G.R. No.
186502, December 13, 2017 On 29 October 2004, then NBI Director Reynaldo Wycoco
CARLOS R. SAUNAR, Petitioner, v. EXECUTIVE SECRETARY
EDUARDO R. ERMITA AND CONSTANCIA P. DE GUZMAN,
CHAIRPERSON OF THE PRESIDENTIAL ANTI-GRAFT
COMMISSION, Respondents.
DECISION
MARTIRES, J.:
This petition for review on certiorari seeks to reverse and set aside
the 20 October 2008 Decision1 and the 17 February 2009
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No.
100157 which affirmed the 19 January 2007 decision3 of the Office
of the President (OP) dismissing petitioner Carlos R. Saunar
(Saunar) from government service.
THE FACTS
Saunar was a former Regional Director of the National Bureau of
Investigation (NBI), which he joined as an agent in 1988. Through
the years, he rose from the ranks and eventually became the
Chief of the Anti-Graft Division. During his time as chief of the
said division, Saunar conducted an official investigation regarding
the alleged corruption relative to the tobacco excise taxes and
involving then Governor Luis "Chavit" Singson, former President
Joseph E. Estrada (President Estrada), and former Senator
Jinggoy Estrada. President Estrada's assailed involvement in the
tobacco excise tax issue became one of the predicate crimes
included in his indictment for plunder.4
In Special Order No. 40035 dated 27 August 2004, Saunar was
reassigned as regional director for Western Mindanao based in
Zamboanga City. During his stint as such, he received a
subpoena ad testificandum from the Sandiganbayan requiring him
to testify in the plunder case against President Estrada. After
securing approval from his immediate supervisor Filomeno
Bautista (Bautista), Deputy Director for Regional Operation
Services (DDROS), Saunar appeared before the Sandiganbayan on
several hearing dates, the last being on 27 October 2004.6
(Wycoco) issued Special Order No. 0050337 informing Saunar that
he was relieved from his duties as regional director for Western
Mindanao and was ordered to report to the DDROS for further
instructions. Pursuant thereto, he reported to Bautista on the first
week of November 2004. Bautista informed Saunar that an
investigation was being conducted over his testimony before the
Sandiganbayan and that he should just wait for the developments
in the investigation. In the meantime, Bautista did not assign him
any duty and told him to be available at any time whenever he
would be needed. He made himself accessible by staying in
establishments near the NBI. In addition, he also attended court
hearings whenever required.8
On 6 October 2006, Saunar received an order from the
Presidential Anti-Graft Commission (PAGC) requiring him to
answer the allegations against him in the PAGC Formal Charge
dated 3 October 2006. The charge was based on a letter, dated 19
August 2005, from Wycoco recommending an immediate
appropriate action against Saunar for his failure to report for work
since 24 March 2005, without approved leave of absence for four
(4) months.9
On 23 October 2006, Saunar was reassigned as regional director
of the Bicol Regional Office. On 29 January 2007, he received a
copy of the OP decision dismissing him from service.
The OP Decision
In its 19 January 2007 decision, the OP found Saunar guilty of
Gross Neglect of Duty and of violating Section 3(e) of Republic Act
(R.A.) No. 3019, and dismissed him from service. It pointed out
that Saunar failed to report for work for more than a year which
he himself admitted when he explained that he did not report for
work because he had not been assigned any specific duty or
responsibility. The OP highlighted that he was clearly instructed to
report to the DDROS but he did not do so. It added that it would
have been more prudent for Saunar to have reported for work
even if no duty was specifically assigned to him, for the precise
reason that he may at any time be tasked with responsibilities.
The OP, however, absolved Saunar from allegedly keeping
government property during the time he did not report for work,
noting that he was able to account for all the items attributed to
him. The dispositive portion reads:
WHEREFORE, premises considered, and as recommended by
PAGC, Atty. Carlos R. Saunar, Regional Director, NBI, for Gross
Neglect of Duty under Section 22(b), Rule XIV of the Omnibus
Rules Implementing Book V of EO 292 in relation to Section 4(A)
of RA 6713 and for violation of Section 3(e) of RA 3019, is
hereby DISMISSED from government service with cancellation of
eligibility, forfeiture of leave credits and retirement benefits, and
disqualification for re-employment in the government service.10
Saunar moved for reconsideration but it was denied by the OP in
its 12 June 2007 resolution.11 Undeterred, he appealed before the
CA.
The CA Ruling
In its assailed 20 October 2008 decision, the CA affirmed in
toto the OP decision. The appellate court ruled that Saunar was
not deprived of due process because he was informed of the
charges against him and was given the opportunity to defend
himself. It expounded that the absence of formal hearings in
administrative proceedings is not anathema to due process.
On the other hand, the CA agreed that Saunar was guilty of Gross
Neglect of Duty as manifested by his being on Absence Without
Leave (AWOL) for a long period of time. The appellate court
disregarded Saunar's explanation that he stayed in establishments
nearby and that he had attended court hearings from time to
time. In addition, the CA found that Saunar violated Section 3(e)
of R.A. No. 3019 because public interest was prejudiced when he
continued to receive his salary in spite of his unjustified absences.
Thus, it ruled:
WHEREFORE, in view of the foregoing premises, the petition for
review filed in this case is hereby DENIED and, consequently,
DISMISSED for lack of merit, and the assailed Decision of the
Executive Secretary Eduardo R. Ermita dated January 19, 2007 is
hereby AFFIRMED in toto.12
Saunar moved for reconsideration but it was denied by the CA in
its assailed 17 February 2009 resolution.
Hence, this appeal raising the following:
ISSUES
I
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN
RULING THAT PETITIONER WAS NOT DENIED DUE
PROCESS AND THAT RESPONDENTS DID NOT VIOLATE
PETITIONER'S RIGHT TO SECURITY OF TENURE AS
GUARANTEED IN THE CONSTITUTION; AND
II
WHETHER THE HONORABLE COURT OF APPEAELS GRAVELY
ERRED AND GRAVELY ABUSED ITS DISCRETION IN
UPHOLDING THE FINDINGS OF RESPONDENTS THAT
PETITIONER COMMITTED GROSS NEGLECT OF DUTY, HAD
ABANDONED HIS POST AND WENT ON AWOL FOR HIS
ALLEGED FAILURE TO REPORT FOR WORK FROM MARCH 24,
2005 TO MAY 2006.13
THE COURT'S RULING
The petition is meritorious.
Administrative due process
revisited
Saunar bewails that he was deprived of due process, pointing out
that no real hearing was ever conducted considering that the
clarificatory conference conducted by the PAGC was a sham. In
addition, he asserts that he was not notified of the charges
against him because he was only made aware of the allegations
after the PAGC had formally charged him. Further, Saunar
highlights the delay between the time PAGC received Wycoco's
letter-complaint and when he received the formal charge from the
PAGC.
Section 1, Article III of the Constitution is similar with the Fifth
and Fourteenth Amendment of the American Constitution in that it
guarantees that no one shall be deprived of life, liberty or
property without due process of law. While the words used in our
Constitution slightly differ from the American Constitution, the
guarantee of due process is used in the same sense and has the
same force and effect.14 Thus, while decisions on due process of
American courts are not controlling in our jurisdiction, they may
serve as guideposts in the analysis of due process as applied in
our legal system.
In American jurisprudence, the due process requirement entails
the opportunity to be heard at a meaningful time and in a
meaningful manner.15 Likewise, it was characterized with fluidity
in that it negates any concept of inflexible procedures universally
applicable to every imaginable situation.16
In Goldberg v. Kelly (Goldberg),17 the United States (U.S.)
Supreme Court ruled that due process requires the opportunity for
welfare recipients to confront the witnesses against them at a pre-
termination hearing before welfare benefits are terminated, to wit:
The opportunity to be heard must be tailored to the capacities and
circumstances of those who are to be heard. It is not enough that
a welfare recipient may present his position to the decision maker
in writing or second hand through his caseworker. x x x Moreover,
written submissions do not afford the flexibility of oral
presentations; they do not permit the recipient to mold his
argument to the issues the decision maker appears to regard as
important. Particularly where credibility and veracity are at issue,
as they must be in many termination proceedings, written
submissions are wholly unsatisfactory basis for decision.
In Goldberg, the U.S. Supreme Court went on to highlight the
importance of confronting the witnesses presented against the
claimant, viz:
In almost every setting where important decisions turn on
questions of fact, due process requires an opportunity to confront
and cross-examine adverse witnesses. x x x What we said in
Greene v McElroy, 360 US 474, 496-497, 3 Led 2d 1377, 1390,
1391, 79 S Ct 1400 (1959), is particularly pertinent here:
Certain principles have remained relatively immutable in our
jurisprudence. One of these is that where governmental action
seriously injures an individual, and the reasonableness of the
action depends on fact findings the evidence used to prove the
Government's case must be disclosed to the individual so that he
has an opportunity to show that it is untrue. While this is
important in the case of documentary evidence, it is even more
important where the evidence consists of the testimony of
individuals whose memory might be faulty or who, in fact, might
be perjurers or persons motivated by malice, vindictiveness,
intolerance, prejudice or jealousy. We have formalized these
protections in the requirements of confrontation and cross-
examination. They have ancient roots. They find expression in the
Sixth Amendment . . . This Court has be zealous to protect these
rights from erosion. It has spoken out not only in criminal cases,
but also in all types of cases where administrative actions were
under scrutiny.
Welfare recipients must therefore be given an opportunity to
confront and cross-examine the witnesses relied on by the
department.18
In subsequent decisions, the U.S. Supreme Court clarified that a
lack of formal hearing in the administrative level does not violate
procedural due process. In Arnett v. Kennedy (Arnett),19 a case
involving the dismissal of a non-probationary federal employee,
the US Supreme Court ruled that a trial-type hearing before an
impartial hearing officer was not necessary before the employee
could be removed from office because the hearing afforded by
administrative appeal procedures after the actual dismissal is a
sufficient requirement of the Due Process Clause.
In Mathews v. Eldridge (Mathews),20 the U.S. Supreme Court
explained that an evidentiary hearing prior to termination of
disability benefits is not indispensable, to wit:
Only in Goldberg has the Court held that due process requires an
evidentiary hearing prior to a temporary deprivation. It was
emphasized there that welfare assistance is given to persons on
the very margin of subsistence:
The crucial factor in this context x x x is that termination of aid
pending resolution of a controversy over eligibility may deprive an
eligible recipient of the very means by which to live while he
waits.
Eligibility for disability benefits, in contrast, is not based upon
financial need. x x x
xxxx
All that is necessary is that the procedures be tailored, in light of
the decision to be made, to the "capacities and circumstances of
those who are to be heard to insure that they are given a
meaningful opportunity to present their case. In assessing what
process is due in this case, substantial weight must be given to
the good-faith judgments of the individuals charged by Congress
with the administration of social welfare programs that the
procedures they have provided assure fair consideration of the
entitlement claims of individuals. This is especially so where, as
here, the prescribed procedures not only provide the claimant with
an effective process for asserting his claim prior to any
administrative action, but also assure a right to an evidentiary
hearing, as well as to subsequent judicial review, before the denial
of his claim becomes final.21
It is true that in both Arnett and Mathews, the U.S. Supreme
Court ruled that due process. was not violated due to the lack of a
formal hearing before the employee was dismissed and welfare
benefits were cancelled in the respective cases. Nevertheless, in
both cases it was recognized that the aggrieved party had the
opportunity for a hearing to settle factual or evidentiary disputes
in subsequent procedures. In our legal system, however, the
opportunity for a hearing after the administrative level may not
arise as the reception of evidence or the conduct of hearings are
discretionary on the part of the appellate courts.
In our jurisdiction, the constitutional guarantee of due process is
also not limited to an exact definition.22 It is flexible in that it
depends on the circumstances and varies with the subject matter
and the necessities of the situation.23
In the landmark case of Ang Tibay v. The Court of Industrial
Relations,24 the Court eruditely expounded on the concept of due
process in administrative proceedings, to wit:
The fact, however, that the Court of Industrial Relations may be
said to be free from the rigidity of certain procedural requirements
does not mean that it can, in justiciable cases coming before it,
entirely ignore or disregard the fundamental and essential
requirements of due process in trials and investigations of an
administrative character. There are cardinal primary rights which
must be respected even in proceedings of this character:
(1) The first of these rights is the right to a hearing, which
includes the right of the party interested or affected to present his
own case and submit evidence in support thereof. In the language
of Chief Justice Hughes, in Morgan v. U. S., 304 U. S. 1, 58 S. Ct.
773, 999, 82 Law. ed 1129, "the liberty and property of the citizen
shall be protected by the rudimentary requirements of fair play."
(2) Not only must the party be given an opportunity to present his
case and to adduce evidence tending to establish the rights which
he asserts but the tribunal must consider the evidence presented.
(Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct.
906, 80 Law. ed. 1288.) In the language of this Court in Edwards
vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without
the corresponding duty on the part of the board to consider it, is
vain. Such right is conspicuously futile if the person or persons to
whom the evidence is presented can thrust it aside without notice
or consideration."
(3) While the duty to deliberate does not impose the obligation to
decide right, it does imply a necessity which cannot be
disregarded, namely, that of having something to support its
decision. A decision with absolutely nothing to support it is a
nullity, a place when directly attached." (Edwards vs.
McCoy, supra.) This principle emanate from the more fundamental
principle that the genius of constitutional government is contrary
to the vesting of unlimited power anywhere. Law is both a grant
and a limitation upon power.
(4) Not only must there be some evidence to support a finding or
conclusion (City of Manila vs. Agustin, G. R. No. 45844,
promulgated November 29, 1937, XXXVI O. G. 1335), but the
evidence must be "substantial." (Washington, Virginia & Maryland
Coach Co. v. National Labor Relations Board, 301 U. S. 142, 147,
57 S. Ct. 648, 650, 81 Law ed 965.) "Substantial evidence is more
than a mere scintilla It means such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion." (Appalachian Electric Power v. National Labor
Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor
Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15;
Ballston-stillwater Knitting Co. v. National Labor Relations Board,
2 Cir., 98 F. 2d 758, 760.) ... The statute provides that 'the
rules of evidence prevailing in courts of law and equity
shall not be controlling.' The obvious purpose of this and
similar provisions is to free administrative boards from the
compulsion of technical rules so that the mere admission of
matter which would be deemed incompetent in judicial
proceedings would not invalidate the administrative
order. (Interstate Commerce Commission v. Baird, 194 U. S. 25,
44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce
Commission v. Louisville & Nashville R. Co., 227 U. S. 88, 93, 33
S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene &
Southern Ry. Co., 265 U. S. 274, 288, 44 S. Ct. 565, 569, 68 Law.
ed. lola; Tagg Bros. & Moorhead v. United States, 280 U. S. 420,
442, 50 S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a
desirable flexibility in administrative procedure does not go so far
as to justify orders without a basis in evidence having rational
probative force. Mere uncorroborated hearsay or rumor does not
constitute substantial evidence. (Consolidated Edison Co. v.
National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4,
Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at
the hearing, or at least contained in the record and disclosed to
the parties affected. (Interstate Commence Commission vs. L. &
N. R. Co., 227 U. S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by
confining the administrative tribunal to the evidence disclosed to
the parties, can the latter be protected in their right to know and
meet the case against them. It should not, however, detract
from their duty actively to see that the law is enforced, and
for that purpose, to use the authorized legal methods of
securing evidence and informing itself of facts material and
relevant to the controversy. Boards of inquiry may be
appointed for the purpose of investigating and determining the
facts in any given case, but their report and decision are only
advisory. (Section 9, Commonwealth Act No. 103.) The Court of
Industrial Relations may refer any industrial or agricultural dispute
of any matter under its consideration or advisement to a local
board of inquiry, a provincial fiscal, a justice of the peace or any
public official in any part of the Philippines for investigation, report
and recommendation, and may delegate to such board or public
official such powers and functions as the said Court of Industrial
Relations may deem necessary, but such delegation shall not
affect the exercise of the Court itself of any of its powers (Section
10, ibid.)
(6) The Court of Industrial Relations or any of its judges,
therefore, must act on its or his own independent consideration of
the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision. It may be that the
volume of work is such that it is literally impossible for the titular
heads of the Court of Industrial Relations personally to decide all
controversies coming before them. In the United States the
difficulty is solved with the enactment of statutory authority
authorizing examiners or other subordinates to render final
decision, with right to appeal to board or commission, but in our
case there is no such statutory authority.
(7) The Court of Industrial Relations should, in all controversial
questions, render its decision in such a manner that the parties to
the proceeding can know the various issues involved, and the
reasons for the decisions rendered. The performance of this duty
is inseparable from the authority conferred upon it.25 (emphases
supplied)
From the pronouncements of the Court in Ang Tibay, the fluid
concept of administrative due process continued to progress. In In
Re: De Borja and Flores,26 the Court ruled that there was no
denial of due process when the Public Service Commission
cancelled the certificate of Jose de Borja to operate an ice plant
without prior notice or hearing because a hearing was conducted
after the applicant filed a motion for reconsideration. In Manila
Trading Supply Co. v. Philippine Labor Union,27 the Court ruled
that due process was observed even if the report of the
investigating officer was not set for hearing before the Court of
Industrial Relations because during the investigation stage, the
parties were given the opportunity to cross-examine and present
their side to the case. It is noteworthy that in both cases due
process was observed because the parties were given the chance
for a hearing where they could confront the witnesses against
them.
In Gas Corporation of the Phils. v. Minister Inciong,28 the Court
explained that there is no denial of due process when a party is
afforded the right to cross-examine the witnesses but fails to
exercise the same, to wit:
1. The vigor with which counsel for petitioner pressed the
claim that there was a denial of procedural due process is
inversely proportional to the merit of this certiorari and
prohibition suit as is quite evident from the Comment of the
office of the Solicitor General. It is undoubted that the
due process mandate must be satisfied by an
 administrative tribunal or agency. So it was
announced by Justice Laurel in the landmark case
of Ang Tibay v. Court of Industrial Relations. That is
still good law. It follows, therefore, that if procedural due
process were in fact denied, then this petition must
prosper. It is equally well-settled, however, that the
standard of due process that must be met in
proceedings before administrative tribunals allows a
certain latitude as long as the element of fairness is
not ignored. So the following recent cases have uniformly
held: Maglasang v. Ople, Nation Multi Service Labor Union
v. Agcaoili, Jacqueline Industries v. National Labor
Relations Commission, Philippine Association of Free Labor
Unions v. Bureau of Labor Relations, Philippine Labor
Alliance Council v. Bureau of Labor Relations, and
Montemayor v. Araneta University Foundation. From the
Comment of the office of the Solicitor General, it is quite
clear that no imputation of arbitrariness can be
justified. The opportunity to present its side of the
case was given both parties to the controversy. If,
for reasons best known to itself, petitioner did not
avail of its right to do so, then it has only itself to
blame. No constitutional infirmity could then be
imputed to the proceeding before the labor
arbiter.29 (emphasis supplied)
Again, there was no denial of due process in the above-mentioned
case because the parties were ultimately given the chance to
confront the witnesses against them. It just so happened that
therein petitioner failed to promptly avail of the same.
In Arboleda v. National Labor Relations Commission
(Arboleda),30 the Court expounded that administrative due
process does not necessarily connote full adversarial proceedings,
to wit:
The requirement of notice and hearing in termination cases
does not connote full adversarial proceedings as elucidated
in numerous cases decided by this Court. Actual adversarial
proceedings become necessary only for clarification or when there
is a need to propound searching questions to witnesses who give
vague testimonies. This is a procedural right which the
employee must ask for since it is not an inherent right, and
summary proceedings may be conducted
thereon.31 (emphasis supplied)
Thus, while the Court in Arboleda recognized that the lack of a
formal hearing does not necessarily transgress the due process
guarantee, it did not however regard the formal hearing as a mere
superfluity. It continued that it is a procedural right that may be
invoked by the party. It is true that in subsequent cases,32 the
Court reiterated that a formal hearing is not obligatory in
administrative proceedings because the due process requirement
is satisfied if the parties are given the opportunity to explain their
respective sides through position papers or pleadings.
Nonetheless, the idea that a formal hearing is not indispensable
should not be hastily thrown around by administrative bodies.
A closer perusal of past jurisprudence shows that the Court did
not intend to trivialize the conduct of a formal hearing but merely
afforded latitude to administrative bodies especially in cases
where a party fails to invoke the right to hearing or is given the
opportunity but opts not to avail of it. In the landmark case of Ang
Tibay, the Court explained that administrative bodies are free
from a strict application of technical rules of procedure and are
given sufficient leeway. In the said case, however, nothing was
said that the freedom included the setting aside of a hearing but
merely to allow matters which would ordinarily be incompetent or
inadmissible in the usual judicial proceedings.
In fact, the seminal words of Ang Tibay manifest a desire for
administrative bodies to exhaust all possible means to ensure that
the decision rendered be based on the accurate appreciation of
facts. The Court reminded that administrative bodies have the
active duty to use the authorized legal methods of securing
evidence and informing itself of facts material and relevant
to the controversy. As such, it would be more in keeping with
administrative due process that the conduct of a hearing be the
general rule rather than the exception.
The observance of a formal hearing in administrative tribunal or
bodies other than judicial is not novel. In Perez v. Philippine
Telegraph and Telephone Company,33 the Court opined that in
illegal dismissal cases, a formal hearing or conference becomes
mandatory when requested by the employee in writing, or
substantial evidentiary disputes exists, or a company rule or
practice requires it, or when similar circumstances justify it.
In Joson v. Executive Secretary Torres (Joson),34 the Court ruled
that the respondent was denied due process after he was deprived
of the right to a formal investigation with the opportunity to face
the witnesses against him, to wit:
The rejection of petitioner's right to a formal investigation denied
him procedural due process. Section 5 of A.O. No. 23 provides
that at the preliminary conference, the Investigating Authority
shall summon the parties to consider whether they desire a formal
investigation. This provision does not give the Investigating
Authority the discretion to determine whether a formal
investigation would be conducted. The records show that
petitioner filed a motion for formal investigation. As respondent,
he is accorded several rights under the law, to wit:
xxxx
Petitioner's right to a formal investigation was not satisfied
when the complaint against him was decided on the basis
of position papers. There is nothing in the Local Government
Code and its Implementing Rules and Regulations nor in A.O. No.
23 that provide that administrative cases against elective local
officials can be decided on the basis of position papers. A.O. No.
23 states that the Investigating Authority may require the parties
to submit their respective memoranda but this is only after formal
investigation and hearing. A.O. No. 23 does not authorize the
Investigating Authority to dispense with a hearing
especially in cases involving allegations of fact which are
not only in contrast but contradictory to each other. These
contradictions are best settled by allowing the examination and
cross-examination of witnesses. Position papers are often-
times prepared with the assistance of lawyers and their
artful preparation can make the discovery of truth
difficult. The jurisprudence cited by the DILG in its order denying
petitioner's motion for a formal investigation applies to appointive
officials and employees. Administrative disciplinary proceedings
against elective government officials are not exactly similar to
those against appointive officials. In fact, the provisions that apply
to elective local officials are separate and distinct from appointive
government officers and employees. This can be gleaned from the
Local Government Code itself.35 (emphases and underlining
supplied)
Thus, administrative bodies should not simply brush aside the
conduct of formal hearings and claim that due process was
observed by merely relying on position papers and/or affidavits.
Besides, the Court in Joson recognized the inherent limitations of
relying on position papers alone as the veracity of its contents
cannot be readily ascertained. Through the examination and
cross-examination of witnesses, administrative bodies would be in
a better position to ferret out the truth and in turn, render a more
accurate decision.
In any case, the PAGC violated Saunar's right to due process
because it failed to observe fairness in handling the case against
him. Its unfairness and unreasonableness is readily apparent with
its disregard of its own rules of procedure.
The procedure to be observed in cases of clarificatory hearings is
set forth under the PAGC rules of procedure. Rule III, Section 3 of
its 2002 New Rules of Procedure states:
SECTION 3. Action After Respondent's Response.— If, upon
evaluation of the documents submitted by both parties, it should
appear either that the charge or charges have been satisfactorily
traversed by the respondent in his Counter-Affidavit/verified
Answer, or that the Counter-Affidavit/verified Answer does not
tender a genuine issue, the Commissioner assigned shall
forthwith, or after a clarificatory hearing to ascertain the
authenticity and/or significance of the relevant documents, submit
for adoption by the Commission the appropriate recommendation
to the President.
The Commissioner assigned may, at his sole discretion, set a
hearing to propound clarificatory questions to the parties or their
witnesses if he or she believes that there are matters which need
to be inquired into personally by him or her. In said hearing, the
parties shall be afforded the opportunity to be present but
without the right to examine or cross-examine. If they so
desire, they may submit written questions to the
Commissioner assigned who may propound such questions
to the parties or witnesses concerned. Thereafter, the parties
be required, to file with the Commission, within an inextendible
period of five (5) days and serve on the adverse party his verified
Position Paper. (emphasis and underlining supplied)
On the other hand, the 2008 Rules of Procedure amended the said
provision to read as follows:
SECTION 7. Clarificatory Hearings and Position Papers. - After
the filing of the Answer, the Commission may, at its discretion,
conduct Clarificatory Hearings, in which case, subpoenas may be
issued for the purpose. Should a Clarificatory Hearing be
conducted, all parties relevant to the case shall be notified at least
five (5) days before the date thereof. Failure of a party to appear
at the hearing is not necessarily a cause for the dismissal of the
complaint. A party who appears may be allowed to present
evidence, even in the absence of the adverse party who was duly
notified of the hearing.
During a Clarificatory Hearing, the Commission or the Hearing
Officer, as the case may be, shall ask clarificatory questions to
further elicit facts or information. The parties shall be afforded
the opportunity to be present and shall be allowed the
assistance of counsel, but without the right to examine or
cross-examine the party/witness being questioned. The
parties may be allowed to raise clarificatory questions and
elicit answers from the opposing party/witness, which
shall be coursed through the Commission or the Hearing
Officer, as the case may be, for determination of whether
or not the proposed questions are necessary and
relevant. In such cases, the Commission or the Hearing Officer,
as the case may be, shall ask the question in such manner and
phrasing as may be deemed appropriate. (emphasis and
underlining supplied)
xxxx
Under the PAGC rules of procedure, it is crystal clear that the
conduct of clarificatory hearings is discretionary. Nevertheless, in
the event that it finds the necessity to conduct one, there are
rules to be followed. One, the parties are to be notified of the
clarificatory hearings. Two, the parties shall be afforded the
opportunity to be present in the hearings without the right to
examine witnesses. They, however, may ask questions and elicit
answers from the opposing party coursed through the PAGC.
To reiterate, due process is a malleable concept anchored on
fairness and equity. The due process requirement before
administrative bodies are not as strict compared to judicial
tribunals in that it suffices that a party is given a reasonable
opportunity to be heard. Nevertheless, such "reasonable
opportunity" should not be confined to the mere submission of
position papers and/or affidavits and the parties must be given
the opportunity to examine the witnesses against them. The right
to a hearing is a right which may be invoked by the parties to
thresh out substantial factual issues. It becomes even more
imperative when the rules itself of the administrative body
provides for one. While the absence of a formal hearing does not
necessarily result in the deprivation of due process, it should be
acceptable only when the party does not invoke the said right or
waives the same.
The Court finds that Saunar was not treated fairly in the
proceedings before the PAGC. He was deprived of the opportunity
to appear in all clarificatory hearings since he was not notified of
the clarificatory hearing attended by an NBI official. Saunar was
thus denied the chance to propound questions through the PAGC
against the opposing parties, when the rules of the PAGC itself
granted Saunar the right to be present during clarificatory
hearings and the chance to ask questions against the opposing
party.
Even assuming that Saunar was not deprived of due process, we
still find merit in reversing his dismissal from the government
service.
Gross neglect of duty negated
by intent of the government
employee concerned
It is true that the dropping from the rolls as a result of AWOL is
not disciplinary in nature and does not result in the forfeiture of
benefits or disqualification from re-employment in the
government.36 Nevertheless, being on AWOL may constitute other
administrative offenses, which may result in the dismissal of the
erring employees and a forfeiture of retirement benefits.37 In the
case at bar, Saunar was charged with the administrative offense
of gross neglect of duty in view of his prolonged absence from
work.
The OP found Saunar guilty of Gross Neglect of Duty and of
violating Section 3(e) of R.A. No. 3019 because he was on AWOL
from March 2005 to May 2006. He, however, bewails that from
the time we was directed to report to the DDROS, he was never
assigned a particular duty or responsibility. As such, Saunar
argues that he cannot be guilty of gross neglect of duty because
there was no "duty" to speak of. In addition, he assails that he
had made himself readily available because he stayed in
establishments near the NBI.
Gross Neglect of Duty, as an administrative offense, has been
jurisprudentially defined. It refers to negligence characterized by
the glaring want of care; by acting or omitting to act in a situation
where there is a duty to act, not inadvertently, but willfully and
intentionally; or by acting with a conscious indifference to
consequences with respect to other persons who may be
affected.38
When Saunar was relieved as regional director of Western
Mindanao and was ordered to report to the DDROS, he was
obligated to report to the said office. He, however, was not
assigned any specific task or duty and was merely advised to
make himself readily available. Saunar often stayed in
establishments near the NBI because he was also not provided a
specific station or office. The same, nonetheless, does not
establish that he willfully and intentionally neglected his duties
especially since every time he was required to attend court
hearings through special orders issued by the NBI, he would do
so. Clearly, Saunar never manifested any intention to neglect or
abandon his duties as an NBI official as he remained compliant
with the lawful orders given to him. In addition, when he received
the order reassigning him as the regional director for the NBI Bicol
Office, he also obeyed the same. Saunar's continued compliance
with the special orders given to him by his superiors to attend
court hearings negate the charge of gross neglect of duty as it
evinces a desire to fulfil the duties and responsibilities specifically
assigned to him.
The Office of the Solicitor General (OSG), however, argues that
Saunar's attendance at several court hearings pursuant to special
orders does not exculpate him from the charge of gross neglect of
duty. As highlighted by the OSG, the certificate of appearances
Saunar presented account only for fourteen (14) days.39
Notwithstanding, Saunar's conduct neither constitutes a violation
of Section 3(e) of R.A. No. 3019. In order to be liable for violating
the said provision, the following elements must concur: (a) the
accused must be a public officer discharging administrative,
judicial or official functions; (b) he must have acted with manifest
partiality, evident bad faith or inexcusable negligence; and (c)
that his action caused any undue injury to any party, including the
government, or giving any private party unwarranted benefits,
advantage or preference in the discharge of his functions.40 As
discussed above, Saunar's action was not tantamount to
inexcusable or gross negligence considering that there was no
intention to abandon his duty as an NBI officer.
Illegally dismissed government
employees entitled to full back
wages and retirement benefits
On 11 August 2014, Saunar reached the compulsory age of
retirement from government service.41 In view of Saunar's
retirement, reinstatement to his previous position had become
impossible. Thus, the only recourse left is to grant monetary
benefits to which illegally dismissed government employees are
entitled.
In Campol v. Balao-as,42 the Court extensively expounded the
rationale behind the grant of full back wages to illegally dismissed
employees, to wit:
An employee of the civil service who is invalidly dismissed
is entitled to the payment of backwages. While this right is
not disputed, there have been variations in our jurisprudence as
to the proper fixing of the amount of backwages that should be
awarded in these cases. We take this opportunity to clarify the
doctrine on this matter.
Ginson and Regis also involved the question of the proper fixing of
backwages. Both cases awarded backwages but limited it to a
period of five years. Ginson does not provide for an exhaustive
explanation for this five-year cap. Regis, on the other hand,
cites Cristobal v. Melchor, Balquidra v. CFI of Capiz, Branch II, 32
Laganapan v. Asedillo, Antiporda v. Ticao, and San Luis v. Court of
Appeals, in support of its ruling. We note that these cases also do
not clearly explain why there must be a cap for the award of
backwages, with the exception of Cristobal. In Cristobal, a 1977
case, we held that the award of backwages should be for a fixed
period of five years, applying by analogy the then prevailing
doctrine in labor law involving employees who suffered unfair
labor practice. We highlight that this rule has been rendered
obsolete by virtue of Republic Act No. 6175 which amended the
Labor Code. Under the Labor Code, employees illegally dismissed
are entitled to the payment of backwages from the time his or her
compensation was withheld up to the time of his or her actual
reinstatement.
In 2005, our jurisprudence on backwages for illegally dismissed
employees of the civil service veered away from the ruling
in Cristobal.
Thus, in Civil Service Commission v. Gentallan, we categorically
declared—
An illegally dismissed government employee who is later ordered
reinstated is entitled to backwages and other monetary benefits
from the time of her illegal dismissal up to her reinstatement. This
is only fair and just because an employee who is reinstated after
having been illegally dismissed is considered as not having left her
office and should be given the corresponding compensation at the
time of her reinstatement.
We repeated this ruling in the 2005 case Batangas State
University v. Bonifacio, in the 2007 case Romagos v. Metro Cebu
Water District, and in the 2010 case Civil Service Commission v.
Magnaye, Jr.
Thus, the Decision, in refusing to award backwages from Campol's
dismissal until his actual reinstatement, must be reversed. There
is no legal nor jurisprudential basis for this ruling. An employee
of the civil service who is ordered reinstated is also entitled
to the full payment of his or her backwages during the
entire period of time that he or she was wrongfully
prevented from performing the duties of his or her position
and from enjoying its benefits. This is necessarily so because,
in the eyes of the law, the employee never truly left the
office. Fixing the backwages to five years or to the period of
time until the employee found a new employment is not a
full recompense for the damage done by the illegal
dismissal of an employee. Worse, it effectively punishes an
employee for being dismissed without his or her fault. In cases
like this, the twin award of reinstatement and payment of full
backwages are dictated by the constitutional mandate to protect
civil service employees' right to security of tenure. Anything less
than this falls short of the justice due to government employees
unfairly removed from office. This is the prevailing doctrine and
should be applied in Campol's case.
This entitlement to full backwages also means that there is no
need to deduct Campol's earnings from his employment with PAO
from the award. The right to receive full backwages means exactly
this — that it corresponds to Campol's salary at the time of his
dismissal until his reinstatement. Any income he may have
obtained during the litigation of the case shall not be
deducted from this amount. This is consistent with our
ruling that an employee illegally dismissed has the right to
live and to find employment elsewhere during the
pendency of the case. At the same time, an employer who
illegally dismisses an employee has the obligation to pay
him or her what he or she should have received had the
illegal act not be done. It is an employer's price or penalty for
illegally dismissing an employee.
xxxx
We rule that employees in the civil service should be
accorded this same right. It is only by imposing this rule that
we will be able to uphold the constitutional right to security of
tenure with full force and effect. Through this, those who
possess the power to dismiss employees in the civil service
will be reminded to be more circumspect in exercising their
authority as a breach of an employee's right to security of
tenure will lead to the full application of law and
jurisprudence to ensure that the employee is reinstated
and paid complete backwages. (emphasis supplied)
As it stands, Saunar should have been entitled to full back wages
from the time he was illegally dismissed until his reinstatement. In
view of his retirement, however, reinstatement is no longer
feasible. As such, the back wages should be computed from the
time of his illegal dismissal up to his compulsory retirement.43 In
addition, Saunar is entitled to receive the retirement benefits he
should have received if he were not illegally dismissed.
WHEREFORE, the petition is GRANTED. The 20 October 2008
Decision of the Court of Appeals in CA-G.R. SP No. 100157
is REVERSED and SET ASIDE. Petitioner Carlos R. Saunar is
entitled to full back wages from the time of his illegal dismissal
until his retirement and to receive his retirement benefits.
SO ORDERED.
Velasco, Jr., (Chairperson), Leonen, and Gesmundo, JJ., concur.
Bersamin, J., on official leave.
--------------------------------------------------------------------------
G.R. Nos. 212014-15, December 06, 2016
RICHARD A. CAMBE, Petitioner, v. OFFICE OF THE
OMBUDSMAN, NATIONAL BUREAU OF INVESTIGATION,
LEVITO D. BALIGOD, AND FIELD INVESTIGATION
OFFICE, Respondents.
G.R. Nos. 212427-28
SENATOR RAMON "BONG" REVILLA,
JR., Petitioner, v. OFFICE OF THE OMBUDSMAN, THROUGH
ITS SPECIAL PANEL OF INVESTIGATORS, NATIONAL
BUREAU OF INVESTIGATION, LEVITO D. BALIGOD, AND
FIELD INVESTIGATION OFFICE, OFFICE OF THE
OMBUDSMAN, Respondents.
G.R. Nos. 212694-95
SENATOR RAMON "BONG" REVILLA,
JR., Petitioner, v. OFFICE OF THE OMBUDSMAN, NATIONAL
BUREAU OF INVESTIGATION, LEVITO D. BALIGOD, FIELD
INVESTIGATION OFFICE OF THE OMBUDSMAN, OFFICE OF
THE SPECIAL PROSECUTOR, AND THE HONORABLE
SANDIGANBAYAN, Respondents.
G.R. Nos. 212794-95
RICHARD A. CAMBE, Petitioner, v. OFFICE OF THE
OMBUDSMAN, NATIONAL BUREAU OF INVESTIGATION,
LEVITO D. BALIGOD, AND FIELD INVESTIGATION
OFFICE, Respondents.
G.R. Nos. 213477-78
JOHN RAYMUND DE ASIS, Petitioner, v. CONCHITA CARPIO
MORALES IN HER OFFICIAL CAPACITY AS OMBUDSMAN,
PEOPLE OF THE PHILIPPINES AND SANDIGANBAYAN,
FIRST DIVISION, Respondents.
G.R. Nos. 213532-33
RONALD JOHN LIM, Petitioner, v. CONCHITA CARPIO
MORALES IN HER OFFICIAL CAPACITY AS OMBUDSMAN,
PEOPLE OF THE PHILIPPINES AND SANDIGANBAYAN,
FIRST DIVISION, Respondents.
G.R. Nos. 213536-37
JANET LIM NAPOLES, Petitioner, v. CONCHITA CARPIO
MORALES IN HER OFFICIAL CAPACITY AS OMBUDSMAN,
PEOPLE OF THE PHILIPPINES AND SANDIGANBAYAN,
FIRST DIVISION, Respondents.
G.R. Nos. 218744-59
MARIO L. RELAMPAGOS, ROSARIO SALAMIDA NUÑEZ,
LALAINE NARAG PAULE, AND MARILOU DIALINO
BARE, Petitioners, v. SANDIGANBAYAN, (FIRST DIVISION)
AND PEOPLE OF THE PHILIPPINES, Respondents.
DECISION
PERLAS-BERNABE, J.:
Before this Court are consolidated petitions1 filed by petitioners
Senator Ramon "Bong" Revilla, Jr. (Sen. Revilla), Richard A.
Cambe (Cambe), Janet Lim Napoles (Napoles or Janet Napoles),
John Raymund De Asis (De Asis), and Ronald John Lim (Lim),
which commonly assail the Joint Resolution2 dated March 28, 2014
and the Joint Order3 dated June 4, 2014 of the Office of the
Ombudsman (Ombudsman) in OMB-C-C-13-0316 and OMB-C-C-
13-0395 finding probable cause to indict them, along with several
others, for the crimes of Plunder, defined and penalized under
Section 2 in relation to Section 1 (d) (1), (2), and (6) of Republic
Act No. (RA) 7080,4 as amended (one [1] count) and/or of
violation of Section 3 (e) of RA 30195 (sixteen [16] counts).
Further assailed are: (1) by Cambe,6 the Ombudsman's Joint
Order7 dated March 14, 2014, which denied Cambe's
Supplemental Counter-Affidavit with Second Motion to Suspend
Proceedings;8 (2) by Sen. Revilla,9 the Ombudsman's
Order10 dated May 15, 2014 which denied Sen. Revilla's Omnibus
Motion11 to re-conduct the preliminary investigation, among
others; and (3) by petitioners Mario L. Relampagos (Relampagos),
Rosario Salamida Nuñez (Nuñez), Lalaine Narag Paule (Paule),
and Marilou Dialino Bare (Bare),12 the Resolutions dated
November 13, 201413 and May 13, 201514 of
the Sandiganbayan which affirmed the finding of probable cause
against them in Criminal Case Nos. SB-14-CRM-0268, 0269, 0272,
0273, 0275, 0276, 0279, and 0280.
The Facts
Petitioners are all charged as co-conspirators for their respective
participations in the illegal pillaging of public funds sourced from
the Priority Development Assistance Fund (PDAF) of Sen. Revilla
for the years 2006 to 2010,15 in the total amount of
P517,000,000.00.16 The charges are contained in two (2)
complaints, namely: (1) a Complaint for Plunder17 filed by the
National Bureau of Investigation (NBI) and Atty. Levito D. Baligod
on September 16, 2013, docketed as OMB-C-C-13-0316; and (2)
a Complaint for Plunder and violation of Section 3 (e) of RA
301918 filed by the Field Investigation Office of the Ombudsman
(FIO) on November 18, 2013, docketed as OMB-C-C-13-0395,
both before the Ombudsman. Briefly stated, petitioners were
implicated for the following acts:
(a) Sen. Revilla, as Senator of the Republic of the Philippines, for
authorizing the illegal utilization, diversion, and disbursement of
his allocated PDAF through his endorsement of fraudulent Non-
Governmental Organizations (NGOs) created and controlled by
Napoles's JLN (Janet Lim Napoles) Corporation19 in relation to
"ghost" PDAF-funded projects,20 and for receiving significant
portions of the diverted PDAF funds as his "commission" or
"kickback";21
(b) Cambe, as Chief of Staff of Sen. Revilla during the times
material to this case, for processing the utilization, diversion, and
disbursement of Sen. Revilla's PDAF,22 and for personally receiving
his own "commission" or "kickback" from the diverted funds;23
(c) Napoles, as the mastermind of the entire PDAF scam, for
facilitating the illegal utilization, diversion, and disbursement of
Sen. Revilla's PDAF through: (1) the commencement via "business
propositions" with the legislator regarding his allocated PDAF; (2)
the creation and operation of JLN-controlled NGOs to serve as
"conduits" for "ghost" PDAF-funded projects; (3) the use of
spurious receipts and liquidation documents to make it appear
that the projects were implemented by her NGOs; (4) the
falsification and machinations used in securing funds from the
various implementing agencies (IAs) and in liquidating
disbursements; and (5) the remittance of Sen. Revilla's PDAF for
misappropriation;24
(d) Lim and De Asis, as staff employees of Napoles, for assisting
in the fraudulent processing and releasing of the PDAF funds to
the JLN-controlled NGOs25 through, among others, their
cralawred
designation as Presidents/Incorporators26 of JLN-controlled NGOs,
namely, Kaupdanan Para sa Mangunguma Foundation,
Inc. (KPMFI)27 and Ginintuang Alay sa Magsasaka Foundation,
Inc. (GAMFI),28 respectively, and for eventually remitting the
PDAF funds to Napoles's control;29 and
(e) Relampagos, Nuñez, Paule, and Bare (Relampagos, et al.),
as employees of the Department of Budget and Management
(DBM), for participating in the misuse or diversion of Sen. Revilla's
PDAF, by acting as "contacts" of Napoles within the DBM, and
thereby, assisting in the release of the Special Allotment Release
Orders (SAROs) and Notices of Cash Allocation (NCAs) covering
Sen. Revilla's PDAF.30
As alleged, the PDAF scheme commences with Napoles meeting
with a legislator - in this case, Sen. Revilla - with the former
giving an offer to "acquire" his PDAF allocation in exchange for a
"commission" or "kickback" amounting to a certain percentage of
the PDAF.31 Upon their agreement on the conditions of the PDAF
acquisition, including the project for which the PDAF will be
utilized, the corresponding IA tasked to implement the same, and
the legislator's "commission" or "kickback" ranging from 40-60%
of either the project cost or the amount stated in the SARO,32 the
legislator would then write a letter addressed to the Senate
President for the immediate release of his PDAF, who in turn, will
endorse such request to the DBM for the release of the
SARO.33 By this time, the initial advance portion of the
"commission" would be remitted by Napoles to the
legislator.34 Upon release of the SARO, Napoles would then direct
her staff - including whistleblowers Benhur Luy (Luy), Marina Sula
(Sula), and Merlina Suñas (Suñas) to prepare PDAF documents
containing, inter alia, the preferred JLN-controlled NGO that will
be used as a "conduit" for the implementation of the project, the
project proposals of the identified NGO, and the endorsement
letters to be signed by the legislator and/or his staff, all for the
approval of the legislator;35 and would remit the remaining portion
or balance of the "commission" of the legislator, which is usually
delivered by her staff, Lim and De Asis.36 Once the documents are
approved, the same would be transmitted to the IA which would
handle the preparation of the Memorandum of Agreement (MOA)
to be executed by the legislator's office, the IA, and the chosen
NGO.37 Thereafter, the DBM would release the NCA38 to the IA
concerned, the head/official of which, in turn, would expedite the
transaction and release of the corresponding check representing
the PDAF disbursement, in exchange for a ten percent (10%)
share in the project cost.39 Among those tasked by Napoles to pick
up the checks and deposit them to the bank accounts of the NGO
concerned were Luy, Suñas, and De Asis.40 Once the funds are in
the account of the JLN-controlled NGO, Napoles would then call
the bank to facilitate the withdrawal thereof.41 Upon withdrawal of
the said funds by Napoles's staff, the latter would bring the
proceeds to the office of JLN Corporation for accounting.42 Napoles
would then decide how much will be left in the office and how
much will be brought to her residence in Taguig City. De Asis, Lim,
Luy, and Suñas were the ones instructed to deliver the money to
Napoles's residence.43 Finally, to liquidate the disbursements,
Napoles and her staff would manufacture fictitious lists of
beneficiaries, liquidation reports, inspection reports, project
activity reports, and similar documents that would make it appear
that the PDAF-funded projects were implemented when, in fact,
they were not since they were actually inexistent or, in other
words, "ghost" projects.44 Under this modus operandi, Sen.
Revilla, with the help of petitioners, among others, allegedly
funneled his PDAF amounting to around P517,000,000.0045 to the
JLN-controlled NGOs and, in return, received "commissions" or
"kickbacks" amounting to at least P224,512,500.0046
In the Orders dated November 19, 201347 and November 29,
2013,48 the Ombudsman directed petitioners, along with several
others, to submit their respective counter-affidavits, to which
petitioners complied with, except for Napoles and Lim.49
In his defense, Revilla filed his Counter-Affidavit dated January
16, 2014, contending that: (a) his and Cambe's signatures in the
PDAF documents were forgeries; (b) the utilization of his PDAF
had "always been regular and above-board"; (c) his involvement
in the release of his PDAF is limited; and (d) there is "no credible
proof" to show that he committed said illegal acts and that
conspiracy exists between him and all the other persons involved
in the PDAF scam.50
Cambe, on the other hand, filed his Counter-Affidavit dated
January 20, 2014 and Supplemental Counter-Affidavit dated
March 12, 2014, maintaining that: (a) his signatures in the PDAF
documents were all forgeries; and (b) he did not receive any
money from Sen. Revilla's PDAF nor connive with any of the
alleged co-conspirators to acquire ill-gotten wealth.51
For his part, De Asis filed his Counter-Affidavit dated January 16,
2014, admitting that: (a) he was an employee of the JLN
Corporation; (b) he did pick up checks for JLN-controlled NGOs;
and (c) he was an incorporator in one of the JLN-controlled NGOs;
but denying that he personally benefited from the supposed
misuse of Sen. Revilla's PDAF.52
Meanwhile, Relampagos, et al., in their separate Counter-
Affidavits dated December 13, 2013, contended that: (a) there is
no probable cause and factual or legal basis to indict them for the
offenses charged; and (b) the criminal complaints did not
specifically mention their names as among those who allegedly
participated in the misuse of Sen. Revilla's PDAF.53
Pending resolution of the Ombudsman cases, Sen. Revilla and
Cambe separately moved for the suspension of the preliminary
investigation54 on the criminal complaints, which were, however,
denied by the Ombudsman in a Joint Order55 dated January 28,
2014, holding that no prejudicial question exists to warrant the
suspension of the preliminary investigation proceedings.56
Cambe filed another motion57 to suspend proceedings of the
preliminary investigation, claiming that the filing of the criminal
complaints was premature since the Commission on Audit (COA)
had yet to issue an Order of Execution in relation to the Notices of
Disallowance58 (NDs) against Sen. Revilla's Office, docketed as
Special Audits Office (SAO) ND Nos. NLDC-2014-013-PDAF(07-09)
to 020-PDAF(07-09). The said motion was, again, denied by the
Ombudsman in a Joint Order59 dated March 14, 2014 (March 14,
2014 Joint Order). Thus, Cambe elevated the matter to this
Court via a petition for certiorari, docketed as G.R. Nos. 212014-
15.
Meantime, Sen. Revilla filed a Motion to be Furnished Copies of
Motions, Pleadings, and Other Submissions (Motion to be
Furnished),60 praying that he be furnished with copies of all the
counter-affidavits filed by the parties in this case, which was
denied by the Ombudsman in an Order61 dated March 11, 2014.
His motion for reconsideration62 thereof was likewise denied by
the Ombudsman in an Order63 dated March 27, 2014.
Sen. Revilla likewise filed a Motion for Voluntary Inhibition (Of the
Special Panel of Investigators),64 which was also denied by the
Ombudsman in an Order65 dated March 7, 2014. His motion for
reconsideration66 thereof was further denied in an Order67 dated
May 9, 2014.
In a Joint Resolution68 dated March 28, 2014 (March 28, 2014
Joint Resolution), the Ombudsman found probable cause to indict,
among others, petitioners Sen. Revilla, Cambe, Napoles, De Asis,
and Lim of one (1) count of Plunder,69 and all the petitioners
(along with several others), except Lim, of sixteen (16) counts of
violation of Section3 (e) of RA 3019.70
The Ombudsman found that the diversion and/or misuse of Sen.
Revilla's PDAF was coursed through a complex scheme involving
various participants from Sen. Revilla's Office, the DBM, the IAs,
and the JLN-controlled NGOs. The Ombudsman then went on to
conclude that through the said scheme, they were able to siphon
out government funds in the aggregate amount of
P517,000,000.00, with at least P224,512,500.00 received by Sen.
Revilla.71
Thus, the Ombudsman held that probable cause exists against
Sen. Revilla, Cambe, Napoles, De Asis, and Lim for Plunder,
considering that: (a) Sen. Revilla was a public officer at the time
material to the charges; (b) with the help of his co-accused, who
are public officers and private individuals, Sen. Revilla amassed,
accumulated, or acquired ill-gotten wealth through their
intricate modus operandi as described above; and (c) such ill-
gotten wealth amounted to at least P224,512,500.00,72 way more
than the threshold amount of P50,000,000.00 required in the
crime of Plunder.73
In the same manner, the Ombudsman established probable cause
to indict all the petitioners (along with several others), except
Lim, for violation of Section 3 (e) of RA 3019 in light of the
following: (a) Sen. Revilla, Cambe, and Relampagos, et al. are all
public officers, while private individuals Napoles and De Asis all
conspired with these public officers; (b) said public officers
exhibited manifest partiality to Napoles and her cohorts by
favoring her controlled NGOs without the benefit of public bidding
and without having been authorized by an appropriation law or
ordinance, as legally mandated; (c) said public officers likewise
exhibited their bad faith by unduly benefiting from the "ghost"
PDAF-funded projects through the receipt of "commissions,"
"kickbacks," and the like; and (d) their collective acts caused
undue injury to the government in the aggregate amount of
P517,000,000.00.74
Aggrieved, all the petitioners separately moved for the
reconsideration75 of the March 28, 2014 Joint Resolution.
Specifically, Sen. Revilla, in his motion for
reconsideration,76 pointed out that the Ombudsman's use of the
counter-affidavits, which documents he prayed to be furnished
with in his denied Motion to be Furnished, was a grave violation of
his constitutionally guaranteed right to due process.
Pending resolution of the aforesaid motions for reconsideration,
the Ombudsman issued a Joint Order77 dated May 7, 2014
granting Sen. Revilla's Motion to be Furnished, but only with
respect to the counter-affidavits of his six (6) co-
respondents.78 He was also directed to file his comment thereon.
Dissatisfied, Sen. Revilla then filed an Omnibus Motion79 dated
May 13,2014 praying for the: (a) partial reconsideration of the
May 7, 2014 Joint Order; (b) recall of the March 28, 2014 Joint
Resolution; and (c) re-conduct of the preliminary investigation and
reconstitution of another special panel of investigators.80 The said
Omnibus Motion having been denied by the Ombudsman in an
Order81 dated May 15, 2014, Sen. Revilla elevated the matter to
this Court via a petition for certiorari, docketed as G.R. Nos.
212427-28.
On June 4, 2014, the Ombudsman issued a Joint Order82 (June 4,
2014 Joint Order) denying petitioners' motions for reconsideration
for lack of merit and, thereby, affirming the March 28, 2014 Joint
Resolution with minor modifications to correct clerical
errors.83 These Ombudsman's issuances led to the filing
of certiorari petitions before this Court, docketed as G.R. Nos.
212694-95, G.R. Nos. 212794-95, G.R. Nos. 213477-78,
G.R. Nos. 213532-33, and G.R. Nos. 213536-37.
Consequently, on June 6 and 9, 2014, Informations were filed by
the Ombudsman before the Sandiganbayan, charging: (a) Sen.
Revilla, Cambe, Napoles, De Asis, and Lim of one (1) count of
Plunder, docketed as Criminal Case No. SB-14-CRM-0240;84 and
(b) all the petitioners (along with several others), except Lim, of
sixteen (16) counts of violation of Section 3 (e) of RA 3019,
docketed as Criminal Case Nos. SB-14-CRM-0267 to 0282.85
To forestall the service of the warrant of arrest against him, Sen.
Revilla filed on June 13, 2014, a Motion for Judicial Determination
of Probable Cause and Deferment and/or Suspension of
Proceedings.86 Likewise, Relampagos, et al. moved that
the Sandiganbayan declare lack of probable cause against them
and suspend proceedings.87
On June 19, 2014, the Sandiganbayan issued a Resolution, finding
probable cause against petitioners and their co-accused and,
thereby, issued the corresponding warrants of arrest against
them.88
Thereafter, Relampagos, et al. filed an Omnibus Motion for
Reconsideration of the Resolution Dated 19 June 2014 with Motion
to Recall Warrants of Arrest and to Defer Arraignment.89
In aResolution90 dated August 28, 2014,
the Sandiganbayan partially granted the said motion, and
dismissed Criminal Case Nos. SB-14-CRM-0267, 0270, 0271,
0274, 0277, 0278, 0281, and 0282 in so far as Relampagos, et al.
were concerned for the reason that the SAROs pertinent to these
criminal cases were not issued or signed by Relampagos, et al.,
but by then DBM Secretary Rolando Andaya. However,
the Sandiganbayan ordered the prosecution to present additional
evidence to establish the existence of probable cause against
them in Criminal Case Nos. SB-14-CRM-0268, 0269, 0272, 0273,
0275, 0276, 0279, and 0280.
The dismissal of Criminal Case Nos. SB-14-CRM-0267, 0270,
0271, 0274, 0277, 0278, 0281, and 0282 against Relampagos, et
al. was appealed91 by the prosecution, but was denied by
the Sandiganbayan in a Resolution92 dated November 13, 2014. In
the same Resolution, the Sandiganbayan affirmed the finding of
probable cause against Relampagos, et al. in Criminal Case Nos.
SB-14-CRM-0268, 0269, 0272, 0273, 0275, 0276, 0279, and
0280 on the ground that the defenses they raised were
evidentiary in character.93 In particular, the Sandiganbayan held
that the issue of whether the IA's endorsement was indispensable
before the SARO can be issued is a matter of evidence to be
threshed out during trial.94
Hence, Relampagos, et al. filed a motion for partial
reconsideration95 citing DBM Circular Letter No. 2015-1, s. of
2015,96 which supposedly clarified that the IAs' endorsements are
no longer required before the issuance of the corresponding
SARO. The said motion was denied by the Sandiganbayan in a
Resolution97 dated May 13, 2015, pointing out that said DBM
Circular was issued only after the Ombudsman's issuance of the
March 28, 2014 Joint Resolution.98 Thus, Relampagos, et al.
elevated the issue before the Court via a petition for certiorari,
docketed as G.R. Nos. 218744-59.
The Issue Before This Court
The core issue in this case is whether or not the findings of
probable cause against all petitioners should be upheld.
The Court's Ruling
All petitions are bereft of merit.
I. Cambe's Motion to Suspend Proceedings.
At the outset, the Court traverses the procedural issue raised by
Cambe in his petition in G.R. Nos. 212014-15. In particular,
Cambe seeks to annul and set aside the Ombudsman's March 14,
2014 Joint Order which denied his motion to suspend proceedings,
arguing that the COA's issuance of an Order of Execution is a
condition precedent to the filing of the criminal complaints against
him. This relates to the twelve (12) NDs received by the Office of
Sen. Revilla on January 14, 2014 and February 4, 2014 pertaining
to expenditures charged against his PDAF during the period 2007
to 2009, docketed as SAO ND Nos. TRC-2013-016-PDAF(07-09) to
019-PDAF(07-09)99 and NLDC-2014-013-PDAF(07-09) to 020-
PDAF(07-09),100 respectively, which Cambe claims should first
attain finality; otherwise, the filing of the criminal complaints
would be premature pursuant to the COA's 2009 Revised Rules of
Procedure.101
The Court disagrees.
The administrative aspect of the cases against Cambe and Sen.
Revilla in relation to the COA's audit is clearly separate and
distinct from the criminal aspect covering the charges of Plunder
and/or of violation of Section 3 (e) of RA 3019 against them.
Hence, the incidents related to it should have no effect on the
filing of the latter. In Villaseñor v. Sandiganbayan,102 this Court
explained that:
[T]here are three kinds of remedies that are available against a
public officer for impropriety in the performance of his powers and
the discharge of his duties: (1) civil, (2) criminal, and (3)
administrative [and that] [t]hese remedies may be invoked
separately, alternately, simultaneously or successively.
Sometimes, the same offense may be the subject of all three
kinds of remedies.
xxxx
It is clear, then, that criminal and administrative cases are distinct
from each other. The settled rule is that criminal and civil cases
are altogether different from administrative matters, such that the
first two will not inevitably govern or affect the third and vice
versa. Verily, administrative cases may proceed
independently of criminal proceedings.103
In Reyna v. COA (Reyna),104 this Court particularly declared that
"[t]he criminal case filed before the Office of the Ombudsman is
distinct and separate from the proceedings on the disallowance
before the COA."105
Cambe's reliance on Section 6, Rule XIII of the 2009 Revised
Rules of Procedure of the COA is misplaced. As worded, the
provision only accounts for the possibility of the filing of criminal
charges upon referral of the audit findings to the Ombudsman:
Section 6. Referral to the Ombudsman. - The Auditor shall report
to his Director all instances of failure or refusal to comply with the
decisions or orders of the Commission contemplated in the
preceding sections. The COA Director shall see to it that the report
is supported by the sworn statement of the Auditor concerned,
identifying among others, the persons liable and describing the
participation of each. He shall then refer the matter to the Legal
Services Sector who shall refer the matter to the Office of the
Ombudsman or other appropriate office for the possible filing of
appropriate administrative or criminal action.
Nowhere does the provision state any delimitation or precondition
to the filing of such criminal charges. As correctly pointed out by
the Ombudsman, "an audit disallowance may not necessarily
result in the imposition of disciplinary sanctions or criminal
prosecution of the responsible persons. Conversely, therefore, an
administrative or criminal case may prosper even without an audit
disallowance. Verily, Rule XIII, Section 6 is consistent with the
ruling in [Reyna] that a proceeding involving an audit disallowance
is distinct and separate from a preliminary investigation or a
disciplinary complaint."106
In fine, the Ombudsman did not gravely abuse its discretion in
promulgating its March 14, 2014 Joint Order which denied
Cambe's motion to suspend proceedings. Perforce, Cambe's
petition in G.R. Nos. 212014-15 is dismissed. That being said,
the Court now proceeds to resolve the main substantive issue
anent the presence of probable cause against all petitioners.
II. Parameters of Review.
Time and again, this Court's consistent policy has been to
maintain non-interference in the Ombudsman's determination of
the existence of probable cause, provided there is no grave abuse
in the exercise of such discretion. This observed policy is based
not only in respect for the investigatory and prosecutory powers
granted by the 1987 Constitution to the Office of the Ombudsman,
but upon practicality as well.107
Grave abuse of discretion implies a capricious and whimsical
exercise of judgment tantamount to lack of jurisdiction. The
Ombudsman's exercise of power must have been done in an
arbitrary or despotic manner which must be so patent and gross
as to amount to an evasion of a positive duty or a virtual refusal
to perform the duty enjoined or to act at all in contemplation of
law.108
Probable cause simply means "such facts as are sufficient to
engender a well-founded belief that a crime has been committed
and that respondent is probably guilty thereof. The term does not
mean 'actual and positive cause' nor does it import absolute
certainty. It is merely based on opinion and reasonable
belief."109 "[T]hus, a finding based on more than bare suspicion
but less than evidence that would justify a conviction would
suffice."110
In determining the elements of the crime charged for purposes of
arriving at a finding of probable cause, "only facts sufficient to
support a prima facie case against the [accused] are
required, not absolute certainty."111 In this case, the
petitioners were charged with the crimes of Plunder and/or
violations of Section 3 (e) of RA 3019. Plunder, defined and
penalized under Section 2112 of RA 7080, as amended, has the
following elements: (a) that the offender is a public officer, who
acts by himself or in connivance with members of his family,
relatives by affinity or consanguinity, business associates,
subordinates or other persons; (b) that he amasses, accumulates
or acquires ill-gotten wealth through a combination or series of
overt or criminal acts described in Section 1 (d)113 thereof; and (c)
that the aggregate amount or total value of the ill-gotten wealth
amassed, accumulated or acquired is at least Fifty Million Pesos
(P50,000,000.00).114 On the other hand, the elements of violation
of Section 3 (e)115 of RA 3019 are: (a) that the accused must be a
public officer discharging administrative, judicial, or official
functions (or a private individual acting in conspiracy with such
public officers); (b) that he acted with manifest partiality, evident
bad faith, or inexcusable negligence; and (c) that his action
caused any undue injury to any party, including the government,
or giving any private party unwarranted benefits, advantage, or
preference in the discharge of his functions.116 In determining
probable cause therefor, only a showing of the ostensible
presence of these elements is required.
It should be borne in mind that probable cause is determined
during the context of a preliminary investigation which is
"merely an inquisitorial mode of discovering whether or not
there is reasonable basis to believe that a crime has been
committed and that the person charged should be held
responsible for it."117 It "is not the occasion for the full and
exhaustive display of the prosecution's evidence."118 Therefore,
"the validity and merits of a party's defense or accusation, as well
as the admissibility of testimonies and evidence, are better
ventilated during trial proper than at the preliminary investigation
level."119 Accordingly, "owing to the initiatory nature of
preliminary investigations, the technical rules of evidence
should not be applied in the course of its proceedings."120 In
this light, and as will be elaborated upon below, this Court has
ruled that "probable cause can be established with hearsay
evidence, as long as there is substantial basis for crediting the
hearsay,"121 and that even an invocation of the rule on res inter
alios acta at this stage of the proceedings is improper.122
Guided by these considerations, the Court finds that the
Ombudsman did not gravely abuse its discretion in finding
probable cause to indict Sen. Revilla, Cambe, Napoles, De Asis,
and Lim of one (1) count of Plunder, and all the petitioners,
except Lim, of sixteen (16) counts of violation of Section 3 (e) of
RA 3019.
III. Probable Cause Against Sen. Revilla.
First, in G.R. Nos. 212694-95, Sen. Revilla seeks to annul the
March 28, 2014 Joint Resolution and the June 4, 2014 Joint Order
of the Ombudsman finding probable cause against him for the
crimes charged, Among others, Sen. Revilla faults the
Ombudsman for allegedly disregarding his defense of forgery, and
further contends that in the absence of other competent
testimony, the Ombudsman cannot consider the whistleblowers'
testimonies who purportedly were his co-conspirators in the PDAF
scam, pursuant to the res inter alios acta rule.
The petition holds no water.
The finding of probable cause against Sen. Revilla is amply
supported by the evidence on record. At the forefront are
the PDAF documents, consisting of the written endorsements
signed by Sen. Revilla123 himself requesting the IAs to release his
PDAF funds to the identified JLN-controlled NGOs, as well as other
documents that made possible the processing of his PDAF, e.g.,
the MOAs executed by the legislator's office, the IA, and the
chosen NGO. All these documents - even those not actually signed
by Sen. Revilla - directly implicate him for the crimes charged, as
they were nonetheless, all issued under the authority of his Office
as Senator of the Republic of the Philippines. In Belgica v.
Ochoa (Belgica),124 this Court observed that "the defining feature
of all forms of Congressional Pork Barrel would be the authority of
legislators to participate in the post-enactment phases of project
implementation."125 "At its core, legislators may it be through
project lists, prior consultations or program menus - have been
consistently accorded post-enactment authority to identify the
projects they desire to be funded through various Congressional
Pork Barrel allocations."126 It is through this mechanism that
individual legislators, such as Sen. Revilla, were able to practically
dictate the entire expenditure of the PDAF allocated to their offices
throughout the years.
In particular, the Ombudsman details that "the NGO endorsed by
the legislator would be among those organized and controlled by
Napoles. In fact, these NGOs were specifically set by Napoles for
the x x x purpose [of having the PDAF funds
released]."127 Napoles's staff would then "prepare the PDAF
documents for the approval of the legislator and reflecting the
preferred NGO to implement the undertaking."128 These
documents "are transmitted to the IA which, in turn, handles the
preparation of the MOA relating to the project, to be executed by
the legislator's office, the IA[,] and the NGO concerned." "The
projects are authorized as eligible under the DBM's menu for pork
barrel allocations. [However,] [i]t bears noting that the NGO
is directly endorsed by the legislator [and that] [n]o public
bidding or negotiated procurement [took] place."129 As such,
there was a defiance of Government Procurement Policy Board
(GPPB) Resolution No. 012-2007 which states that:
4.1 When an appropriation law or ordinance specifically earmarks
an amount for projects to be specifically contracted out to
NGOs, the procuring entity may select an NGO through
competitive bidding or negotiated procurement under
Section 53[(j)] of the [IRR-A]. (Emphasis and underscoring
supplied)
Anent Sen. Revilla's claim that his signatures in the documentary
evidence presented were forged, it must be emphasized that "the
findings of the x x x prosecutor [on the issue of forgery]
should be ventilated in a full-blown trial[.] [This] is
highlighted by the reality that the authenticity of a questioned
signature cannot be determined solely upon its general
characteristics, or its similarities or dissimilarities with the genuine
signature. The duty to determine the authenticity of a
signature rests on the judge who must conduct an
independent examination of the signature itself in order to
arrive at a reasonable conclusion as to its authenticity. [As
such], Section 22 of Rule 132 of the Rules of Court explicitly
authorizes the court, by itself, to make a comparison of the
disputed handwriting with writings admitted or treated as genuine
by the party against whom the evidence is offered, or proved to
be genuine."130 Accordingly, Sen. Revilla's evidence of forgery,
including the findings of his purported handwriting experts,
Rogelio G. Azores (Azores)131 and Forensic Document Examiner
Atty. Desiderio A. Pagui, (Pagui)132 cannot be readily credited at
this stage of the proceedings.
Besides, the Ombudsman aptly observed that Azores and Pagui
admittedly used mere photocopies of the PDAF documents in their
handwriting analyses.133 In Heirs of Gregorio v. Court of
Appeals,134 this Court ruled that "[w]ithout the original document
containing the alleged forged signature, one cannot make a
definitive comparison which would establish forgery," and that
"[a] comparison based on a mere [photo] copy or reproduction of
the document under controversy cannot produce reliable
results."135 Furthermore, it may not be amiss to state that the
credibility of Azores and Pagui as handwriting experts has yet to
be tested. They still have to authenticate their findings and be
subjected to cross-examination. Without a doubt, the prosecution
should also be given a chance to properly contest Azores and
Pagui's findings with evidence of its own. It could all too well
present its own handwriting experts during trial to rebut such
findings.
It is significant to emphasize that the Ombudsman had thoroughly
passed upon the veracity of Sen. Revilla's signatures on the PDAF
documents. As explicitly stated in the March 28, 2014 Joint
Resolution: "[a]t all events, the Special Panel members, after
a prima facie comparison with their naked eyes of the
questioned signatures appearing in the PDAF documents
and the original signatures of [Sen.] Revilla and Cambe in
their respective counter-affidavits, opine that both sets of
signatures, which bear the same style and flourish, were
written by one and the same hands."136 Verily, the
Ombudsman's own factual finding on the absence of forgery, at
least for the purpose of determining probable cause, should be
regarded with utmost respect. "[F]indings of fact by the Office
of the Ombudsman are conclusive when supported by
substantial evidence,"137 as in this case.
The Ombudsman's finding on the absence of forgery furthr gains
credence in light of the July 20, 2011 Letter138signed by Sen.
Revilla submitted to the COA (Confirmation Letter). The
letter evinces on its face that Sen. Revilla had confirmed the
authenticity of his and Cambe's signatures appearing on the PDAF
documents:
After going through these documents and initial examination, it
appears that the signatures and/or initials on these
documents are my signatures or that of my authorized
representative.139
The Ombudsman further noted that the Confirmation Letter
appeared to have originated from Sen. Revilla's Office because it
was issued Bar code/Reference No. 0-2011-13079.140
At this juncture, it deserves mentioning that while Luy indeed
admitted that there were times that the whistleblowers would
forge the signatures of the legislators in the PDAF documents, he,
however, explicitly qualified that such forgeries were made
"[w]ith the approval of Ms. Napoles kasi sila po ang nag-
uusap":
Sen. Escudero: Ang tanong ko, finorge or may finorge na ba
kayong pirma ng senador o congressman dahil pinepeke
nga 'yong beneficiary, 'di ba, galing sa listahan ng kung sino. x
x x.
Mr. Luy: With the approval of Ms. Napoles kasi sila po ang
nag-uusap, mav pagkakataon po na fino-forge po.
Sen. Escudero: May pagkakataong fino-forge [ninyo] ang pirma
ng mambabatas?
Mr. Luy: Opo.141
Luy's testimony therefore explicates that although the
whistleblowers would sometimes forge the legislators' signatures,
such were made with the approval of Napoles based on her prior
agreement with the said legislators. It is not difficult to
discern that this authorization allows for a more expedient
processing of PDAF funds since the documents required for their
release need not pass through the legislator's respective offices. It
is also apparent that this grant of authority gives the legislators
room for plausible deniability: the forging of signatures may serve
as a security measure for legislators to disclaim their participation
in the event of discovery. Therefore, Luy's testimony completely
makes sense as to why the legislators would agree to authorize
Napoles and her staff to forge their signatures. As such, even if it
is assumed that the signatures were forged, it does not mean that
the legislators did not authorize such forgery.
The testimonies of the whistleblowers which the prosecution
submitted before the Ombudsman - are, in fact, the most integral
evidence against Sen. Revilla, since they provide a detailed
account on the inner workings of the PDAF scam to which Sen.
Revilla was directly involved. It should be pointed out that, of all
the Senators, only the Offices of Sen. Revilla, Sen. Juan Ponce
Enrile (Sen. Enrile), and Sen. Jinggoy, Estrada (Sen. Estrada)
were explicitly implicated142 to have dealt with Napols in the
plunder of their PDAF. Also, it is apparent that whistleblowers
Suñas, Sula, and Luy had personal knowledge of the conspiracy
since they were employees of JLN Corporation - the epicenter of
the entire PDAF operation and in their respective capacities, were
individually tasked by N&poles to prepare the pertinent
documents, liquidate the financial transactions, follow up the
release of the NCAs with the DBM, and/or facilitate the withdrawal
of PDAF funds deposited in the NGOs' accounts.143
Among others, it is interesting to note that, as per Luy's
testimony, Sen. Revilla was given his own codename, same as the
other involved legislators with whom Napoles transacted with:
58. T: Maaari mo bang linawin itong sinasabi
mong "codename"?
S: Ang pangalan pong taong [tumanggap] ng pera
ang nilalagay ko sa voucher pero minsan po ay
codename ang nilalagay ko.
59. T: Sino ang nagbigay ng "codename"?
S: Si Madame JANET LIM NAPOLES po ang
nagbigay ng codename kasi daw po ay sa gobyerno
kami nagta-transact.
60. T: Maaari mo bang sabihin kung anu-ano ang
mga "codenames" ng mga ka-transact ni JANET

LIM NAPOLES na pulitiko o kanilang [Chief of
Staff]?
S: Opo. "TANDA" kay Senator Juan Ponce Enrile,
"SEXY/ANAK/KUYA" kay Senator Jinggoy
Estrada, "POGI" kay Senator Bong Revilla,
"GUERERA" kay Congressman Rizalina Seachon-
Lanete, "BONJING" kay Congressman RODOLFO
PLAZA, "BULAKLAK" kay Congressman SAMUEL
DANGWA, "SUHA" kay Congressman ARTHUR
PINGOY, at "KURYENTE" kay Congressman EDGAR
VALDEZ. Mayroon pa po
ibang codename nasa records ko. Sa ngayon po ay
sila lang po ang aking naalala.144
As observed by this Court in the Reyes case, "the names of the
legislators to whom the PDAF shares were disbursed x x x were
identified by the use of 'codenames.' These 'codenames,' which
were obviously devised to hide the identities of the legislators
involved in the scheme, were known by a select few in the JLN
Corporation,"145 such as the whistleblowers. The level of detail of
the whistleblowers' narration of facts would surely impress upon a
reasonable and prudent mind that their statements were not
merely contrived. In addition, the fact that they had no apparent
motive as to why Sen. Revilla, among all others, would be drawn
by the whistleblowers, into such a high-profile case of plundet
should likewise be taken into account. Further, in Reyes, this
Court observed that:
[W]histleblower testimonies - especially in corruption cases, such
as this - should not be condemned, but rather, be welcomed as
these whistleblowers risk incriminating themselves in order to
expose the perpetrators and bring them to justice. In Re: Letter of
Presiding Justice Conrado M. Vasquez, Jr. on CA-G.R. SP No.
103692 (Antonio Rosete, et al. v. Securities and Exchange
Commission, et al.) [590 Phil. 8, 49-50 (2008)], the Court gave
recognition and appreciation to whistleblowers in corruption cases,
considering that corruption is often done in secrecy and it is
almost inevitable to resort to their testimonies in order to pin
down the crooked public officers.146
Sen. Revilla opposes the admission of the whistleblowers'
testimonies based on the res inter alios acta rule. However,
in Reyes, citing Estrada v. Ombudsman,147 this Court had
unanimously ruled that the testimonies of the same
whistleblowers against Jo Christine and John Christopher Napoles,
children of Janet Napoles who were also charged with the
embezzlement of the PDAF, are admissible in evidence,
considering that technical rules of evidence are not binding on the
fiscal during preliminary investigation. This Court was unequivocal
in declaring that the objection on res inter alios acta should falter:
Neither can the Napoles siblings discount the testimonies of the
whistleblowers based on their invocation of the res inter alios
acta rule under Section 28, Rule 130 of the Rules on Evidence,
which states that the rights of a party cannot be prejudiced by an
act, declaration, or omission of another, unless the admission is
by a conspirator under the parameters of Section 30 of the same
Rule. To be sure, the foregoing rule constitutes a technical
rule on evidence which should not be rigidly applied in the
course of preliminary investigation proceedings. In Estrada,
the Court sanctioned the Ombudsman's appreciation of hearsay
evidence, which would otherwise be inadmissible under technical
rules on evidence, during the preliminary investigation "as long as
there is substantial basis for crediting the hearsay." This is
because "such investigation is merely preliminary, and does not
finally adjudicate rights and obligations of parties." Applying the
same logic, and with the similar observation that there lies
substantial basis for crediting the testimonies of the
whistleblowers herein, the objection interposed by the
Napoles siblings under the evidentiary res inter alios
acta rule should falter. Ultimately, as case law edifies, "[t]he
technical rules on evidence are not binding on the fiscal who has
jurisdiction and control over the conduct of a preliminary
investigation," as in this case.148 (Emphases and underscoring
supplied)
Absent any countervailing reason, the rule on stare
decisis149 mandates a similar application of the foregoing ruling to
this case.
In any event, even if it is assumed that the rule on res inter alios
acta were to apply during preliminary investigation, the treatment
of the whistleblowers' statements as hearsay is bound by the
exception on independently relevant statements. "Under the
doctrine of independently relevant statements, regardless of their
truth or falsity, the fact that such statements have been made is
relevant. The hearsay rule does not apply, and the statements are
admissible as evidence. Evidence as to the making of such
statement is not secondary but primary, for the statement itself
may constitute a fact in issue or be circumstantially relevant as to
the existence of such a fact."150 Undoubtedly, the testimonies of
the whistleblowers are independently relevant to prove the
involvement of Sen. Revilla and his coaccused in the present
controversy, considering their respective participations in the
entire PDAF scam. Therefore, the statements made by
whistleblowers Suñas, Sula, and Luy, who were employees of JLN
Corporation and privy to the financial transactions of Napoles
concerning, among others, Sen. Revilla's PDAF, should be given
consideration as they are directly, if not circumstantially, relevant
to the issue at hand.
To add, the prosecution also presented Luy's ledger
entries which corroborate his testimony that Sen. Revilla dealt
with Napoles and received PDAF kickbacks. Luy's records disclose
that the kickbacks amountpd to "at least P224,512,500.00:
P10,000,000.00 for 2006; P61,000,000.00 for 2007;
P80,000,000.00 for 2008; P40,000,000.00 for 2009; and
P33,512,500.00 for 2010."151
Relatedly, it should be clarified that the fact that Luy did not
personally know Sen. Revilla or that none of the
whistleblowers personally saw anyone handing/delivering
money to Sen. Revilla does not mean that they did not
personally know of his involvement. Because of their functions
in JLN Corporation as above-stated, it is evident that they had
personal knowledge of the fact that Napoles named Sen. Revilla as
one of the select-legislators she transacted with. More
significantly, they personally processed the PDAF funds and
documents connected with Sen. Revilla's Office, which lasted for a
considerable amount of time, i.e., four (4) years [2006-2010 as
charged]. As such, their testimonies should not be completely
disregarded as hearsay.
In any case, this Court has resolved that "probable cause can
be established with hearsay evidence, as long as there is
substantial basis for crediting the hearsay."152 The
substantial basis for crediting the whistleblowers' testimonies,
even if so regarded as hearsay, rests on their key functions in JLN
Corporation as above-mentioned, as well as the collective
evidence gathered by the prosecution tending to support the same
conclusion that Sen. Revilla and his alleged co-conspirators acted
in concert to pillage his PDAF funds.
The prosecution further submitted the affidavits of Sen.
Revilla's corespondents which constitute direct evidence that
provide an account of Sen. Revilla's involvement, this time from
the perspective of certain IA officials.
Among others, National Livelihood Development Corporation
Director IV Emmanuel Alexis G. Sevidal, echoed the Ombudsman's
finding that "[Sen.] Revilla, through Cambe, [was] responsible for
'identifying the projects, determining the project costs and
choosing the NGOs' which was manifested in the letters of [Sen.]
Revilla[.]"153
For his part, Technology Resource Center (TRC) Deputy, Director
General Dennis L. Cunanan (Cunanan) narrated that he met Janet
Napoles sometime in 2006 or 2007. According to him, Napoles
introduced herself as "the representative of certain legislators who
supposedly picked TRC as a conduit for PDAF-funded projects"; at
the same occasion, Napoles told him that "her principals were
then Senate President [Enrile], [Sen. Revilla], [and] [Sen.
Estrada.]" Cunanan further averred that he "often ended up
taking and/or making telephone verifications and follow-ups and
receiving legislators or their staff members," all in connection with
PDAF projects. In addition, Cunanan even conveyed that Luy
would occasionally go to his office to pressure him to expedite the
release of the PDAF funds by calling the offices of the legislators
concerned.154
Cunanan's statements were furthr corroborated by TRC
Department Manager III Francisco B. Figura (Figura), wno averred
that legislators would "highly recommend" NGOs/foundations as
conduit implementors and that if TRC disagreed with their
recommendations, said legislators wquld feel insulted and take
away their PDAF from TRC, resulting in the latter losing the
chance to earn service fees.155 According to Figura, this set up
rendered TRC officials powerless to disregard the wishes of Sen.
Revilla especially on the matter of public bidding for the PDAF
projects.156
At this juncture, this Court would like to dispel the notion. that
due process rights were violated when Sen. Revilla was denied
copies of the counter-affidavits of his co-respondents in the
preliminary investigation proceedings before the Ombudsman as
he argues in G.R. Nos. 212427-28. This matter was already
resolved in the similar case of Estrada, where this Court said:
Both the Revised Rules of Criminal Procedure and the Rules of
Procedure of the Office of the Ombudsman require the
investigating officer to furnish the respondent with copies of the
affidavits of the complainant and affidavits of his supporting
witnesses. Neither of these Rules require the investigating officer
to furnish the respondent with copies of the affidavits of his [co-
respondents]. The right of the respondent is only "to
examine the evidence submitted by the complainant," as
expressly stated in Section 3 (b), Rule 112 of the Revised Rules of
Criminal Procedure. This Court has unequivocally ruled
in Paderanga that "Section 3, Rule 112 of the Revised Rules of
Criminal Procedure expressly provides that the respondent shall
only have the right to submit a counter-affidavit, to examine all
other evidence submitted by the complainant and, where the fiscal
sets a hearing to propound clarificatory questions to the parties.
or their witnesses, to be afforded an opportunity to be present but
without the right to examine or cross-examine." Moreover, Section
4 (a, b and c), of Rule II of the Ombudsman's Rule of
Procedure, read together, only require the investigating officer
to furnish the respondent with copies of the affidavits of the
complainant and his supporting witnesses. There is no law or
rule requiring the investigating officer to furnish the
respondent with copies of the affidavits of his co-
respondents.157
In any event, the Ombudsman in this case went beyond its legal
duty and eventually granted Sen. Revilla's requests to be
furnished with said counter-affidavits, and even afforded him the
opportunity to comment thereto.158 Thus, there is more reason to
decline his flawed claims of denial of due process. Case law
statethat the touchstone of due process is the opportunity to be
heard,159 which was undeniably afforded to Sen. Revilla in this
case.
The findings of the COA in its SAO Report No. 2012-2013
(COA report)160 also buttress the finding of probable cause
against Sen.Revilla. This report presents'in detail the various
irregularities in the disbursement of the PDAF allocations of
several legislators in the years 2007 to 2009, such as: (a) the IAs
not actually implementing the purported projects, and instead,
directly releasing the funds to the NGOs after deducting a
"management fee," which were done at the behest of the
sponsoring legislator, including Sen. Revilla; (b) the involved
NGOs did not have any track record in the implementation of
government projects, provided fictitious addresses, submitted
false documents, and were selected without any public bidding
and complying with COA Circular No. 2607-001 and GPPB
Resolution No. 12-2007; and (c) the suppliers who purportedly
provided supplies to the NGOs denied ever dealing with the latter.
Resultantly, the COA Report concluded that the PDAF-funded
projects of Sen. Revilla were "ghost" or inexistent.161
The findings in the COA report were further corroborated by the
field verifications conducted by the Field Investigation Office -
Office of the Ombudsman (FIO) to determine whether or not
Sen. Revilla's PDAF was indeed utilized for its intended livelihood
projects. In the course of investigation, it was revealed that the
mayors and municipal agriculturists, who had reportedly received
livelihood assistance kits/packages, purportedly procured through
Sen. Revilla's PDAF, actually denied receiving the same and
worse, were not even aware of any PDAF-funded projects
intended for their benefit. Moreover, the signatures on the
certificates of acceptance and delivery reports were forged, and in
fact, the supposed beneficiaries listed therein were neither
residents of the place where they were named as such; had
jumbled surnames; deceased; or even downright fictitious. The
foregoing led the FIO to similarly conclude that the purported
livelihood projects were "ghost" projects, and that its proceeds
amounting to P517,000,000.00 were never used for the same.162
Taking together all of the above-stated pieces of evidence, the
COA and FIO reports tend to prima facie establish that
irregularities had indeed attended the disbursement of Sen.
Revilla's PDAF and that he had a hand in such anomalous
releases, being the head of Office which unquestionably exercised
operational control thereof. As the Ombudsman correctly
observed, "[t]he PDAF was allocated to him by virtue of his
position as a Senator, and therefore he exercise[d] control in the
selection of his priority projects and programs. He indorsed
[Napoles's] NGOs in consideration for the remittance of kickbacks
and commissions from Napoles. Compounded by the fact that the
PDAF-funded projects turned out to be 'ghost projects', and that
the rest of the PDAF allocation went into the pockets of Napoles
and her cohorts, [there is probable cause to show that] Revilla
thus unjustly enriched himself at the expense and to the damage
and prejudice of the Filipino people and the Republic of the
Philippines."163 Hence, he should stand trial for violation of Section
3 (e) of RA 3019. For the same reasons, it is apparent that ill-
gotten wealth in the amount of at least P50,000,000.00 (i.e.,
P224,512,500.00) were amassed, accumulated or acquired
through a combination or series of overt acts stated in Section 1
of the Plunder Law. Therefore, Sen. Revilla should likewise stand
trial for Plunder.
Besides, case law holds164 that once the trial court finds probable
cause, which results in the issuance of a warrant of arrest (as
the Sandiganbayan in this case, with respect to Sen. Revilla and
his copetitioners165), any question on the prosecution's conduct of
preliminary investigation becomes moot.
In fine, Sen. Revilla's petitions in G.R. Nos. 212427-28 and G.R.
Nos. 212694-95 are dismissed for lack of merit.
IV. Probable Cause Against Cambe.
The same conclusion obtains with respect to the petition of Cambe
in G.R. Nos. 212794-95 assailing the Ombudsman's finding of
probable cause against him, as well as its failure to furnish him
copies of his corespondents' counter-affidavits.
The above-discussed pieces of evidence are all equally significant
to establish probable cause against Cambe. There is no dispute
that Ca:mbe was Sen. Revilla's trusted aide, being his Chief of
Staff. By such authority, he also exercised operational control over
the affairs of Sen. Revilla's office, including the allocation of his
PDAF. In fact, Cambe's signatures explicitly appear on several
PDAF documents, such as the MOAs allowing the IAs to transfer
Sen. Revilla's PDAF funds allocated for certain projects to various
JLN-controlled NGOs.166
Moreover, Cambe was personally identified by the whistleblowers
to have received PDAF money for himself and for Sen. Revilla. As
recounted by Luy, Cambe was the one who would go to Napoles's
office and receive cash from the latter in the aggregate amount of
P224,512,500.00 representing Sen. Revilla's "commissions" or
"kickbacks" coming from the PDAF scam. The cash would come
either from Luy's vault or from Napoles herself.167 In simple
terms, Cambe allegedly acted as a liaison between Sen. Revilla
and Napoles.
For the same reasons above-discussed, there should be no valid
objection against the appreciation of the PDAF documents and
whistleblowers' testimonies as evidence to establish probable
cause against Cam be at this stage of the proceedings. He also
has no right to be furnished copies of the counter-affidavits ,of his
co-respondents. Thus, this Court holds that Cambe should likewise
stand trial for the crimes charged, and his petition in G.R. Nos.
212014-15 be dismissed.
V. Probable Cause Against Napoles.
In G.R. Nos. 213536-37, Janet Napoles similarly seeks to nullify
the Ombudsman's March 28, 2014 Joint Resolution and June 4,
2014 Joint Order finding probable cause against her for Plunder
and for violation of Section 3 (e) of RA 3019. Essentially, she
argues that the complaints did not establish the specific acts of
the crimes she supposedly committed. She likewise contends that
since she is not a public officer, she cannot be subjected to
prosecution by the Ombudsman before the Sandiganbayan.
Napoles's arguments are untenable.
Records clearly show that Napoles, in all reasonable likelihood,
played an integral role in the illegal utilization, diversion, and
disbursement of Sen. Revilla's PDAF. In fact, she was tagged as
the mastermind of the entire PDAF scam. As outlined by the
Ombudsman, Napoles would approach legislators, such as Sen.
Revilla, and "offer to 'acquire' his x x x PDAF allocation in
exchange for a 'commission' or kickback amounting to a certain
percentage of the PDAF."168 Once Napoles was informed of the
availability of Sen Revilla's PDAF, she and/or her staff would
prepare listings of the available projects specifically indicating the
IAs which would carry out the same. After the listings are released
by Sen. Revilla's Office, Napoles would then give a down payment
from her own pockets for delivery to Sen. Revilla, or in case of his
unavailability, to Cambe who would receive the same on Sen.
Revilla's behalf. Once the SARO and/or the NCA regarding said
project is released, Napoles would then deliver the promised
"kickbacks" to Sen. Revilla. Thereafter, Sen. Revilla and/or Cambe
would endorse Napoles's NGOs to undertake the PDAF-funded
projects, all of which turned out to be "ghost" or "inexistent;"
thus, allowing Napoles and her cohorts to pocket the PDAF
allocation.169
Based on the evidence in support thereof such as the PDAF
documents, whistleblowers' testimonies, the accounts of the IA
officials, and the COA report, as well as the field verifications of
the FIO, Ombudsman, this Court is convinced that there lies
probable cause against Janet Napoles for the charge of Plunder as
it has been prima facie established that she, in conspiracy with
Sen. Revilla, Cambe, and other personalities, was significantly
involved in the afore-described modus operandi to obtain Sen.
Revilla's PDAF amounting to at least P50,000,000.00 in
"kickbacks." In the same manner, there is probable cause against
Napoles for violations of Section 3 (e) of RA 3019, as it is
ostensible that their conspiracy to illegally divert PDAF Funds to
"ghost" projects caused undue prejudice to the government.
That a private individual, such as Napoles, could not be charged
for Plunder and violations of Section 3 (e) of RA 3019 because the
offenders in those crimes are public officers is a complete
misconception. It has been long-settled that while the primary
offender in the aforesaid crimes are public officers, private
individuals may also be held liable for the same if they are found
to have conspired with said officers in committing the
same. This proceeds from the fundamental principle that in cases
of conspiracy, the act of one is the act of all.170 In this case, since
it appears that Napoles has acted in concert with public officers in
the systematic pillaging of Sen. Revilla's PDAF, the Ombudsman
correctly indicted her as a co-conspirator for the aforementioned
crimes.
Thus, Napoles's petition in G.R. Nos. 213536-37 is dismissed.
VI. Probable Cause Against De Asis.
In G.R. Nos. 213477-78, De Asis accuses the Ombudsman of
gravely abusing its discretion in finding probable cause against
him for Plunder and violations of Section 3 (e) of RA 3019,
contending, inter alia, that the performance of his functions as
driver and messenger of Napoles hardly constitutes overt acts of
the aforesaid crimes or a willful participation thereof. In this
regard, he asserts that as a mere high school graduate and former
security guard, it is highly unimaginable for him to conspire with
his employer and other high-ranking government officials to
commit the aforesaid crimes.
The petition has no merit.
Records show that De Asis was designated as the
President/Incorporator171 of KPMFI which was one of the many
NGOs controlled by Napoles that was used in the embezzlement of
Sen. Revilla's PDAF allocations.172 Moreover, whistleblowers Luy
and Suñas explicitly n,amed De Asis as one of those who prepared
money to be given to the lawmaker.173 Said whistleblowers even
declared that De Asis, among others, rec ived the checks issued
by the IAs to the NGOs and deposited the same in the bank; and
that, after the money is withdrawn from the bank, he was also
one of those tasked to bring the money to Janet Napoles's
house.174 Indeed, the foregoing prove to be well-grounded bases
to believe that, in all probability, De Asis conspired with the other
co-accused to commit the crimes charged.
To refute the foregoing allegations, De Asis presented defenses
which heavily centered on his perceived want of criminal intent, as
well as the alleged absence of the elements of the crimes charged.
However, such defenses are evidentiary in nature, and thus, are
better ventilated during trial and not during preliminary
investigation. To stress, a preliminary investigation is not the
occasion for the full and exhaustive display of the prosecution's
evidence; and the presence or absence of the elements of the
crime is evidentiary in nature and is a matter of defense that may
be passed upon only after a full-blown trial on the merits.175
In sum, the Ombudsman did not gravely abuse its discretion in
finding probable cause to indict De Asis for the crimes charged.
Consequently, his petition in G.R. Nos. 213477-78 is dismissed.
VII. Probable Cause Against Lim.
In G.R. Nos. 213532-33, Lim argues that the Ombudsman.
gravely abused its discretion in finding probable cause against him
for Plunder. According to him, the criminal complaints do not
allege a specific action he committed that would demonstrate his
involvement for the crime charged.
Lim's contention is without merit.
As correctly pointed out by the Ombudsman, whistleblowers Luy
and Suñas narrated that over the course of the perpetuation of
the PDAF scam, they, along with the other staff of Napoles - which
includes Lim - would prepare, and thereafter deliver, the
kickbacks intended for Sen. Revilla.176 The preparation and
delivery of kickbacks to the legislator and/or his trusted staff are
indeed overt acts that relate to his involvement in the PDAF
scheme. To note, even if it is assumed that Lim only prepared the
money and did not deliver the same as he claims,177 the act of
preparation is still connected to the common objective of the
conspiracy. Accordingly, this establishes the existence of probable
cause against him for thb crime charged. Hence, his petition
in G.R. Nos. 213532-33 is likewise dismissed.
VIII. Probable Cause Against Relampagos, et al.
Meanwhile, in G.R. Nos. 218744-59, DBM employees
Relampagos, Nuñez, Paule, and Bare assail the Sandiganbayan
Resolutions dated November 13, 2014178 and May 13,
2015179 which judicially found probable cause against them for
eight (8) counts of violation of Section 3 (e) of RA 3019, thereby
affirming the Ombudsman's earlier finding of probable cause
against them (at least for the said eight [8] counts that were
affirmed). In particular, they argue that: (a) they cannot be
faulted for issuing the SAROs without prior IA endorsement as it
was authorized under the General Appropriations Acts (GAAs) for
the years 2007 to 2009; and (b) there was no "undue haste" in
the issuance of the said SAROs as the DBM itself prescribes
shorter periods in the processing of the same.180
Relampagos, et al.'s arguments fail to persuade.
As pointed out by the Ombudsman and the Sandiganbayan, some
of the SAROs and NCAs issued in the perpetuation of the PDAF
scam were issued by the Office of Relampagos as DBM
Undersecretary, where Nuñez, Paule, and Bare are all working - a
finding that they themselves did not dispute.181 More significantly:
(a) whistleblower Luy positively identified Relampagos, et
al. as Napoles's "contact persons" in the DBM; and (b) the
COA Report found irregularities in their issuances of the aforesaid
SAROs and NCAs.182 Ostensibly, these circumstances show
Relampagos et al.'s manifest partiality and bad faith in favor of
Napoles and her cohorts that evidently caused undue prejudice to
the Government. Thus, they must stand trial for violation of
Section 3 (e) of RA 3019.
As to their contentions that there was no "undue haste" in the
issuance of the said SAROs as the GAAs for the years 2007 to
2009 authorized such issuances even without prior IA
endorsement and that the DBM itself prescribes a shorter
processing time for the same, suffice it to say that these are
matters of defense that are better ventilated in a full-blown trial.
The timing of the SARO releases by these DBM officials, as well as
any deviations from legal procedure are but part of a multitude of
factors to be threshed out during trial in order to determine their
exact culpability. Verily, the confines of a preliminary investigation
do not yet allow a full exposition of the parties' claims.
Relampagos, et al.'s petition in G.R. Nos. 218744-59 is therefore
dismissed.
Conclusion
Case law states that "the Ombudsman's finding of probable cause
does not touch on the issue of guilt or innocence of the accused. It
is not the function of the Office of the Ombudsman to rule on such
issue. All that the Office of the Ombudsman did was to weigh the
evidence presented together with the counter-allegations of the
accused and determine if there was enough reason to believe that
a crime has been committed and that the accused are probably
guilty thereof."183 In the review of the Ombudsman's
determination of probable cause, we are guided by this Court's
pronouncement in Vergara v. Ombudsman,184 where it was ruled
that:
[C]ourts do not interfere in the Ombudsman's exercise of
discretion in determining probable cause unless there are
compelling reasons. The Ombudsman's finding of probable cause,
or lack of it, is entitled to great respect absent a showing of grave
abuse of discretion. Besides, to justify the issuance of the writ
of certiorari on the ground of abuse of discretion, the abuse must
be grave, as when the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, and it
must be so patent as to amount to an evasion of a positive duty
or to a virtual refusal to perform the duty enjoined, or to act at
all, in contemplation of law, as to be equivalent to having acted
without jurisdiction.185
Meanwhile, with respect to the Sandiganbayan's judicial
determination of probable cause, this Court, in Delos-Santos Dio
v. Court of Appeals,186 enlightens that:
[A] judge's discretion to dismiss a case immediately after the filing
of the information in court is appropriate only when the failure to
establish probable cause can be clearly inferred from the evidence
presented and not when its existence is simply doubtful. After all,
it call)lot be expected that upon the filing of the information in
court the prosecutor would have already presented all the
evidence necessary to secure a conviction of the accused, the
objective of a previously-conducted preliminary investigation
being merely to determine whether there is sufficient ground to
engender a well-founded belief that a crime has been committed
and that the respondent is probably guilty thereof and should be
held for trial.187
In this case, the Ombudsman (and the Sandiganbayan as to
Relampagos, et al.) did not err in finding probable cause against
all the petitioners. Their findings are fully supported by the
evidence on record and no semblance of misapprehension taints
the same. Moreover, this Court cannot tag key documentary
evidence as forgeries and bar testimonies as hearsay at this stage
of the proceedings; otherwise, it would defy established principles
and norms followed during preliminary investigation.
Jurisprudence teaches us that "[i]n dealing with probable cause[,]
athe very name implies, we deal with probabilities. These are not
technical; they are the factual and practical considerations of
everyday life on which reasonable and prudent men, not legal
technicians, act. The standard of proof is accordingly correlative to
what must be proved."188 Overall, based on the foregoing
disquisitions, the standard of probable cause was adequately
hurdled by the prosecution in this case. As such, no grave abuse
of discretion was committed by the Ombudsman and
the Sandiganbayan in the proceedings a quo. All the petitioners
should therefore stand trial for the crimes they were charged.
WHEREFORE, the petitions are DISMISSED for lack of erit. The
findings of probable cause against all petitioners are
hereby AFFIRMED and the Sandiganbayan, as trial court,
is DIRECTED to commence/continue with the necessary
proceedings in these cases with deliberate dispatch.
SO ORDERED.
----------------------------------------------------------------------
-----------------------------------
G.R. No. 211362 February 24, 2015
FIRST CLASS CADET ALDRIN JEFF P. CUDIA of the
Philippine Military Academy, represented by his father
RENATO P. CUDIA, who also acts on his own behalf, and
BERTENI CATALUNA CAUSING, Petitioners,
vs.
THE SUPERINTENDENT OF THE PHILIPPINE MILITARY
ACADEMY (PMA), THE HONOR COMMITTEE (HC) OF 2014 OF
THE PMA and HC MEMBERS, and the CADET REVIEW AND
APPEALS BOARD (CRAB), Respondents.
x-----------------------x
FILIPINA P. CUDIA, in behalf of CADET FIRST CLASS
ALDRIN JEFF P. CUDIA, and on her own behalf, Petitioner-
Intervenor.
DECISION
PERALTA, J.:
The true test of a cadet's character as a leader rests on his
personal commitment to uphold what is morally and ethically
righteous at the most critical and trying times, and at the most
challenging circumstances. When a cadet must face a dilemma
between what is true and right as against his security, well-being,
pleasures and comfort, or dignity, what is at stake is his honor
and those that [define] his values. A man of an honorable
character does not think twice and chooses the fore. This is the
essence of and. the Spirit of the Honor Code - it is championing
truth and righteousness even if it may mean the surrender of
one's basic rights and privileges.1
The Procedural Antecedents
Six days prior to the March 16, 2014 graduation ceremonies of the
Philippine Military Academy (PMA), petitioners Renato P. Cudia,
acting for himself and in behalf of his son, Cadet First Class Aldrin
Jeff P. Cudia (Cadet JCL Cudia), and Berteni Catalufta Causing
filed this petition for certiorari, prohibition, and mandamus with
application for extremely urgent temporary restraining order
(TRO).2
In a Resolution dated March 1 7, 2014, the Court denied the
prayer for TRO and instead, required respondents to file their
comment on the petition.3
On March 25, 2014, Filipina P. Cudia, acting for herself and in
behalf of her son Cadet 1 CL Cudia, filed a motion for leave to
intervene, attaching thereto the petition-in-intervention.4 Per
Resolution dated March 31, 2014, the Court granted the motion
and resolved to await respondents' comment on the petition.5
A manifestation was then filed by petitioners on April 3, 2014,
recommending the admission of the petition-in-intervention and
adopting it as an integral part of their petition.6 On May 20, 2014,
petitioner-intervenor filed a manifestation with motion for leave to
admit the Final Investigation Report of the Commission on Human
Rights (CHR) dated April 25, 2014.7 The Report8 was relative to
CHR-CAR Case No. 2014-0029 filed by the spouses Renato and
Filipina Cudia (Spouses Cudia), for themselves and in behalf of
their son, against the PMA Honor Committee (HC) members and
Major Vladimir P. Gracilla (Maj. Gracilla)9 for violation of Cadet lCL
Cudia's rights to due process, education, and privacy of
communication. Subsequently, on June 3, 2014, petitioners filed a
motion for leave to adopt the submission of the CHR Report.10 The
manifestation was granted and the motion was noted by the Court
in its Resolution dated July 7, 2014.
After filing three motions for extension of time,11 respondents filed
their Consolidated Comment12 on June 19, 2014. In a motion,
petitioner-intervenor filed a Reply, which was later adopted by
petitioners.13 Submitted as Annex "A" of the Reply was a copy of
the CHR Resolution dated May 22, 2014 regarding CHR-CAR Case
No. 2014-0029.14 We noted and granted the same on August 11,
2014 and October 13, 2014.
Petitioner-intervenor twice filed a manifestation with motion to
submit the case for early resolution,15 which the Court noted in a
Resolution dated August 11, 2014 and October 3, 2014.16
The Facts
Cadet 1 CL Cudia was a member of Siklab Diwa Class of 2014 of
the PMA, the country's premiere military academy located at Fort
Gregorio del Pilar in Baguio City. He belonged to the "A" Company
and was the Deputy Baron of his class. As claimed by petitioners
and petitioner-intervenor (hereinafter collectively called
"petitioners," unless otherwise indicated), he was supposed to
graduate with honors as the class salutatorian, receive the
Philippine Navy Saber as the top Navy cadet graduate, and be
commissioned as an ensign of the Philippine Navy.
On November 14, 2013, the combined classes of the Navy and Air
Force 1 CL cadets had a lesson examination (LE) on Operations
Research (OR432) under Dr. Maria Monica C. Costales (Dr.
Costales) at the PMAFI Room. Per published schedule from the
Headquarters Academic Group, the 4th period class in OR432 was
from 1 :30-3:00 p.m. (1330H-1500H), while the 5th period class
in ENG412 was from 3:05-4:05 p.m. (1505H-1605H).
Five days after, Professor Juanita Berong (Prof. Berong) of the 5th
period class issued a Delinquency Report (DR) against Cadet 1 CL
Cudia because he was "[/]ate for two (2) minutes in his Eng 412
class x x x. "17 Cadets 1 CL Narciso, Arcangel, Miranda, Pontillas,
Diaz, Otila, and Dela Cruz were also reported late for five
minutes.18
On December 4, 2013, the DRs reached the Department of
Tactical Officers. They were logged and transmitted to the
Company Tactical Officers ( CTO) for explanation of the concerned
cadets. Two days later, Cadet lCL Cudia received his DR.
In his Explanation of Report dated December 8, 2013, Cadet lCL
Cudia reasoned out that: "I came directly from OR432 Class. We
were dismissed a bit late by our instructor Sir."19
On December 19, 2013, Major Rommel Dennis Hindang (Maj.
Hindang), the CTO of Cadet 1 CL Cudia, meted out to him the
penalty of 11 demerits and 13 touring hours. Immediately, Cadet
lCL Cudia clarified with Maj. Hindang his alleged violation. The
latter told him that the basis of the punishment was the result of
his conversation with Dr. Costales, who responded that she never
dismissed her class late, and the protocol to dismiss the class 10-
15 minutes earlier than scheduled. When he expressed his
intention to appeal and seek reconsideration of the punishment,
he was · advised to put the request in writing. Hence, that same
day, Cadet 1 CL Cudia addressed his Request for Reconsideration
of Meted Punishment to Maj. Benjamin L. Leander, Senior Tactical
Officer (STO), asserting:
I strongly believe that I am not in control of the circumstances,
our 4th period class ended 1500H and our 5th period class, which
is ENG412, started 1500H also. Immediately after 4t period class,
I went to my next class without any intention of being late Sir.20
A day after, Maj. Leander instructed Maj. Hindang to give his
comments on the request of Cadet 1 CL Cudia and to indicate if
there were other cadets belonging to the same section who were
also late.
On December 28, 2013, Maj. Hindang submitted his reply to Maj.
Leander pointing out that, based on his investigation, the 4th
period class was not dismissed late. As a result, Maj. Leander
sustained the penalty imposed. Petitioners alleged that Cadet 1 CL
Cudia came to know of the denial of his request only on January
24, 2014 upon inquiry with Maj. Leander.
Several days passed, and on January 7, 2014, Cadet lCL Cudia
was informed that Maj. Hindang reported him to the HC21 for
violation of the Honor Code. The Honor Report stated:
Lying that is giving statement that perverts the truth in his written
appeal, stating that his 4th period class ended at l 500H that
made him late in the succeeding class.22
Upon asking the HC Chairman, Cadet 1 CL Mike Anthony P. Mogol
(Cadet 1 CL Mogol), as to what Maj. Hindang meant in his Report,
Cadet lCL Cudia learned that it was based on Maj. Hindang's
conversations with their instructors and classmates as well as his
statement in the request for reconsideration to Maj. Leander. He
then verbally applied for and was granted an extension of time to
answer the charge against him because Dr. Costales, who could
shed light on the matter, was on emergency leave.
On January 13, 2014, Dr. Costales sent text messages to Cadet
lCL Cudia, conveying:
Gud pm cdt cudia. Mam belandres gave me bkground na. She told
me its a report dated november. When maj hindang ask me, no
time referens. (04:25:11 P.M.)
All the while I thot he was refering to dismisal during last day last
december. Whc i told, i wud presume they wil finish early bee its
grp work. (04:29:21 P.M.)23
The next day, Cadets lCL Cudia and Arcangel approached Dr.
Costales, who reaffirmed that she and Maj. Hindang were not in
the same time reference when the latter asked her.
Later, Cadet 1 CL Cudia submitted his letter of explanation on the
Honor Report. He averred:
Sir, We had an LE that day (14 November 2013) in OR432 class.
When the first bell rang (1455), I stood up, reviewed my paper
and submitted it to my instructor, Ms. Costales. After which, I and
Cadet lcl Arcangel asked for some query with regards (sic) to the
deductions of our previous LE. Our instructor gladly answered our
question. She then told me that she will give the copy of our
section grade, so I waited at the hallway outside the ACAD5 office,
and then she came out of the room and gave me a copy of the
grades. Cadet Arcangel, Cadet Narciso and I immediately went to
our 5ti period class which is ENG412.
With these statements, I would like to clarify the following:
1. How could this be lying?
2. What is wrong with the side of Maj. Hindang (why
did he come up to that honor report)?
3. What are his assumptions?
I appeal, in the name of clarity, fairness and truth[,] that my case
be reopened and carefully reviewed for I did not violate the honor
code/system, I can answer NO to both questions (Did I intend to
deceive? Did I intend to take undue advantage?) and for the
following reasons:
1. The honor report of Maj. Hindang was already
settled and finalized given the fact that no face-to-
face personal conversation with Ms. Costales was
conducted to clarify what and when exactly was the
issue at hand.
2. Statements of the respondents support my
explanation.
3. My explanation to my appeal to my DR (Request
for reconsideration of meted punishment) further
supports my explanation in my delinquency report.
4. My understanding of the duration of the "CLASS"
covers not just a lecture in a typical classroom
instruction but includes every transaction and
communication a teacher does with her students,
especially that in our case some cadets asked for
queries, and I am given instruction by which (sic)
were directly related to our CLASS. Her transaction
and communication with our other classmates may
have already ended but ours extended for a little bit.
I agree and consider that because Cadet
CUDIA is under my instruction to wait, and
the other cadets still have business with me,
it is reasonable enough for him to say that
"Our class was dismissed a bit late" (dealing
with matter of seconds or a minute
particularly 45 seconds to 1 minute and 30
seconds)
And with concern to (sic) OR432 class, I can
say it ended on time (1500H).
(signed)
M COSTALES
w/ attached certification
5. I was transparent and honest in explaining the 2-
minute delay and did not attempt to conceal
anything that happened or I did.
6. Furthermore, CPT DULA WAN PA, the Tactical
Officer of Hawk Company[,] and I had a
conversation with regards (sic) to the same matter
for which he can give important points of my case.
7. Cadet lcl DIAZ "D" Co can also stand as a witness
that I waited for Ms. Costales. 24
On January 15, 2014, the HC constituted a team to conduct a
preliminary investigation on the reported honor violation of Cadet
1 CL Cudia. The Foxtrot Company was designated as the
investigating team and was composed of Cadet 1 CL Hasigan as
Presiding Officer, and Cadets 1 CL Mogol, lCL Raguindin, 2CL
Gumilab, 2CL Saldua, 3CL Espejo, and 3CL Poncardas as
members.25 Soon after, the team submitted its Preliminary
Investigation Report recommending that the case be formalized.
The formal investigation against Cadet 1 CL Cudia then ensued.
The Presiding Officer was Cadet 1 CL Rhona K. Salvacion, while
the nine (9) voting members were Cadets lCL Jairus 0. Fantin, lCL
Bryan Sonny S. Arlegui, 1 CL Kim Adrian R. Martal, 1 CL J eanelyn
P. Cabrido, 1 CL ShuAydan G. Ayada, 1 CL Dalton John G. Lagura,
2CL Renato A. Carifio, Jr., 2CL Arwi C. Martinez, and 2CL Niko
Angelo C. Tarayao.26 Acting as recorders tasked to document the
entire proceedings were 4CL Jennifer A. Cuarteron and 3CL
Leoncio Nico A. de Jesus 11.27 Those who observed the trial were
Cadets 1 CL Balmeo, Dag-uman, Hasigan, Raguindin, Paulino,
Arcangel, and Narciso; Cadets 2CL Jocson and Saldua, Jr.; and
Cadet 3CL Umaguing.28
The first formal hearing started late evening of January 20, 2014
and lasted until early morning the next day. Cadet lCL Cudia was
informed of the charge against him, as to which he pleaded "Not
Guilty." Among those who testified were Cadet 1 CL Cudia, Maj.
Hindang, and Cadets 1 CL Arcangel and Narciso. On the second
night of the hearing held on January 21, 2014, Cadet 1 CL Cudia
again appeared and was called to the witness stand along with
Cadets Brit and Barrawed. Dr. Costales also testified under oath
via phone on a loudspeaker. Deliberation among the HC voting
members followed. After that, the ballot sheets were distributed.
The members cast their votes through secret balloting and
submitted their accomplished ballot sheets together with their
written justification. The result was 8-1 in favor of a guilty verdict.
Cadet lCL Dalton John G. Lagura (Cadet lCL Lagura) was the lone
dissenter. Allegedly, upon the order ofHC Chairman Cadet 1 CL
Mogol, the Presiding Officer and voting members went inside a
chamber adjoining the court room for further deliberation. After
several minutes, they went out and the Presiding Officer
announced the 9-0 guilty verdict. Cadet 1 CL Cudia, who already
served nine (9) touring hours, was then informed of the
unanimous votes finding him guilty of violating the Honor Code.
He was immediately placed in the PMA Holding Center until the
resolution of his appeal.
On January 24, 2014, Cadet ICL Cudia filed a written appeal
addressed to the HC Chairman, the full text of which stated:
WRITTEN APPEAL
14 NOVEMBER 2013
This is when I was reported for "Late for two (2) minutes in
Eng412 class", my explanation on this delinquency report when I
received it, is that "Our class was dismissed a (little) bit late and I
came directly from 4th period class ... etc". Knowing the fact that
in my delinquency report, it is stated that ENG412 classes started
1500H and I am late for two minutes, it is logical enough for I
(sic) to interpret it as "I came 1502H during that class". This is
the explanation that came into my mind that time. (I just cannot
recall the exact words I used in explaining that delinquency
report, but what I want to say is that I have no intention to be
late). In my statements, I convey my message as "since I was not
the only one left in that class, and the instructor is with us, I used
the term "CLASS", I used the word "DISMISSED" because I was
under instruction (to wait for her to give the section grade) by the
instructor, Ms. Costales. The other cadets (lCL MIRANDA, lCL
ARCANGEL) still have queries and business with her that made me
decide to use the word "CLASS", while the others who don't have
queries and business with her (ex: lCL NARCISO and 1 CL DIAZ)
were also around.
Note:
The four named cadets were also reported late.
Reference: Para 171. 0. (Leaving the Classroom Prior to Dismissal
Time)(Sec XVII, CCAFPR s2008)
It is stated in this reference that "Cadets shall not linger in the
place of instruction after the section has been dismissed. EXCEPT
when told or allowed to do so by the instructor or by any
competent authority for official purposes. "
The instruction by Ms. Costales was given to me before the two
bells rang (indicating the end of class hour, 1500H). I waited for
her for about 45 seconds to 1 minute and 30 seconds, that made
me to decide to write "a little bit late" in my explanation. Truly,
the class ENDED 1500H but due to official purpose (instruction by
Ms. Costales to wait) and the conflict in academic schedule (to
which I am not in control of the circumstances, 4th PD class
1330H-1500H and 5th PD class 1500H-1 600H), and since Ms.
Costales, my other classmates, and I were there, I used the word
"CLASS".
19 December 2013
I was informed that my delinquency report was awarded, 11
Demerits and 13 Touring hours. Not because I don't want to serve
punishment, but because I know I did nothing wrong, I obeyed
instruction, and believing that my reason is justifiable and valid,
that is why I approached our tactical officer, MAJ HINDANG PAF,
to clarify and ask why it was awarded that day.
In our conversation, he said that he had a phone call to my
instructor and he even added that they have a protocol to dismiss
the class, 15 minutes or 10 minutes before 1500H. I explained:
Sir, I strongly believe that I am not in control of the
circumstances, our 4th period class ended 1500H and our 5th
period class, which is ENG412, started 1500H also. Immediately
after 4th period class, I went to my next class without any
intention of being late Sir.
These statements are supplementary to my explanation in my
delinquency report, in here, I specified the conflict in the schedule
and again, I have no intention to be late. After explaining it
further with these statements, my tactical officer said that since I
was reported in a written form, I should make an appeal in a
written form. Thinking that he already understood what I want to
say, I immediately made an appeal that day stating the words
that I used in having conversation with him.29
Attached to the written appeal was a Certification dated January
24, 2014, wherein Dr. Costales attested:
 1. That Cadet MIRANDA, ARCANGEL, [and] NARCISO was
(sic) with Cadet CUDIA in making query about their latest
grades in OR432 and/or results of UEl outside the ACADS
office. The following facts may explain their queries on 14
November 2013:
a. That I held my class in the PMAFI room instead of
room 104.
b. That OR432 releases grades every Wednesday
and cadets are informed during Thursday, either in
class or posted grades in the bulletin board (grades
released was [sic J based on the previous LEs: latest
LE before UE was Decision Trees).
c. That UE papers were already checked but not yet
recorded due to (sic) other cadets have not taken
the UE. Cadets were allowed to verify scores but not
to look at the papers.
d. Last 23 January 2014, Captain Dulawan clarified if
indeed Cadet NARCISO and ARCANGEL verified
grades. The two cadets said that they verified
something with me after the OR432 class and they
were with Cadet CUD IA. That the statements of the
three (3) cadets are all the same and consistent,
thus[,] I honor that as true.
2. As to the aspect of dismissing late, I could not really
account for the specific time that I dismissed the class. To
this date, I [cannot] really recall an account that is more
than two (2) months earlier. According to my records, there
was a lecture followed by an LE during (sic) on 14
November 2013. To determine the time of my dismissal,
maybe it can be verified with the other members of class I
was handling on that said date.30
Respondents contend that the HC denied the appeal the same
day, January · 24, as it found no reason to conduct a re-trial
based on the arguments and evidence presented.31 Petitioners,
however, claim that the written appeal was not acted upon until
the filing of the petition-in-intervention.32
From January 25 to February 7, 2014, respondents allege that the
Headquarters Tactics Group (HTG) conducted an informal review
to check the findings of the HC. During the course of the
investigation, Prof. Berong was said to have confirmed with the
Officer-in-Charge of the HC that classes started as scheduled (i.e.,
3:05 p.m. or 1505H), and that Cadet lCL Barrawed, the acting
class marcher of ENG412, verified before the Commandant,
Assistant Commandant, and STO that the class started not earlier
than scheduled.
Meantime, on February 4, 2014, the OIC of the HC forwarded the
Formal Investigation Report to the Staff Judge Advocate (SJA) for
review. The next day, the SJA found the report to be legally in
order.
On February 8, 2014, Colonel Rozzano D. Briguez (Col. Briguez),
the Commandant of Cadets, affirmed the HC findings and
recommended to Vice Admiral Edgar Abogado, then PMA
Superintendent, the separation from the PMA of Cadet lCL Cudia
for violation of the First Tenet of the Honor Code (Lying, pursuant
to Sec. VII.12.b of the CCAFPR S-2008). On the same date,
Special Orders No. 26 was issued by the PMA Headquarters
placing Cadet 1 CL Cudia on indefinite leave of absence without
pay and allowances effective February 10, 2014 pending approval
of his separation by the AFPGHQ, barring him from future
appointment and/or admission as cadet, and not permitting him to
qualify for any entrance requirements to the PMA. 33
Two days later, Vice Admiral Abogado approved the
recommendation to dismiss Cadet 1 CL Cudia.
On February 13, 2014, Cadet lCL Cudia submitted a letter to the
Office of the Commandant of Cadets requesting for reinstatement
by the PMA of his status as a cadet.34
Four days passed, Annavee P. Cudia (Annavee ), the sister of
Cadet 1 CL Cudia, posted his plight in her Face book account. The
day after, the Spouses Cudia gave a letter to Major General Oscar
Lopez (Maj. Gen. Lopez), the new PMA Superintendent, asking to
recognize the 8-1 voting of the HC.35 Copies of which were
furnished to the AFP Chief of Staff and other concerned military
officials. Subsequently, Maj. Gen. Lopez was directed to review
Cadet lCL Cudia's case. The latter, in turn, referred the matter to
the Cadet Review and Appeals Board (CRAB).
On February 19, 2014, Cadet lCL Cudia made his personal appeal
letter to Maj. Gen. Lopez. On even date, the AFP Chief of Staff
ordered a reinvestigation following the viral Facebook post of
Annavee demanding the intervention of the military leadership.
Petitioners claim that, on February 21, 2014, Special Order No. 1
was issued directing all PMA cadets to ostracize Cadet 1 CL Cudia
by not talking to him and by separating him from all
activities/functions of the cadets. It is said that any violation shall
be a "Class 1" offense entailing 45 demerits, 90 hours touring,
and 90 hours confinement. Cadet 1 CL Cudia was not given a copy
of the order and learned about it only from the media.36 According
to an alleged news report, PMA Spokesperson Major Agnes
Lynette Flores (Maj. Flores) confirmed the HC order to ostracize
Cadet 1 CL Cudia. Among his offenses were: breach of
confidentiality by putting documents in the social media, violation
of the PMA Honor Code, lack of initiative to resign, and smearing
the name of the PMA.37
On February 24, 2014, Cadet 1CL Cudia requested the CRAB for
additional time, until March 4, 2014, to file an appeal on the
ground that his intended witnesses are in on-the-job training (
OJT).38 As additional evidence to support his appeal, he also
requested for copies of the Minutes of the HC proceedings,
relevant documents pertaining to the case, and video footages
and recordings of the HC hearings.
The next day, Cadet 1 CL Cudia and his family engaged the
services of the Public Attorney's Office (PAO) in Baguio City.
The CRAB conducted a review of the case based on the following:
(a) letter of appeal of the Spouses Cudia dated February 18,
2014; (b) directive from the AFP-GHQ to reinvestigate the case;
and ( c) guidance from Maj. Gen. Lopez.
On February 26, 2014, Brigadier General Andre M. Costales, Jr.
(Brig. Gen. Costales, Jr.), the CRAB Chairman, informed Cadet lCL
Cudia that, pending approval of the latter's request for extension,
the CRAB would continue to review the case and submit its
recommendations based on whatever evidence and testimonies
received, and that it could not favorably consider his request for
copies of the HC minutes, relevant documents, and video footages
and recordings of the HC hearings since it was neither the
appropriate nor the authorized body to take action
thereon.39 Subsequently, upon verbal advice, Cadet 1 CL Cudia
wrote a letter to Maj. Gen. Lopez reiterating his request.40
Two days after, the Spouses Cudia filed a letter-complaint before
the CHR-Cordillera Administrative Region (CAR) Office against the
HC members and Maj. Gracilla for alleged violation of the human
rights of Cadet lCL Cudia, particularly his rights to due process,
education, and privacy of communication.41
On March 4, 2014, Cadet 1 CL Cudia, through the PAO, moved for
additional time, until March 19, 2014, to file his appeal and submit
evidence. PAO also wrote a letter to AFP Chief of Staff General
Emmanuel T. Bautista (Gen. Bautista) seeking for immediate
directive to the PMA to expeditiously and favorably act on Cadet
1CL Cudia's requests.42
Exactly a week prior to the commencement exercises of Siklab
Diwa Class, the following events transpired:
On March 10, 2014, Annavee sought the assistance of PAO Chief
Public Attorney Persida V. Rueda-Acosta.43 On the other hand, the
CRAB submitted a report to the AFP-GHQ upholding the dismissal
of Cadet 1 CL Cudia.44
On March 11, 2014, PAO received a letter from Maj. Gen. Lopez
stating the denial of Cadet 1CL Cudia's requests for extension of
time to file an Appeal Memorandum in view of the ample time
already given, and to be furnished with a copy of relevant
documents because of confidentiality and presumption of
regularity of the HC proceedings.45 Cadet 1CL Cudia, through PAO,
then filed an Appeal Memorandum46 before the CRAB.
On March 12, 2014, Spouses Cudia wrote a letter to President
Benigno Simeon C. Aquino III (Pres. Aquino), who is the
Commander-in-Chief of the AFP, attaching thereto the Appeal
Memorandum.47 On the same day, Special Orders No. 48 was
issued by the PMA constituting a Fact-Finding Board/Investigation
Body composed of the CRAB members and PMA senior officers to
conduct a deliberate investigation pertaining to Cadet 1CL Cudia's
Appeal Memorandum.48 The focus of the inquiry was not just to
find out whether the appeal has merit or may be considered but
also to investigate possible involvement of other cadets and
members of the command related to the incident and to establish
specific violation of policy or regulations that had been violated by
other cadets and members of the HC.49
On March 13, 2014, the Cudia family and the Chief Public Attorney
had a dialogue with Maj. Gen. Lopez. On March 14, 2014, the
CHR-CAR came out with its preliminary findings, which
recommended the following:
a. For the PMA and the Honor Committee to respect and
uphold the 8 Guilty - 1 Not guilty vote;
b. For the PMA and the Honor Committee to officially
pronounce Cdt Cudia as Not Guilty of the charge filed
against him before the Honor Committee;
c. For the PMA to restore Cadet Cudia's rights and
entitlements as a full-fledge graduating cadet and allow
him to graduate on Sunday, 16 March 2014;
d. For the PMA to fully cooperate with the CHR in the
investigation of Cudia's Case.50
On March 15, 2014, Cadet 1CL Cudia and his family had a meeting
with Pres. Aquino and Department of National Defense (DND)
Secretary Voltaire T. Gazmin. The President recommended that
they put in writing their appeal, requests, and other concerns.
According to respondents, the parties agreed that Cadet 1 CL
Cudia would not join the graduation but it was without prejudice
to the result of the appeal, which was elevated to the AFP Chief of
Staff. The President then tasked Gen. Bautista to handle the
reinvestigation of the case, with Maj. Gen. Oscar Lopez
supervising the group conducting the review.
Four days after Siklab Diwa Class' graduation day, petitioner
Renato S. Cudia received a letter dated March 11, 2014 from the
Office of the AFP Adjutant General and signed by Brig. Gen.
Ronald N. Albano for the AFP Chief of Staff, affirming the CRAB' s
denial of Cadet 1 CL Cudia' s appeal. It held:
After review, The Judge Advocate General, APP finds that the
action of the PMA CRAB in denying the appeal for reinvestigation
is legally in order. There was enough evidence to sustain the
finding of guilt and the proprietary (sic) of the punishment
imposed. Also, your son was afforded sufficient time to file his
appeal from the date he was informed of the final verdict on
January 21, 2014, when the decision of the Honor Committee was
read to him in person, until the time the PMA CRAB conducted its
review on the case. Moreover, the continued stay of your son at
the Academy was voluntary. As such, he remained subject to the
Academy's policy regarding visitation. Further, there was no
violation of his right to due process considering that the procedure
undertaken by the Honor Committee and PMA CRAB was
consistent with existing policy. Thus, the previous finding and
recommendation of the Honor Committee finding your son,
subject Cadet guilty of "Lying" and recommending his separation
from the Academy is sustained.
In view of the foregoing, this Headquarters resolved to deny your
appeal for lack of merit.51 Thereafter, the Fact-Finding
Board/Investigating Body issued its Final Investigation Report on
March 23, 2014 denying Cadet 1 CL Cudia's
appeal.52 Subsequently, on April 28, 2014, the special
investigation board tasked to probe the case submitted its final
report to the President.53 Pursuant to the administrative appeals
process, the DND issued a Memorandum dated May 23, 2014,
directing the Office of AFP Chief of Staff to submit the complete
records of the case for purposes of DND review and
recommendation for disposition by the President.54
Meanwhile, on May 22, 2014, the CHR-CAR issued its Resolution
with respect to CHR-CAR Case No. 2014-0029, concluding and
recommending as follows:
WHEREFORE, PREMISES CONSIDERED, the Commission on
Human Rights-CAR Office finds PROBABLE CAUSE FOR HUMAN
RIGHTS VIOLATIONS against the officers and members of the PMA
Honor Committee and .. certain PMA officials, specifically for
violations of the rights of CADET ALDRIN JEFF P. CUDIA to dignity,
due process, education, privacy/privacy of communication, and
good life.
IN VIEW OF THE FOREGOING, the CHR-CAR Office RESOLVED to
indorse to competent authorities for their immediate appropriate
action on the following recommendations:
1. The Philippine Military Academy must set aside
the "9-Guilty, 0-Not Guilty" verdict against Cadet
Aldrin Jeff P. Cudia, for being null and void; to
uphold and respect the "8-Guilty, 1-Not Guilty"
voting result and make an official pronouncement of
NOT GUILTY in favor of Cadet Cudia;
2. The PMA, the AFP Chief of Staff, and the President
in whose hands rest the ends of justice and fate of
Cadet Cudia, to:
3.3 Cdt 2CL ARWI C. MARTINEZ
3.4 Cdt 2CL RENATO A. CARINO, JR.
3.5 Cdt 2CL NIKOANGELOC. TARAYAO
3.6 Cdt lCL JEANEL YN P. CABRIDO, now 2nd
Lt. of the AFP

2.1 officially proclaim Cadet Cudia a graduate 3.7 Cdt lCL KIM ADRIAN R. MARTAL, now 2nd
and alumnus of the Philippine Military Lt. of the AFP
Academy;
3.8 Cdt lCL JAIRUS 0. FANTIN, now 2nd Lt. of
2.2 issue to Cadet Cudia the corresponding the AFP
Diploma for the degree of Bachelors of
Science; and 3.9 Cdt lCL BRYAN SONNY S. ARLEGUI, now
2nd Lt. of the AFP
2.3 Issue to Cadet Cudia the corresponding
official transcript 'of his academic records for 3.10 Cdt lCL DALTON JOHN G. LAGURA, now
his BS degree, without conditions therein as 2nd Lt. of the AFP
to his status as a PMA cadet.
3.11 Cdt 1 CL BIANCHIHEIMER L. EDRA, now
3. The Public Attorneys' Office to provide legal 2nd Lt. of the AFP
services to Cadet Cudia in pursuing administrative,
criminal and civil suits against the officers and 3.12 Cdt 4CL JENNIFER A. CUARTERON
members of the Honor Committee named hereunder, (recorder)
for violation of the Honor Code and System and the
Procedure in Formal Investigation, dishonesty,
3.13 Cdt 3CL LEONCIO NICO A. DE JESUS II
violation of the secrecy of the ballot, tampering the
(record)
true result of the voting, perjury, intentional
omission in the Minutes of substantive part of the
4. The Office of the AFP Chief of Staff and the PMA
formal trial proceedings which are prejudicial to the
competent authorities should investigate and file
interest of justice and Cadet Cudia's fundamental
appropriate charges against Maj. VLADIMIR P.
rights to dignity, non-discrimination and due
GRACILLA, for violation of the right to privacy of
process, which led to the infringement of his right to
education and even transgressing his right to a good Cadet Cudia and/or failure, as intelligence officer, to
life. ensure the protection of the right to privacy of Cudia
who was then billeted at the PMA Holding Center;
3.1 Cdt lCL MIKE ANTHONY MOGUL, now 2nd
5. The Office of the AFP Chief of Staff and PMA
Lt. of the AFP
competent authorities should investigate Maj.
DENNIS ROMMEL HINDANG for his failure and
3.2 Cdt lCL RHONA K. SALVACION, now 2nd
ineptness to exercise his responsibility as a
Lt. of the AFP
competent Tactical Officer and a good father of his
 cadets, in this case, to Cadet Cudia; for failure to
respect exhaustion of administrative remedies;
6. The Secretary of National Defense, the Chief of
Staff of the Armed Forces of the Philppines, the PMA
Superintendent, to immediately cause the
comprehensive review of all rules of procedures,
regulations, policies, including the so-called practices
in the implementation of the Honor Code; and,
thereafter, adopt new policies, rules of procedures
and relevant regulations which are human-rights
based and consistent with the Constitution and other
applicable laws;
7. The Congress of the Philippines to consider the
enactment of a law defining and penalizing ostracism
and discrimination, which is apparently being
practiced in the PMA, as a criminal offense in this
jurisdiction;
8. His Excellency The President of the Philippines to
certify as priority, the passage of an anti-ostracism
and/or anti-discrimination law; and
9. Finally, for the AFP Chief of Staff and the PMA
authorities to ensure respect and protection of the
rights of those who testified for the cause of justice
and truth as well as human rights of Cadet Cudia.
RESOLVED FURTHER, to monitor the actions by the competent
authorities on the foregoing CHR recommendations.
Let copy of this resolution be served by personal service or by
substituted service to the complainants (the spouses Renato and
Filipina Cudia; and Aldrin Jeff P. Cudia), and all the respondents.
Also, to the PMA Superintendent, the AFP Chief of Staff, the
Secretary of National Defense, His Excellency The President of the
Philippines, The Public Attorneys' Office.
SO RESOLVED.55
On June 11, 2014, the Office of the President sustained the
findings of the AFP Chief of Staff and the CRAB. The letter, which
was addressed to the Spouses Cudia and signed by Executive
Secretary Paquito N. Ochoa, Jr., stated in whole:
This refers to your letters to the President dated 12 March 2014
and 26 March 2014 appealing for a reconsideration of the decision
of the Philippine Military Academy (PMA) Honor Committee on the
case of your son, Cadet 1 CL Aldrin Jeff Cudia.
After carefully studying the records of the case of Cadet Cudia, the
decision of the Chief of Staff of the Armed Forces of the
Philippines (AFP), and the Honor Code System of the AFP Cadet
Corps, this Office has found no substantial basis to disturb the
findings of the AFP and the PMA Cadet Review Appeals Board
(CRAB). There is no competent evidence to support the claim that
the decision of the Honor Committee members was initially at 8
"Guilty" votes and 1 "Not Guilty" vote. The lone affidavit of an
officer, based on his purported conversation with one Honor
Committee member, lacks personal knowledge on the
deliberations of the said Committee and is hearsay at best.
Similarly, the initial recommendations of the Commission on
Human Rights cannot be adopted as basis that Cadet Cudia's due
process rights were violated. Apart from being explicitly
preliminary in nature, such recommendations are anchored on a
finding that there was an 8-1 vote which, as discussed above, is
not supported by competent evidence.
In the evaluation of Cadet Cudia's case, this Office has been
guided by the precept that military law is regarded to be in a class
of its own, "applicable only to military personnel because the
military constitutes an armed organization requiring a system of
discipline separate from that of civilians" (Gonzales v. Abaya, G.R.
No. 164007, 10 August 2005 citing Calley v. Callaway, 519 F. 2d
184 [1975] and Orloff v. Willoughby, 345 US 83 [1953]). Thus,
this Office regarded the findings of the AFP Chief, particularly his
conclusion that there was nothing irregular in the proceedings that
ensued, as carrying great weight.
Accordingly, please be informed that the President has sustained
the findings of the AFP Chief and the PMA CRAB.56
The Issues
To petitioners, the issues for resolution are:
I.
WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR
COMMITTEE AND THE CADET REVIEW AND APPEALS BOARD
COMMITTED GRAVE ABUSE OF DISCRETION IN DISMISSING
CADET FIRST CLASS ALDRIN JEFF P. CUDIA FROM THE ACADEMY
IN UTTER DISREGARD OF HIS RIGHT TO DUE PROCESS
CONSIDERING THAT:
A. Despite repeated requests for relevant documents
regarding his case, Cadet First Class Aldrin Jeff Cudia was
deprived of his right to have access to evidence which
would have proven his defense, would have totally belied
the charge against him, and more importantly, would have
shown the irregularity in the Honor Committee's hearing
and rendition of decision
B. Cadet First Class Aldrin Jeff Cudia was vaguely informed
of the decisions arrived at by the Honor Committee, the
Cadet Review and Appeals Board and the Philippine Military
Academy
C. The Honor Committee, the Cadet Review and Appeals
Board and the Philippine Military Academy have afforded
Cadet First Class Aldrin Jeff Cudia nothing but a sham trial
D. The Honor Committee, the Cadet Review and Appeals
Board and the Philippine Military Academy violated their
own rules and principles as embodied in the Honor Code
E. The Honor Committee, the Cadet Review and Appeals
Board and the Philippine Military Academy, in deciding
Cadet First Class Aldrin Jeff Cudia's case, grossly and in bad
faith, misapplied the Honor Code so as to defy the 1987
Constitution, notwithstanding the unquestionable fact that
the former should yield to the latter.
II
WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR
COMMITTEE AND THE CADET REVIEW AND APPEALS BOARD
COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT
CADET FIRST CLASS ALDRIN JEFF P. CUDIA LIED, THEREBY
VIOLATING THE HONOR CODE
III
WHETHER THE RESULT OF THE FACT-FINDING INVESTIGATION
INDEPENDENTLY CONDUCTED BY THE COMMISSION ON HUMAN
RIGHTS IS OF SUCH GREAT WEIGHT AND PERSUASIVE NATURE
THAT THIS HONORABLE COURT MAY HONOR, UPHOLD AND
RESPECT57
On the other hand, in support of their prayer to dismiss the
petition, respondents presented the issues below:
PROCEDURAL GROUNDS
I.
THE MANDAMUS PETITION PRAYING THAT CADET CUDIA BE
INCLUDED IN THE LIST OF GRADUATES OF SIKLAB DIWA CLASS
OF 2014 AND BE ALLOWED TO TAKE PART IN THE
COMMENCEMENT EXERCISES HAS ALREADY BEEN RENDERED
MOOT.
II.
THE ISSUES RAISED IN THE PETITIONS ARE ACTUALLY FACTUAL
WHICH ARE BEYOND THE SCOPE OF A PETITION FOR
CERTIORARI, PROHIBITION AND MANDAMUS.
III.
MANDAMUS DOES NOT LIE TO COMPEL RESPONDENTS TO GRANT
THE RELIEFS PRAYED FOR. IV. IT IS PREMATURE TO INVOKE
JUDICIAL REDRESS PENDING THE DECISION OF THE PRESIDENT
ON CADET CUDIA'S APPEAL.
V.
WITH UTMOST DUE RESPECT, THE HONORABLE COURT MUST
EXERCISE CAREFUL RESTRAINT AND REFRAIN FROM UNDULY OR
PREMATURELY INTERFERING WITH LEGITIMATE MILITARY
MATTERS.
SUBSTANTIVE GROUNDS
VI.
CADET CUDIA HAS NECESSARILY AND VOLUNTARILY
RELINQUISHED CERTAIN CIVIL LIBERTIES BY VIRTUE OF HIS
ENTRY INTO THE PMA.
VII.
THE PMA ENJOYS THE ACADEMIC FREEDOM WHICH AUTHORIZES
IT TO IMPOSE DISCIPLINARY MEASURES AND PUNISHMENT AS IT
DEEMS FIT AND CONSISTENT WITH THE PECULIAR NEEDS OF
THE ACADEMY.
VIII.
CADET CUDIA WAS PROPERLY AFFORDED PROCEDURAL DUE
PROCESS.
The PMA has regulatory authority to administratively terminate
cadets despite the absence of statutory authority.
Violation of the Honor Code warrants the administrative dismissal
of a guilty cadet.
Cadet Cudia violated the first tenet of the Honor Code by
providing untruthful statements in the explanation for his
tardiness.
The higher authorities of the PMA did not blindly adopt the
findings of the Honor Committee.
The procedural safeguards in a student disciplinary case were
properly accorded to Cadet Cudia.
The subtle evolution in the voting process of the Honor
Committee, by incorporating executive session/chambering, was
adopted to further strengthen the voting procedure of the Honor
Committee. Cadet Lagura voluntarily changed his vote without
any pressure from the other voting members of the Honor
Committee.
Ostracism is not a sanctioned practice of the PMA.
The findings of the Commission on Human Rights are not binding
on the Honorable Court, and are, at best, recommendatory.
Cadet Cudia was not effectively deprived of his future when he
was dismissed from the PMA.58
The Ruling of the Court
PROCEDURAL GROUNDS
Propriety of a petition for mandamus
Respondents argue that the mandamus aspect of the petition
praying that Cadet 1 CL Cudia be included in the list of graduating
cadets and for him to take part in the commencement exercises
was already rendered moot and academic when the graduation
ceremonies of the PMA Siklab Diwa Class took place on March 16,
2014. Also, a petition for mandamus is improper since it does not
lie to compel the performance of a discretionary duty. Invoking
Garcia v. The Faculty Admission Committee, Loyola School of
Theology,59 respondents assert that a mandamus petition could
not be availed of to compel an academic institution to allow a
student to continue studying therein because it is merely a
privilege and not a right. In this case, there is a clear failure on
petitioners' part to establish that the PMA has the, ministerial duty
to include Cadet 1 CL Cudia in the list, much less award him with
academic honors and commission him to the Philippine Navy.
Similar to the case of University of San Agustin, Inc. v. Court of
Appeals,60 it is submitted that the PMA may rightfully exercise its
discretionary power on who may be admitted to study pursuant to
its academic freedom.
In response, petitioners contend that while the plea to allow Cadet
1 CL Cudia to participate in the PMA 2014 commencement
exercises could no longer be had, the Court may still grant the
other reliefs prayed for. They add that Garcia enunciated that a
respondent can be ordered to act in a particular manner when
there is a violation of a constitutional right, and that the certiorari
aspect of the petition must still be considered because it is within
the province of the Court to determine whether a branch of the
government or any of its officials has acted without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or
excess thereof.
We agree that a petition for mandamus is improper.
Under Section 3, Rule 65 of the Rules of Civil Procedure, a petition
for mandamus may be filed when any tribunal, corporation, board,
officer, or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an
office, trust, or station. It may also be filed when any tribunal,
corporation, board, officer, or person unlawfully excludes another
from the use and enjoyment of a right or office to which such
other is entitled.
For mandamus to lie, the act sought to be enjoined must be a
ministerial act or duty. An act is ministerial if the act should be
performed "[under] a given state of facts, in a prescribed manner,
in obedience to the mandate of a legal authority, without regard
to or the exercise of [the tribunal or corporation's] own judgment
upon the propriety or impropriety of the act done." The tribunal,
corporation, board, officer, or person must have no choice but to
perform the act specifically enjoined by law. This is opposed to a
discretionary act whereby the officer has the choice to decide how
or when to perform the duty.61
Similarly, petitioner-intervenor seeks for the following reliefs:
In this case, petitioners pray for, among others: Also, after due
notice and hearing, it is prayed of the Court to issue a Writ of
Mandamus to:
1. direct the PMA to include Cadet Cudia in the list of
graduates of Siklab Diwa Class of 2014 of the PMA,
including inclusion in the yearbook;
2. direct the PMA to allow Cadet Cudia to take part in the
commencement exercises if he completed all the
requirements for his baccalaureate degree;
3. direct the PMA to award unto Cadet Cudia the academic
honors he deserves, and the commission as a new
Philippine Navy ensign;
4. direct the Honor Committee to submit to the CRAB of the
PMA all its records of the proceedings taken against Cadet
Cudia, including the video footage and audio recordings of
the deliberations and voting, for the purpose of allowing the
CRAB to conduct intelligent review of the case of Cadet
Cudia;
5. direct the PMA's CRAB to conduct a review de nova of all
the records without requiring Cadet Cudia to submit new
evidence if it was physically impossible to do so;
6. direct the PMA's CRAB to take into account the
certification signed by Dr. Costales, the new evidence
consisting of the affidavit of a military officer declaring
under oath that the cadet who voted "not guilty" revealed
to this officer that this cadet was coerced into changing his
vote, and other new evidence if there is any;
7. direct the PMA's CRAB to give Cadet Cudia the right to a
counsel who is allowed to participate actively in the
proceedings as well as in the cross-examinations during the
exercise of the right to confront witnesses against him; and
8. direct the Honor Committee in case of remand of the
case by the CRAB to allow Cadet Cudia a representation of
a counsel.62
A. xxx
B. a Writ of Mandamus be issued commanding:
a.) The PMA, Honor Committee, and CRAB to respect
and uphold the 8 Guilty -1 Not Guilty vote;
b.) The PMA, Honor Committee, and CRAB to
officially pronounce Cadet Cudia as Not Guilty of the
charge filed against him before the Honor
Committee;
 c.) The PMA to restore Cadet Cudia's rights and
entitlements as a full-fledged graduating cadet,
including his diploma and awards.63
Anent the plea to direct the PMA to include Cadet 1 CL Cudia in
the list of graduates of Siklab Diwa Class of 2014 and to allow him
to take part in the commencement exercises, the same was
rendered moot and academic when the graduation ceremonies
pushed through on March 16, 2014 without including Cadet 1 CL
Cudia in the roll of graduates.
With respect to the prayer directing the PMA to restore Cadet 1 CL
Cudia's rights and entitlements as a full-fledged graduating cadet,
including his diploma, awards, and commission as a new Philippine
Navy ensign, the same cannot be granted in a petition for
mandamus on the basis of academic freedom, which We shall
discuss in more detail below. Suffice it to say at this point that
these matters are within the ambit of or encompassed by the right
of academic freedom; therefore, beyond the province of the Court
to decide.64 The powers to confer degrees at the PMA, grant
awards, and commission officers in the military service are
discretionary acts on the part of the President as the AFP
Commander-in-Chief. Borrowing the words of Garcia:
There are standards that must be met. There are policies to be
pursued. Discretion appears to be of the essence. In terms of
Hohfeld's terminology, what a student in the position of petitioner
possesses is a privilege rather than a right. She [in this case,
Cadet 1 CL Cudia] cannot therefore satisfy the prime and
indispensable requisite of a mandamus proceeding.65
Certainly, mandamus is never issued in doubtful cases. It cannot
be availed against an official or government agency whose duty
requires the exercise of discretion or judgment.66 For a writ to
issue, petitioners should have a clear legal right to the thing
demanded, and there should be an imperative duty on the part of
respondents to perform the act sought to be mandated.67
The same reasons can be said as regards the other reliefs being
sought by petitioners, which pertain to the HC and the CRAB
proceedings. In the absence of a clear and unmistakable provision
of a law, a mandamus petition does not lie to require anyone to a
specific course of conduct or to control or review the exercise of
discretion; it will not issue to compel an official to do anything
which is not his duty to do or which is his duty not to do or give to
the applicant anything to which he is not entitled by law.68
The foregoing notwithstanding, the resolution of the case must
proceed since, as argued by petitioners, the Court is empowered
to settle via petition for certiorari whether there is grave abuse of
discretion on the part of respondents in dismissing Cadet 1 CL
Cudia from the PMA.
Factual nature of the issues
According to respondents, the petition raises issues that actually
require the Court to make findings of fact because it sets forth
several factual disputes which include, among others: the
tardiness of Cadet 1 CL Cudia in , his ENG412 class and his
explanation thereto, the circumstances that transpired in the
investigation of his Honor Code violation, the proceedings before
the HC, and the allegation that Cadet 1 CL Lagura was forced to
change his vote during the executive session/"chambering."
In opposition, petitioners claim that the instant controversy
presents legal issues. Rather than determining which between the
two conflicting versions of the parties is true, the case allegedly
centers on the application, appreciation, and interpretation of a
person's rights to due process, to education, and to property; the
interpretation of the PMA Honor Code and Honor System; and the
conclusion on whether Cadet 1 CL Cudia's explanation constitutes
lying. Even if the instant case involves questions of fact,
petitioners still hold that the Court is empowered to settle mixed
questions of fact and law. Petitioners are correct.
There is a question of law when the issue does not call for an
examination of the probative value of evidence presented, the
truth or falsehood of facts being admitted and the doubt concerns
the correct application of law and jurisprudence on the matter. On
the other hand, there is a question of fact when the doubt or
controversy arises as to the truth or falsity of the alleged facts.
When there is no dispute as to fact, the question of whether or not
the conclusion drawn therefrom is correct is a question of
law.69 The petition does not exclusively present factual matters for
the Court to decide. As pointed out, the all-encompassing issue of
more importance is the determination of whether a PMA cadet has
rights to due process, to education, and to property in the context
of the Honor Code and the Honor System, and, if in the
affirmative, the extent or limit thereof. Notably, even respondents
themselves raise substantive grounds that We have to resolve. In
support of their contention that the Court must exercise careful
restraint and should refrain from unduly or prematurely interfering
in legitimate military matters, they argue that Cadet 1 CL Cudia
has necessarily and voluntarily relinquished certain civil liberties
by virtue of his entry into the PMA, and that the Academy enjoys
academic freedom authorizing the imposition of disciplinary
measures and punishment as it deems fit and consistent with the
peculiar needs of the PMA. These issues, aside from being purely
legal being purely legal questions, are of first impression; hence,
the Court must not hesitate to make a categorical ruling.
Exhaustion of administrative remedies
Respondents assert that the Court must decline jurisdiction over
the petition pending President Aquino’s resolution of Cadet 1 CL
Cudia' appeal. They say that there is an obvious non-exhaustion
of the full administrative process. While Cadet 1 CL Cudia
underwent the review procedures of his guilty verdict at the
Academy level - the determination by the SJA of whether the HC
acted according to the established procedures of the Honor
System, the assessment by the Commandant of Cadets of the
procedural and legal correctness of the guilty verdict, the
evaluation of the PMA Superintendent to warrant the
administrative separation of the guilty cadet, and the appellate
review proceedings before the CRAB - he still appealed to the
President, who has the utmost latitude in making decisions
affecting the military. It is contended that the President's power
over the persons and actions of the members of the armed forces
is recognized in B/Gen. (Ret.) Gudani v. Lt./Gen. Senga70 and in
Section 3171 of Commonwealth Act (CA.) No. 1 (also known as
"The National Defense Act''). As such, the President could still
overturn the decision of the PMA. In respondents' view, the filing
of this petition while the case is pending resolution of the
President is an irresponsible defiance, if not a personal affront. For
them, comity dictates that courts of justice should shy away from
a dispute until the system of administrative redress has been
completed.
From the unfolding of events, petitioners, however, consider that
President Aquino effectively denied the appeal of Cadet 1 CL
Cudia. They claim that his family exerted insurmountable efforts
to seek reconsideration of the HC recommendation from the APP
officials and the President, but was in vain. The circumstances
prior to, during, and after the PMA 2014 graduation rites, which
was attended by President Aquino after he talked to Cadet lCL
Cudia's family the night before, foreclose the possibility that the
challenged findings would still be overturned. In any case,
petitioners insist that the· rule on exhaustion of administrative
remedies is not absolute based on the Corsiga v. Defensor72 and
Verceles v. BLR-DOLE73 rulings.
We rule for petitioners.
In general, no one is entitled to judicial relief for a supposed or
threatened injury until the prescribed administrative remedy has
been exhausted. The rationale behind the doctrine of exhaustion
of administrative remedies is that "courts, for reasons of law,
comity, and convenience, should not entertain suits unless the
available administrative remedies have first been resorted to and
the proper authorities, who are competent to act upon the matter
complained of, have been given the appropriate opportunity to act
and correct their alleged errors, if any, committed in the
administrative forum."74 In the U.S. case of Ringgold v. United
States,75 which was cited by respondents, it was specifically held
that in a typical case involving a decision by military authorities,
the plaintiff must exhaust his remedies within the military before
appealing to the court, the doctrine being designed both to
preserve the balance between military and civilian authorities and
to conserve judicial resources.
Nonetheless, there are exceptions to the rule. In this jurisdiction,
a party may directly resort to judicial remedies if any of the
following is present:
1. when there is a violation of due process;
2. when the issue involved is purely a legal question;
3. when the administrative action is patently illegal
amounting to lack or excess of jurisdiction;
4. when there is estoppel on the part of the administrative
agency concerned;
5. when there is irreparable injury;
 6. when the respondent is a department secretary whose
acts as an alter ego of the President bear the implied and
assumed approval of the latter;
7. when to require exhaustion of administrative remedies
would be unreasonable;
8. when it would amount to a nullification of a claim;
9. when the subject matter is a private land in land case
proceedings;
10. when the rule does not provide a plain, speedy and
adequate remedy; and
11. when there are circumstances indicating the urgency of
judicial intervention.76
Petitioners essentially raise the lack of due process in the
dismissal of Cadet 1 CL Cudia from the PMA. Thus, it may be a
ground to give due course to the petition despite the non-
exhaustion of administrative remedies. Yet more significant is the
fact that during the pendency of this case, particularly on June 11,
2014, the Office of the President finally issued its ruling, which
sustained the findings of the AFP Chief and the CRAB. Hence, the
occurrence of this supervening event bars any objection to the
petition based on failure to exhaust administrative remedies.
Court's interference within military affairs
Respondents cite the U.S. cases of Bois v. Marsh77 and
Schlesinger v. Councilman78 to support their contention that
judicial intervention would pose substantial threat to military
discipline and that there should be a deferential review of military
statutes and regulations since political branches have particular
expertise and competence in assessing military needs. Likewise, in
Orloff v. Willoughby79 and Parker v. Levy,80 it was allegedly opined
by the U.S. Supreme Court that the military constitutes a
specialized community governed by a separate discipline from that
of the civilian. According to respondents, the U.S. courts' respect
to the military recognizes that constitutional rights may apply
differently in the military context than in civilian society as a
whole. Such military deference is exercised either by refusing to
apply due process and equal protection doctrines in military cases
or applying them but with leniency.
In respondents' view, although Philippine courts have the power of
judicial review in cases attended with grave abuse of discretion
amounting to lack or excess of jurisdiction, policy considerations
call for the widest latitude of deference to military affairs. Such
respect is exercised by the court where the issues to be resolved
entail a substantial consideration of legitimate governmental
interest. They suppose that allowing Cadet 1 CL Cudia's case to
prosper will set an institutionally dangerous precedent, opening a
Pandora's box of other challenges against the specialized system
of discipline of the PMA. They state that with the PMA's mandate
to train cadets for permanent commission in the AFP, its
disciplinary rules and procedure necessarily must impose h
different standard of conduct compared with civilian institutions.
Petitioners, on the other hand, consider that this Court is part of
the State's check-and-balance machinery, specifically mandated
by Article VIII of the 1987 Constitution to ensure that no branch
of the government or any of its officials acts without or in excess
of jurisdiction or with grave abuse of, discretion amounting to lack
or excess of jurisdiction. They assert that judicial non-interference
in military affairs is not deemed as absolute even in the U.S. They
cite Schlesinger and Parker, which were invoked by respondents,
as well as Burns v. Wilson81 and Harmon v. Brucker,82 wherein the
U.S. Supreme Court reviewed the proceedings of military tribunals
on account of issues posed concerning due process and violations
of constitutional rights. Also, in Magno v. De Villa83 decided by this
Court, petitioners note that We, in fact, exercised the judicial
power to determine whether the APP and the members of the
court martial acted with grave abuse o.f discretion in their military
investigation.
Petitioners' contentions are tenable.
Admittedly, the Constitution entrusts the political branches of the
government, not the courts, with superintendence and control
over the military because the courts generally lack the
competence and expertise necessary to evaluate military decisions
and they are ill-equipped to determine the impact upon discipline
that any particular intrusion upon military authority might
have.84 Nevertheless, for the sake of brevity, We rule that the
facts as well as the legal issues in the U.S. cases cited by
respondents are not on all fours with the case of Cadet 1 CL
Cudia. Instead, what applies is the 1975 U.S. case of Andrews v.
Knowlton,85 which similarly involved cadets who were separated
from the United States Military Academy due to Honor Code
violations. Following Wasson v. Trowbridge86 and Hagopian v.
Knowlton,87 Andrews re-affirmed the power of the district courts
to review procedures used at the service academies in the
separation or dismissal of cadets and midshipmen. While it
recognized the "constitutional permissibility of the military to set
and enforce uncommonly high standards of conduct and ethics," it
said that the courts "have expanded at an accelerated pace the
scope of judicial access for review of military determinations."
Later, in Kolesa v. Lehman,88 it was opined that it has been well
settled that federal courts have jurisdiction "where there is a
substantial claim that prescribed military procedures violates one's
constitutional rights." By 1983, the U.S. Congress eventually
made major revisions to the Uniform Code of Military Justice
(UCMJ) by expressly providing, among others; for a direct review
by the U.S. Supreme Court of decisions by the military's highest
appellate authority.89
Even without referring to U.S. cases, the position of petitioners is
still formidable. In this jurisdiction, Section 1 Article VIII of the
1987 Constitution expanded the scope of judicial power by
mandating that the duty of the courts of justice includes not only
"to settle actual controversies involving rights which are legally
demandable and enforceable" but also "to determine whether or
not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or
instrumentality of the Government" even if the latter does not
exercise judicial, quasi-judicial or ministerial functions.90 Grave
abuse of discretion implies such capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction or where the
power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, which must be so patent and gross
as to amount to an evasion of positive duty or to a virtual refusal
to perform the duty enjoined or to act at all in contemplation of
law.91
The proceedings of the Cadet Honor Committee can, for purposes
of the Due Process Clause, be considered a governmental activity.
As ruled in Andrews:
The relationship between the Cadet Honor Committee and the
separation process at the Academy has been sufficiently
formalized, and is sufficiently interdependent, so as to bring that
committee's activities within the definition of governmental
activity for the purposes of our review. While the Academy has
long had the informal practice of referring all alleged violations to
the Cadet Honor Committee, the relationship between that
committee and the separation process has to a degree been
formalized. x x x
Regardless of whether the relationship be deemed formal or
informal, the Honor Committee under its own procedures provides
that a single "not guilty" vote by a member ends the matter, while
a "guilty" finding confronts a cadet with the hard choice of either
resigning or electing to go before a Board of Officers. An adverse
finding there results not only in formal separation from the
Academy but also in a damaging record that will follow the cadet
through life. Accordingly, we conclude that the Cadet Honor
Committee, acting not unlike a grand jury, is clearly part of the
process whereby a cadet can ultimately be adjudged to have
violated the Cadet Honor Code and be separated from the
Academy. Therefore, the effect of the committee's procedures and
determinations on the separation process is sufficiently
intertwined with the formal governmental activity which may
follow as to bring it properly under judicial review92
No one is above the law, including the military. In fact, the
present Constitution declares it as a matter of principle that
civilian authority is, at all times, supreme over the
military.93 Consistent with the republican system of checks and
balances, the Court has been entrusted, expressly or by necessary
implication, with both the duty and the obligation of determining,
in appropriate cases, the validity of any assailed legislative or
executive action.94
SUBSTANTIVE GROUNDS
Cadet's relinquishment of certain civil liberties
Respondents assert that the standard of rights applicable to a
cadet is not the same as that of a civilian because the former' s
rights have already been recalibrated to best serve the military
purpose and necessity. They claim that both Gudani and Lt. Col.
Kapunan, Jr. v. Gen. De Villa95 recognized that, to a certain
degree, individual rights of persons in the military service may be
curtailed by the rules of military discipline in order to ensure its
effectiveness in fulfilling the duties required to be discharged
under the law. Respondents remind that, as a military student
aspiring to a commissioned post in the military service, Cadet 1 CL
Cudia voluntarily gave up certain civil and political rights which
the rest of the civilian population enjoys. The deliberate surrender
of certain freedoms on his part is embodied in the cadets' Honor
Code Handbook. It is noted that at the beginning of their
academic life in the PMA, Cadet 1 CL Cudia, along with the rest of
Cadet Corps, took an oath and undertaking to stand by the Honor
Code and the Honor System.
To say that a PMA cadet surrenders his fundamental human
rights, including the right to due process, is, for petitioners,
contrary to the provisions of Section 3, Article II of the 1987
Constitution,96 Executive Order (E.O.) No. 17897 (as amended by
E.O. No. 100598), AFP Code of Ethics, Oath of Cadet Corps to the
Honor Code and the Honor System, military professionalism, and,
in general, military culture. They maintain that the HC, the CRAB,
and the PMA, grossly and in bad faith misapplied the Honor Code
and the Honor System in deciding Cadet lCL Cudia's case
considering that these should not be implemented at the expense
of human rights, due process, and fair play. Further, under the
doctrine of constitutional supremacy, they can never overpower or
defy the 1987 Constitution since the former should yield to the
latter. Petitioners stress that the statement that "a cadet can be
compelled to surrender some civil rights and liberties in order for
the Code and System to be implemented" simply pertains to what
cadets have to sacrifice in order to prove that they are men or
women of integrity and honor, such as the right to entertain vices
and the right to freely choose what they want to say or do. In the
context of disciplinary investigation, it does not contemplate a
surrender of the right to due process but, at most, refers to the
cadets' rights to privacy and to remain silent.
We concur with the stand of petitioners.
Of course, a student at a military academy must be prepared to
subordinate his private interests for the proper functioning of the
educational institution he attends to, one that is with a greater
degree than a student at a civilian public school.99 In fact, the
Honor Code and Honor System Handbook of the PMA expresses
that, "[as] a training environment, the Cadet Corps is a society
which has its own norms. Each member binds himself to what is
good for him, his subordinates, and his peers. To be part of the
Cadet Corps requires the surrender of some basic rights and
liberties for the good of the group."100
It is clear, however, from the teachings of Wasson and Hagopian,
which were adopted by Andrews, that a cadet facing dismissal
from the military academy for misconduct has constitutionally
protected private interests (life, liberty, or property); hence,
disciplinary proceedings conducted within the bounds of
procedural due process is a must.101 For that reason, the PMA is
not immune from the strictures of due process. Where a person's
good name, reputation, honor, or integrity is at stake because of
what the government is doing to him, the minimal requirements of
the due process clause must be satisfied.102 Likewise, the cadet
faces far more severe sanctions of being expelled from a course of
college instruction which he or she has pursued with a view to
becoming a career officer and of probably
being forever denied that career.103
The cases of Gudani and Kapunan, Jr. are inapplicable as they do
not specifically pertain to dismissal proceedings of a cadet in a
military academy due to honor violation. In Gudani, the Court
denied the petition that sought to annul the directive from then
President Gloria Macapagal-Arroyo, which' enjoined petitioners
from testifying before the Congress without her consent. We ruled
that petitioners may be subjected to military discipline for their
defiance of a direct order of the AFP Chief of Staff. On the other
hand, in Kapunan, Jr., this Court upheld the restriction imposed
on petitioner since the conditions for his "house arrest"
(particularly, that he may not issue any press statements or give
any press conference during the period of his detention) are
justified by the requirements of military discipline. In these two
cases, the constitutional rights to information, transparency in
matters of public concern, and to free speech - not to due process
clause - were restricted to better serve the greater military
purpose. Academic freedom of the PMA
Petitioners posit that there is no law providing that a guilty finding
by the HC may be used by the PMA to dismiss or recommend the
dismissal of a cadet from the PMA. They argue that Honor Code
violation is not among those listed as justifications for the attrition
of cadets considering that the Honor Code and the Honor System
do not state that a guilty cadet is automatically terminated or
dismissed from service. To them, the Honor Code and Honor
System are "gentleman's agreement" that cannot take precedence
over public interest - in the defense of the nation and in view of
the taxpayer's money spent for each cadet. Petitioners contend
that, based on the Civil Code, all written or verbal agreements are
null and void if they violate the law, good morals, good customs,
public policy, and public safety.
In opposition, respondents claim that the PMA may impose
disciplinary measures and punishment as it deems fit and
consistent with the peculiar needs of the Academy. Even without
express provision of a law, the PMA has regulatory authority to
administratively dismiss erring cadets since it is deemed
reasonably written into C.A. No. 1. Moreover, although said law
grants to the President the authority of terminating a cadet's
appointment, such power may be delegated to the PMA
Superintendent, who may exercise direct supervision and control
over the cadets.
Respondents likewise contend that, as an academic institution, the
PMA has the inherent right to promulgate reasonable norms, rules
and regulations that it may deem necessary for the maintenance
of school discipline, which is specifically mandated by Section 3
(2),104 Article XIV of the 1987 Constitution. As the premiere
military educational institution of the AFP in accordance with
Section 30,105 Article III of C.A. No. 1 and Sections 58 and
59,106 Chapter 9, Subtitle II, Title VIII, Book IV of E.O. No. 292
("Administrative Code of 1987"), the PMA is an institution that
enjoys academic freedom guaranteed by Section 5 (2),107 Article
XIV of the 1987 Constitution. In Miriam College Foundation, Inc.
v. Court of Appeals,108 it was held that concomitant with such
freedom is the right and duty to instill and impose discipline upon
its students. Also, consistent with lsabelo, Jr. v. Perpetual Help
College of Rizal, Inc.109 and Ateneo de Manila University v.
Capulong,110 the PMA has the freedom on who to admit (and,
conversely, to expel) given the high degree of discipline and honor
expected from its students who are to form part of the AFP.
For respondents, Cadet 1 CL Cudia cannot, therefore, belatedly
assail the Honor Code as basis of the HC' s decision to recommend
his dismissal from the PMA. When he enlisted for enrolment and
studied in the PMA for four years, he knew or should have been
fully aware of the standards of discipline imposed on all cadets
and the corresponding penalty for failing to abide by these
standards.
In their Reply, petitioners counter that, as shown in lsabelo, Jr.
and Ateneo, academic freedom is not absolute and cannot be
exercised in blatant disregard of the right to due process and the
1987 Constitution. Although schools have the prerogative to
choose what to teach, how to teach, and who to teach, the same
does not go so far as to deprive a student of the right to graduate
when there is clear evidence that he is entitled to the same since,
in such a case, the right to graduate becomes a vested right which
takes precedence over the limited and restricted right of the
educational institution.
While both parties have valid points to consider, the arguments of
respondents are more in line with the facts of this case. We have
ruled that the school-student relationship is contractual in nature.
Once admitted, a student's enrolment is not only semestral in
duration but for the entire period he or she is expected to
complete it.111 An institution of learning has an obligation to afford
its students a fair opportunity to complete the course they seek to
pursue.112 Such contract is imbued with public interest because of
the high priority given by the Constitution to education and the
grant to the State of supervisory and regulatory powers over a
educational institutions.113
The school-student relationship has also been held as reciprocal.
"[It] has consequences appurtenant to and inherent in all
contracts of such kind -it gives rise to bilateral or reciprocal rights
and obligations. The school undertakes to provide students with
education sufficient to enable them to pursue higher education or
a profession. On the other hand, the students agree to abide by
the academic requirements of the school and to observe its rules
and regulations."114
Academic freedom or, to be precise, the institutional autonomy of
universities and institutions of higher learning,115 has been
enshrined in our Constitutions of 1935, 1973, and 1987.116 In
Garcia, this Court espoused the concurring opinion of U.S.
Supreme Court Justice Felix Frankfurter in Sweezy v. New
Hampshire,117 which enumerated "the four essential freedoms" of
a university: To determine for itself on academic grounds (1) who
may teach, (2) what may be taught, (3) how it shall be taught,
and (4) who may be admitted to study.118 An educational
institution has the power to adopt and enforce such rules as may
be deemed expedient for its government, this being incident to
the very object of incorporation, and indispensable to the
successful management of the college.119 It can decide for itself its
aims and objectives and how best to attain them, free from
outside coercion or interference except when there is an
overriding public welfare which would call for some
restraint.120 Indeed, "academic freedom has never been meant to
be an unabridged license. It is a privilege that assumes a
correlative duty to exercise it responsibly. An equally telling
precept is a long recognized mandate, so well expressed in Article
19 of the Civil Code, that every 'person must, in the exercise of
his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith."'121
The schools' power to instill discipline in their students is
subsumed in their academic freedom and that "the establishment
of rules governing university-student relations, particularly those
pertaining to student discipline, may be regarded as vital, not
merely to the smooth and efficient operation of the institution, but
to its very survival."122 As a Bohemian proverb puts it: "A school
without discipline is like a mill without water." Insofar as the water
turns the mill, so does the school's disciplinary power assure its
right to survive and continue operating.123 In this regard, the
Court has always recognized the right of schools to impose
disciplinary sanctions, which includes the power to dismiss or
expel, on students who violate disciplinary rules.124 In Miriam
College Foundation, Inc. v. Court of Appeals,125 this Court
elucidated:
The right of the school to discipline its students is at once
apparent in the third freedom, i.e., "how it shall be taught." A
school certainly cannot function in an atmosphere of anarchy.
Thus, there can be no doubt that the establishment of an
educational institution requires rules and regulations necessary for
the maintenance of an orderly educational program and the
creation of an educational environment conducive to learning.
Such rules and regulations are equally necessary for the
protection of the students, faculty, and property.
Moreover, the school has an interest in teaching the student
discipline, a necessary, if not indispensable, value in any field of
learning. By instilling discipline, the school teaches discipline.
Accordingly, the right to discipline the student likewise finds basis
in the freedom "what to teach." Incidentally, the school not only
has the right but the duty to develop discipline in its students. The
Constitution no less imposes such duty.
[All educational institutions] shall inculcate patriotism and
nationalism, foster love of humanity, respect for human rights,
appreciation of the role of national heroes in the historical
development of the country, teach the rights and duties of
citizenship, strengthen ethical and spiritual values, develop moral
character and personal discipline, encourage critical and creative
thinking, broaden scientific and technological knowledge, and
promote vocational efficiency.
In Angeles vs. Sison, we also said that discipline was a means for
the school to carry out its responsibility to help its students "grow
and develop into mature, responsible, effective and worthy
citizens of the community."
Finally, nowhere in the above formulation is the right to discipline
more evident than in "who may be admitted to study." If a school
has the freedom to determine whom to admit, logic dictates that it
also has the right to determine whom to exclude or expel, as well
as upon whom to impose lesser sanctions such as suspension and
the withholding of graduation privileges.126
The power of the school to impose disciplinary measures extends
even after graduation for any act done by the student prior
thereto. In University of the Phils. Board of Regents v. Court of
Appeals,127 We upheld the university's withdrawal of a doctorate
degree already conferred on a student who was found to have
committed intellectual dishonesty in her dissertation. Thus:
Art. XIV, §5 (2) of the Constitution provides that "[a]cademic
freedom shall be enjoyed in all institutions of higher learning."
This is nothing new. The 1935 Constitution and the 1973
Constitution likewise provided for the academic freedom or, more
precisely, for the institutional autonomy of universities and
institutions of higher learning. As pointed out by this Court in
Garcia v. Faculty Admission Committee, Loyola School of
Theology, it is a freedom granted to "institutions of higher
learning" which is thus given "a wide sphere of authority certainly
extending to the choice of students." If such institution of higher
learning can decide who can and who cannot study in it, it
certainly can also determine on whom it can confer the honor and
distinction of being its graduates.
Where it is shown that the conferment of an honor or distinction
was obtained through fraud, a university has the right to revoke
or withdraw the honor or distinction it has thus conferred. This
freedom of a university does not terminate upon the "graduation"
of a student, .as the Court of Appeals held. For it is precisely the
"graduation" of such a student that is in question. It is noteworthy
that the investigation of private respondent's case began before
her graduation. If she was able to join the graduation ceremonies
on April 24, 1993, it was because of too many investigations
conducted before the Board of Regents finally decided she should
not have been allowed to graduate.
Wide indeed is the sphere of autonomy granted to institutions of
higher learning, for the constitutional grant of academic freedom,
to quote again from Garcia v. Faculty Admission Committee,
Loyola School of Theology, "is not to be construed in a niggardly
manner or in a grudging fashion."
Under the U.P. Charter, the Board of Regents is the highest
governing body of the University of the Philippines. It has the
power to confer degrees upon the recommendation of the
University Council. It follows that if the conferment of a degree is
founded on error or fraud, the Board of Regents is also
empowered, subject to the observance of due process, to
withdraw what it has granted without violating a student's rights.
An institution of higher learning cannot be powerless if it discovers
that an academic degree it has conferred is not rightfully
deserved. Nothing can be more objectionable than bestowing a
university's highest academic degree upon an individual who has
obtained the same through fraud or deceit. The pursuit of
academic excellence is the university's concern. It should be
empowered, as an act of self-defense, to take measures to protect
itself from serious threats to its integrity.
While it is true that the students are entitled to the right to pursue
their education, the USC as an educational institution is also
entitled to pursue its academic freedom and in the process has the
concomitant right to see to it that this freedom is not
jeopardized.128
It must be borne in mind that schools are established, not merely
to develop the intellect and skills of the studentry, but to inculcate
lofty values, ideals and attitudes; nay, the development, or
flowering if you will, of the total man.129 Essentially, education
must ultimately be religious, i.e., one which inculcates duty and
reverence.130 Under the rubric of "right to education," students
have a concomitant duty to learn under the rules laid down by the
school.131 Every citizen has a right to select a profession or,
course of study, subject to fair, reasonable, and equitable
admission and academic requirements.132 The PMA is not different.
As the primary training and educational institution of the AFP, it
certainly has the right to invoke academic freedom in the
enforcement of its internal rules and regulations, which are the
Honor Code and the Honor System in particular.
The Honor Code is a set of basic and fundamental ethical and
moral principle. It is the minimum standard for cadet behavior and
serves as the guiding spirit behind each cadet's action. It is the
cadet's responsibility to maintain the highest standard of honor.
Throughout a cadet's stay in the PMA, he or she is absolutely
bound thereto. It binds as well the members of the Cadet Corps
from its alumni or the member of the so-called "Long Gray Line."
Likewise, the Honor Code constitutes the foundation for the
cadets' character development. It defines the desirable values
they must possess to remain part of the Corps; it develops the
atmosphere of trust so essential in a military organization; and it
makes them professional military soldiers.133 As it is for character
building, it should not only be kept within the society of cadets. It
is best adopted by the Cadet Corps with the end view of applying
it outside as an officer of the AFP and as a product of the PMA.134
The Honor Code and System could be justified as the primary
means of achieving the cadets' character development and as
ways by which the Academy has chosen to identify those who are
deficient in conduct.135 Upon the Code rests the ethical standards
of the Cadet Corps and it is also an institutional goal, ensuring
that graduates have strong character, unimpeachable integrity,
and moral standards of the highest order.136 To emphasize, the
Academy's disciplinary system as a whole is characterized as
"correctional and educational in nature rather than being legalistic
and punitive." Its purpose is to teach the cadets "to be prepared
to accept full responsibility for all that they do or fail to do and to
place loyalty to the service above self-interest or loyalty to friends
or associates. "137 Procedural safeguards in a student disciplinary
case
Respondents stress that Guzman v. National University138 is more
appropriate in determining the minimum standards for the
imposition of disciplinary sanctions in academic institutions.
Similarly, with the guideposts set in Andrews, they believe that
Cadet 1 CL Cudia was accorded due process.
On the other hand, petitioners argue that the HC, the CRAB and
the PMA fell short in observing the important safeguards laid down
in Ang Tibay v. CIR139 and Non v. Judge Dames II,140 which set
the minimum standards to satisfy the demands of procedural due
process in the imposition of disciplinary sanctions. For them,
Guzman did not entirely do away with the due process
requirements outlined in Ang Tibay as the Court merely stated
that the minimum requirements in the Guzman case are more
apropos.
Respondents rightly argued.
Ateneo de Manila University v. Capulong141 already settled the
issue as it held that although both Ang Tibay and Guzman
essentially deal with the requirements of due process, the latter
case is more apropos since it specifically deals with the minimum
standards to be satisfied in the imposition of disciplinary sanctions
in academic institutions. That Guzman is the authority on the
procedural rights of students in disciplinary cases was reaffirmed
by the Court in the fairly recent case of Go v. Colegio De San Juan
De Letran.142
In Guzman, the Court held that there are minimum standards
which must be met to satisfy the demands of procedural due
process, to wit:
(1) the students must be informed in writing of the nature and
cause of any accusation against them; (2) they shall have the
right to answer the charges against them, with the assistance of
counsel, if desired; (3) they shall be informed of the evidence
against them; ( 4) they shall have the right to adduce evidence in
their own behalf; and (5) the evidence must be duly considered by
the investigating committee or official designated by the school
authorities to hear and decide the case.143
We have been consistent in reminding that due process in
disciplinary cases involving students does not entail proceedings
and hearings similar to those prescribed for actions and
proceedings in courts of justice;144 that the proceedings may be
summary;145 that cross-examination is not an essential part of the
investigation or hearing;146 and that the required proof in a
student disciplinary action, which is an administrative case, is
neither proof beyond reasonable doubt nor preponderance of
evidence but only substantial evidence or "such relevant evidence
as a reasonable mind might accept as adequate to support a
conclusion."147
What is crucial is that official action must meet minimum
standards of fairness to the individual, which generally encompass
the right of adequate notice and a meaningful opportunity to be
heard.148 As held in De La Salle University, Inc. v. Court of
Appeals:149
Notice and hearing is the bulwark of administrative due process,
the right to which is among the primary rights that must be
respected even in administrative proceedings. The essence of due
process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side or
an opportunity to seek reconsideration of the action or ruling
complained of. So long as the party is given the opportunity to
advocate her cause or defend her interest in due course, it cannot
be said that there was denial of due process.
A formal trial-type hearing is not, at all times and in all instances,
essential to due process - it is enough that the parties are given a
fair and reasonable opportunity to explain their respective sides of
the controversy and to present supporting evidence on which a
fair decision can be based. "To be heard" does not only mean
presentation of testimonial evidence in court - one may also be
heard through pleadings and where the opportunity to be heard
through pleadings is accorded, there is no denial of due
process.150
The PMA Honor Code explicitly recognizes that an administrative
proceeding conducted to investigate a cadet's honor violation need
not be clothed with the attributes of a judicial proceeding. It
articulates that – The Spirit of the Honor Code guides the Corps in
identifying and assessing misconduct. While cadets are interested
in legal precedents in cases involving Honor violations, those who
hold the Spirit of the Honor Code dare not look into these
precedents for loopholes to justify questionable acts and they are
not to interpret the system to their own advantage.
The Spirit of the Honor Code is a way for the cadets to internalize
Honor in a substantive way. Technical and procedural misgivings
of the legal systems may avert the true essence of imparting the
Spirit of the Code for the reason that it can be used to make
unlawful attempt to get into the truth of matters especially when a
cadet can be compelled to surrender some civil rights and liberties
in order for the Code and System to be implemented. By virtue of
being a cadet, a member of the CCAFP becomes a subject of the
Honor Code and System. Cadet's actions are bound by the
existing norms that are logically applied through the Code and
System in order to realize the Academy's mission to produce
leaders of character - men of integrity and honor.151
One of the fundamental principles of the Honor System also
states:
2. The Honor System correlates with legal procedures of the
state's Justice System but it does not demean its Spirit by
reducing the Code to a systematic list of externally observed
rules. Where misinterpretations and loopholes arise through
legalism and its technicalities, the objective of building the
character of the cadets becomes futile. While, generally, Public
Law penalizes only the faulty acts, the Honor System tries to
examine both the action and the intention.152
Like in other institutions of higher learning, there is aversion
towards undue judicialization of an administrative hearing in the
military academy. It has been said that the mission of the military
is unique in the sense that its primary business is to fight or be
ready to fight wars should the occasion arise, and that over-
proceduralizing military determinations necessarily gives soldiers
less time to accomplish this task.153 Extensive cadet investigations
and complex due process hearing could sacrifice simplicity,
practicality, and timeliness. Investigations that last for several
days or weeks, sessions that become increasingly involved with
legal and procedural' points, and legal motions and evidentiary
objections that are irrelevant and inconsequential tend to disrupt,
delay, and confuse the dismissal proceedings and make them
unmanageable. Excessive delays cannot be tolerated since it is
unfair to the accused, to his or her fellow cadets, to the Academy,
and, generally, to the Armed Forces. A good balance should,
therefore, be struck to achieve fairness, thoroughness, and
efficiency.154 Considering that the case of Cadet 1 CL Cudia is one
of first impression in the sense that this Court has not previously
dealt with the particular issue of a dismissed cadet's right to due
process, it is necessary for Us to refer to U.S. jurisprudence for
some guidance. Notably, our armed forces have been patterned
after the U.S. Army and the U.S. military code produced a
salutary effect in the military justice system of the
Philippines.155 Hence, pertinent case laws interpreting the U.S.
military code and practices have persuasive, if not the same,
effect in this jurisdiction.
We begin by stating that U.S. courts have uniformly viewed that
"due process" is a flexible concept, requiring consideration in each
case of a variety of circumstances and calling for such procedural
protections as the particular situation demands.156 Hagopian
opined:
In approaching the question of what process is due before
governmental action adversely affecting private interests may
properly be taken, it must be recognized that due process is not a
rigid formula or simple rule of thumb to be applied undeviatingly
to any given set of facts. On the contrary, it is a flexible concept
which depends upon the balancing of various factors, including the
nature of the private right or interest that is threatened, the
extent to which the proceeding is adversarial in character, the
severity and consequences of any action that might be taken, the
burden that would be imposed by requiring use of all or part of
the full panoply of trial-type procedures, and the existence of
other overriding interests, such as the necessity for prompt action
in the conduct of crucial military operations. The full context must
therefore be considered in each case.157 (Emphasis supplied)
Wasson, which was cited by Hagopian, broadly outlined the
minimum standards of due process required in the dismissal of a
cadet. Thus:
[W]hen the government affects the private interests of individuals,
it may not proceed arbitrarily but must observe due process of
law. x x x Nevertheless, the flexibility which is inherent in the
concept of due process of law precludes the dogmatic application
of specific rules developed in one context to entirely distinct forms
of government action. "For, though 'due process of law' generally
implies and includes actor, reus, judex, regular allegations,
opportunity to answer, and a trial according to some settled
course of judicial proceedings, * * * yet, this is not universally
true." x x x Thus, to determine in any given case what procedures
due process requires, the court must carefully determine and
balance the nature of the private interest affected and of the
government interest involved, taking account of history and the
precise circumstances surrounding the case at hand.
While the government must always have a legitimate concern with
the subject matter before it may validly affect private interests, in
particularly vital and sensitive areas of government concern such
as national security and military affairs, the private interest must
yield to a greater degree to the governmental. x x x Few decisions
properly rest so exclusively within the discretion of the
appropriate government officials than the selection, training,
discipline and dismissal of the future officers of the military and
Merchant Marine. Instilling and maintaining discipline and morale
in these young men who will be required to bear weighty
responsibility in the face of adversity -- at times extreme -- is a
matter of substantial national importance scarcely within the
competence of the judiciary. And it cannot be doubted that
because of these factors historically the military has been
permitted greater freedom to fashion its disciplinary procedures
than the civilian authorities.
We conclude, therefore, that due process only requires for the
dismissal of a Cadet from the Merchant Marine Academy that he
be given a fair hearing at which he is apprised of the charges
against him and permitted a defense. x x x For the guidance of
the parties x x x the rudiments of a fair hearing in broad outline
are plain. The Cadet must be apprised of the specific charges
against him. He must be given an adequate opportunity to present
his defense both from the point of view of time and the use of
witnesses and other evidence. We do not suggest, however, that
the Cadet must be given this opportunity both when demerits are
awarded and when dismissal is considered. The hearing may be
procedurally informal and need not be adversarial.158 (Emphasis
supplied)
In Andrews, the U.S. Court of Appeals held that Wasson and
Hagopian are equally controlling in cases where cadets were
separated from the military academy for violation of the Honor
Code. Following the two previous cases, it was ruled that in order
to be proper and immune from constitutional infirmity, a cadet
who is sought to be dismissed or separated from the academy
must be afforded a hearing, be apprised of the specific charges
against him, and be given an adequate opportunity to present his
or her defense both from the point of view of time and the use of
witnesses and other evidence.159 Conspicuously, these vital
conditions are not too far from what We have already set in
Guzman and the subsequent rulings in Alcuaz v. Philippine School
of Business Administration160 and De La Salle University, Inc. v.
Court of Appeals.161
In this case, the investigation of Cadet 1 CL Cudia' s Honor Code
violation followed the prescribed procedure and existing practices
in the PMA. He was notified of the Honor Report from Maj.
Hindang. He was then given the opportunity to explain the report
against him. He was informed about his options and the entire
process that the case would undergo. The preliminary
investigation immediately followed after he replied and submitted
a written explanation. Upon its completion, the investigating team
submitted a written report together with its recommendation to
the HC Chairman. The HC thereafter reviewed the findings and
recommendations. When the honor case was submitted for formal
investigation, a new team was assigned to conduct the hearing.
During the formal investigation/hearing, he was informed of the
charge against him and given the right to enter his plea. He had
the chance to explain his side, confront the witnesses against him,
and present evidence in his behalf. After a thorough discussion of
the HC voting members, he was found to have violated the '
Honor Code. Thereafter, the guilty verdict underwent the review
process at the Academy level - from the OIC of the HC, to the
SJA, to the Commandant of Cadets, and to the PMA
Superintendent. A separate investigation was also conducted by
the HTG. Then, upon the directive of the AFP-GHQ to reinvestigate
the case, a review was conducted by the CRAB. Further, a Fact-
Finding Board/Investigation Body composed of the CRAB members
and the PMA senior officers was constituted to conduct a
deliberate investigation of the case. Finally, he had the
opportunity to appeal to the President. Sadly for him, all had
issued unfavorable rulings.
It is well settled that by reason of their special knowledge and
expertise gained from the handling of specific matters falling
under their respective jurisdictions, the factual findings of
administrative tribunals are ordinarily accorded respect if not
finality by the Court, unless such findings are not supported by
evidence or vitiated by fraud, imposition or collusion; where the
procedure which led to the findings is irregular; when palpable
errors are committed; or when a grave abuse of discretion,
arbitrariness, or capriciousness is manifest.162 In the case of Cadet
1 CL Cudia, We find no reason to deviate from the general rule.
The grounds therefor are discussed below seriatim:
As to the right to be represented by a counsel –
For petitioners, respondents must be compelled to give Cadet 1 CL
Cudia the right to be represented by a counsel who could actively
participate in the proceedings like in the cross-examination of the
witnesses against him before the CRAB or HC, if remanded. This is
because while the CRAB allowed him to be represented by a PAO
lawyer, the counsel was only made an observer without any right
to intervene and demand respect of Cadet 1 CL Cudia's
rights.163 According to them, he was not sufficiently given the
opportunity to seek a counsel and was not even asked if he would
like to have one. He was only properly represented when it was
already nearing graduation day after his family sought the
assistance of the PAO. Petitioners assert that Guzman is specific in
stating that the erring student has the right to answer the charges
against him or her with the assistance of counsel, if desired.
On the other hand, respondents cited Lumiqued v. Exevea164 and
Nera v. The Auditor General165 in asserting that the right to a
counsel is not imperative in administrative investigations or non-
criminal proceedings. Also, based on Cadet lCL Cudia's academic
standing, he is said to be obviously not untutored to fully
understand his rights and express himself. Moreover, the
confidentiality of the HC proceedings worked against his right to
be represented by a counsel. In any event, respondents claim that
Cadet 1 CL Cudia was not precluded from seeking a counsel's
advice in preparing his defense prior to the HC hearing.
Essentially, petitioners claim .. that Cadet lCL Cudia is guaranteed
the right to have his counsel not just in assisting him in the
preparation for the investigative hearing before the HC and the
CRAB but in participating fully in said hearings. The Court
disagrees.
Consistent with Lumiqued and Nera, there is nothing in the 1987
Constitution stating that a party in a non-litigation proceeding is
entitled to be represented by counsel. The assistance of a lawyer,
while desirable, is not indispensable. Further, in Remolona v. Civil
Service Commission,166 the Court held that "a party in an
administrative inquiry may or may not be assisted by counsel,
irrespective of the nature of the charges and of the respondent's
capacity to represent himself, and no duty rests on such body to
furnish the person being investigated with counsel." Hence, the
administrative body is under no duty to provide the person with
counsel because assistance of counsel is not an absolute
requirement.
More in point is the opinion in Wasson, which We adopt. Thus:
The requirement of counsel as an ingredient of fairness is a
function of all of the other aspects of the hearing. Where the
proceeding is non-criminal in nature, where the hearing is
investigative and not adversarial and the government does not
proceed through counsel, where the individual concerned is
mature and educated, where his knowledge of the events x x x
should enable him to develop the facts adequately through
available sources, and where the other aspects of the hearing
taken as a whole are fair, due process does not require
representation by counsel.167
To note, U.S. courts, in general, have declined to recognize a right
to representation by counsel, as a function of due process, in
military academy disciplinary proceedings.168 This rule is
principally motivated by the policy of "treading lightly on the
military domain, with scrupulous regard for the power and
authority of the military establishment to govern its own affairs
within the broad confines of constitutional due process" and the
courts' views that disciplinary proceedings are not judicial in
nature and should be kept informal, and that literate and
educated cadets should be able to defend themselves.169 In
Hagopian, it was ruled that the importance of informality in the
proceeding militates against a requirement that the cadet be
accorded the right to representation by counsel before the
Academic Board and that unlike the welfare recipient who lacks
the training and education needed to understand his rights and
express himself, the cadet should be capable of doing so.170 In the
subsequent case of Wimmer v. Lehman,171 the issue was not
access to counsel but the opportunity to have counsel, instead of
oneself, examine and cross-examine witnesses, make objections,
and argue the case during the hearing. Disposing of the case, the
U.S. Court of Appeals for the Fourth Circuit was not persuaded by
the argument that an individual of a midshipman's presumed
intelligence, selected because he is expected to be able to care for
himself and others, often under difficult circumstances, and who
has full awareness of what he is facing, with counsel's advice, was
deprived of due process by being required to present his defense
in person at an investigatory hearing.
In the case before Us, while the records are bereft of evidence
that Cadet 1 CL Cudia was given the option or was able to seek
legal advice prior to and/or during the HC hearing, it is indubitable
that he was assisted by a counsel, a PAO lawyer to be exact, when
the CRAB reviewed and reinvestigated the case. The requirement
of due process is already satisfied since, at the very least, the
counsel aided him in the drafting and filing of the Appeal
Memorandum and even acted as an observer who had no right to
actively participate in the proceedings (such as conducting the
cross-examination). Moreover, not to be missed out are the facts
that the offense committed by Cadet 1 CL Cudia is not criminal in
nature; that the hearings before the HC and the CRAB were
investigative and not adversarial; and that Cadet lCL Cudia's
excellent-academic standing puts him in the best position to look
after his own vested interest in the Academy.
As to the confidentiality of records of the proceedings –
Petitioners allege that when Maj. Gen. Lopez denied in his March
11, 2014 letter Cadet lCL Cudia's request for documents,
footages, and recordings relevant to the HC hearings, the vital
evidence negating the regularity of the HC trial and supporting his
defense have been surely overlooked by the CRAB in its case
review. Indeed, for them, the answers on whether Cadet 1 CL
Cudia was deprived of due process and whether he lied could
easily be unearthed from the video and other records of the HC
investigation. Respondents did not deny their existence but they
refused to present them for the parties and the Court to peruse.
In particular, they note that the Minutes of the HC dated January
21, 2014 and the HC Formal Investigation Report dated January
20, 2014 were considered by the CRAB but were not furnished to
petitioners and the Court; hence, there is no way to confirm the
truth of the alleged statements therein. In their view, failure to
furnish these documents could only mean that it would be adverse
if produced pursuant to Section 3 (e), Rule 131 of the Rules of
Court.172
For lack of legal basis on PMA' s claim of confidentiality of records,
petitioners contend that it is the ministerial duty of the HC to
submit to the CRAB, for the conduct of intelligent review of the
case, all its records of the proceedings, including video footages of
the deliberations and voting. They likewise argue that PMA' s
refusal to release relevant documents to Cadet 1 CL Cudia under
the guise of confidentiality reveals another misapplication of the
Honor Code, which merely provides: "A cadet who becomes part
of any investigation is subject to the existing regulations
pertaining to rules of confidentiality and, therefore, must abide to
the creed of secrecy. Nothing shall be disclosed without proper
guidance from those with authority" (IV. The Honor System,
Honor Committee, Cadet Observer). This provision, they say, does
not deprive Cadet 1 CL Cudia of his right to obtain copies and
examine relevant documents pertaining to his case.
Basically, petitioners want Us to assume that the documents,
footages, and recordings relevant to the HC hearings are favorable
to Cadet 1 CL Cudia's cause, and, consequently, to rule that
respondents' refusal to produce and have them examined is
tantamount to the denial of his right to procedural due process.
They are mistaken.
In this case, petitioners have not particularly identified any
documents, witness testimony, or oral or written presentation of
facts submitted at the hearing that would support Cadet 1 CL
Cudia's defense. The Court may require that an administrative
record be supplemented, but only "where there is a 'strong
showing or bad faith or improper behavior' on the part of the
agency,"173 both of which are not present here. Petitioners have
not specifically indicated the nature of the concealed evidence, if
any, and the reason for withholding it. What they did was simply
supposing that Cadet 1 CL Cudia's guilty verdict would be
overturned with the production and examination of such
documents, footages, and recordings. As will be further shown in
the discussions below, the requested matters, even if denied,
would not relieve Cadet 1 CL Cudia's predicament. If at all, such
denial was a harmless procedural error since he was not seriously
prejudiced thereby.
As to the ostracism in the PMA –
To petitioners, the CRAB considered only biased testimonies and
evidence because Special Order No. 1 issued on February 21,
2014, which directed the ostracism of Cadet 1 CL Cudia, left him
without any opportunity, to secure statements of his own
witnesses. He could not have access to or approach the cadets
who were present during the trial and who saw the 8-1 voting
result. It is argued that the Order directing Cadet 1 CL Cudia's
ostracism is of doubtful legal validity because the Honor Code
unequivocally announced: "x x x But by wholeheartedly dismissing
the cruel method of ostracizing Honor Code violators, PMA will not
have to resort to other humiliating means and shall only have the
option to make known among its alumni the names of those who
have not sincerely felt remorse for violating the Honor Code."
On their part, respondents assert that neither the petition nor the
petition-in-intervention attached a full text copy of the alleged
Special Order No. 1. In any case, attributing its issuance to PMA is
improper and misplaced because of petitioners' admission that
ostracism has been absolutely dismissed as an Academy-
sanctioned activity consistent with the trend in International
Humanitarian Law that the PMA has included in its curriculum.
Assuming that said Order was issued, respondents contend that it
purely originated from the cadets themselves, the sole purpose of
which was to give a strong voice to the Cadet Corps by declaring
that they did not tolerate Cadet 1 CL Cudia's honor violation and
breach of confindentiality of the HC proceedings.
More importantly, respondents add that it is highly improbable
and unlikely that Cadet 1 CL Cudia was ostracized by his fellow
cadets. They manifest that as early as January 22, 2014, he was
already transferred to the Holding Center. The practice of billeting
an accused cadet at the Holding Center is provided for in the
Honor Code Handbook. Although within the PMA compound, the
Holding Center is off-limits to cadets who do not have any
business to conduct therein. The cadets could not also ostracize
him during mess times since Cadet 1 CL Cudia opted to take his
meals at the Holding Center. The circumstances obtaining when
Special Order No. 1 was issued clearly foreclose the possibility
that he was ostracized in common areas accessible to other
cadets. He remained in the Holding Center until March 16, 2014
when he voluntarily left the PMA. Contrary to his claim, guests
were also free to visit him in the Holding Center.
However, petitioners swear that Cadet 1 CL Cudia suffered from
ostracism in the PMA. The practice was somehow recognized by
respondents in their Consolidated Comment and by PMA
Spokesperson Maj. Flores in a news report. The CHR likewise
confirmed the same in its Resolution dated May 22, 2014. For
them, it does not matter where the ostracism order originated
from because the PMA appeared to sanction it even if it came from
the cadets themselves. There was a tacit approval of an illegal act.
If not, those cadets responsible for ostracism would have been
charged by the PMA officials. Finally, it is claimed that Cadet 1 CL
Cudia did not choose to take his meals at the Holding Center as he
was not allowed to leave the place. Petitioners opine that placing
the accused cadet in the Holding Center is inconsistent with his or
her presumed innocence and certainly gives the implication of
ostracism.
We agree with respondents. Neither the petition nor the petition-
inintervention attached a full text copy or even a pertinent portion
of the alleged Special Order No. 1, which authorized the ostracism
of Cadet 1 CL Cudia. Being hearsay, its existence and contents are
of doubtful veracity. Hence, a definite ruling on the matter can
never be granted in this case.
The Court cannot close its eyes though on what appears to be an
admission of Cadet 1 CL Mogol during the CHR hearing that, upon
consultation with the entire class, the baron, and the Cadet
Conduct Policy Board, they issued an ostracism order against
Cadet 1 CL Cudia.174 While not something new in a military
academy,175 ostracism's continued existence in the modem times
should no longer be countenanced. There are those who argue
that the "silence" is a punishment resulting in the loss of private
interests, primarily that of reputation, and that such penalty may
render illusory the possibility of vindication by the reviewing body
once found guilty by the HC.176 Furthermore, in Our mind,
ostracism practically denies the accused cadet's protected rights
to present witnesses or evidence in his or her behalf and to be
presumed innocent until finally proven otherwise in a proper
proceeding.
As to Cadet 1 CL Cudia's stay in the Holding Center, the Court
upholds the same. The Honor Code and Honor System Handbook
provides that, in case a cadet has been found guilty by the HC of
violating the Honor Code and has opted not to resign, he or she
may stay and wait for the disposition of the case. In such event,
the cadet is not on full-duty status and shall be billeted at the HTG
Holding Center.177 Similarly, in the U.S., the purpose of "Boarders
Ward" is to quarter those cadets who are undergoing separation
actions. Permitted to attend classes, the cadet is sequestered ,
therein until final disposition of the case. In Andrews, it was
opined that the segregation of cadets in the Ward was a proper
exercise of the discretionary authority of Academy officials. It
relied on the traditional doctrine that "with respect to decisions
made by Army authorities, 'orderly government requires us to
tread lightly on the military domain, with scrupulous regard for
the power and authority of the military establishment to govern its
own affairs within the broad confines of constitutional due
process.'" Also, in Birdwell v. Schlesinger,178 the "administrative
segregation" was held to be a reasonable exercise of military
discipline and could not be considered an invasion of the rights to
freedom of speech and freedom of association.
Late and vague decisions –
It is claimed that Cadet 1 CL Cudia was kept in the dark as to the
charge against him and the decisions arrived at by the HC, the
CRAB, and the PMA. No written decision was furnished to him, and
if any, the information was unjustly belated and the justifications
for the decisions were vague. He had to constantly seek
clarification and queries just to be apprised of what he was
confronted with.
Petitioners relate that upon being informed of the "guilty" verdict,
Cadet 1 CL Cudia immediately inquired as to the grounds therefor,
but Cadet 1 CL Mogol answered that it is confidential since he
would still appeal the same. By March 11, 2014, Maj. Gen. Lopez
informed Cadet 1 CL Cudia that the CRAB already forwarded their
recommendation for his dismissal to the General Headquarters
sometime in February-March 2014. Even then, he received no
decision/recommendation on his case, verbally or in writing. The
PMA commencement exercises pushed through with no written
decision from the CRAB or the PMA on his appeal. The letter from
the Office of the Adjutant General of the AFP was suspiciously
delayed when the Cudia family received the same only on March
20, 2014. Moreover, it fell short in laying down with specificity the
factual and legal bases used by the CRAB and even by the Office
of the Adjutant General. There remains no proof that the CRAB
and the PMA considered the evidence presented by Cadet 1 CL
Cudia, it being uncertain as to what evidence was weighed by the
CRAB, whether the same is substantial, and whether the new
evidence submitted by him was ever taken into account.
In refutation, respondents allege the existence of PMA's· practice
of orally declaring the HC finding, not putting it in a written
document so as to protect the integrity of the erring cadet and
guard the confidentiality of the HC proceedings pursuant to the
Honor System. Further, they aver that a copy of the report of the
CRAB, dated March 10, 2014, was not furnished to Cadet 1 CL
Cudia because it was his parents who filed the appeal, hence,
were the ones who were given a copy thereof.
Petitioners' contentions have no leg to stand on. While there is a
constitutional mandate stating that "[no] decision shall be
rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based,"179 such
provision does not apply in Cadet 1 CL Cudia's case. Neither
Guzman nor Andrews require a specific form and content of a
decision issued in disciplinary proceedings. The Honor Code and
Honor System Handbook also has no written rule on the matter.
Even if the provision applies, nowhere does it demand that a
point-by-point consideration and resolution of the issues raised by
the parties are necessary.180 What counts is that, albeit furnished
to him late, Cadet 1 CL Cudia was informed of how it was decided,
with an explanation of the factual and legal reasons that led to the
conclusions of the reviewing body, assuring that it went through
the processes of legal reasoning. He was not left in the dark as to
how it was reached and he knows exactly the reasons why he lost,
and is able to pinpoint the possible errors for review.
As to the blind adoption of the HC findings –
Petitioners assert that, conformably with Sections 30 and 31 of
C.A. No. 1, only President Aquino as the Commander-in-Chief has
the power to appoint and remove a cadet for a valid/legal cause.
The law gives no authority to the HC as the sole body to
determine the guilt or innocence of a cadet. It also does not
empower the PMA to adopt the guilty findings of the HC as a basis
for recommending the cadet's dismissal. In the case of Cadet 1 CL
Cudia, it is claimed that the PMA blindly followed the HC's finding
of guilt in terminating his military service.
Further, it is the ministerial duty of the CRAB to conduct a review
de nova of all records without requiring Cadet 1 CL Cudia to
submit new evidence if it is physically impossible for him to do so.
In their minds, respondents cannot claim that the CRAB and the
PMA thoroughly reviewed the HC recommendation and heard
Cadet lCL Cudia's side. As clearly stated in the letter from the
Office of the AFP Adjutant General, "[in] its report dated March
10, 2014, PMA CRAB sustained the findings and recommendations
of the Honor Committee x x x It also resolved the appeal filed by
the subject Cadet." However, the Final Investigation Report of the
CRAB was dated March 23, 2014. While such report states that a
report was submitted to the AFP General Headquarters on March
10, 2014 and that it was only on March 12, 2014 that it was
designated as a Fact-Finding Board/Investigating Body, it is
unusual that the CRAB would do the same things twice. This
raised a valid and well-grounded suspicion that the CRAB never
undertook an in-depth investigation/review the first time it came
out with its report, and the Final Investigation Report was drafted
merely as an afterthought when the lack of written decision was
pointed out by petitioners so as to remedy the apparent lack of
due process during the CRAB investigation and review.
Despite the arguments, respondents assure that there was a
proper assessment of the procedural and legal correctness of the
guilty verdict against Cadet 1 CL Cudia. They assert that the
higher authorities of the PMA did not merely rely on the findings of
the HC, noting that there was also a separate investigation
conducted by the HTG from January 25 to February 7, 2014.
Likewise, contrary to the contention of petitioners that the CRAB
continued with the review of the case despite the absence of
necessary documents, the CRAB conducted its own review of the
case and even conducted another investigation by constituting the
Fact-Finding Board/Investigating Body. For respondents,
petitioners failed to discharge the burden of proof in showing bad
faith on the part of the PMA. In the absence of evidence to the
contrary and considering further that petitioners' allegations are
merely self-serving and baseless, good faith on the part of the
PMA' s higher authorities is presumed and should, therefore,
prevail.
We agree with respondents.
The Honor Committee, acting on behalf of the Cadet Corps, has a
limited role of investigating and determining whether or not the
alleged offender has actually violated the Honor Code.181 It is
given the responsibility of administering the Honor Code and, in
case of breach, its task is entirely investigative, examining in the
first instance a suspected violation. As a means of encouraging
self-discipline, without ceding to it any authority to make final
adjudications, the Academy has assigned it the function of
identifying suspected violators.182 Contrary to petitioners'
assertion, the HC does not have the authority to order the
separation of a cadet from the Academy. The results of its
proceedings are purely recommendatory and have no binding
effect. The HC determination is somewhat like an indictment, an
allegation, which, in Cadet 1 CL Cudia's case, the PMA-CRAB
investigated de novo.183 In the U.S., it was even opined that due
process safeguards do not actually apply at the Honor Committee
level because it is only a "charging body whose decisions had no
effect other than to initiate de nova proceedings before a Board of
Officers."184
Granting, for argument's sake, that the HC is covered by the due
process clause and that irregularities in its proceedings were in
fact committed, still, We cannot rule for petitioners. It is not
required that procedural due process be afforded at every stage of
developing disciplinary action. What is required is that an
adequate hearing be held before the final act of dismissing a cadet
from the military academy.185 In the case of Cadet 1 CL Cudia, the
OIC of HC, the SJA, the Commandant of Cadets, and the PMA
Superintendent reviewed the HC findings. A separate investigation
was also conducted by the HTG. Then, upon the directive of the
AFP-GHQ to reinvestigate the case, a review was conducted by the
CRAB. Finally, a Fact-Finding Board/Investigating Body composed
of the CRAB members and the PMA senior officers was constituted
to conduct a deliberate investigation of the case. The Board/Body
actually held hearings on March 12, 13, 14 and 20, 2014. Instead
of commendation, petitioners find it "unusual" that the CRAB
would do the same things twice and suspect that it never
undertook an in-depth investigation/review the first time it came
out with its report. Such assertion is mere conjecture that
deserves scant consideration.
As to the dismissal proceedings as sham trial –
According to petitioners, the proceedings before the HC were a
sham. The people behind Cadet ICL Cudia's charge, investigation,
and conviction were actually the ones who had the intent to
deceive and who took advantage of the situation. Cadet 1 CL
Raguindin, who was a senior HC member and was the second in
rank to Cadet 1 CL Cudia in the Navy cadet 1 CL, was part of the
team which conducted the preliminary investigation. Also, Cadet I
CL Mogol, the HC Chairman, previously charged Cadet 1 CL Cudia
with honor violation allegedly for cheating (particularly, conniving
with and tutoring his fellow cadets on a difficult topic by giving
solutions to a retake exam) but the charge was dismissed for lack
of merit. Even if he was a non-voting member, he was in a
position of influence and authority. Thus, it would be a futile
exercise for Cadet 1 CL Cudia to resort to the procedure for the
removal of HC members.186
Further, no sufficient prior notice of the scheduled CRAB hearing
was given to Cadet I CL Cudia, his family, or his PAO counsel.
During one of her visits to him in the Holding Center, petitioner-
intervenor was advised to convince his son to resign and
immediately leave the PMA. Brig. Gen. Costales, who later became
the CRAB Head, also categorically uttered to Annavee: "Your
brother, he lied!" The CRAB conferences were merely used to
formalize his dismissal and the PMA never really intended to hear
his side. For petitioners, these are manifestations of PMA's clear
resolve to dismiss him no matter what.
For their part, respondents contend that the CllR's allegation that
Maj. Hindang acted in obvious bad faith and that he failed to
discharge his duty to be a good father of cadets when he "paved
the road to [Cadet 1 CL Cudia's] sham trial by the Honor
Committee" is an unfounded accusation. They note that when Maj.
Hindang was given the DR of Cadet 1 CL Cudia, he revoked the
penalty awarded because of his explanation. However, all
revocations of awarded penalties are subject to the review of the
STO. Therefore, it was at the instance of Maj. Leander and the
established procedure followed at the PMA that Maj. Hindang was
prompted to investigate the circumstances surrounding Cadet 1
CL Cudia's tardiness. Respondents add that bad faith cannot
likewise be imputed against Maj. Hindang by referring to the
actions taken by Maj. Jekyll Dulawan, the CTO of Cadets 1 CL
Narciso and Arcangel who also arrived late for their next class.
Unlike the other cadets, Cadet 1 CL Cudia did not admit his being
late and effectively evaded responsibility by ascribing his tardiness
to Dr. Costales.
As to the CHR' s finding that Cadet 1 CL Mogol was likewise "in
bad faith and determined to destroy [Cadet 1 CL] Cudia, for
reasons of his own" because the former previously reported the
latter for an honor violation in November 2013, respondents argue
that the bias ascribed against him is groundless as there is failure
to note that Cadet 1 CL Mogol was a non-voting member of the
HC. Further, he cannot be faulted for reporting a possible honor
violation since he is the HC Chairman and nothing less is expected
of him. Respondents emphasize that the representatives of the HC
are elected from each company, while the HC Chairman is elected
by secret ballot from the incoming first class representatives.
Thus, if Cadet 1 CL Cu'dia believed that there was bias against
him, he should have resorted to the procedure for the removal of
HC members provided for in the Honor Code Handbook.
Finally, respondents declare that there is no reason or ill-motive
on the part of the PMA to prevent Cadet 1 CL Cudia from
graduating because the Academy does not stand to gain anything
from his dismissal. On the contrary, in view of his academic
standing, the separation militates against PMA' s mission to
produce outstanding, honorable, and exceptional cadets.
The Court differs with petitioners.
Partiality, like fraudulent intent, can never be presumed. Absent
some showing of actual bias, petitioners' allegations do not hold
water. The mere imputation of ill-motive without proof is
speculative at best. Kolesa teaches us that to sustain the
challenge, specific evidence must be presented to overcome
a presumption of honesty and integrity in those serving as
adjudicators; and it must convince that, under a realistic appraisal
of psychological tendencies and human weaknesses, conferring
investigative and adjudicative powers on the same individual
poses such a risk of actual bias or prejudgment that the practice
must be forbidden if the guarantee of due process is to be
implemented.187
Although a CTO like Maj. Hindang must decide whether demerits
are to be awarded, he is not an adversary of the cadet but an
educator who shares an identity of interest with the cadet, whom
he counsels from time to time as a future leader.188 When the
occasion calls for it, cadets may be questioned as to the accuracy
or completeness of a submitted work. A particular point or issue
may be clarified. In this case, the question asked of Cadet 1 CL
Cudia concerning his being late in class is proper, since there is
evidence indicating that a breach of regulation may have occurred
and there is reasonable cause to believe that he was involved in
the breach of regulations.189
For lack of actual proof of bad faith or ill-motive, the Court shall
rely on the non-toleration clause of the Honor Code, i.e., "We do
not tolerate those who violate the Code." Cadets are reminded
that they are charged with a tremendous duty far more superior
to their personal feeling or friendship.190 They must learn to help
others by guiding them to accept the truth and do what is right,
rather than tolerating actions against truth and
justice.191 Likewise, cadets are presumed to be characteristically
honorable; they cannot overlook or arbitrarily ignore the
dishonorable action of their peers, seniors, or
subordinates.192 These are what Cadet 1 CL Mogol exactly did,
although he was later proven to have erred in his accusation. Note
that even the Honor Code and Honor System Handbook
recognizes that interpretation of one's honor is generally
subjective.193
Moreover, assuming, for the sake of argument, that Cadets 1 CL'
Raguindin and Mogol as well as Brig. Gen. Costales have an axe to
grind against Cadet 1 CL Cudia and were bent on causing, no
matter what, the latter's downfall, their nefarious conduct would
still be insignificant. This is so since the HC (both the preliminary
and formal investigation), the CRAB, and the Fact-Finding
Board/Investigating Body are collegial bodies. Hence, the claim
that the proceedings/hearings conducted were merely a farce
because the three personalities participated therein is tantamount
to implying the existence of a conspiracy, distrusting the
competence, independence, and integrity of the other members
who constituted the majority. Again, in the absence of specifics
and substantial evidence, the Court cannot easily give credence to
this baseless insinuation.
As to the HC executive session/chambering –
Petitioners narrate that there was an irregular administrative
hearing in the case of Cadet 1 CL Cudia because two voting
rounds took place. After the result of the secret balloting, Cadet 1
CL Mogol ordered the voting members to go to a room without the
cadet recorders. Therein, the lone dissenter, Cadet lCL Lagura,
was asked to explain his "not guilty" vote. Pressured to change his
vote, he was made to cast a new one finding Cadet 1 CL Cudia
guilty. The original ballot was discarded and replaced. There was
no record of the change in vote from 8-1 to 9-0 that was
mentioned in the HC formal report.
The Affidavit of Commander Junjie B. Tabuada executed on March
6, 2014 was submitted by petitioners since he purportedly recalled
Cadet 1 CL Lagura telling him that he was pressured to change his
"not guilty" vote after the voting members were "chambered." In
the sworn statement, Commander Tabuada said:
1. That after CDT lCL CUDIA [was] convicted for honor
violation, I [cannot] remember exactly the date but
sometime in the morning of 23rd or 24th of January 2014,
I was in my office filling up forms for the renewal of my
passport, CDT 1CL LAGURA entered and had business with
my staff;
2. When he was about to leave I called him. "Lags, halika
muna dito," and he approached me and I let him sit down
on the chair in front of my table. I told and asked him,
"Talagang nadali si Cudia ah ... ano ha ang nangyari? Mag-
Tagalog or mag-Bisaya ka." He replied, "Talagang NOT
GUILTY ang vote ko sa kanya sir", and I asked him, "Oh,
bakit naging guilty di ha pag may isang nag NOT GUILTY,
abswelto na? He replied "Chinamber ako sir, bale pinapa-
justify kung bakit NOT GUILTY vote ko, at na-pressure din
ako sir kaya binago ko, sir." So, I told him, "Sayang sya,
matalino at mabait pa naman" and he replied "oo nga sir".
After that conversation, I let him go.194
It is claimed that the HC gravely abused its discretion when it
committed voting manipulation since, under the rules, it is
required to have a unanimous nine (9) votes finding an accused
cadet guilty. There is nothing in the procedure that permits the HC
Chairman to order the "chambering" of a member who voted
contrary to the majority and subjects him or her to reconsider in
order to reflect a unanimous vote. Neither is there an order from
the Chief of Staff or the President sanctioning the HC procedure or
approving any change therein pursuant to Sections 30 and 31 of
C.A. No. 1. The HC, the CRAB, and the PMA violated their own
rules and principles as embodied in the Honor Code. Being a clear
deviation from the established procedures, the second deliberation
should be considered null and void.
Petitioners further contend that the requirement of unanimous
vote involves a substantive right which cannot be
unceremoniously changed without a corresponding
amendment/revision in the Honor Code and Honor System
Handbook. In their view, "chambering" totally defeats the purpose
of voting by secret ballot as it glaringly destroys the very essence
and philosophy behind the provisions of the Honor System, which
is to ensure that the voting member is free to vote what is in his
or her heart and mind and that no one can pressure or persuade
another to change his or her vote. They suggest that if one voting
member acquits an accused cadet who is obviously guilty of the
offense, the solution is to remove him or her from the HC through
the vote of non-confidence as provided for in the Honor
Code.195 Anent the above arguments, respondents contend that a
distinction must be made between the concepts of the Honor Code
and the Honor System. According to them, the former sets the
standard for a cadet's, minimum ethical and moral behavior and
does not change, while the latter is a set of rules for the conduct
of the observance and implementation of the· Honor Code and
may undergo necessary adjustments as may be warranted by the
incumbent members of the HC in order to be more responsive to
the moral training and character development of the cadets. The
HC may provide guidelines when the Honor System can be used to
supplement regulations. This being so, the voting process is
continuously subject to change.
Respondents note that, historically, a non-unanimous guilty
verdict automatically acquits a cadet from the charge of Honor
violation. The voting members only write either "guilty" or "not
guilty" in the voting sheets without stating their name or their
justification. However, this situation drew criticisms since there
were instances where a reported cadet already admitted his honor
violation but was acquitted due to the lone vote of a sympathetic
voting member.
In the case of Cadet 1 CL Cudia, the HC adopted an existing
practice that should the voting result in 7-2 or 8-1 the HC would
automatically sanction a jury type of discussion called "executive
session" or "chambering," which is intended to elicit the
explanation and insights of the voting member/s. This prevents
the tyranny of the minority or lone dissenter from prevailing over
the manifest proof of guilt. The assailed voting practice has been
adopted and widely accepted by the PMA Siklab Diwa Class of
2014 since their first year in the Academy. The allegations of
conspiracy and sham trial are, therefore, negated by the fact that
such practice was in place and applied to all cases of honor
violations, not solely to the case of Cadet 1CL Cudia.
It is emphasized by respondents that any decision to change vote
rests solely on the personal conviction of the dissenter/s, without
any compulsion from the other voting members. There can also be
no pressuring to change one's vote to speak of since a vote may
only be considered as final when the Presiding Officer has affixed
his signature.
To debunk Commander Tabuada's statements, respondents raise
the argument that the Fact-Finding Board/Investigating Body
summoned Cadet 1 CL Lagura for inquiry. Aside from his oral
testimony made under oath, he submitted to the Board/Body an
affidavit explaining that:
11. Sometime on 23rd or 24th of January 2014, I went to the
Department of Naval Warfare to ask permission if it is possible not
to attend the Navy duty for the reason that I will be attending our
baseball game outside the Academy.
12. After I was permitted not to attend my Navy Duty and when I
was about to exit out of the Office, CDR JUNJIE B T ABU ADA PN,
our Head Department Naval Warfare Officer, called my attention. I
approached him and he said: "Talagang nadali si Cudia ah. Ano ba
talaga ang nangyari?" At first, I was hesitant to answer because of
the confidentiality of the Honor Committee proceedings. He again
said: "Wag kang mag-alala, atin, atin lang ito, alam ko naman na
bawal magsabi." Then I answered: "Ako yung isang not guilty Sir.
Kaya [yung] Presiding Officer nagsabi na pumunta muna kami sa
Chamber. Nung nasa chamber kami, nagsalita [yung] mga
nagvote ng Guilty tapos isa-isa nagsabi kung bakit ang boto nila
Guilty. Nung pakinggan ko, eh naliwanagan ako. Pinalitan ko yung
boto ko from Not Guilty to Guilty Sir." He replied: "Sayang si
Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia, mabait pa
naman at matalino."196
Cadet 1 CL Lagura restated the above in the Counter-Affidavit
executed on March 12, 2014, which he submitted before the CHR
wherein he attested to the following:
3. I was chosen to be a voting member of the Honor
Committee for Honor Code violation committed by Cadet
Cudia, for "lying". As a voting member, we are the one who
assess or investigate the case whether the reported Cadet
is Guilty for his actions or not.
4. I was the only one who INITIALLY voted "NOT GUILTY"
among the nine (9) voting members of the Honor
Committee in the case of Cdt Cudia for Lying.
5. I initially voted "NOT GUILTY" for the reason that after
the proceedings and before the presiding Officer told the
members to vote, I was confused of the case of Cadet
Cudia. I have gathered some facts from the investigation to
make my decision but for me it is not yet enough to give
my verdict of guilty to Cdt Cudia so I decided to vote "NOT
GUILTY" with a reservation in my mind that we will still be
discussing our verdicts if we will arrive at 8-1 or 7-2. Thus,
I can still change my vote if I may be enlightened with the
other's justifications.
6. After the votes were collected, the Presiding Officer told
us that the vote is 8 for guilty and 1 for not guilty. By way
of practice and as I predicted, we were told to go inside the
anteroom for executive meeting and to discuss our
respective justifications. I have been a member for two (2)
years and the voting committee will always go for executive
meeting whenever it will meet 8-1 or 7-2 votes.
7. I listened to them and they listened to me, then I saw
things that enlightened my confusions that time. I gave a
thumbs-up sign and asked for another sheet of voting
paper. I then changed my vote from "NOT GUILTY" to
"GUILTY" and the voting members of the Honor Committee
came up with the final vote of nine (9) votes for guilty and
zero (0) votes for not guilty.
9. Cdt Cudia was called inside the courtroom and told that
the verdict was GUILTY of LYING. After that, all persons
inside the courtroom went back to barracks.
10. Right after I changed to sleeping uniform, I was
approached by Cdt Jocson and Cdt Cudia, inquiring and
said: "Bakit ka naman nagpalit ng boto? ., I answered:
"Nasa process yan, may mali talaga sa rason mo." They
also asked who were inside the Chamber and I mentioned
only Cdt Arlegui and Cdt Mogol. That was the last time that
Cdt Cudia and Cdt Jocson talked to me.
11. Sometime on 23rd or 24th of January 2014, I went to
the Department of Naval Warfare to asked (sic) permission
if it is possible not to attend the Navy duty for the reason
that I will be attending our baseball game outside the
Academy.
12. After I was permitted not to attend my Navy Duty and
when I was about to exit out of the Office, CDR JUNJIE B
TABUADA PN, our Head Department Naval Warfare Officer,
called my attention. I approached him and he said:
"Talagang nadali si Cudia ah. Ano ba talaga ang nangyari?"
At first, I was hesitant to answer because of the
confidentiality of the Honor Committee proceedings. He
again said: "Wag kang mag-alala, atin, atin lang ito, alam
ko naman na bawal magsabi. " Then I answered: "Ako
yung isang not guilty Sir. Kaya [yung} Presiding Officer
nagsabi na pumunta muna kami sa Chamher. Nung nasa
chamber kami, nagsalita [yung] mga nagvote ng Guilty
tapos isa-isa nagsabi kung bakit ang boto nila Guilty. Nung
pakinggan ko, eh naliwanagan aka. Pinalitan ko yung boto
ko from Not Guilty to Guilty Sir. " He replied: "Sayang si
Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia,
mabait pa naman at matalino. "197
Still not to be outdone, petitioners argue that the very fact that
Cadet 1 CL Lagura, as the lone dissenter, was made to explain in
the presence of other HC members, who were in disagreement
with him, gives a semblance of intimidation, force, or pressure.
For them, the records of the HC proceedings, which were not
presented assuming they actually exist, could have been the best
way to ensure that he was free to express his views, reject the
opinion of the majority, and stick to his decision. Also, it was
pointed out that Cadet 1 CL Lagura failed to clearly explain in his
affidavit why he initially found Cadet 1 CL Cudia "not guilty" and
what made him change his mind. His use of general statements
like he "was confused of the case " and "saw things that
enlightened my confusions " could hardly suffice to establish why
he changed his vote. Finally, petitioners note the admission of
·Cadet 1 CL Lagura during the CHR investigation that he was the
only one who was given another ballot sheet while in the chamber
and that he accomplished it in the barracks which he only
submitted the following day. However, as the CHR found, the
announcement of the 9-0 vote was done immediately after the HC
came out from the chamber and before Cadet 1 CL Lagura
submitted his accomplished ballot sheet.
We rule for respondents.
As to the manner of voting by the HC members, the Honor Code
tersely provides:
After a thorough discussion and deliberation, the presiding
member of the Board will call for the members to vote whether
the accused is GUILTY or NOT GUILTY. A unanimous vote (9
votes) of GUILTY decides that a cadet is found guilty of violating
the Honor Code.198
From the above-quoted provision, it readily appears that the HC
practice of conducting "executive session" or "chambering" is not
at all prohibited. The HC is given leeway on the voting procedures
in' actual cases taking into account the exigency of the times.
What is important is that, in the end, there must be a unanimous
nine votes in order to hold a cadet guilty of violating the Honor
Code.
Granting, for argument's sake, that the HC violated its written
procedure,199 We still rule that there is nothing inherently wrong
with the practice of "chambering" considering that the presence of
intimidation or force cannot automatically be inferred therefrom.
The essence of secret balloting and the freedom to vote based on
what is in the heart and mind of the voting member is not
necessarily diluted by the fact that a second/final voting was
conducted. As explained by Cadet 1CL Mogol before the CRAB:
13. x x x [The] dissenting voter would have to explain his side and
insights regarding the case at hand. The other members, on the
other hand, would be given the chance to explain their votes as
well as their insights to the dissenting voter. The decision to
change the vote of the dissenting voter rests solely on his
personal conviction. Thus, if he [or she] opted not to change
his/her vote despite the discussion, his [or her] vote is accorded
respect by the Honor Committee.200
It is elementary that intimidation or force is never presumed.
Mere allegation is definitely not evidence.1âwphi1 It must be
substantiated and proved because a person is presumed to be
innocent of a crime or wrong and that official duty has been
regularly performed.201
The oral and written statements of Cadet 1 CL Lagura should
settle the issue. Before the Fact-Finding Board/Investigating Body
and the CHR, he consistently denied that he was pressured by the
other voting members of the HC. His representation must be
accepted as it is regardless of whether he has satisfactorily
elaborated his decision to change his vote. Being the one who was
"chambered," he is more credible to clarify the issue. In case of
doubt, We have to rely on the faith that Cadet 1 CL Lagura
observed the Honor Code, which clearly states that every cadet
must be his or her own Final' Authority in honor; that he or she
should not let other cadets dictate on him or her their sense of
honor.202 Moreover, the Code implies that any person can have
confidence that a cadet and any graduate of the PMA will be fair
and just in dealing with him; that his actions, words and ways are
sincere and true.203
As to the other alleged "irregularities" committed such as not
putting on record the initial/first voting and Cadet 1CL Lagura's
bringing of his ballot sheet to and accomplishing it in the barracks,
the Court shall no longer dwell on the same for being harmless
procedural errors that do not materially affect the validity of the
HC proceedings.
Cadet 1 CL Cudia 's alleged untruthful statements
Petitioners insist that Cadet 1 CL Cudia did not lie. According to
them, there is no clear time reference as to when was the actual
dismissal or what was the exact time of dismissal - whether it
should be the dismissal inside the room or the dismissal after the
section grade was given by Dr. Costales -in the minds of Cadet 1
CL Cudia, Maj. Hindang, and the HC investigators and voting
members. They claim that during long examinations, the time of
dismissal was usually five minutes before the class was set to end
and the protocol of dismissing the class 15 minutes earlier was not
observed. When Maj. Hindang stated in accusatory language that
Cadet 1 CL Cudia perverted the truth by stating that OR432 class
ended at 1500H, he did not state what was the true time of
dismissal. He did not mention whether the truth he was relying on
was 5 or 15 minutes before the scheduled end of class.
It is also averred that Cadet 1 CL Cudia's only business was to ask
Dr. Costales a query such that his business was already finished
as soon as she gave an answer. However, a new business was
initiated by Dr. Costales, which is, Cadet 1 CL Cudia must stay
and wait for the section grade. At that point in time, he was no
longer in control of the circumstances. Petitioners claim that Dr.
Costales never categorically stated that Cadet lCL Cudia was lying.
She recognized the confusion. Her text messages to him clarified
his alleged violation. Also, the CHR noted during its investigation
that she could not exactly recall what happened in her class on
November 14, 2013.
Furthermore, petitioners reasoned out that when respondents
stated that ENG412 class started at 3:05 p.m., it proves that
Cadet 1 CL Cudia was obviously not late. If, as indicated in his
Delinquency Report, he was late two (2) minutes in his 1500-
1600H class in ENG 412, he must have arrived 3:02 p.m.
Respondents, however, claim that the class started at 3:05 p.m.
Thus, Cadet 1 CL Cudia was not late.
Relative to his explanation to the delinquency report, petitioners
were of the view that what appears to have caused confusion in
the minds of respondents is just a matter of semantics; that the
entire incident was a product of inaccuracy, not lying. It is
malicious for them to insinuate that Cadet 1 CL Cudia purposely
used incorrect language to hide the truth. Citing Merriam
Webster's Dictionary, petitioners argue that "dismiss" means to
permit or cause to leave, while "class" refers to a body of students
meeting regularly to study the same subject. According to them,
these two words do not have definite and precise meanings but
are generic terms. Other than the words "class" and "dismiss"
used by Cadet 1 CL Cudia, which may actually be used in their
generic sense, there is nothing deceiving about what he said.
Thus, the answer he chose might be wrong or not correct, but it is
not false or not true.
For petitioners, Cadet lCL Cudia's explanations are evidently
truthful and with no intent to deceive or mislead. He did not
manipulate any fact and was truthful of his explanation. His ..
statements were clear and unambiguous but were given a narrow-
minded interpretation. Even the Honor Code acknowledges that
"[e]xperience demonstrates that human communication is
imperfect at best, and some actions are often misinterpreted."
Lastly, petitioners contend that Cadet 1 CL Cudia's transcript of
records reflects not only his outstanding academic performance
but proves his good conduct during his four-year stay in the
Academy. He has above-average grades in Conduct, with grades
ranging from 96 to 100 in Conduct I to XI. His propensity to lie is,
therefore, far from the truth.
On the other hand, respondents were equally adamant to contend
that Cadet 1 CL Cudia was obviously quibbling, which, in the
military parlance, is tantamount to lying. He fell short in telling a
simple truth. He lied by making untruthful statements in his
written explanation. Respondents want Us to consider the
following:
First, their OR432 class was not dismissed late. During the formal
investigation, Dr. Costales testified that a class is dismissed as
long as the instructor is not there and the bell has rung. In cases
of lesson examinations (LE), cadets are dismissed from the time
they have answered their respective LEs. Here, as Cadet Cudia
stated in his Request for Reconsideration of Meted Punishment,
"We had an LE that day (14 November 2013) in OR432 class.
When the first bell rang (1455), I stood up, reviewed my paper
and submitted it to my instructor, Ms. Costales. xxx" Clearly, at
the time Cadet Cudia submitted his papers, he was already
considered dismissed. Thus, he cannot claim that his [OR432]
class ended at 3:00 in the afternoon (1500H) or "a bit late."
Second, Cadet Cudia was in control of the circumstances leading
to his tardiness. After submitting his paper, Cadet Cudia is free to
leave and attend his next class. However, he initiated a
conversation with Dr. Costales regarding their grades. He was not
under instruction by Dr. Costales to stay beyond the period of her
class.
Furthermore, during the investigation of the Fact-Finding
Board/Investigating Body, Dr. Costales clarified her statements in
her written explanation. She explained that the "instruction to
wait" is a response to Cadet Cudia' s request and that it was not
her initiated instruction. Clearly, there was no directive from Dr.
Costales for Cadet Cudia and the other cadets to stay. On the
contrary, it was them who wanted to meet with the instructor.
Third, contrary to Cadet Cudia's explanation, his subsequent class,
ENG412, did not exactly start at 3:00 in the afternoon (1500H). In
the informal review conducted by the HTG to check the findings of
the HC, Professor Berong confirmed that her English class started
as scheduled (3:05 in the afternoon, or 1505H) and not earlier.
Cadet 1 CL Barrawed, the acting class marcher of ENG412 also
testified that their class started as scheduled (3 :05 in the
afternoon, or 1505) and not earlier.204
Respondents were unimpressed with the excuse that Cadet 1 CL
Cudia had no intention to mislead or deceive but merely used
wrong and unfitting words in his explanations. For them,
considering his academic standing, it is highly improbable that he
used incorrect language to justify his mistake. Respondents'
arguments are tenable.
The issue of whether Cadet 1 CL Cudia committed lying is an issue
of fact. Unfortunately for petitioners, the Court, not being a trier
of facts, cannot pass upon factual matters as it is not duty-bound
to analyze and weigh again the evidence considered in the
proceedings below. Moreover, We reiterate the long standing rule
that factual findings of administrative tribunals are ordinarily
accorded respect if not finality by the Court. In this case, as
shown in the previous discussions, there is no evidence that the
findings of the investigating and reviewing bodies below are not
supported by evidence or vitiated by fraud, imposition or
collusion; that the procedure which led to the findings is irregular;
that palpable errors were committed; or that a grave abuse of
discretion, arbitrariness, or capriciousness is manifest. With
respect to the core issue of whether lying is present in this case,
all investigating and reviewing bodies are in consonance in holding
that Cadet 1 CL Cudia in truth and in fact lied.
For purposes of emphasis though, We shall supplement some
points.
As succinctly worded, the Honor Code of the Cadet Corps Armed
Forces of the Philippines (CCAFP) states: "We, the Cadets, do not
lie, cheat, steal, nor tolerate among us those who do. "
The First Tenet of the Honor-Code is "We do not lie. " Cadets
violate the Honor Code by lying if they make an oral or written
statement which is contrary to what is true or use doubtful
information with the intent to deceive or mislead.205 It is expected
that every cadet's word is accepted without challenge on its
truthfulness; that it is true without qualification; and that the
cadets must answer directly, completely and truthfully even
though the answer may result in punitive action under the CCPB
and CCAFPR.206
To refresh, in his Explanation of Report dated December 8, 2013,
Cadet 1 CL Cudia justified that: "I came directly from OR432
Class. We were dismissed a bit late by our instructor Sir."
Subsequently, in his Request for Reconsideration of Meted
Punishment to Maj. Leander, he reasoned out as follows:
I strongly believe that I am not in control of the circumstances,
our 4th period class ended 1500H and our 5th period class, which
is ENG412, started 1500H also. Immediately after 4t period class,
I went to my next class without any intention of being late Sir.207
In this case, the Court agrees with respondents that Cadet 1 CL
Cudia committed quibbling; hence, he lied in violation of the
Honor Code.
Following an Honor Reference Handbook, the term "Quibbling" has
been defined in one U.S. case as follows:
A person can easily create a false impression in the mind of his
listener by cleverly wording what he says, omitting relevant facts,
or telling a partial truth. When he knowingly does so with the
intent to deceive or mislead, he is quibbling. Because it is an
intentional deception, quibbling is a form of lying.208
The above definition can be applied in the instant case. Here,
instead of directly and completely telling the cause of his being
late in the ENG412 class of Prof. Berong, Cadet 1 CL Cudia chose
to omit relevant facts, thereby, telling a half-truth.
The two elements that must be presented for a cadet to have
committed an honor violation are:
1. The act and/or omission, and
2. The intent pertinent to it.
Intent does not only refer to the intent to violate the Honor Code,
but intent to commit or omit the act itself.209
The basic questions a cadet must always seek to answer
unequivocally are:
1. Do I intend to deceive?
2. Do I intend to take undue advantage?
If a cadet can answer NO to BOTH questions, he or she is doing
the honorable thing.210
Intent, being a state of mind, is rarely susceptible of direct proof,
but must ordinarily be inferred from the facts, and therefore, can
only be proved by unguarded expressions, conduct and
circumstances generally.211 In this case, Cadet 1 CL Cudia's intent
to deceive is manifested from the very act of capitalizing on the
use of the words "dismiss" and "class." The truth of the matter is
that the ordinary usage of these two terms, in the context of an
educational institution, does not correspond to what Cadet 1 CL
Cudia is trying to make it appear. In that sense, the words are not
generic and have definite and precise meaning.
By no stretch of the imagination can Cadets 1 CL Cudia, Miranda,
Arcangel, and Narciso already constitute a "class." The Court
cannot agree that such term includes "every transaction and
communication a teacher does with her students." Clearly, it does
not take too much intelligence to conclude that Cadet 1 CL Cudia
should have been accurate by pinpointing who were with him
when he was late in the next class. His deceptive explanation is
made more obvious when compared with what Cadets 1 CL
Archangel and Narciso wrote in their DR explanation, which was:
"We approached our instructor after our class."212
Further, it is unimportant whether the time of dismissal on
November 14, 2013 was five or fifteen minutes ahead of the
scheduled end of class. Worth noting is that even Dr. Costales,
who stood as a witness for Cadet 1 CL Cudia, consistently
admitted before the HC, the Fact-Finding Board/Investigating
Body, and the CHR that he was already dismissed when he passed
his LE paper.213 During the hearing of the Board/Body, she also
declared that she merely responded to his request to see the
results of the UE 1 and that she had reservations on the phrases
"under my instruction" and "dismissed a bit late" used in his letter
of explanation to the HC. In addition, Dr. Costales manifested her
view before the CHR that the act of Cadet 1 CL Cudia of inquiring
about his grade outside their classroom after he submitted his LE
paper is not part of the class time because the consultation, being
cadet-initiated, is voluntary.214 Assuming, for the sake of
argument, that a new business was initiated by Dr. Costales when
Cadet 1 CL Cudia was asked to stay and wait for the section
grade, still, this does not acquit him. Given such situation, a
responsible cadet who is fully aware of the time constraint has the
last say, that is, to politely decline the invitation and immediately
go to the next class. This was not done by Cadet 1 CL Cudia.
Thus, it cannot be said that he already lost control over the
circumstances.
It is apparent, therefore, that Cadet 1 CL Cudia cunningly chose
words which led to confusion in the minds of respondents and
eventually commenced the HC inquiry. His case is not just a
matter of semantics and a product of plain and simple inaccuracy.
There is manipulation of facts and presentation of untruthful
explanation constitutive of Honor Code violation.
Evidence of prior good conduct cannot clear Cadet 1 CL Cudia ..
While his Transcript of Records (TOR) may reflect not only his
outstanding academic performance but his excellent grade in
subjects on Conduct during his four-year stay in the PMA,215 it
does not necessarily follow that he is innocent of the offense
charged. It is enough to say that "evidence that one did or did not
do a certain thing at one time is not admissible to prove that he
did or did not do the same or similar thing at another
time."216 While the TOR may be received to prove his identity or
habit as an exceptional PMA student, it does not show his specific
intent, plan, or scheme as cadet accused of committing a specific
Honor Code violation.
Dismissal from the PMA as unjust and cruel punishment
Respondents insist that violation of the Honor Code warrants
separation of the guilty cadet from the cadet corps. Under the
Cadet Corps Armed Forces of the Philippines Regulation (CCAFPR),
a violation of the Cadet Honor Code is considered Grave (Class 1)
delinquency which merits a recommendation for a cadet's
dismissal from the PMA Superintendent. The same is likewise clear
from the Honor Code and Honor System Handbook. Cadet 1 CL
Cudia is, therefore, presumed to know that the Honor Code does
not accommodate a gradation or degree of offenses. There is no
difference between a little lie and a huge falsehood. Respondents
emphasize that the Honor Code has always been considered as an
absolute yardstick against which cadets have measured
themselves ever since the PMA began and that the Honor Code
and System seek to assure that only those who are able to meet
the high standards of integrity and honor are produced by the
PMA. As held in Andrews, it is constitutionally permissible for the
military "to set and enforce uncommonly high standards of
conduct and ethics. " Thus, in violating the Honor Code, Cadet 1
CL Cudia forfeits his privilege to graduate from the PMA.
On their part, petitioners concede that if it is proven that a cadet
breached the Honor Code, the offense warrants his or her
dismissal since such a policy may be the only means to maintain
and uphold the spirit of integrity in the military.217 They maintain
though that in Cadet 1 CL Cudia's case there is no need to
distinguish between a "little lie" and a "huge falsehood" since he
did not lie at all. Absent any intent to deceive and to take undue
advantage, the penalty imposed on him is considered as unjust
and cruel. Under the circumstances obtaining in this case, the
penalty of dismissal is not commensurate to the fact that he is a
graduating cadet with honors and what he allegedly committed
does not amount to an academic deficiency or an intentional and
flagrant violation of the PMA non-academic rules and regulations.
Citing Non, petitioners argue that the penalty imposed must be
proportionate to the offense. Further, lsabelo, Jr. is squarely
applicable to the facts of the case. Cadet 1 CL Cudia was deprived
of his right to education, the only means by which he may have a
secure life and future.
Considering Our finding that Cadet 1 CL Cudia in truth and in fact
lied and his acceptance that violation of the Honor Code warrants
the ultimate penalty of dismissal from the PMA, there is actually
no more dispute to resolve. Indeed, the sanction is clearly set
forth and Cadet 1 CL Cudia, by contract, risked this when he
entered the Academy.218 We adopt the ruling in
Andrews219 wherein it was held that, while the penalty is severe, it
is nevertheless reasonable and not arbitrary, and, therefore, not
in violation of due process. It quoted the disposition of the district
court, thus:
The fact that a cadet will be separated from the Academy upon a
finding that he has violated the Honor Code is known to all cadets
even prior to the beginning of their careers there. The finding of a
Code violation by hypothesis includes a finding of scienter on the
part of the offender. While separation is admittedly a drastic and
tragic consequence of a cadet's transgression, it is not an
unconstitutionally arbitrary one, but rather a reasonable albeit
severe method of preventing men who have suffered ethical
lapses from becoming career officers. That a policy of admonitions
or lesser penalties for single violations might be more
compassionate --or even more effective in achieving the intended
result --is quite immaterial to the question of whether the harsher
penalty violates due process.220
Nature of the CHR Findings
Petitioners contend that the PMA turned a blind eye on the CHR's
recommendations. The CHR, they note, is a constitutional body
mandated by the 1987 Constitution to investigate all forms of
human rights violations involving civil and political rights, and to
conduct investigative monitoring of economic, social, and cultural
rights, particularly of vulnerable sectors of society. Further, it was
contended that the results of CHR's investigation and
recommendations are so persuasive that this Court, on several
occasions like in the cases of Cruz v. Sec. of Environment &
Natural Resources221 and Ang Ladlad LGBT Party v. Commission
on Elections,222 gave its findings serious consideration. It is not,
therefore, too late for the Court to hear what an independent and
unbiased fact-finding body has to say on the case.
In opposition, respondents assert that Simon, Jr. v. Commission
on Human Rights223 ruled that the CHR is merely a
recommendatory body that is not empowered to arrive at a
conclusive determination of any controversy.
We are in accord with respondents.
The findings of fact and the conclusions of law of the CHR are
merely recommendatory and, therefore, not binding to this Court.
The reason is that the CHR's constitutional mandate extends only
to the investigation of all forms of human rights violations
involving civil and political rights.224 As held in Cariño v.
Commission on Human Rights225 and a number of subsequent
cases,226 the CHR is only a fact-finding body, not a court of justice
or a quasi-judicial agency. It is not empowered to adjudicate
claims on the merits or settle actual case or controversies. The
power to investigate is not the same as adjudication:
The most that may be conceded to the Commission in the way of
adjudicative power is that it may investigate, i.e., receive
evidence and make findings of fact as regards claimed human
rights violations involving civil and political rights. But fact-finding
is not adjudication, and cannot be likened to the judicial function
of a court of justice, or even a quasi-judicial agency or official. The
function of receiving evidence and ascertaining therefrom the
facts of a controversy is not a judicial function, properly speaking.
To be considered such, the faculty of receiving evidence and
making factual conclusions in a controversy must be accompanied
by the authority of applying the law to those factual conclusions to
the end that the controversy may be decided or determined
authoritatively, finally and definitively, subject to such appeals or
modes of review as may be provided by law. This function, to
repeat, the Commission does not have.
xxxx
[i]t cannot try and decide cases (or hear and determine causes)
as courts of justice, or even quasi-judicial bodies do. To
investigate is not to adjudicate or adjudge. Whether in the popular
or the technical sense, these terms have well understood and
quite distinct meanings.
"Investigate, "commonly understood, means to examine, explore,
inquire or delve or probe into, research on, study. The dictionary
definition of "investigate" is "to observe or study closely: inquire
into systematically: "to search or inquire into: x x x to subject to
an official probe x x x: to conduct an official inquiry;" The purpose
of investigation, of course, is to discover, to find out, to learn,
obtain information. Nowhere included or intimated is the notion of
settling, deciding or resolving a controversy involved in the facts
inquired into by application of the law to the facts established by
the inquiry.
The legal meaning of "investigate" is essentially the same: "(t)o
follow up step by step by patient inquiry or observation. To trace
or track; to search into; to examine and inquire into with care and
accuracy; to find out by careful inquisition; examination; the
taking of evidence; a legal inquiry;" "to inquire; to make an
investigation," "investigation" being in turn described as "(a)n
administrative function, the exercise of which ordinarily does not
require a hearing. 2 Am J2d Adm L Sec. 257; xx x an inquiry,
judicial or otherwise, for the discovery and collection of facts
concerning a certain matter or matters."
"Adjudicate," commonly or popularly understood, means to
adjudge, arbitrate, judge, decide, determine, resolve, rule on,
settle. The dictionary defines the term as "to settle finally (the
rights and duties of the parties to a court case) on the merits of
issues raised: xx to pass judgment on: settle judicially: x x x act
as judge." And "adjudge" means "to decide or rule upon as a
judge or with judicial or quasi-judicial powers: xx to award or
grant judicially in a case of controversy x x x."
In the legal sense, "adjudicate" means: "To settle in the exercise
of judicial authority.1âwphi1 To determine finally. Synonymous
with adjudge in its strictest sense;" and "adjudge" means: "To
pass on judicially, to decide, settle or decree, or to sentence or
condemn. xx Implies a judicial determination of a fact, and the
entry of a judgment. "226
All told, petitioners are not entitled to moral and exemplary
damages in accordance with Articles 19, 2217, 2219 and 2229 of
the Civil Code. The dismissal of Cadet 1 CL Cudia from the PMA
did not effectively deprive him of a future. Cliche though it may
sound, being a PMA graduate is not the "be-all and end-all" of his
existence. A cadet separated from the PMA may still continue to
pursue military or civilian career elsewhere without suffering the
stigma attached to his or her dismissal. For one, as suggested by
respondents, DND-AFP Circular No. 13, dated July 15, 1991, on
the enlistment and reenlistment in the APP Regular Force,
provides under Section 14 (b) thereof that priority shall be given
to, among others, the ex-PMA or PAFFFS cadets.227 If the positions
open does not appeal to his interest for being way below the rank
he could have achieved as a PMA graduate, Cadet 1 CL Cudia
could still practice other equally noble profession or calling that is
best suited to his credentials, competence, and potential.
Definitely, nobody can deprive him of that choice.
WHEREFORE, the Petition is DENIED. The dismissal of Cadet First
Class Aldrin Jeff P. Cudia from the Philippine Military Academy is
hereby AFFIRMED. No costs.
SO ORDERED.

G.R. No. 115455 August 25, 1994
ARTURO M. TOLENTINO, petitioner,
vs.
THE SECRETARY OF FINANCE and THE COMMISSIONER OF
INTERNAL REVENUE, respondents.
G.R. No. 115525 August 25, 1994
JUAN T. DAVID, petitioner,
vs.
TEOFISTO T. GUINGONA, JR., as Executive Secretary;
ROBERTO DE OCAMPO, as Secretary of Finance; LIWAYWAY
VINZONS-CHATO, as Commissioner of Internal Revenue;
and their AUTHORIZED AGENTS OR
REPRESENTATIVES, respondents.
G.R. No. 115543 August 25, 1994
RAUL S. ROCO and the INTEGRATED BAR OF THE
PHILIPPINES, petitioners,
vs.
THE SECRETARY OF THE DEPARTMENT OF FINANCE; THE
COMMISSIONERS OF THE BUREAU OF INTERNAL REVENUE
AND BUREAU OF CUSTOMS, respondents.
G.R. No. 115544 August 25, 1994
PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO.,
INC.; PUBLISHING CORPORATION; PHILIPPINE
JOURNALISTS, INC.; JOSE L. PAVIA; and OFELIA L.
DIMALANTA, petitioners,
vs.
HON. LIWAYWAY V. CHATO, in her capacity as
Commissioner of Internal Revenue; HON. TEOFISTO T.
GUINGONA, JR., in his capacity as Executive Secretary; and
HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary
of Finance, respondents.
G.R. No. 115754 August 25, 1994
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS,
INC., (CREBA), petitioner,
vs.
THE COMMISSIONER OF INTERNAL REVENUE, respondent.
G.R. No. 115781 August 25, 1994
KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS,
ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO,
EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE,
CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO,
RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S.
DOROMAL, MOVEMENT OF ATTORNEYS FOR
BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.
("MABINI"), FREEDOM FROM DEBT COALITION, INC.,
PHILIPPINE BIBLE SOCIETY, INC., and WIGBERTO
TAÑADA, petitioners,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE,
THE COMMISSIONER OF INTERNAL REVENUE and THE
COMMISSIONER OF CUSTOMS, respondents.
G.R. No. 115852 August 25, 1994
PHILIPPINE AIRLINES, INC., petitioner,
vs.
THE SECRETARY OF FINANCE, and COMMISSIONER OF
INTERNAL REVENUE, respondents.
G.R. No. 115873 August 25, 1994
COOPERATIVE UNION OF THE PHILIPPINES, petitioners,
vs.
HON. LIWAYWAY V. CHATO, in her capacity as the
Commissioner of Internal Revenue, HON. TEOFISTO T.
GUINGONA, JR., in his capacity as Executive Secretary, and
HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary
of Finance, respondents.
G.R. No. 115931 August 25, 1994
PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION,
INC., and ASSOCIATION OF PHILIPPINE BOOK-
SELLERS, petitioners,
vs.
HON. ROBERTO B. DE OCAMPO, as the Secretary of Finance;
HON. LIWAYWAY V. CHATO, as the Commissioner of
Internal Revenue and HON. GUILLERMO PARAYNO, JR., in
his capacity as the Commissioner of Customs, respondents.
Arturo M. Tolentino for and in his behalf.
Donna Celeste D. Feliciano and Juan T. David for petitioners in
G.R. No. 115525.
Roco, Bunag, Kapunan, Migallos and Jardeleza for petitioner R.S.
Roco.
Villaranza and Cruz for petitioners in G.R. No. 115544.
Carlos A. Raneses and Manuel M. Serrano for petitioner in G.R.
No. 115754.
Salonga, Hernandez & Allado for Freedon From Debts Coalition,
Inc. & Phil. Bible Society.
Estelito P. Mendoza for petitioner in G.R. No. 115852.
Panganiban, Benitez, Parlade, Africa & Barinaga Law Offices for
petitioners in G.R. No. 115873.
R.B. Rodriguez & Associates for petitioners in G.R. No. 115931.
Reve A.V. Saguisag for MABINI.
MENDOZA, J.:
The value-added tax (VAT) is levied on the sale, barter or
exchange of goods and properties as well as on the sale or
exchange of services. It is equivalent to 10% of the gross selling
price or gross value in money of goods or properties sold,
bartered or exchanged or of the gross receipts from the sale or
exchange of services. Republic Act No. 7716 seeks to widen the
tax base of the existing VAT system and enhance its
administration by amending the National Internal Revenue Code.
These are various suits for certiorari and prohibition, challenging
the constitutionality of Republic Act No. 7716 on various grounds
summarized in the resolution of July 6, 1994 of this Court, as
follows:
I. Procedural Issues:
A. Does Republic Act No. 7716 violate Art. VI, § 24
of the Constitution?
B. Does it violate Art. VI, § 26(2) of the
Constitution?
C. What is the extent of the power of the Bicameral
Conference Committee?
II. Substantive Issues:
A. Does the law violate the following provisions in
the Bill of Rights (Art. III)?
1. §1
2. § 4
3. § 5
4. § 10
 B. Does the law violate the following other provisions
of the Constitution?
1. Art. VI, § 28(1)
2. Art. VI, § 28(3)
These questions will be dealt in the order they are stated above.
As will presently be explained not all of these questions are
judicially cognizable, because not all provisions of the Constitution
are self executing and, therefore, judicially enforceable. The other
departments of the government are equally charged with the
enforcement of the Constitution, especially the provisions relating
to them.
I. PROCEDURAL ISSUES
The contention of petitioners is that in enacting Republic Act No.
7716, or the Expanded Value-Added Tax Law, Congress violated
the Constitution because, although H. No. 11197 had originated in
the House of Representatives, it was not passed by the Senate but
was simply consolidated with the Senate version (S. No. 1630) in
the Conference Committee to produce the bill which the President
signed into law. The following provisions of the Constitution are
cited in support of the proposition that because Republic Act No.
7716 was passed in this manner, it did not originate in the House
of Representatives and it has not thereby become a law:
Art. VI, § 24: All appropriation, revenue or tariff
bills, bills authorizing increase of the public debt,
bills of local application, and private bills shall
originate exclusively in the House of
Representatives, but the Senate may propose or
concur with amendments.
Id., § 26(2): No bill passed by either House shall
become a law unless it has passed three readings on
separate days, and printed copies thereof in its final
form have been distributed to its Members three
days before its passage, except when the President
certifies to the necessity of its immediate enactment
to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be
allowed, and the vote thereon shall be taken
immediately thereafter, and
the yeas and nays entered in the Journal.
It appears that on various dates between July 22, 1992 and
August 31, 1993, several bills 1 were introduced in the House of
Representatives seeking to amend certain provisions of the
National Internal Revenue Code relative to the value-added tax or
VAT. These bills were referred to the House Ways and Means
Committee which recommended for approval a substitute
measure, H. No. 11197, entitled
AN ACT RESTRUCTURING THE VALUE-ADDED TAX
(VAT) SYSTEM TO WIDEN ITS TAX BASE AND
ENHANCE ITS ADMINISTRATION, AMENDING FOR
THESE PURPOSES SECTIONS 99, 100, 102, 103,
104, 105, 106, 107, 108 AND 110 OF TITLE IV, 112,
115 AND 116 OF TITLE V, AND 236, 237 AND 238
OF TITLE IX, AND REPEALING SECTIONS 113 AND
114 OF TITLE V, ALL OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED
The bill (H. No. 11197) was considered on second reading starting
November 6, 1993 and, on November 17, 1993, it was approved
by the House of Representatives after third and final reading.
It was sent to the Senate on November 23, 1993 and later
referred by that body to its Committee on Ways and Means.
On February 7, 1994, the Senate Committee submitted its report
recommending approval of S. No. 1630, entitled
AN ACT RESTRUCTURING THE VALUE-ADDED TAX
(VAT) SYSTEM TO WIDEN ITS TAX BASE AND
ENHANCE ITS ADMINISTRATION, AMENDING FOR
THESE PURPOSES SECTIONS 99, 100, 102, 103,
104, 105, 107, 108, AND 110 OF TITLE IV, 112 OF
TITLE V, AND 236, 237, AND 238 OF TITLE IX, AND
REPEALING SECTIONS 113, 114 and 116 OF TITLE
V, ALL OF THE NATIONAL INTERNAL REVENUE
CODE, AS AMENDED, AND FOR OTHER PURPOSES
It was stated that the bill was being submitted "in substitution of
Senate Bill No. 1129, taking into consideration P.S. Res. No. 734
and H.B. No. 11197."
On February 8, 1994, the Senate began consideration of the bill
(S. No. 1630). It finished debates on the bill and approved it on
second reading on March 24, 1994. On the same day, it approved
the bill on third reading by the affirmative votes of 13 of its
members, with one abstention.
H. No. 11197 and its Senate version (S. No. 1630) were then
referred to a conference committee which, after meeting four
times (April 13, 19, 21 and 25, 1994), recommended that "House
Bill No. 11197, in consolidation with Senate Bill No. 1630, be
approved in accordance with the attached copy of the bill as
reconciled and approved by the conferees."
The Conference Committee bill, entitled "AN ACT RESTRUCTURING
THE VALUE-ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE
AND ENHANCING ITS ADMINISTRATION AND FOR THESE
PURPOSES AMENDING AND REPEALING THE RELEVANT
PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES," was thereafter approved
by the House of Representatives on April 27, 1994 and by the
Senate on May 2, 1994. The enrolled bill was then presented to
the President of the Philippines who, on May 5, 1994, signed it. It
became Republic Act No. 7716. On May 12, 1994, Republic Act
No. 7716 was published in two newspapers of general circulation
and, on May 28, 1994, it took effect, although its implementation
was suspended until June 30, 1994 to allow time for the
registration of business entities. It would have been enforced on
July 1, 1994 but its enforcement was stopped because the Court,
by the vote of 11 to 4 of its members, granted a temporary
restraining order on June 30, 1994.
First. Petitioners' contention is that Republic Act No. 7716 did not
"originate exclusively" in the House of Representatives as required
by Art. VI, §24 of the Constitution, because it is in fact the result
of the consolidation of two distinct bills, H. No. 11197 and S. No.
1630. In this connection, petitioners point out that although Art.
VI, SS 24 was adopted from the American Federal Constitution, 2 it
is notable in two respects: the verb "shall originate" is qualified in
the Philippine Constitution by the word "exclusively" and the
phrase "as on other bills" in the American version is omitted. This
means, according to them, that to be considered as having
originated in the House, Republic Act No. 7716 must retain the
essence of H. No. 11197.
This argument will not bear analysis. To begin with, it is not the
law — but the revenue bill — which is required by the Constitution
to "originate exclusively" in the House of Representatives. It is
important to emphasize this, because a bill originating in the
House may undergo such extensive changes in the Senate that
the result may be a rewriting of the whole. The possibility of a
third version by the conference committee will be discussed later.
At this point, what is important to note is that, as a result of the
Senate action, a distinct bill may be produced. To insist that a
revenue statute — and not only the bill which initiated the
legislative process culminating in the enactment of the law —
must substantially be the same as the House bill would be to deny
the Senate's power not only to "concur with amendments" but
also to "propose amendments." It would be to violate the
coequality of legislative power of the two houses of Congress and
in fact make the House superior to the Senate.
The contention that the constitutional design is to limit the
Senate's power in respect of revenue bills in order to compensate
for the grant to the Senate of the treaty-ratifying power 3 and
thereby equalize its powers and those of the House overlooks the
fact that the powers being compared are different. We are dealing
here with the legislative power which under the Constitution is
vested not in any particular chamber but in the Congress of the
Philippines, consisting of "a Senate and a House of
Representatives." 4 The exercise of the treaty-ratifying power is
not the exercise of legislative power. It is the exercise of a check
on the executive power. There is, therefore, no justification for
comparing the legislative powers of the House and of the Senate
on the basis of the possession of such nonlegislative power by the
Senate. The possession of a similar power by the U.S.
Senate 5 has never been thought of as giving it more legislative
powers than the House of Representatives.
In the United States, the validity of a provision (§ 37) imposing
an ad valorem tax based on the weight of vessels, which the U.S.
Senate had inserted in the Tariff Act of 1909, was upheld against
the claim that the provision was a revenue bill which originated in
the Senate in contravention of Art. I, § 7 of the U.S.
Constitution. 6 Nor is the power to amend limited to adding a
provision or two in a revenue bill emanating from the House. The
U.S. Senate has gone so far as changing the whole of bills
following the enacting clause and substituting its own versions. In
1883, for example, it struck out everything after the enacting
clause of a tariff bill and wrote in its place its own measure, and
the House subsequently accepted the amendment. The U.S.
Senate likewise added 847 amendments to what later became the
Payne-Aldrich Tariff Act of 1909; it dictated the schedules of the
Tariff Act of 1921; it rewrote an extensive tax revision bill in the
same year and recast most of the tariff bill of 1922. 7 Given, then,
the power of the Senate to propose amendments, the Senate can
propose its own version even with respect to bills which are
required by the Constitution to originate in the House.
It is insisted, however, that S. No. 1630 was passed not in
substitution of H. No. 11197 but of another Senate bill (S. No.
1129) earlier filed and that what the Senate did was merely to
"take [H. No. 11197] into consideration" in enacting S. No. 1630.
There is really no difference between the Senate preserving H. No.
11197 up to the enacting clause and then writing its own version
following the enacting clause (which, it would seem, petitioners
admit is an amendment by substitution), and, on the other hand,
separately presenting a bill of its own on the same subject matter.
In either case the result are two bills on the same subject.
Indeed, what the Constitution simply means is that the initiative
for filing revenue, tariff, or tax bills, bills authorizing an increase
of the public debt, private bills and bills of local application must
come from the House of Representatives on the theory that,
elected as they are from the districts, the members of the House
can be expected to be more sensitive to the local needs and
problems. On the other hand, the senators, who are elected at
large, are expected to approach the same problems from the
national perspective. Both views are thereby made to bear on the
enactment of such laws.
Nor does the Constitution prohibit the filing in the Senate of a
substitute bill in anticipation of its receipt of the bill from the
House, so long as action by the Senate as a body is withheld
pending receipt of the House bill. The Court cannot, therefore,
understand the alarm expressed over the fact that on March 1,
1993, eight months before the House passed H. No. 11197, S. No.
1129 had been filed in the Senate. After all it does not appear that
the Senate ever considered it. It was only after the Senate had
received H. No. 11197 on November 23, 1993 that the process of
legislation in respect of it began with the referral to the Senate
Committee on Ways and Means of H. No. 11197 and the
submission by the Committee on February 7, 1994 of S. No. 1630.
For that matter, if the question were simply the priority in the
time of filing of bills, the fact is that it was in the House that a bill
(H. No. 253) to amend the VAT law was first filed on July 22,
1992. Several other bills had been filed in the House before S. No.
1129 was filed in the Senate, and H. No. 11197 was only a
substitute of those earlier bills.
Second. Enough has been said to show that it was within the
power of the Senate to propose S. No. 1630. We now pass to the
next argument of petitioners that S. No. 1630 did not pass three
readings on separate days as required by the
Constitution 8 because the second and third readings were done on
the same day, March 24, 1994. But this was because on February
24, 1994 9 and again on March 22, 1994, 10 the President had
certified S. No. 1630 as urgent. The presidential certification
dispensed with the requirement not only of printing but also that
of reading the bill on separate days. The phrase "except when the
President certifies to the necessity of its immediate enactment,
etc." in Art. VI, § 26(2) qualifies the two stated conditions before
a bill can become a law: (i) the bill has passed three readings on
separate days and (ii) it has been printed in its final form and
distributed three days before it is finally approved.
In other words, the "unless" clause must be read in relation to the
"except" clause, because the two are really coordinate clauses of
the same sentence. To construe the "except" clause as simply
dispensing with the second requirement in the "unless" clause
(i.e., printing and distribution three days before final approval)
would not only violate the rules of grammar. It would also negate
the very premise of the "except" clause: the necessity of securing
the immediate enactment of a bill which is certified in order to
meet a public calamity or emergency. For if it is only the printing
that is dispensed with by presidential certification, the time saved
would be so negligible as to be of any use in insuring immediate
enactment. It may well be doubted whether doing away with the
necessity of printing and distributing copies of the bill three days
before the third reading would insure speedy enactment of a law
in the face of an emergency requiring the calling of a special
election for President and Vice-President. Under the Constitution
such a law is required to be made within seven days of the
convening of Congress in emergency session. 11
That upon the certification of a bill by the President the
requirement of three readings on separate days and of printing
and distribution can be dispensed with is supported by the weight
of legislative practice. For example, the bill defining
the certiorari jurisdiction of this Court which, in consolidation with
the Senate version, became Republic Act No. 5440, was passed on
second and third readings in the House of Representatives on the
same day (May 14, 1968) after the bill had been certified by the
President as urgent. 12
There is, therefore, no merit in the contention that presidential
certification dispenses only with the requirement for the printing
of the bill and its distribution three days before its passage but not
with the requirement of three readings on separate days, also.
It is nonetheless urged that the certification of the bill in this case
was invalid because there was no emergency, the condition stated
in the certification of a "growing budget deficit" not being an
unusual condition in this country.
It is noteworthy that no member of the Senate saw fit to
controvert the reality of the factual basis of the certification. To
the contrary, by passing S. No. 1630 on second and third readings
on March 24, 1994, the Senate accepted the President's
certification. Should such certification be now reviewed by this
Court, especially when no evidence has been shown that, because
S. No. 1630 was taken up on second and third readings on the
same day, the members of the Senate were deprived of the time
needed for the study of a vital piece of legislation?
The sufficiency of the factual basis of the suspension of the writ
of habeas corpus or declaration of martial law under Art. VII, §
18, or the existence of a national emergency justifying the
delegation of extraordinary powers to the President under Art. VI,
§ 23(2), is subject to judicial review because basic rights of
individuals may be at hazard. But the factual basis of presidential
certification of bills, which involves doing away with procedural
requirements designed to insure that bills are duly considered by
members of Congress, certainly should elicit a different standard
of review.
Petitioners also invite attention to the fact that the President
certified S. No. 1630 and not H. No. 11197. That is because S. No.
1630 was what the Senate was considering. When the matter was
before the House, the President likewise certified H. No. 9210 the
pending in the House.
Third. Finally it is contended that the bill which became Republic
Act No. 7716 is the bill which the Conference Committee prepared
by consolidating H. No. 11197 and S. No. 1630. It is claimed that
the Conference Committee report included provisions not found in
either the House bill or the Senate bill and that these provisions
were "surreptitiously" inserted by the Conference Committee.
Much is made of the fact that in the last two days of its session on
April 21 and 25, 1994 the Committee met behind closed doors.
We are not told, however, whether the provisions were not the
result of the give and take that often mark the proceedings of
conference committees.
Nor is there anything unusual or extraordinary about the fact that
the Conference Committee met in executive sessions. Often the
only way to reach agreement on conflicting provisions is to meet
behind closed doors, with only the conferees present. Otherwise,
no compromise is likely to be made. The Court is not about to
take the suggestion of a cabal or sinister motive attributed to the
conferees on the basis solely of their "secret meetings" on April 21
and 25, 1994, nor read anything into the incomplete remarks of
the members, marked in the transcript of stenographic notes by
ellipses. The incomplete sentences are probably due to the
stenographer's own limitations or to the incoherence that
sometimes characterize conversations. William Safire noted some
such lapses in recorded talks even by recent past Presidents of the
United States.
In any event, in the United States conference committees had
been customarily held in executive sessions with only the
conferees and their staffs in attendance. 13 Only in November 1975
was a new rule adopted requiring open sessions. Even then a
majority of either chamber's conferees may vote in public to close
the meetings. 14
As to the possibility of an entirely new bill emerging out of a
Conference Committee, it has been explained:
 Under congressional rules of procedure, conference
committees are not expected to make any material
change in the measure at issue, either by deleting
provisions to which both houses have already agreed
or by inserting new provisions. But this is a difficult
provision to enforce. Note the problem when one
house amends a proposal originating in either house
by striking out everything following the enacting
clause and substituting provisions which make it an
entirely new bill. The versions are now altogether
different, permitting a conference committee to draft
essentially a new bill. . . . 15
The result is a third version, which is considered an "amendment
in the nature of a substitute," the only requirement for which
being that the third version be germane to the subject of the
House and Senate bills. 16
Indeed, this Court recently held that it is within the power of a
conference committee to include in its report an entirely new
provision that is not found either in the House bill or in the Senate
bill. 17 If the committee can propose an amendment consisting of
one or two provisions, there is no reason why it cannot propose
several provisions, collectively considered as an "amendment in
the nature of a substitute," so long as such amendment is
germane to the subject of the bills before the committee. After all,
its report was not final but needed the approval of both houses of
Congress to become valid as an act of the legislative department.
The charge that in this case the Conference Committee acted as a
third legislative chamber is thus without any basis. 18
Nonetheless, it is argued that under the respective Rules of the
Senate and the House of Representatives a conference committee
can only act on the differing provisions of a Senate bill and a
House bill, and that contrary to these Rules the Conference
Committee inserted provisions not found in the bills submitted to
it. The following provisions are cited in support of this contention:
Rules of the Senate
Rule XII:
§ 26. In the event that the Senate does not agree
with the House of Representatives on the provision
of any bill or joint resolution, the differences shall be
settled by a conference committee of both
Houses which shall meet within ten days after their
composition.
The President shall designate the members of the
conference committee in accordance with
subparagraph (c), Section 3 of Rule III.
Each Conference Committee Report shall contain a
detailed and sufficiently explicit statement of the
changes in or amendments to the subject
measure, and shall be signed by the conferees.
The consideration of such report shall not be in order
unless the report has been filed with the Secretary
of the Senate and copies thereof have been
distributed to the Members.
(Emphasis added)
Rules of the House of Representatives
Rule XIV:
§ 85. Conference Committee Reports. — In the
event that the House does not agree with the Senate
on the amendments to any bill or joint
resolution, the differences may be settled by
conference committees of both Chambers.
The consideration of conference committee reports
shall always be in order, except when the journal is
being read, while the roll is being called or the House
is dividing on any question. Each of the pages of
such reports shall be signed by the
conferees. Each report shall contain a detailed,
sufficiently explicit statement of the changes in or
amendments to the subject measure.
The consideration of such report shall not be in order
unless copies thereof are distributed to the
Members: Provided, That in the last fifteen days of
 each session period it shall be deemed sufficient that
three copies of the report, signed as above provided,
are deposited in the office of the Secretary General.
(Emphasis added)
To be sure, nothing in the Rules limits a conference committee to
a consideration of conflicting provisions. But Rule XLIV, § 112 of
the Rules of the Senate is cited to the effect that "If there is no
Rule applicable to a specific case the precedents of the Legislative
Department of the Philippines shall be resorted to, and as a
supplement of these, the Rules contained in Jefferson's Manual."
The following is then quoted from the Jefferson's Manual:
The managers of a conference must confine
themselves to the differences committed to them. . .
and may not include subjects not within
disagreements, even though germane to a question
in issue.
Note that, according to Rule XLIX, § 112, in case there is no
specific rule applicable, resort must be to the legislative practice.
The Jefferson's Manual is resorted to only as supplement. It is
common place in Congress that conference committee reports
include new matters which, though germane, have not been
committed to the committee. This practice was admitted by
Senator Raul S. Roco, petitioner in G.R. No. 115543, during the
oral argument in these cases. Whatever, then, may be provided in
the Jefferson's Manual must be considered to have been modified
by the legislative practice. If a change is desired in the practice it
must be sought in Congress since this question is not covered by
any constitutional provision but is only an internal rule of each
house. Thus, Art. VI, § 16(3) of the Constitution provides that
"Each House may determine the rules of its proceedings. . . ."
This observation applies to the other contention that the Rules of
the two chambers were likewise disregarded in the preparation of
the Conference Committee Report because the Report did not
contain a "detailed and sufficiently explicit statement of changes
in, or amendments to, the subject measure." The Report used
brackets and capital letters to indicate the changes. This is a
standard practice in bill-drafting. We cannot say that in using
these marks and symbols the Committee violated the Rules of the
Senate and the House. Moreover, this Court is not the proper
forum for the enforcement of these internal Rules. To the
contrary, as we have already ruled, "parliamentary rules are
merely procedural and with their observance the courts have no
concern." 19 Our concern is with the procedural requirements of the
Constitution for the enactment of laws. As far as these
requirements are concerned, we are satisfied that they have been
faithfully observed in these cases.
Nor is there any reason for requiring that the Committee's Report
in these cases must have undergone three readings in each of the
two houses. If that be the case, there would be no end to
negotiation since each house may seek modifications of the
compromise bill. The nature of the bill, therefore, requires that it
be acted upon by each house on a "take it or leave it" basis, with
the only alternative that if it is not approved by both houses,
another conference committee must be appointed. But then again
the result would still be a compromise measure that may not be
wholly satisfying to both houses.
Art. VI, § 26(2) must, therefore, be construed as referring only to
bills introduced for the first time in either house of Congress, not
to the conference committee report. For if the purpose of requiring
three readings is to give members of Congress time to study bills,
it cannot be gainsaid that H. No. 11197 was passed in the House
after three readings; that in the Senate it was considered on first
reading and then referred to a committee of that body; that
although the Senate committee did not report out the House bill,
it submitted a version (S. No. 1630) which it had prepared by
"taking into consideration" the House bill; that for its part the
Conference Committee consolidated the two bills and prepared a
compromise version; that the Conference Committee Report was
thereafter approved by the House and the Senate, presumably
after appropriate study by their members. We cannot say that, as
a matter of fact, the members of Congress were not fully informed
of the provisions of the bill. The allegation that the Conference
Committee usurped the legislative power of Congress is, in our
view, without warrant in fact and in law.
Fourth. Whatever doubts there may be as to the formal validity of
Republic Act No. 7716 must be resolved in its favor. Our
cases 20 manifest firm adherence to the rule that an enrolled copy
of a bill is conclusive not only of its provisions but also of its due
enactment. Not even claims that a proposed constitutional
amendment was invalid because the requisite votes for its
approval had not been obtained 21 or that certain provisions of a
statute had been "smuggled" in the printing of the bill 22 have
moved or persuaded us to look behind the proceedings of a
coequal branch of the government. There is no reason now to
depart from this rule.
No claim is here made that the "enrolled bill" rule is absolute. In
fact in one case 23 we "went behind" an enrolled bill and consulted
the Journal to determine whether certain provisions of a statute
had been approved by the Senate in view of the fact that the
President of the Senate himself, who had signed the enrolled bill,
admitted a mistake and withdrew his signature, so that in effect
there was no longer an enrolled bill to consider.
But where allegations that the constitutional procedures for the
passage of bills have not been observed have no more basis than
another allegation that the Conference Committee
"surreptitiously" inserted provisions into a bill which it had
prepared, we should decline the invitation to go behind the
enrolled copy of the bill. To disregard the "enrolled bill" rule in
such cases would be to disregard the respect due the other two
departments of our government.
Fifth. An additional attack on the formal validity of Republic Act
No. 7716 is made by the Philippine Airlines, Inc., petitioner in G.R.
No. 11582, namely, that it violates Art. VI, § 26(1) which provides
that "Every bill passed by Congress shall embrace only one
subject which shall be expressed in the title thereof." It is
contended that neither H. No. 11197 nor S. No. 1630 provided for
removal of exemption of PAL transactions from the payment of the
VAT and that this was made only in the Conference Committee bill
which became Republic Act No. 7716 without reflecting this fact in
its title.
The title of Republic Act No. 7716 is:
AN ACT RESTRUCTURING THE VALUE- ADDED TAX
(VAT) SYSTEM, WIDENING ITS TAX BASE AND
ENHANCING ITS ADMINISTRATION, AND FOR THESE
PURPOSES AMENDING AND REPEALING THE
RELEVANT PROVISIONS OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED, AND FOR
OTHER PURPOSES.
Among the provisions of the NIRC amended is § 103, which
originally read:
§ 103. Exempt transactions. — The following shall be
exempt from the value-added tax:
....
(q) Transactions which are exempt under special
laws or international agreements to which the
Philippines is a signatory. Among the transactions
exempted from the VAT were those of PAL because it
was exempted under its franchise (P.D. No. 1590)
from the payment of all "other taxes . . . now or in
the near future," in consideration of the payment by
it either of the corporate income tax or a franchise
tax of 2%.
As a result of its amendment by Republic Act No. 7716, § 103 of
the NIRC now provides:
§ 103. Exempt transactions. — The following shall be
exempt from the value-added tax:
....
(q) Transactions which are exempt under special
laws, except those granted under Presidential Decree
Nos. 66, 529, 972, 1491, 1590. . . .
The effect of the amendment is to remove the exemption granted
to PAL, as far as the VAT is concerned.
The question is whether this amendment of § 103 of the NIRC is
fairly embraced in the title of Republic Act No. 7716, although no
mention is made therein of P.D. No. 1590 as among those which
the statute amends. We think it is, since the title states that the
purpose of the statute is to expand the VAT system, and one way
of doing this is to widen its base by withdrawing some of the
exemptions granted before. To insist that P.D. No. 1590 be
mentioned in the title of the law, in addition to § 103 of the NIRC,
in which it is specifically referred to, would be to insist that the
title of a bill should be a complete index of its content.
The constitutional requirement that every bill passed by Congress
shall embrace only one subject which shall be expressed in its title
is intended to prevent surprise upon the members of Congress
and to inform the people of pending legislation so that, if they
wish to, they can be heard regarding it. If, in the case at bar,
petitioner did not know before that its exemption had been
withdrawn, it is not because of any defect in the title but perhaps
for the same reason other statutes, although published, pass
unnoticed until some event somehow calls attention to their
existence. Indeed, the title of Republic Act No. 7716 is not any
more general than the title of PAL's own franchise under P.D. No.
1590, and yet no mention is made of its tax exemption. The title
of P.D. No. 1590 is:
AN ACT GRANTING A NEW FRANCHISE TO
PHILIPPINE AIRLINES, INC. TO ESTABLISH,
OPERATE, AND MAINTAIN AIR-TRANSPORT
SERVICES IN THE PHILIPPINES AND BETWEEN THE
PHILIPPINES AND OTHER COUNTRIES.
The trend in our cases is to construe the constitutional
requirement in such a manner that courts do not unduly interfere
with the enactment of necessary legislation and to consider it
sufficient if the title expresses the general subject of the statute
and all its provisions are germane to the general subject thus
expressed. 24
It is further contended that amendment of petitioner's franchise
may only be made by special law, in view of § 24 of P.D. No. 1590
which provides:
This franchise, as amended, or any section or
provision hereof may only be modified, amended, or
repealed expressly by a special law or decree that
shall specifically modify, amend, or repeal this
franchise or any section or provision thereof.
This provision is evidently intended to prevent the amendment of
the franchise by mere implication resulting from the enactment of
a later inconsistent statute, in consideration of the fact that a
franchise is a contract which can be altered only by consent of the
parties. Thus in Manila Railroad Co. v.
Rafferty, 25 it was held that an Act of the U.S. Congress, which
provided for the payment of tax on certain goods and articles
imported into the Philippines, did not amend the franchise of
plaintiff, which exempted it from all taxes except those mentioned
in its franchise. It was held that a special law cannot be amended
by a general law.
In contrast, in the case at bar, Republic Act No. 7716 expressly
amends PAL's franchise (P.D. No. 1590) by specifically excepting
from the grant of exemptions from the VAT PAL's exemption under
P.D. No. 1590. This is within the power of Congress to do under
Art. XII, § 11 of the Constitution, which provides that the grant of
a franchise for the operation of a public utility is subject to
amendment, alteration or repeal by Congress when the common
good so requires.
II. SUBSTANTIVE ISSUES
A. Claims of Press
Freedom, Freedom of
Thought and Religious
Freedom
The Philippine Press Institute (PPI), petitioner in G.R. No. 115544,
is a nonprofit organization of newspaper publishers established for
the improvement of journalism in the Philippines. On the other
hand, petitioner in G.R. No. 115781, the Philippine Bible Society
(PBS), is a nonprofit organization engaged in the printing and
distribution of bibles and other religious articles. Both petitioners
claim violations of their rights under § § 4 and 5 of the Bill of
Rights as a result of the enactment of the VAT Law.
The PPI questions the law insofar as it has withdrawn the
exemption previously granted to the press under § 103 (f) of the
NIRC. Although the exemption was subsequently restored by
administrative regulation with respect to the circulation income of
newspapers, the PPI presses its claim because of the possibility
that the exemption may still be removed by mere revocation of
the regulation of the Secretary of Finance. On the other hand, the
PBS goes so far as to question the Secretary's power to grant
exemption for two reasons: (1) The Secretary of Finance has no
power to grant tax exemption because this is vested in Congress
and requires for its exercise the vote of a majority of all its
members 26 and (2) the Secretary's duty is to execute the law.
§ 103 of the NIRC contains a list of transactions exempted from
VAT. Among the transactions previously granted exemption were:
(f) Printing, publication, importation or sale of books
and any newspaper, magazine, review, or bulletin
which appears at regular intervals with fixed prices
for subscription and sale and which is devoted
principally to the publication of advertisements.
Republic Act No. 7716 amended § 103 by deleting ¶ (f) with the
result that print media became subject to the VAT with respect to
all aspects of their operations. Later, however, based on a
memorandum of the Secretary of Justice, respondent Secretary of
Finance issued Revenue Regulations No. 11-94, dated June 27,
1994, exempting the "circulation income of print media pursuant
to § 4 Article III of the 1987 Philippine Constitution guaranteeing
against abridgment of freedom of the press, among others." The
exemption of "circulation income" has left income from
advertisements still subject to the VAT.
It is unnecessary to pass upon the contention that the exemption
granted is beyond the authority of the Secretary of Finance to
give, in view of PPI's contention that even with the exemption of
the circulation revenue of print media there is still an
unconstitutional abridgment of press freedom because of the
imposition of the VAT on the gross receipts of newspapers from
advertisements and on their acquisition of paper, ink and services
for publication. Even on the assumption that no exemption has
effectively been granted to print media transactions, we find no
violation of press freedom in these cases.
To be sure, we are not dealing here with a statute that on its
face operates in the area of press freedom. The PPI's claim is
simply that, as applied to newspapers, the law abridges press
freedom. Even with due recognition of its high estate and its
importance in a democratic society, however, the press is not
immune from general regulation by the State. It has been held:
The publisher of a newspaper has no immunity from
the application of general laws. He has no special
privilege to invade the rights and liberties of others.
He must answer for libel. He may be punished for
contempt of court. . . . Like others, he must pay
equitable and nondiscriminatory taxes on his
business. . . . 27
The PPI does not dispute this point, either.
What it contends is that by withdrawing the exemption previously
granted to print media transactions involving printing, publication,
importation or sale of newspapers, Republic Act No. 7716 has
singled out the press for discriminatory treatment and that within
the class of mass media the law discriminates against print media
by giving broadcast media favored treatment. We have carefully
examined this argument, but we are unable to find a differential
treatment of the press by the law, much less any censorial
motivation for its enactment. If the press is now required to pay a
value-added tax on its transactions, it is not because it is being
singled out, much less targeted, for special treatment but only
because of the removal of the exemption previously granted to it
by law. The withdrawal of exemption is all that is involved in these
cases. Other transactions, likewise previously granted exemption,
have been delisted as part of the scheme to expand the base and
the scope of the VAT system. The law would perhaps be open to
the charge of discriminatory treatment if the only privilege
withdrawn had been that granted to the press. But that is not the
case.
The situation in the case at bar is indeed a far cry from those cited
by the PPI in support of its claim that Republic Act No. 7716
subjects the press to discriminatory taxation. In the cases cited,
the discriminatory purpose was clear either from the background
of the law or from its operation. For example, in Grosjean v.
American Press Co., 28 the law imposed a license tax equivalent to
2% of the gross receipts derived from advertisements only on
newspapers which had a circulation of more than 20,000 copies
per week. Because the tax was not based on the volume of
advertisement alone but was measured by the extent of its
circulation as well, the law applied only to the thirteen large
newspapers in Louisiana, leaving untaxed four papers with
circulation of only slightly less than 20,000 copies a week and 120
weekly newspapers which were in serious competition with the
thirteen newspapers in question. It was well known that the
thirteen newspapers had been critical of Senator Huey Long, and
the Long-dominated legislature of Louisiana respondent by taxing
what Long described as the "lying newspapers" by imposing on
them "a tax on lying." The effect of the tax was to curtail both
their revenue and their circulation. As the U.S. Supreme Court
noted, the tax was "a deliberate and calculated device in the guise
of a tax to limit the circulation of information to which the public is
entitled in virtue of the constitutional guaranties." 29 The case is a
classic illustration of the warning that the power to tax is the
power to destroy.
In the other case 30 invoked by the PPI, the press was also found
to have been singled out because everything was exempt from the
"use tax" on ink and paper, except the press. Minnesota imposed
a tax on the sales of goods in that state. To protect the sales tax,
it enacted a complementary tax on the privilege of "using, storing
or consuming in that state tangible personal property" by
eliminating the residents' incentive to get goods from outside
states where the sales tax might be lower. The Minnesota Star
Tribune was exempted from both taxes from 1967 to 1971. In
1971, however, the state legislature amended the tax scheme by
imposing the "use tax" on the cost of paper and ink used for
publication. The law was held to have singled out the press
because (1) there was no reason for imposing the "use tax" since
the press was exempt from the sales tax and (2) the "use tax"
was laid on an "intermediate transaction rather than the ultimate
retail sale." Minnesota had a heavy burden of justifying the
differential treatment and it failed to do so. In addition, the U.S.
Supreme Court found the law to be discriminatory because the
legislature, by again amending the law so as to exempt the first
$100,000 of paper and ink used, further narrowed the coverage of
the tax so that "only a handful of publishers pay any tax at all and
even fewer pay any significant amount of tax." 31 The
discriminatory purpose was thus very clear.
More recently, in Arkansas Writers' Project, Inc. v. Ragland, 32 it
was held that a law which taxed general interest magazines but
not newspapers and religious, professional, trade and sports
journals was discriminatory because while the tax did not single
out the press as a whole, it targeted a small group within the
press. What is more, by differentiating on the basis of contents
(i.e., between general interest and special interests such as
religion or sports) the law became "entirely incompatible with the
First Amendment's guarantee of freedom of the press."
These cases come down to this: that unless justified, the
differential treatment of the press creates risks of suppression of
expression. In contrast, in the cases at bar, the statute applies to
a wide range of goods and services. The argument that, by
imposing the VAT only on print media whose gross sales exceeds
P480,000 but not more than P750,000, the law discriminates 33 is
without merit since it has not been shown that as a result the
class subject to tax has been unreasonably narrowed. The fact is
that this limitation does not apply to the press along but to all
sales. Nor is impermissible motive shown by the fact that print
media and broadcast media are treated differently. The press is
taxed on its transactions involving printing and publication, which
are different from the transactions of broadcast media. There is
thus a reasonable basis for the classification.
The cases canvassed, it must be stressed, eschew any suggestion
that "owners of newspapers are immune from any forms of
ordinary taxation." The license tax in the Grosjean case was
declared invalid because it was "one single in kind, with a long
history of hostile misuse against the freedom of the
press." 34 On the other hand, Minneapolis Star acknowledged that
"The First Amendment does not prohibit all regulation of the press
[and that] the States and the Federal Government can subject
newspapers to generally applicable economic regulations without
creating constitutional problems." 35
What has been said above also disposes of the allegations of the
PBS that the removal of the exemption of printing, publication or
importation of books and religious articles, as well as their printing
and publication, likewise violates freedom of thought and of
conscience. For as the U.S. Supreme Court unanimously held
in Jimmy Swaggart Ministries v. Board of Equalization, 36 the Free
Exercise of Religion Clause does not prohibit imposing a generally
applicable sales and use tax on the sale of religious materials by a
religious organization.
This brings us to the question whether the registration provision of
the law, 37 although of general applicability, nonetheless is invalid
when applied to the press because it lays a prior restraint on its
essential freedom. The case of American Bible Society v. City of
Manila 38 is cited by both the PBS and the PPI in support of their
contention that the law imposes censorship. There, this Court held
that an ordinance of the City of Manila, which imposed a license
fee on those engaged in the business of general merchandise,
could not be applied to the appellant's sale of bibles and other
religious literature. This Court relied on Murdock v.
Pennsylvania, 39 in which it was held that, as a license fee is fixed
in amount and unrelated to the receipts of the taxpayer, the
license fee, when applied to a religious sect, was actually being
imposed as a condition for the exercise of the sect's right under
the Constitution. For that reason, it was held, the license fee
"restrains in advance those constitutional liberties of press and
religion and inevitably tends to suppress their exercise." 40
But, in this case, the fee in § 107, although a fixed amount
(P1,000), is not imposed for the exercise of a privilege but only
for the purpose of defraying part of the cost of registration. The
registration requirement is a central feature of the VAT system. It
is designed to provide a record of tax credits because any person
who is subject to the payment of the VAT pays an input tax, even
as he collects an output tax on sales made or services rendered.
The registration fee is thus a mere administrative fee, one not
imposed on the exercise of a privilege, much less a constitutional
right.
For the foregoing reasons, we find the attack on Republic Act No.
7716 on the ground that it offends the free speech, press and
freedom of religion guarantees of the Constitution to be without
merit. For the same reasons, we find the claim of the Philippine
Educational Publishers Association (PEPA) in G.R. No. 115931 that
the increase in the price of books and other educational materials
as a result of the VAT would violate the constitutional mandate to
the government to give priority to education, science and
technology (Art. II, § 17) to be untenable.
B. Claims of Regressivity,
Denial of Due Process,
Equal Protection, and
Impairment
of Contracts
There is basis for passing upon claims that on its face the statute
violates the guarantees of freedom of speech, press and religion.
The possible "chilling effect" which it may have on the essential
freedom of the mind and conscience and the need to assure that
the channels of communication are open and operating
importunately demand the exercise of this Court's power of
review.
There is, however, no justification for passing upon the claims that
the law also violates the rule that taxation must be progressive
and that it denies petitioners' right to due process and that equal
protection of the laws. The reason for this different treatment has
been cogently stated by an eminent authority on constitutional
law thus: "[W]hen freedom of the mind is imperiled by law, it is
freedom that commands a momentum of respect; when property
is imperiled it is the lawmakers' judgment that commands respect.
This dual standard may not precisely reverse the presumption of
constitutionality in civil liberties cases, but obviously it does set up
a hierarchy of values within the due process clause." 41
Indeed, the absence of threat of immediate harm makes the need
for judicial intervention less evident and underscores the essential
nature of petitioners' attack on the law on the grounds of
regressivity, denial of due process and equal protection and
impairment of contracts as a mere academic discussion of the
merits of the law. For the fact is that there have even been no
notices of assessments issued to petitioners and no
determinations at the administrative levels of their claims so as to
illuminate the actual operation of the law and enable us to reach
sound judgment regarding so fundamental questions as those
raised in these suits.
Thus, the broad argument against the VAT is that it is regressive
and that it violates the requirement that "The rule of taxation shall
be uniform and equitable [and] Congress shall evolve a
progressive system of taxation." 42 Petitioners in G.R. No. 115781
quote from a paper, entitled "VAT Policy Issues: Structure,
Regressivity, Inflation and Exports" by Alan A. Tait of the
International Monetary Fund, that "VAT payment by low-income
households will be a higher proportion of their incomes (and
expenditures) than payments by higher-income households. That
is, the VAT will be regressive." Petitioners contend that as a result
of the uniform 10% VAT, the tax on consumption goods of those
who are in the higher-income bracket, which before were taxed at
a rate higher than 10%, has been reduced, while basic
commodities, which before were taxed at rates ranging from 3%
to 5%, are now taxed at a higher rate.
Just as vigorously as it is asserted that the law is regressive, the
opposite claim is pressed by respondents that in fact it distributes
the tax burden to as many goods and services as possible
particularly to those which are within the reach of higher-income
groups, even as the law exempts basic goods and services. It is
thus equitable. The goods and properties subject to the VAT are
those used or consumed by higher-income groups. These include
real properties held primarily for sale to customers or held for
lease in the ordinary course of business, the right or privilege to
use industrial, commercial or scientific equipment, hotels,
restaurants and similar places, tourist buses, and the like. On the
other hand, small business establishments, with annual gross
sales of less than P500,000, are exempted. This, according to
respondents, removes from the coverage of the law some 30,000
business establishments. On the other hand, an occasional
paper 43 of the Center for Research and Communication cities a
NEDA study that the VAT has minimal impact on inflation and
income distribution and that while additional expenditure for the
lowest income class is only P301 or 1.49% a year, that for a
family earning P500,000 a year or more is P8,340 or 2.2%.
Lacking empirical data on which to base any conclusion regarding
these arguments, any discussion whether the VAT is regressive in
the sense that it will hit the "poor" and middle-income group in
society harder than it will the "rich," as the Cooperative Union of
the Philippines (CUP) claims in G.R. No. 115873, is largely an
academic exercise. On the other hand, the CUP's contention that
Congress' withdrawal of exemption of producers cooperatives,
marketing cooperatives, and service cooperatives, while
maintaining that granted to electric cooperatives, not only goes
against the constitutional policy to promote cooperatives as
instruments of social justice (Art. XII, § 15) but also denies such
cooperatives the equal protection of the law is actually a policy
argument. The legislature is not required to adhere to a policy of
"all or none" in choosing the subject of taxation. 44
Nor is the contention of the Chamber of Real Estate and Builders
Association (CREBA), petitioner in G.R. 115754, that the VAT will
reduce the mark up of its members by as much as 85% to 90%
any more concrete. It is a mere allegation. On the other hand, the
claim of the Philippine Press Institute, petitioner in G.R. No.
115544, that the VAT will drive some of its members out of
circulation because their profits from advertisements will not be
enough to pay for their tax liability, while purporting to be based
on the financial statements of the newspapers in question, still
falls short of the establishment of facts by evidence so necessary
for adjudicating the question whether the tax is oppressive and
confiscatory.
Indeed, regressivity is not a negative standard for courts to
enforce. What Congress is required by the Constitution to do is to
"evolve a progressive system of taxation." This is a directive to
Congress, just like the directive to it to give priority to the
enactment of laws for the enhancement of human dignity and the
reduction of social, economic and political inequalities (Art. XIII, §
1), or for the promotion of the right to "quality education" (Art.
XIV, § 1). These provisions are put in the Constitution as moral
incentives to legislation, not as judicially enforceable rights.
At all events, our 1988 decision in Kapatiran 45 should have laid to
rest the questions now raised against the VAT. There similar
arguments made against the original VAT Law (Executive Order
No. 273) were held to be hypothetical, with no more basis than
newspaper articles which this Court found to be "hearsay and
[without] evidentiary value." As Republic Act No. 7716 merely
expands the base of the VAT system and its coverage as provided
in the original VAT Law, further debate on the desirability and
wisdom of the law should have shifted to Congress.
Only slightly less abstract but nonetheless hypothetical is the
contention of CREBA that the imposition of the VAT on the sales
and leases of real estate by virtue of contracts entered into prior
to the effectivity of the law would violate the constitutional
provision that "No law impairing the obligation of contracts shall
be passed." It is enough to say that the parties to a contract
cannot, through the exercise of prophetic discernment, fetter the
exercise of the taxing power of the State. For not only are existing
laws read into contracts in order to fix obligations as between
parties, but the reservation of essential attributes of sovereign
power is also read into contracts as a basic postulate of the legal
order. The policy of protecting contracts against impairment
presupposes the maintenance of a government which retains
adequate authority to secure the peace and good order of
society. 46
In truth, the Contract Clause has never been thought as a
limitation on the exercise of the State's power of taxation save
only where a tax exemption has been granted for a valid
consideration. 47 Such is not the case of PAL in G.R. No. 115852,
and we do not understand it to make this claim. Rather, its
position, as discussed above, is that the removal of its tax
exemption cannot be made by a general, but only by a specific,
law.
The substantive issues raised in some of the cases are presented
in abstract, hypothetical form because of the lack of a concrete
record. We accept that this Court does not only adjudicate private
cases; that public actions by "non-Hohfeldian" 48 or ideological
plaintiffs are now cognizable provided they meet the standing
requirement of the Constitution; that under Art. VIII, § 1, ¶ 2 the
Court has a "special function" of vindicating constitutional rights.
Nonetheless the feeling cannot be escaped that we do not have
before us in these cases a fully developed factual record that
alone can impart to our adjudication the impact of actuality 49 to
insure that decision-making is informed and well grounded.
Needless to say, we do not have power to render advisory
opinions or even jurisdiction over petitions for declaratory
judgment. In effect we are being asked to do what the Conference
Committee is precisely accused of having done in these cases —
to sit as a third legislative chamber to review legislation.
We are told, however, that the power of judicial review is not so
much power as it is duty imposed on this Court by the
Constitution and that we would be remiss in the performance of
that duty if we decline to look behind the barriers set by the
principle of separation of powers. Art. VIII, § 1, ¶ 2 is cited in
support of this view:
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights
which are legally demandable and enforceable, and
to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government.
To view the judicial power of review as a duty is nothing new.
Chief Justice Marshall said so in 1803, to justify the assertion of
this power in Marbury v. Madison:
It is emphatically the province and duty of the
judicial department to say what the law is. Those
who apply the rule to particular cases must of
necessity expound and interpret that rule. If two
laws conflict with each other, the courts must decide
on the operation of each. 50
Justice Laurel echoed this justification in 1936 in Angara v.
Electoral Commission:
And when the judiciary mediates to allocate
constitutional boundaries, it does not assert any
superiority over the other departments; it does not
in reality nullify or invalidate an act of the
legislature, but only asserts the solemn and sacred
obligation assigned to it by the Constitution to
determine conflicting claims of authority under the
Constitution and to establish for the parties in an
actual controversy the rights which that instrument
secures and guarantees to them. 51
This conception of the judicial power has been affirmed in several
cases 52 of this Court following Angara.
It does not add anything, therefore, to invoke this "duty" to justify
this Court's intervention in what is essentially a case that at best
is not ripe for adjudication. That duty must still be performed in
the context of a concrete case or controversy, as Art. VIII, § 5(2)
clearly defines our jurisdiction in terms of "cases," and nothing but
"cases." That the other departments of the government may have
committed a grave abuse of discretion is not an independent
ground for exercising our power. Disregard of the essential limits
imposed by the case and controversy requirement can in the long
run only result in undermining our authority as a court of law. For,
as judges, what we are called upon to render is judgment
according to law, not according to what may appear to be the
opinion of the day.
_______________________________
In the preceeding pages we have endeavored to discuss, within
limits, the validity of Republic Act No. 7716 in its formal and
substantive aspects as this has been raised in the various cases
before us. To sum up, we hold:
(1) That the procedural requirements of the Constitution have
been complied with by Congress in the enactment of the statute;
(2) That judicial inquiry whether the formal requirements for the
enactment of statutes — beyond those prescribed by the
Constitution — have been observed is precluded by the principle
of separation of powers;
(3) That the law does not abridge freedom of speech, expression
or the press, nor interfere with the free exercise of religion, nor
deny to any of the parties the right to an education; and
(4) That, in view of the absence of a factual foundation of record,
claims that the law is regressive, oppressive and confiscatory and
that it violates vested rights protected under the Contract Clause
are prematurely raised and do not justify the grant of prospective
relief by writ of prohibition.
WHEREFORE, the petitions in these cases are DISMISSED.
Bidin, Quiason, and Kapunan, JJ., concur.
[G.R. No. 164301 : August 10, 2010]
BANK OF THE PHILIPPINE ISLANDS, PETITIONER, VS. BPI
EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF
UNIONS IN BPI UNIBANK, RESPONDENT.
DECISION
LEONARDO-DE CASTRO, J.:
May a corporation invoke its merger with another corporation as a
valid ground to exempt its "absorbed employees" from the
coverage of a union shop clause contained in its existing Collective
Bargaining Agreement (CBA) with its own certified labor
union? That is the question we shall endeavor to answer in this
petition for review filed by an employer after the Court of Appeals
decided in favor of respondent union, which is the employees'
recognized collective bargaining representative.
At the outset, we should call to mind the spirit and the letter of
the Labor Code provisions on union security clauses, specifically
Article 248 (e), which states, "x x x Nothing in this Code or in any
other law shall stop the parties from requiring membership in a
recognized collective bargaining agent as a condition for
employment, except those employees who are already members
of another union at the time of the signing of the collective
bargaining agreement."[1] This case which involves the application
of a collective bargaining agreement with a union shop clause
should be resolved principally from the standpoint of the clear
provisions of our labor laws, and the express terms of the CBA in
question, and not by inference from the general consequence of
the merger of corporations under the Corporation Code, which
obviously does not deal with and, therefore, is silent on the terms
and conditions of employment in corporations or juridical entities.
This issue must be resolved NOW, instead of postponing it to a
future time when the CBA is renegotiated as suggested by the
Honorable Justice Arturo D. Brion because the same issue may
still be resurrected in the renegotiation if the absorbed employees
insist on their privileged status of being exempt from any union
shop clause or any variant thereof.
We find it significant to note that it is only the employer, Bank of
the Philippine Islands (BPI), that brought the case up to this
Court via the instant petition for review; while the employees
actually involved in the case did not pursue the same relief, but
had instead chosen in effect to acquiesce to the decision of the
Court of Appeals which effectively required them to comply with
the union shop clause under the existing CBA at the time of the
merger of BPI with Far East Bank and Trust Company (FEBTC),
which decision had already become final and executory as to the
aforesaid employees. By not appealing the decision of the Court
of Appeals, the aforesaid employees are bound by the said Court
of Appeals' decision to join BPI's duly certified labor union. In
view of the apparent acquiescence of the affected FEBTC
employees in the Court of Appeals' decision, BPI should not have
pursued this petition for review. However, even assuming that BPI
may do so, the same still cannot prosper.
What is before us now is a petition for review under Rule 45 of the
Rules of Court of the Decision[2] dated September 30, 2003 of the
Court of Appeals, as reiterated in its Resolution[3] of June 9, 2004,
reversing and setting aside the Decision[4] dated November 23,
2001 of Voluntary Arbitrator Rosalina Letrondo-Montejo, in CA-
G.R. SP No. 70445, entitled BPI Employees Union-Davao Chapter-
Federation of Unions in BPI Unibank v. Bank of the Philippine
Islands, et al.
The antecedent facts are as follows:
On March 23, 2000, the Bangko Sentral ng Pilipinas approved the
Articles of Merger executed on January 20, 2000 by and between
BPI, herein petitioner, and FEBTC.[5] This Article and Plan of
Merger was approved by the Securities and Exchange Commission
on April 7, 2000.[6]
Pursuant to the Article and Plan of Merger, all the assets and
liabilities of FEBTC were transferred to and absorbed by BPI as the
surviving corporation. FEBTC employees, including those in its
different branches across the country, were hired by petitioner as
its own employees, with their status and tenure recognized and
salaries and benefits maintained.
Respondent BPI Employees Union-Davao Chapter - Federation of
Unions in BPI Unibank (hereinafter the "Union," for brevity) is the
exclusive bargaining agent of BPI's rank and file employees in
Davao City. The former FEBTC rank-and-file employees in Davao
City did not belong to any labor union at the time of the
merger. Prior to the effectivity of the merger, or on March 31,
2000, respondent Union invited said FEBTC employees to a
meeting regarding the Union Shop Clause (Article II, Section 2) of
the existing CBA between petitioner BPI and respondent Union.[7]
The parties both advert to certain provisions of the existing CBA,
which are quoted below:
ARTICLE I
Section 1. Recognition and Bargaining Unit - The BANK recognizes
the UNION as the sole and exclusive collective bargaining
representative of all the regular rank and file employees of the
Bank offices in Davao City.
Section 2. Exclusions
Section 3. Additional Exclusions
Section 4. Copy of Contract
ARTICLE II
Section 1. Maintenance of Membership - All employees within the
bargaining unit who are members of the Union on the date of the
effectivity of this Agreement as well as employees within the
bargaining unit who subsequently join or become members of the
Union during the lifetime of this Agreement shall as a condition of
their continued employment with the Bank, maintain their
membership in the Union in good standing.
Section 2. Union Shop - New employees falling within the
bargaining unit as defined in Article I of this Agreement, who
may hereafter be regularly employed by the Bank shall, within
thirty (30) days after they become regular employees, join the
Union as a condition of their continued employment. It is
understood that membership in good standing in the Union is a
condition of their continued employment with the
Bank.[8] (Emphases supplied.)
After the meeting called by the Union, some of the former FEBTC
employees joined the Union, while others refused. Later,
however, some of those who initially joined retracted their
membership.[9]
Respondent Union then sent notices to the former FEBTC
employees who refused to join, as well as those who retracted
their membership, and called them to a hearing regarding the
matter. When these former FEBTC employees refused to attend
the hearing, the president of the Union requested BPI to
implement the Union Shop Clause of the CBA and to terminate
their employment pursuant thereto.[10]
After two months of management inaction on the request,
respondent Union informed petitioner BPI of its decision to refer
the issue of the implementation of the Union Shop Clause of the
CBA to the Grievance Committee. However, the issue remained
unresolved at this level and so it was subsequently submitted for
voluntary arbitration by the parties.[11]
Voluntary Arbitrator Rosalina Letrondo-Montejo, in a
Decision[12] dated November 23, 2001, ruled in favor of petitioner
BPI's interpretation that the former FEBTC employees were not
covered by the Union Security Clause of the CBA between the
Union and the Bank on the ground that the said employees were
not new employees who were hired and subsequently regularized,
but were absorbed employees "by operation of law" because the
"former employees of FEBTC can be considered assets and
liabilities of the absorbed corporation." The Voluntary
Arbitrator concluded that the former FEBTC employees could not
be compelled to join the Union, as it was their constitutional right
to join or not to join any organization.
Respondent Union filed a Motion for Reconsideration, but the
Voluntary Arbitrator denied the same in an Order dated March 25,
2002.[13]
Dissatisfied, respondent then appealed the Voluntary Arbitrator's
decision to the Court of Appeals. In the herein assailed Decision
dated September 30, 2003, the Court of Appeals reversed and set
aside the Decision of the Voluntary Arbitrator.[14] Likewise, the
Court of Appeals denied herein petitioner's Motion for
Reconsideration in a Resolution dated June 9, 2004.
The Court of Appeals pertinently ruled in its Decision:
A union-shop clause has been defined as a form of union security
provision wherein non-members may be hired, but to retain
employment must become union members after a certain period.
There is no question as to the existence of the union-shop clause
in the CBA between the petitioner-union and the company. The
controversy lies in its application to the "absorbed" employees.
This Court agrees with the voluntary arbitrator that the
ABSORBED employees are distinct and different from NEW
employees BUT only in so far as their employment service is
concerned. The distinction ends there. In the case at bar, the
absorbed employees' length of service from its former employer is
tacked with their employment with BPI. Otherwise stated, the
absorbed employees service is continuous and there is no gap in
their service record.
This Court is persuaded that the similarities of "new" and
"absorbed" employees far outweighs the distinction between
them. The similarities lies on the following, to wit: (a) they have
a new employer; (b) new working conditions; (c) new terms of
employment and; (d) new company policy to follow. As such,
they should be considered as "new" employees for purposes of
applying the provisions of the CBA regarding the "union-shop"
clause.
To rule otherwise would definitely result to a very awkward and
unfair situation wherein the "absorbed" employees shall be in a
different if not, better situation than the existing BPI
employees. The existing BPI employees by virtue of the "union-
shop" clause are required to pay the monthly union dues, remain
as members in good standing of the union otherwise, they shall be
terminated from the company, and other union-related
obligations. On the other hand, the "absorbed" employees shall
enjoy the "fruits of labor" of the petitioner-union and its members
for nothing in exchange. Certainly, this would disturb industrial
peace in the company which is the paramount reason for the
existence of the CBA and the union.
The voluntary arbitrator's interpretation of the provisions of the
CBA concerning the coverage of the "union-shop" clause is at war
with the spirit and the rationale why the Labor Code itself allows
the existence of such provision.
The Supreme Court in the case of Manila Mandarin Employees
Union vs. NLRC (G.R. No. 76989, September 29, 1987) rule, to
quote:
"This Court has held that a valid form of union security, and such
a provision in a collective bargaining agreement is not a restriction
of the right of freedom of association guaranteed by the
Constitution.
A closed-shop agreement is an agreement whereby an employer
binds himself to hire only members of the contracting union who
must continue to remain members in good standing to keep their
jobs. It is "THE MOST PRIZED ACHIEVEMENT OF
UNIONISM." IT ADDS MEMBERSHIP AND COMPULSORY
DUES. By holding out to loyal members a promise of employment
in the closed-shop, it wields group solidarity." (Emphasis
supplied)

Hence, the voluntary arbitrator erred in construing the CBA
literally at the expense of industrial peace in the company.
With the foregoing ruling from this Court, necessarily, the
alternative prayer of the petitioner to require the individual
respondents to become members or if they refuse, for this Court
to direct respondent BPI to dismiss them, follows.[15]
Hence, petitioner's present recourse, raising the following issues:
I future date. BPI argues that the FEBTC employees absorbed by
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN
RULING THAT THE FORMER FEBTC EMPLOYEES SHOULD BE
CONSIDERED `NEW' EMPLOYEES OF BPI FOR PURPOSES OF
APPLYING THE UNION SHOP CLAUSE OF THE CBA
II
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE VOLUNTARY ARBITRATOR'S INTERPRETATION
OF THE COVERAGE OF THE UNION SHOP CLAUSE IS "AT WAR
WITH THE SPIRIT AND THE RATIONALE WHY THE LABOR CODE
ITSELF ALLOWS THE EXISTENCE OF SUCH PROVISION"[16]
In essence, the sole issue in this case is whether or not the former
FEBTC employees that were absorbed by petitioner upon the
merger between FEBTC and BPI should be covered by the Union
Shop Clause found in the existing CBA between petitioner and
respondent Union.
Petitioner is of the position that the former FEBTC employees are
not new employees of BPI for purposes of applying the Union
Shop Clause of the CBA, on this note, petitioner points to Section
2, Article II of the CBA, which provides:
New employees falling within the bargaining unit as defined
in Article I of this Agreement, who may hereafter be regularly
employed by the Bank shall, within thirty (30) days after
they become regular employees, join the Union as a
condition of their continued employment. It is understood
that membership in good standing in the Union is a condition of
their continued employment with the Bank.[17] (Emphases
supplied.)
Petitioner argues that the term "new employees" in the Union
Shop Clause of the CBA is qualified by the phrases "who may
hereafter be regularly employed" and "after they become regular
employees" which led petitioner to conclude that the "new
employees" referred to in, and contemplated by, the Union Shop
Clause of the CBA were only those employees who were "new" to
BPI, on account of having been hired initially on a temporary or
probationary status for possible regular employment at some
BPI cannot be considered as "new employees" of BPI for purposes
of applying the Union Shop Clause of the CBA.[18]
According to petitioner, the contrary interpretation made by the
Court of Appeals of this particular CBA provision ignores, or even
defies, what petitioner assumes as its clear meaning and scope
which allegedly contradicts the Court's strict and restrictive
enforcement of union security agreements.
We do not agree.
Section 2, Article II of the CBA is silent as to how one becomes a
"regular employee" of the BPI for the first time. There is
nothing in the said provision which requires that a "new"
regular employee first undergo a temporary or
probationary status before being deemed as such under the
union shop clause of the CBA.
"Union security" is a generic term which is applied to and
comprehends "closed shop," "union shop," "maintenance of
membership" or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership
as a condition affecting employment. There is union shop when all
new regular employees are required to join the union within a
certain period for their continued employment. There is
maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as
a condition for continued employment until they are promoted or
transferred out of the bargaining unit or the agreement is
terminated. A closed-shop, on the other hand, may be defined as
an enterprise in which, by agreement between the employer and
his employees or their representatives, no person may be
employed in any or certain agreed departments of the enterprise
unless he or she is, becomes, and, for the duration of the
agreement, remains a member in good standing of a union
entirely comprised of or of which the employees in interest are a
part.[19]
In the case of Liberty Flour Mills Employees v. Liberty Flour Mills,
Inc.,[20] we ruled that:
It is the policy of the State to promote unionism to enable
the workers to negotiate with management on the same
level and with more persuasiveness than if they were to
individually and independently bargain for the
improvement of their respective conditions. To this end, the
Constitution guarantees to them the rights "to self-organization,
collective bargaining and negotiations and peaceful concerted
actions including the right to strike in accordance with law." There
is no question that these purposes could be thwarted if every
worker were to choose to go his own separate way instead of
joining his co-employees in planning collective action and
presenting a united front when they sit down to bargain with their
employers. It is for this reason that the law has sanctioned
stipulations for the union shop and the closed shop as a means of
encouraging the workers to join and support the labor union of
their own choice as their representative in the negotiation of their
demands and the protection of their interest vis-Ã -vis the
employer. (Emphasis ours.)
In other words, the purpose of a union shop or other union
security arrangement is to guarantee the continued existence of
the union through enforced membership for the benefit of the
workers.
All employees in the bargaining unit covered by a Union Shop
Clause in their CBA with management are subject to its
terms. However, under law and jurisprudence, the
following kinds of employees are exempted from its
coverage, namely, employees who at the time the union shop
agreement takes effect are bona fide members of a religious
organization which prohibits its members from joining labor unions
on religious grounds;[21] employees already in the service and
already members of a union other than the majority at the
time the union shop agreement took effect;[22] confidential
employees who are excluded from the rank and file bargaining
unit;[23] and employees excluded from the union shop by
express terms of the agreement.
When certain employees are obliged to join a particular union as a
requisite for continued employment, as in the case of Union
Security Clauses, this condition is a valid restriction of the
freedom or right not to join any labor organization because it is in
favor of unionism. This Court, on occasion, has even held that a
union security clause in a CBA is not a restriction of the right of
freedom of association guaranteed by the Constitution.[24]
Moreover, a closed shop agreement is an agreement whereby an
employer binds himself to hire only members of the contracting
union who must continue to remain members in good standing to
keep their jobs. It is "the most prized achievement of
unionism." It adds membership and compulsory dues. By
holding out to loyal members a promise of employment in the
closed shop, it wields group solidarity.[25]
Indeed, the situation of the former FEBTC employees in this case
clearly does not fall within the first three exceptions to the
application of the Union Shop Clause discussed earlier. No
allegation or evidence of religious exemption or prior membership
in another union or engagement as a confidential employee was
presented by both parties. The sole category therefore in which
petitioner may prove its claim is the fourth recognized exception
or whether the former FEBTC employees are excluded by the
express terms of the existing CBA between petitioner and
respondent.
To reiterate, petitioner insists that the term "new employees," as
the same is used in the Union Shop Clause of the CBA at issue,
refers only to employees hired by BPI as non-regular employees
who later qualify for regular employment and become regular
employees, and not those who, as a legal consequence of a
merger, are allegedly automatically deemed regular employees of
BPI. However, the CBA does not make a distinction as to how a
regular employee attains such a status. Moreover, there is
nothing in the Corporation Law and the merger agreement
mandating the automatic employment as regular employees by
the surviving corporation in the merger.
It is apparent that petitioner hinges its argument that the former
FEBTC employees were absorbed by BPI merely as a legal
consequence of a merger based on the characterization by the
Voluntary Arbiter of these absorbed employees as included in the
"assets and liabilities" of the dissolved corporation - assets
because they help the Bank in its operation and liabilities because
redundant employees may be terminated and company benefits
will be paid to them, thus reducing the Bank's financial
status. Based on this ratiocination, she ruled that the same are
not new employees of BPI as contemplated by the CBA at issue,
noting that the Certificate of Filing of the Articles of Merger and
Plan of Merger between FEBTC and BPI stated that "x x x the
entire assets and liabilities of FAR EASTERN BANK & TRUST
COMPANY will be transferred to and absorbed by the BANK OF
THE PHILIPPINE ISLANDS x x x (underlining supplied)."[26] In
sum, the Voluntary Arbiter upheld the reasoning of petitioner that
the FEBTC employees became BPI employees by "operation of
law" because they are included in the term "assets and liabilities."
Absorbed FEBTC Employees are Neither Assets nor
Liabilities
In legal parlance, however, human beings are never embraced in
the term "assets and liabilities." Moreover, BPI's absorption of
former FEBTC employees was neither by operation of law nor by
legal consequence of contract. There was no government
regulation or law that compelled the merger of the two banks or
the absorption of the employees of the dissolved corporation by
the surviving corporation. Had there been such law or regulation,
the absorption of employees of the non-surviving entities of the
merger would have been mandatory on the surviving
corporation.[27] In the present case, the merger was voluntarily
entered into by both banks presumably for some mutually
acceptable consideration. In fact, the Corporation Code does
not also mandate the absorption of the employees of the
non-surviving corporation by the surviving corporation in
the case of a merger. Section 80 of the Corporation Code
provides:
SEC. 80. Effects of merger or consolidation. - The merger or
consolidation, as provided in the preceding sections shall have the
following effects:
1. The constituent corporations shall become a single corporation
which, in case of merger, shall be the surviving corporation
designated in the plan of merger; and, in case of consolidation,
shall be the consolidated corporation designated in the plan of
consolidation;
2. The separate existence of the constituent corporations shall
cease, except that of the surviving or the consolidated
corporation;
3. The surviving or the consolidated corporation shall possess all
the rights, privileges, immunities and powers and shall be subject
to all the duties and liabilities of a corporation organized under
this Code;
4. The surviving or the consolidated corporation shall thereupon
and thereafter possess all the rights, privileges, immunities and
franchises of each of the constituent corporations; and all
property, real or personal, and all receivables due on whatever
account, including subscriptions to shares and other choses in
action, and all and every other interest of, or belonging to, or due
to each constituent corporation, shall be taken and deemed to be
transferred to and vested in such surviving or consolidated
corporation without further act or deed; and
5. The surviving or the consolidated corporation shall be
responsible and liable for all the liabilities and obligations of each
of the constituent corporations in the same manner as if such
surviving or consolidated corporation had itself incurred such
liabilities or obligations; and any claim, action or proceeding
pending by or against any of such constituent corporations may be
prosecuted by or against the surviving or consolidated
corporation, as the case may be. Neither the rights of creditors
nor any lien upon the property of any of such constituent
corporations shall be impaired by such merger or consolidated.
Significantly, too, the Articles of Merger and Plan of Merger dated
April 7, 2000 did not contain any specific stipulation with respect
to the employment contracts of existing personnel of the non-
surviving entity which is FEBTC. Unlike the Voluntary Arbitrator,
this Court cannot uphold the reasoning that the general stipulation
regarding transfer of FEBTC assets and liabilities to BPI as set
forth in the Articles of Merger necessarily includes the transfer of
all FEBTC employees into the employ of BPI and neither BPI nor
the FEBTC employees allegedly could do anything about it. Even
if it is so, it does not follow that the absorbed employees
should not be subject to the terms and conditions of
employment obtaining in the surviving corporation.
The rule is that unless expressly assumed, labor contracts such as
employment contracts and collective bargaining agreements are
not enforceable against a transferee of an enterprise, labor
contracts being in personam, thus binding only between the
parties. A labor contract merely creates an action in
personam and does not create any real right which should be
respected by third parties. This conclusion draws its force from
the right of an employer to select his employees and to decide
when to engage them as protected under our Constitution, and
the same can only be restricted by law through the exercise of the
police power.[28]
Furthermore, this Court believes that it is contrary to public policy
to declare the former FEBTC employees as forming part of the
assets or liabilities of FEBTC that were transferred and absorbed
by BPI in the Articles of Merger. Assets and liabilities, in this
instance, should be deemed to refer only to property rights and
obligations of FEBTC and do not include the employment contracts
of its personnel. A corporation cannot unilaterally transfer its
employees to another employer like chattel. Certainly, if BPI as
an employer had the right to choose who to retain among FEBTC's
employees, FEBTC employees had the concomitant right to choose
not to be absorbed by BPI. Even though FEBTC employees had no
choice or control over the merger of their employer with BPI, they
had a choice whether or not they would allow themselves to be
absorbed by BPI. Certainly nothing prevented the FEBTC's
employees from resigning or retiring and seeking employment
elsewhere instead of going along with the proposed absorption.
Employment is a personal consensual contract and absorption by
BPI of a former FEBTC employee without the consent of the
employee is in violation of an individual's freedom to contract. It
would have been a different matter if there was an express
provision in the articles of merger that as a condition for the
merger, BPI was being required to assume all the employment
contracts of all existing FEBTC employees with the conformity of
the employees. In the absence of such a provision in the articles
of merger, then BPI clearly had the business management
decision as to whether or not employ FEBTC's employees. FEBTC
employees likewise retained the prerogative to allow themselves
to be absorbed or not; otherwise, that would be tantamount to
involuntary servitude.
There appears to be no dispute that with respect to FEBTC
employees that BPI chose not to employ or FEBTC employees who
chose to retire or be separated from employment instead of
"being absorbed," BPI's assumed liability to these employees
pursuant to the merger is FEBTC's liability to them in terms of
separation pay,[29] retirement pay[30] or other benefits that may be
due them depending on the circumstances.
Legal Consequences of Mergers
Although not binding on this Court, American jurisprudence on the
consequences of voluntary mergers on the right to employment
and seniority rights is persuasive and illuminating. We quote the
following pertinent discussion from the American Law Reports:
Several cases have involved the situation where as a result
of mergers, consolidations, or shutdowns, one group of
employees, who had accumulated seniority at one plant or for one
employer, finds that their jobs have been discontinued except to
the extent that they are offered employment at the place or by
the employer where the work is to be carried on in the
future. Such cases have involved the question whether such
transferring employees should be entitled to carry with them their
accumulated seniority or whether they are to be compelled to
start over at the bottom of the seniority list in the "new" job. It
has been recognized in some cases that the accumulated seniority
does not survive and cannot be transferred to the "new" job.
In Carver v Brien (1942) 315 Ill App 643, 43 NE2d 597, the
shop work of three formerly separate railroad corporations, which
had previously operated separate facilities, was consolidated in
the shops of one of the roads. Displaced employees of the other
two roads were given preference for the new jobs created in the
shops of the railroad which took over the work. A controversy
arose between the employees as to whether the displaced
employees were entitled to carry with them to the new jobs the
seniority rights they had accumulated with their prior employers,
that is, whether the rosters of the three corporations, for seniority
purposes, should be "dovetailed" or whether the transferring
employees should go to the bottom of the roster of their new
employer. Labor representatives of the various systems involved
attempted to work out an agreement which, in effect, preserved
the seniority status obtained in the prior employment on other
roads, and the action was for specific performance of this
agreement against a demurring group of the original employees of
the railroad which was operating the consolidated shops. The
relief sought was denied, the court saying that, absent some
specific contract provision otherwise, seniority rights were
ordinarily limited to the employment in which they were earned,
and concluding that the contract for which specific performance
was sought was not such a completed and binding agreement as
would support such equitable relief, since the railroad, whose
concurrence in the arrangements made was essential to their
effectuation, was not a party to the agreement.
Where the provisions of a labor contract provided that in the event
that a trucker absorbed the business of another private
contractor or common carrier, or was a party to a merger of
lines, the seniority of the employees absorbed or affected
thereby should be determined by mutual agreement between the
trucker and the unions involved, it was held in Moore v
International Brotherhood of Teamsters, etc. (1962, Ky)
356 SW2d 241, that the trucker was not required to absorb the
affected employees as well as the business, the court saying that
they could find no such meaning in the above clause, stating that
it dealt only with seniority, and not with initial
employment. Unless and until the absorbing company agreed to
take the employees of the company whose business was
being absorbed, no seniority problem was created, said the
court, hence the provision of the contract could have no
application. Furthermore, said the court, it did not require that the
absorbing company take these employees, but only that if it did
take them the question of seniority between the old
and new employees would be worked out by agreement or else
be submitted to the grievance procedure.[31] (Emphasis ours.)
Indeed, from the tenor of local and foreign authorities, in
voluntary mergers, absorption of the dissolved corporation's
employees or the recognition of the absorbed employees' service
with their previous employer may be demanded from the
surviving corporation if required by provision of law or
contract. The dissent of Justice Arturo D. Brion tries to make a
distinction as to the terms and conditions of employment of the
absorbed employees in the case of a corporate merger or
consolidation which will, in effect, take away from corporate
management the prerogative to make purely business decisions
on the hiring of employees or will give it an excuse not to apply
the CBA in force to the prejudice of its own employees and their
recognized collective bargaining agent. In this regard, we
disagree with Justice Brion.
Justice Brion takes the position that because the surviving
corporation continues the personality of the dissolved corporation
and acquires all the latter's rights and obligations, it is duty-bound
to absorb the dissolved corporation's employees, even in the
absence of a stipulation in the plan of merger. He proposes that
this interpretation would provide the necessary protection to labor
as it spares workers from being "left in legal limbo."
However, there are instances where an employer can validly
discontinue or terminate the employment of an employee without
violating his right to security of tenure. Among others, in case of
redundancy, for example, superfluous employees may be
terminated and such termination would be authorized under
Article 283 of the Labor Code.[32]
Moreover, assuming for the sake of argument that there is an
obligation to hire or absorb all employees of the non-surviving
corporation, there is still no basis to conclude that the terms and
conditions of employment under a valid collective bargaining
agreement in force in the surviving corporation should not be
made to apply to the absorbed employees.
The Corporation Code and the Subject
Merger Agreement are Silent on Efficacy,
Terms and Conditions of Employment
Contracts
The lack of a provision in the plan of merger regarding the
transfer of employment contracts to the surviving corporation
could have very well been deliberate on the part of the parties to
the merger, in order to grant the surviving corporation the
freedom to choose who among the dissolved corporation's
employees to retain, in accordance with the surviving
corporation's business needs. If terminations, for instance due to
redundancy or labor-saving devices or to prevent losses, are done
in good faith, they would be valid. The surviving corporation too
is duty-bound to protect the rights of its own employees who may
be affected by the merger in terms of seniority and other
conditions of their employment due to the merger. Thus, we are
not convinced that in the absence of a stipulation in the merger
plan the surviving corporation was compelled, or may be judicially
compelled, to absorb all employees under the same terms and
conditions obtaining in the dissolved corporation as the surviving
corporation should also take into consideration the state of its
business and its obligations to its own employees, and to their
certified collective bargaining agent or labor union.
Even assuming we accept Justice Brion's theory that in a merger
situation the surviving corporation should be compelled to absorb
the dissolved corporation's employees as a legal consequence of
the merger and as a social justice consideration, it bears to
emphasize his dissent also recognizes that the employee may
choose to end his employment at any time by voluntarily
resigning. For the employee to be "absorbed" by BPI, it requires
the employees' implied or express consent. It is because of this
human element in employment contracts and the personal,
consensual nature thereof that we cannot agree that, in a merger
situation, employment contracts are automatically transferable
from one entity to another in the same manner that a contract
pertaining to purely proprietary rights - such as a promissory note
or a deed of sale of property - is perfectly and automatically
transferable to the surviving corporation.
That BPI is the same entity as FEBTC after the merger is but a
legal fiction intended as a tool to adjudicate rights and obligations
between and among the merged corporations and the persons
that deal with them. Although in a merger it is as if there is no
change in the personality of the employer, there is in reality a
change in the situation of the employee. Once an FEBTC
employee is absorbed, there are presumably changes in his
condition of employment even if his previous tenure and salary
rate is recognized by BPI. It is reasonable to assume that BPI
would have different rules and regulations and company practices
than FEBTC and it is incumbent upon the former FEBTC employees
to obey these new rules and adapt to their new environment. Not
the least of the changes in employment condition that the
absorbed FEBTC employees must face is the fact that prior to the
merger they were employees of an unorganized establishment and
after the merger they became employees of a unionized company
that had an existing collective bargaining agreement with the
certified union. This presupposes that the union who is party to
the collective bargaining agreement is the certified union that has,
in the appropriate certification election, been shown to represent a
majority of the members of the bargaining unit.
Likewise, with respect to FEBTC employees that BPI chose to
employ and who also chose to be absorbed, then due to BPI's
blanket assumption of liabilities and obligations under the articles
of merger, BPI was bound to respect the years of service of these
FEBTC employees and to pay the same, or commensurate salaries
and other benefits that these employees previously enjoyed with
FEBTC.
As the Union likewise pointed out in its pleadings, there were
benefits under the CBA that the former FEBTC employees
did not enjoy with their previous employer. As BPI
employees, they will enjoy all these CBA benefits upon their
"absorption." Thus, although in a sense BPI is continuing FEBTC's
employment of these absorbed employees, BPI's employment of
these absorbed employees was not under exactly the same terms
and conditions as stated in the latter's employment contracts with
FEBTC. This further strengthens the view that BPI and the former
FEBTC employees voluntarily contracted with each other for their
employment in the surviving corporation.
Proper Appreciation of the Term
"New Employees" Under the CBA
In any event, it is of no moment that the former FEBTC employees
retained the regular status that they possessed while working for
their former employer upon their absorption by petitioner. This
fact would not remove them from the scope of the phrase "new
employees" as contemplated in the Union Shop Clause of the CBA,
contrary to petitioner's insistence that the term "new employees"
only refers to those who are initially hired as non-
regular employees for possible regular employment.
The Union Shop Clause in the CBA simply states that "new
employees" who during the effectivity of the CBA "may be
regularly employed" by the Bank must join the union within thirty
(30) days from their regularization. There is nothing in the said
clause that limits its application to only new employees who
possess non-regular status, meaning probationary status, at
the start of their employment. Petitioner likewise failed to point to
any provision in the CBA expressly excluding from the Union Shop
Clause new employees who are "absorbed" as regular employees
from the beginning of their employment. What is indubitable from
the Union Shop Clause is that upon the effectivity of the CBA,
petitioner's new regular employees (regardless of the manner
by which they became employees of BPI) are required to join
the Union as a condition of their continued employment.
The dissenting opinion of Justice Brion dovetails with Justice
Carpio's view only in their restrictive interpretation of who are
"new employees" under the CBA. To our dissenting colleagues,
the phrase "new employees" (who are covered by the union shop
clause) should only include new employees who were hired as
probationary during the life of the CBA and were later granted
regular status. They propose that the former FEBTC employees
who were deemed regular employees from the beginning of their
employment with BPI should be treated as a special class of
employees and be excluded from the union shop clause.
Justice Brion himself points out that there is no clear, categorical
definition of "new employee" in the CBA. In other words, the term
"new employee" as used in the union shop clause is used broadly
without any qualification or distinction. However, the Court
should not uphold an interpretation of the term "new employee"
based on the general and extraneous provisions of the
Corporation Code on merger that would defeat, rather than fulfill,
the purpose of the union shop clause. To reiterate, the
provision of the Article 248(e) of the Labor Code in point
mandates that nothing in the said Code or any other law
should stop the parties from requiring membership in a
recognized collective bargaining agent as a condition of
employment.
Significantly, petitioner BPI never stretches its arguments so far
as to state that the absorbed employees should be deemed "old
employees" who are not covered by the Union Shop Clause. This
is not surprising.
By law and jurisprudence, a merger only becomes effective upon
approval by the Securities and Exchange Commission (SEC) of the
articles of merger. In Associated Bank v. Court of Appeals,[33] we
held:
The procedure to be followed is prescribed under the Corporation
Code. Section 79 of said Code requires the approval by the
Securities and Exchange Commission (SEC) of the articles of
merger which, in turn, must have been duly approved by a
majority of the respective stockholders of the constituent
corporations. The same provision further states that the merger
shall be effective only upon the issuance by the SEC of a
certificate of merger. The effectivity date of the merger is
crucial for determining when the merged or absorbed
corporation ceases to exist; and when its rights, privileges,
properties as well as liabilities pass on to the surviving
corporation. (Emphasis ours.)
In other words, even though BPI steps into the shoes of FEBTC as
the surviving corporation, BPI does so at a particular point in
time, i.e., the effectivity of the merger upon the SEC's issuance of
a certificate of merger. In fact, the articles of merger themselves
provided that both BPI and FEBTC will continue their respective
business operations until the SEC issues the certificate of merger
and in the event SEC does not issue such a certificate, they agree
to hold each other blameless for the non-consummation of the
merger.
Considering the foregoing principle, BPI could have only become
the employer of the FEBTC employees it absorbed after the
approval by the SEC of the merger. If the SEC did not approve
the merger, BPI would not be in the position to absorb the
employees of FEBTC at all. Indeed, there is evidence on record
that BPI made the assignments of its absorbed employees in BPI
effective April 10, 2000, or after the SEC's approval of the
merger.[34] In other words, BPI became the employer of the
absorbed employees only at some point after the effectivity of
the merger, notwithstanding the fact that the absorbed
employees' years of service with FEBTC were voluntarily
recognized by BPI.
Even assuming for the sake of argument that we consider the
absorbed FEBTC employees as "old employees" of BPI who are not
members of any union (i.e., it is their date of hiring by FEBTC
and not the date of their absorption that is considered), this
does not necessarily exclude them from the union security clause
in the CBA. The CBA subject of this case was effective from April
1, 1996 until March 31, 2001. Based on the allegations of the
former FEBTC employees themselves, there were former FEBTC
employees who were hired by FEBTC after April 1, 1996 and if
their date of hiring by FEBTC is considered as their date of hiring
by BPI, they would undeniably be considered "new employees" of
BPI within the contemplation of the Union Shop Clause of the said
CBA. Otherwise, it would lead to the absurd situation that we
would discriminate not only between new BPI employees (hired
during the life of the CBA) and former FEBTC employees
(absorbed during the life of the CBA) but also among the former
FEBTC employees themselves. In other words, we would be
treating employees who are exactly similarly situated (i.e., the
group of absorbed FEBTC employees) differently. This hardly
satisfies the demands of equality and justice.
Petitioner limited itself to the argument that its absorbed
employees do not fall within the term "new employees"
contemplated under the Union Shop Clause with the apparent
objective of excluding all, and not just some, of the former FEBTC
employees from the application of the Union Shop Clause.
However, in law or even under the express terms of the CBA,
there is no special class of employees called "absorbed
employees." In order for the Court to apply or not apply the Union
Shop Clause, we can only classify the former FEBTC employees as
either "old" or "new." If they are not "old" employees, they are
necessarily "new" employees. If they are new employees, the
Union Shop Clause did not distinguish between new employees
who are non-regular at their hiring but who subsequently become
regular and new employees who are "absorbed" as regular and
permanent from the beginning of their employment. The Union
Shop Clause did not so distinguish, and so neither must we.
No Substantial Distinction Under the CBA
Between Regular Employees Hired After
Probationary Status and Regular Employees
Hired After the Merger
Verily, we agree with the Court of Appeals that there are no
substantial differences between a newly hired non-regular
employee who was regularized weeks or months after his hiring
and a new employee who was absorbed from another bank as a
regular employee pursuant to a merger, for purposes of applying
the Union Shop Clause. Both employees were hired/employed only
after the CBA was signed. At the time they are being required to
join the Union, they are both already regular rank and file
employees of BPI. They belong to the same bargaining unit being
represented by the Union. They both enjoy benefits that the
Union was able to secure for them under the CBA. When they
both entered the employ of BPI, the CBA and the Union Shop
Clause therein were already in effect and neither of them had the
opportunity to express their preference for unionism or not. We
see no cogent reason why the Union Shop Clause should not be
applied equally to these two types of new employees, for they are
undeniably similarly situated.
The effect or consequence of BPI's so-called "absorption" of
former FEBTC employees should be limited to what they actually
agreed to, i.e. recognition of the FEBTC employees' years of
service, salary rate and other benefits with their previous
employer. The effect should not be stretched so far as
to exempt former FEBTC employees from the existing CBA terms,
company policies and rules which apply to employees similarly
situated. If the Union Shop Clause is valid as to other new regular
BPI employees, there is no reason why the same clause would be
a violation of the "absorbed" employees' freedom of association.
Non-Application of Union Shop Clause
Contrary to the Policy of the Labor Code
and Inimical to Industrial Peace
It is but fair that similarly situated employees who enjoy the same
privileges of a CBA should be likewise subject to the same
obligations the CBA imposes upon them. A contrary interpretation
of the Union Shop Clause will be inimical to industrial peace and
workers' solidarity. This unfavorable situation will not be
sufficiently addressed by asking the former FEBTC employees to
simply pay agency fees to the Union in lieu of union membership,
as the dissent of Justice Carpio suggests. The fact remains that
other new regular employees, to whom the "absorbed employees"
should be compared, do not have the option to simply pay the
agency fees and they must join the Union or face termination.
Petitioner's restrictive reading of the Union Shop Clause could also
inadvertently open an avenue, which an employer could readily
use, in order to dilute the membership base of the certified union
in the collective bargaining unit (CBU). By entering into a
voluntary merger with a non-unionized company that employs
more workers, an employer could get rid of its existing union by
the simple expedient of arguing that the "absorbed employees"
are not new employees, as are commonly understood to be
covered by a CBA's union security clause. This could then lead to
a new majority within the CBU that could potentially threaten the
majority status of the existing union and, ultimately, spell its
demise as the CBU's bargaining representative. Such a dreaded
but not entirely far-fetched scenario is no different from the
ingenious and creative "union-busting" schemes that corporations
have fomented throughout the years, which this Court has foiled
time and again in order to preserve and protect the valued place
of labor in this jurisdiction consistent with the Constitution's
mandate of insuring social justice.
There is nothing in the Labor Code and other applicable laws or
the CBA provision at issue that requires that a new employee has
to be of probationary or non-regular status at the beginning of the
employment relationship. An employer may confer upon a new
employee the status of regular employment even at the onset of
his engagement. Moreover, no law prohibits an employer from
voluntarily recognizing the length of service of a new employee
with a previous employer in relation to computation of benefits or
seniority but it should not unduly be interpreted to exclude them
from the coverage of the CBA which is a binding contractual
obligation of the employer and employees.
Indeed, a union security clause in a CBA should be interpreted to
give meaning and effect to its purpose, which is to afford
protection to the certified bargaining agent and ensure that the
employer is dealing with a union that represents the interests of
the legally mandated percentage of the members of the
bargaining unit.
The union shop clause offers protection to the certified bargaining
agent by ensuring that future regular employees who (a) enter
the employ of the company during the life of the CBA; (b) are
deemed part of the collective bargaining unit; and (c) whose
number will affect the number of members of the collective
bargaining unit will be compelled to join the union. Such
compulsion has legal effect, precisely because the employer by
voluntarily entering in to a union shop clause in a CBA with the
certified bargaining agent takes on the responsibility of dismissing
the new regular employee who does not join the union.
Without the union shop clause or with the restrictive interpretation
thereof as proposed in the dissenting opinions, the company can
jeopardize the majority status of the certified union by excluding
from union membership all new regular employees whom the
Company will "absorb" in future mergers and all new regular
employees whom the Company hires as regular from the
beginning of their employment without undergoing a probationary
period. In this manner, the Company can increase the number of
members of the collective bargaining unit and if this increase is
not accompanied by a corresponding increase in union
membership, the certified union may lose its majority status and
render it vulnerable to attack by another union who wishes to
represent the same bargaining unit.[35]
Or worse, a certified union whose membership falls below twenty
percent (20%) of the total members of the collective bargaining
unit may lose its status as a legitimate labor organization
altogether, even in a situation where there is no competing
union.[36] In such a case, an interested party may file for the
cancellation of the union's certificate of registration with the
Bureau of Labor Relations.[37]
Plainly, the restrictive interpretation of the union shop clause
would place the certified union's very existence at the mercy and
control of the employer. Relevantly, only BPI, the employer
appears to be interested in pursuing this case. The former
FEBTC employees have not joined BPI in this appeal.
For the foregoing reasons, Justice Carpio's proposal to simply
require the former FEBTC to pay agency fees is wholly inadequate
to compensate the certified union for the loss of additional
membership supposedly guaranteed by compliance with the union
shop clause. This is apart from the fact that treating these
"absorbed employees" as a special class of new employees does
not encourage worker solidarity in the company since another
class of new employees (i.e. those whose were hired as
probationary and later regularized during the life of the CBA)
would not have the option of substituting union membership with
payment of agency fees.
Justice Brion, on the other hand, appears to recognize the
inherent unfairness of perpetually excluding the "absorbed"
employees from the ambit of the union shop clause. He proposes
that this matter be left to negotiation by the parties in the next
CBA. To our mind, however, this proposal does not sufficiently
address the issue. With BPI already taking the position that
employees "absorbed" pursuant to its voluntary mergers with
other banks are exempt from the union shop clause, the chances
of the said bank ever agreeing to the inclusion of such employees
in a future CBA is next to nil - more so, if BPI's narrow
interpretation of the union shop clause is sustained by this Court.
Right of an Employee not to Join a
Union is not Absolute and Must
Give Way to the Collective Good
of All Members of the Bargaining Unit
The dissenting opinions place a premium on the fact that even if
the former FEBTC employees are not old employees, they
nonetheless were employed as regular and permanent employees
without a gap in their service. However, an employee's
permanent and regular employment status in itself does not
necessarily exempt him from the coverage of a union shop clause.
In the past this Court has upheld even the more stringent type of
union security clause, i.e., the closed shop provision, and held
that it can be made applicable to old employees who are already
regular and permanent but have chosen not to join a union. In the
early case of Juat v. Court of Industrial Relations,[38] the Court
held that an old employee who had no union may be compelled to
join the union even if the collective bargaining agreement (CBA)
imposing the closed shop provision was only entered into seven
years after of the hiring of the said employee. To quote from that
decision:
A closed-shop agreement has been considered as one form of
union security whereby only union members can be hired and
workers must remain union members as a condition of continued
employment. The requirement for employees or workers to
become members of a union as a condition for
employment redounds to the benefit and advantage of said
employees because by holding out to loyal members a promise
of employment in the closed-shop the union wields group
solidarity. In fact, it is said that "the closed-shop contract is the
most prized achievement of unionism."
xxxx
This Court had categorically held in the case of Freeman Shirt
Manufacturing Co., Inc., et al. vs. Court of Industrial Relations, et
al., G.R. No. L-16561, Jan. 28, 1961, that the closed-shop
proviso of a collective bargaining agreement entered into
between an employer and a duly authorized labor union
is applicable not only to the employees or laborers that are
employed after the collective bargaining agreement had
been entered into but also to old employees who are not
members of any labor union at the time the said collective
bargaining agreement was entered into. In other words, if an
employee or laborer is already a member of a labor union different
from the union that entered into a collective bargaining agreement
with the employer providing for a closed-shop, said employee or
worker cannot be obliged to become a member of that union
which had entered into a collective bargaining agreement with the
employer as a condition for his continued employment. (Emphasis
and underscoring supplied.)
Although the present case does not involve a closed shop
provision that included even old employees, the Juat example is
but one of the cases that laid down the doctrine that the right not
to join a union is not absolute. Theoretically, there is nothing in
law or jurisprudence to prevent an employer and a union from
stipulating that existing employees (who already attained regular
and permanent status but who are not members of any union) are
to be included in the coverage of a union security clause. Even
Article 248(e) of the Labor Code only expressly exempts old
employees who already have a union from inclusion in a union
security clause.[39]
Contrary to the assertion in the dissent of Justice Carpio, Juat has
not been overturned by Victoriano v. Elizalde Rope Workers'
Union[40] nor by Reyes v. Trajano.[41] The factual milieus of these
three cases are vastly different.
In Victoriano, the issue that confronted the Court was whether or
not employees who were members of the Iglesia ni Kristo (INK)
sect could be compelled to join the union under a closed shop
provision, despite the fact that their religious beliefs prohibited
them from joining a union. In that case, the Court was asked to
balance the constitutional right to religious freedom against a host
of other constitutional provisions including the freedom of
association, the non-establishment clause, the non-impairment of
contracts clause, the equal protection clause, and the social
justice provision. In the end, the Court held that "religious
freedom, although not unlimited, is a fundamental personal right
and liberty, and has a preferred position in the hierarchy of
values."[42]
However, Victoriano is consistent with Juat since they both affirm
that the right to refrain from joining a union is not absolute. The
relevant portion of Victoriano is quoted below:
The right to refrain from joining labor organizations
recognized by Section 3 of the Industrial Peace Act is,
however, limited. The legal protection granted to such right to
refrain from joining is withdrawn by operation of law, where
a labor union and an employer have agreed on a closed
shop, by virtue of which the employer may employ only
member of the collective bargaining union, and the
employees must continue to be members of the union for
the duration of the contract in order to keep their
jobs. Thus Section 4 (a) (4) of the Industrial Peace Act, before
its amendment by Republic Act No. 3350, provides that although
it would be an unfair labor practice for an employer "to
discriminate in regard to hire or tenure of employment or
any term or condition of employment to encourage or
discourage membership in any labor organization" the
employer is, however, not precluded "from making an
agreement with a labor organization to require as a
condition of employment membership therein, if such labor
organization is the representative of the employees." By
virtue, therefore, of a closed shop agreement, before the
enactment of Republic Act No. 3350, if any person, regardless of
his religious beliefs, wishes to be employed or to keep his
employment, he must become a member of the collective
bargaining union. Hence, the right of said employee not to
join the labor union is curtailed and
withdrawn.[43] (Emphases supplied.)
If Juat exemplified an exception to the rule that a person has the
right not to join a union, Victoriano merely created an exception
to the exception on the ground of religious freedom.
Reyes, on the other hand, did not involve the interpretation of any
union security clause. In that case, there was no certified
bargaining agent yet since the controversy arose during a
certification election. In Reyes, the Court highlighted the idea
that the freedom of association included the right not to associate
or join a union in resolving the issue whether or not the votes of
members of the INK sect who were part of the bargaining unit
could be excluded in the results of a certification election, simply
because they were not members of the two contesting unions and
were expected to have voted for "NO UNION" in view of their
religious affiliation. The Court upheld the inclusion of the votes of
the INK members since in the previous case of Victoriano we held
that INK members may not be compelled to join a union on the
ground of religious freedom and even without Victoriano every
employee has the right to vote "no union" in a certification
election as part of his freedom of association. However, Reyes is
not authority for Justice Carpio's proposition that an employee
who is not a member of any union may claim an exemption from
an existing union security clause because he already has regular
and permanent status but simply prefers not to join a union.
The other cases cited in Justice Carpio's dissent on this point are
likewise inapplicable. Basa v. Federacion Obrera de la Industria
Tabaquera y Otros Trabajadores de Filipinas,[44] Anucension v.
National Labor Union,[45] and Gonzales v. Central Azucarera de
Tarlac Labor Union[46] all involved members of the INK. In line
with Victoriano, these cases upheld the INK members' claimed
exemption from the union security clause on religious grounds. In
the present case, the former FEBTC employees never claimed any
religious grounds for their exemption from the Union Shop Clause.
As for Philips Industrial Development, Inc. v. National Labor
Relations Corporation[47] and Knitjoy Manufacturing, Inc. v. Ferrer-
Calleja,[48] the employees who were exempted from joining the
respondent union or who were excluded from participating in the
certification election were found to be not members of the
bargaining unit represented by respondent union and were
free to form/join their own union. In the case at bar, it is
undisputed that the former FEBTC employees were part of the
bargaining unit that the Union represented. Thus, the rulings
in Philips and Knitjoy have no relevance to the issues at hand.
Time and again, this Court has ruled that the individual
employee's right not to join a union may be validly restricted by a
union security clause in a CBA[49] and such union security clause is
not a violation of the employee's constitutional right to freedom of
association.[50]
It is unsurprising that significant provisions on labor protection of
the 1987 Constitution are found in Article XIII on Social
Justice. The constitutional guarantee given the right to form
unions[51] and the State policy to promote unionism[52] have social
justice considerations. In People's Industrial and Commercial
Employees and Workers Organization v. People's Industrial and
Commercial Corporation,[53] we recognized that "[l]abor, being the
weaker in economic power and resources than capital, deserve
protection that is actually substantial and material."
The rationale for upholding the validity of union shop clauses in a
CBA, even if they impinge upon the individual employee's right or
freedom of association, is not to protect the union for the union's
sake. Laws and jurisprudence promote unionism and afford
certain protections to the certified bargaining agent in a unionized
company because a strong and effective union presumably
benefits all employees in the bargaining unit since such a
union would be in a better position to demand improved benefits
and conditions of work from the employer. This is the rationale
behind the State policy to promote unionism declared in the
Constitution, which was elucidated in the above-cited case
of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.[54]
In the case at bar, since the former FEBTC employees are deemed
covered by the Union Shop Clause, they are required to join the
certified bargaining agent, which supposedly has gathered the
support of the majority of workers within the bargaining unit in
the appropriate certification proceeding. Their joining the certified
union would, in fact, be in the best interests of the former FEBTC
employees for it unites their interests with the majority of
employees in the bargaining unit. It encourages employee
solidarity and affords sufficient protection to the majority status of
the union during the life of the CBA which are the precisely the
objectives of union security clauses, such as the Union Shop
Clause involved herein. We are indeed not being called to balance
the interests of individual employees as against the State policy of
promoting unionism, since the employees, who were parties in the
court below, no longer contested the adverse Court of Appeals'
decision. Nonetheless, settled jurisprudence has already swung
the balance in favor of unionism, in recognition that ultimately the
individual employee will be benefited by that policy. In the
hierarchy of constitutional values, this Court has repeatedly held
that the right to abstain from joining a labor organization is
subordinate to the policy of encouraging unionism as an
instrument of social justice.
Also in the dissenting opinion of Justice Carpio, he maintains that
one of the dire consequences to the former FEBTC employees who
refuse to join the union is the forfeiture of their retirement
benefits. This is clearly not the case precisely because BPI
expressly recognized under the merger the length of service of the
absorbed employees with FEBTC. Should some refuse to become
members of the union, they may still opt to retire if they are
qualified under the law, the applicable retirement plan, or the
CBA, based on their combined length of service with FEBTC and
BPI. Certainly, there is nothing in the union shop clause that
should be read as to curtail an employee's eligibility to apply for
retirement if qualified under the law, the existing retirement plan,
or the CBA as the case may be.
In sum, this Court finds it reasonable and just to conclude that the
Union Shop Clause of the CBA covers the former FEBTC
employees who were hired/employed by BPI during the effectivity
of the CBA in a manner which petitioner describes as
"absorption." A contrary appreciation of the facts of this case
would, undoubtedly, lead to an inequitable and very volatile labor
situation which this Court has consistently ruled against.
In the case of former FEBTC employees who initially joined the
union but later withdrew their membership, there is even greater
reason for the union to request their dismissal from the employer
since the CBA also contained a Maintenance of Membership
Clause.
A final point in relation to procedural due process, the Court is not
unmindful that the former FEBTC employees' refusal to join the
union and BPI's refusal to enforce the Union Shop Clause in this
instance may have been based on the honest belief that the
former FEBTC employees were not covered by said clause. In the
interest of fairness, we believe the former FEBTC employees
should be given a fresh thirty (30) days from notice of finality of
this decision to join the union before the union demands BPI to
terminate their employment under the Union Shop Clause,
assuming said clause has been carried over in the present CBA
and there has been no material change in the situation of the
parties.
WHEREFORE, the petition is hereby DENIED, and the Decision
dated September 30, 2003 of the Court of Appeals is AFFIRMED,
subject to the thirty (30) day notice requirement imposed
herein. Former FEBTC employees who opt not to become union
members but who qualify for retirement shall receive their
retirement benefits in accordance with law, the applicable
retirement plan, or the CBA, as the case may be.
SO ORDERED.
[16]
Id. at 66.
Corona, C.J., Peralta, Del Castillo, Abad, Villarama,
Jr., and Perez, JJ., concur. [17] Id. at 17.
Carpio, J., see dissenting opinion.
Carpio Morales, J., joins the dissents of J. Carpio and Brion. [18]
Id. at 68-69.
Velasco, Jr., J., on official leave.Mendoza,
Brion, J., pls. see dissenting opinion. [19]
Inguillo v. First Philippine Scales, Inc., G.R. No. 165407, June
Nachura, and Bersamin, JJ., joins J. Brion dissent. 5, 2009, 588 SCRA 471, 485-486.

Endnotes: [20] 259 Phil. 1156, 1167-1168 (1989).

Victoriano v. Elizalde Rope Workers' Union, G.R. No. L-25246,

[21]

[1]
Presidential Decree No. 442, as amended. Emphasis added. September 12, 1974, 59 SCRA 54, 68.

Penned by Associate Justice Arsenio J. Magpale (ret.) with

[2] Freeman Shirt Manufacturing Co. v. Court of Industrial
[22]

Associate Justices Conrado M. Vasquez, Jr. and Bienvenido L. Relations, G.R. No. L-16561, January 28,1961, 1 SCRA 353,
Reyes, concurring; rollo, pp. 15-25. 356; Sta. Cecilia Sawmills v. Court of Industrial Relations, G.R.
No. L-19273-4, February 29, 1964, 10 SCRA 433, 437.
[3] Rollo, pp. 41-42.
Metrolab Industries, Inc. v. Confesor, G.R. No. 108855,
[23]

[4]
Id. at 86-93. February 28, 1996, 254 SCRA 182, 197.

[5]
Id. at 78. Manila Mandarin Employees Union v. National Labor Relations
[24]

Commission, G.R. No. 76989, September 29, 1987, 154 SCRA

[6]
Id. at 79. 368, 375 (citing Lirag Textile Mills, Inc. v. Blanco, G.R. No. L-
27029, November 12, 1981, 109 SCRA 87 and Manalang v. Artex
[7] Id. at 18. Development Company, Inc., G.R. No. L-20432, October 30,
1967, 21 SCRA 561).
[8]
Id. at 16-17.
[25]
Id. at 375.
[9]
Records, p. 8.
[26]
Rollo, p. 79.
[10]
Id. at 18.
Filipinas Port Services, Inc. v. National Labor Relations
[27]

[11]
Id. at 19. Commission, G.R. No. 97237, August 16, 1991, 200 SCRA 773,
780.
[12]
Supra note 4.
Sundowner Development Corporation v. Drilon, G.R. No.
[28]

[13]
Rollo, p. 19. 82341, December 6, 1989, 180 SCRA 14, 18.

[14]
Id. at 24.
[29]
Art. 283 of the Labor Code provides:

[15]
Rollo, pp. 229-231. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. -
The employer may also terminate the employment of any
employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the worker and Ministry of
Labor an Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of
labor saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least one (1)
month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one
(1) month pay or at least one-half (1/2) month pay for every year
of service, whichever is higher. A fraction of at least six (6)
months shall be considered as one (1) whole year.
[30]
Art. 287 of the Labor Code states:
RETIREMENT. - Any employees may be retired upon reaching the
retirement age established in the collective bargaining agreement
or other applicable employment contact.
In case of retirement, the employee shall be entitled to receive
such retirement benefits as he may have earned under existing
laws and any collective bargaining agreement and other
agreements: Provided, however, That an employee's retirement
benefits under any collective bargaining and other agreements
shall not be less than those provided herein.
In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an
employee upon reaching the age of sixty (6) years or more, but
not beyond sixty-five (65) years which is hereby declared the
compulsory retirement age, who has served at least five (5) years
in the said establishment may retire and shall be entitled to
retirement pay equivalent to at least one half (1/2) month salary
for every year of service, a fraction of at least six (6) months
being considered as one whole year.
Unless the parties provide for broader inclusions, the term "one-
half (1/2) month salary" shall mean fifteen (15) days plus one
twelfth (1/12) of the 13th-month pay and the cash equivalent of
not more than five (5) days of service incentive leaves.
An underground mining employee upon reaching the age of fifty
(50) years or more, but not beyond sixty (60) years which is
hereby declared the compulsory retirement age for underground
mine workers, who has served at least five (5) years as
underground mine workers, who has served at least (5) years as
underground mine worker, may retire and shall be entitled to all
the retirement benefits provided for in this Article. (R.A. No.8558,
approved on February 26, 1998.)
Retail, service and agricultural establishments or operations
employing not more than ten (10) employees or workers are
exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject
to the final provisions provided under Article 288 of this Code.
[31]
90 ALR 2D 975, 983-984.
[32]
Art. 283. Closure of establishment and reduction of
personnel. The employer may also terminate the employment of
any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before
the intended date thereof. In case of termination due to the
installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to
at least his one (1) month pay or to at least one (1) month pay
for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay
shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1)
whole year.
[33]
G.R. No. 123793, June 29, 1998, 291 SCRA 511, 521-522.
[34] CA rollo, p. 218.
[35]
Article 256 of the Labor Code provides:
Art. 256. Representation issue in organized
establishments. In organized establishments, when a verified
petition questioning the majority status of the incumbent
bargaining agent is filed before the Department of Labor and
Employment within the sixty-day period before the expiration of
the collective bargaining agreement, the Med-Arbiter shall
automatically order an election by secret ballot when the verified
petition is supported by the written consent of at least
twenty-five percent (25%) of all the employees in the
bargaining unit to ascertain the will of the employees in the
appropriate bargaining unit. To have a valid election, at least a
majority of all eligible voters in the unit must have cast their
votes. The labor union receiving the majority of the valid votes
cast shall be certified as the exclusive bargaining agent of all the
workers in the unit. When an election which provides for three or
more choices results in no choice receiving a majority of the valid
votes cast, a run-off election shall be conducted between the labor
unions receiving the two highest number of votes: Provided, that
the total number of votes for all contending unions is at least fifty
percent (50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall
continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is
filed. (Emphases supplied.)
[36]
Article 234 of the Labor Code provides:
Art. 234. Requirements of registration. Any applicant labor
organization, association or group of unions or workers shall
acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following
requirements. x x x
xxxx
c. The names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining unit where it
seeks to operate;
[37]
Article 238 of the Labor Code provides "[t]he certificate of
registration of any legitimate labor organization, whether national
or local, shall be cancelled by the Bureau if it has reason to
believe, after due hearing, that the said labor organization no
longer meets one or more of the requirements herein prescribed."
G.R. No. L-20764, November 29, 1965, 15 SCRA 391, 395-
[38]
397.
Article 248. Unfair Labor Practices of Employers. - It shall be
[39]
unlawful for an employer to commit any of the following unfair
labor practice: x x x
(e) To discriminate in regard to wages, hours of work, and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in
this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining
agent as a condition for employment, except those
employees who are already members of another union at
the time of the signing of the collective bargaining
agreement.
Employees of an appropriate collective bargaining agent may be
assessed a reasonable fee equivalent to the dues and other fees
paid by members of the recognized bargaining agent, if such non-
union members accept the benefits under the collective
agreement: Provided, that the individual authorization required
under Article 242, paragraph (o) of this Code shall not apply to
the non-members of the recognized collective bargaining agent. x
x x. (Emphasis supplied.)
[40]
Supra note 21.
[41] G.R. No. 84433, June 2, 1992, 209 SCRA 484.
[42]
Victoriano v. Elizalde Rope Workers' Union, supra note 21 at
72.
[43]
Id. at 67-68.
[44]
G.R. No. L-27113, November 19, 1974, 61 SCRA 93.
[45] G.R. No. L-26097, November 29, 1977, 80 SCRA 350.
[46]
G.R. No. L-38178, October 3, 1985, 139 SCRA 30.
[47]
G.R. No. 88957, June 25, 1992, 210 SCRA 339.
G.R. Nos. 81883 and 82111, September 23, 1992, 214 SCRA
[48]
174.
Dela Salle University v. Dela Salle University Employees
[49]
Association, 386 Phil. 569, 590 (2000).
Liberty Flour Mills Employees v. Liberty Flour Mills, Inc., supra
[50]
note 20.
[51]
Article III, Section 8 of the 1987 Constitution states: "The
right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not be abridged."
[52]
Article XIII, Section 3 of the 1987 Constitution provides:
Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as
may be provided by law.
The State shall promote the principle of shared responsibility
between workers and employers and the preferential use of
voluntary modes in settling disputes, including conciliation, and
shall enforce their mutual compliance therewith to foster industrial
peace.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the
fruits of production and the right of enterprises to reasonable
returns to investments, and to expansion and growth.
[53]
G.R. No. L-37687, March 15, 1982, 112 SCRA 440, 455.
[54]
Supra note 20.
DISSENTING OPINION
BRION, J.:
I dissent.
Out at outset, I wish to clarify what this case is all about and what
it is not about.
The case is simply about the interpretation and application, in a
merger situation, of union security clauses in the petitioner's
collective bargaining agreement (CBA) with the respondent
union. To be exact, the basic underlying issue of the case is about
the effects of merger on the merging corporations' employees - an
issue that arose soon after the merger and one that is still current
despite the execution of two subsequent CBAs. It is not an issue,
therefore, that simply must be resolved because it will recur, as
the ponencia posits; it must be resolved because it is a live
dispute that now exists between the parties.
The case is not about the constitutional validity of union security
provisions in CBAs or their application. No constitutional issue has
been raised either in the petition or in the respondent's comment,
although I invoked the Constitution in this Dissenting Opinion for
interpretative purposes. Justice Antonio T. Carpio, in his own
dissent, injects a constitutional issue by positing that the
employees absorbed by the surviving corporation in the merger
have the constitutional right not to join any union, and cannot be
compelled to join, under the union, security clauses whose
interpretation and application are disputed.

The Bank of the Philippine Islands (BPI or successor corporation)
merged with the Far East Bank and Trust Company
(FEBTC or merged corporation) pursuant to an Article and Plan of
Merger (Merger Plan) that saw all the assets and liabilities of
FEBTC transferred to, and absorbed by, BPI, with the latter as the
surviving as well as the successor corporate entity. No specific
provision in the Merger Plan referred to the FEBTC employees,
specifically, what their situation would be under the merger. BPI,
however, absorbed all the FEBTC employees (absorbed
employees) as its own employees with their status of
employment, tenure, salaries and benefits under the FEBTC
maintained.
The BPI Employees Union-Davao Chapter Federation of Unions in
BPI Unibank (the union or respondent union) is the exclusive
bargaining agent of BPI's rank-and-file employees in Davao
City. The absorbed employees in Davao City did not belong to
any labor union while they were with the FEBTC. The union now
claims that the absorbed employees whose positions fall within
the bargaining unit it represents should now join the union as
members pursuant to the following provisions of the existing CBA:
ARTICLE I
Section 1. Recognition and Bargaining Unit. The BANK recognizes
the UNION as the sole and exclusive bargaining representative of
all rank-and-file employees of the Bank offices in Davao City.
xxxx
ARTICLE II
Section 1. Maintenance of Membership. All employees within the
bargaining unit who are members of the Union on the date of
the effectivity of this Agreement as well as employees within
the bargaining unit who subsequently join or become
members of the Union during the lifetime of this
Agreement shall, as a condition of their continued employment
with the Bank, maintain their membership in the Union in good
standing. [Emphasis supplied.]
Section 2. Union Shop. New employees falling within the
bargaining unit as defined in Article I of this Agreement, who
may hereafter be regularly employed by the Bank shall,
within thirty (30) days after they become regular
employees, join the Union as a condition of their continued
employment. It is understood that membership in good standing
is a condition of their continued employment with the Bank.
[Emphasis supplied.]
Some of the absorbed employees refused to join the union while
BPI failed to act on the grievance filed by the union after it had
asked BPI to dismiss the refusing absorbed employees. BPI took
the position that the absorbed employees are not "new"
employees who, under the terms of the union security provisions,
are under obligation to join the union to maintain their
employment.
When settlement of the disagreement at the grievance machinery
was not reached, the union referred the matter to voluntary
arbitration. The voluntary arbitrator ruled in favor of the refusing
absorbed employees and BPI, holding that the refusing employees
are not new employees to whom the union shop provision of the
CBA applies. On appeal, the Court of Appeals reversed and set
aside the voluntary arbitrator's ruling.
The ponencia affirms the CA decision and reiterates that all
absorbed employees falling within the bargaining unit should join
the union pursuant to the CBA's union security clauses. In so
ruling, the ponencia holds that:
a. The absorbed employees are "new" BPI employees
to whom the union shop provision of the CBA
applies;[1]
b. The absorbed employees do not fall within the
exceptions recognized by law and jurisprudence to
be excluded from the application of union security
provisions; thus, the only issue is whether the
absorbed employees "are excluded by the express
terms of the existing CBA between the petitioner and
the respondent";[2]
c. Unless expressly assumed, labor contracts, such as
employment contracts and CBAs, are not enforceable
against the transferee of an enterprise, labor
 contracts being in personam, thus binding only
between the parties;[3]
d. BPI's role as the employer of the former FEBTC
employees was not by operation of law nor a legal
consequence of the merger agreement;[4] BPI simply
voluntarily hired or contracted with these absorbed
employees;[5]
It is contrary to public policy to declare the absorbed
employees a part of the assets or liabilities of FEBTC that were
transferred to BPI through the Merger Plan. The transferred
assets and liabilities should be deemed to refer only to property
rights and obligations of FEBTC and do not include employment
contracts of its personnel;[6] and
The constitutional associational right not to join the union does
not apply to the absorbed employees because they fall within a
collective bargaining unit and are covered by a CBA whose union
security clauses are constitutionally valid.[7]
I disagree with points (a) to (e) and submit in point (f) that the
constitutional issue raised is not material to the resolution of the
issues raised.
Parenthetically, the non-involvement of affected employees at this
level of the litigation (a new point the modified ponencia raised) is
not a stumbling block to the present petition as the ponencia now
posits. In interpreting a CBA provision, the real parties in interest
are the bargaining parties - the company and the union - the
agreement is between them. Hence, it matters not that the
affected employees, mere necessary parties, are not direct parties
in the present petition for review on certiorari. For ease of
appreciation, I submit the following discussions topically
presented, not necessarily in the order of
the ponencia's presentation of positions as shown above.
The Merger
A basic point of disagreement with the ponencia relates to the
approach in resolving the issues raised. The ponencia appears to
consider only the purely labor law aspect of the case in
determining the relationships among BPI, FEBTC and the absorbed
employees. More than anything else, however, the issues before
us are rooted in the corporate merger that took place; thus, the
first priority in resolving the issues before us should be to consider
and analyze the nature and consequences of the BPI-FEBTC
merger - essentially a matter under the Corporation Code. On the
basis of this analysis, the application of labor law can follow.
Unlike the old Corporation Code that did not contain express
provisions on mergers and consolidations, the present law now
authorizes, under Section 76,[8] two or more corporations to
merge under one of the participating constituent corporations, or
to consolidate into a new single corporation called the
consolidated corporation. In either case, no liquidation of the
assets of the dissolved corporations takes place, and the surviving
or consolidated corporation assumes ipso jure the liabilities of the
dissolved corporations, regardless of whether the creditors
consented to the merger or consolidation.[9]
The transaction between BPI and FEBTC was a merger under one
of the modes provided under Section 76 -- i.e., the two
corporations, BPI and FEBTC, merged with FEBTC fading away as
a corporate entity and BPI surviving as FEBTC's successor. Section
80 of the Corporation Code[10] provides for the legal effects of a
merger. As applied to BPI and FEBTC, the effects were:
a. BPI and FEBTC became a single corporation with BPI as the
surviving corporation;
b. The separate corporate existence of FEBTC ceased;
c. BPI now possesses all the rights, obligations, privileges,
immunities, and franchises of both BPI and FEBTC;
d. All property, real or personal, and all receivables due on
whatever choses in action, and all other interest of,
belonging to, or due to FEBTC are deemed transferred to
BPI;
e. BPI becomes responsible and liable for all the liabilities and
obligations of FEBTC as if it had incurred these liabilities or
obligations;
f. Any claim, action, or proceeding pending by or against
FEBTC should be prosecuted by or against BPI; and
 g. Neither the rights of creditors nor any lien on the property
of FEBTC is impaired by the merger.
In short, FEBTC ceased to have any legal personality, and BPI
stepped into everything that was FEBTC's, pursuant to the law and
the terms of their Merger Plan.
An overview of the whole range or levels of transfers of corporate
assets and liabilities, as established by jurisprudence, is helpful
and instructive for the full appreciation of the nature of the BPI-
FEBTC merger. These levels of transfers are: (1) the assets-only
level; (2) the business enterprise level; and (3) the equity
level. Each has its own impact on the participating corporations
and the immediately affected parties, among them, the
employees.[11] Beyond and encompassing all these levels of
transfers is total corporate merger or consolidation.
The asset-only transfer affects only the corporate seller's raw
assets and properties; the purchaser is not interested in the
seller's corporate personality - its goodwill, or in other factors
affecting the business itself. In this transaction, no complications
arise affecting the employer-employee relationship, except
perhaps the redundancy of employees whose presence in the
selling company is affected by the sale of the chosen assets and
properties, but this is a development completely internal to the
selling corporation.[12]
In the business enterprise level transaction, the purchaser's
interest goes beyond the assets and properties and extends into
the seller corporation's whole business and "earning capability,"
short of the seller's juridical personality. Thus, a whole business is
sold and purchased but the parties retain their respective juridical
personalities. In this type of transaction, employer-employee and
employer liability complications arise, as can be seen from a
survey of the cases on corporate transfers that this Court has
already passed upon.[13]
A transaction at the equity level does not disturb the
participating corporations' separate juridical personality as both
corporations continue to remain in existence; the purchaser
corporation simply buys the underlying equity of the selling
corporation which thus retains its separate corporate
personality. The selling corporation continues to run its business,
but control of the business is transferred to the purchaser
corporation whose control of the selling corporation's equity
enables it to elect the members of the selling corporation's board
of directors.[14]
As pointed out above, a total merger or consolidation goes way
beyond all three levels of dealings in corporate business, assets
and property. In a total merger, the merged corporation transfers
everything - figuratively speaking, its "body and soul" - to the
surviving corporation. This was what happened in the BPI-FEBTC
merger.
Corporate Assets and Employment Contracts
A corporation possesses tangible and intangible assets and
properties that, operated on and managed by the corporation's
human resources, become an operating business. The intangibles
consist, among others, of the corporate goodwill, credits and other
incorporeal rights. The human resources that the corporation
relies upon to run its business, strictly speaking, are not corporate
assets because the corporation does not "own" the people running
its business. But corporations are bound to their managers and
employees by various forms of contracts of service, such as
individual employment contracts, consultancies and other
instruments evidencing personal service. In this sense, a
corporation has rights over the human resources it has contracted
to run and serve its business. These contractual rights, because
they are exercised over those who enable the company to fulfill its
goal of production, can be classified as corporate assets. But
unlike the usual assets, they are unique and special, as contracts
of personal service embody rights in personam, i.e., intransferable
rights demandable by the parties only against one another.[15]
An employment contract or contract of service essentially has
value because it embodies work - the means of adding value to
basic raw materials and the processes for producing goods,
materials and services that become the lifeblood of corporations
and, ultimately, of the nation. Viewed from this perspective, the
employment contract or contract of service is not an ordinary
agreement that can be viewed in strictly contractual sense. It
embodies work and production and carries with it a very
significant element of public interest; thus, the Constitution, no
less, accords full recognition and protection to workers and their
contribution to production. Section 18, Article II of the
Constitution provides:
SECTION 18. The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their
welfare.
Another recognition of the value of work, production and labor to
the national economy is reflected in Article XII on National
Economy and Patrimony whose Section 1 states:
The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained
increase in the amount of goods and services produced by
the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all,
especially the underprivileged.
The State shall promote industrialization and full employment
based on sound agricultural development and agrarian
reform, through industries that make full and efficient use
of human and natural resources, and which are competitive in
both domestic and foreign markets. However, the State shall
protect Filipino enterprises against unfair foreign competition and
trade practices.
In the pursuit of these goals, all sectors of the economy and all
regions of the country shall be given optimum opportunity to
develop. Private enterprises, including corporations,
cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership. [Emphasis
supplied.]
From the point of view of labor itself, Article XIII, Section 3
commands:
The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for
all. [Emphasis supplied.]
These constitutional statements and directives, aside from telling
us to consider work, labor and employment beyond
purely contractual terms, also provide us directions on how our
considerations should be made, i.e., with an eye on the interests
they represent - the individual, the corporate, and more
importantly, the national.
In a corporate merger situation - where one corporation totally
surrenders itself, giving up to another corporation even the human
resources that enable its business to operate - the terms of the
Constitution bar us from looking at the corporate transaction
purely as a contract that should be analyzed purely on the basis of
the law on contracts, in the way the ponencia suggested. Nor can
we accept as valid the ponencia's pronouncement, apparently in
line with its purely contractual analysis, that the transfer of all
assets and liabilities in a merger situation, as in this case, refers
only to FEBTC's property rights and obligations and does not
include the employment contracts of its personnel.
To my mind, due consideration of Section 80 of the Corporation
Code, the constitutionally declared policies on work, labor and
employment, and the specific FEBTC-BPI situation - i.e., a merger
with complete "body and soul" transfer of all that FEBTC embodied
and possessed and where both participating banks were willing
(albeit by deed, not by their written agreement) to provide for the
affected human resources by recognizing continuity of
employment - should point this Court to a declaration that in a
complete merger situation where there is total takeover by one
corporation over another and there is silence in the merger
agreement on what the fate of the human resource complement
shall be, the latter should not be left in legal limbo and should be
properly provided for, by compelling the surviving entity to absorb
these employees. This is what Section 80 of the Corporation Code
commands, as the surviving corporation has the legal obligation to
assume all the obligations and liabilities of the merged constituent
corporation.
Not to be forgotten is that the affected employees managed,
operated and worked on the transferred assets and properties as
their means of livelihood; they constituted a basic component of
their corporation during its existence. In a merger and
consolidation situation, they cannot be treated without
consideration of the applicable constitutional declarations and
directives, or, worse, be simply disregarded. If they are so
treated, it is up to this Court to read and interpret the law so that
they are treated in accordance with the legal requirements of
mergers and consolidation, read in light of the social justice,
economic and social provisions of our Constitution. Hence, there
is a need for the surviving corporation to take
responsibility for the affected employees and to absorb
them into its workforce where no appropriate provision for
the merged corporation's human resources component is
made in the Merger Plan.
This recognition is not to objectify the workers as assets and
liabilities, but to recognize - using the spirit of the law and
constitutional standards - their necessary involvement and need
to be provided for in a merger situation. Neither does this step,
directly impacting on the employees' individual employment
contracts, detract from the in personam character of these
contracts. For in a merger situation, no change of employer
is involved; the change is in the internal personality of the
employer rather than through the introduction of a new
employer which would have novated the contract. This
conclusion proceeds from the nature of a merger as a corporate
development regulated by law and the merger's implementation
through the parties' merger agreement.
In the context of this case, BPI's relationship with the absorbed
employees cannot be equated with a situation involving
voluntary hiring, as the ponencia posited. Note that
voluntary hiring, as the basis of the relationship, presupposes that
employment with FEBTC had been terminated - a development
that, as explained above, did not take place; the employment of
the absorbed employees simply continued by operation of law,
specifically by the combined operation of the Corporation Code
and the Labor Code under the backdrop of the labor and social
justice provisions of the Constitution.
An individual employee can, at any time, in a consensual and in
personam employment contract, walk away from it, subject only
to the adjustment of the obligations he has incurred under the
contractual relationship that binds him; a contrary rule would
violate the involuntary service provision of the
Constitution.[16] Ordinarily, walking away would be an act of
voluntary resignation that entitles the employee only to benefits
that have been earned and accrued; a merger situation is
differentiated by the separation pay[17] that the Merger Plan
should at least provide under the combined application of the
Corporation Code,[18] as well as the just and authorized causes for
termination of employment under the Labor Code.[19] Otherwise,
the employee has the right to be secure in his tenure without loss
of seniority, benefits and level of pay.[20]
The above view reconciles the terms of the Constitution, the
Corporation Code, and the Labor Code, and directly conflicts with
the ponencia's views that: (1) BPI's role as employer of the
absorbed FEBTC employees was not by operation of law or a legal
consequence of the merger, but by BPI's voluntary act of hiring
the employees after the merger; (2) the employees' contracts are
purely in personam and are binding only between the parties; and
(3) it is contrary to public policy to declare the absorbed
employees to be part of the assets or liabilities of FEBTC that were
transferred to BPI under the Merger Plan since the transferred
assets and liabilities should be deemed to refer only to property
rights and obligations of FEBTC and do not include the
employment contracts of its personnel.
To encapsulate the discussions above in relation with
the ponencia's, BPI was the successor of FEBTC in the latter's
employment relationships, and the succession occurred both by
contract and by operation of law. The two corporations decided to
merge; necessarily, their merger - made through a merger
agreement - is governed by the Corporation Code that recognizes
the merger and its terms, including the "body and soul"
succession to BPI of everything that was FEBTC's.
This succession included FEBTC's employment contracts, subject
to the right of the employees to reject or accept the succession
because employment contracts are essentially in personam. It is
immaterial that BPI's assumption of the role of employer was not
embodied in the merger agreement; in the absence of clear
agreement terms, the law - specifically, Section 80 of the
Corporation Code - takes over and governs. What appeared to be
BPI's voluntary act of "hiring" the former FEBTC employees is
legally insignificant as BPI was in fact obliged under the law to
assume the role of employer to the FEBTC employees in the
absence of an agreement on how the merging parties would treat
the employment contracts and the employees they cover.
In support of its position, the ponencia cites the American Law
Reports on "the consequences of voluntary mergers on the right
to employment and seniority rights" with the view that these are
"persuasive and illuminating." The first case cited is Carver v.
Brien,[21] which relates to the recognition of seniority in a
consolidation of operations situation. Another is Moore v.
International Brotherhood of Teamsters,[22] which refers to the
absorption by a trucker of the business of another private trucker
or common carrier, and holds that the seniority of affected
employees depends on the agreement between the trucker and
the unions involved.
I do not believe that these cited cases are relevant to the present
case, particularly for the purposes the ponencia cites them; these
cited cases can neither be "persuasive nor illuminating" as they do
not even approximate the factual situation of the present case so
that their rulings can be applied to the latter. No corporate
merger was involved in the cited cases, in the same sense as in
the present case; in fact, what was involved in Carver was merely
a consolidation of operations, while Moore merely related to the
absorption of the business of one corporation by another, not to a
merger. As painstakingly explained above, these are dealings in
corporate interests and properties that are lesser in extent and
scope than total merger or consolidation and should be
distinguished from the latter under the terms of Section 80 of our
Corporation Code. Thus, the cited cases and rulings should not at
all be considered in resolving the issues posed in the present case.
From another perspective, the differing consequences, discussed
above,[23] arising from the different modes of transfers of
corporate assets and liabilities and corporate consolidations,
apparently escape the ponencia. Thus, it has no hesitation at all in
citing American cases that do not at all involve fact situations
equivalent to the merger envisioned by Sections 76 and 80 of the
Corporation Code. This is a fatal error, leading no less to
the ponencia's conclusion that the issue before us is purely a labor
law issue, divorced from its corporation law context.
That an employment contract is in personam cannot be disputed
as this is the essence of such contract and what this contract
should be in light of the constitutional prohibition against
involuntary servitude.[24] But as above pointed out, this is not
wholly and strictly how an employment contract is to be viewed
under our Constitution. While these contracts are binding only
between the parties, they resonate with public interest that the
Constitution and our laws have seen fit to regulate; employment
contracts translate to service which itself translates to productive
work that the economy and the nation need.
In the BPI-FEBTC situation, these employment contracts are part
of the obligations that the merging parties have to account and
make provisions for under the Constitution and the Corporation
Code; in the absence of any clear agreement, these employment
contracts subsist, subject to the right of the employees to reject
them as they cannot be compelled to render service but can only
be made to answer in damages if the rejection constitutes a
breach.[25] In other words, in mergers and consolidations,
these contracts should be held to be continuing, unless
rejected by the employees themselves or declared by the
merging parties to be subject to the authorized causes for
termination of employment under Sections 282 and 283 of
the Labor Code. In this sense, the merging parties' control
and business decision on how employees shall be affected,
in the same manner that the affected employees' decision
on whether to abide by the merger or to opt out, remain
unsullied. Unfortunately, this is another dimension of a merger
situation that escapes the ponencia's short-sighted reading of
corporate mergers in general, and of the merger between BPI and
FEBTC in particular.
From these perspectives, it appears clearly that the ponencia has
not fully appreciated how mergers operate and how they affect
employment contracts when it viewed employment contracts
as strictly contractual and binding only between the parties, with
no effective legal intervention from the law in terms of the
combined operation of the Constitution, the Corporation Code and
the Labor Code.
BPI's Assumption of Role as Employer
As soon as the BPI-FEBTC merger took effect, FEBTC completely
faded out as employer and BPI succeeded to this role. BPI's
assumption of this role is not in the sense of a novation, i.e., that
a change of employer took place as the employment contracts
were transferred to BPI. As stated above, instead of the clear
change or substitution of an employer for another that would have
taken place in a novated employment contract (e.g., such that
would have taken place if only a business enterprise level of
transfer took place where the whole business is transferred,
accompanied by a substitution of the employer running the
business), what took place in the BPI-FEBTC total merger was an
internal change; BPI succeeded to everything that was FEBTC's,
thereby assuming the latter's identity and role as employer. In
this sense, BPI simply expanded its role as an employer to
encompass the employees who were previously identified as
FEBTC employees.
The effect of this development on the internal BPI employment
situation in a non-unionized environment would not have posed
any difficulty, as there would simply be an adjustment of working
conditions based on the premise that the absorbed employees
would not suffer any diminution of the terms and conditions of
employment under their contracts.
Where a union is present in a merger situation, complications
arise as the adjustment will not only involve the assumption of the
role of the merged corporation as employer and the non-
diminution of the terms and conditions of employment; existing
terms and conditions of the relationship with the union must as
well be observed and respected. This union scenario gave rise to
the present case and at its core asks: what terms and conditions
of relationship with the union must be observed in light of BPI's
expanded role as an employer.
Union presence at the workplace is generally most effective when
it has a current CBA with the employer. This agreement
necessarily implies that a bargaining unit has been properly
defined and delineated in the organized portion of the employer's
establishment. In the present case, the establishment is BPI's
Davao Branch and the defined bargaining unit covers the rank-
and-file positions in the Branch. At the minimum, the absorbed
employees working within BPI's Davao Branch who are classified
as rank-and-file employees and who are not expressly
excluded from coverage should be covered by the collective
bargaining unit and by the CBA. Note that this coverage by the
bargaining unit is separate from compulsory union membership
which is provided under the union security clauses discussed
below. Employees may come within the coverage of the
bargaining unit, but may still be exempt from compulsory union
membership under the union security clauses. [26]
The CBA's Union Security Clauses
The CBA at BPI contains two union security provisions whose
respective roles are to protect and to compel union membership
within the effective term of the CBA.
The first is the Maintenance of Membership provision whose
role is to protect the union's current membership. By its
express terms, it covers and renders continued union membership
compulsory for: (1) those who were already union members at
the time the CBA was signed; and (2) the new employees who
will become regular during the life of the CBA. The first
classification of union members directly implies that BPI
employees who were not members of the union, at the time
of the signing of the CBA, are not compelled to be union
members.
Thus, on the basis of this union security clause and the
compulsory membership it compels, there are three kinds of
employees at BPI, namely - (1) those who are not compelled to
be union members because they were not union members at the
time the CBA was signed; (2) those who are compelled to
continue membership because they were already union
members when the CBA was signed; and (3) those
who, previously non-regular employees, are compelled to be
union members after they attain regular status.
As applied to the absorbed employees, the maintenance of
membership clause would apply to them only if they voluntarily
joined the union after the BPI-FEBTC merger; they would
thereafter have to maintain their union membership under pain of
dismissal.
The second union security provision is entitled Union Shop whose
role is to compel the membership of those who are not yet union
members. To quote its direct terms, it refers to "[N]ew
employees falling within the bargaining unit as defined in
Article I of this Agreement, who may hereafter be regularly
employed by the Bank."[27] Strictly speaking, this definition is
defective as it speaks of new non-regular employees who are not
therefore members of the bargaining unit yet. The provision
should properly read: new employees occupying positions falling
within the bargaining unit.
Read closely, this reference to "new employees" is not a definition
that specifies who are new. It simply refers to those
employees whose positions fall within the bargaining unit and who
are subsequently given regular status; they must join the union as
a condition of their continued employment.

By its reference to employees who are as yet on non-regular
status, what is clearly a requirement for the application of the
union shop clause, as framed by this provision, is the grant of
regular status. In other words, it applies to those recently given
regular employment and who, by necessary implication, were
hired as non-regular employees and were thereafter accorded
regular status.
In contrast with the non-regular employees that the CBA clearly
referred to, absorbed FEBTC employees did not undergo the
process of waiting for the grant of regular status; their regular
employment simply continued from FEBTC to BPI without any
break because BPI only succeeded to the role of FEBTC as
employer in a merger, where the same employment was
maintained and only the employer's personality changed. Thus,
they cannot be "new" under the terms of the union security
clause. For that matter, they are not even "new" under the
ordinary meaning of this word which connotes something that
recently came into existence, use, or a particular state or
relation.[28]
Even granting the validity of the ponencia's position that the union
shop provision as written does not distinguish between non-
regular employees, who subsequently became regular, and those
who were hired and immediately granted regular status without
passing through a non-regular phase, still the union security
clause would not cover the absorbed employees because they do
not fall under either classification.
An intrinsic distinction exists between the absorbed employees
and those who are hired as immediate regulars, which distinction
cannot simply be disregarded because it establishes how the
absorbed employees came to work for BPI. Those who are
immediately hired as regulars acquire their status through the
voluntary act of hiring done within the effective term or period of
the CBA. The absorbed employees, on the other hand, merely
continued the employment they started with FEBTC; they came to
be BPI employees by reason of a corporate merger that changed
the personality of their employer but did not at all give them any
new employment. Thus, they are neither "new" employees nor
employees who became regular only during the term of the CBA in
the way that newly regularized employees become so. They were
regular employees under their present employment long before
BPI succeeded to FEBTC's role as employer.
It may well be asked: what then is the classification under the
CBA of the absorbed employees whose positions fall within the
bargaining unit? As discussed above, they cannot be new
employees. In fact, they are more similar to the "old" employees,
if their continuity of service will be considered. This
characterization, nevertheless, is clearly inapt since they cannot
also be treated in exactly the same way as the pre-merger BPI
employees. Besides, being "old" employees will not compel them
to join the union under the maintenance of membership provision
as they never had any union membership to maintain.
Ultimately, the absorbed employees are best recognized for what
they really are - a sui generis group of employees whose
classification will not be duplicated until BPI has another merger
where it would be the surviving corporation and no provision
would be made to define the situation of the employees of the
merged constituent corporation. Significantly, this classification
- obviously, not within the contemplation of the CBA parties
when they executed their CBA - is not contrary to, nor
governed by, any of the agreed terms of the existing CBA on
union security, and thus occupies a gap that BPI, in the exercise
of its management prerogative, can fill.
In the meantime, whether to join or not to join the union is a
choice that these absorbed employees will have to make after the
next CBA, when their status becomes subject to the results of the
collective negotiations.
In a resulting purely maintenance of membership regime,
those who would not opt to join the union carry no obligation to
maintain any union membership. In a union shop regime, the
absorbed employees may remain non-union members until an
agreed specified time when union membership is declared
obligatory as a condition for continued employment. With the
same effect would be the stricter closed shop clause that
compels management to hire only union members. In any of
these regimes, of course, compulsory membership shall
depend on the terms of the CBA on who would be subject
to compulsion and how compulsion would operate. As a
cautionary note to avoid similar problems in the future, it may be
best for the parties to incorporate terms expressly providing for
the situation of employees absorbed by reason of merger.

The Constitutional Question
The constitutional question, as framed by Justice Antonio T.
Carpio, arises under the view that the absorbed employees cannot
be covered by the union security clause and thereby be compelled
to join the union. As indicated at the beginning of this Opinion,
this question was never posed nor discussed by any of the parties
and, hence, is not a question presented for our consideration in
the present case. Besides, this is a question that may only arise
when and if the absorbed employees are considered bound under
the union security clauses to join the union. For these reasons, I
see no need to confront and resolve this constitutional issue.
In light of these considerations, I vote to GRANT the petition.
--------------------------------------------------------------------------
G.R. No. 102358 November 19, 1992
SPOUSES VICENTE and GLORIA MANALO, petitioners,
vs.
HON. NIEVES ROLDAN-CONFESOR, in her capacity as
Undersecretary of Labor and Employment, JOSE
SARMIENTO as POEA Administrator, CAREERS PLANNERS
SPECIALISTS INTERNATIONAL, INC., and SPOUSES VICTOR
and ELNORA FERNANDEZ, respondents.
BELLOSILLO, J.:
The Court views with grave concern the alarming incidents of
illegal recruitment which demonstrate all too clearly that overseas
employment has fast developed into a major source not only of
much-needed foreign exchanged but also, for the cunning and the
crafty, of easy money.
In response to a newspaper advertisement looking for a couple to
work as driver and tutor cum baby sitter, petitioners Vicente and
Gloria Manalo went to Career Planners Specialists International,
Inc. (CPSI), a licensed service contracting firm owned by private
respondents, the spouses Victor and Elnora Fernandez. After the
requisite interview and testing, they were hired to work for a
family in Saudi Arabia for a monthly salary of US$350.00 each.
According to petitioners, a placement fee of P40,000.00 was
imposed as a precondition for the processing of their papers. They
paid only P30,000.00 in cash and executed a promissory note for
the balance. Then they were allowed by respondent Elnora
Fernandez to sign their contract papers but did not issue a receipt
for the placement fee despite demand.
Shortly before boarding their flight to Saudi Arabia, petitioners
were handed their contracts. According to Gloria, she was
surprised to discover that her position had been changed to that
of domestic help. However, a CPSI employee assured her that the
change was only for the purpose of facilitating her departure and
did not in any way alter her employment as tutor. Incidentally,
CPSI provided petitioners with the Travel Exit Pass (TEP) of
Filipino Manpower Services, Inc. (FILMAN), a duly licensed
recruitment agency.
Contrary to the representation of her recruiter, Gloria was actually
hired as a domestic help and not as a tutor, so that after working
for only twenty-five (25) days in Jeddah, she returned to Manila.
Soon after, Vicente also resigned from his work and followed her
home. He could not stand the unbearable working conditions of
his employment. However, before leaving, he had to execute a
promissory note to cover his plane fare which respondent Victor
Fernandez advanced. Vicente also had to sign a quitclaim in favor
of CPSI and his employer.
On 29 February 1988, petitioners sued private respondents before
the Philippines Overseas Employment Administration (POEA)
charging them with illegal exaction, 1 false adverstisement, 2 and
violation of other pertinents laws, rules and regulations. They
demanded the refund of the amount exacted from them, plus
payment of moral damages and the imposition of administrative
sanctions. 3
Private respondents countered: (1) that Gloria applied as domestic
help fully aware that she could not be a tutor since she did not
speak Arabic; (2) that the promissory note for P10,000.00 was
required of petitioners because they were hired without paying
placement fees; (3) that it was unlikely for petitioners, who were
mature, educated and experienced in overseas work, to part with
P30,000.00 without securing a receipt; (4) that Vicente executed
a quitclaim in favor of CPSI duly authenticated by embassy
officials in Saudi Arabia; (5) that there was no impropriety in
having the employment papers of petitioners processed by
FILMAN because it was a sister company of CPSI, and private
respondents Victor and Elnora were officers in both agencies.
Private respondents prayed for the disqualification of petitioners
from overseas employment, and sought to recover from them the
SR 1,150 plane fare advanced by Victor for Vicente, P10,000.00
as placement fee evidenced by a promissory note, and attorney's
fees.
Mainly, on the basis of the transcripts of petitioners' testimonies in
the clarificatory questioning before the Rizal Provincial Prosecutor
in a related criminal case,4 the POEA issued its Order of 7 May
1990 giving more weight and credence to petitioners' version thus
— expenses prior to their deployment to Saudi Arabia.
After a careful evaluation of the facts and the
evidence presented, we are more inclined to give
weight to complainants' posture. Complainants'
version of the case spontaneously presented in their
pleadings is, to our mind, more convincing than
respondent's stand. Moreover, the manner by which
complainants narrated the whole incident inspired
belief in the allegation that respondent Career is
indeed guilty of illegal exaction. Thus, the actual
expenses incurred by herein complainants computed
hereinbelow less the allowable fees of P3,000.00
(P1,500.00 per worker, respondent being a service
contractor) should be returned to them.
Actual Expenses —
P30,000.00 — placement fees
14.00 — application form
300.00 — psychological test
1,400.00 — medical exam
P31,000.00 — total
less 3,000.00 — processing fees at
P1,500.00 per applicant
P28,714.00 — amount to be refunded
It appearing, however, that only respondent Career
Planners Specialist(s) Int'l. Inc., took part in the
collection of the aforesaid amount, the same should
be solely held liable.
We cannot likewise give credence to the Final
Quitclaim signed by complainant Vicente Manalo
before he left for the Philippines and presented by
respondent as defense. While its genuineness may
not be in question, we believe that it has no bearing
on the issue at bar. The aforesaid Quitclaim deals
more with matters concerning complainants'
employment abroad. However, the subject of the
instant claim is the refund of complainants'
On the other hand, we hold FILMAN liable for
allowing its document such as the TEP to be used by
other agency. Respondent's defense that there is
nothing wrong in this because FILMAN is a sister
company of CAREER does not merit consideration
because such practice is not allowed under the POEA
Rules and Regulations. A check with our records,
however, showed that respondent FILMAN had been
put in the list of forever banned agencies effective
April 5, 1989.
Anent the claim for moral damages, this Office has
no jurisdiction to entertain the same.
WHEREFORE, . . . the Authority of Career Planners
Specialist(s) International is hereby suspended for
four (4) months or in lieu thereof, a fine of
P40,000.00 is hereby imposed for illegal exaction on
two counts plus restitution of the amount of
P28,714.00 to herein complainants in both
instances.
Filipino Manpower Services, Inc. is hereby meted a
fine of P40,000.00 for two counts of
misrepresentation. Its perpetual disqualification from
recruitment activities is hereby reiterated.
 The claim for moral damages is dismissed for lack of
jurisdiction.
Respondent Career's counterclaim is likewise
dismissed or lack of merit. 5
Private respondents filed a motion for reconsideration and on 4
February 1991, POEA issued a resolution setting arise its earlier
order stating that —
It is worth mentioning at this point that our sole
basis for holding respondent Career liable for illegal
exaction was the uncorroborated testimony of the
complainants.
As we have consistently held, (the) charge of illegal
exaction is a serious charge which may cause the
suspension or cancellation of the authority or license
of the offending agency. Hence, it should be proven
and substantiated by a clear and convincing
evidence. Mere allegation of complainant that the
agency charged more than the authorized fee will
not suffice to indict the agency for illegal exaction
unless the allegation is supported by other
corroborative circumstantial evidence.
Thus, for lack of concrete evidence or proof to
support our initial findings, we are inclined to
reconsider the penalty imposed upon respondent.
Foregoing premises, the penalty of suspension
imposed upon respondent Career Planners
Specialist(s) International, Inc. pursuant to our
Order dated May 7, 1990 is hereby LIFTED.
Accordingly, the alternative fine of P40,000.00 which
was paid under protest by respondent is hereby
ordered refunded to them. 6
Petitioners appealed to the Secretary of Labor. On 5 July 1991,
then Undersecretary of Labor Ma. Nieves Roldan-Confesor (now
Secretary of Labor) sustained the reconsideration of POEA. Her
Order reads in part —
We find . . . no cogent reason or sufficient
justification to reverse or modify the assailed Order.
Records reveal that the only basis for holding
respondent Career Planners Specialist(s)
International, Inc., liable for illegal exaction, as held
in the previous POEA Order dated May 7, 1990 was
the uncorroborated testimony of the complainants.
There was no concrete evidence or proof to support
the POEA Administrator's initial findings.
We take this opportunity to inform the complainants
that the charge of illegal exaction is a serious charge
which may cause the suspension or cancellation of
the authority or license of a recruitment agency.
Therefore, said charge must be proven and
substantiated by clear and convincing evidence. A
mere allegation will not suffice to find an agency
liable for illegal exaction unless said allegation is
supported by other corroborative circumstantial
evidence. In this connection, records show that
complainants could not narrate the specific
circumstances surrounding their alleged payment of
the amount of P30,000.00. They could not even
remember the specific date when said amount was
paid to respondent agency. In addition, when
complainants were separately questioned as to how
the money was kept bundled together prior to being
handed to respondent agency for payment, Gloria
Manalo said it was wrapped in a piece of paper while
Vicente Manalo said it was placed inside an
envelope. 7
On the charge of petitioners that they were given jobs
(driver/domestic help) different from those advertised by private
respondents, the Undersecretary ruled that there was no
misrepresentation by way of false advertisement because it was
established that private respondents also caused to be printed in
the same newspaper page a second box looking for a couple
driver/domestic help.
In her Order of 9 October 1991, then Undersecretary Ma. Nieves
Roldan-Confesor denied petitioners' motion for reconsideration. 8
In the present recourse, petitioners claim that public respondent POEA committed a fatal
jurisdictional error when it resolved private respondents' motion for reconsideration in
violation of Rule V, Book VI of the 1985 POEA Rules and Regulations directing the transmittal
of motions for reconsideration to the National Labor Relations Commission (NLRC) for
determination. Consequently, for want of legal competence to act on said motion, the Order
of 4 February 1991, as well as the subsequent orders of public respondent Undersecretary of
Labor dated 5 July 1991 and 9 October 1991, is null and void.
In Aguinaldo Industries Corporation v. Commissioner of Internal
Revenue 9 We ruled —
To allow a litigant to assume a different posture
when he comes before the court and challenge the
position he had accepted at the administrative level,
would be to sanction a procedure whereby the court
— which is supposed to review administrative
determinations — would not review, but determine
and decide for the first time, a question not raised at
the administrative forum. This cannot be permitted,
for the same reason that underlies the requirement
of prior exhaustion of administrative remedies to
give administrative authorities the prior opportunity
to decide controversies within its competence, and in
much the same way that, on the judicial level, issues
not raised in the lower court cannot be raised for the
first time on appeal.
The alleged procedural lapse by respondent POEA was raised by
petitioners only before Us, notwithstanding that such ground was
already existing when they appealed to the Secretary of Labor.
Ironically, petitioners now question the jurisdiction of the
Secretary of Labor over the appeal which they themselves
elevated to that office. When petitioners filed their motion for
reconsideration with the Undersecretary of Labor, this procedural
issue was not even mentioned. Clearly, it would be the height of
unfairness and inequity if We now allow petitioners to backtrack
after getting an unfavorable verdict from public respondents
whose authority they themselves involved. In Tijam
v. Sibonghanoy 10 We said: ". . . we frown upon the "undesirable
practice" of a party submitting his case for decision and then
accepting the judgment, only if favorable, and attacking it for lack
of jurisdiction, when adverse . . . ."
In this regard, however, We find no procedural infirmity
constituting reversible error.
The 1985 POEA Rules and Regulations 11 is divided into eight (8)
Books. Book VI, cited by petitioners, is entitled "Adjudication
Rules". The procedure outlined therein relates to the original and
exclusive jurisdiction exercised by POEA through its Adjudication
Department "to hear and decide all cases involving employer-
employee relations arising out of or by virtue of a law or contact
involving Filipino workers for overseas employment," involving
"[v]iolation of the terms and conditions of employment . . . .
[d]isputes relating to the implementation and interpretation of
employment contracts . . . [m]oney claims of workers against
their employers and/or their duly authorized agents in the
Philippines or vice versa . . . . [c]laims for death, disability and
other benefits arising out of employment . . . . and . . . .
[v]iolations of our non-compliance with any compromise
agreement entered into by and between the parties in an overseas
employment contract."
On the other hand, Book II entitled "Licensing and Regulations" of
the 1985 POEA Rules and Regulations, notably Rule VI cited by
private respondents, refers particularly to the procedure for
suspension, cancellation and revocation of Authority or
License 12 through the POEA Licensing and Regulation Office (LRO).
The controversy in the present case centers on the liability of
private respondents for illegal exaction, false advertisement and
violation of pertinent laws and rules on recruitment of overseas
workers and the resulting imposition of penalty of suspension of
the Authority of respondent CPSI. Quite plainly, We are not
concerned here with employer-employee relations, the procedure
of which is outlined in Book VI; rather, with the suspension or
revocation of Authority embodied in Book II.
Evidently, no jurisdictional error was accordingly committed
because in cases affecting suspension, revocation or cancellation
of Authority, the POEA has authority under Sec. 18, Rule VI, Book
II, to resolve motions for reconsideration which may thereafter be
appealed to the Secretary of Labor. Section 18, provides: "A
motion for reconsideration of an order o suspension (issued by
POEA) or an appeal to the Minister (now Secretary of Labor) from
an order cancelling a license or authority may be entertained only
when filed with the LRO within ten (10) working days from the
service of the order or decision" (parenthesis supplied).
Petitioners also argue that public respondents gravely abused
their discretion when they violated petitioners' right to
administrative due process by requiring clear and convincing
evidence to establish the charge illegal exaction. This point is well
taken. There was grave abuse of discretion.
In the administrative proceedings for cancellation, revocation or
suspension of Authority or License, no rule requires that
testimonies of complainants be corroborated by documentary
evidence, if the charge of unlawful exaction is substantially
proven. All administrative determinations require only substantial
proof and not clear and convincing evidence as erroneously
contended by pubic respondents.
Clear and convincing proof is ". . . more than mere
preponderance, but not to extent of such certainty as is required
beyond reasonable doubt as in criminal cases . . ." 13 while
substantial evidence ". . . consists of more than a mere scintilla of
evidence but may be somewhat less than a preponderance . . .
." 14 Consequently, in the hierarchy of evidentiary values, We find
proof beyond reasonable doubt at the highest level, followed by
clear and convincing evidence, preponderance of evidence, and
substantial evidence, in that order.
That the administrative determination of facts may result in the
suspension or revocation of the authority of CPSI does not require
a higher degree of proof. The proceedings are administrative, and
the consequent imposition of suspension/revocation of
Authority/License does not make the proceedings criminal.
Moreover, the sanctions are administrative and, accordingly, their
infliction does not give rise to double jeopardy when a criminal
action is instituted for the same act.
Thus We held in Atlas Consolidated Mining and Development
Corporation v. Factoran, Jr. 15 —
. . . it is sufficient that administrative findings of fact
are supported by evidence, or negatively stated, it is
sufficient that findings of fact are not shown to be
unsupported by evidence. Substantial evidence is all
that is needed to support an administrative finding
of fact, and substantial evidence is such relevant
evidence as a reasonable mind might accept as
adequate to support a conclusion (Ang Tibay v.
Court of Industrial Relations, 69 Phil. 635, 642;
Police Commission v. Lood, 127 SCRA 762 [1984].
The POEA, after assessing the evidence of both parties, found that
private respondents collected from petitioners P30,000.00 as
placement fees; consequently, it ruled that there was illegal
exaction. Surprisingly, without altering its findings of fact, POEA
reconsidered its order. It held that uncorroborated testimonies
were not enough to conclude that illegal exaction was committed,
particularly so that this might result in the suspension or
revocation of respondents' authority to engage in recruitment
activities. The premise that testimonies of petitioners should be
supported by some other form of evidence is, to say the least,
fallacious. In Castillo v. Court of Appeals, 16 where the appellate
court reversed the findings of fact of the trial court by requiring a
higher degree of proof, We held —
. . . we find no strong and cogent reason which
justifies the appellate court's deviation from the
findings and conclusions of the trial court. As pointed
out in Hernandez v. Intermediate Appellate Court
(189 SCRA 758 [1990]), in agrarian cases, all that is
required is mere substantial evidence. Hence, the
agrarian court's findings of fact which went beyond
the minimum evidentiary support demanded by law,
that is, supported by substantial evidence, are final
and conclusive and cannot be reversed by the
appellate tribunal.
The seeming discrepancy in the statements of the witnesses (one
saying the money was wrapped in paper, the other, that the
money was in an envelope; neither testified on the specific date of
the exaction), refers only to minor details. Perhaps it would be
different if the variance refers to essential points, e.g., whether
the amount of P30,000.00 was actually paid by petitioners to
private respondents. Consequently, whether the money was
wrapped in paper, or placed in an envelope, or unwrapped or
whether the parties could not recall when there payment was
effected is unimportant. After all, the money could have been
wrapped in paper and placed in the envelope, or placed in the
envelope without being wrapped, or wrapped with use of an
unpasted envelope that appeared to be the envelope itself. In
either case, petitioners, could have viewed them differently; but
the difference is ultimately inconsequential. The crucial point to
consider is that the petitioners categorically and unequivocally
testified that respondents collected from them the amount of
P30,000.00 as their placement fees and that they paid the amount
demanded. In this regard, it may be worth to emphasize that only
substantial evidence, not necessarily clear and convincing
evidence, is required. Moreover, when confronted with conflicting
assertions, the rule that "as between a positive and categorical
testimony which has a ring of truth on one hand, and a bare
denial on the other, the former is generally held to prevail . . .
." 17 applies.
But even on the supposition that there was no payment of
P30,000.00, it cannot be denied that private respondents required
petitioners to execute a promissory note for P10,000.00
purportedly because petitioners were hired without paying
placement fees. The mere charging of P10,000.00, standing alone,
is enough to hold private respondents answerable for illegal
exaction because the allowable amount to be collected per
contract worker according to respondent POEA was only
P1,500.00, or P3,000.00 for both petitioners.
WHEREFORE, the petition is GRANTED. The challenged Orders of
respondent Undersecretary of Labor dated 5 July 1991 and 9
October 1991, as well as the Resolution of respondent POEA dated
4 February 1991, having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction are SET
ASIDE, and the original Order of respondent POEA dated 7 May
1990 is ordered REINSTATED and AFFIRMED.
SO ORDERED.
Cruz, Padilla and Griño-Aquino, JJ., concur.
--------------------------------------------------------------------------
G.R. No. 118127 April 12, 2005
CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the
City of Manila, HON. JOSELITO L. ATIENZA, in his capacity
as Vice-Mayor of the City of Manila and Presiding Officer of
the City Council of Manila, HON. ERNESTO A. NIEVA, HON.
GONZALO P. GONZALES, HON. AVELINO S. CAILIAN, HON.
ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON.
HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR.,
HON. ROMUALDO S. MARANAN, HON. NESTOR C. PONCE,
JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F.
CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL
M. ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO
C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ,
HON. CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON.
ERNESTO V.P. MACEDA, JR., HON. ROLANDO P. NIETO,
HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO,
JR., HON. MA. PAZ E. HERRERA, HON. JOEY D. HIZON, HON.
FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG, HON.
ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON.
MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON,
HON. BIENVINIDO M. ABANTE, JR., HON. MA. LOURDES M.
ISIP, HON. ALEXANDER S. RICAFORT, HON. ERNESTO F.
RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN B.
DAWIS, in their capacity as councilors of the City of
Manila, Petitioner,
vs.
HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC,
Manila and MALATE TOURIST DEVELOPMENT
CORPORATION, Respondents.
DECISION
TINGA, J.:
I know only that what is moral is what you feel good after
and what is immoral is what you feel bad after.
Ernest Hermingway
Death in the Afternoon, Ch. 1
It is a moral and political axiom that any dishonorable act,
if performed by oneself, is less immoral than if performed
by someone else, who would be well-intentioned in his
dishonesty.
J. Christopher Gerald
Bonaparte in Egypt, Ch. I
The Court's commitment to the protection of morals is secondary
to its fealty to the fundamental law of the land. It is foremost a
guardian of the Constitution but not the conscience of individuals.
And if it need be, the Court will not hesitate to "make the hammer
fall, and heavily" in the words of Justice Laurel, and uphold the
constitutional guarantees when faced with laws that, though not
lacking in zeal to promote morality, nevertheless fail to pass the
test of constitutionality.
The pivotal issue in this Petition1 under Rule 45 (then Rule 42) of
the Revised Rules on Civil Procedure seeking the reversal of
the Decision2 in Civil Case No. 93-66511 of the Regional Trial Court
(RTC) of Manila, Branch 18 (lower court),3 is the validity of
Ordinance No. 7783 (the Ordinance) of the City of Manila.4
The antecedents are as follows:
Private respondent Malate Tourist Development Corporation
(MTDC) is a corporation engaged in the business of operating
hotels, motels, hostels and lodging houses.5 It built and opened
Victoria Court in Malate which was licensed as a motel although
duly accredited with the Department of Tourism as a hotel.6 On 28
June 1993, MTDC filed a Petition for Declaratory Relief with Prayer
for a Writ of Preliminary Injunction and/or Temporary Restraining
Order7 (RTC Petition) with the lower court impleading as
defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim
(Lim), Hon. Joselito L. Atienza, and the members of the City
Council of Manila (City Council). MTDC prayed that the Ordinance,
insofar as it includes motels and inns as among its prohibited
establishments, be declared invalid and unconstitutional.8
Enacted by the City Council9 on 9 March 1993 and approved by
petitioner City Mayor on 30 March 1993, the said Ordinance is
entitled–
AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR
OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS
OF AMUSEMENT, ENTERTAINMENT, SERVICES AND
FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING
PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER
PURPOSES.10
The Ordinance is reproduced in full, hereunder:
SECTION 1. Any provision of existing laws and ordinances
to the contrary notwithstanding, no person, partnership,
corporation or entity shall, in the Ermita-Malate
area bounded by Teodoro M. Kalaw Sr. Street in the North,
Taft Avenue in the East, Vito Cruz Street in the South and
Roxas Boulevard in the West, pursuant to P.D. 499 be
allowed or authorized to contract and engage in, any
business providing certain forms of amusement,
entertainment, services and facilities where women
are used as tools in entertainment and which tend to
disturb the community, annoy the inhabitants, and
adversely affect the social and moral welfare of the
community, such as but not limited to:
1. Sauna Parlors
2. Massage Parlors
3. Karaoke Bars
4. Beerhouses
5. Night Clubs
6. Day Clubs
7. Super Clubs
8. Discotheques
9. Cabarets
10. Dance Halls
11. Motels
12. Inns
SEC. 2 The City Mayor, the City Treasurer or any person
acting in behalf of the said officials are prohibited from
issuing permits, temporary or otherwise, or from
granting licenses and accepting payments for the
operation of business enumerated in the preceding
section.
SEC. 3. Owners and/or operator of
establishments engaged in, or devoted to, the businesses
enumerated in Section 1 hereof are hereby given three
(3) months from the date of approval of this
ordinance within which to wind up business
operations or to transfer to any place outside of the
Ermita-Malate area or convert said businesses to
other kinds of business allowable within the
area, such as but not limited to:
1. Curio or antique shop
2. Souvenir Shops
3. Handicrafts display centers
4. Art galleries
5. Records and music shops
6. Restaurants
7. Coffee shops
8. Flower shops
9. Music lounge and sing-along restaurants, with
well-defined activities for wholesome family
entertainment that cater to both local and foreign
clientele.
10. Theaters engaged in the exhibition, not only of
motion pictures but also of cultural shows, stage and
theatrical plays, art exhibitions, concerts and the
like.
11. Businesses allowable within the law and medium
intensity districts as provided for in the zoning
ordinances for Metropolitan Manila, except new
warehouse or open-storage depot, dock or yard,
motor repair shop, gasoline service station, light
industry with any machinery, or funeral
establishments.
SEC. 4. Any person violating any provisions of this
ordinance, shall upon conviction, be punished by
imprisonment of one (1) year or fine of FIVE
THOUSAND (P5,000.00) PESOS, or both, at the
discretion of the Court, PROVIDED, that in case of juridical
person, the President, the General Manager, or person-in-
charge of operation shall be liable thereof; PROVIDED
FURTHER, that in case of subsequent violation and
conviction, the premises of the erring establishment
shall be closed and padlocked permanently.
SEC. 5. This ordinance shall take effect upon approval.
Enacted by the City Council of Manila at its regular session
today, March 9, 1993.
Approved by His Honor, the Mayor on March 30, 1993.
(Emphasis supplied)
In the RTC Petition, MTDC argued that the Ordinance erroneously
and improperly included in its enumeration of prohibited
establishments, motels and inns such as MTDC's Victoria Court
considering that these were not establishments for "amusement"
or "entertainment" and they were not "services or facilities for
entertainment," nor did they use women as "tools for
entertainment," and neither did they "disturb the community,"
"annoy the inhabitants" or "adversely affect the social and moral
welfare of the community."11
MTDC further advanced that the Ordinance was invalid and
unconstitutional for the following reasons: (1) The City Council
has no power to prohibit the operation of motels as Section 458
(a) 4 (iv)12 of the Local Government Code of 1991 (the Code)
grants to the City Council only the power to regulate the
establishment, operation and maintenance of hotels, motels, inns,
pension houses, lodging houses and other similar establishments;
(2) The Ordinance is void as it is violative of Presidential Decree
(P.D.) No. 49913 which specifically declared portions of the Ermita-
Malate area as a commercial zone with certain restrictions; (3)
The Ordinance does not constitute a proper exercise of police
power as the compulsory closure of the motel business has no
reasonable relation to the legitimate municipal interests sought to
be protected; (4) The Ordinance constitutes an ex post facto law
by punishing the operation of Victoria Court which was a
legitimate business prior to its enactment; (5)
The Ordinance violates MTDC's constitutional rights in that: (a) it
is confiscatory and constitutes an invasion of plaintiff's property
rights; (b) the City Council has no power to find as a fact that a
particular thing is a nuisance per se nor does it have the power to
extrajudicially destroy it; and (6) The Ordinance constitutes a
denial of equal protection under the law as no reasonable basis
exists for prohibiting the operation of motels and inns, but not
pension houses, hotels, lodging houses or other similar
establishments, and for prohibiting said business in the Ermita-
Malate area but not outside of this area.14
In their Answer15 dated 23 July 1993, petitioners City of Manila and
Lim maintained that the City Council had the power to "prohibit
certain forms of entertainment in order to protect the social and
moral welfare of the community" as provided for in Section 458
(a) 4 (vii) of the Local Government Code,16 which reads, thus:
Section 458. Powers, Duties, Functions and Compensation.
(a) The sangguniang panlungsod, as the legislative body of
the city, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as
provided for under Section 22 of this Code, and shall:
....
(4) Regulate activities relative to the use of land, buildings
and structures within the city in order to promote the
general welfare and for said purpose shall:
....
(vii) Regulate the establishment, operation, and
maintenance of any entertainment or amusement
facilities, including theatrical performances, circuses,
billiard pools, public dancing schools, public dance
halls, sauna baths, massage parlors, and other
places for entertainment or amusement; regulate
such other events or activities for amusement or
entertainment, particularly those which tend to
disturb the community or annoy the inhabitants, or
require the suspension or suppression of the same;
or, prohibit certain forms of amusement or
entertainment in order to protect the social and
moral welfare of the community.
Citing Kwong Sing v. City of Manila,17 petitioners insisted that the
power of regulation spoken of in the above-quoted provision
included the power to control, to govern and to restrain places of
exhibition and amusement.18
Petitioners likewise asserted that the Ordinance was enacted by
the City Council of Manila to protect the social and moral welfare
of the community in conjunction with its police power as found in
Article III, Section 18(kk) of Republic Act No. 409,19 otherwise
known as the Revised Charter of the City of Manila (Revised
Charter of Manila)20 which reads, thus:
ARTICLE III
THE MUNICIPAL BOARD
. . .
Section 18. Legislative powers. – The Municipal Board shall
have the following legislative powers:
. . .
(kk) To enact all ordinances it may deem necessary and
proper for the sanitation and safety, the furtherance of the
prosperity, and the promotion of the morality, peace, good
order, comfort, convenience, and general welfare of the city
and its inhabitants, and such others as may be necessary
to carry into effect and discharge the powers and duties
conferred by this chapter; and to fix penalties for the
violation of ordinances which shall not exceed two hundred
pesos fine or six months' imprisonment, or both such fine
and imprisonment, for a single offense.
Further, the petitioners noted, the Ordinance had the presumption
of validity; hence, private respondent had the burden to prove its
illegality or unconstitutionality.21
Petitioners also maintained that there was no inconsistency
between P.D. 499 and the Ordinance as the latter simply
disauthorized certain forms of businesses and allowed the Ermita-
Malate area to remain a commercial zone.22 The Ordinance, the
petitioners likewise claimed, cannot be assailed as ex post facto as
it was prospective in operation.23 The Ordinance also did not
infringe the equal protection clause and cannot be denounced as
class legislation as there existed substantial and real differences
between the Ermita-Malate area and other places in the City of
Manila.24
On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr.
(Judge Laguio) issued an ex-parte temporary restraining order
against the enforcement of the Ordinance.25 And on 16 July 1993,
again in an intrepid gesture, he granted the writ of preliminary
injunction prayed for by MTDC.26
After trial, on 25 November 1994, Judge Laguio rendered the
assailed Decision, enjoining the petitioners from implementing
the Ordinance. The dispositive portion of said Decision reads:27
WHEREFORE, judgment is hereby rendered declaring
Ordinance No. 778[3], Series of 1993, of the City of Manila
null and void, and making permanent the writ of
preliminary injunction that had been issued by this Court
against the defendant. No costs.
SO ORDERED.28
Petitioners filed with the lower court a Notice of Appeal29 on 12
December 1994, manifesting that they are elevating the case to
this Court under then Rule 42 on pure questions of law.30
On 11 January 1995, petitioners filed the present Petition, alleging
that the following errors were committed by the lower court in its
ruling: (1) It erred in concluding that the subject ordinance
is ultra vires, or otherwise, unfair, unreasonable and oppressive
exercise of police power; (2) It erred in holding that the
questioned Ordinance contravenes P.D. 49931 which allows
operators of all kinds of commercial establishments, except those
specified therein; and (3) It erred in declaring the Ordinance void
and unconstitutional.32
In the Petition and in its Memorandum,33 petitioners in essence
repeat the assertions they made before the lower court. They
contend that the assailed Ordinance was enacted in the exercise
of the inherent and plenary power of the State and the general
welfare clause exercised by local government units provided for in
Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and
conjunctively, Section 458 (a) 4 (vii) of the Code.34 They allege
that the Ordinance is a valid exercise of police power; it does not
contravene P.D. 499; and that it enjoys the presumption of
validity.35
In its Memorandum36 dated 27 May 1996, private respondent
maintains that the Ordinance is ultra vires and that it is void for
being repugnant to the general law. It reiterates that the
questioned Ordinance is not a valid exercise of police power; that
it is violative of due process, confiscatory and amounts to an
arbitrary interference with its lawful business; that it is violative of
the equal protection clause; and that it confers on petitioner City
Mayor or any officer unregulated discretion in the execution of
the Ordinance absent rules to guide and control his actions.
This is an opportune time to express the Court's deep sentiment
and tenderness for the Ermita-Malate area being its home for
several decades. A long-time resident, the Court witnessed the
area's many turn of events. It relished its glory days and endured
its days of infamy. Much as the Court harks back to the
resplendent era of the Old Manila and yearns to restore its lost
grandeur, it believes that the Ordinance is not the fitting means to
that end. The Court is of the opinion, and so holds, that the lower
court did not err in declaring the Ordinance, as it did, ultra
vires and therefore null and void.
The Ordinance is so replete with constitutional infirmities that
almost every sentence thereof violates a constitutional provision.
The prohibitions and sanctions therein transgress the cardinal
rights of persons enshrined by the Constitution. The Court is
called upon to shelter these rights from attempts at rendering
them worthless.
The tests of a valid ordinance are well established. A long line of
decisions has held that for an ordinance to be valid, it must not
only be within the corporate powers of the local government unit
to enact and must be passed according to the procedure
prescribed by law, it must also conform to the following
substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive;
(3) must not be partial or discriminatory; (4) must not prohibit
but may regulate trade; (5) must be general and consistent with
public policy; and (6) must not be unreasonable.37
Anent the first criterion, ordinances shall only be valid when they
are not contrary to the Constitution and to the
laws.38 The Ordinance must satisfy two requirements: it must pass
muster under the test of constitutionality and the test of
consistency with the prevailing laws. That ordinances should be
constitutional uphold the principle of the supremacy of the
Constitution. The requirement that the enactment must not violate
existing law gives stress to the precept that local government
units are able to legislate only by virtue of their derivative
legislative power, a delegation of legislative power from the
national legislature. The delegate cannot be superior to the
principal or exercise powers higher than those of the latter.39
This relationship between the national legislature and the local
government units has not been enfeebled by the new provisions in
the Constitution strengthening the policy of local autonomy. The
national legislature is still the principal of the local government
units, which cannot defy its will or modify or violate it.40
The Ordinance was passed by the City Council in the exercise of
its police power, an enactment of the City Council acting as agent
of Congress. Local government units, as agencies of the State, are
endowed with police power in order to effectively accomplish and
carry out the declared objects of their creation.41 This delegated
police power is found in Section 16 of the Code, known as the
general welfare clause, viz:
SECTION 16. General Welfare.Every local government
unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion
of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and
support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance
the right of the people to a balanced ecology, encourage
and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public
morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain
peace and order, and preserve the comfort and
convenience of their inhabitants.
Local government units exercise police power through their
respective legislative bodies; in this case, the sangguniang
panlungsod or the city council. The Code empowers the legislative
bodies to "enact ordinances, approve resolutions and appropriate
funds for the general welfare of the province/city/municipality and
its inhabitants pursuant to Section 16 of the Code and in the
proper exercise of the corporate powers of the province/city/
municipality provided under the Code.42 The inquiry in this Petition
is concerned with the validity of the exercise of such delegated
power.
The Ordinance contravenes
the Constitution
The police power of the City Council, however broad and far-
reaching, is subordinate to the constitutional limitations thereon;
and is subject to the limitation that its exercise must be
reasonable and for the public good.43 In the case at bar, the
enactment of the Ordinance was an invalid exercise of delegated
power as it is unconstitutional and repugnant to general laws.
The relevant constitutional provisions are the following:
SEC. 5. The maintenance of peace and order, the
protection of life, liberty, and property, and the promotion
of the general welfare are essential for the enjoyment by all
the people of the blessings of democracy.44
SEC. 14. The State recognizes the role of women in nation-
building, and shall ensure the fundamental equality before
the law of women and men.45
 SEC. 1. No person shall be deprived of life, liberty or
property without due process of law, nor shall any person
be denied the equal protection of laws.46
Sec. 9. Private property shall not be taken for public use
without just compensation.47
A. The Ordinance infringes
the Due Process Clause
The constitutional safeguard of due process is embodied in the fiat
"(N)o person shall be deprived of life, liberty or property without
due process of law. . . ."48
There is no controlling and precise definition of due process. It
furnishes though a standard to which governmental action should
conform in order that deprivation of life, liberty or property, in
each appropriate case, be valid. This standard is aptly described
as a responsiveness to the supremacy of reason, obedience to the
dictates of justice,49 and as such it is a limitation upon the exercise
of the police power.50
The purpose of the guaranty is to prevent governmental
encroachment against the life, liberty and property of individuals;
to secure the individual from the arbitrary exercise of the powers
of the government, unrestrained by the established principles of
private rights and distributive justice; to protect property from
confiscation by legislative enactments, from seizure, forfeiture,
and destruction without a trial and conviction by the ordinary
mode of judicial procedure; and to secure to all persons equal and
impartial justice and the benefit of the general law.51
The guaranty serves as a protection against arbitrary regulation,
and private corporations and partnerships are "persons" within the
scope of the guaranty insofar as their property is concerned.52
This clause has been interpreted as imposing two separate limits
on government, usually called "procedural due process" and
"substantive due process."
Procedural due process, as the phrase implies, refers to the
procedures that the government must follow before it deprives a
person of life, liberty, or property. Classic procedural due process
issues are concerned with what kind of notice and what form of
hearing the government must provide when it takes a particular
action.53
Substantive due process, as that phrase connotes, asks whether
the government has an adequate reason for taking away a
person's life, liberty, or property. In other words, substantive due
process looks to whether there is a sufficient justification for the
government's action.54 Case law in the United States (U.S.) tells us
that whether there is such a justification depends very much on
the level of scrutiny used.55 For example, if a law is in an area
where only rational basis review is applied, substantive due
process is met so long as the law is rationally related to a
legitimate government purpose. But if it is an area where strict
scrutiny is used, such as for protecting fundamental rights, then
the government will meet substantive due process only if it can
prove that the law is necessary to achieve a compelling
government purpose.56
The police power granted to local government units must always
be exercised with utmost observance of the rights of the people to
due process and equal protection of the law. Such power cannot
be exercised whimsically, arbitrarily or despotically57 as its exercise
is subject to a qualification, limitation or restriction demanded by
the respect and regard due to the prescription of the fundamental
law, particularly those forming part of the Bill of Rights. Individual
rights, it bears emphasis, may be adversely affected only to the
extent that may fairly be required by the legitimate demands of
public interest or public welfare.58 Due process requires the
intrinsic validity of the law in interfering with the rights of the
person to his life, liberty and property.59
Requisites for the valid exercise
of Police Power are not met
To successfully invoke the exercise of police power as the
rationale for the enactment of the Ordinance, and to free it from
the imputation of constitutional infirmity, not only must it appear
that the interests of the public generally, as distinguished from
those of a particular class, require an interference with private
rights, but the means adopted must be reasonably necessary for
the accomplishment of the purpose and not unduly oppressive
upon individuals.60 It must be evident that no other alternative for
the accomplishment of the purpose less intrusive of private rights
can work. A reasonable relation must exist between the purposes
of the police measure and the means employed for its
accomplishment, for even under the guise of protecting the public
interest, personal rights and those pertaining to private property
will not be permitted to be arbitrarily invaded.61
Lacking a concurrence of these two requisites, the police measure
shall be struck down as an arbitrary intrusion into private
rights62 a violation of the due process clause.
The Ordinance was enacted to address and arrest the social ills
purportedly spawned by the establishments in the Ermita-Malate
area which are allegedly operated under the deceptive veneer of
legitimate, licensed and tax-paying nightclubs, bars, karaoke bars,
girlie houses, cocktail lounges, hotels and motels. Petitioners
insist that even the Court in the case of Ermita-Malate Hotel and
Motel Operators Association, Inc. v. City Mayor of Manila63 had
already taken judicial notice of the "alarming increase in the rate
of prostitution, adultery and fornication in Manila traceable in
great part to existence of motels, which provide a necessary
atmosphere for clandestine entry, presence and exit and thus
become the ideal haven for prostitutes and thrill-seekers."64
The object of the Ordinance was, accordingly, the promotion and
protection of the social and moral values of the community.
Granting for the sake of argument that the objectives of
the Ordinance are within the scope of the City Council's police
powers, the means employed for the accomplishment thereof
were unreasonable and unduly oppressive.
It is undoubtedly one of the fundamental duties of the City of
Manila to make all reasonable regulations looking to the promotion
of the moral and social values of the community. However, the
worthy aim of fostering public morals and the eradication of the
community's social ills can be achieved through means less
restrictive of private rights; it can be attained by reasonable
restrictions rather than by an absolute prohibition. The closing
down and transfer of businesses or their conversion into
businesses "allowed" under the Ordinance have no reasonable
relation to the accomplishment of its purposes. Otherwise stated,
the prohibition of the enumerated establishments will not per
se protect and promote the social and moral welfare of the
community; it will not in itself eradicate the alluded social ills of
prostitution, adultery, fornication nor will it arrest the spread of
sexual disease in Manila.
Conceding for the nonce that the Ermita-Malate area teems with
houses of ill-repute and establishments of the like which the City
Council may lawfully prohibit,65 it is baseless and insupportable to
bring within that classification sauna parlors, massage parlors,
karaoke bars, night clubs, day clubs, super clubs, discotheques,
cabarets, dance halls, motels and inns. This is not warranted
under the accepted definitions of these terms. The enumerated
establishments are lawful pursuits which are not per se offensive
to the moral welfare of the community.
That these are used as arenas to consummate illicit sexual affairs
and as venues to further the illegal prostitution is of no moment.
We lay stress on the acrid truth that sexual immorality, being a
human frailty, may take place in the most innocent of places that
it may even take place in the substitute establishments
enumerated under Section 3 of the Ordinance. If the flawed logic
of the Ordinance were to be followed, in the remote instance that
an immoral sexual act transpires in a church cloister or a court
chamber, we would behold the spectacle of the City of Manila
ordering the closure of the church or court concerned. Every
house, building, park, curb, street or even vehicles for that matter
will not be exempt from the prohibition. Simply because there are
no "pure" places where there are impure men. Indeed, even the
Scripture and the Tradition of Christians churches continually
recall the presence and universality of sin in man's history.66
The problem, it needs to be pointed out, is not the establishment,
which by its nature cannot be said to be injurious to the health or
comfort of the community and which in itself is amoral, but the
deplorable human activity that may occur within its premises.
While a motel may be used as a venue for immoral sexual activity,
it cannot for that reason alone be punished. It cannot be classified
as a house of ill-repute or as a nuisance per se on a mere
likelihood or a naked assumption. If that were so and if that were
allowed, then the Ermita-Malate area would not only be purged of
its supposed social ills, it would be extinguished of its soul as well
as every human activity, reprehensible or not, in its every nook
and cranny would be laid bare to the estimation of the authorities.
The Ordinance seeks to legislate morality but fails to address the
core issues of morality. Try as the Ordinance may to shape
morality, it should not foster the illusion that it can make a moral
man out of it because immorality is not a thing, a building or
establishment; it is in the hearts of men. The City Council instead
should regulate human conduct that occurs inside the
establishments, but not to the detriment of liberty and privacy
which are covenants, premiums and blessings of democracy.
While petitioners' earnestness at curbing clearly objectionable
social ills is commendable, they unwittingly punish even the
proprietors and operators of "wholesome," "innocent"
establishments. In the instant case, there is a clear invasion of
personal or property rights, personal in the case of those
individuals desirous of owning, operating and patronizing those
motels and property in terms of the investments made and the
salaries to be paid to those therein employed. If the City of Manila
so desires to put an end to prostitution, fornication and other
social ills, it can instead impose reasonable regulations such as
daily inspections of the establishments for any violation of the
conditions of their licenses or permits; it may exercise its
authority to suspend or revoke their licenses for these
violations;67 and it may even impose increased license fees. In
other words, there are other means to reasonably accomplish the
desired end.
Means employed are
constitutionally infirm
The Ordinance disallows the operation of sauna parlors, massage
parlors, karaoke bars, beerhouses, night clubs, day clubs, super
clubs, discotheques, cabarets, dance halls, motels and inns in the
Ermita-Malate area. In Section 3 thereof, owners and/or operators
of the enumerated establishments are given three (3) months
from the date of approval of the Ordinance within which "to wind
up business operations or to transfer to any place outside the
Ermita-Malate area or convert said businesses to other kinds of
business allowable within the area." Further, it states in Section 4
that in cases of subsequent violations of the provisions of the
Ordinance, the "premises of the erring establishment shall be
closed and padlocked permanently."
It is readily apparent that the means employed by
the Ordinance for the achievement of its purposes, the
governmental interference itself, infringes on the constitutional
guarantees of a person's fundamental right to liberty and
property.
Liberty as guaranteed by the Constitution was defined by Justice
Malcolm to include "the right to exist and the right to be free from
arbitrary restraint or servitude. The term cannot be dwarfed into
mere freedom from physical restraint of the person of the citizen,
but is deemed to embrace the right of man to enjoy the facilities
with which he has been endowed by his Creator, subject only to
such restraint as are necessary for the common welfare."68 In
accordance with this case, the rights of the citizen to be free to
use his faculties in all lawful ways; to live and work where he will;
to earn his livelihood by any lawful calling; and to pursue any
avocation are all deemed embraced in the concept of liberty.69
The U.S. Supreme Court in the case of Roth v. Board of
Regents,70 sought to clarify the meaning of "liberty." It said:
While the Court has not attempted to define with exactness
the liberty. . . guaranteed [by the Fifth and Fourteenth
Amendments], the term denotes not merely freedom from
bodily restraint but also the right of the individual to
contract, to engage in any of the common occupations of
life, to acquire useful knowledge, to marry, establish a
home and bring up children, to worship God according to
the dictates of his own conscience, and generally to enjoy
those privileges long recognized…as essential to the orderly
pursuit of happiness by free men. In a Constitution for a
free people, there can be no doubt that the meaning of
"liberty" must be broad indeed.
In another case, it also confirmed that liberty protected by the
due process clause includes personal decisions relating to
marriage, procreation, contraception, family relationships, child
rearing, and education. In explaining the respect the Constitution
demands for the autonomy of the person in making these choices,
the U.S. Supreme Court explained:
These matters, involving the most intimate and personal
choices a person may make in a lifetime, choices central to
personal dignity and autonomy, are central to the liberty
protected by the Fourteenth Amendment. At the heart of
liberty is the right to define one's own concept of existence,
of meaning, of universe, and of the mystery of human life.
 Beliefs about these matters could not define the attributes
of personhood where they formed under compulsion of the
State.71
Persons desirous to own, operate and patronize the enumerated
establishments under Section 1 of the Ordinance may seek
autonomy for these purposes.
Motel patrons who are single and unmarried may invoke this right
to autonomy to consummate their bonds in intimate sexual
conduct within the motel's premisesbe it stressed that their
consensual sexual behavior does not contravene any fundamental
state policy as contained in the Constitution.72 Adults have a right
to choose to forge such relationships with others in the confines of
their own private lives and still retain their dignity as free persons.
The liberty protected by the Constitution allows persons the right
to make this choice.73 Their right to liberty under the due process
clause gives them the full right to engage in their conduct without
intervention of the government, as long as they do not run afoul
of the law. Liberty should be the rule and restraint the exception.
Liberty in the constitutional sense not only means freedom from
unlawful government restraint; it must include privacy as well, if it
is to be a repository of freedom. The right to be let alone is the
beginning of all freedomit is the most comprehensive of rights
and the right most valued by civilized men.74
The concept of liberty compels respect for the individual whose
claim to privacy and interference demands respect. As the case
of Morfe v. Mutuc,75 borrowing the words of Laski, so very aptly
stated:
Man is one among many, obstinately refusing reduction to
unity. His separateness, his isolation, are indefeasible;
indeed, they are so fundamental that they are the basis on
which his civic obligations are built. He cannot abandon the
consequences of his isolation, which are, broadly speaking,
that his experience is private, and the will built out of that
experience personal to himself. If he surrenders his will to
others, he surrenders himself. If his will is set by the will of
others, he ceases to be a master of himself. I cannot
believe that a man no longer a master of himself is in any
real sense free.
Indeed, the right to privacy as a constitutional right was
recognized in Morfe, the invasion of which should be justified by a
compelling state interest. Morfe accorded recognition to the right
to privacy independently of its identification with liberty; in itself it
is fully deserving of constitutional protection. Governmental
powers should stop short of certain intrusions into the personal
life of the citizen.76
There is a great temptation to have an extended discussion on
these civil liberties but the Court chooses to exercise restraint and
restrict itself to the issues presented when it should. The previous
pronouncements of the Court are not to be interpreted as a
license for adults to engage in criminal conduct. The
reprehensibility of such conduct is not diminished. The Court only
reaffirms and guarantees their right to make this choice. Should
they be prosecuted for their illegal conduct, they should suffer the
consequences of the choice they have made. That, ultimately, is
their choice.
Modality employed is
unlawful taking
In addition, the Ordinance is unreasonable and oppressive as it
substantially divests the respondent of the beneficial use of its
property.77 The Ordinance in Section 1 thereof forbids the running
of the enumerated businesses in the Ermita-Malate area and in
Section 3 instructs its owners/operators to wind up business
operations or to transfer outside the area or convert said
businesses into allowed businesses. An ordinance which
permanently restricts the use of property that it can not be used
for any reasonable purpose goes beyond regulation and must be
recognized as a taking of the property without just
compensation.78 It is intrusive and violative of the private property
rights of individuals.
The Constitution expressly provides in Article III, Section 9, that
"private property shall not be taken for public use without just
compensation." The provision is the most important protection of
property rights in the Constitution. This is a restriction on the
general power of the government to take property. The
constitutional provision is about ensuring that the government
does not confiscate the property of some to give it to others. In
part too, it is about loss spreading. If the government takes away
a person's property to benefit society, then society should pay.
The principal purpose of the guarantee is "to bar the Government
from forcing some people alone to bear public burdens which, in
all fairness and justice, should be borne by the public as a whole.79
There are two different types of taking that can be identified. A
"possessory" taking occurs when the government confiscates or
physically occupies property. A "regulatory" taking occurs when
the government's regulation leaves no reasonable economically
viable use of the property.80
In the landmark case of Pennsylvania Coal v. Mahon,81 it was held
that a taking also could be found if government regulation of the
use of property went "too far." When regulation reaches a certain
magnitude, in most if not in all cases there must be an exercise of
eminent domain and compensation to support the act. While
property may be regulated to a certain extent, if regulation goes
too far it will be recognized as a taking.82
No formula or rule can be devised to answer the questions of what
is too far and when regulation becomes a taking. In Mahon,
Justice Holmes recognized that it was "a question of degree and
therefore cannot be disposed of by general propositions." On
many other occasions as well, the U.S. Supreme Court has said
that the issue of when regulation constitutes a taking is a matter
of considering the facts in each case. The Court asks whether
justice and fairness require that the economic loss caused by
public action must be compensated by the government and thus
borne by the public as a whole, or whether the loss should remain
concentrated on those few persons subject to the public action.83
What is crucial in judicial consideration of regulatory takings is
that government regulation is a taking if it leaves no reasonable
economically viable use of property in a manner that interferes
with reasonable expectations for use.84 A regulation that
permanently denies all economically beneficial or productive use
of land is, from the owner's point of view, equivalent to a "taking"
unless principles of nuisance or property law that existed when
the owner acquired the land make the use prohibitable.85 When the
owner of real property has been called upon to sacrifice all
economically beneficial uses in the name of the common good,
that is, to leave his property economically idle, he has suffered a
taking.86
A regulation which denies all economically beneficial or productive
use of land will require compensation under the takings clause.
Where a regulation places limitations on land that fall short of
eliminating all economically beneficial use, a taking nonetheless
may have occurred, depending on a complex of factors including
the regulation's economic effect on the landowner, the extent to
which the regulation interferes with reasonable investment-backed
expectations and the character of government action. These
inquiries are informed by the purpose of the takings clause which
is to prevent the government from forcing some people alone to
bear public burdens which, in all fairness and justice, should be
borne by the public as a whole.87
A restriction on use of property may also constitute a "taking" if
not reasonably necessary to the effectuation of a substantial
public purpose or if it has an unduly harsh impact on the distinct
investment-backed expectations of the owner.88
The Ordinance gives the owners and operators of the "prohibited"
establishments three (3) months from its approval within which to
"wind up business operations or to transfer to any place outside of
the Ermita-Malate area or convert said businesses to other kinds
of business allowable within the area." The directive to "wind up
business operations" amounts to a closure of the establishment, a
permanent deprivation of property, and is practically
confiscatory. Unless the owner converts his establishment to
accommodate an "allowed" business, the structure which housed
the previous business will be left empty and gathering dust.
Suppose he transfers it to another area, he will likewise leave the
entire establishment idle. Consideration must be given to the
substantial amount of money invested to build the edifices which
the owner reasonably expects to be returned within a period of
time. It is apparent that the Ordinance leaves no reasonable
economically viable use of property in a manner that interferes
with reasonable expectations for use.
The second and third options to transfer to any place outside of
the Ermita-Malate area or to convert into allowed businessesare
confiscatory as well. The penalty of permanent closure in cases of
subsequent violations found in Section 4 of the Ordinance is also
equivalent to a "taking" of private property.
The second option instructs the owners to abandon their property
and build another one outside the Ermita-Malate area. In every
sense, it qualifies as a taking without just compensation with an
additional burden imposed on the owner to build another
establishment solely from his coffers. The proffered solution does
not put an end to the "problem," it merely relocates it. Not only is
this impractical, it is unreasonable, onerous and oppressive. The
conversion into allowed enterprises is just as ridiculous. How may
the respondent convert a motel into a restaurant or a coffee shop,
art gallery or music lounge without essentially destroying its
property? This is a taking of private property without due process
of law, nay, even without compensation.
The penalty of closure likewise constitutes unlawful taking that
should be compensated by the government. The burden on the
owner to convert or transfer his business, otherwise it will be
closed permanently after a subsequent violation should be borne
by the public as this end benefits them as a whole.
Petitioners cannot take refuge in classifying the measure as a
zoning ordinance. A zoning ordinance, although a valid exercise of
police power, which limits a "wholesome" property to a use which
can not reasonably be made of it constitutes the taking of such
property without just compensation. Private property which is not
noxious nor intended for noxious purposes may not, by zoning, be
destroyed without compensation. Such principle finds no support
in the principles of justice as we know them. The police powers of
local government units which have always received broad and
liberal interpretation cannot be stretched to cover this particular
taking.
Distinction should be made between destruction from necessity
and eminent domain. It needs restating that the property taken
in the exercise of police power is destroyed because it is noxious
or intended for a noxious purpose while the property taken under
the power of eminent domain is intended for a public use or
purpose and is therefore "wholesome."89 If it be of public benefit
that a "wholesome" property remain unused or relegated to a
particular purpose, then certainly the public should bear the cost
of reasonable compensation for the condemnation of private
property for public use.90
Further, the Ordinance fails to set up any standard to guide or
limit the petitioners' actions. It in no way controls or guides the
discretion vested in them. It provides no definition of the
establishments covered by it and it fails to set forth the conditions
when the establishments come within its ambit of prohibition.
The Ordinance confers upon the mayor arbitrary and unrestricted
power to close down establishments. Ordinances such as this,
which make possible abuses in its execution, depending upon no
conditions or qualifications whatsoever other than the unregulated
arbitrary will of the city authorities as the touchstone by which its
validity is to be tested, are unreasonable and invalid.
The Ordinance should have established a rule by which its
impartial enforcement could be secured.91
Ordinances placing restrictions upon the lawful use of property
must, in order to be valid and constitutional, specify the rules and
conditions to be observed and conduct to avoid; and must not
admit of the exercise, or of an opportunity for the exercise, of
unbridled discretion by the law enforcers in carrying out its
provisions.92
Thus, in Coates v. City of Cincinnati,93 as cited in People v.
Nazario,94 the U.S. Supreme Court struck down an ordinance
that had made it illegal for "three or more persons to assemble on
any sidewalk and there conduct themselves in a manner annoying
to persons passing by." The ordinance was nullified as it imposed
no standard at all "because one may never know in advance what
'annoys some people but does not annoy others.' "
Similarly, the Ordinance does not specify the standards to
ascertain which establishments "tend to disturb the community,"
"annoy the inhabitants," and "adversely affect the social and
moral welfare of the community." The cited case supports the
nullification of the Ordinance for lack of comprehensible standards
to guide the law enforcers in carrying out its provisions.
Petitioners cannot therefore order the closure of the enumerated
establishments without infringing the due process clause. These
lawful establishments may be regulated, but not prevented from
carrying on their business. This is a sweeping exercise of police
power that is a result of a lack of imagination on the part of the
City Council and which amounts to an interference into personal
and private rights which the Court will not countenance. In this
regard, we take a resolute stand to uphold the constitutional
guarantee of the right to liberty and property.
Worthy of note is an example derived from the U.S. of a
reasonable regulation which is a far cry from the ill-
considered Ordinance enacted by the City Council.
In FW/PBS, INC. v. Dallas, the city of Dallas adopted a
95
comprehensive ordinance regulating "sexually oriented
businesses," which are defined to include adult arcades,
bookstores, video stores, cabarets, motels, and theaters as well as
escort agencies, nude model studio and sexual encounter centers.
Among other things, the ordinance required that such businesses
be licensed. A group of motel owners were among the three
groups of businesses that filed separate suits challenging the
ordinance. The motel owners asserted that the city violated the
due process clause by failing to produce adequate support for its
supposition that renting room for fewer than ten (10) hours
resulted in increased crime and other secondary effects. They
likewise argued than the ten (10)-hour limitation on the rental of
motel rooms placed an unconstitutional burden on the right to
freedom of association. Anent the first contention, the U.S.
Supreme Court held that the reasonableness of the legislative
judgment combined with a study which the city considered, was
adequate to support the city's determination that motels
permitting room rentals for fewer than ten (10 ) hours should be
included within the licensing scheme. As regards the second point,
the Court held that limiting motel room rentals to ten (10) hours
will have no discernible effect on personal bonds as those bonds
that are formed from the use of a motel room for fewer than ten
(10) hours are not those that have played a critical role in the
culture and traditions of the nation by cultivating and transmitting
shared ideals and beliefs.
The ordinance challenged in the above-cited case merely
regulated the targeted businesses. It imposed reasonable
restrictions; hence, its validity was upheld.
The case of Ermita Malate Hotel and Motel Operators Association,
Inc. v. City Mayor of Manila,96 it needs pointing out, is also
different from this case in that what was involved therein was a
measure which regulated the mode in which motels may conduct
business in order to put an end to practices which could
encourage vice and immorality. Necessarily, there was no valid
objection on due process or equal protection grounds as the
ordinance did not prohibit motels. The Ordinance in this case
however is not a regulatory measure but is an exercise of an
assumed power to prohibit.97
The foregoing premises show that the Ordinance is an
unwarranted and unlawful curtailment of property and personal
rights of citizens. For being unreasonable and an undue restraint
of trade, it cannot, even under the guise of exercising police
power, be upheld as valid.
B. The Ordinance violates Equal
Protection Clause
Equal protection requires that all persons or things similarly
situated should be treated alike, both as to rights conferred and
responsibilities imposed. Similar subjects, in other words, should
not be treated differently, so as to give undue favor to some and
unjustly discriminate against others.98 The guarantee means that
no person or class of persons shall be denied the same protection
of laws which is enjoyed by other persons or other classes in like
circumstances.99 The "equal protection of the laws is a pledge of
the protection of equal laws."100 It limits governmental
discrimination. The equal protection clause extends to artificial
persons but only insofar as their property is concerned.101
The Court has explained the scope of the equal protection clause
in this wise:
… What does it signify? To quote from J.M. Tuason & Co. v.
Land Tenure Administration: "The ideal situation is for the
law's benefits to be available to all, that none be placed
outside the sphere of its coverage. Only thus could chance
and favor be excluded and the affairs of men governed by
that serene and impartial uniformity, which is of the very
essence of the idea of law." There is recognition, however,
in the opinion that what in fact exists "cannot approximate
the ideal. Nor is the law susceptible to the reproach that it
does not take into account the realities of the situation. The
constitutional guarantee then is not to be given a meaning
that disregards what is, what does in fact exist. To assure
that the general welfare be promoted, which is the end of
law, a regulatory measure may cut into the rights to liberty
and property. Those adversely affected may under such
circumstances invoke the equal protection clause only if
they can show that the governmental act assailed, far from
 being inspired by the attainment of the common weal was
prompted by the spirit of hostility, or at the very least,
discrimination that finds no support in reason."
Classification is thus not ruled out, it being sufficient to
quote from the Tuason decision anew "that the laws
operate equally and uniformly on all persons under similar
circumstances or that all persons must be treated in the
same manner, the conditions not being different, both in
the privileges conferred and the liabilities imposed.
Favoritism and undue preference cannot be allowed. For
the principle is that equal protection and security shall be
given to every person under circumstances which, if not
identical, are analogous. If law be looked upon in terms of
burden or charges, those that fall within a class should be
treated in the same fashion, whatever restrictions cast on
some in the group equally binding on the rest.102
Legislative bodies are allowed to classify the subjects of
legislation. If the classification is reasonable, the law may operate
only on some and not all of the people without violating the equal
protection clause.103 The classification must, as an indispensable
requisite, not be arbitrary. To be valid, it must conform to the
following requirements:
1) It must be based on substantial distinctions.
2) It must be germane to the purposes of the law.
3) It must not be limited to existing conditions only.
4) It must apply equally to all members of the class.104
In the Court's view, there are no substantial distinctions between
motels, inns, pension houses, hotels, lodging houses or other
similar establishments. By definition, all are commercial
establishments providing lodging and usually meals and other
services for the public. No reason exists for prohibiting motels and
inns but not pension houses, hotels, lodging houses or other
similar establishments. The classification in the instant case is
invalid as similar subjects are not similarly treated, both as to
rights conferred and obligations imposed. It is arbitrary as it does
not rest on substantial distinctions bearing a just and fair relation
to the purpose of the Ordinance.
The Court likewise cannot see the logic for prohibiting the
business and operation of motels in the Ermita-Malate area but
not outside of this area. A noxious establishment does not
become any less noxious if located outside the area.
The standard "where women are used as tools for entertainment"
is also discriminatory as prostitutionone of the hinted ills
the Ordinance aims to banishis not a profession exclusive to
women. Both men and women have an equal propensity to
engage in prostitution. It is not any less grave a sin when men
engage in it. And why would the assumption that there is an
ongoing immoral activity apply only when women are employed
and be inapposite when men are in harness? This discrimination
based on gender violates equal protection as it is not substantially
related to important government objectives.105 Thus, the
discrimination is invalid.
Failing the test of constitutionality, the Ordinance likewise failed to
pass the test of consistency with prevailing laws.
C. The Ordinance is repugnant
to general laws; it is ultra vires
The Ordinance is in contravention of the Code as the latter merely
empowers local government units to regulate, and not prohibit,
the establishments enumerated in Section 1 thereof.
The power of the City Council to regulate by ordinances the
establishment, operation, and maintenance of motels, hotels and
other similar establishments is found in Section 458 (a) 4 (iv),
which provides that:
Section 458. Powers, Duties, Functions and Compensation.
(a) The sangguniang panlungsod, as the legislative body of
the city, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as
provided for under Section 22 of this Code, and shall:
. . .
 (4) Regulate activities relative to the use of land, buildings
and structures within the city in order to promote the
general welfare and for said purpose shall:
. . .
(iv) Regulate the establishment, operation and
maintenance of cafes, restaurants, beerhouses, hotels,
motels, inns, pension houses, lodging houses, and other
similar establishments, including tourist guides and
transports . . . .
While its power to regulate the establishment, operation and
maintenance of any entertainment or amusement facilities, and to
prohibit certain forms of amusement or entertainment is provided
under Section 458 (a) 4 (vii) of the Code, which reads as follows:
Section 458. Powers, Duties, Functions and Compensation.
(a) The sangguniang panlungsod, as the legislative body of
the city, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as
provided for under Section 22 of this Code, and shall:
. . .
(4) Regulate activities relative to the use of land, buildings
and structures within the city in order to promote the
general welfare and for said purpose shall:
. . .
(vii) Regulate the establishment, operation, and
maintenance of any entertainment or amusement
facilities, including theatrical performances, circuses,
billiard pools, public dancing schools, public dance
halls, sauna baths, massage parlors, and other
places for entertainment or amusement; regulate
such other events or activities for amusement or
entertainment, particularly those which tend to
disturb the community or annoy the inhabitants, or
require the suspension or suppression of the same;
or, prohibit certain forms of amusement or
entertainment in order to protect the social and
moral welfare of the community.
Clearly, with respect to cafes, restaurants, beerhouses, hotels,
motels, inns, pension houses, lodging houses, and other similar
establishments, the only power of the City Council to legislate
relative thereto is to regulate them to promote the general
welfare. The Code still withholds from cities the power to suppress
and prohibit altogether the establishment, operation and
maintenance of such establishments. It is well to recall the rulings
of the Court in Kwong Sing v. City of Manila106 that:
The word "regulate," as used in subsection (l), section 2444
of the Administrative Code, means and includes the power
to control, to govern, and to restrain; but "regulate" should
not be construed as synonymous with "suppress" or
"prohibit." Consequently, under the power to regulate
laundries, the municipal authorities could make proper
police regulations as to the mode in which the employment
or business shall be exercised.107
And in People v. Esguerra,108 wherein the Court nullified an
ordinance of the Municipality of Tacloban which prohibited the
selling, giving and dispensing of liquor ratiocinating that the
municipality is empowered only to regulate the same and not
prohibit. The Court therein declared that:
(A)s a general rule when a municipal corporation is
specifically given authority or power to regulate or to
license and regulate the liquor traffic, power to prohibit is
impliedly withheld.109
These doctrines still hold contrary to petitioners' assertion110 that
they were modified by the Code vesting upon City Councils
prohibitory powers.
Similarly, the City Council exercises regulatory powers over public
dancing schools, public dance halls, sauna baths, massage
parlors, and other places for entertainment or amusement as
found in the first clause of Section 458 (a) 4 (vii). Its powers to
regulate, suppress and suspend "such other events or activities
for amusement or entertainment, particularly those which tend to
disturb the community or annoy the inhabitants" and to "prohibit
certain forms of amusement or entertainment in order to protect
the social and moral welfare of the community" are stated in the
second and third clauses, respectively of the same Section. The
several powers of the City Council as provided in Section 458 (a)
4 (vii) of the Code, it is pertinent to emphasize, are separated by
semi-colons (;), the use of which indicates that the clauses in
which these powers are set forth are independent of each other
albeit closely related to justify being put together in a single
enumeration or paragraph.111 These powers, therefore, should not
be confused, commingled or consolidated as to create a
conglomerated and unified power of regulation, suppression and
prohibition.112
The Congress unequivocably specified the establishments and
forms of amusement or entertainment subject to regulation
among which are beerhouses, hotels, motels, inns, pension
houses, lodging houses, and other similar establishments (Section
458 (a) 4 (iv)), public dancing schools, public dance halls, sauna
baths, massage parlors, and other places for entertainment or
amusement (Section 458 (a) 4 (vii)). This enumeration therefore
cannot be included as among "other events or activities for
amusement or entertainment, particularly those which tend to
disturb the community or annoy the inhabitants" or "certain forms
of amusement or entertainment" which the City Council may
suspend, suppress or prohibit.
The rule is that the City Council has only such powers as are
expressly granted to it and those which are necessarily implied or
incidental to the exercise thereof. By reason of its limited powers
and the nature thereof, said powers are to be
construed strictissimi juris and any doubt or ambiguity arising out
of the terms used in granting said powers must be construed
against the City Council.113 Moreover, it is a general rule in
statutory construction that the express mention of one person,
thing, or consequence is tantamount to an express exclusion of all
others. Expressio unius est exclusio alterium. This maxim is based
upon the rules of logic and the natural workings of human mind. It
is particularly applicable in the construction of such statutes as
create new rights or remedies, impose penalties or punishments,
or otherwise come under the rule of strict construction.114
The argument that the City Council is empowered to enact
the Ordinance by virtue of the general welfare clause of the Code
and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is
likewise without merit. On the first point, the ruling of the Court
in People v. Esguerra,115 is instructive. It held that:
The powers conferred upon a municipal council in the
general welfare clause, or section 2238 of the Revised
Administrative Code, refers to matters not covered by the
other provisions of the same Code, and therefore it can not
be applied to intoxicating liquors, for the power to regulate
the selling, giving away and dispensing thereof is granted
specifically by section 2242 (g) to municipal councils. To
hold that, under the general power granted by section
2238, a municipal council may enact the ordinance in
question, notwithstanding the provision of section 2242 (g),
would be to make the latter superfluous and nugatory,
because the power to prohibit, includes the power to
regulate, the selling, giving away and dispensing of
intoxicating liquors.
On the second point, it suffices to say that the Code being a later
expression of the legislative will must necessarily prevail and
override the earlier law, the Revised Charter of Manila. Legis
posteriores priores contrarias abrogant, or later statute repeals
prior ones which are repugnant thereto. As between two laws on
the same subject matter, which are irreconcilably inconsistent,
that which is passed later prevails, since it is the latest expression
of legislative will.116 If there is an inconsistency or repugnance
between two statutes, both relating to the same subject matter,
which cannot be removed by any fair and reasonable method of
interpretation, it is the latest expression of the legislative will
which must prevail and override the earlier.117
Implied repeals are those which take place when a subsequently
enacted law contains provisions contrary to those of an existing
law but no provisions expressly repealing them. Such repeals have
been divided into two general classes: those which occur where an
act is so inconsistent or irreconcilable with an existing prior act
that only one of the two can remain in force and those which
occur when an act covers the whole subject of an earlier act and is
intended to be a substitute therefor. The validity of such a repeal
is sustained on the ground that the latest expression of the
legislative will should prevail.118
In addition, Section 534(f) of the Code states that "All general and
special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts
thereof which are inconsistent with any of the provisions of this
Code are hereby repealed or modified accordingly." Thus,
submitting to petitioners' interpretation that the Revised Charter
of Manila empowers the City Council to prohibit motels, that
portion of the Charter stating such must be considered repealed
by the Code as it is at variance with the latter's provisions
granting the City Council mere regulatory powers.
It is well to point out that petitioners also cannot seek cover under
the general welfare clause authorizing the abatement of nuisances
without judicial proceedings. That tenet applies to a nuisance per
se, or one which affects the immediate safety of persons and
property and may be summarily abated under the undefined law
of necessity. It can not be said that motels are injurious to the
rights of property, health or comfort of the community. It is a
legitimate business. If it be a nuisance per accidens it may be so
proven in a hearing conducted for that purpose. A motel is not per
se a nuisance warranting its summary abatement without judicial
intervention.119
Notably, the City Council was conferred powers to prevent and
prohibit certain activities and establishments in another section of
the Code which is reproduced as follows:
Section 458. Powers, Duties, Functions and Compensation.
(a) The sangguniang panlungsod, as the legislative body of
the city, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as
provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for
an efficient and effective city government, and in this
connection, shall:
. . .
(v) Enact ordinances intended to prevent, suppress and
impose appropriate penalties for habitual drunkenness in
public places, vagrancy, mendicancy, prostitution,
establishment and maintenance of houses of ill repute,
gambling and other prohibited games of
chance, fraudulent devices and ways to obtain money or
property, drug addiction, maintenance of drug dens, drug
pushing, juvenile delinquency, the printing, distribution or
exhibition of obscene or pornographic materials or
publications, and such other activities inimical to the
welfare and morals of the inhabitants of the city;
. . .
If it were the intention of Congress to confer upon the City Council
the power to prohibit the establishments enumerated in Section 1
of the Ordinance, it would have so declared in uncertain terms by
adding them to the list of the matters it may prohibit under the
above-quoted Section. The Ordinance now vainly attempts to
lump these establishments with houses of ill-repute and expand
the City Council's powers in the second and third clauses of
Section 458 (a) 4 (vii) of the Code in an effort to overreach its
prohibitory powers. It is evident that these establishments may
only be regulated in their establishment, operation and
maintenance.
It is important to distinguish the punishable activities from the
establishments themselves. That these establishments are
recognized legitimate enterprises can be gleaned from another
Section of the Code. Section 131 under the Title on Local
Government Taxation expressly mentioned proprietors or
operators of massage clinics, sauna, Turkish and Swedish baths,
hotels, motels and lodging houses as among the "contractors"
defined in paragraph (h) thereof. The same Section also defined
"amusement" as a "pleasurable diversion and entertainment,"
"synonymous to relaxation, avocation, pastime or fun;" and
"amusement places" to include "theaters, cinemas, concert halls,
circuses and other places of amusement where one seeks
admission to entertain oneself by seeing or viewing the show or
performances." Thus, it can be inferred that the Code considers
these establishments as legitimate enterprises and activities. It is
well to recall the maxim reddendo singula singulis which means
that words in different parts of a statute must be referred to their
appropriate connection, giving to each in its place, its proper force
and effect, and, if possible, rendering none of them useless or
superfluous, even if strict grammatical construction demands
otherwise. Likewise, where words under consideration appear in
different sections or are widely dispersed throughout an act the
same principle applies.120
Not only does the Ordinance contravene the Code, it likewise runs
counter to the provisions of P.D. 499. As correctly argued by
MTDC, the statute had already converted the residential Ermita-
Malate area into a commercial area. The decree allowed the
establishment and operation of all kinds of commercial
establishments except warehouse or open storage depot, dump or
yard, motor repair shop, gasoline service station, light industry
with any machinery or funeral establishment. The rule is that for
an ordinance to be valid and to have force and effect, it must not
only be within the powers of the council to enact but the same
must not be in conflict with or repugnant to the general law.121 As
succinctly illustrated in Solicitor General v. Metropolitan Manila
Authority:122
The requirement that the enactment must not violate
existing law explains itself. Local political subdivisions are
able to legislate only by virtue of a valid delegation of
legislative power from the national legislature (except only
that the power to create their own sources of revenue and
to levy taxes is conferred by the Constitution itself). They
are mere agents vested with what is called the power of
subordinate legislation. As delegates of the Congress, the
local government units cannot contravene but must obey at
all times the will of their principal. In the case before us,
the enactment in question, which are merely local in origin
cannot prevail against the decree, which has the force and
effect of a statute.123
Petitioners contend that the Ordinance enjoys the presumption of
validity. While this may be the rule, it has already been held that
although the presumption is always in favor of the validity or
reasonableness of the ordinance, such presumption must
nevertheless be set aside when the invalidity or unreasonableness
appears on the face of the ordinance itself or is established by
proper evidence. The exercise of police power by the local
government is valid unless it contravenes the fundamental law of
the land, or an act of the legislature, or unless it is against public
policy or is unreasonable, oppressive, partial, discriminating or in
derogation of a common right.124
Conclusion
All considered, the Ordinance invades fundamental personal and
property rights and impairs personal privileges. It is
constitutionally infirm. The Ordinance contravenes statutes; it is
discriminatory and unreasonable in its operation; it is not
sufficiently detailed and explicit that abuses may attend the
enforcement of its sanctions. And not to be forgotten, the City
Council under the Code had no power to enact the Ordinance and
is therefore ultra vires, null and void.
Concededly, the challenged Ordinance was enacted with the best
of motives and shares the concern of the public for the cleansing
of the Ermita-Malate area of its social sins. Police power legislation
of such character deserves the full endorsement of the judiciary
we reiterate our support for it. But inspite of its virtuous aims,
the enactment of the Ordinance has no statutory or constitutional
authority to stand on. Local legislative bodies, in this case, the
City Council, cannot prohibit the operation of the enumerated
establishments under Section 1 thereof or order their transfer or
conversion without infringing the constitutional guarantees of due
process and equal protection of laws not even under the guise of
police power.
WHEREFORE, the Petition is hereby DENIED and the decision of
the Regional Trial Court declaring the Ordinance void is
AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio,
Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna,
Chico-Nazario and Garcia, JJ., concur
Panganiban, J., in the result.
Ynares- Santiago, J., concur in the result only.
--------------------------------------------------------------------------
G.R. No. 139465 October 17, 2000
SECRETARY OF JUSTICE, petitioner,
vs.
HON. RALPH C. LANTION, Presiding Judge, Regional Trial
Court of Manila, Branch 25, and MARK B.
JIMENEZ, respondents.
RESOLUTION
PUNO, J.:
On January 18, 2000, by a vote of 9-6, we dismissed the petition
at bar and ordered the petitioner to furnish private respondent
copies of the extradition request and its supporting papers and to
grant him a reasonable period within which to file his comment
with supporting evidence.1
On February 3, 2000, the petitioner timely filed an Urgent Motion
for Reconsideration. He assails the decision on the following
grounds:
"The majority decision failed to appreciate the following facts and
points of substance and of value which, if considered, would alter
the result of the case, thus:
I. There is a substantial difference between an evaluation
process antecedent to the filing of an extradition petition in
court and a preliminary investigation.
II. Absence of notice and hearing during the evaluation
process will not result in a denial of fundamental fairness.
III. In the evaluation process, instituting a notice and
hearing requirement satisfies no higher objective.
IV. The deliberate omission of the notice and hearing
requirement in the Philippine Extradition Law is intended to
prevent flight.
V. There is a need to balance the interest between the
discretionary powers of government and the rights of an
individual.
VI. The instances cited in the assailed majority decision
when the twin rights of notice and hearing may be
dispensed with in this case results in a non
sequitur conclusion.
VII. Jimenez is not placed in imminent danger of arrest by
the Executive Branch necessitating notice and hearing.
VIII. By instituting a 'proceeding' not contemplated by PD
No. 1069, the Supreme Court has encroached upon the
constitutional boundaries separating it from the other two
co-equal branches of government.
IX. Bail is not a matter of right in proceedings leading to
extradition or in extradition proceedings."2
On March 28, 2000, a 58-page Comment was filed by the private
respondent Mark B. Jimenez, opposing petitioner’s Urgent Motion
for Reconsideration.
On April 5, 2000, petitioner filed an Urgent Motion to Allow
Continuation and Maintenance of Action and Filing of Reply.
Thereafter, petitioner filed on June 7, 2000 a Manifestation with
the attached Note 327/00 from the Embassy of Canada and Note
No. 34 from the Security Bureau of the Hongkong SAR
Government Secretariat. On August 15, 2000, private respondent
filed a Manifestation and Motion for Leave to File Rejoinder in the
event that petitioner's April 5, 2000 Motion would be granted.
Private respondent also filed on August 18, 2000, a Motion to
Expunge from the records petitioner's June 7, 2000 Manifestation
with its attached note verbales. Except for the Motion to Allow
Continuation and Maintenance of Action, the Court denies these
pending motions and hereby resolves petitioner's Urgent Motion
for Reconsideration.
The jugular issue is whether or not the private respondent is
entitled to the due process right to notice and hearing during the
evaluation stage of the extradition process.
We now hold that private respondent is bereft of the right to
notice and hearing during the evaluation stage of the extradition
process.
First. P.D. No. 10693 which implements the RP-US Extradition
Treaty provides the time when an extraditee shall be furnished a
copy of the petition for extradition as well as its supporting
papers, i.e., after the filing of the petition for extradition in the
extradition court, viz:
"Sec. 6. Issuance of Summons; Temporary Arrest; Hearing;
Service of Notices. - (1) Immediately upon receipt of the petition,
the presiding judge of the court shall, as soon as practicable,
summon the accused to appear and to answer the petition on the
day and hour fixed in the order . . . Upon receipt of the answer, or
should the accused after having received the summons fail to
answer within the time fixed, the presiding judge shall hear the
case or set another date for the hearing thereof.
(2) The order and notice as well as a copy of the warrant of
arrest, if issued, shall be promptly served each upon the accused
and the attorney having charge of the case."
It is of judicial notice that the summons includes the petition for
extradition which will be answered by the extraditee.
There is no provision in the RP-US Extradition Treaty and in P.D.
No. 1069 which gives an extraditee the right to demand from the
petitioner Secretary of Justice copies of the extradition request
from the US government and its supporting documents and to
comment thereon while the request is still
undergoing evaluation. We cannot write a provision in the
treaty giving private respondent that right where there is none. It
is well-settled that a "court cannot alter, amend, or add to a
treaty by the insertion of any clause, small or great, or dispense
with any of its conditions and requirements or take away any
qualification, or integral part of any stipulation, upon any motion
of equity, or general convenience, or substantial justice."4
Second. All treaties, including the RP-US Extradition
Treaty, should be interpreted in light of their intent. Nothing
less than the Vienna Convention on the Law of Treaties to which
the Philippines is a signatory provides that "a treaty shall be
interpreted in good faith in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in light
of its object and purpose."5 (emphasis supplied) The preambular
paragraphs of P.D. No. 1069 define its intent, viz:
"WHEREAS, under the Constitution[,] the Philippines adopts the
generally accepted principles of international law as part of the
law of the land, and adheres to the policy of peace, equality,
justice, freedom, cooperation and amity with all nations;
WHEREAS, the suppression of crime is the concern not only of
the state where it is committed but also of any other state to
which the criminal may have escaped, because it saps the
foundation of social life and is an outrage upon humanity at large,
and it is in the interest of civilized communities that crimes should
not go unpunished;
WHEREAS, in recognition of this principle the Philippines recently
concluded an extradition treaty with the Republic of Indonesia,
and intends to conclude similar treaties with other interested
countries;
x x x." (emphasis supplied)
It cannot be gainsaid that today, countries like the Philippines
forge extradition treaties to arrest the dramatic rise of
international and transnational crimes like terrorism and drug
trafficking. Extradition treaties provide the assurance that the
punishment of these crimes will not be frustrated by the frontiers
of territorial sovereignty. Implicit in the treaties should be the
unbending commitment that the perpetrators of these crimes will
not be coddled by any signatory state.
It ought to follow that the RP-US Extradition Treaty calls for an
interpretation that will minimize if not prevent the escape of
extraditees from the long arm of the law and expedite their trial.
The submission of the private respondent, that as a probable
extraditee under the RP-US Extradition Treaty he should be
furnished a copy of the US government request for his extradition
and its supporting documents even while they are still under
evaluation by petitioner Secretary of Justice, does not meet this
desideratum. The fear of the petitioner Secretary of Justice that
the demanded notice is equivalent to a notice to flee must be
deeply rooted on the experience of the executive branch of our
government. As it comes from the branch of our government in
charge of the faithful execution of our laws, it deserves the careful
consideration of this Court. In addition, it cannot be gainsaid that
private respondent’s demand for advance notice can delay the
summary process of executive evaluation of the extradition
request and its accompanying papers. The foresight of Justice
Oliver Wendell Holmes did not miss this danger. In 1911, he held:
"It is common in extradition cases to attempt to bring to bear all
the factitious niceties of a criminal trial at common law. But it is a
waste of time . . . if there is presented, even in somewhat
untechnical form according to our ideas, such reasonable ground
to suppose him guilty as to make it proper that he should be
tried, good faith to the demanding government requires his
surrender."6 (emphasis supplied)
We erode no right of an extraditee when we do not allow time to
stand still on his prosecution. Justice is best served when done
without delay.
Third. An equally compelling factor to consider is
the understanding of the parties themselves to the RP-US
Extradition Treaty as well as the general interpretation of the
issue in question by other countries with similar treaties
with the Philippines. The rule is recognized that while courts
have the power to interpret treaties, the meaning given them by
the departments of government particularly charged with their
negotiation and enforcement is accorded great weight.7 The reason
for the rule is laid down in Santos III v. Northwest Orient
Airlines, et al.,8 where we stressed that a treaty is a joint
executive-legislative act which enjoys the presumption that "it
was first carefully studied and determined to be constitutional
before it was adopted and given the force of law in the country."
Our executive department of government, thru the Department of
Foreign Affairs (DFA) and the Department of Justice (DOJ), has
steadfastly maintained that the RP-US Extradition Treaty and P.D.
No. 1069 do not grant the private respondent a right to notice and
hearing during the evaluation stage of an extradition
process.9 This understanding of the treaty is shared by the
US government, the other party to the treaty.10 This
interpretation by the two governments cannot be given scant
significance. It will be presumptuous for the Court to assume that
both governments did not understand the terms of the treaty they
concluded.
Yet, this is not all. Other countries with similar extradition
treaties with the Philippines have expressed the same
interpretation adopted by the Philippine and US
governments. Canadian11 and Hongkong12 authorities, thru
appropriate note verbales communicated to our Department of
Foreign Affairs, stated in unequivocal language that it is not an
international practice to afford a potential extraditee with a copy
of the extradition papers during the evaluation stage of the
extradition process. We cannot disregard such a convergence of
views unless it is manifestly erroneous.
Fourth. Private respondent, however, peddles the postulate that
he must be afforded the right to notice and hearing as required by
our Constitution. He buttresses his position by likening an
extradition proceeding to a criminal proceeding and the evaluation
stage to a preliminary investigation.
We are not persuaded. An extradition proceeding is sui generis.
It is not a criminal proceeding which will call into
operation all the rights of an accused as guaranteed by the Bill of
Rights. To begin with, the process of extradition does not
involve the determination of the guilt or innocence of an
accused.13 His guilt or innocence will be adjudged in the court of
the state where he will be extradited. Hence, as a rule,
constitutional rights that are only relevant to determine the guilt
or innocence of an accused cannot be invoked by an extraditee
especially by one whose extradition papers are still undergoing
evaluation.14 As held by the US Supreme Court in United States
v. Galanis:
"An extradition proceeding is not a criminal prosecution, and the
constitutional safeguards that accompany a criminal trial in this
country do not shield an accused from extradition pursuant to a
valid treaty."15
There are other differences between an extradition proceeding
and a criminal proceeding. An extradition proceeding is summary
in nature while criminal proceedings involve a full-blown trial.16 In
contradistinction to a criminal proceeding, the rules of evidence in
an extradition proceeding allow admission of evidence under less
stringent standards.17 In terms of the quantum of evidence to be
satisfied, a criminal case requires proof beyond reasonable doubt
for conviction18 while a fugitive may be ordered extradited "upon
showing of the existence of a prima facie case."19 Finally, unlike in
a criminal case where judgment becomes executory upon being
rendered final, in an extradition proceeding, our courts may
adjudge an individual extraditable but the President has the final
discretion to extradite him.20 The United States adheres to a similar
practice whereby the Secretary of State exercises wide discretion
in balancing the equities of the case and the demands of the
nation's foreign relations before making the ultimate decision to
extradite.21
As an extradition proceeding is not criminal in character
and the evaluation stage in an extradition proceeding is not
akin to a preliminary investigation, the due process
safeguards in the latter do not necessarily apply to the
former. This we hold for the procedural due process required by a
given set of circumstances "must begin with a determination of
the precise nature of the government function involved as
well as the private interest that has been affected by
governmental action."22 The concept of due process is flexible for
"not all situations calling for procedural safeguards call for the
same kind of procedure."23
Fifth. Private respondent would also impress upon the Court the
urgency of his right to notice and hearing considering the alleged
threat to his liberty "which may be more priceless than life."24 The
supposed threat to private respondent’s liberty is perceived to
come from several provisions of the RP-US Extradition Treaty and
P.D. No. 1069 which allow provisional arrest and temporary
detention.
We first deal with provisional arrest. The RP-US Extradition Treaty
provides as follows:
"PROVISIONAL ARREST
1. In case of urgency, a Contracting Party may request the
provisional arrest of the person sought pending
presentation of the request for extradition. A request
for provisional arrest may be transmitted through the
diplomatic channel or directly between the Philippine
Department of Justice and the United States Department of
Justice.
2. The application for provisional arrest shall contain:
a) a description of the person sought;
b) the location of the person sought, if known;
c) a brief statement of the facts of the case,
including, if possible, the time and location of the
offense;
d) a description of the laws violated;
e) a statement of the existence of a warrant of
arrest or finding of guilt or judgment of conviction
against the person sought; and
f) a statement that a request for extradition for
the person sought will follow.
3. The Requesting State shall be notified without delay of
the disposition of its application and the reasons for any
denial.
4. A person who is provisionally arrested may be
discharged from custody upon the expiration of sixty (60)
days from the date of arrest pursuant to this Treaty if the
executive authority of the Requested State has not received
the formal request for extradition and the supporting
documents required in Article 7." (emphasis supplied)
In relation to the above, Section 20 of P.D. No. 1069 provides:
"Sec. 20. Provisional Arrest.- (a) In case of urgency, the
requesting state may, pursuant to the relevant treaty or
convention and while the same remains in force, request for the
provisional arrest of the accused, pending receipt of the
request for extradition made in accordance with Section 4 of
this Decree.
(b) A request for provisional arrest shall be sent to the
Director of the National Bureau of Investigation, Manila,
either through the diplomatic channels or direct by post or
telegraph.
(c) The Director of the National Bureau of Investigation or
any official acting on his behalf shall upon receipt of the
request immediately secure a warrant for the provisional
 arrest of the accused from the presiding judge of the Court
of First Instance of the province or city having jurisdiction
of the place, who shall issue the warrant for the provisional
arrest of the accused. The Director of the National Bureau
of Investigation through the Secretary of Foreign Affairs
shall inform the requesting state of the result of its request.
(d) If within a period of 20 days after the provisional arrest
the Secretary of Foreign Affairs has not received the
request for extradition and the documents mentioned in
Section 4 of this Decree, the accused shall be released from
custody." (emphasis supplied)
Both the RP-US Extradition Treaty and P.D. No. 1069 clearly
provide that private respondent may be provisionally
arrested only pending receipt of the request for extradition.
Our DFA has long received the extradition request from the United
States and has turned it over to the DOJ. It is undisputed that
until today, the United States has not requested for private
respondent’s provisional arrest. Therefore, the threat to private
respondent’s liberty has passed. It is more imagined than real.
Nor can the threat to private respondent’s liberty come from
Section 6 of P.D. No. 1069, which provides:
"Sec. 6. Issuance of Summons; Temporary Arrest; Hearing,
Service of Notices.- (1) Immediately upon receipt of the petition,
the presiding judge of the court shall, as soon as practicable,
summon the accused to appear and to answer the petition on the
day and hour fixed in the order. [H]e may issue a warrant for
the immediate arrest of the accused which may be served
anywhere within the Philippines if it appears to the presiding judge
that the immediate arrest and temporary detention of the
accused will best serve the ends of justice. . .
(2) The order and notice as well as a copy of the warrant of
arrest, if issued, shall be promptly served each upon the accused
and the attorney having charge of the case." (emphasis supplied)
It is evident from the above provision that a warrant of arrest for
the temporary detention of the accused pending the extradition
hearing may only be issued by the presiding judge of the
extradition court upon filing of the petition for extradition. As
the extradition process is still in the evaluation stage of pertinent
documents and there is no certainty that a petition for extradition
will be filed in the appropriate extradition court, the threat to
private respondent’s liberty is merely hypothetical.
Sixth. To be sure, private respondent’s plea for due process
deserves serious consideration involving as it does his primordial
right to liberty. His plea to due process, however, collides
with important state interests which cannot also be ignored
for they serve the interest of the greater majority. The clash
of rights demands a delicate balancing of interests approach which
is a "fundamental postulate of constitutional law."25 The approach
requires that we "take conscious and detailed consideration of the
interplay of interests observable in a given situation or type of
situation."26 These interests usually consist in the exercise by an
individual of his basic freedoms on the one hand, and the
government’s promotion of fundamental public interest or policy
objectives on the other.27
In the case at bar, on one end of the balancing pole is the private
respondent’s claim to due process predicated on Section 1, Article
III of the Constitution, which provides that "No person shall be
deprived of life, liberty, or property without due process of law . .
." Without a bubble of doubt, procedural due process of law lies at
the foundation of a civilized society which accords paramount
importance to justice and fairness. It has to be accorded the
weight it deserves.
This brings us to the other end of the balancing pole. Petitioner
avers that the Court should give more weight to our national
commitment under the RP-US Extradition Treaty to expedite the
extradition to the United States of persons charged with violation
of some of its laws. Petitioner also emphasizes the need to defer
to the judgment of the Executive on matters relating to foreign
affairs in order not to weaken if not violate the principle of
separation of powers.
Considering that in the case at bar, the extradition
proceeding is only at its evaluation stage, the nature of the
right being claimed by the private respondent is nebulous
and the degree of prejudice he will allegedly suffer is weak,
we accord greater weight to the interests espoused by the
government thru the petitioner Secretary of
Justice. In Angara v. Electoral Commission, we held that the
"Constitution has blocked out with deft strokes and in bold lines,
allotment of power to the executive, the legislative and the judicial
departments of the government."28 Under our constitutional
scheme, executive power is vested in the President of the
Philippines.29 Executive power includes, among others, the power
to contract or guarantee foreign loans and the power to enter
into treaties or international agreements.30 The task of
safeguarding that these treaties are duly honored devolves upon
the executive department which has the competence and
authority to so act in the international arena.31 It is traditionally
held that the President has power and even supremacy over the
country’s foreign relations.32 The executive department is aptly
accorded deference on matters of foreign relations considering the
President’s most comprehensive and most confidential information
about the international scene of which he is regularly briefed by
our diplomatic and consular officials. His access to ultra-sensitive
military intelligence data is also unlimited.33 The deference we give
to the executive department is dictated by the principle of
separation of powers. This principle is one of the cornerstones of
our democratic government. It cannot be eroded without
endangering our government.
The Philippines also has a national interest to help in suppressing
crimes and one way to do it is to facilitate the extradition of
persons covered by treaties duly entered by our government.
More and more, crimes are becoming the concern of one world.
Laws involving crimes and crime prevention are undergoing
universalization. One manifest purpose of this trend towards
globalization is to deny easy refuge to a criminal whose activities
threaten the peace and progress of civilized countries. It is to the
great interest of the Philippines to be part of this irreversible
movement in light of its vulnerability to crimes, especially
transnational crimes.
In tilting the balance in favor of the interests of the State,
the Court stresses that it is not ruling that the private
respondent has no right to due process at all throughout
the length and breadth of the extrajudicial
proceedings. Procedural due process requires a determination of
what process is due, when it is due, and the degree of what is
due. Stated otherwise, a prior determination should be made
as to whether procedural protections are at all due and
when they are due, which in turn depends on the extent to
which an individual will be "condemned to suffer grievous
loss."34 We have explained why an extraditee has no right to
notice and hearing during the evaluation stage of the extradition
process. As aforesaid, P.D. No. 1069 which implements the RP-US
Extradition Treaty affords an extraditee sufficient
opportunity to meet the evidence against him once the petition
is filed in court. The time for the extraditee to know the basis of
the request for his extradition is merely moved to the filing in
court of the formal petition for extradition. The extraditee's right
to know is momentarily withheld during the evaluation
stage of the extradition process to accommodate the more
compelling interest of the State to prevent escape of potential
extraditees which can be precipitated by premature information of
the basis of the request for his extradition. No less compelling at
that stage of the extradition proceedings is the need to be more
deferential to the judgment of a co-equal branch of the
government, the Executive, which has been endowed by our
Constitution with greater power over matters involving our foreign
relations. Needless to state, this balance of interests is not a
static but a moving balance which can be adjusted as the
extradition process moves from the administrative stage to the
judicial stage and to the execution stage depending on factors
that will come into play. In sum, we rule that the temporary
hold on private respondent's privilege of notice and hearing is
a soft restraint on his right to due process which will not deprive
him of fundamental fairness should he decide to resist the
request for his extradition to the United States. There is no
denial of due process as long as fundamental fairness is
assured a party.
We end where we began. A myopic interpretation of the due
process clause would not suffice to resolve the conflicting rights in
the case at bar. With the global village shrinking at a rapid pace,
propelled as it is by technological leaps in transportation and
communication, we need to push further back our horizons and
work with the rest of the civilized nations and move closer to the
universal goals of "peace, equality, justice, freedom, cooperation
and amity with all nations."35 In the end, it is the individual who
will reap the harvest of peace and prosperity from these efforts.
WHEREFORE, the Urgent Motion for Reconsideration is
GRANTED. The Decision in the case at bar promulgated on
January18, 2000 is REVERSED. The assailed Order issued by the
public respondent judge on August 9, 1999 is SET ASIDE. The
temporary restraining order issued by this Court on August 17,
1999 is made PERMANENT. The Regional Trial Court of Manila,
Branch 25 is enjoined from conducting further proceedings in Civil
Case No. 99-94684.

SO ORDERED.