Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 183591             October 14, 2008

THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS SACDALAN and/or VICE-
GOVERNOR EMMANUEL PIÑOL, for and in his own behalf, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP),
represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK
RYAN SULLIVAN and/or GEN. HERMOGENES ESPERON, JR., the latter in his capacity as the present and
duly-appointed Presidential Adviser on the Peace Process (OPAPP) or the so-called Office of the
Presidential Adviser on the Peace Process, respondents.

x--------------------------------------------x

G.R. No. 183752             October 14, 2008

CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L. LOBREGAT, City Mayor of

Zamboanga, and in his personal capacity as resident of the City of Zamboanga, Rep. MA. ISABELLE G.
CLIMACO, District 1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of Zamboanga, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL (GRP), as
represented by RODOLFO C. GARCIA, LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK RYAN SULLIVAN
and HERMOGENES ESPERON, in his capacity as the Presidential Adviser on Peace Process, respondents.

x--------------------------------------------x

G.R. No. 183893             October 14, 2008

THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE LLUCH CRUZ, petitioner,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP),
represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK
RYAN SULLIVAN; GEN. HERMOGENES ESPERON, JR., in his capacity as the present and duly appointed
Presidential Adviser on the Peace Process; and/or SEC. EDUARDO ERMITA, in his capacity as Executive
Secretary. respondents.

x--------------------------------------------x

G.R. No. 183951             October 14, 2008

THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as represented by HON. ROLANDO E.

YEBES, in his capacity as Provincial Governor, HON. FRANCIS H. OLVIS, in his capacity as Vice-Governor
and Presiding Officer of the Sangguniang Panlalawigan, HON. CECILIA JALOSJOS CARREON,
Congresswoman, 1st Congressional District, HON. CESAR G. JALOSJOS, Congressman, 3rd Congressional
District, and Members of the Sangguniang Panlalawigan of the Province of Zamboanga del Norte,
namely, HON. SETH FREDERICK P. JALOSJOS, HON. FERNANDO R. CABIGON, JR., HON. ULDARICO M.
MEJORADA II, HON. EDIONAR M. ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON.
FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON. NORBIDEIRI B. EDDING, HON. ANECITO
S. DARUNDAY, HON. ANGELICA J. CARREON and HON. LUZVIMINDA E. TORRINO, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL [GRP], as
represented by HON. RODOLFO C. GARCIA and HON. HERMOGENES ESPERON, in his capacity as the
Presidential Adviser of Peace Process, respondents.

x--------------------------------------------x

G.R. No. 183962             October 14, 2008

ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL III, petitioners,

vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL, represented by
its Chairman RODOLFO C. GARCIA, and the MORO ISLAMIC LIBERATION FRONT PEACE NEGOTIATING
PANEL, represented by its Chairman MOHAGHER IQBAL, respondents.

x--------------------------------------------x

FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-in-intervention.

x--------------------------------------------x

SEN. MANUEL A. ROXAS, petitioners-in-intervention.

x--------------------------------------------x

MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL N. DEANO, petitioners-in-

intervention,

x--------------------------------------------x

THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR CHERRYLYN P. SANTOS-

AKBAR, petitioners-in-intervention.

x--------------------------------------------x

THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T. MANGUDADATU, in his capacity as
Provincial Governor and a resident of the Province of Sultan Kudarat, petitioner-in-intervention.

x-------------------------------------------x

RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous Peoples in Mindanao Not
Belonging to the MILF, petitioner-in-intervention.

x--------------------------------------------x

CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C. ALISUAG and RICHALEX G.
JAGMIS, as citizens and residents of Palawan, petitioners-in-intervention.
x--------------------------------------------x

MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention.

x--------------------------------------------x

MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), respondent-in-intervention.

x--------------------------------------------x

MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT (MMMPD), respondent-in-

intervention.

x--------------------------------------------x

DECISION

CARPIO MORALES, J.:

Subject of these consolidated cases is the extent of the powers of the President in pursuing the peace
process. While the facts surrounding this controversy center on the armed conflict in Mindanao
between the government and the Moro Islamic Liberation Front (MILF), the legal issue involved has a
bearing on all areas in the country where there has been a long-standing armed conflict. Yet again, the
Court is tasked to perform a delicate balancing act. It must uncompromisingly delineate the bounds
within which the President may lawfully exercise her discretion, but it must do so in strict adherence to
the Constitution, lest its ruling unduly restricts the freedom of action vested by that same Constitution in
the Chief Executive precisely to enable her to pursue the peace process effectively.

I. FACTUAL ANTECEDENTS OF THE PETITIONS

On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through the
Chairpersons of their respective peace negotiating panels, were scheduled to sign a Memorandum of
Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of
2001 in Kuala Lumpur, Malaysia.

The MILF is a rebel group which was established in March 1984 when, under the leadership of the late
Salamat Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by Nur
Misuari, on the ground, among others, of what Salamat perceived to be the manipulation of the MNLF
away from an Islamic basis towards Marxist-Maoist orientations.1

The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for upon
motion of petitioners, specifically those who filed their cases before the scheduled signing of the MOA-
AD, this Court issued a Temporary Restraining Order enjoining the GRP from signing the same.

The MOA-AD was preceded by a long process of negotiation and the concluding of several prior
agreements between the two parties beginning in 1996, when the GRP-MILF peace negotiations began.
On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General Cessation of
Hostilities. The following year, they signed the General Framework of Agreement of Intent on August 27,
1998.
The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the same
contained, among others, the commitment of the parties to pursue peace negotiations, protect and
respect human rights, negotiate with sincerity in the resolution and pacific settlement of the conflict,
and refrain from the use of threat or force to attain undue advantage while the peace negotiations on
the substantive agenda are on-going.2

Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF
peace process. Towards the end of 1999 up to early 2000, the MILF attacked a number of municipalities
in Central Mindanao and, in March 2000, it took control of the town hall of Kauswagan, Lanao del
Norte.3 In response, then President Joseph Estrada declared and carried out an "all-out-war" against the
MILF.

When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF was
suspended and the government sought a resumption of the peace talks. The MILF, according to a
leading MILF member, initially responded with deep reservation, but when President Arroyo asked the
Government of Malaysia through Prime Minister Mahathir Mohammad to help convince the MILF to
return to the negotiating table, the MILF convened its Central Committee to seriously discuss the matter
and, eventually, decided to meet with the GRP.4

The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian
government, the parties signing on the same date the Agreement on the General Framework for the
Resumption of Peace Talks Between the GRP and the MILF. The MILF thereafter suspended all its
military actions.5

Formal peace talks between the parties were held in Tripoli, Libya from June 20-22, 2001, the outcome
of which was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001) containing the basic
principles and agenda on the following aspects of the
negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect. With regard to the
Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be
discussed further by the Parties in their next meeting."

A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended with
the signing of the Implementing Guidelines on the Security Aspect of the Tripoli Agreement 2001 leading
to a ceasefire status between the parties. This was followed by the Implementing Guidelines on the
Humanitarian Rehabilitation and Development Aspects of the Tripoli Agreement 2001, which was signed
on May 7, 2002 at Putrajaya, Malaysia. Nonetheless, there were many incidence of violence between
government forces and the MILF from 2002 to 2003.

Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was replaced by
Al Haj Murad, who was then the chief peace negotiator of the MILF. Murad's position as chief peace
negotiator was taken over by Mohagher Iqbal.6

In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading to
the crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last August
5, 2008.

II. STATEMENT OF THE PROCEEDINGS

Before the Court is what is perhaps the most contentious "consensus" ever embodied in an instrument -
the MOA-AD which is assailed principally by the present petitions bearing docket numbers 183591,
183752, 183893, 183951 and 183962.

Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain7 and the
Presidential Adviser on the Peace Process (PAPP) Hermogenes Esperon, Jr.

On July 23, 2008, the Province of North Cotabato8 and Vice-Governor Emmanuel Piñol filed a petition,
docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance of Writ of
Preliminary Injunction and Temporary Restraining Order.9 Invoking the right to information on matters
of public concern, petitioners seek to compel respondents to disclose and furnish them the complete
and official copies of the MOA-AD including its attachments, and to prohibit the slated signing of the
MOA-AD, pending the disclosure of the contents of the MOA-AD and the holding of a public consultation
thereon. Supplementarily, petitioners pray that the MOA-AD be declared unconstitutional.10

This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus and
Prohibition11 filed by the City of Zamboanga,12 Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco and
Rep. Erico Basilio Fabian who likewise pray for similar injunctive reliefs. Petitioners herein moreover
pray that the City of Zamboanga be excluded from the Bangsamoro Homeland and/or Bangsamoro
Juridical Entity and, in the alternative, that the MOA-AD be declared null and void.

By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and

directing public respondents and their agents to cease and desist from formally signing the MOA-
AD.13 The Court also required the Solicitor General to submit to the Court and petitioners the official
copy of the final draft of the MOA-AD,14 to which she complied.15

Meanwhile, the City of Iligan16 filed a petition for Injunction and/or Declaratory Relief, docketed as G.R.
No. 183893, praying that respondents be enjoined from signing the MOA-AD or, if the same had already
been signed, from implementing the same, and that the MOA-AD be declared unconstitutional.
Petitioners herein additionally implead Executive Secretary Eduardo Ermita as respondent.

The Province of Zamboanga del Norte,17 Governor Rolando Yebes, Vice-Governor Francis Olvis, Rep.
Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members18 of the Sangguniang Panlalawigan of
Zamboanga del Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and
Prohibition,19 docketed as G.R. No. 183951. They pray, inter alia, that the MOA-AD be declared null and
void and without operative effect, and that respondents be enjoined from executing the MOA-AD.

On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for
Prohibition,20 docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently
enjoining respondents from formally signing and executing the MOA-AD and or any other agreement
derived therefrom or similar thereto, and nullifying the MOA-AD for being unconstitutional and illegal.
Petitioners herein additionally implead as respondent the MILF Peace Negotiating Panel represented by
its Chairman Mohagher Iqbal.

Various parties moved to intervene and were granted leave of court to file their petitions-/comments-in-
intervention. Petitioners-in-Intervention include Senator Manuel A. Roxas, former Senate President
Franklin Drilon and Atty. Adel Tamano, the City of Isabela21 and Mayor Cherrylyn Santos-Akbar, the
Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the Municipality of Linamon in Lanao del
Norte,23 Ruy Elias Lopez of Davao City and of the Bagobo tribe, Sangguniang Panlungsod member
Marino Ridao and businessman Kisin Buxani, both of Cotabato City; and lawyers Carlo Gomez, Gerardo
Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan City. The Muslim Legal Assistance
Foundation, Inc. (Muslaf) and the Muslim Multi-Sectoral Movement for Peace and Development
(MMMPD) filed their respective Comments-in-Intervention.

By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed
Comments on the petitions, while some of petitioners submitted their respective Replies.

Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive Department
shall thoroughly review the MOA-AD and pursue further negotiations to address the issues hurled
against it, and thus moved to dismiss the cases. In the succeeding exchange of pleadings, respondents'
motion was met with vigorous opposition from petitioners.

The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following
principal issues:

1. Whether the petitions have become moot and academic

(i) insofar as the mandamus aspect is concerned, in view of the disclosure of official copies of the final
draft of the Memorandum of Agreement (MOA); and

(ii) insofar as the prohibition aspect involving the Local Government Units is concerned, if it is

considered that consultation has become fait accompli with the finalization of the draft;

2. Whether the constitutionality and the legality of the MOA is ripe for adjudication;

3. Whether respondent Government of the Republic of the Philippines Peace Panel committed grave
abuse of discretion amounting to lack or excess of jurisdiction when it negotiated and initiated the MOA
vis-à-vis ISSUES Nos. 4 and 5;

4. Whether there is a violation of the people's right to information on matters of public concern (1987
Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its transactions involving public
interest (1987 Constitution, Article II, Sec. 28) including public consultation under Republic Act No. 7160
(LOCAL GOVERNMENT CODE OF 1991)[;]

If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil Procedure is an

appropriate remedy;

5. Whether by signing the MOA, the Government of the Republic of the Philippines would be BINDING
itself

a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate state, or a juridical,
territorial or political subdivision not recognized by law;

b) to revise or amend the Constitution and existing laws to conform to the MOA;

c) to concede to or recognize the claim of the Moro Islamic Liberation Front for ancestral domain in
violation of Republic Act No. 8371 (THE INDIGENOUS PEOPLES RIGHTS ACT OF 1997), particularly Section
3(g) & Chapter VII (DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]
If in the affirmative, whether the Executive Branch has the authority to so bind the Government of the
Republic of the Philippines;

6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga, Iligan and
Isabela, and the Municipality of Linamon, Lanao del Norte in/from the areas covered by the projected
Bangsamoro Homeland is a justiciable question; and

7. Whether desistance from signing the MOA derogates any prior valid commitments of the Government
of the Republic of the Philippines.24

The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties
submitted their memoranda on time.

III. OVERVIEW OF THE MOA-AD

As a necessary backdrop to the consideration of the objections raised in the subject five petitions and six
petitions-in-intervention against the MOA-AD, as well as the two comments-in-intervention in favor of
the MOA-AD, the Court takes an overview of the MOA.

The MOA-AD identifies the Parties to it as the GRP and the MILF.

Under the heading "Terms of Reference" (TOR), the MOA-AD includes not only four earlier agreements
between the GRP and MILF, but also two agreements between the GRP and the MNLF: the 1976 Tripoli
Agreement, and the Final Peace Agreement on the Implementation of the 1976 Tripoli Agreement,
signed on September 2, 1996 during the administration of President Fidel Ramos.

The MOA-AD also identifies as TOR two local statutes - the organic act for the Autonomous Region in
Muslim Mindanao (ARMM)25 and the Indigenous Peoples Rights Act (IPRA),26 and several international
law instruments - the ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in Independent
Countries in relation to the UN Declaration on the Rights of the Indigenous Peoples, and the UN Charter,
among others.

The MOA-AD includes as a final TOR the generic category of "compact rights entrenchment emanating
from the regime of dar-ul-mua'hada (or territory under compact) and dar-ul-sulh (or
territory under peace agreement) that partakes the nature of a treaty device."

During the height of the Muslim Empire, early Muslim jurists tended to see the world through a simple
dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode of War). The first
referred to those lands where Islamic laws held sway, while the second denoted those lands where
Muslims were persecuted or where Muslim laws were outlawed or ineffective.27 This way of viewing
the world, however, became more complex through the centuries as the Islamic world became part of
the international community of nations.

As Muslim States entered into treaties with their neighbors, even with distant States and inter-
governmental organizations, the classical division of the world into dar-ul-Islam and dar-ul-
harb eventually lost its meaning. New terms were drawn up to describe novel ways of perceiving non-
Muslim territories. For instance, areas like dar-ul-mua'hada (land of compact) and dar-ul-sulh (land
of treaty) referred to countries which, though under a secular regime, maintained peaceful and
cooperative relations with Muslim States, having been bound to each other by treaty or agreement. Dar-
ul-aman (land of order), on the other hand, referred to countries which, though not bound by treaty
with Muslim States, maintained freedom of religion for Muslims.28

It thus appears that the "compact rights entrenchment" emanating from the regime of dar-ul-
mua'hada and dar-ul-sulh simply refers to all other agreements between the MILF and the Philippine
government - the Philippines being the land of compact and peace agreement - that partake of the
nature of a treaty device, "treaty" being broadly defined as "any solemn agreement in writing that sets
out understandings, obligations, and benefits for both parties which provides for a framework that
elaborates the principles declared in the [MOA-AD]."29

The MOA-AD states that the Parties "HAVE AGREED AND ACKNOWLEDGED AS FOLLOWS," and starts
with its main body.

The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles, Territory,
Resources, and Governance.

A. CONCEPTS AND PRINCIPLES

This strand begins with the statement that it is "the birthright of all Moros and all Indigenous peoples of
Mindanao to identify themselves and be accepted as ‘Bangsamoros.'" It defines "Bangsamoro people" as
the natives or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu
archipelago at the time of conquest or colonization, and their descendants whether mixed or of full
blood, including their spouses.30

Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD, includes not only "Moros"
as traditionally understood even by Muslims,31 but all indigenous peoples of Mindanao and its adjacent
islands. The MOA-AD adds that the freedom of choice of indigenous peoples shall be respected. What
this freedom of choice consists in has not been specifically defined.

The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership of which is vested
exclusively in the Bangsamoro people by virtue of their prior rights of occupation.32 Both parties to the
MOA-AD acknowledge that ancestral domain does not form part of the public domain.33

The Bangsamoro people are acknowledged as having the right to self-governance, which right is said to
be rooted on ancestral territoriality exercised originally under the suzerain authority of their sultanates
and the Pat a Pangampong ku Ranaw. The sultanates were described as states or "karajaan/kadatuan"
resembling a body politic endowed with all the elements of a nation-state in the modern sense.34

The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past suzerain
authority of the sultanates. As gathered, the territory defined as the Bangsamoro homeland was ruled
by several sultanates and, specifically in the case of the Maranao, by the Pat a Pangampong ku Ranaw, a
confederation of independent principalities (pangampong) each ruled by datus and sultans, none of
whom was supreme over the others.35

The MOA-AD goes on to describe the Bangsamoro people as "the ‘First Nation' with defined territory
and with a system of government having entered into treaties of amity and commerce with foreign
nations."
The term "First Nation" is of Canadian origin referring to the indigenous peoples of that territory,
particularly those known as Indians. In Canada, each of these indigenous peoples is equally entitled to
be called "First Nation," hence, all of them are usually described collectively by the plural "First
Nations."36 To that extent, the MOA-AD, by identifying the Bangsamoro people as "the First Nation" -
suggesting its exclusive entitlement to that designation - departs from the Canadian usage of the term.

The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity" (BJE) to which it
grants the authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the
Bangsamoro.37

B. TERRITORY

The territory of the Bangsamoro homeland is described as the land mass as well as the maritime,
terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space above it,
embracing the Mindanao-Sulu-Palawan geographic region.38

More specifically, the core of the BJE is defined as the present geographic area of the ARMM - thus
constituting the following areas: Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City.
Significantly, this core also includes certain municipalities of Lanao del Norte that voted for inclusion in
the ARMM in the 2001 plebiscite.39

Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which are
grouped into two categories, Category A and Category B. Each of these areas is to be subjected to a
plebiscite to be held on different dates, years apart from each other. Thus, Category A areas are to be
subjected to a plebiscite not later than twelve (12) months following the signing of the MOA-
AD.40 Category B areas, also called "Special Intervention Areas," on the other hand, are to be subjected
to a plebiscite twenty-five (25) years from the signing of a separate agreement - the Comprehensive
Compact.41

The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources within
its "internal waters," defined as extending fifteen (15) kilometers from the coastline of the BJE
area;42 that the BJE shall also have "territorial waters," which shall stretch beyond the BJE internal
waters up to the baselines of the Republic of the Philippines (RP) south east and south west of mainland
Mindanao; and that within these territorial waters, the BJE and the "Central Government" (used
interchangeably with RP) shall exercise joint jurisdiction, authority and management over all natural
resources.43 Notably, the jurisdiction over the internal waters is not similarly described as "joint."

The MOA-AD further provides for the sharing of minerals on the territorial waters between the Central
Government and the BJE, in favor of the latter, through production sharing and economic cooperation
agreement.44 The activities which the Parties are allowed to conduct on the territorial waters are
enumerated, among which are the exploration and utilization of natural resources, regulation of
shipping and fishing activities, and the enforcement of police and safety measures.45 There is no similar
provision on the sharing of minerals and allowed activities with respect to the internal waters of the BJE.

C. RESOURCES

The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations with
foreign countries and shall have the option to establish trade missions in those countries. Such
relationships and understandings, however, are not to include aggression against the GRP. The BJE may
also enter into environmental cooperation agreements.46

The external defense of the BJE is to remain the duty and obligation of the Central Government. The
Central Government is also bound to "take necessary steps to ensure the BJE's participation in
international meetings and events" like those of the ASEAN and the specialized agencies of the UN. The
BJE is to be entitled to participate in Philippine official missions and delegations for the negotiation of
border agreements or protocols for environmental protection and equitable sharing of incomes and
revenues involving the bodies of water adjacent to or between the islands forming part of the ancestral
domain.47

With regard to the right of exploring for, producing, and obtaining all potential sources of energy,
petroleum, fossil fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested in
the BJE "as the party having control within its territorial jurisdiction." This right carries the proviso that,
"in times of national emergency, when public interest so requires," the Central Government may, for a
fixed period and under reasonable terms as may be agreed upon by both Parties, assume or direct the
operation of such resources.48

The sharing between the Central Government and the BJE of total production pertaining to natural
resources is to be 75:25 in favor of the BJE.49

The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust
dispossession of their territorial and proprietary rights, customary land tenures, or their marginalization
shall be acknowledged. Whenever restoration is no longer possible, reparation is to be in such form as
mutually determined by the Parties.50

The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements, mining
concessions, Mineral Production and Sharing Agreements (MPSA), Industrial Forest Management
Agreements (IFMA), and other land tenure instruments granted by the Philippine Government, including
those issued by the present ARMM.51

D. GOVERNANCE

The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the
implementation of the Comprehensive Compact. This compact is to embody the "details for the
effective enforcement" and "the mechanisms and modalities for the actual implementation" of the
MOA-AD. The MOA-AD explicitly provides that the participation of the third party shall not in any way
affect the status of the relationship between the Central Government and the BJE.52

The "associative" relationship

between the Central Government
and the BJE

The MOA-AD describes the relationship of the Central Government and the BJE as "associative,"
characterized by shared authority and responsibility. And it states that the structure of governance is to
be based on executive, legislative, judicial, and administrative institutions with defined powers and
functions in the Comprehensive Compact.
The MOA-AD provides that its provisions requiring "amendments to the existing legal framework" shall
take effect upon signing of the Comprehensive Compact and upon effecting the aforesaid amendments,
with due regard to the non-derogation of prior agreements and within the stipulated timeframe to be
contained in the Comprehensive Compact. As will be discussed later, much of the present controversy
hangs on the legality of this provision.

The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil service,
electoral, financial and banking, education, legislation, legal, economic, police and internal security
force, judicial system and correctional institutions, the details of which shall be discussed in the
negotiation of the comprehensive compact.

As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and
Mohagher Iqbal, Chairpersons of the Peace Negotiating Panels of the GRP and the MILF,
respectively. Notably, the penultimate paragraph of the MOA-AD identifies the signatories as "the
representatives of the Parties," meaning the GRP and MILF themselves, and not merely of the
negotiating panels.53 In addition, the signature page of the MOA-AD states that it is "WITNESSED BY"
Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, "ENDORSED BY"
Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary General
and Special Envoy for Peace Process in Southern Philippines, and SIGNED "IN THE PRESENCE OF" Dr.
Albert G. Romulo, Secretary of Foreign Affairs of RP and Dato' Seri Utama Dr. Rais Bin Yatim, Minister of
Foreign Affairs, Malaysia, all of whom were scheduled to sign the Agreement last August 5, 2008.

Annexed to the MOA-AD are two documents containing the respective lists cum maps of the provinces,
municipalities, and barangays under Categories A and B earlier mentioned in the discussion on the
strand on TERRITORY.

IV. PROCEDURAL ISSUES

A. RIPENESS

The power of judicial review is limited to actual cases or controversies.54 Courts decline to issue
advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions.55 The
limitation of the power of judicial review to actual cases and controversies defines the role assigned to
the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas
committed to the other branches of government.56

An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute.
There must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing
law and jurisprudence.57 The Court can decide the constitutionality of an act or treaty only when a
proper case between opposing parties is submitted for judicial determination.58

Related to the requirement of an actual case or controversy is the requirement of ripeness. A question is
ripe for adjudication when the act being challenged has had a direct adverse effect on the individual
challenging it.59 For a case to be considered ripe for adjudication, it is a prerequisite that something had
then been accomplished or performed by either branch before a court may come into the
picture,60 and the petitioner must allege the existence of an immediate or threatened injury to itself as
a result of the challenged action.61 He must show that he has sustained or is immediately in danger of
sustaining some direct injury as a result of the act complained of.62

The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in the
present petitions, reasoning that

The unsigned MOA-AD is simply a list of consensus points subject to further negotiations and legislative
enactments as well as constitutional processes aimed at attaining a final peaceful agreement. Simply
put, the MOA-AD remains to be a proposal that does not automatically create legally demandable rights
and obligations until the list of operative acts required have been duly complied with. x x x

xxxx

In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to pass upon
issues based on hypothetical or feigned constitutional problems or interests with no concrete bases.
Considering the preliminary character of the MOA-AD, there are no concrete acts that could possibly
violate petitioners' and intervenors' rights since the acts complained of are mere contemplated
steps toward the formulation of a final peace agreement. Plainly, petitioners and intervenors' perceived
injury, if at all, is merely imaginary and illusory apart from being unfounded and based on mere
conjectures. (Underscoring supplied)

The Solicitor General cites63 the following provisions of the MOA-AD:

TERRITORY

xxxx

2. Toward this end, the Parties enter into the following stipulations:

xxxx

d. Without derogating from the requirements of prior agreements, the Government stipulates to
conduct and deliver, using all possible legal measures, within twelve (12) months following the signing of
the MOA-AD, a plebiscite covering the areas as enumerated in the list and depicted in the map as
Category A attached herein (the "Annex"). The Annex constitutes an integral part of this framework
agreement. Toward this end, the Parties shall endeavor to complete the negotiations and resolve all
outstanding issues on the Comprehensive Compact within fifteen (15) months from the signing of the
MOA-AD.

xxxx

GOVERNANCE

xxxx

7. The Parties agree that mechanisms and modalities for the actual implementation of this MOA-AD shall
be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively.

Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into
force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the
legal framework with due regard to non-derogation of prior agreements and within the stipulated
timeframe to be contained in the Comprehensive Compact.64 (Underscoring supplied)

The Solicitor General's arguments fail to persuade.

Concrete acts under the MOA-AD are not necessary to render the present controversy ripe. In Pimentel,
Jr. v. Aguirre,65 this Court held:

x x x [B]y the mere enactment of the questioned law or the approval of the challenged action, the
dispute is said to have ripened into a judicial controversy even without any other overt act. Indeed, even
a singular violation of the Constitution and/or the law is enough to awaken judicial duty.

xxxx

By the same token, when an act of the President, who in our constitutional scheme is a coequal of
Congress, is seriously alleged to have infringed the Constitution and the laws x x x settling the dispute
becomes the duty and the responsibility of the courts.66

In Santa Fe Independent School District v. Doe,67 the United States Supreme Court held that the
challenge to the constitutionality of the school's policy allowing student-led prayers and speeches
before games was ripe for adjudication, even if no public prayer had yet been led under the policy,
because the policy was being challenged as unconstitutional on its face.68

That the law or act in question is not yet effective does not negate ripeness. For example, in New York v.
United States,69 decided in 1992, the United States Supreme Court held that the action by the State of
New York challenging the provisions of the Low-Level Radioactive Waste Policy Act was ripe for
adjudication even if the questioned provision was not to take effect until January 1, 1996, because the
parties agreed that New York had to take immediate action to avoid the provision's consequences.70

The present petitions pray for Certiorari,71 Prohibition, and Mandamus. Certiorari and Prohibition are
remedies granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is
proceeding, in the case of prohibition, without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction.72 Mandamus is a remedy granted by law 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, or unlawfully excludes
another from the use or enjoyment of a right or office to which such other is entitled.73 Certiorari,
Mandamus and Prohibition are appropriate remedies to raise constitutional issues and to review and/or
prohibit/nullify, when proper, acts of legislative and executive officials.74

The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued on
February 28, 2001.75 The said executive order requires that "[t]he government's policy framework for
peace, including the systematic approach and the administrative structure for carrying out the
comprehensive peace process x x x be governed by this Executive Order."76

The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of the
MOA-AD without consulting the local government units or communities affected, nor informing them of
the proceedings. As will be discussed in greater detail later, such omission, by itself, constitutes a
departure by respondents from their mandate under E.O. No. 3.
Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The MOA-
AD provides that "any provisions of the MOA-AD requiring amendments to the existing legal framework
shall come into force upon the signing of a Comprehensive Compact and upon effecting the necessary
changes to the legal framework," implying an amendment of the Constitution to accommodate the
MOA-AD. This stipulation, in effect, guaranteed to the MILF the amendment of the Constitution. Such
act constitutes another violation of its authority. Again, these points will be discussed in more detail
later.

As the petitions allege acts or omissions on the part of respondent that exceed their authority, by
violating their duties under E.O. No. 3 and the provisions of the Constitution and statutes, the petitions
make a prima facie case for Certiorari, Prohibition, and Mandamus, and an actual case or
controversy ripe for adjudication exists. When an act of a branch of government is seriously alleged to
have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to
settle the dispute.77

B. LOCUS STANDI

For a party to have locus standi, one must allege "such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult constitutional questions."78

Because constitutional cases are often public actions in which the relief sought is likely to affect other
persons, a preliminary question frequently arises as to this interest in the constitutional question
raised.79

When suing as a citizen, the person complaining must allege that he has been or is about to be denied
some right or privilege to which he is lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute or act complained of.80 When the issue concerns a public
right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the laws.81

For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally disbursed
or deflected to an illegal purpose, or that there is a wastage of public funds through the enforcement of
an invalid or unconstitutional law.82 The Court retains discretion whether or not to allow a taxpayer's
suit.83

In the case of a legislator or member of Congress, an act of the Executive that injures the institution of
Congress causes a derivative but nonetheless substantial injury that can be questioned by legislators. A
member of the House of Representatives has standing to maintain inviolate the prerogatives, powers
and privileges vested by the Constitution in his office.84

An organization may be granted standing to assert the rights of its members,85 but the mere invocation
by the Integrated Bar of the Philippines or any member of the legal profession of the duty to preserve
the rule of law does not suffice to clothe it with standing.86

As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an interest of
its own, and of the other LGUs.87
Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the
requirements of the law authorizing intervention,88 such as a legal interest in the matter in litigation, or
in the success of either of the parties.

In any case, the Court has discretion to relax the procedural technicality on locus standi, given the liberal
attitude it has exercised, highlighted in the case of David v. Macapagal-Arroyo,89 where technicalities of
procedure were brushed aside, the constitutional issues raised being of paramount public interest or of
transcendental importance deserving the attention of the Court in view of their seriousness, novelty and
weight as precedents.90 The Court's forbearing stance on locus standi on issues involving constitutional
issues has for its purpose the protection of fundamental rights.

In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether the
other branches of government have kept themselves within the limits of the Constitution and the laws
and have not abused the discretion given them, has brushed aside technical rules of procedure.91

In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of Zamboanga

del Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of Zamboanga (G.R. No. 183752)
and petitioners-in-intervention Province of Sultan Kudarat, City of Isabela and Municipality of
Linamon have locus standi in view of the direct and substantial injury that they, as LGUs, would suffer as
their territories, whether in whole or in part, are to be included in the intended domain of the BJE.
These petitioners allege that they did not vote for their inclusion in the ARMM which would be
expanded to form the BJE territory. Petitioners' legal standing is thus beyond doubt.

In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would have no

standing as citizens and taxpayers for their failure to specify that they would be denied some right or
privilege or there would be wastage of public funds. The fact that they are a former Senator, an
incumbent mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no consequence.
Considering their invocation of the transcendental importance of the issues at hand, however, the Court
grants them standing.

Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that

government funds would be expended for the conduct of an illegal and unconstitutional plebiscite to
delineate the BJE territory. On that score alone, they can be given legal standing. Their allegation that
the issues involved in these petitions are of "undeniable transcendental importance" clothes them with
added basis for their personality to intervene in these petitions.

With regard to Senator Manuel Roxas, his standing is premised on his being a member of the Senate and
a citizen to enforce compliance by respondents of the public's constitutional right to be informed of the
MOA-AD, as well as on a genuine legal interest in the matter in litigation, or in the success or failure of
either of the parties. He thus possesses the requisite standing as an intervenor.

With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3rd district of Davao City, a
taxpayer and a member of the Bagobo tribe; Carlo B. Gomez, et al., as members of the IBP Palawan
chapter, citizens and taxpayers; Marino Ridao, as taxpayer, resident and member of the Sangguniang
Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege any proper legal interest
in the present petitions. Just the same, the Court exercises its discretion to relax the procedural
technicality on locus standi given the paramount public interest in the issues at hand.
Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an advocacy
group for justice and the attainment of peace and prosperity in Muslim Mindanao; and Muslim Legal
Assistance Foundation Inc., a non-government organization of Muslim lawyers, allege that they stand to
be benefited or prejudiced, as the case may be, in the resolution of the petitions concerning the MOA-
AD, and prays for the denial of the petitions on the grounds therein stated. Such legal interest suffices to
clothe them with standing.

B. MOOTNESS

Respondents insist that the present petitions have been rendered moot with the satisfaction of all the
reliefs prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that
"[n]o matter what the Supreme Court ultimately decides[,] the government will not sign the MOA."92

In lending credence to this policy decision, the Solicitor General points out that the President had
already disbanded the GRP Peace Panel.93

In David v. Macapagal-Arroyo,94 this Court held that the "moot and academic" principle not being a
magical formula that automatically dissuades courts in resolving a case, it will decide cases, otherwise
moot and academic, if it finds that (a) there is a grave violation of the Constitution;95 (b) the situation is
of exceptional character and paramount public interest is involved;96 (c) the constitutional issue raised
requires formulation of controlling principles to guide the bench, the bar, and the public;97 and (d) the
case is capable of repetition yet evading review.98

Another exclusionary circumstance that may be considered is where there is a voluntary cessation of the
activity complained of by the defendant or doer. Thus, once a suit is filed and the doer voluntarily ceases
the challenged conduct, it does not automatically deprive the tribunal of power to hear and determine
the case and does not render the case moot especially when the plaintiff seeks damages or prays for
injunctive relief against the possible recurrence of the violation.99

The present petitions fall squarely into these exceptions to thus thrust them into the domain of judicial
review. The grounds cited above in David are just as applicable in the present cases as they were, not
only in David, but also in Province of Batangas v. Romulo100 and Manalo v. Calderon101 where the
Court similarly decided them on the merits, supervening events that would ordinarily have rendered the
same moot notwithstanding.

Petitions not mooted

Contrary then to the asseverations of respondents, the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel did not moot the present petitions. It bears emphasis that the signing
of the MOA-AD did not push through due to the Court's issuance of a Temporary Restraining Order.

Contrary too to respondents' position, the MOA-AD cannot be considered a mere "list of consensus
points," especially given its nomenclature, the need to have it signed or initialed by all the parties
concerned on August 5, 2008, and the far-reaching Constitutional implications of these "consensus
points," foremost of which is the creation of the BJE.

In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents to
amend and effect necessary changes to the existing legal framework for certain provisions of the MOA-
AD to take effect. Consequently, the present petitions are not confined to the terms and provisions of
the MOA-AD, but to other on-going and future negotiations and agreements necessary for its
realization. The petitions have not, therefore, been rendered moot and academic simply by the public
disclosure of the MOA-AD,102 the manifestation that it will not be signed as well as the disbanding of
the GRP Panel not withstanding.

Petitions are imbued with paramount public interest

There is no gainsaying that the petitions are imbued with paramount public interest, involving a
significant part of the country's territory and the wide-ranging political modifications of affected LGUs.
The assertion that the MOA-AD is subject to further legal enactments including possible Constitutional
amendments more than ever provides impetus for the Court to formulate controlling principles to guide
the bench, the bar, the public and, in this case, the government and its negotiating entity.

Respondents cite Suplico v. NEDA, et al.103 where the Court did not "pontificat[e] on issues which no
longer legitimately constitute an actual case or controversy [as this] will do more harm than good to the
nation as a whole."

The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed and
eventually cancelled was a stand-alone government procurement contract for a national broadband
network involving a one-time contractual relation between two parties-the government and a private
foreign corporation. As the issues therein involved specific government procurement policies and
standard principles on contracts, the majority opinion in Suplico found nothing exceptional therein, the
factual circumstances being peculiar only to the transactions and parties involved in the controversy.

The MOA-AD is part of a series of agreements

In the present controversy, the MOA-AD is a significant part of a series of agreements necessary to carry

out the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain Aspect of said
Tripoli Agreement is the third such component to be undertaken following the implementation of
the Security Aspect in August 2001 and the Humanitarian, Rehabilitation and Development Aspect in
May 2002.

Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor
General, has stated that "no matter what the Supreme Court ultimately decides[,] the government will
not sign the MOA[-AD]," mootness will not set in in light of the terms of the Tripoli Agreement 2001.

Need to formulate principles-guidelines

Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the
Ancestral Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could contain
similar or significantly drastic provisions. While the Court notes the word of the Executive Secretary that
the government "is committed to securing an agreement that is both constitutional and equitable
because that is the only way that long-lasting peace can be assured," it is minded to render a decision on
the merits in the present petitions to formulate controlling principles to guide the bench, the bar, the
public and, most especially, the government in negotiating with the MILF regarding Ancestral Domain.

Respondents invite the Court's attention to the separate opinion of then Chief Justice Artemio
Panganiban in Sanlakas v. Reyes104 in which he stated that the doctrine of "capable of repetition yet
evading review" can override mootness, "provided the party raising it in a proper case has been and/or
continue to be prejudiced or damaged as a direct result of their issuance." They contend that the Court
must have jurisdiction over the subject matter for the doctrine to be invoked.

The present petitions all contain prayers for Prohibition over which this Court exercises original
jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory
Relief, the Court will treat it as one for Prohibition as it has far reaching implications and raises questions
that need to be resolved.105 At all events, the Court has jurisdiction over most if not the rest of the
petitions.

Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine
immediately referred to as what it had done in a number of landmark cases.106 There is
a reasonable expectation that petitioners, particularly the Provinces of North Cotabato, Zamboanga del
Norte and Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon,
will again be subjected to the same problem in the future as respondents' actions are capable of
repetition, in another or any form.

It is with respect to the prayers for Mandamus that the petitions have become moot, respondents
having, by Compliance of August 7, 2008, provided this Court and petitioners with official copies of the
final draft of the MOA-AD and its annexes. Too, intervenors have been furnished, or have procured for
themselves, copies of the MOA-AD.

V. SUBSTANTIVE ISSUES

As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE issues to
be resolved, one relating to the manner in which the MOA-AD was negotiated and finalized, the other
relating to its provisions, viz:

1. Did respondents violate constitutional and statutory provisions on public consultation and the right to
information when they negotiated and later initialed the MOA-AD?

2. Do the contents of the MOA-AD violate the Constitution and the laws?

ON THE FIRST SUBSTANTIVE ISSUE

Petitioners invoke their constitutional right to information on matters of public concern, as provided in

Section 7, Article III on the Bill of Rights:

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 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.107

As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the statutory right to examine and
inspect public records, a right which was eventually accorded constitutional status.

The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987
Constitution, has been recognized as a self-executory constitutional right.109

In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that access to public records is
predicated on the right of the people to acquire information on matters of public concern since,
undoubtedly, in a democracy, the pubic has a legitimate interest in matters of social and political
significance.

x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free
exchange of information in a democracy. There can be no realistic perception by the public of the
nation's problems, nor a meaningful democratic decision-making if they are denied access to
information of general interest. Information is needed to enable the members of society to cope with
the exigencies of the times. As has been aptly observed: "Maintaining the flow of such information
depends on protection for both its acquisition and its dissemination since, if either process is
interrupted, the flow inevitably ceases." x x x111

In the same way that free discussion enables members of society to cope with the exigencies of their
time, access to information of general interest aids the people in democratic decision-making by giving
them a better perspective of the vital issues confronting the nation112 so that they may be able to
criticize and participate in the affairs of the government in a responsible, reasonable and effective
manner. It is by ensuring an unfettered and uninhibited exchange of ideas among a well-informed public
that a government remains responsive to the changes desired by the people.113

The MOA-AD is a matter of public concern

That the subject of the information sought in the present cases is a matter of public concern114 faces no
serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.115 In
previous cases, the Court found that the regularity of real estate transactions entered in the Register of
Deeds,116 the need for adequate notice to the public of the various laws,117 the civil service eligibility
of a public employee,118 the proper management of GSIS funds allegedly used to grant loans to public
officials,119 the recovery of the Marcoses' alleged ill-gotten wealth,120 and the identity of party-list
nominees,121 among others, are matters of public concern. Undoubtedly, the MOA-AD subject of the
present cases is of public concern, involving as it does the sovereignty and territorial integrity of the
State, which directly affects the lives of the public at large.

Matters of public concern covered by the right to information include steps and negotiations leading to
the consummation of the contract. In not distinguishing as to the executory nature or commercial
character of agreements, the Court has categorically ruled:

x x x [T]he 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.

Requiring a consummated contract will keep the public in the dark until the contract, which may be
grossly disadvantageous to the government or even illegal, becomes fait accompli. This negates the
State policy of full transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the citizenry from participating in
the public discussion of any proposed contract, effectively truncating a basic right enshrined in the Bill of
Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the State of its
avowed "policy of full disclosure of all its transactions involving public interest."122 (Emphasis and italics
in the original)
Intended as a "splendid symmetry"123 to the right to information under the Bill of Rights is the policy of
public disclosure under Section 28, Article II of the Constitution reading:

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.124

The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of

access to information on matters of public concern found in the Bill of Rights. The right to information
guarantees the right of the people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands.125

The policy of public disclosure establishes a concrete ethical principle for the conduct of public affairs in
a genuinely open democracy, with the people's right to know as the centerpiece. It is a mandate of the
State to be accountable by following such policy.126 These provisions are vital to the exercise of the
freedom of expression and essential to hold public officials at all times accountable to the people.127

Whether Section 28 is self-executory, the records of the deliberations of the Constitutional Commission
so disclose:

MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will not be in force
and effect until after Congress shall have provided it.

MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the
implementing law will have to be enacted by Congress, Mr. Presiding Officer.128

The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is
enlightening.

MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding Officer, did I get the Gentleman
correctly as having said that this is not a self-executing provision? It would require a legislation by
Congress to implement?

MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment from
Commissioner Regalado, so that the safeguards on national interest are modified by the clause "as may
be provided by law"

MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and Congress may
provide for reasonable safeguards on the sole ground national interest?

MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should immediately influence the
climate of the conduct of public affairs but, of course, Congress here may no longer pass a law revoking
it, or if this is approved, revoking this principle, which is inconsistent with this policy.129 (Emphasis
supplied)

Indubitably, the effectivity of the policy of public disclosure need not await the passing of a statute. As
Congress cannot revoke this principle, it is merely directed to provide for "reasonable safeguards." The
complete and effective exercise of the right to information necessitates that its complementary
provision on public disclosure derive the same self-executory nature. Since both provisions go hand-in-
hand, it is absurd to say that the broader130 right to information on matters of public concern is already
enforceable while the correlative duty of the State to disclose its transactions involving public interest is
not enforceable until there is an enabling law. Respondents cannot thus point to the absence of an
implementing legislation as an excuse in not effecting such policy.

An essential element of these freedoms is to keep open a continuing dialogue or process of

communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive and
be responsive to the people's will.131 Envisioned to be corollary to the twin rights to information and
disclosure is the design for feedback mechanisms.

MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people be able to participate? Will
the government provide feedback mechanisms so that the people can participate and can react where
the existing media facilities are not able to provide full feedback mechanisms to the government? I
suppose this will be part of the government implementing operational mechanisms.

MR. OPLE. Yes. I think through their elected representatives and that is how these courses take place.
There is a message and a feedback, both ways.

xxxx

MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence?

I think when we talk about the feedback network, we are not talking about public officials but also
network of private business o[r] community-based organizations that will be reacting. As a matter of
fact, we will put more credence or credibility on the private network of volunteers and voluntary
community-based organizations. So I do not think we are afraid that there will be another OMA in the
making.132 (Emphasis supplied)

The imperative of a public consultation, as a species of the right to information, is evident in the
"marching orders" to respondents. The mechanics for the duty to disclose information and to conduct
public consultation regarding the peace agenda and process is manifestly provided by E.O. No. 3.133 The
preambulatory clause of E.O. No. 3 declares that there is a need to further enhance the contribution of
civil society to the comprehensive peace process by institutionalizing the people's participation.

One of the three underlying principles of the comprehensive peace process is that it "should be
community-based, reflecting the sentiments, values and principles important to all Filipinos" and "shall
be defined not by the government alone, nor by the different contending groups only, but by all Filipinos
as one community."134 Included as a component of the comprehensive peace process is consensus-
building and empowerment for peace, which includes "continuing consultations on both national and
local levels to build consensus for a peace agenda and process, and the mobilization and facilitation of
people's participation in the peace process."135

Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate "continuing"
consultations, contrary to respondents' position that plebiscite is "more than sufficient
consultation."136

Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to
"[c]onduct regular dialogues with the National Peace Forum (NPF) and other peace partners to seek
relevant information, comments, recommendations as well as to render appropriate and timely reports
on the progress of the comprehensive peace process."137 E.O. No. 3 mandates the establishment of the
NPF to be "the principal forum for the PAPP to consult with and seek advi[c]e from the peace advocates,
peace partners and concerned sectors of society on both national and local levels, on the
implementation of the comprehensive peace process, as well as for government[-]civil society dialogue
and consensus-building on peace agenda and initiatives."138

In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace agenda, as a corollary to
the constitutional right to information and disclosure.

PAPP Esperon committed grave abuse of discretion

The PAPP committed grave abuse of discretion when he failed to carry out the pertinent consultation.
The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of
the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise
thereof.

The Court may not, of course, require the PAPP to conduct the consultation in a particular way or
manner. It may, however, require him to comply with the law and discharge the functions within the
authority granted by the President.139

Petitioners are not claiming a seat at the negotiating table, contrary to respondents' retort in justifying
the denial of petitioners' right to be consulted. Respondents' stance manifests the manner by which
they treat the salient provisions of E.O. No. 3 on people's participation. Such disregard of the express
mandate of the President is not much different from superficial conduct toward token provisos that
border on classic lip service.140 It illustrates a gross evasion of positive duty and a virtual refusal to
perform the duty enjoined.

As for respondents' invocation of the doctrine of executive privilege, it is not tenable under the
premises. The argument defies sound reason when contrasted with E.O. No. 3's explicit provisions on
continuing consultation and dialogue on both national and local levels. The executive order even
recognizes the exercise of the public's right even before the GRP makes its official recommendations or
before the government proffers its definite propositions.141 It bear emphasis that E.O. No. 3 seeks to
elicit relevant advice, information, comments and recommendations from the people through dialogue.

AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their
unqualified disclosure of the official copies of the final draft of the MOA-AD. By unconditionally
complying with the Court's August 4, 2008 Resolution, without a prayer for the document's disclosure in
camera, or without a manifestation that it was complying therewith ex abundante ad cautelam.

Petitioners' assertion that the Local Government Code (LGC) of 1991 declares it a State policy to "require
all national agencies and offices to conduct periodic consultations with appropriate local government
units, non-governmental and people's organizations, and other concerned sectors of the community
before any project or program is implemented in their respective jurisdictions"142 is well-taken. The
LGC chapter on intergovernmental relations puts flesh into this avowed policy:

Prior Consultations Required. - No project or program shall be implemented by government

authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and
prior approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such
projects are to be implemented shall not be evicted unless appropriate relocation sites have been
provided, in accordance with the provisions of the Constitution.143 (Italics and underscoring supplied)

In Lina, Jr. v. Hon. Paño,144 the Court held that the above-stated policy and above-quoted provision of
the LGU apply only to national programs or projects which are to be implemented in a particular local
community. Among the programs and projects covered are those that are critical to the environment
and human ecology including those that may call for the eviction of a particular group of people residing
in the locality where these will be implemented.145 The MOA-AD is one peculiar program that
unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people,146 which
could pervasively and drastically result to the diaspora or displacement of a great number of inhabitants
from their total environment.

With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests are
represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs have,
under the IPRA, the right to participate fully at all levels of decision-making in matters which may affect
their rights, lives and destinies.147 The MOA-AD, an instrument recognizing ancestral domain, failed to
justify its non-compliance with the clear-cut mechanisms ordained in said Act,148 which entails, among
other things, the observance of the free and prior informed consent of the ICCs/IPs.

Notably, the IPRA does not grant the Executive Department or any government agency the power to
delineate and recognize an ancestral domain claim by mere agreement or compromise. The recognition
of the ancestral domain is the raison d'etre of the MOA-AD, without which all other stipulations or
"consensus points" necessarily must fail. In proceeding to make a sweeping declaration on ancestral
domain, without complying with the IPRA, which is cited as one of the TOR of the MOA-AD, respondents
clearly transcended the boundaries of their authority. As it seems, even the heart of the MOA-AD is still
subject to necessary changes to the legal framework. While paragraph 7 on Governance suspends the
effectivity of all provisions requiring changes to the legal framework, such clause is itself invalid, as will
be discussed in the following section.

Indeed, ours is an open society, with all the acts of the government subject to public scrutiny and
available always to public cognizance. This has to be so if the country is to remain democratic, with
sovereignty residing in the people and all government authority emanating from them.149

ON THE SECOND SUBSTANTIVE ISSUE

With regard to the provisions of the MOA-AD, there can be no question that they cannot all be
accommodated under the present Constitution and laws. Respondents have admitted as much in the
oral arguments before this Court, and the MOA-AD itself recognizes the need to amend the existing legal
framework to render effective at least some of its provisions. Respondents, nonetheless, counter that
the MOA-AD is free of any legal infirmity because any provisions therein which are inconsistent with the
present legal framework will not be effective until the necessary changes to that framework are made.
The validity of this argument will be considered later. For now, the Court shall pass upon how

The MOA-AD is inconsistent with the Constitution and laws as presently worded.

In general, the objections against the MOA-AD center on the extent of the powers conceded therein to
the BJE. Petitioners assert that the powers granted to the BJE exceed those granted to any local
government under present laws, and even go beyond those of the present ARMM. Before assessing
some of the specific powers that would have been vested in the BJE, however, it would be useful to turn
first to a general idea that serves as a unifying link to the different provisions of the MOA-AD,
namely, the international law concept of association. Significantly, the MOA-AD explicitly alludes to this
concept, indicating that the Parties actually framed its provisions with it in mind.

Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and paragraph 4

on GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD most clearly uses it to
describe the envisioned relationship between the BJE and the Central Government.

4. The relationship between the Central Government and the Bangsamoro juridical entity shall
be associative characterized by shared authority and responsibility with a structure of governance based
on executive, legislative, judicial and administrative institutions with defined powers and functions in
the comprehensive compact. A period of transition shall be established in a comprehensive peace
compact specifying the relationship between the Central Government and the BJE. (Emphasis and
underscoring supplied)

The nature of the "associative" relationship may have been intended to be defined more precisely in the
still to be forged Comprehensive Compact. Nonetheless, given that there is a concept of "association" in
international law, and the MOA-AD - by its inclusion of international law instruments in its TOR- placed
itself in an international legal context, that concept of association may be brought to bear in
understanding the use of the term "associative" in the MOA-AD.

Keitner and Reisman state that

[a]n association is formed when two states of unequal power voluntarily establish durable links. In the
basic model, one state, the associate, delegates certain responsibilities to the other, the principal, while
maintaining its international status as a state. Free associations represent a middle ground between
integration and independence. x x x150 (Emphasis and underscoring supplied)

For purposes of illustration, the Republic of the Marshall Islands and the Federated States of Micronesia
(FSM), formerly part of the U.S.-administered Trust Territory of the Pacific Islands,151 are associated
states of the U.S. pursuant to a Compact of Free Association. The currency in these countries is the U.S.
dollar, indicating their very close ties with the U.S., yet they issue their own travel documents, which is a
mark of their statehood. Their international legal status as states was confirmed by the UN Security
Council and by their admission to UN membership.

According to their compacts of free association, the Marshall Islands and the FSM generally have the
capacity to conduct foreign affairs in their own name and right, such capacity extending to matters such
as the law of the sea, marine resources, trade, banking, postal, civil aviation, and cultural relations. The
U.S. government, when conducting its foreign affairs, is obligated to consult with the governments of
the Marshall Islands or the FSM on matters which it (U.S. government) regards as relating to or affecting
either government.

In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has the
authority and obligation to defend them as if they were part of U.S. territory. The U.S. government,
moreover, has the option of establishing and using military areas and facilities within these associated
states and has the right to bar the military personnel of any third country from having access to these
territories for military purposes.
It bears noting that in U.S. constitutional and international practice, free association is understood as an
international association between sovereigns. The Compact of Free Association is a treaty which is
subordinate to the associated nation's national constitution, and each party may terminate the
association consistent with the right of independence. It has been said that, with the admission of the
U.S.-associated states to the UN in 1990, the UN recognized that the American model of free association
is actually based on an underlying status of independence.152

In international practice, the "associated state" arrangement has usually been used as a transitional
device of former colonies on their way to full independence. Examples of states that have passed
through the status of associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla,
Dominica, St. Lucia, St. Vincent and Grenada. All have since become independent states.153

Back to the MOA-AD, it contains many provisions which are consistent with the international legal
concept of association, specifically the following: the BJE's capacity to enter into economic and trade
relations with foreign countries, the commitment of the Central Government to ensure the BJE's
participation in meetings and events in the ASEAN and the specialized UN agencies, and the continuing
responsibility of the Central Government over external defense. Moreover, the BJE's right to
participate in Philippine official missions bearing on negotiation of border agreements, environmental
protection, and sharing of revenues pertaining to the bodies of water adjacent to or between the islands
forming part of the ancestral domain, resembles the right of the governments of FSM and the Marshall
Islands to be consulted by the U.S. government on any foreign affairs matter affecting them.

These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the BJE the
status of an associated state or, at any rate, a status closely approximating it.

The concept of association is not recognized under the present Constitution

No province, city, or municipality, not even the ARMM, is recognized under our laws as having an
"associative" relationship with the national government. Indeed, the concept implies powers that go
beyond anything ever granted by the Constitution to any local or regional government. It also implies
the recognition of the associated entity as a state. The Constitution, however, does not contemplate any
state in this jurisdiction other than the Philippine State, much less does it provide for a transitory status
that aims to prepare any part of Philippine territory for independence.

Even the mere concept animating many of the MOA-AD's provisions, therefore, already requires for its
validity the amendment of constitutional provisions, specifically the following provisions of Article X:

SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces,
cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the
Cordilleras as hereinafter provided.

SECTION 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras
consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive
historical and cultural heritage, economic and social structures, and other relevant characteristics within
the framework of this Constitution and the national sovereignty as well as territorial integrity of the
Republic of the Philippines.
The BJE is a far more powerful
entity than the autonomous region
recognized in the Constitution

It is not merely an expanded version of the ARMM, the status of its relationship with the national
government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but name
as it meets the criteria of a state laid down in the Montevideo Convention,154 namely, a permanent
population, a defined territory, a government, and a capacity to enter into relations with other states.

Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine
territory, the spirit animating it - which has betrayed itself by its use of the concept of association - runs
counter to the national sovereignty and territorial integrity of the Republic.

The defining concept underlying the relationship between the national government and the BJE being
itself contrary to the present Constitution, it is not surprising that many of the specific provisions of the
MOA-AD on the formation and powers of the BJE are in conflict with the Constitution and the laws.

Article X, Section 18 of the Constitution provides that "[t]he creation of the autonomous region shall be
effective when approved by a majority of the votes cast by the constituent units in a plebiscite called for
the purpose, provided that only provinces, cities, and geographic areas voting favorably in such
plebiscite shall be included in the autonomous region." (Emphasis supplied)

As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it is
covered by the term "autonomous region" in the constitutional provision just quoted, the MOA-AD
would still be in conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the
present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which
voted for inclusion in the ARMM during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar, Tagoloan
and Tangkal - are automatically part of the BJE without need of another plebiscite, in contrast to the
areas under Categories A and B mentioned earlier in the overview. That the present components of the
ARMM and the above-mentioned municipalities voted for inclusion therein in 2001, however,
does not render another plebiscite unnecessary under the Constitution, precisely because what these
areas voted for then was their inclusion in the ARMM, not the BJE.

The MOA-AD, moreover, would not

comply with Article X, Section 20 of
the Constitution

since that provision defines the powers of autonomous regions as follows:

SECTION 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and
national laws, the organic act of autonomous regions shall provide for legislative powers over:

(1) Administrative organization;

(2) Creation of sources of revenues;

(3) Ancestral domain and natural resources;

(4) Personal, family, and property relations;

(5) Regional urban and rural planning development;

(6) Economic, social, and tourism development;

(7) Educational policies;

(8) Preservation and development of the cultural heritage; and

(9) Such other matters as may be authorized by law for the promotion of the general welfare of the
people of the region. (Underscoring supplied)

Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would
require an amendment that would expand the above-quoted provision. The mere passage of new
legislation pursuant to sub-paragraph No. 9 of said constitutional provision would not suffice, since any
new law that might vest in the BJE the powers found in the MOA-AD must, itself, comply with other
provisions of the Constitution. It would not do, for instance, to merely pass legislation vesting the BJE
with treaty-making power in order to accommodate paragraph 4 of the strand on RESOURCES which
states: "The BJE is free to enter into any economic cooperation and trade relations with foreign
countries: provided, however, that such relationships and understandings do not include aggression
against the Government of the Republic of the Philippines x x x." Under our constitutional system, it is
only the President who has that power. Pimentel v. Executive Secretary155 instructs:

In our system of government, the President, being the head of state, is regarded as the sole organ and
authority in external relations and is the country's sole representative with foreign nations. As the chief
architect of foreign policy, the President acts as the country's mouthpiece with respect to international
affairs. Hence, the President is vested with the authority to deal with foreign states and governments,
extend or withhold recognition, maintain diplomatic relations, enter into treaties, and otherwise
transact the business of foreign relations. In the realm of treaty-making, the President has the sole
authority to negotiate with other states. (Emphasis and underscoring supplied)

Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-AD
is to be effected. That constitutional provision states: "The State recognizes and promotes the rights
of indigenous cultural communities within the framework of national unity and development."
(Underscoring supplied) An associative arrangement does not uphold national unity. While there may be
a semblance of unity because of the associative ties between the BJE and the national government, the
act of placing a portion of Philippine territory in a status which, in international practice, has generally
been a preparation for independence, is certainly not conducive to national unity.

Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing
statutory law, among which are R.A. No. 9054156 or the Organic Act of the ARMM, and the IPRA.157

Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of the definition of
"Bangsamoro people" used in the MOA-AD. Paragraph 1 on Concepts and Principles states:

1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be
accepted as "Bangsamoros". The Bangsamoro people refers to those who are natives or original
inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time
of conquest or colonization of its descendants whether mixed or of full blood. Spouses and their
descendants are classified as Bangsamoro. The freedom of choice of the Indigenous people shall be
respected. (Emphasis and underscoring supplied)

This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the
Organic Act, which, rather than lumping together the identities of the Bangsamoro and other indigenous
peoples living in Mindanao, clearly distinguishes between Bangsamoro people and Tribal peoples, as
follows:

"As used in this Organic Act, the phrase "indigenous cultural community" refers to Filipino citizens
residing in the autonomous region who are:

(a) Tribal peoples. These are citizens whose social, cultural and economic conditions distinguish them
from other sectors of the national community; and

(b) Bangsa Moro people. These are citizens who are believers in Islam and who have retained some or all
of their own social, economic, cultural, and political institutions."

Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of
ancestral domains. The MOA-AD's manner of delineating the ancestral domain of the Bangsamoro
people is a clear departure from that procedure. By paragraph 1 of Territory, the Parties simply agree
that, subject to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and historic
territory refer to the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, and the
aerial domain, the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic
region."

Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the
following provisions thereof:

SECTION 52. Delineation Process. - The identification and delineation of ancestral domains shall be done
in accordance with the following procedures:

xxxx

b) Petition for Delineation. - The process of delineating a specific perimeter may be initiated by the NCIP
with the consent of the ICC/IP concerned, or through a Petition for Delineation filed with the NCIP, by a
majority of the members of the ICCs/IPs;

c) Delineation Proper. - The official delineation of ancestral domain boundaries including census of all
community members therein, shall be immediately undertaken by the Ancestral Domains Office upon
filing of the application by the ICCs/IPs concerned. Delineation will be done in coordination with the
community concerned and shall at all times include genuine involvement and participation by the
members of the communities concerned;

d) Proof Required. - Proof of Ancestral Domain Claims shall include the testimony of elders or
community under oath, and other documents directly or indirectly attesting to the possession or
occupation of the area since time immemorial by such ICCs/IPs in the concept of owners which shall be
any one (1) of the following authentic documents:

1) Written accounts of the ICCs/IPs customs and traditions;

2) Written accounts of the ICCs/IPs political structure and institution;

3) Pictures showing long term occupation such as those of old improvements, burial grounds, sacred
places and old villages;

4) Historical accounts, including pacts and agreements concerning boundaries entered into by the
ICCs/IPs concerned with other ICCs/IPs;

5) Survey plans and sketch maps;

6) Anthropological data;

7) Genealogical surveys;

8) Pictures and descriptive histories of traditional communal forests and hunting grounds;

9) Pictures and descriptive histories of traditional landmarks such as mountains, rivers, creeks, ridges,
hills, terraces and the like; and

10) Write-ups of names and places derived from the native dialect of the community.

e) Preparation of Maps. - On the basis of such investigation and the findings of fact based thereon, the
Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete with technical
descriptions, and a description of the natural features and landmarks embraced therein;

f) Report of Investigation and Other Documents. - A complete copy of the preliminary census and a
report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP;

g) Notice and Publication. - A copy of each document, including a translation in the native language of
the ICCs/IPs concerned shall be posted in a prominent place therein for at least fifteen (15) days. A copy
of the document shall also be posted at the local, provincial and regional offices of the NCIP, and shall be
published in a newspaper of general circulation once a week for two (2) consecutive weeks to allow
other claimants to file opposition thereto within fifteen (15) days from date of such publication:
Provided, That in areas where no such newspaper exists, broadcasting in a radio station will be a valid
substitute: Provided, further, That mere posting shall be deemed sufficient if both newspaper and radio
station are not available;

h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the inspection process, the
Ancestral Domains Office shall prepare a report to the NCIP endorsing a favorable action upon a claim
that is deemed to have sufficient proof. However, if the proof is deemed insufficient, the Ancestral
Domains Office shall require the submission of additional evidence: Provided, That the Ancestral
Domains Office shall reject any claim that is deemed patently false or fraudulent after inspection and
verification: Provided, further, That in case of rejection, the Ancestral Domains Office shall give the
applicant due notice, copy furnished all concerned, containing the grounds for denial. The denial shall be
appealable to the NCIP: Provided, furthermore, That in cases where there are conflicting claims among
ICCs/IPs on the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the
contending parties to meet and assist them in coming up with a preliminary resolution of the conflict,
without prejudice to its full adjudication according to the section below.

xxxx
To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a
discussion of not only the Constitution and domestic statutes, but also of international law is in order,
for

Article II, Section 2 of the Constitution states that the Philippines "adopts the generally accepted
principles of international law as part of the law of the land."

Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons,158 held that the
Universal Declaration of Human Rights is part of the law of the land on account of which it ordered the
release on bail of a detained alien of Russian descent whose deportation order had not been executed
even after two years. Similarly, the Court in Agustin v. Edu159 applied the aforesaid constitutional
provision to the 1968 Vienna Convention on Road Signs and Signals.

International law has long recognized the right to self-determination of "peoples," understood not
merely as the entire population of a State but also a portion thereof. In considering the question of
whether the people of Quebec had a right to unilaterally secede from Canada, the Canadian Supreme
Court in REFERENCE RE SECESSION OF QUEBEC160 had occasion to acknowledge that "the right of a
people to self-determination is now so widely recognized in international conventions that the principle
has acquired a status beyond ‘convention' and is considered a general principle of international law."

Among the conventions referred to are the International Covenant on Civil and Political Rights161 and
the International Covenant on Economic, Social and Cultural Rights162 which state, in Article 1 of both
covenants, that all peoples, by virtue of the right of self-determination, "freely determine their political
status and freely pursue their economic, social, and cultural development."

The people's right to self-determination should not, however, be understood as extending to a unilateral
right of secession. A distinction should be made between the right of internal and external self-
determination. REFERENCE RE SECESSION OF QUEBEC is again instructive:

"(ii) Scope of the Right to Self-determination

126. The recognized sources of international law establish that the right to self-determination of a
people is normally fulfilled through internal self-determination - a people's pursuit of its political,
economic, social and cultural development within the framework of an existing state. A right
to external self-determination (which in this case potentially takes the form of the assertion of a right to
unilateral secession) arises in only the most extreme of cases and, even then, under carefully defined
circumstances. x x x

External self-determination can be defined as in the following statement from the Declaration on

Friendly Relations, supra, as

The establishment of a sovereign and independent State, the free association or integration with an
independent State or the emergence into any other political status freely determined by
a people constitute modes of implementing the right of self-determination by that people. (Emphasis
added)

127. The international law principle of self-determination has evolved within a framework of respect for
the territorial integrity of existing states. The various international documents that support the
existence of a people's right to self-determination also contain parallel statements supportive of the
conclusion that the exercise of such a right must be sufficiently limited to prevent threats to an existing
state's territorial integrity or the stability of relations between sovereign states.

x x x x (Emphasis, italics and underscoring supplied)

The Canadian Court went on to discuss the exceptional cases in which the right to external self-
determination can arise, namely, where a people is under colonial rule, is subject to foreign domination
or exploitation outside a colonial context, and - less definitely but asserted by a number of
commentators - is blocked from the meaningful exercise of its right to internal self-determination. The
Court ultimately held that the population of Quebec had no right to secession, as the same is not under
colonial rule or foreign domination, nor is it being deprived of the freedom to make political choices and
pursue economic, social and cultural development, citing that Quebec is equitably represented in
legislative, executive and judicial institutions within Canada, even occupying prominent positions
therein.

The exceptional nature of the right of secession is further exemplified in the REPORT OF THE
INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND ISLANDS
QUESTION.163 There, Sweden presented to the Council of the League of Nations the question of
whether the inhabitants of the Aaland Islands should be authorized to determine by plebiscite if the
archipelago should remain under Finnish sovereignty or be incorporated in the kingdom of Sweden. The
Council, before resolving the question, appointed an International Committee composed of three jurists
to submit an opinion on the preliminary issue of whether the dispute should, based on international law,
be entirely left to the domestic jurisdiction of Finland. The Committee stated the rule as follows:

x x x [I]n the absence of express provisions in international treaties, the right of disposing of national
territory is essentially an attribute of the sovereignty of every State. Positive International Law does not
recognize the right of national groups, as such, to separate themselves from the State of which they
form part by the simple expression of a wish, any more than it recognizes the right of other States to
claim such a separation. Generally speaking, the grant or refusal of the right to a portion of its
population of determining its own political fate by plebiscite or by some other method, is, exclusively, an
attribute of the sovereignty of every State which is definitively constituted. A dispute between two
States concerning such a question, under normal conditions therefore, bears upon a question which
International Law leaves entirely to the domestic jurisdiction of one of the States concerned. Any other
solution would amount to an infringement of sovereign rights of a State and would involve the risk of
creating difficulties and a lack of stability which would not only be contrary to the very idea embodied in
term "State," but would also endanger the interests of the international community. If this right is not
possessed by a large or small section of a nation, neither can it be held by the State to which the
national group wishes to be attached, nor by any other State. (Emphasis and underscoring supplied)

The Committee held that the dispute concerning the Aaland Islands did not refer to a question which is
left by international law to the domestic jurisdiction of Finland, thereby applying the exception rather
than the rule elucidated above. Its ground for departing from the general rule, however, was a very
narrow one, namely, the Aaland Islands agitation originated at a time when Finland was undergoing
drastic political transformation. The internal situation of Finland was, according to the Committee, so
abnormal that, for a considerable time, the conditions required for the formation of a sovereign State
did not exist. In the midst of revolution, anarchy, and civil war, the legitimacy of the Finnish national
government was disputed by a large section of the people, and it had, in fact, been chased from the
capital and forcibly prevented from carrying out its duties. The armed camps and the police were
divided into two opposing forces. In light of these circumstances, Finland was not, during the relevant
time period, a "definitively constituted" sovereign state. The Committee, therefore, found that Finland
did not possess the right to withhold from a portion of its population the option to separate itself - a
right which sovereign nations generally have with respect to their own populations.

Turning now to the more specific category of indigenous peoples, this term has been used, in
scholarship as well as international, regional, and state practices, to refer to groups with distinct
cultures, histories, and connections to land (spiritual and otherwise) that have been forcibly
incorporated into a larger governing society. These groups are regarded as "indigenous" since they are
the living descendants of pre-invasion inhabitants of lands now dominated by others. Otherwise stated,
indigenous peoples, nations, or communities are culturally distinctive groups that find themselves
engulfed by settler societies born of the forces of empire and conquest.164 Examples of groups who
have been regarded as indigenous peoples are the Maori of New Zealand and the aboriginal peoples of
Canada.

As with the broader category of "peoples," indigenous peoples situated within states do not have a
general right to independence or secession from those states under international law,165 but they do
have rights amounting to what was discussed above as the right to internal self-determination.

In a historic development last September 13, 2007, the UN General Assembly adopted the United
Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) through General Assembly
Resolution 61/295. The vote was 143 to 4, the Philippines being included among those in favor, and the
four voting against being Australia, Canada, New Zealand, and the U.S. The Declaration clearly
recognized the right of indigenous peoples to self-determination, encompassing the right to autonomy
or self-government, to wit:

Article 3

Indigenous peoples have the right to self-determination. By virtue of that right they freely determine
their political status and freely pursue their economic, social and cultural development.

Article 4

Indigenous peoples, in exercising their right to self-determination, have the right to autonomy or self-

government in matters relating to their internal and local affairs, as well as ways and means for financing
their autonomous functions.

Article 5

Indigenous peoples have the right to maintain and strengthen their distinct political, legal, economic,
social and cultural institutions, while retaining their right to participate fully, if they so choose, in the
political, economic, social and cultural life of the State.

Self-government, as used in international legal discourse pertaining to indigenous peoples, has been
understood as equivalent to "internal self-determination."166 The extent of self-determination provided
for in the UN DRIP is more particularly defined in its subsequent articles, some of which are quoted
hereunder:
Article 8

1. Indigenous peoples and individuals have the right not to be subjected to forced assimilation or
destruction of their culture.

2. States shall provide effective mechanisms for prevention of, and redress for:

(a) Any action which has the aim or effect of depriving them of their integrity as distinct peoples, or of
their cultural values or ethnic identities;

(b) Any action which has the aim or effect of dispossessing them of their lands, territories or resources;

(c) Any form of forced population transfer which has the aim or effect of violating or undermining any of
their rights;

(d) Any form of forced assimilation or integration;

(e) Any form of propaganda designed to promote or incite racial or ethnic discrimination directed
against them.

Article 21

1. Indigenous peoples have the right, without discrimination, to the improvement of their economic and
social conditions, including, inter alia, in the areas of education, employment, vocational training and
retraining, housing, sanitation, health and social security.

2. States shall take effective measures and, where appropriate, special measures to ensure continuing
improvement of their economic and social conditions. Particular attention shall be paid to the rights and
special needs of indigenous elders, women, youth, children and persons with disabilities.

Article 26

1. Indigenous peoples have the right to the lands, territories and resources which they have traditionally
owned, occupied or otherwise used or acquired.

2. Indigenous peoples have the right to own, use, develop and control the lands, territories and
resources that they possess by reason of traditional ownership or other traditional occupation or use, as
well as those which they have otherwise acquired.

3. States shall give legal recognition and protection to these lands, territories and resources. Such
recognition shall be conducted with due respect to the customs, traditions and land tenure systems of
the indigenous peoples concerned.

Article 30

1. Military activities shall not take place in the lands or territories of indigenous peoples, unless justified
by a relevant public interest or otherwise freely agreed with or requested by the indigenous peoples
concerned.

2. States shall undertake effective consultations with the indigenous peoples concerned, through
appropriate procedures and in particular through their representative institutions, prior to using their
lands or territories for military activities.
Article 32

1. Indigenous peoples have the right to determine and develop priorities and strategies for the
development or use of their lands or territories and other resources.

2. States shall consult and cooperate in good faith with the indigenous peoples concerned through their
own representative institutions in order to obtain their free and informed consent prior to the approval
of any project affecting their lands or territories and other resources, particularly in connection with the
development, utilization or exploitation of mineral, water or other resources.

3. States shall provide effective mechanisms for just and fair redress for any such activities, and
appropriate measures shall be taken to mitigate adverse environmental, economic, social, cultural or
spiritual impact.

Article 37

1. Indigenous peoples have the right to the recognition, observance and enforcement of treaties,
agreements and other constructive arrangements concluded with States or their successors and to have
States honour and respect such treaties, agreements and other constructive arrangements.

2. Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of indigenous
peoples contained in treaties, agreements and other constructive arrangements.

Article 38

States in consultation and cooperation with indigenous peoples, shall take the appropriate measures,
including legislative measures, to achieve the ends of this Declaration.

Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded as
embodying customary international law - a question which the Court need not definitively resolve here -
the obligations enumerated therein do not strictly require the Republic to grant the Bangsamoro people,
through the instrumentality of the BJE, the particular rights and powers provided for in the MOA-AD.
Even the more specific provisions of the UN DRIP are general in scope, allowing for flexibility in its
application by the different States.

There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous peoples
their own police and internal security force. Indeed, Article 8 presupposes that it is the State which will
provide protection for indigenous peoples against acts like the forced dispossession of their lands - a
function that is normally performed by police officers. If the protection of a right so essential to
indigenous people's identity is acknowledged to be the responsibility of the State, then surely the
protection of rights less significant to them as such peoples would also be the duty of States. Nor is
there in the UN DRIP an acknowledgement of the right of indigenous peoples to the aerial domain and
atmospheric space. What it upholds, in Article 26 thereof, is the right of indigenous peoples to the lands,
territories and resources which they have traditionally owned, occupied or otherwise used or acquired.

Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not obligate
States to grant indigenous peoples the near-independent status of an associated state. All the rights
recognized in that document are qualified in Article 46 as follows:
1. Nothing in this Declaration may be interpreted as implying for any State, people, group or person any
right to engage in any activity or to perform any act contrary to the Charter of the United Nations
or construed as authorizing or encouraging any action which would dismember or impair, totally or in
part, the territorial integrity or political unity of sovereign and independent States.

Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2 of the
Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its compliance
with other laws unnecessary.

It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be reconciled with the
Constitution and the laws as presently worded. Respondents proffer, however, that the signing of the
MOA-AD alone would not have entailed any violation of law or grave abuse of discretion on their part,
precisely because it stipulates that the provisions thereof inconsistent with the laws shall not take effect
until these laws are amended. They cite paragraph 7 of the MOA-AD strand on GOVERNANCE quoted
earlier, but which is reproduced below for convenience:

7. The Parties agree that the mechanisms and modalities for the actual implementation of this MOA-AD
shall be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur
effectively.

Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into
force upon signing of a Comprehensive Compact and upon effecting the necessary changes to the legal
framework with due regard to non derogation of prior agreements and within the stipulated timeframe
to be contained in the Comprehensive Compact.

Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming into
force until the necessary changes to the legal framework are effected. While the word "Constitution" is
not mentioned in the provision now under consideration or anywhere else in the MOA-AD, the term
"legal framework" is certainly broad enough to include the Constitution.

Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in the
MOA-AD the provisions thereof regarding the associative relationship between the BJE and the Central
Government, have already violated the Memorandum of Instructions From The President dated March
1, 2001, which states that the "negotiations shall be conducted in accordance with x x x the principles of
the sovereignty and territorial integrity of the Republic of the Philippines." (Emphasis supplied)
Establishing an associative relationship between the BJE and the Central Government is, for the reasons
already discussed, a preparation for independence, or worse, an implicit acknowledgment of an
independent status already prevailing.

Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because the
suspensive clause is invalid, as discussed below.

The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No. 3,
Section 5(c), which states that there shall be established Government Peace Negotiating Panels for
negotiations with different rebel groups to be "appointed by the President as her official emissaries to
conduct negotiations, dialogues, and face-to-face discussions with rebel groups." These negotiating
panels are to report to the President, through the PAPP on the conduct and progress of the
negotiations.
It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through its
negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under the
laws as they presently stand. One of the components of a comprehensive peace process, which E.O. No.
3 collectively refers to as the "Paths to Peace," is the pursuit of social, economic, and political reforms
which may require new legislation or even constitutional amendments. Sec. 4(a) of E.O. No. 3, which
reiterates Section 3(a), of E.O. No. 125,167 states:

SECTION 4. The Six Paths to Peace. - The components of the comprehensive peace process comprise the
processes known as the "Paths to Peace". These component processes are interrelated and not mutually
exclusive, and must therefore be pursued simultaneously in a coordinated and integrated fashion. They
shall include, but may not be limited to, the following:

a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component involves the vigorous
implementation of various policies, reforms, programs and projects aimed at addressing the root causes
of internal armed conflicts and social unrest. This may require administrative action, new legislation or
even constitutional amendments.

x x x x (Emphasis supplied)

The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address,

pursuant to this provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O.
authorized them to "think outside the box," so to speak. Hence, they negotiated and were set on signing
the MOA-AD that included various social, economic, and political reforms which cannot, however, all be
accommodated within the present legal framework, and which thus would require new legislation and
constitutional amendments.

The inquiry on the legality of the "suspensive clause," however, cannot stop here, because it must be
asked whether the President herself may exercise the power delegated to the GRP Peace Panel under
E.O. No. 3, Sec. 4(a).

The President cannot delegate a power that she herself does not possess. May the President, in the
course of peace negotiations, agree to pursue reforms that would require new legislation and
constitutional amendments, or should the reforms be restricted only to those solutions which the
present laws allow? The answer to this question requires a discussion of the extent of the President's
power to conduct peace negotiations.

That the authority of the President to conduct peace negotiations with rebel groups is not explicitly
mentioned in the Constitution does not mean that she has no such authority. In Sanlakas v. Executive
Secretary,168 in issue was the authority of the President to declare a state of rebellion - an authority
which is not expressly provided for in the Constitution. The Court held thus:

"In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence. There, the
Court, by a slim 8-7 margin, upheld the President's power to forbid the return of her exiled predecessor.
The rationale for the majority's ruling rested on the President's

. . . unstated residual powers which are implied from the grant of executive power and which
are necessary for her to comply with her duties under the Constitution. The powers of the President are
not limited to what are expressly enumerated in the article on the Executive Department and in
scattered provisions of the Constitution. This is so, notwithstanding the avowed intent of the members
of the Constitutional Commission of 1986 to limit the powers of the President as a reaction to the
abuses under the regime of Mr. Marcos, for the result was a limitation of specific powers of the
President, particularly those relating to the commander-in-chief clause, but not a diminution of the
general grant of executive power.

Thus, the President's authority to declare a state of rebellion springs in the main from her powers as
chief executive and, at the same time, draws strength from her Commander-in-Chief powers. x x x
(Emphasis and underscoring supplied)

Similarly, the President's power to conduct peace negotiations is implicitly included in her powers as
Chief Executive and Commander-in-Chief. As Chief Executive, the President has the general
responsibility to promote public peace, and as Commander-in-Chief, she has the more specific duty to
prevent and suppress rebellion and lawless violence.169

As the experience of nations which have similarly gone through internal armed conflict will show,
however, peace is rarely attained by simply pursuing a military solution. Oftentimes, changes as far-
reaching as a fundamental reconfiguration of the nation's constitutional structure is required. The
observations of Dr. Kirsti Samuels are enlightening, to wit:

x x x [T]he fact remains that a successful political and governance transition must form the core of any
post-conflict peace-building mission. As we have observed in Liberia and Haiti over the last ten years,
conflict cessation without modification of the political environment, even where state-building is
undertaken through technical electoral assistance and institution- or capacity-building, is unlikely to
succeed. On average, more than 50 percent of states emerging from conflict return to conflict.
Moreover, a substantial proportion of transitions have resulted in weak or limited democracies.

The design of a constitution and its constitution-making process can play an important role in the
political and governance transition. Constitution-making after conflict is an opportunity to create a
common vision of the future of a state and a road map on how to get there. The constitution can be
partly a peace agreement and partly a framework setting up the rules by which the new democracy will
operate.170

In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace
agreements, observed that the typical way that peace agreements establish or confirm mechanisms for
demilitarization and demobilization is by linking them to new constitutional structures addressing
governance, elections, and legal and human rights institutions.171

In the Philippine experience, the link between peace agreements and constitution-making has been
recognized by no less than the framers of the Constitution. Behind the provisions of the Constitution on
autonomous regions172 is the framers' intention to implement a particular peace agreement, namely,
the Tripoli Agreement of 1976 between the GRP and the MNLF, signed by then Undersecretary of
National Defense Carmelo Z. Barbero and then MNLF Chairman Nur Misuari.

MR. ROMULO. There are other speakers; so, although I have some more questions, I will reserve my
right to ask them if they are not covered by the other speakers. I have only two questions.
I heard one of the Commissioners say that local autonomy already exists in the Muslim region; it is
working very well; it has, in fact, diminished a great deal of the problems. So, my question is: since that
already exists, why do we have to go into something new?

MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup Abubakar is right
that certain definite steps have been taken to implement the provisions of the Tripoli Agreement with
respect to an autonomous region in Mindanao. This is a good first step, but there is no question that this
is merely a partial response to the Tripoli Agreement itself and to the fuller standard of regional
autonomy contemplated in that agreement, and now by state policy.173(Emphasis supplied)

The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the
credit of their drafters, been partly successful. Nonetheless, the Filipino people are still faced with the
reality of an on-going conflict between the Government and the MILF. If the President is to be expected
to find means for bringing this conflict to an end and to achieve lasting peace in Mindanao, then she
must be given the leeway to explore, in the course of peace negotiations, solutions that may require
changes to the Constitution for their implementation. Being uniquely vested with the power to conduct
peace negotiations with rebel groups, the President is in a singular position to know the precise nature
of their grievances which, if resolved, may bring an end to hostilities.

The President may not, of course, unilaterally implement the solutions that she considers viable, but she
may not be prevented from submitting them as recommendations to Congress, which could then, if it is
minded, act upon them pursuant to the legal procedures for constitutional amendment and revision. In
particular, Congress would have the option, pursuant to Article XVII, Sections 1 and 3 of the
Constitution, to propose the recommended amendments or revision to the people, call a constitutional
convention, or submit to the electorate the question of calling such a convention.

While the President does not possess constituent powers - as those powers may be exercised only by
Congress, a Constitutional Convention, or the people through initiative and referendum - she may
submit proposals for constitutional change to Congress in a manner that does not involve the arrogation
of constituent powers.

In Sanidad v. COMELEC,174 in issue was the legality of then President Marcos' act of directly submitting
proposals for constitutional amendments to a referendum, bypassing the interim National Assembly
which was the body vested by the 1973 Constitution with the power to propose such amendments.
President Marcos, it will be recalled, never convened the interim National Assembly. The majority
upheld the President's act, holding that "the urges of absolute necessity" compelled the President as the
agent of the people to act as he did, there being no interim National Assembly to propose constitutional
amendments. Against this ruling, Justices Teehankee and Muñoz Palma vigorously dissented. The
Court's concern at present, however, is not with regard to the point on which it was then divided in that
controversial case, but on that which was not disputed by either side.

Justice Teehankee's dissent,175 in particular, bears noting. While he disagreed that the President may
directly submit proposed constitutional amendments to a referendum, implicit in his opinion is a
recognition that he would have upheld the President's action along with the majority had the President
convened the interim National Assembly and coursed his proposals through it. Thus Justice Teehankee
opined:
"Since the Constitution provides for the organization of the essential departments of government,
defines and delimits the powers of each and prescribes the manner of the exercise of such powers, and
the constituent power has not been granted to but has been withheld from the President or Prime
Minister, it follows that the President's questioned decrees proposing and submitting constitutional
amendments directly to the people (without the intervention of the interim National Assembly in whom
the power is expressly vested) are devoid of constitutional and legal basis."176 (Emphasis supplied)

From the foregoing discussion, the principle may be inferred that the President - in the course of
conducting peace negotiations - may validly consider implementing even those policies that require
changes to the Constitution, but she may not unilaterally implement them without the intervention of
Congress, or act in any way as if the assent of that body were assumed as a certainty.

Since, under the present Constitution, the people also have the power to directly propose amendments
through initiative and referendum, the President may also submit her recommendations to the people,
not as a formal proposal to be voted on in a plebiscite similar to what President Marcos did in Sanidad,
but for their independent consideration of whether these recommendations merit being formally
proposed through initiative.

These recommendations, however, may amount to nothing more than the President's suggestions to
the people, for any further involvement in the process of initiative by the Chief Executive may vitiate its
character as a genuine "people's initiative." The only initiative recognized by the Constitution is that
which truly proceeds from the people. As the Court stated in Lambino v. COMELEC:177

"The Lambino Group claims that their initiative is the ‘people's voice.' However, the Lambino Group
unabashedly states in ULAP Resolution No. 2006-02, in the verification of their petition with the
COMELEC, that ‘ULAP maintains its unqualified support to the agenda of Her Excellency President Gloria
Macapagal-Arroyo for constitutional reforms.' The Lambino Group thus admits that their ‘people's'
initiative is an ‘unqualified support to the agenda' of the incumbent President to change the
Constitution. This forewarns the Court to be wary of incantations of ‘people's voice' or ‘sovereign will' in
the present initiative."

It will be observed that the President has authority, as stated in her oath of office,178 only to preserve
and defend the Constitution. Such presidential power does not, however, extend to allowing her to
change the Constitution, but simply to recommend proposed amendments or revision. As long as she
limits herself to recommending these changes and submits to the proper procedure for constitutional
amendments and revision, her mere recommendation need not be construed as an unconstitutional act.

The foregoing discussion focused on the President's authority to propose constitutional amendments,

since her authority to propose new legislation is not in controversy. It has been an accepted practice for
Presidents in this jurisdiction to propose new legislation. One of the more prominent instances the
practice is usually done is in the yearly State of the Nation Address of the President to Congress.
Moreover, the annual general appropriations bill has always been based on the budget prepared by the
President, which - for all intents and purposes - is a proposal for new legislation coming from the
President.179

The "suspensive clause" in the MOA-AD viewed in light of the above-discussed standards
Given the limited nature of the President's authority to propose constitutional amendments, she cannot
guarantee to any third party that the required amendments will eventually be put in place, nor even be
submitted to a plebiscite. The most she could do is submit these proposals as recommendations either
to Congress or the people, in whom constituent powers are vested.

Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which cannot be
reconciled with the present Constitution and laws "shall come into force upon signing of a
Comprehensive Compact and upon effecting the necessary changes to the legal framework." This
stipulation does not bear the marks of a suspensive condition - defined in civil law as a future
and uncertain event - but of a term. It is not a question of whether the necessary changes to the legal
framework will be effected, but when. That there is no uncertainty being contemplated is plain from
what follows, for the paragraph goes on to state that the contemplated changes shall be "with due
regard to non derogation of prior agreements and within the stipulated timeframe to be contained in
the Comprehensive Compact."

Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal
framework contemplated in the MOA-AD - which changes would include constitutional amendments, as
discussed earlier. It bears noting that,

By the time these changes are put in place, the MOA-AD itself would be counted among the "prior
agreements" from which there could be no derogation.

What remains for discussion in the Comprehensive Compact would merely be the implementing details
for these "consensus points" and, notably, the deadline for effecting the contemplated changes to the
legal framework.

Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the President's

authority to propose constitutional amendments, it being a virtual guarantee that the Constitution and
the laws of the Republic of the Philippines will certainly be adjusted to conform to all the "consensus
points" found in the MOA-AD. Hence, it must be struck down as unconstitutional.

A comparison between the "suspensive clause" of the MOA-AD with a similar provision appearing in the
1996 final peace agreement between the MNLF and the GRP is most instructive.

As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two
phases. Phase I covered a three-year transitional period involving the putting up of new administrative
structures through Executive Order, such as the Special Zone of Peace and Development (SZOPAD) and
the Southern Philippines Council for Peace and Development (SPCPD), while Phase II covered the
establishment of the new regional autonomous government through amendment or repeal of R.A. No.
6734, which was then the Organic Act of the ARMM.

The stipulations on Phase II consisted of specific agreements on the structure of the expanded
autonomous region envisioned by the parties. To that extent, they are similar to the provisions of the
MOA-AD. There is, however, a crucial difference between the two agreements. While the MOA-
AD virtually guarantees that the "necessary changes to the legal framework" will be put in place, the
GRP-MNLF final peace agreement states thus: "Accordingly, these provisions [on Phase II] shall
be recommended by the GRP to Congress for incorporation in the amendatory or repealing law."
Concerns have been raised that the MOA-AD would have given rise to a binding international law
obligation on the part of the Philippines to change its Constitution in conformity thereto, on the ground
that it may be considered either as a binding agreement under international law, or a unilateral
declaration of the Philippine government to the international community that it would grant to the
Bangsamoro people all the concessions therein stated. Neither ground finds sufficient support in
international law, however.

The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries as
signatories. In addition, representatives of other nations were invited to witness its signing in Kuala
Lumpur. These circumstances readily lead one to surmise that the MOA-AD would have had the status
of a binding international agreement had it been signed. An examination of the prevailing principles in
international law, however, leads to the contrary conclusion.

The Decision on Challenge to Jurisdiction: Lomé Accord Amnesty180 (the Lomé Accord case) of the
Special Court of Sierra Leone is enlightening. The Lomé Accord was a peace agreement signed on July 7,
1999 between the Government of Sierra Leone and the Revolutionary United Front (RUF), a rebel group
with which the Sierra Leone Government had been in armed conflict for around eight years at the time
of signing. There were non-contracting signatories to the agreement, among which were the
Government of the Togolese Republic, the Economic Community of West African States, and the UN.

On January 16, 2002, after a successful negotiation between the UN Secretary-General and the Sierra
Leone Government, another agreement was entered into by the UN and that Government whereby the
Special Court of Sierra Leone was established. The sole purpose of the Special Court, an international
court, was to try persons who bore the greatest responsibility for serious violations of international
humanitarian law and Sierra Leonean law committed in the territory of Sierra Leone since November 30,
1996.

Among the stipulations of the Lomé Accord was a provision for the full pardon of the members of the
RUF with respect to anything done by them in pursuit of their objectives as members of that
organization since the conflict began.

In the Lomé Accord case, the Defence argued that the Accord created an internationally
binding obligation not to prosecute the beneficiaries of the amnesty provided therein, citing, among
other things, the participation of foreign dignitaries and international organizations in the finalization of
that agreement. The Special Court, however, rejected this argument, ruling that the Lome Accord is not
a treaty and that it can only create binding obligations and rights between the parties in municipal law,
not in international law. Hence, the Special Court held, it is ineffective in depriving an international court
like it of jurisdiction.

"37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy to assume
and to argue with some degree of plausibility, as Defence counsel for the defendants seem to have
done, that the mere fact that in addition to the parties to the conflict, the document formalizing the
settlement is signed by foreign heads of state or their representatives and representatives of
international organizations, means the agreement of the parties is internationalized so as to create
obligations in international law.

xxxx
40. Almost every conflict resolution will involve the parties to the conflict and the mediator or facilitator
of the settlement, or persons or bodies under whose auspices the settlement took place but who are not
at all parties to the conflict, are not contracting parties and who do not claim any obligation from the
contracting parties or incur any obligation from the settlement.

41. In this case, the parties to the conflict are the lawful authority of the State and the RUF which has no
status of statehood and is to all intents and purposes a faction within the state. The non-contracting
signatories of the Lomé Agreement were moral guarantors of the principle that, in the terms of Article
XXXIV of the Agreement, "this peace agreement is implemented with integrity and in good faith by both
parties". The moral guarantors assumed no legal obligation. It is recalled that the UN by its
representative appended, presumably for avoidance of doubt, an understanding of the extent of the
agreement to be implemented as not including certain international crimes.

42. An international agreement in the nature of a treaty must create rights and obligations regulated by
international law so that a breach of its terms will be a breach determined under international law
which will also provide principle means of enforcement. The Lomé Agreement created neither rights nor
obligations capable of being regulated by international law. An agreement such as the Lomé Agreement
which brings to an end an internal armed conflict no doubt creates a factual situation of restoration of
peace that the international community acting through the Security Council may take note of. That,
however, will not convert it to an international agreement which creates an obligation enforceable in
international, as distinguished from municipal, law. A breach of the terms of such a peace agreement
resulting in resumption of internal armed conflict or creating a threat to peace in the determination of
the Security Council may indicate a reversal of the factual situation of peace to be visited with possible
legal consequences arising from the new situation of conflict created. Such consequences such as action
by the Security Council pursuant to Chapter VII arise from the situation and not from the agreement, nor
from the obligation imposed by it. Such action cannot be regarded as a remedy for the breach. A peace
agreement which settles an internal armed conflict cannot be ascribed the same status as one which
settles an international armed conflict which, essentially, must be between two or more warring States.
The Lomé Agreement cannot be characterised as an international instrument. x x x" (Emphasis, italics
and underscoring supplied)

Similarly, that the MOA-AD would have been signed by representatives of States and international
organizations not parties to the Agreement would not have sufficed to vest in it a binding character
under international law.

In another vein, concern has been raised that the MOA-AD would amount to a unilateral declaration of
the Philippine State, binding under international law, that it would comply with all the stipulations
stated therein, with the result that it would have to amend its Constitution accordingly regardless of the
true will of the people. Cited as authority for this view is Australia v. France,181 also known as
the Nuclear Tests Case, decided by the International Court of Justice (ICJ).

In the Nuclear Tests Case, Australia challenged before the ICJ the legality of France's nuclear tests in the
South Pacific. France refused to appear in the case, but public statements from its President, and similar
statements from other French officials including its Minister of Defence, that its 1974 series of
atmospheric tests would be its last, persuaded the ICJ to dismiss the case.182 Those statements, the ICJ
held, amounted to a legal undertaking addressed to the international community, which required no
acceptance from other States for it to become effective.
Essential to the ICJ ruling is its finding that the French government intended to be bound to the
international community in issuing its public statements, viz:

43. It is well recognized that declarations made by way of unilateral acts, concerning legal or factual
situations, may have the effect of creating legal obligations. Declarations of this kind may be, and often
are, very specific. When it is the intention of the State making the declaration that it should become
bound according to its terms, that intention confers on the declaration the character of a legal
undertaking, the State being thenceforth legally required to follow a course of conduct consistent with
the declaration. An undertaking of this kind, if given publicly, and with an intent to be bound, even
though not made within the context of international negotiations, is binding. In these circumstances,
nothing in the nature of a quid pro quo nor any subsequent acceptance of the declaration, nor even any
reply or reaction from other States, is required for the declaration to take effect, since such a
requirement would be inconsistent with the strictly unilateral nature of the juridical act by which the
pronouncement by the State was made.

44. Of course, not all unilateral acts imply obligation; but a State may choose to take up a certain
position in relation to a particular matter with the intention of being bound-the intention is to be
ascertained by interpretation of the act. When States make statements by which their freedom of action
is to be limited, a restrictive interpretation is called for.

xxxx

51. In announcing that the 1974 series of atmospheric tests would be the last, the French Government
conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests.
It was bound to assume that other States might take note of these statements and rely on their being
effective. The validity of these statements and their legal consequences must be considered within the
general framework of the security of international intercourse, and the confidence and trust which are
so essential in the relations among States. It is from the actual substance of these statements, and from
the circumstances attending their making, that the legal implications of the unilateral act must be
deduced. The objects of these statements are clear and they were addressed to the international
community as a whole, and the Court holds that they constitute an undertaking possessing legal
effect. The Court considers *270 that the President of the Republic, in deciding upon the effective
cessation of atmospheric tests, gave an undertaking to the international community to which his words
were addressed. x x x (Emphasis and underscoring supplied)

As gathered from the above-quoted ruling of the ICJ, public statements of a state representative may be
construed as a unilateral declaration only when the following conditions are present: the statements
were clearly addressed to the international community, the state intended to be bound to that
community by its statements, and that not to give legal effect to those statements would be detrimental
to the security of international intercourse. Plainly, unilateral declarations arise only in peculiar
circumstances.

The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by the
ICJ entitled Burkina Faso v. Mali,183 also known as the Case Concerning the Frontier Dispute. The public
declaration subject of that case was a statement made by the President of Mali, in an interview by a
foreign press agency, that Mali would abide by the decision to be issued by a commission of the
Organization of African Unity on a frontier dispute then pending between Mali and Burkina Faso.
Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's President was not a unilateral
act with legal implications. It clarified that its ruling in the Nuclear Tests case rested on the peculiar
circumstances surrounding the French declaration subject thereof, to wit:

40. In order to assess the intentions of the author of a unilateral act, account must be taken of all the
factual circumstances in which the act occurred. For example, in the Nuclear Tests cases, the Court took
the view that since the applicant States were not the only ones concerned at the possible continuance of
atmospheric testing by the French Government, that Government's unilateral declarations had
‘conveyed to the world at large, including the Applicant, its intention effectively to terminate these
tests‘ (I.C.J. Reports 1974, p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those
cases, the French Government could not express an intention to be bound otherwise than by unilateral
declarations. It is difficult to see how it could have accepted the terms of a negotiated solution with each
of the applicants without thereby jeopardizing its contention that its conduct was lawful. The
circumstances of the present case are radically different. Here, there was nothing to hinder the Parties
from manifesting an intention to accept the binding character of the conclusions of the Organization of
African Unity Mediation Commission by the normal method: a formal agreement on the basis of
reciprocity. Since no agreement of this kind was concluded between the Parties, the Chamber finds that
there are no grounds to interpret the declaration made by Mali's head of State on 11 April 1975 as a
unilateral act with legal implications in regard to the present case. (Emphasis and underscoring supplied)

Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral
declaration on the part of the Philippine State to the international community. The Philippine panel did
not draft the same with the clear intention of being bound thereby to the international community as a
whole or to any State, but only to the MILF. While there were States and international organizations
involved, one way or another, in the negotiation and projected signing of the MOA-AD, they participated
merely as witnesses or, in the case of Malaysia, as facilitator. As held in the Lomé Accord case, the mere
fact that in addition to the parties to the conflict, the peace settlement is signed by representatives of
states and international organizations does not mean that the agreement is internationalized so as to
create obligations in international law.

Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to such
commitments would not be detrimental to the security of international intercourse - to the trust and
confidence essential in the relations among States.

In one important respect, the circumstances surrounding the MOA-AD are closer to that of Burkina
Faso wherein, as already discussed, the Mali President's statement was not held to be a binding
unilateral declaration by the ICJ. As in that case, there was also nothing to hinder the Philippine panel,
had it really been its intention to be bound to other States, to manifest that intention by formal
agreement. Here, that formal agreement would have come about by the inclusion in the MOA-AD of a
clear commitment to be legally bound to the international community, not just the MILF, and by an
equally clear indication that the signatures of the participating states-representatives would constitute
an acceptance of that commitment. Entering into such a formal agreement would not have resulted in a
loss of face for the Philippine government before the international community, which was one of the
difficulties that prevented the French Government from entering into a formal agreement with other
countries. That the Philippine panel did not enter into such a formal agreement suggests that it had no
intention to be bound to the international community. On that ground, the MOA-AD may not
be considered a unilateral declaration under international law.

The MOA-AD not being a document that can bind the Philippines under international law
notwithstanding, respondents' almost consummated act of guaranteeing amendments to the legal
framework is, by itself, sufficient to constitute grave abuse of discretion. The grave abuse lies not in the
fact that they considered, as a solution to the Moro Problem, the creation of a state within a state, but
in their brazen willingness to guarantee that Congress and the sovereign Filipino people would give their
imprimatur to their solution. Upholding such an act would amount to authorizing a usurpation of the
constituent powers vested only in Congress, a Constitutional Convention, or the people themselves
through the process of initiative, for the only way that the Executive can ensure the outcome of the
amendment process is through an undue influence or interference with that process.

The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory to
the Moros for the sake of peace, for it can change the Constitution in any it wants, so long as the change
is not inconsistent with what, in international law, is known as Jus Cogens.184 Respondents, however,
may not preempt it in that decision.

SUMMARY

The petitions are ripe for adjudication. The failure of respondents to consult the local government units
or communities affected constitutes a departure by respondents from their mandate under E.O. No. 3.
Moreover, respondents exceeded their authority by the mere act of guaranteeing amendments to the
Constitution. Any alleged violation of the Constitution by any branch of government is a proper matter
for judicial review.

As the petitions involve constitutional issues which are of paramount public interest or of
transcendental importance, the Court grants the petitioners, petitioners-in-intervention and intervening
respondents the requisite locus standi in keeping with the liberal stance adopted in David v. Macapagal-
Arroyo.

Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present
petitions provide an exception to the "moot and academic" principle in view of (a) the grave violation of
the Constitution involved; (b) the exceptional character of the situation and paramount public interest;
(c) the need to formulate controlling principles to guide the bench, the bar, and the public; and (d) the
fact that the case is capable of repetition yet evading review.

The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF Tripoli
Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the present
MOA-AD can be renegotiated or another one drawn up that could contain similar or significantly
dissimilar provisions compared to the original.

The Court, however, finds that the prayers for mandamus have been rendered moot in view of the
respondents' action in providing the Court and the petitioners with the official copy of the final draft of
the MOA-AD and its annexes.
The people's right to information on matters of public concern under Sec. 7, Article III of the Constitution
is in splendid symmetry with the state policy of full public disclosure of all its transactions involving
public interest under Sec. 28, Article II of the Constitution. The right to information guarantees the right
of the people to demand information, while Section 28 recognizes the duty of officialdom to give
information even if nobody demands. The complete and effective exercise of the right to information
necessitates that its complementary provision on public disclosure derive the same self-executory
nature, subject only to reasonable safeguards or limitations as may be provided by law.

The contents of the MOA-AD is a matter of paramount public concern involving public interest in the
highest order. In declaring that the right to information contemplates steps and negotiations leading to
the consummation of the contract, jurisprudence finds no distinction as to the executory nature or
commercial character of the agreement.

An essential element of these twin freedoms is to keep a continuing dialogue or process of

communication between the government and the people. Corollary to these twin rights is the design for
feedback mechanisms. The right to public consultation was envisioned to be a species of these public
rights.

At least three pertinent laws animate these constitutional imperatives and justify the exercise of the
people's right to be consulted on relevant matters relating to the peace agenda.

One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and local
levels and for a principal forum for consensus-building. In fact, it is the duty of the Presidential Adviser
on the Peace Process to conduct regular dialogues to seek relevant information, comments, advice, and
recommendations from peace partners and concerned sectors of society.

Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to
conduct consultations before any project or program critical to the environment and human ecology
including those that may call for the eviction of a particular group of people residing in such locality, is
implemented therein. The MOA-AD is one peculiar program that unequivocally and unilaterally vests
ownership of a vast territory to the Bangsamoro people, which could pervasively and drastically result to
the diaspora or displacement of a great number of inhabitants from their total environment.

Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut
procedure for the recognition and delineation of ancestral domain, which entails, among other things,
the observance of the free and prior informed consent of the Indigenous Cultural
Communities/Indigenous Peoples. Notably, the statute does not grant the Executive Department or any
government agency the power to delineate and recognize an ancestral domain claim by mere
agreement or compromise.

The invocation of the doctrine of executive privilege as a defense to the general right to information or
the specific right to consultation is untenable. The various explicit legal provisions fly in the face of
executive secrecy. In any event, respondents effectively waived such defense after it unconditionally
disclosed the official copies of the final draft of the MOA-AD, for judicial compliance and public scrutiny.

In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he
failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No. 7160,
and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and crafted runs
contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive,
arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and a virtual refusal
to perform the duty enjoined.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific
provisions but the very concept underlying them, namely, the associative relationship envisioned
between the GRP and the BJE, are unconstitutional, for the concept presupposes that the associated
entity is a state and implies that the same is on its way to independence.

While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present
legal framework will not be effective until that framework is amended, the same does not cure its
defect. The inclusion of provisions in the MOA-AD establishing an associative relationship between the
BJE and the Central Government is, itself, a violation of the Memorandum of Instructions From The
President dated March 1, 2001, addressed to the government peace panel. Moreover, as the clause is
worded, it virtually guarantees that the necessary amendments to the Constitution and the laws will
eventually be put in place. Neither the GRP Peace Panel nor the President herself is authorized to make
such a guarantee. Upholding such an act would amount to authorizing a usurpation of the constituent
powers vested only in Congress, a Constitutional Convention, or the people themselves through the
process of initiative, for the only way that the Executive can ensure the outcome of the amendment
process is through an undue influence or interference with that process.

While the MOA-AD would not amount to an international agreement or unilateral declaration binding
on the Philippines under international law, respondents' act of guaranteeing amendments is, by itself,
already a constitutional violation that renders the MOA-AD fatally defective.

WHEREFORE, respondents' motion to dismiss is DENIED. The main and intervening petitions are GIVEN
DUE COURSE and hereby GRANTED.

The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement on
Peace of 2001 is declared contrary to law and the Constitution.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO

Associate Justice Associate Justice

ANTONIO T. CARPIO MA. ALICIA AUSTRIA-MARTINEZ

 Associate Justice Associate Justice

RENATO C. CORONA ADOLFO S. AZCUNA

Associate Justice Associate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO

Associate Justice Associate Justice

PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

RUBEN T. REYES TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

ARTURO D. BRION
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the
above Decision were reached in consultation before the case was assigned to the writer of the opinion
of the Court.

REYNATO S. PUNO
Chief Justice

Separate Concurring Opinion - C.J. Puno, J. Ynares-Santiago, J. Carpio

Separate Concurring and Dissenting Opinion - J. Leonardo-De Castro, J. Brion
Separate Opinion - J. Azcuna, J. Tinga, J. Chico-Nazario, J. Reyes
Dissenting Opinion - J. Velasco, Jr., J. Nachura

Footnotes

1 Eric Gutierrez and Abdulwahab Guialal, The Unfinished Jihad: The Moro Islamic Liberation Front and
Peace in Mindanao in Rebels, Warlords and Ulama: A Reader on Muslim Separatism and the War in
Southern Philippines 275 (1999).

2 Memorandum of Respondents dated September 24, 2008, p. 10.

3 Memorandum of Respondents dated September 24, 2008, pp. 10-11.

4 Vide Salah Jubair, The Long Road to Peace: Inside the GRP-MILF Peace Process 35-36 (2007).

5 Memorandum of Respondents dated September 24, 2008, p. 12.

6 Vide Salah Jubair, The Long Road to Peace: Inside the GRP-MILF Peace Process 40-41 (2007).

7 Composed of its Chairperson, Sec. Rodolfo Garcia, and members, Atty. Leah Armamento, Atty. Sedfrey
Candelaria, with Mark Ryan Sullivan as Secretariat head.

8 Represented by Governor Jesus Sacdalan and/or Vice-Governor Emmanuel Piñol.

9 Rollo (G.R. No. 183591), pp. 3-33.

10 Supplement to Petition (with motion for leave) of August 11, 2008, rollo (G.R. No. 183591), pp. 143-
162.

11 Rollo (G.R. No. 183752), pp. 3-28.

12 Represented by Mayor Celso L. Lobregat.

13 Rollo (G.R. No. 183591), pp. 132-135; rollo (G.R. No. 183752), pp. 68-71.

14 Rollo (G.R. No. 183591), pp. 130-131; rollo (G.R. No. 183752), pp. 66-67.

15 Rollo (G.R. No. 183752), pp. 173-246.

16 Represented by Mayor Lawrence Lluch Cruz.

17 Represented by Governor Rolando Yebes.

18 Namely, Seth Frederick Jaloslos, Fernando Cabigon, Jr., Uldarico Mejorada II, Edionar Zamoras, Edgar
Baguio, Cedric Adriatico, Felixberto Bolando, Joseph Brendo Ajero, Norbideiri Edding, Anecito Darunday,
Angelica Carreon, and Luzviminda Torrino.

19 Rollo (G.R. No. 183951), pp. 3-33.

20 Rollo (G.R. No. 183962), pp. 3- 20.

21 Represented by Mayor Cherrylyn Santos-Akbar.

22 Represented by Gov. Suharto Mangudadatu.

23 Represented by Mayor Noel Deano.

24 Rollo (G.R. No. 183591), pp. 451-453.

25 R.A. No. 6734, as amended by R.A. 9054 entitled An Act to Strengthen and Expand the organic act for
the Autonomous Region in Muslim Mindanao, Amending for the purpose republic act no. 6734, entitled
an act of providing for the autonomous region in muslim mindanao, as amended.

26 R.A. No. 8371, An act to recognize, protect and promote the rights of indigenous cultural
communities/indigenous peoples, creating a national commission on indigenous peoples, establishing
implementing mechanisms, appropriating funds therefor, and for other purposes, October 29, 1997.
27 Cesar Adib Majul, The General Nature of Islamic Law and its Application in the Philippines, lecture
delivered as part of the Ricardo Paras Lectures, a series jointly sponsored by the Commission on Bar
Integration of the Supreme Court, the Integrated Bar of the Philippines and the U.P. Law Center,
September 24, 1977.

28 Ibid., vide M.A. Muqtedar Khan Ph.D., immigrant American Muslims and the Moral Dilemmas of
Citizenship, http://www.islamfortoday.com/khan04.htm, visited on September 18, 2008, and Syed
Shahabuddin, Muslim World and the contemporary Ijma' on rules of governance -
ii, http://www.milligazette.com/Archives/2004/01-15May04-Print-Edition/0105200471.htm, visited on
September 18, 2008.

29 MOA-AD Terms of Reference.

30 MOA-AD, Concepts and Principles, par. 1.

31 A traditional Muslim historical account of the acts of Shariff Kabungsuwan is quoted by historian
Cesar Adib Majul in his book, Muslims in the Philippines (1973):

After a time it came to pass that Mamalu, who was the chief man next to Kabungsuwan, journeyed to
Cotabato. He found there that many of the people had ceased to regard the teachings of the Koran and
had fallen into evil ways. Mamamlu sent to Kabungsuwan word of these things.

Kabungsuwan with a portion of his warriors went from Malabang to Cotabato and found that the word
sent to him by Mamamlu was true. Then he assembled together all the people. Those of them, who had
done evilly and disregarded the teachings of the Koran thenceforth, he drove out of the town into the
hills, with their wives and children.

Those wicked one who were thus cast out were the beginnings of the tribes of the Tirurais and
Manobos, who live to the east of Cotabato in the country into which their evil forefathers were driven.
And even to this day they worship not God; neither do they obey the teachings of the Koran . . . But the
people of Kabungsuwan, who regarded the teachings of the Koran and lived in fear of God, prospered
and increased, and we Moros of today are their descendants. (Citation omitted, emphasis supplied).

32 Id., par. 2.

33 Id., par. 3.

34 Id., par. 4.

35 Francisco L. Gonzales, Sultans of a Violent Land, in Rebels, Warlords and Ulama: A Reader on Muslim
Separatism and the War in Southern Philippines 99, 103 (1999).

36 The Charter of the Assembly of First Nations, the leading advocacy group for the indigenous peoples
of Canada, adopted in 1985, begins thus:

"WE THE CHIEFS OF THE INDIAN FIRST NATIONS IN CANADA HAVING DECLARED:
THAT our peoples are the original peoples of this land having been put here by the Creator; x x x."

37 Id., par. 6.

38 MOA-AD, Territory, par. 1.

39 Id., par. 2(c).

40 Id., par. 2(d).

41 Id., par. 2(e).

42 Id., par. 2(f).

43 Id., par, 2(g)(1).

44 Id., par. 2(h).

45 Id., par. 2(i).

46 MOA-AD, Resources, par. 4.

47 Ibid.

48 Id., par. 5.

49 Id., par. 6.

50 Id., par. 7.

51 Id., par. 9.

52 MOA-AD, Governance, par. 3.

53 "IN WITNESS WHEREOF, the undersigned, being the representatives of the Parties[,] hereby affix their
signatures."

54 Vide 1987 Constitution, Article VIII, Section 1.

55 Vide Muskrat v. US, 219 US 346 (1911).

56 Flast v. Cohen, 88 S.Ct. 1942, 1950 (1968).

57 Didipio Earth Savers' Multi-Purpose Association, Incorporated (DESAMA) v. Gozun, G.R. No. 157882,
March 30, 2006, 485 SCRA 286.

58 Vide U.S. v. Muskrat, 219 U.S. 346, 357 (1902).

59 Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 427-428 (1998).

60 Francisco, Jr. v. House of Representatives, 460 Phil. 830, 901-902 (2003) (citation omitted).

61 Vide Warth v. Seldin, 422 US 490, 511 (1975).

62 Vide id. at 526.

63 Solicitor General's Comment to G.R. No. 183752, pp. 9-11.

64 MOA-AD, pp. 3-7, 10.

65 391 Phil. 43 (2000).

66 Id. at 107-108.

67 530 US 290 (2000).

68 Id. at 292.

69 505 U.S. 144 (1992).

70 Id. at 175.

71 Although only one petition is denominated a petition for certiorari, most petitions pray that the
MOA-AD be declared unconstitutional/null and void.

72 Vide Rules of Court, Rule 65, Secs. 1 and 2.

73 Vide Rules of Court, Rule 65, Sec. 3.

74 Tañada v. Angara, 338 Phil. 546, 575 (1997).

75 Entitled Defining Policy and Administrative Structure for Government's Peace Efforts which reaffirms
and reiterates Executive Order No. 125 of September 15, 1993.

76 E.O. No. 3, (2001), Sec. 1.

77 Vide Tañada v. Angara, supra note 74.

78 Baker v. Carr, 369 U.S. 186 (1962).

79 Vicente V. Mendoza , Judicial Review of Constitutional Questions 137 (2004).

80 Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 896 (2003).

81 David v. Macapagal-Arroyo, G.R. No. 171396, May 3, 2006, 489 SCRA 160, 223.

82 Kilosbayan, Inc. v. Morato, 320 Phil. 171 (1995).

83 Macasiano v. NHA, G.R. No. 107921, July 1, 1993, 224 SCRA 236.

84 Del Mar v. Phil. Amusement and Gaming Corp., 400 Phil. 307, 328-329 (2000) citing Phil. Constitution
Ass'n., Inc. v. Mathay, et al., 124 Phil. 890 (1966).

85 Vide NAACP v. Alabama, 357 U.S. 449 (1958).

86 Francisco, Jr. v. The House of Representatives, supra note 80.

87 Province of Batangas v. Romulo, G.R. No. 152774, May 27, 2004, 429 SCRA 736.

88 Firestone Ceramics, Inc. v. Court of Appeals, 372 Phil. 401 (1999) citing Gibson v. Judge Revilla, 180
Phil. 645 (1979).

89 Supra note 81.

90 Integrated Bar of the Phils. v. Hon. Zamora, 392 Phil. 618 (2000).

91 Tatad v. Secretary of Energy, 346 Phil. 321 (1997).

92 Vide Compliance of September 1, 2008 of respondents.

93 Vide Manifestation of September 4, 2008 of respondents.

94 Supra note 81.

95 Id. citing Province of Batangas v. Romulo, supra note 87.

96 Id. citing Lacson v. Perez, 410 Phil. 78 (2001).

97 Id. citing Province of Batangas v. Romulo, supra note 87.

98 Id. citing Albaña v. Comelec, 478 Phil. 941 (2004); Chief Supt. Acop v. Guingona Jr., 433 Phil. 62
(2002); SANLAKAS v. Executive Secretary Reyes, 466 Phil. 482 (2004).

99 US v. W.T. Grant Co., 345 U.S. 629 (1953); US v. Trans-Missouri Freight Assn, 166 U.S. 290, 308-310
(1897); Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 43 (1944); Gray v. Sanders, 372 U.S. 368, 376
(1963); Defunis v. Odegaard, 416 U.S. 312 (1974).

100 Supra note 87.

101 G.R. No. 178920, October 15, 2007, 536 SCRA 290.

102 Chavez v. PCGG, 366 Phil. 863, 871 (1999).

103 G.R. No. 178830, July 14, 2008.

104 Supra note 98.

105 Ortega v. Quezon City Government, G.R. No. 161400, September 2, 2005, 469 SCRA 388.

106 Alunan III v. Mirasol, 342 Phil. 476 (1997); Viola v. Alunan III, 343 Phil. 184 (1997); Chief
Superintendent Acop v. Guingona, Jr., supra note 98; Roble Arrastre, Inc. v. Villaflor, G.R. No. 128509,
August 22, 2006, 499 SCRA 434, 447.

107 Constitution, Article III, Sec. 7.

108 80 Phil. 383 (1948).

109 Legaspi v. Civil Service Commission, G.R. No. L-72119, May 29, 1987, 150 SCRA 530.

110 162 Phil. 868 (1976).

111 Baldoza v. Dimaano, supra at 876.

112 Legaspi v. Civil Service Commission, supra note 109.

113 Chavez v. PCGG, 360 Phil 133, 164 (1998).

114 In Legaspi v. Civil Service Commission, supra note 109 at 541, it was held that:

In determining whether or not a particular information is of public concern there is no rigid test which
can be applied. `Public concern' like `public interest' is a term that eludes exact definition. Both terms
embrace a broad spectrum of subjects which the public may want to know, either because these directly
affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen. In
the final analysis, it is for the courts to determine on a case by case basis whether the matter at issue is
of interest or importance, as it relates to or affects the public.

115 Respondents' Comment of August 4, 2008, p. 9.

116 Subido v. Ozaeta, supra note 108.

117 Tañada, et al. v. Hon. Tuvera, et al., 220 Phil. 422 (1985); Tañada, v. Hon. Tuvera, 230 Phil. 528
(1986).

118 Legaspi v. Civil Service Commission, supra note 109.

119 Valmonte v. Belmonte, Jr., G.R. No. 74930, February 13, 1989, 170 SCRA 256.

120 Chavez v. PCGG, supra note 113; Chavez v. PCGG, supra note 102.

121 Bantay Republic Act or BA-RA 7941 v. Commission on Elections, G.R. 177271, May 4, 2007, 523 SCRA
1.

122 Chavez v. Public Estates Authority, 433 Phil. 506, 532-533 (2002).

123 Vide V Record, Constitutional Commission 26-28 (September 24, 1986) which is replete with such
descriptive phrase used by Commissioner Blas Ople.

124 Constitution, Article II, Sec. 28.

125 Bernas, Joaquin, The 1987 Constitution of the Republic of the Philippines: A Commentary 100
(2003).

126 Vide Bernas, Joaquin, The Intent of the 1986 Constitution Writers 155 (1995).

127 Vide Chavez v. Public Estates Authority, supra note 122.

128 V Record, Constitutional Commission 25 (September 24, 1986).

129 V Record, Constitutional Commission 28-29 (September 24, 1986). The phrase "safeguards on
national interest" that may be provided by law was subsequently replaced by "reasonable conditions,"
as proposed by Commissioner Davide [vide V Record, Constitutional Commission 30 (September 24,
1986)].

130 In Chavez v. National Housing Authority, G.R. No. 164527, August 15, 2007, 530 SCRA 235, 331, the
Court stated:

x x x The duty to disclose covers only transactions involving public interest, while the duty to allow
access has a broader scope of information which embraces not only transactions involving public
interest, but any matter contained in official communications and public documents of the government
agency. (Underscoring supplied)

131 Valmonte v. Belmonte, Jr., supra note 119.

132 V Record, Constitutional Commission 28, 30 (September 24, 1986).

133 Supra note 55.

134 Executive Order No. 3 (2001), Sec. 3 (a).

135 Executive Order No. 3 (2001), Sec. 4 (b).

136 Respondents' Memorandum of September 24, 2008, p. 44.

137 Executive Order No. 3 (2001), Sec. 5 (b), par. 6.

138 Executive Order No. 3 (2001), Sec. 8, see also Sec. 10.

139 Cf. Garcia v. Board of Investments, G.R. No. 88637, September 7, 1989, 177 SCRA 374, 382-384
where it was held that the Omnibus Investment Code of 1987 mandates the holding of consultations
with affected communities, whenever necessary, on the acceptability of locating the registered
enterprise within the community.

140 In their Memorandum, respondents made allegations purporting to show that consultations were
conducted on August 30, 2001 in Marawi City and Iligan City, on September 20, 2001 in Midsayap,
Cotabato, and on January 18-19, 2002 in Metro Manila. (Memorandum of September 24, 2008, p. 13)

141 Cf. Chavez v. Public Estates Authority, supra note 120.

142 Republic Act No. 7160, Sec. 2(c).

143 Republic Act No. 7160, Sec. 27.

144 416 Phil. 438 (2001).

145 Id.; vide Alvarez v. PICOP Resources, Inc., G.R. No. 162243, November 29, 2006, 508 SCRA 498;
Cf. Bangus Fry Fisherfolk v. Lanzanas, 453 Phil. 479 (2002).

146 Vide MOA-AD "Concepts and Principles," pars. 2 & 7 in relation to "Resources," par. 9 where vested
property rights are made subject to the cancellation, modification and review by the Bangsamoro
Juridical Entity.

147 Republic Act No. 8371 or "The Indigenous Peoples Rights Act of 1997," Sec. 16.

148 Id., Sec. 3 (g), Chapter VIII, inter alia.

149 Tañada v. Tuvera, No. L-63915, December 29, 1986, 146 SCRA 446, 456.

150 C.I. Keitner and W.M. Reisman, Free Association: The United States Experience, 39 Tex. Int'l L.J. 1
(2003).

151 "The former Trust Territory of the Pacific Islands is made up of the Caroline Islands, the Marshall
Islands, and the Northern Mariana Islands, which extend east of the Philippines and northeast of
Indonesia in the North Pacific Ocean." (Ibid.)

152 H. Hills, Free Association for Micronesia and the Marshall islands: A Political Status Model, 27 U.
Haw. L. Rev. 1 (2004).

153 Henkin, et al., International Law: Cases and Materials, 2nd ed., 274 (1987).

154 Convention on Rights and Duties of States, Dec. 26, 1933, 49 Stat. 3097, 165 L.N.T.S. 19.
155 G.R. No. 158088, July 6, 2005, 462 SCRA 622, 632.

156 An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao,
Amending for the purpose Republic Act No. 6734, Entitled ‘An Act Providing for the Autonomous Region
in Muslim Mindanao,' as Amended, March 31, 2001.

157 An Act To Recognize, Protect And Promote The Rights Of Indigenous Cultural
Communities/Indigenous Peoples, Creating A National Commission On Indigenous Peoples, Establishing
Implementing Mechanisms, Appropriating Funds Therefor, And For Other Purposes, October 29, 1997.

158 90 Phil. 70, 73-74 (1951).

159 177 Phil. 160, 178-179 (1979).

160 2 S.C.R. 217 (1998).

161 999 U.N.T.S. 171 (March 23, 1976).

162 993 U.N.T.S. 3 (January 3, 1976).

163 League of Nations Official Journal, Special Supp. No. 3 (October 1920).

164 Lorie M. Graham, Resolving Indigenous Claims To Self-Determination, 10 ILSA J. Int'l & Comp. L. 385
(2004). Vide S. James Anaya, Superpower Attitudes Toward Indigenous Peoples And Group Rights, 93
Am. Soc'y Int'l L. Proc. 251 (1999): "In general, the term indigenous is used in association with groups
that maintain a continuity of cultural identity with historical communities that suffered some form of
colonial invasion, and that by virtue of that continuity of cultural identity continue to distinguish
themselves from others."

165 Catherine J. Iorns, Indigenous Peoples And Self Determination: Challenging State Sovereignty, 24
Case W. Res. J. Int'l L. 199 (1992).

166 Federico Lenzerini, "Sovereignty Revisited: International Law And Parallel Sovereignty Of Indigenous
Peoples," 42 Tex. Int'l L.J. 155 (2006). Vide Christopher J. Fromherz, Indigenous Peoples' Courts:
Egalitarian Juridical Pluralism, Self-Determination, And The United Nations Declaration On The Rights Of
Indigenous Peoples, 156 U. Pa. L. Rev. 1341 (2008): "While Australia and the United States made much
of the distinction between ‘self-government' and ‘self-determination' on September 13, 2007, the U.S.
statement to the UN on May 17, 2004, seems to use these two concepts interchangeably. And, indeed,
under the DRIP [Declaration on the Rights of Indigenous Peoples], all three terms should be considered
virtually synonymous. Self-determination under the DRIP means ‘internal self-determination' when read
in conjunction with Article 46, and ‘self-government,' articulated in Article 4, is the core of the ‘self-
determination.'"

167 Defining The Approach And Administrative Structure For Government's Comprehensive Peace
Efforts, September 15, 1993.

168 466 Phil. 482, 519-520 (2004).

169 Constitution, Article VII, Sec. 18.

170 Kirsti Samuels, Post-Conflict Peace-Building And Constitution-Making, 6 Chi. J. Int'l L. 663 (2006).
171 Christine Bell, Peace Agreements: Their Nature And Legal Status, 100 Am. J. Int'l L. 373 (2006).

172 Constitution, Article X, Sections 15-21.

173 III Record, Constitutional Commission, 180 (August 11, 1986).

174 165 Phil. 303 (1976).

175 Id. at 412.

176 Id. at 413.

177 G.R. No. 174153, October 25, 2006, 505 SCRA 160, 264-265.

178 Constitution, Art. VII, Sec. 5.

179 Article VI, Section 25 (1) of the Constitution states as follows: "The Congress may not increase the
appropriations recommended by the President for the operation of the Government as specified in the
budget. The form, content, and manner of preparation of the budget shall be prescribed by law."

180 Prosecutor v. Kallon and Kamara [Case No. SCSL-2004-15-AR72(E), SCSL-2004-16-AR72(E), March 13,

2004].

181 1974 I.C.J. 253, 1974 WL 3 (I.C.J.).

182 M. Janis and J. Noyes, International Law, Cases and Commentary, 3rd ed. 280 (2006).

183 1986 I.C.J. 554, 1986 WL 15621 (I.C.J.), December 22, 1986.

184 Planas v. COMELEC, 151 Phil. 217, 249 (1973).

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R No. 187167               August 16, 2011

PROF. MERLIN M. MAGALLONA, AKBAYAN PARTY-LIST REP. RISA HONTIVEROS, PROF. HARRY C. ROQUE,
JR., AND UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW STUDENTS, ALITHEA BARBARA ACAS,
VOLTAIRE ALFERES, CZARINA MAY ALTEZ, FRANCIS ALVIN ASILO, SHERYL BALOT, RUBY AMOR BARRACA,
JOSE JAVIER BAUTISTA, ROMINA BERNARDO, VALERIE PAGASA BUENAVENTURA, EDAN MARRI CAÑETE,
VANN ALLEN DELA CRUZ, RENE DELORINO, PAULYN MAY DUMAN, SHARON ESCOTO, RODRIGO FAJARDO
III, GIRLIE FERRER, RAOULLE OSEN FERRER, CARLA REGINA GREPO, ANNA MARIE CECILIA GO, IRISH KAY
KALAW, MARY ANN JOY LEE, MARIA LUISA MANALAYSAY, MIGUEL RAFAEL MUSNGI, MICHAEL OCAMPO,
JAKLYN HANNA PINEDA, WILLIAM RAGAMAT, MARICAR RAMOS, ENRIK FORT REVILLAS, JAMES MARK
TERRY RIDON, JOHANN FRANTZ RIVERA IV, CHRISTIAN RIVERO, DIANNE MARIE ROA, NICHOLAS
SANTIZO, MELISSA CHRISTINA SANTOS, CRISTINE MAE TABING, VANESSA ANNE TORNO, MARIA ESTER
VANGUARDIA, and MARCELINO VELOSO III, Petitioners,
vs.
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, HON. ALBERTO ROMULO, IN HIS
CAPACITY AS SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS, HON. ROLANDO ANDAYA, IN HIS
CAPACITY AS SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, HON. DIONY
VENTURA, IN HIS CAPACITY AS ADMINISTRATOR OF THE NATIONAL MAPPING & RESOURCE
INFORMATION AUTHORITY, and HON. HILARIO DAVIDE, JR., IN HIS CAPACITY AS REPRESENTATIVE OF
THE PERMANENT MISSION OF THE REPUBLIC OF THE PHILIPPINES TO THE UNITED
NATIONS, Respondents.

DECISION

CARPIO, J.:

The Case

This original action for the writs of certiorari and prohibition assails the constitutionality of Republic Act
No. 95221 (RA 9522) adjusting the country’s archipelagic baselines and classifying the baseline regime of
nearby territories.

The Antecedents

In 1961, Congress passed Republic Act No. 3046 (RA 3046)2 demarcating the maritime baselines of the
Philippines as an archipelagic State.3 This law followed the framing of the Convention on the Territorial
Sea and the Contiguous Zone in 1958 (UNCLOS I),4 codifying, among others, the sovereign right of States
parties over their "territorial sea," the breadth of which, however, was left undetermined. Attempts to
fill this void during the second round of negotiations in Geneva in 1960 (UNCLOS II) proved futile. Thus,
domestically, RA 3046 remained unchanged for nearly five decades, save for legislation passed in 1968
(Republic Act No. 5446 [RA 5446]) correcting typographical errors and reserving the drawing of baselines
around Sabah in North Borneo.
In March 2009, Congress amended RA 3046 by enacting RA 9522, the statute now under scrutiny. The
change was prompted by the need to make RA 3046 compliant with the terms of the United Nations
Convention on the Law of the Sea (UNCLOS III),5 which the Philippines ratified on 27 February
1984.6 Among others, UNCLOS III prescribes the water-land ratio, length, and contour of baselines of
archipelagic States like the Philippines7 and sets the deadline for the filing of application for the
extended continental shelf.8 Complying with these requirements, RA 9522 shortened one baseline,
optimized the location of some basepoints around the Philippine archipelago and classified adjacent
territories, namely, the Kalayaan Island Group (KIG) and the Scarborough Shoal, as "regimes of islands"
whose islands generate their own applicable maritime zones.

Petitioners, professors of law, law students and a legislator, in their respective capacities as "citizens,
taxpayers or x x x legislators,"9 as the case may be, assail the constitutionality of RA 9522 on two
principal grounds, namely: (1) RA 9522 reduces Philippine maritime territory, and logically, the reach of
the Philippine state’s sovereign power, in violation of Article 1 of the 1987 Constitution,10 embodying
the terms of the Treaty of Paris11 and ancillary treaties,12 and (2) RA 9522 opens the country’s waters
landward of the baselines to maritime passage by all vessels and aircrafts, undermining Philippine
sovereignty and national security, contravening the country’s nuclear-free policy, and damaging marine
resources, in violation of relevant constitutional provisions.13

In addition, petitioners contend that RA 9522’s treatment of the KIG as "regime of islands" not only
results in the loss of a large maritime area but also prejudices the livelihood of subsistence
fishermen.14 To buttress their argument of territorial diminution, petitioners facially attack RA 9522 for
what it excluded and included – its failure to reference either the Treaty of Paris or Sabah and its use of
UNCLOS III’s framework of regime of islands to determine the maritime zones of the KIG and the
Scarborough Shoal.

Commenting on the petition, respondent officials raised threshold issues questioning (1) the petition’s
compliance with the case or controversy requirement for judicial review grounded on petitioners’
alleged lack of locus standi and (2) the propriety of the writs of certiorari and prohibition to assail the
constitutionality of RA 9522. On the merits, respondents defended RA 9522 as the country’s compliance
with the terms of UNCLOS III, preserving Philippine territory over the KIG or Scarborough Shoal.
Respondents add that RA 9522 does not undermine the country’s security, environment and economic
interests or relinquish the Philippines’ claim over Sabah.

Respondents also question the normative force, under international law, of petitioners’ assertion that
what Spain ceded to the United States under the Treaty of Paris were the islands and all the
waters found within the boundaries of the rectangular area drawn under the Treaty of Paris.

We left unacted petitioners’ prayer for an injunctive writ.

The Issues

The petition raises the following issues:

1. Preliminarily –

1. Whether petitioners possess locus standi to bring this suit; and

2. Whether the writs of certiorari and prohibition are the proper remedies to assail the constitutionality
of RA 9522.

2. On the merits, whether RA 9522 is unconstitutional.

The Ruling of the Court

On the threshold issues, we hold that (1) petitioners possess locus standi to bring this suit as citizens and
(2) the writs of certiorari and prohibition are proper remedies to test the constitutionality of RA 9522.
On the merits, we find no basis to declare RA 9522 unconstitutional.

On the Threshold Issues

Petitioners Possess Locus
Standi as Citizens

Petitioners themselves undermine their assertion of locus standi as legislators and taxpayers because
the petition alleges neither infringement of legislative prerogative15 nor misuse of public
funds,16 occasioned by the passage and implementation of RA 9522. Nonetheless, we recognize
petitioners’ locus standi as citizens with constitutionally sufficient interest in the resolution of the merits
of the case which undoubtedly raises issues of national significance necessitating urgent resolution.
Indeed, owing to the peculiar nature of RA 9522, it is understandably difficult to find other litigants
possessing "a more direct and specific interest" to bring the suit, thus satisfying one of the requirements
for granting citizenship standing.17

The Writs of Certiorari and Prohibition

Are Proper Remedies to Test
the Constitutionality of Statutes

In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict observance
of the offices of the writs of certiorari and prohibition, noting that the writs cannot issue absent any
showing of grave abuse of discretion in the exercise of judicial, quasi-judicial or ministerial powers on
the part of respondents and resulting prejudice on the part of petitioners.18

Respondents’ submission holds true in ordinary civil proceedings. When this Court exercises its
constitutional power of judicial review, however, we have, by tradition, viewed the writs of certiorari
and prohibition as proper remedial vehicles to test the constitutionality of statutes,19 and indeed, of
acts of other branches of government.20 Issues of constitutional import are sometimes crafted out of
statutes which, while having no bearing on the personal interests of the petitioners, carry such
relevance in the life of this nation that the Court inevitably finds itself constrained to take cognizance of
the case and pass upon the issues raised, non-compliance with the letter of procedural rules
notwithstanding. The statute sought to be reviewed here is one such law.

RA 9522 is Not Unconstitutional

RA 9522 is a Statutory Tool
to Demarcate the Country’s
Maritime Zones and Continental
Shelf Under UNCLOS III, not to
Delineate Philippine Territory
Petitioners submit that RA 9522 "dismembers a large portion of the national territory"21 because it
discards the pre-UNCLOS III demarcation of Philippine territory under the Treaty of Paris and related
treaties, successively encoded in the definition of national territory under the 1935, 1973 and 1987
Constitutions. Petitioners theorize that this constitutional definition trumps any treaty or statutory
provision denying the Philippines sovereign control over waters, beyond the territorial sea recognized at
the time of the Treaty of Paris, that Spain supposedly ceded to the United States. Petitioners argue that
from the Treaty of Paris’ technical description, Philippine sovereignty over territorial waters extends
hundreds of nautical miles around the Philippine archipelago, embracing the rectangular area
delineated in the Treaty of Paris.22

Petitioners’ theory fails to persuade us.

UNCLOS III has nothing to do with the acquisition (or loss) of territory. It is a multilateral treaty
regulating, among others, sea-use rights over maritime zones (i.e., the territorial waters [12 nautical
miles from the baselines], contiguous zone [24 nautical miles from the baselines], exclusive economic
zone [200 nautical miles from the baselines]), and continental shelves that UNCLOS III
delimits.23 UNCLOS III was the culmination of decades-long negotiations among United Nations
members to codify norms regulating the conduct of States in the world’s oceans and submarine areas,
recognizing coastal and archipelagic States’ graduated authority over a limited span of waters and
submarine lands along their coasts.

On the other hand, baselines laws such as RA 9522 are enacted by UNCLOS III States parties to mark-out
specific basepoints along their coasts from which baselines are drawn, either straight or contoured, to
serve as geographic starting points to measure the breadth of the maritime zones and continental shelf.
Article 48 of UNCLOS III on archipelagic States like ours could not be any clearer:

Article 48. Measurement of the breadth of the territorial sea, the contiguous zone, the exclusive
economic zone and the continental shelf. – The breadth of the territorial sea, the contiguous zone, the
exclusive economic zone and the continental shelf shall be measured from archipelagic baselines drawn
in accordance with article 47. (Emphasis supplied)

Thus, baselines laws are nothing but statutory mechanisms for UNCLOS III States parties to delimit with
precision the extent of their maritime zones and continental shelves. In turn, this gives notice to the rest
of the international community of the scope of the maritime space and submarine areas within which
States parties exercise treaty-based rights, namely, the exercise of sovereignty over territorial waters
(Article 2), the jurisdiction to enforce customs, fiscal, immigration, and sanitation laws in the contiguous
zone (Article 33), and the right to exploit the living and non-living resources in the exclusive economic
zone (Article 56) and continental shelf (Article 77).

Even under petitioners’ theory that the Philippine territory embraces the islands and all the
waters within the rectangular area delimited in the Treaty of Paris, the baselines of the Philippines
would still have to be drawn in accordance with RA 9522 because this is the only way to draw the
baselines in conformity with UNCLOS III. The baselines cannot be drawn from the boundaries or other
portions of the rectangular area delineated in the Treaty of Paris, but from the "outermost islands and
drying reefs of the archipelago."24
UNCLOS III and its ancillary baselines laws play no role in the acquisition, enlargement or, as petitioners
claim, diminution of territory. Under traditional international law typology, States acquire (or
conversely, lose) territory through occupation, accretion, cession and prescription,25 not by executing
multilateral treaties on the regulations of sea-use rights or enacting statutes to comply with the treaty’s
terms to delimit maritime zones and continental shelves. Territorial claims to land features are outside
UNCLOS III, and are instead governed by the rules on general international law.26

RA 9522’s Use of the Framework

of Regime of Islands to Determine the
Maritime Zones of the KIG and the
Scarborough Shoal, not Inconsistent
with the Philippines’ Claim of Sovereignty
Over these Areas

Petitioners next submit that RA 9522’s use of UNCLOS III’s regime of islands framework to draw the
baselines, and to measure the breadth of the applicable maritime zones of the KIG, "weakens our
territorial claim" over that area.27 Petitioners add that the KIG’s (and Scarborough Shoal’s) exclusion
from the Philippine archipelagic baselines results in the loss of "about 15,000 square nautical miles of
territorial waters," prejudicing the livelihood of subsistence fishermen.28 A comparison of the
configuration of the baselines drawn under RA 3046 and RA 9522 and the extent of maritime space
encompassed by each law, coupled with a reading of the text of RA 9522 and its congressional
deliberations, vis-à-vis the Philippines’ obligations under UNCLOS III, belie this view.1avvphi1

The configuration of the baselines drawn under RA 3046 and RA 9522 shows that RA 9522 merely
followed the basepoints mapped by RA 3046, save for at least nine basepoints that RA 9522 skipped to
optimize the location of basepoints and adjust the length of one baseline (and thus comply with UNCLOS
III’s limitation on the maximum length of baselines). Under RA 3046, as under RA 9522, the KIG and the
Scarborough Shoal lie outside of the baselines drawn around the Philippine archipelago. This undeniable
cartographic fact takes the wind out of petitioners’ argument branding RA 9522 as a statutory
renunciation of the Philippines’ claim over the KIG, assuming that baselines are relevant for this
purpose.

Petitioners’ assertion of loss of "about 15,000 square nautical miles of territorial waters" under RA 9522
is similarly unfounded both in fact and law. On the contrary, RA 9522, by optimizing the location of
basepoints, increased the Philippines’ total maritime space (covering its internal waters, territorial sea
and exclusive economic zone) by 145,216 square nautical miles, as shown in the table below:29

Extent of maritime
area using RA 3046,
Extent of maritime
as amended, taking
area using RA 9522,
into account the
  taking into account
Treaty of Paris’
UNCLOS III (in square
delimitation (in
nautical miles)
square nautical
miles)
 Internal or
archipelagic
waters 166,858 171,435

Territorial Sea 274,136 32,106

Exclusive
Economic Zone   382,669

TOTAL 440,994 586,210

Thus, as the map below shows, the reach of the exclusive economic zone drawn under RA 9522 even
extends way beyond the waters covered by the rectangular demarcation under the Treaty of Paris. Of
course, where there are overlapping exclusive economic zones of opposite or adjacent States, there will
have to be a delineation of maritime boundaries in accordance with UNCLOS III.30

Further, petitioners’ argument that the KIG now lies outside Philippine territory because the baselines
that RA 9522 draws do not enclose the KIG is negated by RA 9522 itself. Section 2 of the law commits to
text the Philippines’ continued claim of sovereignty and jurisdiction over the KIG and the Scarborough
Shoal:

SEC. 2. The baselines in the following areas over which the Philippines likewise exercises sovereignty and
jurisdiction shall be determined as "Regime of Islands" under the Republic of the Philippines consistent
with Article 121 of the United Nations Convention on the Law of the Sea (UNCLOS):

a) The Kalayaan Island Group as constituted under Presidential Decree No. 1596 and

b) Bajo de Masinloc, also known as Scarborough Shoal. (Emphasis supplied)

Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as part of the Philippine
archipelago, adverse legal effects would have ensued. The Philippines would have committed a breach
of two provisions of UNCLOS III. First, Article 47 (3) of UNCLOS III requires that "[t]he drawing of such
baselines shall not depart to any appreciable extent from the general configuration of the archipelago."
Second, Article 47 (2) of UNCLOS III requires that "the length of the baselines shall not exceed 100
nautical miles," save for three per cent (3%) of the total number of baselines which can reach up to 125
nautical miles.31

Although the Philippines has consistently claimed sovereignty over the KIG32 and the Scarborough Shoal
for several decades, these outlying areas are located at an appreciable distance from the nearest
shoreline of the Philippine archipelago,33 such that any straight baseline loped around them from the
nearest basepoint will inevitably "depart to an appreciable extent from the general configuration of the
archipelago."

The principal sponsor of RA 9522 in the Senate, Senator Miriam Defensor-Santiago, took pains to
emphasize the foregoing during the Senate deliberations:
What we call the Kalayaan Island Group or what the rest of the world call[] the Spratlys and the
Scarborough Shoal are outside our archipelagic baseline because if we put them inside our baselines we
might be accused of violating the provision of international law which states: "The drawing of such
baseline shall not depart to any appreciable extent from the general configuration of the archipelago."
So sa loob ng ating baseline, dapat magkalapit ang mga islands. Dahil malayo ang Scarborough Shoal,
hindi natin masasabing malapit sila sa atin although we are still allowed by international law to claim
them as our own.

This is called contested islands outside our configuration. We see that our archipelago is defined by the
orange line which [we] call[] archipelagic baseline. Ngayon, tingnan ninyo ang maliit na circle doon sa
itaas, that is Scarborough Shoal, itong malaking circle sa ibaba, that is Kalayaan Group or the
Spratlys. Malayo na sila sa ating archipelago kaya kung ilihis pa natin ang dating archipelagic baselines
para lamang masama itong dalawang circles, hindi na sila magkalapit at baka hindi na tatanggapin ng
United Nations because of the rule that it should follow the natural configuration of the
archipelago.34 (Emphasis supplied)

Similarly, the length of one baseline that RA 3046 drew exceeded UNCLOS III’s limits.1avvphi1 The need
to shorten this baseline, and in addition, to optimize the location of basepoints using current maps,
became imperative as discussed by respondents:

[T]he amendment of the baselines law was necessary to enable the Philippines to draw the outer limits
of its maritime zones including the extended continental shelf in the manner provided by Article 47 of
[UNCLOS III]. As defined by R.A. 3046, as amended by R.A. 5446, the baselines suffer from some
technical deficiencies, to wit:

1. The length of the baseline across Moro Gulf (from Middle of 3 Rock Awash to Tongquil Point) is
140.06 nautical miles x x x. This exceeds the maximum length allowed under Article 47(2) of the
[UNCLOS III], which states that "The length of such baselines shall not exceed 100 nautical miles, except
that up to 3 per cent of the total number of baselines enclosing any archipelago may exceed that length,
up to a maximum length of 125 nautical miles."

2. The selection of basepoints is not optimal. At least 9 basepoints can be skipped or deleted from the
baselines system. This will enclose an additional 2,195 nautical miles of water.

3. Finally, the basepoints were drawn from maps existing in 1968, and not established by geodetic
survey methods. Accordingly, some of the points, particularly along the west coasts of Luzon down to
Palawan were later found to be located either inland or on water, not on low-water line and drying reefs
as prescribed by Article 47.35

Hence, far from surrendering the Philippines’ claim over the KIG and the Scarborough Shoal, Congress’
decision to classify the KIG and the Scarborough Shoal as "‘Regime[s] of Islands’ under the Republic of
the Philippines consistent with Article 121"36 of UNCLOS III manifests the Philippine State’s responsible
observance of its pacta sunt servanda obligation under UNCLOS III. Under Article 121 of UNCLOS III, any
"naturally formed area of land, surrounded by water, which is above water at high tide," such as
portions of the KIG, qualifies under the category of "regime of islands," whose islands generate their
own applicable maritime zones.37
Statutory Claim Over Sabah under
RA 5446 Retained

Petitioners’ argument for the invalidity of RA 9522 for its failure to textualize the Philippines’ claim over
Sabah in North Borneo is also untenable. Section 2 of RA 5446, which RA 9522 did not repeal, keeps
open the door for drawing the baselines of Sabah:

Section 2. The definition of the baselines of the territorial sea of the Philippine Archipelago as provided
in this Act is without prejudice to the delineation of the baselines of the territorial sea around the
territory of Sabah, situated in North Borneo, over which the Republic of the Philippines has acquired
dominion and sovereignty. (Emphasis supplied)

UNCLOS III and RA 9522 not

Incompatible with the Constitution’s
Delineation of Internal Waters

As their final argument against the validity of RA 9522, petitioners contend that the law
unconstitutionally "converts" internal waters into archipelagic waters, hence subjecting these waters to
the right of innocent and sea lanes passage under UNCLOS III, including overflight. Petitioners
extrapolate that these passage rights indubitably expose Philippine internal waters to nuclear and
maritime pollution hazards, in violation of the Constitution.38

Whether referred to as Philippine "internal waters" under Article I of the Constitution39 or as

"archipelagic waters" under UNCLOS III (Article 49 [1]), the Philippines exercises sovereignty over the
body of water lying landward of the baselines, including the air space over it and the submarine areas
underneath. UNCLOS III affirms this:

Article 49. Legal status of archipelagic waters, of the air space over archipelagic waters and of their bed
and subsoil. –

1. The sovereignty of an archipelagic State extends to the waters enclosed by the archipelagic

baselines drawn in accordance with article 47, described as archipelagic waters, regardless of their
depth or distance from the coast.

2. This sovereignty extends to the air space over the archipelagic waters, as well as to their bed and
subsoil, and the resources contained therein.

xxxx

4. The regime of archipelagic sea lanes passage established in this Part shall not in other respects affect
the status of the archipelagic waters, including the sea lanes, or the exercise by the archipelagic State of
its sovereignty over such waters and their air space, bed and subsoil, and the resources contained
therein. (Emphasis supplied)

The fact of sovereignty, however, does not preclude the operation of municipal and international law
norms subjecting the territorial sea or archipelagic waters to necessary, if not marginal, burdens in the
interest of maintaining unimpeded, expeditious international navigation, consistent with the
international law principle of freedom of navigation. Thus, domestically, the political branches of the
Philippine government, in the competent discharge of their constitutional powers, may pass legislation
designating routes within the archipelagic waters to regulate innocent and sea lanes passage.40 Indeed,
bills drawing nautical highways for sea lanes passage are now pending in Congress.41

In the absence of municipal legislation, international law norms, now codified in UNCLOS III, operate to
grant innocent passage rights over the territorial sea or archipelagic waters, subject to the treaty’s
limitations and conditions for their exercise.42 Significantly, the right of innocent passage is a customary
international law,43 thus automatically incorporated in the corpus of Philippine law.44 No modern State
can validly invoke its sovereignty to absolutely forbid innocent passage that is exercised in accordance
with customary international law without risking retaliatory measures from the international
community.

The fact that for archipelagic States, their archipelagic waters are subject to both the right of innocent
passage and sea lanes passage45 does not place them in lesser footing vis-à-vis continental coastal
States which are subject, in their territorial sea, to the right of innocent passage and the right of transit
passage through international straits. The imposition of these passage rights through archipelagic waters
under UNCLOS III was a concession by archipelagic States, in exchange for their right to claim all the
waters landward of their baselines, regardless of their depth or distance from the coast, as archipelagic
waters subject to their territorial sovereignty. More importantly, the recognition of archipelagic States’
archipelago and the waters enclosed by their baselines as one cohesive entity prevents the treatment of
their islands as separate islands under UNCLOS III.46 Separate islands generate their own maritime
zones, placing the waters between islands separated by more than 24 nautical miles beyond the States’
territorial sovereignty, subjecting these waters to the rights of other States under UNCLOS III.47

Petitioners’ invocation of non-executory constitutional provisions in Article II (Declaration of Principles

and State Policies)48 must also fail. Our present state of jurisprudence considers the provisions in Article
II as mere legislative guides, which, absent enabling legislation, "do not embody judicially enforceable
constitutional rights x x x."49 Article II provisions serve as guides in formulating and interpreting
implementing legislation, as well as in interpreting executory provisions of the Constitution.
Although Oposa v. Factoran50 treated the right to a healthful and balanced ecology under Section 16 of
Article II as an exception, the present petition lacks factual basis to substantiate the claimed
constitutional violation. The other provisions petitioners cite, relating to the protection of marine wealth
(Article XII, Section 2, paragraph 251 ) and subsistence fishermen (Article XIII, Section 752 ), are not
violated by RA 9522.

In fact, the demarcation of the baselines enables the Philippines to delimit its exclusive economic zone,
reserving solely to the Philippines the exploitation of all living and non-living resources within such zone.
Such a maritime delineation binds the international community since the delineation is in strict
observance of UNCLOS III. If the maritime delineation is contrary to UNCLOS III, the international
community will of course reject it and will refuse to be bound by it.

UNCLOS III favors States with a long coastline like the Philippines. UNCLOS III creates a sui
generis maritime space – the exclusive economic zone – in waters previously part of the high seas.
UNCLOS III grants new rights to coastal States to exclusively exploit the resources found within this zone
up to 200 nautical miles.53 UNCLOS III, however, preserves the traditional freedom of navigation of
other States that attached to this zone beyond the territorial sea before UNCLOS III.

RA 9522 and the Philippines’ Maritime Zones

Petitioners hold the view that, based on the permissive text of UNCLOS III, Congress was not bound to
pass RA 9522.54 We have looked at the relevant provision of UNCLOS III55 and we find petitioners’
reading plausible. Nevertheless, the prerogative of choosing this option belongs to Congress, not to this
Court. Moreover, the luxury of choosing this option comes at a very steep price. Absent an UNCLOS III
compliant baselines law, an archipelagic State like the Philippines will find itself devoid of internationally
acceptable baselines from where the breadth of its maritime zones and continental shelf is measured.
This is recipe for a two-fronted disaster: first, it sends an open invitation to the seafaring powers to
freely enter and exploit the resources in the waters and submarine areas around our archipelago;
and second, it weakens the country’s case in any international dispute over Philippine maritime space.
These are consequences Congress wisely avoided.

The enactment of UNCLOS III compliant baselines law for the Philippine archipelago and adjacent areas,
as embodied in RA 9522, allows an internationally-recognized delimitation of the breadth of the
Philippines’ maritime zones and continental shelf. RA 9522 is therefore a most vital step on the part of
the Philippines in safeguarding its maritime zones, consistent with the Constitution and our national
interest.

WHEREFORE, we DISMISS the petition.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

ARTURO D. BRION DIOSDADO M. PERALTA

Associate Justice Associate Justice

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ JOSE C. MENDOZA

Associate Justice Associate Justice
MARIA LOURDES P. A. SERENO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion of
the Court.

RENATO C. CORONA
Chief Justice

Footnotes

1 Entitled "An Act to Amend Certain Provisions of Republic Act No. 3046, as Amended by Republic Act
No. 5446, to Define the Archipelagic Baselines of the Philippines, and for Other Purposes."

2 Entitled "An Act to Define the Baselines of the Territorial Sea of the Philippines."

3 The third "Whereas Clause" of RA 3046 expresses the import of treating the Philippines as an
archipelagic State:

"WHEREAS, all the waters around, between, and connecting the various islands of the Philippine
archipelago, irrespective of their width or dimensions, have always been considered as necessary
appurtenances of the land territory, forming part of the inland waters of the Philippines."

4 One of the four conventions framed during the first United Nations Convention on the Law of the Sea
in Geneva, this treaty, excluding the Philippines, entered into force on 10 September 1964.

5 UNCLOS III entered into force on 16 November 1994.

6 The Philippines signed the treaty on 10 December 1982.

7 Article 47, paragraphs 1-3, provide:

1. An archipelagic State may draw straight archipelagic baselines joining the outermost points of the
outermost islands and drying reefs of the archipelago provided that within such baselines are included
the main islands and an area in which the ratio of the area of the water to the area of the land, including
atolls, is between 1 to 1 and 9 to 1.

2. The length of such baselines shall not exceed 100 nautical miles, except that up to 3 per cent of the
total number of baselines enclosing any archipelago may exceed that length, up to a maximum length of
125 nautical miles.

3. The drawing of such baselines shall not depart to any appreciable extent from the general
configuration of the archipelago. (Emphasis supplied)

xxxx
8 UNCLOS III entered into force on 16 November 1994. The deadline for the filing of application is
mandated in Article 4, Annex II: "Where a coastal State intends to establish, in accordance with article
76, the outer limits of its continental shelf beyond 200 nautical miles, it shall submit particulars of such
limits to the Commission along with supporting scientific and technical data as soon as possible but in
any case within 10 years of the entry into force of this Convention for that State. The coastal State shall
at the same time give the names of any Commission members who have provided it with scientific and
technical advice." (Underscoring supplied)

In a subsequent meeting, the States parties agreed that for States which became bound by the treaty
before 13 May 1999 (such as the Philippines) the ten-year period will be counted from that date. Thus,
RA 9522, which took effect on 27 March 2009, barely met the deadline.

9 Rollo, p. 34.

10 Which provides: "The national territory comprises the Philippine archipelago, with all the islands and
waters embraced therein, and all other territories over which the Philippines has sovereignty or
jurisdiction, consisting of its terrestrial, fluvial, and aerial domains, including its territorial sea, the
seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and
connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the
internal waters of the Philippines."

11 Entered into between the Unites States and Spain on 10 December 1898 following the conclusion of
the Spanish-American War. Under the terms of the treaty, Spain ceded to the United States "the
archipelago known as the Philippine Islands" lying within its technical description.

12 The Treaty of Washington, between Spain and the United States (7 November 1900), transferring to
the US the islands of Cagayan, Sulu, and Sibutu and the US-Great Britain Convention (2 January 1930)
demarcating boundary lines between the Philippines and North Borneo.

13 Article II, Section 7, Section 8, and Section 16.

14 Allegedly in violation of Article XII, Section 2, paragraph 2 and Article XIII, Section 7 of the
Constitution.

15 Kilosbayan, Inc. v. Morato, 320 Phil. 171, 186 (1995).

16 Pascual v. Secretary of Public Works, 110 Phil. 331 (1960); Sanidad v. COMELEC, 165 Phil. 303 (1976).

17 Francisco, Jr. v. House of Representatives, 460 Phil. 830, 899 (2003) citing Kilosbayan, Inc. v.
Guingona, Jr., G.R. No. 113375, 5 May 1994, 232 SCRA 110, 155-156 (1995) (Feliciano, J., concurring).
The two other factors are: "the character of funds or assets involved in the controversy and a clear
disregard of constitutional or statutory prohibition." Id.

18 . Rollo, pp. 144-147.

19 See e.g. Aquino III v. COMELEC, G.R. No. 189793, 7 April 2010, 617 SCRA 623 (dismissing a petition for
certiorari and prohibition assailing the constitutionality of Republic Act No. 9716, not for the impropriety
of remedy but for lack of merit); Aldaba v. COMELEC, G.R. No. 188078, 25 January 2010, 611 SCRA 137
(issuing the writ of prohibition to declare unconstitutional Republic Act No. 9591); Macalintal v.
COMELEC, 453 Phil. 586 (2003) (issuing the writs of certiorari and prohibition declaring unconstitutional
portions of Republic Act No. 9189).

20 See e.g. Neri v. Senate Committee on Accountability of Public Officers and Investigations, G.R. No.
180643, 25 March 2008, 549 SCRA 77 (granting a writ of certiorari against the Philippine Senate and
nullifying the Senate contempt order issued against petitioner).

21 Rollo, p. 31.

22 Respondents state in their Comment that petitioners’ theory "has not been accepted or recognized
by either the United States or Spain," the parties to the Treaty of Paris. Respondents add that "no State
is known to have supported this proposition." Rollo, p. 179.

23 UNCLOS III belongs to that larger corpus of international law of the sea, which petitioner Magallona
himself defined as "a body of treaty rules and customary norms governing the uses of the sea, the
exploitation of its resources, and the exercise of jurisdiction over maritime regimes. x x x x" (Merlin M.
Magallona, Primer on the Law of the Sea 1 [1997]) (Italicization supplied).

24 Following Article 47 (1) of UNCLOS III which provides:

An archipelagic State may draw straight archipelagic baselines joining the outermost points of
the outermost islands and drying reefs of the archipelago provided that within such baselines are
included the main islands and an area in which the ratio of the area of the water to the area of the land,
including atolls, is between 1 to 1 and 9 to 1. (Emphasis supplied)

25 Under the United Nations Charter, use of force is no longer a valid means of acquiring territory.

26 The last paragraph of the preamble of UNCLOS III states that "matters not regulated by this
Convention continue to be governed by the rules and principles of general international law."

27 Rollo, p. 51.

28 Id. at 51-52, 64-66.

29 Based on figures respondents submitted in their Comment (id. at 182).

30 Under Article 74.

31 See note 7.

32 Presidential Decree No. 1596 classifies the KIG as a municipality of Palawan.

33 KIG lies around 80 nautical miles west of Palawan while Scarborough Shoal is around 123 nautical
west of Zambales.

34 Journal, Senate 14th Congress 44th Session 1416 (27 January 2009).

35 Rollo, p. 159.

36 Section 2, RA 9522.

37 Article 121 provides: "Regime of islands. —

1. An island is a naturally formed area of land, surrounded by water, which is above water at high tide.

2. Except as provided for in paragraph 3, the territorial sea, the contiguous zone, the exclusive economic
zone and the continental shelf of an island are determined in accordance with the provisions of this
Convention applicable to other land territory.

3. Rocks which cannot sustain human habitation or economic life of their own shall have no exclusive
economic zone or continental shelf."

38 Rollo, pp. 56-57, 60-64.

39 Paragraph 2, Section 2, Article XII of the Constitution uses the term "archipelagic waters" separately
from "territorial sea." Under UNCLOS III, an archipelagic State may have internal waters – such as those
enclosed by closing lines across bays and mouths of rivers. See Article 50, UNCLOS III. Moreover, Article
8 (2) of UNCLOS III provides: "Where the establishment of a straight baseline in accordance with the
method set forth in article 7 has the effect of enclosing as internal waters areas which had not
previously been considered as such, a right of innocent passage as provided in this Convention shall exist
in those waters." (Emphasis supplied)

40 Mandated under Articles 52 and 53 of UNCLOS III:

Article 52. Right of innocent passage. —

1. Subject to article 53 and without prejudice to article 50, ships of all States enjoy the right of innocent
passage through archipelagic waters, in accordance with Part II, section 3.

2. The archipelagic State may, without discrimination in form or in fact among foreign ships, suspend
temporarily in specified areas of its archipelagic waters the innocent passage of foreign ships if such
suspension is essential for the protection of its security. Such suspension shall take effect only after
having been duly published. (Emphasis supplied)

Article 53. Right of archipelagic sea lanes passage. —

1. An archipelagic State may designate sea lanes and air routes thereabove, suitable for the continuous
and expeditious passage of foreign ships and aircraft through or over its archipelagic waters and the
adjacent territorial sea.

2. All ships and aircraft enjoy the right of archipelagic sea lanes passage in such sea lanes and air routes.

3. Archipelagic sea lanes passage means the exercise in accordance with this Convention of the rights of
navigation and overflight in the normal mode solely for the purpose of continuous, expeditious and
unobstructed transit between one part of the high seas or an exclusive economic zone and another part
of the high seas or an exclusive economic zone.

4. Such sea lanes and air routes shall traverse the archipelagic waters and the adjacent territorial sea
and shall include all normal passage routes used as routes for international navigation or overflight
through or over archipelagic waters and, within such routes, so far as ships are concerned, all normal
navigational channels, provided that duplication of routes of similar convenience between the same
entry and exit points shall not be necessary.
5. Such sea lanes and air routes shall be defined by a series of continuous axis lines from the entry points
of passage routes to the exit points. Ships and aircraft in archipelagic sea lanes passage shall not deviate
more than 25 nautical miles to either side of such axis lines during passage, provided that such ships and
aircraft shall not navigate closer to the coasts than 10 per cent of the distance between the nearest
points on islands bordering the sea lane.

6. An archipelagic State which designates sea lanes under this article may also prescribe traffic
separation schemes for the safe passage of ships through narrow channels in such sea lanes.

7. An archipelagic State may, when circumstances require, after giving due publicity thereto, substitute
other sea lanes or traffic separation schemes for any sea lanes or traffic separation schemes previously
designated or prescribed by it.

8. Such sea lanes and traffic separation schemes shall conform to generally accepted international
regulations.

9. In designating or substituting sea lanes or prescribing or substituting traffic separation schemes, an

archipelagic State shall refer proposals to the competent international organization with a view to their
adoption. The organization may adopt only such sea lanes and traffic separation schemes as may be
agreed with the archipelagic State, after which the archipelagic State may designate, prescribe or
substitute them.

10. The archipelagic State shall clearly indicate the axis of the sea lanes and the traffic separation
schemes designated or prescribed by it on charts to which due publicity shall be given.

11. Ships in archipelagic sea lanes passage shall respect applicable sea lanes and traffic separation
schemes established in accordance with this article.

12. If an archipelagic State does not designate sea lanes or air routes, the right of archipelagic sea lanes
passage may be exercised through the routes normally used for international navigation. (Emphasis
supplied)

41 Namely, House Bill No. 4153 and Senate Bill No. 2738, identically titled "AN ACT TO ESTABLISH THE
ARCHIPELAGIC SEA LANES IN THE PHILIPPINE ARCHIPELAGIC WATERS, PRESCRIBING THE RIGHTS AND
OBLIGATIONS OF FOREIGN SHIPS AND AIRCRAFTS EXERCISING THE RIGHT OF ARCHIPELAGIC SEA LANES
PASSAGE THROUGH THE ESTABLISHED ARCHIPELAGIC SEA LANES AND PROVIDING FOR THE ASSOCIATED
PROTECTIVE MEASURES THEREIN."

42 The relevant provision of UNCLOS III provides:

Article 17. Right of innocent passage. —

Subject to this Convention, ships of all States, whether coastal or land-locked, enjoy the right of
innocent passage through the territorial sea. (Emphasis supplied)

Article 19. Meaning of innocent passage. —

1. Passage is innocent so long as it is not prejudicial to the peace, good order or security of the coastal
State. Such passage shall take place in conformity with this Convention and with other rules of
international law.
2. Passage of a foreign ship shall be considered to be prejudicial to the peace, good order or security of
the coastal State if in the territorial sea it engages in any of the following activities:

(a) any threat or use of force against the sovereignty, territorial integrity or political independence of the
coastal State, or in any other manner in violation of the principles of international law embodied in the
Charter of the United Nations;

(b) any exercise or practice with weapons of any kind;

(c) any act aimed at collecting information to the prejudice of the defence or security of the coastal
State;

(d) any act of propaganda aimed at affecting the defence or security of the coastal State;

(e) the launching, landing or taking on board of any aircraft;

(f) the launching, landing or taking on board of any military device;

(g) the loading or unloading of any commodity, currency or person contrary to the customs, fiscal,
immigration or sanitary laws and regulations of the coastal State;

(h) any act of willful and serious pollution contrary to this Convention;

(i) any fishing activities;

(j) the carrying out of research or survey activities;

(k) any act aimed at interfering with any systems of communication or any other facilities or installations
of the coastal State;

(l) any other activity not having a direct bearing on passage

Article 21. Laws and regulations of the coastal State relating to innocent passage. —

1. The coastal State may adopt laws and regulations, in conformity with the provisions of this
Convention and other rules of international law, relating to innocent passage through the territorial sea,
in respect of all or any of the following:

(a) the safety of navigation and the regulation of maritime traffic;

(b) the protection of navigational aids and facilities and other facilities or installations;

(c) the protection of cables and pipelines;

(d) the conservation of the living resources of the sea;

(e) the prevention of infringement of the fisheries laws and regulations of the coastal State;

(f) the preservation of the environment of the coastal State and the prevention, reduction and control of
pollution thereof;

(g) marine scientific research and hydrographic surveys;

(h) the prevention of infringement of the customs, fiscal, immigration or sanitary laws and regulations of
the coastal State.

2. Such laws and regulations shall not apply to the design, construction, manning or equipment of
foreign ships unless they are giving effect to generally accepted international rules or standards.

3. The coastal State shall give due publicity to all such laws and regulations.

4. Foreign ships exercising the right of innocent passage through the territorial sea shall comply with all
such laws and regulations and all generally accepted international regulations relating to the prevention
of collisions at sea.

43 The right of innocent passage through the territorial sea applies only to ships and not to aircrafts
(Article 17, UNCLOS III). The right of innocent passage of aircrafts through the sovereign territory of a
State arises only under an international agreement. In contrast, the right of innocent passage through
archipelagic waters applies to both ships and aircrafts (Article 53 (12), UNCLOS III).

44 Following Section 2, Article II of the Constitution: "Section 2. The Philippines renounces war as an
instrument of national policy, 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." (Emphasis supplied)

45 "Archipelagic sea lanes passage is essentially the same as transit passage through straits" to which
the territorial sea of continental coastal State is subject. R.R. Churabill and A.V. Lowe, The Law of the Sea
127 (1999).

46 Falling under Article 121 of UNCLOS III (see note 37).

47 Within the exclusive economic zone, other States enjoy the following rights under UNCLOS III:

Article 58. Rights and duties of other States in the exclusive economic zone. —

1. In the exclusive economic zone, all States, whether coastal or land-locked, enjoy, subject to the
relevant provisions of this Convention, the freedoms referred to in article 87 of navigation and overflight
and of the laying of submarine cables and pipelines, and other internationally lawful uses of the sea
related to these freedoms, such as those associated with the operation of ships, aircraft and submarine
cables and pipelines, and compatible with the other provisions of this Convention.

2. Articles 88 to 115 and other pertinent rules of international law apply to the exclusive economic zone
in so far as they are not incompatible with this Part.

xxxx

Beyond the exclusive economic zone, other States enjoy the freedom of the high seas, defined under
UNCLOS III as follows:

Article 87. Freedom of the high seas. —

1. The high seas are open to all States, whether coastal or land-locked. Freedom of the high seas is
exercised under the conditions laid down by this Convention and by other rules of international law. It
comprises, inter alia, both for coastal and land-locked States:
(a) freedom of navigation;

(b) freedom of overflight;

(c) freedom to lay submarine cables and pipelines, subject to Part VI;

(d) freedom to construct artificial islands and other installations permitted under international law,
subject to Part VI;

(e) freedom of fishing, subject to the conditions laid down in section 2;

(f) freedom of scientific research, subject to Parts VI and XIII.

2. These freedoms shall be exercised by all States with due regard for the interests of other States in
their exercise of the freedom of the high seas, and also with due regard for the rights under this
Convention with respect to activities in the Area.

48 See note 13.

49 Kilosbayan, Inc. v. Morato, 316 Phil. 652, 698 (1995); Tañada v. Angara, 338 Phil. 546, 580-581 (1997).

50 G.R. No. 101083, 30 July 1993, 224 SCRA 792.

51 "The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens."

52 "The State shall protect the rights of subsistence fishermen, especially of local communities, to the
preferential use of the communal marine and fishing resources, both inland and offshore. It shall
provide support to such fishermen through appropriate technology and research, adequate financial,
production, and marketing assistance, and other services. The State shall also protect, develop, and
conserve such resources. The protection shall extend to offshore fishing grounds of subsistence
fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the
utilization of marine and fishing resources."

53 This can extend up to 350 nautical miles if the coastal State proves its right to claim an extended
continental shelf (see UNCLOS III, Article 76, paragraphs 4(a), 5 and 6, in relation to Article 77).

54 Rollo, pp. 67-69.

55 Article 47 (1) provides: "An archipelagic State may draw straight archipelagic baselines joining the
outermost points of the outermost islands and drying reefs of the archipelago provided that within such
baselines are included the main islands and an area in which the ratio of the area of the water to the
area of the land, including atolls, is between 1 to 1 and 9 to 1." (Emphasis supplied) in the Area.

The Lawphil Project - Arellano Law Foundation

CONCURRING OPINION
VELASCO, JR., J.:

I concur with the ponencia and add the following complementary arguments and observations:

A statute is a product of hard work and earnest studies of Congress to ensure that no constitutional
provision, prescription or concept is infringed. Withal, before a law, in an appropriate proceeding, is
nullified, an unequivocal breach of, or a clear conflict with, the Constitution must be demonstrated in
such a way as to leave no doubt in the mind of the Court.1 In the same token, if a law runs directly afoul
of the Constitution, the Court’s duty on the matter should be clear and simple: Pursuant to its judicial
power and as final arbiter of all legal questions,2 it should strike such law down, however laudable its
purpose/s might be and regardless of the deleterious effect such action may carry in its wake.

Challenged in these proceedings is the constitutionality of Republic Act (RA 9522) entitled "An Act to
Amend Certain Provisions of [RA] 3046, as Amended by [RA] 5446 to Define the Archipelagic Baselines
Of The Philippines and for Other Purposes." For perspective, RA 3046, "An Act to Define the Baselines of
the Territorial Sea of the Philippines, was enacted in 1961 to comply with the United Nations Convention
on the Law of the Sea (UNCLOS) I. Eight years later, RA 5446 was enacted to amend typographical errors
relating to coordinates in RA 3046. The latter law also added a provision asserting Philippine sovereignty
over Sabah.

As its title suggests, RA 9522 delineates archipelagic baselines of the country, amending in the process
the old baselines law, RA 3046. Everybody is agreed that RA 9522 was enacted in response to the
country’s commitment to conform to some 1982 Law of the Sea Convention (LOSC) or UNCLOS III
provisions to define new archipelagic baselines through legislation, the Philippines having signed3 and
eventually ratified4 this multilateral treaty. The Court can take judicial notice that RA 9522 was
registered and deposited with the UN on April 4, 2009.

As indicated in its Preamble,5 1982 LOSC aims, among other things, to establish, with due regard for the
sovereignty of all States, "a legal order for the seas and oceans which will facilitate international
communication, and will promote the peaceful uses of the seas and oceans." One of the measures to
attain the order adverted to is to have a rule on baselines. Of particular relevance to the Philippines, as
an archipelagic state, is Article 47 of UNCLOS III which deals with baselines:

1. An archipelagic State may draw straight archipelagic baselines joining the outermost points of the
outermost islands and drying reefs of the archipelago provided that within such baselines are included
the main islands and an area in which the ratio of the area of the water to the area of the land, including
atolls, is between 1 to 1 and 9 to 1.

2. The length of such baseline shall not exceed 100 nautical miles, except that up to 3 per cent of the
total number of baselines enclosing any archipelago may exceed that length, up to a maximum length of
125 nautical miles.

3. The drawing of such baselines shall not depart to any appreciable extent from the general
configuration of the archipelago.

xxxx
9. The archipelagic State shall give due publicity to such charts or lists of geographical co-ordinates and
shall deposit a copy of each such chart or list with the Secretary-General of the United
Nations.6 (Emphasis added.)

To obviate, however, the possibility that certain UNCLOS III baseline provisions would, in their
implementation, undermine its sovereign and/or jurisdictional interests over what it considers its
territory,7 the Philippines, when it signed UNCLOS III on December 10, 1982, made the following
"Declaration" to said treaty:

The Government of the Republic of the Philippines [GRP] hereby manifests that in signing the 1982
United Nations Convention on the Law of the Sea, it does so with the understandings embodied in this
declaration, made under the provisions of Article 310 of the Convention, to wit:

The signing of the Convention by the [GRP] shall not in any manner impair or prejudice the sovereign
rights of the [RP] under and arising from the Constitution of the Philippines;

Such signing shall not in any manner affect the sovereign rights of the [RP] as successor of the United
States of America [USA], under and arising out of the Treaty of Paris between Spain and the United
States of America of December 10, 1898, and the Treaty of Washington between the [USA] and Great
Britain of January 2, 1930;

xxxx

Such signing shall not in any manner impair or prejudice the sovereignty of the [RP] over any territory
over which it exercises sovereign authority, such as the Kalayaan Islands, and the waters appurtenant
thereto;

The Convention shall not be construed as amending in any manner any pertinent laws and Presidential
Decrees or Proclamations of the Republic of the Philippines. The [GRP] maintains and reserves the right
and authority to make any amendments to such laws, decrees or proclamations pursuant to the
provisions of the Philippine Constitution;

The provisions of the Convention on archipelagic passage through sea lanes do not nullify or impair the
sovereignty of the Philippines as an archipelagic state over the sea lanes and do not deprive it of
authority to enact legislation to protect its sovereignty independence and security;

The concept of archipelagic waters is similar to the concept of internal waters under the Constitution of
the Philippines, and removes straits connecting these waters with the economic zone or high sea from
the rights of foreign vessels to transit passage for international navigation.8 (Emphasis added.)

Petitioners challenge the constitutionality of RA 9522 on the principal ground that the law violates
Section 1, Article I of the 1987 Constitution on national territory which states:

Section 1. The national territory comprises the Philippine archipelago, with all the islands and waters
embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction,
consisting of its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the
subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting
the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal
waters of the Philippines. (Emphasis supplied.)
According to Fr. Joaquin Bernas, S.J., himself a member of the 1986 Constitutional Commission which
drafted the 1987 Constitution, the aforequoted Section 1 on national territory was "in substance a copy
of its 1973 counterpart."9 Art. I of the 1973 Constitution reads:

Section 1. The national territory comprises the Philippine archipelago, with all the islands and waters
embraced therein, and all other territories belonging to the Philippines by historic right or legal title,
including the territorial sea, the air space, the subsoil, the insular shelves, and other submarine areas
over which the Philippines has sovereignty or jurisdiction. The waters around, between, and connecting
the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal
waters of the Philippines. (Emphasis added.)

As may be noted both constitutions speak of the "Philippine archipelago," and, via the last sentence of
their respective provisions, assert the country’s adherence to the "archipelagic principle." Both
constitutions divide the national territory into two main groups: (1) the Philippine archipelago and (2)
other territories belonging to the Philippines. So what or where is Philippine archipelago contemplated
in the 1973 and 1987 Constitutions then? Fr. Bernas answers the poser in the following wise:

Article I of the 1987 Constitution cannot be fully understood without reference to Article I of the 1973
Constitution. x x x

xxxx

x x x To understand [the meaning of national territory as comprising the Philippine archipelago], one
must look into the evolution of [Art. I of the 1973 Constitution] from its first draft to its final form.

Section 1 of the first draft submitted by the Committee on National Territory almost literally reproduced
Article I of the 1935 Constitution x x x. Unlike the 1935 version, however, the draft designated the
Philippines not simply as the Philippines but as "the Philippine archipelago.10 In response to the
criticism that the definition was colonial in tone x x x, the second draft further designated the Philippine
archipelago, as the historic home of the Filipino people from its beginning.11

After debates x x x, the Committee reported out a final draft, which became the initially approved
version: "The national territory consists of the Philippine archipelago which is the ancestral home of the
Filipino people and which is composed of all the islands and waters embraced therein…"

What was the intent behind the designation of the Philippines as an "archipelago"? x x x Asked by
Delegate Roselller Lim (Zamboanga) where this archipelago was, Committee Chairman Quintero
answered that it was the area delineated in the Treaty of Paris. He said that objections to the colonial
implication of mentioning the Treaty of Paris was responsible for the omission of the express mention of
the Treaty of Paris.

Report No. 01 of the Committee on National Territory had in fact been explicit in its delineation of the
expanse of this archipelago. It said:

Now if we plot on a map the boundaries of this archipelago as set forth in the Treaty of Paris, a huge or
giant rectangle will emerge, measuring about 600 miles in width and 1,200 miles in length. Inside this
giant rectangle are the 7,100 islands comprising the Philippine Islands. From the east coast of Luzon to
the eastern boundary of this huge rectangle in the Pacific Ocean, there is a distance of over 300 miles.
From the west coast of Luzon to the western boundary of this giant rectangle in the China sea, there is a
distance of over 150 miles.

When the [US] Government enacted the Jones Law, the Hare-Hawes Cutting Law and the Tydings
McDuffie Law, it in reality announced to the whole world that it was turning over to the Government of
the Philippine Islands an archipelago (that is a big body of water studded with islands), the boundaries of
which archipelago are set forth in Article III of the Treaty of Paris. It also announced to the whole world
that the waters inside the giant rectangle belong to the Philippines – that they are not part of the high
seas.

When Spain signed the Treaty of Paris, in effect she announced to the whole world that she was ceding
to the [US] the Philippine archipelago x x x, that this archipelago was bounded by lines specified in the
treaty, and that the archipelago consisted of the huge body of water inside the boundaries and the
islands inside said boundaries.

The delineation of the extent of the Philippine archipelago must be understood in the context of the
modifications made both by the Treaty of Washington of November 7, 1900, and of the Convention of
January 12, 1930, in order to include the Islands of Sibutu and of Cagayan de Sulu and the Turtle and
Mangsee Islands. However, x x x the definition of the archipelago did not include the Batanes group[,
being] outside the boundaries of the Philippine archipelago as set forth in the Treaty of Paris. In literal
terms, therefore, the Batanes islands would come not under the Philippine archipelago but under the
phrase "all other territories belong to the Philippines."12 x x x (Emphasis added.)

From the foregoing discussions on the deliberations of the provisions on national territory, the following
conclusion is abundantly evident: the "Philippine archipelago" of the 1987 Constitution is the same
"Philippine archipelago" referred to in Art. I of the 1973 Constitution which in turn corresponds to the
territory defined and described in Art. 1 of the 1935 Constitution,13 which pertinently reads:

Section 1. The Philippines comprises all the territory ceded to the [US] by the Treaty of Paris concluded
between the [US] and Spain on the tenth day of December, [1898], the limits of which are set forth in
Article III of said treaty, together with all the islands in the treaty concluded at Washington, between the
[US] and Spain on November [7, 1900] and the treaty concluded between the [US] and Great Britain x x
x.

While the Treaty of Paris is not mentioned in both the 1973 and 1987 Constitutions, its mention, so the
nationalistic arguments went, being "a repulsive reminder of the indignity of our colonial past,"14 it is at
once clear that the Treaty of Paris had been utilized as key reference point in the definition of the
national territory.

On the other hand, the phrase "all other territories over which the Philippines has sovereignty or
jurisdiction," found in the 1987 Constitution, which replaced the deleted phrase "all territories belonging
to the Philippines by historic right or legal title"15 found in the 1973 Constitution, covers areas linked to
the Philippines with varying degrees of certainty.16 Under this category would fall: (a) Batanes, which
then 1971 Convention Delegate Eduardo Quintero, Chairperson of the Committee on National Territory,
described as belonging to the Philippines in all its history;17 (b) Sabah, over which a formal claim had
been filed, the so-called Freedomland (a group of islands known as Spratleys); and (c) any other
territory, over which the Philippines had filed a claim or might acquire in the future through recognized
modes of acquiring territory.18 As an author puts it, the deletion of the words "by historic right or legal
title" is not to be interpreted as precluding future claims to areas over which the Philippines does not
actually exercise sovereignty.19

Upon the foregoing perspective and going into specifics, petitioners would have RA 9522 stricken down
as unconstitutional for the reasons that it deprives the Philippines of what has long been established as
part and parcel of its national territory under the Treaty of Paris, as supplemented by the
aforementioned 1900 Treaty of Washington or, to the same effect, revises the definition on or
dismembers the national territory. Pushing their case, petitioners argue that the constitutional definition
of the national territory cannot be remade by a mere statutory act.20 As another point, petitioners
parlay the theory that the law in question virtually weakens the country’s territorial claim over the
Kalayaan Island Group (KIG) and Sabah, both of which come under the category of "other territories"
over the Philippines has sovereignty or jurisdiction. Petitioners would also assail the law on grounds
related to territorial sea lanes and internal waters transit passage by foreign vessels.

It is remarkable that petitioners could seriously argue that RA 9522 revises the Philippine territory as
defined in the Constitution, or worse, constitutes an abdication of territory.

It cannot be over-emphasized enough that RA 9522 is a baseline law enacted to implement the 1982
LOSC, which in turn seeks to regulate and establish an orderly sea use rights over maritime zones. Or as
the ponencia aptly states, RA 9522 aims to mark-out specific base points along the Philippine coast from
which baselines are drawn to serve as starting points to measure the breadth of the territorial sea and
maritime zones.21 The baselines are set to define the sea limits of a state, be it coastal or archipelagic,
under the UNCLOS III regime. By setting the baselines to conform to the prescriptions of UNCLOS III, RA
9522 did not surrender any territory, as petitioners would insist at every turn, for UNCLOS III is
concerned with setting order in the exercise of sea-use rights, not the acquisition or cession of territory.
And let it be noted that under UNCLOS III, it is recognized that countries can have territories outside
their baselines. Far from having a dismembering effect, then, RA 9522 has in a limited but real sense
increased the country’s maritime boundaries. How this situation comes about was extensively explained
by then Minister of State and head of the Philippine delegation to UNCLOS III Arturo Tolentino in his
sponsorship speech22 on the concurrence of the Batasang Pambansa with the LOSC:

xxxx

Then, we should consider, Mr. Speaker, that under the archipelagic principle, the whole area inside the
archipelagic base lines become a unified whole and the waters between the islands which formerly were
regarded by international law as open or international seas now become waters under the complete
sovereignty of the Filipino people. In this light there would be an additional area of 141,800 square
nautical miles inside the base lines that will be recognized by international law as Philippine waters,
equivalent to 45,351,050 hectares. These gains in the waters of the sea, 45,211,225 hectares outside the
base lines and 141,531,000 hectares inside the base lines, total 93,742,275 hectares as a total gain in the
waters under Philippine jurisdiction.

From a pragmatic standpoint, therefore, the advantage to our country and people not only in terms of
the legal unification of land and waters of the archipelago in the light of international law, but also in
terms of the vast resources that will come under the dominion and jurisdiction of the Republic of the
Philippines, your Committee on Foreign Affairs does not hesitate to ask this august Body to concur in the
Convention by approving the resolution before us today.

May I say it was the unanimous view of delegations at the Conference on the Law of the Sea that
archipelagos are among the biggest gainers or beneficiaries under the Convention on the Law of the Sea.

Lest it be overlooked, the constitutional provision on national territory, as couched, is broad enough to
encompass RA 9522’s definition of the archipelagic baselines. To reiterate, the laying down of baselines
is not a mode of acquiring or asserting ownership a territory over which a state exercises sovereignty.
They are drawn for the purpose of defining or establishing the maritime areas over which a state can
exercise sovereign rights. Baselines are used for fixing starting point from which the territorial belt is
measured seawards or from which the adjacent maritime waters are measured. Thus, the territorial sea,
a marginal belt of maritime waters, is measured from the baselines extending twelve (12) nautical miles
outward.23 Similarly, Art. 57 of the 1982 LOSC provides that the Exclusive Economic Zone (EEZ) "shall
not extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is
measured."24 Most important to note is that the baselines indicated under RA 9522 are derived from
Art. 47 of the 1982 LOSC which was earlier quoted.

Since the 1987 Constitution’s definition of national territory does not delimit where the Philippine’s
baselines are located, it is up to the political branches of the government to supply the deficiency.
Through Congress, the Philippines has taken an official position regarding its baselines to the
international community through RA 3046,25 as amended by RA 544626 and RA 9522. When the
Philippines deposited a copy of RA 9522 with the UN Secretary General, we effectively complied in good
faith with our obligation under the 1982 LOSC. A declaration by the Court of the constitutionality of the
law will complete the bona fides of the Philippines vis-a-vis the law of the sea treaty.

It may be that baseline provisions of UNCLOS III, if strictly implemented, may have an imposing impact
on the signatory states’ jurisdiction and even their sovereignty. But this actuality, without more, can
hardly provide a justifying dimension to nullify the complying RA 9522. As held by the Court in Bayan
Muna v. Romulo,27 treaties and international agreements have a limiting effect on the otherwise
encompassing and absolute nature of sovereignty. By their voluntary acts, states may decide to
surrender or waive some aspects of their sovereignty. The usual underlying consideration in this partial
surrender may be the greater benefits derived from a pact or reciprocal undertaking. On the premise
that the Philippines has adopted the generally accepted principles of international law as part of the law
of the land, a portion of sovereignty may be waived without violating the Constitution.

As a signatory of the 1982 LOSC, it behooves the Philippines to honor its obligations thereunder. Pacta
sunt servanda, a basic international law postulate that "every treaty in force is binding upon the parties
to it and must be performed by them in good faith."28 The exacting imperative of this principle is such
that a state may not invoke provisions in its constitution or its laws as an excuse for failure to perform
this duty."29

The allegation that Sabah has been surrendered by virtue of RA 9522, which supposedly repealed the
hereunder provision of RA 5446, is likewise unfounded.

Section 2. The definition of the baselines of the territorial sea of the Philippine Archipelago as provided
in this Act is without prejudice to the delineation of the baselines of the territorial sea around the
territory of Sabah, situated in North Borneo, over which the Republic of the Philippines has acquired
dominion and sovereignty.

There is nothing in RA 9522 indicating a clear intention to supersede Sec. 2 of RA 5446. Petitioners
obviously have read too much into RA 9522’s amendment on the baselines found in an older law. Aside
from setting the country’s baselines, RA 9522 is, in its Sec. 3, quite explicit in its reiteration of the
Philippines’ exercise of sovereignty, thus:

Section 3. This Act affirms that the Republic of the Philippines has dominion, sovereignty and jurisdiction
over all portions of the national territory as defined in the Constitution and by provisions of applicable
laws including, without limitation, Republic Act No. 7160, otherwise known as the Local Government
Code of 1991, as amended.

To emphasize, baselines are used to measure the breadth of the territorial sea, the contiguous zone, the
exclusive economic zone and the continental shelf. Having KIG and the Scarborough Shoal outside
Philippine baselines will not diminish our sovereignty over these areas. Art. 46 of UNCLOS III in fact
recognizes that an archipelagic state, such as the Philippines, is a state "constituted wholly by one or
more archipelagos and may include other islands." (emphasis supplied) The "other islands" referred to in
Art. 46 are doubtless islands not forming part of the archipelago but are nevertheless part of the state’s
territory.

The Philippines’ sovereignty over KIG and Scarborough Shoal are, thus, in no way diminished. Consider:
Other countries such as Malaysia and the United States have territories that are located outside its
baselines, yet there is no territorial question arising from this arrangement. 30

It may well be apropos to point out that the Senate version of the baseline bill that would become RA
9522 contained the following explanatory note: The law "reiterates our sovereignty over the Kalayaan
Group of Islands declared as part of the Philippine territory under Presidential Decree No. 1596. As part
of the Philippine territory, they shall be considered as a ‘regime of islands’ under Article 121 of the
Convention."31 Thus, instead of being in the nature of a "treasonous surrender" that petitioners have
described it to be, RA 9522 even harmonizes our baseline laws with our international agreements,
without limiting our territory to those confined within the country’s baselines.

Contrary to petitioners’ contention, the classification of KIG and the Scarborough Shoal as falling under
the Philippine’s regime of islands is not constitutionally objectionable. Such a classification serves as
compliance with LOSC and the Philippines’ assertion of sovereignty over KIG and Scarborough Shoal. In
setting the baseline in KIG and Scarborough Shoal, RA 9522 states that these are areas "over which the
Philippines likewise exercises sovereignty and jurisdiction." It is, thus, not correct for petitioners to claim
that the Philippines has lost 15,000 square nautical miles of territorial waters upon making this
classification. Having 15,000 square nautical miles of Philippine waters outside of our baselines, to
reiterate, does not translate to a surrender of these waters. The Philippines maintains its assertion of
ownership over territories outside of its baselines. Even China views RA 9522 as an assertion of
ownership, as seen in its Protest32 filed with the UN Secretary-General upon the deposit of RA 9522.

We take judicial notice of the effective occupation of KIG by the Philippines. Petitioners even point out
that national and local elections are regularly held there. The classification of KIG as under a "regime of
islands" does not in any manner affect the Philippines’ consistent position with regard to sovereignty
over KIG. It does not affect the Philippines’ other acts of ownership such as occupation or amend
Presidential Decree No. 1596, which declared KIG as a municipality of Palawan.

The fact that the baselines of KIG and Scarborough Shoal have yet to be defined would not detract to
the constitutionality of the law in question. The resolution of the problem lies with the political
departments of the government.

All told, the concerns raised by the petitioners about the diminution or the virtual dismemberment of
the Philippine territory by the enactment of RA 9522 are, to me, not well grounded. To repeat, UNCLOS
III pertains to a law on the seas, not territory. As part of its Preamble,33 LOSC recognizes "the
desirability of establishing through this Convention, with due regard for the sovereignty of all States, a
legal order for the seas and oceans x x x."

This brings me to the matter of transit passage of foreign vessels through Philippine waters.

Apropos thereto, petitioners allege that RA 9522 violates the nuclear weapons-free policy under Sec. 8,
in relation to Sec. 16, Art. II of the Constitution, and exposes the Philippines to marine pollution hazards,
since under the LOSC the Philippines supposedly must give to ships of all states the right of innocent
passage and the right of archipelagic sea-lane passage.

The adverted Sec. 8, Art. II of the 1987 Constitution declares the adoption and pursuit by the Philippines
of "a policy of freedom from nuclear weapons in its territory." On the other hand, the succeeding Sec. l6
underscores the State’s firm commitment "to protect and advance the right of the people to a balanced
and healthful ecology in accord with the rhythm and harmony of nature." Following the allegations of
petitioners, these twin provisions will supposedly be violated inasmuch as RA 9522 accedes to the right
of innocent passage and the right of archipelagic sea-lane passage provided under the LOSC. Therefore,
ships of all nations––be they nuclear-carrying warships or neutral commercial vessels transporting
goods––can assert the right to traverse the waters within our islands.

A cursory reading of RA 9522 would belie petitioners’ posture. In context, RA 9522 simply seeks to
conform to our international agreement on the setting of baselines and provides nothing about the
designation of archipelagic sea-lane passage or the regulation of innocent passage within our waters.
Again, petitioners have read into the amendatory RA 9522 something not intended.

Indeed, the 1982 LOSC enumerates the rights and obligations of archipelagic party-states in terms of
transit under Arts. 51 to 53, which are explained below:

To safeguard, in explicit terms, the general balance struck by [Articles 51 and 52] between the need for
passage through the area (other than straits used for international navigation) and the archipelagic
state’s need for security, Article 53 gave the archipelagic state the right to regulate where and how ships
and aircraft pass through its territory by designating specific sea lanes. Rights of passage through these
archipelagic sea lanes are regarded as those of transit passage:

(1) An archipelagic State may designate sea lanes and air routes thereabove, suitable for safe,
continuous and expeditious passage of foreign ships and aircraft through or over its archipelagic waters
and the adjacent territorial sea.

(2) All ships and aircraft enjoy the right of archipelagic sea lanes passage in such sea lanes and air routes.
(3) Archipelagic sea lanes passage is the exercise in accordance with the present Convention of the
rights of navigation and overflight in the normal mode solely for the purpose of continuous, expeditious
and unobstructed transit between one part of the high seas or an exclusive economic zone and another
part of the high seas or an exclusive economic zone.34

But owing to the geographic structure and physical features of the country, i.e., where it is "essentially a
body of water studded with islands, rather than islands with water around them,"35 the Philippines has
consistently maintained the conceptual unity of land and water as a necessary element for territorial
integrity,36 national security (which may be compromised by the presence of warships and surveillance
ships on waters between the islands),37 and the preservation of its maritime resources. As succinctly
explained by Minister Arturo Tolentino, the essence of the archipelagic concept is "the dominion and
sovereignty of the archipelagic State within its baselines, which were so drawn as to preserve the
territorial integrity of the archipelago by the inseparable unity of the land and water
domain."38 Indonesia, like the Philippines, in terms of geographic reality, has expressed agreement with
this interpretation of the archipelagic concept. So it was that in 1957, the Indonesian Government issued
the Djuanda Declaration, therein stating :

[H]istorically, the Indonesian archipelago has been an entity since time immemorial.1avvphi1 In view of
the territorial entirety and of preserving the wealth of the Indonesian state, it is deemed necessary to
consider all waters between the islands and entire entity.

x x x On the ground of the above considerations, the Government states that all waters around,
between and connecting, the islands or parts of islands belonging to the Indonesian archipelago
irrespective of their width or dimension are natural appurtenances of its land territory and therefore an
integral part of the inland or national waters subject to the absolute sovereignty of
Indonesia.39 (Emphasis supplied.)

Hence, the Philippines maintains the sui generis character of our archipelagic waters as equivalent to
the internal waters of continental coastal states. In other words, the landward waters embraced within
the baselines determined by RA 9522, i.e., all waters around, between, and connecting the islands of the
archipelago, regardless of their breadth and dimensions, form part of the internal waters of the
Philippines.40 Accordingly, such waters are not covered by the jurisdiction of the LOSC and cannot be
subjected to the rights granted to foreign states in archipelagic waters, e.g., the right of innocent
passage,41 which is allowed only in the territorial seas, or that area of the ocean comprising 12 miles
from the baselines of our archipelago; archipelagic sea-lane passage;42 over flight;43 and traditional
fishing rights.44

Our position that all waters within our baselines are internal waters, which are outside the jurisdiction of
the 1982 LOSC,45 was abundantly made clear by the Philippine Declaration at the time of the signing of
the LOSC on December 10, 1982. To reiterate, paragraphs 5, 6 and 7 of the Declaration state:

5. The Convention shall not be construed as amending in any manner any pertinent laws and
Presidential decrees of Proclamation of the republic of the Philippines; the Government x x x maintains
and reserves the right and authority to make any amendments to such laws, decrees or proclamations
pursuant to the provisions of the Philippine Constitution;
6. The provisions of the Convention on archipelagic passage through sea lanes do not nullify or impair
the sovereignty of the Philippines as an archipelagic State over the sea lanes and do not deprive it of
authority to enact legislation to protect its sovereignty, independence and security;

7. The concept of archipelagic waters is similar to the concept of internal waters under the Constitution
of the Philippines and removes straits connecting this water with the economic zone or high seas from
the rights of foreign vessels to transit passage for international navigation. (Emphasis supplied.)46

More importantly, by the ratification of the 1987 Constitution on February 2, 1987, the integrity of the
Philippine state as comprising both water and land was strengthened by the proviso in its first article,
viz: "The waters around, between, and connecting the islands of the [Philippine] archipelago, regardless
of their breadth and dimensions, form part of the internal waters of the Philippines. (emphasis supplied)

In effect, contrary to petitioners’ allegations, the Philippines’ ratification of the 1982 LOSC did not
matter-of-factly open our internal waters to passage by foreign ships, either in the concept of innocent
passage or archipelagic sea-lane passage, in exchange for the international community’s recognition of
the Philippines as an archipelagic state. The Filipino people, by ratifying the 1987 Constitution, veritably
rejected the quid pro quo petitioners take as being subsumed in that treaty.

Harmonized with the Declaration and the Constitution, the designation of baselines made in RA 9522
likewise designates our internal waters, through which passage by foreign ships is not a right, but may
be granted by the Philippines to foreign states but only as a dissolvable privilege.

In view of the foregoing, I vote to DISMISS the Petition.

PRESBITERO J. VELASCO, JR.

Associate Justice

Footnotes

1 League of Cities of the Phil. v. COMELEC, G.R. No. 176951, December 21, 2009, 608 SCRA 636.

2 Under Art. VIII, Sec. 5 of the Constitution, the Supreme Court is empowered to review, revise, reverse,
modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments
and orders of lower courts in: all cases in which the Constitutionality or validity of any treaty,
international or executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question. (Emphasis supplied.)

3 December 10, 1982.

4 May 8, 1984.

5 Available on <http://www.un.org/Depts/los/convention_agreements/texts/unclos/closindx.htm>
(visited July 28, 2011).

6 UNCLOS, Art. 47, December 10, 1982.

7 J. Bernas, S.J., The 1987 Constitution of the Republic of the Philippines A Commentary 57 (2003).
8 See J. Batongbacal, The Metes and Bounds of the Philippine National Territory, An International Law
and Policy Perspective, Supreme Court of the Philippines, Philippine Judicial Academy Third
Distinguished Lecture, Far Eastern University, June 27, 2008.

9 J. Bernas, supra note 7, at 10.

10 Citing Report No. 01 of the Committee on National Territory.

11 Citing Report No. 02 of the Committee on National Territory.

12 J. Bernas, supra note 7, at 11-14.

13 Id. at 14.

14 Id. at 9; citing Speech, Session February 15, 1972, of Delegates Amanio Sorongon, et al.

15 The history of this deleted phrase goes back to the last clause of Art. I of the 1935 Constitution which
included "all territory over which the present Government of the Philippine Islands exercises jurisdiction.
See J. Bernas, supra note 7, at 14.

16 J. Bernas, supra note 7, at 16.

17 Id.; citing deliberations of the February 17, 1972 Session.

18 Id.

19 De Leon, Philippine Constitution 62 (2011).

20 Petition, pp. 4-5.

21 Art. 48 of UNCLOS III provides that the breadth of the territorial sea, the contiguous zone, the
exclusive economic zone and the continental shelf shall be measured from the archipelagic baseline
drawn in accordance with Art. 47.

22 R.P. Lotilla, The Philippine National Territory: A Collection of Related Documents 513-517 (1995);
citing Batasang Pambansa, Acts and Resolution, 6th Regular Session.

23 J. Bernas, supra note 7, at 22.

24 UNCLOS III, Art. 57.

25 June 17, 1961.

26 September 18, 1968.

27 G.R. No. 159618, February 1, 2011; citing Tañada v. Angara, G.R. No. 118295, May 2, 1997, 272 SCRA
18.

28 Art. 26, Vienna Convention on the Law of Treaties, 1969.

29 Art. 13, Declaration of Rights and Duties of States Adopted by the International Law Commission,
1949.

30 See J. Batongbacal, supra note 8.

31 Id.

32 The Protest reads in part: "The above-mentioned Philippine Act illegally claims Huangyan Island
(referred as "Bajo de Masinloc" in the Act) of China as "areas over which the Philippines likewise
exercises sovereignty and jurisdiction." The Chinese Government hereby reiterates that Huangyan Island
and Nansha Islands have been part of the territory of China since ancient time. The People’s Republic of
China has indisputable sovereignty over Huangyan Island and Nansha Islands and their surrounding
areas. Any claim to territorial sovereignty over Huangyan Island and Nansha Islands by any other State
is, therefore, null and void." Available on

<http://www.un.org/Depts/los/LEGISLATIONANDTREATIES/PDFFILES/DEPOSIT/
communicationsredeposit/mzn69_2009_chn.pdf> (visited August 9, 2011).

33 Supra note 5.

34 C. Ku, The Archipelagic States Concept and Regional Stability in Southeast Asia, Case W. Res. J. Int’l L.,
Vol. 23:463, 469; citing 1958 U.N. Conference on the Law of the Sea, Summary Records 44, Doc. A/Conf.
13/42.

35 Id.

36 Hiran W. Jayewardene, The Regime of Islands in International Law, AD Dordrecht: Martinus Nijhoff

Publishers, p. 103 (1990).

37 Id. at 112.

38 UNCLOS III Off. Rec., Vol. II, 264, par. 65, and also pars. 61-62 and 66; cited in B. Kwiatkowska, "The
Archipelagic Regime in Practice in the Philippines and Indonesia – Making or Breaking International
Law?", International Journal of Estuarine and Coastal Law, Vol. 6, No. 1, pp. 6-7.

39 4 Whiteman D.G., International Law 284 (1965); quoted in C. Ku, supra note 34, at 470.

40 1987 Constitution, Art. I.

41 LOSC, Arts. 52 and 54.

42 LOSC, Art. 53, par. 2.

43 LOSC, Art. 53, par. 2.

44 LOSC, Art. 51.

45 LOSC, Art. 8, par. 2.

46 Cf. B. Kwiatkowska, supra note 38; citing J.D. Ingles, "The United Nations Convention on the Law of
the Sea: Implications of Philippine Ratification," 9 Philippine Yil (1983) 48-9 and 61-2; and Congress of
the Philippines, First Regular Session, Senate, S. No. 232, Explanatory Note and An Act to Repeal Section
2 (concerning TS baselines around Sabah disputed with Malaysia) of the 1968 Act No. 5446.
Republic of the Philippines
SUPREME COURT
Manila
 SECOND DIVISION

G.R. No. 152318               April 16, 2009

DEUTSCHE GESELLSCHAFT FÜR TECHNISCHE ZUSAMMENARBEIT, also known as GERMAN AGENCY FOR
TECHNICAL COOPERATION, (GTZ) HANS PETER PAULENZ and ANNE NICOLAY, Petitioners,
vs.
HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS, Labor Arbiter of the Arbitration Branch,
National Labor Relations Commission, and BERNADETTE CARMELLA MAGTAAS, CAROLINA DIONCO,
CHRISTOPHER RAMOS, MELVIN DELA PAZ, RANDY TAMAYO and EDGARDO RAMILLO, Respondents.

DECISION

TINGA, J.:

On 7 September 1971, the governments of the Federal Republic of Germany and the Republic of the
Philippines ratified an Agreement concerning Technical Co-operation (Agreement) in Bonn, capital of
what was then West Germany. The Agreement affirmed the countries’ "common interest in promoting
the technical and economic development of their States, and recogni[zed] the benefits to be derived by
both States from closer technical co-operation," and allowed for the conclusion of "arrangements
concerning individual projects of technical co-operation."1 While the Agreement provided for a limited
term of effectivity of five (5) years, it nonetheless was stated that "[t]he Agreement shall be tacitly
extended for successive periods of one year unless either of the two Contracting Parties denounces it in
writing three months prior to its expiry," and that even upon the Agreement’s expiry, its provisions
would "continue to apply to any projects agreed upon x x x until their completion."2

On 10 December 1999, the Philippine government, through then Foreign Affairs Secretary Domingo
Siazon, and the German government, agreed to an Arrangement in furtherance of the 1971 Agreement.
This Arrangement affirmed the common commitment of both governments to promote jointly a project
called, Social Health Insurance—Networking and Empowerment (SHINE), which was designed to "enable
Philippine families–especially poor ones–to maintain their health and secure health care of sustainable
quality."3 It appears that SHINE had already been in existence even prior to the effectivity of the
Arrangement, though the record does not indicate when exactly SHINE was constituted. Nonetheless,
the Arrangement stated the various obligations of the Filipino and German governments. The relevant
provisions of the Arrangement are reproduced as follows:

3. The Government of the Federal Republic of Germany shall make the following contributions to the
project.

It shall

(a) second

- one expert in health economy, insurance and health systems for up to 48 expert/months,

- one expert in system development for up to 10 expert/months

- short-term experts to deal with special tasks for a total of up to 18 expert/months,

- project assistants/guest students as required, who shall work on the project as part of their basic and
further training and assume specific project tasks under the separately financed junior staff promotion
programme of the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ);

(b) provide in situ

- short-term experts to deal with diverse special tasks for a total of up to 27 expert/months,

- five local experts in health economy, health insurance, community health systems, information
technology, information systems, training and community mobilization for a total of up to 240
expert/months,

- local and auxiliary personnel for a total of up to 120 months;

(c) supply inputs, in particular

- two cross-country vehicles,

- ten computers with accessories,

- office furnishings and equipment

up to a total value of DM 310,000 (three hundred and ten thousand Deutsche Mark);

(c) meet

- the cost of accommodation for the seconded experts and their families in so far as this cost is not met
by the seconded experts themselves,

- the cost of official travel by the experts referred to in sub-paragraph (a) above within and outside the
Republic of the Philippines,

- the cost of seminars and courses,

- the cost of transport and insurance to the project site of inputs to be supplied pursuant to sub-
paragraph (c) above, excluding the charges and storage fees referred to in paragraph 4(d) below,

- a proportion of the operating and administrative costs;

xxx

4. The Government of the Republic of the Philippines shall make the following contributions to the
project:

It shall

(a) – provide the necessary Philippine experts for the project, in particular one project coordinator in the
Philippine Health Insurance Corporation (Philhealth), at least three further experts and a sufficient
number of administrative and auxiliary personnel, as well as health personnel in the pilot provinces and
in the other project partners, in particular one responsible expert for each pilot province and for each
association representing the various target groups,

- release suitably qualified experts from their duties for attendance at the envisaged basic and further
training activities; it shall only nominate such candidates as have given an undertaking to work on the
project for at least five years after completing their training and shall ensure that these Philippine
experts receive appropriate remuneration,

- ensure that the project field offices have sufficient expendables,

- make available the land and buildings required for the project;

(b) assume an increasing proportion of the running and operating costs of the project;

(c) afford the seconded experts any assistance they may require in carrying out the tasks assigned to
them and place at their disposal all necessary records and documents;

(d) guarantee that

- the project is provided with an itemized budget of its own in order to ensure smooth continuation of
the project.

- the necessary legal and administrative framework is created for the project,

- the project is coordinated in close cooperation with other national and international agencies relevant
to implementation,

- the inputs supplied for the project on behalf of the Government of the Federal Republic of Germany
are exempted from the cost of licenses, harbour dues, import and export duties and other public
charges and fees, as well as storage fees, or that any costs thereof are met, and that they are cleared by
customs without delay. The aforementioned exemptions shall, at the request of the implementing
agencies also apply to inputs procured in the Republic of the Philippines,

- the tasks of the seconded experts are taken over as soon as possible by Philippine experts,

- examinations passed by Philippine nationals pursuant to this Arrangement are recognized in

accordance with their respective standards and that the persons concerned are afforded such
opportunities with regard to careers, appointments and advancement as are commensurate with their
training.4

In the arraignment, both governments likewise named their respective implementing organizations for
SHINE. The Philippines designated the Department of Health (DOH) and the Philippine Health Insurance
Corporation (Philhealth) with the implementation of SHINE. For their part, the German government
"charge[d] the Deustche Gesellschaft für Technische Zusammenarbeit[5 ] (GTZ[6 ]) GmbH, Eschborn,
with the implementation of its contributions."7

Private respondents were engaged as contract employees hired by GTZ to work for SHINE on various
dates between December of 1998 to September of 1999. Bernadette Carmela Magtaas was hired as an
"information systems manager and project officer of SHINE;"8 Carolina Dionco as a "Project Assistant of
SHINE;"9 Christopher Ramos as "a project assistant and liason personnel of NHI related SHINE activities
by GTZ;"10 Melvin Dela Paz and Randy Tamayo as programmers;11 and Edgardo Ramilo as "driver,
messenger and multipurpose service man."12 The employment contracts of all six private respondents
all specified Dr. Rainer Tollkotter, identified as an adviser of GTZ, as the "employer." At the same time,
all the contracts commonly provided that "[i]t is mutually agreed and understood that [Dr. Tollkotter, as
employer] is a seconded GTZ expert who is hiring the Employee on behalf of GTZ and for a Philippine-
German bilateral project named ‘Social Health Insurance—Networking and Empowerment (SHINE)’
which will end at a given time."13

In September of 1999, Anne Nicolay (Nicolay), a Belgian national, assumed the post of SHINE Project
Manager. Disagreements eventually arose between Nicolay and private respondents in matters such as
proposed salary adjustments, and the course Nicolay was taking in the implementation of SHINE
different from her predecessors. The dispute culminated in a letter14 dated 8 June 2000, signed by the
private respondents, addressed to Nicolay, and copies furnished officials of the DOH, Philheath, and the
director of the Manila office of GTZ. The letter raised several issues which private respondents claim had
been brought up several times in the past, but have not been given appropriate response. It was claimed
that SHINE under Nicolay had veered away from its original purpose to facilitate the development of
social health insurance by shoring up the national health insurance program and strengthening local
initiatives, as Nicolay had refused to support local partners and new initiatives on the premise that
community and local government unit schemes were not sustainable—a philosophy that supposedly
betrayed Nicolay’s lack of understanding of the purpose of the project. Private respondents further
alleged that as a result of Nicolay’s "new thrust, resources have been used inappropriately;" that the
new management style was "not congruent with the original goals of the project;" that Nicolay herself
suffered from "cultural insensitivity" that consequently failed to sustain healthy relations with SHINE’s
partners and staff.

The letter ended with these ominous words:

The issues that we [the private respondents] have stated here are very crucial to us in working for the
project. We could no longer find any reason to stay with the project unless ALL of these issues be
addressed immediately and appropriately.15

In response, Nicolay wrote each of the private respondents a letter dated 21 June 2000, all similarly
worded except for their respective addressees. She informed private respondents that the "project’s
orientations and evolution" were decided in consensus with partner institutions, Philhealth and the
DOH, and thus no longer subject to modifications. More pertinently, she stated:

You have firmly and unequivocally stated in the last paragraph of your 8th June 2000 letter that you and
the five other staff "could no longer find any reason to stay with the project unless ALL of these issues
be addressed immediately and appropriately." Under the foregoing premises and circumstances, it is
now imperative that I am to accept your resignation, which I expect to receive as soon as possible.16

Taken aback, private respondents replied with a common letter, clarifying that their earlier letter was
not intended as a resignation letter, but one that merely intended to raise attention to what they
perceived as vital issues.17 Negotiations ensued between private respondents and Nicolay, but for
naught. Each of the private respondents received a letter from Nicolay dated 11 July 2000, informing
them of the pre-termination of their contracts of employment on the grounds of "serious and gross
insubordination, among others, resulting to loss of confidence and trust."18

On 21 August 2000, the private respondents filed a complaint for illegal dismissal with the NLRC. Named
as respondents therein where GTZ, the Director of its Manila office Hans Peter Paulenz, its Assistant
Project Manager Christian Jahn, and Nicolay.
On 25 October 2005, GTZ, through counsel, filed a Motion to Dismiss, on the ground that the Labor
Arbiter had no jurisdiction over the case, as its acts were undertaken in the discharge of the
governmental functions and sovereign acts of the Government of the Federal Republic of Germany. This
was opposed by private respondents with the arguments that GTZ had failed to secure a certification
that it was immune from suit from the Department of Foreign Affairs, and that it was GTZ and not the
German government which had implemented the SHINE Project and entered into the contracts of
employment.

On 27 November 2000, the Labor Arbiter issued an Order19 denying the Motion to Dismiss. The Order
cited, among others, that GTZ was a private corporation which entered into an employment contract;
and that GTZ had failed to secure from the DFA a certification as to its diplomatic status.

On 7 February 2001, GTZ filed with the Labor Arbiter a "Reiterating Motion to Dismiss," again praying
that the Motion to Dismiss be granted on the jurisdictional ground, and reprising the arguments for
dismissal it had earlier raised.20 No action was taken by the Labor Arbiter on this new motion. Instead,
on 15 October 2001, the Labor Arbiter rendered a Decision21 granting the complaint for illegal dismissal.
The Decision concluded that respondents were dismissed without lawful cause, there being "a total lack
of due process both substantive and procedural [sic]."22 GTZ was faulted for failing to observe the
notice requirements in the labor law. The Decision likewise proceeded from the premise that GTZ had
treated the letter dated 8 June 2000 as a resignation letter, and devoted some focus in debunking this
theory.

The Decision initially offered that it "need not discuss the jurisdictional aspect considering that the same
had already been lengthily discussed in the Order de[n]ying respondents’ Motion to
Dismiss."23 Nonetheless, it proceeded to discuss the jurisdictional aspect, in this wise:

Under pain of being repetitious, the undersigned Labor Arbiter has jurisdiction to entertain the
complaint on the following grounds:

Firstly, under the employment contract entered into between complainants and respondents,
specifically Section 10 thereof, it provides that "contract partners agree that his contract shall be subject
to the LAWS of the jurisdiction of the locality in which the service is performed."

Secondly, respondent having entered into contract, they can no longer invoke the sovereignty of the
Federal Republic of Germany.

Lastly, it is imperative to be immune from suit, respondents should have secured from the Department
of Foreign Affairs a certification of respondents’ diplomatic status and entitlement to diplomatic
privileges including immunity from suits. Having failed in this regard, respondents cannot escape liability
from the shelter of sovereign immunity.[sic]24

Notably, GTZ did not file a motion for reconsideration to the Labor Arbiter’s Decision or elevate said
decision for appeal to the NLRC. Instead, GTZ opted to assail the decision by way of a special civil action
for certiorari filed with the Court of Appeals.25 On 10 December 2001, the Court of Appeals
promulgated a Resolution26 dismissing GTZ’s petition, finding that "judicial recourse at this stage of the
case is uncalled for[,] [t]he appropriate remedy of the petitioners [being] an appeal to the NLRC x x
x."27 A motion for reconsideration to this Resolution proved fruitless for GTZ.28
Thus, the present petition for review under Rule 45, assailing the decision and resolutions of the Court
of Appeals and of the Labor Arbiter. GTZ’s arguments center on whether the Court of Appeals could
have entertained its petition for certiorari despite its not having undertaken an appeal before the NLRC;
and whether the complaint for illegal dismissal should have been dismissed for lack of jurisdiction on
account of GTZ’s insistence that it enjoys immunity from suit. No special arguments are directed with
respect to petitioners Hans Peter Paulenz and Anne Nicolay, respectively the then Director and the then
Project Manager of GTZ in the Philippines; so we have to presume that the arguments raised in behalf of
GTZ’s alleged immunity from suit extend to them as well.

The Court required the Office of the Solicitor General (OSG) to file a Comment on the petition. In its
Comment dated 7 November 2005, the OSG took the side of GTZ, with the prayer that the petition be
granted on the ground that GTZ was immune from suit, citing in particular its assigned functions in
implementing the SHINE program—a joint undertaking of the Philippine and German governments
which was neither proprietary nor commercial in nature.

The Court of Appeals had premised the dismissal of GTZ’s petition on its procedural misstep in bypassing
an appeal to NLRC and challenging the Labor Arbiter’s Decision directly with the appellate court by way
of a Rule 65 petition. In dismissing the petition, the

Court of Appeals relied on our ruling in Air Service Cooperative v. Court of Appeals.29 The central issue
in that case was whether a decision of a Labor Arbiter rendered without jurisdiction over the subject
matter may be annulled in a petition before a Regional Trial Court. That case may be differentiated from
the present case, since the Regional Trial Court does not have original or appellate jurisdiction to review
a decision rendered by a Labor Arbiter. In contrast, there is no doubt, as affirmed by jurisprudence, that
the Court of Appeals has jurisdiction to review, by way of its original certiorari jurisdiction, decisions
ruling on complaints for illegal dismissal.

Nonetheless, the Court of Appeals is correct in pronouncing the general rule that the proper recourse
from the decision of the Labor Arbiter is to first appeal the same to the NLRC. Air Services is in fact
clearly detrimental to petitioner’s position in one regard. The Court therein noted that on account of the
failure to correctly appeal the decision of the Labor Arbiter to the NLRC, such judgment consequently
became final and executory.30 GTZ goes as far as to "request" that the Court re-examine Air Services, a
suggestion that is needlessly improvident under the circumstances. Air Services affirms doctrines
grounded in sound procedural rules that have allowed for the considered and orderly disposition of
labor cases.

The OSG points out, citing Heirs of Mayor Nemencio Galvez v. Court of Appeals,31 that even when
appeal is available, the Court has nonetheless allowed a writ of certiorari when the orders of the lower
court were issued either in excess of or without jurisdiction. Indeed, the Court has ruled before that the
failure to employ available intermediate recourses, such as a motion for reconsideration, is not a fatal
infirmity if the ruling assailed is a patent nullity. This approach suggested by the OSG allows the Court to
inquire directly into what is the main issue–whether GTZ enjoys immunity from suit.

The arguments raised by GTZ and the OSG are rooted in several indisputable facts. The SHINE project
was implemented pursuant to the bilateral agreements between the Philippine and German
governments. GTZ was tasked, under the 1991 agreement, with the implementation of the contributions
of the German government. The activities performed by GTZ pertaining to the SHINE project are
governmental in nature, related as they are to the promotion of health insurance in the Philippines. The
fact that GTZ entered into employment contracts with the private respondents did not disqualify it from
invoking immunity from suit, as held in cases such as Holy See v. Rosario, Jr.,32 which set forth what
remains valid doctrine:

Certainly, the mere entering into a contract by a foreign state with a private party cannot be the
ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign
state is engaged in the activity in the regular course of business. If the foreign state is not engaged
regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the
act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially
when it is not undertaken for gain or profit.33

Beyond dispute is the tenability of the comment points raised by GTZ and the OSG that GTZ was not
performing proprietary functions notwithstanding its entry into the particular employment contracts.
Yet there is an equally fundamental premise which GTZ and the OSG fail to address, namely: Is GTZ, by
conception, able to enjoy the Federal Republic’s immunity from suit?

The principle of state immunity from suit, whether a local state or a foreign state, is reflected in Section
9, Article XVI of the Constitution, which states that "the State may not be sued without its consent."
Who or what consists of "the State"? For one, the doctrine is available to foreign States insofar as they
are sought to be sued in the courts of the local State,34 necessary as it is to avoid "unduly vexing the
peace of nations."

If the instant suit had been brought directly against the Federal Republic of Germany, there would be no
doubt that it is a suit brought against a State, and the only necessary inquiry is whether said State had
consented to be sued. However, the present suit was brought against GTZ. It is necessary for us to
understand what precisely are the parameters of the legal personality of GTZ.

Counsel for GTZ characterizes GTZ as "the implementing agency of the Government of the Federal
Republic of Germany," a depiction similarly adopted by the OSG. Assuming that characterization is
correct, it does not automatically invest GTZ with the ability to invoke State immunity from suit. The
distinction lies in whether the agency is incorporated or unincorporated. The following lucid discussion
from Justice Isagani Cruz is pertinent:

Where suit is filed not against the government itself or its officials but against one of its entities, it must
be ascertained whether or not the State, as the principal that may ultimately be held liable, has given its
consent to be sued. This ascertainment will depend in the first instance on whether the government
agency impleaded is incorporated or unincorporated.

An incorporated agency has a charter of its own that invests it with a separate juridical personality, like
the Social Security System, the University of the Philippines, and the City of Manila. By contrast, the
unincorporated agency is so called because it has no separate juridical personality but is merged in the
general machinery of the government, like the Department of Justice, the Bureau of Mines and the
Government Printing Office.

If the agency is incorporated, the test of its suability is found in its charter. The simple rule is that it is
suable if its charter says so, and this is true regardless of the functions it is performing. Municipal
corporations, for example, like provinces and cities, are agencies of the State when they are engaged in
governmental functions and therefore should enjoy the sovereign immunity from suit. Nevertheless,
they are subject to suit even in the performance of such functions because their charter provides that
they can sue and be sued.35

State immunity from suit may be waived by general or special law.36 The special law can take the form
of the original charter of the incorporated government agency. Jurisprudence is replete with examples
of incorporated government agencies which were ruled not entitled to invoke immunity from suit,
owing to provisions in their

charters manifesting their consent to be sued. These include the National Irrigation
Administration,37 the former Central Bank,38 and the National Power Corporation.39 In SSS v. Court of
Appeals,40 the Court through Justice Melencio-Herrera explained that by virtue of an express provision
in its charter allowing it to sue and be sued, the Social Security System did not enjoy immunity from suit:

We come now to the amendability of the SSS to judicial action and legal responsibility for its acts. To our
minds, there should be no question on this score considering that the SSS is a juridical entity with a
personality of its own. It has corporate powers separate and distinct from the Government. SSS' own
organic act specifically provides that it can sue and be sued in Court. These words "sue and be sued"
embrace all civil process incident to a legal action. So that, even assuming that the SSS, as it claims,
enjoys immunity from suit as an entity performing governmental functions, by virtue of the explicit
provision of the aforecited enabling law, the Government must be deemed to have waived immunity in
respect of the SSS, although it does not thereby concede its liability. That statutory law has given to the
private citizen a remedy for the enforcement and protection of his rights. The SSS thereby has been
required to submit to the jurisdiction of the Courts, subject to its right to interpose any lawful defense.
Whether the SSS performs governmental or proprietary functions thus becomes unnecessary to belabor.
For by that waiver, a private citizen may bring a suit against it for varied objectives, such as, in this case,
to obtain compensation in damages arising from contract, and even for tort.

A recent case squarely in point anent the principle, involving the National Power Corporation, is that of
Rayo v. Court of First Instance of Bulacan, 110 SCRA 457 (1981), wherein this Court, speaking through
Mr. Justice Vicente Abad Santos, ruled:

"It is not necessary to write an extended dissertation on whether or not the NPC performs a
governmental function with respect to the management and operation of the Angat Dam. It is sufficient
to say that the government has organized a private corporation, put money in it and has allowed it to
sue and be sued in any court under its charter. (R.A. No. 6395, Sec. 3[d]). As a government, owned and
controlled corporation, it has a personality of its own, distinct and separate from that of the
Government. Moreover, the charter provision that the NPC can 'sue and be sued in any court' is without
qualification on the cause of action and accordingly it can include a tort claim such as the one instituted
by the petitioners."41

It is useful to note that on the part of the Philippine government, it had designated two entities, the
Department of Health and the Philippine Health Insurance Corporation (PHIC), as the implementing
agencies in behalf of the Philippines. The PHIC was established under Republic Act No. 7875, Section
16(g) of which grants the corporation the power "to sue and be sued in court." Applying the previously
cited jurisprudence, PHIC would not enjoy immunity from suit even in the performance of its functions
connected with SHINE, however, governmental in nature as they may be.
Is GTZ an incorporated agency of the German government? There is some mystery surrounding that
question. Neither GTZ nor the OSG go beyond the claim that petitioner is "the implementing agency of
the Government of the Federal Republic of Germany." On the other hand, private respondents asserted
before the Labor Arbiter that GTZ was "a private corporation engaged in the implementation of
development projects."42 The Labor Arbiter accepted that claim in his Order denying the Motion to
Dismiss,43 though he was silent on that point in his Decision. Nevertheless, private respondents argue in
their Comment that the finding that GTZ was a private corporation "was never controverted, and is
therefore deemed admitted."44 In its Reply, GTZ controverts that finding, saying that it is a matter of
public knowledge that the status of petitioner GTZ is that of the "implementing agency," and not that of
a private corporation.45

In truth, private respondents were unable to adduce any evidence to substantiate their claim that GTZ
was a "private corporation," and the Labor Arbiter acted rashly in accepting such claim without
explanation. But neither has GTZ supplied any evidence defining its legal nature beyond that of the bare
descriptive "implementing agency." There is no doubt that the 1991 Agreement designated GTZ as the
"implementing agency" in behalf of the German government. Yet the catch is that such term has no
precise definition that is responsive to our concerns. Inherently, an agent acts in behalf of a principal,
and the GTZ can be said to act in behalf of the German state. But that is as far as "implementing agency"
could take us. The term by itself does not supply whether GTZ is incorporated or unincorporated,
whether it is owned by the German state or by private interests, whether it has juridical personality
independent of the German government or none at all.

GTZ itself provides a more helpful clue, inadvertently, through its own official Internet website.46 In the
"Corporate Profile" section of the English language version of its site, GTZ describes itself as follows:

As an international cooperation enterprise for sustainable development with worldwide operations, the
federally owned Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH supports the
German Government in achieving its development-policy objectives. It provides viable, forward-looking
solutions for political, economic, ecological and social development in a globalised world. Working under
difficult conditions, GTZ promotes complex reforms and change processes. Its corporate objective is to
improve people’s living conditions on a sustainable basis.

GTZ is a federal enterprise based in Eschborn near Frankfurt am Main. It was founded in 1975 as a
company under private law. The German Federal Ministry for Economic Cooperation and Development
(BMZ) is its major client. The company also operates on behalf of other German ministries, the
governments of other countries and international clients, such as the European Commission, the United
Nations and the World Bank, as well as on behalf of private enterprises. GTZ works on a public-benefit
basis. All surpluses generated are channeled [sic] back into its own international cooperation projects
for sustainable development.47

GTZ’s own website elicits that petitioner is "federally owned," a "federal enterprise," and "founded in
1975 as a company under private law." GTZ clearly has a very meaningful relationship with the Federal
Republic of Germany, which apparently owns it. At the same time, it appears that GTZ was actually
organized not through a legislative public charter, but under private law, in the same way that Philippine
corporations can be organized under the Corporation Code even if fully owned by the Philippine
government.
This self-description of GTZ in its own official website gives further cause for pause in adopting
petitioners’ argument that GTZ is entitled to immunity from suit because it is "an implementing agency."
The above-quoted statement does not dispute the characterization of GTZ as an "implementing agency
of the Federal Republic of Germany," yet it bolsters the notion that as a company organized under
private law, it has a legal personality independent of that of the Federal Republic of Germany.

The Federal Republic of Germany, in its own official website,48 also makes reference to GTZ and
describes it in this manner:

x x x Going by the principle of "sustainable development," the German Technical Cooperation (Deutsche
Gesellschaft für Technische Zusammenarbeit GmbH, GTZ) takes on non-profit projects in international
"technical cooperation." The GTZ is a private company owned by the Federal Republic of Germany.49

Again, we are uncertain of the corresponding legal implications under German law surrounding "a
private company owned by the Federal Republic of Germany." Yet taking the description on face value,
the apparent equivalent under Philippine law is that of a corporation organized under the Corporation
Code but owned by the Philippine government, or a government-owned or controlled corporation
without original charter. And it bears notice that Section 36 of the Corporate Code states that "[e]very
corporation incorporated under this Code has the power and capacity x x x to sue and be sued in its
corporate name."50

It is entirely possible that under German law, an entity such as GTZ or particularly GTZ itself has not been
vested or has been specifically deprived the power and capacity to sue and/or be sued. Yet in the
proceedings below and before this Court, GTZ has failed to establish that under German law, it has not
consented to be sued despite it being owned by the Federal Republic of Germany. We adhere to the rule
that in the absence of evidence to the contrary,

foreign laws on a particular subject are presumed to be the same as those of the Philippines,51 and
following the most intelligent assumption we can gather, GTZ is akin to a governmental owned or
controlled corporation without original charter which, by virtue of the Corporation Code, has expressly
consented to be sued. At the very least, like the Labor Arbiter and the Court of Appeals, this Court has
no basis in fact to conclude or presume that GTZ enjoys immunity from suit.

This absence of basis in fact leads to another important point, alluded to by the Labor Arbiter in his
rulings. Our ruling in Holy See v. Del Rosario52 provided a template on how a foreign entity desiring to
invoke State immunity from suit could duly prove such immunity before our local courts. The principles
enunciated in that case were derived from public international law. We stated then:

In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic
immunity in a foreign court, it requests the Foreign Office of the state where it is sued to convey to the
court that said defendant is entitled to immunity.

In the United States, the procedure followed is the process of "suggestion," where the foreign state or
the international organization sued in an American court requests the Secretary of State to make a
determination as to whether it is entitled to immunity. If the Secretary of State finds that the defendant
is immune from suit, he, in turn, asks the Attorney General to submit to the court a "suggestion" that
the defendant is entitled to immunity. In England, a similar procedure is followed, only the Foreign
Office issues a certification to that effect instead of submitting a "suggestion" (O'Connell, I International
Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign Instrumentalities and Obligations, 50
Yale Law Journal 1088 [1941]).

In the Philippines, the practice is for the foreign government or the international organization to first
secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how the
Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic
Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a letter
directly to the Secretary of Labor and Employment, informing the latter that the respondent-employer
could not be sued because it enjoyed diplomatic immunity. In World Health Organization v. Aquino, 48
SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v.
Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor
General to make, in behalf of the Commander of the United States Naval Base at Olongapo City,
Zambales, a "suggestion" to respondent Judge. The Solicitor General embodied the "suggestion" in a
Manifestation and Memorandum as amicus curiae.53

It is to be recalled that the Labor Arbiter, in both of his rulings, noted that it was imperative for
petitioners to secure from the Department of Foreign Affairs "a certification of respondents’ diplomatic
status and entitlement to diplomatic privileges including immunity from suits."54 The requirement
might not necessarily be imperative. However, had GTZ obtained such certification from the DFA, it
would have provided factual basis for its claim of immunity that would, at the very least, establish a
disputable evidentiary presumption that the foreign party is indeed immune which the opposing party
will have to overcome with its own factual evidence. We do not see why GTZ could not have secured
such certification or endorsement from the DFA for purposes of this case. Certainly, it would have been
highly prudential for GTZ to obtain the same after the Labor Arbiter had denied the motion to dismiss.
Still, even at this juncture, we do not see any evidence that the DFA, the office of the executive branch in
charge of our diplomatic relations, has indeed endorsed GTZ’s claim of immunity. It may be possible that
GTZ tried, but failed to secure such certification, due to the same concerns that we have discussed
herein.

Would the fact that the Solicitor General has endorsed GTZ’s claim of State’s immunity from suit before
this Court sufficiently substitute for the DFA certification? Note that the rule in public international law
quoted in Holy See referred to endorsement by the Foreign Office of the State where the suit is filed,
such foreign office in the Philippines being the Department of Foreign Affairs. Nowhere in the Comment
of the OSG is it manifested that the DFA has endorsed GTZ’s claim, or that the OSG had solicited the
DFA’s views on the issue. The arguments raised by the OSG are virtually the same as the arguments
raised by GTZ without any indication of any special and distinct perspective maintained by the Philippine
government on the issue. The Comment filed by the OSG does not inspire the same degree of
confidence as a certification from the DFA would have elicited.1avvphi1

Holy See made reference to Baer v. Tizon,55 and that in the said case, the United States Embassy asked
the Secretary of Foreign Affairs to request the Solicitor General to make a "suggestion" to the trial court,
accomplished by way of a Manifestation and Memorandum, that the petitioner therein enjoyed
immunity as the Commander of the Subic Bay Naval Base. Such circumstance is actually not narrated in
the text of Baer itself and was likely supplied in Holy See because its author, Justice Camilio Quiason,
had appeared as the Solicitor in behalf of the OSG in Baer. Nonetheless, as narrated in Holy See, it was
the Secretary of Foreign Affairs which directed the OSG to intervene in behalf of the United States
government in the Baer case, and such fact is manifest enough of the endorsement by the Foreign
Office. We do not find a similar circumstance that bears here.

The Court is thus holds and so rules that GTZ consistently has been unable to establish with satisfaction
that it enjoys the immunity from suit generally enjoyed by its parent country, the Federal Republic of
Germany. Consequently, both the Labor Arbiter and the Court of Appeals acted within proper bounds
when they refused to acknowledge that GTZ is so immune by dismissing the complaint against it. Our
finding has additional ramifications on the failure of GTZ to properly appeal the Labor Arbiter’s decision
to the NLRC. As pointed out by the OSG, the direct recourse to the Court of Appeals while bypassing the
NLRC could have been sanctioned had the Labor Arbiter’s decision been a "patent nullity." Since the
Labor Arbiter acted properly in deciding the complaint, notwithstanding GTZ’s claim of immunity, we
cannot see how the decision could have translated into a "patent nullity."

As a result, there was no basis for petitioners in foregoing the appeal to the NLRC by filing directly with
the Court of Appeals the petition for certiorari. It then follows that the Court of Appeals acted correctly
in dismissing the petition on that ground. As a further consequence, since petitioners failed to perfect an
appeal from the Labor Arbiter’s Decision, the same has long become final and executory. All other
questions related to this case, such as whether or not private respondents were illegally dismissed, are
no longer susceptible to review, respecting as we do the finality of the Labor Arbiter’s Decision.

A final note. This decision should not be seen as deviation from the more common methodology
employed in ascertaining whether a party enjoys State immunity from suit, one which focuses on the
particular functions exercised by the party and determines whether these are proprietary or sovereign
in nature. The nature of the acts performed by the entity invoking immunity remains the most important
barometer for testing whether the privilege of State immunity from suit should apply. At the same time,
our Constitution stipulates that a State immunity from suit is conditional on its withholding of consent;
hence, the laws and circumstances pertaining to the creation and legal personality of an instrumentality
or agency invoking immunity remain relevant. Consent to be sued, as exhibited in this decision, is often
conferred by the very same statute or general law creating the instrumentality or agency.

WHEREFORE, the petition is DENIED. No pronouncement as to costs.

SO ORDERED.

DANTE O. TINGA
Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CONCHITA CARPIO MORALES PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

ARTURO D. BRION
Associate Justice
ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is
hereby certified that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes

1 Rollo, p. 51.

2 Id. at 56-57.

3 Id. at 59.

4 Id. at 59-62.

5 See id. at 2. Also known as the German Agency for Technical Cooperation.

6 "GTZ" is apparently the acronym by which petitioner is commonly identified; we adopt the same for
purposes of brevity.

7 Rollo, p. 62.

8 Id. at 64-67.

9 Id. at 68-71.

10 Id. at 72-75.

11 Id. at 76-79, 80-83.

12 Id. at 84-87.

13 See id. at 64, 68, 72, 76, 80, 84.

14 Rollo, pp. 156-158.

15 Id. at 157. Emphasis in the original.

16 Id. at 159, 160, 161, 162, 163 & 164. Emphasis not ours.
17 Id. at 165.

18 Id. at 168-173.

19 See id. at 204-205. Order penned by Labor Arbiter Ariel Cadiente Santos, the Labor Arbiter who heard
and eventually decided the complaint for illegal dismissal.

20 See id. at 206-211.

21 Id. at 212-223.

22 Id.

23 Id. at 219.

24 Id. at 220-221.

25 Docketed as CA-G.R. SP No. 67794.

26 Rollo, pp. 48-49. Resolution penned by Associate Justice Salvador T. Valdez, Jr. of the Court of
Appeals Former Fifteenth Division, and concurred in by Associate Justices Mercedes Gozo-Dadole and
Sergio L. Pestaño.

27 Id. at 45.

28 The Resolution denying the Motion for Reconsideration was promulgated on 4 March 2002.

29 354 Phil. 905 (1998).

30 Id. at 916-917.

31 325 Phil. 1028 (1996).

32 G.R. No. 101949, 1 December 1994, 238 SCRA 524

33 Id. at 536.

34 See Syquia v. Almeda Lopez, 84 Phil. 312 (1949).

35 I. Cruz, Philippine Political Law (2002 ed.) at 43. Emphasis supplied. See also Metran v. Paredes, 79
Phil. 819 (1948).

36 See Traders Royal Bank v. Intermediate Appellate Court, G.R. No. 68514, 17 December 1990, 192
SCRA 305, 310.

37 See Fontanilla v. Maliaman, G.R. Nos. 55963 & 61045, 27 February 1991, 194 SCRA 486.

38 See Arcega v. Court of Appeals, 160 Phil. 919 (1975); Olizo v. Central Bank, 120 Phil. 355 (1964).

39 See Rayo v. CFI of Bulacan, 196 Phil. 572 (1981).

40 See SSS v. Court of Appeals, 205 Phil. 609 (1983).

41 Id. at 624.
42 See rollo, p. 110.

43 Id. at 204.

44 Id. at 278.

45 Id. at 317.

46 German language version at http://www.gtz.de/de/index.htm, while the English language version is

at http://www.gtz.de/en/ (Last visited, 23 March 2009)

47 "GTZ. Corporate Profile," at http://www.gtz.de/en/unternehmen/1698.htm (Last visited, 23 March

2009).

48 http://www.deutschland.de (Last visited, 23 March 2009).

49 "Das Deutschland Portal > German Technical Cooperation", at http://www.deutschland.de/ link.php?

lang=2&category2=249&link_id=391 (Last visited, 23 March 2009, emphasis supplied).

50 See Corporation Code, Sec. 36.

51 Board of Commissioners v. Dela Rosa, G.R. Nos. 95122-23, 31 May 1991, 197 SCRA 854; Miciano v.
Brimo, 50 Phil. 867 (1924); Lim and Lim v. Collector of Customs, 36 Phil. 472; Yam Ka Lim v. Collector of
Customs, 30 Phil. 46 (1915).

52 Supra note 38.

53 Id. at 532.

54 See rollo, pp. 204, 221.

55 156 Phil. 1 (1974).

SANDERS vs. VERIDIANO II

DALE SANDERS, AND A.S. MOREAU, JR, petitioners,

vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance of Zambales,
Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.
162 SCRA 88
June 10, 1988

FACTS:

Private respondents Anthony Rossi and Ralph Wyers (deceased) were both employed as game room
attendants in the special services department of the US Naval Station (NAVSTA). They were advised that
their employment had been converted from permanent full-time to permanent part-time. Their reaction
was to protect the conversion and to institute grievance proceedings. The hearing officer recommended
the reinstatement of private respondents to permanent full-time status plus back wages.

In a letter addressed to petitioner Moreau, Commanding Officer of Subic Naval Base, petitioner Sanders,
Special Services Director of NAVSTA, disagreed with the recommendation and asked for its rejection.

Moreau, even before the start of the grievance hearings, sent a letter to the Chief of Naval Personnel
explaining the change of the private respondent‘s status and requested concurrence therewith.

Private respondents filed suit for damages claiming that the letters contained libelous imputations that
had exposed them to ridicule and had caused them mental anguish, and prejudgment of the grievance
proceedings was an invasion of their personal and proprietary rights. They make it clear that petitioners
were being sued in their personal capacity. A motion to dismiss on the ground of lack of jurisdiction was
filed by the petitioner and was denied.

ISSUE:

Were the petitioners performing their official duties when they did the acts for which they are being
sued for damages?

HELD:

YES. It is clear in the present case that the acts for which the petitioners are being called to account
were performed by them in the discharge of their official duties. Sanders as director of the special
services department of NAVSTA, undoubtedly had supervision over its personnel including the private
respondents and had a hand in their employment, work, assignments, discipline, dismissal and other
related matters. The act of Moreau is deadly official in nature, performed by him as the immediate
superior of Sanders and directly answerable to Naval Personnel in matters involving the special
department of NAVSTA.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 171182               August 23, 2012

UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA, RAUL P. DE GUZMAN, RUBEN P. ASPIRAS,
EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO S. ABRIGO, and JOSEFINA R.
LICUANAN, Petitioners,
vs.
HON. AGUSTIN S. DIZON, his capacity as Presiding Judge of the Regional Trial Court of Quezon City,
Branch 80, STERN BUILDERS, INC., and SERVILLANO DELA CRUZ, Respondents.

DECISION

BERSAMIN, J.:

Trial judges should not immediately issue writs of execution or garnishment against the Government or
any of its subdivisions, agencies and instrumentalities to enforce money judgments.1 They should bear
in mind that the primary jurisdiction to examine, audit and settle all claims of any sort due from the
Government or any of its subdivisions, agencies and instrumentalities pertains to the Commission on
Audit (COA) pursuant to Presidential Decree No. 1445 (Government Auditing Code of the Philippines).

The Case

On appeal by the University of the Philippines and its then incumbent officials (collectively, the UP) is the
decision promulgated on September 16, 2005,2 whereby the Court of Appeals (CA) upheld the order of
the Regional Trial Court (RTC), Branch 80, in Quezon City that directed the garnishment of public funds
amounting to ₱ 16,370,191.74 belonging to the UP to satisfy the writ of execution issued to enforce the
already final and executory judgment against the UP.

Antecedents

On August 30, 1990, the UP, through its then President Jose V. Abueva, entered into a General
Construction Agreement with respondent Stern Builders Corporation (Stern Builders), represented by its
President and General Manager Servillano dela Cruz, for the construction of the extension building and
the renovation of the College of Arts and Sciences Building in the campus of the University of the
Philippines in Los Baños (UPLB).3

In the course of the implementation of the contract, Stern Builders submitted three progress billings
corresponding to the work accomplished, but the UP paid only two of the billings. The third billing worth
₱ 273,729.47 was not paid due to its disallowance by the Commission on Audit (COA). Despite the lifting
of the disallowance, the UP failed to pay the billing, prompting Stern Builders and dela Cruz to sue the
UP and its co-respondent officials to collect the unpaid billing and to recover various damages. The suit,
entitled Stern Builders Corporation and Servillano R. Dela Cruz v. University of the Philippines Systems,
Jose V. Abueva, Raul P. de Guzman, Ruben P. Aspiras, Emmanuel P. Bello, Wilfredo P. David, Casiano S.
Abrigo, and Josefina R. Licuanan, was docketed as Civil Case No. Q-93-14971 of the Regional Trial Court
in Quezon City (RTC).4

After trial, on November 28, 2001, the RTC rendered its decision in favor of the plaintiffs,5 viz:

Wherefore, in the light of the foregoing, judgment is hereby rendered in favor of the plaintiff and
against the defendants ordering the latter to pay plaintiff, jointly and severally, the following, to wit:

1. ₱ 503,462.74 amount of the third billing, additional accomplished work and retention money
2. ₱ 5,716,729.00 in actual damages

3. ₱ 10,000,000.00 in moral damages

4. ₱ 150,000.00 and ₱ 1,500.00 per appearance as attorney’s fees; and

5. Costs of suit.

SO ORDERED.

Following the RTC’s denial of its motion for reconsideration on May 7, 2002,6 the UP filed a notice of
appeal on June 3, 2002.7 Stern Builders and dela Cruz opposed the notice of appeal on the ground of its
filing being belated, and moved for the execution of the decision. The UP countered that the notice of
appeal was filed within the reglementary period because the UP’s Office of Legal Affairs (OLS) in Diliman,
Quezon City received the order of denial only on May 31, 2002. On September 26, 2002, the RTC denied
due course to the notice of appeal for having been filed out of time and granted the private
respondents’ motion for execution.8

The RTC issued the writ of execution on October 4, 2002,9 and the sheriff of the RTC served the writ of
execution and notice of demand upon the UP, through its counsel, on October 9, 2002.10 The UP filed
an urgent motion to reconsider the order dated September 26, 2002, to quash the writ of execution
dated October 4, 2002, and to restrain the proceedings.11 However, the RTC denied the urgent motion
on April 1, 2003.12

On June 24, 2003, the UP assailed the denial of due course to its appeal through a petition
for certiorari in the Court of Appeals (CA), docketed as CA-G.R. No. 77395.13

On February 24, 2004, the CA dismissed the petition for certiorari upon finding that the UP’s notice of
appeal had been filed late,14 stating:

Records clearly show that petitioners received a copy of the Decision dated November 28, 2001 and
January 7, 2002, thus, they had until January 22, 2002 within which to file their appeal. On January 16,
2002 or after the lapse of nine (9) days, petitioners through their counsel Atty. Nolasco filed a Motion for
Reconsideration of the aforesaid decision, hence, pursuant to the rules, petitioners still had six (6)
remaining days to file their appeal. As admitted by the petitioners in their petition (Rollo, p. 25), Atty.
Nolasco received a copy of the Order denying their motion for reconsideration on May 17, 2002, thus,
petitioners still has until May 23, 2002 (the remaining six (6) days) within which to file their appeal.
Obviously, petitioners were not able to file their Notice of Appeal on May 23, 2002 as it was only filed on
June 3, 2002.

In view of the said circumstances, We are of the belief and so holds that the Notice of Appeal filed by
the petitioners was really filed out of time, the same having been filed seventeen (17) days late of the
reglementary period. By reason of which, the decision dated November 28, 2001 had already become
final and executory. "Settled is the rule that the perfection of an appeal in the manner and within the
period permitted by law is not only mandatory but jurisdictional, and failure to perfect that appeal
renders the challenged judgment final and executory. This is not an empty procedural rule but is
grounded on fundamental considerations of public policy and sound practice." (Ram’s Studio and
Photographic Equipment, Inc. vs. Court of Appeals, 346 SCRA 691, 696). Indeed, Atty. Nolasco received
the order of denial of the Motion for Reconsideration on May 17, 2002 but filed a Notice of Appeal only
on June 3, 3003. As such, the decision of the lower court ipso facto became final when no appeal was
perfected after the lapse of the reglementary period. This procedural caveat cannot be trifled with, not
even by the High Court.15

The UP sought a reconsideration, but the CA denied the UP’s motion for reconsideration on April 19,
2004.16

On May 11, 2004, the UP appealed to the Court by petition for review on certiorari (G.R. No. 163501).

On June 23, 2004, the Court denied the petition for review.17 The UP moved for the reconsideration of
the denial of its petition for review on August 29, 2004,18 but the Court denied the motion on October
6, 2004.19 The denial became final and executory on November 12, 2004.20

In the meanwhile that the UP was exhausting the available remedies to overturn the denial of due
course to the appeal and the issuance of the writ of execution, Stern Builders and dela Cruz filed in the
RTC their motions for execution despite their previous motion having already been granted and despite
the writ of execution having already issued. On June 11, 2003, the RTC granted another motion for
execution filed on May 9, 2003 (although the RTC had already issued the writ of execution on October 4,
2002).21

On June 23, 2003 and July 25, 2003, respectively, the sheriff served notices of garnishment on the UP’s
depository banks, namely: Land Bank of the Philippines (Buendia Branch) and the Development Bank of
the Philippines (DBP), Commonwealth Branch.22 The UP assailed the garnishment through an urgent
motion to quash the notices of garnishment;23 and a motion to quash the writ of execution dated May
9, 2003.24

On their part, Stern Builders and dela Cruz filed their ex parte motion for issuance of a release order.25

On October 14, 2003, the RTC denied the UP’s urgent motion to quash, and granted Stern Builders and
dela Cruz’s ex parte motion for issuance of a release order.26

The UP moved for the reconsideration of the order of October 14, 2003, but the RTC denied the motion
on November 7, 2003.27

On January 12, 2004, Stern Builders and dela Cruz again sought the release of the garnished
funds.28 Despite the UP’s opposition,29 the RTC granted the motion to release the garnished funds on
March 16, 2004.30 On April 20, 2004, however, the RTC held in abeyance the enforcement of the writs
of execution issued on October 4, 2002 and June 3, 2003 and all the ensuing notices of garnishment,
citing Section 4, Rule 52, Rules of Court, which provided that the pendency of a timely motion for
reconsideration stayed the execution of the judgment.31

On December 21, 2004, the RTC, through respondent Judge Agustin S. Dizon, authorized the release of
the garnished funds of the UP,32 to wit:

WHEREFORE, premises considered, there being no more legal impediment for the release of the
garnished amount in satisfaction of the judgment award in the instant case, let the amount garnished be
immediately released by the Development Bank of the Philippines, Commonwealth Branch, Quezon City
in favor of the plaintiff.

SO ORDERED.
The UP was served on January 3, 2005 with the order of December 21, 2004 directing DBP to release the
garnished funds.33

On January 6, 2005, Stern Builders and dela Cruz moved to cite DBP in direct contempt of court for its
non-compliance with the order of release.34

Thereupon, on January 10, 2005, the UP brought a petition for certiorari in the CA to challenge the
jurisdiction of the RTC in issuing the order of December 21, 2004 (CA-G.R. CV No. 88125).35 Aside from
raising the denial of due process, the UP averred that the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in ruling that there was no longer any legal impediment to the
release of the garnished funds. The UP argued that government funds and properties could not be
seized by virtue of writs of execution or garnishment, as held in Department of Agriculture v. National
Labor Relations Commission,36 and citing Section 84 of Presidential Decree No. 1445 to the effect that
"revenue funds shall not be paid out of any public treasury or depository except in pursuance of an
appropriation law or other specific statutory authority;" and that the order of garnishment clashed with
the ruling in University of the Philippines Board of Regents v. Ligot-Telan37 to the effect that the funds
belonging to the UP were public funds.

On January 19, 2005, the CA issued a temporary restraining order (TRO) upon application by the UP.38

On March 22, 2005, Stern Builders and dela Cruz filed in the RTC their amended motion for sheriff’s
assistance to implement the release order dated December 21, 2004, stating that the 60-day period of
the TRO of the CA had already lapsed.39 The UP opposed the amended motion and countered that the
implementation of the release order be suspended.40

On May 3, 2005, the RTC granted the amended motion for sheriff’s assistance and directed the sheriff to
proceed to the DBP to receive the check in satisfaction of the judgment.41

The UP sought the reconsideration of the order of May 3, 2005.42

On May 16, 2005, DBP filed a motion to consign the check representing the judgment award and to
dismiss the motion to cite its officials in contempt of court.43

On May 23, 2005, the UP presented a motion to withhold the release of the payment of the judgment
award.44

On July 8, 2005, the RTC resolved all the pending matters,45 noting that the DBP had already delivered
to the sheriff Manager’s Check No. 811941 for ₱ 16,370,191.74 representing the garnished funds
payable to the order of Stern Builders and dela Cruz as its compliance with the RTC’s order dated
December 21, 2004.46 However, the RTC directed in the same order that Stern Builders and dela Cruz
should not encash the check or withdraw its amount pending the final resolution of the UP’s petition for
certiorari, to wit:47

To enable the money represented in the check in question (No. 00008119411) to earn interest during
the pendency of the defendant University of the Philippines application for a writ of injunction with the
Court of Appeals the same may now be deposited by the plaintiff at the garnishee Bank (Development
Bank of the Philippines), the disposition of the amount represented therein being subject to the final
outcome of the case of the University of the Philippines et al., vs. Hon. Agustin S. Dizon et al., (CA G.R.
88125) before the Court of Appeals.
Let it be stated herein that the plaintiff is not authorized to encash and withdraw the amount
represented in the check in question and enjoy the same in the fashion of an owner during the
pendency of the case between the parties before the Court of Appeals which may or may not be
resolved in plaintiff’s favor.

With the end in view of seeing to it that the check in question is deposited by the plaintiff at the
Development Bank of the Philippines (garnishee bank), Branch Sheriff Herlan Velasco is directed to
accompany and/or escort the plaintiff in making the deposit of the check in question.

SO ORDERED.

On September 16, 2005, the CA promulgated its assailed decision dismissing the UP’s petition for
certiorari, ruling that the UP had been given ample opportunity to contest the motion to direct the DBP
to deposit the check in the name of Stern Builders and dela Cruz; and that the garnished funds could be
the proper subject of garnishment because they had been already earmarked for the project, with the
UP holding the funds only in a fiduciary capacity,48 viz:

Petitioners next argue that the UP funds may not be seized for execution or garnishment to satisfy the
judgment award. Citing Department of Agriculture vs. NLRC, University of the Philippines Board of
Regents vs. Hon. Ligot-Telan, petitioners contend that UP deposits at Land Bank and the Development
Bank of the Philippines, being government funds, may not be released absent an appropriations bill
from Congress.

The argument is specious. UP entered into a contract with private respondents for the expansion and
renovation of the Arts and Sciences Building of its campus in Los Baños, Laguna. Decidedly, there was
already an appropriations earmarked for the said project. The said funds are retained by UP, in a
fiduciary capacity, pending completion of the construction project.

We agree with the trial Court [sic] observation on this score:

"4. Executive Order No. 109 (Directing all National Government Agencies to Revert Certain Accounts
Payable to the Cumulative Result of Operations of the National Government and for Other Purposes)
Section 9. Reversion of Accounts Payable, provides that, all 1995 and prior years documented accounts
payable and all undocumented accounts regardless of the year they were incurred shall be reverted to
the Cumulative Result of Operations of the National Government (CROU). This shall apply to accounts
payable of all funds, except fiduciary funds, as long as the purpose for which the funds were created
have not been accomplished and accounts payable under foreign assisted projects for the duration of
the said project. In this regard, the Department of Budget and Management issued Joint-Circular No. 99-
6 4.0 (4.3) Procedural Guidelines which provides that all accounts payable that reverted to the CROU
may be considered for payment upon determination thru administrative process, of the existence,
validity and legality of the claim. Thus, the allegation of the defendants that considering no
appropriation for the payment of any amount awarded to plaintiffs appellee the funds of defendant-
appellants may not be seized pursuant to a writ of execution issued by the regular court is misplaced.
Surely when the defendants and the plaintiff entered into the General Construction of Agreement there
is an amount already allocated by the latter for the said project which is no longer subject of future
appropriation."49
After the CA denied their motion for reconsideration on December 23, 2005, the petitioners appealed by
petition for review.

Matters Arising During the Pendency of the Petition

On January 30, 2006, Judge Dizon of the RTC (Branch 80) denied Stern Builders and dela Cruz’s motion to
withdraw the deposit, in consideration of the UP’s intention to appeal to the CA,50 stating:

Since it appears that the defendants are intending to file a petition for review of the Court of Appeals
resolution in CA-G.R. No. 88125 within the reglementary period of fifteen (15) days from receipt of
resolution, the Court agrees with the defendants stand that the granting of plaintiffs’ subject motion is
premature.

Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the
"disposition of the amount represented therein being subject to the final outcome of the case of the
University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before the Court
of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same
will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has
rendered its own final judgment or resolution.51

However, on January 22, 2007, the UP filed an Urgent Application for A Temporary Restraining Order
and/or A Writ of Preliminary Injunction,52 averring that on January 3, 2007, Judge Maria Theresa dela
Torre-Yadao (who had meanwhile replaced Judge Dizon upon the latter’s appointment to the CA) had
issued another order allowing Stern Builders and dela Cruz to withdraw the deposit,53 to wit:

It bears stressing that defendants’ liability for the payment of the judgment obligation has become
indubitable due to the final and executory nature of the Decision dated November 28, 2001. Insofar as
the payment of the [sic] judgment obligation is concerned, the Court believes that there is nothing more
the defendant can do to escape liability. It is observed that there is nothing more the defendant can do
to escape liability. It is observed that defendant U.P. System had already exhausted all its legal remedies
to overturn, set aside or modify the decision (dated November 28, 2001( rendered against it. The way
the Court sees it, defendant U.P. System’s petition before the Supreme Court concerns only with the
manner by which said judgment award should be satisfied. It has nothing to do with the legality or
propriety thereof, although it prays for the deletion of [sic] reduction of the award of moral damages.

It must be emphasized that this Court’s finding, i.e., that there was sufficient appropriation earmarked
for the project, was upheld by the Court of Appeals in its decision dated September 16, 2005. Being a
finding of fact, the Supreme Court will, ordinarily, not disturb the same was said Court is not a trier of
fact. Such being the case, defendants’ arguments that there was no sufficient appropriation for the
payment of the judgment obligation must fail.

While it is true that the former Presiding Judge of this Court in its Order dated January 30, 2006 had
stated that:

Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the
"disposition of the amount represented therein being subject to the final outcome of the case of the
University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before the Court
of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same
will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has
rendered its own final judgment or resolution.

it should be noted that neither the Court of Appeals nor the Supreme Court issued a preliminary
injunction enjoining the release or withdrawal of the garnished amount. In fact, in its present petition
for review before the Supreme Court, U.P. System has not prayed for the issuance of a writ of
preliminary injunction. Thus, the Court doubts whether such writ is forthcoming.

The Court honestly believes that if defendants’ petition assailing the Order of this Court dated December
31, 2004 granting the motion for the release of the garnished amount was meritorious, the Court of
Appeals would have issued a writ of injunction enjoining the same. Instead, said appellate court not only
refused to issue a wit of preliminary injunction prayed for by U.P. System but denied the petition, as
well.54

The UP contended that Judge Yadao thereby effectively reversed the January 30, 2006 order of Judge
Dizon disallowing the withdrawal of the garnished amount until after the decision in the case would
have become final and executory.

Although the Court issued a TRO on January 24, 2007 to enjoin Judge Yadao and all persons acting
pursuant to her authority from enforcing her order of January 3, 2007,55 it appears that on January 16,
2007, or prior to the issuance of the TRO, she had already directed the DBP to forthwith release the
garnished amount to Stern Builders and dela Cruz; 56 and that DBP had forthwith complied with the
order on January 17, 2007 upon the sheriff’s service of the order of Judge Yadao.57

These intervening developments impelled the UP to file in this Court a supplemental petition on January
26, 2007,58 alleging that the RTC (Judge Yadao) gravely erred in ordering the immediate release of the
garnished amount despite the pendency of the petition for review in this Court.

The UP filed a second supplemental petition59 after the RTC (Judge Yadao) denied the UP’s motion for
the redeposit of the withdrawn amount on April 10, 2007,60 to wit:

This resolves defendant U.P. System’s Urgent Motion to Redeposit Judgment Award praying that
plaintiffs be directed to redeposit the judgment award to DBP pursuant to the Temporary Restraining
Order issued by the Supreme Court. Plaintiffs opposed the motion and countered that the Temporary
Restraining Order issued by the Supreme Court has become moot and academic considering that the act
sought to be restrained by it has already been performed. They also alleged that the redeposit of the
judgment award was no longer feasible as they have already spent the same.

It bears stressing, if only to set the record straight, that this Court did not – in its Order dated January 3,
2007 (the implementation of which was restrained by the Supreme Court in its Resolution dated January
24, 2002) – direct that that garnished amount "be deposited with the garnishee bank (Development
Bank of the Philippines)". In the first place, there was no need to order DBP to make such deposit, as the
garnished amount was already deposited in the account of plaintiffs with the DBP as early as May 13,
2005. What the Court granted in its Order dated January 3, 2007 was plaintiff’s motion to allow the
release of said deposit. It must be recalled that the Court found plaintiff’s motion meritorious and, at
that time, there was no restraining order or preliminary injunction from either the Court of Appeals or
the Supreme Court which could have enjoined the release of plaintiffs’ deposit. The Court also took into
account the following factors:
a) the Decision in this case had long been final and executory after it was rendered on November 28,
2001;

b) the propriety of the dismissal of U.P. System’s appeal was upheld by the Supreme Court;

c) a writ of execution had been issued;

d) defendant U.P. System’s deposit with DBP was garnished pursuant to a lawful writ of execution issued
by the Court; and

e) the garnished amount had already been turned over to the plaintiffs and deposited in their account
with DBP.

The garnished amount, as discussed in the Order dated January 16, 2007, was already owned by the
plaintiffs, having been delivered to them by the Deputy Sheriff of this Court pursuant to par. (c), Section
9, Rule 39 of the 1997 Rules of Civil Procedure. Moreover, the judgment obligation has already been
fully satisfied as per Report of the Deputy Sheriff.

Anent the Temporary Restraining Order issued by the Supreme Court, the same has become functus
oficio, having been issued after the garnished amount had been released to the plaintiffs. The judgment
debt was released to the plaintiffs on January 17, 2007, while the Temporary Restraining Order issued by
the Supreme Court was received by this Court on February 2, 2007. At the time of the issuance of the
Restraining Order, the act sought to be restrained had already been done, thereby rendering the said
Order ineffectual.

After a careful and thorough study of the arguments advanced by the parties, the Court is of the
considered opinion that there is no legal basis to grant defendant U.P. System’s motion to redeposit the
judgment amount. Granting said motion is not only contrary to law, but it will also render this Court’s
final executory judgment nugatory. Litigation must end and terminate sometime and somewhere, and it
is essential to an effective administration of justice that once a judgment has become final the issue or
cause involved therein should be laid to rest. This doctrine of finality of judgment is grounded on
fundamental considerations of public policy and sound practice. In fact, nothing is more settled in law
than that once a judgment attains finality it thereby becomes immutable and unalterable. It may no
longer be modified in any respect, even if the modification is meant to correct what is perceived to be
an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be
made by the court rendering it or by the highest court of the land.

WHEREFORE, premises considered, finding defendant U.P. System’s Urgent Motion to Redeposit
Judgment Award devoid of merit, the same is hereby DENIED.

SO ORDERED.

Issues

The UP now submits that:

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISMISSING THE PETITION, ALLOWING IN
EFFECT THE GARNISHMENT OF UP FUNDS, WHEN IT RULED THAT FUNDS HAVE ALREADY BEEN
EARMARKED FOR THE CONSTRUCTION PROJECT; AND THUS, THERE IS NO NEED FOR FURTHER
APPROPRIATIONS.

II

THE COURT OF APPEALS COMMITTED GRAVE ERROR IN ALLOWING GARNISHMENT OF A STATE

UNIVERSITY’S FUNDS IN VIOLATION OF ARTICLE XIV, SECTION 5(5) OF THE CONSTITUTION.

III

IN THE ALTERNATIVE, THE UNIVERSITY INVOKES EQUITY AND THE REVIEW POWERS OF THIS
HONORABLE COURT TO MODIFY, IF NOT TOTALLY DELETE THE AWARD OF ₱ 10 MILLION AS MORAL
DAMAGES TO RESPONDENTS.

IV

THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE
JUDGMENT AWARD IN ITS ORDER DATED 3 JANUARY 2007 ON THE GROUND OF EQUITY AND JUDICIAL
COURTESY.

THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE
JUDGMENT AWARD IN ITS ORDER DATED 16 JANUARY 2007 ON THE GROUND THAT PETITIONER
UNIVERSITY STILL HAS A PENDING MOTION FOR RECONSIDERATION OF THE ORDER DATED 3 JANUARY
2007.

VI

THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN NOT ORDERING THE REDEPOSIT OF THE GARNISHED
AMOUNT TO THE DBP IN VIOLATION OF THE CLEAR LANGUAGE OF THE SUPREME COURT RESOLUTION
DATED 24 JANUARY 2007.

The UP argues that the amount earmarked for the construction project had been purposely set aside
only for the aborted project and did not include incidental matters like the awards of actual damages,
moral damages and attorney’s fees. In support of its argument, the UP cited Article 12.2 of the General
Construction Agreement, which stipulated that no deductions would be allowed for the payment of
claims, damages, losses and expenses, including attorney’s fees, in case of any litigation arising out of
the performance of the work. The UP insists that the CA decision was inconsistent with the rulings in
Commissioner of Public Highways v. San Diego61 and Department of Agriculture v. NLRC62 to the effect
that government funds and properties could not be seized under writs of execution or garnishment to
satisfy judgment awards.

Furthermore, the UP contends that the CA contravened Section 5, Article XIV of the Constitution by
allowing the garnishment of UP funds, because the garnishment resulted in a substantial reduction of
the UP’s limited budget allocated for the remuneration, job satisfaction and fulfillment of the best
available teachers; that Judge Yadao should have exhibited judicial courtesy towards the Court due to
the pendency of the UP’s petition for review; and that she should have also desisted from declaring that
the TRO issued by this Court had become functus officio.
Lastly, the UP states that the awards of actual damages of ₱ 5,716,729.00 and moral damages of ₱ 10
million should be reduced, if not entirely deleted, due to its being unconscionable, inequitable and
detrimental to public service.

In contrast, Stern Builders and dela Cruz aver that the petition for review was fatally defective for its
failure to mention the other cases upon the same issues pending between the parties (i.e., CA-G.R. No.
77395 and G.R No. 163501); that the UP was evidently resorting to forum shopping, and to delaying the
satisfaction of the final judgment by the filing of its petition for review; that the ruling in Commissioner
of Public Works v. San Diego had no application because there was an appropriation for the project; that
the UP retained the funds allotted for the project only in a fiduciary capacity; that the contract price had
been meanwhile adjusted to ₱ 22,338,553.25, an amount already more than sufficient to cover the
judgment award; that the UP’s prayer to reduce or delete the award of damages had no factual basis,
because they had been gravely wronged, had been deprived of their source of income, and had suffered
untold miseries, discomfort, humiliation and sleepless years; that dela Cruz had even been constrained
to sell his house, his equipment and the implements of his trade, and together with his family had been
forced to live miserably because of the wrongful actuations of the UP; and that the RTC correctly
declared the Court’s TRO to be already functus officio by reason of the withdrawal of the garnished
amount from the DBP.

The decisive issues to be considered and passed upon are, therefore:

(a) whether the funds of the UP were the proper subject of garnishment in order to satisfy the judgment
award; and (b) whether the UP’s prayer for the deletion of the awards of actual damages of ₱
5,716,729.00, moral damages of ₱ 10,000,000.00 and attorney’s fees of ₱ 150,000.00 plus ₱ 1,500.00
per appearance could be granted despite the finality of the judgment of the RTC.

Ruling

The petition for review is meritorious.

I.
UP’s funds, being government funds,
are not subject to garnishment

The UP was founded on June 18, 1908 through Act 1870 to provide advanced instruction in literature,
philosophy, the sciences, and arts, and to give professional and technical training to deserving
students.63 Despite its establishment as a body corporate,64 the UP remains to be a "chartered
institution"65 performing a legitimate government function. It is an institution of higher learning, not a
corporation established for profit and declaring any dividends.66 In enacting Republic Act No. 9500 (The
University of the Philippines Charter of 2008), Congress has declared the UP as the national
university67 "dedicated to the search for truth and knowledge as well as the development of future
leaders."68

Irrefragably, the UP is a government instrumentality,69 performing the State’s constitutional mandate

of promoting quality and accessible education.70 As a government instrumentality, the UP administers
special funds sourced from the fees and income enumerated under Act No. 1870 and Section 1 of
Executive Order No. 714,71 and from the yearly appropriations, to achieve the purposes laid down by
Section 2 of Act 1870, as expanded in Republic Act No. 9500.72 All the funds going into the possession of
the UP, including any interest accruing from the deposit of such funds in any banking institution,
constitute a "special trust fund," the disbursement of which should always be aligned with the UP’s
mission and purpose,73 and should always be subject to auditing by the COA.74

Presidential Decree No. 1445 defines a "trust fund" as a fund that officially comes in the possession of an
agency of the government or of a public officer as trustee, agent or administrator, or that is received for
the fulfillment of some obligation.75 A trust fund may be utilized only for the "specific purpose for which
the trust was created or the funds received."76

The funds of the UP are government funds that are public in character. They include the income
accruing from the use of real property ceded to the UP that may be spent only for the attainment of its
institutional objectives.77 Hence, the funds subject of this action could not be validly made the subject
of the RTC’s writ of execution or garnishment. The adverse judgment rendered against the UP in a suit
to which it had impliedly consented was not immediately enforceable by execution against the
UP,78 because suability of the State did not necessarily mean its liability.79

A marked distinction exists between suability of the State and its liability. As the Court succinctly stated
in Municipality of San Fernando, La Union v. Firme:80

A distinction should first be made between suability and liability. "Suability depends on the consent of
the state to be sued, liability on the applicable law and the established facts. The circumstance that a
state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if
it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed
itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the
chance to prove, if it can, that the defendant is liable.

Also, in Republic v. Villasor,81 where the issuance of an alias writ of execution directed against the funds
of the Armed Forces of the Philippines to satisfy a final and executory judgment was nullified, the Court
said:

xxx The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant’s action "only up to the completion of proceedings anterior
to the stage of execution" and that the power of the Courts ends when the judgment is rendered, since
government funds and properties may not be seized under writs of execution or garnishment to satisfy
such judgments, is based on obvious considerations of public policy. Disbursements of public funds must
be covered by the corresponding appropriation as required by law. The functions and public services
rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as appropriated by law.

The UP correctly submits here that the garnishment of its funds to satisfy the judgment awards of actual
and moral damages (including attorney’s fees) was not validly made if there was no special
appropriation by Congress to cover the liability. It was, therefore, legally unwarranted for the CA to
agree with the RTC’s holding in the order issued on April 1, 2003 that no appropriation by Congress to
allocate and set aside the payment of the judgment awards was necessary because "there (were)
already an appropriations (sic) earmarked for the said project."82 The CA and the RTC thereby
unjustifiably ignored the legal restriction imposed on the trust funds of the Government and its agencies
and instrumentalities to be used exclusively to fulfill the purposes for which the trusts were created or
for which the funds were received except upon express authorization by Congress or by the head of a
government agency in control of the funds, and subject to pertinent budgetary laws, rules and
regulations.83

Indeed, an appropriation by Congress was required before the judgment that rendered the UP liable for
moral and actual damages (including attorney’s fees) would be satisfied considering that such monetary
liabilities were not covered by the "appropriations earmarked for the said project." The Constitution
strictly mandated that "(n)o money shall be paid out of the Treasury except in pursuance of an
appropriation made by law."84

II
COA must adjudicate private respondents’ claim
before execution should proceed

The execution of the monetary judgment against the UP was within the primary jurisdiction of the COA.
This was expressly provided in Section 26 of Presidential Decree No. 1445, to wit:

Section 26. General jurisdiction. - The authority and powers of the Commission shall extend to and
comprehend all matters relating to auditing procedures, systems and controls, the keeping of the
general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten
years, the examination and inspection of the books, records, and papers relating to those accounts; and
the audit and settlement of the accounts of all persons respecting funds or property received or held by
them in an accountable capacity, as well as the examination, audit, and settlement of all debts and
claims of any sort due from or owing to the Government or any of its subdivisions, agencies and
instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations,
including their subsidiaries, and other self-governing boards, commissions, or agencies of the
Government, and as herein prescribed, including non governmental entities subsidized by the
government, those funded by donations through the government, those required to pay levies or
government share, and those for which the government has put up a counterpart fund or those partly
funded by the government.

It was of no moment that a final and executory decision already validated the claim against the UP. The
settlement of the monetary claim was still subject to the primary jurisdiction of the COA despite the final
decision of the RTC having already validated the claim.85 As such, Stern Builders and dela Cruz as the
claimants had no alternative except to first seek the approval of the COA of their monetary claim.

On its part, the RTC should have exercised utmost caution, prudence and judiciousness in dealing with
the motions for execution against the UP and the garnishment of the UP’s funds. The RTC had no
authority to direct the immediate withdrawal of any portion of the garnished funds from the depository
banks of the UP. By eschewing utmost caution, prudence and judiciousness in dealing with the execution
and garnishment, and by authorizing the withdrawal of the garnished funds of the UP, the RTC acted
beyond its jurisdiction, and all its orders and issuances thereon were void and of no legal effect,
specifically: (a) the order Judge Yadao issued on January 3, 2007 allowing Stern Builders and dela Cruz to
withdraw the deposited garnished amount; (b) the order Judge Yadao issued on January 16, 2007
directing DBP to forthwith release the garnish amount to Stern Builders and dela Cruz; (c) the sheriff’s
report of January 17, 2007 manifesting the full satisfaction of the writ of execution; and (d) the order of
April 10, 2007 deying the UP’s motion for the redeposit of the withdrawn amount. Hence, such orders
and issuances should be struck down without exception.

Nothing extenuated Judge Yadao’s successive violations of Presidential Decree No. 1445. She was aware
of Presidential Decree No. 1445, considering that the Court circulated to all judges its Administrative
Circular No. 10-2000,86 issued on October 25, 2000, enjoining them "to observe utmost caution,
prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against
government agencies and local government units" precisely in order to prevent the circumvention of
Presidential Decree No. 1445, as well as of the rules and procedures of the COA, to wit:

In order to prevent possible circumvention of the rules and procedures of the Commission on Audit,
judges are hereby enjoined to observe utmost caution, prudence and judiciousness in the issuance of
writs of execution to satisfy money judgments against government agencies and local government units.

Judges should bear in mind that in Commissioner of Public Highways v. San Diego (31 SCRA 617, 625
1970), this Court explicitly stated:

"The universal rule that where the State gives its consent to be sued by private parties either by general
or special law, it may limit claimant’s action ‘only up to the completion of proceedings anterior to the
stage of execution’ and that the power of the Court ends when the judgment is rendered, since
government funds and properties may not be seized under writs of execution or garnishment to satisfy
such judgments, is based on obvious considerations of public policy. Disbursements of public funds must
be covered by the corresponding appropriation as required by law. The functions and public services
rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as appropriated by law.

Moreover, it is settled jurisprudence that upon determination of State liability, the prosecution,
enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures
laid down in P.D. No. 1445, otherwise known as the Government Auditing Code of the Philippines
(Department of Agriculture v. NLRC, 227 SCRA 693, 701-02 1993 citing Republic vs. Villasor, 54 SCRA 84
1973). All money claims against the Government must first be filed with the Commission on Audit which
must act upon it within sixty days. Rejection of the claim will authorize the claimant to elevate the
matter to the Supreme Court on certiorari and in effect, sue the State thereby (P.D. 1445, Sections 49-
50).

However, notwithstanding the rule that government properties are not subject to levy and execution
unless otherwise provided for by statute (Republic v. Palacio, 23 SCRA 899 1968; Commissioner of Public
Highways v. San Diego, supra) or municipal ordinance (Municipality of Makati v. Court of Appeals, 190
SCRA 206 1990), the Court has, in various instances, distinguished between government funds and
properties for public use and those not held for public use. Thus, in Viuda de Tan Toco v. Municipal
Council of Iloilo (49 Phil 52 1926, the Court ruled that "where property of a municipal or other public
corporation is sought to be subjected to execution to satisfy judgments recovered against such
corporation, the question as to whether such property is leviable or not is to be determined by the
usage and purposes for which it is held." The following can be culled from Viuda de Tan Toco v.
Municipal Council of Iloilo:
1. Properties held for public uses – and generally everything held for governmental purposes – are not
subject to levy and sale under execution against such corporation. The same rule applies to funds in the
hands of a public officer and taxes due to a municipal corporation.

2. Where a municipal corporation owns in its proprietary capacity, as distinguished from its public or
government capacity, property not used or used for a public purpose but for quasi-private purposes, it is
the general rule that such property may be seized and sold under execution against the corporation.

3. Property held for public purposes is not subject to execution merely because it is temporarily used for
private purposes. If the public use is wholly abandoned, such property becomes subject to execution.

This Administrative Circular shall take effect immediately and the Court Administrator shall see to it that
it is faithfully implemented.

Although Judge Yadao pointed out that neither the CA nor the Court had issued as of then any writ of
preliminary injunction to enjoin the release or withdrawal of the garnished amount, she did not need
any writ of injunction from a superior court to compel her obedience to the law. The Court is disturbed
that an experienced judge like her should look at public laws like Presidential Decree No. 1445
dismissively instead of loyally following and unquestioningly implementing them. That she did so turned
her court into an oppressive bastion of mindless tyranny instead of having it as a true haven for the
seekers of justice like the UP.

III
Period of appeal did not start without effective
service of decision upon counsel of record;
Fresh-period rule announced in
Neypes v. Court of Appeals
can be given retroactive application

The UP next pleads that the Court gives due course to its petition for review in the name of equity in
order to reverse or modify the adverse judgment against it despite its finality. At stake in the UP’s plea
for equity was the return of the amount of ₱ 16,370,191.74 illegally garnished from its trust funds.
Obstructing the plea is the finality of the judgment based on the supposed tardiness of UP’s appeal,
which the RTC declared on September 26, 2002. The CA upheld the declaration of finality on February
24, 2004, and the Court itself denied the UP’s petition for review on that issue on May 11, 2004 (G.R.
No. 163501). The denial became final on November 12, 2004.

It is true that a decision that has attained finality becomes immutable and unalterable, and cannot be
modified in any respect,87 even if the modification is meant to correct erroneous conclusions of fact
and law, and whether the modification is made by the court that rendered it or by this Court as the
highest court of the land.88 Public policy dictates that once a judgment becomes final, executory and
unappealable, the prevailing party should not be deprived of the fruits of victory by some subterfuge
devised by the losing party. Unjustified delay in the enforcement of such judgment sets at naught the
role and purpose of the courts to resolve justiciable controversies with finality.89 Indeed, all litigations
must at some time end, even at the risk of occasional errors.

But the doctrine of immutability of a final judgment has not been absolute, and has admitted several
exceptions, among them: (a) the correction of clerical errors; (b) the so-called nunc pro tunc entries that
cause no prejudice to any party; (c) void judgments; and (d) whenever circumstances transpire after the
finality of the decision that render its execution unjust and inequitable.90 Moreover, in Heirs of Maura
So v. Obliosca,91 we stated that despite the absence of the preceding circumstances, the Court is not
precluded from brushing aside procedural norms if only to serve the higher interests of justice and
equity. Also, in Gumaru v. Quirino State College,92 the Court nullified the proceedings and the writ of
execution issued by the RTC for the reason that respondent state college had not been represented in
the litigation by the Office of the Solicitor General.

We rule that the UP’s plea for equity warrants the Court’s exercise of the exceptional power to disregard
the declaration of finality of the judgment of the RTC for being in clear violation of the UP’s right to due
process.

Both the CA and the RTC found the filing on June 3, 2002 by the UP of the notice of appeal to be tardy.
They based their finding on the fact that only six days remained of the UP’s reglementary 15-day period
within which to file the notice of appeal because the UP had filed a motion for reconsideration on
January 16, 2002 vis-à-vis the RTC’s decision the UP received on January 7, 2002; and that because the
denial of the motion for reconsideration had been served upon Atty. Felimon D. Nolasco of the UPLB
Legal Office on May 17, 2002, the UP had only until May 23, 2002 within which to file the notice of
appeal.

The UP counters that the service of the denial of the motion for reconsideration upon Atty. Nolasco was
defective considering that its counsel of record was not Atty. Nolasco of the UPLB Legal Office but the
OLS in Diliman, Quezon City; and that the period of appeal should be reckoned from May 31, 2002, the
date when the OLS received the order. The UP submits that the filing of the notice of appeal on June 3,
2002 was well within the reglementary period to appeal.

We agree with the submission of the UP.

Firstly, the service of the denial of the motion for reconsideration upon Atty. Nolasco of the UPLB Legal
Office was invalid and ineffectual because he was admittedly not the counsel of record of the UP. The
rule is that it is on the counsel and not the client that the service should be made.93

That counsel was the OLS in Diliman, Quezon City, which was served with the denial only on May 31,
2002. As such, the running of the remaining period of six days resumed only on June 1,
2002,94 rendering the filing of the UP’s notice of appeal on June 3, 2002 timely and well within the
remaining days of the UP’s period to appeal.

Verily, the service of the denial of the motion for reconsideration could only be validly made upon the
OLS in Diliman, and no other. The fact that Atty. Nolasco was in the employ of the UP at the UPLB Legal
Office did not render the service upon him effective. It is settled that where a party has appeared by
counsel, service must be made upon such counsel.95 Service on the party or the party’s employee is not
effective because such notice is not notice in law.96 This is clear enough from Section 2, second
paragraph, of Rule 13, Rules of Court, which explicitly states that: "If any party has appeared by counsel,
service upon him shall be made upon his counsel or one of them, unless service upon the party himself
is ordered by the court. Where one counsel appears for several parties, he shall only be entitled to one
copy of any paper served upon him by the opposite side." As such, the period to appeal resumed only on
June 1, 2002, the date following the service on May 31, 2002 upon the OLS in Diliman of the copy of the
decision of the RTC, not from the date when the UP was notified.97

Accordingly, the declaration of finality of the judgment of the RTC, being devoid of factual and legal
bases, is set aside.

Secondly, even assuming that the service upon Atty. Nolasco was valid and effective, such that the
remaining period for the UP to take a timely appeal would end by May 23, 2002, it would still not be
correct to find that the judgment of the RTC became final and immutable thereafter due to the notice of
appeal being filed too late on June 3, 2002.

In so declaring the judgment of the RTC as final against the UP, the CA and the RTC applied the rule
contained in the second paragraph of Section 3, Rule 41 of the Rules of Court to the effect that the filing
of a motion for reconsideration interrupted the running of the period for filing the appeal; and that the
period resumed upon notice of the denial of the motion for reconsideration. For that reason, the CA and
the RTC might not be taken to task for strictly adhering to the rule then prevailing.

However, equity calls for the retroactive application in the UP’s favor of the fresh-period rule that the
Court first announced in mid-September of 2005 through its ruling in Neypes v. Court of Appeals,98 viz:

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal
their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice
of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new
trial or motion for reconsideration.

The retroactive application of the fresh-period rule, a procedural law that aims "to regiment or make the
appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion
for reconsideration (whether full or partial) or any final order or resolution,"99 is impervious to any
serious challenge. This is because there are no vested rights in rules of procedure.100 A law or
regulation is procedural when it prescribes rules and forms of procedure in order that courts may be
able to administer justice.101 It does not come within the legal conception of a retroactive law, or is not
subject of the general rule prohibiting the retroactive operation of statues, but is given retroactive effect
in actions pending and undetermined at the time of its passage without violating any right of a person
who may feel that he is adversely affected.

We have further said that a procedural rule that is amended for the benefit of litigants in furtherance of
the administration of justice shall be retroactively applied to likewise favor actions then pending, as
equity delights in equality.102 We may even relax stringent procedural rules in order to serve
substantial justice and in the exercise of this Court’s equity jurisdiction.103 Equity jurisdiction aims to do
complete justice in cases where a court of law is unable to adapt its judgments to the special
circumstances of a case because of the inflexibility of its statutory or legal jurisdiction.104

It is cogent to add in this regard that to deny the benefit of the fresh-period rule to the UP would
amount to injustice and absurdity – injustice, because the judgment in question was issued on
November 28, 2001 as compared to the judgment in Neypes that was rendered in 1998; absurdity,
because parties receiving notices of judgment and final orders issued in the year 1998 would enjoy the
benefit of the fresh-period rule but the later rulings of the lower courts like that herein would not.105
Consequently, even if the reckoning started from May 17, 2002, when Atty. Nolasco received the denial,
the UP’s filing on June 3, 2002 of the notice of appeal was not tardy within the context of the fresh-
period rule. For the UP, the fresh period of 15-days counted from service of the denial of the motion for
reconsideration would end on June 1, 2002, which was a Saturday. Hence, the UP had until the next
working day, or June 3, 2002, a Monday, within which to appeal, conformably with Section 1 of Rule 22,
Rules of Court, which holds that: "If the last day of the period, as thus computed, falls on a Saturday, a
Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working
day."

IV
Awards of monetary damages,
being devoid of factual and legal bases,
did not attain finality and should be deleted

Section 14 of Article VIII of the Constitution prescribes that express findings of fact and of law should be
made in the decision rendered by any court, to wit:

Section 14. No decision shall be rendered by any court without expressing therein clearly and distinctly
the facts and the law on which it is based.

No petition for review or motion for reconsideration of a decision of the court shall be refused due
course or denied without stating the legal basis therefor.

Implementing the constitutional provision in civil actions is Section 1 of Rule 36, Rules of Court, viz:

Section 1. Rendition of judgments and final orders. — A judgment or final order determining the merits
of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly
the facts and the law on which it is based, signed by him, and filed with the clerk of the court. (1a)

The Constitution and the Rules of Court apparently delineate two main essential parts of a judgment,
namely: the body and the decretal portion. Although the latter is the controlling part,106 the
importance of the former is not to be lightly regarded because it is there where the court clearly and
distinctly states its findings of fact and of law on which the decision is based. To state it differently, one
without the other is ineffectual and useless. The omission of either inevitably results in a judgment that
violates the letter and the spirit of the Constitution and the Rules of Court.

The term findings of fact that must be found in the body of the decision refers to statements of fact, not
to conclusions of law.107 Unlike in pleadings where ultimate facts alone need to be stated, the
Constitution and the Rules of Court require not only that a decision should state the ultimate facts but
also that it should specify the supporting evidentiary facts, for they are what are called the findings of
fact.

The importance of the findings of fact and of law cannot be overstated. The reason and purpose of the
Constitution and the Rules of Court in that regard are obviously to inform the parties why they win or
lose, and what their rights and obligations are. Only thereby is the demand of due process met as to the
parties. As Justice Isagani A. Cruz explained in Nicos Industrial Corporation v. Court of Appeals:108

It is a requirement of due process that the parties to a litigation be informed of how it was decided, with
an explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot
simply say that judgment is rendered in favor of X and against Y and just leave it at that without any
justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal
to a higher court, if permitted, should he believe that the decision should be reversed. A decision that
does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the
dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint
the possible errors of the court for review by a higher tribunal.

Here, the decision of the RTC justified the grant of actual and moral damages, and attorney’s fees in the
following terse manner, viz:

xxx The Court is not unmindful that due to defendants’ unjustified refusal to pay their outstanding
obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to re-mortgage
his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary
obligations in the form of interest and penalties incurred in the course of the construction of the subject
project.109

The statement that "due to defendants’ unjustified refusal to pay their outstanding obligation to
plaintiff, the same suffered losses and incurred expenses as he was forced to re-mortgage his house and
lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary obligations in
the form of interest and penalties incurred in the course of the construction of the subject project" was
only a conclusion of fact and law that did not comply with the constitutional and statutory prescription.
The statement specified no detailed expenses or losses constituting the ₱ 5,716,729.00 actual damages
sustained by Stern Builders in relation to the construction project or to other pecuniary hardships. The
omission of such expenses or losses directly indicated that Stern Builders did not prove them at all,
which then contravened Article 2199, Civil Code, the statutory basis for the award of actual damages,
which entitled a person to an adequate compensation only for such pecuniary loss suffered by him as he
has duly proved. As such, the actual damages allowed by the RTC, being bereft of factual support, were
speculative and whimsical. Without the clear and distinct findings of fact and law, the award amounted
only to an ipse dixit on the part of the RTC,110 and did not attain finality.

There was also no clear and distinct statement of the factual and legal support for the award of moral
damages in the substantial amount of ₱ 10,000,000.00. The award was thus also speculative and
whimsical. Like the actual damages, the moral damages constituted another judicial ipse dixit, the
inevitable consequence of which was to render the award of moral damages incapable of attaining
finality. In addition, the grant of moral damages in that manner contravened the law that permitted the
recovery of moral damages as the means to assuage "physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury."111 The contravention of the law was manifest considering that Stern Builders, as an artificial
person, was incapable of experiencing pain and moral sufferings.112 Assuming that in granting the
substantial amount of ₱ 10,000,000.00 as moral damages, the RTC might have had in mind that dela
Cruz had himself suffered mental anguish and anxiety. If that was the case, then the RTC obviously
disregarded his separate and distinct personality from that of Stern Builders.113 Moreover, his moral
and emotional sufferings as the President of Stern Builders were not the sufferings of Stern Builders.
Lastly, the RTC violated the basic principle that moral damages were not intended to enrich the plaintiff
at the expense of the defendant, but to restore the plaintiff to his status quo ante as much as possible.
Taken together, therefore, all these considerations exposed the substantial amount of ₱ 10,000,000.00
allowed as moral damages not only to be factually baseless and legally indefensible, but also to be
unconscionable, inequitable and unreasonable.

Like the actual and moral damages, the ₱ 150,000.00, plus ₱ 1,500.00 per appearance, granted as
attorney’s fees were factually unwarranted and devoid of legal basis. The general rule is that a
successful litigant cannot recover attorney’s fees as part of the damages to be assessed against the
losing party because of the policy that no premium should be placed on the right to litigate.114 Prior to
the effectivity of the present Civil Code, indeed, such fees could be recovered only when there was a
stipulation to that effect. It was only under the present Civil Code that the right to collect attorney’s fees
in the cases mentioned in Article 2208115 of the Civil Code came to be recognized.116 Nonetheless,
with attorney’s fees being allowed in the concept of actual damages,117 their amounts must be
factually and legally justified in the body of the decision and not stated for the first time in the decretal
portion.118 Stating the amounts only in the dispositive portion of the judgment is not enough;119 a
rendition of the factual and legal justifications for them must also be laid out in the body of the
decision.120

That the attorney’s fees granted to the private respondents did not satisfy the foregoing requirement
suffices for the Court to undo them.121 The grant was ineffectual for being contrary to law and public
policy, it being clear that the express findings of fact and law were intended to bring the case within the
exception and thereby justify the award of the attorney’s fees. Devoid of such express findings, the
award was a conclusion without a premise, its basis being improperly left to speculation and
conjecture.122

Nonetheless, the absence of findings of fact and of any statement of the law and jurisprudence on which
the awards of actual and moral damages, as well as of attorney’s fees, were based was a fatal flaw that
invalidated the decision of the RTC only as to such awards. As the Court declared in Velarde v. Social
Justice Society,123 the failure to comply with the constitutional requirement for a clear and distinct
statement of the supporting facts and law "is a grave abuse of discretion amounting to lack or excess of
jurisdiction" and that "(d)ecisions or orders issued in careless disregard of the constitutional mandate
are a patent nullity and must be struck down as void."124 The other item granted by the RTC (i.e., ₱
503,462.74) shall stand, subject to the action of the COA as stated herein.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the

decision of the Court of Appeals under review; ANNULS the orders for the garnishment of the funds of
the University of the Philippines and for the release of the garnished amount to Stern Builders
Corporation and Servillano dela Cruz; and DELETES from the decision of the Regional Trial Court dated
November 28, 2001 for being void only the awards of actual damages of ₱ 5,716,729.00, moral damages
of ₱ 10,000,000.00, and attorney's fees of ₱ 150,000.00, plus ₱ 1,500.00 per appearance, in favor of
Stern Builders Corporation and Servillano dela Cruz.

The Court ORDERS Stem Builders Corporation and Servillano dela Cruz to redeposit the amount of ₱
16,370,191.74 within 10 days from receipt of this decision.

Costs of suit to be paid by the private respondents.

SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

TERESITA J. LEONARDO-DE CASTRO

Associate Justice
Acting Chairperson, First Division

MARIANO C. DEL CASTILLO MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice
Acting Chairperson, First Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Acting Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296,
The Judiciary Act of 1948, as amended)

Footnotes

1 Administrative Circular No. 10-2000 dated October 25, 2000.

2 Rollo, pp. 39-54; penned by Associate Justice Ruben T. Reyes (later Presiding Justice and Member of
the Court, but now retired), with Associate Justice Josefina Guevara-Salonga (retired) and Associate
Justice Fernanda Lampas-Peralta concurring.

3 Id. at 92-105.

4 Id. at 75-83.

5 Id. at 133-138.
6 Id. at 162.

7 Id. at 163-164.

8 Id. at 169-171.

9 Id. at 172-173.

10 Id. at 174.

11 Id. at 174-182.

12 Id. at 185-187.

13 Id. at 188-213.

14 Id. at 217-223; penned by Associate Justice B.A. Adefuin-Dela Cruz (retired), with Associate Justice
Eliezer R. delos Santos (deceased) and Associate Justice Jose Catral Mendoza (now a Member of the
Court) concurring.

15 Id. at 221.

16 Id. at 243.

17 Id. at 282.

18 Id. at 283-291.

19 Id. at 293.

20 Id. at 417.

21 Id. at 172-173; and 301.

22 Id. at 312.

23 Id. at 302-309.

24 Id. at 314-319

25 Id. at 321-322.

26 Id. at 323-325.

27 Id. at 326-328.

28 Id. at 332-333.

29 Id. at 334-336.

30 Id. at 339.

31 Id. at 340.

32 Id. at 341.
33 Id. at 341.

34 Id. at 342-344.

35 Id. at 346-360.

36 G.R. No. 104269, November 11, 1993, 227 SCRA 693.

37 G.R. No. 110280, October 21, 1993, 227 SCRA 342.

38 Rollo, pp. 366-367; penned by Associate Justice Reyes, with Associate Justice Tria Tirona (retired) and
Associate Justice Jose C. Reyes, Jr. concurring.

39 Id. at 452-453.

40 Id. at 455-460.

41 Id. at 472-476.

42 Id. at 477-482.

43 Id. at 484.

44 Id. at 485-489.

45 Id. at 492-494.

46 Id. at 484.

47 Id. at 492-494.

48 Id. at 51.

49 Id. at 51-52.

50 Id. at 569.

51 Id.

52 Id. at 556-561.

53 Id. at 562-565.

54 Id. at 563-564.

55 Id. at 576-581.

56 Id. at 625-628.

57 Id. at 687-688.

58 Id. at 605-615.

59 Id. at 705-714.

60 Id. at 719-721.
61 G.R. No. L-30098, February 18, 1970, 31 SCRA 616, 625.

62 G.R. No. 104269, November 11, 1993, 227 SCRA 693, 701-702.

63 Section 2, Act No. 1870.

64 Section 1, Act No. 1870.

65 Section 2(12) of Executive Order No. 292 reads:

xxx

xxx Chartered institution refers to any agency organized or operating under a special charter, and vested
by law with functions relating to specific constitutional policies or objectives. This term includes the
state universities and colleges and the monetary authority of the State.

xxx

66 University of the Philippines and Anonas v. Court of Industrial Relations, 107 Phil 848, 850 (1960).

67 Section 2, R.A. No. 9500.

68 Section 3, R.A. No. 9500.

69 Section 2(10), of Executive Order No. 292 provides:

xxx

xxx Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some if not
all corporate powers, administering special funds, and enjoying operational autonomy, usually through a
charter. This term includes regulatory agencies, chartered institutions and government-owned or
controlled corporations.

xxx

70 Section 1, Article XIV, 1987 Constitution.

71 Entitled Fiscal Control and Management of the Funds of the University of the Philippines,
promulgated on August 1, 1981.

72 Section 3, R.A. No. 9500.

73 Section 13(m), R.A. No. 9500.

74 Section 13, Act 1870; Section 6, Executive Order No. 714; Section 26, R.A. No. 9500.

75 Section 3(4), P.D. No. 1445.

76 Section 4(3), P.D. No. 1445.

77 Section 22(a), R.A. No. 9500.

78 Philippine Rock Industries, Inc. v. Board of Liquidators, G.R. No. 84992, December 15, 1989, 180 SCRA
171, 175.
79 Republic v. National Labor Relations Commission, G.R. No. 120385, October 17, 1996, 263 SCRA 290,
300.

80 G.R. No. L-52179, April 8, 1991, 195 SCRA 692, 697.

81 G.R. No. L-30671, November 28, 1973, 54 SCRA 83, 87.

82 Rollo, p. 51.

83 Section 84(2), P.D. No. 1445.

84 Section 29 (1), Article VI, Constitution.

85 National Home Mortgage Finance Corporation v. Abayari, G.R. No. 166508, October 2, 2009, 602
SCRA 242, 256.

86 Entitled EXERCISE OF UTMOST CAUTION, PRUDENCE AND JUDICIOUSNESS IN THE ISSUANCE OF

WRITS OF EXECUTION TO SATISFY MONEY JUDGMENTS AGAINST GOVERNMENT AGENCIES AND LOCAL
GOVERNMENT UNITS.

87 Airline Pilots Association of the Philippines v. Philippine Airlines, Inc., G.R. No. 168382, June 6, 2011,
650 SCRA 545, 557; Florentino v. Rivera, G.R. No. 167968, January 23, 2006, 479 SCRA 522, 528; Siy v.
National Labor Relations Commission, G.R. No. 158971, August 25, 2005, 468 SCRA 154, 161-162.

88 FGU Insurance Corporation v. Regional Trial Court of Makati, Branch 66, G.R. No. 161282, February
23, 2011, 644 SCRA 50, 56.

89 Edillo v. Dulpina, G.R. No. 188360, January 21, 2010, 610 SCRA 590, 602.

90 Apo Fruits Corporation v. Court of Appeals, G.R. No. 164195, December 4, 2009, 607 SCRA 200, 214.

91 G.R. No. 147082, January 28, 2008, 542 SCRA 406, 418.

92 G.R. No. 164196, June 22, 2007, 525 SCRA 412, 426.

93 Antonio v. Court of Appeals, No. L-35434, November 9, 1988, 167 SCRA 127, 131-132.

94 Pursuant to Section 1, Rule 22 of the Rules of Court, "the day of the act or event from which the
designated period of time begins to run is to be excluded and the date of performance included."

95 Anderson v. National Labor Relations Commission, G.R. No. 111212, January 22, 1996, 252 SCRA 116,
124.

96 Prudential Bank v. Business Assistance Group, Inc., G.R. No. 158806, December 16, 2004, 447 SCRA
187, 193; Cabili v. Badelles, No. L-17786, 116 Phil. 494, 497 (1962); Martinez v. Martinez, No. L-4075, 90
Phil. 697, 700 (1952); Vivero v. Santos, No. L-8105, 98 Phil. 500, 504 (1956); Perez v. Araneta, No. L-
11788, 103 Phil. 1141 (1958); Visayan Surety and Insurance Corp. v. Central Bank of the Philippines, No.
L-12199, 104 Phil. 562, 569 (1958).

97 Notor v. Daza, No. L-320, 76 Phil. 850 (1946).

98 G.R. No. 141524, September 14, 2005, 469 SCRA 633.

99 Id. at 644.

100 Jamero v. Melicor, G.R. No. 140929, May 26, 2005, 459 SCRA 113, 120.

101 Lopez v. Gloria, No. L-13846, 40 Phil 28 (1919).

102 Go v. Sunbanun, G.R. No. 168240, February 9, 2011, 642 SCRA 367, 370.

103 Buenaflor v. Court of Appeals, G.R. No. 142021, November 29, 2000, 346 SCRA 563, 567; Soriano v.
Court of Appeals, G.R. No. 100525, May 25, 1993, 222 SCRA 545, 546-547.

104 Reyes v. Lim, G.R. No. 134241, August 11, 2003, 408 SCRA 560, 560-567.

105 De los Santos v. Vda. de Mangubat, G.R. No. 149508, October 10, 2007, 535 SCRA 411, 423.

106 Pelejo v. Court of Appeals, No. L-60800, August 31, 1982, 116 SCRA 406, 410.

107 Braga v. Millora, No. 1395, 3 Phil. 458 (1904).

108 G.R. No. 88709, February 11, 1992, 206 SCRA 127, 132.

109 Rollo, p. 137.

110 Translated, the phrase means: "He himself said it." It refers to an unsupported statement that rests
solely on the authority of the individual asserting the statement.

111 Article 2217, Civil Code.

112 Crystal v. Bank of the Philippine Islands, G.R. No. 172428, November 28, 2008, 572 SCRA 697, 705.

113 Section 2, Corporation Code; Martinez v. Court of Appeals, G.R. No. 131673, September 10, 2004,
438 SCRA 130, 149; Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. No. 114286, April
19, 2001, 356 SCRA 671, 682; Booc v. Bantuas, A.M. No. P-01-1464, March 13, 2001, 354 SCRA 279, 283.

114 Heirs of Justiva v. Gustilo, L-16396, January 31, 1963, 7 SCRA 72, 73; Firestone Tire & Rubber Co. of
the Phil. v. Ines Chaves & Co., Ltd., No. L-17106, October 19, 1996, 18 SCRA 356, 358.

115 Article 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly
valid, just and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.

116 See Reyes v. Yatco, No. L-11425, 100 Phil. 964 (1957); Tan Ti v. Alvear, No. 8228, 26 Phil. 566 (1914);
Castueras, et al. v. Hon. Bayona, et al., No. L-13657, 106 Phil. 340 (1959).

117 Fores v. Miranda, No. L-12163, 105 Phil. 266 (1959).

118 Buduhan v. Pakurao, G.R. No. 168237, February 22, 2006, 483 SCRA 116, 127.

119 Gloria v. De Guzman, Jr., G.R. No. 116183, October 6, 1995, 249 SCRA 126, 136.

120 Policarpio v. Court of Appeals, G.R. No. 94563, March 5, 1991, 194 SCRA 729, 742.

121 Koa v. Court of Appeals, G.R. No. 84847, March 5, 1993, 219 SCRA 541, 549; Central Azucarera de
Bais v. Court of Appeals, G.R. No. 87597, August 3, 1990, 188 SCRA 328, 340.

122 Ballesteros v. Abion, G.R. No. 143361, February 9, 2006, 482 SCRA 23.

123 G.R. No. 159357, April 28, 2004, 428 SCRA 283.

124 Id. at 309.

Republic vs. Sandoval 220 SCRA 124

ISSUE:  (1) Whether or not there is a valid waiver of immunity (2) Whether or not the State is
liable for damages 
FACTS:  Farmer-rallyists marched to Malacanang calling for a genuine land reform program.
There was a marchers-police confrontation which resulted in the death of 12 rallyists and scores
were wounded. As a result, then Pres. Aquino issued AO 11 creating the Citizens Mendiola
Commission for the purpose of conducting an investigation. The most significant
recommendation of the Commission was for the heirs of the deceased and wounded victims to
be compensated by the government. Based on such recommendation, the victims of Mendiola
massacre filed an action for damages against the Republic and the military/police officers
involved in the incident. 

DECISION:  Denied 

RATIO DECIDENDI:  The Court held that there was no valid waiver of immunity as claimed by
the petitioners. The recommendation made by the Commission to indemnify the heirs of the
deceased and the victims does not in any way mean that liability attaches to the State. AO 11
merely states the purpose of the creation of the Commission and, therefore, whatever is the
finding of the Commission only serves as the basis for a cause of action in the event any party
decides to litigate the same. Thus, the recommendation of the Commission does not in any way
bind the State.  The State cannot be made liable because the military/police officers who
allegedly were responsible for the death and injuries suffered by the marchers acted beyond the
scope of their authority. It is a settled rule that the State as a person can commit no wrong. The
military and police officers who were responsible for the atrocities can be held personally liable
for damages as they exceeded their authority, hence, the acts cannot be considered official.  

FESTEJO v. FERNANDO
GR No. L-5156; March 11, 1954

FACTS:
The defendant, as Director of the Bureau of Public Works, took possession of the three
parcels of land on February 1951 without obtaining first a right of way, without consent
and knowledge of plaintiff, and against her express objection. The petitioner demands
that the lands be restored to its former condition and the defendant to pay the plaintiff
the sum of P19, 343.20 for the unlawful taking possession of the defendant.

ISSUE:
Is the defendant liable for the unlawful possession of the lands?

HELD:
The evidence and conceded facts permitted the jury in finding that in the trespass on
plaintiff’s land, the defendant committed acts outside the scope of his authority. There
can be no claim that he thus invaded plaintiff’s land southeasterly of the right of way
innocently for the surveys clearly marked the limits of the land appropriated for the
right of way. It is a general rule that an officer-executive, administrative, quasi-judicial,
ministerial, or otherwise who acts outside the scope of his jurisdiction and without
authorization of law may thereby render himself amenable to personal liability in a civil
suit. He cannot shelter himself by the plea that he is a public agent acting under the
color of his office and not personally.

Merritt vs Government of the Philippine Islands

FACTS: Merrit was riding a motorcycle along Padre Faura Street when he was bumped by the
ambulance of the General Hospital. Merrit sustained severe injuries rendering him unable to return to
work. The legislature later enacted Act 2457 authorizing Merritt to file a suit against the Government in
order to fix the responsibility for the collision between his motorcycle and the ambulance of the General
Hospital, and to determine the amount of the damages, if any, to which he is entitled. After trial, the lower
court held that the collision was due to the negligence of the driver of the ambulance. It then determined
the amount of damages and ordered the government to pay the same. 

ISSUES: 

1. Did the Government, in enacting the Act 2457, simply waive its immunity from suit or did it also
concede its liability to the plaintiff?

2. Is the Government liable for the negligent act of the driver of the ambulance?

HELD:

1. By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its
liability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause not
previously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself to the
jurisdiction of the court, subject to its right to interpose any lawful defense.

2. Under the Civil Code, the state is liable when it acts through a special agent, but not when the damage
should have been caused by the official to whom properly it pertained to do the act performed.  A special
agent is one who receives a definite and fixed order or commission, foreign to the exercise of the duties of
his office if he is a special official. This concept does not apply to any executive agent who is an
employee of the acting administration and who on his own responsibility performs the functions which
are inherent in and naturally pertain to his office and which are regulated by law and the regulations. The
driver of the ambulance of the General Hospital was not a special agent; thus the Government is not
liable. (Merritt vs Government of the Philippine Islands, G.R. No. L-11154, March 21 1916, 34 Phil. 311)

NOTE:

■ The State is responsible in like manner when it acts through a special agent; but not when the damage
has been caused by the official to whom the task done properly pertains. (Art. 2180 par. 6, Civil Code)

■ The state is not responsible for the damages suffered by private individuals in consequence of acts
performed by its employees in the discharge of the functions pertaining to their office, because neither
fault nor even negligence can be presumed on the part of the state in the organization of branches of
public service and in the appointment of its agents. (Merritt vs. Government of the Philippine Islands)

■ The State is not liable for the torts committed by its officers or agents whom it employs, except when
expressly made so by legislative enactment. The government does not undertake to guarantee to any
person the fidelity of the officers or agents whom it employs since that would involve it in all its
operations in endless embarrassments, difficulties and losses, which would be subversive of the public
interest. (Merritt vs. Government of the Philippine Islands

Amigable vs Cuenca G.R. No. L-26400 43 SCRA 360 February 29, 1972

Victoria Amigable, is the registered owner of a lot in Cebu City. Without prior expropriation
or negotiated sale,the government used a portion of said lot for the construction of the
Mango and Gorordo Avenues.On March 27, 1958 Amigable's counsel wrote the President of
the Philippines, requesting payment of theportion of her lot which had been appropriated
by the government. The claim was indorsed to the AuditorGeneral, who disallowed it in his
9th Endorsement. Thus, Amigable filed in the court a quo a complaint,against the Republic
of the Philippines and Nicolas Cuenca (Commissioner of Public Highways) for therecovery of
ownership and possession of her lot. The defendants denied the plaintiff’s allegations
stating: (1) that the action was premature, the claim nothaving been filed first with the
Office of the Auditor General; (2) that the right of action for the recovery hadalready
prescribed; (3) that the action being a suit against the Government, the claim for moral
damages,attorney's fees and costs had no valid basis since the Government had not given
its consent to be sued; and(4) that inasmuch as it was the province of Cebu that
appropriated and used the area involved in theconstruction of Mango Avenue, plaintiff had
no cause of action against the defendants.On July 29, 1959, the court rendered its decision
holding that it had no jurisdiction over the plaintiff's cause of action for the recovery of
possession and ownership of the lot on the ground that the government cannot besued
without its consent; that it had neither original nor appellate jurisdiction to hear and decide
plaintiff'sclaim for compensatory damages, being a money claim against the government;
and that it had longprescribed, nor did it have jurisdiction over said claim because the
government had not given its consent tobe sued. Accordingly, the complaint was dismissed.
ISSUE : W/N the appellant may properly sue the government RULING: Yes. Considering that
no annotation in favor of the government appears at the back of her certificate of titleand
that she has not executed any deed of conveyance of any portion of her lot to the
government, theappellant remains the owner of the whole lot. As registered owner, she
could bring an action to recoverpossession of the portion of land in question at anytime
because possession is one of the attributes of ownership. However, since restoration of
possession of said portion by the government is neither convenientnor feasible at this time
because it is now and has been used for road purposes, the only relief available is forthe
government to make due compensation which it could and should have done years ago. To
determine thedue compensation for the land, the basis should be the price or value thereof
at the time of the taking.

As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest
on the price of the land from the time it was taken up to the time that payment is made by
thegovernment.

In addition, thegovernment should pay for attorney's fees, the amount of which should be
fixed by the trial court after hearing. WHEREFORE, the decision appealed from is hereby set
aside and thecase remanded to the courta quo for the determination of compensation,
including attorney's fees, to whichthe appellant is entitled as above indicated.
US vs. Ruiz
UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT
GOHIER, petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN &
CO., INC., respondents.
 136 SCRA 487
May 22, 1985

FACTS:

Petitioner invited the submission of bids for repair of its wharves and shoreline in the Subic Bay Area.
Eligion and Co. responded to the invitation and submitted bids. Said company was requested by
telegram to confirm its price proposals and for the name of its bonding company, and from which it
complied.

Later, the United States, through its agents, informed said company that it was not qualified to receive
an award at the project for the poorly completed projects it awarded to third parties. The company sued
petitioner for specific performance and if no longer possible, for damages. It also asked for a writ of
preliminary injunction to restrain the defendants from entering into contracts with others.

The United States entered a special appearance for the purpose only of questioning the jurisdiction of
the court over the subject matter of the complaint and the persons of the defendants, the subject
matter of the complaint being acts and omissions of the individual defendants as agents of the
defendant United States of America, a foreign sovereign which has not given its consent to this suit or
any other suit for the cause of action asserted in the complaint.

US filed a motion to dismiss and opposed the writ. The trial court denied the motion and issued a writ.

ISSUE:

Whether the US may be sued?

HELD:

No. The traditional rule of State immunity exempts a State from being sued in the courts of another
State without its consent or waiver. This rule is a necessary consequence of the principles of
independence and equality of States. However, the rules of International Law are not petrified; they are
constantly developing and evolving. In addition, because the activities of states have multiplied, it has
been necessary to distinguish them — between sovereign and governmental acts (jure imperii) and
private, commercial and proprietary acts (jure gestionis). The result is that State immunity now extends
only to acts jure imperii. The restrictive application of State immunity is now the rule in the United
States, the United Kingdom and other states in western Europe. (See Coquia and Defensor-Santiago,
Public International Law, pp. 207-209 [1984].)

The restrictive application of state immunity is proper only when the proceedings arise out of
commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated
differently, a state may be said to have descended to the level of an individual and can be thus deemed
to have tacitly given its consent to be sued only when the contract relates to the exercise of its
sovereign functions. In this case, the projects are an integral part of the naval base which is devoted to
the defense of both the US and the Philippines, undisputed a function of the government of the highest
order, they are not utilized for nor dedicated to commercial or business purposes. The correct test for
the application of State immunity is not the conclusion of a contract by a State but the legal nature of
the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case, the plaintiffs leased three
apartment buildings to the United States of America for the use of its military officials. The plaintiffs
sued to recover possession of the premises on the ground that the term of the leases had expired. They
also asked for increased rentals until the apartments shall have been vacated.

Republic vs. VillasoREPUBLIC OF THE PHILIPPINES, petitioner,

vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE
PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF
 MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO
UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents.
54 SCRA 84
November 28, 1973

FACTS:

A decision was rendered in a Special Proceeding against the Republic of the Philippines thereby
confirming the arbitration award of P1,712,396.40 in favor of respondent corporation. After the decision
became final and executory, respondent judge issued an order directing the sheriff to execute the said
decision, and the corresponding alias writ of execution was thus issued.

Hence the sheriff served notices of garnishment with several banks especially the monies due to the AFP
in the form of deposits sufficient to cover the amount mentioned in the writ. PNB and Philippine
Veterans Bank received such notice. As certified by the AFP Comptroller, these funds of the AFP with the
said banks are public funds for the pensions, pay, and allowances of its military and civilian personnel.

The petitioner, in this certiorari and prohibition proceedings, challenges the validity of the Order issued
by Judge Villasor declaring the decision final and executory and subsequently issuing an alias writ of
execution directed against the funds of the AFP in pursuance thereof.

ISSUE:

May the writs of execution and notices of garnishment be sued against public funds?

HELD:

NO. Although the State may give its consent to be sued by private parties, there is corollary that public
funds cannot be the object of garnishment proceedings even if the consent to be sued has been
previously granted and the state‘s liability has been adjudged.

Thus in the case of Commission of Public Highways vs. San Diego, such a well settled doctrine was
restated in the opinion of Justice Teehankee. The universal rule that where the state gives its consent to
be sued by private parties either by general or special law, it may limit claimant‘s action only up to the
completion of proceedings anterior to the stage of execution and that the power of the courts ends
when the judgment is rendered, since the government funds and properties may not be seized under
writs of execution or garnishment to satisfy such judgment, is based on obvious considerations of public
policy. Disbursement of public funds must be covered by the corresponding appropriations as required
by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or
disrupted by diversion of public funds from their legitimate and specific object is appropriated by law.

Department of Agriculture v. NLRC (G.R. No. 104269)

November 11, 1993 | G.R. No. 104269

Department of Agriculture, petitioner

National Labor Relations Commission, et al., respondents

FACTS:

On April 1, 1989, the Department of Agriculture (DoA) office in Cagayan de Oro and Sultan Security
Agency (SSA) entered into a contract where the latter was to provide security services to the former.
On September 13, 1990, several guards from SSA filed a complaint for underpayment of wages, non-
payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay, as well as for
damages, against DoA and SSA. Both the DoA and SSA were subsequently found guilty by the Executive
Labor Arbiter, which also held both of them liable for the payment of money claims amounting to
P266,483.91.

On July 18, 1991, the Labor Arbiter issued a writ of execution. As a response, the DoA filed a petition
for injunction, prohibition, and mandamus, with prayer for preliminary writ of injunction, before the
NLRC. The DoA's petition was dismissed.

Following the dismissal of its petition before the NLRC, DoA filed a petition before the SC arguing that:
(a) it was COA, not NLRC, that was supposed to have jurisdiction over money claims against the
Government pursuant to Commonwealth Act No. 327 as amended by PD No. 1445; and (b) that NLRC
had disregarded the cardinal rule on the non-suability of the State.

ISSUES:

1. Whether or not it was COA that has exclusive jurisdiction over money claims against the
Government.

2. Whether or not DoA, as an agency of the State, is covered by the principle of the non-suability of the
State.

HELD:

1. Yes, the Court ruled that money claims against the Government should be filed before the
Commission on Audit pursuant to CA Act No. 327 as amended by PD No. 1445. In the instant case,
underpayment of wages, holiday pay, overtime pay, and other similar items arising from the Contract
for Service clearly constitute money claims. As such, the writ of execution issued by the Labor Arbiter
and the resolution issued by NLRC were reversed by the Court in favor of DoA.

2. No, DoA cannot use the principle of non-suability of the State as an excuse not to be sued.
Section 3, Art. XVI of the 1987 Constitution states that "the State may not be sued without its consent."
This principle reflects a recognition of the sovereign character of the State and an express affirmation
of the unwritten rule effectively insulating it from the jurisdiction of the courts. As per Justice Holmes,
a sovereign State is exempt from suits "not because of any formal conception or obsolete theory, but
on the logical and practical ground that there can be no legal right as against the authority that makes
the law on which the right depends."

However, this privilege is not absolute; with its consent, the State can be sued.

The Court clarifies that there are two kinds of consent: (1) express consent, which may be made either
through a general law or a special law; and (2) implied consent, which is conceded when the State
either commences litigation or enters into a contract.

But entering into a contract does not automatically mean the State can be sued. Once again, the Court
clarifies that contracts or agreements that constitute sovereign and governmental acts (jure imperii)
cannot be the subject of any lawsuit, while private, commercial, and proprietary acts (jure gestionisis)
can be made the subject of litigation.

In the instant case, express consent was provided for by Act No. 3083, which states that "the Philippine
government consents and submits to be sued upon any money claims involving liability arising from
contract, express or implied, which could serve as a basis of civil action between private parties." And
as cited earlier, money claims against the Government should be filed before the Commission on Audit.

At the same time, it is inarguable that DoA's contract with SSA was clearly a proprietary act, which
essentially means that DoA cannot invoke the principle of the non-suability of the State.

PNB vs. Pabalan

PHILIPPINE NATIONAL BANK, petitioner,
vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First Instance, Branch III, La Union, AGOO TOBACCO
PLANTERS ASSOCIATION, INC., PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, and PANFILO P.
JIMENEZ, Deputy Sheriff, La Union, respondents.

83 SCRA 595
June 15, 1978

FACTS:

A judgment was rendered against Philippine Virginia Tobacco Administration (PVTA). Judge Javier
Pabalan issued a writ of execution followed thereafter by a notice of garnishment of the funds of
respondent PVTA which were deposited with the Philippine National Bank (PNB). PNB objected on the
constitutional law doctrine of non-suability of a state. It alleged that such funds are public in character.

ISSUE:

Was the contention of PNB correct?

HELD:

NO. It is to be admitted that under the present Constitution, what was formerly implicit as a
fundamental doctrine in constitutional law has been set forth in express terms: ―The State may not be
sued without its consent. If the funds appertained to one of the regular departments or offices in the
government, then, certainly such a provision would lie a bar to garnishment. Such is not the case here.
Garnishment would lie. The Supreme Court, in a case brought by the same petitioner precisely invoking
such doctrine, left no doubt that the funds of a public corporation could properly be made the object of
a notice of garnishment.

It is well settled that when the government enters into commercial business, its abandons its sovereign
capacity and is to be treated like any other corporation. (Manila Hotel Employees Association vs. Manila
Hotel Company)

Rayo Rayo vs. CFI of Bulacan

vs. CFI of Bulacan
GAUDENCIO RAYO, et al., petitioners,
vs.
COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA. MARIA, and NATIONAL POWER
CORPORATION, respondents.

110 SCRA 460

December 19, 1981

FACTS:

During the height of the infamous typhoon Kading, the NPC, acting through its plant superintendent,
Benjamin Chavez, opened or caused to be opened simultaneously all the three floodgates of the Angat
Dam. The many unfortunate victims of the man-caused flood filed with the respondent court eleven
complaints for damages against the NPC and Benjamin

Chavez. NPC filed separate answers to each of the eleven complaints and invoked in each answer a
special and affirmative defense that in the operation of the Angat Dam, it is performing a purely
governmental function. Hence, it cannot be sued without the express consent of the State. The
respondent court dismissed the case on the grounds that said defendant performs a purely
governmental function in the operation of the Angat Dam and cannot therefore be sued for damages in
the instant cases in connection therewith.

ISSUE:

Was the NPC performing a governmental function with respect to the management and operation of the
Angat Dam?

HELD:

YES. However, it is not necessary to determine whether NPC performs a governmental function with
respect to the management and operation of the Angat Dam. It is sufficient to say that the government
has organized a private corporation, put money in it and has allowed itself to sue and be sued in any
court under its charter. As a government owned and controlled corporation, it has personality of its
own, distinct and separate from that of the government. Moreover, the charter provision that the NPC
can sue and be sued in any court is without qualification on the cause of action as the one instituted by
the petitioners.

ATO V. DAVID (G.R. NO. 159402; FEBRUARY 23, 2011)

CASE DIGEST: AIR TRANSPORTATION OFFICE v. SPOUSES
DAVID & ELISEA RAMOS

FACTS: Respondent Spouses discovered that a portion of their

registered land in Baguio City was being used as part of the runway and
running shoulder of the Loakan Airport being operated by petitioner Air
Transportation Office (ATO). The respondents agreed after negotiations
to convey the affected portion by deed of sale to the ATO in consideration
of the amount of P778,150.00. However, the ATO failed to pay despite
repeated verbal and written demands.

Thus, the respondents filed an action for collection against the ATO and
some of its officials in the RTC. In their answer, the ATO and its co-
defendants invoked as an affirmative defense the issuance of
Proclamation No. 1358, whereby President Marcos had reserved certain
parcels of land that included the respondents affected portion for use of
the Loakan Airport. They asserted that the RTC had no jurisdiction to
entertain the action without the States consent considering that the deed
of sale had been entered into in the performance of governmental
functions.

The RTC held in favor of the Spouses, ordering the ATO to pay the
plaintiffs Spouses the amount of P778,150.00 being the value of the
parcel of land appropriated by the defendant ATO as embodied in the
Deed of Sale, plus an annual interest of 12% from August 11, 1995, the
date of the Deed of Sale until fully paid; (2) The amount of P150,000.00
by way of moral damages and P150,000.00 as exemplary damages; (3)
the amount of P50,000.00 by way of attorneys fees plus P15,000.00
representing the 10, more or less, court appearances of plaintiffs counsel;
(4) The costs of this suit.

On appeal, the CA affirmed the RTCs decision withmodification deleting

the awarded cost, and reducing the moral and exemplary damage to
P30,000.00 each, and attorneys fees is lowered to P10,000.00.

ISSUE: Could ATO be sued without the State's consent?

HELD: An unincorporated government agency without any separate

juridical personality of its own enjoys immunity from suit because it is
invested with an inherent power of sovereignty. Accordingly, a claim for
damages against the agency cannot prosper; otherwise, the doctrine of
sovereign immunity is violated. However, the need to distinguish
between an unincorporated government agency performing
governmental function and one performing proprietary functions has
arisen. The immunity has been upheld in favor of the former because its
function is governmental or incidental to such function; it has not been
upheld in favor of the latter whose function was not in pursuit of a
necessary function of government but was essentially a business.
National Airports Corporation v. Teodoro, Sr. and Phil. Airlines Inc., 91
Phil. 203 (1952)

Civil Aeronautics Administration vs. Court of Appeals (167 SCRA 28

[1988]),the Supreme Court, reiterating the pronouncements laid down in
Teodoro, declared that the CAA (predecessor of ATO) is an agency not
immune from suit, it being engaged in functions pertaining to a private
entity.

The Civil Aeronautics Administration comes under the category of a

private entity. Although not a body corporate it was created, like the
National Airports Corporation, not to maintain a necessary function of
government, but to run what is essentially a business, even if revenues be
not its prime objective but rather the promotion of travel and the
convenience of the travelling public. It is engaged in an enterprise which,
far from being the exclusive prerogative of state, may, more than the
construction of public roads, be undertaken by private concerns.
National Airports Corp. v. Teodoro, 91 Phil. 203 (1952)
The CA thereby correctly appreciated the juridical character of the ATO
as an agency of the Government not performing a purely governmental
or sovereign function, but was instead involved in the management and
maintenance of the Loakan Airport, an activity that was not the exclusive
prerogative of the State in its sovereign capacity. Hence, the ATO had no
claim to the States immunity from suit. We uphold the CAs aforequoted
holding.

The doctrine of sovereign immunity cannot be successfully invoked to

defeat a valid claim for compensation arising from the taking without
just compensation and without the proper expropriation proceedings
being first resorted to of the plaintiffs property.Republic v.
Sandiganbayan, G.R. No. 90478, Nov. 2, 1991. DENIED.
 DIVISION

[ GR No. 166508, Oct 02, 2009 ]

NATIONAL HOME MORTGAGE FINANCE CORPORATION v.

MARIO ABAYARI +

DECISION

617 Phil. 446

PERALTA, J.:
In this petition for review[1] under Rule 45 of the Rules of Court, the
National Home Mortgage Finance Corporation assails the August 20, 2004
Decision[2] of the Court of Appeals in CA-G.R. SP No. 82637, which
dismissed its petition for certiorari from the October 14, 2003[3] and
December 15, 2003[4] Orders issued by the Regional Trial Court (RTC) of
Makati City, Branch 138.[5] The said Orders, in turn, respectively granted
the issuance of a writ of execution and denied petitioner's motion for
reconsideration in Civil Case No. 99-1209 - a case for mandamus.

The antecedents follow.

Petitioner, the National Home Mortgage Finance Corporation (NHMFC), is

a government-owned and controlled corporation created under the
authority of Presidential Decree No. 1267 for the primary purpose of
developing and providing a secondary market for home mortgages granted
by public and/or private home-financing institutions. [6] In its employ were
respondents,[7] mostly rank-and-file employees, who all profess as having
been hired after June 30, 1989.[8]

On July 1, 1989, Republic Act No. 6758, otherwise known as The

Compensation and Position Classification Act of 1989, was enacted and
was subsequently approved on August 21, 1989. Section 12 thereof directed
that all allowances - namely representation and transportation allowance,
clothing and laundry allowance, subsistence allowance, hazard pay and
other allowances as may be determined by the budget department - enjoyed
by covered employees should be deemed included in the standardized
salary rates prescribed therein, and that the other additional compensation
being received by incumbents only as of July 1, 1989 not integrated into the
standardized salary rates should continue to be authorized. To implement
the law, the Department of Budget and Management (DBM) issued
Corporate Compensation Circular No. 10.[9] Section 5.5[10] thereof excluded
certain allowances and benefits from integration into the standardized
basic salary but continued their grant to those who were incumbents as of
June 30, 1989 and who were actually receiving the benefits as of said date.
These are the allowances involved in this case.

Respondents filed a petition for mandamus with the RTC of Makati City,

Branch 138[11] to compel petitioner to pay them meal, rice, medical, dental,
optical and children's allowances, as well as longevity pay, which allegedly
were already being enjoyed by other NHMFC employees as early as July 1,
1989. In its April 27, 2001 Decision, the trial court ruled favorably and
ordered petitioner to pay respondents the allowances prayed for,
retroactive to the respective dates of appointment.[12] The dispositive
portion of the Decision reads:

WHEREFORE, judgment is hereby rendered in favor of the petitioners and

respondent is ordered to pay petitioners their meal allowance, rice
allowance, medical allowance, longevity pay and children's allowance
retroactive to the dates of their respective appointments up to the present
or for the time that they were employed by the respondent.

SO ORDERED.[13]

In arriving at the conclusion that respondents were entitled to the prayed-

for benefits, the trial court explained, thus,

The use of the word "only" before the words July 1, 1989 in section 12 of
Republic Act No. 6758 appears to be the source of the dispute.

Section 12 is clear that other additional compensation being received by

incumbents only as of July 1, 1989 that are not integrated into the
standardized salary rates shall continue to be authorized. The law is
prospective in effect and it does not say that such additional compensation
shall not continue to be authorized for employees appointed after June 30,
1989. The use of the word "only" before the words "as of July 1, 1989"
qualifies the additional compensation which can be continued. The
foregoing applies to all employees whether permanent or casual.

DBM Circular No. 10, the Implementing Rules and Regulations particularly
section 5.5 thereof...use the word "only" for incumbents as of June 30, 1989
and by implication the same shall not apply to employees appointed after
June 30, 1989. This is in effect another qualification limiting the grant of
benefits to those who are incumbents as of June 30, 1989, a condition not
imposed by Section 12 of Republic Act No. 6758 for which reason it has to
be strike (sic) down.[14]

Petitioner timely filed an appeal with the Court of Appeals.[15] In its

November 21, 2001 Decision, the appellate court affirmed the trial court's
ruling.[16] No appeal was taken from the decision and upon its finality,
[17]
 respondents moved for execution.[18]

However, the motion for execution was withdrawn when on May 12, 2002,
petitioner and respondents executed a Compromise Agreement in which
petitioner bound itself to comply with the decision rendered in the case,
except that the payment of the allowances adjudicated in favor of
respondents would be made in four installments instead. It was, likewise
stipulated therein that the parties waive all claims against each other. The
trial court did not take any positive action on the compromise except to
note the same since the parties did not intend to novate the April 27, 2001
Decision.[19] On that basis, petitioner had started paying respondents the
arrears in benefits.

Conflict arose when the DBM sent a letter[20] dated July 15, 2003 to
NHMFC President Angelico Salud disallowing the payment of certain
allowances, including those awarded by the trial court to respondents. A
reading of the letter reveals that the disallowance was made in accordance
with the 2002 NHMFC Corporate Operating Budget previously issued by
the DBM.

To abide by the DBM's directive, petitioner then issued a memorandum

stating that effective August 2003, the grant of benefits to its covered
employees, including those awarded to respondents, would be curtailed
pursuant to the DBM letter.[21] This eventuality compelled respondents to
file for the second time a motion for a writ of execution of the trial court's
April 27, 2001 decision. [22]

In its October 14, 2003 Order,[23] the trial court found merit in respondents'
motion; hence, it directed the execution of the judgment. Petitioner moved
for reconsideration[24] but it was denied.[25] On February 16, 2004, the trial
court issued a Writ of Execution/Garnishment with a directive to the sheriff
to tender to respondents the amount of their collective claim equivalent to
P4,806,530.00 to be satisfied out of petitioners goods and chattels and if
the same be not sufficient, out of its existing real property. [26] Respondents
then sought the garnishment of its funds under the custody of the Land
Bank of the Philippines.[27]

Bent on preventing execution, petitioner filed a petition for certiorari with

the Court of Appeals, docketed as CA-G.R. SP No. 82637. [28] In it, petitioner
ascribed grave abuse of discretion to the trial court in ordering the
execution of the judgment. It pointed out that the trial court disregarded
the fact that the DBM's issuance amounted to a supervening event, or an
occurrence that changed the situation of the parties that would make the
continued payment of allowances to respondents impossible and illegal,
and disregarded the DBM's exclusive authority to allow or disallow the
payment of the benefits in question.[29] It likewise faulted the trial court in
ordering the garnishment of its funds despite the settled rule that
government funds may not be garnished in the absence of an appropriation
made by law.[30]

The Court of Appeals, however, found no grave abuse of discretion on the

part of the trial court; hence, in its August 20, 2004 Decision, it dismissed
the petition for lack of merit.[31]

In its present recourse, petitioner, on the one hand, insists that it is difficult
not to consider the issuance of the DBM in this case as a supervening event
that would make the execution of the trial court's decision inequitable
and/or impossible, since the determination of entitlement to benefits and
allowances among government employees is within the agency's exclusive
authority. It argues that, hence, both the trial court and the Court of
Appeals were in error to order the execution of the decision as the same
totally disregards the rule that issuances of administrative agencies are
valid and enforceable.[32] Again, it asserts that the garnishment of its funds
was not in order as there was no existing appropriation therefor. [33]
Respondents, on the other hand, argue in the main that inasmuch as the
core issue of whether they were entitled to the schedule of benefits under
Section 12 of R.A. No. 6758 had already been settled by both the trial court
in Civil Case No. 99-1209 and the Court of Appeals in CA-G.R. SP No.
66303, the DBM letter should not be allowed to interfere with the decision
and render the same ineffective. Since the said decision had already
attained finality, they posit that execution appeared to be the only just and
equitable measure under the premises[34] and that garnishment lies against
petitioner's funds inasmuch as it has a personality separate and distinct
from the government.[35]

There is partial merit in the petition.

To begin with, a writ of mandamus is a command issuing from a court of

law of competent jurisdiction, in the name of the state or sovereign,
directed to an inferior court, tribunal, or board, or to some corporation or
person, requiring the performance of a particular duty therein specified,
which duty results from the official station of the party to whom the writ is
directed, or from operation of law.[36] It is employed to compel the
performance, when refused, of a ministerial duty[37] which, as opposed to a
discretionary one, is that which an officer or tribunal performs in a given
state of facts, in a prescribed manner, in obedience to the mandate of legal
authority, without regard to or the exercise of his or its own judgment upon
the propriety or impropriety of the act done.[38]

A favorable judgment rendered in a special civil action for mandamus is in

the nature of a special judgment. As such, it requires the performance of
any other act than the payment of money or the sale or delivery of real or
personal property the execution of which is governed by Section 11, Rule 39
of the Rules of Court[39] which states:

SECTION 11. Execution of Special Judgment.--When the judgment

requires the performance of any act other than those mentioned in the two
preceding sections, a certified copy of the judgment shall be attached to the
writ of execution and shall be served by the officer upon the party against
whom the same is rendered, or upon any other person required thereby, or
by law, to obey the same, and such party or person may be punished for
contempt if he disobeys such judgment.
While the April 17, 2001 Decision of the trial court ordered petitioner to pay
the benefits claimed by respondents, it by no means ordered the payment of
a specific sum of money and instead merely directed petitioner to extend to
respondents the benefits under R.A. No. 6758 and its implementing rules.
Being a special judgment, the decision may not be executed in the same way
as a judgment for money handed down in an ordinary civil case governed
by Section 9, Rule 39 of the Rules Court which sanctions garnishment of
debts and credits to satisfy a monetary award. Garnishment is proper only
when the judgment to be enforced is one for payment of a sum of money. It
cannot be employed to implement a special judgment such as that rendered
in a special civil action for mandamus.[40]

On this score, not only did the trial court exceed the scope of its judgment
when it awarded the benefits claimed by respondents. It also committed a
blatant error when it issued the February 16, 2004 Order directing the
garnishment of petitioner's funds with the Land Bank of the Philippines
equivalent to P4,806,530.00, even though the said amount was not
specified in the decision it sought to implement.

Be that as it may, assuming for the sake of argument that execution by

garnishment could proceed in this case against the funds of petitioner, it
must bear stress that the latter is a government-owned or controlled
corporation with a charter of its own. Its juridical personality is separate
and distinct from the government and it can sue and be sued in its name.
[41]
 As such, while indeed it cannot evade the effects of the execution of an
adverse judgment and may not ordinarily place its funds beyond an order of
garnishment issued in ordinary cases,[42] it is imperative in order for
execution to ensue that a claim for the payment of the judgment award be
first filed with the Commission on Audit (COA).[43]

Under Commonwealth Act No. 327,[44] as amended by P.D. No. 1445,[45] the

COA, as one of the three independent constitutional commissions, is
specifically vested with the power, authority and duty to examine, audit and
settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property owned or held in trust by the
government, or any of its subdivisions, agencies or instrumentalities,
including government-owned and controlled corporations. [46] To ensure the
effective discharge of its functions, it is vested with ample powers, subject
to constitutional limitations, to define the scope of its audit and
examination and establish the techniques and methods required therefor,
to promulgate accounting and auditing rules and regulations, including
those for the prevention and disallowance of irregular, unnecessary,
excessive, extravagant or unconscionable expenditures or uses of
government funds and properties.[47] Section 1,[48] Rule II of the COA Rules
of Procedure materially provides:

Section 1. General Jurisdiction.--The Commission on Audit shall have the

power, authority and duty to examine, audit and settle all accounts
pertaining to the revenue and receipts of, and expenditures or uses of funds
and property, owned or held in trust by, or pertaining to the Government,
or any of its subdivisions, agencies or instrumentalities, including
government owned and controlled corporations with original charters, and
on a post-audit basis: (a) constitutional bodies, commissions and offices
that have been granted fiscal autonomy under the Constitution; (b)
autonomous state colleges and universities; (c) other government-owned or
controlled corporations and their subsidiaries; and (d) such non-
governmental entities receiving subsidy or equity directly or indirectly,
from or through the government, which are required by law or the granting
institution to submit to such audit as a condition of subsidy or equity.
However, where the internal control system of the audited agencies is
inadequate, the Commission may adopt such measures, including
temporary or special pre-audit, as are necessary or appropriate to correct
the deficiencies. It shall keep the general accounts of the Government, and
for such period as may be provided by law, preserve the vouchers and other
supporting papers pertaining thereto.

xxxx

Specifically, such jurisdiction shall extend over but not limited to

the following: x x x Money claims due from or owing to any
government agency x x x.[49]

Clearly, the matter of allowing or disallowing a money claim against

petitioner is within the primary power of the COA to decide. This no doubt
includes money claims arising from the implementation of R.A. No. 6758.
[50]
 Respondents' claim against petitioner, although it has already been
validated by the trial court's final decision, likewise belongs to that class of
claims; hence, it must first be filed with the COA before execution could
proceed. And from the decision therein, the aggrieved party is afforded a
remedy by elevating the matter to this Court via a petition
for certiorari[51] in accordance with Section 1 Rule XI, of the COA Rules of
Procedure. It states:

Section 1. Petition for Certiorari. - Any decision, order or resolution of

the Commission may be brought to the Supreme Court on certiorari by the
aggrieved party within thirty (30) days from receipt of a copy thereof in the
manner provided by law, the Rules of Court and these Rules.

When the decision, order or resolution adversely affects the interest of any
government agency, the appeal may be taken by the proper head of the
agency.

At this juncture, it is unmistakable that the recourse of respondents in CA-

G.R. SP No. 82637 as well as in the petition before us is at best premature.
Thus, the Court cannot possibly rule on the merits of the petition lest we
would only be preempting the action of the COA on the matter. Suffice it to
say that the propriety or regularity of respondents' claim under the
judgment of the trial court may properly be addressed by the COA in an
appropriate action. And even if we endeavor to take great lengths in
deciding the merits of the case and determine the propriety of the DBM's
issuance, its sufficiency to prevent the execution of the final judgment
rendered in this case, and the entitlement or non-entitlement of each one of
the respondents to the benefits under R.A. No. 6758, the same would
nevertheless be a futile exercise. This, because after having pored over the
records of the case, we found nothing sufficient to support respondents'
uniform claim that they were incumbents as of July 1, 1989 - the date
provided in Section 12 of R.A. 6758 - except perhaps their bare contention
that they were all hired after June 30, 1989.

With this disquisition, we find no compelling reason to unnecessarily

lengthen the discussion by undeservingly proceeding further with the other
issues propounded by the parties.

WHEREFORE, the petition is GRANTED IN PART. The Writ of

Execution dated February 16, 2004 issued in Civil Case No. 99-1209 is
hereby SET ASIDE. The Regional Trial Court of Makati, Branch 138
is DIRECTED to issue a writ of execution in accordance with this Decision
and execute the judgment pursuant to Section 11, Rule 39, of the Rules of
Court.

SO ORDERED.

Ynares-Santiago, (Chairperson), Chico-Nazario, Velasco, Jr., and Nachura,

JJ., concur.

[1]
 Rollo, pp. 9-36.
[2]
 The decision was rendered by the Special Seventeenth Division and was
penned by Associate Justice Andres B. Reyes, with Associate Justices Japar
B. Dimaampao and Monina Arevalo-Zeñarosa (now retired)
concurring; rollo, pp. 40-47.
[3]
 Records, Vol. I, p. 441.
[4]
 Id. at 451.
[5]
 Presided by Judge Sixto Marella, Jr. (now Court of Appeals Associate
Justice).
[6]
 Presidential Decree No. 1267, which carried the title "Creating a National
Home Mortgage Finance Corporation, Defining Its Powers and Functions,
and for Other Purposes," was signed on December 22, 1977.
[7]
 Namely, Mario Abayari, May Almine, Ma. Victoria Alpajaro, Florante
Amores, Angelina Ancheta, Angeline Odiem-Araneta, Cecilia Apacible,
Miriam Bajado, Eduardo Balauro, Evangelina Baliao, Luisa Banua,
Rizalina, Benlayo, Marjorie Binag, Cresencia Bisnar, Carmelita Breboneria,
Joselyn Bunyi, Emilio Cabmongan, Jr., Paz Divina Cabanero, Raul
Cabanilla, Leonila Wynda Cada, Celestina Casao, Elizabeth Casas, Arnulfo
Catalan, Francis dela Chica, Jaime Cortes, Jaime dela Cruz, Johnny
Custodio, Ma. Belinda Dapula, Remedios Debuque, Rebecca Decara,
Jocelyn Diego, Jaime Duque, Lucia Enriquez, Ma. Lucia Esperos, Helen
Evangelista, Celso Fernandez, Edilberto San Gabriel, Reynaldo San Gabriel,
Edmundo Garais, Jennilyn Gozado, Evelyn Guevarra, Ma. Magdalena
Hidona, Victorino Indefonso, Jr., Grace Cecille Javier, Marieta Jose, Ma.
Cecilia Kapaw-an, Evangeline Labay, Senora Lacunsay, Milagroso Allan
Lamban, Violeta De Leon, Charito Lontayo, Remedios Loyola, Nora
Malaluan, Alberto Malificiado, Dennis Manzano, Ma. Concepcion Marquez,
Reynaldo Masilang. Magdalena Mendoza, Melchor Nanud, Milagros
Nepomuceno, Rosemarie Nepomuceno, Apolo Nisperos, Annaliza Nobrera,
Evangeline Nuesca, Yumina Pablo, Gloria Panganiban, Rogelio Paquiz,
Rolando Paredes, Nora Pedroso, Maria Hilna Dela Pena, Victoria Penarada,
Melvin Peralta, Dorothy Perez, Frederick Michael Portacion, Rommel
Rabaca, Roderick Realubit, Gwendolyn Remorin, Antonio Delos Reyes,
Nerrisa Reyes, Nenita Robrigado, Allan Romero, Ma. Rosario Romulo, Luis
Del Rosario, Cristina Rosas, Dexter Salazar, Magdalena Salomon, Olivia
Salomon, Elenita Sanchez, Angelita Santelices, Anabelle Santos, Aurea
Santos, Nelia Santos, Sharlene Santos, Jaime Singh, Delmasingun, Evelyn
So, Jeanne Socorro, Milagros Solmirano, Christine Talusik, Cyril Romuado
Teja, Efren Tesorero, Pennylane Tiongson, Cipriano Tomines, Ronilo
Umali, Ma. Lourdes Valdueza, Ma. Antonia Valenzuela, Edwin Vanguardia,
Carlo Vega, Annamor Velasco, Estefania Villanueva, Candelaria Yodico
[8]
 Records, Vol. I, p. 5.
[9]
 It carries the title "Rules and Regulations for the Implementation of the
Revised Compensation and Position Classification System Prescribed under
R.A. No. 6758 For Government-Owned and/or Controlled Corporations
(GOCCs) and Financial Institutions (GFIs)." For lack of the requisite
publication, the Circular was declared ineffective in the case of De Jesus v.
Commission on Audit, 355 Phil. 584 (1998), but it was subsequently re-
issued on February 15, 1999 and published on March 1, 1999. See Magno v.
Commission on Audit, G.R. No. 149941, August 28, 2007, 531 SCRA 339.
[10]
 Section 5.5. The following allowances/fringe benefits authorized to
GOCCs/GFIs pursuant to the aforementioned issuances are not likewise to
be integrated into the basic salary and allowed to be continued only for
incumbents of positions as of June 30, 1989 who are authorized and
actually receiving said allowances/benefits as of said date at the same terms
and conditions prescribed in said issuances:
5.5.1. Rice Subsidy;
5.5.2 Sugar Subsidy;
5.5.3. Death Benefits other than those granted by the GSIS;
5.5.4. Medical/dental/optical allowances/benefits;
5.5.5. Children's Allowance;
5.5.6. Special Duty Pay/Allowance;
5.5.7. Meal Subsidy;
5.5.8. Longevity Pay; and
5.5.9. Teller's Allowance.

[11]
 Supra note 5.
[12]
 Records, Vol. I, p. 207.
[13]
 Id.
[14]
 Id. at 206-207.
[15]
 The appeal was docketed as CA-G.R. SP No. 66303.
[16]
 See the Decision in CA G.R. SP No. 66303, CA rollo, p. 37.
[17]
 Records, Vol. I, p. 392.
[18]
 Id. at 395-398.
[19]
 See Order dated May 20, 2002, records, vol. I, p. 391.
[20]
 The letter was signed by then DBM secretary Emilia Boncodin, CA rollo,
pp. 40-42.
[21]
 Records, Vol. II, p. 157.
[22]
 Records, Vol. I, pp. 395-398.
[23]
 Id. at 441.
[24]
 Id. at 442-444.
[25]
 Id. at 451.
[26]
 Records, p. 157.
[27]
 While petitioner claims that respondents had sought the garnishment of
its funds, the supposed notice of garnishment does not appear in the
records.
[28]
 CA rollo, pp. 2-16.
[29]
 Id. at 7-13.
[30]
 Id. at 135.
[31]
 Id. at 147. The dispositive portion of the decision reads:

WHEREFORE, premises considered, the Petition for Certiorari is hereby

DISMISSED for lack of merit.

SO ORDERED.

[32]
 Rollo, pp. 20-21.
[33]
 Id. at 257.
[34]
 Id. at 193, 195-197.
[35]
 Id. at 194-195.
[36]
 34 Am Jur. Mandamus, $2.
[37]
 Angchangco, Jr. v. Ombudsman, G.R. No. 122728, February 13, 1997,
268 SCRA 301, 306.
[38]
 Kapisanan ng mga Manggagawa sa Manila Railroad Company Credit
Union, Inc. v. Manila Railroad Company, G.R. No. L-25316, February 28,
1979, 88 SCRA 616, 621.
[39]
 FERIA NOCHE, Civil Procedure Annotated, Vol. 2, 2001 ed. pp. 56, 501.
[40]
 National Electrification Administration v. Morales, G.R. No. 154200,
July 24, 2007, 528 SCRA 79, 88-89.
[41]
 Section 5 of Presidential Decree No. 1267, dated December 21, 1977,
provides:

Section 5. Powers of the Corporation. The corporation shall have the

following powers and functions:

xxxx

(f) To adopt, alter and use a corporate seal; to sue and be sued; and
generally, to exercise all the powers of a corporation under the Corporation
Law which are not inconsistent herewith x x x.
[42]
 See National Electrification Administration v. Morales, supra note 40,
89-90, citing National Housing Authority v. Heirs of Guivelondo, 452 Phil
481, 495 (2003); Rizal Commercial Banking Corporation v. De
Castro, G.R. No. L-34548, November 29, 1988, 168 SCRA 49,
59; Philippine Rock Industries, Inc. v. Board of Liquidators, G.R. No.
84992, December 15, 1989, 180 SCRA 171, 174-175; Philippine National
Railways v. Court of Appeals, G.R. No. L-55347, October 4, 1985, 139
SCRA 87, 91 and Philippine National Bank v. Pabalan, G.R. No. L-33112,
June 15, 1978, 83 SCRA 595, 601-602.
[43]
 National Electrification Administration v. Morales, supra note 40, at
90, citing Parreno v. Commission on Audit, G.R. No. 162224, June 7, 2007,
523 SCRA 390. (2007).
[44]
 Entitled "An Act Fixing the Time within which the Auditor General Shall
render His Decisions and Prescribing the Manner of Appeal Therefrom."
[45]
 Section 26 of Presidential Decree No. 1445 (Ordaining and Instituting a
Government Auditing Code of the Philippines). Signed on June 11,1978.
[46]
 National Electrification Administration v. Morales, supra note
40, National Irrigation Administration v. Enciso, G.R. No. 142571, May 6,
2006; Commissioner of Internal Revenue v. Commission on Audit, G.R.
No. 101976, January 29, 1993, 218 SCRA 203, 211-212.
[47]
 National Irrigation Administration v. Enciso, supra, Commissioner of
Internal Revenue v. Commission on Audit, supra note 46.
[48]
 This provision is also found in Section 2(1), Article IX(D) of the 1987
Constitution.
[49]
 Emphasis ours.
[50]
 See National Electrification Administration v. Morales, supra note 40.
[51]
 Public Estates Authority v. Commission on Audit, G.R. No. 156537,
January 24, 2007, 512 SCRA 428; Philippine National Bank v. Palma, G.R.
No. 157279, August 9, 2005, 466 SCRA 307; Philippine Ports Authority v.
Commission on Audit, G.R. No. 100773, October 16, 1992, 214 SCRA 653,
660; Manila International Airport Authority v. Commission on Audit, G.R.
No. 104217, December 4, 1994, 238 SCRA 714.
 Mobil Phils. Exploration, Inc. vs. Customs
Arrastre Service
MOBIL PHILIPPINES EXPLORATION, INC., plaintiff-appellant,
vs.
CUSTOMS ARRASTRE SERVICE and BUREAU of CUSTOMS, defendants-appellees.
18 SCRA 1120
December 17, 1966

FACTS:

Four cases of rotary drill parts were shipped from abroad consigned to Mobil Philippines. The Customs
Arrastre later delivered to the broker of the consignee three cases only of the shipment. Mobil
Philippines Exploration Inc. filed suit in the CFI against the Customs Arrastre Service and the Bureau of
Customs to recover the value of the undelivered cases plus other damages.

The defendants filed a motion to dismiss the complaint on the ground that not being a person under the
law, defendants cannot be sued.

After the plaintiff opposed the motion, the court dismissed the complaint on the ground that neither the
Customs Arrastre Service nor the Bureau of Customs is suable.

ISSUE:

Can the Customs Arrastre Service or the Bureau of Customs be sued?

HELD:

NO. The Bureau of Customs, acting as part of the machinery of the national government in the
operations of arrastre service, pursuant to express legislative mandate and a necessary incident of its
prime governmental function, is immune from suit, there being no statute to the contrary.

The Bureau of Customs has no personality of its own apart from that of the government. Its primary
function is governmental, that of assessing and collecting lawful revenues from imported articles and all
other tariff and customs duties, fees, charges, fines, and penalties. To this function, arrastre is a
necessary incident. Although said arrastre function is deemed proprietary, it is necessarily an incident of
the primary and governmental function of the Bureau of Customs, so that engaging in the same does
not necessarily render said Bureau liable to suit. For otherwise, it could not perform its governmental
function without necessarily exposing itself to suit. Sovereign immunity granted as to the end should not
be denied as to the necessary means to that end.
 DIVISION

[ GR No. 167000, Jun 08, 2011 ]

GOVERNMENT SERVICE INSURANCE SYSTEM v. GROUP

MANAGEMENT CORPORATION +

DECISION

666 Phil. 277

LEONARDO-DE CASTRO, J.:

At bar are two consolidated Petitions for Review on Certiorari concerning
78 parcels of land located in Barrio Marigondon, Lapu-Lapu City. The
parties in both cases have been in litigation over these lots for the last two
decades in what seems to be an endless exercise of filing  repetitious suits
before the Court of Appeals and even this Court, questioning the various
decisions and resolutions  issued by the two separate trial courts involved. 
With this decision, it is intended that  all legal disputes among the parties
concerned, particularly over all the issues involved in these cases, will
finally come to an end

In the Petition in G.R. No. 167000, the Government Service Insurance

System (GSIS) seeks to reverse and set aside the November 25, 2004
Decision [1] and January 20, 2005 Resolution [2] of the Twentieth Division of
the Court of Appeals in CA-G.R. SP No. 85096 and to annul and set aside
the March 11, 2004 [3] and May 7, 2004 [4] Orders of the Regional Trial
Court (RTC) of Lapu-Lapu City (Lapu-Lapu RTC) in Civil Case No. 2203-
L.

In the Petition in G.R. No. 169971, Group Management Corporation

(GMC) seeks to reverse and set aside the September 23, 2005 Decision [5] in
CA-G.R. SP No. 84382 wherein the Special Nineteenth Division of the
Court of Appeals annulled and set aside the March 11, 2004 Order of the
Lapu-Lapu RTC in Civil Case No. 2203-L.
Both these cases stem from the same undisputed factual antecedents as
follows:

Lapu-Lapu Development & Housing Corporation[6] (LLDHC) was the

registered owner of seventy-eight (78) lots (subject lots), situated in Barrio
Marigondon, Lapu-Lapu City.

On February 4, 1974, LLDHC and the GSIS entered into a Project and Loan
Agreement for the development of the subject lots.  GSIS agreed to extend a
Twenty-Five Million Peso-loan (P25,000,000.00) to LLDHC, and in return,
LLDHC will develop, subdivide, and sell its lots to GSIS members.  To
secure the payment of the loan, LLDHC executed a real estate mortgage
over the subject lots in favor of GSIS.

For LLDHC's failure to fulfill its obligations, GSIS foreclosed the mortgage. 
As the lone bidder in the public auction sale, GSIS acquired the subject lots,
and eventually was able to consolidate its ownership over the subject lots
with the corresponding transfer certificates of title (TCTs) issued in its
name.

On November 19, 1979, GMC offered to purchase on installments the

subject lots from GSIS for a total price of One Million One Hundred
Thousand Pesos (P1,100,000.00), with the aggregate area specified as
423,177 square meters.  GSIS accepted the offer and on February 26, 1980,
executed a Deed of Conditional Sale over the subject lots.  However, when
GMC discovered that the total area of the subject lots was only 298,504
square meters, it wrote GSIS and proposed to proportionately reduce the
purchase price to conform to the actual total area of the subject lots.  GSIS
approved this proposal and an Amendment to the Deed of Conditional Sale
was executed to reflect the final sales agreement between GSIS and GMC.

On April 23, 1980, LLDHC filed a complaint for Annulment of Foreclosure

with Writ of Mandatory Injunction against GSIS before the RTC of Manila
(Manila RTC).  This became Civil Case No. R-82-3429[7] and was
assigned to Branch 38.

On November 3, 1989, GMC filed its own complaint against GSIS for
Specific Performance with Damages before the Lapu-Lapu RTC.  The
complaint was docketed as Civil Case No. 2203-L and it sought to
compel GSIS to execute a Final Deed of Sale over the subject lots since the
purchase price had already been fully paid by GMC.  GSIS, in defense,
submitted to the court a Commission on Audit (COA) Memorandum dated
April 3, 1989, purportedly disallowing in audit the sale of the subject lots
for "apparent inherent irregularities," the sale price to GMC being lower
than GSIS's purchase price at the public auction.  LLDHC, having been
allowed to intervene, filed a Motion to Dismiss GMC's complaint.  When
this motion was denied, LLDHC filed its Answer-in-Intervention and
participated in the ensuing proceedings as an intervenor.

GMC, on February 1, 1992, filed its own Motion to Intervene with a

Complaint-in-Intervention in Civil Case No. R-82-3429.  This was
dismissed on February 17, 1992 and finally denied on March 23, 1992 by
the Manila RTC on the ground that GMC can protect its interest in another
proceeding. [8]

On February 24, 1992, after a full-blown trial, the Lapu-Lapu RTC rendered
its Decision [9] in Civil Case No. 2203-L, the dispositive portion of which
reads:

WHEREFORE, judgment is hereby rendered ordering defendant to:

1. Execute the final deed of absolute sale and deliver the seventy-eight (78)
certificates of title covering said seventy-eight (78) parcels of land to the
[Group Management Corporation (GMC)];

2. Pay [GMC] actual damages, plus attorney's fees and expenses of

litigation, in the amount of P285,638.88 and P100,000.00 exemplary
damages;

3. [D]ismissing in toto intervenor's complaint-in-intervention for lack of

evidence of legal standing and legal interest in the suit, as well as failure to
substantiate any cause of action against either [GMC] or [GSIS]. [10]

In deciding in favor of GMC, the Lapu-Lapu RTC held that there existed a
valid and binding sales contract between GSIS and GMC, which GSIS could
not continue to ignore without any justifiable reason especially since GMC
had already fully complied with its obligations. [11]
The Lapu-Lapu RTC found GSIS's invocation of COA's alleged disapproval
of the sale belated and self-serving.  The Lapu-Lapu RTC said that COA, in
disapproving GSIS's sale of the subject lots to GMC, violated its own
circular which excludes the disposal by a government owned and/or
controlled corporation of its "acquired assets" (e.g., foreclosed assets or
collaterals acquired in the regular course of business).[12]  The Lapu-Lapu
RTC also held that COA may not intrude into GSIS's charter-granted power
to dispose of its acquired assets within five years from acquisition by
"preventing/aborting the sale in question by refusing to pass it in audit." [13] 
Moreover, the Lapu-Lapu RTC held that the GSIS-proferred COA
Memorandum was inadmissible in evidence not only because as a mere
photocopy it failed to measure up to the "best evidence" rule under the
Revised Rules of Court, but also because no one from COA, not even the
auditor who supposedly prepared it, was ever presented to testify to the
veracity of its contents or its due execution. [14]

In dismissing LLDHC's complaint-in-intervention, the Lapu-Lapu RTC

held that LLDHC failed to prove its legal personality as a party-intervenor
and all it was able to establish was a "suggestion of right for [GSIS] to
renege [on] the sale for reasons peculiar to [GSIS] but not transmissible nor
subject to invocation by [LLDHC]." [15]

LLDHC and GSIS filed their separate Notices of Appeal but these were
dismissed by the Lapu-Lapu RTC on December 6, 1993.[16]

On May 10, 1994, the Manila RTC rendered a Decision [17] in Civil Case No.
R-82-3429.  The Manila RTC held that GSIS was unable to prove the
alleged violations committed by LLDHC to warrant the foreclosure of the
mortgage over the subject lots.  Thus, the Manila RTC annulled the
foreclosure made by GSIS and ordered LLDHC to pay GSIS the balance of
its loan with interest, to wit:

WHEREFORE, judgment is hereby rendered:

1. ANNULLING the foreclosure by the defendant GSIS of the mortgage over

the seventy-eight (78) parcels of land here involved:

2. CANCELLING the consolidated certificates of [title] issued in the name

of GSIS and directing the Register of Deeds of Lapu-Lapu City to issue new
certificates of [title] over those seventy-eight (78) parcels of land in the
name of the plaintiff, in exactly the same condition as they were before the
foreclosure;

3. ORDERING the plaintiff to pay the GSIS the amount of P9,200,000.00

with interest thereon at the rate of twelve (12%) percent per annum
commencing from October 12, 1989 until fully paid; and

4. ORDERING defendant GSIS to execute a properly registrable release of

discharge of mortgage over the parcels of land here involved after full
payment of such amount by the plaintiff.

All claims and counterclaims by the parties as against each other are hereby
dismissed.

No pronouncement as to costs. [18]

Armed with the Manila RTC decision, LLDHC, on July 27, 1994, filed
before the Court of Appeals a Petition for Annulment of Judgment of the
Lapu-Lapu RTC Decision in Civil Case No. 2203-L. [19]  LLDHC alleged that
the Manila RTC decision nullified the sale of the subject lots to GMC and
consequently, the Lapu-Lapu RTC decision was also nullified.

This petition, docketed as CA-G.R. SP No. 34696, was dismissed by the

Court of Appeals on December 29, 1994. [20]  The Court of Appeals, in
finding that the grounds LLDHC relied on were without merit, said:

In fine, there being no showing from the allegations of the petition that the
respondent court is without jurisdiction over the subject matter and of the
parties in Civil Case No. 2309 [2203-L], petitioner has no cause of action
for the annulment of judgment. The complaint must allege ultimate facts
for the annulment of the decision (Avendana v. Bautista, 142 SCRA 41).  We
find none in this case. [21]

No appeal having been taken by LLDHC, the decision of the Court of

Appeals in CA-G.R. SP No. 34696 became final and executory on January
28, 1995, as stated in the Entry of Final Judgment dated August 18,
1995. [22]
On February 2, 1995, LLDHC filed before this Court a Petition
for Certiorari [23] docketed as G.R. No. 118633.  LLDHC, in seeking to
annul the February 24, 1992 Decision of the Lapu-Lapu RTC, again alleged
that the Manila RTC Decision nullified the Lapu-Lapu RTC Decision.

Finding the petition a mere reproduction of the Petition for Annulment

filed before the Court of Appeals in CA-G.R. SP No. 34696, this Court, in a
Resolution [24] dated September 6, 1996, dismissed the petition in this wise:

In a last ditch attempt to annul the February 24, 1992 Decision of the
respondent court, this petition was brought before us on February 2, 1995.

Dismissal of this petition is inevitable.

The instant petition which is captioned, For: Certiorari With Preliminary

Injunction, is actually another Petition for Annulment of Judgment of the
February 24, 1992 Decision of the respondent Regional Trial Court of Lapu-
lapu City, Branch 27 in Civil Case No. 2203-L.  A close perusal of this
petition as well as the Petition for Annulment of Judgment brought by the
petitioner before the Court of Appeals in CA-G.R. SP No. 34696 reveals that
the instant petition is a mere reproduction of the petition/complaint filed
before the appellate tribunal for annulment of judgment. Paragraphs two
(2) to eighteen (18) of this petition were copied verbatim from the Petition
for Annulment of Judgment earlier filed in the court a quo, except for the
designation of the parties thereto, i.e., plaintiff was changed to petitioner,
defendant to respondent.  In fact, even the prayer in this petition is the
same prayer in the Petition for Annulment of Judgment dismissed by the
Court of Appeals, x x x.

xxxx

Under Section 9(2) of Batas Pambansa Blg. 129, otherwise known as "The
Judiciary Reorganization Act of 1980," it is the Court of Appeals (then the
Intermediate Appellate Court), and not this Court, which has jurisdiction to
annul judgments of Regional Trial Courts, viz:

SEC. 9.  Jurisdiction -- The Intermediate Appellate Court shall exercise:

xxxx

(2) Exclusive original jurisdiction over actions for annulment of

judgments of Regional Trial Courts; and

xxxx

Thus, this Court apparently has no jurisdiction to entertain a petition which

is evidently another petition to annul the February 24, 1992 Decision of the
respondent Branch 27, Regional Trial Court of Lapu-lapu City, it appearing
that jurisdiction thereto properly pertains to the Court of Appeals.  Such a
petition was brought before the appellate court, but due to petitioner's
failure to nullify Judge Risos' Decision in said forum, LLDHC, apparently at
a loss as to what legal remedy to take, brought the instant petition under
the guise of a petition for certiorari under Rule 65 seeking once again to
annul the judgment of Branch 27.

Instead of filing this petition for certiorari under Rule 65, which is

essentially another Petition to Annul Judgment, petitioner LLDHC should
have filed a timely Petition for Review under Rule 45 of the Revised Rules
of Court of the decision of the Court of Appeals, dated December 29, 1994,
dismissing the Petition for Annulment of Judgment filed by the petitioner
LLDHC before the court a quo.  But, this is all academic now.  The appellate
court's decision had become final and executory on January 28, 1995. [25]

Despite such pronouncements, this Court, nevertheless, passed upon the

merits of LLDHC's Petition for Certiorari in G.R. No. 118633.  This Court
said that the petition, "which was truly for annulment of
judgment," [26] cannot prosper because the two grounds on which a
judgment may be annulled were not present in the case. [27]  Going further,
this Court held that even if the petition were to be given due course as a
petition for certiorari under Rule 65 of the Revised Rules of Court, it would
still be dismissible for not being brought within a reasonable period of time
as it took LLDHC almost three years from the time it received the February
24, 1992 decision until the time it brought this action. [28]

LLDHC's motion for reconsideration was denied with finality[29] on

November 18, 1996, and on February 18, 1997, an Entry of Judgment [30] was
made certifying that the September 6, 1996 Resolution of this Court in G.R.
No. 118633 had become final and executory on December 23, 1996.

Consequently, on November 28, 1996, the Lapu-Lapu RTC issued an

Order[31] directing the execution of the judgment in Civil Case No. 2203-L. 
A corresponding Writ of Execution[32] was issued on December 17, 1996. 
The Motions to Stay Execution filed by LLDHC and GSIS were denied by
the Lapu-Lapu RTC on February 19, 1997.[33]

Meanwhile, on December 27, 1996, the Court of Appeals rendered a

Decision[34] in the separate appeals taken by GSIS and LLDHC from the
May 10, 1994 Manila RTC Decision in Civil Case No. R-82-3429. This case,
docketed as CA-G.R. CV No. 49117, affirmed the Manila RTC decision
with modification insofar as awarding LLDHC attorney's fees and litigation
expenses.

On March 3, 1997, GSIS came to this Court on a Petition for Review of the
Court of Appeals' decision in CA-G.R. CV No. 49117.  This was docketed
as G.R. No. 127732 and was dismissed on April 14, 1997[35] due to late
filing, the due date being January 31, 1997.  This dismissal became final and
executory on May 30, 1997.[36]

On March 8, 1997, LLDHC filed a Petition for Certiorari with preliminary

injunction before the Court of Appeals, praying that GMC and the Lapu-
Lapu RTC be ordered to cease and desist from proceeding with the
execution of its Decision in Civil Case No. 2203-L, on the theory that the
Manila RTC decision was a supervening event which made it mandatory for
the Lapu-Lapu RTC to stop the execution of its decision.  This case was
docketed as CA-G.R. SP No. 44052.  On July 16, 1997, the Court of
Appeals issued an Order temporarily restraining the Lapu-Lapu RTC and
GMC from executing the February 24, 1992 decision in Civil Case No. 2203-
L so as not to render the resolution of the case moot and academic. [37]

On July 21, 1997, because of GSIS's continued refusal to implement the

December 17, 1996 Writ of Execution, the Lapu-Lapu RTC, upon GMC's
motion, issued an Order[38] redirecting its instructions to the Register of
Deeds of Lapu-Lapu City, to wit:

WHEREFORE, the defendant GSIS having refused to implement the Order

of this Court dated December 17, 1996 the Court in accordance with Rule
39, Sec. 10-a of the 1997 Rules of Procedure, hereby directs the Register of
Deeds of Lapu-lapu City to cancel the Transfer Certificate of Titles of the
properties involved in this case and to issue new ones in the name of the
plaintiff and to deliver the same to the latter within ten (10) days after this
Order shall have become final.[39]

While the TRO issued by the Court of Appeals in CA-G.R. SP No. 44052 was
in effect, the Manila RTC, on August 1, 1997, issued a Writ of
Execution[40] of its judgment in Civil Case No. R-82-3429. On August 7,
1997, the Sheriff implemented the Writ and ordered the Register of Deeds
of Lapu-Lapu City to cancel the consolidated certificates of title issued in
the name of GSIS and to issue new ones in favor of LLDHC.  In conformity
with the TRO, the Lapu-Lapu RTC on August 19, 1997, ordered[41] the
suspension of its July 21, 1997 Order. With no similar restraining order
against the execution of the Manila RTC Decision, a Writ of Possession was
issued on August 21, 1997 to cause GSIS and all persons claiming rights
under it to vacate the properties in question and to place LLDHC in
peaceful possession thereof.[42]

On October 23, 1997, the Lapu-Lapu RTC, being aware of the events that
have taken place while the TRO was in effect, issued an Order[43] reiterating
its previous Orders of November 28, 1996, December 17, 1996, and July 21,
1997.  The Lapu-Lapu RTC held that since the restraining order issued by
the Court of Appeals in CA-G.R. SP No. 44052 had already lapsed by
operation of law, and the February 24, 1992 Decision in Civil Case No.
2203-L had not only become final and executory but had been affirmed and
upheld by both the Court of Appeals and this Court, the inescapable
mandate was to give due course to the efficacy of its decision.  The Lapu-
Lapu RTC thus directed the Register of Deeds of Lapu-Lapu City to effect
the transfer of the titles to the subject lots in favor of GMC and declared
"any and all acts done by the Register of Deeds of Lapu-Lapu City null and
void starting with the surreptitious issuance of the new certificates of title
in the name of [LLDHC], contrary" to its decision and orders. [44]

On November 13, 1997, LLDHC filed before the Court of Appeals another
Petition for Certiorari with preliminary injunction and motion to
consolidate with CA-G.R. SP No. 44052.  This case was docketed as CA-
G.R. SP No. 45946, but was dismissed[45] on November 20, 1997 for
LLDHC's failure to comply with Section 1, Rule 65 of the 1997 Rules of Civil
Procedure which requires the petition to be accompanied by, among others,
"copies of all pleadings and documents relevant and pertinent thereto." [46]

The petition in CA-G.R. SP No. 44052 would likewise be dismissed [47] by the
Court of Appeals on January 9, 1998, but this time, on the merits, to wit:

The validity of the decision of the respondent judge in Civil Case No. 2303-
L has thus been brought both before this Court and to the Supreme Court
by the petitioner.  In both instances the respondent judge has been upheld. 
The instant petition is petitioner's latest attempt to resist the
implementation or execution of that decision using as a shield a decision of
a Regional Trial Court in the National Capital Region.  We are not prepared
to allow it.  The applicable rule and jurisprudence are clear. The prevailing
party is entitled as a matter of right to a writ of execution, and the issuance
thereof is a ministerial duty compellable by mandamus.  We do not believe
that there exists in this instance a supervening event which would justify a
deviation from this rule.[48]

Prior to this, however, on November 28, 1997, the Lapu-Lapu RTC, acting
on GMC's Omnibus Motion, made the following orders: for LLDHC to show
cause why it should not be declared in contempt; for a writ of preliminary
prohibitory injunction to be issued to restrain all persons acting on
LLDHC's orders from carrying out such orders in defiance of its final and
executory judgment; and for a writ of preliminary mandatory injunction to
be issued to direct the ouster of LLDHC.  The Lapu-Lapu RTC also declared
the Register of Deeds of Lapu-Lapu City in contempt and directed the
Office of the City Sheriff to implement the above orders and to immediately
detain and confine the Register of Deeds of Lapu-Lapu City at the City Jail
if he continues to refuse to transfer the titles of the subject lots after ten
days from receipt of this order.[49]

On December 22, 1997, the Lapu-Lapu RTC denied[50] the motion for

reconsideration filed by the Register of Deeds of Lapu-Lapu City.  In
separate motions, LLDHC, and again the Register of Deeds of Lapu-Lapu
City, sought the reconsideration of the November 28, 1997 and December
22, 1997 Orders.  On May 27, 1998, the Lapu-Lapu RTC, acting under a new
judge,[51] granted both motions and accordingly set aside the November 28,
1997 and December 22, 1997 Orders. [52]

With the denial [53] of its motion for reconsideration on August 4, 1998,

GMC came to this Court on a Petition for Certiorari, Prohibition
and Mandamus, seeking to set aside the May 27, 1998 Order of the Lapu-
Lapu RTC in Civil Case No. 2203-L.  The Petition was referred to the Court
of Appeals, which under Batas Pambansa Blg. 129, exercises original
jurisdiction to issue such writs. [54]  This was docketed as CA-G.R. SP No.
50650.

On April 30, 1999, the Court of Appeals rendered its Decision [55] in CA-G.R.
SP No. 50650, the dispositive portion of which reads:

WHEREFORE, the petition being partly meritorious, the Court hereby

resolves as follows:

(1) To AFFIRM the Orders of May 28, 1998 and August 4, 1998 in Civil Case
No. 2203-L insofar as they set aside the order holding respondent Register
of Deeds guilty of indirect contempt of court and to NULLIFY said orders in
so far as they set aside the directives contained in paragraphs (a) and (b)
and (c) of the order dated November 28, 1997.

(2) To DECLARE without FORCE and EFFECT insofar as petitioner Group

Management Corporation is concerned the decision in Civil Case No. R-82-
3429 as well as the orders and writs issued for its execution and
enforcement: and

(3) To ENJOIN respondent Lapu-Lapu Development and Housing

Corporation, along with its agents and representatives and/or
persons/public officials/employees acting in its interest, specifically
respondent Regional Trial Court of Manila Branch 38, and respondent
Register of Deeds of Lapu-Lapu City, from obstructing, interfering with or
in any manner delaying the implementation/execution/ enforcement by the
Lapu-Lapu City RTC of its order and writ of execution in Civil Case No.
2203-L.

For lack of sufficient basis the charge of contempt of court against

respondent Lapu-Lapu Development and Housing Corporation and the
public respondents is hereby DISMISSED. [56]

With the denial of LLDHC's motion for reconsideration on December 29,

1999,[57] LLDHC, on January 26, 2000, filed before this Court a Petition for
Review on Certiorari assailing the April 30, 1999 decision of the Court of
Appeals in CA-G.R. SP No. 50650.  This petition was docketed as G.R. No.
141407.

This Court dismissed LLDHC's petition and upheld the decision of the
Court of Appeals in CA-G.R. SP No. 50650 in its decision dated September
9, 2002.[58]  LLDHC's Motion for Reconsideration and Second Motion for
Reconsideration were also denied on November 13, 2002[59] and February
3, 2003, [60] respectively.

The September 9, 2002 decision of this Court in G.R. No. 141407 became
final on March 10, 2003. [61]

On March 11, 2004, the Lapu-Lapu RTC, acting on GMC's Motion for
Execution, issued an Order [62] the dispositive portion of which reads:

WHEREFORE, in light of the foregoing considerations, plaintiff Group

Management Corporation's motion is GRANTED, while defendant GSIS'
motion to stay the issuance of a writ of execution is denied for lack of
merit.  Consequently, the Sheriff of this Court is directed to proceed with
the immediate implementation of this Court's decision dated February 24,
1992, by enforcing completely this Court's Order of Execution dated
November 28, 1996, the writ of execution dated December 17, 1996, the
Order dated July 21, 1997, the Order dated October 23 1997, the Order
dated November 28, 1997 and the Order dated December 22, 1997. [63]

On May 7, 2004, the Lapu-Lapu RTC denied [64] the motions for

reconsideration filed by LLDHC and GSIS.

On May 27, 2004, LLDHC filed before the Court of Appeals a Petition
for Certiorari, Prohibition and Mandamus [65] against the Lapu-Lapu RTC
for having issued the Orders of March 11, 2004 and May 7, 2004 (assailed
Orders).  This petition docketed as CA-G.R. SP No. 84382, sought the
annulment of the assailed Orders and for the Court of Appeals to command
the Lapu-Lapu RTC to desist from further proceeding in Civil Case No.
2203-L, to dismiss GMC's Motion for Execution, and for the issuance of a
Temporary Restraining Order (TRO)/Writ of Preliminary Injunction
against the Lapu-Lapu RTC and GMC.
On July 6, 2004, GSIS filed its own Petition for Certiorari and Prohibition
with Preliminary Injunction and Temporary Restraining Order [66] before
the Court of Appeals to annul the assailed Orders of the Lapu-Lapu RTC, to
prohibit the judge therein and the Register of Deeds of Lapu-Lapu City
from implementing such assailed Orders, and for the issuance of a TRO and
writ of preliminary injunction to maintain the status quo while the case is
under litigation. This petition was docketed as CA-G.R. SP No. 85096. 

The Court of Appeals initially dismissed outright LLDHC's petition for

failure to attach the Required Secretary's Certificate/Board Resolution
authorizing petitioner to initiate the petition, [67] but in a
Resolution [68] dated August 2, 2004, after having found the explanation for
the mistake satisfactory, the Court of Appeals, "on equitable consideration
and for the purpose of preserving the status quo during the pendency of the
appeal," [69] issued a TRO against the Lapu-Lapu RTC from enforcing its
jurisdiction and judgment/order in Civil Case No. 2203-L until further
orders.  In its August 30, 2004 Resolution, [70] the Court of Appeals, without
resolving the case on its merits, also issued a Writ of Preliminary
Injunction, commanding the Lapu-Lapu RTC to cease and desist from
implementing the assailed Orders in Civil Case No. 2203-L, until further
orders.

On November 25, 2004, the Twentieth Division of the Court of Appeals

promulgated its decision in CA-G.R. SP No. 85096.  It dismissed GSIS's
petition and affirmed the assailed Orders of March 11, 2004 and May 7,
2004.  The Court of Appeals found no merit in GSIS's petition since the
judgment in Civil Case No. 2203-L, which was decided way back on
February 24, 1992, had long become final and executory, which meant that
the Lapu-Lapu RTC had no legal obstacle to cause said judgment to be
executed and enforced.  The Court of Appeals quoted in full, portions of this
Court's Decision in G.R. No. 141407 to underscore the fact that no less than
the Supreme Court had declared that the decision in Civil Case No. 2203-L
was valid and binding and had become final and executory a long time ago
and had not been in any way nullified by the decision rendered by the
Manila RTC on May 10, 1994 in Civil Case No. R-82-3429.  On January 20,
2005, the Court of Appeals upheld its decision and denied GSIS's Motion
for Reconsideration. [71]

However, on September 23, 2005, the Special Nineteenth Division of the

Court of Appeals came out with its own decision in CA-G.R. SP No. 84382. 
It granted LLDHC's petition, contrary to the Court of Appeals' decision in
CA-G.R. SP No. 85096, and annulled and set aside the March 11, 2004
Order of the Lapu-Lapu RTC in this wise:

WHEREFORE, finding merit in the instant Petition for Certiorari,

Prohibition and Mandamus, the same is hereby GRANTED, and the
assailed Order, dated March 11, 2004, of the Regional Trial Court,
7th Judicial Region, Branch 27, Lapulapu City, in Civil Case No. 2203-L
is ANNULLED AND SET ASIDE.

Accordingly, respondent Judge Benedicto Cobarde is hereby ORDERED:

a) to DESIST from further proceeding in Civil Case No. 2203-L; and

b) to DISMISS GMC's Motion for Execution in the abovementioned case;

Meanwhile, the Writ of Preliminary Injunction earlier issued is hereby

declared PERMANENT.  No pronouncement as to costs. [72]

GSIS [73] and GMC [74] are now before this Court, with their separate

Petitions for Review on Certiorari, assailing the decisions of the Court of
Appeals in CA-G.R. SP No. 85096 and CA-G.R. SP No.
84382, respectively.

G.R. No. 167000

In G.R. No. 167000, GSIS is assailing the Orders issued by the Lapu-Lapu
RTC on March 11, 2004 and May 7, 2004 for being legally unenforceable on
GSIS because the titles of the 78 lots in Marigondon, Lapu-Lapu City were
already in LLDHC's name, due to the final and executory judgment
rendered by the Manila RTC in Civil Case No. R-82-3429.  GSIS contends
that it is legally and physically impossible for it to comply with the assailed
Orders as the "subject matter to be delivered or performed have already
been taken away from" [75] GSIS.  GSIS asserts that the circumstances which
have arisen, from the judgment of the Manila RTC to the cancellation of
GSIS's titles, are "supervening events" which should be considered as an
exception to the doctrine of finality of judgments because they render the
execution of the final and executory judgment of the Lapu-Lapu RTC in
Civil Case No. 2203-L unjust and inequitable.  GSIS further claims that it
should not be made to pay damages of any kind because its funds and
properties are exempt from execution, garnishment, and other legal
processes under Section 39 of Republic Act No. 8291.

LLDHC, in its Compliance, [76] believes that it was impleaded in this case as

a mere nominal party since it filed its own Petition for Certiorari before the
Court of Appeals, which was granted in CA-G.R. SP No. 84382.  LLDHC
essentially agrees with GSIS that the implementation of the assailed Orders
have become legally impossible due to the fully implemented Writ of
Execution issued by the Manila RTC in Civil Case No. R-82-3429.  LLDHC
alleges that because of this "supervening event," GSIS cannot be compelled
to execute a final deed of sale in GMC's favor, and "LLDHC cannot be
divested of its titles, ownership and possession" of the subject
properties. [77]

GMC in its comment [78] argues that GSIS has no legal standing to institute

this petition because it has no more interest in the subject lots, since it is no
longer in possession and the titles thereto have already been registered in
LLDHC's name.  GMC claims that the decision of the Special Nineteenth
Division of the Court of Appeals is barred by res judicata, and that LLDHC
is guilty of forum shopping for filing several petitions before the Court of
Appeals and this Court with the same issues and arguments.  GMC also
asserts that the judgment in Civil Case No. R-82-3429 is enforceable only
between GSIS and LLDHC as GMC was not a party to the case, and that the
Manila RTC cannot overrule the Lapu-Lapu RTC, they being co-equal
courts.

G.R. No. 169971

In G.R. No. 169971, GMC is praying that the decision of the Special
Nineteenth Division of the Court of Appeals in CA-G.R. SP No. 84382 be
reversed and set aside.  GMC is claiming that the Court of Appeals, in
rendering the said decision, committed a palpable legal error by overruling
several final decisions rendered by the Lapu-Lapu RTC, the Court of
Appeals, and this Court. [79]  GMC claims that the Lapu-Lapu RTC's duty to
continue with the implementation of its orders is purely ministerial as the
judgment has not only become final and executory, but has been affirmed
by both the Court of Appeals and the Supreme Court in several equally final
and executory decisions. [80]  GMC, repeating its arguments in G.R. No.
167000, maintains that the petition is barred by res judicata, that there is
forum shopping, and that the Manila RTC decision is not binding on GMC.

LLDHC in its comment [81] insists that there is a supervening event which

rendered it necessary to stay the execution of the judgment of the Lapu-
Lapu RTC.  LLDHC also asserts that, as correctly found by the Court of
Appeals in CA-G.R. SP No. 84382, the Lapu-Lapu RTC decision in Civil
Case No. 2203-L was not affirmed with finality by the Court of Appeals and
the Supreme Court as the decision was not reviewed on the merits.

SUMMARY OF THE ISSUES

The present case is peculiar in the sense that it involves two conflicting final
and executory decisions of two different trial courts.  Moreover, one of the
RTC decisions had been fully executed and implemented.  To complicate
things further, the parties have previously filed several petitions, which
have reached not only the Court of Appeals but also this Court.  Upon
consolidation of the two petitions, this Court has narrowed down the issues
to the following:

1. Whether or not the decision of the Manila RTC in Civil Case No. R-
82-3429 constitutes a supervening event, which should be admitted
as an exception to the doctrine of finality of judgments.

2. Whether or not the September 23, 2005 Decision of the Special

Nineteenth Division of the Court of Appeals in CA-G.R. SP No. 84382
and GSIS's Petition in G.R. No. 167000 are barred by res judicata.

3. Whether or not there is a legal and physical impossibility for GSIS to

comply with the March 11, 2004 and May 7, 2004 Orders of the Lapu-
Lapu RTC in Civil Case No. 2203-L.

4. Whether or not LLDHC and GSIS are guilty of forum shopping.

 DISCUSSION

First Issue:
Supervening Event

It is well-settled that once a judgment attains finality, it becomes

immutable and unalterable.  It may not be changed, altered or modified in
any way even if the modification were for the purpose of correcting an
erroneous conclusion of fact or law.  This is referred to as the "doctrine of
finality of judgments," and this doctrine applies even to the highest court of
the land. [82]  This Court explained its rationale in this wise:

The doctrine of finality of judgment is grounded on fundamental

considerations of public policy and sound practice, and that, at the risk of
occasional errors, the judgments or orders of courts must become final at
some definite time fixed by law; otherwise, there would be no end to
litigations, thus setting to naught the main role of courts of justice which is
to assist in the enforcement of the rule of law and the maintenance of peace
and order by settling justiciable controversies with finality. [83]

This Court has, on several occasions, ruled that the doctrine of finality of
judgments admits of certain exceptions, namely: "the correction of clerical
errors, the so-called nunc pro tunc entries which cause no prejudice to any
party, void judgments, and whenever circumstances transpire after the
finality of the decision which render its execution unjust and
inequitable." [84]

Both GSIS and LLDHC claim that the execution of the decision and orders
in Civil Case No. 2203-L should be stayed because of the occurrence of
"supervening events" which render the execution of the judgment
"impossible, unfair, unjust and inequitable." [85]  However, in order for an
event to be considered a supervening event to justify the alteration or
modification of a final judgment, the event must have transpired after the
judgment has become final and executory, to wit:

Supervening events refer to facts which transpire after judgment has

become final and executory or to new circumstances which developed after
the judgment has acquired finality, including matters which the parties
were not aware of prior to or during the trial as they were not yet in
existence at that time. [86]

The Lapu-Lapu RTC Decision in Civil Case No. 2203-L was promulgated
on February 24, 1992, while the Manila RTC Decision in Civil Case No.
R-82-3429 was promulgated on May 10, 1994.  As early as December 6,
1993, both GSIS's and LLDHC's appeals of the Lapu-Lapu RTC Decision
were dismissed by the said RTC. [87]  Only GSIS moved to reconsider this
dismissal, which was denied on July 6, 1994. [88]  Strictly speaking, the Lapu
Lapu RTC Decision should have attained finality at that stage; however,
LLDHC filed with the Court of Appeals its Petition for Annulment of
Judgment (CA-G.R. SP No. 34696) on July 27, 1994 and it used therein the
Manila RTC Decision as its main ground for annulment of the Lapu-Lapu
RTC decision.

The Court of Appeals nonetheless dismissed LLDHC's Petition for

Annulment of Judgment, in CA-G.R. SP No. 34696, [89] and that became
final and executory on January 28, 1995, [90] after LLDHC interposed no
appeal.  The entry of judgment in this case was issued on August 18,
1995. [91]  Moreover, the similar petition of LLDHC before this Court in G.R.
No. 118633 was decided on September 6, 1996 and became final and
executory on December 23, 1996.  Therefore, the ruling by the Manila RTC
is evidently not a supervening event.  It was already in existence even
before the decision in Civil Case No. 2203-L attained finality.

Just as LLDHC and GSIS, as the losing parties, had the right to file their
respective appeals within the prescribed period, GMC, as the winning party
in Civil Case No. 2203-L, equally had the correlative right to benefit from
the finality of the resolution of its case, [92] to wit:

A final judgment vests in the prevailing party a right recognized and

protected by law under the due process clause of the Constitution. A final
judgment is "a vested interest which it is right and equitable that the
government should recognize and protect, and of which the individual
could not be deprived arbitrarily without injustice." [93] (Citations omitted.)

Since the Manila RTC decision does not constitute a supervening event,
there is therefore neither reason nor justification to alter, modify or annul
the Lapu-Lapu RTC Decision and Orders, which have long become final
and executory.  Thus, in the present case, GMC must not be deprived of its
right to enjoy the fruits of a final verdict.

It is settled in jurisprudence that to stay execution of a final judgment, a

supervening event "must create a substantial change in the rights or
relations of the parties which would render execution of a final judgment
unjust, impossible or inequitable making it imperative to stay immediate
execution in the interest of justice." [94]

However, what would be unjust and inequitable is for the Court to accord
preference to the Manila RTC Decision on this occasion when in the past,
the Court of Appeals and this Court have repeatedly, consistently, and with
finality rejected LLDHC's moves to use the Manila RTC Decision as a
ground to annul, and/or to bar the execution of, the Lapu Lapu RTC
Decision.  To be sure, in the Decision dated September 9, 2002 in G.R. No.
141407, penned by former Chief Justice Artemio V. Panganiban, the Court
already passed upon the lack of effect of the Manila RTC Decision on the
finality of the Lapu Lapu RTC decision in this wise:

The records of the case clearly show that the Lapulapu Decision has become
final and executory and is thus valid and binding upon the parties.
Obviously, petitioner [LLDHC] is again trying another backdoor
attempt to annul the final and executory Decision of the
Lapulapu RTC.

First, it was petitioner that filed on March 11, 1992 a Notice of

Appeal contesting the Lapulapu RTC Judgment in Civil Case No. 2203-L
rendered on February 24, 1992. The Notice was however rejected by the
said RTC for being frivolous and dilatory. Since petitioner had done
nothing thereafter, the Decision clearly became final and executory.

However, upon receipt of the Manila RTC Decision, petitioner

found a new tool to evade the already final Lapulapu Decision by
seeking the annulment of the latter in a Petition with the
CA. However, the appellate court dismissed the action, because
petitioner had been unable to prove any of the grounds for annulment;
namely lack of jurisdiction or extrinsic fraud. Because no appeal had been
taken by petitioner, the ruling of the CA also became final and executory.
Second, the Supreme Court likewise recognized the finality of the
CA Decision when it threw out LLDHC's Petition for Certiorari in
GR No. 118633. This Court ruled thus:

"Instead of filing this petition for certiorari under Rule 65, which is

essentially another Petition to Annul Judgment, petitioner LLDHC should
have filed a timely Petition for Review under Rule 45 of the Revised Rules
of Court of the decision of the Court of Appeals, dated December 29, 1994,
dismissing the Petition for Annulment of Judgment filed by the petitioner
LLDHC before the court a quo. But this is all academic now. The appellate
court's decision had become final and executory on January 28, 1995."

Jurisprudence mandates that when a decision becomes final and executory,

it becomes valid and binding upon the parties and their successors in
interest. Such decision or order can no longer be disturbed or reopened no
matter how erroneous it may have been. Petitioner's failure to file an appeal
within the reglementary period renders the judgment final and executory.
The perfection of an appeal in the manner and within the period prescribed
by law is mandatory. Failure to conform to the rules regarding appeal will
render the judgment final and executory and, hence,
unappealable. Therefore, since the Lapulapu Decision has become
final and executory, its execution has become mandatory and
ministerial on the part of the judge.

The CA correctly ruled that the Lapulapu Judgment is binding

upon petitioner [LLDHC] which, by its own motion, participated
as an intervenor. In fact, the latter filed an Answer in
Intervention and thereafter actively took part in the trial. Thus,
having had an opportunity to be heard and to seek a reconsideration of the
action or ruling it complained of, it cannot claim that it was denied due
process of law. What the law prohibits is the absolute absence of the
opportunity to be heard. Jurisprudence teaches that a party cannot feign
denial of due process if it has been afforded the opportunity to present its
side.

Petitioner likewise claims that Private Respondent GMC cannot

escape the adverse effects of the final and executory judgment of
the Manila RTC.
Again, we do not agree. A trial court has no power to stop an act that
has been authorized by another trial court of equal rank. As correctly
stated by the CA, the Decision rendered by the Manila RTC --
while final and executory -- cannot bind herein private
respondent [GMC], which was not a party to the case before the
said RTC. A personal judgment is binding only upon the parties,
their agents, representatives and successors in interest.

Third, petitioner grievously errs in insisting that the judgment of

the Manila RTC nullified that of the Lapulapu RTC. As already
adverted to earlier, courts of coequal and coordinate jurisdiction
may not interfere with or pass upon each other's orders or
processes, since they have the same power and jurisdiction.
Except in extreme situations authorized by law, they are proscribed from
doing so.[95] (Emphases supplied.)

It likewise does not escape the attention of this Court that the only reason
the Manila RTC Decision was implemented ahead of the Lapu Lapu RTC
Decision was that LLDHC successfully secured a TRO from the Court of
Appeals through its petition for certiorari docketed as CA-G.R. SP No.
44052, which was eventually dismissed by the appellate court.  The Court of
Appeals ruled that the Manila RTC Decision did not constitute a
supervening event that would forestall the execution of the Lapu Lapu RTC
Decision.  This decision of the Court of Appeals likewise became final and
executory in 1998.

It bears repeating that the issue of whether or not the Manila RTC Decision
could nullify or render unenforceable the Lapu Lapu RTC Decision has
been litigated many times over in different fora.  It would be the height of
inequity if the Court were to now reverse the Court of Appeals' and its own
final and executory rulings and allow GSIS to prevent the execution of the
Lapu Lapu RTC Decision on the same legal grounds previously discredited
by the courts.

Second Issue:
Res Judicata

GMC asserts that the September 23, 2005 Decision of the Special
Nineteenth Division of the Court of Appeals in CA-G.R. SP No. 84382 and
the petition herein by GSIS in G.R. No. 167000 are barred by res
judicata as the issues involved had been fully resolved not only by the lower
courts but by this Court as well.  GSIS and LLDHC both insist that res
judicata does not apply as this Court "has not yet rendered a decision
involving the same or any similar petition." [96]  The petitions by LLDHC
before the Court of Appeals and GSIS before this Court both prayed for the
annulment of the March 11, 2004 and May 7, 2004 Orders of the Lapu-
Lapu RTC in Civil Case No. 2203-L.  These assailed Orders were both
issued to resolve the parties' motions and to have the February 24, 1992
judgment implemented and executed.

In Republic of the Philippines (Civil Aeronautics Administration) v.

Yu, [97] this Court expounded on the concept of res judicata and explained it
in this wise:

Res judicata literally means "a matter adjudged; a thing judicially acted

upon or decided; a thing or matter settled by judgment."  Res judicata lays
the rule that an existing final judgment or decree rendered on the merits,
and without fraud or collusion, by a court of competent jurisdiction, upon
any matter within its jurisdiction, is conclusive of the rights of the parties or
their privies, in all other actions or suits in the same or any other judicial
tribunal of concurrent jurisdiction on the points and matters in issue in the
first suit. [98]

In Villanueva v. Court of Appeals, [99] we enumerated the elements of res

judicata as follows:

a) The former judgment or order must be final;

It must be a judgment or order on the merits, that is, it was rendered
b) after a consideration of the evidence or stipulations submitted by the
parties at the trial of the case;
It must have been rendered by a court having jurisdiction over the
c)
subject matter and the parties; and
There must be, between the first and second actions, identity of parties,
d) of subject matter and of cause of action.  This requisite is satisfied if the
two (2) actions are substantially between the same parties. [100]
All three parties herein are in agreement with the facts that led to the
petitions in this case. However, not all of them agree that the matters
involved in this case have already been judicially settled. While GMC
contends that GSIS's petition is barred by res judicata, both GSIS and
LLDHC assert that this Court has not yet decided any similar petition, thus
disputing the claim of res judicata.

Res judicata has two concepts: (1) "bar by prior judgment" as enunciated in

Rule 39, Section 47(b) of the 1997 Rules of Civil Procedure; and (2)
"conclusiveness of judgment" in Rule 39, Section 47(c), which reads as
follows:

(b)  In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in
relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the
same capacity; and

(c)  In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment
or final order which appears upon its face to have been so adjudged, or
which was actually and necessarily included therein or necessary thereto.

In explaining the two concepts of res judicata, this Court held that:

There is "bar by prior judgment" when, as between the first case where the
judgment was rendered, and the second case that is sought to be barred,
there is identity of parties, subject matter, and causes of action.  But where
there is identity of parties and subject matter in the first and second cases,
but no identity of causes of action, the first judgment is conclusive only as
to those matters actually and directly controverted and determined and not
as to matters merely involved therein. This is "conclusiveness of
judgment."  Under the doctrine of conclusiveness of judgment, facts and
issues actually and directly resolved in a former suit cannot again be raised
in any future case between the same parties, even if the latter suit may
involve a different claim or cause of action.  The identity of causes of action
is not required but merely identity of issues. [101]

In Peñalosa v. Tuason, [102] we laid down the test in determining whether or

not the causes of action in the first and second cases are identical:

Would the same evidence support and establish both the present and
former cause of action?  If so, the former recovery is a bar; if otherwise, it
does not stand in the way of the former action. [103]

Res judicata clearly exists in G.R. No. 167000 and in CA-G.R. SP No. 84382
because both GSIS's and LLDHC's actions put in issue the validity of the
Lapu-Lapu RTC Decision and were based on the assumption that it has
either been modified, altered or nullified by the Manila RTC Decision.

In CA-G.R. SP No. 84382, LLDHC sought to annul the assailed Orders of

the Lapu-Lapu RTC and to order the judge therein to desist from further
proceeding in Civil Case No. 2203-L. LLDHC sought for the same reliefs in
its Petition for Annulment of Judgment in CA-G.R. SP No. 34696 and G.R.
No. 118633, in its Petition for Certiorari in CA-G.R. SP No. 44052, and in
its Petition for Review on Certiorari in G.R. No. 141407, all of which have
been decided with finality.

In G.R. No. 167000, GSIS is praying for the reversal of the November 25,
2004 Decision and January 20, 2005 Resolution in CA-G.R. SP No. 85096,
wherein the Court of Appeals affirmed the assailed Orders.  The validity of
these assailed Orders hinges on the validity of the Lapu-Lapu RTC
Decision, which issue had already been decided with finality by both the
Court of Appeals and this Court.

Notwithstanding the difference in the forms of actions GSIS and LLDHC

filed, the doctrine of res judicata still applies considering that the parties
were litigating the same thing, i.e., the 78 lots in Marigondon, Lapu-Lapu
City, and more importantly, the same contentions and evidence were used
in all causes of action.  As this Court held in Mendiola v. Court of
Appeals [104]:
The test of identity of causes of action lies not in the form of an action but
on whether the same evidence would support and establish the former and
the present causes of action.  The difference of actions in the aforesaid cases
is of no moment. x x x. [105]

The doctrine of res judicata makes a final judgment on the merits rendered

by a court of competent jurisdiction conclusive as to the rights of the parties
and their privies and amounts to an absolute bar to subsequent actions
involving the same claim, demand, or cause of action.[106]  Even a finding of
conclusiveness of judgment operates as estoppel with respect to matters in
issue or points controverted, on the determination of which the finding or
judgment was anchored.[107]

Evidently, this Court could dispose of this case simply upon the application
of the principle of res judicata.  It is clear that GSIS's petition in G.R. No.
167000 and LLDHC's petition in CA-G.R. SP No. 84382 should have never
reached those stages for having been barred by a final and executory
judgment on their claims.  However, considering the nature of the case
before us, this Court is compelled to make a final determination of the
issues in the interest of substantial justice and to end the wasteful use of
our courts' time and resources.

Third Issue:
GSIS's Compliance with the
Lapu-Lapu RTC Judgment and Orders

GSIS asserts that the assailed Orders cannot be enforced upon it given the
physical and legal impossibility for it to comply as the titles over the subject
properties were transferred to LLDHC under the Manila RTC writ of
execution.

A closer perusal of the March 11, 2004 and May 7, 2004 Orders shows that
GSIS's argument holds no water.  The May 7, 2004 Order denied GSIS's
and LLDHC's motions for reconsideration of the March 11, 2004 Order. 
The March 11, 2004 Order resolved GMC's urgent manifestation and
motion to proceed with the implementation of the February 24, 1992 final
and executory decision and GSIS's and LLDHC's opposition thereto, as well
as GSIS's motion to stay the issuance of a writ of execution against it.  The
dispositive portion of the Order reads:
WHEREFORE, in the light of the foregoing considerations, plaintiff Group
Management Corporation's motion is GRANTED, while defendant GSIS'
motion to stay the issuance of a writ of execution is denied for lack of
merit.  Consequently, the Sheriff of this Court is directed to proceed
with the immediate implementation of this Court's decision
dated February 24, 1992, by enforcing completely this Court's Order of
Execution dated November 28, 1996, the writ of execution dated December
17, 1996, the Order dated July 21, 1997, the Order dated October 23, 1997,
the Order dated November 28, 1997 and the Order dated December 22,
1997. [108] (Emphasis ours.)

While the previous orders and writs of execution issued by the Lapu-Lapu
RTC required the GSIS to execute the final deed of sale and to deliver the
subject properties, the Lapu-Lapu RTC, in its subsequent Orders, modified
this by directing its order to the Register of Deeds of Lapu-Lapu City.  In its
July 21, 1997 Order, [109] the Lapu-Lapu RTC, seeing GSIS's obstinate refusal
to implement the court's previous orders, directed the Register of Deeds of
Lapu-Lapu City to cancel the Transfer Certificates of Title of the subject
properties and to issue new ones in the name of GMC, and to deliver the
same to GMC.  Moreover, in its October 23, 1997 Order, the Lapu-Lapu
RTC, noting the implemented judgment of the Manila RTC, declared the
issuance of new titles to LLDHC null and void for being contrary to the
court's February 24, 1992 decision and directed the Register of Deeds to
effect the transfer of the titles to GMC.

Considering that the assailed Orders merely directed the Lapu-Lapu RTC's
Sheriff to proceed with the implementation of the court's previous orders,
that is, to make sure that the Register of Deeds of Lapu-Lapu City complied
with the orders, GSIS had nothing to comply with insofar as the titles to,
and possession of, the subject properties were concerned, the Orders being
clearly directed towards the Sheriff of the Lapu-Lapu RTC and the Register
of Deeds of Lapu-Lapu City.  Hence, GSIS's argument of legal and physical
impossibility of compliance with the assailed Orders is baseless.

GSIS also argues that it cannot be the "subject [of any] execution including
[the] payment of any damage and other monetary judgments because all
GSIS funds and properties are absolutely and expressly exempt from
execution and other legal processes under Section 39 of Republic Act No.
8291." [110]

Section 39 of Republic Act No. 8291 provides:

SECTION 39. Exemption from Tax, Legal Process and Lien. --It is

hereby declared to be the policy of the State that the actuarial solvency of
the funds of the GSIS shall be preserved and maintained at all times and
that contribution rates necessary to sustain the benefits under this Act shall
be kept as low as possible in order not to burden the members of the GSIS
and their employers. Taxes imposed on the GSIS tend to impair the
actuarial solvency of its funds and increase the contribution rate necessary
to sustain the benefits of this Act. Accordingly, notwithstanding any laws to
the contrary, the GSIS, its assets, revenues including all accruals thereto,
and benefits paid, shall be exempt from all taxes, assessments, fees, charges
or duties of all kinds. These exemptions shall continue unless expressly and
specifically revoked and any assessment against the GSIS as of the approval
of this Act are hereby considered paid. Consequently, all laws, ordinances,
regulations, issuances, opinions or jurisprudence contrary to or in
derogation of this provision are hereby deemed repealed, superseded and
rendered ineffective and without legal force and effect.

xxxx

The funds and/or the properties referred to herein as well as the benefits,
sums or monies corresponding to the benefits under this Act shall be
exempt from attachment, garnishment, execution, levy or other processes
issued by the courts, quasi judicial agencies or administrative bodies
including Commission on Audit (COA) disallowances and from all financial
obligations of the members, including his pecuniary accountability arising
from or caused or occasioned by his exercise or performance of his official
functions or duties, or incurred relative to or in connection with his
position or work except when his monetary liability, contractual or
otherwise, is in favor of the GSIS.

This Court, in Rubia v. Government Service Insurance System,[111] held that

the exemption of GSIS is not absolute and does not encompass all of its
funds, to wit:
In so far as Section 39 of the GSIS charter exempts the GSIS from
execution, suffice it to say that such exemption is not absolute and does not
encompass all the GSIS funds. By way of illustration and as may be gleaned
from the Implementing Rules and Regulation of the GSIS Act of 1997, one
exemption refers to social security benefits and other benefits of
GSIS members under Republic Act No. 8291 in connection with financial
obligations of the members to other parties. The pertinent GSIS Rule
provides:

Rule XV. Funds of the GSIS

Section 15.7 Exemption of Benefits of Members from Tax,

Attachment, Execution, Levy or other Legal Processes. - The
social security benefits and other benefits of GSIS members under R.A.
8291 shall be exempt from tax, attachment, garnishment, execution, levy or
other processes issued by the courts, quasi-judicial agencies or
administrative bodies in connection with all financial obligations of
the member, including his pecuniary accountability arising from or
caused or occasioned by his exercise or performance of his official functions
or duties or incurred in connection with his position or work, as well as
COA disallowances. Monetary liability in favor of the GSIS, however, may
be deducted from the benefits of the member.  [Emphasis supplied]

The processual exemption of the GSIS funds and properties under Section
39 of the GSIS Charter, in our view, should be read consistently with its
avowed principal purpose: to maintain actuarial solvency of the GSIS in the
protection of assets which are to be used to finance the retirement,
disability and life insurance benefits of its members. Clearly, the exemption
should be limited to the purposes and objects covered. Any interpretation
that would give it an expansive construction to exempt all GSIS assets from
legal processes absolutely would be unwarranted.

Furthermore, the declared policy of the State in Section 39 of the GSIS

Charter granting GSIS an exemption from tax, lien, attachment, levy,
execution, and other legal processes should be read together with the grant
of power to the GSIS to invest its "excess funds" under Section 36 of the
same Act.  Under Section 36, the GSIS is granted the ancillary power to
invest in business and other ventures for the benefit of the employees, by
using its excess funds for investment purposes. In the exercise of such
function and power, the GSIS is allowed to assume a character similar to a
private corporation.  Thus, it may sue and be sued, as also, explicitly
granted by its charter. Needless to say, where proper, under Section 36, the
GSIS may be held liable for the contracts it has entered into in the course of
its business investments.  For GSIS cannot claim a special immunity from
liability in regard to its business ventures under said Section.  Nor can it
deny contracting parties, in our view, the right of redress and the
enforcement of a claim, particularly as it arises from a purely contractual
relationship, of a private character between an individual and the GSIS. [112]

This ruling has been reiterated in the more recent case of Government
Service Insurance System v. Regional Trial Court of Pasig City, Branch
71, [113] wherein GSIS, which was also the petitioner in that case, asked to
reverse this Court's findings in Rubia and grant GSIS absolute immunity. 
This Court rejected that plea and held that GSIS should not be allowed to
hide behind such immunity especially since its obligation arose from its
own wrongful action in a business transaction.

In this case, the monetary judgments against GSIS arose from its failure to
comply with its private and contractual obligation to GMC.  As such, GSIS
cannot claim immunity from the enforcement of the final and executory
judgment against it. [114]

Fourth Issue:
Forum Shopping

On the issue of forum shopping, this Court already found LLDHC guilty of
forum shopping and was adjudged to pay treble costs way back in 2002 in
G.R. No. 141407 [115]:

There is forum shopping whenever, as a result of an adverse opinion in one

forum, a party seeks a favorable opinion (other than by appeal
or certiorari) from another.  In Gatmaytan v. CA, the petitioner therein
repeatedly availed itself of several judicial remedies in different courts,
simultaneously or successively.  All those remedies were substantially
founded on the same transactions and the same essential facts and
circumstances; and all raised substantially the same issues either pending
in, or already resolved adversely by, some other court.  This Court held that
therein petitioner was trying to increase his chances of obtaining a
favorable decision by filing multiple suits in several courts. Hence, he was
found guilty of forum shopping.

In the present case, after the Lapulapu RTC had rendered its Decision in
favor of private respondent, petitioner filed several petitions before this
Court and the CA essentially seeking the annulment thereof.  True,
petitioner had filed its Complaint in the Manila RTC before private
respondent filed its own suit in the Lapulapu RTC. Records, however, show
that private respondent learned of the Manila case only when petitioner
filed its Motion for Intervention in the Lapulapu RTC.  When GMC filed its
own Motion to Intervene in the Manila RTC, it was promptly rebuffed by
the judge therein.  On the other hand, petitioner was able to present its side
and to participate fully in the proceedings before the Lapulapu RTC.

On July 27, 1994, almost two years after the dismissal of its appeal by the
Lapulapu RTC, petitioner filed in the CA a suit for the annulment of that
RTC judgment.  On December 29, 1994, this suit was rejected by the CA in a
Decision which became final and executory on January 28, 1995, after no
appeal was taken by petitioner. However, this action did not stop
petitioner.  On February 2, 1995, it filed with this Court another Petition
deceptively cloaked as certiorari, but which in reality sought the annulment
of the Lapulapu Decision. This Court dismissed the Petition on September
6, 1996.  Petitioner's Motion for Reconsideration was denied with finality
on November 18, 1996.

On November 28, 1996, Judge Risos of the Lapulapu RTC directed the
execution of the judgment in the case filed before it.  The Motion to Stay
Execution filed by petitioner was denied on February 19, 1997.  Undaunted,
it filed in this Court another Petition for Certiorari, Prohibition and
Mandamus.  On September 21, 1998, we referred the Petition to the CA for
appropriate action. This new Petition again essentially sought to annul the
final and executory Decision rendered by the Lapulapu RTC. Needless to
say, the new suit was unsuccessful.  Still, this rejection did not stop
petitioner.  It brought before this Court the present Petition for Review
on Certiorari alleging the same facts and circumstances and raising the
same issues already decided by this Court in G.R. No. 118633.

First Philippine International Bank v. CA stresses that what is truly

important to consider in determining whether forum shopping exists is the
vexation caused the courts and the parties-litigants by one who asks
different courts and/or administrative agencies to rule on the same or
related facts and causes and/or to grant the same or substantially the same
relief, in the process creating the possibility of conflicting rulings and
decisions.

Petitioner in the present case sued twice before the CA and thrice before
this Court, alleging substantially the same facts and circumstances, raising
essentially the same issues, and praying for almost identical reliefs for the
annulment of the Decision rendered by the Lapulapu RTC.  This insidious
practice of repeatedly bringing essentially the same action -- albeit
disguised in various nomenclatures -- before different courts at different
times is forum shopping no less.  Because of petitioner's actions, the
execution of the Lapulapu Decision has been needlessly delayed and several
courts vexed. [116]

There is forum shopping when two or more actions or proceedings, other

than appeal or certiorari, involving the same parties for the same cause of
action, are instituted either simultaneously or successively to obtain a more
favorable decision. [117]  This Court, in Spouses De la Cruz v.
Joaquin, [118] explained why forum shopping is disapproved of:

Forum shopping trifles with the courts, abuses their processes, degrades
the administration of justice, and congests court dockets.  Willful and
deliberate violation of the rule against it is a ground for the summary
dismissal of the case; it may also constitute direct contempt of court. [119]

It is undeniable that both LLDHC and GSIS are guilty of forum shopping,
for having gone through several actions and proceedings from the lowest
court to this Court in the hopes that they will obtain a decision favorable to
them.  In all those actions, only one issue was in contention: the ownership
of the subject lots.  In the process, the parties degraded the administration
of justice, congested our court dockets, and abused our judicial system. 
Moreover, the simultaneous and successive actions filed below have
resulted in conflicting decisions rendered by not only the trial courts but
also by different divisions of the Court of Appeals.

The very purpose of the rule against forum shopping was to stamp out the
abominable practice of trifling with the administration of justice. [120]  It is
evident from the history of this case that not only were the parties and the
courts vexed, but more importantly, justice was delayed.  As this Court held
in the earlier case of LLDHC against GMC: "[The] insidious practice of
repeatedly bringing essentially the same action - albeit disguised in various
nomenclatures - before different courts at different times is forum
shopping no less." [121]

Conclusion

Nonetheless, like we said, substantial justice requires the resolution of this

controversy on its merits. It is the duty of this Court to put an end to this
long-delayed litigation and render a decision, which will bind all parties
with finality.

Although it is settled that the Lapu-Lapu RTC Decision was not in any way
nullified by the Manila RTC Decision, it is this Court's duty to resolve the
legal implications of having two conflicting, final, and executory decisions
in existence.  In Collantes v. Court of Appeals, [122] this Court, faced with the
similar issue of having two conflicting, final and executory decisions before
it, offered three options to solve the dilemma: "the first is for the parties to
assert their claims anew, the second is to determine which judgment came
first, and the third is to determine which of the judgments had been
rendered by a court of last resort." [123]

In Collantes, this Court applied the first option and resolved the conflicting
issues anew.  However, resorting to the first solution in the case at bar
would entail disregarding not only the final and executory decisions of the
Lapu-Lapu RTC and the Manila RTC, but also the final and executory
decisions of the Court of Appeals and this Court.  Moreover, it would negate
two decades' worth of litigating.  Thus, we find it more equitable and
practicable to apply the second and third options consequently maintaining
the finality of one of the conflicting judgments.  The primary criterion
under the second option is the time when the decision was rendered and
became final and executory, such that earlier decisions should prevail over
the current ones since final and executory decisions vest rights in the
winning party.  In the third solution, the main criterion is the
determination of which court or tribunal rendered the decision.  Decisions
of this Court should be accorded more respect than those made by the
lower courts. [124]

Applying these criteria to the case at bar, the February 24, 1992 Decision of
the Lapu-Lapu RTC in Civil Case No. 2203-L was not only promulgated
first; it also attained finality on January 28, 1995, before the Manila RTC's
May 10, 1994 Decision in Civil Case No. R-82-3429 became final on May
30, 1997.  It is especially noteworthy that months after the Lapu-Lapu RTC
issued its writ of execution on December 17, 1996, the Manila RTC issued
its own writ of execution on August 1, 1997.  To recall, the Manila RTC writ
was only satisfied first because the Court of Appeals in CA-G.R. SP No.
44052 deemed it appropriate to issue a temporary restraining order against
the execution of the Lapu-Lapu RTC Decision, pending the case before it. 
Hence, the fact that the Manila RTC Decision was implemented and
executed first does not negate the fact that the Lapu-Lapu RTC Decision
was not only rendered earlier, but had also attained finality earlier. 
Furthermore, while both judgments reached the Court of Appeals, only
Civil Case No. 2203-L was passed upon on the merits by this Court.  In G.R.
No. 141407, this Court resolved LLDHC's petition for review
on certiorari seeking to annul the Court of Appeals' Decision in CA-G.R. SP
No. 50650.  This Court, in dismissing the petition, upheld the validity of the
Lapu-Lapu RTC Decision and declared that the Manila RTC Decision
cannot bind GMC. That decision became final and executory way back on
March 10, 2003.

While this Court cannot blame the parties for exhausting all available
remedies to obtain a favorable judgment, the issues involved in this case
should have been resolved upon the finality of this Court's decision in G.R.
No. 141407. As pronounced by this Court in Villanueva v. Court of
Appeals [125]:

The interest of the judicial system in preventing relitigation of the same

dispute recognizes that judicial resources are finite and the number of cases
that can be heard by the court is limited.  Every dispute that is reheard
means that another will be delayed.  In modern times when court dockets
are filled to overflowing, this concern is of critical importance. x x x. [126]

In summary, this Court finds the execution of the Lapu-Lapu RTC Decision
in Civil Case No. 2203-L to be in order.  We affirm the assailed Orders of
March 11, 2004 and May 7, 2004, which reiterate, among others, the
October 23, 1997 Order issued by the Lapu-Lapu RTC, directing the
Register of Deeds of Lapu-Lapu City to cancel the certificates of title of
LLDHC and to issue new ones in GMC's name.  Whatever rights are due
LLDHC from GSIS as a result of the final judgment of the Manila RTC in
Civil Case No. R-82-3429, which we have previously held to be binding
between GSIS and LLDHC, may be threshed out in an appropriate
proceeding.  Such proceeding shall not further delay the execution of the
Lapu-Lapu RTC Decision.

WHEREFORE, in view of the foregoing, the petition in G.R. No.

167000 is DENIED and the Decision dated November 25,
2004 and Resolution dated January 20, 2005 of the Twentieth
Division of the Court of Appeals are AFFIRMED.  The petition in G.R.
No. 169971 is GRANTED and the Decision dated September 23,
2005 of the Special Nineteenth Division of the Court of Appeals is
hereby REVERSED AND SET ASIDE.

SO ORDERED.

Corona, C.J.,  (Chairperson), Velasco, Jr., Del Castillo, and Perez, JJ.,

concur.

[1]
 Rollo (G.R. No. 167000), pp. 36-60; penned by Associate Justice Isaias P.
Dicdican with Associate Justices Sesinado E. Villon and Ramon M. Bato,
Jr., concurring.
[2]
 Id. at 61-62.
[3]
 Id. at 691-693.
[4]
 Id. at 695-696.
[5]
 Rollo (G.R. No. 169971), pp. 583-601; penned by Associate Justice
Vicente L. Yap with Associate Justices Arsenio J. Magpale and Enrico A.
Lanzanas, concurring.
[6]
 Rollo (G.R. No. 167000), p. 361; formerly known as B.C. Sunga Realty,
Inc.
[7]
 Id. at 701; originally docketed as Civil Case No. 131332, it was re-
docketed as Civil Case No. R-82-3429 and assigned to Branch 38 of the
RTC of Manila.
[8]
 Id. at 63-79.
[9]
 Id. at 79.
[10]
 Id.
[11]
 Id. at 68-69.
[12]
 Id. at 72.
[13]
 Id. at 73.
[14]
 Id. at 73-74.
[15]
 Id. at 78.
[16]
 Id. at 352-353.
[17]
 Id. at 80-88.
[18]
 Id. at 87-88.
[19]
 Id. at 370-380.
[20]
 Id. at 381-392.
[21]
 Id. at 391.
[22]
 Id. at 393.
[23]
 Id. at 394-403.
[24]
 Id. at 452-462.
[25]
 Id. at 456-458.
[26]
 Id. at 458.
[27]
 Id. at 458-459.
[28]
 Id. at 460-461.
[29]
 Id. at 463.
[30]
 Id. at 464-465.
[31]
 Id. at 467.
[32]
 Id. at 468-469.
[33]
 Id. at 472.
[34]
 CA rollo, pp. 41-50.
[35]
 Id. at 51.
[36]
 Id.
[37]
 Rollo (G.R. No. 167000), p. 622.
[38]
 Id. at 474-475.
[39]
 Id.
[40]
 Id. at 477-478.
[41]
 Id. at 486.
[42]
 Id. at 479-480.
[43]
 Id. at 484-486.
[44]
 Id. at 486.
[45]
 Id. at 513.
[46]
 Id.
[47]
 Id. at 504-508.
[48]
 Id. at 507.
[49]
 Id. at 490-498.
[50]
 Id. at 503.
[51]
 The previous judge retired on December 23, 1997.
[52]
 Rollo (G.R. No. 167000), pp. 522-527.
[53]
 Id. at 529.
[54]
 CA rollo, p. 393.
[55]
 Rollo (G.R. No. 167000), pp. 89-112; penned by Associate Justice
Artemio G. Tuquero with Associate Justices Eubulo Verzola and Mariano
H. Umali, concurring.
[56]
 Id. at 111-112.
[57]
 Id. at 606.
[58]
 Id. at 682-685; penned by Associate Justice Artemio V. Panganiban with
Associate Justices Reynato S. Puno (Chairman), Renato C. Corona and
Conchita Carpio-Morales, concurring.
[59]
 Id. at 686.
[60]
 Id. at 688.
[61]
 Lapulapu Development and Housing Corporation v. Group
Management Corporation, 437 Phil. 297 (2002).
[62]
 Rollo (G.R. No. 167000), pp. 113-115.
[63]
 Id. at 115.
[64]
 Id. at 695-696.
[65]
 Id. at 697-720.
[66]
 Id. at 723-739.
[67]
 Id. at 721-722.
[68]
 Id. at 116-117.
[69]
 Id. at 117.
[70]
 Id. at 118-119.
[71]
 Id. at 183-184.
[72]
 Rollo (G.R. No. 169971), p. 601.
[73]
 Rollo (G.R. No. 167000), pp. 3-35.
[74]
 Rollo (G.R. No. 169971), pp. 3-82.
[75]
 Rollo (G.R. No. 167000), p. 20.
[76]
 Id. at 787-792.
[77]
 Id. at 791.
[78]
 Id. at 242-316.
[79]
 Rollo (G.R. No. 169971), pp. 3-82.
[80]
 Id. at 50.
[81]
 Id. at 663-672.
[82]
 Dapar v. Biascan, 482 Phil. 385, 405 (2004).
[83]
 Manotok Realty, Inc.v. CLT Realty Development Corporation, G.R. No.
123346, November 29, 2005, 476 SCRA 305, 337.
[84]
  Heirs of Maura So v. Obliosca, G.R. No. 147082, January 28,
2008, 542 SCRA 406, 418.
[85]
 Rollo (G.R. No. 167000), pp. 18-20.
[86]
 Natalia Realty, Inc. v. Court of Appeals, 440 Phil. 1, 23 (2002).
[87]
 CA rollo, pp. 168-169.
[88]
 Id. at 176.
[89]
 Rollo (G.R. No. 167000), pp. 381-392.
[90]
 Id. at 393.
[91]
 Id.
[92]
 Manotok Realty, Inc.v. CLT Realty Development Corporation, supra
note 83.
[93]
 Insular Bank of Asia and America Employees' Union (IBAAEU) v.
Inciong, 217 Phil. 629, 650 (1984).
[94]
 Silverio, Jr. v. Filipino Business Consultants, Inc., 504 Phil. 150, 162
(2005).
[95]
 Lapulapu Development and Housing Corporation v. Group
Management Corporation, supra note 61 at 312-315.
[96]
 Rollo (G.R. No. 169971), pp. 712, 882.
[97]
 G.R. No. 157557, March 10, 2006, 484 SCRA 416.
[98]
 Id. at 420.
[99]
 349 Phil. 99 (1998).
[100]
  Id. at 109.
[101]
  Republic of the Philippines (Civil Aeronautics Administration) v. Yu,
supra note 97 at 422.
[102]
  22 Phil. 303 (1912).
[103]
  Id. at 322.
[104]
  327 Phil. 1156 (1996).
[105]
  Id. at 1166.
[106]
 Republic of the Philippines (Civil Aeronautics Administration) v. Yu,
supra note 97 at 422-423.
[107]
  Camara v. Court of Appeals, 369 Phil. 858, 868 (1999).
[108]
  Rollo (G.R. No. 167000), p. 693.
[109]
  Id. at 474-475.
[110]
  Id. at 17.
[111]
  476 Phil. 623 (2004).
[112]
  Id. at 637-640.
[113]
  G.R. No. 175393, December 18, 2009, 608 SCRA 552, 584.
[114]
  Id.
[115]
  Lapulapu Development and Housing Corporation v. Group
Management Corporation, supra note 61.
[116]
  Id. at 315-317.
[117]
  Spouses De la Cruz, v. Joaquin, 502 Phil. 803, 813 (2005).
[118]
  Id.
[119]
  Id.
[120]
  Young v. John Keng Seng a.k.a. John Sy, 446 Phil. 823, 832 (2003).
[121]
  Lapulapu Development and Housing Corporation  v. Group
Management Corporation, supra note 61 at 317.
[122]
  G.R. No. 169604, March 6, 2007, 517 SCRA 561.
[123]
  Id. at 576.
[124]
 Heirs of Maura So v. Obliosca, supra note 84.
[125]
  349 Phil. 99 (1998).
[126]
  Id. at 113.