A.M. No.

MTJ-10-1770               July 18, 2012

(Formerly A.M. OCA IPI No. 10-2255-MTJ)

OFFICE OF ADMINISTRATIVE SERVICES-OFFICE OF THE COURT

ADMINISTRATOR, Complainant,
vs.
JUDGE IGNACIO B. MACARINE, Municipal Circuit Trial Court, Gen. Luna, Surigao del
Norte, Respondent.

DECISION

BRION, J.:

The Office of the Court Administrator (OCA) filed the present administrative case against Judge
Ignacio B. Macarine (respondent) for violation of OCA Circular No. 49-2003 dated May 20, 2003.
1 

OCA Circular No. 49-2003 requires that all foreign travels of judges and court personnel, regardless
of the number of days, must be with prior permission from the Court. A travel authority must be
secured from the OCA Judges must submit the following requirements:

(1.) application or letter-request addressed to the Court Administrator stating the purpose of
the travel abroad;

(2.) application for leave covering the period of the travel abroad, favorably recommended by
the Executive Judge; and

(3.) certification from the Statistics Division, Court Management Office, OCA as to the
condition of the docket.2

The complete requirements should be submitted to and received by the OCA at least two weeks
before the intended time of travel. No action shall be taken on requests for travel authority with
incomplete requirements. 3

Judges and personnel who shall leave the country without travel authority issued by the OCA shall
be subject to disciplinary action. 4

On August 13, 2009, the respondent wrote then Court Administrator, now Associate Justice Jose
Portugal Perez, requesting for authority to travel to Hongkong with his family for the period of
September 10 - 14, 2009 where he would celebrate his 65th birthday. The respondent stated that his
travel abroad shall be charged to his annual forced leave. However, he did not submit the
corresponding application for leave. For his failure to submit the complete requirements, his request
for authority to travel remained unacted upon. The respondent proceeded with his travel abroad
without the required travel authority from the OCA.

On January 28, 2010, the respondent was informed by the OCA that his leave of absence for the
5 

period of September 9-15, 2009 had been disapproved and his travel considered unauthorized by
the Court. His absences shall not be deducted from his leave credits but from his salary
corresponding to the seven (7) days that he was absent, pursuant to Section 50 of the Omnibus
Rules on Leave. The respondent was also required to submit his explanation on his failure to comply
6 

with OCA Circular No. 49-2003.

In his letter-explanation dated February 25, 2010, the respondent narrated that his daughter, a nurse
working in New Jersey, USA, gave him a trip to Hongkong as a gift for his 65th birthday. In the first
week of September 2009, he received a call from his daughter that she had already booked him,
together with his wife and two sons, in a hotel in Hongkong from September 13 to 15, 2009. They
flew in to Manila from Surigao City on September 9, 2009, intending to prepare the necessary
papers for his authority to travel at the Supreme Court the following day. However, sensing time
constraint and thinking of the futility of completing the requirements before their scheduled flight, he
opted not to immediately complete the requirements and simply went ahead with their travel abroad.
He thought of submitting his compliance upon his return to Manila. He acknowledged his mistake
and regretted his failure to comply with OCA Circular No. 49-2003. He promised not to commit the
same infraction again. He further requested for reconsideration of the OCA’s intended action to
deduct his salary corresponding to the seven (7) days that he was absent, instead of charging his
absences to his leave credits.

In an Evaluation Report dated September 6, 2010, the OCA found the respondent guilty of violation
of OCA Circular No. 49-2003 for traveling out of the country without filing the necessary application
for leave and without first securing a travel authority from the Court. The OCA recommended:

a) this matter be RE-DOCKETED as a regular administrative matter;

b) Judge Ignacio B. Macarine, MCTC, Gen. Luna, Surigao del Norte, be FINED in the
amount of P5,000.00 for Violation for Circular No. 49-2003 dated May 20, 2003; and c) the
Financial Management Office, Finance Division, OCA, be DIRECTED to DEDUCT the
amount equivalent to the seven (7) days salary of Judge Ignacio Macarine as a result of his
disapproved and unauthorized leave of absence pursuant to Section 50, Omnibus Rules on
Leave, without deducting his leave credits thereof. [emphases supplied]

True, the right to travel is guaranteed by the Constitution.  However, the exercise of such right is not
1âwphi1

absolute. Section 6, Article III of the 1987 Constitution allows restrictions on one’s right to travel
provided that such restriction is in the interest of national security, public safety or public health as
may be provided by law. This, however, should by no means be construed as limiting the Court’s
inherent power of administrative supervision over lower courts. OCA Circular No. 49-2003 does not
restrict but merely regulates, by providing guidelines to be complied by judges and court personnel,
before they can go on leave to travel abroad. To "restrict" is to restrain or prohibit a person from
doing something; to "regulate" is to govern or direct according to rule.

To ensure management of court dockets and to avoid disruption in the administration of justice, OCA
Circular No. 49-2003 requires a judge who wishes to travel abroad to submit, together with his
application for leave of absence duly recommended for approval by his Executive Judge, a
certification from the Statistics Division, Court Management Office of the OCA, as to the condition of
his docket, based on his Certificate of Service for the month immediately preceding the date of his
intended travel, that he has decided and resolved all cases or incidents within three (3) months from
date of submission, pursuant to Section 15(1) and (2), Article VIII of the 1987 Constitution. 7

For traveling abroad without having been officially allowed by the Court, the respondent is guilty of
violation of OCA Circular No. 49-2003. Under Section 9(4), Rule 140 of the Revised Rules of Court,
violation of Supreme Court directives and circular is considered a less serious charge and, therefore,
punishable by suspension from office without salary and other benefits for not less than one (1)
month nor more than three (3) months; or a fine of more than P10,000.00 but not exceeding
P20,000.00. 8
Section 53, Rule IV of the Revised Rules on Administrative Cases in the Civil Service grants the
disciplining authority the discretion to consider mitigating circumstances in the imposition of the
proper penalty. The Court had in several instances refrained from imposing the actual penalties in
the presence of mitigating facts, such as the employee’s length of service, acknowledgement of his
or her infractions and feelings of remorse for the same, advanced age, family circumstances, and
other humanitarian and equitable considerations.

In the present case, the respondent, after learning that his daughter had already booked him and his
family in a hotel in Hongkong, immediately went to Manila to secure his travel authority from the
Court. However, with the short period of time from their arrival in Manila on September 9, 2009 up to
the time of their booking in Hongkong from September 13 to 15, 2009, he was pressed for time and
opted not to complete the required travel authority, with the intention of securing one after his travel.
The respondent regretted his failure to comply with the requirements of OCA Circular No. 49-2003.
He acknowledged his mistake and promised not to commit the same infraction in the future.

We consider the outlined circumstances as mitigating. Following judicial precedents, the respondent
deserves some degree of leniency in imposing upon him the appropriate penalty.

WHEREFORE, respondent Judge Ignacio B. Macarine, Municipal Circuit Trial Court, Gen. Luna,
Surigao del Norte, is hereby given the ADMONITION that he acted irresponsibly when he opted not
to immediately secure a travel authority and is saved only from the full force that his violation carries
by the attendant mitigating circumstances. He is also WARNED that the commission of a similar
violation in the future will merit a more severe penalty. The recommendation of the Office of the
Court Administration that his absences, which were unauthorized, shall not be deducted from his
leave credits but from his salary is hereby APPROVED.

SO ORDERED.
G.R. Nos. 99289-90 January 27, 1993

MIRIAM DEFENSOR-SANTIAGO, petitioner,
vs.
CONRADO M. VASQUEZ, Ombudsman; GUALBERTO J. DE LA LLANA, Special Prosecutor;
SANDIGANBAYAN and REGIONAL TRIAL COURT OF MANILA, respondents.

Marciano P. Defensor for petitioner.

Nestor P. Ifurong for Maria S. Tatoy.

Danilo C. Cunanan for respondents.

RESOLUTION

REGALADO, J.:

Filed directly with the Court, ostensibly as an incident in the present special civil action, is petitioner's
so-called "Motion to Restrain the Sandiganbayan from Enforcing its Hold Departure Order with
Prayer for the Issuance of a Temporary Restraining Order and/or Preliminary Injunction, with Motion
to Set Pending Incident for Hearing." Despite the impropriety of the mode adopted in elevating the
issue to us, as will hereinafter be discussed, we will disregard the procedural gaffe in the interest of
an early resolution hereof.

The chronology of events preceding the instant motion is best summarized to readily provide a clear
understanding and perspective of our disposition of this matter, thus:

1. On May 13, 1991, an information dated May 9, 1991 and docketed as Criminal Case No. 16698
was filed against petitioner with the Sandiganbayan for alleged violation of Section 3(e), Republic
Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act.

2. On May 14, 1991, an order of arrest was issued in said case against herein petitioner by Presiding
Justice Francis E. Garchitorena of the Sandiganbayan, with bail for the release of the accused fixed
at P15,000.00.  1

3. On even date, petitioner filed an "Urgent Ex-parte Motion for Acceptance of Cash Bail Bond for
and in Behalf of Dr. Miriam Defensor-Santiago,"   which pertinently states in part:
2

xxx xxx xxx

3. As a result of the vehicular collision, she suffered extensive physical injuries which
required surgical intervention. As of this time, her injuries, specifically in the jaw or
gum area of the mouth, prevents her to speak (sic) because of extreme pain. Further,
she cannot for an extended period be on her feet because she is still in physical pain.
....

4. On the other hand, the accused Miriam Defensor Santiago seeks leave of this
Honorable Court that she be considered as having placed herself under the
 jurisdiction of this Honorable Court, for purposes of the required trial and other
proceedings and further seeks leave of this Honorable Court that the recommended
bail bond of P15,000.00 that she is posting in cash be accepted.

xxx xxx xxx

WHEREFORE, it is respectfully prayed of this Honorable Court that the bail bond she
is posting in the amount of P15,000.00 be duly accepted, and that by this motion, she
be considered as having placed herself under the custody of this Honorable Court
and dispensing of her personal appearance for now until such time she will (sic) have
recovered sufficiently from her recent near fatal accident.

Further, on the above basis, it is also respectfully prayed that the warrant for her
arrest be immediately recalled.

x x x           x x x          x x x

4. Also on the same day, the Sandiganbayan issued a resolution  authorizing petitioner to post a
3

cash bond for her provisional liberty without need for her physical appearance until June 5, 1991 at
the latest, unless by that time her condition does not yet permit her physical appearance before said
court. On May 15, 1991, petitioner filed a cash bond in the amount of P15,000.00, aside from the
other legal fees.
4

5. On May 21, 1991, respondent Ombudsman Conrado M. Vasquez filed with the Sandiganbayan a
manifestation "that accused Miriam Defensor-Santiago appeared in his office in the second floor of
the Old NAWASA Building located in Arroceros Street, Ermita, Manila at around 3:30 o'clock in the
afternoon of May 20, 1991. She was accompanied by a brother who represented himself to be Atty.
Arthur Defensor and a lady who is said to be a physician. She came and left unaided, after staying
for about fifteen minutes. 
5

6. Acting on said manifestation, the Sandiganbayan issued a resolution also on May 21, 1991,
setting the arraignment of the accused for May 27, 1991, and setting aside the court's resolution of
May 14, 1991 which ordered her appearance before the deputy clerk of the First Division of said
court on or before June 5, 1991. 6

7. In a motion dated May 22, 1991, petitioner asked that her cash bond be cancelled and that she be
allowed provisional liberty upon a recognizance. She contended that for her to continue remaining
under bail bond may imply to other people that she has intentions of fleeing, an intention she would
like to prove as baseless.7

8. Likewise on May 24, 1991, petitioner filed with this Court a petition for certiorari and prohibition
with preliminary injunction, and a subsequent addendum thereto, seeking to enjoin the
Sandiganbayan and the Regional Trial Court of Manila from proceeding with Criminal Cases Nos.
12298 (for violation of Section 3[e] of Republic Act No. 3019), 91-94555 (violation of Presidential
Decree No. 46), and 91-94897 (for libel), respectively. Consequently, a temporary restraining order
was issued by this Court on May 24, 1991, enjoining the Sandiganbayan and the Regional Trial
Court of Manila, Branch 3, from proceeding with the criminal cases pending before them. This Court,
in issuing said order, took into consideration the fact that according to petitioner, her arraignment,
originally set for June 5, 1991, was inexplicably advanced to May 27, 1991, hence the advisability of
conserving and affording her the opportunity to avail herself of any remedial right to meet said
contingency.
9. On May 27, 1991, the Sandiganbayan issued an order deferring: (a) the arraignment of petitioner
until further advice from the Supreme Court; and (b) the consideration of herein petitioner's motion to
cancel her cash bond until further initiative from her through counsel. 8

10. On January 18, 1992, this Court rendered a decision dismissing the petition for certiorari and
lifting and setting aside the temporary restraining order previously issued.   The motion for
9

reconsideration filed by petitioner was eventually denied with finality in this Court's resolution dated
September 10, 1992.

11. Meanwhile, in a resolution adopted on July 6, 1992, the Sandiganbayan issued a hold departure
order against petitioner which reads as follows:

Considering the information in media to the effect that accused Santiago intends to
leave the country soon for an extended stay abroad for study purposes, considering
the recent decision of the Supreme Court dismissing her petition promulgated on
January 13, 1992, although the same is still subject of a Motion for Reconsideration
from the accused, considering that the accused has not yet been arraigned, nor that
she has not (sic) even posted bail the same having been by reason of her earlier
claim of being seriously indisposed, all of which were overtaken by a restraining
order issued by the Supreme Court in G.R. No. 99289 and No. 99290 dated May 24,
1991, the accused is ordered not to leave the country and the Commission on
Immigration and Deportation is ordered not to allow the departure of the accused
unless authorized from (sic) this Court. 10

The hold departure order was issued by reason of the announcement made by petitioner, which was
widely publicized in both print and broadcast media, that she would be leaving for the United States
to accept a fellowship supposedly offered by the John F. Kennedy School of Government at Harvard
University. Petitioner likewise disclosed that she would be addressing Filipino communities in the
United States in line with her crusade against election fraud and other aspects of graft and
corruption.

In the instant motion submitted for our resolution, petitioner argues that:

1. The Sandiganbayan acted without or in excess of jurisdiction and with grave

abuse of discretion in issuing the hold departure order considering that it had not
acquired jurisdiction over the person of the petitioner.

2. The Sandiganbayan blatantly disregarded basic principles of judicial comity and

due deference owing to a superior tribunal when it issued the hold departure order
despite the pendency of petitioner's motion for reconsideration with this Honorable
Court.

3. The right to due process of law, the right to travel and the right to freedom of
speech are preferred, pre-eminent rights enshrined not only in the Constitution but
also in the Universal Declaration of Human Rights which can be validly impaired only
under stringent criteria which do not obtain in the instant case.

4. The hold departure order in the instant case was issued under disturbing
circumstances which suggest political harassment and persecution.
 5. On the basis of petitioner's creditable career in the bench and bar and her
characteristic transparency and candor, there is no reasonable ground to fear that
petitioner will surreptitiously flee the country to evade judicial processes.
11

I. Petitioner initially postulates that respondent court never acquired jurisdiction over her person
considering that she has neither been arrested nor has she voluntarily surrendered, aside from the
fact that she has not validly posted bail since she never personally appeared before said court. We
reject her thesis for being factually and legally untenable.

It has been held that where after the filing of the complaint or information a warrant for the arrest of
the accused is issued by the trial court and the accused either voluntarily submitted himself to the
court or was duly arrested, the court thereby acquires jurisdiction over the person of the
accused.  The voluntary appearance of the accused, whereby the court acquires jurisdiction over his
12

person, is accomplished either by his pleading to the merits (such as by filing a motion to quash or
other pleadings requiring the exercise of the court's jurisdiction thereover, appearing for arraignment,
entering trial) or by filing bail. On the matter of bail, since the same is intended to obtain the
provisional liberty of the accused, as a rule the same cannot be posted before custody of the
accused has been acquired by the judicial authorities either by his arrest or voluntary surrender. 13

In the case at bar, it becomes essential, therefore, to determine whether respondent court acquired
jurisdiction over the person of herein petitioner and, correlatively, whether there was a valid posting
of bail bond.

We find and so hold that petitioner is deemed to have voluntarily submitted herself to the jurisdiction
of respondent court upon the filing of her aforequoted "Urgent Ex-parte Motion for Acceptance of
Cash Bail Bond for and in behalf of Dr. Miriam Defensor-Santiago" wherein she expressly sought
leave "that she be considered as having placed herself under the jurisdiction of (the Sandiganbayan)
for purposes of the required trial and other proceedings," and categorically prayed "that the bail bond
she is posting in the amount of P15,000.00 be duly accepted" and that by said motion "she be
considered as having placed herself under the custody" of said court. Petitioner cannot now be
heard to claim otherwise for, by her own representations, she is effectively estopped from asserting
the contrary after she had earlier recognized the jurisdiction of the court and caused it to exercise
that jurisdiction over the aforestated pleadings she filed therein.

It cannot be denied that petitioner has posted a cash bail bond of P15,000.00 for her provisional
release as evidenced by Official Receipt No. 4292925 dated May 15, 1991 and which is even
attached as Annex C-2 to her own motion now under consideration. This is further buttressed by the
fact that petitioner thereafter also filed a motion for the cancellation of said cash bond and for the
court to allow her provisional liberty upon the security of a recognizance. With the filing of the
foregoing motions, petitioner should accordingly and necessarily admit her acquiescence to and
acknowledgment of the propriety of the cash bond she posted, instead of adopting a stance which
ignores the injunction for candor and sincerity in dealing with the courts of justice.

Petitioner would also like to make capital of the fact that she did not personally appear before
respondent court to file her cash bond, thereby rendering the same ineffectual. Suffice it to say that
in this case, it was petitioner herself, in her motion for the acceptance of the cash bond, who
requested respondent court to dispense with her personal appearance until she shall have
recovered sufficiently from her vehicular accident. It is distressing that petitioner should now turn
around and fault respondent court for taking a compassionate stand on the matter and
accommodating her own request for acceptance of the cash bond posted in her absence.
II. Petitioner argues that the Sandiganbayan disregarded the rule of judicial comity when it issued
the hold departure order despite the pendency of her motion for reconsideration of the decision of
this Court which dismissed her petition. She claims that if the principle of judicial comity applies to
prevent a court from interfering with the proceedings undertaken by a coordinate court, with more
reason should it operate to prevent an inferior court, such as the Sandiganbayan, from interfering
with the instant case where a motion for reconsideration was still pending before this Court. She
contends further that the hold departure order contravenes the temporary restraining order
previously issued by this court enjoining the Sandiganbayan from proceeding with the criminal case
pending before it.

It will be remembered that the Court rendered a decision in the present case on January 18, 1992
dismissing the petition for certiorari filed in this case and lifting and setting aside the temporary
restraining order it previously issued. It is petitioner's submission that the filing of her motion for
reconsideration stayed the lifting of the temporary restraining order, hence respondent court
continued to be enjoined from acting on and proceeding with the case during the pendency of the
motion for reconsideration. We likewise reject this contention which is bereft of merit.

Section 4, Rule 39 of the Rules of Court provides that, unless otherwise ordered by the court, a
judgment in an action for injunction shall not be stayed after its rendition and before an appeal is
taken or during the pendency of an appeal. And, the rule is that the execution of a judgment
decreeing the dissolution of a writ of preliminary injunction shall not be stayed before an appeal is
taken or during the pendency of an appeal,  and we see no reason why the foregoing considerations
14

should not apply to a temporary restraining order. The rationale therefor is that even in cases where
an appeal is taken from a judgment dismissing an action on the merits, the appeal does not suspend
the judgment, hence the general rule applies that a temporary injunction terminates automatically on
the dismissal of the action. 15

It has similarly been held that an order of dissolution of an injunction may be immediately effective,
even though it is not final.  A dismissal, discontinuance, or non-suit of an action in which a
16

restraining order or temporary injunction has been granted operates as a dissolution of the
restraining order or temporary injunction  and no formal order of dissolution is necessary to effect
17

such dissolution.  Consequently, a special order of the court is necessary for the reinstatement of an
18

injunction.  There must be a new exercise of .judicial power.

19 20

The reason advanced in support of the general rule has long since been duly explained, to wit:

. . . The court of this State, relying upon the last of the two clauses quoted, held that
an appeal from an order dissolving an injunction continued the injunction in force.
The evils which would result from such a holding are forcibly pointed out by Judge
Mitchell in a dissenting opinion. He said: "Although a plaintiff's papers are so
insufficient on their face or so false in their allegations that if he should apply on
notice for an injunction, any court would, on a hearing, promptly refuse to grant one,
yet, if he can find anywhere in the State a judge or court commissioner who will
improvidently grant one ex parte, which the court on the first and only hearing ever
had dissolves, he can, by appealing and filing a bond, make the ex parte injunction
impervious to all judicial interference until the appeal is determined in this court." . . .
Such a result is so unjust and so utterly inconsistent with all known rules of equity
practice that no court should adopt such a construction unless absolutely shut up to it
by the clear and unequivocal language of the statute. . . . . 21

This ruling has remained undisturbed over the decades and was reiterated in a case squarely in
point and of more recent vintage:
 The SEC's orders dated June 27, 1989 and July 21, 1989 (directing the secretary of
UDMC to call a stockholders' meeting, etc.) are not premature, despite the
petitioners then pending motion for reconsideration of the decision of the Court of
Appeals. The lifting by the Court of Appeals of its writ of preliminary injunction in
C.A.-G.R. SP No. 17435 cleared the way for the implementation by the SEC's en
banc resolution in SEC EB Case No. 191. The SEC need not wait for the Court of
Appeals to resolve the petitioner's motion for reconsideration for a judgment
decreeing the dissolution of a preliminary injunction is immediately executory. It shall
not be stayed after its rendition and before an appeal is taken or during the pendency
of an appeal. . . . .22

On the bases of the foregoing pronouncements, there is no question that with the dismissal of the
petition for certiorari and the lifting of the restraining order, nothing stood to hinder the
Sandiganbayan from acting on and proceeding with the criminal cases filed against herein petitioner.
At any rate, as we have earlier mentioned, the motion for reconsideration filed by petitioner was
denied with finality in our resolution dated September 10, 1992.

Petitioner further posits, however, that the filing of the instant special civil action
for certiorari divested the Sandiganbayan of its jurisdiction over the case therein. Whether generated
by misconception or design, we shall address this proposition which, in the first place, had no reason
for being and should not hereafter be advanced under like or similar procedural scenarios.

The original and special civil action filed with this Court is, for all intents and purposes, an invocation
for the exercise of its supervisory powers over the lower courts. It does not have the effect of
divesting the inferior courts of jurisdiction validly acquired over the case pending before them. It is
elementary that the mere pendency of a special civil action for certiorari, commenced in relation to a
case pending before a lower court, does not even interrupt the course of the latter when there is no
writ of injunction restraining it.  The inevitable conclusion is that for as long as no writ of injunction or
23

restraining order is issued in the special civil action for certiorari, no impediment exists and there is
nothing to prevent the lower court from exercising its jurisdiction and proceeding with the case
pending before it. And, even if such injunctive writ or order is issued, the lower court nevertheless
continues to retain its jurisdiction over the principal action.

III. It is further submitted by petitioner that the hold departure order violates her right to due process,
right to travel and freedom of speech.

First, it is averred that the hold departure order was issued without notice and hearing. Much is
made by petitioner of the fact that there was no showing that a motion to issue a hold departure
order was filed by the prosecution and, instead, the same was issued ex mero motu by the
Sandiganbayan. Petitioner is in error.

Courts possess certain inherent powers which may be said to be implied from a general grant of
jurisdiction, in addition to those expressly conferred on them.  These inherent powers are such
24

powers as are necessary for the ordinary and efficient exercise of jurisdiction;  or essential to the
25

existence, dignity and functions of the courts,  as well as to the due administration of justice;  or are
26 27

directly appropriate, convenient and suitable to the execution of their granted powers;  and include
28

the power to maintain the court's jurisdiction and render it effective in behalf of the litigants.29

Therefore, while a court may be expressly granted the incidental powers necessary to effectuate its
jurisdiction, a grant of jurisdiction, in the absence of prohibitive legislation, implies the necessary and
usual incidental powers essential to effectuate it, and, subject to existing laws and constitutional
provisions, every regularly constituted court has the power to do all things that are reasonably
necessary for the administration of justice within the scope of its jurisdiction. Hence, demands,
matters, or questions ancillary or incidental to, or growing out of, the main action, and coming within
the above principles, may be taken cognizance of by the court and determined, since such
jurisdiction is in aid of its authority over the principal matter, even though the court may thus be
called on to consider and decide matters which, as original causes of action, would not be within its
cognizance.

Furthermore, a court has the inherent power to make interlocutory orders necessary to protect its
jurisdiction.  Such being the case, with more reason may a party litigant be subjected to proper
30

coercive measures where he disobeys a proper order, or commits a fraud on the court or the
opposing party, the result of which is that the jurisdiction of the court would be ineffectual. What
ought to be done depends upon the particular circumstances.  31

Turning now to the case at bar, petitioner does not deny and, as a matter of fact, even made a public
statement that she had every intention of leaving the country allegedly to pursue higher studies
abroad. We uphold the course of action adopted by the Sandiganbayan in taking judicial notice of
such fact of petitioner's plan to go abroad and in thereafter issuing sua sponte the hold departure
order, in justified consonance with our preceding disquisition. To reiterate, the hold departure order
is but an exercise of respondent court's inherent power to preserve and to maintain the effectiveness
of its jurisdiction over the case and the person of the accused.

Second, petitioner asseverates that considering that she is leaving for abroad to pursue further
studies, there is no sufficient justification for the impairment of her constitutional right to travel; and
that under Section 6, Article III of the 1987 Constitution, the right to travel may be impaired only
when so required in the interest of national security, public safety or public health, as may be
provided by law.

It will be recalled that petitioner has posted bail which we have declared legally valid and complete
despite the absence of petitioner at the time of filing thereof, by reason of the peculiar circumstances
and grounds hereinbefore enunciated and which warrant a relaxation of the aforecited doctrine
in Feliciano. Perforce, since under the obligations assumed by petitioner in her bail bond she holds
herself amenable at all times to the orders and processes of the court, she may legally be prohibited
from leaving the country during the pendency of the case. This was the ruling we handed down
in Manotoc, Jr. vs. Court of Appeals, et al.,  to the effect that:
32

A court has the power to prohibit a person admitted to bail from leaving the
Philippines. This is a necessary consequence of the nature and function of a bail
bond.

Rule 114, Section 1 of the Rules of Court defines bail as the security required and
given for the release of a person who is in custody of the law, that he will appear
before any court in which his appearance may be required as stipulated in the bail
bond or recognizance.

Its object is to relieve the accused of imprisonment and the state of the burden of
keeping him, pending the trial, and at the same time, to put the accused as much
under the power of the court as if he were in custody of the proper officer, and to
secure the appearance of the accused so as to answer the call of the court and do
what the law may require of him.
 The condition imposed upon petitioner to make himself available at all times
whenever the court requires his presence operates as a valid restriction on his right
to travel. As we have held in People vs. Uy Tuising, 61 Phil. 404 (1935):

. . . the result of the obligation assumed by appellee (surety) to hold

the accused amenable at all times to the orders and processes of the
lower court, was to prohibit said accused from leaving the jurisdiction
of the Philippines, because, otherwise, said orders and processes will
be nugatory, and inasmuch as the jurisdiction of the courts from
which they issued does not extend beyond that of the Philippines
they would have no binding force outside of said jurisdiction.

Indeed, if the accused were allowed to leave the Philippines without sufficient
reason, he may be placed beyond the reach of the courts.

This was reiterated in a more recent case where we held:

Petitioner thus theorizes that under the 1987 Constitution, Courts can impair the right
to travel only on the grounds of "national security, public safety, or public health."

The submission is not well taken.

Article III, Section 6 of the 1987 Constitution should be interpreted to mean that while
the liberty of travel may be impaired even without Court Order, the appropriate
executive officers or administrative authorities are not armed with arbitrary discretion
to impose limitations. They can impose limits only on the basis of "national security,
public safety, or public health" and "as may be provided by law," a limitive phrase
which did not appear in the 1973 text (The Constitution, Bernas, Joaquin, G., S.J.,
Vol. I, First Edition, 197, p. 263). Apparently, the phraseology in the 1987
Constitution was a reaction to the ban on international travel imposed under the
previous regime when there was a Travel Processing Center, which issued
certificates of eligibility to travel upon application of an interested party (See Salonga
v. Hermoso & Travel Processing Center, No. 53622, 25 April 1980, 97 SCRA 121).

Article III, Section 6 of the 1987 Constitution should by no means be construed as

delimiting the inherent power of the Courts to use all means necessary to carry their
orders into effect in criminal cases pending before them. When by law jurisdiction is
conferred on a Court or judicial officer, all auxiliary writs, processes and other means
necessary to carry it into effect may be employed by such Court or officer (Rule 135,
Section 6, Rules of Court).

xxx xxx xxx

. . . Holding an accused in a criminal case within the reach of the Courts by

preventing his departure from the Philippines must be considered as a valid
restriction on his right to travel so that he may be dealt with in accordance with law.
The offended party in any criminal proceeding is the People of the Philippines. It is to
their best interest that criminal prosecutions should run their course and proceed to
finality without undue delay, with an accused holding himself amenable at all times to
Court Orders and processes. 33
One final observation. We discern in the proceedings in this case a propensity on the part of
petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses
before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from
this Court despite the fact that the same is available in the lower courts in the exercise of their
original or concurrent jurisdiction, or is even mandated bylaw to be sought therein. This practice
must be stopped, not only because of the imposition upon the precious time of this Court but also
because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case
which often has to be remanded or referred to the lower court as the proper forum under the rules of
procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We,
therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our primary
jurisdiction.

For the guidance of the bench and the bar, we elucidate that such policy includes the matter of
petitions or motions involving hold departure orders of the trial or lower courts. Parties with pending
cases therein should apply for permission to leave the country from the very same courts which, in
the first instance, are in the best position to pass upon such applications and to impose the
appropriate conditions therefor since they are conversant with the facts of the cases and the
ramifications or implications thereof. Where, as in the present case, a hold departure order has been
issued ex parte or motu propio by said court, the party concerned must first exhaust the appropriate
remedies therein, through a motion for reconsideration or other proper submissions, or by the filing
of the requisite application for travel abroad. Only where all the conditions and requirements for the
issuance of the extraordinary writs of certiorari, prohibition or mandamus indubitably obtain against a
disposition of the lower courts may our power of supervision over said tribunals be invoked through
the appropriate petition assailing on jurisdictional or clearly valid grounds their actuations therein.

WHEREFORE, with respect to and acting on the motion now before us for resolution, the same is
hereby DENIED for lack of merit.

SO ORDERED.
G.R. No. L-62100 May 30, 1986

RICARDO L. MANOTOC, JR., petitioner,

vs.
THE COURT OF APPEALS, HONS. SERAFIN E. CAMILON and RICARDO L. PRONOVE, JR., as
Judges of the Court of First Instance of Rizal, Pasig branches, THE PEOPLE OF THE
PHILIPPINES, the SECURITIES & EXCHANGE COMISSION, HON. EDMUNDO M. REYES, as
Commissioner of Immigration, and the Chief of the Aviation Security Command
(AVSECOM), respondents.

FERNAN, J.:

The issue posed for resolution in this petition for review may be stated thus: Does a person facing a
criminal indictment and provisionally released on bail have an unrestricted right to travel?

Petitioner Ricardo L. Manotoc, Jr., is one of the two principal stockholders of Trans-Insular
Management, Inc. and the Manotoc Securities, Inc., a stock brokerage house. Having transferred the
management of the latter into the hands of professional men, he holds no officer-position in said
business, but acts as president of the former corporation.

Following the "run" on stock brokerages caused by stock broker Santamaria's flight from this
jurisdiction, petitioner, who was then in the United States, came home, and together with his co-
stockholders, filed a petition with the Securities and Exchange Commission for the appointment of a
management committee, not only for Manotoc Securities, Inc., but likewise for Trans-Insular
Management, Inc. The petition relative to the Manotoc Securities, Inc., docketed as SEC Case No.
001826, entitled, "In the Matter of the Appointment of a Management Committee for Manotoc
Securities, Inc., Teodoro Kalaw, Jr., Ricardo Manotoc, Jr., Petitioners", was granted and a
management committee was organized and appointed.

Pending disposition of SEC Case No. 001826, the Securities and Exchange Commission requested
the then Commissioner of Immigration, Edmundo Reyes, not to clear petitioner for departure and a
memorandum to this effect was issued by the Commissioner on February 4, 1980 to the Chief of the
Immigration Regulation Division.

When a Torrens title submitted to and accepted by Manotoc Securities, Inc. was suspected to be a
fake, six of its clients filed six separate criminal complaints against petitioner and one Raul Leveriza,
Jr., as president and vice-president, respectively, of Manotoc Securities, Inc. In due course,
corresponding criminal charges for estafa were filed by the investigating fiscal before the then Court
of First Instance of Rizal, docketed as Criminal Cases Nos. 45399 and 45400, assigned to
respondent Judge Camilon, and Criminal Cases Nos. 45542 to 45545, raffled off to Judge Pronove.
In all cases, petitioner has been admitted to bail in the total amount of P105,000.00, with FGU
Instance Corporation as surety.

On March 1, 1982, petitioner filed before each of the trial courts a motion entitled, "motion for
permission to leave the country," stating as ground therefor his desire to go to the United States,
"relative to his business transactions and opportunities."  The prosecution opposed said motion and
1
after due hearing, both trial judges denied the same. The order of Judge Camilon dated March 9,
1982, reads:

Accused Ricardo Manotoc Jr. desires to leave for the United States on the all
embracing ground that his trip is ... relative to his business transactions and
opportunities.

The Court sees no urgency from this statement. No matter of any magnitude is
discerned to warrant judicial imprimatur on the proposed trip.

In view thereof, permission to leave the country is denied Ricardo Manotoc, Jr. now
or in the future until these two (2) cases are terminated . 2

On the other hand, the order of Judge Pronove dated March 26, 1982, reads in part:

6.-Finally, there is also merit in the prosecution's contention that if the Court would
allow the accused to leave the Philippines the surety companies that filed the bail
bonds in his behalf might claim that they could no longer be held liable in their
undertakings because it was the Court which allowed the accused to go outside the
territorial jurisdiction of the Philippine Court, should the accused fail or decide not to
return.

WHEREFORE, the motion of the accused is DENIED.  3

It appears that petitioner likewise wrote the Immigration Commissioner a letter requesting the recall
or withdrawal of the latter's memorandum dated February 4, 1980, but said request was also denied
in a letter dated May 27, 1982.

Petitioner thus filed a petition for certiorari and mandamus before the then Court of
Appeals   seeking to annul the orders dated March 9 and 26, 1982, of Judges Camilon and Pronove,
4

respectively, as well as the communication-request of the Securities and Exchange Commission,

denying his leave to travel abroad. He likewise prayed for the issuance of the appropriate writ
commanding the Immigration Commissioner and the Chief of the Aviation Security Command
(AVSECOM) to clear him for departure.

On October 5, 1982, the appellate court rendered a decision   dismissing the petition for lack of
5

merit.

Dissatisfied with the appellate court's ruling, petitioner filed the instant petition for review on
certiorari. Pending resolution of the petition to which we gave due course on April 14,
1983   petitioner filed on August 15, 1984 a motion for leave to go abroad pendente lite.  In his
6 7

motion, petitioner stated that his presence in Louisiana, U.S.A. is needed in connection "with the
obtention of foreign investment in Manotoc Securities, Inc."  He attached the letter dated August 9,
8

1984 of the chief executive officer of the Exploration Company of Louisiana, Inc., Mr. Marsden W.
Miller  requesting his presence in the United States to "meet the people and companies who would
9

be involved in its investments." Petitioner, likewise manifested that on August 1, 1984, Criminal
Cases Nos. 4933 to 4936 of the Regional Trial Court of Makati (formerly Nos. 45542-45545) had
been dismissed as to him "on motion of the prosecution on the ground that after verification of the
records of the Securities and Exchange Commission ... (he) was not in any way connected with the
Manotoc Securities, Inc. as of the date of the commission of the offenses imputed to him."   Criminal
10

Cases Nos. 45399 and 45400 of the Regional Trial Court of Makati, however, remained pending as
Judge Camilon, when notified of the dismissal of the other cases against petitioner, instead of
dismissing the cases before him, ordered merely the informations amended so as to delete the
allegation that petitioner was president and to substitute that he was "controlling/majority
stockholder,''   of Manotoc Securities, Inc. On September 20, 1984, the Court in a resolution en
11

banc denied petitioner's motion for leave to go abroad pendente lite.  12

Petitioner contends that having been admitted to bail as a matter of right, neither the courts which
granted him bail nor the Securities and Exchange Commission which has no jurisdiction over his
liberty, could prevent him from exercising his constitutional right to travel.

Petitioner's contention is untenable.

A court has the power to prohibit a person admitted to bail from leaving the Philippines. This is a
necessary consequence of the nature and function of a bail bond.

Rule 114, Section 1 of the Rules of Court defines bail as the security required and given for the
release of a person who is in the custody of the law, that he will appear before any court in which his
appearance may be required as stipulated in the bail bond or recognizance.

Its object is to relieve the accused of imprisonment and the state of the burden of
keeping him, pending the trial, and at the same time, to put the accused as much
under the power of the court as if he were in custody of the proper officer, and to
secure the appearance of the accused so as to answer the call of the court and do
what the law may require of him. 13

The condition imposed upon petitioner to make himself available at all times whenever the court
requires his presence operates as a valid restriction on his right to travel. As we have held in People
vs. Uy Tuising, 61 Phil. 404 (1935).

... the result of the obligation assumed by appellee (surety) to hold the accused
amenable at all times to the orders and processes of the lower court, was to prohibit
said accused from leaving the jurisdiction of the Philippines, because, otherwise, said
orders and processes will be nugatory, and inasmuch as the jurisdiction of the courts
from which they issued does not extend beyond that of the Philippines they would
have no binding force outside of said jurisdiction.

Indeed, if the accused were allowed to leave the Philippines without sufficient reason, he may be
placed beyond the reach of the courts.

The effect of a recognizance or bail bond, when fully executed or filed of record, and
the prisoner released thereunder, is to transfer the custody of the accused from the
public officials who have him in their charge to keepers of his own selection. Such
custody has been regarded merely as a continuation of the original imprisonment.
The sureties become invested with full authority over the person of the principal and
have the right to prevent the principal from leaving the state.
14

If the sureties have the right to prevent the principal from leaving the state, more so then has the
court from which the sureties merely derive such right, and whose jurisdiction over the person of the
principal remains unaffected despite the grant of bail to the latter. In fact, this inherent right of the
court is recognized by petitioner himself, notwithstanding his allegation that he is at total liberty to
leave the country, for he would not have filed the motion for permission to leave the country in the
first place, if it were otherwise.

To support his contention, petitioner places reliance upon the then Court of Appeals' ruling in People
vs. Shepherd (C.A.-G.R. No. 23505-R, February 13, 1980) particularly citing the following passage:

... The law obliges the bondsmen to produce the person of the appellants at the
pleasure of the Court. ... The law does not limit such undertaking of the bondsmen as
demandable only when the appellants are in the territorial confines of the Philippines
and not demandable if the appellants are out of the country. Liberty, the most
important consequence of bail, albeit provisional, is indivisible. If granted at all, liberty
operates as fully within as without the boundaries of the granting state. This principle
perhaps accounts for the absence of any law or jurisprudence expressly declaring
that liberty under bail does not transcend the territorial boundaries of the country.

The faith reposed by petitioner on the above-quoted opinion of the appellate court is misplaced. The
rather broad and generalized statement suffers from a serious fallacy; for while there is, indeed,
neither law nor jurisprudence expressly declaring that liberty under bail does not transcend the
territorial boundaries of the country, it is not for the reason suggested by the appellate court.

Also, petitioner's case is not on all fours with the Shepherd case. In the latter case, the accused was
able to show the urgent necessity for her travel abroad, the duration thereof and the conforme of her
sureties to the proposed travel thereby satisfying the court that she would comply with the conditions
of her bail bond. in contrast, petitioner in this case has not satisfactorily shown any of the above. As
aptly observed by the Solicitor General in his comment:

A perusal of petitioner's 'Motion for Permission to Leave the Country' will show that it
is solely predicated on petitioner's wish to travel to the United States where he will,
allegedly attend to some business transactions and search for business
opportunities. From the tenor and import of petitioner's motion, no urgent or
compelling reason can be discerned to justify the grant of judicial imprimatur thereto.
Petitioner has not sufficiently shown that there is absolute necessity for him to travel
abroad. Petitioner's motion bears no indication that the alleged business transactions
could not be undertaken by any other person in his behalf. Neither is there any hint
that petitioner's absence from the United States would absolutely preclude him from
taking advantage of business opportunities therein, nor is there any showing that
petitioner's non-presence in the United States would cause him irreparable damage
or prejudice. 15

Petitioner has not specified the duration of the proposed travel or shown that his surety has agreed
to it. Petitioner merely alleges that his surety has agreed to his plans as he had posted cash
indemnities. The court cannot allow the accused to leave the country without the assent of the surety
because in accepting a bail bond or recognizance, the government impliedly agrees "that it will not
take any proceedings with the principal that will increase the risks of the sureties or affect their
remedies against him. Under this rule, the surety on a bail bond or recognizance may be discharged
by a stipulation inconsistent with the conditions thereof, which is made without his assent. This result
has been reached as to a stipulation or agreement to postpone the trial until after the final disposition
of other cases, or to permit the principal to leave the state or country."   Thus, although the order of
16

March 26, 1982 issued by Judge Pronove has been rendered moot and academic by the dismissal
as to petitioner of the criminal cases pending before said judge, We see the rationale behind said
order.
As petitioner has failed to satisfy the trial courts and the appellate court of the urgency of his travel,
the duration thereof, as well as the consent of his surety to the proposed travel, We find no abuse of
judicial discretion in their having denied petitioner's motion for permission to leave the country, in
much the same way, albeit with contrary results, that We found no reversible error to have been
committed by the appellate court in allowing Shepherd to leave the country after it had satisfied itself
that she would comply with the conditions of her bail bond.

To our mind, the order of the trial court releasing petitioner on bail constitutes such lawful order as
contemplated by the above-quoted constitutional provision.

Finding the decision of the appellate court to be in accordance with law and jurisprudence, the Court
finds that no gainful purpose will be served in discussing the other issues raised by petitioner.

WHEREFORE, the petition for review is hereby dismissed, with costs against petitioner.

SO ORDERED.
G.R. No. 94284             April 8, 1991

RICARDO C. SILVERIO, petitioner,
vs.
THE COURT OF APPEALS, HON. BENIGNO G. GAVIOLA, as Judge of the Regional Trial Court
of Cebu City, Branch IX, and PEOPLE OF THE PHILIPPINES, respondents.

Quisumbing, Torres & Evangelista for petitioner.

MELENCIO-HERRERA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court praying that the
Decision of respondent Court of Appeals in CA-G.R. SP No. 15827, entitled "Ricardo C. Silverio vs.
Hon. Benigno C. Gaviola, etc., et al.," dated 31 January 1990, as well as the Resolution of 29 June
1990 denying reconsideration, be set aside.

On 14 October 1985, Petitioner was charged with violation of Section 20 (4) of the Revised
Securities Act in Criminal Case No. CBU-6304 of the Regional Trial Court of Cebu. In due time, he
posted bail for his provisional liberty.

On 26 January 1988, or more than two (2) years after the filing of the Information, respondent
People of the Philippines filed an Urgent ex parte Motion to cancel the passport of and to issue a
hold-departure Order against accused-petitioner on the ground that he had gone abroad several
times without the necessary Court approval resulting in postponements of the arraignment and
scheduled hearings.

Overruling opposition, the Regional Trial Court, on 4 April 1988, issued an Order directing the
Department of Foreign Affairs to cancel Petitioner's passport or to deny his application therefor, and
the Commission on Immigration to prevent Petitioner from leaving the country. This order was based
primarily on the Trial Court's finding that since the filing of the Information on 14 October 1985, "the
accused has not yet been arraigned because he has never appeared in Court on the dates
scheduled for his arraignment and there is evidence to show that accused Ricardo C. Silverio, Sr.
has left the country and has gone abroad without the knowledge and permission of this Court"
(Rollo, p. 45). Petitioner's Motion for Reconsideration was denied on 28 July 1988.

Petitioner's Certiorari Petition before the Court of Appeals met a similar fate on 31 January 1990.
Hence, this Petition for Review filed on 30 July 1990.

After the respective pleadings required by the Court were filed, we resolved to give due course and
to decide the case.

Petitioner contends that respondent Court of Appeals erred in not finding that the Trial Court
committed grave abuse of discretion amounting to lack of jurisdiction in issuing its Orders, dated 4
April and 28 July 1988, (1) on the basis of facts allegedly patently erroneous, claiming that the
scheduled arraignments could not be held because there was a pending Motion to Quash the
Information; and (2) finding that the right to travel can be impaired upon lawful order of the Court,
even on grounds other than the "interest of national security, public safety or public health."
We perceive no reversible error.

1) Although the date of the filing of the Motion to Quash has been omitted by Petitioner, it is
apparent that it was filed long after the filing of the Information in 1985 and only after several
arraignments had already been scheduled and cancelled due to Petitioner's non-appearance. In fact,
said Motion to Quash was set for hearing only on 19 February 1988. Convincingly shown by the Trial
Court and conformed to by respondent Appellate Court is the concurrence of the following
circumstances:

1. The records will show that the information was filed on October 14, 1985. Until this date
(28 July 1988), the case had yet to be arraigned. Several scheduled arraignments were
cancelled and reset, mostly due to the failure of accused Silverio to appear. The reason for
accused Silverio's failure to appear had invariably been because he is abroad in the United
States of America;

2. Since the information was filed, until this date, accused Silverio had never appeared in
person before the Court;

3. The bond posted by accused Silverio had been cancelled twice and warrants of arrest had
been issued against him all for the same reason –– failure to appear at scheduled
arraignments.

In all candidness, the Court makes the observation that it has given accused Silverio more
than enough consideration. The limit had long been reached (Order, 28 July 1988, Crim.
Case No. CBU-6304, RTC, Cebu, p. 5; Rollo, p. 73).

Patently, therefore, the questioned RTC Orders, dated 4 April 1988 and 28 July 1988, were not
based on erroneous facts, as Petitioner would want this Court to believe. To all appearances, the
pendency of a Motion to Quash came about only after several settings for arraignment had been
scheduled and cancelled by reason of Petitioner's non-appearance.

2) Petitioner's further submission is that respondent Appellate Court "glaringly erred" in finding that
the right to travel can be impaired upon lawful order of the Court, even on grounds other than the
"interest of national security, public safety or public health."

To start with, and this has not been controverted by Petitioner, the bail bond he had posted had
been cancelled and Warrants of Arrest had been issued against him by reason, in both instances, of
his failure to appear at scheduled arraignments. Warrants of Arrest having been issued against him
for violation of the conditions of his bail bond, he should be taken into custody. "Bail is the security
given for the release of a person in custody of the law, furnished by him or a bondsman, conditioned
upon his appearance before any court when so required by the Court or the Rules (1985 Rules on
Criminal Procedure, as amended, Rule 114, Secs. 1 and 2).

The foregoing condition imposed upon an accused to make himself available at all times whenever
the Court requires his presence operates as a valid restriction of his right to travel (Manotoc, Jr. vs.
Court of Appeals, et al. No. 62100, 30 May 1986, 142 SCRA 149). A person facing criminal charges
may be restrained by the Court from leaving the country or, if abroad, compelled to return
(Constitutional Law, Cruz, Isagani A., 1987 Edition, p. 138). So it is also that "An accused released
on bail may be re-arrested without the necessity of a warrant if he attempts to depart from the
Philippines without prior permission of the Court where the case is pending (ibid., Sec. 20 [2nd
par. ]).
Petitioner takes the posture, however, that while the 1987 Constitution recognizes the power of the
Courts to curtail the liberty of abode within the limits prescribed by law, it restricts the allowable
impairment of the right to travel only on grounds of interest of national security, public safety or
public health, as compared to the provisions on freedom of movement in the 1935 and 1973
Constitutions.

Under the 1935 Constitution, the liberty of abode and of travel were treated under one
provision.  Article III, Section 1(4) thereof reads:
1âwphi1

The liberty of abode and of changing the same within the limits prescribed by law shall not
be impaired.

The 1973 Constitution altered the 1935 text by explicitly including the liberty of travel, thus:

The liberty of abode and of travel shall not be impaired except upon lawful order of the court
or when necessary in the interest of national security, public safety, or public health (Article
IV, Section 5).

The 1987 Constitution has split the two freedoms into two distinct sentences and treats them
differently, to wit:

Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law
shall not be impaired except upon lawful order of the court. Neither shall the right to travel be
impaired except in the interest of national security, public safety, or public health, as may be
provided by law.

Petitioner thus theorizes that under the 1987 Constitution, Courts can impair the right to travel only
on the grounds of "national security, public safety, or public health."

The submission is not well taken.

Article III, Section 6 of the 1987 Constitution should be interpreted to mean that while the liberty of
travel may be impaired even without Court Order, the appropriate executive officers or administrative
authorities are not armed with arbitrary discretion to impose limitations. They can impose limits only
on the basis of "national security, public safety, or public health" and "as may be provided by law," a
limitive phrase which did not appear in the 1973 text (The Constitution, Bernas, Joaquin G.,S.J., Vol.
I, First Edition, 1987, p. 263). Apparently, the phraseology in the 1987 Constitution was a reaction to
the ban on international travel imposed under the previous regime when there was a Travel
Processing Center, which issued certificates of eligibility to travel upon application of an interested
party (See Salonga vs. Hermoso & Travel Processing Center, No. 53622, 25 April 1980, 97 SCRA
121).

Article III, Section 6 of the 1987 Constitution should by no means be construed as delimiting the
inherent power of the Courts to use all means necessary to carry their orders into effect in criminal
cases pending before them. When by law jurisdiction is conferred on a Court or judicial officer, all
auxillary writs, process and other means necessary to carry it into effect may be employed by such
Court or officer (Rule 135, Section 6, Rules of Court).

Petitioner's argument that the ruling in Manotoc, Jr., v. Court of Appeals, et al. (supra), to the effect
that the condition imposed upon an accused admitted to bail to make himself available at all times
whenever the Court requires his presence operates as a valid restriction on the right to travel no
longer holds under the 1987 Constitution, is far from tenable. The nature and function of a bail bond
has remained unchanged whether under the 1935, the 1973, or the 1987 Constitution. Besides,
the Manotoc ruling on that point was but a re-affirmation of that laid down long before in People v.
Uy Tuising, 61 Phil. 404 (1935).

Petitioner is facing a criminal charge. He has posted bail but has violated the conditions thereof by
failing to appear before the Court when required. Warrants for his arrest have been issued. Those
orders and processes would be rendered nugatory if an accused were to be allowed to leave or to
remain, at his pleasure, outside the territorial confines of the country. Holding an accused in a
criminal case within the reach of the Courts by preventing his departure from the Philippines must be
considered as a valid restriction on his right to travel so that he may be dealt with in accordance with
law. The offended party in any criminal proceeding is the People of the Philippines. It is to their best
interest that criminal prosecutions should run their course and proceed to finality without undue
delay, with an accused holding himself amenable at all times to Court Orders and processes.

WHEREFORE, the judgment under review is hereby AFFIRMED. Costs against petitioner, Ricardo
C. Silverio.

SO ORDERED.
G.R. No. L-72119 May 29, 1987

VALENTIN L. LEGASPI, petitioner,
vs.
CIVIL SERVICE COMMISSION, respondent.

CORTES, J.:

The fundamental right of the people to information on matters of public concern is invoked in this
special civil action for mandamus instituted by petitioner Valentin L. Legaspi against the Civil Service
Commission. The respondent had earlier denied Legaspi's request for information on the civil service
eligibilities of certain persons employed as sanitarians in the Health Department of Cebu City. These
government employees, Julian Sibonghanoy and Mariano Agas, had allegedly represented
themselves as civil service eligibles who passed the civil service examinations for sanitarians.

Claiming that his right to be informed of the eligibilities of Julian Sibonghanoy and Mariano Agas, is
guaranteed by the Constitution, and that he has no other plain, speedy and adequate remedy to
acquire the information, petitioner prays for the issuance of the extraordinary writ of mandamus to
compel the respondent Commission to disclose said information.

This is not the first tune that the writ of mandamus is sought to enforce the fundamental right to
information. The same remedy was resorted to in the case of Tanada et. al. vs. Tuvera et. al., (G.R.
No. L-63915, April 24,1985,136 SCRA 27) wherein the people's right to be informed under the 1973
Constitution (Article IV, Section 6) was invoked in order to compel the publication in the Official
Gazette of various presidential decrees, letters of instructions and other presidential issuances. Prior
to the recognition of the right in said Constitution the statutory right to information provided for in the
Land Registration Act (Section 56, Act 496, as amended) was claimed by a newspaper editor in
another mandamus proceeding, this time to demand access to the records of the Register of Deeds
for the purpose of gathering data on real estate transactions involving aliens (Subido vs. Ozaeta, 80
Phil. 383 [1948]).

The constitutional right to information on matters of public concern first gained recognition in the Bill
of Rights, Article IV, of the 1973 Constitution, which states:

Sec. 6. 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, shall be afforded the citizen subject to such
limitations as may be provided by law.

The foregoing provision has been retained and the right therein provided amplified in Article III, Sec.
7 of the 1987 Constitution with the addition of the phrase, "as well as to government research data
used as basis for policy development." The new provision reads:

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
stations as may be provided by law.
These constitutional provisions are self-executing. They supply the rules by means of which the right
to information may be enjoyed (Cooley, A Treatise on the Constitutional Limitations 167 [1927]) by
guaranteeing the right and mandating the duty to afford access to sources of information. Hence, the
fundamental right therein recognized may be asserted by the people upon the ratification of the
constitution without need for any ancillary act of the Legislature. (Id. at, p. 165) What may be
provided for by the Legislature are reasonable conditions and limitations upon the access to be
afforded which must, of necessity, be consistent with the declared State policy of full public
disclosure of all transactions involving public interest (Constitution, Art. 11, Sec. 28). However, it
cannot be overemphasized that whatever limitation may be prescribed by the Legislature, the right
and the duty under Art. III Sec. 7 have become operative and enforceable by virtue of the adoption
of the New Charter. Therefore, the right may be properly invoked in a mandamus proceeding such
as this one.

The Solicitor General interposes procedural objections to Our giving due course to this Petition. He
challenges the petitioner's standing to sue upon the ground that the latter does not possess any
clear legal right to be informed of the civil service eligibilities of the government employees
concerned. He calls attention to the alleged failure of the petitioner to show his actual interest in
securing this particular information. He further argues that there is no ministerial duty on the part of
the Commission to furnish the petitioner with the information he seeks.

1. To be given due course, a Petition for mandamus must have been instituted by a party aggrieved
by the alleged inaction of any tribunal, corporation, board or person which unlawfully excludes said
party from the enjoyment of a legal right. (Ant;-Chinese League of the Philippines vs. Felix, 77 Phil.
1012 [1947]). The petitioner in every case must therefore be an "aggrieved party" in the sense that
he possesses a clear legal right to be enforced and a direct interest in the duty or act to be
performed.

In the case before Us, the respondent takes issue on the personality of the petitioner to bring this
suit. It is asserted that, the instant Petition is bereft of any allegation of Legaspi's actual interest in
the civil service eligibilities of Julian Sibonghanoy and Mariano Agas, At most there is a vague
reference to an unnamed client in whose behalf he had allegedly acted when he made inquiries on
the subject (Petition, Rollo, p. 3).

But what is clear upon the face of the Petition is that the petitioner has firmly anchored his case upon
the right of the people to information on matters of public concern, which, by its very nature, is a
public right. It has been held that:

* * * when the question is one of public right and the object of the mandamus is to
procure the enforcement of a public duty, the people are regarded as the real party in
interest and the relator at whose instigation the proceedings are instituted need not
show that he has any legal or special interest in the result, it being sufficient to show
that he is a citizen and as such interested in the execution of the laws * * * (Tanada
et. al. vs. Tuvera, et. al., G.R. No. L- 63915, April 24, 1985, 136 SCRA 27, 36).

From the foregoing, it becomes apparent that when a mandamus proceeding involves the assertion
of a public right, the requirement of personal interest is satisfied by the mere fact that the petitioner is
a citizen, and therefore, part of the general "public" which possesses the right.

The Court had opportunity to define the word "public" in the Subido case, supra, when it held that
even those who have no direct or tangible interest in any real estate transaction are part of the
"public" to whom "(a)ll records relating to registered lands in the Office of the Register of Deeds shall
be open * * *" (Sec. 56, Act No. 496, as amended). In the words of the Court:
 * * * "Public" is a comprehensive, all-inclusive term. Properly construed, it embraces
every person. To say that only those who have a present and existing interest of a
pecuniary character in the particular information sought are given the right of
inspection is to make an unwarranted distinction. *** (Subido vs. Ozaeta, supra at p.
387).

The petitioner, being a citizen who, as such is clothed with personality to seek redress for the
alleged obstruction of the exercise of the public right. We find no cogent reason to deny his standing
to bring the present suit.

2. For every right of the people recognized as fundamental, there lies a corresponding duty on the
part of those who govern, to respect and protect that right. That is the very essence of the Bill of
Rights in a constitutional regime. Only governments operating under fundamental rules defining the
limits of their power so as to shield individual rights against its arbitrary exercise can properly claim
to be constitutional (Cooley, supra, at p. 5). Without a government's acceptance of the limitations
imposed upon it by the Constitution in order to uphold individual liberties, without an
acknowledgment on its part of those duties exacted by the rights pertaining to the citizens, the Bill of
Rights becomes a sophistry, and liberty, the ultimate illusion.

In recognizing the people's right to be informed, both the 1973 Constitution and the New Charter
expressly mandate the duty of the State and its agents to afford access to official records,
documents, papers and in addition, government research data used as basis for policy development,
subject to such limitations as may be provided by law. The guarantee has been further enhanced in
the New Constitution with the adoption of a policy of full public disclosure, this time "subject to
reasonable conditions prescribed by law," in Article 11, Section 28 thereof, to wit:

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. (Art.
11, Sec. 28).

In the Tanada case, supra, the constitutional guarantee was bolstered by what this Court declared

as an imperative duty of the government officials concerned to publish all important legislative acts
and resolutions of a public nature as well as all executive orders and proclamations of general
applicability. We granted mandamus in said case, and in the process, We found occasion to
expound briefly on the nature of said duty:

* * * That duty must be enforced if the Constitutional right of the people to be

informed on matters of public concern is to be given substance and reality. The law
itself makes a list of what should be published in the Official Gazette. Such listing, to
our mind, leaves respondents with no discretion whatsoever as to what must be in
included or excluded from such publication. (Tanada v. Tuvera, supra, at 39).
(Emphasis supplied).

The absence of discretion on the part of government agencia es in allowing the examination of
public records, specifically, the records in the Office of the Register of Deeds, is emphasized
in Subido vs. Ozaeta, supra:

Except, perhaps when it is clear that the purpose of the examination is unlawful, or
sheer, idle curiosity, we do not believe it is the duty under the law of registration
officers to concern themselves with the motives, reasons, and objects of the person
seeking access to the records. It is not their prerogative to see that the information
which the records contain is not flaunted before public gaze, or that scandal is not
 made of it. If it be wrong to publish the contents of the records, it is the legislature
and not the officials having custody thereof which is called upon to devise a
remedy. *** (Subido v. Ozaeta, supra at 388). (Emphasis supplied).

It is clear from the foregoing pronouncements of this Court that government agencies are without
discretion in refusing disclosure of, or access to, information of public concern. This is not to lose
sight of the reasonable regulations which may be imposed by said agencies in custody of public
records on the manner in which the right to information may be exercised by the public. In
the Subido case, We recognized the authority of the Register of Deeds to regulate the manner in
which persons desiring to do so, may inspect, examine or copy records relating to registered lands.
However, the regulations which the Register of Deeds may promulgate are confined to:

* * * prescribing the manner and hours of examination to the end that damage to or
loss of, the records may be avoided, that undue interference with the duties of the
custodian of the books and documents and other employees may be prevented, that
the right of other persons entitled to make inspection may be insured * * * (Subido vs.
Ozaeta, 80 Phil. 383, 387)

Applying the Subido ruling by analogy, We recognized a similar authority in a municipal judge, to

regulate the manner of inspection by the public of criminal docket records in the case of Baldoza vs.
Dimaano (Adm. Matter No. 1120-MJ, May 5, 1976, 71 SCRA 14). Said administrative case was filed
against the respondent judge for his alleged refusal to allow examination of the criminal docket
records in his sala. Upon a finding by the Investigating Judge that the respondent had allowed the
complainant to open and view the subject records, We absolved the respondent. In effect, We have
also held that the rules and conditions imposed by him upon the manner of examining the public
records were reasonable.

In both the Subido and the Baldoza cases, We were emphatic in Our statement that the authority to
regulate the manner of examining public records does not carry with it the power to prohibit. A
distinction has to be made between the discretion to refuse outright the disclosure of or access to a
particular information and the authority to regulate the manner in which the access is to be afforded.
The first is a limitation upon the availability of access to the information sought, which only the
Legislature may impose (Art. III, Sec. 6, 1987 Constitution). The second pertains to the government
agency charged with the custody of public records. Its authority to regulate access is to be exercised
solely to the end that damage to, or loss of, public records may be avoided, undue interference with
the duties of said agencies may be prevented, and more importantly, that the exercise of the same
constitutional right by other persons shall be assured (Subido vs. Ozaetal supra).

Thus, while the manner of examining public records may be subject to reasonable regulation by the
government agency in custody thereof, the duty to disclose the information of public concern, and to
afford access to public records cannot be discretionary on the part of said agencies. Certainly, its
performance cannot be made contingent upon the discretion of such agencies. Otherwise, the
enjoyment of the constitutional right may be rendered nugatory by any whimsical exercise of agency
discretion. The constitutional duty, not being discretionary, its performance may be compelled by a
writ of mandamus in a proper case.

But what is a proper case for Mandamus to issue? In the case before Us, the public right to be
enforced and the concomitant duty of the State are unequivocably set forth in the Constitution. The
decisive question on the propriety of the issuance of the writ of mandamus in this case is, whether
the information sought by the petitioner is within the ambit of the constitutional guarantee.
3. The incorporation in the Constitution of a guarantee of access to information of public concern is a
recognition of the essentiality of the free flow of ideas and information in a democracy (Baldoza v.
Dimaano, Adm. Matter No. 1120-MJ, May 5, 1976, 17 SCRA 14). In the same way that free
discussion enables members of society to cope with the exigencies of their time (Thornhill vs.
Alabama, 310 U.S. 88,102 [1939]), access to information of general interest aids the people in
democratic decision-making (87 Harvard Law Review 1505 [1974]) by giving them a better
perspective of the vital issues confronting the nation.

But the constitutional guarantee to information on matters of public concern is not absolute. It does
not open every door to any and all information. Under the Constitution, access to official records,
papers, etc., are "subject to limitations as may be provided by law" (Art. III, Sec. 7, second
sentence). The law may therefore exempt certain types of information from public scrutiny, such as
those affecting national security (Journal No. 90, September 23, 1986, p. 10; and Journal No. 91,
September 24, 1986, p. 32, 1986 Constitutional Commission). It follows that, in every case, the
availability of access to a particular public record must be circumscribed by the nature of the
information sought, i.e., (a) being of public concern or one that involves public interest, and, (b) not
being exempted by law from the operation of the constitutional guarantee. The threshold question is,
therefore, whether or not the information sought is of public interest or public concern.

a. This question is first addressed to the government agency having custody of the desired
information. However, as already discussed, this does not give the agency concerned any discretion
to grant or deny access. In case of denial of access, the government agency has the burden of
showing that the information requested is not of public concern, or, if it is of public concern, that the
same has been exempted by law from the operation of the guarantee. To hold otherwise will serve to
dilute the constitutional right. As aptly observed, ". . . the government is in an advantageous position
to marshall and interpret arguments against release . . ." (87 Harvard Law Review 1511 [1974]). To
safeguard the constitutional right, every denial of access by the government agency concerned is
subject to review by the courts, and in the proper case, access may be compelled by a writ of
Mandamus.

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 in a case by case basis whether
the matter at issue is of interest or importance, as it relates to or affects the public.

The public concern invoked in the case of Tanada v. Tuvera, supra, was the need for adequate
notice to the public of the various laws which are to regulate the actions and conduct of citizens.
In Subido vs. Ozaeta, supra, the public concern deemed covered by the statutory right was the
knowledge of those real estate transactions which some believed to have been registered in
violation of the Constitution.

The information sought by the petitioner in this case is the truth of the claim of certain government
employees that they are civil service eligibles for the positions to which they were appointed. The
Constitution expressly declares as a State policy that:

Appointments in the civil service shall be made only according to merit and fitness to
be determined, as far as practicable, and except as to positions which are policy
determining, primarily confidential or highly technical, by competitive examination.
(Art. IX, B, Sec. 2.[2]).
Public office being a public trust, [Const. Art. XI, Sec. 1] it is the legitimate concern of citizens to
ensure that government positions requiring civil service eligibility are occupied only by persons who
are eligibles. Public officers are at all times accountable to the people even as to their eligibilities for
their respective positions.

b. But then, it is not enough that the information sought is of public interest. For mandamus to lie in a
given case, the information must not be among the species exempted by law from the operation of
the constitutional guarantee.

In the instant, case while refusing to confirm or deny the claims of eligibility, the respondent has
failed to cite any provision in the Civil Service Law which would limit the petitioner's right to know
who are, and who are not, civil service eligibles. We take judicial notice of the fact that the names of
those who pass the civil service examinations, as in bar examinations and licensure examinations
for various professions, are released to the public. Hence, there is nothing secret about one's civil
service eligibility, if actually possessed. Petitioner's request is, therefore, neither unusual nor
unreasonable. And when, as in this case, the government employees concerned claim to be civil
service eligibles, the public, through any citizen, has a right to verify their professed eligibilities from
the Civil Service Commission.

The civil service eligibility of a sanitarian being of public concern, and in the absence of express
limitations under the law upon access to the register of civil service eligibles for said position, the
duty of the respondent Commission to confirm or deny the civil service eligibility of any person
occupying the position becomes imperative. Mandamus, therefore lies.

WHEREFORE, the Civil Service Commission is ordered to open its register of eligibles for the
position of sanitarian, and to confirm or deny, the civil service eligibility of Julian Sibonghanoy and
Mariano Agas, for said position in the Health Department of Cebu City, as requested by the
petitioner Valentin L. Legaspi.
G.R. No. 74930 February 13, 1989

RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO, ROLANDO

BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO BAGATSING, JUN "NINOY"
ALBA, PERCY LAPID, ROMMEL CORRO and ROLANDO FADUL, petitioners,
vs.
FELICIANO BELMONTE, JR., respondent.

Ricardo C. Valmonte for and in his own behalf and his co-petitioners.

The Solicitor General for respondent.

CORTES, J.:

Petitioners in this special civil action for mandamus with preliminary injunction invoke their right to
information and pray that respondent be directed:

(a) to furnish petitioners the list of the names of the Batasang

Pambansa members belonging to the UNIDO and PDP-Laban who
were able to secure clean loans immediately before the February 7
election thru the intercession/marginal note of the then First Lady
Imelda Marcos; and/or

(b) to furnish petitioners with certified true copies of the documents

evidencing their respective loans; and/or

(c) to allow petitioners access to the public records for the subject
information. (Petition, pp. 4-5; paragraphing supplied.]

The controversy arose when petitioner Valmonte wrote respondent Belmonte the following letter:

June 4, 1986

Hon. Feliciano Belmonte

GSIS General Manager
Arroceros, Manila

Sir:

As a lawyer, member of the media and plain citizen of our Republic, I am requesting
that I be furnished with the list of names of the opposition members of (the) Batasang
Pambansa who were able to secure a clean loan of P2 million each on guarranty
(sic) of Mrs. Imelda Marcos. We understand that OIC Mel Lopez of Manila was one
of those aforesaid MPs. Likewise, may we be furnished with the certified true copies
of the documents evidencing their loan. Expenses in connection herewith shall be
borne by us.
 If we could not secure the above documents could we have access to them?

We are premising the above request on the following provision of the Freedom
Constitution of the present regime.

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, shall be
afforded the citizen subject to such limitation as may be provided by
law. (Art. IV, Sec. 6).

We trust that within five (5) days from receipt hereof we will receive your favorable
response on the matter.

Very truly yours,

(Sgd.)
RICAR
DO C.
VALMO
NTE

[Rollo, p. 7.]

To the aforesaid letter, the Deputy General Counsel of the GSIS replied:

June 17, 1986

Atty. Ricardo C. Valmonte

108 E. Benin Street
Caloocan City

Dear Compañero:

Possibly because he must have thought that it contained serious legal implications,
President & General Manager Feliciano Belmonte, Jr. referred to me for study and
reply your letter to him of June 4, 1986 requesting a list of the opposition members of
Batasang Pambansa who were able to secure a clean loan of P2 million each on
guaranty of Mrs. Imelda Marcos.

My opinion in this regard is that a confidential relationship exists between the GSIS
and all those who borrow from it, whoever they may be; that the GSIS has a duty to
its customers to preserve this confidentiality; and that it would not be proper for the
GSIS to breach this confidentiality unless so ordered by the courts.

As a violation of this confidentiality may mar the image of the GSIS as a reputable
financial institution, I regret very much that at this time we cannot respond positively
to your request.

Very truly yours,

 (Sgd.) MEYNARDO A. TIRO
Deputy General Counsel
[Rollo, p. 40.]

On June 20, 1986, apparently not having yet received the reply of the Government Service and
Insurance System (GSIS) Deputy General Counsel, petitioner Valmonte wrote respondent another
letter, saying that for failure to receive a reply, "(W)e are now considering ourselves free to do
whatever action necessary within the premises to pursue our desired objective in pursuance of
public interest." [Rollo, p. 8.]

On June 26, 1986, Valmonte, joined by the other petitioners, filed the instant suit.

On July 19, 1986, the Daily Express carried a news item reporting that 137 former members of the
defunct interim and regular Batasang Pambansa, including ten (10) opposition members, were
granted housing loans by the GSIS [Rollo, p. 41.]

Separate comments were filed by respondent Belmonte and the Solicitor General. After petitioners
filed a consolidated reply, the petition was given due course and the parties were required to file
their memoranda. The parties having complied, the case was deemed submitted for decision.

In his comment respondent raises procedural objections to the issuance of a writ of mandamus,
among which is that petitioners have failed to exhaust administrative remedies.

Respondent claims that actions of the GSIS General Manager are reviewable by the Board of
Trustees of the GSIS. Petitioners, however, did not seek relief from the GSIS Board of Trustees. It is
therefore asserted that since administrative remedies were not exhausted, then petitioners have no
cause of action.

To this objection, petitioners claim that they have raised a purely legal issue, viz., whether or not
they are entitled to the documents sought, by virtue of their constitutional right to information. Hence,
it is argued that this case falls under one of the exceptions to the principle of exhaustion of
administrative remedies.

Among the settled principles in administrative law is that before a party can be allowed to resort to
the courts, he is expected to have exhausted all means of administrative redress available under the
law. The courts for reasons of law, comity and convenience will not entertain a case unless the
available administrative remedies have been resorted to and the appropriate authorities have been
given opportunity to act and correct the errors committed in the administrative forum. However, the
principle of exhaustion of administrative remedies is subject to settled exceptions, among which is
when only a question of law is involved [Pascual v. Provincial Board, 106 Phil. 466 (1959); Aguilar v.
Valencia, et al., G.R. No. L-30396, July 30, 1971, 40 SCRA 210; Malabanan v. Ramento, G.R. No.
L-2270, May 21, 1984, 129 SCRA 359.] The issue raised by petitioners, which requires the
interpretation of the scope of the constitutional right to information, is one which can be passed upon
by the regular courts more competently than the GSIS or its Board of Trustees, involving as it does a
purely legal question. Thus, the exception of this case from the application of the general rule on
exhaustion of administrative remedies is warranted. Having disposed of this procedural issue, We
now address ourselves to the issue of whether or not mandamus hes to compel respondent to
perform the acts sought by petitioners to be done, in pursuance of their right to information.

We shall deal first with the second and third alternative acts sought to be done, both of which involve
the issue of whether or not petitioners are entitled to access to the documents evidencing loans
granted by the GSIS.
This is not the first time that the Court is confronted with a controversy directly involving the
constitutional right to information. In Tañada v. Tuvera, G.R. No. 63915, April 24,1985, 136 SCRA 27
and in the recent case of Legaspi v. Civil Service Commission, G.R. No. 72119, May 29, 1987,150
SCRA 530, the Court upheld the people's constitutional right to be informed of matters of public
interest and ordered the government agencies concerned to act as prayed for by the petitioners.

The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 which states:

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.

The right of access to information was also recognized in the 1973 Constitution, Art. IV Sec. 6 of
which provided:

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, shall be afforded the citizen subject to such
limitations as may be provided by law.

An informed citizenry with access to the diverse currents in political, moral and artistic thought and
data relative to them, and the free exchange of ideas and discussion of issues thereon, is vital to the
democratic government envisioned under our Constitution. The cornerstone of this republican
system of government is delegation of power by the people to the State. In this system,
governmental agencies and institutions operate within the limits of the authority conferred by the
people. Denied access to information on the inner workings of government, the citizenry can become
prey to the whims and caprices of those to whom the power had been delegated. The postulate of
public office as a public trust, institutionalized in the Constitution (in Art. XI, Sec. 1) to protect the
people from abuse of governmental power, would certainly be were empty words if access to such
information of public concern is denied, except under limitations prescribed by implementing
legislation adopted pursuant to the Constitution.

Petitioners are practitioners in media. As such, they have both the right to gather and the obligation
to check the accuracy of information the disseminate. For them, the freedom of the press and of
speech is not only critical, but vital to the exercise of their professions. The right of access to
information ensures that these freedoms are not rendered nugatory by the government's
monopolizing pertinent information. For 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. Yet, this open dialogue can be
effective only to the extent that the citizenry is informed and thus able to formulate its will
intelligently. Only when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit.

The right to information is an essential premise of a meaningful right to speech and expression. But
this is not to say that the right to information is merely an adjunct of and therefore restricted in
application by the exercise of the freedoms of speech and of the press. Far from it. The right to
information goes hand-in-hand with the constitutional policies of full public disclosure  * and honesty in the
public service. ** It is meant to enhance the widening role of the citizenry in governmental decision-making as well as in checking abuse in
government.
Yet, like all the constitutional guarantees, the right to information is not absolute. As stated
in Legaspi, the people's right to information is limited to "matters of public concern," and is further
"subject to such limitations as may be provided by law." Similarly, the State's policy of full disclosure
is limited to "transactions involving public interest," and is "subject to reasonable conditions
prescribed by law."

Hence, before mandamus may issue, it must be clear that the information sought is of "public
interest" or "public concern," and is not exempted by law from the operation of the constitutional
guarantee [Legazpi v. Civil Service Commission, supra, at p. 542.]

The Court has always grappled with the meanings of the terms "public interest" and "public concern".
As observed in Legazpi:

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 citezen. 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. [Ibid. at p.
541]

In the Tañada case the public concern deemed covered by the constitutional right to information was
the need for adequate notice to the public of the various laws which are to regulate the actions and
conduct of citezens. In Legaspi, it was the "legitimate concern of citezensof ensure that government
positions requiring civil service eligibility are occupied only by persons who are eligibles" [Supra at p.
539.]

The information sought by petitioners in this case is the truth of reports that certain Members of the
Batasang Pambansa belonging to the opposition were able to secure "clean" loans from the GSIS
immediately before the February 7, 1986 election through the intercession of th eformer First Lady,
Mrs. Imelda Marcos.

The GSIS is a trustee of contributions from the government and its employees and the administrator
of various insurance programs for the benefit of the latter. Undeniably, its funds assume a public
character. More particularly, Secs. 5(b) and 46 of P.D. 1146, as amended (the Revised Government
Service Insurance Act of 1977), provide for annual appropriations to pay the contributions,
premiums, interest and other amounts payable to GSIS by the government, as employer, as well as
the obligations which the Republic of the Philippines assumes or guarantees to pay. Considering the
nature of its funds, the GSIS is expected to manage its resources with utmost prudence and in strict
compliance with the pertinent laws or rules and regulations. Thus, one of the reasons that prompted
the revision of the old GSIS law (C.A. No. 186, as amended) was the necessity "to preserve at all
times the actuarial solvency of the funds administered by the System" [Second Whereas Clause,
P.D. No. 1146.] Consequently, as respondent himself admits, the GSIS "is not supposed to grant
'clean loans.'" [Comment, p. 8.] It is therefore the legitimate concern of the public to ensure that
these funds are managed properly with the end in view of maximizing the benefits that accrue to the
insured government employees. Moreover, the supposed borrowers were Members of the defunct
Batasang Pambansa who themselves appropriated funds for the GSIS and were therefore expected
to be the first to see to it that the GSIS performed its tasks with the greatest degree of fidelity and
that an its transactions were above board.
In sum, the public nature of the loanable funds of the GSIS and the public office held by the alleged
borrowers make the information sought clearly a matter of public interest and concern.

A second requisite must be met before the right to information may be enforced through mandamus
proceedings, viz., that the information sought must not be among those excluded by law.

Respondent maintains that a confidential relationship exists between the GSIS and its borrowers. It
is argued that a policy of confidentiality restricts the indiscriminate dissemination of information.

Yet, respondent has failed to cite any law granting the GSIS the privilege of confidentiality as
regards the documents subject of this petition. His position is apparently based merely on
considerations of policy. The judiciary does not settle policy issues. The Court can only declare what
the law is, and not what the law should be. Under our system of government, policy issues are within
the domain of the political branches of the government, and of the people themselves as the
repository of all State power.

Respondent however contends that in view of the right to privacy which is equally protected by the
Constitution and by existing laws, the documents evidencing loan transactions of the GSIS must be
deemed outside the ambit of the right to information.

There can be no doubt that right to privacy is constitutionally protected. In the landmark case
of Morfe v. Mutuc [130 Phil. 415 (1968), 22 SCRA 424], this Court, speaking through then Mr.
Justice Fernando, stated:

... The right to privacy as such is accorded recognition independently of its

identification with liberty; in itself, it is fully deserving of constitutional protection. The
language of Prof. Emerson is particularly apt: "The concept of limited government
has always included the idea that governmental powers stop short of certain
intrusions into the personal life of the citizen. This is indeed one of the basic
distinctions between absolute and limited government. UItimate and pervasive
control of the individual, in all aspects of his life, is the hallmark of the absolute. state,
In contrast, a system of limited government safeguards a private sector, which
belongs to the individual, firmly distinguishing it from the public sector, which the
state can control. Protection of this private sector — protection, in other words, of the
dignity and integrity of the individual — has become increasingly important as
modem society has developed. All the forces of technological age —
industrialization, urbanization, and organization — operate to narrow the area of
privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and
support this enclave of private life marks the difference between a democratic and a
totalitarian society." [at pp. 444-445.]

When the information requested from the government intrudes into the privacy of a citizen, a
potential conflict between the rights to information and to privacy may arise. However, the competing
interests of these rights need not be resolved in this case. Apparent from the above-quoted
statement of the Court in Morfe is that the right to privacy belongs to the individual in his private
capacity, and not to public and governmental agencies like the GSIS. Moreover, the right cannot be
invoked by juridical entities like the GSIS. As held in the case of Vassar College v. Loose Wills
Biscuit Co. [197 F. 982 (1912)], a corporation has no right of privacy in its name since the entire
basis of the right to privacy is an injury to the feelings and sensibilities of the party and a corporation
would have no such ground for relief.
Neither can the GSIS through its General Manager, the respondent, invoke the right to privacy of its
borrowers. The right is purely personal in nature [Cf. Atkinson v. John Doherty & Co., 121 Mich 372,
80 N.W. 285, 46 L.RA. 219 (1899); Schuyler v. Curtis, 147 N.Y. 434, 42 N.E. 22, 31 L.R.A. 286
(1895)), and hence may be invoked only by the person whose privacy is claimed to be violated.

It may be observed, however, that in the instant case, the concerned borrowers themselves may not
succeed if they choose to invoke their right to privacy, considering the public offices they were
holding at the time the loans were alleged to have been granted. It cannot be denied that because of
the interest they generate and their newsworthiness, public figures, most especially those holding
responsible positions in government, enjoy a more limited right to privacy as compared to ordinary
individuals, their actions being subject to closer public scrutiny [Cf. Ayer Productions Pty. Ltd. v.
Capulong, G.R. Nos. 82380 and 82398, April 29, 1988; See also Cohen v. Marx, 211 P. 2d 321
(1949).]

Respondent next asserts that the documents evidencing the loan transactions of the GSIS
are private in nature and hence, are not covered by the Constitutional right to information on matters
of public concern which guarantees "(a)ccess to official records, and to documents, and papers
pertaining to official acts, transactions, or decisions" only.

It is argued that the records of the GSIS, a government corporation performing proprietary functions,
are outside the coverage of the people's right of access to official records.

It is further contended that since the loan function of the GSIS is merely incidental to its insurance
function, then its loan transactions are not covered by the constitutional policy of full public
disclosure and the right to information which is applicable only to "official" transactions.

First of all, the "constituent — ministrant" dichotomy characterizing government function has long
been repudiated. In ACCFA v. Confederation of Unions and Government Corporations and
Offices (G.R. Nos. L-21484 and L-23605, November 29, 1969, 30 SCRA 6441, the Court said that
the government, whether carrying out its sovereign attributes or running some business, discharges
the same function of service to the people.

Consequently, that the GSIS, in granting the loans, was exercising a proprietary function would not
justify the exclusion of the transactions from the coverage and scope of the right to information.

Moreover, the intent of the members of the Constitutional Commission of 1986, to include
government-owned and controlled corporations and transactions entered into by them within the
coverage of the State policy of fun public disclosure is manifest from the records of the proceedings:

xxx xxx xxx

THE PRESIDING OFFICER (Mr. Colayco).

Commissioner Suarez is recognized.

MR. SUAREZ. Thank you. May I ask the Gentleman a few question?

MR. OPLE. Very gladly.

MR. SUAREZ. Thank you.

 When we declare a "policy of full public disclosure of all its
transactions" — referring to the transactions of the State — and when
we say the "State" which I suppose would include all of the various
agencies, departments, ministries and instrumentalities of the
government....

MR. OPLE. Yes, and individual public officers, Mr. Presiding Officer.

MR. SUAREZ. Including government-owned and controlled corporations.

MR. OPLE. That is correct, Mr. Presiding Officer.

MR. SUAREZ. And when we say "transactions" which

should be distinguished from contracts, agreements,
or treaties or whatever, does the Gentleman refer to
the steps leading to the consummation of the
contract, or does he refer to the contract itself?

MR. OPLE. The "transactions" used here I suppose is

generic and, therefore, it can cover both steps leading
to a contract, and already a consummated contract,
Mr. Presiding Officer.

MR. SUAREZ. This contemplates inclusion of

negotiations leading to the consummation of the
transaction.

MR. OPLE. Yes, subject only to reasonable

safeguards on the national interest.

MR. SUAREZ. Thank you. [V Record of the

Constitutional Commission 24-25.] (Emphasis
supplied.)

Considering the intent of the framers of the Constitution which, though not binding upon the Court,
are nevertheless persuasive, and considering further that government-owned and controlled
corporations, whether performing proprietary or governmental functions are accountable to the
people, the Court is convinced that transactions entered into by the GSIS, a government-controlled
corporation created by special legislation are within the ambit of the people's right to be informed
pursuant to the constitutional policy of transparency in government dealings.

In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS,
subject to reasonable regulations that the latter may promulgate relating to the manner and hours of
examination, to the end that damage to or loss of the records may be avoided, that undue
interference with the duties of the custodian of the records may be prevented and that the right of
other persons entitled to inspect the records may be insured [Legaspi v. Civil Service
Commission, supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387.] The petition, as to the
second and third alternative acts sought to be done by petitioners, is meritorious.

However, the same cannot be said with regard to the first act sought by petitioners, i.e., "to furnish
petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and
PDP-Laban who were able to secure clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos."

Although citizens are afforded the right to information and, pursuant thereto, are entitled to "access
to official records," the Constitution does not accord them a right to compel custodians of official
records to prepare lists, abstracts, summaries and the like in their desire to acquire information on
matters of public concern.

It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a well-
defined, clear and certain legal right to the thing demanded and that it is the imperative duty of
defendant to perform the act required. The corresponding duty of the respondent to perform the
required act must be clear and specific [Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126
SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.] The request of
the petitioners fails to meet this standard, there being no duty on the part of respondent to prepare
the list requested.

WHEREFORE, the instant petition is hereby granted and respondent General Manager of the
Government Service Insurance System is ORDERED to allow petitioners access to documents and
records evidencing loans granted to Members of the former Batasang Pambansa, as petitioners may
specify, subject to reasonable regulations as to the time and manner of inspection, not incompatible
with this decision, as the GSIS may deem necessary.

SO ORDERED.
G.R. No. 133250           July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.

CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a
temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for
brevity) to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition
further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.

The Facts

On November 20, 1973, the government, through the Commissioner of Public Highways, signed a
contract with the Construction and Development Corporation of the Philippines ("CDCP" for brevity)
to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the
construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out
all the works in consideration of fifty percent of the total reclaimed land.

On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas,"
and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands." 1 On the same
date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands
reclaimed in the foreshore and offshore of the Manila Bay" 2 under the Manila-Cavite Coastal Road
and Reclamation Project (MCCRRP).

On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its
contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by
PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29,
1981, which stated:

"(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of works
on a unit price/lump sum basis for items of work to be agreed upon, subject to price
escalation, retention and other terms and conditions provided for in Presidential Decree No.
1594. All the financing required for such works shall be provided by PEA.

xxx

(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and
transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to all
the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have
not yet been sold, transferred or otherwise disposed of by CDCP as of said date, which
areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
square meters in the Financial Center Area covered by land pledge No. 5 and approximately
Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888)
 square meters of reclaimed areas at varying elevations above Mean Low Water Level
located outside the Financial Center Area and the First Neighborhood Unit." 3

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting
and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand
eight hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register
of Deeds of the Municipality of Parañaque issued Transfer Certificates of Title Nos. 7309, 7311, and
7312, in the name of PEA, covering the three reclaimed islands known as the "Freedom Islands"
located at the southern portion of the Manila-Cavite Coastal Road, Parañaque City. The Freedom
Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred
and Forty One (1,578,441) square meters or 157.841 hectares.

On April 25, 1995, c. The JVA also required the reclamation of an additional 250 hectares of
submerged areas surrounding these islands to complete the configuration in the Master
Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI entered into the
JVA through negotiation without public bidding.4 On April 28, 1995, the Board of Directors of PEA, in
its Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then President Fidel V. Ramos,
through then Executive Secretary Ruben Torres, approved the JVA.6

On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the
Senate and denounced the JVA as the "grandmother of all scams." As a result, the Senate
Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee Report No. 560 dated
September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands PEA seeks
to transfer to AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the certificates of
title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.

On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No.
365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate
Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice,8 the Chief Presidential Legal Counsel,9 and the Government Corporate Counsel. 10 The Legal
Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.11

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-
going renegotiations between PEA and AMARI under an order issued by then President Fidel V.
Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and
retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.

On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with
Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed
as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition "for unwarranted
disregard of judicial hierarchy, without prejudice to the refiling of the case before the proper court." 12

On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in
the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the
terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the
1987 Constitution on the right of the people to information on matters of public concern. Petitioner
assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII
of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private
corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in
properties of the State that are of public dominion.

After several motions for extension of time, 13 PEA and AMARI filed their Comments on October 19,
1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract;
(b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the
Court denied in a Resolution dated June 22, 1999.

In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the
parties to file their respective memoranda.

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended
JVA," for brevity). On May 28, 1999, the Office of the President under the administration of then
President Joseph E. Estrada approved the Amended JVA.

Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on
"constitutional and statutory grounds the renegotiated contract be declared null and void." 14

The Issues

The issues raised by petitioner, PEA15 and AMARI16 are as follows:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT
AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF

ADMINISTRATIVE REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL

INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT

FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.

The Court's Ruling

 First issue: whether the principal reliefs prayed for in the petition are moot and academic
because of subsequent events.

The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations
for a new agreement." The petition also prays that the Court enjoin PEA from "privately entering into,
perfecting and/or executing any new agreement with AMARI."

PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner
on June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed
upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of the
renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot
because PEA and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the
Office of the President has approved the Amended JVA on May 28, 1999.

Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking
the signing and approval of the Amended JVA before the Court could act on the issue. Presidential
approval does not resolve the constitutional issue or remove it from the ambit of judicial review.

We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President
cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still
to implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on
constitutional grounds necessarily includes preventing its implementation if in the meantime PEA
and AMARI have signed one in violation of the Constitution. Petitioner's principal basis in assailing
the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits
the government from alienating lands of the public domain to private corporations. If the Amended
JVA indeed violates the Constitution, it is the duty of the Court to enjoin its implementation, and if
already implemented, to annul the effects of such unconstitutional contract.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and
ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a
single private corporation. It now becomes more compelling for the Court to resolve the issue to
insure the government itself does not violate a provision of the Constitution intended to safeguard
the national patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, if
the Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and
ownership of alienable lands of the public domain in the name of AMARI. Even in cases where
supervening events had made the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide the bench, bar, and the
public.17

Also, the instant petition is a case of first impression. All previous decisions of the Court involving
Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private corporations which acquired the lands from
private parties. The transferors of the private corporations claimed or could claim the right to judicial
confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141" for
brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed
lands and submerged areas for non-agricultural purposes by purchase under PD No. 1084
(charter of PEA) and Title III of CA No. 141. Certain undertakings by AMARI under the Amended
JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim judicial
confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or
still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and
notorious occupation of agricultural lands of the public domain for at least thirty years since June 12,
1945 or earlier. Besides, the deadline for filing applications for judicial confirmation of imperfect title
expired on December 31, 1987. 20

Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because
of the possible transfer at any time by PEA to AMARI of title and ownership to portions of the
reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy
percent proportionate share in the reclaimed areas as the reclamation progresses. The Amended
JVA even allows AMARI to mortgage at any time the entire reclaimed area to raise financing for the
reclamation project.21

Second issue: whether the petition merits dismissal for failing to observe the principle
governing the hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As
it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case,
however, raises constitutional issues of transcendental importance to the public.22 The Court can
resolve this case without determining any factual issue related to the case. Also, the instant case is a
petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article
VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.

Third issue: whether the petition merits dismissal for non-exhaustion of administrative
remedies.

PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain
information without first asking PEA the needed information. PEA claims petitioner's direct resort to
the Court violates the principle of exhaustion of administrative remedies. It also violates the rule that
mandamus may issue only if there is no other plain, speedy and adequate remedy in the ordinary
course of law.

PEA distinguishes the instant case from Tañada v. Tuvera23 where the Court granted the petition for
mandamus even if the petitioners there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in Tañada, the Executive Department
had an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of
Commonwealth Act No. 63825 to publish the presidential decrees. There was, therefore, no need for
the petitioners in Tañada to make an initial demand from the Office of the President. In the instant
case, PEA claims it has no affirmative statutory duty to disclose publicly information about its
renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of
administrative remedies to the instant case in view of the failure of petitioner here to demand initially
from PEA the needed information.

The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation.
Under Section 79 of the Government Auditing Code, 26 the disposition of government lands to private
parties requires public bidding. PEA was under a positive legal duty to disclose to the public the
terms and conditions for the sale of its lands. The law obligated PEA to make this public
disclosure even without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of a negotiated
contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make the
public disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct
judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative
remedies does not apply when the issue involved is a purely legal or constitutional question. 27 The
principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of
the constitutional ban prohibiting the alienation of lands of the public domain to private corporations.
We rule that the principle of exhaustion of administrative remedies does not apply in the instant
case.

Fourth issue: whether petitioner has locus standi to bring this suit

PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his

constitutional right to information without a showing that PEA refused to perform an affirmative duty
imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he will
suffer any concrete injury because of the signing or implementation of the Amended JVA. Thus,
there is no actual controversy requiring the exercise of the power of judicial review.

The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to
comply with its constitutional duties. There are two constitutional issues involved here. First is the
right of citizens to information on matters of public concern. Second is the application of a
constitutional provision intended to insure the equitable distribution of alienable lands of the public
domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly
information on the sale of government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the
Constitution, compelling PEA to comply with a constitutional duty to the nation.

Moreover, the petition raises matters of transcendental importance to the public. In Chavez v.
PCGG,28 the Court upheld the right of a citizen to bring a taxpayer's suit on matters of transcendental
importance to the public, thus -

"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of 'transcendental importance to the public.' He asserts that ordinary
taxpayers have a right to initiate and prosecute actions questioning the validity of acts or
orders of government agencies or instrumentalities, if the issues raised are of 'paramount
public interest,' and if they 'immediately affect the social, economic and moral well being of
the people.'

Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest,
when the proceeding involves the assertion of a public right, such as in this case. He invokes
several decisions of this Court which have set aside the procedural matter of locus standi,
when the subject of the case involved public interest.

xxx

In Tañada v. Tuvera, the Court asserted that when the issue concerns a public right and the
object of mandamus is to obtain the enforcement of a public duty, the people are regarded
as the real parties in interest; and because it is sufficient that petitioner is a citizen and as
such is interested in the execution of the laws, he need not show that he has any legal or
special interest in the result of the action. In the aforesaid case, the petitioners sought to
enforce their right to be informed on matters of public concern, a right then recognized in
Section 6, Article IV of the 1973 Constitution, in connection with the rule that laws in order to
be valid and enforceable must be published in the Official Gazette or otherwise effectively
promulgated. In ruling for the petitioners' legal standing, the Court declared that the right they
 sought to be enforced 'is a public right recognized by no less than the fundamental law of the
land.'

Legaspi v. Civil Service Commission, while reiterating Tañada, further declared that 'when a
mandamus proceeding involves the assertion of a public right, the requirement of personal
interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the
general 'public' which possesses the right.'

Further, in Albano v. Reyes, we said that while expenditure of public funds may not have
been involved under the questioned contract for the development, management and
operation of the Manila International Container Terminal, 'public interest [was] definitely
involved considering the important role [of the subject contract] . . . in the economic
development of the country and the magnitude of the financial consideration involved.' We
concluded that, as a consequence, the disclosure provision in the Constitution would
constitute sufficient authority for upholding the petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to information and access
to official records, documents and papers — a right guaranteed under Section 7, Article III of
the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of
the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's
legal standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we
rule that the petition at bar should be allowed."

We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional
rights - to information and to the equitable diffusion of natural resources - matters of transcendental
public importance, the petitioner has the requisite locus standi.

Fifth issue: whether the constitutional right to information includes official information on
on-going negotiations before a final agreement.

Section 7, Article III of the Constitution explains the people's right to information on matters of public
concern in this manner:

"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." (Emphasis supplied)

The State policy of full transparency in all transactions involving public interest reinforces the
people's right to information on matters of public concern. This State policy is expressed in Section
28, Article II of the Constitution, thus:

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

These twin provisions of the Constitution seek to promote transparency in policy-making and in the
operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights. These twin provisions are essential to the exercise of freedom
of expression. If the government does not disclose its official acts, transactions and decisions to
citizens, whatever citizens say, even if expressed without any restraint, will be speculative and
amount to nothing. These twin provisions are also essential to hold public officials "at all times x x x
accountable to the people,"29 for unless citizens have the proper information, they cannot hold public
officials accountable for anything. Armed with the right information, citizens can participate in public
discussions leading to the formulation of government policies and their effective implementation. An
informed citizenry is essential to the existence and proper functioning of any democracy. As
explained by the Court in Valmonte v. Belmonte, Jr.30 –

"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. Yet, this open dialogue can be effective only
to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only
when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit."

PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information
is limited to "definite propositions of the government." PEA maintains the right does not include
access to "intra-agency or inter-agency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the 'exploratory stage'."

Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before
the closing of the transaction. To support its contention, AMARI cites the following discussion in the
1986 Constitutional Commission:

"Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?

Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can
cover both steps leading to a contract and already a consummated contract, Mr.
Presiding Officer.

Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation

of the transaction.

Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.

Mr. Suarez: Thank you."32 (Emphasis supplied)

AMARI argues there must first be a consummated contract before petitioner can invoke the right.
Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade
the quality of decision-making in government agencies. Government officials will hesitate to express
their real sentiments during deliberations if there is immediate public dissemination of their
discussions, putting them under all kinds of pressure before they decide.

We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the public.
Before the consummation of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property. These include the size,
location, technical description and nature of the property being disposed of, the terms and conditions
of the disposition, the parties qualified to bid, the minimum price and similar information. PEA must
prepare all these data and disclose them to the public at the start of the disposition process, long
before the consummation of the contract, because the Government Auditing Code requires public
bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this information at
any time during the bidding process.

Information, however, on on-going evaluation or review of bids or proposals being undertaken by

the bidding or review committee is not immediately accessible under the right to information. While
the evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its official recommendation, there arises
a "definite proposition" on the part of the government. From this moment, the public's right to
information attaches, and any citizen can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG,33 the Court ruled as follows:

"Considering the intent of the framers of the Constitution, we believe that it is incumbent
upon the PCGG and its officers, as well as other government representatives, to disclose
sufficient public information on any proposed settlement they have decided to take up with
the ostensible owners and holders of ill-gotten wealth. Such information, though, must
pertain to definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the "exploratory" stage. There
is need, of course, to observe the same restrictions on disclosure of information in general,
as discussed earlier – such as on matters involving national security, diplomatic or foreign
relations, intelligence and other classified information." (Emphasis supplied)

Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission

understood that the right to information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated contract is not a requirement for the
exercise of the right to information. Otherwise, the people can never exercise the right if no contract
is consummated, and if one is consummated, it may be too late for the public to expose its defects. 1âwphi1.nêt

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 a 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."

The right covers three categories of information which are "matters of public concern," namely: (1)
official records; (2) documents and papers pertaining to official acts, transactions and decisions; and
(3) government research data used in formulating policies. The first category refers to any document
that is part of the public records in the custody of government agencies or officials. The second
category refers to documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies or officials.
The third category refers to research data, whether raw, collated or processed, owned by the
government and used in formulating government policies.

The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA.34 The right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection and copying. 35

The right to information, however, does not extend to matters recognized as privileged information
under the separation of powers.36 The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and information on investigations of
crimes by law enforcement agencies before the prosecution of the accused, which courts have long
recognized as confidential.37 The right may also be subject to other limitations that Congress may
impose by law.

There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house
of Congress,38 are recognized as confidential. This kind of information cannot be pried open by a co-
equal branch of government. A frank exchange of exploratory ideas and assessments, free from the
glare of publicity and pressure by interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential, Legislative and Judicial power. 39 This is not
the situation in the instant case.

We rule, therefore, that the constitutional right to information includes official information on on-
going negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and public
order.40 Congress has also prescribed other limitations on the right to information in several
legislations.41

Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands,
reclaimed or to be reclaimed, violate the Constitution.

The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian
doctrine which holds that the State owns all lands and waters of the public domain. Upon the
Spanish conquest of the Philippines, ownership of all "lands, territories and possessions" in the
Philippines passed to the Spanish Crown.42 The King, as the sovereign ruler and representative of
the people, acquired and owned all lands and territories in the Philippines except those he disposed
of by grant or sale to private individuals.

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
State, in lieu of the King, as the owner of all lands and waters of the public domain. The Regalian
doctrine is the foundation of the time-honored principle of land ownership that "all lands that were not
acquired from the Government, either by purchase or by grant, belong to the public domain." 43 Article
339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the
Regalian doctrine.

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals. On November 7,
1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land
Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. CA No. 141 continues to this day as the general law governing the
classification and disposition of lands of the public domain.

The Spanish Law of Waters of 1866 and the Civil Code of 1889

Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the
maritime zone of the Spanish territory belonged to the public domain for public use. 44 The Spanish
Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of the
grant of authority."

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking
the reclamation, provided the government issued the necessary permit and did not reserve
ownership of the reclaimed land to the State.

Article 339 of the Civil Code of 1889 defined property of public dominion as follows:

"Art. 339. Property of public dominion is –

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar character;

2. That belonging exclusively to the State which, without being of general public use, is
employed in some public service, or in the development of the national wealth, such as walls,
fortresses, and other works for the defense of the territory, and mines, until granted to private
individuals."

Property devoted to public use referred to property open for use by the public. In contrast, property
devoted to public service referred to property used for some specific public service and open only to
those authorized to use the property.

Property of public dominion referred not only to property devoted to public use, but also to property
not so used but employed to develop the national wealth. This class of property constituted
property of public dominion although employed for some economic or commercial activity to increase
the national wealth.

Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into
private property, to wit:
 "Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State."

This provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial defense
before the government could lease or alienate the property to private parties. 45

Act No. 1654 of the Philippine Commission

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of
reclaimed and foreshore lands. The salient provisions of this law were as follows:

"Section 1. The control and disposition of the foreshore as defined in existing law, and
the title to all Government or public lands made or reclaimed by the Government by
dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights conceded to
the City of Manila in the Luneta Extension.

Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made
or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or
blocks, with the necessary streets and alleyways located thereon, and shall cause plats and
plans of such surveys to be prepared and filed with the Bureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall give notice to
the public that such parts of the lands so made or reclaimed as are not needed for
public purposes will be leased for commercial and business purposes, x x x.

xxx

(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-General may
by executive order prescribe." (Emphasis supplied)

Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore lands.
Private parties could lease lands reclaimed by the government only if these lands were no longer
needed for public purpose. Act No. 1654 mandated public bidding in the lease of government
reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other
public lands which the government could sell to private parties, these reclaimed lands were available
only for lease to private parties.

Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654
did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law
of Waters. Lands reclaimed from the sea by private parties with government permission remained
private lands.

Act No. 2874 of the Philippine Legislature

On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act. 46 The
salient provisions of Act No. 2874, on reclaimed lands, were as follows:
 "Sec. 6. The Governor-General, upon the recommendation of the Secretary of
Agriculture and Natural Resources, shall from time to time classify the lands of the
public domain into –

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands, x x x.

Sec. 7. For the purposes of the government and disposition of alienable or disposable public
lands, the Governor-General, upon recommendation by the Secretary of Agriculture
and Natural Resources, shall from time to time declare what lands are open to
disposition or concession under this Act."

Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited or classified x x x.

xxx

Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land,
shall be classified as suitable for residential purposes or for commercial, industrial, or
other productive purposes other than agricultural purposes, and shall be open to
disposition or concession, shall be disposed of under the provisions of this chapter, and not
otherwise.

Sec. 56. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

x x x.

Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be
disposed of to private parties by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the public service and
are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)

Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain
into x x x alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General to
"declare what lands are open to disposition or concession." Section 8 of the Act limited alienable or
disposable lands only to those lands which have been "officially delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title 48 shall be classified" as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive non-
agricultural purposes. These provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public domain. These provisions
also empowered the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well as other non-
agricultural lands.

Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands "shall be disposed of to private
parties by lease only and not otherwise." The Governor-General, before allowing the lease of
these lands to private parties, must formally declare that the lands were "not necessary for the public
service." Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed,
foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654.
Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government could not sell to private parties.

The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public service.
This is the reason the government prohibited the sale, and only allowed the lease, of these lands to
private parties. The State always reserved these lands for some future public service.

Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy
lands into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were
the only lands for non-agricultural purposes the government could sell to private parties. Thus, under
Act No. 2874, the government could not sell government reclaimed, foreshore and marshy lands to
private parties, unless the legislature passed a law allowing their sale.49

Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of
the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.

Dispositions under the 1935 Constitution

On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The
1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that –

"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential energy and other natural
resources of the Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations or
associations at least sixty per centum of the capital of which is owned by such citizens,
subject to any existing right, grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license, concession, or lease for
the exploitation, development, or utilization of any of the natural resources shall be granted
for a period exceeding twenty-five years, renewable for another twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and limit of
the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public agricultural lands,
which were the only natural resources the State could alienate. Thus, foreshore lands, considered
part of the State's natural resources, became inalienable by constitutional fiat, available only for
lease for 25 years, renewable for another 25 years. The government could alienate foreshore lands
only after these lands were reclaimed and classified as alienable agricultural lands of the public
domain. Government reclaimed and marshy lands of the public domain, being neither timber nor
mineral lands, fell under the classification of public agricultural lands. 50 However, government
reclaimed and marshy lands, although subject to classification as disposable public agricultural
lands, could only be leased and not sold to private parties because of Act No. 2874.

The prohibition on private parties from acquiring ownership of government reclaimed and marshy
lands of the public domain was only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit individuals and corporations from
acquiring government reclaimed and marshy lands of the public domain that were classified as
agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution
provided as follows:

"Section 2. No private corporation or association may acquire, lease, or hold public
agricultural lands in excess of one thousand and twenty four hectares, nor may any
individual acquire such lands by purchase in excess of one hundred and forty
hectares, or by lease in excess of one thousand and twenty-four hectares, or by
homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two
thousand hectares, may be leased to an individual, private corporation, or association."
(Emphasis supplied)

Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No.
2874 to open for sale to private parties government reclaimed and marshy lands of the public
domain. On the contrary, the legislature continued the long established State policy of retaining for
the government title and ownership of government reclaimed and marshy lands of the public domain.

Commonwealth Act No. 141 of the Philippine National Assembly

On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as
the Public Land Act, which compiled the then existing laws on lands of the public domain. CA No.
141, as amended, remains to this day the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral lands. 51

Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
"alienable or disposable"52 lands of the public domain, which prior to such classification are
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President to
"declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that the
government can declare open for disposition or concession only lands that are "officially delimited
and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:

"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into –

(a) Alienable or disposable,

(b) Timber, and

 (c) Mineral lands,

and may at any time and in like manner transfer such lands from one class to another, 53 for
the purpose of their administration and disposition.

Sec. 7. For the purposes of the administration and disposition of alienable or disposable
public lands, the President, upon recommendation by the Secretary of Agriculture and
Commerce, shall from time to time declare what lands are open to disposition or
concession under this Act.

Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited and classified and, when practicable, surveyed, and which
have not been reserved for public or quasi-public uses, nor appropriated by the
Government, nor in any manner become private property, nor those on which a private right
authorized and recognized by this Act or any other valid law may be claimed, or which,
having been reserved or appropriated, have ceased to be so. x x x."

Thus, before the government could alienate or dispose of lands of the public domain, the President
must first officially classify these lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these lands for public or quasi-public
uses.

The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the
public domain, are as follows:

"Sec. 58. Any tract of land of the public domain which, being neither timber nor
mineral land, is intended to be used for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions of this chapter
and not otherwise.

Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may
be, to any person, corporation, or association authorized to purchase or lease public lands
for agricultural purposes. x x x.

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be
disposed of to private parties by lease only and not otherwise, as soon as the
President, upon recommendation by the Secretary of Agriculture, shall declare that the
same are not necessary for the public service and are open to disposition under this
 chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act." (Emphasis supplied)

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act
No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of
the public domain. All these lands are intended for residential, commercial, industrial or other non-
agricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties.
The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or
those lands for non-agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however, became inalienable under
the 1935 Constitution which only allowed the lease of these lands to qualified private parties.

Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for
residential, commercial, industrial or other productive purposes other than agricultural "shall be
disposed of under the provisions of this chapter and not otherwise." Under Section 10 of CA
No. 141, the term "disposition" includes lease of the land. Any disposition of government reclaimed,
foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IX,
Title III of CA No. 141,54 unless a subsequent law amended or repealed these provisions.

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of
Appeals,55 Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:

"Foreshore lands are lands of public dominion intended for public use. So too are lands
reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that
the control and disposition of the foreshore and lands under water remained in the national
government. Said law allowed only the 'leasing' of reclaimed land. The Public Land Acts of
1919 and 1936 also declared that the foreshore and lands reclaimed by the government
were to be "disposed of to private parties by lease only and not otherwise." Before leasing,
however, the Governor-General, upon recommendation of the Secretary of Agriculture and
Natural Resources, had first to determine that the land reclaimed was not necessary for the
public service. This requisite must have been met before the land could be disposed of. But
even then, the foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by lease. The land
remained property of the State." (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained
in effect at present."

The State policy prohibiting the sale to private parties of government reclaimed, foreshore and
marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA
No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935 Constitution. Foreshore lands became
inalienable as natural resources of the State, unless reclaimed by the government and classified as
agricultural lands of the public domain, in which case they would fall under the classification of
government reclaimed lands.

After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of
the public domain continued to be only leased and not sold to private parties. 56 These lands
remained sui generis, as the only alienable or disposable lands of the public domain the
government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties government
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
authorizing such sale. CA No. 141 does not authorize the President to reclassify government
reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classified
under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the
government could sell to private parties.

Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under

Section 59 that the government previously transferred to government units or entities could be sold
to private parties. Section 60 of CA No. 141 declares that –

"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the
Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes
for which such sale or lease is requested, and shall not exceed one hundred and forty-four
hectares: Provided, however, That this limitation shall not apply to grants, donations, or
transfers made to a province, municipality or branch or subdivision of the Government for the
purposes deemed by said entities conducive to the public interest; but the land so granted,
donated, or transferred to a province, municipality or branch or subdivision of the
Government shall not be alienated, encumbered, or otherwise disposed of in a
manner affecting its title, except when authorized by Congress: x x x." (Emphasis
supplied)

The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority
required in Section 56 of Act No. 2874.

One reason for the congressional authority is that Section 60 of CA No. 141 exempted government
units and entities from the maximum area of public lands that could be acquired from the State.
These government units and entities should not just turn around and sell these lands to private
parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-
agricultural purposes to government units and entities could be used to circumvent constitutional
limitations on ownership of alienable or disposable lands of the public domain. In the same manner,
such transfers could also be used to evade the statutory prohibition in CA No. 141 on the sale of
government reclaimed and marshy lands of the public domain to private parties. Section 60 of CA
No. 141 constitutes by operation of law a lien on these lands. 57

In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No.
141, Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as
follows:

"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now
the Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of
such authority, the Director of Lands shall give notice by public advertisement in the same
manner as in the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be
made to the highest bidder. x x x." (Emphasis supplied)

Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable
or disposable lands of the public domain. 58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish
Law of Waters of 1866. Private parties could still reclaim portions of the sea with government
permission. However, the reclaimed land could become private land only if classified as
alienable agricultural land of the public domain open to disposition under CA No. 141. The 1935
Constitution prohibited the alienation of all natural resources except public agricultural lands.

The Civil Code of 1950

The Civil Code of 1950 readopted substantially the definition of property of public dominion found in
the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that –

"Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth.

x x x.

Art. 422. Property of public dominion, when no longer intended for public use or for public
service, shall form part of the patrimonial property of the State."

Again, the government must formally declare that the property of public dominion is no longer
needed for public use or public service, before the same could be classified as patrimonial property
of the State.59 In the case of government reclaimed and marshy lands of the public domain, the
declaration of their being disposable, as well as the manner of their disposition, is governed by the
applicable provisions of CA No. 141.

Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
properties of the State which, without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed and marshy lands of the State,
even if not employed for public use or public service, if developed to enhance the national wealth,
are classified as property of public dominion.

Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
doctrine. Section 8, Article XIV of the 1973 Constitution stated that –

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the
Philippines belong to the State. With the exception of agricultural, industrial or
commercial, residential, and resettlement lands of the public domain, natural
resources shall not be alienated, and no license, concession, or lease for the exploration,
development, exploitation, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for not more than twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases, beneficial use may be the measure and the
limit of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the exception of
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain." In
contrast, the 1935 Constitution barred the alienation of all natural resources except "public
agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the public domain. 60 If the
land of public domain were neither timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973 Constitutions, therefore,
prohibited the alienation of all natural resources except agricultural lands of the public
domain.

The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals
who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine
citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared that –

"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of land
of the public domain which may be developed, held or acquired by, or leased to, any
qualified individual, corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public domain except by
lease not to exceed one thousand hectares in area nor may any citizen hold such lands by
lease in excess of five hundred hectares or acquire by purchase, homestead or grant, in
excess of twenty-four hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other timber or forest resources in
excess of one hundred thousand hectares. However, such area may be increased by the
Batasang Pambansa upon recommendation of the National Economic and Development
Authority." (Emphasis supplied)

Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public
domain only through lease. Only individuals could now acquire alienable lands of the public domain,
and private corporations became absolutely barred from acquiring any kind of alienable land
of the public domain. The constitutional ban extended to all kinds of alienable lands of the public
domain, while the statutory ban under CA No. 141 applied only to government reclaimed, foreshore
and marshy alienable lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084
creating PEA, a wholly government owned and controlled corporation with a special charter.
Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:

"Sec. 4. Purpose. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or
other means, or to acquire reclaimed land;

(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any
and all kinds of lands, buildings, estates and other forms of real property, owned,
managed, controlled and/or operated by the government;

(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.
 Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:

(a)To prescribe its by-laws.

xxx

(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.

(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse,
canal, ditch, flume x x x.

xxx

(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified." (Emphasis supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
Foreshore areas are those covered and uncovered by the ebb and flow of the tide. 61 Submerged
areas are those permanently under water regardless of the ebb and flow of the tide. 62 Foreshore and
submerged areas indisputably belong to the public domain 63 and are inalienable unless reclaimed,
classified as alienable lands open to disposition, and further declared no longer needed for public
service.

The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public
domain did not apply to PEA since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies now, only to "private corporations
and associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations by statute." Thus, PEA can hold title
to private lands, as well as title to lands of the public domain.

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain,
there must be legislative authority empowering PEA to sell these lands. This legislative authority is
necessary in view of Section 60 of CA No.141, which states –

"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or
branch or subdivision of the Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress; x x x."
(Emphasis supplied)

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
submerged alienable lands of the public domain. Nevertheless, any legislative authority granted to
PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional
ban on private corporations from acquiring alienable lands of the public domain. Hence, such
legislative authority could only benefit private individuals.

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian
doctrine. The 1987 Constitution declares that all natural resources are "owned by the State," and
except for alienable agricultural lands of the public domain, natural resources cannot be alienated.
Sections 2 and 3, Article XII of the 1987 Constitution state that –

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be under the full control and
supervision of the State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the public domain may be further classified by
law according to the uses which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. Private corporations or associations
may not hold such alienable lands of the public domain except by lease, for a period
not exceeding twenty-five years, renewable for not more than twenty-five years, and
not to exceed one thousand hectares in area. Citizens of the Philippines may lease not
more than five hundred hectares, or acquire not more than twelve hectares thereof by
purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired, developed, held, or leased and
the conditions therefor." (Emphasis supplied)

The 1987 Constitution continues the State policy in the 1973 Constitution banning private
corporations from acquiring any kind of alienable land of the public domain. Like the 1973
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public
domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the
lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public
domain is still CA No. 141.

The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring, except through lease,
alienable lands of the public domain is not well understood. During the deliberations of the 1986
Constitutional Commission, the commissioners probed the rationale behind this ban, thus:

"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which
says:

`No private corporation or association may hold alienable lands of the public domain except
by lease, not to exceed one thousand hectares in area.'

If we recall, this provision did not exist under the 1935 Constitution, but this was introduced
in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable
public lands. But it has not been very clear in jurisprudence what the reason for this is.
In some of the cases decided in 1982 and 1983, it was indicated that the purpose of this
is to prevent large landholdings. Is that the intent of this provision?

MR. VILLEGAS: I think that is the spirit of the provision.

 FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances
where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where
a chapel stood because the Supreme Court said it would be in violation of this." (Emphasis
supplied)

In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:

"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural
lands by private corporations is to equitably diffuse land ownership or to encourage 'owner-
cultivatorship and the economic family-size farm' and to prevent a recurrence of cases like
the instant case. Huge landholdings by corporations or private persons had spawned social
unrest."

However, if the constitutional intent is to prevent huge landholdings, the Constitution could have
simply limited the size of alienable lands of the public domain that corporations could acquire. The
Constitution could have followed the limitations on individuals, who could acquire not more than 24
hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12
hectares under the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing the land in the name
of a corporation would be more effective in preventing the break-up of farmlands. If the farmland is
registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares
in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing
break-up of farmlands into smaller and smaller plots from one generation to the next.

In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from
acquiring more than the allowed area of alienable lands of the public domain. Without the
constitutional ban, individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable public lands. An individual
could own as many corporations as his means would allow him. An individual could even hide his
ownership of a corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by
individuals of alienable lands of the public domain.

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a
limited area of alienable land of the public domain to a qualified individual. This constitutional intent
is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public
domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable
public lands are gradually decreasing in the face of an ever-growing population. The most effective
way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the
public domain only to individuals. This, it would seem, is the practical benefit arising from the
constitutional ban.

The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three
properties, namely:

1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;"
 2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and

3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area." 65

PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim
another 350 hectares x x x."66

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the
750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay.

Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's
"actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is
defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that –

"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land share based on the Land Allocation
Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and
delivery of the proper certificates of title covering AMARI's Land Share in the name of
AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any
given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the
titles pertaining to AMARI, until such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled." (Emphasis supplied)

Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.

To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila
Bay. Section 3.2.a of the Amended JVA states that –

"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority and privilege to undertake the
Project in accordance with the Master Development Plan."

The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its
supplemental agreement dated August 9, 1995.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of
Sections 2 and 3, Article XII of the 1987 Constitution which state that:
 "Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x.

xxx

Section 3. x x x Alienable lands of the public domain shall be limited to agricultural

lands. Private corporations or associations may not hold such alienable lands of the
public domain except by lease, x x x."(Emphasis supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum, 67 PEA admits that –

"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain:

'Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the government by dredging, filling, or other means;

x x x.'" (Emphasis supplied)

Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365
admitted in its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands
are classified as alienable and disposable lands of the public domain."69 The Legal Task Force
concluded that –

"D. Conclusion

Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of
ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of
which PEA, as owner, may validly convey the same to any qualified person without violating
the Constitution or any statute.

The constitutional provision prohibiting private corporations from holding public land, except
by lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose
ownership has passed on to PEA by statutory grant."

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila
Bay are part of the "lands of the public domain, waters x x x and other natural resources" and
consequently "owned by the State." As such, foreshore and submerged areas "shall not be
alienated," unless they are classified as "agricultural lands" of the public domain. The mere
reclamation of these areas by PEA does not convert these inalienable natural resources of the State
into alienable or disposable lands of the public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as alienable or disposable and open to
disposition or concession. Moreover, these reclaimed lands cannot be classified as alienable or
disposable if the law has reserved them for some public or quasi-public use. 71
Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."72 The President has the authority
to classify inalienable lands of the public domain into alienable or disposable lands of the public
domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine
Government for use as the Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still ruled that, under Article 422 74 of
the Civil Code, a property of public dominion retains such character until formally declared
otherwise. The Court ruled that –

"The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co.
v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of the public domain,
not available for private appropriation or ownership 'until there is a formal declaration
on the part of the government to withdraw it from being such' (Ignacio v. Director of
Lands, 108 Phil. 335 [1960]." (Emphasis supplied)

PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands
reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84
hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the
Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name of PEA.

PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's issuance of
a land patent also constitute a declaration that the Freedom Islands are no longer needed for public
service. The Freedom Islands are thus alienable or disposable lands of the public domain,
open to disposition or concession to qualified parties.

At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the
Freedom Islands although subsequently there were partial erosions on some areas. The government
had also completed the necessary surveys on these islands. Thus, the Freedom Islands were no
longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution
classifies lands of the public domain into "agricultural, forest or timber, mineral lands, and national
parks." Being neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only natural resources that the State may
alienate to qualified private parties. All other natural resources, such as the seas or bays, are
"waters x x x owned by the State" forming part of the public domain, and are inalienable pursuant to
Section 2, Article XII of the 1987 Constitution.

AMARI claims that the Freedom Islands are private lands because CDCP, then a private
corporation, reclaimed the islands under a contract dated November 20, 1973 with the
Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866,
argues that "if the ownership of reclaimed lands may be given to the party constructing the works,
then it cannot be said that reclaimed lands are lands of the public domain which the State may not
alienate."75 Article 5 of the Spanish Law of Waters reads as follows:
 "Article 5. Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of
the grant of authority." (Emphasis supplied)

Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only
with "proper permission" from the State. Private parties could own the reclaimed land only if not
"otherwise provided by the terms of the grant of authority." This clearly meant that no one could
reclaim from the sea without permission from the State because the sea is property of public
dominion. It also meant that the State could grant or withhold ownership of the reclaimed land
because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a
private person reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public dominion like the sea it
replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land
ownership that "all lands that were not acquired from the government, either by purchase or by
grant, belong to the public domain."77

Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the
disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must
first be classified as alienable or disposable before the government can alienate them. These lands
must not be reserved for public or quasi-public purposes. 78 Moreover, the contract between CDCP
and the government was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This contract could not
have converted the Freedom Islands into private lands of a private corporation.

Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the power to
reclaim lands. Section 1 of PD No. 3-A declared that –

"The provisions of any law to the contrary notwithstanding, the reclamation of areas
under water, whether foreshore or inland, shall be limited to the National Government or
any person authorized by it under a proper contract. (Emphasis supplied)

x x x."

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas
under water could now be undertaken only by the National Government or by a person contracted by
the National Government. Private parties may reclaim from the sea only under a contract with the
National Government, and no longer by grant or permission as provided in Section 5 of the Spanish
Law of Waters of 1866.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Government's implementing arm to undertake "all reclamation projects of the government," which
"shall be undertaken by the PEA or through a proper contract executed by it with any person
or entity." Under such contract, a private party receives compensation for reclamation services
rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the
reclaimed land, subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain. The reclaimed land can be used as payment in kind only if the reclaimed
land is first classified as alienable or disposable land open to disposition, and then declared no
longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares
which are still submerged and forming part of Manila Bay. There is no legislative or Presidential
act classifying these submerged areas as alienable or disposable lands of the public domain
open to disposition. These submerged areas are not covered by any patent or certificate of title.
There can be no dispute that these submerged areas form part of the public domain, and in their
present state are inalienable and outside the commerce of man. Until reclaimed from the sea,
these submerged areas are, under the Constitution, "waters x x x owned by the State," forming part
of the public domain and consequently inalienable. Only when actually reclaimed from the sea can
these submerged areas be classified as public agricultural lands, which under the Constitution are
the only natural resources that the State may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify these lands as alienable or disposable
lands open to disposition. Thereafter, the government may declare these lands no longer needed for
public service. Only then can these reclaimed lands be considered alienable or disposable lands of
the public domain and within the commerce of man.

The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable
lands open to disposition is necessary because PEA is tasked under its charter to undertake public
services that require the use of lands of the public domain. Under Section 5 of PD No. 1084, the
functions of PEA include the following: "[T]o own or operate railroads, tramways and other kinds of
land transportation, x x x; [T]o construct, maintain and operate such systems of sanitary sewers as
may be necessary; [T]o construct, maintain and operate such storm drains as may be necessary."
PEA is empowered to issue "rules and regulations as may be necessary for the proper use by
private parties of any or all of the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus, part of the reclaimed foreshore
and submerged lands held by the PEA would actually be needed for public use or service since
many of the functions imposed on PEA by its charter constitute essential public services.

Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken by the PEA or through a
proper contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation
to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No. 525
recognized PEA as the government entity "to undertake the reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests."79 Since large portions of these
reclaimed lands would obviously be needed for public service, there must be a formal declaration
segregating reclaimed lands no longer needed for public service from those still needed for public
service.1âwphi1.nêt

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned
by the PEA," could not automatically operate to classify inalienable lands into alienable or disposable
lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of the public
domain would automatically become alienable once reclaimed by PEA, whether or not classified as
alienable or disposable.

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests
in the Department of Environment and Natural Resources ("DENR" for brevity) the following powers
and functions:

"Sec. 4. Powers and Functions. The Department shall:

 (1) x x x

xxx

(4) Exercise supervision and control over forest lands, alienable and disposable public

lands, mineral resources and, in the process of exercising such control, impose appropriate
taxes, fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;

xxx

(14) Promulgate rules, regulations and guidelines on the issuance of licenses,

permits, concessions, lease agreements and such other privileges concerning the
development, exploration and utilization of the country's marine, freshwater, and
brackish water and over all aquatic resources of the country and shall continue to
oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other
causes which are in furtherance of the conservation of natural resources and supportive of
the national interest;

(15) Exercise exclusive jurisdiction on the management and disposition of all lands of

the public domain and serve as the sole agency responsible for classification, sub-
classification, surveying and titling of lands in consultation with appropriate
agencies."80 (Emphasis supplied)

As manager, conservator and overseer of the natural resources of the State, DENR exercises
"supervision and control over alienable and disposable public lands." DENR also exercises
"exclusive jurisdiction on the management and disposition of all lands of the public domain." Thus,
DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should
be reclaimed or not. This means that PEA needs authorization from DENR before PEA can
undertake reclamation projects in Manila Bay, or in any part of the country.

DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the lands
as alienable or disposable lands of the public domain open to disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the
Revised Administrative Code and Sections 6 and 7 of CA No. 141.

In short, DENR is vested with the power to authorize the reclamation of areas under water, while
PEA is vested with the power to undertake the physical reclamation of areas under water, whether
directly or through private contractors. DENR is also empowered to classify lands of the public
domain into alienable or disposable lands subject to the approval of the President. On the other
hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.

Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not
make the reclaimed lands alienable or disposable lands of the public domain, much less patrimonial
lands of PEA. Likewise, the mere transfer by the National Government of lands of the public domain
to PEA does not make the lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA.
Absent two official acts – a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed by
PEA remain inalienable lands of the public domain. Only such an official classification and formal
declaration can convert reclaimed lands into alienable or disposable lands of the public domain,
open to disposition under the Constitution, Title I and Title III 83 of CA No. 141 and other applicable
laws.84

PEA's Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain,
the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA,
citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of
the government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting
its title, except when authorized by Congress: x x x."85 (Emphasis by PEA)

In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which
states that –

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x."

Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that -

"It is not for the President to convey real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence." (Emphasis supplied)

PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to
sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that –

"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the Manila-Cavite Coastal Road Project
between the Republic of the Philippines and the Construction and Development Corporation
of the Philippines dated November 20, 1973 and/or any other contract or reclamation
covering the same area is hereby transferred, conveyed and assigned to the ownership
and administration of the Public Estates Authority established pursuant to PD No. 1084;
Provided, however, That the rights and interests of the Construction and Development
Corporation of the Philippines pursuant to the aforesaid contract shall be recognized and
respected.

Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations
of the Republic of the Philippines (Department of Public Highways) arising from, or incident
to, the aforesaid contract between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.

In consideration of the foregoing transfer and assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines the corresponding shares of stock in said
entity with an issued value of said shares of stock (which) shall be deemed fully paid and
non-assessable.
 The Secretary of Public Highways and the General Manager of the Public Estates Authority
shall execute such contracts or agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as may be necessary to
implement the above.

Special land patent/patents shall be issued by the Secretary of Natural Resources in

favor of the Public Estates Authority without prejudice to the subsequent transfer to
the contractor or his assignees of such portion or portions of the land reclaimed or to
be reclaimed as provided for in the above-mentioned contract. On the basis of such
patents, the Land Registration Commission shall issue the corresponding certificate
of title." (Emphasis supplied)

On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall
be responsible for its administration, development, utilization or disposition in accordance
with the provisions of Presidential Decree No. 1084. Any and all income that the PEA may
derive from the sale, lease or use of reclaimed lands shall be used in accordance with the
provisions of Presidential Decree No. 1084."

There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed
lands. PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from
Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be
owned by PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed lands "in
accordance with the provisions of Presidential Decree No. 1084," the charter of PEA.

PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government."87 (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public
domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA
charter free from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial lands.

PEA may also sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition against such sales
and the constitutional ban does not apply to individuals. PEA, however, cannot sell any of its
alienable or disposable lands of the public domain to private corporations since Section 3, Article XII
of the 1987 Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable land of the public
domain, including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by
PEA to the "contractor or his assignees" (Emphasis supplied) would not apply to private corporations
but only to individuals because of the constitutional ban. Otherwise, the provisions of PD No. 1085
would violate both the 1973 and 1987 Constitutions.

The requirement of public auction in the sale of reclaimed lands

Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to conduct a
public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and
67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a
public auction.88 Special Patent No. 3517 expressly states that the patent is issued by authority of the
Constitution and PD No. 1084, "supplemented by Commonwealth Act No. 141, as amended." This is
an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed alienable
lands of the public domain unless otherwise provided by law. Executive Order No. 654, 89 which
authorizes PEA "to determine the kind and manner of payment for the transfer" of its assets and
properties, does not exempt PEA from the requirement of public auction. EO No. 654 merely
authorizes PEA to decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code,
the government is required to sell valuable government property through public bidding. Section 79
of PD No. 1445 mandates that –

"Section 79. When government property has become unserviceable for any cause, or is no

longer needed, it shall, upon application of the officer accountable therefor, be inspected by
the head of the agency or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsaleable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest
bidder under the supervision of the proper committee on award or similar body in the
presence of the auditor concerned or other authorized representative of the
Commission, after advertising by printed notice in the Official Gazette, or for not less
than three consecutive days in any newspaper of general circulation, or where the
value of the property does not warrant the expense of publication, by notices posted for a
like period in at least three public places in the locality where the property is to be sold. In
the event that the public auction fails, the property may be sold at a private sale at
such price as may be fixed by the same committee or body concerned and approved
by the Commission."

It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price.90 The Commission on Audit implements
Section 79 of the Government Auditing Code through Circular No. 89-296 91 dated January 27, 1989.
This circular emphasizes that government assets must be disposed of only through public auction,
and a negotiated sale can be resorted to only in case of "failure of public auction."

At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore
and submerged alienable lands of the public domain. Private corporations are barred from bidding at
the auction sale of any kind of alienable land of the public domain.

PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA
imposed a condition that the winning bidder should reclaim another 250 hectares of submerged
areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional
reclaimed areas in favor of the winning bidder. 92 No one, however, submitted a bid. On December
23, 1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands
through negotiation, without need of another public bidding, because of the failure of the public
bidding on December 10, 1991. 93

However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the
additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another
350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to 750
hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84 hectares, 95 is
not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly
auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than three
years before the signing of the original JVA on April 25, 1995. The economic situation in the country
had greatly improved during the intervening period.

Reclamation under the BOT Law and the Local Government Code

The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear:
"Private corporations or associations may not hold such alienable lands of the public domain except
by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as
legislative authority to sell reclaimed lands to private parties, recognizes the constitutional ban.
Section 6 of RA No. 6957 states –

"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance
of any infrastructure projects undertaken through the build-operate-and-transfer arrangement
or any of its variations pursuant to the provisions of this Act, the project proponent x x x may
likewise be repaid in the form of a share in the revenue of the project or other non-monetary
payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed
land, subject to the constitutional requirements with respect to the ownership of the
land: x x x." (Emphasis supplied)

A private corporation, even one that undertakes the physical reclamation of a government BOT
project, cannot acquire reclaimed alienable lands of the public domain in view of the constitutional
ban.

Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the contractor or developer in kind consisting of a
percentage of the reclaimed land, to wit:

"Section 302. Financing, Construction, Maintenance, Operation, and Management of

Infrastructure Projects by the Private Sector. x x x

xxx

In case of land reclamation or construction of industrial estates, the repayment plan may
consist of the grant of a portion or percentage of the reclaimed land or the industrial estate
constructed."

Although Section 302 of the Local Government Code does not contain a proviso similar to that of the
BOT Law, the constitutional restrictions on land ownership automatically apply even though not
expressly mentioned in the Local Government Code.

Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor
or developer is an individual, portions of the reclaimed land, not exceeding 12 hectares 96 of non-
agricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing
such conveyance. This is the only way these provisions of the BOT Law and the Local Government
Code can avoid a direct collision with Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." This theory is
echoed by AMARI which maintains that the "issuance of the special patent leading to the eventual
issuance of title takes the subject land away from the land of public domain and converts the
property into patrimonial or private property." In short, PEA and AMARI contend that with the
issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares
comprising the Freedom Islands have become private lands of PEA. In support of their theory, PEA
and AMARI cite the following rulings of the Court:

1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –

"Once the patent was granted and the corresponding certificate of title was issued, the land
ceased to be part of the public domain and became private property over which the Director
of Lands has neither control nor jurisdiction."

2. Lee Hong Hok v. David,98 where the Court declared -

"After the registration and issuance of the certificate and duplicate certificate of title based on
a public land patent, the land covered thereby automatically comes under the operation of
Republic Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco
v. Heirs of Jose Aliwalas,99 where the Court ruled -

"While the Director of Lands has the power to review homestead patents, he may do so only
so long as the land remains part of the public domain and continues to be under his
exclusive control; but once the patent is registered and a certificate of title is issued, the land
ceases to be part of the public domain and becomes private property over which the Director
of Lands has neither control nor jurisdiction."

4. Manalo v. Intermediate Appellate Court,100 where the Court held –

"When the lots in dispute were certified as disposable on May 19, 1971, and free patents
were issued covering the same in favor of the private respondents, the said lots ceased to be
part of the public domain and, therefore, the Director of Lands lost jurisdiction over the
same."

5.Republic v. Court of Appeals,101 where the Court stated –

"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a
land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of
Health, of the whole lot, validly sufficient for initial registration under the Land Registration
Act. Such land grant is constitutive of a 'fee simple' title or absolute title in favor of petitioner
Mindanao Medical Center. Thus, Section 122 of the Act, which governs the registration of
grants or patents involving public lands, provides that 'Whenever public lands in the
Philippine Islands belonging to the Government of the United States or to the Government of
the Philippines are alienated, granted or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under the operation of this Act (Land
Registration Act, Act 496) and shall become registered lands.'"

The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titles issued to private parties. These four cases uniformly hold that the Director of
Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land
automatically comes under the Torrens System. The fifth case cited involves the registration under
the Torrens System of a 12.8-hectare public land granted by the National Government to Mindanao
Medical Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the
registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section
122 of Act No. 496. This fifth case is an example of a public land being registered under Act No. 496
without the land losing its character as a property of public dominion.

In the instant case, the only patent and certificates of title issued are those in the name of PEA, a
wholly government owned corporation performing public as well as proprietary functions. No patent
or certificate of title has been issued to any private party. No one is asking the Director of Lands to
cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that PEA's
certificates of title should remain with PEA, and the land covered by these certificates, being
alienable lands of the public domain, should not be sold to a private corporation.

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or
public ownership of the land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized modes of acquiring ownership.
Registration does not give the registrant a better right than what the registrant had prior to the
registration.102 The registration of lands of the public domain under the Torrens system, by itself,
cannot convert public lands into private lands.103

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the
alienable land of the public domain automatically becomes private land cannot apply to government
units and entities like PEA. The transfer of the Freedom Islands to PEA was made subject to the
provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then President
Aquino, to wit:

"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and
in conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto
the Public Estates Authority the aforesaid tracts of land containing a total area of one million
nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part hereof."
(Emphasis supplied)

Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No.
1084. Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of
alienable lands of the public domain that are transferred to government units or entities. Section 60
of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of the
registered land even if not annotated on the certificate of title. 104 Alienable lands of the public domain
held by government entities under Section 60 of CA No. 141 remain public lands because they
cannot be alienated or encumbered unless Congress passes a law authorizing their disposition.
Congress, however, cannot authorize the sale to private corporations of reclaimed alienable lands of
the public domain because of the constitutional ban. Only individuals can benefit from such law.

The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141
does not automatically convert alienable lands of the public domain into private or patrimonial lands.
The alienable lands of the public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress can declare
lands of the public domain as private or patrimonial lands in the hands of a government agency
tasked to dispose of public lands. This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to such law, are concededly public lands.

Under EO No. 525, PEA became the central implementing agency of the National Government to
reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that –

"EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects

Whereas, there are several reclamation projects which are ongoing or being proposed to be
undertaken in various parts of the country which need to be evaluated for consistency with
national programs;

Whereas, there is a need to give further institutional support to the Government's declared
policy to provide for a coordinated, economical and efficient reclamation of lands;

Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited
to the National Government or any person authorized by it under proper contract;

Whereas, a central authority is needed to act on behalf of the National Government

which shall ensure a coordinated and integrated approach in the reclamation of lands;

Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests; and

Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions
and offices.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of

the powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416,
do hereby order and direct the following:

Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of
the National Government. All reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; Provided, that, reclamation projects of any
national government agency or entity authorized under its charter shall be undertaken in
consultation with the PEA upon approval of the President.

x x x ."

As the central implementing agency tasked to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged
with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or
sold by PEA are not private lands, in the same manner that DENR, when it disposes of other
alienable lands, does not dispose of private lands but alienable lands of the public domain. Only
when qualified private parties acquire these lands will the lands become private lands. In the hands
of the government agency tasked and authorized to dispose of alienable of disposable lands
of the public domain, these lands are still public, not private lands.

Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as
well as "any and all kinds of lands." PEA can hold both lands of the public domain and private lands.
Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are
transferred to PEA and issued land patents or certificates of title in PEA's name does not
automatically make such lands private.

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands
will sanction a gross violation of the constitutional ban on private corporations from acquiring any
kind of alienable land of the public domain. PEA will simply turn around, as PEA has now done
under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to
be reclaimed lands to a single private corporation in only one transaction. This scheme will
effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was
intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos,
now numbering over 80 million strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain
since PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to
corporations and even individuals acquiring hundreds of hectares of alienable lands of the public
domain under the guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country - creating the very evil
that the constitutional ban was designed to prevent. This will completely reverse the clear direction
of constitutional development in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands. 105 The 1973 Constitution prohibited private
corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally
reiterated this prohibition.

The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No.
1529, automatically become private lands is contrary to existing laws. Several laws authorize lands
of the public domain to be registered under the Torrens System or Act No. 496, now PD No. 1529,
without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD No.
1529, respectively, provide as follows:

Act No. 496

"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons or
the public or private corporations, the same shall be brought forthwith under the operation
of this Act and shall become registered lands."

PD No. 1529

"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith under the
operation of this Decree." (Emphasis supplied)

Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529
includes conveyances of public lands to public corporations.
Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or
branch or subdivision of the Government," as provided in Section 60 of CA No. 141, may be
registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration,
however, is expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress." This provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be alienated or encumbered unless
expressly authorized by Congress. The need for legislative authority prevents the registered land of
the public domain from becoming private land that can be disposed of to qualified private parties.

The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be
registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states –

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be executed
in behalf of the government by the following:

(1) x x x

(2) For property belonging to the Republic of the Philippines, but titled in the name of
any political subdivision or of any corporate agency or instrumentality, by the
executive head of the agency or instrumentality." (Emphasis supplied)

Thus, private property purchased by the National Government for expansion of a public wharf may
be titled in the name of a government corporation regulating port operations in the country. Private
property purchased by the National Government for expansion of an airport may also be titled in the
name of the government agency tasked to administer the airport. Private property donated to a
municipality for use as a town plaza or public school site may likewise be titled in the name of the
municipality.106 All these properties become properties of the public domain, and if already registered
under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in
any existing law for the de-registration of land from the Torrens System.

Private lands taken by the Government for public use under its power of eminent domain become
unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the
Register of Deeds to issue in the name of the National Government new certificates of title covering
such expropriated lands. Section 85 of PD No. 1529 states –

"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein,
is expropriated or taken by eminent domain, the National Government, province, city or
municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state definitely
by an adequate description, the particular property or interest expropriated, the number of
the certificate of title, and the nature of the public use. A memorandum of the right or interest
taken shall be made on each certificate of title by the Register of Deeds, and where the fee
simple is taken, a new certificate shall be issued in favor of the National Government,
province, city, municipality, or any other agency or instrumentality exercising such right for
the land so taken. The legal expenses incident to the memorandum of registration or
issuance of a new certificate of title shall be for the account of the authority taking the land or
interest therein." (Emphasis supplied)

Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands
or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint venture with a stipulation for reimbursement of the original
cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP
under its 1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture,
the fact remains that the Amended JVA requires PEA to "cause the issuance and delivery of the
certificates of title conveying AMARI's Land Share in the name of AMARI." 107

This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that
private corporations "shall not hold such alienable lands of the public domain except by lease." The
transfer of title and ownership to AMARI clearly means that AMARI will "hold" the reclaimed lands
other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a
transaction considered a sale or alienation under CA No. 141, 108 the Government Auditing
Code,109 and Section 3, Article XII of the 1987 Constitution.

The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas
form part of the public domain and are inalienable. Lands reclaimed from foreshore and submerged
areas also form part of the public domain and are also inalienable, unless converted pursuant to law
into alienable or disposable lands of the public domain. Historically, lands reclaimed by the
government are sui generis, not available for sale to private parties unlike other alienable public
lands. Reclaimed lands retain their inherent potential as areas for public use or public service.
Alienable lands of the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such equitable distribution, the
1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable
land of the public domain. Those who attempt to dispose of inalienable natural resources of the
State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to
private corporations, do so at their own risk.

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may
lease these lands to private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to
the ownership limitations in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open to
disposition and declared no longer needed for public service. The government can make
such classification and declaration only after PEA has reclaimed these submerged areas.
Only then can these lands qualify as agricultural lands of the public domain, which are the
only natural resources the government can alienate. In their present state, the 592.15
hectares of submerged areas are inalienable and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of
77.34 hectares110 of the Freedom Islands, such transfer is void for being contrary to Section
3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares111 of still submerged areas of Manila Bay, such transfer is void for being contrary to
Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural
 resources other than agricultural lands of the public domain. PEA may reclaim these
submerged areas. Thereafter, the government can classify the reclaimed lands as alienable
or disposable, and further declare them no longer needed for public service. Still, the transfer
of such reclaimed alienable lands of the public domain to AMARI will be void in view of
Section 3, Article XII of the 1987 Constitution which prohibits private corporations from
acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution.
Under Article 1409112 of the Civil Code, contracts whose "object or purpose is contrary to law," or
whose "object is outside the commerce of men," are "inexistent and void from the beginning." The
Court must perform its duty to defend and uphold the Constitution, and therefore declares the
Amended JVA null and void ab initio.

Seventh issue: whether the Court is the proper forum to raise the issue of whether the
Amended JVA is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last
issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of factual
matters.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
Venture Agreement which is hereby declared NULL and VOID ab initio.

SO ORDERED.
GLORIA MACAPAGAL-ARROYO,Petitioner,

-versus-

Hon. LEILA M. DE LIMA, in her

capacity as Secretary of the Department

of Justice and RICARDO A. DAVID,

JR., in his capacity as Commissioner of

the Bureau of Immigration,

Respondents.

X- – – – – – – – – – – – – – – – – – – – – – – -X
JOSE MIGUEL T. ARROYO,Petitioner,

-versus-

Hon. LEILA M. DE LIMA, in her

capacity as Secretary, Department of

Justice, RICARDO V. PARAS III, in

his capacity as Chief State Counsel,

Department of Justice and RICARDO

A. DAVID, JR., in his capacity as

Commissioner, Bureau of Immigration,

Respondents.

X- – – – – – – – – – – – – – – – – – – – – – – -X
TO: Hon. LEILA M. DE LIMASecretary

RICARDO V. PARAS III

Chief State Counsel

Department of Justice (DOJ)

Padre Faura St., Ermita, Manila

RICARDO A. DAVID, JR.

Commissioner

Bureau of Immigration (BOI)

2nd Floor BOI Building

Magallanes Drive, Intramuros, Manila

GREETINGS:

WHEREAS, the Supreme Court, on November 15, 2011, adopted a resolution in the
above-entitled cases, to wit:

G.R. No. 199034 (Gloria Macapagal-Arroyo vs. Hon. Leila M. De Lima, in her capacity as
Secretary of the Department of Justice and Ricardo A. David, Jr., in his capacity as
Commissioner of the Bureau of Immigration) and G.R. No. 199046 (Jose Miguel T.
Arroyo vs. Hon. Leila M. de Lima, in her capacity as Secretary, Department of Justice,
Ricardo V. Paras III, in his capacity as Chief State Counsel, Department of Justice and
Ricardo A. David, Jr., in his capacity as Commissioner, Bureau of Immigration).- Acting
on the Special Civil Actions for Certiorari and Prohibition with Prayer for the Issuance of
a Temporary Restraining Order and/or Writ of Preliminary Injunction, and mindful of the
underlying issues in the cases—the right to life (which is the highest right under the
Constitution) and its supporting rights, including the right to travel—the Court Resolved
to

(a) CONSOLIDATE the above-entitled cases;

(b) REQUIRE the respondents to COMMENT on the consolidated petitions NOT LATER

THAN NOVEMBER 18, 2011;

(c) ISSUE a TEMPORARY RESTRAINING ORDER in the consolidated petitions, enjoining

the respondents from enforcing or implementing DOJ Department Circular No. 41 and
Watchlist Order Nos. ASM-11-237 dated August 9, 2011, 2011-422 dated September 6,
2011 and 2011-573 dated October 27, 2011, subject to the following conditions:

(i) The petitioners shall post a cash bond of Two Million Pesos (P2,000,000.00) payable
to this Court within five (5) days from notice hereof. Failure to post the bond within the
aforesaid period will result in the automatic lifting of the temporary restraining order;
(ii) The petitioners shall appoint a legal representative common to both of them who will
receive subpoena, orders and other legal processes on their behalf during their absence.
The petitioners shall submit the name of the legal representative, also within five (5)
days from notice hereof; and

(iii) If there is a Philippine embassy or consulate in the place where they will be traveling,
the petitioners shall inform said embassy or consulate by personal appearance or by
phone of their whereabouts at all times; and

(d) SET the consolidated cases for ORAL ARGUMENTS on November 22, 2011,

Tuesday, at 2:00 p.m. at the New Session Hall, New Supreme Court Building, Padre
Faura, Ermita, Manila.

The Court further Resolved to NOTE the

(a) Very Urgent Manifestation and Motion dated November 9, 2011 filed by the Office of
the Solicitor General (OSG) for respondents Hon. Leila M. De Lima, in her official
capacity as Secretary of the Department of Justice and Ricardo A. David, Jr., in his
capacity as Commissioner of the Bureau of Immigration in G.R. No. 199034;

(b) Manifestation and Motion dated November 10, 2011 filed by the OSG for
respondents Hon. Leila M. De Lima and Ricardo A. David, Jr. in G.R. No. 199034;

(c) Supplemental Petition dated November 13, 2011 filed by counsel for petitioner in
G.R. No. 199034;

(d) Comment/Opposition (on/to the Very Urgent Manifestation and Motion dated
November 9, 2011) dated November 14, 2011 filed by counsel for petitioner in G.R. No.
199034;

(e) Very Urgent Manifestation and Motion dated November 9, 2011 filed by the OSG for
respondents Hon. Leila M. de Lima, in her capacity as Secretary of the Department of
Justice, Ricardo V. Paras III, in his capacity as Chief State Counsel and Ricardo A. David,
Jr., in his capacity as Commissioner of the Bureau of Immigration in G.R. No. 199046;
and

(f) Urgent Manifestation filed by counsel for petitioner in G.R. No. 199046.

The temporary restraining order shall be immediately executory. Justices Antonio T.

Carpio and Bienvenido L. Reyes have reserved the right to submit their dissenting
opinions. Leonardo-De Castro, J., on official business. Del Castillo, J., on official leave.
(adv156 & 157)
NOW, THEREFORE, effective immediately and continuing until further orders from this
Court, You, Respondents, your agents, representatives, or persons acting in your place
or stead, are hereby ENJOINED from enforcing or implementing DOJ Department
Circular No. 41 and Watchlist Order Nos. ASM-11-237 dated August 9, 2011, 2011-422
dated September 6, 2011 and 2011-573 dated October 27, 2011.
Senate v. Ermita, G.R. No. 169777, April 20,
2006
April 20, 2006

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 169777*             April 20, 2006

SENATE OF THE PHILIPPINES, represented by FRANKLIN M. DRILON, in his

capacity as Senate President, JUAN M. FLAVIER, in his capacity as Senate President Pro
Tempore, FRANCIS N. PANGILINAN, in his capacity as Majority Leader, AQUILINO Q.
PIMENTEL, JR., in his capacity as Minority Leader, SENATORS RODOLFO G.
BIAZON, “COMPANERA” PIA S. CAYETANO, JINGGOY EJERCITO ESTRADA,
LUISA “LOI” EJERCITO ESTRADA, JUAN PONCE ENRILE, RICHARD J. GORDON,
PANFILO M. LACSON, ALFREDO S.LIM, M. A. MADRIGAL, SERGIO OSMENA III,
RALPH G. RECTO, and MAR ROXAS, Petitioners,
vs.
EDUARDO R. ERMITA, in his capacity as Executive Secretary and alter-ego of President
Gloria Macapagal-Arroyo, and anyone acting in his stead and in behalf of the President of
the Philippines, Respondents.

x————————-x

G.R. No. 169659             April 20, 2006

BAYAN MUNA represented by DR. REYNALDO LESACA, JR., Rep. SATUR OCAMPO,
Rep. CRISPIN BELTRAN, Rep. RAFAEL MARIANO, Rep. LIZA MAZA, Rep.
TEODORO CASINO, Rep. JOEL VIRADOR, COURAGE represented by FERDINAND
GAITE, and COUNSELS FOR THE DEFENSE OF LIBERTIES (CODAL) represented by
ATTY. REMEDIOS BALBIN, Petitioners,
vs.
EDUARDO ERMITA, in his capacity as Executive Secretary and alter-ego of President
Gloria Macapagal-Arroyo, Respondent.

x————————-x

G.R. No. 169660             April 20, 2006

FRANCISCO I. CHAVEZ, Petitioner,
vs.
EDUARDO R. ERMITA, in his capacity as Executive Secretary, AVELINO J. CRUZ, JR.,
in his capacity as Secretary of Defense, and GENEROSO S. SENGA, in his capacity as
AFP Chief of Staff, Respondents.

x————————-x

G.R. No. 169667             April 20, 2006

ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner,

vs.
HON. EDUARDO R. ERMITA, in his capacity as Executive Secretary, Respondent.

x————————-x

G.R. No. 169834             April 20, 2006

PDP- LABAN, Petitioner,
vs.
EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent.

x————————-x

G.R. No. 171246             April 20, 2006

JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE

AMOR AMORANDO, ALICIA A. RISOS-VIDAL, FILEMON C. ABELITA III,
MANUEL P. LEGASPI, J. B. JOVY C. BERNABE, BERNARD L. DAGCUTA,
ROGELIO V. GARCIA, and the INTEGRATED BAR FOR THE
PHILIPPINES, Petitioners,
vs.
HON. EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent.

DECISION

CARPIO MORALES, J.:

A transparent government is one of the hallmarks of a truly republican state. Even in the early
history of republican thought, however, it has been recognized that the head of government may
keep certain information confidential in pursuit of the public interest. Explaining the reason for
vesting executive power in only one magistrate, a distinguished delegate to the U.S.
Constitutional Convention said: “Decision, activity, secrecy, and dispatch will generally
characterize the proceedings of one man, in a much more eminent degree than the proceedings of
any greater number; and in proportion as the number is increased, these qualities will be
diminished.”1
History has been witness, however, to the fact that the power to withhold information lends itself
to abuse, hence, the necessity to guard it zealously.

The present consolidated petitions for certiorari and prohibition proffer that the President has
abused such power by issuing Executive Order No. 464 (E.O. 464) last September 28, 2005.
They thus pray for its declaration as null and void for being unconstitutional.

In resolving the controversy, this Court shall proceed with the recognition that the issuance under
review has come from a co-equal branch of government, which thus entitles it to a strong
presumption of constitutionality. Once the challenged order is found to be indeed violative of the
Constitution, it is duty-bound to declare it so. For the Constitution, being the highest expression
of the sovereign will of the Filipino people, must prevail over any issuance of the government
that contravenes its mandates.

In the exercise of its legislative power, the Senate of the Philippines, through its various Senate
Committees, conducts inquiries or investigations in aid of legislation which call for, inter alia,
the attendance of officials and employees of the executive department, bureaus, and offices
including those employed in Government Owned and Controlled Corporations, the Armed
Forces of the Philippines (AFP), and the Philippine National Police (PNP).

On September 21 to 23, 2005, the Committee of the Senate as a whole issued invitations to
various officials of the Executive Department for them to appear on September 29, 2005 as
resource speakers in a public hearing on the railway project of the North Luzon Railways
Corporation with the China National Machinery and Equipment Group (hereinafter North Rail
Project). The public hearing was sparked by a privilege speech of Senator Juan Ponce Enrile
urging the Senate to investigate the alleged overpricing and other unlawful provisions of the
contract covering the North Rail Project.

The Senate Committee on National Defense and Security likewise issued invitations 2 dated
September 22, 2005 to the following officials of the AFP: the Commanding General of the
Philippine Army, Lt. Gen. Hermogenes C. Esperon; Inspector General of the AFP Vice Admiral
Mateo M. Mayuga; Deputy Chief of Staff for Intelligence of the AFP Rear Admiral Tirso R.
Danga; Chief of the Intelligence Service of the AFP Brig. Gen. Marlu Q. Quevedo; Assistant
Superintendent of the Philippine Military Academy (PMA) Brig. Gen. Francisco V. Gudani; and
Assistant Commandant, Corps of Cadets of the PMA, Col. Alexander F. Balutan, for them to
attend as resource persons in a public hearing scheduled on September 28, 2005 on the
following: (1) Privilege Speech of Senator Aquilino Q. Pimentel Jr., delivered on June 6, 2005
entitled “Bunye has Provided Smoking Gun or has Opened a Can of Worms that Show Massive
Electoral Fraud in the Presidential Election of May 2005”; (2) Privilege Speech of Senator
Jinggoy E. Estrada delivered on July 26, 2005 entitled “The Philippines as the Wire-Tapping
Capital of the World”; (3) Privilege Speech of Senator Rodolfo Biazon delivered on August 1,
2005 entitled “Clear and Present Danger”; (4) Senate Resolution No. 285 filed by Senator Maria
Ana Consuelo Madrigal—Resolution Directing the Committee on National Defense and Security
to Conduct an Inquiry, in Aid of Legislation, and in the National Interest, on the Role of the
Military in the So-called “Gloriagate Scandal”; and (5) Senate Resolution No. 295 filed by
Senator Biazon—Resolution Directing the Committee on National Defense and Security to
Conduct an Inquiry, in Aid of Legislation, on the Wire-Tapping of the President of the
Philippines.

Also invited to the above-said hearing scheduled on September 28 2005 was the AFP Chief of
Staff, General Generoso S. Senga who, by letter 3 dated September 27, 2005, requested for its
postponement “due to a pressing operational situation that demands [his utmost personal
attention” while “some of the invited AFP officers are currently attending to other urgent
operational matters.”

On September 28, 2005, Senate President Franklin M. Drilon received from Executive Secretary
Eduardo R. Ermita a letter4 dated September 27, 2005 “respectfully request[ing] for the
postponement of the hearing [regarding the NorthRail project] to which various officials of the
Executive Department have been invited” in order to “afford said officials ample time and
opportunity to study and prepare for the various issues so that they may better enlighten the
Senate Committee on its investigation.”

Senate President Drilon, however, wrote5 Executive Secretary Ermita that the Senators “are
unable to accede to [his request]” as it “was sent belatedly” and “[a]ll preparations and
arrangements as well as notices to all resource persons were completed [the previous] week.”

Senate President Drilon likewise received on September 28, 2005 a letter 6 from the President of
the North Luzon Railways Corporation Jose L. Cortes, Jr. requesting that the hearing on the
NorthRail project be postponed or cancelled until a copy of the report of the UP Law Center on
the contract agreements relative to the project had been secured.

On September 28, 2005, the President issued E.O. 464, “Ensuring Observance of the Principle of
Separation of Powers, Adherence to the Rule on Executive Privilege and Respect for the Rights
of Public Officials Appearing in Legislative Inquiries in Aid of Legislation Under the
Constitution, and For Other Purposes,”7 which, pursuant to Section 6 thereof, took effect
immediately. The salient provisions of the Order are as follows:

SECTION 1. Appearance by Heads of Departments Before Congress. – In accordance with

Article VI, Section 22 of the Constitution and to implement the Constitutional provisions on the
separation of powers between co-equal branches of the government, all heads of departments of
the Executive Branch of the government shall secure the consent of the President prior to
appearing before either House of Congress.

When the security of the State or the public interest so requires and the President so states in
writing, the appearance shall only be conducted in executive session.

SECTION. 2. Nature, Scope and Coverage of Executive Privilege. –

(a) Nature and Scope. – The rule of confidentiality based on executive privilege is fundamental
to the operation of government and rooted in the separation of powers under the Constitution
(Almonte vs. Vasquez, G.R. No. 95367, 23 May 1995). Further, Republic Act No. 6713 or the
Code of Conduct and Ethical Standards for Public Officials and Employees provides that Public
Officials and Employees shall not use or divulge confidential or classified information officially
known to them by reason of their office and not made available to the public to prejudice the
public interest.

Executive privilege covers all confidential or classified information between the President and
the public officers covered by this executive order, including:

Conversations and correspondence between the President and the public official covered by this
executive order (Almonte vs. Vasquez G.R. No. 95367, 23 May 1995; Chavez v. Public Estates
Authority, G.R. No. 133250, 9 July 2002);

Military, diplomatic and other national security matters which in the interest of national security
should not be divulged (Almonte vs. Vasquez, G.R. No. 95367, 23 May 1995; Chavez v.
Presidential Commission on Good Government, G.R. No. 130716, 9 December 1998).

Information between inter-government agencies prior to the conclusion of treaties and executive
agreements (Chavez v. Presidential Commission on Good Government, G.R. No. 130716, 9
December 1998);

Discussion in close-door Cabinet meetings (Chavez v. Presidential Commission on Good

Government, G.R. No. 130716, 9 December 1998);

Matters affecting national security and public order (Chavez v. Public Estates Authority, G.R.
No. 133250, 9 July 2002).

(b) Who are covered. – The following are covered by this executive order:

Senior officials of executive departments who in the judgment of the department heads are
covered by the executive privilege;

Generals and flag officers of the Armed Forces of the Philippines and such other officers who in
the judgment of the Chief of Staff are covered by the executive privilege;

Philippine National Police (PNP) officers with rank of chief superintendent or higher and such
other officers who in the judgment of the Chief of the PNP are covered by the executive
privilege;

Senior national security officials who in the judgment of the National Security Adviser are
covered by the executive privilege; and

Such other officers as may be determined by the President.

SECTION 3. Appearance of Other Public Officials Before Congress. – All public officials
enumerated in Section 2 (b) hereof shall secure prior consent of the President prior to appearing
before either House of Congress to ensure the observance of the principle of separation of
powers, adherence to the rule on executive privilege and respect for the rights of public officials
appearing in inquiries in aid of legislation. (Emphasis and underscoring supplied)

Also on September 28, 2005, Senate President Drilon received from Executive Secretary Ermita
a copy of E.O. 464, and another letter 8 informing him “that officials of the Executive Department
invited to appear at the meeting [regarding the NorthRail project] will not be able to attend the
same without the consent of the President, pursuant to [E.O. 464]” and that “said officials have
not secured the required consent from the President.” On even date which was also the scheduled
date of the hearing on the alleged wiretapping, Gen. Senga sent a letter9 to Senator Biazon,
Chairperson of the Committee on National Defense and Security, informing him “that per
instruction of [President Arroyo], thru the Secretary of National Defense, no officer of the [AFP]
is authorized to appear before any Senate or Congressional hearings without seeking a written
approval from the President” and “that no approval has been granted by the President to any AFP
officer to appear before the public hearing of the Senate Committee on National Defense and
Security scheduled [on] 28 September 2005.”

Despite the communications received from Executive Secretary Ermita and Gen. Senga, the
investigation scheduled by the Committee on National Defense and Security pushed through,
with only Col. Balutan and Brig. Gen. Gudani among all the AFP officials invited attending.

For defying President Arroyo’s order barring military personnel from testifying before legislative
inquiries without her approval, Brig. Gen. Gudani and Col. Balutan were relieved from their
military posts and were made to face court martial proceedings.

As to the NorthRail project hearing scheduled on September 29, 2005, Executive Secretary
Ermita, citing E.O. 464, sent letter of regrets, in response to the invitations sent to the following
government officials: Light Railway Transit Authority Administrator Melquiades Robles, Metro
Rail Transit Authority Administrator Roberto Lastimoso, Department of Justice (DOJ) Chief
State Counsel Ricardo V. Perez, then Presidential Legal Counsel Merceditas Gutierrez,
Department of Transportation and Communication (DOTC) Undersecretary Guiling
Mamonding, DOTC Secretary Leandro Mendoza, Philippine National Railways General
Manager Jose Serase II, Monetary Board Member Juanita Amatong, Bases Conversion
Development Authority Chairperson Gen. Narciso Abaya and Secretary Romulo L.
Neri.10NorthRail President Cortes sent personal regrets likewise citing E.O. 464.11

On October 3, 2005, three petitions, docketed as G.R. Nos. 169659, 169660, and 169667, for
certiorari and prohibition, were filed before this Court challenging the constitutionality of E.O.
464.

In G.R. No. 169659, petitioners party-list Bayan Muna, House of Representatives Members
SaturOcampo, Crispin Beltran, Rafael Mariano, Liza Maza, Joel Virador and Teodoro Casino,
Courage, an organization of government employees, and Counsels for the Defense of Liberties
(CODAL), a group of lawyers dedicated to the promotion of justice, democracy and peace, all
claiming to have standing to file the suit because of the transcendental importance of the issues
they posed, pray, in their petition that E.O. 464 be declared null and void for being
unconstitutional; that respondent Executive Secretary Ermita, in his capacity as Executive
Secretary and alter-ego of President Arroyo, be prohibited from imposing, and threatening to
impose sanctions on officials who appear before Congress due to congressional summons.
Additionally, petitioners claim that E.O. 464 infringes on their rights and impedes them from
fulfilling their respective obligations. Thus, Bayan Muna alleges that E.O. 464 infringes on its
right as a political party entitled to participate in governance; SaturOcampo, et al. allege that
E.O. 464 infringes on their rights and duties as members of Congress to conduct investigation in
aid of legislation and conduct oversight functions in the implementation of laws; Courage alleges
that the tenure of its members in public office is predicated on, and threatened by, their
submission to the requirements of E.O. 464 should they be summoned by Congress; and CODAL
alleges that its members have a sworn duty to uphold the rule of law, and their rights to
information and to transparent governance are threatened by the imposition of E.O. 464.

In G.R. No. 169660, petitioner Francisco I. Chavez, claiming that his constitutional rights as a
citizen, taxpayer and law practitioner, are affected by the enforcement of E.O. 464, prays in his
petition that E.O. 464 be declared null and void for being unconstitutional.

In G.R. No. 169667, petitioner Alternative Law Groups, Inc. 12 (ALG), alleging that as a coalition
of 17 legal resource non-governmental organizations engaged in developmental lawyering and
work with the poor and marginalized sectors in different parts of the country, and as an
organization of citizens of the Philippines and a part of the general public, it has legal standing to
institute the petition to enforce its constitutional right to information on matters of public
concern, a right which was denied to the public by E.O. 464, 13 prays, that said order be declared
null and void for being unconstitutional and that respondent Executive Secretary Ermita be
ordered to cease from implementing it.

On October 11, 2005, Petitioner Senate of the Philippines, alleging that it has a vital interest in
the resolution of the issue of the validity of E.O. 464 for it stands to suffer imminent and material
injury, as it has already sustained the same with its continued enforcement since it directly
interferes with and impedes the valid exercise of the Senate’s powers and functions and conceals
information of great public interest and concern, filed its petition for certiorari and prohibition,
docketed as G.R. No. 169777 and prays that E.O. 464 be declared unconstitutional.

On October 14, 2005, PDP-Laban, a registered political party with members duly elected into the
Philippine Senate and House of Representatives, filed a similar petition for certiorari and
prohibition, docketed as G.R. No. 169834, alleging that it is affected by the challenged E.O. 464
because it hampers its legislative agenda to be implemented through its members in Congress,
particularly in the conduct of inquiries in aid of legislation and transcendental issues need to be
resolved to avert a constitutional crisis between the executive and legislative branches of the
government.

Meanwhile, by letter14 dated February 6, 2006, Senator Biazon reiterated his invitation to Gen.
Senga for him and other military officers to attend the hearing on the alleged wiretapping
scheduled on February 10, 2005. Gen. Senga replied, however, by letter 15 dated February 8,
2006, that “[p]ursuant to Executive Order No. 464, th[e] Headquarters requested for a clearance
from the President to allow [them] to appear before the public hearing” and that “they will attend
once [their] request is approved by the President.” As none of those invited appeared, the hearing
on February 10, 2006 was cancelled.16

In another investigation conducted jointly by the Senate Committee on Agriculture and Food and
the Blue Ribbon Committee on the alleged mismanagement and use of the fertilizer fund under
the GinintuangMasaganangAni program of the Department of Agriculture (DA), several Cabinet
officials were invited to the hearings scheduled on October 5 and 26, November 24 and
December 12, 2005 but most of them failed to attend, DA Undersecretary Belinda Gonzales, DA
Assistant Secretary Felix Jose Montes, Fertilizer and Pesticide Authority Executive Director
Norlito R. Gicana,17 and those from the Department of Budget and Management 18 having
invoked E.O. 464.

In the budget hearings set by the Senate on February 8 and 13, 2006, Press Secretary and
Presidential Spokesperson Ignacio R. Bunye,19 DOJ Secretary Raul M. Gonzalez20 and
Department of Interior and Local Government Undersecretary Marius P. Corpus 21 communicated
their inability to attend due to lack of appropriate clearance from the President pursuant to E.O.
464. During the February 13, 2005 budget hearing, however, Secretary Bunye was allowed to
attend by Executive Secretary Ermita.

On February 13, 2006, Jose Anselmo I. Cadiz and the incumbent members of the Board of
Governors of the Integrated Bar of the Philippines, as taxpayers, and the Integrated Bar of the
Philippines as the official organization of all Philippine lawyers, all invoking their constitutional
right to be informed on matters of public interest, filed their petition for certiorari and
prohibition, docketed as G.R. No. 171246, and pray that E.O. 464 be declared null and void.

All the petitions pray for the issuance of a Temporary Restraining Order enjoining respondents
from implementing, enforcing, and observing E.O. 464.

In the oral arguments on the petitions conducted on February 21, 2006, the following substantive
issues were ventilated: (1) whether respondents committed grave abuse of discretion in
implementing E.O. 464 prior to its publication in the Official Gazette or in a newspaper of
general circulation; and (2) whether E.O. 464 violates the following provisions of the
Constitution: Art. II, Sec. 28, Art. III, Sec. 4, Art. III, Sec. 7, Art. IV. Sec. 1, Art. VI, Sec. 21,
Art. VI, Sec. 22, Art. XI, Sec. 1, and Art. XIII, Sec. 16. The procedural issue of whether there is
an actual case or controversy that calls for judicial review was not taken up; instead, the parties
were instructed to discuss it in their respective memoranda.

After the conclusion of the oral arguments, the parties were directed to submit their respective
memoranda, paying particular attention to the following propositions: (1) that E.O. 464 is, on its
face, unconstitutional; and (2) assuming that it is not, it is unconstitutional as applied in four
instances, namely: (a) the so called Fertilizer scam; (b) the NorthRail investigation (c) the
Wiretapping activity of the ISAFP; and (d) the investigation on the Venable contract.22

Petitioners in G.R. No. 16966023 and G.R. No. 16977724 filed their memoranda on March 7,
2006, while those in G.R. No. 169667 25 and G.R. No. 16983426 filed theirs the next day or on
March 8, 2006. Petitioners in G.R. No. 171246 did not file any memorandum.
Petitioners Bayan Muna et al. in G.R. No. 169659, after their motion for extension to file
memorandum27 was granted, subsequently filed a manifestation28 dated March 14, 2006 that it
would no longer file its memorandum in the interest of having the issues resolved soonest,
prompting this Court to issue a Resolution reprimanding them.29

Petitioners submit that E.O. 464 violates the following constitutional provisions:

Art. VI, Sec. 2130

Art. VI, Sec. 2231

Art. VI, Sec. 132

Art. XI, Sec. 133

Art. III, Sec. 734

Art. III, Sec. 435

Art. XIII, Sec. 16 36

Art. II, Sec. 2837

Respondents Executive Secretary Ermita et al., on the other hand, pray in their consolidated
memorandum38 on March 13, 2006 for the dismissal of the petitions for lack of merit.

The Court synthesizes the issues to be resolved as follows:

1. Whether E.O. 464 contravenes the power of inquiry vested in Congress;

2. Whether E.O. 464 violates the right of the people to information on matters of public concern;
and

3. Whether respondents have committed grave abuse of discretion when they implemented E.O.
464 prior to its publication in a newspaper of general circulation.

Essential requisites for judicial review

Before proceeding to resolve the issue of the constitutionality of E.O. 464, ascertainment of
whether the requisites for a valid exercise of the Court’s power of judicial review are present is
in order.

Like almost all powers conferred by the Constitution, the power of judicial review is subject to
limitations, to wit: (1) there must be an actual case or controversy calling for the exercise of
judicial power; (2) the person challenging the act must have standing to challenge the validity of
the subject act or issuance; otherwise stated, he must have a personal and substantial interest in
the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3)
the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of
constitutionality must be the very lismota of the case.39

Except with respect to the requisites of standing and existence of an actual case or controversy
where the disagreement between the parties lies, discussion of the rest of the requisites shall be
omitted.

Standing

Respondents, through the Solicitor General, assert that the allegations in G.R. Nos. 169659,
169660 and 169667 make it clear that they, adverting to the non-appearance of several officials
of the executive department in the investigations called by the different committees of the
Senate, were brought to vindicate the constitutional duty of the Senate or its different committees
to conduct inquiry in aid of legislation or in the exercise of its oversight functions. They maintain
that Representatives Ocampo et al. have not shown any specific prerogative, power, and
privilege of the House of Representatives which had been effectively impaired by E.O. 464,
there being no mention of any investigation called by the House of Representatives or any of its
committees which was aborted due to the implementation of E.O. 464.

As for Bayan Muna’s alleged interest as a party-list representing the marginalized and
underrepresented, and that of the other petitioner groups and individuals who profess to have
standing as advocates and defenders of the Constitution, respondents contend that such interest
falls short of that required to confer standing on them as parties “injured-in-fact.”40

Respecting petitioner Chavez, respondents contend that Chavez may not claim an interest as a
taxpayer for the implementation of E.O. 464 does not involve the exercise of taxing or spending
power.41

With regard to the petition filed by the Senate, respondents argue that in the absence of a
personal or direct injury by reason of the issuance of E.O. 464, the Senate and its individual
members are not the proper parties to assail the constitutionality of E.O. 464.

Invoking this Court’s ruling in National Economic Protectionism Association v. Ongpin 42 and
Valmonte v. Philippine Charity Sweepstakes Office, 43 respondents assert that to be considered a
proper party, one must have a personal and substantial interest in the case, such that he has
sustained or will sustain direct injury due to the enforcement of E.O. 464.44

That the Senate of the Philippines has a fundamental right essential not only for intelligent public
decision-making in a democratic system, but more especially for sound legislation 45 is not
disputed. E.O. 464, however, allegedly stifles the ability of the members of Congress to access
information that is crucial to law-making.46 Verily, the Senate, including its individual members,
has a substantial and direct interest over the outcome of the controversy and is the proper party to
assail the constitutionality of E.O. 464. Indeed, legislators have standing to maintain inviolate the
prerogative, powers and privileges vested by the Constitution in their office and are allowed to
sue to question the validity of any official action which they claim infringes their prerogatives as
legislators.47

In the same vein, party-list representatives SaturOcampo (Bayan Muna), Teodoro Casino (Bayan
Muna), Joel Virador (Bayan Muna), Crispin Beltran (Anakpawis), Rafael Mariano (Anakpawis),
and Liza Maza (Gabriela) are allowed to sue to question the constitutionality of E.O. 464, the
absence of any claim that an investigation called by the House of Representatives or any of its
committees was aborted due to the implementation of E.O. 464 notwithstanding, it being
sufficient that a claim is made that E.O. 464 infringes on their constitutional rights and duties as
members of Congress to conduct investigation in aid of legislation and conduct oversight
functions in the implementation of laws.

The national political party, Bayan Muna, likewise meets the standing requirement as it obtained
three seats in the House of Representatives in the 2004 elections and is, therefore, entitled to
participate in the legislative process consonant with the declared policy underlying the party list
system of affording citizens belonging to marginalized and underrepresented sectors,
organizations and parties who lack well-defined political constituencies to contribute to the
formulation and enactment of legislation that will benefit the nation.48

As Bayan Muna and Representatives Ocampo et al. have the standing to file their petitions,
passing on the standing of their co-petitioners Courage and Codal is rendered unnecessary.49

In filing their respective petitions, Chavez, the ALG which claims to be an organization of
citizens, and the incumbent members of the IBP Board of Governors and the IBP in behalf of its
lawyer members,50 invoke their constitutional right to information on matters of public concern,
asserting that the right to information, curtailed and violated by E.O. 464, is essential to the
effective exercise of other constitutional rights51 and to the maintenance of the balance of power
among the three branches of the government through the principle of checks and balances.52

It is well-settled that when suing as a citizen, the interest of the petitioner in assailing the
constitutionality of laws, presidential decrees, orders, and other regulations, must be direct and
personal. In Franciso v. House of Representatives, 53 this Court held that when the proceeding
involves the assertion of a public right, the mere fact that he is a citizen satisfies the requirement
of personal interest.

As for petitioner PDP-Laban, it asseverates that it is clothed with legal standing in view of the
transcendental issues raised in its petition which this Court needs to resolve in order to avert a
constitutional crisis. For it to be accorded standing on the ground of transcendental importance,
however, it must establish (1) the character of the funds (that it is public) or other assets involved
in the case, (2) the presence of a clear case of disregard of a constitutional or statutory
prohibition by the public respondent agency or instrumentality of the government, and (3) the
lack of any party with a more direct and specific interest in raising the questions being
raised.54 The first and last determinants not being present as no public funds or assets are
involved and petitioners in G.R. Nos. 169777 and 169659 have direct and specific interests in the
resolution of the controversy, petitioner PDP-Laban is bereft of standing to file its petition. Its
allegation that E.O. 464 hampers its legislative agenda is vague and uncertain, and at best is only
a “generalized interest” which it shares with the rest of the political parties. Concrete injury,
whether actual or threatened, is that indispensable element of a dispute which serves in part to
cast it in a form traditionally capable of judicial resolution. 55 In fine, PDP-Laban’s alleged
interest as a political party does not suffice to clothe it with legal standing.

Actual Case or Controversy

Petitioners assert that an actual case exists, they citing the absence of the executive officials
invited by the Senate to its hearings after the issuance of E.O. 464, particularly those on the
NorthRail project and the wiretapping controversy.

Respondents counter that there is no case or controversy, there being no showing that President
Arroyo has actually withheld her consent or prohibited the appearance of the invited
officials.56 These officials, they claim, merely communicated to the Senate that they have not yet
secured the consent of the President, not that the President prohibited their
attendance.57 Specifically with regard to the AFP officers who did not attend the hearing on
September 28, 2005, respondents claim that the instruction not to attend without the President’s
consent was based on its role as Commander-in-Chief of the Armed Forces, not on E.O. 464.

Respondents thus conclude that the petitions merely rest on an unfounded apprehension that the
President will abuse its power of preventing the appearance of officials before Congress, and that
such apprehension is not sufficient for challenging the validity of E.O. 464.

The Court finds respondents’ assertion that the President has not withheld her consent or
prohibited the appearance of the officials concerned immaterial in determining the existence of
an actual case or controversy insofar as E.O. 464 is concerned. For E.O. 464 does not require
either a deliberate withholding of consent or an express prohibition issuing from the President in
order to bar officials from appearing before Congress.

As the implementation of the challenged order has already resulted in the absence of officials
invited to the hearings of petitioner Senate of the Philippines, it would make no sense to wait for
any further event before considering the present case ripe for adjudication. Indeed, it would be
sheer abandonment of duty if this Court would now refrain from passing on the constitutionality
of E.O. 464.

Constitutionality of E.O. 464

E.O. 464, to the extent that it bars the appearance of executive officials before Congress,
deprives Congress of the information in the possession of these officials. To resolve the question
of whether such withholding of information violates the Constitution, consideration of the
general power of Congress to obtain information, otherwise known as the power of inquiry, is in
order.

The power of inquiry

The Congress power of inquiry is expressly recognized in Section 21 of Article VI of the
Constitution which reads:

SECTION 21. The Senate or the House of Representatives or any of its respective committees
may conduct inquiries in aid of legislation in accordance with its duly published rules of
procedure. The rights of persons appearing in or affected by such inquiries shall be respected.
(Underscoring supplied)

This provision is worded exactly as Section 8 of Article VIII of the 1973 Constitution except
that, in the latter, it vests the power of inquiry in the unicameral legislature established therein—
the BatasangPambansa—and its committees.

The 1935 Constitution did not contain a similar provision. Nonetheless, in Arnault v.
Nazareno,58 a case decided in 1950 under that Constitution, the Court already recognized that the
power of inquiry is inherent in the power to legislate.

Arnault involved a Senate investigation of the reportedly anomalous purchase of the Buenavista
and Tambobong Estates by the Rural Progress Administration. Arnault, who was considered a
leading witness in the controversy, was called to testify thereon by the Senate. On account of his
refusal to answer the questions of the senators on an important point, he was, by resolution of the
Senate, detained for contempt. Upholding the Senate’s power to punish Arnault for contempt,
this Court held:

Although there is no provision in the Constitution expressly investing either House of Congress
with power to make investigations and exact testimony to the end that it may exercise its
legislative functions advisedly and effectively, such power is so far incidental to the legislative
function as to be implied. In other words, the power of inquiry—with process to enforce it—is an
essential and appropriate auxiliary to the legislative function. A legislative body cannot legislate
wisely or effectively in the absence of information respecting the conditions which the
legislation is intended to affect or change; and where the legislative body does not itself possess
the requisite information—which is not infrequently true—recourse must be had to others who
do possess it. Experience has shown that mere requests for such information are often unavailing,
and also that information which is volunteered is not always accurate or complete; so some
means of compulsion is essential to obtain what is needed. 59 . . . (Emphasis and underscoring
supplied)

That this power of inquiry is broad enough to cover officials of the executive branch may be
deduced from the same case. The power of inquiry, the Court therein ruled, is co-extensive with
the power to legislate.60 The matters which may be a proper subject of legislation and those
which may be a proper subject of investigation are one. It follows that the operation of
government, being a legitimate subject for legislation, is a proper subject for investigation.

Thus, the Court found that the Senate investigation of the government transaction involved in
Arnault was a proper exercise of the power of inquiry. Besides being related to the expenditure
of public funds of which Congress is the guardian, the transaction, the Court held, “also involved
government agencies created by Congress and officers whose positions it is within the power of
Congress to regulate or even abolish.”

Since Congress has authority to inquire into the operations of the executive branch, it would be
incongruous to hold that the power of inquiry does not extend to executive officials who are the
most familiar with and informed on executive operations.

As discussed in Arnault, the power of inquiry, “with process to enforce it,” is grounded on the
necessity of information in the legislative process. If the information possessed by executive
officials on the operation of their offices is necessary for wise legislation on that subject, by
parity of reasoning, Congress has the right to that information and the power to compel the
disclosure thereof.

As evidenced by the American experience during the so-called “McCarthy era,” however, the
right of Congress to conduct inquiries in aid of legislation is, in theory, no less susceptible to
abuse than executive or judicial power. It may thus be subjected to judicial review pursuant to
the Court’s certiorari powers under Section 1, Article VIII of the Constitution.

For one, as noted in Bengzon v. Senate Blue Ribbon Committee, 61 the inquiry itself might not
properly be in aid of legislation, and thus beyond the constitutional power of Congress. Such
inquiry could not usurp judicial functions. Parenthetically, one possible way for Congress to
avoid such a result as occurred in Bengzon is to indicate in its invitations to the public officials
concerned, or to any person for that matter, the possible needed statute which prompted the need
for the inquiry. Given such statement in its invitations, along with the usual indication of the
subject of inquiry and the questions relative to and in furtherance thereof, there would be less
room for speculation on the part of the person invited on whether the inquiry is in aid of
legislation.

Section 21, Article VI likewise establishes crucial safeguards that proscribe the legislative power
of inquiry. The provision requires that the inquiry be done in accordance with the Senate or
House’s duly published rules of procedure, necessarily implying the constitutional infirmity of
an inquiry conducted without duly published rules of procedure. Section 21 also mandates that
the rights of persons appearing in or affected by such inquiries be respected, an imposition that
obligates Congress to adhere to the guarantees in the Bill of Rights.

These abuses are, of course, remediable before the courts, upon the proper suit filed by the
persons affected, even if they belong to the executive branch. Nonetheless, there may be
exceptional circumstances, none appearing to obtain at present, wherein a clear pattern of abuse
of the legislative power of inquiry might be established, resulting in palpable violations of the
rights guaranteed to members of the executive department under the Bill of Rights. In such
instances, depending on the particulars of each case, attempts by the Executive Branch to
forestall these abuses may be accorded judicial sanction.

Even where the inquiry is in aid of legislation, there are still recognized exemptions to the power
of inquiry, which exemptions fall under the rubric of “executive privilege.” Since this term
figures prominently in the challenged order, it being mentioned in its provisions, its preambular
clauses,62 and in its very title, a discussion of executive privilege is crucial for determining the
constitutionality of E.O. 464.

Executive privilege

The phrase “executive privilege” is not new in this jurisdiction. It has been used even prior to the
promulgation of the 1986 Constitution.63 Being of American origin, it is best understood in light
of how it has been defined and used in the legal literature of the United States.

Schwartz defines executive privilege as “the power of the Government to withhold information
from the public, the courts, and the Congress.” 64 Similarly, Rozell defines it as “the right of the
President and high-level executive branch officers to withhold information from Congress, the
courts, and ultimately the public.”65

Executive privilege is, nonetheless, not a clear or unitary concept. 66 It has encompassed claims
of varying kinds.67 Tribe, in fact, comments that while it is customary to employ the phrase
“executive privilege,” it may be more accurate to speak of executive privileges “since
presidential refusals to furnish information may be actuated by any of at least three distinct kinds
of considerations, and may be asserted, with differing degrees of success, in the context of either
judicial or legislative investigations.”

One variety of the privilege, Tribe explains, is the state secrets privilege invoked by U.S.
Presidents, beginning with Washington, on the ground that the information is of such nature that
its disclosure would subvert crucial military or diplomatic objectives. Another variety is the
informer’s privilege, or the privilege of the Government not to disclose the identity of persons
who furnish information of violations of law to officers charged with the enforcement of that
law. Finally, a generic privilege for internal deliberations has been said to attach to
intragovernmental documents reflecting advisory opinions, recommendations and deliberations
comprising part of a process by which governmental decisions and policies are formulated. 68

Tribe’s comment is supported by the ruling in In re Sealed Case, thus:

Since the beginnings of our nation, executive officials have claimed a variety of privileges to
resist disclosure of information the confidentiality of which they felt was crucial to fulfillment of
the unique role and responsibilities of the executive branch of our government. Courts ruled
early that the executive had a right to withhold documents that might reveal military or state
secrets. The courts have also granted the executive a right to withhold the identity of government
informers in some circumstances and a qualified right to withhold information related to pending
investigations. xx x”69 (Emphasis and underscoring supplied)

The entry in Black’s Law Dictionary on “executive privilege” is similarly instructive regarding
the scope of the doctrine.

This privilege, based on the constitutional doctrine of separation of powers, exempts the
executive from disclosure requirements applicable to the ordinary citizen or organization where
such exemption is necessary to the discharge of highly important executive responsibilities
involved in maintaining governmental operations, and extends not only to military and
diplomatic secrets but also to documents integral to an appropriate exercise of the executive’
domestic decisional and policy making functions, that is, those documents reflecting the frank
expression necessary in intra-governmental advisory and deliberative
communications.70 (Emphasis and underscoring supplied)

That a type of information is recognized as privileged does not, however, necessarily mean that it
would be considered privileged in all instances. For in determining the validity of a claim of
privilege, the question that must be asked is not only whether the requested information falls
within one of the traditional privileges, but also whether that privilege should be honored in a
given procedural setting.71

The leading case on executive privilege in the United States is U.S. v. Nixon, 72 decided in 1974.
In issue in that case was the validity of President Nixon’s claim of executive privilege against a
subpoena issued by a district court requiring the production of certain tapes and documents
relating to the Watergate investigations. The claim of privilege was based on the President’s
general interest in the confidentiality of his conversations and correspondence. The U.S. Court
held that while there is no explicit reference to a privilege of confidentiality in the U.S.
Constitution, it is constitutionally based to the extent that it relates to the effective discharge of a
President’s powers. The Court, nonetheless, rejected the President’s claim of privilege, ruling
that the privilege must be balanced against the public interest in the fair administration of
criminal justice. Notably, the Court was careful to clarify that it was not there addressing the
issue of claims of privilege in a civil litigation or against congressional demands for information.

Cases in the U.S. which involve claims of executive privilege against Congress are
rare.73 Despite frequent assertion of the privilege to deny information to Congress, beginning
with President Washington’s refusal to turn over treaty negotiation records to the House of
Representatives, the U.S. Supreme Court has never adjudicated the issue. 74 However, the U.S.
Court of Appeals for the District of Columbia Circuit, in a case decided earlier in the same year
as Nixon, recognized the President’s privilege over his conversations against a congressional
subpoena.75 Anticipating the balancing approach adopted by the U.S. Supreme Court in Nixon,
the Court of Appeals weighed the public interest protected by the claim of privilege against the
interest that would be served by disclosure to the Committee. Ruling that the balance favored the
President, the Court declined to enforce the subpoena. 76

In this jurisdiction, the doctrine of executive privilege was recognized by this Court in Almonte
v. Vasquez.77Almonte used the term in reference to the same privilege subject of Nixon. It
quoted the following portion of the Nixon decision which explains the basis for the privilege:

“The expectation of a President to the confidentiality of his conversations and correspondences,

like the claim of confidentiality of judicial deliberations, for example, has all the values to which
we accord deference for the privacy of all citizens and, added to those values, is the necessity for
protection of the public interest in candid, objective, and even blunt or harsh opinions in
Presidential decision-making. A President and those who assist him must be free to explore
alternatives in the process of shaping policies and making decisions and to do so in a way many
would be unwilling to express except privately. These are the considerations justifying a
presumptive privilege for Presidential communications. The privilege is fundamental to the
operation of government and inextricably rooted in the separation of powers under the
Constitution x xx ” (Emphasis and underscoring supplied)

Almonte involved a subpoena ducestecum issued by the Ombudsman against the therein
petitioners. It did not involve, as expressly stated in the decision, the right of the people to
information.78 Nonetheless, the Court recognized that there are certain types of information
which the government may withhold from the public, thus acknowledging, in substance if not in
name, that executive privilege may be claimed against citizens’ demands for information.

In Chavez v. PCGG,79 the Court held that this jurisdiction recognizes the common law holding
that there is a “governmental privilege against public disclosure with respect to state secrets
regarding military, diplomatic and other national security matters.” 80 The same case held that
closed-door Cabinet meetings are also a recognized limitation on the right to information.

Similarly, in Chavez v. Public Estates Authority, 81 the Court ruled that the right to information
does not extend to matters recognized as “privileged information under the separation of
powers,”82 by which the Court meant Presidential conversations, correspondences, and
discussions in closed-door Cabinet meetings. It also held that information on military and
diplomatic secrets and those affecting national security, and information on investigations of
crimes by law enforcement agencies before the prosecution of the accused were exempted from
the right to information.

From the above discussion on the meaning and scope of executive privilege, both in the United
States and in this jurisdiction, a clear principle emerges. Executive privilege, whether asserted
against Congress, the courts, or the public, is recognized only in relation to certain types of
information of a sensitive character. While executive privilege is a constitutional concept, a
claim thereof may be valid or not depending on the ground invoked to justify it and the context
in which it is made. Noticeably absent is any recognition that executive officials are exempt from
the duty to disclose information by the mere fact of being executive officials. Indeed, the
extraordinary character of the exemptions indicates that the presumption inclines heavily against
executive secrecy and in favor of disclosure.

Validity of Section 1

Section 1 is similar to Section 3 in that both require the officials covered by them to secure the
consent of the President prior to appearing before Congress. There are significant differences
between the two provisions, however, which constrain this Court to discuss the validity of these
provisions separately.

Section 1 specifically applies to department heads. It does not, unlike Section 3, require a prior
determination by any official whether they are covered by E.O. 464. The President herself has,
through the challenged order, made the determination that they are. Further, unlike also Section
3, the coverage of department heads under Section 1 is not made to depend on the department
heads’ possession of any information which might be covered by executive privilege. In fact, in
marked contrast to Section 3 vis-à-vis Section 2, there is no reference to executive privilege at
all. Rather, the required prior consent under Section 1 is grounded on Article VI, Section 22 of
the Constitution on what has been referred to as the question hour.

SECTION 22. The heads of departments may upon their own initiative, with the consent of the
President, or upon the request of either House, as the rules of each House shall provide, appear
before and be heard by such House on any matter pertaining to their departments. Written
questions shall be submitted to the President of the Senate or the Speaker of the House of
Representatives at least three days before their scheduled appearance. Interpellations shall not be
limited to written questions, but may cover matters related thereto. When the security of the State
or the public interest so requires and the President so states in writing, the appearance shall be
conducted in executive session.

Determining the validity of Section 1 thus requires an examination of the meaning of Section 22
of Article VI. Section 22 which provides for the question hour must be interpreted vis-à-vis
Section 21 which provides for the power of either House of Congress to “conduct inquiries in aid
of legislation.” As the following excerpt of the deliberations of the Constitutional Commission
shows, the framers were aware that these two provisions involved distinct functions of Congress.

MR. MAAMBONG. xxx When we amended Section 20 [now Section 22 on the Question Hour]
yesterday, I noticed that members of the Cabinet cannot be compelled anymore to appear before
the House of Representatives or before the Senate. I have a particular problem in this regard,
Madam President, because in our experience in the Regular BatasangPambansa—as the
Gentleman himself has experienced in the interim BatasangPambansa—one of the most
competent inputs that we can put in our committee deliberations, either in aid of legislation or in
congressional investigations, is the testimonies of Cabinet ministers. We usually invite them, but
if they do not come and it is a congressional investigation, we usually issue subpoenas.

I want to be clarified on a statement made by Commissioner Suarez when he said that the fact
that the Cabinet ministers may refuse to come to the House of Representatives or the Senate
[when requested under Section 22] does not mean that they need not come when they are invited
or subpoenaed by the committee of either House when it comes to inquiries in aid of legislation
or congressional investigation. According to Commissioner Suarez, that is allowed and their
presence can be had under Section 21. Does the gentleman confirm this, Madam President?

MR. DAVIDE. We confirm that, Madam President, because Section 20 refers only to what was
originally the Question Hour, whereas, Section 21 would refer specifically to inquiries in aid of
legislation, under which anybody for that matter, may be summoned and if he refuses, he can be
held in contempt of the House.83 (Emphasis and underscoring supplied)

A distinction was thus made between inquiries in aid of legislation and the question hour. While
attendance was meant to be discretionary in the question hour, it was compulsory in inquiries in
aid of legislation. The reference to Commissioner Suarez bears noting, he being one of the
proponents of the amendment to make the appearance of department heads discretionary in the
question hour.
So clearly was this distinction conveyed to the members of the Commission that the Committee
on Style, precisely in recognition of this distinction, later moved the provision on question hour
from its original position as Section 20 in the original draft down to Section 31, far from the
provision on inquiries in aid of legislation. This gave rise to the following exchange during the
deliberations:

MR. GUINGONA. [speaking in his capacity as Chairman of the Committee on Style] We now
go, Mr. Presiding Officer, to the Article on Legislative and may I request the chairperson of the
Legislative Department, Commissioner Davide, to give his reaction.

THE PRESIDING OFFICER (Mr. Jamir). Commissioner Davide is recognized.|avvphi|.net

MR. DAVIDE. Thank you, Mr. Presiding Officer. I have only one reaction to the Question Hour.
I propose that instead of putting it as Section 31, it should follow Legislative Inquiries.

THE PRESIDING OFFICER. What does the committee say?

MR. GUINGONA. I ask Commissioner Maambong to reply, Mr. Presiding Officer.

MR. MAAMBONG. Actually, we considered that previously when we sequenced this but we
reasoned that in Section 21, which is Legislative Inquiry, it is actually a power of Congress in
terms of its own lawmaking; whereas, a Question Hour is not actually a power in terms of its
own lawmaking power because in Legislative Inquiry, it is in aid of legislation. And so we put
Question Hour as Section 31. I hope Commissioner Davide will consider this.

MR. DAVIDE. The Question Hour is closely related with the legislative power, and it is
precisely as a complement to or a supplement of the Legislative Inquiry. The appearance of the
members of Cabinet would be very, very essential not only in the application of check and
balance but also, in effect, in aid of legislation.

MR. MAAMBONG. After conferring with the committee, we find merit in the suggestion of
Commissioner Davide. In other words, we are accepting that and so this Section 31 would now
become Section 22. Would it be, Commissioner Davide?

MR. DAVIDE. Yes.84 (Emphasis and underscoring supplied)

Consistent with their statements earlier in the deliberations, Commissioners Davide and
Maambong proceeded from the same assumption that these provisions pertained to two different
functions of the legislature. Both Commissioners understood that the power to conduct inquiries
in aid of legislation is different from the power to conduct inquiries during the question hour.
Commissioner Davide’s only concern was that the two provisions on these distinct powers be
placed closely together, they being complementary to each other. Neither Commissioner
considered them as identical functions of Congress.

The foregoing opinion was not the two Commissioners’ alone. From the above-quoted exchange,
Commissioner Maambong’s committee—the Committee on Style—shared the view that the two
provisions reflected distinct functions of Congress. Commissioner Davide, on the other hand,
was speaking in his capacity as Chairman of the Committee on the Legislative Department. His
views may thus be presumed as representing that of his Committee.

In the context of a parliamentary system of government, the “question hour” has a definite
meaning. It is a period of confrontation initiated by Parliament to hold the Prime Minister and
the other ministers accountable for their acts and the operation of the
government,85 corresponding to what is known in Britain as the question period. There was a
specific provision for a question hour in the 1973 Constitution 86 which made the appearance of
ministers mandatory. The same perfectly conformed to the parliamentary system established by
that Constitution, where the ministers are also members of the legislature and are directly
accountable to it.

An essential feature of the parliamentary system of government is the immediate accountability

of the Prime Minister and the Cabinet to the National Assembly. They shall be responsible to the
National Assembly for the program of government and shall determine the guidelines of national
policy. Unlike in the presidential system where the tenure of office of all elected officials cannot
be terminated before their term expired, the Prime Minister and the Cabinet remain in office only
as long as they enjoy the confidence of the National Assembly. The moment this confidence is
lost the Prime Minister and the Cabinet may be changed.87

The framers of the 1987 Constitution removed the mandatory nature of such appearance during
the question hour in the present Constitution so as to conform more fully to a system of
separation of powers.88 To that extent, the question hour, as it is presently understood in this
jurisdiction, departs from the question period of the parliamentary system. That department
heads may not be required to appear in a question hour does not, however, mean that the
legislature is rendered powerless to elicit information from them in all circumstances. In fact, in
light of the absence of a mandatory question period, the need to enforce Congress’ right to
executive information in the performance of its legislative function becomes more imperative.
As Schwartz observes:

Indeed, if the separation of powers has anything to tell us on the subject under discussion, it is
that the Congress has the right to obtain information from any source—even from officials of
departments and agencies in the executive branch. In the United States there is, unlike the
situation which prevails in a parliamentary system such as that in Britain, a clear separation
between the legislative and executive branches. It is this very separation that makes the
congressional right to obtain information from the executive so essential, if the functions of the
Congress as the elected representatives of the people are adequately to be carried out. The
absence of close rapport between the legislative and executive branches in this country,
comparable to those which exist under a parliamentary system, and the nonexistence in the
Congress of an institution such as the British question period have perforce made reliance by the
Congress upon its right to obtain information from the executive essential, if it is intelligently to
perform its legislative tasks. Unless the Congress possesses the right to obtain executive
information, its power of oversight of administration in a system such as ours becomes a power
devoid of most of its practical content, since it depends for its effectiveness solely upon
information parceled out ex gratia by the executive.89 (Emphasis and underscoring supplied)
Sections 21 and 22, therefore, while closely related and complementary to each other, should not
be considered as pertaining to the same power of Congress. One specifically relates to the power
to conduct inquiries in aid of legislation, the aim of which is to elicit information that may be
used for legislation, while the other pertains to the power to conduct a question hour, the
objective of which is to obtain information in pursuit of Congress’ oversight function.

When Congress merely seeks to be informed on how department heads are implementing the
statutes which it has issued, its right to such information is not as imperative as that of the
President to whom, as Chief Executive, such department heads must give a report of their
performance as a matter of duty. In such instances, Section 22, in keeping with the separation of
powers, states that Congress may only request their appearance. Nonetheless, when the inquiry in
which Congress requires their appearance is “in aid of legislation” under Section 21, the
appearance is mandatory for the same reasons stated in Arnault.90

In fine, the oversight function of Congress may be facilitated by compulsory process only to the
extent that it is performed in pursuit of legislation. This is consistent with the intent discerned
from the deliberations of the Constitutional Commission.

Ultimately, the power of Congress to compel the appearance of executive officials under Section
21 and the lack of it under Section 22 find their basis in the principle of separation of powers.
While the executive branch is a co-equal branch of the legislature, it cannot frustrate the power
of Congress to legislate by refusing to comply with its demands for information.

When Congress exercises its power of inquiry, the only way for department heads to exempt
themselves therefrom is by a valid claim of privilege. They are not exempt by the mere fact that
they are department heads. Only one executive official may be exempted from this power—the
President on whom executive power is vested, hence, beyond the reach of Congress except
through the power of impeachment. It is based on her being the highest official of the executive
branch, and the due respect accorded to a co-equal branch of government which is sanctioned by
a long-standing custom.

By the same token, members of the Supreme Court are also exempt from this power of inquiry.
Unlike the Presidency, judicial power is vested in a collegial body; hence, each member thereof
is exempt on the basis not only of separation of powers but also on the fiscal autonomy and the
constitutional independence of the judiciary. This point is not in dispute, as even counsel for the
Senate, Sen. Joker Arroyo, admitted it during the oral argument upon interpellation of the Chief
Justice.

Having established the proper interpretation of Section 22, Article VI of the Constitution, the
Court now proceeds to pass on the constitutionality of Section 1 of E.O. 464.

Section 1, in view of its specific reference to Section 22 of Article VI of the Constitution and the
absence of any reference to inquiries in aid of legislation, must be construed as limited in its
application to appearances of department heads in the question hour contemplated in the
provision of said Section 22 of Article VI. The reading is dictated by the basic rule of
construction that issuances must be interpreted, as much as possible, in a way that will render it
constitutional.

The requirement then to secure presidential consent under Section 1, limited as it is only to
appearances in the question hour, is valid on its face. For under Section 22, Article VI of the
Constitution, the appearance of department heads in the question hour is discretionary on their
part.

Section 1 cannot, however, be applied to appearances of department heads in inquiries in aid of

legislation. Congress is not bound in such instances to respect the refusal of the department head
to appear in such inquiry, unless a valid claim of privilege is subsequently made, either by the
President herself or by the Executive Secretary.

Validity of Sections 2 and 3

Section 3 of E.O. 464 requires all the public officials enumerated in Section 2(b) to secure the
consent of the President prior to appearing before either house of Congress. The enumeration is
broad. It covers all senior officials of executive departments, all officers of the AFP and the PNP,
and all senior national security officials who, in the judgment of the heads of offices designated
in the same section (i.e. department heads, Chief of Staff of the AFP, Chief of the PNP, and the
National Security Adviser), are “covered by the executive privilege.”

The enumeration also includes such other officers as may be determined by the President. Given
the title of Section 2—”Nature, Scope and Coverage of Executive Privilege”—, it is evident that
under the rule of ejusdem generis, the determination by the President under this provision is
intended to be based on a similar finding of coverage under executive privilege.

En passant, the Court notes that Section 2(b) of E.O. 464 virtually states that executive privilege
actually covers persons. Such is a misuse of the doctrine. Executive privilege, as discussed
above, is properly invoked in relation to specific categories of information and not to categories
of persons.

In light, however, of Sec 2(a) of E.O. 464 which deals with the nature, scope and coverage of
executive privilege, the reference to persons being “covered by the executive privilege” may be
read as an abbreviated way of saying that the person is in possession of information which is, in
the judgment of the head of office concerned, privileged as defined in Section 2(a). The Court
shall thus proceed on the assumption that this is the intention of the challenged order.

Upon a determination by the designated head of office or by the President that an official is
“covered by the executive privilege,” such official is subjected to the requirement that he first
secure the consent of the President prior to appearing before Congress. This requirement
effectively bars the appearance of the official concerned unless the same is permitted by the
President. The proviso allowing the President to give its consent means nothing more than that
the President may reverse a prohibition which already exists by virtue of E.O. 464.
Thus, underlying this requirement of prior consent is the determination by a head of office,
authorized by the President under E.O. 464, or by the President herself, that such official is in
possession of information that is covered by executive privilege. This determination then
becomes the basis for the official’s not showing up in the legislative investigation.

In view thereof, whenever an official invokes E.O. 464 to justify his failure to be present, such
invocation must be construed as a declaration to Congress that the President, or a head of office
authorized by the President, has determined that the requested information is privileged, and that
the President has not reversed such determination. Such declaration, however, even without
mentioning the term “executive privilege,” amounts to an implied claim that the information is
being withheld by the executive branch, by authority of the President, on the basis of executive
privilege. Verily, there is an implied claim of privilege.

The letter dated September 28, 2005 of respondent Executive Secretary Ermita to Senate
President Drilon illustrates the implied nature of the claim of privilege authorized by E.O. 464. It
reads:

In connection with the inquiry to be conducted by the Committee of the Whole regarding the
Northrail Project of the North Luzon Railways Corporation on 29 September 2005 at 10:00 a.m.,
please be informed that officials of the Executive Department invited to appear at the meeting
will not be able to attend the same without the consent of the President, pursuant to Executive
Order No. 464 (s. 2005), entitled “Ensuring Observance Of The Principle Of Separation Of
Powers, Adherence To The Rule On Executive Privilege And Respect For The Rights Of Public
Officials Appearing In Legislative Inquiries In Aid Of Legislation Under The Constitution, And
For Other Purposes”. Said officials have not secured the required consent from the President.
(Underscoring supplied)

The letter does not explicitly invoke executive privilege or that the matter on which these
officials are being requested to be resource persons falls under the recognized grounds of the
privilege to justify their absence. Nor does it expressly state that in view of the lack of consent
from the President under E.O. 464, they cannot attend the hearing.

Significant premises in this letter, however, are left unstated, deliberately or not. The letter
assumes that the invited officials are covered by E.O. 464. As explained earlier, however, to be
covered by the order means that a determination has been made, by the designated head of office
or the President, that the invited official possesses information that is covered by executive
privilege. Thus, although it is not stated in the letter that such determination has been made, the
same must be deemed implied. Respecting the statement that the invited officials have not
secured the consent of the President, it only means that the President has not reversed the
standing prohibition against their appearance before Congress.

Inevitably, Executive Secretary Ermita’s letter leads to the conclusion that the executive branch,
either through the President or the heads of offices authorized under E.O. 464, has made a
determination that the information required by the Senate is privileged, and that, at the time of
writing, there has been no contrary pronouncement from the President. In fine, an implied claim
of privilege has been made by the executive.
While there is no Philippine case that directly addresses the issue of whether executive privilege
may be invoked against Congress, it is gathered from Chavez v. PEA that certain information in
the possession of the executive may validly be claimed as privileged even against Congress.
Thus, the case holds:

There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal-
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either
house of Congress, are recognized as confidential. This kind of information cannot be pried open
by a co-equal branch of government. A frank exchange of exploratory ideas and assessments,
free from the glare of publicity and pressure by interested parties, is essential to protect the
independence of decision-making of those tasked to exercise Presidential, Legislative and
Judicial power. This is not the situation in the instant case.91 (Emphasis and underscoring
supplied)

Section 3 of E.O. 464, therefore, cannot be dismissed outright as invalid by the mere fact that it
sanctions claims of executive privilege. This Court must look further and assess the claim of
privilege authorized by the Order to determine whether it is valid.

While the validity of claims of privilege must be assessed on a case to case basis, examining the
ground invoked therefor and the particular circumstances surrounding it, there is, in an implied
claim of privilege, a defect that renders it invalid per se. By its very nature, and as demonstrated
by the letter of respondent Executive Secretary quoted above, the implied claim authorized by
Section 3 of E.O. 464 is not accompanied by any specific allegation of the basis thereof (e.g.,
whether the information demanded involves military or diplomatic secrets, closed-door Cabinet
meetings, etc.). While Section 2(a) enumerates the types of information that are covered by the
privilege under the challenged order, Congress is left to speculate as to which among them is
being referred to by the executive. The enumeration is not even intended to be comprehensive,
but a mere statement of what is included in the phrase “confidential or classified information
between the President and the public officers covered by this executive order.”

Certainly, Congress has the right to know why the executive considers the requested information
privileged. It does not suffice to merely declare that the President, or an authorized head of
office, has determined that it is so, and that the President has not overturned that determination.
Such declaration leaves Congress in the dark on how the requested information could be
classified as privileged. That the message is couched in terms that, on first impression, do not
seem like a claim of privilege only makes it more pernicious. It threatens to make Congress
doubly blind to the question of why the executive branch is not providing it with the information
that it has requested.

A claim of privilege, being a claim of exemption from an obligation to disclose information,

must, therefore, be clearly asserted. As U.S. v. Reynolds teaches:

The privilege belongs to the government and must be asserted by it; it can neither be claimed nor
waived by a private party. It is not to be lightly invoked. There must be a formal claim of
privilege, lodged by the head of the department which has control over the matter, after actual
personal consideration by that officer. The court itself must determine whether the circumstances
are appropriate for the claim of privilege, and yet do so without forcing a disclosure of the very
thing the privilege is designed to protect.92 (Underscoring supplied)

Absent then a statement of the specific basis of a claim of executive privilege, there is no way of
determining whether it falls under one of the traditional privileges, or whether, given the
circumstances in which it is made, it should be respected. 93 These, in substance, were the same
criteria in assessing the claim of privilege asserted against the Ombudsman in Almonte v.
Vasquez94 and, more in point, against a committee of the Senate in Senate Select Committee on
Presidential Campaign Activities v. Nixon.95

A.O. Smith v. Federal Trade Commission is enlightening:

[T]he lack of specificity renders an assessment of the potential harm resulting from disclosure
impossible, thereby preventing the Court from balancing such harm against plaintiffs’ needs to
determine whether to override any claims of privilege.96 (Underscoring supplied)

And so is U.S. v. Article of Drug:97

On the present state of the record, this Court is not called upon to perform this balancing
operation. In stating its objection to claimant’s interrogatories, government asserts, and nothing
more, that the disclosures sought by claimant would inhibit the free expression of opinion that
non-disclosure is designed to protect. The government has not shown—nor even alleged—that
those who evaluated claimant’s product were involved in internal policymaking, generally, or in
this particular instance. Privilege cannot be set up by an unsupported claim. The facts upon
which the privilege is based must be established. To find these interrogatories objectionable, this
Court would have to assume that the evaluation and classification of claimant’s products was a
matter of internal policy formulation, an assumption in which this Court is unwilling to indulge
sua sponte.98 (Emphasis and underscoring supplied)

Mobil Oil Corp. v. Department of Energy 99 similarly emphasizes that “an agency must provide
‘precise and certain’ reasons for preserving the confidentiality of requested information.”

Black v. Sheraton Corp. of America100 amplifies, thus:

A formal and proper claim of executive privilege requires a specific designation and description
of the documents within its scope as well as precise and certain reasons for preserving their
confidentiality. Without this specificity, it is impossible for a court to analyze the claim short of
disclosure of the very thing sought to be protected. As the affidavit now stands, the Court has
little more than its suasponte speculation with which to weigh the applicability of the claim. An
improperly asserted claim of privilege is no claim of privilege. Therefore, despite the fact that a
claim was made by the proper executive as Reynolds requires, the Court can not recognize the
claim in the instant case because it is legally insufficient to allow the Court to make a just and
reasonable determination as to its applicability. To recognize such a broad claim in which the
Defendant has given no precise or compelling reasons to shield these documents from outside
scrutiny, would make a farce of the whole procedure.101 (Emphasis and underscoring supplied)

Due respect for a co-equal branch of government, moreover, demands no less than a claim of
privilege clearly stating the grounds therefor. Apropos is the following ruling in McPhaul v.
U.S:102

We think the Court’s decision in United States v. Bryan, 339 U.S. 323, 70 S. Ct. 724, is highly
relevant to these questions. For it is as true here as it was there, that ‘if (petitioner) had legitimate
reasons for failing to produce the records of the association, a decent respect for the House of
Representatives, by whose authority the subpoenas issued, would have required that (he) state
(his) reasons for noncompliance upon the return of the writ. Such a statement would have given
the Subcommittee an opportunity to avoid the blocking of its inquiry by taking other appropriate
steps to obtain the records. ‘To deny the Committee the opportunity to consider the objection or
remedy is in itself a contempt of its authority and an obstruction of its processes. His failure to
make any such statement was “a patent evasion of the duty of one summoned to produce papers
before a congressional committee[, and] cannot be condoned.” (Emphasis and underscoring
supplied; citations omitted)

Upon the other hand, Congress must not require the executive to state the reasons for the claim
with such particularity as to compel disclosure of the information which the privilege is meant to
protect.103 A useful analogy in determining the requisite degree of particularity would be the
privilege against self-incrimination. Thus, Hoffman v. U.S.104 declares:

The witness is not exonerated from answering merely because he declares that in so doing he
would incriminate himself—his say-so does not of itself establish the hazard of incrimination. It
is for the court to say whether his silence is justified, and to require him to answer if ‘it clearly
appears to the court that he is mistaken.’ However, if the witness, upon interposing his claim,
were required to prove the hazard in the sense in which a claim is usually required to be
established in court, he would be compelled to surrender the very protection which the privilege
is designed to guarantee. To sustain the privilege, it need only be evident from the implications
of the question, in the setting in which it is asked, that a responsive answer to the question or an
explanation of why it cannot be answered might be dangerous because injurious disclosure could
result.” x xx (Emphasis and underscoring supplied)

The claim of privilege under Section 3 of E.O. 464 in relation to Section 2(b) is thus invalid per
se. It is not asserted. It is merely implied. Instead of providing precise and certain reasons for the
claim, it merely invokes E.O. 464, coupled with an announcement that the President has not
given her consent. It is woefully insufficient for Congress to determine whether the withholding
of information is justified under the circumstances of each case. It severely frustrates the power
of inquiry of Congress.

In fine, Section 3 and Section 2(b) of E.O. 464 must be invalidated.

No infirmity, however, can be imputed to Section 2(a) as it merely provides guidelines, binding
only on the heads of office mentioned in Section 2(b), on what is covered by executive privilege.
It does not purport to be conclusive on the other branches of government. It may thus be
construed as a mere expression of opinion by the President regarding the nature and scope of
executive privilege.

Petitioners, however, assert as another ground for invalidating the challenged order the alleged
unlawful delegation of authority to the heads of offices in Section 2(b). Petitioner Senate of the
Philippines, in particular, cites the case of the United States where, so it claims, only the
President can assert executive privilege to withhold information from Congress.

Section 2(b) in relation to Section 3 virtually provides that, once the head of office determines
that a certain information is privileged, such determination is presumed to bear the President’s
authority and has the effect of prohibiting the official from appearing before Congress, subject
only to the express pronouncement of the President that it is allowing the appearance of such
official. These provisions thus allow the President to authorize claims of privilege by mere
silence.

Such presumptive authorization, however, is contrary to the exceptional nature of the privilege.
Executive privilege, as already discussed, is recognized with respect to information the
confidential nature of which is crucial to the fulfillment of the unique role and responsibilities of
the executive branch,105 or in those instances where exemption from disclosure is necessary to the
discharge of highly important executive responsibilities.106 The doctrine of executive privilege is
thus premised on the fact that certain informations must, as a matter of necessity, be kept
confidential in pursuit of the public interest. The privilege being, by definition, an exemption
from the obligation to disclose information, in this case to Congress, the necessity must be of
such high degree as to outweigh the public interest in enforcing that obligation in a particular
case.

In light of this highly exceptional nature of the privilege, the Court finds it essential to limit to
the President the power to invoke the privilege. She may of course authorize the Executive
Secretary to invoke the privilege on her behalf, in which case the Executive Secretary must state
that the authority is “By order of the President,” which means that he personally consulted with
her. The privilege being an extraordinary power, it must be wielded only by the highest official
in the executive hierarchy. In other words, the President may not authorize her subordinates to
exercise such power. There is even less reason to uphold such authorization in the instant case
where the authorization is not explicit but by mere silence. Section 3, in relation to Section 2(b),
is further invalid on this score.

It follows, therefore, that when an official is being summoned by Congress on a matter which, in
his own judgment, might be covered by executive privilege, he must be afforded reasonable time
to inform the President or the Executive Secretary of the possible need for invoking the privilege.
This is necessary in order to provide the President or the Executive Secretary with fair
opportunity to consider whether the matter indeed calls for a claim of executive privilege. If,
after the lapse of that reasonable time, neither the President nor the Executive Secretary invokes
the privilege, Congress is no longer bound to respect the failure of the official to appear before
Congress and may then opt to avail of the necessary legal means to compel his appearance.
The Court notes that one of the expressed purposes for requiring officials to secure the consent of
the President under Section 3 of E.O. 464 is to ensure “respect for the rights of public officials
appearing in inquiries in aid of legislation.” That such rights must indeed be respected by
Congress is an echo from Article VI Section 21 of the Constitution mandating that “[t]he rights
of persons appearing in or affected by such inquiries shall be respected.”

In light of the above discussion of Section 3, it is clear that it is essentially an authorization for
implied claims of executive privilege, for which reason it must be invalidated. That such
authorization is partly motivated by the need to ensure respect for such officials does not change
the infirm nature of the authorization itself.

Right to Information

E.O 464 is concerned only with the demands of Congress for the appearance of executive
officials in the hearings conducted by it, and not with the demands of citizens for information
pursuant to their right to information on matters of public concern. Petitioners are not amiss in
claiming, however, that what is involved in the present controversy is not merely the legislative
power of inquiry, but the right of the people to information.

There are, it bears noting, clear distinctions between the right of Congress to information which
underlies the power of inquiry and the right of the people to information on matters of public
concern. For one, the demand of a citizen for the production of documents pursuant to his right
to information does not have the same obligatory force as a subpoena ducestecum issued by
Congress. Neither does the right to information grant a citizen the power to exact testimony from
government officials. These powers belong only to Congress and not to an individual citizen.

Thus, while Congress is composed of representatives elected by the people, it does not follow,
except in a highly qualified sense, that in every exercise of its power of inquiry, the people are
exercising their right to information.

To the extent that investigations in aid of legislation are generally conducted in public, however,
any executive issuance tending to unduly limit disclosures of information in such investigations
necessarily deprives the people of information which, being presumed to be in aid of legislation,
is presumed to be a matter of public concern. The citizens are thereby denied access to
information which they can use in formulating their own opinions on the matter before Congress
—opinions which they can then communicate to their representatives and other government
officials through the various legal means allowed by their freedom of expression. Thus holds
Valmonte v. Belmonte:

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. Yet, this open
dialogue can be effective only to the extent that the citizenry is informed and thus able to
formulate its will intelligently. Only when the participants in the discussion are aware of the
issues and have access to information relating thereto can such bear fruit.107 (Emphasis and
underscoring supplied)
The impairment of the right of the people to information as a consequence of E.O. 464 is,
therefore, in the sense explained above, just as direct as its violation of the legislature’s power of
inquiry.

Implementation of E.O. 464 prior to its publication

While E.O. 464 applies only to officials of the executive branch, it does not follow that the same
is exempt from the need for publication. On the need for publishing even those statutes that do
not directly apply to people in general, Tañada v. Tuvera states:

The term “laws” should refer to all laws and not only to those of general application, for strictly
speaking all laws relate to the people in general albeit there are some that do not apply to them
directly. An example is a law granting citizenship to a particular individual, like a relative of
President Marcos who was decreed instant naturalization. It surely cannot be said that such a law
does not affect the public although it unquestionably does not apply directly to all the people.
The subject of such law is a matter of public interest which any member of the body politic may
question in the political forums or, if he is a proper party, even in courts of justice. 108 (Emphasis
and underscoring supplied)

Although the above statement was made in reference to statutes, logic dictates that the
challenged order must be covered by the publication requirement. As explained above, E.O. 464
has a direct effect on the right of the people to information on matters of public concern. It is,
therefore, a matter of public interest which members of the body politic may question before this
Court. Due process thus requires that the people should have been apprised of this issuance
before it was implemented.

Conclusion

Congress undoubtedly has a right to information from the executive branch whenever it is sought
in aid of legislation. If the executive branch withholds such information on the ground that it is
privileged, it must so assert it and state the reason therefor and why it must be respected.

The infirm provisions of E.O. 464, however, allow the executive branch to evade congressional
requests for information without need of clearly asserting a right to do so and/or proffering its
reasons therefor. By the mere expedient of invoking said provisions, the power of Congress to
conduct inquiries in aid of legislation is frustrated. That is impermissible. For

[w]hat republican theory did accomplish…was to reverse the old presumption in favor of
secrecy, based on the divine right of kings and nobles, and replace it with a presumption in favor
of publicity, based on the doctrine of popular sovereignty. (Underscoring supplied)109

Resort to any means then by which officials of the executive branch could refuse to divulge
information cannot be presumed valid. Otherwise, we shall not have merely nullified the power
of our legislature to inquire into the operations of government, but we shall have given up
something of much greater value—our right as a people to take part in government.
WHEREFORE, the petitions are PARTLY GRANTED. Sections 2(b) and 3 of Executive Order
No. 464 (series of 2005), “Ensuring Observance of the Principle of Separation of Powers,
Adherence to the Rule on Executive Privilege and Respect for the Rights of Public Officials
Appearing in Legislative Inquiries in Aid of Legislation Under the Constitution, and For Other
Purposes,” are declared VOID. Sections 1 and 2(a) are, however, VALID.
G.R. No. 165036               July 5, 2010

HAZEL MA. C. ANTOLIN, Petitioner,

vs.
ABELARDO T. DOMONDON, JOSE A. GANGAN, and VIOLETA J. JOSEF, Respondents.

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

G.R. No. 175705

HAZEL MA. C. ANTOLIN Petitioner,

vs.
ANTONIETA FORTUNA-IBE, Respondent.

DECISION

DEL CASTILLO, J.:

Examinations have a two-fold purpose. First, they are summative; examinations are intended to
assess and record what and how much the students have learned. Second, and perhaps more
importantly, they are formative; examinations are intended to be part and parcel of the learning
process. In a perfect system, they are tools for learning. In view of the pedagogical aspect of
national examinations, the need for all parties to fully ventilate their respective positions, and the
view that government transactions can only be improved by public scrutiny, we remand these cases
to the trial court for further proceedings.

Factual Antecedents

Petitioner took the accountancy licensure examinations (the Certified Public Accountant [CPA] Board
Exams) conducted by the Board of Accountancy (the Board) in October 1997. 1 The examination
results were released on October 29, 1997; out of 6,481 examinees, only 1,171 passed.
Unfortunately, petitioner did not make it. When the results were released, she received failing grades
in four out of the seven subjects.2

Subject Petitioner’s Grade

Theory of Accounts 65 % Convinced that she deserved to
Business Law 66 % pass the examinations, she wrote
to respondent Abelardo T.
Management Services 69 % Domondon (Domondon), Acting
Auditing Theory 82 % Chairman of the Board of
Accountancy, and requested that
Auditing Problems 70 % her answer sheets be re-
Practical Accounting I 68 % corrected.3 On November 3, 1997,
petitioner was shown her answer
Practical Accounting II 77 %
sheets, but these consisted merely
of shaded marks, so she was unable to determine why she failed the exam. 4 Thus, on November 10,
1997, she again wrote to the Board to request for copies of (a) the questionnaire in each of the
seven subjects (b) her answer sheets; (c) the answer keys to the questionnaires, and (d) an
explanation of the grading system used in each subject (collectively, the Examination Papers). 5
Acting Chairman Domondon denied petitioner’s request on two grounds: first, that Section 36, Article
III of the Rules and Regulations Governing the Regulation and Practice of Professionals, as
amended by Professional Regulation Commission (PRC) Resolution No. 332, series of 1994, only
permitted access to the petitioner’s answer sheet (which she had been shown previously), and that
reconsideration of her examination result was only proper under the grounds stated therein:

Sec. 36 An examinee shall be allowed to have access or to go over his/her test papers or answer
sheets on a date not later than thirty (30) days from the official release of the results of the
examination. Within ten (10) days from such date, he/she may file his/her request for reconsideration
of ratings. Reconsideration of rating shall be effected only on grounds of mechanical error in the
grading of his/her testpapers or answer sheets, or malfeasance. 6 lawph!l

Second, Acting Chairman Domondon clarified that the Board was precluded from releasing the
Examination Papers (other than petitioner’s answer sheet) by Section 20, Article IV of PRC
Resolution No. 338, series of 1994, which provides:

Sec. 20. Illegal, Immoral, Dishonorable, Unprofessional Acts – The hereunder acts shall constitute
prejudicial, illegal, grossly immoral, dishonorable, or unprofessional conduct:

A. Providing, getting, receiving, holding, using or reproducing questions

xxxx

3. that have been given in the examination except if the test bank for the subject has on deposit at
least two thousand (2,000) questions.7

After a further exchange of correspondence,8 the Board informed petitioner that an investigation was
conducted into her exam and there was no mechanical error found in the grading of her test papers. 9

Proceedings before the Regional Trial Court

Undeterred, on January 12, 1998, petitioner filed a Petition for Mandamus with Damages against the
Board of Accountancy and its members 10 before the Regional Trial Court (RTC) of Manila. The case
was raffled to Branch 33, and docketed as Civil Case No. 98-86881. The Petition included a prayer
for the issuance of a preliminary mandatory injunction ordering the Board of Accountancy and its
members (the respondents) to furnish petitioner with copies of the Examination Papers. Petitioner
also prayed that final judgment be issued ordering respondents to furnish petitioner with all
documents and other materials as would enable her to determine whether respondents fairly
administered the examinations and correctly graded petitioner’s performance therein, and, if
warranted, to issue to her a certificate of registration as a CPA.11

On February 5, 1998, respondents filed their Opposition to the Application for a Writ of Preliminary
Mandatory Injunction, and argued, inter alia, that petitioner was not entitled to the relief sought, that
the respondents did not have the duty to furnish petitioner with copies of the Examination Papers,
and that petitioner had other plain, speedy, adequate remedy in the ordinary course of law, namely,
recourse to the PRC.12 Respondents also filed their Answer with Compulsory Counterclaim in the
main case, which asked that the Petition for Mandamus with Damages be dismissed for lack of merit
on the following grounds: (1) petitioner failed to exhaust administrative remedies; (2) the petition
stated no cause of action because there was no ministerial duty to release the information
demanded; and (3) the constitutional right to information on matters of public concern is subject to
limitations provided by law, including Section 20, Article IV, of PRC Resolution No. 338, series of
1994.13

On March 3, 1998, petitioner filed an Amended Petition (which was admitted by the RTC), where she
included the following allegation in the body of her petition:

The allegations in this amended petition are meant only to plead a cause of action for access to the
documents requested, not for re-correction which petitioner shall assert in the proper forum
depending on, among others, whether she finds sufficient error in the documents to warrant such or
any other relief. None of the allegations in this amended petition, including those in the following
paragraphs, is made to assert a cause of action for re-correction. 14

If only to underscore the fact that she was not asking for a re-checking of her exam, the following
prayer for relief was deleted from the Amended Petition: "and, if warranted, to issue to her a
certificate of registration as a CPA."

On June 23, 1998, respondents filed a Manifestation and Motion to Dismiss Application for Writ of
Preliminary Mandatory Injunction, on the ground that petitioner had taken and passed the May 1998
CPA Licensure Examination and had taken her oath as a CPA.15 Petitioner filed her Opposition on
July 8, 1998.16 Subsequently, on October 29, 1998, respondents filed their Answer with Counterclaim
to the amended petition. They reiterated their original allegations and further alleged that there was
no cause of action because at the time the Amended Petition was admitted, they had ceased to be
members of the Board of Accountancy and they were not in possession of the documents sought by
the petitioner.17

Ruling of the Regional Trial Court

In an Order dated October 16, 1998, the trial court granted respondent’s Motion to Dismiss
Petitioner’s Application for a Writ of Preliminary Mandatory Injunction (not the main case), ruling that
the matter had become moot since petitioner passed the May CPA Licensure 1998 Examination and
had already taken her oath as a CPA.18

Undaunted, petitioner sought and obtained leave to file a Second Amended Petition for Mandamus
with Damages19 where she finally impleaded the PRC as respondent and included the following plea
in her prayer:

WHEREFORE, petitioner respectfully prays that:

xxxx

2. Judgment be issued –

(a) commanding respondents to give petitioner all documents and other materials as would enable
her to determine whether respondents fairly administered the same examinations and correctly
graded petitioner’s performance therein and, if warranted, to make the appropriate revisions on the
results of her examination. (Emphasis ours)

On June 21, 2002, the trial court dismissed the petition on the ground that the petition had already
become moot, since petitioner managed to pass the 1998 CPA Board examinations. 20 Petitioner
sought reconsideration21 which was granted by the trial court in its Omnibus Order 22 dated November
11, 2002. The Omnibus Order provides in part:
On the motion for reconsideration filed by the petitioner, the Court is inclined to reconsider its Order
dismissing the petition. The Court agrees with the petitioner that the passing of the petitioner in the
subsequent CPA examination did not render the petition moot and academic because the relief "and
if warranted, to issue to her a certificate of registration as Certified Public Accountant" was deleted
from the original petition. As regard the issue of whether the petitioner has the constitutional right to
have access to the questioned documents, the Court would want first the parties to adduce evidence
before it can resolve the issue so that it can make a complete determination of the rights of the
parties.

The Court would also want the Professional Regulation Commission to give its side of the case the
moment it is impleaded as a respondent in the Second Amended Petition for Mandamus filed by the
petitioner which this Court is inclined to grant.

As to the Motion for Conservatory Measures filed by the petitioner, the Court denies the same. It is
clear that the PRC has in custody the documents being requested by the petitioner. It has also an
adequate facility to preserve and safeguard the documents. To be sure that the questioned
documents are preserved and safeguarded, the Court will order the PRC to preserve and safeguard
the documents and make them available anytime the Court or petitioner needs them.

WHEREFORE, the Order of this Court dated June 20, 2002 is reconsidered and set aside. The
Professional Regulation Commission is ordered to preserve and safeguard the following documents:

a) Questionnaire in each of the seven subjects comprising the Accountancy Examination of

October, 1997;

b) Petitioner’s Answer Sheets; and

c) Answer keys to the questionnaires.

SO ORDERED.23

Respondents filed a motion for reconsideration which was denied. 24

Proceedings before the Court of Appeals

The RTC Decisions led to the filing of three separate petitions for certiorari before the Court of
Appeals (CA):

(a) CA-GR SP No. 76498, a petition filed by respondents Domondon, Gangan, and Josef on
April 11, 2003;

(b) CA-GR SP No. 76546, a petition filed by respondent Ibe on April 30, 2003; and

(c) CA-GR SP No. 76545, a petition filed by the Board of Accountancy and PRC.

It is the first two proceedings that are pending before us. In both cases, the CA set aside the RTC
Decisions and ordered the dismissal of Civil Case No. 98-8681.

Ruling of the Court of Appeals

In its December 11, 2006 Decision25 in CA-GR SP No. 76546, the CA ruled that the petition has
become moot in view of petitioner’s eventual passing of the 1998 CPA Board Exam. In CA-GR SP
No. 76498, the CA found, in a Decision dated February 16, 2004, 26 that (i) Section 20, Article IV of
PRC Resolution No. 338 constituted a valid limitation on petitioner’s right to information and access
to government documents; (ii) the Examination Documents were not of public concern, because
petitioner merely sought review of her failing marks; (iii) it was not the ministerial or mandatory
function of the respondents to review and reassess the answers to examination questions of a failing
examinee; (iv) the case has become moot, since petitioner already passed the May 1998 CPA Board
Examinations and took her oath as a CPA; and (v) petitioner failed to exhaust administrative
remedies, because, having failed to secure the desired outcome from the respondents, she did not
elevate the matter to the PRC before seeking judicial intervention. 27

CA-GR SP No. 76498 and CA-GR SP No. 76546 were brought before us by the petitioner and
docketed as G.R. Nos. 165036 and 175705, respectively. The cases were then consolidated, in view
of the similarity of the factual antecedents and issues, and to avoid the possibility of conflicting
decisions by different divisions of this Court.28

Issues

Before us, petitioner argues that she has a right to obtain copies of the examination papers so she
can determine for herself why and how she failed and to ensure that the Board properly performed
its duties. She argues that the Constitution29 as well as the Code of Conduct and Ethical Standards
for Public Officials and Employees30 support her right to demand access to the Examination Papers.
Furthermore, she claims that there was no need to exhaust administrative remedies, since no
recourse to the PRC was available, and only a pure question of law is involved in this case. Finally,
she claims that her demand for access to documents was not rendered moot by her passing of the
1998 CPA Board Exams.

Our Ruling

Propriety of Writ of Mandamus

At the very outset let us be clear of our ruling. Any claim for re-correction or revision of her 1997
examination cannot be compelled by mandamus. This much was made evident by our ruling in
Agustin-Ramos v. Sandoval,31 where we stated:

After deliberating on the petition in relation to the other pleadings filed in the proceedings at bar, the
Court resolved to DENY said petition for lack of merit. The petition at bar prays for the setting aside
of the Order of respondent Judge dismissing petitioners’ mandamus action to compel the other
respondents (Medical Board of Examiners and the Professional Regulation Commission) "to
reconsider, recorrect and/or rectify the board ratings of the petitioners from their present failing
grades to higher or passing marks." The function of reviewing and re-assessing the petitioners’
answers to the examination questions, in the light of the facts and arguments presented by them x x
x is a discretionary function of the Medical Board, not a ministerial and mandatory one, hence, not
within the scope of the writ of mandamus. The obvious remedy of the petitioners from the adverse
judgment by the Medical Board of Examiners was an appeal to the Professional Regulation
Commission itself, and thence to the Court of Appeals; and since they did not apply for relief to the
Commission prior to their institution of the special civil action of mandamus in the Regional Trial
Court, the omission was fatal to the action under the familiar doctrine requiring exhaustion of
administrative remedies. Apart from the obvious undesirability of a procedure which would allow
Courts to substitute their judgment for that of Government boards in the determination of successful
examinees in any administered examination – an area in which courts have no expertise – and the
circumstance that the law declares the Court of Appeals to be the appropriate review Court, the
Regional Trial Court was quite correct in refusing to take cognizance of an action seeking reversal of
the quasi-judicial action taken by the Medical Board of Examiners. 32 (Emphasis ours)

For a writ of mandamus to issue, the applicant must have a well-defined, clear, and certain legal
right to the thing demanded. The corresponding duty of the respondent to perform the required act
must be equally clear.33 No such clarity exists here; neither does petitioner’s right to demand a
revision of her examination results. And despite petitioner’s assertions that she has not made any
demand for re-correction, the most cursory perusal of her Second Amended Petition and her prayer
that the respondents "make the appropriate revisions on the results of her examination" belies this
claim.

Like the claimants in Agustin, the remedy of petitioner from the refusal of the Board to release the
Examination Papers should have been through an appeal to the PRC. Undoubtedly, petitioner had
an adequate remedy from the Board’s refusal to provide her with copies of the Examination Papers.
Under Section 5(a) of Presidential Decree No. 223, 34 the PRC has the power to promulgate rules and
regulations to implement policies for the regulation of the accounting profession. 35 In fact, it is one
such regulation (PRC Resolution No. 338) that is at issue in this case. In addition, under Section
5(c), the PRC has the power to

review, coordinate, integrate and approve the policies, resolutions, rules and regulations, orders or
decisions promulgated by the various Boards with respect to the profession or occupation under
their jurisdictions including the results of their licensure examinations but their decisions on
administrative cases shall be final and executory unless appealed to the Commission within thirty
(30) days from the date of promulgation thereof.

Petitioner posits that no remedy was available because the PRC’s power to "review" and "approve"
in Section 5(c) only refers to appeals in decisions concerning administrative investigations 36 and not
to instances where documents are being requested. Not only is this position myopic and self-serving,
it is bereft of either statutory or jurisprudential basis. The PRC’s quasi-legislative and enforcement
powers, encompassing its authority to review and approve "policies, resolutions, rules and
regulations, orders, or decisions" cover more than administrative investigations conducted pursuant
to its quasi-judicial powers.37 More significantly, since the PRC itself issued the resolution questioned
by the petitioner here, it was in the best position to resolve questions addressed to its area of
expertise. Indeed, petitioner could have saved herself a great deal of time and effort had she given
the PRC the opportunity to rectify any purported errors committed by the Board.

One of the reasons for exhaustion of administrative remedies is our well-entrenched doctrine on
separation of powers, which enjoins upon the Judiciary a becoming policy of non-interference with
matters falling primarily (albeit not exclusively) within the competence of other departments. 38 Courts,
for reasons of law, comity and convenience, should not entertain suits unless the available
administrative remedies have first been resorted to and the proper authorities have been given an
appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative
forum. 39

However, the principle of exhaustion of administrative remedies is subject to exceptions, among

which is when only a question of law is involved. 40 This is because issues of law – such as whether
petitioner has a constitutional right to demand access to the Examination Papers - cannot be
resolved with finality by the administrative officer. 41

Issues of Mootness
We now turn to the question of whether the petition has become moot in view of petitioner’s having
passed the 1998 CPA examination. An issue becomes moot and academic when it ceases to
present a justiciable controversy, so that a declaration on the issue would be of no practical use or
value.42

In this jurisdiction, any citizen may challenge any attempt to obstruct the exercise of his or her right
to information and may seek its enforcement by mandamus. 43 And since every citizen possesses the
inherent right to be informed by the mere fact of citizenship, 44 we find that petitioner’s belated
passing of the CPA Board Exams does not automatically mean that her interest in the Examination
Papers has become mere superfluity. Undoubtedly, the constitutional question presented, in view of
the likelihood that the issues in this case will be repeated, warrants review. 45

The crux of this case is whether petitioner may compel access to the Examination Documents
through mandamus. As always, our inquiry must begin with the Constitution. Section 7, Article III
provides:

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 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.

Together with the guarantee of the right to information, Section 28, Article II promotes full disclosure
and transparency in government, viz:

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.

Like all the constitutional guarantees, the right to information is not absolute. The people's right to
information is limited to "matters of public concern," and is further "subject to such limitations as may
be provided by law." Similarly, the State's policy of full disclosure is limited to "transactions involving
public interest," and is "subject to reasonable conditions prescribed by law". The Court has always
grappled with the meanings of the terms "public interest" and "public concern." As observed in
Legaspi v. Civil Service Commission: 46

In determining whether x x x 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.

We have also recognized the need to preserve a measure of confidentiality on some matters, such
as national security, trade secrets and banking transactions, criminal matters, and other confidential
matters.47

We are prepared to concede that national board examinations such as the CPA Board Exams are
matters of public concern. The populace in general, and the examinees in particular, would
understandably be interested in the fair and competent administration of these exams in order to
ensure that only those qualified are admitted into the accounting profession. And as with all matters
pedagogical, these examinations could be not merely quantitative means of assessment, but also
means to further improve the teaching and learning of the art and science of accounting.
On the other hand, we do realize that there may be valid reasons to limit access to the Examination
Papers in order to properly administer the exam. More than the mere convenience of the examiner, it
may well be that there exist inherent difficulties in the preparation, generation, encoding,
administration, and checking of these multiple choice exams that require that the questions and
answers remain confidential for a limited duration. However, the PRC is not a party to these
proceedings. They have not been given an opportunity to explain the reasons behind their
regulations or articulate the justification for keeping the Examination Documents confidential. In view
of the far-reaching implications of this case, which may impact on every board examination
administered by the PRC, and in order that all relevant issues may be ventilated, we deem it best to
remand these cases to the RTC for further proceedings.

IN VIEW OF THE FOREGOING, the petitions are GRANTED. The December 11, 2006 and
February 16, 2004 Decisions of the Court of Appeals in CA-GR SP No. 76546 and CA-GR SP No.
76498, respectively, are hereby SET ASIDE. The November 11, 2002 and January 30, 2003 Orders
of the Regional Trial Court of Manila, Branch 33, in Civil Case No. 98-86881 are AFFIRMED. The
case is remanded to the Regional Trial Court for further proceedings.

SO ORDERED.
G.R. No. 200238               November 20, 2012

PHILIPPINE SAVINGS BANK (PSBANK) and PASCUAL M. GARCIA III, as representative of

Philippine Savings Bank and in his personal capacity, Petitioners,
vs.
SENATE IMPEACHMENT COURT, consisting of the senators of the republic of the philippines
acting as senator judges, namely: JUAN PONCE ENRILE, JINGGOY EJERCITO ESTRADA,
VICENTE C. SOTTO III, ALAN PETER S. CAYETANO, EDGARDO J. ANGARA, JOKER P.
ARROYO, PIA S. CAYETANO, FRANKLIN M. DRILON, FRANCIS G. ESCUDERO, TEOFISTO
GUINGONA III, GREGORIO B. HONASAN II, PANFILO M. LACSON, MANUEL M. LAPID, LOREN
B. LEGARDA, FERDINAND R. MARCOS, JR., SERGIO R. OSMENA III, FRANCIS "KIKO"
PANGILINAN, AQUILINO PIMENTEL III, RALPH G. RECTO, RAMON REVILLA, JR., ANTONIO F.
TRILLANES IV, MANNY VILLAR; and THE HONORABLE MEMBERS OF THE PROSECUTION
PANEL OF THE HOUSE OF REPRESENTATIVES, Respondents.

RESOLUTION

PERLAS-BERNABE, J.:

Petitioners Philippine Savings Bank (PSBank) and Pascual M. Garcia III, as President of PSBank,
filed a Petition for Certiorari and Prohibition seeking to nullity and set aside the Resolution of
1 

respondent Senate of the Republic of the Philippines, sitting as an Impeachment Court, which
granted the prosecution's requests for subpoena duces tecum ad testificandum to PSBank and/or its
2 

representatives requiring them to testify and produce before the Impeachment Court documents
relative to the foreign currency accounts that were alleged to belong to then Suprerpe Court Chief
Justice Renato C. Corona.

On November 5, 2012, and during the pendency of this petition, petitioners filed a Motion with Leave
of Court to Withdraw the Petition averring that subsequent events have overtaken the petition and
3 

that, with the termination of the impeachment proceedings against former Chief Justice Corona, they
are no longer faced with the dilemma of either violating Republic Act No. 6426 (RA 6426) or being
held in contempt of court for refusing to disclose the details of the subject foreign currency deposits.

It is well-settled that courts will not determine questions that have become moot and academic
because there is no longer any justiciable controversy to speak of. The judgment will not serve any
useful purpose or have any practical legal effect because, in the nature of things, it cannot be
enforced. In Gancho-on v. Secretary of Labor and Employment, the Court ruled:
4  5 

It is a rule of universal application that courts of justice constituted to pass upon substantial rights will
not consider questions in which no actual interests are involved; they decline jurisdiction of moot
cases. And where the issue has become moot and academic, there is no justiciable controversy, so
that a declaration thereon would be of no practical use or value. There is no actual substantial relief
to which petitioners would be entitled and which would be negated by the dismissal of the petition.
(Citations omitted)

Indeed, the main issue of whether the Impeachment Court acted arbitrarily when it issued the
assailed subpoena to obtain information concerning the subject foreign currency deposits
notwithstanding the confidentiality of such deposits under RA 6426 has been overtaken by events.
The supervening conviction of Chief Justice Corona on May 29, 2012, as well as his execution of a
waiver against the confidentiality of all his bank accounts, whether in peso or foreign currency, has
rendered the present petition moot and academic.
On the basis of the foregoing, the Court finds it appropriate to abstain from passing upon the merits
of this case where legal relief is no longer needed nor called for.
1âwphi1

WHEREFORE, the petition is DISMISSED for having become moot and academic and the
temporary restraining order issued by the Court on February 9, 2012 is LIFTED.

SO ORDERED.
A.M. No. 09-8-6-SC               June 13, 2012

RE: REQUEST FOR COPY OF 2008 STATEMENT OF ASSETS, LIABILITIES AND NETWORTH
[SALN] AND PERSONAL DATA SHEET OR CURRICULUM VITAE OF THE JUSTICES OF THE
SUPREME COURT AND OFFICERS AND EMPLOYEES OF THE JUDICIARY.

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

A.M. No. 09-8-07-CA

RE: REQUEST OF PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM [PCIJ] FOR THE
2008 STATEMENT OF ASSETS, LIABILITIES AND NET WORTH [SALN] AND PERSONAL
DATA SHEETS OF THE COURT OF APPEALS JUSTICES.

RESOLUTION

MENDOZA, J.:

In a letter, dated July 30, 2009, Rowena C. Paraan, Research Director of the Philippine Center for
1 

Investigative Journalism (PCIJ), sought copies of the Statement of Assets, Liabilities and

Networth (SALN) of the Justices of this Court for the year 2008. She also requested for copies of the
Personal Data Sheet (PDS) or the Curriculum Vitae (CV) of the Justices of this Court for the purpose
of updating their database of information on government officials.

In her Letter, dated August 13, 2009, Karol M. Ilagan, a researcher-writer also of the PCIJ, likewise
2 

sought for copies of the SALN and PDS of the Justices of the Court of Appeals (CA), for the same
above-stated purpose.

The two requests were ordered consolidated by the Court on August 18, 2009. On the same day,
3 

the Court resolved to create a special committee (Committee) to review the policy on requests for
SALN and PDS and other similar documents, and to recommend appropriate action on such
requests.4

On November 23, 2009, the Committee, chaired by then Associate Justice Minita V. Chico-Nazario
submitted its Memorandum dated November 18, 2009 and its Resolution dated November 16, 2009,
5  6 

recommending the creation of Committee on Public Disclosure that would, in essence, take over the
functions of the Office of the Court Administrator (OCA) with respect to requests for copies of, or
access to, SALN, and other personal documents of members of the Judiciary.

Meanwhile, several requests for copies of the SALN and other personal documents of the Justices of
this Court, the CA and the Sandiganbayan (SB) were filed. In particular, these requests include the:

(1) SUBPOENA DUCES TECUM, dated September 10, 2009, issued by Atty. E. H. Amat,
7 

Acting Director, General Investigation Bureau-B of the Office of the Ombudsman, directing
the Office of Administrative Services, Supreme Court to submit two (2) copies of the SALN of
Associate Justice Roland B. Jurado of the Sandiganbayan for the years 1997-2008, his
latest PDS, his Oath of Office, appointment papers, and service records.
(2) LETTER, dated April 21, 2010, of the Philippine Public Transparency Reporting Project,
8 

asking permission to be able to access and copy the SALN of officials and employees of the
lower courts.

(3) LETTER, filed on August 24, 2011, by Marvin Lim, seeking copies of the SALN of Chief
9 

Justice Renato C. Corona, Associate Justices Antonio T. Carpio, Presbitero J. Velasco, Jr.,
Teresita Leonardo-De Castro, Arturo D. Brion, Diosdado M. Peralta, Lucas P. Bersamin,
Mariano C. Del Castillo, Roberto A. Abad, Martin S. Villarama, Jr., Jose Portugal Perez, Jose
C. Mendoza, and Maria Lourdes P.A. Sereno.

(4) LETTER, dated August 26, 2011, of Rawnna Crisostomo, Reporter, GMA News and
10 

Public Affairs also requesting for copies of the SALN of Chief Justice Renato C. Corona,
Associate Justices Antonio T. Carpio, Presbitero J. Velasco, Jr., Teresita Leonardo-De
Castro, Arturo D. Brion, Diosdado M. Peralta, Lucas P. Bersamin, Mariano C. Del Castillo,
Roberto A. Abad, Martin S. Villarama, Jr., Jose Portugal Perez, Jose C. Mendoza, and Maria
Lourdes P.A. Sereno, for purposes of producing a story on transparency and governance,
and updating their database.

(5) LETTER, dated October 11, 2011, of Bala S. Tamayo, requesting for a copy of the 2010
11 

SALN of any Justice of the Supreme Court as well as a copy of the Judiciary Development
Fund, for purposes of her securing a huge percentage in final examination in Constitutional
Law I at the San Beda College Alabang School of Law and for her study on the state of the
Philippine Judiciary, particularly the manner, nature and disposition of the resources under
the JDF and how these have evolved through the years.

(6) LETTERS, all dated December 19, 2011, of Harvey S. Keh, Lead Convenor of Kaya
Natin! Movement for Good Governance and Ethical Leadership, addressed to Chief Justice
Renato C. Corona, Associate Justices Presbitero J. Velasco, Jr., Teresita Leonardo-De
12  13 

Castro, Arturo D. Brion, Diosdado M. Peralta, Mariano C. Del Castillo, Jose Portugal
14  15  16  17 

Perez, and Maria Lourdes P.A. Sereno, requesting for copies of their SALN and seeking
18  19 

permission to post the same on their website for the general public.

(7) LETTER, dated December 21, 2011, of Glenda M. Gloria, Executive Director,
20 

Newsbreak, seeking copies of the SALN of the Supreme Court Justices covering various
years, for the purpose of the stories they intend to put on their website regarding the
Supreme Court and the Judiciary.

(8) LETTERS, all dated January 3, 2012, of Phillipe Manalang of Unlimited Productions, Inc.,
addressed to Associate Justices Presbitero J. Velasco, Jr., Teresita Leonardo-De
21 

Castro, Mariano C. Del Castillo and Jose Portugal Perez, and Atty. Enriqueta Esguerra-
22  23  24 

Vidal, Clerk of Court, Supreme Court requesting for copies of the SALN of the Supreme
25 

Court Justices for the years 2010 and 2011.

(9) LETTER, dated December 19, 2011, of Malou Mangahas, Executive Director, PCIJ,
26 

requesting for copies of the SALN, PDS or CVs of the Justices of the Supreme Court from
the year they were appointed to the present.

(10) SUBPOENA AD TESTIFICANDUM ET DUCES TECUM, issued on January 17, 2012,

27 

by the Senate, sitting as an Impeachment Court, in connection with Impeachment Case No.
002-2011 against Chief Justice Renato C. Corona, requiring the Clerk of Court, among
others, to bring with her the SALN of Chief Justice Renato C. Corona for the years 2002 to
2011.
(11) LETTER, dated January 16, 2012, of Nilo "Ka Nilo" H. Baculo, Sr., requesting copies of
28 

the SALN of the Supreme Court Justices for the years 2008 to 2011, for his use as a media
practitioner.

(12) LETTER, dated January 25, 2012, of Roxanne Escaro-Alegre of GMA News,
29 

requesting for copies of the SALN of the Supreme Court Justices for the network’s story on
the political dynamics and process of decision-making in the Supreme Court.

(13) LETTER, dated January 27, 2012, of David Jude Sta. Ana, Head, News Operations,
30 

News 5, requesting for copies of the 2010-2011 SALN of the Supreme Court Justices for use
as reference materials for stories that will be aired in the newscasts of their television
network.

(14) LETTER, dated January 31, 2012, of Michael G. Aguinaldo, Deputy Executive
31 

Secretary for Legal Affairs, Malacañang, addressed to Atty. Enriqueta Esguerra-Vidal, Clerk
of Court, Supreme Court, seeking her comments and recommendation on House Bill No.
5694, to aid in their determination of whether the measure should be certified as urgent.
32 

(15) Undated LETTER of Benise P. Balaoing, Intern of Rappler.com, a news website,

33 

seeking copies of the 2010 SALN of the Justices of the Court and the CA for the purpose of
completing its database in preparation for its coverage of the 2013 elections.

(16) LETTER, dated April 27, 2012, of Maria A. Ressa, Chief Executive Officer and
34 

Executive Officer and Executive Editor of Rappler, Inc., requesting for copies of the current
SALN of all the Justices of the Supreme Court, the Court of Appeals and the Sandiganbayan
also for the purpose of completing its database in preparation for its coverage of the 2013
elections.

(17) LETTER, dated May 2, 2012, of Mary Ann A. Señir, Junior Researcher, News Research
35 

Section, GMA News and Public Affairs, requesting for copies of the SALN of Chief Justice
Renato C. Corona and the Associate Justices of the Supreme Court for the calendar year
2011 for the network’s use in their public affairs programs.

(18) LETTER, dated May 4, 2012, of Edward Gabud, Sr., Desk Editor of Solar Network, Inc.,
36 

requesting for copies of the 2011 SALN of all the Justices of the Supreme Court.

(19) LETTER, dated May 30, 2012, of Gerry Lirio, Senior News Editor, TV5 requesting for
37 

copies of the SALN of the Justices of the Court for the last three (3) years for the purpose of
a special report it would produce as a result of the impeachment and subsequent conviction
of Chief Justice Renato C. Corona.

(20) LETTER, dated May 31, 2012, of Atty. Joselito P. Fangon, Assistant Ombudsman, Field
38 

Investigation Office, Office of the Ombudsman, requesting for 1] certified copies of the SALN
of former Chief Justice Renato C. Corona for the years 2002-2011, as well as 2] a certificate
of his yearly compensation, allowances, and bonuses, also for the years 2002-2011.

(21) LETTER, dated June 8, 2012, of Thea Marie S. Pias, requesting a copy of the SALN of
39 

any present Supreme Court Justice, for the purpose of completing her grade in Legal
Philosophy at the San Beda College of Law.
Pursuant to Section 6, Article VIII of the 1987 Constitution, the Court, upon recommendation of the
40 

OCA, issued its Resolution dated October 13, 2009, denying the subpoena duces tecum for the
41 

SALNs and personal documents of Justice Roland B. Jurado of the SB. The resolution also directed
the Ombudsman to forward to the Court any complaint and/or derogatory report against Justice
Roland B. Jurado, in consonance with the doctrine laid down in Caiobes v. Ombudsman. Upon 42 

compliance by the Ombudsman, the Court, in its Resolution dated February 2, 2010, docketed this
43 

matter as a regular administrative complaint.44

Also, considering the development in Impeachment Case No. 002-2011 against Chief Justice
Renato C. Corona, the Court, on January 24, 2012, resolved to consider moot the Subpoena Ad
Testificandum Et Duces Tecum issued by the Senate impeachment court. 45

In resolving the remaining pending incidents, the Court, on January 17, 2012 required the CA, the
SB, the CTA, the Philippine Judges Association, the Metropolitan and City Judges Association of the
Philippines, the Philippine Trial Judges League, and the Philippine Women Judges Association
(PWJA), to file their respective comments.

In essence, it is the consensus of the Justices of the above-mentioned courts and the various judges
associations that while the Constitution holds dear the right of the people to have access to matters
of concern, the Constitution also holds sacred the independence of the Judiciary. Thus, although no
direct opposition to the disclosure of SALN and other personal documents is being expressed, it is
the uniform position of the said magistrates and the various judges’ associations that the disclosure
must be made in accord with the guidelines set by the Court and under such circumstances that
would not undermine the independence of the Judiciary.

After a review of the matters at hand, it is apparent that the matter raised for consideration of the
Court is not a novel one. As early as 1989, the Court had the opportunity to rule on the matter of
SALN disclosure in Re: Request of Jose M. Alejandrino, where the Court denied the request of Atty.
46 

Alejandrino for the SALNs of the Justices of the Court due to a "plainly discernible" improper motive.
Aggrieved by an adverse decision of the Court, he accused the Justices of patent partiality and
alluded that they enjoyed an early Christmas as a result of the decision promulgated by the Court.
Atty. Alejandrino even singled out the Justices who took part in the decision and conspicuously
excluded the others who, for one reason or another, abstained from voting therein. While the Court
expressed its willingness to have the Clerk of Court furnish copies of the SALN of any of its
members, it however, noted that requests for SALNs must be made under circumstances that must
not endanger, diminish or destroy the independence, and objectivity of the members of the Judiciary
in the performance of their judicial functions, or expose them to revenge for adverse decisions,
kidnapping, extortion, blackmail or other untoward incidents. Thus, in order to give meaning to the
constitutional right of the people to have access to information on matters of public concern, the
Court laid down the guidelines to be observed for requests made. Thus:

1. All requests for copies of statements of assets and liabilities of any Justice or Judge shall
be filed with the Clerk of Court of the Supreme Court or with the Court Administrator, as the
case may be (Section 8 [A][2], R.A. 6713), and shall state the purpose of the request.

2. The independence of the Judiciary is constitutionally as important as the right to

information which is subject to the limitations provided by law. Under specific circumstances,
the need for fair and just adjudication of litigations may require a court to be wary of
deceptive requests for information which shall otherwise be freely available. Where the
request is directly or indirectly traced to a litigant, lawyer, or interested party in a case
pending before the court, or where the court is reasonably certain that a disputed matter will
come before it under circumstances from which it may, also reasonably, be assumed that the
 request is not made in good faith and for a legitimate purpose, but to fish for information and,
with the implicit threat of its disclosure, to influence a decision or to warn the court of the
unpleasant consequences of an adverse judgment, the request may be denied.

3. Where a decision has just been rendered by a court against the person making the
request and the request for information appears to be a "fishing expedition" intended to
harass or get back at the Judge, the request may be denied.

4. In the few areas where there is extortion by rebel elements or where the nature of their
work exposes Judges to assaults against their personal safety, the request shall not only be
denied but should be immediately reported to the military.

5. The reason for the denial shall be given in all cases.

In the 1992 case of Re: Request for Certified True Copies of the Sworn Statements of Assets,
Liabilities and Networth, the request was denied because the Court found that the purpose of the
47 

request was to fish for information against certain members of the Judiciary. In the same case, the
Court resolved to authorize the Court Administrator to act on all requests for copies of SALN, as well
as other papers on file with the 201 Personnel Records of lower court judges and personnel,
provided that there was a court subpoena duly signed by the Presiding Judge in a pending criminal
case against a judge or personnel of the Judiciary. The Court added that for requests made by the
Office of the Ombudsman, the same must be personally signed by the Ombudsman himself.
Essentially, the Court resolved that, in all instances, requests must conform to the guidelines set in
the Alejandrino case and that the documents or papers requested for must be relevant and material
to the case being tried by the court or under investigation by the Ombudsman.

In 1993, the Court, in Request for Certified True Copies of the Sworn Statements of Assets,
Liabilities and Net Worth of former Judge Luis D. Dictado, ruled that the OCA may extend its
48 

granted authority to retired members of the Judiciary.

With respect to investigations conducted by the Office of the Ombudsman in a criminal case against
a judge, the Court, in Maceda v. Vasquez, upheld its constitutional duty to exercise supervision over
49 

all inferior courts and ruled that an investigation by the Office of the Ombudsman without prior
referral of the criminal case to the Court was an encroachment of a constitutional duty that ran afoul
to the doctrine of separation of powers. This pronouncement was further amplified in the
abovementioned case of Caiobes. Thus:

x x x Under Section 6, Article VIII of the Constitution, it is the Supreme Court which is vested with
exclusive administrative supervision over all courts and its personnel. Prescinding from this premise,
the Ombudsman cannot determine for itself and by itself whether a criminal complaint against a
judge, or court employee, involves an administrative matter. The Ombudsman is duty bound to have
all cases against judges and court personnel filed before it, referred to the Supreme Court for
determination as to whether an administrative aspect is involved therein. This rule should hold true
regardless of whether an administrative case based on the act subject of the complaint before the
Ombudsman is already pending with the Court. For, aside from the fact that the Ombudsman would
not know of this matter unless he is informed of it, he should give due respect for and recognition of
the administrative authority of the Court, because in determining whether an administrative matter is
involved, the Court passes upon not only administrative liabilities but also administrative concerns,
as is clearly conveyed in the case of Maceda v. Vasquez (221 SCRA 464[1993]).

The Ombudsman cannot dictate to, and bind the Court, to its findings that the case before it does or
does not have administrative implications. To do so is to deprive the Court of the exercise of its
administrative prerogatives and to arrogate unto itself a power not constitutionally sanctioned. This is
a dangerous policy which impinges, as it does, on judicial independence.

Maceda is emphatic that by virtue of its constitutional power of administrative supervision over all
courts and court personnel, from the Presiding Justice of the Court of Appeals down to the lowest
municipal trial court clerk, it is only the Supreme Court that can oversee the judges’ and court
personnel’s compliance with all laws, and take the proper administrative action against them if they
commit any violation thereof. No other branch of government may intrude into this power, without
running afoul of the doctrine of separation of powers.

Corollary to the above pronouncements, Section 7, Article III of the Constitution is relevant in the
issue of public disclosure of SALN and other documents of public officials, viz:

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.

Emphasizing the import and meaning of the foregoing constitutional provision, the Court, in the
landmark case of Valmonte v. Belmonte, Jr., elucidated on the import of the right to information in
50 

this wise:

The cornerstone of this republican system of government is delegation of power by the people to the
State. In this system, governmental agencies and institutions operate within the limits of the authority
conferred by the people. Denied access to information on the inner workings of government, the
citizenry can become prey to the whims and caprices of those to whom the power had been
delegated. The postulate of public office is a public trust, institutionalized in the Constitution
to protect the people from abuse of governmental power, would certainly be mere empty
words if access to such information of public concern is denied x x x.

x x x The right to information goes hand-in-hand with the constitutional policies of full public
disclosure and honesty in the public service. It is meant to enhance the widening role of the
citizenry in governmental decision-making as well as in checking abuse in
government. (Emphases supplied)

In Baldoza v. Dimaano, the importance of the said right was pragmatically explicated:
51 

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." However, restrictions on access to certain records may be
imposed by law.

Thus, while "public concern" like "public interest" eludes exact definition and has been said to
embrace a broad spectrum of subjects which the public may want to know, either because such
matters directly affect their lives, or simply because such matters naturally arouse the interest of an
ordinary citizen, the Constitution itself, under Section 17, Article XI, has classified the information
52 

disclosed in the SALN as a matter of public concern and interest. In other words, a "duty to disclose"
sprang from the "right to know." Both of constitutional origin, the former is a command while the
latter is a permission. Hence, the duty on the part of members of the government to disclose their
SALNs to the public in the manner provided by law:

Section 17. A public officer or employee shall, upon assumption of office and as often thereafter as
may be required by law, submit a declaration under oath of his assets, liabilities, and net worth. In
the case of the President, the Vice-President, the Members of the Cabinet, the Congress, the
Supreme Court, the Constitutional Commissions and other constitutional offices, and officers of the
armed forces with general or flag rank, the declaration shall be disclosed to the public in the
manner provided by law. [Emphasis supplied]

This Constitutional duty is echoed and particularized in a statutory creation of Congress: Republic
Act No. 6713, also known as "Code of Conduct and Ethical Standards for Public Officials and
Employees": 53

Section 8. Statements and Disclosure. - Public officials and employees have an obligation to
accomplish and submit declarations under oath of, and the public has the right to know, their
assets, liabilities, net worth and financial and business interests including those of their spouses and
of unmarried children under eighteen (18) years of age living in their households.

(A) Statements of Assets and Liabilities and Financial Disclosure. - All public officials and
employees, except those who serve in an honorary capacity, laborers and casual or temporary
workers, shall file under oath their Statement of Assets, Liabilities and Net Worth and a Disclosure of
Business Interests and Financial Connections and those of their spouses and unmarried children
under eighteen (18) years of age living in their households.

The two documents shall contain information on the following:

(a) real property, its improvements, acquisition costs, assessed value and current fair market
value;

(b) personal property and acquisition cost;

(c) all other assets such as investments, cash on hand or in banks, stocks, bonds, and the
like;

(d) liabilities, and;

(e) all business interests and financial connections.

The documents must be filed:

(a) within thirty (30) days after assumption of office;

(b) on or before April 30, of every year thereafter; and

(c) within thirty (30) days after separation from the service.

All public officials and employees required under this section to file the aforestated documents shall
also execute, within thirty (30) days from the date of their assumption of office, the necessary
authority in favor of the Ombudsman to obtain from all appropriate government agencies, including
the Bureau of Internal Revenue, such documents as may show their assets, liabilities, net worth, and
also their business interests and financial connections in previous years, including, if possible, the
year when they first assumed any office in the Government.

Husband and wife who are both public officials or employees may file the required statements jointly
or separately.

The Statements of Assets, Liabilities and Net Worth and the Disclosure of Business Interests and
Financial Connections shall be filed by:

(1) Constitutional and national elective officials, with the national office of the Ombudsman;

(2) Senators and Congressmen, with the Secretaries of the Senate and the House of
Representatives, respectively; Justices, with the Clerk of Court of the Supreme Court;
Judges, with the Court Administrator; and all national executive officials with the Office of the
President.

(3) Regional and local officials and employees, with the Deputy Ombudsman in their
respective regions;

(4) Officers of the armed forces from the rank of colonel or naval captain, with the Office of
the President, and those below said ranks, with the Deputy Ombudsman in their respective
regions; and

(5) All other public officials and employees, defined in Republic Act No. 3019, as amended,
with the Civil Service Commission.

(B) Identification and disclosure of relatives. - It shall be the duty of every public official or employee
to identify and disclose, to the best of his knowledge and information, his relatives in the
Government in the form, manner and frequency prescribed by the Civil Service Commission.
(Emphasis supplied)

Like all constitutional guarantees, however, the right to information, with its companion right of
access to official records, is not absolute. While providing guaranty for that right, the Constitution
also provides that the people’s right to know is limited to "matters of public concern" and is further
subject to such limitations as may be provided by law.

Jurisprudence has provided the following limitations to that right: (1) national security matters and
54 

intelligence information; (2) trade secrets and banking transactions; (3) criminal matters; and (4)
other confidential information such as confidential or classified information officially known to public
officers and employees by reason of their office and not made available to the public as well as
diplomatic correspondence, closed door Cabinet meetings and executive sessions of either house of
Congress, and the internal deliberations of the Supreme Court.

This could only mean that while no prohibition could stand against access to official records, such as
the SALN, the same is undoubtedly subject to regulation.

In this regard, Section 8 (c) and (d) of R.A. No. 6713 provides for the limitation and prohibition on the
regulated access to SALNs of government officials and employees, viz:

(C) Accessibility of documents. - (1) Any and all statements filed under this Act, shall be made
available for inspection at reasonable hours.
 (2) Such statements shall be made available for copying or reproduction after ten (10)
working days from the time they are filed as required by law.

(3) Any person requesting a copy of a statement shall be required to pay a reasonable fee to
cover the cost of reproduction and mailing of such statement, as well as the cost of
certification.

(4) Any statement filed under this Act shall be available to the public for a period of ten (10)
years after receipt of the statement. After such period, the statement may be destroyed
unless needed in an ongoing investigation.

(D) Prohibited acts. - It shall be unlawful for any person to obtain or use any statement filed under
this Act for:

(a) any purpose contrary to morals or public policy; or

(b) any commercial purpose other than by news and communications media for
dissemination to the general public.

Moreover, the following provisions in the Implementing Rules and Regulations of R.A. No. 6713
provide:

Rule IV
Transparency of Transactions and Access to Information

xxxx

Section 3. Every department, office or agency shall provide official information, records or
documents to any requesting public, except if:

(a) such information, record or document must be kept secret in the interest of national
defense or security or the conduct of foreign affairs;

(b) such disclosure would put the life and safety of an individual in imminent danger;

(c) the information, record or document sought falls within the concepts of established
privilege or recognized exceptions as may be provided by law or settled policy or
jurisprudence;

(d) such information, record or document compromises drafts or decisions, orders, rulings,
policy, decisions, memoranda, etc;

(e) it would disclose information of a personal nature where disclosure would constitute a
clearly unwarranted invasion of personal privacy;

(f) it would disclose investigatory records complied for law enforcement purposes, or
information which if written would be contained in such records or information would (i)
interfere with enforcement proceedings, (ii) deprive a person of a right to a fair trial or an
impartial adjudication, (iii) disclose the identity of a confidential source and, in the case of a
record compiled by a criminal law enforcement authority in the course of a criminal
investigation, or by an agency conducting a lawful national security intelligence investigation,
 confidential information furnished only by the confidential source, or (iv) unjustifiably disclose
investigative techniques and procedures; or

(g) it would disclose information the premature disclosure of which would (i) in the case of a
department, office or agency which agency regulates currencies, securities, commodities, of
financial institutions, be likely to lead to significant financial speculation in currencies,
securities, or commodities or significantly endanger the stability of any financial institution, or
(ii) in the case of any department, office or agency be likely or significantly to frustrate
implementation of a proposed official action, except that subparagraph (f) (ii) shall not apply
in any instance where the department, office or agency has already disclosed to the public
the content or nature of its proposed action, or where the department, office or agency is
required by law to make such disclosure on its own initiative prior to taking final official action
on such proposal.

xxxx

Rule VI
Duties of Public Officials and Employees

Section 6. All public documents must be made accessible to, and readily available for inspection by,
the public during working hours, except those provided in Section 3, Rule IV.

The power to regulate the access by the public to these documents stems from the inherent power
of the Court, as custodian of these personal documents, to control its very office to the end that
damage to, or loss of, the records may be avoided; that undue interference with the duties of the
custodian of the books and documents and other employees may be prevented; and that the right of
other persons entitled to make inspection may be insured. 55

In this connection, Section 11 of the same law provides for the penalties in case there should be a
misuse of the SALN and the information contained therein, viz:

Section 11. Penalties. - (a) Any public official or employee, regardless of whether or not he holds
office or employment in a casual, temporary, holdover, permanent or regular capacity, committing
any violation of this Act shall be punished with a fine not exceeding the equivalent of six (6) months'
salary or suspension not exceeding one (1) year, or removal depending on the gravity of the offense
after due notice and hearing by the appropriate body or agency. If the violation is punishable by a
heavier penalty under another law, he shall be prosecuted under the latter statute. Violations of
Sections 7, 8 or 9 of this Act shall be punishable with imprisonment not exceeding five (5) years, or a
fine not exceeding five thousand pesos (₱ 5,000), or both, and, in the discretion of the court of
competent jurisdiction, disqualification to hold public office.

(b) Any violation hereof proven in a proper administrative proceeding shall be sufficient
cause for removal or dismissal of a public official or employee, even if no criminal
prosecution is instituted against him.

(c) Private individuals who participate in conspiracy as co-principals, accomplices or

accessories, with public officials or employees, in violation of this Act, shall be subject to the
same penal liabilities as the public officials or employees and shall be tried jointly with them.

(d) The official or employee concerned may bring an action against any person who obtains
or uses a report for any purpose prohibited by Section 8 (d) of this Act. The Court in which
 such action is brought may assess against such person a penalty in any amount not to
exceed twenty-five thousand pesos (₱ 25,000.00). If another sanction hereunder or under
any other law is heavier, the latter shall apply.

Considering the foregoing legal precepts vis-à-vis the various requests made, the Court finds no
cogent reason to deny the public access to the SALN, PDS and CV of the Justices of the Court and
other magistrates of the Judiciary subject, of course, to the limitations and prohibitions provided in
R.A. No. 6713, its implementing rules and regulations, and in the guidelines set forth in the decretal
portion.

The Court notes the valid concerns of the other magistrates regarding the possible illicit motives of
some individuals in their requests for access to such personal information and their publication.
However, custodians of public documents must not concern themselves with the motives, reasons
and objects of the persons seeking access to the records. The moral or material injury which their
misuse might inflict on others is the requestor’s responsibility and lookout. Any publication is made
subject to the consequences of the law. While public officers in the custody or control of public
56 

records have the discretion to regulate the manner in which records may be inspected, examined or
copied by interested persons, such discretion does not carry with it the authority to prohibit access,
inspection, examination, or copying of the records. After all, public office is a public trust. Public
57 

officers and employees must, at all times, be accountable to the people, serve them with utmost
responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives. 58

WHEREFORE, the Court resolves to GRANT the requests contained in the (1) Letter, dated July 30,
2009, of Rowena C. Paraan; (2) Letter, dated August 13, 2009, of Karol M. Ilagan; (3) Letter, dated
April 21, 2010, of the Philippine Public Transparency Reporting Project; (4) Letter, filed on August
24, 2011, by Marvin Lim; (5) Letter, dated August 26, 2011, of Rawnna Crisostomo; (6) Letter, dated
October 11, 2011, of Bala S. Tamayo; (7) Letters, all dated December 19, 2011, of Harvey S. Keh;
(8) Letter, dated December 21, 2011, of Glenda M. Gloria; (9) Letters, all dated January 3, 2012, of
Phillipe Manalang; (10) Letter, dated December 19, 2011, of Malou Mangahas; (11) Letter, dated
January 16, 2012, of Nilo "Ka Nilo" H. Baculo; (12) Letter, dated January 25, 2012, of Roxanne
Escaro-Alegre; (13) Letter, dated January 27, 2012, of David Jude Sta. Ana; (14) Letter, dated
January 31, 2012, of Michael G. Aguinaldo; (15) undated Letter of Benise P. Balaoing; (16) Letter,
dated April 27, 2012, of Maria A. Ressa; (17) Letter, dated May 2, 2012, of Mary Ann A. Señir; (18)
Letter, dated May 4, 2012, of Edward Gabud, Sr., Desk Editor of Solar Network, Inc.; (19) Letter,
dated May 30, 2012, of Gerry Lirio, Senior News Editor, TV5; (20) Letter, dated May 31, 2002, of
Atty. Joselito P. Fangon of the Office of the Ombudsman; and (21) Letter, dated June 7, 2012, of
Thea Marie S. Pias, insofar as copies of the 2011 SALN, PDS, and CV of the Justices of the
Supreme Court, the Court of Appeals, the Sandiganbayan, and the Court of Tax Appeals; Judges of
lower courts; and other members of the Judiciary, are concerned, subject to the limitations and
prohibitions provided in R.A. No. 6713, its implementing rules and regulations, and the following
guidelines:

1. All requests shall be filed with the Office of the Clerk of Court of the Supreme Court, the
Court of Appeals, the Sandiganbayan, the Court of Tax Appeals; for the lower courts, with
the Office of the Court Administrator; and for attached agencies, with their respective heads
of offices.

2. Requests shall cover only copies of the latest SALN, PDS and CV of the members,
officials and employees of the Judiciary, and may cover only previous records if so
specifically requested and considered as justified, as determined by the officials mentioned
in par. 1 above, under the terms of these guidelines and the Implementing Rules and
Regulations of R.A. No. 6713.
 3. In the case of requests for copies of SALN of the Justices of the Supreme Court, the Court
of Appeals, the Sandiganbayan and the Court of Tax Appeals, the authority to disclose shall
be made by the Court En Banc.

4. Every request shall explain the requesting party’s specific purpose and their individual
interests sought to be served; shall state the commitment that the request shall only be for
the stated purpose; and shall be submitted in a duly accomplished request form secured
from the SC website. The use of the information secured shall only be for the stated purpose.

5. In the case of requesting individuals other than members of the media, their interests
should go beyond pure or mere curiosity. 1âwphi1

6. In the case of the members of the media, the request shall additionally be supported by
proof under oath of their media affiliation and by a similar certification of the accreditation of
their respective organizations as legitimate media practitioners.

7. The requesting party, whether as individuals or as members of the media, must have no
derogatory record of having misused any requested information previously furnished to
them.

The requesting parties shall complete their requests in accordance with these guidelines. The
custodians of these documents (the respective Clerks of Court of the Supreme Court, Court of
59 

Appeals, Sandiganbayan, and Court of Tax Appeals for the Justices; and the Court Administrator for
the Judges of various trial courts) shall preliminarily determine if the requests are not covered by the
limitations and prohibitions provided in R.A. No. 6713 and its implementing rules and regulations,
and in accordance with the aforecited guidelines. Thereafter, the Clerk of Court shall refer the matter
pertaining to Justices to the Court En Banc for final determination.

SO ORDERED.
G.R. Nos. L-32613-14 December 27, 1972

PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. SIMEON. FERRER (in his capacity as Judge of the Court of First Instance of Tarlac,
Branch I), FELICIANO CO alias LEONCIO CO alias "Bob," and NILO S. TAYAG alias Romy
Reyes alias "Taba," respondents.

Solicitor R. Mutuc for respondent Feliciano Co.

Jose W. Diokno for respondent Nilo Tayag.

CASTRO, J.:p

I. Statement of the Case

Posed in issue in these two cases is the constitutionality of the Anti-Subversion

Act,1 which outlaws the Communist Party of the Philippines and other "subversive associations," and punishes any person who "knowingly,
willfully and by overt acts affiliates himself with, becomes or remains a member" of the Party or of any other similar "subversive" organization.

On March 5, 1970 a criminal complaint for violation of section 4 of the Anti-Subversion Act was filed
against the respondent Feliciano Co in the Court of First Instance of Tarlac. On March 10 Judge
Jose C. de Guzman conducted a preliminary investigation and, finding a prima facie case against
Co, directed the Government prosecutors to file the corresponding information. The twice-amended
information, docketed as Criminal Case No. 27, recites:

That on or about May 1969 to December 5, 1969, in the Municipality of Capas,

Province of Tarlac, Philippines, and within the jurisdiction of this Honorable Court, the
abovenamed accused, feloniously became an officer and/or ranking leader of the
Communist Party of the Philippines, an outlawed and illegal organization aimed to
overthrow the Government of the Philippines by means of force, violence, deceit,
subversion, or any other illegal means for the purpose of establishing in the
Philippines a totalitarian regime and placing the government under the control and
domination of an alien power, by being an instructor in the Mao Tse Tung University,
the training school of recruits of the New People's Army, the military arm of the said
Communist Party of the Philippines.

That in the commission of the above offense, the following aggravating

circumstances are present, to wit:

(a) That the crime has been committed in contempt of or with insult to public
authorities;

(b) That the crime was committed by a band; and afford impunity.

(c) With the aid of armed men or persons who insure or afford impunity.

Co moved to quash on the ground that the Anti-Subversion Act is a bill of attainder.
Meanwhile, on May 25, 1970, another criminal complaint was filed with the same court, sharing the
respondent Nilo Tayag and five others with subversion. After preliminary investigation was had, an
information was filed, which, as amended, reads:

The undersigned provincial Fiscal of Tarlac and State Prosecutors duly designated
by the Secretary of Justice to collaborate with the Provincial Fiscal of Tarlac,
pursuant to the Order dated June 5, above entitled case, hereby accuse Nilo S.
Tayag, alias Romy Reyes alias TABA, ARTHUR GARCIA, RENATO (REY) CASIPE,
ABELARDO GARCIA, MANUEL ALAVADO, BENJAMIN BIE alias COMMANDER
MELODY and several JOHN DOES, whose identities are still unknown, for violation
of REPUBLIC ACT No. 1700, otherwise known as the Anti-Subversion Law,
committed as follows:

That in or about March 1969 and for sometime prior thereto and thereafter, in the
Province of Tarlac, within the jurisdiction of this Honorable Court, and elsewhere in
the Philippines, the above-named accused knowingly, willfully and by overt acts
organized, joined and/or remained as offices and/or ranking leaders, of the
KABATAANG MAKABAYAN, a subversive organization as defined in Republic Act
No. 1700; that BENJAMIN BIE and COMMANDER MELODY, in addition thereto,
knowingly, willfully and by over acts joined and/or remained as a member and
became an officer and/or ranking leader not only of the Communist Party of the
Philippines but also of the New People's Army, the military arm of the Communist
Party of the Philippines; and that all the above-named accused, as such officers
and/or ranking leaders of the aforestated subversive organizations, conspiring,
confederating and mutually helping one another, did then and there knowingly,
willfully and feloniously commit subversive and/or seditious acts, by inciting,
instigating and stirring the people to unite and rise publicly and tumultuously and take
up arms against the government, and/or engage in rebellious conspiracies and riots
to overthrow the government of the Republic of the Philippines by force, violence,
deceit, subversion and/or other illegal means among which are the following:

1. On several occasions within the province of Tarlac, the accused conducted

meetings and/or seminars wherein the said accused delivered speeches instigating
and inciting the people to unite, rise in arms and overthrow the Government of the
Republic of the Philippines, by force, violence, deceit, subversion and/or other illegal
means; and toward this end, the said accused organized, among others a chapter of
the KABATAANG MAKABAYAN in barrio Motrico, La Paz, Tarlac for the avowed
purpose of undertaking or promoting an armed revolution, subversive and/or
seditious propaganda, conspiracies, and/or riots and/or other illegal means to
discredit and overthrow the Government of the Republic of the Philippines and to
established in the Philippines a Communist regime.

2. The accused NILO TAYAG alias ROMY REYES alias TABA, together with
FRANCISCO PORTEM alias KIKO Gonzales and others, pursued the above
subversive and/or seditious activities in San Pablo City by recruiting members for the
New People's Army, and/or by instigating and inciting the people to organize and
unite for the purpose of overthrowing the Government of the Republic of the
Philippines through armed revolution, deceit, subversion and/or other illegal means,
and establishing in the Philippines a Communist Government.
 That the following aggravating circumstances attended the commission of the
offense: (a) aid of armed men or persons to insure or afford impunity; and (b) craft,
fraud, or disguise was employed.

On July 21, 1970 Tayag moved to quash, impugning the validity of the statute on the grounds that
(1) it is a bill of attainder; (2) it is vague; (3) it embraces more than one subject not expressed in the
title thereof; and (4) it denied him the equal protection of the laws.

Resolving the constitutional issues raised, the trial court, in its resolution of September 15, 1970,
declared the statute void on the grounds that it is a bill of attainder and that it is vague and
overboard, and dismissed the informations against the two accused. The Government appealed. We
resolved to treat its appeal as a special civil action for certiorari.

II. Is the Act a Bill of Attainder?

Article III, section 1 (11) of the Constitution states that "No bill of attainder or ex port facto law shall
be enacted."  A bill of attainder is a legislative act which inflicts punishment without trial.  Its essence
2 3

is the substitution of a legislative for a judicial determination of guilt.  The constitutional ban against
4

bills of attainder serves to implement the principle of separation of powers   by confining legislatures
5

to
rule-making   and thereby forestalling legislative usurpation of the judicial function.  History in
6 7

perspective, bills of attainder were employed to suppress unpopular causes and political
minorities,   and it is against this evil that the constitutional prohibition is directed. The singling out of
8

a definite class, the imposition of a burden on it, and a legislative intent, suffice to stigmatizea statute
as a bill of attainder.  9

In the case at bar, the Anti-Subversion Act was condemned by the court a quo as a bill of attainder
because it "tars and feathers" the Communist Party of the Philippines as a "continuing menace to the
freedom and security of the country; its existence, a 'clear, present and grave danger to the security
of the Philippines.'" By means of the Act, the trial court said, Congress usurped "the powers of the
judge," and assumed "judicial magistracy by pronouncing the guilt of the CCP without any of the
forms or safeguards of judicial trial." Finally, according to the trial court, "if the only issue [to be
determined] is whether or not the accused is a knowing and voluntary member, the law is still a bill of
attainder because it has expressly created a presumption of organizational guilt which the accused
can never hope to overthrow."

1. When the Act is viewed in its actual operation, it will be seen that it does not specify the
Communist Party of the Philippines or the members thereof for the purpose of punishment. What it
does is simply to declare the Party to be an organized conspiracy for the overthrow of the
Government for the purposes of the prohibition, stated in section 4, against membership in the
outlawed organization. The term "Communist Party of the Philippines" issued solely for definitional
purposes. In fact the Act applies not only to the Communist Party of the Philippines but also to "any
other organization having the same purpose and their successors." Its focus is not on individuals but
on conduct.  10

This feature of the Act distinguishes it from section 504 of the U.S. Federal Labor-Management
Reporting and Disclosure Act of 1959   which, in U.S. vs. Brown,   was held to be a bill of attainder
11 12

and therefore unconstitutional. Section 504 provided in its pertinent parts as follows:

(a) No person who is or has been a member of the Communist

Party ... shall serve —
 (1) as an officer, director, trustee, member of any executive board or similar
governing body, business agent, manager, organizer, or other employee (other than
as an employee performing exclusively clerical or custodial duties) of any labor
organization.

during or for five years after the termination of his membership in the Communist
Party....

(b) Any person who willfully violates this section shall be fined not more than $10,000
or imprisoned for not more than one year, or both.

This statute specified the Communist Party, and imposes disability and penalties on its members.
Membership in the Party, without more, ipso facto disqualifies a person from becoming an officer or
a member of the governing body of any labor organization. As the Supreme Court of the United
States pointed out:

Under the line of cases just outlined, sec. 504 of the Labor Management Reporting
and Disclosure Act plainly constitutes a bill of attainder. Congress undoubtedly
possesses power under the Commerce Clause to enact legislation designed to keep
from positions affecting interstate commerce persons who may use of such positions
to bring about political strikes. In section 504, however, Congress has exceeded the
authority granted it by the Constitution. The statute does not set forth a generally
applicable rule decreeing that any person who commits certain acts or possesses
certain characteristics (acts and characteristics which, in Congress' view, make them
likely to initiate political strikes) shall not hold union office, and leaves to courts and
juries the job of deciding what persons have committed the specified acts or
possessed the specified characteristics. Instead, it designates in no uncertain terms
the persons who possess the feared characteristics and therefore cannot hold union
office without incurring criminal liability — members of the Communist Party.

Communist Party v. Subversive Activities Control Board, 367 US 1, 6 L ed 2d 625, 81

S CT 1357, lend a support to our conclusion. That case involved an appeal from an
order by the Control Board ordering the Communist Party to register as a
"Communist-action organization," under the Subversive Activities Control Act of
1950, 64 Stat 987, 50 USC sec. 781 et seq. (1958 ed). The definition of "Communist-
action organization" which the Board is to apply is set forth in sec. 3 of the Act:

[A]ny organization in the United States ... which (i)is substantially directed,
dominated, or controlled by the foreign government or foreign organization controlling
the world Communist movement referred to in section 2 of this title, and(ii) operates
primarily to advance the objectives of such world Communist movement... 64 Stat
989, 50 USC sec. 782 (1958 ed.)

A majority of the Court rejected the argument that the Act was a bill of attainder,
reasoning that sec. 3 does not specify the persons or groups upon which the
deprivations setforth in the Act are to be imposed, but instead sets forth a general
definition. Although the Board has determined in 1953 that the Communist Party was
a "Communist-action organization," the Court found the statutory definition not to be
so narrow as to insure that the Party would always come within it:

In this proceeding the Board had found, and the Court of Appeals has sustained its
conclusion, that the Communist Party, by virtud of the activities in which it now
 engages, comes within the terms of the Act. If the Party should at anytime choose to
abandon these activities, after it is once registered pursuant to sec. 7, the Act
provides adequate means of relief. (367 US, at 87, 6 L ed 2d at 683)

Indeed, were the Anti-Subversion Act a bill of attainder, it would be totally unnecessary to charge
Communists in court, as the law alone, without more, would suffice to secure their punishment. But
the undeniable fact is that their guilt still has to be judicially established. The Government has yet to
prove at the trial that the accused joined the Party knowingly, willfully and by overt acts, and that
they joined the Party, knowing its subversive character and with specific intent to further its basic
objective, i.e., to overthrow the existing Government by force deceit, and other illegal means and
place the country under the control and domination of a foreign power.

As to the claim that under the statute organizationl guilt is nonetheless imputed despite the
requirement of proof of knowing membership in the Party, suffice it to say that is precisely the nature
of conspiracy, which has been referred to as a "dragneet device" whereby all who participate in the
criminal covenant are liable. The contention would be correct if the statute were construed as
punishing mere membership devoid of any specific intent to further the unlawful goals of the
Party.   But the statute specifically required that membership must be knowing or active, with
13

specific intent to further the illegal objectives of the Party. That is what section 4 means when it
requires that membership, to be unlawful, must be shown to have been acquired "knowingly, willfully
and by overt acts."   The ingredient of specific intent to pursue the unlawful goals of the Party must
14

be shown by "overt acts."   This constitutes an element of "membership" distinct from the ingredient
15

of guilty knowledge. The former requires proof of direct participation in the organization's unlawful
activities, while the latter requires proof of mere adherence to the organization's illegal objectives.

2. Even assuming, however, that the Act specifies individuals and not activities, this feature is not
enough to render it a bill of attainder. A statute prohibiting partners or employees of securities
underwriting firms from serving as officers or employees of national banks on the basis of a
legislative finding that the persons mentioned would be subject to the temptation to commit acts
deemed inimical to the national economy, has been declared not to be a bill of attainder.   Similarly,
16

a statute requiring every secret, oath-bound society having a membership of at least twenty to
register, and punishing any person who becomes a member of such society which fails to register or
remains a member thereof, was declared valid even if in its operation it was shown to apply only to
the members of the Ku Klux Klan.  17

In the Philippines the validity of section 23 (b) of the Industrial Peace Act,   requiring labor unions to
18

file with the Department of Labor affidavits of union officers "to the effect that they are not members
of the Communist Party and that they are not members of any organization which teaches the
overthrow of the Government by force or by any illegal or unconstitutional method," was upheld by
this Court. 
19

Indeed, it is only when a statute applies either to named individuals or to easily ascertainable
members of a group in such a way as to inflict punishment on them without a judicial trial does it
become a bill of attainder.   It is upon this ground that statutes which disqualified those who had
20

taken part in the rebellion against the Government of the United States during the Civil War from
holding office,   or from exercising their profession,   or which prohibited the payment of further
21 22

compensation to individuals named in the Act on the basis of a finding that they had engages in
subversive activities,   or which made it a crime for a member of the Communist Party to serve as an
23

officer or employee of a labor union,   have been invalidated as bills of attainder.

24
But when the judgment expressed in legislation is so universally acknowledged to be certain as to be
"judicially noticeable," the legislature may apply its own rules, and judicial hearing is not needed
fairly to make such determination. 25

In New York ex rel. Bryant vs. Zimmerman,   the New York legislature passed a law requiring every
26

secret, oath-bound society with a membership of at least twenty to register, and punishing any
person who joined or remained a member of such a society failing to register. While the statute did
not specify the Ku Klux Klan, in its operation the law applied to the KKK exclusively. In sustaining the
statute against the claim that it discriminated against the Ku Klux Klan while exempting other secret,
oath-bound organizations like masonic societies and the Knights of Columbus, the United States
Supreme Court relied on common knowledge of the nature and activities of the Ku Klux Klan. The
Court said:

The courts below recognized the principle shown in the cases just cited and reached
the conclusion that the classification was justified by a difference between the two
classes of associations shown by experience, and that the difference consisted (a) in
a manifest tendency on the part of one class to make the secrecy surrounding its
purpose and membership a cloak for acts and conduct inimical to personal rights and
public welfare, and (b) in the absence of such a tendency on the part of the other
class. In pointing out this difference one of the courts said of the Ku Klux Klan, the
principal association in the included class: "It is a matter of common knowledge that
this organization functions largely at night, its members disguised by hoods and
gowns and doing things calculated to strike terror into the minds of the people;" and
later said of the other class: "These organizations and their purposes are well known,
many of them having been in existence for many years. Many of them are oath-
bound and secret. But we hear no complaint against them regarding violation of the
peace or interfering with the rights of others." Another of the courts said: "It is a
matter of common knowledge that the association or organization of which the relator
is concededly a member exercises activities tending to the prejudice and intimidation
of sundry classes of our citizens. But the legislation is not confined to this society;"
and later said of the other class: "Labor unions have a recognized lawful purpose.
The benevolent orders mentioned in the Benevolent Orders Law have already
received legislative scrutiny and have been granted special privileges so that the
legislature may well consider them beneficial rather than harmful agencies." The third
court, after recognizing "the potentialities of evil in secret societies," and observing
that "the danger of certain organizations has been judicially demonstrated," —
meaning in that state, — said: "Benevolent orders, labor unions and college
fraternities have existed for many years, and, while not immune from hostile criticism,
have on the whole justified their existence."

We assume that the legislature had before it such information as was readily
available including the published report of a hearing, before a committee of the
House of Representatives of the 57th Congress relating to the formation, purposes
and activities of the Klu Klux Klan. If so it was advised — putting aside controverted
evidence — that the order was a revival of the Ku Klux Klan of an earlier time with
additional features borrowed from the Know Nothing and the A. P. A. orders of other
periods; that its memberships was limited to native-born, gentile, protestant whites;
that in part of its constitution and printed creed it proclaimed the widest freedom for
all and full adherence to the Constitution of the United States; in another exacted of
its member an oath to shield and preserve "white supremacy;" and in still another
declared any person actively opposing its principles to be "a dangerous ingredient in
the body politic of our country and an enemy to the weal of our national
commonwealth;" that it was conducting a crusade against Catholics, Jews, and
 Negroes, and stimulating hurtful religious and race prejudices; that it was striving for
political power and assuming a sort of guardianship over the administration of local,
state and national affairs; and that at times it was taking into its own hands the
punishment of what some of its members conceived to be crimes.  27

In the Philippines the character of the Communist Party has been the object of continuing scrutiny by
this Court. In 1932 we found the Communist Party of the Philippines to be an illegal association.   In 28

1969 we again found that the objective of the Party was the "overthrow of the Philippine Government
by armed struggle and to establish in the Philippines a communist form of government similar to that
of Soviet Russia and Red China."   More recently, in Lansang vs. Garcia,   we noted the growth of
29 30

the Communist Party of the Philippines and the organization of Communist fronts among youth
organizations such as the Kabataang Makabayan (KM) and the emergence of the New People's
Army. After meticulously reviewing the evidence, we said: "We entertain, therefore, no doubts about
the existence of a sizeable group of men who have publicly risen in arms to overthrow the
government and have thus been and still are engaged in rebellion against the Government of the
Philippines.

3. Nor is it enough that the statute specify persons or groups in order that it may fall within the ambit
of the prohibition against bills of attainder. It is also necessary that it must apply retroactively and
reach past conduct. This requirement follows from the nature of a bill of attainder as a legislative
adjudication of guilt. As Justice Frankfurter observed, "frequently a bill of attainder was ... doubly
objectionable because of its ex post facto features. This is the historic explanation for uniting the two
mischiefs in one
clause — 'No Bill of Attainder or ex post facto law shall be passed.' ... Therefore, if [a statute] is a bill
of attainder it is also an ex post facto law. But if it is not an ex post facto law, the reasons that
establish that it is not are persuasive that it cannot be a bill of attainder." 
31

Thus in Gardner vs. Board of Public Works,   the U.S. Supreme Court upheld the validity of the
32

Charter of the City of Los Angeles which provided:

... [N]o person shall hold or retain or be eligible for any public office or employment in
the service of the City of Los Angeles, in any office or department thereof, either
elective or appointive, who has within five (5) years prior to the effective date of this
section advised, advocated, or taught, or who may, after this section becomes
effective, become a member of or affiliated with any group, society, association,
organization or party which advises, advocates or teaches or has within said period
of five (5) years advised, advocated, or taught the overthrow by force or violence of
the Government of the United States of America or of the State of California.

In upholding the statute, the Court stressed the prospective application of the Act to the petitioner
therein, thus:

... Immaterial here is any opinion we might have as to the charter provision insofar as
it purported to apply restrospectively for a five-year period to its effective date. We
assume that under the Federal Constitution the Charter Amendment is valid to the
extent that it bars from the city's public service persons who, subsequently to its
adoption in 1941, advise, advocate, or reach the violent overthrow of the
Government or who are or become affiliated with any group doing so. The provisions
operating thus prospectively were a reasonable regulation to protect the municipal
service by establishing an employment qualification of loyalty to the State and the
United States.
 ... Unlike the provisions of the charter and ordinance under which petitioners were
removed, the statute in the Lovett case did not declare general and prospectively
operative standards of qualification and eligibility for public employment. Rather, by
its terms it prohibited any further payment of compensationto named individuals or
employees. Under these circumstances, viewed against the legislative background,
the statutewas held to have imposed penalties without judicial trial.

Indeed, if one objection to the bill of attainder is thatCongress thereby assumed judicial magistracy,
them it mustbe demonstrated that the statute claimed to be a bill of attainderreaches past conduct
and that the penalties it imposesare inescapable. As the U.S. Supreme Court observedwith respect
to the U.S. Federal Subversive Activities ControlAct of 1950:

Nor is the statute made an act of "outlawry" or of attainderby the fact that the conduct
which it regulates is describedwith such particularity that, in probability, few
organizationswill come within the statutory terms. Legislatures may act tocurb
behaviour which they regard as harmful to the public welfare,whether that conduct is
found to be engaged in by manypersons or by one. So long as the incidence of
legislation issuch that the persons who engage in the regulated conduct, bethey
many or few, can escape regulation merely by altering thecourse of their own present
activities, there can be no complaintof an attainder. 33

This statement, mutatis mutandis, may be said of theAnti-Subversion Act. Section 4 thereof

expressly statesthat the prohibition therein applies only to acts committed"After the approval of this
Act." Only those who "knowingly,willfully and by overt acts affiliate themselves with,become or
remain members of the Communist Party of thePhilippines and/or its successors or of any
subversive association"after June 20, 1957, are punished. Those whowere members of the Party or
of any other subversive associationat the time of the enactment of the law, weregiven the
opportunity of purging themselves of liability byrenouncing in writing and under oath their
membershipin the Party. The law expressly provides that such renunciationshall operate to exempt
such persons from penalliability.   The penalties prescribed by the Act are thereforenot inescapable.
34

III. The Act and the Requirements of Due Process

1. As already stated, the legislative declaration in section 2 of the Act that the Communist Party of
the Philippinesis an organized conspiracy for the overthrow of theGovernment is inteded not to
provide the basis for a legislativefinding of guilt of the members of the Party butrather to justify the
proscription spelled out in section 4. Freedom of expression and freedom of association are
sofundamental that they are thought by some to occupy a"preferred position" in the hierarchy of
constitutional values.   Accordingly, any limitation on their exercise mustbe justified by the existence
35

of a substantive evil. This isthe reason why before enacting the statute in question
Congressconducted careful investigations and then stated itsfindings in the preamble, thus:

... [T]he Communist Party of the Philippines althoughpurportedly a political party, is in

fact an organized conspiracyto overthrow the Government of the Republic of the
Philippinesnot only by force and violence but also by deceit, subversionand other
illegal means, for the purpose of establishing in thePhilippines a totalitarian regime
subject to alien dominationand control;

... [T]he continued existence and activities of the CommunistParty of the Philippines
constitutes a clear, present andgrave danger to the security of the Philippines;
 ... [I]n the face of the organized, systematice and persistentsubversion, national in
scope but international in direction,posed by the Communist Party of the Philippines
and its activities,there is urgent need for special legislation to cope withthis
continuing menace to the freedom and security of the country.

In truth, the constitutionality of the Act would be opento question if, instead of making these findings
in enactingthe statute, Congress omitted to do so.

In saying that by means of the Act Congress has assumed judicial magistracy, the trial courd failed
to takeproper account of the distinction between legislative fact and adjudicative fact. Professor Paul
Freund elucidatesthe crucial distinction, thus:

... A law forbidding the sale of beverages containingmore than 3.2 per cent of alcohol
would raise a question of legislativefact, i.e., whether this standard has a reasonable
relationto public health, morals, and the enforcement problem. Alaw forbidding the
sale of intoxicating beverages (assuming itis not so vague as to require
supplementation by rule-making)would raise a question of adjudicative fact, i.e.,
whether thisor that beverage is intoxicating within the meaning of the statuteand the
limits on governmental action imposed by the Constitution. Of course what we mean
by fact in each case is itselfan ultimate conclusion founded on underlying facts and
oncriteria of judgment for weighing them.

A conventional formulation is that legislative facts — those facts which are relevant to
the legislative judgment — will not be canvassed save to determine whether there is
a rationalbasis for believing that they exist, while adjudicativefacts — those which tie
the legislative enactment to the litigant — are to be demonstrated and found
according to the ordinarystandards prevailing for judicial trials. 
36

The test formulated in Nebbia vs. new York,   andadopted by this Court in Lansang vs. Garcia,   is
37 38

that 'if laws are seen to have a reasonable relation to a proper legislative purpose, and are neither
arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial determination
to that effect renders a court functus officio." The recital of legislative findings implements this test.

With respect to a similar statement of legislative findingsin the U.S. Federal Subversive Activities
Control Actof 1950 (that "Communist-action organizations" are controlledby the foreign government
controlling the worldCommunist movement and that they operate primarily to"advance the objectives
of such world Communist movement"),the U.S. Supreme Court said:

It is not for the courts to reexamine the validity of theselegislative findings and reject
them....They are the productof extensive investigation by Committes of Congress
over morethan a decade and a half. Cf. Nebbia v. New York, 291 U.S.502, 516, 530.
We certainly cannot dismiss them as unfoundedirrational imaginings. ... And if we
accept them, as we mustas a not unentertainable appraisal by Congress of the
threatwhich Communist organizations pose not only to existing governmentin the
United States, but to the United States as asovereign, independent Nation. ...we
must recognize that thepower of Congress to regulate Communist organizations of
thisnature is
extensive. 39

This statement, mutatis mutandis, may be said of thelegislative findings articulated in the Anti-
Subversion Act.
That the Government has a right to protect itself againstsubversion is a proposition too plain to
require elaboration.Self-preservation is the "ultimate value" of society. It surpasses and transcendes
every other value, "forif a society cannot protect its very structure from armedinternal attack, ...no
subordinate value can be protected"   As Chief Justice Vinson so aptly said in Dennis vs. United
40

States: 41

Whatever theoretical merit there may be to the argumentthat there is a 'right' to

rebellion against dictatorial governmentsis without force where the existing structure
of government provides for peaceful and orderly change. We rejectany principle of
governmental helplessness in the face of preparationfor revolution, which principle,
carried to its logical conclusion,must lead to anarchy. No one could conceive that it
isnot within the power of Congress to prohibit acts intended tooverthrow the
government by force and violence.

2. By carefully delimiting the reach of the Act to conduct (as explicitly described in sectin 4 thereof),
Congressreaffirmed its respect for the rule that "even throughthe governmental purpose be
legitimate and substantial,that purpose cannot be pursued by means that broadly stiflefundamental
personal liberties when the end can be more narrowly achieved."   The requirement
42

of knowing membership,as distinguished from nominal membership, hasbeen held as a sufficient

basis for penalizing membershipin a subversive organization.   For, as has been stated:
43

Membership in an organization renders aid and encouragement to the organization;

and when membership is acceptedor retained with knowledge that the organization is
engaged inan unlawful purpose, the one accepting or retaining membershipwith such
knowledge makes himself a party to the unlawfulenterprise in which it is engaged.  44

3. The argument that the Act is unconstitutionallyoverbroad because section 2 merely speaks of
"overthrow"of the Government and overthrow may be achieved by peaceful means, misconceives
the function of the phrase"knowingly, willfully and by overt acts" in section 4. Section 2 is merely a
legislative declaration; the definitionsof and the penalties prescribed for the different acts
prescribedare stated in section 4 which requires that membershipin the Communist Party of the
Philippines, to be unlawful, must be acquired "knowingly, willfully and by overt acts." Indeed, the first
"whereas" clause makes clear thatthe overthrow contemplated is "overthrow not only by forceand
violence but also be deceit, subversion and other illegalmeans." The absence of this qualificatio in
section 2 appearsto be due more to an oversight rather than to deliberateomission.

Moreover, the word "overthrow' sufficiently connotesthe use of violent and other illegal means. Only
in a metaphoricalsense may one speak of peaceful overthrow ofgovernments, and certainly the law
does not speak in metaphors.In the case of the Anti-Subversion Act, the use ofthe word "overthrow"
in a metaphorical sense is hardlyconsistent with the clearly delineated objective of the
"overthrow,"namely, "establishing in the Philippines a totalitarianregime and place [sic] the
Government under thecontrol and domination of an alien power." What thisCourt once said in a
prosecution for sedition is appropos: "The language used by the appellant clearly imported
anoverthrow of the Government by violence, and it should beinterpreted in the plain and obvious
sense in which it wasevidently intended to be understood. The word 'overthrow'could not have been
intended as referring to an ordinarychange by the exercise of the elective franchise. The useof the
whip [which the accused exhorted his audience to useagainst the Constabulary], an instrument
designed toleave marks on the sides of adversaries, is inconsistentwith the mild interpretation which
the appellant wouldhave us impute to the language."  45

IV. The Act and the Guaranty of Free Expression

As already pointed out, the Act is aimed against conspiracies to overthrow the Government by force,
violence orother illegal means. Whatever interest in freedom of speechand freedom of association is
infringed by the prohibitionagainst knowing membership in the Communist Party ofthe Philippines, is
so indirect and so insubstantial as to beclearly and heavily outweighed by the overriding
considerationsof national security and the preservartion of democraticinstitutions in his country.

The membership clause of the U.S. Federal Smith Actis similar in many respects to the membership
provision ofthe Anti-Subversion Act. The former provides:

Whoever organizes or helps or attempts to organize anysociety, group, or assembly

of persons who teach, advocate, orencourage the overthrow or destruction of any
such governmentby force or violence; or becomes or is a member of, or affiliatedwith,
any such society, group or assembly of persons, knowingthe purpose thereof —

Shall be fined not more than $20,000 or imprisoned notmore than twenty years, or
both, and shall be ineligible for emplymentby the United States or any department or
agencythereof, for the five years next following his conviction.... 46

In sustaining the validity of this provision, the "Court said in Scales vs. United States:  47

It was settled in Dennis that advocacy with which we arehere concerned is not

constitutionally protected speech, and itwas further established that a combination to
promote suchadvocacy, albeit under the aegis of what purports to be a politicalparty,
is not such association as is protected by the firstAmendment. We can discern no
reason why membership, whenit constitutes a purposeful form of complicity in a
group engagingin this same forbidden advocacy, should receive anygreater degree
of protection from the guarantees of that Amendment.

Moreover, as was held in another case, where the problemsof accommodating the exigencies of
self-preservationand the values of liberty are as complex and intricate as inthe situation described in
the legislative findings stated inthe U.S. Federal Subversive Activities Control Act of 1950,the
legislative judgment as to how that threat may best bemet consistently with the safeguards of
personal freedomsis not to be set aside merely because the judgment of judgeswould, in the first
instance, have chosen other methods.   For in truth, legislation, "whether it restrains freedom tohire
48

or freedom to speak, is itself an effort at compromisebetween the claims of the social order and
individual freedom,and when the legislative compromise in either case isbrought to the judicial test
the court stands one step removedfrom the conflict and its resolution through law."  49

V. The Act and its Title

The respondent Tayag invokes the constitutional commandthat "no bill which may be enacted into
law shall embrace more than one subject which shall be expressed in the title of the bill."  50

What is assailed as not germane to or embraced in thetitle of the Act is the last proviso of section 4
which reads:

And provided, finally, That one who conspires with anyother person to overthrow the
Government of the Republic ofthe Philippines, or the government of any of its
political subdivisionsby force, violence, deceit, subversion or illegal means,for the
purpose of placing such Government or political subdivisionunder the control and
 domination of any lien power, shallbe punished by prision correccional to prision
mayor with allthe accessory penalties provided therefor in the same code.

It is argued that the said proviso, in reality, punishes notonly membership in the Communist Party of
the Philippinesor similar associations, but as well "any conspiracyby two persons to overthrow the
national or any local governmentby illegal means, even if their intent is not to establisha totalitarian
regime, burt a democratic regime, evenif their purpose is not to place the nation under an
aliencommunist power, but under an alien democratic power likethe United States or England or
Malaysia or even an anti-communistpower like Spain, Japan, Thailand or Taiwanor Indonesia."

The Act, in addition to its main title ("An Act to Outlawthe Communist Party of the Philippines and
SimilarAssociations, Penalizing Membership Therein, and forOther Purposes"), has a short title.
Section 1 providesthat "This Act shall be known as the
Anti-Subversion Act."Together with the main title, the short title of the statuteunequivocally indicates
that the subject matter is subversionin general which has for its fundamental purpose the
substitutionof a foreign totalitarian regime in place of theexisting Government and not merely
subversion by Communistconspiracies..

The title of a bill need not be a catalogue or an indexof its contents, and need not recite the details of
the Act.   It is a valid title if it indicates in broad but clear termsthe nature, scope, and consequences
51

of the proposed lawand its operation.   A narrow or technical construction isto be avoided, and the
52

statute will be read fairly and reasonablyin order not to thwart the legislative intent. We holdthat the
Anti-Subversion Act fully satisfies these requirements.

VI. Conclusion and Guidelines

In conclusion, even as we uphold the validity of theAnti-Subversion Act, we cannot overemphasize

the needfor prudence and circumspection in its enforcement, operatingas it does in the sensitive
area of freedom of expressionand belief. Accordingly, we set the following basic guidelines to be
observed in any prosecution under the Act.The Government, in addition to proving such
circumstancesas may affect liability, must establish the following elementsof the crime of joining the
Communist Party of the Philippinesor any other subversive association:

(1) In the case of subversive organizations other thanthe Communist Party of the Philippines, (a) that
thepurpose of the organization is to overthrow the presentGovernment of the Philippines and to
establish in thiscountry a totalitarian regime under the domination of aforeign power; (b) that the
accused joined such organization;and (c) that he did so knowingly, willfully and byovert acts; and

(2) In the case of the Communist Party of the Philippines,(a) that the CPP continues to pursue the
objectiveswhich led Congress in 1957 to declare it to be an organizedconspiracy for the overthrow of
the Government by illegalmeans for the purpose of placing the country under thecontrol of a foreign
power; (b) that the accused joined theCPP; and (c) that he did so willfully, knowingly and byovert
acts.

We refrain from making any pronouncement as to thecrime or remaining a member of the

Communist Party ofthe Philippines or of any other subversive association: weleave this matter to
future determination.

ACCORDINGLY, the questioned resolution of September15, 1970 is set aside, and these two cases
are herebyremanded to the court a quo for trial on the merits. Costs de oficio.
Makalintal, Zaldivar, Teehankee, Barredo and Esguerra, JJ., concur.

Concepcion, C.J., concurs in the result.

Makasiar and Antonio, JJ., took no part.

Separate Opinions

 
FERNANDO, J., dissenting:

It is with regard that I find myself unable to join therest of my brethren in the decision reached
upholding thevalidity of the Anti-Subversion Act.  It is to be admittedthat the learned and scholarly
1

opinbion of Justice Castro hasthe impress of conscientious and painstaking scrutiny ofthe
constitutional issues raised. What is more, the stressin the concluding portion thereof on basic
guidelines thatwill assure in the trial of those prosecuted under suchAct respect for their
constitutional rights is to be commended.Nonetheless, my own reading of the decisionscited,
interpreting the bill of attainder clause  coupled withthe fears, perhaps induced by a too-latitudinarian
2

constructionof the guarantees of freedom of belief and expression  as well as freedom of
3

association   as to impermissible inroadsto which they may be exposed, compels a

4

differentconclusion. Hence this dissent.

1. There is to be sure no thought on my part that theequally pressing concern of state safety and
security shouldbe ignored. The political branches of the governmentwould lay themselves oepn to a
justifiable indictment fornegligence had they been remiss in their obligation tosafeguard the nation
against its sworn enemies. In a simplerera, where the overthrow of the government wasusually
through the rising up in arms, with weapons farless sophisticated than those now in existence, there
wasno constitutional issue of the magnitude that now confrontsus. Force has to be met with force. It
was as clearcutas that. Advances in science as well as more subtlemethods of inducing disloyalty
and weakening the senseof allegiance have introduced complexities in coping withsuch problems.
There must be then, and I am the firstto recognize it, a greater understanding for the
governmentalresponde to situations of that character. It is inthat light that the validity of the Anti-
Subversion Act isto be appraised. From ny standpoint, and I am not presumptuousenough to claim
that it is the only perspectiveor that is the most realistic, I feel that there was an
insufficientappreciation of the compulsion of the constitutionalcommands against bills of attainder
and abridgmentof free speech. I am comforted by the thought that evenhad my view prevailed, all
that it would mean is that anew legislation, more in comformity to my way of thinkingto what is
ordained by the fundamental law, wouldhave to be enacted. No valid fear need be entertained
thenthat a setback would be occasioned to legitilate state effortsto stem the tide of subversive
activities, in whateverform manifested.

2. The starting point in any inquiry as to the significanceof the bill of attainder clause is the meaning
attachedto it by the Constitutional Convention of 1934 and by the people who adopted it. As was
explained by the then Delegate, later Justice, Jose P. Laurel in his address on November19, 1934
as Chairman of the Committee on the Bill of Rights quoted in the opinion of the Court: "A billof
attainder is a legislative act which inflicts punishment without judicial trial. (Cummings v. United
States, 4Wall. 277, 18 L ed 356). In England, the Bill of Attainder was an act of Parliament by which
a man was tried, convictedand sentenced to death without a jury, without ahearing in court, without
hearing the witnesses againsthim and without regard to the rules of evidence. His bloodwas
attainted or corrupted, rendering him devoid of allheritable quality — of acquiring and disposing
property bydescent. (Ex parte Garland, 4 Wall. 333, 18 L ed. 366) If the penalty imposed was less
than death, the act wasknown as a 'bill of pains and penalties.' Bills of attainder, like ex post
facto laws, were favorite methods of Stuartoppression. Once, the name of Thomas Jefferson was
includedin a bill of attainder presented to Parliament becauseof his reform activities."  Two American
5

SupremeCourt decision were thus in the minds of the framers.They are Cummings v.
Missouri   and Ex parte Garland.   They speak unequivocally. Legislative acts, no matter whattheir
6 7

form, that apply either to named individuals or easilyascertainable members of a group in such a
way as to inflicton them punishment amounting to a deprivation ofany right, civil or political, without
judicial trial are billsof attainder prohibited by the Constitution. 
8

Cummings v. Missouri   was a criminal prosecution ofa Catholic priest for refusing to take the loyalty
9

oath requiredby the state Constitution of Missouri of 1865. Undersuch a provision, lawyers, doctors,
ministers, and otherprofessionals must disavow that they had ever, "by act orword," manifested a
"desire" for the success of the nation'senemies or a sympathy" with the rebels of the AmericanCivil
War. If they swore falsely, they were guilty of perjury.If they engaged in their professions without
theoath, they were criminally liable. The United States Supreme Court condemned the provision as a
bill of attainder,identified as any legislative act inflicting punishment withoutjudicial trial. The
deprivation of any right, civil orpolitical, previously enjoyed, amounted to a punishment.Why such a
conclusion was unavoidable was explained inthe opinion of Justice Field thus: "A bill of attainder isa
legislative act, which inflicts punishment without a judicialtrial. If the punishment be less than death,
the actis termed a bill of pains and penalties. Within the meaningof the Constitution, bills of attainder
include bills ofpains and penalties. In these cases the legislative body, inaddition to its legitimate
functions, exercises the powersand office of judge; it assumes, in the language of thetextbooks,
judicial magistracy; it pronounces upon theguilt of the party, without any of the forms or safeguardsof
trial; it determines the sufficiency of the proofs produced,whether conformable to the rules of
evidence orotherwise; and it fixes the degree of punishment in accordancewith its own notions of the
enormity of the offense. ... If the clauses of the 2d article of the Constitutionof Missouri, to which we
have referred, had in termsdeclared that Mr. Cummings was guilty, or should be heldguilty, of having
been in armed hostility to the UnitedStates, or of having entered that state to avoid beingenrolled or
drafted into the military service of the UnitedStates, and, therefore, should be deprived of the right
topreach as a priest of the Catholic church, or to teach inany institution of learning, there could be no
question thatthe clauses would constitute a bill of attainder within themeaning of the Federal
Constitution. If these clauses, insteadof mentioning his name, had declared that all priestsand
clergymen within the state of Missouri were guiltyof these acts, or should be held guilty of them, and
hencebe subjected to the like deprivation, the clause would beequally open to objection. And further,
it these clauseshad declared that all such priests and clergymen shouldbe so held guilty, and be
thus deprived, provided they didnot, by a day designated, do certain specified acts, theywould be no
less within the inhibition of the Federal Constitution.In all these cases there would be the
legislativeenactment creating the deprivation, without any of theordinary forms and guards provided
for the security ofthe citizen in the administration of justice by the establishedtribunales."  10

On the very same day that the ruling in Cummings washanded down, Ex parte Garland   was also11

decided. Thatwas a motion for leave to practrice as an attorney beforethe American Supreme Court.
Petitioner Garland wasadmitted to such bar at the December term of 1860. Underthe previous rules
of such Court, all that was necessarywas that the applicant have three years practice in the
statecourts to which he belonged. In March 1865, the rule waschanged by the addition of a clause
requiring that an oathbe taken under the Congressional acts of 1862 and 1865to the effect that such
candidate for admission to the barhad never voluntarily borne arms against the UnitedStates.
Petitioner Garland could not in conscience subscribeto such an oath, but he was able to show a
presidentialpardon extended on July 15, 1865. With such actof clemency, he moved that he be
allowed to continue inpractice contending that the test oath requirement wasunconstitutional as a bill
of attainder and that at any rate,he was pardoned. The same ruling was announced by theCourt
again through Justice Field. Thus: "In the exclusionwhich the statute adjudges, it imposes a
punishmentfor some of the acts specified which were not punishableat the time they were
committedl; and for other of the actsit adds a new punishment to that before prescribed, andit is thus
brought within the further inhibition of the Consitutionagainst the passage of an ex post facto law.
Inthe case of Cummings v. Missouri, just decided, ... wehave had occasion to consider at length the
meaning of abill of attainder and of an ex post facto law in the clauseof the Constitution forbidding
their passage by the states,and it is unnecessary to repeat here what we there said.A like prohibition
is contained in the Constitution againstenactments of this kind by Congress; and the
argumentpresented in that case against certain clauses of the Constitutionof Missouri is equally
applicable to the act ofCongress under consideration in this case."  12

There was a reiteration of the Cummings and Garlanddoctrine in United States v. Lovett,   decided
13

in 1946.There it was shown that in 1943 the respondents, Lovett,Watson, and Dodd, were and had
been for several yearsworking for the government. The government agencies,which had lawfully
employed them, were fully satisfiedwith the quality of their work and wished to keep thememployed
on their jobs. Over their protest, Congress providedin Section 304 of the Urgent Deficiency
AppropriationAct of 1943, by way of an amendment attached to theHouse Bill, that after November
15, 1943, no salary orcompensation should be paid respondent out of any moneythen or thereafter
appropriated except for services as jurorsor members of the armed forces, unless they wereprior to
November 15, 1943, again appointed to jobs bythe President with the advide and consent of the
Senate.Notwithstanding such Congressional enactment, and thefailure of the President to reappoint
the respondents, theagencies, kept all the respondents at work on their jobs forvarying periods after
November 15, 1943, but their compensationwas discontinued after that date. Respondentsbrought
this action in the Court of Claims for the salariesto which they felt entitled. The Ameican Supreme
Courtstated that its inquiry was thus confined to whether theaction in the light of proper construction
of the Act presenteda justificiable controversy, and, if so, whether Section304 is a bill of attainder
insofar as the respondents wereconcerned.

After holding that there was a juditiciable, view theAmerican Supreme Court in an opinion by Justice
Blackcategorically affirmed: "We hold that Section 304 fallsprecisely within the category of
Congressional actionswhich the Constitution barred by providing that 'No Billof Attainder or ex post
Law shall be passed.' InCummings v. State of Missouri, ... this Court said, 'Abill of attainder is a
legislative act which inflicts punishmentwithout a judicial trial. If the punishment be lessthan death,
the act is termed a bill of pains and penalties.Within the meaning of the Constitution, bills of
attainderinclude bills of pains and penalties.' ... On the sameday the Cummings case was decided,
the Court, in Exparte Garland, also held invalid on the same grounds anAct of Congress which
required attorneys practicing beforethis Court to take a similar oath. Neither of thesecases has ever
been overruled. They stand for the propositionthat legislative acts, no matter what their form,that
apply either to named individuals or to easily ascertainablemembers of a group in such a way as to
inflictpunishment on them without a judicial trial are billsof attainder prohibited by the Constitution.
Adherenceto this principle requires invalidation of Section 304. Wedo adhere to it."  14

United States v. Brown   a 1965 decision was the firstcase to review a conviction under the Labor-
15

ManagementReporting and Disclosure Act of 1959, making it a crimefor a member of the

Communist Party to serve as anofficer ir, except in clerical or custodial positions, anemployee of a
labor union. Respondent Brown, a longshoremanon the San Francisco docks, and an open
andavowed Communist, for more than a quarter of a centurywas elected to the Executive Board of
Local 10 of theInternational Longshoremen's and Warehousemen's Unionfor consecutive one-year
terms in 1959, 1960, and 1961.On May 24, 1961, respondent was charged in a one-countindictment
returned in a district court of California withservicing as a member of an executive board of a
labororganization while a member of the Communist Party, inwillful violation of the above provision.
The question ofits validity under the bill of attainder clause was thusproperly raised for adjudication.
While convicted in thelower court, the Court of Appeals for the Ninth Circuitreversed. It was
sustained by the American SupremeCourt. As noted in the opinion by Chief Justice Warren,"the wide
variation in form, purpose and effect of ante-Constitutionbills of attainder indicates that the
properscope of the Bill of Attainder Clause, and its relevance tocontemporary problems, must
ultimately be sought by attemptingto discern the reasons for its inclusion in theConstitution, and the
evils it was desinged to eliminate.The best available evidence, the writings of the architectsof our
constitutional system, indicates that the Bill ofAttainder Clause was inteded not as a narrow,
technical(and therefore soon to be outmoded) prohibition, but ratheras an implementation of the
separation of powers, ageneral safeguard against legislative exercise of the judicialfunction, or more
simply — trial by legislature."   Then after referring to Cummings, Garland, and Lovett,Chief Justice
16

Warren continued: "Under the line of casesjust outlined, Sec. 504 of the Labor Management
Reportingand Disclosure Act plainly constitutes a bill of attainder. Congress undoubtedly possesses
power under theCommerce Clause to enact legislation designed to keepfrom positions affecting
interstate commerce persons whomay use such positions to bring about political strikes. In Sec. 504,
however, Congress has exceeded the authoritygranted it by the Constitution. The statute does not
setforth a generally applicable rule decreeing that any personwho commits certain acts or possesses
certain characteristics (acts and characteristics whhich, in Congress'view, make them likely to initiate
political strikes) shallnot hold union office, and leave to courts and juries thejob of deciding what
persons have committed the specifiedacts or possessed the specified characteristics. Instead,it
designates in no uncertain terms the personswho possess the fearec characteristics and therefore
cannothold union office without incurring criminal liability — members of the Communist Party."  17

Even Communist Party v. Subversive Activities ControlBoard,   where the provision of the
18

Subversive ActivitiesControl Act of 1950 requiring the Communist Party ofthe United States to
register was sustained, the opinionof Justice Frankfurter for the Court, speaking for a five-
manmajority, did indicate adherence to the Cummingsprinciple. Had the American Communist Party
been outlawed,the outcome certainly would have been different.Thus: "The Act is not a bill of
attainder. It attaches notto specified organizations but to described activities inwhich an organization
may or may not engage. The singlingout of an individual for legislatively prescribed
punishmentconstitutes an attainder whether the individualis called by name or described in terms of
conduct which,because it is past conduct, operates only as a designationof particular persons. ...
The Subversive Activities ControlAct is not of that king. It requires the registrationonly of
organizations which, after the date of the Act,are found to be under the direction, domination, or
controlof certain foreign powers and to operate primarily toadvance certain objectives. This finding
must be madeafter full administrative hearing, subject to judicial reviewwhich opens the record for
the reviewing court'sdetermination whether the administrative findings as tofact are supported by the
preponderance of the evidence.Present activity constitutes an operative element to whichthe statute
attaches legal consequences, not merely a pointof reference for the ascertainment of particularly
personsineluctably designated by the legislature."  19

The teaching of the above cases, which I find highlypersuasive considering what appeared to be in
the mindsof the framers of the 1934 Constitutional Conventionyields for me the conclusion that the
Anti-SubversionAct falls within the ban of the bill of attainder clause. Itshould be noted that three
subsequent cases upholding theCummings and Garland doctrine were likewise cited in theopinion of
the Court. The interpretation accorded to themby my brethren is, of course, different but I am unable
togo along with them especially in the light of the categoricallanguage appearing in Lovett. This is
not to lose sightof the qualification that for them could deprive such aholding of its explicit character
as shown by this excerptfrom the opinion of the Court: "Indeed, were the Anti-SubversionAct a bill of
attainder it would be totally unnecessaryto charge communists in court, as the law alone,without
more, would suffice to secure their conviction andpunishment. But the fact is that their guilt still has
to bejudicially estblished. The Government has yet to proveat the trial that the accused joined the
Party knowingly,willfully and by overt acts, and that they joined the Partyknowing its subversive
character and with specific intentto further its objective, i.e., to overthrow the existing Governmentby
force, deceit, and other illegal means and placeit under the control and domination of a foreign
power. 20While not implausible, I find difficulty in yielding acceptance.In Cummings, there was a
criminal prosecution ofthe Catholic priest who refused to take the loyalty oath.Again in Brown, there
was an indictment of the laborleader who, judging by his membership in the CommunistParty, did
transgress the statutory provision subsequentlyfound offensive to the bill attainder clause. If the
constructionI would place on theoff-repeated pronouncementof the American Supreme Court is
correct, then the merefact that a criminal case would have to be instituted wouldnot save the statute.
It does seem clear to me that fromthe very title of the Anti-Subversion Act, "to outlaw the Communist
Party of the Philippines and similar associations,"not to mention other specific provisions, the taintof
invalidity is quite marked. Hence, my inability to concurin the judgment reached as the statute not
suffering fromany fatal infirmity in view of the Constitutional prohibitionagainst bills of attainder.

3. This brings me to the question of the alleged repugnancyof the Anti-Subversion Act to the
intellectual libertysafeguarded by the Constitution in terms of the free speechand free assocition
guarantees.   It is to be admitted thatat the time of the enactment of Republic Act No. 1700,the
21

threat that Communism, the Russian brand then, didpose was a painful reality for Congressional
leaders andthe then President. Its shadow fell squarely across thelives of all. Subversion then could
neither be denied notdisparaged. There was, in the expert opinion of those conversantwith such
mattes, a danger to out national existenceof no mean character. Nonetheless, the remedies toward
off such menace must not be repugnant to our Constitution.We are legally precluded from acting in
anyother way. The apprehension justly felt is no warrant forthrowing to the discard fundamental
guarantees. Vigilantwe had to be, but not at the expense of constitutional ideals.

One of them, certainly highly-prized of the utmost significance,is the right to dissent. One can differ,
evenobject; one can express dissatisfaction with things as theyare. There are timew when one not
only can but must.Such dissent can take the form of the most critical andthe most disparaging
remarks. They may give offense tothose in authority, to those who wield powe and
influence.Nevertheless, they are entitled to constitutional protection.Insofar as the content of such
dissent is concerned, thelimits are hardly discernible. It cannot be confined totrivial matters or to
such as are devoid of too much significance.It can reach the heart of things. Such dissentmay, for
those not so adventurous in the realm of ideas,possess a subversive tinge. Even those who oppose
a democraticform of government cannot be silenced. This is trueespecially in centers of learning
where scholars competentin their line may, as a result of their studies, assert thata future is bleak for
the system of government now favoredby Western democracies. There may be doubts
entertainedby some as to the lawfulness of their exercisingthis right to dissent to the point of
advocary of such adrastic change. Any citizen may do so without fear thatthereby he incurs the risk
of a penal sanction. That ismerely to affirm the truth of this ringing declaration fromJefferson: "If
there be any among us who would wish todissolve this union or to change its republican form,
letthem stand undisturbed as monuments of the safety withwhich error of opinion may be tolerated
where reason isleft free to combat it."   As was so well put by the philosopher,Sidney Hook: "Without
22

holding the right to theexpression of heresy at any time and place to be absolute — for even the right
to non-heretical speech cannot beabsolute — it still seems wise to tolerate the expression evenof
Communist, fascist and other heresies, lest in outlawingthem we include other kings of heresies, and
deprive ourselvesof the opportunity to acquite possibly sounder ideasthan our own."  23

The line is to be drawn, however, where the wordsamount to an incitement to commit the crime of
seditionor rebellion. The state has been reached, to follow theformulation of Cardozo, where thought
merges into action.Thus is loyalty shown to the freedom of speech or pressordained by the
Constitution. It does not bar the expressionof views affecting the very life of the state, even
ifopposed to its fundamental presuppositions. It allows, ifit does not require as a matter of fact, that
unorthodoxideas be freely ventilated and fully heard. Dissent is notdisloyalty.

Such an approach is reinforced by the well-settled constitutionalprinciple "that even though the
governmental purposesbe legitimate and substantial, they cannot be pursuedby means that broadly
stifle fundamental personalliberties when the end can be more narrowly achieved.For precision of
regulation is the touchstone in an areaso closely related to our most precious freedoms."   This is so
24

for "a governmental purpose to control or prevent activities constitutionally subject to state regulation
may notbe achieved by means which sweep unnecessarily broadlyand thereby invade the area of
protected freedoms."   It isindispensable then that "an over breadth" in the applicabilityof the statute
25

be avoided. If such be the case, then theline dividing the valid from the constitutionally infirm
hasbeen crossed. That for me is the conclusion to be drawnfrom the wording of the Anti-Subversion
Act.

There is to my mind support for the stand I take inthe dissent of Justice Black in the Communist
Party casediscussed above. What is to be kept in view is that a legislativemeasure certainly less
drastic in its treatment ofthe admittedly serious Communist problem was found inthe opinion of this
noted jurist offensive to the FirstAmendment of the American Constitution safeguardingfree speech.
Thus: "If there is one thing certain aboutthe First Amendment it is that this Amendment was
designedto guarantee the freest interchange of ideas aboutall public matters and that, of course,
means the interchangeof all ideas, however such ideas may be viewed inother countries and
whatever change in the existing structureof government it may be hoped that these ideas willbring
about. Now, when this country is trying to spreadthe high ideals of democracy all over the world —
ideals that are revolutionary in many countries — seems to be aparticularly inappropriate time to
stifle First Amendmentfreedoms in this country. The same arguments that areused to justify the
outlawry of Communist ideas here couldbe used to justify an outlawry of the ideas of democracyin
other countries."   Further he stated: "I believe with theFramers of the First Amendment that the
26

internal securityof a nation like ours does not and cannot be made todepend upon the use of force
by Government to make allthe beliefs and opinions of the people fit into a commonmold on any
single subject. Such enforced conformity ofthought would tend only to deprive our people of the
boldspirit of adventure and progress which has brought thisNation to its present greatness. The
creation of publicopinion by groups, organizations, societies, clubs, and partieshas been and is a
necessary part of our democraticsociety. Such groups, like the Sons of Liberty and theAmerican
Corresponding Societies, played a large part increating sentiment in this country that led the people
ofthe Colonies to want a nation of their own. The Father ofthe Constitution — James Madison —
said, in speakingof the Sedition Act aimed at crushing the Jefferson Party,that had that law been in
effect during the period beforethe Revolution, the United States might well have continuedto be
'miserable colonies, groaning under a foreign yoke.'In my judgment, this country's internal security
can betterbe served by depending upon the affection of the peoplethan by attempting to instill them
with fear and dreadof the power of Government. The Communist Party hasnever been more than a
small group in this country. Andits numbers had been dwindling even before the Governmentbegan
its campaign to destroy the Party by force oflaw. This was because a vast majority of the
Americanpeople were against the Party's policies and overwhelminglyrejected its candidates year
after year. That is the trueAmerican way of securing this Nation against dangerousideas. Of course
that is not the way to protect the Nationagainst actions of violence and treason. The Foundersdrew a
distinction in our Constitution which we would bewise to follow. They gave the Government the
fullest powerto prosecute overt actions in violation of valid lawsbut withheld any power to punish
people for nothing morethan advocacy of their views."  27

With the sentiments thus expressed uppermost in mymind and congenial to my way of thinking, I
cannot sharethe conclusion reached by my breathren as to the Anti-Subversion Act successfully
meeting the test of validity onfree speech and freedom of association grounds.
4. It could be that this approach to the constitutionalquestions involved arises from an appraisal of
the challengedstatute which for me is susceptible of an interpretationthat it does represent a
defeatist attitude on thepart of those of us, who are devotees at the shrine of aliberal-democratic
state. That certainly could not havebeen the thought of its framers; nonetheless, such an
assumptionis not devoid of plausibility for why resort tothis extreme measure susceptible as it is to
what apparentlyare not unfounded attacks on constitutional grounds?Is this not to ignore what
previously was accepted as anobvious truth, namely that the light of liberalism sendsits shafts in
many directions? It can illuminate, and itcan win the hearts and minds of men. It if difficult forme to
accept the view then that a resort to outlawry isindispensable, that suppression is the only answer to
whatis an admitted evil. There could have been a greater exposureof the undesirability of the
communist creed, itscontradictions and arbitrarines, its lack of fealty to reason,its inculcation of
disloyalty, and its subservience tocentralized dictation that brooks no opposition. It is thus,in a
realistic sense, a manifestation of the fear of freethought and the will to suppress it. For better, of
course,is the propaganda of the deed. What the communists promise,this government can fulfill. It is
up to it then to takeremedial measures to alleviate the condition of our countrymenwhose lives are in
a condition of destitution andmisery. It may not be able to change matters radically.At least, it should
take earnest steps in that direction.What is important for those at the bottom of the economicpyramid
is that they are not denied the opportunity for abetter life. If they, or at least their children, cannot
evenlook forward to that, then a constitutional regime is nothingbut a mockery and a tragic illusion.
Such a response,I am optimistic enough to believe, has the merit of thinning,if not completely
eliminating, the embattled ranksand outposts of ignorance, fanaticism and error. That forme would
be more in accordance with the basic propositionof our polity. This is not therefore to preach a
doctrine of object surrender to the forces apparently bent on the adoption of a way of life so totally
opposed to the deeply felt traditions of our people. This is, for me at least, an affirmation of the
vitality of the democratic creed, with an expression of regret that it could not have been more
impressively set forth in language worthy of the subject.

It is in the light of the views above expressed that I find myself unable to yield concurrence to the
ably-written opinion of Justice Castro for the Court sustaining the validity of the Anti-Subversion Act.

Separate Opinions

FERNANDO, J., dissenting:

It is with regard that I find myself unable to join therest of my brethren in the decision reached
upholding thevalidity of the Anti-Subversion Act.  It is to be admittedthat the learned and scholarly
1

opinbion of Justice Castro hasthe impress of conscientious and painstaking scrutiny ofthe
constitutional issues raised. What is more, the stressin the concluding portion thereof on basic
guidelines thatwill assure in the trial of those prosecuted under suchAct respect for their
constitutional rights is to be commended.Nonetheless, my own reading of the decisionscited,
interpreting the bill of attainder clause  coupled withthe fears, perhaps induced by a too-latitudinarian
2

constructionof the guarantees of freedom of belief and expression  as well as freedom of
3

association   as to impermissible inroadsto which they may be exposed, compels a

4

differentconclusion. Hence this dissent.

1. There is to be sure no thought on my part that theequally pressing concern of state safety and
security shouldbe ignored. The political branches of the governmentwould lay themselves oepn to a
justifiable indictment fornegligence had they been remiss in their obligation tosafeguard the nation
against its sworn enemies. In a simplerera, where the overthrow of the government wasusually
through the rising up in arms, with weapons farless sophisticated than those now in existence, there
wasno constitutional issue of the magnitude that now confrontsus. Force has to be met with force. It
was as clearcutas that. Advances in science as well as more subtlemethods of inducing disloyalty
and weakening the senseof allegiance have introduced complexities in coping withsuch problems.
There must be then, and I am the firstto recognize it, a greater understanding for the
governmentalresponde to situations of that character. It is inthat light that the validity of the Anti-
Subversion Act isto be appraised. From ny standpoint, and I am not presumptuousenough to claim
that it is the only perspectiveor that is the most realistic, I feel that there was an
insufficientappreciation of the compulsion of the constitutionalcommands against bills of attainder
and abridgmentof free speech. I am comforted by the thought that evenhad my view prevailed, all
that it would mean is that anew legislation, more in comformity to my way of thinkingto what is
ordained by the fundamental law, wouldhave to be enacted. No valid fear need be entertained
thenthat a setback would be occasioned to legitilate state effortsto stem the tide of subversive
activities, in whateverform manifested.

2. The starting point in any inquiry as to the significanceof the bill of attainder clause is the meaning
attachedto it by the Constitutional Convention of 1934 and by the people who adopted it. As was
explained by the then Delegate, later Justice, Jose P. Laurel in his address on November19, 1934
as Chairman of the Committee on the Bill of Rights quoted in the opinion of the Court: "A billof
attainder is a legislative act which inflicts punishment without judicial trial. (Cummings v. United
States, 4Wall. 277, 18 L ed 356). In England, the Bill of Attainder was an act of Parliament by which
a man was tried, convictedand sentenced to death without a jury, without ahearing in court, without
hearing the witnesses againsthim and without regard to the rules of evidence. His bloodwas
attainted or corrupted, rendering him devoid of allheritable quality — of acquiring and disposing
property bydescent. (Ex parte Garland, 4 Wall. 333, 18 L ed. 366) If the penalty imposed was less
than death, the act wasknown as a 'bill of pains and penalties.' Bills of attainder, like ex post
facto laws, were favorite methods of Stuartoppression. Once, the name of Thomas Jefferson was
includedin a bill of attainder presented to Parliament becauseof his reform activities."  Two American
5

SupremeCourt decision were thus in the minds of the framers.They are Cummings v.
Missouri   and Ex parte Garland.   They speak unequivocally. Legislative acts, no matter whattheir
6 7

form, that apply either to named individuals or easilyascertainable members of a group in such a
way as to inflicton them punishment amounting to a deprivation ofany right, civil or political, without
judicial trial are billsof attainder prohibited by the Constitution. 
8

Cummings v. Missouri   was a criminal prosecution ofa Catholic priest for refusing to take the loyalty
9

oath requiredby the state Constitution of Missouri of 1865. Undersuch a provision, lawyers, doctors,
ministers, and otherprofessionals must disavow that they had ever, "by act orword," manifested a
"desire" for the success of the nation'senemies or a sympathy" with the rebels of the AmericanCivil
War. If they swore falsely, they were guilty of perjury.If they engaged in their professions without
theoath, they were criminally liable. The United States Supreme Court condemned the provision as a
bill of attainder,identified as any legislative act inflicting punishment withoutjudicial trial. The
deprivation of any right, civil orpolitical, previously enjoyed, amounted to a punishment.Why such a
conclusion was unavoidable was explained inthe opinion of Justice Field thus: "A bill of attainder isa
legislative act, which inflicts punishment without a judicialtrial. If the punishment be less than death,
the actis termed a bill of pains and penalties. Within the meaningof the Constitution, bills of attainder
include bills ofpains and penalties. In these cases the legislative body, inaddition to its legitimate
functions, exercises the powersand office of judge; it assumes, in the language of thetextbooks,
judicial magistracy; it pronounces upon theguilt of the party, without any of the forms or safeguardsof
trial; it determines the sufficiency of the proofs produced,whether conformable to the rules of
evidence orotherwise; and it fixes the degree of punishment in accordancewith its own notions of the
enormity of the offense. ... If the clauses of the 2d article of the Constitutionof Missouri, to which we
have referred, had in termsdeclared that Mr. Cummings was guilty, or should be heldguilty, of having
been in armed hostility to the UnitedStates, or of having entered that state to avoid beingenrolled or
drafted into the military service of the UnitedStates, and, therefore, should be deprived of the right
topreach as a priest of the Catholic church, or to teach inany institution of learning, there could be no
question thatthe clauses would constitute a bill of attainder within themeaning of the Federal
Constitution. If these clauses, insteadof mentioning his name, had declared that all priestsand
clergymen within the state of Missouri were guiltyof these acts, or should be held guilty of them, and
hencebe subjected to the like deprivation, the clause would beequally open to objection. And further,
it these clauseshad declared that all such priests and clergymen shouldbe so held guilty, and be
thus deprived, provided they didnot, by a day designated, do certain specified acts, theywould be no
less within the inhibition of the Federal Constitution.In all these cases there would be the
legislativeenactment creating the deprivation, without any of theordinary forms and guards provided
for the security ofthe citizen in the administration of justice by the establishedtribunales."  10

On the very same day that the ruling in Cummings washanded down, Ex parte Garland   was also
11

decided. Thatwas a motion for leave to practrice as an attorney beforethe American Supreme Court.
Petitioner Garland wasadmitted to such bar at the December term of 1860. Underthe previous rules
of such Court, all that was necessarywas that the applicant have three years practice in the
statecourts to which he belonged. In March 1865, the rule waschanged by the addition of a clause
requiring that an oathbe taken under the Congressional acts of 1862 and 1865to the effect that such
candidate for admission to the barhad never voluntarily borne arms against the UnitedStates.
Petitioner Garland could not in conscience subscribeto such an oath, but he was able to show a
presidentialpardon extended on July 15, 1865. With such actof clemency, he moved that he be
allowed to continue inpractice contending that the test oath requirement wasunconstitutional as a bill
of attainder and that at any rate,he was pardoned. The same ruling was announced by theCourt
again through Justice Field. Thus: "In the exclusionwhich the statute adjudges, it imposes a
punishmentfor some of the acts specified which were not punishableat the time they were
committedl; and for other of the actsit adds a new punishment to that before prescribed, andit is thus
brought within the further inhibition of the Consitutionagainst the passage of an ex post facto law.
Inthe case of Cummings v. Missouri, just decided, ... wehave had occasion to consider at length the
meaning of abill of attainder and of an ex post facto law in the clauseof the Constitution forbidding
their passage by the states,and it is unnecessary to repeat here what we there said.A like prohibition
is contained in the Constitution againstenactments of this kind by Congress; and the
argumentpresented in that case against certain clauses of the Constitutionof Missouri is equally
applicable to the act ofCongress under consideration in this case."  12

There was a reiteration of the Cummings and Garlanddoctrine in United States v. Lovett,   decided
13

in 1946.There it was shown that in 1943 the respondents, Lovett,Watson, and Dodd, were and had
been for several yearsworking for the government. The government agencies,which had lawfully
employed them, were fully satisfiedwith the quality of their work and wished to keep thememployed
on their jobs. Over their protest, Congress providedin Section 304 of the Urgent Deficiency
AppropriationAct of 1943, by way of an amendment attached to theHouse Bill, that after November
15, 1943, no salary orcompensation should be paid respondent out of any moneythen or thereafter
appropriated except for services as jurorsor members of the armed forces, unless they wereprior to
November 15, 1943, again appointed to jobs bythe President with the advide and consent of the
Senate.Notwithstanding such Congressional enactment, and thefailure of the President to reappoint
the respondents, theagencies, kept all the respondents at work on their jobs forvarying periods after
November 15, 1943, but their compensationwas discontinued after that date. Respondentsbrought
this action in the Court of Claims for the salariesto which they felt entitled. The Ameican Supreme
Courtstated that its inquiry was thus confined to whether theaction in the light of proper construction
of the Act presenteda justificiable controversy, and, if so, whether Section304 is a bill of attainder
insofar as the respondents wereconcerned.
After holding that there was a juditiciable, view theAmerican Supreme Court in an opinion by Justice
Blackcategorically affirmed: "We hold that Section 304 fallsprecisely within the category of
Congressional actionswhich the Constitution barred by providing that 'No Billof Attainder or ex post
Law shall be passed.' InCummings v. State of Missouri, ... this Court said, 'Abill of attainder is a
legislative act which inflicts punishmentwithout a judicial trial. If the punishment be lessthan death,
the act is termed a bill of pains and penalties.Within the meaning of the Constitution, bills of
attainderinclude bills of pains and penalties.' ... On the sameday the Cummings case was decided,
the Court, in Exparte Garland, also held invalid on the same grounds anAct of Congress which
required attorneys practicing beforethis Court to take a similar oath. Neither of thesecases has ever
been overruled. They stand for the propositionthat legislative acts, no matter what their form,that
apply either to named individuals or to easily ascertainablemembers of a group in such a way as to
inflictpunishment on them without a judicial trial are billsof attainder prohibited by the Constitution.
Adherenceto this principle requires invalidation of Section 304. Wedo adhere to it."  14

United States v. Brown   a 1965 decision was the firstcase to review a conviction under the Labor-
15

ManagementReporting and Disclosure Act of 1959, making it a crimefor a member of the

Communist Party to serve as anofficer ir, except in clerical or custodial positions, anemployee of a
labor union. Respondent Brown, a longshoremanon the San Francisco docks, and an open
andavowed Communist, for more than a quarter of a centurywas elected to the Executive Board of
Local 10 of theInternational Longshoremen's and Warehousemen's Unionfor consecutive one-year
terms in 1959, 1960, and 1961.On May 24, 1961, respondent was charged in a one-countindictment
returned in a district court of California withservicing as a member of an executive board of a
labororganization while a member of the Communist Party, inwillful violation of the above provision.
The question ofits validity under the bill of attainder clause was thusproperly raised for adjudication.
While convicted in thelower court, the Court of Appeals for the Ninth Circuitreversed. It was
sustained by the American SupremeCourt. As noted in the opinion by Chief Justice Warren,"the wide
variation in form, purpose and effect of ante-Constitutionbills of attainder indicates that the
properscope of the Bill of Attainder Clause, and its relevance tocontemporary problems, must
ultimately be sought by attemptingto discern the reasons for its inclusion in theConstitution, and the
evils it was desinged to eliminate.The best available evidence, the writings of the architectsof our
constitutional system, indicates that the Bill ofAttainder Clause was inteded not as a narrow,
technical(and therefore soon to be outmoded) prohibition, but ratheras an implementation of the
separation of powers, ageneral safeguard against legislative exercise of the judicialfunction, or more
simply — trial by legislature."   Then after referring to Cummings, Garland, and Lovett,Chief Justice
16

Warren continued: "Under the line of casesjust outlined, Sec. 504 of the Labor Management
Reportingand Disclosure Act plainly constitutes a bill of attainder. Congress undoubtedly possesses
power under theCommerce Clause to enact legislation designed to keepfrom positions affecting
interstate commerce persons whomay use such positions to bring about political strikes. In Sec. 504,
however, Congress has exceeded the authoritygranted it by the Constitution. The statute does not
setforth a generally applicable rule decreeing that any personwho commits certain acts or possesses
certain characteristics (acts and characteristics whhich, in Congress'view, make them likely to initiate
political strikes) shallnot hold union office, and leave to courts and juries thejob of deciding what
persons have committed the specifiedacts or possessed the specified characteristics. Instead,it
designates in no uncertain terms the personswho possess the fearec characteristics and therefore
cannothold union office without incurring criminal liability — members of the Communist Party."  17

Even Communist Party v. Subversive Activities ControlBoard,   where the provision of the
18

Subversive ActivitiesControl Act of 1950 requiring the Communist Party ofthe United States to
register was sustained, the opinionof Justice Frankfurter for the Court, speaking for a five-
manmajority, did indicate adherence to the Cummingsprinciple. Had the American Communist Party
been outlawed,the outcome certainly would have been different.Thus: "The Act is not a bill of
attainder. It attaches notto specified organizations but to described activities inwhich an organization
may or may not engage. The singlingout of an individual for legislatively prescribed
punishmentconstitutes an attainder whether the individualis called by name or described in terms of
conduct which,because it is past conduct, operates only as a designationof particular persons. ...
The Subversive Activities ControlAct is not of that king. It requires the registrationonly of
organizations which, after the date of the Act,are found to be under the direction, domination, or
controlof certain foreign powers and to operate primarily toadvance certain objectives. This finding
must be madeafter full administrative hearing, subject to judicial reviewwhich opens the record for
the reviewing court'sdetermination whether the administrative findings as tofact are supported by the
preponderance of the evidence.Present activity constitutes an operative element to whichthe statute
attaches legal consequences, not merely a pointof reference for the ascertainment of particularly
personsineluctably designated by the legislature."  19

The teaching of the above cases, which I find highlypersuasive considering what appeared to be in
the mindsof the framers of the 1934 Constitutional Conventionyields for me the conclusion that the
Anti-SubversionAct falls within the ban of the bill of attainder clause. Itshould be noted that three
subsequent cases upholding theCummings and Garland doctrine were likewise cited in theopinion of
the Court. The interpretation accorded to themby my brethren is, of course, different but I am unable
togo along with them especially in the light of the categoricallanguage appearing in Lovett. This is
not to lose sightof the qualification that for them could deprive such aholding of its explicit character
as shown by this excerptfrom the opinion of the Court: "Indeed, were the Anti-SubversionAct a bill of
attainder it would be totally unnecessaryto charge communists in court, as the law alone,without
more, would suffice to secure their conviction andpunishment. But the fact is that their guilt still has
to bejudicially estblished. The Government has yet to proveat the trial that the accused joined the
Party knowingly,willfully and by overt acts, and that they joined the Partyknowing its subversive
character and with specific intentto further its objective, i.e., to overthrow the existing Governmentby
force, deceit, and other illegal means and placeit under the control and domination of a foreign
power. 20While not implausible, I find difficulty in yielding acceptance.In Cummings, there was a
criminal prosecution ofthe Catholic priest who refused to take the loyalty oath.Again in Brown, there
was an indictment of the laborleader who, judging by his membership in the CommunistParty, did
transgress the statutory provision subsequentlyfound offensive to the bill attainder clause. If the
constructionI would place on theoff-repeated pronouncementof the American Supreme Court is
correct, then the merefact that a criminal case would have to be instituted wouldnot save the statute.
It does seem clear to me that fromthe very title of the Anti-Subversion Act, "to outlaw the Communist
Party of the Philippines and similar associations,"not to mention other specific provisions, the taintof
invalidity is quite marked. Hence, my inability to concurin the judgment reached as the statute not
suffering fromany fatal infirmity in view of the Constitutional prohibitionagainst bills of attainder.

3. This brings me to the question of the alleged repugnancyof the Anti-Subversion Act to the
intellectual libertysafeguarded by the Constitution in terms of the free speechand free assocition
guarantees.   It is to be admitted thatat the time of the enactment of Republic Act No. 1700,the
21

threat that Communism, the Russian brand then, didpose was a painful reality for Congressional
leaders andthe then President. Its shadow fell squarely across thelives of all. Subversion then could
neither be denied notdisparaged. There was, in the expert opinion of those conversantwith such
mattes, a danger to out national existenceof no mean character. Nonetheless, the remedies toward
off such menace must not be repugnant to our Constitution.We are legally precluded from acting in
anyother way. The apprehension justly felt is no warrant forthrowing to the discard fundamental
guarantees. Vigilantwe had to be, but not at the expense of constitutional ideals.

One of them, certainly highly-prized of the utmost significance,is the right to dissent. One can differ,
evenobject; one can express dissatisfaction with things as theyare. There are timew when one not
only can but must.Such dissent can take the form of the most critical andthe most disparaging
remarks. They may give offense tothose in authority, to those who wield powe and
influence.Nevertheless, they are entitled to constitutional protection.Insofar as the content of such
dissent is concerned, thelimits are hardly discernible. It cannot be confined totrivial matters or to
such as are devoid of too much significance.It can reach the heart of things. Such dissentmay, for
those not so adventurous in the realm of ideas,possess a subversive tinge. Even those who oppose
a democraticform of government cannot be silenced. This is trueespecially in centers of learning
where scholars competentin their line may, as a result of their studies, assert thata future is bleak for
the system of government now favoredby Western democracies. There may be doubts
entertainedby some as to the lawfulness of their exercisingthis right to dissent to the point of
advocary of such adrastic change. Any citizen may do so without fear thatthereby he incurs the risk
of a penal sanction. That ismerely to affirm the truth of this ringing declaration fromJefferson: "If
there be any among us who would wish todissolve this union or to change its republican form,
letthem stand undisturbed as monuments of the safety withwhich error of opinion may be tolerated
where reason isleft free to combat it."   As was so well put by the philosopher,Sidney Hook: "Without
22

holding the right to theexpression of heresy at any time and place to be absolute — for even the right
to non-heretical speech cannot beabsolute — it still seems wise to tolerate the expression evenof
Communist, fascist and other heresies, lest in outlawingthem we include other kings of heresies, and
deprive ourselvesof the opportunity to acquite possibly sounder ideasthan our own."  23

The line is to be drawn, however, where the wordsamount to an incitement to commit the crime of
seditionor rebellion. The state has been reached, to follow theformulation of Cardozo, where thought
merges into action.Thus is loyalty shown to the freedom of speech or pressordained by the
Constitution. It does not bar the expressionof views affecting the very life of the state, even
ifopposed to its fundamental presuppositions. It allows, ifit does not require as a matter of fact, that
unorthodoxideas be freely ventilated and fully heard. Dissent is notdisloyalty.

Such an approach is reinforced by the well-settled constitutionalprinciple "that even though the
governmental purposesbe legitimate and substantial, they cannot be pursuedby means that broadly
stifle fundamental personalliberties when the end can be more narrowly achieved.For precision of
regulation is the touchstone in an areaso closely related to our most precious freedoms."   This is so
24

for "a governmental purpose to control or prevent activities constitutionally subject to state regulation
may notbe achieved by means which sweep unnecessarily broadlyand thereby invade the area of
protected freedoms."   It isindispensable then that "an over breadth" in the applicabilityof the statute
25

be avoided. If such be the case, then theline dividing the valid from the constitutionally infirm
hasbeen crossed. That for me is the conclusion to be drawnfrom the wording of the Anti-Subversion
Act.

There is to my mind support for the stand I take inthe dissent of Justice Black in the Communist
Party casediscussed above. What is to be kept in view is that a legislativemeasure certainly less
drastic in its treatment ofthe admittedly serious Communist problem was found inthe opinion of this
noted jurist offensive to the FirstAmendment of the American Constitution safeguardingfree speech.
Thus: "If there is one thing certain aboutthe First Amendment it is that this Amendment was
designedto guarantee the freest interchange of ideas aboutall public matters and that, of course,
means the interchangeof all ideas, however such ideas may be viewed inother countries and
whatever change in the existing structureof government it may be hoped that these ideas willbring
about. Now, when this country is trying to spreadthe high ideals of democracy all over the world —
ideals that are revolutionary in many countries — seems to be aparticularly inappropriate time to
stifle First Amendmentfreedoms in this country. The same arguments that areused to justify the
outlawry of Communist ideas here couldbe used to justify an outlawry of the ideas of democracyin
other countries."   Further he stated: "I believe with theFramers of the First Amendment that the
26

internal securityof a nation like ours does not and cannot be made todepend upon the use of force
by Government to make allthe beliefs and opinions of the people fit into a commonmold on any
single subject. Such enforced conformity ofthought would tend only to deprive our people of the
boldspirit of adventure and progress which has brought thisNation to its present greatness. The
creation of publicopinion by groups, organizations, societies, clubs, and partieshas been and is a
necessary part of our democraticsociety. Such groups, like the Sons of Liberty and theAmerican
Corresponding Societies, played a large part increating sentiment in this country that led the people
ofthe Colonies to want a nation of their own. The Father ofthe Constitution — James Madison —
said, in speakingof the Sedition Act aimed at crushing the Jefferson Party,that had that law been in
effect during the period beforethe Revolution, the United States might well have continuedto be
'miserable colonies, groaning under a foreign yoke.'In my judgment, this country's internal security
can betterbe served by depending upon the affection of the peoplethan by attempting to instill them
with fear and dreadof the power of Government. The Communist Party hasnever been more than a
small group in this country. Andits numbers had been dwindling even before the Governmentbegan
its campaign to destroy the Party by force oflaw. This was because a vast majority of the
Americanpeople were against the Party's policies and overwhelminglyrejected its candidates year
after year. That is the trueAmerican way of securing this Nation against dangerousideas. Of course
that is not the way to protect the Nationagainst actions of violence and treason. The Foundersdrew a
distinction in our Constitution which we would bewise to follow. They gave the Government the
fullest powerto prosecute overt actions in violation of valid lawsbut withheld any power to punish
people for nothing morethan advocacy of their views."  27

With the sentiments thus expressed uppermost in mymind and congenial to my way of thinking, I
cannot sharethe conclusion reached by my breathren as to the Anti-Subversion Act successfully
meeting the test of validity onfree speech and freedom of association grounds.

4. It could be that this approach to the constitutionalquestions involved arises from an appraisal of
the challengedstatute which for me is susceptible of an interpretationthat it does represent a
defeatist attitude on thepart of those of us, who are devotees at the shrine of aliberal-democratic
state. That certainly could not havebeen the thought of its framers; nonetheless, such an
assumptionis not devoid of plausibility for why resort tothis extreme measure susceptible as it is to
what apparentlyare not unfounded attacks on constitutional grounds?Is this not to ignore what
previously was accepted as anobvious truth, namely that the light of liberalism sendsits shafts in
many directions? It can illuminate, and itcan win the hearts and minds of men. It if difficult forme to
accept the view then that a resort to outlawry isindispensable, that suppression is the only answer to
whatis an admitted evil. There could have been a greater exposureof the undesirability of the
communist creed, itscontradictions and arbitrarines, its lack of fealty to reason,its inculcation of
disloyalty, and its subservience tocentralized dictation that brooks no opposition. It is thus,in a
realistic sense, a manifestation of the fear of freethought and the will to suppress it. For better, of
course,is the propaganda of the deed. What the communists promise,this government can fulfill. It is
up to it then to takeremedial measures to alleviate the condition of our countrymenwhose lives are in
a condition of destitution andmisery. It may not be able to change matters radically.At least, it should
take earnest steps in that direction.What is important for those at the bottom of the economicpyramid
is that they are not denied the opportunity for abetter life. If they, or at least their children, cannot
evenlook forward to that, then a constitutional regime is nothingbut a mockery and a tragic illusion.
Such a response,I am optimistic enough to believe, has the merit of thinning,if not completely
eliminating, the embattled ranksand outposts of ignorance, fanaticism and error. That forme would
be more in accordance with the basic propositionof our polity. This is not therefore to preach a
doctrine of object surrender to the forces apparently bent on the adoption of a way of life so totally
opposed to the deeply felt traditions of our people. This is, for me at least, an affirmation of the
vitality of the democratic creed, with an expression of regret that it could not have been more
impressively set forth in language worthy of the subject.

It is in the light of the views above expressed that I find myself unable to yield concurrence to the
ably-written opinion of Justice Castro for the Court sustaining the validity of the Anti-Subversion Act.
 G.R. No. 190582 : April 8, 2010

ANG LADLAD LGBT PARTY represented herein by its Chair, DANTON

REMOTO, Petitioner, v. COMMISSION ON ELECTIONS Respondent.

DECISION

DEL CASTILLO, J.:

... [F]reedom to differ is not limited to things that do not matter much. That would be a
mere shadow of freedom. The test of its substance is the right to differ as to things that
touch the heart of the existing order.

Justice Robert A. Jackson

West Virginia State Board of Education v. Barnette 1 cräläwvirtualibräry

One unavoidable consequence of everyone having the freedom to choose is that others
may make different choices - choices we would not make for ourselves, choices we may
disapprove of, even choices that may shock or offend or anger us. However, choices are
not to be legally prohibited merely because they are different, and the right to disagree
and debate about important questions of public policy is a core value protected by our
Bill of Rights. Indeed, our democracy is built on genuine recognition of, and respect for,
diversity and difference in opinion.

Since ancient times, society has grappled with deep disagreements about the
definitions and demands of morality. In many cases, where moral convictions are
concerned, harmony among those theoretically opposed is an insurmountable goal. Yet
herein lies the paradox - philosophical justifications about what is moral are
indispensable and yet at the same time powerless to create agreement. This Court
recognizes, however, that practical solutions are preferable to ideological stalemates;
accommodation is better than intransigence; reason more worthy than rhetoric. This
will allow persons of diverse viewpoints to live together, if not harmoniously, then, at
least, civilly.

Factual Background

This is a Petition for Certiorari under Rule 65 of the Rules of Court, with an application

for a writ of preliminary mandatory injunction, filed by Ang Ladlad LGBT Party (Ang
Ladlad) against the Resolutions of the Commission on Elections (COMELEC) dated
November 11, 20092  (the First Assailed Resolution) and December 16, 20093  (the
c�fa c�fa

Second Assailed Resolution) in SPP No. 09-228 (PL) (collectively, the Assailed
Resolutions). The case has its roots in the COMELEC's refusal to accredit Ang Ladlad as
a party-list organization under Republic Act (RA) No. 7941, otherwise known as the
Party-List System Act.4 c�fa

Ang Ladlad is an organization composed of men and women who identify themselves as
lesbians, gays, bisexuals, or trans-gendered individuals (LGBTs). Incorporated in
2003, Ang Ladlad first applied for registration with the COMELEC in 2006. The
application for accreditation was denied on the ground that the organization had no
substantial membership base. On August 17, 2009, Ang Ladlad again filed a
Petition5  for registration with the COMELEC.
c�fa

Before the COMELEC, petitioner argued that the LGBT community is a marginalized and
under-represented sector that is particularly disadvantaged because of their sexual
orientation and gender identity; that LGBTs are victims of exclusion, discrimination, and
violence; that because of negative societal attitudes, LGBTs are constrained to hide
their sexual orientation; and that Ang Ladlad complied with the 8-point guidelines
enunciated by this Court in Ang Bagong Bayani-OFW Labor Party v. Commission on
Elections.6  Ang Ladlad laid out its national membership base consisting of individual
c�fa

members and organizational supporters, and outlined its platform of governance.7 c�fa

On November 11, 2009, after admitting the petitioner's evidence, the COMELEC
(Second Division) dismissed the Petition on moral grounds, stating that:

x x x This Petition is dismissible on moral grounds. Petitioner defines the Filipino

Lesbian, Gay, Bisexual and Transgender (LGBT) Community, thus:

x x x a marginalized and under-represented sector that is particularly disadvantaged

because of their sexual orientation and gender identity and proceeded to define sexual
orientation as that which:

x x x refers to a person's capacity for profound emotional, affectional and sexual

attraction to, and intimate and sexual relations with, individuals of a different gender,
of the same gender, or more than one gender."

This definition of the LGBT sector makes it crystal clear that petitioner tolerates
immorality which offends religious beliefs. In Romans 1:26, 27, Paul wrote:

For this cause God gave them up into vile affections, for even their women did change
the natural use into that which is against nature: And likewise also the men, leaving the
natural use of the woman, burned in their lust one toward another; men with men
working that which is unseemly, and receiving in themselves that recompense of their
error which was meet.

In the Koran, the hereunder verses are pertinent:

For ye practice your lusts on men in preference to women "ye are indeed a people
transgressing beyond bounds." (7.81) "And we rained down on them a shower (of
brimstone): Then see what was the end of those who indulged in sin and crime!" (7:84)
"He said: "O my Lord! Help Thou me against people who do mischief" (29:30).

As correctly pointed out by the Law Department in its Comment dated October 2, 2008:

The ANG LADLAD apparently advocates sexual immorality as indicated in the Petition's
par. 6F: 'Consensual partnerships or relationships by gays and lesbians who are already
of age'. It is further indicated in par. 24 of the Petition which waves for the record: 'In
2007, Men Having Sex with Men or MSMs in the Philippines were estimated as 670,000
(Genesis 19 is the history of Sodom and Gomorrah).

Laws are deemed incorporated in every contract, permit, license, relationship, or

accreditation. Hence, pertinent provisions of the Civil Code and the Revised Penal Code
are deemed part of the requirement to be complied with for accreditation.

ANG LADLAD collides with Article 695 of the Civil Code which defines nuisance as 'Any
act, omission, establishment, business, condition of property, or anything else which x
x x (3) shocks, defies; or disregards decency or morality x x x

It also collides with Article 1306 of the Civil Code: 'The contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public order
or public policy. Art 1409 of the Civil Code provides that 'Contracts whose cause, object
or purpose is contrary to law, morals, good customs, public order or public policy' are
inexistent and void from the beginning.

Finally to safeguard the morality of the Filipino community, the Revised Penal Code, as
amended, penalizes 'Immoral doctrines, obscene publications and exhibitions and
indecent shows' as follows:

Art. 201. Immoral doctrines, obscene publications and exhibitions, and indecent shows.
- The penalty of prision mayor or a fine ranging from six thousand to twelve thousand
pesos, or both such imprisonment and fine, shall be imposed upon:

1. Those who shall publicly expound or proclaim doctrines openly contrary to public

morals;

2. (a) The authors of obscene literature, published with their knowledge in any form;
the editors publishing such literature; and the owners/operators of the establishment
selling the same;

(b) Those who, in theaters, fairs, cinematographs or any other place, exhibit indecent
or immoral plays, scenes, acts or shows, it being understood that the obscene literature
or indecent or immoral plays, scenes, acts or shows, whether live or in film, which are
prescribed by virtue hereof, shall include those which: (1) glorify criminals or condone
crimes; (2) serve no other purpose but to satisfy the market for violence, lust or
pornography; (3) offend any race or religion; (4) tend to abet traffic in and use of
prohibited drugs; and (5) are contrary to law, public order, morals, good
customs, established policies, lawful orders, decrees and edicts.

3. Those who shall sell, give away or exhibit films, prints, engravings, sculpture or
literature which are offensive to morals.

Petitioner should likewise be denied accreditation not only for advocating immoral
doctrines but likewise for not being truthful when it said that it "or any of its
nominees/party-list representatives have not violated or failed to comply with laws,
rules, or regulations relating to the elections."
Furthermore, should this Commission grant the petition, we will be exposing our youth
to an environment that does not conform to the teachings of our faith. Lehman Strauss,
a famous bible teacher and writer in the U.S.A. said in one article that "older practicing
homosexuals are a threat to the youth." As an agency of the government, ours too is
the State's avowed duty under Section 13, Article II of the Constitution to protect our
youth from moral and spiritual degradation.8 cräläwvirtualibräry

When Ang Ladlad sought reconsideration,9  three commissioners voted to overturn the

c�fa

First Assailed Resolution (Commissioners Gregorio Y. Larrazabal, Rene V. Sarmiento,

and Armando Velasco), while three commissioners voted to deny Ang Ladlad's Motion
for Reconsideration (Commissioners Nicodemo T. Ferrer, Lucenito N. Tagle, and Elias R.
Yusoph). The COMELEC Chairman, breaking the tie and speaking for the majority in his
Separate Opinion, upheld the First Assailed Resolution, stating that:

I. The Spirit of Republic Act No. 7941

Ladlad is applying for accreditation as a sectoral party in the party-list system. Even
assuming that it has properly proven its under-representation and marginalization, it
cannot be said that Ladlad's expressed sexual orientations per se would benefit the
nation as a whole.

Section 2 of the party-list law unequivocally states that the purpose of the party-list
system of electing congressional representatives is to enable Filipino citizens belonging
to marginalized and under-represented sectors, organizations and parties, and who lack
well-defined political constituencies but who could contribute to the formulation and
enactment of appropriate legislation that will benefit the nation as a whole, to become
members of the House of Representatives.

If entry into the party-list system would depend only on the ability of an organization to
represent its constituencies, then all representative organizations would have found
themselves into the party-list race. But that is not the intention of the framers of the
law. The party-list system is not a tool to advocate tolerance and acceptance of
misunderstood persons or groups of persons. Rather, the party-list system is a tool for
the realization of aspirations of marginalized individuals whose interests are also the
nation's ' only that their interests have not been brought to the attention of the nation
because of their under representation. Until the time comes when Ladlad is able to
justify that having mixed sexual orientations and transgender identities is beneficial to
the nation, its application for accreditation under the party-list system will remain just
that.

II. No substantial differentiation

In the United States, whose equal protection doctrine pervades Philippine

jurisprudence, courts do not recognize lesbians, gays, homosexuals, and bisexuals
(LGBT) as a "special class" of individuals. x x x Significantly, it has also been held that
homosexuality is not a constitutionally protected fundamental right, and that "nothing
in the U.S. Constitution discloses a comparable intent to protect or promote the social
or legal equality of homosexual relations," as in the case of race or religion or belief.

xxx
Thus, even if society's understanding, tolerance, and acceptance of LGBT's is elevated,
there can be no denying that Ladlad constituencies are still males and females,
and they will remain either male or female protected by the same Bill of Rights that
applies to all citizens alike.

xxx

IV. Public Morals

x x x There is no question about not imposing on Ladlad Christian or Muslim religious

practices. Neither is there any attempt to any particular religious group's moral rules on
Ladlad. Rather, what are being adopted as moral parameters and precepts are
generally accepted public morals. They are possibly religious-based, but as a society,
the Philippines cannot ignore its more than 500 years of Muslim and Christian
upbringing, such that some moral precepts espoused by said religions have sipped [sic]
into society and these are not publicly accepted moral norms.

V. Legal Provisions

But above morality and social norms, they have become part of the law of the land.
Article 201 of the Revised Penal Code imposes the penalty of prision mayor upon
"Those who shall publicly expound or proclaim doctrines openly contrary to public
morals." It penalizes "immoral doctrines, obscene publications and exhibition and
indecent shows." "Ang Ladlad" apparently falls under these legal provisions. This is
clear from its Petition's paragraph 6F: "Consensual partnerships or relationships by
gays and lesbians who are already of age' It is further indicated in par. 24 of the
Petition which waves for the record: 'In 2007, Men Having Sex with Men or MSMs in the
Philippines were estimated as 670,000. Moreoever, Article 694 of the Civil Code defines
"nuisance" as any act, omission x x x or anything else x x x which shocks, defies or
disregards decency or morality x x x." These are all unlawful.10 cräläwvirtualibräry

On January 4, 2010, Ang Ladlad filed this Petition, praying that the Court annul the
Assailed Resolutions and direct the COMELEC to grant Ang Ladlad's application for
accreditation. Ang Ladlad also sought the issuance ex parte of a preliminary mandatory
injunction against the COMELEC, which had previously announced that it would begin
printing the final ballots for the May 2010 elections by January 25, 2010.

On January 6, 2010, we ordered the Office of the Solicitor General (OSG) to file its
Comment on behalf of COMELEC not later than 12:00 noon of January 11,
2010.11  Instead of filing a Comment, however, the OSG filed a Motion for Extension,
c�fa

requesting that it be given until January 16, 2010 to Comment.12  Somewhat c�fa

surprisingly, the OSG later filed a Comment in support of petitioner's

application.13  Thus, in order to give COMELEC the opportunity to fully ventilate its
c�fa

position, we required it to file its own comment.14  The COMELEC, through its Law
c�fa

Department, filed its Comment on February 2, 2010.15 cräläwvirtualibräry

In the meantime, due to the urgency of the petition, we issued a temporary restraining
order on January 12, 2010, effective immediately and continuing until further orders
from this Court, directing the COMELEC to cease and desist from implementing the
Assailed Resolutions.16
c�fa
Also, on January 13, 2010, the Commission on Human Rights (CHR) filed a Motion to
Intervene or to Appear as Amicus Curiae, attaching thereto its Comment-in-
Intervention.17  The CHR opined that the denial of Ang Ladlad's petition on moral
c�fa

grounds violated the standards and principles of the Constitution, the Universal
Declaration of Human Rights (UDHR), and the International Covenant on Civil and
Political Rights (ICCPR). On January 19, 2010, we granted the CHR's motion to
intervene.

On January 26, 2010, Epifanio D. Salonga, Jr. filed his Motion to Intervene18  which
c�fa

motion was granted on February 2, 2010.19 cräläwvirtualibräry

The Parties' Arguments

Ang Ladlad argued that the denial of accreditation, insofar as it justified the exclusion
by using religious dogma, violated the constitutional guarantees against the
establishment of religion. Petitioner also claimed that the Assailed Resolutions
contravened its constitutional rights to privacy, freedom of speech and assembly, and
equal protection of laws, as well as constituted violations of the Philippines'
international obligations against discrimination based on sexual orientation.

The OSG concurred with Ang Ladlad's petition and argued that the COMELEC erred in
denying petitioner's application for registration since there was no basis for COMELEC's
allegations of immorality. It also opined that LGBTs have their own special interests and
concerns which should have been recognized by the COMELEC as a separate
classification. However, insofar as the purported violations of petitioner's freedom of
speech, expression, and assembly were concerned, the OSG maintained that there had
been no restrictions on these rights.

In its Comment, the COMELEC reiterated that petitioner does not have a concrete and
genuine national political agenda to benefit the nation and that the petition was validly
dismissed on moral grounds. It also argued for the first time that the LGBT sector is not
among the sectors enumerated by the Constitution and RA 7941, and that petitioner
made untruthful statements in its petition when it alleged its national existence
contrary to actual verification reports by COMELEC's field personnel.

Our Ruling

We grant the petition.

Compliance with the Requirements of the Constitution and Republic Act No. 7941

The COMELEC denied Ang Ladlad's application for registration on the ground that the
LGBT sector is neither enumerated in the Constitution and RA 7941, nor is it associated
with or related to any of the sectors in the enumeration.

Respondent mistakenly opines that our ruling in Ang Bagong Bayani stands for the
proposition that only those sectors specifically enumerated in the law or related to said
sectors (labor, peasant, fisherfolk, urban poor, indigenous cultural communities,
elderly, handicapped, women, youth, veterans, overseas workers, and professionals)
may be registered under the party-list system. As we explicitly ruled in Ang Bagong
Bayani-OFW Labor Party v. Commission on Elections,20  "the enumeration of
c�fa

marginalized and under-represented sectors is not exclusive". The crucial element is not
whether a sector is specifically enumerated, but whether a particular organization
complies with the requirements of the Constitution and RA 7941.

Respondent also argues that Ang Ladlad made untruthful statements in its petition

when it alleged that it had nationwide existence through its members and affiliate
organizations. The COMELEC claims that upon verification by its field personnel, it was
shown that "save for a few isolated places in the country, petitioner does not exist in
almost all provinces in the country."21c�fa

This argument that "petitioner made untruthful statements in its petition when it
alleged its national existence" is a new one; previously, the COMELEC claimed that
petitioner was "not being truthful when it said that it or any of its nominees/party-list
representatives have not violated or failed to comply with laws, rules, or regulations
relating to the elections." Nowhere was this ground for denial of petitioner's
accreditation mentioned or even alluded to in the Assailed Resolutions. This, in itself, is
quite curious, considering that the reports of petitioner's alleged non-existence were
already available to the COMELEC prior to the issuance of the First Assailed Resolution.
At best, this is irregular procedure; at worst, a belated afterthought, a change in
respondent's theory, and a serious violation of petitioner's right to procedural due
process.

Nonetheless, we find that there has been no misrepresentation. A cursory perusal

of Ang Ladlad's initial petition shows that it never claimed to exist in each province of
the Philippines. Rather, petitioner alleged that the LGBT community in the Philippines
was estimated to constitute at least 670,000 persons; that it had 16,100 affiliates and
members around the country, and 4,044 members in its electronic discussion
group.22  Ang Ladlad also represented itself to be "a national LGBT umbrella
c�fa

organization with affiliates around the Philippines composed of the following LGBT
networks:"

' Abra Gay Association

' Aklan Butterfly Brigade (ABB) - Aklan

' Albay Gay Association

' Arts Center of Cabanatuan City - Nueva Ecija

' Boys Legion - Metro Manila

' Cagayan de Oro People Like Us (CDO PLUS)

' Can't Live in the Closet, Inc. (CLIC) - Metro Manila

' Cebu Pride - Cebu City

' Circle of Friends

' Dipolog Gay Association - Zamboanga del Norte

' Gay, Bisexual, & Transgender Youth Association (GABAY)

' Gay and Lesbian Activists Network for Gender Equality (GALANG) - Metro Manila

' Gay Men's Support Group (GMSG) - Metro Manila

' Gay United for Peace and Solidarity (GUPS) - Lanao del Norte

' Iloilo City Gay Association - Iloilo City

' Kabulig Writer's Group - Camarines Sur

' Lesbian Advocates Philippines, Inc. (LEAP)

' LUMINA - Baguio City

' Marikina Gay Association - Metro Manila

' Metropolitan Community Church (MCC) - Metro Manila

' Naga City Gay Association - Naga City

' ONE BACARDI

' Order of St. Aelred (OSAe) - Metro Manila

' PUP LAKAN

' RADAR PRIDEWEAR

' Rainbow Rights Project (R-Rights), Inc. - Metro Manila

' San Jose del Monte Gay Association - Bulacan

' Sining Kayumanggi Royal Family - Rizal

' Society of Transexual Women of the Philippines (STRAP) - Metro Manila

' Soul Jive - Antipolo, Rizal

' The Link - Davao City

' Tayabas Gay Association - Quezon

' Women's Bisexual Network - Metro Manila

' Zamboanga Gay Association - Zamboanga City23

Since the COMELEC only searched for the names ANG LADLAD LGBT or LADLAD LGBT,
it is no surprise that they found that petitioner had no presence in any of these regions.
In fact, if COMELEC's findings are to be believed, petitioner does not even exist in
Quezon City, which is registered as Ang Ladlad's principal place of business.

Against this backdrop, we find that Ang Ladlad has sufficiently demonstrated its

compliance with the legal requirements for accreditation. Indeed, aside from
COMELEC's moral objection and the belated allegation of non-existence, nowhere in the
records has the respondent ever found/ruled that Ang Ladlad is not qualified to register
as a party-list organization under any of the requisites under RA 7941 or the guidelines
in Ang Bagong Bayani. The difference, COMELEC claims, lies in Ang Ladlad's morality,
or lack thereof.

Religion as the Basis for Refusal to Accept Ang Ladlad's Petition for Registration

Our Constitution provides in Article III, Section 5 that "[n]o law shall be made
respecting an establishment of religion, or prohibiting the free exercise thereof." At
bottom, what our non-establishment clause calls for is "government neutrality in
religious matters."24  Clearly, "governmental reliance on religious justification is
c�fa

inconsistent with this policy of neutrality."25  We thus find that it was grave violation of
c�fa

the non-establishment clause for the COMELEC to utilize the Bible and the Koran to
justify the exclusion of Ang Ladlad.

Rather than relying on religious belief, the legitimacy of the Assailed Resolutions should
depend, instead, on whether the COMELEC is able to advance some justification for its
rulings beyond mere conformity to religious doctrine. Otherwise stated, government
must act for secular purposes and in ways that have primarily secular effects. As we
held in Estrada v. Escritor:26
cräläwvirtualibräry

x x x The morality referred to in the law is public and necessarily secular, not religious
as the dissent of Mr. Justice Carpio holds. "Religious teachings as expressed in public
debate may influence the civil public order but public moral disputes may be resolved
only on grounds articulable in secular terms." Otherwise, if government relies upon
religious beliefs in formulating public policies and morals, the resulting policies and
morals would require conformity to what some might regard as religious programs or
agenda. The non-believers would therefore be compelled to conform to a standard of
conduct buttressed by a religious belief, i.e., to a "compelled religion," anathema to
religious freedom. Likewise, if government based its actions upon religious beliefs, it
would tacitly approve or endorse that belief and thereby also tacitly disapprove contrary
religious or non-religious views that would not support the policy. As a result,
government will not provide full religious freedom for all its citizens, or even make it
appear that those whose beliefs are disapproved are second-class citizens.

In other words, government action, including its proscription of immorality as

expressed in criminal law like concubinage, must have a secular purpose. That is, the
government proscribes this conduct because it is "detrimental (or dangerous) to those
conditions upon which depend the existence and progress of human society" and not
because the conduct is proscribed by the beliefs of one religion or the other. Although
admittedly, moral judgments based on religion might have a compelling influence on
those engaged in public deliberations over what actions would be considered a moral
disapprobation punishable by law. After all, they might also be adherents of a religion
and thus have religious opinions and moral codes with a compelling influence on them;
the human mind endeavors to regulate the temporal and spiritual institutions of society
in a uniform manner, harmonizing earth with heaven. Succinctly put, a law could be
religious or Kantian or Aquinian or utilitarian in its deepest roots, but it must have an
articulable and discernible secular purpose and justification to pass scrutiny of the
religion clauses. x x x Recognizing the religious nature of the Filipinos and the elevating
influence of religion in society, however, the Philippine constitution's religion clauses
prescribe not a strict but a benevolent neutrality. Benevolent neutrality recognizes that
government must pursue its secular goals and interests but at the same time strive to
uphold religious liberty to the greatest extent possible within flexible constitutional
limits. Thus, although the morality contemplated by laws is secular, benevolent
neutrality could allow for accommodation of morality based on religion, provided it does
not offend compelling state interests.27 c�fa

Public Morals as a Ground to Deny Ang Ladlad's Petition for Registration

Respondent suggests that although the moral condemnation of homosexuality and

homosexual conduct may be religion-based, it has long been transplanted into generally
accepted public morals. The COMELEC argues:

Petitioner's accreditation was denied not necessarily because their group consists of
LGBTs but because of the danger it poses to the people especially the youth. Once it is
recognized by the government, a sector which believes that there is nothing wrong in
having sexual relations with individuals of the same gender is a bad example. It will
bring down the standard of morals we cherish in our civilized society. Any society
without a set of moral precepts is in danger of losing its own existence.28 cräläwvirtualibräry

We are not blind to the fact that, through the years, homosexual conduct, and perhaps
homosexuals themselves, have borne the brunt of societal disapproval. It is not difficult
to imagine the reasons behind this censure - religious beliefs, convictions about the
preservation of marriage, family, and procreation, even dislike or distrust of
homosexuals themselves and their perceived lifestyle. Nonetheless, we recall that the
Philippines has not seen fit to criminalize homosexual conduct. Evidently, therefore,
these "generally accepted public morals" have not been convincingly transplanted into
the realm of law.29 c�fa

The Assailed Resolutions have not identified any specific overt immoral act performed
by Ang Ladlad. Even the OSG agrees that "there should have been a finding by the
COMELEC that the group's members have committed or are committing immoral
acts."30  The OSG argues:
c�fa

x x x A person may be sexually attracted to a person of the same gender, of a different

gender, or more than one gender, but mere attraction does not translate to immoral
acts. There is a great divide between thought and action. Reduction ad absurdum. If
immoral thoughts could be penalized, COMELEC would have its hands full of
disqualification cases against both the "straights" and the gays." Certainly this is not
the intendment of the law.31 cräläwvirtualibräry

Respondent has failed to explain what societal ills are sought to be prevented, or why
special protection is required for the youth. Neither has the COMELEC condescended to
justify its position that petitioner's admission into the party-list system would be so
harmful as to irreparably damage the moral fabric of society. We, of course, do not
suggest that the state is wholly without authority to regulate matters concerning
morality, sexuality, and sexual relations, and we recognize that the government will
and should continue to restrict behavior considered detrimental to society. Nonetheless,
we cannot countenance advocates who, undoubtedly with the loftiest of intentions,
situate morality on one end of an argument or another, without bothering to go through
the rigors of legal reasoning and explanation. In this, the notion of morality is robbed of
all value. Clearly then, the bare invocation of morality will not remove an issue from our
scrutiny.

We also find the COMELEC's reference to purported violations of our penal and civil laws
flimsy, at best; disingenuous, at worst. Article 694 of the Civil Code defines a nuisance
as "any act, omission, establishment, condition of property, or anything else which
shocks, defies, or disregards decency or morality," the remedies for which are a
prosecution under the Revised Penal Code or any local ordinance, a civil action, or
abatement without judicial proceedings.32  A violation of Article 201 of the Revised Penal
c�fa

Code, on the other hand, requires proof beyond reasonable doubt to support a criminal
conviction. It hardly needs to be emphasized that mere allegation of violation of laws is
not proof, and a mere blanket invocation of public morals cannot replace the institution
of civil or criminal proceedings and a judicial determination of liability or culpability.

As such, we hold that moral disapproval, without more, is not a sufficient governmental
interest to justify exclusion of homosexuals from participation in the party-list system.
The denial of Ang Ladlad's registration on purely moral grounds amounts more to a
statement of dislike and disapproval of homosexuals, rather than a tool to further any
substantial public interest. Respondent's blanket justifications give rise to the inevitable
conclusion that the COMELEC targets homosexuals themselves as a class, not because
of any particular morally reprehensible act. It is this selective targeting that implicates
our equal protection clause.

Equal Protection

Despite the absolutism of Article III, Section 1 of our Constitution, which provides "nor
shall any person be denied equal protection of the laws," courts have never interpreted
the provision as an absolute prohibition on classification. "Equality," said Aristotle,
"consists in the same treatment of similar persons."33  The equal protection clause
c�fa

guarantees that no person or class of persons shall be deprived of the same protection
of laws which is enjoyed by other persons or other classes in the same place and in like
circumstances.34 c�fa

Recent jurisprudence has affirmed that if a law neither burdens a fundamental right nor
targets a suspect class, we will uphold the classification as long as it bears a rational
relationship to some legitimate government end.35  In Central Bank Employees
c�fa

Association, Inc. v. Banko Sentral ng Pilipinas,36  we declared that "[i]n our jurisdiction,
c�fa
the standard of analysis of equal protection challenges x x x have followed the 'rational
basis' test, coupled with a deferential attitude to legislative classifications and a
reluctance to invalidate a law unless there is a showing of a clear and unequivocal
breach of the Constitution."37c�fa

The COMELEC posits that the majority of the Philippine population considers
homosexual conduct as immoral and unacceptable, and this constitutes sufficient
reason to disqualify the petitioner. Unfortunately for the respondent, the Philippine
electorate has expressed no such belief. No law exists to criminalize homosexual
behavior or expressions or parties about homosexual behavior. Indeed, even if we were
to assume that public opinion is as the COMELEC describes it, the asserted state
interest here - that is, moral disapproval of an unpopular minority - is not a legitimate
state interest that is sufficient to satisfy rational basis review under the equal protection
clause. The COMELEC's differentiation, and its unsubstantiated claim that Ang
Ladlad cannot contribute to the formulation of legislation that would benefit the nation,
furthers no legitimate state interest other than disapproval of or dislike for a disfavored
group.

From the standpoint of the political process, the lesbian, gay, bisexual, and transgender
have the same interest in participating in the party-list system on the same basis as
other political parties similarly situated. State intrusion in this case is equally
burdensome. Hence, laws of general application should apply with equal force to LGBTs,
and they deserve to participate in the party-list system on the same basis as other
marginalized and under-represented sectors.

It bears stressing that our finding that COMELEC's act of differentiating LGBTs from
heterosexuals insofar as the party-list system is concerned does not imply that any
other law distinguishing between heterosexuals and homosexuals under different
circumstances would similarly fail. We disagree with the OSG's position that
homosexuals are a class in themselves for the purposes of the equal protection
clause.38  We are not prepared to single out homosexuals as a separate class meriting
c�fa

special or differentiated treatment. We have not received sufficient evidence to this

effect, and it is simply unnecessary to make such a ruling today. Petitioner itself has
merely demanded that it be recognized under the same basis as all other groups
similarly situated, and that the COMELEC made "an unwarranted and impermissible
classification not justified by the circumstances of the case."

Freedom of Expression and Association

Under our system of laws, every group has the right to promote its agenda and attempt
to persuade society of the validity of its position through normal democratic means.39  It
c�fa

is in the public square that deeply held convictions and differing opinions should be
distilled and deliberated upon. As we held in Estrada v. Escritor:40 c�fa

In a democracy, this common agreement on political and moral ideas is distilled in the
public square. Where citizens are free, every opinion, every prejudice, every aspiration,
and every moral discernment has access to the public square where people deliberate
the order of their life together. Citizens are the bearers of opinion, including opinion
shaped by, or espousing religious belief, and these citizens have equal access to the
public square. In this representative democracy, the state is prohibited from
determining which convictions and moral judgments may be proposed for public
deliberation. Through a constitutionally designed process, the people deliberate and
decide. Majority rule is a necessary principle in this democratic governance. Thus, when
public deliberation on moral judgments is finally crystallized into law, the laws will
largely reflect the beliefs and preferences of the majority, i.e., the mainstream or
median groups. Nevertheless, in the very act of adopting and accepting a constitution
and the limits it specifies - including protection of religious freedom "not only for a
minority, however small - not only for a majority, however large - but for each of us" -
the majority imposes upon itself a self-denying ordinance. It promises not to do what it
otherwise could do: to ride roughshod over the dissenting minorities.

Freedom of expression constitutes one of the essential foundations of a democratic

society, and this freedom applies not only to those that are favorably received but also
to those that offend, shock, or disturb. Any restriction imposed in this sphere must be
proportionate to the legitimate aim pursued. Absent any compelling state interest, it is
not for the COMELEC or this Court to impose its views on the populace. Otherwise
stated, the COMELEC is certainly not free to interfere with speech for no better reason
than promoting an approved message or discouraging a disfavored one.

This position gains even more force if one considers that homosexual conduct is not
illegal in this country. It follows that both expressions concerning one's homosexuality
and the activity of forming a political association that supports LGBT individuals are
protected as well.

Other jurisdictions have gone so far as to categorically rule that even overwhelming
public perception that homosexual conduct violates public morality does not justify
criminalizing same-sex conduct.41  European and United Nations judicial decisions have
c�fa

ruled in favor of gay rights claimants on both privacy and equality grounds, citing
general privacy and equal protection provisions in foreign and international texts.42  To
c�fa

the extent that there is much to learn from other jurisdictions that have reflected on
the issues we face here, such jurisprudence is certainly illuminating. These foreign
authorities, while not formally binding on Philippine courts, may nevertheless have
persuasive influence on the Court's analysis.

In the area of freedom of expression, for instance, United States courts have ruled that
existing free speech doctrines protect gay and lesbian rights to expressive conduct. In
order to justify the prohibition of a particular expression of opinion, public institutions
must show that their actions were caused by "something more than a mere desire to
avoid the discomfort and unpleasantness that always accompany an unpopular
viewpoint."43cräläwvirtualibräry

With respect to freedom of association for the advancement of ideas and beliefs, in
Europe, with its vibrant human rights tradition, the European Court of Human Rights
(ECHR) has repeatedly stated that a political party may campaign for a change in the
law or the constitutional structures of a state if it uses legal and democratic means and
the changes it proposes are consistent with democratic principles. The ECHR has
emphasized that political ideas that challenge the existing order and whose realization
is advocated by peaceful means must be afforded a proper opportunity of expression
through the exercise of the right of association, even if such ideas may seem shocking
or unacceptable to the authorities or the majority of the population.44  A political group
c�fa
should not be hindered solely because it seeks to publicly debate controversial political
issues in order to find solutions capable of satisfying everyone concerned.45  Only if a
c�fa

political party incites violence or puts forward policies that are incompatible with
democracy does it fall outside the protection of the freedom of association guarantee.46 c�fa

We do not doubt that a number of our citizens may believe that homosexual conduct is
distasteful, offensive, or even defiant. They are entitled to hold and express that view.
On the other hand, LGBTs and their supporters, in all likelihood, believe with equal
fervor that relationships between individuals of the same sex are morally equivalent to
heterosexual relationships. They, too, are entitled to hold and express that view.
However, as far as this Court is concerned, our democracy precludes using the religious
or moral views of one part of the community to exclude from consideration the values
of other members of the community.

Of course, none of this suggests the impending arrival of a golden age for gay rights
litigants. It well may be that this Decision will only serve to highlight the discrepancy
between the rigid constitutional analysis of this Court and the more complex moral
sentiments of Filipinos. We do not suggest that public opinion, even at its most liberal,
reflect a clear-cut strong consensus favorable to gay rights claims and we neither
attempt nor expect to affect individual perceptions of homosexuality through this
Decision.

The OSG argues that since there has been neither prior restraint nor subsequent
punishment imposed on Ang Ladlad, and its members have not been deprived of their
right to voluntarily associate, then there has been no restriction on their freedom of
expression or association. The OSG argues that:

There was no utterance restricted, no publication censored, or any assembly denied.

[COMELEC] simply exercised its authority to review and verify the qualifications of
petitioner as a sectoral party applying to participate in the party-list system. This lawful
exercise of duty cannot be said to be a transgression of Section 4, Article III of the
Constitution.

xxx

A denial of the petition for registration x x x does not deprive the members of the
petitioner to freely take part in the conduct of elections. Their right to vote will not be
hampered by said denial. In fact, the right to vote is a constitutionally-guaranteed right
which cannot be limited.

As to its right to be elected in a genuine periodic election, petitioner contends that the
denial of Ang Ladlad's petition has the clear and immediate effect of limiting, if not
outrightly nullifying the capacity of its members to fully and equally participate in public
life through engagement in the party list elections.

This argument is puerile. The holding of a public office is not a right but a privilege
subject to limitations imposed by law. x x x47 cräläwvirtualibräry
The OSG fails to recall that petitioner has, in fact, established its qualifications to
participate in the party-list system, and - as advanced by the OSG itself - the moral
objection offered by the COMELEC was not a limitation imposed by law. To the extent,
therefore, that the petitioner has been precluded, because of COMELEC's action, from
publicly expressing its views as a political party and participating on an equal basis in
the political process with other equally-qualified party-list candidates, we find that there
has, indeed, been a transgression of petitioner's fundamental rights.

Non-Discrimination and International Law

In an age that has seen international law evolve geometrically in scope and promise,
international human rights law, in particular, has grown dynamically in its attempt to
bring about a more just and humane world order. For individuals and groups struggling
with inadequate structural and governmental support, international human rights norms
are particularly significant, and should be effectively enforced in domestic legal systems
so that such norms may become actual, rather than ideal, standards of conduct.

Our Decision today is fully in accord with our international obligations to protect and
promote human rights. In particular, we explicitly recognize the principle of non-
discrimination as it relates to the right to electoral participation, enunciated in the
UDHR and the ICCPR.

The principle of non-discrimination is laid out in Article 26 of the ICCPR, as follows:

Article 26

All persons are equal before the law and are entitled without any discrimination to the
equal protection of the law. In this respect, the law shall prohibit any discrimination and
guarantee to all persons equal and effective protection against discrimination on any
ground such as race, colour, sex, language, religion, political or other opinion, national
or social origin, property, birth or other status.

In this context, the principle of non-discrimination requires that laws of general

application relating to elections be applied equally to all persons, regardless of sexual
orientation. Although sexual orientation is not specifically enumerated as a status or
ratio for discrimination in Article 26 of the ICCPR, the ICCPR Human Rights Committee
has opined that the reference to "sex" in Article 26 should be construed to include
"sexual orientation."48  Additionally, a variety of United Nations bodies have declared
c�fa

discrimination on the basis of sexual orientation to be prohibited under various

international agreements.49 cräläwvirtualibräry

The UDHR provides:

Article 21.

(1) Everyone has the right to take part in the government of his country, directly or
through freely chosen representatives.

Likewise, the ICCPR states:

 Article 25

Every citizen shall have the right and the opportunity, without any of the distinctions
mentioned in article 2 and without unreasonable restrictions:

(a) To take part in the conduct of public affairs, directly or through freely chosen
representatives;

(b) To vote and to be elected at genuine periodic elections which shall be by universal
and equal suffrage and shall be held by secret ballot, guaranteeing the free expression
of the will of the electors;

(c) To have access, on general terms of equality, to public service in his country.

As stated by the CHR in its Comment-in-Intervention, the scope of the right to electoral
participation is elaborated by the Human Rights Committee in its General Comment No.
25 (Participation in Public Affairs and the Right to Vote) as follows:

1. Article 25 of the Covenant recognizes and protects the right of every citizen to take
part in the conduct of public affairs, the right to vote and to be elected and the right to
have access to public service. Whatever form of constitution or government is in force,
the Covenant requires States to adopt such legislative and other measures as may be
necessary to ensure that citizens have an effective opportunity to enjoy the rights it
protects. Article 25 lies at the core of democratic government based on the consent of
the people and in conformity with the principles of the Covenant.

xxx

15. The effective implementation of the right and the opportunity to stand for elective
office ensures that persons entitled to vote have a free choice of candidates. Any
restrictions on the right to stand for election, such as minimum age, must be justifiable
on objective and reasonable criteria. Persons who are otherwise eligible to stand for
election should not be excluded by unreasonable or discriminatory requirements such
as education, residence or descent, or by reason of political affiliation. No person should
suffer discrimination or disadvantage of any kind because of that person's candidacy.
States parties should indicate and explain the legislative provisions which exclude any
group or category of persons from elective office.50 cräläwvirtualibräry

We stress, however, that although this Court stands willing to assume the responsibility
of giving effect to the Philippines' international law obligations, the blanket invocation of
international law is not the panacea for all social ills. We refer now to the petitioner's
invocation of the Yogyakarta Principles (the Application of International Human Rights
Law In Relation to Sexual Orientation and Gender Identity),51  which petitioner declares
c�fa

to reflect binding principles of international law.

At this time, we are not prepared to declare that these Yogyakarta Principles contain

norms that are obligatory on the Philippines. There are declarations and obligations
outlined in said Principles which are not reflective of the current state of international
law, and do not find basis in any of the sources of international law enumerated under
Article 38(1) of the Statute of the International Court of Justice.52  Petitioner has not
c�fa

undertaken any objective and rigorous analysis of these alleged principles of

international law to ascertain their true status.

We also hasten to add that not everything that society - or a certain segment of society
- wants or demands is automatically a human right. This is not an arbitrary human
intervention that may be added to or subtracted from at will. It is unfortunate that
much of what passes for human rights today is a much broader context of needs that
identifies many social desires as rights in order to further claims that international law
obliges states to sanction these innovations. This has the effect of diluting real human
rights, and is a result of the notion that if "wants" are couched in "rights" language,
then they are no longer controversial.

Using even the most liberal of lenses, these Yogyakarta Principles, consisting of a

declaration formulated by various international law professors, are - at best - de lege
ferenda - and do not constitute binding obligations on the Philippines. Indeed, so much
of contemporary international law is characterized by the "soft law" nomenclature, i.e.,
international law is full of principles that promote international cooperation, harmony,
and respect for human rights, most of which amount to no more than well-meaning
desires, without the support of either State practice or opinio juris.53 c�fa

As a final note, we cannot help but observe that the social issues presented by this case
are emotionally charged, societal attitudes are in flux, even the psychiatric and religious
communities are divided in opinion. This Court's role is not to impose its own view of
acceptable behavior. Rather, it is to apply the Constitution and laws as best as it can,
uninfluenced by public opinion, and confident in the knowledge that our democracy is
resilient enough to withstand vigorous debate.

WHEREFORE, the Petition is hereby GRANTED. The Resolutions of the Commission on

Elections dated November 11, 2009 and December 16, 2009 in SPP No. 09-228 (PL) are
hereby SET ASIDE. The Commission on Elections is directed to GRANT petitioner's
application for party-list accreditation.
 G.R. No. L-52265 January 28, 1980

SAMUEL C. OCCEÑA, Petitioner, vs. COMMISSION ON ELECTIONS, COMMISSION

ON AUDIT, NATIONAL TREASURER, and DIRECTOR OF PRINTING, Respondents.

Occeña Law Office for petitioner. chanrobles virtual law library

Office of the Solicitor General for respondents.

ANTONIO, J.:

Petition for prohibition seeking to restrain respondents from implementing Batas

Pambansa Big. 51 (providing for the elective and/or appointive positions in various local
governments), 52 (governing the election of local government officials scheduled on
January 30, 1980), 53 (defining the rights and privileges of accredited parties), and 54
(providing for a plebiscite, simultaneously with the election of local officials on January
30, 1980, regarding the proposed amendment of Article X, Section 7, of the 1973
Constitution). The constitutional issues raised are: (1) whether or not the Interim
Batasang Pambansa has the power to authorize the holding of local elections; (2)
assuming it has such power, whether it can authorize said elections without enacting a
local government code; (3) as g it may validly perform the foregoing, whether it can
schedule such elections less than ninety, (90) days from the passage of the enabling
law; and; (4), assuming further that the proposed amendment to Article X, Section 7 of
the Constitution is valid, whether the plebiscite con be legally held together with the
local elections. The thrust of Petitioner's arguments is that these issues should be
resolved in the negative.  
chanroblesvirtualawlibrary chanrobles virtual law library

After deliberating on the memoranda and arguments adduced by both parties at the
hearing as January 15, 1980, the Court finds no merit in the petition.   chanroblesvirtualawlibrary chanrobles virtual law library

1. The leguslative power granted by Section 1, Artcle VIII of the Constitution to the
National Assembly has been explicitly vested during the period of transition on the
Interim Batasang Pambansa by Amendment No. 2 to the constitution. The only station
is that it shall not exercise its treaty ratification powers provided in Article VIII, Section
14(1) of the Constitution. The legislative power has described generally as being a
power to make, alter and laws. 1It is the peculiar province of the legislature to probe
general rules for the government of society. The e of the legislative function is the
determination of the legislative policy and its formulation and promulgation as a defined
and binding rule of conduct. 2It is a recognized principle in constitutional law that the
legislative body possesses Plenary power for all purposes of civil government The
1egislative power of the Interim Batasang Pambansa is, therefore, Complete, subject
only to the limitation that the interim Batasang Pambansa shall not exercise the power
of the National Assembly in the ratification of treaties. 3 The power to regulate the
manner of conducting elections, to Prescribe the form of the official ballot, and to
provide for the Manner in which candidates shall be chosen is inherently and historically
legislative. Petitioner has. not cited any provision of the Constitution, as amended by
the Amendments of 1976, which expressly or by implication deny to the Interim
Batasang Pambansa the authority to call for local elections. It is a well established rule
that where no exception is made in terms, none will be made by mere implication or
construction. The wordings of a constitutional provision do not have a narrow or
contracted meaning, but are used in a broad sense, with a view of covering all
contingencies. Petitioner's invocation of the Report of the Committee on Transitory
Provisions of October 13, 1972 does not. support his contention that the Interim
Batasang Pambansa has no power to call local elections. The purported report refers to
the interim National Assembly in Article XVII, the convening of which was rejected by
the Filipino people. As We stated in Peralta v. Commission on Elections: 4  chanrobles virtual law library

It should be recalled that under the terms of the Transitory Provisions of the
Constitution, the membership of the interim National Assembly would consist of the
Incumbent President and Vice-President, the Senators and the Representatives of the
old Congress and the Delegates to the Constitutional Convention who have opted to
serve therein. The Filipino people rejected the convening of the interim National
Assembly, and for a perfectly justifiable reason.   chanroblesvirtualawlibrary chanrobles virtual law library

By September of 1976, the consensus had emerged for a referendum partaking of the
character of a plebiscite which would be held to establish the solid foundation for the
next step towards normalizing the political process. By the will of the people, as
expressed overwhelmingly in the plebiscite of October 15 and 16, 1976, Amendments
Nos. 1 to 9 were approved, abolishing the interim National Assembly and creating in its
stead an interim Batasang Pambansa. This was intended as a preparatory and
experimental step toward the establishment of full parliamentary government as
provided for in the Constitution. (at p. 61).

In the search for the meaning of the language of the Constitution, reference may be
made to the historical basis of the provisions. The historical events and circumstances
which led to the ratification of Amendments Nos. I to 9 of the constitution show the
manifest intent and desire of the people to establish, during the period of transition, a
government that can effectively provide for the nation's peaceful and orderly transition
from a crisis to a full parliament system of government.   chanroblesvirtualawlibrary chanrobles virtual law library

2. Neither can We find in Section 1, Article XI of the Constitution any requirement that
the enactment of a local government code is a condition sine qua non for the calling of
the local elections by the Interim Batasang Pambansa. Indeed, the holding of local
elections does not, in any manner, preclude the enactment of a local government code
by the Batasang Pambansa at some later period. There cannot be any doubt that our
local governments are basic and fundamental units in our democratic institutions, To
strengthen these institutions, the election of local officials should be periodically
held. 5 Accordingly, this Court is not inclined to adopt such a technical or strained
construction as will unduly impair the efficiency of the Interim Batasang Pambansa in
meeting the challenges and discharging its responsibilities in response to the problems
arising in a modernizing and dynamic society. The legislative decision to call for local
elections in order to enable the Filipino people to exercise their sovereign right to
choose their local officials cannot, therefore, be faulted as a violation of the
Constitution.  
chanroblesvirtualawlibrary chanrobles virtual law library

3. Section 6 of Article XII of the Constitution does not fix an unalterable period of
ninety (90) days for an election campaign. This provision must be construed in relation
to Section 5 of Article XII thereof which grants to the Commission on Elections the
power to supervise or regulate the operation of transportation public utilities, media of
communication, etc. during the "election period". Section 6 fixes the "election
period" by stating that unless fixed by the Commission in special cases, the election
period shall commence ninety (90) days before the day of election and shall end thirty
(30) days thereafter. In Peralta v. Commission on Elections, supra, We resolved, in
effect, this issue by holding that the forty-five day period of campaign prescribed in
Section 4 of the 1978 Election Code was not violative of Section 6 of Article XII of the
Constitution.  
chanroblesvirtualawlibrary chanrobles virtual law library

4. Considering that the proposed amendment to Section 7 of Article X of the

Constitution extending the retirement of members of the Supreme Court and judges of
inferior courts from sixty-five (65) to seventy (70) years is but a restoration of the age
of retirement provided in the 1935 Constitution and has been intensively and
extensively discussed at the Interim Batasang Pambansa, as well as through the mass
media, it cannot, therefore, be said that our people are unaware of the advantages and
disadvantages of the proposed amendment.   chanroblesvirtualawlibrary chanrobles virtual law library

ACCORDINGLY, the petition is DISMISSED. This decision is immediately executory.

library
chanroblesvirtualawlibrary   chanrobles virtual law

SO ORDERED.
 G.R. No. 146807 - May 9, 2002

PADCOM CONDOMINIUM CORPORATION, Petitioner, vs. ORTIGAS CENTER

ASSOCIATION, INC., Respondent.

DAVIDE, JR., C.J.:

Challenged in this case is the 30 June 2000 decision1 of the Court of Appeals in CA-G.R.
CV No. 60099, reversing and setting aside the 1 September 1997 decision2 of the
Regional Trial Court of Pasig City, Branch 264, in Civil Case No. 63801.3

Petitioner Padcom Condominium Corporation (hereafter PADCOM) owns and manages

the Padilla Office Condominium Building (PADCOM Building) located at Emerald Avenue,
Ortigas Center, Pasig City. The land on which the building stands was originally
acquired from the Ortigas & Company, Limited Partnership (OCLP), by Tierra
Development Corporation (TDC) under a Deed of Sale dated 4 September 1974. Among
the terms and conditions in the deed of sale was the requirement that the transferee
and its successor-in-interest must become members of an association for realty owners
and long-term lessees in the area later known as the Ortigas Center. Subsequently, the
said lot, together with improvements thereon, was conveyed by TDC in favor of
PADCOM in a Deed of Transfer dated 25 February 1975.4

In 1982, respondent Ortigas Center Association, Inc. (hereafter the Association) was
organized to advance the interests and promote the general welfare of the real estate
owners and long-term lessees of lots in the Ortigas Center. It sought the collection of
membership dues in the amount of two thousand seven hundred twenty-four pesos and
forty centavos (P2,724.40) per month from PADCOM. The corporate books showed that
PADCOM owed the Association P639,961.47, representing membership dues, interests
and penalty charges from April 1983 to June 1993.5 The letters exchanged between the
parties through the years showed repeated demands for payment, requests for
extensions of payment, and even a settlement scheme proposed by PADCOM in
September 1990.

In view of PADCOM's failure and refusal to pay its arrears in monthly dues, including
interests and penalties thereon, the Association filed a complaint for collection of sum of
money before the trial court below, which was docketed as Civil Case No. 63801. The
Association averred that purchasers of lands within the Ortigas Center complex from
OCLP are obligated under their contracts of sale to become members of the Association.
This obligation was allegedly passed on to PADCOM when it bought the lot from TDC, its
predecessor-in-interest.6

In its answer, PADCOM contended that it is a non-stock, non-profit association, and for
it to become a special member of the Association, it should first apply for and be
accepted for membership by the latter's Board of Directors. No automatic membership
was apparently contemplated in the Association's By-laws. PADCOM added that it could
not be compelled to become a member without violating its right to freedom of
association. And since it was not a member of the Association, it was not liable for
membership dues, interests and penalties.7
During the trial, the Association presented its accountant as lone witness to prove that
PADCOM was, indeed, one of its members and, as such, did not pay its membership
dues.

PADCOM, on the other hand, did not present its evidence; instead it filed a motion to
dismiss by way of demurrer to evidence. It alleged that the facts established by the
Association showed no right to the relief prayed for. It claimed that the provisions of
the Association's By-laws and the Deed of Transfer did not contemplate automatic
membership. Rather, the owner or long-term lessee becomes a member of the
Association only after applying with and being accepted by its Board of Directors.
Assuming further that PADCOM was a member of the Association, the latter failed to
show that the collection of monthly dues was a valid corporate act duly authorized by a
proper resolution of the Association's Board of Directors.8

After due consideration of the issues raised in the motion to dismiss, the trial court
rendered a decision dismissing the complaint.9

The Association appealed the case to the Court of Appeals, which docketed the appeal
as CA-G.R. CV No. 60099. In its decision10 of 30 June 2000, the Court of Appeals
reversed and set aside the trial court's dismissal of Civil Case No. 63801, and decreed
as follows:

WHEREFORE, the appealed decision dated September 1, 1997

is REVERSED and SET ASIDE and, in lieu thereof, a new one is entered ordering the
appellee (PADCOM) to pay the appellant (the Association) the following:

1) P639,961.47 as and for membership dues in arrears inclusive of earned interests and
penalties; and

2) P25,000.00 as and for attorney's fees.

Costs against the appellees.

SO ORDERED.

The Court of Appeals justified its ruling by declaring that PADCOM automatically
became a member of the Association when the land was sold to TDC. The intent to pass
the obligation to prospective transferees was evident from the annotation of the same
clause at the back of the Transfer Certificate of Title covering the lot. Despite disavowal
of membership, PADCOM's membership in the Association was evident from these
facts: (1) PADCOM was included in the Association's list of bona fide members as of 30
March 1995; (2) Narciso Padilla, PADCOM's President, was one of the Association's
incorporators; and (3) having received the demands for payment, PADCOM not only
acknowledged them, but asked for and was granted repeated extensions, and even
proposed a scheme for the settlement of its obligation. The Court of Appeals also ruled
that PADCOM cannot evade payment of its obligation to the Association without
violating equitable principles underlying quasi-contracts. Being covered by the
Association's avowed purpose to promote the interests and welfare of its members,
PADCOM cannot be allowed to expediently deny and avoid the obligation arising from
such membership.

Dissatisfied with the adverse judgment of the Court of Appeals, PADCOM filed the
petition for review in this case. It raises the sole issue of whether it can be compelled to
join the association pursuant to the provision on automatic membership appearing as a
condition in the Deed of Sale of 04 September 1974 and the annotation thereof on
Transfer Certificate of Title No. 457308.

PADCOM contends that it cannot be compelled to be a member of the Association solely

by virtue of the "automatic membership" clause that appears on the title of the
property and the Deed of Transfer. In 1975, when it bought the land, the Association
was still inexistent. Therefore, the provision on automatic membership was anticipatory
in nature, subject to the actual formation of the Association and the subsequent
formulation of its implementing rules.

PADCOM likewise maintains that the Association's By-laws requires an application for
membership. Since it never sought membership, the Court of Appeals erred in
concluding that it was a member of the Association by implication. Aside from the lack
of evidence proving such membership, the Association has no basis to collect monthly
dues since there is no board resolution defining and prescribing how much should be
paid.

For its part, the Association claims that the Deed of Sale between OCLP and TDC clearly
stipulates automatic membership for the owners of lots in the Ortigas Center, including
their successors-in-interest. The filing of applications and acceptance thereof by the
Board of Directors of the Association are, therefore, mere formalities that can be
dispensed with or waived. The provisions of the Association's By-laws cannot in any
manner alter or modify the automatic membership clause imposed on a property owner
by virtue of an annotation of encumbrance on his title.

The Association likewise asserts that membership therein requires the payment of
certain amounts for its operations and activities, as may be authorized by its Board of
Directors. The membership dues are for the common expenses of the homeowners for
necessary services.

After a careful examination of the records of this case, the Court sees no reason to
disturb the assailed decision. The petition should be denied.

Section 44 of Presidential Decree No. 152911 mandates that:

SEC. 44. Statutory liens affecting title. - Every registered owner receiving a certificate
of title in pursuance of a decree of registration, and every subsequent purchaser of
registered land taking a certificate of title for value and in good faith, shall hold the
same free from all encumbrances except those noted on said certificate and any of the
following encumbrances which may be subsisting, namely: xxx
Under the Torrens system of registration, claims and liens of whatever character,
except those mentioned by law, existing against the land binds the holder of the title
and the whole world.12

It is undisputed that when the land in question was bought by PADCOM's predecessor-
in-interest, TDC, from OCLP, the sale bound TDC to comply with paragraph (G) of the
covenants, conditions and restrictions of the Deed of Sale, which reads as follows:13

G. AUTOMATIC MEMBERSHIP WITH THE ASSOCIATION:

The owner of this lot, its successor-in-interest hereby binds himself to become a
member of the ASSOCIATION which will be formed by and among purchasers, fully paid
up Lot BUYERS, Building Owners and the COMPANY in respect to COMPANY OWNED
LOTS.

The OWNER of this lot shall abide by such rules and regulations that shall be laid down
by the ASSOCIATION in the interest of security, maintenance, beautification and
general welfare of the OFFICE BUILDING zone. The ASSOCIATION when organized shall
also, among others, provide for and collect assessments which shall constitute a lien on
the property, junior only to liens of the Government for taxes.

Evidently, it was agreed by the parties that dues shall be collected from an automatic
member and such fees or assessments shall be a lien on the property.

This stipulation was likewise annotated at the back of Transfer Certificate of Title No.
457308 issued to TDC.14 And when the latter sold the lot to PADCOM on 25 February
1975, the Deed of Transfer expressly stated:15

NOW, THEREFORE, for and in consideration of the foregoing premises, the DEVELOPER,
by these presents, cedes, transfers and conveys unto the CORPORATION the above-
described parcel of land evidenced by Transfer Certificate of Title No. 457308, as well
as the Common and Limited Common Areas of the Condominium project mentioned and
described in the Master Deed with Declaration of Restrictions (Annex "A" hereof), free
from all liens and encumbrances, except those already annotated at the back of said
Transfer Certificate of Title No. 457308, xxx

This is so because any lien annotated on previous certificates of title should be

incorporated in or carried over to the new transfer certificates of title. Such lien is
inseparable from the property as it is a right in rem, a burden on the property whoever
its owner may be. It subsists notwithstanding a change in ownership; in short, the
personality of the owner is disregarded.16 As emphasized earlier, the provision on
automatic membership was annotated in the Certificate of Title and made a condition in
the Deed of Transfer in favor of PADCOM. Consequently, it is bound by and must
comply with the covenant.

Moreover, Article 1311 of the Civil Code provides that contracts take effect between the
parties, their assigns and heirs. Since PADCOM is the successor-in-interest of TDC, it
follows that the stipulation on automatic membership with the Association is also
binding on the former.
We are not persuaded by PADCOM's contention that the By-laws of the Association
requires application for membership and acceptance thereof by the Board of Directors.
Section 2 of the By-laws17 reads:

Section 2. Regular Members. - Upon acceptance by the Board of Directors of Ortigas

Center Association, Inc., all real estate owners, or long-term lessees of lots within the
boundaries of the Association as defined in the Articles of Incorporation become regular
members, provided, however that the long-term lessees of a lot or lots in said area
shall be considered as the regular members in lieu of the owners of the same. Likewise,
regular membership in the Association automatically ceases upon the cessation of a
member to be an owner or long-term lessee of real estate in the area.

A lessee shall be considered a long-term lessee if his lease is in writing and for a period
of two (2) years or more. Membership of a long-term lessee in the Association shall be
co-terminus with his legal possession (or his lease) of the lot/s in the area. Upon the
lessee's cessation of membership in the Association, the owner shall automatically
succeed the lessee as member thereat.

As lot owner, PADCOM is a regular member of the Association. No application for

membership is necessary. If at all, acceptance by the Board of Directors is a ministerial
function considering that PADCOM is deemed to be a regular member upon the
acquisition of the lot pursuant to the automatic membership clause annotated in the
Certificate of Title of the property and the Deed of Transfer.

Neither are we convinced by PADCOM's contention that the automatic membership

clause is a violation of its freedom of association. PADCOM was never forced to join the
association. It could have avoided such membership by not buying the land from TDC.
Nobody forced it to buy the land when it bought the building with the annotation of the
condition or lien on the Certificate of Title thereof and accepted the Deed. PADCOM
voluntarily agreed to be bound by and respect the condition, and thus to join the
Association.

In addition, under the principle of estoppel, PADCOM is barred from disclaiming

membership in the Association. In estoppel, a person, who by his act or conduct has
induced another to act in a particular manner, is barred from adopting an inconsistent
position, attitude or course of conduct that thereby causes loss or injury to another.18

We agree with the Court of Appeals' conclusion from the facts or circumstances it
enumerated in its decision and enumerated above that PADCOM is, indeed, a regular
member of the Association. These facts and circumstances are sufficient grounds to
apply the doctrine of estoppel against PADCOM.

Having ruled that PADCOM is a member of the Association, it is obligated to pay its
dues incidental thereto. Article 1159 of the Civil Code mandates:

Art. 1159. Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith.
Assuming in gratis argumenti that PADCOM is not a member of the Association, it
cannot evade payment without violating the equitable principles underlying quasi-
contracts. Article 2142 of the Civil Code provides:

Art. 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical relation
of quasi-contract to the end that no one shall be unjustly enriched or benefited at the
expense of another.

Generally, it may be said that a quasi-contract is based on the presumed will or intent
of the obligor dictated by equity and by the principles of absolute justice. Examples of
these principles are: (1) it is presumed that a person agrees to that which will benefit
him; (2) nobody wants to enrich himself unjustly at the expense of another; or (3) one
must do unto others what he would want others to do unto him under the same
circumstances.19

As resident and lot owner in the Ortigas area, PADCOM was definitely benefited by the
Association's acts and activities to promote the interests and welfare of those who
acquire property therein or benefit from the acts or activities of the Association.

Finally, PADCOM's argument that the collection of monthly dues has no basis since
there was no board resolution defining how much fees are to be imposed deserves
scant consideration. Suffice it is to say that PADCOM never protested upon receipt of
the earlier demands for payment of membership dues. In fact, by proposing a scheme
to pay its obligation, PADCOM cannot belatedly question the Association's authority to
assess and collect the fees in accordance with the total land area owned or occupied by
the members, which finds support in a resolution dated 6 November 1982 of the
Association's incorporating directors20 and Section 2 of its By-laws.21

WHEREFORE, the petition is hereby DENIED for lack of merit.

G.R. No. 171101               April 24, 2012

HACIENDA LUISITA, INCORPORATED, Petitioner,

LUISITA INDUSTRIAL PARK CORPORATION and RIZAL COMMERCIAL BANKING
CORPORATION, Petitioners-in-Intervention,
vs.
PRESIDENTIAL AGRARIAN REFORM COUNCIL; SECRETARY NASSER PANGANDAMAN OF
THE DEPARTMENT OF AGRARIAN REFORM; ALYANSA NG MGA MANGGAGAWANG BUKID
NG HACIENDA LUISITA, RENE GALANG, NOEL MALLARI, and JULIO SUNIGA and his 1 

SUPERVISORY GROUP OF THE HACIENDA LUISITA, INC. and WINDSOR

ANDAYA, Respondents.

RESOLUTION

VELASCO, JR., J.:

Before the Court are the Motion to Clarify and Reconsider Resolution of November 22, 2011 dated
December 16, 2011 filed by petitioner Hacienda Luisita, Inc. (HLI) and the Motion for
Reconsideration/Clarification dated December 9, 2011 filed by private respondents Noel Mallari,
Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. and Windsor Andaya (collectively referred
to as "Mallari, et al.").

In Our July 5, 2011 Decision in the above-captioned case, this Court denied the petition for review
2 

filed by HLI and affirmed the assailed Presidential Agrarian Reform Council (PARC) Resolution No.
2005-32-01 dated December 22, 2005 and PARC Resolution No. 2006-34-01 dated May 3, 2006
with the modification that the original 6,296 qualified farmworker-beneficiaries of Hacienda Luisita
(FWBs) shall have the option to remain as stockholders of HLI.

Upon separate motions of the parties for reconsideration, the Court, by Resolution of November 22,
3 

2011, recalled and set aside the option thus granted to the original FWBs to remain as stockholders
of HLI, while maintaining that all the benefits and homelots received by all the FWBs shall be
respected with no obligation to refund or return them.

HLI invokes the following grounds in support of its instant Motion to Clarify and Reconsider
Resolution of November 22, 2011 dated December 16, 2011:

WITH DUE RESPECT, THE HONORABLE COURT ERRED IN RULING THAT IN DETERMINING
THE JUST COMPENSATION, THE DATE OF "TAKING" IS NOVEMBER 21, 1989, WHEN PARC
APPROVED HLI’s SDP [STOCK DISPTRIBUTION PLAN] "IN VIEW OF THE FACT THAT THIS IS
THE TIME THAT THE FWBs WERE CONSIDERED TO OWN AND POSSESS THE
AGRICULTURAL LANDS IN HACIENDA LUISITA" BECAUSE:

(1) THE SDP IS PRECISELY A MODALITY WHICH THE AGRARIAN LAW GIVES
THE LANDOWNER AS ALTERNATIVE TO COMPULSORY COVERAGE IN WHICH
CASE, THEREFORE, THE FWBs CANNOT BE CONSIDERED AS OWNERS AND
POSSESSORS OF THE AGRICULTURAL LANDS AT THE TIME THE SDP WAS
APPROVED BY PARC;
 (2) THE APPROVAL OF THE SDP CANNOT BE AKIN TO A NOTICE OF
COVERAGE IN COMPULSORY COVERAGE OR ACQUISITION BECAUSE SDP
AND COMPULSORY COVERAGE ARE TWO DIFFERENT MODALITIES WITH
INDEPENDENT AND SEPARATE RULES AND MECHANISMS;

(3) THE NOTICE OF COVERAGE OF JANUARY 02, 2006 MAY, AT THE VERY
LEAST, BE CONSIDERED AS THE TIME WHEN THE FWBs CAN BE
CONSIDERED TO OWN AND POSSESS THE AGRICULTURAL LANDS OF
HACIENDA LUISITA BECAUSE THAT IS THE ONLY TIME WHEN HACIENDA
LUISITA WAS PLACED UNDER COMPULSORY ACQUISITION IN VIEW OF
FAILURE OF HLI TO PERFORM CERTAIN OBLIGATIONS OF THE SDP, OR
SDOA [STOCK DISTRIBUTION OPTION AGREEMENT];

(4) INDEED, THE IMMUTABLE RULE AND THE UNBENDING JURISPRUDENCE

IS THAT "TAKING" TAKES PLACE WHEN THE OWNER IS ACTUALLY DEPRIVED
OR DISPOSSESSED OF HIS PROPERTY;

(5) TO INSIST THAT THE "TAKING" IS WHEN THE SDP WAS APPROVED BY
PARC ON NOVEMBER 21, 1989 AND THAT THE SAME BE CONSIDERED AS
THE RECKONING PERIOD TO DETERMINE THE JUST COMPENSATION IS
DEPRIVATION OF LANDOWNER’S PROPERTY WITHOUT DUE PROCESS OF
LAW;

(6) HLI SHOULD BE ENTITLED TO PAYMENT OF INTEREST ON THE JUST

COMPENSATION.

WITH DUE RESPECT, THE HONORABLE COURT ERRED WHEN IT REVERSED ITS DECISION
GIVING THE FWBs THE OPTION TO REMAIN AS HLI STOCKHOLDERS OR NOT, BECAUSE:

(1) IT IS AN EXERCISE OF A RIGHT OF THE FWB WHICH THE HONORABLE

COURT HAS DECLARED IN ITS DECISION AND EVEN IN ITS RESOLUTION AND
THAT HAS TO BE RESPECTED AND IMPLEMENTED;

(2) NEITHER THE CONSTITUTION NOR THE CARL [COMPREHENSIVE

AGRARIAN REFORM LAW] REQUIRES THAT THE FWBs SHOULD HAVE
CONTROL OVER THE AGRICULTURAL LANDS;

(3) THE OPTION HAS NOT BEEN SHOWN TO BE DETRIMENTAL BUT INSTEAD
BENEFICIAL TO THE FWBs AS FOUND BY THE HONORABLE COURT.

WITH DUE RESPECT, THE HONORABLE COURT ERRED IN RULING THAT THE PROCEEDS
FROM THE SALES OF THE 500-HECTARE CONVERTED LOT AND THE 80.51-HECTARE
SCTEX CANNOT BE RETAINED BY HLI BUT RETURNED TO THE FWBs AS BY SUCH MANNER;
HLI IS USING THE CORPORATION CODE TO AVOID ITS LIABILITY TO THE FWBs FOR THE
PRICE IT RECEIVED FROM THE SALES, BECAUSE:
 (1) THE PROCEEDS OF THE SALES BELONG TO THE CORPORATION AND
NOT TO EITHER HLI/TADECO OR THE FWBs, BOTH OF WHICH ARE
STOCKHOLDERS ENTITLED TO THE EARNINGS OF THE CORPORATION AND
TO THE NET ASSETS UPON LIQUIDATION;

(2) TO ALLOW THE RETURN OF THE PROCEEDS OF THE SALES TO FWBs IS

TO IMPOSE ALL LIABILITIES OF THE CORPORATION ON HLI/TADECO WHICH
IS UNFAIR AND VIOLATIVE OF THE CORPORATION CODE.

Mallari, et al. similarly put forth the following issues in its Motion for Reconsideration/Clarification
dated December 9, 2011:

REPUBLIC ACT NO. 6657 [RA 6657] OR THE COMPREHENSIVE AGRARIAN REFORM LAW
[CARL] DOES NOT PROVIDE THAT THE FWBs WHO OPT FOR STOCK DISTRIBUTION OPTION
SHOULD RETAIN MAJORITY SHAREHOLDING OF THE COMPANY TO WHICH THE
AGRICULTURAL LAND WAS GIVEN.

II

IF THE NOVEMBER 22, 2011 DECISION OF THIS HONORABLE COURT ORDERING LAND
DISTRIBUTION WOULD BE FOLLOWED, THIS WOULD CAUSE MORE HARM THAN GOOD TO
THE LIVES OF THOSE PEOPLE LIVING IN THE HACIENDA, AND MORE PARTICULARLY TO
THE WELFARE OF THE FWBs.

III

ON THE CONCLUSION BY THIS HONORABLE COURT THAT THE OPERATIVE FACT

DOCTRINE IS APPLICABLE TO THE CASE AT BAR, THEN FWBs WHO MERELY RELIED ON
THE PARC APPROVAL SHOULD NOT BE PREJUDICED BY ITS SUBSEQUENT NULLIFICATION.

IV

THOSE WHO CHOOSE LAND SHOULD RETURN WHATEVER THEY GOT FROM THE SDOA
[STOCK DISTRIBUTION OPTION AGREEMENT] AND TURN OVER THE SAME TO HLI FOR USE
IN THE OPERATIONS OF THE COMPANY, WHICH IN TURN WILL REDOUND TO THE BENEFIT
OF THOSE WHO WILL OPT TO STAY WITH THE SDO.

FOR THOSE WHO CHOOSE LAND, THE TIME OF TAKING FOR PURPOSES OF JUST
COMPENSATION SHOULD BE AT THE TIME HLI WAS DISPOSSESSED OF CONTROL OVER
THE PROPERTY, AND THAT PAYMENT BY [THE GOVERNMENT] OF THE LAND SHOULD BE
TURNED OVER TO HLI FOR THE BENEFIT AND USE OF THE COMPANY’S OPERATIONS THAT
WILL, IN TURN, REDOUND TO THE BENEFIT OF FWBs WHO WILL OPT TO STAY WITH THE
COMPANY.

Basically, the issues raised by HLI and Mallari, et al. boil down to the following: (1) determination of
the date of "taking"; (2) propriety of the revocation of the option on the part of the original FWBs to
remain as stockholders of HLI; (3) propriety of distributing to the qualified FWBs the proceeds from
the sale of the converted land and of the 80.51-hectare Subic-Clark-Tarlac Expressway (SCTEX )
land; and (4) just compensation for the homelots given to the FWBs.

Payment of just compensation

HLI contends that since the SDP is a modality which the agrarian reform law gives the landowner as
alternative to compulsory coverage, then the FWBs cannot be considered as owners and
possessors of the agricultural lands of Hacienda Luisita at the time the SDP was approved by
PARC. It further claims that the approval of the SDP is not akin to a Notice of Coverage in
4 

compulsory coverage situations because stock distribution option and compulsory acquisition are
two (2) different modalities with independent and separate rules and mechanisms. Concomitantly,
HLI maintains that the Notice of Coverage issued on January 2, 2006 may, at the very least, be
considered as the date of "taking" as this was the only time that the agricultural lands of Hacienda
Luisita were placed under compulsory acquisition in view of its failure to perform certain obligations
under the SDP. 5

Mallari, et al. are of a similar view. They contend that Tarlac Development Corporation (Tadeco),
having as it were majority control over HLI, was never deprived of the use and benefit of the
agricultural lands of Hacienda Luisita. Upon this premise, Mallari, et al. claim the "date of taking"
could not be at the time of the approval of the SDP. 6

A view has also been advanced that the date of the "taking" should be left to the determination of the
Department of Agrarian Reform (DAR) in conjunction with its authority to preliminarily determine the
just compensation for the land made subject of CARP.

Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (AMBALA), in its Comment/Opposition

(to the Motion to Clarify and Reconsider Resolution of November 22, 2011) dated January 30, 2012,
on the other hand, alleges that HLI should not be paid just compensation altogether. It argues that
7 

when the Court of Appeals (CA) dismissed the case the government of then President Ferdinand E.
8 

Marcos initially instituted and won against Tadeco, the CA allegedly imposed as a condition for its
dismissal of the action that should the stock distribution program fail, the lands should be distributed
to the FWBs, with Tadeco receiving by way of compensation only the amount of PhP 3,988,000. 9

AMBALA further contends that if HLI or Tadeco is, at all, entitled to just compensation, the "taking"
should be reckoned as of November 21, 1989, the date when the SDP was approved, and the
amount of compensation should be PhP 40,000 per hectare as this was the same value declared in
1989 by Tadeco to ensure that the FWBs will not control the majority stockholdings in HLI. 10

At the outset, it should be noted that Section 2, Rule 52 of the Rules of Court states, "No second
motion for reconsideration of a judgment or final resolution by the same party shall be entertained."
A second motion for reconsideration, as a rule, is prohibited for being a mere reiteration of the issues
assigned and the arguments raised by the parties. 11

In the instant case, the issue on just compensation and the grounds HLI and Mallari, et al. rely upon
in support of their respective stance on the matter had been previously raised by them in their first
motion for reconsideration and fully passed upon by the Court in its November 22, 2011 Resolution.
The similarities in the issues then and now presented and the grounds invoked are at once easily
discernible from a perusal of the November 22, 2011 Resolution, the pertinent portions of which
read:

In Our July 5, 2011 Decision, We stated that "HLI shall be paid just compensation for the remaining
agricultural land that will be transferred to DAR for land distribution to the FWBs." We also ruled that
the date of the "taking" is November 21, 1989, when PARC approved HLI’s SDP per PARC
Resolution No. 89-12-2.

In its Motion for Clarification and Partial Reconsideration, HLI disagrees with the foregoing ruling and
contends that the "taking" should be reckoned from finality of the Decision of this Court, or at the
very least, the reckoning period may be tacked to January 2, 2006, the date when the Notice of
Coverage was issued by the DAR pursuant to PARC Resolution No. 2006-34-01 recalling/revoking
the approval of the SDP.

For their part, Mallari, et al. argue that the valuation of the land cannot be based on November 21,
1989, the date of approval of the SDP. Instead, they aver that the date of "taking" for valuation
purposes is a factual issue best left to the determination of the trial courts.

At the other end of the spectrum, AMBALA alleges that HLI should no longer be paid just
compensation for the agricultural land that will be distributed to the FWBs, since the Manila Regional
Trial Court (RTC) already rendered a decision ordering the Cojuangcos to transfer the control of
Hacienda Luisita to the Ministry of Agrarian Reform, which will distribute the land to small farmers
after compensating the landowners P3.988 million. In the event, however, that this Court will rule
that HLI is indeed entitled to compensation, AMBALA contends that it should be pegged at forty
thousand pesos (PhP 40,000) per hectare, since this was the same value that Tadeco declared in
1989 to make sure that the farmers will not own the majority of its stocks.

Despite the above propositions, We maintain that the date of "taking" is November 21, 1989, the
date when PARC approved HLI’s SDP per PARC Resolution No. 89-12-2, in view of the fact that this
is the time that the FWBs were considered to own and possess the agricultural lands in Hacienda
Luisita. To be precise, these lands became subject of the agrarian reform coverage through the
stock distribution scheme only upon the approval of the SDP, that is, November 21, 1989. Thus,
such approval is akin to a notice of coverage ordinarily issued under compulsory acquisition. Further,
any doubt should be resolved in favor of the FWBs. As this Court held in Perez-Rosario v. CA:

It is an established social and economic fact that the escalation of poverty is the driving force behind
the political disturbances that have in the past compromised the peace and security of the people as
well as the continuity of the national order. To subdue these acute disturbances, the legislature over
the course of the history of the nation passed a series of laws calculated to accelerate agrarian
reform, ultimately to raise the material standards of living and eliminate discontent. Agrarian reform
is a perceived solution to social instability. The edicts of social justice found in the Constitution and
the public policies that underwrite them, the extraordinary national experience, and the prevailing
national consciousness, all command the great departments of government to tilt the balance in
favor of the poor and underprivileged whenever reasonable doubt arises in the interpretation of the
law. But annexed to the great and sacred charge of protecting the weak is the diametric function to
put every effort to arrive at an equitable solution for all parties concerned: the jural postulates of
social justice cannot shield illegal acts, nor do they sanction false sympathy towards a certain class,
nor yet should they deny justice to the landowner whenever truth and justice happen to be on her
side. In the occupation of the legal questions in all agrarian disputes whose outcomes can
significantly affect societal harmony, the considerations of social advantage must be weighed, an
inquiry into the prevailing social interests is necessary in the adjustment of conflicting demands and
expectations of the people, and the social interdependence of these interests, recognized.
(Emphasis and citations omitted.)

Considering that the issue on just compensation has already been passed upon and denied by the
Court in its November 22, 2011 Resolution, a subsequent motion touching on the same issue
undeniably partakes of a second motion for reconsideration, hence, a prohibited pleading, and as
such, the motion or plea must be denied. Sec. 3 of Rule 15 of the Internal Rules of the Supreme
Court is clear:

SEC. 3. Second motion for reconsideration. – The Court shall not entertain a second motion for
reconsideration, and any exception to this rule can only be granted in the higher interest of justice by
the Court en banc upon a vote of at least two-thirds of its actual membership. There is
reconsideration "in the higher interest of justice" when the assailed decision is not only legally
erroneous, but is likewise patently unjust and potentially capable of causing unwarranted and
irremediable injury or damage to the parties. A second motion for reconsideration can only be
entertained before the ruling sought to be reconsidered becomes final by operation of law or by the
Court’s declaration.

In the Division, a vote of three Members shall be required to elevate a second motion for
reconsideration to the Court En Banc.

Nonetheless, even if we entertain said motion and examine the arguments raised by HLI and Mallari,
et al. one last time, the result will be the same.

Sec. 4, Article XIII of the 1987 Constitution expressly provides that the taking of land for use in the
agrarian reform program of the government is conditioned on the payment of just compensation. As
stated:

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farm workers, who are landless, to own directly or collectively the lands they till
or, in the case of other farm workers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of just
compensation. (Emphasis supplied.)

Just compensation has been defined as "the full and fair equivalent of the property taken from its
owner by the expropriator." The measure is not the taker’s gain, but the owner’s loss. In
12  13 

determining just compensation, the price or value of the property at the time it was taken from the
owner and appropriated by the government shall be the basis. If the government takes possession of
the land before the institution of expropriation proceedings, the value should be fixed as of the time
of the taking of said possession, not of the filing of the complaint.
14

In Land Bank of the Philippines v. Livioco, the Court held that "the ‘time of taking’ is the time when
the landowner was deprived of the use and benefit of his property, such as when title is transferred
to the Republic." It should be noted, however, that "taking" does not only take place upon the
15 

issuance of title either in the name of the Republic or the beneficiaries of the Comprehensive
Agrarian Reform Program (CARP). "Taking" also occurs when agricultural lands are voluntarily
offered by a landowner and approved by PARC for CARP coverage through the stock distribution
scheme, as in the instant case. Thus, HLI’s submitting its SDP for approval is an acknowledgment
on its part that the agricultural lands of Hacienda Luisita are covered by CARP. However, it was the
PARC approval which should be considered as the effective date of "taking" as it was only during
this time that the government officially confirmed the CARP coverage of these lands.

Indeed, stock distribution option and compulsory land acquisition are two (2) different modalities
under the agrarian reform program. Nonetheless, both share the same end goal, that is, to have "a
more equitable distribution and ownership of land, with due regard to the rights of landowners to just
compensation." 16
The fact that Sec. 31 of Republic Act No. 6657 (RA 6657) gives corporate landowners the option to
give qualified beneficiaries the right to avail of a stock distribution or, in the phraseology of the law,
"the right to purchase such proportion of the capital stock of the corporation that the agricultural land,
actually devoted to agricultural activities, bears in relation to the company’s total assets," does not
detract from the avowed policy of the agrarian reform law of equitably distributing ownership of land.
The difference lies in the fact that instead of actually distributing the agricultural lands to the farmer-
beneficiaries, these lands are held by the corporation as part of the capital contribution of the farmer-
beneficiaries, not of the landowners, under the stock distribution scheme. The end goal of equitably
distributing ownership of land is, therefore, undeniable. And since it is only upon the approval of the
SDP that the agricultural lands actually came under CARP coverage, such approval operates and
takes the place of a notice of coverage ordinarily issued under compulsory acquisition.

Moreover, precisely because due regard is given to the rights of landowners to just compensation,
the law on stock distribution option acknowledges that landowners can require payment for the
shares of stock corresponding to the value of the agricultural lands in relation to the outstanding
capital stock of the corporation.

Although Tadeco did not require compensation for the shares of stock corresponding to the value of
the agricultural lands in relation to the outstanding capital stock of HLI, its inability to receive
compensation cannot be attributed to the government. The second paragraph of Sec. 31 of RA 6657
explicitly states that "[u]pon certification by DAR, corporations owning agricultural lands may give
their qualified beneficiaries the right to purchase such proportion of the capital stock of the
corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to
the company’s total assets, under such terms and conditions as may be agreed upon by them. x x
x" On the basis of this statutory provision, Tadeco could have exacted payment for such shares of
17 

stock corresponding to the value of the agricultural lands of Hacienda Luisita in relation to the
outstanding capital stock of HLI, but it did not do so.

What is notable, however, is that the divestment by Tadeco of the agricultural lands of Hacienda
Luisita and the giving of the shares of stock for free is nothing but an enticement or incentive for the
FWBs to agree with the stock distribution option scheme and not further push for land distribution.
And the stubborn fact is that the "man days" scheme of HLI impelled the FWBs to work in the
hacienda in exchange for such shares of stock.

Notwithstanding the foregoing considerations, the suggestion that there is "taking" only when the
landowner is deprived of the use and benefit of his property is not incompatible with Our conclusion
that "taking" took place on November 21, 1989. As mentioned in Our July 5, 2011 Decision, even
from the start, the stock distribution scheme appeared to be Tadeco’s preferred option in complying
with the CARP when it organized HLI as its spin-off corporation in order to facilitate stock acquisition
by the FWBs. For this purpose, Tadeco assigned and conveyed to HLI the agricultural lands of
Hacienda Luisita, set at 4,915.75 hectares, among others. These agricultural lands constituted as
the capital contribution of the FWBs in HLI. In effect, Tadeco deprived itself of the ownership over
these lands when it transferred the same to HLI.

While it is true that Tadeco has majority control over HLI, the Court cannot subscribe to the view
Mallari, et al. espouse that, on the basis of such majority stockholding, Tadeco was never deprived
of the use and benefit of the agricultural lands of Hacienda Luisita it divested itself in favor of HLI.

It bears stressing that "[o]wnership is defined as a relation in law by virtue of which a thing pertaining
to one person is completely subjected to his will in everything not prohibited by law or the
concurrence with the rights of another." The attributes of ownership are: jus utendi or the right to
18 

possess and enjoy, jus fruendi or the right to the fruits, jus abutendi or the right to abuse or
consume, jus disponendi or the right to dispose or alienate, and jus vindicandi or the right to recover
or vindicate.
19

When the agricultural lands of Hacienda Luisita were transferred by Tadeco to HLI in order to
comply with CARP through the stock distribution option scheme, sealed with the imprimatur of PARC
under PARC Resolution No. 89-12-2 dated November 21, 1989, Tadeco was consequently
dispossessed of the afore-mentioned attributes of ownership. Notably, Tadeco and HLI are two
different entities with separate and distinct legal personalities. Ownership by one cannot be
considered as ownership by the other.

Corollarily, it is the official act by the government, that is, the PARC’s approval of the SDP, which
should be considered as the reckoning point for the "taking" of the agricultural lands of Hacienda
Luisita. Although the transfer of ownership over the agricultural lands was made prior to the SDP’s
approval, it is this Court’s consistent view that these lands officially became subject of the agrarian
reform coverage through the stock distribution scheme only upon the approval of the SDP. And as
We have mentioned in Our November 22, 2011 Resolution, such approval is akin to a notice of
coverage ordinarily issued under compulsory acquisition.

Further, if We adhere to HLI’s view that the Notice of Coverage issued on January 2, 2006 should, at
the very least, be considered as the date of "taking" as this was the only time that the agricultural
portion of the hacienda was placed under compulsory acquisition in view of HLI’s failure to perform
certain obligations under the SDP, this Court would, in effect, be penalizing the qualified FWBs twice
for acceding to the adoption of the stock distribution scheme: first, by depriving the qualified FWBs of
the agricultural lands that they should have gotten early on were it not for the adoption of the stock
distribution scheme of which they only became minority stockholders; and second, by making them
pay higher amortizations for the agricultural lands that should have been given to them decades ago
at a much lower cost were it not for the landowner’s initiative of adopting the stock distribution
scheme "for free."

Reiterating what We already mentioned in Our November 22, 2011 Resolution, "[e]ven if it is the
government which will pay the just compensation to HLI, this will also affect the FWBs as they will be
paying higher amortizations to the government if the ‘taking’ will be considered to have taken place
only on January 2, 2006." As aptly observed by Justice Leonardo-De Castro in her Concurring
Opinion, "this will put the land beyond the capacity of the [FWBs] to pay," which this Court should not
countenance.

Considering the above findings, it cannot be gainsaid that effective "taking" took place in the case at
bar upon the approval of the SDP, that is, on November 21, 1989.

HLI postulates that just compensation is a question of fact that should be left to the determination by
the DAR, Land Bank of the Philippines (LBP) or even the special agrarian court (SAC). As a matter
20 

of fact, the Court, in its November 22, 2011 Resolution, dispositively ordered the DAR and the LBP
to determine the compensation due to HLI. And as indicated in the body of said Resolution:

The foregoing notwithstanding, it bears stressing that the DAR’s land valuation is only preliminary
and is not, by any means, final and conclusive upon the landowner. The landowner can file an
original action with the RTC acting as a special agrarian court to determine just compensation. The
court has the right to review with finality the determination in the exercise of what is admittedly a
judicial function.

As regards the issue on when "taking" occurred with respect to the agricultural lands in question,
We, however, maintain that this Court can rule, as it has in fact already ruled on its reckoning date,
that is, November 21, 1989, the date of issuance of PARC Resolution No. 89-12-2, based on the
above-mentioned disquisitions. The investment on SACs of original and exclusive jurisdiction over all
petitions for the determination of just compensation to landowners will not preclude the Court from
21 

ruling upon a matter that may already be resolved based on the records before Us. By analogy, Our
ruling in Heirs of Dr. Jose Deleste v. LBP is applicable:

Indeed, it is the Office of the DAR Secretary which is vested with the primary and exclusive
jurisdiction over all matters involving the implementation of the agrarian reform program. However,
this will not prevent the Court from assuming jurisdiction over the petition considering that the issues
raised in it may already be resolved on the basis of the records before Us. Besides, to allow the
matter to remain with the Office of the DAR Secretary would only cause unnecessary delay and
undue hardship on the parties. Applicable, by analogy, is Our ruling in the recent Bagong
Pagkakaisa ng Manggagawa ng Triumph International v. Department of Labor and Employment
Secretary, where We held:

But as the CA did, we similarly recognize that undue hardship, to the point of injustice, would result if
a remand would be ordered under a situation where we are in the position to resolve the case based
on the records before us. As we said in Roman Catholic Archbishop of Manila v. Court of Appeals:

[w]e have laid down the rule that the remand of the case to the lower court for further reception of
evidence is not necessary where the Court is in a position to resolve the dispute based on the
records before it. On many occasions, the Court, in the public interest and for the expeditious
administration of justice, has resolved actions on the merits instead of remanding them to the trial
court for further proceedings, such as where the ends of justice, would not be subserved by the
remand of the case. (Emphasis supplied; citations omitted.)
22 

Even though the compensation due to HLI will still be preliminarily determined by DAR and LBP,
subject to review by the RTC acting as a SAC, the fact that the reckoning point of "taking" is already
fixed at a certain date should already hasten the proceedings and not further cause undue hardship
on the parties, especially the qualified FWBs.

By a vote of 8-6, the Court affirmed its ruling that the date of "taking" in determining just
compensation is November 21, 1989 when PARC approved HLI’s stock option plan.

As regards the issue of interest on just compensation, We also leave this matter to the DAR and the
LBP, subject to review by the RTC acting as a SAC.

Option will not ensure

control over agricultural lands

In Our November 22, 2011 Resolution, this Court held:

After having discussed and considered the different contentions raised by the parties in their
respective motions, We are now left to contend with one crucial issue in the case at bar, that is,
control over the agricultural lands by the qualified FWBs.

Upon a review of the facts and circumstances, We realize that the FWBs will never have control over
these agricultural lands for as long as they remain as stockholders of HLI. In Our July 5, 2011
Decision, this Court made the following observations:
There is, thus, nothing unconstitutional in the formula prescribed by RA 6657. The policy on agrarian
reform is that control over the agricultural land must always be in the hands of the farmers. Then it
falls on the shoulders of DAR and PARC to see to it the farmers should always own majority of the
common shares entitled to elect the members of the board of directors to ensure that the farmers will
have a clear majority in the board. Before the SDP is approved, strict scrutiny of the proposed SDP
must always be undertaken by the DAR and PARC, such that the value of the agricultural land
contributed to the corporation must always be more than 50% of the total assets of the corporation to
ensure that the majority of the members of the board of directors are composed of the farmers. The
PARC composed of the President of the Philippines and cabinet secretaries must see to it that
control over the board of directors rests with the farmers by rejecting the inclusion of non-agricultural
assets which will yield the majority in the board of directors to non-farmers. Any deviation, however,
by PARC or DAR from the correct application of the formula prescribed by the second paragraph of
Sec. 31 of RA 6675 does not make said provision constitutionally infirm. Rather, it is the application
of said provision that can be challenged. Ergo, Sec. 31 of RA 6657 does not trench on the
constitutional policy of ensuring control by the farmers.

In line with Our finding that control over agricultural lands must always be in the hands of the
farmers, We reconsider our ruling that the qualified FWBs should be given an option to remain as
stockholders of HLI, inasmuch as these qualified FWBs will never gain control given the present
proportion of shareholdings in HLI.

A revisit of HLI’s Proposal for Stock Distribution under CARP and the Stock Distribution Option
Agreement (SDOA) upon which the proposal was based reveals that the total assets of HLI is PhP
590,554,220, while the value of the 4,915.7466 hectares is PhP 196,630,000. Consequently, the
share of the farmer-beneficiaries in the HLI capital stock is 33.296% (196,630,000 divided by
590,554.220); 118,391,976.85 HLI shares represent 33.296%. Thus, even if all the holders of the
118,391,976.85 HLI shares unanimously vote to remain as HLI stockholders, which is unlikely,
control will never be placed in the hands of the farmer-beneficiaries. Control, of course, means the
majority of 50% plus at least one share of the common shares and other voting shares. Applying the
formula to the HLI stockholdings, the number of shares that will constitute the majority is
295,112,101 shares (590,554,220 divided by 2 plus one [1] HLI share). The 118,391,976.85 shares
subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by
the FWBs to acquire control over HLI. Hence, control can NEVER be attained by the FWBs. There is
even no assurance that 100% of the 118,391,976.85 shares issued to the FWBs will all be voted in
favor of staying in HLI, taking into account the previous referendum among the farmers where said
shares were not voted unanimously in favor of retaining the SDP. In light of the foregoing
consideration, the option to remain in HLI granted to the individual FWBs will have to be recalled and
revoked.

Moreover, bearing in mind that with the revocation of the approval of the SDP, HLI will no longer be
operating under SDP and will only be treated as an ordinary private corporation; the FWBs who
remain as stockholders of HLI will be treated as ordinary stockholders and will no longer be under
the protective mantle of RA 6657. (Emphasis in the original.)

HLI, however, takes exception to the above-mentioned ruling and contends that "[t]here is nothing in
the Constitution nor in the agrarian laws which require that control over the agricultural lands must
always be in the hands of the farmers." Moreover, both HLI and Mallari, et al. claim that the option
23 

given to the qualified FWBs to remain as stockholders of HLI is neither iniquitous nor prejudicial to
the FWBs. 24

The Court agrees that the option given to the qualified FWBs whether to remain as stockholders of
HLI or opt for land distribution is neither iniquitous nor prejudicial to the FWBs. Nonetheless, the
Court is not unmindful of the policy on agrarian reform that control over the agricultural land must
always be in the hands of the farmers. Contrary to the stance of HLI, both the Constitution and RA
6657 intended the farmers, individually or collectively, to have control over the agricultural lands of
HLI; otherwise, all these rhetoric about agrarian reform will be rendered for naught. Sec. 4, Art. XIII
of the 1987 Constitution provides:

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers who are landless, to own directly or collectively the lands they till
or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small landowners.
The State shall further provide incentives for voluntary land-sharing. (Emphasis supplied.)

Pursuant to and as a mechanism to carry out the above-mentioned constitutional directive, RA 6657
was enacted. In consonance with the constitutional policy on agrarian reform, Sec. 2 of RA 6657
also states:

SECTION 2. Declaration of Principles and Policies. - It is the policy of the State to pursue a
Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farm
workers will receive the highest consideration to promote social justice and to move the nation
towards sound rural development and industrialization, and the establishment of owner cultivatorship
of economic-sized farms as the basis of Philippine agriculture.

To this end, a more equitable distribution and ownership of land, with due regard to the rights of
landowners to just compensation and to the ecological needs of the nation, shall be undertaken to
provide farmers and farm workers with the opportunity to enhance their dignity and improve the
quality of their lives through greater productivity of agricultural lands.

The agrarian reform program is founded on the right of farmers and regular farm workers, who are
landless, to own directly or collectively the lands they till or, in the case of other farm workers, to
receive a share of the fruits thereof. To this end, the State shall encourage the just distribution of all
agricultural lands, subject to the priorities and retention limits set forth in this Act, having taken into
account ecological, developmental, and equity considerations, and subject to the payment of just
compensation. The State shall respect the right of small landowners and shall provide incentives for
voluntary land-sharing.

The State shall recognize the right of farmers, farm workers and landowners, as well as cooperatives
and other independent farmers’ organization, to participate in the planning, organization, and
management of the program, and shall provide support to agriculture through appropriate technology
and research, and adequate financial, production, marketing and other support services.

The State shall apply the principles of agrarian reform or stewardship, whenever applicable, in
accordance with law, in the disposition or utilization of other natural resources, including lands of the
public domain, under lease or concession, suitable to agriculture, subject to prior rights, homestead
rights of small settlers and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farm workers in its own agricultural estates, which shall
be distributed to them in the manner provided by law.
By means of appropriate incentives, the State shall encourage the formation and maintenance of
economic-sized family farms to be constituted by individual beneficiaries and small landowners.

The State shall protect the rights of subsistence fishermen, especially of local communities, to the
preferential use of 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.

The State shall be guided by the principles that land has a social function and land ownership has a
social responsibility. Owners of agricultural land have the obligation to cultivate directly or through
labor administration the lands they own and thereby make the land productive.

The State shall provide incentives to landowners to invest the proceeds of the agrarian reform
program to promote industrialization, employment and privatization of public sector enterprises.
Financial instruments used as payment for lands shall contain features that shall enhance
negotiability and acceptability in the marketplace.

The State may lease undeveloped lands of the public domain to qualified entities for the
development of capital-intensive farms, traditional and pioneering crops especially those for exports
subject to the prior rights of the beneficiaries under this Act. (Emphasis supplied.)

Based on the above-quoted provisions, the notion of farmers and regular farmworkers having the
right to own directly or collectively the lands they till is abundantly clear. We have extensively
discussed this ideal in Our July 5, 2011 Decision:

The wording of the provision is unequivocal –– the farmers and regular farmworkers have a right TO
OWN DIRECTLY OR COLLECTIVELY THE LANDS THEY TILL. The basic law allows two (2)
modes of land distribution—direct and indirect ownership. Direct transfer to individual farmers is the
most commonly used method by DAR and widely accepted. Indirect transfer through collective
ownership of the agricultural land is the alternative to direct ownership of agricultural land by
individual farmers. The aforequoted Sec. 4 EXPRESSLY authorizes collective ownership by farmers.
No language can be found in the 1987 Constitution that disqualifies or prohibits corporations or
cooperatives of farmers from being the legal entity through which collective ownership can be
exercised. The word ‘collective’ is defined as ‘indicating a number of persons or things considered as
constituting one group or aggregate,’ while ‘collectively’ is defined as ‘in a collective sense or
manner; in a mass or body.’ By using the word ‘collectively,’ the Constitution allows for indirect
ownership of land and not just outright agricultural land transfer. This is in recognition of the fact that
land reform may become successful even if it is done through the medium of juridical entities
composed of farmers.

Collective ownership is permitted in two (2) provisions of RA 6657. Its Sec. 29 allows workers’
cooperatives or associations to collectively own the land, while the second paragraph of Sec. 31
allows corporations or associations to own agricultural land with the farmers becoming stockholders
or members. Said provisions read:

SEC. 29. Farms owned or operated by corporations or other business associations.—In the case of
farms owned or operated by corporations or other business associations, the following rules shall be
observed by the PARC.
In general, lands shall be distributed directly to the individual worker-beneficiaries.

In case it is not economically feasible and sound to divide the land, then it shall be owned
collectively by the worker beneficiaries who shall form a workers’ cooperative or association which
will deal with the corporation or business association. x x x

SEC. 31. Corporate Landowners.— x x x

xxxx

Upon certification by the DAR, corporations owning agricultural lands may give their qualified
beneficiaries the right to purchase such proportion of the capital stock of the corporation that the
agricultural land, actually devoted to agricultural activities, bears in relation to the company’s total
assets, under such terms and conditions as may be agreed upon by them. In no case shall the
compensation received by the workers at the time the shares of stocks are distributed be reduced.
The same principle shall be applied to associations, with respect to their equity or participation. x x x

Clearly, workers’ cooperatives or associations under Sec. 29 of RA 6657 and corporations or

associations under the succeeding Sec. 31, as differentiated from individual farmers, are authorized
vehicles for the collective ownership of agricultural land. Cooperatives can be registered with the
Cooperative Development Authority and acquire legal personality of their own, while corporations
are juridical persons under the Corporation Code. Thus, Sec. 31 is constitutional as it simply
implements Sec. 4 of Art. XIII of the Constitution that land can be owned COLLECTIVELY by
farmers. Even the framers of the l987 Constitution are in unison with respect to the two (2) modes of
ownership of agricultural lands tilled by farmers––DIRECT and COLLECTIVE, thus:

MR. NOLLEDO. And when we talk of the phrase ‘to own directly,’ we mean the principle of direct
ownership by the tiller?

MR. MONSOD. Yes.

MR. NOLLEDO. And when we talk of ‘collectively,’ we mean communal ownership, stewardship or
State ownership?

MS. NIEVA. In this section, we conceive of cooperatives; that is farmers’ cooperatives owning the
land, not the State.

MR. NOLLEDO. And when we talk of ‘collectively,’ referring to farmers’ cooperatives, do the farmers
own specific areas of land where they only unite in their efforts?

MS. NIEVA. That is one way.

MR. NOLLEDO. Because I understand that there are two basic systems involved: the ‘moshave’
type of agriculture and the ‘kibbutz.’ So are both contemplated in the report?

MR. TADEO. Ang dalawa kasing pamamaraan ng pagpapatupad ng tunay na reporma sa lupa ay
ang pagmamay-ari ng lupa na hahatiin sa individual na pagmamay-ari – directly – at ang tinatawag
na sama-samang gagawin ng mga magbubukid. Tulad sa Negros, ang gusto ng mga magbubukid
ay gawin nila itong ‘cooperative or collective farm.’ Ang ibig sabihin ay sama-sama nilang sasakahin.

xxxx
MR. TINGSON. x x x When we speak here of ‘to own directly or collectively the lands they till,’ is this
land for the tillers rather than land for the landless? Before, we used to hear ‘land for the landless,’
but now the slogan is ‘land for the tillers.’ Is that right?

MR. TADEO. Ang prinsipyong umiiral dito ay iyong land for the tillers. Ang ibig sabihin ng ‘directly’ ay
tulad sa implementasyon sa rice and corn lands kung saan inaari na ng mga magsasaka ang lupang
binubungkal nila. Ang ibig sabihin naman ng ‘collectively’ ay sama-samang paggawa sa isang lupain
o isang bukid, katulad ng sitwasyon sa Negros.

As Commissioner Tadeo explained, the farmers will work on the agricultural land ‘sama-sama’ or
collectively. Thus, the main requisite for collective ownership of land is collective or group work by
farmers of the agricultural land. Irrespective of whether the landowner is a cooperative, association
or corporation composed of farmers, as long as concerted group work by the farmers on the land is
present, then it falls within the ambit of collective ownership scheme. (Emphasis in the original;
underscoring supplied.)

As aforequoted, there is collective ownership as long as there is a concerted group work by the
farmers on the land, regardless of whether the landowner is a cooperative, association or
corporation composed of farmers. However, this definition of collective ownership should be read in
light of the clear policy of the law on agrarian reform, which is to emancipate the tiller from the
bondage of the soil and empower the common people. Worth noting too is its noble goal of rectifying
"the acute imbalance in the distribution of this precious resource among our people." Accordingly,
25 

HLI’s insistent view that control need not be in the hands of the farmers translates to allowing it to
run roughshod against the very reason for the enactment of agrarian reform laws and leave the
farmers in their shackles with sheer lip service to look forward to.

Notably, it has been this Court’s consistent stand that control over the agricultural land must always
be in the hands of the farmers. As We wrote in Our July 5, 2011 Decision:

There is, thus, nothing unconstitutional in the formula prescribed by RA 6657. The policy on agrarian
reform is that control over the agricultural land must always be in the hands of the farmers. Then it
falls on the shoulders of DAR and PARC to see to it the farmers should always own majority of the
common shares entitled to elect the members of the board of directors to ensure that the farmers will
have a clear majority in the board. Before the SDP is approved, strict scrutiny of the proposed SDP
must always be undertaken by the DAR and PARC, such that the value of the agricultural land
contributed to the corporation must always be more than 50% of the total assets of the corporation to
ensure that the majority of the members of the board of directors are composed of the farmers. The
PARC composed of the President of the Philippines and cabinet secretaries must see to it that
control over the board of directors rests with the farmers by rejecting the inclusion of non-agricultural
assets which will yield the majority in the board of directors to non-farmers. Any deviation, however,
by PARC or DAR from the correct application of the formula prescribed by the second paragraph of
Sec. 31 of RA 6675 does not make said provision constitutionally infirm. Rather, it is the application
of said provision that can be challenged. Ergo, Sec. 31 of RA 6657 does not trench on the
constitutional policy of ensuring control by the farmers. (Emphasis supplied.)

There is an aphorism that "what has been done can no longer be undone." That may be true, but not
in this case. The SDP was approved by PARC even if the qualified FWBs did not and will not have
majority stockholdings in HLI, contrary to the obvious policy by the government on agrarian reform.
Such an adverse situation for the FWBs will not and should not be permitted to stand. For this
reason, We maintain Our ruling that the qualified FWBs will no longer have the option to remain as
stockholders of HLI.
FWBs Entitled
to Proceeds of Sale

HLI reiterates its claim over the proceeds of the sales of the 500 hectares and 80.51 hectares of the
land as corporate owner and argues that the return of said proceeds to the FWBs is unfair and
violative of the Corporation Code.

This claim is bereft of merit.

It cannot be denied that the adverted 500-hectare converted land and the SCTEX lot once formed
part of what would have been agrarian-distributable lands, in fine subject to compulsory CARP
coverage. And, as stated in our July 5, 2011 Decision, were it not for the approval of the SDP by
PARC, these large parcels of land would have been distributed and ownership transferred to the
FWBs, subject to payment of just compensation, given that, as of 1989, the subject 4,915 hectares
of Hacienda Luisita were already covered by CARP. Accordingly, the proceeds realized from the
sale and/or disposition thereof should accrue for the benefit of the FWBs, less deductions of the 3%
of the proceeds of said transfers that were paid to the FWBs, the taxes and expenses relating to the
transfer of titles to the transferees, and the expenditures incurred by HLI and Centennary Holdings,
Inc. for legitimate corporate purposes, as prescribed in our November 22, 2011 Resolution.

Homelots

In the present recourse, HLI also harps on the fact that since the homelots given to the FWBs do not
form part of the 4,915.75 hectares covered by the SDP, then the value of these homelots should,
with the revocation of the SDP, be paid to Tadeco as the landowner. 26

We disagree. As We have explained in Our July 5, 2011 Decision, the distribution of homelots is
required under RA 6657 only for corporations or business associations owning or operating farms
which opted for land distribution. This is provided under Sec. 30 of RA 6657. Particularly:

SEC. 30. Homelots and Farmlots for Members of Cooperatives. ¾ The individual members of the
cooperatives or corporations mentioned in the preceding section shall be provided with homelots
and small farmlots for their family use, to be taken from the land owned by the cooperative or
corporation. (Italics supplied.)

The "preceding section" referred to in the above-quoted provision is Sec. 29 of RA 6657, which
states:

SEC. 29. Farms Owned or Operated by Corporations or Other Business Associations.¾In the case
of farms owned or operated by corporations or other business associations, the following rules shall
be observed by the PARC.

In general, lands shall be distributed directly to the individual worker-beneficiaries.

In case it is not economically feasible and sound to divide the land, then it shall be owned
collectively by the worker-beneficiaries who shall form a workers’ cooperative or association which
will deal with the corporation or business association. Until a new agreement is entered into by and
between the workers’ cooperative or association and the corporation or business association, any
agreement existing at the time this Act takes effect between the former and the previous landowner
shall be respected by both the workers’ cooperative or association and the corporation or business
association.
Since none of the above-quoted provisions made reference to corporations which opted for stock
distribution under Sec. 31 of RA 6657, then it is apparent that said corporations are not obliged to
provide for homelots. Nonetheless, HLI undertook to "subdivide and allocate for free and without
charge among the qualified family-beneficiaries x x x residential or homelots of not more than 240
sq. m. each, with each family beneficiary being assured of receiving and owning a homelot in the
barrio or barangay where it actually resides." In fact, HLI was able to distribute homelots to some if
not all of the FWBs. Thus, in our November 22, 2011 Resolution, We declared that the homelots
already received by the FWBs shall be respected with no obligation to refund or to return them.

The Court, by a unanimous vote, resolved to maintain its ruling that the FWBs shall retain ownership
of the homelots given to them with no obligation to pay for the value of said lots. However, since the
SDP was already revoked with finality, the Court directs the government through the DAR to pay HLI
the just compensation for said homelots in consonance with Sec. 4, Article XIII of the 1987
Constitution that the taking of land for use in the agrarian reform program is "subject to the payment
of just compensation." Just compensation should be paid to HLI instead of Tadeco in view of the
Deed of Assignment and Conveyance dated March 22, 1989 executed between Tadeco and HLI,
where Tadeco transferred and conveyed to HLI the titles over the lots in question. DAR is ordered to
compute the just compensation of the homelots in accordance with existing laws, rules and
regulations.

To recapitulate, the Court voted on the following issues in this manner:

1. In determining the date of "taking," the Court voted 8-6 to maintain the ruling fixing
November 21, 1989 as the date of "taking," the value of the affected lands to be determined
by the LBP and the DAR;

2. On the propriety of the revocation of the option of the FWBs to remain as HLI
stockholders, the Court, by unanimous vote, agreed to reiterate its ruling in its November 22,
2011 Resolution that the option granted to the FWBs stays revoked;

3. On the propriety of returning to the FWBs the proceeds of the sale of the 500-hectare
converted land and of the 80.51-hectare SCTEX land, the Court unanimously voted to
maintain its ruling to order the payment of the proceeds of the sale of the said land to the
FWBs less the 3% share, taxes and expenses specified in the fallo of the November 22,
2011 Resolution;

4. On the payment of just compensation for the homelots to HLI, the Court, by unanimous
vote, resolved to amend its July 5, 2011 Decision and November 22, 2011 Resolution by
ordering the government, through the DAR, to pay to HLI the just compensation for the
homelots thus distributed to the FWBS.

WHEREFORE, the Motion to Clarify and Reconsider Resolution of November 22, 2011 dated
December 16, 2011 filed by petitioner Hacienda Luisita, Inc. and the Motion for
Reconsideration/Clarification dated December 9, 2011 filed by private respondents Noel Mallari,
Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. and Windsor Andaya are hereby DENIED
with this qualification: the July 5, 2011 Decision, as modified by the November 22, 2011 Resolution,
is FURTHER MODIFIED in that the government, through DAR, is ordered to pay Hacienda Luisita,
Inc. the just compensation for the 240-square meter homelots distributed to the FWBs. 1âwphi1

The July 5, 2011 Decision, as modified by the November 22, 2011 Resolution and further modified
by this Resolution is declared FINAL and EXECUTORY. The entry of judgment of said decision shall
be made upon the time of the promulgation of this Resolution.
No further pleadings shall be entertained in this case.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

ANTONIO T. CARPIO 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 CATRAL MENDOZA

Associate Justice Associate Justice

MARIA LOURDES P. A. SERENO BIENVENIDO L. REYES

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in
the above Resolution 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

"Jose Julio Zuniga" in some parts of the records.

1 

G.R. No. 171101, 653 SCRA 154; hereinafter referred to as "July 5, 2011 Decision."
2 
 G.R. No. 171101; hereinafter referred to as "November 22, 2011 Resolution."
3 

HLI MR, pp. 10-11.

4 

Id. at 11.
5 

Mallari, et al. MR, p. 15.

6 

AMBALA MR, p. 4.
7 

As a backgrounder, and as stated in Our July 5, 2011 Decision, the government filed a suit
8 

on May 7, 1980 before the Manila Regional Trial Court (RTC) against Tadeco et al. for them
to surrender Hacienda Luisita to the then Ministry of Agrarian Reform (MAR, now the
Department of Agrarian Reform [DAR]) so that the land can be distributed to the farmers at
cost. For its part, Tadeco alleged that aside from the fact that Hacienda Luisita does not
have tenants, the sugar lands, of which the hacienda consisted, are not covered by existing
agrarian reform legislations.

Eventually, the Manila RTC rendered judgment ordering Tadeco to surrender

Hacienda Luisita to the MAR. Aggrieved, Tadeco appealed to the CA. On March 17,
1988, the Office of the Solicitor General (OSG) moved to withdraw the government’s
case against Tadeco, et al. By Resolution of May 18, 1988, the CA dismissed the
case, subject to the obtention by Tadeco of the PARC’s approval of a stock
distribution plan that must initially be implemented after such approval shall have
been secured.

AMBALA MR, p. 6.
9 

10 
Id. at 17.

See Lao v. Co, G.R. No. 168198, August 22, 2008, 563 SCRA 139, 143; citing Balindong v.
11 

CA, G.R. No. 159962, December 16, 2004, 447 SCRA 200, 210.

National Power Corporation v. Diato-Bernal, G.R. No. 180979, December 15, 2010, 638
12 

SCRA 660, 669.

13 
Id.

14 
Republic v. CA, G.R. No. 160379, August 14, 2009, 596 SCRA 57, 70.

15 
G.R. No. 170685, September 22, 2010, 631 SCRA 86, 112-113.

16 
RA 6657, Sec. 2.

17 
Emphasis supplied.

Tatad v. Garcia, G.R. No. 114222, April 6, 1995, 243 SCRA 436, 453; citing 2 Tolentino,
18 

Commentaries and Jurisprudence on the Civil Code of the Philippines 45 (1992).

19 
Samartino v. Raon, G.R. No. 131482, July 3, 2002, 383 SCRA 664, 674.
 20 
HLI MR, pp. 21-23.

21 
RA 6657, Sec. 57.

22 
G.R. No. 169913, June 8, 2011, 651 SCRA 352, 374-375.

23 
HLI MR, p. 25.

24 
Id. at 30; Mallari, et al. MR, p. 8.

Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,

25 

G.R. No. 78742, July 14, 1989, 175 SCRA 343, 352.

26 
HLI MR, pp. 38-40.

The Lawphil Project - Arellano Law Foundation

SEPARATE OPINION
(Concurring and Dissenting)

BRION, J.:

I concur with the ponencia’s ruling that the Stock Distribution Plan (SDP) of the petitioner Hacienda
Luisita, Inc. (HLI), made pursuant to the agrarian reform law, Republic Act (RA) No. 6675 1 which
took effect on June 15, 1988, is illegal so that an actual compulsory transfer of the HLI’s agricultural
lands should have taken place. I likewise agree that the date of "taking" for purposes of determining
just compensation should be deemed to be November 21, 1989 – the date when the respondent
Presidential Agrarian Reform Council (PARC) erroneously approved the Stock Distribution Plan
(SDP) of the petitioner HLI and its 6,596 farmworker-beneficiaries (FWBs) through Resolution No.
89-12-2.

Despite my overall concurrence, I still differ with some of the ponencia’s rulings, particularly on the
legal basis of the consequences of PARC’s revocation of its previous SDP approval. These
consequences should be determined on the basis of clear applicable statutory provisions and the
legal principles discussed below.

The illegality of the SDP rendered it null and void from the beginning

On December 22, 2005, PARC revoked its approval of the SDP through Resolution No. 2005-31-01.
Although this revocation was made only in 2005, the effects should date back to 1989, considering
that the basis for the revocation was primarily the illegality of the SDP’s terms; the illegality rendered
the SDP null and void from the very beginning and was not cured by PARC’s erroneous approval.
Indeed, the illegality of the terms of the SDP was apparent from its face so that PARC’s approval
should not have been given from the start.

Specifically, the man-days scheme — the SDP’s method in determining the number of shares of
stock to which each FWB was entitled — ran counter to Section 4 of Administrative Order (AO) No.
10, Series of 1988 of the Department of Agrarian Reform (DAR); this AO required the distribution of
an equal number of shares of stock to each qualified beneficiary. Section 11 of the same AO
mandated that the stock distribution should also be implemented within three months from receipt of
the PARC’s approval of the SDP, and that the transfer of the shares of stock in the name of the
qualified beneficiaries should be recorded in the stock and transfer books within 60 days from the
implementation of the SDP. HLI’s SDP clearly and illegally provided for a 30-year distribution period.

Consequences of Illegality

A. Compulsory coverage of HLI agricultural land

In the absence of any valid stock distribution plan, HLI’s agricultural land became subject to
compulsory coverage by 1989 — the time HLI chose as its option in complying with RA No. 6657.
Section 31 of RA No. 6657 states without any ambiguity that:

SEC. 31. Corporate Landowners. – x x x

If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not
made or realized or the plan for such stock distribution approved by the PARC within the same
period, the agricultural land of the corporate owners or corporation shall be subject to the
compulsory coverage of this Act. [emphasis supplied]

HLI exercised the option granted under this provision by putting in place and securing the approval
of its SDP with its FWBs on November 21, 1989. Its exercise of the stock distribution scheme,
however, failed due primarily to its failure to secure PARC’s approval of the SDP. The legal
consequence, by the very terms of the above provision, is for the "agricultural land of the corporate
owners or corporation [to] be subject to the compulsory coverage of th[e] Act." Compulsory coverage
– the option not taken – means the actual transfer of the HLI land to the FWBs which should be
deemed to have taken place on November 21, 1989 when the first option HLI took failed. At that
point, the rights of ownership of HLI were transferred by law to the FWBs, who should be deemed
the owners of the HLI land (and who should enjoy the rights of ownership under Article 428 of the
Civil Code, subject only to the restrictions and limitations that the medium of their ownership RA No.
6657 imposes).

B. Payment of just compensation

B.1 "Taking" for purposes of just compensation

"Taking" for purposes of determining just compensation necessarily took place as of 1989 not only
because of the failure of the stock distribution option under Section 31 of RA No. 6657 (whose terms
require the inclusion of the agricultural land under the law’s compulsory coverage), but also because
HLI chose to comply with the government’s agrarian reform program through the SDP. The "taking"
involved here was a revolutionary form of expropriation for purposes of agrarian reform.
Expropriation under RA No. 6657 may take the form of either actual land distribution or stock
distribution. HLI was only allowed to use stock distribution because of RA No. 6657, and it lost this
privilege upon the invalid exercise of this option when its approval was cancelled. As I previously
posited –

[November 21, 1989] is the point in time when HLI complied with its obligation under the CARL as a
corporate landowner, through the stock distribution mode of compliance. This is the point, too, when
the parties themselves determined – albeit under a contract that is null and void, but within the
period of coverage that the CARL required and pursuant to the terms of what this law allowed – that
compliance with the CARL should take place. From the eminent domain perspective, this is the point
when the deemed "taking" of the land, for agrarian reform purposes, should have taken place if the
compulsory coverage and direct distribution of lands had been the compliance route taken. As the
chosen mode of compliance was declared a nullity, the alternative compulsory coverage (that the
SDOA was intended to replace) and the accompanying "taking" should thus be reckoned from
[November 21, 1989.]2 [emphasis supplied]

Since "taking" in law is deemed to have occurred on November 21, 1989, the just compensation due
to HLI for placing its agricultural lands under RA No. 6657’s compulsory coverage should be
computed as of this date.

B.2 Administrative and judicial determination of just compensation

The determination of the valuation of the HLI land as of 1989 is a matter that RA No. 6657 and its
applicable regulation leaves with the Land Bank of the Philippines (LBP), DAR, and, ultimately, the
RTC acting as Special Agrarian Court (SAC). The determination of just compensation is done at two
levels: administrative determination by LBP and DAR and judicial determination by the SAC. 3

Philippine Veterans Bank, Inc. v. Court of Appeals 4 outlines the procedure in determining just
compensation:

[T]he Land Bank of the Philippines is charged with the preliminary determination of the value of
lands placed under land reform program and the compensation to be paid for their taking. It initiates
the acquisition of agricultural lands by notifying the landowner of the government’s intention to
acquire his land and the valuation of the same as determined by the Land Bank. Within 30 days from
receipt of notice, the landowner shall inform the DAR of his acceptance or rejection of the offer. In
the event the landowner rejects the offer, a summary administrative proceeding is held by the
provincial (PARAD), the regional (RARAD) or the central (DARAB) adjudicator, as the case may be,
depending on the value of the land, for the purpose of determining the compensation for the land.
The landowner, the Land Bank, and other interested parties are then required to submit evidence as
to the just compensation for the land. The DAR adjudicator decides the case within 30 days after it is
submitted for decision. If the landowner finds the price unsatisfactory, he may bring the matter
directly to the appropriate Regional Trial Court.

The authority of LBP to make a preliminary valuation of the land is provided under Section 1 of
Executive Order (EO) No. 405 dated June 14, 1990, 5 which states:

SECTION 1. The Lank Bank of the Philippines shall be primarily responsible for the determination of
the land valuation and compensation for all private lands suitable for agriculture under either the
Voluntary Offer to Sell (VOS) or Compulsory Acquisition (CA) arrangement as governed by Republic
Act No. 6657. The Department of Agrarian Reform shall make use of the determination of the land
valuation and compensation by the Land Bank of the Philippines, in the performance of functions

After effecting the transfer of titles from the landowner to the Republic of the Philippines, the Land
Bank of the Philippines shall inform the Department of Agrarian Reform of such fact in order that the
latter may proceed with the distribution of the lands to the qualified agrarian reform beneficiaries
within the time specified by law.

After the preliminary determination of the value of the land, DAR then acquires administrative
jurisdiction to determine just compensation, pursuant to Rule II, Section 1 5(b) of the 2009 DARAB
Rules of Procedure. The process for the preliminary determination of just compensation is fully
discussed in Rule XIX of the 2009 DARAB Rules.

The judicial determination of just compensation commences when a petition for its determination is
filed with the SAC, which has the original and primary jurisdiction pursuant to Section 57 of RA No.
6657.6 Notably, no overlapping of jurisdiction between DARAB and SAC occurs because, as the
Court explained:

x x x primary jurisdiction is vested in the DAR to determine in a preliminary manner the just
compensation for the lands taken under the agrarian reform program, but such determination is
subject to challenge before the courts. The resolution of just compensation cases for the taking of
lands under agrarian reform is, after all, essentially a judicial function. 7

The above process is a matter of law and regulation that the courts, including the Supreme Court,
cannot deviate from. Hence, the referral of the valuation of the former HLI land under the parameters
outlined in the Court’s Resolution should initially be to DAR.

B.3 Resolution of non-just compensation issues

In the unique circumstances of this case, i.e. – a case that has caused unrest and even deaths;
which has been pending for administrative and judicial adjudication for at least 22 years; and which
has many parties raising multiple issues arising from 22 years of developments – a necessary
problem area on the matter of adjudication, is the procedure in handling what has become a
seeming multi-headed monster.

I believe that the only way left for us, on matters of procedures that this Court can act upon, is to
handle the case pro hac vice, i.e., with the use of a one-time non-recurring mode appropriate only to
the case, on the issues that this Court has jurisdiction to act upon pursuant to its powers "to
promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts…and legal assistance to the underprivileged." 8

Other than the issue of just compensation over which jurisdiction is a matter of law, this case faces
issues of compulsory coverage, land distribution, and restitution of amounts previously paid and of
homelots previously granted. All these are within the jurisdiction of this Court to adjudicate, save only
for the determination of facts not yet on record that this Court is not equipped to undertake because
of its limited trial capabilities.

In lieu of remanding all the unresolved factual issues to the judicial trial courts, we should
appropriately delegate the fact-finding to the DAR from which this case originated and which has
primary jurisdiction over the issue of compensation that the Court has left untouched. Consequently,
we should refer to DAR (1) all non-compensation issues that we have not resolved for determination,
and (2) all resolved issues for implementation. To state what is obvious in law, what we have
resolved here constitute the law of the case that none of the parties and no court or administrative
body can reopen, modify, alter, or amend.

As a matter of judicial policy9 and practice that is now established, the DAR should apply to the
fullest the mediation and conciliation efforts that the judiciary has found very effective. Save only for
the legal conclusions and final factual determinations the Court has reached (e.g., the decision to
distribute and the time of taking), all factual issues can be conciliated and agreed upon by mutual
and voluntary action of the parties.
B.4 No interest on just compensation during intervening period

No interest on the amount due as just compensation may be imposed. The Court awards interests
when there is delay in the payment of just compensation, not for reasons of the fact of delay, but for
the consequent income that the landowner should have received from the land had there been no
immediate "taking" by the government. 10 Apo Fruits Corporation, Inc. v. Land Bank of the
Philippines11 elaborated on this legal issue when it stated that –

x x x the just compensation is made available to the property owner so that he may derive income
from this compensation, in the same manner that he would have derived income from his
expropriated property. If full compensation is not paid for property taken, then the State must make
up for the shortfall in the earning potential immediately lost due to the taking, and the absence of
replacement property from which income can be derived; interest on the unpaid compensation
becomes due as compliance with the constitutional mandate on eminent domain and as a basic
measure of fairness.

In the context of this case, when the LBP took the petitioners’ landholding without the corresponding
full payment, it became liable to the petitioners for the income the landholding would have earned
had they not immediately been taken from the petitioners.

[T]he undisputed fact is that the petitioners were deprived of their lands on December 9, 1996 (when
the titles to their landholdings were cancelled and transferred to the Republic of the Philippines), and
received full payment of the principal amount due them only on May 9, 2008.

In the interim, they received no income from their landholdings because these landholdings had
been taken. Nor did they receive adequate income from what should replace the income potential of
their landholdings because the LBP refused to pay interest while withholding the full amount of the
principal of the just compensation due by claiming a grossly low valuation.

The above rules, however, do not apply to the present case, since HLI never lost possession and
control of the land; all the incomes that the land generated were appropriated by HLI; no loss of
income on the land therefore exists that should be compensated by the imposition of interest on just
compensation.12

For the same reason that I oppose the imposition of interest on the just compensation due to HLI, I
disagree with the view that "taking" should be pegged on January 6, 2006, when the Notice of
Compulsory Coverage was issued. Supposedly, the "rationale in pegging the period of computing
the value so close or near the present market value at the time of taking is to consider the
appreciation of the property, brought about by improvements in the property and other factors. x x x.
It is patently iniquitous for landowners to have their real properties subject of expropriation valued
several years or even decades behind." 13 To peg the taking in 1989 would allegedly make HLI suffer
the loss of its lands twice, since it will be paid its property at 1989 levels and any improvements it
made on the land, which appreciated its value, would be ignored.

Considering that HLI retained possession and control of the land, any benefit that could have been
derived from such possession and control would be for HLI’s account. In reality, therefore, HLI will
be reaping benefits twice if the taking is pegged in 2006.

B.5 Amount of just compensation paid to landowner does not necessarily affect the amortizations
due from FWBs
In this regard, I disagree with the ponencia’s reasoning for rejecting the view that "taking" occurred in
2006. The ponencia objects to a "taking" in 2006 because the FWBs will be made to pay higher
amortizations for the "lands that should have been given to them decades ago at a much lower
cost." The amount of amortization that the FWBs are required to pay the government is not
necessarily based on the cost of the land. DAR AO No. 6, Series of 1993 14 is the implementing rule
of Section 26 of RA No. 6657. 15 Its pertinent provisions state:

V. GENERAL GUIDELINES

A. As a general rule, land awarded pursuant to x x x R.A. 6657 shall be repaid by the
Agrarian Reform Beneficiary (ARB) to LANDBANK in thirty (30) annual amortizations at six
(6%) percent interest per annum. The annual amortization shall start one year from date of
Certificate of Landownership Award (CLOA) registration.

B. The payments by the ARBs for the first three (3) years shall be two and a half percent
(2.5%) of AGP [Annual Gross Production] and five percent (5.0%) of AGP for the fourth and
fifth years. To further make the payments affordable, the ARBs shall pay ten percent (10.0%)
of AGP or the regular amortization [refers to the annuity based on the cost of the land 16 and
permanent improvements at six percent (6%) interest rate per annum payable in 30 years],
whichever is lower, from the sixth (6th) to the thirtieth (30th) year.

Construing these provisions, the Court explained in Apo Fruits 17 that

the payments made by the farmers-beneficiaries to the LBP are primarily based on a fixed
percentage of their annual gross production or the value of the annual yield/produce of the
land awarded to them. The cost of the land will only be considered as the basis for the
payments made by the farmers-beneficiaries when this amount is lower than the amount
based on the annual gross production.

Hence, the amount due to HLI as just compensation for the land is not necessarily the basis
of the amount that the FWBs are required to pay the government pursuant to Section 26 of
RA No. 6657.

C. Determination of related claims arising from compulsory coverage of the land

Other consequences must necessarily flow from the compulsory coverage of HLI’s agricultural lands,
deemed to have taken place on November 21, 1989.

First. The transfer of the land to the FWBs after compulsory coverage does not signify that
the land was actually distributed to them or that that they immediately came into possession
of the land as of that date. The factual reality is too clear to need further discussion and
elaboration: no actual distribution actually took place and the present case is in fact with this
Court today – almost 22 years after distribution was due – because no actual distribution
took place.

Second. From the perspective of law, ownership and possession are two different concepts
and need not necessarily be fused with the same entity at the same time. Thus, while the
FWBs have collectively been the owners of the transferred property as of November 21,
1989, actual possession has not been with them either collectively or individually.
The reality is that possession from that time effectively rested with HLI, which continued to possess
and operate the land. In fact, HLI possessed the land in the concept of an owner from November 21,
1989 pursuant to the SDP, and was only divested of possession in this concept when PARC revoked
its approval of the SDP in 2005. But even then, the issue of the SDP’s legality (and the nature of
HLI’s possession) remained legally uncertain because the PARC revocation gave rise to the present
dispute which to date remains pending.

I conclude from all these developments that HLI, at the very least, has remained a possessor in
good faith during all these times and has built and introduced improvements on the land in good
faith. Its possession proceeded from its belief that it validly retained ownership of the land after
choosing to adopt stock distribution option as its mode of compliance with the agrarian reform
program, which option was approved (erroneously, as discussed) by PARC. Its possession, although
wrongful, was in good faith. Under the Civil Code, a possessor in good faith is one who is not aware
that there exists in his title or mode of acquisition any flaw that invalidates it. 18

The relationship between the owner of the land (the FWBs starting November 21, 1989) and the
builder in good faith (HLI) is governed by Article 448 of the Civil Code, which reads:

Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall
have the right to appropriate as his own the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof.

This provision is "manifestly intended to apply only to a case where one builds, plants, or sows on
land in which he believes himself to have a claim of title." 19 Generally, the owner of the land has the
option of either (a) choosing to appropriate the works after payment of indemnity or (b) obliging the
builder in good faith to pay the price of the land.

Considering that the HLI land is, by law, subject to compulsory acquisition, the FWBs can no longer
now exercise the option of obliging HLI to pay for the price of the land, and are thus left only with the
first option of appropriating the works upon payment of indemnity pursuant to Articles 546 and 548.
These provisions state:

Article 546. Necessary expenses shall be refunded to every possessor; but only the possessor in
good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same right of
retention, the person who has defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the thing may have acquired by
reason thereof.

xxxx

Article 548. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in
good faith; but he may remove the ornaments with which he has embellished the principal thing if it
suffers no injury thereby, and if his successor in the possession does not prefer to refund the amount
expended.
The necessary expenses are those made for the proper preservation of the land and the
improvements introduced, or those without expenses without which the land and the improvements
would have been lost.20 These expenses include the taxes paid on the land and all other charges on
the land.21 Useful expenses, on the other hand, are the expenses incurred to give greater utility or
productivity to the land and its improvements. 22 Among others, these include the cost of roads,
drainage, lighting, and other fixtures that HLI introduced into the land that increased its value and its
eventual purchase price to third parties. Pursuant to Article 448 of the Civil Code above, all these
improvements HLI can retain until it is reimbursed. Under the unique facts of this case, this
indemnity should be paid together with the payment for just compensation and should be included in
the total reckoning of what the parties owe one another.

A twist in this case is the conveyance to third parties (LIPCO/RCBC, the government for SCTEX,
and, if proven to be a valid transfer, to LRC), of part of the converted agricultural land by HLI while it
was still in possession in the concept of an owner. As already held by the majority in its previous
ruling on this case, the alienation to the third parties is valid as the latter were purchasers for value in
good faith; these converted agricultural lands are excluded from the land reform coverage and
distribution because of the intervening valid transfer. One seeming problem this conclusion,
however, leaves is on the question of the purchase price – who should now get the purchase price in
light of the change of the parties’ circumstances under the revoked SDP?

I take the view that the rule that prevailed with respect to the land and the improvements should still
prevail. Thus, the third parties’ purchase price should be credited to the FWBs as owners. The value
of the improvements introduced by HLI on these lands, which led to the increase in the price of the
land and its eventual sale to LIPCO/RCBC and (if proven to be valid) to LRC, should be subject to
the builder in good faith provision of Article 448 of the Civil Code and the payment of indemnity to
HLI computed under Articles 546 and 548 of the same Code. This would be true whether the sale
was voluntary (as in the case of the sale to LIPCO/RCBC/LRC) or involuntary (as in the exercise of
the power of eminent domain by government in securing the land for the SCTEX). In either case, the
cost of the necessary and useful expenses that gave rise to the increase in value of the land should
be reimbursed to HLI as indemnity.

In simple mathematical terms, the computation of the amounts due the parties should run:

Amount Accruing = Purchase Price – the amounts due to HLI

to FWBs by 3rd Parties (the amount of just
compensation FWBs should pay HLI + the indemnity due
to HLI under Articles 546 and 548, etc.)

D. With the SDP declared revoked and illegal, mutual restitution should take place.

The consequence of the nullification of the SDP’s approval should have properly been the restitution
of what the parties received under the disapproved SDP; the parties must revert back to their
respective situations prior to the execution of the SDP and must return whatever they received from
each other under the SDP that, in legal contemplation, never took place. 23 The details of these
restitutions are more fully discussed below.

D.1 Mutual restitution must be in accordance with law

In ruling on the present motion, the ponencia has apparently abandoned the view that the SDP,
while illegal, should still be accorded recognition as a reality that was operative from the time it was
put in place up to the time the PARC revocation. This change cannot be wrong as the "operative
fact" doctrine applies only in considering the effects of the declaration unconstitutionality of, among
others, executive acts that have the force and effect of law, i.e., those issued pursuant to a grant of
quasi-legislative power. The doctrine does not apply to the exercise of quasi-adjudicatory power that
PARC exercised as part of its mandate under RA No. 6657, which required its determination of facts
and the applicable law in the course of implementing Section 31 of the law. Thus, the SDP,
erroneously approved by PARC through Resolution No. 89-12-2, cannot be the basis for the grant of
benefits to the FWBs as the approval was not in the exercise of quasi-legislative powers.

In law, nullification of agreements – as we now undertake in our present ruling – dictates that the
parties should be restored to their original state prior to the execution of the nullified agreement. This
is the command of Articles 1409, 1411 and 1412 of the Civil Code and it supporting jurisprudence
that this Court should follow. 24 This means that (1) the 3% production share; (2) the 3% share I the
proceeds of the sale of the lands; and (3) the homelots grante in relation with the revoked SDP
should all be returned by the FWBs to HLI, subject to the conditions I discuss below. Hence, mutual
restitution (instead of the rentention that the ponencia espouses) should take place.

D.2. Disposition of homelots

With the failure of the SDP, the question of how homelots should be handled becomes a ticklish
issue, involving as it does the home where the family lives. It is in this spirit that the Court should
address issue, and in the spirit of fairness that should attend all our dispositions in this case.

An undisputed fact is that the homelots do not form part of the 4,915 hectares covered by the SDP,
and no obligation under RA No. 6657 exists for HLI to provide homelots. HLI – through
TADECO,25 however, made the grant of homelots apparently as a consideration for the adoption of
the SDP that does not now legally exits. From this view, the homelots may be said to have in fact
been donated by HLI so that these should not be taken back.

In my view, the grant of the homelots outside of the requirements of RA No. 6657 cannot be denied.
In fairness, however, to HLI who made the grant in the spirit of and pursuant to the SDP, the parties
cannot just be left as they are. The way out of this bind is to consider the homelots already granted
to both FWBs and non-FWBs as compulsory acquisitions subject to the payment of just
compensation in the course of the exercise of the power of eminent domain. The valuation of just
compensation for these homelots, therefore, should be an issue to be brought to the DAR for its
determination together with all other issue submitted to that forum.

For the FWBs, the just compensation for these homelots shall be an item considered in the
adjustment of the claims of HLI and the FWBs against one another. For non-FWBs who now enjoy
their homelots, the matter should be submitted to DAR and to the LBP for their determination and
action as these homelots are or were part of an agricultural estate that is subject to land reform.

D.3 Other restitutions

As a consequence of the nullification of the SDP, the FWBs should return the following benefits to
HLI:

1. the 59 million shares of stock of HLI;

2. the P150 million representing the 3% gross sales of the production of the agricultural
lands; and
 3. the P37.5 million representing the 3% proceeds from the sale of the 500 hectares of
agricultural land (including the amount received as just compensation for the expropriation
by the government of the land used for SCTEX).

The 3% proceeds from the voluntary and involuntary sale of the agricultural land shall be offset
against the value received by HLI as consideration for the sale, which should be turned over to the
FWBs who are considered the owners of the land as of 1989. The taxes and expenses related to the
transfer of titles should likewise be deducted as the same amounts would be incurred regardless of
the seller (HLI or the FWBs). As earlier discussed, adjustments should also be made to allow for the
payment of indemnity for the improvements HLI introduced on the land, pursuant to Articles 448,
546, and 548 of the Civil Code. As discussed above, this task has been delegated by the Court for
factual determination to the DAR.

To summarize, the purchase price received by HLI for the sale of portions of the land should be
turned over to the FWBs less (1) the 3% proceeds from the sale already given to the FWBs, (2) the
taxes and expenses related to the transfer of titles, and (3) the value of the improvements HLI
introduced according to Articles 448, 546, and 548 of the Civil Code.

To be excluded from the benefits that should be returned to HLI are the wages and benefits that both
the FWBs and non-FWBs received as employees of HLI. They are entitled to retain these as fruits of
their labor; they received these as compensation earned for services rendered.

Conclusions and Dispositions

For greater clarity, I submit the following conclusions and dispositions based on my foregoing
discussions.

1. Compulsory Coverage. The entire 4,915 hectares of land is deemed placed under
COMPULSORY COVERAGE of the Comprehensive Agrarian Reform Law AS OF
NOVEMBER 21, 1989, and the 6,296 qualified FWBs shall be deemed to have collectively
acquired ownership rights over the land as of this date. These new owners shall enjoy all the
attributes of ownership pursuant to Article 428 of the Civil Code, subject only to legal
limitations. The principal limitations are those imposed under RA No. 6657 that governs
agrarian reform.

2. Distribution. The DAR shall DISTRIBUTE the land among the 6,296 qualified FWBs
pursuant to the terms of RA No. 6657, EXCLUDING:

a. the 300 hectares of converted land acquired by LIPCO/RCBC; and

b. the 80 hectares of land expropriated by the government for the SCTEX.

The LRC, which never entered its appearance in this case, shall be entitled to prove before
the DAR that a valid transfer of the 200 hectares of converted land in its favor took place. If
the DAR finds that LRC is a purchaser in good faith and for value, the 200 hectares of
converted land shall likewise be excluded from the land to be distributed among qualified
FWBs.

3. Just Compensation. The DAR is likewise ORDERED to determine the amount of just
compensation that HLI is entitled for the entire 4,915.75 hectares of agricultural land, based
on its value at the time of taking – November 21, 1989; no interest shall be imposed on this
 amount as discussed above. The amount of just compensation shall include the indemnities
due to HLI under Article 546 and 548 of the Civil Code for the useful and necessary
expenses incurred for the lands under compulsory coverage.

The DAR is also ORDERED to determine the amount just compensation on the homelots
that will be retained by the FWBs, based on their value at the time of taking – November 21,
1989.

4. Other Payments. HLI shall REMIT to the FWBs the purchase price of the:

a. 300 hectares of converted land conveyed to LIPCO/RCBC;

b. 80 hectares of land taken over by government; and

c. if DAR finds that there was a valid transfer, 200 hectares of converted land
conveyed to LRC.

The amount of taxes and expenses related to the sale shall be deducted from the purchase
price. The indemnities due to HLI under Article 546 and 548 of the Civil Code representing
the useful and necessary expenses incurred for the lands and improvements conveyed to
third parties shall also be deducted from the purchase price. The amounts deducted shall be
retained by HLI.

5. Restituted Amounts and Benefits. The FWBs shall likewise return to HLI the following
amounts paid pursuant to the failed SDP:

a. the ₱37.5 million, representing the 3% share in the sale of portions of the land;
and

b. the ₱150 million, representing the 3% production share;

The value of the 3% share in the proceeds of the sale of the lands and 3% production share
shall depend on the amount actually received by the FWBs, to be determined by the DAR,
and not the amount HLI claims that it gave to the FWBs. The actual amounts of received by
the FWBs may be off-set against the purchase price of the sale of the lands that HLI must
turn over to the FWBs.

All the FWBs shall return to HLI the 59 million shares of stock. They are, however, entitled to
retain all the salaries, wages and other benefits received as employees of HLI.

6. Conciliation and Set-Off. The DAR shall exercise its authority in the determination of just
compensation as mandated by law, and the authority delegated by the Supreme Court to
undertake the determination of facts and the adjustment of the parties’ claims other than just
compensation, including matters of set-off of the parties’ claims and the possibility of
settlement through mediation and conciliation. The DAR, hopefully, shall seriously attempt at
their level for mediation and conciliation for, ultimately, the agreement between and among
the parties will best, in the quickest time, resolve the case.

The DAR shall undertake its delegated authority on matters other than just compensation and report
its results to this Court for its final disposition within one (1) year from this referral. This ruling is
immediately final and no further pleadings shall be entertained.
ARTURO D. BRION
Associate Justice

Footnotes

1
 Comprehensive Agrarian Reform Law of 1988.

2
 J. Brion, Separate Concurring and Dissenting Opinion to the Resolution dated November
22, 2011.

3
 Philippine Veterans Bank v. Court of Appeals, G.R. No. 132767, January 18, 2000.

4
 Ibid.

5
 Entitled Vesting in the Land Bank of the Philippines the Primary Responsibility to Determine
the Land Valuation and Compensation for All Lands Covered Under Republic Act No. 6657,
Known as the Comprehensive Agrarian Reform Law of 1988.

6
 Section 57. Special Jurisdiction. – The Special Agrarian Court shall have original and
exclusive jurisdiction over all petitions for the determination of just compensation to
landowners, and the prosecution of all criminal offenses under this Act. x x x

The Special Agrarian Courts shall decide all appropriate cases under their special
jurisdiction within thirty (30) days from submission of the case for decision.

7
 Philippine Veterans Bank v. Court of Appeals, supra note 3.

8
 CONSTITUTION, Article VIII, Section 5(5).

9
 See RA No. 9285 or the Alternative Dispute Resolution Act of 2004, which recognized the
authority of the Supreme Court to adopt "any Alternative Dispute Resolution system, such as
mediation, conciliation, arbitration, or any combination thereof as a means of achieving
speedy and efficient means of resolving cases pending before all courts in the Philippines
which shall be governed by such rules as the Supreme Court may approve from time to
time."

In this line, the Supreme Court has promulgated various rules on mediation and
conciliation including: Amended Guidelines for the Implementation of
Mediation/Conciliation Proceedings in the Pilot Areas of Mandaluyong City and
Valenzuela City (November 16. 1999); A.O. No. 21-2001 re: Participation in the
Amicable Settlement Weeks; A.O. No. 24-2001 re: Inclusion of Additional
Participants in the Amicable Settlement Weeks (March 5, 2001); A.M. No. 01-10-5-
SC-PHILJA and OCA Circular No. 82-2001 re: Designating the Philippine Judicial
Academy as the Component Unit of the Supreme Court of the Court-Referred, Court-
Related Mediation Cases and Other Alternative Dispute Resolution Mechanisms, and
Establishing the Philippine Mediation Center for the Purpose; OCA Circular No. 2-
2002 re Memorandum on Policy Guidelines between OCA and IBP; Administrative
Circular No. 20-2002 re Monthly Inventory and Referral of Cases for Mediation; and
 A.M. No. 11-1-16-SC-PHILJA re: Consolidated and Revised Guidelines to Implement
the Expanded Coverage.

 See Apo Fruits Corporation, Inc. v. Land Bank of the Philippines, G.R. No. 164195,
10

October 12, 2010. Also, Land Bank of the Philippines v. Soriano, G.R. Nos. 180772 and
180776, May 6, 2010, where the Court declared that

The concept of just compensation embraces not only the correct determination of the
amount to be paid to the owners of the land, but also payment within a reasonable
time from its taking. Without prompt payment, compensation cannot be considered
"just" inasmuch as the property owner is made to suffer the consequences of being
immediately deprived of his land while being made to wait for a decade or more
before actually receiving the amount necessary to cope with his loss.

11
 Ibid.

 J. Brion, Separate Concurring and Dissenting Opinion to the Resolution dated November
12

22, 2011.

13
 J. Sereno, Dissenting Opinion to the Resolution dated November 22, 2011.

 Revised Implementing Guidelines and Procedures Governing Payment of Land

14

Amortization by Agrarian Reform Beneficiaries.

15
 SEC. 26. Payment by Beneficiaries. - Lands awarded pursuant to this Act shall be paid for
by the beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest
per annum. The payments for the firs three (3) years after the award may be at reduced
amounts as established by the PARC : Provided, That the first five (5) annual payments may
not be more than five percent (5%) of the value of the annual gross production is paid as
established by the DAR. Should the scheduled annual payments after the fifth year exceed
ten percent (10) of the annual gross production and the failure to produce accordingly is not
due to the beneficiary's fault, the LBP may reduce the interest rate or reduce the principal
obligation to make the payment affordable.

The LBP shall have a lien by way of mortgage on the land awarded to beneficiary
and this mortgage may be foreclosed by the LBP for non-payment of an aggregate of
three (3) annual amortizations. The LBP shall advise the DAR of such proceedings
and the latter shall subsequently award the forfeited landholding to other qualified
beneficiaries. A beneficiary whose land as provided herein has been foreclosed shall
thereafter be permanently disqualified from becoming a beneficiary under this Act.

16
 Defined in the same AO as "the amount paid or approved for payment to the landowner for
the specific parcel of land and permanent crops including improvements thereon acquired
and awarded to ARBs."

17
 G.R. No. 164195, April 5, 2011.

18
 CIVIL CODE, Article 526.

 Arturo Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines,
19

Volume Two (1992 ed.), p. 111, citing Floreza v. Evangelista, 96 SCRA 130.
  A. Tolentino, supra note 18, at 292, citing 4 Manresa 270-271; Case, et al. v. Cruz, (S.C.),
20

50 Official Gazette 618, Calang, et al. v. Santos, et al. (C.A.), 50 Official Gazette 1446.

21
 Id. at 293, citing 4 Manresa 271-272.

22
 Id. at 294, citing 2 Oyuelos 298.

 A. Tolentino, supra note 18, at 632, citing Perez Gonzales & Alguer; 1-II Enneccerus, Kipp
23

& Wolf 364-366; 3 Von Tuhr 311; 3 Fabres 231.

24
 Ibid.

 TADECO is the owner of the 6,443 hectare land; 4,916 hectares of this constitutes the
25

agricultural land that TADECO turned over to HLI, the spin-off corporation it created to
comply with Section 31 of RA No. 6657. In return, TADECO received shares of stock of HLI.
The Stock Distribution Agreement (which became the basis of the SDP) executed by
TADEO, HLI and the FWBs provided that the FWBs are entitled to residential or homelots of
not more than 240 sqm. each, see Decision of July 5, 2011, pp. 9-14.

The Lawphil Project - Arellano Law Foundation

CONCURRING AND DISSENTING OPINION

BERSAMIN, J.:

For resolution are the Motion to Clarify and Reconsider Resolution of November 22, 2011 of
petitioner Hacienda Luisita, Inc. (HLI) and the Motion for Reconsideration/Clarification dated
December 9, 2011 of respondents Noel Mallari, et al.

HLI contends in its Motion to Clarify and Reconsider Resolution of November 22, 2011 as follows:

WITH DUE RESPECT, THE HONORABLE COURT ERRED IN RULING THAT IN DETERMINING
THE JUST COMPENSATION, THE DATE OF "TAKING" IS NOVEMBER 21, 1989, WHEN PARC
APPROVED HLI’s SDP "IN VIEW OF THE FACT THAT THIS IS THE TIME THAT THE FWBs
WERE CONSIDERED TO OWN AND POSSESS THE AGRICULTURAL LANDS IN HACIENDA
LUISITA" because:

1. The SDP is precisely a modality which the agrarian law gives the landowner as alternative
to compulsory coverage in which case, therefore, the FWBs cannot be considered as owners
and possessors of the agricultural lands at the time the SDP was approved by PARC;

2. The approval of the SDP cannot be akin to a Notice of Coverage in compulsory coverage
or acquisition because SDP and compulsory coverage are two different modalities with
independent and separate rules and mechanisms;
 3. The Notice of Coverage of January 02, 2006 may, at the very least, be considered as the
time when the FWBs can be considered to own and possess the agricultural lands of
Hacienda Luisita because that is only the time when Hacienda Luisita was placed under
compulsory acquisition in view of failure of HLI to perform certain obligations of the SDP, or
SDOA;

4. Indeed, the immutable rule and the unbending jurisprudence is that "taking" takes place
when the owner is actually deprived or dispossessed of his property;

5. To insist that the "taking" is when the SDP was approved by PARC on November 21, 1989
and that the same be considered as the reckoning period to determine the just compensation
is deprivation of landowner’s property without due process of law;

6. HLI should be entitled to payment of interest on the just compensation.

WITH DUE RESPECT, THE HONORABLE COURT ERRED WHEN IT REVERSED ITS DECISION
GIVING THE FWBs THE OPTION TO REMAIN AS HLI STOCKHOLDERS OR NOT, because:

1. It is an exercise of a right of the FWB which the Honorable Court has declared in its
Decision and even in its Resolution and that has to be respected and implemented;

2. Neither the Constitution nor the CARL require[s] that the FWBs should have control over
the agricultural lands;

3. The option has not been shown to be detrimental but instead beneficial to the FWBs as
found by the Honorable Court.

WITH DUE RESPECT, THE HONORABLE COURT ERRED IN RULING THAT THE PROCEEDS
FROM THE SALES OF THE 500-HECTARE CONVERTED LOT AND THE 80.51-HECTARE
SCTEX CANNOT BE RETAINED BY HLI BUT RETURNED TO THE FWBs AS BY SUCH MANNER;
HLI IS USING THE CORPORATION CODE TO AVOID ITS LIABILITY TO THE FWBs FOR THE
PRICE IT RECEIVED FROM THE SALES, because –

1. The proceeds of the sales belong to the corporation and not to either HLI/Tadeco or the
FWBs, both of which are stockholders entitled to the earnings of the corporation and to the
net assets upon liquidation;

2. To allow the return of the proceeds of the sales to FWBs is to impose all liabilities of the
corporation on HLI/Tadeco which is unfair and violative of the Corporation Code.

For their part, respondents Mallari, et al. submitted in their Motion for Reconsideration/Clarification
that:

1. Republic Act No. 6657 or the Comprehensive Agrarian Reform Law does not provide that
the FWBs who opt for stock distribution option should retain majority shareholding of the
company to which the agricultural land was given.
 2. If the November 22, 2011 decision of this Honorable Court ordering land distribution would
be followed, this would cause more harm than good to the lives of those people living in the
hacienda, and more particularly to the welfare of the FWBs.

3. On the conclusion by this Honorable Court that the operative fact doctrine is applicable to
the case at bar, then FWBs who merely relied on the PARC approval should not be
prejudiced by its subsequent nullification.

4. Those who choose land should return whatever they got from the SDOA and turn over the
same to HLI for use in the operations of the company, which in turn will redound to the
benefit of those who will opt to stay with the SDO.

5. For those who choose land, the time of taking for purposes of just compensation should
be at the time HLI was dispossessed of control over the property, and that payment by of the
land should be turned over to HLI for the benefit and use of the company’s operations that
will, in turn, redound to the benefit of FWBs who will opt to stay with the company.

Recommendations

I readily CONCUR with the Majority in subjecting to compulsory land distribution the lands of HLI
affected by the discredited Stock Distribution Plan (SDP), as disposed in the resolution promulgated
on November 22, 2011.

However, I humbly REITERATE my DISSENT on two aspects of the decision of July 5, 2011 and the
resolution of November 22, 2011. I MAINTAIN that if the constitutional guarantee of just
compensation is to be fulfilled with justice and fairness:

(a) The Department of Agrarian Reform (DAR) and Land Bank of the Philippines (Land
Bank), initially, and the Regional Trial Court as Special Agrarian Court (RTC-SAC),
ultimately, should determine the reckoning date of taking as an integral component of their
statutory responsibility to determine just compensation under Republic Act No. 6675
(Comprehensive Agrarian Reform Law of 1988, or CARL); and

(b) HLI should be compensated as the landowner for the fair market value of the homelots
granted to the farmworker-beneficiaries (FWBs) under the discredited SDP.

I humbly CONTEND that the Court will likely overstep its jurisdiction if it pegs the time of taking at a
definite date (whether November 21, 1989, or January 2, 2006, or any other date) because it thereby
pre-empts the RTC-SAC from doing so. I must NOTE that the determination of just compensation
(which is always reckoned from the time of taking) is a factual matter expressly within the original
and exclusive jurisdiction of the RTC-SAC; and that the sua sponte pegging by the Court of the time
of taking (even without the parties having properly raised and argued the matter) unduly interferes
with the parties’ right of presentation and autonomy.

Submissions & Explanations

A
 For a proper perspective, let me remind that the exercise by the State of its inherent power of
eminent domain comes in two stages. The Court has characterized the dual stages in Municipality of
Biñan v. Garcia1 in the following manner:

There are two (2) stages in every action of expropriation. The first is concerned with the
determination of the authority of the plaintiff to exercise the power of eminent domain and the
propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of
dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the date of the filing of the complaint." xxx

The second phase of the eminent domain action is concerned with the determination by the court of
"the just compensation for the property sought to be taken." xxx.2

The first stage in expropriation relates to the determination of the validity of the expropriation. At this
stage, the trial court resolves questions, like whether the expropriator has the power of eminent
domain, whether the use of the property is public, whether the taking is necessary, and, should there
be conditions precedent for the exercise of the power, whether they have been complied with. In the
second stage, the trial court is called upon to determine the just compensation, taking into
consideration all the factors of just compensation (including whether interest should be paid on the
amount of just compensation). Rule 67 of the Rules of Court generally delineates the procedure
followed in both stages. Although expropriation may be either judicial or legislative, the dual stages
apply to both, for there is "no point in distinguishing between judicial and legislative expropriation as
far as the two stages mentioned above are concerned." 3

The taking of property pursuant to the CARL is an exercise of the power of eminent domain by the
State. It is a revolutionary expropriation that covers all private agricultural lands that exceeded the
maximum retention limits reserved to their owners. This the Court has fittingly pointed out in
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform: 4

xxx [W]e do not deal here with the traditional exercise of the power of eminent domain. This is not an
ordinary expropriation where only a specific property of relatively limited area is sought to be taken
by the State from its owner for a specific and perhaps local purpose. What we deal with here is a
revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands wherever found and of whatever kind
as long as they are in excess of the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular community or of a small segment of
the population but of the entire Filipino nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country
but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the vision
and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in
this program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling
life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be
forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms,
calling for "a just distribution" among the farmers of lands that have heretofore been the prison of
their dreams but can now become the key at last to their deliverance.

Its revolutionary character notwithstanding, expropriation under the CARL still goes through the two
stages. Section 16 of the CARL, which provides the procedure for private agricultural land
acquisition, makes this explicit enough, thus:
Section 16. Procedure for Acquisition of Private Lands. - For purposes of acquisition of private lands,
the following procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send
its notice to acquire the land to the owners thereof, by personal delivery or registered mail,
and post the same in a conspicuous place in the municipal building and barangay hall of the
place where the property is located. Said notice shall contain the offer of the DAR to pay a
corresponding value in accordance with the valuation set forth in Sections 17, 18, and other
pertinent provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or
registered mail, the landowner, his administrator or representative shall inform the DAR of
his acceptance or rejection of the offer.

(c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the
purchase price of the land within thirty (30) days after he executes and delivers a deed of
transfer in favor of the Government and surrenders the Certificate of Title and other
muniments of title.

(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative
proceedings to determine the compensation of the land by requiring the landowner, the LBP
and other interested parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of the notice. After the expiration of the above period,
the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.

(e) Upon receipt by the landowner of the corresponding payment or in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the
DAR of the compensation in cash or LBP bonds in accordance with this Act, the DAR shall
take immediate possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.

(f) Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.

For sure, the expropriation under the CARL is not an exclusively judicial process. The first stage of
expropriation commences upon the issuance of the notice of coverage, and is initially dealt with
administratively by the DAR pursuant to Section 50 of the CARL, 5 subject to a judicial review in
accordance with Section 54 of the CARL.6 The DAR, through the Regional Director, has jurisdiction
over all agrarian law implementation cases, including protests or petitions to lift coverage. 7 In
exercising jurisdiction over such cases, the Regional Director passes upon and resolves various
issues, including whether the land is subject to or exempt from CARP coverage, and whether the
required notices of coverage have been served on the landowners.

Section 4, Article XIII of the 1987 Constitution provides:

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers who are landless, to own directly or collectively the lands they till
or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural lands, subject to
such priorities and reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-sharing.

The Constitution itself has thereby settled the requirement of public use and the necessity for the
expropriation, which are the proper subjects of the first stage of expropriation proceedings. In its
1987 pronouncement in Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform,8 the Court declared so:

As earlier observed, the requirement of public use has already been settled for us by the
Constitution itself. No less than the 1987 Charter calls for agrarian reform, which is the reason why
private agricultural lands are to be taken from their owners, subject to the prescribed maximum
retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an
elaboration of the constitutional injunction that the State adopt the necessary measures "to
encourage and undertake the just distribution of all agricultural lands to enable farmers who are
landless to own directly or collectively the lands they till." That public use, as pronounced by the
fundamental law itself, must be binding on us.

The second stage is devoted to the determination of just compensation. This stage, as essential as
the first, is always judicial in nature. According to Export Processing Zone Authority v. Dulay: 9

The determination of "just compensation" in eminent domain cases is a judicial function. The
executive department or legislature may make the initial determinations but when a party claims a
violation of the guarantee in the Bill of Rights that private property may not be taken for public use
without just compensation, no statute, decree, or executive order can mandate its own determination
shall prevail over the court's findings. Much less can the courts be precluded from looking into the
"just-ness" of the decreed compensation.

B.

HLI assailed the resolution of November 22, 2011 for reckoning the time of taking from November
21, 1989, the date when the PARC approved HLI’s SDP, because there was yet no land transfer at
that time. It insists that, at the very least, January 2, 2006, the date when the notice of coverage
issued, should be considered as the time of taking.

In the alternative, HLI manifested its willingness to abide by my Concurring and Dissenting Opinion
of November 22, 2011, whereby I respectfully recommended leaving the issue of the time of taking
for the RTC-SAC to decide as an adjunct of the determination of the just compensation.

Respondents Noel Mallari, et al. agreed that the RTC-SAC should decide the issue of the time of
taking.

To recall, I wrote in my Concurring and Dissenting Opinion of November 22, 2011, as follows:

The determination of when the taking occurred is an integral and vital part of the determination and
computation of just compensation. The nature and character of land at the time of its taking are the
principal criteria to determine just compensation to the landowner. In National Power Corporation v.
Court of Appeals, the Court emphasized the importance of the time of taking in fixing the amount of
just compensation, thus:
xxx [T]he Court xxx invariably held that the time of taking is the critical date in determining lawful or
just compensation. Justifying this stance, Mr. Justice (later Chief Justice) Enrique Fernando,
speaking for the Court in Municipality of La Carlota vs. The Spouses Felicidad Baltazar and Vicente
Gan, said, "xxx the owner as is the constitutional intent, is paid what he is entitled to according to the
value of the property so devoted to public use as of the date of the taking. From that time, he had
been deprived thereof. He had no choice but to submit. He is not, however, to be despoiled of such
a right. No less than the fundamental law guarantees just compensation. It would be an injustice to
him certainly if from such a period, he could not recover the value of what was lost. There could be
on the other hand, injustice to the expropriator if by a delay in the collection, the increment in price
would accrue to the owner. The doctrine to which this Court has been committed is intended
precisely to avoid either contingency fraught with unfairness."

It is my humble submission, therefore, that the factual issue of when the taking had taken place as to
the affected agricultural lands should not be separated from the determination of just compensation
by DAR, Land Bank and SAC. Accordingly, I urge that the Court should leave the matter of the
reckoning date to be hereafter determined by the DAR and Land Bank pursuant to Section 18 of
Republic Act No. 6657.10 Should the parties disagree thereon, the proper SAC will then resolve their
disagreement as an integral part of a petition for determination of just compensation made pursuant
to Section 57 of Republic Act No. 6657 xxx.

I MAINTAIN my foregoing position.

Just compensation is the full and fair equivalent of the property the expropriator takes from its owner.
The measure for computing just compensation is not the taker’s gain, but the owner’s loss. 11 The
constitutional policy underlying the requirement for the payment of just compensation is to make the
landowner whole after the State has taken his property. 12 The word just intensifies the word
compensation to convey the idea that the equivalent to be rendered for the property taken shall be
real, substantial, full and ample.13 For the landowner of expropriated property to be fully
compensated, the State must put him in as good a position pecuniarily as if the use of the property
had not been taken away.14 Accordingly, just compensation is principally based on the fair market
value, which is "that sum of money which a person desirous but not compelled to buy, and an owner
willing but not compelled to sell, would agree on as a price to be given and received therefore." 15

The price or value of the land and its character at the time it is taken by the Government are the
primordial criteria for determining just compensation.16 Section 17 of the CARL enumerates other
factors to be considered, viz:

Section 17. Determination of Just Compensation - In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the
sworn valuation by the owner, the tax declarations, and assessments made by the government
assessors shall be considered. The social and economic benefits contributed by the farmers and the
farmworkers and by the Government to the property as well as the non-payment of taxes or loans
secured from any government financing institution on the said land shall be considered as additional
factors to determine its valuation.

As to taking, the Court has set a number of circumstances that must be established before property
is said to be taken for a public use, to wit:

A number of circumstances must be present in "taking" of property for purposes of eminent domain:
(1) the expropriator must enter a private property; (2) the entrance into private property must be for
more than a momentary period; (3) the entry into the property should be under warrant or color of
legal authority; (4) the property must be devoted to a public use or otherwise informally appropriated
or injuriously affected; and (5) the utilization of the property for public use must be in such a way to
oust the owner and deprive him of all beneficial enjoyment of the property. 17

The prescription of such number of circumstances means that compensable taking is not a simple
concept easy to ascertain. Certainly, evidence from the parties is needed to concretize the concept.
Thus, establishing the time of taking demands a judicial trial in which both the owner and the
expropriator are afforded the fullest opportunity to prove either when the owner was actually
deprived or dispossessed of the property, or when a practical destruction or a material impairment of
the value of the property happened, or when the owner was deprived of the ordinary use of the
property. Not being a trier of facts, the Court has no capacity to render a valid finding upon the time
of taking.

In contrast, not only is the RTC-SAC a trier of facts but it is also vested with the original and
exclusive jurisdiction to receive the parties’ evidence on the valuation of the affected property
pursuant to Section 57 of the CARL, viz:

Section 57. Special Jurisdiction. — The Special Agrarian Courts shall have original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners, and the
prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings
before the Special Agrarian Courts, unless modified by this Act.

The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within
thirty (30) days from submission of the case for decision.

Original jurisdiction means jurisdiction to take cognizance of a cause at its inception, try it and pass
judgment upon the law and facts,18 and concerns the right to hear a cause and to make an original
determination of the issues from the evidence as submitted directly by the witnesses, or of the law
as presented, uninfluenced or unconcerned by any prior determination, or the action of any other
court juridically determining the same controversy.19 Needless to point out, that jurisdiction of the
RTC-SAC is also exclusive of all other courts, including this Court.

Although November 21, 1989 was the date when the affected landholdings of HLI came under the
SDP, I see no practical justification why the Court should peg that date as the time of taking. As I
see it, HLI/TADECO as landowner was not deprived of its property on that date. Nor was its property
destroyed or materially impaired then. Instead, what occurred on that date was the fusion of
HLI/TADECO as owner, on the one hand, and the FWBs as the tenant-farmers, on the other hand,
into one corporate entity in relation to the land subject of the SDP, a fusion that did not result into or
cause the deprivation of HLI of its land.

It is significant that the parties did not raise the time of taking as an issue in their pleadings. The
petition for certiorari and prohibition assailed only the PARC’s revocation of the SDP and the
resulting placement of the lands subject of the SDP under compulsory land acquisition of the CARP
on the ground that the PARC had no authority to revoke the SDP. Consequently, the time of taking
was neither relevant to the objective of the petition, nor necessary to the determination of the issues
the petition raised. In fact, the decision promulgated on July 5, 2011 itself expressly limited the
issues only to: – "(1) matters of standing; (2) the constitutionality of Sec. 31 of RA 6657; (3) the
jurisdiction of PARC to recall or revoke HLI's SDP; (4) the validity or propriety of such recall or
revocatory action; and (5) corollary to (4), the validity of the terms and conditions of the SDP, as
embodied in the SDOA," with none of the stated issues involving the time of taking. The first time
that the time of taking surfaced was when the July 5, 2011 decision pegged it on November 29,
1989. As such, the Court overstepped its adjudicative boundaries by pegging the taking at a definite
date (whether November 21, 1989, or January 2, 2006, or any other date) even without the parties
presenting the matter here.

With all due respect to my distinguished colleagues in the Majority, I state that the Court unduly
interfered with the right of the parties to present the issues they desired to bring for the Court’s
consideration and resolution. As a rule, the Court should not create issues sua sponte but should
decide only the issues presented by the parties. This rule adheres to the principle of party
presentation, which fully complements the role of the Judiciary as the neutral arbiter of disputes, a
role that is vital to the adversarial system.

Greenlaw v. United States,20 a 2008 ruling of the United States Supreme Court, explained the
principle of party presentation or litigants’ autonomy in the following terms, to wit:

In our adversary system, in both civil and criminal cases, in the first instance and on appeal, we
follow the principle of party presentation. That is, we rely on the parties to frame the issues for
decision and assign to courts the role of neutral arbiter of matters the parties present. To the

extent courts have approved departures from the party presentation principle in criminal cases, the
justification has usually been to protect a pro se litigant’s rights. See Castro v. United States, 540 U.
S. 375, 381-383 (2003). But as a general rule, "[o]ur adversary system is designed around the
premise that the parties know what is best for them, and are responsible for advancing the facts and
arguments entitling them to relief." Id., at 386 (Scalia, J., concurring in part and concurring in
judgment). As cogently explained:

"[Courts] do not, or should not, sally forth each day looking for wrongs to right. We wait for cases to
come to us, and when they do we normally decide only questions presented by the parties. Counsel
almost always know a great deal more about their cases than we do, and this must be particularly
true of counsel for the United States, the richest, most powerful, and best represented litigant to
appear before us." United States v. Samuels, 808 F. 2d 1298, 1301 (CA8 1987) (R. Arnold, J.,
concurring in denial of reh’g en banc).

The grave danger posed by the sua sponte creation and decision of issues by the trial and appellate
courts without the prior knowledge of the parties is to cause injustice itself. "Were we to address
these unbriefed issues," an appellate tribunal in the State of Illinois observed, "we would be forced to
speculate as to the arguments that the parties might have presented had these issues been properly
raised before this court. To engage in such speculation would only cause further injustice; thus, we
refrain from addressing these issues sua sponte." 21 Such injustice may extend outside of the parties
themselves, as warned in United Shoe Workers of America, Local 132 v. Wisconsin Labor Relations
Board,22 viz:

Courts do not decline to decide questions which are not before them because they are not willing to
assume responsibility for the decision. When a court decides a question not before it, its decision
may and very probably will affect the rights of parties who have never had their day in court. The
question may, as Chief Justice Winslow said, arise under circumstances that cannot be foreseen
which may throw much additional light upon the question. Long experience has demonstrated that
questions which affect the rights of citizens should not be determined upon hypothetical and
suppositious cases.

Instances admittedly happen when courts are allowed to step in and raise issues sua sponte. 23 The
most common instance is when a court decides whether or not it has jurisdiction over a case before
it.24 Also, in the exercise of its appellate jurisdiction, the Court has been relatively flexible in resolving
unassigned issues everytime it has found doing so necessary to arrive at a just decision. 25 However,
limitations on such instances should be set in order to preserve the courts’ neutrality and to respect
the litigants’ autonomy, particularly: (a) when necessary to avoid issuing decisions containing
erroneous statements of the law, such as when the parties misrepresent the law and ask the court to
decide a case on such ground; (b) when necessary to maintain control over how the court would
want to interpret the law; and (c) when necessary to give voice to legislative enactments disfavored
or ignored by the parties.26

None of the limitations obtains here. The time of taking is an issue peripheral to and outside of the
claims the parties extensively argued in this case. That the parties did not see fit to present the issue
is concrete testimony to their consensus that the issue was not appropriate to be decided here and
now, or that it might be better dealt with by and presented to the trial court. Consequently, the Court
must itself exercise self-restraint and resist the temptation to deal with and pass upon the issue,
because:

xxx a court has no reason to raise issues that are tangential to or distinct from the claims that the
parties have asked the court to decide, because in these cases its opinion will not mislead other or
create flawed precedent. xxx Moreover, questions that are truly independent from those that the
parties have already briefed and argued would likely require the development of facts not already in
the record, which is unfair to litigants who are beyond the discovery stage — thus providing good
reason for courts to ignore those issues as well. 27

Moreover, I disagree that the desire to avoid delaying the distribution of the land can justify deciding
now the time of taking. Haste on that basis may unduly sacrifice the constitutional right of HLI to the
fair and prompt determination of its just compensation. We have to bear in mind that the taking of
land for the CARP, albeit revolutionary, should not be done by sacrificing the constitutional right to
the fair and prompt determination of just compensation for HLI as the landowner because it was as
entitled as the FWBs to the protection of the Constitution and the agrarian reform laws. 28 On the
other hand, having the RTC-SAC determine the time of taking, far from being a cause for delay, may
actually expedite the proceedings, because the RTC-SAC can resort to the aid of extrajudicial and
judicial mediation, as well as to other procedures heretofore effectively used by the trial courts to
expedite, including pre-trial and discovery, with the end in view of quickening the all-important
determination of just compensation. In this regard, all the possibilities of expediting the process
should be encouraged, because just compensation that results from the agreement and consent of
the stakeholders of land reform will be no less just and full.

Given the foregoing, the time of taking, as a factor in determining just compensation, should be fully
heard during the second stage of the expropriation proceedings and settled initially by the DAR and
Land Bank, and subsequently by the RTC-SAC, not by the Court in these proceedings that
commenced from an administrative decision that was an incident during the first stage of the
expropriation.

II

The Majority now rules that the Government shall pay to HLI the just compensation for the 240-
square-meter homelots distributed to the FWBs pursuant to the provisions of the discredited SDP.

I welcome the ruling, because the Majority now adopts my humble view.

Verily, the giving of the homelots as among the benefits acquired by the FWBs under the SDP
should not be disturbed, that is, the FWBs should not be obliged to return the homelots thus
received. To oust the FWBs from their homelots would displace them from the premises they had
enjoyed for two decades, more or less, building thereon the homes for their families. Their
displacement would be unjust. Yet, the homelots were distributed to the FWBs because of the SDP.
Upon the revocation of the SDP, HLI lost the only enforceable justification for distributing the
homelots to the FWBs. Simple justice demands, therefore, that HLI be justly compensated for the
market value of the homelots. Indeed, while the emancipation of the FWBs from the bondage of the
soil is the primordial objective of the CARP, vigilance for the rights of the landowner is equally
important because social justice cannot be invoked to trample on the rights of the property owner,
who under our Constitution and laws is also entitled to protection. 29

IN VIEW OF THE FOREGOING, I vote to PARTIALLY GRANT HLI’s Motion to Clarify and
Reconsider Resolution of November 22, 2011 and the Motion for Reconsideration/Clarification of
Noel Mallari, et al. in accordance with the foregoing.
 G.R. No. 165354, January 12, 2015

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE NATIONAL POWER

CORPORATION, Petitioner, v. HEIRS OF SATURNINO Q. BORBON, AND COURT OF
APPEALS, Respondents.

DECISION

BERSAMIN, J.:

The expropriator who has taken possession of the property subject of expropriation is
obliged to pay reasonable compensation to the landowner for the period of such
possession although the proceedings had been discontinued on the ground that the
public purpose for the expropriation had meanwhile ceased.

Antecedents

The National Power Corporation (NAPOCOR) is a government-owned and -controlled

corporation vested with authority under Republic Act No. 6395, as amended, to
undertake the development of hydro-electric generation of power, production of
electricity from any and all sources, construction, operation and maintenance of power
plants, auxiliary plants, dams, reservoirs, pipes, main transmission lines, power stations
and substations, and other works for the purpose of developing hydraulic power from
any river, lake, creek, spring and waterfalls in the Philippines and to supply such power
to the inhabitants thereof.1 cralawlawlibrary

In February 1993, NAPOCOR entered a property located in Barangay San Isidro,

Batangas City in order to construct and maintain transmission lines for the 230 KV
Mahabang Parang-Pinamucan Power Transmission Project.2 Respondents heirs of
Saturnino Q. Borbon owned the property, with a total area of 14,257 square meters,
which was registered under Transfer Certificate of Title No. T-9696 of the Registry of
Deeds of Batangas.3 cralawlawlibrary

On May 26, 1995, NAPOCOR filed a complaint for expropriation in the Regional Trial
Court in Batangas City (RTC),4 seeking the acquisition of an easement of right of way
over a portion of the property involving an area of only 6,326 square meters, more or
less,5 alleging that it had negotiated with the respondents for the acquisition of the
easement but they had failed to reach any agreement; and that, nonetheless, it was
willing to deposit the amount of P9,790.00 representing the assessed value of the
portion sought to be expropriated.6 It prayed for the issuance of a writ of possession
upon deposit to enable it to enter and take possession and control of the affected
portion of the property; to demolish all improvements existing thereon; and to
commence construction of the transmission line project. It likewise prayed for the
appointment of three commissioners to determine the just compensation to be paid.7 cralawlawlibrary

In their answer with motion to dismiss,8 the respondents staunchly maintained that

NAPOCOR had not negotiated with them before entering the property and that the entry
was done without their consent in the process, destroying some fruit trees without
payment, and installing five transmission line posts and five woodpoles for its
project;9 that the area being expropriated only covered the portion directly affected by
the transmission lines; that the remaining portion of the property was also affected
because the transmission line passed through the center of the land, thereby dividing
the land into three lots; that the presence of the high tension transmission line had
rendered the entire property inutile for any future use and capabilities;10 that,
nonetheless, they tendered no objection to NAPOCOR’s entry provided it would pay just
compensation not only for the portion sought to be expropriated but for the entire
property whose potential was greatly diminished, if not totally lost, due to the
project;11 and that their property was classified as industrial land. Thus, they sought the
dismissal of the complaint, the payment of just compensation of P1,000.00/square
meter, and attorney’s fees;12 and to be allowed to nominate their representative to the
panel of commissioners to be appointed by the trial court.13 cralawlawlibrary

In the pre-trial conference conducted on December 20, 1995, the parties stipulated on:
(1) the location of the property; (2) the number of the heirs of the late Saturnino Q.
Borbon; (3) the names of the persons upon whom title to the property was issued; and
(4) the ownership and possession of the property.14 In its order of that date, the RTC
directed the parties to submit the names of their nominees to sit in the panel of
commissioners within 10 days from the date of the pre-trial.15 cralawlawlibrary

The RTC constituted the panel of three commissioners. Two commissioners submitted a
joint report on April 8, 1999,16 in which they found that the property was classified as
industrial land located within the Industrial 2 Zone;17 that although the property used to
be classified as agricultural (i.e., horticultural and pasture land), it was reclassified to
industrial land for appraisal or taxation purposes on June 30, 1994; and that the
reclassification was made on the basis of a certification issued by the Zoning
Administrator pursuant to Section 3.10 (d) of the Amended Zoning Ordinance (1989) of
the City of Batangas.18 The two commissioners appraised the value at P550.00/square
meter.19 However, the third commissioner filed a separate report dated March 16,
1999,20 whereby he recommended the payment of “an easement fee of at least ten
percent (10%) of the assessed value indicated in the tax declaration21 plus cost of
damages in the course of the construction, improvements affected and tower occupancy
fee.”22
cralawlawlibrary

The parties then submitted their respective objections to the reports. On their part, the
respondents maintained that NAPOCOR should compensate them for the entire property
at the rate of P550.00/square meter because the property was already classified as
industrial land at the time NAPOCOR entered it.23 In contrast, NAPOCOR objected to the
joint report, insisting that the property was classified as agricultural land at the time of
its taking in March 1993; and clarifying that it was only seeking an easement of right of
way over a portion of the property, not the entire area thereof, so that it should pay
only 10% of the assessed value of the portion thus occupied.24 cralawlawlibrary

In the judgment dated November 27, 2000,25 the RTC adopted the recommendation
contained in the joint report, and ruled thusly:chanRoblesvirtualLawlibrary

The price to be paid for an expropriated land is its value at the time of taking, which is
the date when the plaintiff actually entered the property or the date of the filing of the
complaint for expropriation. In this case, there is no evidence as to when the plaintiff
actually entered the property in question, so the reference point should be the date of
filing of the complaint, which is May 5, 1995.

On this date, the property in question was already classified as industrial. So, the Joint
Report (Exhibit “1”) is credible on this point. The two Commissioners who submitted the
Joint Report are government officials who were not shown to be biased. So, that their
report should be given more weight than the minority report submitted by a private
lawyer representing the plaintiff. In view of these, the Court adopts the Joint Report
and rejects the minority report. The former fixed the just compensation at P550.00 per
square meter for the whole lot of 14,257 square meters.26
ChanRoblesVirtualawlibrary

Accordingly, the RTC ordered NAPOCOR to pay the respondents: (1) just compensation
for the whole area of 14,257 square meters at the rate of P550.00/square meter; (2)
legal rate of interest from May 5, 1995 until full payment; and (3) the costs of suit.27 cralawlawlibrary

NAPOCOR appealed (CA-G.R. No. 72069).

On April 29, 2004,28 the CA promulgated its decision, viz: chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the Decision dated November 27, 2000 of Branch I
of the Regional Trial Court of Batangas City, is hereby AFFIRMED with the
MODIFICATION that plaintiff-appellant shall pay only for the occupied 6,326 square
meters of the subject real property at the rate of P550.00 per square meter and to pay
legal interest therefrom until fully paid.

SO ORDERED.29

Hence, this appeal by NAPOCOR.

Issue

On December 3, 2012, during the pendency of the appeal, NAPOCOR filed a Motion to
Defer Proceedings stating that negotiations between the parties were going on with a
view to the amicable settlement of the case.30 cralawlawlibrary

On January 3, 2014, NAPOCOR filed a Manifestation and Motion to Discontinue

Expropriation Proceedings,31 informing that the parties failed to reach an amicable
agreement; that the property sought to be expropriated was no longer necessary for
public purpose because of the intervening retirement of the transmission lines installed
on the respondents’ property;32 that because the public purpose for which such property
would be used thereby ceased to exist, the proceedings for expropriation should no
longer continue, and the State was now duty-bound to return the property to its
owners; and that the dismissal or discontinuance of the expropriation proceedings was
in accordance with Section 4, Rule 67 of the Rules of Court. Hence, NAPOCOR prayed
that the proceedings be discontinued “under such terms as the court deems just and
equitable,”33 and that the compensation to be awarded the respondents be reduced by
the equivalent of the benefit they received from the land during the time of its
occupation, for which purpose the case could be remanded to the trial court for the
determination of reasonable compensation to be paid to them.34 cralawlawlibrary

In light of its Manifestation and Motion to Discontinue Expropriation Proceedings,

NAPOCOR contends that the expropriation has become without basis for lack of public
purpose as a result of the retirement of the transmission lines; that if expropriation still
proceeds, the Government will be unduly burdened by payment of just compensation
for property it no longer requires; and that there is legal basis in dismissing the
proceedings, citing Metropolitan Water District v. De los Angeles 35 where the Court
granted petitioner’s prayer for the quashal of expropriation proceedings and the
eventual dismissal of the proceedings on the ground that the land sought to be
expropriated was no longer “indispensably necessary” in the maintenance and operation
of petitioner's waterworks system.

The issue to be considered and resolved is whether or not the expropriation

proceedings should be discontinued or dismissed pending appeal.

Ruling of the Court

The dismissal of the proceedings for expropriation at the instance of NAPOCOR is

proper, but, conformably with Section 4,36 Rule 67 of the Rules of Court, the dismissal
or discontinuance of the proceedings must be upon such terms as the court deems just
and equitable.

Before anything more, we remind the parties about the nature of the power of eminent
domain.

The right of eminent domain is “the ultimate right of the sovereign power to
appropriate, not only the public but the private property of all citizens within the
territorial sovereignty, to public purpose.”37 But the exercise of such right is not
unlimited, for two mandatory requirements should underlie the Government’s exercise
of the power of eminent domain, namely: (1) that it is for a particular public purpose;
and (2) that just compensation be paid to the property owner.38 These requirements
partake the nature of implied conditions that should be complied with to enable the
condemnor to keep the property expropriated.39 cralawlawlibrary

Public use, in common acceptation, means “use by the public.” However, the concept
has expanded to include utility, advantage or productivity for the benefit of the
public.40 In Asia's Emerging Dragon Corporation v. Department of Transportation and
Communications,41 Justice Corona, in his dissenting opinion said that: chanRoblesvirtualLawlibrary

To be valid, the taking must be for public use. The meaning of the term “public use”
has evolved over time in response to changing public needs and exigencies. Public use
which was traditionally understood as strictly limited to actual “use by the public” has
already been abandoned. “Public use” has now been held to be synonymous with
“public interest,” “public benefit,” and “public convenience.”

It is essential that the element of public use of the property be maintained throughout
the proceedings for expropriation. The effects of abandoning the public purpose were
explained in Mactan-Cebu International Airport Authority v. Lozada, Sr.,42 to wit: chanRoblesvirtualLawlibrary

More particularly, with respect to the element of public use, the expropriator should
commit to use the property pursuant to the purpose stated in the petition for
expropriation filed, failing which, it should file another petition for the new purpose. If
not, it is then incumbent upon the expropriator to return the said property to its private
owner, if the latter desires to reacquire the same. Otherwise, the judgment of
expropriation suffers an intrinsic flaw, as it would lack one indispensable element for
the proper exercise of the power of eminent domain, namely, the particular public
purpose for which the property will be devoted. Accordingly, the private property owner
would be denied due process of law, and the judgment would violate the property
owner's right to justice, fairness and equity.43

A review reveals that Metropolitan Water District v. De los Angeles 44 is an appropriate

precedent herein. There, the Metropolitan Water District passed a board resolution
requesting the Attorney-General to file a petition in the Court of First Instance of the
Province of Rizal praying that it be permitted to discontinue the condemnation
proceedings it had initiated for the expropriation of a parcel of land in Montalban, Rizal
to be used in the construction of the Angat Waterworks System. It claimed that the
land was no longer indispensably necessary in the maintenance and operation of its
waterworks system, and that the expropriation complaint should then be dismissed.
The Court, expounding on the power of the State to exercise the right of eminent
domain, then pronounced: chanRoblesvirtualLawlibrary

There is no question raised concerning the right of the plaintiff here to acquire the land
under the power of eminent domain. That power was expressly granted it by its
charter. The power of eminent domain is a right reserved to the people or Government
to take property for public use. It is the right of the state, through its regular
organization, to reassert either temporarily or permanently its dominion over any
portion of the soil of the state on account of public necessity and for the public
good. The right of eminent domain is the right which the Government or the people
retains over the estates of individuals to resume them for public use. It is the right of
the people, or the sovereign, to dispose, in case of public necessity and for the public
safety, of all the wealth contained in the state.45
ChanRoblesVirtualawlibrary

Indeed, public use is the fundamental basis for the action for expropriation; hence,
NAPOCOR’s motion to discontinue the proceedings is warranted and should be granted. 
The Court has observed in Metropolitan Water District v. De los Angeles: chanRoblesvirtualLawlibrary

It is not denied that the purpose of the plaintiff was to acquire the land in question
for public use. The fundamental basis then of all actions brought for the expropriation of
lands, under the power of eminent domain, is public use. That being true, the very
moment that it appears at any stage of the proceedings that the expropriation
is not for a public use, the action must necessarily fail and should be
dismissed, for the reason that the action cannot be maintained at all except
when the expropriation is for some public use. That must be true even during
the pendency of the appeal or at any other stage of the proceedings. If, for
example, during the trial in the lower court, it should be made to appear to the
satisfaction of the court that the expropriation is not for some public use, it would be
the duty and the obligation of the trial court to dismiss the action. And even during the
pendency of the appeal, if it should be made to appear to the satisfaction of the
appellate court that the expropriation is not for public use, then it would become the
duty and the obligation of the appellate court to dismiss it.

In the present case the petitioner admits that the expropriation of the land in question
is no longer necessary for public use. Had that admission been made in the trial court
the case should have been dismissed there. It now appearing positively, by resolution
of the plaintiff, that the expropriation is not necessary for public use, the action should
be dismissed even without a motion on the part of the plaintiff. The moment it appears
in whatever stage of the proceedings that the expropriation is not for a public use the
complaint should be dismissed and all the parties thereto should be relieved from
further annoyance or litigation.46 (underscoring and emphasis supplied)

It is notable that the dismissal of the expropriation proceedings in Metropolitan Water

District v. De los Angeles was made subject to several conditions in order to address
the dispossession of the defendants of their land, and the inconvenience, annoyance
and damages suffered by the defendants on account of the proceedings. Accordingly,
the Court remanded the case to the trial court for the issuance of a writ of possession
ordering Metropolitan Water District to immediately return possession of the land to the
defendants, and for the determination of damages in favor of the defendants, the
claims for which must be presented within 30 days from the return of the record to the
court of origin and notice thereof.47
cralawlawlibrary

Here, NAPOCOR seeks to discontinue the expropriation proceedings on the ground that
the transmission lines constructed on the respondents’ property had already been
retired. Considering that the Court has consistently upheld the primordial importance of
public use in expropriation proceedings, NAPOCOR’s reliance on Metropolitan Water
District v. De los Angeles was apt and correct. Verily, the retirement of the transmission
lines necessarily stripped the expropriation proceedings of the element of public use. To
continue with the expropriation proceedings despite the definite cessation of the public
purpose of the project would result in the rendition of an invalid judgment in favor of
the expropriator due to the absence of the essential element of public use.

Unlike in Metropolitan Water District v. De los Angeles where the request to discontinue

the expropriation proceedings was made upon the authority appearing in the board
resolution issued on July 14, 1930,48 counsel for NAPOCOR has not presented herein
any document to show that NAPOCOR had decided, as a corporate body, to discontinue
the expropriation proceedings. Nonetheless, the Court points to the Memorandum dated
December 13, 201249 and the Certificate of Inspection/Accomplishment dated February
5, 200550 attached to NAPOCOR’s motion attesting to the retirement of the transmission
lines. Also, Metropolitan Water District v. De los Angeles emphasized that it became the
duty and the obligation of the court, regardless of the stage of the proceedings, to
dismiss the action “if it should be made to appear to the satisfaction of the court that
the expropriation is not for some public use.”51 Despite the lack of the board resolution,
therefore, the Court now considers the documents attached to NAPOCOR’s
Manifestation and Motion to Discontinue Expropriation Proceedings to be sufficient to
establish that the expropriation sought is no longer for some public purpose.

Accordingly, the Court grants the motion to discontinue the proceedings subject to the
conditions to be shortly mentioned hereunder, and requires the return of the property
to the respondents.

Having said that, we must point out that NAPOCOR entered the property without the
owners’ consent and without paying just compensation to the respondents. Neither did
it deposit any amount as required by law prior to its entry. The Constitution is explicit in
obliging the Government and its entities to pay just compensation before depriving any
person of his or her property for public use.52 Considering that in the process of
installing transmission lines, NAPOCOR destroyed some fruit trees and plants without
payment, and the installation of the transmission lines went through the middle of the
land as to divide the property into three lots, thereby effectively rendering the entire
property inutile for any future use, it would be unfair for NAPOCOR not to be made
liable to the respondents for the disturbance of their property rights from the time of
entry until the time of restoration of the possession of the property. There should be no
question about the taking. In several rulings, notably National Power Corporation v.
Zabala,53  Republic v. Libunao,54  National Power Corporation v. Tuazon,55  and National
Power Corporation v. Saludares,56 this Court has already declared that “since the high-
tension electric current passing through the transmission lines will perpetually deprive
the property owners of the normal use of their land, it is only just and proper to require
Napocor to recompense them for the full market value of their property.”

There is a sufficient showing that NAPOCOR entered into and took possession of the
respondents’ property as early as in March 1993 without the benefit of first filing a
petition for eminent domain.  For all intents and purposes, therefore, March 1993 is the
reckoning point of NAPOCOR’s taking of the property, instead of May 5, 1995, the time
NAPOCOR filed the petition for expropriation.  The reckoning conforms to the
pronouncement in Ansaldo v. Tantuico, Jr.,57 to wit: chanRoblesvirtualLawlibrary

Normally, of course, where the institution of an expropriation action precedes the taking
of the property subject thereof, the just compensation is fixed as of the time of the
filing of the complaint. This is so provided by the Rules of Court, the assumption of
possession by the expropriator ordinarily being conditioned on its deposits with the
National or Provincial Treasurer of the value of the property as provisionally ascertained
by the court having jurisdiction of the proceedings.

There are instances, however, where the expropriating agency takes over the property
prior to the expropriation suit, as in this case although, to repeat, the case at bar is
quite extraordinary in that possession was taken by the expropriator more than 40
years prior to suit. In these instances, this Court has ruled that the just compensation
shall be determined as of the time of taking, not as of the time of filing of the action of
eminent domain.

In the context of the State's inherent power of eminent domain, there is a “taking”
when the owner is actually deprived or dispossessed of his property; when there is a
practical destruction or a material impairment of the value of his property or when he is
deprived of the ordinary use thereof. There is a “taking” in this sense when the
expropriator enters private property not only for a momentary period but for a more
permanent duration, for the purpose of devoting the property to a public use in such a
manner as to oust the owner and deprive him of all beneficial enjoyment thereof. For
ownership, after all, “is nothing without the inherent rights of possession, control and
enjoyment. Where the owner is deprived of the ordinary and beneficial use of his
property or of its value by its being diverted to public use, there is taking within the
Constitutional sense.” x x x.58
ChanRoblesVirtualawlibrary

In view of the discontinuance of the proceedings and the eventual return of the
property to the respondents, there is no need to pay “just compensation” to them
because their property would not be taken by NAPOCOR. Instead of full market value of
the property, therefore, NAPOCOR should compensate the respondents for the
disturbance of their property rights from the time of entry in March 1993 until the time
of restoration of the possession by paying to them actual or other compensatory
damages. This conforms with the following pronouncement in Mactan-Cebu
International Airport Authority v. Lozada, Sr.:59 cralawlawlibrary

In light of these premises, we now expressly hold that the taking of private property,
consequent to the Government’s exercise of its power of eminent domain, is always
subject to the condition that the property be devoted to the specific public purpose for
which it was taken. Corollarily, if this particular purpose or intent is not initiated or not
at all pursued, and is peremptorily abandoned, then the former owners, if they so
desire, may seek the reversion of the property, subject to the return of the amount of
just compensation received. In such a case, the exercise of the power of eminent
domain has become improper for lack of the required factual justification.60
ChanRoblesVirtualawlibrary

This should mean that the compensation must be based on what they actually lost as a
result and by reason of their dispossession of the property and of its use, including the
value of the fruit trees, plants and crops destroyed by NAPOCOR’s construction of the
transmission lines.

Considering that the dismissal of the expropriation proceedings is a development

occurring during the appeal, the Court now treats the dismissal of the expropriation
proceedings as producing the effect of converting the case into an action for damages.
For that purpose, the Court remands the case to the court of origin for further
proceedings, with instruction to the court of origin to enable the parties to fully litigate
the action for damages by giving them the opportunity to re-define the factual and legal
issues by the submission of the proper pleadings on the extent of the taking, the value
of the compensation to be paid to the respondents by NAPOCOR, and other relevant
matters as they deem fit. Trial shall be limited to matters the evidence upon which had
not been heretofore heard or adduced. The assessment and payment of the correct
amount of filing fees due from the respondents shall be made in the judgment, and
such amount shall constitute a first lien on the recovery. Subject to these conditions,
the court of origin shall treat the case as if originally filed as an action for damages.

WHEREFORE, the Court DISMISSES the expropriation proceedings due to the

intervening cessation of the need for public use; REMANDS the records to the Regional
Trial Court, Branch 1, in Batangas City as the court of origin for further proceedings to
be conducted in accordance with the foregoing instructions; and ORDERS said trial
court to try and decide the issues with dispatch.

SO ORDERED. chanroblesvirtuallawlibrary
NATIONAL POWER CORPORATION, PETITIONER, VS. HEIRS OF MACABANGKIT
SANGKAY, NAMELY: CEBU, BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR,
PUTRI , MONGKOY*, AND AMIR, ALL SURNAMED MACABANGKIT,
RESPONDENTS.

DECISION

BERSAMIN, J.:

Private property shall not be taken for public use without just compensation.
-  Section 9, Article III, 1987 Constitution

The application of this provision of the Constitution is the focus of this appeal.

Petitioner National Power Corporation (NPC) seeks the review on certiorari of the
decision promulgated on October 5, 2004,[1] whereby the Court of Appeals (CA)
affirmed the decision dated August 13, 1999 and the supplemental decision dated
August 18, 1999, ordering NPC to pay just compensation to the respondents, both
rendered by the Regional Trial Court, Branch 1, in Iligan City (RTC).

Antecedents

Pursuant to its legal mandate under Republic Act No. 6395 (An Act Revising the Charter
of the National Power Corporation), NPC undertook the Agus River Hydroelectric Power
Plant Project in the 1970s to generate electricity for Mindanao. The project included the
construction of several underground tunnels to be used in diverting the water flow from
the Agus River to the hydroelectric plants.[2]

On November 21, 1997, the respondents, namely: Cebu, Bangowa-an, Sayana, Nasser,
Manta, Edgar, Putri, Mongkoy and Amir, all surnamed Macabangkit (Heirs of
Macabangkit), as the owners of land with an area of  221,573 square meters situated in
Ditucalan, Iligan City, sued NPC in the RTC for the recovery of damages and of the
property, with the alternative prayer for the payment of just compensation.[3] They
alleged that they had belatedly discovered that one of the underground tunnels of NPC
that diverted the water flow of the Agus River for the operation of the Hydroelectric
Project in Agus V, Agus VI and Agus VII traversed their land; that their discovery had
occurred in 1995 after Atty. Saidali C. Gandamra, President of the Federation of Arabic
Madaris School, had rejected their offer to sell the land because of the danger the
underground tunnel might pose to the proposed Arabic Language Training Center and
Muslims Skills Development Center; that such rejection had been followed by the
withdrawal by Global Asia Management and Resource Corporation from developing the
land into a housing project for the same reason; that Al-Amanah Islamic Investment
Bank of the Philippines had also refused to accept their land as collateral because of the
presence of the underground tunnel; that the underground tunnel had been constructed
without their knowledge and consent; that the presence of the tunnel deprived them of
the agricultural, commercial, industrial and residential value of their land; and that their
land had also become an unsafe place for habitation because of the loud sound of the
water rushing through the tunnel and the constant shaking of the ground, forcing them
and their workers to relocate to safer grounds.
In its answer with counterclaim,[4] NPC countered that the Heirs of Macabangkit had no
right to compensation under section 3(f) of Republic Act No. 6395, under which a mere
legal easement on their land was established; that their cause of action, should they be
entitled to compensation, already prescribed due to the tunnel having been constructed
in 1979; and that by reason of the tunnel being an apparent and continuous easement,
any action arising from such easement prescribed in five years.

Ruling of the RTC

On July 23, 1998, an ocular inspection of the land that was conducted by RTC Judge
Mamindiara P. Mangotara and the representatives of the parties resulted in the
following observations and findings:

a. That a concrete post which is about two feet in length from the ground
which according to the claimants is the middle point of the tunnel.

b. That at least three fruit bearing durian trees were uprooted and as a
result of the construction by the defendant of the tunnel and about one
hundred coconuts planted died.

c. That underground tunnel was constructed therein.[5]

After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit),[6] decreeing:

WHEREFORE, premises considered:

1. The prayer for the removal or dismantling of defendant's tunnel is denied. However,
defendant is hereby directed and ordered:

a) To pay plaintiffs' land with a total area of 227,065 square meters, at the rate of FIVE
HUNDRED (P500.00) PESOS per square meter, or a total of ONE HUNDRED THIRTEEN
MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED
(P113,532,500.00), PESOS, plus interest, as actual damages or just compensation;

b) To pay plaintiff a monthly rental of their land in the amount of THIRTY THOUSAND
(P30,000.00) PESOS from 1979 up to July 1999 with 12% interest per annum;

c) To pay plaintiffs the sum of TWO HUNDRED THOUSAND (P200,000.00) PESOS, as

moral damages;

d) To pay plaintiffs, the sum of TWO HUNDRED THOUSAND (P200,000.00) PESOS, as

exemplary damages;

e) To pay plaintiffs, the sum equivalent to 15% of the total amount awarded, as
attorney's fees, and to pay the cost.

SO ORDERED.

The RTC found that NPC had concealed the construction of the tunnel in 1979 from the
Heirs of Macabangkit, and had since continuously denied its existence; that NPC had
acted in bad faith by taking possession of the subterranean portion of their land to
construct the tunnel without their knowledge and prior consent; that the existence of
the tunnel had affected the entire expanse of the land, and had restricted their right to
excavate or to construct a motorized deep well; and that they, as owners, had lost the
agricultural, commercial, industrial and residential value of the land.

The RTC fixed the just compensation at P500.00/square meter based on the testimony
of Dionisio Banawan, OIC-City Assessor of Iligan City, to the effect that the appraised
value of the adjoining properties ranged from P700.00 to P750.00, while the appraised
value of their affected land ranged from P400.00 to P500.00. The RTC also required
NPC to pay rentals from 1979 due to its bad faith in concealing the construction of the
tunnel from the Heirs of Macabangkit.

On August 18, 1999, the RTC issued a supplemental decision,[7] viz:

Upon a careful review of the original decision dated August 13, 1999, a sentence should
be added to paragraph 1(a) of the dispositive portion thereof, to bolster, harmonize,
and conform to the findings of the Court, which is quoted hereunder, to wit:

"Consequently, plaintiffs' land or properties are hereby condemned in favor of

defendant National Power Corporation, upon payment of the aforesaid sum."

Therefore, paragraph 1(a) of the dispositive portion of the original decision should read,
as follows:

a) To pay plaintiffs' land with a total area of 227,065 square meters, at the rate of FIVE
HUNDRED (P500.00) PESOS per square meter, or a total of ONE HUNDRED THIRTEEN
MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED
(P113,532,500.00) PESOS, plus interest, as actual damages or just
compensation; Consequently, plaintiffs' land or properties are hereby condemned in
favor of defendant National Power Corporation, upon payment of the aforesaid sum;

This supplemental decision shall be considered as part of paragraph 1(a) of the

dispositive portion of the original decision.

Furnish copy of this supplemental decision to all parties immediately.

SO ORDERED.

On its part, NPC appealed to the CA on August 25, 1999.[8]

Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent motion for
execution of judgment pending appeal.[9] The RTC granted the motion and issued a writ
of execution,[10] prompting NPC to assail the writ by petition for certiorari in the CA. On
September 15, 1999, the CA issued a temporary restraining order (TRO) to enjoin the
RTC from implementing its decision. The Heirs of Macabangkit elevated the ruling of the
CA (G.R. No. 141447), but the Court upheld the CA on May 4, 2006.[11]

Ruling of the CA
NPC raised only two errors in the CA, namely:

THE COURT A QUO SERIOUSLY ERRED IN RULING THAT NAPOCOR'S UNDERGROUND

TUNNEL IN ITS AGUS RIVER HYDRO-ELECTRIC PLANT PROJECT TRAVERSED AND/OR
AFFECTED APPELLEES' PROPERTY AS THERE IS NO CLEAR EVIDENCE INDUBITABLY
ESTABLISHING THE SAME

II

THE COURT A QUO SERIOUSLY ERRED IN GRANTING APPELLEES' CLAIMS IN THEIR

ENTIRETY FOR GRANTING ARGUENDO THAT NAPOCOR'S UNDERGROUND TUNNEL
INDEED TRAVERSED APPELLEE'S PROPERTY, THEIR CAUSE OF ACTION HAD ALREADY
BEEN BARRED BY PRESCRIPTION, ESTOPPEL AND LACHES

On October 5, 2004, the CA affirmed the decision of the RTC, holding  that the
testimonies of NPC's witness Gregorio Enterone and of the respondents' witness Engr.
Pete Sacedon, the topographic survey map, the sketch map, and the ocular inspection
report sufficiently established the existence of the underground tunnel traversing the
land of the Heirs of Macabangkit; that NPC did not substantiate its defense that
prescription already barred the claim of the Heirs of Macabangkit; and that Section 3(i)
of R.A. No. 6395, being silent about tunnels, did not apply, viz:

As regard Section 3(i) of R.A. No. 6395 (An Act Revising the Charter of the National
Power Corporation), it is submitted that the same provision is not applicable. There is
nothing in Section 3(i) of said law governing claims involving tunnels. The same
provision is applicable to those projects or facilities on the surface of the land, that can
easily be discovered, without any mention about the claims involving tunnels,
particularly those surreptitiously constructed beneath the surface of the land, as in the
instant case.

Now, while it is true that Republic Act No. 6395 authorizes NAPOCOR to take water
from any public stream, river, creek, lake, spring or waterfall in the Philippines for the
realization of the purposes specified therein for its creation; to intercept and divert the
flow of waters from lands of riparian owners (in this case, the "Heirs"), and from
persons owning or interested in water which are or may be necessary to said purposes,
the same Act expressly mandates the payment of just compensation.

WHEREFORE, premises considered, the instant appeal is hereby DENIED for lack of
merit. Accordingly, the appealed Decision dated August 13, 1999, and the supplemental
Decision dated August 18, 1999, are hereby AFFIRMED in toto.

SO ORDERED.[12]

Issue

NPC has come to the Court, assigning the lone error that:
THE APPELLATE COURT ERRED ON A QUESTION OF LAW WHEN IT AFFIRMED THE
DECISION AND SUPPLEMENTAL DECISION OF THE COURT A QUO DIRECTING AND
ORDERING PETITIONER TO PAY JUST COMPENSATION TO RESPONDENTS.

NPC reiterates that witnesses Enterone and Sacedon lacked personal knowledge about
the construction and existence of the tunnel and were for that reason not entitled to
credence; and that the topographic and relocation maps prepared by Sacedon should
not be a basis to prove the existence and location of the tunnel due to being self-
serving.

NPC contends that the CA should have applied Section 3(i) of Republic Act No. 6395,
which provided a period of only five years from the date of the construction within
which the affected landowner could bring a claim against it; and that even if Republic
Act No. 6395 should be inapplicable, the action of the Heirs of Macabangkit had already
prescribed due to the underground tunnel being susceptible to acquisitive prescription
after the lapse of 10 years pursuant to Article 620 of the Civil Code due to its being a
continuous and apparent legal easement under Article 634 of the Civil Code.

The issues for resolution are, therefore, as follows:

(1) Whether the CA and the RTC erred in holding that there was an underground tunnel
traversing the Heirs of Macabangkit's land constructed by NPC; and

(2) Whether the Heirs of Macabangkit's right to claim just compensation had prescribed
under section 3(i) of Republic Act No. 6395, or, alternatively, under Article 620 and
Article 646 of the Civil Code.

Ruling

We uphold the liability of NPC for payment of just compensation.

1.
Factual findings of the RTC,
when affirmed by the CA, are binding

The existence of the tunnel underneath the land of the Heirs of Macabangkit, being a
factual matter, cannot now be properly reviewed by the Court, for questions of fact are
beyond the pale of a petition for review on certiorari. Moreover, the factual findings and
determinations by the RTC as the trial court are generally binding on the Court,
particularly after the CA affirmed them.[13] Bearing these doctrines in mind, the Court
should rightly dismiss NPC's appeal.

NPC argues, however, that this appeal should not be dismissed because the Heirs of
Macabangkit essentially failed to prove the existence of the underground tunnel. It
insists that the topographic survey map and the right-of-way map presented by the
Heirs of Macabangkit did not at all establish the presence of any underground tunnel.

NPC still fails to convince.

Even assuming, for now, that the Court may review the factual findings of the CA and
the RTC, for NPC to insist that the evidence on the existence of the tunnel was not
adequate and incompetent remains futile. On the contrary, the evidence on the tunnel
was substantial, for the significance of the topographic survey map and the sketch map
(as indicative of the extent and presence of the tunnel construction) to the question on
the existence of the tunnel was strong, as the CA correctly projected in its assailed
decision, viz:

Among the pieces of documentary evidence presented showing the existence of the said
tunnel beneath the subject property is the topographic survey map. The topographic
survey map is one conducted to know about the location and elevation of the land and
all existing structures above and underneath it. Another is the Sketch Map which shows
the location and extent of the land traversed or affected by the said tunnel. These two
(2) pieces of documentary evidence readily point the extent and presence of
the tunnel construction coming from the power cavern near the small man-
made lake which is the inlet and approach tunnel, or at a distance of about
two (2) kilometers away from the land of the plaintiffs-appellees, and then
traversing the entire and the whole length of the plaintiffs-appellees' property,
and the outlet channel of the tunnel is another small man-made lake. This is a
sub-terrain construction, and considering that both inlet and outlet are bodies of water,
the tunnel can hardly be noticed. All constructions done were beneath the surface of
the plaintiffs-appellees' property. This explains why they could never obtain any
knowledge of the existence of such tunnel during the period that the same was
constructed and installed beneath their property.[14]

The power cavern and the inlet and outlet channels established the presence of the
underground tunnel, based on the declaration in the RTC by Sacedon, a former
employee of the NPC.[15]  It is worthy to note that NPC did not deny the existence of the
power cavern, and of the inlet and outlet channels adverted to and as depicted in the
topographic survey map and the sketch map. The CA cannot be faulted for crediting the
testimony of Sacedon despite the effort of NPC to discount his credit due to his not
being an expert witness, simply because Sacedon had personal knowledge based on his
being NPC's principal engineer and supervisor tasked at one time to lay out the tunnels
and transmission lines specifically for the hydroelectric projects,[16] and to supervise the
construction of the Agus 1 Hydroelectric Plant itself[17] from 1978 until his retirement
from NPC.[18]  Besides, he declared that he personally experienced the vibrations caused
by the rushing currents in the tunnel, particularly near the outlet channel.[19] Under any
circumstances, Sacedon was a credible and competent witness.

The ocular inspection actually confirmed the existence of the tunnel underneath the
land of the Heirs of Macabangkit. Thus, the CA observed:

More so, the Ocular inspection conducted on July 23, 1998 further bolstered such claim
of the existence and extent of such tunnel. This was conducted by a team composed of
the Honorable Presiding Judge of the Regional Trial Court, Branch 01, Lanao del Norte,
herself and the respective lawyers of both of the parties and found that, among
others, said underground tunnel was constructed beneath the subject
property.[20]

It bears noting that NPC did not raise any issue against or tender any contrary
comment on the ocular inspection report.
 2.
Five-year prescriptive period under Section 3(i) of Republic
Act No. 6395 does not apply to claims for just compensation

The CA held that Section 3(i) of Republic Act No. 6395 had no application to this action
because it covered facilities that could be easily discovered, not tunnels that were
inconspicuously constructed beneath the surface of the land.[21]

NPC disagrees, and argues that because Article 635[22] of the Civil Code directs the
application of special laws when an easement, such as the underground tunnel, was
intended for public use, the law applicable was Section 3(i) of Republic Act No. 6395, as
amended, which limits the action for recovery of compensation to five years from the
date of construction. It posits that the five-year prescriptive period already set in due to
the construction of the underground tunnel having been completed in 1979 yet.

Without necessarily adopting the reasoning of the CA, we uphold its conclusion that
prescription did not bar the present action to recover just compensation.

Section 3 (i) of Republic Act No. 6395, the cited law, relevantly provides:

Section 3. Powers and General Functions of the Corporation. - The powers, functions,
rights and activities of the Corporation shall be the following:

xxx

(i) To construct works across, or otherwise, any stream, watercourse, canal, ditch,
flume, street, avenue, highway or railway of private and public ownership, as the
location of said works may require:Provided, That said works be constructed in such a
manner as not to endanger life or property; And provided, further, That the stream,
watercourse, canal ditch, flume, street, avenue, highway or railway so crossed or
intersected be restored as near as possible to their former state, or in a manner not to
impair unnecessarily their usefulness. Every person or entity whose right of way or
property is lawfully crossed or intersected by said works shall not obstruct any such
crossings or intersection and shall grant the Board or its representative, the proper
authority for the execution of such work. The Corporation is hereby given the right of
way to locate, construct and maintain such works over and throughout the lands owned
by the Republic of the Philippines or any of its branches and political subdivisions. The
Corporation or its representative may also enter upon private property in the lawful
performance or prosecution of its business and purposes, including the construction of
the transmission lines thereon; Provided, that the owner of such property shall be
indemnified for any actual damage caused thereby;Provided, further, That said action
for damages is filed within five years after the rights of way, transmission
lines, substations, plants or other facilities shall have been
established; Provided, finally, That after said period, no suit shall be brought to
question the said rights of way, transmission lines, substations, plants or other
facilities;

A cursory reading shows that Section 3(i) covers the construction of "works across, or
otherwise, any stream, watercourse, canal, ditch, flume, street, avenue, highway or
railway of private and public ownership, as the location of said works may require." It is
notable that Section 3(i) includes no limitation except those enumerated after the
term works. Accordingly, we consider the term works as embracing all kinds of
constructions, facilities, and other developments that can enable or help NPC to meet
its objectives of developing hydraulic power expressly provided under paragraph (g) of
Section 3.[23] The CA's restrictive construal of Section 3(i) as exclusive of tunnels was
obviously unwarranted, for the provision applies not only to development works easily
discoverable or on the surface of the earth but also to subterranean works like tunnels.
Such interpretation accords with the fundamental guideline in statutory construction
that when the law does not distinguish, so must we not.[24]  Moreover, when the
language of the statute is plain and free from ambiguity, and expresses a single,
definite, and sensible meaning, that meaning is conclusively presumed to be the
meaning that the Congress intended to convey.[25]

Even so, we still cannot side with NPC.

We rule that the prescriptive period provided under Section 3(i) of Republic Act No.
6395 is applicable only to an action for damages, and does not extend to an action to
recover just compensation like this case. Consequently, NPC cannot thereby bar the
right of the Heirs of Macabangkit to recover just compensation for their land.

The action to recover just compensation from the State or its expropriating agency
differs from the action for damages. The former, also known as inverse condemnation,
has the objective to recover the value of property taken in fact by the governmental
defendant, even though no formal exercise of the power of eminent domain has been
attempted by the taking agency.[26]  Just compensation is the full and fair equivalent of
the property taken from its owner by the expropriator. The measure is not the taker's
gain, but the owner's loss. The word just is used to intensify the meaning of the
word compensation in order to convey the idea that the equivalent to be rendered for
the property to be taken shall be real, substantial, full, and ample.[27] On the other
hand, the latter action seeks to vindicate a legal wrong through damages, which may
be actual, moral, nominal, temperate, liquidated, or exemplary. When a right is
exercised in a manner not conformable with the norms enshrined in Article 19[28] and
like provisions on human relations in the Civil Code, and the exercise results to the
damage of another, a legal wrong is committed and the wrongdoer is held responsible.
[29]

The two actions are radically different in nature and purpose. The action to recover just
compensation is based on the Constitution[30] while the action for damages is predicated
on statutory enactments. Indeed, the former  arises from the exercise by the State of
its power of eminent domain against private property for public use, but the latter
emanates from the transgression of a right. The fact that the owner rather than the
expropriator brings the former does not change the essential nature of the suit as an
inverse condemnation,[31] for the suit is not based on tort, but on the constitutional
prohibition against the taking of property without just compensation.[32] It would very
well be contrary to the clear language of the Constitution to bar the recovery of just
compensation for private property taken for a public use solely on the basis of statutory
prescription.

Due to the need to construct the underground tunnel, NPC should have first moved to
acquire the land from the Heirs of Macabangkit either by voluntary tender to purchase
or through formal expropriation proceedings. In either case, NPC would have been
liable to pay to the owners the fair market value of the land, for Section 3(h) of
Republic Act No. 6395 expressly requires NPC to pay the fair market value of such
property at the time of the taking, thusly:

(h) To acquire, promote, hold, transfer, sell, lease, rent, mortgage, encumber and
otherwise dispose of property incident to, or necessary, convenient or proper to
carry out the purposes for which the Corporation was created: Provided, That in
case a right of way is necessary for its transmission lines, easement of right of way
shall only be sought: Provided, however,  That in case the property itself shall be
acquired by purchase, the cost thereof shall be the fair market value at the
time of the taking of such property.

This was what NPC was ordered to do in National Power Corporation v. Ibrahim,
[33]
 where NPC had denied the right of the owners to be paid just compensation despite
their land being traversed by the underground tunnels for siphoning water from Lake
Lanao needed in the operation of Agus II, Agus III, Agus IV, Agus VI and Agus VII
Hydroelectric Projects in Saguiran, Lanao del Sur, in Nangca and Balo-I in Lanao del
Norte and in Ditucalan and Fuentes in Iligan City. There, NPC similarly argued that the
underground tunnels constituted a mere easement that did not involve any loss of title
or possession on the part of the property owners, but the Court resolved against NPC,
to wit:

Petitioner contends that the underground tunnels in this case constitute an easement
upon the property of the respondents which does not involve any loss of title or
possession. The manner in which the easement was created by petitioner, however,
violates the due process rights of respondents as it was without notice and indemnity to
them and did not go through proper expropriation proceedings. Petitioner could have,
at any time, validly exercised the power of eminent domain to acquire the easement
over respondents' property as this power encompasses not only the taking or
appropriation of title to and possession of the expropriated property but likewise covers
even the imposition of a mere burden upon the owner of the condemned property.
Significantly, though, landowners cannot be deprived of their right over their land until
expropriation proceedings are instituted in court. The court must then see to it that the
taking is for public use, that there is payment of just compensation and that there is
due process of law.[34]

3.
NPC's construction of the tunnel
constituted taking of the land, and
entitled owners to just compensation

The Court held in National Power Corporation v. Ibrahim that NPC was "liable to pay not
merely an easement fee but rather the full compensation for land" traversed by the
underground tunnels, viz:

In disregarding this procedure and failing to recognize respondents' ownership of the

sub-terrain portion, petitioner took a risk and exposed itself to greater liability with the
passage of time. It must be emphasized that the acquisition of the easement is not
without expense. The underground tunnels impose limitations on respondents' use of
the property for an indefinite period and deprive them of its ordinary use. Based upon
the foregoing, respondents are clearly entitled to the payment of just
compensation. Notwithstanding the fact that petitioner only occupies the sub-
terrain portion, it is liable to pay not merely an easement fee but rather the
full compensation for land. This is so because in this case, the nature of the
easement practically deprives the owners of its normal beneficial use.
Respondents, as the owner of the property thus expropriated, are entitled to a
just compensation which should be neither more nor less, whenever it is
possible to make the assessment, than the money equivalent of said property.
[35]

Here, like in National Power Corporation v. Ibrahim,  NPC constructed a tunnel

underneath the land of the Heirs of Macabangkit without going through formal
expropriation proceedings and without procuring their consent or at least informing
them beforehand of the construction. NPC's construction adversely affected the owners'
rights and interests because the subterranean intervention by NPC prevented them
from introducing any developments on the surface, and from disposing of the land or
any portion of it, either by sale or mortgage.

Did such consequence constitute taking of the land as to entitle the owners to just
compensation?

We agree with both the RTC and the CA that there was a full taking on the part of NPC,
notwithstanding that the owners were not completely and actually dispossessed. It is
settled that the taking of private property for public use, to be compensable, need not
be an actual physical taking or appropriation.[36] Indeed, the expropriator's action may
be short of acquisition of title, physical possession, or occupancy but may still amount
to a taking.[37] Compensable taking includes destruction, restriction, diminution, or
interruption of the rights of ownership or of the common and necessary use and
enjoyment of the property in a lawful manner, lessening or destroying its value.[38] It is
neither necessary that the owner be wholly deprived of the use of his property,[39] nor
material whether the property is removed from the possession of the owner, or in any
respect changes hands.[40]

As a result, NPC should pay just compensation for the entire land. In that regard, the
RTC pegged just compensation at P500.00/square meter based on its finding on what
the prevailing market value of the property was at the time of the filing of the
complaint, and the CA upheld the RTC.

We affirm the CA, considering that NPC did not assail the valuation in the CA and in this
Court. NPC's silence was probably due to the correctness of the RTC's valuation after
careful consideration and weighing of the parties' evidence, as follows:

The matter of what is just compensation for these parcels of land is a matter of
evidence. These parcels of land is (sic) located in the City of Iligan, the Industrial City
of the South. Witness Dionisio Banawan, OIC- City Assessor's Office, testified, "Within
that area, that area is classified as industrial and residential. That plaintiffs' land is
adjacent to many subdivisions and that is within the industrial classification. He testified
and identified Exhibit "AA" and "AA-1", a Certification, dated April 4, 1997, showing that
the appraised value of plaintiffs land ranges from P400.00 to P500.00 per square meter
(see, TSN, testimony of Dionisio Banawan, pp. 51, 57, and 71, February 9, 1999). Also,
witness Banawan, testified and identified Two (2) Deeds of Sale, marked as Exhibit
"AA-2" and "AA-3,["] showing that the appraised value of the land adjoining or adjacent
to plaintiff land ranges from P700.00 to P750.00 per square meter. As between the
much lower price of the land as testified by defendant's witness Gregorio Enterone, and
that of the City Assessor of Iligan City, the latter is more credible. Considering however,
that the appraised value of the land in the area as determined by the City Assessor's
Office is not uniform, this Court, is of the opinion that the reasonable amount of just
compensation of plaintiff's land should be fixed at FIVE HUNDRED (500.00) PESOS, per
square meter. xxx.[41]

The RTC based its fixing of just compensation ostensibly on the prevailing market value
at the time of the filing of the complaint, instead of reckoning from the time of the
taking pursuant to Section 3(h) of Republic Act No. 6395. The CA did not dwell on the
reckoning time, possibly because NPC did not assign that as an error on the part of the
RTC.

We rule that the reckoning value is the value at the time of the filing of the complaint,
as the RTC provided in its decision. Compensation that is reckoned on the market value
prevailing at the time either when NPC entered or when it completed the tunnel, as NPC
submits, would not be just, for it would compound the gross unfairness already caused
to the owners by NPC's entering without the intention of formally expropriating the
land, and without the prior knowledge and consent of the Heirs of Macabangkit. NPC's
entry denied elementary due process of law to the owners since then until the owners
commenced the inverse condemnation proceedings. The Court is more concerned with
the necessity to prevent NPC from unjustly profiting from its deliberate acts of denying
due process of law to the owners. As a measure of simple justice and ordinary fairness
to them, therefore, reckoning just compensation on the value at the time the owners
commenced these inverse condemnation proceedings is entirely warranted.

In National Power Corporation v. Court of Appeals,[42]  a case that involved the similar
construction of an underground tunnel by NPC without the prior consent and knowledge
of the owners, and in which we held that the basis in fixing just compensation when the
initiation of the action preceded the entry into the property was the time of the filing of
the complaint, not the time of taking,[43] we pointed out that there was no taking when
the entry by NPC was made "without intent to expropriate or was not made under
warrant or color of legal authority."

4.
Awards for rentals, moral damages, exemplary
damages, and attorney's fees are deleted
for insufficiency of factual and legal bases

The CA upheld the RTC's granting to the Heirs of Macabangkit of rentals of P

30,000.00/month "from 1979 up to July 1999 with 12% interest per annum" by finding
NPC guilty of bad faith in taking possession of the land to construct the tunnel without
their knowledge and consent.

Granting rentals is legally and factually bereft of justification, in light of the taking of
the land being already justly compensated. Conformably with the ruling in Manila
International Airport Authority v. Rodriguez,[44] in which the award of interest was held
to render the grant of back rentals unwarranted, we delete the award of back rentals
and in its place prescribe interest of 12% interest per annum from November 21, 1997,
the date of the filing of the complaint, until the full liability is paid by NPC. The
imposition of interest of 12% interest per annum follows a long line of pertinent
jurisprudence,[45] whereby the Court has fixed the rate of interest on just compensation
at 12% per annum whenever the expropriator has not immediately paid just
compensation.

The RTC did not state any factual and legal justifications for awarding to the Heirs of
Macabangkit moral and exemplary damages each in the amount of P200,000.00. The
awards just appeared in the fallo of its decision. Neither did the CA proffer any
justifications for sustaining the RTC on the awards. We consider the omissions of the
lower courts as pure legal error that we feel bound to correct even if NPC did not
submit that for our consideration. There was, to begin with, no factual and legal bases
mentioned for the awards. It is never trite to remind that moral and exemplary
damages, not by any means liquidated or assessed as a matter of routine, always
require evidence that establish the circumstances under which the claimant is entitled
to them. Moreover, the failure of both the RTC and the CA to render the factual and
legal justifications for the moral and exemplary damages in the body of their decisions
immediately demands the striking out of the awards for being in violation of the
fundamental rule that the decision must clearly state the facts and the law on which it
is based. Without the factual and legal justifications, the awards are exposed as the
product of conjecture and speculation, which have no place in fair judicial adjudication.

We also reverse and set aside the decree of the RTC for NPC to pay to the Heirs of
Macabangkit "the sum equivalent to 15% of the total amount awarded, as attorney's
fees, and to pay the cost." The body of the decision did not state the factual and legal
reasons why NPC was liable for attorney's fees. The terse statement found at the end of
the body of the RTC's decision, stating: "xxx The contingent attorney's fee is hereby
reduced from 20% to only 15% of the total amount of the claim that may be awarded
to plaintiffs," without more, did not indicate or explain why and how the substantial
liability of NPC for attorney's fees could have arisen and been determined.

In assessing attorney's fees against NPC and in favor of the respondents, the RTC
casually disregarded the fundamental distinction between the two concepts of
attorney's fees -- the ordinary and the extraordinary. These concepts were aptly
distinguished in Traders Royal Bank Employees Union-Independent v. NLRC,
[46]
  thuswise:

There are two commonly accepted concepts of attorney's fees, the so-called ordinary
and extraordinary. In its ordinary concept, an attorney's fee is the reasonable
compensation paid to a lawyer by his client for the legal services he has rendered to the
latter. The basis of this compensation is the fact of his employment by and his
agreement with the client.

In its extraordinary concept, an attorney's fee is an indemnity for damages ordered by

the court to be paid by the losing party in a litigation. The basis of this is any of the
cases provided by law where such award can be made, such as those authorized in
Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they
have agreed that the award shall pertain to the lawyer as additional compensation or as
part thereof.

By referring to the award as contingency fees, and reducing the award from 20% to
15%, the RTC was really referring to a supposed agreement on attorney's fees between
the Heirs of Macabangkit and their counsel. As such, the concept of attorney's fees
involved was the ordinary. Yet, the inclusion of the attorney's fees in the judgment
among the liabilities of NPC converted the fees to extraordinary. We have to disagree
with the RTC thereon, and we express our discomfort that the CA did not do anything to
excise the clearly erroneous and unfounded grant.

An award of attorney's fees has always been the exception rather than the rule. To
start with, attorney's fees are not awarded every time a party prevails in a suit.[47]  Nor
should an adverse decision ipso facto justify an award of attorney's fees to the winning
party.[48] The policy of the Court is that no premium should be placed on the right to
litigate.[49] Too, such fees, as part of damages, are assessed only in the instances
specified in Art. 2208, Civil Code.[50] Indeed, attorney's fees are in the nature of actual
damages.[51] But even when a claimant is compelled to litigate with third persons or to
incur expenses to protect his rights, attorney's fees may still be withheld where no
sufficient showing of bad faith could be reflected in a party's persistence in a suit other
than an erroneous conviction of the righteousness of his cause.[52] And, lastly, the trial
court must make express findings of fact and law that bring the suit within the
exception. What this demands is that the  factual, legal or equitable  justifications  for 
the  award must be set forth

not only in the fallo but also in the text of the decision, or else, the award should be
thrown out for being speculative and conjectural.[53]

Sound policy dictates that even if the NPC failed to raise the issue of attorney's fees, we
are not precluded from correcting the lower courts' patently erroneous application of
the law.[54] Indeed, the Court, in supervising the lower courts, possesses the ample
authority to review legal matters like this one even if not specifically raised or assigned
as error by the parties.

5.
Attorney's fees under quantum meruit principle
are fixed at 10% of the judgment award

Based on the pending motions of Atty. Macarupung Dibaratun and Atty. Manuel D.
Ballelos to assert their respective rights to attorney's fees, both contending that they
represented the Heirs of Macabangkit in this case, a conflict would ensue from the
finality of the judgment against NPC.

A look at the history of the legal representation of the Heirs of Macabangkit herein
provides a helpful predicate for resolving the conflict.

Atty. Dibaratun was the original counsel of the Heirs of Macabangkit. When the appeal
was submitted for decision in the CA,[55] Atty. Ballelos filed his entry of appearance,
[56]
 and a motion for early decision.[57] Atty. Ballelos subsequently filed also  a 
manifestation,[58]  supplemental manifestation,[59]

reply,[60] and ex parte motion reiterating the motion for early decision.[61] It appears

that a copy of the CA's decision was furnished solely to Atty. Ballelos. However, shortly
before the rendition of the decision, Atty. Dibaratun filed in the CA a motion to register
attorney's lien,[62] alleging that he had not withdrawn his appearance and had not been
aware of the entry of appearance by Atty. Ballelos. A similar motion was also received
by the Court from Atty. Dibaratun a few days after the petition for review was filed.
[63]
 Thus, on February 14, 2005,[64] the Court directed Atty. Dibaratun to enter his
appearance herein. He complied upon filing the comment.[65]

Amir Macabangkit confirmed Atty. Dibaratun's representation through an ex

parte manifestation that he filed in his own behalf and on behalf of his siblings Mongkoy
and Putri.[66] Amir reiterated his manifestation on March 6, 2006,[67] and further imputed
malpractice to Atty. Ballelos for having filed an entry of appearance bearing Amir's
forged signature and for plagiarism, i.e., copying verbatim the arguments contained in
the pleadings previously filed by Atty. Dibaratun.[68]

On September 11, 2008, Atty. Ballelos submitted two motions, to wit: (a) a
manifestation and motion authorizing a certain Abdulmajeed Djamla to receive his
attorney's fees equivalent of 15% of the judgment award,[69] and (b) a motion to
register his attorney's lien that he claimed was contingent.[70]

Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorney's fees
was contingent. Yet, a contract for a contingent fees is an agreement in writing by
which the fees, usually a fixed percentage of what may be recovered in the action, are
made to depend upon the success in the effort to enforce or defend a supposed right.
Contingent fees depend upon an express contract, without which the attorney can only
recover on the basis of quantum meruit.[71] With neither Atty. Dibaratun nor Atty.
Ballelos presenting a written agreement bearing upon their supposed contingent fees,
the only way to determine their right to appropriate attorney's fees is to apply the
principle of quantum meruit.

Quantum meruit - literally meaning as much as he deserves  -  is used as basis for

determining an attorney's professional fees in the absence of an express agreement.
[72]
 The recovery of attorney's fees on the basis of quantum meruit is a device that
prevents an unscrupulous client from running away with the fruits of the legal services
of counsel without paying for it and also avoids unjust enrichment on the part of the
attorney himself.[73] An attorney must show that he is entitled to reasonable
compensation for the effort in pursuing the client's cause, taking into account certain
factors in fixing the amount of legal fees.[74]

Rule 20.01 of the Code of Professional Responsibility lists the guidelines for determining

the proper amount of attorney fees, to wit:

Rule 20.1 - A lawyer shall be guided by the following factors in determining his fees:

a) The time spent and the extent of the services rendered or required;
b) The novelty and difficult of the questions involved;

c) The important of the subject matter;

d) The skill demanded;

e) The probability of losing other employment as a result of acceptance of the proffered

case;

f) The customary charges for similar services and the schedule of fees of the IBP
chapter to which he belongs;

g) The amount involved in the controversy and the benefits resulting to the client from
the service;

h) The contingency or certainty of compensation;

i) The character of the employment, whether occasional or established; and

j) The professional standing of the lawyer.

In the event of a dispute as to the amount of fees between the attorney and his client,
and the intervention of the courts is sought, the determination requires that there be
evidence to prove the amount of fees and the extent and value of the services
rendered, taking into account the facts determinative thereof.[75] Ordinarily, therefore,
the determination of the attorney's fees on quantum meruit is remanded to the lower
court for the purpose. However, it will be just and equitable to now assess and fix the
attorney's fees of both attorneys in order that the resolution of "a comparatively simple
controversy," as Justice Regalado put it in Traders Royal Bank Employees Union-
Independent v. NLRC,[76] would not be needlessly prolonged, by taking into due
consideration the accepted guidelines and so much of the pertinent data as are extant
in the records.

Atty. Dibaratun and Atty. Ballelos each claimed attorney's fees equivalent to 15% of the
principal award of P113,532,500.00, which was the amount granted by the RTC in its
decision. Considering that the attorney's fees will be defrayed by the Heirs of
Macabangkit out of their actual recovery from NPC, giving to each of the two attorney's
15% of the principal award as attorney's fees would be excessive and unconscionable
from the point of view of the clients. Thus, the Court, which holds and exercises the
power to fix attorney's fees on a quantum meruit basis in the absence of an express
written agreement between the attorney and the client, now fixes attorney's fees at
10% of the principal award of P113,532,500.00.

Whether it is Atty. Dibaratun or Atty. Ballelos, or both, who should receive attorney's
fees from the Heirs of Macabangkit is a question that the Court must next determine
and settle by considering the amount and quality of the work each performed and the
results each obtained.

Atty. Dibaratun, the attorney from the outset, unquestionably carried the bulk of the
legal demands of the case. He diligently prepared and timely filed in behalf of the Heirs
of Macabangkit every pleading and paper necessary in the full resolution of the dispute,
starting from the complaint until the very last motion filed in this Court. He consistently
appeared during the trial, and examined and cross-examined all the witnesses
presented at that stage of the proceedings. The nature, character, and substance of
each pleading and the motions he prepared for the Heirs of Macabangkit indicated that
he devoted substantial time and energy in researching and preparing the case for the
trial. He even advanced P250,000.00 out of his own pocket to defray expenses from the
time of the filing of the motion to execute pending appeal until the case reached the
Court.[77] His representation of all the Heirs of Macabangkit was not denied by any of
them.

We note that Atty. Dibaratun possessed some standing in the legal profession and in his
local community. He formerly served as a member of the Board of Director of the
Integrated Bar of the Philippines (IBP), Lanao del Norte-Iligan City Chapter, and was an
IBP national awardee as Best Legal Aid Committee Chairman. He taught at Mindanao
State University College of Law Extension. He was a Municipal Mayor of Matungao,
Lanao del Norte, and was enthroned Sultan a Gaus.

In contrast, not much about the character and standing of Atty. Ballelos, as well as the
nature and quality of the legal services he rendered for  the  Heirs of Macabangkit are
in the records.  The motions he filed in the

Court and in the CA lacked enlightening research and were insignificant to the success
of the clients' cause. His legal service, if it can be called that, manifested no depth or
assiduousness, judging from the quality of the pleadings from him. His written
submissions in the case appeared either to have been lifted verbatim from the
pleadings previously filed by Atty. Dibaratun, or to have been merely quoted from the
decisions and resolutions of the RTC and the CA. Of the Heirs of Macabangkit, only
Cebu, Batowa-an, Sayana, Nasser, Manta, Mongkoy[78] and Edgar gave their consent to
Atty. Ballelos to appear in their behalf in the CA, which he did despite Atty. Dibaratun
not having yet filed any withdrawal of his appearance. The Court did not receive any
notice of appearance for the Heirs of Macabangkit from Atty. Ballelos, but that capacity
has meanwhile become doubtful in the face of Amir's strong denial of having retained
him.

In fairness and justice, the Court accords full recognition to Atty. Dibaratun as the
counsel de parte of the Heirs of Macabangkit who discharged his responsibility in the
prosecution of the clients' cause to its successful end. It is he, not Atty. Ballelos, who
was entitled to the full amount of attorney's fees that the clients ought to pay to their
attorney. Given the amount and quality of his legal work, his diligence and the time he
expended in ensuring the success of his prosecution of the clients' cause, he deserves
the recognition, notwithstanding that some of the clients might appear to have retained
Atty. Ballelos after the rendition of a favorable judgment.[79]

Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and Edgar,
the only parties who engaged him. The Court considers his work in the case as very
minimal. His compensation under the quantum meruit principle is fixed at P5,000.00,
and only the Heirs of Macabangkit earlier named are liable to him.
WHEREFORE, the Court AFFIRMS the decision promulgated on October 5, 2004 by
the Court of Appeals, subject to the following MODIFICATIONS, to wit:

(a) Interest at the rate of 12% per annum is IMPOSED on the principal amount of

P113,532,500.00 as just compensation, reckoned from the filing of the complaint on
November 21, 1997 until the full liability is paid;

(b)  The awards of P30,000.00 as rental fee, P200,000.00 as moral damages, and
P200,000.00 as exemplary damages are DELETED; and

(c)  The award of 15% attorney's fees decreed to be paid by National Power Corporation
to the Heirs of Macabangkit is DELETED.

The Court PARTLY GRANTS the motion to register attorney's lien filed by Atty.

Macarupung Dibaratun, and FIXES Atty. Dibaratun's attorney's fees on the basis
of quantum meruit at 10% of the principal award of P113,532,500.00.

The motion to register attorney's lien of Atty. Manuel D.  Ballelos is PARTLY
GRANTED, and Atty. Ballelos is DECLARED ENTITLED TO RECOVER from Cebu,
Batowa-an, Sayana, Nasser, Manta and Edgar, all surnamed Macabangkit, the amount
of P5,000.00 as attorney's fees on the basis of quantum meruit.

Costs of suit to be paid by the petitioner.

SO ORDERED.
 G.R. No. 203039, September 11, 2013

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF

PUBLIC WORKS AND HIGHWAYS (DPWH), Petitioner, v. BANK OF THE
PHILIPPINE ISLANDS (BPI), Respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review1 assailing the Decision2 dated 14 September

2011 and Resolution3 dated 06 August 2012 of the Court of Appeals in CA-G.R. CV No.
79843, affirming the Order4 dated 03 February 2003 of the Regional Trial Court of Las
Piñas City in Civil Case No. LP 98-0031.

The Antecedent Facts

On 12 February 1998, the Department of Public Works and Highways (DPWH) filed with
the Regional Trial Court, National Capital Region, Las Piñas City, Branch 275 (trial
court), a case for expropriation against portions of the properties of Bank of the
Philippine Islands (BPI) and of Bayani Villanueva (Villanueva) situated in Pamplona, Las
Piñas City. DPWH needed 281 square meters of BPI’s lot covered by Transfer Certificate
of Title (TCT) No. T-59156 and 177 square meters from Villanueva’s lot covered by TCT
No. T-64556 for the construction of the Zapote-Alabang Fly-Over.5 cralaw virtualaw library

Neither BPI nor Villanueva objected to the propriety of the expropriation;6 hence, the
trial court constituted a Board of Commissioners to determine the just
compensation.7 In their Report dated 29 September 1998,8 the Board of Commissioners
recommended the amount of P40,000.00 per square meter as the fair market value. On
25 November 1998, the trial court in its Decision set the fair market value at
P40,000.00 per square meter:9
The property of BPI, which was affected, consists of 281 square meters and that of
Defendant Villanueva consists of 177 square meters. Hence the amount to be awarded
to the defendants shall be computed as follows: chanrobles virtua1aw 1ibrary

BPI – 281 sq. meters x P40,000.00 =

                  P11,240,000.00; and
Villanueva – 177 sq. meters x P40,000.00 =
                  P7,080,000.00
Considering that the plaintiff has deposited the amount of P632,250.00 with respect to
the property of BPI, the latter should receive the amount of P10,607,750.00.

With respect to Defendant Villanueva, the plaintiff deposited the provisional amount of
P2,655,000.00, hence, the remaining amount to be paid is P4,425,000.00.

WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the

plaintiff Republic of the Philippines as represented by the Department of Public Works
and Highways to pay defendant Bank of the Philippine Islands the amount of TEN
MILLION SIX HUNDRED SEVEN THOUSAND AND SEVEN HUNDRED FIFTY PESOS
(P10,607,750.00) and Defendant Bayani Villanueva the amount of FOUR MILLION FOUR
HUNDRED TWENTY FIVE THOUSAND (P4,425,000.00), as just compensation for their
properties which were expropriated.10
On 15 December 1998, the acting branch clerk of court issued a Certification11 stating
that:chanrobles virtua1aw 1ibrary

x x x the Decision in this case dated November 25, 1998 has become FINAL,
EXECUTORY and UNAPPEALABLE as of December 11, 1998 considering that the Office of
the Solicitor General failed to file any Notice of Appeal or Motion for Reconsideration
despite receipt of a copy thereof on November 26, 1998.

This certification is being issued upon the request of Atty. Jansen Rodriguez for
whatever legal purpose it may serve.
Meanwhile, BPI filed on 16 December 1998 a Motion for Partial New Trial12 to determine
the just compensation of its building, which was not included in the Decision dated 25
November 1998 that fixed the just compensation for the parcels of land. In the motion,
BPI claimed that its motion was timely filed since it received a copy of the Decision on
01 December 1998.13 The trial court granted partial new trial in an Order dated 06
January 1999.

Due to the failure of counsel for petitioner, despite notice, to appear during the
scheduled hearing for the determination of the just compensation of the building, the
trial court allowed BPI to present its evidence ex-parte.14 On 01 September 1999, the
trial court admitted the exhibits presented by BPI.15 On the same day, the trial court
also appointed as commissioner the Officer-In-Charge of the trial court, Leticia B.
Agbayani (Agbayani), and ordered her to conduct an ocular inspection of the
building.16 Agbayani reported the following findings: chanrobles virtua1aw 1ibrary

a) That the undersigned found out that a new building was constructed and a picture of said
building is hereto attached and made as an integral part hereof as Annex “A” and;
b) That the building was moved back when it was constructed to conform with the requirement
of the Building Code; and
c) Improvements were introduced around the building.17
In its Decision dated 10 September 1999,18 the trial court held that just compensation
for the building was due and ordered petitioner to pay BPI the amount of
P2,633,000.00. The dispositive portion of the Decision reads: chanrobles virtua1aw 1ibrary

WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby rendered ordering the

plaintiff Republic of the Philippines represented by the Department of Public Works and
Highways to pay defendant Bank of the Philippine Island (sic) the amount of TWO
MILLION SIX HUNDRED THIRTY THREE [THOUSAND] PESOS (PHP2,633,000.00).19
Petitioner moved for the reconsideration20 of the 10 September 1999 Decision on the
ground that the proceeding fixing the just compensation of the building is null and void
for not complying with the mandatory procedure set forth in Sections 5 to 8 of Rule 67
of the Rules of Court.21 cralaw virtualaw library

After due hearing, the trial court granted on 14 February 2000 petitioner’s motion for
reconsideration and ordered that the Decision dated 10 September 1999 be set aside
and vacated.22 From this order, BPI filed a motion for reconsideration,23 on the ground
that there was substantial compliance with the Rules. The trial court denied BPI’s
motion for reconsideration.24 cralaw virtualaw library
On 19 September 2000, the trial court appointed Atty. Edgar Allan C. Morante, the
branch clerk of court, as the chairman of the Board of Commissioners, and gave
petitioner and BPI ten days to submit their respective nominees and their oaths of
office.25 On 28 September 2000, BPI nominated Roland Savellano (Savellano), and
submitted his oath of office.26
cralaw virtualaw library

Instead of submitting its nominee, petitioner filed on 13 October 2000 a Manifestation

and Motion27 objecting to the propriety of paying just compensation for BPI’s building
and praying that BPI’s claim for additional just compensation be denied. Petitioner
claimed that the building was never taken by the government.28 In support, petitioner
attached a letter dated 12 September 2000 from the DPWH, addressed to the Solicitor
General. The letter states, in part: chanrobles virtua1aw 1ibrary

x x x the original plan affecting the subject property was not implemented. The width of
the sidewalk at the premises under consideration was actually reduced from 2.50 m to
2.35 m x x x to avoid the costly structure of that bank.29
In its opposition,30 BPI claimed that it was not aware that the original plan was not
implemented. It received no correspondence from the DPWH on the matter, except for
the letter dated 12 August 1997 from DPWH addressed to BPI, stating in part that: chanrobles virtua1aw 1ibrary

We regret to inform you that adjustment of the RROW limit of our project
along this section is not possible as it will affect the effective width of the
sidewalk designated at 2.50 m. wide.31 (Emphasis in the original)
BPI also argued that even “if a 3-meter setback is observed, only 75% of the old
building could be utilized x x x [and] cutting the support system of the building x x x
would affect the building’s structural integrity.”32 cralaw virtualaw library

On 07 May 2001, the trial court denied33 petitioner’s motion dated 09 October 2000,
and ruled that the demolition of the old building of BPI can be construed as a
consequential damage suffered by BPI as a result of the expropriation. Petitioner was
thus ordered to submit its nominee to the Board of Commissioners.

Petitioner nominated Romulo C. Gervacio (Gervacio), the Officer-In-Charge of the City

Assessor’s Office in Las Piñas City. The Board thus constituted, the trial court ordered
the Commissioners to submit their recommendation.

Commissioner for BPI Savellano recommended the amount of P2,633,000.00, which

was based on the appraisal conducted by an independent professional business and
property consultant.34 On the other hand, Commissioner for petitioner Gervacio
recommended the amount of P1,905,600.00, which was the market value indicated on
the tax declaration of said building. The Commissioner’s Report35 presented both the
recommendations of Savellano and Gervacio for the trial court’s consideration.

The Trial Court’s Ruling

The trial court issued the Order36 dated 03 February 2003, adopting the
recommendation of Gervacio of P1,905,600.00, thus: chanrobles virtua1aw 1ibrary

The Court approves the Recommendation dated October 22, 2001 of ONE MILLION
NINE HUNDRED FIVE THOUSAND SIX HUNDRED PESOS (P1,905,600.00) by
Commissioner ROMULO C. GERVACIO as the just compensation of the building of the
Bank of the Philippine Islands (BPI) Zapote affected by the construction of the Zapote-
Alabang Fly-over, it appearing that such amount is the existing market value of the
property pursuant to the Declaration by BPI as the market value of the building affected
by the project as contained in Tax Declaration D-006-02044.

Let the same amount be paid by the Republic of the Philippines through the Department
of Public Works and Highways as the just compensation for the property.37
Petitioner filed an appeal with the Court of Appeals docketed as CA-G.R. CV No.
79843.38cralaw virtualaw library

The Court of Appeals’ Ruling

On 14 September 2011, the Court of Appeals dismissed the appeal and affirmed the
order of the trial court. The relevant portions of the decision state:chanrobles virtua1aw 1ibrary

We cannot sustain plaintiff-appellant’s proposition that the decision dated November

25, 1998 has already attained finality there being no appeal filed within the
reglementary period as provided in Secion 3, Rule 41 of the 1997 Rules of Civil
Procedure.

Pursuant to Section 1, Rule 37 of the Rules of Civil Procedure, the period within which
an aggrieved party may move the trial court to set aside the judgment or final order
and file a motion for new trial is within the period to file an appeal, which is fifteen (15)
days from receipt of the judgment or final order. It is explicit from the stated provision
that the fifteen day period to file a motion for new trial will start to run from receipt of
judgment or final order. A judgment, final order or resolution shall be served upon a
party either personally or through registered mail. Moreover, Section 13 of Rule 13 of
the Rules of Civil Procedure specifically provides for the proof of service of judgments,
final orders or resolution x x x.

xxxx

Guided by the foregoing provisions of law, the crucial fact in which the finality of the
decision dated November 25, 1998 with respect to defendant-appellee, depends in the
determination of the date of its receipt of the copy of the said decision in order to
ascertain whether its motion for partial new trial was filed within the 15-day period
allowed by law.

In this case, records bear that a copy of the decision dated November 25, 1998,
ordering the payment of just compensation for the expropriated land was received in
behalf of defendant Bayani Villanueva on the same day of its promulgation. A copy of
the said decision was also served upon plaintiff-appellant through the OSG on
November 26, 1998. However, there is no showing, that defendant-appellee through its
counsel received a copy of the trial court’s decision on a definite date. No official return
nor affidavit of the party serving the decision was attached to the records of the case.
Neither was the presence of a registry receipt issued by the mailing office nor a registry
return card containing the date of receipt of the decision be found among its records.
Since there was no showing as to the exact date of receipt of defendant-appellee of the
said decision, the running of the period of 15 days within which to file a motion for new
trial did not begin to run. Therefore, the filing of defendant-appellee of a motion
for partial new trial on December 16, 1998 was never delayed but timely filed
thus preventing the decision dated November 25, 1998 from attaining finality
as against them. Moreover, We find the admission of defendant-appellee in its
brief filed on June 2, 2005, that it received a copy of the trial court’s decision
on December 1, 1998, sufficient to comply with the requirement of a written
admission of a party served with a judgment as provided in Sec. 13 of Rule 13, of the
Rules of Civil Procedure. It should also be noted that the certification issued by
Edgar Allan C. Morante, the acting clerk of court, as to the finality of judgment
as of December 11, 1998 will not stand against defendant-appellee because
the 15-day period to file an appeal will only start to commence upon the
receipt of the decision which is on December 1, 1998. Counting the 15-day period
from the first of December, the period within which to file an appeal will expire on
December 16, 1998. Thus, the trial court did not err in granting the motion for partial
new trial of the defendant-appellee as the same was amply filed with the reglementary
period prescribed by law.

Having settled that the motion for partial new trial was timely filed, We now rule that
the trial court did not lose its jurisdiction when it conducted subsequent proceedings
determining just compensation and later on directed plaintiff-appellant to pay additional
just compensation in the amount of P1,905,600.00 for the building of defendant-
appellee.

Lastly, as to the argument of plaintiff-appellant that the award of additional just

compensation for the building of defendant-appellee is erroneous and without legal
basis because the building was never taken by the government in the expropriation
proceeding conducted by the trial court nor was it affected by the construction of the
Zapote-Alabang Flyover, We find the ruling of Republic of the Philippines through the
DPWH vs. CA and Rosario R. Reyes appropriate to apply in this case, to wit: chanrobles virtua1aw 1ibrary

Petitioner contends that no consequential damages may be awarded as the remaining

lot was not “actually taken” by the DPWH, and to award consquential damages for the
lot which was retained by the owner is tantamount to unjust enrichment on the part of
the latter.

Petitioner’s contention is unmeritorious.

No actual taking of the remaining portion of the real property is necessary to grant
consequential damages. If as a result of the expropriation made by petitioner, the
remaining lot (i.e., the 297-square meter lot) of private respondent suffers from an
impairment or decrease in value, consequential damages may be awarded to private
respondent.
WHEREFORE, in view of the foregoing considerations, the instant appeal is
hereby DISMISSED. The assailed order of the Regional Trial Court of Las Piñas, Branch
275 dated February 3, 2003 is AFFIRMED in toto.39 (Emphasis and underscoring
supplied; italicization in the original.)
Petitioner filed a Motion for Reconsideration.40 This was denied by the appellate court in
a Resolution dated 06 August 2012.41 cralaw virtualaw library

The Issues

The issues for our resolution are: (1) whether the trial court’s Decision dated 25
November 1998 had become final and executory before BPI filed its motion for partial
new trial; and (2) whether the award of additional just compensation for BPI’s building
in the amount fixed therefor is unfounded and without legal basis.

The Court’s Ruling

We find the appeal unmeritorious.

On whether BPI’s motion for partial new trial was filed out of time

Petitioner contends that the trial court’s Decision dated 25 November 1998 had already
become final and executory as of 11 December 1998, as stated in the
Certification42 issued by the acting branch clerk of court. On the other hand, BPI asserts
that its motion for partial new trial filed on 16 December 1998 was timely filed because
it received a copy of the Decision on 01 December 1998.

Petitioner argues that the Court of Appeals erred in holding that the 25 November 1998
Decision did not become final and executory for BPI on 11 December 1998. It argues
that the appellate court erred in reckoning the 15-day reglementary period from a mere
admission of the date of receipt by BPI. Petitioner further argues that the Certification
issued by the acting branch clerk of the trial court enjoys a presumption of regularity
and that BPI had not been able to overcome the presumption. Both the trial and
appellate courts found that BPI’s motion for partial new trial was filed on time.

A perusal of the Certification reveals that it certifies that the 25 November 1998
Decision had already become final, executory and unappealable as to petitioner: chanrobles virtua1aw 1ibrary

x x x the Decision in this case dated November 25, 1998 has become FINAL,
EXECUTORY and UNAPPEALABLE as of December 11, 1998 considering that the
Office of the Solicitor General failed to file any Notice of Appeal or Motion for
Reconsideration despite receipt of a copy thereof on November 26, 1998.

This certification is being issued upon the request of Atty. Jansen Rodriguez for
whatever legal purpose it may serve.43 (Emphasis supplied)
There can be no other reading of this certificate that would be supported by the record.

Section 9 of Rule 13 of the Rules of Court states that judgments, final orders or
resolutions shall be served either personally or by registered mail. Section 13 of the
same Rule provides what consists proof of service: chanrobles virtua1aw 1ibrary

Proof of personal service shall consist of a written admission of the party served, or the
official return of the server, or the affidavit of the party serving, containing a full
statement of the date, place and manner of service. x x x If service is made by
registered mail, proof shall be made by such affidavit and the registry receipt issued by
the mailing office. The registry return card shall be filed immediately upon its receipt by
the sender x x x.
A careful review of the record shows the absence of any proof that the Decision of 25
November 1998 was served upon BPI. Hence, the Court of Appeals correctly held that
absent any proof of service to BPI of the Decision, the period of 15 days within which to
file its motion for partial new trial did not begin to run against BPI. However, BPI’s
admission that it received a copy of the Decision on 01 December 1998 is binding on it,
and was correctly considered by the Court of Appeals as the reckoning date to count
the 15-day period.
 On whether the award of additional just compensation and the amount fixed
therefor was unfounded and without legal basis

Eminent domain is the authority and right of the State, as sovereign, to take private
property for public use upon observance of due process of law and payment of just
compensation.44 The State’s power of eminent domain is limited by the constitutional
mandate that private property shall not be taken for public use without just
compensation.45 cralaw virtualaw library

Just compensation is the full and fair equivalent of the property sought to be
expropriated.46 The general rule is that the just compensation to which the owner of the
condemned property is entitled to is the market value.47 Market value is that sum of
money which a person desirous but not compelled to buy, and an owner willing but not
compelled to sell, would agree on as a price to be paid by the buyer and received by
the seller. The general rule, however, is modified where only a part of a certain
property is expropriated.48 In such a case, the owner is not restricted to compensation
for the portion actually taken, he is also entitled to recover the consequential damage,
if any, to the remaining part of the property.49cralaw virtualaw library

In this case, petitioner questions the appellate court’s Decision affirming the trial court’s
Order of 03 February 2003 granting additional just compensation for consequential
damages for BPI’s building. Petitioner contends that BPI’s building was “never taken” by
petitioner, and that to award consequential damages for the building was unfounded
and without legal basis. In support of its contention, petitioner relies on the letter dated
12 September 2000 of the DPWH to the Office of the Solicitor General50 stating that the
proposed sidewalk of 2.50 meters was reduced to 2.35 meters, thus leaving BPI’s
building intact.

Petitioner’s argument is untenable.

No actual taking of the building is necessary to grant consequential damages.

Consequential damages are awarded if as a result of the expropriation, the remaining
property of the owner suffers from an impairment or decrease in value.51 The rules on
expropriation clearly provide a legal basis for the award of consequential damages.
Section 6 of Rule 67 of the Rules of Court provides: chanrobles virtua1aw 1ibrary

x x x The commissioners shall assess the consequential damages to the property not
taken and deduct from such consequential damages the consequential benefits to be
derived by the owner from the public use or public purpose of the property taken, the
operation of its franchise by the corporation or the carrying on of the business of the
corporation or person taking the property. But in no case shall the consequential
benefits assessed exceed the consequential damages assessed, or the owner be
deprived of the actual value of his property so taken.
In B.H. Berkenkotter & Co. v. Court of Appeals,52 we held that: chanrobles virtua1aw 1ibrary

To determine just compensation, the trial court should first ascertain the market value
of the property, to which should be added the consequential damages after deducting
therefrom the consequential benefits which may arise from the expropriation. If the
consequential benefits exceed the consequential damages, these items should be
disregarded altogether as the basic value of the property should be paid in every case.
We quote with approval the ruling of the Court of Appeals: chanrobles virtua1aw 1ibrary
Lastly, as to the argument of plaintiff-appellant that the award of additional just
compensation for the building of defendant-appellee is erroneous and without legal
basis because the building was never taken by the government in the expropriation
proceeding conducted by the trial court nor was it affected by the construction of the
Zapote-Alabang Flyover, We find the ruling of Republic of the Philippines through the
DPWH vs. CA and Rosario R. Reyes appropriate to apply in this case, to wit: chanrobles virtua1aw 1ibrary

Petitioner contends that no consequential damages may be awarded as the remaining

lot was not “actually taken” by the DPWH, and to award consquential damages for the
lot which was retained by the owner is tantamount to unjust enrichment on the part of
the latter.

Petitioner’s contention is unmeritorious.

No actual taking of the remaining portion of the real property is necessary to grant
consequential damages. If as a result of the expropriation made by petitioner, the
remaining lot (i.e., the 297-square meter lot) of private respondent suffers from an
impairment or decrease in value, consquential damages may be awarded to private
respondent.53 (Italicization in the original)
Petitioner would also have us review the bases of the courts below in awarding just
compensation for the building for consequential damages. The uniform findings of the
trial court and the appellate court are entitled to the greatest respect. They are binding
on the Court in the absence of a strong showing by petitioner that the courts below
erred in appreciating the established facts and in drawing inferences from such
facts.54 We find no cogent reason to deviate from this.

The Court would like to stress that there is a stark absence in the records of any proof
that DPWH communicated its amended plan to BPI or to the trial court. On the other
hand, the trial court found that BPI was not notified of the reduction and had relied only
on the DPWH letter dated 12 August 1997 saying that it was not possible to reduce
the width of the sidewalk. Petitioner had actively participated in the expropriation
proceedings of the portion of BPI’s lot according to the original plan, the decision for
which was promulgated on 25 November 1998. The trial court had also ruled that
additional just compensation for the building was in order in its Decision dated 10
September 1999, from which petitioner moved for reconsideration but only as to the
procedure in the determination of the amount. Further, the records show that by 07
September 1999, when Officer-In-Charge Agbayani conducted an occular inspection,
a new building had already been constructed replacing the old one; whereas the
amended plan was communicated by DPWH to the OSG only in September 2000,
when the trial court was constituting anew the Board of Commissioners to determine
the amount of just compensation for the building. The findings of the lower courts are
borne by the records. Hence, there was proper basis for the determination of just
compensation for the building for consequential damages.

WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals’ Decision dated

14 September 2011 and Resolution dated 06 August 2012 in CA-G.R. CV No. 79843. chanroblesvirtualawlibrary
G.R. No. 110478               October 15, 2007

FERMIN MANAPAT, 1 Petitioner,
vs.
COURT OF APPEALS and NATIONAL HOUSING AUTHORITY, Respondents.

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

G.R. No. 116176

DOMINGO LIM, Petitioner,
vs.
COURT OF APPEALS and NATIONAL HOUSING AUTHORITY, Respondents.

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

G.R. Nos. 116491-503

NATIONAL HOUSING AUTHORITY, Petitioner,

vs.
MAXIMO LOBERANES, ELADIO QUIMQUE, CESARIO VEGA, JUANITO SANTOS, ALEJANDRO
ORACION and GONZALO MERCADO, Respondents.

DECISION

NACHURA, J.:

For the resolution of the Court are three consolidated petitions for review on certiorari under Rule 45
of the Rules of Court. G.R. No. 110478 assails the May 27, 1993 Decision 2 of the Court of Appeals
(CA) in CA-G.R. CV Nos. 10200-10212. G.R. No. 116176 questions the June 28, 1994 Decision 3 of
the appellate court in CA-G.R. CV No. 27159. G.R. Nos. 116491-503 assails the March 2, 1994 and
the July 25, 1994 Resolutions4 of the CA also in CA-G.R. CV Nos. 10200-10212.

The three-decade saga of the parties herein has for its subject parcels of land forming part of what
was originally known as the Grace Park Subdivision in Caloocan City and formerly owned by the
Roman Catholic Archbishop of Manila (RCAM) and/or the Philippine Realty Corporation (PRC).

The Facts

Sometime in the 1960’s, RCAM allowed a number of individuals to occupy the Grace Park property
on condition that they would vacate the premises should the former push through with the plan to
construct a school in the area. The plan, however, did not materialize, thus, the occupants offered to
purchase the portions they occupied. Later, as they could not afford RCAM’s proposed price, the
occupants, organizing themselves as exclusive members of the Eulogio Rodriguez, Jr. Tenants
Association, Inc., petitioned the Government for the acquisition of the said property, its subdivision
into home lots, and the resale of the subdivided lots to them at a low price. 5

Acting on the association’s petition, the Government, in 1963, through the Land Tenure
Administration (LTA), later succeeded by the People’s Homesite and Housing Corporation (PHHC),
negotiated for the acquisition of the property from RCAM/PRC. But because of the high asking price
of RCAM and the budgetary constraints of the Government, the latter’s effort to purchase and/or to
expropriate the property was discontinued. RCAM then decided to effect, on its own, the subdivision
of the property and the sale of the individual subdivided lots to the public. 6 Petitioners Manapat and
Lim and respondents Loberanes, Quimque, Vega, Santos, Oracion and Mercado in these
consolidated cases were among those who purchased individual subdivided lots of Grace Park
directly from RCAM and/or PRC.7

A significant turn of events however happened in 1977 when the late President Ferdinand E. Marcos
issued Presidential Decree (PD) No. 1072,8 appropriating ₱1.2M out of the President’s Special
Operations Funds to cover the additional amount needed for the expropriation of Grace Park. The
National Housing Authority (NHA), PHHC’s successor, then filed several expropriation proceedings
over the already subdivided lots for the purpose of developing Grace Park under the Zonal
Improvement Program (ZIP) and subdividing it into small lots for distribution and resale at a low cost
to the residents of the area.9 The following cases were filed by the NHA with the Regional Trial Court
(RTC) of Caloocan City: C-6225, C-6226, C-6227, C-6228, C-6229, C-6230, C-6231, C-6232, C-
6233, C-6234, C-6235, C-6236, C-6237, C-6238, C-6255 and C-6435. 10

After due proceedings, the trial court rendered separate decisions dismissing the expropriation
cases, with the exceptions of Cases Nos. C-6233 and C-6236 in which it ordered the condemnation
of the involved lots.11 On motion for reconsideration by the NHA in Cases Nos. C-6227, C-6228, C-
6230, C-6234, C-6235, C-6238 and C-6255, the trial court later amended its decision, set aside its
dismissal of the said cases, ordered the condemnation of the involved lots and fixed the amount of
just compensation at ₱180.00 per square meter. In Cases Nos. C-6225, C-6229, C-6231, C-6232,
C-6237 and C-6435, the RTC however denied NHA’s motion for reconsideration. 12

NHA eventually appealed to the CA the decisions in Cases Nos. C-6225, C-6229, C-6231, C-6232,
C-6237 and C-6435 on the issue of the necessity of the taking, and the amended ruling in Cases
Nos. C-6227, C-6228, C-6230, C-6234, C-6235, C-6238 and C-6255 on the issue of just
compensation.13 The CA consolidated the appeals and docketed them as CA-G.R. CV No. 10200-
10212. NHA likewise filed with the CA an appeal from the decision in C-6226, which was docketed
as CA-G.R. CV No. 27159.

On May 27, 1993, the appellate court rendered its Decision 14 in CA-G.R. CV No. 10200-10212
disposing of the appealed cases as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

1) Reversing and setting aside the decisions of dismissal in Cases Nos. C-6225, C-6229, C-
6231, C-6232, C-6237 and C-6435; and in lieu thereof an order of condemnation is entered
declaring that plaintiff-appellant NHA has a lawful right to take the lots involved for the public
use described in the complaints;

2) Affirming the decisions in Case Nos. C-6227, C-6228, C-6234, C-6235, C-6238 and C-
6255 insofar as said decision granted the expropriation; declaring that plaintiff-appellant NHA
has a lawful right to take the lots involved for the public use stated in the complaint; but
annulling and setting aside the just compensation fixed by the trial court at ₱180.00 per
square meter in the said cases;

3) Ordering the remand of all the appealed cases, except for Case No. C-6230, to the trial
court for determination of the just compensation to which defendants are entitled in
accordance with Rule 67 of the Revised Rules of Court;
 4) Finding the compromise agreement in Case No. C-6230, entitled, "NHA v. Aurora Dy dela
Costa, et al." in accordance with law, and not contrary to morals or public policy, and
rendering judgment in accordance therewith;

5) Ordering Remedios Macato to be joined as defendant with Julia C. Diaz in Case No. C-
6227.

No pronouncement as to costs.

SO ORDERED.15

Rosemarie and Dolores Guanzon, two of the owners of the lots in C-6225, filed before this Court a
petition for review on certiorari of the aforesaid decision of the appellate court [Their petition was
docketed as G.R. Nos. 110462-74]. On September 5, 1994, we dismissed their petition for failure to
sufficiently show that the CA had committed any reversible error in the challenged decision. 16 An
Entry of Judgment was issued on February 2, 1995.17

Likewise, Julia Diez and Remedios Macato, the owners of the lots in C-6227, assailed before us the
afore-quoted CA decision through a petition under Rule 45. On July 28, 1993, however, in G.R. No.
110770, we denied their Motion for Extension of Time to file a petition for review on certiorari for their
failure to submit an affidavit of service of the motion as required by

Circular No. 19-91.18 After denying their motion for reconsideration, 19 we issued an Entry of Judgment
on August 27, 1993.20

Petitioner Manapat, the defendant-landowner in C-6229, also elevated the case before us via a
petition for review on certiorari docketed as G.R. No. 110478. 21 We initially dismissed this petition for
having been filed out of time,22 but we reinstated it on motion for reconsideration.23

In the meantime, the other defendants-landowners in the expropriation cases—RCAM/PRC in C-

6225, Maximo Loberanes and Eladio Quimque in C-6231, Alejandro Oracion, Gonzalo Mercado,
Cesario Vega and Juanito Santos in C-6435, and Remedios Macato in C-6227—moved for the
reconsideration of the said May 27, 1993 Decision of the CA.24 In the March 2, 1994 Resolution, 25 the
appellate court resolved the motions in this wise:

WHEREFORE, premises considered, the motion for reconsideration of movants Roman Catholic
Archbishop of Manila and Philippine Realty Corporation (in Special Civil Action No. 6225) and
movant-intervenor Remedios Macato (in Special Civil Action No. 6227) are DENIED.

The motions for reconsideration of movants Gonzalo Mercado, Cesario Vega and Juanito Santos (in
Special Civil Action No. 6435) and movants Maximo Loberanes and Eladio Quimque (in Special Civil
Action No. 6231) are GRANTED. The motion for reconsideration of movant Alejandro Oracion (in
Special Civil Action No. 6435) is partially granted to the extent of Three Hundred (300) square
meters of Lot 22, Block 157. The decision of this Court promulgated May 27, 1993 is accordingly
MODIFIED. Lot No. 26, Block No. 157 owned by Cesario Vega and Juanito Santos, and Lot No. 4,
Block No. 157 owned by Maximo Loberanes and Eladio Quimque are declared exempt from
expropriation and the corresponding complaints for expropriation (sic) DISMISSED insofar as said
lots are concerned. Lot No. 22, Block No. 157 owned by movant Alejandro Oracion is declared
exempt from expropriation to the extent of Three Hundred (300) square meters. Only the remaining
Ninety (90) square meters shall be the subject of expropriation, the portion to be determined by the
lower court in the manner most beneficial to the owner and consistent with the objective of PD 1072.
SO ORDERED.26

Aggrieved by the said March 2, 1994 CA Resolution specifically with regard to the exemption from
expropriation of the lots of Loberanes, Quimque, Mercado, Vega and Santos, and the partial
exemption of the lot of Oracion, NHA moved for the reconsideration of the same. In the subsequent
July 25, 1994 Resolution,27 the appellate court denied NHA’s motion, together with the belated
motion of Vivencio S. de Guzman, the defendant-landowner in C-6255. The dispositive portion of the
July 25, 1994 Resolution reads:

WHEREFORE, the motions for reconsideration of defendant-appellant Vivencio S. de Guzman of the

decision promulgated May 27, 1993 and of plaintiff-appellant National Housing Authority of the
resolution promulgated March 2, 1994 are DENIED.

SO ORDERED.28

With the denial of its motion for reconsideration, NHA filed with this Court a Consolidated Petition for
Review29 under Rule 45, as aforesaid, assailing the March 2, 1994 and the July 25, 1994 Resolutions
of the appellate court. NHA’s petition was docketed as G.R. Nos. 116491-503 against respondents
Loberanes and Quimque (in C-6231), Vega, Santos, Oracion and Mercado (in C-6435).

In a separate development, the CA, on June 28, 1994, rendered its Decision 30 in CA-G.R. CV No.
27159, reversing the RTC’s ruling in C-6226. The fallo of the decision reads:

WHEREFORE, FOREGOING PREMISES CONSIDERED, the appealed decision dated October 29,
1986 is hereby REVERSED for want of merit. Let the record of this case be remanded to the court of
origin for further proceedings.

IT IS SO ORDERED.31

Discontented with the appellate court’s ruling, petitioner Domingo Lim, one of the owners of the lots
subject of C-6226, elevated the case to us via a petition for review on certiorari docketed as G.R.
No. 116176.32

The Issues

Thus, for resolution by this Court are the following consolidated cases: (1) G.R. No. 110478 of
Manapat; (2) G.R. Nos. 116491-503 of the NHA; and (3) G.R. No. 116176 of Lim.

In G.R. No. 110487, petitioner Manapat argues in the main that, as he is also a member of the
tenant association, the beneficiary of the expropriation, it would be incongruous to take the land
away from him only to give it back to him as an intended beneficiary. Accordingly, the CA, in its May
27, 1993 Decision in CA-G.R. CV No. 10200-10212, should not have allowed the expropriation of his
lot. To further support his stance, Manapat raises the following grounds:

THE COURT OF APPEALS ERRED IN HOLDING THAT THE ISSUANCE MADE IN THE
EXERCISE OF LEGISLATIVE POWER, SPECIFYING THE LOTS TO BE EXPROPRIATED
AND THE PURPOSE FOR WHICH THEY ARE INTENDED, REMOVES FROM THE
JUDICIARY THE DETERMINATION OF THE NECESSITY OF THE TAKING, THERE
BEING NO SHOWING OF ABUSE OF DISCRETION.33
 II

SUPERVENING EVENT RENDERS IMPROPER THE DISPOSITION BY THE COURT OF

APPEALS FOR AN ORDER OF CONDEMNATION DECLARING THAT NHA HAS A
LAWFUL RIGHT TO TAKE THE LOT OF FERMIN MANAPAT FOR SUPPOSED PUBLIC
USE AND FOR REMAND OF HIS CASE TO THE TRIAL COURT FOR DETERMINATION
OF JUST COMPENSATION.34

III

THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT FERMIN MANAPAT IS

NOT ONLY A BONA FIDE OCCUPANT IN THE GRACE PARK SUBDIVISION FOR
PURPOSES OF P.D. 1072 BUT LIKEWISE HAS A TRANSFER CERTIFICATE OF TITLE
NO. 42370 OF THE REGISTRY OF DEEDS FOR THE CITY OF CALOOCAN OVER THE
SAME LOT SOUGHT TO BE EXPROPRIATED WHICH SHOULD NOT BE SUBJECT TO
COLLATERAL ATTACK AS DISPOSED BY THE COURT OF APPEALS. 35

IV

THE COURT OF APPEALS SHOULD HAVE CONSIDERED THAT THE EVENTUAL

BENEFICIARIES OF ITS BENEVOLENT EXPROPRIATION ARE SQUATTERS. 36

NHA, in its petition in G.R. Nos. 116491-503, primarily contends that the CA erred when it issued its
March 2, 1994 Resolution and modified the May 27, 1993 Decision in CA-G.R. CV No. 10200-10212
to the extent that it applied retroactively Article VI, Section 10 of Republic Act (R.A.) No. 7279, thus
exempting from expropriation the 300-sq m lots of respondents Loberanes, Quimque, Vega, Santos,
Oracion and Mercado. NHA summarized its arguments as follows:

The Honorable Court of Appeals erred in applying retroactively Article VI, Section 10 of Republic Act
No. 7279 to the subject expropriation cases instituted back in 1977 by petitioner-appellant NHA. 37

A. Republic Act 7279 passed in 1992 should operate prospectively and, therefore, should not
be given retroactive effect.38

Republic Act 7279 is a substantive and penal law with a penalty clause which cannot apply
retroactively especially to pending actions.39

B. Republic Act No. 7279 and PD 1072 are not in pari materia. 40

The retroactive application of Article VI, Section 10 of RA 7279 will affect vested rights of petitioner-
appellant NHA arising from its exercise of the power of eminent domain. 41

II

The Honorable Court of Appeals erred in ignoring the impractical consequences resulting from a
selective expropriation of lots.42

In G.R. No. 116176, petitioner Lim, a non-member of the tenant association who bought from
RCAM/PRC four lots of the subdivided Grace Park Subdivision, 43 argues as follows:
 1

Respondent NHA may not, as it would herein, legally re-group several smaller lots into which
a much bigger lot had previously been subdivided, and consider and treat them as one again
for the purpose of subdividing it once more into still smaller lots for distribution to its
supposed or intended beneficiaries. 44

There really was no genuine necessity for the expropriation of the lots in question to satisfy
the purpose thereof as alleged in the complaint therefor. 45

Respondent Court did not sustain the clear finding of the trial court that no evidence
sufficient to prove its claim that the expropriation of said lots and subdividing them again into
much smaller lots for resale to their present occupants would provide the latter with more
healthful, decent and peaceful surroundings and thus improve the quality of their lives was
ever presented by respondent NHA.46

Stripped of non-essentials, the petitions raise only one fundamental issue, and that is, whether the
NHA may validly expropriate the parcels of land subject of these cases.

The Court’s Ruling

The power of eminent domain is an inherent and indispensable power of the State. Also called the
power of expropriation, it is described as "the highest and most exact idea of property remaining in
the government" that may be acquired for some public purpose through a method "in the nature of a
compulsory sale to the State."47 By virtue of its sovereign character, the exercise of the power
prevails over the non-impairment clause,48 and is clearly superior to the final and executory judgment
rendered by a court in an ejectment case.49

Being inherent, the power need not be specifically conferred on the government by the Constitution.
Section 9, Article III of the Constitution, which mandates that "private property shall not be taken for
a public use without just compensation," merely imposes a limit on the government’s exercise of the
power and provides a measure of protection to the individual’s right to property. 50

Just like its two companion fundamental powers of the State, 51 the power of eminent domain is
exercised by the Legislature. However, it may be delegated by Congress to the President,
administrative bodies, local government units, and even to private enterprises performing public
services.52

Albeit the power partakes of a sovereign character, it is by no means absolute. Its exercise is subject
to limitations, one of which is, precisely, Section 9, Article III of the Constitution.

Over the years and in a plethora of cases, this Court has recognized the following requisites for the
valid exercise of the power of eminent domain: (1) the property taken must be private property; (2)
there must be genuine necessity to take the private property; (3) the taking must be for public use;
(4) there must be payment of just compensation; and (5) the taking must comply with due process of
law.53 Accordingly, the question that this Court must resolve is whether these requisites have been
adequately addressed.
It is incontrovertible that the parcels of land subject of these consolidated petitions are private
property. Thus, the first requisite is satisfied.

With respect to the second, it is well to recall that in Lagcao v. Judge Labra, 54 we declared that the
foundation of the right to exercise eminent domain is genuine necessity, and that necessity must be
of a public character. As a rule, the determination of whether there is genuine necessity for the
exercise is a justiciable question. 55 However, when the power is exercised by the Legislature, the
question of necessity is essentially a political question. 56 Thus, in City of Manila v. Chinese
Community,57 we held:

The legislature, in providing for the exercise of the power of eminent domain, may directly determine
the necessity for appropriating private property for a particular improvement for public use, and it
may select the exact location of the improvement. In such a case, it is well-settled that the utility of
the proposed improvement, the extent of the public necessity for its construction, the expediency of
constructing it, the suitableness of the location selected and the consequent necessity of taking the
land selected for its site, are all questions exclusively for the legislature to determine, and the courts
have no power to interfere, or to substitute their own views for those of the representatives of the
people.

In the instant cases, the authority to expropriate came from Presidential Decree No. 1072, issued by
then President Ferdinand E. Marcos in 1977. At that time, and as explicitly recognized under the
1973 Constitution, President Marcos had legislative powers. Perforce, the expropriation of the
subject properties – identified with specificity in the P.D. --- was directed by legislation. The issue of
necessity then assumed the nature of a political question.

As to the third requisite of "public use," we examine the purpose for which the expropriation was
undertaken by NHA. As set forth in its petition, NHA justifies the taking of the subject property for the
purpose of improving and upgrading the area by constructing roads and installing facilities thereon
under the Government’s zonal improvement program and subdividing them into much smaller lots
for distribution and sale at a low cost to qualified beneficiaries, mostly underprivileged long-time
occupants of Grace Park. Around 510 families with approximately 5 members each will be benefited
by the project.58 The only remaining obstacle in the completion of this project is the lots subject of
these consolidated petitions as the other lots in Grace Park have already been expropriated. 59

The Zonal Improvement Program (ZIP), being implemented for government by NHA, draws breath
from policy mandates found in the 1987 Constitution. 60 It is an integral part of the government’s
"socialized housing" program which, in Sumulong v. Guerrero, 61 we deemed compliant with the
"public use" requirement, it being a program clearly devoted to a "public purpose." Justice Irene R.
Cortes, speaking eloquently for the Court, said:

"Socialized housing" is defined as, "the construction of dwelling units for the middle and lower class
members of our society, including the construction of the supporting infrastructure and other
facilities" (Pres. Decree No. 1224, par. 1). This definition was later expanded to include among
others:

a) The construction and/or improvement of dwelling units for the middle and lower income
groups of the society, including the construction of the supporting infrastructure and other
facilities;

b) Slum clearance, relocation and resettlement of squatters and slum dwellers as well as the
provision of related facilities and services;
 c) Slum improvement which consists basically of allocating homelots to the dwellers in the
area or property involved, rearrangement and re-alignment of existing houses and other
dwelling structures and the construction and provision of basic community facilities and
services, where there are none, such as roads, footpaths, drainage, sewerage, water and
power system, schools, barangay centers, community centers, clinics, open spaces, parks,
playgrounds and other recreational facilities;

d) The provision of economic opportunities, including the development of commercial and

industrial estates and such other facilities to enhance the total community growth; and

e) Such other activities undertaken in pursuance of the objective to provide and maintain
housing for the greatest number of people under Presidential Decree No. 757. (Pres. Decree
No. 1259, sec. 1)

xxxx

Specifically, urban renewal or redevelopment and the construction of low-cost housing is recognized
as a public purpose, not only because of the expanded concept of public use but also because of
specific provisions in the Constitution. The 1973 Constitution made it incumbent upon the State to
establish, maintain and ensure adequate social services including housing [Art. II, sec. 7]. The 1987
Constitution goes even further by providing that:

The State shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that provide adequate
social services, promote full employment, a rising standard of living and an improved quality of life
for all. [Art. II, sec. 9]

The state shall, by law, and for the common good, undertake, in cooperation with the private sector,
a continuing program of urban land reform and housing which will make available at affordable cost
decent housing and basic services to underprivileged and homeless citizens in urban centers and
resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the
implementation of such program the State shall respect the rights of small property owners. (Art. XIII,
sec. 9, Emphasis supplied)

Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and
significantly affects public health, safety, the environment and in sum, the general welfare. The
public character of housing measures does not change because units in housing projects cannot be
occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made,
for it is not possible to provide housing for all who need it, all at once.

Population growth, the migration to urban areas and the mushrooming of crowded makeshift
dwellings is a worldwide development particularly in developing countries. So basic and urgent are
housing problems that the United Nations General Assembly proclaimed 1987 as the "International
Year of Shelter for the Homeless" "to focus the attention of the international community on those
problems". The General Assembly is "[s]eriously concerned that, despite the efforts of Governments
at the national and local levels and of international organizations, the living conditions of the majority
of the people in slums and squatter areas and rural settlements, especially in developing countries,
continue to deteriorate in both relative and absolute terms." [G.A. Res. 37/221, Yearbook of the
United Nations 1982, Vol. 36, p. 1043-4]

In the light of the foregoing, this Court is satisfied that "socialized housing" falls within the confines of
"public use". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224
which should be construed in relation with the preceding three paragraphs. Provisions on economic
opportunities inextricably linked with low-cost housing, or slum clearance, relocation and
resettlement, or slum improvement emphasize the public purpose of the project. 62

It need only be added, at this juncture, that the "public use" requisite for the valid exercise of the
power of eminent domain is a flexible and evolving concept influenced by changing conditions. At
present, it may not be amiss to state that whatever is beneficially employed for the general welfare
satisfies the requirement of public use.63

Still, petitioner Manapat insists that, being himself a beneficiary of the expropriation (because he has
been a long-time resident of Grace Park), it would be incongruous for government to take his land
away from him only to give it back to him. This contention sadly fails to comprehend the public
purpose for the taking under the "socialized housing" program. The parcels of land subject of the
expropriation are, precisely, being taken so that they can be subdivided into much smaller lots --- at
an average of 66.5 square meters per lot64 --- for distribution to deserving dwellers in the area. Upon
the completion of the project, Manapat, and those similarly situated as he, cannot assert any right to
be awarded the very same lots they currently occupy, nor be entitled to the same area of the land
they now have.

Then, we have petitioner Lim and respondents Vega, Santos, Oracion, and Mercado, who argue that
the lots they own should not be expropriated are already titled in their names and are very small in
area, being already the subdivided portions of the original Grace Park Subdivision.

We are not persuaded.

J. M. Tuason & Co., Inc. v. Land Tenure Administration 65 is instructive. In that case, this Court
adopted the dissenting opinion of Justice J. B. L. Reyes in Republic v. Baylosis, 66 that the propriety
of exercising the power of eminent domain cannot be determined on a purely quantitative or area
basis, given that the Constitution speaks of lands, not of landed estates. Speaking through Justice
(later Chief Justice) Enrique M. Fernando, the Court said:

This is not to say of course that property rights are disregarded. This is merely to emphasize that the
philosophy of our Constitution embodying as it does what Justice Laurel referred to as its
"nationalistic and socialist traits discoverable upon even a sudden dip into a variety of [its]
provisions" although not extending as far as the "destruction or annihilation" of the rights to property,
negates the postulate which at one time reigned supreme in American constitutional law as to their
well-nigh inviolable character. This is not so under our Constitution, which rejects the doctrine of
laissez faire with its abhorrence for the least interference with the autonomy supposed to be enjoyed
by the property owner. Laissez faire, as Justice Malcolm pointed out as far back as 1919, did not
take too firm a foothold in our jurisprudence. Our Constitution is much more explicit. There is no
room for it for laissez faire. So Justice Laurel affirmed not only in the above opinion but in another
concurring opinion quoted with approval in at least two of our subsequent decisions. We had
occasion to reiterate such a view in the ACCFA case, decided barely two months ago.

This particular grant of authority to Congress authorizing the expropriation of land is a clear
manifestation of such a policy that finds expression in our fundamental law. So is the social justice
principle enshrined in the Constitution of which it is an expression, as so clearly pointed out in the
respective dissenting opinions of Justice J.B.L. Reyes and Chief Justice Paras in the Baylosis case.
Why it should be thus is so plausibly set forth in the ACCFA decision, the opinion being penned by
Justice Makalintal. We quote: "The growing complexities of modern society, however, have rendered
this traditional classification of the functions of government quite unrealistic, not to say obsolete. The
areas which used to be left to private enterprise and initiative and which the government was called
upon to enter optionally, and only ‘because it was better equipped to administer for the public
welfare than is any private individual or group of individuals,’ continue to lose their well-defined
boundaries and to be absorbed within activities that the government must undertake in its sovereign
capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere else
the tendency is undoubtedly towards a greater socialization of economic forces. Here of course this
development was envisioned, indeed adopted as a national policy, by the Constitution itself in its
declaration of principle concerning the promotion of social justice."

In a more recent decision,67 we had occasion to declare that the fact that the property is less than ½-
hectare and that only a few would actually benefit from the expropriation does not diminish its public
use character, inasmuch as "public use" now includes the broader notion of indirect public benefit or
advantage, including in particular, urban land reform and housing.

The Court’s departure from the land size or area test finds further affirmation in its rulings in Mataas
na Lupa Tenants Association, Inc. v. Dimayuga68 and the aforecited Sumulong v. Guerrero. 69

Given this discussion, it is clear that "public use," as a requisite for the exercise of eminent domain in
the instant cases, has been adequately fulfilled.

To satisfy the fourth requisite, we affirm the appellate court’s disposition that the subject cases be
remanded to the trial court for the determination of the amount of just compensation. Under case
law, the said determination is a judicial prerogative. 70 As to the observance of the fifth requisite, the
due process clause, in the expropriation proceedings, all the parties have been given their day in
court. That they are now before this Court is attestation enough that they were not denied due
process of law.

From the foregoing disquisitions, it is unmistakable that all the requirements for the valid exercise of
the power of eminent domain have been complied with. Thus, our answer to the singular and
fundamental issue in these consolidated cases is: YES, the NHA may validly expropriate the subject
parcels of land.

One final matter: the propriety of the application by the CA of R.A. No. 7279, otherwise known as the
Urban Development and Housing Act of 1992.

The Court is not unaware of the condition now imposed by R.A. No. 7279 71 that, for purposes of
urban development and housing under the Act, where expropriation is resorted to, parcels of land
owned by small property owners shall be exempted. 72 "Small property owners" are owners of
residential lands with an area not exceeding 300 sq m in highly urbanized cities and 800 sq m in
other urban areas and who do not own any other real property. 73 Invoking this limitation under the
said law, the appellate court in the questioned rulings exempted from expropriation the lots owned
by Loberanes, Quimque, Mercado, Vega and Santos, and partially exempted the lot of Oracion. 1âwphi1

The CA’s ruling on this point is incorrect. R.A. No. 7279 was enacted in 1992, almost two decades
after the expropriation cases against the property owners herein were instituted with the RTC in
1977. Nova constitutio futuris formam imponere debet, non praeteritis. A new statute should affect
the future, not the past. The law looks forward, not backward. 74 Article 4 of the Civil Code even
explicitly declares, "(l)aws shall have no retroactive effect, unless the contrary is provided." 75 In these
consolidated cases, the Court finds that the language of R.A. No. 7279 does not suggest that the
Legislature has intended its provisions to have any retroactive application. On the contrary, Section
49 of the said law indicates that it "shall take effect upon its publication in at least two (2) national
newspapers of general circulation."76 The law’s prospective application being clearly stated, the
Court cannot agree with the disposition of the appellate court that the subject lots not exceeding 300
sq m are exempt from expropriation.

WHEREFORE, PREMISES CONSIDERED, the May 27, 1993 Decision of the Court of Appeals in
CA-G.R. CV No. 10200-10212 and the June 28, 1994 Decision in CA-G.R. CV No. 27159 are
AFFIRMED; and the March 2, 1994 and the July 25, 1994 Resolutions in CA-G.R. CV Nos. 10200-
10212 are REVERSED and SET ASIDE.

SO ORDERED.
 G.R. No. 192100, March 12, 2014

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF

PUBLIC WORKS AND HIGHWAYS (DPWH)1, Petitioner, v. ASIA PACIFIC
INTEGRATED STEEL CORPORATION, Respondent.

DECISION

VILLARAMA, JR., J.:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules
of Civil Procedure, as amended, assailing the July 21, 2009 Decision2 of the Court of
Appeals (CA) in CA–G.R. CV No. 90539. The CA partially affirmed the September 21,
2007 Decision3 of the Regional Trial Court (RTC), Branch 54, of Macabebe, Pampanga,
and reduced the annual legal interest awarded from 12% to 6% per annum.  Also
assailed is the appellate court’s April 28, 2010 Resolution4 denying petitioner’s motion
for reconsideration.

As culled from the records, the following are the pertinent facts: chanRoblesvirtualLawlibrary

Asia Pacific Integrated Steel Corporation (respondent) is the registered owner of a

17,175–square meter property situated in Barangay Sta. Monica, Municipality of San
Simon, Province of Pampanga and covered by Transfer Certificate of Title (TCT) No.
271813–R.5

On March 1, 2002, the Republic of the Philippines (petitioner) through the Toll
Regulatory Board (TRB) instituted expropriation proceedings against the respondent
over a portion of their property.  The affected area, consisting of 2,024 square meters,
shall be traversed by the expansion of the San Simon Interchange, an integral
component of the construction, rehabilitation and expansion of the North Luzon
Expressway (NLEX Project).  Subsequently, petitioner filed an urgent ex–parte motion
for issuance of writ of possession, stating that it deposited with the Land Bank of the
Philippines (LBP) the amount of P607,200.00 (100% of the value of the property based
on current zonal valuation of the Bureau of Internal Revenue [BIR]) in accordance with
Section 4(a) of Republic Act No. 89746 (R.A. 8794), and  hence the court has the
ministerial duty to place petitioner in possession pursuant to Section 2, Rule 67 of the
Rules of Civil Procedure.7

On March 19, 2002, the trial court issued an order  granting petitioner’s motion and
directing the Register of Deeds of Pampanga to cause the annotation of the writ of
possession on TCT No. 271813–R.8

In its Answer with Opposition to the Motion for Issuance of Writ of

Possession,9 respondent questioned the TRB’s authority to expropriate the subject
property and objected to petitioner’s offered compensation which respondent deems
unjust because the basis thereof – the BIR zonal valuation – was an unofficial valuation,
being merely based on an internal memorandum issued by BIR Revenue District No. 21,
not by the Asset Valuation Department of the BIR National Office.  Respondent asserted
that just compensation should be at P3,036,000.00 or at P1,500.00 per square meter
plus consequential damages, considering the fair market value and the industrial
classification of the subject property.

During the pre–trial conference, the parties agreed on TRB’s authority to expropriate
the subject property but disagreed as to the amount of just compensation.  Petitioner
offered to pay P607,200.00 for the portion taken but respondent made a counter–offer
of P1,821,600.00. The parties eventually agreed to submit the issue of just
compensation to three Commissioners composed of the Municipal Assessor of San
Simon as Chairman, and the RTC Branch Clerk of Court and the Register of Deeds for
the Province of Pampanga as Members.10

On June 1, 2004, the trial court granted respondent’s motion to withdraw the
P607,200.00 deposited by petitioner with the LBP as partial payment for just
compensation.11

On June 9, 2004, the Commissioners submitted their Report with the following findings
and recommendation: chanRoblesvirtualLawlibrary

The affected lot is within the area wherein the land use are residential, commercial, and
industrial (mixed land use), as per Vicinity Map hereto attached as Annex “B”.  The area
is along MacArthur Highway, Quezon Road, Municipal and Barangay Roads[.]

In the absence of bonafide sales transaction in the area, the Assessor’s Office being
aware of the actual conditions of subject property decided to use opinion values in the
determination of the current and fair market value for the purpose of payment of just
compensation.

OPINION VALUES

A.  Real Estate Brokers/Independent Appraisers/Owners, etc.

1. Residential  –  ranging from P2,000.00 to P2,500.00 per square meter

2. Commercial  – ranging from P2,500.00 to P3,000.00 per square meter
3. Industrial  –  ranging from P1,000.00 above per square meter

B.  Banks and Financial Institutions

1. Residential  –  ranging from P1,000.00 to P2,000.00 per square meter

2. Commercial  –  ranging from P2,000.00 to P3,000.00 per square meter
3. Residential  –  ranging from P1,000.00 to P1,500.00 per square meter

Appraisal conducted by the Assessor of San Simon, Pampanga for various properties
within the area, recommended an amount ranging from P1,000.00 to P1,500.00,
Philippine currency, per square meter, depending on their proximity to the national
roads, municipal roads, and barangay roads, and the improvement/development put in
place.  The amount of P1,000.00 to P1,500.00 was arrived at by the undersigned
commissioners due to the conversion of the subject property from agricultural to
industrial use as evidenced by the Order of Conversion dated July 8, 1991, issued by
Renato B. Padilla, Undersecretary, Department of Agrarian Reform, a xerox copy of
which is hereto attached [as] Annex “C”.12
On September 23, 2004, an ocular inspection was conducted in the presence of the
parties’ representatives and their respective counsels, during which the trial court noted
the following:chanRoblesvirtualLawlibrary

1.  There is an existing toll plaza on the right lane of the expressway facing the
direction of Manila with blue colored roofing.

2.  Comprised in the aforesaid toll plaza are three toll booths.  The third booth located
on the extreme right facing Manila occupies a portion of the expropriated portion of
defendant’s property.

3.  The expropriated portion which is shown in a sketch which was marked as Exhibit H
is indicated by its color: green.  It has an area of 2,021 square meters.  The remaining
unexpropriated portion of defendant’s land has an area of 15,151 square meters.

4.  The unexpropriated portion of the land of defendant is presently very much below
the level of the expressway because the expressway was upgraded.  It is immediately
adjacent to the existing expressway, located as it is, on its right side facing Manila.  It
is swampy with little water.13

In its Decision, the trial court ruled as follows: chanRoblesvirtualLawlibrary

x x x Although there was no documentary evidence attached to substantiate the

opinions of the banks and the realtors indicated in the Commissioners’ Report, the
Court finds the commissioners’ recommendation of the valuation of industrial lands at
P1,000.00 to P1,500.00 to be fair, absent any showing that the valuation is exorbitant
or otherwise unjustified.  There was no fraud or prejudice that tainted the report.

The Court finds the valuation of the Republic of the Philippines which was pegged at
Php300.00 per square meter to be very low.  The zonal valuation of the Bureau of
Internal Revenue (Exhibits A and B with submarkings) is merely a gauge or is
necessary in the assessment of correct transfer taxes by the said office.  Furthermore
the Department Order No. 23–98 took effect only last February 2, 1998 which was four
(4) years prior to the filing of the complaint.  The same is true with Ordinance No. 17,
Series of 1994 issued by the Sangguniang Panlalawigan of Pampanga (Exhibit E) which
was issued eight (8) years also prior to the filing of the complaint.

Concerning the Deed of Absolute Sale (Exhibit C) notarized on July 19, 2002, the same
was undated and pertains only to a right of way.  An easement of right of way
transmits no rights except the easement itself.  Hence, the just compensation
pertaining to easement of right of way should be lower than that in the Deed of
Absolute Sale.  x x x

xxxx

Using the recommendation of the three (3) commissioners as guide, the Court finds the
amount of ONE THOUSAND THREE HUNDRED PESOS (Php1,300.00) per square meter
as just compensation for the property subject of expropriation.
WHEREFORE, premises considered, judgment is rendered: chanRoblesvirtualLawlibrary

1)  Ordering the plaintiff to pay the defendant in the amount of TWO MILLION TWENTY
FOUR THOUSAND PESOS (Php2,024,000.00) representing the net amount of just
compensation after deducting the partial payment of P607,200.00 based on the
valuation of Php1,300.00 per square meter on the expropriated portion of the parcel of
land [Lot 329–A of the subdivision, plan (LRC) Psd–246403, being a portion of lot 329,
San Simon, LRC. Cad Rec. No. 1316] with an area of 2,024 square meters situated in
Sta. Monica, San Simon, Pampanga covered by Transfer Certificate of Title No. 271813–
R plus legal interest of 12% per annum from the time of taking (March 21, 2002) until
fully paid less taxes due on the land.

2)  Ordering the plaintiff to pay the costs and/or expenses in relation to the transfer of
ownership of the property in its favor from defendant Asia Pacific Integrated Steel
Corporation.

3)  Condemning the property subject of expropriation free from all liens and
encumbrances for the construction, rehabilitation and expansion of the North Luzon
Expressway.

SO ORDERED.14

Petitioner appealed to the CA, arguing that the just compensation should not be more
than P300.00 per square meter and that the correct rate of interest is 6% per annum.

The CA upheld the trial court’s ruling, reiterating the principle that the determination of
just compensation is an inherently judicial function.  It stressed that  any valuation for
just compensation laid down in statutes merely serve as guides or factors and may not
substitute the court’s own judgment as to what amount should be awarded and how to
arrive at such amount.15

Further, the CA noted that petitioner itself admitted that the BIR zonal valuation is only
for the purpose of determining the correct amount of transfer taxes.  It held that while
BIR zonal valuation may be a factor in determining just compensation, the same is not
a competent basis thereof.  Citing R.A. 8974, the CA pointed out the distinction
between provisional value as a precondition for the issuance of a writ of possession and
the payment of just compensation for the expropriated property.  While the provisional
value is based on the zonal value as may be determined by the BIR, just compensation
is based on the prevailing fair market value of the property.  Necessarily, the zonal
valuation of properties is not equivalent to their fair market value.16

After examining the records, the CA found no reversible error in the trial court’s
determination of just compensation and held that the valuation of P1,500.00 per square
meter is more in consonance with the concept of just compensation based upon due
consideration of all evidence.  Thus:chanRoblesvirtualLawlibrary

It is equally settled that the valuation of a property in tax declarations cannot be a

substitute to just compensation.  Elsewise stated, the market value reflected in the tax
declaration of the condemned property is no longer conclusive.  Accordingly, we cannot
appreciate the herein tax declaration in favor of the Republic.
Further, it is uncontested that the deed of sale dated July 19, 2002 between San Simon
Realty, Inc. and the Republic pertained only to a right of way, hence, the value thereof
should be considerably lower.  Ordinance No. 17, as correctly found by the RTC, was
issued on June 22, 1994 or eight (8) years prior to the institution of the herein
complaint.  Certainly, the valuation of properties therein can by no means be reflective
of the current, prevailing and fair value of the subject property.  The Republic failed to
present evidence to controvert he RTC’s finding on the matter.  Neither has it shown
that the property sold thereunder shares the same features as the herein subject
property as to warrant a similar valuation.  We cannot, thus, yield to the Republic’s
submission that its evidence are the proper basis in determining just compensation for
Asia Pacific’s property.17

However, the CA modified the rate of interest imposed on the amount due as just
compensation from 12% to 6% in conformity with prevailing jurisprudence.

On April 28, 2010, the CA denied petitioner’s motion for reconsideration, stating that
the argument on valuation by petitioner was merely a rehash of what the CA had
already passed upon.

Hence, this petition assailing the CA’s affirmance of the trial court’s award of just
compensation, the legal basis of which is allegedly insufficient.

Petitioner argues that the evidence for determining the amount of just compensation in
expropriation cases should be on those factors provided in Section 5 of R.A. 8974. 
Considering such factors and the evidence submitted by the parties before the trial
court, petitioner maintains that just compensation for the subject property should be no
more than the zonal valuation (P300.00 per square meter), and in no case should it
amount to the market value of P1,300.00 per square meter adjudged by the trial and
appellate courts.  Petitioner claims that such huge sum for only 2,024–square meter
portion of respondent’s 17,175–square meter property, is unbelievably 433.4% more
than the 1998 BIR zonal value for an underdeveloped industrial land at the time of its
taking.

On the other hand, respondent contends that no reversible error was committed by the
CA in affirming the trial court’s decision after considering all the arguments raised by
petitioner and the evidence on record. It asserts that the main issue of just
compensation and the findings thereon by the trial court as affirmed by the CA is a
question of fact which should not be disturbed by this Court. Moreover, respondent
asserts that the determination by the trial court is entitled to the highest respect
considering that the judge has personal knowledge of the condition of the subject
property, having conducted an ocular inspection on September 23, 2004.

We grant the petition.

As a rule, a petition for review under Rule 45 of the Rules of Court

covers only questions of law. Questions of fact are not reviewable and cannot be passed
upon by this Court in the exercise of its power to review.  The distinction between
questions of law and questions of fact is established.  A question of law exists when the
doubt or difference centers on what the law is on a certain state of facts.  A question of
fact, on the other hand, exists if the doubt centers on the truth or falsity of the alleged
facts.18  This being so, the findings of fact of the CA are final and conclusive and this
Court will not review them on appeal.19

For a question to be one of law, the same must not involve an examination of the
probative value of the evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law provides on the given set of
circumstances.20  In this case, the only legal issue raised by petitioner is whether the
trial court based its determination of just compensation on the factors provided under
existing laws and jurisprudence.

Section 5 of R.A. 8974 enumerates the standards for assessing the value of
expropriated land taken for national government infrastructure projects, thus: chanRoblesvirtualLawlibrary

SECTION 5. Standards for the Assessment of the Value of the Land Subject of
Expropriation Proceedings or Negotiated Sale.  – In order to facilitate the determination
of just compensation, the court may consider, among other well–established factors,
the following relevant standards: chanRoblesvirtualLawlibrary

(a)  The classification and use for which the property is suited;

(b)  The developmental costs for improving the land;

(c)  The value declared by the owners;

(d)  The current selling price of similar lands in the vicinity;

(e)  The reasonable disturbance compensation for the removal and/or demolition of
certain improvements on the land and for the value of the improvements thereon;

(f)  The size, shape or location, tax declaration and zonal valuation of the land;

(g)  The price of the land as manifested in the ocular findings, oral as well as
documentary evidence presented; and

(h)  Such facts and events as to enable the affected property owners to have sufficient
funds to acquire similarly–situated lands of approximate areas as those required from
them by the government, and thereby rehabilitate themselves as early as possible.

In this case, the trial court considered only (a) and (d): (1) the classification of the
subject property which is located in an area with mixed land use (commercial,
residential and industrial) and the property’s conversion from agricultural to industrial
land, and (2) the current selling price of similar lands in the vicinity – the only factors
which the commissioners included in their Report. It also found the commissioners’
recommended valuation of P1,000.00 to P1,500.00 per square to be fair and just 
despite the absence of documentary substantiation as said prices were based merely on
the opinions of bankers and realtors.

In National Power Corporation v. Manubay Agro–Industrial Development

Corporation,21 the recommended price of the city assessor was rejected by this Court. 
The opinions of the banks and the realtors as reflected in the computation of the
market value of the property and in the Commissioners’ Report, were not substantiated
by any documentary evidence.

Similarly, in National Power Corporation v. Diato–Bernal,22 this Court rejected the

valuation recommended by court–appointed commissioners whose conclusions were
devoid of any actual and reliable basis. The market values of the subject property’s
neighboring lots were found to be mere estimates and unsupported by any
corroborative documents, such as sworn declarations of realtors in the area concerned,
tax declarations or zonal valuation from the BIR for the contiguous residential dwellings
and commercial establishments. Thus, we ruled that a commissioners’ report of land
prices which is not based on any documentary evidence is manifestly hearsay and
should be disregarded by the court.

We find that the trial court did not judiciously determine the fair market value of the
subject property as it failed to consider other relevant factors such as the zonal
valuation, tax declarations and current selling price supported by documentary
evidence.  Indeed, just compensation must not be arrived at arbitrarily, but determined
after an evaluation of different factors.23

Just compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator.  The measure is not the taker’s gain, but the owner’s
loss.  The word “just” is used to intensify the meaning of the word “compensation” and
to convey thereby the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full, and ample.  Such “just”–ness of the compensation
can only be attained by using reliable and actual data as bases in fixing the value of the
condemned property.24 Trial courts are required to be more circumspect in its
evaluation of just compensation due the property owner, considering that eminent
domain cases involve the expenditure of public funds.25

We agree with the trial court that it was not bound by the assessment report of the
commissioners and that it had the discretion to reject the same and substitute its own
judgment on its value as gathered from the record, or it may accept the
report/recommendation of the commissioners in toto and base its judgment thereon. 
However, the decision of the court must be based on all established rules, upon correct
legal principles and competent evidence.26  The court is proscribed from basing its
judgment on speculations and surmises.

Nonetheless, we cannot subscribe to petitioner’s argument that just compensation for

the subject property should not exceed the zonal valuation (P300.00 per square meter).

In Republic v. Court of Appeals,27 we held that ––

The constitutional limitation of “just compensation” is considered to be the sum

equivalent to the market value of the property, broadly described to be the price fixed
by the seller in open market in the usual and ordinary course of legal action and
competition or the fair value of the property as between one who receives, and one who
desires to sell, it fixed at the time of the actual taking by the government. x x x

Zonal valuation is just one of the indices of the fair market value of real estate.  By
itself, this index cannot be the sole basis of “just compensation” in expropriation
cases.28  As this Court ruled in Leca Realty Corporation v. Rep. of the Phils. 29:
chanRoblesvirtualLawlibrary

The Republic is incorrect, however, in alleging that the values were exorbitant, merely
because they exceeded the maximum zonal value of real properties in the same
location where the subject properties were located.  The zonal value may be one,
but not necessarily the sole, index of the value of a realty. National Power
Corporation v. Manubay Agro–Industrial held thus:
“x x x [Market value] is not limited to the assessed value of the property or to the
schedule of market values determined by the provincial or city appraisal committee.
However, these values may serve as factors to be considered in the judicial valuation of
the property.”
The above ruling finds support in EPZA v. Dulay in this wise:
“Various factors can come into play in the valuation of specific properties singled out for
expropriation. The values given by provincial assessors are usually uniform for very
wide areas covering several barrios or even an entire town with the exception of the
poblacion. Individual differences are never taken into account. The value of land is
based on such generalities as its possible cultivation for rice, corn, coconuts or other
crops.  Very often land described as ‘cogonal’ has been cultivated for generations.
Buildings are described in terms of only two or three classes of building materials and
estimates of areas are more often inaccurate than correct. Tax values can serve as
guides but cannot be absolute substitutes for just compensation.” (Emphasis supplied.)

Among the factors to be considered in arriving at the fair market value of the property
are the cost of acquisition, the current value of like properties, its actual or potential
uses, and in the particular case of lands, their size, shape, location, and the tax
declarations thereon.  The measure is not the taker’s gain but the owner’s loss.30  To be
just, the compensation must be fair not only to the owner but also to the taker.31

It is settled that the final conclusions on the proper amount of just compensation can
only be made after due ascertainment of the requirements set forth under R.A. 8974
and not merely based on the declarations of the parties.32  Since these requirements
were not satisfactorily complied with, and in the absence of reliable and actual data as
bases in fixing the value of the condemned property, remand of this case to the trial
court is in order.

WHEREFORE, the petition for review on certiorari is GRANTED.  The Decision dated

July 21, 2009 and Resolution dated April 28, 2010 of the Court of Appeals in CA–G.R.
CV No. 90539 are hereby SET ASIDE.

This case is remanded to the trial court for the proper determination of just
compensation, in conformity with this Decision.

SO ORDERED.
 [G.R. No. 56378. June 22, 1984.]

NATIONAL POWER CORPORATION, Petitioner, v. THE COURT OF APPEALS; B.E.

SAN DIEGO, INC., Respondents.

The Solicitor General for Petitioner.

Sison, Sison, Resurreccion & Associates for Respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; EMINENT DOMAIN; JUST COMPENSATION; PRICE OR VALUE

OF THE PROPERTY AT THE TIME OF TAKING, BASIS FOR JUST COMPENSATION. — It is
now settled doctrine, following the leading case of Alfonso v. Pasay (106 Phil. 1017
[1960]), that to determine due compensation for lands appropriated by the
Government, the basis should be the price or value at the time it was taken from the
owner and appropriated by the Government.

2. ID.; ID.; ID.; NATURE OF THE LAND AT THE TIME OF TAKING, PRINCIPAL
CRITERION FOR DETERMINING VALUE. — The convertibility of the property into a
subdivision, the criterion relied upon by respondent Court, is not Controlling. The case
of Manila electric Company v. Tuason, 60 Phil. 663, 668, cited in Municipal Govt. of
Sagay v. Jison (104 Phil. 1026 [1958]), has categorically ruled that it is the time of
taking and not as "potential building" site that is the determining factor. The doctrines
in the cases of City v. Corrales, 32 Phil. 85 (1915) and Republic v. Venturanza, 17
SCRA 322 (1966) relied upon by respondent Court must be deemed to have been
superseded not only by the Alfonso, Carlota and Sagay cases but also by Republic v.
Narciso, 99 Phil. 1031 (1956); Republic v. Philippine National Bank, 1 SCRA 957
(1961); and Republic v. Juan, 92 SCRA 26 (1979), all of which held that the nature of
the land at the time of the taking by the Government is the principal criterion for
awarding compensation to the landowner. The subdivision was not in existence when
NPC entered the land.

DECISION

MELENCIO-HERRERA, J.:

This is a Petition for Review on Certiorari of the Decision of the then Court of Appeals,
promulgated on December 24, 1980, in CA-G.R. No. 55959-R, entitled "National Power
Corporation, Plaintiff-Appellant, versus B. E. San Diego, Inc., Defendant-Appellant."  cralawnad

In 1961, petitioner National Power Corporation (NPC, for short), commenced

negotiations with the spouses Esteban Sadang and Maria Lachica, then the registered
owners, for the purchase of a portion of 8,746 sq. ms. of the latter’s parcel of land of
62,285 sq. ms., situated in Barrio San Mateo, Norzagaray, Bulacan, for the purpose of
constructing an access road to its Angat River Hydroelectric Project. Although the
negotiations were not yet concluded, NPC nevertheless obtained permission from said
spouses to begin construction of the access road, which it did in November 1961. chanrobles lawlibrary : rednad

On December 7, 1962, B. E. San Diego, Inc. a realty firm and private respondent herein
(SAN DIEGO, for short), acquired the parcel of land at a public auction sale and was
issued a title.

On February 14, 1963, NPC instituted proceedings for eminent domain against the
spouses Sadang in the Court of First Instance of Bulacan (Civil Case No. 2725), later
amended on June 20, 1963, with leave of Court, to implead SAN DIEGO. The Motion to
Amend was only granted on June 21, 1968. On March 19, 1969, the Trial Court
appointed three Commissioners, one for each of the parties and another for the Court,
to receive the evidence and determine the just compensation to be paid for the
property sought to be expropriated. After the Commissioners had submitted their
individual Reports and after evaluating the evidence adduced, the Trial Court rendered
a Decision on March 28, 1973, the dispositive portion of which reads: jgc:chanrobles.com.ph

"WHEREFORE, judgment is rendered: chanrob1es virtual 1aw library

a) Declaring to plaintiff the full and legal right to acquire by eminent domain the
absolute ownership over the portion of the land referred to in Paragraphs 4 and 9 of the
Amended Complaint, consisting of 8,746 square meters, access road of the plaintiff to
its Angat River Hydroelectric Project;

b) Authorizing the payment by plaintiff to defendant of the amount of P31,922.00 as

full indemnity for the property at the rate of P3.75 per square meter, with interest at
12% per annum from March 11, 1963 until fully paid;

c) A final Order of Condemnation over the property and improvements therein is

entered, for the purpose set forth, free from all liens and encumbrances;

d) Ordering the registration of this Act of Expropriation, at plaintiff’s expense, with the
Register of Deeds of Bulacan at the back of defendant’s title to the whole property.

SO ORDERED." cralaw virtua1aw library

Both parties appealed to the then Court of Appeals, which rendered a Decision on
December 24, 1980, decreeing: jgc:chanrobles.com.ph

"Considering the peculiar facts and circumstances obtaining in the present case, it is
our considered view that the just and reasonable compensation for the property in
question is P7.00 per square meter.

ACCORDINGLY, the judgment appealed from is hereby modified as indicated above. No

costs.

SO ORDERED." cralaw virtua1aw library

Reconsideration having been denied, NPC availed of the present recourse, to which due
course was given. SAN DIEGO did not appeal from the Appellate Court judgment
although it filed a Brief.
chanrobles law library

The issues presented are whether or not respondent Court erred (1) in fixing the
amount of P7.00 per square meter as just compensation for the portion of land sought
to be expropriated based on its planned convertibility into a residential subdivision; and
(2) in not reducing the rate of interest payable by NPC from twelve (12%) per cent to
six (6%) per cent per annum.

The Trial Court and respondent Court assessed the conflicting evidence in different
lights. Reproduced below are partial findings of the Trial Court:
jgc:chanrobles.com.ph

"The plaintiff’s commissioner, to begin with, recommended a price of P0.50 per square
meter; defendant’s commissioner indicated P20.00 per square meter, while the
commissioner of the Court pegged the value at P4.00 per square meter. The total road
area consists of 8,746 square meters (Exhibits 4-4-c, inclusive). Against the sketch
(Exhibit D-1) presented by plaintiff, the former should prevail.

There is competent testimony, too, that the land was cogonales at the time of the
occupancy. During rainy season, according to Celedonio Juarez, Instrumentman of
Survey Team of the plaintiff, the proposed road could only he passable by animal drawn
sledges; that in contrast, the access-way under its present condition is fully paved.
Shaped to a curve, the thoroughfare should provide a marked improvement to the
flourishing housing subdivision managed by the defendant.

Also, the prevailing market price of residential lots in the area, according to the
reputable C. M. Montano Realty, is P20.00 per square meter. Even taking the face value
of the appraisal made, it would be unfair to compel plaintiff to pay the same price after
constructing a 30-meter wide road through the property a decade ago which enhanced
its commercial value, not to mention the aesthetic gain. Safe to say, therefore, except
for the cost of the land area encompassed by the road, there is negligible, if any,
consequential damage to speak of.

Defendant’s contention, on the other hand, that the location of the road is burdensome
appears to be more idealistic than meritorious. The right of way as now built is more
beneficial to the adjoining subdivision owner (defendant) in the sense that the
residential lot on both flanks of the road could command a higher price. This may not
hold true if the access road were to be built on the east side boundary as proposed by
the defendant because only one side of the rood may be devoted to the housing
area. . . . Related is evidence from defendant that the plaintiff had once negotiated to
purchase the property at P5.00 per square meter. At first glance, this would appear
significant and in keeping with the fair market value. But noticeably, the offer was
made some nine (9) years after actual taking. It is pertinent to point out, the spouses
Sadang when first contacted by the plaintiff in 1961, offered to part with the piece of
property at P4.00 per square meter. The difference in the price could be reasonably
traced to the fact that the couple then may not have any concrete plan to develop the
area into a subdivision until the defendant came into the picture. But the Sadangs were
the registered owners at the time of actual occupancy, defendant’s mortgage lien
notwithstanding. Being so, they were clothed with legal personality to enter into any
transaction with the plaintiff. The property was agricultural, in use as well as for
taxation purposes. (Exhibits A and B). Privy to this fact, the spouses were presumably
aware of the reasonabless of their offer to sell.

"Thus, ‘the fair market value of the land sought to be expropriated’, according to the
Supreme Court, ‘should be determined either at the time of actual taking or at the time
of the filing of the complaint, whichever is earlier. The future convertibility of the
property into some other classification does not affect the nature of property.’ (Alfonso
v. Pasay City, G.R. No. L-12754, January 30, 1960).

x          x           x

"ALL CONSIDERED, P3.75 a square meter is and represents the fair market value"
(Emphasis supplied).

On the other hand, respondent Court reasoned thus: jgc:chanrobles.com.ph

"It has been amply shown that the defendant purchased the land for the purpose of
converting the same into a first class residential subdivision. The court’s commissioner
and the trial court itself took cognizance of such project of the defendant (pp. 130-131,
163, Record on Appeal). It is worthwhile to note that, before the access road was
constructed on the property, plaintiff had already known of the defendant’s plan of
converting the land into a subdivision, since plaintiff had in his custody a copy of
defendant’s subdivision plan, Exhibit 7. In point of fact, Exhibit 7 was produced in court
by the plaintiff from its own record (p. 97, Record on Appeal). Evidence has also been
adduced to show that, as appraised by C.M. Montano Realty, the prevailing market
price of residential lots in the vicinity of defendant’s land was P20.00 per square meter
(p. 163, Ibid).

"Defendant further maintains that because the access road was not constructed in a
straight line, the property was unnecessarily divided into three separate and irregular
segments (Exhibit 4). According to the court’s commissioner, the road, as actually laid
out, had rendered the owner’s plan of converting the land into a subdivision ‘futile.’

x          x           x

"Needless to state, plaintiff should have given heed to the above legal prescription (Art.
650, Civil Code) by having constructed the road in a straight line in order to cover the
shortest distance, and thus cause the least prejudice to the defendant. Plaintiff failed to
observe this rule, and no explanation has been offered for such neglect. These facts
contradict the conclusion of the lower court that ‘except for the cost of the land
encompassed by the road, there is neglible, if any, consequential damage to speak of .’
(p. 164, Record on Appeal).

"It is noted that the only basis of the court a quo in assessing the just compensation of
the property at the price of P3.75 per square meter is that at the time of actual
occupancy by the plaintiff, ‘the property was agricultural in use as well as for taxation
purposes (Exhibits A and D p. 165, Record on Appeal).’ But such posture is hardly in
accord with the settled rule that ‘in determining the value of the land appropriated for
public purposes, the same considerations are to be regarded as in a sale of property
between private parties. The inquiry, in such cases, must always be not what the
property is worth in the market, viewed not merely as to the uses to which it is at the
time applied, but with reference to the uses to which it is plainly adopted; that is to
say, what is its worth from its availability for valuable uses?’ (City of Manila v. Corrales,
32 Phil. 85, 98). It has also been held ‘that the owner has a right to its value for the
use for which it would bring the most in the market’ (City of Manila v. Corrales, supra;
Republic v. Venturanza, Et. Al. 17 SCRA 322, 327).

Indeed, we cannot lightly brush aside the evidence showing that plaintiff’s failure to
observe the rule for laying out the right of way easement in a straight line had
prevented the defendant from carrying out its plan of converting the property into a
housing subdivision. This consequential damage must be taken into account in the
assessment of the just compensation of the property" (Emphasis supplied).

After a review of the records, we are of the considered opinion that the findings of the
Trial Court merit our approval for several reasons: chanrob1es virtual 1aw library

(1) Both documentary and oral evidence indicate that the land in question, at the time
of taking by NPC in 1961, was agricultural in use as well as for taxation purposes. In
fact, it was described as "cogonales."

(2) SAN DIEGO’s contention that the location and direction of the access road is
burdensome is not borne out by the evidence. The Report of the Commissioner of the
Court revealed that NPC merely improved a pre-existing mining road on the premises,
which was only accessible by carabao-drawn sledge during the rainy season. 1 As
concluded by the Trial Court, which had the benefit of autoptic observation: jgc:chanrobles.com.ph

"Defendant’s contention, on the other hand, that the location of the road is burdensome
appears to be more idealistic than meritorious. The right of way as now built is more
beneficial to the adjoining subdivision owner (defendant) in the sense that the
residential lot on both flanks of the road could command a higher price. This may not
hold true if the access road were to be built on the east side boundary as proposed by
the defendant because only one side of the road may be devoted to the housing area."
virtua1aw library
cralaw

(3) The finding of the Trial Court that "there is negligible, if any, consequential damage
to speak of" thus becomes readily tenable. SAN DIEGO was not, as was the belief of
respondent Court, "prevented from carrying out the plan of converting the property into
a housing subdivision." On the contrary, the Trial Court observed that "the thoroughfare
should provide a marked improvement to the flourishing housing subdivision managed
by defendant (private Respondent.)"

(4) The appraisal by a realty firm of P20.00 per square meter, the price that SAN
DIEGO stresses the property should command, is not, to our minds, a fair market
value. The former owners, the Sadang spouses, offered to part with the property at
P4.00 per square meter. SAN DIEGO had purchased the entire property of 62,285
square meters at public auction for P10,000.00, or at P0.16 per square meter. Previous
to that, or in 1957, the property was mortgaged to the Development Bank of the
Philippines for P20,000.00 and subsequently in 1958 to SAN DIEGO, by way of second
mortgage, for P30,000.00. The observation of the Trial Court, on this point, is decidedly
apropos: jgc:chanrobles.com.ph

"x       x       x

"A very important point: On the basis of a recognized policy of lending institutions to
grant a maximum mortgage loan corresponding to 60% of the appraised value of the
real estate collaterals, the twenty thousand mortgage loan extended by the
Development Bank of the Philippines to the spouses Sadang would roughly place the
approximate value of the property at P33,330 or roughly P0.51 per square meter. And
at this ratio, by granting a second mortgage of P30,000, the defendant impliedly placed
the recoverable value of the property within P83,333.33 for the area of 62,285 square
meters or about P1.33 per square meter. That was in 1958, the year of the second
mortgage (Exhibit 12), or an annual increase in price at the rate of P0.81 per square
meter. From 1958 to 1961 (date of actual taking) represents three years, or an
aggregate increase of P2.43 per square meter. Add P1.32 to this thus making a total of
P3.75 per square meter." cralaw virtua1aw library

The price of P12.00 to P15.00, which respondent Court observed as the just
compensation awarded in two civil suits for lands condemned in the immediate vicinity,
cannot be a fair gauge since said Court neither adopted the same, and specially
considering that the property was "cogonal" at the time NPC constructed its access road
in 1961. Moreover, NPC also presented contrary evidence indicating prices of P.05 and
P.06 per square meter at around the time it had entered the property. In fact, in
respect of sales within the locality, the Trial Court had this to say:
jgc:chanrobles.com.ph

"While sales of properties within the locality in the same year or there about may serve
as a guiding factor in ascertaining a fair market value yet there appears want of proof
to show that the alluded sales (Exhibits I-1, J, K, and L) referred to properties of similar
nature nor was proximity to the land in question properly shown." cralaw virtua1aw library

(5) And most importantly, on the issue of just compensation, it is now settled doctrine,
following the leading case of Alfonso v. Pasay 2 , that to determine due compensation
for lands appropriated by the Government, the basis should be the price or value at the
time it was taken from the owner and appropriated by the Government.

"The owner of property expropriated by the State is entitled to how much it was worth
at the time of the taking. This has been clarified in Republic v. PNB (1 SCRA 957) thus:
‘It is apparent from the foregoing that, when plaintiff takes possession before the
institution of the condemnation proceedings, the value should be fixed as of the time of
the taking of said possession, not of filing of the complaint, and that the latter should
be the basis for the determination of the value, when the taking of the property
involved coincides with or is subsequent to, the commencement of the proceedings.
Indeed, otherwise, the provision of Rule 69, section 3, directing that compensation ‘be
determined as of the date of the filing of the complaint’ would never be operative." 3

In the case at bar, the taking by NPC occurred in November 1961, when it constructed
the access road on the expropriated property at time when it was still "cogonal" and
owned by the spouses Sadang. The Complaint was filed only in 1963.

The convertibility of the property into a subdivision, the criterion relied upon by
respondent Court, is not controlling. The case of Manila Electric Co. v. Tuason, 60 Phil.
663, 668, cited in Municipal Gov’t. of Sagay v. Jison, 4 has categorically ruled that it is
the time of taking and not as "potential building" site that is the determining factor,

". . . if the property to be expropriated was agricultural, the adaptability thereof for
conversion in the future into a residential site does not affect its nature when plaintiff
assumed possession of the property, although it is a circumstance that should be
considered in determining its value at that time, as an ‘agricultural’ land." 5

The doctrines in the cases of City v. Corrales, 32 Phil. 85 (1915) and Republic v.
Venturanza, 17 SCRA 322 (1966) relied upon by respondent Court must be deemed to
have been superseded not only by the Alfonso, Carlota and Sagay cases but also by
Republic v. Narciso, 99 Phil. 1031 (1956); Republic v. Philippine National Bank, 1 SCRA
957 (1961); and Republic v. Juan, 92 SCRA 26 (1979), all of which held that the nature
of the land at the time of taking by the Government is the principal criterion for
awarding compensation to the landowner. The subdivision was not in existence when
NPC entered the land.

Since SAN DIEGO bought the land in question in the interim and was issued a title only
on December 7, 1962, the "taking" as to it should commence only from said date.

On the issue of legal interest in expropriation proceedings, we held in Amigable v.

Cuenca, 43 SCRA 360 (1972), that: jgc:chanrobles.com.ph

"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 the government. In addition, the government should pay for attorney’s fees,
the amount of which should be fixed by the trial court after hearing." cralaw virtua1aw library

In the case at bar, legal interest should accrue from December 7, 1962, the time of
taking as far as SAN DIEGO is concerned, at six per cent (6%) per annum, up to the
time that payment is made by NPC.

Not having appealed from the Decision of respondent Court, SAN DIEGO cannot ask for
its modification by way of increasing the amount of compensation and including an
award for attorney’s fees. 6

WHEREFORE, the judgment of respondent Appellate Court, dated December 24, 1980,
is hereby set aside, and the Decision of the then Court of First Instance of Bulacan,
Branch I, in Civil Case No. 2725, authorizing payment of P31,922.00 as full indemnity
for the property at the rate of P3.75 per square meter is reinstated. Petitioner is
directed to pay interest at six per cent (6%) per annum on the amount adjudged from
December 7, 1962, until fully paid. No costs.
G.R. Nos. L-60549, 60553 to 60555 October 26, 1983

HEIRS OF JUANCHO ARDONA (represented by Gloria Ardona) ANASTACIO C. CABILAO,

HEIRS OF CIPRIANO CABILAO (represented by Jose Cabilao) MODESTA CABILAO, HEIRS
OF ROMAN CABUENAS (represented by Alberto Cabuenas), AGRIPINO GABISAY and
PRUDENCIA MABINI, ANTONIO LABRADOR and LUCIA GABISAY, GERONIMO MABINI and
MARCELINA SABAL, INOCENCIO MABINI and ARSENIA REYES, PATRICIO MABINI and
GREGORIA BORRES, ANICETO GADAPAN and MAXIMA GABISAY, BARTOLOME MAGNO
and CALINECA E. MAGNO, ALBERTO CABUENAS, NARCISO CABUENAS and VICTORIA
CABUENAS, EUTIQUIOSENO, HEIRS OF ESPERIDION CABUENAS (represented by Alberto
Cabuenas), MAXIMINA NAVARO, SULPICIO NAVARO, EDUARDO NAVARO, MARTINIANO
ROMA (in representation of Arcadio Mabini, deceased), MARTIN SENO, FAUSTO ARDA,
MAXIMA CABILAO, ESTRELLA SENO, EDUVEGIS S. CABILAO, ROSARIO CABILAO, MINORS
DANILO, SOCORRO, JOSEFINA and MARITES, all surnamed Cabilao, JUAN BORRES
(represented by Francisca Borres), RAMON JABADAN, JESUS ALIPAR and LEONILA
KABAHAR, ANTONIO LABRADOR, HEIRS OF NICASIO GABISAY (represented by Arsenio
Gabisay), PACIFICO LABRADOR, DEMETRIO LABRADOR and FRUCTOSA TABURA,
VENANCIO DEL MAR, MARINO DEL MAR, HEIRS OF TEODORA ARCILLO (represented by
Brigida Arcillo) DIONISIA GABUNADA, HEIRS OF BUENAVENTURA FRANCISCO (represented
by Felicidad Sadaya Francisco), HEIRS OF VICTORIA C. CABUENAS (represented by Alberto
Cabuenas) HEIRS OF CIPRIANO GABUNADA (represented by Claudio Gabunada), petitioners,
vs.
HON. JUAN Y. REYES, Executive Judge and Presiding Judge of Branch I, COURT OF FIRST
instance OF CEBU, and the PHILIPPINE TOURISM AUTHORITY, respondents.

George M. Baladjay, Mario G. dela Victoria, Olegario Sarmiento, Jr., and Democrito Barcenas for
petitioners.

The Solicitor General for respondent Judge.

F.A. Sugue & Elino B. Lingas for Philippine Tourism Authoirity

GUTIERREZ, JR., J.:

This is a petition for certiorari with preliminary injunction challenging the constitutionality of
Presidential Decree No. 564, the Revised Charter of the Philippine Tourism Authority, and
Proclamation No. 2052 declaring the barangays of Sibugay, Malubog, Babag and Sirao including the
proposed Lusaran Dam in the City of Cebu and in the municipalities of Argao and Dalaguete in the
province of Cebu as tourist zones. The petitioners ask that we restrain respondent Court of First
Instance of Cebu and the Philippine Tourism Authority (PTA) from enforcing and implementing the
writs of possession issued in four (4) expropriation cases filed by PTA against the petitioners: Civil
Cases Nos. R-19562, R-19684, R-20701, and R-21608 of the Court of First Instance of Cebu
(Branch 1).

The Philippine Tourism Authority filed four (4) Complaints with the Court of First Instance of Cebu
City for the expropriation of some 282 hectares of rolling land situated in barangays Malubog and
Babag, Cebu City, under PTA's express authority "to acquire by purchase, by negotiation or by
condemnation proceedings any private land within and without the tourist zones" for the purposes
indicated in Section 5, paragraph B(2), of its Revised Charter (PD 564), more specifically, for the
development into integrated resort complexes of selected and well-defined geographic areas with
potential tourism value. As uniformly alleged in the complaints, the purposes of the expropriation are:

xxx xxx xxx

Plaintiff, in line with the policy of the government to promote tourism and
development of tourism projects will construct in Barangays Malubog, Busay and
Babag, all of Cebu City, a sports complex (basketball courts, tennis courts, volleyball
courts, track and field, baseball and softball diamonds, and swimming pools),
clubhouse, gold course, children's playground and a nature area for picnics and
horseback riding for the use of the public.

The development plan, covering approximately 1,000 hectares, includes the

establishment of an electric power grid in the area by the National Power
Corporation, thus assuring the supply of electricity therein for the benefit of the whole
community. Deep wells will also be constructed to generate water supply within the
area. Likewise, a complex sewerage and drainage system will be devised and
constructed to protect the tourists and nearby residents from the dangers of pollution.

Complimentary and support facilities for the project will be constructed, including
public rest houses, lockers, dressing rooms, coffee shops, shopping malls, etc. Said
facilities will create and offer employment opportunities to residents of the community
and further generate income for the whole of Cebu City.

Plaintiff needs the property above described which is directly covered by the
proposed golf court.

xxx xxx xxx

The defendants in Civil Cases Nos. R-20701 and R-21608 filed their respective Opposition with
Motion to Dismiss and/or Reconsideration. The defendants in Civil Case No. R-19562 filed a
manifestation adopting the answer of defendants in Civil Case No. R-19864. The defendants, now
petitioners, had a common allegation in that the taking is allegedly not impressed with public use
under the Constitution.

In their motions to dismiss, the petitioners alleged, in addition to the issue of public use, that there is
no specific constitutional provision authorizing the taking of private property for tourism purposes;
that assuming that PTA has such power, the intended use cannot be paramount to the determination
of the land as a land reform area; that limiting the amount of compensation by Legislative fiat is
constitutionally repugnant; and that since the land is under the land reform program, it is the Court of
Agrarian Relations and not the Court of First Instance that has jurisdiction over the expropriation
cases.

The Philippine Tourism Authority having deposited with The Philippine National Bank, Cebu City
Branch, an amount equivalent to 10% of the value of the properties pursuant to Presidential Decree
No. 1533. the lower court issued separate orders authorizing PTA to take immediate possession of
the premises and directing the issuance of writs of possession.
On May 25, 1982, petitioners filed this petition questioning the orders of the respondent Judge, The
respondents have correctly restated the grounds in the petition as follows:

xxx xxx xxx

A. The complaints for expropriation lack basis because the Constitution does not
provide for the expropriation of private property for tourism or other related purposes;

B. The writs of possession or orders authorizing PTA to take immediate possession

is premature because the "public use" character of the taking has not been
previously demonstrated;

C. The taking is not for public use in contemplation of eminent domain law;

D. The properties in question have been previously declared a land reform area;
consequently, the implementation of the social justice pro- ,vision of the Constitution
on agrarian reform is paramount to the right of the State to expropriate for the
purposes intended;

E. Proclamation No. 2052 declaring certain barangays in Cebu City, which include
the lands subject of expropriation as within a tourist zone, is unconstitutional for it
impairs the obligation of contracts; "F. Since the properties are within a land reform
area, it is the Court of Agrarian Relations, not the lower court, that has jurisdiction
pursuant to Pres. Decree No. 946;

F. The forcible ejectment of defendants from the premises constitutes a criminal act
under Pres. Decree No. 583;

In their memorandum, the petitioners have summarized the issues as follows:

I. Enforcement of the Writ of Possession is Premature:

II. Presidential Decree 564 Amending Presidential Decree l89 is Constitutionally

Repugnant:

III. The Condemnation is not for Public Use, Therefore, Unconstitutional:

IV. The Expropriation for Tourism Purposes of Lands Covered by the Land Reform
Program Violates the Constitution:

V. Presidential Proclamation 2052 is Unconstitutional:

VI. Presidential Decree No 1533 is Unconstitutional:

VII. The Court of First Instance has no Jurisdiction:

VIII. The Filing of the Present Petition is not Premature.

The issues raised by the petitioners revolve around the proposition that the actions to expropriate
their properties are constitutionally infirm because nowhere in the Constitution can a provision be
found which allows the taking of private property for the promotion of tourism.

The petitioners' arguments in their pleadings in support of the above proposition are subsumed
under the following headings:

1. Non-compliance with the "public use" requirement under the eminent domain
provision of the Bill of Rights.

2. Disregard of the land reform nature of the property being expropriated.

3. Impairment of the obligation of contracts.

There are three provisions of the Constitution which directly provide for the exercise of the power of
eminent domain. Section 2, Article IV states that private property shall not be taken for public use
without just compensation. Section 6, Article XIV allows the State, in the interest of national welfare
or defense and upon payment of just compensation to transfer to public ownership, utilities and other
private enterprises to be operated by the government. Section 13, Article XIV states that the
Batasang Pambansa may authorize upon payment of just compensation the expropriation of private
lands to be subdivided into small lots and conveyed at cost to deserving citizens.

While not directly mentioning the expropriation of private properties upon payment of just
compensation, the provisions on social justice and agrarian reforms which allow the exercise of
police power together with the power of eminent domain in the implementation of constitutional
objectives are even more far-reaching insofar as taking of private property is concerned.

Section 6, Article II provides:

Sec. 6. The State shall promote social justice to ensure the dignity, welfare, and
security of all the people. Towards its end, the State shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private property, and equitably diffuse
property ownership and profits.

xxx xxx xxx

Section 12, Article XIV provides:

See. 12. The State shall formulate and implement an agrarian reform program aimed
at emancipating the tenant from the bondage of the soil and achieving the goals
enunciated in this Constitution.

The equitable diffusion of property ownership in the promotion of social justice implies the exercise,
whenever necessary, of the power to expropriate private property. Likewise there can be no
meaningful agrarian reform program unless the power to expropriate is utilized.

We cite all the above provisions on the power to expropriate because of the petitioners' insistence on
a restrictive view of the eminent domain provision. The thrust of all constitutional provisions on
expropriation is in the opposite direction.
As early as 1919, this Court in Visayan Refining Co. v. Samus (40 Phil. 550) categorized the
restrictive view as wholly erroneous and based on a misconception of fundamentals.

The petitioners look for the word "tourism" in the Constitution. Understandably the search would be
in vain. The policy objectives of the framers can be expressed only in general terms such as social
justice, local autonomy, conservation and development of the national patrimony, public interest, and
general welfare, among others. The programs to achieve these objectives vary from time to time and
according to place, To freeze specific programs like Tourism into express constitutional provisions
would make the Constitution more prolix than a bulky code and require of the framers a prescience
beyond Delphic proportions. The particular mention in the Constitution of agrarian reform and the
transfer of utilities and other private enterprises to public ownership merely underscores the
magnitude of the problems sought to be remedied by these programs. They do not preclude nor limit
the exercise of the power of eminent domain for such purposes like tourism and other development
programs.

In the leading case of Visayan Refining Co. v. Camus (supra), this Court emphasized that the power
of eminent domain is inseparable from sovereignty being essential to the existence of the State and
inherent in government even in its most primitive forms. The only purpose of the provision in the Bill
of Rights is to provide some form of restraint on the sovereign power. It is not a grant of authority -

The power of eminent domain does not depend for its existence on a specific grant in
the constitution. It is inherent in sovereignty and exists in a sovereign state without
any recognition of it in the constitution. The provision found in most of the state
constitutions relating to the taking of property for the public use do not by implication
grant the power to the government of the state, but limit a power which would
otherwise be without limit.

The constitutional restraints are public use and just compensation.

Do the purposes of the taking in this case constitute "public use"?

The petitioners ask us to adopt a strict construction and declare that "public use" means literally use
by the public and that "public use" is not synonymous with "public interest", "public benefit", or
"public welfare" and much less "public convenience. "

The petitioners face two major obstacles. First, their contention which is rather sweeping in its call
for a retreat from the public welfare orientation is unduly restrictive and outmoded. Second, no less
than the lawmaker has made a policy determination that the power of eminent domain may be
exercised in the promotion and development of Philippine tourism.

The restrictive view of public use may be appropriate for a nation which circumscribes the scope of
government activities and public concerns and which possesses big and correctly located public
lands that obviate the need to take private property for public purposes. Neither circumstance
applies to the Philippines. We have never been a laissez faire State, And the necessities which
impel the exertion of sovereign power are all too often found in areas of scarce public land or limited
government resources.

Certain aspects of parliamentary government were introduced by the 1973 amendments to the
Constitution with further modifications in the 1976 and 1981 amendments. Insofar as the executive
and legislative departments are concerned, the traditional concept of checks and balances in a
presidential form was considerably modified to remove some roadblocks in the expeditious
implementation of national policies. There was no such change for the judiciary. We remain as a
checking and balancing department even as all strive to maintain respect for constitutional
boundaries. At the same time, the philosophy of coordination in the pursuit of developmental goals
implicit in the amendments also constrains in the judiciary to defer to legislative discretion iii the
judicial review of programs for economic development and social progress unless a clear case of
constitutional infirmity is established. We cannot stop the legitimate exercise of power on an
invocation of grounds better left interred in a bygone age and time.* As we review the efforts of the
political departments to bring about self-sufficiency, if not eventual abundance, we continue to
maintain the liberal approach because the primary responsibility and the discretion belong to them.

There can be no doubt that expropriation for such traditions' purposes as the construction of roads,
bridges, ports, waterworks, schools, electric and telecommunications systems, hydroelectric power
plants, markets and slaughterhouses, parks, hospitals, government office buildings, and flood control
or irrigation systems is valid. However, the concept of public use is not limited to traditional
purposes. Here as elsewhere the Idea that "public use" is strictly limited to clear cases of "use by the
public" has been discarded.

In the United States, the rule was enunciated in Berman v. Parker (348 U.S. 25; 99 L. ed. 27) as
follows:

We do not sit to determine whether a particular housing project is or is not desirable.

The concept of the public welfare is broad and inclusive. See DayBrite Lighting, Inc.
v. Missouri, 342 US 421, 424, 96 L ed 469, 472, 72 S Ct 405. The values it
represents are spiritual as well as physical, aesthetic as well as monetary. It is within
the power of the legislature to determine that the community should be beautiful as
well as healthy, spacious as well as clean, well-balanced as well as carefully
patrolled. In the present case, the Congress and its authorized agencies have made
determinations that take into account a wide variety of values. It is not for us to
reappraise them. If those who govern the District of Columbia decide that the
Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.

Once the object is within the authority of Congress, the right to realize it through the
exercise of eminent domain is clear. For the power of eminent domain is merely the
means to the end. See Luxton v. North River Bridge Co. 153 US 525, 529, 530, 38 L
ed 808, 810, 14 S Ct 891; United States v. Gettysburg Electric R. Co. 160 US 668,
679, 40 L ed 576, 580, 16 S Ct 427.

In an earlier American case, where a village was isolated from the rest of North Carolina because of
the flooding of the reservoir of a dam thus making the provision of police, school, and health services
unjustifiably expensive, the government decided to expropriate the private properties in the village
and the entire area was made part of an adjoining national park. The district court and the appellate
court ruled against the expropriation or excess condemnation. The Court of Appeals applied the "use
by the public" test and stated that the only land needed for public use was the area directly flooded
by the reservoir. The village may have been cut off by the dam but to also condemn it was excess
condemnation not valid under the "Public use" requirement. The U.S. Supreme Court in United
States ex rel TVA v. Welch (327 U.S, 546; 90 L. ed 843) unanimously reversed the lower courts. It
stated:

The Circuit Court of Appeals, without expressly relying on a compelling rule of

construction that would give the restrictive scope to the T.V.A. Act given it by the
district court, also interpreted the statute narrowly. It first analyzed the facts by
segregating the total problem into distinct parts, and thus came to the conclusion that
 T.V.A.'s purpose in condemning the land in question was only one to reduce its
liability arising from the destruction of the highway. The Court held that use of the
lands for that purpose is a "private" and not a "public use" or, at best, a "public use"
not authorized by the statute. we are unable to agree with the reasoning and
conclusion of the Circuit Court of Appeals.

We think that it is the function of Congress to decide what type of taking is for a
public use and that the agency authorized to do the taking may do so to the still
extent of its statutory authority, United States v. Gettysburg Electric R. Co. 160 US
668, 679, 40 L ed 576, 580, 16 S Ct 427. ...

xxx xxx xxx

... But whatever may be the scope of the judicial power to determine what is a "public
use" in Fourteenth Amendment controversies, this Court has said that when
Congress has spoken on this subject "Its decision is entitled to deference until it is
shown to involve an impossibility." Old Dominion Land Co. v. United States, 269, US
55, 66, 70 L ed 162, 46 S Ct 39. Any departure from this judicial restraint would result
in courts deciding on what is and is not a governmental function and in their
invalidating legislation on the basis of their view on that question at the moment of
decision, a practice which has proved impracticable in other fields. See Case v.
Bowles decided February 4, 1946, 437 US 92, 101, ante, 552, 559, 66 S Ct 438.
New York v. United States, 326 US 572 ante 326, 66 S Ct 310). We hold that the
T.V.A. took the tracts here involved for a public purpose, if, as we think is the case,
Congress authorized the Authority to acquire, hold, and use the lands to carry out the
purposes of the T.V.A. Act.

In the Philippines, Chief Justice Enrique M. Fernando has aptly summarized the statutory and
judicial trend as follows:

The taking to be valid must be for public use. There was a time when it was felt that a
literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks.
Otherwise, expropriation is not allowable. It is not any more. As long as the purpose
of the taking is public, then the power of eminent domain comes into play. As just
noted, the constitution in at least two cases, to remove any doubt, determines what is
public use. One is the expropriation of lands to be subdivided into small lots for
resale at cost to individuals. The other is in the transfer, through the exercise of this
power, of utilities and other private enterprise to the government. It is accurate to
state then that at present whatever may be beneficially employed for the general
welfare satisfies the requirement of public use. (Fernando, The Constitution of the
Philippines, 2nd ed., pp. 523-524)

The petitioners' contention that the promotion of tourism is not "public use" because private
concessioners would be allowed to maintain various facilities such as restaurants, hotels, stores, etc.
inside the tourist complex is impressed with even less merit. Private bus firms, taxicab fleets,
roadside restaurants, and other private businesses using public streets end highways do not
diminish in the least bit the public character of expropriations for roads and streets. The lease of
store spaces in underpasses of streets built on expropriated land does not make the taking for a
private purpose. Airports and piers catering exclusively to private airlines and shipping companies
are still for public use. The expropriation of private land for slum clearance and urban development is
for a public purpose even if the developed area is later sold to private homeowners, commercial
firms, entertainment and service companies, and other private concerns.

The petitioners have also failed to overcome the deference that is appropriately accorded to
formulations of national policy expressed in legislation. The rule in Berman u. Parker (supra) of
deference to legislative policy even if such policy might mean taking from one private person and
conferring on another private person applies as well as in the Philippines.

... Once the object is within the authority of Congress, the means by which it will be
attained is also for Congress to determine. Here one of the means chosen is the use
of private enterprise for redevelopment of the area. Appellants argue that this makes
the project a taking from one businessman for the benefit of another businessman.
But the means of executing the project are for Congress and Congress alone to
determine, once the public purpose has been established. Selb Luxton v. North River
Bridge Co. (US) supra; cf. Highland v. Russel Car & Snow Plow Co. 279 US 253, 73
L ed 688, 49 S Ct 314. The public end may be as well or better served through an
agency of private enterprise than through a department of government-or so the
Congress might conclude. We cannot say that public ownership is the sole method of
promoting the public purposes of community redevelopment projects. What we have
said also disposes of any contention concerning the fact that certain property owners
in the area may be permitted to repurchase their properties for redevelopment in
harmony with the over-all plan. That, too, is a legitimate means which Congress and
its agencies may adopt, if they choose. (Berman v. Parker, 99 L ed 38, 348 US 33,
34)

An examination of the language in the 1919 cases of City of Manila v. Chinese Community of
Manila (40 Phil, 349) and Visayan Refining Co. vs. Camus, earlier cited, shows that from the very
start of constitutional government in our country judicial deference to legislative policy has been
clear and manifest in eminent domain proceedings.

The expressions of national policy are found in the revised charter of the Philippine Tourism
Authority, Presidential Decree No. 564:

WHEREAS, it is the avowed aim of the government to promote Philippine tourism

and work for its accelerated and balanced growth as well as for economy and
expediency in the development of the tourism plant of the country;

xxx xxx xxx

SECTION 1. Declaration of Policy. - It is hereby declared to be the policy of the State

to promote, encourage, and develop Philippine tourism as an instrument in
accelerating the development of the country, of strengthening the country's foreign
exchange reserve position, and of protecting Philippine culture, history, traditions and
natural beauty, internationally as well as domestically.

The power of eminent domain is expressly provided for under Section 5 B(2) as follows:

xxx xxx xxx

2. Acquisition of Private Lands, Power of Eminent Domain. — To acquire by

purchase, by negotiation or by condemnation proceedings any private land within
 and without the tourist zones for any of the following reasons: (a) consolidation of
lands for tourist zone development purposes, (b) prevention of land speculation in
areas declared as tourist zones, (c) acquisition of right of way to the zones, (d)
protection of water shed areas and natural assets with tourism value, and (e) for any
other purpose expressly authorized under this Decree and accordingly, to exercise
the power of eminent domain under its own name, which shall proceed in the manner
prescribed by law and/or the Rules of Court on condemnation proceedings. The
Authority may use any mode of payment which it may deem expedient and
acceptable to the land owners: Provided, That in case bonds are used as payment,
the conditions and restrictions set forth in Chapter III, Section 8 to 13 inclusively, of
this Decree shall apply.

xxx xxx xxx

The petitioners rely on the Land Reform Program of the government in raising their second
argument. According to them, assuming that PTA has the right to expropriate, the properties subject
of expropriation may not be taken for the purposes intended since they are within the coverage of
"operation land transfer" under the land reform program. Petitioners claim that certificates of land
transfer (CLT'S) and emancipation patents have already been issued to them thereby making the
lands expropriated within the coverage of the land reform area under Presidential Decree No. 2; that
the agrarian reform program occupies a higher level in the order of priorities than other State policies
like those relating to the health and physical well- being of the people; and that property already
taken for public use may not be taken for another public use.

We have considered the above arguments with scrupulous and thorough circumspection. For indeed
any claim of rights under the social justice and land reform provisions of the Constitution deserves
the most serious consideration. The Petitioners, however, have failed to show that the area being
developed is indeed a land reform area and that the affected persons have emancipation patents
and certificates of land transfer.

The records show that the area being developed into a tourism complex consists of more than 808
hectares, almost all of which is not affected by the land reform program. The portion being
expropriated is 282 hectares of hilly and unproductive land where even subsistence farming of crops
other than rice and corn can hardly survive. And of the 282 disputed hectares, only 8,970 square
meters-less than one hectare-is affected by Operation Land Transfer. Of the 40 defendants, only two
have emancipation patents for the less than one hectare of land affected. And this 8,970 square
meters parcel of land is not even within the sports complex proper but forms part of the 32 hectares
resettlement area where the petitioners and others similarly situated would be provided with proper
housing, subsidiary employment, community centers, schools, and essential services like water and
electricity-which are non-existent in the expropriated lands. We see no need under the facts of this
petition to rule on whether one public purpose is superior or inferior to another purpose or engage in
a balancing of competing public interests. The petitioners have also failed to overcome the showing
that the taking of the 8,970 square meters covered by Operation Land Transfer forms a necessary
part of an inseparable transaction involving the development of the 808 hectares tourism complex.
And certainly, the human settlement needs of the many beneficiaries of the 32 hectares resettlement
area should prevail over the property rights of two of their compatriots.

The invocation of the contracts clause has no merit. The non-impairment clause has never been a
barrier to the exercise of police power and likewise eminent domain. As stated in Manigault v.
Springs (199 U.S. 473) "parties by entering into contracts may not stop the legislature from enacting
laws intended for the public good."
The applicable doctrine is expressed in Arce v. Genato (69 SCRA 544) which involved the
expropriation of land for a public plaza. The Court stated:

xxx xxx xxx

... What is claimed is that there must be a showing of necessity for such
condemnation and that it was not done in this case in support of such a view,
reliance is placed on City of Manila v. Arenano Law Colleges. (85 Phil. 663 [1950])
That doctrine itself is based on the earlier case of City of Manila v. Chinese
Community of Manila, (50 Phil. 349) also, like Camus, a 1919 decision. As could be
discerned, however, in the Arellano Law Colleges decision. it was the antiquarian
view of Blackstone with its sanctification of the right to one's estate on which such an
observation was based. As did appear in his Commentaries: "So great is the regard
of the law for private property that it will not, authorize the least violation of it, even
for the public good, unless there exists a very great necessity thereof." Even the
most , cursory glance at such well-nigh absolutist concept of property would show its
obsolete character at least for Philippine constitutional law. It cannot survive the test
of the 1935 Constitution with its mandates on social justice and protection to labor.
(Article II, Section 5 of the 1935 Constitution reads: "The promotion of social justice
to unsure the well-being and economic security of all the people should be the
concern of the State." Article XI, Section 6 of the same Constitution provides: "The
State shall afford protection to labor, especially to working women and minors, and
shall regulate the relation between landowner and tenant, and between labor and
capital in industry and in agriculture. The State may provide for compulsory
arbitration.") What is more, the present Constitution pays even less heed to the
claims of property and rightly so. After stating that the State shall promote social
justice, it continues: "Towards this end, the State shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private property, and equitably diffuse
property ownership and profits." (That is the second sentence of Article II, Section 6
of the Constitution) If there is any need for explicit confirmation of what was set forth
in Presidential Decree No. 42, the above provision supplies it. Moreover, that is
merely to accord to what of late has been the consistent course of decisions of this
Court whenever property rights are pressed unduly. (Cf. Alalayan v. National Power
Corporation, L-24396, July 29, 1968, 24 SCRA 172; Agricultural Credit and
Cooperative Financing Administration v. Confederation of Unions, L-21484, Nov. 29,
1969, 30 SCRA 649; Edu v. Ericta, L-32096, Oct. 24, 1970, 35 SCRA 481; Phil.
Virginia Tobacco Administration v. Court of Industrial Relations, L-32052, July 25,
1975, 65 SCRA 416) The statement therefore, that there could be discerned a
constitutional objection to a lower court applying a Presidential Decree, when it
leaves no doubt that a grantee of the power of eminent domain need not prove the
necessity for the expropriation, carries its own refutation.

xxx xxx xxx

The issue of prematurity is also raised by the petitioners. They claim that since the necessity for the
taking has not been previously established, the issuance of the orders authorizing the PTA to take
immediate possession of the premises, as well as the corresponding writs of possession was
premature.

Under Presidential Decree No. 42, as amended by Presidential Decree No. 1533, the government,
its agency or instrumentality, as plaintiff in an expropriation proceedings is authorized to take
immediate possession, control and disposition of the property and the improvements, with power of
demolition, notwithstanding the pendency of the issues before the court, upon deposit with the
Philippine National Bank of an amount equivalent to 10% of the value of the property expropriated.
The issue of immediate possession has been settled in Arce v. Genato (supra). In answer to the
issue:

... whether the order of respondent Judge in an expropriation case allowing the other
respondent, ... to take immediate possession of the parcel of land sought to be
condemned for the beautification of its public plaza, without a prior hearing to
determine the necessity for the exercise of the power of eminent domain, is vitiated
by jurisdictional defect, ...

this Court held that:

... It is not disputed that in issuing such order, respondent Judge relied on
Presidential Decree No. 42 issued on the 9th of November, 1972. (Presidential
Decree No. 42 is entitled "Authorizing the Plaintiff in Eminent Domain Proceedings to
Take Possession of the Property involved Upon Depositing the Assessed Value for
Purposes of Taxation.") The question as thus posed does not occasion any difficulty
as to the answer to be given. This petition for certiorari must fail, there being no
showing that compliance with the Presidential Decree, which under the Transitory
Provisions is deemed a part of the law of the land, (According to Article XVII, Section
3 par. (2) of the Constitution: "All proclamations, orders, decrees, instructions and
acts promulgated, issued, or done by the incumbent President shall be part of the
law of the land, and shall remain valid, legal, binding, and effective even after lifting
of martial law or the ratification of this Constitution, unless modified, revoked, or
superseded by subsequent proclamations. orders, decrees instructions, or other acts
of the incumbent President, or unless expressly and explicitly modified or repealed
by the regular National Assembly") would be characterized as either an act in excess
of jurisdiction or a grave abuse of discretion. So we rule.

Likewise in Ramos v. Philippine Tourism Authority (G.R. Nos. 52449-50, June 9, 1980), this Court
held:

... condemnation or expropriation proceedings is in the nature of one that is quasi-in-

rem wherein the fact that the owner of the property is made a party is not essentially
indispensable insofar was least as it conncerns is the immediate taking of
possession of the property and the preliminary determination of its value, including
the amount to be deposited.

In their last argument, the petitioners claim that a consequence of the expropriation proceedings
would be their forcible ejectment. They contend that such forcible ejectment is a criminal act under
Presidential Decree No. 583. This contention is not valid. Presidential Decree No. 583 prohibits the
taking cognizance or implementation of orders designed to obstruct the land reform program. It
refers to the harassment of tenant- farmers who try to enforce emancipation rights. It has nothing to
do with the expropriation by the State of lands needed for public purposes. As a matter of fact, the
expropriated area does not appear in the master lists of the Ministry of Agrarian Reforms as a
teranted area. The petitioners' bare allegations have not been supported with particulars pointing to
specific parcels which are subject of tenancy contracts. The petitioners may be owner-tillers or may
have some form of possessory or ownership rights but there has been no showing of their being
tenants on the disputed lands.
The petitioners have failed to overcome the burden of anyone trying to strike down a statute or
decree whose avowed purpose is the legislative perception is the public good. A statute has in its
favor the presumption of validity. All reasonable doubts should be resolved in favor of the
constitutionality of a law. The courts will not set aside a law as violative of the Constitution except in
a clear case (People v. Vera, 65 Phil. 56). And in the absence of factual findings or evidence to rebut
the presumption of validity, the presumption prevails (Ermita-Malate Hotel, etc. v. Mayor of Manila,
20 SCRA 849; Morfe v. Mutuc, 22 SCRA 424).

The public respondents have stressed that the development of the 808 hectares includes plans that
would give the petitioners and other displaced persons productive employment, higher incomes,
decent housing, water and electric facilities, and better living standards. Our dismissing this petition
is, in part, predicated on those assurances. The right of the PTA to proceed with the expropriation of
the 282 hectares already Identified as fit for the establishment of a resort complex to promote
tourism is, therefore, sustained.

WHEREFORE, the instant petition for certiorari is hereby DISMISSE D for lack of merit.

SO ORDERED.
 G.R. No. L-48685. September 30, 1987.]

LORENZO SUMULONG and EMILIA VIDANES-BALAOING, Petitioners, v. HON.

BUENAVENTURA GUERRERO and NATIONAL HOUSING
AUTHORITY, Respondents.

DECISION

CORTES, J.:

On December 5, 1977 the National Housing Authority (NHA) filed a complaint for
expropriation of parcels of land covering approximately twenty five (25) hectares, (in
Antipolo Rizal) including the lots of petitioners Lorenzo Sumulong and Emilia Vidanes-
Balaoing with an area of 6,667 square meters and 3,333 square meters respectively.
The land sought to be expropriated were valued by the NHA at one peso (P1.00) per
square meter adopting the market value fixed by the provincial assessor in accordance
with presidential decrees prescribing the valuation of property in expropriation
proceedings. chanrobles lawlibrary : rednad

Together with the complaint was a motion for immediate possession of the properties.
The NHA deposited the amount of P158,980.00 with the Philippine National Bank,
representing the "total market value" of the subject twenty five hectares of land,
pursuant to Presidential Decree No. 1224 which defines "the policy on the expropriation
of private property for socialized housing upon payment of just compensation." cralaw virtua1aw library

On January 17, 1978, respondent Judge issued the following Order: chanrob1es virtual 1aw library

Plaintiff having deposited with the Philippine National Bank, Heart Center Extension
Office, Diliman, Quezon City, Metro Manila, the amount of P158,980.00 representing
the total market value of the subject parcels of land, let a writ of possession be
issued."cralaw virtua1aw library

SO ORDERED.

Pasig, Metro Manila, January 17, 1978.

(SGD) BUENAVENTURA S. GUERRERO

Judge

Petitioners filed a motion for reconsideration on the ground that they had been deprived
of the possession of their property without due process of law. This was however,
denied.

Hence, this petition challenging the orders of respondent Judge and assailing the
constitutionality of Pres. Decree No. 1224, as amended. Petitioners argue that: chanrob1es virtual 1aw library
1) Respondent Judge acted without or in excess of his jurisdiction or with grave abuse
of discretion by issuing the Order of January 17, 1978 without notice and without
hearing and in issuing the Order dated June 28, 1978 denying the motion for
reconsideration.

2) Pres. Decree 1224, as amended, is unconstitutional for being violative of the due
process clause, specifically:
chanrob1es virtual 1aw library

a) The Decree would allow the taking of property regardless of size and no matter how
small the area to be expropriated;

b) "Socialized housing" for the purpose of condemnation proceeding, as defined in said

Decree, is not really for a public purpose;

c) The Decree violates procedural due process as it allows immediate taking of

possession, control and disposition of property without giving the owner his day in
court;

d) The Decree would allow the taking of private property upon payment of unjust and
unfair valuations arbitrarily fixed by government assessors;

e) The Decree would deprive the courts of their judicial discretion to determine what
would be the "just compensation" in each and every case of expropriation.

Indeed, the exercise of the power of eminent domain is subject to certain limitations
imposed by the constitution, to wit: chanrob1es virtual 1aw library

Private property shall not be taken for public use without just compensation" (Art. IV,
sec. 9);

No person shall be deprived of life, liberty, or property without due process of law, nor
shall any person be denied the equal protection of the laws" (Art. IV, sec. 1).

Nevertheless, a clear case of constitutional infirmity has to be established for this Court
to nullify legislative or executive measures adopted to implement specific constitutional
provisions aimed at promoting the general welfare.

Petitioners’ objections to the taking of their property subsumed under the headings of
public use, just compensation, and due process have to be balanced against competing
interests of the public recognized and sought to be served under declared policies of the
constitution as implemented by legislation.

1. Public use

a) Socialized Housing

Petitioners contend that "socialized housing" as defined in Pres. Decree No. 1224, as
amended, for the purpose of condemnation proceedings is not "public use" since it will
benefit only "a handful of people, bereft of public character." cralaw virtua1aw library
"Socialized housing" is defined as, "the construction of dwelling units for the middle and
lower class members of our society, including the construction of the supporting
infrastructure and other facilities" (Pres. Decree No. 1224, par. 1). This definition was
later expanded to include among others: chanrob1es virtual 1aw library

a) The construction and/or improvement of dwelling units for the middle and lower
income groups of the society, including the construction of the supporting infrastructure
and other facilities;

b) Slum clearance, relocation and resettlement of squatters and slum dwellers as well
as the provision of related facilities and services;

c) Slum improvement which consists basically of allocating homelots to the dwellers in

the area or property involved, rearrangement and re-alignment of existing houses and
other dwelling structures and the construction and provision of basic community
facilities and services, where there are none, such as roads, footpaths, drainage,
sewerage, water and power system, schools, barangay centers, community centers,
clinics, open spaces, parks, playgrounds and other recreational facilities;

d) The provision of economic opportunities, including the development of commercial

and industrial estates and such other facilities to enhance the total community growth;
and

e) Such other activities undertaken in pursuance of the objective to provide and

maintain housing for the greatest number of people under Presidential Decree No. 757.
(Pres. Decree No. 1259, sec. 1)

The "public use" requirement for a valid exercise of the power of eminent domain is a
flexible and evolving concept influenced by changing conditions. In this jurisdiction, the
statutory and judicial trend has been summarized as follows: chanrob1es virtual 1aw library

The taking to be valid must be for public use. There was a time when it was felt that a
literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks.
Otherwise, expropriation is not allowable. It is not anymore. As long as the purpose of
the taking is public, then the power of eminent domain comes into play. As just noted,
the constitution in at least two cases. to remove any doubt, determines what is public
use. One is the expropriation of lands to be subdivided into small lots for resale at cost
to individuals. The other is in the transfer, through the exercise of this power, of
utilities and other private enterprise to the government. It is accurate to state then that
at present whatever may be beneficially employed for the general welfare satisfies the
requirement of public use [Heirs of Juancho Ardona v. Reyes, G.R. Nos. 60549, 60553-
60555, October 26, 1983, 125 SCRA 220 (1983) at 234-5 quoting E. FERNANDO, THE
CONSTITUTION OF THE PHILIPPINES 523-4, (2nd e., 1977) Emphasis supplied]

The term "public use" has acquired a more comprehensive coverage. To the literal
import of the term signifying strict use or employment by the public has been added
the broader notion of indirect public benefit or advantage. As discussed in the above
cited case of Heirs of Juancho Ardona: chanrob1es virtual 1aw library
The restrictive view of public use may be appropriate for a nation which circumscribes
the scope of government activities and public concerns and which possesses big and
correctly located public lands that obviate the need to take private property for public
purposes. Neither circumstance applies to the Philippines. We have never been a laissez
faire State. And the necessities which impel the exertion of sovereign power are an too
often found in areas of scarce public land or limited government resources. (p. 231)

Specifically, urban renewal or redevelopment and the construction of low-cost housing

is recognized as a public purpose, not only because of the expanded concept of public
use but also because of specific provisions in the Constitution. The 1973 Constitution
made it incumbent upon the State to establish, maintain and ensure adequate social
services including housing [Art. II, sec. 7]. The 1987 Constitution goes even further by
providing that:chanrob1es virtual 1aw library

The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a rising standard of living
and an improved quality of life for all. [Art. II, sec. 9]

The state shall, by law, and for the common good, undertake, in cooperation with the
private sector, a continuing program of urban land reform and housing which will make
available at affordable cost decent housing and basic services to underprivileged and
homeless citizens in urban centers and resettlement areas. It shall also promote
adequate employment opportunities to such citizens. In the implementation of such
program the State shall respect the rights of small property owners. (Art. XIII, sec.
9, Emphasis supplied)

Housing is a basic human need. Shortage in housing is a matter of state concern since
it directly and significantly affects public health, safety, the environment and in sum,
the general welfare. The public character of housing measures does not change because
units in housing projects cannot be occupied by all but only by those who satisfy
prescribed qualifications. A beginning has to be made, for it is not possible to provide
housing for all who need it, all at once. chanrobles.com.ph : virtual law library

Population growth, the migration to urban areas and the mushrooming of crowded
makeshift dwellings is a worldwide development particularly in developing countries. So
basic and urgent are housing problems that the United Nations General Assembly
proclaimed 1987 as the "International Year of Shelter for the Homeless" "to focus the
attention of the international community on those problems." The General Assembly is"
[s]eriously concerned that, despite the efforts of Governments at the national and local
levels and of international organizations, the living conditions of the majority of the
people in slums and squatter areas and rural settlements, especially in developing
countries, continue to deteriorate in both relative and absolute terms." [G.A. Res.
37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]

In the light of the foregoing, this Court is satisfied that "socialized housing" falls within
the confines of "public use." It is, particularly important to draw attention to paragraph
(d) of Pres. Dec. No. 1224 which should be construed in relation with the preceding
three paragraphs. Provisions on economic opportunities inextricably linked with low-
cost housing, or slum clearance, relocation and resettlement, or slum improvement
emphasize the public purpose of the project.

In the case at bar, the use to which it is proposed to put the subject parcels of land
meets the requisites of "public use." The lands in question are being expropriated by
the NHA for the expansion of Bagong Nayon Housing Project to provide housing
facilities to low-salaried government employees. Quoting respondents: chanrob1es virtual 1aw library

1. The Bagong Nayong Project is a housing and community development undertaking of

the National Housing Authority. Phase I covers about 60 hectares of GSIS property in
Antipolo, Rizal; Phase II includes about 30 hectares for industrial development and the
rest are for residential housing development.

It is intended for low-salaried government employees and aims to provide housing and
community services for about 2,000 families in Phase 1 and about 4,000 families in
Phase II.

It is situated on rugged terrain 7.5 kms. from Marikina Town proper; 22 Kms. east of
Manila; and is within the Lungsod Silangan Townsite Reservation (created by
Presidential Proclamation No. 1637 on April 18, 1977).

The lands involved in the present petitions are parts of the expanded/additional areas
for the Bagong Nayon Project totalling 25.9725 hectares. They likewise include raw,
rolling hills. (Rollo, pp. 266-7)

The acute shortage of housing units in the country is of public knowledge. Official data
indicate that more than one third of the households nationwide do not own their
dwelling places. A significant number live in dwellings of unacceptable standards, such
as shanties, natural shelters, and structures intended for commercial, industrial, or
agricultural purposes. Of these unacceptable dwelling units, more than one third is
located within the National Capital Region (NCR) alone which lies proximate to and is
expected to be the most benefited by the housing project involved in the case at bar
[See, National Census and Statistics Office, 1980 Census of Population and Housing].

According to the National Economic and Development Authority at the time of the
expropriation in question, about "50 per cent of urban families, cannot afford adequate
shelter even at reduced rates and will need government support to provide them with
social housing, subsidized either partially or totally" [NEDA, FOUR YEAR DEVELOPMENT
PLAN FY 1974-1977, p. 357]. Up to the present, housing "still remains to be out of the
reach of a sizable proportion of the population" [NEDA, MEDIUM-TERM PHILIPPINE
DEVELOPMENT PLAN 1987-1992, p. 240]. chanrobles lawlibrary : rednad

The mushrooming of squatter colonies in the Metropolitan Manila area as well as in

other cities and centers of population throughout the country, and, the efforts of the
government to initiate housing and other projects are matters of public knowledge [See
NEDA, FOUR YEAR DEVELOPMENT PLAN FY 1974-1977, pp. 357-361; NEDA, FIVE-YEAR
PHILIPPINE DEVELOPMENT PLAN 1978-1982, pp. 215-228; NEDA, FIVE YEAR
PHILIPPINE DEVELOPMENT PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM
PHILIPPINE DEVELOPMENT PLAN 1987-1992, pp. 240-254].

b) Size of Property
Petitioners further contend that Pres. Decree 1224, as amended, would allow the taking
of "any private land" regardless of the size and no matter how small the area of the
land to be expropriated. Petitioners claim that "there are vast areas of lands in
Mayamot, Cupang, and San Isidro, Antipolo, Rizal hundred of hectares of which are
owned by a few landowners only. It is surprising [therefore] why respondent National
Housing Authority [would] include [their] two small lots . . ." cralaw virtua1aw library

In J.M. Tuason Co., Inc. v. Land Tenure Administration, [G.R. No. L-21064, February
18, 1970, 31 SCRA 413 (1970, at 428] this Court earlier ruled that expropriation is not
confined to landed estates. This Court, quoting the dissenting opinion of Justice J.B.L.
Reyes in Republic v. Baylosis, [96 Phil. 461 (1955)], held that: chanrob1es virtual 1aw library

The propriety of exercising the power of eminent domain under Article XIII, section 4 of
our Constitution cannot be determined on a purely quantitative or area basis. Not only
does the constitutional provision speak of lands instead of landed estates, but I see no
cogent reason why the government, in its quest for social justice and peace, should
exclusively devote attention to conflicts of large proportions, involving a considerable
number of individuals, and eschew small controversies and wait until they grow into a
major problem before taking remedial action.

The said case of J.M. Tuason Co., Inc. departed from the ruling in Guido v. Rural
Progress Administration [84 Phil. 847 (1949)] which held that the test to be applied for
a valid expropriation of private lands was the area of the land and not the number of
people who stood to be benefited. Since then "there has evolved a clear pattern of
adherence to the `number of people to be benefited test’" [Mataas na Lupa Tenants
Association, Inc. v. Dimayuga, G.R. No. 32049, June 25, 1984, 130 SCRA 30 (1984) at
39]. Thus, in Pulido v. Court of Appeals [G.R. No. 57625, May 3, 1983, 122 SCRA 63
(1983) at 73], this Court stated that," [i]t is unfortunate that the petitioner would be
deprived of his landholdings, but his interest and that of his family should not stand in
the way of progress and the benefit of the greater majority of the inhabitants of the
country."cralaw virtua1aw library

The State acting through the NHA is vested with broad discretion to designate the
particular property/properties to be taken for socialized housing purposes and how
much thereof may be expropriated. Absent a clear showing of fraud, bad faith, or gross
abuse of discretion, which petitioners herein failed to demonstrate, the Court will give
due weight to and leave undisturbed the NHA’s choice and the size of the site for the
project. The property owner may not interpose objections merely because in their
judgment some other property would have been more suitable, or just as suitable, for
the purpose. The right to the use, enjoyment and disposal of private property is
tempered by and has to yield to the demands of the common good. The Constitutional
provisions on the subject are clear:chanrob1es virtual 1aw library

The state shall promote social justice in all phases of national development. (Art. II,
sec. 10)

The Congress shall give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural unequities by equitably diffusing wealth and
political power for the common good. To this end, the State shall regulate the
acquisition, ownership, use and disposition of property and its increments. (Art. XIII,
sec. 1)

Indeed, the foregoing provisions, which are restatements of the provisions in the 1935
and 1973 Constitutions, emphasize: chanrob1es virtual 1aw library

. . . the stewardship concept, under which private property is supposed to be held by

the individual only as a trustee for the people in general, who are its real owners. As a
mere steward, the individual must exercise his rights to the property not for his own
exclusive and selfish benefit but for the good of the entire community or nation [Mataas
na Lupa Tenants Association, Inc. supra at 42-3 citing I. CRUZ, PHILIPPINE POLITICAL
LAW, 70 (1983 ed.)].

2. Just Compensation

Petitioners maintain that Pres. Decree No. 1224, as amended, would allow the taking of
private property upon payment of unjust and unfair valuations arbitrarily fixed by
government assessors. In addition, they assert that the Decree would deprive the
courts of their judicial discretion to determine what would be "just compensation."

The foregoing contentions have already been ruled upon by this Court in the case of
Ignacio v. Guerrero (G.R. No. L-49088, May 29, 1987) which, incidentally, arose from
the same expropriation complaint that led to this instant petition. The provisions on just
compensation found in Presidential Decree Nos. 1224, 1259 and 1313 are the same
provisions found in Presidential Decree Nos. 76, 464, 794 and 1533 which were
declared unconstitutional in Export Processing Zone Authority v. Dulay (G.R. No. 59603,
April 29, 1987) for being encroachments on judicial prerogatives.

This Court abandoned the ruling in National Housing Authority v. Reyes [G.R. No.
49439, June 29, 1983, 123 SCRA 245 (1983)] which upheld Pres. Decree No 464, as
amended by Presidential Decree Nos. 794, 1224 and 1259.

In said case of Export Processing Zone Authority, this Court pointed out that: chanrob1es virtual 1aw library

The basic unfairness of the decrees is readily apparent.

Just compensation means the value of the property at the time of the taking. It means
a fair and full equivalent for the loss sustained All the facts as to the condition of the
property and its surroundings, its improvements and capabilities, should be considered.

x          x           x

Various factors can come into play in the valuation of specific properties singled out for
expropriation. The values given by provincial assessors are usually uniform for very
wide areas covering several barrios or even an entire town with the exception of the
poblacion. Individual differences are never taken into account. The value of land is
based on such generalities as its possible cultivation for rice, corn, coconuts, or other
crops. Very often land described as "cogonal" has been cultivated for generations.
Buildings are described in terms of only two or three classes of building materials and
estimates of areas are more often inaccurate than correct. Tax values can serve as
guides but cannot be absolute substitutes for just compensation.

To say that the owners are estopped to question the valuations made by assessors
since they had the opportunity to protest is illusory. The overwhelming mass of
landowners accept unquestioningly what is found in the tax declarations prepared by
local assessors or municipal clerks for them. They do not even look at, much less
analyze, the statements. The idea of expropriation simply never occurs until a demand
is made or a case filed by an agency authorized to do so. (pp. 12-3)

3. Due Process

Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process
as it allows immediate taking of possession, control and disposition of property without
giving the owner his day in court. Respondent Judge ordered the issuance of a writ of
possession without notice and without hearing.

The constitutionality of this procedure has also been ruled upon in the Export
Processing Zone Authority case, viz: chanrob1es virtual 1aw library

It is violative of due process to deny to the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to basic concepts
of justice and fairness to allow the haphazard work of minor bureaucrat or clerk to
absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro
and con have been presented, and after all factors and considerations essential to a fair
and just determination have been judiciously evaluated. (p. 13)

On the matter of the issuance of a writ of possession, the ruling in the Ignacio case is
reiterated, thus:chanrob1es virtual 1aw library

[I]t is imperative that before a writ of possession is issued by the Court in expropriation
proceedings, the following requisites must be met: (1) There must be a Complaint for
expropriation sufficient inform and in substance; (2) A provisional determination of just
compensation for the properties sought to be expropriated must be made by the trial
court on the basis of judicial (not legislative or executive) discretion; and (3) The
deposit requirement under Section 2, Rule 67 must be complied with. (p. 14)

This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as
amended by Pres. Decree Nos. 1259 and 1313, constitutes "public use" for purposes of
expropriation. However, as previously held by this Court, the provisions of such decrees
on just compensation are unconstitutional; and in the instant case the Court finds that
the Orders issued pursuant to the corollary provisions of those decrees authorizing
immediate taking without notice and hearing are violative of due process. chanroblesvirtualawlibrary

WHEREFORE, the Orders of the lower court dated January 17, 1978 and June 28, 1978
issuing the writ of possession on the basis of the market value appearing therein are
annulled for having been issued in excess of jurisdiction. Let this case be remanded to
the court of origin for further proceedings to determine the compensation the
petitioners are entitled to be paid. No costs.

SO ORDERED.
G.R. No. L-55166 May 2l, 1987

TIONGSON, married to CAYETANO TIONGSON, PACITA L. GO married to EDUARDO GO,

ROBERTO LAPERAL III, MIGUEL SISON, PHILIP L. MANOTOK, MARIA TERESA L. MANOTOK,
JOSE CLEMENTE MANOTOK, RAMON SEVERINO MANOTOK, JOSE MARIA MANOTOK and
JESUS JUDE MANOTOK, JR., assisted by their father and judicial guardian, JESUS
MANOTOK, MILAGROS V. MANOTOK, IGNACIO V. MANOTOK, JR., FELISA V. MANOTOK,
MARY-ANN V. MANOTOK, MICHAEL V. MANOTOK, FAUSTO C. MANOTOK, SEVERINO
MANOTOK III, and JESUS MANOTOK, petitioners,
vs.
NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents.

No. L-55167 May 21,1987

PATRICIA L. TIONGSON, PATRICIA L. GO, assisted by her husband EDWARD GO, ROBERTO
LAPERAL III, ELISA R. MANOTOK, JESUS R. MANOTOK, MIGUEL A. B. SISON, SEVERINO
MANOTOK III, JOSE MARIA MANOTOK and JESUS MANOTOK, represented herein by their
father and judicial guardian JESUS MANOTOK, JR., IGNACIO R. MANOTOK., and FAUSTO C.
MANOTOK, petitioners,
vs.
NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents

GUTIERREZ, JR., J.:

Before us are two petitions. The first one challenges the constitutionality of Presidential
Decree No. 1669 which provides for the expropriation of the property known as the
"Tambunting Estate" and the second challenges the constitutionality of Presidential Decree
No.1670 which provides for the expropriation of the property along the Estero de Sunog-
Apog. In both cases, the petitioners maintain that the two decrees are unconstitutional and
should be declared null and void because:

(1) They deprived the petitioners of their properties without due process of law.

(2) The petitioners were denied to their right to just compensation

(3) The petitioners' right to equal protection of the law was violated.

(4) The decrees are vague, defective, and patently erroneous.

(5) The petitioners' properties are not proper subjects for expropriation
considering their location and other relevant circumstances.

On June 11, 1977, the President of the Philippines issued Letter of Instruction (LOI) No. 555
instituting a nationwide slum improvement and resettlement program (SIR). On the same
date, the President also issued LOI No. 557, adopting slum improvement as a national
housing policy.
In compliance with LOI No. 555, the Governor of Metro Manila issued, on July 21, 1977,
Executive Order No.6-77 adopting the Metropolitan Manila Zonal Improvement Program which
included the properties known as the Tambunting Estate and the Sunog-Apog area in its
priority list for a zonal improvement program (ZIP) because the findings of the representative
of the City of Manila and the National Housing Authority (NHA) described these as blighted
communities.

On March 18, 1978, a fire razed almost the entire Tambunting Estate. Following this calamity,
the President and the Metro Manila Governor made public announcement that the national
government would acquire the property for the fire victims. The President also designated
the NHA to negotiate with the owners of the property for the acquisition of the same. This,
however, did not materialize as the negotiations for the purchase of the property failed.

On December 22, 1978, the President issued Proclamation No. 1810 declaring all sites
Identified by the Metro Manila local governments and approved by the Ministry of Human
Settlements to be included in the ZIP upon proclamation of the President. The Tambunting
Estate and the Sunog-Apog area were among the sites included.

On January 28, 1980, the President issued the challenged Presidential Decrees Nos. 1669 and
1670 which respectively declared the Tambunting Estate and the Sunog-Apog area
expropriated.

Presidential Decree No. 1669, provides, among others:

Section 1. The real properties known as the "Tambunting Estate" and covered
by TCT Nos. 119059, 122450, 122459, 122452 and Lots Nos. 1- A, 1-C, 1-D, l-E,
1-F and 1-H of (LRC) Psd-230517 (Previously covered by TCT No. 119058) of
the Register of Deeds of Manila with an area of 52,688.70 square meters, more
or less are hereby declared expropriated. The National Housing Authority
hereinafter referred to as the "Authority" is designated administrator of the
National Government with authority to immediately take possession, control,
disposition, with the power of demolition of the expropriated properties and
their improvements and shall evolve and implement a comprehensive
development plan for the condemned properties.

xxx xxx xxx

Section 6. Notwithstanding any provision of law or decree to the contrary and

for the purpose of expropriating this property pegged at the -.market value
determined by the City Assessor pursuant to Presidential Decree No. 76, as
amended, particularly by Presidential Decree No. 1533 which is in force and in
effect at the time of the issuance of this decree. In assessing the market value,
the City Assessor pursuant consider existing conditions in the area notably,
that no improvement has been undertaken on the land and that the land is
squatted upon by resident families which should considerably depress the
expropriation cost. Subject to the foregoing, the just compensation for the
above property should not exceed a maximum of SEVENTEEN MILLION
PESOS (Pl7,000,000.00) which shall be payable to the owners within a period of
five (5) years in five (5) equal installments.

Presidential Decree No. 1670, on the other hand, provides:

 Section 1. The real property along the Estero de Sunog-Apog in Tondo, Manila
formerly consisting of Lots Nos 55-A, 55-B and 55-C, Block 2918 of the
subdivision plan Psd-1 1746, covered by TCT Nos. 49286, 49287 and 49288,
respectively, of the Registry of Deeds of Manila, and formerly owned by the
Manotok Realty, Inc., with an area of 72,428.6 square meters, more or less, is
hereby declared expropriated. The National Housing Authority hereinafter
referred to as the 'Authority' is designated administrator of the National
Government with authority to immediately take possession, control and
disposition, with the power of demolition of the expropriated properties and
their improvements and shall evolve and imagine implement a comprehensive
development plan for the condemned properties.

xxx xxx xxx

Section 6. Notwithstanding any provision of law or decree to the contrary and

for the purpose of expropriating this property pegged at the market value
determined by the City Assessor pursuant to Presidential Decree No. 76, as
amended, particularly by Presidential Decree No. 1533 which is in force and in
effect at the time of the issuance of this decree. In assessing the market value,
the City Assessor shall consider existing conditions in the area notably, that
no improvement has been undertaken on the land and that the land is squatted
upon by resident families which should considerably depress the
expropriation cost. Subject to the foregoing, the just compensation for the
above property should not exceed a maximum of EIGHT MILLION PESOS
(P8,000,000.00), which shall be payable to the owners within a period of five (5)
years in five equal installment.

On April 4, 1980, the National Housing Authority, through its general-manager, wrote the
Register of Deeds of Manila, furnishing it with a certified copy of P.D. Nos. 1669 and 1670 for
registration, with the request that the certificates of title covering the properties in question
be cancelled and new certificates of title be issued in the name of the Republic of the
Philippines.

However, the Register of Deeds in her letter to NHA's general-manager, requested the
submission of the owner's copy of the certificates of title of the properties in question to
enable her to implement the aforementioned decrees.

Subsequently, petitioner Elisa R. Manotok, one of the owners of the properties to be

expropriated, received from the NHA a letter informing her that the latter had deposited, on
July 16, 1980, with the Philippine National Bank the total amount of P5,000,000.00 which
included the amount of P3,400,000.00 representing the first annual installment for the
Tambunting Estate pursuant to P.D. No. 1669; and another P5,000,000.00 which also included
the amount of P1,600,000.00 representing the first annual installment for the Sunog-Apog
area under P.D. No. 1670. The petitioner was also informed that she was free to withdraw her
share in the properties upon surrender by her of the titles pertaining to said properties and
that if petitioner failed to avail herself of the said offer, the NHA would be constrained to take
the necessary legal steps to implement the decrees.

On August 19, 1980, petitioner Elisa R. Manotok wrote a letter to the NHA alleging, inter alia,
that the amounts of compensation for the expropriation of the properties of the petitioners as
fixed in the decrees do not constitute the "just compensation" envisioned in the Constitution.
She expressed veritable doubts about the constitutionality of the said decrees and informed
the NHA that she did not believe that she was obliged to withdraw the amount of
P5,000,000.00 or surrender her titles over the properties.

In the meantime, some officials of the NHA circulated instructions to the tenants-occupants
of the properties in dispute not to pay their rentals to the petitioners for their lease-
occupancy of the properties in view of the passage of P.D. Nos. 1669 and 1670. Hence, the
owners of the Tambunting Estate filed a petition to declare P.D. No. 1669 unconstitutional.
The owners of the Sunog-Apog area also filed a similar petition attacking the constitutionality
of P.D. No. 1670.

On September 27, 1982, the lessees of the Tambunting Estate and the Sunog-Apog area filed
a motion for leave to intervene together with their petition for intervention alleging that they
are themselves owners of the buildings and houses built on the properties to be expropriated
and as such, they are real parties-in-interest to the present petitions.

The petitioners maintain that the Presidential Decrees providing for the direct expropriation
of the properties in question violate their constitutional right to due process and equal
protection of the law because by the mere passage of the said decrees their properties were
automatically expropriated and they were immediately deprived of the ownership and
possession thereof without being given the chance to oppose such expropriation or to
contest the just compensation to which they are entitled.

The petitioners argue that the government must first have filed a complaint with the proper
court under Rule 67 of the Revised Rules of Court in order to fulfill the requirements of due
process. 'They contend that the determination of just compensation should not have been
vested solely with the City Assessor and that a maximum or fixed amount of compensation
should not have been imposed by the said decrees. Petitioners likewise state that by
providing for the maximum amount of just compensation and by directing the City Assessor
to take into consideration the alleged existing conditions of the properties in question,
namely: that no "improvement has been undertaken on the land and that the land is squatted
upon by resident families which should considerably depress the expropriation costs," the
City Assessor is forced to accept, as actual and existing conditions of the property, the
foregoing statements in the decrees when in fact the Sunog-Apog area has been subdivided
into subdivision lots and leased to the occupants thereof under contracts of lease, making
them lessees and not squatters as assumed by Presidential Decree No. 1670. Moreover, each
subdivision lot is surrounded by adobe walls constructed by the particular owner of the
property: the houses were required to have septic tanks by the City Hall and the, owners
themselves: there is a drainage system; and there are adequate water facilities.

As far as the Tambunting Estate is concerned, the petitioners maintain that aside from the
residential houses in the area, there are buildings and structures of strong materials on the
lots fronting Rizal Avenue Extension, most of which are leased to proprietors of business
establishments under long term contracts of lease which use the same for their furniture
business from which they secure substantial income.

The Government as represented by the Solicitor-General and the NHA, on the other hand,
contends that the power of eminent domain is inherent in the State and when the legislature
itself or the President through his law-making prerogatives exercises this power, the public
use and public necessity of the expropriation, and the fixing of the just compensation
become political in nature, and the courts must respect the decision of the law-making body,
unless the legislative decision is clearly and evidently arbitrary, unreasonable, and devoid of
logic and reason; and that all that is required is that just compensation be determined with
due process of law which does not necessarily entail judicial process.

The public respondents, further argue that since the Constitution lays down no procedure by
which the authority to expropriate may be carried into effect, Rule 67 of the Revised Rules of
Court which is invoked by the petitioners may be said to have been superseded by the
challenged decrees insofar as they are applicable to the properties in question and,
therefore, there is no need to follow the said rule for due process to be observed. Moreover,
the public respondents maintain that it cannot be fairly said that the petitioners' valuations
were ignored in fixing the ceiling amount of the properties in question because the only
reason why the determination appeared unilateral was because said petitioners did not
actually state any valuation in their sworn declaration of true market value of their respective
properties, and as far as payment in installments is concerned, the same can be justified by
the fact that the properties in question are only two of the four hundred and fifteen (415)
slums and blighted areas in Metro Manila and two of the two hundred and fifty one (251) sites
for ungrading under the ZIP and that to immediately acquire and upgrade all those sites
would obviously entail millions and millions of pesos. The financial constraints, therefore,
require a system of payment of just compensation. Thus, the respondent states that the
payment of just compensation in installments did not arise out of ill will or the desire to
discriminate.

We start with fundamentals.

The power of eminent domain is inherent in every state and the provisions in the Constitution
pertaining to such power only serve to limit its exercise in order to protect the individual
against whose property the power is sought to be enforced. We pointed out the constitutional
limitations in the case of Republic vs. Juan (92 SCRA 26, 40):

To begin with, it must be emphasized that plaintiff-appellee in this instant case

is the Republic of the Philippines which is exercising its right of eminent
domain inherent in it as a body sovereign. In the exercise of its sovereign right
the State is not subject to any limitation other than those imposed by the
Constitution which are: first, the taking must be for a public use; secondly, the
payment of just compensation must be made: and thirdly, due process must
be observed in the taking...

The challenged decrees are uniquely unfair in the procedures adopted and the powers given
to the respondent NHA.

The Tambunting subdivision is summarily proclaimed a blighted area and directly

expropriated by decree without the slightest semblance of a hearing or any proceeding
whatsoever. The expropriation is instant and automatic to take effect immediately upon the
signing of the decree. No deposit before taking is required under the decree. The
P3,400,000.00 appropriated from the general fund is not a deposit but constitutes an
installment payment for the property, the maximum price of which is fixed so as not to
exceed P17,000,000.00. There is no provision for any interests to be paid on the unpaid
installments spread out over a period of five years. Not only are the owners given absolutely
no opportunity to contest the expropriation, plead their side, or question the amount of
payments fixed by decree, but the decisions, rulings, orders, or resolutions of the NHA are
expressly declared as beyond the reach of judicial review. An appeal may be made to the
Office of the President but the courts are completely enjoined from any inquiry or
participation whatsoever in the expropriation of the subdivision or its incidents.
In some decisions promulgated before the February, 1986 political upheaval, this Court
presumed the validity of the beautiful "whereases" in presidential decrees governing
expropriations and legitimated takings of private property which, in normal times, would have
been constitutionally suspect. There were then the avowed twin purposes of martial law to
first quell the Communist rebellion and second to reform society. Thus, in Haguisan v.
Emilia (131 SCRA 517) the Court sustained the contention that prior hearing is no longer
necessary under P.D. No. 42 in ascertaining the value of the property to be expropriated and
before the government may take possession. There was a disregard in the decree for Section
2 of Rule 67 which requires the court having jurisdiction over the proceedings to promptly
ascertain and fix the provisional value of the property for purposes of the initial taking or
entry by the Government into the premises. In National Housing Authority v. Reyes (123
SCRA 245) the Court upheld the decrees which state that the basis for just compensation
shall be the market value declared by the owner for tax purposes or such market value as
determined by the government assessor, whichever is lower.

Subsequent developments have shown that a disregard for basic liberties and the shortcut
methods embodied in the decrees on expropriation do not achieve the desired results. Far
from disappearing, squatter colonies and blighted areas have multiplied and proliferated. It
appears that constitutionally suspect methods or authoritarian procedures cannot, be the
basis for social justice. A program to alleviate problems of the urban poor which is well
studied, adequately funded, genuinely sincere, and more solidly grounded on basic rights
and democratic procedures is needed.

We re-examine the decisions validating expropriations under martial law and apply
established principles of justice and fairness which have been with us since the advent of
constitutional government. We return to older and more sound precedents.

The due process clause cannot be rendered nugatory everytime a specific decree or law
orders the expropriation of somebody's property and provides its own peculiar manner of
taking the same. Neither should the courts adopt a hands-off policy just because the public
use has been ordained as existing by the decree or the just compensation has been fixed and
determined beforehand by a statute.

The case of Dohany v. Rogers, (74 L.ed. 904.'912, 281. U.S. 362-370) underscores the extent
by which the due process clause guarantees protection from arbitrary exercise of the power
of eminent domain.

The due process clause does not guarantee to the citizen of a state any
particular form or method of state procedure. Under it he may neither claim a
right to trial by jury nor a right of appeal. Its requirements are satisfied if he
has reasonable opportunity to be heard and to present his claim or defense,
due regard being had to the nature of the proceeding and the character of the
rights which may be affected by it. Reetz v. Michigan, 188 U.S. 505, 508, 47
L.ed. 563, 566, 23 Sup. Ct. Rep. 390; Missouri ex rel. Hurwitz v. North, 271 U.S.
40, 70 L.ed. 818, 46 Sup. Ct. Rep. 384: Bauman v. Ross, 167 U.S. 548, 593, 42
L.ed. 270, 289, 17 Sup. Ct. Rep. 966; A. Backus Jr. & Sons v. Fort Street Union
Depot Co. 169 U.S. 569, 42 L. ed. 859, 18 Sup. Ct. Rep. 445.

In other words, although due process does not always necessarily demand that a proceeding
be had before a court of law, it still mandates some form of proceeding wherein notice and
reasonable opportunity to be heard are given to the owner to protect his property rights. We
agree with the public respondents that there are exceptional situations when, in the exercise
of the power of eminent domain, the requirement of due process may not necessarily entail
judicial process. But where it is alleged that in the taking of a person's property, his right to
due process of law has been violated, the courts will have to step in and probe into such an
alleged violation.

Thus, certain portions of the decision in De Knecht v. Bautista, (100 SCRA 660, 666-667)
state:

There is no question as to the right of the Republic of the Philippines to take

private property for public use upon the payment of just compensation.
Section 2, Article IV of the Constitution of the Philippines provides: 'Private
property shall not be taken for public use without just compensation.

It is recognized, however, that the government may not capriciously or

arbitrarily choose what private property should be taken. In J.M. Tuazon & Co.,
Inc. v. Land tenure Administration, 31 SCRA 413, 433, the Supreme Court said:

xxx xxx xxx

It is obvious then that a land-owner is covered by the mantle of protection due

process affords. It is a mandate of reason. It frowns on arbitrariness, it is the
antithesis of any governmental act that smacks of whim or caprice. It negates
state power to act in an oppressive manner. It is, as had been stressed so
often, the embodiment of the sporting Idea of fair play. In that sense, it stands
as a guaranty of justice. 'That is the standard that must be met by any
governmental agency in the exercise of whatever competence is entrusted to it
As was so emphatically stressed by the present Chief Justice, 'Acts of
Congress, as well as those of the Executive, can deny due process only under
pain of nullity...

In the same case the Supreme Court concluded:

With due recognition then of the power of Congress to designate the particular
property to be taken and how much thereof may be condemned in the exercise
of the power of expropriation, it is still a judicial question whether in the
exercise of such competence, the party adversely affected is the victim of
partiality and prejudice, That the equal protection clause will not allow. (p. 436)

The basis for the exercise of the power of eminent domain is necessity. This Court stated
in City of Manila v. Chinese Community of Manila (40 Phil. 349) that "(t)he very foundation of
the right to exercise eminent domain is a genuine necessity and that necessity must be of a
public character.

In City of Manila v. Arellano Law Colleges (85 Phil. 663), we reiterated that a necessity must
exist for the taking of private property for the proposed uses and purposes but accepted the
fact that modern decisions do not call for absolute necessity. It is enough if the condemnor
can show a reasonable or practical necessity, which of course, varies with the time and
peculiar circumstances of each case.

In the instant petitions, there is no showing whatsoever as to why the properties involved
were singled out for expropriation through decrees or what necessity impelled the particular
choices or selections. In expropriations through legislation, there are, at least, debates in
Congress open to the public, scrutiny by individual members of the legislature, and very
often, public hearings before the statute is enacted. Congressional records can be examined.
In these petitions, the decrees show no reasons whatsoever for the choice of the properties
as housing projects. The anonymous adviser who drafted the decrees for the President's
signature cannot be questioned as to any possible error or partiality, act of vengeance, or
other personal motivations which may have led him to propose the direct expropriation with
its onerous provisions.

The Tambunting estate or at least the western half of the subdivision fronting Rizal Avenue
Extension is valuable commercial property. It is located at the junction where three main city
streets converge — Rizal Avenue from downtown Manila, Jose Abad Santos Street from
Binondo, and Aurora Boulevard leading to Retiro Street and other points in Quezon City. The
Libiran Furniture Company, alone, which fronts the entrance to Jose Abad Santos Street is
clearly a multi-million peso enterprise. It is a foregone conclusion that the favored squatters
allowed to buy these choice lots would lose no time, once it is possible to do so, to either
lease out or sell their lots to wealthy merchants even as they seek other places where they
can set up new squatter colonies. The public use and social justice ends stated in the
whereas clauses of P.D. 1669 and P.D. 1670 would not be served thereby.

The provision of P.D. 1669 which allows NHA, at its sole option, to put portions of the
expropriated area to commercial use in order to defray the development costs of its housing
projects cannot stand constitutional scrutiny. The Government, for instance, cannot
expropriate the flourishing Makati commercial area in order to earn money that would finance
housing projects all over the country. The leading case of Guido v. Rural Progress
Administration (84 Phil. 847) may have been modified in some ways by the provisions of the
new Constitution on agrarian and urban land reform and on housing. The principle of non-
appropriation of private property for private purposes, however, remains. The legislature,
according to the Guido case, may not take the property of one citizen and transfer it to
another, even for a full compensation, when the public interest is not thereby promoted. The
Government still has to prove that expropriation of commercial properties in order to lease
them out also for commercial purposes would be "public use" under the Constitution.

P.D. No. 1670 suffers from a similar infirmity. There is no showing how the President arrived
at the conclusion that the Sunog-Apog area is a blighted community. The many pictures
submitted as exhibits by the petitioners show a well-developed area subdivided into
residential lots with either middle-income or upper class homes. There are no squatters. The
provisions of the decree on the relocation of qualified squatter families and on the re-
blocking and re-alignment of existing structures to allow the introduction of basic facilities
and services have no basis in fact The area is well-developed with roads, drainage and sewer
facilities, water connection to the Metropolitan Waterworks and Sewerage System electric
connections to Manila Electric Company, and telephone connections to the Philippine Long
Distance Telephone Company. There are many squatter colonies in Metro Manila in need of
upgrading. The Government should have attended to them first. There is no showing for a
need to demolish the existing valuable improvements in order to upgrade Sunog-Apog.

After a careful examination of the questioned decrees, we find P.D. Nos. 1669 and 1670 to be
violative of the petitioners' right to due process of law and, therefore, they must fail the test
of constitutionality.

The decrees, do not by themselves, provide for any form of hearing or procedure by which
the petitioners can question the propriety of the expropriation of their properties or the
reasonableness of the just compensation. Having failed to provide for a hearing, the
Government should have filed an expropriation case under Rule 67 of the Revised Rules of
Court but it did not do so. Obviously, it did not deem it necessary because of the enactment
of the questioned decrees which rendered, by their very passage, any questions with regard
to the expropriation of the properties, moot and academic. In effect, the properties, under the
decrees were "automatically expropriated." This became more evident when the NHA wrote
the Register of Deeds and requested her to cancel the certificate of titles of the petitioners,
furnishing said Register of Deeds only with copies of the decrees to support its request.

This is hardly the due process of law which the state is expected to observe when it
exercises the power of eminent domain.

The government states that there is no arbitrary determination of the fair market value of the
property by the government assessors because if the owner is not satisfied with the
assessor's action, he may within sixty (60) days appeal to the Board of Assessment Appeals
of the province or city as the case may be and if said owner is still unsatisfied, he may appeal
further to the Central Board of Assessment Appeals pursuant to P.D. No. 464. The
Government argues that with this procedure, the due process requirement is fulfilled.

We cannot sustain this argument.

Presidential Decree No. 464, as amended, otherwise known as the Real Property Tax Code,
provides for the procedure on how to contest assessments but does not deal with questions
as to the propriety of the expropriation and the manner of payment of just compensation in
the exercise of the power of eminent domain. We find this wholly unsatisfactory. It cannot in
anyway substitute for the expropriation proceeding under Rule 67 of the Revised Rules of
Court.

Another infirmity from which the questioned decrees suffer is the determination of just
compensation.

Pursuant to P.D. 1533, the basis of the just compensation is the market value of the property
"prior to the recommendation or decision of the appropriate Government Office to acquire
the property." (see also Republic v. Santos, (1 41 SCRA 30, 35).

In these petitions, a maximum amount of compensation was imposed by the decrees and
these amounts were only a little more than the assessed value of the properties in 1978
when, according to the government, it decided to acquire said properties.

The fixing of the maximum amounts of compensation and the bases thereof which are the
assessed values of the properties in 1978 deprive the petitioner of the opportunity to prove a
higher value because, the actual or symbolic taking of such properties occurred only in 1980
when the questioned decrees were promulgated.

According to the government, the cut-off year must be 1978 because it was in this year that
the government decided to acquire the properties and in the case of the Tambunting Estate,
the President even made a public announcement that the government shall acquire the estate
for the fire victims.

The decision of the government to acquire a property through eminent domain should be
made known to the property owner through a formal notice wherein a hearing or a judicial
proceeding is contemplated as provided for in Rule 67 of the Rules of Court. This shall be the
time of reckoning the value of the property for the purpose of just compensation. A television
or news announcement or the mere fact of the property's inclusion in the Zonal Improvement
Program (ZIP) cannot suffice because for the compensation to be just, it must approximate
the value of the property at the time of its taking and the government can be said to have
decided to acquire or take the property only after it has, at the least, commenced a
proceeding, judicial or otherwise, for this purpose.

In the following cases, we have upheld the determination of just compensation and the
rationale behind it either at the time of the actual taking of the government or at the time of
the judgment by the court, whichever came first.

Municipality of Daet v. Court of Appeals, (93 SCRA 503, 506, 519):

...And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31
SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated the
'wen-settled (rule) that just compensation means the equivalent for the value of
the property at the time of its taking. Anything beyond that is more and
anything short of that is less, than just compensation. It means a fair and full
equivalent for the loss sustained, which is the measure of the indemnity, not
whatever gain would accrue to the expropriating entity.

xxx xxx xxx

We hold that the decision of the Court of Appeals fixing the market value of the
property to be that obtaining, at least, as of the date of the rendition of the
judgment on December 2, 1969 as prayed by private respondent, which the
Court fixed at P200.00 per square meter is in conformity with doctrinal rulings
hereinabove cited that the value should be fixed as of the time of the taking of
the possession of the property because firstly, at the time judgment was
rendered on December 2, 1969, petitioner had not actually taken possession of
the property sought to be expropriated and secondly, We find the valuation
determined by the Court of Appeals to be just, fair and reasonable.

National Power Corporation v. Court of Appeals, (1 29 SCRA 665, 673):

xxx xxx xxx

(5) And most importantly,on the issue of just compensation, it is now settled
doctrine, following the leading case of Alfonso v. Pasay City, (1,06 PhiL 1017
(1960)), that no determine due compensation for lands appropriated by the
Government, the basis should be the price or value at the time it was taken
from the owner and appropriated by the Government.

The owner of property expropriated by the State is entitled to how much it was
worth at the time of the taking. This has been clarified in Republic v. PNB (1
SCRA 957) thus: 'It is apparent from the foregoing that, when plaintiff takes
possession before the institution of the condemnation proceedings, the value
should be fixed as of the time of the taking of said possession, not of filing of
the complainant, and that the latter should be the basis for the determination
of the value, when the of the property involved coincides with or is subsequent
to, the commencement of the proceedings. Indeed, otherwise, the provision of
 Rule 619, section 3, directing that compensation "be determined as of the date
of the filing of the complaints" would never be operative. municipality of La
Carlota v. The Spouses Baltazar, et al., 45 SCRA 235 (1972)).

Furthermore, the so-called "conditions" of the properties should not be determined through a
decree but must be shown in an appropriate proceeding in order to arrive at a just valuation
of the property. In the case of Garcia v. Court of Appeals, (102 SCRA 597, 608) we ruled:

...Hence, in estimating the market value, all the capabilities of the property and
all the uses to which it may be applied or for which it is adapted are to be
considered and not merely the condition it is in at the time and the use to
which it is then applied by the owner. All the facts as to the condition of the
property and its surroundings, its improvements and capabilities may be
shown and considered in estimating its value.

In P.D. No. 76, P.D. No. 464, P.D. No. 794, and P.D. No. 1533, the basis for determining just
compensation was fixed at the market value declared by the owner or the market value
determined by the assessor, whichever is lower.

P.D.s 1669 and 1670 go further. There is no mention of any market value declared by the
owner. Sections 6 of the two decrees peg just compensation at the market value determined
by the City Assessor. The City Assessor is warned by the decrees to "consider existing
conditions in the area notably, that no improvement has been undertaken on the land and
that the land is squatted upon by resident families which should considerably depress the
expropriation costs."

In other cases involving expropriations under P.D. Nos. 76, 464, 794, and 1533, this Court has
decided to invalidate the mode of fixing just compensation under said decrees. (See Export
Processing Zone Authority v. Hon. Ceferino E. Dulay, et al. G.R. No. 59603) With more reason
should the method in P.D.s 1669 and 1670 be declared infirm.

The market value stated by the city assessor alone cannot substitute for the court's judgment
in expropriation proceedings. It is violative of the due process and the eminent domain
provisions of the Constitution to deny to a property owner the opportunity to prove that the
valuation made by a local assessor is wrong or prejudiced. The statements made in tax
documents by the assessor may serve as one of the factors to be considered but they cannot
exclude or prevail over a court determination made after expert commissioners have
examined the property and all pertinent circumstances are taken into account and after the
parties have had the opportunity to fully plead their cases before a competent and unbiased
tribunal. To enjoin this Court by decree from looking into alleged violations of the due
process, equal protection, and eminent domain clauses of the Constitution is impermissible
encroachment on its independence and prerogatives.

The maximum amounts, therefore, which were provided for in the questioned decrees cannot
adequately reflect the value of the property and, in any case, should not be binding on the
property owners for, as stated in the above cases, there are other factors to be taken into
consideration. We, thus, find the questioned decrees to likewise transgress the petitioners'
right to just compensation. Having violated the due process and just compensation
guarantees, P. D. Nos. 1669 and 1670 are unconstitutional and void.

WHEREFORE, the petitions in G.R. No. 55166 and G.R. No. 55167 are hereby GRANTED.
Presidential Decree Numbers 1669 and 1670 which respectively proclaimed the Tambunting
Estate and the Estero de Sunog-Apog area expropriated, are declared unconstitutional and,
therefore, null and void ab initio.

SO ORDERED.

LOURDES DE LA PAZ MASIKIP, G.R. No. 136349

Petitioner,  

   

  Present:

   

- versus -  

  PUNO, J., Chairman,

  SANDOVAL-GUTIERREZ,

  CORONA,

THE CITY OF PASIG, HON. AZCUNA, and

MARIETTA A. LEGASPI, in her
GARCIA, JJ.
capacity as Presiding Judge of
the Regional Trial Court of Pasig  
City, Branch 165 and THE COURT
 
OF APPEALS,
Promulgated:
Respondents.
 
 
 

January 23, 2006

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

 
 
DECISION
 

SANDOVAL GUTIERREZ, J.:

 
Where the taking by the State of private property is done for the benefit of a small
community which seeks to have its own sports and recreational facility,
notwithstanding that there is such a recreational facility only a short distance away,
such taking cannot be considered to be for public use. Its expropriation is not valid.
In this case, the Court defines what constitutes a genuine necessity for public use.

This petition for review on certiorari assails the Decision[1] of the Court of Appeals
dated October 31, 1997 in CA-G.R. SP No. 41860 affirming the Order[2] of the
Regional Trial Court, Branch 165, Pasig City, dated May 7, 1996 in S.C.A. No. 873.
Likewise assailed is the Resolution[3] of the same court dated November 20, 1998
denying petitioner's Motion for Reconsideration.

The facts of the case are:

Petitioner Lourdes Dela Paz Masikip is the registered owner of a parcel of land with
an area of 4,521 square meters located at Pag-Asa, Caniogan, Pasig City, Metro
Manila.

In a letter dated January 6, 1994, the then Municipality of Pasig, now City of Pasig,
respondent, notified petitioner of its intention to expropriate a 1,500 square meter
portion of her property to be used for the 'sports development and recreational
activities' of the residents of Barangay Caniogan. This was pursuant to Ordinance
No. 42, Series of 1993 enacted by the then Sangguniang Bayan of Pasig.

Again, on March 23, 1994, respondent wrote another letter to petitioner, but this
time the purpose was allegedly 'in line with the program of the Municipal
Government to provide land opportunities to deserving poor sectors of our
community.

On May 2, 1994, petitioner sent a reply to respondent stating that the intended
expropriation of her property is unconstitutional, invalid, and oppressive, as the
area of her lot is neither sufficient nor suitable to 'provide land opportunities to
deserving poor sectors of our community.

 
In its letter of December 20, 1994, respondent reiterated that the purpose of the
expropriation of petitioner's property is 'to provide sports and recreational facilities
to its poor residents.

Subsequently, on February 21, 1995, respondent filed with the trial court a
complaint for expropriation, docketed as SCA No. 873. Respondent prayed that the
trial court, after due notice and hearing, issue an order for the condemnation of the
property; that commissioners be appointed for the purpose of determining the just
compensation; and that judgment be rendered based on the report of the
commissioners.

On April 25, 1995, petitioner filed a Motion to Dismiss the complaint on the
following grounds:

I
PLAINTIFF HAS NO CAUSE OF ACTION FOR THE EXERCISE OF
THE POWER OF EMINENT DOMAIN, CONSIDERING THAT:

(A) THERE IS NO GENUINE NECESSITY FOR THE

TAKING OF THE PROPERTY SOUGHT TO BE
EXPROPRIATED.

(B) PLAINTIFF HAS ARBITRARILY AND

CAPRICIOUSLY CHOSEN THE PROPERTY SOUGHT
TO BE EXPROPRIATED.

(C) EVEN ASSUMING ARGUENDO THAT

DEFENDANT'S PROPERTY MAY BE EXPROPRIATED
BY PLAINTIFF, THE FAIR MARKET VALUE OF THE
PROPERTY TO BE EXPROPRIATED FAR EXCEEDS
SEVENTY-EIGHT THOUSAND PESOS (P78,000.00)

 
 II

PLAINTIFF'S COMPLAINT IS DEFECTIVE IN FORM AND

SUBSTANCE, CONSIDERING THAT:

(A) PLAINTIFF FAILS TO ALLEGE WITH CERTAINTY

THE PURPOSE OF THE EXPROPRIATION.

(B) PLAINTIFF HAS FAILED TO COMPLY WITH THE

PREREQUISITES LAID DOWN IN SECTION 34, RULE
VI OF THE RULES AND REGULATIONS
IMPLEMENTING THE LOCAL GOVERNMENT CODE;
THUS, THE INSTANT EXPROPRIATION
PROCEEDING IS PREMATURE.

III

THE GRANTING OF THE EXPROPRIATION WOULD VIOLATE

SECTION 261 (V) OF THE OMNIBUS ELECTION CODE.

IV

PLAINTIFF CANNOT TAKE POSSESSION OF THE SUBJECT

PROPERTY BY MERELY DEPOSITING AN AMOUNT EQUAL TO
FIFTEEN PERCENT (15%) OF THE VALUE OF THE PROPERTY
BASED ON THE CURRENT TAX DECLARATION OF THE SUBJECT
PROPERTY.[4]

On May 7, 1996, the trial court issued an Order denying the Motion to Dismiss,
[5] on the ground that there is a genuine necessity to expropriate the
property for the sports and recreational activities of the residents of Pasig.
As to the issue of just compensation, the trial court held that the same is to be
determined in accordance with the Revised Rules of Court.
 

Petitioner filed a motion for reconsideration but it was denied by the trial court in its
Order of July 31, 1996. Forthwith, it appointed the City Assessor and City Treasurer
of Pasig City as commissioners to ascertain the just compensation. This prompted
petitioner to file with the Court of Appeals a special civil action for certiorari,
docketed as CA-G.R. SP No. 41860. On October 31, 1997, the Appellate Court
dismissed the petition for lack of merit. Petitioner's Motion for Reconsideration was
denied in a Resolution dated November 20, 1998.

Hence, this petition anchored on the following grounds:

 
THE QUESTIONED DECISION DATED 31 OCTOBER 1997
(ATTACHMENT 'A') AND RESOLUTION DATED 20 NOVEMBER
1998 (ATTACHMENT 'B') ARE CONTRARY TO LAW, THE RULES
OF COURT AND JURISPRUDENCE CONSIDERING THAT:

A. THERE IS' NO EVIDENCE TO PROVE THAT THERE

IS GENUINE NECESSITY FOR THE TAKING
OF THE PETITIONER'S PROPERTY.

B. THERE IS' NO EVIDENCE TO PROVE THAT THE

PUBLIC USE REQUIREMENT FOR THE
EXERCISE OF THE POWER OF EMINENT
DOMAIN HAS BEEN COMPLIED WITH.

C. THERE IS' NO EVIDENCE TO PROVE THAT

RESPONDENT CITY OF PASIG HAS
COMPLIED WITH ALL CONDITIONS
PRECEDENT FOR THE EXERCISE OF THE
POWER OF EMINENT DOMAIN.

THE COURT A QUOS ORDER DATED 07 MAY 1996 AND 31 JULY

1996, WHICH WERE AFFIRMED BY THE COURT OF APPEALS,
 EFFECTIVELY AMOUNT TO THE TAKING OF PETITIONER'S
PROPERTY WITHOUT DUE PROCESS OF LAW:

II

THE COURT OF APPEALS GRAVELY ERRED IN

APPLYING OF RULE ON ACTIONABLE DOCUMENTS
TO THE DOCUMENTS ATTACHED TO RESPONDENT
CITY OF PASIG'S COMPLAINT DATED 07 APRIL
1995 TO JUSTIFY THE COURT A QUO'S DENIAL OF
PETITIONER'S RESPONSIVE PLEADING TO THE
COMPLAINT FOR EXPROPRIATION (THE MOTION
TO DISMISS DATED 21 APRIL 1995).

III

THE COURT OF APPEALS GRAVELY ERRED IN

APPLYING THE RULE ON HYPOTHETICAL
ADMISSION OF FACTS ALLEGED IN A COMPLAINT
CONSIDERING THAT THE MOTION TO
DISMISS  FILED BY PETITIONER IN THE
EXPROPRIATION CASE BELOW WAS THE
RESPONSIVE PLEADING REQUIRED TO BE FILED
UNDER THE THEN RULE 67 OF THE RULES OF
COURT AND NOT AN ORIDNARY MOTION TO
DISMISS UNDER RULE 16 OF THE RULES OF
COURT.

The foregoing arguments may be synthesized into two main issues ' one
substantive and one procedural. We will first address the procedural issue.

Petitioner filed her Motion to Dismiss the complaint for expropriation on April 25,
1995. It was denied by the trial court on May 7, 1996. At that time, the rule on
expropriation was governed by Section 3, Rule 67 of the Revised Rules of Court
which provides:

 
'SEC. 3. Defenses and objections. Within the time specified in the
summons, each defendant, in lieu of an answer, shall present in a
single motion to dismiss or for other appropriate relief, all his
objections and defenses to the right of the plaintiff to take his property
for the use or purpose specified in the complaint. All such objections
and defenses not so presented are waived. A copy of the motion shall
be served on the plaintiff's attorney of record and filed with the court
with proof of service.

The motion to dismiss contemplated in the above Rule clearly constitutes the
responsive pleading which takes the place of an answer to the complaint for
expropriation. Such motion is the pleading that puts in issue the right of the
plaintiff to expropriate the defendant's property for the use specified in the
complaint. All that the law requires is that a copy of the said motion be served on
plaintiff's attorney of record. It is the court that at its convenience will set the case
for trial after the filing of the said pleading.[6]

The Court of Appeals therefore erred in holding that the motion to dismiss filed by
petitioner hypothetically admitted the truth of the facts alleged in the complaint,
specifically that there is a genuine necessity to expropriate petitioner's property for
public use. Pursuant to the above Rule, the motion is a responsive pleading joining
the issues. What the trial court should have done was to set the case for the
reception of evidence to determine whether there is indeed a genuine necessity for
the taking of the property, instead of summarily making a finding that the taking is
for public use and appointing commissioners to fix just compensation. This is
especially so considering that the purpose of the expropriation was squarely
challenged and put in issue by petitioner in her motion to dismiss.

Significantly, the above Rule allowing a defendant in an expropriation case to file a

motion to dismiss in lieu of an answer was amended by the 1997 Rules of Civil
Procedure, which took effect on July 1, 1997. Section 3, Rule 67 now expressly
mandates that any objection or defense to the taking of the property of a defendant
must be set forth in an answer.

 
The fact that the Court of Appeals rendered its Decision in CA-G.R. SP No. 41860 on
October 31, after the 1997 Rules of Civil Procedure took effect, is of no moment. It
is only fair that the Rule at the time petitioner filed her motion to dismiss should
govern. The new provision cannot be applied retroactively to her prejudice.

We now proceed to address the substantive issue.

In the early case of US v. Toribio,[7] this Court defined the power of eminent
domain as 'the right of a government to take and appropriate private property to
public use, whenever the public exigency requires it, which can be done only on
condition of providing a reasonable compensation therefor. It has also been
described as the power of the State or its instrumentalities to take private property
for public use and is inseparable from sovereignty and inherent in government.[8]

The power of eminent domain is lodged in the legislative branch of the government.
It delegates the exercise thereof to local government units, other public entities and
public utility corporations,[9] subject only to Constitutional limitations. Local
governments have no inherent power of eminent domain and may exercise it only
when expressly authorized by statute.[10] Section 19 of the Local Government
Code of 1991 (Republic Act No. 7160) prescribes the delegation by Congress of the
power of eminent domain to local government units and lays down the parameters
for its exercise, thus:

 
SEC. 19. Eminent Domain. ' A local government unit may, through its
chief executive and acting pursuant to an ordinance, exercise the
power of eminent domain for public use, purpose or welfare for the
benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and
pertinent laws: Provided, however, That, the power of eminent domain
may not be exercised unless a valid and definite offer has been
previously made to the owner and such offer was not
accepted: Provided, further, That, the local government unit may
immediately take possession of the property upon the filing of
expropriation proceedings and upon making a deposit with the proper
court of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property to be
expropriated: Provided, finally, That, the amount to be paid for
expropriated property shall be determined by the proper court, based
on the fair market value at the time of the taking of the property.
 

Judicial review of the exercise of eminent domain is limited to the following areas of
concern: (a) the adequacy of the compensation, (b) the necessity of the taking, and
(c) the public use character of the purpose of the taking.[11]

In this case, petitioner contends that respondent City of Pasig failed to establish a
genuine necessity which justifies the condemnation of her property. While she does
not dispute the intended public purpose, nonetheless, she insists that there must be
a genuine necessity for the proposed use and purposes. According to petitioner,
there is already an established sports development and recreational activity center
at Rainforest Park in Pasig City, fully operational and being utilized by its residents,
including those from Barangay Caniogan. Respondent does not dispute this.
Evidently, there is no 'genuine necessity to justify the expropriation.

The right to take private property for public purposes necessarily originates from
'the necessity and the taking must be limited to such necessity. In City of Manila v.
Chinese Community of Manila,[12] we held that the very foundation of the right
to exercise eminent domain is a genuine necessity and that necessity must
be of a public character. Moreover, the ascertainment of the necessity must
precede or accompany and not follow, the taking of the land. In City of Manila v.
Arellano Law College,[13] we ruled that 'necessity within the rule that the particular
property to be expropriated must be necessary, does not mean an absolute but
only a reasonable or practical necessity, such as would combine the greatest benefit
to the public with the least inconvenience and expense to the condemning party
and the property owner consistent with such benefit.

Applying this standard, we hold that respondent City of Pasig has failed to establish
that there is a genuine necessity to expropriate petitioner's property. Our scrutiny
of the records shows that the Certification[14] issued by the Caniogan Barangay
Council dated November 20, 1994, the basis for the passage of Ordinance No. 42 s.
1993 authorizing the expropriation, indicates that the intended beneficiary is the
Melendres Compound Homeowners Association, a private, non-profit organization,
not the residents of Caniogan. It can be gleaned that the members of the said
Association are desirous of having their own private playground and recreational
facility. Petitioner's lot is the nearest vacant space available. The purpose is,
therefore, not clearly and categorically public. The necessity has not been shown,
especially considering that there exists an alternative facility for sports
development and community recreation in the area, which is the Rainforest Park,
available to all residents of Pasig City, including those of Caniogan.
 

The right to own and possess property is one of the most cherished rights of men.
It is so fundamental that it has been written into organic law of every nation where
the rule of law prevails. Unless the requisite of genuine necessity for the
expropriation of one's property is clearly established, it shall be the duty of the
courts to protect the rights of individuals to their private property. Important as the
power of eminent domain may be, the inviolable sanctity which the Constitution
attaches to the property of the individual requires not only that the purpose for the
taking of private property be specified. The genuine necessity for the taking, which
must be of a public character, must also be shown to exist.

WHEREFORE, the petition for review is GRANTED. The challenged Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 41860 are REVERSED. The
complaint for expropriation filed before the trial court by respondent City of Pasig,
docketed as SCA No. 873, is ordered DISMISSED.