C.
DUE PROCESS IN GENERAL (CASES)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAÑADA, ABRAHAM F.
SARMIENTO, and MOVEMENT OF ATTORNEYS
FOR BROTHERHOOD, INTEGRITY AND
NATIONALISM, INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as
Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy
Executive Assistant to the President ,
MELQUIADES P. DE LA CRUZ, in his capacity as
Director, Malacañang Records Office, and
FLORENDO S. PABLO, in his capacity as
Director, Bureau of Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters
of public concern, a right recognized in Section 6,
Article IV of the 1973 Philippine Constitution, 1 as
well as the principle that laws to be valid and
enforceable must be published in the Official Gazette
or otherwise effectively promulgated, petitioners
seek a writ of mandamus to compel respondent
public officials to publish, and/or cause the
publication in the Official Gazette of various
presidential decrees, letters of instructions, general
orders, proclamations, executive orders, letter of
implementation and administrative orders.
Specifically, the publication of the following
presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37,
38, 59, 64, 103, 171, 179, 184, 197,
200, 234, 265, 286, 298, 303, 312, 324,
325, 326, 337, 355, 358, 359, 360, 361,
368, 404, 406, 415, 427, 429, 445, 447,
473, 486, 491, 503, 504, 521, 528, 551,
566, 573, 574, 594, 599, 644, 658, 661,
718, 731, 733, 793, 800, 802, 835, 836,
923, 935, 961, 1017-1030, 1050, 1060-
1061, 1085, 1143, 1165, 1166, 1242,
1246, 1250, 1278, 1279, 1300, 1644,
1772, 1808, 1810, 1813-1817, 1819-
1826, 1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49,
72, 107, 108, 116, 130, 136, 141, 150,
153, 155, 161, 173, 180, 187, 188, 192,
193, 199, 202, 204, 205, 209, 211-213,
215-224, 226-228, 231-239, 241-245,
248, 251, 253-261, 263-269, 271-273,
275-283, 285-289, 291, 293, 297-299,
301-303, 309, 312-315, 325, 327, 343,
346, 349, 357, 358, 362, 367, 370, 382,
385, 386, 396-397, 405, 438-440, 444-
445, 473, 486, 488, 498, 501, 399, 527,
561, 576, 587, 594, 599, 600, 602, 609,
610, 611, 612, 615, 641, 642, 665, 702,
712-713, 726, 837-839, 878-879, 881,
882, 939-940, 964,997,1149-1178,1180-
1278.
c] General Orders Nos.: 14, 52, 58, 59,
60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147,
1151, 1196, 1270, 1281, 1319-1526,
1529, 1532, 1535, 1538, 1540-1547,
1550-1558, 1561-1588, 1590-1595,
1594-1600, 1606-1609, 1612-1628,
1630-1649, 1694-1695, 1697-1701,
1705-1723, 1731-1734, 1737-1742,
1744, 1746-1751, 1752, 1754, 1762,
1764-1787, 1789-1795, 1797, 1800,
1802-1804, 1806-1807, 1812-1814,
1816, 1825-1826, 1829, 1831-1832,
1835-1836, 1839-1840, 1843-1844,
1846-1847, 1849, 1853-1858, 1860,
1866, 1868, 1870, 1876-1889, 1892,
1900, 1918, 1923, 1933, 1952, 1963,
1965-1966, 1968-1984, 1986-2028,
2030-2044, 2046-2145, 2147-2161,
2163-2244.
e] Executive Orders Nos.: 411, 413,
414, 427, 429-454, 457- 471, 474-492,
494-507, 509-510, 522, 524-528, 531-
532, 536, 538, 543-544, 549, 551-553,
560, 563, 567-568, 570, 574, 593, 594,
598-604, 609, 611- 647, 649-677, 679-
703, 705-707, 712-786, 788-852, 854-
857.
f] Letters of Implementation Nos.: 7, 8,
9, 10, 11-22, 25-27, 39, 50, 51, 59, 76,
80-81, 92, 94, 95, 107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348,
352-354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General,
would have this case dismissed outright on the
ground that petitioners have no legal personality or
standing to bring the instant petition. The view is
submitted that in the absence of any showing that
petitioners are personally and directly affected or
prejudiced by the alleged non-publication of the
presidential issuances in question 2 said petitioners
are without the requisite legal personality to institute
this mandamus proceeding, they are not being
"aggrieved parties" within the meaning of Section 3,
Rule 65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.—When
any tribunal, corporation, board or
person unlawfully neglects the
performance of an act which the law
specifically enjoins as a duty resulting
from an office, trust, or station, or
unlawfully excludes another from the
use a rd enjoyment of a right or office to
which such other is entitled, and there is
no other plain, speedy and adequate
remedy in the ordinary course of law,
the person aggrieved thereby may file a
verified petition in the proper court
alleging the facts with certainty and
praying that judgment be rendered
commanding the defendant,
immediately or at some other specified
time, to do the act required to be done
to Protect the rights of the petitioner,
and to pay the damages sustained by
the petitioner by reason of the wrongful
acts of the defendant.
Upon the other hand, petitioners maintain that since
the subject of the petition concerns a public right and
its object is to compel the performance of a public
duty, they need not show any specific interest for
their petition to be given due course.
The issue posed is not one of first impression. As
early as the 1910 case of Severino vs. Governor
General, 3 this Court held that while the general rule
is that "a writ of mandamus would be granted to a
private individual only in those cases where he has
some private or particular interest to be subserved,
or some particular right to be protected, independent
of that which he holds with the public at large," and
"it is for the public officers exclusively to apply for the
writ when public rights are to be subserved [Mithchell
vs. Boardmen, 79 M.e., 469]," nevertheless, "when
the question is one of public right and the object of
the mandamus is to procure the enforcement of a
public duty, the people are regarded as the real party
in interest and the relator at whose instigation the
proceedings are instituted need not show that he has
any legal or special interest in the result, it being
sufficient to show that he is a citizen and as such
interested in the execution of the laws [High,
Extraordinary Legal Remedies, 3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator
Lope Severino, a private individual, as a proper party
to the mandamus proceedings brought to compel the
Governor General to call a special election for the
position of municipal president in the town of Silay,
Negros Occidental. Speaking for this Court, Mr.
Justice Grant T. Trent said:
We are therefore of the opinion that the
weight of authority supports the
 proposition that the relator is a proper
party to proceedings of this character
when a public right is sought to be
enforced. If the general rule in America
were otherwise, we think that it would
not be applicable to the case at bar for
the reason 'that it is always dangerous
to apply a general rule to a particular
case without keeping in mind the reason
for the rule, because, if under the
particular circumstances the reason for
the rule does not exist, the rule itself is
not applicable and reliance upon the
rule may well lead to error'
No reason exists in the case at bar for
applying the general rule insisted upon
by counsel for the respondent. The
circumstances which surround this case
are different from those in the United
States, inasmuch as if the relator is not
a proper party to these proceedings no
other person could be, as we have seen
that it is not the duty of the law officer of
the Government to appear and
represent the people in cases of this
character.
The reasons given by the Court in recognizing a
private citizen's legal personality in the
aforementioned case apply squarely to the present
petition. Clearly, the right sought to be enforced by
petitioners herein is a public right recognized by no
less than the fundamental law of the land. If
petitioners were not allowed to institute this
proceeding, it would indeed be difficult to conceive of
any other person to initiate the same, considering
that the Solicitor General, the government officer
generally empowered to represent the people, has
entered his appearance for respondents in this case.
Respondents further contend that publication in the
Official Gazette is not a sine qua non requirement for
the effectivity of laws where the laws themselves
provide for their own effectivity dates. It is thus
submitted that since the presidential issuances in
question contain special provisions as to the date
they are to take effect, publication in the Official
Gazette is not indispensable for their effectivity. The
point stressed is anchored on Article 2 of the Civil
Code:
Art. 2. Laws shall take effect after fifteen
days following the completion of their
publication in the Official Gazette,
unless it is otherwise provided, ...
The interpretation given by respondent is in accord
with this Court's construction of said article. In a long
line of decisions,4 this Court has ruled that
publication in the Official Gazette is necessary in
those cases where the legislation itself does not
provide for its effectivity date-for then the date of
publication is material for determining its date of
effectivity, which is the fifteenth day following its
publication-but not when the law itself provides for
the date when it goes into effect.
Respondents' argument, however, is logically correct
only insofar as it equates the effectivity of laws with
the fact of publication. Considered in the light of
other statutes applicable to the issue at hand, the
conclusion is easily reached that said Article 2 does
not preclude the requirement of publication in the
Official Gazette, even if the law itself provides for the
date of its effectivity. Thus, Section 1 of
Commonwealth Act 638 provides as follows:
Section 1. There shall be published in
the Official Gazette [1] all important
legisiative acts and resolutions of a
public nature of the, Congress of the
Philippines; [2] all executive and
administrative orders and
proclamations, except such as have no
general applicability; [3] decisions or
abstracts of decisions of the Supreme
Court and the Court of Appeals as may
be deemed by said courts of sufficient
importance to be so published; [4] such
documents or classes of documents as
may be required so to be published by
law; and [5] such documents or classes
of documents as the President of the
Philippines shall determine from time to
time to have general applicability and
legal effect, or which he may authorize
so to be published. ...
The clear object of the above-quoted provision is to
give the general public adequate notice of the
various laws which are to regulate their actions and
conduct as citizens. Without such notice and
publication, there would be no basis for the
application of the maxim "ignorantia legis non
excusat." It would be the height of injustice to punish
or otherwise burden a citizen for the transgression of
a law of which he had no notice whatsoever, not
even a constructive one.
Perhaps at no time since the establishment of the
Philippine Republic has the publication of laws taken
so vital significance that at this time when the people
have bestowed upon the President a power
heretofore enjoyed solely by the legislature. While
the people are kept abreast by the mass media of
the debates and deliberations in the Batasan
Pambansa—and for the diligent ones, ready access
to the legislative records—no such publicity
accompanies the law-making process of the
President. Thus, without publication, the people have
no means of knowing what presidential decrees have
actually been promulgated, much less a definite way
of informing themselves of the specific contents and
texts of such decrees. As the Supreme Court of
Spain ruled: "Bajo la denominacion generica de
leyes, se comprenden tambien los reglamentos,
Reales decretos, Instrucciones, Circulares y Reales
ordines dictadas de conformidad con las mismas por
el Gobierno en uso de su potestad.5
The very first clause of Section I of Commonwealth
Act 638 reads: "There shall be published in the
Official Gazette ... ." The word "shall" used therein
imposes upon respondent officials an imperative
duty. That duty must be enforced if the Constitutional
right of the people to be informed on matters of
public concern is to be given substance and reality.
The law itself makes a list of what should be
published in the Official Gazette. Such listing, to our
mind, leaves respondents with no discretion
whatsoever as to what must be included or excluded
from such publication.
The publication of all presidential issuances "of a
public nature" or "of general applicability" is
mandated by law. Obviously, presidential decrees
that provide for fines, forfeitures or penalties for their
violation or otherwise impose a burden or. the
people, such as tax and revenue measures, fall
within this category. Other presidential issuances
which apply only to particular persons or class of
persons such as administrative and executive orders
need not be published on the assumption that they
have been circularized to all concerned. 6
It is needless to add that the publication of
presidential issuances "of a public nature" or "of
general applicability" is a requirement of due
process. It is a rule of law that before a person may
be bound by law, he must first be officially and
specifically informed of its contents. As Justice
Claudio Teehankee said in Peralta vs. COMELEC 7:
In a time of proliferating decrees, orders
and letters of instructions which all form
part of the law of the land, the
requirement of due process and the
Rule of Law demand that the Official
Gazette as the official government
repository promulgate and publish the
texts of all such decrees, orders and
instructions so that the people may
know where to obtain their official and
specific contents.
The Court therefore declares that presidential
issuances of general application, which have not
been published, shall have no force and effect.
Some members of the Court, quite apprehensive
about the possible unsettling effect this decision
might have on acts done in reliance of the validity of
those presidential decrees which were published
only during the pendency of this petition, have put
the question as to whether the Court's declaration of
invalidity apply to P.D.s which had been enforced or
implemented prior to their publication. The answer is
all too familiar. In similar situations in the past this
Court had taken the pragmatic and realistic course
set forth in Chicot County Drainage District vs.
Baxter Bank 8 to wit:
The courts below have proceeded on
the theory that the Act of Congress,
having been found to be
unconstitutional, was not a law; that it
was inoperative, conferring no rights
and imposing no duties, and hence
affording no basis for the challenged
decree. Norton v. Shelby County, 118
U.S. 425, 442; Chicago, 1. & L. Ry. Co.
v. Hackett, 228 U.S. 559, 566. It is quite
clear, however, that such broad
statements as to the effect of a
determination of unconstitutionality must
be taken with qualifications. The actual
existence of a statute, prior to such a
determination, is an operative fact and
may have consequences which cannot
justly be ignored. The past cannot
always be erased by a new judicial
declaration. The effect of the
subsequent ruling as to invalidity may
have to be considered in various
aspects-with respect to particular
conduct, private and official. Questions
of rights claimed to have become
vested, of status, of prior determinations
deemed to have finality and acted upon
accordingly, of public policy in the light
of the nature both of the statute and of
its previous application, demand
examination. These questions are
among the most difficult of those which
have engaged the attention of courts,
state and federal and it is manifest from
numerous decisions that an all-inclusive
statement of a principle of absolute
retroactive invalidity cannot be justified.
Consistently with the above principle, this Court
in Rutter vs. Esteban 9 sustained the right of a party
under the Moratorium Law, albeit said right had
accrued in his favor before said law was declared
unconstitutional by this Court.
Similarly, the implementation/enforcement of
presidential decrees prior to their publication in the
Official Gazette is "an operative fact which may have
consequences which cannot be justly ignored. The
past cannot always be erased by a new judicial
declaration ... that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be
justified."
From the report submitted to the Court by the Clerk
of Court, it appears that of the presidential decrees
sought by petitioners to be published in the Official
Gazette, only Presidential Decrees Nos. 1019 to
1030, inclusive, 1278, and 1937 to 1939, inclusive,
have not been so published. 10 Neither the subject
matters nor the texts of these PDs can be
ascertained since no copies thereof are available.
But whatever their subject matter may be, it is
undisputed that none of these unpublished PDs has
ever been implemented or enforced by the
government. In Pesigan vs. Angeles, 11 the Court,
through Justice Ramon Aquino, ruled that
"publication is necessary to apprise the public of the
contents of [penal] regulations and make the said
penalties binding on the persons affected thereby. "
The cogency of this holding is apparently recognized
by respondent officials considering the manifestation
in their comment that "the government, as a matter
of policy, refrains from prosecuting violations of
criminal laws until the same shall have been
published in the Official Gazette or in some other
publication, even though some criminal laws provide
that they shall take effect immediately.
WHEREFORE, the Court hereby orders respondents
to publish in the Official Gazette all unpublished
presidential issuances which are of general
application, and unless so published, they shall have
no binding force and effect.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 169364 September 18, 2009
PEOPLE OF THE PHILIPPINES, Petitioner,
vs.
EVANGELINE SITON y SACIL and KRYSTEL
KATE SAGARANO y MEFANIA, Respondents.
DECISION
YNARES-SANTIAGO, J.:
If a man is called to be a street sweeper, he should
sweep streets even as Michelangelo painted, or
Beethoven composed music, or Shakespeare wrote
poetry. He should sweep streets so well that all the
hosts of Heaven and Earth will pause to say, here
lived a great street sweeper who did his job well.
– Martin Luther King, Jr.
Assailed in this petition for review on certiorari is the
July 29, 2005 Order1 of Branch 11, Davao City
Regional Trial Court in Special Civil Case No. 30-
500-2004 granting respondents’ Petition for
Certiorari and declaring paragraph 2 of Article 202 of
the Revised Penal Code unconstitutional.
Respondents Evangeline Siton and Krystel Kate
Sagarano were charged with vagrancy pursuant to
Article 202 (2) of the Revised Penal Code in two
separate Informations dated November 18, 2003,
docketed as Criminal Case Nos. 115,716-C-2003
and 115,717-C-2003 and raffled to Branch 3 of the
Municipal Trial Court in Cities, Davao City. The
Informations, read:
That on or about November 14, 2003, in the City of
Davao, Philippines, and within the jurisdiction of this
Honorable Court, the above-mentioned accused,
willfully, unlawfully and feloniously wandered and
loitered around San Pedro and Legaspi Streets, this
City, without any visible means to support herself nor
lawful and justifiable purpose.2
Article 202 of the Revised Penal Code provides:
Art. 202. Vagrants and prostitutes; penalty. — The
following are vagrants:
1. Any person having no apparent means of
subsistence, who has the physical ability to
work and who neglects to apply himself or
herself to some lawful calling;
2. Any person found loitering about public or
semi-public buildings or places or tramping or
wandering about the country or the streets
without visible means of support;
3. Any idle or dissolute person who lodges in
houses of ill fame; ruffians or pimps and those
who habitually associate with prostitutes;
4. Any person who, not being included in the
provisions of other articles of this Code, shall
be found loitering in any inhabited or
uninhabited place belonging to another without
any lawful or justifiable purpose;
5. Prostitutes.
For the purposes of this article, women who, for
money or profit, habitually indulge in sexual
intercourse or lascivious conduct, are deemed to be
prostitutes.
Any person found guilty of any of the offenses
covered by this articles shall be punished by arresto
menor or a fine not exceeding 200 pesos, and in
case of recidivism, by arresto mayor in its medium
period to prision correccional in its minimum period
or a fine ranging from 200 to 2,000 pesos, or both, in
the discretion of the court.
Instead of submitting their counter-affidavits as
directed, respondents filed separate Motions to
Quash3 on the ground that Article 202 (2) is
unconstitutional for being vague and overbroad.
In an Order4 dated April 28, 2004, the municipal trial
court denied the motions and directed respondents
anew to file their respective counter-affidavits. The
municipal trial court also declared that the law on
vagrancy was enacted pursuant to the State’s police
power and justified by the Latin maxim "salus populi
est suprem(a) lex," which calls for the subordination
of individual benefit to the interest of the greater
number, thus:
Our law on vagrancy was enacted pursuant to the
police power of the State. An authority on police
power, Professor Freund describes laconically police
power "as the power of promoting public welfare by
restraining and regulating the use of liberty and
property." (Citations omitted). In fact the person’s
acts and acquisitions are hemmed in by the police
power of the state. The justification found in the Latin
maxim, salus populi est supreme (sic) lex" (the god
of the people is the Supreme Law). This calls for the
subordination of individual benefit to the interests of
the greater number.In the case at bar the affidavit of
the arresting police officer, SPO1 JAY PLAZA with
Annex "A" lucidly shows that there was a prior
surveillance conducted in view of the reports that
vagrants and prostitutes proliferate in the place
where the two accused (among other women) were
wandering and in the wee hours of night and
soliciting male customer. Thus, on that basis the
prosecution should be given a leeway to prove its
case. Thus, in the interest of substantial justice, both
prosecution and defense must be given their day in
Court: the prosecution proof of the crime, and the
author thereof; the defense, to show that the acts of
the accused in the indictment can’t be categorized as
a crime.5
The municipal trial court also noted that in the
affidavit of the arresting police officer, SPO1 Jay
Plaza, it was stated that there was a prior
surveillance conducted on the two accused in an
area reported to be frequented by vagrants and
prostitutes who solicited sexual favors. Hence, the
prosecution should be given the opportunity to prove
the crime, and the defense to rebut the evidence. 1avv phi 1
Respondents thus filed an original petition for
certiorari and prohibition with the Regional Trial
Court of Davao City,6 directly challenging the
constitutionality of the anti-vagrancy law, claiming
that the definition of the crime of vagrancy under
Article 202 (2), apart from being vague, results as
well in an arbitrary identification of violators, since
the definition of the crime includes in its coverage
persons who are otherwise performing ordinary
peaceful acts. They likewise claimed that Article 202
(2) violated the equal protection clause under the
Constitution because it discriminates against the
poor and unemployed, thus permitting an arbitrary
and unreasonable classification.
The State, through the Office of the Solicitor
General, argued that pursuant to the Court’s ruling
in Estrada v. Sandiganbayan,7 the overbreadth and
vagueness doctrines apply only to free speech cases
and not to penal statutes. It also asserted that Article
202 (2) must be presumed valid and constitutional,
since the respondents failed to overcome this
presumption.
On July 29, 2005, the Regional Trial Court issued the
assailed Order granting the petition, the dispositive
portion of which reads:
WHEREFORE, PRESCINDING FROM THE
FOREGOING, the instant Petition is hereby
GRANTED. Paragraph 2 of Article 202 of the
Revised Penal Code is hereby declared
unconstitutional and the Order of the court a quo,
dated April 28, 2004, denying the petitioners’ Motion
to Quash is set aside and the said court is ordered to
dismiss the subject criminal cases against the
petitioners pending before it.
SO ORDERED.8
In declaring Article 202 (2) unconstitutional, the trial
court opined that the law is vague and it violated the
equal protection clause. It held that the "void for
vagueness" doctrine is equally applicable in testing
the validity of penal statutes. Citing Papachristou v.
City of Jacksonville,9 where an anti vagrancy
ordinance was struck down as unconstitutional by
the Supreme Court of the United States, the trial
court ruled:
The U.S. Supreme Court’s justifications for striking
down the Jacksonville Vagrancy Ordinance are
equally applicable to paragraph 2 of Article 202 of
the Revised Penal Code.
Indeed, to authorize a police officer to arrest a
person for being "found loitering about public or
semi-public buildings or places or tramping or
wandering about the country or the streets without
visible means of support" offers too wide a latitude
for arbitrary determinations as to who should be
arrested and who should not.
Loitering about and wandering have become national
pastimes particularly in these times of recession
when there are many who are "without visible means
of support" not by reason of choice but by force of
circumstance as borne out by the high
unemployment rate in the entire country.
To authorize law enforcement authorities to arrest
someone for nearly no other reason than the fact
that he cannot find gainful employment would indeed
be adding insult to injury.10
On its pronouncement that Article 202 (2) violated
the equal protection clause of the Constitution, the
trial court declared:
The application of the Anti-Vagrancy Law, crafted in
the 1930s, to our situation at present runs afoul of
the equal protection clause of the constitution as it
offers no reasonable classification between those
covered by the law and those who are not.
Class legislation is such legislation which denies
rights to one which are accorded to others, or inflicts
upon one individual a more severe penalty than is
imposed upon another in like case offending.
Applying this to the case at bar, since the definition
of Vagrancy under Article 202 of the Revised Penal
Code offers no guidelines or any other reasonable
indicators to differentiate those who have no visible
means of support by force of circumstance and those
who choose to loiter about and bum around, who are
the proper subjects of vagrancy legislation, it cannot
pass a judicial scrutiny of its constitutionality.11
Hence, this petition for review on certiorari raising
the sole issue of:
WHETHER THE REGIONAL TRIAL COURT
COMMITTED A REVERSIBLE ERROR IN
DECLARING UNCONSTITUTIONAL ARTICLE 202
(2) OF THE REVISED PENAL CODE12
Petitioner argues that every statute is presumed
valid and all reasonable doubts should be resolved in
favor of its constitutionality; that, citing Romualdez v.
Sandiganbayan,13 the overbreadth and vagueness
doctrines have special application to free-speech
cases only and are not appropriate for testing the
validity of penal statutes; that respondents failed to
overcome the presumed validity of the statute, failing
to prove that it was vague under the standards set
out by the Courts; and that the State may regulate
individual conduct for the promotion of public welfare
in the exercise of its police power.
On the other hand, respondents argue against the
limited application of the overbreadth and vagueness
doctrines. They insist that Article 202 (2) on its face
violates the constitutionally-guaranteed rights to due
process and the equal protection of the laws; that the
due process vagueness standard, as distinguished
from the free speech vagueness doctrine, is
adequate to declare Article 202 (2) unconstitutional
and void on its face; and that the presumption of
constitutionality was adequately overthrown.
The Court finds for petitioner.
The power to define crimes and prescribe their
corresponding penalties is legislative in nature and
inherent in the sovereign power of the state to
maintain social order as an aspect of police power.
The legislature may even forbid and penalize acts
formerly considered innocent and lawful provided
that no constitutional rights have been
abridged.14 However, in exercising its power to
declare what acts constitute a crime, the legislature
must inform the citizen with reasonable precision
what acts it intends to prohibit so that he may have a
certain understandable rule of conduct and know
what acts it is his duty to avoid.15 This requirement
has come to be known as the void-for-vagueness
doctrine which states that "a statute which either
forbids or requires the doing of an act in terms so
vague that men of common intelligence must
necessarily guess at its meaning and differ as to its
application, violates the first essential of due process
of law."16
In Spouses Romualdez v. COMELEC,17 the Court
recognized the application of the void-for-vagueness
doctrine to criminal statutes in appropriate cases.
The Court therein held:
At the outset, we declare that under these terms, the
opinions of the dissent which seek to bring to the
fore the purported ambiguities of a long list of
provisions in Republic Act No. 8189 can be deemed
as a facial challenge. An appropriate "as applied"
challenge in the instant Petition should be limited
only to Section 45 (j) in relation to Sections 10 (g)
and (j) of Republic Act No. 8189 – the provisions
upon which petitioners are charged. An expanded
examination of the law covering provisions which are
alien to petitioners’ case would be antagonistic to the
rudiment that for judicial review to be exercised,
there must be an existing case or controversy that is
appropriate or ripe for determination, and not
conjectural or anticipatory.18
The first statute punishing vagrancy – Act No. 519 –
was modeled after American vagrancy statutes and
passed by the Philippine Commission in 1902. The
Penal Code of Spain of 1870 which was in force in
this country up to December 31, 1931 did not contain
a provision on vagrancy.19 While historically an
Anglo-American concept of crime prevention, the law
on vagrancy was included by the Philippine
legislature as a permanent feature of the Revised
Penal Code in Article 202 thereof which, to repeat,
provides:
ART. 202. Vagrants and prostitutes; penalty. – The
following are vagrants:
1. Any person having no apparent means of
subsistence, who has the physical ability to
work and who neglects to apply himself or
herself to some lawful calling;
 2. Any person found loitering about public or
semi-public buildings or places, or tramping or
wandering about the country or the streets
without visible means of support;
3. Any idle or dissolute person who lodges in
houses of ill-fame; ruffians or pimps and those
who habitually associate with prostitutes;
4. Any person who, not being included in the
provisions of other articles of this Code, shall
be found loitering in any inhabited or
uninhabited place belonging to another without
any lawful or justifiable purpose;
5. Prostitutes.
For the purposes of this article, women who, for
money or profit, habitually indulge in sexual
intercourse or lascivious conduct, are deemed to be
prostitutes.
Any person found guilty of any of the offenses
covered by this article shall be punished by arresto
menor or a fine not exceeding 200 pesos, and in
case of recidivism, by arresto mayor in its medium
period to prision correccional in its minimum period
or a fine ranging from 200 to 2,000 pesos, or both, in
the discretion of the court.
In the instant case, the assailed provision is
paragraph (2), which defines a vagrant as any
person found loitering about public or semi-public
buildings or places, or tramping or wandering about
the country or the streets without visible means of
support. This provision was based on the second
clause of Section 1 of Act No. 519 which defined
"vagrant" as "every person found loitering about
saloons or dramshops or gambling houses, or
tramping or straying through the country without
visible means of support." The second clause was
essentially retained with the modification that the
places under which the offense might be committed
is now expressed in general terms – public or semi-
public places.
The Regional Trial Court, in asserting the
unconstitutionality of Article 202 (2), take support
mainly from the U.S. Supreme Court’s opinion in
the Papachristou v. City of Jacksonville20 case, which
in essence declares:
Living under a rule of law entails various
suppositions, one of which is that "[all persons] are
entitled to be informed as to what the State
commands or forbids." Lanzetta v. New Jersey, 306
U. S. 451, 306 U. S. 453.
Lanzetta is one of a well recognized group of cases
insisting that the law give fair notice of the offending
conduct. See Connally v. General Construction Co.,
269 U. S. 385, 269 U. S. 391; Cline v. Frink Dairy
Co., 274 U. S. 445; United States v. Cohen Grocery
Co., 255 U. S. 81. In the field of regulatory statutes
governing business activities, where the acts limited
are in a narrow category, greater leeway is allowed.
Boyce Motor Lines, Inc. v. United States, 342 U. S.
337; United States v. National Dairy Products Corp.,
372 U. S. 29; United States v. Petrillo, 332 U. S. 1.
The poor among us, the minorities, the average
householder, are not in business and not alerted to
the regulatory schemes of vagrancy laws; and we
assume they would have no understanding of their
meaning and impact if they read them. Nor are they
protected from being caught in the vagrancy net by
the necessity of having a specific intent to commit an
unlawful act. See Screws v. United States, 325 U. S.
91; Boyce Motor Lines, Inc. v. United States, supra.
The Jacksonville ordinance makes criminal activities
which, by modern standards, are normally innocent.
"Nightwalking" is one. Florida construes the
ordinance not to make criminal one night's
wandering, Johnson v. State, 202 So.2d at 855, only
the "habitual" wanderer or, as the ordinance
describes it, "common night walkers." We know,
however, from experience that sleepless people
often walk at night, perhaps hopeful that sleep-
inducing relaxation will result.
Luis Munoz-Marin, former Governor of Puerto Rico,
commented once that "loafing" was a national virtue
in his Commonwealth, and that it should be
encouraged. It is, however, a crime in Jacksonville.
xxxx
Persons "wandering or strolling" from place to place
have been extolled by Walt Whitman and Vachel
Lindsay. The qualification "without any lawful
purpose or object" may be a trap for innocent acts.
Persons "neglecting all lawful business and
habitually spending their time by frequenting . . .
places where alcoholic beverages are sold or
served" would literally embrace many members of
golf clubs and city clubs.
Walkers and strollers and wanderers may be going
to or coming from a burglary. Loafers or loiterers
may be "casing" a place for a holdup. Letting one's
wife support him is an intra-family matter, and
normally of no concern to the police. Yet it may, of
course, be the setting for numerous crimes.
The difficulty is that these activities are historically
part of the amenities of life as we have known them.
They are not mentioned in the Constitution or in the
Bill of Rights. These unwritten amenities have been,
in part, responsible for giving our people the feeling
of independence and self-confidence, the feeling of
creativity. These amenities have dignified the right of
dissent, and have honored the right to be
nonconformists and the right to defy submissiveness.
They have encouraged lives of high spirits, rather
than hushed, suffocating silence.
xxxx
Where the list of crimes is so all-inclusive and
generalized as the one in this ordinance, those
convicted may be punished for no more than
vindicating affronts to police authority:
"The common ground which brings such a motley
assortment of human troubles before the magistrates
in vagrancy-type proceedings is the procedural laxity
which permits 'conviction' for almost any kind of
conduct and the existence of the House of
Correction as an easy and convenient dumping-
ground for problems that appear to have no other
immediate solution." Foote, Vagrancy-Type Law and
Its Administration, 104 U.Pa.L.Rev. 603, 631.
xxxx
Another aspect of the ordinance's vagueness
appears when we focus not on the lack of notice
given a potential offender, but on the effect of the
unfettered discretion it places in the hands of the
Jacksonville police. Caleb Foote, an early student of
this subject, has called the vagrancy-type law as
offering "punishment by analogy." Such crimes,
though long common in Russia, are not compatible
with our constitutional system.
xxxx
A presumption that people who might walk or loaf or
loiter or stroll or frequent houses where liquor is sold,
or who are supported by their wives or who look
suspicious to the police are to become future
criminals is too precarious for a rule of law. The
implicit presumption in these generalized vagrancy
standards -- that crime is being nipped in the bud --
is too extravagant to deserve extended treatment. Of
course, vagrancy statutes are useful to the police. Of
course, they are nets making easy the roundup of
so-called undesirables. But the rule of law implies
equality and justice in its application. Vagrancy laws
of the Jacksonville type teach that the scales of
justice are so tipped that even-handed administration
of the law is not possible. The rule of law, evenly
applied to minorities as well as majorities, to the poor
as well as the rich, is the great mucilage that holds
society together.21
The underlying principles in Papachristou are that: 1)
the assailed Jacksonville ordinance "fails to give a
person of ordinary intelligence fair notice that his
contemplated conduct is forbidden by the statute;"
and 2) it encourages or promotes opportunities for
the application of discriminatory law enforcement.
The said underlying principle in Papachristou that the
Jacksonville ordinance, or Article 202 (2) in this
case, fails to give fair notice of what constitutes
forbidden conduct, finds no application here because
under our legal system, ignorance of the law
excuses no one from compliance therewith.22 This
principle is of Spanish origin, and we adopted it to
govern and limit legal conduct in this jurisdiction.
Under American law, ignorance of the law is merely
a traditional rule that admits of exceptions.23
Moreover, the Jacksonville ordinance was declared
unconstitutional on account of specific provisions
thereof, which are not found in Article 202 (2). The
ordinance (Jacksonville Ordinance Code § 257)
provided, as follows:
Rogues and vagabonds, or dissolute persons who
go about begging; common gamblers, persons who
use juggling or unlawful games or plays, common
drunkards, common night walkers, thieves, pilferers
or pickpockets, traders in stolen property, lewd,
wanton and lascivious persons, keepers of gambling
places, common railers and brawlers, persons
wandering or strolling around from place to place
without any lawful purpose or object, habitual loafers,
disorderly persons, persons neglecting all lawful
business and habitually spending their time by
frequenting houses of ill fame, gaming houses, or
places where alcoholic beverages are sold or
served, persons able to work but habitually living
upon the earnings of their wives or minor children
shall be deemed vagrants and, upon conviction in
the Municipal Court shall be punished as provided
for Class D offenses.
Thus, the U.S. Supreme Court in Jacksonville
declared the ordinance unconstitutional, because
such activities or habits as nightwalking, wandering
or strolling around without any lawful purpose or
object, habitual loafing, habitual spending of time at
places where alcoholic beverages are sold or
served, and living upon the earnings of wives or
minor children, which are otherwise common and
normal, were declared illegal. But these are
specific acts or activities not found in Article 202
(2). The closest to Article 202 (2) – "any person
found loitering about public or semi-public buildings
or places, or tramping or wandering about the
country or the streets without visible means of
support" – from the Jacksonville ordinance, would be
"persons wandering or strolling around from place to
place without any lawful purpose or object." But
these two acts are still not the same: Article 202 (2)
is qualified by "without visible means of support"
while the Jacksonville ordinance prohibits wandering
or strolling "without any lawful purpose or object,"
which was held by the U.S. Supreme Court to
constitute a "trap for innocent acts."
Under the Constitution, the people are guaranteed
the right to be secure in their persons, houses,
papers and effects against unreasonable searches
and seizures of whatever nature and for any
purpose, and no search warrant or warrant of arrest
shall issue except upon probable cause to be
determined personally by the judge after examination
under oath or affirmation of the complainant and the
witnesses he may produce, and particularly
describing the place to be searched and the persons
or things to be seized.24 Thus, as with any other act
or offense, the requirement of probable
cause provides an acceptable limit on police or
executive authority that may otherwise be abused in
relation to the search or arrest of persons found to
be violating Article 202 (2). The fear exhibited by the
respondents, echoing Jacksonville, that unfettered
discretion is placed in the hands of the police to
make an arrest or search, is therefore assuaged by
the constitutional requirement of probable cause,
which is one less than certainty or proof, but more
than suspicion or possibility.25
Evidently, the requirement of probable cause cannot
be done away with arbitrarily without pain of
punishment, for, absent this requirement, the
authorities are necessarily guilty of abuse. The
grounds of suspicion are reasonable when, in the
absence of actual belief of the arresting officers, the
suspicion that the person to be arrested is probably
guilty of committing the offense, is based on actual
facts, i.e., supported by circumstances sufficiently
strong in themselves to create the probable cause of
guilt of the person to be arrested. A reasonable
suspicion therefore must be founded on probable
cause, coupled with good faith of the peace officers
making the arrest.26
The State cannot in a cavalier fashion intrude into
the persons of its citizens as well as into their
houses, papers and effects. The constitutional
provision sheathes the private individual with an
impenetrable armor against unreasonable searches
and seizures. It protects the privacy and sanctity of
the person himself against unlawful arrests and other
forms of restraint, and prevents him from being
irreversibly cut off from that domestic security which
renders the lives of the most unhappy in some
measure agreeable.27
As applied to the instant case, it appears that the
police authorities have been conducting previous
surveillance operations on respondents prior to their
arrest. On the surface, this satisfies the probable
cause requirement under our Constitution. For this
reason, we are not moved by respondents’
trepidation that Article 202 (2) could have been a
source of police abuse in their case.
Since the Revised Penal Code took effect in 1932,
no challenge has ever been made upon the
constitutionality of Article 202 except now. Instead,
throughout the years, we have witnessed the streets
and parks become dangerous and unsafe, a haven
for beggars, harassing "watch-your-car" boys, petty
thieves and robbers, pickpockets, swindlers, gangs,
prostitutes, and individuals performing acts that go
beyond decency and morality, if not basic humanity.
The streets and parks have become the training
ground for petty offenders who graduate into
hardened and battle-scarred criminals. Everyday, the
news is rife with reports of innocent and hardworking
people being robbed, swindled, harassed or mauled
– if not killed – by the scourge of the streets. Blue
collar workers are robbed straight from withdrawing
hard-earned money from the ATMs (automated teller
machines); students are held up for having to use
and thus exhibit publicly their mobile phones; frail
and helpless men are mauled by thrill-seeking
gangs; innocent passers-by are stabbed to death by
rowdy drunken men walking the streets; fair-looking
or pretty women are stalked and harassed, if not
abducted, raped and then killed; robbers, thieves,
pickpockets and snatchers case streets and parks
for possible victims; the old are swindled of their life
savings by conniving streetsmart bilkers and con
artists on the prowl; beggars endlessly pester and
panhandle pedestrians and commuters, posing a
health threat and putting law-abiding drivers and
citizens at risk of running them over. All these
happen on the streets and in public places, day or
night.
The streets must be protected. Our people should
never dread having to ply them each day, or else we
can never say that we have performed our task to
our brothers and sisters. We must rid the streets of
the scourge of humanity, and restore order, peace,
civility, decency and morality in them.
This is exactly why we have public order laws, to
which Article 202 (2) belongs. These laws were
crafted to maintain minimum standards of
decency, morality and civility in human society.
These laws may be traced all the way back to
ancient times, and today, they have also come to be
associated with the struggle to improve the citizens’
quality of life, which is guaranteed by our
Constitution.28 Civilly, they are covered by the "abuse
of rights" doctrine embodied in the preliminary
articles of the Civil Code concerning Human
Relations, to the end, in part, that any person who
willfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public
policy shall compensate the latter for the
damage.29 This provision is, together with the
succeeding articles on human relations, intended to
embody certain basic principles "that are to be
observed for the rightful relationship between human
beings and for the stability of the social order."30
In civil law, for example, the summary remedy of
ejectment is intended to prevent criminal disorder
and breaches of the peace and to discourage those
who, believing themselves entitled to the possession
of the property, resort to force rather than to some
appropriate action in court to assert their
claims.31 Any private person may abate a public
nuisance which is specially injurious to him by
removing, or if necessary, by destroying the thing
which constitutes the same, without committing a
breach of the peace, or doing unnecessary injury.32
Criminally, public order laws encompass a whole
range of acts – from public indecencies and
immoralities, to public nuisances, to disorderly
conduct. The acts punished are made illegal by their
offensiveness to society’s basic sensibilities and their
adverse effect on the quality of life of the people of
society. For example, the issuance or making of a
bouncing check is deemed a public nuisance, a
crime against public order that must be abated.33 As
a matter of public policy, the failure to turn over the
proceeds of the sale of the goods covered by a trust
receipt or to return said goods, if not sold, is a public
nuisance to be abated by the imposition of penal
sanctions.34 Thus, public nuisances must be abated
because they have the effect of interfering with the
comfortable enjoyment of life or property by
members of a community.
Article 202 (2) does not violate the equal protection
clause; neither does it discriminate against the poor
and the unemployed. Offenders of public order laws
are punished not for their status, as for being poor or
unemployed, but for conducting themselves under
such circumstances as to endanger the public peace
or cause alarm and apprehension in the community.
Being poor or unemployed is not a license or a
justification to act indecently or to engage in immoral
conduct.
Vagrancy must not be so lightly treated as to be
considered constitutionally offensive. It is a public
order crime which punishes persons for conducting
themselves, at a certain place and time which orderly
society finds unusual, under such conditions that are
repugnant and outrageous to the common standards
and norms of decency and morality in a just, civilized
and ordered society, as would engender a justifiable
concern for the safety and well-being of members of
the community.
Instead of taking an active position declaring public
order laws unconstitutional, the State should train its
eye on their effective implementation, because it is in
this area that the Court perceives difficulties. Red
light districts abound, gangs work the streets in the
wee hours of the morning, dangerous robbers and
thieves ply their trade in the trains stations, drunken
men terrorize law-abiding citizens late at night and
urinate on otherwise decent corners of our streets.
Rugby-sniffing individuals crowd our national parks
and busy intersections. Prostitutes wait for
customers by the roadside all around the metropolis,
some even venture in bars and restaurants. Drug-
crazed men loiter around dark avenues waiting to
pounce on helpless citizens. Dangerous groups
wander around, casing homes and establishments
for their next hit. The streets must be made safe
once more. Though a man’s house is his
castle,35 outside on the streets, the king is fair game.
The dangerous streets must surrender to orderly
society.
Finally, we agree with the position of the State that
first and foremost, Article 202 (2) should be
presumed valid and constitutional. When confronted
with a constitutional question, it is elementary that
every court must approach it with grave care and
considerable caution bearing in mind that every
statute is presumed valid and every reasonable
doubt should be resolved in favor of its
constitutionality.36 The policy of our courts is to avoid
ruling on constitutional questions and to presume
that the acts of the political departments are valid in
the absence of a clear and unmistakable showing to
the contrary. To doubt is to sustain, this presumption
is based on the doctrine of separation of powers
which enjoins upon each department a becoming
respect for the acts of the other departments. The
theory is that as the joint act of Congress and the
President of the Philippines, a law has been carefully
studied, crafted and determined to be in accordance
with the fundamental law before it was finally
enacted.37
It must not be forgotten that police power is an
inherent attribute of sovereignty. It has been defined
as the power vested by the Constitution in the
legislature to make, ordain, and establish all manner
of wholesome and reasonable laws, statutes and
ordinances, either with penalties or without, not
repugnant to the Constitution, as they shall judge to
be for the good and welfare of the commonwealth,
and for the subjects of the same. The power is
plenary and its scope is vast and pervasive, reaching
and justifying measures for public health, public
safety, public morals, and the general welfare.38 As
an obvious police power measure, Article 202 (2)
must therefore be viewed in a constitutional light.
WHEREFORE, the petition is GRANTED. The
Decision of Branch 11 of the Regional Trial Court of
Davao City in Special Civil Case No. 30-500-2004
declaring Article 202, paragraph 2 of the Revised
Penal Code
UNCONSTITUTIONAL is REVERSED and SET
ASIDE.
Let the proceedings in Criminal Cases Nos. 115,716-
C-2003 and 115,717-C-2003 thus continue.
No costs.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 127980 December 19, 2007
DE LA SALLE UNIVERSITY, INC., EMMANUEL
SALES, RONALD HOLMES, JUDE DELA TORRE,
AMPARO RIO, CARMELITA QUEBENGCO,
AGNES YUHICO and JAMES YAP, petitioners,
vs.
THE COURT OF APPEALS, HON. WILFREDO D.
REYES, in his capacity as Presiding Judge of
Branch 36, Regional Trial Court of Manila, THE
COMMISSION ON HIGHER EDUCATION, THE
DEPARTMENT OF EDUCATION CULTURE AND
SPORTS, ALVIN AGUILAR, JAMES PAUL
BUNGUBUNG, RICHARD REVERENTE and
ROBERTO VALDES, JR., respondents.
DECISION
REYES, R.T., J.:
NAGTATAGIS sa kasong ito ang karapatang
mag-aral ng apat na estudyante na nasangkot sa
away ng dalawang fraternity at ang karapatang
akademiko ng isang pamantasan.
PRIVATE respondents Alvin Aguilar, James Paul
Bungubung, Richard Reverente and Roberto Valdes,
Jr. are members of Tau Gamma Phi Fraternity who
were expelled by the De La Salle University (DLSU)
and College of Saint Benilde (CSB)1 Joint Discipline
Board because of their involvement in an offensive
action causing injuries to petitioner James Yap and
three other student members of Domino Lux
Fraternity. This is the backdrop of the controversy
before Us pitting private respondents' right to
education vis-a-vis the University's right to academic
freedom.
ASSAILED in this Petition for Certiorari, Prohibition
and Mandamus under Rule 65 of the Rules of Court
are the following: (1) Resolution of the Court of
Appeals (CA) dated July 30, 1996 dismissing DLSU's
petition for certiorari against respondent Judge and
private respondents Aguilar, Bungubung, Reverente,
and Valdes, Jr.;2 (2) Resolution of the CA dated
October 15, 1996 denying the motion for
reconsideration;3 (3) Order dated January 7, 1997 of
the Regional Trial Court (RTC), Branch 36 Manila
granting private respondent Aguilar's motion to
reiterate writ of preliminary injunction;4 and (4)
Resolution No. 181-96 dated May 14, 1996 of the
Commission on Higher Education (CHED)
exonerating private respondent Aguilar and lowering
the penalties for the other private respondents from
expulsion to exclusion.5
 Factual Antecedents
Gleaned from the May 3, 1995 Decision of the
DLSU-CSB Joint Discipline Board, two violent
incidents on March 29, 1995 involving private
respondents occurred:
x x x From the testimonies of the complaining
witnesses, it appears that one week prior to
March 29, 1995, Mr. James Yap was eating
his dinner alone in Manang's Restaurant near
La Salle, when he overheard two men bad-
mouthing and apparently angry at Domino
Lux. He ignored the comments of the two.
When he arrived at his boarding house, he
mentioned the remarks to his two other brods
while watching television. These two brods
had earlier finished eating their dinner at
Manang's. Then, the three, together with four
other persons went back to Manang's and
confronted the two who were still in the
restaurant. By admission of respondent
Bungubung in his testimony, one of the two
was a member of the Tau Gamma Phi
Fraternity. There was no rumble or physical
violence then.
After this incident, a meeting was conducted
between the two heads of the fraternity
through the intercession of the Student
Council. The Tau Gamma Phi Fraternity was
asking for an apology. "Kailangan ng apology"
in the words of respondent Aguilar. But no
apology was made.
Then, 5 members of the Tau Gamma Phi
Fraternity went to the tambayan of the Domino
Lux Fraternity in the campus. Among them
were respondents Bungubung, Reverente and
Papio. They were looking for a person whose
description matched James Yap. According to
them, this person supposedly "nambastos ng
brod." As they could not find Mr. Yap, one of
them remarked "Paano ba iyan. Pasensiya na
lang."
Came March 29, 1995 and the following
events.
Ten minutes before his next class at 6:00 p.m.,
Mr. James Yap went out of the campus using
the Engineering Gate to buy candies across
Taft Avenue. As he was about to re-cross Taft
Avenue, he heard heavy footsteps at his back.
Eight to ten guys were running towards him.
He panicked. He did not know what to do.
Then, respondent Bungubung punched him in
the head with something heavy in his hands –
"parang knuckles." Respondents Reverente
and Lee were behind Yap, punching him.
Respondents Bungubung and Valdes who
were in front of him, were also punching him.
As he was lying on the street, respondent
Aguilar kicked him. People shouted; guards
arrived; and the group of attackers left.
Mr. Yap could not recognize the other
members of the group who attacked him. With
respect to respondent Papio, Mr. Yap said
"hindi ko nakita ang mukha niya, hindi ko
nakita sumuntok siya." What Mr. Yap saw was
a long haired guy also running with the group.
Two guards escorted Mr. Yap inside the
campus. At this point, Mr. Dennis Pascual was
at the Engineering Gate. Mr. Pascual
accompanied Yap to the university clinic;
reported the incident to the Discipline Office;
and informed his fraternity brods at their
tambayan. According to Mr. Pascual, their
head of the Domino Lux Fraternity said:
"Walang gagalaw. Uwian na lang."
Mr. Ericson Cano, who was supposed to hitch
a ride with Dennis Pascual, saw him under the
clock in Miguel Building. However, they did not
proceed directly for home. With a certain
Michael Perez, they went towards the direction
of Dagonoy Street because Mr. Pascual was
supposed to pick up a book for his friend from
another friend who lives somewhere in the
area.
As they were along Dagonoy Street, and
before they could pass the Kolehiyo ng Malate
Restaurant, Mr. Cano first saw several guys
inside the restaurant. He said not to mind them
and just keep on walking. However, the group
got out of the restaurant, among them
respondents Reverente, Lee and Valdes. Mr.
Cano told Mr. Lee: "Ayaw namin ng gulo." But,
respondent Lee hit Mr. Cano without
provocation. Respondent Reverente kicked
Mr. Pascual and respondent Lee also hit Mr.
Pascual. Mr. Cano and Mr. Perez managed to
run from the mauling and they were chased by
respondent Lee and two others.
Mr. Pascual was left behind. After respondent
Reverente first kicked him, Mr. Pascual was
ganged-upon by the rest. He was able to run,
but the group was able to catch up with him.
His shirt was torn and he was hit at the back of
his head with a lead pipe. Respondent Lee
who was chasing Cano and Perez, then
returned to Mr. Pascual.
Mr. Pascual identified respondents Reverente
and Lee, as among those who hit him.
Although Mr. Pascual did not see respondent
Valdes hit him, he identified respondent
Valdez (sic) as also one of the members of the
group.
 In fact, Mr. Cano saw respondent Valdes near
Mr. Pascual. He was almost near the corner of
Leon Guinto and Estrada; while respondent
Pascual who managed to run was stopped at
the end of Dagonoy along Leon Guinto.
Respondent Valdes shouted: "Mga putang-ina
niyo." Respondent Reverente hit Mr. Pascual
for the last time. Apparently being satisfied
with their handiwork, the group left. The
victims, Cano, Perez and Pascual proceeded
to a friend's house and waited for almost two
hours, or at around 8:00 in the evening before
they returned to the campus to have their
wounds treated. Apparently, there were three
cars roaming the vicinity.6
The mauling incidents were a result of a fraternity
war. The victims, namely: petitioner James Yap and
Dennis Pascual, Ericson Cano, and Michael Perez,
are members of the "Domino Lux Fraternity," while
the alleged assailants, private respondents Alvin
Aguilar, James Paul Bungubung, Richard Reverente
and Roberto Valdes, Jr. are members of "Tau
Gamma Phi Fraternity," a rival fraternity.
The next day, March 30, 1995, petitioner Yap lodged
a complaint7 with the Discipline Board of DLSU
charging private respondents with "direct assault."
Similar complaints8 were also filed by Dennis
Pascual and Ericson Cano against Alvin Lee and
private respondents Valdes and Reverente. Thus,
cases entitled "De La Salle University and College of
St. Benilde v. Alvin Aguilar (AB-BSM/9152105),
James Paul Bungubung (AB-PSM/9234403), Robert
R. Valdes, Jr. (BS-BS-APM/9235086), Alvin Lee
(EDD/9462325), Richard Reverente (AB-
MGT/9153837) and Malvin A. Papio (AB-
MGT/9251227)" were docketed as Discipline Case
No. 9495-3-25121.
The Director of the DLSU Discipline Office sent
separate notices to private respondents Aguilar,
Bungubung and Valdes, Jr. and Reverente informing
them of the complaints and requiring them to
answer. Private respondents filed their respective
answers.9
As it appeared that students from DLSU and
CSB10 were involved in the mauling incidents, a joint
DLSU-CSB Discipline Board11 was formed to
investigate the incidents. Thus, petitioner Board
Chairman Emmanuel Sales sent notices of
hearing12 to private respondents on April 12, 1995.
Said notices uniformly stated as follows:
Please be informed that a joint and expanded
Discipline Board had been constituted to hear
and deliberate the charge against you for
violation of CHED Order No. 4 arising from the
written complaints of James Yap, Dennis C.
Pascual, and Ericson Y. Cano.
 You are directed to appear at the hearing of
the Board scheduled on April 19, 1995 at 9:00
a.m. at the Bro. Connon Hall for you and your
witnesses to give testimony and present
evidence in your behalf. You may be assisted
by a lawyer when you give your testimony or
those of your witnesses.
On or before April 18, 1995, you are further
directed to provide the Board, through the
Discipline Office, with a list of your witnesses
as well as the sworn statement of their
proposed testimony.
Your failure to appear at the scheduled
hearing or your failure to submit the list of
witnesses and the sworn statement of their
proposed testimony will be considered a
waiver on your part to present evidence and
as an admission of the principal act
complained of.
For your strict compliance.13
During the proceedings before the Board on April 19
and 28, 1995, private respondents interposed the
common defense of alibi, summarized by the DLSU-
CSB Joint Discipline Board as follows:
First, in the case of respondent Bungubung,
March 29, 1995 was one of the few instances
when he was picked-up by a driver, a certain
Romeo S. Carillo. Most of the time,
respondent Bungubung goes home alone sans
driver. But on this particular date, respondent
Bungubung said that his dad asked his
permission to use the car and thus, his dad
instructed this driver Carillo to pick-up his son.
Mr. Carillo is not a family driver, but works
from 8:00 a.m. to 5:00 p.m. for the Philippine
Ports Authority where the elder Bungubung is
also employed.
Thus, attempting to corroborate the alibi of
respondent Bungubung, Mr. Carillo said that
he arrived at La Salle at 4:56 p.m.; picked-up
respondent at 5:02 p.m.; took the Roxas Blvd.
route towards respondent's house in BF
Parañaque (on a Wednesday in Baclaran);
and arrived at the house at 6:15 p.m.
Respondent Bungubung was dropped-off in
his house, and taking the same route back,
Mr. Carillo arrived at the South Harbor at 6:55
p.m. the Philippine Ports Authority is located at
the South Harbor.14
xxxx
Secondly, respondent Valdes said that he was
with his friends at McDonald's Taft just before
6:00 p.m. of March 29, 1995. He said that he
left McDonald at 5:50 p.m. together to get
some medicine at the university clinic for his
throat irritation. He said that he was at the
clinic at 5:52 p.m. and went back to McDonald,
all within a span of 3 or even 4 minutes.
Two witnesses, a certain Sharon Sia and the
girlfriend of respondent Valdes, a certain
Jorgette Aquino, attempted to corroborate
Valdez' alibi.15
xxxx
Third, respondent Reverente told that (sic) the
Board that he was at his home at 5:00 p.m. of
March 29, 1995. He said that he was given the
responsibility to be the paymaster of the
construction workers who were doing some
works in the apartment of his parents.
Although he had classes in the evening, the
workers according to him would wait for him
sometimes up to 9:00 p.m. when he arrives
from his classes. The workers get paid
everyday.
Respondent Reverente submitted an affidavit,
unsigned by the workers listed there,
supposedly attesting to the fact that he paid
the workers at the date and time in question.16
xxxx
Fourth, respondent Aguilar "solemnly sw[ore]
that [he] left DLSU at 5:00 p.m. for Camp
Crame for a meeting with some of the officers
that we were preparing."17
On May 3, 1995, the DLSU-CSB Joint Discipline
Board issued a Resolution18 finding private
respondents guilty. They were meted the supreme
penalty of automatic expulsion,19 pursuant to CHED
Order No. 4.20 The dispositive part of the resolution
reads:
WHEREFORE, considering all the foregoing,
the Board finds respondents ALVIN AGUILAR
(AB-BSM/9152105), JAMES PAUL
BUNGUBUNG (AB-PSM/9234403), ALVIN
LEE (EDD/94623250) and RICHARD V.
REVERENTE (AB-MGT/9153837) guilty of
having violated CHED Order No. 4 and
thereby orders their automatic expulsion.
In the case of respondent MALVIN A. PAPIO
(AB-MGT/9251227), the Board acquits him of
the charge.
SO ORDERED.21
Private respondents separately moved for
reconsideration22 before the Office of the Senior
Vice-President for Internal Operations of DLSU. The
motions were all denied in a Letter-
Resolution23 dated June 1, 1995.
On June 5, 1995, private respondent Aguilar filed
with the RTC, Manila, against petitioners a petition
for certiorari and injunction under Rule 65 of the
Rules of Court with prayer for temporary restraining
order (TRO) and/or writ of preliminary injunction. It
was docketed as Civil Case No. 95-74122 and
assigned to respondent Judge of Branch 36. The
petition essentially sought to annul the May 3, 1995
Resolution of the DLSU-CSB Joint Discipline Board
and the June 1, 1995 Letter-Resolution of the Office
of the Senior Vice-President for Internal Affairs.
The following day, June 6, 1995, respondent Judge
issued a TRO24 directing DLSU, its subordinates,
agents, representatives and/or other persons acting
for and in its behalf to refrain and desist from
implementing Resolution dated May 3, 1995 and
Letter-Resolution dated June 1, 1995 and to
immediately desist from barring the enrollment of
Aguilar for the second term of school year (SY)
1995.
Subsequently, private respondent Aguilar filed an ex
parte motion to amend his petition to correct an
allegation in paragraph 3.2125 of his original petition.
Respondent Judge amended the TRO26 to conform
to the correction made in the amended petition.27
On June 7, 1995, the CHED directed DLSU to
furnish it with copies of the case records of Discipline
Case No. 9495-3-25121,28 in view of the authority
granted to it under Section 77(c) of the Manual of
Regulations for Private Schools (MRPS).
On the other hand, private respondents Bungubung
and Reverente, and later, Valdes, filed petitions-in-
intervention29 in Civil Case No. 95-74122.
Respondent Judge also issued corresponding
temporary restraining orders to compel petitioner
DLSU to admit said private respondents.
On June 19, 1995, petitioner Sales filed a motion to
dismiss30 in behalf of all petitioners, except James
Yap. On June 20, 1995, petitioners filed a
supplemental motion to dismiss31 the petitions-in-
intervention.
On September 20, 1995, respondent Judge issued
an Order32 denying petitioners' (respondents there)
motion to dismiss and its supplement, and granted
private respondents' (petitioners there) prayer for a
writ of preliminary injunction. The pertinent part of
the Order reads:
For this purpose, respondent, its agents,
representatives or any and all other persons
acting for and in its behalf is/are restrained
and enjoined from –
 1. Implementing and enforcing the
Resolution dated May 3, 1995 ordering
the automatic expulsion of petitioner and
the petitioners-in-intervention from the
De La Salle University and the letter-
resolution dated June 1, 1995, affirming
the Resolution dated May 3, 1995; and
2. Barring the enrolment of petitioner
and petitioners-in-intervention in the
courses offered at respondent De La
Salle University and to immediately
allow them to enroll and complete their
respective courses/degrees until their
graduation thereat in accordance with
the standards set by the latter.
WHEREFORE, the ancillary remedy prayed
for is granted. Respondent, its agents,
representatives, or any and all persons acting
for and its behalf are hereby restrained and
enjoyed from:
1. Implementing and enforcing the
Resolution dated May 3, 1995 ordering
the automatic expulsion of petitioner and
petitioners-in-intervention and the
Letter-Resolution dated June 1, 1995;
and
Despite the said order, private respondent Aguilar
was refused enrollment by petitioner DLSU when he
2. Barring the enrollment of petitioner
and petitioners-in-intervention in the
courses offered at respondent (De La
Salle University) and to forthwith allow
all said petitioner and petitioners-in-
intervention to enroll and complete their
respective courses/degrees until their
graduation thereat.
The Writ of Preliminary Injunction shall take
effect upon petitioner and petitioners-in-
intervention posting an injunctive bond in the
amount of P15,000.00 executed in favor of
respondent to the effect that petitioner and
petitioners-in-intervention will pay to
respondent all damages that the latter may
suffer by reason of the injunction if the Court
will finally decide that petitioner and
petitioners-in-intervention are not entitled
thereto.
The motion to dismiss and the supplement
thereto is denied for lack of merit.
Respondents are directed to file their Answer
to the Petition not later than fifteen (15) days
from receipt thereof.
SO ORDERED.33
attempted to enroll on September 22, 1995 for the
second term of SY 1995-1996. Thus, on September
25, 1995, Aguilar filed with respondent Judge an
urgent motion to cite petitioners (respondents there)
in contempt of court.34 Aguilar also prayed that
petitioners be compelled to enroll him at DLSU in
accordance with respondent Judge's Order dated
September 20, 1995. On September 25, 1995,
respondent Judge issued35 a writ of preliminary
injunction, the relevant portion of which reads:
IT IS HEREBY ORDERED by the undersigned
of the REGIONAL TRIAL COURT OF MANILA
that until further orders, you the said DE LA
SALLE University as well as your
subordinates, agents, representatives,
employees and any other person assisting or
acting for or on your behalf, to immediately
desist from implementing the Resolution dated
May 3, 1995 ordering the automatic expulsion
of petitioner and the intervenors in DLSU, and
the letter-resolution dated June 1, 1995
affirming the said Resolution of May 3, 1995
and to immediately desist from barring the
enrolment of petitioner and intervenors in the
courses offered at DLSU and to allow them to
enroll and complete their degree courses until
their graduation from said school.36
On October 16, 1995, petitioner DLSU filed with the
CA a petition for certiorari37 (CA-G.R. SP No. 38719)
with prayer for a TRO and/or writ of preliminary
injunction to enjoin the enforcement of respondent
Judge's September 20, 1995 Order and writ of
preliminary injunction dated September 25, 1995.
On April 12, 1996, the CA granted petitioners' prayer
for preliminary injunction.
On May 14, 1996, the CHED issued its questioned
Resolution No. 181-96, summarily disapproving
the penalty of expulsion for all private
respondents. As for Aguilar, he was to be
reinstated, while other private respondents were
to be excluded.38 The Resolution states:
RESOLUTION 181-96
RESOLVED THAT THE REQUEST OF THE
DE LA SALLE UNIVERSITY (DLSU), TAFT
AVENUE, MANILA FOR THE APPROVAL OF
THE PENALTY OF EXPULSION IMPOSED
ON MR. ALVIN AGUILAR, JAMES PAUL
BUNGUBUNG, ROBERT R. VALDES, JR.,
ALVIN LEE AND RICHARD V. REVERENTE
BE, AS IT IS HEREBY IS, DISAPPROVED.
RESOLVED FURTHER, THAT THE
COMMISSION DIRECT THE DLSU TO
IMMEDIATELY EFFECT THE
REINSTATEMENT OF MR. AGUILAR AND
THE LOWERING OF THE PENALTY OF MR.
 JAMES PAUL BUNGUBUNG, MR. ROBER R.
VALDEZ, JR., (sic) MR. ALVIN LEE AND MR.
RICHARD V. REVERENTE FROM
EXPULSION TO EXCLUSION.39
Despite the directive of CHED, petitioner DLSU
again prevented private respondent Aguilar from
enrolling and/or attending his classes, prompting his
lawyer to write several demand letters40 to petitioner
DLSU. In view of the refusal of petitioner DLSU to
enroll private respondent Aguilar, CHED wrote a
letter dated June 26, 1996 addressed to petitioner
Quebengco requesting that private respondent
Aguilar be allowed to continue attending his classes
pending the resolution of its motion for
reconsideration of Resolution No. 181-96. However,
petitioner Quebengco refused to do so, prompting
CHED to promulgate an Order dated September 23,
1996 which states:
Acting on the above-mentioned request of Mr.
Aguilar through counsel enjoining De La Salle
University (DLSU) to comply with CHED
Resolution 181-96 (Re: Expulsion Case of
Alvin Aguilar, et al. v. DLSU) directing DLSU to
reinstate Mr. Aguilar and finding the urgent
request as meritorious, there being no other
plain and speedy remedy available,
considering the set deadline for enrollment this
current TRIMESTER, and in order to prevent
further prejudice to his rights as a student of
the institution, DLSU, through the proper
school authorities, is hereby directed to allow
Mr. Alvin Aguilar to provisionally enroll,
pending the Commission's Resolution of the
instant Motion for Reconsideration filed by
DLSU.
SO ORDERED.41
Notwithstanding the said directive, petitioner DLSU,
through petitioner Quebengco, still refused to allow
private respondent Aguilar to enroll. Thus, private
respondent Aguilar's counsel wrote another demand
letter to petitioner DLSU.42
Meanwhile, on June 3, 1996, private respondent
Aguilar, using CHED Resolution No. 181-96, filed a
motion to dismiss43 in the CA, arguing that CHED
Resolution No. 181-96 rendered the CA case moot
and academic.
On July 30, 1996, the CA issued its questioned
resolution granting the motion to dismiss of
private respondent Aguilar, disposing thus:
THE FOREGOING CONSIDERED, dismissal
of herein petition is hereby directed.
SO ORDERED.44
On October 15, 1996, the CA issued its resolution
denying petitioners' motion for reconsideration,
as follows:
It is obvious to Us that CHED Resolution No.
181-96 is immediately executory in character,
the pendency of a Motion for Reconsideration
notwithstanding.
After considering the Opposition and for lack
of merit, the Motion for Reconsideration is
hereby denied.
SO ORDERED.45
On October 28, 1996, petitioners requested transfer
of case records to the Department of Education,
Culture and Sports (DECS) from the
CHED.46 Petitioners claimed that it is the DECS, not
CHED, which has jurisdiction over expulsion cases,
thus, necessitating the transfer of the case records of
Discipline Case No. 9495-3-25121 to the DECS.
On November 4, 1996, in view of the dismissal of the
petition for certiorari in CA-G.R. SP No. 38719 and
the automatic lifting of the writ of preliminary
injunction, private respondent Aguilar filed an urgent
motion to reiterate writ of preliminary injunction dated
September 25, 1995 before respondent RTC Judge
of Manila.47
On January 7, 1997, respondent Judge issued its
questioned order granting private respondent
Aguilar's urgent motion to reiterate preliminary
injunction. The pertinent portion of the order reads:
In light of the foregoing, petitioner Aguilar's
urgent motion to reiterate writ of preliminary
injunction is hereby granted, and respondents'
motion to dismiss is denied.
The writ of preliminary injunction dated
September 25, 1995 is declared to be in force
and effect.
Let a copy of this Order and the writ be served
personally by the Court's sheriff upon the
respondents at petitioners' expense.
SO ORDERED.48
Accordingly, private respondent Aguilar was allowed
to conditionally enroll in petitioner DLSU, subject to
the continued effectivity of the writ of preliminary
injunction dated September 25, 1995 and to the
outcome of Civil Case No. 95-74122.
On February 17, 1997, petitioners filed the instant
petition.
On June 15, 1998, We issued a TRO49 as prayed for
by the urgent motion for the issuance of a
TRO50 dated June 4, 1998 of petitioners, and
enjoined respondent Judge from implementing the
writ of preliminary injunction dated September 25,
1995 issued in Civil Case No. 95-74122, effective
immediately and until further orders from this Court.
On March 27, 2006, private respondent Aguilar filed
his manifestation51 stating that he has long
completed his course at petitioner DLSU. He finished
and passed all his enrolled subjects for the second
trimester of 1997-1998, as indicated in his transcript
of records52 issued by DLSU. However, despite
having completed all the academic requirements for
his course, DLSU has not issued a certificate of
completion/graduation in his favor.
Issues
We are tasked to resolve the following issues:
1. Whether it is the DECS or the CHED which
has legal authority to review decisions of
institutions of higher learning that impose
disciplinary action on their students found
violating disciplinary rules.
2. Whether or not petitioner DLSU is within its
rights in expelling private respondents.
2.a Were private respondents accorded
due process of law?
2.b Can petitioner DLSU invoke its right
to academic freedom?
2.c Was the guilt of private respondents
proven by substantial evidence?
3. Whether or not the penalty imposed by
DLSU on private respondents is proportionate
to their misdeed.
Our Ruling
Prefatorily, there is merit in the observation of
petitioners53 that while CHED Resolution No. 181-96
disapproved the expulsion of other private
respondents, it nonetheless authorized their
exclusion from petitioner DLSU. However, because
of the dismissal of the CA case, petitioner DLSU is
now faced with the spectacle of having two different
directives from the CHED and the respondent Judge
– CHED ordering the exclusion of private
respondents Bungubung, Reverente, and Valdes,
Jr., and the Judge ordering petitioner DLSU to allow
them to enroll and complete their degree courses
until their graduation.
This is the reason We opt to decide the whole case
on the merits, brushing aside technicalities, in order
to settle the substantial issues involved. This Court
has the power to take cognizance of the petition at
bar due to compelling reasons, and the nature and
importance of the issues raised warrant the
immediate exercise of Our jurisdiction.54 This is in
consonance with our case law now accorded near-
religious reverence that rules of procedure are but
tools designed to facilitate the attainment of justice,
such that when its rigid application tends to frustrate
rather than promote substantial justice, this Court
has the duty to suspend their operation.55
I. It is the CHED, not DECS, which has the
power of supervision and review over
disciplinary cases decided by institutions
of higher learning.
Ang CHED, hindi ang DECS, ang may
kapangyarihan ng pagsubaybay at pagrepaso sa
mga desisyong pandisiplina ng mga institusyon
ng mas mataas na pag-aaral.
Petitioners posit that the jurisdiction and duty to
review student expulsion cases, even those involving
students in secondary and tertiary levels, is vested in
the DECS not in the CHED. In support of their
stance, petitioners cite Sections 4,56 15(2) &
(3),57 54,58 57(3)59 and 7060 of Batas Pambansa (B.P.)
Blg. 232, otherwise known as the "Education Act of
1982."
According to them, Republic Act (R.A.) No. 7722 did
not transfer to the CHED the DECS' power of
supervision/review over expulsion cases involving
institutions of higher learning. They say that unlike
B.P. Blg. 232, R.A. No. 7722 makes no reference to
the right and duty of learning institutions to develop
moral character and instill discipline among its
students. The clear concern of R.A. No. 7722 in the
creation of the CHED was academic, i.e., the
formulation, recommendation, setting, and
development of academic plans, programs and
standards for institutions of higher learning. The
enumeration of CHED's powers and functions under
Section 8 does not include supervisory/review
powers in student disciplinary cases. The reference
in Section 3 to CHED's "coverage" of institutions of
higher education is limited to the powers and
functions specified in Section 8. The Bureau of
Higher Education, which the CHED has replaced and
whose functions and responsibilities it has taken
over, never had any authority over student
disciplinary cases.
We cannot agree.
On May 18, 1994, Congress approved R.A. No.
7722, otherwise known as "An Act Creating the
Commission on Higher Education, Appropriating
Funds Thereof and for other purposes."
Section 3 of the said law, which paved the way for
the creation of the CHED, provides:
 Section 3. Creation of the Commission on
Higher Education. – In pursuance of the
abovementioned policies, the Commission on
Higher Education is hereby created,
hereinafter referred to as Commission.
The Commission shall be independent and
separate from the Department of Education,
Culture and Sports (DECS) and attached to
the office of the President for administrative
purposes only. Its coverage shall be both
public and private institutions of higher
education as well as degree-granting
programs in all post secondary educational
institutions, public and private.
The powers and functions of the CHED are
enumerated in Section 8 of R.A. No. 7722. They
include the following:
Sec. 8. Powers and functions of the
Commission. – The Commission shall have
the following powers and functions:
xxxx
n) promulgate such rules and regulations and
exercise such other powers and functions as
may be necessary to carry out effectively the
purpose and objectives of this Act; and
o) perform such other functions as may be
necessary for its effective operations and for
the continued enhancement of growth or
development of higher education.
Clearly, there is no merit in the contention of
petitioners that R.A. No. 7722 did not transfer to the
CHED the DECS' power of supervision/review over
expulsion cases involving institutions of higher
learning.
First, the foregoing provisions are all-embracing.
They make no reservations of powers to the DECS
insofar as institutions of higher learning are
concerned. They show that the authority and
supervision over all public and private institutions of
higher education, as well as degree-granting
programs in all post-secondary educational
institutions, public and private, belong to the CHED,
not the DECS.
Second, to rule that it is the DECS which has
authority to decide disciplinary cases involving
students on the tertiary level would render
nugatory the coverage of the CHED, which is "both
public and private institutions of higher education as
well as degree granting programs in all post
secondary educational institutions, public and
private." That would be absurd.
It is of public knowledge that petitioner DLSU is a
private educational institution which offers tertiary
degree programs. Hence, it is under the CHED
authority.
Third, the policy of R.A. No. 772261 is not only the
protection, fostering and promotion of the right of all
citizens to affordable quality education at all levels
and the taking of appropriate steps to ensure that
education shall be accessible to all. The law
is likewise concerned with ensuring and protecting
academic freedom and with promoting its exercise
and observance for the continued intellectual growth
of students, the advancement of learning and
research, the development of responsible and
effective leadership, the education of high-level and
middle-level professionals, and the enrichment of our
historical and cultural heritage.
It is thus safe to assume that when Congress passed
R.A. No. 7722, its members were aware that
disciplinary cases involving students on the tertiary
level would continue to arise in the future, which
would call for the invocation and exercise of
institutions of higher learning of their right to
academic freedom.
Fourth, petitioner DLSU cited no authority in its bare
claim that the Bureau of Higher Education, which
CHED replaced, never had authority over student
disciplinary cases. In fact, the responsibilities of
other government entities having functions similar to
those of the CHED were transferred to the CHED.62
Section 77 of the MRPS63 on the process of review in
student discipline cases should therefore be read in
conjunction with the provisions of R.A. No. 7722.
Fifth, Section 18 of R.A. No. 7722 is very clear in
stating that "[j]urisdiction over DECS-supervised
or chartered state-supported post-secondary
degree-granting vocational and tertiary
institutions shall be transferred to the
Commission [On Higher Education]." This
provision does not limit or distinguish that what is
being transferred to the CHED is merely the
formulation, recommendation, setting and
development of academic plans, programs and
standards for institutions of higher learning, as what
petitioners would have us believe as the only
concerns of R.A. No. 7722. Ubi lex non distinguit nec
nos distinguere debemus: Where the law does not
distinguish, neither should we.
To Our mind, this provision, if not an explicit grant
of jurisdiction to the CHED, necessarily
includes the transfer to the CHED of any jurisdiction
which the DECS might have possessed by virtue of
B.P. Blg. 232 or any other law or rule for that matter.
IIa. Private respondents were accorded due
process of law.
Ang mga private respondents ay nabigyan ng
tamang proseso ng batas.
The Due Process Clause in Article III, Section 1 of
the Constitution embodies a system of rights based
on moral principles so deeply imbedded in the
traditions and feelings of our people as to be
deemed fundamental to a civilized society as
conceived by our entire history.64 The constitutional
behest that no person shall be deprived of life, liberty
or property without due process of law is solemn and
inflexible.65
In administrative cases, such as investigations of
students found violating school discipline, "[t]here are
withal minimum standards which must be met before
to satisfy the demands of procedural due process
and these are: that (1) the students must be
informed in writing of the nature and cause of any
accusation against them; (2) they shall have the right
to answer the charges against them and with the
assistance if counsel, if desired; (3) they shall be
informed of the evidence against them; (4) they shall
have the right to adduce evidence in their own
behalf; and (5) the evidence must be duly considered
by the investigating committee or official designated
by the school authorities to hear and decide the
case."66
Where a party was afforded an opportunity to
participate in the proceedings but failed to do so, he
cannot complain of deprivation of due
process.67 Notice and hearing is the bulwark of
administrative due process, the right to which is
among the primary rights that must be respected
even in administrative proceedings.68 The essence of
due process is simply an opportunity to be heard, or
as applied to administrative proceedings, an
opportunity to explain one's side or an opportunity to
seek reconsideration of the action or ruling
complained of.69 So long as the party is given the
opportunity to advocate her cause or defend her
interest in due course, it cannot be said that there
was denial of due process.70
A formal trial-type hearing is not, at all times and in
all instances, essential to due process – it is enough
that the parties are given a fair and reasonable
opportunity to explain their respective sides of the
controversy and to present supporting evidence on
which a fair decision can be based.71 "To be heard"
does not only mean presentation of testimonial
evidence in court – one may also be heard through
pleadings and where the opportunity to be heard
through pleadings is accorded, there is no denial of
due process.72
Private respondents were duly informed in writing of
the charges against them by the DLSU-CSB Joint
Discipline Board through petitioner Sales. They were
given the opportunity to answer the charges against
them as they, in fact, submitted their respective
answers. They were also informed of the evidence
presented against them as they attended all the
hearings before the Board. Moreover, private
respondents were given the right to adduce evidence
on their behalf and they did. Lastly, the Discipline
Board considered all the pieces of evidence
submitted to it by all the parties before rendering its
resolution in Discipline Case No. 9495-3-25121.
Private respondents cannot claim that they were
denied due process when they were not allowed to
cross-examine the witnesses against them. This
argument was already rejected in Guzman v.
National University73 where this Court held that "x x x
the imposition of disciplinary sanctions requires
observance of procedural due process. And it bears
stressing that due process in disciplinary cases
involving students does not entail proceedings and
hearings similar to those prescribed for actions and
proceedings in courts of justice. The proceedings in
student discipline cases may be summary; and cross
examination is not, x x x an essential part thereof."
IIb. Petitioner DLSU, as an institution of higher
learning, possesses academic freedom which
includes determination of who to admit for study.
Ang petitioner DLSU, bilang institusyon ng mas
mataas na pag-aaral, ay nagtataglay ng
kalayaang akademiko na sakop ang karapatang
pumili ng mga mag-aaral dito.
Section 5(2), Article XIV of the Constitution
guaranties all institutions of higher learning academic
freedom. This institutional academic freedom
includes the right of the school or college to decide
for itself, its aims and objectives, and how best to
attain them free from outside coercion or interference
save possibly when the overriding public interest
calls for some restraint.74 According to present
jurisprudence, academic freedom encompasses the
independence of an academic institution to
determine for itself (1) who may teach, (2) what may
be taught, (3) how it shall teach, and (4) who may be
admitted to study.75
It cannot be gainsaid that "the school has an interest
in teaching the student discipline, a necessary, if not
indispensable, value in any field of learning. By
instilling discipline, the school teaches discipline.
Accordingly, the right to discipline the student
likewise finds basis in the freedom "what to
teach."76 Indeed, while it is categorically stated under
the Education Act of 1982 that students have a right
"to freely choose their field of study, subject to
existing curricula and to continue their course therein
up to graduation,"77 such right is subject to the
established academic and disciplinary standards laid
down by the academic institution. Petitioner DLSU,
therefore, can very well exercise its academic
freedom, which includes its free choice of students
for admission to its school.
IIc. The guilt of private respondents Bungubung,
Reverente and Valdes, Jr. was proven by
substantial evidence.
Ang pagkakasala ng private respondents na sina
Bungubung, Reverente at Valdes, Jr. ay
napatunayan ng ebidensiyang substansyal.
As has been stated earlier, private respondents
interposed the common defense of alibi. However, in
order that alibi may succeed as a defense, "the
accused must establish by clear and convincing
evidence (a) his presence at another place at the
time of the perpetration of the offense and (b) the
physical impossibility of his presence at the scene of
the crime."78
On the other hand, the defense of alibi may not be
successfully invoked where the identity of the
assailant has been established by
witnesses.79 Positive identification of accused where
categorical and consistent, without any showing of ill
motive on the part of the eyewitness testifying,
should prevail over the alibi and denial of appellants
whose testimonies are not substantiated by clear
and convincing evidence.80 Well-settled is the rule
that denial and alibi, being weak defenses, cannot
overcome the positive testimonies of the offended
parties.81
Courts reject alibi when there are credible
eyewitnesses to the crime who can positively identify
the accused.82 Alibi is an inherently weak defense
and courts must receive it with caution because one
can easily fabricate an alibi.83 Jurisprudence holds
that denial, like alibi, is inherently weak and crumbles
in light of positive declarations of truthful witnesses
who testified on affirmative matters that accused
were at the scene of the crime and were the victim's
assailants. As between categorical testimonies that
ring of truth on one hand and a bare denial on the
other, the former must prevail.84 Alibi is the weakest
of all defenses for it is easy to fabricate and difficult
to disprove, and it is for this reason that it cannot
prevail over the positive identification of accused by
the witnesses.85
The required proof in administrative cases, such as
in student discipline cases, is neither proof beyond
reasonable doubt nor preponderance of evidence but
only substantial evidence. According to Ang Tibay v.
Court of Industrial Relations,86 it means "such
reasonable evidence as a reasonable mind might
accept as adequate to support a conclusion."
Viewed from the foregoing, We reject the alibi of
private respondents Bungubung, Valdes Jr., and
Reverente. They were unable to show convincingly
1aw phi1
that they were not at the scene of the crime on
March 29, 1995 and that it was impossible for them
to have been there. Moreover, their alibi cannot
prevail over their positive identification by the victims.
We hark back to this Court's pronouncement
affirming the expulsion of several students found
guilty of hazing:
No one can be so myopic as to doubt that the
immediate reinstatement of respondent
students who have been investigated and
found guilty by the Disciplinary Board to have
violated petitioner university's disciplinary rules
and standards will certainly undermine the
authority of the administration of the school.
This we would be most loathe to do.
More importantly, it will seriously impair
petitioner university's academic freedom which
has been enshrined in the 1935, 1973 and the
present 1987 Constitution.87
Certainly, private respondents Bungubung,
Reverente and Valdes, Jr. do not deserve to claim a
venerable institution as their own, for they may
foreseeably cast a malevolent influence on the
students currently enrolled, as well as those who
come after them.88 It must be borne in mind that
universities are established, not merely to develop
the intellect and skills of the studentry, but to
inculcate lofty values, ideals and attitudes; nay, the
development, or flowering if you will, of the total
man.89
As for private respondent Aguilar, however, We are
inclined to give credence to his alibi that he was at
Camp Crame in Quezon City at the time of the
incident in question on March 29, 1995. This claim
was amply corroborated by the certification that he
submitted before the DLSU-CSB Joint Discipline
Board, to wit:
CERTIFICATION
TO WHOM THIS MAY CONCERN:
We, the undersigned, hereby declare
and affirm by way of this Certification
that sometime on March 29, 1995, at
about and between 4:30 P.M. and 5:30
P.M., we were together with Alvin A.
Aguilar, at Kiangan Hall, inside Camp
Crame, Quezon City, meeting in
connection with an affair of our class
known as Class 7, Batch 89 of the
Philippine Constabulary discussing on
the proposed sponsorship of TAU
GAMMA PHI from said Batch '89 affair.
That the meeting was terminated at about 6:30
P.M. that evening and Alvin Aguilar had asked
 our permission to leave and we saw him leave
Camp Crame, in his car with the driver.
April 18, 1995, Camp Crame, Quezon City.90
The said certification was duly signed by PO3
Nicanor R. Faustino (Anti-Organized Crime CIC,
NCR), PO3 Alejandro D. Deluviar (ODITRM, Camp
Crame, Quezon City), PO2 Severino C. Filler
(TNTSC, Camp Crame, Quezon City), and PO3
Ireneo M. Desesto (Supply Center, PNPLSS). The
rule is that alibi assumes significance or strength
when it is amply corroborated by credible and
disinterested witnesses.91 It is true that alibi is a weak
defense which an accused can easily fabricate to
escape criminal liability. But where the prosecution
evidence is weak, and betrays lack of credibility as to
the identification of defendant, alibi assumes
commensurate strength. This is but consistent with
the presumption of innocence in favor of accused.92
Alibi is not always undeserving of credit, for there are
times when accused has no other possible defense
for what could really be the truth as to his
whereabouts at the crucial time, and such defense
may, in fact, tilt the scales of justice in his favor.93
III. The penalty of expulsion imposed by DLSU on
private respondents is disproportionate to their
misdeed.
Ang parusang expulsion na ipinataw ng DLSU sa
private respondents ay hindi angkop sa kanilang
pagkakasala.
It is true that schools have the power to instill
discipline in their students as subsumed in their
academic freedom and that "the establishment of
rules governing university-student relations,
particularly those pertaining to student discipline,
may be regarded as vital, not merely to the smooth
and efficient operation of the institution, but to its
very survival."94 This power, however, does not give
them the untrammeled discretion to impose a penalty
which is not commensurate with the gravity of the
misdeed. If the concept of proportionality between
the offense committed and the sanction imposed is
not followed, an element of arbitrariness intrudes.
That would give rise to a due process question.95
We agree with respondent CHED that under the
circumstances, the penalty of expulsion is grossly
disproportionate to the gravity of the acts committed
by private respondents Bungubung, Reverente, and
Valdes, Jr. Each of the two mauling incidents lasted
only for few seconds and the victims did not suffer
any serious injury. Disciplinary measures especially
where they involve suspension, dismissal or
expulsion, cut significantly into the future of a
student. They attach to him for life and become a
mortgage of his future, hardly redeemable in certain
cases. Officials of colleges and universities must be
anxious to protect it, conscious of the fact that, Republic of the Philippines
appropriately construed, a disciplinary action should SUPREME COURT
be treated as an educational tool rather than a Manila
punitive measure.96
SECOND DIVISION
Accordingly, We affirm the penalty of
exclusion97 only, not expulsion,98 imposed on them by G.R. No. 183626 October 4, 2010
the CHED. As such, pursuant to Section 77(b) of the
MRPS, petitioner DLSU may exclude or drop the SURIGAO DEL NORTE ELECTRIC
names of the said private respondents from its rolls COOPERATIVE, INC. (SURNECO), Petitioner,
for being undesirable, and transfer credentials vs.
immediately issued. ENERGY REGULATORY
COMMISSION, Respondent.
WHEREFORE, the petition is PARTIALLY
GRANTED. The Court of Appeals Resolutions dated DECISION
July 30, 1996 and dated October 15, 1996, and
Regional Trial Court of Manila, Branch 36, Order NACHURA, J.:
dated January 7, 1997 are ANNULLED AND SET
ASIDE, while CHED Resolution 181-96 dated May Assailed in this petition for review on certiorari1 under
14, 1996 is AFFIRMED. Rule 45 of the Rules of Court are the Decision dated
April 17, 20082 and the Resolution dated June 25,
Petitioner DLSU is ordered to issue a certificate of 20083 of the Court of Appeals (CA) in CA-G.R. SP
completion/graduation in favor of private respondent No. 99781.
Aguilar. On the other hand, it may exclude or drop
the names of private respondents Bungubung, The antecedent facts and proceedings follow—
Reverente, and Valdes, Jr. from its rolls, and their
transfer credentials immediately issued. Petitioner Surigao Del Norte Electric Cooperative,
Inc. (SURNECO) is a rural electric cooperative
SO ORDERED. organized and existing by virtue of Presidential
Decree No. 269.
On February 8, 1996, the Association of Mindanao
Rural Electric Cooperatives, as representative of
SURNECO and of the other 33 rural electric
cooperatives in Mindanao, filed a petition before the
then Energy Regulatory Board (ERB) for the
approval of the formula for automatic cost
adjustment and adoption of the National Power
Corporation (NPC) restructured rate adjustment to
comply with Republic Act (R.A.) No. 7832.4 The case
was docketed as ERB Case No. 96-49, and later
consolidated with identical petitions of other
associations of electric cooperatives in the
Philippines.
The relevant provisions of R.A. No. 7832 for
compliance are Sections 10 and 14, which provide—
Sec. 10. Rationalization of System Losses by
Phasing Out Pilferage Losses as a Component
Thereof. – There is hereby established a cap on the
recoverable rate of system losses as follows:
xxxx
(b) For rural electric cooperatives:
(i) Twenty-two percent (22%) at the end
of the first year following the effectivity
of this Act;
Sec. 14. Rules and Regulations. – The ERB shall,
within thirty (30) working days after the conduct of
(ii) Twenty percent (20%) at the end of
the second year following the effectivity
of this Act;
(iii) Eighteen percent (18%) at the end of
the third year following the effectivity of
this Act;
(iv) Sixteen percent (16%) at the end of
the fourth year following the effectivity of
this Act; and
(v) Fourteen percent (14%) at the end of
the fifth year following the effectivity of
this Act.
Provided, that the ERB is hereby authorized to
determine at the end of the fifth year following
the effectivity of this Act, and as often as is
necessary, taking into account the viability of
rural electric cooperatives and the interest of
consumers, whether the caps herein or
theretofore established shall be reduced
further which shall, in no case, be lower than
nine percent (9%) and accordingly fix the date
of the effectivity of the new caps.
xxxx
hearings which must commence within thirty (30)
working days upon the effectivity of this Act, issue
the rules and regulation as may be necessary to
ensure the efficient and effective implementation of
the provisions of this Act, to include but not limited
to, the development of methodologies for computing
the amount of electricity illegally used and the
amount of payment or deposit contemplated in
Section 7 hereof as a result of the presence of the
prima facie evidence discovered.
Corollary thereto, Sections 4 and 5 of Rule IX of the
Implementing Rules and Regulations (IRR) of R.A.
No. 7832 provide—
Section 4. Caps on System Loss allowed to Rural
Electric Cooperatives. – The maximum rate of
system loss that the cooperative can pass on to its
customers shall be as follows:
a. Twenty-two percent (22%) effective on
February 1996 billing.
b. Twenty percent (20%) effective on February
1997 billing.
c. Eighteen percent (18%) effective on
February 1998 billing.
d. Sixteen percent (16%) effective on February
1999 billing.
e. Fourteen percent (14%) effective on
February 2000 billing.
Section 5. Automatic Cost Adjustment Formula. –
Each and every cooperative shall file with the ERB,
on or before September 30, 1995, an application for
approval of an amended Purchased Power
Adjustment Clause that would reflect the new system
loss cap to be included in its schedule of rates.
The automatic cost adjustment of every electric
cooperative shall be guided by the following formula:
Purchased Power Adjustment Clause
A
(PPA) =
B – (C + D)
Where:
A = Cost of electricity purchased and
generated for the previous month
B = Total Kwh purchased and generated for
the previous month
C = The actual system loss but not to exceed
the maximum recoverable rate of system loss
in Kwh plus actual company use in kwhrs but
 not to exceed 1% of total kwhrs purchased
and generated
D = kwh consumed by subsidized consumers
E = Applicable base cost of power equal to the
amount incorporated into their basic rate per
kwh.
In an Order5 dated February 19, 1997, the ERB
granted SURNECO and other rural electric
cooperatives provisional authority to use and
implement the Purchased Power Adjustment (PPA)
formula pursuant to the mandatory provisions of R.A.
No. 7832 and its IRR, with a directive to submit
relevant and pertinent documents for the Board’s
review, verification, and confirmation.
In the meantime, the passage of R.A. No. 91366 led
to the creation of the Energy Regulatory Commission
(ERC), replacing and succeeding the ERB. All
pending cases before the ERB were transferred to
the ERC. ERB Case No. 96-49 was re-docketed as
ERC Case No. 2001-343.
In the Order dated June 17, 2003, the ERC clarified
ERB’s earlier policy regarding the PPA formula to be
used by the electric cooperatives, viz.—
After a careful evaluation of the records, the
Commission noted that the PPA formula which was
approved by the ERB was silent on whether the
calculation of the cost of electricity purchased and
generated in the formula should be "gross" or "net"
of the discounts.
Let it be noted that the power cost is said to be at
"gross" if the discounts are not passed-on to the end-
users whereas it is said to be at "net" if the said
discounts are passed-on to the end-users.
To attain uniformity in the implementation of the PPA
formula, the Commission has resolved that:
1. In the confirmation of past PPAs, the power
cost shall still be based on "gross," and
2. In the confirmation of future PPAs, the
power cost shall be based on "net."
The electric cooperatives filed their respective
motions for clarification and/or reconsideration.
Hence, the ERC issued an Order7 dated January 14,
2005, stating that the PPA was a cost-recovery
mechanism, not a revenue-generating scheme, so
that the distribution utilities or the electric
cooperatives must recover from their customers only
the actual cost of purchased power. The ERC thus
adopted a new PPA policy, to wit—
A. The computation and confirmation of the
PPA prior to the Commission’s Order dated
 June 17, 2003 shall be based on the approved
PPA Formula;
B. The computation and confirmation of the
PPA after the Commission’s Order dated June
17, 2003 shall be based on the power cost
"net" of discount; and
C. If the approved PPA Formula is silent on
the terms of discount, the computation and
confirmation of the PPA shall be based on the
power cost at "gross," subject to the
submission of proofs that said discounts are
being extended to the end-users.8
Thereafter, the ERC continued its review,
verification, and confirmation of the electric
cooperatives’ implementation of the PPA formula
based on the available data and information
submitted by the latter.
On March 19, 2007, the ERC issued its assailed
Order,9 mandating that the discounts earned by
SURNECO from its power supplier should be
deducted from the computation of the power cost,
disposing in this wise ¾
WHEREFORE, the foregoing premises considered,
the Commission hereby confirms the Purchased
Power Adjustment (PPA) of Surigao del Norte
Electric Cooperative, Inc. (SURNECO) for the period
February 1996 to July 2004 which resulted to an
over-recovery amounting to EIGHTEEN MILLION
ONE HUNDRED EIGHTY EIGHT THOUSAND
SEVEN HUNDRED NINETY FOUR PESOS
(PhP18,188,794.00) equivalent to PhP0.0500/kwh.
In this connection, SURNECO is hereby directed to
refund the amount of PhP0.0500/kwh to its Main
Island consumers starting the next billing cycle from
receipt of this Order until such time that the full
amount shall have been refunded.
The Commission likewise confirms the PPA of
SURNECO for its Hikdop Island consumers for the
period February 1996 to July 2004 which resulted to
an under-recovery amounting to TWO MILLION
FOUR HUNDRED SEVENTY EIGHT THOUSAND
FORTY FIVE PESOS (PhP2,478,045.00).
SURNECO is hereby authorized to collect from its
Hikdop Island consumers the amount of
PhP0.0100/kwh starting the next billing cycle from
receipt of this Order until such time that the full
amount shall have been collected.
Accordingly, SURNECO is directed to:
a) Reflect the PPA refund/collection as a
separate item in the bill using the phrase
"Previous Years’ Adjustment on Power Cost";
b) Submit, within ten (10) days from its initial
implementation of the refund/collection, a
 sworn statement indicating its compliance with
the aforecited directive; and
c) Accomplish and submit a report in
accordance with the attached prescribed
format, on or before the 30th day of January of
the succeeding year and every year thereafter
until the amount shall have been fully
refunded/collected.
SO ORDERED.10
SURNECO filed a motion for reconsideration, but it
was denied by the ERC in its Order11 dated May 29,
2007 on the ground that the motion did not raise any
new matter which was not already passed upon by
the ERC.
Aggrieved, SURNECO went to the CA via a petition
for review,12 with prayer for the issuance of a
temporary restraining order and preliminary
injunction, seeking the annulment of the ERC Orders
dated March 19, 2007 and May 29, 2007.
In its Decision dated April 17, 2008, the CA denied
SURNECO’s petition and affirmed the assailed
Orders of the ERC.
On June 25, 2008, upon motion for
reconsideration13 of SURNECO, the CA issued its
Resolution denying the same.
Hence, this petition, with SURNECO ascribing error
to the CA and the ERC in: (1) disallowing its use of
the multiplier scheme to compute its system’s loss;
(2) ordering it to deduct from the power cost or
refund to its consumers the discounts extended to it
by its power supplier, NPC; and (3) ordering it to
refund alleged over-recoveries arrived at by the ERC
without giving SURNECO the opportunity to be
heard.
The petition should be denied.
First. SURNECO points out that the National
Electrification Administration (NEA), which used to
be the government authority charged by law with the
power to fix rates of rural electric cooperatives,
entered into a loan agreement with the Asian
Development Bank (ADB). The proceeds of the loan
were intended for use by qualified rural electric
cooperatives, SURNECO included, in their
rehabilitation and expansion projects. The loan
agreement imposed a 15% system loss cap, but
provided a Power Cost Adjustment Clause
authorizing cooperatives to charge and show
"system losses in excess of 15%" as a separate item
in their consumer’s bill. Thus, the cooperatives
charged their consumer-members "System Loss
Levy" for system losses in excess of the 15% cap.
SURNECO states that, in January 1984, it was
authorized by the NEA that all increases in the NPC
power cost (in case of NPC-connected cooperatives)
shall be uniformly passed on to the member-
consumers using the 1.4 multiplier, which is divided
into 1.3 as allowance for 23% system loss and 0.1 as
provision for the corresponding increase in operating
expenses to partly offset the effects of
inflation.14 Subsequently, the NEA, through NEA
Memorandum No. 1-A dated March 30, 1992,
revised the aforesaid issuance as follows—
Pursuant to NEA Board Resolution No. 98, Series of
1991, x x x, the revised cooperatives’ multiplier will
be as follows:
1.2 – Rural Electric Cooperatives (RECs) with
system loss of 15% and below;
1.3 – RECs with system loss ranging from
16% to 22%;
1.4 – RECs with system loss of 23% and
above.
SURNECO posits that, per NEA Memorandum No.
1-A, the NEA had authorized it to adopt a multiplier
scheme as the method to recover system loss. It
claims that this cannot be abrogated, revoked, or
superseded by any order, resolution, or issuance by
the ERC prescribing a certain formula to implement
the caps of recoverable rate of system loss under
R.A. No. 7832 without violating the non-impairment
clause15 of the Constitution.
We disagree. SURNECO cannot insist on using the
multiplier scheme even after the imposition of the
system loss caps under Section 10 of R.A. No. 7832.
The law took effect on January 17, 1995. Perusing
Section 10, and also Section 11,16 providing for the
application of the caps as of the date of the effectivity
of R.A. No. 7832, readily shows that the imposition of
the caps was self-executory and did not require the
issuance of any enabling set of rules or any action by
the then ERB, now ERC. Thus, the caps should have
been applied as of January 17, 1995 when R.A. No.
7832 took effect.
Indeed, under NEA Memorandum No. 1-A, the use
of the multiplier scheme allows the recovery of
system losses even beyond the caps mandated in
R.A. No. 7832, which is intended to gradually phase
out pilferage losses as a component of the
recoverable system losses by the distributing utilities
such as SURNECO. However, it is totally repugnant
to and incompatible with the system loss caps
established in R.A. No. 7832, and is repealed by
Section 1617 of the law. As between NEA
Memorandum No. 1-A, a mere administrative
issuance, and R.A. No. 7832, a legislative
enactment, the latter must prevail.18
Second. The ERC was merely implementing the
system loss caps in R.A. No. 7832 when it reviewed
and confirmed SURNECO’S PPA charges, and
ordered the refund of the amount collected in excess
of the allowable system loss caps through its
continued use of the multiplier scheme. As the ERC
held in its March 19, 2007 Order—
On January 14, 2005, the Commission issued an
Order adopting a new PPA policy as follows: (a) the
computation and confirmation of the PPA prior to the
Commission’s Order dated June 17, 2003 shall be
based on the approved PPA Formula; (b) the
computation and confirmation of the PPA after the
Commission’s Order dated June 17, 2003 shall be
based on the power cost "net" of discount; and (c) if
the approved PPA Formula is silent in terms of
discount, the computation and confirmation of the
PPA shall be based on the power cost at "gross"
reduced by the amount of discounts extended to
customers, subject to the submission of proofs that
said discounts are indeed being extended to
customers.
However, the Commission deemed it appropriate to
clarify its PPA confirmation process particularly on
the treatment of the Prompt Payment Discount
(PPD) granted to distribution utilities (DUs) by their
power suppliers, to wit:
I. The over-or-under recovery will be
determined by comparing the allowable power
cost with the actual revenue billed to end-
users.
II. Calculation of the DU’s allowable power
cost as prescribed in the PPA formula:
a. If the PPA formula explicitly provides
the manner by which discounts availed
from the power supplier/s shall be
treated, the allowable power cost will be
computed based on the specific
provision of the formula, which may
either be at "net" or "gross"; and
b. If the PPA formula is silent in terms of
discounts, the allowable power cost will
be computed at "net" of discounts
availed from the power supplier/s, if
there be any.
III. Calculation of DU’s actual revenues/actual
amount billed to end-users.
a. On actual PPA computed at net of
discounts availed from power supplier/s:
a.1. If a DU bills at net of
discounts availed from the power
supplier/s (i.e., gross power cost
 minus discounts from power
supplier/s) and the DU is not
extending discounts to end-users,
the actual revenue should be
equal to the allowable power cost;
and
a.2. If a DU bills at net of
discounts availed from the power
supplier/s (i.e., gross power cost
minus discounts from power
supplier/s) and the DU is
extending discounts to end-users,
the discount extended to end-
users shall be added back to the
actual revenue.
b. On actual PPA computed at gross:
b.1. If a DU bills at gross (i.e.,
gross power cost not reduced by
discounts from power supplier/s)
and the DU is extending discounts
to end-users, the actual revenue
shall be calculated as: gross
power revenue less discounts
extended to end-users. The result
shall then be compared to the
allowable power cost; and
b.2. If a DU bills at gross (i.e.,
gross power cost not reduced by
discounts from power supplier/s)
and the DU is not extending
discounts to end-users, the actual
revenue shall be taken as is
which shall be compared to the
allowable power cost.
IV. In the calculation of the DU’s actual
revenues, the amount of discounts
extended to end-users shall, in no case,
be higher than the discounts availed by
the DU from its power supplier/s.
The foregoing clarification was intended to ensure
that only the actual costs of purchased power are
recovered by the DUs.
In the meantime, SURNECO submitted reports on its
monthly implementation of the PPA covering the
period January 1998 to July 2004 and attended the
conferences conducted by the Commission on
December 11, 2003 and May 4, 2005 relative
thereto.
The Commission evaluated SURNECO’s monthly
PPA implementation covering the period February
1996 to July 2004, which disclosed the following:
Schedule 1, Main Island
 Period Covered Over Over Hikdop end-user which resulted to a total net
(Under) over-recovery of PhP21,245,034.00; and
(Under) Recoveries
Recoveries (In kWh)
(In PhP) 2. SURNECO’s basic charge for Hikdop end-
users were beyond the approved basic charge
February 1996 to 20,737,074 0.2077
for the period February 1996 to September
December 1998 1998 resulting to a net over-recovery of
January 1999 to (2,548,280) PhP128,489.00.
(0.0097)
July 2004
SURNECO’s under recoveries for the period January
TOTAL 18,188,794 0.0500
1999 to June 2004 were due to the following:

Schedule 2, Municipality of Hikdop 1. For the period August 2001 to June 2004,
SURNECO erroneously deducted the Power
February 1996 to 70,235 Act Reduction Adjustments (PARA) in the total
0.3190
December 1998 purchased power cost of its PPA computation
PPA Plus Basic resulting to an under-recovery of
Cha[r]ge PhP1,377,763.00;

January 1999 to (2,548,280) 2. SURNECO’s power cost and kWh

(0.0097)
July 2004 computation includes Dummy Load resulting
TOTAL (2,478,045) to an under recovery amounting to
(0.0100)
PhP226,196.00; and
The over-recoveries were due to the following: 3. The new grossed-up factor scheme adopted
by the Commission which provided a true-up
1. For the period February 1996 to December mechanism to allow the DUs to recover the
1998, SURNECO’s PPA computation included actual costs of purchased power.19
the power cost and the corresponding kWh
purchased from Hikdop end-users. The In directing SURNECO to refund its over-recoveries
Commission excluded those months which based on PPA policies, which only ensured that the
SURNECO did not impose variable charges to
PPA mechanism remains a purely cost-recovery
mechanism and not a revenue-generating scheme
for the electric cooperatives, the ERC merely
exercised its authority to regulate and approve the
rates imposed by the electric cooperatives on their
consumers. The ERC simply performed its mandate
to protect the public interest imbued in those rates.
It is beyond cavil that the State, in the exercise of
police power, can regulate the rates imposed by a
public utility such as SURNECO. As we held in
Republic of the Philippines v. Manila Electric
Company20—
The regulation of rates to be charged by public
utilities is founded upon the police powers of the
State and statutes prescribing rules for the control
and regulation of public utilities are a valid exercise
thereof. When private property is used for a public
purpose and is affected with public interest, it ceases
to be juris privati only and becomes subject to
regulation. The regulation is to promote the common
good. Submission to regulation may be withdrawn by
the owner by discontinuing use; but as long as use of
the property is continued, the same is subject to
public regulation.
Likewise, SURNECO cannot validly assert that the
caps set by R.A. No. 7832 are arbitrary, or that they
violate the non-impairment clause of the Constitution
for allegedly traversing the loan agreement between
NEA and ADB. Striking down a legislative
enactment, or any of its provisions, can be done only
by way of a direct action, not through a collateral
attack, and more so, not for the first time on appeal
in order to avoid compliance. The challenge to the
law’s constitutionality should also be raised at the
earliest opportunity.21
Even assuming, merely for argument’s sake, that the
ERC issuances violated the NEA and ADB covenant,
the contract had to yield to the greater authority of
the State’s exercise of police power. It has long been
settled that police power legislation, adopted by the
State to promote the health, morals, peace,
education, good order, safety, and general welfare of
the people prevail not only over future contracts but
even over those already in existence, for all private
contracts must yield to the superior and legitimate
measures taken by the State to promote public
welfare.22
SURNECO also avers that the Electric Power
Industry Reform Act of 2001 (EPIRA) removed the
alleged arbitrary caps in R.A. No. 7832. We differ.
The EPIRA allows the caps to remain until replaced
by the caps to be determined by the ERC, pursuant
to its delegated authority under Section 4323 of R.A.
No. 9136 to prescribe new system loss caps, based
on technical parameters such as load density, sales
mix, cost of service, delivery voltage, and other
technical considerations it may promulgate.
Third. We also disagree with SURNECO in its
insistence that the PPA confirmation policies
constituted an amendment to the IRR of R.A. No.
7832 and must, therefore, comply with the
publication requirement for the effectivity of
administrative issuances.
The PPA formula provided in the IRR of R.A. No.
7832 was only a model to be used as a guide by the
electric cooperatives in proposing their own PPA
formula for approval by the then ERB. Sections 4
and 5, Rule IX of the IRR directed the electric
cooperatives to apply for approval of such formula
with the ERB so that the system loss caps under the
law would be incorporated in their computation of
power cost adjustments. The IRR did not provide for
a specific formula; therefore, there was nothing in the
IRR that was amended or could have been amended
relative to the PPA formula. The IRR left to the ERB,
now the ERC, the authority to approve and oversee
the implementation of the electric cooperatives’ PPA
formula in the exercise of its rate-making power over
them.1av vphi1
We likewise differ from SURNECO’s stance that it
was denied due process when the ERC issued its
questioned Orders. Administrative due process
simply requires an opportunity to explain one’s side
or to seek reconsideration of the action or ruling
complained of.24 It means being given the opportunity
to be heard before judgment, and for this purpose, a
formal trial-type hearing is not even essential. It is
enough that the parties are given a fair and
reasonable chance to demonstrate their respective
positions and to present evidence in support
thereof.25
Verily, the PPA confirmation necessitated a review of
the electric cooperatives’ monthly documentary
submissions to substantiate their PPA charges. The
cooperatives were duly informed of the need for
other required supporting documents and were
allowed to submit them accordingly. In fact, hearings
were conducted. Moreover, the ERC conducted exit
conferences with the electric cooperatives’
representatives, SURNECO included, to discuss
preliminary figures and to double-check these figures
for inaccuracies, if there were any. In addition, after
the issuance of the ERC Orders, the electric
cooperatives were allowed to file their respective
motions for reconsideration. It cannot be gainsaid,
therefore, that SURNECO was not denied due
process.
Finally, the core of the issues raised is factual in
character. It needs only to be reiterated that factual
findings of administrative bodies on technical matters
within their area of expertise should be accorded not
only respect but even finality if they are supported by
substantial evidence even if not overwhelming or
preponderant,26 more so if affirmed by the CA.
Absent any grave abuse of discretion on the part of
ERC, we must sustain its findings. Hence, its
assailed Orders, following the rule of non-
interference on matters addressed to the sound
discretion of government agencies entrusted with the
regulation of activities coming their special technical
knowledge and training, must be upheld.27
WHEREFORE, the petition is DENIED. The Decision
dated April 17, 2008 and the Resolution dated June
25, 2008 of the Court of Appeals in CA-G.R. SP No.
99781 are AFFIRMED. Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 178552 October 5, 2010
SOUTHERN HEMISPHERE ENGAGEMENT
NETWORK, INC., on behalf of the South-South
Network (SSN) for Non-State Armed Group
Engagement, and ATTY. SOLIMAN M. SANTOS,
JR., Petitioners,
vs.
ANTI-TERRORISM COUNCIL, THE EXECUTIVE
SECRETARY, THE SECRETARY OF JUSTICE,
THE SECRETARY OF FOREIGN AFFAIRS, THE
SECRETARY OF NATIONAL DEFENSE, THE
SECRETARY OF THE INTERIOR AND LOCAL
GOVERNMENT, THE SECRETARY OF FINANCE,
THE NATIONAL SECURITY ADVISER, THE CHIEF
OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES, AND THE CHIEF OF THE
PHILIPPINE NATIONAL POLICE, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 178554
KILUSANG MAYO UNO (KMU), represented by its
Chairperson Elmer Labog, NATIONAL
FEDERATION OF LABOR UNIONS-KILUSANG
MAYO UNO (NAFLU-KMU), represented by its
National President Joselito V. Ustarez and
Secretary General Antonio C. Pascual, and
CENTER FOR TRADE UNION AND HUMAN
RIGHTS, represented by its Executive Director
Daisy Arago, Petitioners,
vs.
HON. EDUARDO ERMITA, in his capacity as
Executive Secretary, NORBERTO GONZALES, in
his capacity as Acting Secretary of National
Defense, HON. RAUL GONZALES, in his capacity
as Secretary of Justice, HON. RONALDO PUNO,
in his capacity as Secretary of the Interior and
Local Government, GEN. HERMOGENES
ESPERON, in his capacity as AFP Chief of Staff,
and DIRECTOR GENERAL OSCAR CALDERON,
in his capacity as PNP Chief of
Staff, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 178581
BAGONG ALYANSANG MAKABAYAN (BAYAN),
GENERAL ALLIANCE BINDING WOMEN FOR
REFORMS, INTEGRITY, EQUALITY, LEADERSHIP
AND ACTION (GABRIELA), KILUSANG
MAGBUBUKID NG PILIPINAS (KMP), MOVEMENT
OF CONCERNED CITIZENS FOR CIVIL
LIBERTIES (MCCCL), CONFEDERATION FOR
UNITY, RECOGNITION AND ADVANCEMENT OF
GOVERNMENT EMPLOYEES (COURAGE),
KALIPUNAN NG DAMAYANG MAHIHIRAP
(KADAMAY), SOLIDARITY OF CAVITE
WORKERS, LEAGUE OF FILIPINO STUDENTS
(LFS), ANAKBAYAN, PAMBANSANG LAKAS NG
KILUSANG MAMAMALAKAYA (PAMALAKAYA),
ALLIANCE OF CONCERNED TEACHERS (ACT),
MIGRANTE, HEALTH ALLIANCE FOR
DEMOCRACY (HEAD), AGHAM, TEOFISTO
GUINGONA, JR., DR. BIENVENIDO LUMBERA,
RENATO CONSTANTINO, JR., SISTER MARY
JOHN MANANSAN OSB, DEAN CONSUELO PAZ,
ATTY. JOSEFINA LICHAUCO, COL. GERRY
CUNANAN (ret.), CARLITOS SIGUION-REYNA,
DR. CAROLINA PAGADUAN-ARAULLO, RENATO
REYES, DANILO RAMOS, EMERENCIANA DE
LESUS, RITA BAUA, REY CLARO
CASAMBRE, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity
as President and Commander-in-Chief,
EXECUTIVE SECRETARY EDUARDO ERMITA,
DEPARTMENT OF JUSTICE SECRETARY RAUL
GONZALES, DEPARTMENT OF FOREIGN
AFFAIRS SECRETARY ALBERTO ROMULO,
DEPARTMENT OF NATIONAL DEFENSE ACTING
SECRETARY NORBERTO GONZALES,
DEPARTMENT OF INTERIOR AND LOCAL
GOVERNMENT SECRETARY RONALDO PUNO.
DEPARTMENT OF FINANCE SECRETARY
MARGARITO TEVES, NATIONAL SECURITY
ADVISER NORBERTO GONZALES, THE
NATIONAL INTELLIGENCE COORDINATING
AGENCY (NICA), THE NATIONAL BUREAU OF
INVESTIGATION (NBI), THE BUREAU OF
IMMIGRATION, THE OFFICE OF CIVIL DEFENSE,
THE INTELLIGENCE SERVICE OF THE ARMED
FORCES OF THE PHILIPPINES (ISAFP), THE
ANTI-MONEY LAUNDERING COUNCIL (AMLC),
THE PHILIPPINE CENTER ON TRANSNATIONAL
CRIME, THE CHIEF OF THE PHILIPPINE
NATIONAL POLICE GEN. OSCAR CALDERON,
THE PNP, including its intelligence and
investigative elements, AFP CHIEF GEN.
HERMOGENES ESPERON, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 178890
KARAPATAN, ALLIANCE FOR THE
ADVANCEMENT OF PEOPLE'S RIGHTS,
represented herein by Dr. Edelina de la Paz, and
representing the following organizations:
HUSTISYA, represented by Evangeline
Hernandez and also on her own behalf;
DESAPARECIDOS, represented by Mary Guy
Portajada and also on her own behalf, SAMAHAN
NG MGA EX-DETAINEES LABAN SA
DETENSYON AT PARA SA AMNESTIYA (SELDA),
represented by Donato Continente and also on
his own behalf, ECUMENICAL MOVEMENT FOR
JUSTICE AND PEACE (EMJP), represented by
Bishop Elmer M. Bolocon, UCCP, and
PROMOTION OF CHURCH PEOPLE'S
RESPONSE, represented by Fr. Gilbert Sabado,
OCARM, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity
as President and Commander-in-Chief,
EXECUTIVE SECRETARTY EDUARDO ERMITA,
DEPARTMENT OF JUSTICE SECRETARY RAUL
GONZALEZ, DEPARTMENT OF FOREIGN
AFFAIRS SECRETARY ALBERTO ROMULO,
DEPARTMENT OF NATIONAL DEFENSE ACTING
SECRETARY NORBERTO GONZALES,
DEPARTMENT OF INTERIOR AND LOCAL
GOVERNMENT SECRETARY RONALDO PUNO,
DEPARTMENT OF FINANCE SECRETARY
MARGARITO TEVES, NATIONAL SECURITY
ADVISER NORBERTO GONZALES, THE
NATIONAL INTELLIGENCE COORDINATING
AGENCY (NICA), THE NATIONAL BUREAU OF
INVESTIGATION (NBI), THE BUREAU OF
IMMIGRATION, THE OFFICE OF CIVIL DEFENSE,
THE INTELLIGENCE SERVICE OF THE ARMED
FORCES OF THE PHILIPPINES (ISAFP), THE
ANTI-MONEY LAUNDERING COUNCIL (AMLC),
THE PHILIPPINE CENTER ON TRANSNATIONAL
CRIME, THE CHIEF OF THE PHILIPPINE
NATIONAL POLICE GEN. OSCAR CALDERON,
THE PNP, including its intelligence and
investigative elements, AFP CHIEF GEN.
HERMOGENES ESPERON, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 179157
THE INTEGRATED BAR OF THE PHILIPPINES
(IBP), represented by Atty. Feliciano M. Bautista,
COUNSELS FOR THE DEFENSE OF LIBERTY
(CODAL), SEN. MA. ANA CONSUELO A.S.
MADRIGAL and FORMER SENATORS SERGIO
OSMEÑA III and WIGBERTO E.
TAÑADA, Petitioners,
vs.
EXECUTIVE SECRETARY EDUARDO ERMITA
AND THE MEMBERS OF THE ANTI-TERRORISM
COUNCIL (ATC), Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 179461
BAGONG ALYANSANG MAKABAYAN-
SOUTHERN TAGALOG (BAYAN-ST), GABRIELA-
ST, KATIPUNAN NG MGA SAMAHYANG
MAGSASAKA-TIMOG KATAGALUGAN
(KASAMA-TK), MOVEMENT OF CONCERNED
CITIZENS FOR CIVIL LIBERTIES (MCCCL),
PEOPLES MARTYRS, ANAKBAYAN-ST,
PAMALAKAYA-ST, CONFEDERATION FOR
UNITY, RECOGNITION AND ADVANCEMENT OF
GOVERNMENT EMPLOYEES (COURAGE-ST),
PAGKAKAISA'T UGNAYAN NG MGA
MAGBUBUKID SA LAGUNA (PUMALAG),
SAMAHAN NG MGA MAMAMAYAN SA TABING
RILES (SMTR-ST), LEAGUE OF FILIPINO
STUDENTS (LFS), BAYAN MUNA-ST,
KONGRESO NG MGA MAGBUBUKID PARA SA
REPORMANG AGRARYO KOMPRA, BIGKIS AT
LAKAS NG MGA KATUTUBO SA TIMOG
KATAGALUGAN (BALATIK), SAMAHAN AT
UGNAYAN NG MGA MAGSASAKANG
KABABAIHAN SA TIMOG KATAGALUGAN
(SUMAMAKA-TK), STARTER, LOSÑOS RURAL
POOR ORGANIZATION FOR PROGRESS &
EQUALITY, CHRISTIAN NIÑO LAJARA,
TEODORO REYES, FRANCESCA B. TOLENTINO,
JANNETTE E. BARRIENTOS, OSCAR T. LAPIDA,
JR., DELFIN DE CLARO, SALLY P. ASTRERA,
ARNEL SEGUNE BELTRAN, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, in her capacity
as President and Commander-in-Chief,
EXECUTIVE SECRETARY EDUARDO ERMITA,
DEPARTMENT OF JUSTICE SECRETARY RAUL
GONZALEZ, DEPARTMENT OF FOREIGN
AFFAIRS SECRETARY ALBERTO ROMULO,
DEPARTMENT OF NATIONAL DEFENSE ACTING
SECRETARY NORBERTO GONZALES,
DEPARTMENT OF INTERIOR AND LOCAL
GOVERNMEN T SECRETARY RONALDO PUNO,
DEPARTMENT OF FINCANCE SECRETARY
MARGARITO TEVES, NATIONAL SECURITY
ADVISER NORBERTO GONZALES, THE
NATIONAL INTELLIGENCE COORDINATING
AGENCY (NICA), THE NATIONAL BUREAU OF
INVESTIGATION (NBI), THE BUREAU OF
IMMIGRATION, THE OFFICE OF CIVIL DEFENSE,
THE INTELLIGENCE SERVICE OF THE ARMED
FORCES OF THE PHILIPPINES (ISAFP), THE
ANTI-MONEY LAUNDERING COUNCIL (AMLC),
THE PHILIPPINE CENTER ON TRANSNATIONAL
CRIME, THE CHIEF OF THE PHILIPPINE
NATIONAL POLICE GEN. OSCAR CALDERON,
THE PNP, including its intelligence and
investigative elements, AFP CHIEF GEN.
HERMOGENES ESPERON, Respondents.
DECISION
CARPIO MORALES, J.:
Before the Court are six petitions challenging the
constitutionality of Republic Act No. 9372 (RA 9372),
"An Act to Secure the State and Protect our People
from Terrorism," otherwise known as the Human
Security Act of 2007,1 signed into law on March 6,
2007.
Following the effectivity of RA 9372 on July 15,
2007,2 petitioner Southern Hemisphere Engagement
Network, Inc., a non-government organization, and
Atty. Soliman Santos, Jr., a concerned citizen,
taxpayer and lawyer, filed a petition for certiorari and
prohibition on July 16, 2007 docketed as G.R. No.
178552. On even date, petitioners Kilusang Mayo
Uno (KMU), National Federation of Labor Unions-
Kilusang Mayo Uno (NAFLU-KMU), and Center for
Trade Union and Human Rights (CTUHR),
represented by their respective officers3 who are also
bringing the action in their capacity as citizens, filed
a petition for certiorari and prohibition docketed as
G.R. No. 178554.
The following day, July 17, 2007, organizations
Bagong Alyansang Makabayan (BAYAN), General
Alliance Binding Women for Reforms, Integrity,
Equality, Leadership and Action (GABRIELA),
Kilusang Magbubukid ng Pilipinas (KMP), Movement
of Concerned Citizens for Civil Liberties (MCCCL),
Confederation for Unity, Recognition and
Advancement of Government Employees
(COURAGE), Kalipunan ng Damayang Mahihirap
(KADAMAY), Solidarity of Cavite Workers (SCW),
League of Filipino Students (LFS), Anakbayan,
Pambansang Lakas ng Kilusang Mamamalakaya
(PAMALAKAYA), Alliance of Concerned Teachers
(ACT), Migrante, Health Alliance for Democracy
(HEAD), and Agham, represented by their respective
officers,4 and joined by concerned citizens and
taxpayers Teofisto Guingona, Jr., Dr. Bienvenido
Lumbera, Renato Constantino, Jr., Sister Mary John
Manansan, OSB, Dean Consuelo Paz, Atty. Josefina
Lichauco, Retired Col. Gerry Cunanan, Carlitos
Siguion-Reyna, Dr. Carolina Pagaduan-Araullo,
Renato Reyes, Danilo Ramos, Emerenciana de
Jesus, Rita Baua and Rey Claro Casambre filed a
petition for certiorari and prohibition docketed as
G.R. No. 178581.
On August 6, 2007, Karapatan and its alliance
member organizations Hustisya, Desaparecidos,
Samahan ng mga Ex-Detainees Laban sa
Detensyon at para sa Amnestiya (SELDA),
Ecumenical Movement for Justice and Peace
(EMJP), and Promotion of Church People’s
Response (PCPR), which were represented by their
respective officers5 who are also bringing action on
their own behalf, filed a petition for certiorari and
prohibition docketed as G.R. No. 178890.
On August 29, 2007, the Integrated Bar of the
Philippines (IBP), Counsels for the Defense of
Liberty (CODAL),6 Senator Ma. Ana Consuelo A.S.
Madrigal, Sergio Osmeña III, and Wigberto E.
Tañada filed a petition for certiorari and prohibition
docketed as G.R. No. 179157.
Bagong Alyansang Makabayan-Southern Tagalog
(BAYAN-ST), other regional chapters and
organizations mostly based in the Southern Tagalog
Region,7 and individuals8 followed suit by filing on
September 19, 2007 a petition for certiorari and
prohibition docketed as G.R. No. 179461 that
replicates the allegations raised in the BAYAN
petition in G.R. No. 178581.
Impleaded as respondents in the various petitions
are the Anti-Terrorism Council9 composed of, at the
time of the filing of the petitions, Executive Secretary
Eduardo Ermita as Chairperson, Justice Secretary
Raul Gonzales as Vice Chairperson, and Foreign
Affairs Secretary Alberto Romulo, Acting Defense
Secretary and National Security Adviser Norberto
Gonzales, Interior and Local Government Secretary
Ronaldo Puno, and Finance Secretary Margarito
Teves as members. All the petitions, except that of
the IBP, also impleaded Armed Forces of the
Philippines (AFP) Chief of Staff Gen. Hermogenes
Esperon and Philippine National Police (PNP) Chief
Gen. Oscar Calderon.
The Karapatan, BAYAN and BAYAN-ST petitions
likewise impleaded President Gloria Macapagal-
Arroyo and the support agencies for the Anti-
Terrorism Council like the National Intelligence
Coordinating Agency, National Bureau of
Investigation, Bureau of Immigration, Office of Civil
Defense, Intelligence Service of the AFP, Anti-
Money Laundering Center, Philippine Center on
Transnational Crime, and the PNP intelligence and
investigative elements.
The petitions fail.
Petitioners’ resort to certiorari is improper
Preliminarily, certiorari does not lie against
respondents who do not exercise judicial or quasi-
judicial functions. Section 1, Rule 65 of the Rules of
Court is clear:
Section 1. Petition for certiorari.—When any tribunal,
board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there
is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and
praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or
officer, and granting such incidental reliefs as law
and justice may require. (Emphasis and
underscoring supplied)
Parenthetically, petitioners do not even allege with
any modicum of particularity how respondents acted
without or in excess of their respective jurisdictions,
or with grave abuse of discretion amounting to lack
or excess of jurisdiction.
The impropriety of certiorari as a remedy aside, the
petitions fail just the same.
In constitutional litigations, the power of judicial
review is limited by four exacting requisites, viz: (a)
there must be an actual case or controversy; (b)
petitioners must possess locus standi; (c) the
question of constitutionality must be raised at the
earliest opportunity; and (d) the issue of
constitutionality must be the lis mota of the case.10
In the present case, the dismal absence of the first
two requisites, which are the most essential, renders
the discussion of the last two superfluous.
Petitioners lack locus standi
Locus standi or legal standing requires a personal
stake in the outcome of the controversy as to assure
that concrete adverseness which sharpens the
presentation of issues upon which the court so
largely depends for illumination of difficult
constitutional questions.11
Anak Mindanao Party-List Group v. The Executive
Secretary12 summarized the rule on locus standi,
thus:
Locus standi or legal standing has been defined as a
personal and substantial interest in a case such that
the party has sustained or will sustain direct injury as
a result of the governmental act that is being
challenged. The gist of the question on standing is
whether a party alleges such personal stake in the
outcome of the controversy as to assure that
concrete adverseness which sharpens the
presentation of issues upon which the court depends
for illumination of difficult constitutional questions.
[A] party who assails the constitutionality of a statute
must have a direct and personal interest. It must
show not only that the law or any governmental act is
invalid, but also that it sustained or is in immediate
danger of sustaining some direct injury as a result of
its enforcement, and not merely that it suffers
thereby in some indefinite way. It must show that it
has been or is about to be denied some right or
privilege to which it is lawfully entitled or that it is
about to be subjected to some burdens or penalties
by reason of the statute or act complained of.
For a concerned party to be allowed to raise a
constitutional question, it must show that (1) it
has personally suffered some actual or threatened
injury as a result of the allegedly illegal conduct of
the government, (2) the injury is fairly traceable to
the challenged action, and (3) the injury is likely to be
redressed by a favorable action. (emphasis and
underscoring supplied.)
Petitioner-organizations assert locus standi on the
basis of being suspected "communist fronts" by the
government, especially the military; whereas
individual petitioners invariably invoke the
"transcendental importance" doctrine and their status
as citizens and taxpayers.
While Chavez v. PCGG13 holds that transcendental
public importance dispenses with the requirement
that petitioner has experienced or is in actual danger
of suffering direct and personal injury, cases
involving the constitutionality of penal legislation
belong to an altogether different genus of
constitutional litigation. Compelling State and
societal interests in the proscription of harmful
conduct, as will later be elucidated, necessitate a
closer judicial scrutiny of locus standi.
Petitioners have not presented any personal stake in
the outcome of the controversy. None of them faces
any charge under RA 9372.
KARAPATAN, Hustisya, Desaparecidos, SELDA,
EMJP and PCR, petitioners in G.R. No. 178890,
allege that they have been subjected to "close
security surveillance by state security forces," their
members followed by "suspicious persons" and
"vehicles with dark windshields," and their offices
monitored by "men with military build." They likewise
claim that they have been branded as "enemies of
the [S]tate."14
Even conceding such gratuitous allegations, the
Office of the Solicitor General (OSG) correctly points
out that petitioners have yet to show
any connection between the
purported "surveillance" and the implementation
of RA 9372.
BAYAN, GABRIELA, KMP, MCCCL, COURAGE,
KADAMAY, SCW, LFS, Anakbayan, PAMALAKAYA,
ACT, Migrante, HEAD and Agham, petitioner-
organizations in G.R. No. 178581, would like the
Court to take judicial notice of respondents’ alleged
action of tagging them as militant organizations
fronting for the Communist Party of the Philippines
(CPP) and its armed wing, the National People’s
Army (NPA). The tagging, according to petitioners, is
tantamount to the effects of proscription without
following the procedure under the law.15 The petition
of BAYAN-ST, et al. in G.R. No. 179461 pleads the
same allegations.
The Court cannot take judicial notice of the alleged
"tagging" of petitioners.
Generally speaking, matters of judicial notice have
three material requisites: (1) the matter must be
one of common and general knowledge; (2) it must
be well and authoritatively settled and not doubtful or
uncertain; and (3) it must be known to be within the
limits of the jurisdiction of the court. The principal
guide in determining what facts may be assumed to
be judicially known is that of notoriety. Hence, it can
be said that judicial notice is limited to facts
evidenced by public records and facts of general
notoriety. Moreover, a judicially noticed fact must be
one not subject to a reasonable dispute in that it is
either: (1) generally known within the territorial
jurisdiction of the trial court; or (2) capable of
accurate and ready determination by resorting to
sources whose accuracy cannot reasonably be
questionable.
Things of "common knowledge," of which courts take
judicial matters coming to the knowledge of men
generally in the course of the ordinary experiences of
life, or they may be matters which are generally
accepted by mankind as true and are capable of
ready and unquestioned demonstration. Thus, facts
which are universally known, and which may be
found in encyclopedias, dictionaries or other
publications, are judicially noticed, provided, they are
of such universal notoriety and so generally
understood that they may be regarded as forming
part of the common knowledge of every person. As
the common knowledge of man ranges far and wide,
a wide variety of particular facts have been judicially
noticed as being matters of common knowledge. But
a court cannot take judicial notice of any fact which,
in part, is dependent on the existence or non-
existence of a fact of which the court has no
constructive knowledge.16 (emphasis and
underscoring supplied.)
No ground was properly established by petitioners
for the taking of judicial notice. Petitioners’
apprehension is insufficient to substantiate their plea.
That no specific charge or proscription under RA
9372 has been filed against them, three years after
its effectivity, belies any claim of imminence of their
perceived threat emanating from the so-called
tagging.
The same is true with petitioners KMU, NAFLU and
CTUHR in G.R. No. 178554, who merely harp as
well on their supposed "link" to the CPP and NPA.
They fail to particularize how the implementation of
specific provisions of RA 9372 would result in direct
injury to their organization and members.
While in our jurisdiction there is still no judicially
declared terrorist organization, the United States of
America17 (US) and the European Union18 (EU) have
both classified the CPP, NPA and Abu Sayyaf Group
as foreign terrorist organizations. The Court takes
note of the joint statement of Executive Secretary
Eduardo Ermita and Justice Secretary Raul
Gonzales that the Arroyo Administration would adopt
the US and EU classification of the CPP and NPA as
terrorist organizations.19 Such statement
notwithstanding, there is yet to be filed before the
courts an application to declare the CPP and NPA
organizations as domestic terrorist or outlawed
organizations under RA 9372. Again, RA 9372 has
been in effect for three years now. From July 2007
up to the present, petitioner-organizations have
conducted their activities fully and freely without any
threat of, much less an actual, prosecution or
proscription under RA 9372.
Parenthetically, the Fourteenth Congress, in a
resolution initiated by Party-list Representatives
Saturnino Ocampo, Teodoro Casiño, Rafael Mariano
and Luzviminda Ilagan,20 urged the government to
resume peace negotiations with the NDF by
removing the impediments thereto, one of which is
the adoption of designation of the CPP and NPA by
the US and EU as foreign terrorist organizations.
Considering the policy statement of the Aquino
Administration21 of resuming peace talks with the
NDF, the government is not imminently disposed to
ask for the judicial proscription of the CPP-NPA
consortium and its allied organizations.
More important, there are other parties not before
the Court with direct and specific interests in the
questions being raised.22 Of recent development is
the filing of the first case for proscription under
Section 1723 of RA 9372 by the Department of
Justice before the Basilan Regional Trial Court
against the Abu Sayyaf Group.24 Petitioner-
organizations do not in the least allege any link to the
Abu Sayyaf Group.
Some petitioners attempt, in vain though, to show
the imminence of a prosecution under RA 9372 by
alluding to past rebellion charges against them.
In Ladlad v. Velasco,25 the Court ordered the
dismissal of rebellion charges filed in 2006 against
then Party-List Representatives Crispin Beltran and
Rafael Mariano of Anakpawis, Liza Maza of
GABRIELA, and Joel Virador, Teodoro Casiño and
Saturnino Ocampo of Bayan Muna. Also named in
the dismissed rebellion charges were petitioners Rey
Claro Casambre, Carolina Pagaduan-Araullo,
Renato Reyes, Rita Baua, Emerencia de Jesus and
Danilo Ramos; and accused of being front
organizations for the Communist movement were
petitioner-organizations KMU, BAYAN, GABRIELA,
PAMALAKAYA, KMP, KADAMAY, LFS and
COURAGE.26
The dismissed rebellion charges, however, do not
save the day for petitioners. For one, those charges
were filed in 2006, prior to the enactment of RA
9372, and dismissed by this Court. For another,
rebellion is defined and punished under the Revised
Penal Code. Prosecution for rebellion is not made
more imminent by the enactment of RA 9372, nor
does the enactment thereof make it easier to charge
a person with rebellion, its elements not having been
altered.
Conversely, previously filed but dismissed rebellion
charges bear no relation to prospective charges
under RA 9372. It cannot be overemphasized that
three years after the enactment of RA 9372, none of
petitioners has been charged.
Petitioners IBP and CODAL in G.R. No. 179157
base their claim of locus standi on their sworn duty to
uphold the Constitution. The IBP zeroes in on
Section 21 of RA 9372 directing it to render
assistance to those arrested or detained under the
law.
The mere invocation of the duty to preserve the rule
of law does not, however, suffice to clothe the IBP or
any of its members with standing.27 The IBP failed to
sufficiently demonstrate how its mandate under the
assailed statute revolts against its constitutional
rights and duties. Moreover, both the IBP and
CODAL have not pointed to even a single arrest or
detention effected under RA 9372.
Former Senator Ma. Ana Consuelo Madrigal, who
claims to have been the subject of "political
surveillance," also lacks locus standi. Prescinding
from the veracity, let alone legal basis, of the claim of
"political surveillance," the Court finds that she has
not shown even the slightest threat of being charged
under RA 9372. Similarly lacking in locus standi are
former Senator Wigberto Tañada and Senator Sergio
Osmeña III, who cite their being respectively a
human rights advocate and an oppositor to the
passage of RA 9372. Outside these gratuitous
statements, no concrete injury to them has been
pinpointed.
Petitioners Southern Hemisphere Engagement
Network and Atty. Soliman Santos Jr. in G.R. No.
178552 also conveniently state that the issues they
raise are of transcendental importance, "which must
be settled early" and are of "far-reaching
implications," without mention of any specific
provision of RA 9372 under which they have been
charged, or may be charged. Mere invocation of
human rights advocacy has nowhere been held
sufficient to clothe litigants with locus standi.
Petitioners must show an actual, or immediate
danger of sustaining, direct injury as a result of the
law’s enforcement. To rule otherwise would be to
corrupt the settled doctrine of locus standi, as every
worthy cause is an interest shared by the general
public.
Neither can locus standi be conferred upon individual
petitioners as taxpayers and citizens. A taxpayer suit
is proper only when there is an exercise of the
spending or taxing power of Congress,28 whereas
citizen standing must rest on direct and personal
interest in the proceeding.29
RA 9372 is a penal statute and does not even
provide for any appropriation from Congress for its
implementation, while none of the individual
petitioner-citizens has alleged any direct and
personal interest in the implementation of the law.
It bears to stress that generalized interests, albeit
accompanied by the assertion of a public right, do
not establish locus standi. Evidence of a direct and
personal interest is key.
Petitioners fail to present an actual case or
controversy
By constitutional fiat, judicial power operates only
when there is an actual case or controversy.
Section 1. The judicial power shall be vested in one
Supreme Court and in such lower courts as may be
established by law.
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights
which are legally demandable and enforceable, and
to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government.30 (emphasis and
underscoring supplied.)
As early as Angara v. Electoral Commission,31 the
Court ruled that the power of judicial review is limited
to actual cases or controversies to be exercised after
full opportunity of argument by the parties. Any
attempt at abstraction could only lead to dialectics
and barren legal questions and to sterile conclusions
unrelated to actualities.
An actual case or controversy means an existing
case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory, lest the
decision of the court would amount to an advisory
opinion.32
Information Technology Foundation of the
Philippines v. COMELEC33 cannot be more
emphatic:
[C]ourts do not sit to adjudicate mere academic
questions to satisfy scholarly interest, however
intellectually challenging. The controversy must be
justiciable—definite and concrete, touching on the
legal relations of parties having adverse legal
interests. In other words, the pleadings must show
an active antagonistic assertion of a legal right, on
the one hand, and a denial thereof on the other
hand; that is, it must concern a real and not merely a
theoretical question or issue. There ought to
be an actual and substantial controversy admitting of
specific relief through a decree conclusive in
nature, as distinguished from an opinion advising
what the law would be upon a hypothetical state of
facts. (Emphasis and underscoring supplied)
Thus, a petition to declare unconstitutional a law
converting the Municipality of Makati into a Highly
Urbanized City was held to be premature as it was
tacked on uncertain, contingent events.34 Similarly, a
petition that fails to allege that an application for a
license to operate a radio or television station has
been denied or granted by the authorities does not
present a justiciable controversy, and merely
wheedles the Court to rule on a hypothetical
problem.35
The Court dismissed the petition in Philippine Press
Institute v. Commission on Elections36 for failure to
cite any specific affirmative action of the Commission
on Elections to implement the assailed resolution. It
refused, in Abbas v. Commission on Elections,37 to
rule on the religious freedom claim of the therein
petitioners based merely on a perceived potential
conflict between the provisions of the Muslim Code
and those of the national law, there being no actual
controversy between real litigants.
The list of cases denying claims resting on purely
hypothetical or anticipatory grounds goes on ad
infinitum.
The Court is not unaware that a reasonable certainty
of the occurrence of a perceived threat to any
constitutional interest suffices to provide a basis for
mounting a constitutional challenge. This, however,
is qualified by the requirement that there must
be sufficient facts to enable the Court to intelligently
adjudicate the issues.38
Very recently, the US Supreme Court, in Holder v.
Humanitarian Law Project,39 allowed the pre-
enforcement review of a criminal statute, challenged
on vagueness grounds, since plaintiffs faced a
"credible threat of prosecution" and "should not be
required to await and undergo a criminal prosecution
as the sole means of seeking relief."40 The plaintiffs
therein filed an action before a federal court to assail
the constitutionality of the material support statute,
18 U.S.C. §2339B (a) (1),41 proscribing the provision
of material support to organizations declared by the
Secretary of State as foreign terrorist organizations.
They claimed that they intended to provide support
for the humanitarian and political activities of two
such organizations.
Prevailing American jurisprudence allows an
adjudication on the merits when an anticipatory
petition clearly shows that the challenged prohibition
forbids the conduct or activity that a petitioner seeks
to do, as there would then be a justiciable
controversy.42
Unlike the plaintiffs in Holder, however, herein
petitioners have failed to show that the challenged
provisions of RA 9372 forbid constitutionally
protected conduct or activity that they seek to do. No
demonstrable threat has been established, much
less a real and existing one.
Petitioners’ obscure allegations of sporadic
"surveillance" and supposedly being tagged as
"communist fronts" in no way approximate a credible
threat of prosecution. From these allegations, the
Court is being lured to render an advisory opinion,
which is not its function.43
Without any justiciable controversy, the petitions
have become pleas for declaratory relief, over which
the Court has no original jurisdiction. Then again,
declaratory actions characterized by "double
contingency," where both the activity the petitioners
intend to undertake and the anticipated reaction to it
of a public official are merely theorized, lie beyond
judicial review for lack of ripeness.44
The possibility of abuse in the implementation of RA
9372 does not avail to take the present petitions out
of the realm of the surreal and merely imagined.
Such possibility is not peculiar to RA 9372 since the
exercise of any power granted by law may be
abused.45 Allegations of abuse must be anchored on
real events before courts may step in to settle actual
controversies involving rights which are legally
demandable and enforceable.
A facial invalidation of a statute is allowed only
in free speech cases, wherein certain rules of
constitutional litigation are rightly excepted
Petitioners assail for being intrinsically vague and
impermissibly broad the definition of the crime of
terrorism46 under RA 9372 in that terms like
"widespread and extraordinary fear and panic among
the populace" and "coerce the government to give in
to an unlawful demand" are nebulous, leaving law
enforcement agencies with no standard to measure
the prohibited acts.
Respondents, through the OSG, counter that the
doctrines of void-for-vagueness and overbreadth find
no application in the present case since these
doctrines apply only to free speech cases; and that
RA 9372 regulates conduct, not speech.
For a jurisprudentially guided understanding of these
doctrines, it is imperative to outline the schools of
thought on whether the void-for-vagueness and
overbreadth doctrines are equally applicable grounds
to assail a penal statute.
Respondents interpret recent jurisprudence as
slanting toward the idea of limiting the application of
the two doctrines to free speech cases. They
particularly cite Romualdez v. Hon.
Sandiganbayan47 and Estrada v. Sandiganbayan.48
The Court clarifies.
At issue in Romualdez v. Sandiganbayan was
whether the word "intervene" in Section 549 of the
Anti-Graft and Corrupt Practices Act was intrinsically
vague and impermissibly broad. The Court stated
that "the overbreadth and the vagueness doctrines
have special application only to free-speech cases,"
and are "not appropriate for testing the validity of
penal statutes."50 It added that, at any rate, the
challenged provision, under which the therein
petitioner was charged, is not vague.51
While in the subsequent case of Romualdez v.
Commission on Elections,52 the Court stated that a
facial invalidation of criminal statutes is not
appropriate, it nonetheless proceeded to conduct a
vagueness analysis, and concluded that the therein
subject election offense53 under the Voter’s
Registration Act of 1996, with which the therein
petitioners were charged, is couched in precise
language.54
The two Romualdez cases rely heavily on the
Separate Opinion55 of Justice Vicente V. Mendoza in
the Estrada case, where the Court found the Anti-
Plunder Law (Republic Act No. 7080) clear and free
from ambiguity respecting the definition of the crime
of plunder.
The position taken by Justice Mendoza
in Estrada relates these two doctrines to the concept
of a "facial" invalidation as opposed to an "as-
applied" challenge. He basically postulated that
allegations that a penal statute is vague and
overbroad do not justify a facial review of its validity.
The pertinent portion of the Concurring Opinion of
Justice Mendoza, which was quoted at length in the
main Estrada decision, reads:
A facial challenge is allowed to be made to a vague
statute and to one which is overbroad because of
possible "chilling effect" upon protected speech. The
theory is that "[w]hen statutes regulate or proscribe
speech and no readily apparent construction
suggests itself as a vehicle for rehabilitating the
statutes in a single prosecution, the transcendent
value to all society of constitutionally protected
expression is deemed to justify allowing attacks on
overly broad statutes with no requirement that the
person making the attack demonstrate that his own
conduct could not be regulated by a statute drawn
with narrow specificity." The possible harm to society
in permitting some unprotected speech to go
unpunished is outweighed by the possibility that the
protected speech of others may be deterred and
perceived grievances left to fester because of
possible inhibitory effects of overly broad statutes.
This rationale does not apply to penal
statutes. Criminal statutes have general in
terrorem effect resulting from their very existence,
and, if facial challenge is allowed for this reason
alone, the State may well be prevented from
enacting laws against socially harmful conduct. In
the area of criminal law, the law cannot take chances
as in the area of free speech.
The overbreadth and vagueness doctrines then have
special application only to free speech cases. They
are inapt for testing the validity of penal statutes. As
the U.S. Supreme Court put it, in an opinion by Chief
Justice Rehnquist, "we have not recognized an
'overbreadth' doctrine outside the limited context of
the First Amendment." In Broadrick v. Oklahoma, the
Court ruled that "claims of facial overbreadth have
been entertained in cases involving statutes which,
by their terms, seek to regulate only spoken words"
and, again, that "overbreadth claims, if entertained at
all, have been curtailed when invoked against
ordinary criminal laws that are sought to be applied
to protected conduct." For this reason, it has been
held that "a facial challenge to a legislative act is the
most difficult challenge to mount successfully, since
the challenger must establish that no set of
circumstances exists under which the Act would be
valid." As for the vagueness doctrine, it is said that a
litigant may challenge a statute on its face only if it is
vague in all its possible applications. "A plaintiff who
engages in some conduct that is clearly proscribed
cannot complain of the vagueness of the law as
applied to the conduct of others."
In sum, the doctrines of strict scrutiny, overbreadth,
and vagueness are analytical tools developed for
testing "on their faces" statutes in free speech
cases or, as they are called in American law, First
Amendment cases. They cannot be made to do
service when what is involved is a criminal statute.
With respect to such statute, the established rule is
that "one to whom application of a statute is
constitutional will not be heard to attack the statute
on the ground that impliedly it might also be taken as
applying to other persons or other situations in which
its application might be unconstitutional." As has
been pointed out, "vagueness challenges in the First
Amendment context, like overbreadth challenges
typically produce facial invalidation, while statutes
found vague as a matter of due process typically are
invalidated [only] 'as applied' to a particular
defendant." Consequently, there is no basis for
petitioner's claim that this Court review the Anti-
Plunder Law on its face and in its entirety.
Indeed, "on its face" invalidation of statutes results in
striking them down entirely on the ground that they
might be applied to parties not before the Court
whose activities are constitutionally protected. It
constitutes a departure from the case and
controversy requirement of the Constitution and
permits decisions to be made without concrete
factual settings and in sterile abstract contexts. But,
as the U.S. Supreme Court pointed out in Younger v.
Harris
[T]he task of analyzing a proposed statute,
pinpointing its deficiencies, and requiring correction
of these deficiencies before the statute is put into
effect, is rarely if ever an appropriate task for the
judiciary. The combination of the relative remoteness
of the controversy, the impact on the legislative
process of the relief sought, and above all the
speculative and amorphous nature of the required
line-by-line analysis of detailed statutes, . . .
ordinarily results in a kind of case that is wholly
unsatisfactory for deciding constitutional questions,
whichever way they might be decided.
For these reasons, "on its face" invalidation of
statutes has been described as "manifestly strong
medicine," to be employed "sparingly and only as a
last resort," and is generally disfavored. In
determining the constitutionality of a statute,
therefore, its provisions which are alleged to have
been violated in a case must be examined in the light
of the conduct with which the defendant is
charged.56 (Underscoring supplied.)
The confusion apparently stems from the interlocking
relation of the overbreadth and vagueness doctrines
as grounds for a facial or as-applied challenge
against a penal statute (under a claim of violation of
due process of law) or a speech regulation (under a
claim of abridgement of the freedom of speech and
cognate rights).
To be sure, the doctrine of vagueness and the
doctrine of overbreadth do not operate on the same
plane.
A statute or act suffers from the defect
of vagueness when it lacks comprehensible
standards that men of common intelligence must
necessarily guess at its meaning and differ as to its
application. It is repugnant to the Constitution in two
respects: (1) it violates due process for failure to
accord persons, especially the parties targeted by it,
fair notice of the conduct to avoid; and (2) it leaves
law enforcers unbridled discretion in carrying out its
provisions and becomes an arbitrary flexing of the
Government muscle.57 The overbreadth doctrine,
meanwhile, decrees that a governmental purpose to
control or prevent activities constitutionally subject to
state regulations may not be achieved by means
which sweep unnecessarily broadly and thereby
invade the area of protected freedoms.58
As distinguished from the vagueness doctrine, the
overbreadth doctrine assumes that individuals will
understand what a statute prohibits and will
accordingly refrain from that behavior, even though
some of it is protected.59
A "facial" challenge is likewise different from an "as-
applied" challenge.
Distinguished from an as-applied challenge which
considers only extant facts affecting real litigants,
a facial invalidation is an examination of the entire
law, pinpointing its flaws and defects, not only on the
basis of its actual operation to the parties, but also
on the assumption or prediction that its very
existence may cause others not before the court to
refrain from constitutionally protected speech or
activities.60
Justice Mendoza accurately phrased the subtitle61 in
his concurring opinion that the vagueness and
overbreadth doctrines, as grounds for a facial
challenge, are not applicable to penal laws. A litigant
cannot thus successfully mount a facial challenge
against a criminal statute on either vagueness or
overbreadth grounds.
The allowance of a facial challenge in free speech
cases is justified by the aim to avert the "chilling
effect" on protected speech, the exercise of which
should not at all times be abridged.62 As reflected
earlier, this rationale is inapplicable to plain penal
statutes that generally bear an "in terrorem effect" in
deterring socially harmful conduct. In fact, the
legislature may even forbid and penalize acts
formerly considered innocent and lawful, so long as it
refrains from diminishing or dissuading the exercise
of constitutionally protected rights.63
The Court reiterated that there are "critical limitations
by which a criminal statute may be challenged" and
"underscored that an ‘on-its-face’ invalidation of
penal statutes x x x may not be allowed."64
[T]he rule established in our jurisdiction is, only
statutes on free speech, religious freedom, and other
fundamental rights may be facially challenged. Under
no case may ordinary penal statutes be subjected to
a facial challenge. The rationale is obvious. If a facial
challenge to a penal statute is permitted, the
prosecution of crimes may be hampered. No
prosecution would be possible. A strong criticism
against employing a facial challenge in the case of
penal statutes, if the same is allowed, would
effectively go against the grain of the doctrinal
requirement of an existing and concrete controversy
before judicial power may be appropriately
exercised. A facial challenge against a penal statute
is, at best, amorphous and speculative. It would,
essentially, force the court to consider third parties
who are not before it. As I have said in my opposition
to the allowance of a facial challenge to attack penal
statutes, such a test will impair the State’s ability to
deal with crime. If warranted, there would be nothing
that can hinder an accused from defeating the
State’s power to prosecute on a mere showing that,
as applied to third parties, the penal statute is vague
or overbroad, notwithstanding that the law is clear as
applied to him.65 (Emphasis and underscoring
supplied)
It is settled, on the other hand, that the application
of the overbreadth doctrine is limited to a facial
kind of challenge and, owing to the given
rationale of a facial challenge, applicable only to
free speech cases.
By its nature, the overbreadth doctrine has to
necessarily apply a facial type of invalidation in order
to plot areas of protected speech, inevitably almost
always under situations not before the court, that are
impermissibly swept by the substantially overbroad
regulation. Otherwise stated, a statute cannot be
properly analyzed for being substantially overbroad if
the court confines itself only to facts as applied to the
litigants.
The most distinctive feature of the overbreadth
technique is that it marks an exception to some of
the usual rules of constitutional litigation. Ordinarily,
a particular litigant claims that a statute is
unconstitutional as applied to him or her; if the
litigant prevails, the courts carve away the
unconstitutional aspects of the law by invalidating its
improper applications on a case to case basis.
Moreover, challengers to a law are not permitted to
raise the rights of third parties and can only assert
their own interests. In overbreadth analysis, those
rules give way; challenges are permitted to raise the
rights of third parties; and the court invalidates the
entire statute "on its face," not merely "as applied
for" so that the overbroad law becomes
unenforceable until a properly authorized court
construes it more narrowly. The factor that motivates
courts to depart from the normal adjudicatory rules is
the concern with the "chilling;" deterrent effect of the
overbroad statute on third parties not courageous
enough to bring suit. The Court assumes that an
overbroad law’s "very existence may cause others
not before the court to refrain from constitutionally
protected speech or expression." An overbreadth
ruling is designed to remove that deterrent effect on
the speech of those third parties.66 (Emphasis in the
original omitted; underscoring supplied.)
In restricting the overbreadth doctrine to free speech
claims, the Court, in at least two cases,67 observed
that the US Supreme Court has not recognized an
overbreadth doctrine outside the limited context of
the First Amendment,68 and that claims of facial
overbreadth have been entertained in cases
involving statutes which, by their terms, seek to
regulate only spoken words.69 In Virginia v. Hicks,70 it
was held that rarely, if ever, will an overbreadth
challenge succeed against a law or regulation that is
not specifically addressed to speech or speech-
related conduct. Attacks on overly broad statutes are
justified by the "transcendent value to all society of
constitutionally protected expression."71
Since a penal statute may only be assailed for
being vague as applied to petitioners, a limited
vagueness analysis of the definition of "terrorism" in
RA 9372 is legally impermissible absent an actual or
imminent charge against them
While Estrada did not apply the overbreadth
doctrine, it did not preclude the operation of the
vagueness test on the Anti-Plunder Law as
applied to the therein petitioner, finding, however,
that there was no basis to review the law "on its face
and in its entirety."72 It stressed that "statutes found
vague as a matter of due process typically are
invalidated only 'as applied' to a particular
defendant."73
American jurisprudence74 instructs that "vagueness
challenges that do not involve the First Amendment
must be examined in light of the specific facts of the
case at hand and not with regard to the statute's
facial validity."
For more than 125 years, the US Supreme Court has
evaluated defendants’ claims that criminal statutes
are unconstitutionally vague, developing a doctrine
hailed as "among the most important guarantees of
liberty under law."75
In this jurisdiction, the void-for-vagueness doctrine
asserted under the due process clause has been
utilized in examining the constitutionality of criminal
statutes. In at least three cases,76 the Court brought
the doctrine into play in analyzing an ordinance
penalizing the non-payment of municipal tax on
fishponds, the crime of illegal recruitment punishable
under Article 132(b) of the Labor Code, and the
vagrancy provision under Article 202 (2) of the
Revised Penal Code. Notably, the petitioners in
these three cases, similar to those in the
two Romualdez and Estrada cases, were
actually charged with the therein assailed penal
statute, unlike in the present case.
There is no merit in the claim that RA 9372 regulates
speech so as to permit a facial analysis of its validity
From the definition of the crime of terrorism in the
earlier cited Section 3 of RA 9372, the following
elements may be culled: (1) the offender commits an
act punishable under any of the cited provisions of
the Revised Penal Code, or under any of the
enumerated special penal laws; (2) the commission
of the predicate crime sows and creates a condition
of widespread and extraordinary fear and panic
among the populace; and (3) the offender is actuated
by the desire to coerce the government to give in to
an unlawful demand.
In insisting on a facial challenge on the invocation
that the law penalizes speech, petitioners contend
that the element of "unlawful demand" in the
definition of terrorism77 must necessarily be
transmitted through some form of expression
protected by the free speech clause.
The argument does not persuade. What the law
seeks to penalize is conduct, not speech.
Before a charge for terrorism may be filed under RA
9372, there must first be a predicate crime actually
committed to trigger the operation of the key
qualifying phrases in the other elements of the crime,
including the coercion of the government to accede
to an "unlawful demand." Given the presence of the
first element, any attempt at singling out or
highlighting the communicative component of the
prohibition cannot recategorize the unprotected
conduct into a protected speech.
Petitioners’ notion on the transmission of message is
entirely inaccurate, as it unduly focuses on just one
particle of an element of the crime. Almost every
commission of a crime entails some mincing of
words on the part of the offender like in declaring to
launch overt criminal acts against a victim, in
haggling on the amount of ransom or conditions, or
in negotiating a deceitful transaction. An analogy in
one U.S. case78 illustrated that the fact that the
prohibition on discrimination in hiring on the basis of
race will require an employer to take down a sign
reading "White Applicants Only" hardly means that
the law should be analyzed as one regulating speech
rather than conduct.
Utterances not elemental but inevitably incidental to
the doing of the criminal conduct alter neither the
intent of the law to punish socially harmful conduct
nor the essence of the whole act as conduct and not
speech. This holds true a fortiori in the present case
where the expression figures only as an inevitable
incident of making the element of coercion
perceptible.
[I]t is true that the agreements and course of conduct
here were as in most instances brought about
through speaking or writing. But it has never been
deemed an abridgement of freedom of speech or
press to make a course of conduct illegal merely
because the conduct was, in part,
initiated, evidenced, or carried out by means of
language, either spoken, written, or printed. Such an
expansive interpretation of the constitutional
guaranties of speech and press would make it
practically impossible ever to enforce laws against
agreements in restraint of trade as well as many
other agreements and conspiracies deemed injurious
to society.79 (italics and underscoring supplied)
Certain kinds of speech have been treated as
unprotected conduct, because they merely evidence
a prohibited conduct.80 Since speech is not involved
here, the Court cannot heed the call for a facial
analysis.
1avv phi 1
therein plaintiffs faced a "credible threat of
prosecution" and "should not be required to await
and undergo a criminal prosecution as the sole
means of seeking relief."
As earlier reflected, petitioners have
established neither an actual charge nor a credible
threat of prosecution under RA 9372. Even a limited
vagueness analysis of the assailed definition of
"terrorism" is thus legally impermissible. The Court
reminds litigants that judicial power neither
contemplates speculative counseling on a statute’s
future effect on hypothetical scenarios nor allows the
courts to be used as an extension of a failed
legislative lobbying in Congress.
WHEREFORE, the petitions are DISMISSED.

SO ORDERED.
IN FINE, Estrada and the other cited authorities
engaged in a vagueness analysis of the therein
subject penal statute as applied to the therein
petitioners inasmuch as they were actually charged
with the pertinent crimes challenged on vagueness
grounds. The Court in said cases, however, found no
basis to review the assailed penal statute on its face
and in its entirety.

In Holder, on the other hand, the US Supreme Court

allowed the pre-enforcement review of a criminal
statute, challenged on vagueness grounds, since the
D. DUE PROCESS AND POLICE POWER (CASES)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 122846 January 20, 2009
WHITE LIGHT CORPORATION, TITANIUM
CORPORATION and STA. MESA TOURIST &
DEVELOPMENT CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO,
MAYOR ALFREDO S. LIM, Respondent.
DECISION
Tinga, J.:
With another city ordinance of Manila also principally
involving the tourist district as subject, the Court is
confronted anew with the incessant clash between
government power and individual liberty in tandem
with the archetypal tension between law and
morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed
the nullification of a city ordinance barring the
operation of motels and inns, among other
establishments, within the Ermita-Malate area. The
petition at bar assails a similarly-motivated city
ordinance that prohibits those same establishments
from offering short-time admission, as well as pro-
rated or "wash up" rates for such abbreviated stays.
Our earlier decision tested the city ordinance against
our sacred constitutional rights to liberty, due
process and equal protection of law. The same
parameters apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on
Civil Procedure, which seeks the reversal of the
Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of
Appeals, challenges the validity of Manila City
Ordinance No. 7774 entitled, "An Ordinance
Prohibiting Short-Time Admission, Short-Time
Admission Rates, and Wash-Up Rate Schemes in
Hotels, Motels, Inns, Lodging Houses, Pension
Houses, and Similar Establishments in the City of
Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim
(Mayor Lim) signed into law the Ordinance.4 The
Ordinance is reproduced in full, hereunder:
SECTION 1. Declaration of Policy. It is hereby the
declared policy of the City Government to protect the
best interest, health and welfare, and the morality of
its constituents in general and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An
Ordinance" prohibiting short time admission in
hotels, motels, lodging houses, pension houses and
similar establishments in the City of Manila.
SEC. 3. Pursuant to the above policy, short-time
admission and rate [sic], wash-up rate or other
similarly concocted terms, are hereby prohibited in
hotels, motels, inns, lodging houses, pension houses
and similar establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission
shall mean admittance and charging of room rate for
less than twelve (12) hours at any given time or the
renting out of rooms more than twice a day or any
other term that may be concocted by owners or
managers of said establishments but would mean
the same or would bear the same meaning.
SEC. 5. Penalty Clause. Any person or corporation
who shall violate any provision of this ordinance shall
upon conviction thereof be punished by a fine of Five
Thousand (₱5,000.00) Pesos or imprisonment for a
period of not exceeding one (1) year or both such
fine and imprisonment at the discretion of the court;
Provided, That in case of [a] juridical person, the
president, the manager, or the persons in charge of
the operation thereof shall be liable: Provided,
further, That in case of subsequent conviction for the
same offense, the business license of the guilty party
shall automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of
City ordinances not consistent with or contrary to this
measure or any portion hereof are hereby deemed
repealed.
SEC. 7. Effectivity. This ordinance shall take effect
immediately upon approval.
Enacted by the city Council of Manila at its regular
session today, November 10, 1992.
Approved by His Honor, the Mayor on December 3,
1992.
On December 15, 1992, the Malate Tourist and
Development Corporation (MTDC) filed a complaint
for declaratory relief with prayer for a writ of
preliminary injunction and/or temporary restraining
order ( TRO)5 with the Regional Trial Court (RTC) of
Manila, Branch 9 impleading as defendant, herein
respondent City of Manila (the City) represented by
Mayor Lim.6 MTDC prayed that the Ordinance,
insofar as it includes motels and inns as among its
prohibited establishments, be declared invalid and
unconstitutional. MTDC claimed that as owner and
operator of the Victoria Court in Malate, Manila it was
authorized by Presidential Decree (P.D.) No. 259 to
admit customers on a short time basis as well as to
charge customers wash up rates for stays of only
three hours.
On December 21, 1992, petitioners White Light
Corporation (WLC), Titanium Corporation (TC) and
Sta. Mesa Tourist and Development Corporation
(STDC) filed a motion to intervene and to admit
attached complaint-in-intervention7 on the ground
that the Ordinance directly affects their business
interests as operators of drive-in-hotels and motels in
Manila.8 The three companies are components of the
Anito Group of Companies which owns and operates
several hotels and motels in Metro Manila.9
On December 23, 1992, the RTC granted the motion
to intervene.10 The RTC also notified the Solicitor
General of the proceedings pursuant to then Rule
64, Section 4 of the Rules of Court. On the same
date, MTDC moved to withdraw as plaintiff.11
On December 28, 1992, the RTC granted MTDC's
motion to withdraw.12 The RTC issued a TRO on
January 14, 1993, directing the City to cease and
desist from enforcing the Ordinance.13 The City filed
an Answer dated January 22, 1993 alleging that the
Ordinance is a legitimate exercise of police power.14
On February 8, 1993, the RTC issued a writ of
preliminary injunction ordering the city to desist from
the enforcement of the Ordinance.15 A month later,
on March 8, 1993, the Solicitor General filed his
Comment arguing that the Ordinance is
constitutional.
During the pre-trial conference, the WLC, TC and
STDC agreed to submit the case for decision without
trial as the case involved a purely legal
question.16 On October 20, 1993, the RTC rendered
a decision declaring the Ordinance null and void.
The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing,
[O]rdinance No. 7774 of the City of Manila is hereby
declared null and void.
Accordingly, the preliminary injunction heretofor
issued is hereby made permanent.
SO ORDERED.17
The RTC noted that the ordinance "strikes at the
personal liberty of the individual guaranteed and
jealously guarded by the Constitution."18 Reference
was made to the provisions of the Constitution
encouraging private enterprises and the incentive to
needed investment, as well as the right to operate
economic enterprises. Finally, from the observation
that the illicit relationships the Ordinance sought to
dissuade could nonetheless be consummated by
simply paying for a 12-hour stay, the RTC likened
the law to the ordinance annulled in Ynot v.
Intermediate Appellate Court,19 where the legitimate
purpose of preventing indiscriminate slaughter of
carabaos was sought to be effected through an inter-
province ban on the transport of carabaos and
carabeef.
The City later filed a petition for review
on certiorari with the Supreme Court.20 The petition
was docketed as G.R. No. 112471. However in a
resolution dated January 26, 1994, the Court treated
the petition as a petition for certiorari and referred
the petition to the Court of Appeals.21
Before the Court of Appeals, the City asserted that
the Ordinance is a valid exercise of police power
pursuant to Section 458 (4)(iv) of the Local
Government Code which confers on cities, among
other local government units, the power:
[To] regulate the establishment, operation and
maintenance of cafes, restaurants, beerhouses,
hotels, motels, inns, pension houses, lodging houses
and other similar establishments, including tourist
guides and transports.22
The Ordinance, it is argued, is also a valid exercise
of the power of the City under Article III, Section
18(kk) of the Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and
proper for the sanitation and safety, the furtherance
of the prosperity and the promotion of the morality,
peace, good order, comfort, convenience and
general welfare of the city and its inhabitants, and
such others as be necessary to carry into effect and
discharge the powers and duties conferred by this
Chapter; and to fix penalties for the violation of
ordinances which shall not exceed two hundred
pesos fine or six months imprisonment, or both such
fine and imprisonment for a single offense.23
Petitioners argued that the Ordinance is
unconstitutional and void since it violates the right to
privacy and the freedom of movement; it is an invalid
exercise of police power; and it is an unreasonable
and oppressive interference in their business.
The Court of Appeals reversed the decision of the
RTC and affirmed the constitutionality of the
Ordinance.24 First, it held that the Ordinance did not
violate the right to privacy or the freedom of
movement, as it only penalizes the owners or
operators of establishments that admit individuals for
short time stays. Second, the virtually limitless reach
of police power is only constrained by having a lawful
object obtained through a lawful method. The lawful
objective of the Ordinance is satisfied since it aims to
curb immoral activities. There is a lawful method
since the establishments are still allowed to operate.
Third, the adverse effect on the establishments is
justified by the well-being of its constituents in
general. Finally, as held in Ermita-Malate Motel
Operators Association v. City Mayor of Manila, liberty
is regulated by law.
TC, WLC and STDC come to this Court via petition
for review on certiorari.25 In their petition and
Memorandum, petitioners in essence repeat the
assertions they made before the Court of Appeals.
They contend that the assailed Ordinance is an
invalid exercise of police power.
II.
We must address the threshold issue of petitioners’
standing. Petitioners allege that as owners of
establishments offering "wash-up" rates, their
business is being unlawfully interfered with by the
Ordinance. However, petitioners also allege that the
equal protection rights of their clients are also being
interfered with. Thus, the crux of the matter is
whether or not these establishments have the
requisite standing to plead for protection of their
patrons' equal protection rights.
Standing or locus standi is the ability of a party to
demonstrate to the court sufficient connection to and
harm from the law or action challenged to support
that party's participation in the case. More
importantly, the doctrine of standing is built on the
principle of separation of powers,26 sparing as it does
unnecessary interference or invalidation by the
judicial branch of the actions rendered by its co-
equal branches of government.
The requirement of standing is a core component of
the judicial system derived directly from the
Constitution.27 The constitutional component of
standing doctrine incorporates concepts which
concededly are not susceptible of precise
definition.28 In this jurisdiction, the extancy of "a direct
and personal interest" presents the most obvious
cause, as well as the standard test for a petitioner's
standing.29 In a similar vein, the United States
Supreme Court reviewed and elaborated on the
meaning of the three constitutional standing
requirements of injury, causation, and redressability
in Allen v. Wright.30
Nonetheless, the general rules on standing admit of
several exceptions such as the overbreadth doctrine,
taxpayer suits, third party standing and, especially in
the Philippines, the doctrine of transcendental
importance.31
For this particular set of facts, the concept of third
party standing as an exception and the overbreadth
doctrine are appropriate. In Powers v. Ohio,32 the
United States Supreme Court wrote that: "We have
recognized the right of litigants to bring actions on
behalf of third parties, provided three important
criteria are satisfied: the litigant must have suffered
an ‘injury-in-fact,’ thus giving him or her a "sufficiently
concrete interest" in the outcome of the issue in
dispute; the litigant must have a close relation to the
third party; and there must exist some hindrance to
the third party's ability to protect his or her own
interests."33 Herein, it is clear that the business
interests of the petitioners are likewise injured by the
Ordinance. They rely on the patronage of their
customers for their continued viability which appears
to be threatened by the enforcement of the
Ordinance. The relative silence in constitutional
litigation of such special interest groups in our nation
such as the American Civil Liberties Union in the
United States may also be construed as a hindrance
for customers to bring suit.34
American jurisprudence is replete with examples
where parties-in-interest were allowed standing to
advocate or invoke the fundamental due process or
equal protection claims of other persons or classes
of persons injured by state action. In Griswold v.
Connecticut,35 the United States Supreme Court held
that physicians had standing to challenge a
reproductive health statute that would penalize them
as accessories as well as to plead the constitutional
protections available to their patients. The Court held
that:
"The rights of husband and wife, pressed here, are
likely to be diluted or adversely affected unless those
rights are considered in a suit involving those who
have this kind of confidential relation to them."36
An even more analogous example may be found
in Craig v. Boren,37 wherein the United States
Supreme Court held that a licensed beverage vendor
has standing to raise the equal protection claim of a
male customer challenging a statutory scheme
prohibiting the sale of beer to males under the age of
21 and to females under the age of 18. The United
States High Court explained that the vendors had
standing "by acting as advocates of the rights of third
parties who seek access to their market or
function."38
Assuming arguendo that petitioners do not have a
relationship with their patrons for the former to assert
the rights of the latter, the overbreadth doctrine
comes into play. In overbreadth analysis, challengers
to government action are in effect permitted to raise
the rights of third parties. Generally applied to
statutes infringing on the freedom of speech, the
overbreadth doctrine applies when a statute
needlessly restrains even constitutionally guaranteed
rights.39 In this case, the petitioners claim that the
Ordinance makes a sweeping intrusion into the right
to liberty of their clients. We can see that based on
the allegations in the petition, the Ordinance suffers
from overbreadth.
We thus recognize that the petitioners have a right to
assert the constitutional rights of their clients to
patronize their establishments for a "wash-rate" time
frame.
 III.
To students of jurisprudence, the facts of this case
will recall to mind not only the recent City of
Manila ruling, but our 1967 decision in Ermita-Malate
Hotel and Motel Operations Association, Inc., v. Hon.
City Mayor of Manila.40 Ermita-Malate concerned the
City ordinance requiring patrons to fill up a
prescribed form stating personal information such as
name, gender, nationality, age, address and
occupation before they could be admitted to a motel,
hotel or lodging house. This earlier ordinance was
precisely enacted to minimize certain practices
deemed harmful to public morals. A purpose similar
to the annulled ordinance in City of Manila which
sought a blanket ban on motels, inns and similar
establishments in the Ermita-Malate area. However,
the constitutionality of the ordinance in Ermita-
Malate was sustained by the Court.
The common thread that runs through those
decisions and the case at bar goes beyond the
singularity of the localities covered under the
respective ordinances. All three ordinances were
enacted with a view of regulating public morals
including particular illicit activity in transient lodging
establishments. This could be described as the
middle case, wherein there is no wholesale ban on
motels and hotels but the services offered by these
establishments have been severely restricted. At its
core, this is another case about the extent to which
the State can intrude into and regulate the lives of its
citizens.
The test of a valid ordinance is well established. A
long line of decisions including City of Manila has
held that for an ordinance to be valid, it must not only
be within the corporate powers of the local
government unit to enact and pass according to the
procedure prescribed by law, it must also conform to
the following substantive requirements: (1) must not
contravene the Constitution or any statute; (2) must
not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate
trade; (5) must be general and consistent with public
policy; and (6) must not be unreasonable.41
The Ordinance prohibits two specific and distinct
business practices, namely wash rate admissions
and renting out a room more than twice a day. The
ban is evidently sought to be rooted in the police
power as conferred on local government units by the
Local Government Code through such implements
as the general welfare clause.
A.
Police power, while incapable of an exact definition,
has been purposely veiled in general terms to
underscore its comprehensiveness to meet all
exigencies and provide enough room for an efficient
and flexible response as the conditions
warrant.42 Police power is based upon the concept of
necessity of the State and its corresponding right to
protect itself and its people.43 Police power has been
used as justification for numerous and varied actions
by the State. These range from the regulation of
dance halls,44 movie theaters,45 gas stations46 and
cockpits.47 The awesome scope of police power is
best demonstrated by the fact that in its hundred or
so years of presence in our nation’s legal system, its
use has rarely been denied.
The apparent goal of the Ordinance is to minimize if
not eliminate the use of the covered establishments
for illicit sex, prostitution, drug use and alike. These
goals, by themselves, are unimpeachable and
certainly fall within the ambit of the police power of
the State. Yet the desirability of these ends do not
sanctify any and all means for their achievement.
Those means must align with the Constitution, and
our emerging sophisticated analysis of its
guarantees to the people. The Bill of Rights stands
as a rebuke to the seductive theory of Macchiavelli,
and, sometimes even, the political majorities
animated by his cynicism.
Even as we design the precedents that establish the
framework for analysis of due process or equal
protection questions, the courts are naturally
inhibited by a due deference to the co-equal
branches of government as they exercise their
political functions. But when we are compelled to
nullify executive or legislative actions, yet another
form of caution emerges. If the Court were animated
by the same passing fancies or turbulent emotions
that motivate many political decisions, judicial
integrity is compromised by any perception that the
judiciary is merely the third political branch of
government. We derive our respect and good
standing in the annals of history by acting as
judicious and neutral arbiters of the rule of law, and
there is no surer way to that end than through the
development of rigorous and sophisticated legal
standards through which the courts analyze the most
fundamental and far-reaching constitutional
questions of the day.
B.
The primary constitutional question that confronts us
is one of due process, as guaranteed under Section
1, Article III of the Constitution. Due process evades
a precise definition.48 The purpose of the guaranty is
to prevent arbitrary governmental encroachment
against the life, liberty and property of individuals.
The due process guaranty serves as a protection
against arbitrary regulation or seizure. Even
corporations and partnerships are protected by the
guaranty insofar as their property is concerned.
The due process guaranty has traditionally been
interpreted as imposing two related but distinct
restrictions on government, "procedural due process"
and "substantive due process." Procedural due
process refers to the procedures that the
government must follow before it deprives a person
of life, liberty, or property.49 Procedural due process
concerns itself with government action adhering to
the established process when it makes an intrusion
into the private sphere. Examples range from the
form of notice given to the level of formality of a
hearing.
If due process were confined solely to its procedural
aspects, there would arise absurd situation of
arbitrary government action, provided the proper
formalities are followed. Substantive due process
completes the protection envisioned by the due
process clause. It inquires whether the government
has sufficient justification for depriving a person of
life, liberty, or property.50
The question of substantive due process, moreso
than most other fields of law, has reflected
dynamism in progressive legal thought tied with the
expanded acceptance of fundamental freedoms.
Police power, traditionally awesome as it may be, is
now confronted with a more rigorous level of analysis
before it can be upheld. The vitality though of
constitutional due process has not been predicated
on the frequency with which it has been utilized to
achieve a liberal result for, after all, the libertarian
ends should sometimes yield to the prerogatives of
the State. Instead, the due process clause has
acquired potency because of the sophisticated
methodology that has emerged to determine the
proper metes and bounds for its application.
C.
The general test of the validity of an ordinance on
substantive due process grounds is best tested when
assessed with the evolved footnote 4 test laid down
by the U.S. Supreme Court in U.S. v. Carolene
Products.51 Footnote 4 of the Carolene Products
case acknowledged that the judiciary would defer to
the legislature unless there is a discrimination
against a "discrete and insular" minority or
infringement of a "fundamental
right."52 Consequently, two standards of judicial
review were established: strict scrutiny for laws
dealing with freedom of the mind or restricting the
political process, and the rational basis standard of
review for economic legislation.
A third standard, denominated as heightened or
immediate scrutiny, was later adopted by the U.S.
Supreme Court for evaluating classifications based
on gender53 and legitimacy.54 Immediate scrutiny was
adopted by the U.S. Supreme Court in Craig,55 after
the Court declined to do so in Reed v. Reed.56 While
the test may have first been articulated in equal
protection analysis, it has in the United States since
been applied in all substantive due process cases as
well.
We ourselves have often applied the rational basis
test mainly in analysis of equal protection
challenges.57 Using the rational basis examination,
laws or ordinances are upheld if they rationally
further a legitimate governmental interest.58 Under
intermediate review, governmental interest is
extensively examined and the availability of less
restrictive measures is considered.59 Applying strict
scrutiny, the focus is on the presence of compelling,
rather than substantial, governmental interest and on
the absence of less restrictive means for achieving
that interest.
In terms of judicial review of statutes or ordinances,
strict scrutiny refers to the standard for determining
the quality and the amount of governmental interest
brought to justify the regulation of fundamental
freedoms.60 Strict scrutiny is used today to test the
validity of laws dealing with the regulation of speech,
gender, or race as well as other fundamental rights
as expansion from its earlier applications to equal
protection.61 The United States Supreme Court has
expanded the scope of strict scrutiny to protect
fundamental rights such as suffrage,62 judicial
access63 and interstate travel.64
If we were to take the myopic view that an Ordinance
should be analyzed strictly as to its effect only on the
petitioners at bar, then it would seem that the only
restraint imposed by the law which we are
capacitated to act upon is the injury to property
sustained by the petitioners, an injury that would
warrant the application of the most deferential
standard – the rational basis test. Yet as earlier
stated, we recognize the capacity of the petitioners
to invoke as well the constitutional rights of their
patrons – those persons who would be deprived of
availing short time access or wash-up rates to the
lodging establishments in question.
Viewed cynically, one might say that the infringed
rights of these customers were are trivial since they
seem shorn of political consequence. Concededly,
these are not the sort of cherished rights that, when
proscribed, would impel the people to tear up their
cedulas. Still, the Bill of Rights does not shelter
gravitas alone. Indeed, it is those "trivial" yet
fundamental freedoms – which the people reflexively
exercise any day without the impairing awareness of
their constitutional consequence – that accurately
reflect the degree of liberty enjoyed by the people.
Liberty, as integrally incorporated as a fundamental
right in the Constitution, is not a Ten
Commandments-style enumeration of what may or
what may not be done; but rather an atmosphere of
freedom where the people do not feel labored under
a Big Brother presence as they interact with each
other, their society and nature, in a manner innately
understood by them as inherent, without doing harm
or injury to others.
D.
The rights at stake herein fall within the same
fundamental rights to liberty which we upheld in City
of Manila v. Hon. Laguio, Jr. We expounded on that
most primordial of rights, thus:
Liberty as guaranteed by the Constitution was
defined by Justice Malcolm to include "the right to
exist and the right to be free from arbitrary restraint
or servitude. The term cannot be dwarfed into mere
freedom from physical restraint of the person of the
citizen, but is deemed to embrace the right of man to
enjoy the facilities with which he has been endowed
by his Creator, subject only to such restraint as are
necessary for the common welfare."[65] In
accordance with this case, the rights of the citizen to
be free to use his faculties in all lawful ways; to live
and work where he will; to earn his livelihood by any
lawful calling; and to pursue any avocation are all
deemed embraced in the concept of liberty.[66]
The U.S. Supreme Court in the case of Roth v.
Board of Regents, sought to clarify the meaning of
"liberty." It said:
While the Court has not attempted to define with
exactness the liberty . . . guaranteed [by the Fifth
and Fourteenth Amendments], the term denotes not
merely freedom from bodily restraint but also the
right of the individual to contract, to engage in any of
the common occupations of life, to acquire useful
knowledge, to marry, establish a home and bring up
children, to worship God according to the dictates of
his own conscience, and generally to enjoy those
privileges long recognized . . . as essential to the
orderly pursuit of happiness by free men. In a
Constitution for a free people, there can be no doubt
that the meaning of "liberty" must be broad
indeed.67 [Citations omitted]
It cannot be denied that the primary animus behind
the ordinance is the curtailment of sexual behavior.
The City asserts before this Court that the subject
establishments "have gained notoriety as venue of
‘prostitution, adultery and fornications’ in Manila
since they ‘provide the necessary atmosphere for
clandestine entry, presence and exit and thus
became the ‘ideal haven for prostitutes and thrill-
seekers.’"68 Whether or not this depiction of a mise-
en-scene of vice is accurate, it cannot be denied that
legitimate sexual behavior among willing married or
consenting single adults which is constitutionally
protected69 will be curtailed as well, as it was in the
City of Manila case. Our holding therein retains
significance for our purposes:
The concept of liberty compels respect for the
individual whose claim to privacy and interference
demands respect. As the case of Morfe v. Mutuc,
borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing
reduction to unity. His separateness, his isolation,
are indefeasible; indeed, they are so fundamental
that they are the basis on which his civic obligations
are built. He cannot abandon the consequences of
his isolation, which are, broadly speaking, that his
experience is private, and the will built out of that
experience personal to himself. If he surrenders his
will to others, he surrenders himself. If his will is set
by the will of others, he ceases to be a master of
himself. I cannot believe that a man no longer a
master of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right
was recognized in Morfe, the invasion of which
should be justified by a compelling state
interest. Morfe accorded recognition to the right to
privacy independently of its identification with liberty;
in itself it is fully deserving of constitutional
protection. Governmental powers should stop short
of certain intrusions into the personal life of the
citizen.70
We cannot discount other legitimate activities which
the Ordinance would proscribe or impair. There are
very legitimate uses for a wash rate or renting the
room out for more than twice a day. Entire families
are known to choose pass the time in a motel or
hotel whilst the power is momentarily out in their
homes. In transit passengers who wish to wash up
and rest between trips have a legitimate purpose for
abbreviated stays in motels or hotels. Indeed any
person or groups of persons in need of comfortable
private spaces for a span of a few hours with
purposes other than having sex or using illegal drugs
can legitimately look to staying in a motel or hotel as
a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a
wash rate depriving patrons of a product and the
petitioners of lucrative business ties in with another
constitutional requisite for the legitimacy of the
Ordinance as a police power measure. It must
appear that the interests of the public generally, as
distinguished from those of a particular class, require
an interference with private rights and the means
must be reasonably necessary for the
accomplishment of the purpose and not unduly
oppressive of private rights.71 It must also be evident
that no other alternative for the accomplishment of
the purpose less intrusive of private rights can work.
More importantly, a reasonable relation must exist
between the purposes of the measure and the
means employed for its accomplishment, for even
under the guise of protecting the public interest,
personal rights and those pertaining to private
property will not be permitted to be arbitrarily
invaded.72
Lacking a concurrence of these requisites, the police
measure shall be struck down as an arbitrary
intrusion into private rights. As held in Morfe v.
Mutuc, the exercise of police power is subject to
judicial review when life, liberty or property is
affected.73 However, this is not in any way meant to
take it away from the vastness of State police power
whose exercise enjoys the presumption of validity.74
Similar to the Comelec resolution requiring
newspapers to donate advertising space to
candidates, this Ordinance is a blunt and heavy
instrument.75 The Ordinance makes no distinction
between places frequented by patrons engaged in
illicit activities and patrons engaged in legitimate
actions. Thus it prevents legitimate use of places
where illicit activities are rare or even unheard of. A
plain reading of section 3 of the Ordinance shows it
makes no classification of places of lodging, thus
deems them all susceptible to illicit patronage and
subject them without exception to the unjustified
prohibition.
The Court has professed its deep sentiment and
tenderness of the Ermita-Malate area, its longtime
home,76 and it is skeptical of those who wish to
depict our capital city – the Pearl of the Orient – as a
modern-day Sodom or Gomorrah for the Third World
set. Those still steeped in Nick Joaquin-dreams of
the grandeur of Old Manila will have to accept that
Manila like all evolving big cities, will have its
problems. Urban decay is a fact of mega cities such
as Manila, and vice is a common problem confronted
by the modern metropolis wherever in the world. The
solution to such perceived decay is not to prevent
legitimate businesses from offering a legitimate
product. Rather, cities revive themselves by offering
incentives for new businesses to sprout up thus
attracting the dynamism of individuals that would
bring a new grandeur to Manila.
The behavior which the Ordinance seeks to curtail is
in fact already prohibited and could in fact be
diminished simply by applying existing laws. Less
intrusive measures such as curbing the proliferation
of prostitutes and drug dealers through active police
work would be more effective in easing the situation.
So would the strict enforcement of existing laws and
regulations penalizing prostitution and drug use.
These measures would have minimal intrusion on
the businesses of the petitioners and other legitimate
merchants. Further, it is apparent that the Ordinance
can easily be circumvented by merely paying the
whole day rate without any hindrance to those
engaged in illicit activities. Moreover, drug dealers
and prostitutes can in fact collect "wash rates" from
their clientele by charging their customers a portion
of the rent for motel rooms and even apartments.
IV.
We reiterate that individual rights may be adversely
affected only to the extent that may fairly be required
by the legitimate demands of public interest or public
welfare. The State is a leviathan that must be
restrained from needlessly intruding into the lives of
its citizens. However well-intentioned the Ordinance
may be, it is in effect an arbitrary and whimsical
intrusion into the rights of the establishments as well
as their patrons. The Ordinance needlessly restrains
the operation of the businesses of the petitioners as
well as restricting the rights of their patrons without
sufficient justification. The Ordinance rashly equates
wash rates and renting out a room more than twice a
day with immorality without accommodating
innocuous intentions.
The promotion of public welfare and a sense of
morality among citizens deserves the full
endorsement of the judiciary provided that such
measures do not trample rights this Court is sworn to
protect.77 The notion that the promotion of public
morality is a function of the State is as old as
Aristotle.78 The advancement of moral relativism as a
school of philosophy does not de-legitimize the role
of morality in law, even if it may foster wider debate
on which particular behavior to penalize. It is
conceivable that a society with relatively little shared
morality among its citizens could be functional so
long as the pursuit of sharply variant moral
perspectives yields an adequate accommodation of
different interests.79
To be candid about it, the oft-quoted American
maxim that "you cannot legislate morality" is
ultimately illegitimate as a matter of law, since as
explained by Calabresi, that phrase is more
accurately interpreted as meaning that efforts to
legislate morality will fail if they are widely at
variance with public attitudes about right and
wrong.80 Our penal laws, for one, are founded on
age-old moral traditions, and as long as there are
widely accepted distinctions between right and
wrong, they will remain so oriented.
Yet the continuing progression of the human story
has seen not only the acceptance of the right-wrong
distinction, but also the advent of fundamental
liberties as the key to the enjoyment of life to the
fullest. Our democracy is distinguished from non-free
societies not with any more extensive elaboration on
our part of what is moral and immoral, but from our
recognition that the individual liberty to make the
choices in our lives is innate, and protected by the
State. Independent and fair-minded judges
themselves are under a moral duty to uphold the
Constitution as the embodiment of the rule of law, by
reason of their expression of consent to do so when
they take the oath of office, and because they are
entrusted by the people to uphold the law.81
Even as the implementation of moral norms remains
an indispensable complement to governance, that
prerogative is hardly absolute, especially in the face
of the norms of due process of liberty. And while the
tension may often be left to the courts to relieve, it is
possible for the government to avoid the
constitutional conflict by employing more judicious, Republic of the Philippines
less drastic means to promote morality. SUPREME COURT
Manila
WHEREFORE, the Petition is GRANTED. The
Decision of the Court of Appeals is REVERSED, and THIRD DIVISION
the Decision of the Regional Trial Court of Manila,
Branch 9, is REINSTATED. Ordinance No. 7774 is G.R. No. 177056 September 18, 2009
hereby declared UNCONSTITUTIONAL. No
pronouncement as to costs. THE OFFICE OF THE SOLICITOR
GENERAL, Petitioner,
SO ORDERED. vs.
AYALA LAND INCORPORATED, ROBINSON'S
LAND CORPORATION, SHANGRI-LA PLAZA
CORPORATION and SM PRIME HOLDINGS,
INC., Respondents.

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on

Certiorari,1 under Rule 45 of the Revised Rules of
Court, filed by petitioner Office of the Solicitor
General (OSG), seeking the reversal and setting
aside of the Decision2 dated 25 January 2007 of the
Court of Appeals in CA-G.R. CV No. 76298, which
affirmed in toto the Joint Decision3 dated 29 May
2002 of the Regional Trial Court (RTC) of Makati
City, Branch 138, in Civil Cases No. 00-1208 and
No. 00-1210; and (2) the Resolution4 dated 14 March
2007 of the appellate court in the same case which
denied the Motion for Reconsideration of the OSG.
The RTC adjudged that respondents Ayala Land
Incorporated (Ayala Land), Robinsons Land
Corporation (Robinsons), Shangri-la Plaza
Corporation (Shangri-la), and SM Prime Holdings,
Inc. (SM Prime) could not be obliged to provide free
parking spaces in their malls to their patrons and the
general public.
Respondents Ayala Land, Robinsons, and Shangri-la
maintain and operate shopping malls in various
locations in Metro Manila. Respondent SM Prime
constructs, operates, and leases out commercial
buildings and other structures, among which, are SM
City, Manila; SM Centerpoint, Sta. Mesa, Manila; SM
City, North Avenue, Quezon City; and SM Southmall,
Las Piñas.
The shopping malls operated or leased out by
respondents have parking facilities for all kinds of
motor vehicles, either by way of parking spaces
inside the mall buildings or in separate buildings
and/or adjacent lots that are solely devoted for use
as parking spaces. Respondents Ayala Land,
Robinsons, and SM Prime spent for the construction
of their own parking facilities. Respondent Shangri-la
is renting its parking facilities, consisting of land and
building specifically used as parking spaces, which
were constructed for the lessor’s account.
Respondents expend for the maintenance and
administration of their respective parking facilities.
They provide security personnel to protect the
vehicles parked in their parking facilities and
maintain order within the area. In turn, they collect
the following parking fees from the persons making
use of their parking facilities, regardless of whether
said persons are mall patrons or not:
Respondent Parking Fees
Ayala Land On weekdays, ₱25.00 for the first four ho
and ₱10.00 for every succeeding hour; o
weekends, flat rate of ₱25.00 per day
Robinsons ₱20.00 for the first three hours and ₱10.
for every succeeding hour
Shangri-la Flat rate of ₱30.00 per day
SM Prime ₱10.00 to ₱20.00 (depending on whethe
the parking space is outdoors or indoors
the first three hours and 59 minutes, and
₱10.00 for every succeeding hour or
fraction thereof
The parking tickets or cards issued by respondents
to vehicle owners contain the stipulation that
respondents shall not be responsible for any loss or
damage to the vehicles parked in respondents’
parking facilities.
In 1999, the Senate Committees on Trade and
Commerce and on Justice and Human Rights
conducted a joint investigation for the following
purposes: (1) to inquire into the legality of the
prevalent practice of shopping malls of charging
parking fees; (2) assuming arguendo that the
collection of parking fees was legally authorized, to
find out the basis and reasonableness of the parking
rates charged by shopping malls; and (3) to
determine the legality of the policy of shopping malls
of denying liability in cases of theft, robbery, or
carnapping, by invoking the waiver clause at the
back of the parking tickets. Said Senate Committees
invited the top executives of respondents, who
operate the major malls in the country; the officials
from the Department of Trade and Industry (DTI),
Department of Public Works and Highways (DPWH),
Metro Manila Development Authority (MMDA), and
other local government officials; and the Philippine
Motorists Association (PMA) as representative of the
consumers’ group.
After three public hearings held on 30 September, 3
November, and 1 December 1999, the afore-
mentioned Senate Committees jointly issued Senate
Committee Report No. 2255 on 2 May 2000, in which
they concluded:
In view of the foregoing, the Committees find that the
collection of parking fees by shopping malls is
contrary to the National Building Code and is therefor
[sic] illegal. While it is true that the Code merely
requires malls to provide parking spaces, without
specifying whether it is free or not, both Committees
believe that the reasonable and logical interpretation
of the Code is that the parking spaces are for free.
This interpretation is not only reasonable and logical
but finds support in the actual practice in other
countries like the United States of America where
parking spaces owned and operated by mall owners
are free of charge.
Figuratively speaking, the Code has "expropriated"
the land for parking – something similar to the
subdivision law which require developers to devote
so much of the land area for parks.
Moreover, Article II of R.A. No. 9734 (Consumer Act
of the Philippines) provides that "it is the policy of the
State to protect the interest of the consumers,
promote the general welfare and establish standards
of conduct for business and industry." Obviously, a
contrary interpretation (i.e., justifying the collection of
parking fees) would be going against the declared
policy of R.A. 7394.
Section 201 of the National Building Code gives the
responsibility for the administration and enforcement
of the provisions of the Code, including the
imposition of penalties for administrative violations
thereof to the Secretary of Public Works. This set up,
however, is not being carried out in reality.
In the position paper submitted by the Metropolitan
Manila Development Authority (MMDA), its
chairman, Jejomar C. Binay, accurately pointed out
that the Secretary of the DPWH is responsible for the
implementation/enforcement of the National Building
Code. After the enactment of the Local Government
Code of 1991, the local government units (LGU’s)
were tasked to discharge the regulatory powers of
the DPWH. Hence, in the local level, the Building
Officials enforce all rules/ regulations formulated by
the DPWH relative to all building plans,
specifications and designs including parking space
requirements. There is, however, no single national
department or agency directly tasked to supervise
the enforcement of the provisions of the Code on
parking, notwithstanding the national character of the
law.6
Senate Committee Report No. 225, thus, contained
the following recommendations:
In light of the foregoing, the Committees on Trade
and Commerce and Justice and Human Rights
hereby recommend the following:
1. The Office of the Solicitor General should
institute the necessary action to enjoin the
collection of parking fees as well as to enforce
the penal sanction provisions of the National
Building Code. The Office of the Solicitor
General should likewise study how refund can
be exacted from mall owners who continue to
collect parking fees.
2. The Department of Trade and Industry
pursuant to the provisions of R.A. No. 7394,
otherwise known as the Consumer Act of the
Philippines should enforce the provisions of
the Code relative to parking. Towards this end,
the DTI should formulate the necessary
implementing rules and regulations on parking
in shopping malls, with prior consultations with
the local government units where these are
located. Furthermore, the DTI, in coordination
with the DPWH, should be empowered to
regulate and supervise the construction and
maintenance of parking establishments.
3. Finally, Congress should amend and update
the National Building Code to expressly
prohibit shopping malls from collecting parking
fees by at the same time, prohibit them from
invoking the waiver of liability.7
Respondent SM Prime thereafter received
information that, pursuant to Senate Committee
Report No. 225, the DPWH Secretary and the local
building officials of Manila, Quezon City, and Las
Piñas intended to institute, through the OSG, an
action to enjoin respondent SM Prime and similar
establishments from collecting parking fees, and to
impose upon said establishments penal sanctions
under Presidential Decree No. 1096, otherwise
known as the National Building Code of the
Philippines (National Building Code), and its
Implementing Rules and Regulations (IRR). With the
threatened action against it, respondent SM Prime
filed, on 3 October 2000, a Petition for Declaratory
Relief8 under Rule 63 of the Revised Rules of Court,
against the DPWH Secretary and local building
officials of Manila, Quezon City, and Las Piñas. Said
Petition was docketed as Civil Case No. 00-1208
and assigned to the RTC of Makati City, Branch 138,
presided over by Judge Sixto Marella, Jr. (Judge
Marella). In its Petition, respondent SM Prime prayed
for judgment:
a) Declaring Rule XIX of the Implementing
Rules and Regulations of the National Building
Code as ultra vires, hence, unconstitutional
and void;
b) Declaring [herein respondent SM Prime]’s
clear legal right to lease parking spaces
appurtenant to its department stores, malls,
shopping centers and other commercial
establishments; and
c) Declaring the National Building Code of the
Philippines Implementing Rules and
Regulations as ineffective, not having been
published once a week for three (3)
consecutive weeks in a newspaper of general
circulation, as prescribed by Section 211 of
Presidential Decree No. 1096.
[Respondent SM Prime] further prays for such other
reliefs as may be deemed just and equitable under
the premises.9
The very next day, 4 October 2000, the OSG filed a
Petition for Declaratory Relief and Injunction (with
Prayer for Temporary Restraining Order and Writ of
Preliminary Injunction)10 against respondents. This
Petition was docketed as Civil Case No. 00-1210
and raffled to the RTC of Makati, Branch 135,
presided over by Judge Francisco B. Ibay (Judge
Ibay). Petitioner prayed that the RTC:
1. After summary hearing, a temporary
restraining order and a writ of preliminary
injunction be issued restraining respondents
from collecting parking fees from their
customers; and
2. After hearing, judgment be rendered
declaring that the practice of respondents in
charging parking fees is violative of the
National Building Code and its Implementing
Rules and Regulations and is therefore invalid,
and making permanent any injunctive writ
issued in this case.
Other reliefs just and equitable under the premises
are likewise prayed for.11
On 23 October 2000, Judge Ibay of the RTC of
Makati City, Branch 135, issued an Order
consolidating Civil Case No. 00-1210 with Civil Case
No. 00-1208 pending before Judge Marella of RTC
of Makati, Branch 138.
As a result of the pre-trial conference held on the
morning of 8 August 2001, the RTC issued a Pre-
Trial Order12 of even date which limited the issues to
be resolved in Civil Cases No. 00-1208 and No. 00-
1210 to the following:
1. Capacity of the plaintiff [OSG] in Civil Case
No. 00-1210 to institute the present
proceedings and relative thereto whether the
controversy in the collection of parking fees by
mall owners is a matter of public welfare.
2. Whether declaratory relief is proper.
3. Whether respondent Ayala Land,
Robinsons, Shangri-La and SM Prime are
obligated to provide parking spaces in their
malls for the use of their patrons or the public
in general, free of charge.
4. Entitlement of the parties of [sic] award of
damages.13
On 29 May 2002, the RTC rendered its Joint
Decision in Civil Cases No. 00-1208 and No. 00-
1210.
The RTC resolved the first two issues affirmatively. It
ruled that the OSG can initiate Civil Case No. 00-
1210 under Presidential Decree No. 478 and the
Administrative Code of 1987.14 It also found that all
the requisites for an action for declaratory relief were
present, to wit:
The requisites for an action for declaratory relief are:
(a) there is a justiciable controversy; (b) the
controversy is between persons whose interests are
adverse; (c) the party seeking the relief has a legal
interest in the controversy; and (d) the issue involved
is ripe for judicial determination.
SM, the petitioner in Civil Case No. 001-1208 [sic] is
a mall operator who stands to be affected directly by
the position taken by the government officials sued
namely the Secretary of Public Highways and the
Building Officials of the local government units where
it operates shopping malls. The OSG on the other
hand acts on a matter of public interest and has
taken a position adverse to that of the mall owners
whom it sued. The construction of new and bigger
malls has been announced, a matter which the Court
can take judicial notice and the unsettled issue of
whether mall operators should provide parking
facilities, free of charge needs to be resolved.15
As to the third and most contentious issue, the RTC
pronounced that:
The Building Code, which is the enabling law and the
Implementing Rules and Regulations do not impose
that parking spaces shall be provided by the mall
owners free of charge. Absent such directive[,] Ayala
Land, Robinsons, Shangri-la and SM [Prime] are
under no obligation to provide them for free. Article
1158 of the Civil Code is clear:
"Obligations derived from law are not presumed.
Only those expressly determined in this Code or in
special laws are demandable and shall be regulated
by the precepts of the law which establishes them;
and as to what has not been foreseen, by the
provisions of this Book (1090).["]
xxxx
The provision on ratios of parking slots to several
variables, like shopping floor area or customer area
found in Rule XIX of the Implementing Rules and
Regulations cannot be construed as a directive to
provide free parking spaces, because the enabling
law, the Building Code does not so provide. x x x.
To compel Ayala Land, Robinsons, Shangri-La and
SM [Prime] to provide parking spaces for free can be
considered as an unlawful taking of property right
without just compensation.
Parking spaces in shopping malls are privately
owned and for their use, the mall operators collect
fees. The legal relationship could be either lease or
deposit. In either case[,] the mall owners have the
right to collect money which translates into income.
Should parking spaces be made free, this right of
mall owners shall be gone. This, without just
compensation. Further, loss of effective control over
their property will ensue which is frowned upon by
law.
The presence of parking spaces can be viewed in
another light. They can be looked at as necessary
facilities to entice the public to increase patronage of
their malls because without parking spaces, going to
their malls will be inconvenient. These are[,]
however[,] business considerations which mall
operators will have to decide for themselves. They
are not sufficient to justify a legal conclusion, as the
OSG would like the Court to adopt that it is the
obligation of the mall owners to provide parking
spaces for free.16
The RTC then held that there was no sufficient
evidence to justify any award for damages.
The RTC finally decreed in its 29 May 2002 Joint
Decision in Civil Cases No. 00-1208 and No. 00-
1210 that:
FOR THE REASONS GIVEN, the Court declares
that Ayala Land[,] Inc., Robinsons Land Corporation,
Shangri-la Plaza Corporation and SM Prime
Holdings[,] Inc. are not obligated to provide parking
spaces in their malls for the use of their patrons or
public in general, free of charge.
All counterclaims in Civil Case No. 00-1210 are
dismissed.
No pronouncement as to costs.17
CA-G.R. CV No. 76298 involved the separate
appeals of the OSG18 and respondent SM
Prime19 filed with the Court of Appeals. The sole
assignment of error of the OSG in its Appellant’s
Brief was:
THE TRIAL COURT ERRED IN HOLDING THAT
THE NATIONAL BUILDING CODE DID NOT
INTEND MALL PARKING SPACES TO BE FREE
OF CHARGE[;]20
while the four errors assigned by respondent SM
Prime in its Appellant’s Brief were:
I Respondent Robinsons filed a Motion to Dismiss
THE TRIAL COURT ERRED IN FAILING TO
DECLARE RULE XIX OF THE IMPLEMENTING
RULES AS HAVING BEEN ENACTED ULTRA
VIRES, HENCE, UNCONSTITUTIONAL AND VOID.
II
THE TRIAL COURT ERRED IN FAILING TO
DECLARE THE IMPLEMENTING RULES
INEFFECTIVE FOR NOT HAVING BEEN
PUBLISHED AS REQUIRED BY LAW.
III
THE TRIAL COURT ERRED IN FAILING TO
DISMISS THE OSG’S PETITION FOR
DECLARATORY RELIEF AND INJUNCTION FOR
FAILURE TO EXHAUST ADMINISTRATIVE
REMEDIES.
IV
THE TRIAL COURT ERRED IN FAILING TO
DECLARE THAT THE OSG HAS NO LEGAL
CAPACITY TO SUE AND/OR THAT IT IS NOT A
REAL PARTY-IN-INTEREST IN THE INSTANT
CASE.21
Appeal of the OSG on the ground that the lone issue
raised therein involved a pure question of law, not
reviewable by the Court of Appeals.
The Court of Appeals promulgated its Decision in
CA-G.R. CV No. 76298 on 25 January 2007. The
appellate court agreed with respondent Robinsons
that the appeal of the OSG should suffer the fate of
dismissal, since "the issue on whether or not the
National Building Code and its implementing rules
require shopping mall operators to provide parking
facilities to the public for free" was evidently a
question of law. Even so, since CA-G.R. CV No.
76298 also included the appeal of respondent SM
Prime, which raised issues worthy of consideration,
and in order to satisfy the demands of substantial
justice, the Court of Appeals proceeded to rule on
the merits of the case.
In its Decision, the Court of Appeals affirmed the
capacity of the OSG to initiate Civil Case No. 00-
1210 before the RTC as the legal representative of
the government,22 and as the one deputized by the
Senate of the Republic of the Philippines through
Senate Committee Report No. 225.
The Court of Appeals rejected the contention of
respondent SM Prime that the OSG failed to exhaust
administrative remedies. The appellate court
explained that an administrative review is not a
condition precedent to judicial relief where the
question in dispute is purely a legal one, and nothing
of an administrative nature is to be or can be done.
The Court of Appeals likewise refused to rule on the
validity of the IRR of the National Building Code, as
such issue was not among those the parties had
agreed to be resolved by the RTC during the pre-trial
conference for Civil Cases No. 00-1208 and No. 00-
1210. Issues cannot be raised for the first time on
appeal. Furthermore, the appellate court found that
the controversy could be settled on other grounds,
without touching on the issue of the validity of the
IRR. It referred to the settled rule that courts should
refrain from passing upon the constitutionality of a
law or implementing rules, because of the principle
that bars judicial inquiry into a constitutional
question, unless the resolution thereof is
indispensable to the determination of the case.
Lastly, the Court of Appeals declared that Section
803 of the National Building Code and Rule XIX of
the IRR were clear and needed no further
construction. Said provisions were only intended to
control the occupancy or congestion of areas and
structures. In the absence of any express and clear
provision of law, respondents could not be obliged
and expected to provide parking slots free of charge.
The fallo of the 25 January 2007 Decision of the
Court of Appeals reads:
WHEREFORE, premises considered, the instant
appeals are DENIED. Accordingly, appealed
Decision is hereby AFFIRMED in toto.23
In its Resolution issued on 14 March 2007, the Court
of Appeals denied the Motion for Reconsideration of
the OSG, finding that the grounds relied upon by the
latter had already been carefully considered,
evaluated, and passed upon by the appellate court,
and there was no strong and cogent reason to
modify much less reverse the assailed judgment.
The OSG now comes before this Court, via the
instant Petition for Review, with a single assignment
of error:
THE COURT OF APPEALS SERIOUSLY ERRED IN
AFFIRMING THE RULING OF THE LOWER
COURT THAT RESPONDENTS ARE NOT
OBLIGED TO PROVIDE FREE PARKING SPACES
TO THEIR CUSTOMERS OR THE PUBLIC.24
The OSG argues that respondents are mandated to
provide free parking by Section 803 of the National
Building Code and Rule XIX of the IRR.
According to Section 803 of the National Building
Code:
SECTION 803. Percentage of Site Occupancy
(a) Maximum site occupancy shall be
governed by the use, type of construction, and
height of the building and the use, area,
nature, and location of the site; and subject to
the provisions of the local zoning requirements
and in accordance with the rules and
regulations promulgated by the Secretary.
In connection therewith, Rule XIX of the old
IRR,25 provides:
RULE XIX – PARKING AND LOADING SPACE
REQUIREMENTS
Pursuant to Section 803 of the National Building
Code (PD 1096) providing for maximum site
occupancy, the following provisions on parking and
loading space requirements shall be observed:
1. The parking space ratings listed below are
minimum off-street requirements for specific
uses/occupancies for buildings/structures:
1.1 The size of an average automobile parking slot
shall be computed as 2.4 meters by 5.00 meters for
perpendicular or diagonal parking, 2.00 meters by
6.00 meters for parallel parking. A truck or bus
parking/loading slot shall be computed at a minimum
of 3.60 meters by 12.00 meters. The parking slot
shall be drawn to scale and the total number of
which shall be indicated on the plans and specified
whether or not parking accommodations, are
attendant-managed. (See Section 2 for computation
of parking requirements).
xxxx
1.7 Neighborhood shopping center – 1 slot/100 sq.
m. of shopping floor area
The OSG avers that the aforequoted provisions
should be read together with Section 102 of the
National Building Code, which declares:
SECTION 102. Declaration of Policy
It is hereby declared to be the policy of the State to
safeguard life, health, property, and public welfare,
consistent with the principles of sound environmental
management and control; and to this end, make it
the purpose of this Code to provide for all buildings
and structures, a framework of minimum standards
and requirements to regulate and control their
location, site, design, quality of materials,
construction, use, occupancy, and maintenance.
The requirement of free-of-charge parking, the OSG
argues, greatly contributes to the aim of
safeguarding "life, health, property, and public
welfare, consistent with the principles of sound
environmental management and control." Adequate
parking spaces would contribute greatly to alleviating
traffic congestion when complemented by quick and
easy access thereto because of free-charge parking.
Moreover, the power to regulate and control the use,
occupancy, and maintenance of buildings and
structures carries with it the power to impose fees
and, conversely, to control -- partially or, as in this
case, absolutely -- the imposition of such fees.
The Court finds no merit in the present Petition.
The explicit directive of the afore-quoted statutory
and regulatory provisions, garnered from a plain
reading thereof, is that respondents, as
operators/lessors of neighborhood shopping centers,
should provide parking and loading spaces, in
accordance with the minimum ratio of one slot per
100 square meters of shopping floor area. There is
nothing therein pertaining to the collection (or non-
collection) of parking fees by respondents. In fact,
the term "parking fees" cannot even be found at all in
the entire National Building Code and its IRR.
Statutory construction has it that if a statute is clear
and unequivocal, it must be given its literal meaning
and applied without any attempt at
interpretation.26 Since Section 803 of the National
Building Code and Rule XIX of its IRR do not
mention parking fees, then simply, said provisions do
not regulate the collection of the same. The RTC and
the Court of Appeals correctly applied Article 1158 of
the New Civil Code, which states:
Art. 1158. Obligations derived from law are not
presumed. Only those expressly determined in this
Code or in special laws are demandable, and shall
be regulated by the precepts of the law which
establishes them; and as to what has not been
foreseen, by the provisions of this Book. (Emphasis
ours.)
Hence, in order to bring the matter of parking fees
within the ambit of the National Building Code and its
IRR, the OSG had to resort to specious and feeble
argumentation, in which the Court cannot concur.
The OSG cannot rely on Section 102 of the National
Building Code to expand the coverage of Section
803 of the same Code and Rule XIX of the IRR, so
as to include the regulation of parking fees. The
OSG limits its citation to the first part of Section 102
of the National Building Code declaring the policy of
the State "to safeguard life, health, property, and
public welfare, consistent with the principles of sound
environmental management and control"; but totally
ignores the second part of said provision, which
reads, "and to this end, make it the purpose of this
Code to provide for all buildings and structures, a
framework of minimum standards and requirements
to regulate and control their location, site, design,
quality of materials, construction, use, occupancy,
and maintenance." While the first part of Section 102
of the National Building Code lays down the State
policy, it is the second part thereof that explains how
said policy shall be carried out in the Code. Section
102 of the National Building Code is not an all-
encompassing grant of regulatory power to the
DPWH Secretary and local building officials in the
name of life, health, property, and public welfare. On
the contrary, it limits the regulatory power of said
officials to ensuring that the minimum standards and
requirements for all buildings and structures, as set
forth in the National Building Code, are complied
with.
Consequently, the OSG cannot claim that in addition
to fixing the minimum requirements for parking
spaces for buildings, Rule XIX of the IRR also
mandates that such parking spaces be provided by
building owners free of charge. If Rule XIX is not
covered by the enabling law, then it cannot be added
to or included in the implementing rules. The rule-
making power of administrative agencies must be
confined to details for regulating the mode or
proceedings to carry into effect the law as it has
been enacted, and it cannot be extended to amend
or expand the statutory requirements or to embrace
matters not covered by the statute. Administrative
regulations must always be in harmony with the
provisions of the law because any resulting
discrepancy between the two will always be resolved
in favor of the basic law.27
From the RTC all the way to this Court, the OSG
repeatedly referred to Republic v. Gonzales28 and
City of Ozamis v. Lumapas29 to support its position
that the State has the power to regulate parking
spaces to promote the health, safety, and welfare of
the public; and it is by virtue of said power that
respondents may be required to provide free parking
facilities. The OSG, though, failed to consider the
substantial differences in the factual and legal
backgrounds of these two cases from those of the
Petition at bar.
In Republic, the Municipality of Malabon sought to
eject the occupants of two parcels of land of the
public domain to give way to a road-widening project.
It was in this context that the Court pronounced:
Indiscriminate parking along F. Sevilla Boulevard
and other main thoroughfares was prevalent; this, of
course, caused the build up of traffic in the
surrounding area to the great discomfort and
inconvenience of the public who use the streets.
Traffic congestion constitutes a threat to the health,
welfare, safety and convenience of the people and it
can only be substantially relieved by widening streets
and providing adequate parking areas.
The Court, in City of Ozamis, declared that the City
had been clothed with full power to control and
regulate its streets for the purpose of promoting
public health, safety and welfare. The City can
regulate the time, place, and manner of parking in
the streets and public places; and charge minimal
fees for the street parking to cover the expenses for
supervision, inspection and control, to ensure the
smooth flow of traffic in the environs of the public
market, and for the safety and convenience of the
public.
Republic and City of Ozamis involved parking in the
local streets; in contrast, the present case deals with
privately owned parking facilities available for use by
the general public. In Republic and City of Ozamis,
the concerned local governments regulated parking
pursuant to their power to control and regulate their
streets; in the instant case, the DPWH Secretary and
local building officials regulate parking pursuant to
their authority to ensure compliance with the
minimum standards and requirements under the
National Building Code and its IRR. With the
difference in subject matters and the bases for the
regulatory powers being invoked, Republic and City
of Ozamis do not constitute precedents for this case.
Indeed, Republic and City of Ozamis both contain
pronouncements that weaken the position of the
OSG in the case at bar. In Republic, the Court,
instead of placing the burden on private persons to
provide parking facilities to the general public,
mentioned the trend in other jurisdictions wherein the
municipal governments themselves took the initiative
to make more parking spaces available so as to
alleviate the traffic problems, thus:
Under the Land Transportation and Traffic Code,
parking in designated areas along public streets or
highways is allowed which clearly indicates that
provision for parking spaces serves a useful
purpose. In other jurisdictions where traffic is at least
as voluminous as here, the provision by municipal
governments of parking space is not limited to
parking along public streets or highways. There has
been a marked trend to build off-street parking
facilities with the view to removing parked cars from
the streets. While the provision of off-street parking
facilities or carparks has been commonly undertaken
by private enterprise, municipal governments have
been constrained to put up carparks in response to
public necessity where private enterprise had failed
to keep up with the growing public demand.
American courts have upheld the right of municipal
governments to construct off-street parking facilities
as clearly redounding to the public benefit.30
In City of Ozamis, the Court authorized the collection
by the City of minimal fees for the parking of vehicles
along the streets: so why then should the Court now
preclude respondents from collecting from the public
a fee for the use of the mall parking facilities?
Undoubtedly, respondents also incur expenses in the
maintenance and operation of the mall parking
facilities, such as electric consumption,
compensation for parking attendants and security,
and upkeep of the physical structures.
It is not sufficient for the OSG to claim that "the
power to regulate and control the use, occupancy,
and maintenance of buildings and structures carries
with it the power to impose fees and, conversely, to
control, partially or, as in this case, absolutely, the
imposition of such fees." Firstly, the fees within the
power of regulatory agencies to impose are
regulatory fees. It has been settled law in this
jurisdiction that this broad and all-compassing
governmental competence to restrict rights of liberty
and property carries with it the undeniable power to
collect a regulatory fee. It looks to the enactment of
specific measures that govern the relations not only
as between individuals but also as between private
parties and the political society.31 True, if the
regulatory agencies have the power to impose
regulatory fees, then conversely, they also have the
power to remove the same. Even so, it is worthy to
note that the present case does not involve the
imposition by the DPWH Secretary and local building
officials of regulatory fees upon respondents; but the
collection by respondents of parking fees from
persons who use the mall parking facilities.
Secondly, assuming arguendo that the DPWH
Secretary and local building officials do have
regulatory powers over the collection of parking fees
for the use of privately owned parking facilities, they
cannot allow or prohibit such collection arbitrarily or
whimsically. Whether allowing or prohibiting the
collection of such parking fees, the action of the
DPWH Secretary and local building officials must
pass the test of classic reasonableness and propriety
of the measures or means in the promotion of the
ends sought to be accomplished.32
Keeping in mind the aforementioned test of
reasonableness and propriety of measures or
means, the Court notes that Section 803 of the
National Building Code falls under Chapter 8 on
Light and Ventilation. Evidently, the Code deems it
necessary to regulate site occupancy to ensure that
there is proper lighting and ventilation in every
building. Pursuant thereto, Rule XIX of the IRR
requires that a building, depending on its specific use
and/or floor area, should provide a minimum number
of parking spaces. The Court, however, fails to see
the connection between regulating site occupancy to
ensure proper light and ventilation in every building
vis-à-vis regulating the collection by building owners
of fees for the use of their parking spaces. Contrary
to the averment of the OSG, the former does not
necessarily include or imply the latter. It totally
escapes this Court how lighting and ventilation
conditions at the malls could be affected by the fact
that parking facilities thereat are free or paid for.
The OSG attempts to provide the missing link by
arguing that:
Under Section 803 of the National Building Code,
complimentary parking spaces are required to
enhance light and ventilation, that is, to avoid traffic
congestion in areas surrounding the building, which
certainly affects the ventilation within the building
itself, which otherwise, the annexed parking spaces
would have served. Free-of-charge parking avoids
traffic congestion by ensuring quick and easy access
of legitimate shoppers to off-street parking spaces
annexed to the malls, and thereby removing the
vehicles of these legitimate shoppers off the busy
streets near the commercial establishments.33
The Court is unconvinced. The National Building
Code regulates buildings, by setting the minimum
specifications and requirements for the same. It does
not concern itself with traffic congestion in areas
surrounding the building. It is already a stretch to say
that the National Building Code and its IRR also
intend to solve the problem of traffic congestion
around the buildings so as to ensure that the said
buildings shall have adequate lighting and
ventilation. Moreover, the Court cannot simply
assume, as the OSG has apparently done, that the
traffic congestion in areas around the malls is due to
the fact that respondents charge for their parking
facilities, thus, forcing vehicle owners to just park in
the streets. The Court notes that despite the fees
charged by respondents, vehicle owners still use the
mall parking facilities, which are even fully occupied
on some days. Vehicle owners may be parking in the
streets only because there are not enough parking
spaces in the malls, and not because they are
deterred by the parking fees charged by
respondents. Free parking spaces at the malls may
even have the opposite effect from what the OSG
envisioned: more people may be encouraged by the
free parking to bring their own vehicles, instead of
taking public transport, to the malls; as a result, the
parking facilities would become full sooner, leaving
more vehicles without parking spaces in the malls
and parked in the streets instead, causing even more
traffic congestion.
Without using the term outright, the OSG is actually
invoking police power to justify the regulation by the
State, through the DPWH Secretary and local
building officials, of privately owned parking facilities,
including the collection by the owners/operators of
such facilities of parking fees from the public for the
use thereof. The Court finds, however, that in totally
prohibiting respondents from collecting parking fees
from the public for the use of the mall parking
facilities, the State would be acting beyond the
bounds of police power.
Police power is the power of promoting the public
welfare by restraining and regulating the use of
liberty and property. It is usually exerted in order to
merely regulate the use and enjoyment of the
property of the owner. The power to regulate,
however, does not include the power to prohibit. A
fortiori, the power to regulate does not include the
power to confiscate. Police power does not involve
the taking or confiscation of property, with the
exception of a few cases where there is a necessity
to confiscate private property in order to destroy it for
the purpose of protecting peace and order and of
promoting the general welfare; for instance, the
confiscation of an illegally possessed article, such as
opium and firearms. 34
When there is a taking or confiscation of private
property for public use, the State is no longer
exercising police power, but another of its inherent
powers, namely, eminent domain. Eminent domain
enables the State to forcibly acquire private lands
intended for public use upon payment of just
compensation to the owner.35
Normally, of course, the power of eminent domain
results in the taking or appropriation of title to, and
possession of, the expropriated property; but no
cogent reason appears why the said power may not
be availed of only to impose a burden upon the
owner of condemned property, without loss of title
and possession.36 It is a settled rule that neither
acquisition of title nor total destruction of value is
essential to taking. It is usually in cases where title
remains with the private owner that inquiry should be
made to determine whether the impairment of a
property is merely regulated or amounts to a
compensable taking. A regulation that deprives any
person of the profitable use of his property
constitutes a taking and entitles him to
compensation, unless the invasion of rights is so
slight as to permit the regulation to be justified under
the police power. Similarly, a police regulation that
unreasonably restricts the right to use business
property for business purposes amounts to a taking
of private property, and the owner may recover
therefor.37
1avv phi 1
Although in the present case, title to and/or
possession of the parking facilities remain/s with
respondents, the prohibition against their collection
of parking fees from the public, for the use of said
facilities, is already tantamount to a taking or
confiscation of their properties. The State is not only
requiring that respondents devote a portion of the
latter’s properties for use as parking spaces, but is
also mandating that they give the public access to
said parking spaces for free. Such is already an
excessive intrusion into the property rights of
respondents. Not only are they being deprived of the
right to use a portion of their properties as they wish,
they are further prohibited from profiting from its use
or even just recovering therefrom the expenses for
the maintenance and operation of the required
parking facilities.
The ruling of this Court in City Government of
Quezon City v. Judge Ericta38 is edifying. Therein,
the City Government of Quezon City passed an
ordinance obliging private cemeteries within its
jurisdiction to set aside at least six percent of their
total area for charity, that is, for burial grounds of
deceased paupers. According to the Court, the
ordinance in question was null and void, for it
authorized the taking of private property without just
compensation:
There is no reasonable relation between the setting
aside of at least six (6) percent of the total area of all
private cemeteries for charity burial grounds of
deceased paupers and the promotion of' health,
morals, good order, safety, or the general welfare of
the people. The ordinance is actually a taking without
compensation of a certain area from a private
cemetery to benefit paupers who are charges of the
municipal corporation. Instead of' building or
maintaining a public cemetery for this purpose, the
city passes the burden to private cemeteries.
'The expropriation without compensation of a portion
of private cemeteries is not covered by Section 12(t)
of Republic Act 537, the Revised Charter of Quezon
City which empowers the city council to prohibit the
burial of the dead within the center of population of
the city and to provide for their burial in a proper
place subject to the provisions of general law
regulating burial grounds and cemeteries. When the
Local Government Code, Batas Pambansa Blg. 337
provides in Section 177(q) that a sangguniang
panlungsod may "provide for the burial of the dead in
such place and in such manner as prescribed by law
or ordinance" it simply authorizes the city to provide
its own city owned land or to buy or expropriate
private properties to construct public cemeteries.
This has been the law, and practise in the past. It
continues to the present. Expropriation, however,
requires payment of just compensation. The
questioned ordinance is different from laws and
regulations requiring owners of subdivisions to set
aside certain areas for streets, parks, playgrounds,
and other public facilities from the land they sell to
buyers of subdivision lots. The necessities of public
safety, health, and convenience are very clear from
said requirements which are intended to insure the
development of communities with salubrious and
wholesome environments. The beneficiaries of the
regulation, in turn, are made to pay by the
subdivision developer when individual lots are sold to
homeowners.
resolved by courts if the controversy can be, as in
this case it has been, settled on other grounds.39
WHEREFORE, the instant Petition for Review on
Certiorari is hereby DENIED. The Decision dated 25
January 2007 and Resolution dated 14 March 2007
of the Court of Appeals in CA-G.R. CV No. 76298,
affirming in toto the Joint Decision dated 29 May
2002 of the Regional Trial Court of Makati City,
Branch 138, in Civil Cases No. 00-1208 and No. 00-
1210 are hereby AFFIRMED. No costs.

In conclusion, the total prohibition against the SO ORDERED.

collection by respondents of parking fees from
persons who use the mall parking facilities has no
basis in the National Building Code or its IRR. The
State also cannot impose the same prohibition by
generally invoking police power, since said
prohibition amounts to a taking of respondents’
property without payment of just compensation.

Given the foregoing, the Court finds no more need to

address the issue persistently raised by respondent
SM Prime concerning the unconstitutionality of Rule
XIX of the IRR. In addition, the said issue was not
among those that the parties, during the pre-trial
conference for Civil Cases No. 12-08 and No. 00-
1210, agreed to submit for resolution of the RTC. It is
likewise axiomatic that the constitutionality of a law,
a regulation, an ordinance or an act will not be
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 184778 October 2, 2009
BANGKO SENTRAL NG PILIPINAS MONETARY
BOARD and CHUCHI FONACIER, Petitioners,
vs.
HON. NINA G. ANTONIO-VALENZUELA, in her
capacity as Regional Trial Court Judge of Manila,
Branch 28; RURAL BANK OF PARAÑAQUE, INC.;
RURAL BANK OF SAN JOSE (BATANGAS), INC.;
RURAL BANK OF CARMEN (CEBU), INC.;
PILIPINO RURAL BANK, INC.; PHILIPPINE
COUNTRYSIDE RURAL BANK, INC.; RURAL
BANK OF CALATAGAN (BATANGAS), INC. (now
DYNAMIC RURAL BANK); RURAL BANK OF
DARBCI, INC.; RURAL BANK OF KANANGA
(LEYTE), INC. (now FIRST INTERSTATE RURAL
BANK); RURAL BANK OF BISAYAS
MINGLANILLA (now BANK OF EAST ASIA); and
SAN PABLO CITY DEVELOPMENT BANK,
INC., Respondents.
DECISION
VELASCO, JR., J.:
The Case
This is a Petition for Review on Certiorari under Rule
45 with Prayer for Issuance of a Temporary
Restraining Order (TRO)/Writ of Preliminary
Injunction, questioning the Decision dated
September 30, 20081 of the Court of Appeals (CA) in
CA-G.R. SP No. 103935. The CA Decision upheld
the Order2 dated June 4, 2008 of the Regional Trial
Court (RTC), Branch 28 in Manila, issuing writs of
preliminary injunction in Civil Case Nos. 08-119243,
08-119244, 08-119245, 08-119246, 08-119247, 08-
119248, 08-119249, 08-119250, 08-119251, and 08-
119273, and the Order dated May 21, 2008 that
consolidated the civil cases.
The Facts
In September of 2007, the Supervision and
Examination Department (SED) of the Bangko
Sentral ng Pilipinas (BSP) conducted examinations
of the books of the following banks: Rural Bank of
Parañaque, Inc. (RBPI), Rural Bank of San Jose
(Batangas), Inc., Rural Bank of Carmen (Cebu), Inc.,
Pilipino Rural Bank, Inc., Philippine Countryside
Rural Bank, Inc., Rural Bank of Calatagan
(Batangas), Inc. (now Dynamic Rural Bank), Rural
Bank of Darbci, Inc., Rural Bank of Kananga (Leyte),
Inc. (now First Interstate Rural Bank), Rural Bank de
Bisayas Minglanilla (now Bank of East Asia), and
San Pablo City Development Bank, Inc.
After the examinations, exit conferences were held
with the officers or representatives of the banks
wherein the SED examiners provided them with
copies of Lists of Findings/Exceptions containing the
deficiencies discovered during the examinations.
These banks were then required to comment and to
undertake the remedial measures stated in these
lists within 30 days from their receipt of the lists,
which remedial measures included the infusion of
additional capital. Though the banks claimed that
they made the additional capital infusions, petitioner
Chuchi Fonacier, officer-in-charge of the SED, sent
separate letters to the Board of Directors of each
bank, informing them that the SED found that the
banks failed to carry out the required remedial
measures. In response, the banks requested that
they be given time to obtain BSP approval to amend
their Articles of Incorporation, that they have an
opportunity to seek investors. They requested as
well that the basis for the capital infusion figures be
disclosed, and noted that none of them had received
the Report of Examination (ROE) which finalizes the
audit findings. They also requested meetings with
the BSP audit teams to reconcile audit figures. In
response, Fonacier reiterated the banks’ failure to
comply with the directive for additional capital
infusions.
On May 12, 2008, the RBPI filed a complaint for
nullification of the BSP ROE with application for a
TRO and writ of preliminary injunction before the
RTC docketed as Civil Case No. 08-119243 against
Fonacier, the BSP, Amado M. Tetangco, Jr., Romulo
L. Neri, Vicente B. Valdepenas, Jr., Raul A. Boncan,
Juanita D. Amatong, Alfredo C. Antonio, and Nelly F.
Villafuerte. RBPI prayed that Fonacier, her
subordinates, agents, or any other person acting in
her behalf be enjoined from submitting the ROE or
any similar report to the Monetary Board (MB), or if
the ROE had already been submitted, the MB be
enjoined from acting on the basis of said ROE, on
the allegation that the failure to furnish the bank with
a copy of the ROE violated its right to due process.
The Rural Bank of San Jose (Batangas), Inc., Rural
Bank of Carmen (Cebu), Inc., Pilipino Rural Bank,
Inc., Philippine Countryside Rural Bank, Inc., Rural
Bank of Calatagan (Batangas), Inc., Rural Bank of
Darbci, Inc., Rural Bank of Kananga (Leyte), Inc.,
and Rural Bank de Bisayas Minglanilla followed suit,
filing complaints with the RTC substantially similar to
that of RBPI, including the reliefs prayed for, which
were raffled to different branches and docketed as
Civil Cases Nos. 08-119244, 08-119245, 08-119246,
08-119247, 08-119248, 08-119249, 08-119250, and
08-119251, respectively.
On May 13, 2008, the RTC denied the prayer for a
TRO of Pilipino Rural Bank, Inc. The bank filed a
motion for reconsideration the next day.
On May 14, 2008, Fonacier and the BSP filed their
opposition to the application for a TRO and writ of
preliminary injunction in Civil Case No. 08-119243
with the RTC. Respondent Judge Nina Antonio-
Valenzuela of Branch 28 granted RBPI’s prayer for
the issuance of a TRO.
The other banks separately filed motions for
consolidation of their cases in Branch 28, which
motions were granted. Judge Valenzuela set the
complaint of Rural Bank of San Jose (Batangas), Inc.
for hearing on May 15, 2008. Petitioners assailed the
validity of the consolidation of the nine cases before
the RTC, alleging that the court had already
prejudged the case by the earlier issuance of a TRO
in Civil Case No. 08-119243, and moved for the
inhibition of respondent judge. Petitioners filed a
motion for reconsideration regarding the
consolidation of the subject cases.
On May 16, 2008, San Pablo City Development
Bank, Inc. filed a similar complaint against the same
defendants with the RTC, and this was docketed as
Civil Case No. 08-119273 that was later on
consolidated with Civil Case No. 08-119243.
Petitioners filed an Urgent Motion to Lift/Dissolve the
TRO and an Opposition to the earlier motion for
reconsideration of Pilipino Rural Bank, Inc.
On May 19, 2008, Judge Valenzuela issued an
Order granting the prayer for the issuance of TROs
for the other seven cases consolidated with Civil
Case No. 08-119243. On May 21, 2008, Judge
Valenzuela issued an Order denying petitioners’
motion for reconsideration regarding the
consolidation of cases in Branch 28. On May 22,
2008, Judge Valenzuela granted the urgent motion
for reconsideration of Pilipino Rural Bank, Inc. and
issued a TRO similar to the ones earlier issued.
On May 26, 2008, petitioners filed a Motion to
Dismiss against all the complaints (except that of the
San Pablo City Development Bank, Inc.), on the
grounds that the complaints stated no cause of
action and that a condition precedent for filing the
cases had not been complied with. On May 29,
2008, a hearing was conducted on the application for
a TRO and for a writ of preliminary injunction of San
Pablo City Development Bank, Inc.
The Ruling of the RTC
After the parties filed their respective memoranda,
the RTC, on June 4, 2008, ruled that the banks were
entitled to the writs of preliminary injunction prayed
for. It held that it had been the practice of the SED to
provide the ROEs to the banks before submission to
the MB. It further held that as the banks are the
subjects of examinations, they are entitled to copies
of the ROEs. The denial by petitioners of the banks’
requests for copies of the ROEs was held to be a
denial of the banks’ right to due process.
The dispositive portion of the RTC’s order reads:
WHEREFORE, the Court rules as follows:
1) Re: Civil Case No. 08-119243. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Rural Bank of Paranaque Inc. is
directed to post a bond executed to the
defendants, in the amount of P500,000.00 to
the effect that the plaintiff will pay to the
defendants all damages which they may
sustain by reason of the injunction if the Court
should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and
approval thereof, let a writ of preliminary
injunction be issued to enjoin and restrain the
defendants from submitting the Report of
Examination or any other similar report
prepared in connection with the examination
conducted on the plaintiff, to the Monetary
Board. In case such a Report on Examination
[sic] or any other similar report prepared in
connection with the examination conducted on
the plaintiff has been submitted to the
Monetary Board, the latter and its members
(i.e. defendants Tetangco, Neri, Valdepenas,
Boncan, Amatong, Antonio, and Villafuerte)
are enjoined and restrained from acting on the
basis of said report.
2) Re: Civil Case No. 08-119244. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Rural Bank of San Jose
(Batangas), Inc. is directed to post a bond
executed to the defendants, in the amount of
P500,000.00 to the effect that the plaintiff will
pay to the defendants all damages which they
may sustain by reason of the injunction if the
Court should finally decide that the plaintiff
was not entitled thereto. After posting of the
bond and approval thereof, let a writ of
preliminary injunction be issued to enjoin and
restrain the defendants from submitting the
Report of Examination or any other similar
report prepared in connection with the
examination conducted on the plaintiff, to the
Monetary Board. In case such a Report on
Examination [sic] or any other similar report
prepared in connection with the examination
conducted on the plaintiff has been submitted
to the Monetary Board, the latter and its
members (i.e. defendants Tetangco, Neri,
Valdepenas, Boncan, Amatong, Antonio, and
Villafuerte) are enjoined and restrained from
acting on the basis of said report.
3) Re: Civil Case No. 08-119245. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Rural Bank of Carmen (Cebu),
Inc. is directed to post a bond executed to the
defendants, in the amount of P500,000.00 to
the effect that the plaintiff will pay to the
defendants all damages which they may
sustain by reason of the injunction if the Court
should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and
approval thereof, let a writ of preliminary
injunction be issued to enjoin and restrain the
defendants from submitting the Report of
Examination or any other similar report
prepared in connection with the examination
conducted on the plaintiff, to the Monetary
Board. In case such a Report on Examination
[sic] or any other similar report prepared in
connection with the examination conducted on
the plaintiff has been submitted to the
Monetary Board, the latter and its members
(i.e. defendants Tetangco, Neri, Valdepenas,
Boncan, Amatong, Antonio, and Villafuerte)
are enjoined and restrained from acting on the
basis of said report.
4) Re: Civil Case No. 08-119246. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Pilipino Rural Bank Inc. is
directed to post a bond executed to the
defendants, in the amount of P500,000.00 to
the effect that the plaintiff will pay to the
defendants all damages which they may
sustain by reason of the injunction if the Court
should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and
approval thereof, let a writ of preliminary
injunction be issued to enjoin and restrain the
defendants from submitting the Report of
Examination or any other similar report
prepared in connection with the examination
conducted on the plaintiff, to the Monetary
Board. In case such a Report on Examination
[sic] or any other similar report prepared in
connection with the examination conducted on
the plaintiff has been submitted to the
Monetary Board, the latter and its members
(i.e. defendants Tetangco, Neri, Valdepenas,
Boncan, Amatong, Antonio, and Villafuerte)
are enjoined and restrained from acting on the
basis of said report.
5) Re: Civil Case No. 08-119247. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Philippine Countryside Rural
Bank Inc. is directed to post a bond executed
to the defendants, in the amount of
P500,000.00 to the effect that the plaintiff will
pay to the defendants all damages which they
may sustain by reason of the injunction if the
Court should finally decide that the plaintiff
was not entitled thereto. After posting of the
bond and approval thereof, let a writ of
preliminary injunction be issued to enjoin and
restrain the defendants from submitting the
Report of Examination or any other similar
report prepared in connection with the
examination conducted on the plaintiff, to the
Monetary Board. In case such a Report on
Examination [sic] or any other similar report
prepared in connection with the examination
conducted on the plaintiff has been submitted
to the Monetary Board, the latter and its
members (i.e. defendants Tetangco, Neri,
Valdepenas, Boncan, Amatong, Antonio, and
Villafuerte) are enjoined and restrained from
acting on the basis of said report.
6) Re: Civil Case No. 08-119248. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Dynamic Bank Inc. (Rural Bank
of Calatagan) is directed to post a bond
executed to the defendants, in the amount of
P500,000.00 to the effect that the plaintiff will
pay to the defendants all damages which they
may sustain by reason of the injunction if the
Court should finally decide that the plaintiff
was not entitled thereto. After posting of the
bond and approval thereof, let a writ of
preliminary injunction be issued to enjoin and
restrain the defendants from submitting the
Report of Examination or any other similar
report prepared in connection with the
examination conducted on the plaintiff, to the
Monetary Board. In case such a Report on
Examination [sic] or any other similar report
prepared in connection with the examination
conducted on the plaintiff has been submitted
to the Monetary Board, the latter and its
members (i.e. defendants Tetangco, Neri,
Valdepenas, Boncan, Amatong, Antonio, and
Villafuerte) are enjoined and restrained from
acting on the basis of said report.
7) Re: Civil Case No. 08-119249. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Rural Bank of DARBCI, Inc. is
directed to post a bond executed to the
defendants, in the amount of P500,000.00 to
the effect that the plaintiff will pay to the
defendants all damages which they may
sustain by reason of the injunction if the Court
should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and
approval thereof, let a writ of preliminary
injunction be issued to enjoin and restrain the
defendants from submitting the Report of
Examination or any other similar report
prepared in connection with the examination
conducted on the plaintiff, to the Monetary
Board. In case such a Report on Examination
[sic] or any other similar report prepared in
connection with the examination conducted on
the plaintiff has been submitted to the
Monetary Board, the latter and its members
(i.e. defendants Tetangco, Neri, Valdepenas,
Boncan, Amatong, Antonio, and Villafuerte)
are enjoined and restrained from acting on the
basis of said report.
8) Re: Civil Case No. 08-119250. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Rural Bank of Kananga Inc.
(First Intestate Bank), is directed to post a
bond executed to the defendants, in the
amount of P500,000.00 to the effect that the
plaintiff will pay to the defendants all damages
which they may sustain by reason of the
injunction if the Court should finally decide that
the plaintiff was not entitled thereto. After
posting of the bond and approval thereof, let a
writ of preliminary injunction be issued to
enjoin and restrain the defendants from
submitting the Report of Examination or any
other similar report prepared in connection
with the examination conducted on the
plaintiff, to the Monetary Board. In case such a
Report on Examination [sic] or any other
similar report prepared in connection with the
examination conducted on the plaintiff has
been submitted to the Monetary Board, the
latter and its members (i.e. defendants
Tetangco, Neri, Valdepenas, Boncan,
Amatong, Antonio, and Villafuerte) are
enjoined and restrained from acting on the
basis of said report.
9) Re: Civil Case No. 08-119251. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff Banco Rural De Bisayas
Minglanilla (Cebu) Inc. (Bank of East Asia) is
directed to post a bond executed to the
defendants, in the amount of P500,000.00 to
the effect that the plaintiff will pay to the
defendants all damages which they may
sustain by reason of the injunction if the Court
should finally decide that the plaintiff was not
entitled thereto. After posting of the bond and
approval thereof, let a writ of preliminary
injunction be issued to enjoin and restrain the
defendants from submitting the Report of
Examination or any other similar report
prepared in connection with the examination
conducted on the plaintiff, to the Monetary
Board. In case such a Report on Examination
[sic] or any other similar report prepared in
connection with the examination conducted on
the plaintiff has been submitted to the
Monetary Board, the latter and its members
(i.e. defendants Tetangco, Neri, Valdepenas,
Boncan, Amatong, Antonio, and Villafuerte)
are enjoined and restrained from acting on the
basis of said report.
10) Re: Civil Case No. 08-119273. Pursuant to
Rule 58, Section 4(b) of the Revised Rules of
Court, plaintiff San Pablo City Development
Bank, Inc. is directed to post a bond executed
to the defendants, in the amount of
P500,000.00 to the effect that the plaintiff will
pay to the defendants all damages which they
may sustain by reason of the injunction if the
 Court should finally decide that the plaintiff
was not entitled thereto. After posting of the
bond and approval thereof, let a writ of
preliminary injunction be issued to enjoin and
restrain the defendants from submitting the
Report of Examination or any other similar
report prepared in connection with the
examination conducted on the plaintiff, to the
Monetary Board. In case such a Report on
Examination [sic] or any other similar report
prepared in connection with the examination
conducted on the plaintiff has been submitted
to the Monetary Board, the latter and its
members (i.e. defendants Tetangco, Neri,
Valdepenas, Boncan, Amatong, Antonio, and
Villafuerte) are enjoined and restrained from
acting on the basis of said report.3
The Ruling of the CA
Petitioners then brought the matter to the CA via a
petition for certiorari under Rule 65 claiming grave
abuse of discretion on the part of Judge Valenzuela
when she issued the orders dated May 21, 2008 and
June 4, 2008.
The CA ruled that the RTC committed no grave
abuse of discretion when it ordered the issuance of a
writ of preliminary injunction and when it ordered the
consolidation of the 10 cases.
It held that petitioners should have first filed a motion
for reconsideration of the assailed orders, and failed
to justify why they resorted to a special civil action of
certiorari instead.
The CA also found that aside from the technical
aspect, there was no grave abuse of discretion on
the part of the RTC, and if there was a mistake in the
assessment of evidence by the trial court, that
should be characterized as an error of judgment, and
should be correctable via appeal.
The CA held that the principles of fairness and
transparency dictate that the respondent banks are
entitled to copies of the ROE.
Regarding the consolidation of the 10 cases, the CA
found that there was a similarity of facts, reliefs
sought, issues raised, defendants, and that plaintiffs
and defendants were represented by the same sets
of counsels. It found that the joint trial of these cases
would prejudice any substantial right of petitioners.
Finding that no grave abuse of discretion attended
the issuance of the orders by the RTC, the CA
denied the petition.
On November 24, 2008, a TRO was issued by this
Court, restraining the CA, RTC, and respondents
from implementing and enforcing the CA Decision
dated September 30, 2008 in CA-G.R. SP No.
103935.4
By reason of the TRO issued by this Court, the SED
was able to submit their ROEs to the MB. The MB
then prohibited the respondent banks from
transacting business and placed them under
receivership under Section 53 of Republic Act No.
(RA) 87915 and Sec. 30 of RA
76536 through MB Resolution No. 1616 dated
December 9, 2008; Resolution Nos. 1637 and 1638
dated December 11, 2008; Resolution Nos. 1647,
1648, and 1649 dated December 12, 2008;
Resolution Nos. 1652 and 1653 dated December 16,
2008; and Resolution Nos. 1692 and 1695 dated
December 19, 2008, with the Philippine Deposit
Insurance Corporation as the appointed receiver.
Now we resolve the main petition.
Grounds in Support of Petition
I. THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN NOT FINDING THAT THE
INJUNCTION ISSUED BY THE REGIONAL TRIAL
COURT VIOLATED SECTION 25 OF THE NEW
CENTRAL BANK ACT AND EFFECTIVELY
HANDCUFFED THE BANGKO SENTRAL FROM
DISCHARGING ITS FUNCTIONS TO THE GREAT
AND IRREPARABLE DAMAGE OF THE
COUNTRY’S BANKING SYSTEM;
II. THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN FINDING THAT
RESPONDENTS ARE ENTITLED TO BE
FURNISHED COPIES OF THEIR RESPECTIVE
ROEs BEFORE THE SAME IS SUBMITTED TO
THE MONETARY BOARD IN VIEW OF THE
PRINCIPLES OF FAIRNESS AND
TRANSPARENCY DESPITE LACK OF EXPRESS
PROVISION IN THE NEW CENTRAL BANK ACT
REQUIRING BSP TO DO THE SAME
III. THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN DEPARTING FROM WELL-
ESTABLISHED PRECEPTS OF LAW AND
JURISPRUDENCE
A. THE EXCEPTIONS CITED BY
PETITIONER JUSTIFIED RESORT TO
PETITION FOR CERTIORARI UNDER RULE
65 INSTEAD OF FIRST FILING A MOTION
FOR RECONSIDERATION
B. RESPONDENT BANKS’ ACT OF
RESORTING IMMEDIATELY TO THE
COURT WAS PREMATURE SINCE IT WAS
MADE IN UTTER DISREGARD OF THE
PRINCIPLE OF PRIMARY JURISDICTION
 AND EXHAUSTION OF ADMINISTRATIVE
REMEDY
C. THE ISSUANCE OF A WRIT OF
PRELIMINARY INJUNCTION BY THE
REGIONAL TRIAL COURT WAS NOT ONLY
IMPROPER BUT AMOUNTED TO GRAVE
ABUSE OF DISCRETION7
Our Ruling
The petition is meritorious.
In Lim v. Court of Appeals it was stated:
The requisites for preliminary injunctive relief are: (a)
the invasion of right sought to be protected is
material and substantial; (b) the right of the
complainant is clear and unmistakable; and (c) there
is an urgent and paramount necessity for the writ to
prevent serious damage.
As such, a writ of preliminary injunction may be
issued only upon clear showing of an actual existing
right to be protected during the pendency of the
principal action. The twin requirements of a valid
injunction are the existence of a right and its actual
or threatened violations. Thus, to be entitled to an
injunctive writ, the right to be protected and the
violation against that right must be shown.8
These requirements are absent in the present case.
In granting the writs of preliminary injunction, the trial
court held that the submission of the ROEs to the
MB before the respondent banks would violate the
right to due process of said banks.
This is erroneous.
The respondent banks have failed to show that they
are entitled to copies of the ROEs. They can point to
no provision of law, no section in the procedures of
the BSP that shows that the BSP is required to give
them copies of the ROEs. Sec. 28 of RA 7653, or the
New Central Bank Act, which governs examinations
of banking institutions, provides that the ROE shall
be submitted to the MB; the bank examined is not
mentioned as a recipient of the ROE.
The respondent banks cannot claim a violation of
their right to due process if they are not provided with
copies of the ROEs. The same ROEs are based on
the lists of findings/exceptions containing the
deficiencies found by the SED examiners when they
examined the books of the respondent banks. As
found by the RTC, these lists of findings/exceptions
were furnished to the officers or representatives of
the respondent banks, and the respondent banks
were required to comment and to undertake remedial
measures stated in said lists. Despite these
instructions, respondent banks failed to comply with
the SED’s directive.
Respondent banks are already aware of what is
required of them by the BSP, and cannot claim
violation of their right to due process simply because
they are not furnished with copies of the ROEs.
Respondent banks were held by the CA to be
entitled to copies of the ROEs prior to or
simultaneously with their submission to the MB, on
the principles of fairness and transparency. Further,
the CA held that if the contents of the ROEs are
essentially the same as those of the lists of
findings/exceptions provided to said banks, there is
no reason not to give copies of the ROEs to the
banks. This is a flawed conclusion, since if the banks
are already aware of the contents of the ROEs, they
cannot say that fairness and transparency are not
present. If sanctions are to be imposed upon the
respondent banks, they are already well aware of the
reasons for the sanctions, having been informed via
the lists of findings/exceptions, demolishing that
particular argument. The ROEs would then be
superfluities to the respondent banks, and should not
be the basis for a writ of preliminary injunction. Also,
the reliance of the RTC on Banco Filipino v.
Monetary Board9 is misplaced. The petitioner in that
case was held to be entitled to annexes of the
Supervision and Examination Sector’s reports, as it
already had a copy of the reports themselves. It was
not the subject of the case whether or not the
petitioner was entitled to a copy of the reports. And
the ruling was made after the petitioner bank was
ordered closed, and it was allowed to be supplied
with annexes of the reports in order to better prepare
its defense. In this instance, at the time the
respondent banks requested copies of the ROEs, no
action had yet been taken by the MB with regard to
imposing sanctions upon said banks.
The issuance by the RTC of writs of preliminary
injunction is an unwarranted interference with the
powers of the MB. Secs. 29 and 30 of RA
765310 refer to the appointment of a conservator or a
receiver for a bank, which is a power of the MB for
which they need the ROEs done by the supervising
or examining department. The writs of preliminary
injunction issued by the trial court hinder the MB
from fulfilling its function under the law. The actions
of the MB under Secs. 29 and 30 of RA 7653 "may
not be restrained or set aside by the court except on
petition for certiorari on the ground that the action
taken was in excess of jurisdiction or with such grave
abuse of discretion as to amount to lack or excess of
jurisdiction." The writs of preliminary injunction order
are precisely what cannot be done under the law by
preventing the MB from taking action under either
Sec. 29 or Sec. 30 of RA 7653.
As to the third requirement, the respondent banks
have shown no necessity for the writ of preliminary
injunction to prevent serious damage. The serious
damage contemplated by the trial court was the
possibility of the imposition of sanctions upon
respondent banks, even the sanction of closure.
Under the law, the sanction of closure could be
imposed upon a bank by the BSP even without
notice and hearing. The apparent lack of procedural
due process would not result in the invalidity of
action by the MB. This was the ruling in Central Bank
of the Philippines v. Court of Appeals.11 This "close
now, hear later" scheme is grounded on practical
and legal considerations to prevent unwarranted
dissipation of the bank’s assets and as a valid
exercise of police power to protect the depositors,
creditors, stockholders, and the general public. The
writ of preliminary injunction cannot, thus, prevent
the MB from taking action, by preventing the
submission of the ROEs and worse, by preventing
the MB from acting on such ROEs.
The trial court required the MB to respect the
respondent banks’ right to due process by allowing
the respondent banks to view the ROEs and act
upon them to forestall any sanctions the MB might
impose. Such procedure has no basis in law and
does in fact violate the "close now, hear later"
doctrine. We held in Rural Bank of San Miguel, Inc.
v. Monetary Board, Bangko Sentral ng Pilipinas:
It is well-settled that the closure of a bank may be
considered as an exercise of police power. The
action of the MB on this matter is final and executory.
Such exercise may nonetheless be subject to judicial
inquiry and can be set aside if found to be in excess
of jurisdiction or with such grave abuse of discretion
as to amount to lack or excess of jurisdiction.12
The respondent banks cannot—through seeking a
writ of preliminary injunction by appealing to lack of
due process, in a roundabout manner— prevent their
closure by the MB. Their remedy, as stated, is a
subsequent one, which will determine whether the
closure of the bank was attended by grave abuse of
discretion. Judicial review enters the picture only
after the MB has taken action; it cannot prevent such
action by the MB. The threat of the imposition of
sanctions, even that of closure, does not violate their
right to due process, and cannot be the basis for a
writ of preliminary injunction.
The "close now, hear later" doctrine has already
been justified as a measure for the protection of the
public interest. Swift action is called for on the part of
the BSP when it finds that a bank is in dire straits.
Unless adequate and determined efforts are taken
by the government against distressed and
mismanaged banks, public faith in the banking
system is certain to deteriorate to the prejudice of the
national economy itself, not to mention the losses
suffered by the bank depositors, creditors, and
stockholders, who all deserve the protection of the
government.13
The respondent banks have failed to show their discretion of the lower court, this Court may and
entitlement to the writ of preliminary injunction. It should intervene in a clear case of abuse.18
must be emphasized that an application for injunctive
relief is construed strictly against the pleader.14 The WHEREFORE, the petition is hereby GRANTED.
respondent banks cannot rely on a simple appeal to The assailed CA Decision dated September 30,
procedural due process to prove entitlement. The 2008 in CA-G.R. SP No. 103935 is hereby
requirements for the issuance of the writ have not REVERSED. The assailed order and writ of
been proved. No invasion of the rights of respondent preliminary injunction of respondent Judge
banks has been shown, nor is their right to copies of Valenzuela in Civil Case Nos. 08-119243, 08-
the ROEs clear and unmistakable. There is also no 119244, 08-119245, 08-119246, 08-119247, 08-
necessity for the writ to prevent serious damage. 119248, 08-119249, 08-119250, 08-119251, and 08-
Indeed the issuance of the writ of preliminary 119273 are hereby declared NULL and VOID.
injunction tramples upon the powers of the MB and
prevents it from fulfilling its functions. There is no SO ORDERED.
right that the writ of preliminary injunction would
protect in this particular case. In the absence of a
clear legal right, the issuance of the injunctive writ
constitutes grave abuse of discretion.15 In the
absence of proof of a legal right and the injury
sustained by the plaintiff, an order for the issuance of
a writ of preliminary injunction will be nullified.16

Courts are hereby reminded to take greater care in

issuing injunctive relief to litigants, that it would not
violate any law. The grant of a preliminary injunction
in a case rests on the sound discretion of the court
with the caveat that it should be made with great
caution.17 Thus, the issuance of the writ of
preliminary injunction must have basis in and be in
accordance with law. All told, while the grant or
denial of an injunction generally rests on the sound
 Republic of the Philippines President CARLITO CAISIP, and DAMAYAN NG
SUPREME COURT MANGGAGAWANG BUKID SA ASYENDA
Manila ROXAS-NATIONAL FEDERATION OF SUGAR
WORKERS (DAMBA-NFSW), represnted by
EN BANC LAURO MARTIN, Petitioners,
vs.
G.R. No. 149548 December 4, 2009 SECRETARY OF THE DEPT. OF AGRARIAN
REFORM, ROXAS & Co., INC., Respondents.
ROXAS & COMPANY, INC., Petitioner,
vs. x - - - - - - - - - - - - - - - - - - - - - - -x
DAMBA-NFSW and the DEPARTMENT OF
AGRARIAN REFORM,* Respondents. G.R. No. 167543 December 4, 2009

x - - - - - - - - - - - - - - - - - - - - - - -x DEPARTMENT OF LAND REFORM, FORMERLY

DEPARTMENT OF AGRARIAN REFORM
G.R. No. 167505 December 4, 2009 (DAR), Petitioner,
vs.
DAMAYAN NG MGA MANGGAGAWANG BUKID ROXAS & CO, INC., Respondent.
SA ASYENDA ROXAS-NATIONAL FEDERATION
OF SUGAR WORKERS (DAMBA-NFSW) Petitioner, x - - - - - - - - - - - - - - - - - - - - - - -x
vs.
SECRETARY OF THE DEPT. OF AGRARIAN G.R. No. 167845 December 4, 2009
REFORM, ROXAS & Co., INC. AND/OR ATTY.
MARIANO AMPIL, Respondents. ROXAS & CO., INC., Petitioner,
vs.
x - - - - - - - - - - - - - - - - - - - - - - -x DAMBA-NFSW, Respondent.

G.R. No. 167540 December 4, 2009 x - - - - - - - - - - - - - - - - - - - - - - -x

KATIPUNAN NG MGA MAGBUBUKID SA G.R. No. 169163 December 4, 2009

HACIENDA ROXAS, INC. (KAMAHARI), rep. by its
DAMBA-NFSW REPRESENTED BY LAURO V.
MARTIN, Petitioner,
vs.
ROXAS & CO., INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 179650 December 4, 2009
DAMBA-NFSW, Petitioner,
vs.
ROXAS & CO., INC., Respondent.
DECISION
CARPIO MORALES, J.
The main subject of the seven consolidated petitions
is the application of petitioner Roxas & Co., Inc.
(Roxas & Co.) for conversion from agricultural to
non-agricultural use of its three haciendas located in
Nasugbu, Batangas containing a total area of almost
3,000 hectares. The facts are not new, the Court
having earlier resolved intimately-related issues
dealing with these haciendas. Thus, in the 1999 case
of Roxas & Co., Inc. v. Court of Appeals,1 the Court
presented the facts as follows:
. . . Roxas & Co. is a domestic corporation and is the
registered owner of three haciendas,
namely, Haciendas Palico, Banilad and
Caylaway, all located in the Municipality of Nasugbu,
Batangas. Hacienda Palico is 1,024 hectares in
area and is registered under Transfer Certificate of
Title (TCT) No. 985. This land is covered by Tax
Declaration Nos. 0465, 0466, 0468, 0470, 0234 and
0354. Hacienda Banilad is 1,050 hectares in area,
registered under TCT No. 924 and covered by Tax
Declaration Nos. 0236, 0237 and 0390. Hacienda
Caylaway is 867.4571 hectares in area and is
registered under TCT Nos. T-44662, T-44663, T-
44664 and T-44665.
xxxx
On July 27, 1987, the Congress of the Philippines
formally convened and took over legislative power
from the President. This Congress passed Republic
Act No. 6657, the Comprehensive Agrarian Reform
Law (CARL) of 1988. The Act was signed by the
President on June 10, 1988 and took effect on June
15, 1988.
Before the law’s effectivity, on May 6, 1988, [Roxas
& Co.] filed with respondent DAR a voluntary offer to
sell [VOS] Hacienda Caylaway pursuant to the
provisions of E.O. No. 229. Haciendas Palico and
Banilad were later placed under compulsory
acquisition by … DAR in accordance with the CARL.
xxxx
Nevertheless, on August 6, 1992, [Roxas & Co.],
through its President, Eduardo J. Roxas, sent a letter
to the Secretary of …DAR withdrawing its VOS of
Hacienda Caylaway. The Sangguniang Bayan of
Nasugbu, Batangas allegedly authorized the
reclassification of Hacienda Caylaway from
agricultural to non-agricultural. As a result,
petitioner informed respondent DAR that it
was applying for conversion of Hacienda
Caylaway from agricultural to other uses.
x x x x2 (emphasis and underscoring supplied)
The petitions in G.R. Nos. 167540 and 167543 nub
on the interpretation of Presidential Proclamation
(PP) 1520 which was issued on November 28, 1975
by then President Ferdinand Marcos. The PP reads:
DECLARING THE MUNICIPALITIES OF
MARAGONDON AND TERNATE IN CAVITE
PROVINCE AND THE MUNICIPALITY OF
NASUGBU IN BATANGAS AS A TOURIST ZONE,
AND FOR OTHER PURPOSES
WHEREAS, certain areas in the sector
comprising the Municipalities of Maragondon
and Ternate in Cavite Province and Nasugbu in
Batangas have potential tourism value after being
developed into resort complexes for the foreign and
domestic market; and
WHEREAS, it is necessary to conduct the necessary
studies and to segregate specific geographic
areas for concentrated efforts of both the
government and private sectors in developing their
tourism potential;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby declare
the area comprising the Municipalities of
Maragondon and Ternate in Cavite Province and
Nasugbu in Batangas Province as a tourist zone
under the administration and control of the
Philippine Tourism Authority (PTA) pursuant to
Section 5 (D) of P.D. 564.
The PTA shall identify well-defined geographic
areas within the zone with potential tourism
value, wherein optimum use of natural assets and
attractions, as well as existing facilities and
concentration of efforts and limited resources of both
government and private sector may be affected and
realized in order to generate foreign exchange as
well as other tourist receipts.
Any duly established military reservation existing
within the zone shall be excluded from this
proclamation.
All proclamation, decrees or executive orders
inconsistent herewith are hereby revoked or modified
accordingly. (emphasis and underscoring supplied).
The incidents which spawned the filing of the
petitions in G.R. Nos. 149548, 167505, 167845,
169163 and 179650 are stated in the dissenting
opinion of Justice Minita Chico-Nazario, the original
draft of which was made the basis of the Court’s
deliberations.
Essentially, Roxas & Co. filed its application for
conversion of its three haciendas from argricultural to
non-agricultural on the assumption that the issuance
of PP 1520 which declared Nasugbu, Batangas as a
tourism zone, reclassified them to non-agricultural
uses. Its pending application notwithstanding, the
Department of Agrarian Reform (DAR) issued
Certificates of Land Ownership Award (CLOAs) to
the farmer-beneficiaries in the
three haciendas including CLOA No. 6654 which
was issued on October 15, 1993 covering 513.983
hectares, the subject of G.R. No. 167505.
The application for conversion of Roxas & Co. was
the subject of the above-stated Roxas & Co., Inc. v.
Court of Appeals which the Court remanded to the
DAR for the observance of proper acquisition
proceedings. As reflected in the above-quoted
statement of facts in said case, during the pendency
before the DAR of its application for
conversion following its remand to the DAR or on
May 16, 2000, Roxas & Co. filed with the DAR
an application for exemption from the coverage of
the Comprehensive Agrarian Reform Program
(CARP) of 1988 on the basis of PP 1520 and of DAR
Administrative Order (AO) No. 6, Series of
19943 which states that all lands already classified as
commercial, industrial, or residential before the
effectivity of CARP no longer need conversion
clearance from the DAR.
It bears mentioning at this juncture that on April 18,
1982, the Sangguniang Bayan of Nasugbu enacted
Municipal Zoning Ordinance No. 4 (Nasugbu MZO
No. 4) which was approved on May 4, 1983 by the
Human Settlements Regulation Commission, now
the Housing and Land Use Regulatory Board
(HLURB).
The records show that Sangguniang Bayan and
Association of Barangay Captains of Nasugbu filed
before this Court petitions for intervention which
were, however, denied by Resolution of June 5,
2006 for lack of standing.4
After the seven present petitions were consolidated
and referred to the Court en banc,5 oral arguments
were conducted on July 7, 2009.
The core issues are:
 1. Whether PP 1520 reclassified in 1975 all
lands in the Maragondon-Ternate-Nasugbu
tourism zone to non-agricultural use to exempt
Roxas & Co.’s three haciendas in Nasugbu
from CARP coverage;
2. Whether Nasugbu MSO No. 4, Series of
1982 exempted certain lots in Hacienda Palico
from CARP coverage; and
3. Whether the partial and complete
cancellations by the DAR of CLOA No. 6654
subject of G.R. No. 167505 is valid.
The Court shall discuss the issues in seriatim.
I. PP 1520 DID NOT AUTOMATICALLY CONVERT
THE AGRICULTURAL LANDS IN THE THREE
MUNICIPALITIES INCLUDING NASUGBU TO
NON-AGRICULTURAL LANDS.
Roxas & Co. contends that PP 1520 declared the
three municipalities as each constituting a tourism
zone, reclassified all lands therein to tourism and,
therefore, converted their use to non-agricultural
purposes.
To determine the chief intent of PP 1520, reference
to the "whereas clauses" is in order. By and large, a
reference to the congressional deliberation records
would provide guidance in dissecting the intent of
legislation. But since PP 1520 emanated from the
legislative powers of then President Marcos during
martial rule, reference to the whereas clauses cannot
be dispensed with.6
The perambulatory clauses of PP 1520 identified
only "certain areas in the sector comprising the
[three Municipalities that] have potential tourism
value" and mandated the conduct of "necessary
studies" and the segregation of "specific geographic
areas" to achieve its purpose. Which is why the PP
directed the Philippine Tourism Authority (PTA) to
identify what those potential tourism areas are. If all
the lands in those tourism zones were to be wholly
converted to non-agricultural use, there would have
been no need for the PP to direct the PTA to identify
what those "specific geographic areas" are.
The Court had in fact passed upon a similar matter
before. Thus in DAR v. Franco,7 it pronounced:
Thus, the DAR Regional Office VII, in coordination
with the Philippine Tourism Authority, has to
determine precisely which areas are for tourism
development and excluded from the Operation Land
Transfer and the Comprehensive Agrarian Reform
Program. And suffice it to state here that the Court
has repeatedly ruled that lands already classified as
non-agricultural before the enactment of RA 6657 on
15 June 1988 do not need any conversion
clearance.8 (emphasis and underscoring supplied).
While the above pronouncement in Franco is
an obiter, it should not be ignored in the resolution of
the present petitions since it reflects a more rational
and just interpretation of PP 1520. There is no
prohibition in embracing the rationale of an obiter
dictum in settling controversies, or in considering
related proclamations establishing tourism zones.
In the above-cited case of Roxas & Co. v. CA,9 the
Court made it clear that the "power to determine
whether Haciendas Palico, Banilad and Caylaway
are non-agricultural, hence, exempt from the
coverage of the [Comprehensive Agrarian Reform
Law] lies with the [Department of Agrarian Reform],
not with this Court."10 The DAR, an administrative
body of special competence, denied, by Order of
October 22, 2001, the application for CARP
exemption of Roxas & Co., it finding that PP 1520
did not automatically reclassify all the lands in the
affected municipalities from their original uses. It
appears that the PTA had not yet, at that time,
identified the "specific geographic areas" for tourism
development and had no pending tourism
development projects in the areas. Further, report
from the Center for Land Use Policy Planning and
Implementation (CLUPPI) indicated that the areas
were planted with sugar cane and other crops.11
Relatedly, the DAR, by Memorandum Circular No. 7,
Series of 2004,12 came up with clarificatory
guidelines and therein decreed that
A. x x x x.
B. Proclamations declaring general areas such as
whole provinces, municipalities, barangays, islands
or peninsulas as tourist zones that merely:
(1) recognize certain still unidentified
areas within the covered provinces,
municipalities, barangays, islands, or
peninsulas to be with potential tourism value
and charge the Philippine Tourism Authority
with the task to identify/delineate specific
geographic areas within the zone with
potential tourism value and to coordinate said
areas’ development; or
(2) recognize the potential value of identified
spots located within the general area declared
as tourist zone (i.e. x x x x) and direct the
Philippine Tourism Authority to coordinate said
areas’ development;
could not be regarded as effecting an automatic
reclassification of the entirety of the land area
declared as tourist zone. This is so because
"reclassification of lands" denotes their allocation into
some specific use and "providing for the manner of
their utilization and disposition (Sec. 20, Local
Government Code) or the "act of specifying how
agricultural lands shall be utilized for non-agricultural
uses such as residential, industrial, or commercial,
as embodied in the land use plan." (Joint HLURB,
DAR, DA, DILG Memo. Circular Prescribing
Guidelines for MC 54, S. 1995, Sec.2)
A proclamation that merely recognizes the potential
tourism value of certain areas within the general area
declared as tourist zone clearly does not allocate,
reserve, or intend the entirety of the land area of the
zone for non-agricultural purposes. Neither does said
proclamation direct that otherwise CARPable lands
within the zone shall already be used for purposes
other than agricultural.
Moreover, to view these kinds of proclamation as a
reclassification for non-agricultural purposes of entire
provinces, municipalities, barangays, islands, or
peninsulas would be unreasonable as it amounts to
an automatic and sweeping exemption from CARP in
the name of tourism development. The same would
also undermine the land use reclassification powers
vested in local government units in conjunction with
pertinent agencies of government.
C. There being no reclassification, it is clear that said
proclamations/issuances, assuming [these] took
effect before June 15, 1988, could not supply a basis
for exemption of the entirety of the lands embraced
therein from CARP coverage x x x x.
D. x x x x. (underscoring in the original; emphasis
and italics supplied)
The DAR’s reading into these general proclamations
of tourism zones deserves utmost consideration,
more especially in the present petitions which involve
vast tracts of agricultural land. To reiterate, PP 1520
merely recognized the "potential tourism value" of
certain areas within the general area declared as
tourism zones. It did not reclassify the areas to non-
agricultural use.
Apart from PP 1520, there are similarly worded
proclamations declaring the whole of Ilocos Norte
and Bataan Provinces, Camiguin, Puerto Prinsesa,
Siquijor, Panglao Island, parts of Cebu City and
Municipalities of Argao and Dalaguete in Cebu
Province as tourism zones.13
Indubitably, these proclamations, particularly those
pertaining to the Provinces of Ilocos Norte and
Bataan, did not intend to reclassify all agricultural
lands into non-agricultural lands in one fell swoop.
The Court takes notice of how the agrarian reform
program was—and still is—implemented in these
provinces since there are lands that do not have any
tourism potential and are more appropriate for
agricultural utilization.
Relatedly, a reference to the Special Economic Zone
Act of 199514 provides a parallel orientation on the
issue. Under said Act, several towns and cities
encompassing the whole Philippines were readily
identified as economic zones.15 To uphold Roxas &
Co.’s reading of PP 1520 would see a total
reclassification of practically all the agricultural lands
in the country to non-agricultural use. Propitiously,
the legislature had the foresight to include a bailout
provision in Section 31 of said Act for land
conversion.16 The same cannot be said of PP 1520,
despite the existence of Presidential Decree (PD)
No. 27 or the Tenant Emancipation Decree,17 which
is the precursor of the CARP.
Interestingly, then President Marcos also issued on
September 26, 1972 PD No. 2 which declared the
entire Philippines as land reform area.18 Such
declaration did not intend to reclassify all lands in the
entire country to agricultural lands. President
Marcos, about a month later or on October 21, 1972,
issued PD 27 which decreed that all private
agricultural lands primarily devoted to rice and corn
were deemed awarded to their tenant-farmers.
Given these martial law-era decrees and considering
the socio-political backdrop at the time PP 1520 was
issued in 1975, it is inconceivable that PP 1520, as
well as other similarly worded proclamations which
are completely silent on the aspect of reclassification
of the lands in those tourism zones, would nullify the
gains already then achieved by PD 27.
Even so, Roxas & Co. turns to Natalia Realty v. DAR
and NHA v. Allarde to support its position. These
cases are not even closely similar to the petitions in
G.R. Nos. 167540 and 167543. The only time that
these cases may find application to said petitions is
when the PTA actually identifies "well-defined
geographic areas within the zone with potential
tourism value."
In remotely tying these two immediately-cited cases
that involve specific and defined townsite
reservations for the housing program of the National
Housing Authority to the present petitions, Roxas &
Co. cites Letter of Instructions No. 352 issued on
December 22, 1975 which states that the survey and
technical description of the tourism zones shall be
considered an integral part of PP 1520. There were,
however, at the time no surveys and technical
delineations yet of the intended tourism areas.
On hindsight, Natalia and Allarde find application in
the petitions in G.R. Nos. 179650 & 167505, which
petitions are anchored on the extenuating effects of
Nasugbu MZO No. 4, but not in the petitions in G.R.
Nos. 167540 & 167543 bearing on PP 1520, as will
later be discussed.
Of significance also in the present petitions is the
issuance on August 3, 2007 of Executive Order No.
64719 by President Arroyo which proclaimed the
areas in the Nasugbu Tourism Development Plan as
Special Tourism Zone. Pursuant to said Executive
Order, the PTA completed its validation of 21 out of
42 barangays as tourism priority areas, hence, it is
only after such completion that these identified lands
may be subjected to reclassification proceedings.
It bears emphasis that a mere reclassification of an
agricultural land does not automatically allow a
landowner to change its use since there is still that
process of conversion before one is permitted to use
it for other purposes.20
The recent passage of the Tourism Act of
200921 also impacts on the present petitions since
Section 32 thereof states that:
Sec. 32. x x x x. - Any other area specifically defined
as a tourism area, zone or spot under any special
or general law, decree or presidential issuance
shall, as far as practicable, be organized into a
TEZ under the provisions of this Act. x x x x. (italics
and emphasis supplied)
Furthermore, it is only under this same Act that it is
explicitly declared that lands identified as part of a
tourism zone shall qualify for exemption from CARP
coverage.22
The dissenting opinion ignores the supervening
issuances mentioned above during the pendency of
the present petitions because they came after the
effectivity of the CARP on June 15, 1988. It labors on
the supposition that PP 1520 had already
reclassified the lands encompassing the tourism
zones; and that those subsequent issuances, even if
applied in the present cases, cannot be applied
retroactively.
Relevantly, while it may be argued that a remand to
the DAR would be proper in light of the recent
formulation of a tourism development plan, which
was validated by the PTA, that would put the cases
within the ambit of PP 1520, the Court sees
otherwise. Roxas & Co. can only look to the
provisions of the Tourism Act, and not to PP 1520,
for possible exemption.
II. ROXAS & CO.’S APPLICATION IN DAR
Administrative Case No. A-9999-142-97 FOR
CARP EXEMPTION IN HACIENDA
PALICO SUBJECT OF G.R. NO.
179650 CANNOT BE GRANTED IN VIEW OF
DISCREPANCIES IN THE LOCATION AND
IDENTITY OF THE SUBJECT PARCELS OF LAND.
Since PP 1520 did not automatically convert
Haciendas Caylaway, Banilad and Palico into non-
agricultural estates, can Roxas & Co. invoke in the
alternative Nasugbu MZO No. 4, which reclassified in
1982 the haciendas to non-agricultural use to
exclude six parcels of land in Hacienda Palico from
CARP coverage?
By Roxas & Co.’s contention, the affected six parcels
of land which are the subject of DAR Administrative
Case No. A-9999-142-97 and nine parcels of land
which are the subject of DAR Administrative Case
No. A-9999-008-98 involved in G.R. No. 167505, all
in Hacienda Palico, have been reclassified to non-
agricultural uses via Nasugbu MZO No. 4 which was
approved by the forerunner of HLURB.
Roxas & Co.’s contention fails.
To be sure, the Court had on several occasions
decreed that a local government unit has the power
to classify and convert land from agricultural to non-
agricultural prior to the effectivity of the
CARL.23 In Agrarian Reform Beneficiaries
Association v. Nicolas,24 it reiterated that
. . . the facts obtaining in this case are similar to
those in Natalia Realty. Both subject lands form part
of an area designated for non-agricultural purposes.
Both were classified as non-agricultural lands prior to
June 15, 1988, the date of effectivity of CARL.
xxxx
In the case under review, the subject parcels of
lands were reclassified within an urban zone as per
approved Official Comprehensive Zoning Map of the
City of Davao. The reclassification was embodied
in City Ordinance No. 363, Series of 1982. As
such, the subject parcels of land are considered
"non-agricultural" and may be utilized for
residential, commercial, and industrial purposes.
The reclassification was later approved by the
HLURB.25 (emphasis, italics and underscoring
supplied)
The DAR Secretary26 denied the application for
exemption of Roxas & Co., however, in this wise:
Initially, CLUPPI-2 based [its] evaluation on the lot
nos. as appearing in CLOA No. 6654. However, for
purposes of clarity and to ensure that the area
applied for exemption is indeed part of TCT No. T-
60034, CLUPPI-2 sought to clarify with [Roxas &
Co.] the origin of TCT No. T-60034. In a letter dated
May 28, 1998, [Roxas & Co.] explains that portions
of TCT No. T-985, the mother title, …was subdivided
into 125 lots pursuant to PD 27. A total of 947.8417
was retained by the landowners and was
subsequently registered under TCT No. 49946.
[[Roxas & Co.] further explains that TCT No. 49946
was further subdivided into several lots (Lot 125-A to
Lot 125-P) with Lot No. 125-N registered under TCT
No. 60034. [A] review of the titles, however,
shows that the origin of T-49946 is T-783 and not
T-985. On the other hand, the origin of T-60034 is
listed as 59946, and not T-49946. The
discrepancies were attributed by [Roxas & Co.]
to typographical errors which were
"acknowledged and initialled" [sic] by the ROD.
Per verification…, the discrepancies . . . cannot
be ascertained.27 (emphasis and underscoring
supplied)
In denying Roxas & Co.’s motion for reconsideration,
the DAR Secretary held:
The landholdings covered by the aforesaid
titles do not correspond to the Certification dated
February 11, 1998 of the [HLURB] , the
Certification dated September 12, 1996 issued by
the Municipal Planning and Development
Coordinator, and the Certifications dated July 31,
1997 and May 27, 1997 issued by the National
Irrigation Authority. The certifications were issued
for Lot Nos. 21, 24, 28, 31, 32 and 34. Thus, it was
not even possible to issue exemption clearance over
the lots covered by TCT Nos. 60019 to 60023.
Furthermore, we also note the discrepancies
between the certifications issued by the HLURB and
the Municipal Planning Development Coordinator as
to the area of the specific lots.28 (emphasis and
underscoring supplied)
In affirming the DAR Secretary’s denial of Roxas &
Co.’s application for exemption, the Court of
Appeals, in CA-G.R. SP No. 63146 subject of G.R.
No. 179650, observed:
In the instant case, a perusal of the documents
before us shows that there is no indication that the
said TCTs refer to the same properties applied for
exemption by [Roxas & Co.] It is true that the
certifications …refer, among others, to DAR Lot Nos.
21, 24, 28, 31, 32 and 34…But these certifications
contain nothing to show that these lots are the same
as Lots 125-A, 125-B, 125-C, 125-D and 125-E
covered by TCT Nos. 60019, 60020, 60021, 60022
and 60023, respetively. While [Roxas & Co.] claims
that DAR Lot Nos. 21, 24 and 31 correspond to the
aforementioned TCTs submitted to the DAR no
evidence was presented to substantiate such
allegation.
Moreover, [Roxas & Co.] failed to submit TCT 634
which it claims covers DAR Lot Nos. 28, 32 and
24.(TSN, April 24, 2001, pp. 43-44)
xxxx
[Roxas & Co.] also claims that subject properties are
located at Barangay Cogunan and Lumbangan and
that these properties are part of the zone classified
as Industrial under Municipal Ordinance No. 4,
Series of 1982 of the Municipality of Nasugbu,
Batangas. ….a scrutiny of the said Ordinance
shows that only Barangays Talangan and
Lumbangan of the said municipality were
classified as Industrial Zones…Barangay
Cogunan was not included. x x x x. In fact, the
TCTs submitted by [Roxas & Co.] show that the
properties covered by said titles are all located at
Barrio Lumbangan.29 (emphasis and underscoring
supplied)
Its foregoing findings notwithstanding, the appellate
court still allowed Roxas & Co. to adduce additional
evidence to support its application for exemption
under Nasugbu MZO No. 4.
Meanwhile, Roxas & Co. appealed the appellate
court’s decision in CA-G.R. No. SP No. 63146
affirming the DAR Secretary’s denial of its
application for CARP exemption in Hacienda Palico
(now the subject of G.R. No. 149548).
When Roxas & Co. sought the re-opening of the
proceedings in DAR Administrative Case No. A-
9999-142-97 (subject of G.R. No. 179650), and
offered additional evidence in support of its
application for CARP exemption, the DAR Secretary,
this time, granted its application for the six lots
including Lot No. 36 since the additional documents
offered by Roxas & Co. mentioned the said lot.
In granting the application, the DAR
Secretary30 examined anew the evidence submitted
by Roxas & Co. which consisted mainly of
certifications from various local and national
government agencies.31 Petitioner in G.R. Nos.
167505, 167540, 169163 and 179650, Damayan Ng
Mga Manggagawang Bukid Sa Asyenda Roxas-
National Federation of Sugar Workers (DAMBA-
NFSW), the organization of the farmer-beneficiaries,
moved to have the grant of the application
reconsidered but the same was denied by the DAR
by Order of December 12, 2003, hence, it filed a
petition for certiorari before the Court of Appeals,
docketed as CA-G.R. SP No. 82225, on grounds of
forum-shopping and grave abuse of discretion. The
appellate court, by Decision of October 31, 2006,
ruled that DAMBA-NFSW availed of the wrong mode
of appeal. At all events, it dismissed its petition as it
upheld the DAR Secretary’s ruling that Roxas & Co.
did not commit forum-shopping, hence, the petition
of DAMBA-NGSW in G.R. No. 179650.
While ordinarily findings of facts of quasi-judicial
agencies are generally accorded great weight and
even finality by the Court if supported by substantial
evidence in recognition of their expertise on the
specific matters under their consideration,32 this legal
precept cannot be made to apply in G.R. No.
179650.
Even as the existence and validity of Nasugbu MZO
No. 4 had already been established, there remains in
dispute the issue of whether the parcels of land
involved in DAR Administrative Case No. A-9999-
142-97 subject of G.R. No. 179650 are actually
within the said zoning ordinance.
The Court finds that the DAR Secretary indeed
committed grave abuse of discretion when he
ignored the glaring inconsistencies in the
certifications submitted early on by Roxas & Co. in
support of its application vis-à-vis the certifications it
later submitted when the DAR Secretary reopened
DAR Administrative Case No. A-9999-142-97.
Notably, then DAR Secretary Horacio Morales, on
one hand, observed that the "landholdings covered
by the aforesaid titles do not correspond to the
Certification dated February 11, 1998 of the
[HLURB], the Certification dated September 12,
1996 issued by the Municipal Planning and
Development Coordinator, and the Certifications
dated July 31, 1997 and May 27, 1997 issued by the
National Irrigation Authority." On the other hand, then
Secretary Hernani Braganza relied on a different set
of certifications which were issued later or on
September 19, 1996.
In this regard, the Court finds in order the
observation of DAMBA-NFSW that Roxas & Co.
should have submitted the comprehensive land use
plan and pointed therein the exact locations of the
properties to prove that indeed they are within the
area of coverage of Nasugbu MZO No. 4.
The petitions in G.R. Nos. 179650 & 149548 must be
distinguished from Junio v. Garilao33 wherein the
certifications submitted in support of the application
for exemption of the therein subject lot were mainly
considered on the presumption of regularity in their
issuance, there being no doubt on the location and
identity of the subject lot.34 In G.R. No. 179650, there
exist uncertainties on the location and identities of
the properties being applied for exemption.
G.R. No. 179650 & G.R. No. 149548 must
accordingly be denied for lack of merit.
III. ROXAS & CO.’S APPLICATION FOR CARP
EXEMPTION IN DAR Administrative Case No. A-
9999-008-98 FOR THE NINE PARCELS OF LAND
IN HACIENDA PALICO SUBJECT OF G.R. NO.
167505 SHOULD BE GRANTED.
The Court, however, takes a different stance with
respect to Roxas & Co.’s application for CARP
exemption in DAR Administrative Case No. A-9999-
008-98 over nine parcels of land identified as Lot
Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2
which are portions of TCT No. 985 covering 45.9771
hectares in Hacienda Palico, subject of G.R. No.
167505.
In its application, Roxas & Co. submitted the
following documents:
1. Letter-application dated 29 September 1997
signed by Elino SJ. Napigkit, for and on behalf
of Roxas & Company, Inc., seeking exemption
from CARP coverage of subject landholdings;
2. Secretary’s Certificate dated September
2002 executed by Mariano M. Ampil III,
Corporate Secretary of Roxas & Company,
Inc., indicating a Board Resolution authorizing
him to represent the corporation in its
application for exemption with the DAR. The
same Board Resolution revoked the
authorization previously granted to the Sierra
Management & Resources Corporation;
3. Photocopy of TCT No. 985 and its
corresponding Tax Declaration No. 0401;
4. Location and vicinity maps of subject
landholdings;
5. Certification dated 10 July 1997 issued
by Reynaldo Garcia, Municipal Planning
and Development Coordinator (MPDC) and
Zoning Administrator of Nasugbu,
Batangas, stating that the subject parcels
of land are within the Urban Core Zone as
specified in Zone A. VII of Municipal Zoning
Ordinance No. 4, Series of 1982, approved by
the Human Settlements Regulatory
Commission (HSRC), now the Housing and
Land Use Regulatory Board (HLURB), under
Resolution No. 123, Series of 1983, dated 4
May 1983;
6. Two (2) Certifications both dated 31
August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that
the subject parcels of land appear to be
within the Residential cluster Area as
specified in Zone VII of Municipal Zoning
Ordinance No. 4, Series of 1982, approved
under HSRC Resolution No. 123, Series of
1983, dated 4 May 1983;35
x x x x (emphasis and underscoring supplied)
By Order of November 6, 2002, the DAR Secretary
granted the application for exemption but issued the
following conditions:
1. The farmer-occupants within subject parcels
of land shall be maintained in their peaceful
possession and cultivation of their respective
areas of tillage until a final determination has
been made on the amount of disturbance
compensation due and entitlement of such
farmer-occupants thereto by the PARAD of
Batangas;
2. No development shall be undertaken within
the subject parcels of land until the appropriate
disturbance compensation has been paid to
the farmer-occupants who are determined by
the PARAD to be entitled thereto. Proof of
payment of disturbance compensation shall be
 submitted to this Office within ten (10) days
from such payment; and
3. The cancellation of the CLOA issued to the
farmer-beneficiaries shall be subject of a
separate proceeding before the PARAD of
Batangas.36
DAMBA-NSFW moved for reconsideration but the
DAR Secretary denied the same and explained
further why CLOA holders need not be informed of
the pending application for exemption in this wise:
As regards the first ground raised by [DAMBA-
NSFW], it should be remembered that an application
for CARP-exemption pursuant to DOJ Opinion No.
44, series of 1990, as implemented by DAR
Administrative Order No. 6, series of 1994, is non-
adversarial or non-litigious in nature. Hence,
applicant is correct in saying that nowhere in the
rules is it required that occupants of a landholding
should be notified of an initiated or pending
exemption application.
xxxx
With regard [to] the allegation that oppositors-
movants are already CLOA holders of subject
propert[ies] and deserve to be notified, as owners, of
the initiated questioned exemption application, is of
no moment. The Supreme Court in the case of
Roxas [&] Co., Inc. v. Court of Appeals, 321 SCRA
106, held:
"We stress that the failure of respondent DAR to
comply with the requisites of due process in the
acquisition proceedings does not give this Court the
power to nullify the CLOA’s already issued to the
farmer beneficiaries. x x x x. Anyhow, the farmer[-
]beneficiaries hold the property in trust for the rightful
owner of the land."
Since subject landholding has been validly
determined to be CARP-exempt, therefore, the
previous issuance of the CLOA of oppositors-
movants is erroneous. Hence, similar to the situation
of the above-quoted Supreme Court Decision,
oppositors-movants only hold the property in trust for
the rightful owners of the land and are not the
owners of subject landholding who should be notified
of the exemption application of applicant Roxas &
Company, Incorporated.
Finally, this Office finds no substantial basis to
reverse the assailed Orders since there is substantial
compliance by the applicant with the requirements
for the issuance of exemption clearance under DAR
AO 6 (1994).37
On DAMBA-NSFW’s petition for certiorari, the Court
of Appeals, noting that the petition was belatedly
filed, sustained, by Decision of December 20, 1994
and Resolution of May 7, 2007,38 the DAR
Secretary’s finding that Roxas & Co. had
substantially complied with the prerequisites of DAR
AO 6, Series of 1994. Hence, DAMBA-NFSW’s
petition in G.R. No. 167505.
The Court finds no reversible error in the Court of
Appeals’ assailed issuances, the orders of the DAR
Secretary which it sustained being amply supported
by evidence.
IV. THE CLOAs ISSUED BY THE DAR in
ADMINISTRATIVE CASE NO. A-9999-008-98
SUBJECT OF G.R. No. 179650 TO THE FARMER-
BENEFICIARIES INVOLVING THE NINE PARCELS
OF LAND IN HACIENDA PALICO MUST
BE CANCELLED.
Turning now to the validity of the issuance of CLOAs
in Hacienda Palico vis-à-vis the present dispositions:
It bears recalling that in DAR Administrative Case
Nos. A-9999-008-98 and A-9999-142-97 (G.R. No.
179650), the Court ruled for Roxas & Co.’s grant of
exemption in DAR Administrative Case No. A-9999-
008-98 but denied the grant of exemption in DAR
Administrative Case No. A-9999-142-97 for reasons
already discussed. It follows that the CLOAs issued
to the farmer-beneficiaries in DAR Administrative
Case No. A-9999-008-98 must be cancelled.
But first, the Court digresses. The assertion of
DAMBA-NSFW that the petitions for partial and
complete cancellations of the CLOAs subject of
DARAB Case Nos. R-401-003-2001 to R-401-005-
2001 and No. 401-239-2001 violated the earlier
order in Roxas v. Court of Appeals does not lie.
Nowhere did the Court therein pronounce that the
CLOAs issued "cannot and should not be cancelled,"
what was involved therein being the legality of the
acquisition proceedings. The Court merely reiterated
that it is the DAR which has primary jurisdiction to
rule on the validity of CLOAs. Thus it held:
. . . [t]he failure of respondent DAR to comply with
the requisites of due process in the acquisition
proceedings does not give this Court the power to
nullify the [CLOAs] already issued to the farmer-
beneficiaries. To assume the power is to short-circuit
the administrative process, which has yet to run its
regular course. Respondent DAR must be given the
chance to correct its procedural lapses in the
acquisition proceedings. x x x x. Anyhow, the farmer
beneficiaries hold the property in trust for the rightful
owner of the land.39
On the procedural question raised by Roxas & Co.
on the appellate court’s relaxation of the rules by
giving due course to DAMBA-NFSW’s appeal in CA
G.R. SP No. 72198, the subject of G.R. No. 167845:
Indeed, the perfection of an appeal within the
statutory period is jurisdictional and failure to do so
renders the assailed decision final and executory.40 A
relaxation of the rules may, however, for meritorious
reasons, be allowed in the interest of justice.41 The
Court finds that in giving due course to DAMBA-
NSFW’s appeal, the appellate court committed no
reversible error. Consider its ratiocination:
x x x x. To deny [DAMBA-NSFW]’s appeal with the
PARAD will not only affect their right over the parcel
of land subject of this petition with an area of
103.1436 hectares, but also that of the whole area
covered by CLOA No. 6654 since the PARAD
rendered a Joint Resolution of the Motion for
Reconsideration filed by the [DAMBA-NSFW] with
regard to [Roxas & Co.]’s application for partial and
total cancellation of the CLOA in DARAB Cases No.
R-401-003-2001 to R-401-005-2001 and No. 401-
239-2001. There is a pressing need for an extensive
discussion of the issues as raised by both parties as
the matter of canceling CLOA No. 6654 is of utmost
importance, involving as it does the probable
displacement of hundreds of farmer-beneficiaries
and their families. x x x x (underscoring supplied)
Unlike courts of justice, the DARAB, as a quasi-
judicial body, is not bound to strictly observe rules of
procedure and evidence. To strictly enforce rules on
appeals in this case would render to naught the
Court’s dispositions on the other issues in these
consolidated petitions.
In the main, there is no logical recourse except to
cancel the CLOAs issued for the nine parcels of land
identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49,
48-1 and 48-2 which are portions of TCT No. 985
covering 45.9771 hectares in Hacienda Palico (or
those covered by DAR Administrative Case No. A-
9999-008-98). As for the rest of the CLOAs, they
should be respected since Roxas & Co., as shown in
the discussion in G.R. Nos. 167540, 167543 and
167505, failed to prove that the other lots in
Hacienda Palico and the other two haciendas, aside
from the above-mentioned nine lots, are CARP-
exempt.
Conformably, Republic Act No. 3844 (R.A. No.
3844), as amended,42 mandates that disturbance
compensation be given to tenants of parcels of land
upon finding that "(t)he landholding is declared by
the department head upon recommendation of the
National Planning Commission to be suited for
residential, commercial, industrial or some other
urban purposes."43 In addition, DAR AO No. 6, Series
of 1994 directs the payment of disturbance
compensation before the application for exemption
may be completely granted.
Roxas & Co. is thus mandated to first satisfy the
disturbance compensation of affected farmer-
beneficiaries in the areas covered by the nine
parcels of lands in DAR AO No. A-9999-008-98
before the CLOAs covering them can be cancelled.
And it is enjoined to strictly follow the instructions of
R.A. No. 3844.
Finally then, and in view of the Court’s dispositions in
G.R. Nos. 179650 and 167505, the May 27, 2001
Decision of the Provincial Agrarian Reform
Adjudicator (PARAD)44 in DARAB Case No. 401-239-
2001 ordering the total cancellation of CLOA No.
6654, subject of G.R. No. 169163, is SET ASIDE
except with respect to the CLOAs issued for Lot Nos.
20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are
portions of TCT No. 985 covering 45.9771 hectares
in Hacienda Palico (or those covered by DAR
Administrative Case No. A-9999-008-98). It goes
without saying that the motion for reconsideration of
DAMBA-NFSW is granted to thus vacate the Court’s
October 19, 2005 Resolution dismissing DAMBA-
NFSW’s petition for review of the appellate court’s
Decision in CA-G.R. SP No. 75952;45
WHEREFORE,
1) In G.R. No. 167540, the
Court REVERSES and SETS ASIDE the
November 24, 2003 Decision46 and March 18,
2005 Resolution of the Court of Appeals in
CA-G.R. SP No. 72131 which declared that
Presidential Proclamation No. 1520
reclassified the lands in the municipalities of
Nasugbu in Batangas and Maragondon and
Ternate in Cavite to non-agricultural use;
2) The Court accordingly GRANTS the Motion
for Reconsideration of the Department of
Agrarian Reform in G.R. No. 167543 and
REVERSES and SETS ASIDE its Resolution
of June 20, 2005;
3) In G.R. No. 149548, the Court DENIES the
petition for review of Roxas & Co. for lack of
merit;
4) In G.R. No. 179650, the Court GRANTS the
petition for review of DAMBA-NSFW
and REVERSES and SETS ASIDE the
October 31, 2006 Decision and August 16,
2007 Resolution of the Court of Appeals in
CA-G.R. SP No. 82225;
5) In G.R. No. 167505, the Court DENIES the
petition for review of DAMBA-NSFW
and AFFIRMS the December 20, 2004
Decision and March 7, 2005 Resolution of the
Court of Appeals in CA-G.R. SP No. 82226;
6) In G.R. No. 167845, the
Court DENIES Roxas & Co.’s petition for
review for lack of merit and AFFIRMS the
 September 10, 2004 Decision and April 14,
2005 Resolution of the Court of Appeals;

7) In G.R. No. 169163, the Court SETS

ASIDE the Decisions of the Provincial
Agrarian Reform Adjudicator in DARAB Case
No. 401-239-2001 ordering the cancellation of
CLOA No. 6654 and DARAB Cases Nos. R-
401-003-2001 to No. R-401-005-2001 granting
the partial cancellation of CLOA No. 6654. The
CLOAs issued for Lots No. 21 No. 24, No. 26,
No. 31, No. 32 and No. 34 or those covered by
DAR Administrative Case No. A-9999-142-97)
remain; and

8) Roxas & Co. is ORDERED to pay the

disturbance compensation of affected farmer-
beneficiaries in the areas covered by the nine
parcels of lands in DAR Administrative Case
No. A-9999-008-98 before the CLOAs therein
can be cancelled, and is ENJOINED to strictly
follow the mandate of R.A. No. 3844.

No pronouncement as to costs.

SO ORDERED.
E. DUE PROCESS AND EMINENT DOMAIN
(CASES)
THIRD DIVISION
[G.R. NO. 177056 : September 18, 2009]
THE OFFICE OF THE SOLICITOR
GENERAL, Petitioner, v. AYALA LAND
INCORPORATED, ROBINSON'S LAND
CORPORATION, SHANGRI-LA PLAZA CORPORATION
and SM PRIME HOLDINGS, INC., Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on
Certiorari,1 under Rule 45 of the Revised Rules of Court,
filed by petitioner Office of the Solicitor General (OSG),
seeking the reversal and setting aside of the
Decision2 dated 25 January 2007 of the Court of Appeals
in CA-G.R. CV No. 76298, which affirmed in toto the Joint
Decision3 dated 29 May 2002 of the Regional Trial Court
(RTC) of Makati City, Branch 138, in Civil Cases No. 00-
1208 and No. 00-1210; and (2) the Resolution4 dated 14
March 2007 of the appellate court in the same case
which denied the Motion for Reconsideration of the OSG.
The RTC adjudged that respondents Ayala Land
Incorporated (Ayala Land), Robinsons Land Corporation
(Robinsons), Shangri-la Plaza Corporation (Shangri-la),
and SM Prime Holdings, Inc. (SM Prime) could not be
obliged to provide free parking spaces in their malls to
their patrons and the general public.
Respondents Ayala Land, Robinsons, and Shangri-la
maintain and operate shopping malls in various locations
in Metro Manila. Respondent SM Prime constructs,
operates, and leases out commercial buildings and other
structures, among which, are SM City, Manila; SM
Centerpoint, Sta. Mesa, Manila; SM City, North Avenue,
Quezon City; and SM Southmall, Las Piñas.
The shopping malls operated or leased out by
respondents have parking facilities for all kinds of motor
vehicles, either by way of parking spaces inside the mall
buildings or in separate buildings and/or adjacent lots
that are solely devoted for use as parking spaces.
Respondents Ayala Land, Robinsons, and SM Prime spent
for the construction of their own parking facilities.
Respondent Shangri-la is renting its parking facilities,
consisting of land and building specifically used as
parking spaces, which were constructed for the lessor's
account.
Respondents expend for the maintenance and
administration of their respective parking facilities. They
provide security personnel to protect the vehicles parked
in their parking facilities and maintain order within the
area. In turn, they collect the following parking fees from
the persons making use of their parking facilities,
regardless of whether said persons are mall patrons or
not:
 Respondent Parking Fees executives of respondents, who operate the major malls
in the country; the officials from the Department of
Ayala Land On weekdays, P25.00 for the first fourTrade and Industry (DTI), Department of Public Works
hours and P10.00 for every succeeding and Highways (DPWH), Metro Manila Development
hour; on weekends, flat rate of P25.00Authority (MMDA), and other local government officials;
and the Philippine Motorists Association (PMA) as
per day representative of the consumers' group.
Robinsons P20.00 for the first three hours
and P10.00 for every succeeding hourAfter three public hearings held on 30 September, 3
November, and 1 December 1999, the afore-mentioned
Shangri-la Flat rate of P30.00 per day Senate Committees jointly issued Senate Committee
Report No. 2255 on 2 May 2000, in which they
SM Prime P10.00 to P20.00 (depending on whether
concluded:
the parking space is outdoors or indoors)
for the first three hours and 59 minutes,
In view of the foregoing, the Committees find that the
and P10.00 for every succeeding hourcollection
or of parking fees by shopping malls is contrary to
fraction thereof the National Building Code and is therefor [sic] illegal.
While it is true that the Code merely requires malls to
provide parking spaces, without specifying whether it is
The parking tickets or cards issued by respondents to free or not, both Committees believe that the reasonable
vehicle owners contain the stipulation that respondents and logical interpretation of the Code is that the parking
shall not be responsible for any loss or damage to the spaces are for free. This interpretation is not only
vehicles parked in respondents' parking facilities. reasonable and logical but finds support in the actual
practice in other countries like the United States of
In 1999, the Senate Committees on Trade and America where parking spaces owned and operated by
Commerce and on Justice and Human Rights conducted a mall owners are free of charge.
joint investigation for the following purposes: (1) to
inquire into the legality of the prevalent practice of Figuratively speaking, the Code has "expropriated" the
shopping malls of charging parking fees; (2) assuming land for parking - something similar to the subdivision
arguendo that the collection of parking fees was legally law which require developers to devote so much of the
authorized, to find out the basis and reasonableness of land area for parks.
the parking rates charged by shopping malls; and (3) to
determine the legality of the policy of shopping malls of Moreover, Article II of R.A. No. 9734 (Consumer Act of
denying liability in cases of theft, robbery, or carnapping, the Philippines) provides that "it is the policy of the State
by invoking the waiver clause at the back of the parking to protect the interest of the consumers, promote the
tickets. Said Senate Committees invited the top general welfare and establish standards of conduct for
business and industry." Obviously, a contrary
interpretation (i.e., justifying the collection of parking
fees) would be going against the declared policy of R.A.
7394.
Section 201 of the National Building Code gives the
responsibility for the administration and enforcement of
the provisions of the Code, including the imposition of
penalties for administrative violations thereof to the
Secretary of Public Works. This set up, however, is not
being carried out in reality.
In the position paper submitted by the Metropolitan
Manila Development Authority (MMDA), its chairman,
Jejomar C. Binay, accurately pointed out that the
Secretary of the DPWH is responsible for the
implementation/enforcement of the National Building
Code. After the enactment of the Local Government Code
of 1991, the local government units (LGU's) were tasked
to discharge the regulatory powers of the DPWH. Hence,
in the local level, the Building Officials enforce all rules/
regulations formulated by the DPWH relative to all
building plans, specifications and designs including
parking space requirements. There is, however, no single
national department or agency directly tasked to
supervise the enforcement of the provisions of the Code
on parking, notwithstanding the national character of the
law.6
Senate Committee Report No. 225, thus, contained the
following recommendations:
In light of the foregoing, the Committees on Trade and
Commerce and Justice and Human Rights hereby
recommend the following:
1. The Office of the Solicitor General should institute the
necessary action to enjoin the collection of parking fees
as well as to enforce the penal sanction provisions of the
National Building Code. The Office of the Solicitor General
should likewise study how refund can be exacted from
mall owners who continue to collect parking fees.
2. The Department of Trade and Industry pursuant to the
provisions of R.A. No. 7394, otherwise known as the
Consumer Act of the Philippines should enforce the
provisions of the Code relative to parking. Towards this
end, the DTI should formulate the necessary
implementing rules and regulations on parking in
shopping malls, with prior consultations with the local
government units where these are located. Furthermore,
the DTI, in coordination with the DPWH, should be
empowered to regulate and supervise the construction
and maintenance of parking establishments.
3. Finally, Congress should amend and update the
National Building Code to expressly prohibit shopping
malls from collecting parking fees by at the same time,
prohibit them from invoking the waiver of liability.7
Respondent SM Prime thereafter received information
that, pursuant to Senate Committee Report No. 225, the
DPWH Secretary and the local building officials of Manila,
Quezon City, and Las Piñas intended to institute,
through the OSG, an action to enjoin respondent SM
Prime and similar establishments from collecting parking
fees, and to impose upon said establishments penal
sanctions under Presidential Decree No. 1096, otherwise
known as the National Building Code of the Philippines
(National Building Code), and its Implementing Rules and
Regulations (IRR). With the threatened action against it,
respondent SM Prime filed, on 3 October 2000, a Petition
for Declaratory Relief8 under Rule 63 of the Revised
Rules of Court, against the DPWH Secretary and local
building officials of Manila, Quezon City, and Las Piñas.
Said Petition was docketed as Civil Case No. 00-1208 and
assigned to the RTC of Makati City, Branch 138, presided
over by Judge Sixto Marella, Jr. (Judge Marella). In its
Petition, respondent SM Prime prayed for judgment:
a) Declaring Rule XIX of the Implementing Rules and
Regulations of the National Building Code as ultra vires,
hence, unconstitutional and void;
b) Declaring [herein respondent SM Prime]'s clear legal
right to lease parking spaces appurtenant to its
department stores, malls, shopping centers and other
commercial establishments; and cralawlibrary
c) Declaring the National Building Code of the Philippines
Implementing Rules and Regulations as ineffective, not
having been published once a week for three (3)
consecutive weeks in a newspaper of general circulation,
as prescribed by Section 211 of Presidential Decree No.
1096.
[Respondent SM Prime] further prays for such other
reliefs as may be deemed just and equitable under the
premises.9
The very next day, 4 October 2000, the OSG filed a
Petition for Declaratory Relief and Injunction (with Prayer
for Temporary Restraining Order and Writ of Preliminary
Injunction)10 against respondents. This Petition was
docketed as Civil Case No. 00-1210 and raffled to the
RTC of Makati, Branch 135, presided over by Judge
Francisco B. Ibay (Judge Ibay). Petitioner prayed that the
RTC:
1. After summary hearing, a temporary restraining order
and a writ of preliminary injunction be issued restraining
respondents from collecting parking fees from their
customers; and cralawlib rary
2. After hearing, judgment be rendered declaring that
the practice of respondents in charging parking fees is
violative of the National Building Code and its
Implementing Rules and Regulations and is therefore
invalid, and making permanent any injunctive writ issued
in this case.
Other reliefs just and equitable under the premises are
likewise prayed for.11
On 23 October 2000, Judge Ibay of the RTC of Makati
City, Branch 135, issued an Order consolidating Civil
Case No. 00-1210 with Civil Case No. 00-1208 pending
before Judge Marella of RTC of Makati, Branch 138.
As a result of the pre-trial conference held on the
morning of 8 August 2001, the RTC issued a Pre-Trial
Order12 of even date which limited the issues to be
resolved in Civil Cases No. 00-1208 and No. 00-1210 to
the following:
1. Capacity of the plaintiff [OSG] in Civil Case No. 00-
1210 to institute the present proceedings and relative
thereto whether the controversy in the collection of
parking fees by mall owners is a matter of public welfare.
2. Whether declaratory relief is proper.
3. Whether respondent Ayala Land, Robinsons, Shangri-
La and SM Prime are obligated to provide parking spaces
in their malls for the use of their patrons or the public in
general, free of charge.
4. Entitlement of the parties of [sic] award of damages.13
On 29 May 2002, the RTC rendered its Joint Decision in
Civil Cases No. 00-1208 and No. 00-1210.
The RTC resolved the first two issues affirmatively. It
ruled that the OSG can initiate Civil Case No. 00-1210
under Presidential Decree No. 478 and the Administrative
Code of 1987.14 It also found that all the requisites for an
action for declaratory relief were present, to wit:
The requisites for an action for declaratory relief are: (a)
there is a justiciable controversy; (b) the controversy is
between persons whose interests are adverse; (c) the
party seeking the relief has a legal interest in the
controversy; and (d) the issue involved is ripe for judicial
determination.
SM, the petitioner in Civil Case No. 001-1208 [sic] is a
mall operator who stands to be affected directly by the
position taken by the government officials sued namely
the Secretary of Public Highways and the Building
Officials of the local government units where it operates
shopping malls. The OSG on the other hand acts on a
matter of public interest and has taken a position
adverse to that of the mall owners whom it sued. The
construction of new and bigger malls has been
announced, a matter which the Court can take judicial
notice and the unsettled issue of whether mall operators
should provide parking facilities, free of charge needs to
be resolved.15
As to the third and most contentious issue, the RTC
pronounced that:
The Building Code, which is the enabling law and the
Implementing Rules and Regulations do not impose that
parking spaces shall be provided by the mall owners free
of charge. Absent such directive[,] Ayala Land,
Robinsons, Shangri-la and SM [Prime] are under no
obligation to provide them for free. Article 1158 of the
Civil Code is clear:
"Obligations derived from law are not presumed. Only
those expressly determined in this Code or in special
laws are demandable and shall be regulated by the
precepts of the law which establishes them; and as to
what has not been foreseen, by the provisions of this
Book (1090).["]
xxx
The provision on ratios of parking slots to several
variables, like shopping floor area or customer area
found in Rule XIX of the Implementing Rules and
Regulations cannot be construed as a directive to provide
free parking spaces, because the enabling law, the
Building Code does not so provide. x x x.
To compel Ayala Land, Robinsons, Shangri-La and SM
[Prime] to provide parking spaces for free can be
considered as an unlawful taking of property right
without just compensation.
Parking spaces in shopping malls are privately owned
and for their use, the mall operators collect fees. The
legal relationship could be either lease or deposit. In
either case[,] the mall owners have the right to collect
money which translates into income. Should parking
spaces be made free, this right of mall owners shall be
gone. This, without just compensation. Further, loss of
effective control over their property will ensue which is
frowned upon by law.
The presence of parking spaces can be viewed in another
light. They can be looked at as necessary facilities to
entice the public to increase patronage of their malls
because without parking spaces, going to their malls will
be inconvenient. These are[,] however[,] business
considerations which mall operators will have to decide
for themselves. They are not sufficient to justify a legal
conclusion, as the OSG would like the Court to adopt that
it is the obligation of the mall owners to provide parking
spaces for free.16
The RTC then held that there was no sufficient evidence
to justify any award for damages.
The RTC finally decreed in its 29 May 2002 Joint Decision
in Civil Cases No. 00-1208 and No. 00-1210 that:
FOR THE REASONS GIVEN, the Court declares that Ayala
Land[,] Inc., Robinsons Land Corporation, Shangri-la
Plaza Corporation and SM Prime Holdings[,] Inc. are not
obligated to provide parking spaces in their malls for the
use of their patrons or public in general, free of charge.
All counterclaims in Civil Case No. 00-1210 are
dismissed.
No pronouncement as to costs.17
CA-G.R. CV No. 76298 involved the separate appeals of
the OSG18 and respondent SM Prime19 filed with the
Court of Appeals. The sole assignment of error of the
OSG in its Appellant's Brief was:
THE TRIAL COURT ERRED IN HOLDING THAT THE
NATIONAL BUILDING CODE DID NOT INTEND MALL
PARKING SPACES TO BE FREE OF CHARGE[;]20
while the four errors assigned by respondent SM Prime in
its Appellant's Brief were:
I
THE TRIAL COURT ERRED IN FAILING TO DECLARE RULE
XIX OF THE IMPLEMENTING RULES AS HAVING BEEN
ENACTED ULTRA VIRES, HENCE, UNCONSTITUTIONAL
AND VOID.
II
THE TRIAL COURT ERRED IN FAILING TO DECLARE THE
IMPLEMENTING RULES INEFFECTIVE FOR NOT HAVING
BEEN PUBLISHED AS REQUIRED BY LAW.
III
THE TRIAL COURT ERRED IN FAILING TO DISMISS THE
OSG'S PETITION FOR DECLARATORY RELIEF AND
INJUNCTION FOR FAILURE TO EXHAUST
ADMINISTRATIVE REMEDIES.
IV
THE TRIAL COURT ERRED IN FAILING TO DECLARE THAT
THE OSG HAS NO LEGAL CAPACITY TO SUE AND/OR
THAT IT IS NOT A REAL PARTY-IN-INTEREST IN THE
INSTANT CASE.21
Respondent Robinsons filed a Motion to Dismiss Appeal of
the OSG on the ground that the lone issue raised therein
involved a pure question of law, not reviewable by the
Court of Appeals.
The Court of Appeals promulgated its Decision in CA-G.R.
CV No. 76298 on 25 January 2007. The appellate court
agreed with respondent Robinsons that the appeal of the
OSG should suffer the fate of dismissal, since "the issue
on whether or not the National Building Code and its
implementing rules require shopping mall operators to
provide parking facilities to the public for free" was
evidently a question of law. Even so, since CA-G.R. CV
No. 76298 also included the appeal of respondent SM
Prime, which raised issues worthy of consideration, and
in order to satisfy the demands of substantial justice, the
Court of Appeals proceeded to rule on the merits of the
case.
In its Decision, the Court of Appeals affirmed the
capacity of the OSG to initiate Civil Case No. 00-1210
before the RTC as the legal representative of the
government,22 and as the one deputized by the Senate of
the Republic of the Philippines through Senate
Committee Report No. 225.
The Court of Appeals rejected the contention of
respondent SM Prime that the OSG failed to exhaust
administrative remedies. The appellate court explained
that an administrative review is not a condition
precedent to judicial relief where the question in dispute
is purely a legal one, and nothing of an administrative
nature is to be or can be done.
The Court of Appeals likewise refused to rule on the
validity of the IRR of the National Building Code, as such
issue was not among those the parties had agreed to be
resolved by the RTC during the pre-trial conference for
Civil Cases No. 00-1208 and No. 00-1210. Issues cannot
be raised for the first time on appeal. Furthermore, the
appellate court found that the controversy could be
settled on other grounds, without touching on the issue
of the validity of the IRR. It referred to the settled rule
that courts should refrain from passing upon the
constitutionality of a law or implementing rules, because
of the principle that bars judicial inquiry into a
constitutional question, unless the resolution thereof is
indispensable to the determination of the case.
Lastly, the Court of Appeals declared that Section 803 of
the National Building Code and Rule XIX of the IRR were
clear and needed no further construction. Said provisions
were only intended to control the occupancy or
congestion of areas and structures. In the absence of any
express and clear provision of law, respondents could not
be obliged and expected to provide parking slots free of
charge.
The fallo of the 25 January 2007 Decision of the Court of
Appeals reads:
WHEREFORE, premises considered, the instant appeals
are DENIED. Accordingly, appealed Decision is hereby
AFFIRMED in toto.23
In its Resolution issued on 14 March 2007, the Court of
Appeals denied the Motion for Reconsideration of the
OSG, finding that the grounds relied upon by the latter
had already been carefully considered, evaluated, and
passed upon by the appellate court, and there was no
strong and cogent reason to modify much less reverse
the assailed judgment.
The OSG now comes before this Court, via the instant
Petition for Review, with a single assignment of error:
THE COURT OF APPEALS SERIOUSLY ERRED IN
AFFIRMING THE RULING OF THE LOWER COURT THAT
RESPONDENTS ARE NOT OBLIGED TO PROVIDE FREE
PARKING SPACES TO THEIR CUSTOMERS OR THE
PUBLIC.24
The OSG argues that respondents are mandated to
provide free parking by Section 803 of the National
Building Code and Rule XIX of the IRR.
According to Section 803 of the National Building Code:
SECTION 803. Percentage of Site Occupancy
(a) Maximum site occupancy shall be governed by the
use, type of construction, and height of the building and
the use, area, nature, and location of the site; and
subject to the provisions of the local zoning requirements
and in accordance with the rules and regulations
promulgated by the Secretary.
In connection therewith, Rule XIX of the old
IRR,25 provides:
RULE XIX - PARKING AND LOADING SPACE
REQUIREMENTS
Pursuant to Section 803 of the National Building Code
(PD 1096) providing for maximum site occupancy, the
following provisions on parking and loading space
requirements shall be observed:
1. The parking space ratings listed below are minimum
off-street requirements for specific uses/occupancies for
buildings/structures:
1.1 The size of an average automobile parking slot shall
be computed as 2.4 meters by 5.00 meters for
perpendicular or diagonal parking, 2.00 meters by 6.00
meters for parallel parking. A truck or bus
parking/loading slot shall be computed at a minimum of
3.60 meters by 12.00 meters. The parking slot shall be
drawn to scale and the total number of which shall be
indicated on the plans and specified whether or not
parking accommodations, are attendant-managed. (See
Section 2 for computation of parking requirements).
xxx
1.7 Neighborhood shopping center - 1 slot/100 sq. m. of
shopping floor area
The OSG avers that the aforequoted provisions should be
read together with Section 102 of the National Building
Code, which declares:
SECTION 102. Declaration of Policy
It is hereby declared to be the policy of the State to
safeguard life, health, property, and public welfare,
consistent with the principles of sound environmental
management and control; and to this end, make it the
purpose of this Code to provide for all buildings and
structures, a framework of minimum standards and
requirements to regulate and control their location, site,
design, quality of materials, construction, use,
occupancy, and maintenance.
The requirement of free-of-charge parking, the OSG
argues, greatly contributes to the aim of safeguarding
"life, health, property, and public welfare, consistent with
the principles of sound environmental management and
control." Adequate parking spaces would contribute
greatly to alleviating traffic congestion when
complemented by quick and easy access thereto because
of free-charge parking. Moreover, the power to regulate
and control the use, occupancy, and maintenance of
buildings and structures carries with it the power to
impose fees and, conversely, to control - - partially or, as
in this case, absolutely - - the imposition of such fees.
The Court finds no merit in the present Petition.
The explicit directive of the afore-quoted statutory and
regulatory provisions, garnered from a plain reading
thereof, is that respondents, as operators/lessors of
neighborhood shopping centers, should provide parking
and loading spaces, in accordance with the minimum
ratio of one slot per 100 square meters of shopping floor
area. There is nothing therein pertaining to the collection
(or non-collection) of parking fees by respondents. In
fact, the term "parking fees" cannot even be found at all
in the entire National Building Code and its IRR.
Statutory construction has it that if a statute is clear and
unequivocal, it must be given its literal meaning and
applied without any attempt at interpretation.26 Since
Section 803 of the National Building Code and Rule XIX
of its IRR do not mention parking fees, then simply, said
provisions do not regulate the collection of the same. The
RTC and the Court of Appeals correctly applied Article
1158 of the New Civil Code, which states:
Art. 1158. Obligations derived from law are not
presumed. Only those expressly determined in this Code
or in special laws are demandable, and shall be regulated
by the precepts of the law which establishes them; and
as to what has not been foreseen, by the provisions of
this Book. (Emphasis ours.)
Hence, in order to bring the matter of parking fees within
the ambit of the National Building Code and its IRR, the
OSG had to resort to specious and feeble argumentation,
in which the Court cannot concur.
The OSG cannot rely on Section 102 of the National
Building Code to expand the coverage of Section 803 of
the same Code and Rule XIX of the IRR, so as to include
the regulation of parking fees. The OSG limits its citation
to the first part of Section 102 of the National Building
Code declaring the policy of the State "to safeguard life,
health, property, and public welfare, consistent with the
principles of sound environmental management and
control"; but totally ignores the second part of said
provision, which reads, "and to this end, make it the
purpose of this Code to provide for all buildings and
structures, a framework of minimum standards and
requirements to regulate and control their location, site,
design, quality of materials, construction, use,
occupancy, and maintenance." While the first part of
Section 102 of the National Building Code lays down the
State policy, it is the second part thereof that explains
how said policy shall be carried out in the Code. Section
102 of the National Building Code is not an all-
encompassing grant of regulatory power to the DPWH
Secretary and local building officials in the name of life,
health, property, and public welfare. On the contrary, it
limits the regulatory power of said officials to ensuring
that the minimum standards and requirements for all
buildings and structures, as set forth in the National
Building Code, are complied with.
Consequently, the OSG cannot claim that in addition to
fixing the minimum requirements for parking spaces for
buildings, Rule XIX of the IRR also mandates that such
parking spaces be provided by building owners free of
charge. If Rule XIX is not covered by the enabling law,
then it cannot be added to or included in the
implementing rules. The rule-making power of
administrative agencies must be confined to details for
regulating the mode or proceedings to carry into effect
the law as it has been enacted, and it cannot be
extended to amend or expand the statutory requirements
or to embrace matters not covered by the statute.
Administrative regulations must always be in harmony
with the provisions of the law because any resulting
discrepancy between the two will always be resolved in
favor of the basic law.27
From the RTC all the way to this Court, the OSG
repeatedly referred to Republic v. Gonzales28 and City of
Ozamis v. Lumapas29 to support its position that the
State has the power to regulate parking spaces to
promote the health, safety, and welfare of the public;
and it is by virtue of said power that respondents may be
required to provide free parking facilities. The OSG,
though, failed to consider the substantial differences in
the factual and legal backgrounds of these two cases
from those of the Petition at bar.
In Republic, the Municipality of Malabon sought to eject
the occupants of two parcels of land of the public domain
to give way to a road-widening project. It was in this
context that the Court pronounced:
Indiscriminate parking along F. Sevilla Boulevard and
other main thoroughfares was prevalent; this, of course,
caused the build up of traffic in the surrounding area to
the great discomfort and inconvenience of the public who
use the streets. Traffic congestion constitutes a threat to
the health, welfare, safety and convenience of the people
and it can only be substantially relieved by widening
streets and providing adequate parking areas.
The Court, in City of Ozamis, declared that the City had
been clothed with full power to control and regulate its
streets for the purpose of promoting public health, safety
and welfare. The City can regulate the time, place, and
manner of parking in the streets and public places; and
charge minimal fees for the street parking to cover the
expenses for supervision, inspection and control, to
ensure the smooth flow of traffic in the environs of the
public market, and for the safety and convenience of the
public.
Republic and City of Ozamis involved parking in the local
streets; in contrast, the present case deals with privately
owned parking facilities available for use by the general
public. In Republic and City of Ozamis, the concerned
local governments regulated parking pursuant to their
power to control and regulate their streets; in the instant
case, the DPWH Secretary and local building officials
regulate parking pursuant to their authority to ensure
compliance with the minimum standards and
requirements under the National Building Code and its
IRR. With the difference in subject matters and the bases
for the regulatory powers being invoked, Republic and
City of Ozamis do not constitute precedents for this case.
Indeed, Republic and City of Ozamis both contain
pronouncements that weaken the position of the OSG in
the case at bar. In Republic, the Court, instead of placing
the burden on private persons to provide parking
facilities to the general public, mentioned the trend in
other jurisdictions wherein the municipal governments
themselves took the initiative to make more parking
spaces available so as to alleviate the traffic problems,
thus:
Under the Land Transportation and Traffic Code, parking
in designated areas along public streets or highways is
allowed which clearly indicates that provision for parking
spaces serves a useful purpose. In other jurisdictions
where traffic is at least as voluminous as here, the
provision by municipal governments of parking space is
not limited to parking along public streets or highways.
There has been a marked trend to build off-street
parking facilities with the view to removing parked cars
from the streets. While the provision of off-street parking
facilities or carparks has been commonly undertaken by
private enterprise, municipal governments have been
constrained to put up carparks in response to public
necessity where private enterprise had failed to keep up
with the growing public demand. American courts have
upheld the right of municipal governments to construct
off-street parking facilities as clearly redounding to the
public benefit.30
In City of Ozamis, the Court authorized the collection by
the City of minimal fees for the parking of vehicles along
the streets: so why then should the Court now preclude
respondents from collecting from the public a fee for the
use of the mall parking facilities? Undoubtedly,
respondents also incur expenses in the maintenance and
operation of the mall parking facilities, such as electric
consumption, compensation for parking attendants and
security, and upkeep of the physical structures.
It is not sufficient for the OSG to claim that "the power to
regulate and control the use, occupancy, and
maintenance of buildings and structures carries with it
the power to impose fees and, conversely, to control,
partially or, as in this case, absolutely, the imposition of
such fees." Firstly, the fees within the power of
regulatory agencies to impose are regulatory fees. It has
been settled law in this jurisdiction that this broad and
all-compassing governmental competence to restrict
rights of liberty and property carries with it the
undeniable power to collect a regulatory fee. It looks to
the enactment of specific measures that govern the
relations not only as between individuals but also as
between private parties and the political society.31 True,
if the regulatory agencies have the power to impose
regulatory fees, then conversely, they also have the
power to remove the same. Even so, it is worthy to note
that the present case does not involve the imposition by
the DPWH Secretary and local building officials of
regulatory fees upon respondents; but the collection by
respondents of parking fees from persons who use the
mall parking facilities. Secondly, assuming arguendo that
the DPWH Secretary and local building officials do have
regulatory powers over the collection of parking fees for
the use of privately owned parking facilities, they cannot
allow or prohibit such collection arbitrarily or whimsically.
Whether allowing or prohibiting the collection of such
parking fees, the action of the DPWH Secretary and local
building officials must pass the test of classic
reasonableness and propriety of the measures or means
in the promotion of the ends sought to be
accomplished.32
Keeping in mind the aforementioned test of
reasonableness and propriety of measures or means, the
Court notes that Section 803 of the National Building
Code falls under Chapter 8 on Light and Ventilation.
Evidently, the Code deems it necessary to regulate site
occupancy to ensure that there is proper lighting and
ventilation in every building. Pursuant thereto, Rule XIX
of the IRR requires that a building, depending on its
specific use and/or floor area, should provide a minimum
number of parking spaces. The Court, however, fails to
see the connection between regulating site occupancy to
ensure proper light and ventilation in every building vis -
à -vis regulating the collection by building owners of fees
for the use of their parking spaces. Contrary to the
averment of the OSG, the former does not necessarily
include or imply the latter. It totally escapes this Court
how lighting and ventilation conditions at the malls could
be affected by the fact that parking facilities thereat are
free or paid for.
The OSG attempts to provide the missing link by arguing
that:
Under Section 803 of the National Building Code,
complimentary parking spaces are required to enhance
light and ventilation, that is, to avoid traffic congestion in
areas surrounding the building, which certainly affects
the ventilation within the building itself, which otherwise,
the annexed parking spaces would have served. Free-of-
charge parking avoids traffic congestion by ensuring
quick and easy access of legitimate shoppers to off-street
parking spaces annexed to the malls, and thereby
removing the vehicles of these legitimate shoppers off
the busy streets near the commercial establishments.33
The Court is unconvinced. The National Building Code
regulates buildings, by setting the minimum
specifications and requirements for the same. It does not
concern itself with traffic congestion in areas surrounding
the building. It is already a stretch to say that the
National Building Code and its IRR also intend to solve
the problem of traffic congestion around the buildings so
as to ensure that the said buildings shall have adequate
lighting and ventilation. Moreover, the Court cannot
simply assume, as the OSG has apparently done, that
the traffic congestion in areas around the malls is due to
the fact that respondents charge for their parking
facilities, thus, forcing vehicle owners to just park in the
streets. The Court notes that despite the fees charged by
respondents, vehicle owners still use the mall parking
facilities, which are even fully occupied on some days.
Vehicle owners may be parking in the streets only
because there are not enough parking spaces in the
malls, and not because they are deterred by the parking
fees charged by respondents. Free parking spaces at the
malls may even have the opposite effect from what the
OSG envisioned: more people may be encouraged by the
free parking to bring their own vehicles, instead of taking
public transport, to the malls; as a result, the parking
facilities would become full sooner, leaving more vehicles
without parking spaces in the malls and parked in the
streets instead, causing even more traffic congestion.
Without using the term outright, the OSG is actually
invoking police power to justify the regulation by the
State, through the DPWH Secretary and local building
officials, of privately owned parking facilities, including
the collection by the owners/operators of such facilities of
parking fees from the public for the use thereof. The
Court finds, however, that in totally prohibiting
respondents from collecting parking fees from the public
for the use of the mall parking facilities, the State would
be acting beyond the bounds of police power.
Police power is the power of promoting the public welfare
by restraining and regulating the use of liberty and
property. It is usually exerted in order to merely regulate
the use and enjoyment of the property of the owner. The
power to regulate, however, does not include the power
to prohibit. A fortiori, the power to regulate does not
include the power to confiscate. Police power does not
involve the taking or confiscation of property, with the
exception of a few cases where there is a necessity to
confiscate private property in order to destroy it for the
purpose of protecting peace and order and of promoting
the general welfare; for instance, the confiscation of an
illegally possessed article, such as opium and firearms.34
When there is a taking or confiscation of private property
for public use, the State is no longer exercising police
power, but another of its inherent powers, namely,
eminent domain. Eminent domain enables the State to
forcibly acquire private lands intended for public use
upon payment of just compensation to the owner.35
Normally, of course, the power of eminent domain results
in the taking or appropriation of title to, and possession
of, the expropriated property; but no cogent reason
appears why the said power may not be availed of only
to impose a burden upon the owner of condemned
property, without loss of title and possession.36 It is a
settled rule that neither acquisition of title nor total
destruction of value is essential to taking. It is usually in
cases where title remains with the private owner that
inquiry should be made to determine whether the
impairment of a property is merely regulated or amounts
to a compensable taking. A regulation that deprives any
person of the profitable use of his property constitutes a
taking and entitles him to compensation, unless the
invasion of rights is so slight as to permit the regulation
to be justified under the police power. Similarly, a police
regulation that unreasonably restricts the right to use
business property for business purposes amounts to a
taking of private property, and the owner may recover
therefor.37 ςηα ñrοb lεš ν ιr†υαl l αω lιb rαrÿ
Although in the present case, title to and/or possession
of the parking facilities remain/s with respondents, the
prohibition against their collection of parking fees from
the public, for the use of said facilities, is already
tantamount to a taking or confiscation of their properties.
The State is not only requiring that respondents devote a
portion of the latter's properties for use as parking
spaces, but is also mandating that they give the public
access to said parking spaces for free. Such is already an
excessive intrusion into the property rights of
respondents. Not only are they being deprived of the
right to use a portion of their properties as they wish,
they are further prohibited from profiting from its use or
even just recovering therefrom the expenses for the
maintenance and operation of the required parking
facilities.
The ruling of this Court in City Government of Quezon
City v. Judge Ericta38 is edifying. Therein, the City
Government of Quezon City passed an ordinance obliging
private cemeteries within its jurisdiction to set aside at
least six percent of their total area for charity, that is, for
burial grounds of deceased paupers. According to the
Court, the ordinance in question was null and void, for it
authorized the taking of private property without just
compensation:
There is no reasonable relation between the setting aside
of at least six (6) percent of the total area of all private
cemeteries for charity burial grounds of deceased
paupers and the promotion of' health, morals, good
order, safety, or the general welfare of the people. The
ordinance is actually a taking without compensation of a
certain area from a private cemetery to benefit paupers
who are charges of the municipal corporation. Instead of'
building or maintaining a public cemetery for this
purpose, the city passes the burden to private
cemeteries.
'The expropriation without compensation of a portion of
private cemeteries is not covered by Section 12(t) of
Republic Act 537, the Revised Charter of Quezon City
which empowers the city council to prohibit the burial of
the dead within the center of population of the city and
to provide for their burial in a proper place subject to the
provisions of general law regulating burial grounds and
cemeteries. When the Local Government Code, Batas
Pambansa Blg. 337 provides in Section 177(q) that a
sangguniang panlungsod may "provide for the burial of
the dead in such place and in such manner as prescribed
by law or ordinance" it simply authorizes the city to
provide its own city owned land or to buy or expropriate
private properties to construct public cemeteries. This
has been the law, and practise in the past. It continues
to the present. Expropriation, however, requires payment
of just compensation. The questioned ordinance is
different from laws and regulations requiring owners of
subdivisions to set aside certain areas for streets, parks,
playgrounds, and other public facilities from the land
they sell to buyers of subdivision lots. The necessities of
public safety, health, and convenience are very clear
from said requirements which are intended to insure the
development of communities with salubrious and
wholesome environments. The beneficiaries of the
regulation, in turn, are made to pay by the subdivision
developer when individual lots are sold to homeowners.
In conclusion, the total prohibition against the collection
by respondents of parking fees from persons who use the
mall parking facilities has no basis in the National
Building Code or its IRR. The State also cannot impose
the same prohibition by generally invoking police power,
since said prohibition amounts to a taking of
respondents' property without payment of just
compensation.
Given the foregoing, the Court finds no more need to
address the issue persistently raised by respondent SM
Prime concerning the unconstitutionality of Rule XIX of
the IRR. In addition, the said issue was not among those
that the parties, during the pre-trial conference for Civil
Cases No. 12-08 and No. 00-1210, agreed to submit for
resolution of the RTC. It is likewise axiomatic that the
constitutionality of a law, a regulation, an ordinance or
an act will not be resolved by courts if the controversy
can be, as in this case it has been, settled on other
grounds.39
WHEREFORE, the instant Petition for Review
on Certiorari is hereby DENIED. The Decision dated 25
January 2007 and Resolution dated 14 March 2007 of the
Court of Appeals in CA-G.R. CV No. 76298, affirming in
toto the Joint Decision dated 29 May 2002 of the
Regional Trial Court of Makati City, Branch 138, in Civil
Cases No. 00-1208 and No. 00-1210 are hereby
AFFIRMED. No costs.
 Republic of the Philippines Appeals (CA) in the similarly consolidated petitions
SUPREME COURT docketed as CA-G.R. SP No. 80187 and CA-G.R.
Manila SP No. 00147, respectively.1

THIRD DIVISION The facts, summarized by the CA, follow.

G.R. No. 181562-63 October 2, 2009 Spouses Ciriaco and Arminda Ortega x x x are the
registered owners of a parcel of land known as Lot
SPOUSES CIRIACO and ARMINDA No. 310-B, situated in Hipodromo, Cebu City, with an
ORTEGA, Petitioners, area of 5,712 square meters and covered by
vs. Transfer Certificate of Title No. 113311, issued by
CITY OF CEBU, Respondent. the Register of Deeds of the City of Cebu.

x - - - - - - - - - - - - - - - - - - - - - - -x One-half of the above described land is occupied by

squatters. On September 24, 1990, [the Spouses
G.R. No. 181583-84 Ortega] filed an ejectment case against the squatters
before the Municipal Trial Court in Cities (MTCC) of
CITY OF CEBU, Petitioner, Cebu City, which rendered decision in favor of [the
vs. spouses Ortega]. The case eventually reached the
SPOUSES CIRIACO and ARMINDA Supreme Court, which affirmed the decision of the
ORTEGA, Respondents. MTCC. The decision of the MTCC became final and
executory, and a writ of execution was issued on
DECISION February 1, 1994.
NACHURA, J.: On May 23, 1994, the Sangguniang Panglungsod of
[Cebu City] enacted City Ordinance No. 1519, giving
These are consolidated petitions for review on authority to the City Mayor to expropriate one-half
certiorari filed by petitioners Ciriaco and Arminda (1/2) portion (2,856 square meters) of [the spouses
Ortega (Spouses Ortega) in G.R. Nos. 181562-63 Ortega’s] land (which is occupied by the squatters),
and petitioner City of Cebu (Cebu City) in G.R. Nos. and appropriating for that purpose the amount of
181583-84 assailing the Decision of the Court of ₱3,284,400.00 or at the price of ONE THOUSAND
ONE HUNDRED FIFTY PESOS (₱1,150.00) per
square meter. The amount will be charged against
Account No. 8-93-310, Continuing Appropriation,
Account No. 101-8918-334, repurchase of lots for
various projects. The value of the land was
determined by the Cebu City Appraisal Committee in
Resolution No. 19, series of 1994, dated April 15,
1994.
Pursuant to said ordinance, [Cebu City] filed a
Complaint for Eminent Domain [before the Regional
Trial Court (RTC), Branch 23, Cebu City] against [the
spouses Ortega], docketed as Civil Case No. CEB-
16577.
On March 13, 1998, the [RTC] issued an order
declaring that [Cebu City] "has the lawful right to take
the property subject of the instant case, for public
use or purpose described in the complaint upon
payment of just compensation."
Based on the recommendation of the appointed
Commissioners (one of whom was the City Assessor
of [Cebu City], the [RTC] issued another Order dated
May 21, 1999, fixing the value of the land subject to
expropriation at ELEVEN THOUSAND PESOS
(₱11,000.00) per square meter and ordering [Cebu
City] to pay [Spouses Ortega] the sum of THIRTY
ONE MILLION AND FOUR HUNDRED SIXTEEN
THOUSAND PESOS (₱31,416,000.00) as just
compensation for the expropriated portion of Lot No.
310-B.
The Decision of the [RTC] became final and
executory because of [Cebu City’s] failure to perfect
an appeal on time, and a Writ of Execution was
issued on September 17, 1999 to enforce the court’s
judgment. Upon motion of [the Spouses Ortega], the
[RTC] issued an Order dated March 11, 2002,
quoted as follows:
"Reading of the aforestated resolution shows that the
City Council of Cebu approved Ordinance No. 1519
appropriating the sum of ₱3,284,400.00 for payment
of the subject lot chargeable to Account No. 101-
8918-334.
"In view thereof, the above-mentioned sum is now
subject for execution or garnishment for the same is
no longer exempt from execution."
[Cebu City] filed an Omnibus Motion to Stay
Execution, Modification of Judgment and Withdrawal
of the Case, contending that the price set by the
[RTC] as just compensation to be paid to [the
Spouses Ortega] is way beyond the reach of its
intended beneficiaries for its socialized housing
program. The motion was denied by the [RTC].
[Cebu City’s] Motion for Reconsideration was
likewise denied.
By virtue of the Order of the [RTC], dated July 2,
2003, x x x Sheriff Benigno B. Reas[,] Jr. served a
Notice of Garnishment to Philippine Postal Bank, P.
del Rosario and Junquera Branch Cebu City,
garnishing [Cebu City’s] bank deposit therein.
Hence, [Cebu City] filed the instant Petition for
Certiorari before [the CA] (CA-G.R. SP NO. 80187).
During the pendency of x x x CA-G.R. SP NO.
80187, [Cebu City] filed before the [RTC] a Motion to
Dissolve, Quash or Recall the Writ of Garnishment,
contending that Account No. 101-8918-334
mentioned in Ordinance No. 1519 is not actually an
existing bank account and that the garnishment of
[Cebu City’s] bank account with Philippine Postal
Bank was illegal, because government funds and
properties may not be seized under writ of execution
or garnishment to satisfy such judgment, on obvious
reason of public policy. The [RTC] issued an Order
dated March 8, 2004, denying said motion. [Cebu
City’s] Motion for Reconsideration was also denied.
[The Spouses Ortega] filed an Ex-Parte Motion to
Direct the New Manager of Philippine Postal Bank to
Release to the Sheriff the Garnished Amount, which
was granted by the [RTC]. [Cebu City] filed a Motion
for Reconsideration, but the same was denied.
Hence, [Cebu City] filed another Petition for
Certiorari (CA-G.R. SP NO. 00147) [with the Court of
Appeals].2
Ruling on the petitions for certiorari, the CA disposed
of the cases, to wit:
WHEREFORE, all the foregoing premises
considered, the instant Petitions for Certiorari are
hereby PARTIALLY GRANTED. The assailed Orders
of the [RTC] [Assailed Orders dated March 11, 2002
and July 2, 2003, respectively, in CA-G.R SP NO.
80187] are hereby ANNULLED AND SET ASIDE
insofar as they denied [Cebu City’s] Motion to Stay
Execution, but they are hereby AFFIRMED insofar
as they denied [Cebu City’s] Motion to Modify
Judgment and Withdraw from the Expropriation
Proceedings. Furthermore, the assailed Orders of
the [RTC dated March 8, 2004 in CA-G.R. SP NO.
00147] are hereby ANNULLED AND SET ASIDE.
Let the Decision of the [RTC] be executed in a
manner prescribed by applicable law and
jurisprudence.
SO ORDERED.3
Hence, these consolidated appeals by petitioners
Cebu City and the Spouses Ortega positing the
following issues:
 1. Whether the CA erred in affirming the RTC’s
denial of Cebu City’s Omnibus Motion to
Modify Judgment and to be Allowed to
Withdraw from the Expropriation Proceedings.
2. Whether the deposit of Cebu City with the
Philippine Postal Bank, appropriated for a
different purpose by its Sangguniang
Panglungsod, can be subject to garnishment
as payment for the expropriated lot covered by
City Ordinance No. 1519.
We deny both petitions.
On the first issue, the CA did not err in affirming the
RTC’s Order that the expropriation case had long
been final and executory. Consequently, both the
Order of expropriation and the Order fixing just
compensation by the RTC can no longer be
modified. In short, Cebu City cannot withdraw from
the expropriation proceedings.
Section 4, Rule 67 of the Rules of Court on
Expropriation provides:
SEC. 4. Order of expropriation. – If the objections to
and the defenses against the right of the plaintiff to
expropriate the property are overruled, or when no
party appears to defend as required by this Rule, the
court may issue an order of expropriation declaring
that the plaintiff has a lawful right to take the property
sought to be expropriated, for the public use or
purpose described in the complaint, upon the
payment of just compensation to be determined as of
the date of the taking of the property or the filing of
the complaint, whichever came first.
A final order sustaining the right to expropriate the
property may be appealed by any party aggrieved
thereby. Such appeal, however, shall not prevent the
court from determining the just compensation to be
paid.
After the rendition of such an order, the plaintiff shall
not be permitted to dismiss or discontinue the
proceeding except on such terms as the court deems
just and equitable.
Plainly, from the aforequoted provision, expropriation
proceedings speak of two (2) stages, i.e.:
1. Determination of the authority of the plaintiff
to exercise the power of eminent domain and
the propriety of its exercise in the context of
the facts involved in the suit. This ends with an
order, if not of dismissal of the action, of
condemnation [or order of expropriation]
declaring that the plaintiff has the lawful right
to take the property sought to be condemned,
for the public use or purpose described in the
complaint, upon the payment of just
 compensation to be determined as of the date
of the filing of the complaint; and
2. Determination by the court of the just
compensation for the property sought to be
taken.4
We held in the recent case of Republic v. Phil-Ville
Development and Housing Corporation5 that:
[A]n order of expropriation denotes the end of the
first stage of expropriation. Its end then paves the
way for the second stage—the determination of just
compensation, and, ultimately, payment. An order of
expropriation puts an end to any ambiguity regarding
the right of the petitioner to condemn the
respondents’ properties. Because an order of
expropriation merely determines the authority to
exercise the power of eminent domain and the
propriety of such exercise, its issuance does not
hinge on the payment of just compensation. After all,
there would be no point in determining just
compensation if, in the first place, the plaintiff’s right
to expropriate the property was not first clearly
established.6
Conversely, as is evident from the foregoing, an
order by the trial court fixing just compensation does
not affect a prior order of expropriation. As applied to
the case at bar, Cebu City can no longer ask for
modification of the judgment, much less, withdraw its
complaint, after it failed to appeal even the first stage
of the expropriation proceedings.
Cebu City is adamant, however, that it should be
allowed to withdraw its complaint as the just
compensation fixed by the RTC is too high, and the
intended expropriation of the Spouses Ortegas’
property is dependent on whether Cebu City would
have sufficient funds to pay for the same.
We cannot subscribe to Cebu City’s ridiculous
contention.
It is well-settled in jurisprudence that the
determination of just compensation is a judicial
prerogative.7 In Export Processing Zone Authority v.
Dulay,8 we declared:
The determination of "just compensation" in eminent
domain cases is a judicial function. The executive
department or the legislature may make the initial
determinations but when a party claims a violation of
the guarantee in the Bill of Rights that private
property may not be taken for public use without just
compensation, no statute, decree, or executive order
can mandate that its own determination shall prevail
over the court’s findings. Much less can the courts
be precluded from looking into the "just-ness" of the
decreed compensation.
We, therefore, hold that P.D. No. 1533, which
eliminates the court’s discretion to appoint
commissioners pursuant to Rule 67 of the Rules of
Court, is unconstitutional and void. To hold otherwise
would be to undermine the very purpose why this
Court exists in the first place.
Likewise, in the recent cases of National Power
Corporation v. dela Cruz9 and Forfom Development
Corporation v. Philippine National Railways,10 we
emphasized the primacy of judicial prerogative in the
ascertainment of just compensation as aided by the
appointed commissioners, to wit:
Though the ascertainment of just compensation is a
judicial prerogative, the appointment of
commissioners to ascertain just compensation for
the property sought to be taken is a mandatory
requirement in expropriation cases. While it is true
that the findings of commissioners may be
disregarded and the trial court may substitute its own
estimate of the value, it may only do so for valid
reasons; that is, where the commissioners have
applied illegal principles to the evidence submitted to
them, where they have disregarded a clear
preponderance of evidence, or where the amount
allowed is either grossly inadequate or excessive.
Thus, "trial with the aid of the commissioners is a
substantial right that may not be done away with
capriciously or for no reason at all."
As regards the second issue raised by the Spouses
Ortega, we quote with favor the CA’s disquisition
thereon, to wit:
While the claim of [the Spouses Ortega] against
[Cebu City] is valid, the [RTC] cannot, by itself, order
the City Council of [Cebu City] to enact an
appropriation ordinance in order to satisfy its
judgment.
The proper remedy of [the Spouses Ortega] is to file
a mandamus case against [Cebu City] in order to
compel its Sangguniang Panglungsod to enact an
appropriation ordinance for the satisfaction of [the
Spouses Ortega’s] claim. This remedy is provided in
the case of Municipality of Makati v. Court of
Appeals, which provides:
Nevertheless, this is not to say that private
respondent and PSB are left with no legal recourse.
Where a municipality fails or refuses, without
justifiable reason[s], to effect payment of a final
money judgment rendered against it, the claimant
may avail of the remedy of mandamus in order to
compel the enactment and approval of the necessary
appropriation ordinance, and the corresponding
disbursement of municipal funds therefor. x x x.
xxxx
The Sangguniang Panglungsod of [Cebu City]
enacted Ordinance No. 1519, appropriating the sum
of ₱3,284,400.00 for payment of just compensation
for the expropriated land, chargeable to Account No.
101-8918-334.
Pursuant to such ordinance, the [RTC] issued an
order dated March 11, 2002, which was the basis for
the issuance of the Writ of Garnishment, garnishing
[Cebu City’s] bank account with Philippine Postal
Bank.
However, Philippine Postal Bank issued a
Certification dated February 7, 2005, certifying that
Account No. 8-93-310 (Continuing Account) and
Account No. 101-8918-334 intended for purchase of
lot for various projects are not bank account
numbers with Philippine Postal Bank.
It is a settled rule that government funds and
properties may not be seized under writs of
execution or garnishment to satisfy judgments,
based on obvious consideration of public policy.
Disbursements of public funds must be covered by
the corresponding appropriation as required by law.
The functions and public services rendered by the
State cannot be allowed to be paralyzed or disrupted
by the diversion of public funds from their legitimate
and specific objects, as appropriated by law.
In Municipality of Makati v. Court of Appeals, x x x
where the Municipality of Makati enacted an
ordinance appropriating certain sum of money as
payment for the land the municipality expropriated,
chargeable to Account No. S/A 265-537154-3
deposited in PNB Buendia Branch, the Supreme
Court held that the trial court has no authority to
garnish the Municipality’s other bank
account (Account No. S/A 263-530850-7) in order to
cover the deficiency in Account No. S/A 265-537154-
3, even if both accounts are in the same branch of
the PNB. In said case, the Supreme Court held:
Absent any showing that the municipal council of
Makati has passed an ordinance appropriating from
its public funds an amount corresponding to the
balance due under the RTC decision dated June 4,
1987, less the sum of ₱99,743.94 deposited in
Account No. S/A 265-537154-3, no levy under
execution may be validly effected on the public funds
of petitioner deposited in Account No. S/A 263-
530850-7.
The foregoing rules find application in the case at
bar. While the Sangguniang Panglungsod of
petitioner enacted Ordinance No. 1519 appropriating
the sum of ₱3,284,400.00 for payment of just
compensation for the expropriated land, such
ordinance cannot be considered as a source of
authority for the [RTC] to garnish [Cebu City’s] bank
account with Philippine Postal Bank, which was
already appropriated for another purpose. [Cebu SO ORDERED.
City’s] account with Philippine Postal Bank was not
specifically opened for the payment of just
compensation nor was it specifically appropriated by
Ordinance No. 1519 for such purpose. Said account,
therefore, is exempt from garnishment. 1av vphi1

Since the [RTC] has no authority to garnish [Cebu

City’s] other bank accounts in order to satisfy its
judgment, consequently, it has no authority to order
the release of [Cebu City’s] other deposits with
Philippine Postal Bank x x x.11

Even assuming that Cebu City Ordinance No. 1519

actually appropriated the amount of ₱3,284,400.00
for payment of just compensation ─ thus, within the
reach of a writ of garnishment issued by the trial
court12 ─ there remains the inescapable fact that the
Philippine Postal Bank account referred to in the
ordinance does not actually exist, as certified to by
the Bank. Accordingly, no writ of garnishment may
be validly issued against such non-existent account
with Philippine Postal Bank. This circumstance
translates to a situation where there is no valid
appropriation ordinance.

WHEREFORE, the petitions in G.R. Nos. 181562-63

and 181583-84 are hereby DENIED. The Decision of
the Court of Appeals in CA-G.R. SP Nos. 80187 and
00147 is AFFIRMED. No pronouncement as to
costs.
 Republic of the Philippines Appeals (CA) in the similarly consolidated petitions
SUPREME COURT docketed as CA-G.R. SP No. 80187 and CA-G.R.
Manila SP No. 00147, respectively.1

THIRD DIVISION The facts, summarized by the CA, follow.

G.R. No. 181562-63 October 2, 2009 Spouses Ciriaco and Arminda Ortega x x x are the
registered owners of a parcel of land known as Lot
SPOUSES CIRIACO and ARMINDA No. 310-B, situated in Hipodromo, Cebu City, with an
ORTEGA, Petitioners, area of 5,712 square meters and covered by
vs. Transfer Certificate of Title No. 113311, issued by
CITY OF CEBU, Respondent. the Register of Deeds of the City of Cebu.

x - - - - - - - - - - - - - - - - - - - - - - -x One-half of the above described land is occupied by

squatters. On September 24, 1990, [the Spouses
G.R. No. 181583-84 Ortega] filed an ejectment case against the squatters
before the Municipal Trial Court in Cities (MTCC) of
CITY OF CEBU, Petitioner, Cebu City, which rendered decision in favor of [the
vs. spouses Ortega]. The case eventually reached the
SPOUSES CIRIACO and ARMINDA Supreme Court, which affirmed the decision of the
ORTEGA, Respondents. MTCC. The decision of the MTCC became final and
executory, and a writ of execution was issued on
DECISION February 1, 1994.
NACHURA, J.: On May 23, 1994, the Sangguniang Panglungsod of
[Cebu City] enacted City Ordinance No. 1519, giving
These are consolidated petitions for review on authority to the City Mayor to expropriate one-half
certiorari filed by petitioners Ciriaco and Arminda (1/2) portion (2,856 square meters) of [the spouses
Ortega (Spouses Ortega) in G.R. Nos. 181562-63 Ortega’s] land (which is occupied by the squatters),
and petitioner City of Cebu (Cebu City) in G.R. Nos. and appropriating for that purpose the amount of
181583-84 assailing the Decision of the Court of ₱3,284,400.00 or at the price of ONE THOUSAND
ONE HUNDRED FIFTY PESOS (₱1,150.00) per
square meter. The amount will be charged against
Account No. 8-93-310, Continuing Appropriation,
Account No. 101-8918-334, repurchase of lots for
various projects. The value of the land was
determined by the Cebu City Appraisal Committee in
Resolution No. 19, series of 1994, dated April 15,
1994.
Pursuant to said ordinance, [Cebu City] filed a
Complaint for Eminent Domain [before the Regional
Trial Court (RTC), Branch 23, Cebu City] against [the
spouses Ortega], docketed as Civil Case No. CEB-
16577.
On March 13, 1998, the [RTC] issued an order
declaring that [Cebu City] "has the lawful right to take
the property subject of the instant case, for public
use or purpose described in the complaint upon
payment of just compensation."
Based on the recommendation of the appointed
Commissioners (one of whom was the City Assessor
of [Cebu City], the [RTC] issued another Order dated
May 21, 1999, fixing the value of the land subject to
expropriation at ELEVEN THOUSAND PESOS
(₱11,000.00) per square meter and ordering [Cebu
City] to pay [Spouses Ortega] the sum of THIRTY
ONE MILLION AND FOUR HUNDRED SIXTEEN
THOUSAND PESOS (₱31,416,000.00) as just
compensation for the expropriated portion of Lot No.
310-B.
The Decision of the [RTC] became final and
executory because of [Cebu City’s] failure to perfect
an appeal on time, and a Writ of Execution was
issued on September 17, 1999 to enforce the court’s
judgment. Upon motion of [the Spouses Ortega], the
[RTC] issued an Order dated March 11, 2002,
quoted as follows:
"Reading of the aforestated resolution shows that the
City Council of Cebu approved Ordinance No. 1519
appropriating the sum of ₱3,284,400.00 for payment
of the subject lot chargeable to Account No. 101-
8918-334.
"In view thereof, the above-mentioned sum is now
subject for execution or garnishment for the same is
no longer exempt from execution."
[Cebu City] filed an Omnibus Motion to Stay
Execution, Modification of Judgment and Withdrawal
of the Case, contending that the price set by the
[RTC] as just compensation to be paid to [the
Spouses Ortega] is way beyond the reach of its
intended beneficiaries for its socialized housing
program. The motion was denied by the [RTC].
[Cebu City’s] Motion for Reconsideration was
likewise denied.
By virtue of the Order of the [RTC], dated July 2,
2003, x x x Sheriff Benigno B. Reas[,] Jr. served a
Notice of Garnishment to Philippine Postal Bank, P.
del Rosario and Junquera Branch Cebu City,
garnishing [Cebu City’s] bank deposit therein.
Hence, [Cebu City] filed the instant Petition for
Certiorari before [the CA] (CA-G.R. SP NO. 80187).
During the pendency of x x x CA-G.R. SP NO.
80187, [Cebu City] filed before the [RTC] a Motion to
Dissolve, Quash or Recall the Writ of Garnishment,
contending that Account No. 101-8918-334
mentioned in Ordinance No. 1519 is not actually an
existing bank account and that the garnishment of
[Cebu City’s] bank account with Philippine Postal
Bank was illegal, because government funds and
properties may not be seized under writ of execution
or garnishment to satisfy such judgment, on obvious
reason of public policy. The [RTC] issued an Order
dated March 8, 2004, denying said motion. [Cebu
City’s] Motion for Reconsideration was also denied.
[The Spouses Ortega] filed an Ex-Parte Motion to
Direct the New Manager of Philippine Postal Bank to
Release to the Sheriff the Garnished Amount, which
was granted by the [RTC]. [Cebu City] filed a Motion
for Reconsideration, but the same was denied.
Hence, [Cebu City] filed another Petition for
Certiorari (CA-G.R. SP NO. 00147) [with the Court of
Appeals].2
Ruling on the petitions for certiorari, the CA disposed
of the cases, to wit:
WHEREFORE, all the foregoing premises
considered, the instant Petitions for Certiorari are
hereby PARTIALLY GRANTED. The assailed Orders
of the [RTC] [Assailed Orders dated March 11, 2002
and July 2, 2003, respectively, in CA-G.R SP NO.
80187] are hereby ANNULLED AND SET ASIDE
insofar as they denied [Cebu City’s] Motion to Stay
Execution, but they are hereby AFFIRMED insofar
as they denied [Cebu City’s] Motion to Modify
Judgment and Withdraw from the Expropriation
Proceedings. Furthermore, the assailed Orders of
the [RTC dated March 8, 2004 in CA-G.R. SP NO.
00147] are hereby ANNULLED AND SET ASIDE.
Let the Decision of the [RTC] be executed in a
manner prescribed by applicable law and
jurisprudence.
SO ORDERED.3
Hence, these consolidated appeals by petitioners
Cebu City and the Spouses Ortega positing the
following issues:
 1. Whether the CA erred in affirming the RTC’s
denial of Cebu City’s Omnibus Motion to
Modify Judgment and to be Allowed to
Withdraw from the Expropriation Proceedings.
2. Whether the deposit of Cebu City with the
Philippine Postal Bank, appropriated for a
different purpose by its Sangguniang
Panglungsod, can be subject to garnishment
as payment for the expropriated lot covered by
City Ordinance No. 1519.
We deny both petitions.
On the first issue, the CA did not err in affirming the
RTC’s Order that the expropriation case had long
been final and executory. Consequently, both the
Order of expropriation and the Order fixing just
compensation by the RTC can no longer be
modified. In short, Cebu City cannot withdraw from
the expropriation proceedings.
Section 4, Rule 67 of the Rules of Court on
Expropriation provides:
SEC. 4. Order of expropriation. – If the objections to
and the defenses against the right of the plaintiff to
expropriate the property are overruled, or when no
party appears to defend as required by this Rule, the
court may issue an order of expropriation declaring
that the plaintiff has a lawful right to take the property
sought to be expropriated, for the public use or
purpose described in the complaint, upon the
payment of just compensation to be determined as of
the date of the taking of the property or the filing of
the complaint, whichever came first.
A final order sustaining the right to expropriate the
property may be appealed by any party aggrieved
thereby. Such appeal, however, shall not prevent the
court from determining the just compensation to be
paid.
After the rendition of such an order, the plaintiff shall
not be permitted to dismiss or discontinue the
proceeding except on such terms as the court deems
just and equitable.
Plainly, from the aforequoted provision, expropriation
proceedings speak of two (2) stages, i.e.:
1. Determination of the authority of the plaintiff
to exercise the power of eminent domain and
the propriety of its exercise in the context of
the facts involved in the suit. This ends with an
order, if not of dismissal of the action, of
condemnation [or order of expropriation]
declaring that the plaintiff has the lawful right
to take the property sought to be condemned,
for the public use or purpose described in the
complaint, upon the payment of just
 compensation to be determined as of the date
of the filing of the complaint; and
2. Determination by the court of the just
compensation for the property sought to be
taken.4
We held in the recent case of Republic v. Phil-Ville
Development and Housing Corporation5 that:
[A]n order of expropriation denotes the end of the
first stage of expropriation. Its end then paves the
way for the second stage—the determination of just
compensation, and, ultimately, payment. An order of
expropriation puts an end to any ambiguity regarding
the right of the petitioner to condemn the
respondents’ properties. Because an order of
expropriation merely determines the authority to
exercise the power of eminent domain and the
propriety of such exercise, its issuance does not
hinge on the payment of just compensation. After all,
there would be no point in determining just
compensation if, in the first place, the plaintiff’s right
to expropriate the property was not first clearly
established.6
Conversely, as is evident from the foregoing, an
order by the trial court fixing just compensation does
not affect a prior order of expropriation. As applied to
the case at bar, Cebu City can no longer ask for
modification of the judgment, much less, withdraw its
complaint, after it failed to appeal even the first stage
of the expropriation proceedings.
Cebu City is adamant, however, that it should be
allowed to withdraw its complaint as the just
compensation fixed by the RTC is too high, and the
intended expropriation of the Spouses Ortegas’
property is dependent on whether Cebu City would
have sufficient funds to pay for the same.
We cannot subscribe to Cebu City’s ridiculous
contention.
It is well-settled in jurisprudence that the
determination of just compensation is a judicial
prerogative.7 In Export Processing Zone Authority v.
Dulay,8 we declared:
The determination of "just compensation" in eminent
domain cases is a judicial function. The executive
department or the legislature may make the initial
determinations but when a party claims a violation of
the guarantee in the Bill of Rights that private
property may not be taken for public use without just
compensation, no statute, decree, or executive order
can mandate that its own determination shall prevail
over the court’s findings. Much less can the courts
be precluded from looking into the "just-ness" of the
decreed compensation.
We, therefore, hold that P.D. No. 1533, which
eliminates the court’s discretion to appoint
commissioners pursuant to Rule 67 of the Rules of
Court, is unconstitutional and void. To hold otherwise
would be to undermine the very purpose why this
Court exists in the first place.
Likewise, in the recent cases of National Power
Corporation v. dela Cruz9 and Forfom Development
Corporation v. Philippine National Railways,10 we
emphasized the primacy of judicial prerogative in the
ascertainment of just compensation as aided by the
appointed commissioners, to wit:
Though the ascertainment of just compensation is a
judicial prerogative, the appointment of
commissioners to ascertain just compensation for
the property sought to be taken is a mandatory
requirement in expropriation cases. While it is true
that the findings of commissioners may be
disregarded and the trial court may substitute its own
estimate of the value, it may only do so for valid
reasons; that is, where the commissioners have
applied illegal principles to the evidence submitted to
them, where they have disregarded a clear
preponderance of evidence, or where the amount
allowed is either grossly inadequate or excessive.
Thus, "trial with the aid of the commissioners is a
substantial right that may not be done away with
capriciously or for no reason at all."
As regards the second issue raised by the Spouses
Ortega, we quote with favor the CA’s disquisition
thereon, to wit:
While the claim of [the Spouses Ortega] against
[Cebu City] is valid, the [RTC] cannot, by itself, order
the City Council of [Cebu City] to enact an
appropriation ordinance in order to satisfy its
judgment.
The proper remedy of [the Spouses Ortega] is to file
a mandamus case against [Cebu City] in order to
compel its Sangguniang Panglungsod to enact an
appropriation ordinance for the satisfaction of [the
Spouses Ortega’s] claim. This remedy is provided in
the case of Municipality of Makati v. Court of
Appeals, which provides:
Nevertheless, this is not to say that private
respondent and PSB are left with no legal recourse.
Where a municipality fails or refuses, without
justifiable reason[s], to effect payment of a final
money judgment rendered against it, the claimant
may avail of the remedy of mandamus in order to
compel the enactment and approval of the necessary
appropriation ordinance, and the corresponding
disbursement of municipal funds therefor. x x x.
xxxx
The Sangguniang Panglungsod of [Cebu City]
enacted Ordinance No. 1519, appropriating the sum
of ₱3,284,400.00 for payment of just compensation
for the expropriated land, chargeable to Account No.
101-8918-334.
Pursuant to such ordinance, the [RTC] issued an
order dated March 11, 2002, which was the basis for
the issuance of the Writ of Garnishment, garnishing
[Cebu City’s] bank account with Philippine Postal
Bank.
However, Philippine Postal Bank issued a
Certification dated February 7, 2005, certifying that
Account No. 8-93-310 (Continuing Account) and
Account No. 101-8918-334 intended for purchase of
lot for various projects are not bank account
numbers with Philippine Postal Bank.
It is a settled rule that government funds and
properties may not be seized under writs of
execution or garnishment to satisfy judgments,
based on obvious consideration of public policy.
Disbursements of public funds must be covered by
the corresponding appropriation as required by law.
The functions and public services rendered by the
State cannot be allowed to be paralyzed or disrupted
by the diversion of public funds from their legitimate
and specific objects, as appropriated by law.
In Municipality of Makati v. Court of Appeals, x x x
where the Municipality of Makati enacted an
ordinance appropriating certain sum of money as
payment for the land the municipality expropriated,
chargeable to Account No. S/A 265-537154-3
deposited in PNB Buendia Branch, the Supreme
Court held that the trial court has no authority to
garnish the Municipality’s other bank
account (Account No. S/A 263-530850-7) in order to
cover the deficiency in Account No. S/A 265-537154-
3, even if both accounts are in the same branch of
the PNB. In said case, the Supreme Court held:
Absent any showing that the municipal council of
Makati has passed an ordinance appropriating from
its public funds an amount corresponding to the
balance due under the RTC decision dated June 4,
1987, less the sum of ₱99,743.94 deposited in
Account No. S/A 265-537154-3, no levy under
execution may be validly effected on the public funds
of petitioner deposited in Account No. S/A 263-
530850-7.
The foregoing rules find application in the case at
bar. While the Sangguniang Panglungsod of
petitioner enacted Ordinance No. 1519 appropriating
the sum of ₱3,284,400.00 for payment of just
compensation for the expropriated land, such
ordinance cannot be considered as a source of
authority for the [RTC] to garnish [Cebu City’s] bank
account with Philippine Postal Bank, which was
already appropriated for another purpose. [Cebu
City’s] account with Philippine Postal Bank was not
specifically opened for the payment of just
compensation nor was it specifically appropriated by
Ordinance No. 1519 for such purpose. Said account,
therefore, is exempt from garnishment. 1av vphi1
Since the [RTC] has no authority to garnish [Cebu
City’s] other bank accounts in order to satisfy its
judgment, consequently, it has no authority to order
the release of [Cebu City’s] other deposits with
Philippine Postal Bank x x x.11
Even assuming that Cebu City Ordinance No. 1519
actually appropriated the amount of ₱3,284,400.00
for payment of just compensation ─ thus, within the
reach of a writ of garnishment issued by the trial
court12 ─ there remains the inescapable fact that the
Philippine Postal Bank account referred to in the
ordinance does not actually exist, as certified to by
the Bank. Accordingly, no writ of garnishment may
be validly issued against such non-existent account
with Philippine Postal Bank. This circumstance
translates to a situation where there is no valid
appropriation ordinance.
WHEREFORE, the petitions in G.R. Nos. 181562-63
and 181583-84 are hereby DENIED. The Decision of
the Court of Appeals in CA-G.R. SP Nos. 80187 and
00147 is AFFIRMED. No pronouncement as to
costs.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 168967 February 12, 2010
CITY OF ILOILO represented by HON. JERRY P.
TREÑAS, City Mayor, Petitioner,
vs.
HON. LOLITA CONTRERAS-BESANA, Presiding
Judge, Regional Trial Court, Branch 32, and
ELPIDIO JAVELLANA, Respondents.
DECISION
DEL CASTILLO, J.:
It is arbitrary and capricious for the government to
initiate expropriation proceedings, seize a person’s
property, allow the order of expropriation to become
final, but then fail to justly compensate the owner for
over 25 years. This is government at its most high-
handed and irresponsible, and should be
condemned in the strongest possible terms. For its
failure to properly compensate the landowner, the
City of Iloilo is liable for damages.
This Petition for Certiorari under Rule 65 of the Rules
of Court with a prayer for the issuance of a
temporary restraining order seeks to overturn the
three Orders issued by Regional Trial Court (RTC) of
Iloilo City, Branch 32 on the following dates:
December 12, 2003 (the First Assailed Order),1 June
15, 2004 (the Second Assailed Order),2 and March 9,
2005 (the Third Assailed Order) (the three
aforementioned Orders are collectively referred to as
the Assailed Orders).3
Factual Antecedents
The essential facts are not in dispute.
On September 18, 1981, petitioner filed a
Complaint4 for eminent domain against private
respondent Elpidio T. Javellana (Javellana) and
Southern Negros Development Bank, the latter as
mortgagee. The complaint sought to expropriate two
parcels of land known as Lot Nos. 3497-CC and
3497-DD registered in Javellana’s name under
Transfer Certificate of Title (TCT) No. T-44894 (the
Subject Property) to be used as a school site for
Lapaz High School.5 Petitioner alleged that the
Subject Property was declared for tax purposes in
Tax Declaration No. 40080 to have a value of ₱60.00
per square meter, or a total value of ₱43,560.00. The
case was docketed as Civil Case No. 14052 and
raffled to then Court of First Instance of Iloilo, Branch
7.
On December 9, 1981, Javellana filed
his Answer6 where he admitted ownership of the
Subject Property but denied the petitioner’s avowed
public purpose of the sought-for expropriation, since
the City of Iloilo already had an existing school site
for Lapaz High School. Javellana also claimed that
the true fair market value of his property was no less
than ₱220.00 per square meter. 7
On May 11, 1982, petitioner filed a Motion for
Issuance of Writ of Possession, alleging that it had
deposited the amount of ₱40,000.00 with the
Philippine National Bank-Iloilo Branch. Petitioner
claimed that it was entitled to the immediate
possession of the Subject Property, citing Section 1
of Presidential Decree No. 1533,8 after it had
deposited an amount equivalent to 10% of the
amount of compensation. Petitioner attached to its
motion a Certification issued by Estefanio C. Libutan,
then Officer-in-Charge of the Iloilo City Treasurer’s
Office, stating that said deposit was made.9
Javellana filed an Opposition to the Motion for the
Issuance of Writ of Possession10 citing the same
grounds he raised in his Answer – that the city
already had a vast tract of land where its existing
school site was located, and the deposit of a mere
10% of the Subject Property’s tax valuation was
grossly inadequate.
On May 17, 1983, the trial court issued an
Order11 which granted petitioner’s Motion for
Issuance of Writ of Possession and authorized the
petitioner to take immediate possession of the
Subject Property. The court ruled:
Premises considered, the Motion for the Issuance of
a Writ of Possession dated May 10, 1982, filed by
plaintiff is hereby granted. Plaintiff is hereby allowed
to take immediate possession, control and
disposition of the properties known as Lot Nos.
3497-CC and 3497-DD x x x.12
Thereafter, a Writ of Possession13 was issued in
petitioner’s favor, and petitioner was able to take
physical possession of the properties sometime in
the middle of 1985. At no time has Javellana ever
denied that the Subject Property was actually used
as the site of Lapaz National High School. Aside
from the filing by the private respondent of
his Amended Answer on April 21, 1984,14 the
expropriation proceedings remained dormant.
Sixteen years later, on April 17, 2000, Javellana filed
an Ex Parte Motion/Manifestation, where he alleged
that when he finally sought to withdraw the
₱40,000.00 allegedly deposited by the petitioner, he
discovered that no such deposit was ever made. In
support of this contention, private respondent
presented a Certification from the Philippine National
Bank stating that no deposit was ever made for the
expropriation of the Subject Property.15 Private
respondent thus demanded his just compensation as
well as interest. Attempts at an amicable resolution
and a negotiated sale were unsuccessful. It bears
emphasis that petitioner could not present any
evidence – whether documentary or testimonial – to
prove that any payment was actually made to private
respondent.
Thereafter, on April 2, 2003, private respondent filed
a Complaint16 against petitioner for Recovery of
Possession, Fixing and Recovery of Rental and
Damages. The case was docketed as Civil Case No.
03-27571, and raffled to Branch 28 of the Iloilo City
Regional Trial Court. Private respondent alleged that
since he had not been compensated for the Subject
Property, petitioner’s possession was illegal, and he
was entitled to recovery of possession of his lots. He
prayed that petitioner be ordered to vacate the
Subject Property and pay rentals amounting to
₱15,000.00 per month together with moral,
exemplary, and actual damages, as well as
attorney’s fees. 1avv phi1
On May 15, 2003, petitioner filed its
Answer,17 arguing that Javellana could no longer
bring an action for recovery since the Subject
Property was already taken for public use. Rather,
private respondent could only demand for the
payment of just compensation. Petitioner also
maintained that the legality or illegality of petitioner’s
possession of the property should be determined in
the eminent domain case and not in a separate
action for recovery of possession.
Both parties jointly moved to consolidate the
expropriation case (Civil Case No. 14052) and the
case for recovery of possession (Civil Case No. 03-
27571),18 which motion was granted by the trial court
in an Order dated August 26, 2003.19 On November
14, 2003, a commission was created to determine
the just compensation due to Javellana.20
On November 20, 2003, private respondent filed a
Motion/Manifestation dated November 19, 2003
claiming that before a commission is created, the
trial court should first order the condemnation of the
property, in accordance with the Rules of Court.
Javellana likewise insisted that the fair market value
of the Subject Property should be reckoned from the
date when the court orders the condemnation of the
property, and not the date of actual taking, since
petitioner’s possession of the property was
questionable.21 Before petitioner could file its
Comment, the RTC issued an Order dated
November 21, 2003 denying the Motion.22
Undeterred, Javellana filed on November 25, 2003,
an Omnibus Motion to Declare Null and Void the
Order of May 17, 1983 and to Require Plaintiff to
Deposit 10% or ₱254,000.00. Javellana claimed that
the amount is equivalent to the 10% of the fair
market value of the Subject Property, as determined
by the Iloilo City Appraisal Committee in 2001, at the
time when the parties were trying to negotiate a
settlement.23
First Assailed Order
On December 12, 2003, the RTC issued the First
Assailed Order, which nullified the Order dated May
17, 1983 (concerning the issuance of a writ of
possession over the Subject Property). The trial
court ruled:
x x x the Order dated May 17, 1983 is hereby
declared null and void and the plaintiff [is] hereby
ordered to immediately deposit with the PNB the
10% of the just compensation after the Commission
shall have rendered its report and have determined
the value of the property not at the time it was
condemned but at the time the complaint was filed in
court.24 (Emphasis ours)
Second Assailed Order
Neither party sought reconsideration of this
Order.25 Nonetheless, about six months later, the
RTC issued the Second Assailed Order, which it
denominated as an "Amended Order". The Second
Assailed Order was identical to the first, except that
the reckoning point for just compensation was now
the "time this order was issued," which is June 15,
2004.
x x x the Order dated May 17, 1983 is hereby
declared null and void and the plaintiff [is] hereby
ordered to immediately deposit with the PNB the
10% of the just compensation after the Commission
shall have rendered its report and have determined
the value of the property not at the time it was
condemned but at the time this order was
issued. (Underscoring in original text)
This time, petitioner filed a Motion for
Reconsideration claiming that there was no legal
basis for the issuance of the Second Assailed
Order.26 Javellana opposed, arguing that since the
May 17, 1983 Order and the Second Assailed Order
were interlocutory in character, they were always
subject to modification and revision by the court
anytime.27
Third Assailed Order
After the parties were able to fully ventilate their
respective positions,28 the public respondent issued
the Third Assailed Order, denying the Motion for
Reconsideration, and ruling as follows:
The Order dated June 15, 2004 among other things
stated that parties and counsels must be bound by
the Commissioner’s Report regarding the value of
the property not at the time it was condemned but at
the time this order was issued.
This is true inasmuch as there was no deposit at the
PNB and their taking was illegal.
The plaintiff thru [sic] Atty. Laurea alleged that this
Court had a change of heart and issued an Amended
Order with the same wordings as the order of
December 12, 2003 but this time stated not at the
time it was condemned but at the time the order was
issued. Naturally, this Court in the interest of justice,
can amend its order because there was no deposit
by plaintiff.
The jurisprudence cited by plaintiff that the just
compensation must be determined as of the date of
the filing of the complaint is true if there was a
deposit. Because there was none the filing was not
in accordance with law, hence, must be at the time
the order was issued.
The allegation of defendant thru [sic] counsel that the
orders attacked by plaintiff thru [sic] counsel saying it
has become final and executory are interlocutory
orders subject to the control of the Judge until final
judgment is correct. Furthermore, it is in the interes[t]
of justice to correct errors.29
In the meantime, on April 15, 2004, the Commission
submitted its Report, providing the following
estimates of value, but without making a proper Petitioner is before us claiming that (1) the trial court
recommendation:30 gravely abused its discretion amounting to lack or
excess of jurisdiction in overturning the Order dated
Reckoning Value per Fair Market May 17, 1983, which was already a final order; and
Basis
(2) just compensation for the expropriation should be
Point square meter Value
based on the Subject Property’s fair market value
1981 - at the based
either on three
at the or more
time of taking or filing of the complaint.
time the recorded sales of similar
₱110.00/sqm ₱79,860.00
complaint Private
types ofRespondent’s
land in the Arguments
was filed vicinity in the same year
Private respondent filed his Comment on October 3,
Appraisal by Southern
2005,31 arguing that (1) there was no error of
Negros Development
1981 – at the jurisdiction correctible by certiorari; and (2) that the
Bank based
Assailed on market
Orders were interlocutory orders that were
time the
₱686.81/sqm ₱498,625.22 value, to
subject zonal value, and nullification at the
amendment
complaint
appraised
discretionvalue
of theofcourt.
other
was filed
banks, recent selling
price of neighboring lots Issues
Appraisal by the City
There are Committee,
Appraisal only two questions we need answer, and
2002 ₱3,500.00/sqm ₱2,541,000.00 they are not at all novel. First, does an order of
Office of the City
expropriation
Assessorbecome final? Second, what is the
correct reckoning point for the determination of just
Private Appraisal Report
compensation?
(Atty. Roberto Cal
2004 ₱4,200.00/sqm ₱hP3,049,200.00
Catolico dated April 6,Our Ruling
2004)
Expropriation proceedings have two stages. The first
Hence, the present petition. phase ends with an order of dismissal, or a
determination that the property is to be acquired for a
Petitioner’s Arguments public purpose.32 Either order will be a final order that
may be appealed by the aggrieved party.33 The
second phase consists of the determination of just
compensation. 34 It ends with an order fixing the
amount to be paid to the landowner. Both orders,
being final, are appealable.35
An order of condemnation or dismissal is final,
resolving the question of whether or not the plaintiff
has properly and legally exercised its power of
eminent domain.36 Once the first order becomes final
and no appeal thereto is taken, the authority to
expropriate and its public use can no longer be
questioned.37 1avvphi1
Javellana did not bother to file an appeal from the
May 17, 1983 Order which granted
petitioner’s Motion for Issuance of Writ of
Possession and which authorized petitioner to take
immediate possession of the Subject Property. Thus,
it has become final, and the petitioner’s right to
expropriate the property for a public use is no longer
subject to review. On the first question, therefore, we
rule that the trial court gravely erred in nullifying the
May 17, 1983 Order.
We now turn to the reckoning date for the
determination of just compensation. Petitioner claims
that the computation should be made as of
September 18, 1981, the date when the
expropriation complaint was filed. We agree.
In a long line of cases, we have constantly affirmed
that:
x x x just compensation is to be ascertained as of the
time of the taking, which usually coincides with the
commencement of the expropriation proceedings.
Where the institution of the action precedes entry
into the property, the just compensation is to be
ascertained as of the time of the filing of the
complaint.38
When the taking of the property sought to be
expropriated coincides with the commencement of
the expropriation proceedings, or takes place
subsequent to the filing of the complaint for eminent
domain, the just compensation should be determined
as of the date of the filing of the complaint.39 Even
under Sec. 4, Rule 67 of the 1964 Rules of
Procedure, under which the complaint for
expropriation was filed, just compensation is to be
determined "as of the date of the filing of the
complaint." Here, there is no reason to depart from
the general rule that the point of reference for
assessing the value of the Subject Property is the
time of the filing of the complaint for expropriation.40
Private respondent claims that the reckoning date
should be in 2004 because of the "clear injustice to
the private respondent who all these years has been
deprived of the beneficial use of his properties."
We commiserate with the private respondent. The
school was constructed and has been in operation
since 1985. Petitioner and the residents of Iloilo City
have long reaped the benefits of the property.
However, non-payment of just compensation does
not entitle the private landowners to recover
possession of their expropriated lot.41
Concededly, Javellana also slept on his rights for
over 18 years and did not bother to check with the
PNB if a deposit was actually made by the petitioner.
Evidently, from his inaction in failing to withdraw or
even verify the amounts purportedly deposited,
private respondent not only accepted the valuation
made by the petitioner, but also was not interested
enough to pursue the expropriation case until the
end. As such, private respondent may not recover
possession of the Subject Property, but is entitled to
just compensation.42 It is high time that private
respondent be paid what was due him after almost
30 years.
We stress, however, that the City of Iloilo should be
held liable for damages for taking private
respondent’s property without payment of just
compensation. In Manila International Airport
Authority v. Rodriguez,43 the Court held that a
government agency’s prolonged occupation of
private property without the benefit of expropriation
proceedings undoubtedly entitled the landowner to
damages:
Such pecuniary loss entitles him to adequate
compensation in the form of actual or
compensatory damages, which in this case
should be the legal interest (6%) on the value of
the land at the time of taking, from said point up
to full payment by the MIAA. This is based on the
principle that interest "runs as a matter of law and
follows from the right of the landowner to be placed
in as good position as money can accomplish, as of
the date of the taking x x x.
xxxx
For more than twenty (20) years, the MIAA occupied
the subject lot without the benefit of expropriation
proceedings and without the MIAA exerting efforts to
ascertain ownership of the lot and negotiating with
any of the owners of the property. To our
mind, these are wanton and irresponsible acts
which should be suppressed and corrected.
Hence, the award of exemplary damages and
attorneys fees is in order. x x x.44 (Emphasis
supplied)
WHEREFORE, the petition is GRANTED. The
Orders of the Regional Trial Court of Iloilo City,
Branch 32 in Civil Case No. 14052 and Civil Case
No. 03-27571 dated December 12, 2003, June 15,
2004, and March 9, 2005 are hereby ANNULLED
and SET ASIDE.
The Regional Trial Court of Iloilo City, Branch 32 is Republic of the Philippines
DIRECTED to immediately determine the just SUPREME COURT
compensation due to private respondent Elpidio T. Manila
Javellana based on the fair market value of the
Subject Property at the time Civil Case No. 14052 FIRST DIVISION
was filed, or on September 18, 1981 with interest at
the legal rate of six percent (6%) per annum from the G.R. No. 170375 July 7, 2010
time of filing until full payment is made.
REPUBLIC OF THE PHILIPPINES, Petitioner,
The City of Iloilo is ORDERED to pay private vs.
respondent the amount of ₱200,000.00 as HON. MAMINDIARA P. MANGOTARA, in his
exemplary damages. capacity as Presiding Judge of the Regional Trial
Court, Branch 1, Iligan City, Lanao del Norte, and
SO ORDERED. MARIA CRISTINA FERTILIZER CORPORATION,
and the PHILIPPINE NATIONAL
BANK, Respondents,

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

G.R. No. 170505

LAND TRADE REALTY

CORPORATION, Petitioner,
vs.
NATIONAL POWER CORPORATION and
NATIONAL TRANSMISSION CORPORATION
(TRANSCO), Respondents,

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

G.R. Nos. 173355-56

NATIONAL POWER CORPORATION, Petitioner, G.R. No. 178779
vs.
HON. COURT OF APPEALS (Special Twenty- LAND TRADE REALTY
Third Division, Cagayan de Oro City), and LAND CORPORATION, Petitioner,
TRADE REALTY CORPORATION, Respondents, vs.
DEMETRIA CONFESOR VIDAL and AZIMUTH
x - - - - - - - - - - - - - - - - - - - - - - -x INTERNATIONAL DEVELOPMENT
CORPORATION, Respondents,
G.R. No. 173401
x - - - - - - - - - - - - - - - - - - - - - - -x
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs. G.R. No. 178894
DEMETRIA CACHO, represented by alleged Heirs
DEMETRIA CONFESOR VIDAL and/or TEOFILO TEOFILO CACHO and/or ATTY. GODOFREDO
CACHO, AZIMUTH INTERNATIONAL CABILDO, Petitioner,
DEVELOPMENT CORPORATION and LAND vs.
TRADE REALTY CORPORATION, Respondents. DEMETRIA CONFESOR VIDAL and AZIMUTH
INTERNATIONAL DEVELOPMENT
x - - - - - - - - - - - - - - - - - - - - - - -x CORPORATION, Respondents.

G.R. Nos. 173563-64 DECISION

NATIONAL TRANSMISSION LEONARDO-DE CASTRO, J.:

CORPORATION, Petitioner,
vs.
HON. COURT OF APPEALS (Special Twenty-
Third Division, Cagayan de Oro City), and LAND
TRADE REALTY CORPORATION as represented
by Atty. Max C. Tabimina, Respondents,
x - - - - - - - - - - - - - - - - - - - - - - -x
Before the Court are seven consolidated Petitions for
Review on Certiorari and a Petition for Certiorari
under Rules 45 and 65 of the Rules of Court,
respectively, arising from actions for quieting of title,
expropriation, ejectment, and reversion, which all
involve the same parcels of land.
In G.R. No. 170375, the Republic of the Philippines
(Republic), by way of consolidated Petitions for
Review on Certiorari and for Certiorari under Rules
45 and 65 of the Rules of Court, respectively, seeks
to set aside the issuances of Judge Mamindiara P.
Mangotara (Judge Mangotara) of the Regional Trial
Court, Branch 1 (RTC-Branch 1) of Iligan City, Lanao
del Norte, in Civil Case No. 106, particularly, the: (1)
Resolution1 dated July 12, 2005 which, in part,
dismissed the Complaint for Expropriation of the
Republic for the latter’s failure to implead
indispensable parties and forum shopping; and (2)
Resolution2 dated October 24, 2005, which denied
the Partial Motion for Reconsideration of the
Republic.
G.R. Nos. 178779 and 178894 are two Petitions for
Review on Certiorari under Rule 45 of the Rules of
Court, where Landtrade Realty Corporation
(LANDTRADE), Teofilo Cacho, and/or Atty.
Godofredo Cabildo assail the Decision3 dated
January 19, 2007 and Resolution4 dated July 4, 2007
of the Court of Appeals in CA-G.R. CV No. 00456.
The Court of Appeals affirmed the Decision5 dated
July 17, 2004 of the Regional Trial Court, Branch 3
(RTC-Branch 3) of Iligan City, Lanao del Norte, in
Civil Case No. 4452, granting the Petition for
Quieting of Title, Injunction and Damages filed by
Demetria Vidal and Azimuth International
Development Corporation (AZIMUTH) against
Teofilo Cacho and Atty. Godofredo Cabildo.
G.R. No. 170505 is a Petition for Review on
Certiorari under Rule 45 of the Rules of Court in
which LANDTRADE urges the Court to reverse and
set aside the Decision6 dated November 23, 2005 of
the Court of Appeals in CA-G.R. SP Nos. 85714 and
85841. The appellate court annulled several
issuances of the Regional Trial Court, Branch 5
(RTC-Branch 5) of Iligan City, Lanao del Norte, and
its sheriff, in Civil Case No. 6613, specifically, the:
(1) Order7 dated August 9, 2004 granting the Motion
for Execution Pending Appeal of LANDTRADE; (2)
Writ of Execution8 dated August 10, 2004; (3) two
Notices of Garnishment9 both dated August 11,
2004, and (4) Notification10 dated August 11, 2004.
These issuances of the RTC-Branch 5 allowed
and/or enabled execution pending appeal of the
Decision11 dated February 17, 2004 of the Municipal
Trial Court in Cities (MTCC), Branch 2 of Iligan City,
Lanao del Norte, favoring LANDTRADE in Civil Case
No. 11475-AF, the ejectment case said corporation
instituted against the National Power Corporation
(NAPOCOR) and the National Transmission
Corporation (TRANSCO).
G.R. Nos. 173355-56 and 173563-64 are two
Petitions for Certiorari and Prohibition under Rule 65
of the Rules of Court with prayer for the immediate
issuance of a Temporary Restraining Order (TRO)
and/or Writ of Preliminary Injunction filed separately
by NAPOCOR and TRANSCO. Both Petitions seek
to annul the Resolution12 dated June 30, 2006 of the
Court of Appeals in the consolidated cases of CA-
G.R. SP Nos. 00854 and 00889, which (1) granted
the Omnibus Motion of LANDTRADE for the
issuance of a writ of execution and the designation of
a special sheriff for the enforcement of the
Decision13 dated December 12, 2005 of the RTC-
Branch 1 in Civil Case No. 6613, and (2) denied the
applications of NAPOCOR and TRANSCO for a writ
of preliminary injunction to enjoin the execution of
the same RTC Decision. The Decision dated
December 12, 2005 of RTC-Branch 1 in Civil Case
No. 6613 affirmed the Decision dated February 17,
2004 of the MTCC in Civil Case No. 11475-AF,
favoring LANDTRADE.
G.R. No. 173401 involves a Petition for Review on
Certiorari under Rule 45 of the Rules of Court filed
by the Republic, which raises pure questions of law
and seeks the reversal of the following issuances of
the Regional Trial Court, Branch 4 (RTC-Branch 4)
of Iligan City, Lanao del Norte, in Civil Case No.
6686, an action for cancellation of titles and
reversion: (1) Order14 dated December 13, 2005
dismissing the Complaint in Civil Case No. 6686; and
(2) Order15 dated May 16, 2006, denying the Motion
for Reconsideration of the Republic.
I Alanga, on behalf of Datto Darondon.
THE PRECEDING CASES
The consolidated seven cases have for their
common genesis the 1914 case of Cacho v.
Government of the United States16 (1914 Cacho
case).
The 1914 Cacho Case
Sometime in the early 1900s, the late Doña Demetria
Cacho (Doña Demetria) applied for the registration of
two parcels of land: (1) Lot 1 of Plan II-3732, the
smaller parcel with an area of 3,635 square meters
or 0.36 hectares (Lot 1); and (2) Lot 2 of Plan II-
3732, the larger parcel with an area of 378,707
square meters or 37.87 hectares (Lot 2). Both
parcels are situated in what was then the
Municipality of Iligan, Moro Province, which later
became Sitio Nunucan, then Brgy. Suarez, in Iligan
City, Lanao del Norte. Doña Demetria’s applications
for registration were docketed as GLRO Record Nos.
6908 and 6909.
The application in GLRO Record No. 6908 covered
Lot 1, the smaller parcel of land. Doña Demetria
allegedly acquired Lot 1 by purchase from Gabriel
Salzos (Salzos). Salzos, in turn, bought Lot 1 from
Datto Darondon and his wife Alanga, evidenced by a
deed of sale in favor of Salzos signed solely by
The application in GLRO Record No. 6909 involved
Lot 2, the bigger parcel of land. Doña Demetria
purportedly purchased Lot 2 from Datto Bunglay.
Datto Bunglay claimed to have inherited Lot 2 from
his uncle, Datto Anandog, who died without issue.
Only the Government opposed Doña Demetria’s
applications for registration on the ground that the
two parcels of land were the property of the United
States and formed part of a military reservation,
generally known as Camp Overton.
On December 10, 1912, the land registration court
(LRC) rendered its Decision in GLRO Record Nos.
6908 and 6909.
Based on the evidence, the LRC made the following
findings in GLRO Record No. 6908:
6th. The court is convinced from the proofs that the
small parcel of land sold by the Moro woman Alanga
was the home of herself and her husband,
Darondon, and was their conjugal property; and the
court so finds.
xxxx
As we have seen, the deed on which applicant’s title
to the small parcel rests, is executed only by the
Moro woman Alanga, wife of Datto Darondon, which
is not permitted either by the Moro laws or the Civil
Code of the Philippine Islands. It appears that the
husband of Alanga, Datto Darondon, is alive yet, and
before admitting this parcel to registration it is
ordered that a deed from Datto Darondon, husband
of Alanga, be presented, renouncing all his rights in
the small parcel of land object of Case No. 6908, in
favor of the applicant.17 (Emphases supplied.)
In GLRO Record No. 6909, the LRC observed and
concluded that:
A tract of land 37 hectares in area, which is the
extent of the land under discussion, is larger than is
cultivated ordinarily by the Christian Filipinos. In the
Zamboanga cadastral case of thousands of parcels
now on trial before this court, the average size of the
parcels is not above 3 or 4 hectares, and the court
doubts very much if a Moro with all his family could
cultivate as extensive a parcel of land as the one in
question. x x x
xxxx
The court is also convinced from the proofs that the
small portion in the southern part of the larger parcel,
where, according to the proofs, Datto Anandog had
his house and where there still exist some cocos and
fruit trees, was the home of the said Moro Datto
Anandog; and the court so finds. As to the rest of the
large parcel the court does not find the title of Datto
Bunglay established. According to his own
declaration his residence on this land commenced
only a few days before the sale. He admitted that the
coco trees he is supposed to have planted had not
yet begun to bear fruit at the time of the sale, and
were very small. Datto Duroc positively denies that
Bunglay lived on the land, and it clearly appears that
he was not on the land when it was first occupied by
the military. Nor does Datto Bunglay claim to have
planted the three mango trees by the roadside near
point 25 of the plan. The court believes that all the
rest of this parcel, not occupied nor cultivated by
Datto Anandog, was land claimed by Datto Duroc
and also by Datto Anandog and possibly by other
dattos as a part of their general jurisdiction, and that
it is the class of land that Act No. 718 prohibits the
sale of, by the dattos, without the express approval
of the Government.
It is also found that Datto Bunglay is the nephew of
Dato Anandog, and that the Moro woman Alanga,
grantor of the small parcel, is the sister of Datto
Anandog, and that he died without issue.
xxxx
It appears also that according to the provisions of the
Civil Code as also the provisions of the ‘Luwaran
Code’ of the Moros, the Moro woman Alanga has an
interest in the portion of land left by her deceased
brother, Datto Anandog. By article LXXXV, section 3,
of the ‘Luwaran Code,’ it will be seen that the
brothers and sisters of a deceased Moro inherit his
property to the exclusion of the more distant
relatives. Therefore Datto Bunglay had no legal
interest whatever in the land to sell to the applicant,
Doña Demetria Cacho. But the Moro woman,
Alanga, having appeared as a witness for the
applicant without having made any claim to the land,
the court finds from this fact that she has ratified the
sale made by her nephew.
The court therefore finds that the applicant Doña
Demetria Cacho is owner of the portion of land
occupied and planted by the deceased Datto
Anandog in the southern part of the large parcel
object of expediente No. 6909 only; and her
application as to all the rest of the land solicited in
said case is denied. And it is ordered that a new
survey of the land be made and a corrected plan be
presented, excluding all the land not occupied and
cultivated by Datto Anandog; that said survey be
made and the corrected plan presented on or before
the 30th day of March, 1913, with previous notice to
the commanding general of the Division of the
Philippines.
On the 8th day of December, the court was at Camp
Overton and had another ocular inspection of the
land for the purpose of fixing the limits of the part
cultivated by Datto Anandog, so often mentioned
herein, with previous notice to the applicant and her
husband and representative, Señor Dionisio Vidal.
Having arrived late, Señor Vidal did not assist in the
ocular inspection, which was fixed for 3 o’clock, p.m.
of the day mentioned. But the court, nevertheless,
set stakes marking the N.E., S.E., and S.W. corners
of the land found to have been cultivated by the
deceased Anandog. The N.E. limit of said land is a
brook, and the N.W. corner is the point where the
brook intersects the shore line of the sea, the other
corners mentioned being marked with pine stakes.
And it is ordered that the new survey be made in
accordance with the points mentioned, by tracing
four straight lines connecting these four points.
Between the portion cultivated by Datto Anandog
and the mouth of the River Agus there is a high
steep hill and the court does not believe it possible to
cultivate said hill, it being covered with rocks and
forest.18 (Emphases supplied.)
The LRC additionally decreed at the end of its
December 10, 1912 Decision:
It is further ordered that one-half of the costs of the
new survey be paid by the applicant and the other
half by the Government of the United States, and
that the applicant present the corresponding deed
from Datto Darondon on or before the above-
mentioned 30th day of March, 1913. Final decision in
these cases is reserved until the presentation of the
said deed and the new plan.19
Apparently dissatisfied with the foregoing LRC
judgment, Doña Demetria appealed to this Court. In
its Decision dated December 10, 1914, the Court
affirmed in toto the LRC Decision of December 10,
1912, well satisfied that the findings of fact of the
court below were fully sustained by the evidence
adduced during trial.
Eighty-three years later, in 1997, the Court was
again called upon to settle a matter concerning the
registration of Lots 1 and 2 in the case of Cacho v.
Court of Appeals20 (1997 Cacho case).
The 1997 Cacho Case
On June 29, 1978, Teofilo Cacho (Teofilo), claiming
to be the late Doña Demetria’s son and sole heir,
filed before the RTC a petition for reconstitution of
two original certificates of title (OCTs), docketed
under the original GLRO Record Nos. 6908 and
6909.
Teofilo’s petition was opposed by the Republic,
National Steel Corporation (NSC), and the City of
Iligan.
Acting on the motion for judgment on demurrer to
evidence filed by the Republic and NSC, the RTC
initially dismissed Teofilo’s petition for reconstitution
of titles because there was inadequate evidence to
show the prior existence of the titles sought to be
restored. According to the RTC, the proper remedy
was a petition for the reconstitution of decrees since
"it is undisputed that in Cases No. 6908 and 6909,
Decrees No. 10364 and 18969, respectively, were
issued." Teofilo sought leave of court for the filing
and admission of his amended petition, but the RTC
refused. When elevated to this Court in Cacho v.
Mangotara, docketed as G.R. No. 85495, the Court
resolved to remand the case to the RTC, with an
order to the said trial court to accept Teofilo’s
amended petition and to hear it as one for re-
issuance of decrees.
In opposing Teofilo’s petition, the Republic and NSC
argued that the same suffered from jurisdictional
infirmities; that Teofilo was not the real party-in-
interest; that Teofilo was guilty of laches; that Doña
Demetria was not the registered owner of the subject
parcels of land; that no decrees were ever issued in
Doña Demetria’s name; and that the issuance of the
decrees was dubious and irregular.
After trial, on June 9, 1993, the RTC rendered its
Decision granting Teofilo’s petition and ordering the
reconstitution and re-issuance of Decree Nos. 10364
and 18969. The RTC held that the issuance of
Decree No. 10364 in GLRO No. 6908 on May 9,
1913 and Decree No. 18969 in GLRO Record No.
6909 on July 8, 1915 was sufficiently established by
the certifications and testimonies of concerned
officials. The original issuance of these decrees
presupposed a prior judgment that had become final.
On appeal, the Court of Appeals reversed the RTC
Decision dated June 9, 1993 and dismissed the
petition for re-issuance of Decree Nos. 10364 and
18969 because: (1) re-issuance of Decree No.
18969 in GLRO Record No. 6909 could not be made
in the absence of the new survey ordered by this
Court in the 1914 Cacho case; (2) the heir of a
registered owner may lose his right to recover
possession of the property and title thereto by
laches; and (3) Teofilo failed to establish his identity
and existence and that he was a real party-in-
interest.
Teofilo then sought recourse from this Court in the
1997 Cacho case. The Court reversed the judgment
of the Court of Appeals and reinstated the decision
of the RTC approving the re-issuance of Decree
Nos. 10364 and 18969. The Court found that such
decrees had in fact been issued and had attained
finality, as certified by the Acting Commissioner,
Deputy Clerk of Court III, Geodetic Engineer, and
Chief of Registration of the then Land Registration
Commission, now National Land Titles and Deeds
Registration Administration (NALTDRA). The Court
further reasoned that:
[T]o sustain the Court of Appeals ruling as regards
requiring petitioners to fulfill the conditions set forth
in Cacho vs. U.S. would constitute a derogation of
the doctrine of res judicata. Significantly, the
issuance of the subject decrees presupposes a prior
final judgment because the issuance of such decrees
is a mere ministerial act on part of the Land
Registration Commission (now the NALTDRA), upon
presentation of a final judgment. It is also worth
noting that the judgment in Cacho vs. U.S. could not
have acquired finality without the prior fulfillment of
the conditions in GLRO Record No. 6908, the
presentation of the corresponding deed of sale from
Datto Dorondon on or before March 30, 1913 (upon
which Decree No. 10364 was issued on May 9,
1913); and in GLRO Record No. 6909, the
presentation of a new survey per decision of Judge
Jorge on December 10, 1912 and affirmed by this
Court on December 10, 1914 (upon which Decree
No. 18969 was issued on July 8, 1915).
Requiring the submission of a new plan as a
condition for the re-issuance of the decree would
render the finality attained by the Cacho vs. U.S.
case nugatory, thus, violating the fundamental rule
regarding res judicata. It must be stressed that the
judgment and the resulting decree are res judicata,
and these are binding upon the whole world, the
proceedings being in the nature of proceedings in
rem. Besides, such a requirement is an
impermissible assault upon the integrity and stability
of the Torrens System of registration because it also
effectively renders the decree inconclusive.21
As to the issue of laches, the Court referred to the
settled doctrine that laches cannot bar the issuance
of a decree. A final decision in land registration
cases can neither be rendered inefficacious by the
statute of limitations nor by laches.
Anent the issue of the identity and existence of
Teofilo and he being a real party-in-interest, the
Court found that these were sufficiently established
by the records. The Court relied on Teofilo’s Affidavit
of Adjudication as Doña Demetria’s sole heir, which
he executed before the Philippine Consulate General
in Chicago, United States of America (U.S.A.); as
well as the publication in the Times Journal of the
fact of adjudication of Doña Demetria’s estate.
Teofilo also appeared personally before the Vice
Consul of the Philippine Consulate General in
Chicago to execute a Special Power of Attorney in
favor of Atty. Godofredo Cabildo (Atty. Cabildo) who
represented him in this case. The Court stressed that
the execution of public documents is entitled to the
presumption of regularity and proof is required to
assail and controvert the same.
In the Resolution dated July 28, 1997,22 the Court
denied the Motions for Reconsideration of the
Republic and NSC.
As a result of the 1997 Cacho case, the decrees of
registration were re-issued bearing new numbers
and OCTs were issued for the two parcels of land in
Doña Demetria’s name. OCT No. 0-1200 (a.f.) was
based on re-issued Decree No. N-219464 in GLRO
Record No. 6908, while OCT No. 0-1201 (a.f.) was
based on re-issued Decree No. N-219465 in GLRO
Record No. 6909.
The dispute over Lots 1 and 2 did not end with the
termination of the 1997 Cacho case. Another four
cases involving the same parcels of land were
instituted before the trial courts during and after the
pendency of the 1997 Cacho case. These cases are:
(1) the Expropriation Case, G.R. No. 170375; (2) the
Quieting of Title Case, G.R. Nos. 178779 and
178894; (3) the Ejectment or Unlawful Detainer
Case, G.R. No. 170505 (execution pending appeal
before the RTC) and G.R. Nos. 173355-56 and
173563-64 (execution pending appeal before the
Court of Appeals); and (4) the Cancellation of Titles
and Reversion Case, G.R. No. 173401. These cases
proceeded independently of each other in the courts
a quo until they reached this Court via the present
Petitions. In the Resolution23 dated October 3, 2007,
the Court consolidated the seven Petitions
considering that they either originated from the same
case or involved similar issues.
Expropriation Case
(G.R. No. 170375)
The Complaint for Expropriation was originally filed
on August 15, 1983 by the Iron and Steel Authority
(ISA), now the NSC, against Maria Cristina Fertilizer
Corporation (MCFC), and the latter’s mortgagee, the
Philippine National Bank (PNB). The Complaint was
docketed as Civil Case No. 106 and raffled to RTC-
Branch 1, presided over by Judge Mangotara.
ISA was created pursuant to Presidential Decree No.
272924 dated August 9, 1973, to strengthen, develop,
and promote the iron and steel industry in the
Philippines. Its existence was extended until October
10, 1988.
On November 16, 1982, during the existence of ISA,
then President Ferdinand E. Marcos issued
Presidential Proclamation No. 2239,25 reserving in
favor of ISA a parcel of land in Iligan City, measuring
302,532 square meters or 30.25 hectares, to be
devoted to the integrated steel program of the
Government. MCFC occupied certain portions of this
parcel of land. When negotiations with MCFC failed,
ISA was compelled to file a Complaint for
Expropriation.
When the statutory existence of ISA expired during
the pendency of Civil Case No. 106, MCFC filed a
Motion to Dismiss the case alleging the lack of
capacity to sue of ISA. The RTC-Branch 1 granted
the Motion to Dismiss in an Order dated November
9, 1988. ISA moved for reconsideration or, in the
alternative, for the substitution of the Republic as
plaintiff in Civil Case No. 106, but the motion was
denied by RTC-Branch 1. The dismissal of Civil
Case No. 106 was affirmed by the Court of Appeals,
thus, ISA appealed to this Court. In Iron and Steel
Authority v. Court of Appeals26 (ISA case), the Court
remanded the case to RTC-Branch 1, which was
ordered to allow the substitution of the Republic for
ISA as plaintiff. Entry of Judgment was made in the
ISA case on August 31, 1998. In an Order27 dated
November 16, 2001, the RTC-Branch 1 allowed the
substitution of the Republic for ISA as plaintiff in Civil
Case No. 106.
Alleging that Lots 1 and 2 involved in the 1997
Cacho case encroached and overlapped the parcel
of land subject of Civil Case No. 106, the Republic
filed with the RTC-Branch 1 a Motion for Leave to
File Supplemental Complaint dated October 7, 2004
and to Admit the Attached Supplemental Complaint
dated September 28, 200428 seeking to implead in
Civil Case No. 106 Teofilo Cacho and Demetria Vidal
and their respective successors-in-interest,
LANDTRADE and AZIMUTH.
MCFC opposed the Motion for leave to file and to
admit the Supplemental Complaint on the ground
that the Republic was without legal personality to file
the same because ISA was the plaintiff in Civil Case
No. 106. MCFC argued that the Republic failed to
move for the execution of the decision in the ISA
case within the prescriptive period of five years,
hence, the only remedy left was for the Republic to
file an independent action to revive the judgment.
MCFC further pointed out that the unreasonable
delay of more than six years of the Republic in
seeking the substitution and continuation of the
action for expropriation effectively barred any further
proceedings therein on the ground of estoppel by
laches.
In its Reply, the Republic referred to the Order dated
November 16, 2001 of the RTC-Branch 1 allowing
the substitution of the Republic for ISA.
In an Order dated April 4, 2005, the RTC-Branch 1
denied the Motion of the Republic for leave to file
and to admit its Supplemental Complaint. The RTC-
Branch 1 agreed with MCFC that the Republic did
not file any motion for execution of the judgment of
this Court in the ISA case. Since no such motion for
execution had been filed, the RTC-Branch 1 ruled
that its Order dated November 16, 2001, which
effected the substitution of the Republic for ISA as
plaintiff in Civil Case No. 106, was an honest
mistake. The Republic filed a Motion for
Reconsideration of the April 4, 2005 Order of the
RTC-Branch 1.
MCFC then filed a Motion to Dismiss Civil Case No.
106 for: (1) failure of the Republic to implead
indispensable parties because MCFC insisted it was
not the owner of the parcels of land sought to be
expropriated; and (2) forum shopping considering the
institution by the Republic on October 13, 2004 of an
action for the reversion of the same parcels subject
of the instant case for expropriation.
Judge Mangotara of RTC-Branch 1 issued a
Resolution29 on July 12, 2005, denying for lack of
merit the Motion for Reconsideration of the Order
dated April 4, 2005 filed by the Republic, and
granting the Motion to Dismiss Civil Case No. 106
filed by MCFC. Judge Mangotara justified the
dismissal of the Expropriation Case thus:
What the Republic seeks [herein] is the expropriation
of the subject parcels of land. Since the exercise of
the power of eminent domain involves the taking of
private lands intended for public use upon payment
of just compensation to the owner x x x, then a
complaint for expropriation must, of necessity, be
directed against the owner of the land subject
thereof. In the case at bar, the decision of the
Supreme Court in Cacho v. Government of the
United States x x x, decreeing the registration of the
subject parcels of land in the name of the late Doña
Demetria Cacho has long attained finality and is
conclusive as to the question of ownership thereof.
Since MCFC, the only defendant left in this case, is
not a proper party defendant in this complaint for
expropriation, the present case should be dismissed.
This Court notes that the Republic [has filed
reversion proceedings] dated September 27, 2004,
involving the same parcels of land, docketed as
Case No. 6686 pending before the Regional Trial
Court of Lanao del Norte, Iligan City Branch 4. [The
Republic], however, did not state such fact in its
"Verification and Certification of Non-Forum
Shopping" attached to its Supplemental Complaint
dated September 28, 2004. [It is therefore] guilty of
forum shopping. Moreover, considering that in the
Reversion case, [the Republic] asserts ownership
over the subject parcels of land, it cannot be allowed
to take an inconsistent position in this expropriation
case without making a mockery of justice.30
The Republic filed a Motion for Reconsideration of
the Resolution dated July 12, 2005, insofar as it
dismissed Civil Case No. 106, but said Motion was
denied by Judge Mangatora in a Resolution31 dated
October 24, 2005.
On January 16, 2006, the Republic filed with this
Court the consolidated Petition for Review on
Certiorari and Petition for Certiorari under Rules 45
and 65 of the Rules of Court, respectively, docketed
as G.R. No. 170375.
The Quieting of Title Case
(G.R. Nos. 178779 and 178894)
Demetria Vidal (Vidal) and AZIMUTH filed on
November 18, 1998, a Petition32 for Quieting of Title
against Teofilo, Atty. Cabildo, and the Register of
Deeds of Iligan City, which was docketed as Civil
Case No. 4452 and raffled to RTC-Branch 3.
In the Petition, Vidal claimed that she, and not
Teofilo, was the late Doña Demetria’s sole surviving
heir, entitled to the parcels of land covered by OCT
Nos. 0-1200 (a.f.) and 0-1201 (a.f.). She averred that
she is the daughter of Francisco Cacho Vidal
(Francisco) and Fidela Arellano Confesor. Francisco
was the only child of Don Dionisio Vidal and Doña
Demetria.
AZIMUTH, for its part, filed the Petition as Vidal’s
successor-in-interest with respect to a 23-hectare
portion of the subject parcels of land pursuant to the
Memorandum of Agreement dated April 2, 1998 and
Deed of Conditional Conveyance dated August 13,
2004, which Vidal executed in favor of AZIMUTH.
Teofilo opposed the Petition contending that it stated
no cause of action because there was no title being
disturbed or in danger of being lost due to the claim
of a third party, and Vidal had neither legal nor
beneficial ownership of the parcels of land in
question; that the matter and issues raised in the
Petition had already been tried, heard, and decided
by the RTC of Iligan City and affirmed with finality by
this Court in the 1997 Cacho case; and that the
Petition was barred by the Statute of Limitations and
laches.
LANDTRADE, among other parties, was allowed by
the RTC-Branch 3 to intervene in Civil Case No.
4452. LANDTRADE alleged that it is the owner of a
portion of the subject parcels of land, measuring
270,255 square meters or about 27.03
hectares, which it purportedly acquired through a
Deed of Absolute Sale dated October 1, 1996 from
Teofilo, represented by Atty. Cabildo. LANDTRADE
essentially argued that Vidal's right as heir should be
adjudicated upon in a separate and independent
proceeding and not in the instant Quieting of Title
Case.
During the pre-trial conference, the parties
manifested that there was no possibility of any
amicable settlement among them.
Vidal and AZIMUTH submitted testimonial and
documentary evidence during the trial before the
RTC-Branch 3. Teofilo and Atty. Cabildo failed to
present any evidence as they did not appear at all
during the trial, while LANDTRADE was declared by
the RTC-Branch 3 to have waived its right to present
evidence on its defense and counterclaim.
On July 17, 2004, the RTC-Branch 3 rendered its
Decision33 in Civil Case No. 4452 in favor of Vidal
and AZIMUTH, the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered in favor
of the petitioners and against the respondents and
intervenors:
1) DECLARING:
a.) Petitioner Demetria C. Vidal the sole
surviving heir of the late Doña Demetria
Cacho;
b.) Petitioner Demetria C. Vidal alone has the
hereditary right to and interest in the Subject
Property;
c.) Petitioner Azimuth International
Development Corporation is the successor-in-
interest of petitioner Demetria C. Vidal to a
portion of the Subject Property to the extent
provided in their 2 April 1998 Memorandum of
Agreement and 13 August 1998 Deed of
Conditional Conveyance;
d.) Respondent Teofilo Cacho is not a son or
heir of the late Dona Demetria Cacho; and
e.) Respondent Teofilo Cacho, Godofredo
Cabildo and any of their transferees/assignees
have no valid right to or interest in the Subject
Property.
2) ORDERING:
a.) Respondent Register of Deeds of Iligan
City, and any other person acting in his behalf,
stop, cease and desist:
i) From accepting or registering any
affidavit of self- adjudication or any other
document executed by respondents
Teofilo Cacho, Godofredo Cabildo
and/or any other person which in any
way transfers the title to the Subject
Property from Dona Demetria Cacho to
respondent Teofilo Cacho, Godofredo
Cabildo and/or any of their
transferees/assignees, including the
intervenors.
ii) From cancelling the OCTs or any
certificate of title over the Subject
Property in the name of Demetria Cacho
or any successor certificate of title, and
from issuing new certificates of title in
the name of respondents Teofilo Cacho,
Godofredo Cabildo their
transferees/assignees, including the
intervenors.
b) Respondents Teofilo Cacho, Godofredo
Cabildo, their transferees/assignees, and any
other person acting in their behalf, to stop,
cease and desist:
 i) From executing, submitting to any
Register of Deeds, or registering or
causing to be registered therein, any
affidavit of self-adjudication or any other
document which in any way transfers
title to the Subject Property from
Demetria Cacho to respondents Teofilo
Cacho, Godofredo Cabildo and/or any of
their transferees/assignees, including
the intervenors.
a) For temperate damages - ₱ 80,000.00
b) For nominal damages - ₱ 60,000.00
c) For moral damages - ₱500,000.00
d) For exemplary damages - ₱ 500,000.00
e) For attorney's fees (ACCRA Law)-
₱1,000,000.00

ii) From canceling or causing the f) For Attorney's fees - ₱500,000.00

cancellation of OCTs or any certificate
of title over the Subject Property in the (Atty. Voltaire Rovira)
name of Demetria Cacho or any
successor certificate of title, and from g) For litigation expenses - ₱300,000.00
issuing new certificates of title in the
For lack of factual and legal basis, the counterclaim
name of respondent Teofilo Cacho,
of Teofilo Cacho and Atty. Godofredo Cabildo is
Godofredo Cabildo and/or any of their
hereby dismissed.
transferees/assignees, including the
intervenors.
Likewise, the counterclaim of intervenor IDD/Investa
is dismissed for lack of basis as the petitioners
iii) From claiming or representing in any
succeeded in proving their cause of action.
manner that respondent Teofilo Cacho
is the son or heir of Demetria Cacho or
On the cross-claim of intervenor IDD/Investa,
has rights to or interest in the Subject
respondents Teofilo Cacho and Atty. Godofredo
Property.
Cabildo are ORDERED to pay IDD/Investa, jointly
and severally, the principal sum of P5,433,036 with
3) ORDERING respondents Teofilo Cacho and Atty.
15% interest per annum.
Godofredo Cabildo to pay petitioners, jointly and
severally, the following:
For lack of legal basis, the counterclaim of Intervenor
Landtrade Realty Development Corporation is
dismissed.
Likewise, Intervenor Manguera's counterclaim is
dismissed for lack of legal basis.34
The joint appeal filed by LANDTRADE, Teofilo, and
Atty. Cabildo with the Court of Appeals was docketed
as CA-G.R. CV No. 00456. The Court of Appeals, in
its Decision35 of January 19, 2007, affirmed in toto
the Decision dated July 17, 2004 of the RTC-Branch
3.
According to the Court of Appeals, the RTC-Branch
3 did not err in resolving the issue on Vidal’s status,
filiation, and hereditary rights as it is determinative of
the issue on ownership of the subject properties. It
was indubitable that the RTC-Branch 3 had
jurisdiction over the person of Teofilo and juridical
personality of LANDTRADE as they both filed their
Answers to the Petition for Quieting of Title thereby
voluntarily submitting themselves to the jurisdiction
of said trial court. Likewise, the Petition for Quieting
of Title is in itself within the jurisdiction of the RTC-
Branch 3. Hence, where there is jurisdiction over the
person and subject matter, the resolution of all other
questions arising in the case is but an exercise by
the court of its jurisdiction. Moreover, Teofilo and
LANDTRADE were guilty of estoppel by laches for
failing to assail the jurisdiction of the RTC-Branch 3
at the first opportunity and even actively participating
in the trial of the case and seeking affirmative reliefs.
In addition, the Court of Appeals held that the 1997
Cacho case only determined the validity and efficacy
of the Affidavit of Adjudication that Teofilo executed
before the Philippine Consulate General in the
U.S.A. The decision of this Court in the 1997 Cacho
case, which had become final and executory, did not
vest upon Teofilo ownership of the parcels of land as
it merely ordered the re-issuance of a lost duplicate
certificate of title in its original form and condition.
The Court of Appeals agreed in the finding of the
RTC-Branch 3 that the evidence on record
preponderantly supports Vidal’s claim of being the
granddaughter and sole heiress of the late Doña
Demetria. The appellate court further adjudged that
Vidal did not delay in asserting her rights over the
subject parcels of land. The prescriptive period for
real actions over immovables is 30 years. Vidal’s
rights as Doña Demetria’s successor-in-interest
accrued upon the latter’s death in 1974, and only 24
years thereafter, in 1998, Vidal already filed the
present Petition for Quieting of Title. Thus, Vidal’s
cause of action had not yet prescribed. And, where
the action was filed within the prescriptive period
provided by law, the doctrine of laches was also
inapplicable.
LANDTRADE, Teofilo, and Atty. Cabildo filed
separate Motions for Reconsideration of the January
19, 2007 Decision of the Court of Appeals, which
were denied in the July 4, 2007 Resolution36 of the
same court.
On August 24, 2007, LANDTRADE filed with this
Court a Petition for Review on Certiorari under Rule
45 of the Rules of Court, which was docketed as
G.R. No. 178779. On September 6, 2007, Teofilo
and Atty. Cabildo filed their own Petition for Review
on Certiorari under Rule 45 of the Rules of Court,
which was docketed as G.R. No. 178894.
The Ejectment or Unlawful Detainer Case
(G.R. Nos. 170505, 173355-56, and 173563-64)
Three Petitions before this Court are rooted in the
Unlawful Detainer Case instituted by LANDTRADE
against NAPOCOR and TRANSCO.
On August 9, 1952, NAPOCOR took possession of
two parcels of land in Sitio Nunucan, Overton,
Fuentes, Iligan City, denominated as Lots 2029 and
2043, consisting of 3,588 square meters (or 0.36
hectares) and 3,177 square meters (or 0.32
hectares), respectively. On Lot 2029, NAPOCOR
constructed its power sub-station, known as the
Overton Sub-station, while on Lot 2043, it built a
warehouse, known as the Agus 7 Warehouse, both
for the use of its Agus 7 Hydro-Electric Power Plant.
For more than 30 years, NAPOCOR occupied and
possessed said parcels of land pursuant to its
charter, Republic Act No. 6395.37 With the enactment
in 2001 of Republic Act No. 9136, otherwise known
as the Electric Power Industry Reform Act (EPIRA),
TRANSCO assumed the functions of NAPOCOR
with regard to electrical transmissions and took over
possession of the Overton Sub-station.
Claiming ownership of the parcels of land where the
Overton Sub-station and Agus 7 Warehouse are
located, LANDTRADE filed with the MTCC on April
9, 2003 a Complaint for Unlawful Detainer against
NAPOCOR and TRANSCO, which was docketed as
Civil Case No. 11475-AF.
In its Complaint, LANDTRADE alleged that it
acquired from Teofilo, through Atty. Cabildo, two
parcels of land at Sitio Nunucan, Overton, Fuentes,
Brgy. Maria Cristina, Iligan City, with a combined
area of 270,255 square meters or around 27.03
hectares, as evidenced by a Deed of Absolute
Sale38 dated October 1, 1996. Certain portions of
said parcels of land were being occupied by the
Overton Sub-station and Agus 7 Warehouse of
NAPOCOR and TRANSCO, through the tolerance of
LANDTRADE. Upon failure of NAPOCOR and
TRANSCO to pay rentals or to vacate the subject
properties after demands to do so, LANDTRADE
filed the present Complaint for Unlawful Detainer,
plus damages in the amount of ₱450,000.00 as
yearly rental from date of the first extra-judicial
demand until NAPOCOR and TRANSCO vacate the
subject properties.
In their separate Answers, NAPOCOR and
TRANSCO denied the material allegations in the
Complaint and countered, by way of special and
affirmative defenses, that the Complaint was barred
by res judicata; that the MTCC has no jurisdiction
over the subject matter of the action; and that
LANDTRADE lacked the legal capacity to sue.
On February 17, 2004, the MTCC rendered its
Decision39 in favor of LANDTRADE. The MTCC
disposed:
WHEREFORE, premises considered, judgment is
hereby rendered in favor of Plaintiff Land Trade
Realty Corporation represented by Atty. Max C.
Tabimina and against defendant National Power
Corporation represented by its President, Mr.
Rogelio M. Murga and co-defendant TRANSCO
represented by its President Dr. Allan T. Ortiz and
Engr. Lorrymir A. Adaza, Manager, NAPOCOR-
Mindanao, Regional Center, Ma. Cristina, Iligan City,
ordering:
1. Defendants National Power Corporation and
TRANSCO, their agents or representatives or
any person/s acting on its behalf or under its
authority to vacate the premises;
2. Defendants NAPOCOR and TRANSCO to
pay Plaintiff jointly and solidarily:
a. Php500,000.00 a month representing
fair rental value or compensation since
June 29, 1978 until defendant shall have
vacated the premises;
b. Php20,000.00 for and as attorney’s
fees and
c. Cost of suit.
Execution shall issue immediately upon motion,
unless an appeal has been perfected and the
defendant to stay execution files a sufficient
supersedeas bond, approved by this Court and
executed in favor of the plaintiff, to pay the rents,
damages, and costs accruing down to the time of
judgment appealed from, and unless, during the
pendency of the appeal, defendants deposit with the
appellate court the amount of ₱500,000.00 per
month, as reasonable value of the use and
occupancy of the premises for the preceding month
or period on or before the tenth day of each
succeeding month or period.40
NAPOCOR and TRANSCO seasonably filed a Joint
Notice of Appeal. Their appeal, docketed as Civil
Case No. 6613, was initially assigned to the RTC-
Branch 5, presided over by Judge Maximino Magno
Libre (Judge Libre).
LANDTRADE filed on June 24, 2004 a Motion for
Execution, asserting that NAPOCOR and TRANSCO
had neither filed a supersedeas bond with the MTCC
nor periodically deposited with the RTC the monthly
rental for the properties in question, so as to stay the
immediate execution pending appeal of the MTCC
judgment. However, the said Motion failed to comply
with the required notice of hearing under Rule 15,
Section 5 of the Rules of Court. LANDTRADE then
filed a Motion to Withdraw and/or Replace Notice of
Hearing.
NAPOCOR and TRANSCO filed on July 13, 2004 a
Joint Motion to Suspend Proceedings citing Amagan
v. Marayag,41 in which the Court ruled that if
circumstances should require, the proceedings in an
ejectment case may be suspended in whatever
stage it may be found. Since LANDTRADE anchors
its right to possession of the subject parcels of land
on the Deed of Sale executed in its favor by Teofilo
on October 1, 1996, the ejectment case should be
held in abeyance pending the resolution of other
cases in which title over the same properties are in
issue, i.e., (1) Civil Case No. 6600, the action for the
annulment of the Deed of Sale dated October 1,
1996 filed by Teofilo against LANDTRADE pending
before the RTC-Branch 4; and (2) Civil Case No.
4452, the Quieting of Title Case filed by Vidal and
AZIMUTH against Teofilo and Atty. Cabildo pending
before the RTC-Branch 3.
LANDTRADE filed on July 19, 2004 another Motion
for Execution, which was heard together with the
Joint Motion to Suspend Proceedings of NAPOCOR
and TRANSCO. After said hearing, the RTC-Branch
5 directed the parties to file their memoranda on the
two pending Motions.
LANDTRADE, in its Memorandum, maintained that
the pendency of Civil Case No. 4452, the Quieting of
Title Case, should not preclude the execution of the
MTCC judgment in the Unlawful Detainer Case
because the issue involved in the latter was only the
material possession or possession de facto of the
parcels of land in question. LANDTRADE also
reported that Civil Case No. 6600, the action for
annulment of the Deed of Sale dated October 1,
1996 instituted by Teofilo, was already dismissed
given that the RTC-Branch 4 had approved the
Compromise Agreement executed between
LANDTRADE and Teofilo.
NAPOCOR and TRANSCO likewise filed their
respective Memoranda. Subsequently, NAPOCOR
filed a Supplement to its Memorandum to bring to the
attention of the RTC-Branch 5 the Decision rendered
on July 17, 2004 by the RTC-Branch 3 in Civil Case
No. 4452, the Quieting of Title Case, categorically
declaring Teofilo, the predecessor-in-interest of
LANDTRADE, as having no right at all to the subject
parcels of land. Resultantly, the right of
LANDTRADE to the two properties, which merely
emanated from Teofilo, was effectively declared as
non-existent too.
On August 4, 2004, the RTC-Branch 5 issued an
Order42 denying the Joint Motion to Suspend
Proceedings of NAPOCOR and TRANSCO. The
RTC held that the pendency of other actions
involving the same parcels of land could not stay
execution pending appeal of the MTCC judgment
because NAPOCOR and TRANSCO failed to post
the required bond and pay the monthly rentals.
Five days later, on August 9, 2004, the RTC-Branch
5 issued another Order43 granting the Motion of
LANDTRADE for execution of the MTCC judgment
pending appeal.
The next day, on August 10, 2004, the Acting Clerk
of Court, Atty. Joel M. Macaraya, Jr., issued a Writ of
Execution Pending Appeal44 which directed Sheriff IV
Alberto O. Borres (Sheriff Borres) to execute the
MTCC Decision dated February 17, 2004.
A day later, on August 11, 2004, Sheriff Borres
issued two Notices of Garnishment45 addressed to
PNB and Land Bank of the Philippines in Iligan City,
garnishing all the goods, effects, stocks, interests in
stocks and shares, and any other personal
properties belonging to NAPOCOR and TRANSCO
which were being held by and under the possession
and control of said banks. On even date, Sheriff
Borres also issued a Notification46 to NAPOCOR and
TRANSCO for them to vacate the subject parcels of
land; and to pay LANDTRADE the sums of (a)
₱156,000,000.00, representing the total fair rental
value for the said properties, computed at
₱500,000.00 per month, beginning June 29, 1978
until June 29, 2004, or for a period of 26 years, and
(b) ₱20,000.00 as attorney's fees.
Thereafter, NAPOCOR and TRANSCO each filed
before the Court of Appeals in Cagayan de Oro City
a Petition for Certiorari, under Rule 65 of the Rules
of Court, with prayer for the issuance of a TRO and
writ of preliminary injunction. The Petitions, docketed
as CA-G.R. SP Nos. 85174 and 85841, were
eventually consolidated.
The Court of Appeals issued on August 18, 2004 a
TRO47 enjoining the enforcement and implementation
of the Order of Execution and Writ of Execution
Pending Appeal of the RTC-Branch 5 and Notices of
Garnishment and Notification of Sheriff Borres.
The Court of Appeals, in its Decision48 dated
November 23, 2005, determined that public
respondents did commit grave abuse of discretion in
allowing and/or effecting the execution of the MTCC
judgment pending appeal, since NAPOCOR and
TRANSCO were legally excused from complying
with the requirements for a stay of execution
specified in Rule 70, Section 19 of the Rules of
Court, particularly, the posting of
a supersedeas bond and periodic deposits of rental
payments. The decretal portion of said appellate
court Decision states:
ACCORDINGLY, the two petitions at bench are
GRANTED; the Order dated 9 August 2004, the Writ
of Execution Pending Appeal dated 10 August 2004,
the two Notices of Garnishment dated 11 August
2004, and the Notification dated 11 August 2004, are
ANNULLED and SET ASIDE.49
Displeased, LANDTRADE elevated the case to this
Court on January 10, 2006 via a Petition for Review
on Certiorari under Rule 45 of the Rules of Court,
which was docketed as G.R. No. 170505.
In the meantime, with the retirement of Judge Libre
and the inhibition50 of Judge Oscar Badelles, the new
presiding judge of RTC-Branch 5, Civil Case No.
6613 was re-raffled to the RTC-Branch 1, presided
over by Judge Mangotara. The RTC-Branch 1
promulgated on December 12, 2005 a Decision51 in
Civil Case No. 6613 which affirmed in toto the
February 17, 2004 Decision of the MTCC in Civil
Case No. 11475-AF favoring LANDTRADE.
NAPOCOR and TRANSCO filed with the RTC-
Branch 1 twin Motions, namely: (1) Motion for
Reconsideration of the Decision dated December 12,
2005; and (2) Motion for Inhibition of Judge
Mangotara. The RTC-Branch 1 denied both Motions
in a Resolution dated January 30, 2006.
NAPOCOR and TRANSCO filed with the Court of
Appeals separate Petitions for Review with prayer for
TRO and/or a writ of preliminary injunction, which
were docketed as CA-G.R. SP Nos. 00854 and
00889, respectively. In a Resolution dated March 24,
2006, the Court of Appeals granted the prayer for
TRO of NAPOCOR and TRANSCO.
With the impending lapse of the effectivity of the
TRO on May 23, 2006, NAPOCOR filed on May 15,
2006 with the Court of Appeals a Manifestation and
Motion praying for the resolution of its application for
preliminary injunction.
On May 23, 2006, the same day the TRO lapsed, the
Court of Appeals granted the motions for extension
of time to file a consolidated comment of
LANDTRADE. Two days later, LANDTRADE filed an
Omnibus Motion seeking the issuance of (1) a writ of
execution pending appeal, and (2) the designation of
a special sheriff in accordance with Rule 70, Section
21 of the Rules of Court.
In a Resolution52 dated June 30, 2006, the Court of
Appeals granted the Omnibus Motion of
LANDTRADE and denied the applications for the
issuance of a writ of preliminary injunction of
NAPOCOR and TRANSCO. In effect, the appellate
court authorized the execution pending appeal of the
judgment of the MTCC, affirmed by the RTC-Branch
1, thus:
IN LIGHT OF THE ABOVE DISQUISITIONS, this
Court resolves to grant the [LANDRADE]’s omnibus
motion for execution pending appeal of the decision
rendered in its favor which is being assailed in these
consolidated petitions for review. Accordingly, the
[NAPOCOR and TRANSCO’s] respective
applications for issuance of writ of preliminary
injunction are both denied for lack of factual and
legal bases. The Municipal Trial Court in Cities,
Branch 2, Iligan City, which at present has the
custody of the records of the case a quo, is hereby
ordered to cause the immediate issuance of a writ of
execution relative to its decision dated 17 February
2004 in Civil Case No. 11475-AF.53
On July 20, 2006, NAPOCOR filed with this Court a
Petition for Certiorari and Prohibition under Rule 65
of the Rules of Court with an urgent plea for a TRO,
docketed as G.R. No. 173355-56. On August 2,
2006, TRANSCO filed with this Court its own Petition
for Certiorari, docketed as G.R. No. 173563-64.
On July 21, 2006, NAPOCOR filed an Urgent Motion
for the Issuance of a TRO in G.R. No. 173355-56. In
a Resolution54 dated July 26, 2006, the Court granted
the Motion of NAPOCOR and issued a
TRO,55 effective immediately, which enjoined public
and private respondents from implementing the
Resolution dated June 30, 2006 of the Court of
Appeals in CA-G.R. SP Nos. 00854 and 00889 and
the Decision dated February 17, 2004 of the MTCC
in Civil Case No. 11475-AF.
On July 31, 2006, Vidal and AZIMUTH filed a Motion
for Leave to Intervene and to Admit Attached
Comment-in-Intervention, contending therein that
Vidal was the lawful owner of the parcels of land
subject of the Unlawful Detainer Case as confirmed
in the Decision dated July 17, 2004 of the RTC-
Branch 3 in Civil Case No. 4452. In a Resolution
dated September 30, 2006, the Court required the
parties to comment on the Motion of Vidal and
AZIMUTH, and deferred action on the said Motion
pending the submission of such comments.
The Cancellation of Titles and Reversion Case
(G.R. No. 173401)
On October 13, 2004, the Republic filed a Complaint
for the Cancellation of OCT Nos. 0-1200 (a.f.) and 0-
1201 (a.f.) and Reversion against the late Doña
Demetria, represented by her alleged heirs, Vidal
and/or Teofilo, together with AZIMUTH and
LANDTRADE. The Complaint, docketed as Civil
Case No. 6686, was raffled to the RTC-Branch 4.
The Republic sought the cancellation of OCT Nos. 0-
1200 (a.f.) and 0-1201 (a.f.) and the reversion of the
parcels of land covered thereby to the Government
based on the following allegations in its Complaint,
under the heading "Cause of Action":
5. On October 15, 1998, Original Certificates of Title
(OCTs) Nos. 0-1200 (a.f.) and 0-1201 (a.f.) were
issued in the name of "Demetria Cacho, widow, now
deceased…" consisting of a total area of Three
Hundred Seventy-Eight Thousand Seven Hundred
and Seven (378,707) square meters and Three
Thousand Seven Hundred Thirty-Five (3,635) square
meters, respectively, situated in Iligan City, x x x
xxxx
6. The afore-stated titles were issued in
implementation of a decision rendered in LRC
(GLRO) Record Nos. 6908 and 6909 dated
December 10, 1912, as affirmed by the Honorable
Supreme Court in Cacho v. Government of the
United States, 28 Phil. 616 (December 10, 1914),
7. The decision in LRC (GLRO) Record Nos. 6908
and 6909, upon which the titles were issued, did not
grant the entire area applied for therein. x x x
xxxx
9. As events turned out, the titles issued in
connection with LRC (GLRO) Record Nos. 6908 and
6909 – i.e. OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.)
– cover property MUCH LARGER in area than that
granted by the land registration court in its
corresponding decision, supra.
10. While the LRC Decision, as affirmed by the
Honorable Supreme Court, granted only the
southern part of the 37.87 hectare land subject of
LRC (GLRO) Record Case No. 6909, the ENTIRE
37.87 hectares is indicated as the property covered
by OCT 0-1200 (a.f.). Worse, OCT No. 0-1200 (a.f.)
made reference to Case No. 6908 as basis thereof,
yet, the decision in said case is clear:
(i) The parcel "object of Case No. 6908 is small"
(Cacho vs. Government of the United States, 28 Phil.
616, p. 619)
(ii) "The parcel of land claimed by the applicant in
Case No. 6909 is the bigger of two parcels and
contains 37.87 hectares…"
11. More significantly, the technical description in
Original Certificate of Title No. 0-1200 (a.f.) specifies
the date of survey as "August 31 to September 1,
1910," which is EARLIER than the date the Supreme
Court, in Cacho supra, resolved LRC (GLRO)
Record No. 6909 (involving 37.87 hectares). In
resolving the application involving the 37.87
hectares, the Honorable Supreme Court declared
that only the southern part of the 37.87 hectare
property applied for is granted and that a new survey
specifying the "southern part" thereof should be
submitted. Accordingly, any survey involving the
"granted southern part" should bear a date
subsequent to the December 10, 1914 Supreme
Court decision. x x x
xxxx
12. The Honorable Supreme Court further declared
that the Decision in LRC (GLRO) Record No. 6909
was reserved:
"Final decision in these case is reserved until the
presentation of the … new plan." (28 Phil. 616, p.
631; Underscoring supplied)
In other words, as of December 10, 1914, when the
Honorable Supreme Court rendered its Decision on
appeal in LRC (GLRO) Record No. 6909, "final
decision" of the case was still reserved until the
presentation of a new plan. The metes and bounds
of OCT No. 0-1200 (a.f.) could not have been the
technical description of the property granted by the
court – described as "the southern part of the large
parcel object of expediente 6909 only" (Cacho vs.
Government of the United States, 28 Phil. 617, 629).
As earlier stated, the technical description appearing
in said title was the result of a survey conducted
in 1910 or before the Supreme Court decision was
rendered in 1914.
13. In the same vein, Original Certificate of Title No.
0-1201 (a.f.) specifies LRC (GLRO) Record No. 6909
as the basis thereof (see front page of OCT No. 0-
1201 (a.f.)). Yet, the technical description makes, as
its reference, Lot 1, Plan II-3732, LR Case No. 047,
LRC (GLRO) Record No. 6908 (see page 2 of said
title). A title issued pursuant to a decision may only
cover the property subject of the case. A title cannot
properly be issued pursuant to a decision in Case
6909, but whose technical description is based on
Case 6908.
14. The decision in LRC (GLRO) Record Nos. 6908
and 6909 has become final and executory, and it
cannot be modified, much less result in an increased
area of the property decreed therein.
xxxx
16. In sum, Original Certificates of Title Nos. 0-1200
(a.f.) and 0-1201 (a.f.), as issued, are null and void
since the technical descriptions vis-à-vis the areas of
the parcels of land covered therein went beyond the
areas granted by the land registration court in LRC
(GLRO) Record Nos. 6908 and 6909.56
Vidal and AZIMUTH filed a Motion to Dismiss dated
December 23, 2004 on the grounds that (1) the
Republic has no cause of action; (2) assuming
arguendo that the Republic has a cause of action, its
Complaint failed to state a cause of action; (3)
assuming arguendo that the Republic has a cause of
action, the same is barred by prior judgment; (4)
assuming further that the Republic has a cause of
action, the same was extinguished by prescription;
and (4) the Republic is guilty of forum shopping.
Upon motion of the Republic, the RTC-Branch 4
issued an Order57 dated October 4, 2005, declaring
LANDTRADE and Teofilo, as represented by Atty.
Cabildo, in default since they failed to submit their
respective answers to the Complaint despite the
proper service of summons upon them.
LANDTRADE subsequently filed its Answer with
Compulsory Counterclaim dated September 28,
2005. It also moved for the setting aside and
reconsideration of the Order of Default issued
against it by the RTC-Branch 4 on October 20, 2005.
On December 13, 2005, the RTC-Branch 4 issued
an Order58 dismissing the Complaint of the Republic
in Civil Case No. 6686, completely agreeing with
Vidal and AZIMUTH.
The RTC-Branch 4 reasoned that the Republic had
no cause of action because there was no showing
that the late Doña Demetria committed any wrongful
act or omission in violation of any right of the
Republic. Doña Demetria had sufficiently proven her
ownership over the parcels of land as borne in the
ruling of the LRC in GLRO Record Nos. 6908 and
6909. On the other hand, the Republic had no more
right to the said parcels of land. The Regalian
doctrine does not apply in this case because the
titles were already issued to Doña Demetria and
segregated from the mass of the public domain.
The RTC-Branch 4 likewise held that the Republic
failed to state a cause of action in its Complaint. The
arguments of the Republic – i.e., the absence of a
new survey plan and deed, the titles covered
properties with much larger area than that granted by
the LRC – had been answered squarely in the 1997
Cacho case. Also, the Complaint failed to allege that
fraud had been committed in having the titles
registered and that the Director of Lands requested
the reversion of the subject parcels of land.
The RTC-Branch 4 was convinced that the
Complaint was barred by res judicata because the
1914 Cacho case already decreed the registration of
the parcels of land in the late Doña Demetria’s name
and the 1997 Cacho case settled that there was no
merit in the argument that the conditions imposed in
the first case have not been complied with.
The RTC-Branch 4 was likewise persuaded that the Expropriation Case
cause of action or remedy of the Republic was lost or (G.R. No. 170375)
extinguished by prescription pursuant to Article 1106
of the Civil Code and Section 32 of Presidential The Republic, in its consolidated Petitions
Decree No. 1529, otherwise known as the Land challenging the Resolutions dated July 12, 2005 and
Registration Decree, which prescribes a one-year October 24, 2005 of the RTC-Branch 1 in Civil Case
period within which to file an action for the review of No. 106, made the following assignment of errors:
a decree of registration.
RESPONDENT JUDGE GRAVELY ERRED IN
Finally, the RTC-Branch 4 found the Republic guilty ORDERING THE DISMISSAL OF THE
of forum shopping because there is between this EXPROPRIATION COMPLAINT IN CIVIL CASE NO.
case, on one hand, and the 1914 and 1997 Cacho 106 CONSIDERING THAT:
cases, on the other, identity of parties, as well as
rights asserted and reliefs prayed for, as the (a) THE NON-JOINDER OF PARTIES
contending parties are claiming rights of ownership IS NOT A GROUND FOR THE
over the same parcels of land. DISMISSAL OF AN ACTION
PURSUANT TO SECTION 11, RULE 3
The Republic filed a Motion for Reconsideration of OF THE 1997 RULES OF CIVIL
the dismissal of its Complaint but the same was PROCEDURE;
denied by the RTC-Branch 4 in its Order59 dated May
16, 2006. (b) AN EXPROPRIATION
PROCEEDING IS AN ACTION QUASI
Assailing the Orders dated December 13, 2005 and IN REM WHEREIN THE FACT THAT
May 16, 2006 of the RTC-Branch 4, the Republic THE OWNER OF THE PROPERTY IS
filed on August 11, 2006 a Petition for Review on MADE A PARTY TO THE ACTION IS
Certiorari under Rule 45 of the Rules of Court, which NOT ESSENTIALLY INDISPENSABLE;
was docketed as G.R. No. 173401.
(c) PETITIONER DID NOT COMMIT
III ANY FORUM SHOPPING WITH THE
ISSUES AND DISCUSSIONS FILING OF THE REVERSION
COMPLAINT DOCKETED AS CIVIL
 CASE NO. 6686 WHICH IS PENDING
BEFORE BRANCH 4 OF THE
REGIONAL TRIAL COURT OF ILIGAN
CITY.60
Filing of consolidated petitions under both Rules 45
and 65
At the outset, the Court notes that the Republic filed
a pleading with the caption Consolidated Petitions for
Review on Certiorari (Under Rule 45) and Certiorari
(Under Rule 65) of the Rules of Court. The Republic
explains that it filed the Consolidated Petitions
pursuant to Metropolitan Waterworks and Sewerage
System (MWSS) v. Court of Appeals61 (MWSS case).
The reliance of the Republic on the MWSS case to
justify its mode of appeal is misplaced, taking the
pronouncements of this Court in said case out of
context.
The issue in the MWSS case was whether a
possessor in good faith has the right to remove
useful improvements, and not whether consolidated
petitions under both Rules 45 and 65 of the Rules of
Court can be filed. Therein petitioner MWSS simply
filed an appeal by certiorari under Rule 45 of the
Rules of Court, but named the Court of Appeals as a
respondent. The Court clarified that the only parties
in an appeal by certiorari under Rule 45 of the Rules
of Court are the appellant as petitioner and the
appellee as respondent. The court which rendered
the judgment appealed from is not a party in said
appeal. It is in the special civil action of certiorari
under Rule 65 of the Rules of Court where the court
or judge is required to be joined as party defendant
or respondent. The Court, however, also
acknowledged that there may be an instance when
in an appeal by certiorari under Rule 45, the
petitioner-appellant would also claim that the court
that rendered the appealed judgment acted without
or in excess of its jurisdiction or with grave abuse of
discretion, in which case, such court should be
joined as a party-defendant or respondent. While the
Court may have stated that in such an instance, "the
petition for review on certiorari under Rule 45 of the
Rules of Court is at the same time a petition for
certiorari under Rule 65," the Court did not hold that
consolidated petitions under both Rules 45 and 65
could or should be filed.
The Court, in more recent cases, had been stricter
and clearer on the distinction between these two
modes of appeal. In Nunez v. GSIS Family
Bank,62 the Court elucidated:
In Ligon v. Court of Appeals where the therein
petitioner described her petition as "an appeal under
Rule 45 and at the same time as a special civil action
of certiorari under Rule 65 of the Rules of Court," this
Court, in frowning over what it described as a
"chimera," reiterated that the remedies of appeal and
certiorari are mutually exclusive and not alternative
nor successive.
To be sure, the distinctions between Rules 45 and
65 are far and wide. However, the most apparent is
that errors of jurisdiction are best reviewed in a
special civil action for certiorari under Rule 65 while
errors of judgment can only be corrected by appeal
in a petition for review under Rule 45.
But in the same case, the Court also held that:
This Court, x x x, in accordance with the liberal spirit
which pervades the Rules of Court and in the interest
of justice may treat a petition for certiorari as having
been filed under Rule 45, more so if the same was
filed within the reglementary period for filing a
petition for review.63
It is apparent in the case at bar that the Republic
availed itself of the wrong mode of appeal by filing
Consolidated Petitions for Review under Rule 45 and
for Certiorari under Rule 65, when these are two
separate remedies that are mutually exclusive and
neither alternative nor successive. Nevertheless, the
Court shall treat the Consolidated Petitions as a
Petition for Review on Certiorari under Rule 45 and
the allegations therein as errors of judgment. As the
records show, the Petition was filed on time under
Rules 45. Before the lapse of the 15-day
reglementary period to appeal under Rule 45, the
Republic filed with the Court a motion for extension
of time to file its petition. The Court, in a
Resolution64 dated January 23, 2006, granted the
Republic a 30-day extension, which was to expire on
December 29, 2005. The Republic was able to file its
Petition on the last day of the extension period.
Hierarchy of courts
The direct filing of the instant Petition with this Court
did not violate the doctrine of hierarchy of courts.
According to Rule 41, Section 2(c)65 of the Rules of
Court, a decision or order of the RTC may be
appealed to the Supreme Court by petition for review
on certiorari under Rule 45, provided that such
petition raises only questions of law.66
A question of law exists when the doubt or
controversy concerns the correct application of law
or jurisprudence to a certain set of facts; or when the
issue does not call for an examination of the
probative value of the evidence presented, the truth
or falsehood of facts being admitted.67 A question of
fact exists when the doubt or difference arises as to
the truth or falsehood of facts or when the query
invites calibration of the whole evidence considering
mainly the credibility of the witnesses, the existence
and relevancy of specific surrounding circumstances,
as well as their relation to each other and to the
whole, and the probability of the situation.68
Here, the Petition of the Republic raises pure
questions of law, i.e., whether Civil Case No. 106
should have been dismissed for failure to implead
indispensable parties and for forum shopping. Thus,
the direct resort by the Republic to this Court is
proper.
The Court shall now consider the propriety of the
dismissal by the RTC-Branch 1 of the Complaint for
Expropriation of the Republic.
The proper parties in the expropriation proceedings
The right of the Republic to be substituted for ISA as
plaintiff in Civil Case No. 106 had long been affirmed
by no less than this Court in the ISA case. The
dispositive portion of the ISA case reads:
WHEREFORE, for all the foregoing, the Decision of
the Court of Appeals dated 8 October 1991 to the
extent that it affirmed the trial court’s order
dismissing the expropriation proceedings, is hereby
REVERSED and SET ASIDE and the case is
REMANDED to the court a quo which shall allow the
substitution of the Republic of the Philippines for
petitioner Iron Steel Authority for further proceedings
consistent with this Decision. No pronouncement as
to costs.69
The ISA case had already become final and
executory, and entry of judgment was made in said
case on August 31, 1998. The RTC-Branch 1, in an
Order dated November 16, 2001, effected the
substitution of the Republic for ISA.
The failure of the Republic to actually file a motion
for execution does not render the substitution void. A
writ of execution requires the sheriff or other proper
officer to whom it is directed to enforce the terms of
the writ.70 The November 16, 2001 Order of the RTC-
Branch 1 should be deemed as voluntary compliance
with a final and executory judgment of this Court,
already rendering a motion for and issuance of a writ
of execution superfluous.
Besides, no substantive right was violated by the
voluntary compliance by the RTC-Branch 1 with the
directive in the ISA case even without a motion for
execution having been filed. To the contrary, the
RTC-Branch 1 merely enforced the judicially
determined right of the Republic to the substitution.
While it is desirable that the Rules of Court be
faithfully and even meticulously observed, courts
should not be so strict about procedural lapses that
do not really impair the administration of justice. If
the rules are intended to insure the orderly conduct
of litigation it is because of the higher objective they
seek which is the protection of the substantive rights
of the parties.71
The Court also observes that MCFC did not seek
any remedy from the Order dated November 16,
2001 of the RTC-Branch 1. Consequently, the said
Order already became final, which even the RTC-
Branch 1 itself cannot reverse and set aside on the
ground of "honest mistake."
The RTC-Branch 1 dismissed the Complaint in Civil
Case No. 106 on another ground: that MCFC is not a
proper party to the expropriation proceedings, not
being the owner of the parcels of land sought to be
expropriated. The RTC-Branch 1 ratiocinated that
since the exercise of the power of eminent domain
involves the taking of private land intended for public
use upon payment of just compensation to the
owner, then a complaint for expropriation must be
directed against the owner of the land sought to be
expropriated.
The Republic insists, however, that MCFC is a real
party-in-interest, impleaded as a defendant in the
Complaint for Expropriation because of its
possessory or occupancy rights over the subject
parcels of land, and not by reason of its ownership of
the said properties. In addition, the Republic
maintains that non-joinder of parties is not a ground
for the dismissal of an action.
Rule 67, Section 1 of the then Rules of
Court72 described how expropriation proceedings
should be instituted:
Section 1. The complaint. – The right of eminent
domain shall be exercised by the filing of a complaint
which shall state with certainty the right and purpose
of condemnation, describe the real or personal
property sought to be condemned, and join as
defendants all persons owning or claiming to own, or
occupying, any part thereof or interest therein,
showing, so far as practicable, the interest of each
defendant separately. If the title to any property
sought to be condemned appears to be in the
Republic of the Philippines, although occupied by
private individuals, or if the title is otherwise obscure
or doubtful so that the plaintiff cannot with accuracy
or certainty specify who are the real owners,
averment to that effect may be made in the
complaint.73 (Emphases supplied.)
For sure, defendants in an expropriation case are not
limited to the owners of the property to be
expropriated, and just compensation is not due to the
property owner alone. As this Court held in De
Knecht v. Court of Appeals74:
The defendants in an expropriation case are not
limited to the owners of the property condemned.
They include all other persons owning, occupying or
claiming to own the property. When [property] is
taken by eminent domain, the owner x x x is not
necessarily the only person who is entitled to
compensation. In the American jurisdiction, the term
‘owner’ when employed in statutes relating to
eminent domain to designate the persons who are to
be made parties to the proceeding, refer, as is the
rule in respect of those entitled to compensation, to
all those who have lawful interest in the property to
be condemned, including a mortgagee, a lessee and
a vendee in possession under an executory contract.
Every person having an estate or interest at law or in
equity in the land taken is entitled to share in the
award. If a person claiming an interest in the land
sought to be condemned is not made a party, he is
given the right to intervene and lay claim to the
compensation. (Emphasis supplied.)
At the time of the filing of the Complaint for
Expropriation in 1983, possessory/occupancy rights
of MCFC over the parcels of land sought to be
expropriated were undisputed. In fact, Letter of
Instructions No. 127775 dated November 16, 1982
expressly recognized that portions of the lands
reserved by Presidential Proclamation No. 2239,
also dated November 16, 1982, for the use and
immediate occupation by the NSC, were then
occupied by an idle fertilizer plant/factory and related
facilities of MCFC. It was ordered in the same Letter
of Instruction that:
(1) NSC shall negotiate with the owners of
MCFC, for and on behalf of the Government,
for the compensation of MCFC's present
occupancy rights on the subject lands at an
amount of Thirty (P30.00) Pesos per square
meter or equivalent to the assessed value
thereof (as determined by the City Assessor of
Iligan), whichever is higher. NSC shall give
MCFC the option to either remove its aforesaid
plant, structures, equipment, machinery and
other facilities from the lands or to sell or cede
ownership thereof to NSC at a price equivalent
to the fair market value thereof as appraised
by the Asian Appraisal Inc. as may be mutually
agreed upon by NSC and MCFC.
(2) In the event that NSC and MCFC fail to
agree on the foregoing within sixty (60) days
from the date hereof, the Iron and Steel
Authority (ISA) shall exercise its authority
under Presidential Decree (PD) No. 272, as
amended, to initiate the expropriation of the
aforementioned occupancy rights of MCFC on
the subject lands as well as the plant,
structures, equipment, machinery and related
facilities, for and on behalf of NSC, and
thereafter cede the same to NSC. During the
pendency of the expropriation proceedings,
NSC shall take possession of the properties,
subject to bonding and other requirements of
P.D. 1533. (Emphasis supplied.)
Being the occupant of the parcel of land sought to be
expropriated, MCFC could very well be named a
defendant in Civil Case No. 106. The RTC-Branch 1
evidently erred in dismissing the Complaint for
Expropriation against MCFC for not being a proper
party.
Also erroneous was the dismissal by the RTC-
Branch 1 of the original Complaint for Expropriation
for having been filed only against MCFC, the
occupant of the subject land, but not the owner/s of
the said property.
Dismissal is not the remedy for misjoinder or non-
joinder of parties. According to Rule 3, Section 11 of
the Rules of Court:
SEC. 11. Misjoinder and non-joinder of parties. –
Neither misjoinder nor non-joinder of parties is
ground for dismissal of an action. Parties may be
dropped or added by order of the court on motion of
any party or on its own initiative at any stage of the
action and on such terms as are just. Any claim
against a misjoined party may be severed and
proceeded with separately. (Emphasis supplied.)
MCFC contends that the aforequoted rule does not
apply in this case where the party not joined, i.e., the
owner of the property to be expropriated, is an
indispensable party.
An indispensable party is a party-in-interest without
whom no final determination can be had of an
action.76
Now, is the owner of the property an indispensable
party in an action for expropriation? Not necessarily.
Going back to Rule 67, Section 1 of the Rules of
Court, expropriation proceedings may be instituted
even when "title to the property sought to be
condemned appears to be in the Republic of the
Philippines, although occupied by private
individuals." The same rule provides that a complaint
for expropriation shall name as defendants "all
persons owning or claiming to own, or occupying,
any part thereof or interest" in the property sought to
be condemned. Clearly, when the property already
appears to belong to the Republic, there is no sense
in the Republic instituting expropriation proceedings
against itself. It can still, however, file a complaint for
expropriation against the private persons occupying
the property. In such an expropriation case, the
owner of the property is not an indispensable party.
To recall, Presidential Proclamation No. 2239
explicitly states that the parcels of land reserved to
NSC are part of the public domain, hence, owned by
the Republic. Letter of Instructions No. 1277
recognized only the occupancy rights of MCFC and
directed NSC to institute expropriation proceedings
to determine the just compensation for said
occupancy rights. Therefore, the owner of the
property is not an indispensable party in the original
Complaint for Expropriation in Civil Case No. 106.
Assuming for the sake of argument that the owner of
the property is an indispensable party in the
expropriation proceedings, the non-joinder of said
party would still not warrant immediate dismissal of
the complaint for expropriation. In Vda. De
Manguerra v. Risos,77 the Court applied Rule 3,
Section 11 of the Rules of Court even in case of non-
joinder of an indispensable party, viz:
[F]ailure to implead an indispensable party is not a
ground for the dismissal of an action. In such a case,
the remedy is to implead the non-party claimed to be
indispensable. Parties may be added by order of the
court, on motion of the party or on its own initiative at
any stage of the action and/or such times as are just.
If the petitioner/plaintiff refuses to implead an
indispensable party despite the order of the court,
the latter may dismiss the complaint/petition for the
petitioner's/plaintiff's failure to comply. (Emphasis
supplied.)
In this case, the RTC-Branch 1 did not first require
the Republic to implead the alleged owner/s of the
parcel of land sought to be expropriated. Despite the
absence of any order from the Court, the Republic –
upon becoming aware that the parcels of land
involved in the 1914 Cacho case and 1997 Cacho
case, claimed by Teofilo and LANDTRADE, and
Vidal and AZIMUTH, encroached into and
overlapped with the parcel of land subject of Civil
Case No. 106 – sought leave of court to file a
Supplemental Complaint to implead these four
parties. The RTC-Branch 1 did not take the
Supplemental Complaint of the Republic into
consideration. Instead, it dismissed outright the
original Complaint for Expropriation against MCFC.
Forum shopping
The RTC-Branch 1 further erred in finding that the
Republic committed forum shopping by (1)
simultaneously instituting the actions for
expropriation (Civil Case No. 106) and reversion
(Civil Case No. 6686) for the same parcels of land;
and (2) taking inconsistent positions when it
conceded lack of ownership over the parcels of land
in the expropriation case but asserted ownership of
the same properties in the reversion case.
There is no dispute that the Republic instituted
reversion proceedings (Civil Case No. 6686) for the
same parcels of land subject of the instant
Expropriation Case (Civil Case No. 106). The
Complaint for Cancellation of Titles and
Reversion78 dated September 27, 2004 was filed by
the Republic with the RTC on October 13, 2004. The
records, however, do not show when the
Supplemental Complaint for Expropriation79 dated
September 28, 2004 was filed with the RTC.
Apparently, the Supplemental Complaint for
Expropriation was filed after the Complaint for
Cancellation of Titles and Reversion since the
Republic mentioned in the former the fact of filing of
the latter.80 Even then, the Verification and
Certification of Non-Forum Shopping81 attached to
the Supplemental Complaint for Expropriation did not
disclose the filing of the Complaint for Cancellation of
Titles and Reversion. Notwithstanding such non-
disclosure, the Court finds that the Republic did not
commit forum shopping for filing both Complaints.
In NBI-Microsoft Corporation v Hwang,82 the Court
laid down the circumstances when forum shopping
exists:
Forum-shopping takes place when a litigant files
multiple suits involving the same parties, either
simultaneously or successively, to secure a
favorable judgment.
Thus, it exists where the elements of litis pendentia a
re present, namely: (a) identity of parties, or
at least such parties who represent the same
interests in both actions; (b) identity of rights
asserted and relief prayed for, the relief being
founded on the same facts; and (c) the identity with
respect to the two preceding particulars in the two
cases is such that any judgment that may
be rendered in the pending case, regardless of which
party is successful, would amount to res judicata in
the other case. Forum-shopping is an act of
malpractice because it abuses court processes. x x
x.
Here, the elements of litis pendencia are wanting.
There is no identity of rights asserted and reliefs
prayed for in Civil Case No. 106 and Civil Case No.
6686.
Civil Case No. 106 was instituted against MCFC to
acquire, for a public purpose, its
possessory/occupancy rights over 322,532 square
meters or 32.25 hectares of land which, at the time
of the filing of the original Complaint in 1983, was not
yet covered by any certificate of title. On the other
hand, Civil Case No. 6686 sought the cancellation of
OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.), which was
entered into registration on December 4, 1998 in
Doña Demetria’s name, on the argument that the
parcels of land covered by said certificates exceeded
the areas granted by the LRC to Doña Demetria in
GLRO Record Nos. 6908 and 6909, as affirmed by
this Court in the 1914 Cacho case.
Expropriation vis-à-vis reversion
The Republic is not engaging in contradictions when
it instituted both expropriation and reversion
proceedings for the same parcels of land. The
expropriation and reversion proceedings are distinct
remedies that are not necessarily exclusionary of
each other.
The filing of a complaint for reversion does not
preclude the institution of an action for expropriation.
Even if the land is reverted back to the State, the
same may still be subject to expropriation as against
the occupants thereof.
Also, Rule 67, Section 1 of the Rules of Court allows
the filing of a complaint for expropriation even when
"the title to any property sought to be condemned
appears to be in the Republic of the Philippines,
although occupied by private individuals, or if the title
is otherwise obscure or doubtful so that the plaintiff
cannot with accuracy or certainty specify who are the
real owners." Rule 67, Section 9 of the Rules of
Court further provides:
SEC. 9. Uncertain ownership; conflicting claims. – If
the ownership of the property taken is uncertain,
or there are conflicting claims to any part
thereof, the court may order any sum or sums
awarded as compensation for the property to be paid
to the court for the benefit of the person adjudged in
the same proceeding to be entitled thereto. But the
judgment shall require the payment of the sum or
sums awarded to either the defendant or the court
before the plaintiff can enter upon the property, or
retain it for the public use or purpose if entry has
already been made. (Emphasis supplied.)
Hence, the filing by the Republic of the Supplemental
Complaint for Expropriation impleading Teofilo,
Vidal, LANDTRADE, and AZIMUTH, is not
necessarily an admission that the parcels of land
sought to be expropriated are privately owned. At
most, the Republic merely acknowledged in its
Supplemental Complaint that there are private
persons also claiming ownership of the parcels of
land. The Republic can still consistently assert, in
both actions for expropriation and reversion, that the
subject parcels of land are part of the public domain.
In sum, the RTC-Branch 1 erred in dismissing the
original Complaint and disallowing the Supplemental
Complaint in Civil Case No. 106. The Court reverses
and sets aside the Resolutions dated July 12, 2005
and October 24, 2005 of the RTC-Branch 1 in Civil
Case 106, and reinstates the Complaint for
Reversion of the Republic.
The Quieting of Title Case
(G.R. Nos. 178779 and 178894)
Essentially, in their Petitions for Review on Certiorari
under Rule 45 of the Rules of Court, LANDTRADE
and Teofilo, and/or Atty. Cabildo are calling upon this
Court to determine whether the Court of Appeals, in
its Decision dated January 19, 2007 in CA-G.R. CV
No. 00456, erred in (1) upholding the jurisdiction of
the RTC-Branch 3 to resolve the issues on Vidal's
status, filiation, and heirship in Civil Case No. 4452,
the action for quieting of title; (2) not holding that
Vidal and AZIMUTH have neither cause of action nor
legal or equitable title or interest in the parcels of
land covered by OCT Nos. 0-1200 (a.f.) and 0-1201
(a.f.); (3) finding the evidence sufficient to establish
Vidal’s status as Doña Demetria’s granddaughter
and sole surviving heir; and (4) not holding that Civil
Case No. 4452 was already barred by prescription.
In their Comment, Vidal and AZIMUTH insisted on
the correctness of the Court of Appeals Decision
dated January 19, 2007, and questioned the
propriety of the Petition for Review filed by
LANDTRADE as it supposedly raised only factual
issues.
The Court rules in favor of Vidal and AZIMUTH.
Petitions for review under Rule 45
A scrutiny of the issues raised, not just in the Petition
for Review of LANDTRADE, but also those in the
Petition for Review of Teofilo and/or Atty. Cabildo,
reveals that they are both factual and legal.
The Court has held in a long line of cases that in a
petition for review on certiorari under Rule 45 of the
Rules of Court, only questions of law may be raised
as the Supreme Court is not a trier of facts. It is
settled that as a rule, the findings of fact of the Court
of Appeals especially those affirming the trial court
are final and conclusive and cannot be reviewed on
appeal to the Supreme Court. The exceptions to this
rule are: (a) when the conclusion is a finding
grounded entirely on speculations, surmises or
conjectures; (b) when the inference made is
manifestly mistaken, absurd or impossible; (c) when
there is grave abuse of discretion; (d) when the
judgment is based on a misapprehension of facts; (e)
when the findings of fact are conflicting; (f) when the
Court of Appeals, in making its findings, went beyond
the issues of the case and the same is contrary to
the admissions of both appellant and appellee; (g)
where the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties and
which, if properly considered, would justify a different
conclusion; and (h) where the findings of fact of the
Court of Appeals are contrary to those of the trial
court, or are mere conclusions without citation of
specific evidence, or where the facts set forth by the
petitioner are not disputed by the respondent, or
where the findings of fact of the Court of Appeals are
premised on absence of evidence but are
contradicted by the evidence on record.83 None of
these exceptions exists in the Petitions at bar.
Be that as it may, the Court shall address in full-
length all the issues tendered in the instant Petitions
for Review, even when factual, if only to bolster the
conclusions reached by the RTC-Branch 3 and the
Court of Appeals, with which the Court fully concurs.
Jurisdiction vis-à-vis exercise of jurisdiction
LANDTRADE, Teofilo, and/or Atty. Cabildo argue
that the RTC-Branch 3 had no jurisidiction to resolve
the issues of status, filiation, and heirship in an
action for quieting of title as said issues should be
ventilated and adjudicated only in special
proceedings under Rule 90, Section 1 of the Rules of
Court, pursuant to the ruling of this Court in Agapay
v. Palang84 (Agapay case) and Heirs of Guido
Yaptinchay and Isabel Yaptinchay v. Del
Rosario85 (Yaptinchay case). Even on the
assumption that the RTC-Branch 3 acquired
jurisdiction over their persons, LANDTRADE, Teofilo,
and/or Atty. Cabildo maintain that the RTC-Branch 3
erred in the exercise of its jurisdiction by adjudicating
and passing upon the issues on Vidal’s status,
filiation, and heirship in the Quieting of Title Case.
Moreover, LANDTRADE, Teofilo, and/or Atty.
Cabildo aver that the resolution of issues regarding
status, filiation, and heirship is not merely a matter of
procedure, but of jurisdiction which cannot be waived
by the parties or by the court.
The aforementioned arguments fail to persuade.
In the first place, jurisdiction is not the same as the
exercise of jurisdiction. The Court distinguished
between the two, thus:
Jurisdiction is not the same as the exercise of
jurisdiction. As distinguished from the exercise of
jurisdiction, jurisdiction is the authority to decide a
cause, and not the decision rendered therein. Where
there is jurisdiction over the person and the
subject matter, the decision on all other
questions arising in the case is but an exercise
of the jurisdiction. And the errors which the court
may commit in the exercise of jurisdiction are merely
errors of judgment which are the proper subject of an
appeal.86 (Emphasis supplied.)
Here, the RTC-Branch 3 unmistakably had
jurisdiction over the subject matter and the parties in
Civil Case No. 4452.
Jurisdiction over the subject matter or nature of the
action is conferred only by the Constitution or by law.
Once vested by law on a particular court or body, the
jurisdiction over the subject matter or nature of the
action cannot be dislodged by anybody other than by
the legislature through the enactment of a law. The
power to change the jurisdiction of the courts is a
matter of legislative enactment, which none but the
legislature may do. Congress has the sole power to
define, prescribe and apportion the jurisdiction of the
courts.87
The RTC has jurisdiction over an action for quieting
of title under the circumstances described in Section
19(2) of Batas Pambansa Blg. 129, as amended:
SEC. 19. Jurisdiction in civil cases. – Regional Trial
Courts shall exercise exclusive original jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or
possession of, real property, or any interest therein,
where the assessed value of the property involved
exceeds Twenty thousand pesos (₱20,000.00) or, for
civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (₱50,000.00) except
actions for forcible entry into and unlawful detainer of
lands or buildings, original jurisdiction over which is
conferred upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts.
Records show that the parcels of land subject of Civil
Case No. 4452 have a combined assessed value of
₱35,398,920.00,88 undisputedly falling within the
jurisdiction of the RTC-Branch 3.
The RTC-Branch 3 also acquired jurisdiction over the
person of Teofilo when he filed his Answer to the
Complaint of Vidal and AZIMUTH; and over the
juridical personality of LANDTRADE when the said
corporation was allowed to intervene in Civil Case
No. 4452.
Considering that the RTC-Branch 3 had jurisdiction
over the subject matter and parties in Civil Case No.
4452, then it can rule on all issues in the case,
including those on Vidal’s status, filiation, and
heirship, in exercise of its jurisdiction. Any alleged
erroneous finding by the RTC-Branch 3 concerning
Vidal’s status, filiation, and heirship in Civil Case No.
4452, is merely an error of judgment subject to the
affirmation, modification, or reversal by the appellate
court when appealed.
The Agapay and Yaptinchay cases
LANDTRADE, Teofilo, and/or Atty. Cabildo cannot
rely on the cases of Agapay and Yaptinchay to
support their position that declarations on Vidal’s
status, filiation, and heirsip, should be made in
special proceedings and not in Civil Case No. 4452.
In the Agapay case, the deceased Miguel Agapay
(Miguel) contracted two marriages. Miguel married
Carlina (sometimes referred to as Cornelia) in 1949,
and they had a daughter named Herminia, who was
born in 1950. Miguel left for Hawaii a few months
after his wedding to Carlina. When Miguel returned
to the Philippines in 1972, he did not live with Carlina
and Herminia. He married Erlinda in 1973, with
whom he had a son named Kristopher, who was
born in 1977. Miguel died in 1981. A few months
after Miguel’s death, Carlina and Herminia filed a
complaint for recovery of ownership and possession
with damages against Erlinda over a riceland and
house and lot in Pangasinan, which were allegedly
purchased by Miguel during his cohabitation with
Erlinda. The RTC dismissed the complaint, finding
little evidence that the properties pertained to the
conjugal property of Miguel and Carlina. The RTC
went on to provide for the intestate shares of the
parties, particularly of Kristopher, Miguel’s
illegitimate son. On appeal, the Court of Appeals: (1)
reversed the RTC judgment; (2) ordered Erlinda to
vacate and deliver the properties to Carlina and
Herminia; and (3) ordered the Register of Deeds to
cancel the Transfer Certificates of Title (TCTs) over
the subject property in the name of Erlinda and to
issue new ones in the names of Carlina and
Herminia. Erlinda filed a Petition for Review with this
Court.
In resolving Erlinda’s Petition, the Court held in the
Agapay case that Article 148 of the Family Code
applied to Miguel and Erlinda. Article 148 specifically
governs the property relations of a man and a
woman who are not capacitated to marry each other
and live exclusively with each other as husband and
wife without the benefit of marriage or under a void
marriage. Under said provision, only the properties
acquired by both parties through their actual joint
contribution of money, property, or industry shall be
owned by them in common in proportion to their
respective contributions. In this case, the Court
found that the money used to buy the subject
properties all came from Miguel.
The Court then proceeded to address another issue
in the Agapay case, more relevant to the one at bar:
The second issue concerning Kristopher Palang’s
status and claim as an illegitimate son and heir to
Miguel’s estate is here resolved in favor of
respondent court’s correct assessment that the trial
court erred in making pronouncements regarding
Kristopher’s heirship and filiation "inasmuch as
questions as to who are the heirs of the decedent,
proof of filiation of illegitimate children and the
determination of the estate of the latter and claims
thereto should be ventilated in the proper probate
court or in a special proceeding instituted for the
purpose and cannot be adjudicated in the instant
ordinary civil action which is for recovery of
ownership and possession."89
The Yaptinchay case involved two parcels of land in
Cavite which were supposedly owned by Guido and
Isabel Yaptinchay (spouses Yaptinchay). Upon the
death of the spouses Yaptinchay, their heirs
(Yaptinchay heirs) executed an Extra-Judicial
Settlement of the deceased spouses’ estate.
However, the Yaptinchay heirs discovered that the
properties were already covered by TCTs in the
name of Golden Bay Realty Corporation (Golden
Bay), prompting the Yaptinchay heirs to file with the
RTC a complaint against Golden Bay for the
annulment and/or declaration of nullity of TCT Nos.
493363 to 493367 and all their derivatives, or in the
alternative, the reconveyance of realty with a prayer
for a writ of preliminary injunction and/or restraining
order with damages. The Yaptinchay heirs later filed
an amended complaint to include additional
defendants to whom Golden Bay sold portions of the
subject properties. The RTC initially dismissed the
amended complaint, but acting on the motion for
reconsideration of the Yaptinchay heirs, eventually
allowed the same. Golden Bay and its other co-
defendants presented a motion to dismiss the
amended complaint, which was granted by the RTC.
The Yaptinchay heirs came before this Court via a
Petition for Certiorari.
The Court first observed in the Yaptinchay case that
the Yaptinchay heirs availed themselves of the
wrong remedy. An order of dismissal is the proper
subject of an appeal, not a petition for certiorari.
Next, the Court affirmed the dismissal of the
amended complaint, thus:
Neither did the respondent court commit grave
abuse of discretion in issuing the questioned Order
dismissing the Second Amended Complaint of
petitioners, x x x.
xxxx
In Litam, etc., et al. v. Rivera, this court opined that
the declaration of heirship must be made in an
administration proceeding, and not in an
independent civil action. This doctrine was reiterated
in Solivio v. Court of Appeals where the court held:
"In Litam, et al. v. Rivera, 100 Phil. 364, where
despite the pendency of the special proceedings for
the settlement of the intestate estate of the deceased
Rafael Litam, the plaintiffs-appellants filed a civil
action in which they claimed that they were the
children by a previous marriage of the deceased to a
Chinese woman, hence, entitled to inherit his one-
half share of the conjugal properties acquired during
his marriage to Marcosa Rivera, the trial court in the
civil case declared that the plaintiffs-appellants were
not children of the deceased, that the properties in
question were paraphernal properties of his wife,
Marcosa Rivera, and that the latter was his only heir.
On appeal to this Court, we ruled that ‘such
declarations (that Marcosa Rivera was the only heir
of the decedent) is improper, in Civil Case No. 2071,
it being within the exclusive competence of the court
in Special Proceedings No. 1537, in which it is not as
yet, in issue, and, will not be, ordinarily, in issue until
the presentation of the project of partition.’ (p. 378)."
The trial court cannot make a declaration of heirship
in the civil action for the reason that such a
declaration can only be made in a special
proceeding. Under Section 3, Rule 1 of the 1997
Revised Rules of Court, a civil action is defined as
"one by which a party sues another for the
enforcement or protection of a right, or the
prevention or redress of a wrong’ while a special
proceeding is "a remedy by which a party seeks to
establish a status, a right, or a particular fact." It is
then decisively clear that the declaration of heirship
can be made only in a special proceeding inasmuch
as the petitioners here are seeking the establishment
of a status or right.90
LANDTRADE, Teofilo, and/or Atty. Cabildo missed
one vital factual distinction between the Agapay and
Yaptinchay cases, on one hand, and the present
Petitions, on the other, by reason of which, the Court
shall not apply the prior two to the last.
The Agapay and Yaptinchay cases, as well as the
cases of Litam v. Rivera91 and Solivio v. Court of
Appeals,92 cited in the Yaptinchay case, all arose
from actions for reconveyance; while the instant
Petitions stemmed from an action for quieting of title.
The Court may have declared in previous cases that
an action for reconveyance is in the nature of an
action for quieting of title,93 but the two are distinct
remedies.
Ordinary civil action for reconveyance vis-a-vis
special proceeding for quieting of title
The action for reconveyance is based on Section 55
of Act No. 496, otherwise known as the Land
Registration Act, as amended, which states "[t]hat in
all cases of registration procured by fraud the owner
may pursue all his legal and equitable remedies
against the parties to such fraud, without prejudice,
however, to the rights of any innocent holder for
value of a certificate of title."
The Court, in Heirs of Eugenio Lopez, Sr. v.
Enriquez,94 described an action for reconveyance as
follows:
An action for reconveyance is an action in personam
available to a person whose property has been
wrongfully registered under the Torrens system in
another’s name. Although the decree is recognized
as incontrovertible and no longer open to review, the
registered owner is not necessarily held free from
liens. As a remedy, an action for reconveyance is
filed as an ordinary action in the ordinary courts of
justice and not with the land registration court.
Reconveyance is always available as long as the
property has not passed to an innocent third person
for value. x x x (Emphases supplied.)
On the other hand, Article 476 of the Civil Code lays
down the circumstances when a person may institute
an action for quieting of title:
ART. 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any
instrument, record, claim, encumbrance or
proceeding which is apparently valid or effective but
is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title,
an action may be brought to remove such cloud or to
quiet the title.
An action may also be brought to prevent a cloud
from being cast upon title to real property or any
interest therein.
In Calacala v. Republic,95 the Court elucidated on the
nature of an action to quiet title:
Regarding the nature of the action filed before the
trial court, quieting of title is a common law remedy
for the removal of any cloud upon or doubt or
uncertainty with respect to title to real property.
Originating in equity jurisprudence, its purpose is to
secure ‘x x x an adjudication that a claim of title to or
an interest in property, adverse to that of the
complainant, is invalid, so that the complainant and
those claiming under him may be forever afterward
free from any danger of hostile claim.’ In an action
for quieting of title, the competent court is tasked to
determine the respective rights of the complainant
and other claimants, ‘x x x not only to place things in
their proper place, to make the one who has no
rights to said immovable respect and not disturb the
other, but also for the benefit of both, so that he who
has the right would see every cloud of doubt over the
property dissipated, and he could afterwards without
fear introduce the improvements he may desire, to
use, and even to abuse the property as he deems
best x x x . (Emphases supplied.)
The Court expounded further in Spouses Portic v.
Cristobal96 that:
Suits to quiet title are characterized as proceedings
quasi in rem. Technically, they are neither in rem nor
in personam. In an action quasi in rem, an individual
is named as defendant. However, unlike suits in rem,
a quasi in rem judgment is conclusive only between
the parties.
Generally, the registered owner of a property is the
proper party to bring an action to quiet title. However,
it has been held that this remedy may also be
availed of by a person other than the registered
owner because, in the Article reproduced above,
"title" does not necessarily refer to the original or
transfer certificate of title. Thus, lack of an actual
certificate of title to a property does not necessarily
bar an action to quiet title. x x x (Emphases
supplied.)
The Court pronounced in the Agapay and
Yaptinchay cases that a declaration of heirship
cannot be made in an ordinary civil action such as an
action for reconveyance, but must only be made in a
special proceeding, for it involves the establishment
of a status or right.
The appropriate special proceeding would have been
the settlement of the estate of the decedent.
Nonetheless, an action for quieting of title is also a
special proceeding, specifically governed by Rule 63
of the Rules of Court on declaratory relief and similar
remedies.97 Actions for declaratory relief and other
similar remedies are distinguished from ordinary civil
actions because:
2. In declaratory relief, the subject-matter is a deed,
will, contract or other written instrument, statute,
executive order or regulation, or ordinance. The
issue is the validity or construction of these
documents. The relief sought is the declaration of the
petitioner’s rights and duties thereunder.
The concept of a cause of action in ordinary civil
actions does not apply to declaratory relief as this
special civil action presupposes that there has been
no breach or violation of the instruments involved.
Consequently, unlike other judgments, the judgment
in an action for declaratory relief does not essentially
entail any executional process as the only relief to be
properly granted therein is a declaration of the rights
and duties of the parties under the instrument,
although some exceptions have been recognized
under certain situations.98
Civil Case No. 4452 could not be considered an
action for reconveyance as it is not based on the
allegation that the two parcels of land, Lots 1 and 2,
have been wrongfully registered in another person’s
name. OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.),
covering the subject properties, are still in Doña
Demetria’s name. Vidal and Teofilo each claims to
have inherited the two parcels of land from the late
Doña Demetria as said decedent’s sole heir, but
neither Vidal nor Teofilo has been able to transfer
registration of the said properties to her/his name as
of yet.
Instead, Civil Case No. 4452 is indisputably an
action for quieting of title, a special proceeding
wherein the court is precisely tasked to determine
the rights of the parties as to a particular parcel of
land, so that the complainant and those claiming
under him/her may be forever free from any danger
of hostile claim. Vidal asserted title to the two parcels
of land as Doña Demetria’s sole heir. The cloud on
Vidal’s title, which she sought to have removed, was
Teofilo’s adverse claim of title to the same
properties, also as Doña Demetria’s only heir. For it
to determine the rights of the parties in Civil Case
No. 4452, it was therefore crucial for the RTC-
Branch 3 to squarely make a finding as to the status,
filiation, and heirship of Vidal in relation to those of
Teofilo. A finding that one is Doña Demetria’s sole
and rightful heir would consequently exclude and
extinguish the claim of the other.
Even assuming arguendo that the proscription in the
Agapay and Yaptinchay cases against making
declarations of heirship in ordinary civil actions also
extends to actions for quieting of title, the same is
not absolute.
In Portugal v. Portugal-Beltran99 (Portugal case), the
Court recognized that there are instances when a
declaration of heirship need not be made in a
separate special proceeding:
The common doctrine in Litam, Solivio and Guilas in
which the adverse parties are putative heirs to the
estate of a decedent or parties to the special
proceedings for its settlement is that if the special
proceedings are pending, or if there are no special
proceedings filed but there is, under the
circumstances of the case, a need to file one, then
the determination of, among other issues, heirship
should be raised and settled in said special
proceedings. Where special proceedings had been
instituted but had been finally closed and terminated,
however, or if a putative heir has lost the right to
have himself declared in the special proceedings as
co-heir and he can no longer ask for its re-opening,
then an ordinary civil action can be filed for his
declaration as heir in order to bring about the
annulment of the partition or distribution or
adjudication of a property or properties belonging to
the estate of the deceased.100
In the Portugal case itself, the Court directed the trial
court to already determine petitioners’ status as heirs
of the decedent even in an ordinary civil action, i.e.,
action for annulment of title, because:
It appearing x x x that in the present case the only
property of the intestate estate of Portugal is the
Caloocan parcel of land, to still subject it, under the
circumstances of the case, to a special proceeding
which could be long, hence, not expeditious, just to
establish the status of petitioners as heirs is not only
impractical; it is burdensome to the estate with the
costs and expenses of an administration proceeding.
And it is superfluous in light of the fact that the
parties to the civil case—subject of the present case,
could and had already in fact presented evidence
before the trial court which assumed jurisdiction over
the case upon the issues it defined during pre-trial.
In fine, under the circumstances of the present case,
there being no compelling reason to still subject
Portugal’s estate to administration proceedings since
a determination of petitioners’ status as heirs could
be achieved in the civil case filed by petitioners, the
trial court should proceed to evaluate the evidence
presented by the parties during the trial and render a
decision thereon upon the issues it defined during
pre-trial, x x x.101
Another case, Heirs of Teofilo Gabatan v. Court of
Appeals102 (Gabatan case), involved an action for
recovery of ownership and possession of property
with the opposing parties insisting that they are the
legal heirs of the deceased. Recalling the Portugal
case, the Court ruled:
Similarly, in the present case, there appears to be
only one parcel of land being claimed by the
contending parties as their inheritance from Juan
Gabatan. It would be more practical to dispense with
a separate special proceeding for the determination
of the status of respondent as the sole heir of Juan
Gabatan, specially in light of the fact that the parties
to Civil Case No. 89-092, had voluntarily submitted
the issue to the RTC and already presented their
evidence regarding the issue of heirship in these
proceeding. Also the RTC assumed jurisdiction over
the same and consequently rendered judgment
thereon.
In Fidel v. Court of Appeals103 (Fidel case), therein
respondents, the heirs of the late Vicente Espineli
(Vicente) from his first marriage, instituted an action
to annul the sale of Vicente’s property to therein
petitioners, the spouses Fidel. The subject property
was sold to petitioners by Vicente’s heirs from his
second marriage. Even though one’s legitimacy can
only be questioned in a direct action seasonably filed
by the proper party, the Court held that it was
necessary to pass upon respondents’ relationship to
Vicente in the action for annulment of sale so as to
determine respondents’ legal rights to the subject
property. In fact, the issue of whether respondents
are Vicente’s heirs was squarely raised by
petitioners in their Pre-Trial Brief. Hence, petitioners
were estopped from assailing the ruling of the trial
court on respondents’ status.
In Civil Case No. 4452, Teofilo and/or Atty. Cabildo
themselves asked the RTC-Branch 3 to resolve the
issue of Vidal's legal or beneficial ownership of the
two parcels of land.104 During trial, Vidal already
presented before the RTC-Branch 3 evidence to
establish her status, filiation, and heirship. There is
no showing that Doña Demetria left any other
property that would have required special
administration proceedings. In the spirit of the
Portugal, Gabatan, and Fidel cases, the Court
deems it more practical and expeditious to settle the
issue on Vidal’s status, filiation, and heirship in Civil
Case No. 4452.
"Title" in quieting of title
LANDTRADE, Teofilo, and/or Atty. Cabildo further
contend that Vidal and AZIMUTH have no cause of
action for quieting of title since Vidal has no title to
the two parcels of land. In comparison, Teofilo’s title
to the same properties, as Doña Demetria’s only
heir, was already established and recognized by this
Court in the 1997 Cacho case.
Again, the Court cannot sustain the foregoing
contention of LANDTRADE, Teofilo, and/or Atty.
Cabildo.
It must be borne in mind that the concept of a cause
of action in ordinary civil actions does not apply to
quieting of title. In declaratory relief, the subject-
matter is a deed, will, contract or other written
instrument, statute, executive order or regulation, or
ordinance. The issue is the validity or construction of
these documents. The relief sought is the declaration
of the petitioner’s rights and duties thereunder. Being
in the nature of declaratory relief, this special civil
action presupposes that there has yet been no
breach or violation of the instruments involved.105
In an action for quieting of title, the subject matter is
the title sought to have quieted. "Title" is not limited
to the certificate of registration under the Torrens
System (i.e., OCT or TCT). Pursuant to Article 477 of
the Civil Code, the plaintiff must have legal or
equitable title to, or interest in, the real property
subject of the action for quieting of title. The plaintiff
need not even be in possession of the property. If
she is indeed Doña Demetria’s sole heir, Vidal
already has equitable title to or interest in the two
parcels of land by right of succession, even though
she has not yet secured certificates of title to the said
properties in her name.
LANDTRADE, Teofilo, and/or Atty. Cabildo
mistakenly believe that the 1997 Cacho case had
conclusively settled Teofilo's identity and existence
as Doña Demetria’s sole heir. They failed to
appreciate that the 1997 Cacho case involved
Teofilo’s petition for reconstitution of title, treated as
a petition for the re-issuance of Decree Nos. 10364
and 18969. The grant by the RTC of Teofilo’s
petition, affirmed by this Court, only conclusively
established the prior issuance and existence and the
subsequent loss of the two decrees, thus, entitling
Teofilo to the re-issuance of the said decrees in their
original form and condition.
As the Court of Appeals pointed out in its assailed
Decision dated January 19, 2007, the issue of
Teofilo’s heirship was not the lis mota of the 1997
Cacho case. It was addressed by the Court in the
1997 Cacho case for the simple purpose of
determining Teofilo’s legal interest in filing a petition
for the re-issuance of the lost decrees. The Court
merely found therein that Teofilo’s Affidavit of
Adjudication, executed in the U.S.A. before the
Philippine Consulate General, enjoyed the
presumption of regularity and, thus, sufficiently
established Teofilo’s legal interest. The 1997 Cacho
case, however, did not conclusively settle that
Teofilo is indeed Doña Demetria’s only heir and the
present owner, by right of succession, of the subject
properties.
Factual findings of the RTC-Branch 3 and the Court
of Appeals
LANDTRADE, Teofilo, and/or Atty. Cabildo
additionally posit that the evidence presented by
Vidal and AZIMUTH were insufficient to prove the
fact of Vidal's filiation and heirship to Doña Demetria.
LANDTRADE, Teofilo, and/or Atty. Cabildo
particularly challenged the reliance of the RTC-
Branch 3 on Vidal’s baptismal certificate, arguing
that it has no probative value and is not conclusive
proof of filiation.
Alternative means of proving an individual’s filiation
have been recognized by this Court in Heirs of
Ignacio Conti v. Court of Appeals.106 The property in
litigation in said case was co-owned by Lourdes
Sampayo (Sampayo) and Ignacio Conti, married to
Rosario Cuario (collectively referred to as the
spouses Conti). Sampayo died without issue.
Therein respondents, claiming to be Sampayo’s
collateral relatives, filed a petition for partition of the
subject property, plus damages. To prove that they
were collaterally related to Sampayo through the
latter’s brothers and sisters, respondents submitted
photocopies of the birth certificates, certifications on
the non-availability of records of births, and certified
true copies of the baptismal certificates of
Sampayo’s siblings. The spouses Conti questioned
the documentary evidence of respondents’ filiation
on the ground that these were incompetent and
inadmissible, but the Court held that:
Under Art. 172 of the Family Code, the filiation of
legitimate children shall be proved by any other
means allowed by the Rules of Court and special
laws, in the absence of a record of birth or a parent’s
admission of such legitimate filiation in a public or
private document duly signed by the parent. Such
other proof of one’s filiation may be a baptismal
certificate, a judicial admission, a family Bible in
which his name has been entered, common
reputation respecting his pedigree, admission by
silence, the testimonies of witnesses and other kinds
of proof admissible under Rule 130 of the Rules of
Court. By analogy, this method of proving filiation
may also be utilized in the instant case.
xxxx
The admissibility of baptismal certificates offered by
Lydia S. Reyes, absent the testimony of the
officiating priest or the official recorder, was settled in
People v. Ritter, citing U.S. v. de Vera (28 Phil. 105
[1914]), thus -
x x x the entries made in the Registry Book may be
considered as entries made in the course of the
business under Section 43 of Rule 130, which is an
exception to the hearsay rule. The baptisms
administered by the church are one of its
transactions in the exercise of ecclesiastical duties
and recorded in the book of the church during the
course of its business.
It may be argued that baptismal certificates are
evidence only of the administration of the sacrament,
but in this case, there were four (4) baptismal
certificates which, when taken together, uniformly
show that Lourdes, Josefina, Remedios and Luis had
the same set of parents, as indicated therein.
Corroborated by the undisputed testimony of
Adelaida Sampayo that with the demise of Lourdes
and her brothers Manuel, Luis and sister Remedios,
the only sibling left was Josefina Sampayo Reyes,
such baptismal certificates have acquired evidentiary
weight to prove filiation.107
Thus, Vidal’s baptismal certificate is not totally bereft
of any probative value. It may be appreciated,
together with all the other documentary and
testimonial evidence submitted on Vidal’s filiation, to
wit:
The first issue proposed by petitioners for resolution
is whether or not petitioner Demetria C. Vidal is the
sole surviving heir of the late Doña Demetria Cacho.
To prove that, indeed, she is the sole surviving heir
of the late Doña Demetria Cacho, she testified in
open court and identified the following documentary
evidence, to wit:
Exhibit "A" – Birth Certificate of Demetria C.
Vidal
Exhibit "B" – Partida de Bautismo of Demetria
C. Vidal
Exhibit "C" – Certificate of Baptism Demetria
C. Vidal
Exhibit "D" – Cacho Family Tree
Exhibit "D-1" – Branch of Demetria Cacho
Exhibit "F" – Death Certificate of Demetria
Cacho.
Exhibit "P" – Driver’s license of Demetria C.
Vidal.
Exhibit "Q" to "Q5" – The book entitled
"CACHO", the introductory page on March
1988 when the data were compiled, page 58
on the Vidal branch of the Cacho family, page
62 on Demetria Cacho and her descendants,
page 69 on the family member with the then
latest birth day 26 March 1988, and page 77
with the picture of Demetria Cacho Vidal,
Dionisio Vidal and Francisco Vidal.108
In contrast, LANDTRADE, Teofilo, and/or Atty.
Cabildo failed to present any evidence at all in
support of their claims. According to the RTC-Branch
3:
Landtrade was also declared to have waived its right
to present evidence on its defense and counterclaim
in the above-entitled case in view of its failure to
present evidence on their scheduled trial date.
xxxx
Since respondents Teofilo Cacho and Atty.
Godofredo Cabildo opted not to adduce evidence in
this case as they failed to appear during the
scheduled trial dates, the court shall decide on the
basis of the evidence for the respondents-intervenor
and petitioners.109
Based on the evidence presented before it, the RTC-
Branch 3 made the following factual findings:
From the evidence adduced, both testimonial and
documentary, the court is convinced that petitioner
Vidal is the granddaughter of Demetria Cacho Vidal,
the registered owner of the subject property covered
by decree Nos. 10364 & 18969, reissued as Decrees
No. 19364 and No. 16869. Such being the case, she
is an heir of Demetria Cacho Vidal.
Petitioner Vidal’s Certificate of Birth (Exh. "A") shows
that she was born on June 3, 1941, with the name
Demetria Vidal. [Her] father was Francisco Vidal and
her mother was Fidela Confesor, Francisco Vidal is
the son of Dionisio Vidal and Demetria Cacho as
shown by [his] Partida de Bautismo (Baptismal
Certificate). Moreover, it was shown in the same
document that her godmother was Demetria Cacho.
By inference, this Demetria Cacho is actually
Demetria Cacho Vidal because she was married to
Dionisio Vidal, the father of Francisco Vidal.
Now then, is Demetria Cacho Vidal the same person
referred to in Cacho v. Government of the United
States (28 Phil. 616 [1914])? Page 618, Vol. 28 of
the Philippine Reports would indicate that the
applicant for registration was Doña Demetria Cacho
y Soriano (Exh. "R-1"). The Death Certificate of
Demetria Cacho Vidal shows that her mother was
Candelaria Soriano (Exh. "F"). Necessarily, they are
one and the same person. This is further confirmed
by the fact that the husband of Demetria Cacho
Vidal, Señor Dionisio Vidal, was quoted in pp. 629-
630 of the aforecited decision as the husband of
Demetria Cacho (Exh. "R-3").
The book "CACHO" (Exhs. "Q" to "Q-5") and the
Cacho Family Tree (Exhs. "D" to "D-1") further
strengthen the aforecited findings of this Court.
It was established by petitioner Vidal’s own
testimony that at the time of Doña Demetria Cacho's
death, she left no heir other than petitioner Vidal. Her
husband, Don Dionisio, died even before the war,
while her only child, Francisco Cacho Vidal – xxx
Vidal’s father – died during the war. Petitioner’s only
sibling – Francisco Dionisio – died at childbirth.
xxxx
The next factual issue proposed by petitioners is
whether or not respondent Teofilo Cacho is the son
or heir of the late Doña Demetria Cacho. The
following facts and circumstances negate the
impression that he is the son, as he claims to be, of
Doña Demetria Cacho. Thus:
a) Doña Demetria Cacho was married to Don
Dionisio Vidal, and thus her full name was
Doña Demetria Cacho Vidal. Her only child,
expectedly, carried the surname Vidal
(Francisco Cacho Vidal). Had Teofilo Cacho
actually been a son of Demetria Cacho, he
would and should have carried the name
"Teofilo Cacho Vidal", but he did not.
b) Teofilo Cacho admits to being married to
one Elisa Valderrama in the Special Power of
Attorney he issued to Atty. Godofredo
[Cabildo] (Exh. "O"). Teofilo Cacho married
Elisa Valderrama on 27 May 1953, in the
Parish of the Immaculate Conception, Bani,
Pangasinan. The Certificate of Marriage
shows that Teofilo Cacho is the son of Agustin
Cacho and Estefania Cordial, not Demetria
Cacho. In his Certificate of Baptism (Exh. "G"),
he was born to Agustin Cacho and Estefania
Cordial on May 1930 (when Doña Demetria
Cacho was already 50 years old).
c) The Cacho Family Tree (Exh. "D") (that is,
the Cacho Family to which Doña Demetria
Cacho belonged) as well as the book on the
Cacho Family (Exh. "Q") are bereft of any
mention of Teofilo Cacho or his wife Elisa
Valderrama, or even his real father Agustin
Cacho, or mother Estefania Cordial. They are
not known to be related to the Cacho family of
Doña Demetria Cacho.
d) Paragraph 1.11 of the Petition charges
respondent Teofilo Cacho of having falsely
and fraudulently claiming to be the son and
sole heir of the late Doña Demetria Cacho. In
his answer to this particular paragraph, he
denied the same for lack of knowledge or
information to form a belief. He should know
whether this allegation is true or not because it
concerns him. If true, he should admit and if
false, he opted to deny the charges for lack of
knowledge or information to form a belief. The
Court considers his denial as an admission of
the allegation that he is falsely and
fraudulently claiming to be the son and sole
heir of the late Doña Demetria Cacho.110
Considering the aforequoted factual findings, the
RTC-Branch 3 arrived at the following legal
conclusions, quieting the titles of Vidal and
AZIMUTH, viz:
The first proposed legal issue to be resolved had
been amply discussed under the first factual issue.
Certainly, petitioner Vidal has hereditary rights,
interest, or title not only to a portion of the Subject
Property but to the entire property left by the late
Doña Demetria Cacho Vidal, subject, however, to the
Deed of Conditional Conveyance executed by
petitioner Vidal of a portion of the Subject Property in
favor of petitioner Azimuth International
Development Corporation (Exh. "J") executed
pursuant to their Memorandum of Agreement (Exh.
"I"). Consequently, it goes without saying that
petitioner Azimuth International Development
Corporation has a right, interest in, or title to a
portion of the subject property.
As discussed earlier in this decision, Teofilo Cacho,
not being the son, as he claims to be, of the late
Doña Demetria Cacho Vidal, has no hereditary rights
to the Subject Property left by Doña Demetria Cacho
Vidal. He failed to show any evidence that he is the
son of the late Doña Demetria Cacho Vidal as he
and his co respondent, Atty. Godofredo Cabildo,
even failed to appear on the scheduled trial date.
It is, therefore, safe to conclude that respondents
Teofilo Cacho and/or Atty. Godofredo Cabildo and
their transferees/assignees have no right, interest in,
or title to the subject property.
Prescinding from the finding of this Court that
respondent Teofilo Cacho is not the son of the
registered owner of the Subject Property, the late
Doña Demetria Cacho Vidal, respondent Cacho
committed false pretenses and fraudulent acts in
representing himself as son and sole heir of Doña
Demetria Cacho (Vidal) in his petition in court, which
eventually led to the reconstitution of the titles of
Doña Demetria Cacho (Vidal). Certainly, his
misrepresentation in the reconstitution case, which
apparently is the basis of his claim to the subject
property, casts clouds on [respondents'] title to the
subject property.
It is only right that petitioner Vidal should seek
protection of her ownership from acts tending to cast
doubt on her title. Among the legal remedies she
could pursue, is this petition for Quieting of Title
under Chapter 3, Title I, Book II of the Civil Code,
Articles 476 to 481 inclusive. x x x.111
The Court of Appeals affirmed in toto the judgment of
the RTC-Branch 3. The appellate court even soundly
trounced Teofilo’s attack on the factual findings of
the trial court:
[T]he material facts sought to be established by the
afore-mentioned documentary evidence
corroborated by the testimony of VIDAL, whose
testimony or credibility neither Teofilo and
LANDTRADE even attempted to impeach, only
proves one thing, that she is the granddaughter of
DOÑA DEMETRIA and the sole heiress thereof.
xxxx
Hence, it is now too late for appellant TEOFILO to
assail before Us the facts proven during the trial,
which he failed to refute in open court. Verily,
TEOFILO’s lackadaisical attitude in the conduct of
his defense only shows that he has no proof to offer
in refutation of the evidence advanced by appellee
VIDAL.
Otherwise stated, appellant TEOFILO is an impostor,
a pretender and bogus heir of DOÑA DEMETRIA.
xxxx
Besides, it is quite unnatural and against human
nature for a rightful heir, if TEOFILO is really one, to
merely stand still with folded arms, while the
accusing finger of VIDAL is right on his very nose. In
all likelihood, and with all his might and resources, a
rightful heir may even be expected to cross
continents and reach distant shores to protect his
interest over the subject properties, which in this
case is arguably worth more than a King’s ransom.
It stands on record that TEOFILO CACHO has all
along even prior to executing his Affidavit of
Adjudication in 1985 in Chicago, United States of
America, and in simultaneously executing a Special
Power of Attorney in favor of ATTY. CABILDO, had
remained in the United States, and not for a single
moment appeared in court except through his agents
or representatives. To Our mind, this fact alone
adversely affects his pretension in claiming to be an
heir of DOÑA DEMETRIA.112
As a rule, the findings of fact of the trial court when
affirmed by the Court of Appeals are final and
conclusive, and cannot be reviewed on appeal by
this Court as long as they are borne out by the
record or are based on substantial evidence. It is not
the function of the Court to analyze or weigh all over
again the evidence or premises supportive of such
factual determination. The Court has consistently
held that the findings of the Court of Appeals and
other lower courts are, as a rule, accorded great
weight, if not binding upon it, save for the most
compelling and cogent reasons.113 There is no
justification for the Court to deviate from the factual
findings of the RTC-Branch 3 and the Court of
Appeals which are clearly supported by the evidence
on record.
Prescription
LANDTRADE finally asserts that the action for
quieting of title of Vidal and AZIMUTH already
prescribed since LANDTRADE has been in
possession of the two parcels of land in question.
The prescriptive period for filing said action lapsed in
1995, ten years from the time Teofilo executed his
Affidavit of Adjudication in 1985. Yet, Vidal and
AZIMUTH instituted Civil Case No. 4452 only in
1998.
It is too late in the day for LANDTRADE to raise the
issue of prescription of Civil Case No. 4452 for the
first time before this Court. In this jurisdiction, the
defense of prescription cannot be raised for the first
time on appeal. Such defense may be waived, and if
it was not raised as a defense in the trial court, it
cannot be considered on appeal, the general rule
being that the Appellate Court is not authorized to
consider and resolve any question not properly
raised in the lower court.114
But even if the Court takes cognizance of the issue
of prescription, it will rule against LANDTRADE.
A real action is one where the plaintiff seeks the
recovery of real property or, as indicated in what is
now Rule 4, Section 1 of the Rules of Court, a real
action is an action affecting title to or recovery of
possession of real property.115 An action for quieting
of title to real property, such as Civil Case No. 4452,
is indubitably a real action.
Article 1141 of the Civil Code plainly provides that
real actions over immovables prescribe after thirty
years. Doña Demetria died in 1974, transferring by
succession, her title to the two parcels of land to her
only heir, Vidal. Teofilo, through Atty. Cabildo, filed a
petition for reconstitution of the certificates of title
covering said properties in 1978. This is the first
palpable display of Teofilo’s adverse claim to the
same properties, supposedly, also as Doña
Demetria’s only heir. When Vidal and AZIMUTH
instituted Civil Case No. 4452 in 1998, only 20 years
had passed, and the prescriptive period for filing an
action for quieting of title had not yet prescribed.
Nevertheless, the Court notes that Article 1411 of the
Civil Code also clearly states that the 30-year
prescriptive period for real actions over immovables
is without prejudice to what is established for the
acquisition of ownership and other real rights by
prescription. Thus, the Court must also look into the
acquisitive prescription periods of ownership and
other real rights.
Acquisitive prescription of dominion and real rights
may be ordinary or extraordinary. 116
Ordinary acquisitive prescription requires possession
of things in good faith and with just title for the time
fixed by law.117 In the case of ownership and other
real rights over immovable property, they are
acquired by ordinary prescription through possession
of 10 years.118
LANDTRADE cannot insist on the application of the
10-year ordinary acquisitive prescription period since
it cannot be considered a possessor in good faith.
The good faith of the possessor consists in the
reasonable belief that the person from whom he
received the thing was the owner thereof, and could
transmit his ownership.119
LANDTRADE came to possession of the two parcels
of land after purchasing the same from Teofilo. The
Court stresses, however, that Teofilo is not the
registered owner of the subject properties. The said
properties are still registered in Doña Demetria’s
name under OCT Nos. 0-1200 (a.f.) and 0-1201
(a.f.). The Affidavit of Adjudication, by which Teofilo
declared himself to be the sole heir of Doña
Demetria’s estate, is not even annotated on the
OCTs. Worse, LANDTRADE is not dealing directly
with Teofilo, but only with the latter’s attorney-in-fact,
Atty. Cabildo. It is axiomatic that one who buys from
a person who is not a registered owner is not a
purchaser in good faith.120
Furthermore, in its Complaint for Unlawful Detainer
against NAPOCOR and TRANSCO, which was
docketed as Civil Case No. 11475-AF before the
MTCC, LANDTRADE itself alleged that when it
bought the two parcels of land from Teofilo, portions
thereof were already occupied by the Overton Sub-
station and Agus 7 Warehouse of NAPOCOR and
TRANSCO. This is another circumstance which
should have prompted LANDTRADE to investigate
or inspect the property being sold to it. It is, of
course, expected from the purchaser of a valued
piece of land to inquire first into the status or nature
of possession of the occupants, i.e., whether or not
the occupants possess the land en concepto de
dueño, in concept of owner. As is the common
practice in the real estate industry, an ocular
inspection of the premises involved is a safeguard a
cautious and prudent purchaser usually takes.
Should he find out that the land he intends to buy is
occupied by anybody else other than the seller who,
as in this case, is not in actual possession, it would
then be incumbent upon the purchaser to verify the
extent of the occupant’s possessory rights. The
failure of a prospective buyer to take such
precautionary steps would mean negligence on his
part and would thereby preclude him from claiming
or invoking the rights of a "purchaser in good faith."121
Since the ordinary acquisitive prescription period of
10 years does not apply to LANDTRADE, then the
Court turns its attention to the extraordinary
acquisitive prescription period of 30 years set by
Article 1137 of the Civil Code, which reads:
ART. 1137. Ownership and other real rights over
immovables also prescribe through uninterrupted
adverse possession thereof for thirty years, without
need of title or of good faith.
LANDTRADE adversely possessed the subject
properties no earlier than 1996, when it bought the
same from Teofilo, and Civil Case No. 4452 was
already instituted two years later in 1998.
LANDTRADE cannot tack its adverse possession of
the two parcels of land to that of Teofilo considering
that there is no proof that the latter, who is already
residing in the U.S.A., adversely possessed the
properties at all.
Thus, the Court of Appeals did not err when it
affirmed in toto the judgment of the RTC-Branch 3
which declared, among other things, that (a) Vidal is
the sole surviving heir of Doña Demetria, who alone
has rights to and interest in the subject parcels of
land; (b) AZIMUTH is Vidal’s successor-in-interest to
portions of the said properties in accordance with the
1998 Memorandum of Agreement and 2004 Deed of
Conditional Conveyance; (c) Teofilo is not the son or
heir of Doña Demetria; and (d) Teofilo, Atty. Cabildo,
and their transferees/assignees, including
LANDTRADE, have no valid right to or interest in the
same properties.
The Ejectment or Unlawful Detainer Case
(G.R. Nos. 170505, 173355-56, and 173563-64)
The Petitions in G.R. Nos. 170505, 173355-56, and
173563-64 all concern the execution pending appeal
of the Decision dated February 17, 2004 of the
MTCC in Civil Case No. 11475-AF, which ordered
NAPOCOR and TRANSCO to vacate the two parcels
of land in question, as well as to pay rent for the time
they occupied said properties.
LANDTRADE filed its Petition for Review in G.R. No.
170505 when it failed to have the MTCC Decision
dated February 17, 2004 executed while Civil Case
No. 6613, the appeal of the same judgment by
NAPOCOR and TRANSCO, was still pending before
the RTC-Branch 5.
NAPOCOR and TRANSCO sought recourse from
this Court through their Petitions for Certiorari and
Prohibition in G.R. Nos. 173355-56 and 173563-64
after the RTC-Branch 1 (to which Civil Case No.
6613 was re-raffled) already rendered a Decision
dated December 12, 2005 in Civil Case No. 6613,
affirming the MTCC Decision dated February 17,
2004. Expectedly, NAPOCOR and TRANSCO
appealed the judgment of the RTC-Branch 1 to the
Court of Appeals. The Court of Appeals granted the
motion for execution pending appeal of
LANDTRADE, and denied the application for
preliminary injunction of NAPOCOR and TRANSCO.
The requirements of posting a supersedeas bond
and depositing rent to stay execution
The pivotal issue in G.R. No. 170505 is whether
LANDTRADE is entitled to the execution of the
MTCC Decision dated February 17, 2004 even while
said judgment was then pending appeal before the
RTC-Branch 5. The RTC-Branch 5 granted the
motion for immediate execution pending appeal of
LANDTRADE because of the failure of NAPOCOR
and TRANSCO to comply with the requirements for
staying the execution of the MTCC judgment, as
provided in Rule 70, Section 19 of the Rules of
Court. The Court of Appeals subsequently found
grave abuse of discretion on the part of RTC-Branch
5 in issuing the Order dated August 9, 2004 which
granted execution pending appeal and the Writ of
Execution Pending Appeal dated August 10, 2004;
and on the part of Sheriff Borres, in issuing the
Notices of Garnishment and Notification to vacate, all
dated August 11, 2004. According to the appellate
court, NAPOCOR and TRANSCO are exempt from
the requirements of filing a supersedeas bond and
depositing rent in order to stay the execution of the
MTCC judgment.
Rule 70, Section 19 of the Rules of Court lays down
the requirements for staying the immediate execution
of the MTCC judgment against the defendant in an
ejectment suit:
SEC. 19. Immediate execution of judgment; how to
stay same. – If judgment is rendered against the
defendant, execution shall issue immediately upon
motion, unless an appeal has been perfected and
the defendant to stay execution files a sufficient
supersedeas bond, approved by the Municipal Trial
Court and executed in favor of the plaintiff to pay the
rents, damages, and costs accruing down to the time
of the judgment appealed from, and unless, during
the pendency of the appeal, he deposits with the
appellate court the amount of rent due from time to
time under the contract, if any, as determined by the
judgment of the Municipal Trial Court. In the absence
of a contract, he shall deposit with the Regional Trial
Court the reasonable value of the use and
occupation of the premises for the preceding month
or period at the rate determined by the judgment of
the lower court on or before the tenth day of each
succeeding month or period. The supersedeas bond
shall be transmitted by the Municipal Trial Court, with
the other papers, to the clerk of the Regional Trial
Court to which the action is appealed.
All amounts so paid to the appellate court shall be
deposited with said court or authorized government
depositary bank, and shall be held there until the
final disposition of the appeal, unless the court, by
agreement of the interested parties, or in the
absence of reasonable grounds of opposition to a
motion to withdraw, or for justifiable reasons, shall
decree otherwise. Should the defendant fail to make
the payments above prescribed from time to time
during the pendency of the appeal, the appellate
court, upon motion of the plaintiff, and upon proof of
such failure, shall order the execution of the
judgment appealed from with respect to the
restoration of possession, but such execution shall
not be a bar to the appeal taking its course until the
final disposition thereof on the merits.
After the case is decided by the Regional Trial Court,
any money paid to the court by the defendant for
purposes of the stay of execution shall be disposed
of in accordance with the provisions of the judgment
of the Regional Trial Court. In any case wherein it
appears that the defendant has been deprived of the
lawful possession of land or building pending the
appeal by virtue of the execution of the judgment of
the Municipal Trial Court, damages for such
deprivation of possession and restoration of
possession may be allowed the defendant in the
judgment of the Regional Trial Court disposing of the
appeal. (Emphases supplied.)
The Court had previously recognized the exemption
of NAPOCOR from filing a supersedeas bond. The
Court stated in Philippine Geothermal, Inc. v.
Commissioner of Internal Revenue122 that a
chronological review of the NAPOCOR Charter will
show that it has been the lawmakers’ intention that
said corporation be completely exempt not only from
all forms of taxes, but also from filing fees, appeal
bonds, and supersedeas bonds in any court or
administrative proceedings. The Court traced the
history of the NAPOCOR Charter, thus:
Republic Act No. 6395 (10 September 1971)
enumerated the details covered by the exemptions
by stating under Sec. 13 that "The Corporation shall
be non-profit and shall devote all its returns from its
capital investment, as well as excess revenues from
its operation, for expansion…the Corporation is
hereby declared exempt from the payment of all
taxes, duties, fees, imposts, charges, costs and
service fees in any court or administrative
proceedings in which it may be a party, restrictions
and duties to the Republic of the Philippines, its
provinces, cities, municipalities and other
government agencies and instrumentalities . . ."
Subsequently, Presidential Decree No. 380 (22
January 1974), Sec. 10 made even more specific the
details of the exemption of NPC to cover, among
others, both direct and indirect taxes on all petroleum
products used in its operation. Presidential Decree
No. 938 (27 May 1976), Sec. 13 amended the tax
exemption by simplifying the same law in general
terms. It succinctly exempts service fees, including
filing fees, appeal bonds, supersedeas bonds, in any
court or administrative proceedings. The use of the
phrase "all forms" of taxes demonstrate the intention
of the law to give NPC all the exemption it has been
enjoying before. The rationale for this exemption is
that being non-profit, the NPC "shall devote all its
return from its capital investment as well as excess
revenues from its operation, for
expansion.123 (Emphases supplied.)
As presently worded, Section 13 of Republic Act No.
6395, the NAPOCOR Charter, as amended, reads:
SEC. 13. Non-profit Character of the Corporation;
Exemption from All Taxes, Duties, Fees, Imposts
and Other Charges by the Government and
Government Instrumentalities. – The Corporation
shall be non-profit and shall devote all its returns
from its capital investment as well as excess
revenues from its operation, for expansion. To
enable the Corporation to pay its indebtedness and
obligations and in furtherance and effective
implementation of the policy enunciated in Section
One of this Act, the Corporation, including its
subsidiaries, is hereby declared exempt from the
payment of all forms of taxes, duties, fees, imposts
as well as costs and service fees including filing
fees, appeal bonds, supersedeas bonds, in any court
or administrative proceedings. (Emphasis supplied.)
In A.M. No. 05-10-20-SC, captioned In Re:
Exemption of the National Power Corporation from
Payment of Filing/Docket Fees, the Court addressed
the query of a Clerk of Court from the RTC of
Urdaneta, Pangasinan on whether NAPOCOR is
exempt from the payment of filing fees and Sheriff’s
Trust Fund. In its Resolution dated December 6,
2005, the Court, upon the recommendation of the
Court Administrator, declared that NAPOCOR is still
exempt from the payment of filing fees, appeal
bonds, and supersedeas bonds.
Consistent with the foregoing, the Court of Appeals
rendered its Decision dated November 23, 2005 in
CA-G.R. SP Nos. 85714 and 85841 declaring that
NAPOCOR was exempt from filing a supersedeas
bond to stay the execution of the MTCC judgment
while the same was pending appeal before the RTC-
Branch 5. The appellate court also held that the
exemption of NAPOCOR extended even to the
requirement for periodical deposit of rent,
ratiocinating that:
On the whole, the posting of supersedeas bond and
the making of the periodical deposit are designed
primarily to insure that the plaintiff would be paid the
back rentals and the compensation for the use and
occupation of the premises should the municipal trial
court’s decision be eventually affirmed on appeal.
Elsewise stated, both the posting of the supersedeas
bond and the payment of monthly deposit are
required to accomplish one and the same purpose,
namely, to secure the performance of, or to satisfy
the judgment appealed from in case it is affirmed on
appeal by the appellate court.
xxxx
Thus viewed, the inescapable conclusion is, and so
We hold, that although the term "making of monthly
deposit in ejectment cases" is not expressly or
specifically mentioned in Section 13 of R.A. 6395,
however, inasmuch as it has the same or similar
function, purpose, and essence as a supersedeas
bond, it should be deemed included in the
enumeration laid down under the said provision. This
accords well with the principle of ejusdem generis
which says that where a statute uses a general word
followed by an enumeration of specific words
embraced within the general word merely as
examples, the enumeration does not restrict the
meaning of the general word which should be
construed to include others of the same class
although not enumerated therein; or where a general
word or phrase follows an enumeration of particular
and specific words of the same class or where the
latter follow the former, the general word or phrase is
to be construed to include persons, things or cases
akin to, resembling, or of the same kind or class as
those specifically mentioned.
In a nutshell, We hold that petitioner NAPOCOR
enjoys exemption not only from posting supersedeas
bond in courts in appealed ejectment cases, but also
from periodically depositing the amount of the
monthly rental or the reasonable compensation of
the use and occupancy of the property, as
determined in the municipal trial court’s decision.124
The Court of Appeals further adjudged that the
exemptions of NAPOCOR similarly applied to
TRANSCO since "[i]t is all too obvious that the
interests of NAPOCOR and TRANSCO over the
premises in litigation are so interwoven and
dependent upon each other, such that whatever is
adjudged in regard to the former, whether favorable
or adverse, would ineluctably and similarly affect the
latter[;]" and "[c]onsequently, x x x the stay of the
execution of the appealed decision insofar as
NAPOCOR is concerned necessarily extends and
inures to its co-defendant TRANSCO, not by virtue of
the former’s statutory exemption privilege from filing
supersedeas bond and making periodic deposits, but
by the indisputably operative fact that the rights and
liabilities in litis of BOTH defendants are so intimately
interwoven, interdependent, and indivisible."125
Only recently, however, the Court reversed its stance
on the exemption of NAPOCOR from filing fees,
appeal bonds, and supersedeas bonds. Revisiting
A.M. No. 05-10-20-SC, the Court issued Resolutions
dated October 27, 2009 and March 10, 2010,
wherein it denied the request of NAPOCOR for
exemption from payment of filing fees and court fees
for such request appears to run counter to Article
VIII, Section 5(5)126 of the Constitution, on the rule-
making power of the Supreme Court over the rules
on pleading, practice and procedure in all courts,
which includes the sole power to fix the filing fees of
cases in courts. The Court categorically pronounced
that NAPOCOR can no longer invoke its amended
Charter as basis for exemption from the payment of
legal fees.
Nevertheless, in this case, the RTC-Branch 1
already promulgated its Decision in Civil Case No.
6613 on December 12, 2005, denying the appeal of
NAPOCOR and TRANSCO and affirming the MTCC
judgment against said corporations. NAPOCOR and
TRANSCO presently have pending appeals of the
RTC-Branch 1 judgment before the Court of
Appeals.
Rule 70, Section 19 of the Rules of Court applies
only when the judgment of a Municipal Trial Court
(and any same level court such as the MTCC) in an
ejectment case is pending appeal before the RTC.
When the RTC had already resolved the appeal and
its judgment, in turn, is pending appeal before the
Court of Appeals, then Rule 70, Section 21 of the
Rules of Court governs.
The Court already pointed out in Northcastle
Properties and Estate Corporation v. Paas127 that
Section 19 applies only to ejectment cases pending
appeal with the RTC, and Section 21 to those
already decided by the RTC. The Court again held
in Uy v. Santiago128 that:
[I]t is only execution of the Metropolitan or Municipal
Trial Courts’ judgment pending appeal with the
Regional Trial Court which may be stayed by a
compliance with the requisites provided in Rule 70,
Section 19 of the 1997 Rules on Civil Procedure. On
the other hand, once the Regional Trial Court has
rendered a decision in its appellate jurisdiction, such
decision shall, under Rule 70, Section 21 of the 1997
Rules on Civil Procedure, be immediately executory,
without prejudice to an appeal, via a Petition for
Review, before the Court of Appeals and/or Supreme
Court. (Emphases supplied.)
According to Rule 70, Section 21 of the Rules of
Court, "[t]he judgment of the Regional Trial Court
against the defendant shall be immediately
executory, without prejudice to a further appeal that
may be taken therefrom." It no longer provides for
the stay of execution at such stage.
Thus, subsequent events have rendered the Petition
of LANDTRADE in G.R. No. 170505 moot and
academic. It will serve no more purpose for the Court
to require NAPOCOR and TRANSCO to still comply
with the requirements of filing a supersedeas bond
and depositing rent to stay execution pending appeal
of the MTCC judgment, as required by Rule 70,
Section 19 of the Rules of Court, when the appeal
had since been resolved by the RTC.
Preliminary injunction to stay execution of RTC
judgment against defendant in an ejectment case
The issues raised by NAPOCOR and TRANSCO in
their Petitions in G.R. Nos. 173355-56 and 173563-
64 boil down to the sole issue of whether the Court
of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction in refusing
to enjoin the execution of the Decision dated
December 12, 2005 of the RTC-Branch 1 in Civil
Case No. 6613 while the same is pending appeal
before the appellate court.
The Court of Appeals granted the issuance of a writ
of execution in favor of LANDTRADE and denied the
application for writ of preliminary injunction of
NAPOCOR and TRANSCO because Rule 70,
Section 21 of the Rules of Court explicitly provides
that the RTC judgment in an ejectment case, which
is adverse to the defendant and pending appeal
before the Court of Appeals, shall be immediately
executory and can be enforced despite further
appeal. Therefore, the execution of the RTC
judgment pending appeal is the ministerial duty of
the Court of Appeals, specifically enjoined by law to
be done.
NAPOCOR and TRANSCO argue that neither the
rules nor jurisprudence explicitly declare that Rule
70, Section 21 of the Rules of Court bars the
application of Rule 58 on preliminary injunction.
Regardless of the immediately executory character
of the RTC judgment in an ejectment case, the Court
of Appeals, before which said judgment is appealed,
is not deprived of power and jurisdiction to issue a
writ of preliminary injunction when circumstances so
warrant.
There is merit in the present Petitions of NAPOCOR
and TRANSCO.
The Court expounded on the nature of a writ of
preliminary injunction in Levi Strauss & Co. v. Clinton
Apparelle, Inc. 129:
Section 1, Rule 58 of the Rules of Court defines a
preliminary injunction as an order granted at any
stage of an action prior to the judgment or final order
requiring a party or a court, agency or a person to
refrain from a particular act or acts. Injunction is
accepted as the strong arm of equity or a
transcendent remedy to be used cautiously as it
affects the respective rights of the parties, and only
upon full conviction on the part of the court of its
extreme necessity. An extraordinary remedy,
injunction is designed to preserve or maintain the
status quo of things and is generally availed of to
prevent actual or threatened acts until the merits of
the case can be heard. It may be resorted to only by
a litigant for the preservation or protection of his
rights or interests and for no other purpose during
the pendency of the principal action. It is resorted to
only when there is a pressing necessity to avoid
injurious consequences, which cannot be remedied
under any standard compensation. The resolution of
an application for a writ of preliminary injunction rests
upon the existence of an emergency or of a special
recourse before the main case can be heard in due
course of proceedings.
Section 3, Rule 58, of the Rules of Court enumerates
the grounds for the issuance of a preliminary
injunction:
SEC. 3. Grounds for issuance of preliminary
injunction. – A preliminary injunction may be granted
when it is established:
 (a) That the applicant is entitled to the relief
demanded, and the whole or part of such relief
consists in restraining the commission or
continuance of the act or acts complained of,
or in requiring the performance of an act or
acts, either for a limited period or perpetually;
(b) That the commission, continuance, or non-
performance of the act or acts complained of
during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, agency or a person is
doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or
acts probably in violation of the rights of the
applicant respecting the subject of the action
or proceeding, and tending to render the
judgment ineffectual.
Under the cited provision, a clear and positive right
especially calling for judicial protection must be
shown. Injunction is not a remedy to protect or
enforce contingent, abstract, or future rights; it will
not issue to protect a right not in esse and which
may never arise, or to restrain an act which does not
give rise to a cause of action. There must exist an
actual right. There must be a patent showing by the
complaint that there exists a right to be protected
and that the acts against which the writ is to be
directed are violative of said right.
Benedicto v. Court of Appeals130 sets forth the
following elucidation on the applicability of Rule 58
vis-à-vis Rule 70, Section 21 of the Rules of Court:
This section [Rule 70, Section 21] presupposes that
the defendant in a forcible entry or unlawful detainer
case is unsatisfied with the judgment of the Regional
Trial Court and decides to appeal to a superior court.
It authorizes the RTC to immediately issue a writ of
execution without prejudice to the appeal taking its
due course. It is our opinion that on appeal the
appellate court may stay the said writ should
circumstances so require.
In the case of Amagan v. Marayag, we reiterated our
pronouncement in Vda. de Legaspi v. Avendaño that
the proceedings in an ejectment case may be
suspended in whatever stage it may be found. We
further drew a fine line between forcible entry and
unlawful detainer, thus:
Where the action, therefore, is one of illegal detainer,
as distinguished from one of forcible entry, and the
right of the plaintiff to recover the premises is
seriously placed in issue in a proper judicial
proceeding, it is more equitable and just and less
productive of confusion and disturbance of physical
possession, with all its concomitant inconvenience
and expenses. For the Court in which the issue of
legal possession, whether involving ownership or
not, is brought to restrain, should a petition for
preliminary injunction be filed with it, the effects of
any order or decision in the unlawful detainer case in
order to await the final judgment in the more
substantive case involving legal possession or
ownership. It is only where there has been forcible
entry that as a matter of public policy the right to
physical possession should be immediately set at
rest in favor of the prior possession regardless of the
fact that the other party might ultimately be found to
have superior claim to the premises involved thereby
to discourage any attempt to recover possession thru
force, strategy or stealth and without resorting to the
courts.
Patently, even if RTC judgments in unlawful detainer
cases are immediately executory, preliminary
injunction may still be granted. There need only be
clear showing that there exists a right to be protected
and that the acts against which the writ is to be
directed violate said right. (Emphasis supplied.)
As in Benedicto, substantial considerations exist
herein that compels the Court to issue a writ of
preliminary injunction enjoining the execution of the
February 17, 2004 Decision of the MTCC, as
affirmed by the December 12, 2005 Decision of the
RTC-Branch 1, until the appeal of latter judgment,
sought by NAPOCOR and TRANSCO, is finally
resolved by the Court of Appeals.
First, the two parcels of land claimed by
LANDTRADE are the subject of several other cases.
In fact, Vidal and AZIMUTH, who instituted the
Quieting of Title Case against Teofilo and
LANDTRADE (also presently before the Court in
G.R. Nos. 178779 and 178894) have filed a Motion
For Leave to Intervene in the instant case, thus,
showing that there are other parties who, while
strangers to the ejectment case, might be greatly
affected by its result and who want to protect their
interest in the subject properties. And although cases
involving title to real property, i.e., quieting of title,
accion publiciana, etc., are not prejudicial to and do
not suspend an ejectment case,131 the existence of
such cases should have already put the Court of
Appeals on guard that the title of LANDTRADE to the
subject properties – on which it fundamentally based
its claim of possessory right – is being fiercely
contested.
Second, it is undisputed that TRANSCO and its
predecessor, NAPOCOR, have been in possession
of the disputed parcels of land for more than 40
years. Upon said properties stand the TRANSCO
Overton Sub-station and Agus 7 Warehouse. The
Overton Sub-station, in particular, is a crucial facility
responsible for providing the power requirements of
a large portion of Iligan City, the two Lanao
Provinces, and other nearby provinces. Without
doubt, having TRANSCO vacate its Overton Sub-
station, by prematurely executing the MTCC
judgment of February 17, 2004, carries serious and
irreversible implications, primordial of which is the
widespread disruption of the electrical power supply
in the aforementioned areas, contributing further to
the electric power crisis already plaguing much of
Mindanao.
Lastly, allowing execution pending appeal would
result in the payment of an astronomical amount in
rentals which, per Sheriff Borres’s computation,
already amounted to ₱156,000,000.00 by August 11,
2004, when he issued the Notices of Garnishment
and Notification against NAPOCOR and TRANSCO;
plus, ₱500,000.0 each month thereafter. Payment of
such an amount may seriously put the operation of a
public utility in peril, to the detriment of its
consumers.
These circumstances altogether present a pressing
necessity to avoid injurious consequences, not just
to NAPOCOR and TRANSCO, but to a substantial
fraction of the consuming public as well, which
cannot be remedied under any standard
compensation. The issuance by the Court of Appeals
of a writ of preliminary injunction is justified by the
circumstances.
The Court must emphasize though that in so far as
the Ejectment Case is concerned, it has only settled
herein issues on the propriety of enjoining the
execution of the MTCC Decision dated February 17,
2004 while it was on appeal before the RTC, and
subsequently, before the Court of Appeals. The
Court of Appeals has yet to render a judgment on the
appeal itself. But it may not be amiss for the Court to
also point out that in G.R. Nos. 178779 and 178894
(Quieting of Title Case), it has already found that
Vidal, not Teofilo, is the late Doña Demetria’s sole
heir, who alone inherits Doña Demetria’s rights to
and interests in the disputed parcels of land. This
conclusion of the Court in the Quieting of Title Case
will inevitably affect the Ejectment Case still pending
appeal before the Court of Appeals since
LANDTRADE is basing its right to possession in the
Ejectment Case on its supposed title to the subject
properties, which it derived from Teofilo.
The Cancellation of Titles and Reversion Case
(G.R. No. 173401)
The Republic is assailing in its Petition in G.R. No.
173401 the (1) Order dated December 13, 2005 of
the RTC-Branch 4 dismissing Civil Case No. 6686,
the Complaint for Cancellation of Titles and
Reversion filed by the Republic against the
deceased Doña Demetria, Vidal and/or Teofilo, and
AZIMUTH and/or LANDTRADE; and (2) Order dated
May 16, 2006 of the same trial court denying the
Motion for Reconsideration of the Republic, averring
that:
With due respect, the trial court decided a question
of substance contrary to law and jurisprudence in
ruling:
(i) THAT PETITIONER HAD NO CAUSE OF
ACTION IN INSTITUTING THE SUBJECT
COMPLAINT FOR CANCELLATION OF OCT
NOS. 0-1200 (A.F.) AND 0-1201 (A.F.),
INCLUDING ALL DERIVATIVE TITLES, AND
REVERSION.
(ii) THAT PETITIONER’S COMPLAINT FOR
CANCELLATION OF OCT NOS. 0-1200 (A.F.)
AND 0-1201 (A.F.) INCLUDING ALL
DERIVATIVE TITLES, AND REVERSION IS
BARRED BY THE DECISIONS IN CACHO VS
GOVERNMENT OF THE UNITED STATES
(28 PHIL. 616 [1914] AND CACHO VS
COURT OF APPEALS (269 SCRA 159 [1997].
(iii) THAT PETITIONER’S CAUSE OF
ACTION HAS PRESCRIBED; AND
(iv) THAT PETITIONER IS GUILTY OF
FORUM SHOPPING.132
The Court finds merit in the present Petition.
Cause of action for reversion
The Complaint in Civil Case No. 6686 seeks the
cancellation of OCT Nos. 0-1200 (a.f.) and 0-1201
(a.f.), with all their derivative titles, and reversion.
The Complaint was dismissed by the RTC-Branch 4
in its Order dated December 13, 2005, upon Motion
of Vidal and AZIMUTH, on the ground that the State
does not have a cause of action for reversion.
According to the RTC-Branch 4, there was no
showing that the late Doña Demetria committed any
wrongful act or omission in violation of any right of
the Republic. Additionally, the Regalian doctrine
does not apply to Civil Case No. 6686 because said
doctrine does not extend to lands beyond the public
domain. By the own judicial admission of the
Republic, the two parcels of land in question are
privately owned, even before the same were
registered in Doña Demetria’s name.
The Court disagrees.
Rule 2, Section 2 of the Rules of Court defines a
cause of action as "the act or omission by which a
party violates a right of another." Its essential
elements are the following: (1) a right in favor of the
plaintiff; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and
(3) such defendant’s act or omission that is violative
of the right of the plaintiff or constituting a breach of
the obligation of the former to the latter.133
Reversion is an action where the ultimate relief
sought is to revert the land back to the government
under the Regalian doctrine. Considering that the
land subject of the action originated from a grant by
the government, its cancellation is a matter between
the grantor and the
grantee.134http://www.lawphil.net/judjuris/juri2005/ma
y2005/gr_157536_2005.html - fnt30 In Estate of the
Late Jesus S. Yujuico v. Republic135 (Yujuico case),
reversion was defined as an action which seeks to
restore public land fraudulently awarded and
disposed of to private individuals or corporations to
the mass of public domain. It bears to point out,
though, that the Court also allowed the resort by the
Government to actions for reversion to cancel titles
that were void for reasons other than fraud, i.e.,
violation by the grantee of a patent of the conditions
imposed by law;136 and lack of jurisdiction of the
Director of Lands to grant a patent covering
inalienable forest land137 or portion of a river, even
when such grant was made through mere
oversight.138 In Republic v. Guerrero,139 the Court
gave a more general statement that the remedy of
reversion can be availed of "only in cases of
fraudulent or unlawful inclusion of the land in patents
or certificates of title."
The right of the Republic to institute an action for
reversion is rooted in the Regalian doctrine. Under
the Regalian doctrine, all lands of the public domain
belong to the State, and that the State is the source
of any asserted right to ownership in land and
charged with the conservation of such patrimony.
This same doctrine also states that all lands not
otherwise appearing to be clearly within private
ownership are presumed to belong to the State.140 It
is incorporated in the 1987 Philippine Constitution
under Article XII, Section 2 which declares "[a]ll
lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife,
flora and fauna, and other natural resources are
owned by the State. x x x" No public land can be
acquired by private persons without any grant,
express or implied, from the government; it is
indispensable that there be a showing of the title
from the State.141
The reversion case of the Republic in Civil Case No.
6686 rests on the main argument that OCT Nos. 0-
1200 (a.f.) and 0-1201 (a.f.), issued in Doña
Demetria’s name, included parcels of lands which
were not adjudicated to her by the Court in the 1914
Cacho case. Contrary to the statement made by the
RTC-Branch 4 in its December 13, 2005 Order, the
Republic does not make any admission in its
Complaint that the two parcels of land registered in
Doña Demetria’s name were privately owned even
prior to their registration. While the Republic does
not dispute that that two parcels of land were
awarded to Doña Demetria in the 1914 Cacho case,
it alleges that these were not the same as those
covered by OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.)
issued in Doña Demetria’s name 84 years later. If,
indeed, the parcels of land covered by said OCTs
were not those granted to Doña Demetria in the
1914 Cacho case, then it can be presumed, under
the Regalian doctrine, that said properties still form
part of the public domain belonging to the State.
Just because OCTs were already issued in Doña
Demetria’s name does not bar the Republic from
instituting an action for reversion. Indeed, the Court
made it clear in Francisco v. Rodriguez142 that
Section 101 of the Public Land Act "may be invoked
only when title has already vested in the individual,
e.g., when a patent or a certificate of title has already
been issued[,]" for the basic premise in an action for
reversion is that the certificate of title fraudulently or
unlawfully included land of the public domain, hence,
calling for the cancellation of said certificate. It is
actually the issuance of such a certificate of title
which constitutes the third element of a cause of
action for reversion.
The Court further finds that the Complaint of the
Republic in Civil Case No. 6686 sufficiently states a
cause of action for reversion, even though it does not
allege that fraud was committed in the registration or
that the Director of Lands requested the reversion.
It is a well-settled rule that the existence of a cause
of action is determined by the allegations in the
complaint. In the resolution of a motion to dismiss
based on failure to state a cause of action, only the
facts alleged in the complaint must be considered.
The test in cases like these is whether a court can
render a valid judgment on the complaint based
upon the facts alleged and pursuant to the prayer
therein. Hence, it has been held that a motion to
dismiss generally partakes of the nature of a
demurrer which hypothetically admits the truth of the
factual allegations made in a complaint.143 The
hypothetical admission extends to the relevant and
material facts well pleaded in the complaint and
inferences fairly deducible therefrom. Hence, if the
allegations in the complaint furnish sufficient basis by
which the complaint can be maintained, the same
should not be dismissed regardless of the defense
that may be assessed by the defendants.144
In Vergara v. Court of Appeals,145 the Court
additionally explained that:
In determining whether allegations of a complaint are
sufficient to support a cause of action, it must be
borne in mind that the complaint does not have to
establish or allege facts proving the existence of a
cause of action at the outset; this will have to be
done at the trial on the merits of the case. To sustain
a motion to dismiss for lack of cause of action, the
complaint must show that the claim for relief does
not exist, rather than that a claim has been
defectively stated, or is ambiguous, indefinite or
uncertain.
The Republic meticulously presented in its Complaint
the discrepancies between the 1914 Cacho case, on
one hand, which granted Doña Demetria title to two
parcels of land; and OCT Nos. 0-1200 (a.f.) and 0-
1201 (a.f.), on the other, which were supposedly
issued pursuant to the said case. In paragraphs 9
and 16 of its Complaint, the Republic clearly alleged
that OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.) cover
properties much larger than or areas beyond those
granted by the land registration court in GLRO
Record Nos. 6908 and 6909. Thus, the Republic was
able to satisfactorily allege the unlawful inclusion, for
lack of an explicit grant from the Government, of
parcels of public land into Doña Demetria’s OCTs,
which, if true, will justify the cancellation of said
certificates and the return of the properties to the
Republic.
That the Complaint in Civil Case No. 6686 does not
allege that it had been filed by the Office of the
Solicitor General (OSG), at the behest of the Director
of Lands, does not call for its dismissal on the
ground of failure to state a cause of action. Section
101 of Commonwealth Act No. 141, otherwise known
as the Public Land Act, as amended, simply requires
that:
SEC. 101. All actions for the reversion to the
Government of lands of the public domain or
improvements thereon shall be instituted by the
Solicitor General or the officer acting in his stead, in
the proper courts, in the name of the Republic of the
Philippines. (Emphasis supplied.)
Clear from the aforequoted provision that the
authority to institute an action for reversion, on behalf
of the Republic, is primarily conferred upon the OSG.
While the OSG, for most of the time, will file an
action for reversion upon the request or
recommendation of the Director of Lands, there is no
basis for saying that the former is absolutely bound
or dependent on the latter.
RTC-Branch 4 cited Sherwill Development
Corporation v. Sitio Niño Residents Association,
Inc. 146 (Sherwill case), to support its ruling that it is
"absolutely necessary" that an investigation and a
determination of fraud should have been made by
the Director of Lands prior to the filing of a case for
reversion. The Sherwill case is not in point and does
not constitute a precedent for the case at bar. It does
not even involve a reversion case. The main issue
therein was whether the trial court properly
dismissed the complaint of Sherwill Development
Corporation for quieting of title to two parcels of land,
considering that a case for the declaration of nullity
of its TCTs, instituted by the Sto. Niño Residents
Association, Inc., was already pending before the
Land Management Bureau (LMB). The Court
recognized therein the primary jurisdiction of the
LMB over the dispute, and affirmed the dismissal of
the quieting of title case on the grounds of litis
pendentia and forum shopping.
Res judicata
Public policy and sound practice enshrine the
fundamental principle upon which the doctrine of res
judicata rests that parties ought not to be permitted
to litigate the same issues more than once. It is a
general rule common to all civilized system of
jurisprudence, that the solemn and deliberate
sentence of the law, pronounced by its appointed
organs, upon a disputed fact or a state of facts,
should be regarded as a final and conclusive
determination of the question litigated, and should
forever set the controversy at rest. Indeed, it has
been well said that this maxim is more than a mere
rule of law; more even than an important principle of
public policy; and that it is not too much to say that it
is a fundamental concept in the organization of every
jural system. Public policy and sound practice
demand that, at the risk of occasional errors,
judgments of courts should become final at some
definite date fixed by law. The very object for which
courts were constituted was to put an end to
controversies.147
The doctrine of res judicata comprehends two
distinct concepts - (1) bar by former judgment, and
(2) conclusiveness of judgment. For res judicata to
serve as an absolute bar to a subsequent action, the
following requisites must concur: (1) the former
judgment or order must be final; (2) the judgment or
order must be on the merits; (3) it must have been
rendered by a court having jurisdiction over the
subject matter and parties; and (4) there must be
between the first and second actions, identity of
parties, of subject matter, and of causes of action.
When there is no identity of causes of action, but
only an identity of issues, there exists res judicata in
the concept of conclusiveness of judgment. Although
it does not have the same effect as res judicata in
the form of bar by former judgment which prohibits
the prosecution of a second action upon the same
claim, demand, or cause of action, the rule on
conclusiveness of judgment bars the relitigation of
particular facts or issues in another litigation between
the same parties on a different claim or cause of
action.148
The 1914 Cacho case does not bar the Complaint for
reversion in Civil Case No. 6686 by res judicata in
either of its two concepts.
There is no bar by prior judgment because the 1914
Cacho case and Civil Case No. 6686 do not have the
same causes of action and, even possibly, they do
not involve identical subject matters.
Land registration cases, such as GLRO Record Nos.
6908 and 6909, from which the 1914 Cacho case
arose, are special proceedings where the concept of
a cause of action in ordinary civil actions does not
apply. In special proceedings, the purpose is to
establish a status, condition or fact; in land
registration proceedings, the ownership by a person
of a parcel of land is sought to be established.149 Civil
Case No. 6686 is an action for reversion where the
cause of action is the alleged unlawful inclusion in
OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.) of parcels
of public land that were not among those granted to
Doña Demetria in the 1914 Cacho case. Thus, Civil
Case No. 6686 even rests on supposition that the
parcels of land covered by the certificates of title in
Doña Demetria’s name, which the Republic is
seeking to have cancelled, are different from the
parcels of land that were the subject matter of the
1914 Cacho case and adjudged to Doña Demetria.
Res judicata in the concept of conclusiveness of
judgment, likewise, does not apply as between the
1914 Cacho case and Civil Case No. 6686. A careful
study of the Complaint in Civil Case No. 6686
reveals that the Republic does not seek to re-litigate
any of the issues resolved in the 1914 Cacho case.
The Republic no longer questions in Civil Case No.
6686 that Doña Demetria was adjudged the owner of
two parcels of land in the 1914 Cacho case. The
Republic is only insisting on the strict adherence to
the judgment of the Court in the 1914 Cacho case,
particularly: (1) the adjudication of a smaller parcel of
land, consisting only of the southern portion of the
37.87-hectare Lot 2 subject of Doña Demetria’s
application in GLRO Record No. 6909; and (2) the
submission of a new technical plan for the
adjudicated southern portion of Lot 2 in GLRO
Record No. 6909, and the deed executed by Datto
Darondon, husband of Alanga, renouncing all his
rights to Lot 1, in GLRO Record No. 6908, in Doña
Demetria’s favor.150
Similarly, the 1997 Cacho case is not an obstacle to
the institution by the Republic of Civil Case No. 6686
on the ground of res judicata.
Bar by prior judgment does not apply for lack of
identity of causes of action between the 1997 Cacho
case and Civil Case No. 6686. The 1997 Cacho case
involves a petition for re-issuance of decrees of
registration. In the absence of principles and rules
specific for such a petition, the Court refers to those
on reconstitution of certificates of title, being almost
of the same nature and granting closely similar
reliefs.
Reconstitution denotes a restoration of the
instrument which is supposed to have been lost or
destroyed in its original form or condition. The
purpose of the reconstitution of title or any document
is to have the same reproduced, after observing the
procedure prescribed by law, in the same form they
were when the loss or destruction
occurred.151 Reconstitution is another special
proceeding where the concept of cause of action in
an ordinary civil action finds no application.
The Court, in the 1997 Cacho case, granted the
reconstitution and re-issuance of the decrees of
registration considering that the NALTDRA, through
then Acting Commissioner Santiago M.
Kapunan,152 its Deputy Clerk of Court III, the Head
Geodetic Engineer, and the Chief of Registration,
certified that "according to the Record Book of
Decrees for Ordinary Land Registration Case,
Decree No. 18969 was issued in GLRO Record No.
6909 and Decree No. 10364 was issued in GLRO
Record No. 6908[;]"153 thus, leaving no doubt that
said decrees had in fact been issued.
The 1997 Cacho case only settled the issuance,
existence, and subsequent loss of Decree Nos.
10364 and 18969. Consequently, said decrees could
be re-issued in their original form or condition. The
Court, however, could not have passed upon in the
1997 Cacho case the issues on whether Doña
Demetria truly owned the parcels of land covered by
the decrees and whether the decrees and the OCTs
subsequently issued pursuant thereto are void for
unlawfully including land of the public domain which
were not awarded to Doña Demetria.
The following pronouncement of the Court in Heirs of
Susana de Guzman Tuazon v. Court of Appeals154 is
instructive:
Precisely, in both species of reconstitution under
Section 109 of P.D. No. 1529 and R.A. No. 26, the
nature of the action denotes a restoration of the
instrument which is supposed to have been lost or
destroyed in its original form and condition. The
purpose of the action is merely to have the same
reproduced, after proper proceedings, in the same
form they were when the loss or destruction
occurred, and does not pass upon the ownership of
the land covered by the lost or destroyed title. It
bears stressing at this point that ownership should
not be confused with a certificate of title. Registering
land under the Torrens System does not create or
vest title because registration is not a mode of
acquiring ownership. A certificate of title is merely an
evidence of ownership or title over the particular
property described therein. Corollarily, any question
involving the issue of ownership must be threshed
out in a separate suit, which is exactly what the
private respondents did when they filed Civil Case
No. 95-3577 before Branch 74. The trial court will
then conduct a full-blown trial wherein the parties will
present their respective evidence on the issue of
ownership of the subject properties to enable the
court to resolve the said issue. x x x. (Emphases
supplied.)
Whatever findings the Court made on the issue of
ownership in the 1997 Cacho case are mere obiter
dictum. As the Court held in Amoroso v. Alegre,
Jr.155:
Petitioner claims in his petition that the 3 October
1957 Decision resolved the issue of ownership of the
lots and declared in the body of the decision that he
had "sufficiently proven uncontroverted facts that he
had been in possession of the land in question since
1946 x x x [and] has been in possession of the
property with sufficient title." However, such findings
made by the CFI in the said decision are mere obiter,
since the ownership of the properties, titles to which
were sought to be reconstituted, was never the issue
in the reconstitution case. Ownership is not the issue
in a petition for reconstitution of title. A reconstitution
of title does not pass upon the ownership of the land
covered by the lost or destroyed title.
It may perhaps be argued that ownership of the
properties was put in issue when petitioner opposed
the petition for reconstitution by claiming to be the
owner of the properties. However, any ruling that the
trial court may make on the matter is irrelevant
considering the court’s limited authority in petitions
for reconstitution. In a petition for reconstitution of
title, the only relief sought is the issuance of a
reconstituted title because the reconstituting officer’s
power is limited to granting or denying a
reconstituted title. As stated earlier, the reconstitution
of title does not pass upon the ownership of the land
covered by the lost or destroyed title, and any
change in the ownership of the property must be the
subject of a separate suit. (Emphases supplied.)
The Court concedes that the 1997 Cacho case, by
reason of conclusiveness of judgment, prevents the
Republic from again raising as issues in Civil Case
No. 6686 the issuance and existence of Decree Nos.
10364 and 18969, but not the validity of said
decrees, as well as the certificates of title issued
pursuant thereto.
Forum shopping
Forum shopping is the filing of multiple suits
involving the same parties for the same cause of
action, either simultaneously or successively, for the
purpose of obtaining a favorable judgment. A party
violates the rule against forum shopping if the
elements of litis pendentia are present; or if a final
judgment in one case would amount to res judicata
in the other.156
There is forum shopping when the following
elements are present: (a) identity of parties, or at
least such parties as represent the same interests in
both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same
facts; and (c) the identity of the two preceding
particulars, is such that any judgment rendered in the
other action will, regardless of which party is
successful, amount to res judicata in the action
under consideration; said requisites are also
constitutive of the requisites for auter action pendant
or lis pendens.157
Given the preceding disquisition of the Court that the
1914 and 1997 Cacho cases do not constitute res
judicata in Civil Case No. 6686, then the Court also
cannot sustain the dismissal by the RTC-Branch 4 of
the Complaint of the Republic in Civil Case No. 6686
for forum shopping.
Prescription
According to the RTC-Branch 4, the cause of action
for reversion of the Republic was already lost or
extinguished by prescription, citing Section 32 of the
Property Registration Decree, which provides:
SEC. 32. Review of decree of registration; Innocent
purchaser for value. – The decree of registration
shall not be reopened or revised by reason of
absence, minority, or other disability of any person
adversely affected thereby, nor by any proceeding in
any court for reversing judgment, subject, however,
to the right of any person, including the government
and the branches thereof, deprived of land or of any
estate or interest therein by such adjudication or
confirmation of title obtained by actual fraud, to file in
the proper Court of First Instance a petition for
reopening and review of the decree of registration
not later than one year from and after the date of the
entry of such decree of registration, but in no case
shall such petition be entertained by the court where
an innocent purchaser for value has acquired the
land or an interest therein, whose rights may be
prejudiced. Whenever the phrase "innocent
purchaser of value" or an equivalent phrase occurs
in this Decree, it shall be deemed to include an
innocent lessee, mortgagee, or other encumbrancer
for value.
Upon the expiration of said period of one year, the
decree of registration and the certificate of title
issued shall become incontrovertible. Any person
aggrieved by such decree of registration in any case
may pursue his remedy by action for damages
against the applicant or any other persons
responsible for the fraud.
Decree No. 10364 in GLRO Record No. 6908 was
issued on May 9, 1913, while Decree No. 18969 in
GLRO Record No. 6909 was issued on July 8, 1915.
In the course of eight decades, the decrees were lost
and subsequently reconstituted per order of this
Court in the 1997 Cacho case. The reconstituted
decrees were issued on October 15, 1998 and
transcribed on OCT Nos. 0-1200 (a.f.) and 0-1201
(a.f.). The reconstituted decrees were finally entered
into the Registration Book for Iligan City on
December 4, 1998 at 10:00 a.m. Almost six years
had elapsed from entry of the decrees by the time
the Republic filed its Complaint in Civil Case No.
6686 on October 13, 2004.
Nonetheless, elementary is the rule that prescription
does not run against the State and its subdivisions.
When the government is the real party in interest,
and it is proceeding mainly to assert its own right to
recover its own property, there can as a rule be no
defense grounded on laches or prescription. Public
land fraudulently included in patents or certificates of
title may be recovered or reverted to the State in
accordance with Section 101 of the Public Land Act.
The right of reversion or reconveyance to the State is
not barred by prescription.158
The Court discussed lengthily in Republic v. Court of
Appeals159 the indefeasibility of a decree of
registration/certificate of title vis-à-vis the remedy of
reversion available to the State:
The petitioner invokes Republic v. Animas, where
this Court declared that a title founded on fraud may
be cancelled notwithstanding the lapse of one year
from the issuance thereof. Thus:
x x x The misrepresentations of the applicant that he
had been occupying and cultivating the land and
residing thereon are sufficient grounds to nullify the
grant of the patent and title under Section 91 of the
Public Land Law which provides as follows:
"The statements made in the application shall be
considered as essential conditions or parts of any
concession, title or permit issued on the basis of
such application, and any false statement thereon or
omission of facts, changing, or modifying the
consideration of the facts set forth in such statement,
and any subsequent modification, alteration, or
change of the material facts set forth in the
application shall ipso facto produce the cancellation
of the concession, title or permit granted. x x x"
A certificate of title that is void may be ordered
cancelled. A title will be considered void if it is
procured through fraud, as when a person applies for
registration of the land under his name although the
property belongs to another. In the case of
disposable public lands, failure on the part of the
grantee to comply with the conditions imposed by
law is a ground for holding such title void. The lapse
of the one year period within which a decree of title
may be reopened for fraud would not prevent the
cancellation thereof, for to hold that a title may
become indefeasible by registration, even if such title
had been secured through fraud or in violation of the
law, would be the height of absurdity. Registration
should not be a shield of fraud in securing title.
This doctrine was reiterated in Republic v. Mina,
where Justice Relova declared for the Court:
A certificate of title that is void may be ordered
cancelled. And, a title will be considered void if it is
procured through fraud, as when a person applies for
registration of the land on the claim that he has been
occupying and cultivating it. In the case of
disposable public lands, failure on the part of the
grantee to comply with the conditions imposed by
law is a ground for holding such title void. x x x The
lapse of one (1) year period within which a decree of
title may be reopened for fraud would not prevent the
cancellation thereof for to hold that a title may
become indefeasible by registration, even if such title
had been secured through fraud or in violation of the
law would be the height of absurdity. Registration
should not be a shield of fraud in securing title.
Justifying the above-quoted provision, the Court
declared in Piñero, Jr. v. Director of Lands:
It is true that under Section 122 of the Land
Registration Act, a Torrens title issued on the basis
of a free patent or a homestead patent is as
indefeasible as one judicially secured. And in
repeated previous decisions of this Court that
indefeasibility has been emphasized by Our holding
that not even the Government can file an action for
annulment, but at the same time, it has been made
clear that an action for reversion may be instituted by
the Solicitor General, in the name of the Republic of
the Philippines. It is to the public interest that one
who succeeds in fraudulently acquiring title to a
public land should not be allowed to benefit
therefrom, and the State should, therefore, have an
even existing authority, thru its duly authorized
officers, to inquire into the circumstances
surrounding the issuance of any such title, to the end
that the Republic, thru the Solicitor General or any
other officer who may be authorized by law, may file
the corresponding action for the reversion of the land
involved to the public domain, subject thereafter to
disposal to other qualified persons in accordance
with law. In other words, the indefeasibility of a title
over land previously public is not a bar to an
investigation by the Director of Lands as to how such
title has been acquired, if the purpose of such
investigation is to determine whether or not fraud
had been committed in securing such title in order
that the appropriate action for reversion may be filed
by the Government.
Private respondent PNB points out that Animas
involved timberland, which is not alienable or
disposable public land, and that in Piñero the issue
raised was whether the Director of Lands would be
enjoined by a writ of prohibition from investigating
allegations of fraud that led to the issuance of certain
free patents. Nevertheless, we find that the doctrine
above quoted is no less controlling even if there be
some factual disparities (which are not material
here), especially as it has been buttressed by
subsequent jurisprudence.
In Director of Lands v. Jugado, upon which the
appellate court based its ruling, the Court declared
meaningfully that:
There is, however, a section in the Public Land Law
(Sec. 101 of Commonwealth Act 141), which affords
a remedy whereby lands of the public domain
fraudulently awarded may be recovered or reverted
back to its original owner, the Government. But the
provision requires that all such actions for reversion
shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the
name of the Republic of the Philippines (See Director
of Lands v. De Luna, supra). As the party in interest
in this case is the Director of Lands and not the
Republic of the Philippines, the action cannot
prosper in favor of the appellant.
The reference was to the Public Land Law which
authorizes the reversion suit under its Sec. 101,
thus:
Sec. 101. All actions for the reversion to the
Government of lands of the public domain or
improvements thereon shall be instituted by the
Solicitor General or the officer acting in his stead, in
the proper courts, in the name of the Republic of the
Philippines.
This remedy was recently affirmed by the Court
in Heirs of Gregorio Tengco v. Heirs of Jose and
Victoria Aliwalas, thus:
x x x Title to the property having become
incontrovertible, such may no longer be collaterally
attacked. If indeed there had been any fraud or
misrepresentation in obtaining the title, an action for
reversion instituted by the Solicitor General would be
the proper remedy.
It is evident from the foregoing jurisprudence that
despite the lapse of one year from the entry of a
decree of registration/certificate of title, the State,
through the Solicitor General, may still institute an
action for reversion when said decree/certificate was
acquired by fraud or misrepresentation.
Indefeasibility of a title does not attach to titles
secured by fraud and misrepresentation. Well-settled
is the doctrine that the registration of a patent under
the Torrens system does not by itself vest title; it
merely confirms the registrant’s already existing one.
Verily, registration under the Torrens system is not a
mode of acquiring ownership.160
But then again, the Court had several times in the
past recognized the right of the State to avail itself of
the remedy of reversion in other instances when the
title to the land is void for reasons other than having
been secured by fraud or misrepresentation. One
such case is Spouses Morandarte v. Court of
Appeals,161 where the Bureau of Lands (BOL), by
mistake and oversight, granted a patent to the
spouses Morandarte which included a portion of the
Miputak River. The Republic instituted an action for
reversion 10 years after the issuance of an OCT in
the name of the spouses Morandarte. The Court
ruled:
Be that as it may, the mistake or error of the officials
or agents of the BOL in this regard cannot be
invoked against the government with regard to
property of the public domain. It has been said that
the State cannot be estopped by the omission,
mistake or error of its officials or agents.
It is well-recognized that if a person obtains a title
under the Public Land Act which includes, by
oversight, lands which cannot be registered under
the Torrens system, or when the Director of Lands
did not have jurisdiction over the same because it is
a public domain, the grantee does not, by virtue of
the said certificate of title alone, become the owner
of the land or property illegally included. Otherwise
stated, property of the public domain is incapable of
registration and its inclusion in a title nullifies that
title.
1avv phi1
Another example is the case of Republic of the Phils.
v. CFI of Lanao del Norte, Br. IV,162 in which the
homestead patent issued by the State became null
and void because of the grantee’s violation of the
conditions for the grant. The Court ordered the
reversion even though the land subject of the patent
was already covered by an OCT and the Republic
availed itself of the said remedy more than 11 years
after the cause of action accrued, because:
There is merit in this appeal considering that the
statute of limitation does not lie against the State.
Civil Case No. 1382 of the lower court for reversion
is a suit brought by the petitioner Republic of the
Philippines as a sovereign state and, by the express
provision of Section 118 of Commonwealth Act No.
141, any transfer or alienation of a homestead grant
within five (5) years from the issuance of the patent
is null and void and constitute a cause for reversion
of the homestead to the State. In Republic vs. Ruiz,
23 SCRA 348, We held that "the Court below
committed no error in ordering the reversion to
plaintiff of the land grant involved herein,
notwithstanding the fact that the original certificate of
title based on the patent had been cancelled and
another certificate issued in the names of the
grantee heirs. Thus, where a grantee is found not
entitled to hold and possess in fee simple the land,
by reason of his having violated Section 118 of the
Public Land Law, the Court may properly order its
reconveyance to the grantor, although the property
has already been brought under the operation of the
Torrens System. And, this right of the government to
bring an appropriate action for reconveyance is not
barred by the lapse of time: the Statute of Limitations
does not run against the State." (Italics supplied).
The above ruling was reiterated in Republic vs. Mina,
114 SCRA 945.
If the Republic is able to establish after trial and
hearing of Civil Case No. 6686 that the decrees and
OCTs in Doña Demetria’s name are void for some
reason, then the trial court can still order the
reversion of the parcels of land covered by the same
because indefeasibility cannot attach to a void
decree or certificate of title. The RTC-Branch 4
jumped the gun when it declared that the cause of
action of the Republic for reversion in Civil Case No.
6686 was already lost or extinguished by prescription
based on the Complaint alone.
All told, the Court finds that the RTC-Branch 4
committed reversible error in dismissing the
Complaint for Cancellation of Titles and Reversion of
the Republic in Civil Case No. 6686. Resultantly, the
Court orders the reinstatement of said Complaint.
Yet, the Court also deems it opportune to recall the
following statements in Saad-Agro Industries, Inc. v.
Republic163:
It has been held that a complaint for reversion
involves a serious controversy, involving a question
of fraud and misrepresentation committed against
the government and it is aimed at the return of the
disputed portion of the public domain. It seeks to
cancel the original certificate of registration, and
nullify the original certificate of title, including the
transfer certificate of title of the successors-in-
interest because the same were all procured through
fraud and misrepresentation. Thus, the State, as the
party alleging the fraud and misrepresentation that
attended the application of the free patent, bears that
burden of proof. Fraud and misrepresentation, as
grounds for cancellation of patent and annulment of
title, should never be presumed but must be proved
by clear and convincing evidence, mere
preponderance of evidence not even being
adequate. It is but judicious to require the
Government, in an action for reversion, to show the
details attending the issuance of title over the alleged
inalienable land and explain why such issuance has
deprived the State of the claimed property.
(Emphasis supplied.)
It may do well for the Republic to remember that
there is a prima facie presumption of regularity in the
issuance of Decree Nos. 10364 and 18969, as well
as OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.), in Doña
Demetria’s name, and the burden of proof falls upon
the Republic to establish by clear and convincing
evidence that said decrees and certificates of title
are null and void.
IV
DISPOSITIVE PART
WHEREFORE, premises considered, the Court
renders the following judgment in the Petitions at
bar:
1) In G.R. No. 170375 (Expropriation Case),
the Court GRANTS the Petition for Review of
the Republic of the Philippines. It REVERSES
and SETS ASIDE the Resolutions dated July
12, 2005 and October 24, 2005 of the
Regional Trial Court, Branch 1 of Iligan City,
Lanao del Norte. It further ORDERS the
reinstatement of the Complaint in Civil Case
No. 106, the admission of the Supplemental
Complaint of the Republic, and the return of
the original record of the case to the court of
origin for further proceedings. No costs.
2) In G.R. Nos. 178779 and 178894 (Quieting
of Title Case), the Court DENIES the
consolidated Petitions for Review of Landtrade
Realty Corporation, Teofilo Cacho, and/or Atty.
Godofredo Cabildo for lack of merit. It
AFFIRMS the Decision dated January 19,
2007 and Resolution dated July 4, 2007 of the
Court of Appeals in CA-G.R. CV. No. 00456,
affirming in toto the Decision dated July 17,
2004 of the Regional Trial Court, Branch 3 of
Iligan City, Lanao del Norte, in Civil Case No.
4452. Costs against Landtrade Realty
Corporation, Teofilo Cacho, and Atty.
Godofredo Cabildo.
3) In G.R. No. 170505 (The Ejectment or
Unlawful Detainer Case – execution pending
appeal before the Regional Trial Court), the
Court DENIES the Petition for Review of
Landtrade Realty Corporation for being moot
and academic given that the Regional Trial
Court, Branch 1 of Iligan City, Lanao del Norte
had already rendered a Decision dated
December 12, 2005 in Civil Case No. 6613.
No costs.
4) In G.R. Nos. 173355-56 and 173563-
64 (The Ejectment or Unlawful Detainer Case
– execution pending appeal before the Court
of Appeals), the Court GRANTS the
consolidated Petitions for Certiorari and
Prohibition of the National Power Corporation
and National Transmission Corporation. It
SETS ASIDE the Resolution dated June 30,
2006 of the Court of Appeals in CA-G.R. SP
Nos. 00854 and 00889 for having been
rendered with grave abuse of discretion
amounting to lack or excess of jurisdiction. It
further ORDERS the Court of Appeals to issue
a writ of preliminary injunction enjoining the
execution of the Decision dated December 12,
2005 of the Regional Trial Court, Branch 1 of
Iligan City, Lanao del Norte, in Civil Case No.
6613, while the same is pending appeal before
the Court of Appeals in CA-G.R. SP Nos.
00854 and 00889. It finally DIRECTS the
 Court of Appeals to resolve without further
delay the pending appeals before it, in CA-
G.R. SP Nos. 00854 and 00889, in a manner
not inconsistent with this Decision. No costs.
5) In G.R. No. 173401 (Cancellation of Titles
and Reversion Case), the Court GRANTS the
Petition for Review of the Republic of the
Philippines. It REVERSES and SETS
ASIDE the Orders dated December 13, 2005
and May 16, 2006 of the Regional Trial Court,
Branch 4 of Iligan City in Civil Case No. 6686.
It further ORDERS the reinstatement of the
Complaint in Civil Case No. 6686 and the
return of the original record of the case to the
court of origin for further proceedings. No
costs.
SO ORDERED.
ANNOTATIONS: JUST COMPENSATION IN
EMINENT DOMAIN 686 SCRA 869
Just compensation is defined as the full and fair
equivalent of the property taken from its owner by
the expropriator. The measure is not the taker’s gain,
but the owner’s loss. The word "just" is used to
intensify the meaning of the word "compensation"
and to convey thereby the idea that the equivalent to
be rendered for the property to be taken shall be
real, substantial, full, and ample. Such "just"-ness of
the compensation can only be attained by using
reliable and actual data as bases in fixing the value
of the condemned property.24 Trial courts are
required to be more circumspect in its evaluation of
just compensation due the property owner,
considering that eminent domain cases involve the
expenditure of public funds