NOTES ON POLITICAL LAW
Excerpts from the 2017 Decisions of the Supreme Court
Compiled by
CARLO L. CRUZ
STATE IMMUNITY
‘The fundamental law of the land provides that the State cannot be sued without its consent. It is
a fundamental postulate of constitutionalism flowing from the juristic concept of sovereignty
that the State, as well as its government, is immune from suit unless it gives its consent. The
rule, in any case, is not absolute for it does not say that the State may not be sued under any
circumstances. The doctrine only conveys that "the state may not be sued without its consent;"
its clear import then is that the State may at times be sued. Suits filed against government
agencies may either be against incorporated or unincorporated agencies. in case of incorporated
agencies, its suability depends upon whether its own organic act specifically provides that it can
sue and be sued in Court.
As the State's engineering and construction arm, the DPWH exercises governmental functions
that effectively insulate it from any suit, much less from any monetary liability. The
construction of the Project which was for the purpose of minimizing the perennial problem of
flood in the area of Tunggol, Montawal, Maguindanao, is well within the powers and functions
of the DPWH as mandated by the Administrative Code of 1997.
Hence, the Doctrine of Non-Suability clothes the DPWH from being held responsible for alleged
damages it performed in consonance with its mandated duty. Nowhere does it appear in the
petition that the State has given its consent, expressly or impliedly, to be sued before the courts.
The failure to allege the existence of the State's consent to be sued in the complaint is a fatal
defect, and on this basis alone, should cause the dismissal of the complaint. (Buisan v.
Commission on Audit and Department of Public Works and Highways, G.R. No, 212376, January 31,
2017)
Besides, case law states that the "absence of opposition from government agencies is of no
controlling significance because the State cannot be estopped by the omission, mistake or error
of its officials or agents. Neither is the Republic barred from assailing the decision granting the
petition for reconstitution [or correction of title, as in this case] if, on the basis of the law and the
evidence on record, such petition has no merit." Moreover, "in civil cases, the party having the
burden of proof must produce a preponderance of evidence thereon, with plaintiff having to
rely on the strength of his own evidence and not upon the weakness of the defendants."
(Republic v. Galeno, G.R. No. 215009, January 23, 2017)
While estoppel generally docs not apply against government, especially when the case involves
the collection of taxes, an exception can be made when the application of the rule will cause
injustice against an innocent party.Respondent had already acquired a vested right on the tax classification of its San Mig Light as
a new brand. To allow petitioner to change its position will result in deficiency assessments in
substantial amounts against respondent to the latter's prejudice. (Commissioner of Internal
Revenue v. San Miguel Corporation, G.R. Nos. 205045 & 205723, January 25, 2017)
The fact that the assailed’ Notice of Disallowance was issued only after 15 years from the
implementation of Circular No. 25, and only after 10 years from the implementation of
Resolution No. 0246 did not preclude the COA from acting as it did. The general rule is that the
Government is never estopped by the mistake or error of its agents. If that were not so, the
Government would be tied down by the mistakes and blunders of its agents, and the public
would unavoidably suffer. Neither the erroneous application nor the erroneous enforcement of
the statute by public officers can preclude the subsequent corrective application of the statute.
Exceptions to the general rule of non-estoppel may be allowed only in rare and unusual
circumstances in which the interests of justice clearly require the application of estoppel. For
‘one, estoppel may not be invoked if its application will operate to defeat the effective
implementation of a policy adopted to protect the public.
Here, however, no exceptional circumstance existed that warranted the application of estoppel
against the COA. Accordingly, the Court cannot declare the disallowance invalid on that basis.
(Development Bank of the Philippines v. Commission on Audit, GR. No. 216538; Antonio v.
Commission on Audit, G.R. No. 216954, April 18, 2017)
PARENS PATRIAE
‘The duty to care for the elderly and the disabled lies not only upon the State, but also on the
‘community and even private entities. As to the State, the duty emanates from its role as parens
patriae which holds it under obligation to provide protection and look after the welfare of its
people especially those who cannot tend to themselves. Parens patriae means parent of his or her
country, and refers to the State in its role as "sovereign," or the State in its capacity as a provider
of protection to those unable to caré for themselves. In fulfilling this duty, the State may resort
to the exercise of its inherent powers: police power, eminent domain and power of taxation.
(Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No.
199669, April 25, 2017)
SEPARATION OF POWERS
‘The task of determining probable cause is lodged with the public prosecutor and ultimately, the
Secretary of Justice. Under the doctzine of separation of powers, courts have no right to directly
decide matters over which full discretionary authority has been delegated to the Executive
Branch of the Government. Thus, we have generally adopted a policy of non-interference with
the executive determination of probable cause. Where, however, there is a clear case of grave
abuse of discretion, courts are allowed to reverse the Secretary of Justice's findings and
conclusions on matters of probable cause. (Forietrans Manufacturing Corporation v. Davidoff Et
Cia, SA, G.R. No. 197482, March 6, 2017)
‘Ament the question regarding the shift from tax credit to tax deduction, suffice it is to say that it
is within the province of Congress to do so in the exercise of its legislative power. It has the
2authority to choose the subject of legislation, outline the effective measures to achieve its
declared policies and even impose penalties in case of non-compliance. It has the sole discretion
to decide which policies to pursue and devise means to achieve them, and courts often do not
interfore in this exercise for as long as it does not transcend constitutional limitations. "In
performing this duty, the legislature has no guide but its judgment and discretion and the
wisdom of experience." (Southern Luzon Drug Corporation v. The Department of Social Welfare and
Development, G.R. No. 199669, April 25, 2017)
DELEGATION OF POWER
‘There is, of course, nothing to prevent Congress from again adopting a policy that prorates the
effectivity of basic personal and additional exemptions. This policy, however, must be explicitly
provided for by law to amend the prevailing law, which provides for full-year treatment. As
already pointed out, R.A. 9504 is totally silent on the matter. This silence cannot be presumed
by the BIR as providing for a half-year application of the new exemption levels. Such
presumption is unjust, as incomes do not remain the same from month to month, especially for
the MWEs.
Therefore, there is no legal basis for the BIR to reintroduce the prorating of the new personal
and additional exemptions. In so doing, respondents overstepped the bounds of their rule~
making power. It is an established rule that administrative regulations are valid only when
these are consistent with the law. Respondents cannot amend, by mere regulation, the laws they
administer. To do so would violate the principle of non-delegability of legislative powers.
‘The prorated application of the new set of personal and additional exemptions for the year
2008, which was introduced by respondents, cannot even be justified under the exception to the
‘canon of non-delegability; that is, when Congress makes a delegation to the executive branch.
‘The delegation would fail the two accepted tests for a valid delegation of legislative power; the
completeness test and the sufficient standard test. The first test requires the law to be complete
in all its terms and conditions, such that the only thing the delegate will have to do is to enforce
it. The sufficient standard test requires adequate guidelines or limitations in the law that map
out the boundaries of the delegate's authority and canalize the delegation.
{In this case, respondents went beyond enforcement of the law, given the absence of a provision
in R.A. 9504 mandating the prorated application of the new amounts of personal and additional
exemptions for 2008. Further, even assuming that the law intended a prorated application, there
are no parameters set forth in R.A. 9504 that would delimit the legislative power surrendered
by Congress to the delegate. In contrast, Section 23(d) of the 1939 Tax Code authorized not only
the prorating of the exemptions in case of change of status of the taxpayer, but also authorized
the Secretary of Finance to prescribe the corresponding rules and regulations. (Soriano v.
Secretary of Finance, G.R. No. 184450, January 24, 2017)
Administrative Bodies
The powers of an administrative body are classified into two fundamental powers: quasi-
legislative and quasi-judicial. Quasi-legislative power, otherwise known as the power of
subordinate legislation, has been defined as the authority delegated by the lawmaking body to
3the administrative body to adopt rules and regulations intended to carry out the provisions of
law and implement legislative policy. *[A] legislative rule is in the nature of subordinate
legislation, designed to implement a primary legislation by providing the details thereof." The
exercise by the administrative body of its quasi-legislative power through the promulgation of
regulations of general application does not, as a rule, require notice and hearing. The only
exception being where the Legislature itself requires it and mandates that the regulation shall be
based on certain facts as determined at an appropriate investigation.
‘Quasi-judicial power, on the other hand, is known as the power of the administrative agency to
determine questions of fact to which the legislative policy is to apply, in accordance with the
standards laid down by the law itself. As it involves the exercise of discretion in determining,
the rights and liabilities of the parties, the proper exercise of quasi-judicial power requires the
concurrence of two elements: one, jurisdiction which must be acquired by the administrative
ody and two, the observance of the requirements of due process, that is, the right to notice and
hearing.
(On the argument that the certification proceedings were conducted by the FDA in the exercise
of its "regulatory powers" and, therefore, beyond judicial review, the Court holds that it has the
power to review all acts and decisions where there is a commission of grave abuse of discretion.
No less than the Constitution decrees that the Court must exercise its duty to ensure that no
grave abuse of discretion amounting to lack or excess of jurisdiction is committed by any branch
or instrumentality of the Government. Such is committed when there is a violation of the
constitutional mandate that "no person is deprived of life, liberty, and property without due
process of law." The Court's power cannot be curtailed by the FDA's invocation of its regulatory
power,
In so arguing, the respondents cited Atty. Carlo L. Cruz in his book, Philippine Administrative
Law.
Lest there be any inaccuracy, the relevant portions of the book cited by the respondents are
hereby quoted as follows:
B, The Quasi-Judicial Power
2. Determinative Powers
‘To better enable the administrative body to exercise its quasi judicial authority, itis also
vested with what is known as determinative powers and functions.
Professor Freund classifies them generally into the enabling powers and the directing
powers,
‘The latter includes the dispensing, the examining, and the summary powers.‘The enabling powers are those that permit the doing of an act which the law undertakes
to regulate and which would be unlawful with government approval. The most
common example is the issuance of licenses to engage in a particular business or
‘occupation, like the operation of a liquor store or restaurant. xx.
From the above, two things are apparent: one, the "enabling powers" cover "regulatory powers"
as defined by the respondents; and two, they refer to a subcategory of a quasi-judicial power
which, as explained in the Decision, requires the compliance with the twin requirements of
notice and hearing. Nowhere from the above-quoted texts can it be inferred that the exercise of
"regulatory power" places an administrative agency beyond the reach of judicial review. When
there is grave abuse of discretion, such as denying a party of his constitutional right to due
process, the Court can come in and exercise its power of judicial review. It can review the
challenged acts, whether exercised by the FDA in its ministerial, quasi-judicial or regulatory
power. In the past, the Court exercised its power of judicial review over acts and decisions of
agencies exercising their regulatory powers, such as DPWH, TRB, NEA, and the SEC, among
others. In Diocese of Bacolod v. Commission on Elections, the Court properly exercised its power of
judicial review over a Comelec resolution issued in the exercise of its regulatory power.
(Alliance for the Family Foundation, Philippines, Inc. v. Garin, Resolution on Partial MR, G.R. No.
217872/G.R. No, 221866. April 26, 2017)
The FDA wants the Court to consider that, as a body, it has a distinct and separate personality
from the Director-General, who exercises quasi-judicial power. The Court cannot accommodate
the position of the respondents. Section 6(a) of R.A. No. 3720, as amended by Section 7 of R.A.
No. 9711, provides that "(a) The FDA shall be headed by a director-general with the rank of
undersecretary, xxx." How can the head be separated from the body? (Alliance for the Family
Foundation, Philippines, Inc. v. Garin, Resolution on Partial MR, G.R. No. 217872/G.R. No. 221866.
April 26, 2017)
(On this score, it should be clarified that the Decision simply enjoined the respondents from
registering, recertifying, procuring, and administering only those contraceptive drugs and
devices which were the subjects of the petitioners’ opposition, specifically Implanon and
Implanon NXT. It never meant to enjoin the processing of the entire gamut of family planning
supplies that have been declared as unquesticnably non-abortifacient, Moreover, the injunction
issued by the Court was only subject to the condition that the respondents afford the petitioners
a genuine opportunity to their right to due process.
[As the Decision explained, the Court cannot lift the TRO prior to the summary hearing to be
conducted by the FDA. To do so would render the summary hearing an exercise in futility.
Specifically, the respondents would want the Court to consider their argument that Implanon
and Implanon NXT have no abortifacient effects. According to them, "the FDA tested these
devices for safety, efficacy, purity, quality, and non-abortiveness prior to the issuance of
certificates of registration and recertification, and after the promulgation of Imbong,” The Court,
however, cannot make such determination or pronouncement at this time. To grant its prayer to
lift the TRO would be premature and presumptuous. Any declaration by the Court at this time
would have no basis because the FDA, which has the mandate and expertise on the matter, has
to first resolve the controversy pending before its office. (Alliance for the Family Foundation,Philippines, Inc. v. Garin, Resolution on Partial MR, G.R. No. 217872/G.R. No. 221866. April 26,
2017)
‘The need for a certification of non-forum shopping to be attached to respondent's appeal before
the Office of the Director General of the Intellectual Property Office is established. xx. These
requirements notwithstanding, the Intellectual Property Office's own Regulations on Inter Parles
Proceedings (which governs petitions for cancellations of a mark, patent, utility model,
industrial design, opposition to registration of a mark and compulsory licensing, and which
were in effect when respondent filed its appeal) specify that the Intellectual Property Office
"shall not be bound by the strict technical rules of procedure and evidence." xxx. Given these
premises, it was an error for the Director General of the Intellectual Property Office to have
been so rigid in applying a procedural rule and dismissing respondent's appeal. (Palao v.
Florentino II International, Inc., G.R. No. 186967, January 18, 2017)
Section 50 of R.A. No. 6657, in part, provides that the DAR is vested with "primary jurisdiction to
detertine and adjudicate agrarian reform matters" and “exclusive original jurisdiction over all matters
involving the implementation of agrarian reform" except those falling under the jurisdiction of the
Department of Agriculture (DA) and the Department of Environment and Natural Resources.
Section 7, on the other hand, confers "special" and "original and exclusive" jurisdiction to the
SAC over all petitions of landowners for the determination of just compensation. (Mateo v.
Department of Agrarian Reform, G.R. No. 186339, February 15, 2017)
.uthe jurisdiction conferred to the DARAB is limited to agrarian disputes, which is subject to the
precondition that there exist tenancy relations between the parties. This delineation applies in
connection with cancellation of the CLOAs. In Valcurza v. Tamparong, Jr, we stated:
"Thus, the DARAB has jurisdiction over cases involving the cancellation of registered
CLO As relating to an agrarian dispute between landowners and tenants. However, in
cases concerning the cancellation of CLO As that involve parties who are not
agricultural tenants or lessees-cases related to the administrative implementation of
agrarian reform laws, rules and regulations ~ the jurisdiction is with the DAR, and not
the DARAB.
Here, petitioner is correct in alleging that it is the DAR and not the DARAB that has
jurisdiction, First, the issue of whether the CLOA issued to petitioners over
respondent'sland should be cancelled hinges on that of whether the subject landholding
is exempt from CARP coverage by virtue of two zoning ordinances. This question
involves the DAR's determination of whether the subject land is indeed exempt from
CARP coverage - a matter involving the administrative implementation of the CARP
Law, Second, respondent's complaint does not allege that the prayer for the cancellation
‘of the CLOA was in connection with an agrarian dispute. The complaint is centered on
the fraudulent acts of the MARO, PARO, and the regional director that led to the
issuance of the CLOA. (Emphasis supplied; citations omitted.) (Union Bank of the
Philippines v. Hon. Regional Agrarian Reform Officer, G.R. No, 200369, March 1, 2017)
‘An agreement to submit to voluntary arbitration for purposes of vesting jurisdiction over a
construction dispute in the Construction Industry Arbitration Commission (CIAC) need not becontained in the construction contract, or be signed by the parties. It is enough that the
agreement be in writing. (Federal Builders, Inc. V. Power Factors, Inc., G.R. No. 211504, March 8,
2017)
Worthy to note is that the jurisdiction of the CIAC is over the dispute, not over the contract
between the parties. Section 2.1, Rule 2 of the CIAC Revised Rules particularly specifies that the
CIAC has original and exclusive jurisdiction over construction disputes, whether such disputes
arise from ot are merely connected with the construction contracts entered into by parties, and
whether such disputes arise before or afer the completion of the contracts. Accordingly, the
‘execution of the contracts and the effect of the agreement to submit to arbitration are different
tatters, and the signing or non-signing of one does not necessarily affect the other. In other
words, the formalities of the contract have nothing to do with the jurisdiction of the CIAC.
(Federal Builders, Inc. V. Power Factors, Inc., G.R. No. 211504, March 8, 2017)
Jurisdiction over annulment of judgment of quasi-judicial bodies
Prior to Balas Pambansa Bilang 129|(BP 129), we had the chance to rule on the question of
jurisdiction over the annulment of judgment of quasi judicial bodies in BF Northwest
Homeowners Association, Inc. v. Intermediate Appellate Court. In that case, we held that regional
‘trial courts can annul the judgment of quasi-judicial bodies which are of the same rank as courts
of first instance. This ruling established two things: first, an action for the annulment of
judgment is a remedy available against a void judgment of a quasi-judicial body. Second,
regional trial courts had jurisdiction whenever the quasi-judicial body involved is of inferior
rank.
With the passage of BP 129, this doctrine appears to have been altered. Section 9(a) of BP 129
expressly vested the CA with jurisdiction over annulment of judgments of regional trial courts.
Notably, it does not mention jurisdiction over annulment of judgment of quasi-judicial bodies.
In fact, quasi-judicial bodies are mentioned only in Section 9(3) which provides for the CA's
appellate jurisdiction over their judgments, orders, resolutions and awards.
In 1997, the new rules of civil procedure took effect. These rules provided, for the first time, a
remedy called annulment of judgment on the ground of extrinsic fraud and lack of jurisdiction.
Rule 47, however, limits its application to regional trial courts and municipal trial courts.
‘We had the opportunity to apply these relevant provisions in the 2000 case of Cole v. Court of
Appeals. In this case, we explained that the CA has no jurisdiction over a petition for annulment
of judgment under Rule 47 against a decision of the Housing and Land Use Regulatory Board, a
quasi-judicial body. Rule 47 allows a resort to the CA only in instances where the judgment
challenged was rendered by regional trial courts. This was also the import of our ruling in Eloee
Farms, Inc. v. Semillano when we held that the CA has no jurisdiction over the annulment of
judgment of the National Labor Relations Commission.
‘This was reiterated in the 2005 case Galang ». Court of Appeals which dealt with decisions
rendered by the SEC. In that case, we categorically ruled that the CA has no jurisdiction over
annulment of a void judgment rendered by the SEC since Rule 47 of the Rules of Court clearly
states that this jurisdiction only pertains to judgments rendered by regional trial courts.
7Springfield Development Corporation, Inc. 0. Presiding Judge, RTC, Misamis Oriental, Br. 40, Cagayan
de Oro City summarized our foregoing rulings in determining whether the CA has jurisdiction
to annul a void judgment of the Department of Agrarian Reform Adjudication Board (DARAB).
This case was a significant development in the then growing jurisprudence which all merely
said that an action to annul a judgment of a quasi-judicial body cannot be brought before the
CA, and which did not categorically state whether the action may be filed before any other
court,
In Springfield, we explained that regional trial courts have no jurisdiction to annul judgments of
quasi-judicial bodies of equal rank. It then proceeded to state that the CA also has no
jurisdiction over such an action. Springfield emphasized that Section 9 of BP 129 and Rule 47 of
the Rules of Court both state that the CA has jurisdiction over annulment of judgments of
regional trial courts only. We ruled in this case that the "silence of BP. Blg. 129 on the
jurisdiction of the CA to annul judgments or final orders and resolutions of quasi-judicial
bodies like the DARAB indicates its lack cf such authority." While this case explained that
neither the regional tral courts nor the CA possess jurisdiction over an action to annul the
judgment of quasi-judicial bodies, it did not categorically state that the remedy itself does not
exist in the first place, Notably, we disposed of this case by remanding the action filed before
1us-a special civil action for prohibition to the CA because the matter required a determination of
facts which this Court cannot do. We then held that the CA may rule upon the validity of the
judgment by noting that a void judgment may be collaterally attacked in a proceeding such as
an action for prohibition.
‘The seeming confusion in the string of cases pertaining to the jurisdiction over petitions for
annulment of judgment of quasi-judicial bodies is clarified when these cases are read in
conjunction with Macalalag v. Ombudsman. While we repeated our consistent ruling that Rule 47
of the Rules of Court only applies to judgments of regional trial courts, Macalalag also explains
that an action for the annulment of judgment is similar in nature to an appeal-both are merely
statutory. No right exists unless expressly granted by law. In Macalalag, we implied that the key
to determining whether this remedy may be had and where such action may be filed is to
ascertain whether there is a law expressly allowing a resort to this action before a particular
tribunal. This then requires an examination of the laws and rules relevant to a specified quasi-
judicial body. While it is correct that both the regional trial courts and the CA cannot take
cognizance of a petition for annulment of judgment of a quasi-judicial body under Rule 47 of
the Rules of Court, they may nevertheless do so, if a law categorically provides for such a
remedy and clearly provides them with jurisdiction.
Applying this to the present case, we rule that there is no law at the time pertinent to this case,
which allows the filing of a petition for annulment of judgment before the regional trial courts
and the CA to set aside a void judgment of the SEC on the basis of lack of jurisdiction. We
hasten to emphasize, however, that this pertains only to cases filed prior to Republic Act No.
8799 (RA 8799) which transferred the jurisdiction over intra-corporate disputes to regional trial
courts designated as commercial courts. As to the latter, Rule 47 clearly applies.
This leads to the conclusion that the RTC Petition is not the proper remedy to assail the SEC
Decision. Since it is an action for the annulment of judgment, the RTC Petition cannot prosper
as we have already ruled that this remedy is not available in this particular case.
8However, the error in Cruz's RTC Petition does not automatically warrant a dismissal of these
proceedings. We rule that the SEC, in nullifying the sale between Napal and Cruz and in
ordering the cancellation of Cruz's TCTs in favor of NIDSLAND, overstepped its jurisdiction.
‘The SEC Decision was rendered with grave abuse of discretion. (Imperial v. Hon. Armes, G.R. No.
178842, January 30,2017)
Indeed, our jurisprudence has leaned in favor of recognizing the jurisdiction of quasi-judicial
bodies. However, this jurisdiction must always be viewed within the context of its grant. The
law vests quasi-judicial powers to administrative bodies over matters that require their
particular competence and specialized expertise. This grant of jurisdiction is not and should not
be justification to deprive courts of law of their jurisdiction as determined by law and the
Constitution. Courts of law are the instruments for the adjudication of legal disputes. In a
system of government where courts of law exist alongside quasi-judicial bodies, the need to
harmonize apparent conflicts in jurisdiction require a determination of whether the matter to be
resolved pertains to a general question of law which belongs to ordinary courts or whether it
refers to a highly specialized question that can be better resolved by a quasi-judicial body in
accordance with its power vested by law.
In overstepping its jurisdiction, the SEC committed grave abuse of discretion. (Imperial v. Hon.
‘Armes, G.R. No, 178842, january 30, 2017)
Doctrine of Primary Jurisdiction
In their Motion for Reconsideration, petitioners maintain that it isthe National Commission on Indigenous Peoples
(NCP), not the regular courts, which has jurisdiction over disputes and controversies involving ancestral domain
of the indigenous Cultural Communities (GCs) and Indigenous Peoples (IPs) regardless ofthe parties involved.
Primary jurisdiction is the power and authority vested by the Constitution or by statute upon
an administrative body to act upon a matter by virtue of its specific competence. (Unduran v.
Aberasturi, Resolution on the MR, G.R. No. 181284, April 18, 2017)
To recall, the ponencia has held that pursuant to Section 66 of the IPRA, the NCIP shall have
jurisdiction over claims and disputes involving rights of ICCs/IPs only when they arise
between or among parties belonging to the same ICC/TP group. When such claims and disputes
arise between or among parties who do not belong to the same ICC/IP group, the case shall fall
‘under the jurisdiction of the regular courts, instead of the NCIP. Thus, even if the real issue
involves a dispute over a land which appears to be located within the ancestral domain of an
ICC/IP, it is not the NCIP but the RTC which has the power to hear, try and decide the case. In
exceptional cases under Sections 52, 54 and 62 of the IPRA, the NCIP shall still have jurisdiction
over such claims and disputes even if the parties involved do not belong to the same ICC/IP
(group. 200%.
After a circumspect review of the relevant laws and jurisprudence, the Court maintains that the
jurisdiction of the NCIP under Section 66 of the IPRA is limited to claims and disputes
involving rights of IPs/ICCs where both parties belong to the same ICC/IP group, but if such
claims and disputes arise between or among parties who do not belong to the same ICC/IP
group, the proper regular courts shall have jurisdiction. 200%.
9Tax Exemptions
The issue of whether SLMC is liable for income tax under Section 27(B) of the 1997 NIRC insofar
as its revenues from paying patients are concemed has been settled in G.R. Nos. 195909 and
1195960 (Commissioner of Internal Revenue v. St. Luke's Medical Center, Inc.), where the Court ruled
that:
cox We hold that Section 27(B) of the NIRC does not remove the income tax exemption of
proprietary non-profit hospitals under Section 30(B) and (G). Section 27(B) on one hand, and
Section 30(E) and (G) on the other hand, can be construed together without the removal of such
tax exemption. The effect of the introduction of Section 27(B) is to subject the taxable income of
‘two specific institutions, namely, proprietary non-profit educationel institutions and proprietary
non-profit hospitals, among the institutions covered by Section 30, to the 10% preferential rate
under Section 27(B) instead of the ordinary 30% corporate rate under the last paragraph of
Section 30 in relation to Section 27(4)(1}.
Section 27(B) of the NIRC imposes a 10% preferential tax rate on the income of (i) proprietary
non-profit educational institutions and (2) proprietary non-profit hospitals. The only
‘qualifications for hospitals are that they must be proprietary and non-profit. Proprietary’ means
private, following the definition of a ‘proprictary educational institution’ as 'any private school
‘maintained and administered by private individuals or groups' with a government permit. 'Non-
‘profit’ means no net income or assct accrues to or benefits any member or specific person, with all.
‘the net income or asset devoted to the institution's purposes and all its activities conducted not
for profit.
'Non-profit’ does not necessarily mean ‘charitable’ In Collector of Internal Revenue v. Club Filipino,
Inc, de Cebu, this Court considered as non-profit a sports club organized for rerreation and
entertainment of its stockholders and members. The club was primarily funded by membership
fees and dues. If it had profits, they were used for overhead expenses and improving its golf
course. The club was non-profit because of its purpose and there was no evidence that it was
engaged in a profit-making enterprise.
‘The sports club in Club Filipino, inc. de Cebu may be non-profit, but it was not charitable. ‘The
Court defined ‘charity’ in Lung Center of the Philippines v. Quezon City as 'a gift, to be applied
consistently with existing laws, for the benefit of an indefinite number of persons, either by
bringing their minds and hearts under the influence of education or religion, by assisting them t
establish themselves in life or [by] otherwise lessening the burden of government.' A non-profi
club for the benefit of its members fails this test. An organization may be considered as non-profit
if it does not distribute any part of its income to stockholders or members. However, despite its
being a tax exempt institution, any income such institution earns from activities conducted for
profit is taxable, ad expressly provided in the last paragraph of Section 30.
‘To be a charitable institution, however, an organization must meet the substantive test of charity
in Lung Center, The issue in Lung Center concerns exemption from real property tax and not
income tax. However, it provides for the test of charity in our jurisdiction, Charity is essentially a
gift to an indefinite number of persons which lessens the burden of government. In other words,
charitable institutions provide for free goods and services to the public which would otherwise
fall on the shoulders of government. Thus, as a matter of efficiency, the government forgoes taxes
which should have been spent to address public needs, because certain private entities already
assume a part of the burden. This is the rationale for the tax exemption of charitable institutions.
‘The loss of taxes by the government is compensated by its relief from doing public works which
would have been funded by appropriations from the Treasury.
5Charitable institutions, however, are not ipso facto entitled to a tax exemption. The requirements
for a tax exemption are specified by the law granting it. The power of Congress to tax implies the
power to exempt from tax. Congress can create tax exemptions, subject to the constitutional
provision that [Jo law granting any tax exemption shalll be passed without the concurrence of a
majority of all the Members of Congress’ The requirements for a tax exemption are strictly
construed against tlle taxpayer because an exemption restricts the collection of taxes necessary
for the existence of the government.
‘The Court in Lung Center declared that the Lung Center of the Philippines is a charitable
institution for the purpose of exemption from real property taxes. This ruling uses the same
‘premise as Hospital de San juan|and Jesus Sacred Heart College which says that receiving income
from paying patients does not destroy the charitable nature of hospital.
‘As a general principle, a charitable institution does not lose its character as such and its
exemption from taxes simply because it derives income from paying patients, whether
outpatient, or confined in the hespital, c~ receives subsidies from the government, so long,
as the money received is devoted or used altogether to the charitable object which it is
intended to achieve; and no money inures to the private benefit of the persons managing
or operating the institution.
For real property taxes, the incidental generation of income is permissible because the test of
exemption is the use of the property. The Constitution provides that '[eJharitable institutions,
churches and personages or convents appurtenant thereto, mosques, non-profit cemeteries, and
all lands, buildings, and improvements, actually, directly, and exclusively used for religious,
charitable, or educational purposes shall be exempt from taxation.’ The test of exemption is not
strictly a requirement on the intrinsic nature or cnaracter of the institution, The test requires that
the institution use property in a certain way, i, for a charitable purpose. Thus, the Court held
‘that the Lung Center of the Philippines did not lose its charitable character when it used a portion
of its lot for commercial purposes. The effect of failing to meet the use requirement is simply to
remove from the tax exemption that portion of the property not devoted to charity.
‘The Constitution exempts charitable institutions only from real property taxes. In the NIRC,
Congress decided to extend the exemption to income taxes. However, the way Congress crafted
Section 30(6) of the NIRC is materially different from Section 28(3), Article VI of the Constitution.
Section 30(E) of the NIRC defines the corporation or association that is exempt from income tax.
‘On the other hand, Section 28(3), Article VI of the Constitution does not define a. charitable
institution, but requires that the institution ‘actually, directly and exclusively’ use the property for
a charitable purpose.
Section 30(t) of the NIRC provides that a charitable institution must be:
(1) Anonstock corporation or association;
(2) Organized exclusively for charitable purposes;
(@) Operated exclusively for charitable purposes; and
(4) No part of its net income pr asset shall belong to or inure to the benefit of any member,
‘organizer, officer or any specific person.
‘Thus, both the organization and operations of the charitable institution must be devoted
16‘exclusively’ for charitable purposes. The organization of the institution refers to its corporate
form, as shown by its articles of incorporation, by-laws and other constitutive documents. Section
30(B) of the NIRC specifically requires that the corporation or association be non-stock, which is
defined by the Corporation Code as ‘one where no part of its income is distributable as dividends
to its members, trustees, or officers' and that any profit ‘obtainfed] as an incident to its operations
shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for
which the corporation was organized. However, under Lung Center, any profit by a charitable
institution must not only be plowed back ‘whenever necessary or proper,’ but must be ‘devoted
or used altogether to the charitable object which it is intended to achieve.
‘The operations of the charitable institution generally refer to its regular activities. Section 30(E) of
the NIRC requires that these operations be exclusive to charity. There is also a specific
requirement that ‘no part of [the] net income or asset shall belong to or inure to the benefit of any
‘member, organizer, officer or any specific person.’ The use of lands, buildings and improvements
of the institution is but a part of its operations.
There is po dispute that St. Luke's is organized as a nor-stock and non profit charitable
institution. However, this does not automatically exempt St Luke's from paying taxes. This only
refers to the organization of St, Luke's. Even if St. Luke's meets the test of charity, a charitable
institution is not ipso facto tax exempt To be exempt from real property taxes, Section 28(3),
Article VI of the Constitution requires that a charitable institution use the property ‘actually,
directly and exclusively’ for charitable purposes. To be exempt from income taxes, Section 30(E)
of the NIRC requires that a charitable institution must be ‘organized and operated exclusively’ for
charitable purposes. Likewise, o be exempt from income taxes, Section 30(G) of the NIRC
requires that the institution be ‘operated exclusively’ for social welfare.
However, the last paragraph of Section 30 of the NIRC qualifies the words ‘organized and
operated exclusively’ by providing that:
Notwithstanding the provisions in the preceding paragraphs, the income of whatever
Kind and character of the foregoing organizations from any of their properties, real or
personal, or from any of their activities conducted for profit regardless of the disposition
‘made of such income, shall be subject to tax imposed under this Code.
In short, the last paragraph of Section 30 provides that if a tax exempt charitable
institution conducts ‘any’ activity for profit, such activity is not tax exempt even as its
not-for-profit activities remain tax exempt. This paragraph qualifies the requirements in
Section 30(E) that the [nJon-stock corporation or association [must be] organized and
operated exclusively for . . . charitable . . . purposes . . . It likewise qualifies the
requirement in Section 30(G) that the civic organization must be 'operated exclusively’ for
the promotion of social welfare.
‘Thus, even if the charitable institution must be ‘organized and operated exclusively’ for
charitable purposes, it is nevertheless allowed to engage in ‘activities conducted for
profit’ without losing its tax exempt status for its not for profit activities. The only
‘consequence is that the ‘income of whatever kind and character’ of a charitable institution
‘from any of its activities conducted for profit, regardless of the disposition made of such
income, shall be subject to tax.' Prior to the introduction of Section 27(B), the tax rate on
such income from for profit activities was the ordinary corporate rate under Section
23(A). With the introduction of Section 27(B), the tax rate is now 10%
In 1998, St. Luke's had total revenues of P1,730,367,965 from services to paying patients.
7It cannot be disputed that a hospital which receives approximately P1.73 billion from
paying patients is not an institution ‘operated exclusively! for charitable purposes.
Clearly, revenues from paying patients are income received from ‘activities conducted for
profit Indeed, St. Luke's admits that it derived profits from its paying patients. St. Luke's
declared P1,730;367,965 as "Revenues from Services to Patients' in contrast to its "Free
Services! expenditure of P218,187A98. In its Comment in GR. No. 195909, St. Luke's
showed the following ‘calculation’ to support its claim that 65.20% of its ‘income after
‘expenses was allocated to free or charitable services’ in 1998. 100%
In Lung Center, this Court declared:
‘[e}xclusive' is defined as possessed and enjoyed to the exclusion of others; debarred from
participation or enjoyment; and ‘exclusively’ is defined, 'in a manner to exclude; as
enjoying a privilege exclusively. .. The words 'dominant use’ or ‘principal use’ cannot be
substituted for the words ‘used exclusively’ without deing violence to the Constitution
and the law. Solely is synonymous with exclusively.
“The Court cannot expand the meaning of the words ‘operated exclusively! without violating the
NIRC. Services to paying patients are activities conducted for profit. They cannot be considered
any other way. There is a ‘purpose to make profit over and above the cost! of services. The P1.73
billion total revenues from paying patients is not even incidental to St. Luke's charity
expenditure of P218,187,498 for non-paying patients
St Luke's claims that its charity expenditure of P218,/187498 is 65.20% of its operating income in
1998. However, if a part of the remaining 34.80% of the operating income is reinvested in
property, equipment or facilities used for services to paying and non-paying patients, then it
cannot be said that the income is ‘devoted or used altogether to the charitable object which it is
intended to achieve: The income is plowed back to the corporation not entirely for charitable
purposes, but for profit as well. In any case, the last paragraph of Section 30 of the NIRC
expressly qualifies that income from activities for profit is taxable ‘regardless of the disposition
made of such income.
Jesus Sacred Heart College declared that there is no official legislative record explaining the phrase
‘any activity conducted for profit’ However, it quoted a deposition of Senator Mariano Jesus
‘Cuenco, who was a member of the Committee of Conference for the Senate, which introduced the
phrase or from any activity conducted for profit!
P. Cuando ha hablado de la Universidad de Santo Tomas que tiene un hospital, no cree Val. que es
tuna actividad esencial dicho hospital para el funcionamiento del colegio de medicina de medicina
de dicha universidad?
xxr xxx oar
R Si el hospital se limita a recibir enformos pobres, mi contestacion seria afirmativa; pero
considerando que el hospital tiene cuartos de pago, y a los mismos generalmente van
enformos de buena posicion social economica, lo que se paga por estos enformos debe
estar sujeto a income fax’, y es una de las razones que hemos tenido para insertar las
palabras o frase'or from any activity conducted for profit"
‘The question was whether having a hospital is essential to an educational institution like the
College of Medicine of the University of Santo Tomas. Senator Cuenco answered that if the
18hospital has paid rooms generally occupied by people of good economic standing, then it should
‘be subject to income tax. He said that this was one of the reasons Congress inserted the phrase 'or
any activity conducted for profit!
‘The question in Jesus Sacred Heart College involves an educational institution, However, it is
applicable to charitable institutions because Senator Cuenco's response shows an intent to focus
on the activities of charitable institutions. Activities for profit should not escape the reach of
taxation. Being a non-stock and non-profit corporation does not, by this reason alone, completely
exempt an institution from tax. An institution cannot use its corporate form to prevent its
profitable activities from being taxed.
‘The Court finds that St. Luke's isa corporation that is not 'gperated exclusively’ for charitable or
social welfare purposes insofar as its revenues from paying patients are C.Qncemed. This ruling
is bacred not only on a strict interpretation of a provision granting tax exemption, but also on the
‘clear and plain text of Section 30(8) and (G). Section 30(E) and (G) of the NIRC requires that an
institution be ‘operated exclusively’ for charitable or social welfare purposes to be completely
‘exempt from income tax. An institution tmder Section 30(B) or (G) does not lose its tax exemption
if it earns income from its for-profit activities. Such income from for-profit activities, tmder the
last paragraph of Section 30, is merely subject to income tax, previously at the ordinary corporate
rrate but now at the preferential 10% rate pursuant to Section 27(B).
‘A tax exemption is effectively a social subsidy granted by the State because an exempt institution
is spared from sharing in the expenses of government and yet benefits from them. Tax
‘exemptions for charitable institutions should therefore be limited to institutions beneficial to the
public and those which improve social welfare. A profit-making entity should not be allowed to
exploit this subsidy to the detriment of the government and other taxpayers.
St Luke's fails to meet the requirements under Section 30(E) and (G) of the NIRC to be
completely tax exempt from all its income. However, it remains a proprietary non-profit hospital
‘under Section 27(B) of the NIRC as long as it does not distribute any of its profits to its members
and such profits are reinvested pursuant to its corporate purposes. St. Luke's, as a proprietary
non-profit hospital, is entitled to the preferential tax rate of 10% on its net income from its for-
profit activities.
St. Luke's is therefore liable for deficiency income tax in 1998 under Section 27(B) of the NIRC.
However, St. Luke's has good reasons to rely on the letter dated 6 June 1990 by the BIR, which
opined that St. Luke's is ‘a corporation for purely chariteble and social welfare purposes’ and thus
‘exempt from income tax. In Michael }. Lhuillier, Inc. v. Commissioner of Internal Revenue, the Court
said that ‘good faith and honest belief that one is not subject to tax on the basis of previous
interpretation of government agencies tasked to implement the tax law, are sufficient justification
to delete the imposition of surcharges and interest.’
A careful review of the pleadings reveals that there is no countervailing consideration for the
Court to revisit its aforequoted ruling in G.R. Nos. 195909 and 195960 (Commissioner of Internal
Revenue v. St. Luke's Medical Center, Inc.). Thus, under the doctrine of stare decisis, which states
that "[o]nce a case has been decided in one way, any other case involving exactly the same point
at issue 20x should be decided in the same manner,” the Court finds that SLMC is subject to 10%
income tax insofar as its revenues from paying patients are concerned.
To be clear, for an institution to be completely exempt from income tax, Section 30(B) and (G) of
the 1997 NIRC requires said institution to operate exclusively for charitable or social welfare
19purpose. But in case an exempt institution under Section 30(B) or (G) of the said Code ears
income from its for-profit activities, it will not lose its tax exemption. However, its income from
for profit activities will be subject to income tax at the preferential 10% rate pursuant to Section
27(B) thereof. (Commissioner of Internal Revenue 2. St. Luke's Medical Center, Inc., GR. No. 203514,
February 13, 2017)
We take judicial notice that on 25 July 2016, the present CIR Caesar R. Dulay issued RMO No.
44.2016, which provides that:
SUBJECT: Amending Revenue Memorandum Order No. 20- 2013, as amended
(Prescribing the Policies and Guidelines in the Issuance of Tax Exemption Rulings to
Qualified Nor-Stock, Non-Profit Corporations and Associations under Section 30 of the
National Internal Revenue Code of 1997, as Amended)
In line svith the Bureau's commitment to put in proper context the nature and tax status
of non-profit, non-stock educational institutions, this Order is being issued to exclude
norstock, non-profit educational institutions from the coverage of Revenue
‘Memorandum Order No. 20-2013, as amended.
SECTION 1. Nature of Tax Exemption. — The tax exemption of non-stock, non-profit
eclucational institutions is directly conferred by paragraph 3, Section 4, Article XIV of the
1987 Constitution, the pertinent portion of which reads:
* All revenues and assets of non-stock, non-profit educational institutions used actualy,
directly and exclusively (or educational purposes shall be exempt from taxes and duties."
This constitutional exemption is reiterated in Section 30 (11) of the 1997 Tax Code,
as amended, which provides as follows:
"Gee, 30. Exempt from Tax on Corporations, - The following organizations shall
not be taxed under this Title in respect to income received by them as such:
OK KK
(H) A non-stock and non-profit educational institution; 20."
It is clear and unmistakable from the aforequoted constitutional provision that nor-stock, non-
profit educational institutions are constitutionally exempt from tax on all revenues derived in
pursuance of its purpose as an educational institution and used actually, directly and
exclusively for educational purposes. This constitutional exemption gives the non-stock, non-
‘profit educational institutions a distinct character. And for the constitutional exemption to be
enjoyed, jurisprudence and tax rulings affirm the doctrinal rule that there are only two
requisites: (I) The school must be non-stock and non-profit; and (2) The income is actually,
directly and exclusively used for educational purposes. There are no other conditions and
limitations.
In this light, the constitutional conferral of tax exemption upon non-stock and non-profit
educational institutions should not be implemented or interpreted in such a manner that will
defeat or diminish the intent and language of the Constitution. 200. (Jacinto-Henares 0. St. Paul
College of Makati, G.R. No. 215383, March 8, 2017)
20To "assume" means "[t]o take on, become bound as another is bound, or put oneself in place of
another as to an obligation or liability." This means that the obligation or liability remains,
although the same is merely passed on to a different person. In this light, the concept of an
assumption is therefore different from an exemption, the latter being the "[f]reedom from a
duty, lability or other requirement" or "a privilege given to a judgment debtor by law,
allowing the debtor to retain [a] certain property without liability." Thus, contrary to the CTA
En Banc’ opinion, the constitutional provisions on tax exemptions would not apply. (Mitsubishi
Corporation - Manila Branch v, Commissioner of Internal Revenue, G.R. No. 175772, June 5, 2017)
Appropriations for Sectarian Purposes
Section 29 (2), Article VI of the 1987 Constitution provides, "No public money or property shall
be appropriated, applied, paid, or employed, directly or indirectly, for the use, benefit, or
support of any sect, church, denomination, sectarian institution, or system of religion, or of any
priest, preacher, minister, or other religious teacher, or dignitary as such, except when such
priest, preacher, minister, or dignitary is assigned to the armed forces, or to any penal
institution, or government orphanage or leprosarium."
‘The word “apply" means "to use or employ for a particular purpose.” "Appropriate" means "to
prescribe a particular use for particular moneys or to designate or destine a fund or property for
a distinct use, or for the payment of a particular demand.”
Under the principle of noscitur a soctis, where a particular word or phrase is ambiguous in itself
or is equally susceptible of various meanings, its correct construction may be made clear and
specific by considering the company of words in which it is found or with which itis associated,
This is because a word or phrase in.a statute is always used in association with other words or
phrases, and its meaning may, thus, be modified or restricted by the latter. 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 a harmonious whole. A statute must be so construed as to harmonize
and give effect to all its provisions whenever possible.
‘Thus, the words "pay" and "employ" should be understood to mean that what is prohibited is
the use of public money or property for the sole purpose of benefiting or supporting any
church. The prohibition contemplates a scenario where the appropriation is primarily intended
for the furtherance of a particular church.
It has also been held that the aforecited constitutional provision "does not inhibit the use of
public property for religious purposes when the religious character of such use is merely
incidental to a temporary use which is available indiscriminately to the public in general.”
Hence, a public street may be used for a religious procession even as it is available for a civic
‘parade, in the same way that a public plaza is not barred to a religious rally if it may also be
used for a political assemblage.
In relation thereto, the phrase "directly or indirectly" refers to the manner of appropriation of
public money or property, not as to whether a particular act involves a direct or a mere
incidental benefit to any church, Otherwise, the framers of the Constitution would have placed
2ait before "use, benefit or support" to describe the same. Even the exception to the same provision
bolsters this interpretation. The exception contemplates a situation wherein public funds are
paid to a priest, preacher, minister, or other religious teacher, or dignitary because they
rendered service in the armed forces, or to any penal institution, or government orphanage or
leprosarium. That a priest belongs to a particular church and the latter may have benefited from
the money he received is of no moment, for the purpose of the payment of public funds is
merely to compensate the priest for services rendered and for which other persons, who will
perform the same services will also be compensated in the same manner.
UE magis valeat quant pereat. The Constitution is to be interpreted as a whole. As such, the
foregoing interpretation finds support in the Establishment Clause, which is as clear as daylight
in stating that what is proscribed is the passage of any law which tends to establish a religion,
not merely to accommodate the free exercise thereof.
The Constitution even grants tax exemption to properties actually, directly and exclusively
devoted te religious purposes. Certainly, this benefits the religious sects for a portion of what
could have been collected for the benefit of the public is surrendered in their favor.
In Manosca v. CA, a parcel of land located in Taguig was determined by the National Historical
Institute to be the birthsite of Felix Y. Manalo, the founder of Iglesia ni Cristo. The Republic then
sought to expropriate the said property. The exercise of the power of eminent domain was
questioned on the ground that it would only benefit members of Iglesia ni Cristo. The Court
upheld the legality of the expropriation, viz.
‘The practical reality that greater benefit may be derived by members of the Iglesia ni
Cristo than by most others could well be true but such a peculiar advantage still remains
to be merely incidental and secondary in nature. {Fmphasis supplied]
Again, in Aglipay, the issuing, and selling of postage stamps commemorative of the Thirty-third
International Eucharistic Congress was assailed on the ground that it violated the constitutional
prohibition against the appropriation of public money or property for the benefit of any church.
In ruling that there was no such violation, the Court held:
Itis obvious that while the issuance and sale of the stamps in question may be said to be
inseparably linked with an event of a religious character, the resulting propaganda, if
any, received by the Roman Catholic Church, was not the aim and purpose of the
Government. We are of the opinion that the Government should not be embarrassed in
its activities simply because of incidental results, more of less religious in character, if the
purpose had in view is one which could legitimately be undertaken by appropriate
legislation. The main purpose should not be frustrated by its subordination to mere
incidental results not contemplated. [Emphasis supplied]
Here, the basement of the QC Hall of Justice is not appropriated, applied or employed for the
sole purpose of supporting the Roman Catholics.
Further, it has not been converted into a Roman Catholic chapel for the exclusive use of its
faithful contrary to the claim of Valenciana. Judge Maceren reported that the basement is also
being used as a public waiting area for most of the day and a meeting place for different
22employee organizations. The use of the area for holding masses is limited to lunch break period
from twelve (12) o'clock to one (1) o'clock in the afternoon. Further, Judge Sagun, Jr. related that
‘masses run for just a litle over thirty (30) minutes. It is, therefore, clear that no undue religious
bias is being committed when the subject basement is allowed to be temporarily used by the
Catholics to celebrate mass, as the same area can be used by other groups of people and for
other purposes. Thus, the basement of the QC Hall of Justice has remained to be a public
property devoted for public use because the holding of Catholic masses therein is a mere
incidental consequence of its primary purpose. (Re: Letter of Tony Q. Valenciano, A.M. No. 10-4-
19-SC, March 7, 2017)
ARTICLE VIL
EXECUTIVE DEPARTMENT
Multiple Offices
As the records bear out, the petitioners who approved the EMEs (Extraordinary and
Miscellaneous Expenses) failed to observe the following: fixst, there is already a Jaw, the GAA,
that limits the grant of EMEs; second; COA Memorandum No. 97-038 dated Sepiember 19, 1997
is a directive issued by the COA to its auditors to enforce the self-executing prohibition
imposed by Section 13, Article VII of the Constitution on the President and his official family,
their deputies and assistants, or their representatives from holding multiple offices and
receiving double compensation; and third, the irregularity of giving additional compensation or
allowances to ex officio members was already settled by jurisprudence, during the time that the
subject allowances were authorized by the BSP.
Indeed, the petitioners-approving officers’ disregard of the aforementioned case laws, COA
issuances, and the Constitution, cannot be deemed as a mere lapse consistent with the
presumption of good faith. (Tetangco v. Commission on Audit, G.R. No. 215061, June 6, 2017)
Power of Appointment
In its Decision dated November 29, 2016, the Court ruled that the clustering impinged upon the
President's appointing power in the following ways: The President's option for every vacancy
‘was limited to the five to seven nominees in each cluster. Once the President had appointed a
nominee from one cluster, then he was proscribed from considering the other nominees in the
same cluster for the other vacancies, All the nominees applied for and were found to be
qualified for appointment to any of the vacant Associate Justice positions in the Sandiganbayan,
ut the JBC failed to explain why one nominee should be considered for appointment to the
position assigned to one specific cluster only. Correspondingly, the nominees! chance for
appointment was restricted to the consideration of the one cluster in which they were included,
even though they applied and were found to be qualified for all the vacancies. Moreover, by
designating the numerical order of the vacancies, the JBC established the seniority or order of
preference of the new Sandiganbayan Associate Justices, a power which the law (Section 1,
paragraph 3 of Presidential Decree No. 1606), rules (Rule Il, Section 1(b) of the Revised Internal
Rules of the Sandiganbayan), and jurisprudence (Re: Seniority Among the Four Most Recent
Appointments to the Position of Associate Justices of the Court of Appeals), vest exclusively upon the
President. (Aguinaldo v. Aquino, G.R, No. 224302, Resolution on the MR, February 21, 2017)
23Military Powers
Among the three extraordinary powers, the calling out power is the most benign and involves
ordinary police action. The President may resort to this extraordinary power whenever it
becomes necessary to prevent or suppress lawless violence, invasion, or rebellion. "[I]he power
to call is fully discretionary to the President;" the only limitations being that he acts within
permissible constitutional boundaries or in a manner not constituting grave abuse of discretion.
In fact, "the actual use to which the President puts the armed forces is oc not subject to judicial
review." (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
xxx the President may exercise the power to call out the Armed Forces independently of the
power to suspend the privilege of the writ of habeas corpus and to declare martial law, although,
of course, it may also be a prelude to a possible future exercise of the latter powers, as in this
case. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
‘The extraordinary powers of suspending the privilege of the writ of habeas corpus and/or
declaring martial law may be exercised only when there is actual invasion or rebellion, and
public safety requires it. The 1987 Constitution imposed the following limits in the exercise of
these powers: "(1) a time limit of sixty days; (2) review and possible revocation by Congress;
[and] (3) review and possible nullification by the Supreme Court.”
‘The framers of the 1987 Constitution eliminated insurrection, and phrase "imminent danger
thereof" as grounds for the suspension of the privilege of the writ of habeas corpus or declaration
of martial law. They perceived the phrase "imminent danger" to be "fraught with possibilities
abuse;" besides, the calling out power of the President "is sufficient for handling imminent
danger.”
‘The power to declare martial law and to suspend the privilege of the writ of habeas corpus
involve curtailment and suppression of civil rights and individual freedom. Thus, the
declaration of martial law serves ag a warning to citizens that the Executive Department has
called upon the military assist in the maintenance of law and order, and while the emergency
remains, the citizens must, under pain of arrest and punishment, not act in a manner that will
render it more difficult to restore order and enforce the law. As such, their exercise requires
more stringent safeguards by the Congress, and review by the Court. (Lagman v. Medialdea, G.R.
No. 231658, July 4, 2017)
‘A state of martial law is peculiar because the President, at such a time, exercises police power,
which is normally a function of the Legislature. In particular, the President exercises police
power, with the military’s assistance, to ensure public safety and in place of government
agencies which for the time being are unable to cope with the condition in a locality, which
remains under the control of the Siate. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
In David v. President Macapagal-Arroyo, the Court, quoting Justice Vicente V. Mendoza's (Justice
Mendoza) Statement before the Senate Committee on Justice on March 13, 2006, stated that
under a valid declaration of martial Jaw, the President as Commander-in-Chief may order the
+a) arrests and seizures without judicial warrants; (b) ban on public assemblies; (c) [takeover] of
news media and agencies and press censorship; and (d) issuance of Presidential Decrees 20".
coWorthy to note, however, that the above-cited acts that the President may perform do not give
him unbridled discretion to infringe on the rights of civilians during martial law. This is because
‘martial law does not suspend the operation of the Constitution, neither does it supplant the
operation of civil courts or legislative assemblies. Moreover, the guarantees under the Bill of
Rights remain in place during its pendency. And in such instance where the privilege of the
writ of habeas corpus is also suspended, such suspension applies only to those judicially
charged with rebellion or offenses connected with invasion.
Clearly, from the foregoing, while martial law poses the most severe threat to civil liberties, the
Constitution has safeguards against the President's prerogative to declare a state of martial law.
(Lagman v. Medialdea, G.R, No. 231658, July 4, 2017)
Indeed, the 1987 Constitution gives the "President, as Commander-in-Chief, a 'sequence' of
‘graduated power[s]’. From the most to the least benign, these are: the calling out power, the
power to suspend the privilege of the writ of hateas corpus, and the power to declare martial
Jaw." It must be stressed, however, that the graduation refers only to hierarchy based on scope
and effect. It does not in any manner refer to a sequence, arrangement, or order which the
Commander-in-Chief must follow. This so-called "graduation of powers" does not dictate or
restrict the manner by which the President decides which power to choose.
These extraordinary powers are conferred by the Constitution with the President as
Commander-in-Chief; it therefore necessarily follows that the power and prerogative to
determine whether the situation warrants a mere exercise of the calling out power; or whether
the situation demands suspension of the privilege of the writ of habeas corpus; or whether it calls.
for the declaration of martial law, also lies, at least initially, with the President. The power to
choose, initially, which among these extraordinary powers to wield in a given set of conditions
is a judgment call on the part of the President. As Commander-in-Chief, his powers are broad
enough to include his prerogative to address exigencies or threats that endanger the
government, and the very integrity of the State. (Lagman v. Medialdea, G.R. No. 231658, July 4,
2017)
Section 18, Article VII itself sets the parameters for determining the sufficiency of the factual
basis for the declaration of martial law and/or the suspension of the privilege of the writ of
habeas corpus, "namely (1) actual invasion or rebellion, and (2) public safety requires the exercise
of such power." Without the concurrence of the two conditions, the President's declaration of
martial law and/or suspension of the privilege of the writ of habeas corpus must be struck
down. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
Since the Constitution did not define the term "rebellion," it must be understood to have the
same meaning as the crime of "rebellion" in the Revised Penal Code (RPC). (Lagman v. Medialdea,
GR. No. 231658, July 4, 2017)
In determining the existence of rebellion, the President only needs to convince himself that
there is probable cause or evidence showing that more likely than not a rebellion was
committed or is being committed. To require him to satisfy a higher standard of proof would
restrict the exercise of his emergency powers. (Lagman v, Medialdea, GR. No, 231658, July 4,
2017)
25At this juncture, it must be stressed that prior to Proclamation No. 216 or the declaration of
martial law on May 23, 2017, the President had already issued Proclamation No. 55 on
September 4, 2016, declaring, a state of national emergency on account of lawless violence in
Mindanao. This, in fact, is extant in the first Whereas Clause of Proclamation No. 216. Based on
the foregoing presidential actions, it can be gleaned that although there is no obligation or
requirement on his part to use his extraordinary powers on a graduated or sequential basis, still
the President made the conscious and deliberate effort to first employ the most benign from
among his extraordinary powers. As the initial and preliminary step towards suppressing and
preventing the armed hostilities in Mindanao, the President decided to use his calling out
power first. Unfortunately, the situation did not improve; on the contrary, it only worsened.
Thus, exercising his and exclusive prerogative, the President decided to impose martial law
suspend the privilege of the writ of habeas corpus on the belief that the armed hostilities in
Mindanao already amount to actaal rebellion and public safety requires it. (Lagman v. Medialdea,
GR, No. 231658, July 4, 2017)
Invasion or rebellion alone may justify resort to the calling out power but definitely not the
declaration of martial law or suspension of the privilege of the writ of habeas corpus. For a
declaration of martial law or suspension of the privilege of the writ of habeas corpus to be valid,
there must be a concurrence of actual rebellion or invasion and the public safety requirement. In
his Report, the President noted that the acts of violence perpetrated by the ASG and the Maute
Group were directed not only against government forces or establishments but likewise against
civilians and their properties. In addition and in relation to the armed hostilities, bomb threats
were issued; road blockades and checkpoints were set up; schools and churches were burned;
civilian hostages were taken and killed; non-Muslims or Christians were targeted; young male
Muslims were forced to join their group; medical services and delivery of basic services were
hampered; reinforcements of government troops and civilian movement were hindered; and the
security of the entire Mindanao Island was compromised. xxx.
Based on the foregoing, we hold that the parameters for declaration of martial law and
suspension of the privilege of the writ of habeas corpus have been properly and fully complied
with, Proclamation No. 216 has sufficient factual basis there being probable cause to believe that
rebellion exists and that public safety requires the martial law declaration and the suspension of
the privilege of the writ of habeas corpus. (Lagman v. Medialdea, G.R, No. 231658, July 4, 2017)
Section 18, Article VII of the Constitution states that "[iJn case of invasion or rebellion, when the
public safety requires it, [the President] may xxx suspend the privilege of writ of habeas corpus or
place the Philippines or any part thereof under martial law." Clearly, the Constitution grants
to the President the discretion to determine the territorial coverage of martial law and the
suspension of the privilege of the writ of lmbeas corpus. He may put the entire Philippines or
only a part thereof under martial law.
‘This is both an acknowledgement and a recognition that it is the Executive Department,
particularly the President as Commander-in-Chief, who is the repository of vital, classified, and
live information necessary for and relevant in calibrating the territorial application of martial
law and the suspension of the privilege of the writ of Ibens corpus. It, 00, is a concession that
the President has the tactical and military support, and thus has a more informed
understanding of what is happening on the ground. Thus, the Constitution imposed a limitation
26on the period of application, which is 60 days, unless sooner nullified, revoked or extended, but
not on the territorial scope or area of coverage; it merely stated "the Philippines or any part
thereof," depending on the assessment of the President. (Lagman v. Medialdea, G.R. No. 231658,
July 4, 2017)
Ithas been said that the "gravamen of the crime of rebellion is armed public uprising against the
government;" and that by nature "rebellion is xxx a crime of masses or multitudes, involving
crowd action, that cannot be confined a priori, within predetermined bounds." We understand
this to mean that the precise extent or range of the rebellion could not be measured by exact
metes and bounds. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
xxx the discretion to determine the territorial scope of martial law lies with the President. The
Constitution grants him the prerogative whether to put the entire Philippines or any part
thereof under martial law. There is no constitutional edict that martial law shouid be confined
only in the particular place where the armed public uprising actually transpired. This is not
only practical but also logical, Martial law is an urgent measure since at stake is the nation's
territorial sovereignty and survival, As such, the President has to respond quickly. After the
rebellion in the Court's compound, he need not wait for another rebellion to be mounted in
Quezon City before he could impose martial law thereat. If that is the case, then the President
would have to wait until every remote comer in the country is infested with rebels before he
could declare martial law in the entire Philippines. For sure, this is not the scenario envisioned
by the Constitution. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
Public safety, which is another component element for the declaration of martial law, "involves
the prevention of and protection from events that could endanger the safety of the general
public from significant danger, injury/harm, or damage, such as crimes or disasters." Public
safety is an abstract termy it does not take any physical form. Plainly, its range, extent or scope
could not be physically measured by metes and bounds. (Lagman v. Medialdea, G.R. No. 231658,
July 4, 2017)
Perhaps another reason why the territorial scope of martial law should not necessarily be
limited to the particular vicinity where the armed public uprising actually transpired, is because
of the unique characteristic of rebellion as a crime. "The crime of rebellion consists of many acts.
It is a vast movement of men and a complex net of intrigues and piots. Acts committed in
furtherance of rebellion[] though crimes in themselves[,] deemed absorbed in one single crime
of rebellion." Rebellion absorbs "other acts committed in its pursuance.” Direct assault, murder,
robbery and kidnapping, just to name a few, are absorbed in the crime of rebellion if committed
in furtherance of rebellion; "[ilt cannot be made a basis of a separate charge." Jurisprudence also
teaches that not only common crimes may be absorbed in rebellion but also “offenses under
special laws [such as Presidential Decree No. 1825] which are perpetrated in furtherance of the
political offense’, "All whether punishable under a special aw or general law, which are mere
components or ingredients, or committed in furtherance thereof, become absorbed in the crime
of rebellion and cannot be isolated and charged as separate crimes in themselves.
‘Thus, by the theory of absorption, the crime of murder committed in Makati City, if committed
in furtherance of the crime of rebellion being hypothetically staged in Padre Faura, Ermita,
Manila, is stripped of common complexion and is absorbed in the crime of rebellion. This all the
2more makes it difficult to confine the application of martial law only to the place where the
armed public uprising is actually taking place.
In the iliustration above, Padre Faura could only be the nerve center of the rebellion but at the
same time rebellion is also happening in Makati City.
In fine, it is difficult, if not impossible, to fix the territorial scope of martial law in direct
proportion to the "range" of actual rebellion and public safety simply because rebellion and
public safety have no fixed dimensions. Their transitory and abstract nature defies precise
measurements; hence, the determination of the territorial scope of martial law could only be
drawn from arbitrary, not fixed, variables. The Constitution must have considered these
limitations when it granted the President wide leeway and flexibility in determining the
territorial scope of martial law.
Moreover, the President's duty to maintain peace and public safety is not limited only to the
place where there is actual rebellion; it extends other areas where the present hostilities are in
danger of spilling over. It is not intended merely to prevent the escape of lawless elements from
Marawi City, but also to avoid enemy reinforcements and to cut their supply lines coming from
different parts of Mindanao. Thus, limiting the proclamation and/or suspension to the place
where there is actual rebellion would not only defeat the purpose of declaring martial law, it
will make the exercise thereof ineffective and useless. (Lagman v. Medialden, G.R. No. 231658,
July 4, 2017)
It is also of judicial notice that the insurgency in Mindanao has been ongoing for decades. While
some groups have sought legal and peaceful means, others have resorted to violent extremism
and terrorism. Rebellion may be subsumed under the crime of terrorism, which has a broader
scope covering a wide range of predicate crimes. In fact, rebellion is only one of the various
means by which terrorism can be committed. However, while the scope of terrorism may be
comprehensive, its purpose is distinct and well-defined. The objective of a "terrorist" is to sow
and create a condition of widespread fear among the populace in order to coerce the
government to give in to an unlawful demand. This condition of widespread fear is
traditionally achieved through bombing, kidnapping. mass killing, and beheading, among
others. In contrast, the purpose of rebellion, as previously discussed, is political, ie., (a) to
remove from the allegiance to the Philippine Government or its laws: (i) the territory of the
Philippines or any pari thereof; (ii) any body of land, naval, or armed forces; or (b) to deprive
the Chief Executive or Congress, wholly or partially, of any of their powers and prerogatives.
In determining what crime was committed, we have to look into the main objective of the
malefactors. If it is political, such as for the purpose of severing the allegiance of Mindanao to
the Philippine Government to establish a wilayat therein, the crime is rebellion. If, on the other
hand, the primary objective is to sow and create a condition of widespread and extraordinary
fear and panic among the populace in order to coerce the government to give in to an unlawful
demand, the crime is terrorism. Here, we have already explained and ruled that the President
did not err in believing that what is going on in Marawi City is one contemplated under the
crime of rebellion. (Lagman v. Medialden, G.R. No. 231658, July 4, 2017)
28‘Thus, by inserting Section 18 in Article VII which allows judicial review of the declaration of
‘martial law and suspension of the privilege of the writ of habeas corpus, the framers of the 1987
Constitution in effect constitutionalized and reverted to the Lansang doctrine, (Lagman 2.
Medialdea, G.R. No. 231658, July 4, 2017)
‘The most important objective, however, of Section 18, Article VIlis the curtailment of the extent
of the powers of the Commander-in-Chief, This is the primary reason why the provision was
not placed in Article VIII or the Judicial Department but remained under Article VI or the
Executive Department. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
‘The framers of the 1987 Constitution reformulated the scope of the extraordinary powers of the
President as Commander-in-Chief and the review of the said presidential action. In particular,
the President's extraordinary powers of suspending the privilege of the writ of habeas corpus and
imposing martial law are subject to the veto powers of the Court and Congress. (Lagman v.
Medialdea, G.R. No. 231658, July 4, 2017)
‘The Court may strike down the presidential proclamation in an appropriate proceeding filed by
any citizen on the ground of lack sufficient factual basis. On the other hand, Congress may
revoke the proclamation or suspension, which revocation shall not be set aside by President.
In reviewing the sufficiency of the factual basis of the proclamation suspension, the Court
considers only the information and data available to the President prior to or at the time of the
declaration; it is not allowed to "undertake an independent investigation beyond the pleadings."
On the other hand, Congress may take into consideration not only data available prior to, but
likewise events supervening the declaration. Unlike the Court which does not look into the
absolute correctness of the factual basis(.) 20x Congress could probe deeper and further; it can
delve into the accuracy of the facts presented before it. (Lagman v. Medialdea, G.R, No. 231658,
July 4, 2017)
In addition, the Court's review power is passive; it is only initiated by the filing of a petition "in
an appropriate proceeding" by a citizen. On the other hand, Congress’ review mechanism is
automatic in the sense that it may be activated by Congress itself at any time after the
proclamation or suspension was made.
Thus, the power to review by the Court and the power to revoke by Congress are not only
totally different but likewise independent from each other although concededly, they have the
same trajectory, which is, the nullification of the presidential proclamation. Neediess to say, the
power of the Court to review can be exercised independently from the power of revocation of
Congress. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
Considering that the proclamation of martial law or suspension of the privilege of the writ of
habeas corpus is now anchored on actual invasion or rebellion and when public safety requires it,
and is no longer under threat or in imminent danger thereof, there is a necessity and urgency
for the President to act quickly to protect the country. The Court, as Congress does, must thus
accord the President the same leeway by not wading into the realm that is reserved exclusively
by the Constitution to the Executive Department. (Lagman v. Medialdea, G.R. No. 231658, July 4,
2017)
29Even the recommendation of, or consultation with, the Secretary of National Defense, or other
high-ranking military officials, is not a condition for the President to declare martial law. A
plain reading of Section 18, Article VII of the Constitution shows that the President's power to
declare martial law is not subject to any condition except for the requirements of actual invasion
or rebellion and that public safety requires it. Besides, it would be contrary to common sense if
the decision of the President is made dependent on the recommendation of his mere alter ego.
Rightly so, it is only on the President and no other that the exercise of the powers of the
Commander-in-Chief under Section 18, Article VII of the Constitution is bestowed. (Lagman v.
‘Medialden, G.R. No. 231658, July 4, 2017)
Pardoning Power
However, the fact that respondent Roque was still a probationer when he applied for the
position of Utility Worker and accomplished his Personal Data Sheet did not disqualify him
from applying for the position. In Moreno v. Commission on Elections (530 Phil. 279 (2006)), the
Court clarified that the grant of probation suspends the imposition of the principal penalty of
imprisonment as well as the accessory penalties of suspension from public office and from the
right to follow a profession or calling, and that of perpetual special disqualification from the
right of suffrage. (Re: Anonymous Letter-Complaint versus Judge Divina T. Samson, A.M. No. MTJ-
16-1870, June 6, 2017)
ARTICLE VE
JUDICIAL DEPARTMENT
Judicial Power
‘The KOR also invokes this Court's exercise of its extraordinary certiorari power of review under
Section 1, Article VII of the Constitution. However, this Court can only exercise its
extraordinary certiorari power if the City of Manila, in issuing the required permits and licenses,
gravely abused its discretion amounting to lack or excess of jurisdiction. Tellingly, neither the
majority nor minority opinion in this case has found that the City of Manila committed grave
abuse of discretion in issuing the permits and licenses to DMCEPDL Thus, there is no
justification at all for this Court to exercise its extraordinary certiorari power. (Knights of Rizal v.
DMCI Hones, Inc., G.R. No. 213948, April 25, 2017)
A plain reading of the afore-quoted Section 18, Article VII reveals that it specifically grants
authority to the Court to determine the sufficiency of the factual basis of the proclamation of
martial law or suspension of the privilege of the writ of habeas corpus. xxx.
It could not have been the intention of the framers of the Constitution that the phrase "in an
appropriate proceeding" would refer to a Petition for Certiorari pursuant to Section 1 or Section
5 of Article VIII. The standard of review in a petition for certiorari is whether the respondent has
committed any grave abuse of discretion amounting to lack or excess of jurisdiction in the
performance of his or her functions, Thus, it is not the proper iool to review the sufficiency of
the factual basis of the proclamation or suspension. !t must be emphasized that under Section
18, Article VII, the Court is tasked to review the sufficiency of the factual basis of the President's
exercise of emergency powers. Put differently, if this Court applies the standard of review used
30in a petition for certioreri, the same would emasculate its constitutional task under Section 18,
Article VIL. (Lagmen v. Medialdea, G.R. No. 231658, July 4, 2017)
Section 18, Article VII is meant to provide additional safeguard against possible abuse by the
President in the exercise of his power to declare martial law or suspend the privilege of the writ
of Iibeas corpus. Reeling from the aftermath of the Marcos martial law, the framers of the
Constitution deemed it wise to insert the now third paragraph of Section 18 of Article VI. xxx.
To give more teeth to this additional safeguard, the framers of the 1987 Constitution not only
placed the President's proclamation of martial law or suspension of the privilege of the writ of
habeas corpus within the ambit of judicial review, it also relaxed the rule on standing by allowing
any citizen to question before this Court the sufficiency of the factual basis of such proclamation
or suspension, Moreover, the third paragraph of Section 18, Article VII veritably conferred upon
any citizen a demandabie right to challenge the sufficiency of the factual basis of said
proclamation or suspension. It further designated this Court as the reviewing tribunal to
examine, in an appropriate proceeding, the sufficiency of the factual basis, and to render its,
decision thereon within a limited period of 30 days from date of filing. (Lagman v. Medialdea,
GR. No. 231658, July 4, 2017)
In other words, the framers of the Constitution added the safeguard under the third paragraph
of Section 18, Article VII on top of the expanded jurisdiction of this Court. (Lagman v. Medialdea,
GR.No. 231658, July 4, 2017)
‘The jurisdiction of this Court is not restricted to those enumerated in Sections 1 and 5 of Article
Vill. For instance, its jurisdiction to be the sole judge of all contests relating to the election,
returns, and qualifications of the President or Vice-President can be found in the last paragraph
of Section 4, Article VII. The power of the Court to review on certiorari the decision, order, or
ruling of the Commission on Blections and Commission on Audit can be found in Section 7,
Axticle IX(A). (Lagman v. Medialden, G.R. No. 231658, July 4, 2017)
‘The unique features of the third paragraph of Section 18, Article VII clearly indicate that it
should be treated as sui generis separate and different from those enumerated in Article VIII.
Under the third paragraph of Section 18, Article VII, a petition filed pursuant therewith will
follow a different rule on standing as any citizen may file it. Said provision of the Constitution
also limits the issue to the sufficiency of the factual basis of the exercise by the Chief Executive
of his emergency powers. The usual period for filing pleadings in Petition for Certiorari is
likewise not applicable under the third paragraph of Section 18, Article VII considering the
limited period within which this Court has to promulgate its decision. (Lagman v. Medialdea,
GR. No. 231658, July 4, 2017)
We, therefore, hold that the Court can simultaneously exercise its power of review with, and
independently from, the power to revoke by Congress. Corollary, any perceived inaction or
default on the part of Congress does not deprive or deny the Court of its power to review.
(Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
It is thus beyond doubt that the power of judicial review does not extend to calibrating the
President's decision pertaining to which extraordinary power to avail given a set of facts or
conditions. To do so would be tantamount to an incursion into the exclusive domain of the
31Executive and an infringement on the prerogative that solely, at least initially, lies with the
President. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
‘The elimination by the framers of the 1987 Constitution of the requirement of prior concurrence
of the Congress in the initial imposition of martial law or suspension of the privilege of the writ
of habeas corpus further supports the conclusion that judicial review does not include the
calibration of the President's decision of which of his graduated powers be availed of in a given
situation. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
‘The void-for-vagueness doctrine holds that a law is facially invalid if "men of common
intelligence must necessarily guess at its meaning and differ as to its application." "[A] statute or
act may be said to be vague when it lacks comprehensible standards that men of common
intelligence must necessarily guess at its meaning and differ in its application. [In such instance,
the statute] is repugnant to the Constitution in two respects: (1) it violates due process for
failure to accord persons, especially the parties targeted by it, fair notice of the conduct to avoid;
and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes
an arbitrary flexing of the Government muscle.”
‘The oagueness doctrine is an analytical tool developed for testing "on their faces" statutes in free
speech cases or, as they are called in American law, First Amendment cases. A facial challenge
is allowed to be made to a vague statute and also to one which is overbroad because of possible
chilling effect’ on protected speech that comes from statutes violating free speech. A person
who does not know whether his speech constitutes a crime under an overbroad or vague law
may simply restrain himself from speaking in order to avoid being charged of a crime. The
overbroad or vague law thus chills him into silence.”
Itis best to stress that the vagueness doctrine has a special application only to free-speech cases.
They are not appropriate for testing the validity of penal statutes. (Lagman v. Medialdea, G.R. No.
231658, July 4, 2017)
Clearly, facial review of Proclamation No. 216 on the grounds of vagueness is unwarranted.
Proclamation No. 216 does not regulate speech, religious freedom, and other fundamental
rights that may be facially challenged. What it seeks to penalize is conduct, not speech. (Lagman
v. Medialdea, G.R. No. 231658, July 4, 2017)
The contention that the phrase "other rebel groups" leaves Proclamation No. 216 open to broad
interpretation, misinterpretation, and confusion, cannot be sustained. 200%.
The term “other rebel groups" in Proclamation No. 216 is not at all vague when viewed in the
context of the words that accompany it. Verily, the text of Proclamation No. 216 refers to "other
rebel groups" found in Proclamation No. 55, which it cited by way of reference in its Whereas
clauses. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
Neither could Proclamation No. 216 be described as vague, and thus void, on the ground that it
has no guidelines specifying its actual operational parameters within the entire Mindanao
region. Besides, operational guidelines will serve only as mere tools for the implementation of
the proclamation. In Part Il], we declared that judicial review covers only sufficiency of
32information or data available to or known to the President prior to, or at the time of, the
declaration or suspension. And, as will discussed exhaustively in Part VIl, the review will be
confined to the proclamation itself and the Report submitted to Congress.
Clearly, therefore, there is no need for the Court to determine the constitutionality of the
implementing and/or operational guidelines, general orders, arrest orders and other orders
issued after the proclamation for being irrelevant to its review. Thus, any act committed under
the said orders in violation of the Constitution and the laws, such as criminal acts or human
rights violations, should be resolved in a separate proceeding. Finally, there is a risk that if the
Court wades into these areas, it would be deemed trespassing into the sphere that is reserved
exclusively for Congress in exercise of its power to revoke. (Lagman v. Medialdea, G.R. No.
231658, July 4, 2017)
‘The Court's ruling in these cases will not, in any way, affect the President's declaration of a state
of national emergency on account of lawless violence in Mindanao through Proclamation No. 55
dated September 4, 2016, where he called upon the Armed Forces and tne Philippine National
Police (PNP) to undertake such measures to suppress any and all forms of lawless violence in
the Mindanao region, and to prevent such lawless violence from spreading and escalating
elsewhere in the Philippines. (Lagman v. Medialdea, G.R. No. 231658, July 4, 2017)
xox the President may exercise the power to call out the Armed Forces independently of the
power to suspend the privilege of the writ of habeas corpus and to declare martial law, although,
of course, it may also be a prelude to a possible future exercise of the latter powers, as in this
case.
Even so, the Court's review of the President's declaration of martial law and his calling out the
Armed Forces necessarily entails separate proceedings instituted for that particular purpose.
As explained in Integrated Bar of the Philippines v. Zamora, the President's exercise of his power to
call out the armed forces to prevent or suppress lawless violence, invasion or rebellion may only
be examined by the Court as to whether such power was exercised within permissible
constitutional limits or in a manner constituting grave abuse of discretion. (Lagraan v. Medialdea,
G.R. No. 231658, July 4, 2017)
Neither would the nullification of Proclamation No. 216 result in the nuilification of the acts of
the President done pursuant thereto. Under "operative fact doctrine," the unconstitutional
statute is recognized as an “operative fact" before it is declared ‘unconstitutional. xxx. However,
it must also be stressed that this "operative fact doctrine" is not a fool-proof shield that would
repulse any challenge to acts performed during the effectivity of martial law or suspension of
the privilege of the writ of habeas corpus, purportedly in furtherance of quelling rebellion or
invasion, and promotion of public safety, when evidence shows otherwise. (Lagman v.
Medialdea, G.R. No. 231658, July 4, 2017)
Lansang, however, was decided under the 1935 Constitution. The 1987 Constitution, by
providing only for judicial review based on the determination of the sufficiency of the factual
bases, has in fact done away with the test of arbitrariness as provided in Lansang. (Lagman 0.
Medialdea, G.R. No. 231658, july 4, 2017)
33We conclude, therefore, that Section 18, Article VII limits the scope of judicial review by the
introduction of the "sufficiency of the factual basis" test. (Lagman v. Medinldes, G.R, No. 231658,
July 4, 2017)
‘As to what facts must be stated in the proclamation and the written Report is up to the
President. As Commander-in-Chief, he has sole discretion to determine what to include and
what not to include in the proclamation and the written Report taking into account the urgency
of the situation as well as national security. He cannot be forced to divulge intelligence reports
and confidential information that may prejudice the operations and the safety of the military.
(Lagman: v. Medialden, G.R. No. 231658, July 4, 2017)
Similarly, events that happened after the issuance of the proclamation, which are included in
the writton report, cannot be considered in determining the sufficiency of the factual basis of the
declaration of martial law and/or the suspension of the privilege of the writ of habeus corpus
since these happened after the President had already issued the proclamation. If at all, they may
be used only as tools, guides or reference in the Court's determination of the sufficiency of
factual basis, but not as part or component of the portfolio of the factual basis itself. (Lagman v,
Medialdea, G.R. No. 231658, July 4, 2017)
In determining the sufficiency of the factual basis of the declaration and/or the suspension, the
Court should look into the full complement or totality of the factual basis, and not piecemeal or
individually. Neither should the Court expect absolute correctness of the facts stated in the
proclamation and in the written Report as the President could not be expected to verify the
accuracy and veracity of all facts reported to him due to the urgency of the situation. To require
precision in the President's appreciation of facts would unduly burden him and therefore
impede the process of his decision-making. Such a requirement will practically necessitate the
President to be on the ground to confirm the correctness of the reports submitted to him within
a period that only the circumstances obtaining would be able to dictate. Such a scenario, of
course, would not only place the President in peril but would also defeat the very purpose of
the grant of emergency powers upon him, that is, to borrow the words of Justice Antonio 'T.
Carpio in Fortun, to "immediately put an end to the root cause of the emergency". Possibly, by
the time the President is satisfied with the correctness of the facts in his possession, it would be
too late in the day as the invasion or rebellion could have already escalated to a level that is
hard, if not impossible, to curtail. (Lagman v. Medialdea, G.R. No. 231658, july 4, 2017)
‘At this juncture, it bears to emphasize that the purpose of judicial review is not the
determination of accuracy or veracity of the facts upon which the President anchored his
declaration of martial law or suspension of the privilege of the writ of hnbeas corpus; rather, only
the sufficiency of the factual basis as to convince the President that there is probable cause that
rebellion exists, It must also be reiterated that martial law is a matter of urgency and much
leeway and flexibility should be accorded the President. As such, he is not expected to
‘completely validate all the information received before declaring martial law or suspending the
privilege of the of habeas corpus. (Lagan v. Medialdea, G.R. No. 231658, July 4, 2017)Interpretation of Laws
Petitioners posit that Section 144 only applies to the provisions of the Corporation Code or its
amendments "not otherwise specifically penalized’ by said statute and should not cover
Sections 31 and 34 which both prescribe the "penalties' for their violation; namely, damages,
accounting and restitution of profits. On the other hand, respondent and the appellate court
have taken the position that the term “penalized” under Section 144 should be interpreted as
referring to criminal penalty, such as fine or imprisonment, and that it could not possibly
contemplate "civil" penalties such as damages, accounting or restitution.
As Section 144 speaks, among others, of the imposition of criminal penalties, the Court is
guided by the elementary rules of statutory construction of penal provisions. First, in all
criminal prosecutions, the existence of criminal liability for which the accused is made
answerable must be clear and certain. We have consistently held that "penal statutes are
construed strictly against the State and liberally in favor of the accused. When there is doubt on
the interpretation of criminal laws, all must be resolved in favor of the accused. Since penal
laws should not be applied mechanically, the Court must determine whether their application is
consistent with the purpose and reason of the law."
Intimately related to the in dubio pro reo principle is the rule of lenity. The rule applies when the
court is faced with two possible interpretations of a penal statute, one that is prejudicial to the
accused and another that is favorable to him. The rule calls for the adoption of an interpretation
which is more lenient to the accused,
In American jurisprudence, there are two schools of thought regarding the application of the
rule of lenity. Justice David Souter, writing for the majority in United States v. R.L.C., refused to
resort to the rule and held that lenity is reserved "for those situations in which a reasonable
doubt persists about a statute's intended scope even after resort to ‘the language and structure,
iegislative history, and motivating ‘policies’ of the statute." Justice Antonin Scalia, although
concurring in part and concurring in the judgment, argued that "it is not consistent with the rule
of lenity to construe a textually ambiguous penal statute against a criminal defendant on the
basis of legislative history... The rule of lenity, in my view, prescribes the result when a criminal
statute is ambiguous: The more lenient interpretation must prevail." In other words, for Justice
Scalia, textual ambiguity in a penal statute suffices for the rule of lenity to be applied. Although
foreign case law is merely persuasive authority and this Court is not bound by either legal
perspective expounded in United States v. R.L.C., said case provides a useful framework in our
‘own examination of the scope and application of Section 144.
‘After a meticulous consideration of the arguments presented by both sides, the Court comes to
the conclusion that there is textual ambiguity in Section 144; moreover, such ambiguity remains
even after an examination of its legislative history and the use of other aids to statutory
construction, necessitating the application of the rule of lenity in the case at bar. (Sciulze v.
Tullett Prebon (Philippines), Inc., G.R. No. 189158, January 11, 2017)
In Crandon v. United States, the U.S. Supreme Court had the occasion to state that:In determining the meaning of the statute, we look not only to the particular statutory
Ianguage, but to the design of the statute as a whole and to its object and policy.
Moreover, because the governing standard is set forth in a criminal statute, it is
appropriate to apply the rule of Ienity in resolving any ambiguity in the ambit of the
statute's coverage. To the extent that the language or history of [the statute] is uncertain,
this “time-honored interpretive guideline" serves to ensure both that there is fair warning,
of the boundaries of criminal conduct and that legislatures, not courts, define criminal
liability. (Citations omitted; emphases supplied.)
Under the circumstances of this case, we are convinced to adopt a similar view. For this reason,
we take into account the avowed legislative policy in the enactment of the Corporation Code as
outlined in the Sponsorship Speech of Minister Mendoza:
Cabinet Bill No. 3is entitled "The Corporation Code of the Philippines." Its consideration
at this time in the history of ot nation provides a fitting occasion te remind that under
our Constitution the economic system known as "free enterprise” is recognized and
protected. We acknowledge as a democratic republic that the individual must be free and
that as a free man - "free to choose his work and to retain the fruits of his labor" he may
best develop his capabilities and will produce and supply the economic needs of the
nation, xxx
‘The formation and organization of private corporations, and 1 underscore private
corporations as distinguished from corporations owned or controlled by the government
or any subdivision or instrumentality thereof, gives wider dimensions to free enterprise
or free trade. For not only is the right of individuals to organize collectively recognized;
the collective organization is vested with a juridical personality distinct from their own
‘Thus "the skill, dexterity, and judgment" of a nation's labor force need not be constricted
in their application to those of an individual or that which he alone may assemble but to
those of a collective organization.
While a code, such as the proposed code now before us, may appear essentially
regulatory in nature, It does not, and is not intended, to curb or stifle the use of the
corporate entity as a business organization. Rather, the proposed code recognizes the
value, and seeks to inspire confidence in the value of the corporate vehicle in the
economic life of society. (Emphases supplied.)
‘The Corporation Code was intended as a regulatory measure, not primarily as a penal statute.
Sections 31 to 34 in particular were intended to impose exacting standards of fidelity on
corporate officers and directors but without unduly impeding them in the discharge of their
work with concerns of litigation. Considering the object and policy of the Corporation Code to
encourage the use of the corporate entity as a vehicle for economic growth, we cannot espouse a
strict construction of Sections 31 and 34 as penal offenses in relation to Section 144 in the
absence of unambiguous statutory language and legislative intent to that effect.
When Congress intends to criminalize certain acts it does so in plain, categorical language,
otherwise such a statute would be susceptible to constitutional attack. As earlier discussed, this
can be readily seen from the text of Section 45) of Republic Act No. 8189 and Section 74 of the
Corporation Code.
We stress that had the Legislature intended to attach penal sanctions to Sections 31 and $4 of the
36Corporation Code it could have expressly stated such intent in the same manner that it did for
Section 74 of the same Code. (Schulze v. Tullett Prebon (Philippines), Inc, G.R. No. 189158, January
11, 2017)
jurisdiction
The Code of Muslim Personal Laws of the Philippines (Code of Mustim Personal Laws) vests concurrent
jurisdiction upon Sharia district courts over personal and real actions wherein the parties involved are Muslims,
‘except those for forcible entry and unlawful detainer. The question presented is whether the Shari'a District Court
of Marawi City has jurisdiction in an action for recavery of possession filed by Muslim individuals against a
municipality whose mayor is a Muslim. The respondent judge held that it has. We reverse.
‘The matters over which Shari'a district courts have Jurisdiction are enumerated in the Code of
Muslim Personal Laws, specifically in Article 143. Consistent with the purpose of the law to
provide for an effective administration and enforcement of Muslim personal laws among
Muslims, it has a catchall provision granting Shari'a district courts original jurisdiction over
personal and real actions except those for forcible entry and unlawful detainer. The Shari'a
district courts’ jurisdiction over these matters is concurrent with regular civil courts, ic.,
municipal trial courts and regional trial courts. There is, however, a limit to the general
jurisdiction of Shari'a district courts over matters ordinarily cognizable by regular courts: such
jurisdiction may only be invoked if both parties are Muslims. If one party is not a Muslim, the
action must be filed before the regular courts.
‘The complaint below, which is a real action involving title to and possession of the land situated
at Barangay Banisilon, Tangkal, was filed by private respondents before the Shari'a District
Court pursuant to the general jurisdiction conferred by Article 143(2)(b). In determining
whether the Shari'a District Court has jurisdiction over the case, the threshold question is
whether both parties are Muslims, There is no disagreement that private respondents, as
plaintiffs below, are Muslims. The only dispute is whether the requirement is satisfied because
the mayor of the defendant municipality is also a Muslim. x0.
It is clear from the title and the averments in the complaint that Mayor Batingolo was
impleaded only in a representative capacity, as chief executive of the local government of
Tangkal. When an action is defended by a representative, that representative is not-and neither
does he become-a real party in interest. The person represented is deemed the real party in
interest; the representative remains to be a third party to the action. That Mayor Batingolo is a
Muslim is therefore irrelevant for purposes of complying with the jurisdictional requirement
under Article 143(2)(b) that both parties be Muslims. To satisfy the requirement, it is the real
party defendant, the Municipality of Tangkal, who must be a Muslim. Such a proposition,
however, is a legal impossibility.
‘The Code of Muslim Personal Laws defines a "Muslim' as "a person who testifies to the oneness
of God and the Prophethood of Muhammad and professes Islam." Although the definition does
not explicitly distinguish between natural and juridical persons, it nonetheless connotes the
exercise of religion, which is a fundamental personal right. The ability to testify to the "oneness
of God and the Prophethood of Muhammad" and to profess Islam is, by its nature, restricted to
natural persons. In contrast, juridicai persons are artificial beings with “no consciences, no
beliefs, no feelings, no thoughts, no desires." They are considered persons only by virtue of legal
37fiction. The Municipality of Tangkal falls under this category. Under the Local Government
Code, a municipality is a body politic and corporate that exercises powers as a political
subdivision of the national government and as a corporate entity representing the inhabitants of
its territory. (Municipality of Tangkal v. Balindong, G.R. No. 193340, January 11, 2017)
Contrary to complainant's allegation, respondent judge is correct in stating that he is prohibited
from issuing a writ of preliminary mandatory injunction in the case filed by SFC and
complainant. Although the prohibition against the issuance of a writ of preliminary mandatory
injunction was not expressly stated under A.M. No. 09-6-8-SC, such prohibition is very clear
‘under Section I of PD 605 which reads:
SECTION 1. No court of the Philippines shall have jurisdiction to issue any restraining,
order, preliminary injunction or preliminary mandatory injunction in any case
involving or growing out of the issuance, approval or disapproval, revocation oF
suspension of, or any action whatsoever by proper administrative official or body on
concessions, licenses, permits, patents, or public g-ants of any kind in connection with
the disposition, exploitation, utilization, exploration, and/ or development of the natural
resources of the Philippines. (Emphasis supplied)
‘The case filed by SEC and complainant to compel the renewal of the license of their fishing
vessel is clearly covered under Section 1 of PD 605, prohibiting the issuance of a writ of
preliminary mandatory injunction in any case involving the disapproval, revocation or
suspension of a license in connection with the exploitation of natural resources. It was therefore
proper for respondent judge to deny their prayer for the issuance of a writ of preliminary
mandatory injunction. Besides, respondent judge four-d that complainant failed to show that
there is a clear and inescapable right to be protected which would justify the issuance of a writ
of preliminary mandatory injunction. (Ortega v. Judge Dacara, AM. No. RTJ-15-2423, January 11,
2017)
Republic Act No. 9282, which amended Republic Act No. 1125, took effect on April 23, 2004,
and significantly expanded the extent and scope of the cases that the Court of Tax Appeals was
tasked to hear and adjudicate. Under Section 7, paragraph (a)(3), the Court of ‘lax Appeals is
vested with the exclusive appellate jurisdiction over, among others, appeals from the "decisions,
orders or resolutions of the Regional Trial Courts in local tax cases originally decided or
resolved by them in the exercise of their original or appeliate jurisdiction."
‘The case a quo is a local tax case that is within the exclusive appellate jurisdiction of the Court of
‘Tax Appeals. Parenthetically, the case arose from the dispute between Napocor and
respondents over the purported franchise tax delinquency of Napocor. Although the complaint
filed with the trial court is a Petition for declaration of nullity of foreclosure sale with prayer for
preliminary mandatory injunction, a reading of the petition shows that it essentially assails the
correctness of the local franchise tax assessments by the Provincial Government of Bataan.
Indeed, one of the prayers in the petition is for the court a quo to declare Napocor "as exempt
from payment of local franchise taxes." Basic is the rule that allegations in the complaint and the
character of the relief sought determine the nature of an action. In order for the trial court to
resolve the complaint, the issues regarding the correctness of the tax assessment and collection
must also necessarily be dealt with. As correctly ruled by the Court of Appeals, "the issue of the
38validity and legality of the foreclosure sale is essentially related to the issue of the
demandability of the local franchise tax."
Therefore, the dismissal of Napocor's appeal by the Court of Appeals was in order. Napocor's
procedural lapse would have been sufficient to reconsider this Court's decision and instead
deny the instant petition. However, the substantial merits of the case and the patent error
committed by the Bataan Regional Trial Court compels this Court to exercise its power of
judicial review for purposes of judicial economy. (National Power Corporation v. Provincial
Government of Bataan, G.R. No. 180654, March 6, 2017)
‘The Muslim Code recognizes divorce in marriages between Muslims, and mixed marriages
wherein only the male party is a Muslim and the marriage is solemnized in accordance with
Muslim law or the Muslim Code in any part of the Philippines. At present, this is the only law
in the Philippines that allows domestic divorce. xxx.
Jurisdiction over actions for divorce is vested upon the Shari'a Circuit Courts, whose decisions
may be appealed to the Shari'a District Courts.
Under the Special Rules of Procedure in Shari’ Courts, an appeal must be made within a
reglementary period of 15 days from receipt of judgment. The judgment shall become final and
executory after the expiration of the period to appeal, or upon decision of the Shari 'a District
Courts on appeal from the Shari 'a Circuit Court. (Pacasum v. Zamoranos, G.R. No. 198719, March
21, 2017)
Generally, the office of prohibition is to prevent the unlawful and oppressive exercise of
authority and is directed against proceedings that are done without or in excess of jurisdiction,
or with grave abuse of discretion, there being no appeal or other plain, speedy, and adequate
remedy in the ordinary course of law. It is the remedy to prevent inferior courts, corporations,
ards, or persons from usurping or exercising a jurisdiction or power with which they have not
been vested by law. This is, however, not the lone office of an action for prohibition. In Diaz, et
al. v. The Secretary of Finance, et al., prohibition was also recognized as a proper remedy to
prohibit or nullify acts of executive officials that amount to usurpation of legislative authority.
‘And, in a number of jurisprudence, prohibition was allowed as a proper action to assail the
constitutionality of a law or prohibit its implementation. (Southern Luzon Drug Corporation v. The
Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017)
Clearly, prohibition has been found an appropriate remedy to challenge the constitutionality of
various laws, rules, and regulations, (Southern Luzon Drug Corporation v. The Department of Social
Welfare and Development, G.R. No. 199669, April 25, 2017)
Actual Case or Controversy
Further, anent the claim of respondent De Borja that the Petition had already been rendered
moot and academic due to the dismissal of Civil Case No. 0003 by the SB, the Court finds the
same lacking in merit. It is axiomatic that a dismissal on the basis of a demurrer to evidence is
similar to a judgment; it is a final order ruling on the merits of a case. Hence, when petitioner
Republic brought the instant appeal before this Court, the same was limited to respondent De
39