.R. No.

192935               December 7, 2010

LOUIS "BAROK" C. BIRAOGO, Petitioner, 
vs.
THE PHILIPPINE TRUTH COMMISSION OF 2010, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 193036
REP. EDCEL C. LAGMAN, REP. RODOLFO B. ALBANO, JR., REP. SIMEON A. DATUMANONG, and REP. ORLANDO B. FUA,
SR., Petitioners, 
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and DEPARTMENT OF BUDGET AND MANAGEMENT SECRETARY FLORENCIO B.
ABAD, Respondents.
DECISION
MENDOZA, J.:
When the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it
does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by
the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to them.
--- Justice Jose P. Laurel1
The role of the Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of government are
established, limited and defined, and by which these powers are distributed among the several departments.2 The Constitution is
the basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of the
land, must defer.3 Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply
made to sway and accommodate the call of situations and much more tailor itself to the whims and caprices of government and the
people who run it.4
For consideration before the Court are two consolidated cases5 both of which essentially assail the validity and constitutionality of
Executive Order No. 1, dated July 30, 2010, entitled "Creating the Philippine Truth Commission of 2010."
The first case is G.R. No. 192935, a special civil action for prohibition instituted by petitioner Louis Biraogo (Biraogo) in his capacity as
a citizen and taxpayer. Biraogo assails Executive Order No. 1 for being violative of the legislative power of Congress under Section 1,
Article VI of the Constitution6 as it usurps the constitutional authority of the legislature to create a public office and to appropriate
funds therefor.7
The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed by petitioners Edcel C. Lagman, Rodolfo
B. Albano Jr., Simeon A. Datumanong, and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent members of the House of
Representatives.
The genesis of the foregoing cases can be traced to the events prior to the historic May 2010 elections, when then Senator Benigno
Simeon Aquino III declared his staunch condemnation of graft and corruption with his slogan, "Kung walang corrupt, walang
mahirap." The Filipino people, convinced of his sincerity and of his ability to carry out this noble objective, catapulted the good
senator to the presidency.
To transform his campaign slogan into reality, President Aquino found a need for a special body to investigate reported cases of graft
and corruption allegedly committed during the previous administration.
Thus, at the dawn of his administration, the President on July 30, 2010, signed Executive Order No. 1 establishing
the Philippine Truth Commission of 2010 (Truth Commission). Pertinent provisions of said executive order read:
EXECUTIVE ORDER NO. 1
CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010
WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines solemnly enshrines the principle that a public office is a
public trust and mandates that public officers and employees, who are servants of the people, must at all times be accountable to
the latter, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest
lives;
WHEREAS, corruption is among the most despicable acts of defiance of this principle and notorious violation of this mandate;
WHEREAS, corruption is an evil and scourge which seriously affects the political, economic, and social life of a nation; in a very
special way it inflicts untold misfortune and misery on the poor, the marginalized and underprivileged sector of society;
WHEREAS, corruption in the Philippines has reached very alarming levels, and undermined the people’s trust and confidence in the
Government and its institutions;
WHEREAS, there is an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption in
the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter
others from committing the evil, restore the people’s faith and confidence in the Government and in their public servants;
WHEREAS, the President’s battlecry during his campaign for the Presidency in the last elections "kung walang corrupt, walang
mahirap" expresses a solemn pledge that if elected, he would end corruption and the evil it breeds;
WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported
cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and
secure justice for all;
WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise known as the Revised Administrative Code of the
Philippines, gives the President the continuing authority to reorganize the Office of the President.
NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Republic of the Philippines, by virtue of the powers vested in
me by law, do hereby order:
SECTION 1. Creation of a Commission. – There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as
the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption
of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and
employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration; and
thereafter recommend the appropriate action or measure to be taken thereon to ensure that the full measure of justice shall be
served without fear or favor.
The Commission shall be composed of a Chairman and four (4) members who will act as an independent collegial body.
SECTION 2. Powers and Functions. – The Commission, which shall have all the powers of an investigative body under Section 37,
Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported
cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals, accomplices
and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and
recommendations to the President, Congress and the Ombudsman.
In particular, it shall:
a) Identify and determine the reported cases of such graft and corruption which it will investigate;
b) Collect, receive, review and evaluate evidence related to or regarding the cases of large scale corruption which it has chosen to
investigate, and to this end require any agency, official or employee of the Executive Branch, including government-owned or
controlled corporations, to produce documents, books, records and other papers;
c) Upon proper request or representation, obtain information and documents from the Senate and the House of Representatives
records of investigations conducted by committees thereof relating to matters or subjects being investigated by the Commission;
d) Upon proper request and representation, obtain information from the courts, including the Sandiganbayan and the Office of the
Court Administrator, information or documents in respect to corruption cases filed with the Sandiganbayan or the regular courts, as
the case may be;
e) Invite or subpoena witnesses and take their testimonies and for that purpose, administer oaths or affirmations as the case may
be;
f) Recommend, in cases where there is a need to utilize any person as a state witness to ensure that the ends of justice be fully
served, that such person who qualifies as a state witness under the Revised Rules of Court of the Philippines be admitted for that
purpose;
g) Turn over from time to time, for expeditious prosecution, to the appropriate prosecutorial authorities, by means of a special
or interim report and recommendation, all evidence on corruption of public officers and employees and their private sector co-
principals, accomplices or accessories, if any, when in the course of its investigation the Commission finds that there is reasonable
ground to believe that they are liable for graft and corruption under pertinent applicable laws;
h) Call upon any government investigative or prosecutorial agency such as the Department of Justice or any of the agencies under it,
and the Presidential Anti-Graft Commission, for such assistance and cooperation as it may require in the discharge of its functions
and duties;
i) Engage or contract the services of resource persons, professionals and other personnel determined by it as necessary to carry out
its mandate;
j) Promulgate its rules and regulations or rules of procedure it deems necessary to effectively and efficiently carry out the objectives
of this Executive Order and to ensure the orderly conduct of its investigations, proceedings and hearings, including the presentation
of evidence;
k) Exercise such other acts incident to or are appropriate and necessary in connection with the objectives and purposes of this Order.
SECTION 3. Staffing Requirements. – x x x.
SECTION 4. Detail of Employees. – x x x.
SECTION 5. Engagement of Experts. – x x x
SECTION 6. Conduct of Proceedings. – x x x.
SECTION 7. Right to Counsel of Witnesses/Resource Persons. – x x x.
SECTION 8. Protection of Witnesses/Resource Persons. – x x x.
SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. – Any government official or personnel who, without lawful
excuse, fails to appear upon subpoena issued by the Commission or who, appearing before the Commission refuses to take oath or
affirmation, give testimony or produce documents for inspection, when required, shall be subject to administrative disciplinary
action. Any private person who does the same may be dealt with in accordance with law.
SECTION 10. Duty to Extend Assistance to the Commission. – x x x.
SECTION 11. Budget for the Commission. – The Office of the President shall provide the necessary funds for the Commission to
ensure that it can exercise its powers, execute its functions, and perform its duties and responsibilities as effectively, efficiently, and
expeditiously as possible.
SECTION 12. Office. – x x x.
SECTION 13. Furniture/Equipment. – x x x.
SECTION 14. Term of the Commission. – The Commission shall accomplish its mission on or before December 31, 2012.
SECTION 15. Publication of Final Report. – x x x.
SECTION 16. Transfer of Records and Facilities of the Commission. – x x x.
SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the
mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption
during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order.
SECTION 18. Separability Clause. If any provision of this Order is declared unconstitutional, the same shall not affect the validity and
effectivity of the other provisions hereof.
SECTION 19. Effectivity. – This Executive Order shall take effect immediately.
DONE in the City of Manila, Philippines, this 30th day of July 2010.
(SGD.) BENIGNO S. AQUINO III
By the President:
(SGD.) PAQUITO N. OCHOA, JR.
Executive Secretary
Nature of the Truth Commission
As can be gleaned from the above-quoted provisions, the Philippine Truth Commission (PTC) is a mere ad hoc body formed under
the Office of the President with the primary task to investigate reports of graft and corruption committed by third-level public
officers and employees, their co-principals, accomplices and accessories during the previous administration, and thereafter to
submit its finding and recommendations to the President, Congress and the Ombudsman. Though it has been described as an
"independent collegial body," it is essentially an entity within the Office of the President Proper and subject to his control. Doubtless,
it constitutes a public office, as an ad hoc body is one.8
To accomplish its task, the PTC shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the
Administrative Code of 1987. It is not, however, a quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render
awards in disputes between contending parties. All it can do is gather, collect and assess evidence of graft and corruption and make
recommendations. It may have subpoena powers but it has no power to cite people in contempt, much less order their arrest.
Although it is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing of an
information in our courts of law. Needless to state, it cannot impose criminal, civil or administrative penalties or sanctions.
The PTC is different from the truth commissions in other countries which have been created as official, transitory and non-judicial
fact-finding bodies "to establish the facts and context of serious violations of human rights or of international humanitarian law in a
country’s past."9 They are usually established by states emerging from periods of internal unrest, civil strife or authoritarianism to
serve as mechanisms for transitional justice.
Truth commissions have been described as bodies that share the following characteristics: (1) they examine only past events; (2)
they investigate patterns of abuse committed over a period of time, as opposed to a particular event; (3) they are temporary bodies
that finish their work with the submission of a report containing conclusions and recommendations; and (4) they are officially
sanctioned, authorized or empowered by the State.10 "Commission’s members are usually empowered to conduct research,
support victims, and propose policy recommendations to prevent recurrence of crimes. Through their investigations, the
commissions may aim to discover and learn more about past abuses, or formally acknowledge them. They may aim to prepare the
way for prosecutions and recommend institutional reforms."11
Thus, their main goals range from retribution to reconciliation. The Nuremburg and Tokyo war crime tribunals are examples of a
retributory or vindicatory body set up to try and punish those responsible for crimes against humanity. A form of a reconciliatory
tribunal is the Truth and Reconciliation Commission of South Africa, the principal function of which was to heal the wounds of past
violence and to prevent future conflict by providing a cathartic experience for victims.
The PTC is a far cry from South Africa’s model. The latter placed more emphasis on reconciliation than on judicial retribution, while
the marching order of the PTC is the identification and punishment of perpetrators. As one writer12puts it:
The order ruled out reconciliation. It translated the Draconian code spelled out by Aquino in his inaugural speech: "To those who talk
about reconciliation, if they mean that they would like us to simply forget about the wrongs that they have committed in the past,
we have this to say: There can be no reconciliation without justice. When we allow crimes to go unpunished, we give consent to
their occurring over and over again."
The Thrusts of the Petitions
Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court to declare it unconstitutional and to
enjoin the PTC from performing its functions. A perusal of the arguments of the petitioners in both cases shows that they are
essentially the same. The petitioners-legislators summarized them in the following manner:
(a) E.O. No. 1 violates the separation of powers as it arrogates the power of the Congress to create a public office and appropriate
funds for its operation.
(b) The provision of Book III, Chapter 10, Section 31 of the Administrative Code of 1987 cannot legitimize E.O. No. 1 because the
delegated authority of the President to structurally reorganize the Office of the President to achieve economy, simplicity and
efficiency does not include the power to create an entirely new public office which was hitherto inexistent like the "Truth
Commission."
(c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it vested the "Truth Commission" with quasi-judicial
powers duplicating, if not superseding, those of the Office of the Ombudsman created under the 1987 Constitution and the
Department of Justice created under the Administrative Code of 1987.
(d) E.O. No. 1 violates the equal protection clause as it selectively targets for investigation and prosecution officials and personnel of
the previous administration as if corruption is their peculiar species even as it excludes those of the other administrations, past and
present, who may be indictable.
(e) The creation of the "Philippine Truth Commission of 2010" violates the consistent and general international practice of four
decades wherein States constitute truth commissions to exclusively investigate human rights violations, which customary practice
forms part of the generally accepted principles of international law which the Philippines is mandated to adhere to pursuant to the
Declaration of Principles enshrined in the Constitution.
(f) The creation of the "Truth Commission" is an exercise in futility, an adventure in partisan hostility, a launching pad for
trial/conviction by publicity and a mere populist propaganda to mistakenly impress the people that widespread poverty will
altogether vanish if corruption is eliminated without even addressing the other major causes of poverty.
(g) The mere fact that previous commissions were not constitutionally challenged is of no moment because neither laches nor
estoppel can bar an eventual question on the constitutionality and validity of an executive issuance or even a statute."13
In their Consolidated Comment,14 the respondents, through the Office of the Solicitor General (OSG), essentially questioned the
legal standing of petitioners and defended the assailed executive order with the following arguments:
1] E.O. No. 1 does not arrogate the powers of Congress to create a public office because the President’s executive power and power
of control necessarily include the inherent power to conduct investigations to ensure that laws are faithfully executed and that, in
any event, the Constitution, Revised Administrative Code of 1987 (E.O. No. 292), 15 Presidential Decree (P.D.) No. 141616 (as
amended by P.D. No. 1772), R.A. No. 9970,17 and settled jurisprudence that authorize the President to create or form such bodies.
2] E.O. No. 1 does not usurp the power of Congress to appropriate funds because there is no appropriation but a mere allocation of
funds already appropriated by Congress.
3] The Truth Commission does not duplicate or supersede the functions of the Office of the Ombudsman (Ombudsman) and the
Department of Justice (DOJ), because it is a fact-finding body and not a quasi-judicial body and its functions do not duplicate,
supplant or erode the latter’s jurisdiction.
4] The Truth Commission does not violate the equal protection clause because it was validly created for laudable purposes.
The OSG then points to the continued existence and validity of other executive orders and presidential issuances creating similar
bodies to justify the creation of the PTC such as Presidential Complaint and Action Commission (PCAC) by President Ramon B.
Magsaysay, Presidential Committee on Administrative Performance Efficiency (PCAPE) by President Carlos P. Garcia and Presidential
Agency on Reform and Government Operations (PARGO)by President Ferdinand E. Marcos.18
From the petitions, pleadings, transcripts, and memoranda, the following are the principal issues to be resolved:
1. Whether or not the petitioners have the legal standing to file their respective petitions and question Executive Order No. 1;
2. Whether or not Executive Order No. 1 violates the principle of separation of powers by usurping the powers of Congress to create
and to appropriate funds for public offices, agencies and commissions;
3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman and the DOJ;
4. Whether or not Executive Order No. 1 violates the equal protection clause; and
5. Whether or not petitioners are entitled to injunctive relief.
Essential requisites for judicial review
Before proceeding to resolve the issue of the constitutionality of Executive Order No. 1, the Court needs to ascertain whether the
requisites for a valid exercise of its power of judicial review are present.
Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must be
an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to
question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case
such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be
raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.19
Among all these limitations, only the legal standing of the petitioners has been put at issue.
Legal Standing of the Petitioners
The OSG attacks the legal personality of the petitioners-legislators to file their petition for failure to demonstrate their personal
stake in the outcome of the case. It argues that the petitioners have not shown that they have sustained or are in danger of
sustaining any personal injury attributable to the creation of the PTC. Not claiming to be the subject of the commission’s
investigations, petitioners will not sustain injury in its creation or as a result of its proceedings.20
The Court disagrees with the OSG in questioning the legal standing of the petitioners-legislators to assail Executive Order No. 1.
Evidently, their petition primarily invokes usurpation of the power of the Congress as a body to which they belong as members. This
certainly justifies their resolve to take the cudgels for Congress as an institution and present the complaints on the usurpation of
their power and rights as members of the legislature before the Court. As held in Philippine Constitution Association v. Enriquez,21
To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to
participate in the exercise of the powers of that institution.
An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be
questioned by a member of Congress. In such a case, any member of Congress can have a resort to the courts.
Indeed, legislators have a legal standing to see to it that the prerogative, powers and privileges vested by the Constitution in their
office remain inviolate. Thus, they are allowed to question the validity of any official action which, to their mind, infringes on their
prerogatives as legislators.22
With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing to question the creation of the PTC and the budget
for its operations.23 It emphasizes that the funds to be used for the creation and operation of the commission are to be taken from
those funds already appropriated by Congress. Thus, the allocation and disbursement of funds for the commission will not entail
congressional action but will simply be an exercise of the President’s power over contingent funds.
As correctly pointed out by the OSG, Biraogo has not shown that he sustained, or is in danger of sustaining, any personal and direct
injury attributable to the implementation of Executive Order No. 1. Nowhere in his petition is an assertion of a clear right that may
justify his clamor for the Court to exercise judicial power and to wield the axe over presidential issuances in defense of the
Constitution. The case of David v. Arroyo24 explained the deep-seated rules on locus standi. Thus:
Locus standi is defined as "a right of appearance in a court of justice on a given question." In private suits, standing is governed by
the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that
"every action must be prosecuted or defended in the name of the real party in interest." Accordingly, the "real-party-in interest" is
"the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit." Succinctly
put, the plaintiff’s standing is based on his own right to the relief sought.
The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an allegedly
illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any
other person. He could be suing as a "stranger," or in the category of a "citizen," or ‘taxpayer." In either case, he has to adequately
show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the
public order and the securing of relief as a "citizen" or "taxpayer.
Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public actions. The distinction was first laid down
in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayer’s suit is in a different category from the plaintiff in a citizen’s
suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere instrument of
the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins: "In matter of mere public right,
however…the people are the real parties…It is at least the right, if not the duty, of every citizen to interfere and see that a public
offence be properly pursued and punished, and that a public grievance be remedied." With respect to taxpayer’s suits, Terr v.
Jordan held that "the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to
his injury cannot be denied."
However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed
with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid down
the more stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that for a
private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show that he
has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of
the public.
This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity of a
statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result."
The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila Race Horse Trainers’
Association v. De la Fuente, Pascual v. Secretary of Public Works and Anti-Chinese League of the Philippines v. Felix. [Emphases
included. Citations omitted]
Notwithstanding, the Court leans on the doctrine that "the rule on standing is a matter of procedure, hence, can be relaxed for
nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so requires, such as when the
matter is of transcendental importance, of overreaching significance to society, or of paramount public interest."25
Thus, in Coconut Oil Refiners Association, Inc. v. Torres,26 the Court held that in cases of paramount importance where serious
constitutional questions are involved, the standing requirements may be relaxed and a suit may be allowed to prosper even where
there is no direct injury to the party claiming the right of judicial review. In the first Emergency Powers Cases,27 ordinary citizens
and taxpayers were allowed to question the constitutionality of several executive orders although they had only an indirect and
general interest shared in common with the public.
The OSG claims that the determinants of transcendental importance28 laid down in CREBA v. ERC and Meralco29are non-existent in
this case. The Court, however, finds reason in Biraogo’s assertion that the petition covers matters of transcendental importance to
justify the exercise of jurisdiction by the Court. There are constitutional issues in the petition which deserve the attention of this
Court in view of their seriousness, novelty and weight as precedents. Where the issues are of transcendental and paramount
importance not only to the public but also to the Bench and the Bar, they should be resolved for the guidance of all.30 Undoubtedly,
the Filipino people are more than interested to know the status of the President’s first effort to bring about a promised change to
the country. The Court takes cognizance of the petition not due to overwhelming political undertones that clothe the issue in the
eyes of the public, but because the Court stands firm in its oath to perform its constitutional duty to settle legal controversies with
overreaching significance to society.
Power of the President to Create the Truth Commission
In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a public office and not merely an adjunct body
of the Office of the President.31 Thus, in order that the President may create a public office he must be empowered by the
Constitution, a statute or an authorization vested in him by law. According to petitioner, such power cannot be presumed32 since
there is no provision in the Constitution or any specific law that authorizes the President to create a truth commission.33 He adds
that Section 31 of the Administrative Code of 1987, granting the President the continuing authority to reorganize his office, cannot
serve as basis for the creation of a truth commission considering the aforesaid provision merely uses verbs such as "reorganize,"
"transfer," "consolidate," "merge," and "abolish."34 Insofar as it vests in the President the plenary power to reorganize the Office of
the President to the extent of creating a public office, Section 31 is inconsistent with the principle of separation of powers enshrined
in the Constitution and must be deemed repealed upon the effectivity thereof.35
Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation of a public office lies within the province of Congress and
not with the executive branch of government. They maintain that the delegated authority of the President to reorganize under
Section 31 of the Revised Administrative Code: 1) does not permit the President to create a public office, much less a truth
commission; 2) is limited to the reorganization of the administrative structure of the Office of the President; 3) is limited to the
restructuring of the internal organs of the Office of the President Proper, transfer of functions and transfer of agencies; and 4) only
to achieve simplicity, economy and efficiency.36Such continuing authority of the President to reorganize his office is limited, and by
issuing Executive Order No. 1, the President overstepped the limits of this delegated authority.
The OSG counters that there is nothing exclusively legislative about the creation by the President of a fact-finding body such as a
truth commission. Pointing to numerous offices created by past presidents, it argues that the authority of the President to create
public offices within the Office of the President Proper has long been recognized.37 According to the OSG, the Executive, just like the
other two branches of government, possesses the inherent authority to create fact-finding committees to assist it in the
performance of its constitutionally mandated functions and in the exercise of its administrative functions.38 This power, as the OSG
explains it, is but an adjunct of the plenary powers wielded by the President under Section 1 and his power of control under Section
17, both of Article VII of the Constitution.39
It contends that the President is necessarily vested with the power to conduct fact-finding investigations, pursuant to his duty to
ensure that all laws are enforced by public officials and employees of his department and in the exercise of his authority to assume
directly the functions of the executive department, bureau and office, or interfere with the discretion of his officials.40 The power of
the President to investigate is not limited to the exercise of his power of control over his subordinates in the executive branch, but
extends further in the exercise of his other powers, such as his power to discipline subordinates,41 his power for rule making,
adjudication and licensing purposes42 and in order to be informed on matters which he is entitled to know.43
The OSG also cites the recent case of Banda v. Ermita,44 where it was held that the President has the power to reorganize the offices
and agencies in the executive department in line with his constitutionally granted power of control and by virtue of a valid
delegation of the legislative power to reorganize executive offices under existing statutes.
Thus, the OSG concludes that the power of control necessarily includes the power to create offices. For the OSG, the President may
create the PTC in order to, among others, put a closure to the reported large scale graft and corruption in the government.45
The question, therefore, before the Court is this: Does the creation of the PTC fall within the ambit of the power to reorganize as
expressed in Section 31 of the Revised Administrative Code? Section 31 contemplates "reorganization" as limited by the following
functional and structural lines: (1) restructuring the internal organization of the Office of the President Proper by abolishing,
consolidating or merging units thereof or transferring functions from one unit to another; (2) transferring any function under the
Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency under the Office of the
President to any other Department/Agency or vice versa. Clearly, the provision refers to reduction of personnel, consolidation of
offices, or abolition thereof by reason of economy or redundancy of functions. These point to situations where a body or an office is
already existent but a modification or alteration thereof has to be effected. The creation of an office is nowhere mentioned, much
less envisioned in said provision. Accordingly, the answer to the question is in the negative.
To say that the PTC is borne out of a restructuring of the Office of the President under Section 31 is a misplaced supposition, even in
the plainest meaning attributable to the term "restructure"– an "alteration of an existing structure." Evidently, the PTC was not part
of the structure of the Office of the President prior to the enactment of Executive Order No. 1. As held in Buklod ng Kawaning EIIB v.
Hon. Executive Secretary,46
But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does
not have to end here. We must not lose sight of the very source of the power – that which constitutes an express grant of power.
Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), "the President, subject
to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to
reorganize the administrative structure of the Office of the President." For this purpose, he may transfer the functions of other
Departments or Agencies to the Office of the President. In Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that
reorganization "involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or
redundancy of functions." It takes place when there is an alteration of the existing structure of government offices or units therein,
including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of
Finance. It falls under the Office of the President. Hence, it is subject to the President’s continuing authority to reorganize. [Emphasis
Supplied]
In the same vein, the creation of the PTC is not justified by the President’s power of control. Control is essentially the power to alter
or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment
of the former with that of the latter.47 Clearly, the power of control is entirely different from the power to create public offices. The
former is inherent in the Executive, while the latter finds basis from either a valid delegation from Congress, or his inherent duty to
faithfully execute the laws.
The question is this, is there a valid delegation of power from Congress, empowering the President to create a public office?
According to the OSG, the power to create a truth commission pursuant to the above provision finds statutory basis under P.D. 1416,
as amended by P.D. No. 1772.48 The said law granted the President the continuing authority to reorganize the national government,
including the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify
functions, services and activities, transfer appropriations, and to standardize salaries and materials. This decree, in relation to
Section 20, Title I, Book III of E.O. 292 has been invoked in several cases such as Larin v. Executive Secretary.49
The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to create a public office. Said decree is
already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority to reorganize
the administrative structure of the national government including the power to create offices and transfer appropriations pursuant
to one of the purposes of the decree, embodied in its last "Whereas" clause:
WHEREAS, the transition towards the parliamentary form of government will necessitate flexibility in the organization of the
national government.
Clearly, as it was only for the purpose of providing manageability and resiliency during the interim, P.D. No. 1416, as amended by
P.D. No. 1772, became functus oficio upon the convening of the First Congress, as expressly provided in Section 6, Article XVIII of the
1987 Constitution. In fact, even the Solicitor General agrees with this view. Thus:
ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted was the last whereas clause of P.D. 1416 says "it was enacted to
prepare the transition from presidential to parliamentary. Now, in a parliamentary form of government, the legislative and executive
powers are fused, correct?
SOLICITOR GENERAL CADIZ: Yes, Your Honor.
ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was issued. Now would you agree with me that P.D. 1416 should not be
considered effective anymore upon the promulgation, adoption, ratification of the 1987 Constitution.
SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416, Your Honor.
ASSOCIATE JUSTICE CARPIO: The power of the President to reorganize the entire National Government is deemed repealed, at least,
upon the adoption of the 1987 Constitution, correct.
SOLICITOR GENERAL CADIZ: Yes, Your Honor.50
While the power to create a truth commission cannot pass muster on the basis of P.D. No. 1416 as amended by P.D. No. 1772, the
creation of the PTC finds justification under Section 17, Article VII of the Constitution, imposing upon the President the duty to
ensure that the laws are faithfully executed. Section 17 reads:
Section 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the laws be
faithfully executed. (Emphasis supplied).
As correctly pointed out by the respondents, the allocation of power in the three principal branches of government is a grant of all
powers inherent in them. The President’s power to conduct investigations to aid him in ensuring the faithful execution of laws – in
this case, fundamental laws on public accountability and transparency – is inherent in the President’s powers as the Chief Executive.
That the authority of the President to conduct investigations and to create bodies to execute this power is not explicitly mentioned
in the Constitution or in statutes does not mean that he is bereft of such authority.51 As explained in the landmark case of Marcos v.
Manglapus:52
x x x. The 1987 Constitution, however, brought back the presidential system of government and restored the separation of
legislative, executive and judicial powers by their actual distribution among three distinct branches of government with provision for
checks and balances.
It would not be accurate, however, to state that "executive power" is the power to enforce the laws, for the President is head of
state as well as head of government and whatever powers inhere in such positions pertain to the office unless the Constitution itself
withholds it. Furthermore, the Constitution itself provides that the execution of the laws is only one of the powers of the President.
It also grants the President other powers that do not involve the execution of any provision of law, e.g., his power over the country's
foreign relations.
On these premises, we hold the view that although the 1987 Constitution imposes limitations on the exercise of specific powers of
the President, it maintains intact what is traditionally considered as within the scope of "executive power." Corollarily, the powers of
the President cannot be said to be limited only to the specific powers enumerated in the Constitution. In other words, executive
power is more than the sum of specific powers so enumerated.
It has been advanced that whatever power inherent in the government that is neither legislative nor judicial has to be executive. x x
x.
Indeed, the Executive is given much leeway in ensuring that our laws are faithfully executed. As stated above, the powers of the
President are not limited to those specific powers under the Constitution.53 One of the recognized powers of the President granted
pursuant to this constitutionally-mandated duty is the power to create ad hoc committees. This flows from the obvious need to
ascertain facts and determine if laws have been faithfully executed. Thus, in Department of Health v. Camposano,54 the authority of
the President to issue Administrative Order No. 298, creating an investigative committee to look into the administrative charges filed
against the employees of the Department of Health for the anomalous purchase of medicines was upheld. In said case, it was ruled:
The Chief Executive’s power to create the Ad hoc Investigating Committee cannot be doubted. Having been constitutionally granted
full control of the Executive Department, to which respondents belong, the President has the obligation to ensure that all executive
officials and employees faithfully comply with the law. With AO 298 as mandate, the legality of the investigation is sustained. Such
validity is not affected by the fact that the investigating team and the PCAGC had the same composition, or that the former used the
offices and facilities of the latter in conducting the inquiry. [Emphasis supplied]
It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to allow an inquiry into matters which the
President is entitled to know so that he can be properly advised and guided in the performance of his duties relative to the execution
and enforcement of the laws of the land. And if history is to be revisited, this was also the objective of the investigative bodies
created in the past like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo Commission and the Zenarosa Commission.
There being no changes in the government structure, the Court is not inclined to declare such executive power as non-existent just
because the direction of the political winds have changed.
On the charge that Executive Order No. 1 transgresses the power of Congress to appropriate funds for the operation of a public
office, suffice it to say that there will be no appropriation but only an allotment or allocations of existing funds already appropriated.
Accordingly, there is no usurpation on the part of the Executive of the power of Congress to appropriate funds. Further, there is no
need to specify the amount to be earmarked for the operation of the commission because, in the words of the Solicitor General,
"whatever funds the Congress has provided for the Office of the President will be the very source of the funds for the
commission."55 Moreover, since the amount that would be allocated to the PTC shall be subject to existing auditing rules and
regulations, there is no impropriety in the funding.
Power of the Truth Commission to Investigate
The President’s power to conduct investigations to ensure that laws are faithfully executed is well recognized. It flows from the
faithful-execution clause of the Constitution under Article VII, Section 17 thereof.56 As the Chief Executive, the president represents
the government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has the
authority to directly assume the functions of the executive department.57
Invoking this authority, the President constituted the PTC to primarily investigate reports of graft and corruption and to recommend
the appropriate action. As previously stated, no quasi-judicial powers have been vested in the said body as it cannot adjudicate
rights of persons who come before it. It has been said that "Quasi-judicial powers involve the power to hear and determine
questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by law itself in
enforcing and administering the same law."58 In simpler terms, judicial discretion is involved in the exercise of these quasi-judicial
power, such that it is exclusively vested in the judiciary and must be clearly authorized by the legislature in the case of administrative
agencies.
The distinction between the power to investigate and the power to adjudicate was delineated by the Court in Cariño v. Commission
on Human Rights.59 Thus:
"Investigate," commonly understood, means to examine, explore, inquire or delve or probe into, research on, study. The dictionary
definition of "investigate" is "to observe or study closely: inquire into systematically: "to search or inquire into: x x to subject to an
official probe x x: to conduct an official inquiry." The purpose of investigation, of course, is to discover, to find out, to learn, obtain
information. Nowhere included or intimated is the notion of settling, deciding or resolving a controversy involved in the facts
inquired into by application of the law to the facts established by the inquiry.
The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or observation. To trace or
track; to search into; to examine and inquire into with care and accuracy; to find out by careful inquisition; examination; the taking
of evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in turn described as "(a)n administrative
function, the exercise of which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry, judicial or otherwise,
for the discovery and collection of facts concerning a certain matter or matters."
"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine, resolve, rule on, settle. The
dictionary defines the term as "to settle finally (the rights and duties of the parties to a court case) on the merits of issues raised: x x
to pass judgment on: settle judicially: x x act as judge." And "adjudge" means "to decide or rule upon as a judge or with judicial or
quasi-judicial powers: x x to award or grant judicially in a case of controversy x x."
In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally. Synonymous
with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or decree, or to sentence or
condemn. x x. Implies a judicial determination of a fact, and the entry of a judgment." [Italics included. Citations Omitted]
Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency or
office. The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function. To be
considered as such, the act of receiving evidence and arriving at factual conclusions in a controversy must be accompanied by the
authority of applying the law to the factual conclusions to the end that the controversy may be decided or resolved authoritatively,
finally and definitively, subject to appeals or modes of review as may be provided by law.60 Even respondents themselves admit that
the commission is bereft of any quasi-judicial power.61
Contrary to petitioners’ apprehension, the PTC will not supplant the Ombudsman or the DOJ or erode their respective powers. If at
all, the investigative function of the commission will complement those of the two offices. As pointed out by the Solicitor General,
the recommendation to prosecute is but a consequence of the overall task of the commission to conduct a fact-finding
investigation."62 The actual prosecution of suspected offenders, much less adjudication on the merits of the charges against
them,63 is certainly not a function given to the commission. The phrase, "when in the course of its investigation," under Section 2(g),
highlights this fact and gives credence to a contrary interpretation from that of the petitioners. The function of determining probable
cause for the filing of the appropriate complaints before the courts remains to be with the DOJ and the Ombudsman.64
At any rate, the Ombudsman’s power to investigate under R.A. No. 6770 is not exclusive but is shared with other similarly authorized
government agencies. Thus, in the case of Ombudsman v. Galicia,65 it was written:
This power of investigation granted to the Ombudsman by the 1987 Constitution and The Ombudsman Act is not exclusive but is
shared with other similarly authorized government agencies such as the PCGG and judges of municipal trial courts and municipal
circuit trial courts. The power to conduct preliminary investigation on charges against public employees and officials is likewise
concurrently shared with the Department of Justice. Despite the passage of the Local Government Code in 1991, the Ombudsman
retains concurrent jurisdiction with the Office of the President and the local Sanggunians to investigate complaints against local
elective officials. [Emphasis supplied].
Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to investigate criminal cases under Section 15 (1) of
R.A. No. 6770, which states:
(1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office
or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of its primary jurisdiction, it may take over, at any stage, from any
investigatory agency of government, the investigation of such cases. [Emphases supplied]
The act of investigation by the Ombudsman as enunciated above contemplates the conduct of a preliminary investigation or the
determination of the existence of probable cause. This is categorically out of the PTC’s sphere of functions. Its power to investigate is
limited to obtaining facts so that it can advise and guide the President in the performance of his duties relative to the execution and
enforcement of the laws of the land. In this regard, the PTC commits no act of usurpation of the Ombudsman’s primordial duties.
The same holds true with respect to the DOJ. Its authority under Section 3 (2), Chapter 1, Title III, Book IV in the Revised
Administrative Code is by no means exclusive and, thus, can be shared with a body likewise tasked to investigate the commission of
crimes.
Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the PTC are to be accorded conclusiveness. Much like
its predecessors, the Davide Commission, the Feliciano Commission and the Zenarosa Commission, its findings would, at best, be
recommendatory in nature. And being so, the Ombudsman and the DOJ have a wider degree of latitude to decide whether or not to
reject the recommendation. These offices, therefore, are not deprived of their mandated duties but will instead be aided by the
reports of the PTC for possible indictments for violations of graft laws.
Violation of the Equal Protection Clause
Although the purpose of the Truth Commission falls within the investigative power of the President, the Court finds difficulty in
upholding the constitutionality of Executive Order No. 1 in view of its apparent transgression of the equal protection clause
enshrined in Section 1, Article III (Bill of Rights) of the 1987 Constitution. Section 1 reads:
Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the
equal protection of the laws.
The petitioners assail Executive Order No. 1 because it is violative of this constitutional safeguard. They contend that it does not
apply equally to all members of the same class such that the intent of singling out the "previous administration" as its sole object
makes the PTC an "adventure in partisan hostility."66 Thus, in order to be accorded with validity, the commission must also cover
reports of graft and corruption in virtually all administrations previous to that of former President Arroyo.67
The petitioners argue that the search for truth behind the reported cases of graft and corruption must encompass acts committed
not only during the administration of former President Arroyo but also during prior administrations where the "same magnitude of
controversies and anomalies"68 were reported to have been committed against the Filipino people. They assail the classification
formulated by the respondents as it does not fall under the recognized exceptions because first, "there is no substantial distinction
between the group of officials targeted for investigation by Executive Order No. 1 and other groups or persons who abused their
public office for personal gain; and second, the selective classification is not germane to the purpose of Executive Order No. 1 to end
corruption."69 In order to attain constitutional permission, the petitioners advocate that the commission should deal with "graft and
grafters prior and subsequent to the Arroyo administration with the strong arm of the law with equal force."70
Position of respondents
According to respondents, while Executive Order No. 1 identifies the "previous administration" as the initial subject of the
investigation, following Section 17 thereof, the PTC will not confine itself to cases of large scale graft and corruption solely during the
said administration.71 Assuming arguendo that the commission would confine its proceedings to officials of the previous
administration, the petitioners argue that no offense is committed against the equal protection clause for "the segregation of the
transactions of public officers during the previous administration as possible subjects of investigation is a valid classification based on
substantial distinctions and is germane to the evils which the Executive Order seeks to correct."72 To distinguish the Arroyo
administration from past administrations, it recited the following:
First. E.O. No. 1 was issued in view of widespread reports of large scale graft and corruption in the previous administration which
have eroded public confidence in public institutions. There is, therefore, an urgent call for the determination of the truth regarding
certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate
cases against those involved, if warranted, and to deter others from committing the evil, restore the people’s faith and confidence in
the Government and in their public servants.
Second. The segregation of the preceding administration as the object of fact-finding is warranted by the reality that unlike with
administrations long gone, the current administration will most likely bear the immediate consequence of the policies of the
previous administration.
Third. The classification of the previous administration as a separate class for investigation lies in the reality that the evidence of
possible criminal activity, the evidence that could lead to recovery of public monies illegally dissipated, the policy lessons to be
learned to ensure that anti-corruption laws are faithfully executed, are more easily established in the regime that immediately
precede the current administration.
Fourth. Many administrations subject the transactions of their predecessors to investigations to provide closure to issues that are
pivotal to national life or even as a routine measure of due diligence and good housekeeping by a nascent administration like the
Presidential Commission on Good Government (PCGG), created by the late President Corazon C. Aquino under Executive Order No. 1
to pursue the recovery of ill-gotten wealth of her predecessor former President Ferdinand Marcos and his cronies, and the Saguisag
Commission created by former President Joseph Estrada under Administrative Order No, 53, to form an ad-hoc and independent
citizens’ committee to investigate all the facts and circumstances surrounding "Philippine Centennial projects" of his predecessor,
former President Fidel V. Ramos.73 [Emphases supplied]
Concept of the Equal Protection Clause
One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section 1,
Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair
discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide for a
more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be
challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or
prejudice, the sharper weapon to cut it down is the equal protection clause.74
"According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated
alike, both as to rights conferred and responsibilities imposed."75 It "requires public bodies and institutions to treat similarly
situated individuals in a similar manner."76 "The purpose of the equal protection clause is to secure every person within a state’s
jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statue or by its improper
execution through the state’s duly constituted authorities."77 "In other words, the concept of equal justice under the law requires
the state to govern impartially, and it may not draw distinctions between individuals solely on differences that are irrelevant to a
legitimate governmental objective."78
The equal protection clause is aimed at all official state actions, not just those of the legislature.79 Its inhibitions cover all the
departments of the government including the political and executive departments, and extend to all actions of a state denying equal
protection of the laws, through whatever agency or whatever guise is taken. 80
It, however, does not require the universal application of the laws to all persons or things without distinction. What it simply
requires is equality among equals as determined according to a valid classification. Indeed, the equal protection clause permits
classification. Such classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1) The
classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to existing conditions
only; and
(4) It applies equally to all members of the same class.81 "Superficial differences do not make for a valid classification."82
For a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to the
class.83 "The classification will be regarded as invalid if all the members of the class are not similarly treated, both as to rights
conferred and obligations imposed. It is not necessary that the classification be made with absolute symmetry, in the sense that the
members of the class should possess the same characteristics in equal degree. Substantial similarity will suffice; and as long as this is
achieved, all those covered by the classification are to be treated equally. The mere fact that an individual belonging to a class differs
from the other members, as long as that class is substantially distinguishable from all others, does not justify the non-application of
the law to him."84
The classification must not be based on existing circumstances only, or so constituted as to preclude addition to the number
included in the class. It must be of such a nature as to embrace all those who may thereafter be in similar circumstances and
conditions. It must not leave out or "underinclude" those that should otherwise fall into a certain classification. As elucidated in
Victoriano v. Elizalde Rope Workers' Union85 and reiterated in a long line of cases,86
The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state.
It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and
child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons
merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The
Constitution does not require that things which are different in fact be treated in law as though they were the same. The equal
protection clause does not forbid discrimination as to things that are different. It does not prohibit legislation which is limited either
in the object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of
knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars.
A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying
that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of a valid classification is
that it be reasonable, which means that the classification should be based on substantial distinctions which make for real
differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it
must apply equally to each member of the class. This Court has held that the standard is satisfied if the classification or distinction is
based on a reasonable foundation or rational basis and is not palpably arbitrary. [Citations omitted]
Applying these precepts to this case, Executive Order No. 1 should be struck down as violative of the equal protection clause. The
clear mandate of the envisioned truth commission is to investigate and find out the truth "concerning the reported cases of graft
and corruption during the previous administration"87 only. The intent to single out the previous administration is plain, patent and
manifest. Mention of it has been made in at least three portions of the questioned executive order. Specifically, these are:
WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported
cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and
secure justice for all;
SECTION 1. Creation of a Commission. – There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as
the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption
of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and
employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration; and
thereafter recommend the appropriate action or measure to be taken thereon to ensure that the full measure of justice shall be
served without fear or favor.
SECTION 2. Powers and Functions. – The Commission, which shall have all the powers of an investigative body under Section 37,
Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported
cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals, accomplices
and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and
recommendations to the President, Congress and the Ombudsman. [Emphases supplied]
In this regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that is, a class of past
administrations. It is not a class of its own. Not to include past administrations similarly situated constitutes arbitrariness which the
equal protection clause cannot sanction. Such discriminating differentiation clearly reverberates to label the commission as a vehicle
for vindictiveness and selective retribution.
Though the OSG enumerates several differences between the Arroyo administration and other past administrations, these
distinctions are not substantial enough to merit the restriction of the investigation to the "previous administration" only. The reports
of widespread corruption in the Arroyo administration cannot be taken as basis for distinguishing said administration from earlier
administrations which were also blemished by similar widespread reports of impropriety. They are not inherent in, and do not inure
solely to, the Arroyo administration. As Justice Isagani Cruz put it, "Superficial differences do not make for a valid classification."88
The public needs to be enlightened why Executive Order No. 1 chooses to limit the scope of the intended investigation to the
previous administration only. The OSG ventures to opine that "to include other past administrations, at this point, may unnecessarily
overburden the commission and lead it to lose its effectiveness."89The reason given is specious. It is without doubt irrelevant to the
legitimate and noble objective of the PTC to stamp out or "end corruption and the evil it breeds."90
The probability that there would be difficulty in unearthing evidence or that the earlier reports involving the earlier administrations
were already inquired into is beside the point. Obviously, deceased presidents and cases which have already prescribed can no
longer be the subjects of inquiry by the PTC. Neither is the PTC expected to conduct simultaneous investigations of previous
administrations, given the body’s limited time and resources. "The law does not require the impossible" (Lex non cogit ad
impossibilia).91
Given the foregoing physical and legal impossibility, the Court logically recognizes the unfeasibility of investigating almost a century’s
worth of graft cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary classification. The PTC, to be true to
its mandate of searching for the truth, must not exclude the other past administrations. The PTC must, at least, have the authority to
investigate all past administrations. While reasonable prioritization is permitted, it should not be arbitrary lest it be struck down for
being unconstitutional. In the often quoted language of Yick Wo v. Hopkins,92
Though the law itself be fair on its face and impartial in appearance, yet, if applied and administered by public authority with an evil
eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances,
material to their rights, the denial of equal justice is still within the prohibition of the constitution. [Emphasis supplied]
It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The Court, however, is of the considered view
that although its focus is restricted, the constitutional guarantee of equal protection under the laws should not in any way be
circumvented. The Constitution is the fundamental and paramount law of the nation to which all other laws must conform and in
accordance with which all private rights determined and all public authority administered.93 Laws that do not conform to the
Constitution should be stricken down for being unconstitutional.94While the thrust of the PTC is specific, that is, for investigation of
acts of graft and corruption, Executive Order No. 1, to survive, must be read together with the provisions of the Constitution. To
exclude the earlier administrations in the guise of "substantial distinctions" would only confirm the petitioners’ lament that the
subject executive order is only an "adventure in partisan hostility." In the case of US v. Cyprian,95 it was written: "A rather limited
number of such classifications have routinely been held or assumed to be arbitrary; those include: race, national origin,
gender, political activity or membership in a political party, union activity or membership in a labor union, or more generally the
exercise of first amendment rights."
To reiterate, in order for a classification to meet the requirements of constitutionality, it must include or embrace all persons who
naturally belong to the class.96 "Such a classification must not be based on existing circumstances only, or so constituted as to
preclude additions to the number included within a class, but must be of such a nature as to embrace all those who may thereafter
be in similar circumstances and conditions. Furthermore, all who are in situations and circumstances which are relative to the
discriminatory legislation and which are indistinguishable from those of the members of the class must be brought under the
influence of the law and treated by it in the same way as are the members of the class."97
The Court is not unaware that "mere underinclusiveness is not fatal to the validity of a law under the equal protection
clause."98 "Legislation is not unconstitutional merely because it is not all-embracing and does not include all the evils within its
reach."99 It has been written that a regulation challenged under the equal protection clause is not devoid of a rational predicate
simply because it happens to be incomplete.100 In several instances, the underinclusiveness was not considered a valid reason to
strike down a law or regulation where the purpose can be attained in future legislations or regulations. These cases refer to the "step
by step" process.101 "With regard to equal protection claims, a legislature does not run the risk of losing the entire remedial scheme
simply because it fails, through inadvertence or otherwise, to cover every evil that might conceivably have been attacked."102
In Executive Order No. 1, however, there is no inadvertence. That the previous administration was picked out was deliberate and
intentional as can be gleaned from the fact that it was underscored at least three times in the assailed executive order. It must be
noted that Executive Order No. 1 does not even mention any particular act, event or report to be focused on unlike the investigative
commissions created in the past. "The equal protection clause is violated by purposeful and intentional discrimination."103
To disprove petitioners’ contention that there is deliberate discrimination, the OSG clarifies that the commission does not only
confine itself to cases of large scale graft and corruption committed during the previous administration.104The OSG points to
Section 17 of Executive Order No. 1, which provides:
SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the
mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption
during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order.
The Court is not convinced. Although Section 17 allows the President the discretion to expand the scope of investigations of the PTC
so as to include the acts of graft and corruption committed in other past administrations, it does not guarantee that they would be
covered in the future. Such expanded mandate of the commission will still depend on the whim and caprice of the President. If he
would decide not to include them, the section would then be meaningless. This will only fortify the fears of the petitioners that the
Executive Order No. 1 was "crafted to tailor-fit the prosecution of officials and personalities of the Arroyo administration."105
The Court tried to seek guidance from the pronouncement in the case of Virata v. Sandiganbayan,106 that the "PCGG Charter
(composed of Executive Orders Nos. 1, 2 and 14) does not violate the equal protection clause." The decision, however, was devoid of
any discussion on how such conclusory statement was arrived at, the principal issue in said case being only the sufficiency of a cause
of action.
A final word
The issue that seems to take center stage at present is - whether or not the Supreme Court, in the exercise of its constitutionally
mandated power of Judicial Review with respect to recent initiatives of the legislature and the executive department, is exercising
undue interference. Is the Highest Tribunal, which is expected to be the protector of the Constitution, itself guilty of violating
fundamental tenets like the doctrine of separation of powers? Time and again, this issue has been addressed by the Court, but it
seems that the present political situation calls for it to once again explain the legal basis of its action lest it continually be accused of
being a hindrance to the nation’s thrust to progress.
The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution, is vested with Judicial Power that
"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 of abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the government."
Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which is the power to declare a treaty,
international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation
unconstitutional. This power also includes the duty to rule on the constitutionality of the application, or operation of presidential
decrees, proclamations, orders, instructions, ordinances, and other regulations. These provisions, however, have been fertile
grounds of conflict between the Supreme Court, on one hand, and the two co-equal bodies of government, on the other. Many
times the Court has been accused of asserting superiority over the other departments.
To answer this accusation, the words of Justice Laurel would be a good source of enlightenment, to wit: "And when the judiciary
mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality
nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights
which that instrument secures and guarantees to them."107
Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a co-equal body but rather simply making
sure that any act of government is done in consonance with the authorities and rights allocated to it by the Constitution. And, if after
said review, the Court finds no constitutional violations of any sort, then, it has no more authority of proscribing the actions under
review. Otherwise, the Court will not be deterred to pronounce said act as void and unconstitutional.
It cannot be denied that most government actions are inspired with noble intentions, all geared towards the betterment of the
nation and its people. But then again, it is important to remember this ethical principle: "The end does not justify the means." No
matter how noble and worthy of admiration the purpose of an act, but if the means to be employed in accomplishing it is simply
irreconcilable with constitutional parameters, then it cannot still be allowed.108 The Court cannot just turn a blind eye and simply
let it pass. It will continue to uphold the Constitution and its enshrined principles.
"The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be allowed to sap its
strength nor greed for power debase its rectitude."109
Lest it be misunderstood, this is not the death knell for a truth commission as nobly envisioned by the present administration.
Perhaps a revision of the executive issuance so as to include the earlier past administrations would allow it to pass the test of
reasonableness and not be an affront to the Constitution. Of all the branches of the government, it is the judiciary which is the most
interested in knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment. It must, however, be
emphasized that the search for the truth must be within constitutional bounds for "ours is still a government of laws and not of
men."110
WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared UNCONSTITUTIONAL insofar as it is violative of
the equal protection clause of the Constitution.
As also prayed for, the respondents are hereby ordered to cease and desist from carrying out the provisions of Executive Order No.
1.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:

BIRAOGO VS PTC
While reasonable prioritization is permitted, it should not be arbitrary lest it be struck down for being unconstitutional.

Facts:
Aquino signed E. O. No. 1 establishing Philippine Truth Commission of 2010 (PTC).
PTC is a mere ad hoc body formed under the Office of the President, which is tasked to investigate reports of graft and corruption
and to submit its finding and recommendations to the President, Congress and the Ombudsman.
Although it is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing of an
information in our courts of law.
Petitioners filed a case alleging the constitutionality of E.O. No. 1 for it violates the equal protection clause as it selectively targets for
investigation and prosecution officials and personnel of the previous administration as if corruption is their peculiar species even as
it excludes those of the other administrations, past and present, who may be indictable. It does not apply equally to all members of
the same class such that the intent of singling out the “previous administration” as its sole object makes the PTC an “adventure in
partisan hostility.
They argue that the search for truth behind the reported cases of graft and corruption must encompass acts committed not only
during the administration of former President Arroyo but also during prior administrations where the “same magnitude of
controversies and anomalies” were reported to have been committed against the Filipino people.
They assail the classification formulated by the respondents as it does not fall under the recognized exceptions because first, “there
is no substantial distinction between the group of officials targeted for investigation by Executive Order No. 1 and other groups or
persons who abused their public office for personal gain; and second, the selective classification is not germane to the purpose of
Executive Order No. 1 to end corruption.”
Issue:
WON E.O No. 1 is unconstitutional for being violative of the equal protection clause.
Held:
Yes, E.O No. 1 is unconstitutional for being violative of the equal protection clause.
The clear mandate of the envisioned truth commission is to investigate and find out the truth “concerning the reported cases of
graft and corruption during the previous administration” The intent to single out the previous administration is plain, patent and
manifest.
the Arroyo administration is but just a member of a class, that is, a class of past administrations. It is not a class of its own. Not to
include past administrations similarly situated constitutes arbitrariness which the equal protection clause cannot sanction. Such
discriminating differentiation clearly reverberates to label the commission as a vehicle for vindictiveness and selective retribution.
While reasonable prioritization is permitted, it should not be arbitrary lest it be struck down for being unconstitutional

G.R. No. 122156 February 3, 1997

MANILA PRINCE HOTEL petitioner, 
vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE
GOVERNMENT CORPORATE COUNSEL, respondents.

BELLOSILLO, J.:
The FiIipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference to qualified Filipinos,1 is in oked by petitioner in its bid to acquire
51% of the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain
that the provision is not self-executing but requires an implementing legislation for its enforcement. Corollarily, they ask whether
the 51% shares form part of the national economy and patrimony covered by the protective mantle of the Constitution.
The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the
Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of the
issued and outstanding shares of respondent MHC. The winning bidder, or the eventual "strategic partner," is to provide
management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability
and performance of the Manila Hotel.2 In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner
Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000 shares at P41.58 per
share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for the same number of shares at
P44.00 per share, or P2.42 more than the bid of petitioner.
Pertinent provisions of the bidding rules prepared by respondent GSIS state —
I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC —
1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the
Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified
Bidders:
a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for the Manila
Hotel. . . .
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS . . . .
K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER —
The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/OGCC (Office of the Government Corporate
Counsel) are obtained.3
Pending the declaration of Renong Berhad as the winning bidder/strategic partner and the execution of the necessary contracts,
petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong
Berhad.4 In a subsequent letter dated 10 October 1995 petitioner sent a manager's check issued by Philtrust Bank for Thirty-three
Million Pesos (P33.000.000.00) as Bid Security to match the bid of the Malaysian Group, Messrs. Renong Berhad . . .5 which
respondent GSIS refused to accept.
On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale
of 51% of the MHC may be hastened by respondent GSIS and consummated with Renong Berhad, petitioner came to this Court on
prohibition and mandamus. On 18 October 1995 the Court issued a temporary restraining order enjoining respondents from
perfecting and consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The case
was then set for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been
identified with the Filipino nation and has practically become a historical monument which reflects the vibrancy of Philippine
heritage and culture. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and sacredness of
independence and its power and capacity to release the full potential of the Filipino people. To all intents and purposes, it has
become a part of the national patrimony.6 Petitioner also argues that since 51% of the shares of the MHC carries with it the
ownership of the business of the hotel which is owned by respondent GSIS, a government-owned and controlled corporation, the
hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national economy. Thus, any
transaction involving 51% of the shares of stock of the MHC is clearly covered by the term national economy, to which Sec. 10,
second par., Art. XII, 1987 Constitution, applies.7
It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part of
the national economy petitioner should be preferred after it has matched the bid offer of the Malaysian firm. For the bidding rules
mandate that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified
Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price
per share.8
Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of
principle and policy since it is not a self-executing provision and requires implementing legislation(s) . . . Thus, for the said provision
to Operate, there must be existing laws "to lay down conditions under which business may be done."9
Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimony which only refers
to 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 all marine wealth in its territorial sea, and exclusive marine zone as cited in the first
and second paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the guests who
have slept in the hotel and the events that have transpired therein which make the hotel historic, these alone do not make the hotel
fall under the patrimony of the nation. What is more, the mandate of the Constitution is addressed to the State, not to respondent
GSIS which possesses a personality of its own separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still inapplicable
since what is being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor the land upon which the
building stands. Certainly, 51% of the equity of the MHC cannot be considered part of the national patrimony. Moreover, if the
disposition of the shares of the MHC is really contrary to the Constitution, petitioner should have questioned it right from the
beginning and not after it had lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids
provided that these Qualified Bidders are willing to match the highest bid in terms of price per share, is misplaced. Respondents
postulate that the privilege of submitting a matching bid has not yet arisen since it only takes place if for any reason, the Highest
Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner of a matching bid is premature since Renong
Berhad could still very well be awarded the block of shares and the condition giving rise to the exercise of the privilege to submit a
matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its
discretion in a capricious, whimsical manner, and if ever it did abuse its discretion it was not so patent and gross as to amount to an
evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. Similarly, the petition for mandamus should fail as
petitioner has no clear legal right to what it demands and respondents do not have an imperative duty to perform the act required
of them by petitioner.
We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation. It is supreme,
imperious, absolute and unalterable except by the authority from which it emanates. It has been defined as the fundamental and
paramount law of the nation. 10 It prescribes the permanent framework of a system of government, assigns to the different
departments their respective powers and duties, and establishes certain fixed principles on which government is founded. The
fundamental conception in other words is that it is a supreme law to which all other laws must conform and in accordance with
which all private rights must be determined and all public authority administered. 11 Under the doctrine of constitutional
supremacy, if a law or contract violates any norm of the constitution that law or contract whether promulgated by the legislative or
by the executive branch or entered into by private persons for private purposes is null and void and without any force and effect.
Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and
contract.
Admittedly, some constitutions are merely declarations of policies and principles. Their provisions command the legislature to enact
laws and carry out the purposes of the framers who merely establish an outline of government providing for the different
departments of the governmental machinery and securing certain fundamental and inalienable rights of citizens. 12 A provision
which lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing. But a
provision which is complete in itself and becomes operative without the aid of supplementary or enabling legislation, or that which
supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-executing. Thus a constitutional
provision is self-executing if the nature and extent of the right conferred and the liability imposed are fixed by the constitution itself,
so that they can be determined by an examination and construction of its terms, and there is no language indicating that the subject
is referred to the legislature for action. 13
As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often
become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory
enactments, and the function of constitutional conventions has evolved into one more like that of a legislative body. Hence, unless it
is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption now is that all
provisions of the constitution are self-executing If the constitutional provisions are treated as requiring legislation instead of self-
executing, the legislature would have the power to ignore and practically nullify the mandate of the fundamental law.14 This can be
cataclysmic. That is why the prevailing view is, as it has always been, that —
. . . in case of doubt, the Constitution should be considered self-executing rather than non-self-executing . . . . Unless the contrary is
clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule would give the legislature
discretion to determine when, or whether, they shall be effective. These provisions would be subordinated to the will of the
lawmaking body, which could make them entirely meaningless by simply refusing to pass the needed implementing statute. 15
Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they quote from
discussions on the floor of the 1986 Constitutional Commission —
MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the wording of
"PREFERENCE" is given to QUALIFIED FILIPINOS," can it be understood as a preference to qualified Filipinos vis-a-vis Filipinos who are
not qualified. So, why do we not make it clear? To qualified Filipinos as against aliens?
THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word "QUALIFIED?".
MR. RODRIGO. No, no, but say definitely "TO QUALIFIED FILIPINOS" as against whom? As against aliens or over aliens?
MR. NOLLEDO. Madam President, I think that is understood. We use the word "QUALIFIED" because the existing laws or prospective
laws will always lay down conditions under which business may be done. For example, qualifications on the setting up of other
financial structures, et cetera (emphasis supplied by respondents)
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO Yes, 16
Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-executing but
simply for purposes of style. But, certainly, the legislature is not precluded from enacting other further laws to enforce the
constitutional provision so long as the contemplated statute squares with the Constitution. Minor details may be left to the
legislature without impairing the self-executing nature of constitutional provisions.
In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its enforcement, provide a
convenient remedy for the protection of the rights secured or the determination thereof, or place reasonable safeguards around the
exercise of the right. The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-
executing constitutional provision does not render such a provision ineffective in the absence of such legislation. The omission from
a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an indication that it was not
intended to be self-executing. The rule is that a self-executing provision of the constitution does not necessarily exhaust legislative
power on the subject, but any legislation must be in harmony with the constitution, further the exercise of constitutional right and
make it more available. 17 Subsequent legislation however does not necessarily mean that the subject constitutional provision is
not, by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the tenor of the first
and third paragraphs of the same section which undoubtedly are not self-executing. 18 The argument is flawed. If the first and third
paragraphs are not self-executing because Congress is still to enact measures to encourage the formation and operation of
enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs legislation to regulate and exercise authority
over foreign investments within its national jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the second
paragraph can only be self-executing as it does not by its language require any legislation in order to give preference to qualified
Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony. A constitutional provision
may be self-executing in one part and non-self-executing in another. 19
Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies,
which are basically not self-executing and only placed in the Constitution as moral incentives to legislation, not as judicially
enforceable rights — are simply not in point. Basco v. Philippine Amusements and Gaming Corporation 20 speaks of constitutional
provisions on personal dignity, 21 the sanctity of family life, 22 the vital role of the youth in nation-building 23 the promotion of
social justice, 24 and the values of education. 25 Tolentino v. Secretary of Finance 26 refers to the constitutional provisions on social
justice and human rights 27 and on education. 28 Lastly, Kilosbayan, Inc. v. Morato 29 cites provisions on the promotion of general
welfare, 30 the sanctity of family life, 31 the vital role of the youth in nation-building 32 and the promotion of total human liberation
and development. 33A reading of these provisions indeed clearly shows that they are not judicially enforceable constitutional rights
but merely guidelines for legislation. The very terms of the provisions manifest that they are only principles upon which the
legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the of the 1987 Constitution is a mandatory, positive command which is complete
in itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision
does not require any legislation to put it in operation. It is per se judicially enforceable When our Constitution mandates that [i]n the
grant of rights, privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified
Filipinos, it means just that — qualified Filipinos shall be preferred. And when our Constitution declares that a right exists in certain
specified circumstances an action may be maintained to enforce such right notwithstanding the absence of any legislation on the
subject; consequently, if there is no statute especially enacted to enforce such constitutional right, such right enforces itself by its
own inherent potency and puissance, and from which all legislations must take their bearings. Where there is a right there is a
remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986 Constitutional Commission 34 explains —
The patrimony of the Nation that should be conserved and developed refers not only to out rich natural resources but also to the
cultural heritage of out race. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop not only our
lands, forests, mines and other natural resources but also the mental ability or faculty of our people.
We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage. 35 When the Constitution speaks of national
patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the
term natural resources, but also to the cultural heritage of the Filipinos.
Manila Hotel has become a landmark — a living testimonial of Philippine heritage. While it was restrictively an American hotel when
it first opened in 1912, it immediately evolved to be truly Filipino, Formerly a concourse for the elite, it has since then become the
venue of various significant events which have shaped Philippine history. It was called the Cultural Center of the 1930's. It was the
site of the festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest House of the Philippine
Government. it plays host to dignitaries and official visitors who are accorded the traditional Philippine hospitality. 36
The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City. 37During World War II
the hotel was converted by the Japanese Military Administration into a military headquarters. When the American forces returned
to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places fro their final stand.
Thereafter, in the 1950's and 1960's, the hotel became the center of political activities, playing host to almost every political
convention. In 1970 the hotel reopened after a renovation and reaped numerous international recognitions, an acknowledgment of
the Filipino talent and ingenuity. In 1986 the hotel was the site of a failed coup d' etat where an aspirant for vice-president was
"proclaimed" President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the
Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty,
independence and nationhood. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51% of the
equity of the MHC comes within the purview of the constitutional shelter for it comprises the majority and controlling stock, so that
anyone who acquires or owns the 51% will have actual control and management of the hotel. In this instance, 51% of the MHC
cannot be disassociated from the hotel and the land on which the hotel edifice stands. Consequently, we cannot sustain
respondents' claim that the Filipino First Policy provision is not applicable since what is being sold is only 51% of the outstanding
shares of the corporation, not the Hotel building nor the land upon which the building stands. 38
The argument is pure sophistry. The term qualified Filipinos as used in Our Constitution also includes corporations at least 60% of
which is owned by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would consist in substituting
the words "QUALIFIED FILIPINOS" with the following: "CITIZENS OF THE PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE
CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH CITIZENS.
x x x           x x x          x x x
MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a
corporation that is 80-percent Filipino, do we not give it preference?
MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by Filipino
citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent Filipino.
MR: DAVIDE. I want to get that meaning clear because "QUALIFIED FILIPINOS" may refer only to individuals and not to juridical
personalities or entities.
MR. MONSOD. We agree, Madam President. 39
x x x           x x x          x x x
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO. The amendment will read: "IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS." And the word "Filipinos" here, as
intended by the proponents, will include not only individual Filipinos but also Filipino-controlled entities or entities fully-controlled
by Filipinos. 40
The phrase preference to qualified Filipinos was explained thus —
MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can ask a
question.
MR. NOLLEDO. "IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY,
THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS."
MR FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified, will the
Filipino enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred?
MR. NOLLEDO. The answer is "yes."
MR. FOZ. Thank you, 41
Expounding further on the Filipino First Policy provision Commissioner Nolledo continues —
MR. NOLLEDO. Yes, Madam President. Instead of "MUST," it will be "SHALL — THE STATE SHALL GlVE PREFERENCE TO QUALIFIED
FILIPINOS. This embodies the so-called "Filipino First" policy. That means that Filipinos should be given preference in the grant of
concessions, privileges and rights covering the national patrimony. 42
The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified by
Commissioner Nolledo 43 —
Paragraph 2 of Section 10 explicitly mandates the "Pro-Filipino" bias in all economic concerns. It is better known as the FILIPINO
FIRST Policy . . . This provision was never found in previous Constitutions . . . .
The term "qualified Filipinos" simply means that preference shall be given to those citizens who can make a viable contribution to
the common good, because of credible competence and efficiency. It certainly does NOT mandate the pampering and preferential
treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate preference would be
counter productive and inimical to the common good.
In the granting of economic rights, privileges, and concessions, when a choice has to be made between a "qualified foreigner" end a
"qualified Filipino," the latter shall be chosen over the former."
Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as one of
the qualified bidders. It was pre-qualified by respondent GSIS in accordance with its own guidelines so that the sole inference here is
that petitioner has been found to be possessed of proven management expertise in the hotel industry, or it has significant equity
ownership in another hotel company, or it has an overall management and marketing proficiency to successfully operate the Manila
Hotel. 44
The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and
requires implementing legislation is quite disturbing. The attempt to violate a clear constitutional provision — by the government
itself — is only too distressing. To adopt such a line of reasoning is to renounce the duty to ensure faithfulness to the Constitution.
For, even some of the provisions of the Constitution which evidently need implementing legislation have juridical life of their own
and can be the source of a judicial remedy. We cannot simply afford the government a defense that arises out of the failure to enact
further enabling, implementing or guiding legislation. In fine, the discourse of Fr. Joaquin G. Bernas, S.J., on constitutional
government is apt —
The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress acts —
provided that there are discoverable legal standards for executive action. When the executive acts, it must be guided by its own
understanding of the constitutional command and of applicable laws. The responsibility for reading and understanding the
Constitution and the laws is not the sole prerogative of Congress. If it were, the executive would have to ask Congress, or perhaps
the Court, for an interpretation every time the executive is confronted by a constitutional command. That is not how constitutional
government operates. 45
Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which by itself
possesses a separate and distinct personality. This argument again is at best specious. It is undisputed that the sale of 51% of the
MHC could only be carried out with the prior approval of the State acting through respondent Committee on Privatization. As
correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the sale of the assets of respondents GSIS and MHC a "state
action." In constitutional jurisprudence, the acts of persons distinct from the government are considered "state action" covered by
the Constitution (1) when the activity it engages in is a "public function;" (2) when the government is so significantly involved with
the private actor as to make the government responsible for his action; and, (3) when the government has approved or authorized
the action. It is evident that the act of respondent GSIS in selling 51% of its share in respondent MHC comes under the second and
third categories of "state action." Without doubt therefore the transaction. although entered into by respondent GSIS, is in fact a
transaction of the State and therefore subject to the constitutional command. 46
When the Constitution addresses the State it refers not only to the people but also to the government as elements of the State.
After all, government is composed of three (3) divisions of power — legislative, executive and judicial. Accordingly, a constitutional
mandate directed to the State is correspondingly directed to the three(3) branches of government. It is undeniable that in this case
the subject constitutional injunction is addressed among others to the Executive Department and respondent GSIS, a government
instrumentality deriving its authority from the State.
It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding rules expressly
provide that the highest bidder shall only be declared the winning bidder after it has negotiated and executed the necessary
contracts, and secured the requisite approvals. Since the "Filipino First Policy provision of the Constitution bestows preference on
qualified Filipinos the mere tending of the highest bid is not an assurance that the highest bidder will be declared the winning
bidder. Resultantly, respondents are not bound to make the award yet, nor are they under obligation to enter into one with the
highest bidder. For in choosing the awardee respondents are mandated to abide by the dictates of the 1987 Constitution the
provisions of which are presumed to be known to all the bidders and other interested parties.
Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in the
bidding rules issued by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is a basic principle
in constitutional law that all laws and contracts must conform with the fundamental law of the land. Those which violate the
Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [if] for any reason the Highest Bidder cannot be awarded the Block of Shares,
GSIS may offer this to other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to
match the highest bid in terms of price per
share. 47 Certainly, the constitutional mandate itself is reason enough not to award the block of shares immediately to the foreign
bidder notwithstanding its submission of a higher, or even the highest, bid. In fact, we cannot conceive of a stronger reason than the
constitutional injunction itself.
In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights, privileges and
concessions covering the national economy and patrimony, thereby exceeding the bid of a Filipino, there is no question that the
Filipino will have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the award
should go to the Filipino. It must be so if we are to give life and meaning to the Filipino First Policy provision of the 1987
Constitution. For, while this may neither be expressly stated nor contemplated in the bidding rules, the constitutional fiat is,
omnipresent to be simply disregarded. To ignore it would be to sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution and laws of
the Philippines are understood to be always open to public scrutiny. These are given factors which investors must consider when
venturing into business in a foreign jurisdiction. Any person therefore desiring to do business in the Philippines or with any of its
agencies or instrumentalities is presumed to know his rights and obligations under the Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was well
aware from the beginning that a foreigner could participate in the bidding is meritless. Undoubtedly, Filipinos and foreigners alike
were invited to the bidding. But foreigners may be awarded the sale only if no Filipino qualifies, or if the qualified Filipino fails to
match the highest bid tendered by the foreign entity. In the case before us, while petitioner was already preferred at the inception
of the bidding because of the constitutional mandate, petitioner had not yet matched the bid offered by Renong Berhad. Thus it did
not have the right or personality then to compel respondent GSIS to accept its earlier bid. Rightly, only after it had matched the bid
of the foreign firm and the apparent disregard by respondent GSIS of petitioner's matching bid did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. To insist
on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the foreign group is to insist that
government be treated as any other ordinary market player, and bound by its mistakes or gross errors of judgment, regardless of the
consequences to the Filipino people. The miscomprehension of the Constitution is regrettable. Thus we would rather remedy the
indiscretion while there is still an opportunity to do so than let the government develop the habit of forgetting that the Constitution
lays down the basic conditions and parameters for its actions.
Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules, respondent GSIS is left
with no alternative but to award to petitioner the block of shares of MHC and to execute the necessary agreements and documents
to effect the sale in accordance not only with the bidding guidelines and procedures but with the Constitution as well. The refusal of
respondent GSIS to execute the corresponding documents with petitioner as provided in the bidding rules after the latter has
matched the bid of the Malaysian firm clearly constitutes grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to be used as a
guideline for future legislation but primarily to be enforced; so must it be enforced. This Court as the ultimate guardian of the
Constitution will never shun, under any reasonable circumstance, the duty of upholding the majesty of the Constitution which it is
tasked to defend. It is worth emphasizing that it is not the intention of this Court to impede and diminish, much less undermine, the
influx of foreign investments. Far from it, the Court encourages and welcomes more business opportunities but avowedly sanctions
the preference for Filipinos whenever such preference is ordained by the Constitution. The position of the Court on this matter could
have not been more appropriately articulated by Chief Justice Narvasa —
As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the
executive about the wisdom and feasibility of legislation economic in nature, the Supreme Court has not been spared criticism for
decisions perceived as obstacles to economic progress and development . . . in connection with a temporary injunction issued by the
Court's First Division against the sale of the Manila Hotel to a Malaysian Firm and its partner, certain statements were published in a
major daily to the effect that injunction "again demonstrates that the Philippine legal system can be a major obstacle to doing
business here.
Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or
set itself up as the judge of whether they are viable or attainable, it is its bounden duty to make sure that they do not violate the
Constitution or the laws, or are not adopted or implemented with grave abuse of discretion amounting to lack or excess of
jurisdiction. It will never shirk that duty, no matter how buffeted by winds of unfair and ill-informed criticism. 48
Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the
character of the asset, should not take precedence over non-material values. A commercial, nay even a budgetary, objective should
not be pursued at the expense of national pride and dignity. For the Constitution enshrines higher and nobler non-material values.
Indeed, the Court will always defer to the Constitution in the proper governance of a free society; after all, there is nothing so
sacrosanct in any economic policy as to draw itself beyond judicial review when the Constitution is involved. 49
Nationalism is inherent, in the very concept of the Philippines being a democratic and republican state, with sovereignty residing in
the Filipino people and from whom all government authority emanates. In nationalism, the happiness and welfare of the people
must be the goal. The nation-state can have no higher purpose. Any interpretation of any constitutional provision must adhere to
such basic concept. Protection of foreign investments, while laudible, is merely a policy. It cannot override the demands of
nationalism. 50
The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder solely for the sake
of privatization. We are not talking about an ordinary piece of property in a commercial district. We are talking about a historic relic
that has hosted many of the most important events in the short history of the Philippines as a nation. We are talking about a hotel
where heads of states would prefer to be housed as a strong manifestation of their desire to cloak the dignity of the highest state
function to their official visits to the Philippines. Thus the Manila Hotel has played and continues to play a significant role as an
authentic repository of twentieth century Philippine history and culture. In this sense, it has become truly a reflection of the Filipino
soul — a place with a history of grandeur; a most historical setting that has played a part in the shaping of a country. 51
This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark — this Grand
Old Dame of hotels in Asia — to a total stranger. For, indeed, the conveyance of this epic exponent of the Filipino psyche to alien
hands cannot be less than mephistophelian for it is, in whatever manner viewed, a veritable alienation of a nation's soul for some
pieces of foreign silver. And so we ask: What advantage, which cannot be equally drawn from a qualified Filipino, can be gained by
the Filipinos Manila Hotel — and all that it stands for — is sold to a non-Filipino? How much of national pride will vanish if the
nation's cultural heritage is entrusted to a foreign entity? On the other hand, how much dignity will be preserved and realized if the
national patrimony is safekept in the hands of a qualified, zealous and well-meaning Filipino? This is the plain and simple meaning of
the Filipino First Policy provision of the Philippine Constitution. And this Court, heeding the clarion call of the Constitution and
accepting the duty of being the elderly watchman of the nation, will continue to respect and protect the sanctity of the Constitution.
WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON
PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed to CEASE and DESIST from selling 51% of the
shares of the Manila Hotel Corporation to RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL
CORPORATION to purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00 per share and thereafter to
execute the necessary clearances and to do such other acts and deeds as may be necessary for purpose.
SO ORDERED.
MANILA PRINCE HOTEL, petitioner v GSIS, respondent G.R. No. 122156; February 3, 1997
TOPIC: Non-Self Executing v Self Executing Constitutional Provisions

FACTS:
The Government Service Insurance System (GSIS) decided to sell through public bidding 30% to 51% of the issued and outstanding
shares of the Manila Hotel (MHC).
In a close bidding, two bidders participated: Manila Prince Hotel Corporation (MPHC), a Filipino corporation, which offered to buy
51% of the MHC at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator, which bid for the
same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner.
Pending the declaration of Renong Berhard as the winning bidder and the execution of the contracts, the MPHC matched the bid
price  in a letter to GSIS. MPHC sent a manager’s check to the GSIS in a subsequent letter, which GSIS refused to accept. On 17
October 1995, perhaps apprehensive that GSIS has disregarded the tender of the matching bid, MPHC came to the Court on
prohibition and mandamus.
Petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been identified with
the Filipino nation and has practically become a historical monument which reflects the vibrancy of Philippine heritage and culture.
Respondents assert that Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of principle and policy since it is
not a self-executing provision and requires implementing legislation(s).
ISSUE:
Whether the provisions of the Constitution, particularly Article XII Section 10, are self-executing.
RULING:
Yes. Sec 10, Art. XII of the 1987 Constitution is a self-executing provision.
A provision which lays down a general principle, such as those found in Article II of the 1987 Constitution, is usually not self-
executing. But a provision which is complete in itself and becomes operative without the aid of supplementary or enabling
legislation, or that which supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-executing.
Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption now is
that all provisions of the constitution are self-executing. If the constitutional provisions are treated as requiring legislation instead of
self-executing, the legislature would have the power to ignore and practically nullify the mandate of the fundamental law.
In fine, Section 10, second paragraph, Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself
and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision does not
require any legislation to put it in operation.

LORESCA vs PHILEX MINING CORPORATION Case Digest

PERFECTO S. FLORESCA et al vs PHILEX MINING CORPORATION et al

FACTS:

Floresca et al are the heirs of the deceased employees of Philex Mining Corporation (hereinafter referred to as Philex), who, while
working at its copper mines underground operations at Tuba, Benguet on June 28, 1967, died as a result of the cave-in that buried
them in the tunnels of the mine. Specifically, the complaint alleges that Philex, in violation of government rules and regulations,
negligently and deliberately failed to take the required precautions for the protection of the lives of its men working underground.
Floresca et al moved to claim their benefits pursuant to the Workmen’s Compensation Act before the Workmen’s Compensation
Commission. They also petitioned before the regular courts and sue Philex for additional damages. Philex invoked that they can no
longer be sued because the petitioners have already claimed benefits under the WCA.

ISSUE:

Whether or not Floresca et al can claim benefits and at the same time sue.

HELD:

 Under the law, Floresca et al could only do either one. If they filed for benefits under the WCA then they will be estopped from
proceeding with a civil case before the regular courts. Conversely, if they sued before the civil courts then they would also be
estopped from claiming benefits under the WCA. The SC however ruled that Floresca et al are excused from this deficiency due to
ignorance of the fact. Had they been aware of such then they may have not availed of such a remedy. However, if in case they’ll win
in the lower court whatever award may be granted, the amount given to them under the WCA should be deducted. The SC
emphasized that if they would go strictly by the book in this case then the purpose of the law may be defeated. Idolatrous reverence
for the letter of the law sacrifices the human being. The spirit of the law insures man’s survival and ennobles him. As Shakespeare
said, the letter of the law killeth but its spirit giveth life.
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G.R. No. L-39419 April 12, 1982
MAPALAD AISPORNA, petitioner, 
vs.
THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

DE CASTRO, J.:
In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the decision dated August 14, 1974 1in CA-G.R. No.
13243-CR entitled "People of the Philippines, plaintiff-appellee, vs. Mapalad Aisporna, defendant-appellant" of respondent Court of
Appeals affirming the judgment of the City Court of Cabanatuan 2 rendered on August 2, 1971 which found the petitioner guilty for
having violated Section 189 of the Insurance Act (Act No. 2427, as amended) and sentenced her to pay a fine of P500.00 with
subsidiary imprisonment in case of insolvency, and to pay the costs.
Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section 189 of the Insurance Act on November 21,
1970 in an information 3 which reads as follows:
That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, did then and there, wilfully, unlawfully and feloniously act as agent in the solicitation or
procurement of an application for insurance by soliciting therefor the application of one Eugenio S. Isidro, for and in behalf of Perla
Compania de Seguros, Inc., a duly organized insurance company, registered under the laws of the Republic of the Philippines,
resulting in the issuance of a Broad Personal Accident Policy No. 28PI-RSA 0001 in the amount not exceeding FIVE THOUSAND PESOS
(P5,000.00) dated June 21, 1969, without said accused having first secured a certificate of authority to act as such agent from the
office of the Insurance Commissioner, Republic of the Philippines.
CONTRARY TO LAW.
The facts, 4 as found by the respondent Court of Appeals are quoted hereunder:
IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June, 1969, appellant's husband, Rodolfo S. Aisporna
was duly licensed by Insurance Commission as agent to Perla Compania de Seguros, with license to expire on 30 June, 1970, Exh. C;
on that date, at Cabanatuan City, Personal Accident Policy, Exh. D was issued by Perla thru its author representative, Rodolfo S.
Aisporna, for a period of twelve (12) months with beneficiary as Ana M. Isidro, and for P5,000.00; apparently, insured died by
violence during lifetime of policy, and for reasons not explained in record, present information was filed by Fiscal, with assistance of
private prosecutor, charging wife of Rodolfo with violation of Sec. 189 of Insurance Law for having, wilfully, unlawfully, and
feloniously acted, "as agent in the solicitation for insurance by soliciting therefore the application of one Eugenio S. Isidro for and in
behalf of Perla Compaña de Seguros, ... without said accused having first secured a certificate of authority to act as such agent from
the office of the Insurance Commission, Republic of the Philippines."
and in the trial, People presented evidence that was hardly disputed, that aforementioned policy was issued with active participation
of appellant wife of Rodolfo, against which appellant in her defense sought to show that being the wife of true agent, Rodolfo, she
naturally helped him in his work, as clerk, and that policy was merely a renewal and was issued because Isidro had called by
telephone to renew, and at that time, her husband, Rodolfo, was absent and so she left a note on top of her husband's desk to
renew ...
Consequently, the trial court found herein petitioner guilty as charged. On appeal, the trial court's decision was affirmed by the
respondent appellate court finding the petitioner guilty of a violation of the first paragraph of Section 189 of the Insurance Act.
Hence, this present recourse was filed on October 22, 1974. 5
In its resolution of October 28, 1974, 6 this Court resolved, without giving due course to this instant petition, to require the
respondent to comment on the aforesaid petition. In the comment 7 filed on December 20, 1974, the respondent, represented by
the Office of the Solicitor General, submitted that petitioner may not be considered as having violated Section 189 of the Insurance
Act. 8 On April 3, 1975, petitioner submitted his Brief 9 while the Solicitor General, on behalf of the respondent, filed a
manifestation 10 in lieu of a Brief on May 3, 1975 reiterating his stand that the petitioner has not violated Section 189 of the
Insurance Act.
In seeking reversal of the judgment of conviction, petitioner assigns the following errors 11 allegedly committed by the appellate
court:
1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF COMPENSATION IS NOT AN ESSENTIAL ELEMENT OF
THE CRIME DEFINED BY THE FIRST PARAGRAPH OF SECTION 189 OF THE INSURANCE ACT.
2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO EXHIBITS F, F-1, TO F-17, INCLUSIVE SUFFICIENT TO
ESTABLISH PETITIONER'S GUILT BEYOND REASONABLE DOUBT.
3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN PETITIONER.
We find the petition meritorious.
The main issue raised is whether or not a person can be convicted of having violated the first paragraph of Section 189 of the
Insurance Act without reference to the second paragraph of the same section. In other words, it is necessary to determine whether
or not the agent mentioned in the first paragraph of the aforesaid section is governed by the definition of an insurance agent found
on its second paragraph.
The pertinent provision of Section 189 of the Insurance Act reads as follows:
No insurance company doing business within the Philippine Islands, nor any agent thereof, shall pay any commission or other
compensation to any person for services in obtaining new insurance, unless such person shall have first procured from the Insurance
Commissioner a certificate of authority to act as an agent of such company as hereinafter provided. No person shall act as agent,
sub-agent, or broker in the solicitation of procurement of applications for insurance, or receive for services in obtaining new
insurance, any commission or other compensation from any insurance company doing business in the Philippine Islands, or agent
thereof, without first procuring a certificate of authority so to act from the Insurance Commissioner, which must be renewed
annually on the first day of January, or within six months thereafter. Such certificate shall be issued by the Insurance Commissioner
only upon the written application of persons desiring such authority, such application being approved and countersigned by the
company such person desires to represent, and shall be upon a form approved by the Insurance Commissioner, giving such
information as he may require. The Insurance Commissioner shall have the right to refuse to issue or renew and to revoke any such
certificate in his discretion. No such certificate shall be valid, however, in any event after the first day of July of the year following the
issuing of such certificate. Renewal certificates may be issued upon the application of the company.
Any person who for compensation solicits or obtains insurance on behalf of any insurance company, or transmits for a person other
than himself an application for a policy of insurance to or from such company or offers or assumes to act in the negotiating of such
insurance, shall be an insurance agent within the intent of this section, and shall thereby become liable to all the duties,
requirements, liabilities, and penalties to which an agent of such company is subject.
Any person or company violating the provisions of this section shall be fined in the sum of five hundred pesos. On the conviction of
any person acting as agent, sub-agent, or broker, of the commission of any offense connected with the business of insurance, the
Insurance Commissioner shall immediately revoke the certificate of authority issued to him and no such certificate shall thereafter
be issued to such convicted person.
A careful perusal of the above-quoted provision shows that the first paragraph thereof prohibits a person from acting as agent, sub-
agent or broker in the solicitation or procurement of applications for insurance without first procuring a certificate of authority so to
act from the Insurance Commissioner, while its second paragraph defines who is an insurance agent within the intent of this section
and, finally, the third paragraph thereof prescribes the penalty to be imposed for its violation.
The respondent appellate court ruled that the petitioner is prosecuted not under the second paragraph of Section 189 of the
aforesaid Act but under its first paragraph. Thus —
... it can no longer be denied that it was appellant's most active endeavors that resulted in issuance of policy to Isidro, she was there
and then acting as agent, and received the pay thereof — her defense that she was only acting as helper of her husband can no
longer be sustained, neither her point that she received no compensation for issuance of the policy because
any person who for compensation solicits or obtains insurance on behalf of any insurance company or transmits for a person other
than himself an application for a policy of insurance to or from such company or offers or assumes to act in the negotiating of such
insurance, shall be an insurance agent within the intent of this section, and shall thereby become liable to all the duties,
requirements, liabilities, and penalties, to which an agent of such company is subject. paragraph 2, Sec. 189, Insurance Law,
now it is true that information does not even allege that she had obtained the insurance,
for compensation
which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph, but what appellant apparently overlooks is
that she is prosecuted not under the 2nd but under the 1st paragraph of Sec. 189 wherein it is provided that,
No person shall act as agent, sub-agent, or broker, in the solicitation or procurement of applications for insurance, or receive for
services in obtaining new insurance any commission or other compensation from any insurance company doing business in the
Philippine Island, or agent thereof, without first procuring a certificate of authority to act from the insurance commissioner, which
must be renewed annually on the first day of January, or within six months thereafter.
therefore, there was no technical defect in the wording of the charge, so that Errors 2 and 4 must be overruled. 12
From the above-mentioned ruling, the respondent appellate court seems to imply that the definition of an insurance agent under
the second paragraph of Section 189 is not applicable to the insurance agent mentioned in the first paragraph. Parenthetically, the
respondent court concludes that under the second paragraph of Section 189, a person is an insurance agent if he solicits and obtains
an insurance for compensation, but, in its first paragraph, there is no necessity that a person solicits an insurance for compensation
in order to be called an insurance agent.
We find this to be a reversible error. As correctly pointed out by the Solicitor General, the definition of an insurance agent as found
in the second paragraph of Section 189 is intended to define the word "agent" mentioned in the first and second paragraphs of the
aforesaid section. More significantly, in its second paragraph, it is explicitly provided that the definition of an insurance agent is
within the intent of Section 189. Hence —
Any person who for compensation ... shall be an insurance agent within the intent of this section, ...
Patently, the definition of an insurance agent under the second paragraph holds true with respect to the agent mentioned in the
other two paragraphs of the said section. The second paragraph of Section 189 is a definition and interpretative clause intended to
qualify the term "agent" mentioned in both the first and third paragraphs of the aforesaid section.
Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the first and second paragraphs
would give harmony to the aforesaid three paragraphs of Section 189. Legislative intent must be ascertained from a consideration of
the statute as a whole. The particular words, clauses and phrases should not be studied as detached and isolated expressions, but
the whole and every part of the statute must be considered in fixing the meaning of any of its parts and in order to produce
harmonious whole. 13 A statute must be so construed as to harmonize and give effect to all its provisions whenever possible. 14 The
meaning of the law, it must be borne in mind, is not to be extracted from any single part, portion or section or from isolated words
and phrases, clauses or sentences but from a general consideration or view of the act as a whole. 15 Every part of the statute must
be interpreted with reference to the context. This means that every part of the statute must be considered together with the other
parts, and kept subservient to the general intent of the whole enactment, not separately and independently. 16 More importantly,
the doctrine of associated words (Noscitur a Sociis) provides that where a particular word or phrase in a statement is ambiguous in
itself or is equally susceptible of various meanings, its true meaning may be made clear and specific by considering the company in
which it is found or with which it is associated. 17
Considering that the definition of an insurance agent as found in the second paragraph is also applicable to the agent mentioned in
the first paragraph, to receive a compensation by the agent is an essential element for a violation of the first paragraph of the
aforesaid section. The appellate court has established ultimately that the petitioner-accused did not receive any compensation for
the issuance of the insurance policy of Eugenio Isidro. Nevertheless, the accused was convicted by the appellate court for, according
to the latter, the receipt of compensation for issuing an insurance policy is not an essential element for a violation of the first
paragraph of Section 189 of the Insurance Act.
We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a misdemeanor for any person for direct or indirect
compensation to solicit insurance without a certificate of authority to act as an insurance agent, an information, failing to allege that
the solicitor was to receive compensation either directly or indirectly, charges no offense. 18 In the case of Bolen vs. Stake, 19 the
provision of Section 3750, Snyder's Compiled Laws of Oklahoma 1909 is intended to penalize persons only who acted as insurance
solicitors without license, and while acting in such capacity negotiated and concluded insurance contracts for compensation. It must
be noted that the information, in the case at bar, does not allege that the negotiation of an insurance contracts by the accused with
Eugenio Isidro was one for compensation. This allegation is essential, and having been omitted, a conviction of the accused could not
be sustained. It is well-settled in Our jurisprudence that to warrant conviction, every element of the crime must be alleged and
proved. 20
After going over the records of this case, We are fully convinced, as the Solicitor General maintains, that accused did not violate
Section 189 of the Insurance Act.
WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of the crime charged, with costs de oficio.
SO ORDERED.
Aisporna v Court of Appeals and the People of the Philippines
G.R. No. L-39419
12 April 1982
TOPIC: Statutory Construction, Doctrine of Associated Words (Noscitur a Sociis)
FACTS:
Petitioner Aisporna was charged for violation of Section 189 of the Insurance Act.
Petitioner’s husband, Rodolfo S. Aisporna (Rodolfo) was duly licensed by the Insurance Commission as agent to Perla Compania de
Seguros. Thru Rodolfo, a 12- month Personal Accident Policy was issued by Perla with beneficiary to Ana M. Isidro for P50,000. The
insured died by violence during lifetime of policy.
Subsequently, petitioner was charged because the aforementioned policy was issued with her active participation, which is not
allowed because she did not possess a certificate of authority to act as agent from the office of the Insurance Commission.
Petitioner contended that being the wife of Rodolfo, she naturally helped him in his work, and that the policy was merely a renewal
and was issued because her husband was not around when Isidro called by telephone. Instead, appellant left a note on top of her
husband’s desk.
The trial court found petitioner guilty as charged. On appeal, the trial court’s decisions was affirmed by respondent appellate court,
finding petitioner guilty of a violation of the first paragraph of Sec 189 of the insurance act.
ISSUE:
Whether or not a person can be convicted of having violated the first paragraph of Section 189 of the Insurance Act without
reference to the second paragraph of the same section.
RULING:
The petition is meritorious. Petition appealed from is reversed, and accused is acquitted of the crime charged.
A perusal of the provision in question shows that the first paragraph thereof prohibits a person from acting as agent, sub-agent or
broker in the solicitation or procurement of applications for insurance without first procuring a certificate of authority so to act from
the Insurance Commissioner, while its second paragraph defines who an insurance agent is within the intent of this section and,
finally, the third paragraph thereof prescribes the penalty to be imposed for its violation.
The definition of an insurance agent as found in the second paragraph of Section 189 is intended to define the word “agent”
mentioned in the first and second paragraphs of the aforesaid section. More significantly, in its second paragraph, it is explicitly
provided that the definition of an insurance agent is within the intent of Section 189.
Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the first and second paragraphs
would give harmony to the aforesaid three paragraphs of Section 189. Legislative intent must be ascertained from a consideration of
the statute as a whole. The particular words, clauses and phrases should not be studied as detached and isolated expressions, but
the whole and every part of the statute must be considered in fixing the meaning of any of its parts and in order to produce
harmonious whole. A statute must be so construed as to harmonize and give effect to all its provisions whenever possible. More
importantly the doctrine of associated words (Noscitur a Sociis) provides that where a particular word or phrase in a statement is
ambiguous in itself or is equally susceptible of various meanings, its true meaning may be made clear and specific by considering the
company in which it is found or with which it is associated. 
Considering that the definition of an insurance agent as found in the second paragraph is also applicable to the agent mentioned in
the first paragraph, to receive compensation by the agent is an essential element for a violation of the first paragraph of the
aforesaid section.
In the case at bar, the information does not allege that the negotiation of an insurance contracts by the accused with Eugenio Isidro
was one for compensation. This allegation is essential, and having been omitted, a conviction of the accused could not be sustained.
It is well-settled in Our jurisprudence that to warrant conviction, every element of the crime must be alleged and proved.
The accused did not violate Section 189 of the Insurance Act.
G.R. No. L-34964 January 31, 1973
CHINA BANKING CORPORATION and TAN KIM LIONG, petitioners-appellants, 
vs.
HON. WENCESLAO ORTEGA, as Presiding Judge of the Court of First Instance of Manila, Branch VIII, and VICENTE G.
ACABAN, respondents-appellees.
Sy Santos, Del Rosario and Associates for petitioners-appellants.
Tagalo, Gozar and Associates for respondents-appellees.

MAKALINTAL, J.:
The only issue in this petition for certiorari to review the orders dated March 4, 1972 and March 27, 1972, respectively, of the Court
of First Instance of Manila in its Civil Case No. 75138, is whether or not a banking institution may validly refuse to comply with a
court process garnishing the bank deposit of a judgment debtor, by invoking the provisions of Republic Act No. 1405. *
On December 17, 1968 Vicente Acaban filed a complaint in the court a quo against Bautista Logging Co., Inc., B & B Forest
Development Corporation and Marino Bautista for the collection of a sum of money. Upon motion of the plaintiff the trial court
declared the defendants in default for failure to answer within the reglementary period, and authorized the Branch Clerk of Court
and/or Deputy Clerk to receive the plaintiff's evidence. On January 20, 1970 judgment by default was rendered against the
defendants.
To satisfy the judgment, the plaintiff sought the garnishment of the bank deposit of the defendant B & B Forest Development
Corporation with the China Banking Corporation. Accordingly, a notice of garnishment was issued by the Deputy Sheriff of the trial
court and served on said bank through its cashier, Tan Kim Liong. In reply, the bank' cashier invited the attention of the Deputy
Sheriff to the provisions of Republic Act No. 1405 which, it was alleged, prohibit the disclosure of any information relative to bank
deposits. Thereupon the plaintiff filed a motion to cite Tan Kim Liong for contempt of court.
In an order dated March 4, 1972 the trial court denied the plaintiff's motion. However, Tan Kim Liong was ordered "to inform the
Court within five days from receipt of this order whether or not there is a deposit in the China Banking Corporation of defendant B &
B Forest Development Corporation, and if there is any deposit, to hold the same intact and not allow any withdrawal until further
order from this Court." Tan Kim Liong moved to reconsider but was turned down by order of March 27, 1972. In the same order he
was directed "to comply with the order of this Court dated March 4, 1972 within ten (10) days from the receipt of copy of this order,
otherwise his arrest and confinement will be ordered by the Court." Resisting the two orders, the China Banking Corporation and
Tan Kim Liong instituted the instant petition.
The pertinent provisions of Republic Act No. 1405 relied upon by the petitioners reads:
Sec. 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by
the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of absolutely
confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except
upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or
dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.
Sec 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned
in Section two hereof any information concerning said deposits.
Sec. 5. Any violation of this law will subject offender upon conviction, to an imprisonment of not more than five years or a fine of not
more than twenty thousand pesos or both, in the discretion of the court.
The petitioners argue that the disclosure of the information required by the court does not fall within any of the four (4) exceptions
enumerated in Section 2, and that if the questioned orders are complied with Tan Kim Liong may be criminally liable under Section 5
and the bank exposed to a possible damage suit by B & B Forest Development Corporation. Specifically referring to this case, the
position of the petitioners is that the bank deposit of judgment debtor B & B Forest Development Corporation cannot be subject to
garnishment to satisfy a final judgment against it in view of the aforequoted provisions of law.
We do not view the situation in that light. The lower court did not order an examination of or inquiry into the deposit of B & B Forest
Development Corporation, as contemplated in the law. It merely required Tan Kim Liong to inform the court whether or not the
defendant B & B Forest Development Corporation had a deposit in the China Banking Corporation only for purposes of the
garnishment issued by it, so that the bank would hold the same intact and not allow any withdrawal until further order. It will be
noted from the discussion of the conference committee report on Senate Bill No. 351 and House Bill No. 3977, which later became
Republic Act 1405, that it was not the intention of the lawmakers to place bank deposits beyond the reach of execution to satisfy a
final judgment. Thus:
Mr. MARCOS. Now, for purposes of the record, I should like the Chairman of the Committee on Ways and Means to clarify this
further. Suppose an individual has a tax case. He is being held liable by the Bureau of Internal Revenue for, say, P1,000.00 worth of
tax liability, and because of this the deposit of this individual is attached by the Bureau of Internal Revenue.
Mr. RAMOS. The attachment will only apply after the court has pronounced sentence declaring the liability of such person. But
where the primary aim is to determine whether he has a bank deposit in order to bring about a proper assessment by the Bureau of
Internal Revenue, such inquiry is not authorized by this proposed law.
Mr. MARCOS. But under our rules of procedure and under the Civil Code, the attachment or garnishment of money deposited is
allowed. Let us assume, for instance, that there is a preliminary attachment which is for garnishment or for holding liable all moneys
deposited belonging to a certain individual, but such attachment or garnishment will bring out into the open the value of such
deposit. Is that prohibited by this amendment or by this law?
Mr. RAMOS. It is only prohibited to the extent that the inquiry is limited, or rather, the inquiry is made only for the purpose of
satisfying a tax liability already declared for the protection of the right in favor of the government; but when the object is merely to
inquire whether he has a deposit or not for purposes of taxation, then this is fully covered by the law.
Mr. MARCOS. And it protects the depositor, does it not?
Mr. RAMOS. Yes, it protects the depositor.
Mr. MARCOS. The law prohibits a mere investigation into the existence and the amount of the deposit.
Mr. RAMOS. Into the very nature of such deposit.
Mr. MARCOS. So I come to my original question. Therefore, preliminary garnishment or attachment of the deposit is not allowed?
Mr. RAMOS. No, without judicial authorization.
Mr. MARCOS. I am glad that is clarified. So that the established rule of procedure as well as the substantive law on the matter is
amended?
Mr. RAMOS. Yes. That is the effect.
Mr. MARCOS. I see. Suppose there has been a decision, definitely establishing the liability of an individual for taxation purposes and
this judgment is sought to be executed ... in the execution of that judgment, does this bill, or this proposed law, if approved, allow
the investigation or scrutiny of the bank deposit in order to execute the judgment?
Mr. RAMOS. To satisfy a judgment which has become executory.
Mr. MARCOS. Yes, but, as I said before, suppose the tax liability is P1,000,000 and the deposit is half a million, will this bill allow
scrutiny into the deposit in order that the judgment may be executed?
Mr. RAMOS. Merely to determine the amount of such money to satisfy that obligation to the Government, but not to determine
whether a deposit has been made in evasion of taxes.
xxx xxx xxx
Mr. MACAPAGAL. But let us suppose that in an ordinary civil action for the recovery of a sum of money the plaintiff wishes to attach
the properties of the defendant to insure the satisfaction of the judgment. Once the judgment is rendered, does the gentleman
mean that the plaintiff cannot attach the bank deposit of the defendant?
Mr. RAMOS. That was the question raised by the gentleman from Pangasinan to which I replied that outside the very purpose of this
law it could be reached by attachment.
Mr. MACAPAGAL. Therefore, in such ordinary civil cases it can be attached?
Mr. RAMOS. That is so.
(Vol. II, Congressional Record, House of Representatives, No. 12, pp. 3839-3840, July 27, 1955).
It is sufficiently clear from the foregoing discussion of the conference committee report of the two houses of Congress that the
prohibition against examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its being garnished to
insure satisfaction of a judgment. Indeed there is no real inquiry in such a case, and if the existence of the deposit is disclosed the
disclosure is purely incidental to the execution process. It is hard to conceive that it was ever within the intention of Congress to
enable debtors to evade payment of their just debts, even if ordered by the Court, through the expedient of converting their assets
into cash and depositing the same in a bank.
WHEREFORE, the orders of the lower court dated March 4 and 27, 1972, respectively, are hereby affirmed, with costs against the
petitioners-appellants.
Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.
Concepcion, C.J. and Teehankee, J., took no part.
 
Footnotes
* An Act Probihiting Disclosure of or Inquiry into, Deposits with any Banking Institution and Providing Penalty Therefor.

The Lawphil Project - Arellano Law Foundation

 CHINA BANK V ORTEGA
GR. L-34964
Facts:
On December 17, 1968 Vicente Acaban filed a complaint in the court a quo against Bautista Logging Co., Inc., B & B Forest
Development Corporation and Marino Bautista for the collection of a sum of money. Upon motion of the plaintiff, the court declared
the defendants in default for not answering within the prescribe period. To satisfy the judgment, the plaintiff sought for the
garnishment of the bank deposits of the defendants with the China Banking Corporation. Consequently, a notice of garnishment was
issued by the deputy sheriff of the trial court and served on the bank’s cashier. The bank cashier, replied in the negative. In the reply,
he invited the attention of the sheriff to RA 1405. The plaintiff then filed a motion to cite the cashier for contempt of court. The trial
court, despite having denied the motion, ordered that the cashier confirm whether or not the defendants have existing deposit in
their bank.  The cashier moved to reconsider but was denied and, subsequently, he was ordered to comply with the order of the
court within 10 days, otherwise, he would be arrested. Hence this petition.

Issue:
Whether or not china bank may validly refuse to comply with a court process garnishing the bank deposit of the debtor by invoking
the provisions of RA 1405.
Held:

The prohibition against examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its being garnished
to insure satisfaction of a judgment. In the present case, there was no inquiry as to how much the actual deposits are, the only
inquiry that the court had was whether or not there are deposits of the then defendants in China bank
G.R. No. L-37867 February 22, 1982
BOARD OF ADMINISTRATORS, PHILIPPINES VETERANS ADMINISTRATION, petitioner, 
vs.
HON. JOSE G. BAUTISTA, in his capacity as Presiding Judge of the CFI Manila, Branch III, and CALIXTO V. GASILAO, respondents.

GUERRERO, J.:
This is a petition to review on certiorari the decision of respondent Court of First Instance of Manila, Branch III, rendered on October
25, 1973 in Civil Case No. 90450 for mandamus filed by Calixto V. Gasilao against the Board of Administrators of the Philippine
Veterans Administration.
The facts as found by the Court a quo to have been established by the pleadings find by the parties are stated in the decision under
review from which We quote the following:
Calixto V. Gasilao, pauper litigant and petitioner in the above-entitled case, was a veteran in good standing during World War II. On
October 19, 1955, he filed a claim for disability pension under Section 9, Republic Act No. 65. The claim was disapproved by the
Philippine Veterans Board (now Board of Administrators, Philippine Veterans Administration).
Meanwhile, Republic Act 65 was amended by Republic Act 1362 on June 22, 1955 by including as part of the benefit of P50.00,
P10.00 a month for each of the unmarried minor children below 18 of the veteran Republic Act No. 1362 was implemented by the
respondents only on July 1, 1955.
On June 18, 1957, Section 9 of Republic Act No. 65 was further amended by Republic Act 1920 increasing the life pension of the
veteran to P100.00 a month and maintaining the P10.00 a month each for the unmarried minor children below 18.
Fortunately, on August 8, 1968, the claim of the petitioner which was disapproved in December, 1955 was reconsidered and his
claim was finally approved at the rate of P100.00 a month, life pension, and the additional Pl0.00 for each of his ten unmarried
minor children below 18. In view of the approval of the claim of petitioner, he requested respondents that his claim be made
retroactive as of the date when his original application was flied or disapproved in 1955. Respondents did not act on his request.
On June 22, 1969, Section 9 of Republic Act No. 65 was amended by Republic Act No. 5753 which increased the life pension of the
veteran to P200.00 a month and granted besides P30.00 a month for the wife and P30.00 a month each for his unmarried minor
children below 18. In view of the new law, respondents increased the monthly pension of petitioner to P125.00 effective January 15,
1971 due to insufficient funds to cover full implementation. His wife was given a monthly pension of P7.50 until January 1, 1972
when Republic Act 5753 was fully implemented.
Petitioner now claims that he was deprived of his right to the pension from October 19, 1955 to June 21, 1957 at the rate of P50.00
per month plus P10.00 a month each for his six (6) unmarried minor children below 18. lie also alleges that from June 22, 1957 to
August 7, 1968 he is entitled to the difference of P100.00 per month plus P10.00 a month each for his seven (7) unmarried nor
children below 18. Again, petitioner asserts the difference of P100.00 per month, plus P30.00 a month for his wife and the difference
of P20.00 a month each for his four (4) unmarried minor children below 18 from June 22, 1969 up to January 14, 1971 and finally,
the difference of P75.00 per month plus P30.00 a month for his wife and the difference of P20.00 a month for his three (3)
unmarried minor children below 18 from January 15, 1971 to December 31, 1971. 1
According to the records, the parties, through their respective counsels, filed on September 24, 1973 the following stipulation of
facts in the lower Court:
STIPULATION OF FACTS
COME NOW the parties thru their respective counsel, and unto this Honorable Court, respectfully state that they agree on the
following facts which may be considered as proved without the need of the introduction of any evidence thereon, to wit:
1. Petitioner was a veteran in good standing during the last World War that took active participation in the liberation drive against
the enemy, and due to his military service, he was rendered disabled.
2. The Philippine Veterans Administration, formerly the Philippine Veterans Board, (now Philippine Veterans Affairs Office) is an
agency of the Government charged with the administration of different laws giving various benefits in favor of veterans and their
orphans/or widows and parents; that it has the power to adopt rules and regulations to implement said laws and to pass upon the
merits and qualifications of persons applying for rights and privileges extended by this Act pursuant to such rules and regulations as
it may adopt to insure the speedy and honest fulfillment of its aims and purposes.
3. On July 23, 1955, petitioner filed a claim (Claim No. Dis-12336) for disability pension under Section 9 of RA 65, with the Philippine
Veterans Board (later succeeded by the Philippine Veterans Administration, now Philippine Veterans Affairs Office), alleging that he
was suffering from PTB, which he incurred in line of duty.
4. Due to petitioner's failure to complete his supporting papers and submit evidence to establish his service connected illness, his
claim was disapproved by the Board of the defunct Philippine Veterans Board on December 18, 1955.
5. On August 8, 1968, petitioner was able to complete his supporting papers and, after due investigation and processing, the Board
of Administrators found out that his disability was 100% thus he was awarded the full benefits of section 9 of RA 65, and was
therefore given a pension of P100.00 a month and with an additional P 10.00 a month for each of his unmarried minor children
pursuant to RA 1920, amending section 9 of RA 65.
6. RA 5753 was approved on June 22, 1969, providing for an increase in the basic pension to P200.00 a month and the additional
pension, to P30.00 a month for the wife and each of the unmarried minor children. Petitioner's monthly pension was, however,
increased only on January 15, 1971, and by 25% of the increases provided by law, due to the fact that it was only on said date that
funds were released for the purpose, and the amount so released was only sufficient to pay only 25% of the increase.
7. On January 15, 1972, more funds were released to implement fully RA 5753 and snow payment in full of the benefits thereunder
from said date.
WHEREFORE, it is respectfully prayed that a decision be rendered in accordance with the foregoing stipulation of facts. It is likewise
prayed that the parties be granted a period of (15) days within which to file their memoranda. 2
Upon consideration of the foregoing and the Memoranda filed by the parties, the lower Court rendered judgment against therein
respondent Board of Administrators, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered for petitioner and the respondents are ordered to make
petitioner's pension effective as of December 18, 1955 at the rate of P50.00 per month; and the rate increased to P100.00 per
month plus P10.00 per month each for his ten unmarried minor children below 18 years of age from June 22, 1957 up to August
7..1968; to pay the difference of P100.00 per month plus P30.00 per month and P20.00 per month each for his ten unmarried
children below 18 years of age from June 22, 1969 up to January 15, 1971, the difference of P75.00 per month plus P22.50 per
month for his wife and P20.00 per month each for his unmarried nor children then below 18 years of age from January 16, 1971 up
to December 31, 1971.
SO ORDERED.
Manila, October 25, 1973. 3
In its Petition before this Court, the Board of Administrators of the Philippine Veterans Administration, through the Office of the
Solicitor General, challenges the abovementioned decision of the Court a quo on the following grounds:
1. The lower Court erred in ordering the petitioners to retroact the effectivity of their award to respondent Calixto V. Gasilao of full
benefits under section 9 of RA 65 to December 18, 1955, the date when his application was disapproved due to dis failure to
complete his supporting papers and submit evidence to establish his service connected illness, and not August 8, 1968, the date
when he was able to complete his papers and allow processing and approval of his application.
2. The lower Court erred in ordering payment of claims which had prescribed.
3. The lower Court erred in allowing payment of claims under a law for which no funds had been released. 4
The question raised under the first assigned error is: When should private respondent Gasilao's pension benefits start
The lower Court, quoting excerpts from Our decision in Begosa vs. Chairman Philippine Veterans Administration, 5ruled that
Gasilao's pension benefits should retroact to the date of the disapproval of his claim on December 18, 1955, and not commence
from the approval thereon on August 8, 1968 as contended by the Board of Administrators.
Petitioner maintains the stand that the facts of the Begosa case are not similar to those of the case at bar to warrant an application
of the ruling therein on the retroactivity of a pension award to the date of prior disapproval of the claim. In the Begosa case, the
Supreme Court speaking thru then Associate Justice, now Chief Justice Fernando, affirmed the decision of the lower Court, and ruled
in part as follows:
From the facts just set out, it will be noted that plaintiff filed his said claim for disability pension as far back as March 4, 1955; that it
was erroneously disapproved on June 21, 1955, because his dishonorable discharge from the Army was not a good or proper ground
for the said disapproval and that on reconsideration asked for by him on November 1, 1957, which he continued to follow up, the
Board of Administrators, Philippine Veterans Administration, composed of herein defendants, which took over the duties of the
Philippine Veterans Board, finally approved his claim on September 2, 1964, at the rate of P30.00 a month. 6
Had it not been for the said error, it appears that there was no good ground to deny the said claim, so that the latter was valid and
meritorious even as of the date of its filing on March 4, 1955, hence to make the same effective only as of the date of its approval on
September 2, 1964 — according to defendant's stand — would be greatly unfair and prejudicial to plaintiff. 7
In other words, the favorable award which claimant Begosa finally obtained on September 2, 1964 was made to retroact to the date
of prior disapproval of the claim on June 2, 1955 for the reason that such disapproval was erroneously made.
In the instant case, on the other hand, the herein claim of respondent Gasilao was denied on December 18, 1955 because of his
"failure to complete his supporting papers and submit evidence to establish his service-connected illness" (Stipulation of Facts, Par.
4, ante). Nonetheless, the Stipulation of Facts admitted in par. 1 that "Petitioner was a veteran in good standing during the last
World War that took active participation in the liberation drive against the enemy, and due to his military service, he was rendered
disabled." From this admission in par. 1, it can reasonably be deduced that the action on the claim of Gasilao was merely suspended
by the Philippine Veterans Administration pending the completion of the required supporting papers and evidence to establish his
service-connected illness. Hence, Our ruling in the Begosa case making retroactive the award in favor of the veteran still holds.
Republic Act No. 65 otherwise known as the Veterans' Bill of Rights, as amended, does not explicitly provide for the effectivity of
pension awards. However, petitioner seeks to remedy this legislative deficiency by citing Section 15 of the law which in part reads as
follows:
Sec. 15. Any person who desires to take advantage of the rights and privileges provided for in this Act should file his application with
the Board ...
Petitioner contends that since the foregoing section impliedly requires that the application filed should first be approved by the
Board of Administrators before the claimant could receive his pension, therefore, an award of pension benefits should commence
form the date of he approval of the application.
This stand of the petitioner does not appear to be in consonance with the spirit and intent of the law, considering that Republic Act
65 is a veteran pension law which must be accorded a liberal construction and interpretation in order to favor those entitled to the
rights, privileges and benefits granted thereunder, among which are the right to resume old positions in the government,
educational benefits, the privilege to take promotional examinations, a life pension for the incapacitated, pensions for widow and
children, hospitalization and medical care benefits.
As it is generally known, the purpose of Congress in granting veteran pensions is to compensate, as far as may be, a class of men
who suffered in the service for the hardships they endured and the dangers they encountered, 8 and more particularly, those who
have become incapacitated for work owing to sickness, disease or injuries sustained while in line of duty. 9 A veteran pension law is,
therefore, a governmental expression of gratitude to and recognition of those who rendered service for the country, especially
during times of war or revolution, by extending to them regular monetary aid. For this reason, it is the general rule that a liberal
construction is given to pension statutes in favor of those entitled to pension. Courts tend to favor the pensioner, but such
constructional preference is to be considered with other guides to interpretation, and a construction of pension laws must depend
on its own particular language. 10
Significantly, the original text of RA 65 provided that:
Sec. 6. It also shall be the duty of the Board (then the Philippine Veterans Board) to pass upon the merits and qualifications of
persons applying for the rights and/or privileges extended by this Act, pursuant to such rules as it may adopt to insure the
speedy and honest fulfillment of its aims and purposes. (Emphasis supplied.)
The foregoing provision clearly makes it incumbent upon the implementing Board to carry out the provisions of the statute in the
most expeditious way possible and without unnecessary delay. In the Begosa case, it took nine years (from June 2, 1955 to
September 2, 1964) before the claimant finally obtained his pension grant, whereas in the instant case, it took about twelve years
(from December, 1955 to August 8, 1968) for respondent Gasilao to receive his pension claim. To Our mind, it would be more in
consonance with the spirit and intentment of the law that the benefits therein granted be received and enjoyed at the earliest
possible time by according retroactive effect to the grant of the pension award as We have done in the Begosa case.
On the other hand, if the pension awards are made effective only upon approval of the corresponding application which would be
dependent on the discretion of the Board of Administrators which as noted above had been abused through inaction extending to
nine years, even to twelve years, the noble and humanitarian purposes for which the law had enacted could easily be thwarted or
defeated.
On the issue of prescription, petitioner cites Article 1144 of the Civil Code which provides:
Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law; and
(3) Upon a judgment.
Petitioner now contends that since the action was filed in the lower Court on April 13, 1973 seeking the payment of alleged claims
which have accrued more than ten (10) years prior to said date, the same should have been disallowed as to the prescribed claims.
The obligation of the government to pay pension was created by law (Sec. 9, R.A. 65). Hence, the ten-year prescriptive period should
be counted from the date of passage of the law which is September 25, 1946, the reason being that it is only from said date that
private respondent could have filed his application. Taking September 25, 1946 as the point of reference, the actual filing of Gasilao's
application on July 23, 1955 was clearly made within and effectively interrupted the prescriptive period. It is not the date of the
commencement of the action in the lower Court which should be reckoned with, for it was not on said date that Gasilao first sought
to claim his pension benefits, but on July 23, 1955 when he filed his application with the defunct Philippine Veterans Board. As We
had the occasion to state in the case of Vda. de Nator vs. C.I.R., 11 "the basis of prescription is the unwarranted failure to bring the
matter to the attention of those who are by law authorized to take cognizance thereof."
The Stipulation of Facts do not show and neither do the records indicate when Gasilao attempted to reinstate his claim after the
same was disapproved on December 18, 1955. What is evident is that he did take steps to reinstate his claim because on August 8,
1968, herein petitioner finally approved his application. We find it more logical to presume that upon being properly notified of the
disapproval of his application and the reasons therefor, Gasilao, being the interested party that he was proceeded to work for the
completion of the requirements of the Board, as in fact he was successful in meeting such requirements. There is nothing in the
record to show intentional abandonment of the claim to as to make the prescriptive period continue to run again.
The third ground relied upon in support of this Petition involves the issue as to whether or not the payment of increased pension
provided in the amendatory Act, R.A. 5753, could be ordered, even where there was no actual release of funds for the purpose,
although the law itself expressly provided for an appropriation. In the case of Board of Adminitrators, Philippine Veterans
Administration vs. Hon. Agcoili, et al., 12 penned by Chief Justice Fred Ruiz Castro, the same issue was treated in this wise:
... The inability of the petitioner to pay Abrera the differential of P60.00 in monthly pension is attributed by it, in its own words, "to
the failure of Congress to appropriate the necessary funds to cover all claims for benefits, pensions and allowances." And the
petitioner states that it has "no alternative but to suspend (full implementation of said laws until such time, as sufficient funds have
been appropriated by Congress" to cover the total amount of all approved claims.
We find the explanation of the petitioner satisfactory, but we nevertheless hold that as a matter of law Abrera is entitled to a
monthly pension of P120.00 from January 1, 1972 when Republic Act 5753 was implemented up to the present, if his physical
disability rating has continued and continues to be 60%. Payment to him of what is due him from January 1, 1972 must however
remain subject to the availability of Government funds duly set aside for the purpose and subject further periodic re-rating of his
physical disability.
But even if we have thus defined the precise terms, nature and scope of the entitlement of the respondent Abrera, for the guidance
of petitioner, we nevertheless refrain from ordering the petitioner to pay the amount of P120.00 per month from January 1, 1972
that is due to the respondent by virtue of the mandate of section 9 of Republic Act 65, as amended by Republic Act 5753, because
the Government has thus far not provided the necessary funds to pay all valid claims duly approved under the authority of said
statute. 13 (Emphasis supplied.)
ACCORDINGLY, the judgment of the Court a quo is hereby modified to read as follows:
WHEREFORE, premises considered, the Board of Administrators of the Philippine Veterans Administration (now the Philippine
Veterans Affairs Office) is hereby ordered to make Gasilao's pension effective December 18, 1955 at the rate of P50-00 per month
plus P10.00 per month for each of his then unmarried minor children below 18, and the former amount increased to P100.00 from
June 22, 1957 to August 7, 1968.
The differentials in pension to which said Gasilao, his wife and his unmarried minor children below 18 are entitled for the period
from June 22, 1969 to January 14, 1972 by virtue of Republic Act No. 5753 are hereby declared subject to the availability of
Government funds appropriated for the purpose.
SO ORDERED.
CASE DIGEST: BOARD OF ADMINISTRATORS OF PVA V BAUTISTA
BOARD OF ADMINISTRATORS OF PVA V BAUTISTA
G.R. No. L-37867
Facts:
In 1955, private respondent Gasilao, a war veteran during the World War II, filed a claim for disability before the public petitioners
under Section 9 of RA 65. The claim was denied. Meanwhile, the said act was amended by RA 1362, including now benefits for the
pensioner’s unmarried children below 18 years. Another amendment was made in 1957, increasing the life pension of the veteran
but retaining the same benefits for his children.
In 1968, after 12 years following the disapproved claim, it was reconsidered and the claim was finally approved. The respondent,
thereafter, requested from the petitioners that his claim be made retroactive from the time his original claim was disapproved. The
petitioners did not act on his request. Private respondent claims that he was deprived of his right to the pension from the time his
claim was disapproved until the time of reconsideration. He filed a petition before the lower court and was granted.
The petitioners through the Solicitor General challenged the decision of the lower court. Hence, this petition.

Issue:
Whether or not the claim for pension works in the retroactive.

Held:
Yes. Taking September 25, 1946 as the point of reference, the original claim of the respondent was within 10 years, as prescribed by
law. It would be more in consonance with the spirit and intention of the law that the benefits therein granted be received and
enjoyed at the earliest possible time by according retroactive effect to the grant of the pension award. If the pension awards are
made effective only upon approval of the corresponding application which would be dependent on the discretion of the Board of
Administrators which as noted above had been abused through inaction extending to nine years, even to twelve years, the noble
and humanitarian purposes for which the law had enacted could easily be thwarted or defeated.
S