KILOSBAYAN vs.

MORATO (Nov 1995)

FACTS:
In Jan. 25, 1995, PCSO and PGMC signed an Equipment Lease Agreement (ELA) wherein
PGMC leased online lottery equipment and accessories to PCSO. (Rental of 4.3% of the
gross amount of ticket or at least P35,000 per terminal annually). 30% of the net receipts is
allotted to charity. Term of lease is for 8 years. PCSO is to employ its own personnel and
responsible for the facilities. Upon the expiration of lease, PCSO may purchase the equipment
for P25 million.
Feb. 21, 1995. A petition was filed to declare ELA invalid because it is the same as the
Contract of Lease
Petitioner's Contention:
 ELA was same to the Contract of Lease.
 It is still violative of PCSO's charter.
 It is violative of the law regarding public bidding.
 It violates Sec. 2(2) of Art. 9-D of the 1987 Constitution.
 Standing can no longer be questioned because it has become the law of the case
Respondent's reply:
 ELA is different from the Contract of Lease.
 There is no bidding required.
 The power to determine if ELA is advantageous is vested in the Board of Directors of
PCSO.
 PCSO does not have funds.
 Petitioners seek to further their moral crusade.
 Petitioners do not have a legal standing because they were not parties to the contract 

ISSUES: 
(1) Whether or not the petitioners’ legal standing can no longer be questioned bec it has
become the law of the case – NO
(2) Whether or not the ELA between PCSO and the PGMC is invalid – NO

RULING:
1. Whether or not the petitioners’ legal standing can no longer be questioned bec it has
become the law of the case?
NO. Since ELA is a different contract, the previous decision does not preclude
determination of the petitioner's standing.
The Court also ruled that petitioners do not question the validity of the law allowing
lotteries. It is the CONTRACT entered into by the PCSO and the PGMC which they are
ASSAILING. This case, therefore, does NOT raise issues of CONSTI. but ONLY of
CONTRACT LAW, which petitioners, NOT being PRIVIES to the AGREEMENT, cannot
raise.

NEVERTHELESS, although we have concluded that petitioners do not have standing, the
Court DID NOT STOPPED THERE AND DISMISSED THEIR CASE . For in the view we take, whether
a party has a cause of action and, therefore, is a real party in interest or one with standing to raise a constitutional
question must turn on whether he has a right which has been violated. For this reason the Court has not ducked
the substantive issues raised by petitioners.

2. Whether or not the ELA between PCSO and the PGMC is invalid

NO. ELA is substantially different from the Contract of Lease declared void in the first
case.

that the ELA is VALID as a lease contract under the Civil Code and is NOT
CONTRARY to the charter of the PCSO;
that under Sec. 1(A) of its charter (R.A. 1169 as amended by BP 42), the PCSO has
authority to enter into a contract for the holding of an on-line lottery, whether alone
or in association, collaboration or joint venture with another party, so long as it
itselfholds or conducts such lottery; and
that ELA in question did not have to be submitted to public bidding as a condition
for its validity.
EO 301, Sec.1 applies only to contracts for the purchase of supplies, materials and
equipment. It does not refer to contracts of lease of equipment like the ELA. The provisions
on lease are found in Sections 6 and 7 but they refer to the lease of privately-owned
buildings or spaces for government use or of government-owned buildings or spaces for
private use, and these provisions DO NOT REQUIRE PUBLIC BIDDING.
It is thus difficult to see how EO 301 can be applied to the ELA when the only feature of the ELA
that may be thought of as close to a contract of purchase and sale is the option to buy given to
the PCSO. An option to buy is not of course a contract of purchase and sale.

E.O. No. 301 applies only to contracts for the purchase of supplies, materials and
equipment, and it was merely to change the system of administrative review of emergency
purchases, as theretofore prescribed by E.O. No. 298, that E.O. No. 301 was issued on July 26,
1987. Part B of this Executive Order applies to leases of buildings, not of equipment, and
therefore does not govern the lease contract in this case. Even if it applies, it does not
require public bidding for entering into it.

https://www.chanrobles.com/cralaw/1995julydecisions.php?id=861
https://engrjhez.wordpress.com/2013/04/25/kilosbayan-vs-morato-g-r-no-118910-july-17-1995/
https://www.scribd.com/document/355912257/Kilosbayan-vs-Morato-Digest
http://www.thezamboanguena.com/2017/06/kilosbayan-vs-morato-g-r-no-118910-17-jul-1995-
246-scra-540/
http://lapispapelatereyser.blogspot.com/2012/10/case-digest_11.html
https://www.gppb.gov.ph/laws/laws/EO_301-1987.pdf

HELD: NO.
STARE DECISIS cannot apply. The previous ruling sustaining the standing of the petitioners is
a departure from the settled rulings on real parties in interest because no constitutional issues
were actually involved.  
LAW OF THE CASE cannot also apply. Since the present case is not the same one litigated
by theparties before in Kilosbayan vs. Guingona, Jr., the ruling cannot be in any sense be
regarded as the law of this case. The parties are the same but the cases are not.
RULE ON CONCLUSIVENESS cannot still apply. An issue actually and directly passed upon
and determine in a former suit cannot again be drawn in question in any future action between
the same parties involving a different cause of action. But the rule does not apply to issues of
law at least when substantially unrelated claims are involved. When the second proceeding
involves an instrument or transaction identical with, but in a form separable from the one dealt
with in the first proceeding, the Court is free in the second proceeding to make an independent
examination of the legal matters at issue.
Since ELA is a different contract, the previous decision does not preclude determination
of the petitioner's standing. STANDING is a concept in constitutional law and here no
constitutional question is actually involved. The more appropriate issue is whether the
petitioners are REAL PARTIES in INTEREST. 

1. Kilosbayan v. Morato, G.R. No. 118910, November 16, 1995

https://lawphil.net/judjuris/juri1995/nov1995/gr_118910_1995.html

FACTS: The parties signed an Equipment Lease Agreement (ELA) whereby the PGMC
leased online lottery equipment and accessories to the PCSO in consideration of a rental
equivalent to 4.3% of the gross amount of ticket sales derived by the PCSO from the operation
of the lottery which in no case shall be less than an annual rental computed at P35,000.00 per
terminal in commercial operation. The rental is to be computed and paid bi-weekly. In the event
the bi-weekly rentals in any year fall short of the annual minimum fixed rental thus computed,
the PCSO agrees to pay the deficiency out of the proceeds of its current ticket sales.
Under the law, 30% of the net receipts from the sale of tickets is allotted to charity. The term
of the lease is eight (8) years.
A suit was filed seeking to declare the ELA invalid on the ground that it is substantially the
same as the Contract of Lease nullified in the first case.
The PCSO and PGMC filed separate comments questioning the petitioners' legal standing.
They maintain
(1) that the ELA is a different lease contract with none of the vestiges of a joint venture
which were found in the Contract of Lease nullified in the prior case;
(2) that the ELA did not have to be submitted to a public bidding because it fell
within the exception provided in EO 301, Sec. 1 (e);
(3) that the power to determine whether the ELA is advantageous to the government is
vested in the Board of Directors of the PCSO;
(4) that for lack of funds the PCSO cannot purchase its own on-line lottery
equipment and has had to enter into a lease contract;
(5) that what petitioners are actually seeking in this suit is to further their moral crusade
and political agenda, using the Court as their forum.

ISSUE: Whether or not the ELA between PCSO and the PGMC is invalid.
RULING: NO. The Court ruled
that the ELA is VALID as a lease contract under the Civil Code and is NOT
CONTRARY to the charter of the PCSO;
 that under Sec. 1(A) of its charter (R.A. 1169 as amended by BP 42), the PCSO has
authority to enter into a contract for the holding of an on-line lottery, whether alone
or in association, collaboration or joint venture with another party, so long as it
itselfholds or conducts such lottery; and
that ELA in question did not have to be submitted to public bidding as a condition
for its validity.
EO 301, Sec.1 applies only to contracts for the purchase of supplies, materials and
equipment. It does not refer to contracts of lease of equipment like the ELA. The provisions
on lease are found in Sections 6 and 7 but they refer to the lease of privately-owned
buildings or spaces for government use or of government-owned buildings or spaces for
private use, and these provisions do not require public bidding. It is thus difficult to see how EO
301 can be applied to the ELA when the only feature of the ELA that may be thought of as close
to a contract of purchase and sale is the option to buy given to the PCSO. An option to buy is
not of course a contract of purchase and sale.

KILOSBAYAN vs. MANUEL L. MORATO
G.R. No. 118910. November 16, 1995.

FACTS:  In Jan. 25, 1995, PCSO and PGMC signed an Equipment Lease Agreement (ELA)
wherein PGMC leased online lottery equipment and accessories to PCSO. (Rental of 4.3%
of the gross amount of ticket or at least P35,000 per terminal annually). 30% of the net receipts
is allotted to charity. Term of lease is for 8 years. PCSO is to employ its own personnel and
responsible for the facilities. Upon the expiration of lease, PCSO may purchase the equipment
for P25 million.
Feb. 21, 1995. A petition was filed to declare ELA invalid because it is the same as the
Contract of Lease
Petitioner's Contention:
 ELA was same to the Contract of Lease.
 It is still violative of PCSO's charter.
 It is violative of the law regarding public bidding.
 It violates Sec. 2(2) of Art. 9-D of the 1987 Constitution.
 Standing can no longer be questioned because it has become the law of the case
Respondent's reply:
 ELA is different from the Contract of Lease.
 There is no bidding required.
 The power to determine if ELA is advantageous is vested in the Board of Directors of
PCSO.
 PCSO does not have funds.
 Petitioners seek to further their moral crusade.
 Petitioners do not have a legal standing because they were not parties to the contract 
ISSUES:  Whether or not the petitioners have standing?

HELD: NO.
STARE DECISIS cannot apply. The previous ruling sustaining the standing of the petitioners is
a departure from the settled rulings on real parties in interest because no constitutional issues
were actually involved.  
LAW OF THE CASE cannot also apply. Since the present case is not the same one litigated
by theparties before in Kilosbayan vs. Guingona, Jr., the ruling cannot be in any sense be
regarded as the law of this case. The parties are the same but the cases are not.
RULE ON CONCLUSIVENESS cannot still apply. An issue actually and directly passed upon
and determine in a former suit cannot again be drawn in question in any future action between
the same parties involving a different cause of action. But the rule does not apply to issues of
law at least when substantially unrelated claims are involved. When the second proceeding
involves an instrument or transaction identical with, but in a form separable from the one dealt
with in the first proceeding, the Court is free in the second proceeding to make an independent
examination of the legal matters at issue.
Since ELA is a different contract, the previous decision does not preclude determination
of the petitioner's standing. STANDING is a concept in constitutional law and here no
constitutional question is actually involved. The more appropriate issue is whether the
petitioners are REAL PARTIES in INTEREST. 

R.A. No. 1169, as amended by B.P No . 42, states:

§1. The Philippine Charity Sweepstakes Office. — The Philippine Charity Sweepstakes Office, hereinafter
designated the Office, shall be the principal government agency for raising and providing for funds for
health programs, medical assistance and services and charities of national character, and as such shall
have the general powers conferred in section thirteen of Act Numbered One Thousand Four Hundred
Fifty-Nine, as amended, and shall have the authority:
A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such
frequency and manner, as shall be determined, and subject to such rules and regulations as shall
be promulgated by the Board of Directors.
B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-
related investments, programs, projects and activities which may be profit-oriented, by itself or in
collaboration, association or joint venture with any person, association, company or entity,
whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A),
for the purpose of providing for permanent and continuing sources of funds for health programs,
including the expansion of existing ones, medical assistance and services, and/or charitable
grants: Provided, That such investments will not compete with the private sector in areas where
investments are adequate as may be determined by the National Economic and Development
Authority.

Indeed, the purpose for promulgating E.O. No. 301 was merely to decentralize the system of
reviewing negotiated contracts of purchase for the furnishing of supplies, materials and equipment as
well as lease contracts of buildings. Theretofore, E.O. No. 298, promulgated on August 12, 1940, required
consultation with the Secretary of Justice and the Department Head concerned and the approval of the
President of the Philippines before contracts for the furnishing of supplies, materials and equipment could
be made on a negotiated basis, without public bidding. E.O. No. 301 changed this by providing as follows:
§2. Jurisdiction over Negotiated Contracts. — In line with the principles of decentralization and
accountability, negotiated contracts for public services or for furnishing supplies, materials or
equipment may be entered into by the department or agency head or the governing board of the
government-owned or controlled corporation concerned, without need of prior approval by higher
authorities, subject to availability of funds, compliance with the standards or guidelines prescribed
in Section 1 hereof, and to the audit jurisdiction of the commission on Audit in accordance with
existing rules and regulations.
Negotiated contracts involving P2,000,000 up to P10,000,000 shall be signed by the Secretary
and two other Undersecretaries.
xxx xxx xxx
§7. Jurisdiction Over Lease Contracts. — The heads of agency intending to rent privately-owned
buildings or spaces for their use, or to lease out government-owned buildings or spaces for
private use, shall have authority to determine the reasonableness of the terms of the lease and
the rental rates thereof, and to enter into such lease contracts without need of prior approval by
higher authorities, subject to compliance with the uniform standards or guidelines established
pursuant to Section 6 hereof by the DPWH and to the audit jurisdiction of COA or its duly
authorized representative in accordance with existing rules and regulations.
Our holding that E.O. No. 301, §1 applies only to contracts of purchase and sale is conformable to P.D.
No. 526, promulgated on August 2, 1974, which is in pari materia. P.D. No. 526 requires local
governments to hold public bidding in the "procurement of supplies." By specifying "procurement of
supplies" and excepting from the general rule "purchases" when made under certain circumstances, P.D.
No. 526, §12 indicates quite clearly that it applies only to contracts of purchase and sale. This provision
reads:
§12. Procurement without public bidding. — Procurement of supplies may be made without the
benefit of public bidding in the following modes:
(1) Personal canvass of responsible merchants;
(2) Emergency purchases;
(3) Direct purchases from manufacturers or exclusive distributors;
(4) Thru the Bureau of Supply Coordination; and
(5) Purchase from other government entities or foreign governments.
Sec. 3 broadly defines the term "supplies" as including —
everything except real estate, which may be needed in the transaction of public business,
or in the pursuit of any undertaking, project, or activity, whether of the nature of
equipment, furniture, stationery, materials for construction, or personal property of any
sort, including non-personal or contractual services such as the repair and maintenance
of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or
analogous services.

Thus, the texts of both E.O. No. 301, §1 and of P.D. No. 526, §§1 and 12, make it clear that only
contracts for the purchase and sale of supplies, materials and equipment are contemplated by
the rule concerning public biddings.
Finally, it is contended that equipment leases are attractive and commonly used in place of
contracts of purchase and sale because of "multifarious credit and tax constraints" and therefore
could not have been left out from the requirement of public bidding. Obviously these credit and
tax constraints can have no attraction to the government when considering the advantages of
sale over lease of equipment. The fact that lease contracts are in common use is not a reason
for implying that the rule on public bidding applies not only to government purchases but also to
lease contracts. For the fact also is that the government leases equipment, such as copying
machines, personal computers and the like, without going through public bidding.

2. Chavez v. PEA (Public Estates Authority) and AMARI Coastal Bay Development Corp.,
G.R. No. 133250, July 9, 2002
https://www.lawphil.net/judjuris/juri2002/jul2002/gr_133250_2002.html

FACTS: The government, through the Commissioner of Public Highways, signed a contract
with the Construction and Development Corporation of the Philippines (CDCP) to RECLAIM
certain foreshore and offshore areas of Manila Bay. The contract also included the
construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to
carry out all the works in consideration of 50% of the total reclaimed land.
PEA through PD 1084 (signed by Marcos) was tasked to reclaim, develop, lease and sell all
kinds of lands. January 19, 1988, then President Corazon C. Aquino issued Special Patent No.
3517, granting and transferring to PEA "the parcels of land so reclaimed under the Manila-
Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total area of 1,915,894
square meters."
Subsequently, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private
corporation, to develop the Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas to complete the configuration in the Master
Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI entered
into the JVA through negotiation without public bidding.
Former Senate President Maceda denounced the JVA as the "grandmother of all scams.
Among the conclusions of their report are:
(1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the
public domain which the government has not classified as alienable lands and therefore
PEA cannot alienate these lands;
(2) the certificates of title covering the Freedom Islands are thus void, and
 (3) the JVA itself is illegal.
Due to the approval of the Amended JVA by the Office of the President during the Estrada
administration, petitioner now prays that on "constitutional and statutory grounds the
renegotiated contract be declared null and void."

ISSUE: Whether or not the stipulations in the amended JVA for the transfer to AMARI of
certain lands, reclaimed and still to be reclaimed, violate the 1987 Constitution.

RULING: YES. Since the Amended JVA seeks to transfer to AMARI, a private corporation,
ownership of 77.34 hectares of the Freedom Islands, such transfer is VOID for being contrary
to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from
acquiring any kind of alienable land of the public domain.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares
which are still submerged and forming part of Manila Bay. There is NO LEGISLATIVE or
PRESIDENTIAL ACT CLASSIFYING these submerged areas as ALIENABLE or
DISPOSABLE lands of the public domain open to disposition. These submerged areas are
NOT COVERED by any patent or certificate of title. There can be no dispute that these
submerged areas form part of the PUBLIC DOMAIN, and without the govt’s declaration, their
present state are inalienable and outside the commerce of man.
PEA may reclaim these submerged areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and further declare them no longer needed for
public service. Still, the transfer of such reclaimed alienable lands of the public domain to
AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land of the public domain.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title
and ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay
to a single private corporation. It now becomes more compelling for the Court to resolve the
issue to insure the government itself does not violate a provision of the Constitution intended to
safeguard the national patrimony. Supervening events, whether intended or accidental, cannot
prevent the Court from rendering a decision if there is a grave violation of the Constitution. In
the instant case, if the Amended JVA runs counter to the Constitution, the Court can still prevent
the transfer of title and ownership of alienable lands of the public domain in the name of AMARI.
Even in cases where supervening events had made the cases moot, the Court did not hesitate
to resolve the legal or constitutional issues raised to formulate controlling principles to guide the
bench, bar, and the public.

The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns all lands and waters of the public domain.
Upon the Spanish conquest of the Philippines, ownership of all "lands, territories and
possessions" in the Philippines passed to the Spanish Crown.42 The King, as the sovereign ruler
and representative of the people, acquired and owned all lands and territories in the Philippines
except those he disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however,
the State, in lieu of the King, as the owner of all lands and waters of the public domain. The
Regalian doctrine is the foundation of the time-honored principle of land ownership that "all
lands that were not acquired from the Government, either by purchase or by grant, belong to the
public domain."43 Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code
of 1950, incorporated the Regalian doctrine.

3. Laurel v. Garcia, G.R. Nos. 92013 and 92047, July 25, 1990
https://lawphil.net/judjuris/juri1990/jul1990/gr_92013_1990.html

FACTS: The subject property in this case is one of the 4 properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan, the
Roppongi property. The said property was acquired from the Japanese government through
Reparations Contract No. 300.
It consists of the land and building for the Chancery of the Philippine Embassy. As intended,
it became the site of the Philippine Embassy until the latter was transferred to Nampeidai
when the Roppongi building needed major repairs. President Cory Aquino created a
committee to study the disposition/utilization of Philippine government properties in Tokyo
and Kobe, Japan. The President issued EO 296 entitling non-Filipino citizens or entities to
avail of separations' capital goods and services in the event of sale, lease or disposition.

ISSUE: Whether or not the Roppongi property and others of its kind can be alienated by the
Philippine Government.

HELD: NO. The Roppongi property was acquired together with the other properties
through reparation agreements. They were assigned to the government sector and that
the Roppongi property was specifically designated under the agreement to house the
Philippine embassy.
It is of PUBLIC DOMINION unless it is convincingly shown that the property has
become patrimonial. The respondents have failed to do so.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot
be alienated. Its ownership is a special collective ownership for general use and payment, in
application to the satisfaction of collective needs, and resides in the social group. The
purpose is not to serve the State as the juridical person but the citizens; it is intended for the
common and public welfare and cannot be the object of appropriation.
The fact that the Roppongi site has not been used for a long time for actual Embassy service
doesn’t automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use. A property continues to be part of the public domain, not
available for private appropriation or ownership until there is a formal declaration on the part of
the government to withdraw it from being such.

The subsequent approval on October 4, 1988 by President Aquino of the recommendation by the
investigating committee to sell the Roppongi property was premature or, at the very least, conditioned on
a valid change in the public character of the Roppongi property. Moreover, the approval does not have
the force and effect of law since the President already lost her legislative powers. The Congress had
already convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of public dominion,
there is another obstacle to its sale by the respondents.
There is no law authorizing its conveyance.

4. Miners Association v. Factoran, Jr., G.R. No. 98332, January 16, 1995
https://lawphil.net/judjuris/juri1995/jan1995/gr_98332_1995.html

FACTS: July 10, 1987: Former President Cory Aquino issued E.O. Nos. 211 and 279 in the
exercise of her legislative powers. EO No. 211 prescribes the interim procedures in the
processing and approval of applications for the exploration, development and utilization
of minerals pursuant to Sec. 2, Article XII of the 1987 Constitution. EO No. 279 authorizes the
DENR Secretary to negotiate and conclude joint-venture, co-production, or production-
sharing agreements for the exploration, development, and utilization of mineral
resources.
The issuance and the impeding implementation by the DENR of AO No. 57 which declares that
all existing mining leases or agreements which were granted after the effectivity of the
1987 Constitution…shall be CONVERTED into production-sharing agreements within one
(1) year from the effectivity of these guidelines.” and AO No. 82 which provides that a
FAILURE to submit Letter of Intent and Mineral Production-Sharing Agreement within 2
years from the effectivity of the Department Administrative Order No. 57 shall CAUSE THE
ABANDONMENT of the mining, quarry, and sand and gravel claims, after their respective
effectivity dates compelled the Miners Association of the Philippines, Inc., an organization
composed of mining prospectors and claim owners and claim holders, to file the instant petition
assailing their validity and constitutionality before this Court.

ISSUE: Whether or not the two Department Administrative Orders are valid.
HELD: YES. In all other areas of administration and management of mineral lands, the
provisions of PD. 463, as amended, and other existing mining laws, still govern. Sec. 7 of EO
279 provides, thus: Sec. 7. All provisions of PD 463, as amended, other existing mining laws,
and their implementing rules and regulations, or parts thereof, which are not inconsistent with
the provisions of this Executive Order, shall continue in force and effect.
Well-settled is the rule, however, that regardless of the reservation clause, mining leases or
agreements granted by the State, such as those granted pursuant to EO 211 referred to this
petition, are subject to alterations through a reasonable exercise of the police power of the
State.
Accordingly, the State, in the exercise of its police power in this regard, may not be
precluded by the constitutional restriction on non-impairment of contract from altering,
modifying and amending the mining leases or agreements granted under PD 463, as amended,
pursuant to EO 211. Police Power, being co-extensive with the necessities of the case and the
demands of public interest; extends to all the vital public needs. The passage of EO 279
which superseded EO 211 provided legal basis for the DENR Secretary to carry into effect the
mandate of Article XII, Sec. 2 of the 1987 Constitution.

5. Director of Lands v. Intermediate Court of Appeals, 146 SCRA 509 (1986) 

https://www.lawphil.net/judjuris/juri1986/dec1986/gr_73002_1986.html

FACTS: The subject property is a PRIVATE LAND pursuant to the provision of RA No. 3872
which GRANTED ABSOLUTE OWNERSHIP to members of the non-Christian Tribes. On
October 26, 1962, ACME Plywood Veneer Co. Inc. ACQUIRED the subject land from Mariano
and Acer Infiel who were members of the Dumagat Tribe and as such are cultural minorities.
It should be noted that at the time of the sale, the 1935 Constitution was still in force.
Thereafter, Acme commenced the registration proceedings for the confirmation of title
under Section 48 of the Public Land Act (CA No. 141). The Director of Lands contested to the
proceedings alleging that at the time registration proceedings have been commenced the 1973
Constitution was already in effect and Section 11 of Article XIV thereof prohibits private
corporations or associations from holding alienable lands of the public domain, except
by lease not to exceed 1,000 hectares.

ISSUE: Whether or not the title that the Infiels had transferred to Acme in 1962 could be
confirmed in favor of the latter in proceedings instituted by it in 1981 when the 1973
Constitution was already in effect.

RULING: YES, the Supreme Court held that the land subject of this appeal was ALREADY
PRIVATE PROPERTY AT THE TIME it was ACQUIRED from the Infiels BY ACME. Acme
thereby acquired a registrable title, there being at the time no prohibition against said
corporation's holding or owning private land.
Alienable public land held by a possessor, personally or through his predecessors-in-
interest, openly, continuously and exclusively for the prescribed statutory period (30 years
under The Public Land Act, as amended) is CONVERTED to private property by the mere
lapse or completion of said period, ipso jure.
The Supreme Court further held that the purely accidental circumstance that confirmation
proceedings were brought under the aegis of the 1973 Constitution which forbids corporations
from owning lands of the public domain cannot defeat a right already vested before that law
came into effect, or invalidate transactions then perfectly valid and proper. The Constitution
cannot impair vested rights acquired before its effectivity.

6. Albano v. Reyes, 175 SCRA 264 (1989) 

https://lawphil.net/judjuris/juri1989/jul1989/gr_83551_1989.html

FACTS: The Philippine Port Authority conducted a public bidding for the development,
management and operation of the Manila International Container Terminal (MICT).
Thereafter. International Container Terminal Services Inc. (ICTSI) was declared as the
winning bidder. However, before the MICT contract could be signed, two cases for
prohibition was filed by the respondents assailing the legality or the regularity of the MICT
bidding.
Albano filed the present petition assailing the award of the MICT contract to ICTSI on the
ground that pursuant to Section 11, Artcile XII of the 1987 Constitution, a public utility such as
MICT needs a legislative franchise before it can legally operate.

ISSUE: Whether or not the contract between the PPA and ICTSI is illegal in the absence of a
franchise from Congress

RULING: NO, the Supreme Court held that EO No. 30 tasked PPA with the management and
operation of the MIPC and to undertake the providing of cargo handling and port related
services there and in relation to this, PD 857 expressly empowers the PPA to provide
services within Port Districts "whether on its own, by contract, or otherwise"
Therefore, under the terms of E.O. No. 30 and P.D. No. 857, the PPA may contract with the
International Container Terminal Services, Inc. (ICTSI) for the management, operation and
development of the MICP.
The Court further explained that the Constitution provides in Art. XII, Sec. 11 that the issuance
of a franchise, certificate or other form of authorization for the operation of a public utility shall
be subject to amendment, alteration or repeal by Congress does not necessarily, imply, as
petitioner posits that only Congress has the power to grant such authorization. FRANCHISES
issued
BY CONGRESS are NOT REQUIRED before each and every public utility may operate.
Thus, the law has GRANTED certain ADMINISTRATIVE AGENCIES the power to grant
licenses for or to authorize the operation of certain public utilities.

7. Telecommunications and Broadcast Attorneys of the Philippines Inc. (TELEBAP) and

GMA Network, Inc. v. COMELEC, G.R. No. 132922, April 21, 1998
https://lawphil.net/judjuris/juri1998/apr1998/gr_132922_1998.html

FACTS: Petitioner GMA Network allegedly suffered losses running to several million pesos
in providing COMELEC Time in connection with the 1992 presidential election and the 1995
senatorial election. It stands to suffer even more should it be required to do so again because
it is required to provide FREE AIR TIME for candidates.
Thus, the petitioners challenge the validity of Section 92 (“Comelec Time”) of BP 881 on the
ground:
(1) that it takes property without due process of law and without just compensation;
(2) that it denies radio and television broadcast companies the equal protection of the
laws; and
(3) that it is in excess of the power given to the COMELEC to supervise or regulate
the operation of media of communication or information during the period of election.
However, TELEBAP was declared to be without legal standing because the mere fact that it is
composed of lawyers in the broadcast industry does not entitle them to bring this suit in their
name as representatives of the affected companies. Unlike GMA Network that operates
broadcast stations in the Philippines affected by the enforcement of Section 92 of BP 881.
ISSUE: Whether or not Sec. 92 of BP Blg. 881 violates the due process clause and the eminent
domain provision of the Constitution by taking air time from radio and television broadcasting
stations without payment of just compensation

RULING: NO. The Court ruled that a franchise is a mere privilege and the exercise of this
privilege may reasonably be burdened with the performance by the grantee of some form of
public service.
Sec. 6, Article XII of the Constitution provides that:
The use of property bears a social function, and all economic agents shall contribute to
the common good. Individuals and private groups, including corporations, cooperatives,
and similar collective organizations, shall have the right to own, establish, and operate
economic enterprises, subject to the duty of the State to promote distributive justice and
to intervene when the common good so demands.
As radio and television broadcast stations DO NOT OWN the airwaves, NO PRIVATE
PROPERTY IS TAKEN by the requirement that they provide air time to the COMELEC.
The failure of broadcast stations to provide air time unless paid by the government would clearly
DEPRIVE the PEOPLE of their RIGHT TO KNOW because broadcast media are not mere
common carriers but entities with free speech rights – public trustees charged with the duty of
ensuring that the people have access to the diversity of views on political issues.

8. Espina v. Zamora Jr., 631 SCRA 17 (2010)

https://lawphil.net/judjuris/juri2010/sep2010/gr_143855_2010.html

FACTS: President Joseph Estrada signed RA 8762, the “Retail Trade Liberization Act of
2000”. It expressly repealed RA 1180 which absolutely prohibited foreign national from
engaging in the retail trade business, and thus allows foreign nationals, as well as natural-
born Filipinos who lost their citizenship, to enter the retail trade business.
The petitioners, a group of congressmen including Rep. Espina, filed a petition assailing the
constitutionality of RA 8762 as it is a clear violation of Sections 9, 19, and 20 of Article II
of the Constitution. They stressed that the presence of foreign nationals would result in
ALIEN CONTROL and MONOPOLY of the retail trade.
The respondents contended that the petitioners have no legal standing to file the petition since
R.A. 8762 does not involve the disbursement of public funds nor the law infringes on their right
as legislators. Besides, the Constitution mandates the mere regulation but not the
prohibition of foreign investments in the country.

ISSUE: Whether or not RA 8762 is constitutional

RULING: YES. The Court ruled that while the Constitution mandates a bias in favor of
Filipino goods, services, labor and enterprises, it also recognizes the need for business
exchange with the rest of the world on the bases of equality and reciprocity and limits
protection of Filipino enterprises only against foreign competition and trade practices that are
unfair.
Besides, the control and regulation of trade in the interest of the public welfare is of course an
exercise of the police power of the State.
The Court is not convinced that the implementation of R.A. 8762 would eventually lead to alien
control of the retail trade business. The law itself has provided strict safeguards on foreign
participation in that business. Thus –
First, aliens can only engage in retail trade business subject to the four categories
enumerated in the law;
Second, only nationals from, or juridical entities formed or incorporated in
countries which allow the entry of Filipino retailers shall be allowed to engage in RTB;
and
Third, qualified foreign retailers shall NOT BE ALLOWED to engage in certain retailing
activities OUTSIDE their ACCREDITED stores through the use of mobile or rolling
stores or carts, the use of sales representatives, door-to-door selling, restaurants and
sari-sari stores and such other similar retailing activities.

9. Southern Cross Cement Corp v. PHILCEMCOR, 465 SCRA 532 (2005)

2004 case: https://lawphil.net/judjuris/juri2004/jul2004/gr_158540_2004.html
2005 case: https://lawphil.net/judjuris/juri2005/aug2005/gr_158540_2005.html

FACTS: RA 8800, also known as the Safeguard Measures Act (SMA) provides the structure
and mechanics for the imposition of emergency measures to protect domestic industries
from increased imports which could inflict serious injury on them.
Philcemcor filed an application with the DTI and alleged that the importation of gray
Portland cement in increased quantities has caused declines in domestic production and
has caused depressed local prices. It sought the imposition of safeguard measures on the
import of cement pursuant to the SMA. After preliminary investigation, the DTI imposed
provisional measures on all importations of gray Portland cement.
The Tariff Commission then RECEIVED a REQUEST from the DTI for a formal
investigation to determine whether or not to impose a definitive safeguard measure on the said
imports. The Tariff Commission found that there was NO THREAT of serious injury that is
imminent from the imports of gray Portland cement, and that safeguard measures should not be
imposed.
DTI Sec. Roxas disagreed with the Tariff Commission and requested an opinion from the
DOJ which AFFIRMED the Tariff Commission’s findings. The DTI then DENIED the
application filed by Philcemcor.
Philcemcor appealed to the CA, arguing that the DTI Secretary is not bound to adopt the
recommendations of the Tariff Commission. CA refused to annul the findings of the Tariff
Commission.
Southern Cross filed the present petition, assailing the CA’s decision.

ISSUE: Is the factual determination of the Tariff Commission binding on the DTI?

RULING: YES. Under the Section 5 of the SMA, there should first be a positive final
determination of the Tariff Commission before the DTI Secretary can impose a general
safeguard measure. Such is a condition precedent that must first be satisfied.
The delegation of the taxation power by the legislative to the executive is authorized by the
Constitution itself. The SMA empowered the DTI Secretary, as alter ego of the President, to
impose definitive general safeguard measures, which are basically tariff imposts of the type
spoken of in the Constitution. However, the law DID NOT GRANT HIM FULL, uninhibited
discretion to impose such measures.

The Court ruled that the CA had no jurisdiction over Philcemcor’s Petition, the proper remedy under
Section 29 of the SMA being a petition for review with the CTA; and that the CA erred in ruling that the
DTI Secretary was NOT BOUND by the negative determination of the Tariff Commission and could
therefore impose the general safeguard measures, since Section 5 of the SMA precisely required that
the Tariff Commission make a positive final determination before the DTI Secretary could impose these
measures. Anent the argument that Southern Cross had committed forum-shopping, the Court
concluded that there was no evident malicious intent to subvert procedural rules so as to match the
standard under Section 5, Rule 7 of the Rules of Court of willful and deliberate forum shopping.
Accordingly, the Decision of the Court of Appeals dated 5 June 2003 was declared null and void.
The Court likewise found it necessary to nullify the Decision of the DTI Secretary dated 25 June 2003,
rendered after the filing of this present Petition. This Decision by the DTI Secretary had cited the
obligatory force of the null and void Court of Appeals’ Decision, notwithstanding the fact that the decision
of the appellate court was not yet final and executory. Considering that the decision of the Court of
Appeals was a nullity to begin with, the inescapable conclusion was that the new decision of the DTI
Secretary, prescinding as it did from the imprimatur of the decision of the Court of Appeals, was a nullity
as well.
Congressional Limitations Pursuant To Constitutional Authority on the Delegated Power to Impose Safeguard
Measures

The safeguard measures imposable under the SMA generally involve duties on imported products, tariff rate quotas,
or quantitative restrictions on the importation of a product into the country. Concerning as they do the foreign
importation of products into the Philippines, these safeguard measures fall within the ambit of Section 28(2), Article VI
of the Constitution, which states:

The Congress may, by law, authorize the President to fix within specified limits, and subject to such
limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues,
and other duties or imposts within the framework of the national development program of the Government.49
The Court acknowledges the basic postulates ingrained in the provision, and, hence, governing in this case. They
are:

(1) It is Congress which authorizes the President to impose tariff rates, import and export quotas, tonnage
and wharfage dues, and other duties or imposts. Thus, the authority cannot come from the Finance Department,
the National Economic Development Authority, or the World Trade Organization, no matter how insistent or persistent
these bodies may be.

(2) The authorization granted to the President must be embodied in a law. Hence, the justification cannot be
supplied simply by inherent executive powers. It cannot arise from administrative or executive orders promulgated by
the executive branch or from the wisdom or whim of the President.

(3) The authorization to the President can be exercised only within the specified limits set in the law and is
further subject to limitations and restrictions which Congress may impose. Consequently, if Congress specifies
that the tariff rates should not exceed a given amount, the President cannot impose a tariff rate that exceeds such
amount. If Congress stipulates that no duties may be imposed on the importation of corn, the President cannot
impose duties on corn, no matter how actively the local corn producers lobby the President. Even the most picayune
of limits or restrictions imposed by Congress must be observed by the President.

There is one fundamental principle that animates these constitutional postulates. These impositions under Section
28(2), Article VI fall within the realm of the power of taxation, a power which is within the sole province of the
legislature under the Constitution.

Without Section 28(2), Article VI, the executive branch has no authority to impose tariffs and other similar tax
levies involving the importation of foreign goods. Assuming that Section 28(2) Article VI did not exist, the
enactment of the SMA by Congress would be voided on the ground that it would constitute an undue delegation of
the legislative power to tax. The constitutional provision shields such delegation from constitutional infirmity, and
should be recognized as an exceptional grant of legislative power to the President, rather than the affirmation of an
inherent executive power.

This being the case, the qualifiers mandated by the Constitution on this presidential authority attain primordial
consideration. First, there must be a law, such as the SMA. Second, there must be specified limits, a detail which
would be filled in by the law. And further, Congress is further empowered to impose limitations and restrictions on this
presidential authority. On this last power, the provision does not provide for specified conditions, such as that the
limitations and restrictions must conform to prior statutes, internationally accepted practices, accepted jurisprudence,
or the considered opinion of members of the executive branch.

The Court recognizes that the authority delegated to the President under Section 28(2), Article VI may be exercised,
in accordance with legislative sanction, by the alter egos of the President, such as department secretaries. Indeed,
for purposes of the President’s exercise of power to impose tariffs under Article VI, Section 28(2), it is generally the
Secretary of Finance who acts as alter ego of the President. The SMA provides an exceptional instance wherein it is
the DTI or Agriculture Secretary who is tasked by Congress, in their capacities as alter egos  of the President, to
impose such measures. Certainly, the DTI Secretary has no inherent power, even as alter ego of the President, to
levy tariffs and imports.

Concurrently, the tasking of the Tariff Commission under the SMA should be likewise construed within the same
context as part and parcel of the legislative delegation of its inherent power to impose tariffs and imposts to the
executive branch, subject to limitations and restrictions. In that regard, both the Tariff Commission and the DTI
Secretary may be regarded as agents of Congress within their limited respective spheres, as ordained in the SMA, in
the implementation of the said law which significantly draws its strength from the plenary legislative power of
taxation. Indeed, even the President may be considered as an agent of Congress for the purpose of imposing
safeguard measures. It is Congress, not the President, which possesses inherent powers to impose tariffs
and imposts. Without legislative authorization through statute, the President has no power, authority or right
to impose such safeguard measures because taxation is inherently legislative, not executive.

When Congress tasks the President or his/her alter egos to impose safeguard measures under the delineated
conditions, the President or the alter egos may be properly deemed as agents of Congress to perform an act
that inherently belongs as a matter of right to the legislature. It is basic agency law that the agent may not act
beyond the specifically delegated powers or disregard the restrictions imposed by the principal. In short, Congress
may establish the procedural framework under which such safeguard measures may be imposed, and assign the
various offices in the government bureaucracy respective tasks pursuant to the imposition of such measures, the task
assignment including the factual determination of whether the necessary conditions exists to warrant such
impositions. Under the SMA, Congress assigned the DTI Secretary and the Tariff Commission their respective
functions50 in the legislature’s scheme of things.
There is only one viable ground for challenging the legality of the limitations and restrictions imposed by Congress
under Section 28(2) Article VI, and that is such limitations and restrictions are themselves violative of the Constitution.
Thus, no matter how distasteful or noxious these limitations and restrictions may seem, the Court has no choice but
to uphold their validity unless their constitutional infirmity can be demonstrated.

What are these limitations and restrictions that are material to the present case? The entire SMA provides for a
limited framework under which the President, through the DTI and Agriculture Secretaries, may impose safeguard
measures in the form of tariffs and similar imposts. The limitation most relevant to this case is contained in Section 5
of the SMA, captioned "Conditions for the Application of General Safeguard Measures," and stating:

The Secretary shall apply a general safeguard measure upon a positive final determination of the [Tariff]
Commission that a product is being imported into the country in increased quantities, whether absolute or relative to
the domestic production, as to be a substantial cause of serious injury or threat thereof to the domestic industry;
however, in the case of non-agricultural products, the Secretary shall first establish that the application of such
safeguard measures will be in the public interest.51

10. Marine Radio Communications Association v. Reyes, G.R. No. 86953, Nov. 6, 1990
https://lawphil.net/judjuris/juri1990/nov1990/gr_86953_1990.html

FACTS: Petitioners are Filipino entrepreneurs engaged in the business of MARINE RADIO
COMMUNICATIONS in the Philippines. In July 1988, the DOTC unveiled a maritime coastal
communications system project designed to ensure the safety of lives at sea through the
establishment of communication facilities between coast stations and ship stations.
The petitioners brought the instant suit, alleging that Secretary Rainerio Reyes of the DOTC
was guilty of grave abuse of discretion in rejecting petitioner’s appeal alleging that the said
project would put into serious doubt the viability of the entire marine radio communications
industry.
Petitioners hold that under Section 20, Article II of the Constitution, which states that the State
recognizes the indispensable role of the private sector, encourages private enterprise, and
provides incentives to needed investments, the Department CANNOT COMPETE in the
business of PUBLIC CORRESPONDENCE.

ISSUE: Are the petitioners correct?

RULING: NO.
With respect in particular to property, the Article XII of the Constitution decrees:
Sec. 6. The use of property bears a social function, and all economic agents shall
contribute to the common good. Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the right to own, establish,
and operate economic enterprises, subject to the duty of the State to promote
distributive justice and to intervene when the common good so demands.
There can hardly be any valid argument against providing for public corresponding, free of
charge. It is compatible with State aims to serve the people under the Constitution.
The petitioners cannot legitimately rely on the provisions of Section 20, of Article II, of the
Constitution, to defeat the act complained of. Such mandate is NO MORE THAN an
ACKNOWLEDGMENT of the IMPORTANCE of PRIVATE INITIATIVE in building the nation.
However, it is NOT a CALL for OFFICIAL ABDICATION (renunciation) of duty to citizenry.
The Constitution does not bar the Government from undertaking its own initiatives, especially in
the domain of public service, and neither does it repudiate its primacy as chief economic
caretaker of the nation.

11. Santa Rosa Mining Co. v. Leido, Jr., 156 SCRA 1 (1987)
https://lawphil.net/judjuris/juri1987/dec1987/gr_l_49109_1987.html

FACTS: Petitioner Santa Rosa Mining Company, Inc. is a mining corporation duly
organized and existing under the laws of the Philippines. It alleges that it is the holder of fifty
(50) valid mining claims situated in Jose Panganiban, Camarines Norte, acquired under the
provisions of Philippine Bill of 1902.
On 14 October 1977, PD 1214 was issued, requiring holders of subsisting and valid
patentable mining claims located under the provisions of the Philippine Bill of 1902 TO FILE a
MINING LEASE APPLICATION within one (1) year from the approval of the Decree.
On 10 October 1978, petitioner filed special civil action for certiorari and prohibition
assailing PD 1214 as UNCONSTITUTIONAL in that it amounts to a DEPRIVATION of
PROPERTY without due process of law. On 13 October 1978, petitioner filed a mining
lease application, but "under protest," with a reservation annotated on the back of its
application that it is not waiving its rights over its mining claims until the validity of PD 1214 shall
have been passed upon by this Court.

ISSUE: Whether or not PD 1214 is unconstitutional.

RULING: NO. It is a valid exercise of the sovereign power of the State, as owner, over
lands of the public domain, of which petitioner's mining claims still form a part, and over
the patrimony of the nation, of which mineral deposits are a valuable asset. It may be
underscored, in this connection, that the Decree does not cover all mining claims located under
the Phil. Bill of 1902, but only those claims over which their locators had failed to obtain a
patent.
MERE LOCATION DOES NOT MEAN ABSOLUTE OWNERSHIP over the affected land or
the mining claim. It MERELY SEGREGATES the located land or area from the public
domain by barring other would-be locators from locating the same and appropriating for
themselves the minerals found therein. To rule otherwise would imply that location is all that is
needed to acquire and maintain rights over a located mining claim. This, we cannot approve or
sanction because it is contrary to the intention of the lawmaker that the locator should faithfully
and consistently comply with the requirements for annual work and improvements in the located
mining claim.
PD 1214 is IN ACCORD with Sec. 2, Art. XII of the 1987 CONSTITUTION which provides
that: “All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna. and other natural
resources are owned by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State.”

12. San Miguel Corporation v. Court of Appeals, 185 SCRA 722 (1990)
https://lawphil.net/judjuris/juri1990/may1990/gr_57667_1990.html

FACTS: On December 23, 1975, San Miguel Corporation (SMC) PURCHASED from Silverio
Perez Lot 684, located in Sta. Anastacia, Sto. Tomas, Batangas, in consideration of the sum of
P133,084.80. On Feb. 21,1977, claiming ownership in fee simple of the land, SMC filed before
the then CFI Batangas an APPLICATION for its registration under the Land Registration Act.
The Solicitor General, appearing for the Republic of the Philippines, OPPOSED the
application for registration contending that SMC's claim of ownership in fee simple on the basis
of a Spanish title or grant could no longer be availed of by the applicant as the SIX-MONTH
PERIOD from February 16, 1976 prescribed by PD 892 had ELAPSED;
that the parcel of land in question is part of the PUBLIC DOMAIN,
and that SMC, being a PRIVATE CORPORATION, is DISQUALIFIED under Section
11, Article XIV of the Constitution from holding alienable lands of the public domain.
The lower court granted the application for registration and adjudicating the property in
favor of SMC. The Solicitor General appealed to the CA and the latter reversed the decision
of the lower court and declared the parcel of land involved as public land.

ISSUE: WON the evidence presented by the petitioner is sufficient to warrant a ruling that SMC
and/or its predecessor-in-interest has a registrable right over Lot 684.

RULING: NO. Open, exclusive and undisputed possession of alienable public land for the
period prescribed by law creates the legal fiction whereby the land, upon completion of the
requisite period ipso-jure (by the law itself) and without the need of judicial or other
sanction, ceases to be public land and becomes private property. Such open, continuous,
exclusive and notorious occupation of the disputed properties for more than 30 years must,
however, be conclusively established.
Petitioner's claim that its predecessor-in-interest had open, exclusive and undisputed
possession of Lot 684 for more than thirty years is anchored on certain documentary and
testimonial evidence. Tax declarations and receipts are NOT CONCLUSIVE EVIDENCE OF
OWNERSHIP or right of possession over a piece of land. They are merely indicia of a claim of
ownership. Tax declarations only become strong evidence of ownership of land acquired by
prescription, a mode of acquisition of ownership relied upon by petitioner in this case, when
accompanied by proof of actual possession.
Such proof of actual possession was sought to be provided by the testimony of vendor Silverio
Perez that he had been in possession of the property since 1933 until he sold it to SMC in 1975.
Petitioner did not present other witnesses to corroborate Perez' testimony. Silverio Perez's
testimony, being uncorroborated, is simply self-serving and hence, undeserving of any
weight.