G.R. No.

144681 June 21, 2004

PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN HERMOGENES P. POBRE,

ASSOCIATE COMMISSIONER ARMANDO PASCUAL, BOARD OF MEDICINE, CHAIRMAN
RODOLFO P. DE GUZMAN, JOSE S. RAMIREZ, JUANITO B. BILLOTE, RUBEN R. POLICARPIO,
EDGARDO T. FERNANDO and RICARDO D. FULGENCIO II, petitioners,
vs.
ARLENE V. DE GUZMAN, VIOLETA V. MENESES, CELERINA S. NAVARRO, JOSE RAMONCITO
P. NAVARRO, ARNEL V. HERRERA and GERALDINE ELIZABETH M. PAGILAGAN, ELNORA R.
RAQUENO, MARISSA A. REGODON, LAURA M. SANTOS, KARANGALAN D. SERRANO,
DANILO A. VILLAVER, MARIA ROSARIO L. LEONOR, ALICIA S. LIZANO, MARITEL M.
ECHIVERRI, BERNADETTE T. MENDOZA, FERNANDO F. MANDAPAT, ALELI A. GOLLAYAN,
ELCIN C. ARRIOLA, HERMINIGILDA E. CONEJOS, SALLY B. BUNAGAN, ROGELIO B.
ANCHETA, OSCAR H. PADUA, JR., EVELYN D. GRAJO, EVELYN S. ACOSTA, MARGARITA
BELINDA L. VICENCIO, VALENTINO P. ARBOLEDA, EVELYN O. RAMOS, ACHILLES J.
PERALTA, CORAZON M. CRUZ, LEUVINA P. CHICO, JOSEPH A. JAO, MA. LUISA S.
GUTIERREZ, LYDIA C. CHAN, OPHELIA C. HIDALGO, FERNANDO T. CRUZ, MELVIN M. USITA,
RAFAEL I. TOLENTINO, GRACE E. UY, CHERYL R. TRIGUERO, MICHAEL L. SERRANO,
FEDERICO L. CASTILLO, MELITA J. CAÑEDO, SAMUEL B. BANGOY, BERNARDITA B. SY,
GLORIA T. JULARBAL, FREDERICK D. FRANCISCO, CARLOS M. BERNARDO, JR., HUBERT S.
NAZARENO, CLARISSA B. BACLIG, DAYMINDA G. BONTUYAN, BERNADETTE H. CABUHAT,
NANCY J. CHAVEZ, MARIO D. CUARESMA, ERNESTO L. CUE, EVELYN C. CUNDANGAN,
RHONEIL R. DEVERATURDA, DERILEEN D. DORADO, SAIBZUR N. EDDING, VIOLETA C.
FELIPE, HERMINIO V. FERNANDEZ, JR., MARIA VICTORIA M. LACSAMANA, NORMA G.
LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q. MALLARI, CLARISA SJ. NICOLAS, PERCIVAL
H. PANGILINAN, ARNULFO A. SALVADOR, ROBERT B. SANCHEZ, MERLY D. STA. ANA and
YOLANDA P. UNICA, respondents.

DECISION

TINGA, J.:

This petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeks to nullify
the Decision,1 dated May 16, 2000, of the Court of Appeals in CA-G.R. SP No. 37283. The appellate
court affirmed the judgment2 dated December 19, 1994, of the Regional Trial Court (RTC) of Manila,
Branch 52, in Civil Case No. 93-66530. The trial court allowed the respondents to take their physician’s
oath and to register as duly licensed physicians. Equally challenged is the Resolution3 promulgated
on August 25, 2000 of the Court of Appeals, denying petitioners’ Motion for Reconsideration.

The facts of this case are as follows:

The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro
Manila. They passed the Physician Licensure Examination conducted in February 1993 by the
Board of Medicine (Board). Petitioner Professional Regulation Commission (PRC) then
released their names as successful examinees in the medical licensure examination.

Shortly thereafter, the Board observed that the grades of the seventy-nine successful
examinees from Fatima College in the two most difficult subjects in the medical licensure
exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OB-Gyne), were unusually
and exceptionally high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got 100%
in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99% in OB-Gyne.
The Board also observed that many of those who passed from Fatima got marks of 95% or
 better in both subjects, and no one got a mark lower than 90%. A comparison of the
performances of the candidates from other schools was made. The Board observed that
strangely, the unusually high ratings were true only for Fatima College examinees. It was a
record-breaking phenomenon in the history of the Physician Licensure Examination.

On June 7, 1993, the Board issued Resolution No. 19, withholding the registration as physicians of all
the examinees from the Fatima College of Medicine.4 The PRC asked the National Bureau of
Investigation (NBI) to investigate whether any anomaly or irregularity marred the February 1993
Physician Licensure Examination.

Prior to the NBI investigation, the Board requested Fr. Bienvenido F. Nebres, S.J., an expert
mathematician and authority in statistics, and later president of the Ateneo de Manila University, to
conduct a statistical analysis of the results in Bio-Chem and Ob-Gyne of the said examination.

On June 10, 1993, Fr. Nebres submitted his report. He reported that a comparison of the scores in
Bio-Chem and Ob-Gyne, of the Fatima College examinees with those of examinees from De La Salle
University and Perpetual Help College of Medicine showed that the scores of Fatima College
examinees were not only incredibly high but unusually clustered close to each other. He concluded
that there must be some unusual reason creating the clustering of scores in the two subjects. It must
be a cause "strong enough to eliminate the normal variations that one should expect from the
examinees [of Fatima College] in terms of talent, effort, energy, etc."5

For its part, the NBI found that "the questionable passing rate of Fatima examinees in the [1993]
Physician Examination leads to the conclusion that the Fatima examinees gained early access to the
test questions."6

On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses, Celerina S. Navarro, Jose
Ramoncito P. Navarro, Arnel V. Herrera, and Geraldine Elizabeth M. Pagilagan (Arlene V. De Guzman
et al., for brevity) filed a special civil action for mandamus, with prayer for preliminary mandatory
injunction docketed as Civil Case No. 93-66530 with the Regional Trial Court (RTC) of Manila, Branch
52. Their petition was adopted by the other respondents as intervenors.

Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993, charging respondents with
"immorality, dishonest conduct, fraud, and deceit" in connection with the Bio-Chem and Ob-Gyne
examinations. It recommended that the test results of the Fatima examinees be nullified. The case
was docketed as Adm. Case No. 1687 by the PRC.

On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530 granting the preliminary
mandatory injunction sought by the respondents. It ordered the petitioners to administer the
physician’s oath to Arlene V. De Guzman et al., and enter their names in the rolls of the PRC.

The petitioners then filed a special civil action for certiorari with the Court of Appeals to set aside the
mandatory injunctive writ, docketed as CA-G.R. SP No. 31701.

On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701, with the dispositive portion
of the Decision ordaining as follows:

WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary mandatory

injunction issued by the lower court against petitioners is hereby nullified and set aside.

SO ORDERED.7
Arlene V. de Guzman, et al., then elevated the foregoing Decision to this Court in G.R. No. 112315.
In our Resolution dated May 23, 1994, we denied the petition for failure to show reversible error on
the part of the appellate court.

Meanwhile, on November 22, 1993, during the pendency of the instant petition, the pre-trial conference
in Civil Case No. 93-66530 was held. Then, the parties, agreed to reduce the testimonies of their
respective witnesses to sworn questions-and-answers. This was without prejudice to cross-
examination by the opposing counsel.

On December 13, 1993, petitioners’ counsel failed to appear at the trial in the mistaken belief that the
trial was set for December 15. The trial court then ruled that petitioners waived their right to cross-
examine the witnesses.

On January 27, 1994, counsel for petitioners filed a Manifestation and Motion stating the reasons for
her non-appearance and praying that the cross-examination of the witnesses for the opposing parties
be reset. The trial court denied the motion for lack of notice to adverse counsel. It also denied
the Motion for Reconsideration that followed on the ground that adverse counsel was notified less than
three (3) days prior to the hearing.

Meanwhile, to prevent the PRC and the Board from proceeding with Adm. Case No. 1687, the
respondents herein moved for the issuance of a restraining order, which the lower court granted in
its Order dated April 4, 1994.

The petitioners then filed with this Court a petition for certiorari docketed as G.R. No. 115704, to annul
the Orders of the trial court dated November 13, 1993, February 28, 1994, and April 4, 1994. We
referred the petition to the Court of Appeals where it was docketed as CA-G.R. SP No. 34506.

On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as follows:

WHEREFORE, the present petition for certiorari with prayer for temporary restraining
order/preliminary injunction is GRANTED and the Orders of December 13, 1993, February 7,
1994, February 28, 1994, and April 4, 1994 of the RTC-Manila, Branch 52, and all further
proceedings taken by it in Special Civil Action No. 93-66530 are hereby DECLARED NULL
and VOID. The said RTC-Manila is ordered to allow petitioners’ counsel to cross-examine the
respondents’ witnesses, to allow petitioners to present their evidence in due course of trial,
and thereafter to decide the case on the merits on the basis of the evidence of the parties.
Costs against respondents.

IT IS SO ORDERED.8

The trial was then set and notices were sent to the parties.

A day before the first hearing, on September 22, 1994, the petitioners filed an Urgent Ex-Parte
Manifestation and Motion praying for the partial reconsideration of the appellate court’s decision in
CA-G.R. SP No. 34506, and for the outright dismissal of Civil Case No. 93-66530. The petitioners
asked for the suspension of the proceedings.

In its Order dated September 23, 1994, the trial court granted the aforesaid motion, cancelled the
scheduled hearing dates, and reset the proceedings to October 21 and 28, 1994.
Meanwhile, on October 25, 1994, the Court of Appeals denied the partial motion for reconsideration
in CA-G.R. SP No. 34506. Thus, petitioners filed with the Supreme Court a petition for review docketed
as G.R. No. 117817, entitled Professional Regulation Commission, et al. v. Court of Appeals, et al.

On November 11, 1994, counsel for the petitioners failed to appear at the trial of Civil Case No. 93-
66530. Upon motion of the respondents herein, the trial court ruled that herein petitioners waived their
right to cross-examine the herein respondents. Trial was reset to November 28, 1994.

On November 25, 1994, petitioners’ counsel moved for the inhibition of the trial court judge for alleged
partiality. On November 28, 1994, the day the Motion to Inhibit was to be heard, petitioners failed to
appear. Thus, the trial court denied the Motion to Inhibit and declared Civil Case No. 93-66530
deemed submitted for decision.

On December 19, 1994, the trial court handed down its judgment in Civil Case No. 93-66530, the fallo
of which reads:

WHEREFORE, judgment is rendered ordering the respondents to allow the petitioners and
intervenors (except those with asterisks and footnotes in pages 1 & 2 of this decision) [sic],9 to
take the physician’s oath and to register them as physicians.

It should be made clear that this decision is without prejudice to any administrative disciplinary
action which may be taken against any of the petitioners for such causes and in the manner
provided by law and consistent with the requirements of the Constitution as any other
professionals.

No costs.

SO ORDERED.10

As a result of these developments, petitioners filed with this Court a petition for review on certiorari
docketed as G.R. No. 118437, entitled Professional Regulation Commission v. Hon. David G. Nitafan,
praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No. 117817; (2) the decision of
the Court of Appeals dated August 31, 1994 in CA-G.R. SP No. 34506 be nullified for its failure to
decree the dismissal of Civil Case No. 93-66530, and in the alternative, to set aside the decision of
the trial court in Civil Case No. 93-66530, order the trial court judge to inhibit himself, and Civil Case
No. 93-66530 be re-raffled to another branch.

On December 26, 1994, the petitioners herein filed their Notice of Appeal11 in Civil Case No. 93-66530,
thereby elevating the case to the Court of Appeals, where it was docketed as CA-G.R. SP No. 37283.

In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with G.R. No. 117817.

On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this wise:

WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being moot. The petition in
G.R. No. 118437 is likewise DISMISSED on the ground that there is a pending appeal before
the Court of Appeals. Assistant Solicitor General Amparo M. Cabotaje-Tang is advised to be
more circumspect in her dealings with the courts as a repetition of the same or similar acts will
be dealt with accordingly.

SO ORDERED.12
While CA-G.R. SP No. 37283 was awaiting disposition by the appellate court, Arnel V. Herrera, one
of the original petitioners in Civil Case No. 93-66530, joined by twenty-seven intervenors, to wit:
Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando
T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao,
Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette
C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding,
Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario L. Leonor-Lacandula, Geraldine
Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos,
Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro, manifested that
they were no longer interested in proceeding with the case and moved for its dismissal. A similar
manifestation and motion was later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L.
Serrano, Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G.
Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan,
Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Cañedo, Clarisa SJ.
Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan,
and Melvin M. Usita. The Court of Appeals ruled that its decision in CA-G.R. SP No. 37283 would not
apply to them.

On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283, with the following fallo, to wit:

WHEREFORE, finding no reversible error in the decision appealed from, We hereby AFFIRM
the same and DISMISS the instant appeal.

No pronouncement as to costs.

SO ORDERED.13

In sustaining the trial court’s decision, the appellate court ratiocinated that the respondents complied
with all the statutory requirements for admission into the licensure examination for physicians in
February 1993. They all passed the said examination. Having fulfilled the requirements of Republic
Act No. 2382,14 they should be allowed to take their oaths as physicians and be registered in the rolls
of the PRC.

Hence, this petition raising the following issues:

WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR

MANDAMUS AGAINST PETITIONERS IN THE LIGHT OF THE RESOLUTION OF THIS
HONORABLE COURT IN G.R. NO. 112315 AFFIRMING THE COURT OF APPEALS’
DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT AS TO THE MORAL
FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS
NOT AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES.

II

WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED DESPITE THE
PENDENCY OF ADMINISTRATIVE CASE NO. 1687, WHICH WAS PRECISELY LODGED
TO DETERMINE THE MORAL FITNESS OF RESPONDENTS TO BECOME DOCTORS.15
To our mind, the only issue is: Did the Court of Appeals commit a reversible error of law in sustaining
the judgment of the trial court that respondents are entitled to a writ of mandamus?

The petitioners submit that a writ of mandamus will not lie in this case. They point out that for a writ of
mandamus to issue, the applicant must have a well-defined, clear and certain legal right to the thing
demanded and it is the duty of the respondent to perform the act required. Thus, mandamus may be
availed of only when the duty sought to be performed is a ministerial and not a discretionary one. The
petitioners argue that the appellate court’s decision in CA-G.R. SP No. 37283 upholding the decision
of the trial court in Civil Case No. 93-66530 overlooked its own pronouncement in CA-G.R. SP No.
31701. The Court of Appeals held in CA-G.R. SP No. 31701 that the issuance of a license to engage
in the practice of medicine becomes discretionary on the PRC if there exists some doubt that the
successful examinee has not fully met the requirements of the law. The petitioners stress that this
Court’s Resolution dated May 24, 1994 in G.R. No. 112315 held that there was no showing "that the
Court of Appeals had committed any reversible error in rendering the questioned judgment" in CA-
G.R. SP No. 31701. The petitioners point out that our Resolution in G.R. No. 112315 has long become
final and executory.

Respondents counter that having passed the 1993 licensure examinations for physicians, the
petitioners have the obligation to administer to them the oath as physicians and to issue their
certificates of registration as physicians pursuant to Section 2016 of Rep. Act No. 2382. The Court of
Appeals in CA-G.R. SP No. 37283, found that respondents complied with all the requirements of Rep.
Act No. 2382. Furthermore, respondents were admitted by the Medical Board to the licensure
examinations and had passed the same. Hence, pursuant to Section 20 of Rep. Act No. 2382, the
petitioners had the obligation to administer their oaths as physicians and register them.

Mandamus is a command issuing from a court of competent jurisdiction, in the name of the state or
the sovereign, directed to some inferior court, tribunal, or board, or to some corporation or person
requiring the performance of a particular duty therein specified, which duty results from the official
station of the party to whom the writ is directed, or from operation of law.17 Section 3 of Rule 6518 of
the 1997 Rules of Civil Procedure outlines two situations when a writ of mandamus may issue, when
any tribunal, corporation, board, officer or person unlawfully (1) neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, trust, or station; or (2) excludes
another from the use and enjoyment of a right or office to which the other is entitled.

We shall discuss the issues successively.

1. On The Existence of a Duty of the Board of Medicine To Issue Certificates of Registration as

Physicians under Rep. Act No. 2382.

For mandamus to prosper, there must be a showing that the officer, board, or official concerned, has
a clear legal duty, not involving discretion.19 Moreover, there must be statutory authority for the
performance of the act,20 and the performance of the duty has been refused.21 Thus, it must be
pertinently asked now: Did petitioners have the duty to administer the Hippocratic Oath and register
respondents as physicians under the Medical Act of 1959?

As found by the Court of Appeals, on which we agree on the basis of the records:

It bears emphasizing herein that petitioner-appellees and intervenor-appellees have fully

complied with all the statutory requirements for admission into the licensure examinations for
physicians conducted and administered by the respondent-appellants on February 12, 14, 20
and 21, 1993. Stress, too, must be made of the fact that all of them successfully passed the
same examinations.22
The crucial query now is whether the Court of Appeals erred in concluding that petitioners should allow
the respondents to take their oaths as physicians and register them, steps which would enable
respondents to practice the medical profession23 pursuant to Section 20 of the Medical Act of 1959?

The appellate court relied on a single provision, Section 20 of Rep. Act No. 2382, in concluding that
the petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and
register them as physicians. But it is a basic rule in statutory construction that each part of a statute
should be construed in connection with every other part to produce a harmonious whole, not confining
construction to only one section.24 The intent or meaning of the statute should be ascertained from the
statute taken as a whole, not from an isolated part of the provision. Accordingly, Section 20, of Rep.
Act No. 2382, as amended should be read in conjunction with the other provisions of the Act. Thus, to
determine whether the petitioners had the ministerial obligation to administer the Hippocratic Oath to
respondents and register them as physicians, recourse must be had to the entirety of the Medical Act
of 1959.

A careful reading of Section 20 of the Medical Act of 1959 discloses that the law uses the word "shall"
with respect to the issuance of certificates of registration. Thus, the petitioners "shall sign and issue
certificates of registration to those who have satisfactorily complied with the requirements of the
Board." In statutory construction the term "shall" is a word of command. It is given imperative meaning.
Thus, when an examinee satisfies the requirements for the grant of his physician’s license, the Board
is obliged to administer to him his oath and register him as a physician, pursuant to Section 20 and
par. (1) of Section 2225 of the Medical Act of 1959.

However, the surrounding circumstances in this case call for serious inquiry concerning the
satisfactory compliance with the Board requirements by the respondents. The unusually high scores
in the two most difficult subjects was phenomenal, according to Fr. Nebres, the consultant of PRC on
the matter, and raised grave doubts about the integrity, if not validity, of the tests. These doubts have
to be appropriately resolved.

Under the second paragraph of Section 22, the Board is vested with the power to conduct
administrative investigations and "disapprove applications for examination or registration," pursuant to
the objectives of Rep. Act No. 2382 as outlined in Section 126 thereof. In this case, after the
investigation, the Board filed before the PRC, Adm. Case No. 1687 against the respondents to
ascertain their moral and mental fitness to practice medicine, as required by Section 9 27 of Rep. Act
No. 2382. In its Decision dated July 1, 1997, the Board ruled:

WHEREFORE, the BOARD hereby CANCELS the respondents[’] examination papers in the
Physician Licensure Examinations given in February 1993 and further DEBARS them from
taking any licensure examination for a period of ONE (1) YEAR from the date of the
promulgation of this DECISION. They may, if they so desire, apply for the scheduled
examinations for physicians after the lapse of the period imposed by the BOARD.

SO ORDERED.28

Until the moral and mental fitness of the respondents could be ascertained, according to petitioners,
the Board has discretion to hold in abeyance the administration of the Hippocratic Oath and the
issuance of the certificates to them. The writ of mandamus does not lie to compel performance of an
act which is not duly authorized.

The respondents nevertheless argue that under Section 20, the Board shall not issue a certificate of
registration only in the following instances: (1) to any candidate who has been convicted by a court of
competent jurisdiction of any criminal offense involving moral turpitude; (2) or has been found guilty of
immoral or dishonorable conduct after the investigation by the Board; or (3) has been declared to be
of unsound mind. They aver that none of these circumstances are present in their case.

Petitioners reject respondents’ argument. We are informed that in Board Resolution No. 26,29 dated
July 21, 1993, the Board resolved to file charges against the examinees from Fatima College of
Medicine for "immorality, dishonesty, fraud, and deceit in the Obstetrics-Gynecology and Biochemistry
examinations." It likewise sought to cancel the examination results obtained by the examinees from
the Fatima College.

Section 830 of Rep. Act No. 2382 prescribes, among others, that a person who aspires to practice
medicine in the Philippines, must have "satisfactorily passed the corresponding Board Examination."
Section 22, in turn, provides that the oath may only be administered "to physicians who qualified in
the examinations." The operative word here is "satisfactorily," defined as "sufficient to meet a condition
or obligation" or "capable of dispelling doubt or ignorance."31 Gleaned from Board Resolution No. 26,
the licensing authority apparently did not find that the respondents "satisfactorily passed" the licensure
examinations. The Board instead sought to nullify the examination results obtained by the
respondents.

2. On the Right Of The Respondents To Be Registered As Physicians

The function of mandamus is not to establish a right but to enforce one that has been established by
law. If no legal right has been violated, there can be no application of a legal remedy, and the writ of
mandamus is a legal remedy for a legal right.32 There must be a well-defined, clear and certain legal
right to the thing demanded.33 It is long established rule that a license to practice medicine is a privilege
or franchise granted by the government.34

It is true that this Court has upheld the constitutional right35 of every citizen to select a profession or
course of study subject to a fair, reasonable, and equitable admission and academic
requirements.36 But like all rights and freedoms guaranteed by the Charter, their exercise may be so
regulated pursuant to the police power of the State to safeguard health, morals, peace, education,
order, safety, and general welfare of the people.37 Thus, persons who desire to engage in the learned
professions requiring scientific or technical knowledge may be required to take an examination as a
prerequisite to engaging in their chosen careers. This regulation takes particular pertinence in the field
of medicine, to protect the public from the potentially deadly effects of incompetence and ignorance
among those who would practice medicine. In a previous case, it may be recalled, this Court has
ordered the Board of Medical Examiners to annul both its resolution and certificate authorizing a
Spanish subject, with the degree of Licentiate in Medicine and Surgery from the University of
Barcelona, Spain, to practice medicine in the Philippines, without first passing the examination
required by the Philippine Medical Act.38 In another case worth noting, we upheld the power of the
State to upgrade the selection of applicants into medical schools through admission tests.39

It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit of
an occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or oppressive
manner. A political body that regulates the exercise of a particular privilege has the authority to both
forbid and grant such privilege in accordance with certain conditions. Such conditions may not,
however, require giving up ones constitutional rights as a condition to acquiring the license.40 Under
the view that the legislature cannot validly bestow an arbitrary power to grant or refuse a license on a
public agency or officer, courts will generally strike down license legislation that vests in public officials
discretion to grant or refuse a license to carry on some ordinarily lawful business, profession, or activity
without prescribing definite rules and conditions for the guidance of said officials in the exercise of
their power.41
In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as amended,
which prescribes the requirements for admission to the practice of medicine, the qualifications of
candidates for the board examinations, the scope and conduct of the examinations, the grounds for
denying the issuance of a physician’s license, or revoking a license that has been issued. Verily, to be
granted the privilege to practice medicine, the applicant must show that he possesses all the
qualifications and none of the disqualifications. Furthermore, it must appear that he has fully complied
with all the conditions and requirements imposed by the law and the licensing authority. Should doubt
taint or mar the compliance as being less than satisfactory, then the privilege will not issue. For said
privilege is distinguishable from a matter of right, which may be demanded if denied. Thus, without a
definite showing that the aforesaid requirements and conditions have been satisfactorily met, the
courts may not grant the writ of mandamus to secure said privilege without thwarting the legislative
will.

3. On the Ripeness of the Petition for Mandamus

Lastly, the petitioners herein contend that the Court of Appeals should have dismissed the petition for
mandamus below for being premature. They argue that the administrative remedies had not been
exhausted. The records show that this is not the first time that petitioners have sought the dismissal
of Civil Case No. 93-66530. This issue was raised in G.R. No. 115704, which petition we referred to
the Court of Appeals, where it was docketed as CA-G.R. SP No. 34506. On motion for reconsideration
in CA-G.R. SP No. 34506, the appellate court denied the motion to dismiss on the ground that the
prayers for the nullification of the order of the trial court and the dismissal of Civil Case No. 93-66530
were inconsistent reliefs. In G.R. No. 118437, the petitioners sought to nullify the decision of the Court
of Appeals in CA-G.R. SP No. 34506 insofar as it did not order the dismissal of Civil Case No. 93-
66530. In our consolidated decision, dated July 9, 1998, in G.R. Nos. 117817 & 118437, this Court
speaking through Justice Bellosillo opined that:

Indeed, the issue as to whether the Court of Appeals erred in not ordering the dismissal of
Civil Case No. 93-66530 sought to be resolved in the instant petition has been rendered
meaningless by an event taking place prior to the filing of this petition and denial thereof should
follow as a logical consequence.42 There is no longer any justiciable controversy so that any
declaration thereon would be of no practical use or value.43 It should be recalled that in its
decision of 19 December 1994 the trial court granted the writ of mandamus prayed for by
private respondents, which decision was received by petitioners on 20 December 1994. Three
(3) days after, or on 23 December 1994, petitioners filed the instant petition. By then, the
remedy available to them was to appeal the decision to the Court of Appeals, which they in
fact did, by filing a notice of appeal on 26 December 1994.44

The petitioners have shown no cogent reason for us to reverse the aforecited ruling. Nor will their
reliance upon the doctrine of the exhaustion of administrative remedies in the instant case advance
their cause any.

Section 2645 of the Medical Act of 1959 provides for the administrative and judicial remedies that
respondents herein can avail to question Resolution No. 26 of the Board of Medicine, namely: (a)
appeal the unfavorable judgment to the PRC; (b) should the PRC ruling still be unfavorable, to elevate
the matter on appeal to the Office of the President; and (c) should they still be unsatisfied, to ask for a
review of the case or to bring the case to court via a special civil action of certiorari. Thus, as a rule,
mandamus will not lie when administrative remedies are still available.46 However, the doctrine of
exhaustion of administrative remedies does not apply where, as in this case, a pure question of law is
raised.47 On this issue, no reversible error may, thus, be laid at the door of the appellate court in CA-
G.R. SP No. 37283, when it refused to dismiss Civil Case No. 93-66530.
As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando F. Mandapat, Ophelia C.
Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma.
Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S.
Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo,
Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert
B. Sanchez, Maria Rosario Leonor-Lacandula, Geraldine Elizabeth M. Pagilagan-Palma, Margarita
Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-
Ocampo, and Jose Ramoncito P. Navarro manifested to the Court of Appeals during the pendency of
CA-G.R. SP No. 37283, that they were no longer interested in proceeding with the case and moved
for its dismissal insofar as they were concerned. A similar manifestation and motion were later filed by
intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A. Salvador,
Belinda C. Rabarra, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S.
Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco,
Violeta V. Meneses, Melita J. Cañedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D.
Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. Following these
manifestations and motions, the appellate court in CA-G.R. SP No. 37283 decreed that its ruling would
not apply to them. Thus, inasmuch as the instant case is a petition for review of the appellate court’s
ruling in CA-G.R. SP No. 37283, a decision which is inapplicable to the aforementioned respondents
will similarly not apply to them.

As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B. Ancheta, Oscar H. Padua,
Jr., Evelyn D. Grajo, Valentino P. Arboleda, Carlos M. Bernardo, Jr., Mario D. Cuaresma, Violeta C.
Felipe, Percival H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision shall not
apply pursuant to the Orders of the trial court in Civil Case No. 93-66530, dropping their names from
the suit.

Consequently, this Decision is binding only on the remaining respondents, namely: Arlene V. de
Guzman, Celerina S. Navarro, Rafael I. Tolentino, Bernardita B. Sy, Gloria T. Jularbal, Hubert S.
Nazareno, Nancy J. Chavez, Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M.
Lacsamana and Merly D. Sta. Ana, as well as the petitioners.

WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the assailed decision dated May 16,
2000, of the Court of Appeals, in CA-G.R. SP No. 37283, which affirmed the judgment dated December
19, 1994, of the Regional Trial Court of Manila, Branch 52, in Civil Case No. 93-66530, ordering
petitioners to administer the physician’s oath to herein respondents as well as the resolution dated
August 25, 2000, of the appellate court, denying the petitioners’ motion for reconsideration, are
REVERSED and SET ASIDE; and (2) the writ of mandamus, issued in Civil Case No. 93-66530, and
affirmed by the appellate court in CA-G.R. SP No. 37283 is NULLIFIED AND SET ASIDE.

G.R. Nos. 156556-57 October 4, 2011

ENRIQUE U. BETOY, Petitioner,

vs.
THE BOARD OF DIRECTORS, NATIONAL POWER CORPORATION, Respondent.

DECISION

PERALTA, J.:

Before this Court is a special civil action for certiorari1 and supplemental petition
for mandamus,2 specifically assailing National Power Board Resolutions No. 2002-124 and No. 2002-
125, as well as Sections 11, 34, 38, 48, 52 and 63 of Republic Act (R.A.) No. 9136, otherwise known
as the Electric Power Industry Reform Act of 2001 (EPIRA). Also assailed is Rule 33 of the
Implementing Rules and Regulations (IRR) of the EPIRA.

The facts of the case are as follows:

On June 8, 2001, the EPIRA was enacted by Congress with the goal of restructuring the electric power
industry and privatization of the assets of the National Power Corporation (NPC).

Pursuant to Section 483 of the EPIRA, a new National Power Board of Directors (NPB) was created.
On February 27, 2002, pursuant to Section 774 of the EPIRA, the Secretary of the Department of
Energy promulgated the IRR.

On the other hand, Section 63 of the EPIRA provides for separation benefits to officials and employees
who would be affected by the restructuring of the electric power industry and the privatization of the
assets of the NPC, to wit:

Section 63. Separation Benefits of Officials and Employees of Affected Agencies. - National
Government employees displaced or separated from the service as a result of the restructuring
of the electricity industry and privatization of NPC assets pursuant to this Act, shall be entitled
to either a separation pay and other benefits in accordance with existing laws, rules or
regulations or be entitled to avail of the privileges provided under a separation plan which shall
be one and one-half month salary for every year of service in the government: Provided,
however, That those who avail of such privileges shall start their government service anew if absorbed
by any government-owned successor company. In no case shall there be any diminution of benefits
under the separation plan until the full implementation of the restructuring and privatization.

Displaced or separated personnel as a result of the privatization, if qualified, shall be given preference
in the hiring of the manpower requirements of the privatized companies. x x x5

Rule 336 of the IRR provided for the coverage and the guidelines for

the separation benefits to be given to the employees affected.

On November 18, 2002, pursuant to Section 63 of the EPIRA and Rule 33 of the IRR, the NPB passed
NPB Resolution No. 2002-1247 which, among others, resolved that all NPC personnel shall be legally
terminated on January 31, 2003 and shall be entitled to separation benefits. On the same day, the
NPB passed NPB Resolution No. 2002-1258 which created a transition team to manage and
implement the separation program.

As a result of the foregoing NPB Resolutions, petitioner Enrique U. Betoy, together with thousands of
his co-employees from the NPC were terminated.

Hence, herein petition for certiorari with petitioner praying for the grant of the following reliefs from this
Court, to wit:

1. Declaring National Power Board Resolution Nos. 2002-124 and 2002-125 and its Annex "B"
Null and Void, the fact [that] it was done with extraordinary haste and in secrecy without the
able participation of the Napocor Employees Consolidated Union (NECU) to represent all
career civil service employees on issues affecting their rights to due process, equity, security
of tenure, social benefits accrued to them, and as well as the disclosure of public transaction
provisions of the 1987 Constitution because during its proceeding the National Power Board
 had acted with grave abuse of discretion and disregarding constitutional and statutory
injunctions on removal of public servants and non-diminution of social benefits accrued to
separated employees, thus, amounting to excess of jurisdiction;

2. Striking down Section 11, Section 48 and Section 52 of RA 9136 (EPIRA) for being violative
of Section 13, Article VII of the 1987 Constitution and, therefore, unconstitutional;

3. Striking Section 34 of RA 9136 (EPIRA) for being exorbitant display of State Power and was
not premised on the welfare of the FILIPINO PEOPLE or principle of salus populi est
suprema lex;

4. Striking down Section 38 for RA 9136 (EPIRA) for being a prelude to Charter
Change without a valid referendum for ratification of the entire voter citizens of the Philippine
Republic;

5. Striking down all other provisions of RA 9136 (EPIRA) found repugnant to the 1987
Constitution;

6. Striking down all provisions of the Implementing Rules and Regulations (IRR) of the EPIRA
found repugnant to the 1987 Constitution;

7. Striking down Section 63 of RA 9136 (EPIRA) for classifying such provisions in the same
vein with Proclamation No. 50 used against MWSS employees and its failure to classify which
condition comes first whether the restructuring effecting total reorganization of the electric
power industry making NPC financially viable or the privatization of NPC assets where
manpower reduction or sweeping/lay-off or termination of career civil service employees
follows the disposal of NPC assets. This is a clear case of violation of the EQUAL
PROTECTION CLAUSE, therefore, unconstitutional;

8. Striking down Rule 33 of the Implementing Rules [and] Regulations (IRR) for disregarding
the constitutional and statutory injunction on arbitrary removal of career civil service
employees; and

9. For such other reliefs deemed equitable with justice and fairness to more than EIGHT
THOUSAND (8,000) EMPLOYEES of the National Power Corporation (NPC) whose fate lies
in the sound disposition of the Honorable Supreme Court.9

In addition, petitioner also filed a supplemental petition for mandamus praying for his reinstatement.

The petition is without merit.

Before anything else, this Court shall first tackle whether it was proper for petitioner to directly question
the constitutionality of the EPIRA before this Court.

Section 5(1) and (2), Article VIII of the 1987 Constitution provides that:

SECTION 5. The Supreme Court shall have the following powers:

1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and
consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus.
 2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of
court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement,
law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.10

Based on the foregoing, this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo
warranto, and habeas corpus, while concurrent with that of the Regional Trial Courts and the Court of
Appeals, does not give litigants unrestrained freedom of choice of forum from which to seek such
relief.11 The determination of whether the assailed law and its implementing rules and regulations
contravene the Constitution is within the jurisdiction of regular courts. The Constitution vests the power
of judicial review or the power to declare a law, treaty, international or executive agreement,
presidential decree, order, instruction, ordinance, or regulation in the courts, including the Regional
Trial Courts.12

It has long been established that this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, or where exceptional and compelling
circumstances justify availment of a remedy within and call for the exercise of our primary
jurisdiction.13 Thus, herein petition should already be dismissed at the outset; however, since similar
petitions have already been resolved by this Court tackling the validity of NPB Resolutions No. 2002-
124 and No. 2002-125, as well as the constitutionality of certain provisions of the EPIRA, this Court
shall disregard the procedural defect.

Validity of NPB Resolutions No. 2002-124 and No. 2002-125

The main issue raised by petitioner deals with the validity of NPB Resolutions No. 2002-124 and No.
2002-125.

In NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC),14 this
Court had already ruled that NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no
legal effect.

NPC Drivers involved a special civil action for Injunction seeking to enjoin the implementation of the
same assailed NPB Resolutions. Petitioners therein put in issue the fact that the NPB Resolutions
were not concluded by a duly constituted Board of Directors since no quorum in accordance with
Section 48 of the EPIRA existed. In addition, petitioners therein argued that the assailed NPB
Resolutions cannot be given legal effect as it failed to comply with Section 47 of the EPIRA which
required the endorsement of the Joint Congressional Power Commission and the President of the
Philippines. Ruling in favor of petitioners therein, this Court ruled that NPB Resolutions No. 2002-124
and No. 2002-125 are void and of no legal effect for failure to comply with Section 48 of the EPIRA, to
wit:

We agree with petitioners. In enumerating under Section 48 those who shall compose the National
Power Board of Directors, the legislature has vested upon these persons the power to exercise their
judgment and discretion in running the affairs of the NPC. Discretion may be defined as "the act or the
liberty to decide according to the principles of justice and one’s ideas of what is right and proper under
the circumstances, without willfulness or favor. Discretion, when applied to public functionaries, means
a power or right conferred upon them by law of acting officially in certain circumstances, according to
the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of
others. It is to be presumed that in naming the respective department heads as members of the board
of directors, the legislature chose these secretaries of the various executive departments on the basis
of their personal qualifications and acumen which made them eligible to occupy their present positions
as department heads. Thus, the department secretaries cannot delegate their duties as members of
the NPB, much less their power to vote and approve board resolutions, because it is their personal
judgment that must be exercised in the fulfilment of such responsibility.

xxxx

In the case at bar, it is not difficult to comprehend that in approving NPB Resolutions No. 2002-124
and No. 2002-125, it is the representatives of the secretaries of the different executive departments
and not the secretaries themselves who exercised judgment in passing the assailed Resolution, as
shown by the fact that it is the signatures of the respective representatives that are affixed to the
questioned Resolutions. This, to our mind, violates the duty imposed upon the specifically enumerated
department heads to employ their own sound discretion in exercising the corporate powers of the
NPC. Evidently, the votes cast by these mere representatives in favor of the adoption of the said
Resolutions must not be considered in determining whether or not the necessary number of votes was
garnered in order that the assailed Resolutions may be validly enacted. Hence, there being only three
valid votes cast out of the nine board members, namely those of DOE Secretary Vincent S. Perez, Jr.;
Department of Budget and Management Secretary Emilia T. Boncodin; and NPC OIC-President
Rolando S. Quilala, NPB Resolutions No. 2002-124 and No. 2002-125 are void and are of no legal
effect.15

However, a supervening event occurred in NPC Drivers when it was brought to this Court's attention
that NPB Resolution No. 2007-55 was promulgated on September 14, 2007 confirming and adopting
the principles and guidelines enunciated in NPB Resolutions No. 2002-124 and No. 2002-125.

On December 2, 2009, this Court promulgated a Resolution16 clarifying the amount due the individual
employees of NPC in view of NPB Resolution No. 2007-55. In said Resolution, this Court clarified the
exact date of the legal termination of each class of NPC employees, thus:

From all these, it is clear that our ruling, pursuant to NPB Resolution No. 2002-124, covers all
employees of the NPC and not only the 16 employees as contended by the NPC. However, as regards
their right to reinstatement, or separation pay in lieu of reinstatement, pursuant to a validly approved
Separation Program, plus backwages, wage adjustments, and other benefits, the same shall be
computed from the date of legal termination as stated in NPC Circular No. 2003-09, to wit:

a) The legal termination of key officials, i.e., the Corporate Secretary, Vice-Presidents and
Senior Vice-Presidents who were appointed under NP Board Resolution No. 2003-12, shall
be at the close of office hours of January 31, 2003.

b) The legal termination of personnel who availed of the early leavers' scheme shall be on the
last day of service in NPC but not beyond January 15, 2003.

c) The legal termination of personnel who were no longer employed in NPC after June 26,
2001 shall be the date of actual separation in NPC.

d) For all other NPC personnel, their legal termination shall be at the close of office hours/shift
schedule of February 28, 2003.17

As to the validity of NPB Resolution No. 2007-55, this Court ruled that the same will have a prospective
effect, to wit:
What then is the effect of the approval of NPB Resolution No. 2007-55 on 14 September 2007? The
approval of NPB Resolution No. 2007-55, supposedly by a majority of the National Power Board as
designated by law, that adopted, confirmed and approved the contents of NPB Resolutions No. 2002-
124 and No. 2002-125 will have a prospective effect, not a retroactive effect. The approval of NPB
Resolution No. 2007-55 cannot ratify and validate NPB Resolutions No. 2002-124 and No. 2002-125
as to make the termination of the services of all NPC personnel/employees on 31 January 2003 valid,
because said resolutions were void.

The approval of NPB Resolution No. 2007-55 on 14 September 2007 means that the services of all
NPC employees have been legally terminated on this date. All separation pay and other benefits to be
received by said employees will be deemed cut on this date. The computation thereof shall, therefore,
be from the date of their illegal termination pursuant to NPB Resolutions No. 2002-124 and No. 2002-
125 as clarified by NPB Resolution No. 2003-11 and NPC Resolution No. 2003-09 up to 14 September
2007. Although the validity of NPB Resolution No. 2007-55 has not yet been passed upon by the
Court, same has to be given effect because NPB Resolution No. 2007-55 enjoys the presumption of
regularity of official acts. The presumption of regularity of official acts may be rebutted by affirmative
evidence of irregularity or failure to perform a duty. Thus, until and unless there is clear and convincing
evidence that rebuts this presumption, we have no option but to rule that said resolution is valid and
effective as of 14 September 2007.18

Based on the foregoing, this Court concluded that the computation of the amounts due the employees
who were terminated and/or separated as a result of, or pursuant to, the nullified NPB Board
Resolutions No. 2002-124 and No. 2002-125 shall be from their date of illegal termination up to
September 14, 2007 when NPB Resolution No. 2007-55 was issued.

Thus, the resolution of the validity of NPB Board Resolutions No. 2002-124 and No. 2002-125 is,
therefore, moot and academic in view of the Court's pronouncements in NPC Drivers.

Anent the question of the constitutionality of Section 63 of RA 9136, as well as Rule 33 of the IRR, this
Court finds that the same is without merit.

A reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by

reason of economy or redundancy of functions.19 It could result in the loss of one’s position through
removal or abolition of an office. However, for a reorganization for the purpose of economy or to make
the bureaucracy more efficient to be valid, it must pass the test of good faith; otherwise, it is void ab
initio.20

It is undisputed that NPC was in financial distress and the solution found by Congress was to pursue
a policy towards its privatization. The privatization of NPC necessarily demanded the restructuring of
its operations. To carry out the purpose, there was a need to terminate employees and re-hire some
depending on the manpower requirements of the privatized companies. The privatization and
restructuring of the NPC was, therefore, done in good faith as its primary purpose was for economy
and to make the bureaucracy more efficient.

In Freedom from Debt Coalition v. Energy Regulatory Commission,21 this Court discussed why there
was a need for a shift towards the privatization and restructuring of the electric power industry, to wit:

One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It
established a new policy, legal structure and regulatory framework for the electric power industry.

The new thrust is to tap private capital for the expansion and improvement of the industry as the large
government debt and the highly capital-intensive character of the industry itself have long been
acknowledged as the critical constraints to the program. To attract private investment, largely foreign,
the jaded structure of the industry had to be addressed. While the generation and transmission sectors
were centralized and monopolistic, the distribution side was fragmented with over 130 utilities, mostly
small and uneconomic. The pervasive flaws have caused a low utilization of existing generation
capacity; extremely high and uncompetitive power rates; poor quality of service to consumers; dismal
to forgettable performance of the government power sector; high system losses; and an inability to
develop a clear strategy for overcoming these shortcomings.

Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization
of the assets of the National Power Corporation (NPC), the transition to a competitive structure, and
the delineation of the roles of various government agencies and the private entities. The law ordains
the division of the industry into four (4) distinct sectors, namely: generation, transmission, distribution
and supply. Corollarily, the NPC generating plants have to be privatized and its transmission business
spun off and privatized thereafter.22

Petitioner argues that bad faith is clearly manifested as the reorganization has an eye to replace
current favorite less competent appointees. In addition, petitioner contends that qualifications and
behavioral aspect were being set aside.23

Section 2 of R.A. No. 665624 cites certain circumstances showing bad faith in the removal of employees
as a result of any reorganization, thus:

Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and
after due notice and hearing. A valid cause for removal exist when, pursuant to a bona fide
reorganization, a position has been abolished or rendered redundant or there is a need to merge,
divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes
allowed by the Civil Service Law. The existence of any or some of the following circumstances may
be considered as evidence of bad faith in the removals made as a result of the reorganization, giving
rise to a claim for reinstatement or reappointment by an aggrieved party:

a) Where there is a significant increase in the number of positions in the new staffing pattern
of the department or agency concerned;

b) Where an office is abolished and another performing substantially the same functions is
created;

c) Where incumbents are replaced by those less qualified in terms of status of appointment,
performance and merit;

d) Where there is a reclassification of offices in the department or agency concerned and the
reclassified offices perform substantially the same functions as the original offices; and

e) Where the removal violates the order of separation provided in Section 3 hereof.

The Solicitor General, however, argues that petitioner has not shown any circumstance to prove that
the restructuring of NPC was done in bad faith. We agree.

Petitioner's allegation that the reorganization was merely undertaken to accommodate new appointees
is at most speculative and bereft of any evidence on record. It is settled that bad faith must be duly
proved and not merely presumed. It must be proved by clear and convincing evidence,25 which is
absent in the case at bar.
In addition, petitioner has no legal or vested right to be reinstated as Section 63 of the EPIRA as well
as Section 5, Rule 33 of the IRR clearly state that the displaced or separated personnel as a result of
the privatization, if qualified, shall be given preference in the hiring of the manpower requirements of
the privatized companies. Clearly, the law only speaks of preference and by no stretch of the
imagination can the same amount to a legal right to the position. Undoubtedly, not all the terminated
employees will be re-hired by the selection committee as the manpower requirement of the privatized
companies will be different. As correctly observed by the Solicitor General, the selection of employees
for purposes of re-hiring them necessarily entails the exercise of discretion or judgment.26 Such being
the case, petitioner, cannot, by way of mandamus, compel the selection committee to include him in
the re-hired employees, more so, since there is no evidence showing that said committee acted with
grave abuse of discretion or that the re-hired employees were merely accommodated and not qualified.

Validity of Sections 11, 48, and 52 of RA 9136

Petitioner argues that Sections 11,27 48,28 and 5229 of the EPIRA are unconstitutional for violating
Section 13, Article VII of the 1987 Constitution.

Section 13, Article VII of the 1987 Constitution provides:

Sec. 13. The President, Vice-President, the Members of the Cabinet, and their deputies or
assistants shall not, unless otherwise provided in this Constitution, hold any other office or
employment during their tenure. They shall not, during said tenure, directly or indirectly practice any
other profession, participate in any business, or be financially interested in any contract with, or in any
franchise, or special privilege granted by the Government or any subdivision, agency, or
instrumentality thereof, including government-owned or controlled corporations or their subsidiaries.
They shall strictly avoid conflict of interest in the conduct of their office.

x x x x.30

In Civil Liberties Union v. Executive Secretary,31 this Court explained that the prohibition contained in
Section 13, Article VII of the 1987 Constitution does not apply to posts occupied by the Executive
officials specified therein without additional compensation in an ex-officio capacity as provided by law
and as required by the primary function of said official's office, to wit:

The prohibition against holding dual or multiple offices or employment under Section 13, Article VII of
the Constitution must not, however, be construed as applying to posts occupied by the Executive
officials specified therein without additional compensation in an ex-officio capacity as provided by law
and as required by the primary functions of said officials' office. The reason is that these posts do not
comprise "any other office" within the contemplation of the constitutional prohibition but are properly
an imposition of additional duties and functions on said officials. To characterize these posts otherwise
would lead to absurd consequences, among which are: The President of the Philippines cannot chair
the National Security Council reorganized under Executive Order No. 115 (December 24, 1986).
Neither can the Vice-President, the Executive Secretary, and the Secretaries of National Defence,
Justice, Labor and Employment and Local Government sit in this Council, which would then have no
reason to exist for lack of a chairperson and members. The respective undersecretaries and assistant
secretaries, would also be prohibited.

xxxx

The term "primary" used to describe "functions" refers to the order of importance and thus means chief
or principal function. The term is not restricted to the singular but may refer to the plural. The additional
duties must not only be closely related to, but must be required by the official's primary functions.
Examples of designations to positions by virtue of one's primary functions are the Secretaries of
Finance and Budget, sitting as members of the Monetary Board, and the Secretary of Transportation
and Communications, acting as Chairman of the Maritime Industry Authority and the Civil Aeronautics
Board.32

The designation of the members of the Cabinet to form the NPB does not violate the prohibition
contained in our Constitution as the privatization and restructuring of the electric power industry
involves the close coordination and policy determination of various government agencies. Section 2
of the EPIRA clearly shows that the policy toward privatization would involve financial, budgetary and
environmental concerns as well as coordination with local government units, to wit:

SECTION 2. Declaration of Policy. – It is hereby declared the policy of the State:

(a) To ensure and accelerate the total electrification of the country;

(b) To ensure the quality, reliability, security and affordability of the supply of electric power;

(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair
competition and full public accountability to achieve greater operational and economic
efficiency and enhance the competitiveness of Philippine products in the global market;

(d) To enhance the inflow of private capital and broaden the ownership base of the power
generation, transmission and distribution sectors;

(e) To ensure fair and non-discriminatory treatment of public and private sector entities

in the process of restructuring the electric power industry;

(f) To protect the public interest as it is affected by the rates and services of electric utilities
and other providers of electric power;

(g) To assure socially and environmentally compatible energy sources and infrastructure;

(h) To promote the utilization of indigenous and new and renewable energy resources in power
generation in order to reduce dependence on imported energy;

(i) To provide for an orderly and transparent privatization of the assets and liabilities of the
National Power Corporation (NPC);

(j) To establish a strong and purely independent regulatory body and system to ensure
consumer protection and enhance the competitive operation of the electricity market; and

(k) To encourage the efficient use of energy and other modalities of demand side
management.

As can be gleaned from the foregoing enumeration, the restructuring of the electric power industry
inherently involves the participation of various government agencies. In Civil Liberties, this Court
explained that mandating additional duties and functions to Cabinet members which are not
inconsistent with those already prescribed by their offices or appointments by virtue of their special
knowledge, expertise and skill in their respective executive offices, is a practice long-recognized in
many jurisdictions. It is a practice justified by the demands of efficiency, policy direction, continuity and
coordination among the different offices in the Executive Branch in the discharge of its multifarious
tasks of executing and implementing laws affecting national interest and general welfare and delivering
basic services to the people.33

The production and supply of energy is undoubtedly one of national interest and is a basic commodity
expected by the people. This Court, therefore, finds the designation of the respective members of the
Cabinet, as ex-officio members of the NPB, valid.

This Court is not unmindful, however, that Section 48 of the EPIRA is not categorical in proclaiming
that the concerned Cabinet secretaries compose the NPB Board only in an ex-officio capacity. It is
only in Section 52 creating the Power Sector Assets and Liabilities Management Corporation (PSALM)
that they are so designated in an ex-officio capacity. Sections 4 and 6 of the EPIRA provides:

Section 4. TRANSCO Board of Directors.

All the powers of the TRANSCO shall be vested in and exercised by a Board of Directors. The Board
shall be composed of a Chairman and six (6) members. The Secretary of the DOF shall be the ex-
officio Chairman of the Board. The other members of the TRANSCO Board shall include the Secretary
of the DOE, the Secretary of the DENR, the President of TRANSCO, and three (3) members to be
appointed by the President of the Philippines, each representing Luzon, Visayas and Mindanao, one
of whom shall be the President of PSALM.

x x x x.

Section 6. PSALM Board of Directors.

PSALM shall be administered, and its powers and functions exercised, by a Board of Directors which
shall be composed of the Secretary of the DOF as the Chairman, and the Secretary of the DOE, the
Secretary of the DBM, the Director-General of the NEDA, the Secretary of the DOJ, the Secretary of
the DTI and the President of the PSALM as ex-officio members thereof.

Nonetheless, this Court agrees with the contention of the Solicitor General that the constitutional
prohibition was not violated, considering that the concerned Cabinet secretaries were merely imposed
additional duties and their posts in the NPB do not constitute "any other office" within the contemplation
of the constitutional prohibition.

The delegation of the said official to the respective Board of Directors were designation by Congress
of additional functions and duties to the officials concerned, i.e., they were designated as members of
the Board of Directors. Designation connotes an imposition of additional duties, usually by law, upon
a person already in the public service by virtue of an earlier appointment.34 Designation does not entail
payment of additional benefits or grant upon the person so designated the right to claim the salary
attached to the position. Without an appointment, a designation does not entitle the officer to receive
the salary of the position. The legal basis of an employee's right to claim the salary attached thereto
is a duly issued and approved appointment to the position, and not a mere designation.35

Hence, Congress specifically intended that the position of member of the Board of NPB shall be ex-
officio or automatically attached to the respective offices of the members composing the board. It is
clear from the wordings of the law that it was the intention of Congress that the subject posts will be
adjunct to the respective offices of the official designated to such posts.
The foregoing discussion, notwithstanding, the concerned officials should not receive any additional
compensation pursuant to their designation as ruled in Civil Liberties, thus:

The ex-officio position being actually and in legal contemplation part of the principal office, it follows
that the official concerned has no right to receive additional compensation for his services in the said
position. The reason is that these services are already paid for and covered by the compensation
attached to his principal office. It should be obvious that if, say, the Secretary of Finance attends a
meeting of the Monetary Board as an ex-officio member thereof, he is actually and in legal
contemplation performing the primary function of his principal office in defining policy in monetary and
banking matters, which come under the jurisdiction of his department. For such attendance, therefore,
he is not entitled to collect any extra compensation, whether it be in the form of a per diem or an
honorarium or an allowance, or some other such euphemism. By whatever name it is designated, such
additional compensation is prohibited by the Constitution.

In relation thereto, Section 14 of the EPIRA provides:

SEC. 14. Board Per Diems and Allowances. – The members of the Board shall receive per diem for
each regular or special meeting of the board actually attended by them and, upon approval of the
Secretary of the Department of Finance, such other allowances as the Board may prescribe.

Section 14 relates to Section 11 which sets the composition of the TRANSCO Board naming the
Secretary of the Department of Finance as the ex officio Chairman of the Board. The other members
of the TRANSCO Board include the Secretary of the Department of Energy and the Secretary of the
Department of Environment and Natural Resources. However, considering the constitutional
prohibition, it is clear that such emoluments or additional compensation to be received by the members
of the NPB do not apply and should not be received by those covered by the constitutional prohibition,
i.e., the Cabinet secretaries. It is to be noted that three of the members of the NPB are to be appointed
by the President, who would be representing the interests of those in Luzon, Visayas, and Mindanao,
who may be entitled to such honorarium or allowance if they do not fall within the constitutional
prohibition.

Hence, the said cabinet officials cannot receive any form of additional compensation by way of per
diems and allowances. Moreover, any amount received by them in their capacity as members of the
Board of Directors should be reimbursed to the government, since they are prohibited from collecting
additional compensation by the Constitution.

These interpretations are consistent with the fundamental rule of statutory construction that a statute
is to be read in a manner that would breathe life into it, rather than defeat it,36 and is supported by the
criteria in cases of this nature that all reasonable doubts should be resolved in favor of the
constitutionality of a statute.37

Constitutionality of Section 3438 of the EPIRA

The Constitutionality of Section 34 of the EPIRA has already been passed upon by this Court
in Gerochi v. Department of Energy,39 to wit:

Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification,
there must be a clear and unequivocal breach of the Constitution and not one that is doubtful,
speculative, or argumentative. Indubitably, petitioners failed to overcome this presumption in favor of
the EPIRA. We find no clear violation of the Constitution which would warrant a pronouncement that
Sec. 34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.40
In Gerochi, this Court ruled that the Universal Charge is not a tax but an exaction in the exercise of
the State's police power. The Universal Charge is imposed to ensure the viability of the country's
electric power industry.

Petitioner argues that the imposition of a universal charge to address the stranded debts and contract
made by the government through the NCC-IPP contracts or Power Utility-IPP contracts or simply the
bilateral agreements or contracts is an added burden to the electricity-consuming public on their
monthly power bills. It would mean that the electricity-consuming public will suffer in carrying this
burden for the errors committed by those in power who runs the affairs of the State. This is an
exorbitant display of State Power at the expense of its people.41

It is basic that the determination of whether or not a tax is excessive oppressive or confiscatory is an
issue which essentially involves a question of fact and, thus, this Court is precluded from reviewing
the same.

Validity of Section 3842 of the EPIRA

Petitioner argues that the abolishment of the ERB and its replacement of a very powerful quasi-judicial
body named the Energy Regulatory Commission (ERC), pursuant to Section 38 up to Section 43 of
the EPIRA or RA 9136, which is tasked to dictate the day-to-day affairs of the entire electric power
industry, seems a prelude to Charter Change. Petitioner submits that under the 1987 Constitution,
there are only three constitutionally-recognized Commissions, they are: the Civil Service Commission
(CSC), the Commission on Audit (COA) and the Commission on Elections (COMELEC).43

Petitioner’s argument that the creation of the ERC seems to be a prelude to charter change is flimsy
and finds no support in law. This Court cannot subscribe to petitioner’s thesis that "in order for the
newly-enacted RA 9136 or EPIRA to become a valid law, we should have to call first a referendum to
amend or totally change the People's Charter."44

In any case, the constitutionality of the abolition of the ERB and the creation of the ERC has already
been settled in Kapisanan ng mga Kawani ng Energy Regulatory Board v. Commissioner Fe Barin,45 to
wit:

All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a
clear and unequivocal breach of the Constitution. KERB failed to show any breach of the Constitution.

A public office is created by the Constitution or by law or by an officer or tribunal to which the power
to create the office has been delegated by the legislature. The power to create an office carries with it
the power to abolish. President Corazon C. Aquino, then exercising her legislative powers, created
the ERB by issuing Executive Order No. 172 on 8 May 1987.

The question of whether a law abolishes an office is a question of legislative intent. There should not
be any controversy if there is an explicit declaration of abolition in the law itself. Section 38 of RA 9136
explicitly abolished the ERB. x x x46

Moreover, in Kapisanan, this Court ruled that because of the expansion of the ERC's functions and
concerns, there was a valid abolition of the ERB.47

Validity of Section 6348

Contrary to petitioner's argument, Section 63 of the EPIRA and Section 33 of the IRR of the EPIRA
did not impair the vested rights of NPC personnel to claim benefits under existing laws. Neither does
the EPIRA cut short the years of service of the employees concerned. If an employee availed of the
separation pay and other benefits in accordance with existing laws or the superior separation pay
under the NPC restructuring plan, it is but logical that those who availed of such privilege will start their
government service anew if they will later be employed by any government-owned successor company
or government instrumentality.

It is to be noted that this Court ruled in the case of Herrera v. National Power Corporation,49 that
Section 63 of the EPIRA precluded the receipt by the terminated employee of both separation and
retirement benefits under the Government Service Insurance System (GSIS) organic law, or
Commonwealth Act (C.A.) No. 186.50

However, it must be clarified that this Court’s pronouncements in

Herrera that separated and retired employees of the NPC "are not entitled to receive retirement
benefits under C.A. No. 186," referred only to the gratuity benefits granted by R.A. No. 1616,51 which
was to be paid by NPC as the last employer. It did not proscribe the payment of retirement benefits to
qualified retirees under R.A. No. 660,52 Presidential Decree (P.D.) No. 1146,53 R.A. No. 8291,54 and
other GSIS and social security laws.

The factual and procedural antecedents of Herrera reveal that it arose from a case between NPC and
several of its separated employees who were asking additional benefits from NPC under R.A. No.
1616 after receiving from the former separation benefits under Section 63 of R.A. No. 9136.

Unable to resolve the issue with its former employees amicably, NPC filed a petition for declaratory
relief, docketed as Civil Case SCA No. Q-03-50681,55 before the Regional Trial Court of Quezon City,
raising the issue of whether or not the employees of NPC are entitled to receive retirement benefits
under R.A. No. 1616 over and above the separation benefits granted by R.A. No. 9136.56

Under R.A. No. 1616, a gratuity benefit is given to qualified retiring members of the GSIS, which is
payable by the last employer. In addition to said gratuity benefits, the qualified employee shall also be
entitled to a refund of retirement premiums paid, consisting of personal contributions of the employee
plus interest, and government share without interest, payable by the GSIS. It effectively amended
Section 12 (c) of C.A. No. 186, as follows:

(c) Retirement is likewise allowed to any official or employee, appointive or elective, regardless of age
and employment status, who has rendered a total of at least twenty years of service, the last three
years of which are continuous. The benefit shall, in addition to the return of his personal contributions
with interest compounded monthly and the payment of the corresponding employer's premiums
described in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to
one month's salary for every year of the first twenty years of service, plus one and one-half
months’ salary for every year of service over twenty but below thirty years and two months’
salary for every year of service over thirty years in case of employees based on the highest
rate received and in case of elected officials on the rates of pay as provided by law. This gratuity
is payable on the rates of pay as provided by law. This gratuity is payable by the employer or
officer concerned which is hereby authorized to provide the necessary appropriation or pay
the same from any unexpended items of appropriations or savings in its appropriations.
Officials and employees retired under this Act shall be entitled to the commutation of the unused
vacation and sick leave, based on the highest rate received, which they may have to their credit at the
time of retirement. x x x57 (Emphasis supplied.)
After trial, the RTC rendered a Decision ruling against the NPC employees, the decretal portion of
which reads:

WHEREFORE, premises considered, Republic Act No. 9136 DID NOT SPECIFICALLY AUTHORIZE
the National Power Corporation to grant retirement benefits under Republic Act No. 1616 in addition
to separation pay under Republic Act No. 9136.

SO ORDERED.58

Petitioners therein then sought recourse directly to this Court on a pure question of law. In the
preparatory statement of the Petition for Review on Certiorari,59 it is apparent that the case was limited
only to the interpretation of Section 63 of R.A. No. 9136, in relation to R.A. No. 1616, on the matter of
retirement benefits, to wit:

This is a case of first impression limited to the interpretation of Section 63, R.A. 9136 (EPIRA),
granting separation pay to terminated NAPOCOR employees, in relation to R.A. 1616, on the matter
of retirement benefits. Respondents NAPOCOR and DEPARTMENT OF BUDGET AND
MANAGEMENT erroneously contend that the entitlement to the separation pay under R.A. 9136
forfeits the retirement benefit under R.A. 1616. Petitioners most respectfully submit that since R.A.
9136 and R.A. 1616 are not inconsistent with each other and they have distinct noble purposes,
entitlement to separation pay will not disqualify the separated employee who is qualified to retire from
receiving retirement benefits allowed under another law. x x x60

However, in the Decision dated December 18, 2009, it was held that petitioners therein were not only
entitled to receive retirement benefits under R.A. No. 1616 but also were "not entitled to receive
retirement benefits under Commonwealth Act No. 186, as amended," which, in effect, might lead to
the conclusion that the declaration encompassed all other benefits granted by C.A. No. 186 to its
qualified members.

In relation to R.A. No. 1616, Herrera should have affected only the payment of gratuity benefits by
NPC, being the last employer, to its separated employees. It was even categorically stated that
petitioners therein were "entitled to a refund of their contributions to the retirement fund, and the
monetary value of any accumulated vacation and sick leaves,"61 which is clearly congruous to the
mandate of R.A. No. 1616. The matter of availment of retirement benefits of qualified employees under
any other law to be paid by the GSIS should not and was not covered by the decision. In the first place,
it was never an issue.

In the case of Santos v. Servier Philippines, Inc.,62 citing Aquino v. National Labor Relations
Commission,63 We declared that the receipt of retirement benefits does not bar the retiree from
receiving separation pay. Separation pay is a statutory right designed to provide the employee with
the wherewithal during the period that he/she is looking for another employment. On the other hand,
retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening
the burden of worrying about his financial support, and are a form of reward for his loyalty and service
to the employer. A separation pay is given during one’s employable years, while retirement benefits
are given during one’s unemployable years. Hence, they are not mutually exclusive.64

Even in the deliberations of Congress during the passage of R.A. No. 9136, it was manifest that it was
not the intention of the law to infringe upon the vested rights of NPC personnel to claim benefits under
existing laws. To assure the worried and uneasy NPC employees, Congress guaranteed their
entitlement to a separation pay to tide them over in the meantime.65 More importantly, to further allay
the fears of the NPC employees, especially those who were nearing retirement age, Congress
repeatedly assured them in several public and congressional hearings that on top of their separation
benefits, they would still receive their retirement benefits, as long as they would qualify and meet the
requirements for its entitlement.

The transcripts of the Public Consultative Meeting on the Power Bill held on February 16, 2001,
disclose the following:

xxxx

THE CHAIRMAN (SEN. J. OSMENA). Well, the other labor representation here is Mr. Anguluan.

MR. ANGULUAN: Yes, Your Honor.

THE CHAIRMAN (SEN. J. OSMENA). Okay. Will you present your paper?

MR. ANGULUAN: We have prepared a paper which we have sent to the honorable members of the
Bicam. x x x.

THE CHAIRMAN (SEN. J. OSMENA). I don’t think anyone is going to deprive you of your rights under
the law. You will enjoy all your rights. You will receive retirement benefits, separation pay, and all of
the rights that are provided to you by law. What we have objected to in the Senate is retirement benefits
higher than what everybody else gets, like 150 percent or subject to the approval of the board which
means sky is the limit. So, we have objected to that. But what you are entitled to under the law, you
will get under the law and nobody will deprive you of that.66

A year later, on February 12, 2002, the Joint Congressional Power Commission was held. The
transcripts of the hearing bare the following:

xxxx

THE CHAIRMAN (REP. BADELLES). They will still be subject to the same conditions. Meaning, NPC
has the discretion whether to reabsorb or hire back those that avail of the separation benefits.

SEN. OSMENA (J). No. But they are not being - - the plants are not being sold, so they are – but what
we are giving them is a special concession of retiring early.

No, okay. You consider . . .

THE CHAIRMAN (REP. BADELLES). We are not speaking of retirement here, we are speaking of
their separation benefits . . .

SEN. OSMENA (J). Okay, separation benefits.

THE CHAIRMAN (REP. BADELLES). Precisely, if they are considered terminated.

SEN. OSMENA (J). All right. Separation . . .

THE CHAIRMAN (REP. BADELLES). A retirement plan is a different program than separation.

SEN. OSMENA (J). Separation benefits, okay.

THE CHAIRMAN (REP. BADELLES). All right.67

Thus, it is clear that a separation pay at the time of the reorganization of the NPC and retirement
benefits at the appropriate future time are two separate and distinct entitlements. Stated otherwise, a
retirement plan is a different program from a separation package.

There is a whale of a difference between R.A. No. 1616 and C.A. No. 186, together with its amendatory
laws. They have different legal bases, different sources of funds and different intents.

In R.A. No. 1616, which is the subject issue in Herrera, the retirees are entitled to gratuity benefits to
be paid by the last employer and refund of premiums to be paid by the GSIS. On the other
hand, retirement benefits under C.A. No. 186, as amended by R.A. No. 8291, are to be paid by the
GSIS. Stated otherwise, under R.A. No. 1616, what would be paid by the last employer, NPC, would
be gratuity benefits, and GSIS would merely refund the retirement premiums consisting of personal
contributions of the employee plus interest, and the employer’s share without interest. Under C.A. No.
186, as amended, it is the GSIS who would pay the qualified employees their retirement benefits.

Indeed, with several amendments to C.A. No. 186,68 the Court finds it necessary to clarify Herrera and
categorically declare that it affected only those seeking benefits under R.A. No. 1616.69 It could not
have meant to affect those employees who retired, and who will retire, under the different amendatory
laws of C.A. No. 186 like R.A. No. 660,70 P.D. No. 114671 and R.A. No. 8291.72

At any rate, entitlement of qualified employees to receive separation pay and retirement benefits is not
proscribed by the 1987 Constitution. Section 8 of Article IX (B) of the 1987 Constitution reads:

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

Pensions or gratuities shall not be considered as additional, double, or indirect compensation.73

Moreover, retirement benefits under C.A. No. 186 are not even considered as compensation. Section
2 (e) of C.A. No. 186 categorically states that

Benefits granted by this Act by virtue of such life or retirement insurance shall not be considered as
compensation or emolument.74

Under the GSIS law, the retired employees earned their vested right under their contract of insurance
after they religiously paid premiums to GSIS. Under the contract, GSIS is bound to pay the retirement
benefits as it received the premiums from the employees and NPC.

In Marasigan v. Cruz,75 this Court ratiocinated that:

A retirement law such as C.A. 186 and amendatory laws is in the nature of a contract between
the government and its employees. When an employee joins the government service, he has a right
to expect that after rendering the required length of service and fulfilled the conditions stated in the
laws on retirement, he would be able to enjoy the benefits provided in said laws. He regularly pays the
dues prescribed therefore. It would be cruel to deny him the benefits he had been expecting at the
end of his service by imposing conditions for his retirement, which are not found in the law. It is believed
to be a legal duty as well as a moral obligation on the part of the government to honor its commitments
to its employees when as in this case, they have met all the conditions prescribed by law and are
therefore entitled to receive their retirement benefits.76

Thus, where the employee retires and meets the eligibility requirements, he acquires a vested right to
benefits that is protected by the due process clause. Retirees enjoy a protected property interest
whenever they acquire a right to immediate payment under pre-existing law. Thus, a pensioner
acquires a vested right to benefits that have become due as provided under the terms of the public
employees’ pension statute. No law can deprive such person of his pension rights without due process
of law, that is, without notice and opportunity to be heard.77 Verily, when an employee has complied
with the statutory requirements to be entitled to receive his retirement benefits, his right to retire and
receive what is due him by virtue thereof becomes vested and may not thereafter be revoked or
impaired. 1avvphi1

Moreover, Section 63 of the EPIRA law, if misinterpreted as proscribing payment of retirement benefits
under the GSIS law, would be unconstitutional as it would be violative of Section 10, Article III of the
1987 Constitution78 or the provision on non-impairment of contracts.

In view of the fact that separation pay and retirement benefits are different entitlements, as they have
different legal bases, different sources of funds, and different intents, the "exclusiveness of benefits"
rule provided under R.A. No. 8291 is not applicable. Section 55 of R.A. No. 8291 states: "Whenever
other laws provide similar benefits for the same contingencies covered by this Act, the member who
qualifies to the benefits shall have the option to choose which benefits will be paid to him."

Accordingly, the Court declares that separated, displaced, retiring, and retired employees of NPC are
legally entitled to the retirement benefits pursuant to the intent of Congress and as guaranteed by the
GSIS laws. Thus, the Court reiterates:

1] that the dispositive portion in Herrera holding that separated and retired employees "are not
entitled to receive retirement benefits under Commonwealth Act No. 186," referred only to the
gratuity benefits under R.A. No. 1616, which was to be paid by NPC, being the last employer;

2] that it did not proscribe the payment of the retirement benefits to qualified retirees under
R.A. No. 660, P.D. No. 1146, R.A. No. 8291, and other GSIS and social security laws; and

3] that separated, rehired, retiring, and retired employees should receive, and continue to
receive, the retirement benefits to which they are legally entitled.

Petition for Mandamus

As for petitioner's prayer that he be reinstated, suffice it to state that the issue has been rendered moot
by the Decision and Resolutions of this Court in the case of NPC Drivers and Mechanics Association
(NPC DAMA) v. National Power Corporation (NPC)79 and by the above disquisitions.

In Conclusion

While we commend petitioner's attempt to argue against the privatization of the NPC, it is not the proper
subject of herein petition. Petitioner belabored on alleging facts to prove his point which, however, go into
policy decisions which this Court must not delve into less we violate separation of powers. The wisdom of
the privatization of the NPC cannot be looked into by this Court as it would certainly violate this guarded
principle. The wisdom and propriety of legislation is not for this Court to pass upon. 80 Every law has in its
favor the presumption of constitutionality, and to justify its nullification, there must be a clear and
unequivocal breach of the Constitution, and not one that is doubtful, speculative or argumentative. 81
As in National Power Corporation Employees Consolidated Union (NECU) v. National Power
Corporation (NPC),82 this Court held:

Whether the State’s policy of privatizing the electric power industry is wise, just, or expedient is not for
this Court to decide. The formulation of State policy is a legislative concern. Hence, the primary judge
of the necessity, adequacy, wisdom, reasonableness and expediency of any law is primarily the
function of the legislature.83

WHEREFORE, premises considered and subject to the above disquisitions, the Petition for Certiorari
and the Supplemental Petition for Mandamus are Dismissed for lack of merit.

SO ORDERED

G.R. No. 105371 November 11, 1993

THE PHILIPPINE JUDGES ASSOCIATION, duly rep. by its President, BERNARDO P. ABESAMIS,
Vice-President for Legal Affairs, MARIANO M. UMALI, Director for Pasig, Makati, and Pasay,
Metro Manila, ALFREDO C. FLORES, and Chairman of the Committee on Legal Aid, JESUS G.
BERSAMIRA, Presiding Judges of the Regional Trial Court, Branch 85, Quezon City and
Branches 160, 167 and 166, Pasig, Metro Manila, respectively: the NATIONAL
CONFEDERATION OF THE JUDGES ASSOCIATION OF THE PHILIPPINES, composed of the
METROPOLITAN TRIAL COURT JUDGES ASSOCIATION rep. by its President. REINATO
QUILALA of the MUNICIPAL TRIAL CIRCUIT COURT, Manila; THE MUNICIPAL JUDGES
LEAGUE OF THE PHILIPPINES rep. by its President, TOMAS G. TALAVERA; by themselves and
in behalf of all the Judges of the Regional Trial and Shari'a Courts, Metropolitan Trial Courts
and Municipal Courts throughout the Country, petitioners,
vs.
HON. PETE PRADO, in his capacity as Secretary of the Department of Transportation and
Communications, JORGE V. SARMIENTO, in his capacity as Postmaster General, and the
PHILIPPINE POSTAL CORP., respondents.

CRUZ, J.:

The basic issue raised in this petition is the independence of the Judiciary. It is asserted by the
petitioners that this hallmark of republicanism is impaired by the statute and circular they are here
challenging. The Supreme Court is itself affected by these measures and is thus an interested party
that should ordinarily not also be a judge at the same time. Under our system of government, however,
it cannot inhibit itself and must rule upon the challenge, because no other office has the authority to
do so. We shall therefore act upon this matter not with officiousness but in the discharge of an
unavoidable duty and, as always, with detachment and fairness.

The main target of this petition is Section 35 of R.A. No. 7354 as implemented by the Philippine Postal
Corporation through its Circular No.
92-28. These measures withdraw the franking privilege from the Supreme Court, the Court of Appeals,
the Regional Trial Courts, the Metropolitan Trial Courts, the Municipal Trial Courts, and the Land
Registration Commission and its Registers of Deeds, along with certain other government offices.

The petitioners are members of the lower courts who feel that their official functions as judges will be
prejudiced by the above-named measures. The National Land Registration Authority has taken
common cause with them insofar as its own activities, such as sending of requisite notices in
registration cases, affect judicial proceedings. On its motion, it has been allowed to intervene.

The petition assails the constitutionality of R.A. No. 7354 on the grounds that: (1) its title embraces
more than one subject and does not express its purposes; (2) it did not pass the required readings in
both Houses of Congress and printed copies of the bill in its final form were not distributed among the
members before its passage; and (3) it is discriminatory and encroaches on the independence of the
Judiciary.

We approach these issues with one important principle in mind, to wit, the presumption of the
constitutionality of statutes. The theory is that as the joint act of the Legislature and the Executive,
every statute is supposed to have first been carefully studied and determined to be constitutional
before it was finally enacted. Hence, unless it is clearly shown that it is constitutionally flawed, the
attack against its validity must be rejected and the law itself upheld. To doubt is to sustain.

We consider first the objection based on Article VI, Sec. 26(l), of the Constitution providing that "Every
bill passed by the Congress shall embrace only one subject which shall be expressed in the title
thereof."

The purposes of this rule are: (1) to prevent hodge-podge or "log-rolling" legislation; (2) to prevent
surprise or fraud upon the legislature by means of provisions in bills of which the title gives no
intimation, and which might therefore be overlooked and carelessly and unintentionally adopted; and
(3) to fairly apprise the people, through such publication of legislative proceedings as is usually made,
of the subject of legislation that is being considered, in order that they may have opportunity of being
heard thereon, by petition or otherwise, if they shall so desire.1

It is the submission of the petitioners that Section 35 of R.A. No. 7354 which withdrew the franking
privilege from the Judiciary is not expressed in the title of the law, nor does it reflect its purposes.

R.A. No. 7354 is entitled "An Act Creating the Philippine Postal Corporation, Defining its Powers,
Functions and Responsibilities, Providing for Regulation of the Industry and for Other Purposes
Connected Therewith."

The objectives of the law are enumerated in Section 3, which provides:

The State shall pursue the following objectives of a nationwide postal system:

a) to enable the economical and speedy transfer of mail and other postal matters, from
sender to addressee, with full recognition of their privacy or confidentiality;

b) to promote international interchange, cooperation and understanding through the

unhampered flow or exchange of postal matters between nations;

c) to cause or effect a wide range of postal services to cater to different users and
changing needs, including but not limited to, philately, transfer of monies and
valuables, and the like;

d) to ensure that sufficient revenues are generated by and within the industry to finance
the overall cost of providing the varied range of postal delivery and messengerial
 services as well as the expansion and continuous upgrading of service standards by
the same.

Sec. 35 of R.A. No. 7354, which is the principal target of the petition, reads as follows:

Sec. 35. Repealing Clause. — All acts, decrees, orders, executive orders, instructions,
rules and regulations or parts thereof inconsistent with the provisions of this Act are
repealed or modified accordingly.

All franking privileges authorized by law are hereby repealed, except those provided
for under Commonwealth Act No. 265, Republic Acts Numbered 69, 180, 1414, 2087
and 5059. The Corporation may continue the franking privilege under Circular No. 35
dated October 24, 1977 and that of the Vice President, under such arrangements and
conditions as may obviate abuse or unauthorized use thereof.

The petitioners' contention is untenable. We do not agree that the title of the challenged act violates
the Constitution.

The title of the bill is not required to be an index to the body of the act, or to be as comprehensive as
to cover every single detail of the measure. It has been held that if the title fairly indicates the general
subject, and reasonably covers all the provisions of the act, and is not calculated to mislead the
legislature or the people, there is sufficient compliance with the constitutional requirement. 2

To require every end and means necessary for the accomplishment of the general objectives of the
statute to be expressed in its title would not only be unreasonable but would actually render legislation
impossible. 3 As has been correctly explained:

The details of a legislative act need not be specifically stated in its title, but matter
germane to the subject as expressed in the title, and adopted to the accomplishment
of the object in view, may properly be included in the act. Thus, it is proper to create in
the same act the machinery by which the act is to be enforced, to prescribe the
penalties for its infraction, and to remove obstacles in the way of its execution. If such
matters are properly connected with the subject as expressed in the title, it is
unnecessary that they should also have special mention in the title (Southern Pac. Co.
v. Bartine, 170 Fed. 725).

This is particularly true of the repealing clause, on which Cooley writes: "The repeal of a statute on a
given subject is properly connected with the subject matter of a new statute on the same subject; and
therefore a repealing section in the new statute is valid, notwithstanding that the title is silent on the
subject. It would be difficult to conceive of a matter more germane to an act and to the object to be
accomplished thereby than the repeal of previous legislations connected therewith."4

The reason is that where a statute repeals a former law, such repeal is the effect and not the subject
of the statute; and it is the subject, not the effect of a law, which is required to be briefly expressed in
its title.5 As observed in one case,6 if the title of an act embraces only one subject, we apprehend it
was never claimed that every other act which repeals it or alters by implication must be mentioned in
the title of the new act. Any such rule would be neither within the reason of the Constitution, nor
practicable.

We are convinced that the withdrawal of the franking privilege from some agencies is germane to the
accomplishment of the principal objective of R.A. No. 7354, which is the creation of a more efficient
and effective postal service system. Our ruling is that, by virtue of its nature as a repealing clause,
Section 35 did not have to be expressly included in the title of the said law.

II

The petitioners maintain that the second paragraph of Sec. 35 covering the repeal of the franking
privilege from the petitioners and this Court under E.O. 207, PD 1882 and PD 26 was not included in
the original version of Senate Bill No. 720 or House Bill No. 4200. As this paragraph appeared only in
the Conference Committee Report, its addition, violates Article VI, Sec. 26(2) of the Constitution,
reading as follows:

(2) No bill passed by either House shall become a law unless it has passed three
readings on separate days, and printed copies thereof in its final form have been
distributed to its Members three days before its passage, except when the President
certifies to the necessity of its immediate enactment to meet a public calamity or
emergency. Upon the last reading of a bill, no amendment thereto shall be allowed,
and the vote thereon shall be taken immediately thereafter, and
the yeas and nays entered in the Journal.

The petitioners also invoke Sec. 74 of the Rules of the House of Representatives, requiring that
amendment to any bill when the House and the Senate shall have differences thereon may be settled
by a conference committee of both chambers. They stress that Sec. 35 was never a subject of any
disagreement between both Houses and so the second paragraph could not have been validly added
as an amendment.

These argument are unacceptable.

While it is true that a conference committee is the mechanism for compromising differences between
the Senate and the House, it is not limited in its jurisdiction to this question. Its broader function is
described thus:

A conference committee may, deal generally with the subject matter or it may be limited
to resolving the precise differences between the two houses. Even where the
conference committee is not by rule limited in its jurisdiction, legislative custom
severely limits the freedom with which new subject matter can be inserted into the
conference bill. But occasionally a conference committee produces unexpected
results, results beyond its mandate, These excursions occur even where the rules
impose strict limitations on conference committee jurisdiction. This is symptomatic of
the authoritarian power of conference committee (Davies, Legislative Law and
Process: In a Nutshell, 1986 Ed., p.81).

It is a matter of record that the conference Committee Report on the bill in question was returned to
and duly approved by both the Senate and the House of Representatives. Thereafter, the bill was
enrolled with its certification by Senate President Neptali A. Gonzales and Speaker Ramon V. Mitra of
the House of Representatives as having been duly passed by both Houses of Congress. It was then
presented to and approved by President Corazon C. Aquino on April 3, 1992.

Under the doctrine of separation powers, the Court may not inquire beyond the certification of the
approval of a bill from the presiding officers of Congress. Casco Philippine Chemical Co. v.
Gimenez7 laid down the rule that the enrolled bill, is conclusive upon the Judiciary (except in matters
that have to be entered in the journals like the yeas and nays on the final reading of the
bill).8 The journals are themselves also binding on the Supreme Court, as we held in the old (but still
valid) case of U.S. vs. Pons,9 where we explained the reason thus:

To inquire into the veracity of the journals of the Philippine legislature when they are,
as we have said, clear and explicit, would be to violate both the, letter and spirit of the
organic laws by which the Philippine Government was brought into existence, to invade
a coordinate and independent department of the Government, and to interfere with the
legitimate powers and functions, of the Legislature.

Applying these principles, we shall decline to look into the petitioners' charges that an amendment
was made upon the last reading of the bill that eventually became R.A. No. 7354 and that copies
thereof in its final form were not distributed among the members of each House. Both the enrolled bill
and the legislative journals certify that the measure was duly enacted i.e., in accordance with Article
VI, Sec. 26(2) of the Constitution. We are bound by such official assurances from a coordinate
department of the government, to which we owe, at the very least, a becoming courtesy.

III

The third and most serious challenge of the petitioners is based on the equal protection clause.

It is alleged that R.A. No. 7354 is discriminatory because while withdrawing the franking privilege from
the Judiciary, it retains the same for the President of the Philippines, the Vice President of the
Philippines; Senators and Members of the House of Representatives, the Commission on Elections;
former Presidents of the Philippines; the National Census and Statistics Office; and the general public
in the filing of complaints against public offices and officers.10

The respondents counter that there is no discrimination because the law is based on a valid
classification in accordance with the equal protection clause. In fact, the franking privilege has been
withdrawn not only from the Judiciary but also the Office of Adult Education, the Institute of National
Language; the Telecommunications Office; the Philippine Deposit Insurance Corporation; the National
Historical Commission; the Armed Forces of the Philippines; the Armed Forces of the Philippines
Ladies Steering Committee; the City and Provincial Prosecutors; the Tanodbayan (Office of Special
Prosecutor); the Kabataang Barangay; the Commission on the Filipino Language; the Provincial and
City Assessors; and the National Council for the Welfare of Disabled Persons.11

The equal protection of the laws is embraced in the concept of due process, as every unfair
discrimination offends the requirements of justice and fair play. It has nonetheless been embodied in
a separate clause in Article III Sec. 1., of the Constitution to provide for a more, specific guaranty
against any form of undue favoritism or hostility from the government. Arbitrariness in general may be
challenged on the basis of the due process clause. But if the particular act assailed partakes of an
unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.

According to a long line of decisions, equal protection simply requires that all persons or things
similarly situated should be treated alike, both as to rights conferred and responsibilities
imposed, 12 Similar subjects, in other words, should not be treated differently, so as to give undue favor
to some and unjustly discriminate against others.

The equal protection clause does not require the universal application of the laws on all persons or
things without distinction. This might in fact sometimes result in unequal protection, as where, for
example, a law prohibiting mature books to all persons, regardless of age, would benefit the morals of
the youth but violate the liberty of adults. What the clause requires is equality among equals as
determined according to a valid classification. By classification is meant the grouping of persons or
things similar to each other in certain particulars and different from all others in these same
particulars. 13

What is the reason for the grant of the franking privilege in the first place? Is the franking privilege
extended to the President of the Philippines or the Commission on Elections or to former Presidents
of the Philippines purely as a courtesy from the lawmaking body? Is it offered because of
the importance or status of the grantee or because of its need for the privilege? Or have the grantees
been chosen pell-mell, as it were, without any basis at all for the selection?

We reject outright the last conjecture as there is no doubt that the statute as a whole was carefully
deliberated upon, by the political departments before it was finally enacted. There is reason to suspect,
however, that not enough care or attention was given to its repealing clause, resulting in the unwitting
withdrawal of the franking privilege from the Judiciary.

We also do not believe that the basis of the classification was mere courtesy, for it is unimaginable
that the political departments would have intended this serious slight to the Judiciary as the third of
the major and equal departments the government. The same observations are made if the importance
or status of the grantee was the criterion used for the extension of the franking privilege, which is
enjoyed by the National Census and Statistics Office and even some private individuals but not the
courts of justice.

In our view, the only acceptable reason for the grant of the franking privilege was the perceived need of
the grantee for the accommodation, which would justify a waiver of substantial revenue by the
Corporation in the interest of providing for a smoother flow of communication between the government
and the people.

Assuming that basis, we cannot understand why, of all the departments of the government, it is the
Judiciary, that has been denied the franking privilege. There is no question that if there is any major
branch of the government that needs the privilege, it is the Judicial Department, as the respondents
themselves point out. Curiously, the respondents would justify the distinction on the basis precisely of
this need and, on this basis, deny the Judiciary the franking privilege while extending it to others less
deserving.

In their Comment, the respondents point out that available data from the Postal Service Office show
that from January 1988 to June 1992, the total volume of frank mails amounted to P90,424,175.00. Of
this amount, frank mails from the Judiciary and other agencies whose functions include the service of
judicial processes, such as the intervenor, the Department of Justice and the Office of the
Ombudsman, amounted to P86,481,759. Frank mails coming fromthe Judiciary amounted to
P73,574,864.00, and those coming from the petitioners reached the total amount of P60,991,431.00.
The respondents' conclusion is that because of this considerable volume of mail from the Judiciary,
the franking privilege must be withdrawn from it.

The argument is self-defeating. The respondents are in effect saying that the franking privilege should
be extended only to those who do not need it very much, if at all, (like the widows of former Presidents)
but not to those who need it badly (especially the courts of justice). It is like saying that a person may
be allowed cosmetic surgery although it is not really necessary but not an operation that can save his
life.

If the problem of the respondents is the loss of revenues from the franking privilege, the remedy, it
seems to us, is to withdraw it altogether from all agencies of government, including those who do not
need it. The problem is not solved by retaining it for some and withdrawing it from others, especially
where there is no substantial distinction between those favored, which may or may not need it at all,
and the Judiciary, which definitely needs it. The problem is not solved by violating the Constitution.

In lumping the Judiciary with the other offices from which the franking privilege has been withdrawn,
Section 35 has placed the courts of justice in a category to which it does not belong. If it recognizes
the need of the President of the Philippines and the members of Congress for the franking privilege,
there is no reason why it should not recognize a similar and in fact greater need on the part of the
Judiciary for such privilege. While we may appreciate the withdrawal of the franking privilege from the
Armed Forces of the Philippines Ladies Steering Committee, we fail to understand why the Supreme
Court should be similarly treated as that Committee. And while we may concede the need of the
National Census and Statistics Office for the franking privilege, we are intrigued that a similar if not
greater need is not recognized in the courts of justice.

(On second thought, there does not seem to be any justifiable need for withdrawing the privilege from
the Armed Forces of the Philippines Ladies Steering Committee, which, like former Presidents of the
Philippines or their widows, does not send as much frank mail as the Judiciary.)

It is worth observing that the Philippine Postal Corporation, as a government-controlled corporation,

was created and is expected to operate for the purpose of promoting the public service. While it may
have been established primarily for private gain, it cannot excuse itself from performing certain
functions for the benefit of the public in exchange for the franchise extended to it by the government
and the many advantages it enjoys under its charter.14 Among the services it should be prepared to
extend is free carriage of mail for certain offices of the government that need the franking privilege in
the discharge of their own public functions.

We also note that under Section 9 of the law, the Corporation is capitalized at P10 billion pesos, 55%
of which is supplied by the Government, and that it derives substantial revenues from the sources
enumerated in Section 10, on top of the exemptions it enjoys. It is not likely that the retention of the
franking privilege of the Judiciary will cripple the Corporation.

At this time when the Judiciary is being faulted for the delay in the administration of justice, the
withdrawal from it of the franking privilege can only further deepen this serious problem. The volume
of judicial mail, as emphasized by the respondents themselves, should stress the dependence of the
courts of justice on the postal service for communicating with lawyers and litigants as part of the judicial
process. The Judiciary has the lowest appropriation in the national budget compared to the Legislative
and Executive Departments; of the P309 billion budgeted for 1993, only .84%, or less than 1%, is
alloted for the judiciary. It should not be hard to imagine the increased difficulties of our courts if they
have to affix a purchased stamp to every process they send in the discharge of their judicial functions.

We are unable to agree with the respondents that Section 35 of R.A. No. 7354 represents a valid
exercise of discretion by the Legislature under the police power. On the contrary, we find its repealing
clause to be a discriminatory provision that denies the Judiciary the equal protection of the laws
guaranteed for all persons or things similarly situated. The distinction made by the law is superficial. It
is not based on substantial distinctions that make real differences between the Judiciary and the
grantees of the franking privilege.

This is not a question of wisdom or power into which the Judiciary may not intrude. It is a matter of
arbitrariness that this Court has the duty and power to correct.

IV
In sum, we sustain R.A. No. 7354 against the attack that its subject is not expressed in its title and
that it was not passed in accordance with the prescribed procedure. However, we annul Section 35 of
the law as violative of Article 3, Sec. 1, of the Constitution providing that no person shall "be deprived
of the equal protection of laws."

We arrive at these conclusions with a full awareness of the criticism it is certain to provoke. While
ruling against the discrimination in this case, we may ourselves be accused of similar discrimination
through the exercise of our ultimate power in our own favor. This is inevitable. Criticism of judicial
conduct, however undeserved, is a fact of life in the political system that we are prepared to accept..
As judges, we cannot debate with our detractors. We can only decide the cases before us as law
imposes on us the duty to be fair and our own conscience gives us the light to be right.

ACCORDINGLY, the petition is partially GRANTED and Section 35 of R.A. No. 7354 is declared
UNCONSTITUTIONAL. Circular No. 92-28 is SET ASIDE insofar as it withdraws the franking privilege
from the Supreme Court, the Court of Appeals, the Regional trail Courts, the Municipal trial Courts,
and the National Land Registration Authority and its Register of Deeds to all of which offices the said
privilege shall be RESTORED. The temporary restraining order dated June 2, 1992, is made
permanent.

SO ORDERED

G.R. No. L-45127 May 5, 1989

PEOPLE OF THE PHILIPPINES, represented by the Provincial Fiscal of Leyte, petitioner,

vs.
HON. JUDGE AUXENCIO C. DACUYCUY, CELESTINO S. MATONDO, SEGUNDINO A, CAVAL
and CIRILO M. ZANORIA, respondents.

The Office of the Solicitor General for petitioner.

Adelino B. Sitoy for private respondents.

REGALADO, J.:

Involved in this special civil action is the unique situation, to use an euphemistic phrase, of an
alternative penal sanction of imprisonment imposed by law but without a specification as to the term
or duration thereof.

As a consequence of such legislative faux pas or oversight, the petition at bar seeks to set aside the
decision of the then Court of First Instance of Leyte, Branch IV, dated September 8,1976, 1 penned by
herein respondent judge and granting the petition for certiorari and prohibition with preliminary
injunction filed by herein private respondents and docketed therein as Civil Case No. 5428, as well as
his resolution of October 19, 1976 2 denying the motions for reconsideration filed by the parties therein.
Subject of said decision were the issues on jurisdiction over violations of Republic Act No. 4670,
otherwise known as the Magna Carta for Public School Teachers, and the constitutionality of Section
32 thereof.

In a complaint filed by the Chief of Police of Hindang, Leyte on April 4, 1975, herein private
respondents Celestino S. Matondo, Segundino A. Caval and Cirilo M. Zanoria, public school officials
of Leyte, were charged before the Municipal Court of Hindang, Leyte in Criminal Case No. 555 thereof
for violation of Republic Act No. 4670. The case was set for arraignment and trial on May 29, 1975. At
the arraignment, the herein private respondents, as the accused therein, pleaded not guilty to the
charge. Immediately thereafter, they orally moved to quash the complaint for lack of jurisdiction over
the offense allegedly due to the correctional nature of the penalty of imprisonment prescribed for the
offense. The motion to quash was subsequently reduced to writing on June 13, 1975. 3 On August 21,
1975, the municipal court denied the motion to quash for lack of merit. 4 On September 2, 1975, private
respondents filed a motion for the reconsideration of the aforesaid denial order on the same ground
of lack of jurisdiction, but with the further allegation that the facts charged do not constitute an offense
considering that Section 32 of Republic Act No. 4670 is null and void for being unconstitutional. In an
undated order received by the counsel for private respondents on October 20,1975, the motion for
reconsideration was denied. 5

On October 26, 1975, private respondents filed a petitions 6 for certiorari and prohibition with
preliminary injunction before the former Court of First Instance of Leyte, Branch VIII, where it was
docketed as Civil Case No. B-622, to restrain the Municipal Judge, Provincial Fiscal and Chief of Police
of Hindang, Leyte from proceeding with the trial of said Criminal Case No. 555 upon the ground that
the former Municipal Court of Hindang had no jurisdiction over the offense charged. Subsequently, an
amended petition 7 alleged the additional ground that the facts charged do not constitute an offense
since the penal provision, which is Section 32 of said law, is unconstitutional for the following reasons:
(1) It imposes a cruel and unusual punishment, the term of imprisonment being unfixed and may run
to reclusion perpetua; and (2) It also constitutes an undue delegation of legislative power, the duration
of the penalty of imprisonment being solely left to the discretion of the court as if the latter were the
legislative department of the Government.

On March 30, 1976, having been advised that the petition of herein private respondents was related
to Criminal Case No. 1978 for violation of Presidential Decree No. 442 previously transferred from
Branch VIII to Branch IV of the erstwhile Court of First Instance of Leyte, Judge Fortunate B. Cuna of
the former branch transferred the said petition to the latter branch for further proceedings and where
it was subsequently docketed therein as Civil Case No. 5428. 8 On March 15, 1976, the petitioner
herein filed an opposition to the admission of the said amended petitions 9 but respondent judge denied
the same in his resolution of April 20, 1976. 10 On August 2, 1976, herein petitioner filed a
supplementary memorandum in answer to the amended petition. 11

On September 8, 1976, respondent judge rendered the aforecited challenged decision holding in
substance that Republic Act No. 4670 is valid and constitutional but cases for its violation fall outside
of the jurisdiction of municipal and city courts, and remanding the case to the former Municipal Court
of Hindang, Leyte only for preliminary investigation.

As earlier stated, on September 25, 1976, petitioner filed a motion for reconsideration. 12 Likewise,
private respondents filed a motion for reconsideration of the lower court's decision but the same was
limited only to the portion thereof which sustains the validity of Section 32 of Republic Act No.
4670. 13 Respondent judge denied both motions for reconsideration in a resolution dated October 19,
1976. 14

The instant petition to review the decision of respondent judge poses the following questions of law:
(1) Whether the municipal and city courts have jurisdiction over violations of Republic Act No. 4670;
and (2) Whether Section 32 of said Republic Act No. 4670 is constitutional.

We shall resolve said queries in inverse order, since prior determination of the constitutionality of the
assailed provision of the law involved is necessary for the adjudication of the jurisdictional issue raised
in this petition.
 1. The disputed section of Republic Act No. 4670 provides:

Sec. 32. Penal Provision. — A person who shall wilfully interfere with, restrain or
coerce any teacher in the exercise of his rights guaranteed by this Act or who shall in
any other manner commit any act to defeat any of the provisions of this Act shall, upon
conviction, be punished by a fine of not less than one hundred pesos nor more than
one thousand pesos, or by imprisonment, in the discretion of the court. (Emphasis
supplied).

Two alternative and distinct penalties are consequently imposed, to wit: (a) a fine ranging from
P100.00 to P1,000.00; or (b) imprisonment. It is apparent that the law has no prescribed period or term
for the imposable penalty of imprisonment. While a minimum and maximum amount for the penalty of
fine is specified, there is no equivalent provision for the penalty of imprisonment, although both appear
to be qualified by the phrase "in the discretion of the court.

Private respondents contend that a judicial determination of what Congress intended to be the duration
of the penalty of imprisonment would be violative of the constitutional prohibition against undue
delegation of legislative power, and that the absence of a provision on the specific term of
imprisonment constitutes that penalty into a cruel and unusual form of punishment. Hence, it is
vigorously asserted, said Section 32 is unconstitutional.

The basic principle underlying the entire field of legal concepts pertaining to the validity of legislation
is that in the enactment of legislation a constitutional measure is thereby created. In every case where
a question is raised as to the constitutionality of an act, the court employs this doctrine in scrutinizing
the terms of the law. In a great volume of cases, the courts have enunciated the fundamental rule that
there is a presumption in favor of the constitutionality of a legislative enactment. 15

It is contended that Republic Act No. 4670 is unconstitutional on the ground that the imposable but
indefinite penalty of imprisonment provided therein constitutes a cruel and unusual punishment, in
defiance of the express mandate of the Constitution. This contention is inaccurate and should be
rejected.

We note with approval the holding of respondent judge that —

The rule is established beyond question that a punishment authorized by statute is not
cruel or unusual or disproportionate to the nature of the offense unless it is a barbarous
one unknown to the law or so wholly disproportionate to the nature of the offense as
to shock the moral sense of the community. Based on the principle, our Supreme Court
has consistently overruled contentions of the defense that the punishment of fine or
imprisonment authorized by the statute involved is cruel and unusual. (Legarda vs.
Valdez, 1 Phil. 146; U.S. vs. Pico, 18 Phil. 386; People vs. Garay, 2 ACR 149; People
vs. Estoista 93 Phil. 647; People vs. Tiu Ua. 96 Phil. 738; People vs. Dionisio, 22 SCRA
1299). The language of our Supreme Court in the first of the cases it decided after the
last world war is appropriate here:

The Constitution directs that 'Excessive fines shall not be imposed, nor
cruel and unusual punishment inflicted.' The prohibition of cruel and
unusual punishments is generally aimed at the form or character of the
punishment rather than its severity in respect of duration or amount,
and apply to punishments which never existed in America, or which
public sentiment has regarded as cruel or obsolete (15 Am. Jur., p.
172), for instance there (sic) inflicted at the whipping post, or in the
 pillory, burning at the stake, breaking on the wheel, disemboweling,
and the like (15 Am. Jur. Supra, Note 35 L.R.A. p. 561). Fine and
imprisonment would not thus be within the prohibition.' (People vs. de
la Cruz, 92 Phil. 906). 16

The question that should be asked, further, is whether the constitutional prohibition looks only to the
form or nature of the penalty and not to the proportion between the penalty and the crime.

The answer thereto may be gathered from the pronouncement in People vs. Estoista, 17 where an
"excessive" penalty was upheld as constitutional and was imposed but with a recommendation for
executive clemency, thus:

... If imprisonment from 5 to 10 years is out of proportion to the present case in view of
certain circumstances, the law is not to be declared unconstitutional for this reason.
The constitutionality of an act of the legislature is not to be judged in the light of
exceptional cases. Small transgressors for which the heavy net was not spread are,
like small fishes, bound to be caught, and it is to meet such a situation as this that
courts are advised to make a recommendation to the Chief Executive for clemency or
reduction of the penalty...

That the penalty is grossly disproportionate to the crime is an insufficient basis to declare the law
unconstitutional on the ground that it is cruel and unusual. The fact that the punishment authorized by
the statute is severe does not make it cruel or unusual. 18 In addition, what degree of disproportion the
Court will consider as obnoxious to the Constitution has still to await appropriate determination in due
time since, to the credit of our legislative bodies, no decision has as yet struck down a penalty for
being "cruel and unusual" or "excessive."

We turn now to the argument of private respondents that the entire penal provision in question should
be invalidated as an 49 "undue delegation of legislative power, the duration of penalty of imprisonment
being solely left to the discretion of the court as if the lattter were the legislative department of the
government."

Petitioner counters that the discretion granted therein by the legislature to the courts to determine the
period of imprisonment is a matter of statutory construction and not an undue delegation of legislative
power. It is contended that the prohibition against undue delegation of legislative power is concerned
only with the delegation of power to make laws and not to interpret the same. It is also submitted that
Republic Act No. 4670 vests in the courts the discretion, not to fix the period of imprisonment, but to
choose which of the alternative penalties shall be imposed.

Respondent judge sustained these theses of petitioner on his theory that "the principle of separation
of powers is not violated by vesting in courts discretion as to the length of sentence or amount of fine
between designated limits in sentencing persons convicted of crime. In such instance, the exercise of
judicial discretion by the courts is not an attempt to use legislative power or to prescribe and create a
law but is an instance of the administration of justice and the application of existing laws to the facts
of particular cases." 19 What respondent judge obviously overlooked is his own reference to penalties
"between designated limits."

In his commentary on the Constitution of the United States, Corwin wrote:

.. At least three distinct ideas have contributed to the development of the principle that
legislative power cannot be delegated. One is the doctrine of separation of powers:
Why go to the trouble of separating the three powers of government if they can
 straightway remerge on their own motion? The second is the concept of due process
of laws which precludes the transfer of regulatory functions to private persons. Lastly,
there is the maxim of agency "Delegata potestas non potest delegari." 20

An apparent exception to the general rule forbidding the delegation of legislative authority to the courts
exists in cases where discretion is conferred upon said courts. It is clear, however, that when the
courts are said to exercise a discretion, it must be a mere legal discretion which is exercised in
discerning the course prescribed by law and which, when discerned, it is the duty of the court to
follow. 21

So it was held by the Supreme Court of the United States that the principle of separation of powers is
not violated by vesting in courts discretion as to the length of sentence or the amount of fine between
designated limits in sentencing persons convicted of a crime. 22

In the case under consideration, the respondent judge erronneously assumed that since the penalty
of imprisonment has been provided for by the legislature, the court is endowed with the discretion to
ascertain the term or period of imprisonment. We cannot agree with this postulate. It is not for the
courts to fix the term of imprisonment where no points of reference have been provided by the
legislature. What valid delegation presupposes and sanctions is an exercise of discretion to fix the
length of service of a term of imprisonment which must be encompassed within specific or designated
limits provided by law, the absence of which designated limits well constitute such exercise as an
undue delegation, if not-an outright intrusion into or assumption, of legislative power.

Section 32 of Republic Act No. 4670 provides for an indeterminable period of imprisonment, with
neither a minimum nor a maximum duration having been set by the legislative authority. The courts
are thus given a wide latitude of discretion to fix the term of imprisonment, without even the benefit of
any sufficient standard, such that the duration thereof may range, in the words of respondent judge,
from one minute to the life span of the accused. Irremissibly, this cannot be allowed. It vests in the
courts a power and a duty essentially legislative in nature and which, as applied to this case, does
violence to the rules on separation of powers as well as the non-delegability of legislative powers. This
time, the preumption of constitutionality has to yield.

On the foregoing considerations, and by virtue of the separability clause in Section 34 of Republic Act
No. 4670, the penalty of imprisonment provided in Section 32 thereof should be, as it is hereby,
declared unconstitutional.

It follows, therefore, that a ruling on the proper interpretation of the actual term of imprisonment, as
may have been intended by Congress, would be pointless and academic. It is, however, worth
mentioning that the suggested application of the so-called rule or principle of parallelism, whereby a
fine of P1,000.00 would be equated with one year of imprisonment, does not merit judicial acceptance.
A fine, whether imposed as a single or as an alternative penalty, should not and cannot be reduced or
converted into a prison term; it is to be considered as a separate and independent penalty consonant
with Article 26 of the Revised Penal Code. 23 It is likewise declared a discrete principal penalty in the
graduated scales of penalties in Article 71 of said Code. There is no rule for transmutation of the
amount of a fine into a term of imprisonment. Neither does the Code contain any provision that a fine
when imposed in conjunction with imprisonment is subordinate to the latter penalty. In sum, a fine is
as much a principal penalty as imprisonment. Neither is subordinate to the other. 24

2. It has been the consistent rule that the criminal jurisdiction of the court is determined by the statute
in force at the time of the commencement of the action. 25
With the deletion by invalidation of the provision on imprisonment in Section 32 of Republic Act No.
4670, as earlier discussed, the imposable penalty for violations of said law should be limited to a fine
of not less than P100.00 and not more than P1,000.00, the same to serve as the basis in determining
which court may properly exercise jurisdiction thereover. When the complaint against private
respondents was filed in 1975, the pertinent law then in force was Republic Act No. 296, as amended
by Republic Act No. 3828, under which crimes punishable by a fine of not more than P 3,000.00 fall
under the original jurisdiction of the former municipal courts. Consequently, Criminal Case No. 555
against herein private respondents falls within the original jurisdiction of the Municipal Trial Court of
Hindang, Leyte.

WHEREFORE, the decision and resolution of respondent judge are hereby REVERSED and SET
ASIDE. Criminal Case No. 555 filed against private respondents herein is hereby ordered to be
remanded to the Municipal Trial Court of Hindang, Leyte for trial on the merits.

SO ORDERED.