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The Supreme Court cannot indulge petitioners’ supplications. While some may interpret Neither can the lack of locus standi be cured by the claim of petitioners that they are
petitioners’ moves as vigilance in preserving the rule of law, a careful perusal of their instituting the cases at bar as taxpayers and concerned citizens. A taxpayer’s suit
petitions would reveal that they cannot hurdle the bar of justiciability set by the Court requires that the act complained of directly involves the illegal disbursement of public
before it will assume jurisdiction over cases involving constitutional disputes. funds derived from taxation. It is undisputed that there has been no allocation or
disbursement of public funds in this case as of yet.
The Court’s power of review may be awesome, but it is limited to actual cases and
controversies dealing with parties having adversely legal claims, to be exercised after The possible consequence of House Resolution No. 1109 is yet unrealized and does not
full opportunity of argument by the parties, and limited further to the constitutional infuse petitioners with locus standi
question raised or the very lis mota presented. The “case-or-controversy” requirement
bans this court from deciding “abstract, hypothetical or contingent questions,” lest the The rule on locus standi is not a plain procedural rule but a constitutional requirement
court give opinions in the nature of advice concerning legislative or executive action derived from Section 1, Article VIII of the Constitution, which mandates courts of justice
to settle only “actual controversies involving rights which are legally demandable and
An aspect of the “case-or-controversy” requirement is the requisite of “ripeness.” In the enforceable.”
United States, courts are centrally concerned with whether a case involves uncertain
contingent future events that may not occur as anticipated, or indeed may not occur Moreover, while the Court has taken an increasingly liberal approach to the rule of
at all. Another approach is the evaluation of the twofold aspect of ripeness: first, the locus standi, evolving from the stringent requirements of “personal injury” to the broader
fitness of the issues for judicial decision; and second, the hardship to the parties entailed “transcendental importance” doctrine, such liberality is not to be abused. It is not an
by withholding court consideration. In our jurisdiction, the issue of ripeness is generally open invitation for the ignorant and the ignoble to file petitions that prove nothing but
treated in terms of actual injury to the plaintiff. Hence, a question is ripe for adjudication their cerebral deficit.
when the act being challenged has had a direct adverse effect on the individual
challenging it. An alternative road to review similarly taken would be to determine IN VIEW WHEREOF, the petitions are dismissed.
whether an action has already been accomplished or performed by a branch of
government before the courts may step in.
In the present case, the fitness of petitioners’ case for the exercise of judicial review is
grossly lacking. In the first place, petitioners have not sufficiently proven any adverse
injury or hardship from the act complained of. In the second place, House Resolution
No. 1109 only resolved that the House of Representatives shall convene at a future time
for the purpose of proposing amendments or revisions to the Constitution. No actual
3. JELBERT B. GALICTO v. H.E. PRESIDENT BENIGNO SIMEON C. AQUINO III, in his incorrect remedy; instead a petition for declaratory relief under Rule 63 of the Rules of
capacity as President of the Republic of the Philippines; ATTY. PAQUITO N. Court, filed with the Regional Trial Court (RTC), is the proper recourse to assail the validity
OCHOA, JR., in his capacity as Executive Secretary; and FLORENCIO B. ABAD, of EO 7.
in his capacity as Secretary of the Department of Budget and Management,
G.R. No. 193978 : February 28, 2012 CONSTITUTIONAL LAW: locus standi
FACTS: Locus standi or legal standing has been defined as a personal and substantial interest in
Pres. Aquino made public in his first State of the Nation Address the alleged a case such that the party has sustained or will sustain direct injury as a result of the
excessive allowances, bonuses and other benefits of Officers and Members of the governmental act that is being challenged. The gist of the question on standing is
Board of Directors of the Manila Waterworks and Sewerage System a government whether a party alleges such personal stake in the outcome of the controversy as to
owned and controlled corporation (GOCC) which has been unable to meet its assure that concrete adverseness which sharpens the presentation of issues upon which
standing obligations. the court depends for illumination of difficult constitutional questions.
Subsequently, the Senate conducted an inquiry in aid of legislation on the reported
excessive salaries, allowances, and other benefits of GOCCs and government In the present case, the petitioner has not demonstrated that he has a personal stake or
financial institutions (GFIs). material interest in the outcome of the case because his interest, if any, is speculative
Based on its findings, officials and governing boards of various GOCCs and GFIs and based on a mere expectancy. In this case, the curtailment of future increases in his
have been granting themselves unwarranted allowances, bonuses, incentives, salaries and other benefits cannot but be characterized as contingent events or
stock options, and other benefits as well as other irregular and abusive practices expectancies. To be sure, he has no vested rights to salary increases and, therefore, the
Senate issued Senate Resolution No. 17 urging the President to order the immediate absence of such right deprives the petitioner of legal standing to assail EO 7.
suspension of the unusually large and apparently excessive allowances, bonuses,
incentives and other perks of members of the governing boards of GOCCs and The petition has been mooted by supervening events.
GFIs. Because of the transitory nature of EO 7, it has been pointed out that the present case
Heeding the call of Congress, Pres. Aquino, on September 8, 2010, issued EO 7, has already been rendered moot by the enactment of R.A. No. 10149 amending the
entitled Directing the Rationalization of the Compensation and Position provisions in the charters of GOCCs and GFIs empowering their board of
Classification System in the GOCCs and GFIs, and for Other Purposes. directors/trustees to determine their own compensation system, in favor of the grant of
EO 7 provided for the guiding principles and framework to establish a fixed authority to the President to perform this act. With the enactment of the GOCC
compensation and position classification system for GOCCs and GFIs. Governance Act of 2011, the President is now authorized to fix the compensation
EO 7 was published and precluded the Board of Directors, Trustees and/or Officers framework of GOCCs and GFIs.
of GOCCs from granting and releasing bonuses and allowances to members of the
board of directors, and from increasing salary rates of and granting new or DISMISSED.
additional benefits and allowances to their employees.
Petitioner Jelbert Galicto allegedly questions the constitutionality of E.O 7 in his
capacity as a lawyer and as an employee of PhilHealth Regional Office.
As he allegedly stands to be prejudiced by E.O 7 because it suspends or imposes a
moratorium on the grant of salary increase and other benefits granted to the
GOCC and GFI officials.
Moreover, he claims interest in making sure that laws and orders by government
officials are legally issued and implemented.
The respondents pointed out the following procedural defects as grounds for the
petition's dismissal: (1) the petitioner lacks locus standi; and (2) certiorari is not
applicable to this case.
Meanwhile, on June 6, 2011, Congress enacted Republic Act (R.A.) No. 10149,
otherwise known as the GOCC Governance Act of 2011. Section 11 of RA 10149
expressly authorizes the President to fix the compensation framework of GOCCs
and GFIs.
Under the Rules of Court, petitions for Certiorari and Prohibition are availed of to
question judicial, quasi-judicial and mandatory acts. Since the issuance of an EO is not
judicial, quasi-judicial or a mandatory act, a petition for certiorari and prohibition is an
4. MOLDEX REALTY INC. v. HLURB series of 1994, directing subdivision developers to shoulder the electricity cost of
streetlights. At the time of the filing of the instant petition, the new provision was already
FACTS: in effect. That being the situation, the instant petition has become moot and
This is a petition for prohibition and certiorari with respect to the HLURB’s resolution academic.
against the Petitioner. It is a well-established rule that a court should not pass upon a constitutional question
Petitioner Moldex Realty, Inc. is a domestic corporation engaged in real estate and decide a law, or an administrative regulation as in the instant case, to be
development. unconstitutional or invalid, unless such question is raised by the parties and that when it
o It is the owner-developer of Metrogate Complex Phase I, a subdivision situated is raised, if the record also presents some other ground upon which the court may raise
in Mey-cauayan, Marilao, Bulacan. its judgment, that course will be adopted and the constitutional question will be left for
The HLURB issued petitioner a License to Sell parcels of land within the subdivision. consideration until such question will be unavoidable. In other words, the Court will not
A sufficient number of lot buyers and homeowners in the subdivision formally touch the issue of unconstitutionality unless it is the very lis mota of the case.
organized to become the Metrogate Complex Village Homeowners’ Association.
Petitioner claims that since the completion of the subdivision, it had been When an administrative regulation is attacked for being unconstitutional or invalid, a
subsidizing and advancing the payment for the delivery and maintenance of party may raise its unconstitu-tionality or invalidity on every occasion that the regulation
common facilities including the operation of streetlights and the payment of the is being enforced. For the Court to exercise its power of judicial review, the party
corresponding electric bills. assailing the regulation must show that the question of constitutionality has been raised
Eventually, the petitioner decided to stop paying the electric bills for the streetlights at the earliest opportunity.9 This requisite should not be taken to mean that the question
and advised respondent association to assume this obligation. of constitutionality must be raised immediately after the execution of the state action
Respondent association objected to petitioner’s resolution and refused to pay the complained of. That the question of constitutionality has not been raised before is not a
electric bills. valid reason for refusing to allow it to be raised later. A contrary rule would mean that a
Consequently, Meralco discontinued its service, prompting respondent association law, otherwise unconstitutional, would lapse into constitutionality by the mere failure of
to apply for a preliminary injunction and preliminary mandatory injunction with the the proper party to promptly file a case to challenge the same.
HLURB against petitioner.
HUDCC’s regulation as the basis of its decsion against the petitioner stems from MAIN POINT: Given the presumed validity of an executive act, the petitioner who claims
Resolution No. R-562, series of 1994, which particularly provides that “subdivision otherwise has the burden of showing first that the case cannot be resolved unless the
owners/developers shall continue to maintain street lights facilities and, unless constitutional question he raised is determined by the Court. It is a well-established rule
otherwise stipulated in the contract, pay the bills for electric consumption of the that a court should not pass upon a constitutional question and decide a law, or an
subdivision street lights until the facilities in the project are turned over to the local administrative regulation as in the instant case, to be unconstitutional or invalid, unless
government until after completion of development in accordance with PD 957, PD such question is raised by the parties and that when it is raised, if the record also
1216 and their implementing rules and regulations.”, rendering the petition moot presents some other ground upon which the court may raise its judgment, that course
and academic. will be adopted and the constitutional question will be left for consideration until such
Petitioner elevated the matter to the Court of Appeals by filing a Petition for question will be unavoidable. In other words, the Court will not touch the issue of
Prohibition and Certiorari, praying not only for the reversal of the writ of preliminary unconstitutionality unless it is the very lis mota of the case.
mandatory injunction, as well as the Resolution dated 5 April 2001 and the Order
dated 28 May 2001, but also for the nullification of HUDCC Resolution No. R-562,
series of 1994, on the ground that it is unconstitutional.
During the pendency of the petition before the Court of Appeals, the HUDCC
approved Board Resolution No. R-699, series of 2001, entitled “Amending the Rules
and Regulations Implementing the Subdivision and Condominium Buyer’s
Protective Decree and Other Related Laws.”
The Court of Appeals dismissed the petition on the ground that petitioner should
have raised the constitutionality of HUDCC Resolution No. R-562, series of 1994,
directly to the Supreme Court.
ISSUE: Whether or not the petition for certiorari and prohibition assailing HLURB decision
presents a justiciable controversy.
HELD: NO.
Resolution No. 699, series of 2001, entitled Amending the Rules and Regulations
Implementing the Subdivision and Condominium Buyer’s Protective Decree and Other
Related Laws, was passed by the HUDCC. The regulation amended certain design
standards for subdivision projects, among which is the proportionate obligation of
subdivision homeowners in the payment of the electricity cost of streetlights. The
amendatory provision has superseded the provision in HUDCC Resolution No. R-562,
5. ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND MARLOW Petitioner’s claim that the subject clause unduly interferes with the stipulations in his
NAVIGATION CO., INC. GR No. 167614 – March 24, 2009 contract on the term of his employment and the fixed salary package he will receive is
not tenable.
FACTS:
Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. Section 10, Article III of the Constitution provides: No law impairing the obligation of
and Marlow Navigation Co., Inc., under a POEA-approved contract of contracts shall be passed.
employment for 12 months, as Chief Officer, with the basic monthly salary of
US$1,400, plus $700/month overtime pay, and 7 days paid vacation leave per The prohibition is aligned with the general principle that laws newly enacted have only
month. a prospective operation, and cannot affect acts or contracts already perfected;
On March 19, 1998, the date of his departure, Serrano was constrained to accept a however, as to laws already in existence, their provisions are read into contracts and
downgraded employment contract for the position of Second Officer with a deemed a part thereof. Thus, the non-impairment clause under Section 10, Article II is
monthly salary of US$1,000 upon the assurance and representation of respondents limited in application to laws about to be enacted that would in any way derogate
that he would be Chief Officer by the end of April 1998. from existing acts or contracts by enlarging, abridging or in any manner changing the
Respondents did not deliver on their promise to make Serrano Chief Officer. intention of the parties thereto.
Serrano refused to stay on as second Officer and was repatriated to the Philippines
on May 26, 1998, serving only two (2) months and seven (7) days of his contract, As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the
leaving an unexpired portion of nine (9) months and twenty-three (23) days. execution of the employment contract between petitioner and respondents in 1998.
Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired
constructive dismissal and for payment of his money claims in the total amount of the employment contract of the parties. Rather, when the parties executed their 1998
US$26,442.73 (based on the computation of $2590/month from June 1998 to employment contract, they were deemed to have incorporated into it all the provisions
February 199, $413.90 for March 1998, and $1640 for March 1999) as well as moral of R.A. No. 8042.
and exemplary damages.
The LA declared the petitioner’s dismissal illegal and awarded him US$8,770, But even if the Court were to disregard the timeline, the subject clause may not be
representing his salaray for three (3) months of the unexpired portion of the declared unconstitutional on the ground that it impinges on the impairment clause, for
aforesaid contract of employment, plus $45 for salary differential and for attorney’s the law was enacted in the exercise of the police power of the State to regulate a
fees equivalent to 10% of the total amount; however, no compensation for business, profession or calling, particularly the recruitment and deployment of OFWs,
damages as prayed was awarded. with the noble end in view of ensuring respect for the dignity and well-being of OFWs
On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, wherever they may be employed. Police power legislations adopted by the State to
representing three (3) months salary at $1400/month, plus 445 salary differential and promote the health, morals, peace, education, good order, safety, and general welfare
10% for attorney’s fees. This decision was based on the provision of RA 8042, which of the people are generally applicable not only to future contracts but even to those
was made into law on July 15, 1995. already in existence, for all private contracts must yield to the superior and legitimate
Serrano filed a Motion for Partial Reconsideration, but this time he questioned the measures taken by the State to promote public welfare.
constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042,
which reads: 2. YES.
o Sec. 10. Money Claims. – x x x In case of termination of overseas
employment without just, valid or authorized cause as defined by law or Section 1, Article III of the Constitution guarantees: No person shall be deprived of life,
contract, the workers shall be entitled to the full reimbursement of his liberty, or property without due process of law nor shall any person be denied the equal
placement fee with interest of twelve percent (12%) per annum, plus his protection of the law.
salaries for the unexpired portion of his employment contract or for three
(3) months for every year of the unexpired term, whichever is less. Section 18, Article II and Section 3, Article XIII accord all members of the labor sector,
The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the without distinction as to place of deployment, full protection of their rights and welfare.
Court of Appeals (CA), reiterating the constitutional challenge against the subject
clause. The CA affirmed the NLRC ruling on the reduction of the applicable salary To Filipino workers, the rights guaranteed under the foregoing constitutional provisions
rate, but skirted the constitutional issue raised by herein petitioner Serrano. translate to economic security and parity: all monetary benefits should be equally
enjoyed by workers of similar category, while all monetary obligations should be borne
ISSUES: by them in equal degree; none should be denied the protection of the laws which is
1. Whether or not the subject clause violates Section 10, Article III of the Constitution on enjoyed by, or spared the burden imposed on, others in like circumstances.
non-impairment of contracts; -- NO
2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Such rights are not absolute but subject to the inherent power of Congress to
Section 18, Article II and Section 3, Article XIII on labor as a protected sector. -- YES incorporate, when it sees fit, a system of classification into its legislation; however, to be
valid, the classification must comply with these requirements: 1) it is based on substantial
HELD: distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing
1. NO. conditions only; and 4) it applies equally to all members of the class.
There are three levels of scrutiny at which the Court reviews the constitutionality of a In fine, the Government has failed to discharge its burden of proving the existence of a
classification embodied in a law: a) the deferential or rational basis scrutiny in which the compelling state interest that would justify the perpetuation of the discrimination against
challenged classification needs only be shown to be rationally related to serving a OFWs under the subject clause.
legitimate state interest; b) the middle-tier or intermediate scrutiny in which the
government must show that the challenged classification serves an important state Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect
interest and that the classification is at least substantially related to serving that interest; the employment of OFWs by mitigating the solidary liability of placement agencies, such
and c) strict judicial scrutiny in which a legislative classification which impermissibly callous and cavalier rationale will have to be rejected. There can never be a
interferes with the exercise of a fundamental right or operates to the peculiar justification for any form of government action that alleviates the burden of one sector,
disadvantage of a suspect class is presumed unconstitutional, and the burden is upon but imposes the same burden on another sector, especially when the favored sector is
the government to prove that the classification is necessary to achieve a compelling composed of private businesses such as placement agencies, while the disadvantaged
state interest and that it is the least restrictive means to protect such interest. sector is composed of OFWs whose protection no less than the Constitution commands.
The idea that private business interest can be elevated to the level of a compelling
Upon cursory reading, the subject clause appears facially neutral, for it applies to all state interest is odious.
OFWs. However, a closer examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on, OFWs at two levels: Moreover, even if the purpose of the subject clause is to lessen the solidary liability of
placement agencies vis-a-vis their foreign principals, there are mechanisms already in
First, OFWs with employment contracts of less than one year vis-à-vis OFWs with place that can be employed to achieve that purpose without infringing on the
employment contracts of one year or more; constitutional rights of OFWs.
Second, among OFWs with employment contracts of more than one year; and The POEA Rules and Regulations Governing the Recruitment and Employment of Land-
Based Overseas Workers, dated February 4, 2002, imposes administrative disciplinary
Third, OFWs vis-à-vis local workers with fixed-period employment; measures on erring foreign employers who default on their contractual obligations to
migrant workers and/or their Philippine agents. These disciplinary measures range from
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who temporary disqualification to preventive suspension. The POEA Rules and Regulations
were illegally discharged were treated alike in terms of the computation of their money Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains
claims: they were uniformly entitled to their salaries for the entire unexpired portions of similar administrative disciplinary measures against erring foreign employers.
their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the
subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in Resort to these administrative measures is undoubtedly the less restrictive means of
their employment contract have since been differently treated in that their money aiding local placement agencies in enforcing the solidary liability of their foreign
claims are subject to a 3-month cap, whereas no such limitation is imposed on local principals.
workers with fixed-term employment.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of
The Court concludes that the subject clause contains a suspect classification in that, in the right of petitioner and other OFWs to equal protection.
the computation of the monetary benefits of fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion The subject clause “or for three months for every year of the unexpired term, whichever
of one year or more in their contracts, but none on the claims of other OFWs or local is less” in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED
workers with fixed-term employment. The subject clause singles out one classification of UNCONSTITUTIONAL.
OFWs and burdens it with a peculiar disadvantage.
What constitutes compelling state interest is measured by the scale of rights and powers
arrayed in the Constitution and calibrated by history. It is akin to the paramount interest
of the state for which some individual liberties must give way, such as the public interest
in safeguarding health or maintaining medical standards, or in maintaining access to
information on matters of public concern.
In the present case, the Court dug deep into the records but found no compelling state
interest that the subject clause may possibly serve.
6. SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, vs. JOY C. CABILES, Thus, when a law or a provision of law is null because it is inconsistent with the
Respondent. G.R. No. 170139 August 5, 2014 Constitution, the nullity cannot be cured by reincorporation or reenactment of the same
or a similar law or provision. A law or provision of law that was already declared
TOPIC: Section 10 of RA 8042 vis-a-vis Section 7 of RA 10022 unconstitutional remains as such unless circumstances have so changed as to warrant a
reverse conclusion.
FACTS:
Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and The Court observed that the reinstated clause, this time as provided in Republic Act. No.
placement agency. 10022, violates the constitutional rights to equal protection and due process.96
Respondent Joy Cabiles was hired thus signed a one-year employment contract for Petitioner as well as the Solicitor General have failed to show any compelling change in
a monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, the circumstances that would warrant us to revisit the precedent.
Co. Ltd. (Wacoal) on June 26, 1997.
She alleged that in her employment contract, she agreedto work as quality control The Court declared, once again, the clause, “or for three (3) months for every year of
for one year. In Taiwan, she was asked to work as a cutter. the unexpired term, whichever is less” in Section 7 of Republic Act No. 10022 amending
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Section 10 of Republic Act No. 8042 is declared unconstitutional and, therefore, null and
Joy, without prior notice, that she was terminated and that “she should void.
immediately report to their office to get her salary and passport.”
She was asked to “prepare for immediate repatriation.”
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a
total of NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her
plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC
against petitioner and Wacoal. LA dismissed the complaint.
NLRC reversed LA’s decision.
CA affirmed the ruling of the National Labor Relations Commission finding
respondent illegally dismissed and awarding her three months’ worth of salary, the
reimbursement of the cost of her repatriation, and attorney’s fees
ISSUE: Whether Cabiles was entitled to the unexpired portion of her salary due to illegal
dismissal.
HELD: YES. The Court held that the award of the three-month equivalent of respondent’s
salary should be increased to the amount equivalent to the unexpired term of the
employment contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court
ruled that the clause “or for three (3) months for every year of the unexpired term,
whichever is less” is unconstitutional for violating the equal protection clause and
substantive due process.
The Court said that they are aware that the clause “or for three (3) months for every
year of the unexpired term, whichever is less” was reinstated in Republic Act No. 8042
upon promulgation of Republic Act No. 10022 in 2010.
Issue: Whether or not the Cityhood Laws violate Section 10, Article X of the Constitution
The equal protection clause of the 1987 Constitution permits a valid classification under
and the equal protection clause
the following conditions:
Held: Yes, the Cityhood Laws violate both the Constitution and the equal protection
clause 1. The classification must rest on substantial distinctions;
2. The classification must be germane to the purpose of the law;
Section 10, Article X of the 1987 Constitution provides: 3. The classification must not be limited to existing conditions only; and
No province, city, municipality, or barangay shall be created, divided, 4. The classification must apply equally to all members of the same class.
merged, abolished or its boundary substantially altered, except in accordance
with the criteria established in the local government code and subject to Limiting the exemption only to the 16 municipalities violates the requirement that the
approval by a majority of the votes cast in a plebiscite in the political units classification must apply to all similarly situated. Municipalities with the same income as
directly affected. (Emphasis supplied) the 16 respondent municipalities cannot convert into cities, while the 16 respondent
municipalities can. Clearly,as worded the exemption provision found in the Cityhood
The Constitution is clear. The creation of local government units must follow the criteria Laws, even if it were written in Section 450 of the Local Government Code, would still be
established in the Local Government Code and not in any other law. There is only one unconstitutional for violation of the equal protection clause.
Local Government Code. The Constitution requires Congress to stipulate in the Local
Government Code all the criteria necessary for the creation of a city, including the
conversion of a municipality into a city. Congress cannot write such criteria in any other
law, like the Cityhood Laws.
ISSUE: WON COA’s interference, in this case, violates the judiciary’s autonomy. In the context of the grant now in issue, the use of the formula provided in CFAG Joint
Resolution No. 35 is a part of the Court’s exercise of its discretionary authority to
HELD: Yes. determine the manner the granted retirement privileges and benefits can be availed of.
Any kind of interference on how these retirement privileges and benefits are exercised
The COA’s authority to conduct post-audit examinations on constitutional bodies and availed of, not only violates the fiscal autonomy and independence of the
granted fiscal autonomy is provided under Section 2(1), Article IX-D of the 1987 Judiciary, but also encroaches upon the constitutional duty and privilege of the Chief
Constitution. This authority, however, must be read not only in light of the Court’s fiscal Justice and the Supreme Court En Banc to manage the Judiciary’s own affairs.
autonomy, but also in relation with the constitutional provisions on judicial
independence and the existing jurisprudence and Court rulings on these matters. The
concept of the independence of the three branches of government extends from the
notion that the powers of government must be divided to avoid concentration of these
powers in any one branch; the division, it is hoped, would avoid any single branch from
lording its power over the other branches or the citizenry. To achieve this purpose, the
divided power must be wielded by co-equal branches of government that are equally
capable of independent action in exercising their respective mandates; lack of
independence would result in the inability of one branch of government to check the
arbitrary or self-interest assertions of another or others.
Thus, judicial independence can be “broken down into two distinct concepts:
decisional independence and institutional independence.” Decisional independence
“refers to a judge’s ability to render decisions free from political or popular influence
based solely on the individual facts and applicable law.”On the other hand, institutional
9. RE: REQUEST FOR GUIDANCE/CLARIFICATION ON SEC. 7, RULE 111 OF RA NO.
10154 REQUIRING RETIRING GOVERNMENT EMPLOYEES TO SECURE A CLEARANCE By virtue of its power of administrative supervision over all courts and the personnel
OF PENDENCY/NON-PENDENCY OF CASE IS FROM THE CIVIL SERVICE
thereof, it is only the Supreme Court that can oversee the judges’ and court personnel’s
COMMISSION administrative compliance with all laws, rules and regulations — no other branch of
government may intrude into this power, without running afoul of the doctrine of
FACTS: separation of powers; In case of violation of the Civil Service Law by a court personnel,
the standard procedure is for the Civil Service Commission (CSC) to bring its complaint
Atty. Eden T. Candelaria, Deputy Clerk of Court requested guidance/clarification against a judicial employee before the Office of the Court Administrator of the Supreme
on the applicability to the Judiciary of Section 7, Rule III of the Implementing Rules Court.
and Regulations of Republic Act No. (RA) 101541 which states:
o Section 7. Notice of Pendency of Case.—The retiring employee shall seek
Clearance of Pendency/Non-Pendency of Administrative Case from his/her
employer agency, Civil Service Commission (CSC), Office of the Ombudsman,
or in case of presidential appointees, from the Office of the President.
Section 6,2 Article VIII of the 1987 Philippine Constitution (Constitution) exclusively
vests in the Court administrative supervision over all courts and court personnel. As
such, it oversees the court personnel’s compliance with all laws and takes the
proper administrative action against them for any violation thereof. As an adjunct
thereto, it keeps in its custody records pertaining to the administrative cases of
retiring court personnel.
HELD: NO.
In view of the foregoing, the Court rules that the subject provision — which requires
retiring government employees to secure a prior clearance of pendency/non-
pendency of administrative case/s from, among others, the CSC — should not be made
to apply to employees of the Judiciary.
To further clarify the matter, the same principles dictate that a prior clearance of
pendency/non-pendency of administrative case/s from the Office of the President
(albeit some court personnel are presidential appointees, e.g., Supreme Court Justices)
or the Office of the Ombudsman should not equally apply to retiring court personnel.
Verily, the administrative supervision of court personnel and all affairs related thereto fall
within the exclusive province of the Judiciary.
It must, however, be noted that since the Constitution only accords the Judiciary
administrative supervision over its personnel, a different treatment of the clearance
requirement obtains with respect to criminal cases. As such, a clearance requirement
which pertains to criminal cases may be imposed by the appropriate government
agency, i.e., the Office of the Ombudsman,6 on retiring court personnel as it is a matter
beyond the ambit of the Judiciary’s power of administrative supervision.
Consequently, the Court is compelled to rule that Jardeleza should have been included
in the shortlist submitted to the President for the vacated position of Associate Justice
Abad. This consequence arose from the violation by the JBC of its own rules of
procedure and the basic tenets of due process.
True, Jardeleza has no vested right to a nomination, but this does not prescind from the
fact that the JBC failed to observe the minimum requirements of due process.
ISSUE: Does the Supreme Court’s power of supervision over the JBC include the
remedies of certiorari and mandamus?
Even though finding the current composition of the JBC as unconstitutional, all its prior
official actions are valid. Actions previous to the declaration of unconstitutionality are
legally recognized under the doctrine of operative facts. These official actions are not
nullified.
(3) As a general rule, an unconstitutional act is not a law; it confers no rights; it imposes
no duties; it affords no protection; it creates no office; it is inoperative as if it has not
been passed at all. This rule, however, is not absolute. Under the doctrine of operative
facts, actions previous to the declaration of unconstitutionality are legally recognized.
They are not nullified. This is essential in the interest of fair play.
The doctrine of operative fact, as an exception to the general rule, only applies as a
matter of equity and fair play. It nullifies the effects of an unconstitutional law by
recognizing that the existence of a statute prior to a determination of unconstitutionality
is an operative fact and may have consequences which cannot always be ignored.
The past cannot always be erased by a new judicial declaration. The doctrine is
applicable when a declaration of unconstitutionality will impose an undue burden on
those who have relied on the invalid law. Thus, it was applied to a criminal case when a
declaration of unconstitutionality would put the accused in double jeopardy or would
put in limbo the acts done by a municipality in reliance upon a law creating it.3
Under the circumstances, the Court finds the exception applicable in this case and
holds that notwithstanding its finding of unconstitutionality in the current composition of
the JBC, all its prior official actions are nonetheless valid.
12. G.R. No. 228628 REP. REYNALDO V. UMALI, in his capacity as Chairman of the omitted is to be held as intentionally omitted and the Judiciary cannot supply the
House of Representatives Committee on Justice and Ex Officio Member of the omission as that would be tantamount to judicial legislation.
JBC, Petitioner vs. THE JUDICIAL AND BAR COUNCIL, chaired by THE HON.
MARIA LOURDES P.A. SERENO, Chief Justice and Ex Officio Chairperson, LAWS/PROVISIONS:
Respondent
Section 8, Article VIII, 1987 Constitution: A Judicial and Bar Council is hereby
FACTS: created under the supervision of the Supreme Court composed of the Chief
In Section 8, Article VIII of the 1987 Constitution of the Philippines, the members Justice as ex officio Chairman, the Secretary of Justice, and a
of the Judicial and Bar Council of the Philippines was stipulated. representative of the Congress as ex officio Members, a representative of
These are the Chief Justice, the Secretary of Justice, a representative of the the Integrated Bar, a professor of law, a retired Member of the Supreme
Congress, a representative of the Integrated Bar, a professor of law, a retired Court, and a representative of the private sector.
member of the Supreme Court, and a representative from the Private Sector.
On the 12th of July in 2012, the Supreme Court ruled in the Chavez V. JBC case Article 8, Civil Code: Judicial decisions applying or interpreting the laws or the
that having two (2) members of Congress as representatives is unconstitutional Constitution shall form a part of the legal system of the Philippines
as the framers intended for a single member of Congress to represent the
department in the JBC.
As a result, the Congress agreed upon a 6-month rotational representation in
the JBC wherein the House of Representatives would represent the
department from January to June and the Senate would represent the
department from July to December.
On the 2nd and 9th of December in 2016, petitioner Reynaldo Umali, the
Chairman of the House of Representatives, cast his votes for the selection of
Supreme Court Justices. With him being from the HOR, his votes were not
counted by the JBC.
ISSUE: Whether the present practice of the JBC in allowing only one (1) member of
Congress to represent the department during deliberations is unconstitutional.
RULING: No.
The JBC is merely following the provisions stipulated in Section 8 of Article VIII of the 1987
Constitution and the Supreme Court’s ruling in the Chavez case.
The Court further ruled that the JBC’s action was ministerial in nature, given that the JBC
did not act with any decision and was merely performing in a prescribed manner.
Otherwise, that would be a discretionary act.
The doctrine of Stare Decesis is used the court’s decision given the fact that they had
already ruled a similar case with similar facts in Chavez V. JBC wherein the latter also
discussed the constitutionality of the JBC’s adoption of a 6-month rotational
representation in the JBC. This doctrine is further bolstered by Article 8 of the Civil Code
of the Philippines, which allows for judicial decisions to be a part of the legal system in
the Philippines.
With regards to Section 8, Article VIII of the 1987 Constitution, the Court ruled in Chavez
and in the present case at bar that the framers intended for the equal representation of
all three government branches namely, the Legislative, the Executive, and the Judiciary.
To have more than one member representing each department would be unfair.
The court further ruled that when the framers stipulated “a representative of the
Congress,” they had not anticipated that the government would shift from a
unicameral Congress to a bicameral one. Following the rule of Casus Omissus, a case
13. FERDINAND R. VILLANUEVA, PRESIDING JUDGE, MCTC, COMPOSTELA-NEW
BATAAN, COMPOSTELA VALLEY PROVINCE, Petitioner, v. JUDICIAL AND BAR Issue:
COUNCIL, Respondent. (1) W/N the policy of JBC requiring five years of service as judges of first-level
courts before they can qualify as applicant to second-level courts is
RECIT READY constitutional – YES
Petitioner applied for a position as a judge in a second level court but JBC did (2) W/N the policy of JBC requiring five years of service as judges of first-level
not include his name in the list of applicants since he failed to qualify. courts before they can qualify as applicant to second-level courts is
This is because the JBC put priority to incumbent judges who served their constitutional
position for at least five years and petitioner here only served as judged for
more than a year. Held:
The petitioner assailed, inter alia, the authority of the JBC to add another
qualification (5-year-qualitification) because the said qualification was already (1) The said added 5-year-qualification being assailed by the petitioner is constitutional
prescribed since as stated in the Sect. 8 (5), Art. VIII, the JBC is mandated to recommend
The Supreme Court ruled that the internal process of choosing people who appointees to the judiciary. Consequently, it was also stated in the said provision
would qualify done by the JBC was valid since under Sect. 8 (5), Art. VIII of the that only the persons nominated by the JBC is transmitted to the president that will
Constitution gave the JBC principal function of recommending appointees to choose whom to nominate as judge in the judiciary.
the judiciary
FACTS:
Herein petitioner, Judge Ferdinand R. Villanueva was a presiding judge of the (2) Procedural Issues:
Municipal Circuit Trial Court of Compostela-New Bataas, Poblacion, Compostela
Valley Province, Region XI, which is a first-level court. Before resolving the substantive issues, the Court considers it necessary to first determine
o He applied on second-level courts such as Branch 31, Tagum City; Branch 13, whether or not the action for certiorari, prohibition and mandamus, and declaratory
Davao City; and Branch 6, Prosperidad, Adusan Del Sur. relief commenced by the petitioner was proper.
The Judicial and Bar Council’s (JBC) Office of Recruitment, Selection and One. The remedies of certiorari and prohibition are tenable. "The present Rules of Court
Nomination, informed the petitioner through a letter that we failed to qualify for the uses two special civil actions for determining and correcting grave abuse of discretion
said position he applied on. amounting to lack or excess of jurisdiction. These are the special civil actions for...
On the same day, petitioner sent a letter (electronic mail). certiorari and prohibition, and both are governed by Rule 65."[9] As discussed in the
o He seeks reconsideration of his non-inclusion in the list of the considered case of Maria Carolina P. Araullo, etc., et al. v. Benigno Simeon C. Aquino III, etc., et
applicants. al.,[10] this Court explained that:
o He also protested the inclusion of applicants who failed the prejudicature
examination Two. The remedy of mandamus cannot be availed of by the petitioner in assailing JBC's
Through a letter, the JBC Executive officer informed him that his protest and policy. The petitioner insisted that mandamus is proper because his right was violated
reconsideration was duly noted by the JBC en banc. when he was not included in the list of candidates for the RTC courts he applied for. He
Still the non-inclusion of his name in the list of applicants was upheld. said that... his non-inclusion in the list of candidates for these stations has caused him
o The reason was, the JBS’s long standing policy of giving priority to incumbent direct injury.
judges that served their current position for at least five years.
o Since the petitioner only served as a judged for more than a year only, his Three. The petition for declaratory relief is improper. "An action for declaratory relief
name was not included in the list. should be filed by a person interested under a deed, a will, a contract or other written
Petitioner argues that: instrument, and whose rights are affected by a statute, an executive order, a regulation
o Qualifications was already prescribed so the JBC could add no more or... an ordinance. The relief sought under this remedy includes the interpretation and
o The five-year-requirement violates the equal protection and due process determination of the validity of the written instrument and the judicial declaration of the
clauses of the constitution parties' rights or duties thereunder."[16] "[T]he purpose of the action is to... secure an
o The same requirement violates the constitutional provision on Social Justice authoritative statement of the rights and obligations of the parties under a statute,
and Human Rights for Equal Opportunity of employment, and deed, contract, etc., for their guidance in its enforcement or compliance and not to
o The requirement of passing the prejudicature exam should be mandatory. settle issues arising from its alleged breach."
Respondents argue that In this case, the petition for declaratory relief did not involve an unsound policy. Rather,
o The writ of certiorari and prohibition cannot issue to prevent the JBC from the petition specifically sought a judicial declaration that the petitioner has the right to
performing its principal function under the constitution to recommend be included in the list of applicants although he failed to meet JBC's five-year
appointees to the judiciary because the JBC is not a tribunal exercising judicial requirement... policy. No person possesses a legal right under the Constitution to be
or quasi-judicial function, included in the list of nominees for vacant judicial positions. The opportunity of
o Remedy of mandamus and declaratory relief will not lie because petitioner appointment to judicial office is a mere privilege, and not a judicially enforceable
does not have any legal right that need to be protected, right... that may be properly claimed by any person. The inclusion in the list of
o Legal protection clause is not violated because the 5-year-requirement is candidates, which is one of the incidents of such appointment, is not a right either. Thus,
performance and experience based, and
o No violation of due process since the policy is merely internal in nature.
the petitioner cannot claim any right that could have been affected by the assailed
policy.
Furthermore, the instant petition must necessarily fail because this Court does not have
original jurisdiction over a petition for declaratory relief even if only questions of law are
involved.[18] The special civil action of declaratory relief falls under... the exclusive
jurisdiction of the appropriate RTC pursuant to Section 19[19] of Batas Pambansa Blg.
129, as amended by R.A.No. 7691.[20]
Therefore, by virtue of the Court's supervisory duty over the JBC and in the exercise of its
expanded judicial power, the Court assumes jurisdiction over the present petition. But in
any event, even if the Court will set aside procedural infirmities, the instant petition
should... still be dismissed.
Substantive Issues
The functions of searching, screening, and selecting are necessary and incidental to the
JBC's principal function of choosing and recommending nominees for vacancies in the
judiciary for appointment by the President. However, the Constitution did not lay down
in precise terms... the process that the JBC shall follow in determining applicants'
qualifications. In carrying out its main function, the JBC has the authority to set the
standards/criteria in choosing its nominees for every vacancy in the judiciary, subject
only to the minimum qualifications... required by the Constitution and law for every
position. The search for these long held qualities necessarily requires a degree of
flexibility in order to determine who is most fit among the applicants. Thus, the JBC has
sufficient but not unbridled license to act in performing... its duties.
JBC's ultimate goal is to recommend nominees and not simply to fill up judicial
vacancies in order to promote an effective and efficient administration of justice. Given
this pragmatic situation, the JBC had to establish a set of uniform criteria in order to
ascertain whether an... applicant meets the minimum constitutional qualifications and
possesses the qualities expected of him and his office. Thus, the adoption of the five-
year requirement policy applied by JBC to the petitioner's case is necessary and
incidental to the function conferred by the
FACTS: Since the payment of legal fees is a vital component of the rules promulgated by this
The GSIS seeks exemption from the payment of legal fees imposed on GOCCs Court concerning pleading, practice and procedure, it cannot be validly annulled,
under Sec 22, Rule 141 (Legal Fees) of the ROC. The said provision states: changed or modified by Congress. As one of the safeguards of this Court’s institutional
SEC. 22. Government exempt. – The Republic of the Philippines, its agencies independence, the power to promulgate rules of pleading, practice and procedure is
and instrumentalities are exempt from paying the legal fees provided in this now the Court’s exclusive domain. That power is no longer shared by this Court with
Rule. Local government corporations and government-owned or controlled Congress, much less with the Executive.
corporations with or without independent charter are not exempt from paying
such fees. xx NOTES:
The GSIS anchors its petition on Sec 39 of its charter, RA 8291 (The GSIS Act of 1997): -The GSIS cannot successfully invoke the right to social security of government
SEC. 39. Exemption from Tax, Legal Process and Lien. – It is hereby declared to employees in support of its petition. It is a corporate entity whose personality is separate
be the policy of the State that the actuarial solvency of the funds of the GSIS and distinct from that of its individual members. The rights of its members are not its
shall be preserved and maintained at all times and that contribution rates rights; its rights, powers and functions pertain to it solely and are not shared by its
necessary to sustain the benefits under this Act shall be kept as low as possible members.
in order not to burden the members of the GSIS and their employers. Taxes
imposed on the GSIS tend to impair the actuarial solvency of its funds and -Congress could not have carved out an exemption for the GSIS from the payment of
increase the contribution rate necessary to sustain the benefits of this Act. legal fees without transgressing another equally important institutional safeguard of the
Court’s independence — fiscal autonomy. Fiscal autonomy recognizes the power and
Accordingly, notwithstanding any laws to the contrary, the GSIS, its assets, authority of the Court to levy, assess and collect fees, including legal fees. Moreover,
revenues including accruals thereto, and benefits paid, shall be exempt from legal fees under Rule 141 have two basic components, the Judiciary Development Fund
all taxes, assessments, fees, charges or duties of all kinds. These exemptions (JDF) and the Special Allowance for the Judiciary Fund (SAJF). The laws which
shall continue unless expressly and specifically revoked and any assessment established the JDF and the SAJF[33] expressly declare the identical purpose of these
against the GSIS as of the approval of this Act are hereby considered paid. funds to “guarantee the independence of the Judiciary as mandated by the
Consequently, all laws, ordinances, regulations, issuances, opinions or Constitution and public policy.”
jurisprudence contrary to or in derogation of this provision are hereby deemed
repealed, superseded and rendered ineffective and without legal force and Legal fees therefore do not only constitute a vital source of the Court’s financial
effect. xx resources but also comprise an essential element of the Court’s fiscal independence.
Required to comment on the GSIS’ petition, the OSG maintains that the petition Any exemption from the payment of legal fees granted by Congress to government-
should be denied. owned or controlled corporations and local government units will necessarily reduce
On this Court’s order, the Office of the Chief Attorney (OCAT) submitted a report the JDF and the SAJF. Undoubtedly, such situation is constitutionally infirm for it impairs
and recommendation on the petition of the GSIS and the comment of the OSG the Court’s guaranteed fiscal autonomy and erodes its independence.
thereon. According to the OCAT, the claim of the GSIS for exemption from the
payment of legal fees has no legal basis. -Speaking for the Court, then Associate Justice (now Chief Justice) Reynato S. Puno
traced the history of the rule-making power of this Court and highlighted its evolution
ISSUE: May the legislature exempt the GSIS from legal fees imposed by the Court on and development in Echegaray v. Secretary of Justice:
GOCCs and local government units? Under the 1935 Constitution, the power of this Court to promulgate rules concerning
pleading, practice and procedure was granted but it appeared to be co-existent with
HELD: NO legislative power for it was subject to the power of Congress to repeal, alter or
supplement. Thus, its Section 13, Article VIII provides:
Rule 141 (on Legal Fees) of the ROC was promulgated by this Court in the exercise of its Sec. 13. The Supreme Court shall have the power to promulgate rules
rule-making powers under Sec 5(5), Art VIII of the Constitution: concerning pleading, practice and procedure in all courts, and the admission
to the practice of law. Said rules shall be uniform for all courts of the same
Sec. 5. The Supreme Court shall have the following powers: grade and shall not diminish, increase, or modify substantive rights. The existing
xxxxxxxxx laws on pleading, practice and procedure are hereby repealed as statutes,
(5) Promulgate rules concerning the protection and enforcement of constitutional and are declared Rules of Court, subject to the power of the Supreme Court to
rights, pleading, practice, and procedure in all courts, the admission to the alter and modify the same. The Congress shall have the power to repeal, alter
practice of law, the Integrated Bar, and legal assistance to the underprivileged. or supplement the rules concerning pleading, practice and procedure, and
xxxxxxxx the admission to the practice of law in the Philippines.
Clearly, therefore, the payment of legal fees under Rule 141 of the ROC is an integral The said power of Congress, however, is not as absolute as it may appear on its surface.
part of the rules promulgated by this Court pursuant to its rule-making power under In In re Cunanan, Congress in the exercise of its power to amend rules of the Supreme
Section 5(5), Article VIII of the Constitution. In particular, it is part of the rules concerning Court regarding admission to the practice of law, enacted the Bar Flunkers Act of 1953
which considered as a passing grade, the average of 70% in the bar examinations after
July 4, 1946 up to August 1951 and 71% in the 1952 bar examinations. This Court struck promulgate rules of pleading, practice and procedure is no longer shared by this Court
down the law as unconstitutional. In his ponencia, Mr. Justice Diokno held that “x x x the with Congress, more so with the Executive.
disputed law is not a legislation; it is a judgment – a judgment promulgated by this Court
during the aforecited years affecting the bar candidates concerned; and although this WHEREFORE, the petition of the GSIS for recognition of its exemption from the payment
Court certainly can revoke these judgments even now, for justifiable reasons, it is no less of legal fees imposed under Sec 22 of Rule 141 of the ROC on GOCCs and LGUs is
certain that only this Court, and not the legislative nor executive department, that may hereby DENIED .
do so. Any attempt on the part of these departments would be a clear usurpation of its
function, as is the case with the law in question.” The venerable jurist further ruled: “It is
obvious, therefore, that the ultimate power to grant license for the practice of law
belongs exclusively to this Court, and the law passed by Congress on the matter is of
permissive character, or as other authorities say, merely to fix the minimum conditions for
the license.” By its ruling, this Court qualified the absolutist tone of the power of Congress
to “repeal, alter or supplement the rules concerning pleading, practice and procedure,
and the admission to the practice of law in the Philippines.
The ruling of this Court in In re Cunanan was not changed by the 1973 Constitution. For
the 1973 Constitution reiterated the power of this Court “to promulgate rules concerning
pleading, practice and procedure in all courts, x x x which, however, may be repealed,
altered or supplemented by the Batasang Pambansa x x x.” More completely, Section
5(2)5 of its Article X provided:
xxxxxxxxx
Sec. 5. The Supreme Court shall have the following powers.
xxxxxxxxx
(5) Promulgate rules concerning pleading, practice, and procedure in all
courts, the admission to the practice of law, and the integration of the Bar,
which, however, may be repealed, altered, or supplemented by the Batasang
Pambansa. Such rules shall provide a simplified and inexpensive procedure for
the speedy disposition of cases, shall be uniform for all courts of the same
grade, and shall not diminish, increase, or modify substantive rights.
Well worth noting is that the 1973 Constitution further strengthened the
independence of the judiciary by giving to it the additional power to
promulgate rules governing the integration of the Bar.
The 1987 Constitution molded an even stronger and more independent judiciary.
Among others, it enhanced the rule making power of this Court. Its Section 5(5), Article
VIII provides:
xxxxxxxxx
Section 5. The Supreme Court shall have the following powers:
xxxxxxxxx
(5) Promulgate rules concerning the protection and enforcement of
constitutional rights, pleading, practice and procedure in all courts, the
admission to the practice of law, the Integrated Bar, and legal assistance to
the underprivileged. Such rules shall provide a simplified and inexpensive
procedure for the speedy disposition of cases, shall be uniform for all courts of
the same grade, and shall not diminish, increase, or modify substantive rights.
Rules of procedure of special courts and quasi-judicial bodies shall remain
effective unless disapproved by the Supreme Court.
The rule making power of this Court was expanded. This Court for the first time was given
the power to promulgate rules concerning the protection and enforcement of
constitutional rights. The Court was also granted for the first time the power to
disapprove rules of procedure of special courts and quasi-judicial bodies. But most
importantly, the 1987 Constitution took away the power of Congress to repeal, alter, or
supplement rules concerning pleading, practice and procedure. In fine, the power to
15. Salvador Estipona vs. Hon. Judge Lobrigo G.R. 226679, 15 Aug. 2017 Bearing in mind the very important and pivotal issues raised in this petition, technical
matters should not deter Us from having to make the final and definitive
FACTS: pronouncement that everyone else depends for enlightenment and guidance. When
public interest requires, the Court may brush aside procedural rules in order to resolve a
Petitioner Salvador Estipona, Jr. was accused in Criminal Case No. 13586 for constitutional issue.
violation of Section 11, Article II of R.A. No. 9165, for having illegally have in his
possession 0.084 gram of shabu. On SC's Rule-Making Power:
Under Section 23 of R.A. No. 9165, plea-bargaining is prohibited in all drug cases.
On June 15, 2016, he filed a Motion to Allow the Accused to Enter into a Plea The power to promulgate rules of pleading, practice and procedure is now Our
Bargaining Agreement, praying to withdraw his not guilty plea and be allowed to exclusive domain and no longer shared with the Executive and Legislative departments.
enter a plea of guilty to the lesser offense of violation of Section 12 of R.A. No. 9165
(for Possession of Drug Paraphernalia). It should be stressed that the power to promulgate rules of pleading, practice and
The trial court denied his Motion holding that Section 23 of R.A. No. 9165 expressly procedure was granted by our Constitutions to this Court to enhance its independence,
prohibits plea-bargaining in drugs cases. Estipona filed a Motion for for in the words of Justice Isagani Cruz "without independence and integrity, courts will
Reconsideration which was denied by the trial court. lose that popular trust so essential to the maintenance of their vigor as champions of
Arguing that Sec. 23 of RA No. 9165 is unconstitutional for it encroaches upon the justice." Hence, our Constitutions continuously vested this power to this Court for it
Supreme Court's rule-making power and therefore violative of the equal protection enhances its independence. Under the 1935 Constitution, the power of this Court to
clause, he filed a Petition before the SC to declare Sec. 23 unconstitutional. promulgate rules concerning pleading, practice and procedure was granted but it
The Solicitor General opposed the petition on the ground that (1) Congress was not appeared to be co-existent with legislative power for it was subject to the power of
impleaded, (2) the constitutionality of the law cannot be attached collaterally, (3) Congress to repeal, alter or supplement.
the proper action should have been a petition for relief before the RTC, and (4) the
petition fails to satisfy the requisites for judicial review. While the power to define, prescribe, and apportion the jurisdiction of the various courts
is, by constitutional design, vested unto Congress, the power to promulgate rules
ISSUES: concerning the protection and enforcement of constitutional rights, pleading, practice,
1. WHETHER SECTION 23 OF REPUBLIC ACT NO. 9165, WHICH PROHIBITS PLEA and procedure in all courts belongs exclusively to this Court.
BARGAINING IN ALL VIOLATIONS OF THE SAID LAW, IS UNCONSTITUTIONAL FOR
BEING VIOLATIVE OF THE CONSTITUTIONAL RIGHT TO EQUAL PROTECTION OF THE The power of Congress (to repeal, alter or supplement the rules concerning pleading,
LAW. practice and procedure, and the admission to the practice of law in the Philippines
under Sec. 13, Art, VIII of he 1935 Constitution), however, is not as absolute as it may
2. WHETHER SECTION 23 OF REPUBLIC ACT NO. 9165 IS UNCONSTITUTIONAL AS IT appear on its surface. In In re: Cunanan, Congress in the exercise of its power to amend
ENCROACHED UPON THE POWER OF THE SUPREME COURT TO PROMULGATE RULES rules of the Supreme Court regarding admission to the practice of law, enacted the Bar
OF PROCEDURE. Flunkers Act of 1953 which considered as a passing grade, the average of 70% in the
bar examinations after July 4, 1946 up to August 1951 and 71% in the 1952 bar
3. WHETHER THE REGIONAL TRIAL COURT, AS PRESIDED BY HON. FRANK E. LOBRIGO, examinations. This Court struck down the law as unconstitutional.
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT REFUSED TO DECLARE SECTION 23 OF REPUBLIC ACT NO. 9165 The rule making power of this [1987] Court was expanded. This Court for the first time
AS UNCONSTITUTIONAL. was given the power to promulgate rules concerning the protection and enforcement
of constitutional rights. The Court was also granted for the .first time the power to
HELD: disapprove rules of procedure of special courts and quasi-judicial bodies. But most
importantly, the 1987 Constitution took away the power of Congress to repeal, alter, or
On Matters of Technicality: supplement rules concerning pleading, practice and procedure. In fine, the power to
On matters of technicality, some points raised by the OSG maybe correct. Nonetheless, promulgate rules of pleading, practice and procedure is no longer shared by this Court
without much further ado, it must be underscored that it is within this Court's power to with Congress, more so with the Executive. x x x.
make exceptions to the rules of court. Under proper conditions, We may permit the full
and exhaustive ventilation of the parties' arguments and positions despite the supposed Thus, as it now stands, Congress has no authority to repeal, alter, or supplement rules
technical infirmities of a petition or its alleged procedural flaws. In discharging its solemn concerning pleading, practice, and procedure.x x x. The separation of powers among
duty as the final arbiter of constitutional issues, the Court shall not shirk from its obligation the three co-equal branches of our government has erected an impregnable wall that
to determine novel issues, or issues of first impression, with far-reaching implications. keeps the power to promulgate rules of pleading, practice and procedure within the
sole province of this Court. The other branches trespass upon this prerogative if they
Likewise, matters of procedure and technicalities normally take a backseat when issues enact laws or issue orders that effectively repeal, alter or modify any of the procedural
of substantial and transcendental importance are present. We have acknowledged rules promulgated by the Court. Viewed from this perspective, We have rejected
that the Philippines' problem on illegal drugs has reached "epidemic," "monstrous," and previous attempts on the part of the Congress, in the exercise of its legislative power, to
"harrowing" proportions, and that its disastrously harmful social, economic, and spiritual amend the Rules of Court (Rules).
effects have broken the lives, shattered the hopes, and destroyed the future of
thousands especially our young citizens. On Plea-Bargaining:
The Supreme Court's sole prerogative to issue, amend, or repeal procedural rules is
limited to the preservation of substantive rights, i.e., the former should not diminish,
increase or modify the latter. "Substantive law is that part of the law which creates,
defines and regulates rights, or which regulates the right and duties which give rise to a
cause of action; that part of the law which courts are established to administer; as
opposed to adjective or remedial law, which prescribes the method of enforcing rights
or obtain redress for their invasions." Fabian v. Hon. Desierto laid down the test for
determining whether a rule is substantive or procedural in nature.
In determining whether a rule prescribed by the Supreme Court, for the practice and
procedure of the lower courts, abridges, enlarges, or modifies any substantive right, the
test is whether the rule really regulates procedure, that is, the judicial process for
enforcing rights and duties recognized by substantive law and for justly administering
remedy and redress for a disregard or infraction of them. If the rule takes away a vested
right, it is not procedural. If the rule creates a right such as the right to appeal, it may be
classified as a substantive matter; but if it operates as a means of implementing an
existing right then the rule deals merely with procedure.
At this point, We shall not resolve the issue of whether Section 23 of R.A. No. 9165 is
contrary to the constitutional right to equal protection of the law in order not to
preempt any future discussion by the Court on the policy considerations behind Section
23 of R.A. No. 9165. Pending deliberation on whether or not to adopt the statutory
provision in toto or a qualified version thereof, We deem it proper to declare as invalid
the prohibition against plea bargaining on drug cases until and unless it is made part of
the rules of procedure through an administrative circular duly issued for the purpose.
1. DENNIS A. B. FUNA, PETITIONER, VS. THE CHAIRMAN, COA, REYNALDO A. VILLAR HELD:
G.R. No. 192791, April 24, 2012 a. Issue of Locus Standi:
FACTS: This case before us is of transcendental importance, since it obviously has “far-reaching
Funa challenges the constitutionality of the appointment of Reynaldo A. Villar as implications,” and there is a need to promulgate rules that will guide the bench, bar,
Chairman of the COA. and the public in future analogous cases. We, thus, assume a liberal stance and allow
Following the retirement of Carague on February 2, 2008 and during the fourth year petitioner to institute the instant petition.
of Villar as COA Commissioner, Villar was designated as Acting Chairman of COA
from February 4, 2008 to April 14, 2008. In David vs Macapagal Arroyo, the Court laid out the bare minimum norm before the
Subsequently, on April 18, 2008, Villar was nominated and appointed as Chairman so-called “non-traditional suitors” may be extended standing to sue, thusly:
of the COA. For taxpayers, there must be a claim of illegal disbursement of public funds or
Shortly thereafter, on June 11, 2008, the Commission on Appointments confirmed his that the tax measure is unconstitutional;
appointment. For voters, there must be a showing of obvious interest in the validity of the
o He was to serve as Chairman of COA, as expressly indicated in the election law in question
appointment papers, until the expiration of the original term of his office For concerned citizens, there must be a showing that the issues raised are of
as COA Commissioner or on February 2, 2011. transcendental importance which must be settled early; and
Challenged in this recourse, Villar, in an obvious bid to lend color of title to his hold For legislators, there must be a claim that the official action complained of
on the chairmanship, insists that his appointment as COA Chairman accorded him infringes their prerogatives as legislators.
a fresh term of 7 years which is yet to lapse.
He would argue, in fine, that his term of office, as such chairman, is up to February b. Substantive issue:
2, 2015, or 7 years reckoned from February 2, 2008 when he was appointed to that
position. Sec. 1 (2), Art. IX(D) of the Constitution provides that:
Before the Court could resolve this petition, Villar, via a letter dated February 22,
2011 addressed to President Benigno S. Aquino III, signified his intention to step
(2) The Chairman and Commissioners [on Audit] shall be appointed by the President
down from office upon the appointment of his replacement.
with the consent of the Commission on Appointments for a term of seven years without
True to his word, Villar vacated his position when President Benigno Simeon Aquino
reappointment. Of those first appointed, the Chairman shall hold office for seven years,
III named Ma. Gracia Pulido-Tan (Chairman Tan) COA Chairman.
one commissioner for five years, and the other commissioner for three years, without
This development has rendered this petition and the main issue tendered therein
reappointment. Appointment to any vacancy shall be only for the unexpired portion of
moot and academic.
the term of the predecessor. In no case shall any member be appointed or designated
Although deemed moot due to the intervening appointment of Chairman Tan and
in a temporary or acting capacity.
the resignation of Villar, We consider the instant case as falling within the
requirements for review of a moot and academic case, since it asserts at least four
exceptions to the mootness rule discussed in David vs Macapagal Arroyo namely: Petitioner now asseverates the view that Sec. 1(2), Art. IX(D) of the 1987 Constitution
o There is a grave violation of the Constitution proscribes reappointment of any kind within the commission, the point being that a
o The case involves a situation of exceptional character and is of second appointment, be it for the same position (commissioner to another position of
paramount public interest commissioner) or upgraded position (commissioner to chairperson) is a prohibited
o The constitutional issue raised requires the formulation of controlling reappointment and is a nullity ab initio.
principles to guide the bench, the bar and the public
o The case is capable of repetition yet evading review. The Court finds petitioner’s position bereft of merit. The flaw lies in regarding the word
The procedural aspect comes down to the question of whether or not the “reappointment” as, in context, embracing any and all species of appointment. The
following requisites for the exercise of judicial review of an executive act rule is that if a statute or constitutional provision is clear, plain and free from ambiguity, it
obtain in this petition, viz: must be given its literal meaning and applied without attempted interpretation.
There must be an actual case or justiciable controversy before
the court The first sentence is unequivocal enough. The COA Chairman shall be appointed by the
The question before it must be ripe for adjudication; President for a term of seven years, and if he has served the full term, then he can no
The person challenging the act must be a proper party; and longer be reappointed or extended another appointment. In the same vein, a
The issue of constitutionality must be raised at the earliest Commissioner who was appointed for a term of seven years who likewise served the full
opportunity and must be the very litis mota of the case term is barred from being reappointed. In short, once the Chairman or Commissioner
ISSUES: shall have served the full term of seven years, then he can no longer be reappointed to
a. WON the petitioner has Locus Standi to bring the case to court either the position of Chairman or Commissioner. The obvious intent of the framers is to
b. WON Villar’s appointment as COA Chairman, while sitting in that body and prevent the president from “dominating” the Commission by allowing him to appoint an
after having served for four (4) years of his seven (7) year term as COA additional or two more commissioners.
commissioner, is valid in light of the term limitations imposed under, and the
circumscribing concepts tucked in, Sec. 1 (2), Art. IX(D) of the Constitution
On the other hand, the provision, on its face, does not prohibit a promotional 3. Members of the Commission, e.g. COA, COMELEC or CSC, who were appointed for a
appointment from commissioner to chairman as long as the commissioner has not full term of seven years and who served the entire period, are barred from
served the full term of seven years, further qualified by the third sentence of Sec. 1(2), reappointment to any position in the Commission. Corollarily, the first appointees in the
Article IX (D) that “the appointment to any vacancy shall be only for the unexpired Commission under the Constitution are also covered by the prohibition against
portion of the term of the predecessor.” In addition, such promotional appointment to reappointment.
the position of Chairman must conform to the rotational plan or the staggering of terms
in the commission membership such that the aggregate of the service of the 4. A commissioner who resigns after serving in the Commission for less than seven years is
Commissioner in said position and the term to which he will be appointed to the position eligible for an appointment to the position of Chairman for the unexpired portion of the
of Chairman must not exceed seven years so as not to disrupt the rotational system in term of the departing chairman. Such appointment is not covered by the ban on
the commission prescribed by Sec. 1(2), Art. IX(D). reappointment, provided that the aggregate period of the length of service as
commissioner and the unexpired period of the term of the predecessor will not exceed
In conclusion, there is nothing in Sec. 1(2), Article IX(D) that explicitly precludes a seven (7) years and provided further that the vacancy in the position of Chairman
promotional appointment from Commissioner to Chairman, provided it is made under resulted from death, resignation, disability or removal by impeachment. The Court
the aforestated circumstances or conditions. clarifies that “reappointment” found in Sec. 1(2), Art. IX(D) means a movement to one
and the same office (Commissioner to Commissioner or Chairman to Chairman). On the
The Court is likewise unable to sustain Villar’s proposition that his promotional other hand, an appointment involving a movement to a different position or office
appointment as COA Chairman gave him a completely fresh 7- year term––from (Commissioner to Chairman) would constitute a new appointment and, hence, not, in
February 2008 to February 2015––given his four (4)-year tenure as COA commissioner the strict legal sense, a reappointment barred under the Constitution.
devalues all the past pronouncements made by this Court. While there had been
divergence of opinion as to the import of the word “reappointment,” there has been 5. Any member of the Commission cannot be appointed or designated in a temporary
unanimity on the dictum that in no case can one be a COA member, either as or acting capacity.
chairman or commissioner, or a mix of both positions, for an aggregate term of more
than 7 years. A contrary view would allow a circumvention of the aggregate 7-year
service limitation and would be constitutionally offensive as it would wreak havoc to the
spirit of the rotational system of succession.
In net effect, then President Macapagal-Arroyo could not have had, under any
circumstance, validly appointed Villar as COA Chairman, for a full 7- year appointment,
as the Constitution decrees, was not legally feasible in light of the 7-year aggregate
rule. Villar had already served 4 years of his 7-year term as COA Commissioner. A shorter
term, however, to comply with said rule would also be invalid as the corresponding
appointment would effectively breach the clear purpose of the Constitution of giving to
every appointee so appointed subsequent to the first set of commissioners, a fixed term
of office of 7 years. To recapitulate, a COA commissioner like respondent Villar who
serves for a period less than seven (7) years cannot be appointed as chairman when
such position became vacant as a result of the expiration of the 7-year term of the
predecessor (Carague). Such appointment to a full term is not valid and constitutional,
as the appointee will be allowed to serve more than seven (7) years under the
constitutional ban.
To sum up, the Court restates its ruling on Sec. 1(2), Art. IX(D) of the Constitution, viz:
1. The appointment of members of any of the three constitutional commissions, after the
expiration of the uneven terms of office of the first set of commissioners, shall always be
for a fixed term of seven (7) years; an appointment for a lesser period is void and
unconstitutional. The appointing authority cannot validly shorten the full term of seven
(7) years in case of the expiration of the term as this will result in the distortion of the
rotational system prescribed by the Constitution.
The GSIS, PHILHEALTH, ECC and HDMF are vested by their respective charters with
various powers and functions to carry out the purposes for which they were created.
While powers and functions associated with appointments, compensation and benefits
affect the career development, employment status, rights, privileges, and welfare of
government officials and employees, the GSIS, PHILHEALTH, ECC and HDMF are also
tasked to perform other corporate powers and functions that are not personnel-related.
All of these powers and functions, whether personnel-related or not, are carried out and
exercised by the respective Boards of the GSIS, PHILHEALTH, ECC and HDMF.
ence, when the CSC Chairman sits as a member of the governing Boards of the GSIS,
PHILHEALTH, ECC and HDMF, he may exercise these powers and functions, which are
not anymore derived from his position as CSC Chairman, such as imposing interest on
unpaid or unremitted contributions, issuing guidelines for the accreditation of health
care providers, or approving restructuring proposals in the payment of unpaid loan
amortizations.
The Court also notes that Duque’s designation as member of the governing Boards of
the GSIS, PHILHEALTH, ECC and HDMF entitles him to receive per diem, a form of
additional compensation that is disallowed by the concept of an ex officio position by
virtue of its clear contravention of the proscription set by Section 2, Article IX-A of the
1987 Constitution. This situation goes against the principle behind an ex officio position,
and must, therefore, be held unconstitutional.
Duque’s designation as member of the governing Boards of the GSIS, PHILHEALTH, ECC
and HDMF impairs the independence of the CSC. Under Section 17, Article VII of the
3. Civil Service Commission petitioner-appellee, vs. Nita P. Javier respondent- embarrassment or freedom from misgivings of betrayals of personal trust or
appellant confidential matters of state
TOPIC: Fiscal Independence G.R. No. 173264 Feb. 22, 2008 The position of Corporate Secretary of GSIS is clearly in close proximity and intimacy with
NATURE OF ACTION: Petition for review on certiorari of the decision and resolution of the the appointing power, it also calls for the highest degree of confidence between the
CA appointer and appointee. The Court therefore held that Nita reappointment valid and
that the CA did not err when it ruled the position to be primarily confidential in nature.
FACTS:
Respondent Nita Javier was first employed as a Private Secretary at the GSIS
on a confidential status, she was then promoted to Tabulating Equipment
Operator with a permanent status, this status stayed with her throughout her
career
Years later, she was appointed Corporate Secretary of the Board of Trustees of
the corporation
In 2001, shy of her 64th birthday, Nita opted for early retirement
Apr. 3, 2002 – GSIS President Winston F. Garcia, with the approval of the BOT
reappointed Nita as the Corporate Secretary classifying her position as
“confidential in nature and tenure of office is at the pleasure of the Board”
GSIS and Nita Javier insist that the position of Corporate Secretary is one of
primarily confidential nature
CA RULING:
Sept 29, 2005 – CA ruled that the position of Corporate Secretary is a position
of primarily confidential nature
Petitioner CSC filed for reconsideration but this was denied, hence present
petition
HELD:
According to Jurisprudence, there are two recognized instances when a position may
be considered primarily confidential;
(1) when the President has declared the position to be primarily confidential
(2) in absence of such declaration, when by the nature of the functions of the
office there exists “close intimacy” between the appointee and the
appointing power which insures freedom of intercourse without
4. Mary Lou Geturbos Torres v. Corazon Alma C. De Leon, G.R. No. 199440,
January 18, 2016, Third Division, Peralta.
ISSUE: Do the Civil Service Commission have appellate jurisdiction over the case?
HELD: Yes. The PNRC, although not a GOCC, is sui generis in character. The sui generis
character of PNRC requires the court to approach controversies involving the PNRC on
a case-to-case basis. Since the issue involves in the enforcement of labor laws and
penal statutes, PNRC can be treated as a GOCC. Thus, the CSC has jurisdiction. Having
jurisdiction over the PNRC, the CSC had authority to modify the penalty and order the
dismissal of Torres from the service. Moreover, the CSC has appellate jurisdiction on
administrative disciplinary cases involving the imposition of a penalty of suspension for
more than thirty days or fine in an amount exceeding thirty days’ salary.
ISSUE: Did the CSC lose its appellate jurisdiction when Torres voluntarily served the one-
month suspension?
HELD: No. The CSC did not lose its appellate jurisdiction. A decision becomes final even
before the lapse of the fifteen-day period to appeal when the defendant voluntarily
submits to the execution of the sentence. In the present case, however, it cannot be
said that she voluntarily served her penalty in view of the fact that she appealed
therefrom. Moreover, an appeal shall not stop the decision from being executory, and
in case the penalty is suspension or removal, the respondent shall be considered as
having been under preventive suspension during the pendency of the appeal, in the
event he wins the appeal.
HELD: Yes. An examination of the Notice of Appeal shows that the same was addressed
to the PNRC and copy furnished the CSC. On the other hand, an examination of the
Appeal Memorandum shows that the same was addressed to the CSC and copies
thereof were sent to both the PNRC and the CSC. It is thus clear that a copy of the
Notice of Appeal was furnished the CSC and the Appeal Memorandum was filed with it.
While the rules required that the notice of appeal including the appeal memorandum
shall be filed with the CSC, it is undeniable that furnishing a copy of the Notice of
Appeal with the CSC and filing with it the Appeal Memorandum substantially complied
with the rule. The important thing is that the Appeal Memorandum was clearly
addressed to the CSC.
5. CAREER EXECUTIVE SERVICE BOARD vs CIVIL SERVICE COMMISSION review under Rule 43, but We gave due course to the petition to accommodate the
G.R. No. 196890 | Date January 11, 2018 broader interest of justice.
DOCTRINE: It is well-settled that the extraordinary remedies of certiorari and prohibition In allowing the liberal application of procedural rules, We emphasized in the case of
are resorted to only where 1. a tribunal, a board or an officer exercising judicial or quasi- Obut v. Court of Appeals, et al. that placing the administration of justice in a
judicial functions has acted without or in excess of jurisdiction, or with grave abuse of straightjacket, i.e., following technical rules on procedure would result into a poor kind
discretion amounting to lack or excess of jurisdiction; and 2. there is no appeal or any of justice. Thus, a rigid application of the rules of procedure will not be entertained if it
plain, speedy, and adequate remedy in the ordinary course of law except in cases (a) will obstruct rather than serve the broader interests of justice in the light of the prevailing
when public welfare and the advancement of public policy dictate; (b) when the circumstances of the case under consideration.
broader interests of justice so require; (c) when the writs issued are null; and (d) when
the questioned order amounts to an oppressive exercise of judicial authority Considering the foregoing and the circumstances obtaining in this case, We allow the
application of liberality of the rules of procedure to give due course to the petition filed
FACTS: by petitioners as the broader interest of justice so requires.
● Blesilda Lodevico (Lodevico) was appointed by then President Gloria Macapagal-
Arroyo on May 14, 2008 as Director III, Recruitment and Career Development Main Ruling of the Case: Lodevico’s appointment is merely temporary so her services
Service, CESB. may b e terminated with or wihtout cause. Hence, her discharge was proper. CES
● Lodevico possesses a Career Service Executive Eligibility since November 29, 2001, Eligibility and her appointment as Director do not automatically mean that her
as evidenced by the Certificate of Eligibility issued by the CSC. appointment is permanent.
● June 30, 2010: Office of the President (OP) issued Memorandum Circular 1 (MC1)
which declared all non-career executive service positions vacant.
● July 16, 2010: OP promulgated the Implementing Guidelines of MC 1, which states
that all non-Career Executive Service Officers (non-CESO) in all agencies of the
Executive Branch shall remain in office and continue to perform their duties until
July 31, 2010 or until their resignations have been accepted and/or their
replacements have been appointed or designated, whichever comes first.
● Pursuant to MC 1, Abesamis of CESB issued a memorandum informing Lodevico
that she shall only remain in office until July 31, 2010.
● Lodevico filed her appeal on the memorandum issued by Abesamis before the
CSC.
● CSC ruled in favor of Leodevico and declared the memorandum null and void.
● Career Executive Service board filed an MR but it was denied. Hence, this petition
for certiorari under Rule 62.
● Respondents aver that the petitioners resorted to a wrong mode of appeal as Rule
43 is the proper remedy.
HELD:
It is well-settled that the extraordinary remedies of certiorari and prohibition are resorted
to only where (a) a tribunal, a board or an officer exercising judicial or quasi-judicial
functions has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (b) there is no appeal or any plain,
speedy, and adequate remedy in the ordinary course of law.
In the case at bar, it is clear that the second requirement is absent as petition for review
under Section 118 of Rule 43 ·is available to petitioners. However, there are exceptions
to the aforementioned rule, namely: (a) when public welfare and the advancement of
public policy dictate; (b) when the broader interests of justice so require; (c) when the
writs issued are null; and (d) when the questioned order amounts to an oppressive
exercise of judicial authority.
RULING: YES.
The additional grant of gratuity pay to petitioners amounted to additional
compensation prohibited by the Constitution. Clearly, the only exception for an
employee to receive additional, double and indirect compensation is where the law
allows him to receive extra compensation for services rendered in another position
which is an extension or is connected with his basic work. The prohibition against
additional or double compensation, except when specifically authorized by law, is
considered a “constitutional curb” on the spending power of the government.
Facts: The fact that a certain juridical entity is impressed with public interest does not, by that
circumstance alone, make the entity a public corporation, inasmuch as a corporation
The petitioner was incorporated as a juridical entity over one hundred years ago by may be private although its charter contains provisions of a public character,
virtue of Act No. 1285, enacted on January 19, 1905, by the Philippine Commission. incorporated solely for the public good. This class of corporations may be considered
The petitioner, at the time it was created, was composed of animal aficionados quasi-public corporations, which are private corporations that render public service,
and animal propagandists. supply public wants, or pursue other eleemosynary objectives. While purposely
The objects of the petitioner, as stated in Section 2 of its charter, shall be to enforce organized for the gain or benefit of its members, they are required by law to discharge
laws relating to cruelty inflicted upon animals or the protection of animals in the functions for the public benefit.
Philippine Islands, and generally, to do and perform all things which may tend in
any way to alleviate the suffering of animals and promote their welfare. The The true criterion, therefore, to determine whether a corporation is public or private is
petitioner was initially imbued under its charter with the power to apprehend found in the totality of the relation of the corporation to the State. If the corporation is
violators of animal welfare laws. created by the State as the latter’s own agency or instrumentality to help it in carrying
In addition, the petitioner was to share one-half (1/2) of the fines imposed and out its governmental functions, then that corporation is considered public; otherwise, it is
collected through its efforts for violations of the laws related thereto. private. Applying the above test, provinces, chartered cities, and barangays can best
Subsequently, however, the power to make arrests as well as the privilege to retain exemplify public corporations. They are created by the State as its own device and
a portion of the fines collected for violation of animal-related laws were recalled by agency for the accomplishment of parts of its own public works.
virtue of Commonwealth Act (C.A.) No. 148.
An audit team from COA wanted to conduct an audit survey but petitioner refused The test to determine whether a corporation is government owned or controlled, or
saying that it is a private corporation and not a public one. private in nature is simple. Is it created by its own charter for the exercise of a public
function, or by incorporation under the general corporation law? Those with special...
Issues: Whether or not petitioner is a private corporation that will not be subject to audit charters are government corporations subject to its provisions, and its employees are
by COA? under the jurisdiction of the Civil Service Commission, and are compulsory members of
the Government Service Insurance System... reading of petitioner's charter shows that it
Petitioner argues: first, it exercises no governmental functions because these have been is not subject to control or supervision by any agency of the State,... unlike government-
revoked by C.A. No. 148 and E.O. No. 63... owned and -controlled corporations. No government representative sits on the board
of trustees of the petitioner
second, nowhere in its charter is it indicated that it is a public corporation... if it were a
government body, there would... have been no need for the State to grant it tax
exemptions under Republic Act No. 1178, and the fact that it was so exempted The employees of the petitioner are registered and covered by the Social Security
strengthens its position that it is a private institution, the employees of the petitioner are System at the latter's initiative, and not through the Government Service Insurance
registered and covered by the Social Security System at the latter's initiative and not System, which should be the case if the employees are considered government
through the Government Service Insurance System... employees.
seventh, no government appointee or representative sits on the board of... trustees of This is another indication of petitioner's nature as a private entity
the petitioner;... respondents contend that since the petitioner is a "body politic" The respondents contend that the petitioner is a "body politic" because its primary
created by virtue of a special legislation and endowed with a governmental purpose, purpose is to secure the protection and welfare of animals which, in turn, redounds to
then, indubitably, the COA may audit the public good
Ruling: YES. The fact that a certain juridical entity is impressed with public interest does not, by that
A reading of petitioner’s charter shows that it is not subject to control or supervision by circumstance alone, make the entity a public corporation, inasmuch as a corporation
any agency of the State, unlike government-owned and -controlled corporations. No may be private although its charter contains provisions of... a public character,
government representative sits on the board of trustees of the petitioner. Like all private incorporated solely for the public good
corporations, the successors of its members are determined voluntarily and solely by the This class of corporations may be considered quasi-public corporations, which are
petitioner in accordance with its by-laws, and may exercise those powers generally private corporations that render public service, supply public wants, or pursue other
accorded to private corporations, such as the powers to hold property, to sue and be eleemosynary... objectives. While purposely organized for the gain or benefit of its
sued, to use a common seal, and so forth. It may adopt by-laws for its internal members, they are required by law to discharge functions for the public benefit.
operations: the petitioner shall be managed or operated by its officers “in accordance
with its by-laws in force.”
The employees of the petitioner are registered and covered by the Social Security
System at the latter’s initiative, and not through the Government Service Insurance
1. LA BUGAL-BLAAN TRIBAL ASSOCIATION INC. v RAMOS
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution
FACTS: authorizing the State to grant licenses, concessions, or leases for the exploration,
The constitutional provision allowing the President to enter into FTAA is a exception exploitation, development, or utilization of natural resources. By such omission, the
to the rule that participation in the nation’s natural resources is reserved exclusively utilization of inalienable lands of the public domain through license, concession or lease
to Filipinos. Provision must be construed strictly against their enjoyment by non- is no longer allowed under the 1987 Constitution.
Filipinos.
RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the Under the concession system, the concessionaire makes a direct equity investment for
effectivity of RA 7942, or on March 30, 1995, the President signed a Financial and the purpose of exploiting a particular natural resource within a given area. The
Technical Assistance Agreement (FTAA) with WMCP, a corporation organized concession amounts to complete control by the concessionaire over the country‘s
under Philippine laws, covering close to 100,000 hectares of land in South natural resource, for it is given exclusive and plenary rights to exploit a particular
Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. resource at the point of extraction.
On August 15, 1995, the Environment Secretary Victor Ramos issued DENR
Administrative Order 95-23, which was later repealed by DENR Administrative Order The 1987 Constitution, moreover, has deleted the phrase ―management or other forms
96-40, adopted on December 20, 1996. of assistance in the 1973 Charter. The present Constitution now allows only ―technical
Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the and financial assistance. The management and the operation of the mining activities by
government and WMCP be declared unconstitutional on ground that they allow foreign contractors, the primary feature of the service contracts was precisely the evil
fully foreign owned corporations like WMCP to exploit, explore and develop the drafters of the 1987 Constitution sought to avoid.
Philippine mineral resources in contravention of Article XII Section 2 paragraphs 2
and 4 of the Charter. The constitutional provision allowing the President to enter into FTAAs is an exception to
In January 2001, WMC – a publicly listed Australian mining and exploration the rule that participation in the nation‘s natural resources is reserved exclusively to
company – sold its whole stake in WMCP to Sagittarius Mines, 60% of which is Filipinos. Accordingly, such provision must be construed strictly against their enjoyment
owned by Filipinos while 40% of which is owned by Indophil Resources, an Australian by non-Filipinos. Therefore, RA 7942 is invalid insofar as the said act authorizes service
company. DENR approved the transfer and registration of the FTAA in Sagittarius‘ contracts. Although the statute employs the phrase ―financial and
name but Lepanto Consolidated assailed the same. The latter case is still pending technical agreements in accordance with the 1987 Constitution, its pertinent provisions
before the Court of Appeals. actually treat these agreements as service contracts that grant beneficial ownership to
EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to foreign contractors contrary to the fundamental law.
accept, consider and evaluate proposals from foreign owned corporations or
foreign investors for contracts or agreements involving wither technical or financial The underlying assumption in the provisions of the law is that the foreign contractor
assistance for large scale exploration, development and utilization of minerals manages the mineral resources just like the foreign contractor in a service contract. By
which upon appropriate recommendation of the (DENR) Secretary, the President allowing foreign contractors to manage or operate all the aspects of the mining
may execute with the foreign proponent. operation, RA 7942 has, in effect, conveyed beneficial ownership over the nation‘s
WMCP likewise contended that the annulment of the FTAA would violate a treaty mineral resources to these contractors, leaving the State with nothing but bare title
between the Philippines and Australia which provides for the protection of thereto.
Australian investments.
The same provisions, whether by design or inadvertence, permit a circumvention of the
constitutionally ordained 60-40% capitalizationrequirement for corporations or
ISSUES:
associations engaged in the exploitation, development and utilization of Philippine
1. Whether the Philippine Mining Act is unconstitutional for allowing fully foreign-
natural resources.
owned corporations to exploit the Philippine mineral resources.
2. Whether or not the FTAA between the government and WMCP is a ―service
When parts of a statute are so mutually dependent and connected as conditions,
contract that permits fully foreign owned companies to exploit the Philippine
considerations, inducements or compensations for each other as to warrant a belief
mineral resources.
that the legislature intended them as a whole, then if some parts are unconstitutional, all
provisions that are thus dependent, conditional or connected, must fail with them.
HELD: Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited
First Issue: RA 7942 is Unconstitutional only to merely technical or financial assistance to the State for large scale exploration,
development and utilization of minerals, petroleum and other mineral oils.
RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign
owned corporations to exploit the Philippine natural resources. Second Issue: RP Government-WMCP FTAA is a Service Contract
Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrinewhich states
that ―All lands of the public domain, waters, minerals, coal, petroleum, and other The FTAA between he WMCP and the Philippine government is likewise unconstitutional
minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, since the agreement itself is a service contract.
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the
State. The same section also states that, ―the exploration and development and Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive
utilization of natural resources shall be under the full control and supervision of the State. right to explore, exploit, utilize and dispose of all minerals and by-products that may be
produced from the contract area. Section 1.2 of the same agreement provides that
EMCP shall provide all financing, technology, management, and personnel necessary
for the Mining Operations.
These contractual stipulations and related provisions in the FTAA taken together, grant
WMCP beneficial ownership over natural resources that properly belong to the State
and are intended for the benefit of its citizens. These stipulations are abhorrent to the
1987 Constitution. They are precisely the vices that the fundamental law seeks to avoid,
the evils that it aims to suppress. Consequently, the contract from which they spring must
be struck down.
2. GAMBOA v. TEVES (2011) disregards who owns the all-important voting stock, which necessarily equates to control
of the public utility.
FACTS:
This is a petition to nullify the sale of shares of stock of Philippine Holders of PLDT preferred shares are explicitly denied of the right to vote in the election
Telecommunications Investment Corporation (PTIC) by the government of the of directors. PLDT’s Articles of Incorporation expressly state that “the holders of Serial
Republic of the Philippines, acting through the Inter-Agency Privatization Council Preferred Stock shall not be entitled to vote at any meeting of the stockholders for the
(IPC), to Metro Pacific Assets Holdings, Inc. election of directors or for any other purpose or otherwise participate in any action
(MPAH), an affiliate of First Pacific Company Limited (First Pacific), a Hong Kong- taken by the corporation or its stockholders, or to receive notice of any meeting of
based investment management and holding company and a shareholder of the stockholders.” On the other hand, holders of common shares are granted the exclusive
Philippine Long Distance Telephone Company (PLDT). right to vote in the election of directors. PLDT’s Articles of Incorporation state that “each
The petitioner questioned the sale on the ground that it also involved an indirect holder of Common Capital Stock shall have one vote in respect of each share of such
sale of 12 million shares (or about 6.3 percent of the outstanding common shares) stock held by him on all matters voted upon by the stockholders, and the holders of
of PLDT owned by PTIC to First Pacific. Common Capital Stock shall have the exclusive right to vote for the election of directors
With the this sale, First Pacific’s common shareholdings in PLDT increased from 30.7 and for all other purposes.”
percent to 37 percent, thereby increasing the total common shareholdings of
foreigners in PLDT to about 81.47%. This, according to the petitioner, violates Section It must be stressed, and respondents do not dispute, that foreigners hold a majority of
11, Article XII of the 1987 Philippine Constitution which limits foreign ownership of the the common shares of PLDT. In fact, based on PLDT’s 2010 General Information Sheet
capital of a public utility to not more than 40%, thus: (GIS), which is a document required to be submitted annually to the Securities and
o Section 11. No franchise, certificate, or any other form of authorization for the Exchange Commission, foreigners hold 120,046,690 common shares of PLDT whereas
operation of a public utility shall be granted except to citizens of the Filipinos hold only 66,750,622 common shares. In other words, foreigners hold 64.27% of
Philippines or to corporations or associations organized under the laws of the the total number of PLDT’s common shares, while Filipinos hold only 35.73%. Since
Philippines, at least sixty per centum of whose capital is owned by such holding a majority of the common shares equates to control, it is clear that foreigners
citizens; nor shall such franchise, certificate, or authorization be exclusive in exercise control over PLDT. Such amount of control unmistakably exceeds the allowable
character or for a longer period than fifty years. 40 percent limit on foreign ownership of public utilities expressly mandated in Section 11,
o Neither shall any such franchise or right be granted except under the condition Article XII of the Constitution.
that it shall be subject to amendment, alteration, or repeal by the Congress
when the common good so requires. The State shall encourage equity As shown in PLDT’s 2010 GIS, as submitted to the SEC, the par value of PLDT common
participation in public utilities by the general public. The participation of shares is P5.00 per share, whereas the par value of preferred shares is P10.00 per share.
foreign investors in the governing body of any public utility enterprise shall be In other words, preferred shares have twice the par value of common shares but cannot
limited to their proportionate share in its capital, and all the executive and elect directors and have only 1/70 of the dividends of common shares. Moreover,
managing officers of such corporation or association must be citizens of the 99.44% of the preferred shares are owned by Filipinos while foreigners own only a
Philippines. (Emphasis supplied) minuscule 0.56% of the preferred shares. Worse, preferred shares constitute 77.85% of the
authorized capital stock of PLDT while common shares constitute only 22.15%. This
ISSUE: Does the term “capital” in Section 11, Article XII of the Constitution refer to the undeniably shows that beneficial interest in PLDT is not with the non-voting preferred
total common shares only, or to the total outstanding capital stock (combined total of shares but with the common shares, blatantly violating the constitutional requirement of
common and non-voting preferred shares) of PLDT, a public utility? 60 percent Filipino control and Filipino beneficial ownership in a public utility.
RULING: [The Court partly granted the petition and held that the term “capital” in In short, Filipinos hold less than 60 percent of the voting stock, and earn less than 60
Section 11, Article XII of the Constitution refers only to shares of stock entitled to vote in percent of the dividends, of PLDT. This directly contravenes the express command in
the election of directors of a public utility, i.e., to the total common shares in PLDT.] Section 11, Article XII of the Constitution that “[n]o franchise, certificate, or any other
form of authorization for the operation of a public utility shall be granted except to x x x
Considering that common shares have voting rights which translate to control, as corporations x x x organized under the laws of the Philippines, at least sixty per centum
opposed to preferred shares which usually have no voting rights, the term “capital” in of whose capital is owned by such citizens x x x.”
Section 11, Article XII of the Constitution refers only to common shares. However, if the
preferred shares also have the right to vote in the election of directors, then the term To repeat, (1) foreigners own 64.27% of the common shares of PLDT, which class of
“capital” shall include such preferred shares because the right to participate in the shares exercises the sole right to vote in the election of directors, and thus exercise
control or management of the corporation is exercised through the right to vote in the control over PLDT; (2) Filipinos own only 35.73% of PLDT’s common shares, constituting a
election of directors. In short, the term “capital” in Section 11, Article XII of the minority of the voting stock, and thus do not exercise control over PLDT; (3) preferred
Constitution refers only to shares of stock that can vote in the election of directors. shares, 99.44% owned by Filipinos, have no voting rights; (4) preferred shares earn only
1/70 of the dividends that common shares earn; (5) preferred shares have twice the par
To construe broadly the term “capital” as the total outstanding capital stock, including value of common shares; and (6) preferred shares constitute 77.85% of the authorized
both common and non-voting preferred shares, grossly contravenes the intent and capital stock of PLDT and common shares only 22.15%. This kind of ownership and
letter of the Constitution that the “State shall develop a self-reliant and independent control of a public utility is a mockery of the Constitution.
national economy effectively controlled by Filipinos.” A broad definition unjustifiably
[Thus, the Respondent Chairperson of the Securities and Exchange Commission (1) Authority to define and interpret the meaning of “capital” in Sec. 11, Art. XII
was DIRECTED by the Court to apply the foregoing definition of the term “capital” in belongs to Congress as part of it’s policy making powers, as the power to authorize and
determining the extent of allowable foreign ownership in respondent Philippine Long control a public utility is a prerogative of Congress. Sec. 11, Art. XII is no self-executing
Distance Telephone Company, and if there is a violation of Section 11, Article XII of the and requires Congressional action to clarify it’s meaning. FIA is restricted to certain
Constitution, to impose the appropriate sanctions under the law.] areas of investment and should not be construed to clarify the meaning of “capital”
under the constitutional provision as they are rules which apply to future investors.
VELASCO (Separate Dissenting Opinion)
(2) “Capital” refers to the entirety of the corporation’s outstanding voting stock as,
The present petition partakes of a collateral attack on PLDT’s franchise as a public utility first, the 40 percent limit (if held only to preferred shareholders) would render
with petitioner pleading as ground PLDT’s alleged breach of the 40% limit on foreign meaningless the fourth sentence which limits foreign participation in the governing body
equity. Such is not allowed. As discussed in PLDT v. National Telecommunications of public utilities, and, second, amicus curiae Dr. Villegas, Chairman of the Committee
Commission, a franchise is a property right that can only be questioned in a direct of National Economy, said that the term “capital” did not distinguish among the classes
proceeding. of shares. In both economic and business terms, capital always meant the entire shares
of stock. Further, Philippine policy on foreign ownership already discourages foreign
(1) The intent of the framers of the Constitution was not to limit the application of the investments and to impose additional restrictions would aggravate economic growth.
word “capital” to voting or common shares alone. Constitutional Commission records
show that by using the word “capital,” the framers of the Constitution adopted the (3) Sec. 11, Article XII already provides 3 limitations on foreign participation in
definition or interpretation that includes all types of shares, whether voting or non-voting. public utilities and the Court need not add more by restricting the definition of capital.
(2) Cassus Omissus Pro Omisso Habendus Est––a person, object or thing omitted must Section 10, Article XII of the Philippine Constitution provides that the Congress must
have been omitted intentionally. In this case, the intention of the framers of the reserve certain areas of investment to Filipinos or to corporations or associations of
Constitution is very clear––to omit the phrases “voting stock” and “controlling interest.” which at least 60 percent of capital is owned by Filipinos. Section 3 of the Foreign
Investments Act of 1991 defines a “Philippine national” as a citizen of the Philippines or a
(3) The FIA should also be read in harmony with the Constitution. Since the Constitution domestic partnership or association wholly owned by citizens of the Philippines; or a
only provides for a single requirement for the operation of a public utility under Sec. 11, corporation organized under the laws of the Philippines of which at least 60 percent of
i.e., 60% capital must be Filipino-owned, a mere statute cannot add another the capital stock outstanding and entitled to vote is owned and held by citizens of the
requirement. Otherwise, such statute may be considered unconstitutional. Accordingly, Philippines, and where a corporation and its non-Filipino stockholders own stocks in a
the phrase “entitled to vote” should not be interpreted to be limited to common shares SEC registered enterprise, at least 60 percent of the capital stocks outstanding and
alone or those shares entitled to vote in the election of members of the Board of entitled to vote of both corporations must be owned and held by citizens of the
Directors. Philippines and at least 60 percent of the members of the Board of Directors of both
corporations must be citizens of the Philippines.
(4) Further, the FIA did not say “entitled to vote in the management affairs of the
corporation” or “entitled to vote in the election of the members of the Board of In support of this State policy, the Supreme Court, in the case of Heirs of Gamboa v.
Directors.” Verily, where the law does not distinguish, neither should We. Hence, the Teves, G.R. No.176579 dated 28 June 2011 and in a resolution dated Oct. 9, 2012,
proper interpretation of the phrase “entitled to vote” under the FIA should be that it interpreted the term “capital” for the first time. In this case, the Supreme Court ruled that
applies to all shares, whether classified as voting or non-voting shares. “capital” under the 1987 Constitution and the Foreign Investments Act of 1991 refers to
shares with voting rights, as well as full beneficial ownership, and not to the total
(5) Additionally, control is another inherent right of ownership. The circumstances outstanding capital stock. Simply put, the 60-40 ownership requirement in favor of the
enumerated in Sec. 6 of the Corporation Code clearly evince this. It gives voting rights Filipino citizens must apply separately to each class of shares, whether common,
to the stocks deemed as non-voting as to fundamental and major corporate changes. preferred non-voting, preferred voting or any other class of shares.
Thus, the issue should not only dwell on the daily management affairs of the corporation
but also on the equally important fundamental changes that may need to be voted on. In arriving at this judgment, the Supreme Court reasoned that the foreign ownership
limitation also applies to non-voting preferred stocks, that, although denied the voting
(6) The SEC rules, opinions and jurisprudence use the “control test”, which requires that rights in the election of directors, are nevertheless entitled to vote on certain
the nationality of a corporation is determined by the total outstanding capital stock fundamental corporate acts like amendment of the articles of incorporation; adoption
irrespective of the number of shares, and “capital” denotes the total shares subscribed and amendment of by-laws; sale, lease, exchange, mortgage, pledge or other
and paid irrespective of their nomenclature. disposition of all or substantially all of the corporate property; incurring, creating or
increasing bonded indebtedness; increase or decrease of capital stock; merger or
(7) Lastly, the last sentence of Sec. 11, Art. XII limits the participation of the foreign consolidation of the corporation with another corporation or other corporations;
investors in the governing body to their proportionate share in the capital of the investment of corporate funds in another corporation or business; and dissolution of the
corporation. corporation.
ABAD (Dissenting Opinion) Pursuant to the Heirs of Gamboa case, the Securities and Exchange Commission issued
on May 20, 2013 Memorandum Circular No. 8, which sets the guidelines for the
compliance of businesses engaged in nationalized and partly nationalized activities. In GAMBOA v. TEVES (2012)
gist, the said memorandum circular provides that the required percentage of Filipino
ownership shall be applied to both the total number of outstanding shares of stock Facts:
entitled to vote in the election of directors, and the total number of outstanding shares The issue started when petitioner Gamboa questioned the indirect sale of shares
of stock, whether or not entitled to vote in the election of directors. Consequently, all involving almost 12 million shares of the Philippine Long Distance Telephone
existing covered corporations which are not compliant with the guidelines are given a Company (PLDT) owned by PTIC to First Pacific.
period of one year from the effectivity of the issuance within which to comply with the Thus, First Pacific’s common shareholdings in PLDT increased from 30.7 percent to 37
said ownership requirement. percent, thereby increasing the total common shareholdings of foreigners in PLDT
to about 81.47%.
Certainly, the Securities and Exchange Commission issuance upholds the protection of The petitioner contends that it violates the Constitutional provision on filipinazation
vital industries and certain investment areas from foreign control. It is effectively backing of public utility, stated in Section 11, Article XII of the 1987 Philippine Constitution,
Article XII of the Constitution, the Foreign Investment Act definition of what constitutes a which limits foreign ownership of the capital of a public utility to not more than 40%.
“Philippine national”, and the ruling of the Supreme Court in Heirs of Gamboa case to Then, in 2011, the court ruled the case in favor of the petitioner, hence this new
reserve certain areas of investment to Filipinos. It adheres to the constitutional directive case, resolving the motion for reconsideration for the 2011 decision filed by the
without compromising the actual and potential foreign investments. While the Securities respondents.
and Exchange Commission issuance is providing a guiding principle in support of the
conservative approach of the government with regard to development of the national Issue: Whether or not the Court made an erroneous interpretation of the term ‘capital’
economy, it is likewise recognizing the important role of the foreign investors in the effort in its 2011 decision?
to improve the economic standing of the Philippines.
Held/Reason: The Court said that the Constitution is clear in expressing its State policy of
[Constitutional Law, Corporation] developing an economy ‘effectively controlled’ by Filipinos. Asserting the ideals that our
Constitution’s Preamble want to achieve, that is – to conserve and develop our
The term “capital” does not refer to both preferred and common stocks treated as the patrimony, hence, the State should fortify a Filipino-controlled economy.
same class of shares regardless of differences in voting rights and privileges.
In the 2011 decision, the Court finds no wrong in the construction of the term ‘capital’
Consistent with the constitutional mandate that the “State shall develop a self-reliant which refers to the ‘shares with voting rights, as well as with full beneficial ownership’
and independent national economy effectively controlled by Filipinos,” the term (Art. 12, sec. 10) which implies that the right to vote in the election of directors, coupled
"capital" means the outstanding capital stock entitled to vote (voting stock), coupled with benefits, is tantamount to an effective control. Therefore, the Court’s interpretation
with beneficial ownership, both of which results to "effective control." of the term ‘capital’ was not erroneous. Thus, the motion for reconsideration is denied.
"Mere legal title is insufficient to meet the 60 percent Filipino owned “capital” required in
the Constitution for certain industries. Full beneficial ownership of 60 percent of the
outstanding capital stock, coupled with 60 percent of the voting rights, is required." In
this case, such twin requirements must apply uniformly and across the board to all
classes of shares comprising the capital. Thus, "the 60-40 ownership requirement in favor
of Filipino citizens must apply separately to each class of shares, whether common,
preferred non-voting, preferred voting or any other class of shares." This guarantees that
the “controlling interest” in public utilities always lies in the hands of Filipino citizens.
3. JOSE M. ROY III, Petitioner, v. CHAIRPERSON TERESITA HERBOSA, THE SECURITIES real, which means a present substantial interest, as distinguished from a mere
AND EXCHANGE COMMISSION, AND PHILILIPPINE LONG DISTANCE TELEPHONE expectancy or a future, contingent, subordinate, or consequential interest.
COMPANY, Respondents. G.R. No. 207246, November 22, 2016
As to injury, the party must show that (1) he will personally suffer some actual or
FACTS: threatened injury because of the allegedly illegal conduct of the government; (2) the
This is a case of special civil action for certiorari under Rule 65 of the Rules of Court injury is fairly traceable to the challenged action; and (3) the injury is likely to be
seeking to annul Memorandum Circular No. 8, Series of 2013 (SEC-MC No. 8)issued redressed by a favorable action.
by the SEC for allegedly being in violation of the Court's Decision ("Gamboa
Decision") and Resolution ("Gamboa Resolution") in Gamboa v. Finance Secretary To establish his standing, petitioner Roy merely claimed that he has standing to question
Teves, G.R. No. 176579 which jurisprudentially established the proper interpretation SEC-MC No. 8 "as a concerned citizen, an officer of the Court and as a taxpayer" as well
of Section 11, Article XII of the Constitution. as "the senior law partner of his own law firm[, which] x x x is a subscriber of PLDT."
On June 28, 2011, the Court issued the Gamboa Decision, the dispositive portion of
which reads: The Court has previously emphasized that the locus standi requisite is not met by the
o WHEREFORE, we PARTLY GRANT the petition and rule that the term "capital" in expedient invocation of one's citizenship or membership in the bar who has an interest
Section 11, Article XII of the 1987 Constitution refers only to shares of stock in ensuring that laws and orders of the Philippine government are legally and validly
entitled to vote in the election of directors, and thus in the present case only to issued as these supposed interests are too general, which are shared by other groups
common shares, and not to the total outstanding capital stock (common and and by the whole citizenry. Per their allegations, the personal interest invoked by
non-voting preferred shares). Respondent Chairperson of the Securities and petitioners as citizens and members of the bar in the validity or invalidity of SEC-MC No.
Exchange Commission is DIRECTED to apply this definition of the term "capital" 8 is at best equivocal, and totally insufficient.
in determining the extent of allowable foreign ownership in respondent
Philippine Long Distance Telephone Company, and if there is a violation of Petitioners' status as taxpayers is also of no moment. As often reiterated by the Court, a
Section 11, Article XII of the Constitution, to impose the appropriate sanctions taxpayer's suit is allowed only when the petitioner has demonstrated the direct
under the law. correlation of the act complained of and the disbursement of public funds in
On May 20, 2013, the SEC, through Chairperson Herbosa, issued SEC-MC No. 8 contravention of law or the Constitution, or has shown that the case involves the
entitled "Guidelines on Compliance with the Filipino-Foreign Ownership exercise of the spending or taxing power of Congress. SEC-MC No. 8 does not involve
Requirements Prescribed in the Constitution and/or Existing Laws by Corporations an additional expenditure of public funds and the taxing or spending power of
Engaged in Nationalized and Partly Nationalized Activities." Section 2 of SEC-MC Congress.
No. 8 provides:
o Section 2. All covered corporations shall, at all times, observe the constitutional The allegation that petitioner Roy's law firm is a "subscriber of PLDT" is ambiguous. It is
or statutory ownership requirement. For purposes of determining compliance unclear whether his law firm is a "subscriber" of PLDT's shares of stock or of its various
therewith, the required percentage of Filipino ownership shall be applied to telecommunication services. Petitioner Roy has not identified the specific direct and
BOTH (a) the total number of outstanding shares of stock entitled to vote in the substantial injury he or his law firm stands to suffer as "subscriber of PLDT" as a result of the
election of directors; AND (b) the total number of outstanding shares of stock, issuance of SEC-MC No. 8 and its enforcement. Moreover, in the most practical sense, a
whether or not entitled to vote in the election of directors. PLDT subscriber loses or gains nothing in the event that SEC-MC No. 8 is either sustained
On June 10, 2013, Roy, as a lawyer and taxpayer, filed the Petition, assailing the or struck down by [the Court].
validity of SEC-MC No. 8 for not conforming to the letter and spirit of the Gamboa
Decision and Resolution and for having been issued by the SEC with grave abuse of Jose M. Roy III Vs Chairperson Teresita Herbosa, The Securities and Exchange
discretion. Commission and Philippine Long Distance Company (2017)
Petitioner Roy also questions the ruling of the SEC that respondent Philippine Long
Distance Telephone Company ("PLDT") is compliant with the constitutional rule on Facts:
foreign ownership. Before the Court is the Motion for Reconsideration dated January 19, 2017 (the
He prays that the Court declare SEC-MC No. 8 unconstitutional and direct the SEC Motion) filed by petitioner Jose M. Roy III (movant) seeking the reversal and setting
to issue new guidelines regarding the determination of compliance with Section 11, aside of the Decision dated November 22, 2016 (the Decision) which denied the
Article XII of the Constitution in accordance with Gamboa. movant's petition, and declared that the Securities and Exchange Commission
(SEC) did not commit grave abuse of discretion in issuing Memorandum Circular
ISSUE: Whether the petitioner has standing to question the validity of the subject act or No. 8, Series of 2013 (SEC-MC No. 8) as the same was in compliance with, and in
issuance, i.e., he has a personal and substantial interest in the case that he has fealty to, the decision of the Court in Gamboa v. Finance Secretary Teves
sustained, or will sustain, direct injury as a result of the enforcement of the act or (Gamboa Decision) and the resolution denying the Motion for Reconsideration
issuance therein (Gamboa Resolution).
The Motion presents no compelling and new arguments to justify the
RULING: reconsideration of the Decision.
Petitioners have no legal standing to question the constitutionality of SEC-MC No. 8. The The Decision has already exhaustively discussed and directly passed upon these
personal and substantial interest that enables a party to have legal standing is one that grounds. Movant's petition was dismissed based on both procedural and
is both material, an interest in issue and to be affected by the government action, as substantive grounds.
distinguished from mere interest in the issue involved, or a mere incidental interest, and
Issue: Whether SEC committed grave abuse of discretion amounting to lack or excess of
jurisdiction when it issued SEC-MC No. 8.
Held:
SEC did not commit grave abuse of discretion amounting to lack or excess of jurisdiction
when it issued SEC-MC No. 8. The Court finds SEC-MC No. 8 to have been issued in fealty
to the Gamboa Decision and Resolution.
Pursuant to the Court's constitutional duty to exercise judicial review, the Court has
conclusively found no grave abuse of discretion on the part of SEC in issuing SEC-MC
No. 8.
The Decision has painstakingly explained why it considered as obiter dictum that
pronouncement in the Gamboa Resolution that the constitutional requirement on
Filipino ownership should "apply uniformly and across the board to all classes of shares,
regardless of nomenclature and category, comprising the capital of a corporation." The
Court stated that:
The fallo or decretal/dispositive portions of both the Gamboa Decision and
Resolution are definite, clear and unequivocal. While there is a passage in the
body of the Gamboa Resolution that might have appeared contrary to the
fallo of the Gamboa Decision, the definiteness and clarity of the fallo of the
Gamboa Decision must control over the obiter dictum in the Gamboa
Resolution regarding the application of the 60-40 Filipino-foreign ownership
requirement to "each class of shares, regardless of differences in voting rights,
privileges and restrictions."
To the Court's mind and, as exhaustively demonstrated in the Decision, the dispositive
portion of the Gamboa Decision was in no way modified by the Gamboa Resolution.
The heart of the controversy is the interpretation of Section 11, Article XII of the
Constitution, which provides: "No franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted except to citizens of
the Philippines or to corporations or associations organized under the laws of the
Philippines at least sixty per centum of whose capital is owned by such citizens."
The Gamboa Decision already held, in no uncertain terms, that what the Constitution
requires is full and legal beneficial ownership of 60 percent of the outstanding capital
stock, coupled with 60 percent of the voting rights must rest in the hands of Filipino
nationals. And, precisely that is what SEC-MC No. 8 provides; For purposes of
determining compliance with the constitutional or statutory ownership, the required
percentage of Filipino ownership shall be applied to both the total number of
outstanding shares of stock entitled to vote in the election of directors; and (b) the total
number of outstanding shares of stock, whether or not entitled to vote.
In conclusion, the basic issues raised in the Motion having been duly considered and
passed upon by the Court in the Decision and no substantial argument having been
adduced to warrant the reconsideration sought, the Court resolves to deny the Motion
with finality.
4. IDEALS INC. v. PSALM In addition, the Court highlighted the difference between duty to disclose information
and duty to access information on matters of public concern. The duty to disclose
Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc. information is mandatory under the Constitution, but it only covers transactions involving
(IDEAL, Inc.), et al., petitioners public interest. In the absence of an enabling law for Section 28, Art. II (e.g., Freedom of
Power Sector Assets and Liabilities Management Corp., et al. (PSALM), respondents Information Act, which has been languishing in the congress for more than 20 years),
postings in public bulletin boards and government websites will suffice.
FACTS:
The duty to access information, on the other hand, requires a demand or request for
PSALM is a GOCC mandated by RA 9136 (Electric Power Industry Reform Act of one to gain access to documents and paper of a particular agency. It has a broader
2001 or the EPIRA Law) to manage the orderly sale, disposition, and privatization of scope of information, covering not only transactions of public interest, but also matters
the assets of the National Power Corp. (NPC) over a 25-year period. contained in official communications and public documents of any government
In the discharge of its said duties, PSALM held a public bidding for the sale of agency.
AHEPP, a 246-MW hydroelectric power plant. After evaluating the submitted bids,
PSALM awarded the sale to K-Water, a Korean company. Because of this ruling, PSALM was compelled by the Court to provide all the documents
But even before K-Water was given the Notice of Award, IDEALS had been sending the petitioners were requesting for.
letters to PSALM to request for copies of documents pertaining to the sale.
The first letter requested for copies of the Terms of Reference and proposed bids 3. Yes.
submitted by the bidders. Foreign ownership of a hydropower facility is not prohibited under existing laws. The
There was no response because at the time no bids have been submitted yet. construction, rehabilitation, and development of hydropower plants are among the
Besides, updates about the ongoing bidding were posted on the PSALM website infrastructure projects which even wholly-owned foreign corporations are allowed to
anyway. undertake under RA 7718 or the Amended Build-Operate-Transfer Law.
The second letter requested for information regarding the winning bidder, such as
company profile, contact person, office address, and Philippine registration.
Despite press releases announcing K-Water as the winning bidder, PSALM failed to
sufficiently provide the petitioners with the information they were asking for, almost
as if PSALM officials were trying to hide something.
ISSUES:
1. Whether or not petitioners have locus standi to file this petition before the Court.
2. Whether or not PSALM violated the Constitution in withholding documents of public
interest.
3. Whether or not a foreign company can own a hydroelectric power facility.
HELD:
1. Yes.
As citizens and taxpayers, petitioners do have legal standing to file this petition before
the Court.
2. Yes.
In failing to provide the petitioners with the information they were asking for on their
second letter, PSALM violated Section 7, Article III of the 1987 Constitution,which
provides for the right of the people to information on matters of public concern. The
Court ruled that people's right to information is intertwined wth the government's
constitutional duty of full public disclosure of all transactions involving public interest,
pursuant to Section 28, Art. II of the 1987 Constitution, which states a policy of full public
disclosure. Both of these provisions are also essential to hold public officials accountable
for their actions. An informed citizenry, said the Court, is essential to the existence and
proper functioning of any democracy.
The Court made it clear that the public is entitled to information even on on-going
negotiations before a final contract, subject to the following exceptions: privileged
information, military and diplomatic secrets, and similar matters relating to national
security and public order.
5. NARRA NICKEL MINING v. REDMONT CONSOLIDATED (Apr 21 2014) Narra Nickel Mining vs Redmont (January 28, 2015)
Facts: Facts:
Redmont is a domestic corporation interested in the mining and exploration of Narra and its co-petitioner corporations – Tesoro and MacArthur, filed a motion
some areas in Palawan. before the SC to reconsider its April 21, 2014 Decision which upheld the denial of
Upon learning that those areas were covered by MPSA applications of other three their MPSA applications.
(allegedly Filipino) corporations – Narra, Tesoro, and MacArthur, it filed a petition The SC affirmed the CA ruling that there is a doubt to their nationality, and that in
before the Panel of Arbitrators of DENR seeking to deny their permits on the ground applying the Grandfather Rule, the finding is that MBMI, a 100% Canadian-owned
that these corporations are in reality foreign-owned. corporation, effectively owns 60% of the common stocks of petitioners by owning
MBMI, a 100% Canadian corporation, owns 40% of the shares of PLMC (which owns equity interests of the petitioners’ other majority corporate shareholders.
5,997 shares of Narra), 40% of the shares of MMC (which owns 5,997 shares of Narra, Tesoro and MacArthur argued that the application of the Grandfather Rule
McArthur) and 40% of the shares of SLMC (which, in turn, owns 5,997 shares of to determine their nationality is erroneous and allegedly without basis in the
Tesoro). Constitution, the FIA, the Philippine Mining Act, and the Rules issued by the SEC.
Aside from the MPSA, the three corporations also applied for FTAA with the Office These laws and rules supposedly espouse the application of the Control Test in
of the President. verifying the Philippine nationality of corporate entities for purposes of determining
In their answer, they countered that (1) the liberal Control Test must be used in compliance with Sec. 2, Art. XII of the Constitution that only corporations or
determining the nationality of a corporation as based on Sec 3 of the Foreign associations at least 60% of whose capital is owned by such Filipino citizens may
Investment Act – which as they claimed admits of corporate layering schemes, enjoy certain rights and privileges, like the exploration and development of natural
and that (2) the nationality question is no longer material because of their resources.
subsequent application for FTAA.
Issue: W/N the application by the SC of the grandfather resulted to the abandonment
Issue 1: W/N the Grandfather Rule must be applied in this case of the ‘control test’
Yes. It is the intention of the framers of the Constitution to apply the Grandfather Rule in Held: No.
cases where corporate layering is present.
The ‘control test’ can be applied jointly with the Grandfather Rule to determine the
First, as a rule in statutory construction, when there is conflict between the Constitution observance of foreign ownership restriction in nationalized economic activities. The
and a statute, the Constitution will prevail. In this instance, specifically pertaining to the Control Test and the Grandfather Rule are not incompatible ownership-determinant
provisions under Art. XII of the Constitution on National Economy and Patrimony, Sec. 3 methods that can only be applied alternative to each other. Rather, these methods
of the FIA will have no place of application. Corporate layering is admittedly allowed can, if appropriate, be used cumulatively in the determination of the ownership and
by the FIA, but if it is used to circumvent the Constitution and other pertinent laws, then it control of corporations engaged in fully or partly nationalized activities, as the mining
becomes illegal. operation involved in this case or the operation of public utilities.
Second, under the SEC Rule1 and DOJ Opinion2 , the Grandfather Rule must be applied The Grandfather Rule, standing alone, should not be used to determine the Filipino
when the 60-40 Filipino-foreign equity ownership is in doubt. Doubt is present in the ownership and control in a corporation, as it could result in an otherwise foreign
Filipino equity ownership of Narra, Tesoro, and MacArthur since their common investor, corporation rendered qualified to perform nationalized or partly nationalized activities.
the 100% Canadian-owned corporation – MBMI, funded them. Hence, it is only when the Control Test is first complied with that the Grandfather Rule
may be applied. Put in another manner, if the subject corporation’s Filipino equity falls
Under the Grandfather Rule, it is not enough that the corporation does have the below the threshold 60%, the corporation is immediately considered foreign-owned, in
required 60% Filipino stockholdings at face value. To determine the percentage of the which case, the need to resort to the Grandfather Rule disappears.
ultimate Filipino ownership, it must first be traced to the level of the investing corporation
and added to the shares directly owned in the investee corporation. Applying this rule, In this case, using the ‘control test’, Narra, Tesoro and MacArthur appear to have
it turns out that the Canadian corporation owns more than 60% of the equity interests of satisfied the 60-40 equity requirement. But the nationality of these corporations and the
Narra, Tesoro and MacArthur. Hence, the latter are disqualified to participate in the foreign-owned common investor that funds them was in doubt, hence, the need to
exploration, development and utilization of the Philippine’s natural resources. apply the Grandfather Rule.
Commercial law; Tests to determine the nationality of a corporation. There are two
acknowledged tests in determining the nationality of a corporation: the control test and
the grandfather rule. Paragraph 7 of DOJ Opinion No. 020, Series of 2005, adopts the
1967 SEC Rules which implemented the requirement of the Constitution and other laws
pertaining to the controlling interests in enterprises engaged in the exploitation of
natural resources owned by Filipino citizens. The first part of paragraph 7, DOJ Opinion
No. 020, stating “shares belonging to corporations or partnerships at least 60% of the
capital of which is owned by Filipino citizens shall be considered as of Philippine
nationality,” pertains to the control test or the liberal rule. On the other hand, the
second part of the DOJ Opinion which provides, “if the percentage of the Filipino
ownership in the corporation or partnership is less than 60%, only the number of shares
corresponding to such percentage shall be counted as Philippine nationality,” pertains
to the stricter, more stringent grandfather rule.
Application of the Grandfather Rule. Based on the said SEC Rule and DOJ Opinion, the
Grandfather Rule or the second part of the SEC Rule applies only when the 60-40
Filipino-foreign equity ownership is in doubt (i.e., in cases where the joint venture
corporation with Filipino and foreign stockholders with less than 60% Filipino
stockholdings [or 59%] invests in other joint venture corporation which is either 60-40%
Filipino-alien or the 59% less Filipino). Stated differently, where the 60-40 Filipino- foreign
equity ownership is not in doubt, the Grandfather Rule will not apply.
Existence of doubt. The assertion of petitioners that “doubt” only exists when the
stockholdings are less than 60% fails to convince this Court. DOJ Opinion No. 20, which
petitioners quoted in their petition, only made an example of an instance where
“doubt” as to the ownership of the corporation exists. It would be ludicrous to limit the
application of the said word only to the instances where the stockholdings of non-
Filipino stockholders are more than 40% of the total stockholdings in a corporation. The
corporations interested in circumventing our laws would clearly strive to have “60%
Filipino Ownership” at face value. It would be senseless for these applying corporations
to state in their respective articles of incorporation that they have less than 60% Filipino
stockholders since the applications will be denied instantly. Thus, various corporate
schemes and layerings are utilized to circumvent the application of the Constitution.
6. RESIDENT MAMMALS OF THE PROTECTED SEASCAPE TANON STRAIT v. REYES shall issue an order which shall contain a brief description of the cause of
G.R. No. 180771 April 21, 2015 action and the reliefs prayed for, requiring all interested parties to manifest
their interest to intervene in the case within fifteen (15) days from notice
Facts: thereof. The plaintiff may publish the order once in a newspaper of a general
The resident marine mammals of the protected seascape Tañon Strait, including circulation in the Philippines or furnish all affected barangays copies of said
the whales, dolphins, porpoises and other cetacean species, as well as Gloria order.
Estenzo Ramos and Rose-Liza Eisma-Osorio, as their legal guardians and friends,
filed an action against the late Department of Energy Secretary Angelo T. Reyes, Citizen suits filed under R.A. No. 8749 and R.A. No. 9003 shall be governed by
former Department of Environment and Natural Resources (DENR) Secretary Jose their respective provisions.”
L. Atienza, DENR-Region VII Director and Chairman of Tañon Strait Leonardo
Sibbaluca, Japan Petroleum Exploration Co., Ltd. (JAPEX), and Supply Oilfield
Explaining the rationale for this rule, the Court, in the Annotations to the Rules of
Services, Inc. (SOS) due to a service contract granted by the DOE to JAPEX, which
Procedure for Environmental Cases, commented:
allowed the latter to conduct seismic surveys in and around the protected Tañon
Strait, and thus unconstitutional.
The respondents argued that the mammals have no legal standing for not being “Citizen suit. To further encourage the protection of the environment, the Rules
natural or juridical persons, as required by the Rules of Court, as well as to Ramos enable litigants enforcing environmental rights to file their cases as citizen suits.
and Osorio for representing those mammals. This provision liberalizes standing for all cases filed enforcing environmental
They also alleged that the liberality as to legal standing in Oposa vs. Factoran, Jr., laws and collapses the traditional rule on personal and direct interest, on the
224 SCRA 792 (1993) is not applicable, because the petitioners in said case are principle that humans are stewards of nature. The terminology of the text
natural persons. reflects the doctrine first enunciated in Oposa v. Factoran, insofar as it refers to
Meanwhile, the petitioners averred that the mammals have legal standing, minors and generations yet unborn.
because they would either be injured or benefited by the judgment of the case.
Ramos and Osorio maintained that as forerunners of the campaign in raising Although this petition was filed in 2007, years before the effectivity of the Rules of
awareness among the residents of the Tañon Strait and as stewards of the Procedure for Environmental Cases, it has been consistently held that rules of procedure
environment, they have legal standing to institute the case. “may be retroactively applied to actions pending and undetermined at the time of
Two sets of petitioners filed separate cases challenging the legality of Service their passage and will not violate any right of a person who may feel that he is adversely
Contract No. 46 (SC-46) awarded to Japan Petroleum Exploration Co. (JAPEX). affected, inasmuch as there is no vested rights in rules of procedure.”
The service contract allowed JAPEX to conduct oil exploration in the Tañon Strait
during which it performed seismic surveys and drilled one exploration well. Moreover, even before the Rules of Procedure for Environmental Cases became
The first petition was brought on behalf of resident marine mammals in the Tañon effective, this Court had already taken a permissive position on the issue of locus standi
Strait by two individuals acting as legal guardians and stewards of the marine in environmental cases. In Oposa, we allowed the suit to be brought in the name of
mammals. generations yet unborn “based on the concept of intergenerational responsibility insofar
The second petition was filed by a non-governmental organization representing as the right to a balanced and healthful ecology is concerned.” Furthermore, we said
the interests of fisherfolk, along with individual representatives from fishing that the right to a balanced and healthful ecology, a right that does not even need to
communities impacted by the oil exploration activities. be stated in our Constitution as it is assumed to exist from the inception of humankind,
The petitioners filed their cases in 2007, shortly after JAPEX began drilling in the carries with it the correlative duty to refrain from impairing the environment.
strait.
In 2008, JAPEX and the government of the Philippines mutually terminated the In light of the foregoing, the need to give the Resident Marine Mammals legal standing
service contract and oil exploration activities ceased. has been eliminated by our Rules, which allow any Filipino citizen, as a steward of
The Supreme Court consolidated the cases for the purpose of review. nature, to bring a suit to enforce our environmental laws. It is worth noting here that the
Stewards are joined as real parties in the Petition and not just in representation of the
Issue: Whether the resident marine mammals of the protected seascape Tañon Strait, as named cetacean species. The Stewards, Ramos and Eisma-Osorio, having shown in
well as their legal guardians and friends Gloria Estenzo Ramos and Rose-Liza Eisma- their petition that there may be possible violations of laws concerning the habitat of the
Osorio, have the legal standing to institute the case Resident Marine Mammals, are therefore declared to possess the legal standing to file
this petition.
Ruling: Yes, the resident marine mammals of the protected seascape Tañon Strait, as
well as their legal guardians and friends Gloria Estenzo Ramos and Rose-Liza Eisma-
The Petitions in G.R. Nos. 180771 and 181527 are GRANTED, Service Contract No. 46 is
Osorio, have the legal standing to institute the case.
hereby declared NULL AND VOID for violating the 1987 Constitution, Republic Act No.
7586, and Presidential Decree No. 1586.
Recently, the Court passed the landmark Rules of Procedure for Environmental Cases,51
which allow for a “citizen suit,” and permit any Filipino citizen to file an action before our
courts for violations of our environmental laws: ISSUE: Whether the service contract violated the Constitution or other domestic laws
“SEC. 5. Citizen suit. – Any Filipino citizen in representation of others, including
minors or generations yet unborn, may file an action to enforce rights or HELD:
obligations under environmental laws. Upon the filing of a citizen suit, the court
The Court then held that while SC-46 was authorized Presidential Decree No. 87 on oil
extraction, the contract did not fulfill two additional constitutional requirements. Section
2 Article XII of the 1987 Constitution requires a service contract for oil exploration and
extraction to be signed by the president and reported to congress. Because the JAPEX
contract was executed solely by the Energy Secretary, and not reported to the
Philippine congress, the Court held that it was unconstitutional.
In addition, the Court also ruled that the contract violated the National Integrated
Protected Areas System Act of 1992 (NIPAS Act), which generally prohibits exploitation
of natural resources in protected areas. In order to explore for resources in a protected
area, the exploration must be performed in accordance with an environmental impact
assessment (EIA). The Court noted that JAPEX started the seismic surveys before any EIA
was performed; therefore its activity was unlawful. Id., pp. 33-34. Furthermore, the Tanon
Strait is a NIPAS area, and exploration and utilization of energy resources can only be
authorized through a law passed by the Philippine Congress. Because Congress had not
specifically authorized the activity in Tañon Strait, the Court declared that no energy
exploration should be permitted in that area.
7. METROPOLITAN CEBU WATER DISTRICT v. MARGARITA ADALA (2007) SECTION 5. No franchise, certificate, or any other form of authorization for the operation
of a public utility shall be granted except to citizens of the Philippines or to corporations
FACTS: or associations organized under the laws of the Philippines at least sixty per centum of
Respondent filed on October 24, 2002 an application with the National Water the capital of which is owned by such citizens, nor shall such franchise, certificate, or
Resources Board (NWRB) for the issuance of a Certificate of Public Convenience authorization be exclusive in character or for a longer period than fifty years. x x x
(CPC) to operate and maintain waterworks system in sitios San Vicente, Fatima,
and Sambag in Barangay Bulacao, Cebu City. This provision has been substantially reproduced in Article XII Section 11 of the 1987
At the initial hearing of December 16, 2002 during which respondent submitted Constitution, including the prohibition against exclusive franchises.
proof of compliance with jurisdictional requirements of notice and publication,
herein petitioner Metropolitan Cebu Water District, a government-owned and Water districts fall under the term “public utility”
controlled corporation created pursuant to P.D. 198 which took effect upon its A "public utility" is a business or service engaged in regularly supplying the public with
issuance by then President Marcos on May 25, 1973, as amended, appeared some commodity or service of public consequence such as electricity, gas, water,
through its lawyers to oppose the application. transportation, telephone or telegraph service. x x x (National Power Corp. v. CA)
In its Opposition, petitioner prayed for the denial of respondent’s application on the
following grounds: (1) petitioner’s Board of Directors had not consented to the We agree with petitioner that the NAWASA is a public utility because its primary function
issuance of the franchise applied for, such consent being a mandatory condition is to construct, maintain and operate water reservoirs and waterworks for the purpose of
pursuant to P.D. 198, (2) the proposed waterworks would interfere with petitioner’s supplying water to the inhabitants, as well as consolidate and centralize all water
water supply which it has the right to protect, and (3) the water needs of the supplies and drainage systems in the Philippines. x x x (National Waterworks and
residents in the subject area was already being well served by petitioner. Sewerage Authority v. NWSA Consolidated Unions)
NWRB granted Adala’s application after hearing and an ocular inspection of the
area and denied MCWD’s MFR. MWCD‘s position that an overly strict construction of the term ―franchise as used in
RTC denied the appeal and upheld NWRB Decision. RTC denied MFR. Section 47 of P.D. 198 would lead to an absurd result impresses. If franchises, in this
context, were strictly understood to mean an authorization issuing directly from the
ISSUE/HELD: WON Section 47 of P.D. 198, which vests an "exclusive franchise" upon public legislature, it would follow that, while Congress cannot issue franchises for operating
utilities is constitutional and may be relied upon by MCWD in its opposition of Adala’s waterworks systems without the water district‘s consent, the NWRB may keep on issuing
application for a CPC – NO CPCs authorizing the very same act even without such consent.
Sec. 47. Exclusive Franchise. — No franchise shall be granted to any other person or In effect, not only would the NWRB be subject to less constraints than Congress in issuing
agency for domestic, industrial or commercial water service within the district or any franchises. The exclusive character of the franchise provided for by Section 47 would be
portion thereof unless and except to the extent that the board of directors of said illusory. While the prohibition in Section 47 of P.D. 198 applies to the issuance of CPCs for
district consents thereto by resolution duly adopted, such resolution, however, shall be the reasons discussed above, the same provision must be deemed void ab initio for
subject to review by the Administration. being irreconcilable with Article XIV Section 5 of the 1973 Constitution which was ratified
There being no such consent on the part of its board of directors, petitioner concludes on January 17, 1973 – the constitution in force when P.D. 198 was issued on May 25,
that respondent’s application for CPC should be denied. 1973.
Possession of franchise by a water district does not bar the issuance of a CPC for an That the legislative authority – in this instance, then President Marcos – intended to
area covered by the water district delegate its power to issue franchises in the case of water districts is clear from the fact
that, pursuant to the procedure outlined in P.D. 198, it no longer plays a direct role in
A CPC is formal written authority issued by quasi-judicial bodies for the operation and authorizing the formation and maintenance of water districts, it having vested the same
maintenance of a public utility for which a franchise is not required by law and a CPC to local legislative bodies and the Local Water Utilities Administration (LWUA).
issued by this Board is an authority to operate and maintain a waterworks system or
water supply service.
Facts:
Manila International Airport Authority (MIAA) is the operator of the Ninoy
International Airport located at Paranaque City.
The Officers of Paranaque City sent notices to MIAA due to real estate tax
delinquency.
MIAA then settled some of the amount. When MIAA failed to settle the entire
amount, the officers of Paranaque city threatened to levy and subject to auction
the land and buildings of MIAA, which they did.
MIAA sought for a Temporary Restraining Order from the CA but failed to do so
within the 60 days reglementary period, so the petition was dismissed.
MIAA then sought for the TRO with the Supreme Court a day before the public
auction, MIAA was granted with the TRO but unfortunately the TRO was received
by the Paranaque City officers 3 hours after the public auction.
MIAA claims that although the charter provides that the title of the land and
building are with MIAA still the ownership is with the Republic of the Philippines.
MIAA also contends that it is an instrumentality of the government and as such
exempted from real estate tax.
That the land and buildings of MIAA are of public dominion therefore cannot be
subjected to levy and auction sale. On the other hand, the officers of Paranaque
City claim that MIAA is a government owned and controlled corporation
therefore not exempted to real estate tax.
Issues:
1) Whether or not MIAA is an instrumentality of the government and not a
government owned and controlled corporation and as such exempted from tax.
2) Whether or not the land and buildings of MIAA are part of the public dominion
and thus cannot be the subject of levy and auction sale.
Ruling:
Under the Local government code, government owned and controlled corporations
are not exempted from real estate tax. MIAA is not a government owned and
controlled corporation, for to become one MIAA should either be a stock or non stock
corporation. MIAA is not a stock corporation for its capital is not divided into shares. It is
not a non stock corporation since it has no members. MIAA is an instrumentality of the
government vested with corporate powers and government functions.
Under the civil code, property may either be under public dominion or private
ownership. Those under public dominion are owned by the State and are utilized for
public use, public service and for the development of national wealth. The ports
included in the public dominion pertain either to seaports or airports. When properties
under public dominion cease to be for public use and service, they form part of the
patrimonial property of the State.
The court held that the land and buildings of MIAA are part of the public dominion.
Since the airport is devoted for public use, for the domestic and international travel and
transportation. Even if MIAA charge fees, this is for support of its operation and for
regulation and does not change the character of the land and buildings of MIAA as
part of the public dominion. As part of the public dominion the land and buildings of
MIAA are outside the commerce of man. To subject them to levy and public auction is
contrary to public policy. Unless the President issues a proclamation withdrawing the
airport land and buildings from public use, these properties remain to be of public
9. LIBAN v. GORDON
FACTS:
ISSUE: Was it proper for the Court to have ruled on the constitutionality of the PNRC
statute?
HELD: In the case at bar, the constitutionality of the PNRC statute was raised in the issue
of standing. As such, the Court should not have declared certain provisions of such as
unconstitutional. On the substantive issue, the PNRC is sui generis. It is unlike the private
corporations that the Constitution wants to prevent Congress from creating. First, the
PNRC is not organized for profit. It is an organization dedicated to assist victims of war
and administer relief to those who have been devastated by calamities, among others.
It is entirely devoted to public service. It is not covered by the prohibition since the
Constitution aims to eliminate abuse by the Congress, which tend to favor personal
gain. Secondly, the PNRC was created in order to participate in the mitigation of the
effects of war, as embodied in the Geneva Convention. The creation of the PNRC is
compliance with international treaty obligations. Lastly, the PNRC is a National Society,
an auxiliary of the government. It is not like government instrumentalities and GOCC.
It has been consistently held in Jurisprudence that the Court should exercise judicial
restraint when it comes to issues of constitutionality where it is not the lis mota of the
case.
10. BSP v. COA
Art. 45.Juridical persons mentioned in Nos. 1 and 2 of the preceding article are
FACTS: governed by the laws creating or recognizing them.
This case arose when the COA issued Resolution No. 99-011on August 19, 1999 ("the
COA Resolution"), with the subject "Defining the Commissions policy with respect to Private corporations are regulated by laws of general application on the subject.
the audit of the Boy Scouts of the Philippines."
In its whereas clauses, the COA Resolution stated that the BSP was created as a Partnerships and associations for private interest or purpose are governed by the
public corporation under Commonwealth Act No. 111, as amended by Presidential provisions of this Code concerning partnerships.
Decree No. 460 and Republic Act No. 7278; that in Boy Scouts of the Philippines v.
National Labor Relations Commission, the Supreme Court ruled that the BSP, as The purpose of the BSP as stated in its amended charter shows that it was created in
constituted under its charter, was a "government-controlled corporation within the order to implement a State policy declared in Article II, Section 13 of the Constitution,
meaning of Article IX(B)(2)(1) of the Constitution"; and that "the BSP is appropriately which reads:
regarded as a government instrumentality under the 1987 Administrative Code."
The COA Resolution also cited its constitutional mandate under Section 2(1), Article Section 13. The State recognizes the vital role of the youth in nation-building and shall
IX (D).Finally, the COA Resolution reads: promote and protect their physical, moral, spiritual, intellectual, and social well-being. It
NOW THEREFORE, in consideration of the foregoing premises, the COMMISSION shall inculcate in the youth patriotism and nationalism, and encourage their
PROPER HAS RESOLVED, AS IT DOES HEREBY RESOLVE,to conduct an annual involvement in public and civic affairs.
financial audit of the Boy Scouts of the Philippines in accordance with
generally accepted auditing standards, and express an opinion on whether Evidently, the BSP, which was created by a special law to serve a public purpose in
the financial statements which include the Balance Sheet, the Income pursuit of a constitutional mandate, comes within the class of "public corporations"
Statement and the Statement of Cash Flows present fairly its financial position defined by paragraph 2, Article 44 of the Civil Code and governed by the law which
and results of operations. creates it, pursuant to Article 45 of the same Code. DENIED.
xxxx
BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision,the Boy
Scouts of the Philippines shall be classified among the government
corporations belonging to the Educational, Social, Scientific, Civic and
Research Sectorunder the Corporate Audit Office I, to be audited, similar to
the subsidiary corporations, by employing the team audit approach
HELD:
After looking at the legislative history of its amended charter and carefully studying the
applicable laws and the arguments of both parties, [the Supreme Court found] that the
BSP is a public corporation and its funds are subject to the COA's audit jurisdiction.
The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), entitled
"An Act to Create a Public Corporation to be Known as the Boy Scouts of the
Philippines, and to Define its Powers and Purposes" created the BSP as a "public
corporation"
There are three classes of juridical persons under Article 44 of the Civil Code and the
BSP, as presently constituted under Republic Act No. 7278,falls under the second
classification.Article 44 reads: