RIGHT TO INFORMATION

The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents, and papers pertaining to official acts, transactions, or decisions,
as well as to government research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law. (Section 7, Article III)

A. SCOPE

The right to information contemplates inclusion of negotiations leading to the consummation of the
transaction. Certainly, a consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is consummated, and
if one is consummated, it may be too late for the public to expose its defects. The right covers three
categories of information which are matters of public concern, namely:

(1) official records;

(2) (2) documents and papers pertaining to official acts, transactions and decisions; and

(3) (3) government research data used in formulating policies.

EO 2 (SERIES OF 2016)

OPERATIONALIZING IN THE EXECUTIVE BRANCH THE PEOPLE’S CONSTITUTIONAL RIGHT TO

INFORMATION AND THE STATE POLICIES TO FULL PUBLIC DISCLOSURE AND TRANSPARENCY IN THE
PUBLIC SERVICE AND PROVIDING GUIDELINES THEREFOR.

SECTION 2. Coverage. This order shall cover all government offices under the Executive Branch,
including but not limited to the national government and all its offices, departments, bureaus,
offices, and instrumentalities, including government-owned or -controlled corporations, and state
universities and colleges. Local government units (LGUs) are encouraged to observe and be guided
by this Order.
B. LIMITATIONS

AKBAYAN v. Aquino
GR No. 170516, July 16, 2008

FACTS: Petitioners, non-government organizations, Congresspersons, citizens and taxpayers

requested, via the petition for mandamus and prohibition, to obtain from respondents the full text
of the Japan-Philippines Economic Partnership Agreement (JPEPA) including the Philippine and
Japanese offers submitted during the negotiation process and all pertinent attachments and annexes
thereto. The Congress, through the House Committee called for an inquiry into the JPEPA, but at the
same time, the Executive refused to give them the said copies until the negotiation was completed.

JPEPA was the bilateral free trade agreement entered between the Philippine government with
Japan, concerned with trade in goods, rules of origin, customs procedures, paperless trading, trade
in services, investment, intellectual property rights, government procurement, movement of natural
persons, cooperation, competition policy, mutual recognition, dispute avoidance and settlement,
improvement of the business environment, and general and final provisions.

ISSUE:
1. Whether or not petitioners have legal standing.
2. Whether or not the Philippine and Japanese offers during the negotiation process are
privileged.
3. Whether or not the President can validly exclude Congress, exercising its power of
inquiry and power to concur in treaties, from the negotiation process.

RULING:
Legal Standing

In a petition anchored upon the right of the people to information on matters of public concern,
which is a public right by its very nature, petitioners need not show that they have any legal or
special interest in the result, it being sufficient to show that they are citizens and, therefore, part of
the general public which possesses the right. As the present petition is anchored on the right to
information and petitioners are all suing in their capacity as citizens and groups of citizens including
petitioners-members of the House of Representatives who additionally are suing in their capacity as
such, the standing of petitioners to file the present suit is grounded in jurisprudence.

JPEPA, A Matter of Public Concern

To be covered by the right to information, the information sought must meet the threshold
requirement that it be a matter of public concern. From the nature of the JPEPA, as in international
trade agreement, it is evident that the Japanese and Philippine offers submitted during the
negotiations towards its executions are matters of public concern. This, respondents do not dispute.
They only claim that diplomatic negotiations are covered by the doctrine of executive privilege, thus
constituting an exception to the right to information and the policy of full public disclosure.
Privileged Character of Diplomatic Negotiations Recognized
It is established, however, that neither the right to information nor the policy of full public
disclosure is absolute, there being matters which, albeit of public concern or interest, are recognized
as privileged. The categories of information that may be considered privileged includes matters of
diplomatic character and under negotiation and review.

The documents on the proposed JPEPA as well as the text which is subject to negotiations and legal
review by the parties fall under the exceptions to the right of access to information on matters of
public concern and policy of public disclosure. They come within the coverage of executive
privilege. At the time when the Committee was requesting for copies of such documents, the
negotiations were ongoing as they are still now and the text of the proposed JPEPA is still uncertain
and subject to change. Considering the status and nature of such documents then and now, these
are evidently covered by executive privilege consistent with existing legal provisions and settled
jurisprudence.

Applying the principles adopted in PMPF v. Manglapus, it is clear that while the final text of the
JPEPA may not be kept perpetually confidential – since there should be “ample opportunity for
discussion before [a treaty] is approved” – the offers exchanged by the parties during the
negotiations continue to be privileged even after the JPEPA is published. It is reasonable to conclude
that the Japanese representatives submitted their offers with the understanding that “historic
confidentiality” would govern the same. Disclosing these offers could impair the ability of the
Philippines to deal not only with Japan but with other foreign governments in future negotiations.

Also, the privileged character of diplomatic negotiations has been recognized in this jurisdiction. A
ruling that Philippine offers in treaty negotiations should now be open to public scrutiny would
discourage future Philippine representatives from frankly expressing their views during negotiations.
Diplomatic negotiations, therefore, are recognized as privileged in this jurisdiction, the JPEPA
negotiations constituting no exception.

Does the exception apply even though JPEPA is primarily economic and does not involve national
security?

While there are certainly privileges grounded on the necessity of safeguarding national security such
as those involving military secrets, not all are founded thereon. One example is the “informer’s
privilege,” or the privilege of the Government not to disclose the identity of a person or persons who
furnish information of violations of law to officers charged with the enforcement of that law. The
suspect involved need not be so notorious as to be a threat to national security for this privilege to
apply in any given instance. Otherwise, the privilege would be inapplicable in all but the most high-
profile cases, in which case not only would this be contrary to long-standing practice. It would also
be highly prejudicial to law enforcement efforts in general.

Also illustrative is the privileged accorded to presidential communications, which are presumed
privileged without distinguishing between those which involve matters of national security and
those which do not, the rationale for the privilege being that a frank exchange of exploratory ideas
and assessments, free from the glare of publicity and pressure by interested parties, is essential to
protect the independence of decision-making of those tasked to exercise Presidential, Legislative
and Judicial power.

In the same way that the privilege for judicial deliberations does not depend on the nature of the
case deliberated upon, so presidential communications are privileged whether they involve matters
of national security.

It bears emphasis, however, that the privilege accorded to presidential communications is not
absolute, one significant qualification being that “the Executive cannot, any more than the other
branches of government, invoke a general confidentiality privilege to shield its officials and
employees from investigations by the proper governmental institutions into possible criminal
wrongdoing.” This qualification applies whether the privilege is being invoked in the context of a
judicial trial or a congressional investigation conducted in aid of legislation.

Closely related to the “presidential communications” privilege is the deliberative process privilege
recognized in the United States. As discussed by the U.S. Supreme Court in NLRB v. Sears, Roebuck &
Co, deliberative process covers documents reflecting advisory opinions, recommendations and
deliberations comprising part of a process by which governmental decisions and policies are
formulated. Notably, the privileged status of such documents rests, not on the need to protect
national security but, on the “obvious realization that officials will not communicate candidly among
themselves if each remark is a potential item of discovery and front page news,” the objective of the
privilege being to enhance the quality of agency decisions.

The diplomatic negotiations privilege bears a close resemblance to the deliberative process and
presidential communications privilege. It may be readily perceived that the rationale for the
confidential character of diplomatic negotiations, deliberative process, and presidential
communications is similar, if not identical.

The earlier discussion on PMPF v. Manglapus shows that the privilege for diplomatic negotiations is
meant to encourage a frank exchange of exploratory ideas between the negotiating parties by
shielding such negotiations from public view. Similar to the privilege for presidential
communications, the diplomatic negotiations privilege seeks, through the same means, to protect
the independence in decision-making of the President, particularly in its capacity as “the sole organ
of the nation in its external relations, and its sole representative with foreign nations.” And, as with
the deliberative process privilege, the privilege accorded to diplomatic negotiations arises, not on
account of the content of the information per se, but because the information is part of a process of
deliberation which, in pursuit of the public interest, must be presumed confidential.

Clearly, the privilege accorded to diplomatic negotiations follows as a logical consequence from the
privileged character of the deliberative process.

Does diplomatic privilege only apply to certain stages of the negotiation process?

In Chavez v. PEA and Chavez v. PCGG, the Court held that with regard to the duty to disclose
“definite propositions of the government,” such duty does not include recognized exceptions like
privileged information, military and diplomatic secrets and similar matters affecting national security
and public order.

Treaty-making power of the President

xxx they (petitioners) argue that the President cannot exclude Congress from the JPEPA negotiations
since whatever power and authority the President has to negotiate international trade agreements
is derived only by delegation of Congress, pursuant to Article VI, Section 28(2) of the Constitution
and Sections 401 and 402 of Presidential Decree No. 1464.

The subject of Article VI Section 28(2) of the Constitution is not the power to negotiate treaties and
international agreements, but the power to fix tariff rates, import and export quotas, and other
taxes xxx.

As to the power to negotiate treaties, the constitutional basis thereof is Section 21 of Article VII –
the article on the Executive Department.

While the power then to fix tariff rates and other taxes clearly belongs to Congress, and is exercised
by the President only be delegation of that body, it has long been recognized that the power to
enter into treaties is vested directly and exclusively in the President, subject only to the concurrence
of at least two-thirds of all the Members of the Senate for the validity of the treaty. In this light, the
authority of the President to enter into trade agreements with foreign nations provided under P.D.
1464 may be interpreted as an acknowledgment of a power already inherent in its office. It may not
be used as basis to hold the President or its representatives accountable to Congress for the conduct
of treaty negotiations.

This is not to say, of course, that the President’s power to enter into treaties is unlimited but for the
requirement of Senate concurrence, since the President must still ensure that all treaties will
substantively conform to all the relevant provisions of the Constitution.

It follows from the above discussion that Congress, while possessing vast legislative powers, may not
interfere in the field of treaty negotiations. While Article VII, Section 21 provides for Senate
concurrence, such pertains only to the validity of the treaty under consideration, not to the conduct
of negotiations attendant to its conclusion. Moreover, it is not even Congress as a while that has
been given the authority to concur as a means of checking the treaty-making power of the President,
but only the Senate.

Thus, as in the case of petitioners suing in their capacity as private citizens, petitioners-members of
the House of Representatives fail to present a “sufficient showing of need” that the information
sought is critical to the performance of the functions of Congress, functions that do not include
treaty-negotiation.

Did the respondent’s alleged failure to timely claim executive privilege constitute waiver of such
privilege?

That respondent invoked the privilege for the first time only in their Comment to the present
petition does not mean that the claim of privilege should not be credited. Petitioner’s position
presupposes that an assertion of the privilege should have been made during the House Committee
investigations, failing which respondents are deemed to have waived it.

xxx (but) Respondent’s failure to claim the privilege during the House Committee hearings may not,
however, be construed as a waiver thereof by the Executive branch. xxx what respondents received
from the House Committee and petitioner-Congressman Aguja were mere requests for information.
And as priorly stated, the House Committee itself refrained from pursuing its earlier resolution to
issue a subpoena duces tecum on account of then Speaker Jose de Venecia’s alleged request to
Committee Chairperson Congressman Teves to hold the same in abeyance.

The privilege is an exemption to Congress’ power of inquiry. So long as Congress itself finds no cause
to enforce such power, there is no strict necessity to assert the privilege. In this light, respondent’s
failure to invoke the privilege during the House Committee investigations did not amount to waiver
thereof.

“Showing of Need” Test

In executive privilege controversies, the requirement that parties present a “sufficient showing of
need” only means, in substance, that they should show a public interest in favor of disclosure
sufficient in degree to overcome the claim of privilege. Verily, the Court in such cases engages in a
balancing of interests. Such a balancing of interests is certainly not new in constitutional
adjudication involving fundamental rights.

xxx However, when the Executive has – as in this case – invoked the privilege, and it has been
established that the subject information is indeed covered by the privilege being claimed, can a
party overcome the same by merely asserting that the information being demanded is a matter of
public concern, without any further showing required? Certainly not, for that would render the
doctrine of executive privilege of no force and effect whatsoever as a limitation on the right to
information, because then the sole test in such controversies would be whether an information is a
matter of public concern.

Right to information vis-a-vis Executive Privilege

xxx the Court holds that, in determining whether an information is covered by the right to
information, a specific “showing of need” for such information is not a relevant consideration, but
only whether the same is a matter of public concern. When, however, the government has claimed
executive privilege, and it has established that the information is indeed covered by the same, then
the party demanding it, if it is to overcome the privilege, must show that that information is vital,
not simply for the satisfaction of its curiosity, but for its ability to effectively and reasonably
participate in social, political, and economic decision-making.
 NERI V. SENATE
G.R. 180643 (2008)

DOCTRINE: The right to information does not extend to matters recognized as ‘privileged
information’ under the separation of powers, by which the Court meant Presidential conversations,
correspondences, and discussions in closed-door Cabinet meetings.

FACTS:

1. Neri, the head of NEDA, was then invited to testify before the Senate Blue Ribbon. However,
when probed further on what they discussed about the NBN Project, petitioner refused to
answer, invoking “executive privilege”. In particular, he refused to answer the questions on:

(a) whether or not President Arroyo followed up the NBN Project,

(b) whether or not she directed him to prioritize it, and
(c) whether or not she directed him to approve.

2. Neri Contention: the communications elicited by the three (3) questions were covered by
executive privilege because (a) they related to a quintessential and non-delegable power of
the President, (b) they were received by a close advisor of the President, and (c) respondent
Committees failed to adequately show a compelling need that would justify the limitation of
the privilege and the unavailability of the information elsewhere by an appropriate
investigating authority.

3. Senate Contention: Respondent Committees claim that the Court erred in upholding the
President’s invocation, through the Executive Secretary, of executive privilege because (a)
between respondent Committees’ specific and demonstrated need and the President’s
generalized interest in confidentiality, there is a need to strike the balance in favor of the
former; and (b) in the balancing of interest, the Court disregarded the provisions of the 1987
Philippine Constitution on government transparency, accountability and disclosure of
information

ISSUE:

WHETHER OR NOT THE CONSTITUTIONAL RIGHT OF THE PEOPLE TO INFORMATION, AND

THE CONSTITUTIONAL POLICIES ON PUBLIC ACCOUNTABILITY AND TRANSPARENCY OUTWEIGH
THE CLAIM OF EXECUTIVE PRIVILEGE.

RULING:

No The privileged character of diplomatic negotiations has been recognized in this

jurisdiction as a valid limitation on the right to information, the Court in Chavez v. PCGG held that
"information on inter-government exchanges prior to the conclusion of treaties and executive
agreements may be subject to reasonable safeguards for the sake of national interest.

Considering that the information sought through the three (3) questions subject of this Petition
involves the President’s dealings with a foreign nation, with more reason, this Court is wary of approving
the view that Congress may peremptorily inquire into not only official, documented acts of the President
but even her confidential and informal discussions with her close advisors on the pretext that said
questions serve some vague legislative need. Regardless of who is in office, this Court can easily foresee
unwanted consequences of subjecting a Chief Executive to unrestricted congressional inquiries done with
increased frequency and great publicity. No Executive can effectively discharge constitutional functions in
the face of intense and unchecked legislative incursion into the core of the President’s decision-making
process, which inevitably would involve her conversations with a member of her Cabinet.

Indeed, the constitutional provisions cited by respondent Committees do not espouse an

absolute right to information. By their wording, the intention of the Framers to subject such right to the
regulation of the law is unmistakable. The highlighted portions of the following provisions show the
obvious limitations on the right to information, thus:

Article III, Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to official records, and to
documents, and papers pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.

Article II, Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public interest. (Emphasis
supplied)

In Chavez v. Presidential Commission on Good Government, it was stated that there are no
specific laws prescribing the exact limitations within which the right may be exercised or the
correlative state duty may be obliged. Nonetheless, it enumerated the recognized restrictions to such
rights, among them: (1) national security matters, (2) trade secrets and banking transactions, (3)
criminal matters, and (4) other confidential information. National security matters include state secrets
regarding military and diplomatic matters, as well as information on inter-government exchanges prior
to the conclusion of treaties and executive agreements. It was further held that even where there is no
need to protect such state secrets, they must be "examined in strict confidence and given scrupulous
protection."

Incidentally, the right primarily involved here is the right of respondent Committees to obtain
information allegedly in aid of legislation, not the people’s right to public information. It is worth
mentioning at this juncture that the parties here are respondent Committees and petitioner Neri and
that there was no prior request for information on the part of any individual citizen.

III. Memorandum from the Executive Secretary dated 24 Nov. 2016 re Inventory of Exceptions to
EO No. 2 (S. 2016)

1. Information covered by executive privilege;

2. Privileged information relating to national security, defense, or international relations;
3. Information concerning law enforcement and protection of public and personal safety;
4. Information deemed confidential for the protection of the privacy and certain individuals
such as minors, victims of crimes or the accused;
5. Information, documents, or records known by reason of official capacity and are deemed as
confidential, including those submitted or disclosed by entities to government agencies,
tribunals and boards or officers, in relation to the performance of their functions or to
inquires or investigation conducted by them in the exercise of their administrative,
regulatory or quasi-judicial powers;
6. Prejudicial, premature disclosure;
7. Records of proceedings or information from proceedings which pursuant to law or relevant
rules and regulations are treated as confidential or privileged;
 8. Matters considered confidential under banking and finance laws and their amendatory laws,
and;
9. Other exceptions to the right to information under laws, jurisprudence, and rules and
regulations.

RIGHT TO ASSOCIATION
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. (Section 8, Article
III)

A. MEMBERSHIP IN SUBVERSIVE ORGANIZATIONS

People vs. Ferrer

48 SCRA 382 (1972)

FACTS: Feliciano Co and Nilo Tayag, together with five others, were charged with violation of R. A.
No.1700 or the Anti-Subversion Law which outlaws the Communist Party of the Philippines and
other“subversive associations,” and punishes any person who “knowingly, willfully and by overt acts
affiliates himself with, becomes or remains a member” of the Party or of any other similar
“subversive”organization. Both accused moved to quash the informations on the ground that the
Anti-Subversion Law is 1. a bill of attainder 2. it is vague; (3) it embraces more than one subject not
expressed in the title thereof; and (4) it denied him the equal protection of the laws. The trial court
agreed and declared the statute void on the grounds that it is a bill of attainder and that it is vague
and overboard, and thus, dismissed the informations against the two accused. The Government
appealed.

ISSUE: Whether the Anti-Subversive Act of 1957 outlawing subversive associations is violative of
the constitutional right of association.

RULING: No. The Act is aimed against conspiracies to overthrow the Government by force, violence
or other illegal means. Whatever interest in freedom of speech and freedom of association is
infringed by the prohibition against knowing membership in the Communist Party of the Philippines,
is so indirect and so insubstantial as to be clearly and heavily outweighed by the overriding
considerations of national security and the preservation of democratic institutions in this country.

NOTE: The Act is not a bill of attainder as the government has to prove and establish the elements
of the crime.
B. RIGHT NOT TO JOIN

STA. CLARA HOMEOWNERS’ ASSOCIATION vs. VICTOR MA. GASTON and

LYDIA GASTON
GR No. 141961, January 23, 2002
BRIEFLY

They didn’t want to join the home owner’s association, didn’t pay dues and got non member
stickers. Napahiya sila sa gate one time and filed a TRO with the RTC. The HOA filed a petition to
dismiss, as far as the issue regarding right to free association, ISSUE#1 lang, other issues are
regarding jurisdiction and cause of action, just in case. Court said they cannot be compelled to be
members of the HOA.

FACTS:

Sps Gaston purchased a lot in Sta. Clara Subdivision. There was no mentioned of having to join the
homeowners association. They did not join the HOA. They were only given non-member HOA
stickers which required them to present their licenses upon entry to the subdivision. At one point
the guard on duty lowered the gate thing preventing Victor Gaston from entering, who also alleged
that it being done in the presence of other home owners cause him to suffer moral damage.

SPS wanted a TRO against the HOA. And the HOA filed a motion to dismiss the case. HOA also argued
that the RTC was not the proper venue for this as it should be the Home Insurance and Guaranty
Corporation because it was an intra corporation controversy the Santa Clara HOA being incorporated
under the SEC and that the Sps. Gaston were members. (as the HOA’s by laws contain a provision
making all home owners become automatic members of the HOA) Plus they enjoyed the privileges
and benefits of membership provided in the HOA as well as attending a general special meeting of
association members.

The HOA also allege that there was no injury was sustained by Victor as he was not actually
prevented from entering the subdivision.

RTC Denies the motion to dismiss and said RTC had the jurisdiction over the dispute and also held
that the complaint had a cause of action.

ISSUE

1. WON SPS GASTON ARE MEMBERS OF THE SANTA CLARA HOA

2. WON SPS GASTON HAVE A CAUSE OF ACTION AGAINST THE HOA
3. WON THE RTC HAS JURISDICTION OVER THE CASE

HELD

1. We are not persuaded. The constitutionally guaranteed freedom of association18 includes the
freedom not to associate. The right to choose with whom one will associate oneself is the very
foundation and essence of that partnership. It should be noted that the provision guarantees the
right to form an association. It does not include the right to compel others to form or join one.
More to the point, private respondents cannot be compelled to become members of the SCHA by
the simple expedient of including them in its Articles of Incorporation and By-laws without their
express or implied consent. True, it may be to the mutual advantage of lot owners in a subdivision to
band themselves together to promote their common welfare. But that is possible only if the owners
voluntarily agree, directly or indirectly, to become members of the association. True also,
memberships in homeowners’ associations may be acquired in various ways -- often through deeds
of sale, Torrens certificates or other forms of evidence of property ownership. In the present case,
however, other than the said Articles of Incorporation and By-laws, there is no showing that private
respondents have agreed to be SCHA members.

2. In the instant case, the records sufficiently establish a cause of action. First, the Complaint alleged
that, under the Constitution, respondents had a right of free access to and from their residential
abode. Second, under the law, petitioners have the obligation to respect this right. Third, such right
was impaired by petitioners when private respondents were refused access through the Sta. Clara
Subdivision, unless they showed their driver’s license for identification.

Given these hypothetically admitted facts, the RTC, in the exercise of its original and exclusive
jurisdiction, could have rendered judgment over the dispute.

3. RTC has jurisdiction here. As the spouses are not even members The HIGC exercises limited
jurisdiction over homeowners’ disputes. The law confines its authority to controversies that arise
from any of the following intra-corporate relations: (1) between and among members of the
association; (2) between any and/or all of them and the association of which they are members; and
(3) between the association and the state insofar as the controversy concerns its right to exist as a
corporate entity.

Bel Air village Association Inc v Dionisio

GR No. L-38354 (1989)

IMPORTANT NOTES: Right to association (right not to join)

• The constitutional proscription that no person can be compelled to be a member of an
association against his will applies only to government acts and not to private transactions
like the one in question.
• On grounds of equity alone, a member of an association should contribute his share in the
community expenses for security, street lights, maintenance of streets, and other services.

FACTS:
1. Plaintiff-Appellee Bell Air Village Association Inc filed a complaint against Dionisio for the
collection of P2,100.00 plus penalty for failure of Dionisio to pay the association dues.

2. Defendant-Appelant Dionisio insists that he is not liable to pay the dues on the following ground:
1) The questioned assessment is a property tax outside the corporate power of respondent
association to impose.
2) Respondent association has no power to compel the petitioner to pay the assessment for lack of
privity of contract.
3) The questioned assessment should not be enforced for being unreasonable, arbitrary, oppressive,
confiscatory and discriminatory.
4) Respondent association is exercising governmental powers which should not be sanctioned.

3. RTC - ruled in favor of plaintiff-appellee and ordered Dionisio to pay the principal amount plus
interest.

4. CA – raised the issue to SC for being purely questions of law.

ISSUE:Whether the act of petitioner in compelling respondent to be a member and pay the
corresponding association dues is unconstitutional and outside the scope of its corporate power?

RULING:
No. When the petitioner voluntarily bought the subject parcel of land it was understood that
he took the same free of all encumbrances except notations at the back of the certificate of title,
among them, that he automatically becomes a member of the respondent association.
The mode of payment as well as the purposes for which the dues are intended clearly
indicate that the dues are not in the concept of a property tax as claimed by the petitioner. They
are shares in the common expenses for necessary services.
The contention that this lien collides with the constitutional guarantee of freedom of
association is not tenable. The transaction between the defendants and the original seller
(defendant's immediate predecessor) of the land covered by TCT No. 81136 is a sale and the
conditions have been validly imposed by the said vendor/the same not being contrary to law, morals
and good customs and public policy. The fact that it has been approved by the Land Registration
Commission did not make it a governmental act subject to the constitutional restriction against
infringement of the right of association. The constitutional proscription that no person can be
compelled to be a member of an association against his will applies only to government acts and not
to private transactions like the one in question
The defendant cannot legally maintain that he is compelled to be a member of the
association against his will because the limitation is imposed upon his ownership of property.
The Court holds that the limitation or lien imposed upon TCT No. 811136 is reasonable and
valid.
 In re: Marcial Edillion, 84 SCRA 554 (1978)
SHORT

1975. Marcial is a member of the Bar but refuses to pay his dues and is a delinquent member. The
board of governors recommended to the Court the removal of the name of the respondent from its
Roll of Attorneys for "stubborn refusal to pay his membership dues" to the IBP since the latter's
constitution notwithstanding due notice.

The Board of governors made the recommendation to remove his name from the roll of attorneys.
He continues to refuse despite the threat of disbarment and avers that while yes, the bar is
necessary, he does not agree with the obligatory membership and collection of fees as well as the
ability of the bar to impose penalties on delinquent members.

FACTS

1976. IBP president submitted the resolution recommending Edillon’s removal from the roll of
attorneys: pursuant to paragraph 2, Section 24, Article III of the By-Laws of the IBP, which reads:

Should the delinquency further continue until the following June 29, the Board shall promptly inquire
into the cause or causes of the continued delinquency and take whatever action it shall deem
appropriate, including a recommendation to the Supreme Court for the removal of the delinquent
member's name from the Roll of Attorneys. Notice of the action taken shall be sent by registered mail
to the member and to the Secretary of the Chapter concerned.7

the Court required the respondent to comment on the resolution and letter adverted to above; he
submitted his comment on February 23, 1976, reiterating his refusal to pay the membership fees
due from him.

Oral Arguments were to be heard and memoranda required to be filed. The respondent, accepts the
need for the integration of the bar, however, objects to particular features to the Integration of the
Bar: It’s exaction of fees and ability to penalize members.

Edillion argues that that the above provisions constitute an invasion of his constitutional rights in
the sense that he is being compelled, as a pre-condition to maintaining his status as a lawyer in
good standing, to be a member of the IBP and to pay the corresponding dues, and that as a
consequence of this compelled financial support of the said organization to which he is admittedly
personally antagonistic, he is being deprived of the rights to liberty and property guaranteed to him
by the Constitution. Hence, the respondent concludes, the above provisions of the Court Rule and of
the IBP By-Laws are void and of no legal force and effect.

ISSUE

1. WON the Integration of the bar is violative of Edillion’s constitutional freedom to Associate
2. WON the bar may impose fees upon its members
3. WON the bar may penalize its members for non-payment of those fees
HELD

1. Integration does not make a lawyer a member of any group of which he is not already a
member. He became a member of the Bar when he passed the Bar examinations. 7 All that
integration actually does is to provide an official national organization for the well-defined
but unorganized and incohesive group of which every lawyer is a ready a member. Bar
integration does not compel the lawyer to associate with anyone. He is free to attend or not
 attend the meetings of his Integrated Bar Chapter or vote or refuse to vote in its elections as
he chooses. Assuming that the questioned provision does in a sense compel a lawyer to be a
member of the Integrated Bar, such compulsion is justified as an exercise of the police
power of the State.

2. The only compulsion to which he is subjected is the payment of annual dues. The Supreme
Court, in order to further the State's legitimate interest in elevating the quality of
professional legal services, may require that the cost of improving the profession in this
fashion be shared by the subjects and beneficiaries of the regulatory program — the lawyers

a. Under its constitutional power and duty to promulgate rules concerning the
admission to the practice of law and the integration of the Philippine Bar (Article X,
Section 5 of the 1973 Constitution) — which power the respondent acknowledges —
from requiring members of a privileged class, such as lawyers are, to pay a
reasonable fee toward defraying the expenses of regulation of the profession to
which they belong. It is quite apparent that the fee is indeed imposed as a
regulatory measure, designed to raise funds for carrying out the objectives and
purposes of integration.

3. Under the police power of the State, and under the necessary powers granted to the Court
to perpetuate its existence, the respondent's right to practise law before the courts of this
country should be and is a matter subject to regulation and inquiry. And, if the power to
impose the fee as a regulatory measure is recognize, then a penalty designed to enforce its
payment, which penalty may be avoided altogether by payment, is not void as unreasonable
or arbitrary.

a. But we must here emphasize that the practice of law is not a property right but a
mere privilege, and as such must bow to the inherent regulatory power of the Court
to exact compliance with the lawyer's public responsibilities.
Taking of Private Property for Public Use (Note: Refer to discussion under Eminent Domain)

NON-IMPAIRMENT OF CONTRACTS
No law impairing the obligation of contracts shall be passed. (Section 10, Article III)

A. WHEN THERE IS IMPAIRMENT

Impairment is anything that diminishes the efficacy of the contract. There is substantial impairment
when the law changes the terms of a legal contract between parties, either in the time or mode of
performance, or imposes new conditions, or dispenses with those expressed, or authorizes for its
satisfaction something different from that provided in its terms.

China Banking Corp v. ASB Holdings,

GR No. 172192, December 23, 2008

FACTS: ASB entered into an agreement with China Banking Corporation (CBC) whereby ASB was
granted a credit line worth P35M and omnibus credit line worth P265M secured by various
mortgages upon different parcels of land.

ASB failed to pay its obligation upon due date despite demands for payment by CBC. Thereafter, ASB
filed a petition with the SEC for rehabilitation with prayer for suspension of actions and proceedings
pursuant to PD 902-A. The rehabilitation plan drawn contained a provision whereby a dacion en
pago program shall be utilized by the debtor in such a way that the creditors are asked to waive all
penalties and other charges, for purposes of paying ASB’s creditors (which includes CBC) and
rehabilitate ASB. Said plan was approved by SEC.

This prompted CBC to assail the decision of SEC, it argued that dacion violated CBC’s constitutional
right against impairment of contracts. (Because in essence, the plan sought to change the
performance agreed by CBC and ASB thus impairing their contract which is considered the law
between the parties)

SEC denied CBC’s argument. CBC appealed to SEC en banc, Denied.

CBC appealed via Petition for Review under Rule 34 under the Rules of Court with the CA. Dismissed.
Hence, the petition.

ISSUE: Whether respondent’s Rehabilitation Plan violates the mutuality of contracts and curtails a
party’s freedom to contract.

RULING: No. In a related case, Bank of the Philippine Islands v. Securities and Exchange Commission,
the Court En Banc would be more emphatic in holding that:

The very same issues confronted the Court in the case of Metropolitan Bank & Trust Company v. ASB
Holdings, et al. In this case, Metropolitan Bank & Trust Company (MBTC) refused to enter into a
dacion en pago arrangement contained in ASB’s proposed Rehabilitation Plan. MBTC argued, among
others, that the forced transfer of properties and the diminution of its right to enforce its lien on the
mortgaged properties violate its constitutional right against impairment of contracts and right to due
process. The Court ruled that there is no impairment of contracts because the approval of the
Rehabilitation Plan and the appointment of a rehabilitation receiver merely suspend the action for
claims against the ASB Group, and MBTC may still enforce its preference when the assets of the ASB
Group will be liquidated. But if the rehabilitation is found to be no longer feasible, then the claims
against the distressed corporation would have to be settled eventually and the secured creditors
shall enjoy preference over the unsecured ones. Moreover, the Court stated that there is no
compulsion to enter into a dacion en pago agreement, nor to waive the interests, penalties and
related charges, since these are merely proposals to creditors such as MBTC, such that in the event
the secured creditors refuse the dacion, the Rehabilitation Plan proposes to settle the obligations to
secured creditors with mortgaged properties at selling prices.

The Court reiterates that the SEC’s approval of the Rehabilitation Plan did not impair BPI’s right to
contract. As correctly contended by private respondents, the non-impairment clause is a limit on the
exercise of legislative power and not of judicial or quasi-judicial power. The SEC, through the hearing
panel that heard the petition for approval of the Rehabilitation Plan, was acting as a quasijudicial
body and, thus, its order approving the plan cannot constitute an impairment of the right and the
freedom to contract.

Besides, the mere fact that the Rehabilitation Plan proposes a dacion en pago approach does not
render it defective on the ground of impairment of the right to contract. Dacion en pago is a special
mode of payment where the debtor offers another thing to the creditor who accepts it as equivalent
of payment of an outstanding debt. The undertaking really partakes in a sense of the nature of sale,
that is, the creditor is really buying the thing or property of the debtor, the payment for which is to
be charged against the debtor’s debt. As such, the essential elements of a contract of sale, namely;
consent, object certain, and cause or consideration must be present. Being a form of contract, the
dacion en pago agreement cannot be perfected without the consent of the parties involved.

We find no element of compulsion in the dacion en pago provision of the Rehabilitation Plan. It was
not the only solution presented by the ASB to pay its creditors.
B. EXCEPTIONS

ORTIGAS & CO. LIMITED PARTNERSHIP V. FEATI BANK AND TRUST CO.
G.R. L-246270 (1979)

DOCTRINE: While non-impairment of contracts is constitutionally guaranteed, the rule is not

absolute, since it has to be reconciled with the legitimate exercise of police power.

FACTS:

1. Plaintiff is engaged in real estate business, developing and selling lots to the public,
particularly the Highway Hills Subdivision along EDSA . Both the plaintiffs entered into
agreements (of sale on installment) and the deeds of sale contained the stipulations or
restrictions that: The parcel of land shall be used exclusively for residential purposes, and
she shall not be entitled to take or remove soil, stones or gravel from it or any other lots
belonging to the seller.

2. Eventually said lots were bought by defendant. Plaintiff claims that restriction is for the
beautification of the subdivision. Defendant claimed of the commercialization of western
part of EDSA. Defendant began constructing a commercial bank building. Plaintiff demand to
stop it, which forced him to file a case, which was later dismissed, upholding police power.
Motion for recon was denied, hence the appeal.

ISSUE:

WHETHER OR NOT NON-IMPAIRMENT CLAUSE IS VIOLATED

RULING:

No. We do not see why public welfare when clashing with the individual right to property
should not be made to prevail through the state's exercise of its police power.

Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los Santos Avenue
(EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone, was
obviously passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police power to
safeguard or promote the health, safety, peace, good order and general welfare of the people in the
locality, Judicial notice may be taken of the conditions prevailing in the area, especially where lots Nos. 5
and 6 are located.

Thus, the state, in order to promote the general welfare, may interfere with personal liberty,
with property, and with business and occupations. Persons may be subjected to all kinds of restraints
and burdens, in order to secure the general comfort health and prosperity of the state and to this
fundamental aim of our Government, the rights of the individual are subordinated.

It is, therefore, clear that even if the subject building restrictions were assumed by the
defendant-appellee as vendee of Lots Nos. 5 and 6, in the corresponding deeds of sale, and later, in
Transfer Certificates of Title Nos. 101613 and 106092, the contractual obligations so assumed cannot
prevail over Resolution No. 27, of the Municipality of Mandaluyong, which has validly exercised its police
power through the said resolution. Accordingly, the building restrictions, which declare Lots Nos. 5 and 6
as residential, cannot be enforced.
C. Franchises, privileges and licenses

Ysmael vs. Deputy Executive Secretary

190 SCRA 673

FACTS: The Timber License Agreement (TLA) gave petitioner exclusive license to cut, collect, and
remove timber within a specified portion of forest land in Nueva Vizcaya. Petitioner sent a letter to
the Office of the President, and another letter to Minister Ernesto Maceda of the Ministry of Natural
Resources [MNR], seeking: (1) the reinstatement of its timber license agreement which was
cancelled during the Marcos administration; (2) the revocation of TLA No. 356 which was issued to
Twin Peaks Development and Realty Corporation without public bidding and in violation of forestry
laws, rules and regulations; and, (3) the issuance of an order allowing petitioner to take possession
of all logs found in the concession

- Petitioner alleged that after the cancellation of its TLA without being given the opportunity to be
heard, its logging area was divided in half and was re-awarded to Twin Peaks Development Realty
Corp under a new TLA, and to Filipinas Loggers, Inc. without the benefit of a formal award or license.
Both logging concessionaries were allegedly controlled or owned by relatives or cronies of then
President Marcos.
- MNR denied petitioner's request for reconsideration, ruling that TLA is not a contract within the
due process clause of the Constitution, but only a privilege which be withdrawn whenever public
interest or welfare so demands.
- Office of the President denied the petition on the ground that the appeal was prematurely filed,
the matter not having been terminated in the MNR.

ISSUE:
Whether the Timber Licensing Agreement is a contract.

RULING:
No. Timber licenses, permits and license agreements are the principal instruments by which the
State regulates the utilization and disposition of forest resources to the end that public welfare is
promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State
to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular
concession area and the forest products therein. They may be validly amended, modified, replaced
or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed
contracts within the purview of the due process of law clause.
Free Access to Courts and Quasi-Judicial Bodies and Adequate Legal Assistance

RE: Query of Mr. Roger C. Prioreschi Re Exemption from Legal and Filing Fees
of the Good Shepherd Foundation, Inc.

FACTS:

On May 22, 2009 Mr. Roger C. Prioreschi, administrator of the Good Shepherd Foundation, Inc.,
wrote to the Chief Justice asking to exempt the foundation in paying legal fees in connection with
filing case in Court, same privilege given to indigent litigants. He argued that they should be given
the privilege of non-payment as they are working for poor and underprivileged people.

The Court denied the request.

ISSUE:

Whether or not the exemption from Legal and Filing Fees may be extended to juridical persons.

RULING:

No. The privilege of exemption from paying legal and filing fees are only granted to natural persons.

The basis for the exemption from legal and filing fees is the free access clause, embodied in Sec. 11,
Art. III of the 1987 Constitution, thus:

In implementation of the right of free access under the Constitution, the Supreme Court
promulgated rules, specifically, Sec. 21, Rule 3, Rules of Court,2 and Sec. 19, Rule 141, Rules of
Court,3 which respectively state thus:

Sec. 21. Indigent party. — A party may be authorized to litigate his action, claim or defense as an
indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one who
has no money or property sufficient and available for food, shelter and basic necessities for himself
and his family.

Sec. 19. Indigent litigants exempt from payment of legal fees.– Indigent litigants (a) whose gross
income and that of their immediate family do not exceed an amount double the monthly minimum
wage of an employee and (b) who do not own real property with a fair market value as stated in the
current tax declaration of more than three hundred thousand (P300,000.00) pesos shall be exempt
from payment of legal fees.

The clear intent and precise language of the aforequoted provisions of the Rules of Court indicate
that only a natural party litigant may be regarded as an indigent litigant. The Good Shepherd
Foundation, Inc., being a corporation invested by the State with a juridical personality separate and
distinct from that of its members,4 is a juridical person. Among others, it has the power to acquire
and possess property of all kinds as well as incur obligations and bring civil or criminal actions, in
conformity with the laws and regulations of their organization.5 As a juridical person, therefore, it
cannot be accorded the exemption from legal and filing fees granted to indigent litigants.