1. Primicias v. Ocampo, 93 Phil.

451

Substantive law creates, defines, and regulates rights and duties concerning life, liberty or property

Facts:
Petitioner was charged before the Court of First Instance of Manila with two statutory
offenses, namely,(1) with a violation of Commonwealth Act No. 606, in that he knowingly
chartered a vessel of Philippine registry to an alien without the approval of the President
of the Philippines and (2) with a violation of section 129 in relation to section 2713 of the
Revised Administrative Code in that he failed to submit to the Collector of Customs the
manifests and certain authenticated documents for the vessel "Antarctic" and failed to
obtain the necessary clearance from the Bureau of Customs prior to the departure of said
vessel for a foreign port. On April 23, 1952, before the trial of said criminal
cases, petitioner filed a motion praying that assessorsbe appointed to assist the court in
considering the questions of fact involved in said cases as authorized by section 49 of
Republic Act No. 409 which provides that "the aid of assessors in the trial of any civil or
criminal action in the Municipal Court, or the Court of First Instance, within the City, may
be invoked in the manner provided in the Code of Civil Procedure." This motion was opposed
by the City Fiscal. On April 28, 1952, the court issued an order denying the motion holding
in effect that with the promulgation of the Rules of Court by the Supreme Court, which
became effective on July 1, 1940, all rules concerning pleading, practice and procedure in
all courts of the Philippines previously existing were not only superseded but expressly
repealed. The Supreme Court, having been vested with the rule-making power, expressly
omitted the portions of the Code of Civil Procedure regarding assessors in said Rules of
Court. Believing that this order is erroneous, petitioner now comes to this court imputing
abuse of discretion to the respondent Judge.

Issues:
Whether or not the right of the petitioner to a trial with the aid of assessors is an
absolute substantive right, and the duty of the court to provide assessors is mandatory.

Ruling:
Yes, a trial with the aid of assessors is an absolute substantive right. The trial with
the aid of assessors as granted by section 154 of the Code of Civil Procedure and section
2477 of the old Charter of Manila are parts of substantive law and as such are
not embraced by the rule-making power of the Supreme Court. The aid may be invoked in
the manner provided in the Code of Civil Procedure, and this right has been declared
absolute and substantial by this Court in several cases where the aid of assessors had
beeninvoked. The intervention of the assessors is not an empty formality which may
be disregarded withoutviolating either the letter or the spirit of the law. It is another
security given by the law to the litigants,and as such, it is a substantial right of which they
cannot be deprived without vitiating all theproceedings.The contention of respondents we
reckon is predicated on the assumption that the provisions onassessors of the Code of
Civil Procedure had been impliedly repealed. Such is not the case. We havealready pointed
out that the basic provisions on the matter partake of the nature of substantive law and
as such they were left intact by the Supreme Court
Primicias vs Ocampo, G.R. No. L-6120, June 30, 1953 Facts: Petitioner was charged before the
Court of First Instance of Manila with two statutory offenses. On April 23, 1952, petitioner filed a
motion praying that assessors be appointed to assist the court in considering the questions of
fact involved in said cases as authorized by section 49 of Republic Act No. 409, otherwise
known as Revised Charter of the City of Manila, which provides that "the aid of assessors in the
trial of any civil or criminal action in the Municipal Court, or the Court of First Instance, within the
City, may be invoked in the manner provided in the Code of Civil Procedure." On April 28, 1952,
the court issued an order denying the motion holding in effect that with the promulgation of the
Rules of Court by the Supreme Court, which became effective on July 1, 1940, all rules
concerning pleading, practice and procedure in all courts of the Philippines previously existing
were not only superseded but expressly repealed, that the Supreme Court, having been vested
with the rule-making power, expressly omitted the portions of the Code of Civil Procedure
regarding assessors in said Rules of Court, and that the reference to said statute by section 49
of Republic Act No. 409 on the provisions regarding assessors should be deemed as a mere
surplusage.

Petitioner is now imputing abuse of discretion to the respondent Judge and further seeks to
prohibit respondent Judge from proceeding with the trial of two criminal cases without the
assistance of assessors in accordance with the provisions of section 49 of Republic Act No.
409.

Issue: Whether or not the right of the petitioner to a trial with the aid of assessors is a
substantive right, and being a substantive right, it cannot be impaired by the courts in the
exercise of its rule-making power.

Ruling: Yes. Rules of procedure should be distinguished from substantive law. A substantive
law creates, defines or regulates rights concerning life, liberty or

property, or the powers of agencies or instrumentalities for the administration of public affairs,
whereas rules of procedure are provisions prescribing the method by which substantive rights
may be enforced in courts of justice.

Substantive law creates substantive rights and the two terms in this respect may be said to be
synonymous. Substantive rights in a term which includes those rights which one enjoys under
the legal system prior to the disturbance of normal relations. (60 C.J. 980.)

Substantive law is that part of the law which creates, defines and regulates rights, or which
regulates the right and duties which give rise to a cause of action; that part of the law which
courts are established to administer; as opposed to adjective or remedial law, which prescribes
the method of enforcing rights or obtain redress for their invasions (36 C.J. 27; 52 C.J.S. 1026).

The trial with the aid of assessors as granted by section 154 of the Code of Civil Procedure and
section 2477 of the old Charter of Manila are parts of substantive law and as such are not
embraced by the rule-making power of the Supreme Court. This is so because in said section
154 this matter is referred to as a right given by law to a party litigant. Being substantive in
nature, it is not difficult to see why the provisions concerning trial by assessors embodied in the
Code of Civil Procedure have not been incorporated by the Supreme Court in the present Rules
of Court. To have done so, it would have been a travesty of its rule-making power which, by
direct mandate of the Constitution, is limited to matters referring to pleading, practice and
procedure. The application that the respondents draw from the failure to incorporate these
provisions in the present Rules of Court to the effect that the intention was to eliminate them or
repeal them all together cannot, therefore, stand in the light of the observations and authorities
we have above adverted to.
2. IN re CUNANAN, 94 PHIL. 534

 FACTS:

Congress passed Rep. Act No. 972, or what is known as the Bar
Flunkers Act, in 1952. The title of the law was, “An Act to Fix the Passing
Marks for Bar Examinations from 1946 up to and including 1955.”

Section 1 provided the following passing marks:

1946-1951………………70%

1952 …………………….71%

1953……………………..72%

1954……………………..73%

1955……………………..74%

Provided however, that the examinee shall have no grade lower than
50%.

Section 2 of the Act provided that “A bar candidate who obtained a grade
of 75% in any subject shall be deemed to have already passed that
subject and the grade/grades shall be included in the computation of the
general average in subsequent bar examinations.”

ISSUE:

Whether of not, R.A. No. 972 is constitutional .

RULING:

Section 2 was declared unconstitutional due to the fatal defect of not

being embraced in the title of the Act. As per its title, the Act should
affect only the bar flunkers of 1946 to 1955 Bar examinations.  Section2
establishes a permanent system for an indefinite time.  It was also struck
down for allowing partial passing, thus failing to take account of the fact
that laws and jurisprudence are not stationary.

As to Section1, the portion for 1946-1951 was declared unconstitutional,

while that for 1953 to 1955 was declared in force and effect.  The portion
that was stricken down was based under the following reasons:
1. The law itself admits that the candidates for admission who flunked
the bar from 1946 to 1952 had inadequate preparation due to the
fact that this was very close to the end of World War II;
 2. The law is, in effect, a judgment revoking the resolution of the court
on the petitions of the said candidates;
3. The law is an encroachment on the Court’s primary prerogative to
determine who may be admitted to practice of law and, therefore, in
excess of legislative power to repeal, alter and supplement the Rules
of Court. The rules laid down by Congress under this power are only
minimum norms, not designed to substitute the judgment of the court
on who can practice law; and
4. The pretended classification is arbitrary and amounts to class
legislation.

As to the portion declared in force and effect, the Court could not muster
enough votes to declare it void. Moreover, the law was passed in 1952,
to take effect in 1953. Hence, it will not revoke existing Supreme Court
resolutions denying admission to the bar of an petitioner.  The same may
also rationally fall within the power to Congress to alter, supplement or
modify rules of admission to the practice of law.

In re: Albino Cunanan, G.R. No. L-6784. March 18,

1954
In the Matter of the Petitions for Admission to the Bar of Unsuccessful Candidates of 1946 to 1953;
ALBINO CUNANAN
Resolution March 18, 1954

Facts:
Congress passed Republic Act Number 972, commonly known as the “Bar Flunkers’ Act of 1953.” In
accordance with the said law, the Supreme Court then passed and admitted to the bar those candidates
who had obtained an average of 72 per cent by raising it to 75 percent.
After its approval, many of the unsuccessful postwar candidates filed petitions for admission to the bar
invoking its provisions, while other motions for the revision of their examination papers were still pending
also invoked the aforesaid law as an additional ground for admission. There are also others who have
sought simply the reconsideration of their grades without, however, invoking the law in question. To avoid
injustice to individual petitioners, the court first reviewed the motions for reconsideration, irrespective of
whether or not they had invoked Republic Act No. 972.

Issue:
WON RA No. 972 is constitutional and valid?

Held:
RA No. 972 has for its object, according to its author, to admit to the Bar, those candidates who suffered
from insufficiency of reading materials and inadequate preparation.
In the judicial system from which ours has been evolved, the admission, suspension, disbarment and
reinstatement of attorneys at law in the practice of the profession and their supervision have been
indisputably a judicial function and responsibility. We have said that in the judicial system from which ours
has been derived, the admission, suspension, disbarment or reinstatement of attorneys at law in the
practice of the profession is concededly judicial.
The power of admitting an attorney to practice having been perpetually exercised by the courts, it having
been so generally held that the act of the court in admitting an attorney to practice is the judgment of the
court, and an attempt as this on the part of the Legislature to confer such right upon any one being most
exceedingly uncommon, it seems clear that the licensing of an attorney is and always has been a purely
judicial function, no matter where the power to determine the qualifications may reside.
On this matter, there is certainly a clear distinction between the functions of the judicial and legislative
departments of the government.
It is obvious, therefore, that the ultimate power to grant license for the practice of law belongs exclusively
to this Court, and the law passed by Congress on the matter is of permissive character, or as other
authorities may say, merely to fix the minimum conditions for the license.
3. Tileston v. Ullman, 318 U.S. 446

RULE:

A physician's claim that the lives of certain of his patients would be endangered by
child-bearing, unaccompanied by any claim under the Fourteenth Amendment of an
infringement of his own liberty or property rights, does not give him a standing to
question the constitutionality, as applied to himself, of a state statute prohibiting the
giving of advice as to the use of contraceptives.

FACTS:

The physician alleged that Conn. Gen. Stat. §§ 6246 and 6562, if applicable to him,
prevented his giving professional advice concerning the use of contraceptives to three
patients whose condition of health was such that their lives would have been
endangered by child-bearing, and that appellee law enforcement officers intended to
prosecute any offense against the statute and claimed that the proposed professional
advice constituted such an offense. The relief sought was a declaratory judgment as to
whether the statutes were applicable to the physician and if the statutes constituted a
valid exercise of constitutional power under U.S. Const. amend. XIV, prohibiting a state
from depriving any person of life without due process of law. The trial court ruled that
the statutes prohibited the action proposed to be done by the physician and were
constitutional. 

ISSUE:

Did the physician have standing to challenge, as a deprivation of life without due
process in violation of the Fourteenth Amendment, a state statute prohibiting the use of
drugs or instruments to prevent conception, and the giving of assistance or counsel in
their use, where the lives alleged to be endangered are those of patients who are not
parties to the suit?

ANSWER:

No.

CONCLUSION:

The court held that the proceedings in the state courts presented no constitutional
question that the physician had standing to assert. The sole constitutional attack upon
the statutes under the Fourteenth Amendment was confined to deprivation of life, not
the physician's but his patients'. Thus, the court dismissed the appeal.
Facts[edit]
The Appellee claimed that the appellant, a physician, committed such an offense for giving
professional advice concerning the use of contraceptives to three patients whose condition of health
was such that their lives would be endangered by child-bearing. The appellant contended that
because of the nature of his patients' exceptional condition in light of the danger child-bearing could
pose for them that this was a just reason for the advice to be authorized and necessary. However,
his complaint contained no allegations asserting any claim under the Fourteenth Amendment of
infringement of appellant's liberty or his property rights. The relief prayed was a declaratory judgment
as to whether the statutes are applicable to appellant and, if so, whether they constitute a valid
exercise of constitutional power "within the meaning and intent of Amendment XIV of
the Constitution of the United States prohibiting a state from depriving any person of life without due
process of law."[1]

Significance[edit]
The sole constitutional attack upon the statutes in question were under the Fourteenth Amendment
and confined the physician's contention for depravity of life—not appellant's but his patients'. Thus,
the life of the appellant himself was not in danger. No genuine case or controversy essential to the
exercise of the jurisdiction of the Court for this subject-matter existed until Griswold v. Connecticut.

Holding[edit]
The Supreme Court held that the proceedings in the state courts presented no constitutional
question which appellant had standing to assert. No question was raised as to the applicability and
constitutionality of the statutes in their application to the physician in respect to deprivation of liberty
or property in contravention of the Fourteenth Amendment. However, the court did not speak to
whether it had jurisdiction to enforce a law that prevents the use of contraceptives for the state
of Connecticut.

4. STRONGHOLD INSURANCE COMPANY, INC. vs. CUENCA, G.R. No. 173297,

March 6, 2013

FACTS:

Marañon filed a complaint with an application for the issuance of a writ of

preliminary attachment in the RTC against the Cuencas and Tayactac for the collection
of a sum of money and damages. The RTC granted the application for the issuance of
the writ of preliminary attachment conditioned upon the posting of a bond of P1 Million
executed in favor of the Cuencas. Marañon posted bond in the amount of P1 Million
issued by Stronghold Insurance.

Enforcing the writ of preliminary attachment, the sheriff levied upon the
equipment, supplies, materials and various other personal property belonging to Arc
Cuisine, Inc., to which the respondents where stockholders. But the levied properties
were ordered by the CA to be delivered back to the Cuencas and Tayactac due to the
damages sustained from the enforcement of the writ.

During the inventory, however, the levied properties were reportedly lost and
allegedly seen in a bakeshop owned by Maranon. Cuencas and Tayactac prayed that
said attached properties be immediately deliver to them; Stronghold Insurance be
directed to pay them the damages under the surety bond for P1 Million; Marañon be
held personally liable to them considering the insufficiency of the amount of the surety
bond; and the latter to be held liable for moral and exemplary damages, as well as
attorney's fees.
 The RTC held Marañon and Stronghold Insurance jointly and solidarily liable for
damages to the Cuencas and Tayactac. The CA affirmed the RTC decision.

ISSUE:

Whether the Cuencas and Tayactac recover damages arising from the wrongful
attachment of the assets of Arc Cuisine, Inc.

RULING:

            No. The SC held that the Cuencas and Tayactac cannot recover damages
because they are not the real-party in interest. To ensure the observance of the
mandate of the Constitution, Section 2, Rule 3 of the Rules of Court requires that unless
otherwise authorized by law or the Rules of Court every action must be prosecuted or
defended in the name of the real party in interest. Under the same rule, a real party in
interest is one who stands to be benefited or injured by the judgment in the suit, or one
who is entitled to the avails of the suit. Accordingly, a person , to be a real party in
interest in whose name an action must be prosecuted, should appear to be the present
real owner of the right sought to be enforced, that is, his interest must be a present
substantial interest, not a mere expectancy, or a future, contingent, subordinate, or
consequential interest.

There is no dispute that the properties subject to the levy on attachment

belonged to Arc Cuisine, Inc. alone, not to the Cuencas and Tayactac in their own right.
They were only stockholders of Arc Cuisine, Inc., which had a personality distinct and
separate from that of any or all of them. The damages occasioned to the properties by
the levy on attachment, wrongful or not, prejudiced Arc Cuisine, Inc., not them. As such,
only Arc Cuisine, Inc. had the right under the substantive law to claim and recover such
damages. This right could not also be asserted by the Cuencas and Tayactac unless
they did so in the name of the corporation itself. But that did not happen herein,
because Arc Cuisine, Inc. was not even joined in the action either as an original party or
as an intervenor.

The Cuencas and Tayactac were clearly not vested with any direct interest in the
personal properties coming under the levy on attachment by virtue alone of their being
stockholders in Arc Cuisine, Inc. Their stockholdings represented only their
proportionate or aliquot interest in the properties of the corporation, but did not vest in
them any legal right or title to any specific properties of the corporation. Without doubt,
Arc Cuisine, Inc. remained the owner as a distinct legal person.

Given the separate and distinct legal personality of Arc Cuisine, Inc., the
Cuencas and Tayactac lacked the legal personality to claim the damages sustained
from the levy of the former’s properties. According to Asset Privatization Trust v. Court
of Appeals, even when the foreclosure on the assets of the corporation was wrongful
and done in bad faith the stockholders had no standing to recover for themselves moral
damages; otherwise, they would be appropriating and distributing part of the
corporation’s assets prior to the dissolution of the corporation and the liquidation of its
debts and liabilities.
There is no dispute that the properties subject to the levy on attachment belonged to Arc Cuisine, Inc.
alone, not to the Cuencas and Tayactac in their own right. They were only stockholders of Arc Cuisine,
Inc., which had a personality distinct and separate from that of any or all of them. The damages
occasioned to the properties by the levy on attachment, wrongful or not, prejudiced Arc Cuisine, Inc.,
not them. As such, only Arc Cuisine, Inc. had the right under the substantive law to claim and recover
such damages. This right could not also be asserted by the Cuencas and Tayactac unless they did so in
the name of the corporation itself. But that did not happen herein, because Arc Cuisine, Inc. was not
even joined in the action either as an original party or as an intervenor. The Cuencas and Tayactac were
clearly not vested with any direct interest in the personal properties coming under the levy on
attachment by virtue alone of their being stockholders in Arc Cuisine, Inc. Their stockholdings
represented only their proportionate or aliquot interest in the properties of the corporation, but did not
vest in them any legal right or title to any specific properties of the corporation. Without doubt, Arc
Cuisine, Inc. remained the owner as a distinct legal person.

FACTS: Marañon filed a complaint in the RTC against the Cuencas for the collection of a sum of money
and damages. His complaint included an application for the issuance of a writ of preliminary attachment.
The RTC granted the application for the issuance of the writ of preliminary attachment conditioned upon
the posting of a bond of P1,000,000.00 executed in favor of the Cuencas, the complaint also implead
Tayactac, as a defendant. Maranion posted a bond, in the amount of one million, issued by Stronghold
Insurance. Hence, RTC issued the writ of preliminary attachment. Thus, sheriff levied DEAN’S CIRCLE
2019 – UST FACULTY OF CIVIL LAW 137 personal properties belonging to Arc Cuisines Inc., that were
found in the leased corporate office of the corporation. In defense, Cuencas filed a motion to dismiss
and to quash writ of preliminary attachment on the grounds that action involved intra-corporate
matters, which is within the jurisdiction of SEC. The RTC denied the motion, because the action was
recovery of sum of money. On appeal to CA, CA reversed the RTC, and remanded it back to determine
damages sustained by private respondents, from the enforcement of attachment. Based on the sheriff
report, the attached properties were missing, as the warehouse recommended by Maranon, is now
tenanted by a new lessee. Thus, the respondents filed a motion to require sheriff to deliver attached
properties and to set case for hearing, regarding recovery of damages amounting to 1,721,557.20, as
value of the lost attached properties. Petitioner filed a comment arguing that attached properties
belonged to Arc Cuisine, 50% of which owned by respondents, it should follow that 50% constituted
liquidated dividends, being liable only for 100,000.

ISSUE: Whether the Cuencas and Tayactac are real party in interest. (NO)

RULING: There is no dispute that the properties subject to the levy on attachment belonged to Arc
Cuisine, Inc. alone, not to the Cuencas and Tayactac in their own right. They were only stockholders of
Arc Cuisine, Inc., which had a personality distinct and separate from that of any or all of them. The
damages occasioned to the properties by the levy on attachment, wrongful or not, prejudiced Arc
Cuisine, Inc., not them. As such, only Arc Cuisine, Inc. had the right under the substantive law to claim
and recover such damages. This right could not also be asserted by the Cuencas and Tayactac unless
they did so in the name of the corporation itself. But that did not happen herein, because Arc Cuisine,
Inc. was not even joined in the action either as an original party or as an intervenor. The Cuencas and
Tayactac were clearly not vested with any direct interest in the personal properties coming under the
levy on attachment by virtue alone of their being stockholders in Arc Cuisine, Inc. Their stockholdings
represented only their proportionate or aliquot interest in the properties of the corporation, but did not
vest in them any legal right or title to any specific properties of the corporation. Without doubt, Arc
Cuisine, Inc. remained the owner as a distinct legal person. Given the separate and distinct legal
personality of Arc Cuisine, Inc., the Cuencas and Tayactac lacked the legal personality to claim the
damages sustained from the levy of the formers properties. According to Asset Privatization Trust v.
Court of Appeals, even when the foreclosure on the assets of the corporation was wrongful and done in
bad faith the stockholders had no standing to recover for themselves moral damages; otherwise, they
would be appropriating and distributing part of the corporations assets prior to the dissolution of the
corporation and the liquidation of its debts and liabilities. Moreover, in Evangelista v. Santos, the Court,
resolving whether or not the minority DEAN’S CIRCLE 2019 – UST FACULTY OF CIVIL LAW 138
stockholders had the right to bring an action for damages against the principal officers of the
corporation for their own benefit, said: As to the second question, the complaint shows that the action
is for damages resulting from mismanagement of the affairs and assets of the corporation by its
principal officer, it being alleged that defendants maladministration has brought about the ruin of the
corporation and the consequent loss of value of its stocks. The injury complained of is thus primarily to
the corporation, so that the suit for the damages claimed should be by the corporation rather than by
the stockholders (3 Fletcher, Cyclopedia of Corporation pp. 977-980). The stockholders may not directly
claim those damages for themselves for that would result in the appropriation by, and the distribution
among them of part of the corporate assets before the dissolution of the corporation and the liquidation
of its debts and liabilities, something which cannot be legally done in view of section 16 of the
Corporation Law, which provides: No corporation shall make or declare any stock or bond dividend or
any dividend whatsoever except from the surplus profits arising from its business, or divide or distribute
its capital stock or property other than actual profits among its members or stockholders until after the
payment of its debts and the termination of its existence by limitation or lawful dissolution. 
Development Bank of the Philippines vs. Hydro Resources Contractors Corporation, GR. No. 167603,
March 13, 2013

5. Paguia vs. Office of the President, 621 SCRA 600G.R. No. 176278 June 25, 2010

Principle involved: Suspension from the practice of law bars performance of“any activity, in or out of
court, which requires the applicationof law, legal procedure, knowledge, training and
experience.”Preparing a petition raising carefully crafted arguments one qual protection
grounds and employing highly legalistic rules of statutory construction falls within the proscribed
conduct.
Facts of the case:
Petitioner Alan F. Paguia filed this original action for the writ of certiorari to invalidate
President Gloria Macapagal-Arroyo’s nomination of respondent former Chief Justice Hilario G.
Davide, Jr. as Permanent Representative to the United Nations (UN) for violation of the
Section 23 of RA 7157 or the Philippine Foreign Service Act of 1991. Petitioner argues that
respondent’s age (70 yrs. old) at that time of his nomination disqualifies him from holding his post
because the mandatory retirement age of all officers and employees of the Department of Foreign
Affairs (DFA) is at 65. In their separate Comments, respondents Davide, theOffice of the
President, and the Secretary of Foreign Affairs questioned petitioner’s standing to bring the suit
because of his indefinite suspension from the practice of law. Relevant

Issue: Whether or not the indefinite suspension of petitioner from the practice of law
renders him incapacitated from bringing legal actions.

Decision of the Supreme Court: Yes.

An incapacity to bring
legal actions peculiar to
petitioner
also obtains. Petitioner’s
suspension from the
practice of law
bars him from
performing "any activity,
in or out of court,
which requires the
application of law,
legal procedure,
knowledge, training and
experience." Certainly,
preparing a
petition raising carefully
crafted arguments on equal
protection
grounds and employing
highly legalistic rules
of statutory
construction to parse
Section 23 of RA 7157
falls within the
proscribed conduct.
An incapacity to bring legal actions peculiar to petitioneralso obtains. Petitioner’s suspension from the
practice of lawbars him from performing "any activity, in or out of court,which requires the
application of law, legal procedure,knowledge, training and experience." Certainly, preparing
apetition raising carefully crafted arguments on equal protectiongrounds and employing highly
legalistic rules of statutory construction to parse Section 23 of RA 7157 falls within the proscribed
conduct.

6. Bengzon vs. Drilon, 208 SCRA 133

Presidential veto of provisions in the GAB relating to the use of savings for
augmenting items in the Judiciary’s appropriation impairs the power of the
Chief Justice to augment other items in its appropriation and is thus
repugnant to Fiscal Autonomy.

Bengzon vs. Drilon

FACTS:

In 1957, RA 1797 was enacted and provided for the adjustment of

pensions of retired Justices. Such privilege was extended to retired
members of Constitutional Commissions by RA 3595 and later to
retired members of the Armed Forces by PD 578. In 1975, Pres. Marcos
issued PD 644 which repealed the foregoing Acts. Shortly after, Pres.
Marcos restored automatic readjustment of pensions for retired
Armed Forces officers only. The apparent unfairness led Congress to
pass HB 16297 in 1990 to restore the repealed provisions by PD 644.
Pres. Aquino vetoed the HB. Meanwhile in 1991, PD 644, upon petition
of retired justices, was declared to be null and void for lack of a valid
publication pursuant to Tañada v. Tuvera. Pursuant to the ruling,
Congress included in the GAB of 1992 appropriations for the payment
of adjusted pension rates of the retired justices. Pres. Aquino vetoed
all that referred to the payment of said pension for the reason, among
others, that it nullified her veto of HB 16297 in 1990. It resulted into
the veto of portions of two sections in the appropriations for the
judiciary and of an entire section in the item on General Fund
Adjustments.

ISSUES:

(1) Did the President exceed her item-veto power accorded by the
Constitution (Art VI, Sec 27(2))?
(2) Do the presidential vetoes contravene the constitutional provision
on the Judiciary’s fiscal autonomy?

RULING:

(1) Yes. The power to disapprove any item or items in an appropriation

bill does not grant the authority to veto a part of an item and to
approve the remaining portion. In this case, portions of an item have
been chopped up into vetoed and unvetoed parts. Moreover, the
vetoed portions are not items. They are provisions.1 In addition, it turns
out PD 644 never became law, so it follows RA 1797 was not repealed
and thus continued to be effective. Hence, it can be seen that when
Pres. Aquino made the vetoes in question, she was actually vetoing RA
1797 which of course is beyond her power to accomplish.
She also in effect was vetoing this Court’s resolution in 1991 which, in
fine, declared RA 1797 to be effective. Such a veto is also of course
beyond her power to make. The President may not repeal a statute
nor may she set aside or reverse a final and executory judgment of this
Court through exercise of the veto power.

(2) Yes. Fiscal autonomy2 enjoyed by the Judiciary contemplates a

guarantee of full flexibility to allocate and utilize resources with the
wisdom and dispatch that their needs require. It recognizes the power
and authority to levy, assess and collect fees, fix rates of compensation
not exceeding the highest rates authorized by law xxx and pay plans of
the govt and allocate such sums as may be provided by law and
prescribed by them in the discharge of their functions. It means
freedom from outside control. In the case at bar, the veto of the
subject provisions (which relate to the use of savings for augmenting
items for the payment of the pension differentials) of the GAA is
tantamount to dictating to the Judiciary how its funds should be
utilized. The veto impairs the power of the Chief Justice to augment
other items in the Judiciary’s appropriation, in contravention of the
constitutional provision on “fiscal autonomy”.

1
  “Item” and “provision,” distinguished. An item in a bill x x x is an
indivisible sum of money dedicated to a stated purpose. [It] refers to the
particulars, the details, the distinct and severable parts x x x of the bill.
[It is] in itself a specific appropriation of money, not some general
provision of law (Bengzon v. Drilon, 208 SCRA 133, 143)
2
  Enjoyed also by the Constitutional Commissions and the Ombudsman