RE: REQUEST OF THE PLAINTIFFS, HEIRS OF THE PASSENGERS OF THE DOÑA PAZ TO SET ASIDE

THE ORDER DATED JANUARY 4, 1988 OF JUDGE B.D. CHINGCUANGCO.

The Court deliberated on the letter-request of Atty. Pablito M. Rojas dated January 5, 1988, the comments
thereon of Quezon City Executive Judge B.D. Chingcuangco and of counsel for Sulpicio Lines et al, and the
reply to said comments.

It appears that on January 4, 1988 a complaint for damages amounting to more than one and a half billion
pesos was filed in the name and behalf of the relatives or heirs of the victims of "the worst sea disaster in
history:" the sinking of the vessel Doña Paz caused by its collision with another vessel. The complaint
characterized the action thereby instituted as a "lass suit",prosecuted by the twenty-seven (27) named plaintiffs
in their behalf and in presentation of the approximately 4,000 persons . . . (who also) are all close relatives and
legal heirs of the passengers of the Doña Paz" (par. 5). The action's character as a class suit results, it is
claimed, from "the subject matter . . . (thereof being) of general or common interest to 4,000 persons, more or
less, all of whom are residing variously in Samar, Leyte and Metro Manila;" and its institution is proper because
the Identified plaintiffs are sufficiently numerous and representative to fully protect the interests of all" (par. 3).
The complaint prayed that —

... judgment be rendered in favor of the plaintiffs and all other persons embraced in this class suit, and against
the defendants, ordering them to pay to the former, jointly and severally, as follows:

a) From P200,000.00 to P400,000.00 per victim or passenger who perished in the sinking of the vessel
DOÑA PAZ, by way of actual or compensatory, moral and exemplary damages, or the total amount of from
P800,000,000.00 to Pl,200,000,000.00 (should be P1,600,000,000.00) for all of the 4,000 passengers on board
said vessel;

b) an amount which this Honorable Court may deem just and reasonable as and by way of attorney's fees
and, under the circumstances of this case, P10,000,000.00 would be reasonable;

xxx xxx xxx

Together with the complaint, the plaintiffs filed a "MOTION FOR LEAVE TO FILE CASE AS PAUPER
LITIGANT." They alleged that "a big majority ... (of them) are poor and have no sufficient means to finance the
filing of this case especially because, considering the gargantuan amount of damages involved, the amount of
filing fee alone will run to several thousands of pesos," that in view thereof and the fact that the case was one
of "national concern as shown by the public outcry and sustained publicity that it has evoked,' the Court "may
be justified in ... (allowing them) to file the instant suit as pauper litigants or, in the alternative, (ruling) that the
legal fees incident to the filing of this case may constitute a lien on whatever judgment may be recovered by
the plaintiffs therein." On the same day, their counsel submitted a certification of the City Assessor of Quezon
City of even date to the effect "that according to the assessment records x x there is no property whether land
or improvements registered for taxation purposes in the . . names of' seven (7) of the named plaintiffs.

By Order dated January 4, 1988, the motion was granted by Judge Chingcuangco in his capacity as Executive
Judge only in so far as said seven (7) plaintiffs were concerned, but not as regards the case.

It is this order that the plaintiffs, in their counsel's aforementioned letter of January 5, 1988, request this Court
to set aside. They ask that they all instead be allowed to prosecute the case as pauper litigants and they be
exempt from paying filing fees which they say have "been assessed in the amount of P6,060,252.50 based on
the total maximum claim of P1,200,000,000.00 as per the complaint."

In the comment (dated January 22, 1988) submitted by him in response to this Court's direction, Judge
Chingcuangco declared that he had opted to leave the matter of the propriety of the class suit "to the sound
judgment of the branch to which this case may be raffled," although he personally "would have freely allowed
all plaintiffs to litigate as pauper litigants and close ... (his) eyes to the fact that one of them is the present Clerk
of this Court and another regional trial court judge;"and that he had 'suggested to the plaintiffs' counsel to seek
the assistance of the highest tribunal of the land with the fond hope that it may once again exercise its
highly-regarded judicial activism by allowing that which this Executive Judge cannot do, that is, allow, in the
highest interest of public service, all plaintiffs to litigate as pauper litigants, and consider the case as a class
suit."

The defendants, Sulpicio Lines, Inc., et al., in their own comment, point out that there were only 1,493
passengers on board the Doña Paz at the time of the tragedy, not 4,000; they have not been remiss in
attending to the immediate needs and claims of the the legal basis for the claim and the amount of damages
recoverable;"' it is doubtful whether 27 plaintiffs are sufficiently numerous and representative to fully protect the
interests of all the suit preempts the other claimants' cause of action as to the amount of recovery and as to the
venue of the suit; there are in truth only seven plaintiffs qualified to sue as pauper litigants; and the claimants
not authorized to sue as paupers may continue with the action.

In the first place, it is not the rule governing class suits under Section 12, Rule 3 of the Rules of Court that in
truth is involved in the proceedings at bar, but that concerning permissive joinder of parties in Section 6 of the
same Rule 3. 1 It is perhaps not inappropriate for the Court to avail of the opportunity that the proceeding at
bar presents to point out the distinctions between the two rules, as these appear to have been missed by the
petitioners and even by the Court a quo.

The first cited provision reads as follows:

SEC. 12. Class Suit. — When the subject matter of his controversy is one of csurvivors and next of kin of
the victims; each claimant is a class unto himself in terms of ommon or general interest to many persons, and
the parties are so numerous that it is impracticable to bring them all before the court, one or more may sue or
defend for the benefit of all. But in such case the court shall make sure that the parties actually before it are
sufficiently numerous and representative so that all interests concerned are fully protected. Any party in
interest shall have a right to intervene in protection of his individual interest.

What is contemplated, as will be noted, is that (a) the subject matter in controversy is of common or general
interest to many persons, and (b) those persons are so numerous as to make it impracticable to bring them all
before the court. Illustrative of the rule is a so-called derivative suit brought in behalf of numerous stockholders
of a corporation to perpetually enjoin or nullify what is claimed to be a breach of trust or an ultra vires act of the
company's board of directors. 2 In such a suit, there is one, single right of action pertaining to numerous
stockholders, not multiple rights belonging separately to several, distinct persons.

On the other hand, if there are many persons who have distinct, separate rights against the same party or
group of parties, but those rights arise from the same transaction or series of transactions and there are
common questions of fact or law resulting therefrom, the former may join as plaintiffs in one action against the
same defendant. This is authorized by the above mentioned joinder-of- parties rule in Section 6 of Rule 3.
SEC. 6. Permissive joinder of parties. — All persons in whom or against whom any right to relief in
respect to or arising out of the same transaction or series of transaction is alleged to exist, whether jointly,
severally, or in the alternative, may, except as otherwise provided in these rules, join as plaintiffs or be joined
as defendants in one complaint, where any question of law or fact common to all such plaintiffs or to all such
defendants may arise in the action; but the court may make such orders as may be just to prevent any plaintiff
or defendant from being embarrassed or put texpense in connection with any proceedings in which he may
have no interests.

For instance, it has been held that employees dismissed by their employer on the same occasion for
substantially the same reasons, allegedly without cause or justification, may join as plaintiff in a single action to
obtain relief from their employer. 3 In such a case, the plaintiff each have a material interest only in the
damages properly due to him, not in those that may be payable to the others, although their rights thereto arise
from the same transaction. In other words, there are as many rights of action as there are plaintiffs joined in the
action. Similarly, the owner of a tract of land whose property has been illegally occupied by many persons
claiming different portions thereof, may bring a single action against all illegal occupants thereof, in accordance
with this rule of permissive joinder of parties. 4 The right of action is not unal but plural, there being as many
rights asserted in the action as there are defendants, each defendant having an interest only in the portion of
the land occupied by him.

It is true that in both juridical situations, similar essential factors exist i.e., the same transaction or series of
transactions is involved; and common questions of fact or law are at issue. What makes the situation a proper
case for a class suit is the circumstance that there is only one right or cause of action pertaining or belonging in
common to many persons, not separately or severally to distinct individuals.

The "true" class action, which is the invention of equity, is one which involves the enforcement of a right which
is joint, common, or secondary or derivative. ... (It) is a suit wherein, but for the class action device, the joinder
of all interested parties would be essential. 5

A "true class actions" — distinguished from the so-called hybrid and the spurious class action in U.S. Federal
Practice-involves principles of compulsory joinder, since . . (were it not) for the numerosity of the class
members all should ... (be) before the court. Included within the true class suit ... (are) the shareholders'
derivative suit and a class action by or against an unincorporated association. ... A judgment in a class suit,
whether favorable or unfavorable to the class, is binding under res judicata principles upon all the members of
the class, whether or not they were before the court. It is the non-divisible nature of the right sued on which
determines both the membership of the class and the res judicata effect of the final determination of the right. 6

The object of the suit is to obtain relief for or against numerous persons as a group or as an integral entity, and
not as separate, distinct individuals whose rights or liabilities are separate from and independent of those
affecting the others. 7

An action instituted by several hundred members of a voluntary association against their officers to compel
them to wind up the association's affairs and render an accounting of the money and property in their
possession has been held to be a class suit. 8 In that case there was in truth only one single right of action
sought to be enforced by the numerous plaintiff, not separate, individual, distinct rights pertaining
independently to them. 9

On the other hand — unlike an action by numerous stockholders (which is properly a class suit) to restrain an
unauthorized act of a corporation's board of directors, e.g., to extend or shorten the corporate life or increase
capital stock of incur bonded indebtedness without the specified majority vote prescribed by the Corporation
Law, in which the right sought to be vindicated is single, common and general, not multiple and separate and
distinct from each other's 10 — an action by shareholders of a banking corporation, for example, to enforce
their right to subscribe to stock left unsubscribed by other stockholders who failed to exercise their own right to
do so on or before a stipulated date, was held not to be a class suit since each one of them 'had determinable
interest; each one had a right, if any, only to his respective portion of the stocks (or a definite number of
shares) ... and (no one) of them had any right to, or any interest in, the stock to which another was
entitled."11So, too, an action for libel flied in behalf of 8,500 sugarcane planters has been held not to be a
class suit since 'each of the plaintiffs has a separate and distinct reputation in the community ... (and) do not
have a common or general interest in the subject matter of the controversy. 12 But in all these instances, and
prescinding from pragmatic considerations, a permissive joinder of parties would have been perfectly proper in
accordance with the aforecited Section 6 of Rule 3 .13

The other factor that serves to distinguish the rule on class suits from that of permissive joinder of parties is, of
course, the numerousness of parties involved in the former. The rule is that for a class suit to be allowed, it is
needful inter alia that the parties be so numerous that it would be impracticable to bring them all before the
court.

The case at bar not being a proper one for a class suit, it follows that the action may not be maintained by a
representative few in behalf of all the others. Be all this as it may, as regards the computation of the amount
involved in the action for purposes of determining the original jurisdiction over it, and the correlative matter of
the amount of filing fees to be paid, it is immaterial whether the rule applied be that on class suits or permissive
joinder of parties. For in either case, it is the totality of the amounts claimed by or against the parties that
determines jurisdiction, exclusive only of interest and costs. 14

The second question-whether or not the numerous claimants, should they join as parties plaintiff, may be
allowed to sue as pauper litigants, not because they are shown to be without means to maintain their suits, but
on the ground of the alleged "national importance" of the subject matter, or upon an unverified averment that
most of them are impecunious-yields another negative answer.

The rule on the matter is clear. A party may be allowed to litigate in forma pauper is only. . upon a proper
showing that he has no means to that effect by affidavits, certificate of the corresponding provincial, city or
municipal treasurer, or otherwise. 15

Thus, every would be litigant who seeks exemption from the payment of the fees prescribed for maintaining an
action must establish, not simply allege, his lack of means Where there is a multiplicity of such parties, each
must show such lack, in propria persona as it were. And that the particular circumstances or possible
consequences of an actual or contemplated suit are such as to transcend the narrow personal interests of the
immediate parties thereto and to so impinge upon the wider interests of the people at large as to assume an
aspect of "national importance," does not under any existing law or rule justify excusing such parties from
paying the requisite judicial fees or costs.

It should moreover be quite obvious that the denial of the privilege to prosecute as paupers litigant to those
who do not qualify as such cannot in any sense be deemed a denial of free access to the courts by reason of
poverty, 16 as counsel for the plaintiffs suggests.

Everyone — and the members of the Court are no exception — deplores that tragedy that claimed so many
unsuspecting victims in what has been described, to repeat, as 'the worst single -disaster' in maritime history.
Everyone condoles and symphatizes with those whom the victims, both known and unknown, left behind, many
of whom were denied even the small consolation of being able to bury their dead. Everyone undoubtedly
hopes and wishes that these survivors may quickly obtain adequate recompense for the untimely loss of their
loved ones. But sympathy and commiseration however-well-deserved, are not considerations that would
justifiably argue for bending or dispensing with the observance of the rules which prescribe now such
vindication may be obtained in the courts of law.

WHEREFORE, the order complained of being in accordance with law, the solicitation to set aside the same,
and to be exempted from observance of the rule on paupers litigant, is DENIED. The authority to litigate in the
form of a class action is likewise DENIED.

NEWSWEEK, INC. vs. THE INTERMEDIATE APPELLATE COURT

FERIA, J.:

Petitioner, Newsweek, Inc., a foreign corporation licensed to do business in the Philippines, in this special
action for certiorari, prohibition with preliminary injunction, seeks to annul the decision of the Intermediate
Appellate Court dated December 17, 1982 sustaining the Order of the then Court of First Instance of Bacolod
City which denied petitioner's Motion to Dismiss the complaint for libel filed by private respondents (Civil Case
No. 15812), and the Resolution dated March 10, 1983 which denied its Motion for Reconsideration.

It appears that on March 5, 1981, private respondents, incorporated associations of sugarcane planters in
Negros Occidental claiming to have 8,500 members and several individual sugar planters, filed Civil Case No.
15812 in their own behalf and/or as a class suit in behalf of all sugarcane planters in the province of Negros
Occidental, against petitioner and two of petitioners' non-resident correspondents/reporters Fred Bruning and
Barry Came. The complaint alleged that petitioner and the other defendants committed libel against them by
the publication of the article "An Island of Fear" in the February 23, 1981 issue of petitioner's weekly news
magazine Newsweek. The article supposedly portrayed the island province of Negros Occidental as a place
dominated by big landowners or sugarcane planters who not only exploited the impoverished and underpaid
sugarcane workers/laborers, but also brutalized and killed them with imprunity. Complainants therein alleged
that said article, taken as a whole, showed a deliberate and malicious use of falsehood, slanted presentation
and/or misrepresentation of facts intended to put them (sugarcane planters) in bad light, expose them to public
ridicule, discredit and humiliation here in the Philippines and abroad, and make them objects of hatred,
contempt and hostility of their agricultural workers and of the public in general. They prayed that defendants be
ordered to pay them PlM as actual and compensatory damages, and such amounts for moral, exemplary and
corrective damages as the court may determine, plus expenses of litigation, attorney's fees and costs of suit. A
photo copy of the article was attached to the complaint.

On November 5, 1981, petitioner filed a motion to dismiss on the grounds that (1) the printed article sued upon
is not actionable in fact and in law; and (2) the complaint is bereft of allegations that state, much less support a
cause of action. It pointed out the non-libelous nature of the article and, consequently, the failure of the
complaint to state a cause of action. Private respondents filed an Opposition to the motion to dismiss and
petitioner filed a reply.

On March 17, 1982, the trial court denied the motion to dismiss, stating that the grounds on which the motion
to dismiss are predicated are not indubitable as the complaint on its face states a valid cause of action; and the
question as to whether the printed article sued upon its actionable or not is a matter of evidence. Petitioner's
motion for reconsideration was denied on May 28, 1982.
On June 18, 1982, petitioner filed a petition for certiorari with respondent Court (CA-G. R. No. 14406) seeking
the annulment of the aforecited trial court's Orders for having been issued with such a grave abuse of
discretion as amounting to lack of jurisdiction and praying for the dismissal of the complaint for failure to state a
cause of action.

As earlier stated, respondent Court affirmed the trial court's Orders in a Decision dated December 17, 1982
and ordered the case to be tried on the merits on the grounds that -(1) the complaint contains allegations of
fact which called for the presentation of evidence; and (2) certiorari under Rule 65 cannot be made to
substitute for an appeal where an appeal would lie at a proper time. Subsequently, on March 10, 1983, the
respondent Court denied petitioner's Motion for Reconsideration of the aforesaid decision, hence this petition.

The proper remedy which petitioner should have taken from the decision of respondent Court is an appeal by
certiorari under Rule 45 of the Rules of Court and not the special civil action of certiorari and prohibition under
Rule 65 of said Rules. However, since the petition was filed on time within fifteen days from notice of the
Resolution denying the motion for reconsideration, we shall treat the same as a petition for review on certiorari.
The two (2) issues raised in the petition are: (1) whether or not the private respondents' complaint failed to
state a cause of action; and (2) whether or not the petition for certiorari and prohibition is proper to question the
denial of a motion to dismiss for failure to state a cause of action.

First, petitioner argues that private respondents' complaint failed to state a cause of action because the
complaint made no allegation that anything contained in the article complained of regarding sugarcane planters
referred specifically to any one of the private respondents; that libel can be committed only against individual
reputation; and that in cases where libel is claimed to have been directed at a group, there is actionable
defamation only if the libel can be said to reach beyond the mere collectivity to do damage to a specific,
individual group member's reputation.

We agree with petitioner.

In the case of Corpus vs. Cuaderno, Sr. (16 SCRA 807) this Court ruled that "in order to maintain a libel suit, it
is essential that the victim be identifiable (People vs. Monton, L-16772, November 30, 1962), although it is not
necessary that he be named (19 A.L.R. 116)." In an earlier case, this Court declared that" ... defamatory matter
which does not reveal the Identity of the person upon whom the imputation is cast, affords no ground of action
unless it be shown that the readers of the libel could have Identified the personality of the individual defamed."
(Kunkle vs. Cablenews-American and Lyons 42 Phil. 760).

This principle has been recognized to be of vital importance, especially where a group or class of persons, as
in the case at bar, claim to have been defamed, for it is evident that the larger the collectivity, the more difficult
it is for the individual member to prove that the defamatory remarks apply to him. (Cf. 70 ALR 2d. 1384).

In the case of Uy Tioco vs. Yang Shu Wen , 32 Phil. 624, this Court held as follows:

Defamatory remarks directed at a class or group of persons in general language only, are not actionable by
individuals composing the class or group unless the statements are sweeping; and it is very probable that even
then no action would lie where the body is composed of so large a number of persons that common sense
would tell those to whom the publication was made that there was room for persons connected with the body to
pursue an upright and law abiding course and that it would be unreasonable and absurd to condemn all
because of the actions of a part. (supra p. 628).
It is evident from the above ruling that where the defamation is alleged to have been directed at a group or
class, it is essential that the statement must be so sweeping or all-embracing as to apply to every individual in
that group or class, or sufficiently specific so that each individual in the class or group can prove that the
defamatory statement specifically pointed to him, so that he can bring the action separately, if need be.

We note that private respondents filed a "class suit" in representation of all the 8,500 sugarcane planters of
Negros Occidental. Petitioner disagrees and argues that the absence of any actionable basis in the complaint
cannot be cured by the filing of a class suit on behalf of the aforesaid sugar planters.

We find petitioner's contention meritorious.

The case at bar is not a class suit. It is not a case where one or more may sue for the benefit of all (Mathay vs.
Consolidated Bank and Trust Company, 58 SCRA 559) or where the representation of class interest affected
by the judgment or decree is indispensable to make each member of the class an actual party (Borlaza vs.
Polistico, 47 Phil. 348). We have here a case where each of the plaintiffs has a separate and distinct reputation
in the community. They do not have a common or general interest in the subject matter of the controversy.

The disputed portion of the article which refers to plaintiff Sola and which was claimed to be libelous never
singled out plaintiff Sola as a sugar planter. The news report merely stated that the victim had been arrested by
members of a special police unit brought into the area by Pablo Sola, the mayor of Kabankalan. Hence, the
report, referring as it does to an official act performed by an elective public official, is within the realm of
privilege and protected by the constitutional guarantees of free speech and press.

The article further stated that Sola and the commander of the special police unit were arrested. The Court
takes judicial notice of this fact. (People vs. Sola, 103 SCRA 393.)

The second issue to be resolved here is whether or not the special civil action of certiorari or prohibition is
available to petitioner whose motion to dismiss the complaint and subsequent motion for reconsideration were
denied.

As a general rule, an order denying a motion to dismiss is merely interlocutory and cannot be subject of appeal
until final judgment or order is rendered. (Sec. 2 of Rule 4 1). The ordinary procedure to be followed in such a
case is to file an answer, go to trial and if the decision is adverse, reiterate the issue on appeal from the final
judgment. The same rule applies to an order denying a motion to quash, except that instead of filing an answer
a plea is entered and no appeal lies from a judgment of acquittal.

This general rule is subject to certain exceptions. If the court, in denying the motion to dismiss or motion to
quash, acts without or in excess of jurisdiction or with grave abuse of discretion, then certiorari or prohibition
lies. The reason is that it would be unfair to require the defendant or accused to undergo the ordeal and
expense of a trial if the court has no jurisdiction over the subject matter or offense, or is not the court of proper
venue, or if the denial of the motion to dismiss or motion to quash is made with grave abuse of discretion or a
whimsical and capricious exercise of judgment. In such cases, the ordinary remedy of appeal cannot be plain
and adequate. The following are a few examples of the exceptions to the general rule.

In De Jesus vs. Garcia (19 SCRA 554), upon the denial of a motion to dismiss based on lack of jurisdiction
over the subject matter, this Court granted the petition for certiorari and prohibition against the City Court of
Manila and directed the respondent court to dismiss the case.
In Lopez vs. City Judge (18 SCRA 616), upon the denial of a motion to quash based on lack of jurisdiction over
the offense, this Court granted the petition for prohibition and enjoined the respondent court from further
proceeding in the case.

In Enriquez vs. Macadaeg (84 Phil. 674), upon the denial of a motion to dismiss based on improper venue, this
Court granted the petition for prohibition and enjoined the respondent judge from taking cognizance of the case
except to dismiss the same.

In Manalo vs. Mariano (69 SCRA 80), upon the denial of a motion to dismiss based on bar by prior judgment,
this Court granted the petition for certiorari and directed the respondent judge to dismiss the case.

In Yuviengco vs. Dacuycuy (105 SCRA 668), upon the denial of a motion to dismiss based on the Statute of
Frauds, this Court granted the petition for certiorari and dismissed the amended complaint.

In Tacas vs. Cariaso (72 SCRA 527), this Court granted the petition for certiorari after the motion to quash
based on double jeopardy was denied by respondent judge and ordered him to desist from further action in the
criminal case except to dismiss the same.

In People vs. Ramos (83 SCRA 11), the order denying the motion to quash based on prescription was set
aside on certiorari and the criminal case was dismissed by this Court.

Respondent Court correctly stated the general rule and its exceptions. However, it ruled that none of the
exceptions is present in the case at bar and that the case appears complex and complicated, necessitating a
full-blown trial to get to the bottom of the controversy.

Petitioner's motion to dismiss is based on the ground that the complaint states no cause of action against it by
pointing out the non-libelous nature of the article sued upon. There is no need of a trial in view of the
conclusion of this Court that the article in question is not libelous. The specific allegation in the complaint, to
the effect that the article attributed to the sugarcane planters the deaths and brutalization of sugarcane
workers, is not borne out by a perusal of the actual text.

The complaint contains a recital of the favorable working conditions of the agricultural workers in the sugar
industry and the various foundations and programs supported by planters' associations for the benefit of their
workers. Undoubtedly, the statements in the article in question are sweeping and exaggerated; but,
paraphrasing the ruling in the Uy Tioco case above quoted, it would be unreasonable and absurd to condemn
the majority of the sugarcane planters, who have at heart the welfare of their workers, because of the actions
of a part. Nonetheless, articles such as the one in question may also serve to prick the consciences of those
who have but are not doing anything or enough for those who do not have.

On the other hand, petitioner would do well to heed the admonition of the President to media that they should
check the sources of their information to ensure the publication of the truth. Freedom of the press, like all
freedoms, should be exercised with responsibility.

WHEREFORE, the decision of the Intermediate Appellate Court is reversed and the complaint in Civil Case
No. 15812 of the Court of First Instance of Negros Occidental is dismissed, without pronouncement as to
costs.
OPPOSA V. FACTORAN

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the
petitioners dramatically associate with the twin concepts of "inter-generational responsibility" and
"inter-generational justice." Specifically, it touches on the issue of whether the said petitioners have a cause of
action to "prevent the misappropriation or impairment" of Philippine rainforests and "arrest the unabated
hemorrhage of the country's vital life support systems and continued rape of Mother Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro
Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein, now
the principal petitioners, are all minors duly represented and joined by their respective parents. Impleaded as
an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit
corporation organized for the purpose of, inter alia, engaging in concerted action geared for the protection of
our environment and natural resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr.,
then Secretary of the Department of Environment and Natural Resources (DENR). His substitution in this
petition by the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion
by the petitioners.1 The complaint2 was instituted as a taxpayers' class suit3 and alleges that the plaintiffs "are
all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of
the natural resource treasure that is the country's virgin tropical forests." The same was filed for themselves
and others who are equally concerned about the preservation of said resource but are "so numerous that it is
impracticable to bring them all before the Court." The minors further asseverate that they "represent their
generation as well as generations yet unborn."4 Consequently, it is prayed for that judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his behalf to —

(1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land
area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which
varied, rare and unique species of flora and fauna may be found; these rainforests contain a genetic, biological
and chemical pool which is irreplaceable; they are also the habitat of indigenous Philippine cultures which have
existed, endured and flourished since time immemorial; scientific evidence reveals that in order to maintain a
balanced and healthful ecology, the country's land area should be utilized on the basis of a ratio of fifty-four per
cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and
other uses; the distortion and disturbance of this balance as a consequence of deforestation have resulted in a
host of environmental tragedies, such as (a) water shortages resulting from drying up of the water table,
otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of the water table as
a result of the intrusion therein of salt water, incontrovertible examples of which may be found in the island of
Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and the consequential loss of soil fertility and
agricultural productivity, with the volume of soil eroded estimated at one billion (1,000,000,000) cubic meters
per annum — approximately the size of the entire island of Catanduanes, (d) the endangering and extinction of
the country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of cultural
communities, including the disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and
seabeds and consequential destruction of corals and other aquatic life leading to a critical reduction in marine
resource productivity, (g) recurrent spells of drought as is presently experienced by the entire country, (h)
increasing velocity of typhoon winds which result from the absence of windbreakers, (i) the floodings of
lowlands and agricultural plains arising from the absence of the absorbent mechanism of forests, (j) the
siltation and shortening of the lifespan of multi-billion peso dams constructed and operated for the purpose of
supplying water for domestic uses, irrigation and the generation of electric power, and (k) the reduction of the
earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic
changes such as the phenomenon of global warming, otherwise known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so
capable of unquestionable demonstration that the same may be submitted as a matter of judicial notice. This
notwithstanding, they expressed their intention to present expert witnesses as well as documentary,
photographic and film evidence in the course of the trial.

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests constituting
roughly 53% of the country's land mass.

9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said
rainforests or four per cent (4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely
2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of immature and
uneconomical secondary growth forests.

11. Public records reveal that the defendant's, predecessors have granted timber license agreements ('TLA's')
to various corporations to cut the aggregate area of 3.89 million hectares for commercial logging purposes.

A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".

12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour —
nighttime, Saturdays, Sundays and holidays included — the Philippines will be bereft of forest resources after
the end of this ensuing decade, if not earlier.

13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued
trend of deforestation to the plaintiff minor's generation and to generations yet unborn are evident and
incontrovertible. As a matter of fact, the environmental damages enumerated in paragraph 6 hereof are already
being felt, experienced and suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands will
work great damage and irreparable injury to plaintiffs — especially plaintiff minors and their successors — who
may never see, use, benefit from and enjoy this rare and unique natural resource treasure.

This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he
holds in trust for the benefit of plaintiff minors and succeeding generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens patriae.

16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990, plaintiffs
served upon defendant a final demand to cancel all logging permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage and
extreme prejudice of plaintiffs.

18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of
plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren and
devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had been abundantly
blessed with.

19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy
enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the policy of the State
—

(a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive
and enjoyable harmony with each other;

(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and;

(c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-being.
(P.D. 1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the
Constitutional policy of the State to —

a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient
use of natural resources (sic)." (Section 1, Article XII of the Constitution);

b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV, id.);

d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the
rhythm and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind — the natural law — and violative of
plaintiffs' right to self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the
unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth. 6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint
based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue
raised by the plaintiffs is a political question which properly pertains to the legislative or executive branches of
Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain that (1) the complaint
shows a clear and unmistakable cause of action, (2) the motion is dilatory and (3) the action presents a
justiciable question as it involves the defendant's abuse of discretion.

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss.7 In the
said order, not only was the defendant's claim — that the complaint states no cause of action against him and
that it raises a political question — sustained, the respondent Judge further ruled that the granting of the relief
prayed for would result in the impairment of contracts which is prohibited by the fundamental law of the land.

Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and
ask this Court to rescind and set aside the dismissal order on the ground that the respondent Judge gravely
abused his discretion in dismissing the action. Again, the parents of the plaintiffs-minors not only represent
their children, but have also joined the latter in this case.8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their
respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf of the
respondents and the petitioners filed a reply thereto.

Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient
allegations concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code
(Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential
Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution
recognizing the right of the people to a balanced and healthful ecology, the concept of generational genocide in
Criminal Law and the concept of man's inalienable right to self-preservation and self-perpetuation embodied in
natural law. Petitioners likewise rely on the respondent's correlative obligation per Section 4 of E.O. No. 192, to
safeguard the people's right to a healthful environment.

It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting
Timber License Agreements (TLAs) to cover more areas for logging than what is available involves a judicial
question.

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain
that the same does not apply in this case because TLAs are not contracts. They likewise submit that even if
TLAs may be considered protected by the said clause, it is well settled that they may still be revoked by the
State when the public interest so requires.

On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal
right violated by the respondent Secretary for which any relief is provided by law. They see nothing in the
complaint but vague and nebulous allegations concerning an "environmental right" which supposedly entitles
the petitioners to the "protection by the state in its capacity as parens patriae." Such allegations, according to
them, do not reveal a valid cause of action. They then reiterate the theory that the question of whether logging
should be permitted in the country is a political question which should be properly addressed to the executive
or legislative branches of Government. They therefore assert that the petitioners' resources is not to file an
action to court, but to lobby before Congress for the passage of a bill that would ban logging totally.

As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the
State without due process of law. Once issued, a TLA remains effective for a certain period of time — usually
for twenty-five (25) years. During its effectivity, the same can neither be revised nor cancelled unless the
holder has been found, after due notice and hearing, to have violated the terms of the agreement or other
forestry laws and regulations. Petitioners' proposition to have all the TLAs indiscriminately cancelled without
the requisite hearing would be violative of the requirements of due process.

Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No.
90-777 as a class suit. The original defendant and the present respondents did not take issue with this matter.
Nevertheless, We hereby rule that the said civil case is indeed a class suit. The subject matter of the complaint
is of common and general interest not just to several, but to all citizens of the Philippines. Consequently, since
the parties are so numerous, it, becomes impracticable, if not totally impossible, to bring all of them before the
court. We likewise declare that the plaintiffs therein are numerous and representative enough to ensure the full
protection of all concerned interests. Hence, all the requisites for the filing of a valid class suit under Section
12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the
latter being but an incident to the former.

This case, however, has a special and novel element. Petitioners minors assert that they represent their
generation as well as generations yet unborn. We find no difficulty in ruling that they can, for themselves, for
others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf
of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as
the right to a balanced and healthful ecology is concerned. Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety.9 Such rhythm and
harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural
resources to the end that their exploration, development and utilization be equitably accessible to the present
as well as future generations. 10 Needless to say, every generation has a responsibility to the next to preserve
that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the
minors' assertion of their right to a sound environment constitutes, at the same time, the performance of their
obligation to ensure the protection of that right for the generations to come.

The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the
petition.

After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues
raised and arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the
respondent Judge's challenged order for having been issued with grave abuse of discretion amounting to lack
of jurisdiction. The pertinent portions of the said order reads as follows:

xxx xxx xxx

After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of
alleging, with sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a specific
legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that
the Complaint is replete with vague assumptions and vague conclusions based on unverified data. In fine,
plaintiffs fail to state a cause of action in its Complaint against the herein defendant.

Furthermore, the Court firmly believes that the matter before it, being impressed with political color and
involving a matter of public policy, may not be taken cognizance of by this Court without doing violence to the
sacred principle of "Separation of Powers" of the three (3) co-equal branches of the Government.

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and
desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts" abhored (sic) by the fundamental law. 11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a
specific legal right involved or a specific legal wrong committed, and that the complaint is replete with vague
assumptions and conclusions based on unverified data. A reading of the complaint itself belies these
conclusions.

The complaint focuses on one specific fundamental legal right — the right to a balanced and healthful ecology
which, for the first time in our nation's constitutional history, is solemnly incorporated in the fundamental law.
Section 16, Article II of the 1987 Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature.

This right unites with the right to health which is provided for in the preceding section of the same article:

Sec. 15. The State shall protect and promote the right to health of the people and instill health consciousness
among them.

While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State
Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and
political rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it
concerns nothing less than self-preservation and self-perpetuation — aptly and fittingly stressed by the
petitioners — the advancement of which may even be said to predate all governments and constitutions. As a
matter of fact, these basic rights need not even be written in the Constitution for they are assumed to exist from
the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the
well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are
mandated as state policies by the Constitution itself, thereby highlighting their continuing importance and
imposing upon the state a solemn obligation to preserve the first and protect and advance the second, the day
would not be too far when all else would be lost not only for the present generation, but also for those to come
— generations which stand to inherit nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the
environment. During the debates on this right in one of the plenary sessions of the 1986 Constitutional
Commission, the following exchange transpired between Commissioner Wilfrido Villacorta and Commissioner
Adolfo Azcuna who sponsored the section in question:

MR. VILLACORTA:

Does this section mandate the State to provide sanctions against all forms of pollution — air, water and noise
pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the correlative duty of
not impairing the same and, therefore, sanctions may be provided for impairment of environmental balance. 12

The said right implies, among many other things, the judicious management and conservation of the country's
forests.

Without such forests, the ecological or environmental balance would be irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as
the other related provisions of the Constitution concerning the conservation, development and utilization of the
country's natural resources, 13 then President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192,
14 Section 4 of which expressly mandates that the Department of Environment and Natural Resources "shall
be the primary government agency responsible for the conservation, management, development and proper
use of the country's environment and natural resources, specifically forest and grazing lands, mineral,
resources, including those in reservation and watershed areas, and lands of the public domain, as well as the
licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable
sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos."
Section 3 thereof makes the following statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the sustainable use,
development, management, renewal, and conservation of the country's forest, mineral, land, off-shore areas
and other natural resources, including the protection and enhancement of the quality of the environment, and
equitable access of the different segments of the population to the development and the use of the country's
natural resources, not only for the present generation but for future generations as well. It is also the policy of
the state to recognize and apply a true value system including social and environmental cost implications
relative to their utilization, development and conservation of our natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987,15
specifically in Section 1 thereof which reads:

Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino people, the full
exploration and development as well as the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural
resources, consistent with the necessity of maintaining a sound ecological balance and protecting and
enhancing the quality of the environment and the objective of making the exploration, development and
utilization of such natural resources equitably accessible to the different segments of the present as well as
future generations.
(2) The State shall likewise recognize and apply a true value system that takes into account social and
environmental cost implications relative to the utilization, development and conservation of our natural
resources.

The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and
enhancing the quality of the environment." Section 2 of the same Title, on the other hand, specifically speaks of
the mandate of the DENR; however, it makes particular reference to the fact of the agency's being subject to
law and higher authority. Said section provides:

Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be primarily responsible
for the implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional mandate
to control and supervise the exploration, development, utilization, and conservation of the country's natural
resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases
for policy formulation, and have defined the powers and functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already
paid special attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D.
No. 1151 (Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued.
The former "declared a continuing policy of the State (a) to create, develop, maintain and improve conditions
under which man and nature can thrive in productive and enjoyable harmony with each other, (b) to fulfill the
social, economic and other requirements of present and future generations of Filipinos, and (c) to insure the
attainment of an environmental quality that is conducive to a life of dignity and well-being." 16 As its goal, it
speaks of the "responsibilities of each generation as trustee and guardian of the environment for succeeding
generations." 17 The latter statute, on the other hand, gave flesh to the said policy.

Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear
as the DENR's duty — under its mandate and by virtue of its powers and functions under E.O. No. 192 and the
Administrative Code of 1987 — to protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the
same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was
done with grave abuse of discretion, violated their right to a balanced and healthful ecology; hence, the full
protection thereof requires that no further TLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other; and its essential elements
are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the defendant in
violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a
cause of action, 19 the question submitted to the court for resolution involves the sufficiency of the facts
alleged in the complaint itself. No other matter should be considered; furthermore, the truth of falsity of the said
allegations is beside the point for the truth thereof is deemed hypothetically admitted. The only issue to be
resolved in such a case is: admitting such alleged facts to be true, may the court render a valid judgment in
accordance with the prayer in the complaint? 20 In Militante vs. Edrosolano, 21 this Court laid down the rule
that the judiciary should "exercise the utmost care and circumspection in passing upon a motion to dismiss on
the ground of the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the
facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively nullified. If
that happens, there is a blot on the legal order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the introductory
affirmative allegations, as well as the specific averments under the sub-heading CAUSE OF ACTION, to be
adequate enough to show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus
be granted, wholly or partly, the reliefs prayed for. It bears stressing, however, that insofar as the cancellation
of the TLAs is concerned, there is the need to implead, as party defendants, the grantees thereof for they are
indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or
determination by the executive or legislative branches of Government is not squarely put in issue. What is
principally involved is the enforcement of a right vis-a-vis policies already formulated and expressed in
legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer, the
insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and
legislative actions from judicial inquiry or review. The second paragraph of section 1, Article VIII of the
Constitution states that:

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.

Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:

The first part of the authority represents the traditional concept of judicial power, involving the settlement of
conflicting rights as conferred as law. The second part of the authority represents a broadening of judicial
power to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of the
political departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon
even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid for lack
or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the meaning of
"grave abuse of discretion," which is a very elastic phrase that can expand or contract according to the
disposition of the judiciary.

In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is
that, even if we were to assume that the issue presented before us was political in nature, we would still not be
precluded from revolving it under the expanded jurisdiction conferred upon us that now covers, in proper
cases, even the political question. Article VII, Section 1, of the Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause
found in the Constitution. The court a quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and
desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts" abhored (sic) by the fundamental law. 24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even invoke in his
motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost infidelity to
the Government by providing undue and unwarranted benefits and advantages to the timber license holders
because he would have forever bound the Government to strictly respect the said licenses according to their
terms and conditions regardless of changes in policy and the demands of public interest and welfare. He was
aware that as correctly pointed out by the petitioners, into every timber license must be read Section 20 of the
Forestry Reform Code (P.D. No. 705) which provides:

. . . Provided, That when the national interest so requires, the President may amend, modify, replace or rescind
any contract, concession, permit, licenses or any other form of privilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract,
property or a property right protested by the due process clause of the Constitution. In Tan vs. Director of
Forestry, 25 this Court held:

. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the
due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public
interest or public welfare as in this case.

A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between
the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property
or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that
the granting of license does not create irrevocable rights, neither is it property or property rights (People vs.
Ong Tin, 54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26

. . . Timber licenses, permits and license agreements are the principal instruments by which the State regulates
the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly
be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in
the latter a permanent or irrevocable right to the particular concession area and the forest products therein.
They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests
so require. Thus, they are not deemed contracts within the purview of the due process of law clause [See
Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No.
L-24548, October 27, 1983, 125 SCRA 302].

Since timber licenses are not contracts, the non-impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall be passed. 27

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a
law or even an executive issuance declaring the cancellation or modification of existing timber licenses. Hence,
the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that a law has actually
been passed mandating cancellations or modifications, the same cannot still be stigmatized as a violation of
the non-impairment clause. This is because by its very nature and purpose, such as law could have only been
passed in the exercise of the police power of the state for the purpose of advancing the right of the people to a
balanced and healthful ecology, promoting their health and enhancing the general welfare. In Abe vs. Foster
Wheeler
Corp. 28 this Court stated:

The freedom of contract, under our system of government, is not meant to be absolute. The same is
understood to be subject to reasonable legislative regulation aimed at the promotion of public health, moral,
safety and welfare. In other words, the constitutional guaranty of non-impairment of obligations of contract is
limited by the exercise of the police power of the State, in the interest of public health, safety, moral and
general welfare.

The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life
Insurance Co. vs. Auditor General,30 to wit:

Under our form of government the use of property and the making of contracts are normally matters of private
and not of public concern. The general rule is that both shall be free of governmental interference. But neither
property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally
fundamental with the private right is that of the public to regulate it in the common interest.

In short, the non-impairment clause must yield to the police power of the state. 31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to
the prayer to enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving
new timber licenses for, save in cases of renewal, no contract would have as of yet existed in the other
instances. Moreover, with respect to renewal, the holder is not entitled to it as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order
of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may
therefore amend their complaint to implead as defendants the holders or grantees of the questioned timber
license agreements.

No pronouncement as to costs.

SO ORDERED.