justice Fernando Jugo the amount of P2,345.46, representing the income tax
collected on his salary from January 1,1950 to October 19, 1950, as Presiding Justice of the
Court of Appeals, and from October 20, 1950 to December 31,1950, as Associate Justice of the
Supreme Court, without special pronouncement as to costs.

Because of the similarity of the two cases, involving as they do the same question of law, they
were jointly submitted for determination in the lower court. Judge Higinio B. Macadaeg
presiding, in a rather exhaustive and well considered decision found and held that under the
doctrine laid down by this Court in the case of Perfecto vs. Meer, 85 Phil., 552, the collection of
income taxes from the salaries of Justice Jugo and Justice Endencia was a diminution of their
compensation and therefore was in violation of the Constitution of the Philippines, and so
ordered the refund of said taxes.

We see no profit and necessity in again discussing and considering the proposition and the
arguments pro and cons involved in the case of Perfecto vs. Meer, supra, which are raised,
brought up and presented here. In that case, we have held despite the ruling enunciated by the
United States Federal Supreme Court in the case of O 'Malley vs. Woodrought 307 U. S., 277,
that taxing the salary of a judicial officer in the Philippines is a diminution of such salary and so
violates the Constitution. We shall now confine our-selves to a discussion and determination of
the remaining question of whether or not Republic Act No. 590, particularly section 13, can
justify and legalize the collection of income tax on the salary of judicial officers.

According to the brief of the Solicitor General on behalf of appellant Collector of Internal
Revenue, our decision in the case of Perfecto vs. Meer, supra, was not received favorably by
Congress, because immediately after its promulgation, Congress enacted Republic Act No. 590.
To bring home his point, the Solicitor General reproduced what he considers the pertinent
discussion in the Lower House of House Bill No. 1127 which became Republic Act No. 590.

For purposes of reference, we are reproducing section 9, Article VIII of our Constitution:.

SEC. 9. The members of the Supreme Court and all judges of inferior courts shall hold
office during good behavior, until they reach the age of seventy years, or become
incapacitated to discharge the duties of their office. They shall receive such compensation
as may be fixed by law, which shall not be diminished during their continuance in office.
Until the Congress shall provide otherwise, the Chief Justice of the Supreme Court shall
receive an annual compensation of sixteen thousand pesos, and each Associate Justice,
fifteen thousand pesos.

As already stated construing and applying the above constitutional provision, we held in the
Perfecto case that judicial officers are exempt from the payment of income tax on their salaries,
because the collection thereof by the Government was a decrease or diminution of their salaries
during their continuance in office, a thing which is expressly prohibited by the Constitution.
Thereafter, according to the Solicitor General, because Congress did not favorably receive the
decision in the Perfecto case, Congress promulgated Republic Act No. 590, if not to counteract
the ruling in that decision, at least now to authorize and legalize the collection of income tax on
the salaries of judicial officers. We quote section 13 of Republic Act No. 590:

SEC 13. No salary wherever received by any public officer of the Republic of the
Philippines shall be considered as exempt from the income tax, payment of which is
hereby declared not to be dimunition of his compensation fixed by the Constitution or by
law.

So we have this situation. The Supreme Court in a decision interpreting the Constitution,
particularly section 9, Article VIII, has held that judicial officers are exempt from payment of
income tax on their salaries, because the collection thereof was a diminution of such salaries,
specifically prohibited by the Constitution. Now comes the Legislature and in section 13,
Republic Act No. 590, says that "no salary wherever received by any public officer of the
Republic (naturally including a judicial officer) shall be considered as exempt from the income
tax," and proceeds to declare that payment of said income tax is not a diminution of his
compensation. Can the Legislature validly do this? May the Legislature lawfully declare the
collection of income tax on the salary of a public official, specially a judicial officer, not a
decrease of his salary, after the Supreme Court has found and decided otherwise? To determine
this question, we shall have to go back to the fundamental principles regarding separation of
powers.

Under our system of constitutional government, the Legislative department is assigned the power
to make and enact laws. The Executive department is charged with the execution of carrying out
of the provisions of said laws. But the interpretation and application of said laws belong
exclusively to the Judicial department. And this authority to interpret and apply the laws extends
to the Constitution. Before the courts can determine whether a law is constitutional or not, it will
have to interpret and ascertain the meaning not only of said law, but also of the pertinent portion
of the Constitution in order to decide whether there is a conflict between the two, because if there
is, then the law will have to give way and has to be declared invalid and unconstitutional.

Defining and interpreting the law is a judicial function and the legislative branch may not
limit or restrict the power granted to the courts by the Constitution. (Bandy vs. Mickelson
et al., 44N. W., 2nd 341, 342.)

When it is clear that a statute transgresses the authority vested in the legislature by the
Constitution, it is the duty of the courts to declare the act unconstitutional because they
cannot shrink from it without violating their oaths of office. This duty of the courts to
maintain the Constitution as the fundamental law of the state is imperative and unceasing;
and, as Chief Justice Marshall said, whenever a statute is in violation of the fundamental
law, the courts must so adjudge and thereby give effect to the Constitution. Any other
course would lead to the destruction of the Constitution. Since the question as to the
constitutionality of a statute is a judicial matter, the courts will not decline the exercise of
jurisdiction upon the suggestion that action might be taken by political agencies in
disregard of the judgment of the judicial tribunals. (11 Am. Jur., 714-715.)

Under the American system of constitutional government, among the most important
functions in trusted to the judiciary are the interpreting of Constitutions and, as a closely
connected power, the determination of whether laws and acts of the legislature are or are
not contrary to the provisions of the Federal and State Constitutions. (11 Am. Jur., 905.).

By legislative fiat as enunciated in section 13, Republic Act NO. 590, Congress says that taxing
the salary of a judicial officer is not a decrease of compensation. This is a clear example of
interpretation or ascertainment of the meaning of the phrase "which shall not be diminished
during their continuance in office," found in section 9, Article VIII of the Constitution, referring
to the salaries of judicial officers. This act of interpreting the Constitution or any part thereof by
the Legislature is an invasion of the well-defined and established province and jurisdiction of the
Judiciary.

The rule is recognized elsewhere that the legislature cannot pass any declaratory act, or
act declaratory of what the law was before its passage, so as to give it any binding weight
with the courts. A legislative definition of a word as used in a statute is not conclusive of
its meaning as used elsewhere; otherwise, the legislature would be usurping a judicial
function in defining a term. (11 Am. Jur., 914, emphasis supplied)

The legislature cannot, upon passing a law which violates a constitutional provision,
validate it so as to prevent an attack thereon in the courts, by a declaration that it shall be
so construed as not to violate the constitutional inhibition. (11 Am. Jur., 919, emphasis
supplied)

We have already said that the Legislature under our form of government is assigned the task and
the power to make and enact laws, but not to interpret them. This is more true with regard to the
interpretation of the basic law, the Constitution, which is not within the sphere of the Legislative
department. If the Legislature may declare what a law means, or what a specific portion of the
Constitution means, especially after the courts have in actual case ascertain its meaning by
interpretation and applied it in a decision, this would surely cause confusion and instability in
judicial processes and court decisions. Under such a system, a final court determination of a case
based on a judicial interpretation of the law of the Constitution may be undermined or even
annulled by a subsequent and different interpretation of the law or of the Constitution by the
Legislative department. That would be neither wise nor desirable, besides being clearly violative
of the fundamental, principles of our constitutional system of government, particularly those
governing the separation of powers.

So much for the constitutional aspect of the case. Considering the practical side thereof, we
believe that the collection of income tax on a salary is an actual and evident diminution thereof.
Under the old system where the in-come tax was paid at the end of the year or sometime
thereafter, the decrease may not be so apparent and clear. All that the official who had previously
received his full salary was called upon to do, was to fulfill his obligation and to exercise his
privilege of paying his income tax on his salary. His salary fixed by law was received by him in
the amount of said tax comes from his other sources of income, he may not fully realize the fact
that his salary had been decreased in the amount of said income tax. But under the present
system of withholding the income tax at the source, where the full amount of the income tax
corresponding to his salary is computed in advance and divided into equal portions
corresponding to the number of pay-days during the year and actually deducted from his salary
corresponding to each payday, said official actually does not receive his salary in full, because
the income tax is deducted therefrom every payday, that is to say, twice a month. Let us take the
case of Justice Endencia. As Associate Justice of the Court of Appeals, his salary is fixed at
p12,000 a year, that is to say, he should receive P1,000 a month or P500 every payday, —
fifteenth and end of month. In the present case, the amount collected by the Collector of Internal
Revenue on said salary is P1,744.45 for one year. Divided by twelve (months) we shall have
P145.37 a month. And further dividing it by two paydays will bring it down to P72.685, which is
the income tax deducted form the collected on his salary each half month. So, if Justice
Endencia's salary as a judicial officer were not exempt from payment of the income tax, instead
of receiving P500 every payday, he would be actually receiving P427.31 only, and instead of
receiving P12,000 a year, he would be receiving but P10,255.55. Is it not therefor clear that
every payday, his salary is actually decreased by P72.685 and every year is decreased by
P1,744.45?

Reading the discussion in the lower House in connection with House Bill No. 1127, which
became Republic Act No. 590, it would seem that one of the main reasons behind the enactment
of the law was the feeling among certain legislators that members of the Supreme Court should
not enjoy any exemption and that as citizens, out of patriotism and love for their country, they
should pay income tax on their salaries. It might be stated in this connection that the exemption
is not enjoyed by the members of the Supreme Court alone but also by all judicial officers
including Justices of the Court of Appeals and judges of inferior courts. The exemption also
extends to other constitutional officers, like the President of the Republic, the Auditor General,
the members of the Commission on Elections, and possibly members of the Board of Tax
Appeals, commissioners of the Public Service Commission, and judges of the Court of Industrial
Relations. Compares to the number of all these officials, that of the Supreme Court Justices is
relatively insignificant. There are more than 990 other judicial officers enjoying the exemption,
including 15 Justices of the Court of Appeals, about 107 Judges of First Instance, 38 Municipal
Judges and about 830 Justices of the Peace. The reason behind the exemption in the Constitution,
as interpreted by the United States Federal Supreme Court and this Court, is to preserve the
independence of the Judiciary, not only of this High Tribunal but of the other courts, whose
present membership number more than 990 judicial officials.

The exemption was not primarily intended to benefit judicial officers, but was grounded on
public policy. As said by Justice Van Devanter of the United States Supreme Court in the case of
Evans vs. Gore (253 U. S., 245):

The primary purpose of the prohibition against diminution was not to benefit the judges,
but, like the clause in respect of tenure, to attract good and competent men to the bench
and to promote that independence of action and judgment which is essential to the
maintenance of the guaranties, limitations and pervading principles of the Constitution
and to the administration of justice without respect to person and with equal concern for
the poor and the rich. Such being its purpose, it is to be construed, not as a private grant,
but as a limitation imposed in the public interest; in other words, not restrictively, but in
accord with its spirit and the principle on which it proceeds.

Having in mind the limited number of judicial officers in the Philippines enjoying this
exemption, especially when the great bulk thereof are justices of the peace, many of them
receiving as low as P200 a month, and considering further the other exemptions allowed by the
income tax law, such as P3,000 for a married person and P600 for each dependent, the amount of
national revenue to be derived from income tax on the salaries of judicial officers, were if not for
the constitutional exemption, could not be large or substantial. But even if it were otherwise, it
should not affect, much less outweigh the purpose and the considerations that prompted the
establishment of the constitutional exemption. In the same case of Evans vs. Gore, supra, the
Federal Supreme Court declared "that they (fathers of the Constitution) regarded the
independence of the judges as far as greater importance than any revenue that could come from
taxing their salaries.

When a judicial officer assumed office, he does not exactly ask for exemption from payment of
income tax on his salary, as a privilege . It is already attached to his office, provided and secured
by the fundamental law, not primarily for his benefit, but based on public interest, to secure and
preserve his independence of judicial thought and action. When we come to the members of the
Supreme Court, this excemption to them is relatively of short duration. Because of the limited
membership in this High Tribunal, eleven, and due to the high standards of experience, practice
and training required, one generally enters its portals and comes to join its membership quite late
in life, on the aver-age, around his sixtieth year, and being required to retire at seventy, assuming
that he does not die or become incapacitated earlier, naturally he is not in a position to receive
the benefit of exemption for long. It is rather to the justices of the peace that the exemption can
give more benefit. They are relatively more numerous, and because of the meager salary they
receive, they can less afford to pay the income tax on it and its diminution by the amount of the
income tax if paid would be real, substantial and onerous.
Considering exemption in the abstract, there is nothing unusual or abhorrent in it, as long as it is
based on public policy or public interest. While all other citizens are subject to arrest when
charged with the commission of a crime, members of the Senate and House of Representatives
except in cases of treason, felony and breach of the peace are exempt from arrest, during their
attendance in the session of the Legislature; and while all other citizens are generally liable for
any speech, remark or statement, oral or written, tending to cause the dishonor, discredit or
contempt of a natural or juridical person or to blacken the memory of one who is dead, Senators
and Congressmen in making such statements during their sessions are extended immunity and
exemption.

And as to tax exemption, there are not a few citizens who enjoy this exemption. Persons, natural
and juridical, are exempt from taxes on their lands, buildings and improvements thereon when
used exclusively for educational purposes, even if they derive income therefrom. (Art. VI, Sec.
22 [3].) Holders of government bonds are exempted from the payment of taxes on the income or
interest they receive therefrom (sec. 29 (b) [4], National Internal Revenue Code as amended by
Republic Act No. 566). Payments or income received by any person residing in the Philippines
under the laws of the United States administered by the United States Veterans Administration
are exempt from taxation. (Republic Act No. 360). Funds received by officers and enlisted men
of the Philippine Army who served in the Armed Forces of the United States, allowances earned
by virtue of such services corresponding to the taxable years 1942 to 1945, inclusive, are
exempted from income tax. (Republic Act No. 210). The payment of wages and allowances of
officers and enlisted men of the Army Forces of the Philippines sent to Korea are also exempted
from taxation. (Republic Act No. 35). In other words, for reasons of public policy and public
interest, a citizen may justifiably by constitutional provision or statute be exempted from his
ordinary obligation of paying taxes on his income. Under the same public policy and perhaps for
the same it not higher considerations, the framers of the Constitution deemed it wise and
necessary to exempt judicial officers from paying taxes on their salaries so as not to decrease
their compensation, thereby insuring the independence of the Judiciary.

In conclusion we reiterate the doctrine laid down in the case of Perfecto vs. Meer, supra, to the
effect that the collection of income tax on the salary of a judicial officer is a diminution thereof
and so violates the Constitution. We further hold that the interpretation and application of the
Constitution and of statutes is within the exclusive province and jurisdiction of the Judicial
department, and that in enacting a law, the Legislature may not legally provide therein that it be
interpreted in such a way that it may not violate a Constitutional prohibition, thereby tying the
hands of the courts in their task of later interpreting said statute, specially when the interpretation
sought and provided in said statute runs counter to a previous interpretation already given in a
case by the highest court of the land.

In the views of the foregoing considerations, the decision appealed from is hereby affirmed, with
no pronouncement as to costs.

Republic of the Philippines

SUPREME COURT
Manila
 EN BANC

G.R. No. L-45081 July 15, 1936

JOSE A. ANGARA, petitioner,

vs.
THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and
DIONISIO C. MAYOR, respondents.

Godofredo Reyes for petitioner.

Office of the Solicitor General Hilado for respondent Electoral Commission.
Pedro Ynsua in his own behalf.
No appearance for other respondents.

LAUREL, J.:

This is an original action instituted in this court by the petitioner, Jose A. Angara, for the
issuance of a writ of prohibition to restrain and prohibit the Electoral Commission, one of the
respondents, from taking further cognizance of the protest filed by Pedro Ynsua, another
respondent, against the election of said petitioner as member of the National Assembly for the
first assembly district of the Province of Tayabas.

The facts of this case as they appear in the petition and as admitted by the respondents are as
follows:

(1) That in the elections of September 17, 1935, the petitioner, Jose A. Angara, and the
respondents, Pedro Ynsua, Miguel Castillo and Dionisio Mayor, were candidates voted
for the position of member of the National Assembly for the first district of the Province
of Tayabas;

(2) That on October 7, 1935, the provincial board of canvassers, proclaimed the petitioner
as member-elect of the National Assembly for the said district, for having received the
most number of votes;

(3) That on November 15, 1935, the petitioner took his oath of office;

(4) That on December 3, 1935, the National Assembly in session assembled, passed the
following resolution:

[No. 8]

RESOLUCION CONFIRMANDO LAS ACTAS DE AQUELLOS DIPUTADOS

CONTRA QUIENES NO SE HA PRESENTADO PROTESTA.
 Se resuelve: Que las actas de eleccion de los Diputados contra quienes no se
hubiere presentado debidamente una protesta antes de la adopcion de la presente
resolucion sean, como por la presente, son aprobadas y confirmadas.

Adoptada, 3 de diciembre, 1935.

(5) That on December 8, 1935, the herein respondent Pedro Ynsua filed before the
Electoral Commission a "Motion of Protest" against the election of the herein petitioner,
Jose A. Angara, being the only protest filed after the passage of Resolutions No. 8
aforequoted, and praying, among other-things, that said respondent be declared elected
member of the National Assembly for the first district of Tayabas, or that the election of
said position be nullified;

(6) That on December 9, 1935, the Electoral Commission adopted a resolution, paragraph
6 of which provides:

6. La Comision no considerara ninguna protesta que no se haya presentado en o

antes de este dia.

(7) That on December 20, 1935, the herein petitioner, Jose A. Angara, one of the
respondents in the aforesaid protest, filed before the Electoral Commission a "Motion to
Dismiss the Protest", alleging (a) that Resolution No. 8 of Dismiss the Protest", alleging
(a) that Resolution No. 8 of the National Assembly was adopted in the legitimate exercise
of its constitutional prerogative to prescribe the period during which protests against the
election of its members should be presented; (b) that the aforesaid resolution has for its
object, and is the accepted formula for, the limitation of said period; and (c) that the
protest in question was filed out of the prescribed period;

(8) That on December 27, 1935, the herein respondent, Pedro Ynsua, filed an "Answer to
the Motion of Dismissal" alleging that there is no legal or constitutional provision barring
the presentation of a protest against the election of a member of the National Assembly
after confirmation;

(9) That on December 31, 1935, the herein petitioner, Jose A. Angara, filed a "Reply" to
the aforesaid "Answer to the Motion of Dismissal";

(10) That the case being submitted for decision, the Electoral Commission promulgated a
resolution on January 23, 1936, denying herein petitioner's "Motion to Dismiss the
Protest."

The application of the petitioner sets forth the following grounds for the issuance of the writ
prayed for:

(a) That the Constitution confers exclusive jurisdiction upon the electoral Commission
solely as regards the merits of contested elections to the National Assembly;
 (b) That the Constitution excludes from said jurisdiction the power to regulate the
proceedings of said election contests, which power has been reserved to the Legislative
Department of the Government or the National Assembly;

(c) That like the Supreme Court and other courts created in pursuance of the Constitution,
whose exclusive jurisdiction relates solely to deciding the merits of controversies
submitted to them for decision and to matters involving their internal organization, the
Electoral Commission can regulate its proceedings only if the National Assembly has not
availed of its primary power to so regulate such proceedings;

(d) That Resolution No. 8 of the National Assembly is, therefore, valid and should be
respected and obeyed;

(e) That under paragraph 13 of section 1 of the ordinance appended to the Constitution
and paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the 73rd Congress
of the United States) as well as under section 1 and 3 (should be sections 1 and 2) of
article VIII of the Constitution, this Supreme Court has jurisdiction to pass upon the
fundamental question herein raised because it involves an interpretation of the
Constitution of the Philippines.

On February 25, 1936, the Solicitor-General appeared and filed an answer in behalf of the
respondent Electoral Commission interposing the following special defenses:

(a) That the Electoral Commission has been created by the Constitution as an
instrumentality of the Legislative Department invested with the jurisdiction to decide "all
contests relating to the election, returns, and qualifications of the members of the
National Assembly"; that in adopting its resolution of December 9, 1935, fixing this date
as the last day for the presentation of protests against the election of any member of the
National Assembly, it acted within its jurisdiction and in the legitimate exercise of the
implied powers granted it by the Constitution to adopt the rules and regulations essential
to carry out the power and functions conferred upon the same by the fundamental law;
that in adopting its resolution of January 23, 1936, overruling the motion of the petitioner
to dismiss the election protest in question, and declaring itself with jurisdiction to take
cognizance of said protest, it acted in the legitimate exercise of its quasi-judicial
functions a an instrumentality of the Legislative Department of the Commonwealth
Government, and hence said act is beyond the judicial cognizance or control of the
Supreme Court;

(b) That the resolution of the National Assembly of December 3, 1935, confirming the
election of the members of the National Assembly against whom no protest had thus far
been filed, could not and did not deprive the electoral Commission of its jurisdiction to
take cognizance of election protests filed within the time that might be set by its own
rules:

(c) That the Electoral Commission is a body invested with quasi-judicial functions,
created by the Constitution as an instrumentality of the Legislative Department, and is not
 an "inferior tribunal, or corporation, or board, or person" within the purview of section
226 and 516 of the Code of Civil Procedure, against which prohibition would lie.

The respondent Pedro Ynsua, in his turn, appeared and filed an answer in his own behalf on
March 2, 1936, setting forth the following as his special defense:

(a) That at the time of the approval of the rules of the Electoral Commission on
December 9, 1935, there was no existing law fixing the period within which protests
against the election of members of the National Assembly should be filed; that in fixing
December 9, 1935, as the last day for the filing of protests against the election of
members of the National Assembly, the Electoral Commission was exercising a power
impliedly conferred upon it by the Constitution, by reason of its quasi-judicial attributes;

(b) That said respondent presented his motion of protest before the Electoral Commission
on December 9, 1935, the last day fixed by paragraph 6 of the rules of the said Electoral
Commission;

(c) That therefore the Electoral Commission acquired jurisdiction over the protest filed by
said respondent and over the parties thereto, and the resolution of the Electoral
Commission of January 23, 1936, denying petitioner's motion to dismiss said protest was
an act within the jurisdiction of the said commission, and is not reviewable by means of a
writ of prohibition;

(d) That neither the law nor the Constitution requires confirmation by the National
Assembly of the election of its members, and that such confirmation does not operate to
limit the period within which protests should be filed as to deprive the Electoral
Commission of jurisdiction over protest filed subsequent thereto;

(e) That the Electoral Commission is an independent entity created by the Constitution,
endowed with quasi-judicial functions, whose decision are final and unappealable;

( f ) That the electoral Commission, as a constitutional creation, is not an inferior tribunal,

corporation, board or person, within the terms of sections 226 and 516 of the Code of
Civil Procedure; and that neither under the provisions of sections 1 and 2 of article II
(should be article VIII) of the Constitution and paragraph 13 of section 1 of the
Ordinance appended thereto could it be subject in the exercise of its quasi-judicial
functions to a writ of prohibition from the Supreme Court;

(g) That paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the 73rd
Congress of the united States) has no application to the case at bar.

The case was argued before us on March 13, 1936. Before it was submitted for decision, the
petitioner prayed for the issuance of a preliminary writ of injunction against the respondent
Electoral Commission which petition was denied "without passing upon the merits of the case"
by resolution of this court of March 21, 1936.
There was no appearance for the other respondents.

The issues to be decided in the case at bar may be reduced to the following two principal
propositions:

1. Has the Supreme Court jurisdiction over the Electoral Commission and the subject
matter of the controversy upon the foregoing related facts, and in the affirmative,

2. Has the said Electoral Commission acted without or in excess of its jurisdiction in
assuming to the cognizance of the protest filed the election of the herein petitioner
notwithstanding the previous confirmation of such election by resolution of the National
Assembly?

We could perhaps dispose of this case by passing directly upon the merits of the controversy.
However, the question of jurisdiction having been presented, we do not feel justified in evading
the issue. Being a case primæ impressionis, it would hardly be consistent with our sense of duty
to overlook the broader aspect of the question and leave it undecided. Neither would we be doing
justice to the industry and vehemence of counsel were we not to pass upon the question of
jurisdiction squarely presented to our consideration.

The separation of powers is a fundamental principle in our system of government. It obtains not
through express provision but by actual division in our Constitution. Each department of the
government has exclusive cognizance of matters within its jurisdiction, and is supreme within its
own sphere. But it does not follow from the fact that the three powers are to be kept separate and
distinct that the Constitution intended them to be absolutely unrestrained and independent of
each other. The Constitution has provided for an elaborate system of checks and balances to
secure coordination in the workings of the various departments of the government. For example,
the Chief Executive under our Constitution is so far made a check on the legislative power that
this assent is required in the enactment of laws. This, however, is subject to the further check that
a bill may become a law notwithstanding the refusal of the President to approve it, by a vote of
two-thirds or three-fourths, as the case may be, of the National Assembly. The President has also
the right to convene the Assembly in special session whenever he chooses. On the other hand,
the National Assembly operates as a check on the Executive in the sense that its consent through
its Commission on Appointments is necessary in the appointments of certain officers; and the
concurrence of a majority of all its members is essential to the conclusion of treaties.
Furthermore, in its power to determine what courts other than the Supreme Court shall be
established, to define their jurisdiction and to appropriate funds for their support, the National
Assembly controls the judicial department to a certain extent. The Assembly also exercises the
judicial power of trying impeachments. And the judiciary in turn, with the Supreme Court as the
final arbiter, effectively checks the other departments in the exercise of its power to determine
the law, and hence to declare executive and legislative acts void if violative of the Constitution.

But in the main, the Constitution has blocked out with deft strokes and in bold lines, allotment of
power to the executive, the legislative and the judicial departments of the government. The
overlapping and interlacing of functions and duties between the several departments, however,
sometimes makes it hard to say just where the one leaves off and the other begins. In times of
social disquietude or political excitement, the great landmarks of the Constitution are apt to be
forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department is the
only constitutional organ which can be called upon to determine the proper allocation of powers
between the several departments and among the integral or constituent units thereof.

As any human production, our Constitution is of course lacking perfection and perfectibility, but
as much as it was within the power of our people, acting through their delegates to so provide,
that instrument which is the expression of their sovereignty however limited, has established a
republican government intended to operate and function as a harmonious whole, under a system
of checks and balances, and subject to specific limitations and restrictions provided in the said
instrument. The Constitution sets forth in no uncertain language the restrictions and limitations
upon governmental powers and agencies. If these restrictions and limitations are transcended it
would be inconceivable if the Constitution had not provided for a mechanism by which to direct
the course of government along constitutional channels, for then the distribution of powers
would be mere verbiage, the bill of rights mere expressions of sentiment, and the principles of
good government mere political apothegms. Certainly, the limitation and restrictions embodied
in our Constitution are real as they should be in any living constitution. In the United States
where no express constitutional grant is found in their constitution, the possession of this
moderating power of the courts, not to speak of its historical origin and development there, has
been set at rest by popular acquiescence for a period of more than one and a half centuries. In our
case, this moderating power is granted, if not expressly, by clear implication from section 2 of
article VIII of our constitution.

The Constitution is a definition of the powers of government. Who is to determine the nature,
scope and extent of such powers? The Constitution itself has provided for the instrumentality of
the judiciary as the rational way. And when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; it does not in reality
nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine conflicting claims of authority under the
Constitution and to establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is involved in what is termed
"judicial supremacy" which properly is the power of judicial review under the Constitution. Even
then, this power of judicial review is limited to actual cases and controversies to be exercised
after full opportunity of argument by the parties, and limited further to the constitutional question
raised or the very lis mota presented. Any attempt at abstraction could only lead to dialectics and
barren legal questions and to sterile conclusions unrelated to actualities. Narrowed as its function
is in this manner, the judiciary does not pass upon questions of wisdom, justice or expediency of
legislation. More than that, courts accord the presumption of constitutionality to legislative
enactments, not only because the legislature is presumed to abide by the Constitution but also
because the judiciary in the determination of actual cases and controversies must reflect the
wisdom and justice of the people as expressed through their representatives in the executive and
legislative departments of the governments of the government.

But much as we might postulate on the internal checks of power provided in our Constitution, it
ought not the less to be remembered that, in the language of James Madison, the system itself is
not "the chief palladium of constitutional liberty . . . the people who are authors of this blessing
must also be its guardians . . . their eyes must be ever ready to mark, their voice to pronounce . . .
aggression on the authority of their constitution." In the Last and ultimate analysis, then, must
the success of our government in the unfolding years to come be tested in the crucible of Filipino
minds and hearts than in consultation rooms and court chambers.

In the case at bar, the national Assembly has by resolution (No. 8) of December 3, 1935,
confirmed the election of the herein petitioner to the said body. On the other hand, the Electoral
Commission has by resolution adopted on December 9, 1935, fixed said date as the last day for
the filing of protests against the election, returns and qualifications of members of the National
Assembly, notwithstanding the previous confirmation made by the National Assembly as
aforesaid. If, as contended by the petitioner, the resolution of the National Assembly has the
effect of cutting off the power of the Electoral Commission to entertain protests against the
election, returns and qualifications of members of the National Assembly, submitted after
December 3, 1935, then the resolution of the Electoral Commission of December 9, 1935, is
mere surplusage and had no effect. But, if, as contended by the respondents, the Electoral
Commission has the sole power of regulating its proceedings to the exclusion of the National
Assembly, then the resolution of December 9, 1935, by which the Electoral Commission fixed
said date as the last day for filing protests against the election, returns and qualifications of
members of the National Assembly, should be upheld.

Here is then presented an actual controversy involving as it does a conflict of a grave

constitutional nature between the National Assembly on the one hand, and the Electoral
Commission on the other. From the very nature of the republican government established in our
country in the light of American experience and of our own, upon the judicial department is
thrown the solemn and inescapable obligation of interpreting the Constitution and defining
constitutional boundaries. The Electoral Commission, as we shall have occasion to refer
hereafter, is a constitutional organ, created for a specific purpose, namely to determine all
contests relating to the election, returns and qualifications of the members of the National
Assembly. Although the Electoral Commission may not be interfered with, when and while
acting within the limits of its authority, it does not follow that it is beyond the reach of the
constitutional mechanism adopted by the people and that it is not subject to constitutional
restrictions. The Electoral Commission is not a separate department of the government, and even
if it were, conflicting claims of authority under the fundamental law between department powers
and agencies of the government are necessarily determined by the judiciary in justifiable and
appropriate cases. Discarding the English type and other European types of constitutional
government, the framers of our constitution adopted the American type where the written
constitution is interpreted and given effect by the judicial department. In some countries which
have declined to follow the American example, provisions have been inserted in their
constitutions prohibiting the courts from exercising the power to interpret the fundamental law.
This is taken as a recognition of what otherwise would be the rule that in the absence of direct
prohibition courts are bound to assume what is logically their function. For instance, the
Constitution of Poland of 1921, expressly provides that courts shall have no power to examine
the validity of statutes (art. 81, chap. IV). The former Austrian Constitution contained a similar
declaration. In countries whose constitutions are silent in this respect, courts have assumed this
power. This is true in Norway, Greece, Australia and South Africa. Whereas, in Czechoslovakia
(arts. 2 and 3, Preliminary Law to constitutional Charter of the Czechoslovak Republic, February
29, 1920) and Spain (arts. 121-123, Title IX, Constitutional of the Republic of 1931) especial
constitutional courts are established to pass upon the validity of ordinary laws. In our case, the
nature of the present controversy shows the necessity of a final constitutional arbiter to determine
the conflict of authority between two agencies created by the Constitution. Were we to decline to
take cognizance of the controversy, who will determine the conflict? And if the conflict were left
undecided and undetermined, would not a void be thus created in our constitutional system
which may be in the long run prove destructive of the entire framework? To ask these questions
is to answer them. Natura vacuum abhorret, so must we avoid exhaustion in our constitutional
system. Upon principle, reason and authority, we are clearly of the opinion that upon the
admitted facts of the present case, this court has jurisdiction over the Electoral Commission and
the subject mater of the present controversy for the purpose of determining the character, scope
and extent of the constitutional grant to the Electoral Commission as "the sole judge of all
contests relating to the election, returns and qualifications of the members of the National
Assembly."

Having disposed of the question of jurisdiction, we shall now proceed to pass upon the second
proposition and determine whether the Electoral Commission has acted without or in excess of
its jurisdiction in adopting its resolution of December 9, 1935, and in assuming to take
cognizance of the protest filed against the election of the herein petitioner notwithstanding the
previous confirmation thereof by the National Assembly on December 3, 1935. As able counsel
for the petitioner has pointed out, the issue hinges on the interpretation of section 4 of Article VI
of the Constitution which provides:

"SEC. 4. There shall be an Electoral Commission composed of three Justice of the Supreme
Court designated by the Chief Justice, and of six Members chosen by the National Assembly,
three of whom shall be nominated by the party having the largest number of votes, and three by
the party having the second largest number of votes therein. The senior Justice in the
Commission shall be its Chairman. The Electoral Commission shall be the sole judge of all
contests relating to the election, returns and qualifications of the members of the National
Assembly." It is imperative, therefore, that we delve into the origin and history of this
constitutional provision and inquire into the intention of its framers and the people who adopted
it so that we may properly appreciate its full meaning, import and significance.

The original provision regarding this subject in the Act of Congress of July 1, 1902 (sec. 7, par.
5) laying down the rule that "the assembly shall be the judge of the elections, returns, and
qualifications of its members", was taken from clause 1 of section 5, Article I of the Constitution
of the United States providing that "Each House shall be the Judge of the Elections, Returns, and
Qualifications of its own Members, . . . ." The Act of Congress of August 29, 1916 (sec. 18, par.
1) modified this provision by the insertion of the word "sole" as follows: "That the Senate and
House of Representatives, respectively, shall be the sole judges of the elections, returns, and
qualifications of their elective members . . ." apparently in order to emphasize the exclusive the
Legislative over the particular case s therein specified. This court has had occasion to
characterize this grant of power to the Philippine Senate and House of Representatives,
respectively, as "full, clear and complete" (Veloso vs. Boards of Canvassers of Leyte and Samar
[1919], 39 Phil., 886, 888.)
The first step towards the creation of an independent tribunal for the purpose of deciding
contested elections to the legislature was taken by the sub-committee of five appointed by the
Committee on Constitutional Guarantees of the Constitutional Convention, which sub-committee
submitted a report on August 30, 1934, recommending the creation of a Tribunal of
Constitutional Security empowered to hear legislature but also against the election of executive
officers for whose election the vote of the whole nation is required, as well as to initiate
impeachment proceedings against specified executive and judicial officer. For the purpose of
hearing legislative protests, the tribunal was to be composed of three justices designated by the
Supreme Court and six members of the house of the legislature to which the contest corresponds,
three members to be designed by the majority party and three by the minority, to be presided
over by the Senior Justice unless the Chief Justice is also a member in which case the latter shall
preside. The foregoing proposal was submitted by the Committee on Constitutional Guarantees
to the Convention on September 15, 1934, with slight modifications consisting in the reduction
of the legislative representation to four members, that is, two senators to be designated one each
from the two major parties in the Senate and two representatives to be designated one each from
the two major parties in the House of Representatives, and in awarding representation to the
executive department in the persons of two representatives to be designated by the President.

Meanwhile, the Committee on Legislative Power was also preparing its report. As submitted to
the Convention on September 24, 1934 subsection 5, section 5, of the proposed Article on the
Legislative Department, reads as follows:

The elections, returns and qualifications of the members of either house and all cases
contesting the election of any of their members shall be judged by an Electoral
Commission, constituted, as to each House, by three members elected by the members of
the party having the largest number of votes therein, three elected by the members of the
party having the second largest number of votes, and as to its Chairman, one Justice of
the Supreme Court designated by the Chief Justice.

The idea of creating a Tribunal of Constitutional Security with comprehensive jurisdiction as

proposed by the Committee on Constitutional Guarantees which was probably inspired by the
Spanish plan (art. 121, Constitution of the Spanish Republic of 1931), was soon abandoned in
favor of the proposition of the Committee on Legislative Power to create a similar body with
reduced powers and with specific and limited jurisdiction, to be designated as a Electoral
Commission. The Sponsorship Committee modified the proposal of the Committee on
Legislative Power with respect to the composition of the Electoral Commission and made further
changes in phraseology to suit the project of adopting a unicameral instead of a bicameral
legislature. The draft as finally submitted to the Convention on October 26, 1934, reads as
follows:

(6) The elections, returns and qualifications of the Members of the National Assembly
and all cases contesting the election of any of its Members shall be judged by an Electoral
Commission, composed of three members elected by the party having the largest number
of votes in the National Assembly, three elected by the members of the party having the
second largest number of votes, and three justices of the Supreme Court designated by
the Chief Justice, the Commission to be presided over by one of said justices.
During the discussion of the amendment introduced by Delegates Labrador, Abordo, and others,
proposing to strike out the whole subsection of the foregoing draft and inserting in lieu thereof
the following: "The National Assembly shall be the soled and exclusive judge of the elections,
returns, and qualifications of the Members", the following illuminating remarks were made on
the floor of the Convention in its session of December 4, 1934, as to the scope of the said draft:

xxx xxx xxx

Mr. VENTURA. Mr. President, we have a doubt here as to the scope of the meaning of
the first four lines, paragraph 6, page 11 of the draft, reading: "The elections, returns and
qualifications of the Members of the National Assembly and all cases contesting the
election of any of its Members shall be judged by an Electoral Commission, . . ." I should
like to ask from the gentleman from Capiz whether the election and qualification of the
member whose elections is not contested shall also be judged by the Electoral
Commission.

Mr. ROXAS. If there is no question about the election of the members, there is nothing to
be judged; that is why the word "judge" is used to indicate a controversy. If there is no
question about the election of a member, there is nothing to be submitted to the Electoral
Commission and there is nothing to be determined.

Mr. VENTURA. But does that carry the idea also that the Electoral Commission shall
confirm also the election of those whose election is not contested?

Mr. ROXAS. There is no need of confirmation. As the gentleman knows, the action of
the House of Representatives confirming the election of its members is just a matter of
the rules of the assembly. It is not constitutional. It is not necessary. After a man files his
credentials that he has been elected, that is sufficient, unless his election is contested.

Mr. VENTURA. But I do not believe that that is sufficient, as we have observed that for
purposes of the auditor, in the matter of election of a member to a legislative body,
because he will not authorize his pay.

Mr. ROXAS. Well, what is the case with regards to the municipal president who is
elected? What happens with regards to the councilors of a municipality? Does anybody
confirm their election? The municipal council does this: it makes a canvass and proclaims
— in this case the municipal council proclaims who has been elected, and it ends there,
unless there is a contest. It is the same case; there is no need on the part of the Electoral
Commission unless there is a contest. The first clause refers to the case referred to by the
gentleman from Cavite where one person tries to be elected in place of another who was
declared elected. From example, in a case when the residence of the man who has been
elected is in question, or in case the citizenship of the man who has been elected is in
question.

However, if the assembly desires to annul the power of the commission, it may do so by
certain maneuvers upon its first meeting when the returns are submitted to the
assembly. The purpose is to give to the Electoral Commission all the powers exercised by
the assembly referring to the elections, returns and qualifications of the members. When
there is no contest, there is nothing to be judged.

Mr. VENTURA. Then it should be eliminated.

Mr. ROXAS. But that is a different matter, I think Mr. Delegate.

Mr. CINCO. Mr. President, I have a similar question as that propounded by the
gentleman from Ilocos Norte when I arose a while ago. However I want to ask more
questions from the delegate from Capiz. This paragraph 6 on page 11 of the draft cites
cases contesting the election as separate from the first part of the sections which refers to
elections, returns and qualifications.

Mr. ROXAS. That is merely for the sake of clarity. In fact the cases of contested elections
are already included in the phrase "the elections, returns and qualifications." This
phrase "and contested elections" was inserted merely for the sake of clarity.

Mr. CINCO. Under this paragraph, may not the Electoral Commission, at its own
instance, refuse to confirm the elections of the members."

Mr. ROXAS. I do not think so, unless there is a protest.

Mr. LABRADOR. Mr. President, will the gentleman yield?

THE PRESIDENT. The gentleman may yield, if he so desires.

Mr. ROXAS. Willingly.

Mr. LABRADOR. Does not the gentleman from Capiz believe that unless this power is
granted to the assembly, the assembly on its own motion does not have the right to
contest the election and qualification of its members?

Mr. ROXAS. I have no doubt but that the gentleman is right. If this draft is retained as it
is, even if two-thirds of the assembly believe that a member has not the qualifications
provided by law, they cannot remove him for that reason.

Mr. LABRADOR. So that the right to remove shall only be retained by the Electoral
Commission.

Mr. ROXAS. By the assembly for misconduct.

Mr. LABRADOR. I mean with respect to the qualifications of the members.

Mr. ROXAS. Yes, by the Electoral Commission.

 Mr. LABRADOR. So that under this draft, no member of the assembly has the right to
question the eligibility of its members?

Mr. ROXAS. Before a member can question the eligibility, he must go to the Electoral
Commission and make the question before the Electoral Commission.

Mr. LABRADOR. So that the Electoral Commission shall decide whether the election is
contested or not contested.

Mr. ROXAS. Yes, sir: that is the purpose.

Mr. PELAYO. Mr. President, I would like to be informed if the Electoral Commission
has power and authority to pass upon the qualifications of the members of the National
Assembly even though that question has not been raised.

Mr. ROXAS. I have just said that they have no power, because they can only judge.

In the same session, the first clause of the aforesaid draft reading "The election, returns and
qualifications of the members of the National Assembly and" was eliminated by the Sponsorship
Committee in response to an amendment introduced by Delegates Francisco, Ventura, Vinzons,
Rafols, Lim, Mumar and others. In explaining the difference between the original draft and the
draft as amended, Delegate Roxas speaking for the Sponsorship Committee said:

xxx xxx xxx

Sr. ROXAS. La diferencia, señor Presidente, consiste solamente en obviar la objecion

apuntada por varios Delegados al efecto de que la primera clausula del draft que dice:
"The elections, returns and qualifications of the members of the National Assembly"
parece que da a la Comision Electoral la facultad de determinar tambien la eleccion de
los miembros que no ha sido protestados y para obviar esa dificultad, creemos que la
enmienda tien razon en ese sentido, si enmendamos el draft, de tal modo que se lea como
sigue: "All cases contesting the election", de modo que los jueces de la Comision
Electoral se limitaran solamente a los casos en que haya habido protesta contra las actas."
Before the amendment of Delegate Labrador was voted upon the following interpellation
also took place:

El Sr. CONEJERO. Antes de votarse la enmienda, quisiera

El Sr. PRESIDENTE. ¿Que dice el Comite?

El Sr. ROXAS. Con mucho gusto.

El Sr. CONEJERO. Tal como esta el draft, dando tres miembros a la mayoria, y otros tres
a la minoria y tres a la Corte Suprema, ¿no cree Su Señoria que esto equivale
practicamente a dejar el asunto a los miembros del Tribunal Supremo?
 El Sr. ROXAS. Si y no. Creemos que si el tribunal o la Commission esta constituido en
esa forma, tanto los miembros de la mayoria como los de la minoria asi como los
miembros de la Corte Suprema consideraran la cuestion sobre la base de sus meritos,
sabiendo que el partidismo no es suficiente para dar el triunfo.

El Sr. CONEJERO. ¿Cree Su Señoria que en un caso como ese, podriamos hacer que
tanto los de la mayoria como los de la minoria prescindieran del partidismo?

El Sr. ROXAS. Creo que si, porque el partidismo no les daria el triunfo.

xxx xxx xxx

The amendment introduced by Delegates Labrador, Abordo and others seeking to restore the
power to decide contests relating to the election, returns and qualifications of members of the
National Assembly to the National Assembly itself, was defeated by a vote of ninety-eight (98)
against fifty-six (56).

In the same session of December 4, 1934, Delegate Cruz (C.) sought to amend the draft by
reducing the representation of the minority party and the Supreme Court in the Electoral
Commission to two members each, so as to accord more representation to the majority party. The
Convention rejected this amendment by a vote of seventy-six (76) against forty-six (46), thus
maintaining the non-partisan character of the commission.

As approved on January 31, 1935, the draft was made to read as follows:

(6) All cases contesting the elections, returns and qualifications of the Members of the
National Assembly shall be judged by an Electoral Commission, composed of three
members elected by the party having the largest number of votes in the National
Assembly, three elected by the members of the party having the second largest number of
votes, and three justices of the Supreme Court designated by the Chief Justice, the
Commission to be presided over by one of said justices.

The Style Committee to which the draft was submitted revised it as follows:

SEC. 4. There shall be an Electoral Commission composed of three Justices of the

Supreme Court designated by the Chief Justice, and of six Members chosen by the
National Assembly, three of whom shall be nominated by the party having the largest
number of votes, and three by the party having the second largest number of votes
therein. The senior Justice in the Commission shall be its chairman. The Electoral
Commission shall be the sole judge of the election, returns, and qualifications of the
Members of the National Assembly.

When the foregoing draft was submitted for approval on February 8, 1935, the Style Committee,
through President Recto, to effectuate the original intention of the Convention, agreed to insert
the phrase "All contests relating to" between the phrase "judge of" and the words "the elections",
which was accordingly accepted by the Convention.
The transfer of the power of determining the election, returns and qualifications of the members
of the legislature long lodged in the legislative body, to an independent, impartial and non-
partisan tribunal, is by no means a mere experiment in the science of government.

Cushing, in his Law and Practice of Legislative Assemblies (ninth edition, chapter VI, pages 57,
58), gives a vivid account of the "scandalously notorious" canvassing of votes by political parties
in the disposition of contests by the House of Commons in the following passages which are
partly quoted by the petitioner in his printed memorandum of March 14, 1936:

153. From the time when the commons established their right to be the exclusive judges
of the elections, returns, and qualifications of their members, until the year 1770, two
modes of proceeding prevailed, in the determination of controverted elections, and rights
of membership. One of the standing committees appointed at the commencement of each
session, was denominated the committee of privileges and elections, whose functions was
to hear and investigate all questions of this description which might be referred to them,
and to report their proceedings, with their opinion thereupon, to the house, from time to
time. When an election petition was referred to this committee they heard the parties and
their witnesses and other evidence, and made a report of all the evidence, together with
their opinion thereupon, in the form of resolutions, which were considered and agreed or
disagreed to by the house. The other mode of proceeding was by a hearing at the bar of
the house itself. When this court was adopted, the case was heard and decided by the
house, in substantially the same manner as by a committee. The committee of privileges
and elections although a select committee. The committee of privileges and elections
although a select committee was usually what is called an open one; that is to say, in
order to constitute the committee, a quorum of the members named was required to be
present, but all the members of the house were at liberty to attend the committee and vote
if they pleased.

154. With the growth of political parties in parliament questions relating to the right of
membership gradually assumed a political character; so that for many years previous to
the year 1770, controverted elections had been tried and determined by the house of
commons, as mere party questions, upon which the strength of contending factions might
be tested. Thus, for Example, in 1741, Sir Robert Walpole, after repeated attacks upon his
government, resigned his office in consequence of an adverse vote upon the Chippenham
election. Mr. Hatsell remarks, of the trial of election cases, as conducted under this
system, that "Every principle of decency and justice were notoriously and openly
prostituted, from whence the younger part of the house were insensibly, but too
successfully, induced to adopt the same licentious conduct in more serious matters, and in
questions of higher importance to the public welfare." Mr. George Grenville, a
distinguished member of the house of commons, undertook to propose a remedy for the
evil, and, on the 7th of March, 1770, obtained the unanimous leave of the house to bring
in a bill, "to regulate the trial of controverted elections, or returns of members to serve in
parliament." In his speech to explain his plan, on the motion for leave, Mr. Grenville
alluded to the existing practice in the following terms: "Instead of trusting to the merits of
their respective causes, the principal dependence of both parties is their private interest
among us; and it is scandalously notorious that we are as earnestly canvassed to attend in
 favor of the opposite sides, as if we were wholly self-elective, and not bound to act by the
principles of justice, but by the discretionary impulse of our own inclinations; nay, it is
well known, that in every contested election, many members of this house, who are
ultimately to judge in a kind of judicial capacity between the competitors, enlist
themselves as parties in the contention, and take upon themselves the partial management
of the very business, upon which they should determine with the strictest impartiality."

155. It was to put an end to the practices thus described, that Mr. Grenville brought in a
bill which met with the approbation of both houses, and received the royal assent on the
12th of April, 1770. This was the celebrated law since known by the name of the
Grenville Act; of which Mr. Hatsell declares, that it "was one of the nobles works, for the
honor of the house of commons, and the security of the constitution, that was ever
devised by any minister or statesman." It is probable, that the magnitude of the evil, or
the apparent success of the remedy, may have led many of the contemporaries of the
measure to the information of a judgement, which was not acquiesced in by some of the
leading statesmen of the day, and has not been entirely confirmed by subsequent
experience. The bill was objected to by Lord North, Mr. De Grey, afterwards chief justice
of the common pleas, Mr. Ellis, Mr. Dyson, who had been clerk of the house, and Mr.
Charles James Fox, chiefly on the ground, that the introduction of the new system was an
essential alteration of the constitution of parliament, and a total abrogation of one of the
most important rights and jurisdictions of the house of commons.

As early as 1868, the House of Commons in England solved the problem of insuring the non-
partisan settlement of the controverted elections of its members by abdicating its prerogative to
two judges of the King's Bench of the High Court of Justice selected from a rota in accordance
with rules of court made for the purpose. Having proved successful, the practice has become
imbedded in English jurisprudence (Parliamentary Elections Act, 1868 [31 & 32 Vict. c. 125] as
amended by Parliamentary Elections and Corrupt Practices Act. 1879 [42 & 43 Vict. c. 75], s. 2;
Corrupt and Illegal Practices Preventions Act, 1883 [46 & 47 Vict. c. 51;, s. 70; Expiring Laws
Continuance Act, 1911 [1 & 2 Geo. 5, c. 22]; Laws of England, vol. XII, p. 408, vol. XXI, p.
787). In the Dominion of Canada, election contests which were originally heard by the
Committee of the House of Commons, are since 1922 tried in the courts. Likewise, in the
Commonwealth of Australia, election contests which were originally determined by each house,
are since 1922 tried in the High Court. In Hungary, the organic law provides that all protests
against the election of members of the Upper House of the Diet are to be resolved by the
Supreme Administrative Court (Law 22 of 1916, chap. 2, art. 37, par. 6). The Constitution of
Poland of March 17, 1921 (art. 19) and the Constitution of the Free City of Danzig of May 13,
1922 (art. 10) vest the authority to decide contested elections to the Diet or National Assembly in
the Supreme Court. For the purpose of deciding legislative contests, the Constitution of the
German Reich of July 1, 1919 (art. 31), the Constitution of the Czechoslovak Republic of
February 29, 1920 (art. 19) and the Constitution of the Grecian Republic of June 2, 1927 (art.
43), all provide for an Electoral Commission.

The creation of an Electoral Commission whose membership is recruited both from the
legislature and the judiciary is by no means unknown in the United States. In the presidential
elections of 1876 there was a dispute as to the number of electoral votes received by each of the
two opposing candidates. As the Constitution made no adequate provision for such a
contingency, Congress passed a law on January 29, 1877 (United States Statutes at Large, vol.
19, chap. 37, pp. 227-229), creating a special Electoral Commission composed of five members
elected by the Senate, five members elected by the House of Representatives, and five justices of
the Supreme Court, the fifth justice to be selected by the four designated in the Act. The decision
of the commission was to be binding unless rejected by the two houses voting separately.
Although there is not much of a moral lesson to be derived from the experience of America in
this regard, judging from the observations of Justice Field, who was a member of that body on
the part of the Supreme Court (Countryman, the Supreme Court of the United States and its
Appellate Power under the Constitution [Albany, 1913] — Relentless Partisanship of Electoral
Commission, p. 25 et seq.), the experiment has at least abiding historical interest.

The members of the Constitutional Convention who framed our fundamental law were in their
majority men mature in years and experience. To be sure, many of them were familiar with the
history and political development of other countries of the world. When , therefore, they deemed
it wise to create an Electoral Commission as a constitutional organ and invested it with the
exclusive function of passing upon and determining the election, returns and qualifications of the
members of the National Assembly, they must have done so not only in the light of their own
experience but also having in view the experience of other enlightened peoples of the world. The
creation of the Electoral Commission was designed to remedy certain evils of which the framers
of our Constitution were cognizant. Notwithstanding the vigorous opposition of some members
of the Convention to its creation, the plan, as hereinabove stated, was approved by that body by a
vote of 98 against 58. All that can be said now is that, upon the approval of the constitutional the
creation of the Electoral Commission is the expression of the wisdom and "ultimate justice of the
people". (Abraham Lincoln, First Inaugural Address, March 4, 1861.)

From the deliberations of our Constitutional Convention it is evident that the purpose was to
transfer in its totality all the powers previously exercised by the legislature in matters pertaining
to contested elections of its members, to an independent and impartial tribunal. It was not so
much the knowledge and appreciation of contemporary constitutional precedents, however, as
the long-felt need of determining legislative contests devoid of partisan considerations which
prompted the people, acting through their delegates to the Convention, to provide for this body
known as the Electoral Commission. With this end in view, a composite body in which both the
majority and minority parties are equally represented to off-set partisan influence in its
deliberations was created, and further endowed with judicial temper by including in its
membership three justices of the Supreme Court.

The Electoral Commission is a constitutional creation, invested with the necessary authority in
the performance and execution of the limited and specific function assigned to it by the
Constitution. Although it is not a power in our tripartite scheme of government, it is, to all intents
and purposes, when acting within the limits of its authority, an independent organ. It is, to be
sure, closer to the legislative department than to any other. The location of the provision (section
4) creating the Electoral Commission under Article VI entitled "Legislative Department" of our
Constitution is very indicative. Its compositions is also significant in that it is constituted by a
majority of members of the legislature. But it is a body separate from and independent of the
legislature.
The grant of power to the Electoral Commission to judge all contests relating to the election,
returns and qualifications of members of the National Assembly, is intended to be as complete
and unimpaired as if it had remained originally in the legislature. The express lodging of that
power in the Electoral Commission is an implied denial of the exercise of that power by the
National Assembly. And this is as effective a restriction upon the legislative power as an express
prohibition in the Constitution (Ex parte Lewis, 45 Tex. Crim. Rep., 1; State vs. Whisman, 36
S.D., 260; L.R.A., 1917B, 1). If we concede the power claimed in behalf of the National
Assembly that said body may regulate the proceedings of the Electoral Commission and cut off
the power of the commission to lay down the period within which protests should be filed, the
grant of power to the commission would be ineffective. The Electoral Commission in such case
would be invested with the power to determine contested cases involving the election, returns
and qualifications of the members of the National Assembly but subject at all times to the
regulative power of the National Assembly. Not only would the purpose of the framers of our
Constitution of totally transferring this authority from the legislative body be frustrated, but a
dual authority would be created with the resultant inevitable clash of powers from time to time.
A sad spectacle would then be presented of the Electoral Commission retaining the bare
authority of taking cognizance of cases referred to, but in reality without the necessary means to
render that authority effective whenever and whenever the National Assembly has chosen to act,
a situation worse than that intended to be remedied by the framers of our Constitution. The
power to regulate on the part of the National Assembly in procedural matters will inevitably lead
to the ultimate control by the Assembly of the entire proceedings of the Electoral Commission,
and, by indirection, to the entire abrogation of the constitutional grant. It is obvious that this
result should not be permitted.

We are not insensible to the impassioned argument or the learned counsel for the petitioner
regarding the importance and necessity of respecting the dignity and independence of the
national Assembly as a coordinate department of the government and of according validity to its
acts, to avoid what he characterized would be practically an unlimited power of the commission
in the admission of protests against members of the National Assembly. But as we have pointed
out hereinabove, the creation of the Electoral Commission carried with it ex necesitate rei the
power regulative in character to limit the time with which protests intrusted to its cognizance
should be filed. It is a settled rule of construction that where a general power is conferred or duty
enjoined, every particular power necessary for the exercise of the one or the performance of the
other is also conferred (Cooley, Constitutional Limitations, eight ed., vol. I, pp. 138, 139). In the
absence of any further constitutional provision relating to the procedure to be followed in filing
protests before the Electoral Commission, therefore, the incidental power to promulgate such
rules necessary for the proper exercise of its exclusive power to judge all contests relating to the
election, returns and qualifications of members of the National Assembly, must be deemed by
necessary implication to have been lodged also in the Electoral Commission.

It is, indeed, possible that, as suggested by counsel for the petitioner, the Electoral Commission
may abuse its regulative authority by admitting protests beyond any reasonable time, to the
disturbance of the tranquillity and peace of mind of the members of the National Assembly. But
the possibility of abuse is not argument against the concession of the power as there is no power
that is not susceptible of abuse. In the second place, if any mistake has been committed in the
creation of an Electoral Commission and in investing it with exclusive jurisdiction in all cases
relating to the election, returns, and qualifications of members of the National Assembly, the
remedy is political, not judicial, and must be sought through the ordinary processes of
democracy. All the possible abuses of the government are not intended to be corrected by the
judiciary. We believe, however, that the people in creating the Electoral Commission reposed as
much confidence in this body in the exclusive determination of the specified cases assigned to it,
as they have given to the Supreme Court in the proper cases entrusted to it for decision. All the
agencies of the government were designed by the Constitution to achieve specific purposes, and
each constitutional organ working within its own particular sphere of discretionary action must
be deemed to be animated with the same zeal and honesty in accomplishing the great ends for
which they were created by the sovereign will. That the actuations of these constitutional
agencies might leave much to be desired in given instances, is inherent in the perfection of
human institutions. In the third place, from the fact that the Electoral Commission may not be
interfered with in the exercise of its legitimate power, it does not follow that its acts, however
illegal or unconstitutional, may not be challenge in appropriate cases over which the courts may
exercise jurisdiction.

But independently of the legal and constitutional aspects of the present case, there are
considerations of equitable character that should not be overlooked in the appreciation of the
intrinsic merits of the controversy. The Commonwealth Government was inaugurated on
November 15, 1935, on which date the Constitution, except as to the provisions mentioned in
section 6 of Article XV thereof, went into effect. The new National Assembly convened on
November 25th of that year, and the resolution confirming the election of the petitioner, Jose A.
Angara was approved by that body on December 3, 1935. The protest by the herein respondent
Pedro Ynsua against the election of the petitioner was filed on December 9 of the same year. The
pleadings do not show when the Electoral Commission was formally organized but it does
appear that on December 9, 1935, the Electoral Commission met for the first time and approved
a resolution fixing said date as the last day for the filing of election protest. When, therefore, the
National Assembly passed its resolution of December 3, 1935, confirming the election of the
petitioner to the National Assembly, the Electoral Commission had not yet met; neither does it
appear that said body had actually been organized. As a mater of fact, according to certified
copies of official records on file in the archives division of the National Assembly attached to the
record of this case upon the petition of the petitioner, the three justices of the Supreme Court the
six members of the National Assembly constituting the Electoral Commission were respectively
designated only on December 4 and 6, 1935. If Resolution No. 8 of the National Assembly
confirming non-protested elections of members of the National Assembly had the effect of
limiting or tolling the time for the presentation of protests, the result would be that the National
Assembly — on the hypothesis that it still retained the incidental power of regulation in such
cases — had already barred the presentation of protests before the Electoral Commission had had
time to organize itself and deliberate on the mode and method to be followed in a matter
entrusted to its exclusive jurisdiction by the Constitution. This result was not and could not have
been contemplated, and should be avoided.

From another angle, Resolution No. 8 of the National Assembly confirming the election of
members against whom no protests had been filed at the time of its passage on December 3,
1935, can not be construed as a limitation upon the time for the initiation of election contests.
While there might have been good reason for the legislative practice of confirmation of the
election of members of the legislature at the time when the power to decide election contests was
still lodged in the legislature, confirmation alone by the legislature cannot be construed as
depriving the Electoral Commission of the authority incidental to its constitutional power to be
"the sole judge of all contest relating to the election, returns, and qualifications of the members
of the National Assembly", to fix the time for the filing of said election protests. Confirmation by
the National Assembly of the returns of its members against whose election no protests have
been filed is, to all legal purposes, unnecessary. As contended by the Electoral Commission in its
resolution of January 23, 1936, overruling the motion of the herein petitioner to dismiss the
protest filed by the respondent Pedro Ynsua, confirmation of the election of any member is not
required by the Constitution before he can discharge his duties as such member. As a matter of
fact, certification by the proper provincial board of canvassers is sufficient to entitle a member-
elect to a seat in the national Assembly and to render him eligible to any office in said body (No.
1, par. 1, Rules of the National Assembly, adopted December 6, 1935).

Under the practice prevailing both in the English House of Commons and in the Congress of the
United States, confirmation is neither necessary in order to entitle a member-elect to take his
seat. The return of the proper election officers is sufficient, and the member-elect presenting such
return begins to enjoy the privileges of a member from the time that he takes his oath of office
(Laws of England, vol. 12, pp. 331. 332; vol. 21, pp. 694, 695; U. S. C. A., Title 2, secs. 21, 25,
26). Confirmation is in order only in cases of contested elections where the decision is adverse to
the claims of the protestant. In England, the judges' decision or report in controverted elections is
certified to the Speaker of the House of Commons, and the House, upon being informed of such
certificate or report by the Speaker, is required to enter the same upon the Journals, and to give
such directions for confirming or altering the return, or for the issue of a writ for a new election,
or for carrying into execution the determination as circumstances may require (31 & 32 Vict., c.
125, sec. 13). In the United States, it is believed, the order or decision of the particular house
itself is generally regarded as sufficient, without any actual alternation or amendment of the
return (Cushing, Law and Practice of Legislative Assemblies, 9th ed., sec. 166).

Under the practice prevailing when the Jones Law was still in force, each house of the Philippine
Legislature fixed the time when protests against the election of any of its members should be
filed. This was expressly authorized by section 18 of the Jones Law making each house the sole
judge of the election, return and qualifications of its members, as well as by a law (sec. 478, Act
No. 3387) empowering each house to respectively prescribe by resolution the time and manner
of filing contest in the election of member of said bodies. As a matter of formality, after the time
fixed by its rules for the filing of protests had already expired, each house passed a resolution
confirming or approving the returns of such members against whose election no protests had
been filed within the prescribed time. This was interpreted as cutting off the filing of further
protests against the election of those members not theretofore contested (Amistad vs. Claravall
[Isabela], Second Philippine Legislature, Record — First Period, p. 89; Urguello vs. Rama [Third
District, Cebu], Sixth Philippine Legislature; Fetalvero vs. Festin [Romblon], Sixth Philippine
Legislature, Record — First Period, pp. 637-640; Kintanar vs. Aldanese [Fourth District, Cebu],
Sixth Philippine Legislature, Record — First Period, pp. 1121, 1122; Aguilar vs. Corpus
[Masbate], Eighth Philippine Legislature, Record — First Period, vol. III, No. 56, pp. 892, 893).
The Constitution has repealed section 18 of the Jones Law. Act No. 3387, section 478, must be
deemed to have been impliedly abrogated also, for the reason that with the power to determine
all contest relating to the election, returns and qualifications of members of the National
Assembly, is inseparably linked the authority to prescribe regulations for the exercise of that
power. There was thus no law nor constitutional provisions which authorized the National
Assembly to fix, as it is alleged to have fixed on December 3, 1935, the time for the filing of
contests against the election of its members. And what the National Assembly could not do
directly, it could not do by indirection through the medium of confirmation.

Summarizing, we conclude:

(a) That the government established by the Constitution follows fundamentally the theory
of separation of power into the legislative, the executive and the judicial.

(b) That the system of checks and balances and the overlapping of functions and duties
often makes difficult the delimitation of the powers granted.

(c) That in cases of conflict between the several departments and among the agencies
thereof, the judiciary, with the Supreme Court as the final arbiter, is the only
constitutional mechanism devised finally to resolve the conflict and allocate
constitutional boundaries.

(d) That judicial supremacy is but the power of judicial review in actual and appropriate
cases and controversies, and is the power and duty to see that no one branch or agency of
the government transcends the Constitution, which is the source of all authority.

(e) That the Electoral Commission is an independent constitutional creation with specific
powers and functions to execute and perform, closer for purposes of classification to the
legislative than to any of the other two departments of the governments.

(f ) That the Electoral Commission is the sole judge of all contests relating to the election,
returns and qualifications of members of the National Assembly.

(g) That under the organic law prevailing before the present Constitution went into effect,
each house of the legislature was respectively the sole judge of the elections, returns, and
qualifications of their elective members.

(h) That the present Constitution has transferred all the powers previously exercised by
the legislature with respect to contests relating to the elections, returns and qualifications
of its members, to the Electoral Commission.

(i) That such transfer of power from the legislature to the Electoral Commission was full,
clear and complete, and carried with it ex necesitate rei the implied power inter alia to
prescribe the rules and regulations as to the time and manner of filing protests.

( j) That the avowed purpose in creating the Electoral Commission was to have an
independent constitutional organ pass upon all contests relating to the election, returns
and qualifications of members of the National Assembly, devoid of partisan influence or
 consideration, which object would be frustrated if the National Assembly were to retain
the power to prescribe rules and regulations regarding the manner of conducting said
contests.

(k) That section 4 of article VI of the Constitution repealed not only section 18 of the
Jones Law making each house of the Philippine Legislature respectively the sole judge of
the elections, returns and qualifications of its elective members, but also section 478 of
Act No. 3387 empowering each house to prescribe by resolution the time and manner of
filing contests against the election of its members, the time and manner of notifying the
adverse party, and bond or bonds, to be required, if any, and to fix the costs and expenses
of contest.

(l) That confirmation by the National Assembly of the election is contested or not, is not
essential before such member-elect may discharge the duties and enjoy the privileges of a
member of the National Assembly.

(m) That confirmation by the National Assembly of the election of any member against
whom no protest had been filed prior to said confirmation, does not and cannot deprive
the Electoral Commission of its incidental power to prescribe the time within which
protests against the election of any member of the National Assembly should be filed.

We hold, therefore, that the Electoral Commission was acting within the legitimate exercise of its
constitutional prerogative in assuming to take cognizance of the protest filed by the respondent
Pedro Ynsua against the election of the herein petitioner Jose A. Angara, and that the resolution
of the National Assembly of December 3, 1935 can not in any manner toll the time for filing
protests against the elections, returns and qualifications of members of the National Assembly,
nor prevent the filing of a protest within such time as the rules of the Electoral Commission
might prescribe.

In view of the conclusion reached by us relative to the character of the Electoral Commission as
a constitutional creation and as to the scope and extent of its authority under the facts of the
present controversy, we deem it unnecessary to determine whether the Electoral Commission is
an inferior tribunal, corporation, board or person within the purview of sections 226 and 516 of
the Code of Civil Procedure.

The petition for a writ of prohibition against the Electoral Commission is hereby denied, with
costs against the petitioner. So ordered.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 88211 October 27, 1989

FERDINAND E. MARCOS, IMELDA R. MARCOS, FERDINAND R. MARCOS. JR.,

IRENE M. ARANETA, IMEE M. MANOTOC, TOMAS MANOTOC, GREGORIO
ARANETA, PACIFICO E. MARCOS, NICANOR YÑIGUEZ and PHILIPPINE
CONSTITUTION ASSOCIATION (PHILCONSA), represented by its President,
CONRADO F. ESTRELLA, petitioners,
vs.
HONORABLE RAUL MANGLAPUS, CATALINO MACARAIG, SEDFREY ORDOÑEZ,
MIRIAM DEFENSOR SANTIAGO, FIDEL RAMOS, RENATO DE VILLA, in their
capacity as Secretary of Foreign Affairs, Executive Secretary, Secretary of Justice,
Immigration Commissioner, Secretary of National Defense and Chief of Staff,
respectively, respondents.

RESOLUTION

EN BANC:

In its decision dated September 15,1989, the Court, by a vote of eight (8) to seven (7), dismissed
the petition, after finding that the President did not act arbitrarily or with grave abuse of
discretion in determining that the return of former President Marcos and his family at the present
time and under present circumstances pose a threat to national interest and welfare and in
prohibiting their return to the Philippines. On September 28, 1989, former President Marcos died
in Honolulu, Hawaii. In a statement, President Aquino said:

In the interest of the safety of those who will take the death of Mr. Marcos in
widely and passionately conflicting ways, and for the tranquility of the state and
order of society, the remains of Ferdinand E. Marcos will not be allowed to be
brought to our country until such time as the government, be it under this
administration or the succeeding one, shall otherwise decide. [Motion for
Reconsideration, p. 1; Rollo, p, 443.]

On October 2, 1989, a Motion for Reconsideration was filed by petitioners, raising the following
major arguments:

1. to bar former President Marcos and his family from returning to the Philippines is to deny
them not only the inherent right of citizens to return to their country of birth but also the
protection of the Constitution and all of the rights guaranteed to Filipinos under the Constitution;
2. the President has no power to bar a Filipino from his own country; if she has, she had
exercised it arbitrarily; and

3. there is no basis for barring the return of the family of former President Marcos. Thus,
petitioners prayed that the Court reconsider its decision, order respondents to issue the necessary
travel documents to enable Mrs. Imelda R. Marcos, Ferdinand R. Marcos, Jr., Irene M. Araneta,
Imee M. Manotoc, Tommy Manotoc and Gregorio Araneta to return to the Philippines, and
enjoin respondents from implementing President Aquino's decision to bar the return of the
remains of Mr. Marcos, and the other petitioners, to the Philippines.

Commenting on the motion for reconsideration, the Solicitor General argued that the motion for
reconsideration is moot and academic as to the deceased Mr. Marcos. Moreover, he asserts that
"the 'formal' rights being invoked by the Marcoses under the label 'right to return', including the
label 'return of Marcos' remains, is in reality or substance a 'right' to destabilize the country, a
'right' to hide the Marcoses' incessant shadowy orchestrated efforts at destabilization."
[Comment, p. 29.] Thus, he prays that the Motion for Reconsideration be denied for lack of
merit.

We deny the motion for reconsideration.

1. It must be emphasized that as in all motions for reconsideration, the burden is upon the
movants, petitioner herein, to show that there are compelling reasons to reconsider the decision
of the Court.

2. After a thorough consideration of the matters raised in the motion for reconsideration, the
Court is of the view that no compelling reasons have been established by petitioners to warrant a
reconsideration of the Court's decision.

The death of Mr. Marcos, although it may be viewed as a supervening event, has not changed the
factual scenario under which the Court's decision was rendered. The threats to the government,
to which the return of the Marcoses has been viewed to provide a catalytic effect, have not been
shown to have ceased. On the contrary, instead of erasing fears as to the destabilization that will
be caused by the return of the Marcoses, Mrs. Marcos reinforced the basis for the decision to bar
their return when she called President Aquino "illegal," claiming that it is Mr. Marcos, not Mrs.
Aquino, who is the "legal" President of the Philippines, and declared that the matter "should be
brought to all the courts of the world." [Comment, p. 1; Philippine Star, October 4, 1989.]

3. Contrary to petitioners' view, it cannot be denied that the President, upon whom executive
power is vested, has unstated residual powers which are implied from the grant of executive
power and which are necessary for her to comply with her duties under the Constitution. The
powers of the President are not limited to what are expressly enumerated in the article on the
Executive Department and in scattered provisions of the Constitution. This is so, notwithstanding
the avowed intent of the members of the Constitutional Commission of 1986 to limit the powers
of the President as a reaction to the abuses under the regime of Mr. Marcos, for the result was a
limitation of specific power of the President, particularly those relating to the commander-in-
chief clause, but not a diminution of the general grant of executive power.
That the President has powers other than those expressly stated in the Constitution is nothing
new. This is recognized under the U.S. Constitution from which we have patterned the
distribution of governmental powers among three (3) separate branches.

Article II, [section] 1, provides that "The Executive Power shall be vested in a
President of the United States of America." In Alexander Hamilton's widely
accepted view, this statement cannot be read as mere shorthand for the specific
executive authorizations that follow it in [sections] 2 and 3. Hamilton stressed the
difference between the sweeping language of article II, section 1, and the
conditional language of article I, [section] 1: "All legislative Powers herein
granted shall be vested in a Congress of the United States . . ." Hamilton
submitted that "[t]he [article III enumeration [in sections 2 and 31 ought therefore
to be considered, as intended merely to specify the principal articles implied in the
definition of execution power; leaving the rest to flow from the general grant of
that power, interpreted in confomity with other parts of the Constitution...

In Myers v. United States, the Supreme Court — accepted Hamilton's proposition,

concluding that the federal executive, unlike the Congress, could exercise power
from sources not enumerated, so long as not forbidden by the constitutional text:
the executive power was given in general terms, strengthened by specific terms
where emphasis was regarded as appropriate, and was limited by direct
expressions where limitation was needed. . ." The language of Chief Justice Taft
in Myers makes clear that the constitutional concept of inherent power is not a
synonym for power without limit; rather, the concept suggests only that not all
powers granted in the Constitution are themselves exhausted by internal
enumeration, so that, within a sphere properly regarded as one of "executive'
power, authority is implied unless there or elsewhere expressly limited. [TRIBE,
AMERICAN CONSTITUTIONAL LAW 158-159 (1978).]

And neither can we subscribe to the view that a recognition of the President's implied or residual
powers is tantamount to setting the stage for another dictatorship. Despite petitioners' strained
analogy, the residual powers of the President under the Constitution should not be confused with
the power of the President under the 1973 Constitution to legislate pursuant to Amendment No. 6
which provides:

Whenever in the judgment of the President (Prime Minister), there exists a grave
emergency or a threat or imminence thereof, or whenever the interim Batasang
Pambansa or the regular National Assembly fails or is unable to act adequately on
any matter for any reason that in his judgment requires immediate action, he may,
in order to meet the exigency, issue the necessary decrees, orders, or letters of
instruction, which shall form part of the law of the land,

There is no similarity between the residual powers of the President under the 1987 Constitution
and the power of the President under the 1973 Constitution pursuant to Amendment No. 6. First
of all, Amendment No. 6 refers to an express grant of power. It is not implied. Then, Amendment
No. 6 refers to a grant to the President of the specific power of legislation.
4. Among the duties of the President under the Constitution, in compliance with his (or her) oath
of office, is to protect and promote the interest and welfare of the people. Her decision to bar the
return of the Marcoses and subsequently, the remains of Mr. Marcos at the present time and
under present circumstances is in compliance with this bounden duty. In the absence of a clear
showing that she had acted with arbitrariness or with grave abuse of discretion in arriving at this
decision, the Court will not enjoin the implementation of this decision.

ACCORDINGLY, the Court resolved to DENY the Motion for Reconsideration for lack of
merit."
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 141284 August 15, 2000

INTEGRATED BAR OF THE PHILIPPINES, petitioner,

vs.
HON. RONALDO B. ZAMORA, GEN. PANFILO M. LACSON, GEN. EDGAR B.
AGLIPAY, and GEN. ANGELO REYES, respondents.

DECISION

KAPUNAN, J.:

At bar is a special civil action for certiorari and prohibition with prayer for issuance of a
temporary restraining order seeking to nullify on constitutional grounds the order of President
Joseph Ejercito Estrada commanding the deployment of the Philippine Marines (the "Marines")
to join the Philippine National Police (the "PNP") in visibility patrols around the metropolis.

In view of the alarming increase in violent crimes in Metro Manila, like robberies, kidnappings
and carnappings, the President, in a verbal directive, ordered the PNP and the Marines to conduct
joint visibility patrols for the purpose of crime prevention and suppression. The Secretary of
National Defense, the Chief of Staff of the Armed Forces of the Philippines (the "AFP"), the
Chief of the PNP and the Secretary of the Interior and Local Government were tasked to execute
and implement the said order. In compliance with the presidential mandate, the PNP Chief,
through Police Chief Superintendent Edgar B. Aglipay, formulated Letter of Instruction
02/20001 (the "LOI") which detailed the manner by which the joint visibility patrols, called Task
Force Tulungan, would be conducted.2 Task Force Tulungan was placed under the leadership of
the Police Chief of Metro Manila.

Subsequently, the President confirmed his previous directive on the deployment of the Marines
in a Memorandum, dated 24 January 2000, addressed to the Chief of Staff of the AFP and the
PNP Chief.3 In the Memorandum, the President expressed his desire to improve the peace and
order situation in Metro Manila through a more effective crime prevention program including
increased police patrols.4 The President further stated that to heighten police visibility in the
metropolis, augmentation from the AFP is necessary. 5 Invoking his powers as Commander-in-
Chief under Section 18, Article VII of the Constitution, the President directed the AFP Chief of
Staff and PNP Chief to coordinate with each other for the proper deployment and utilization of
the Marines to assist the PNP in preventing or suppressing criminal or lawless violence. 6 Finally,
the President declared that the services of the Marines in the anti-crime campaign are merely
temporary in nature and for a reasonable period only, until such time when the situation shall
have improved.7
The LOI explains the concept of the PNP-Philippine Marines joint visibility patrols as follows:

xxx

2. PURPOSE:

The Joint Implementing Police Visibility Patrols between the PNP NCRPO and the Philippine
Marines partnership in the conduct of visibility patrols in Metro Manila for the suppression of
crime prevention and other serious threats to national security.

3. SITUATION:

Criminal incidents in Metro Manila have been perpetrated not only by ordinary criminals but
also by organized syndicates whose members include active and former police/military
personnel whose training, skill, discipline and firepower prove well-above the present capability
of the local police alone to handle. The deployment of a joint PNP NCRPO-Philippine Marines
in the conduct of police visibility patrol in urban areas will reduce the incidence of crimes
specially those perpetrated by active or former police/military personnel.

4. MISSION:

The PNP NCRPO will organize a provisional Task Force to conduct joint NCRPO-PM visibility
patrols to keep Metro Manila streets crime-free, through a sustained street patrolling to
minimize or eradicate all forms of high-profile crimes especially those perpetrated by organized
crime syndicates whose members include those that are well-trained, disciplined and well-armed
active or former PNP/Military personnel.

5. CONCEPT IN JOINT VISIBILITY PATROL OPERATIONS:

a. The visibility patrols shall be conducted jointly by the NCRPO [National Capital
Regional Police Office] and the Philippine Marines to curb criminality in Metro Manila
and to preserve the internal security of the state against insurgents and other serious
threat to national security, although the primary responsibility over Internal Security
Operations still rests upon the AFP.

b. The principle of integration of efforts shall be applied to eradicate all forms of high-
profile crimes perpetrated by organized crime syndicates operating in Metro Manila.
This concept requires the military and police to work cohesively and unify efforts to
ensure a focused, effective and holistic approach in addressing crime prevention. Along
this line, the role of the military and police aside from neutralizing crime syndicates is to
bring a wholesome atmosphere wherein delivery of basic services to the people and
development is achieved. Hand-in-hand with this joint NCRPO-Philippine Marines
visibility patrols, local Police Units are responsible for the maintenance of peace and
order in their locality.
 c. To ensure the effective implementation of this project, a provisional Task Force
"TULUNGAN" shall be organized to provide the mechanism, structure, and procedures
for the integrated planning, coordinating, monitoring and assessing the security
situation.

xxx.8

The selected areas of deployment under the LOI are: Monumento Circle, North Edsa (SM City),
Araneta Shopping Center, Greenhills, SM Megamall, Makati Commercial Center, LRT/MRT
Stations and the NAIA and Domestic Airport.9

On 17 January 2000, the Integrated Bar of the Philippines (the "IBP") filed the instant petition to
annul LOI 02/2000 and to declare the deployment of the Philippine Marines, null and void and
unconstitutional, arguing that:

THE DEPLOYMENT OF THE PHILIPPINE MARINES IN METRO MANILA IS

VIOLATIVE OF THE CONSTITUTION, IN THAT:

A) NO EMERGENCY SITUATION OBTAINS IN METRO MANILA AS WOULD

JUSTIFY, EVEN ONLY REMOTELY, THE DEPLOYMENT OF SOLDIERS FOR
LAW ENFORCEMENT WORK; HENCE, SAID DEPLOYMENT IS IN
DEROGATION OF ARTICLE II, SECTION 3 OF THE CONSTITUTION;

B) SAID DEPLOYMENT CONSTITUTES AN INSIDIOUS INCURSION BY THE

MILITARY IN A CIVILIAN FUNCTION OF GOVERNMENT (LAW
ENFORCEMENT) IN DEROGATION OF ARTICLE XVI, SECTION 5 (4), OF THE
CONSTITUTION;

C) SAID DEPLOYMENT CREATES A DANGEROUS TENDENCY TO RELY ON

THE MILITARY TO PERFORM THE CIVILIAN FUNCTIONS OF THE
GOVERNMENT.

II

IN MILITARIZING LAW ENFORCEMENT IN METRO MANILA, THE

ADMINISTRATION IS UNWITTINGLY MAKING THE MILITARY MORE POWERFUL
THAN WHAT IT SHOULD REALLY BE UNDER THE CONSTITUTION.10

Asserting itself as the official organization of Filipino lawyers tasked with the bounden duty to
uphold the rule of law and the Constitution, the IBP questions the validity of the deployment and
utilization of the Marines to assist the PNP in law enforcement.
Without granting due course to the petition, the Court in a Resolution, 11 dated 25 January 2000,
required the Solicitor General to file his Comment on the petition. On 8 February 2000, the
Solicitor General submitted his Comment.

The Solicitor General vigorously defends the constitutionality of the act of the President in
deploying the Marines, contending, among others, that petitioner has no legal standing; that the
question of deployment of the Marines is not proper for judicial scrutiny since the same involves
a political question; that the organization and conduct of police visibility patrols, which feature
the team-up of one police officer and one Philippine Marine soldier, does not violate the civilian
supremacy clause in the Constitution.

The issues raised in the present petition are: (1) Whether or not petitioner has legal standing; (2)
Whether or not the President’s factual determination of the necessity of calling the armed forces
is subject to judicial review; and, (3) Whether or not the calling of the armed forces to assist the
PNP in joint visibility patrols violates the constitutional provisions on civilian supremacy over
the military and the civilian character of the PNP.

The petition has no merit.

First, petitioner failed to sufficiently show that it is in possession of the requisites of standing to
raise the issues in the petition. Second, the President did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction nor did he commit a violation of the civilian
supremacy clause of the Constitution.

The power of judicial review is set forth in Section 1, Article VIII of the Constitution, to wit:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable, and to determine whether or not there has
been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.

When questions of constitutional significance are raised, the Court can exercise its power of
judicial review only if the following requisites are complied with, namely: (1) the existence of an
actual and appropriate case; (2) a personal and substantial interest of the party raising the
constitutional question; (3) the exercise of judicial review is pleaded at the earliest opportunity;
and (4) the constitutional question is the lis mota of the case.12

The IBP has not sufficiently complied with the requisites of standing in this case.

"Legal standing" or locus standi has been defined as a personal and substantial interest in the
case such that the party has sustained or will sustain direct injury as a result of the governmental
act that is being challenged.13 The term "interest" means a material interest, an interest in issue
affected by the decree, as distinguished from mere interest in the question involved, or a mere
incidental interest.14 The gist of the question of standing is whether a party alleges "such personal
stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination of difficult constitutional
questions."15

In the case at bar, the IBP primarily anchors its standing on its alleged responsibility to uphold
the rule of law and the Constitution. Apart from this declaration, however, the IBP asserts no
other basis in support of its locus standi. The mere invocation by the IBP of its duty to preserve
the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with
standing in this case. This is too general an interest which is shared by other groups and the
whole citizenry. Based on the standards above-stated, the IBP has failed to present a specific and
substantial interest in the resolution of the case. Its fundamental purpose which, under Section 2,
Rule 139-A of the Rules of Court, is to elevate the standards of the law profession and to
improve the administration of justice is alien to, and cannot be affected by the deployment of the
Marines. It should also be noted that the interest of the National President of the IBP who signed
the petition, is his alone, absent a formal board resolution authorizing him to file the present
action. To be sure, members of the BAR, those in the judiciary included, have varying opinions
on the issue. Moreover, the IBP, assuming that it has duly authorized the National President to
file the petition, has not shown any specific injury which it has suffered or may suffer by virtue
of the questioned governmental act. Indeed, none of its members, whom the IBP purportedly
represents, has sustained any form of injury as a result of the operation of the joint visibility
patrols. Neither is it alleged that any of its members has been arrested or that their civil liberties
have been violated by the deployment of the Marines. What the IBP projects as injurious is the
supposed "militarization" of law enforcement which might threaten Philippine democratic
institutions and may cause more harm than good in the long run. Not only is the presumed
"injury" not personal in character, it is likewise too vague, highly speculative and uncertain to
satisfy the requirement of standing. Since petitioner has not successfully established a direct and
personal injury as a consequence of the questioned act, it does not possess the personality to
assail the validity of the deployment of the Marines. This Court, however, does not categorically
rule that the IBP has absolutely no standing to raise constitutional issues now or in the future.
The IBP must, by way of allegations and proof, satisfy this Court that it has sufficient stake to
obtain judicial resolution of the controversy.

Having stated the foregoing, it must be emphasized that this Court has the discretion to take
cognizance of a suit which does not satisfy the requirement of legal standing when paramount
interest is involved.16 In not a few cases, the Court has adopted a liberal attitude on the locus
standi of a petitioner where the petitioner is able to craft an issue of transcendental significance
to the people.17 Thus, when the issues raised are of paramount importance to the public, the Court
may brush aside technicalities of procedure.18 In this case, a reading of the petition shows that the
IBP has advanced constitutional issues which deserve the attention of this Court in view of their
seriousness, novelty and weight as precedents. Moreover, because peace and order are under
constant threat and lawless violence occurs in increasing tempo, undoubtedly aggravated by the
Mindanao insurgency problem, the legal controversy raised in the petition almost certainly will
not go away. It will stare us in the face again. It, therefore, behooves the Court to relax the rules
on standing and to resolve the issue now, rather than later.
The President did not commit grave abuse of discretion in calling out the Marines.

In the case at bar, the bone of contention concerns the factual determination of the President of
the necessity of calling the armed forces, particularly the Marines, to aid the PNP in visibility
patrols. In this regard, the IBP admits that the deployment of the military personnel falls under
the Commander-in-Chief powers of the President as stated in Section 18, Article VII of the
Constitution, specifically, the power to call out the armed forces to prevent or suppress lawless
violence, invasion or rebellion. What the IBP questions, however, is the basis for the calling of
the Marines under the aforestated provision. According to the IBP, no emergency exists that
would justify the need for the calling of the military to assist the police force. It contends that no
lawless violence, invasion or rebellion exist to warrant the calling of the Marines. Thus, the IBP
prays that this Court "review the sufficiency of the factual basis for said troop [Marine]
deployment."19

The Solicitor General, on the other hand, contends that the issue pertaining to the necessity of
calling the armed forces is not proper for judicial scrutiny since it involves a political question
and the resolution of factual issues which are beyond the review powers of this Court.

As framed by the parties, the underlying issues are the scope of presidential powers and limits,
and the extent of judicial review. But, while this Court gives considerable weight to the parties’
formulation of the issues, the resolution of the controversy may warrant a creative approach that
goes beyond the narrow confines of the issues raised. Thus, while the parties are in agreement
that the power exercised by the President is the power to call out the armed forces, the Court is of
the view that the power involved may be no more than the maintenance of peace and order and
promotion of the general welfare.20 For one, the realities on the ground do not show that there
exist a state of warfare, widespread civil unrest or anarchy. Secondly, the full brunt of the
military is not brought upon the citizenry, a point discussed in the latter part of this decision. In
the words of the late Justice Irene Cortes in Marcos v. Manglapus:

More particularly, this case calls for the exercise of the President’s powers as protector of the
peace. [Rossiter, The American Presidency]. The power of the President to keep the peace is not
limited merely to exercising the commander-in-chief powers in times of emergency or to leading
the State against external and internal threats to its existence. The President is not only clothed
with extraordinary powers in times of emergency, but is also tasked with attending to the day-to-
day problems of maintaining peace and order and ensuring domestic tranquility in times when no
foreign foe appears on the horizon. Wide discretion, within the bounds of law, in fulfilling
presidential duties in times of peace is not in any way diminished by the relative want of an
emergency specified in the commander-in-chief provision. For in making the President
commander-in-chief the enumeration of powers that follow cannot be said to exclude the
President’s exercising as Commander-in-Chief powers short of the calling of the armed forces, or
suspending the privilege of the writ of habeas corpus or declaring martial law, in order to keep
the peace, and maintain public order and security.

xxx21
Nonetheless, even if it is conceded that the power involved is the President’s power to call out
the armed forces to prevent or suppress lawless violence, invasion or rebellion, the resolution of
the controversy will reach a similar result.

We now address the Solicitor General’s argument that the issue involved is not susceptible to
review by the judiciary because it involves a political question, and thus, not justiciable.

As a general proposition, a controversy is justiciable if it refers to a matter which is appropriate

for court review.22 It pertains to issues which are inherently susceptible of being decided on
grounds recognized by law. Nevertheless, the Court does not automatically assume jurisdiction
over actual constitutional cases brought before it even in instances that are ripe for resolution.
One class of cases wherein the Court hesitates to rule on are "political questions." The reason is
that political questions are concerned with issues dependent upon the wisdom, not the legality, of
a particular act or measure being assailed. Moreover, the political question being a function of
the separation of powers, the courts will not normally interfere with the workings of another co-
equal branch unless the case shows a clear need for the courts to step in to uphold the law and the
Constitution.

As Tañada v. Cuenco23 puts it, political questions refer "to those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity, or in regard to which
full discretionary authority has been delegated to the legislative or executive branch of
government." Thus, if an issue is clearly identified by the text of the Constitution as matters for
discretionary action by a particular branch of government or to the people themselves then it is
held to be a political question. In the classic formulation of Justice Brennan in Baker v.
Carr,24 "[p]rominent on the surface of any case held to involve a political question is found a
textually demonstrable constitutional commitment of the issue to a coordinate political
department; or a lack of judicially discoverable and manageable standards for resolving it; or the
impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial
discretion; or the impossibility of a court’s undertaking independent resolution without
expressing lack of the respect due coordinate branches of government; or an unusual need for
unquestioning adherence to a political decision already made; or the potentiality of
embarassment from multifarious pronouncements by various departments on the one question."

The 1987 Constitution expands the concept of judicial review by providing that "(T)he Judicial
power shall be vested in one Supreme Court and in such lower courts as may be established by
law. Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the Government."25 Under this definition, the Court cannot
agree with the Solicitor General that the issue involved is a political question beyond the
jurisdiction of this Court to review. When the grant of power is qualified, conditional or subject
to limitations, the issue of whether the prescribed qualifications or conditions have been met or
the limitations respected, is justiciable - the problem being one of legality or validity, not its
wisdom.26 Moreover, the jurisdiction to delimit constitutional boundaries has been given to this
Court.27 When political questions are involved, the Constitution limits the determination as to
whether or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the official whose action is being questioned.28

By grave abuse of discretion is meant simply capricious or whimsical exercise of judgment that
is patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a
duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in
an arbitrary and despotic manner by reason of passion or hostility. 29 Under this definition, a court
is without power to directly decide matters over which full discretionary authority has been
delegated. But while this Court has no power to substitute its judgment for that of Congress or of
the President, it may look into the question of whether such exercise has been made in grave
abuse of discretion.30 A showing that plenary power is granted either department of government,
may not be an obstacle to judicial inquiry, for the improvident exercise or abuse thereof may
give rise to justiciable controversy.31

When the President calls the armed forces to prevent or suppress lawless violence, invasion or
rebellion, he necessarily exercises a discretionary power solely vested in his wisdom. This is
clear from the intent of the framers and from the text of the Constitution itself. The Court, thus,
cannot be called upon to overrule the President’s wisdom or substitute its own. However, this
does not prevent an examination of whether such power was exercised within permissible
constitutional limits or whether it was exercised in a manner constituting grave abuse of
discretion. In view of the constitutional intent to give the President full discretionary power to
determine the necessity of calling out the armed forces, it is incumbent upon the petitioner to
show that the President’s decision is totally bereft of factual basis. The present petition fails to
discharge such heavy burden as there is no evidence to support the assertion that there exist no
justification for calling out the armed forces. There is, likewise, no evidence to support the
proposition that grave abuse was committed because the power to call was exercised in such a
manner as to violate the constitutional provision on civilian supremacy over the military. In the
performance of this Court’s duty of "purposeful hesitation"32 before declaring an act of another
branch as unconstitutional, only where such grave abuse of discretion is clearly shown shall the
Court interfere with the President’s judgment. To doubt is to sustain.

There is a clear textual commitment under the Constitution to bestow on the President full
discretionary power to call out the armed forces and to determine the necessity for the exercise of
such power. Section 18, Article VII of the Constitution, which embodies the powers of the
President as Commander-in-Chief, provides in part:

The President shall be the Commander-in-Chief of all armed forces of the Philippines and
whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless
violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires
it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas
corpus, or place the Philippines or any part thereof under martial law.

xxx
The full discretionary power of the President to determine the factual basis for the exercise of the
calling out power is also implied and further reinforced in the rest of Section 18, Article VII
which reads, thus:

xxx

Within forty-eight hours from the proclamation of martial law or the suspension of the privilege
of the writ of habeas corpus, the President shall submit a report in person or in writing to the
Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in
regular or special session, may revoke such proclamation or suspension, which revocation shall
not be set aside by the President. Upon the initiative of the President, the Congress may, in the
same manner, extend such proclamation or suspension for a period to be determined by the
Congress, if the invasion or rebellion shall persist and public safety requires it.

The Congress, if not in session, shall within twenty-four hours following such proclamation or
suspension, convene in accordance with its rules without need of a call.

The Supreme Court may review, in an appropriate proceeding filed by any citizen, the
sufficiency of the factual basis of the proclamation of martial law or the suspension of the
privilege of the writ or the extension thereof, and must promulgate its decision thereon within
thirty days from its filing.

A state of martial law does not suspend the operation of the Constitution, nor supplant the
functioning of the civil courts or legislative assemblies, nor authorize the conferment of
jurisdiction on military courts and agencies over civilians where civil courts are able to function,
nor automatically suspend the privilege of the writ.

The suspension of the privilege of the writ shall apply only to persons judicially charged for
rebellion or offenses inherent in or directly connected with invasion.

During the suspension of the privilege of the writ, any person thus arrested or detained shall be
judicially charged within three days, otherwise he shall be released.

Under the foregoing provisions, Congress may revoke such proclamation or suspension and the
Court may review the sufficiency of the factual basis thereof. However, there is no such
equivalent provision dealing with the revocation or review of the President’s action to call out
the armed forces. The distinction places the calling out power in a different category from the
power to declare martial law and the power to suspend the privilege of the writ of habeas corpus,
otherwise, the framers of the Constitution would have simply lumped together the three powers
and provided for their revocation and review without any qualification. Expressio unius est
exclusio alterius. Where the terms are expressly limited to certain matters, it may not, by
interpretation or construction, be extended to other matters. 33 That the intent of the Constitution
is exactly what its letter says, i.e., that the power to call is fully discretionary to the President, is
extant in the deliberation of the Constitutional Commission, to wit:
FR. BERNAS. It will not make any difference. I may add that there is a graduated power of the
President as Commander-in-Chief. First, he can call out such Armed Forces as may be necessary
to suppress lawless violence; then he can suspend the privilege of the writ of habeas corpus, then
he can impose martial law. This is a graduated sequence.

When he judges that it is necessary to impose martial law or suspend the privilege of the writ
of habeas corpus, his judgment is subject to review. We are making it subject to review by the
Supreme Court and subject to concurrence by the National Assembly. But when he exercises this
lesser power of calling on the Armed Forces, when he says it is necessary, it is my opinion that
his judgment cannot be reviewed by anybody.

xxx

FR. BERNAS. Let me just add that when we only have imminent danger, the matter can be
handled by the first sentence: "The President may call out such armed forces to prevent or
suppress lawless violence, invasion or rebellion." So we feel that that is sufficient for handling
imminent danger.

MR. DE LOS REYES. So actually, if a President feels that there is imminent danger, the matter
can be handled by the First Sentence: "The President....may call out such Armed Forces to
prevent or suppress lawless violence, invasion or rebellion." So we feel that that is sufficient for
handling imminent danger, of invasion or rebellion, instead of imposing martial law or
suspending the writ of habeas corpus, he must necessarily have to call the Armed Forces of the
Philippines as their Commander-in-Chief. Is that the idea?

MR. REGALADO. That does not require any concurrence by the legislature nor is it subject to
judicial review.34

The reason for the difference in the treatment of the aforementioned powers highlights the intent
to grant the President the widest leeway and broadest discretion in using the power to call out
because it is considered as the lesser and more benign power compared to the power to suspend
the privilege of the writ of habeas corpus and the power to impose martial law, both of which
involve the curtailment and suppression of certain basic civil rights and individual freedoms, and
thus necessitating safeguards by Congress and review by this Court.

Moreover, under Section 18, Article VII of the Constitution, in the exercise of the power to
suspend the privilege of the writ of habeas corpus or to impose martial law, two conditions must
concur: (1) there must be an actual invasion or rebellion and, (2) public safety must require it.
These conditions are not required in the case of the power to call out the armed forces. The only
criterion is that "whenever it becomes necessary," the President may call the armed forces "to
prevent or suppress lawless violence, invasion or rebellion." The implication is that the President
is given full discretion and wide latitude in the exercise of the power to call as compared to the
two other powers.

If the petitioner fails, by way of proof, to support the assertion that the President acted without
factual basis, then this Court cannot undertake an independent investigation beyond the
pleadings. The factual necessity of calling out the armed forces is not easily quantifiable and
cannot be objectively established since matters considered for satisfying the same is a
combination of several factors which are not always accessible to the courts. Besides the absence
of textual standards that the court may use to judge necessity, information necessary to arrive at
such judgment might also prove unmanageable for the courts. Certain pertinent information
might be difficult to verify, or wholly unavailable to the courts. In many instances, the evidence
upon which the President might decide that there is a need to call out the armed forces may be of
a nature not constituting technical proof.

On the other hand, the President as Commander-in-Chief has a vast intelligence network to
gather information, some of which may be classified as highly confidential or affecting the
security of the state. In the exercise of the power to call, on-the-spot decisions may be
imperatively necessary in emergency situations to avert great loss of human lives and mass
destruction of property. Indeed, the decision to call out the military to prevent or suppress
lawless violence must be done swiftly and decisively if it were to have any effect at all. Such a
scenario is not farfetched when we consider the present situation in Mindanao, where the
insurgency problem could spill over the other parts of the country. The determination of the
necessity for the calling out power if subjected to unfettered judicial scrutiny could be a veritable
prescription for disaster, as such power may be unduly straitjacketed by an injunction or a
temporary restraining order every time it is exercised.

Thus, it is the unclouded intent of the Constitution to vest upon the President, as Commander-in-
Chief of the Armed Forces, full discretion to call forth the military when in his judgment it is
necessary to do so in order to prevent or suppress lawless violence, invasion or rebellion. Unless
the petitioner can show that the exercise of such discretion was gravely abused, the President’s
exercise of judgment deserves to be accorded respect from this Court.

The President has already determined the necessity and factual basis for calling the armed forces.
In his Memorandum, he categorically asserted that, "[V]iolent crimes like bank/store robberies,
holdups, kidnappings and carnappings continue to occur in Metro Manila..."35 We do not doubt
the veracity of the President’s assessment of the situation, especially in the light of present
developments. The Court takes judicial notice of the recent bombings perpetrated by lawless
elements in the shopping malls, public utilities, and other public places. These are among the
areas of deployment described in the LOI 2000. Considering all these facts, we hold that the
President has sufficient factual basis to call for military aid in law enforcement and in the
exercise of this constitutional power.

The deployment of the Marines does not violate the civilian supremacy clause nor does it
infringe the civilian character of the police force.

Prescinding from its argument that no emergency situation exists to justify the calling of the
Marines, the IBP asserts that by the deployment of the Marines, the civilian task of law
enforcement is "militarized" in violation of Section 3, Article II 36 of the Constitution.

We disagree. The deployment of the Marines does not constitute a breach of the civilian
supremacy clause. The calling of the Marines in this case constitutes permissible use of military
assets for civilian law enforcement. The participation of the Marines in the conduct of joint
visibility patrols is appropriately circumscribed. The limited participation of the Marines is
evident in the provisions of the LOI itself, which sufficiently provides the metes and bounds of
the Marines’ authority. It is noteworthy that the local police forces are the ones in charge of the
visibility patrols at all times, the real authority belonging to the PNP. In fact, the Metro Manila
Police Chief is the overall leader of the PNP-Philippine Marines joint visibility patrols.37 Under
the LOI, the police forces are tasked to brief or orient the soldiers on police patrol
procedures.38 It is their responsibility to direct and manage the deployment of the Marines. 39 It is,
likewise, their duty to provide the necessary equipment to the Marines and render logistical
support to these soldiers.40 In view of the foregoing, it cannot be properly argued that military
authority is supreme over civilian authority. Moreover, the deployment of the Marines to assist
the PNP does not unmake the civilian character of the police force. Neither does it amount to an
"insidious incursion" of the military in the task of law enforcement in violation of Section 5(4),
Article XVI of the Constitution.41

In this regard, it is not correct to say that General Angelo Reyes, Chief of Staff of the AFP, by
his alleged involvement in civilian law enforcement, has been virtually appointed to a civilian
post in derogation of the aforecited provision. The real authority in these operations, as stated in
the LOI, is lodged with the head of a civilian institution, the PNP, and not with the military. Such
being the case, it does not matter whether the AFP Chief actually participates in the Task
Force Tulungan since he does not exercise any authority or control over the same. Since none of
the Marines was incorporated or enlisted as members of the PNP, there can be no appointment to
civilian position to speak of. Hence, the deployment of the Marines in the joint visibility patrols
does not destroy the civilian character of the PNP.

Considering the above circumstances, the Marines render nothing more than assistance required
in conducting the patrols. As such, there can be no "insidious incursion" of the military in
civilian affairs nor can there be a violation of the civilian supremacy clause in the Constitution.

It is worth mentioning that military assistance to civilian authorities in various forms persists in
Philippine jurisdiction. The Philippine experience reveals that it is not averse to requesting the
assistance of the military in the implementation and execution of certain traditionally "civil"
functions. As correctly pointed out by the Solicitor General, some of the multifarious activities
wherein military aid has been rendered, exemplifying the activities that bring both the civilian
and the military together in a relationship of cooperation, are:

1. Elections;42

2. Administration of the Philippine National Red Cross;43

3. Relief and rescue operations during calamities and disasters;44

4. Amateur sports promotion and development;45

5. Development of the culture and the arts;46

 6. Conservation of natural resources;47

7. Implementation of the agrarian reform program;48

8. Enforcement of customs laws;49

9. Composite civilian-military law enforcement activities;50

10. Conduct of licensure examinations;51

11. Conduct of nationwide tests for elementary and high school students;52

12. Anti-drug enforcement activities;53

13. Sanitary inspections;54

14. Conduct of census work;55

15. Administration of the Civil Aeronautics Board;56

16. Assistance in installation of weather forecasting devices;57

17. Peace and order policy formulation in local government units. 58

This unquestionably constitutes a gloss on executive power resulting from a systematic,

unbroken, executive practice, long pursued to the knowledge of Congress and, yet, never before
questioned.59 What we have here is mutual support and cooperation between the military and
civilian authorities, not derogation of civilian supremacy.

In the United States, where a long tradition of suspicion and hostility towards the use of military
force for domestic purposes has persisted,60 and whose Constitution, unlike ours, does not
expressly provide for the power to call, the use of military personnel by civilian law enforcement
officers is allowed under circumstances similar to those surrounding the present deployment of
the Philippine Marines. Under the Posse Comitatus Act61 of the US, the use of the military in
civilian law enforcement is generally prohibited, except in certain allowable circumstances. A
provision of the Act states:

§ 1385. Use of Army and Air Force as posse comitatus

Whoever, except in cases and under circumstances expressly authorized by the Constitution or
Act of Congress, willfully uses any part of the Army or the Air Force as posse comitatus or
otherwise to execute the laws shall be fined not more than $10,000 or imprisoned not more than
two years, or both.62

To determine whether there is a violation of the Posse Comitatus Act in the use of military
personnel, the US courts63 apply the following standards, to wit:
Were Army or Air Force personnel used by the civilian law enforcement officers at Wounded
Knee in such a manner that the military personnel subjected the citizens to the exercise of
military power which was regulatory, proscriptive, or compulsory64 George Washington Law
Review, pp. 404-433 (1986), which discusses the four divergent standards for assessing
acceptable involvement of military personnel in civil law enforcement. See likewise HONORED
IN THE BREECH: PRESIDENTIAL AUTHORITY TO EXECUTE THE LAWS WITH
MILITARY FORCE, 83 Yale Law Journal, pp. 130-152, 1973. 64 in nature, either presently or
prospectively?

xxx

When this concept is transplanted into the present legal context, we take it to mean that military
involvement, even when not expressly authorized by the Constitution or a statute, does not
violate the Posse Comitatus Act unless it actually regulates, forbids or compels some conduct on
the part of those claiming relief.1âwphi1 A mere threat of some future injury would be
insufficient. (emphasis supplied)

Even if the Court were to apply the above rigid standards to the present case to determine
whether there is permissible use of the military in civilian law enforcement, the conclusion is
inevitable that no violation of the civilian supremacy clause in the Constitution is committed. On
this point, the Court agrees with the observation of the Solicitor General:

3. The designation of tasks in Annex A65 does not constitute the exercise of regulatory,
proscriptive, or compulsory military power. First, the soldiers do not control or direct the
operation. This is evident from Nos. 6,66 8(k)67 and 9(a)68 of Annex A. These soldiers, second,
also have no power to prohibit or condemn. In No. 9(d)69 of Annex A, all arrested persons are
brought to the nearest police stations for proper disposition. And last, these soldiers apply no
coercive force. The materials or equipment issued to them, as shown in No. 8(c)70 of Annex A,
are all low impact and defensive in character. The conclusion is that there being no exercise of
regulatory, proscriptive or compulsory military power, the deployment of a handful of Philippine
Marines constitutes no impermissible use of military power for civilian law enforcement. 71

It appears that the present petition is anchored on fear that once the armed forces are deployed,
the military will gain ascendancy, and thus place in peril our cherished liberties. Such
apprehensions, however, are unfounded. The power to call the armed forces is just that - calling
out the armed forces. Unless, petitioner IBP can show, which it has not, that in the deployment of
the Marines, the President has violated the fundamental law, exceeded his authority or
jeopardized the civil liberties of the people, this Court is not inclined to overrule the President’s
determination of the factual basis for the calling of the Marines to prevent or suppress lawless
violence.

One last point. Since the institution of the joint visibility patrol in January, 2000, not a single
citizen has complained that his political or civil rights have been violated as a result of the
deployment of the Marines. It was precisely to safeguard peace, tranquility and the civil liberties
of the people that the joint visibility patrol was conceived. Freedom and democracy will be in
full bloom only when people feel secure in their homes and in the streets, not when the shadows
of violence and anarchy constantly lurk in their midst.

WHEREFORE, premises considered, the petition is hereby DISMISSED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 178552 October 5, 2010

SOUTHERN HEMISPHERE ENGAGEMENT NETWORK, INC., on behalf of the South-

South Network (SSN) for Non-State Armed Group Engagement, and ATTY. SOLIMAN
M. SANTOS, JR., Petitioners,
vs.
ANTI-TERRORISM COUNCIL, THE EXECUTIVE SECRETARY, THE SECRETARY
OF JUSTICE, THE SECRETARY OF FOREIGN AFFAIRS, THE SECRETARY OF
NATIONAL DEFENSE, THE SECRETARY OF THE INTERIOR AND LOCAL
GOVERNMENT, THE SECRETARY OF FINANCE, THE NATIONAL SECURITY
ADVISER, THE CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES,
AND THE CHIEF OF THE PHILIPPINE NATIONAL POLICE, Respondents.

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

G.R. No. 178554

KILUSANG MAYO UNO (KMU), represented by its Chairperson Elmer Labog,

NATIONAL FEDERATION OF LABOR UNIONS-KILUSANG MAYO UNO (NAFLU-
KMU), represented by its National President Joselito V. Ustarez and Secretary General
Antonio C. Pascual, and CENTER FOR TRADE UNION AND HUMAN RIGHTS,
represented by its Executive Director Daisy Arago, Petitioners,
vs.
HON. EDUARDO ERMITA, in his capacity as Executive Secretary, NORBERTO
GONZALES, in his capacity as Acting Secretary of National Defense, HON. RAUL
GONZALES, in his capacity as Secretary of Justice, HON. RONALDO PUNO, in his
capacity as Secretary of the Interior and Local Government, GEN. HERMOGENES
ESPERON, in his capacity as AFP Chief of Staff, and DIRECTOR GENERAL OSCAR
CALDERON, in his capacity as PNP Chief of Staff, Respondents.

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

G.R. No. 178581

BAGONG ALYANSANG MAKABAYAN (BAYAN), GENERAL ALLIANCE BINDING

WOMEN FOR REFORMS, INTEGRITY, EQUALITY, LEADERSHIP AND ACTION
(GABRIELA), KILUSANG MAGBUBUKID NG PILIPINAS (KMP), MOVEMENT OF
CONCERNED CITIZENS FOR CIVIL LIBERTIES (MCCCL), CONFEDERATION
FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT
EMPLOYEES (COURAGE), KALIPUNAN NG DAMAYANG MAHIHIRAP
(KADAMAY), SOLIDARITY OF CAVITE WORKERS, LEAGUE OF FILIPINO
STUDENTS (LFS), ANAKBAYAN, PAMBANSANG LAKAS NG KILUSANG
MAMAMALAKAYA (PAMALAKAYA), ALLIANCE OF CONCERNED TEACHERS
(ACT), MIGRANTE, HEALTH ALLIANCE FOR DEMOCRACY (HEAD), AGHAM,
TEOFISTO GUINGONA, JR., DR. BIENVENIDO LUMBERA, RENATO
CONSTANTINO, JR., SISTER MARY JOHN MANANSAN OSB, DEAN CONSUELO
PAZ, ATTY. JOSEFINA LICHAUCO, COL. GERRY CUNANAN (ret.), CARLITOS
SIGUION-REYNA, DR. CAROLINA PAGADUAN-ARAULLO, RENATO REYES,
DANILO RAMOS, EMERENCIANA DE LESUS, RITA BAUA, REY CLARO
CASAMBRE, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-
Chief, EXECUTIVE SECRETARY EDUARDO ERMITA, DEPARTMENT OF JUSTICE
SECRETARY RAUL GONZALES, DEPARTMENT OF FOREIGN AFFAIRS
SECRETARY ALBERTO ROMULO, DEPARTMENT OF NATIONAL DEFENSE
ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF INTERIOR
AND LOCAL GOVERNMENT SECRETARY RONALDO PUNO. DEPARTMENT OF
FINANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER
NORBERTO GONZALES, THE NATIONAL INTELLIGENCE COORDINATING
AGENCY (NICA), THE NATIONAL BUREAU OF INVESTIGATION (NBI), THE
BUREAU OF IMMIGRATION, THE OFFICE OF CIVIL DEFENSE, THE
INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE PHILIPPINES
(ISAFP), THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE
CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE
NATIONAL POLICE GEN. OSCAR CALDERON, THE PNP, including its intelligence
and investigative elements, AFP CHIEF GEN. HERMOGENES ESPERON, Respondents.

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

G.R. No. 178890

KARAPATAN, ALLIANCE FOR THE ADVANCEMENT OF PEOPLE'S RIGHTS,

represented herein by Dr. Edelina de la Paz, and representing the following organizations:
HUSTISYA, represented by Evangeline Hernandez and also on her own behalf;
DESAPARECIDOS, represented by Mary Guy Portajada and also on her own behalf,
SAMAHAN NG MGA EX-DETAINEES LABAN SA DETENSYON AT PARA SA
AMNESTIYA (SELDA), represented by Donato Continente and also on his own behalf,
ECUMENICAL MOVEMENT FOR JUSTICE AND PEACE (EMJP), represented by
Bishop Elmer M. Bolocon, UCCP, and PROMOTION OF CHURCH PEOPLE'S
RESPONSE, represented by Fr. Gilbert Sabado, OCARM, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-
Chief, EXECUTIVE SECRETARTY EDUARDO ERMITA, DEPARTMENT OF
JUSTICE SECRETARY RAUL GONZALEZ, DEPARTMENT OF FOREIGN AFFAIRS
SECRETARY ALBERTO ROMULO, DEPARTMENT OF NATIONAL DEFENSE
ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF INTERIOR
AND LOCAL GOVERNMENT SECRETARY RONALDO PUNO, DEPARTMENT OF
FINANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER
NORBERTO GONZALES, THE NATIONAL INTELLIGENCE COORDINATING
AGENCY (NICA), THE NATIONAL BUREAU OF INVESTIGATION (NBI), THE
BUREAU OF IMMIGRATION, THE OFFICE OF CIVIL DEFENSE, THE
INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE PHILIPPINES
(ISAFP), THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE
CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE
NATIONAL POLICE GEN. OSCAR CALDERON, THE PNP, including its intelligence
and investigative elements, AFP CHIEF GEN. HERMOGENES ESPERON, Respondents.

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

G.R. No. 179157

THE INTEGRATED BAR OF THE PHILIPPINES (IBP), represented by Atty. Feliciano

M. Bautista, COUNSELS FOR THE DEFENSE OF LIBERTY (CODAL), SEN. MA. ANA
CONSUELO A.S. MADRIGAL and FORMER SENATORS SERGIO OSMEÑA III and
WIGBERTO E. TAÑADA, Petitioners,
vs.
EXECUTIVE SECRETARY EDUARDO ERMITA AND THE MEMBERS OF THE
ANTI-TERRORISM COUNCIL (ATC), Respondents.

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

G.R. No. 179461

BAGONG ALYANSANG MAKABAYAN-SOUTHERN TAGALOG (BAYAN-ST),

GABRIELA-ST, KATIPUNAN NG MGA SAMAHYANG MAGSASAKA-TIMOG
KATAGALUGAN (KASAMA-TK), MOVEMENT OF CONCERNED CITIZENS FOR
CIVIL LIBERTIES (MCCCL), PEOPLES MARTYRS, ANAKBAYAN-ST,
PAMALAKAYA-ST, CONFEDERATION FOR UNITY, RECOGNITION AND
ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE-ST),
PAGKAKAISA'T UGNAYAN NG MGA MAGBUBUKID SA LAGUNA (PUMALAG),
SAMAHAN NG MGA MAMAMAYAN SA TABING RILES (SMTR-ST), LEAGUE OF
FILIPINO STUDENTS (LFS), BAYAN MUNA-ST, KONGRESO NG MGA
MAGBUBUKID PARA SA REPORMANG AGRARYO KOMPRA, BIGKIS AT LAKAS
NG MGA KATUTUBO SA TIMOG KATAGALUGAN (BALATIK), SAMAHAN AT
UGNAYAN NG MGA MAGSASAKANG KABABAIHAN SA TIMOG KATAGALUGAN
(SUMAMAKA-TK), STARTER, LOSÑOS RURAL POOR ORGANIZATION FOR
PROGRESS & EQUALITY, CHRISTIAN NIÑO LAJARA, TEODORO REYES,
FRANCESCA B. TOLENTINO, JANNETTE E. BARRIENTOS, OSCAR T. LAPIDA, JR.,
DELFIN DE CLARO, SALLY P. ASTRERA, ARNEL SEGUNE BELTRAN, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity as President and Commander-in-
Chief, EXECUTIVE SECRETARY EDUARDO ERMITA, DEPARTMENT OF JUSTICE
SECRETARY RAUL GONZALEZ, DEPARTMENT OF FOREIGN AFFAIRS
SECRETARY ALBERTO ROMULO, DEPARTMENT OF NATIONAL DEFENSE
ACTING SECRETARY NORBERTO GONZALES, DEPARTMENT OF INTERIOR
AND LOCAL GOVERNMEN T SECRETARY RONALDO PUNO, DEPARTMENT OF
FINCANCE SECRETARY MARGARITO TEVES, NATIONAL SECURITY ADVISER
NORBERTO GONZALES, THE NATIONAL INTELLIGENCE COORDINATING
AGENCY (NICA), THE NATIONAL BUREAU OF INVESTIGATION (NBI), THE
BUREAU OF IMMIGRATION, THE OFFICE OF CIVIL DEFENSE, THE
INTELLIGENCE SERVICE OF THE ARMED FORCES OF THE PHILIPPINES
(ISAFP), THE ANTI-MONEY LAUNDERING COUNCIL (AMLC), THE PHILIPPINE
CENTER ON TRANSNATIONAL CRIME, THE CHIEF OF THE PHILIPPINE
NATIONAL POLICE GEN. OSCAR CALDERON, THE PNP, including its intelligence
and investigative elements, AFP CHIEF GEN. HERMOGENES ESPERON, Respondents.

DECISION

CARPIO MORALES, J.:

Before the Court are six petitions challenging the constitutionality of Republic Act No. 9372
(RA 9372), "An Act to Secure the State and Protect our People from Terrorism," otherwise
known as the Human Security Act of 2007,1 signed into law on March 6, 2007.

Following the effectivity of RA 9372 on July 15, 2007,2 petitioner Southern Hemisphere
Engagement Network, Inc., a non-government organization, and Atty. Soliman Santos, Jr., a
concerned citizen, taxpayer and lawyer, filed a petition for certiorari and prohibition on July 16,
2007 docketed as G.R. No. 178552. On even date, petitioners Kilusang Mayo Uno (KMU),
National Federation of Labor Unions-Kilusang Mayo Uno (NAFLU-KMU), and Center for
Trade Union and Human Rights (CTUHR), represented by their respective officers3 who are also
bringing the action in their capacity as citizens, filed a petition for certiorari and prohibition
docketed as G.R. No. 178554.

The following day, July 17, 2007, organizations Bagong Alyansang Makabayan (BAYAN),
General Alliance Binding Women for Reforms, Integrity, Equality, Leadership and Action
(GABRIELA), Kilusang Magbubukid ng Pilipinas (KMP), Movement of Concerned Citizens for
Civil Liberties (MCCCL), Confederation for Unity, Recognition and Advancement of
Government Employees (COURAGE), Kalipunan ng Damayang Mahihirap (KADAMAY),
Solidarity of Cavite Workers (SCW), League of Filipino Students (LFS), Anakbayan,
Pambansang Lakas ng Kilusang Mamamalakaya (PAMALAKAYA), Alliance of Concerned
Teachers (ACT), Migrante, Health Alliance for Democracy (HEAD), and Agham, represented by
their respective officers,4 and joined by concerned citizens and taxpayers Teofisto Guingona, Jr.,
Dr. Bienvenido Lumbera, Renato Constantino, Jr., Sister Mary John Manansan, OSB, Dean
Consuelo Paz, Atty. Josefina Lichauco, Retired Col. Gerry Cunanan, Carlitos Siguion-Reyna, Dr.
Carolina Pagaduan-Araullo, Renato Reyes, Danilo Ramos, Emerenciana de Jesus, Rita Baua and
Rey Claro Casambre filed a petition for certiorari and prohibition docketed as G.R. No. 178581.
On August 6, 2007, Karapatan and its alliance member organizations Hustisya, Desaparecidos,
Samahan ng mga Ex-Detainees Laban sa Detensyon at para sa Amnestiya (SELDA), Ecumenical
Movement for Justice and Peace (EMJP), and Promotion of Church People’s Response (PCPR),
which were represented by their respective officers5 who are also bringing action on their own
behalf, filed a petition for certiorari and prohibition docketed as G.R. No. 178890.

On August 29, 2007, the Integrated Bar of the Philippines (IBP), Counsels for the Defense of
Liberty (CODAL),6 Senator Ma. Ana Consuelo A.S. Madrigal, Sergio Osmeña III, and Wigberto
E. Tañada filed a petition for certiorari and prohibition docketed as G.R. No. 179157.

Bagong Alyansang Makabayan-Southern Tagalog (BAYAN-ST), other regional chapters and

organizations mostly based in the Southern Tagalog Region,7 and individuals8 followed suit by
filing on September 19, 2007 a petition for certiorari and prohibition docketed as G.R. No.
179461 that replicates the allegations raised in the BAYAN petition in G.R. No. 178581.

Impleaded as respondents in the various petitions are the Anti-Terrorism Council9 composed of,
at the time of the filing of the petitions, Executive Secretary Eduardo Ermita as Chairperson,
Justice Secretary Raul Gonzales as Vice Chairperson, and Foreign Affairs Secretary Alberto
Romulo, Acting Defense Secretary and National Security Adviser Norberto Gonzales, Interior
and Local Government Secretary Ronaldo Puno, and Finance Secretary Margarito Teves as
members. All the petitions, except that of the IBP, also impleaded Armed Forces of the
Philippines (AFP) Chief of Staff Gen. Hermogenes Esperon and Philippine National Police
(PNP) Chief Gen. Oscar Calderon.

The Karapatan, BAYAN and BAYAN-ST petitions likewise impleaded President Gloria
Macapagal-Arroyo and the support agencies for the Anti-Terrorism Council like the National
Intelligence Coordinating Agency, National Bureau of Investigation, Bureau of Immigration,
Office of Civil Defense, Intelligence Service of the AFP, Anti-Money Laundering Center,
Philippine Center on Transnational Crime, and the PNP intelligence and investigative elements.

The petitions fail.

Petitioners’ resort to certiorari is improper

Preliminarily, certiorari does not lie against respondents who do not exercise judicial or quasi-
judicial functions. Section 1, Rule 65 of the Rules of Court is clear:

Section 1. Petition for certiorari.—When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any
plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and justice may require. (Emphasis and underscoring
supplied)
Parenthetically, petitioners do not even allege with any modicum of particularity how
respondents acted without or in excess of their respective jurisdictions, or with grave abuse of
discretion amounting to lack or excess of jurisdiction.

The impropriety of certiorari as a remedy aside, the petitions fail just the same.

In constitutional litigations, the power of judicial review is limited by four exacting requisites,
viz: (a) there must be an actual case or controversy; (b) petitioners must possess locus standi; (c)
the question of constitutionality must be raised at the earliest opportunity; and (d) the issue of
constitutionality must be the lis mota of the case. 10

In the present case, the dismal absence of the first two requisites, which are the most essential,
renders the discussion of the last two superfluous.

Petitioners lack locus standi

Locus standi or legal standing requires a personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions. 11

Anak Mindanao Party-List Group v. The Executive Secretary12 summarized the rule on locus
standi, thus:

Locus standi or legal standing has been defined as a personal and substantial interest in a case
such that the party has sustained or will sustain direct injury as a result of the governmental act
that is being challenged. The gist of the question on standing is whether a party alleges such
personal stake in the outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for illumination of difficult
constitutional questions.

[A] party who assails the constitutionality of a statute must have a direct and personal interest. It
must show not only that the law or any governmental act is invalid, but also that it sustained or is
in immediate danger of sustaining some direct injury as a result of its enforcement, and not
merely that it suffers thereby in some indefinite way. It must show that it has been or is about to
be denied some right or privilege to which it is lawfully entitled or that it is about to be subjected
to some burdens or penalties by reason of the statute or act complained of.

For a concerned party to be allowed to raise a constitutional question, it must show that (1) it
has personally suffered some actual or threatened injury as a result of the allegedly illegal
conduct of the government, (2) the injury is fairly traceable to the challenged action, and (3) the
injury is likely to be redressed by a favorable action. (emphasis and underscoring supplied.)

Petitioner-organizations assert locus standi on the basis of being suspected "communist fronts"
by the government, especially the military; whereas individual petitioners invariably invoke the
"transcendental importance" doctrine and their status as citizens and taxpayers.
While Chavez v. PCGG13 holds that transcendental public importance dispenses with the
requirement that petitioner has experienced or is in actual danger of suffering direct and personal
injury, cases involving the constitutionality of penal legislation belong to an altogether different
genus of constitutional litigation. Compelling State and societal interests in the proscription of
harmful conduct, as will later be elucidated, necessitate a closer judicial scrutiny of locus standi.

Petitioners have not presented any personal stake in the outcome of the controversy. None of
them faces any charge under RA 9372.

KARAPATAN, Hustisya, Desaparecidos, SELDA, EMJP and PCR, petitioners in G.R. No.
178890, allege that they have been subjected to "close security surveillance by state security
forces," their members followed by "suspicious persons" and "vehicles with dark windshields,"
and their offices monitored by "men with military build." They likewise claim that they have
been branded as "enemies of the [S]tate."14

Even conceding such gratuitous allegations, the Office of the Solicitor General (OSG) correctly
points out that petitioners have yet to show any connection between the
purported "surveillance" and the implementation of RA 9372.

BAYAN, GABRIELA, KMP, MCCCL, COURAGE, KADAMAY, SCW, LFS, Anakbayan,

PAMALAKAYA, ACT, Migrante, HEAD and Agham, petitioner-organizations in G.R. No.
178581, would like the Court to take judicial notice of respondents’ alleged action of tagging
them as militant organizations fronting for the Communist Party of the Philippines (CPP) and its
armed wing, the National People’s Army (NPA). The tagging, according to petitioners, is
tantamount to the effects of proscription without following the procedure under the law.15 The
petition of BAYAN-ST, et al. in G.R. No. 179461 pleads the same allegations.

The Court cannot take judicial notice of the alleged "tagging" of petitioners.

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must
be one of common and general knowledge; (2) it must be well and authoritatively settled and not
doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the
court. The principal guide in determining what facts may be assumed to be judicially known is
that of notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public
records and facts of general notoriety. Moreover, a judicially noticed fact must be one not subject
to a reasonable dispute in that it is either: (1) generally known within the territorial jurisdiction of
the trial court; or (2) capable of accurate and ready determination by resorting to sources whose
accuracy cannot reasonably be questionable.

Things of "common knowledge," of which courts take judicial matters coming to the knowledge
of men generally in the course of the ordinary experiences of life, or they may be matters which
are generally accepted by mankind as true and are capable of ready and unquestioned
demonstration. Thus, facts which are universally known, and which may be found in
encyclopedias, dictionaries or other publications, are judicially noticed, provided, they are of
such universal notoriety and so generally understood that they may be regarded as forming part
of the common knowledge of every person. As the common knowledge of man ranges far and
wide, a wide variety of particular facts have been judicially noticed as being matters of common
knowledge. But a court cannot take judicial notice of any fact which, in part, is dependent on the
existence or non-existence of a fact of which the court has no constructive
knowledge.16 (emphasis and underscoring supplied.)

No ground was properly established by petitioners for the taking of judicial notice. Petitioners’
apprehension is insufficient to substantiate their plea. That no specific charge or proscription
under RA 9372 has been filed against them, three years after its effectivity, belies any claim
of imminence of their perceived threat emanating from the so-called tagging.

The same is true with petitioners KMU, NAFLU and CTUHR in G.R. No. 178554, who merely
harp as well on their supposed "link" to the CPP and NPA. They fail to particularize how the
implementation of specific provisions of RA 9372 would result in direct injury to their
organization and members.

While in our jurisdiction there is still no judicially declared terrorist organization, the United
States of America17 (US) and the European Union18 (EU) have both classified the CPP, NPA and
Abu Sayyaf Group as foreign terrorist organizations. The Court takes note of the joint statement
of Executive Secretary Eduardo Ermita and Justice Secretary Raul Gonzales that the Arroyo
Administration would adopt the US and EU classification of the CPP and NPA as terrorist
organizations.19 Such statement notwithstanding, there is yet to be filed before the courts an
application to declare the CPP and NPA organizations as domestic terrorist or outlawed
organizations under RA 9372. Again, RA 9372 has been in effect for three years now. From July
2007 up to the present, petitioner-organizations have conducted their activities fully and freely
without any threat of, much less an actual, prosecution or proscription under RA 9372.

Parenthetically, the Fourteenth Congress, in a resolution initiated by Party-list Representatives

Saturnino Ocampo, Teodoro Casiño, Rafael Mariano and Luzviminda Ilagan,20 urged the
government to resume peace negotiations with the NDF by removing the impediments thereto,
one of which is the adoption of designation of the CPP and NPA by the US and EU as foreign
terrorist organizations. Considering the policy statement of the Aquino Administration21 of
resuming peace talks with the NDF, the government is not imminently disposed to ask for the
judicial proscription of the CPP-NPA consortium and its allied organizations.

More important, there are other parties not before the Court with direct and specific interests in
the questions being raised.22 Of recent development is the filing of the first case for proscription
under Section 1723 of RA 9372 by the Department of Justice before the Basilan Regional Trial
Court against the Abu Sayyaf Group.24 Petitioner-organizations do not in the least allege any link
to the Abu Sayyaf Group.

Some petitioners attempt, in vain though, to show the imminence of a prosecution under RA
9372 by alluding to past rebellion charges against them.

In Ladlad v. Velasco,25 the Court ordered the dismissal of rebellion charges filed in 2006 against
then Party-List Representatives Crispin Beltran and Rafael Mariano of Anakpawis, Liza Maza of
GABRIELA, and Joel Virador, Teodoro Casiño and Saturnino Ocampo of Bayan Muna. Also
named in the dismissed rebellion charges were petitioners Rey Claro Casambre, Carolina
Pagaduan-Araullo, Renato Reyes, Rita Baua, Emerencia de Jesus and Danilo Ramos; and
accused of being front organizations for the Communist movement were petitioner-organizations
KMU, BAYAN, GABRIELA, PAMALAKAYA, KMP, KADAMAY, LFS and COURAGE. 26

The dismissed rebellion charges, however, do not save the day for petitioners. For one, those
charges were filed in 2006, prior to the enactment of RA 9372, and dismissed by this Court. For
another, rebellion is defined and punished under the Revised Penal Code. Prosecution for
rebellion is not made more imminent by the enactment of RA 9372, nor does the enactment
thereof make it easier to charge a person with rebellion, its elements not having been altered.

Conversely, previously filed but dismissed rebellion charges bear no relation to prospective
charges under RA 9372. It cannot be overemphasized that three years after the enactment of RA
9372, none of petitioners has been charged.

Petitioners IBP and CODAL in G.R. No. 179157 base their claim of locus standi on their sworn
duty to uphold the Constitution. The IBP zeroes in on Section 21 of RA 9372 directing it to
render assistance to those arrested or detained under the law.

The mere invocation of the duty to preserve the rule of law does not, however, suffice to clothe
the IBP or any of its members with standing.27 The IBP failed to sufficiently demonstrate how its
mandate under the assailed statute revolts against its constitutional rights and duties. Moreover,
both the IBP and CODAL have not pointed to even a single arrest or detention effected under
RA 9372.

Former Senator Ma. Ana Consuelo Madrigal, who claims to have been the subject of "political
surveillance," also lacks locus standi. Prescinding from the veracity, let alone legal basis, of the
claim of "political surveillance," the Court finds that she has not shown even the slightest threat
of being charged under RA 9372. Similarly lacking in locus standi are former Senator Wigberto
Tañada and Senator Sergio Osmeña III, who cite their being respectively a human rights
advocate and an oppositor to the passage of RA 9372. Outside these gratuitous statements, no
concrete injury to them has been pinpointed.

Petitioners Southern Hemisphere Engagement Network and Atty. Soliman Santos Jr. in G.R. No.
178552 also conveniently state that the issues they raise are of transcendental importance,
"which must be settled early" and are of "far-reaching implications," without mention of any
specific provision of RA 9372 under which they have been charged, or may be charged. Mere
invocation of human rights advocacy has nowhere been held sufficient to clothe litigants with
locus standi. Petitioners must show an actual, or immediate danger of sustaining, direct injury as
a result of the law’s enforcement. To rule otherwise would be to corrupt the settled doctrine of
locus standi, as every worthy cause is an interest shared by the general public.

Neither can locus standi be conferred upon individual petitioners as taxpayers and citizens. A
taxpayer suit is proper only when there is an exercise of the spending or taxing power of
Congress,28 whereas citizen standing must rest on direct and personal interest in the
proceeding.29
RA 9372 is a penal statute and does not even provide for any appropriation from Congress for its
implementation, while none of the individual petitioner-citizens has alleged any direct and
personal interest in the implementation of the law.

It bears to stress that generalized interests, albeit accompanied by the assertion of a public right,
do not establish locus standi. Evidence of a direct and personal interest is key.

Petitioners fail to present an actual case or controversy

By constitutional fiat, judicial power operates only when there is an actual case or controversy.

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.30 (emphasis and underscoring supplied.)

As early as Angara v. Electoral Commission,31 the Court ruled that the power of judicial review
is limited to actual cases or controversies to be exercised after full opportunity of argument by
the parties. Any attempt at abstraction could only lead to dialectics and barren legal questions
and to sterile conclusions unrelated to actualities.

An actual case or controversy means an existing case or controversy that is appropriate or ripe
for determination, not conjectural or anticipatory, lest the decision of the court would amount to
an advisory opinion.32

Information Technology Foundation of the Philippines v. COMELEC33 cannot be more

emphatic:

[C]ourts do not sit to adjudicate mere academic questions to satisfy scholarly interest, however
intellectually challenging. The controversy must be justiciable—definite and concrete, touching
on the legal relations of parties having adverse legal interests. In other words, the pleadings must
show an active antagonistic assertion of a legal right, on the one hand, and a denial thereof on the
other hand; that is, it must concern a real and not merely a theoretical question or issue. There
ought to be an actual and substantial controversy admitting of specific relief through a decree
conclusive in nature, as distinguished from an opinion advising what the law would be upon a
hypothetical state of facts. (Emphasis and underscoring supplied)

Thus, a petition to declare unconstitutional a law converting the Municipality of Makati into a
Highly Urbanized City was held to be premature as it was tacked on uncertain, contingent
events.34 Similarly, a petition that fails to allege that an application for a license to operate a
radio or television station has been denied or granted by the authorities does not present a
justiciable controversy, and merely wheedles the Court to rule on a hypothetical problem.35
The Court dismissed the petition in Philippine Press Institute v. Commission on Elections 36 for
failure to cite any specific affirmative action of the Commission on Elections to implement the
assailed resolution. It refused, in Abbas v. Commission on Elections, 37 to rule on the religious
freedom claim of the therein petitioners based merely on a perceived potential conflict between
the provisions of the Muslim Code and those of the national law, there being no actual
controversy between real litigants.

The list of cases denying claims resting on purely hypothetical or anticipatory grounds goes on
ad infinitum.

The Court is not unaware that a reasonable certainty of the occurrence of a perceived threat to
any constitutional interest suffices to provide a basis for mounting a constitutional challenge.
This, however, is qualified by the requirement that there must be sufficient facts to enable the
Court to intelligently adjudicate the issues.38

Very recently, the US Supreme Court, in Holder v. Humanitarian Law Project, 39 allowed the pre-
enforcement review of a criminal statute, challenged on vagueness grounds, since plaintiffs faced
a "credible threat of prosecution" and "should not be required to await and undergo a criminal
prosecution as the sole means of seeking relief."40 The plaintiffs therein filed an action before a
federal court to assail the constitutionality of the material support statute, 18 U.S.C. §2339B (a)
(1),41 proscribing the provision of material support to organizations declared by the Secretary of
State as foreign terrorist organizations. They claimed that they intended to provide support for
the humanitarian and political activities of two such organizations.

Prevailing American jurisprudence allows an adjudication on the merits when an anticipatory

petition clearly shows that the challenged prohibition forbids the conduct or activity that a
petitioner seeks to do, as there would then be a justiciable controversy. 42

Unlike the plaintiffs in Holder, however, herein petitioners have failed to show that the
challenged provisions of RA 9372 forbid constitutionally protected conduct or activity that they
seek to do. No demonstrable threat has been established, much less a real and existing one.

Petitioners’ obscure allegations of sporadic "surveillance" and supposedly being tagged as

"communist fronts" in no way approximate a credible threat of prosecution. From these
allegations, the Court is being lured to render an advisory opinion, which is not its function.43

Without any justiciable controversy, the petitions have become pleas for declaratory relief, over
which the Court has no original jurisdiction. Then again, declaratory actions characterized by
"double contingency," where both the activity the petitioners intend to undertake and the
anticipated reaction to it of a public official are merely theorized, lie beyond judicial review for
lack of ripeness.44

The possibility of abuse in the implementation of RA 9372 does not avail to take the present
petitions out of the realm of the surreal and merely imagined. Such possibility is not peculiar to
RA 9372 since the exercise of any power granted by law may be abused. 45 Allegations of abuse
must be anchored on real events before courts may step in to settle actual controversies involving
rights which are legally demandable and enforceable.

A facial invalidation of a statute is allowed only in free speech cases, wherein certain rules
of constitutional litigation are rightly excepted

Petitioners assail for being intrinsically vague and impermissibly broad the definition of the
crime of terrorism46 under RA 9372 in that terms like "widespread and extraordinary fear and
panic among the populace" and "coerce the government to give in to an unlawful demand" are
nebulous, leaving law enforcement agencies with no standard to measure the prohibited acts.

Respondents, through the OSG, counter that the doctrines of void-for-vagueness and overbreadth
find no application in the present case since these doctrines apply only to free speech cases; and
that RA 9372 regulates conduct, not speech.

For a jurisprudentially guided understanding of these doctrines, it is imperative to outline the

schools of thought on whether the void-for-vagueness and overbreadth doctrines are equally
applicable grounds to assail a penal statute.

Respondents interpret recent jurisprudence as slanting toward the idea of limiting the application
of the two doctrines to free speech cases. They particularly cite Romualdez v. Hon.
Sandiganbayan47 and Estrada v. Sandiganbayan.48

The Court clarifies.

At issue in Romualdez v. Sandiganbayan was whether the word "intervene" in Section 549 of the
Anti-Graft and Corrupt Practices Act was intrinsically vague and impermissibly broad. The
Court stated that "the overbreadth and the vagueness doctrines have special application only to
free-speech cases," and are "not appropriate for testing the validity of penal statutes."50 It added
that, at any rate, the challenged provision, under which the therein petitioner was charged, is not
vague.51

While in the subsequent case of Romualdez v. Commission on Elections,52 the Court stated that a
facial invalidation of criminal statutes is not appropriate, it nonetheless proceeded to conduct a
vagueness analysis, and concluded that the therein subject election offense53 under the Voter’s
Registration Act of 1996, with which the therein petitioners were charged, is couched in precise
language.54

The two Romualdez cases rely heavily on the Separate Opinion55 of Justice Vicente V. Mendoza
in the Estrada case, where the Court found the Anti-Plunder Law (Republic Act No. 7080) clear
and free from ambiguity respecting the definition of the crime of plunder.

The position taken by Justice Mendoza in Estrada relates these two doctrines to the concept of a
"facial" invalidation as opposed to an "as-applied" challenge. He basically postulated that
allegations that a penal statute is vague and overbroad do not justify a facial review of its
validity. The pertinent portion of the Concurring Opinion of Justice Mendoza, which was quoted
at length in the main Estrada decision, reads:

A facial challenge is allowed to be made to a vague statute and to one which is overbroad
because of possible "chilling effect" upon protected speech. The theory is that "[w]hen statutes
regulate or proscribe speech and no readily apparent construction suggests itself as a vehicle for
rehabilitating the statutes in a single prosecution, the transcendent value to all society of
constitutionally protected expression is deemed to justify allowing attacks on overly broad
statutes with no requirement that the person making the attack demonstrate that his own conduct
could not be regulated by a statute drawn with narrow specificity." The possible harm to society
in permitting some unprotected speech to go unpunished is outweighed by the possibility that the
protected speech of others may be deterred and perceived grievances left to fester because of
possible inhibitory effects of overly broad statutes.

This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect
resulting from their very existence, and, if facial challenge is allowed for this reason alone, the
State may well be prevented from enacting laws against socially harmful conduct. In the area of
criminal law, the law cannot take chances as in the area of free speech.

The overbreadth and vagueness doctrines then have special application only to free speech cases.
They are inapt for testing the validity of penal statutes. As the U.S. Supreme Court put it, in an
opinion by Chief Justice Rehnquist, "we have not recognized an 'overbreadth' doctrine outside
the limited context of the First Amendment." In Broadrick v. Oklahoma, the Court ruled that
"claims of facial overbreadth have been entertained in cases involving statutes which, by their
terms, seek to regulate only spoken words" and, again, that "overbreadth claims, if entertained at
all, have been curtailed when invoked against ordinary criminal laws that are sought to be
applied to protected conduct." For this reason, it has been held that "a facial challenge to a
legislative act is the most difficult challenge to mount successfully, since the challenger must
establish that no set of circumstances exists under which the Act would be valid." As for the
vagueness doctrine, it is said that a litigant may challenge a statute on its face only if it is vague
in all its possible applications. "A plaintiff who engages in some conduct that is clearly
proscribed cannot complain of the vagueness of the law as applied to the conduct of others."

In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed
for testing "on their faces" statutes in free speech cases or, as they are called in American law,
First Amendment cases. They cannot be made to do service when what is involved is a criminal
statute. With respect to such statute, the established rule is that "one to whom application of a
statute is constitutional will not be heard to attack the statute on the ground that impliedly it
might also be taken as applying to other persons or other situations in which its application might
be unconstitutional." As has been pointed out, "vagueness challenges in the First Amendment
context, like overbreadth challenges typically produce facial invalidation, while statutes found
vague as a matter of due process typically are invalidated [only] 'as applied' to a particular
defendant." Consequently, there is no basis for petitioner's claim that this Court review the Anti-
Plunder Law on its face and in its entirety.
Indeed, "on its face" invalidation of statutes results in striking them down entirely on the ground
that they might be applied to parties not before the Court whose activities are constitutionally
protected. It constitutes a departure from the case and controversy requirement of the
Constitution and permits decisions to be made without concrete factual settings and in sterile
abstract contexts. But, as the U.S. Supreme Court pointed out in Younger v. Harris

[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction
of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for
the judiciary. The combination of the relative remoteness of the controversy, the impact on the
legislative process of the relief sought, and above all the speculative and amorphous nature of the
required line-by-line analysis of detailed statutes, . . . ordinarily results in a kind of case that is
wholly unsatisfactory for deciding constitutional questions, whichever way they might be
decided.

For these reasons, "on its face" invalidation of statutes has been described as "manifestly strong
medicine," to be employed "sparingly and only as a last resort," and is generally disfavored. In
determining the constitutionality of a statute, therefore, its provisions which are alleged to have
been violated in a case must be examined in the light of the conduct with which the defendant is
charged.56 (Underscoring supplied.)

The confusion apparently stems from the interlocking relation of the overbreadth and vagueness
doctrines as grounds for a facial or as-applied challenge against a penal statute (under a claim of
violation of due process of law) or a speech regulation (under a claim of abridgement of the
freedom of speech and cognate rights).

To be sure, the doctrine of vagueness and the doctrine of overbreadth do not operate on the same
plane.

A statute or act suffers from the defect of vagueness when it lacks comprehensible standards that
men of common intelligence must necessarily guess at its meaning and differ as to its
application. It is repugnant to the Constitution in two respects: (1) it violates due process for
failure to accord persons, especially the parties targeted by it, fair notice of the conduct to avoid;
and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an
arbitrary flexing of the Government muscle.57 The overbreadth doctrine, meanwhile, decrees that
a governmental purpose to control or prevent activities constitutionally subject to state
regulations may not be achieved by means which sweep unnecessarily broadly and thereby
invade the area of protected freedoms.58

As distinguished from the vagueness doctrine, the overbreadth doctrine assumes that individuals
will understand what a statute prohibits and will accordingly refrain from that behavior, even
though some of it is protected.59

A "facial" challenge is likewise different from an "as-applied" challenge.

Distinguished from an as-applied challenge which considers only extant facts

affecting real litigants, a facial invalidation is an examination of the entire law, pinpointing its
flaws and defects, not only on the basis of its actual operation to the parties, but also on the
assumption or prediction that its very existence may cause others not before the court to refrain
from constitutionally protected speech or activities.60

Justice Mendoza accurately phrased the subtitle61 in his concurring opinion that the vagueness
and overbreadth doctrines, as grounds for a facial challenge, are not applicable to penal laws. A
litigant cannot thus successfully mount a facial challenge against a criminal statute on either
vagueness or overbreadth grounds.

The allowance of a facial challenge in free speech cases is justified by the aim to avert the
"chilling effect" on protected speech, the exercise of which should not at all times be
abridged.62 As reflected earlier, this rationale is inapplicable to plain penal statutes that generally
bear an "in terrorem effect" in deterring socially harmful conduct. In fact, the legislature may
even forbid and penalize acts formerly considered innocent and lawful, so long as it refrains from
diminishing or dissuading the exercise of constitutionally protected rights. 63

The Court reiterated that there are "critical limitations by which a criminal statute may be
challenged" and "underscored that an ‘on-its-face’ invalidation of penal statutes x x x may not be
allowed."64

[T]he rule established in our jurisdiction is, only statutes on free speech, religious freedom, and
other fundamental rights may be facially challenged. Under no case may ordinary penal statutes
be subjected to a facial challenge. The rationale is obvious. If a facial challenge to a penal statute
is permitted, the prosecution of crimes may be hampered. No prosecution would be possible. A
strong criticism against employing a facial challenge in the case of penal statutes, if the same is
allowed, would effectively go against the grain of the doctrinal requirement of an existing and
concrete controversy before judicial power may be appropriately exercised. A facial challenge
against a penal statute is, at best, amorphous and speculative. It would, essentially, force the
court to consider third parties who are not before it. As I have said in my opposition to the
allowance of a facial challenge to attack penal statutes, such a test will impair the State’s ability
to deal with crime. If warranted, there would be nothing that can hinder an accused from
defeating the State’s power to prosecute on a mere showing that, as applied to third parties, the
penal statute is vague or overbroad, notwithstanding that the law is clear as applied to
him.65 (Emphasis and underscoring supplied)

It is settled, on the other hand, that the application of the overbreadth doctrine is limited to a
facial kind of challenge and, owing to the given rationale of a facial challenge, applicable
only to free speech cases.

By its nature, the overbreadth doctrine has to necessarily apply a facial type of invalidation in
order to plot areas of protected speech, inevitably almost always under situations not before the
court, that are impermissibly swept by the substantially overbroad regulation. Otherwise stated, a
statute cannot be properly analyzed for being substantially overbroad if the court confines itself
only to facts as applied to the litigants.
The most distinctive feature of the overbreadth technique is that it marks an exception to some of
the usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is
unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the
unconstitutional aspects of the law by invalidating its improper applications on a case to case
basis. Moreover, challengers to a law are not permitted to raise the rights of third parties and can
only assert their own interests. In overbreadth analysis, those rules give way; challenges are
permitted to raise the rights of third parties; and the court invalidates the entire statute "on its
face," not merely "as applied for" so that the overbroad law becomes unenforceable until a
properly authorized court construes it more narrowly. The factor that motivates courts to depart
from the normal adjudicatory rules is the concern with the "chilling;" deterrent effect of the
overbroad statute on third parties not courageous enough to bring suit. The Court assumes that an
overbroad law’s "very existence may cause others not before the court to refrain from
constitutionally protected speech or expression." An overbreadth ruling is designed to remove
that deterrent effect on the speech of those third parties. 66 (Emphasis in the original omitted;
underscoring supplied.)

In restricting the overbreadth doctrine to free speech claims, the Court, in at least two
cases,67 observed that the US Supreme Court has not recognized an overbreadth doctrine outside
the limited context of the First Amendment,68 and that claims of facial overbreadth have been
entertained in cases involving statutes which, by their terms, seek to regulate only spoken
words.69 In Virginia v. Hicks,70 it was held that rarely, if ever, will an overbreadth challenge
succeed against a law or regulation that is not specifically addressed to speech or speech-related
conduct. Attacks on overly broad statutes are justified by the "transcendent value to all society of
constitutionally protected expression."71

Since a penal statute may only be assailed for being vague as applied to petitioners, a limited
vagueness analysis of the definition of "terrorism" in RA 9372 is legally impermissible absent
an actual or imminent charge against them

While Estrada did not apply the overbreadth doctrine, it did not preclude the operation of the
vagueness test on the Anti-Plunder Law as applied to the therein petitioner, finding, however,
that there was no basis to review the law "on its face and in its entirety."72 It stressed that
"statutes found vague as a matter of due process typically are invalidated only 'as applied' to a
particular defendant."73

American jurisprudence74 instructs that "vagueness challenges that do not involve the First
Amendment must be examined in light of the specific facts of the case at hand and not with
regard to the statute's facial validity."

For more than 125 years, the US Supreme Court has evaluated defendants’ claims that criminal
statutes are unconstitutionally vague, developing a doctrine hailed as "among the most important
guarantees of liberty under law."75

In this jurisdiction, the void-for-vagueness doctrine asserted under the due process clause has
been utilized in examining the constitutionality of criminal statutes. In at least three cases, 76 the
Court brought the doctrine into play in analyzing an ordinance penalizing the non-payment of
municipal tax on fishponds, the crime of illegal recruitment punishable under Article 132(b) of
the Labor Code, and the vagrancy provision under Article 202 (2) of the Revised Penal Code.
Notably, the petitioners in these three cases, similar to those in the
two Romualdez and Estrada cases, were actually charged with the therein assailed penal statute,
unlike in the present case.

There is no merit in the claim that RA 9372 regulates speech so as to permit a facial analysis of
its validity

From the definition of the crime of terrorism in the earlier cited Section 3 of RA 9372, the
following elements may be culled: (1) the offender commits an act punishable under any of the
cited provisions of the Revised Penal Code, or under any of the enumerated special penal laws;
(2) the commission of the predicate crime sows and creates a condition of widespread and
extraordinary fear and panic among the populace; and (3) the offender is actuated by the desire to
coerce the government to give in to an unlawful demand.

In insisting on a facial challenge on the invocation that the law penalizes speech, petitioners
contend that the element of "unlawful demand" in the definition of terrorism 77 must necessarily
be transmitted through some form of expression protected by the free speech clause.

The argument does not persuade. What the law seeks to penalize is conduct, not speech.

Before a charge for terrorism may be filed under RA 9372, there must first be a predicate crime
actually committed to trigger the operation of the key qualifying phrases in the other elements of
the crime, including the coercion of the government to accede to an "unlawful demand." Given
the presence of the first element, any attempt at singling out or highlighting the communicative
component of the prohibition cannot recategorize the unprotected conduct into a protected
speech.

Petitioners’ notion on the transmission of message is entirely inaccurate, as it unduly focuses on

just one particle of an element of the crime. Almost every commission of a crime entails some
mincing of words on the part of the offender like in declaring to launch overt criminal acts
against a victim, in haggling on the amount of ransom or conditions, or in negotiating a deceitful
transaction. An analogy in one U.S. case78 illustrated that the fact that the prohibition on
discrimination in hiring on the basis of race will require an employer to take down a sign reading
"White Applicants Only" hardly means that the law should be analyzed as one regulating speech
rather than conduct.

Utterances not elemental but inevitably incidental to the doing of the criminal conduct alter
neither the intent of the law to punish socially harmful conduct nor the essence of the whole act
as conduct and not speech. This holds true a fortiori in the present case where the expression
figures only as an inevitable incident of making the element of coercion perceptible.

[I]t is true that the agreements and course of conduct here were as in most instances brought
about through speaking or writing. But it has never been deemed an abridgement of freedom of
speech or press to make a course of conduct illegal merely because the conduct was, in part,
initiated, evidenced, or carried out by means of language, either spoken, written, or printed. Such
an expansive interpretation of the constitutional guaranties of speech and press would make it
practically impossible ever to enforce laws against agreements in restraint of trade as well as
many other agreements and conspiracies deemed injurious to society. 79 (italics and underscoring
supplied)

Certain kinds of speech have been treated as unprotected conduct, because they merely evidence
a prohibited conduct.80 Since speech is not involved here, the Court cannot heed the call for a
facial analysis.1avvphi1

IN FINE, Estrada and the other cited authorities engaged in a vagueness analysis of the therein
subject penal statute as applied to the therein petitioners inasmuch as they were actually charged
with the pertinent crimes challenged on vagueness grounds. The Court in said cases, however,
found no basis to review the assailed penal statute on its face and in its entirety.

In Holder, on the other hand, the US Supreme Court allowed the pre-enforcement review of a
criminal statute, challenged on vagueness grounds, since the therein plaintiffs faced a "credible
threat of prosecution" and "should not be required to await and undergo a criminal prosecution
as the sole means of seeking relief."

As earlier reflected, petitioners have established neither an actual charge nor a credible threat of
prosecution under RA 9372. Even a limited vagueness analysis of the assailed definition of
"terrorism" is thus legally impermissible. The Court reminds litigants that judicial power neither
contemplates speculative counseling on a statute’s future effect on hypothetical scenarios nor
allows the courts to be used as an extension of a failed legislative lobbying in Congress.

WHEREFORE, the petitions are DISMISSED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 171396 May 3, 2006

PROF. RANDOLF S. DAVID, LORENZO TAÑADA III, RONALD LLAMAS, H.

HARRY L. ROQUE, JR., JOEL RUIZ BUTUYAN, ROGER R. RAYEL, GARY S.
MALLARI, ROMEL REGALADO BAGARES, CHRISTOPHER F.C.
BOLASTIG, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, AS PRESIDENT AND COMMANDER-IN-CHIEF,
EXECUTIVE SECRETARY EDUARDO ERMITA, HON. AVELINO CRUZ II,
SECRETARY OF NATIONAL DEFENSE, GENERAL GENEROSO SENGA, CHIEF OF
STAFF, ARMED FORCES OF THE PHILIPPINES, DIRECTOR GENERAL ARTURO
LOMIBAO, CHIEF, PHILIPPINE NATIONAL POLICE, Respondents.

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

G.R. No. 171409 May 3, 2006

NIÑEZ CACHO-OLIVARES AND TRIBUNE PUBLISHING CO., INC., Petitioners,

vs.
HONORABLE SECRETARY EDUARDO ERMITA AND HONORABLE DIRECTOR
GENERAL ARTURO C. LOMIBAO, Respondents.

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

G.R. No. 171485 May 3, 2006

FRANCIS JOSEPH G. ESCUDERO, JOSEPH A. SANTIAGO, TEODORO A. CASINO,

AGAPITO A. AQUINO, MARIO J. AGUJA, SATUR C. OCAMPO, MUJIV S.
HATAMAN, JUAN EDGARDO ANGARA, TEOFISTO DL. GUINGONA III,
EMMANUEL JOSEL J. VILLANUEVA, LIZA L. MAZA, IMEE R. MARCOS, RENATO
B. MAGTUBO, JUSTIN MARC SB. CHIPECO, ROILO GOLEZ, DARLENE
ANTONINO-CUSTODIO, LORETTA ANN P. ROSALES, JOSEL G. VIRADOR,
RAFAEL V. MARIANO, GILBERT C. REMULLA, FLORENCIO G. NOEL, ANA
THERESIA HONTIVEROS-BARAQUEL, IMELDA C. NICOLAS, MARVIC M.V.F.
LEONEN, NERI JAVIER COLMENARES, MOVEMENT OF CONCERNED CITIZENS
FOR CIVIL LIBERTIES REPRESENTED BY AMADO GAT INCIONG, Petitioners,
vs.
EDUARDO R. ERMITA, EXECUTIVE SECRETARY, AVELINO J. CRUZ, JR.,
SECRETARY, DND RONALDO V. PUNO, SECRETARY, DILG, GENEROSO SENGA,
AFP CHIEF OF STAFF, ARTURO LOMIBAO, CHIEF PNP, Respondents.

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

G.R. No. 171483 May 3, 2006

KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON ELMER C.

LABOG AND SECRETARY GENERAL JOEL MAGLUNSOD, NATIONAL
FEDERATION OF LABOR UNIONS – KILUSANG MAYO UNO (NAFLU-KMU),
REPRESENTED BY ITS NATIONAL PRESIDENT, JOSELITO V. USTAREZ,
ANTONIO C. PASCUAL, SALVADOR T. CARRANZA, EMILIA P. DAPULANG,
MARTIN CUSTODIO, JR., AND ROQUE M. TAN, Petitioners,
vs.
HER EXCELLENCY, PRESIDENT GLORIA MACAPAGAL-ARROYO, THE
HONORABLE EXECUTIVE SECRETARY, EDUARDO ERMITA, THE CHIEF OF
STAFF, ARMED FORCES OF THE PHILIPPINES, GENEROSO SENGA, AND THE
PNP DIRECTOR GENERAL, ARTURO LOMIBAO, Respondents.

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

G.R. No. 171400 May 3, 2006

ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner,

vs.
EXECUTIVE SECRETARY EDUARDO R. ERMITA, LT. GEN. GENEROSO SENGA,
AND DIRECTOR GENERAL ARTURO LOMIBAO, Respondents.

G.R. No. 171489 May 3, 2006

JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE

AMOR M. AMORADO, ALICIA A. RISOS-VIDAL, FELIMON C. ABELITA III,
MANUEL P. LEGASPI, J.B. JOVY C. BERNABE, BERNARD L. DAGCUTA, ROGELIO
V. GARCIA AND INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioners,
vs.
HON. EXECUTIVE SECRETARY EDUARDO ERMITA, GENERAL GENEROSO
SENGA, IN HIS CAPACITY AS AFP CHIEF OF STAFF, AND DIRECTOR GENERAL
ARTURO LOMIBAO, IN HIS CAPACITY AS PNP CHIEF, Respondents.

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

G.R. No. 171424 May 3, 2006

LOREN B. LEGARDA, Petitioner,

vs.
GLORIA MACAPAGAL-ARROYO, IN HER CAPACITY AS PRESIDENT AND
COMMANDER-IN-CHIEF; ARTURO LOMIBAO, IN HIS CAPACITY AS DIRECTOR-
GENERAL OF THE PHILIPPINE NATIONAL POLICE (PNP); GENEROSO SENGA,
IN HIS CAPACITY AS CHIEF OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES (AFP); AND EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE
SECRETARY, Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

All powers need some restraint; practical adjustments rather than rigid formula are
necessary.1 Superior strength – the use of force – cannot make wrongs into rights. In this regard,
the courts should be vigilant in safeguarding the constitutional rights of the citizens, specifically
their liberty.

Chief Justice Artemio V. Panganiban’s philosophy of liberty is thus most relevant. He said: "In
cases involving liberty, the scales of justice should weigh heavily against government and in
favor of the poor, the oppressed, the marginalized, the dispossessed and the weak." Laws
and actions that restrict fundamental rights come to the courts "with a heavy presumption against
their constitutional validity."2

These seven (7) consolidated petitions for certiorari and prohibition allege that in issuing
Presidential Proclamation No. 1017 (PP 1017) and General Order No. 5 (G.O. No. 5), President
Gloria Macapagal-Arroyo committed grave abuse of discretion. Petitioners contend that
respondent officials of the Government, in their professed efforts to defend and preserve
democratic institutions, are actually trampling upon the very freedom guaranteed and protected
by the Constitution. Hence, such issuances are void for being unconstitutional.

Once again, the Court is faced with an age-old but persistently modern problem. How does the
Constitution of a free people combine the degree of liberty, without which, law becomes tyranny,
with the degree of law, without which, liberty becomes license?3

On February 24, 2006, as the nation celebrated the 20th Anniversary of the Edsa People Power I,
President Arroyo issued PP 1017 declaring a state of national emergency, thus:

NOW, THEREFORE, I, Gloria Macapagal-Arroyo, President of the Republic of the Philippines

and Commander-in-Chief of the Armed Forces of the Philippines, by virtue of the powers vested
upon me by Section 18, Article 7 of the Philippine Constitution which states that: "The
President. . . whenever it becomes necessary, . . . may call out (the) armed forces to prevent or
suppress. . .rebellion. . .," and in my capacity as their Commander-in-Chief, do hereby
command the Armed Forces of the Philippines, to maintain law and order throughout the
Philippines, prevent or suppress all forms of lawless violence as well as any act of
insurrection or rebellion and to enforce obedience to all the laws and to all decrees, orders
and regulations promulgated by me personally or upon my direction; and as provided in
Section 17, Article 12 of the Constitution do hereby declare a State of National Emergency.
She cited the following facts as bases:

WHEREAS, over these past months, elements in the political opposition have conspired with
authoritarians of the extreme Left represented by the NDF-CPP-NPA and the extreme
Right, represented by military adventurists – the historical enemies of the democratic
Philippine State – who are now in a tactical alliance and engaged in a concerted and systematic
conspiracy, over a broad front, to bring down the duly constituted Government elected in May
2004;

WHEREAS, these conspirators have repeatedly tried to bring down the President;

WHEREAS, the claims of these elements have been recklessly magnified by certain
segments of the national media;

WHEREAS, this series of actions is hurting the Philippine State – by obstructing governance
including hindering the growth of the economy and sabotaging the people’s confidence in
government and their faith in the future of this country;

WHEREAS, these actions are adversely affecting the economy;

WHEREAS, these activities give totalitarian forces of both the extreme Left and extreme
Right the opening to intensify their avowed aims to bring down the democratic Philippine
State;

WHEREAS, Article 2, Section 4 of the our Constitution makes the defense and preservation of
the democratic institutions and the State the primary duty of Government;

WHEREAS, the activities above-described, their consequences, ramifications and collateral

effects constitute a clear and present danger to the safety and the integrity of the Philippine
State and of the Filipino people;

On the same day, the President issued G. O. No. 5 implementing PP 1017, thus:

WHEREAS, over these past months, elements in the political opposition have conspired with
authoritarians of the extreme Left, represented by the NDF-CPP-NPA and the extreme Right,
represented by military adventurists - the historical enemies of the democratic Philippine State –
and who are now in a tactical alliance and engaged in a concerted and systematic conspiracy,
over a broad front, to bring down the duly-constituted Government elected in May 2004;

WHEREAS, these conspirators have repeatedly tried to bring down our republican government;

WHEREAS, the claims of these elements have been recklessly magnified by certain segments of
the national media;
WHEREAS, these series of actions is hurting the Philippine State by obstructing governance,
including hindering the growth of the economy and sabotaging the people’s confidence in the
government and their faith in the future of this country;

WHEREAS, these actions are adversely affecting the economy;

WHEREAS, these activities give totalitarian forces; of both the extreme Left and extreme Right
the opening to intensify their avowed aims to bring down the democratic Philippine State;

WHEREAS, Article 2, Section 4 of our Constitution makes the defense and preservation of the
democratic institutions and the State the primary duty of Government;

WHEREAS, the activities above-described, their consequences, ramifications and collateral

effects constitute a clear and present danger to the safety and the integrity of the Philippine State
and of the Filipino people;

WHEREAS, Proclamation 1017 date February 24, 2006 has been issued declaring a State of
National Emergency;

NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested

in me under the Constitution as President of the Republic of the Philippines, and Commander-in-
Chief of the Republic of the Philippines, and pursuant to Proclamation No. 1017 dated February
24, 2006, do hereby call upon the Armed Forces of the Philippines (AFP) and the Philippine
National Police (PNP), to prevent and suppress acts of terrorism and lawless violence in the
country;

I hereby direct the Chief of Staff of the AFP and the Chief of the PNP, as well as the officers and
men of the AFP and PNP, to immediately carry out the necessary and appropriate actions
and measures to suppress and prevent acts of terrorism and lawless violence.

On March 3, 2006, exactly one week after the declaration of a state of national emergency and
after all these petitions had been filed, the President lifted PP 1017. She issued Proclamation No.
1021 which reads:

WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the Constitution,
Proclamation No. 1017 dated February 24, 2006, was issued declaring a state of national
emergency;

WHEREAS, by virtue of General Order No.5 and No.6 dated February 24, 2006, which were
issued on the basis of Proclamation No. 1017, the Armed Forces of the Philippines (AFP) and the
Philippine National Police (PNP), were directed to maintain law and order throughout the
Philippines, prevent and suppress all form of lawless violence as well as any act of rebellion and
to undertake such action as may be necessary;

WHEREAS, the AFP and PNP have effectively prevented, suppressed and quelled the acts
lawless violence and rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of
the Philippines, by virtue of the powers vested in me by law, hereby declare that the state of
national emergency has ceased to exist.

In their presentation of the factual bases of PP 1017 and G.O. No. 5, respondents stated that the
proximate cause behind the executive issuances was the conspiracy among some military
officers, leftist insurgents of the New People’s Army (NPA), and some members of the political
opposition in a plot to unseat or assassinate President Arroyo.4 They considered the aim to oust
or assassinate the President and take-over the reigns of government as a clear and present danger.

During the oral arguments held on March 7, 2006, the Solicitor General specified the facts
leading to the issuance of PP 1017 and G.O. No. 5. Significantly, there was no refutation from
petitioners’ counsels.

The Solicitor General argued that the intent of the Constitution is to give full discretionary
powers to the President in determining the necessity of calling out the armed forces. He
emphasized that none of the petitioners has shown that PP 1017 was without factual bases. While
he explained that it is not respondents’ task to state the facts behind the questioned Proclamation,
however, they are presenting the same, narrated hereunder, for the elucidation of the issues.

On January 17, 2006, Captain Nathaniel Rabonza and First Lieutenants Sonny Sarmiento,
Lawrence San Juan and Patricio Bumidang, members of the Magdalo Group indicted in the
Oakwood mutiny, escaped their detention cell in Fort Bonifacio, Taguig City. In a public
statement, they vowed to remain defiant and to elude arrest at all costs. They called upon the
people to "show and proclaim our displeasure at the sham regime. Let us demonstrate our
disgust, not only by going to the streets in protest, but also by wearing red bands on our left
arms." 5

On February 17, 2006, the authorities got hold of a document entitled "Oplan Hackle I " which
detailed plans for bombings and attacks during the Philippine Military Academy Alumni
Homecoming in Baguio City. The plot was to assassinate selected targets including some cabinet
members and President Arroyo herself.6 Upon the advice of her security, President Arroyo
decided not to attend the Alumni Homecoming. The next day, at the height of the celebration, a
bomb was found and detonated at the PMA parade ground.

On February 21, 2006, Lt. San Juan was recaptured in a communist safehouse in Batangas
province. Found in his possession were two (2) flash disks containing minutes of the meetings
between members of the Magdalo Group and the National People’s Army (NPA), a tape
recorder, audio cassette cartridges, diskettes, and copies of subversive documents.7 Prior to his
arrest, Lt. San Juan announced through DZRH that the "Magdalo’s D-Day would be on February
24, 2006, the 20th Anniversary of Edsa I."

On February 23, 2006, PNP Chief Arturo Lomibao intercepted information that members of the
PNP- Special Action Force were planning to defect. Thus, he immediately ordered SAF
Commanding General Marcelino Franco, Jr. to "disavow" any defection. The latter promptly
obeyed and issued a public statement: "All SAF units are under the effective control of
responsible and trustworthy officers with proven integrity and unquestionable loyalty."

On the same day, at the house of former Congressman Peping Cojuangco, President Cory
Aquino’s brother, businessmen and mid-level government officials plotted moves to bring down
the Arroyo administration. Nelly Sindayen of TIME Magazine reported that Pastor Saycon,
longtime Arroyo critic, called a U.S. government official about his group’s plans if President
Arroyo is ousted. Saycon also phoned a man code-named Delta. Saycon identified him as B/Gen.
Danilo Lim, Commander of the Army’s elite Scout Ranger. Lim said "it was all systems go for
the planned movement against Arroyo."8

B/Gen. Danilo Lim and Brigade Commander Col. Ariel Querubin confided to Gen. Generoso
Senga, Chief of Staff of the Armed Forces of the Philippines (AFP), that a huge number of
soldiers would join the rallies to provide a critical mass and armed component to the Anti-
Arroyo protests to be held on February 24, 2005. According to these two (2) officers, there was
no way they could possibly stop the soldiers because they too, were breaking the chain of
command to join the forces foist to unseat the President. However, Gen. Senga has remained
faithful to his Commander-in-Chief and to the chain of command. He immediately took custody
of B/Gen. Lim and directed Col. Querubin to return to the Philippine Marines Headquarters in
Fort Bonifacio.

Earlier, the CPP-NPA called for intensification of political and revolutionary work within the
military and the police establishments in order to forge alliances with its members and key
officials. NPA spokesman Gregorio "Ka Roger" Rosal declared: "The Communist Party and
revolutionary movement and the entire people look forward to the possibility in the coming year
of accomplishing its immediate task of bringing down the Arroyo regime; of rendering it to
weaken and unable to rule that it will not take much longer to end it."9

On the other hand, Cesar Renerio, spokesman for the National Democratic Front (NDF) at North
Central Mindanao, publicly announced: "Anti-Arroyo groups within the military and police are
growing rapidly, hastened by the economic difficulties suffered by the families of AFP officers
and enlisted personnel who undertake counter-insurgency operations in the field." He claimed
that with the forces of the national democratic movement, the anti-Arroyo conservative political
parties, coalitions, plus the groups that have been reinforcing since June 2005, it is probable that
the President’s ouster is nearing its concluding stage in the first half of 2006.

Respondents further claimed that the bombing of telecommunication towers and cell sites in
Bulacan and Bataan was also considered as additional factual basis for the issuance of PP 1017
and G.O. No. 5. So is the raid of an army outpost in Benguet resulting in the death of three (3)
soldiers. And also the directive of the Communist Party of the Philippines ordering its front
organizations to join 5,000 Metro Manila radicals and 25,000 more from the provinces in mass
protests.10

By midnight of February 23, 2006, the President convened her security advisers and several
cabinet members to assess the gravity of the fermenting peace and order situation. She directed
both the AFP and the PNP to account for all their men and ensure that the chain of command
remains solid and undivided. To protect the young students from any possible trouble that might
break loose on the streets, the President suspended classes in all levels in the entire National
Capital Region.

For their part, petitioners cited the events that followed after the issuance of PP 1017 and
G.O. No. 5.

Immediately, the Office of the President announced the cancellation of all programs and
activities related to the 20th anniversary celebration of Edsa People Power I; and revoked the
permits to hold rallies issued earlier by the local governments. Justice Secretary Raul Gonzales
stated that political rallies, which to the President’s mind were organized for purposes of
destabilization, are cancelled.Presidential Chief of Staff Michael Defensor announced that
"warrantless arrests and take-over of facilities, including media, can already be implemented."11

Undeterred by the announcements that rallies and public assemblies would not be allowed,
groups of protesters (members of Kilusang Mayo Uno [KMU] and National Federation of Labor
Unions-Kilusang Mayo Uno [NAFLU-KMU]), marched from various parts of Metro Manila with
the intention of converging at the EDSA shrine. Those who were already near the EDSA site
were violently dispersed by huge clusters of anti-riot police. The well-trained policemen used
truncheons, big fiber glass shields, water cannons, and tear gas to stop and break up the marching
groups, and scatter the massed participants. The same police action was used against the
protesters marching forward to Cubao, Quezon City and to the corner of Santolan Street and
EDSA. That same evening, hundreds of riot policemen broke up an EDSA celebration rally held
along Ayala Avenue and Paseo de Roxas Street in Makati City. 12

According to petitioner Kilusang Mayo Uno, the police cited PP 1017 as the ground for the
dispersal of their assemblies.

During the dispersal of the rallyists along EDSA, police arrested (without warrant) petitioner
Randolf S. David, a professor at the University of the Philippines and newspaper columnist. Also
arrested was his companion, Ronald Llamas, president of party-list Akbayan.

At around 12:20 in the early morning of February 25, 2006, operatives of the Criminal
Investigation and Detection Group (CIDG) of the PNP, on the basis of PP 1017 and G.O. No. 5,
raided the Daily Tribune offices in Manila. The raiding team confiscated news stories by
reporters, documents, pictures, and mock-ups of the Saturday issue. Policemen from Camp
Crame in Quezon City were stationed inside the editorial and business offices of the newspaper;
while policemen from the Manila Police District were stationed outside the building. 13

A few minutes after the search and seizure at the Daily Tribune offices, the police surrounded the
premises of another pro-opposition paper, Malaya, and its sister publication, the tabloid Abante.

The raid, according to Presidential Chief of Staff Michael Defensor, is "meant to show a ‘strong
presence,’ to tell media outlets not to connive or do anything that would help the rebels in
bringing down this government." The PNP warned that it would take over any media
organization that would not follow "standards set by the government during the state of national
emergency." Director General Lomibao stated that "if they do not follow the standards – and the
standards are - if they would contribute to instability in the government, or if they do not
subscribe to what is in General Order No. 5 and Proc. No. 1017 – we will recommend a
‘takeover.’" National Telecommunications’ Commissioner Ronald Solis urged television and
radio networks to "cooperate" with the government for the duration of the state of national
emergency. He asked for "balanced reporting" from broadcasters when covering the events
surrounding the coup attempt foiled by the government. He warned that his agency will not
hesitate to recommend the closure of any broadcast outfit that violates rules set out for media
coverage when the national security is threatened.14

Also, on February 25, 2006, the police arrested Congressman Crispin Beltran, representing
the Anakpawis Party and Chairman of Kilusang Mayo Uno (KMU), while leaving his farmhouse
in Bulacan. The police showed a warrant for his arrest dated 1985. Beltran’s lawyer explained
that the warrant, which stemmed from a case of inciting to rebellion filed during the Marcos
regime, had long been quashed. Beltran, however, is not a party in any of these petitions.

When members of petitioner KMU went to Camp Crame to visit Beltran, they were told they
could not be admitted because of PP 1017 and G.O. No. 5. Two members were arrested and
detained, while the rest were dispersed by the police.

Bayan Muna Representative Satur Ocampo eluded arrest when the police went after him during a
public forum at the Sulo Hotel in Quezon City. But his two drivers, identified as Roel and Art,
were taken into custody.

Retired Major General Ramon Montaño, former head of the Philippine Constabulary, was
arrested while with his wife and golfmates at the Orchard Golf and Country Club in Dasmariñas,
Cavite.

Attempts were made to arrest Anakpawis Representative Satur Ocampo, Representative Rafael
Mariano, Bayan Muna Representative Teodoro Casiño and Gabriela Representative Liza
Maza. Bayan Muna Representative Josel Virador was arrested at the PAL Ticket Office in Davao
City. Later, he was turned over to the custody of the House of Representatives where the
"Batasan 5" decided to stay indefinitely.

Let it be stressed at this point that the alleged violations of the rights of Representatives Beltran,
Satur Ocampo, et al., are not being raised in these petitions.

On March 3, 2006, President Arroyo issued PP 1021 declaring that the state of national
emergency has ceased to exist.

In the interim, these seven (7) petitions challenging the constitutionality of PP 1017 and G.O.
No. 5 were filed with this Court against the above-named respondents. Three (3) of these
petitions impleaded President Arroyo as respondent.

In G.R. No. 171396, petitioners Randolf S. David, et al. assailed PP 1017 on the grounds
that (1) it encroaches on the emergency powers of Congress; (2) itis a subterfuge to avoid the
constitutional requirements for the imposition of martial law; and (3) it violates the constitutional
guarantees of freedom of the press, of speech and of assembly.

In G.R. No. 171409, petitioners Ninez Cacho-Olivares and Tribune Publishing Co.,
Inc. challenged the CIDG’s act of raiding the Daily Tribune offices as a clear case of
"censorship" or "prior restraint." They also claimed that the term "emergency" refers only to
tsunami, typhoon, hurricane and similar occurrences, hence, there is "absolutely no emergency"
that warrants the issuance of PP 1017.

In G.R. No. 171485, petitioners herein are Representative Francis Joseph G. Escudero, and
twenty one (21) other members of the House of Representatives, including Representatives Satur
Ocampo, Rafael Mariano, Teodoro Casiño, Liza Maza, and Josel Virador. They asserted that PP
1017 and G.O. No. 5 constitute "usurpation of legislative powers"; "violation of freedom of
expression" and "a declaration of martial law." They alleged that President Arroyo "gravely
abused her discretion in calling out the armed forces without clear and verifiable factual basis of
the possibility of lawless violence and a showing that there is necessity to do so."

In G.R. No. 171483,petitioners KMU, NAFLU-KMU, and their members averred that PP 1017
and G.O. No. 5 are unconstitutional because (1) they arrogate unto President Arroyo the power to
enact laws and decrees; (2) their issuance was without factual basis; and (3) they violate freedom
of expression and the right of the people to peaceably assemble to redress their grievances.

In G.R. No. 171400, petitioner Alternative Law Groups, Inc. (ALGI) alleged that PP 1017 and
G.O. No. 5 are unconstitutional because they violate (a) Section 415 of Article II, (b) Sections
1,16 2,17 and 418 of Article III, (c) Section 2319 of Article VI, and (d) Section 1720 of Article XII
of the Constitution.

In G.R. No. 171489, petitioners Jose Anselmo I. Cadiz et al., alleged that PP 1017 is an
"arbitrary and unlawful exercise by the President of her Martial Law powers." And assuming
that PP 1017 is not really a declaration of Martial Law, petitioners argued that "it amounts to an
exercise by the President of emergency powers without congressional approval." In addition,
petitioners asserted that PP 1017 "goes beyond the nature and function of a proclamation as
defined under the Revised Administrative Code."

And lastly, in G.R. No. 171424,petitionerLoren B. Legarda maintained that PP 1017 and G.O.
No. 5 are "unconstitutional for being violative of the freedom of expression, including its cognate
rights such as freedom of the press and the right to access to information on matters of public
concern, all guaranteed under Article III, Section 4 of the 1987 Constitution." In this regard, she
stated that these issuances prevented her from fully prosecuting her election protest pending
before the Presidential Electoral Tribunal.

In respondents’ Consolidated Comment, the Solicitor General countered that: first, the petitions
should be dismissed for being moot; second,petitioners in G.R. Nos. 171400 (ALGI), 171424
(Legarda), 171483 (KMU et al.), 171485 (Escudero et al.) and 171489 (Cadiz et al.) have no
legal standing; third, it is not necessary for petitioners to implead President Arroyo as
respondent; fourth, PP 1017 has constitutional and legal basis; and fifth, PP 1017 does not violate
the people’s right to free expression and redress of grievances.

On March 7, 2006, the Court conducted oral arguments and heard the parties on the above
interlocking issues which may be summarized as follows:

A. PROCEDURAL:

1) Whether the issuance of PP 1021 renders the petitions moot and academic.

2) Whether petitioners in 171485 (Escudero et al.), G.R. Nos.

171400 (ALGI), 171483 (KMU et al.), 171489 (Cadiz et al.), and 171424 (Legarda) have
legal standing.

B. SUBSTANTIVE:

1) Whetherthe Supreme Court can review the factual bases of PP 1017.

2) Whether PP 1017 and G.O. No. 5 are unconstitutional.

a. Facial Challenge

b. Constitutional Basis

c. As Applied Challenge

A. PROCEDURAL

First, we must resolve the procedural roadblocks.

I- Moot and Academic Principle

One of the greatest contributions of the American system to this country is the concept of judicial
review enunciated in Marbury v. Madison.21 This concept rests on the extraordinary simple
foundation --

The Constitution is the supreme law. It was ordained by the people, the ultimate source of all
political authority. It confers limited powers on the national government. x x x If the
government consciously or unconsciously oversteps these limitations there must be some
authority competent to hold it in control, to thwart its unconstitutional attempt, and thus to
vindicate and preserve inviolate the will of the people as expressed in the Constitution. This
power the courts exercise. This is the beginning and the end of the theory of judicial
review.22

But the power of judicial review does not repose upon the courts a "self-starting
capacity."23 Courts may exercise such power only when the following requisites are
present: first, there must be an actual case or controversy; second, petitioners have to raise a
question of constitutionality; third, the constitutional question must be raised at the earliest
opportunity; and fourth, the decision of the constitutional question must be necessary to the
determination of the case itself.24

Respondents maintain that the first and second requisites are absent, hence, we shall limit our
discussion thereon.

An actual case or controversy involves a conflict of legal right, an opposite legal claims
susceptible of judicial resolution. It is "definite and concrete, touching the legal relations of
parties having adverse legal interest;" a real and substantial controversy admitting of specific
relief.25 The Solicitor General refutes the existence of such actual case or controversy,
contending that the present petitions were rendered "moot and academic" by President Arroyo’s
issuance of PP 1021.

Such contention lacks merit.

A moot and academic case is one that ceases to present a justiciable controversy by virtue of
supervening events,26 so that a declaration thereon would be of no practical use or
value.27 Generally, courts decline jurisdiction over such case28 or dismiss it on ground of
mootness.29

The Court holds that President Arroyo’s issuance of PP 1021 did not render the present petitions
moot and academic. During the eight (8) days that PP 1017 was operative, the police officers,
according to petitioners, committed illegal acts in implementing it. Are PP 1017 and G.O. No. 5
constitutional or valid? Do they justify these alleged illegal acts? These are the vital issues
that must be resolved in the present petitions. It must be stressed that "an unconstitutional act is
not a law, it confers no rights, it imposes no duties, it affords no protection; it is in legal
contemplation, inoperative."30

The "moot and academic" principle is not a magical formula that can automatically dissuade the
courts in resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there
is a grave violation of the Constitution;31 second, the exceptional character of the situation and
the paramount public interest is involved;32 third, when constitutional issue raised requires
formulation of controlling principles to guide the bench, the bar, and the public; 33 and fourth, the
case is capable of repetition yet evading review.34

All the foregoing exceptions are present here and justify this Court’s assumption of jurisdiction
over the instant petitions. Petitioners alleged that the issuance of PP 1017 and G.O. No. 5
violates the Constitution. There is no question that the issues being raised affect the public’s
interest, involving as they do the people’s basic rights to freedom of expression, of assembly and
of the press. Moreover, the Court has the duty to formulate guiding and controlling constitutional
precepts, doctrines or rules. It has the symbolic function of educating the bench and the bar, and
in the present petitions, the military and the police, on the extent of the protection given by
constitutional guarantees.35 And lastly, respondents’ contested actions are capable of repetition.
Certainly, the petitions are subject to judicial review.
In their attempt to prove the alleged mootness of this case, respondents cited Chief Justice
Artemio V. Panganiban’s Separate Opinion in Sanlakas v. Executive Secretary.36 However, they
failed to take into account the Chief Justice’s very statement that an otherwise "moot" case may
still be decided "provided the party raising it in a proper case has been and/or continues to be
prejudiced or damaged as a direct result of its issuance." The present case falls right within this
exception to the mootness rule pointed out by the Chief Justice.

II- Legal Standing

In view of the number of petitioners suing in various personalities, the Court deems it imperative
to have a more than passing discussion on legal standing or locus standi.

Locus standi is defined as "a right of appearance in a court of justice on a given question."37 In
private suits, standing is governed by the "real-parties-in interest" rule as contained in Section 2,
Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that "every action must be
prosecuted or defended in the name of the real party in interest." Accordingly, the "real-
party-in interest" is "the party who stands to be benefited or injured by the judgment in the
suit or the party entitled to the avails of the suit."38 Succinctly put, the plaintiff’s standing is
based on his own right to the relief sought.

The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a
"public right" in assailing an allegedly illegal official action, does so as a representative of the
general public. He may be a person who is affected no differently from any other person. He
could be suing as a "stranger," or in the category of a "citizen," or ‘taxpayer." In either case, he
has to adequately show that he is entitled to seek judicial protection. In other words, he has to
make out a sufficient interest in the vindication of the public order and the securing of relief as a
"citizen" or "taxpayer.

Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public
actions. The distinction was first laid down in Beauchamp v. Silk,39 where it was held that the
plaintiff in a taxpayer’s suit is in a different category from the plaintiff in a citizen’s suit. In the
former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is
but the mere instrument of the public concern. As held by the New York Supreme Court
in People ex rel Case v. Collins:40 "In matter of mere public right, however…the people are
the real parties…It is at least the right, if not the duty, of every citizen to interfere and see
that a public offence be properly pursued and punished, and that a public grievance be
remedied." With respect to taxpayer’s suits, Terr v. Jordan41 held that "the right of a citizen
and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds
to his injury cannot be denied."

However, to prevent just about any person from seeking judicial interference in any official
policy or act with which he disagreed with, and thus hinders the activities of governmental
agencies engaged in public service, the United State Supreme Court laid down the more stringent
"direct injury" test in Ex Parte Levitt,42 later reaffirmed in Tileston v. Ullman.43 The same Court
ruled that for a private individual to invoke the judicial power to determine the validity of an
executive or legislative action, he must show that he has sustained a direct injury as a result
of that action, and it is not sufficient that he has a general interest common to all members
of the public.

This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera,44 it held that
the person who impugns the validity of a statute must have "a personal and substantial interest
in the case such that he has sustained, or will sustain direct injury as a result."
The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the
Senate,45 Manila Race Horse Trainers’ Association v. De la Fuente,46 Pascual v. Secretary of
Public Works47 and Anti-Chinese League of the Philippines v. Felix. 48

However, being a mere procedural technicality, the requirement of locus standi may be waived
by the Court in the exercise of its discretion. This was done in the 1949 Emergency Powers
Cases, Araneta v. Dinglasan,49 where the "transcendental importance" of the cases prompted
the Court to act liberally. Such liberality was neither a rarity nor accidental. In Aquino v.
Comelec,50 this Court resolved to pass upon the issues raised due to the "far-reaching
implications" of the petition notwithstanding its categorical statement that petitioner therein had
no personality to file the suit. Indeed, there is a chain of cases where this liberal policy has been
observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute
actions involving the constitutionality or validity of laws, regulations and rulings. 51

Thus, the Court has adopted a rule that even where the petitioners have failed to show direct
injury, they have been allowed to sue under the principle of "transcendental importance."
Pertinent are the following cases:

(1) Chavez v. Public Estates Authority,52 where the Court ruled that the enforcement of
the constitutional right to information and the equitable diffusion of natural
resources are matters of transcendental importance which clothe the petitioner
with locus standi;

(2) Bagong Alyansang Makabayan v. Zamora,53 wherein the Court held that "given the
transcendental importance of the issues involved, the Court may relax the standing
requirements and allow the suit to prosper despite the lack of direct injury to the
parties seeking judicial review" of the Visiting Forces Agreement;

(3) Lim v. Executive Secretary,54 while the Court noted that the petitioners may not file
suit in their capacity as taxpayers absent a showing that "Balikatan 02-01" involves the
exercise of Congress’ taxing or spending powers, it reiterated its ruling in Bagong
Alyansang Makabayan v. Zamora,55that in cases of transcendental importance, the
cases must be settled promptly and definitely and standing requirements may be
relaxed.

By way of summary, the following rules may be culled from the cases decided by this Court.
Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, provided
that the following requirements are met:

(1) the cases involve constitutional issues;

 (2) for taxpayers, there must be a claim of illegal disbursement of public funds or that
the tax measure is unconstitutional;

(3) for voters, there must be a showing of obvious interest in the validity of the election
law in question;

(4) for concerned citizens, there must be a showing that the issues raised are of
transcendental importance which must be settled early; and

(5) for legislators, there must be a claim that the official action complained of infringes
upon their prerogatives as legislators.

Significantly, recent decisions show a certain toughening in the Court’s attitude toward legal
standing.

In Kilosbayan, Inc. v. Morato,56 the Court ruled that the status of Kilosbayan as a people’s
organization does not give it the requisite personality to question the validity of the on-line
lottery contract, more so where it does not raise any issue of constitutionality. Moreover, it
cannot sue as a taxpayer absent any allegation that public funds are being misused. Nor can it sue
as a concerned citizen as it does not allege any specific injury it has suffered.

In Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Comelec,57 the Court
reiterated the "direct injury" test with respect to concerned citizens’ cases involving
constitutional issues. It held that "there must be a showing that the citizen personally suffered
some actual or threatened injury arising from the alleged illegal official act."

In Lacson v. Perez,58 the Court ruled that one of the petitioners, Laban ng Demokratikong
Pilipino (LDP), is not a real party-in-interest as it had not demonstrated any injury to itself or to
its leaders, members or supporters.

In Sanlakas v. Executive Secretary,59 the Court ruled that only the petitioners who are members
of Congress have standing to sue, as they claim that the President’s declaration of a state of
rebellion is a usurpation of the emergency powers of Congress, thus impairing their
legislative powers. As to petitioners Sanlakas, Partido Manggagawa, and Social Justice Society,
the Court declared them to be devoid of standing, equating them with the LDP in Lacson.

Now, the application of the above principles to the present petitions.

The locus standi of petitioners in G.R. No. 171396, particularly David and Llamas, is beyond
doubt. The same holds true with petitioners in G.R. No. 171409, Cacho-Olivares
and Tribune Publishing Co. Inc. They alleged "direct injury" resulting from "illegal arrest" and
"unlawful search" committed by police operatives pursuant to PP 1017. Rightly so, the Solicitor
General does not question their legal standing.

In G.R. No. 171485, the opposition Congressmen alleged there was usurpation of legislative
powers. They also raised the issue of whether or not the concurrence of Congress is necessary
whenever the alarming powers incident to Martial Law are used. Moreover, it is in the interest of
justice that those affected by PP 1017 can be represented by their Congressmen in bringing to the
attention of the Court the alleged violations of their basic rights.

In G.R. No. 171400, (ALGI), this Court applied the liberality rule in Philconsa v.
Enriquez,60 Kapatiran Ng Mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v.
Tan,61 Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform,62 Basco v. Philippine Amusement and Gaming Corporation, 63 and Tañada v.
Tuvera,64 that when the issue concerns a public right, it is sufficient that the petitioner is a citizen
and has an interest in the execution of the laws.

In G.R. No. 171483, KMU’s assertion that PP 1017 and G.O. No. 5 violated its right to peaceful
assembly may be deemed sufficient to give it legal standing. Organizations may be granted
standing to assert the rights of their members.65 We take judicial notice of the announcement
by the Office of the President banning all rallies and canceling all permits for public assemblies
following the issuance of PP 1017 and G.O. No. 5.

In G.R. No. 171489, petitioners, Cadiz et al., who are national officers of the Integrated Bar of
the Philippines (IBP) have no legal standing, having failed to allege any direct or potential injury
which the IBP as an institution or its members may suffer as a consequence of the issuance of PP
No. 1017 and G.O. No. 5. In Integrated Bar of the Philippines v. Zamora,66 the Court held that
the mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while
undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an
interest which is shared by other groups and the whole citizenry. However, in view of the
transcendental importance of the issue, this Court declares that petitioner have locus standi.

In G.R. No. 171424, Loren Legarda has no personality as a taxpayer to file the instant petition as
there are no allegations of illegal disbursement of public funds. The fact that she is a former
Senator is of no consequence. She can no longer sue as a legislator on the allegation that her
prerogatives as a lawmaker have been impaired by PP 1017 and G.O. No. 5. Her claim that she is
a media personality will not likewise aid her because there was no showing that the enforcement
of these issuances prevented her from pursuing her occupation. Her submission that she has
pending electoral protest before the Presidential Electoral Tribunal is likewise of no relevance.
She has not sufficiently shown that PP 1017 will affect the proceedings or result of her case. But
considering once more the transcendental importance of the issue involved, this Court may relax
the standing rules.

It must always be borne in mind that the question of locus standi is but corollary to the bigger
question of proper exercise of judicial power. This is the underlying legal tenet of the "liberality
doctrine" on legal standing. It cannot be doubted that the validity of PP No. 1017 and G.O. No. 5
is a judicial question which is of paramount importance to the Filipino people. To paraphrase
Justice Laurel, the whole of Philippine society now waits with bated breath the ruling of this
Court on this very critical matter. The petitions thus call for the application of the
"transcendental importance" doctrine, a relaxation of the standing requirements for the
petitioners in the "PP 1017 cases."1avvphil.net
This Court holds that all the petitioners herein have locus standi.

Incidentally, it is not proper to implead President Arroyo as respondent. Settled is the doctrine
that the President, during his tenure of office or actual incumbency, 67 may not be sued
in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It
will degrade the dignity of the high office of the President, the Head of State, if he can be
dragged into court litigations while serving as such. Furthermore, it is important that he be freed
from any form of harassment, hindrance or distraction to enable him to fully attend to the
performance of his official duties and functions. Unlike the legislative and judicial branch, only
one constitutes the executive branch and anything which impairs his usefulness in the discharge
of the many great and important duties imposed upon him by the Constitution necessarily
impairs the operation of the Government. However, this does not mean that the President is not
accountable to anyone. Like any other official, he remains accountable to the people68 but he
may be removed from office only in the mode provided by law and that is by impeachment. 69

B. SUBSTANTIVE

I. Review of Factual Bases

Petitioners maintain that PP 1017 has no factual basis. Hence, it was not "necessary" for
President Arroyo to issue such Proclamation.

The issue of whether the Court may review the factual bases of the President’s exercise of his
Commander-in-Chief power has reached its distilled point - from the indulgent days of Barcelon
v. Baker70 and Montenegro v. Castaneda71 to the volatile era of Lansang v. Garcia,72 Aquino, Jr.
v. Enrile,73 and Garcia-Padilla v. Enrile.74 The tug-of-war always cuts across the line defining
"political questions," particularly those questions "in regard to which full discretionary authority
has been delegated to the legislative or executive branch of the government."75 Barcelon and
Montenegro were in unison in declaring that the authority to decide whether an exigency has
arisen belongs to the President and his decision is final and conclusive on the
courts. Lansang took the opposite view. There, the members of the Court were unanimous in the
conviction that the Court has the authority to inquire into the existence of factual bases in order
to determine their constitutional sufficiency. From the principle of separation of powers, it
shifted the focus to the system of checks and balances, "under which the President is
supreme, x x x only if and when he acts within the sphere allotted to him by the Basic Law,
and the authority to determine whether or not he has so acted is vested in the Judicial
Department, which in this respect, is, in turn, constitutionally supreme."76 In 1973, the
unanimous Court of Lansang was divided in Aquino v. Enrile.77 There, the Court was almost
evenly divided on the issue of whether the validity of the imposition of Martial Law is a political
or justiciable question.78 Then came Garcia-Padilla v. Enrile which greatly diluted Lansang. It
declared that there is a need to re-examine the latter case, ratiocinating that "in times of war or
national emergency, the President must be given absolute control for the very life of the
nation and the government is in great peril. The President, it intoned, is answerable only to
his conscience, the People, and God."79
The Integrated Bar of the Philippines v. Zamora80 -- a recent case most pertinent to these cases at
bar -- echoed a principle similar to Lansang. While the Court considered the President’s "calling-
out" power as a discretionary power solely vested in his wisdom, it stressed that "this does not
prevent an examination of whether such power was exercised within permissible
constitutional limits or whether it was exercised in a manner constituting grave abuse of
discretion."This ruling is mainly a result of the Court’s reliance on Section 1, Article VIII of
1987 Constitution which fortifies the authority of the courts to determine in an appropriate action
the validity of the acts of the political departments. Under the new definition of judicial power,
the courts are authorized not only "to settle actual controversies involving rights which are
legally demandable and enforceable," but also "to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the government." The latter part of the authority represents a
broadening of judicial power to enable the courts of justice to review what was before a
forbidden territory, to wit, the discretion of the political departments of the government. 81 It
speaks of judicial prerogative not only in terms of power but also of duty.82

As to how the Court may inquire into the President’s exercise of power, Lansang adopted the test
that "judicial inquiry can go no further than to satisfy the Court not that the President’s decision
is correct," but that "the President did not act arbitrarily." Thus, the standard laid down is not
correctness, but arbitrariness.83 In Integrated Bar of the Philippines, this Court further ruled that
"it is incumbent upon the petitioner to show that the President’s decision is totally bereft of
factual basis" and that if he fails, by way of proof, to support his assertion, then "this Court
cannot undertake an independent investigation beyond the pleadings."

Petitioners failed to show that President Arroyo’s exercise of the calling-out power, by issuing
PP 1017, is totally bereft of factual basis. A reading of the Solicitor General’s Consolidated
Comment and Memorandum shows a detailed narration of the events leading to the issuance of
PP 1017, with supporting reports forming part of the records. Mentioned are the escape of the
Magdalo Group, their audacious threat of the Magdalo D-Day, the defections in the military,
particularly in the Philippine Marines, and the reproving statements from the communist leaders.
There was also the Minutes of the Intelligence Report and Security Group of the Philippine
Army showing the growing alliance between the NPA and the military. Petitioners presented
nothing to refute such events. Thus, absent any contrary allegations, the Court is convinced that
the President was justified in issuing PP 1017 calling for military aid.

Indeed, judging the seriousness of the incidents, President Arroyo was not expected to simply
fold her arms and do nothing to prevent or suppress what she believed was lawless violence,
invasion or rebellion. However, the exercise of such power or duty must not stifle liberty.

II. Constitutionality of PP 1017 and G.O. No. 5

Doctrines of Several Political Theorists
on the Power of the President in Times of Emergency

This case brings to fore a contentious subject -- the power of the President in times of
emergency. A glimpse at the various political theories relating to this subject provides an
adequate backdrop for our ensuing discussion.
John Locke, describing the architecture of civil government, called upon the English doctrine of
prerogative to cope with the problem of emergency. In times of danger to the nation, positive law
enacted by the legislature might be inadequate or even a fatal obstacle to the promptness of
action necessary to avert catastrophe. In these situations, the Crown retained a prerogative
"power to act according to discretion for the public good, without the proscription of the
law and sometimes even against it."84 But Locke recognized that this moral restraint might not
suffice to avoid abuse of prerogative powers. Who shall judge the need for resorting to the
prerogative and how may its abuse be avoided? Here, Locke readily admitted defeat,
suggesting that "the people have no other remedy in this, as in all other cases where they
have no judge on earth, but to appeal to Heaven."85

Jean-Jacques Rousseau also assumed the need for temporary suspension of democratic processes
of government in time of emergency. According to him:

The inflexibility of the laws, which prevents them from adopting themselves to circumstances,
may, in certain cases, render them disastrous and make them bring about, at a time of crisis, the
ruin of the State…

It is wrong therefore to wish to make political institutions as strong as to render it impossible to

suspend their operation. Even Sparta allowed its law to lapse...

If the peril is of such a kind that the paraphernalia of the laws are an obstacle to their
preservation, the method is to nominate a supreme lawyer, who shall silence all the laws and
suspend for a moment the sovereign authority. In such a case, there is no doubt about the general
will, and it clear that the people’s first intention is that the State shall not perish.86

Rosseau did not fear the abuse of the emergency dictatorship or "supreme magistracy" as he
termed it. For him, it would more likely be cheapened by "indiscreet use." He was unwilling to
rely upon an "appeal to heaven." Instead, he relied upon a tenure of office of prescribed
duration to avoid perpetuation of the dictatorship.87

John Stuart Mill concluded his ardent defense of representative government: "I am far from
condemning, in cases of extreme necessity, the assumption of absolute power in the form of
a temporary dictatorship."88

Nicollo Machiavelli’s view of emergency powers, as one element in the whole scheme of limited
government, furnished an ironic contrast to the Lockean theory of prerogative. He recognized
and attempted to bridge this chasm in democratic political theory, thus:

Now, in a well-ordered society, it should never be necessary to resort to extra –constitutional

measures; for although they may for a time be beneficial, yet the precedent is pernicious, for if
the practice is once established for good objects, they will in a little while be disregarded under
that pretext but for evil purposes. Thus, no republic will ever be perfect if she has not by law
provided for everything, having a remedy for every emergency and fixed rules for applying it. 89
Machiavelli – in contrast to Locke, Rosseau and Mill – sought to incorporate into the constitution
a regularized system of standby emergency powers to be invoked with suitable checks and
controls in time of national danger. He attempted forthrightly to meet the problem of combining
a capacious reserve of power and speed and vigor in its application in time of emergency, with
effective constitutional restraints.90

Contemporary political theorists, addressing themselves to the problem of response to emergency

by constitutional democracies, have employed the doctrine of constitutional
dictatorship.91 Frederick M. Watkins saw "no reason why absolutism should not be used as a
means for the defense of liberal institutions," provided it "serves to protect established
institutions from the danger of permanent injury in a period of temporary emergency and
is followed by a prompt return to the previous forms of political life."92 He recognized the
two (2) key elements of the problem of emergency governance, as well as all constitutional
governance: increasing administrative powers of the executive, while at the same
time "imposing limitation upon that power."93 Watkins placed his real faith in a scheme of
constitutional dictatorship. These are the conditions of success of such a dictatorship: "The
period of dictatorship must be relatively short…Dictatorship should always be strictly
legitimate in character…Final authority to determine the need for dictatorship in any given
case must never rest with the dictator himself…"94 and the objective of such an emergency
dictatorship should be "strict political conservatism."

Carl J. Friedrich cast his analysis in terms similar to those of Watkins.95 "It is a problem of
concentrating power – in a government where power has consciously been divided – to cope
with… situations of unprecedented magnitude and gravity. There must be a broad grant of
powers, subject to equally strong limitations as to who shall exercise such powers, when, for how
long, and to what end."96 Friedrich, too, offered criteria for judging the adequacy of any of
scheme of emergency powers, to wit: "The emergency executive must be appointed by
constitutional means – i.e., he must be legitimate; he should not enjoy power to determine
the existence of an emergency; emergency powers should be exercised under a strict time
limitation; and last, the objective of emergency action must be the defense of the
constitutional order."97

Clinton L. Rossiter, after surveying the history of the employment of emergency powers in Great
Britain, France, Weimar, Germany and the United States, reverted to a description of a scheme
of "constitutional dictatorship" as solution to the vexing problems presented by
emergency.98 Like Watkins and Friedrich, he stated a priori the conditions of success of the
"constitutional dictatorship," thus:

1) No general regime or particular institution of constitutional dictatorship should be

initiated unless it is necessary or even indispensable to the preservation of the State and
its constitutional order…

2) …the decision to institute a constitutional dictatorship should never be in the hands of

the man or men who will constitute the dictator…
 3) No government should initiate a constitutional dictatorship without making specific
provisions for its termination…

4) …all uses of emergency powers and all readjustments in the organization of the
government should be effected in pursuit of constitutional or legal requirements…

5) … no dictatorial institution should be adopted, no right invaded, no regular procedure

altered any more than is absolutely necessary for the conquest of the particular crisis . . .

6) The measures adopted in the prosecution of the a constitutional dictatorship should

never be permanent in character or effect…

7) The dictatorship should be carried on by persons representative of every part of the

citizenry interested in the defense of the existing constitutional order. . .

8) Ultimate responsibility should be maintained for every action taken under a

constitutional dictatorship. . .

9) The decision to terminate a constitutional dictatorship, like the decision to institute one
should never be in the hands of the man or men who constitute the dictator. . .

10) No constitutional dictatorship should extend beyond the termination of the crisis for
which it was instituted…

11) …the termination of the crisis must be followed by a complete return as possible to
the political and governmental conditions existing prior to the initiation of the
constitutional dictatorship…99

Rossiter accorded to legislature a far greater role in the oversight exercise of emergency powers
than did Watkins. He would secure to Congress final responsibility for declaring the existence or
termination of an emergency, and he places great faith in the effectiveness of congressional
investigating committees.100

Scott and Cotter, in analyzing the above contemporary theories in light of recent experience,
were one in saying that, "the suggestion that democracies surrender the control of
government to an authoritarian ruler in time of grave danger to the nation is not based
upon sound constitutional theory." To appraise emergency power in terms of constitutional
dictatorship serves merely to distort the problem and hinder realistic analysis. It matters not
whether the term "dictator" is used in its normal sense (as applied to authoritarian rulers) or is
employed to embrace all chief executives administering emergency powers. However used,
"constitutional dictatorship" cannot be divorced from the implication of suspension of the
processes of constitutionalism. Thus, they favored instead the "concept of constitutionalism"
articulated by Charles H. McIlwain:

A concept of constitutionalism which is less misleading in the analysis of problems of

emergency powers, and which is consistent with the findings of this study, is that formulated by
Charles H. McIlwain. While it does not by any means necessarily exclude some indeterminate
limitations upon the substantive powers of government, full emphasis is placed upon procedural
limitations, and political responsibility. McIlwain clearly recognized the need to repose
adequate power in government. And in discussing the meaning of constitutionalism, he insisted
that the historical and proper test of constitutionalism was the existence of adequate
processes for keeping government responsible. He refused to equate constitutionalism with the
enfeebling of government by an exaggerated emphasis upon separation of powers and
substantive limitations on governmental power. He found that the really effective checks on
despotism have consisted not in the weakening of government but, but rather in the limiting of
it; between which there is a great and very significant difference. In associating
constitutionalism with "limited" as distinguished from "weak" government, McIlwain
meant government limited to the orderly procedure of law as opposed to the processes of
force. The two fundamental correlative elements of constitutionalism for which all lovers of
liberty must yet fight are the legal limits to arbitrary power and a complete political
responsibility of government to the governed.101

In the final analysis, the various approaches to emergency of the above political theorists –- from
Lock’s "theory of prerogative," to Watkins’ doctrine of "constitutional dictatorship" and,
eventually, to McIlwain’s "principle of constitutionalism" --- ultimately aim to solve one real
problem in emergency governance, i.e., that of allotting increasing areas of discretionary
power to the Chief Executive, while insuring that such powers will be exercised with a sense
of political responsibility and under effective limitations and checks.

Our Constitution has fairly coped with this problem. Fresh from the fetters of a repressive
regime, the 1986 Constitutional Commission, in drafting the 1987 Constitution, endeavored to
create a government in the concept of Justice Jackson’s "balanced power
structure."102 Executive, legislative, and judicial powers are dispersed to the President, the
Congress, and the Supreme Court, respectively. Each is supreme within its own sphere. But
none has the monopoly of power in times of emergency. Each branch is given a role to serve
as limitation or check upon the other. This system does not weaken the President, it
just limits his power, using the language of McIlwain. In other words, in times of emergency,
our Constitution reasonably demands that we repose a certain amount of faith in the basic
integrity and wisdom of the Chief Executive but, at the same time, it obliges him to operate
within carefully prescribed procedural limitations.

a. "Facial Challenge"

Petitioners contend that PP 1017 is void on its face because of its "overbreadth." They claim that
its enforcement encroached on both unprotected and protected rights under Section 4, Article III
of the Constitution and sent a "chilling effect" to the citizens.

A facial review of PP 1017, using the overbreadth doctrine, is uncalled for.

First and foremost, the overbreadth doctrine is an analytical tool developed for testing "on their
faces" statutes in free speech cases, also known under the American Law as First Amendment
cases.103
A plain reading of PP 1017 shows that it is not primarily directed to speech or even speech-
related conduct. It is actually a call upon the AFP to prevent or suppress all forms
of lawless violence. In United States v. Salerno,104 the US Supreme Court held that "we have
not recognized an ‘overbreadth’ doctrine outside the limited context of the First
Amendment" (freedom of speech).

Moreover, the overbreadth doctrine is not intended for testing the validity of a law that "reflects
legitimate state interest in maintaining comprehensive control over harmful, constitutionally
unprotected conduct." Undoubtedly, lawless violence, insurrection and rebellion are considered
"harmful" and "constitutionally unprotected conduct." In Broadrick v. Oklahoma,105 it was held:

It remains a ‘matter of no little difficulty’ to determine when a law may properly be held void on
its face and when ‘such summary action’ is inappropriate. But the plain import of our cases is,
at the very least, that facial overbreadth adjudication is an exception to our traditional
rules of practice and that its function, a limited one at the outset, attenuates as the
otherwise unprotected behavior that it forbids the State to sanction moves from ‘pure
speech’ toward conduct and that conduct –even if expressive – falls within the scope of
otherwise valid criminal laws that reflect legitimate state interests in maintaining
comprehensive controls over harmful, constitutionally unprotected conduct.

Thus, claims of facial overbreadth are entertained in cases involving statutes which, by their
terms, seek to regulate only "spoken words" and again, that "overbreadth claims, if
entertained at all, have been curtailed when invoked against ordinary criminal laws that
are sought to be applied to protected conduct."106 Here, the incontrovertible fact remains that
PP 1017 pertains to a spectrum of conduct, not free speech, which is manifestly subject to state
regulation.

Second, facial invalidation of laws is considered as "manifestly strong medicine," to be used

"sparingly and only as a last resort," and is "generally disfavored;"107 The reason for this is
obvious. Embedded in the traditional rules governing constitutional adjudication is the principle
that a person to whom a law may be applied will not be heard to challenge a law on the ground
that it may conceivably be applied unconstitutionally to others, i.e., in other situations not
before the Court.108 A writer and scholar in Constitutional Law explains further:

The most distinctive feature of the overbreadth technique is that it marks an exception to
some of the usual rules of constitutional litigation. Ordinarily, a particular litigant claims
that a statute is unconstitutional as applied to him or her; if the litigant prevails, the courts
carve away the unconstitutional aspects of the law by invalidating its improper applications
on a case to case basis. Moreover, challengers to a law are not permitted to raise the rights
of third parties and can only assert their own interests. In overbreadth analysis, those rules
give way; challenges are permitted to raise the rights of third parties; and the court
invalidates the entire statute "on its face," not merely "as applied for" so that the overbroad law
becomes unenforceable until a properly authorized court construes it more narrowly. The factor
that motivates courts to depart from the normal adjudicatory rules is the concern with the
"chilling;" deterrent effect of the overbroad statute on third parties not courageous enough to
bring suit. The Court assumes that an overbroad law’s "very existence may cause others not
before the court to refrain from constitutionally protected speech or expression." An overbreadth
ruling is designed to remove that deterrent effect on the speech of those third parties.

In other words, a facial challenge using the overbreadth doctrine will require the Court to
examine PP 1017 and pinpoint its flaws and defects, not on the basis of its actual operation to
petitioners, but on the assumption or prediction that its very existence may cause others not
before the Court to refrain from constitutionally protected speech or expression. In Younger v.
Harris,109 it was held that:

[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction
of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for
the judiciary. The combination of the relative remoteness of the controversy, the impact on
the legislative process of the relief sought, and above all the speculative and amorphous
nature of the required line-by-line analysis of detailed statutes,...ordinarily results in a kind
of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they
might be decided.

And third, a facial challenge on the ground of overbreadth is the most difficult challenge to
mount successfully, since the challenger must establish that there can be no instance when the
assailed law may be valid. Here, petitioners did not even attempt to show whether this situation
exists.

Petitioners likewise seek a facial review of PP 1017 on the ground of vagueness. This, too, is
unwarranted.

Related to the "overbreadth" doctrine is the "void for vagueness doctrine" which holds that "a
law is facially invalid if men of common intelligence must necessarily guess at its meaning
and differ as to its application."110 It is subject to the same principles governing overbreadth
doctrine. For one, it is also an analytical tool for testing "on their faces" statutes in free speech
cases. And like overbreadth, it is said that a litigant may challenge a statute on its face only if it
is vague in all its possible applications. Again, petitioners did not even attempt to show that
PP 1017 is vague in all its application. They also failed to establish that men of common
intelligence cannot understand the meaning and application of PP 1017.

b. Constitutional Basis of PP 1017

Now on the constitutional foundation of PP 1017.

The operative portion of PP 1017 may be divided into three important provisions, thus:

First provision:

"by virtue of the power vested upon me by Section 18, Artilce VII … do hereby command the
Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent
or suppress all forms of lawless violence as well any act of insurrection or rebellion"
Second provision:

"and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated
by me personally or upon my direction;"

Third provision:

"as provided in Section 17, Article XII of the Constitution do hereby declare a State of National
Emergency."

First Provision: Calling-out Power

The first provision pertains to the President’s calling-out power. In Sanlakas v. Executive
Secretary,111 this Court, through Mr. Justice Dante O. Tinga, held that Section 18, Article VII of
the Constitution reproduced as follows:

Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines
and whenever it becomes necessary, he may call out such armed forces to prevent or
suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the
public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of
the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within
forty-eight hours from the proclamation of martial law or the suspension of the privilege of the
writ of habeas corpus, the President shall submit a report in person or in writing to the Congress.
The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or
special session, may revoke such proclamation or suspension, which revocation shall not be set
aside by the President. Upon the initiative of the President, the Congress may, in the same
manner, extend such proclamation or suspension for a period to be determined by the Congress,
if the invasion or rebellion shall persist and public safety requires it.

The Congress, if not in session, shall within twenty-four hours following such proclamation or
suspension, convene in accordance with its rules without need of a call.

The Supreme Court may review, in an appropriate proceeding filed by any citizen, the
sufficiency of the factual bases of the proclamation of martial law or the suspension of the
privilege of the writ or the extension thereof, and must promulgate its decision thereon within
thirty days from its filing.

A state of martial law does not suspend the operation of the Constitution, nor supplant the
functioning of the civil courts or legislative assemblies, nor authorize the conferment of
jurisdiction on military courts and agencies over civilians where civil courts are able to function,
nor automatically suspend the privilege of the writ.

The suspension of the privilege of the writ shall apply only to persons judicially charged for
rebellion or offenses inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any person thus arrested or detained shall be
judicially charged within three days, otherwise he shall be released.

grants the President, as Commander-in-Chief, a "sequence" of graduated powers. From the most
to the least benign, these are: the calling-out power, the power to suspend the privilege of the
writ of habeas corpus, and the power to declare Martial Law. Citing Integrated Bar of the
Philippines v. Zamora,112 the Court ruled that the only criterion for the exercise of the calling-out
power is that "whenever it becomes necessary," the President may call the armed forces "to
prevent or suppress lawless violence, invasion or rebellion." Are these conditions present in
the instant cases? As stated earlier, considering the circumstances then prevailing, President
Arroyo found it necessary to issue PP 1017. Owing to her Office’s vast intelligence network, she
is in the best position to determine the actual condition of the country.

Under the calling-out power, the President may summon the armed forces to aid him in
suppressing lawless violence, invasion and rebellion. This involves ordinary police action. But
every act that goes beyond the President’s calling-out power is considered illegal or ultra vires.
For this reason, a President must be careful in the exercise of his powers. He cannot invoke a
greater power when he wishes to act under a lesser power. There lies the wisdom of our
Constitution, the greater the power, the greater are the limitations.

It is pertinent to state, however, that there is a distinction between the President’s authority to
declare a "state of rebellion" (in Sanlakas) and the authority to proclaim a state of national
emergency. While President Arroyo’s authority to declare a "state of rebellion" emanates from
her powers as Chief Executive, the statutory authority cited in Sanlakas was Section 4, Chapter
2, Book II of the Revised Administrative Code of 1987, which provides:

SEC. 4. – Proclamations. – Acts of the President fixing a date or declaring a status or condition
of public moment or interest, upon the existence of which the operation of a specific law or
regulation is made to depend, shall be promulgated in proclamations which shall have the force
of an executive order.

President Arroyo’s declaration of a "state of rebellion" was merely an act declaring a status or
condition of public moment or interest, a declaration allowed under Section 4 cited above. Such
declaration, in the words of Sanlakas, is harmless, without legal significance, and deemed not
written. In these cases, PP 1017 is more than that. In declaring a state of national emergency,
President Arroyo did not only rely on Section 18, Article VII of the Constitution, a provision
calling on the AFP to prevent or suppress lawless violence, invasion or rebellion. She also relied
on Section 17, Article XII, a provision on the State’s extraordinary power to take over privately-
owned public utility and business affected with public interest. Indeed, PP 1017 calls for the
exercise of an awesome power. Obviously, such Proclamation cannot be deemed harmless,
without legal significance, or not written, as in the case of Sanlakas.

Some of the petitioners vehemently maintain that PP 1017 is actually a declaration of Martial
Law. It is no so. What defines the character of PP 1017 are its wordings. It is plain therein that
what the President invoked was her calling-out power.
The declaration of Martial Law is a "warn[ing] to citizens that the military power has been called
upon by the executive to assist in the maintenance of law and order, and that, while the
emergency lasts, they must, upon pain of arrest and punishment, not commit any acts which will
in any way render more difficult the restoration of order and the enforcement of law."113

In his "Statement before the Senate Committee on Justice" on March 13, 2006, Mr. Justice
Vicente V. Mendoza,114 an authority in constitutional law, said that of the three powers of the
President as Commander-in-Chief, the power to declare Martial Law poses the most severe threat
to civil liberties. It is a strong medicine which should not be resorted to lightly. It cannot be used
to stifle or persecute critics of the government. It is placed in the keeping of the President for the
purpose of enabling him to secure the people from harm and to restore order so that they can
enjoy their individual freedoms. In fact, Section 18, Art. VII, provides:

A state of martial law does not suspend the operation of the Constitution, nor supplant the
functioning of the civil courts or legislative assemblies, nor authorize the conferment of
jurisdiction on military courts and agencies over civilians where civil courts are able to function,
nor automatically suspend the privilege of the writ.

Justice Mendoza also stated that PP 1017 is not a declaration of Martial Law. It is no more than a
call by the President to the armed forces to prevent or suppress lawless violence. As such, it
cannot be used to justify acts that only under a valid declaration of Martial Law can be done. Its
use for any other purpose is a perversion of its nature and scope, and any act done contrary to its
command is ultra vires.

Justice Mendoza further stated that specifically, (a) arrests and seizures without judicial
warrants; (b) ban on public assemblies; (c) take-over of news media and agencies and press
censorship; and (d) issuance of Presidential Decrees, are powers which can be exercised by the
President as Commander-in-Chief only where there is a valid declaration of Martial Law or
suspension of the writ of habeas corpus.

Based on the above disquisition, it is clear that PP 1017 is not a declaration of Martial Law. It is
merely an exercise of President Arroyo’s calling-out power for the armed forces to assist her
in preventing or suppressing lawless violence.

Second Provision: "Take Care" Power

The second provision pertains to the power of the President to ensure that the laws be faithfully
executed. This is based on Section 17, Article VII which reads:

SEC. 17. The President shall have control of all the executive departments, bureaus, and
offices. He shall ensure that the laws be faithfully executed.

As the Executive in whom the executive power is vested,115 the primary function of the President
is to enforce the laws as well as to formulate policies to be embodied in existing laws. He sees to
it that all laws are enforced by the officials and employees of his department. Before assuming
office, he is required to take an oath or affirmation to the effect that as President of the
Philippines, he will, among others, "execute its laws."116 In the exercise of such function, the
President, if needed, may employ the powers attached to his office as the Commander-in-Chief
of all the armed forces of the country,117 including the Philippine National Police118 under the
Department of Interior and Local Government.119

Petitioners, especially Representatives Francis Joseph G. Escudero, Satur Ocampo, Rafael

Mariano, Teodoro Casiño, Liza Maza, and Josel Virador argue that PP 1017 is unconstitutional
as it arrogated upon President Arroyo the power to enact laws and decrees in violation of Section
1, Article VI of the Constitution, which vests the power to enact laws in Congress. They assail
the clause "to enforce obedience to all the laws and to all decrees, orders and regulations
promulgated by me personally or upon my direction."

Petitioners’ contention is understandable. A reading of PP 1017 operative clause shows that it

was lifted120 from Former President Marcos’ Proclamation No. 1081, which partly reads:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines by virtue of

the powers vested upon me by Article VII, Section 10, Paragraph (2) of the Constitution, do
hereby place the entire Philippines as defined in Article 1, Section 1 of the Constitution under
martial law and, in my capacity as their Commander-in-Chief, do hereby command the Armed
Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or
suppress all forms of lawless violence as well as any act of insurrection or rebellion and to
enforce obedience to all the laws and decrees, orders and regulations promulgated by me
personally or upon my direction.

We all know that it was PP 1081 which granted President Marcos legislative power. Its enabling
clause states: "to enforce obedience to all the laws and decrees, orders and regulations
promulgated by me personally or upon my direction." Upon the other hand, the enabling
clause of PP 1017 issued by President Arroyo is: to enforce obedience to all the laws and to
all decrees, orders and regulations promulgated by me personally or upon my direction."

Is it within the domain of President Arroyo to promulgate "decrees"?

PP 1017 states in part: "to enforce obedience to all the laws and decrees x x x promulgated by
me personally or upon my direction."

The President is granted an Ordinance Power under Chapter 2, Book III of Executive Order No.
292 (Administrative Code of 1987). She may issue any of the following:

Sec. 2. Executive Orders. — Acts of the President providing for rules of a general or permanent
character in implementation or execution of constitutional or statutory powers shall be
promulgated in executive orders.
Sec. 3. Administrative Orders. — Acts of the President which relate to particular aspect of
governmental operations in pursuance of his duties as administrative head shall be promulgated
in administrative orders.

Sec. 4. Proclamations. — Acts of the President fixing a date or declaring a status or condition of
public moment or interest, upon the existence of which the operation of a specific law or
regulation is made to depend, shall be promulgated in proclamations which shall have the force
of an executive order.

Sec. 5. Memorandum Orders. — Acts of the President on matters of administrative detail or of

subordinate or temporary interest which only concern a particular officer or office of the
Government shall be embodied in memorandum orders.

Sec. 6. Memorandum Circulars. — Acts of the President on matters relating to internal

administration, which the President desires to bring to the attention of all or some of the
departments, agencies, bureaus or offices of the Government, for information or compliance,
shall be embodied in memorandum circulars.

Sec. 7. General or Special Orders. — Acts and commands of the President in his capacity as
Commander-in-Chief of the Armed Forces of the Philippines shall be issued as general or special
orders.

President Arroyo’s ordinance power is limited to the foregoing issuances. She cannot
issue decrees similar to those issued by Former President Marcos under PP 1081. Presidential
Decrees are laws which are of the same category and binding force as statutes because they were
issued by the President in the exercise of his legislative power during the period of Martial Law
under the 1973 Constitution.121

This Court rules that the assailed PP 1017 is unconstitutional insofar as it grants President
Arroyo the authority to promulgate "decrees." Legislative power is peculiarly within the
province of the Legislature. Section 1, Article VI categorically states that "[t]he legislative
power shall be vested in the Congress of the Philippines which shall consist of a Senate and
a House of Representatives." To be sure, neither Martial Law nor a state of rebellion nor a state
of emergency can justify President Arroyo’s exercise of legislative power by issuing decrees.

Can President Arroyo enforce obedience to all decrees and laws through the military?

As this Court stated earlier, President Arroyo has no authority to enact decrees. It follows that
these decrees are void and, therefore, cannot be enforced. With respect to "laws," she cannot call
the military to enforce or implement certain laws, such as customs laws, laws governing family
and property relations, laws on obligations and contracts and the like. She can only order the
military, under PP 1017, to enforce laws pertinent to its duty to suppress lawless violence.

Third Provision: Power to Take Over

The pertinent provision of PP 1017 states:

x x x and to enforce obedience to all the laws and to all decrees, orders, and regulations
promulgated by me personally or upon my direction; and as provided in Section 17, Article
XII of the Constitution do hereby declare a state of national emergency.

The import of this provision is that President Arroyo, during the state of national emergency
under PP 1017, can call the military not only to enforce obedience "to all the laws and to all
decrees x x x" but also to act pursuant to the provision of Section 17, Article XII which reads:

Sec. 17. In times of national emergency, when the public interest so requires, the State may,
during the emergency and under reasonable terms prescribed by it, temporarily take over or
direct the operation of any privately-owned public utility or business affected with public
interest.

What could be the reason of President Arroyo in invoking the above provision when she issued
PP 1017?

The answer is simple. During the existence of the state of national emergency, PP 1017 purports
to grant the President, without any authority or delegation from Congress, to take over or direct
the operation of any privately-owned public utility or business affected with public interest.

This provision was first introduced in the 1973 Constitution, as a product of the "martial law"
thinking of the 1971 Constitutional Convention.122 In effect at the time of its approval was
President Marcos’ Letter of Instruction No. 2 dated September 22, 1972 instructing the Secretary
of National Defense to take over "the management, control and operation of the Manila Electric
Company, the Philippine Long Distance Telephone Company, the National Waterworks and
Sewerage Authority, the Philippine National Railways, the Philippine Air Lines, Air Manila
(and) Filipinas Orient Airways . . . for the successful prosecution by the Government of its effort
to contain, solve and end the present national emergency."

Petitioners, particularly the members of the House of Representatives, claim that President
Arroyo’s inclusion of Section 17, Article XII in PP 1017 is an encroachment on the legislature’s
emergency powers.

This is an area that needs delineation.

A distinction must be drawn between the President’s authority to declare "a state of national
emergency" and to exercise emergency powers. To the first, as elucidated by the Court, Section
18, Article VII grants the President such power, hence, no legitimate constitutional objection can
be raised. But to the second, manifold constitutional issues arise.

Section 23, Article VI of the Constitution reads:

SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session assembled,
voting separately, shall have the sole power to declare the existence of a state of war.
(2) In times of war or other national emergency, the Congress may, by law, authorize the
President, for a limited period and subject to such restrictions as it may prescribe, to exercise
powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn by
resolution of the Congress, such powers shall cease upon the next adjournment thereof.

It may be pointed out that the second paragraph of the above provision refers not only to war but
also to "other national emergency." If the intention of the Framers of our Constitution was to
withhold from the President the authority to declare a "state of national emergency" pursuant to
Section 18, Article VII (calling-out power) and grant it to Congress (like the declaration of the
existence of a state of war), then the Framers could have provided so. Clearly, they did not intend
that Congress should first authorize the President before he can declare a "state of national
emergency." The logical conclusion then is that President Arroyo could validly declare the
existence of a state of national emergency even in the absence of a Congressional enactment.

But the exercise of emergency powers, such as the taking over of privately owned public utility
or business affected with public interest, is a different matter. This requires a delegation from
Congress.

Courts have often said that constitutional provisions in pari materia are to be construed together.
Otherwise stated, different clauses, sections, and provisions of a constitution which relate to the
same subject matter will be construed together and considered in the light of each
other.123 Considering that Section 17 of Article XII and Section 23 of Article VI, previously
quoted, relate to national emergencies, they must be read together to determine the limitation of
the exercise of emergency powers.

Generally, Congress is the repository of emergency powers. This is evident in the tenor of
Section 23 (2), Article VI authorizing it to delegate such powers to the President. Certainly, a
body cannot delegate a power not reposed upon it. However, knowing that during grave
emergencies, it may not be possible or practicable for Congress to meet and exercise its powers,
the Framers of our Constitution deemed it wise to allow Congress to grant emergency powers to
the President, subject to certain conditions, thus:

(1) There must be a war or other emergency.

(2) The delegation must be for a limited period only.

(3) The delegation must be subject to such restrictions as the Congress may prescribe.

(4) The emergency powers must be exercised to carry out a national policy declared by
Congress.124

Section 17, Article XII must be understood as an aspect of the emergency powers clause. The
taking over of private business affected with public interest is just another facet of the emergency
powers generally reposed upon Congress. Thus, when Section 17 states that the "the State may,
during the emergency and under reasonable terms prescribed by it, temporarily take over
or direct the operation of any privately owned public utility or business affected with
public interest," it refers to Congress, not the President. Now, whether or not the President may
exercise such power is dependent on whether Congress may delegate it to him pursuant to a law
prescribing the reasonable terms thereof. Youngstown Sheet & Tube Co. et al. v. Sawyer,125 held:

It is clear that if the President had authority to issue the order he did, it must be found in some
provision of the Constitution. And it is not claimed that express constitutional language grants
this power to the President. The contention is that presidential power should be implied from the
aggregate of his powers under the Constitution. Particular reliance is placed on provisions in
Article II which say that "The executive Power shall be vested in a President . . . .;" that "he shall
take Care that the Laws be faithfully executed;" and that he "shall be Commander-in-Chief of the
Army and Navy of the United States.

The order cannot properly be sustained as an exercise of the President’s military power as
Commander-in-Chief of the Armed Forces. The Government attempts to do so by citing a
number of cases upholding broad powers in military commanders engaged in day-to-day fighting
in a theater of war. Such cases need not concern us here. Even though "theater of war" be an
expanding concept, we cannot with faithfulness to our constitutional system hold that the
Commander-in-Chief of the Armed Forces has the ultimate power as such to take
possession of private property in order to keep labor disputes from stopping production.
This is a job for the nation’s lawmakers, not for its military authorities.

Nor can the seizure order be sustained because of the several constitutional provisions that
grant executive power to the President. In the framework of our Constitution, the
President’s power to see that the laws are faithfully executed refutes the idea that he is to
be a lawmaker. The Constitution limits his functions in the lawmaking process to the
recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the
Constitution is neither silent nor equivocal about who shall make laws which the President
is to execute. The first section of the first article says that "All legislative Powers herein
granted shall be vested in a Congress of the United States. . ."126

Petitioner Cacho-Olivares, et al. contends that the term "emergency" under Section 17, Article
XII refers to "tsunami," "typhoon," "hurricane"and"similar occurrences." This is a limited
view of "emergency."

Emergency, as a generic term, connotes the existence of conditions suddenly intensifying the
degree of existing danger to life or well-being beyond that which is accepted as normal. Implicit
in this definitions are the elements of intensity, variety, and perception. 127 Emergencies, as
perceived by legislature or executive in the United Sates since 1933, have been occasioned by a
wide range of situations, classifiable under three (3) principal heads: a) economic,128 b) natural
disaster,129 and c) national security.130

"Emergency," as contemplated in our Constitution, is of the same breadth. It may include

rebellion, economic crisis, pestilence or epidemic, typhoon, flood, or other similar catastrophe of
nationwide proportions or effect.131 This is evident in the Records of the Constitutional
Commission, thus:
MR. GASCON. Yes. What is the Committee’s definition of "national emergency" which appears
in Section 13, page 5? It reads:

When the common good so requires, the State may temporarily take over or direct the operation
of any privately owned public utility or business affected with public interest.

MR. VILLEGAS. What I mean is threat from external aggression, for

example, calamities or natural disasters.

MR. GASCON. There is a question by Commissioner de los Reyes. What about strikes and
riots?

MR. VILLEGAS. Strikes, no; those would not be covered by the term "national emergency."

MR. BENGZON. Unless they are of such proportions such that they would paralyze government
service.132

xxxxxx

MR. TINGSON. May I ask the committee if "national emergency" refers to military national
emergency or could this be economic emergency?"

MR. VILLEGAS. Yes, it could refer to both military or economic dislocations.

MR. TINGSON. Thank you very much.133

It may be argued that when there is national emergency, Congress may not be able to convene
and, therefore, unable to delegate to the President the power to take over privately-owned public
utility or business affected with public interest.

In Araneta v. Dinglasan,134 this Court emphasized that legislative power, through which
extraordinary measures are exercised, remains in Congress even in times of crisis.

"x x x

After all the criticisms that have been made against the efficiency of the system of the separation
of powers, the fact remains that the Constitution has set up this form of government, with all its
defects and shortcomings, in preference to the commingling of powers in one man or group of
men. The Filipino people by adopting parliamentary government have given notice that they
share the faith of other democracy-loving peoples in this system, with all its faults, as the ideal.
The point is, under this framework of government, legislation is preserved for Congress all the
time, not excepting periods of crisis no matter how serious. Never in the history of the United
States, the basic features of whose Constitution have been copied in ours, have specific functions
of the legislative branch of enacting laws been surrendered to another department – unless we
regard as legislating the carrying out of a legislative policy according to prescribed standards; no,
not even when that Republic was fighting a total war, or when it was engaged in a life-and-death
struggle to preserve the Union. The truth is that under our concept of constitutional government,
in times of extreme perils more than in normal circumstances ‘the various branches, executive,
legislative, and judicial,’ given the ability to act, are called upon ‘to perform the duties and
discharge the responsibilities committed to them respectively."

Following our interpretation of Section 17, Article XII, invoked by President Arroyo in issuing
PP 1017, this Court rules that such Proclamation does not authorize her during the emergency to
temporarily take over or direct the operation of any privately owned public utility or business
affected with public interest without authority from Congress.

Let it be emphasized that while the President alone can declare a state of national emergency,
however, without legislation, he has no power to take over privately-owned public utility or
business affected with public interest. The President cannot decide whether exceptional
circumstances exist warranting the take over of privately-owned public utility or business
affected with public interest. Nor can he determine when such exceptional circumstances have
ceased. Likewise, without legislation, the President has no power to point out the types of
businesses affected with public interest that should be taken over. In short, the President has no
absolute authority to exercise all the powers of the State under Section 17, Article VII in the
absence of an emergency powers act passed by Congress.

c. "AS APPLIED CHALLENGE"

One of the misfortunes of an emergency, particularly, that which pertains to security, is that
military necessity and the guaranteed rights of the individual are often not compatible. Our
history reveals that in the crucible of conflict, many rights are curtailed and trampled upon. Here,
the right against unreasonable search and seizure; the right against warrantless
arrest; and the freedom of speech, of expression, of the press, and of assembly under the Bill
of Rights suffered the greatest blow.

Of the seven (7) petitions, three (3) indicate "direct injury."

In G.R. No. 171396, petitioners David and Llamas alleged that, on February 24, 2006, they were
arrested without warrants on their way to EDSA to celebrate the 20th Anniversary of People
Power I. The arresting officers cited PP 1017 as basis of the arrest.

In G.R. No. 171409, petitioners Cacho-Olivares and Tribune Publishing Co., Inc. claimed that
on February 25, 2006, the CIDG operatives "raided and ransacked without warrant" their office.
Three policemen were assigned to guard their office as a possible "source of destabilization."
Again, the basis was PP 1017.

And in G.R. No. 171483, petitioners KMU and NAFLU-KMU et al. alleged that their members
were "turned away and dispersed" when they went to EDSA and later, to Ayala Avenue, to
celebrate the 20th Anniversary of People Power I.

A perusal of the "direct injuries" allegedly suffered by the said petitioners shows that they
resulted from the implementation, pursuant to G.O. No. 5, of PP 1017.
Can this Court adjudge as unconstitutional PP 1017 and G.O. No 5 on the basis of these illegal
acts? In general, does the illegal implementation of a law render it unconstitutional?

Settled is the rule that courts are not at liberty to declare statutes invalid although they may be
abused and misabused135 and may afford an opportunity for abuse in the manner of
application.136 The validity of a statute or ordinance is to be determined from its general purpose
and its efficiency to accomplish the end desired, not from its effects in a particular case.137 PP
1017 is merely an invocation of the President’s calling-out power. Its general purpose is to
command the AFP to suppress all forms of lawless violence, invasion or rebellion. It had
accomplished the end desired which prompted President Arroyo to issue PP 1021. But there is
nothing in PP 1017 allowing the police, expressly or impliedly, to conduct illegal arrest, search
or violate the citizens’ constitutional rights.

Now, may this Court adjudge a law or ordinance unconstitutional on the ground that its
implementor committed illegal acts? The answer is no. The criterion by which the validity of the
statute or ordinance is to be measured is the essential basis for the exercise of power, and not a
mere incidental result arising from its exertion.138 This is logical. Just imagine the absurdity
of situations when laws maybe declared unconstitutional just because the officers implementing
them have acted arbitrarily. If this were so, judging from the blunders committed by policemen
in the cases passed upon by the Court, majority of the provisions of the Revised Penal Code
would have been declared unconstitutional a long time ago.

President Arroyo issued G.O. No. 5 to carry into effect the provisions of PP 1017. General orders
are "acts and commands of the President in his capacity as Commander-in-Chief of the Armed
Forces of the Philippines." They are internal rules issued by the executive officer to his
subordinates precisely for the proper and efficient administration of law. Such rules and
regulations create no relation except between the official who issues them and the official who
receives them.139 They are based on and are the product of, a relationship in which power is their
source, and obedience, their object.140 For these reasons, one requirement for these rules to be
valid is that they must be reasonable, not arbitrary or capricious.

G.O. No. 5 mandates the AFP and the PNP to immediately carry out the "necessary and
appropriate actions and measures to suppress and prevent acts of terrorism and
lawless violence."

Unlike the term "lawless violence" which is unarguably extant in our statutes and the
Constitution, and which is invariably associated with "invasion, insurrection or rebellion," the
phrase "acts of terrorism" is still an amorphous and vague concept. Congress has yet to enact a
law defining and punishing acts of terrorism.

In fact, this "definitional predicament" or the "absence of an agreed definition of terrorism"

confronts not only our country, but the international community as well. The following
observations are quite apropos:

In the actual unipolar context of international relations, the "fight against terrorism" has become
one of the basic slogans when it comes to the justification of the use of force against certain
states and against groups operating internationally. Lists of states "sponsoring terrorism" and of
terrorist organizations are set up and constantly being updated according to criteria that are not
always known to the public, but are clearly determined by strategic interests.

The basic problem underlying all these military actions – or threats of the use of force as the
most recent by the United States against Iraq – consists in the absence of an agreed definition of
terrorism.

Remarkable confusion persists in regard to the legal categorization of acts of violence either by
states, by armed groups such as liberation movements, or by individuals.

The dilemma can by summarized in the saying "One country’s terrorist is another country’s
freedom fighter." The apparent contradiction or lack of consistency in the use of the term
"terrorism" may further be demonstrated by the historical fact that leaders of national liberation
movements such as Nelson Mandela in South Africa, Habib Bourgouiba in Tunisia, or Ahmed
Ben Bella in Algeria, to mention only a few, were originally labeled as terrorists by those who
controlled the territory at the time, but later became internationally respected statesmen.

What, then, is the defining criterion for terrorist acts – the differentia specifica distinguishing
those acts from eventually legitimate acts of national resistance or self-defense?

Since the times of the Cold War the United Nations Organization has been trying in vain to reach
a consensus on the basic issue of definition. The organization has intensified its efforts recently,
but has been unable to bridge the gap between those who associate "terrorism" with any violent
act by non-state groups against civilians, state functionaries or infrastructure or military
installations, and those who believe in the concept of the legitimate use of force when resistance
against foreign occupation or against systematic oppression of ethnic and/or religious groups
within a state is concerned.

The dilemma facing the international community can best be illustrated by reference to the
contradicting categorization of organizations and movements such as Palestine Liberation
Organization (PLO) – which is a terrorist group for Israel and a liberation movement for Arabs
and Muslims – the Kashmiri resistance groups – who are terrorists in the perception of India,
liberation fighters in that of Pakistan – the earlier Contras in Nicaragua – freedom fighters for the
United States, terrorists for the Socialist camp – or, most drastically, the Afghani Mujahedeen
(later to become the Taliban movement): during the Cold War period they were a group of
freedom fighters for the West, nurtured by the United States, and a terrorist gang for the Soviet
Union. One could go on and on in enumerating examples of conflicting categorizations that
cannot be reconciled in any way – because of opposing political interests that are at the roots of
those perceptions.

How, then, can those contradicting definitions and conflicting perceptions and evaluations of one
and the same group and its actions be explained? In our analysis, the basic reason for these
striking inconsistencies lies in the divergent interest of states. Depending on whether a state is in
the position of an occupying power or in that of a rival, or adversary, of an occupying power in a
given territory, the definition of terrorism will "fluctuate" accordingly. A state may eventually
see itself as protector of the rights of a certain ethnic group outside its territory and will therefore
speak of a "liberation struggle," not of "terrorism" when acts of violence by this group are
concerned, and vice-versa.

The United Nations Organization has been unable to reach a decision on the definition of
terrorism exactly because of these conflicting interests of sovereign states that determine in each
and every instance how a particular armed movement (i.e. a non-state actor) is labeled in regard
to the terrorists-freedom fighter dichotomy. A "policy of double standards" on this vital issue of
international affairs has been the unavoidable consequence.

This "definitional predicament" of an organization consisting of sovereign states – and not of

peoples, in spite of the emphasis in the Preamble to the United Nations Charter! – has become
even more serious in the present global power constellation: one superpower exercises the
decisive role in the Security Council, former great powers of the Cold War era as well as
medium powers are increasingly being marginalized; and the problem has become even more
acute since the terrorist attacks of 11 September 2001 I the United States. 141

The absence of a law defining "acts of terrorism" may result in abuse and oppression on the part
of the police or military. An illustration is when a group of persons are merely engaged in a
drinking spree. Yet the military or the police may consider the act as an act of terrorism and
immediately arrest them pursuant to G.O. No. 5. Obviously, this is abuse and oppression on their
part. It must be remembered that an act can only be considered a crime if there is a law defining
the same as such and imposing the corresponding penalty thereon.

So far, the word "terrorism" appears only once in our criminal laws, i.e., in P.D. No. 1835 dated
January 16, 1981 enacted by President Marcos during the Martial Law regime. This decree is
entitled "Codifying The Various Laws on Anti-Subversion and Increasing The Penalties for
Membership in Subversive Organizations." The word "terrorism" is mentioned in the following
provision: "That one who conspires with any other person for the purpose of overthrowing the
Government of the Philippines x x x by force, violence, terrorism, x x x shall be punished
by reclusion temporal x x x."

P.D. No. 1835 was repealed by E.O. No. 167 (which outlaws the Communist Party of the
Philippines) enacted by President Corazon Aquino on May 5, 1985. These two (2) laws,
however, do not define "acts of terrorism." Since there is no law defining "acts of terrorism," it is
President Arroyo alone, under G.O. No. 5, who has the discretion to determine what acts
constitute terrorism. Her judgment on this aspect is absolute, without restrictions. Consequently,
there can be indiscriminate arrest without warrants, breaking into offices and residences, taking
over the media enterprises, prohibition and dispersal of all assemblies and gatherings unfriendly
to the administration. All these can be effected in the name of G.O. No. 5. These acts go far
beyond the calling-out power of the President. Certainly, they violate the due process clause of
the Constitution. Thus, this Court declares that the "acts of terrorism" portion of G.O. No. 5 is
unconstitutional.
Significantly, there is nothing in G.O. No. 5 authorizing the military or police to commit acts
beyond what are necessary and appropriate to suppress and prevent lawless violence, the
limitation of their authority in pursuing the Order. Otherwise, such acts are considered illegal.

We first examine G.R. No. 171396 (David et al.)

The Constitution provides that "the right of the people to be secured in their persons, houses,
papers and effects against unreasonable search and seizure of whatever nature and for any
purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing the
place to be searched and the persons or things to be seized."142 The plain import of the language
of the Constitution is that searches, seizures and arrests are normally unreasonable unless
authorized by a validly issued search warrant or warrant of arrest. Thus, the fundamental
protection given by this provision is that between person and police must stand the protective
authority of a magistrate clothed with power to issue or refuse to issue search warrants or
warrants of arrest.143

In the Brief Account144 submitted by petitioner David, certain facts are established: first, he was
arrested without warrant; second, the PNP operatives arrested him on the basis of PP
1017; third, he was brought at Camp Karingal, Quezon City where he was fingerprinted,
photographed and booked like a criminal suspect; fourth,he was treated brusquely by policemen
who "held his head and tried to push him" inside an unmarked car; fifth, he was charged with
Violation of Batas Pambansa Bilang No. 880145 and Inciting to Sedition; sixth, he was
detained for seven (7) hours; and seventh,he was eventually released for insufficiency of
evidence.

Section 5, Rule 113 of the Revised Rules on Criminal Procedure provides:

Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person may, without
a warrant, arrest a person:

(a) When, in his presence, the person to be arrested has committed, is actually
committing, or is attempting to commit an offense.

(b) When an offense has just been committed and he has probable cause to believe based
on personal knowledge of facts or circumstances that the person to be arrested has
committed it; and

x x x.

Neither of the two (2) exceptions mentioned above justifies petitioner David’s warrantless arrest.
During the inquest for the charges of inciting to sedition and violation of BP 880, all that the
arresting officers could invoke was their observation that some rallyists were wearing t-shirts
with the invective "Oust Gloria Now" and their erroneous assumption that petitioner David was
the leader of the rally.146 Consequently, the Inquest Prosecutor ordered his immediate release on
the ground of insufficiency of evidence. He noted that petitioner David was not wearing the
subject t-shirt and even if he was wearing it, such fact is insufficient to charge him with inciting
to sedition. Further, he also stated that there is insufficient evidence for the charge of violation
of BP 880 as it was not even known whether petitioner David was the leader of the rally. 147

But what made it doubly worse for petitioners David et al. is that not only was their right against
warrantless arrest violated, but also their right to peaceably assemble.

Section 4 of Article III guarantees:

No law shall be passed abridging the freedom of speech, of expression, or of the press, or the
right of the people peaceably to assemble and petition the government for redress of grievances.

"Assembly" means a right on the part of the citizens to meet peaceably for consultation in respect
to public affairs. It is a necessary consequence of our republican institution and complements the
right of speech. As in the case of freedom of expression, this right is not to be limited, much less
denied, except on a showing of a clear and present danger of a substantive evil that Congress
has a right to prevent. In other words, like other rights embraced in the freedom of expression,
the right to assemble is not subject to previous restraint or censorship. It may not be conditioned
upon the prior issuance of a permit or authorization from the government authorities except, of
course, if the assembly is intended to be held in a public place, a permit for the use of such place,
and not for the assembly itself, may be validly required.

The ringing truth here is that petitioner David, et al. were arrested while they were exercising
their right to peaceful assembly. They were not committing any crime, neither was there a
showing of a clear and present danger that warranted the limitation of that right. As can be
gleaned from circumstances, the charges of inciting to sedition and violation of BP 880 were
mere afterthought. Even the Solicitor General, during the oral argument, failed to justify the
arresting officers’ conduct. In De Jonge v. Oregon,148 it was held that peaceable assembly cannot
be made a crime, thus:

Peaceable assembly for lawful discussion cannot be made a crime. The holding of meetings for
peaceable political action cannot be proscribed. Those who assist in the conduct of such
meetings cannot be branded as criminals on that score. The question, if the rights of free speech
and peaceful assembly are not to be preserved, is not as to the auspices under which the meeting
was held but as to its purpose; not as to the relations of the speakers, but whether their utterances
transcend the bounds of the freedom of speech which the Constitution protects. If the persons
assembling have committed crimes elsewhere, if they have formed or are engaged in a
conspiracy against the public peace and order, they may be prosecuted for their conspiracy or
other violations of valid laws. But it is a different matter when the State, instead of
prosecuting them for such offenses, seizes upon mere participation in a peaceable assembly
and a lawful public discussion as the basis for a criminal charge.

On the basis of the above principles, the Court likewise considers the dispersal and arrest of the
members of KMU et al. (G.R. No. 171483) unwarranted. Apparently, their dispersal was done
merely on the basis of Malacañang’s directive canceling all permits previously issued by local
government units. This is arbitrary. The wholesale cancellation of all permits to rally is a blatant
disregard of the principle that "freedom of assembly is not to be limited, much less denied,
except on a showing of a clear and present danger of a substantive evil that the State has a
right to prevent."149 Tolerance is the rule and limitation is the exception. Only upon a showing
that an assembly presents a clear and present danger that the State may deny the citizens’ right to
exercise it. Indeed, respondents failed to show or convince the Court that the rallyists committed
acts amounting to lawless violence, invasion or rebellion. With the blanket revocation of permits,
the distinction between protected and unprotected assemblies was eliminated.

Moreover, under BP 880, the authority to regulate assemblies and rallies is lodged with the local
government units. They have the power to issue permits and to revoke such permits after due
notice and hearing on the determination of the presence of clear and present danger. Here,
petitioners were not even notified and heard on the revocation of their permits.150 The first time
they learned of it was at the time of the dispersal. Such absence of notice is a fatal defect. When
a person’s right is restricted by government action, it behooves a democratic government to see
to it that the restriction is fair, reasonable, and according to procedure.

G.R. No. 171409, (Cacho-Olivares, et al.) presents another facet of freedom of speech i.e., the
freedom of the press. Petitioners’ narration of facts, which the Solicitor General failed to refute,
established the following: first, the Daily Tribune’s offices were searched without
warrant;second, the police operatives seized several materials for publication; third, the search
was conducted at about 1:00 o’ clock in the morning of February 25, 2006; fourth, the search
was conducted in the absence of any official of the Daily Tribune except the security guard of
the building; and fifth, policemen stationed themselves at the vicinity of the Daily
Tribune offices.

Thereafter, a wave of warning came from government officials. Presidential Chief of Staff
Michael Defensor was quoted as saying that such raid was "meant to show a ‘strong presence,’
to tell media outlets not to connive or do anything that would help the rebels in bringing
down this government." Director General Lomibao further stated that "if they do not follow
the standards –and the standards are if they would contribute to instability in the
government, or if they do not subscribe to what is in General Order No. 5 and Proc. No.
1017 – we will recommend a ‘takeover.’" National Telecommunications Commissioner Ronald
Solis urged television and radio networks to "cooperate" with the government for the duration of
the state of national emergency. He warned that his agency will not hesitate to recommend
the closure of any broadcast outfit that violates rules set out for media coverage during
times when the national security is threatened.151

The search is illegal. Rule 126 of The Revised Rules on Criminal Procedure lays down the steps
in the conduct of search and seizure. Section 4 requires that a search warrant be issued upon
probable cause in connection with one specific offence to be determined personally by the judge
after examination under oath or affirmation of the complainant and the witnesses he may
produce. Section 8 mandates that the search of a house, room, or any other premise be made in
the presence of the lawful occupant thereof or any member of his family or in the absence of
the latter, in the presence of two (2) witnesses of sufficient age and discretion residing in the
same locality. And Section 9 states that the warrant must direct that it be served in the daytime,
unless the property is on the person or in the place ordered to be searched, in which case a
direction may be inserted that it be served at any time of the day or night. All these rules were
violated by the CIDG operatives.

Not only that, the search violated petitioners’ freedom of the press. The best gauge of a free and
democratic society rests in the degree of freedom enjoyed by its media. In the Burgos v. Chief of
Staff152 this Court held that --

As heretofore stated, the premises searched were the business and printing offices of the
"Metropolitan Mail" and the "We Forum" newspapers. As a consequence of the search and
seizure, these premises were padlocked and sealed, with the further result that the printing
and publication of said newspapers were discontinued.

Such closure is in the nature of previous restraint or censorship abhorrent to the freedom
of the press guaranteed under the fundamental law, and constitutes a virtual denial of
petitioners' freedom to express themselves in print. This state of being is patently
anathematic to a democratic framework where a free, alert and even militant press is
essential for the political enlightenment and growth of the citizenry.

While admittedly, the Daily Tribune was not padlocked and sealed like the "Metropolitan Mail"
and "We Forum" newspapers in the above case, yet it cannot be denied that the CIDG operatives
exceeded their enforcement duties. The search and seizure of materials for publication, the
stationing of policemen in the vicinity of the The Daily Tribune offices, and the arrogant warning
of government officials to media, are plain censorship. It is that officious functionary of the
repressive government who tells the citizen that he may speak only if allowed to do so, and no
more and no less than what he is permitted to say on pain of punishment should he be so rash as
to disobey.153 Undoubtedly, the The Daily Tribune was subjected to these arbitrary intrusions
because of its anti-government sentiments. This Court cannot tolerate the blatant disregard of a
constitutional right even if it involves the most defiant of our citizens. Freedom to comment on
public affairs is essential to the vitality of a representative democracy. It is the duty of the courts
to be watchful for the constitutional rights of the citizen, and against any stealthy encroachments
thereon. The motto should always be obsta principiis.154

Incidentally, during the oral arguments, the Solicitor General admitted that the search of
the Tribune’s offices and the seizure of its materials for publication and other papers are illegal;
and that the same are inadmissible "for any purpose," thus:

JUSTICE CALLEJO:

You made quite a mouthful of admission when you said that the policemen, when inspected the
Tribune for the purpose of gathering evidence and you admitted that the policemen were able to
get the clippings. Is that not in admission of the admissibility of these clippings that were taken
from the Tribune?

SOLICITOR GENERAL BENIPAYO:

Under the law they would seem to be, if they were illegally seized, I think and I know, Your
Honor, and these are inadmissible for any purpose. 155

xxxxxxxxx

SR. ASSO. JUSTICE PUNO:

These have been published in the past issues of the Daily Tribune; all you have to do is to get
those past issues. So why do you have to go there at 1 o’clock in the morning and without any
search warrant? Did they become suddenly part of the evidence of rebellion or inciting to
sedition or what?

SOLGEN BENIPAYO:

Well, it was the police that did that, Your Honor. Not upon my instructions.

SR. ASSO. JUSTICE PUNO:

Are you saying that the act of the policeman is illegal, it is not based on any law, and it is not
based on Proclamation 1017.

SOLGEN BENIPAYO:

It is not based on Proclamation 1017, Your Honor, because there is nothing in 1017 which says
that the police could go and inspect and gather clippings from Daily Tribune or any other
newspaper.

SR. ASSO. JUSTICE PUNO:

Is it based on any law?

SOLGEN BENIPAYO:

As far as I know, no, Your Honor, from the facts, no.

SR. ASSO. JUSTICE PUNO:

So, it has no basis, no legal basis whatsoever?

SOLGEN BENIPAYO:

Maybe so, Your Honor. Maybe so, that is why I said, I don’t know if it is premature to say
this, we do not condone this. If the people who have been injured by this would want to sue
them, they can sue and there are remedies for this.156
Likewise, the warrantless arrests and seizures executed by the police were, according to the
Solicitor General, illegal and cannot be condoned, thus:

CHIEF JUSTICE PANGANIBAN:

There seems to be some confusions if not contradiction in your theory.

SOLICITOR GENERAL BENIPAYO:

I don’t know whether this will clarify. The acts, the supposed illegal or unlawful acts committed
on the occasion of 1017, as I said, it cannot be condoned. You cannot blame the President for,
as you said, a misapplication of the law. These are acts of the police officers, that is their
responsibility.157

The Dissenting Opinion states that PP 1017 and G.O. No. 5 are constitutional in every aspect and
"should result in no constitutional or statutory breaches if applied according to their letter."

The Court has passed upon the constitutionality of these issuances. Its ratiocination has been
exhaustively presented. At this point, suffice it to reiterate that PP 1017 is limited to the calling
out by the President of the military to prevent or suppress lawless violence, invasion or rebellion.
When in implementing its provisions, pursuant to G.O. No. 5, the military and the police
committed acts which violate the citizens’ rights under the Constitution, this Court has to declare
such acts unconstitutional and illegal.

In this connection, Chief Justice Artemio V. Panganiban’s concurring opinion, attached hereto, is
considered an integral part of this ponencia.

SUMMATION

In sum, the lifting of PP 1017 through the issuance of PP 1021 – a supervening event – would
have normally rendered this case moot and academic. However, while PP 1017 was still
operative, illegal acts were committed allegedly in pursuance thereof. Besides, there is no
guarantee that PP 1017, or one similar to it, may not again be issued. Already, there have been
media reports on April 30, 2006 that allegedly PP 1017 would be reimposed "if the May 1
rallies" become "unruly and violent." Consequently, the transcendental issues raised by the
parties should not be "evaded;" they must now be resolved to prevent future constitutional
aberration.

The Court finds and so holds that PP 1017 is constitutional insofar as it constitutes a call by the
President for the AFP to prevent or suppress lawless violence. The proclamation is sustained by
Section 18, Article VII of the Constitution and the relevant jurisprudence discussed earlier.
However, PP 1017’s extraneous provisions giving the President express or implied power (1) to
issue decrees; (2) to direct the AFP to enforce obedience to all laws even those not related to
lawless violence as well as decrees promulgated by the President; and (3) to impose standards on
media or any form of prior restraint on the press, are ultra vires and unconstitutional. The Court
also rules that under Section 17, Article XII of the Constitution, the President, in the absence of a
legislation, cannot take over privately-owned public utility and private business affected with
public interest.

In the same vein, the Court finds G.O. No. 5 valid. It is an Order issued by the President – acting
as Commander-in-Chief – addressed to subalterns in the AFP to carry out the provisions of PP
1017. Significantly, it also provides a valid standard – that the military and the police should take
only the "necessary and appropriate actions and measures to suppress and prevent acts of
lawless violence."But the words "acts of terrorism" found in G.O. No. 5 have not been legally
defined and made punishable by Congress and should thus be deemed deleted from the said G.O.
While "terrorism" has been denounced generally in media, no law has been enacted to guide the
military, and eventually the courts, to determine the limits of the AFP’s authority in carrying out
this portion of G.O. No. 5.

On the basis of the relevant and uncontested facts narrated earlier, it is also pristine clear that (1)
the warrantless arrest of petitioners Randolf S. David and Ronald Llamas; (2) the dispersal of the
rallies and warrantless arrest of the KMU and NAFLU-KMU members; (3) the imposition of
standards on media or any prior restraint on the press; and (4) the warrantless search of
the Tribune offices and the whimsical seizures of some articles for publication and other
materials, are not authorized by the Constitution, the law and jurisprudence. Not even by the
valid provisions of PP 1017 and G.O. No. 5.

Other than this declaration of invalidity, this Court cannot impose any civil, criminal or
administrative sanctions on the individual police officers concerned. They have not been
individually identified and given their day in court. The civil complaints or causes of action
and/or relevant criminal Informations have not been presented before this Court. Elementary due
process bars this Court from making any specific pronouncement of civil, criminal or
administrative liabilities.

It is well to remember that military power is a means to an end and substantive civil rights
are ends in themselves. How to give the military the power it needs to protect the Republic
without unnecessarily trampling individual rights is one of the eternal balancing tasks of a
democratic state.During emergency, governmental action may vary in breadth and intensity
from normal times, yet they should not be arbitrary as to unduly restrain our people’s liberty.

Perhaps, the vital lesson that we must learn from the theorists who studied the various competing
political philosophies is that, it is possible to grant government the authority to cope with crises
without surrendering the two vital principles of constitutionalism: the maintenance of legal
limits to arbitrary power, and political responsibility of the government to the governed.158

WHEREFORE, the Petitions are partly granted. The Court rules that PP 1017
is CONSTITUTIONAL insofar as it constitutes a call by President Gloria Macapagal-Arroyo
on the AFP to prevent or suppress lawless violence. However, the provisions of PP 1017
commanding the AFP to enforce laws not related to lawless violence, as well as decrees
promulgated by the President, are declared UNCONSTITUTIONAL. In addition, the provision
in PP 1017 declaring national emergency under Section 17, Article VII of the Constitution
is CONSTITUTIONAL, but such declaration does not authorize the President to take over
privately-owned public utility or business affected with public interest without prior legislation.

G.O. No. 5 is CONSTITUTIONAL since it provides a standard by which the AFP and the PNP
should implement PP 1017, i.e. whatever is "necessary and appropriate actions and measures
to suppress and prevent acts of lawless violence." Considering that "acts of terrorism" have
not yet been defined and made punishable by the Legislature, such portion of G.O. No. 5 is
declared UNCONSTITUTIONAL.

The warrantless arrest of Randolf S. David and Ronald Llamas; the dispersal and warrantless
arrest of the KMU and NAFLU-KMU members during their rallies, in the absence of proof that
these petitioners were committing acts constituting lawless violence, invasion or rebellion and
violating BP 880; the imposition of standards on media or any form of prior restraint on the
press, as well as the warrantless search of the Tribune offices and whimsical seizure of its
articles for publication and other materials, are declared UNCONSTITUTIONAL.

No costs.

SO ORDERED.