THE COLLECTOR OF INTERNAL REVENUE vs. ANTONIO CAMPOS RUEDA, G.R. No.

L-13250
October 29, 1971

Facts:

Petitioner Antonio Campos Rueda as administrator of the estate of the deceased Doña Maria de la
Estrella Soriano Vda. de Cerdeira, from the decision of the respondent Collector of Internal
Revenue, assessing against and demanding from the former the sum P161,874.95 as deficiency
estate and inheritance taxes, including interest and penalties, on the transfer of intangible personal
properties situated in the Philippines and belonging to said Maria de la Estrella Soriano Vda. de
Cerdeira. Maria de la Estrella Soriano Vda. de Cerdeira (Maria Cerdeira for short) is a Spanish
national, by reason of her marriage to a Spanish citizen and was a resident of Tangier, Morocco
from 1931 up to her death on January 2, 1955. At the time of her demise she left, among others,
intangible personal properties in the Philippines. Court of Tax Appeals to alleged law of Tangier did
grant the reciprocal tax exemption required by the aforesaid Section 122.

Issue:

Whether or not the requisites of statehood, or at least so much thereof as may be necessary for the
acquisition of an international personality, must be satisfied for a "foreign country" to fall within the
exemption of Section 122 of the National Internal Revenue Code is now ripe for adjudication?
1

Ruling:

No, Section 122 of the National Internal Revenue Code. It reads thus: "That no tax shall be collected
under this Title in respect of intangible personal property (a) if the decedent at the time of his death
was a resident of a foreign country which at the time of his death did not impose a transfer tax or
death tax of any character in respect of intangible person property of the Philippines not residing in
that foreign country, or (b) if the laws of the foreign country of which the decedent was a resident at
the time of his death allow a similar exemption from transfer taxes or death taxes of every character
in respect of intangible personal property owned by citizens of the Philippines not residing in that
foreign country." The only obstacle therefore to a definitive ruling is whether or not as vigorously
insisted upon by petitioner the acquisition of internal personality is a condition sine qua non to
Tangier being considered a "foreign country".

It does not admit of doubt that if a foreign country is to be identified with a state, it is required in line
with Pound's formulation that it be a politically organized sovereign community independent of
outside control bound by penalties of nationhood, legally supreme within its territory, acting through
a government functioning under a regime of law.  It is thus a sovereign person with the people
composing it viewed as an organized corporate society under a government with the legal
competence to exact obedience to its commands. It has been referred to as a body-politic
10

organized by common consent for mutual defense and mutual safety and to promote the general
welfare. Correctly has it been described by Esmein as "the juridical personification of the nation." 
This is to view it in the light of its historical development. The stress is on its being a nation, its
people occupying a definite territory, politically organized, exercising by means of its government its
sovereign will over the individuals within it and maintaining its separate international personality.
Laski could speak of it then as a territorial society divided into government and subjects, claiming
within its allotted area a supremacy over all other institutions.  McIver similarly would point to the
power entrusted to its government to maintain within its territory the conditions of a legal order and to
enter into international relations.  With the latter requisite satisfied, international law do not exact
independence as a condition of statehood.
 

PABLITO V. SANIDAD, Petitioner, v. HONORABLE COMMISSION ON ELECTIONS

and HONORABLE NATIONAL TREASURER, Respondents. [G.R. No. L-44640.
October 12, 1976.]
 
Facts:
President Ferdinand E. Marcos issued Presidential Decree No. 991 calling for a national
referendum on October 16, 1976 for the Citizens Assemblies ("barangays") to resolve,
among other things, the issues of martial law, the interim assembly, its replacement,
the powers of such replacement, the period of its existence, the length of the period for
the exercise by the President of his present powers.
 
Presidential Decree No. 229 providing for the manner of voting and canvass of votes in
"barangays" (Citizens Assemblies) applicable to the national referendum-plebiscite.
 
The questions ask, to wit: jgc:chanrobles.com.ph

 
"(1) Do your want martial law to be continued?
 
(2) Whether or not you want martial law to be continued, do you approve the following
amendments to the Constitution? For the purpose of the second question, the
referendum shall have the effect of a plebiscite within the contemplation of Section 2 of
Article XVI of the Constitution.
 
Issue:
Whether the incumbent President of the Philippines to propose amendments to the
present Constitution in the absence of the interim National Assembly which has not
been convened?
Ruling:

Yes, Concentration of Powers in the President during crisis government -  the

Philippines is a crisis government today — are more or less concentrated in the
President. According to Rossiter," (t)he concentration of government power in a
democracy faced by an emergency is a corrective to the crisis inefficiencies inherent in
the doctrine of the separation of powers. In most free states it has generally been
regarded as Imperative that the total power of the government be parceled out among
three mutually independent branches — executive, legislature, and judiciary. The
presidential exercise of legislative powers in times of martial law is now a conceded
valid act.

The People as Sovereign.In the Philippines, a republican and unitary state,

sovereignty "resides in the people and all government authority emanates from them.
In its fourth meaning, Savigny would treat "people" as "that particular organized
assembly of individuals in which, according to the Constitution, the highest power
exists." This is the concept of popular sovereignty. It means that the constitutional
legislator, namely, the people, is sovereign. In consequence, the people may thus write
into the Constitution their convictions on any subject they choose in the absence of
express constitutional prohibition. This is because, as Holmes said, the Constitution "is
an experiment, as all life is an experiment." "The necessities of orderly government,"
wrote Rottschaefer, "do not require that one generation should be permitted to
permanently fetter all future generations." A constitution is based, therefore, upon a
self-limiting decision of the people when they adopt it.

Referendum-Plebiscite not rendered nugatory by the participation of the 15-

year olds. The fear of commingled votes (15-year olds and 18-year olds above) is
readily dispelled by the provision of two ballot boxes for every barangay center, one
containing the ballots of voters fifteen years of age and under eighteen, and another
containing the ballots of voters eighteen years of age and above. The ballots in the
ballot box for voters fifteen years of age and under eighteen shall be counted ahead of
the ballots of voters eighteen years and above contained in another ballot box. And, the
results of the referendum-plebiscite shall be separately prepared for the age groupings,
i.e., ballots contained in each of the two boxes.  It is apt to distinguish here between a
"referendum" and a "plebiscite." A "referendum" is merely consultative in character. It
is simply a means of assessing public reaction to the given issues submitted to the
people for their consideration, the calling of which is derived from or within the totality
of the executive power of the President. 39 It is participated in by all citizens from the
age of fifteen, regardless of whether or not they are illiterates, feeble-minded, or ex-
convicts. A "plebiscite," on the other hand, involves the constituent act of those
"citizens of the Philippines not otherwise disqualified by law, who are eighteen years of
age or over, and who shall have resided in the Philippines for at least one year and in
the place wherein they propose to vote for at least six months preceding the election."
Literacy, property, or any other substantive requirement is not imposed. It is generally
associated with the amending process of the Constitution, more particularly, the
ratification aspect.

THE UNITED STATES, Complainant-Appellee, v. FRED L. DORR, ET AL.,

Defendants-Appellants, G.R. No. 1049. May 16, 1903

Facts:

A complaint was filed in the Court of First Instance of the city of Manila against Fred L.
Dorr and Edward F. O’Brien, charging them with the publication of a false and malicious
libel against Señor Benito Legarda, one of the United States Philippine Commissioners,
by placing certain headlines or caption above an article published in the "Manila
Freedom," a newspaper in the city of Manila, of which the defendant Fred L. Dorr was
the proprietor and the defendant Edward F. O’Brien was the editor.

The following are the headlines or caption upon which the prosecution is based: jgc:chanrobles.com.ph
"Traitor, seducer and perjurer. Sensational allegations against Commissioner Legarda.
Made of record and read in English. Spanish reading waived. Wife would have killed
him. Legarda pale and nervous."

The defendants were tried and found guilty of the offense charged in the complaint by
the trial court.  During the course of the proceedings a motion was made by the
defendants asking that they be granted a trial by jury, as provided for in Article III,
section 2, of the Constitution of the United States, and under the sixth amendment to
the Constitution, which motion was denied by the court.  The questions submitted were
that by the treaty of peace between the United States and Spain, ratified on the 11th
day of April, 1899, the Philippine Islands became a part of the United States and And
being a part thereof, they are subject to the provisions of section 2, Article III, of the
Constitution, and to the provisions contained in the sixth amendment to the
Constitution, by which in all criminal cases a trial by jury is guaranteed.

Issue:

Whether the provisions of the Constitution of the United States relating to jury trials are
in force in the Philippine Islands?

Ruling:

No, the following conclusions are deducible from the decision in that case: chanrob1es virtual 1aw library

1aw library

1. That while the Philippine Islands constitute territory which has been acquired by and
belongs to the United States, there is a difference between such territory and the
territories which are a part of the United States with reference to the Constitution of the
United States.

2. That the Constitution was not extended here by the terms of the treaty of Paris,
under which the Philippine Islands were acquired from Spain. By the treaty the status of
the ceded territory was to be determined by Congress.

3. That the mere act of cession of the Philippines to the United States did not extend
the Constitution here, except such parts as fall within the general principles of
fundamental limitations in favor of personal rights formulated in the Constitution and its
amendments, and which exist rather by inference and the general spirit of the
Constitution, and except those express provisions of the Constitution which prohibit
Congress from passing laws in their contravention under any circumstances; that the
provisions contained in the Constitution relating to jury trials do not fall within either of
these exceptions, and, consequently, the right to trial by jury has not been extended
here by the mere act of the cession of the territory.

4. That Congress has passed no law extending here the provision of the Constitution
relating to jury trials, nor were any laws in existence in the Philippine Islands, at the
date of their cession, for trials by jury, and consequently there is no law in the
Philippine Islands entitling the defendants in this case to such trial; that the Court of
First Instance committed no error in overruling their application for a trial by jury.

We also reach the conclusion that the Philippine Commission is a body expressly
recognized and sanctioned by act of Congress, having the power to pass laws, and has
the power to pass the libel law under which the defendants were convicted.

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, represented by the

Treasurer of the Philippine Islands,  vs. EL MONTE DE PIEDAD Y CAJA DE
AHORRAS DE MANILA, G.R. No. L-9959 December 13, 1916
Facts:
About $400,000, were subscribed and paid into the treasury of the Philippine Islands by
the inhabitants of the Spanish Dominions of the relief of those damaged by the
earthquake which took place in the Philippine Islands on June 3, 1863. Allegedly they
are still in the possession of the Monte de Piedad. On account of various petitions of the
persons, and heirs of others to whom the above-mentioned allotments were made by
the central relief board for the payment of those amounts, the Philippine Islands to
bring suit against the Monte de Piedad a recover, "through the Attorney-General and in
representation of the Government of the Philippine Islands," the $80.000, together with
interest, for the benefit of those persons or their heirs appearing in the list of names
published in the Official Gazette.
Issue:
 
Whether the obligation on the part of the Monte de Piedad to return the $80,000 to the
Government, even considering it a loan, was wiped out on the change of sovereignty,
or inn other words, the present Philippine Government cannot maintain this action for
that reason?
Ruling:
No, while the obligation to return the $80,000 to the Spanish Government was still
pending, war between the United States and Spain ensued. Under the Treaty of Paris of
December 10, 1898, the Archipelago, known as the Philippine Islands, was ceded to the
United States, the latter agreeing to pay Spain the sum of $20,000,000. Under the first
paragraph of the eighth article, Spain relinquished to the United States "all buildings,
wharves, barracks, forts, structures, public highways, and other immovable property
which, in conformity with law, belonged to the public domain, and as such belonged to
the crown of Spain." As the $80,000 were not included therein, it is said that the right
to recover this amount did not, therefore, pass to the present sovereign.
That there is a total abrogation of the former political relations of the inhabitants of the
ceded region is obvious. That all laws theretofore in force which are in conflict with the
political character, constitution, or institutions of the substituted sovereign, lose their
force, is also plain. (Alvarez y Sanchez vs. United States, 216 U. S., 167.) But it is
equally settled in the same public law that the great body of municipal law which
regulates private and domestic rights continues in force until abrogated or changed by
the new ruler.
If the above-mentioned legal provisions are in conflict with the political character,
constitution or institutions of the new sovereign, they became inoperative or lost their
force upon the cession of the Philippine Islands to the United States, but if they are
among "that great body of municipal law which regulates private and domestic rights,"
they continued in force and are still in force unless they have been repealed by the
present Government. That they fall within the latter class is clear from their very nature
and character. They are laws which are not political in any sense of the word. They
conferred upon the Spanish Government the right and duty to supervise, regulate, and
to some extent control charities and charitable institutions. The present sovereign, in
exempting "provident institutions, savings banks, etc.," all of which are in the nature of
charitable institutions, from taxation, placed such institutions, in so far as the
investment in securities are concerned, under the general supervision of the Insular
Treasurer (paragraph 4 of section 111 of Act No. 1189; see also Act No. 701).
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chanroblesvirtualawlibrary chanrobles

The impracticability of pursuing a different course, however, is not the true ground
upon which the right of the Government to maintain the action rests. The true ground is
that the money being given to a charity became, in a measure, public property, only
applicable, it is true, to the specific purposes to which it was intended to be devoted,
but within those limits consecrated to the public use, and became part of the public
resources for promoting the happiness and welfare of the Philippine Government.
(Mormon Church vs. U. S., supra.) To deny the Government's right to maintain this
action would be contrary to sound public policy, as tending to discourage the prompt
exercise of similar acts of humanity and Christian benevolence in like instances in the
future. chanroblesvirtualawlibrary chanrobles virtual law library

MELCHORA CABANAS,  vs. FRANCISCO PILAPIL, G.R. No. L-25843 July 25,
1974
Facts:
The insured, Florentino Pilapil had a child, Millian Pilapil, with a married woman, the
plaintiff, Melchora Cabanas. She was ten years old at the time the complaint was filed
on October 10, 1964. The defendant, Francisco Pilapil, is the brother of the deceased.
The deceased insured himself and instituted as beneficiary, his child, with his brother to
act as trustee during her minority. Upon his death, the proceeds were paid to him.
Hence this complaint by the mother, with whom the child is living, seeking the delivery
of such sum. She filed the bond required by the Civil Code. Defendant would justify his
claim to the retention of the amount in question by invoking the terms of the insurance
policy.
Issue:
Whether the mother or the uncle of a minor beneficiary of the proceeds of an insurance
policy issued on the life of her deceased father?
Ruling:
 
The mother. It is buttressed by its adherence to the concept that the judiciary, as an
agency of the State acting as parens patriae, is called upon whenever a pending suit of
litigation affects one who is a minor to accord priority to his best interest. It may
happen, as it did occur here, that family relations may press their respective claims. It
would be more in consonance not only with the natural order of things but the tradition
of the country for a parent to be preferred. it could have been different if the conflict
were between father and mother. Such is not the case at all. It is a mother asserting
priority. Certainly the judiciary as the instrumentality of the State in its role of parens
patriae, cannot remain insensible to the validity of her plea. In a recent case, there is
this quotation from an opinion of the United States Supreme Court: "This prerogative of
parens patriae is inherent in the supreme power of every State, whether that power is
lodged in a royal person or in the legislature, and has no affinity to those arbitrary
powers which are sometimes exerted by irresponsible monarchs to the great detriment
of the people and the destruction of their liberties." What is more, there is this
constitutional provision vitalizing this concept. It reads: "The State shall strengthen the
family as a basic social institution." If, as the Constitution so wisely dictates, it is the
family as a unit that has to be strengthened, it does not admit of doubt that even if a
stronger case were presented for the uncle, still deference to a constitutional mandate
would have led the lower court to decide as it did. chanroblesvirtualawlibrarychanrobles virtual law library

DANTE V. LIBAN, REYNALDO M. BERNARDO, and SALVADOR M. VIARI v.

RICHARD J. GORDON, G.R. NO. 175352 : July 15, 2009
Facts:
Petitioners Dante V. Liban, Reynaldo M. Bernardo, and Salvador M. Viari (petitioners)
filed with this Court a Petition to Declare Richard J. Gordon as Having Forfeited His Seat
in the Senate. Petitioners are officers of the Board of Directors of the Quezon City Red
Cross Chapter while respondent is Chairman of the Philippine National Red Cross
(PNRC) Board of Governors.
During respondent's incumbency as a member of the Senate of the Philippines, he was 1

elected Chairman of the PNRC during the 23 February 2006 meeting of the PNRC Board
of Governors. Petitioners allege that by accepting the chairmanship of the PNRC Board
of Governors, respondent has ceased to be a member of the Senate as provided in
Section 13, Article VI of the Constitution, which reads:
SEC. 13. No Senator or Member of the House of Representatives may hold any other
office or employment in the Government, or any subdivision, agency, or instrumentality
thereof, including government-owned or controlled corporations or their subsidiaries,
during his term without forfeiting his seat. Neither shall he be appointed to any office
which may have been created or the emoluments thereof increased during the term for
which he was elected.
Issue:
Whether Senator Richard J. Gordon (respondent) as having forfeited his seat in the
Senate?
Ruling:
No, PNRC is a Private Organization Performing Public Functions. President Manuel A.
Roxas signed Republic Act No. 95, otherwise known as the PNRC Charter. The PNRC is a
non-profit, donor-funded, voluntary, humanitarian organization, whose mission is to
bring timely, effective, and compassionate humanitarian assistance for the most
vulnerable without consideration of nationality, race, religion, gender, social status, or
political affiliation. The PNRC provides six major services: Blood Services, Disaster
Management, Safety Services, Community Health and Nursing, Social Services and
Voluntary Service.
The government does not control the PNRC. Under the PNRC Charter, as amended, only
six of the thirty members of the PNRC Board of Governors are appointed by the
President of the Philippines. Thus, twenty-four members, or four-fifths (4/5), of the
PNRC Board of Governors are not appointed by the President.
The PNRC Board of Governors, which exercises all corporate powers of the PNRC, elects
the PNRC Chairman and all other officers of the PNRC. The incumbent Chairman of
PNRC, respondent Senator Gordon, was elected, as all PNRC Chairmen are elected, by a
private sector-controlled PNRC Board four-fifths of whom are private sector members of
the PNRC. The PNRC Chairman is not appointed by the President or by any subordinate
government official.
Under Section 17, Article VII of the Constitution, the President exercises control over all
government offices in the Executive branch. 
In short, Congress cannot enact a law creating a private corporation with a special
charter. Such legislation would be unconstitutional. Private corporations may exist only
under a general law. If the corporation is private, it must necessarily exist under a
general law. Stated differently, only corporations created under a general law can
qualify as private corporations. Under existing laws, the general law is the Corporation
Code, except that the Cooperative Code governs the incorporation of cooperatives.
In sum, we hold that the office of the PNRC Chairman is not a government office or an
office in a government-owned or controlled corporation for purposes of the prohibition
in Section 13, Article VI of the 1987 Constitution. However, since the PNRC Charter is
void insofar as it creates the PNRC as a private corporation, the PNRC should
incorporate under the Corporation Code and register with the Securities and Exchange
Commission if it wants to be a private corporation.

ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS,  vs. PHILIPPINE

COCONUT AUTHORITY, G.R. No. 110526 February 10, 1998
Facts:
Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as APCD)
brought this suit for certiorari and mandamus against respondent Philippine Coconut
Authority (PCA) to invalidate the latter's Board Resolution No. 018-93 and the
certificates of registration issued under it on the ground that the resolution in question
is beyond the power of the PCA to adopt, and to compel said administrative agency to
comply instead with the mandatory provisions of statutes regulating the desiccated
coconut industry, in particular, and the coconut industry, in general.
On November 5, 1992, seven desiccated coconut processing companies belonging to
the APCD brought suit in the Regional Trial Court, National Capital Judicial Region in
Makati, Metro Manila, to enjoin the PCA from issuing permits to certain applicants for
the establishment of new desiccated coconut processing plants. Petitioner alleged that
the issuance of licenses to the applicants would violate PCA's Administrative Order No.
02, series of 1991, as the applicants were seeking permits to operate in areas
considered "congested" under the administrative order.
Issue:
Whether the resolution of the Philippine Coconut Authority in which it declares that it
will no longer require those wishing to engage in coconut processing to apply to it for a
license or permit as a condition for engaging in such business is valid?
Ruling:
No,  the PCA invokes a policy of free enterprise that is "unhampered by protective
regulations and unnecessary bureaucratic red tape" as justification for abolishing the
licensing system. There can be no quarrel with the elimination of "unnecessary red
tape." That is within the power of the PCA to do and indeed it should eliminate red tape.
Its success in doing so will be applauded. But free enterprise does not call for removal
of "protective regulations."
Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as
an economic principle.  Although the present Constitution enshrines free enterprise as a
policy, it nonetheless reserves to the government the power to intervene whenever
19

necessary to promote the general welfare. This is clear from the following provisions of
Art. XII of the Constitution which, so far as pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and
similar collective organizations, shall have the right to own, establish, and operate
economic enterprises, subject to the duty of the State to promote distributive justice
and to intervene when the common good so demands.
Sec. 19. The State shall regulate or prohibit monopolies when the public interest so
requires. No combinations in restraint of trade or unfair competition shall be allowed.
(Emphasis added).
At all events, any change in policy must be made by the legislative department of the
government. The regulatory system has been set up by law. It is beyond the power of
an administrative agency to dismantle it. Indeed, petitioner charges the PCA of seeking
to render moot a case filed by some of its members questioning the grant of licenses to
certain parties by adopting the resolution in question. It is alleged that members of
petitioner complained to the court that the PCA had authorized the establishment and
operation of new plants in areas which were already crowded.

PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION vs. COURT OF

INDUSTRIAL RELATIONS,  G.R. No. L-32052 July 25, 1975
Facts:
Claimants, now private respondents, filed with respondent Court a petition wherein they
alleged their employment relationship, the overtime services in excess of the regular
eight hours a day rendered by them, and the failure to pay them overtime
compensation in accordance with Commonwealth Act No. 444. Their prayer was for the
differential between the amount actually paid to them and the amount allegedly due
them. Petitioner Philippine Virginia Tobacco Administration predicate its plea for the
reversal of the order of Court of Industrial Relations on the basic proposition that it is
beyond its jurisdiction as it is exercising governmental functions and that it is exempt
from the operation of Commonwealth Act No. 444. 
Issue:
Whether petitioner, the Philippine Virginia Tobacco Administration, discharges
governmental and not proprietary functions?
Ruling:
Governmental Functions. It was created by Republic Act No. 2265 to attain this national
policy the following objectives are hereby adopted: 1. Financing; 2. Marketing; 3. The
disposal of stocks of the Agricultural Credit Administration (ACA) and the Philippine
Virginia Tobacco Administration (PVTA) at the best obtainable prices and conditions in
order that a reinvigorated Virginia tobacco industry may be established on a sound
basis; and 4. Improving the quality of locally manufactured cigarettes through blending
of imported and native Virginia leaf tobacco; such importation with corresponding
exportation at a ratio of one kilo of imported to four kilos of exported Virginia tobacco,
purchased by the importer-exporter from the Philippine Virginia Tobacco
Administration."
While, to repeat, its submission as to the governmental character of its operation is to
be given credence, it is not a necessary consequence that respondent Court is devoid of
jurisdiction. Nor could the challenged order be set aside on the additional argument
that the Eight-Hour Labor Law is not applicable to it.
"Constituent" (as distinguished from "ministrant"),such as those relating to the
maintenance of peace and the prevention of crime, those regulating property and
property rights, those relating to the administration of justice and the determination of
political duties of citizens, and those relating to national defense and foreign relations.
Under this traditional classification, such constituent functions are exercised by the
State as attributes of sovereignty, and not merely to promote the welfare, progress and
prosperity of the people - these latter functions being ministrant, the exercise of which
is optional on the part of the government."  Nonetheless, as he explained so
persuasively: "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." 
The success that attended the efforts of petitioner to be adjudged as performing
governmental rather than proprietary functions cannot militate against respondent
Court assuming jurisdiction over this labor dispute.
Reference to a number of decisions which recognized in the then respondent Court the
jurisdiction to determine labor controversies by government-owned or controlled
corporations lends to support to such an approach.  Nor could it be explained only on
the assumption that proprietary rather than governmental functions did call for such a
conclusion. 

Bacani vs NACOCO

FACTS: Petitioners are stenographers in Branch VI of the CIF Manila. In a pending civil case
where the public respondents are involved, they requested for the services of the stenographers
and thereby paid them for the said transcript at the rate of P1 per page, amounting to P714 in
total.

However, upon inspecting the books of the corporation, the Auditor General disallowed the
payment of such fees and sought for the recovery of the amounts paid. Consequently, the AG
required the petitioners to reimburse the amounts invoking that the National Coconut
Corporation is a government entity within the purview of section 2 of the Revised Administrative
Code of 1917 which states that: “‘The Government of the Philippine Islands’ is a term which
refers to the corporate governmental entity through which the functions of government are
exercised throughout the Philippine Islands, including, save as the contrary appears from the
context, the various arms through which political authority is made effective in said Islands,
whether pertaining to the central Government or to the provincial or municipal branches or other
form of local government.”, hence, exempted from the payment of the fees in question.

ISSUE: Does the fact that corporations, such as NACOCO, perform certain functions of
government make them a part of the Government of the Philippines?

HELD: No. First, there are functions which our government is required to exercise to promote its
objectives as expressed in our Constitution and which are exercised by it as an attribute of
sovereignty, and those which it may exercise to promote merely the welfare, progress and
prosperity of the people. To this latter class belongs the organization of those corporations
owned or controlled by the government to promote certain aspects of the economic life of our
people such as the National Coconut Corporation. These are what we call government-owned
or controlled corporations which may take on the form of a private enterprise or one organized
with powers and formal characteristics of a private corporations under the Corporation Law.

They do not acquire that status for the simple reason that they do not come under the
classification of municipal or public corporation. Take for instance the National Coconut
Corporation. While it was organized with the purpose of “adjusting the coconut industry to a
position independent of trade preferences in the United States” and of providing “Facilities for
the better curing of copra products and the proper utilization of coconut by-products”, a function
which our government has chosen to exercise to promote the coconut industry, however, it was
given a corporate power separate and distinct from our government, for it was made subject to
the provisions of our Corporation Law in so far as its corporate existence and the powers that it
may exercise are concerned (sections 2 and 4, Commonwealth Act No. 518). It may sue and be
sued in the same manner as any other private corporations, and in this sense it is an entity
different from our government. As this Court has aptly said, “The mere fact that the Government
happens to be a majority stockholder does not make it a public corporation” (National Coal Co.
vs. Collector of Internal Revenue, 46 Phil., 586-587). “By becoming a stockholder in the National
Coal Company, the Government divested itself of its sovereign character so far as respects the
transactions of the corporation cralaw . Unlike the Government, the corporation may be sued
without its consent, and is subject to taxation. Yet the National Coal Company remains an
agency or instrumentality of government.”

MIAA vs CA

FACTS: MIAA received Final Notices of Real Estate Tax Delinquency from the City of
Parañaque for the taxable years 1992 to 2001. The City of Parañaque, through its City
Treasurer, issued notices of levy and warrants of levy on the Airport Lands and Buildings.
Paranaque contends that Section 193 of the Local Government Code expressly withdrew the
tax exemption privileges of “government-owned and-controlled corporations” upon the effectivity
of the Local Government Code. Respondents also argue that a basic rule of statutory
construction is that the express mention of one person, thing, or act excludes all others. An
international airport is not among the exceptions mentioned in Section 193 of the Local
Government Code. Thus, respondents assert that MIAA cannot claim that the Airport Lands and
Buildings are exempt from real estate tax.

MIAA filed with the CA an original petition for prohibition and injunction, with prayer for
preliminary injunction or TRO. The petition sought to restrain the City of Parañaque from
imposing real estate tax on, levying against, and auctioning for public sale the Airport Lands and
Buildings.

ISSUE: Is MIAA a GOCC?

HELD: No. A government-owned or controlled corporation must be "organized as a stock or

non-stock corporation." MIAA is not organized as a stock or non-stock corporation. MIAA is not
a stock corporation because it has no capital stock divided into shares.

MIAA is a government instrumentality vested with corporate powers to perform efficiently its
governmental functions. MIAA is like any other government instrumentality, the only difference
is that MIAA is vested with corporate powers. Section 2(10) of the Introductory Provisions of the
Administrative Code defines a government "instrumentality" as follows:

SEC. 2. General Terms Defined. –– x x x x

(10) Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some
if not all corporate powers, administering special funds, and enjoying operational autonomy,
usually through a charter. 

When the law vests in a government instrumentality corporate powers, the instrumentality does
not become a corporation. Unless the government instrumentality is organized as a stock or
non-stock corporation, it remains a government instrumentality exercising not only governmental
but also corporate powers. Thus, MIAA exercises the governmental powers of eminent
domain,12 police authority13 and the levying of fees and charges.14 At the same time, MIAA
exercises "all the powers of a corporation under the Corporation Law, insofar as these powers
are not inconsistent with the provisions of this Executive Order."15

Likewise, when the law makes a government instrumentality operationally autonomous, the
instrumentality remains part of the National Government machinery although not integrated with
the department framework. The MIAA Charter expressly states that transforming MIAA into a
"separate and autonomous body"16 will make its operation more "financially viable."

Republic vs. Sandiganbayan

FACTS: Based on the mandate of President Corazon Aquino’s E.O. No. 1 creating the
Presidential Commission on Good Government which was tasked to recover all ill-gotten wealth
of former President Marcos, the AFP Anti-Graft Board investigated various reports of alleged
unexplained wealth of respondent Major General Josephus Q. Ramas.

The PCGG filed a petition for forfeiture under Republic Act No. 1379 against Ramas. The
Amended Complaint alleged that Ramas was the Commanding General of the Philippine Army
until 1986. On the other hand, Dimaano was a confidential agent of the Military Security Unit,
Philippine Army, assigned as a clerk-typist at the office of Ramas. Admitting her employment as
a clerk-typist in the office of Ramas from January-November 1978 only, Dimaano claimed
ownership of the monies, communications equipment, jewelry and land titles taken from her
house by the Philippine Constabulary raiding team.
Petitioner argues that the exclusionary right arising from an illegal search applies only beginning
2 February 1987, the date of ratification of the 1987 Constitution. Petitioner contends that all
rights under the Bill of Rights had already reverted to its embryonic stage at the time of the
search. Therefore, the government may confiscate the monies and items taken from Dimaano
and use the same in evidence against her since at the time of their seizure, private respondents
did not enjoy any constitutional right.

ISSUE: Whether the revolutionary government was bound by the Bill of Rights of the 1973
Constitution during the interregnum, that is, after the actual and effective take-over of power by
the revolutionary government following the cessation of resistance by loyalist forces up to 24
March 1986, immediately before the adoption of the Provisional Constitution.

HELD:  No. The Bill of Rights under the 1973 Constitution was not operative during the
interregnum. However, the protection accorded to individuals under the Covenant and the
Declaration remained in effect during the interregnum.

During that time, the directives and orders of the revolutionary government were the supreme
law because no constitution limited the extent and scope of such directives and orders. With the
abrogation of the 1973 Constitution by the successful revolution, there was no municipal law
higher than the directives and orders of the revolutionary government. Thus, during the
interregnum, a person could not invoke any exclusionary right under a Bill of Rights because
there was neither a constitution nor a Bill of Rights during the interregnum.

However, even during the interregnum the Filipino people continued to enjoy, under the
Covenant and the Declaration, almost the same rights found in the Bill of Rights of the 1973
Constitution.

The revolutionary government, after installing itself as the de jure government, assumed
responsibility for the State’s good faith compliance with the Covenant to which the Philippines is
a signatory. Article 2(1) of the Covenant requires each signatory State “to respect and to ensure
to all individuals within its territory and subject to its jurisdiction the rights recognized in the
present Covenant.” Under Article 17(1) of the Covenant, the revolutionary government had the
duty to insure that no one shall be subjected to arbitrary or unlawful interference with his
privacy, family, home or correspondence.

The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that “no
one shall be arbitrarily deprived of his property.” Although the signatories to the Declaration did
not intend it as a legally binding document, being only a declaration, the Court has interpreted
the Declaration as part of the generally accepted principles of international law and binding on
the State.

Thus, the revolutionary government was also obligated under international law to observe the
rights of individuals under the Declaration. The revolutionary government did not repudiate the
Covenant or the Declaration during the interregnum. The Court considers the Declaration as
part of customary international law, and that Filipinos as human beings are proper subjects of
the rules of international law laid down in the
Covenant. As the de jure government, the revolutionary government could not escape
responsibility for the State’s good faith compliance with its treaty obligations under international
law. Directives and orders issued by government officers were valid so long as these officers did
not exceed the authority granted them by the revolutionary government.

Co Kim Chan vs. Valdez Tan Keh

FACTS: Petitioner Co Kim Cham had a pending Civil Case with the Court of First Instance of
Manila initiated during the time of the Japanese occupation.The respondent judge, Judge
Arsenio Dizon, refused to continue hearings on the case which were initiated during the
Japanese military occupation on the ground that the proclamation issued by General MacArthur
that “all laws, regulations and processes of any other government in the Philippines than that of
the said Commonwealth are null and void and without legal effect in areas of the Philippines
free of enemy occupation and control” had the effect of invalidating and nullifying all judicial
proceedings and judgments of the court of the Philippines during the Japanese military
occupation, and that the lower courts have no jurisdiction to take cognizance of and continue
judicial proceedings pending in the courts of the defunct Republic of the Philippines in the
absence of an enabling law granting such authority. Respondent additionally contends that the
government established during the Japanese occupation were no de facto government.

ISSUE: Were the judicial acts and proceedings of the court during the Japanese occupation
remained good and valid?

HELD: Yes. It is evident that the Philippine Executive Commission was a civil government
established by military forces and thus a de facto government of the second kind. Legislative, as
well as judicial, acts of de facto governments, which are not of political complexion, remain valid
after reoccupation. It is presumed that the proclamation of General MacArthur did not
specifically refer to judicial processes thus it has not invalidated all the judgments and
proceedings of the courts during the Japanese regime. The existence of the courts depend
upon the laws which create and confer upon them their jurisdiction. Such laws, not political in
nature, are not abrogated by a change of sovereignty and continue in force until repealed by
legislative acts. It is thus obvious that the present courts have jurisdiction to continue
proceedings in cases not of political complexion.

Although in theory the authority of the local civil and judicial administration is suspended as a
matter of course as soon as military occupation takes place, in practice the invader does not
usually take the administration of justice into his own hands, but continues the ordinary courts or
tribunals to administer the laws of the country which he is enjoined, unless absolutely
prevented, to respect. An Executive Order of President McKinley to the Secretary of War states
that “in practice, they (the municipal laws) are not usually abrogated but are allowed to remain in
force and to be administered by the ordinary tribunals substantially as they were before the
occupation. This enlightened practice is, so far as possible, to be adhered to on the present
occasion.” And Taylor in this connection says: “From a theoretical point of view it may be said
that the conqueror is armed with the right to substitute his arbitrary will for all pre-existing forms
of government, legislative, executive and judicial. From the stand-point of actual practice such
arbitrary will is restrained by the provision of the law of nations which compels the conqueror to
continue local laws and institution so far as military necessity will permit.” Undoubtedly, this
practice has been adopted in order that the ordinary pursuits and business of society may not
be unnecessarily deranged, inasmuch as belligerent occupation is essentially provisional, and
the government established by the occupant of transient character.
Lawyer's League vs. Aquino

FACTS: On February 25, 1986, President Corazon Aquino issued Proclamation No. 1
announcing that she and Vice President Laurel were taking power. 2. On March 25, 1986,
proclamation No.3 was issued providing the basis of the Aquino government assumption of
power by stating that the "new government was installed through a direct exercise of the power
of the Filipino people assisted by units of the New Armed Forces of the Philippines."

ISSUE: Whether or not the government of Corazon Aquino is legitimate.

HELD: Yes.

Petitioners have no personality to sue and their petitions state no cause of action. For the
legitimacy of the Aquino government is not a justiciable matter. It belongs to the realm of politics
where only the people of the Philippines are the judge. And the people have made the
judgment; they have accepted the government of President Corazon C. Aquino which is in
effective control of the entire country so that it is not merely a de facto government but in fact
and law a de jure government. Moreover, the community of nations has recognized the
legitimacy of tlie present government.

Aquino vs. COMELEC

FACTS: Petitioner Aquino was a resident of Concepcion, Tarlac for over 50 years. He indicated
in his Certificate of Candidacy for the 1992 congressional elections that he was a resident of
thereof for 52 years immediately preceding that election. His birth certificate also places
Concepcion, Tarlac as the birthplace of both his parents.

For the 1995 elections, Aquino ran for the Congress representing the new 2nd district of Makati
City. He stated in his Certificate of Candidacy that he has resided “in the constituency where” he
sought “to be elected” for only “10 months.” He in fact has just transferred to a leased
condominium in Makati from his residence in Tarlac. Private respondents filed a petition to
disqualify him on the ground that he lacked the residence qualification as a candidate for
congressman mandated in Art VI, Sec 6 of the Constitution. The following day, Aquino amended
his Certificate of Candidacy, indicating he has been a resident in said place for 1 year and 13
days. Meanwhile, elections were held and he garnered the highest number of votes. However,
COMELEC, acting on the private respondents’ petition, suspended his proclamation
permanently.

ISSUE: Did Aquino satisfy the constitutional residence requirement in the 2nd district of Makati
City as mandated by Art VI, Sec 6?

HELD: No. The essence of representation is to place through the assent of voters those most
cognizant and sensitive to the needs of a particular district. Clearly, Aquino’s domicile of origin
was Concepcion, Tarlac, and the same is not easily lost. That coupled with the fact that Aquino
himself claims to have other residences in Metro Mla. and that he claims to be resident of the
condominium unit in Makati for only a short length of time “indicate that” his “sole purpose in
transferring his physical residence” is not to acquire a new residence of domicile “but only to
qualify as a candidate for Representative of the 2nd district of Makati City.” The absence of
clear and positive proof showing a successful abandonment of domicile under the conditions
stated above, the lack of identification— sentimental, actual or otherwise—with the area, and
the suspicious circumstances under which the lease agreement [of the condominium unit in
Makati (instead of buying one)] was effected all belie his claim of residency for the period
required by the Constitution.

The sanctity of the people's will must be observed at all times if our nascent democracy is to be
preserved. In any challenge having the effect of reversing a democratic choice, expressed
through the ballot, this Court should be ever so vigilant in finding solutions which would give
effect to the will of the majority, for sound public policy dictates that all elective offices are filled
by those who have received the highest number of votes cast in an election. When a challenge
to a winning candidate's qualifications however becomes inevitable, the ineligibility ought to be
so noxious to the Constitution that giving effect to the apparent will of the people would
ultimately do harm to our democratic institutions.

Estrada vs. Desierto

FACTS: Former President Joseph Estrada was elected during 1998 elections. Sometime in
October 2000, however, several allegations of corruption and of receiving millions of pesos from
jueteng lords were made against him before the Senate Blue Ribbon Committee. Some
Congressmen moved to impeach Estrada which caused several sectors, former Presidents
Aquino and Ramos to call for Estrada’s resignation. Some senior advisers of Estrada as well as
a number of his cabinet resigned from their positions. Impeachment trial commenced with Chief
Justice Davide presiding.

The impeachment trial was put to a halt after the public prosecutors tendered their collective
resignation before the Impeachment Tribunal caused by the decision of 11 Senators not to open
the second envelope (an alleged secret account of Erap amounting to 3.3B Pesos in the name
of Jose Velarde). An indefinite postponement of the Impeachment proceedings was granted by
the Chief Justice.

At noon, Chief Justice, whose authority was later unanimously confirmed by SC, administered
the oath to Arroyo as President of the Philippines. That same afternoon, Estrada and his family
left Malacañang and transmitted a signed letter appointing then Vice-President Arroyo as Acting
President, citing Section 11, Article 7 of the Constitution, to the House Speaker and Senate
President.

ISSUES: 1. Whether the petitions present a justiciable controversy.

2. Assuming that the petitions present a justiciable controversy, whether petitioner Estrada is a
President on leave while respondent Arroyo is an Acting President.

HELD: 1. The Court held that the cases at bar do not involve a political question and therefore
falls within the ambit of judicial scrutiny pursuant to the doctrine of separation of powers of
coordinate branches of government.

Political question refers to those questions which, under our Constitution, are to be decided by
the people in their sovereign capacity, or in regard to which full discretionary authority has been
delegated to the legislative or executive branch of government. It is concerned with the issues
dependent on the wisdom, not legality of a particular measure.

To a great degree, the 1987 Constitution has narrowed the reach of the political question
doctrine when it expanded the power of judicial review of this court not only to settle actual
controversies involving rights which are legally demandable and enforceable but also to
determine whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of government.

2. The issue whether the Supreme Court has jurisdiction to review the claim of temporary
inability of former President Estrada and thereafter revise the decision of both Houses of
Congress recognizing Arroyo as President is political in nature and addressed solely to
Congress by constitutional fiat—it is a political issue which cannot be decided by the Supreme
Court without transgressing the principle of separation of powers.

Implicitly clear in the recognition by both houses of Congress of Arroyo as President is the
premise that the inability of former President Estrada is no longer temporary.

Former President Estrada cannot successfully claim that he is a President on leave on the
ground that he is merely unable to govern temporarily since such claim has been laid to rest by
Congress and the decision that President Arroyo is the de jure President made by a co-equal
branch of government cannot be reviewed by the Supreme Court.

Additional notes: EDSA 1 vs EDSA 2

-EDSA People Power I involves the exercise of the people power of revolution which overthrew
the whole government while EDSA People Power II is an exercise of people power of freedom
of speech and freedom of assembly to petition the government for redress of grievances which
only affected the office of the President.

-EDSA I is extra constitutional but EDSA II is intra

-EDSA I presented a political question constitutional . while EDSA II involved legal questions
Resignation .

-Using the totality test, the Supreme Court held that petitioner resigned as President – which
was confirmed by his leaving Malacañang.

-Facts show that petitioner did not write any formal letter of resignation before he evacuated
Malacanang Palace in the afternoon of January 20, 2001 after the oath-taking of respondent
Arroyo. Consequently, whether or not petitioner resigned has to be determined from his acts
and omissions before, during and after January 20, 2001 or by the totality of prior,
contemporaneous and posterior facts and circumstantial evidence bearing a material relevance
on the issue.

-In the press release containing his final statement, (1) He acknowledged the oath-taking of
Arroyo as President of the Republic albeit with reservation about its legality; (2) He emphasized
he was leaving the Palace, the seat of the presidency, for the sake of peace and in order to
begin the healing process of our nation. He did not say he was leaving the Palace due to any
kind of inability and that he was going to re-assume the presidency as soon as the disability
disappears; (3) He expressed his gratitude to the people for the opportunity to serve them.
Without doubt, he was referring to the past opportunity given him to serve the people as
President; (4) He assured that he will not shirk from any future challenge that may come ahead
in the same service of our country. Petitioner’s reference is to a future challenge after occupying
the office of the president which he has given up; and (5) He called on his supporters to join him
in the promotion of a constructive national spirit of reconciliation and solidarity. Certainly, the
national spirit of reconciliation and solidarity could not be attained if he did not give up the
presidency.

-Resignation is a factual question and its elements are beyond quibble: (1) there must be an
intent to resign and (2) the intent must be coupled by acts of relinquishment. The validity of a
resignation is not governed by any formal requirement as to form. It can be oral. It can be
written. It can be express. It can be implied. As long as the resignation is clear, it must be given
legal effect.

-A public official has the right not to serve if he really wants to retire or resign. Nevertheless, if at
the time he resigns or retires, a public official is facing administrative or criminal investigation or
prosecution, such resignation or retirement will not cause the dismissal of the criminal or
administrative proceedings against him . He cannot use his resignation or retirement to avoid
prosecution.

G.R. No. 76180. October 24, 1986 SATURNINO V. BERMUDEZ

 
FACTS:

 
In a petition for declaratory relief impleading no respondents, Petitioner, as a lawyer, quotes the first
paragraph of Section 5 of Article XVIII of the proposed 1986 Constitution, which provides in full as
follows: jgc:chanrobles.com.ph

 
"Sec. 5. The six-year term of the incumbent President and Vice-President elected in the February 7,
1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30,
1992."cralaw virtua1aw library

 
"The first regular elections for the President and Vice-President under this Constitution shall be held on
the second Monday of May, 1992." cralaw virtua1aw

 
Claiming that the said provision "is not clear" as to whom it refers, he then asks the Court "to declare
and answer the question of the construction and definiteness as to who, among the present incumbent
President Corazon Aquino and Vice President Salvador Laurel and the elected President Ferdinand E.
Marcos and Vice President Arturo M. Tolentino being referred to under the said Section 7 (sic) of
ARTICLE XVIII of the TRANSITORY PROVISIONS of the proposed 1986 Constitution refers to, . . ."
 
ISSUE:
 
Whether or not the Supreme court has the jurisdiction in declaring who is the elected President and
Vice President in the Febuary 7, 1986?
 
RULING:
 
The petition furthermore states no cause of action. Petitioner’s allegation of ambiguity or vagueness of
the aforequoted provision is manifestly gratuitous, it being a matter of public record and common
public knowledge that the Constitutional Commission refers therein to incumbent President Corazon C.
Aquino and Vice-President Salvador H. Laurel, and to no other persons, and provides for the extension
of their term to noon of June 30, 1992 for purposes of synchronization of elections. Hence, the second
paragraph of the cited section provides for the holding on the second Monday of May, 1992 of the first
regular elections for the President and Vice-President under said 1986 Constitution.
 
"Petitioners have no personality to sue and their petitions state no cause of action. For the legitimacy
of the Aquino government is not a justiciable matter. It belongs to the realm of politics where only the
people of the Philippines are the judge. And the people have made the judgment; they have accepted
the government of President Corazon C. Aquino which is in effective control of the entire country so
that it is not merely a de facto government but in fact and law a de jure government. Moreover, the
community of nations has recognized the legitimacy of the present government. All the eleven
members of this Court, as reorganized, have sworn to uphold the fundamental law of the Republic
under her government."
 
G.R. No. L-200 March 28, 1946 ANASTACIO LAUREL vs. ERIBERTO MISA, as
Director of Prisons
 
FACTS:
A petition for habeas corpus was filed by Anastacio Laurel and was based on a theory that a Filipino
citizen who adhered to the enemy giving the latter aid and comfort during the Japanese occupation
cannot be prosecuted for the crime of treason defined and penalized by article 114 of the Revised
Penal Code, for the reason (1) that the sovereignty of the legitimate government in the Philippines
and, consequently, the correlative allegiance of Filipino citizens thereto was then suspended; and (2)
that there was a change of sovereignty over these Islands upon the proclamation of the Philippine
Republic.
ISSUE:
Whether or not the allegiance of Filipinos suspended during enemy occupation.
RULING:
No.
Citizen or subject owes, not a qualified and temporary, but an absolute and permanent allegiance,
which consists in the obligation of fidelity and obedience to his government or sovereign; and that
this absolute and permanent allegiance should not be confused with the qualified and temporary
allegiance which a foreigner owes to the government or sovereign of the territory wherein he resides,
so long as he remains there, in return for the protection he receives, and which consists in the
obedience to the laws of the government or sovereign.
Considering that the absolute and permanent allegiance of the inhabitants of a territory occupied by
the enemy of their legitimate government or sovereign is not abrogated or severed by the enemy
occupation, because the sovereignty of the government or sovereign de jure is not transferred
thereby to the occupier, and if it is not transferred to the occupant it must necessarily remain vested
in the legitimate government; that the sovereignty vested in the titular government (which is the
supreme power which governs a body politic or society which constitute the state) must be
distinguished from the exercise of the rights inherent thereto, and may be destroyed, or severed and
transferred to another, but it cannot be suspended because the existence of sovereignty cannot be
suspended without putting it out of existence or divesting the possessor thereof at least during the
so-called period of suspension; that what may be suspended is the exercise of the rights of
sovereignty with the control and government of the territory occupied by the enemy passes
temporarily to the occupant; that the subsistence of the sovereignty of the legitimate government in a
territory occupied by the military forces of the enemy during the war, "although the former is in fact
prevented from exercising the supremacy over them" is one of the "rules of international law of our
times";
Considering that, as a corollary of the suspension of the exercise of the rights of sovereignty by the
legitimate government in the territory occupied by the enemy military forces, because the authority of
the legitimate power to govern has passed into the hands of the occupant (Article 43, Hague
Regulations), the political laws which prescribe the reciprocal rights, duties and obligation of
government and citizens, are suspended or in abeyance during military occupation (Co Kim cham
vs. Valdez Tan Keh and dizon, supra), for the only reason that as they exclusively bear relation to
the ousted legitimate government, they are inoperative or not applicable to the government
established by the occupant; that the crimes against national security, such as treason and
espionage; inciting to war, correspondence with hostile country, flight to enemy's country, as well as
those against public order, such as rebellion, sedition, and disloyalty, illegal possession of firearms,
which are of political complexion because they bear relation to, and are penalized by our Revised
Penal Code as crimes against the legitimate government, are also suspended or become
inapplicable as against the occupant, because they can not be committed against the latter (Peralta
vs. Director of Prisons, supra); and that, while the offenses against public order to be preserved by
the legitimate government were inapplicable as offenses against the invader for the reason above
stated, unless adopted by him, were also inoperative as against the ousted government for the latter
was not responsible for the preservation of the public order in the occupied territory, yet article 114
of the said Revised Penal Code, was applicable to treason committed against the national security of
the legitimate government, because the inhabitants of the occupied territory were still bound by their
allegiance to the latter during the enemy occupation;
Considering that, although the military occupant is enjoined to respect or continue in force, unless
absolutely prevented by the circumstances, those laws that enforce public order and regulate the
social and commercial life of the country, he has, nevertheless, all the powers of de facto
government and may, at his pleasure, either change the existing laws or make new ones when the
exigencies of the military service demand such action, that is, when it is necessary for the occupier
to do so for the control of the country and the protection of his army, subject to the restrictions or
limitations imposed by the Hague Regulations, the usages established by civilized nations, the laws
of humanity and the requirements of public conscience (Peralta vs. Director of Prisons, supra; 1940
United States Rules of Land Warfare 76, 77); and that, consequently, all acts of the military occupant
dictated within these limitations are obligatory upon the inhabitants of the territory, who are bound to
obey them, and the laws of the legitimate government which have not been adopted, as well and
those which, though continued in force, are in conflict with such laws and orders of the occupier,
shall be considered as suspended or not in force and binding upon said inhabitants;
Considering that, since the preservation of the allegiance or the obligation of fidelity and obedience
of a citizen or subject to his government or sovereign does not demand from him a positive action,
but only passive attitude or forbearance from adhering to the enemy by giving the latter aid and
comfort, the occupant has no power, as a corollary of the preceding consideration, to repeal or
suspend the operation of the law of treason, essential for the preservation of the allegiance owed by
the inhabitants to their legitimate government, or compel them to adhere and give aid and comfort to
him; because it is evident that such action is not demanded by the exigencies of the military service
or not necessary for the control of the inhabitants and the safety and protection of his army, and
because it is tantamount to practically transfer temporarily to the occupant their allegiance to the
titular government or sovereign; and that, therefore, if an inhabitant of the occupied territory were
compelled illegally by the military occupant, through force, threat or intimidation, to give him aid and
comfort, the former may lawfully resist and die if necessary as a hero, or submit thereto without
becoming a traitor;

A.M. No. 133-J May 31, 1982 BERNARDITA R. MACARIOLA vs. HONORABLE ELIAS B.
ASUNCION, Judge of the Court of First Instance of Leyte

FACTS:

Bernardita R. Macariola charged respondent Judge Elias B. Asuncion of the Court of First Instance
of Leyte, now Associate Justice of the Court of Appeals, with "acts unbecoming a judge."

Civil Case No. 3010 of the Court of First Instance of Leyte was a complaint for partition filed by
Sinforosa R. Bales, et al against Bernardita R. Macariola.
Respondent judge ruled on a petition for partition involving petitioner and other parties.

Lot 1184-E was sold to Dr. Arcadio Galapon. Later on Dr. Arcadio Galapon and his wife Sold a
portion of Lot 1184-E to Judge Asuncion and his wife, Victoria S. Asuncion

Bernardita filed a complaint alleging among others that respondent Judge Asuncion violated Article
1491, paragraph 5, of the New Civil Code in acquiring by purchase a portion of Lot No. 1184-E
which was one of those properties involved in Civil Case No. 3010 decided by him.

ISSUE:

Whether or not the Judge violated paragraphs 1 and 5, Article 14 of the Code of Commerce when he
associated himself with the Traders Manufacturing and Fishing Industries, Inc. as a stockholder and
a ranking officer.

RULING:

It is significant to note that the present Code of Commerce is the Spanish Code of Commerce of
1885, with some modifications made by the "Commission de Codificacion de las Provincias de
Ultramar," which was extended to the Philippines by the Royal Decree of August 6, 1888, and took
effect as law in this jurisdiction on December 1, 1888.

Upon the transfer of sovereignty from Spain to the United States and later on from the United States
to the Republic of the Philippines, Article 14 of this Code of Commerce must be deemed to have
been abrogated because where there is change of sovereignty, the political laws of the former
sovereign, whether compatible or not with those of the new sovereign, are automatically abrogated,
unless they are expressly re-enacted by affirmative act of the new sovereign.

While municipal laws of the newly acquired territory not in conflict with the, laws of the new
sovereign continue in force without the express assent or affirmative act of the conqueror, the
political laws do not. However, such political laws of the prior sovereignty as are not in conflict with
the constitution or institutions of the new sovereign, may be continued in force if the conqueror shall
so declare by affirmative act of the commander-in-chief during the war, or by Congress in time of
peace.

On such transfer (by cession) of territory, it has never been held that the relations of the inhabitants
with each other undergo any change. Their relations with their former sovereign are dissolved, and
new relations are created between them and the government which has acquired their territory. The
same act which transfers their country, transfers the allegiance of those who remain in it; and the law
which may be denominated political, is necessarily changed, although that which regulates the
intercourse and general conduct of individuals, remains in force, until altered by the newly- created
power of the State.

G.R. No. L-533             August 20, 1946 RAMON RUFFY, ET AL. vs. THE CHIEF OF STAFF,
PHILIPPINE ARMY, ET AL.
FACTS:
The ground of the petition was that the petitioners were not subject to military law at the time the
offense for which they had been placed on trial was committed.
It appears that at the outbreak of war on December 8, 1941, Ramon Ruffy was the Provincial
Commander, Prudente M. Francisco, a junior officer. When, on February 27, 1942, the Japanese
forces landed in Mindoro, Major Ruffy retreated to the mountains instead of surrendering to the
enemy, disbanded his company, and organized and led a guerrilla outfit known as Bolo Combat
team of Bolo Area.
A change in the command of the Bolo Area was effected by Colonel Jurado on June 8, 1944: Major
Ruffy was relieved of his assignment as Commanding Officer, Bolo Battalion, and Capt. Esteban P.
Beloncio was put in Ruffy's place. On October 19, 1944, Lieut. Col. Jurado was slain allegedly by the
petitioners. After the commission of this crime, the petitioners, it is alleged, seceded from the 6th
Military District.
ISSUE:
Whether petitioner was subject to military law at the time the alleged offense was committed.
RULING:
The paragraph quoted in the petitioner's memorandum from Winthrop's Military Law and Precedents
and the subsequent paragraph which has been omitted furnish a complete answer to petitioner's
contention of the Philippines by Japanese forces, the officers and men of the Philippine Army did not
cease to be fully in the service, though in a measure,' only in a measure, they were not subject to the
military jurisdiction, if they were not active duty. In the latter case, like officers and soldiers on leave
of absence or held as prisoners of war, they could not be held guilty of a breach of the discipline of
the command or of a neglect of duty, or disobedience of orders, or mutiny, or subject to a military
trial therefor; but for an act unbecoming an officer and a gentleman, or an act which constitutes an
offense of the class specified in the 95th Article of War, they may in general be legally held subject
to military jurisdiction and trial. "So a prisoner of war, though not subject, while held by the enemy, to
the discipline of his own army, would, when exchanged of paroled, be not exempt from liability for
such offenses as criminal acts or injuriuos conduct committed during his captivity against other
officers or soldiers in the same status." (Winthrop's Military Law and Precedents, 2d Edition, pp. 91,
92.)
The rule invoked by counsel, namely, that laws of political nature or affecting political relations are
considered superseded or in abeyance during the military occupation, is intended for the governing
of the civil inhabitants of the occupied territory. It is not intended for and does not bind the enemies
in arms. This is self-evident from the very nature of things. The paradox of a contrary ruling should
readily manifest itself. Under the petitioner's theory the forces of resistance operating in an occupied
territory would have to abide by the outlawing of their own existence. They would be stripped of the
very life-blood of an army, the right and the ability to maintain order and discipline within the
organization and to try the men guilty of breach thereof.
Independently of their previous connection with the Philippine Army and the Philippine Constabulary,
Captain Francisco and Lieutenant Fortus as well as Major Garcia and Lieutenant Adeva were
subject to military jurisdiction.
It is our opinion that the petitioners come within the general application of the clause in sub-
paragraph (a); "and all other persons lawfully called, drafted, or ordered into, or to duty for training in,
the said service, from the dates they are required by the terms of the call, draft, or order to obey the
same." By their acceptance of appointments as officers in the Bolo Area from the General
Headquarters of the 6th Military District, they became members of the Philippine Army amendable to
the Articles of War. The Bolo Area, as has been seen, was a contigent of the 6th Military District
which, as has also been pointed out, had been recognized by and placed under the operational
control of the United States Army in the Southwest Pacific. The Bolo Area received supplies and
funds for the salaries of its officers and men from the Southwest Pacific Command. As officers in the
Bolo Area and the 6th Military District, the petitioners operated under the orders of duly established
and duly appointed commanders of the United States Army. Thus covered by Article 2 of the Articles
of War which provides for persons subject to military law.

G.R. Nos. 70116-19 August 12, 1986 COMMISSIONER OF INTERNAL REVENUE, vs. FRANK
ROBERTSON, JAMES W. ROBERTSON, ROBERT H. CATHEY, JOHN L. GARRISON AND THE
COURT OF TAX APPEALS, 
 

Petitioner Frank Robertson is an American citizen born in the Philippines on July 8, 1924. He resided
in the Philippines until repatriated to the United States in 1945 and took residence at Long Beach,
California. Soon after he was employed by the U.S. Federal Government with a job at the U.S. Navy.
His work brought him to the U.S. Navy's various installations overseas with eventual assignment at
the U.S. Naval Ship Repair Facility at Subic Bay, Olongapo, Philippines, in 1962.

Like his brother Frank Robertson, petitioner James Robertson (CTA Case No. 2736) was born in the
Philippines on December 22, 1918 and had since resided in this country until repatriated to the
United States in 1945 and there, established his domicile. He landed a job with the U.S. Navy
Shipyard at Long Beach, California as a U.S. Federal Civil Service employee. He returned to the
Philippines in 1958 with assignment at the U.S. Naval Base at Subic Bay, Olongapo, and has since
remained thru 1972.

In CTA Case No. 2738, petitioner Robert H. Cathey is a United States born citizen who first came to
the Philippines with the U.S. liberation force in 1944, and upon discharge from the military service in
1946 turned a U.S. Navy's civilian employee with station at Makati, Metro Manila.

Petitioner John Garrison (CTA Case No. 2739) is a Philippine born American citizen also repatriated
to the United States in 1945 establishing his domicile at San Francisco, California. Soon after he
was employed by the U.S. Federal Government in its military installations. He returned to the
Philippines in 1952 assigned at the U.S. Naval Base, Subic Bay, Philippines.

All told, the petitioners are citizens of the United States; holders of American passports and admitted
as Special Temporary Visitors under Section 9 (a) visa of the Philippine Immigration Act of 1940, as
amended; civilian employees in the U.S. Military Base in the Philippines in connection with its
construction, maintenance, operation, and defense; and incomes are solely derived from salaries
from the U.S. government by reason of their employment in the U.S. Bases in the Philippines." (pp.
76-78, Record)

ISSUE:

WON petitioner is exempt from Philippine income tax.

RULING:

In order to avail oneself of the tax exemption under the RP-US Military Bases Agreement: he must
be a national of the United States employed in connection with the construction, maintenance,
operation or defense, of the bases, residing in the Philippines by reason of such employment, and
the income derived is from the U.S. Government (Art. XII par. 2 of PI-US Military Bases Agreement
of 1947). Said circumstances are all present in the case at bar.

G.R. No. L-26379      December 27, 1969 WILLIAM C. REAGAN, ETC., vs. COMMISSIONER OF
INTERNAL REVENUE
FACTS:
A question novel in character, the answer to which has far-reaching implications, is raised by
petitioner William C. Reagan, at one time a civilian employee of an American corporation providing
technical assistance to the United States Air Force in the Philippines. He would dispute the payment
of the income tax assessed on him by respondent Commissioner of Internal Revenue on an amount
realized by him on a sale of his automobile to a member of the United States Marine Corps, the
transaction having taken place at the Clark Field Air Base at Pampanga. Nine (9) months thereafter
and before his tour of duty expired, petitioner imported on April 22, 1960 a tax-free 1960 Cadillac car
with accessories valued at $6,443.83, including freight, insurance and other charges."4 Then came
the following: "On July 11, 1960, more than two (2) months after the 1960 Cadillac car was imported
into the Philippines, petitioner requested the Base Commander, Clark Air Base, for a permit to sell
the car, which was granted provided that the sale was made to a member of the United States
Armed Forces or a citizen of the United States employed in the U.S. military bases in the Philippines.
On the same date, July 11, 1960, petitioner sold his car for $6,600.00 to a certain Willie Johnson, Jr.
(Private first class), United States Marine Corps, Sangley Point, Cavite, Philippines, as shown by a
Bill of Sale . . . executed at Clark Air Base. On the same date, Pfc. Willie (William) Johnson, Jr. sold
the car to Fred Meneses for P32,000.00 as evidenced by a deed of sale executed in Manila."5
ISSUE:
WON the sale was made outside Philippine territory and therefore beyond our jurisdictional power to
tax.
RULING:
Philippines being independent and sovereign, its authority may be exercised over its entire domain.
There is no portion thereof that is beyond its power. Within its limits, its decrees are supreme, its
commands paramount. Its laws govern therein, and everyone to whom it applies must submit to its
terms. That is the extent of its jurisdiction, both territorial and personal. Necessarily, likewise, it has
to be exclusive. If it were not thus, there is a diminution of its sovereignty.
It is to be admitted that any state may, by its consent, express or implied, submit to a restriction of its
sovereign rights. There may thus be a curtailment of what otherwise is a power plenary in character.
That is the concept of sovereignty as auto-limitation, which, in the succinct language of Jellinek, "is
the property of a state-force due to which it has the exclusive capacity of legal self-determination and
self-restriction."7 A state then, if it chooses to, may refrain from the exercise of what otherwise is
illimitable competence.
Its laws may as to some persons found within its territory no longer control. Nor does the matter end
there. It is not precluded from allowing another power to participate in the exercise of jurisdictional
right over certain portions of its territory. If it does so, it by no means follows that such areas become
impressed with an alien character. They retain their status as native soil. They are still subject to its
authority. Its jurisdiction may be diminished, but it does not disappear. So it is with the bases under
lease to the American armed forces by virtue of the military bases agreement of 1947. They are not
and cannot be foreign territory.
Chief Justice Taney, in an 1857 decision, 9 affirmed the fundamental principle of everyone within the
territorial domain of a state being subject to its commands: "For undoubtedly every person who is
found within the limits of a government, whether the temporary purposes or as a resident, is bound
by its laws." It is no exaggeration then for Justice Brewer to stress that the United States government
"is one having jurisdiction over every foot of soil within its territory, and acting directly upon each
[individual found therein]; . . ."10
As a matter of fact, the eminent commentator Hyde in his three-volume work on International Law,
as interpreted and applied by the United States, made clear that not even the embassy premises of
a foreign power are to be considered outside the territorial domain of the host state. Thus: "The
ground occupied by an embassy is not in fact the territory of the foreign State to which the premises
belong through possession or ownership. The lawfulness or unlawfulness of acts there committed is
determined by the territorial sovereign. If an attache commits an offense within the precincts of an
embassy, his immunity from prosecution is not because he has not violated the local law, but rather
for the reason that the individual is exempt from prosecution. If a person not so exempt, or whose
immunity is waived, similarly commits a crime therein, the territorial sovereign, if it secures custody
of the offender, may subject him to prosecution, even though its criminal code normally does not
contemplate the punishment of one who commits an offense outside of the national domain. It is not
believed, therefore, that an ambassador himself possesses the right to exercise jurisdiction, contrary
to the will of the State of his sojourn, even within his embassy with respect to acts there committed.
Nor is there apparent at the present time any tendency on the part of States to acquiesce in his
exercise of it."12
There is nothing in the Military Bases Agreement that lends support to such an assertion. It has not
become foreign soil or territory. This country's jurisdictional rights therein, certainly not excluding the
power to tax, have been preserved. As to certain tax matters, an appropriate exemption was
provided for.

G.R. No. L-36409 October 26, 1973 THE PEOPLE OF THE PHILIPPINES vs. LORETA GOZO

FACTS:

The accused bought a house and lot located inside the United States Naval Reservation within the
territorial jurisdiction of Olongapo City. She demolished the house and built another one in its place,
without a building permit from the City Mayor of Olongapo City, because she was told by one
Ernesto Evalle, an assistant in the City Mayor's office, as well as by her neighbors in the area, that
such building permit was not necessary for the construction of the house. On December 29, 1966,
Juan Malones, a building and lot inspector of the City Engineer's Office, Olongapo City, together with
Patrolman Ramon Macahilas of the Olongapo City police force apprehended four carpenters working
on the house of the accused and they brought the carpenters to the Olongapo City police
headquarters for interrogation. After due investigation, Loreta Gozo was charged with violation of
Municipal Ordinance No. 14, S. of 1964 with the City Fiscal's Office." She sentenced her to an
3

imprisonment of one month as well as to pay the costs.

ISSUE:

WON the said ordinance is applicable to her in view of the location of her dwelling within the naval
base.

RULING:

Much less is a reversal indicated because of the alleged absence of the rather novel concept of
administrative jurisdiction on the part of Olongapo City. Nor is novelty the only thing that may be said
against it. Far worse is the assumption at war with controlling and authoritative doctrines that the
mere existence of military or naval bases of a foreign country cuts deeply into the power to govern.
Two leading cases may be cited to show how offensive is such thinking to the juristic concept of
sovereignty, People v. Acierto, and Reagan v. Commissioner of Internal Revenue. As was so
12 13

emphatically set forth by Justice Tuason in Acierto: "By the Agreement, it should be noted, the
Philippine Government merely consents that the United States exercise jurisdiction in certain cases.
The consent was given purely as a matter of comity, courtesy, or expediency. The Philippine
Government has not abdicated its sovereignty over the bases as part of the Philippine territory or
divested itself completely of jurisdiction over offenses committed therein. Under the terms of the
treaty, the United States Government has prior or preferential but not exclusive jurisdiction of such
offenses. The Philippine Government retains not only jurisdictional rights not granted, but also all
such ceded rights as the United States Military authorities for reasons of their own decline to make
use of. The first proposition is implied from the fact of Philippine sovereignty over the bases; the
second from the express provisions of the treaty." There was a reiteration of such a view in
14

Reagan. Thus: "Nothing is better settled than that the Philippines being independent and sovereign,
its authority may be exercised over its entire domain. There is no portion thereof that is beyond its
power. Within its limits, its decrees are supreme, its commands paramount. Its laws govern therein,
and everyone to whom it applies must submit to its terms. That is the extent of its jurisdiction, both
territorial and personal. Necessarily, likewise, it has to be exclusive. If it were not thus, there is a
diminution of sovereignty." Then came this paragraph dealing with the principle of auto-limitation:
15

"It is to be admitted any state may, by its consent, express or implied, submit to a restriction of its
sovereign rights. There may thus be a curtailment of what otherwise is a power plenary in character.
That is the concept of sovereignty as auto-limitation, which, in the succinct language of Jellinek, "is
the property of a state-force due to which it has the exclusive capacity of legal self-determination and
self-restriction." A state then, if it chooses to, may refrain from the exercise of what otherwise is
illimitable competence." The opinion was at pains to point out though that even then, there is at the
16

most diminution of jurisdictional rights, not its disappearance. The words employed follow: "Its laws
may as to some persons found within its territory no longer control. Nor does the matter end there. It
is not precluded from allowing another power to participate in the exercise of jurisdictional right over
certain portions of its territory. If it does so, it by no means follows that such areas become
impressed with an alien character. They retain their status as native soil. They are still subject to its
authority. Its jurisdiction may be diminished, but it does not disappear. So it is with the bases under
lease to the American armed forces by virtue of the military bases agreement of 1947. They are not
and cannot be foreign territory."17