G.R. No. 165001. January 31, 2007.

said paragraph 19 (b), the period of appeal shall be thirty (30) days, a record of appeal being

NEW FRONTIER SUGAR CORPORATION, petitioner, vs. REGIONAL TRIAL

required. However, it should be noted that the Court issued A.M. No. 04-9-07-SC on

COURT, BRANCH 39, ILOILO CITY and EQUITABLE PCI BANK, respondents.

September 14, 2004, clarifying the proper mode of appeal in cases involving corporate
rehabilitation and intra-corporate controversies. It is provided therein that all decisions and

Corporation Law; Corporate Rehabilitation;Rehabilitation contemplates a continuance

final orders in cases falling under the Interim Rules of Corporate Rehabilitation and the

of corporate life and activities in an effort to restore and reinstate the corporation to its

Interim Rules of Procedure Governing Intra-Corporate Controversies under Republic Act No.

former position of successful operation and solvency.Rehabilitation contemplates a

8799 shall be appealed to the CA through a petition for review under Rule 43 of the Rules of

continuance of corporate life and activities in an effort to restore and reinstate the corporation

Court to be filed within fifteen (15) days from notice of the decision or final order of the RTC.

to its former position of successful operation and solvency. Presently, the applicable law on

Remedial Law; Certiorari; Certiorari is a remedy for the correction of errors of

rehabilitation petitions filed by corporations, partnerships or associations, including

jurisdiction, not errors of judgment; Since the issue is jurisdiction, an original action for

rehabilitation cases transferred from the Securities and Exchange Commission to the RTCs

certiorari may be directed against an interlocutory order of the lower court prior to an appeal

pursuant to Republic Act No. 8799 or the Securities Regulation Code, is the Interim Rules of

from the judgment or where there is no appeal or any plain, speedy or adequate remedy.

Procedure on Corporate Rehabilitation (2000).

The CA also correctly ruled that petitioner availed of the wrong remedy when it filed a special

Same; Same; Fact that there is a pending case for the annulment of the foreclosure

civil action for certiorariwith the CA under Rule 65 of the Rules of Court. Certiorari is a

proceedings and auction sales is of no moment; CA was correct in upholding the RTCs

remedy for the correction of errors of jurisdiction, not errors of judgment. It is an original and

dismissal of the petition for rehabilitation in view of the fact that the titles to petitioners

independent action that was not part of the trial that had resulted in the rendition of the

properties have already passed on to respondent bank and petitioner has no more assets to

judgment or order complained of. More importantly, since the issue is jurisdiction, an original

speak of.The fact that there is a pending case for the annulment of the foreclosure

action for certiorari may be directed against an interlocutory order of the lower court prior to

proceedings and auction sales is of no moment. Until a court of competent jurisdiction, which

an appeal from the judgment; or where there is no appeal or any plain, speedy or adequate

in this case is the RTC of Dumangas, Iloilo, Branch 68, annuls the foreclosure sale of the

remedy. A petition for certiorari should be filed not later than sixty days from the notice of

properties involved, petitioner is bereft of a valid title over the properties. In fact, it is the trial

judgment, order, or resolution, and a motion for reconsideration is generally required prior to

courts ministerial duty to grant a possessory writ over the properties. Consequently, the CA

the filing of a petition for certiorari, in order to afford the tribunal an opportunity to correct

was correct in upholding the RTCs dismissal of the petition for rehabilitation in view of the

the alleged errors.

fact that the titles to petitioners properties have already passed on to respondent bank and

PETITION for review on certiorari of a decision of the Court of Appeals.

petitioner has no more assets to speak of, specially since petitioner does not dispute the fact

The facts are stated in the opinion of the Court.

that the properties which were foreclosed by respondent bank comprise the bulk, if not the

Cornelio P. Panes for petitioner.

entirety, of its assets.

Darwin R. Bawar for respondent.

Same; Same; Appeals; All decisions and final orders in cases falling under the Interim
Rules of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-

AUSTRIA-MARTINEZ, J.:

Corporate Controversies under Republic Act No. 8799 shall be appealed to the CA through a
petition for review under Rule 43 of the Rules of Court to be filed within fifteen (15) days from
notice of the decision or final order of the RTC.A.M. No. 00-8-10-SC promulgated by the
Court on September 4, 2001 provides that a petition for rehabilitation is considered a special
proceeding given that it seeks to establish the status of a party or a particular fact.
Accordingly, the period of appeal provided in paragraph 19 (b) of the Interim Rules Relative
to the Implementation ofBatas Pambansa Blg. 129 for special proceedings shall apply. Under

In the present petition for review under Rule 45 of the Rules of Court, petitioner assails the
decision of the Court of Appeals (CA)1 in CA-G.R. SP No. 78673, dismissing its special civil
action for certiorari and affirming the dismissal orders dated January 13, 2003 and April 14,
2003 issued by the Regional Trial Court (RTC) of Iloilo City, Branch 39, acting as a special
commercial court, in Civil Case No. 02-27278.

As borne by the records, New Frontier Sugar Corporation (petitioner) is a domestic

THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN

corporation engaged in the business of raw sugar milling. Foreseeing that it cannot meet its

UPHOLDING THE FINDINGS OF THE SPECIAL COMMERCIAL COURT (RTC BR. 39,

obligations with its creditors as they fell due, petitioner filed a Petition for the Declaration of

ILOILO CITY), PREMATURELY EXCLUDING THE FORECLOSED PROPERTY OF

State of Suspension of Payments with Approval of Proposed Rehabilitation Plan under the

PETITIONER AND DECLARING THAT PETITIONER HAS NO SUBSTANTIAL

Interim Rules of Procedure on Corporate Rehabilitation (2000) some time in August

PROPERTY LEFT TO MAKE CORPORATE REHABILITATION FEASIBLE AS THERE

2002.2Finding the petition to be sufficient in form and substance, the RTC issued a Stay Order

IS AN ONGOING LITIGATION FOR THE ANNULMENT OF SUCH FORECLOSURE IN

dated August 20, 2002, appointing Manuel B. Clemente as rehabilitation receiver, ordering the

ANOTHER PROCEEDING.

latter to put up a bond, and setting the initial hearing on the petition.

(b)

One of petitioners creditors, the Equitable PCI Bank (respondent bank), filed a
Comment/Opposition with Motion to Exclude Property, alleging that petitioner is not qualified
for corporate rehabilitation, as it can no longer operate because it has no assets left.
Respondent bank also alleged that the financial statements, schedule of debts and liabilities,
inventory of assets, affidavit of general financial condition, and rehabilitation plan submitted
by petitioner are misleading and inaccurate since its properties have already been foreclosed
and transferred to respondent bank before the petition for rehabilitation was filed, and
petitioner, in fact, still owes respondent bank deficiency liability. 4
On January 13, 2003, the RTC issued an Omnibus Order terminating the proceedings and
dismissing the case.5 Petitioner filed an Omnibus Motion but this was denied by the RTC in its

THE COURT OF APPEALS ERRED IN DISMISSING THE PETITION FOR

CERTIORARI FILED BEFORE IT AS IMPROPER, APPEAL BEING AN AVAILABLE
REMEDY.9
The Court denies the petition.
Rehabilitation contemplates a continuance of corporate life and activities in an effort to
restore and reinstate the corporation to its former position of successful operation and
solvency.10 Presently, the applicable law on rehabilitation petitions filed by corporations,
partnerships or associations,11 including rehabilitation cases transferred from the Securities
and Exchange Commission to the RTCs pursuant to Republic Act No. 8799 or the Securities

Order dated April 14, 2003.6

Petitioner then filed with the CA a special civil action for certiorari, which was denied by
the CA per assailed Decision dated July 19, 2004, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
DISMISSING the petition filed in this case and AFFIRMING the orders assailed by the
petitioner.

Regulation Code,12 is the Interim Rules of Procedure on Corporate Rehabilitation (2000).

Under the Interim Rules, the RTC, within five (5) days from the filing of the petition for
rehabilitation and after finding that the petition is sufficient in form and substance, shall issue
a Stay Order appointing a Rehabilitation Receiver, suspending enforcement of all claims,
prohibiting transfers or encumbrances of the debtors properties, prohibiting payment of
outstanding liabilities, and prohibiting the withholding of supply of goods and services from

SO ORDERED.7
In dismissing the petition, the CA sustained the findings of the RTC that since petitioner no
longer has sufficient assets and properties to continue with its operations and answer its
corresponding liabilities, it is no longer eligible for rehabilitation. The CA also ruled that even
if the RTC erred in dismissing the petition, the same could not be corrected anymore because
what petitioner filed before the CA was a special civil action for certiorari under Rule 65 of
the Rules of Court instead of an ordinary appeal.8
Hence, herein petition based on the following reasons:

the debtor.13 Any transfer of property or any other conveyance, sale, payment, or agreement
made in violation of the Stay Order or in violation of the Rules may be declared void by the
court upon motion ormotu proprio.14
Further, the Stay Order is effective both against secure and unsecured creditors. This is in
harmony with the principle of equality is equity first enunciated in Alemars Sibal & Sons,
Inc. v. Elbinias,15thus:
During rehabilitation receivership, the assets are held in trust for the equal benefit of all
creditors to preclude one from obtaining an advantage or preference over another by the

(a)

expediency of an attachment, execution or otherwise. For what would prevent an alert creditor,
upon learning of the receivership, from rushing posthaste to the courts to secure judgments for
the satisfaction of its claims to the prejudice of the less alert creditors.

As between creditors, the key phrase is equality is equity. When a corporation

threatened by bankruptcy is taken over by a receiver, all the creditors should stand on an equal

does not dispute the fact that the properties which were foreclosed by respondent bank
comprise the bulk, if not the entirety, of its assets.

footing. Not anyone of them should be given any preference by paying one or some of them

It should be stressed that the Interim Rules was enacted to provide for a summary and

ahead of the others. This is precisely the reason for the suspension of all pending claims

non-adversarial rehabilitation proceedings.21 This is in consonance with the commercial nature

against the corporation under receivership. Instead of creditors vexing the courts with suits

of a rehabilitation case, which is aimed to be resolved expeditiously for the benefit of all the

against the distressed firm, they are directed to file their claims with the receiver who is a duly

parties concerned and the economy in general.

appointed officer of the SEC. (Emphasis supplied)

As provided in the Interim Rules, the basic procedure is as follows:

Nevertheless, the suspension of the enforcement of all claims against the corporation is subject
to the rule that it shall commence only from the time the Rehabilitation Receiver is

1. (1)The petition is filed with the appropriate Regional Trial Court; 22

appointed. Thus, inRizal Commercial Banking Corporation v. Intermediate Appellate

2. (2)If the petition is found to be sufficient in form and substance, the trial court shall

16

Court, the Court upheld the right of RCBC to extrajudicially foreclose the mortgage on some

issue a Stay Order, which shall provide, among others, for the appointment of a

of BF Homes properties, and reinstated the trial courts judgment ordering the sheriff to

Rehabilitation Receiver; the fixing of the initial hearing on the petition; a directive

execute and deliver to RCBC the certificate of auction sale involving the properties. The Court

to the petitioner to publish the Order in a newspaper of general circulation in the

vacated its previous Decision rendered on September 14, 1992 in the same case, finding that

Philippines once a week for two (2) consecutive weeks; and a directive to all

RCBC can rightfully move for the extrajudicial foreclosure of the mortgage since it was done

creditors and all interested parties (including the Securities and Exchange

on October 16, 1984, while the management committee was appointed only on March 18,

Commission) to file and serve on the debtor a verified comment on or opposition

1985. The Court also took note of the SECs denial of the petitioners consolidated motion to

to the petition, with supporting affidavits and documents.23

cite the sheriff and RCBC for contempt and to annul the auction proceedings and sale.
In this case, respondent bank instituted the foreclosure proceedings against petitioners

1. 3)Publication of the Stay Order;

properties on March 13, 2002 and a Certificate of Sale at Public Auction was issued on May 6,

2. 4)Initial hearing on any matter relating to the petition or on any comment and/or

2002, with respondent bank as the highest bidder. The mortgage on petitioners chattels was

opposition filed in connection therewith. If the trial court is satisfied that there

likewise foreclosed and the Certificate of Sale was issued on May 14, 2002. It also appears

is merit in the petition, it shall give due course to the petition;24

that titles over the properties have already been transferred to respondent bank.17
On the other hand, the petition for corporate rehabilitation was filed only on August 14,

3. 5)Referral for evaluation of the rehabilitation plan to the rehabilitation receiver who
shall submit his recommendations to the court;25

2002 and the Rehabilitation Receiver appointed on August 20, 2002. Respondent bank,

4. 6)Modifications or revisions of the rehabilitation plan as necessary; 26

therefore, acted within its prerogatives when it foreclosed and bought the property, and had

5. 7)Submission of final rehabilitation plan to the trial court for approval; 27

title transferred to it since it was made prior to the appointment of a rehabilitation receiver.

6. 8)Approval/disapproval of rehabilitation plan by the trial court; 28

The fact that there is a pending case for the annulment of the foreclosure proceedings and
auction sales18 is of no moment. Until a court of competent jurisdiction, which in this case is

In the present case, the petition for rehabilitation did not run its full course but was dismissed

the RTC of Dumangas, Iloilo, Branch 68, annuls the foreclosure sale of the properties

by the RTC after due consideration of the pleadings filed before it. On this score, the RTC

involved, petitioner is bereft of a valid title over the properties. In fact, it is the trial courts

cannot be faulted for its summary dismissal, as it is tantamount to a finding that there is no

ministerial duty to grant a possessory writ over the properties.20

merit to the petition. This is in accord with the trial courts authority to give due course to the

19

Consequently, the CA was correct in upholding the RTCs dismissal of the petition for

petition or not under Rule 4, Section 9 of the Interim Rules. Letting the petition go through the

rehabilitation in view of the fact that the titles to petitioners properties have already passed on

process only to be dismissed later on because there are no assets to be conserved will not only

to respondent bank and petitioner has no more assets to speak of, specially since petitioner

defeat the reason for the rules but will also be a waste of the trial courts time and resources.

The CA also correctly ruled that petitioner availed of the wrong remedy when it filed a
special civil action for certiorari with the CA under Rule 65 of the Rules of Court.
Certiorari is a remedy for the correction of errors of jurisdiction, not errors of judgment.

Note.A petition for certiorari seeks to correct errors of jurisdiction while a petition for
review seeks to correct errors of judgment committed by the court. (Microsoft Corporation vs.
Best Deal Computer Center Corporation, 389 SCRA 615 [2002])

It is an original and independent action that was not part of the trial that had resulted in the
rendition of the judgment or order complained of. More importantly, since the issue is
jurisdiction, an original action for certiorari may be directed against an interlocutory order of
the lower court prior to an appeal from the judgment; or where there is no appeal or any plain,
speedy or adequate remedy. A petition for certiorari should be filed not later than sixty days
from the notice of judgment, order, or resolution, and a motion for reconsideration is generally
required prior to the filing of a petition forcertiorari, in order to afford the tribunal an
opportunity to correct the alleged errors.29
The Omnibus Order dated January 13, 2003 issued by the RTC is a final order since it
terminated the proceedings and dismissed the case before the trial court; it leaves nothing
more to be done. As such, petitioners recourse is to file an appeal from the Omnibus Order.
In this regard, A.M. No. 00-8-10-SC promulgated by the Court on September 4, 2001
provides that a petition for rehabilitation is considered a special proceeding given that it seeks
to establish the status of a party or a particular fact. Accordingly, the period of appeal provided
in paragraph 19 (b) of the Interim Rules Relative to the Implementation of Batas Pambansa
Blg. 129 for special proceedings shall apply. Under said paragraph 19 (b), the period of appeal
shall be thirty (30) days, a record of appeal being required.
However, it should be noted that the Court issued A.M. No. 04-9-07-SC on September 14,
2004, clarifying the proper mode of appeal in cases involving corporate rehabilitation and
intra-corporate controversies. It is provided therein that all decisions and final orders in cases
falling under the Interim Rules of Corporate Rehabilitation and the Interim Rules of Procedure
Governing Intra-Corporate Controversies under Republic Act No. 8799 shall be appealed to
the CA through a petition for review under Rule 43 of the Rules of Court to be filed within
fifteen (15) days from notice of the decision or final order of the RTC.
In any event, as previously stated, since what petitioner filed was a petition
for certiorari under Rule 65 of the Rules, the CA rightly dismissed the petition and affirmed
the assailed Orders.
WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioner.
SO ORDERED.
Ynares-Santiago (Chairperson), Callejo, Sr. andChico-Nazario, JJ., concur.
Petition denied.

o0o

G.R. No. 171545. December 19, 2007.*

EQUITABLE

PCI

BANK,** AIMEE

YU

and

BEJAN

law. For a petition for certiorari premised on grave abuse of discretion to prosper, petitioner
LIONEL

APAS,

must show that the public respondent patently and grossly abused his discretion and that abuse

petitioners, vs. NG SHEUNG NGOR doing business under the name and style KEN

amounted to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law

MARKETING, KEN APPLIANCE DIVISION, INC. and BENJAMIN E. GO,

or to act at all in contemplation of law, as where the power was exercised in an arbitrary and

respondents.

despotic manner by reason of passion or hostility.

***

Petitions for Relief; A petition for relief under Rule 38 is an equitable remedy allowed
Actions; Forum Shopping; There is no forum shopping where a partys petition for

only in exceptional circumstances or where there is no other available or adequate remedy.

relief in the Regional Trial Court (RTC) and its petition for certiorari in the CA did not have

Although Equitable filed a petition for relief from the March 24, 2004 order, that petition was

identical causes of action; In a petition for relief, the judgment or final order is rendered by a

not a plain, speedy and adequate remedy in the ordinary course of law. A petition for relief

court with competent jurisdiction, while in a petition for certiorari, the order is rendered by a

under Rule 38 is an equitable remedy allowed only in exceptional circumstances or where

court without or in excess of its jurisdiction.Forum shopping exists when two or more

there is no other available or adequate remedy.

actions involving the same transactions, essential facts and circumstances are filed and those

Certiorari; Appeals; The jurisdiction of the Supreme Court in Rule 45 petitions is

actions raise identical issues, subject matter and causes of action. The test is whether, in two or

limited to questions of law.The jurisdiction of this Court in Rule 45 petitions is limited to

more pending cases, there is identity of parties, rights or causes of actions and reliefs.

questions of law. There is a question of law when the doubt or controversy concerns the

Equitables petition for relief in the RTC and its petition for certiorari in the CA did not have

correct application of law or jurisprudence to a certain set of facts; or when the issue does not

identical causes of action. The petition for relief from the denial of its notice of appeal was

call for the probative value of the evidence presented, the truth or falsehood of facts being

based on the RTCs judgment or final order preventing it from taking an appeal by fraud,

admitted.

accident, mistake or excusable negligence. On the other hand, its petition for certiorar ri in

Contracts; Contracts of Adhesion; Words and Phrases; A contract of adhesion is a

the CA, a special civil action, sought to correct the grave abuse of discretion amounting to lack

contract whereby almost all of its provisions are drafted by one party and the participation of

of jurisdiction committed by the RTC. In a petition for relief, the judgment or final order is

the other party is limited to affixing his signature or his adhesion to the contract; It is

rendered by a court with competent jurisdiction. In a petition for certiorari, the order is

erroneous to conclude that contracts of adhesion are invalid per sethey are as binding as

rendered by a court without or in excess of its jurisdiction.

ordinary contracts.A contract of adhesion is a contract whereby almost all of its provisions

Same; Same; A party substantially complied with the rule on non-forum shopping when

are drafted by one party. The participation of the other party is limited to affixing his signature

it moved to withdraw its petition for relief in the Regional Trial Court (RTC) on the same day

or his adhesion to the contract. For this reason, contracts of adhesion are strictly construed

it filed the petition for certiorari in the Court of Appeals.Equitable substantially complied

against the party who drafted it. It is erroneous, however, to conclude that contracts of

with the rule on non-forum shopping when it moved towithdraw its petition for relief in the

adhesion are invalid per se. They are, on the contrary, as binding as ordinary contracts. A

RTC on the same day (in fact just four hours and forty minutes after) it filed the petition for

party is in reality free to accept or reject it. A contract of adhesion becomes void only when

certiorari in the CA. Even if Equitable failed to disclose that it had a pending petition for relief

the dominant party takes advantage of the weakness of the other party, completely depriving

in the RTC, it rectified what was doubtlessly a careless oversight by withdrawing the petition

the latter of the opportunity to bargain on equal footing.

for relief just a few hours after it filed its petition for certiorari in the CAa clear indication
that it had no intention of maintaining the two actions at the same time.

Same; Escalation Clauses; Principle of Mutuality of Contracts; Escalation clauses are

not void per se but one which grants the creditor an unbridled right to adjust the interest

Certiorari; Two Substantial Requirements in a Petition for Certiorari.There are two

independently and upwardly, completely depriving the debtor of the right to assent to an

substantial requirements in a petition for certiorari. These are: 1. that the tribunal, board or

important modification in the agreement is voidclauses of that nature violate the principle

officer exercising judicial or quasi-judicial functions acted without or in excess of his or its

of mutuality of contracts.Escalation clauses are not void per se. However, one which grants

jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; and

the creditor an unbridled right to adjust the interest independently and upwardly, completely

2. that there is no appeal or any plain, speedy and adequate remedy in the ordinary course of

depriving the debtor of the right to assent to an important modification in the agreement is

void. Clauses of that nature violate the principle of mutuality of contracts. Article 1308 of the

suffered, not to impose a penalty to the wrongdoer. To be entitled to moral damages, a

Civil Code holds that a contract must bind both contracting parties; its validity or compliance

claimant must prove: 1. That he or she suffered besmirched reputation, or physical, mental or

cannot be left to the will of one of them. For this reason, we have consistently held that a valid

psychological suffering sustained by the claimant; 2. That the defendant committed a wrongful

escalation clause provides: 1. that the rate of interest will only be increased if the applicable

act or omission; 3. That the wrongful act or omission was the proximate cause of the damages

maximum rate of interest is increased by law or by the Monetary Board; and 2. that the

the claimant sustained; 4. The case is predicated on any of the instances expressed or

stipulated rate of interest will be reduced if the applicable maximum rate of interest is reduced

envisioned by Article 2219 and 2220.

by law or by the Monetary Board (de-escalation clause).

Banks and Banking; The relationship between a bank and its depositor is that of

Same; Same; Where the escalation clause is annulled, the principal amount of the loan

creditor and debtora bank has the right to setoff the deposits in its hands for the payment of

is subject to the original or stipulated rate of interest.With regard to the proper rate of

a depositors indebtedness.The relationship between a bank and its depositor is that of

interest, in New Sampaguita Builders v. Philippine National Bank, 435 SCRA 565 (2004), we

creditor and debtor. For this reason, a bank has the right to set-off the deposits in its hands for

held that, because the escalation clause was annulled, the principal amount of the loan was

the payment of a depositors indebtedness. Respondents indeed defaulted on their obligation.

subject to the original or stipulated rate of interest. Upon maturity, the amount due was subject

For this reason, Equitable had the option to exercise its legal right to set-off or compensation.

to legal interest at the rate of 12% per annum.

However, the RTC mistakenly (or, as it now appears, deliberately) concluded that Equitable

Same; Same; Extraordinary Inflation or Deflation;Words and Phrases; Extraordinary

acted fraudulently or in bad faith or in wanton disregard of its contractual obligations

Inflation and Extraordinary Deflation, Defined.Extraordinary inflation exists when

despite the absence of proof. The undeniable fact was that, whatever damage respondents

there is an unusual decrease in the purchasing power of currency (that is, beyond the common

sustained was purely the consequence of their failure to pay their loans. There was therefore

fluctuation in the value of currency) and such decrease could not be reasonably foreseen or

absolutely no basis for the award of moral damages to them.

was manifestly beyond the contemplation of the parties at the time of the obligation.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

Extraordinary deflation, on the other hand, involves an inverse situation.

The facts are stated in the opinion of the Court.

Same; Same; Same; Requisites; Despite the devaluation of the peso, the Bangko Sentral
ng Pilipinas (BSP) never declared a situation of extraordinary inflation. Moreover, although

Angara, Abello, Concepcion, Regala & Cruz for petitioners.

Hilario P. Davide III for respondents.

the obligation in this instance arose out of a contract, the parties did not agree to recognize
the effects of extraordinary inflation (or deflation).For extraordinary inflation (or deflation)
to affect an obligation, the following requisites must be proven: 1. that there was an official
declaration of extraordinary inflation or deflation from the Bangko Sentral ng Pilipinas (BSP);
2. that the obligation was contractual in nature; and 3. that the parties expressly agreed to
consider the effects of the extraordinary inflation or deflation. Despite the devaluation of the
peso, the BSP never declared a situation of extraordinary inflation. Moreover, although the
obligation in this instance arose out of a contract, the parties did not agree to recognize the
effects of extraordinary inflation (or deflation). The RTC never mentioned that there was a
such stipulation either in the promissory note or loan agreement. Therefore, respondents
should pay their dollar-denominated loans at the exchange rate fixed by the BSP on the date of
maturity.
Damages; Moral damages are in the category of an award designed to compensate the
claimant for actual injury suffered, not to impose a penalty to the wrongdoer.Moral
damages are in the category of an award designed to compensate the claimant for actual injury

CORONA, J.:
This petition for review on certiorari1 seeks to set aside the decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 83112 and its resolution3 denying reconsideration.
On October 7, 2001, respondents Ng Sheung Ngor,4Ken Appliance Division, Inc. and
Benjamin E. Go filed an action for annulment and/or reformation of documents and
contracts5 against petitioner Equitable PCI Bank (Equitable) and its employees, Aimee Yu and
Bejan Lionel Apas, in the Regional Trial Court (RTC), Branch 16 of Cebu City. 6 They
claimed that Equitable induced them to avail of its peso and dollar credit facilities by offering
low interest rates7 so they accepted Equitables proposal and signed the banks preprinted
promissory notes on various dates beginning 1996. They, however, were unaware that the
documents contained identical escalation clauses granting Equitable authority to increase
interest rates without their consent.8

Equitable, in its answer, asserted that respondents knowingly accepted all the terms and

1. 2)8% per annum for the dollar loans. The basis for the payment of the dollar

conditions contained in the promissory notes.9 In fact, they continuously availed of and

obligation is the conversion rate of P26.50 per dollar availed of at the time of

10

benefited from Equitables credit facilities for five years.

incurring of the obligation in accordance with Article 1250 of the Civil Code of the

After trial, the RTC upheld the validity of the promissory notes. It found that, in 2001
alone, Equitable restructured respondents loans amounting to US$228,200 and P 1,000,000.

Philippines;

11

1. H)Dismissing [Equitables] counterclaim except the payment of the aforestated

__The trial court, however, invalidated the escalation clause contained therein because it

unpaid principal loan obligations and interest.

violated the principle of mutuality of contracts.12 Nevertheless, it took judicial notice of the
steep depreciation of the peso during the intervening period13 and declared the existence of

SO ORDERED.19

extraordinary deflation.14 Consequently, the RTC ordered the use of the 1996 dollar exchange

Equitable and respondents filed their respective notices of appeal.20

15

rate in computing respondents dollar-denominated loans. Lastly, because the business

In the March 1, 2004 order of the RTC, both notices were denied due course because

reputation of respondents was (allegedly) severely damaged when Equitable froze their

Equitable and respondents failed to submit proof that they paid their respective appeal

accounts,16 the trial court awarded moral and exemplary damages to them.17

fees.21
WHEREFORE, premises considered, the appeal interposed by defendants from the Decision

The dispositive portion of the February 5, 2004 RTC decision18 provided:

WHEREFORE, premises considered, judgment is hereby rendered:

in the above-entitled case isDENIED due course. As of February 27, 2004, the Decision
dated February 5, 2004, is considered final and executory in so far as [Equitable, Aimee
Yu and Bejan Lionel Apas] are concerned. 22 (emphasis supplied)

1. A)Ordering [Equitable] to reinstate and return the amount of [respondents] deposit

placed on hold status;
2. B)Ordering [Equitable] to pay [respondents] the sum of P12 [m]illion [p]esos as
moral damages;
3. C)Ordering [Equitable] to pay [respondents] the sum of P10 [m]illion [p]esos as
exemplary damages;

Equitable moved for the reconsideration of the March 1, 2004 order of the RTC 23 on the
ground that it did in fact pay the appeal fees. Respondents, on the other hand, prayed for the
issuance of a writ of execution.24
On March 24, 2004, the RTC issued an omnibus order denying Equitables motion for
reconsideration for lack of merit25 and ordered the issuance of a writ of execution in favor of
respondents.26 According to the RTC, because respondents did not move for the

4. D)Ordering defendants Aimee Yu and Bejan [Lionel] Apas to pay [respondents],

reconsideration of the previous order (denying due course to the parties notices of

jointly and severally, the sum of [t]wo [m]illion [p]esos as moral and exemplary

appeal),27 the February 5, 2004 decision became final and executory as to both parties and a

damages;

writ of execution against Equitable was in order.28

5. E)Ordering [Equitable, Aimee Yu and Bejan Lionel Apas], jointly and severally, to
pay [respondents] attorneys fees in the sum of P300,000; litigation expenses in
the sum of P50,000 and the cost of suit;
6. F)Directing plaintiffs Ng Sheung Ngor and Ken Marketing to pay [Equitable] the
unpaid principal obligation for the peso loan as well as the unpaid obligation for
the dollar denominated loan;
7. G)Directing plaintiff Ng Sheung Ngor and Ken 1)12% per annum for the peso
loans;

A writ of execution was thereafter issued29 and three real properties of Equitable were
levied upon.30
On March 26, 2004, Equitable filed a petition for relief in the RTC from the March 1,
2004 order.31 It, however, withdrew that petition on March 30, 2004 32and instead filed a
petition for certiorari with an application for an injunction in the CA to enjoin the
implementation and execution of the March 24, 2004 omnibus order.33
On June 16, 2004, the CA granted Equitables application for injunction. A writ of preliminary
injunction was correspondingly issued.34

Notwithstanding the writ of injunction, the properties of Equitable previously levied upon

In a petition for relief, the judgment or final order is rendered by a court with competent

were sold in a public auction on July 1, 2004. Respondents were the highest bidders and

jurisdiction. In a petition for certiorari, the order is rendered by a court without or in excess of

certificates of sale were issued to them.35

its jurisdiction.

On August 10, 2004, Equitable moved to annul the July 1, 2004 auction sale and to cite

Moreover, Equitable substantially complied with the rule on non-forum shopping when it

the sheriffs who conducted the sale in contempt for proceeding with the auction despite the

moved to withdraw its petition for relief in the RTC on the same day (in fact just four hours

injunction order of the CA.36

and forty minutes after) it filed the petition for certiorari in the CA. Even if Equitable failed to
37

On October 28, 2005, the CA dismissed the petition for certiorari. It found Equitable

disclose that it had a pending petition for relief in the RTC, it rectified what was doubtlessly a

guilty of forum shopping because the bank filed its petition for certiorari in the CA several

careless oversight by withdrawing the petition for relief just a few hours after it filed its

38

hours before withdrawing its petition for relief in the RTC. Moreover, Equitable failed to

petition for certiorari in the CAa clear indication that it had no intention of maintaining the

disclose, both in the statement of material dates and certificate of non-forum shopping

two actions at the same time.

(attached to its petition for certiorari in the CA), that it had a pending petition for relief in the

The

39

Trial

of

RTC.

40

41

Discretion

Court
in

Committed
Issuing

its

Grave
March

Abuse
1,

2004

and March 24, 2004 Orders

Equitable moved for reconsideration but it was denied. Thus, this petition.
Equitable asserts that it was not guilty of forum shopping because the petition for relief was

Section 1, Rule 65 of the Rules of Court provides:

withdrawn on the same day the petition for certiorari was filed. It likewise avers that its

Section 1. Petition for Certiorari.When any tribunal, board or officer exercising judicial

petition for certiorari was meritorious because the RTC committed grave abuse of discretion in

or quasi-judicial function has acted without or in excess of its or his jurisdiction, or with

issuing the March 24, 2004 omnibus order which was based on an erroneous assumption. The

grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no

March 1, 2004 order denying its notice of appeal for non payment of appeal fees was

appeal, nor any plain, speedy or adequate remedy in the ordinary course of law, a person

42

43

erroneous because it had in fact paid the required fees. Thus, the RTC, by issuing its March

aggrieved thereby may file a verified petition in the proper court, alleging the facts with

24, 2004 omnibus order, effectively prevented Equitable from appealing the patently wrong

certainty and praying that judgment be rendered annulling or modifying the proceedings of

February 5, 2004 decision.

44

such tribunal, board or officer, and granting such incidental reliefs as law and justice may
require.

This petition is meritorious.

Equitable

Was

Not

Guilty

The petition shall be accompanied by a certified true copy of the judgment, order or

of Forum Shopping

resolution subject thereof, copies of all pleadings and documents relevant and pertinent

Forum shopping exists when two or more actions involving the same transactions, essential

thereto, and a sworn certificate of non-forum shopping as provided in the third paragraph of

facts and circumstances are filed and those actions raise identical issues, subject matter and

Section 3, Rule 46.

45

causes of action. The test is whether, in two or more pending cases, there is identity of
parties, rights or causes of actions and reliefs.

There are two substantial requirements in a petition for certiorari. These are:

46

Equitables petition for relief in the RTC and its petition for certiorari in the CA did not

1. 1.that the tribunal, board or officer exercising judicial or quasi-judicial functions

have identical causes of action. The petition for relief from the denial of its notice of appeal

acted without or in excess of his or its jurisdiction or with grave abuse of

was based on the RTCs judgment or final order preventing it from taking an appeal by fraud,
47

accident, mistake or excusable negligence. On the other hand, its petition for certiorari in
the CA, a special civil action, sought to correct the grave abuse of discretion amounting to lack
of jurisdiction committed by the RTC.

discretion amounting to lack or excess of jurisdiction; and

2. 2.that there is no appeal or any plain, speedy and adequate remedy in the ordinary
course of law.

48

For a petition for certiorari premised on grave abuse of discretion to prosper, petitioner must
show that the public respondent patently and grossly abused his discretion and that abuse

amounted to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law

The Promissory Notes Were Valid

or to act at all in contemplation of law, as where the power was exercised in an arbitrary and

The RTC upheld the validity of the promissory notes despite respondents assertion that those

despotic manner by reason of passion or hostility.

49

documents were contracts of adhesion.

The March 1, 2004 order denied due course to the notices of appeal of both Equitable and

A contract of adhesion is a contract whereby almost all of its provisions are drafted by one

respondents. However, it declared that the February 5, 2004 decision was final and executory

party.58 The participation of the other party is limited to affixing his signature or his

only with respect to Equitable. As expected, the March 24, 2004 omnibus order denied

adhesion to the contract.59 For this reason, contracts of adhesion are strictly construed

Equitables motion for reconsideration and granted respondents motion for the issuance of a

against the party who drafted it.60

50

writ of execution.51

It is erroneous, however, to conclude that contracts of adhesion are invalid per se. They

The March 1, 2004 and March 24, 2004 orders of the RTC were obviously intended to

are, on the contrary, as binding as ordinary contracts. A party is in reality free to accept or

prevent Equitable, et al. from appealing the February 5, 2004 decision. Not only that. The

reject it. A contract of adhesion becomes void only when the dominant party takes advantage

execution of the decision was undertaken with indecent haste, effectively obviating or

of the weakness of the other party, completely depriving the latter of the opportunity to

defeating Equitables right to avail of possible legal remedies. No matter how we look at it, the

bargain on equal footing.61

That was not the case here. As the trial court noted, if the terms and conditions offered by

RTC committed grave abuse of discretion in rendering those orders.

With regard to whether Equitable had a plain, speedy and adequate remedy in the ordinary

Equitable had been truly prejudicial to respondents, they would have walked out and

course of law, we hold that there was none. The RTC denied due course to its notice of appeal

negotiated with another bank at the first available instance. But they did not. Instead, they

in the March 1, 2004 order. It affirmed that denial in the March 24, 2004 omnibus order.

continuously availed of Equitables credit facilities for five long years.

Hence, there was no way Equitable could have possibly appealed the February 5, 2004

While the RTC categorically found that respondents had outstanding dollar- and peso-

decision.52

denominated loans with Equitable, it, however, failed to ascertain the total amount due

Although Equitable filed a petition for relief from the March 24, 2004 order, that petition was

(principal, interest and penalties, if any) as of July 9, 2001. The trial court did not explain how

not a plain, speedy and adequate remedy in the ordinary course of law. A petition for relief

it arrived at the amounts of US$228,200 and P 1,000,000. 62 In Metro Manila Transit

under Rule 38 is an equitable remedy allowed only in exceptional circumstances or where

Corporation v. D.M. Consortium,63 we reiterated that this Court is not a trier of facts and it

54

shall pass upon them only for compelling reasons which unfortunately are not present in this

53

there is no other available or adequate remedy.

Thus, we grant Equitables petition for certiorari and consequently give due course to its

the amount of actual damages.65

appeal.
Equitable

case.64 Hence, we ordered the partial remand of the case for the sole purpose of determining

Raised

Pure

Questions

Escalation

Clause

Violated

the

Prin

ciple of Mutuality of Contracts

of Law in its Petition For Review

The jurisdiction of this Court in Rule 45 petitions is limited to questions of law. There is a

Escalation clauses are not void per se. However, one which grants the creditor an unbridled

question of law when the doubt or controversy concerns the correct application of law or

right to adjust the interest independently and upwardly, completely depriving the debtor of the

jurisprudence to a certain set of facts; or when the issue does not call for the probative value of

right to assent to an important modification in the agreement is void. Clauses of that nature

55

the evidence presented, the truth or falsehood of facts being admitted.

56

Equitable does not assail the factual findings of the trial court. Its arguments essentially
focus on the nullity of the RTCs February 5, 2004 decision. Equitable points out that that
decision was patently erroneous, specially the exorbitant award of damages, as it was
inconsistent with existing law and jurisprudence.

violate the principle of mutuality of contracts.66 Article 130867 of the Civil Code holds that a
contract must bind both contracting parties; itsvalidity or compliance cannot be left to the will
of one of them.68
For this reason, we have consistently held that a valid escalation clause provides:

57

1. 1.that the rate of interest will only be increased if the applicable maximum rate of
interest is increased by law or by the Monetary Board; and

1. 2.that the obligation was contractual in nature; 75and

2. 2.that the stipulated rate of interest will be reduced if the applicable maximum rate
of interest is reduced by law or by the Monetary Board (de-escalation clause).

69

2. 3.that the parties expressly agreed to consider the effects of the extraordinary
inflation or deflation.76

The RTC found that Equitables promissory notes uniformly stated:

If subject promissory note is extended, the interest for subsequent extensions shall be at such
rate as shall be determined by the bank.

70

Despite the devaluation of the peso, the BSP never declared a situation of extraordinary
inflation. Moreover, although the obligation in this instance arose out of a contract, the parties

Equitable dictated the interest rates if the term (or period for repayment) of the loan was

did not agree to recognize the effects of extraordinary inflation (or deflation). 77 The RTC

extended. Respondents had no choice but to accept them. This was a violation of Article 1308

never mentioned that there was a such stipulation either in the promissory note or loan

of the Civil Code. Furthermore, the assailed escalation clause did not contain the necessary

agreement. Therefore, respondents should pay their dollar-denominated loans at the exchange

provisions for validity, that is, it neither provided that the rate of interest would be increased

rate fixed by the BSP on the date of maturity.78

only if allowed by law or the Monetary Board, nor allowed deescalation. For these reasons, the

The

escalation clause was void.

Damages Lacked Basis

With regard to the proper rate of interest, in New Sampaguita Builders v. Philippine

Award

of

Moral

and

Exemplary

Moral damages are in the category of an award designed to compensate the claimant for actual

National Bank we held that, because the escalation clause was annulled, the principal

injury suffered, not to impose a penalty to the wrongdoer.79 To be entitled to moral damages, a

amount of the loan was subject to the original or stipulated rate of interest. Upon maturity, the

claimant must prove:

71

72

amount due was subject to legal interest at the rate of 12% per annum.

Consequently, respondents should pay Equitable the interest rates of 12.66% p.a. for their
dollar-denominated loans and 20% p.a. for their peso-denominated loans from January 10,

1. 1.That he or she suffered besmirched reputation, or physical, mental or

psychological suffering sustained by the claimant;

2001 to July 9, 2001. Thereafter, Equitable was entitled to legal interest of 12% p.a. on all

2. 2.That the defendant committed a wrongful act or omission;

amounts due.

3. 3.That the wrongful act or omission was the proximate cause of the damages the

There Was No Extraordinary Deflation

claimant sustained;

Extraordinary inflation exists when there is an unusual decrease in the purchasing power of
currency (that is, beyond the common fluctuation in the value of currency) and such decrease
could not be reasonably foreseen or was manifestly beyond the contemplation of the parties at

1. 4.The case is predicated on any of the instances expressed or envisioned by Article

221980 and 222081. 82

the time of the obligation. Extraordinary deflation, on the other hand, involves an inverse
In culpa contractual or breach of contract, moral damages are recoverable only if the

situation.73
Article 1250 of the Civil Code provides:

defendant acted fraudulently or in bad faith or in wanton disregard of his contractual

Article 1250. In case an extraordinary inflation or deflation of the currency stipulated should

obligations.83 The breach must be wanton, reckless, malicious or in bad faith, and oppressive

intervene, the value of the currency at the time of the establishment of the obligation shall be

or abusive.84

the basis of payment, unless there is an agreement to the contrary.

The RTC found that respondents did not pay Equitable the interest due on February 9, 2001

For extraordinary inflation (or deflation) to affect an obligation, the following requisites must

(or any month thereafter prior to the maturity of the loan) 85 or the amount due (principal plus

be proven:

interest) due on July 9, 2001.86 Consequently, Equitable applied respondents deposits to their
loans upon maturity.

1. 1.that there was an official declaration of extraordinary inflation or deflation from

the Bangko Sentral ng Pilipinas (BSP);74

The relationship between a bank and its depositor is that of creditor and debtor.87 For this
reason, a bank has the right to set-off the deposits in its hands for the payment of a depositors
indebtedness.88

Respondents indeed defaulted on their obligation. For this reason, Equitable had the

1. c)pursuant to our ruling in Eastern Shipping Lines v. Court of Appeals,92 the total

option to exercise its legal right to set-off or compensation. However, the RTC mistakenly (or,

amount due on July 9, 2001 shall earn legal interest at 12% p.a. from the time

as it now appears, deliberately) concluded that Equitable acted fraudulently or in bad faith or

petitioner Equitable PCI Bank demanded payment, whether judicially or extra-

in wanton disregard of its contractual obligations despite the absence of proof. The

judicially; and

undeniable fact was that, whatever damage respondents sustained was purely the

2. d)after this Decision becomes final and executory, the applicable rate shall be 12%

consequence of their failure to pay their loans. There was therefore absolutely no basis for

p.a. until full satisfaction;

the award of moral damages to them.

Neither was there reason to award exemplary damages. Since respondents were not

1. 3.all other claims and counterclaims are dismissed.

89

entitled to moral damages, neither should they be awarded exemplary damages. And if
respondents were not entitled to moral and exemplary damages, neither could they be awarded
attorneys fees and litigation expenses.

90

As a starting point, the Regional Trial Court, Branch 16 of Cebu City shall compute the exact
amounts due on the respective dollar-denominated and peso-denominated loans, as of July 9,

ACCORDINGLY, the petition is hereby GRANTED.

2001, of respondents Ng Sheung Ngor, doing business under the name and style of Ken

The October 28, 2005 decision and February 3, 2006 resolution of the Court of Appeals in

Marketing, Ken Appliance Division and Benjamin E. Go.

CA-G.R. SP No. 83112 are hereby REVERSED and SET ASIDE.

SO ORDERED.
Puno (C.J., Chairperson), Sandoval-Gutierrez,Azcuna and Leonardo-De Castro, JJ.,

The March 24, 2004 omnibus order of the Regional Trial Court, Branch 16, Cebu City in
Civil Case No. CEB-26983 is hereby ANNULLED for being rendered with grave abuse of

concur.

discretion amounting to lack or excess of jurisdiction. All proceedings undertaken pursuant

Petition granted.

thereto are likewise declared null and void.

The March 1, 2004 order of the Regional Trial Court, Branch 16 of Cebu City in Civil
Case No. CEB-26983 is hereby SET ASIDE. The appeal of petitioners Equitable PCI Bank,
Aimee Yu and Bejan Lionel Apas is therefore given due course.
The February 5, 2004 decision of the Regional Trial Court, Branch 16 of Cebu City in
Civil Case No. CEB-26983 is accordingly SET ASIDE. New judgment is hereby entered:

Notes.A contractual stipulation providing for an upward adjustment in the purchase

price the moment there is a deterioration of the Philippine peso vis--visthe U.S. dollar
violates R.A. No. 529. (Palanca vs. Court of Appeals, 238 SCRA 593 [1994])
A party violates the rule against forum shopping if he files a petition for certiorari and
prohibition before the Court of Appeals without waiting for the resolution of his motion to
dismiss and to dissolve the writ filed before the trial court. (Tantoy, Sr. vs. Abrogar, 458
SCRA 301 [2005])

1. 1.ordering respondents Ng Sheung Ngor, doing business under the name and style of
Ken Marketing, Ken Appliance Division, Inc. and Benjamin E. Go to pay
petitioner Equitable PCI Bank the principal amount of their dollar-and pesodenominated loans;
2. 2.ordering respondents Ng Sheung Ngor, doing business under the name and style of
Ken Marketing, Ken Appliance Division, Inc. and Benjamin E. Go to pay
petitioner Equitable PCI Bank interest at:
1. a)12.66% p.a. with respect to their dollar-denominated loans from January 10, 2001
to b)20% p.a. with respect to their pesodenominated loans from January 10, 2001
to July 9, 2001;91

o0o

August 22, 2012.*

G.R. No. 192908.

No. 0062-04, the Republic sought to expropriate 1,992 square meters out of a total area of

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC

6,068 square meters of land for the construction of the Manila-Cavite Toll Expressway Project

WORKS AND HIGHWAYS (DPWH), petitioner, vs. ST. VINCENT DE PAUL

(MCTEP). Said property belongs to St. Vincent covered by TCT No. T-821169 and located in

COLLEGES, INC., respondent.

Binakayan, Kawit, Cavite. In Civil Case No. 0100-04, on the other hand, the Republic sought
to expropriate 2,450 square meters out of a total area of 9,039 square meters, also belonging to

Remedial Law; Special Civil Actions; Certiorari; The general rule is that a petition for
certiorari must be filed within sixty (60) days from notice of the judgment, order, or resolution

St. Vincent and covered by TCT No. T-821170. Said property adjoins the property subject of
Civil Case No. 0062-04.

sought to be assailed. Under exceptional circumstances, however, and subject to the sound

Subsequently, the Republic filed in both cases an amended complaint alleging that the

discretion of the Court, said period may be extended pursuant to Domdom, Labao and Mid-

subject land originated from a free patent title and should be adjudicated to it without payment

Islands Power cases.Under Section 4, Rule 65 of the Rules of Court and as applied

of just compensation pursuant to Section 112 of Commonwealth Act No. 141.

in Laguna Metts Corporation, 594 SCRA 139 (2009), the general rule is that a petition

On August 9, 2005, the Republic filed in Civil Case No. 0062-04 a motion for the

for certiorari must be filed within sixty (60) days from notice of the judgment, order, or

issuance of an order of expropriation.4 It was granted by the trial court per Order5 dated

resolution sought to be assailed. Under exceptional circumstances, however, and subject to the

August 16, 2005, ruling that the Republic has a lawful right to take the 1,992 square meters

sound discretion of the Court, said period may be extended pursuant to Domdom, Labao and

portion of the subject property, with no pronouncement as to just compensation since the

Mid-Islands Power cases. Accordingly, the CA should have admitted the Republics

subject property originated from a free patent.6 A motion for the issuance of an order of

petition: first, due to its own lapse when it granted the extension sought by the Republic per

expropriation was likewise filed by the Republic in Civil Case No. 0100-04 but before this

Resolution dated April 30, 2009; second, because of the public interest involved, i.e.,

could be resolved, the Republic moved to consolidate the two cases, which was granted by the

expropriation of private property for public use (MCTEP); and finally, no undue prejudice or

trial court.7
On November 16, 2006, the trial court denied St. Vincents motion for reconsideration of

delay will be caused to either party in admitting the petition.

PETITION for review on certiorari of the resolutions of the Court of Appeals.

its Order dated August 16, 2005 granting expropriation. 8 As alleged in the petition, no appeal
was taken by St. Vincent from said orders.9

The facts are stated in the decision of the Court.

Office of the Solicitor General for petitioner.

After almost 2 years, or on July 28, 2008, St. Vincent filed a Manifestation with Motion
for Clarification of the Order dated August 16, 2005,10contending that although it does not

Triste, Nalda & Associates for respondent.

oppose the ruling regarding the determination of public purpose and the Republics right to

REYES, J.:
1

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of

expropriate the subject land, it, however, claims that it is entitled to just compensation.

Court, where petitioner Republic of the Philippines (Republic), represented by the Department

Meanwhile, the Republic attempted to implement the Order dated August 16, 2005 by

of Public Works and Highways through the Office of the Solicitor General, questions the

entering the subject portion of St. Vincents property. Aggrieved, the latter demanded upon the

resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 108499, to wit:

Republic and its agents to immediately vacate, and remove any and all equipment or structures

1. Resolution dated October 30, 2009 dismissing petitioners petition for certiorari
under Rule 65 for being filed out of time; and
3

2. Resolution dated July 15, 2010 denying petitioners motion for reconsideration.

they introduced on its property in a demand-letter11 dated October 3, 2008.

Due to St. Vincents refusal to honor the order of expropriation, the Republic filed an
urgent motion for the issuance of a writ of possession, which was denied by the lower court in
its Order12 dated November 25, 2006 [2008]. The lower court, however, modified its Order

Antecedent Facts

dated August 16, 2005 and required the Republic to immediately pay St. Vincent in an amount
equivalent to one hundred percent (100%) of the value of the property sought to be

The instant case arose from two cases filed by the Republic seeking expropriation of
certain properties in the name of St. Vincent de Paul Colleges, Inc. (St. Vincent). In Civil Case

expropriated. The Republic moved for reconsideration but it was denied by the lower court per
Order13 dated January 29, 2009 for lack of factual and legal basis.

Seeking to avail the extra ordinary remedy ofcertiorari under Rule 65 of the Rules of

The Issue

Court, the Republic filed with the CA a motion for additional time of fifteen (15) days within
which to file its petition. The CA granted the motion in its Resolution14 dated April 30, 2009

The Republic discussed the substantial merits of its case; however, the CA did no more

and the Republic was given a non-extensible period of fifteen (15) days or until May 4, 2009

than include such matters in its narration of facts, and neither did St. Vincent dwell on said

within which to file its petition for certiorari.

issues. Hence, the only issue to be resolved in this petition is whether the CA committed a

On April 30, 2009, the Republic filed its petition forcertiorari assailing the lower courts
orders dated November 25, 2008 and January 29, 2009 for having been issued with grave

reversible error when it dismissed the Republics petition for certiorari for being filed out of
time, pursuant to A.M. No. 07-7-12-SC.

abuse of discretion amounting to lack or in excess of jurisdiction.

The Courts Ruling

On June 19, 2009, the CA, motu proprio, issued a Resolution15 ordering the Republic to
show cause why its petition for certiorari should not be dismissed for being filed out of time,
pursuant to A.M. No. 07-7-12- SC.
The Republic filed its Compliance with Explanation16 dated July 1, 2009 pleading for the
relaxation of the rules by reason of the transcendental importance of the issues involved in the
case

and

in

consideration

of

substantial

justice.

St.

Vincent

filed

its

Comment/Opposition17 dated July 15, 2009 alleging among others that the said explanation is
merely pro forma due to the Republics failure to justify its explanation.
On October 30, 2009, the CA rendered the assailed resolution dismissing the Republics
petition forcertiorari on the ground that the petition was filed out of time inasmuch as
extensions of time are now disallowed by A.M. No. 07-7-12-SC18 and as applied inLaguna
Metts Corporation v. Court of Appeals.19
On November 26, 2009, the Republic filed its motion for reconsideration alleging that it
merely relied in good faith on the appellate courts resolution granting the former an additional
period of fifteen (15) days within which to file the subject petition.
On July 15, 2010, the CA rendered the assailed resolution denying the Republics motion
for reconsideration, stating that it cannot disobey the ruling in Laguna Metts Corporation.20
Hence, this petition.
_______________
The Republic relies on the CA resolution granting its motion for extension of time and
upon the strength of the substantial merits of its petition. The Republic also invokes Domdom
v. Third and Fifth Divisions of the Sandiganbayan,21 where the Court ruled that absent a
prohibition, motions for extensions are allowed, subject to the Courts sound discretion.
St. Vincent, however, contends that the present petition fails to neither allege any
circumstance nor state any justification for the deliberate disregard of a very elementary rule
of procedure like Section 4 of Rule 65 of the Rules of Court. And in the absence of any such
circumstance or justification, the general rule on pro forma motions/pleadings must apply.

We GRANT the petition.

The Court notes that the CA Resolution dated April 30, 2009, which initially granted the
Republics motion for extension, was premised on the mistaken notion that the petition filed
by the latter was one for petition for review as a mode of appeal. The CA resolution stated,
among others: [P]rovided that this Motion for Extension of Time to File Petition for Review
is seasonably filed, as prayed for, x x x.22Thus, the CA granted extension inasmuch as
motions for this purpose are allowed by the rules.23 On this score alone, the CA should have
admitted the petition filed by the Republic since the latter merely relied on its Resolution
dated April 30, 2009 granting the extension prayed for.
Nevertheless, the CA subsequently dismissed the petition filed by the Republic on the
ground that the same was filed out of time, following A.M. No. 07-7-12-SC. In its Resolution
dated July 15, 2010, which dismissed the Republics motion for reconsideration, the CA also
relied on the ruling in Laguna Metts Corporation that the sixty (60)-day period within which
to file a petition for certiorari is non-extendible. The petitioner, however, insists
that Domdom allows extensions of time to file a petition.
In order to resolve the instant controversy, the Court deems it necessary to discuss the
relationship between its respective rulings in Laguna Metts Corporation and Domdom with
respect to the application of the amendment introduced by A.M. No. 07-7-12-SC to Section 4,
Rule 65 of the Rules of Court.
Before said amendment, Section 4 of Rule 65 originally provides:
Sec. 4. When and where petition filed.The petition shall be filed not later than sixty
(60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the sixty
(60) day period shall be counted from notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of
a lower court or of a corporation, board, officer or person, in the Regional Trial Court

exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be

for certiorari must be filed strictly within 60 days from notice of judgment or from the

filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or

order denying a motion for reconsideration.24 (Citation omitted and emphasis ours)

in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or

Nevertheless, Domdom later stated:

omissions of a quasi-judicial agency, unless otherwise provided by law or these rules, the

On the Peoples argument that a motion for extension of time to file a petition

petition shall be filed in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and
in no case exceeding fifteen (15) days.

for certiorari is no longer allowed, the same rests on shaky grounds. Supposedly, the deletion
of the following provision in Section 4 of Rule 65 by A.M. No. 07-7-12-SC evinces an
intention to absolutely prohibit motions for extension:
No extension of time to file the petition shall be granted except for the most

As amended by A.M. No. 07-7-12-SC, Section 4 of Rule 65 now reads:

Sec. 4. When and where petition filed.The petition shall be filed not later than sixty

compelling reason and in no case exceeding fifteen (15) days.

(60) days from notice of the judgment or resolution. In case a motion for reconsideration or

The full text of Section 4 of Rule 65, as amended by A.M. No. 07-7-12-SC, reads:

new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall

xxxx

be counted from notice of the denial of said motion.

That no mention is made in the above-quoted amended Section 4 of Rule 65 of a

If the petition relates to an act or an omission of a municipal trial court or of a corporation,

motion for extension, unlike in the previous for formulation, does not make the filing of

a board, an officer or a person, it shall be filed with the Regional Trial Court exercising

such pleading absolutely prohibited. If such were the intention, the deleted portion could

jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed with

just have simply been reworded to state that no extension of time to file the petition

the Court of Appeals or with the Sandiganbayan, whether or not the same is in aid of the

shall be granted. Absent such prohibition, motions for extensions are allowed, subject to

courts appellate jurisdiction. If the petition involves an act or an omission of a quasi-judicial

the Courts sound discretion. The present petition may thus be allowed, having been filed

agency, unless otherwise provided by law or these rules, the petition shall be filed with and be

within the extension sought and, at all events, given its merits. 25 (Citation omitted and

cognizable only by the Court of Appeals.

emphasis and underscoring ours)

In election cases involving an act or an omission of a municipal or a regional trial court,

What seems to be a conflict is actually more apparent than real. A reading of the

the petition shall be filed exclusively with the Commission on Elections, in aid of its appellate

foregoing rulings leads to the simple conclusion that Laguna Metts Corporation involves a

jurisdiction.

strict application of the general rule that petitions for certiorari must be filed strictly within

In interpreting said amendment, the Court, inLaguna Metts Corporation, held that:

sixty (60) days from notice of judgment or from the order denying a motion for

As a rule, an amendment by the deletion of certain words or phrases indicates an intention

reconsideration. Domdom, on the other hand,relaxed the rule and allowed an extension of

to change its meaning. It is presumed that the deletion would not have been made if there had
been no intention to effect a change in the meaning of the law or rule. The amended law or
rule should accordingly be given a construction different from that previous to its amendment.

the sixty (60)-day period subject to the Courts sound discretion.26

Labao v. Flores27 subsequently laid down some of the exceptions to the strict application
of the rule, viz.:

If the Court intended to retain the authority of the proper courts to grant extensions under

Under Section 4 of Rule 65 of the 1997 Rules of Civil Procedure, certiorari should be

Section 4 of Rule 65, the paragraph providing for such authority would have been preserved.

instituted within a period of 60 days from notice of the judgment, order, or resolution sought

The removal of the said paragraph under the amendment by A.M. No. 07-7-12-SC of Section

to be assailed. The 60-day period is inextendible to avoid any unreasonable delay that

4, Rule 65 simply meant that there can no longer be any extension of the 60- day period within

would violate the constitutional rights of parties to a speedy disposition of their case.

which to file a petition forcertiorari.

xxxx

The rationale for the amendments under A.M. No. 07-7-12-SC is essentially to prevent the

However, there are recognized exceptions to their strict observance, such as: (1) most

use (or abuse) of the petition for certiorari under Rule 65 to delay a case or even defeat the

persuasive and weighty reasons; (2) to relieve a litigant from an injustice not commensurate

ends of justice. Deleting the paragraph allowing extensions to file petition on compelling

with his failure to comply with the prescribed procedure; (3) good faith of the defaulting party

grounds did away with the filing of such motions. As the Rule now stands, petitions

by immediately paying within a reasonable time from the time of the default; (4) the existence

of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension of the rules; (7) a

Indeed, we have relaxed the procedural technicalities introduced under A.M. No. 07-7-12SC in order to serve substantial justice and safeguard strong public interest. x x x:

lack of any showing that the review sought is merely frivolous and dilatory; (8) the other party

xxxx

will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable negligence

The present Petition involves one of those exceptional cases in which relaxing the

without appellants fault; (10) peculiar legal and equitable circumstances attendant to each

procedural rules would serve substantial justice and safeguard strong public interest. x x x

case; (11) in the name of substantial justice and fair play; (12) importance of the issues

Consequently, in order to protect strong public interest, this Court deems it appropriate and

involved; and (13) exercise of sound discretion by the judge guided by all the attendant

justifiable to relax the amendment of Section 4, Rule 65 under A.M. No. 07-7-12-SC,

circumstances. Thus, there should be an effort on the part of the party invoking liberality to

concerning the reglementary period for the filing of a Rule 65 petition. Considering that the

advance a reasonable or meritorious explanation for his/her failure to comply with the

imminent power crisis is an exceptional and meritorious circumstance, the parties herein

rules.28 (Citations omitted and emphasis ours)

should be allowed to litigate the issues on the merits. Furthermore, we find no significant

Note that Labao explicitly recognized the general rule that the sixty (60)-day period

prejudice to the substantive rights of the litigants as respondent was able to file the

within which to file a petition for certiorari under Rule 65 is non-extendible, only that there

Petition before the CA within the 15-day extension it asked for. We therefore find no grave

are certain exceptional circumstances, which may call for its non-observance. Even more

abuse of discretion attributable to the CA when it granted respondent Power Ones Motion for

recently, in Mid-Islands Power Generation Corporation v. Court of Appeals, 29 the Court,

Extension to file its Petition for Certiorari.30 (Citations omitted and emphasis ours)

taking into consideration Laguna Metts Corporation and Domdom, relaxed the procedural

To reiterate, under Section 4, Rule 65 of the Rules of Court and as applied in Laguna

technicalities introduced under A.M. No. 07-7-12-SC in order to serve substantial justice and

Metts Corporation, the general rule is that a petition for certiorari must be filed within sixty

safeguard strong public interest and affirmed the extension granted by the CA to the

(60) days from notice of the judgment, order, or resolution sought to be assailed. Under

respondent Power One Corporation due to the exceptional nature of the case and the strong

exceptional circumstances, however, and subject to the sound discretion of the Court, said

public interest involved.

period may be extended pursuant to Domdom, Labao and Mid-Islands Powercases.

In Laguna Metts Corporation v. Court of Appeals, we explained that the reason behind

Accordingly, the CA should have admitted the Republics petition: first, due to its own

the amendments under A.M. No. 07-7-12-SC was to prevent the use or abuse of the remedy of

lapse when it granted the extension sought by the Republic per Resolution dated April 30,

petition for certiorari in order to delay a case or even defeat the ends of justice. We thus

2009; second, because of the public interest involved, i.e., expropriation of private property for

deleted the clause that allowed an extension of the period to file a Rule 65 petition for

public use (MCTEP); and finally, no undue prejudice or delay will be caused to either party in

compelling reasons. Instead, we deemed the 60-day period to file as reasonable and

admitting the petition.

sufficient time for a party to mull over the case and to prepare a petition that asserts

WHEREFORE, premises considered, the petition is GRANTED. The Resolutions dated

grave abuse of discretion by a lower court. The period was specifically set and limited in

October 30, 2009 and July 15, 2010 of the Court of Appeals in CA-G.R. SP No. 108499 are

order to avoid any unreasonable delay in the dispensation of justice, a delay that could violate

NULLIFIED. The Court of Appeals is hereby ORDERED to REINSTATE and ADMIT the

the constitutional right of the parties to a speedy disposition of their case. x x x.

petition for certiorari filed by the Republic of the Philippines in CA-G.R. SP No. 108499 and

Nevertheless, in the more recent case of Domdom v. Sandiganbayan, we ruled that the
deletion of the clause in Section 4, Rule 65 by A.M. No. 07-7-12-SC did not, ipso facto,
make the filing of a motion for extension to file a Rule 65 petition absolutely prohibited.
We held in Domdom that if absolute proscription were intended, the deleted portion could

to proceed with the case with dispatch.

SO ORDERED.
Carpio (Chairperson), Leonardo-De Castro,** Perezand Sereno, JJ., concur.
Petition granted, resolutions nullified.

have just simply been reworded to specifically prohibit an extension of time to file such

Notes.While the proper courts previously had discretion to extend the period for filing a

petition. Thus, because of the lack of an express prohibition, we held that motions for

petition for certiorari beyond the 60-day period, the amendments to Rule 65 under A.M. No.

extension may be allowed, subject to this Courts sound discretion, and only under

07-7-12-SC disallowed extensions of time to file a petition for certiorari with the deletion of

exceptional and meritorious cases.

the paragraph that previously permitted such extensions. (Laguna Metts Corporation vs. Court
of Appeals, 594 SCRA 139 [2009])
Under Supreme Court Circular No. 56-2000, in case a motion for reconsideration of the
judgment, order, or resolution sought to be assailed has been filed, the 60-day period to file a
petition for certiorari shall be computed from notice of the denial of such motion. (Coca-Cola
Bottlers Philippines, Inc. vs. Del Villar, 632 SCRA 293 [2010])
o0o

resolution like the one specified above. A trial court should state in its order the reasons for the
G.R. No. 154282. April 7, 2006.*

dismissal of the complaint so that when the order is appealed, the appellate court can readily

VANGIE BARRAZONA, petitioner, vs. REGIONAL TRIAL COURT, BRANCH 61,

determine from a casual perusal thereof whether there is aprima facie justification for the

BAGUIO CITY and SAN-AN REALTY AND DEVELOPMENT CORPORATION,

dismissal. Under Section 3, Rule 16 of the 1997 Rules of Civil Procedure, as amended, we

herein represented by RODRIGO CHUA TIU, respondents.

require that resolutions disposing of a motion to dismiss shall state clearly and distinctly the
reasons therefor, thus: Sec. 3.Resolution of motion.After the hearing, the court may dismiss

Actions; Jurisdictions; Jurisdiction of the court over the subject matter of the action is

the action or claim, deny the motion, or order the amendment of the pleading. The court shall

determined by the allegations of the complaint at the time of its filing, irrespective of whether

not defer the resolution of the motion for the reason that the ground relied upon is not

or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.

indubitable. In every case, the resolution shall state clearly and distinctly the reasons therefor.

In Herrera, et al. v. Bollos, et al., 374 SCRA 107 (2002), we emphasized the basic rule that

This requirement proscribes the common practice of perfunctorily dismissing a motion to

jurisdiction of the court over the subject matter of the action is determined by the allegations

dismiss for lack of merit. Such cavalier dispositions can often pose difficulty and

of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled

misunderstanding on the part of the aggrieved party in taking recourse therefrom and likewise

to recover upon all or some of the claims asserted therein. What determines the jurisdiction of

on the higher court called upon to resolve the same, usually on certiorari.

the court is the nature of the action pleaded as appearing from the allegations in the complaint.
The averments therein and the character of the relief sought are the ones to be consulted.

Certiorari; The writ of certiorari is granted to keep an inferior court within the bounds
of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting

Same; Same; Ejectment; All ejectment cases are within the jurisdiction of the Municipal

to lack or excess of jurisdiction.While an order denying a motion to dismiss is interlocutory

Trial Court.This allegation clearly shows that respondent made several demands upon

and non-appeallable, however, if the denial is without or in excess of jurisdiction, certiorari

petitioner to pay her overdue rentals and to vacate the premises; and that the last demand to

and prohibition are proper remedies from such order of denial. In Time, Inc. v. Reyes, 39

pay and vacate in writing was on March 27, 2002. Respondent thus complied with Section 2,

SCRA 303 (1971), this Court, speaking through Justice J.B.L. Reyes, held: The motion to

Rule 70 of the 1997 Rules of Civil Procedure, as amended, which provides: Sec. 2. Lessor to

dismiss was predicated on the respondent courts lack of jurisdiction to entertain the action;

proceed against lessee only after demand.Unless otherwise stipulated, such action by the

and the rulings of this Court are that writs of certiorari or prohibition, or both, may issue in

lessor shall be commenced only after demand to pay or comply with the conditions of the

case of a denial or deferment of an action or on the basis of a motion to dismiss for lack of

lease and to vacate is made upon the lessee, or by serving written notice of such demand upon

jurisdiction. Verily, the writ of certiorari is granted to keep an inferior court within the bounds

the person found on the premises, or by posting such notice on the premises if no person be

of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting

found thereon, and the lessee fails to comply therewith after fifteen (15) days in the case of

to lack or excess of jurisdiction.

land or five (5) days in the case of buildings. (2a) Indeed, while the complaint is captioned

Same; Motions for Reconsideration; The filing of a motion for reconsideration of a

Collection of Sum of Money with Damages, the allegations therein show that respondents

lower courts ruling can be dispensed with before resorting to the remedy of certiorari in

action is for ejectment. All ejectment cases are within the jurisdiction of the MTC.

exceptional cases, such as where the question is purely of law, when public interest is

Courts; Judgments; Orders; A trial court should state in its order the reasons for

involved, where judicial intervention is urgent or its application may cause great and

dismissal of the complaint so that when the order is appealed, the appellate court can readily

irreparable damage, and where the court a quo has no jurisdiction.We cannot go along

determine from a casual perusal thereof whether there is a prima facie justification for the

with respondents contention that petitioner should have first filed a motion for

dismissal; Section 3, Rule 16 of the 1997 Rules of Civil Procedure proscribes the common

reconsideration before resorting to the remedy of certiorari. While the rule is that before

practice of perfunctorily dismissing a motion to dismiss for lack of merit, a cavalier

certiorari may be availed of, petitioner must first file a motion for reconsideration with the

disposition can often pose difficulty and misunderstanding on the part of the aggrieved party

lower court of the act or order complained of, however, such rule is not without exception. We

in taking recourse therefrom and likewise on the higher court called upon to resolve the same,

have, in several instances, dispensed with the filing of a motion for reconsideration of a lower

usually on certiorari.We have admonished the trial courts not to issue a minute order or

courts ruling, such as: where the proceedings in which the error occurred is a patent nullity;

where the question is purely of law; when public interest is involved; where judicial

2. 5.That the plaintiff has demanded the defendant to pay her overdue account, now

intervention is urgent or its application may cause great and irreparable damage; and where the

amounting to P971,838.15, the last demand to vacate and payment of arrears

court a quo has no jurisdiction, as in this case.

having been made in writing on March 27, 2002 x x x.

SPECIAL CIVIL ACTION in the Supreme Curt. Certiorari.

In an Order dated June 19, 2002, the RTC denied the Motion to Dismiss for lack of merit.
Forthwith, petitioner filed the instant Petition for Certiorari alleging that: (1) the RTC

The facts are stated in the opinion of the Court.

Enrique A. Palsiw, Jr. for petitioner.
Jose L. Olarte, Jr. for respondent.
SANDOVAL-GUTIERREZ, J.:

committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying her
Motion to Dismiss; and (2) the Resolution denying her Motion to Dismiss is unconstitutional
as it does not state its legal basis.
On the other hand, respondent, in praying for the dismissal of the petition, contends that
(1) the complaint is for the collection of unpaid rentals as there is absolutely no allegation that

For our resolution is the instant Petition for Certiorari under Rule 65 of the 1997 Rules of

its intent is to eject petitioner from the premises; (2) petitioner should have first filed a motion

Civil Procedure, as amended, assailing the Order dated June 19, 2002 of the Regional Trial

for reconsideration before resorting to the extraordinary suit of certiorari; and (3) the assailed

Court (RTC), Branch 61, Baguio City, denying petitioners Motion to Dismiss Civil Case No.

order denying petitioners motion to dismiss is interlocutory and, therefore, cannot be the

5238-R, entitled SAN-AN REALTY and DEVELOPMENT CORPORATION, herein

subject of a petition for certiorari.

represented by RODRIGO CHUA TIU, plaintiff, v. VANGIE BARRAZONA, defendant.

San-an Realty and Development Corporation, respondent, owns a building located at
Naguilian corner Asin Road, Baguio City. Vangie Barrazona, petitioner, has been leasing

We hold that in denying petitioners motion to dismiss the complaint, the RTC acted with
grave abuse of discretion.
Petitioners motion to dismiss the complaint for lack of jurisdiction is pursuant to Section

portions of the building identified as Units 203 A and B at the second floor. The period of the

1, Rule 16 of the 1997 Rules of Civil Procedure, as amended, which provides:

lease is for two (2) years, commencing July 15, 2001 and ending June 30, 2003. The monthly

Sec. 1. Grounds.Within the time for but before filing the answer to the complaint or

rental is P400.00 per square meter for Unit 203 A and P500.00 per square meter for Unit 203

pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:

B.

xxx

xxx

xxx

Starting August 2001, petitioner defaulted in the payment of the monthly rentals and failed to

b.) That the court has no jurisdiction over the subject matter of the claim.

pay despite demands by respondent. Thus, on May 14, 2002, respondent filed with the RTC,

As mentioned earlier, petitioner stated in her motion that respondents allegations in its

Branch 61, Baguio City, a Complaint for Collection of Sum of Money with Damages,

complaint show that it is one for ejectment cognizable, not by the RTC but, by the MTC of

docketed as Civil Case No. 5238-R.

Baguio City.

On June 3, 2002, petitioner filed with the RTC a Motion to Dismiss on the ground, among

In Herrera, et al. v. Bollos, et al.,1 we emphasized the basic rule that jurisdiction of the

others, that the RTC has no jurisdiction over the complaint considering that the allegations

court over the subject matter of the action is determined by the allegations of the complaint at

therein clearly indicate that the action is one for eject-ment (illegal detainer) which is under

the time of its filing, irrespective of whether or not the plaintiff is entitled to recover upon all

the exclusive jurisdiction of the Municipal Trial Court (MTC). Petitioner pointed out the

or some of the claims asserted therein. What determines the jurisdiction of the court is the

following allegations in paragraphs 4 and 5 of the complaint showing that it is not for sum of

nature of the action pleaded as appearing from the allegations in the complaint. The averments

money but for ejectment:

therein and the character of the relief sought are the ones to be consulted.
It bears reiterating paragraph 5 of the complaint, thus:

1. 4.That the defendant has failed to pay the rentals for the said leased premises for the
month of August 2001 up to the present;

5. That the plaintiff has demanded the defendant to pay her overdue account, now amounting
to P971,838.15, the last demand to vacate and payment of arrears having been made in writing
on March 27, 2002 x x x.

This allegation clearly shows that respondent made several demands upon petitioner to pay her

misunderstanding on the part of the aggrieved party in taking recourse therefrom and likewise

overdue rentals and to vacate the premises; and that the last demand to pay and vacate in

on the higher court called upon to resolve the same, usually on certiorari. 4

writing was on March 27, 2002. Respondent thus complied with Section 2, Rule 70 of the

While an order denying a motion to dismiss is interlocutory and non-appealable, however,

1997 Rules of Civil Procedure, as amended, which provides:

if the denial is without or in excess of jurisdiction, certiorari and prohibition are proper

Sec. 2. Lessor to proceed against lessee only after demand.Unless otherwise stipulated,

remedies from such order of denial.5 In Time, Inc. v. Reyes,6 this Court, speaking through

such action by the lessor shall be commenced only after demand to pay or comply with the

Justice J.B.L. Reyes, held: The motion to dismiss was predicated on the respondent courts

conditions of the lease and to vacate is made upon the lessee, or by serving written notice of

lack of jurisdiction to entertain the action; and the rulings of this Court are that writs of

such demand upon the person found on the premises, or by posting such notice on the

certiorari or prohibition, or both, may issue in case of a denial or deferment of an action or on

premises if no person be found thereon, and the lessee fails to comply therewith after fifteen

the basis of a motion to dismiss for lack of jurisdiction.7 Verily, the writ of certiorari is granted

(15) days in the case of land or five (5) days in the case of buildings. (2a)

to keep an inferior court within the bounds of its jurisdiction or to prevent it from committing

Indeed, while the complaint is captioned Collection of Sum of Money with Damages, the

such a grave abuse of discretion amounting to lack or excess of jurisdiction.8

allegations therein show that respondents action is for ejectment. All ejectment cases are
within the jurisdiction of the MTC.

Lastly, we cannot go along with respondents contention that petitioner should have first
filed a motion for reconsideration before resorting to the remedy of certiorari. While the rule is

Next, petitioner maintains that the Order of the RTC denying her Motion to Dismiss

that before certiorari may be availed of, petitioner must first file a motion for reconsideration

violates the Constitution as it does not state the facts and the law on which it is based. The

with the lower court of the act or order complained of,9 however, such rule is not without

challenged Order is reproduced as follows:

exception. We have, in several instances, dispensed with the filing of a motion for
reconsideration of a lower courts ruling, such as: where the proceedings in which the error
ORDER

This Court finds that the grounds stated in the Motion to Dismiss to be without merit, hence,
the same is denied.
SO ORDERED.
We have admonished the trial courts not to issue a minute order or resolution like the one
specified above. A trial court should state in its order the reasons for the dismissal of the
complaint so that when the order is appealed, the appellate court can readily determine from a
casual perusal thereof whether there is a prima facie justification for the dismissal.3
Under Section 3, Rule 16 of the 1997 Rules of Civil Procedure, as amended, we require
that resolutions disposing of a motion to dismiss shall state clearly and distinctly the reasons
therefor, thus:
Sec. 3. Resolution of motion.After the hearing, the court may dismiss the action or claim,

occurred is a patent nullity;10 where the question is purely of law; when public interest is
involved; where judicial intervention is urgent or its application may cause great and
irreparable damage;11 and where the court a quo has no jurisdiction,12 as in this case.
WHEREFORE, the petition is GRANTED. The Order dated June 19, 2002 issued by the
RTC, Branch 61, Baguio City, in Civil Case No. 5238-R, is ANNULLED and SET ASIDE.
SO ORDERED.
Puno (Chairperson), Corona, Azcuna andGarcia, JJ., concur.
Petition granted, order annulled and set aside.
Notes.It is axiomatic that what determines the nature of an action and hence, the
jurisdiction of the court, are the allegations of the pleading and the character of the relief
sought. (Del Mar vs. Philippine Amusement and Gaming Corporation, 346 SCRA 485[2000])
The elementary rule is that jurisdiction in criminal cases is determined by the allegations
in the Information. (People vs. Bayeng, 364 SCRA 667[2001])

deny the motion, or order the amendment of the pleading.

The court shall not defer the resolution of the motion for the reason that the ground relied
upon is not indubitable.
In every case, the resolution shall state clearly and distinctly the reasons therefor.
This requirement proscribes the common practice of perfunctorily dismissing a motion to
dismiss for lack of merit. Such cavalier dispositions can often pose difficulty and

o0o

G.R. No. 149640. October 19, 2007.*

appellate jurisdiction and power of review for, while in certiorari as an original action, the

SAN MIGUEL CORPORATION, ANDRES SORIANO III, FRANCISCO C.

higher court exercises original jurisdiction under its power of control and supervision over the

EIZMENDI, JR., and FAUSTINO F. GALANG, petitioners, vs.NUMERIANO LAYOC,

proceedings of lower courts. (Emphasis added)

JR., CARLOS APONESTO, PAULINO BALDUGO, QUEZON BARIT, BONIFACIO

Labor Law; Managerial Employees; Overtime Pay;Generally, managerial employees

BOTOR, HERMINIO CALINA, DANILO CAMINGAL, JUAN DE MESA, REYNOLD

are not entitled to overtime pay for services rendered in excess of eight hours a day.Article

DESEMBRANA, BERNARDITO DEUS, EDUARDO FILLARTA, MAXIMIANO

82 of the Labor Code states that the provisions of the Labor Code on working conditions and

FRANCISCO, MARIO MARILIM, DEMETRIO MATEO, FILOMENO MENDOZA,

rest periods shall not apply to managerial employees. The other provisions in the Title include

CONRADO NIEVA, FRANCISCO PALINES, FELIPE POLINTAN, MALCOLM

normal hours of work (Article 83), hours worked (Article 84), meal periods (Article 85), night

SATORRE, and ALEJANDRO TORRES, respondents.

shift differential (Article 86), overtime work (Article 87), undertime not offset by overtime
(Article 88), emergency overtime work (Article 89), and computation of additional

Actions; Appeals; Certiorari; Certiorari as a Mode of Appeal and Certiorari as an

compensation (Article 90). It is thus clear that, generally, managerial employees such as

Original Special Civil Action, Distinguished. It appears that respondents confuse certiorari

respondents are not entitled to overtime pay for services rendered in excess of eight hours a

as a mode of appeal under Rule 45 of the 1997 Rules of Civil Procedure with certiorari as an

day. Respondents failed to show that the circumstances of the present case constitute an

original special civil action under Rule 65 of the same Rules. In Paa v. Court of Appeals, 282

exception to this general rule.

SCRA 448 (1997), we stated that: There are, of course, settled distinctions between a petition

Same; Same; Same; Words and Phrases; Overtime pay does not fall within the

for review as a mode of appeal and a special civil action for certiorari, thus: a. In appeal

definition of benefits under Article 100 of the Labor Code.Aside from their allegations,

by certiorari, the petition is based on questions of law which the appellant desires the

respondents were not able to present anything to prove that petitioners were obliged to permit

appellate court to resolve. In certiorari as an original action, the petition raises the issue as to

respondents to render overtime work and give them the corresponding overtime pay. Even if

whether the lower court acted without or in excess of jurisdiction or with grave abuse of

petitioners did not institute a no time card policy, respondents could not demand overtime

discretion; b. Certiorari, as a mode of appeal, involves the review of the judgment, award or

pay from petitioners if respondents did not render overtime work. The requirement of

final order on the merits. The original action for certiorarimay be directed against an

rendering additional service differentiates overtime pay from benefits such as thirteenth month

interlocutory order of the court prior to appeal from the judgment or where there is no appeal

pay or yearly merit increase. These benefits do not require any additional service from their

or any other plain, speedy or adequate remedy; c. Appeal bycertiorari must be made within

beneficiaries. Thus, overtime pay does not fall within the definition of benefits under Article

the reglementary period for appeal. An original action for certiorari may be filed not later than

100 of the Labor Code.

sixty (60) days from notice of the judgment, order or resolution sought to be assailed; d.

Same; Same; Same; Management Prerogatives; So long as a companys management

Appeal by certiorari stays the judgment, award or order appealed from. An original action

prerogatives are exercised in good faith for the advancement of the employers interest and

for certiorari, unless a writ of preliminary injunction or a temporary restraining order shall

not for the purpose of defeating or circumventing the rights of the employees under special

have been issued, does not stay the challenged proceeding; e. In appeal by certiorari, the

laws or under valid agreements, the Supreme Court will uphold them.We agree with

petitioner and respondent are the original parties to the action, and the lower court or quasi-

petitioners position that given the discretion granted to the various divisions of SMC in the

judicial agency is not to be impleaded. In certiorari as an original action, the parties are the

management and operation of their respective businesses and in the formulation and

aggrieved party against the lower court orquasijudicial agency and the prevailing parties, who

implementation of policies affecting their operations and their personnel, the no time card

thereby respectively become the petitioner and respondents; f. Incertiorari for purposes of

policy affecting all of the supervisory employees of the Beer Division is a valid exercise of

appeal, the prior filing of a motion for reconsideration is not required (Sec. 1, Rule 45);

management prerogative. The no time card policy undoubtedly caused pecuniary loss to

while in certiorari as an original action, a motion for reconsideration is a condition

respondents. However, petitioners granted to respondents and other supervisory employees a

precedent (Villa-Rey Transit vs. Bello, L-18957, April 23, 1963, 7 SCRA 735),subject to

10% across-the-board increase in pay and night shift allowance, in addition to their yearly

certain exceptions; g. In appeal by certiorari, the appellate court is in the exercise of its

merit increase in basic salary, to cushion the impact of the loss. So long as a companys

management prerogatives are exercised in good faith for the advancement of the employers

a.

Aponesto, Carlos

June 1970

February 1983

interest and not for the purpose of defeating or circumventing the rights of the employees

b.

Baldugo, Paulino

November 1978

May 1984

under special laws or under valid agreements, this Court will uphold them.

c.

Barit, Quezon

January 1969

May 1984

PETITION for review on certiorari of a decision of the Court of Appeals.

d.

Botor, Bonifacio

April 1980

January 1987

The facts are stated in the opinion of the Court.

e.

De Mesa, Juan

November 1977

May 1984

Estelito P. Mendoza and Lorenzo G. Timbol for petitioners.

f.

Calina, Herminio

February 1976

May 1984

IC Puerto, C Veloso, E Gamir for respondents.

g.

Desembrana, Reynold

November 1976

April 1983

h.

Camingal, Danilo

December 1975

December 1985

i.

Deus, Bernardito

July 1976

May 1983

j.

Fillarta, Eduardo

January 1979

May 1989

k.

Francisco, Maximiano

October 1977

May 1984

l.

Layoc, Numeriano

June 1974

January 1982

This is a petition for review of the decision promulgated on 29 August 2001 by the Court of

m.

Marilim, Mario

December 1977

June 1984

Appeals (appellate court) in CA-G.R. SP No. 55838. The appellate courts decision set aside

n.

Mateo, Demetrio

November 1976

March 1984

the decision3 in NLRC NCR Case No. 00-12-08656-94 dated 23 March 1998, the

o.

Mendoza, Filomena

March 1980

May 1983

decision dated 27 November 1998, and the resolution dated 31 August 1999 in NLRC CA

p.

Palines, Francisco

May 1979

May 1985

No. 015710-98. The appellate court ordered San Miguel Corporation (SMC), Andres Soriano

q.

Nieva, Conrado

January 1977

June 1987

Pao, Gonzales, Relova & Associates for respondents.

CARPIO, J.:
The Case
1

III, Francisco C. Eizmendi, Jr., and Faustino F. Galang (collectively, petitioners) to pay
respondent Numeriano Layoc, Jr. (Layoc) P125,000, representing overtime pay for services
that he could have rendered from January 1993 up to his retirement on 30 June 1997, and
respondents Carlos Aponesto, Paulino Baldugo, Quezon Barit, Bonifacio Botor, Herminio
Calina, Danilo Camingal, Juan de Mesa, Reynold Desembrana, Bernardito Deus, Eduardo

r.

Polintan, Felipe

June 1972

May 1983

s.

Satorre, Malcolm

September 1970

May 1984

t.

Torres, Alejandro

January 1974

May 1984

As supervising security guards, the private respondents were performing the following
functions (Ibid., pp. 202-204):

Fillarta, Maximiano Francisco, Mario Marilim, Demetrio Mateo, Filomeno Mendoza, Conrado
Nieva, Francisco Palines, Felipe Polintan, Malcolm Satorre, and Alejandro Torres

1. 1.Supervises the facility security force under his shift;

2. 2.Inspects all company-owned firearms and ammunition and promptly submits

(collectively, respondents) P10,000 each as nominal damages.

report as regards to discrepancy and/or state of doubtful/suspected serviceability;

The Facts
The appellate court stated the facts as follows:
[Respondents] were among the Supervisory Security Guards of the Beer Division of the
San Miguel Corporation (p. 10, Rollo), a domestic corporation duly organized and existing
under and by virtue of the laws of the Republic of the Philippines with offices at No. 40 San
Miguel Avenue, Mandaluyong City. They started working as guards with the petitioner San
Miguel Corporation assigned to the Beer Division on different dates until such time that they
were promoted as supervising security guards. The dates of their employment commenced as

1. 3.Receives and transfers from outgoing to incoming supervising security guard all
company property, all official papers, documents and/or cases investigated
including pieces of evidence properly labeled and secured;
2. 4.Physically checks and accounts for all company property within his area of
responsibility immediately upon assumption of duty;
3. 5.Updates compilation of local security rules, policies and regulations and ensures
that all his guards are posted thereon;

follows (Ibid., pp. 87-89):

As guards

As supervising
guards

4. 6.Conducts regular and irregular inspection to determine his guards compliance

with all guard force instructions, corporate security standards and procedures;

5. 7.Passes on all official communications, requests, applications of leaves, etc. and

makes his comments and/or recommendations to his superior;

companys work place. Corollary [sic], the private respondents were availing the benefits for
overtime, holiday and night premium duty through time card punching (Rollo, p. 89).

6. 8.Systematically and continuously screens the good performers from the marginal or

However, in the early 1990s, the San Miguel Corporation embarked on a Decentralization

poor among his guards; concentrates on teaching and guiding the latter; determines

Program aimed at enabling the separate divisions of the San Miguel Corporation to pursue a

further what training and/or skills that should be learned and submits appropriate

more efficient and effective management of their respective operations (Ibid., p. 99).

report to superior;

As a result of the Decentralization Program, the Beer Division of the San Miguel

7. 9.Corrects, on the spot, all deficiencies noted and institutes corrective measures

Corporation implemented on January 1, 1993 a no time card policy whereby the Supervisory

within his authority; recommends commendations for those guards who deserves

I and II composing of the supervising security guards of the Beer Division were no longer

[sic] recognition for good work;

required to punch their time cards (Ibid., p. 100). Consequently, on January 16, 1993, without

8. 10.Conducts an investigation of all cases coming to his attention and promptly

submits appropriate report to his superiors;
9. 11.Evaluates individual guard performance and renders efficiency reports in
accordance with standing instructions;
10. 12.Ensures that all his guards are courteous, respectful and accommodating at all
times;
11. 13.Ensures that even those who have been found violating the facilitys policies,

prior consultation with the private respondents, the time cards were ordered confiscated and
the latter were no longer allowed to render overtime work (Ibid., p. 117).
However, in lieu of the overtime pay and the premium pay, the personnel of the Beer
Division of the petitioner San Miguel Corporation affected by the No Time Card Policy
were given a 10% across-the-board increase on their basic pay while the supervisors who were
assigned in the night shift (6:00 p.m. to 6:00 a.m.) were given night shift allowance ranging
from P2,000.00 to P2,500.00 a month (Rollo, p. 12).6

rules and procedures are professionally treated with courtesy and understanding to

On 1 December 1994, respondents filed a complaint for unfair labor practice, violation of

preclude embarrassment and humiliation;

Article 100 of the Labor Code of the Philippines, and violation of the equal protection clause
and due process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code

1. 14.Ensures the maintenance of [a] logbook of all incidents, communications,

personnel and materials movements;
2. 15.Responds to all calls for assistance;
3. 16.Conducts continuing physical checks of the facilitys critical and vulnerable
areas;

of the Philippines. Respondents prayed for actual damages for two years (1993-1994), moral
damages, exemplary damages, and overtime, holiday, and night premium pay.
In their position paper dated 28 February 1995, respondents stated that the Beer Division
of SMC maliciously and fraudulently refused payment of their overtime, holiday, and night
premium pay from 1 to 15 January 1993 because of the no time card policy. Moreover,

4. 17.Obtains critical security information and passes it on to his superiors;

petitioners had no written authority to stop respondents from punching their time cards

5. 18.Assesses the need for extra guard service requirements;

because the alleged memorandum authorizing such stoppage did not include supervisory

6. 19.Continuously monitors the personal needs and problems of his men to his

security guards. Thus, the respondents suffered a diminution of benefits, making petitioners

superiors;
7. 20.Acts as Detachment Commander in the latters absence;
8. 21.Responds to emergencies and activates the Corporate Security Alerting System
as appropriate; and
9. 22.Performs such other duties as may be required by his Detachment
Commander/Plant Security Officer.

liable for non-payment of overtime, holiday, and night premium pay.

In their position paper dated 23 February 1995, petitioners maintained that respondents
were supervisory security guards who were exempt from the provisions of the Labor Code on
hours of work, weekly rest periods, and rest days. The no time card policy did not just
prevent respondents from punching their time cards, but it also granted respondents an acrossthe-board increase of 10% of basic salary and either a P2,000 or P2,500 night shift allowance
on top of their yearly merit increase. Petitioners further asserted that the no time card policy

From the commencement of their employment, the private respondents were required to punch
their time cards for purposes of determining the time they would come in and out of the

was a valid exercise of management prerogative and that all supervisors in the Beer Division

were covered by the no time card policy, which classification was distinct and separate from

there is no rule excluding managerial employees from the coverage of the principle of non-

the other divisions within SMC.

diminution of benefits.

Respondents filed their reply dated 15 March 1995 to petitioners position paper.

The NLRC ruled thus:

Petitioners, on the other hand, filed their rejoinder dated 27 March 1995 to respondents reply.

WHEREFORE, the decision appealed from is hereby AFFIRMED, with slight modification

Respondents filed a request for admission dated 2 May 1995 to which petitioners filed their

deleting the award of moral and exemplary damages.

reply dated 15 May 1995.

SO ORDERED.8

The Ruling of the Labor Arbiter

Both petitioners and respondents filed their respective motions for reconsideration. Petitioners

In his decision dated 23 March 1998, Labor Arbiter Potenciano S. Canizares, Jr. (Arbiter

stated that the NLRC erred in sustaining the award of overtime pay despite its finding that

Canizares) stated that the principal issue is whether petitioners can, in their no time card

respondents were managerial personnel. Furthermore, there was no evidence that respondents

policy, remove the benefits that respondents have obtained through overtime services. Arbiter

rendered overtime work and respondents admitted that they never or seldom rendered

Canizares then stated that the facts and the evidence are in respondents favor. Arbiter

overtime work. The award of overtime pay was thus contrary to the principle of no work, no

Canizares ruled that rendering services beyond the regular eight-hour work day has become

pay. For their part, respondents stated that the NLRC erred in deleting the award of moral and

company practice. Moreover, petitioners failed to show good faith in the exercise of their

exemplary damages. The implementation of the no time card policy, the discrimination

management prerogative in altering company practice because petitioners changed the terms

against them vis--vis the supervising security officers in other divisions of SMC, and the

and conditions of employment from hours of work rendered to result only with respect to

execution of quitclaims and releases during the pendency of the case were all attended with

respondents and not with other supervisors in other departments. The dispositive portion of

bad faith, thus warranting the award of moral and exemplary damages.

Arbiter Canizares decision reads:

On 31 August 1999, the NLRC further modified Arbiter Canizares decision. The NLRC

WHEREFORE, the [petitioners] are hereby ordered to restore to the [respondents] their right

ruled thus:

to earn for overtime services rendered as enjoyed by the other employees.

WHEREFORE, the November 27, 1998 Decision of this Commission is hereby

The [petitioners] are further ordered to indemnify the [respondents] for lost earnings after

REITERATED with a slight modification to the effect that the computation of the

their terms and conditions of employment have been unilaterally altered by the [petitioners],

[respondents] withdrawn benefits at P125,000.00 yearly from 1993 should terminate in 1996

namely in the amount of P500,000.00 each as computed by the [respondents], and the

or the date of each complainants retirement, whichever came first.

[petitioners] failed to refute.

[Petitioners] are furthermore ordered to pay the [respondents] P100,000.00 each as moral

SO ORDERED.9
Petitioners then filed their petition for certiorari before the appellate court on 16 November

and exemplary damages.

1999.

All other claims are hereby dismissed for lack of evidence.

The Ruling of the Appellate Court

SO ORDERED.

On 29 August 2001, the appellate court set aside the ruling of the NLRC and entered a new

On 26 May 1998, petitioners filed their notice of appeal and memorandum of appeal with the

judgment in favor of respondents. The appellate court stated that there is no legal issue that

National Labor Relations Commission (NLRC).

respondents, being the supervisory security guards of the Beer Division of SMC, were

The Ruling of the NLRC

performing duties and responsibilities being performed by those who were considered as

On 27 November 1998, the NLRC affirmed with modification the ruling of Arbiter Canizares

officers or members of the managerial staff as defined under Section 2, paragraph (c), Rule 1,

that respondents suffered a diminution of benefits as a result of the adoption of the no time

Book III of the Implementing Rules of the Labor Code. 10 The appellate court ruled that while

card policy. The NLRC cited a well-established rule that employees have a vested right over

the implementation of the no time card policy was a valid exercise of management

existing benefits voluntarily granted to them by their employer, who may not unilaterally

prerogative, the rendering of overtime work by respondents was a long-accepted practice in

withdraw, eliminate, or diminish such benefits. In the present case, there was a company

SMC which could not be peremptorily withdrawn without running afoul with the principles of

practice which allowed the enjoyment of substantial additional remuneration. Furthermore,

justice and equity. The appellate court affirmed the deletion of the award of actual, moral, and

exemplary damages. With the exception of Layoc, respondents did not present proof of

Requirement

previous earnings from overtime work and were not awarded with actual damages. Moreover,

Motion for Reconsideration

of

Prior

Filing

of

the appellate court did not find that the implementation of the no time card policy caused

It appears that respondents confuse certiorari as a mode of appeal under Rule 45 of the 1997

any physical suffering, moral shock, social humiliation, besmirched reputation, and similar

Rules of Civil Procedure with certiorari as an original special civil action under Rule 65 of the

injury to respondents to justify the award of moral and exemplary damages. Nonetheless, in

same Rules. In Paa v. Court of Appeals,12 we stated that:

the absence of competent proof on the specific amounts of actual damages suffered by

There are, of course, settled distinctions between a petition for review as a mode of appeal

respondents, the appellate court awarded them nominal damages.

and a special civil action forcertiorari, thus:

The dispositive portion of the appellate courts decision reads thus:

WHEREFORE, foregoing considered, the instant petition is hereby GIVEN DUE COURSE

1. a.In appeal by certiorari, the petition is based on questions of law which the

and is GRANTED. The Decision issued in NLRC NCR CASE No. 00-12-08656-94 dated

appellant desires the appellate court to resolve. In certiorari as an original action,

March 23, 1998, the Decision issued in NLRC CA No. 015710-98 dated November 27, 1998

the petition raises the issue as to whether the lower court acted without or in excess

and the Resolution dated August 31, 1999, are hereby ANNULLED and SET ASIDE, and a

of jurisdiction or with grave abuse of discretion.

new judgment is hereby entered ordering the petitioners to pay as follows:

2. b.Certiorari, as a mode of appeal, involves the review of the judgment, award or

final order on the merits. The original action for certiorari may be directed against

1. 1)the private respondent Numeriano Layoc, Jr., the amount of One Hundred
Twenty-Five Thousand (P125,000.00) Pesos per year, representing overtime pay

an interlocutory order of the court prior to appeal from the judgment or where
there is no appeal or any other plain, speedy or adequate remedy.

for overtime services that he could have rendered computed from the date of the

3. c.Appeal by certiorari must be made within the reglementary period for appeal. An

implementation of the no time card policy or on January 1993 and up to the date

original action forcertiorari may be filed not later than sixty (60) days from notice

of his retirement on June 30, 1997; and

2. 2)the other private respondents, the amount of Ten Thousand (P10,000.00) Pesos
each as nominal damages.

of the judgment, order or resolution sought to be assailed.

4. d.Appeal by certiorari stays the judgment, award or order appealed from. An
original action for certiorari, unless a writ of preliminary injunction or a
temporary restraining order shall have been issued, does not stay the challenged

SO ORDERED.

11

Dissatisfied with the appellate courts ruling, petitioners filed a petition before this Court.

proceeding.
5. e.In appeal by certiorari, the petitioner and respondent are the original parties to the

The Issues

action, and the lower court or quasi-judicial agency is not to be impleaded.

Petitioners ask whether the circumstances in the present case constitute an exception to the

In certiorari as an original action, the parties are the aggrieved party against the

rule that supervisory employees are not entitled to overtime pay.

lower court or quasi-judicial agency and the prevailing parties, who thereby

Respondents, on the other hand, question petitioners procedure. Respondents submit that

respectively become the petitioner and respondents.

the Court should dismiss the present petition because petitioners did not file a motion for
reconsideration before the appellate court.

1. f.In certiorari for purposes of appeal, the prior filing of a motion for

The Ruling of the Court

reconsideration is not required (Sec. 1, Rule 45); while in certiorari as an

The petition has merit.

original action, a motion for reconsideration is a condition precedent (VillaRey Transit vs. Bello, L-18957, April 23, 1963),subject to certain exceptions.
2. g.In appeal by certiorari, the appellate court is in the exercise of its appellate
jurisdiction and power of review for, while in certiorari as an original action, the

higher court exercises original jurisdiction under its power of control and

Number of Hours

Overtime Pay

supervision over the proceedings of lower courts. (Emphasis added)

Worked Overtime

Received (in Pesos)

1976

No record

No record

Respondents contention that the present petition should be denied for failure to file a motion

1977

No record

No record

for reconsideration before the appellate court is, therefore, incorrect.

1978

1,424.00

5,214.88

1979

1,312.56

5,189.30

for Supervisory Employees

1980

1,357.50

5,155.71

Both petitioners and respondents agree that respondents are supervising security guards and,

1981

474.00

1,781.81

thus, managerial employees. The dispute lies on whether respondents are entitled to render

1982Appointment as

No record

No record

overtime work and receive overtime pay despite the institution of the no time card policy

supervising security guard

because (1) SMC previously allowed them to render overtime work and paid them

1983

947.50

6,304.33

accordingly, and (2) supervising security guards in other SMC divisions are allowed to render

1984

889.00

8,937.00

overtime work and receive the corresponding overtime pay.

1985

898.00

12,337.47

Article 8213 of the Labor Code states that the provisions of the Labor Code on working

1986

1,086.60

18,085.34

conditions and rest periods shall not apply to managerial employees. The other provisions in

1987

1,039.50

32,109.85

the Title include normal hours of work (Article 83), hours worked (Article 84), meal periods

1988

633.00

29,126.10

(Article 85), night shift differential (Article 86), overtime work (Article 87), undertime not

1989

723.50

39,594.55

offset by overtime (Article 88), emergency overtime work (Article 89), and computation of

1990

376.50

21,873.33

additional compensation (Article 90). It is thus clear that, generally, managerial employees

1991

149.50

12,694.97

such as respondents are not entitled to overtime pay for services rendered in excess of eight

1992

144.00

17,403.38

hours a day. Respondents failed to show that the circumstances of the present case constitute

1993

0.50

47.69

an exception to this general rule.

1994

0.00

0.00

1995

0.00

0.00

Overtime

Work

and

Overtime

Pay

14

First, respondents assert that Article 100 of the Labor Code prohibits the elimination or
diminution of benefits. However, contrary to the nature of benefits, petitioners did not freely

Aside from their allegations, respondents were not able to present anything to prove that

give the payment for overtime work to respondents. Petitioners paid respondents overtime pay

petitioners were obliged to permit respondents to render overtime work and give them the

as compensation for services rendered in addition to the regular work hours.

corresponding overtime pay. Even if petitioners did not institute a no time card policy,

Respondents rendered overtime work only when their services were needed after their

respondents could not demand overtime pay from petitioners if respondents did not render

regular working hours and only upon the instructions of their superiors. Respondents even

overtime work. The requirement of rendering additional service differentiates overtime pay

differ as to the amount of overtime pay received on account of the difference in the additional

from benefits such as thirteenth month pay or yearly merit increase. These benefits do not

hours of services rendered. To illustrate, Layocs records15 show the varying number of hours

require any additional service from their beneficiaries. Thus, overtime pay does not fall within

of overtime work he rendered and the varying amounts of overtime pay he received from the

the definition of benefits under Article 100 of the Labor Code.16

years 1978 to 1981 and from 1983 to 1994:

Second,

Number of Hours

Overtime Pay

Worked Overtime

Received (in Pesos)

1974 Appointmentas guard

No record

No record

1975

No record

No record

respondents

allege

that

petitioners

discriminated

against

them vis--

vis supervising security guards in other SMC divisions. Respondents state that they should be
treated in the same manner as supervising security guards in the Packaging Products Division,
who are allowed to render overtime work and thus receive overtime pay. Petitioners counter

by saying that the no time card policy was applied to all supervisory personnel in the Beer
Division. Petitioners further assert that there would be discrimination if respondents were
treated differently from other supervising security guards within the Beer Division or if other
supervisors in the Beer Division are allowed to render overtime work and receive overtime
pay. The Beer Division merely exercised its management prerogative of treating its
supervisors differently from its rank-and-file employees, both as to responsibilities and
compensation, as they are not similarly situated.
We agree with petitioners position that given the discretion granted to the various
divisions of SMC in the management and operation of their respective businesses and in the
formulation and implementation of policies affecting their operations and their personnel, the
no time card policy affecting all of the supervisory employees of the Beer Division is a valid
exercise of management prerogative. The no time card policy undoubtedly caused pecuniary
loss to respondents.17 However, petitioners granted to respondents and other supervisory
employees a 10% across-the-board increase in pay and night shift allowance, in addition to
their yearly merit increase in basic salary, to cushion the impact of the loss. So long as a
companys management prerogatives are exercised in good faith for the advancement of the
employers interest and not for the purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements, this Court will uphold them. 18
WHEREFORE, the petition is GRANTED. The Decision dated 29 August 2001 of the
Court of Appeals in CA-G.R. SP No. 55838 ordering petitioners San Miguel Corporation,
Andres Soriano III, Francisco C. Eizmendi, Jr., and Faustino F. Galang to pay Numeriano
Layoc, Jr. overtime pay and the other respondents nominal damages is SET ASIDE. The
complaint of respondents is DISMISSED.
SO ORDERED.
Quisumbing (Chairperson), Carpio-Morales,Tinga and Velasco, Jr., JJ., concur.
Petition granted, judgment set aside.
Notes.An employee who falls squarely under the category of officers or members of a
managerial staff is exempted from payment of overtime pay, premium pay for holidays and
rest days and service incentive leave pay. (Salazar vs. National Labor Relations
Commission, 256 SCRA 273 [1996])
An overtime boycott or work slowdown by the employees constitutes a violation of
the CBA which prohibits the union or employee, during the existence of the CBA, to stage a
strike or engage in slowdown or interruption of work. (Interphil Laboratories Employees
Union-FFW vs. Interphil Laboratories, Inc.,372 SCRA 658 [2001])
o0o

No. L-73155. July 11, 1986.*

PATRICIO TAN, FELIX FERRER, JUAN M. HAGAD, SERGIO HILADO, VIRGILIO

Respondents would be no different from one who hurries to pray at the temple but then spits at
the idol therein.

GASTON, CONCHITA MINAYA, TERESITA ESTACIO, DESIDERIO DEFERIA,

Same; Same; Same; A petition that raises the issue of compliance with Constitutional

ROMEO GAMBOA, ALBERTO LACSON, FE HOFILENA, EMILY JISON, NIEVES

requirements is proper subject of judicial inquiry.We find no merit in the submission of the

LOPEZ AND CECILIA MAGSAYSAY, petitioners, vs. THE COMMISSION ON

respondents that the petition should be dismissed because the motive and wisdom in enacting

ELECTIONS and THE PROVINCIAL TREASURER OF NEGROS OCCIDENTAL,

the law may not be challenged by petitioners. The principal point raised by the petitioners is

respondents.

not the wisdom and motive in enacting the law but the infringement of the Constitution which
is a proper subject of judicial inquiry.

Constitutional Law; Election Law; Local Governments;Moot and Academic; Fact that

Same; Same; Same; Statutes; Evidence; Courts; Motives behind enactment of a statute

the plebiscite which the petition at bar sought to stop had already been held and officials of

are factual in nature that the Supreme Court cannot try.Petitioners discussion regarding

the new province appointed does not make the petition moot, as the petition raises an issue of

the motives behind the enactment of B.P. Blg. 885 to say the least, are most enlightening and

constitutional dimension.It can be plainly seen that the aforecited constitutional provision

provoking but are factual issues the Court cannot properly pass upon in this case. Mention by

makes it imperative that there be first obtained the approval of a majority of votes in the

petitioners of the unexplained changes or differences in the proposed Parliamentary Bill No.

plebiscite in the unit or units affected whenever a province is created, divided or merged and

3644 and the enacted Batas Pambansa Blg. 885; the swift and surreptitious manner of passage

there is substantial alteration of the boundaries. It is thus inescapable to conclude that the

and approval of said law; the abrupt scheduling of the plebiscite; the reference to news articles

boundaries of the existing province of Negros Occidental would necessarily be substantially

regarding the questionable conduct of the said plebiscite held on January 3, 1986; all serve as

altered by the division of its existing boundaries in order that there can be created the proposed

interesting reading but are not the decisive matters which should be reckoned in the resolution

new province of Negros del Norte. Plain and simple logic will demonstrate than that two

of this case.

political units would be affected. The first would be the parent province of Negros Occidental

Same; Same; Same; Ruling in the case of Paredes vs. Hon. Executive Secretary (128

because its boundaries would be substantially altered. The other affected entity would be

SCRA 6) is not a doctrinal, binding precedent where the Supreme Court is not sure of itself

composed of those in the area subtracted from the mother province to constitute the proposed

and the decision itself says that that case gives considerable leeway for the Court to exercise

province of Negros del Norte.

its discretion in resolving the issue of whether or not residents of a mother barangay should

Same; Same; Same; A plebiscite for creating a new province should include the

participate in the plebiscite to create a new barangay.This Court is not unmindful of this

participation of the residents of the mother province for the plebiscite to conform to the

solitary case alluded to by respondents. What is, however, highly significant are the prefatory

constitutional requirements.We find no way to reconcile the holding of a plebiscite that

statements therein stating that said case is one of those cases where the discretion of the

should conform to said constitutional requirement but eliminates the participation of either of

Court is allowed considerable leeway and that there is indeed an element of ambiguity in the

these two component political units. No amount of rhetorical flourishes can justify exclusion

use of the expression unit or units affected. The ruling rendered in said case was based on a

of the parent province in the plebiscite because of an alleged intent on the part of the authors

claimed prerogative of the Court then to exercise its discretion on the matter. It did not resolve

and implementors of the challenged statute to carry out what is claimed to be a mandate to

the question of how the pertinent provision of the Constitution should be correctly interpreted.

guarantee and promote autonomy of local government units. The alleged good intentions

The ruling in the aforestated case of Paredes vs. The Honorable Executive Secretary, et al.

cannot prevail and overrule the cardinal precept that what our Constitution categorically

(supra) should not be taken as a doctrinal or compelling precedent when it is acknowledged

directs to be done or imposes as a requirement must first be observed, respected and complied

therein that it is plausible to assert, as petitioners do, that when certain Barangays are

with. No one should be allowed to pay homage to a supposed fundamental policy intended to

separated from a parent municipality to form a new one, all the voters therein are affected.

guarantee and promote autonomy of local government units but at the same time transgress,

Same; Same; Same; When the law says the plebiscite shall be conducted in the areas

ignore and disregard what the Constitution commands in Article XI Section 3 thereof.

affected this means that residents of the political entity who stand to be economically
dislocated by the separation of a portion thereof have the right to participate in said

plebiscite.It is a well accepted rule that in ascertaining the meaning of a particular

territory in the first paragraph of Section 197 is meant to be synonymous with land area

provision that may give rise to doubts, the intent of the framers and of the people, may be

only. The words and phrases used in a statute should be given the meaning intended by the

gleaned from the provisions in pari materia. Parliamentary Bill No. 3644 which proposed the

legislature (82 C.J.S., p. 636). The sense in which the words are used furnished the rule of

creation of the new province of Negros del Norte recites in Sec. 4 thereof that the plebiscite

construction (In re Winton Lumber Co., 63 p. 2d., p. 664).

shall be conducted in the areas affected within a period of one hundred and twenty days from

Same; Same; Same; Same; Jurisdiction; The Supreme Court will not pass upon the

the approval of this Act. As this draft legislation speaks of areas, what was contemplated

claim that enactment of a law is marred by dirty tricks and undue haste.It is not for

evidently are plurality of areas to participate in the plebiscite. Logically, those to be included

this Court to affirm or reject such matters not only because the merits of this case can be

in such plebiscite would be the people living in the area of the proposed new province and

resolved without need of ascertaining the real motives and wisdom in the making of the

those living in the parent province. This assumption will be consistent with the requirements

questioned law. No proper challenge on those grounds can also be made by petitioners in this

set forth in the Constitution.

proceeding. Neither may this Court venture to guess the motives or wisdom in the exercise of

Same; Same; Same; Where the law authorizing the holding of a plebiscite is

legislative powers. Repudiation of improper or unwise actions taken by tools of a political

unconstitutional, the Court cannot authorize the holding of a new one.The Court is prepared

machinery rests ultimately, as recent events have shown, on the electorate and the power of a

to declare the said plebiscite held on January 3, 1986 as null and void and violative of the

vigilant people.

provisions of Sec. 3, Article XI of the Constitution. The Court is not, however, disposed to
direct the conduct of a new plebiscite, because We find no legal basis to do so. With

TEEHANKEE, C.J., concurring:

constitutional infirmity attaching to the subject Batas Pambansa Blg. 885 and also because the
creation of the new province of Negros del Norte is not in accordance with the criteria
established in the Local Government Code, the factual and legal basis for the creation of such
new province which should justify the holding of another plebiscite does not exist.
Same; Same; Same; Statutes; Use of the word territory in Sec. 197 of the Local
Government Code refers only to the land mass, not to the waters, comprising a political
entity.The last sentence of the first paragraph of Section 197 is most revealing. As so stated
therein the territory need not be contiguous if it comprises two or more islands. The use of
the word territory in this particular provision of the Local Government Code and in the very
last sentence thereof, clearly reflects that territory as therein used, has reference only to the
mass of land area and excludes the waters over which the political unit exercises control. Said
sentence states that the territory need not be contiguous. Contiguous means (a) in physical
contact; (b) touching along all or most of one side; (c) near, next, or adjacent (Websters New
World Dictionary, 1972 Ed., p. 307). Contiguous, when employed as an adjective, as in the
above sentence, is only used when it describes physical contact, or a touching of sides of two
solid masses of matter. The meaning of particular terms in a statute may be ascertained by
reference to words associated with or related to them in the statute (Animal Rescue League vs.
Assessors, 138 A.L.R., p. 110). Therefore, in the context of the sentence above, what need not

Constitutional Law; Local Governments; Statutes;Courts; As petitioners asserted the

intent in enacting the law at bar was to create a new province before the Presidential elections
on Feb. 7, 1984 so that the resources of the new entity can be used for political purposes.
The scenario, as petitioners urgently asserted, was to have the creation of the new Province
a fait accompli by the time elections are held on February 7, 1986. The transparent purpose is
unmistakably so that the new Governor and other officials shall by then have been installed in
office, ready to function for purposes of the election for President and Vice-President. Thus,
the petitioners reported after the event: With indecent haste, the plebiscite was held; Negros
del Norte was set up and proclaimed by President Marcos as in existence; a new set of
government officials headed by Governor Armando Gustilo was appointed; and, by the time
the elections were held on February 7, 1986, the political machinery was in place to deliver the
solid North to ex-President Marcos. The rest is history. What happened in Negros del Norte
during the electionsthe unashamed use of naked power and resourcescontributed in no
small way to arousing peoples power and steel the ordinary citizen to perform deeds of
courage and patriotism that makes one proud to be a Filipino today.
Same; Same; Same; Same; The challenged B.P. 885 is unconstitutional as it excluded
the voters of the mother province from participating in the plebiscite.The challenged Act is

be contiguous is the territorythe physical mass of land area. There would arise no need

manifestly void and unconstitutional. Consequently, all the implementing acts complained of,

for the legislators to use the word contiguous if they had intended that the term territory

viz. the plebiscite, the proclamation of a new province of Negros del Norte and the

embrace not only land area but also territorial waters. It can be safely concluded that the word

appointment of its officials are equally void. The limited holding of the plebiscite only in the

areas of the proposed new province (as provided by Section 4 of the Act) to the exclusion of

Gamboa & Hofilea Law Office for petitioners.

the voters of the remaining areas of the integral province of Negros Occidental (namely, the
three cities of Bacolod, Bago and La Carlota and the Municipalities of La Castellana, Isabela,

ALAMPAY, J.:

Moises Padilla, Pontevedra, Hinigaran, Himamaylan, Kabankalan, Murcia, Valladolid, San

Enrique, Hog, Cauayan, Hinoba-an and Sipalay and Candoni), grossly contravenes and
disregards the mandate of Article XI, section 3 of the then prevailing 1973 Constitution that no

Prompted by the enactment of Batas Pambansa Blg. 885An Act Creating a New Province in
the Island of Negros to be known as the Province of Negros del Norte, which took effect on

province may be created or divided or its boundary substantially altered without the approval

December 3, 1985, Petitioners herein, who are residents of the Province of Negros Occidental,

of a majority of the votes in a plebiscite in the unit or units affected. It is plain that all the

in the various cities and municipalities therein, on December 23, 1985, filed with this Court a

cities and municipalities of the province of Negros Occidental, not merely those of the
proposed new province, comprise the units affected. It follows that the voters of the whole and
entire province of Negros Occidental have to participate and give their approval in the
plebiscite, because the whole province is affected by its proposed division and substantial
alteration of its boundary. To limit the plebiscite to only the voters of the areas to be
partitioned and seceded from the province is as absurd and illogical as allowing only the
secessionists to vote for the secession that they demanded against the wishes of the majority
and to nullify the basic principle of majority rule.
Same; Same; Same; Mandamus; Courts may issue a mandatory writ to restore matters
at status quo ante.The argument of fait accompli, viz. that the railroaded plebiscite of
January 3, 1986 was held and can no longer be enjoined and that the new province of Negros
del Norte has been constituted, begs the issue of invalidity of the challenged Act. This Court
has always held that it does not look with favor upon parties racing to beat an injunction or
restraining order which they have reason to believe might be forthcoming from the Court by
virtue of the filing and pendency of the appropriate petition therefor. Where the restraining
order or preliminary injunction are found to have been properly issued, as in the case at
bar, mandatory writsshall be issued by the Court to restore matters to the status quo ante.
(Banzon v. Cruz, 45 SCRA 475, 506 [1972]). Where, as in this case, there was somehow a
failure to properly issue the restraining order stopping the holding of the illegal plebiscite, the
Court will issue the mandatory writ or judgment to restore matters to the status quo ante and
restore the territorial integrity of the province of Negros Occidental by declaring the
unconstitutionality of the challenged Act and nullifying the invalid proclamation of the
proposed new province of Negros del Norte and the equally invalid appointment of its
officials.
PETITION for prohibition to stop Commission on Elections from conducting a plebiscite.

case for Prohibition for the purpose of stopping respondents Commission on Elections from
conducting the plebiscite which, pursuant to and in implementation of the aforesaid law, was
scheduled for January 3, 1986.
Said law provides:
SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of Calatrava,
Taboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador Benedicto, all in
the northern portion of the Island of Negros, are hereby separated from the province to be
known as the Province of Negros del Norte.
SEC. 2. The boundaries of the new province shall be the southern limits of the City of
Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south and the
territorial limits of the northern portion to the Island of Negros on the west, north and east,
comprising a territory of 4,019.95 square kilometers more or less.
SEC. 3. The seat of government of the new province shall be the City of Cadiz.
SEC. 4. A plebiscite shall be conducted in the proposed new province which are the
areas affected within a period of one hundred and twenty days from the approval of this Act.
After the ratification of the creation of the Province of Negros del Norte by a majority of the
votes cast in such plebiscite, the President of the Philippines shall appoint the first officials of
the province.
SEC. 5. The Commission on Elections shall conduct and supervise the plebiscite herein
provided, the expenses for which shall be charged to local funds.
SEC. 6. This Act shall take effect upon its approval. (Rollo, pp. 23-24)
Petitioners contend that Batas Pambansa Blg. 885 is unconstitutional and it is not in complete
accord with the Local Government Code as in Article XI, Section 3 of our Constitution, it is
expressly mandated that
Sec. 3. No province, city, municipality or barrio may be created, divided, merged, abolished,
or its boundary substantially altered, except in accordance with the criteria established in the
local government code, and subject to the approval by a majority of the votes in a plebiscite in

The facts are stated in the opinion of the Court.

the unit or units affected.

Section 197 of the Local Government Code enumerates the conditions which must exist to

the respondent Commission on Elections, to schedule the holding of another plebiscite at

provide the legal basis for the creation of a provincial unit and these requisites are:

which all the qualified voters of the entire Province of Negros Occidental as now existing shall

SEC. 197. Requisites for Creation.A province may be created if it has a territory of at least

participate, at the same time making pronouncement that the plebiscite held on January 3,

three thousand five hundred square kilometers, a population of at least five hundred thousand

1986 has no legal effect, being a patent legal nullity;

persons, an average estimated annual income, as certified by the Ministry of Finance, of not

And that a similar writ of Prohibition be issued, directed to the respondent Provincial

less than ten million pesos for the last three consecutive years, and its creation shall not reduce

Treasurer, to desist from ordering the release of any local funds to answer for expenses

the population and income of the mother province or provinces at the time of said creation to

incurred in the holding of such plebiscite until ordered by the Court. (Rollo, pp. 19-10).

less than the minimum requirements under this section. The territory need not be contiguous if

Petitioners further prayed that the respondent COMELEC hold in abeyance the issuance of

it comprises two or more islands.

any official proclamation of the results of the aforestated plebiscite.

The average estimated annual income shall include the income alloted for both the

During the pendency of this case, a motion that he be allowed to appear as amicus curiae

general and infrastructural funds, exclusive of trust funds, transfers and nonrecurring income.

in this case (dated December 27, 1985 and filed with the Court on January 2, 1986) was

(Rollo, p. 6)

submitted by former Senator Ambrosio Padilla. Said motion was granted in Our resolution of

Due to the constraints brought about by the supervening Christmas holidays during which the

January 2, 1986.

Court was in recess and unable to timely consider the petition, a supplemental pleading was

Acting on the petition, as well as on the supplemental petition for prohibition with

filed by petitioners on January 4, 1986, averring therein that the plebiscite sought to be

preliminary injunction with prayer for restraining order, the Court, on January 7, 1986

restrained by them was held on January 3, 1986 as scheduled but that there are still serious

resolved, without giving due course to the same, to require respondents to comment, not to file

issues raised in the instant case affecting the legality, constitutionality and validity of such

a motion to dismiss. Complying with said resolution, public respondents, represented by the

exercise which should properly be passed upon and resolved by this Court.

Office of the Solicitor General, on January 14, 1986, filed their Comment, arguing therein that

The plebiscite was confined only to the inhabitants of the territory of Negros del Norte,

the challenged statuteBatas Pambansa 885, should be accorded the presumption of legality.

namely: the Cities of Silay, Cadiz, and San Carlos, and the municipalities of Calatrava,

They submit that the said law is not void on its face and that the petition does not show a clear,

Taboso, Escalante, Sagay, Manapla, Victorias, E.B. Magalona and Don Salvador Benedicto.

categorical and undeniable demonstration of the supposed infringement of the Constitution.

Because of the exclusions of the voters from the rest of the province of Negros Occidental,

Respondents state that the powers of the Batasang Pambansa to enact the assailed law is

petitioners found need to change the prayer of their petition to the end that the constitutional

beyond question. They claim that Batas Pambansa Blg. 885 does not infringe the Constitution

issues which they have raised in the action will be ventilated and given final resolution. At

because the requisites of the Local Government Code have been complied with. Furthermore,

the same time, they asked that the effects of the plebiscite which they sought to stop be

they submit that this case has now become moot and academic with the proclamation of the

suspended until the Supreme Court shall have rendered its decision on the very fundamental

new Province of Negros del Norte.

and far-reaching questions that petitioners have brought out.

Respondents argue that the remaining cities and municipalities of the Province of Negros

Acknowledging in their supplemental petition that supervening events rendered moot the

Occidental not included in the area of the new Province of Negros del Norte, do not fall within

prayer in their initial petition that the plebiscite scheduled for January 3, 1986, be enjoined,

the meaning and scope of the term unit or units affected, as referred to in Section 3 of Art.

petitioners plead, nevertheless, that

XI of our Constitution. On this reasoning, respondents maintain that Batas Pambansa Blg. 885

x x x a writ of Prohibition be issued, directed to Respondent Commission on Elections to

does not violate the Constitution, invoking and citing the case of Governor Zosimo Paredes

desist from issuing official proclamation of the results of the plebiscite held on January 3,

versus the Honorable Executive Secretary to the President, et al. (G.R. No. 55628, March 2,

1986.

1984 (128 SCRA 61), particularly the pronouncements therein, hereunder quoted:

Finding that the exclusion and non-participation of the voters of the Province of Negros
Occidental other than those living within the territory of the new province of Negros del Norte

1. 1.Admittedly, this is one of those cases where the discretion of the Court is allowed

to be not in accordance with the Constitution, that a writ of Mandamus be issued, directed to

considerable leeway. There is indeed an element of ambiguity in the use of the

expression unit or units affected. It is plausible to assert as petitioners do that

creating said new province plainly declares that the territorial boundaries of Negros del Norte

when certain Barangays are separated from a parent municipality to form a new

comprise an area of 4,019.95 square kilometers, more or less.

one, all the voters therein are affected. It is much more persuasive, however, to

As a final argument, respondents insist that instant petition has been rendered moot and

contend as respondents do that the acceptable construction is for those voters, who

academic considering that a plebiscite has been already conducted on January 3, 1986; that as

are not from the barangays to be separated, should be excluded in the plebiscite.

a result thereof, the corresponding certificate of canvass indicated that out of 195,134 total

2. 2.For one thing, it is in accordance with the settled doctrine that between two

votes cast in said plebiscite, 164,734 were in favor of the creation of Negros del Norte and

possible constructions, one avoiding a finding of unconstitutionally and the other

30,400 were against it; and because the affirmative votes cast represented a majority of the

yielding such a result, the former is to be preferred. That which will save, not that

total votes cast in said plebiscite, the Chairman of the Board of Canvassers proclaimed the

which will destroy, commends itself for acceptance. After all, the basic

new province which shall be known as Negros del Norte. Thus, respondents stress the fact

presumption all these years is one of validity. x x x

that following the proclamation of Negros del Norte province, the appointments of the
officials of said province created were announced. On these considerations, respondents urge

1. 3.x x x. Adherence to such philosophy compels the conclusion that when there are
indications that the inhabitants of several barangays are inclined to separate from a
parent municipality they should be allowed to do so. What is more logical than to
ascertain their will in a plebiscite called for that purpose. It is they, and they alone,

that this case should be dismissed for having been rendered moot and academic as the creation
of the new province is now a fait accompli.
In resolving this Case, it will be useful to note and emphasize the facts which appear to be
agreed to by the parties herein or stand unchallenged.

who shall constitute the new unit. New responsibilities will be assumed. New

Firstly, there is no disagreement that the Provincial Treasurer of the Province of Negros

burdens will be imposed. A new municipal corporation will come into existence.

Occidental has not disbursed, nor was required to disburse any public funds in connection with

Its birth will be a matter of choicetheir choice. They should be left alone then to

the plebiscite held on January 3, 1986 as so disclosed in the Comment to the Petition filed by

decide for themselves. To allow other voters to participate will not yield a true

the respondent Provincial Treasurer of Negros Occidental dated January 20, 1986 (Rollo, pp.

expression of their will. They may even frustrate it. That certainly will be so if

36-37). Thus, the prayer of the petitioners that said Provincial Treasurer be directed by this

they vote against it for selfish reasons, and they constitute the majority. That is not

Court to desist from ordering the release of any public funds on account of such plebiscite

to abide by the fundamental principle of the Constitution to promote local

should not longer deserve further consideration.

autonomy, the preference being for smaller units. To rule as this Tribunal does is

Secondly, in Parliamentary Bill No. 3644 which led to the enactment of Batas Pambansa

to follow an accepted principle of constitutional construction, that in ascertaining

Blg. 885 and the creation of the new Province of Negros del Norte, it expressly declared in

the meaning of a particular provision that may give rise to doubts, the intent of the

Sec. 2 of the aforementioned Parliamentary Bill, the following:

framers and of the people may be gleaned from provisions in pari materia.

SEC. 2. The boundaries of the new province shall be the southern limits of the City of Silay,
the Municipality of Salvador Benedicto and the City of San Carlos on the South and the

Respondents submit that said ruling in the aforecited case applies equally with force in the

natural boundaries of the northern portion of the Island of Negros on the West, North and

case at bar. Respondents also maintain that the requisites under the Local Government Code

East, containing an area of 285,656 hectares more or less. (Italics supplied).

(P.D. 337) for the creation of the new province of Negros del Norte have all been duly

However, when said Parliamentary Bill No. 3644 was very quickly enacted into Batas

complied with. Respondents discredit petitioners allegations that the requisite area of 3,500

Pambansa Blg. 885, the boundaries of the new Province of Negros del Norte were defined

square kilometers as so prescribed in the Local Government Code for a new province to be

therein and its boundaries then stated to be as follows:

created has not been satisfied. Petitioners insist that the area which would comprise the new

SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of Calatrava,

province of Negros del Norte, would only be about 2,856.56 square kilometers and which

Toboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador Benedicto, all in

evidently would be lesser than the minimum area prescribed by the governing statute.

the northern portion of the Island of Negros, are hereby separated from the Province of Negros

Respondents, in this regard, point out and stress that Section 2 of Batas Pambansa Blg. 885

Occidental and constituted into a new province to be known as the Province of Negros del

area comprising Don Salvador municipality, one of the component units of the new province,

Norte.

was derived from the City of San Carlos and from the Municipality of Calatrava, Negros

SEC. 1. The boundaries of the new province shall be the southern limits of the City of

Occidental, and added thereto was a portion of about one-fourth the land area of the town of

Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south and the

Murcia, Negros Occidental. It is significant to note the uncontroverted submission of

territorial limits of the northern portion of the Island of Negros on the West, North and East,

petitioners that the total land area of the entire municipality of Murcia, Negros Occidental is

comprising a territory of 4,019.95 square kilometers more or less.

only 322.9 square kilometers (Exh. D, Rollo, p. 91). One-fourth of this total land area of

Equally accepted by the parties is the fact that under the certification issued by Provincial

Murcia that was added to the portions derived from the land area of Calatrava, Negros

Treasurer Julian L. Ramirez of the Province of Negros Occidental, dated July 16, 1985, it was

Occidental and San Carlos City (Negros Occidental) would constitute, therefore, only 80.2

therein certified as follows:

square kilometers. This area of 80.2 square kilometers if then added to 2,685.2 square

x x x

kilometers, representing the total land area of the Cities of Silay, San Carlos and Cadiz and the

xxx

xxx

This is to certify that the following cities and municipalities of Negros Occidental have

Municipalities of E.R. Magalona, Victorias, Manapla, Sagay, Escalante, Taboso and

the land area as indicated hereunder based on the Special Report No. 3, Philippines 1980,

Calatrava, will result in approximately an area of only 2,765.4 square kilometers using as basis

Population, Land Area and Density: 1970, 1975 and 1980 by the National Census and

the Special Report, Philippines 1980, Population, Land Area and Density: 1970, 1975 and

Statistics Office, Manila.

1980 of the National Census and Statistics Office, Manila (see Exhibit C, Rollo, p. 90).
Land Area

No controversion has been made by respondent with respect to the allegations of

(Sq. Km.)

petitioners that the original provision in the draft legislation, Parliamentary Bill No. 3644,

1.

Silay City...................................................................

214.8

reads:

2.

E.B. Magalona ...........................................................

113.3

SEC. 4. A plebiscite shall be conducted in the areas affected within a period of one hundred

3.

Victorias.....................................................................

133.9

and twenty days from the approval of this Act. After the ratification of the creation of the

4.

Manapla .....................................................................

112.9

Province of Negros del Norte by a majority of the votes cast in such plebiscite, the President

5.

Cadiz City..................................................................

516.5

shall appoint the first officials of the new province.

6.

Sagay .........................................................................

389.6

7.

Escalante....................................................................

124.0

above provision. The statute,as modified, provides that the requisite plebiscite shall

8.

Toboso .......................................................................

123.4

beconducted in the proposed new province which are the areas affected.

9.

Calatrava....................................................................

504.5

10.

San Carlos City..........................................................

11.

Don Salvador Benedicto..................................

However, when Batas Pambansa Blg. 885 was enacted, therewas a significant change in the

451.3

It is this legislative determination limiting the plebiscite exclusively to the cities and towns

(not available

which would comprise the new province that is assailed by the petitioners as violative of the

This certification is issued upon the request of Dr. Patricio Y. Tan for whatever purpose it

provisions of our Constitution. Petitioners submit that Sec. 3, ART XI thereof, contemplates a

may serve him.

plebiscite that would be held in the unit or units affected by the creation of the new province
(SGD.) JULIAN L. RAMIREZ

as a result of the consequent division of and substantial alteration of the boundaries of the

Provincial Treasurer (Exh. C of

existing province. In this instance, the voters in the remaining areas of the province of Negros
Occidental should have been allowed to participate in the questioned plebiscite.

Petition, Rollo, p. 90).

Although in the above certification it is stated that the land area of the relatively new
municipality of Don Salvador Benedicto is not available, it is an uncontradicted fact that the

Considering that the legality of the plebiscite itself is challenged for non-compliance with
constitutional requisites, the fact that such plebiscite had been held and a new province
proclaimed and its officials appointed, the case before Us cannot truly be viewed as already
moot and academic. Continuation of the existence of this newly proclaimed province which

petitioners strongly profess to have been illegally born, deserves to be inquired into by this

province of Negros Occidental would necessarily be substantially altered by the division of its

Tribunal so that, if indeed, illegality attaches to its creation, the commission of that error

existing boundaries in order that there can be created the proposed new province of Negros del

should not provide the very excuse for perpetuation of such wrong. For this Court to yield to

Norte. Plain and simple logic will demonstrate than that two political units would be affected.

the respondents urging that, as there has been fait accompli, then this Court should passively

The first would be the parent province of Negros Occidental because its boundaries would be

accept and accede to the prevailing situation is an unacceptable suggestion. Dismissal of the

substantially altered. The other affected entity would be composed of those in the area

instant petition, as respondents so propose is a proposition fraught with mischief.

subtracted from the mother province to constitute the proposed province of Negros del Norte.

Respondents submission will create a dangerous precedent. Should this Court decline now to

We find no way to reconcile the holding of a plebiscite that should conform to said

perform its duty of interpreting and indicating what the law is and should be, this might tempt

constitutional requirement but eliminates the participation of either of these two component

again those who strut about in the corridors of power to recklessly and with ulterior motives,

political units. No amount of rhetorical flourishes can justify exclusion of the parent province

create, merge, divide and/or alter the boundaries of political subdivisions, either brazenly or

in the plebiscite because of an alleged intent on the part of the authors and implementors of the

stealthily, confident that this Court will abstain from entertaining future challenges to their

challenged statute to carry out what is claimed to be a mandate to guarantee and promote

acts ifthey manage to bring about a fait accompli.

autonomy of local government units. The alleged good intentions cannot prevail and overrule

In the light of the facts and circumstances alluded to by petitioners as attending to the

the cardinal precept that what our Constitution categorically directs to be done or imposes as a

unusually rapid creation of the instant province of Negros del Norte after a swiftly scheduled

requirement must first be observed, respected and complied with. No one should be allowed to

plebiscite, this Tribunal has the duty to repudiate and discourage the commission of acts which

pay homage to a supposed fundamental policy intended to guarantee and promote autonomy

run counter to the mandate of our fundamental law, done by whatever branch of our

of local government units but at the same time transgress, ignore and disregard what the

government. This Court gives notice that it will not look with favor upon those who may be

Constitution commands in Article XI Section 3 thereof. Respondents would be no different

hereafter inclined to ram through all sorts of legislative measures and then implement the same

from one who hurries to pray at the temple but then spits at the idol therein.

with indecent haste, even if such acts would violate the Constitution and the prevailing statutes

We find no merit in the submission of the respondents that the petition should be

of our land. It is illogical to ask that this Tribunal be blind and deaf to protests on the ground

dismissed because the motive and wisdom in enacting the law may not be challenged by

that what is already done is done. To such untenable argument the reply would be that, be this

petitioners. The principal point raised by the petitioners is not the wisdom and motive in

so, the Court, nevertheless, still has the duty and right to correct and rectify the wrong brought

enacting the law but the infringement of the Constitution which is a proper subject of judicial

to its attention.

inquiry.

On the merits of the case.

Petitioners discussion regarding the motives behind the enactment of B.P. Blg. 885 to say

Aside from the simpler factual issue relative to the land area of the new province of

the least, are most enlightening and provoking but are factual issues the Court cannot properly

Negros del Norte, the more significant and pivotal issue in the present case revolves around in

pass upon in this case. Mention by petitioners of the unexplained changes or differences in the

the interpretation and application in the case at bar of Article XI, Section 3 of the Constitution,

proposed Parliamentary Bill No. 3644 and the enacted Batas Pambansa Blg. 885; the swift and

which being brief and for convenience, We again quote:

surreptitious manner of passage and approval of said law; the abrupt scheduling of the

SEC. 3. No province, city, municipality or barrio may be created, divided, merged, abolished,

plebiscite; the reference to news articles regarding the questionable conduct of the said

or its boundary substantially altered, except in accordance with the criteria established in the

plebiscite held on January 3, 1986; all serve as interesting reading but are not the decisive

local government code, and subject to the approval by a majority of the votes in a plebiscite in

matters which should be reckoned in the resolution of this case.

the unit or units affected.

What the Court considers the only significant submissions lending a little support to

It can be plainly seen that the aforecited constitutional provision makes it imperative that there

respondents case is their reliance on the rulings and pronouncements made by this Court in

be first obtained the approval of a majority of votes in the plebiscite in the unit or units

the case of Governor Zosimo Paredes versus The Honorable Executive Secretary to the

affected whenever a province is created, divided or merged and there is substantial alteration

President, et al., G.R. No. 55628, March 2, 1984 (128 SCRA 6). In said case relating to a

of the boundaries. It is thus inescapable to conclude that the boundaries of the existing

plebiscite held to ratify the creation of a new municipality from existing barangays, this Court

upheld the legality of the plebiscite which was participated in exclusively by the people of the
barangay that would constitute the new municipality.

The environmental facts in the case before Us readily disclose that the subject matter
under consideration is of greater magnitude with concomitant multifarious complicated

This Court is not unmindful of this solitary case alluded to by respondents. What is,

problems. In the earlier case, what was involved was a division of a barangay which is the

however, highly significant are the prefatory statements therein stating that said case is one of

smallest political unit in the Local Government Code. Understandably, few and lesser

those cases where the discretion of the Court is allowed considerable leeway and that there

problems are involved. In the case at bar, creation of a new province relates to the largest

is indeed an element of ambiguity in the use of the expression unit or units affected.

political unit contemplated in Section 3, Art. XI of the Constitution. To form the new province

The ruling rendered in said case was based on a claimed prerogative of the Court then to

of Negros del Norte no less than three cities and eight municipalities will be subtracted from

exercise its discretion on the matter. It did not resolve the question of how the pertinent

the parent province of Negros Occidental. This will result in the removal of approximately

provision of the Constitution should be correctly interpreted. The ruling in the aforestated case

2,768.4 square kilometers from the land area of an existing province whose boundaries will be

of Paredes vs. The Honorable Executive Secretary, et al. (supra) should not be taken as a

consequently substantially altered. It becomes easy to realize that the consequent effects of the

doctrinal or compelling precedent when it is acknowledged therein that it is plausible to

division of the parent province necessarily will affect all the people living in the separate areas

assert, as petitioners do, that when certain Barangays are separated from a parent municipality

of Negros Occidental and the proposed province of Negros del Norte. The economy of the

to form a new one, all the voters therein are affected.

parent province as well as that of the new province will be inevitably affected, either for the

It is relevant and most proper to mention that in the aforecited case of Paredes vs.

better or for the worse. Whatever be the case, either or both of these political groups will be

Executive Secretary, invoked by respondents, We find very lucidly expressed the strong

affected and they are, therefore, the unit or units referred to in Section 3 of Article XI of the

dissenting view of Justice Vicente Abad Santos, a distinguished member of this Court, as he

Constitution which must be included in the plebiscite contemplated therein.

therein voiced his opinion, which We hereunder quote:

It is a well accepted rule that in ascertaining the meaning of a particular provision that
may give rise to doubts, the intent of the framers and of the people, may be gleaned from the

1. 2.x x x when the Constitution speaks of the unit or units affected it means all of

provisions in pari materia. Parliamentary Bill No. 3644 which proposed the creation of the

the people of the municipality if the municipality is to be divided such as in the

new province of Negros del Norte recites in Sec. 4 thereof that the plebiscite shall be

case at bar or all of the people of two or more municipalities if there be a merger. I

conducted in the areas affected within a period of one hundred and twenty days from the

see no ambiguity in the Constitutional provision.

approval of this Act. As this draft legislation speaks of areas, what was contemplated
evidently are plurality of areas to participate in the plebiscite. Logically, those to be included

This dissenting opinion of Justice Vicente Abad Santos is the forerunner of the ruling which

in such plebiscite would be the people living in the area of the proposed new province and

We now consider applicable to the case at bar. In the analogous case of Emilio C. Lopez, Jr.,

those living in the parent province. This assumption will be consistent with the requirements

versus the Honorable Commission on Elections, L-56022, May 31, 1985, 136 SCRA 633, this

set forth in the Constitution.

dissent was reiterated by Justice Abad Santos as he therein assailed as suffering from a

We fail to find any legal basis for the unexplained change made when Parliamentary Bill

constitutional infirmity a referendum which did not include all the people of Bulacan and

No. 3644 was enacted into Batas Pambansa Blg. 885 so that it is now provided in said

Rizal, when such referendum was intended to ascertain if the people of said provinces were

enabling law that the plebiscite shall be conducted in the proposed new province which are

willing to give up some of their towns to Metropolitan Manila. His dissenting opinion served

the areas affected. We are not disposed to agree that by mere legislative fiat the unit or units

as a useful guideline in the instant case.

affected referred in the fundamental law can be diminished or restricted by the Batasang

Opportunity to re-examine the views formerly held in said cases is now afforded the
present Court. The reasons in the mentioned cases invoked by respondents herein were
formerly considered acceptable because of the views then taken that local autonomy would be
better promoted. However, even this consideration no longer retains persuasive value.

Pambansa to cities and municipalities comprising the new province, thereby ignoring the
evident reality that there are other people necessarily affected.
In the mind of the Court, the change made by those responsible for the enactment of Batas
Pambansa Blg. 885 betrays their own misgivings. They must have entertained apprehensions
that by holding the plebiscite only in the areas of the new proposed province, this tactic will be

tainted with illegality. In anticipation of a possible strong challenge to the legality of such a

conducted for the purpose of determining the formation of another new political unit, is hereby

plebiscite there was, therefore, deliberately added in the enacted statute a self-serving phrase

abandoned.

that the new province constitutes the area affected. Such additional statement serves no useful

In their supplemental petition, dated January 4, 1986, it is prayed for by petitioners that a

purpose for the same is misleading, erroneous and far from truth. The remaining portion of the

writ of mandamus be issued, directing the respondent Commission on Elections, to schedule

parent province is as much an area affected. The substantial alteration of the boundaries of the

the holding of another plebiscite at which all the qualified voters of the entire province of

parent province, not to mention the other adverse economic effects it might suffer, eloquently

Negros Occidental as now existing shall participate and that this Court make a pronouncement

argue the points raised by the petitioners.

that the plebiscite held on January 3, 1986 has no legal effect for being a patent nullity.

Petitioners have averred without contradiction that after the creation of Negros del Norte,

The Court is prepared to declare the said plebiscite held on January 3, 1986 as null and

the province of Negros Occidental would be deprived of the long established Cities of Silay,

void and violative of the provisions of Sec. 3, Article XI of the Constitution. The Court is not,

Cadiz, and San Carlos, as well as the municipality of Victorias. No controversion has been

however, disposed to direct the conduct of a new plebiscite, because We find no legal basis to

made regarding petitioners assertion that the areas of the Province of Negros Occidental will

do so. With constitutional infirmity attaching to the subject Batas Pambansa Blg. 885 and also

be diminished by about 285,656 hectares and it will lose seven of the fifteen sugar mills which

because the creation of the new province of Negros del Norte is not in accordance with the

contribute to the economy of the whole province. In the language of petitioners, to create

criteria established in the Local Government Code, the factual and legal basis for the creation

Negros del Norte, the existing territory and political subdivision known as Negros Occidental

of such new province which should justify the holding of another plebiscite does not exist.

has to be partitioned and dismembered. What was involved was no birth but amputation.

Whatever claim it has to validity and whatever recognition has been gained by the new

We agree with the petitioners that in the case of Negros what was involved was a division, a

province of Negros del Norte because of the appointment of the officials thereof, must now be

separation; and consequently, as Sec. 3 of Article XI of the Constitution anticipates, a

erased. That Negros del Norte is but a legal fiction should be announced. Its existence should

substantial alteration of boundary.

be put to an end as quickly as possible, if only to settle the complications currently attending

As contended by petitioners,

to its creation. As has been manifested, the parent province of Negros del Norte has been

Indeed, the terms created, divided, merged, abolished as used in the constitutional

impleaded as the defendant in a suit filed by the new Province of Negros del Norte, before the

provision do not contemplate distinct situation isolated from the mutually exclusive to each

Regional Trial Court of Negros (del Norte), docketed as Civil Case No. 169-C, for the

other. A province maybe created where an existing province isdivided or two provinces

immediate allocation, distribution and transfer of funds by the parent province to the new

merged. Such cases necessarily will involve existing unit or units abolished and definitely the

province, in an amount claimed to be at least P10,000,000.00.

boundary being substantially altered.

The final nail that puts to rest whatever pretension there is to the legality of the province

It would thus be inaccurate to state that where an existing political unit is divided or its

of Negros del Norte is the significant fact that this created province does not even satisfy the

boundary substantially altered, as the Constitution provides, only some and not all the voters

area requirement prescribed in Section 197 of the Local Government Code, as earlier

in the whole unit which suffers dismemberment or substantial alteration of its boundary are

discussed.

affected. Rather, the contrary is true.

It is of course claimed by the respondents in their Comment to the exhibits submitted by

It is also Our considered view that even hypothetically assuming that the merits of this case

the petitioners (Exhs. C and D, Rollo, pp. 19 and 91), that the new province has a territory of

can depend on the mere discretion that this Court may exercise, nevertheless, it is the

4,019.95 square kilometers, more or less. This assertion is made to negate the proofs

petitioners case that deserve to be favored.

submitted, disclosing that the land area of the new province cannot be more than 3,500 square

It is now time for this Court to set aside the equivocations and the indecisive

kilometers because its land area would, at most, be only about 2,856 square kilometers, taking

pronouncements in the adverted case of Paredes vs. the Honorable Executive Secretary, et

into account government statistics relative to the total area of the cities and municipalities

al. (supra). For the reasons already here expressed, We now state that the ruling in the two

constituting Negros del Norte. Respondents insist that when Section 197 of the Local

mentioned cases sanctioning the exclusion of the voters belonging to an existing political unit

Government Code speaks of the territory of the province to be created and requires that such

from which the new political unit will be derived, from participating in the plebiscite

territory be at least 3,500 square kilometers, what is contemplated is not only the land area but

also the land and water over which the said province has jurisdiction and control. It is even the

pursuant to sinister designs to achieve pure and simple gerrymandering; that recent

submission of the respondents that in this regard the marginal sea within the three mile limit

happenings more than amply demonstrate that far from guaranteeing its autonomy it (Negros

should be considered in determining the extent of the territory of the new province. Such an

del Norte) has become the fiefdom of a local strongman (Rollo, p. 43; parenthesis supplied).

interpretation is strained, incorrect, and fallacious.

It is not for this Court to affirm or reject such matters not only because the merits of this

The last sentence of the first paragraph of Section 197 is most revealing. As so stated

case can be resolved without need of ascertaining the real motives and wisdom in the making

therein theterritory need not be contiguous if it comprises two or more islands. The use of

of the questioned law. No proper challenge on those grounds can also be made by petitioners

the word territory in this particular provision of the Local Government Code and in the very

in this proceeding. Neither may this Court venture to guess the motives or wisdom in the

last sentence thereof, clearly reflects that territory as therein used, has reference only to the

exercise of legislative powers. Repudiation of improper or unwise actions taken by tools of a

mass of land area and excludes the waters over which the political unit exercises control.

political machinery rests ultimately, as recent events have shown, on the electorate and the

Said sentence states that the territory need not be contiguous. Contiguous means (a) in

power of a vigilant people.

physical contact; (b) touching along all or most of one side; (c) near, text, or adjacent

Petitioners herein deserve and should receive the gratitude of the people of the Province of

(Websters New World Dictionary, 1972 Ed., p. 307). Contiguous, when employed as an

Negros Occidental and even by our Nation. Commendable is the patriotism displayed by them

adjective, as in the above sentence, is only used when it describes physical contact, or a

in daring to institute this case in order to preserve the continued existence of their historic

touching of sides of two solid masses of matter. The meaning of particular terms in a statute

province. They were inspired undoubtedly by their faithful commitment to our Constitution

may be ascertained by reference to words associated with or related to them in the statute

which they wish to be respected and obeyed. Despite the setbacks and the hardships which

(Animal Rescue League vs. Assessors, 138 A.L.R., p. 110). Therefore, in the context of the

petitioners aver confronted them, they valiantly and unfalteringly pursued a worthy cause. A

sentence above, what need not be contiguous is the territorythe physical mass of land

happy destiny for our Nation is assured as long as among our people there would be

area. There would arise no need for the legislators to use the word contiguous if they had

exemplary citizens such as the petitioners herein.

intended that the term territory embrace not only land area but also territorial waters. It can

WHEREFORE, Batas Pambansa Blg. 885 is hereby declared unconstitutional. The

be safely concluded that the word territory in the first paragraph of Section 197 is meant to be

proclamation of the new province of Negros del Norte, as well as the appointment of the

synonymous with land area only. The words and phrases used in a statute should be given

officials thereof are also declared null and void.

the meaning intended by the legislature (82 C.J.S., p. 636). The sense in which the words are

SO ORDERED.

used furnished the rule of construction (In re Winton Lumber Co., 63 p. 2d., p. 664).
The distinction between territory and land area which respondents make is an

Abad

Santos, Feria, Yap, Fernan, Narvasa,Gutierrez,

Jr., Cruz and Paras,

JJ.,

concur.

artificial or strained construction of the disputed provision whereby the words of the statute

Teehankee, C.J., files a separate opinion congratulating his brethren for the Courts

are arrested from their plain and obvious meaning and made to bear an entirely different

unanimous decision striking down a manifestly unconstitutional Act and illegal plebiscite and

meaning to justify an absurd or unjust result. The plain meaning in the language in a statute is

restoring the territorial integrity of the once premier province of Negros Occidental.

the safest guide to follow in construing the statute. A construction based on a forced or

Melencio-Herrera, J., in the result.

artificial meaning of its words and out of harmony of the statutory scheme is not to be favored
(Helvering vs. Hutchings, 85 L. Ed., p. 909).

TEEHANKEE, C.J.:

It would be rather preposterous to maintain that a province with a small land area but
which has a long, narrow, extended coast line, (such as La Union province) can be said to have
a larger territory than a land-locked province (such as Ifugao or Benguet) whose land area
manifestly exceeds the province first mentioned.
Allegations have been made that the enactment of the questioned state was marred by
dirty tricks, in the introduction and passing of Parliamentary Bill No. 3644 in secret haste

I congratulate my brethren for the unanimous decision we issue today striking down an Act
approved in deep secrecy and inordinate haste apparently on the last day of session of the
Batasang Pambansa on December 3, 1985 and signed on the same day by the then President of
the authoritarian regime. The Act provided for the partitioning of the province of Negros
Occidental and would substantially alter its boundaries by lopping off the progressive cities of

Silay, Cadiz and San Carlos and municipality of Victorias with seven other municipalities to

La Castellana, Isabela, Moises Padilla, Pontevedra, Hinigaran, Himamaylan, Kabankalan,

constitute the proposed new province of Negros del Norte. Negros Occidental would thereby

Murcia, Valladolid, San Enrique, Ilog, Cauayan, Hinoba-an and Sipalay and Candoni), grossly

lose 4,019.95 square kilometers in area and seven of fifteen sugar mills which contribute to the

contravenes and disregards the mandate of Article XI, section 3 of the then prevailing 1973

economic progress and welfare of the whole province.

Constitution that no province may be created or divided or its boundary substantially altered

The discredited Commission on Elections of the time played its customary subservient

without the approval of a majority of the votes in a plebiscite in the unit or units affected. It

role by setting the plebiscite with equal indecent haste for January 3, 1986, notwithstanding

is plain that all the cities and municipalities of the province of Negros Occidental, not merely

that the Act itself provided for an ample period of 120 days from its approval within which to

those of the proposed new province, comprise theunits affected. It follows that the voters of

inform the people of the proposed dismemberment and allow them to freely express and

the whole and entire province of Negros Occidental have to participate and give their approval

discuss the momentous issue and cast their vote intelligently. This was learned by petitioners

in the plebiscite, because the whole province is affected by its proposed division and

through an item in the printed media one day before they filed the present rush petition on

substantial alteration of its boundary. To limit the plebiscite to only the voters of the areas to

December 23, 1985 to seek a restraining order to atop the plebiscite, even as no printed copies

be partitioned and seceded from the province is as absurd and illogical as allowing only the

of the Act as finally enacted and approved were available to them and the Act had not been

secessionists to vote for the secession that they demanded against the wishes of the majority

published, as required by law, for its effectivity. As petitioners ruefully state: it was in vain

and to nullify the basic principle of majority rule.

hope for everything had apparently been timed for the Christmas holidays; the Court was in

The argument of fait accompli, viz. that the railroaded plebiscite of January 3, 1986 was

Christmas recess and there was no chance to have their plea for a restraining order acted upon

held and can no longer be enjoined and that the new province of Negros del Norte has been

speedily enough. In fact, it was only on January 7, 1986 that the Court took cognizance of the

constituted, begs the issue of invalidity of the challenged Act. This Court has always held that

petition and required respondents comment.

it does not look with favor upon parties racing to beat an injunction or restraining order

The scenario, as petitioners urgently asserted, was to have the creation of the new

which they have reason to believe might be forthcoming from the Court by virtue of the filing

Province a fait accompli by the time elections are held on February 7, 1986. The transparent

and pendency of the appropriate petition therefor. Where the restraining order or preliminary

purpose is unmistakably so that the new Governor and other officials shall by then have been

injunction are found to have been properly issued, as in the case at bar, mandatory writs shall

installed in office, ready to function for purposes of the election for President and Vice-

be issued by the Court to restore matters to the status quo ante. (Banzon v. Cruz, 45 SCRA

President. Thus, the petitioners reported after the event: With indecent haste, the plebiscite

475, 506 [1972]). Where, as in this case, there was somehow a failure to properly issue the

was held; Negros del Norte was set up and proclaimed by President Marcos as in existence; a

restraining order stopping the holding of the illegal plebiscite, the Court will issue the

new set of government officials headed by Governor Armando Gustilo was appointed; and, by

mandatory writ or judgment to restore matters to the status quo ante and restore the territorial

the time the elections were held on February 7, 1986, the political machinery was in place to

integrity of the province of Negros Occidental by declaring the unconstitutionally of the

deliver the solid North to ex-President Marcos. The rest is history. What happened in Negros

challenged Act and nullifying the invalid proclamation of the proposed new province of

del Norte during the electionsthe unashamed use of naked power and resources

Negros del Norte and the equally invalid appointment of its officials.

contributed in no small way to arousing peoples power and steel the ordinary citizen to

Batas Pambansa Blg. 885 declared unconstitutional.

perform deeds of courage and patriotism that makes one proud to be a Filipino today.
(Record, pp. 9, 41).
The challenged Act is manifestly void and unconstitutional. Consequently, all the
implementing acts complained of, viz. the plebiscite, the proclamation of a new province of
Negros del Norte and the appointment of its officials are equally void. The limited holding of
the plebiscite only in the areas of the proposed new province (as provided by Section 4 of the
Act) to the exclusion of the voters of the remaining areas of the integral province of Negros
Occidental (namely, the three cities of Bacolod, Bago and La Carlota and the Municipalities of

o0o

G.R. No. 176831. January 15, 2010.*

that mandamus cannot be used to enforce contractual obligations. Generally, mandamus will
not lie to enforce purely private contract rights, and will not lie against an individual unless

UY KIAO ENG, petitioner, vs. NIXON LEE, respondent.

some obligation in the nature of a public or quasi-public duty is imposed. The writ is not
Remedial Law; Mandamus; Definition of Mandamus; Definition recognizes the public

appropriate to enforce a private right against an individual. The writ of mandamus lies to

character of the remedy and clearly excludes the idea that it may be resorted to for the

enforce the execution of an act, when, otherwise, justice would be obstructed; and, regularly,

purpose of enforcing the performance of duties in which the public has no interest.

issues only in cases relating to the public and to the government; hence, it is called a

Mandamus is a command issuing from a court of law of competent jurisdiction, in the name of

prerogative writ. To preserve its prerogative character, mandamus is not used for the redress of

the state or the sovereign, directed to some inferior court, tribunal, or board, or to some

private wrongs, but only in matters relating to the public.

corporation or person requiring the performance of a particular duty therein specified, which

Same; Same; Mandamus can be issued only in cases where the usual modes of

duty results from the official station of the party to whom the writ is directed or from

procedure and forms of remedy are powerless to afford relief.An important principle

operation of law. This definition recognizes the public character of the remedy, and clearly

followed in the issuance of the writ is that there should be no plain, speedy and adequate

excludes the idea that it may be resorted to for the purpose of enforcing the performance of

remedy in the ordinary course of law other than the remedy of mandamus being invoked. In

duties in which the public has no interest. The writ is a proper recourse for citizens who seek

other words, mandamus can be issued only in cases where the usual modes of procedure and

to enforce a public right and to compel the performance of a public duty, most especially when

forms of remedy are powerless to afford relief. Although classified as a legal

the public right involved is mandated by the Constitution. As the quoted provision

remedy,mandamus is equitable in its nature and its issuance is generally controlled by

instructs, mandamus will lie if the tribunal, corporation, board, officer, or person unlawfully

equitable principles. Indeed, the grant of the writ of mandamus lies in the sound discretion of

neglects the performance of an act which the law enjoins as a duty resulting from an office,

the court.

trust or station.

PETITION for review on certiorari of the amended decision and resolution of the Court of

Same; Same; Grounds for the issuance of the writ of mandamus; It is essential to the
issuance of a writ of mandamus that the relator should have a clear legal right to the thing

Appeals.
The facts are stated in the opinion of the Court.

demanded and it must be imperative duty of respondent to perform the act required.The

Suarez and Narvasa Law Firm for petitioner.

writ ofmandamus, however, will not issue to compel an official to do anything which is not his

Urbano, Palamos & Perdigon for respondent.

duty to do or which it is his duty not to do, or to give to the applicant anything to which he is

NACHURA,

J.:

not entitled by law. Nor will mandamus issue to enforce a right which is in substantial dispute

Before the Court is a petition for review oncertiorari under Rule 45 of the Rules of Court,

or as to which a substantial doubt exists, although objection raising a mere technical question

assailing the August 23, 2006 Amended Decision1 of the Court of Appeals (CA) in CA-G.R.

will be disregarded if the right is clear and the case is meritorious. As a rule, mandamus will

SP No. 91725 and the February 23, 2007 Resolution,2denying the motion for reconsideration

not lie in the absence of any of the following grounds: [a] that the court, officer, board, or

thereof.

person against whom the action is taken unlawfully neglected the performance of an act which

The relevant facts and proceedings follow.

the law specifically enjoins as a duty resulting from office, trust, or station; or [b] that such

Alleging that his father passed away on June 22, 1992 in Manila and left a holographic

court, officer, board, or person has unlawfully excluded petitioner/relator from the use and

will, which is now in the custody of petitioner Uy Kiao Eng, his mother, respondent Nixon

enjoyment of a right or office to which he is entitled. On the part of the relator, it is essential to

Lee filed, on May 28, 2001, a petition for mandamus with damages, docketed as Civil Case

the issuance of a writ of mandamus that he should have a clear legal right to the thing

No. 01100939, before the Regional Trial Court (RTC) of Manila, to compel petitioner to

demanded and it must be the imperative duty of respondent to perform the act required.

produce the will so that probate proceedings for the allowance thereof could be instituted.

Same; Same; Mandamus will not lie to enforce purely private contract rights and will

Allegedly, respondent had already requested his mother to settle and liquidate the patriarchs

not lie against an individual unless some obligation in the nature of a public or quasi-public

estate and to deliver to the legal heirs their respective inheritance, but petitioner refused to do

duty

so without any justifiable reason.3

is

imposed.Recognized

further

in

this

jurisdiction

is

the

principle

In her answer with counterclaim, petitioner traversed the allegations in the complaint and

Left with no other recourse, petitioner brought the matter before this Court, contending in the

posited that the same be dismissed for failure to state a cause of action, for lack of cause of

main that the petition for mandamus is not the proper remedy and that the testimonial evidence

action, and for non-compliance with a condition precedent for the filing thereof. Petitioner

used by the appellate court as basis for its ruling is inadmissible.12

denied that she was in custody of the original holographic will and that she knew of its
whereabouts. She, moreover, asserted that photocopies of the will were given to respondent
and to his siblings. As a matter of fact, respondent was able to introduce, as an exhibit, a copy

The Court cannot sustain the CAs issuance of the writ.

The first paragraph of Section 3 of Rule 65 of the Rules of Court pertinently provides
that

of the will in Civil Case No. 224-V-00 before the RTC of Valenzuela City. Petitioner further

SEC. 3. Petition for mandamus.When any tribunal, corporation, board, officer or

contended that respondent should have first exerted earnest efforts to amicably settle the

person unlawfully neglects the performance of an act which the law specifically enjoins as

controversy with her before he filed the suit.

aduty resulting from an office, trust, or station, or unlawfully excludes another from the use

The RTC heard the case. After the presentation and formal offer of respondents evidence,

and enjoyment of a right or office to which such other is entitled, and there is no other plain,

petitioner demurred, contending that her son failed to prove that she had in her custody the

speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may

original holographic will. Importantly, she asserted that the pieces of documentary evidence

file a verified petition in the proper court, alleging the facts with certainty and praying that

presented, aside from being hearsay, were all immaterial and irrelevant to the issue involved in

judgment be rendered commanding the respondent, immediately or at some other time to be

the petitionthey did not prove or disprove that she unlawfully neglected the performance of

specified by the court, to do the act required to be done to protect the rights of the petitioner,

an act which the law specifically enjoined as a duty resulting from an office, trust or station,

and to pay the damages sustained by the petitioner by reason of the wrongful acts of the

respondent.13

for the court to issue the writ of mandamus.

The RTC, at first, denied the demurrer to evidence.6In its February 4, 2005

Mandamus is a command issuing from a court of law of competent jurisdiction, in the

Order,7 however, it granted the same on petitioners motion for reconsideration. Respondents

name of the state or the sovereign, directed to some inferior court, tribunal, or board, or to

motion for reconsideration of this latter order was denied on September 20, 2005. 8 Hence, the

some corporation or person requiring the performance of a particular duty therein specified,

petition was dismissed.

which duty results from the official station of the party to whom the writ is directed or from

Aggrieved, respondent sought review from the appellate court. On April 26, 2006, the CA

operation of law.14 This definition recognizes the public character of the remedy, and clearly

initially denied the appeal for lack of merit. It ruled that the writ of mandamus would issue

excludes the idea that it may be resorted to for the purpose of enforcing the performance of

only in instances when no other remedy would be available and sufficient to afford redress.

duties in which the public has no interest.15 The writ is a proper recourse for citizens who seek

Under Rule 76, in an action for the settlement of the estate of his deceased father, respondent

to enforce a public right and to compel the performance of a public duty, most especially when

could ask for the presentation or production and for the approval or probate of the holographic

the public right involved is mandated by the Constitution. 16 As the quoted provision

will. The CA further ruled that respondent, in the proceedings before the trial court, failed to

instructs, mandamus will lie if the tribunal, corporation, board, officer, or person unlawfully

present sufficient evidence to prove that his mother had in her custody the original copy of the

neglects the performance of an act which the law enjoins as a duty resulting from an office,

trust or station.17

will.

Respondent moved for reconsideration. The appellate court, in the assailed August 23,

The writ of mandamus, however, will not issue to compel an official to do anything which

2006 Amended Decision,10 granted the motion, set aside its earlier ruling, issued the writ, and

is not his duty to do or which it is his duty not to do, or to give to the applicant anything to

ordered the production of the will and the payment of attorneys fees. It ruled this time that

which he is not entitled by law.18Nor will mandamus issue to enforce a right which is in

respondent was able to show by testimonial evidence that his mother had in her possession the

substantial dispute or as to which a substantial doubt exists, although objection raising a mere

holographic will.

technical question will be disregarded if the right is clear and the case is meritorious. 19 As a

Dissatisfied with this turn of events, petitioner filed a motion for reconsideration. The
appellate court denied this motion in the further assailed February 23, 2007 Resolution.

11

rule, mandamus will not lie in the absence of any of the following grounds: [a] that the court,
officer, board, or person against whom the action is taken unlawfully neglected the
performance of an act which the law specifically enjoins as a duty resulting from office, trust,

or station; or [b] that such court, officer, board, or person has unlawfully excluded

SEC. 2. Custodian of will to deliver.The person who has custody of a will shall,

petitioner/relator from the use and enjoyment of a right or office to which he is entitled.20 On

within twenty (20) days after he knows of the death of the testator, deliver the will to the court

the part of the relator, it is essential to the issuance of a writ of mandamus that he should have

having jurisdiction, or to the executor named in the will.

a clear legal right to the thing demanded and it must be the imperative duty of respondent to
perform the act required.

21

executor in a will shall within twenty (20) days after he knows of the death of the testator, or

Recognized further in this jurisdiction is the principle that mandamus cannot be used to
enforce contractual obligations.

SEC. 3. Executor to present will and accept or refuse trust.A person named as

22

within twenty (20) days after he knows that he is named executor if he obtained such
knowledge after the death of the testator, present such will to the court having jurisdiction,

Generally, mandamus will not lie to enforce purely private contract rights, and will not lie

unless the will has reached the court in any other manner, and shall, within such period,

against an individual unless some obligation in the nature of a public or quasi-public duty is

signify to the court in writing his acceptance of the trust or his refusal to accept it.

imposed.23 The writ is not appropriate to enforce a private right against an individual. 24 The

SEC. 4. Custodian and executor subject to fine for neglect.A person who neglects

writ of mandamus lies to enforce the execution of an act, when, otherwise, justice would be

any of the duties required in the two last preceding sections without excuse satisfactory to the

obstructed; and, regularly, issues only in cases relating to the public and to the government;

court shall be fined not exceeding two thousand pesos.

25

hence, it is called a prerogative writ. To preserve its prerogative character, mandamus is not
used for the redress of private wrongs, but only in matters relating to the public. 26
Moreover, an important principle followed in the issuance of the writ is that there should
be no plain, speedy and adequate remedy in the ordinary course of law other than the remedy

SEC. 5.

Person retaining will may be committed.A person having custody of a will

after the death of the testator who neglects without reasonable cause to deliver the same, when
ordered so to do, to the court having jurisdiction, may be committed to prison and there kept
until he delivers the will.30

of mandamus being invoked.27 In other words, mandamus can be issued only in cases where

There being a plain, speedy and adequate remedy in the ordinary course of law for the

the usual modes of procedure and forms of remedy are powerless to afford relief. 28 Although

production of the subject will, the remedy of mandamus cannot be availed of. Suffice it to

classified as a legal remedy,mandamus is equitable in its nature and its issuance is generally

state that respondent Lee lacks a cause of action in his petition. Thus, the Court grants the

29

controlled by equitable principles. Indeed, the grant of the writ of mandamus lies in the sound
discretion of the court.

demurrer.
WHEREFORE, premises considered, the petition for review on certiorari is GRANTED.

In the instant case, the Court, without unnecessarily ascertaining whether the obligation

The August 23, 2006 Amended Decision and the February 23, 2007 Resolution of the Court of

involved herethe production of the original holographic willis in the nature of a public or

Appeals in CA-G.R. SP No. 91725 are REVERSED and SET ASIDE. Civil Case No.

a private duty, rules that the remedy of mandamuscannot be availed of by respondent Lee

01100939 before the Regional Trial Court of Manila is DISMISSED.

because there lies another plain, speedy and adequate remedy in the ordinary course of law.
Let it be noted that respondent has a photocopy of the will and that he seeks the production of
the original for purposes of probate. The Rules of Court, however, does not prevent him from
instituting probate proceedings for the allowance of the will whether the same is in his
possession or not. Rule 76, Section 1 relevantly provides:
Section 1. Who may petition for the allowance of will.Any executor, devisee, or
legatee named in a will, or any other person interested in the estate, may, at any time, after the
death of the testator, petition the court having jurisdiction to have the will allowed, whether
the same be in his possession or not, or is lost or destroyed.
An adequate remedy is further provided by Rule 75, Sections 2 to 5, for the production of the
original holographic will. Thus

SO ORDERED.
Corona (Chairperson), Velasco, Jr., Peralta andMendoza, JJ., concur.

G.R. Nos. 171947-48. December 18, 2008.*

with respect to the instant case, the MMDAs duty to put up an adequate and appropriate

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, DEPARTMENT OF

sanitary landfill and solid waste and liquid disposal as well as other alternative garbage

ENVIRONMENT AND NATURAL RESOURCES, DEPARTMENT OF EDUCATION,

disposal systems is ministerial, its duty being a statutory imposition. The MMDAs duty in

CULTURE AND SPORTS, DEPARTMENT OF HEALTH, DEPARTMENT OF

this regard is spelled out in Sec. 3(c) of Republic Act No. (RA) 7924 creating the MMDA.

PUBLIC WORKS AND HIGHWAYS,

Same; Same; Same; The duty of putting up a proper waste disposal system cannot be

DEPARTMENT OF BUDGET AND MANAGEMENT, PHILIPPINE COAST GUARD,

characterized as discretionary, for, as earlier stated, discretion presupposes the power or

PHILIPPINE NATIONAL POLICE MARITIME GROUP, and DEPARTMENT OF

right given by law to public functionaries to act officially according to their judgment or

THE INTERIOR AND LOCAL GOVERNMENT, petitioners, vs. CONCERNED

conscience.The MMDAs duty in the area of solid waste disposal, as may be noted, is set

RESIDENTS OF MANILA BAY, represented and joined by DIVINA V. ILAS,

forth not only in the Environment Code (PD 1152) and RA 9003, but in its charter as well.

SABINIANO ALBARRACIN, MANUEL SANTOS, JR., DINAH DELA PEA, PAUL

This duty of putting up a proper waste disposal system cannot be characterized as

DENNIS QUINTERO, MA. VICTORIA LLENOS, DONNA CALOZA, FATIMA

discretionary, for, as earlier stated, discretion presupposes the power or right given by law to

QUITAIN, VENICE SEGARRA, FRITZIE TANGKIA, SARAH JOELLE LINTAG,

public functionaries to act officially according to their judgment or conscience. A

HANNIBAL AUGUSTUS BOBIS, FELIMON SAN-TIAGUEL, and JAIME AGUSTIN

discretionary duty is one that allows a person to exercise judgment and choose to perform or

R. OPOSA, respondents.

not to perform. Any suggestion the MMDA has the option whether or not to perform its solid

AGRICULTURE, DEPARTMENT OF

waste disposal-related duties ought to be dismissed for want of legal basis.

Remedial Law; Mandamus; Generally, the writ of mandamus lies to require the

Same; Same; Same; These government agencies are enjoined, as a matter of statutory

execution of a ministerial duty; Mandamus is available to compel action, when refused, on

obligation, to perform certain functions relating directly or indirectly to the cleanup,

matters involving discretion, but not to direct the exercise of judgment or discretion one way

rehabilitation, protection and preservation of the Manila Bay.A perusal of other petitioners

or the other.The writ of mandamus lies to require the execution of a ministerial duty. A

respective charters or like enabling statutes and pertinent laws would yield this conclusion:

ministerial duty is one that requires neither the exercise of official discretion nor judgment.

these government agencies are enjoined, as a matter of statutory obligation, to perform certain

It connotes an act in which nothing is left to the discretion of the person executing it. It is a

functions relating directly or indirectly to the cleanup, rehabilitation, protection, and

simple, definite duty arising under conditions admitted or proved to exist and imposed by

preservation of the Manila Bay. They are precluded from choosing not to perform these duties.

law. Mandamus is available to compel action, when refused, on matters involving discretion,

Same; Same; Same; Section 17 of PD 1152 does not in any way state that the

but not to direct the exercise of judgment or discretion one way or the other.

government agencies concerned ought to confine themselves to the containment, removal, and

Same; Same; Environmental Law; The Metropolitan Manila Development Authoritys

cleaning operations when a specific pollution incident occurs.Respondents are correct. For

(MMDAs) duty to put up an adequate and appropriate sanitary landfill and solid waste and

one thing, said Sec. 17 does not in any way state that the government agencies concerned

liquid disposal as well as other alternative garbage disposal system is ministerial, its duty

ought to confine themselves to the containment, removal, and cleaning operations when a

being a statutory imposition.We wish to state that petitioners obligation to perform their

specific pollution incident occurs. On the contrary, Sec. 17 requires them to act even in the

duties as defined by law, on one hand, and how they are to carry out such duties, on the other,

absence of a specific pollution incident, as long as water quality has deteriorated to a degree

are two different concepts. While the implementation of the MMDAs mandated tasks may

where its state will adversely affect its best usage. This section, to stress, commands

entail a decision-making process, the enforcement of the law or the very act of doing what the

concerned government agencies, when appropriate, to take such measures as may be

law exacts to be done is ministerial in nature and may be compelled by mandamus. We said so

necessary to meet the prescribed water quality standards. In fine, the underlying duty to

in Social Justice Society v. Atienza, 517 SCRA 657 (2007), in which the Court directed the

upgrade the quality of water is not conditional on the occurrence of any pollution incident.

City of Manila to enforce, as a matter of ministerial duty, its Ordinance No. 8027 directing the

Same; Same; Same; The complementary Sec. 17 of the Environment Code comes into

three big local oil players to cease and desist from operating their business in the so-called

play and the specific duties of the agencies to clean up come in even if there are no pollution

Pandacan Terminals within six months from the effectivity of the ordinance. But to illustrate

incidents staring at them.A perusal of Sec. 20 of the Environment Code, as couched,

indicates that it is properly applicable to a specific situation in which the pollution is caused by

the absence of a categorical legal provision specifically prodding petitioners to clean up the

polluters who fail to clean up the mess they left behind. In such instance, the concerned

bay, they and the men and women representing them cannot escape their obligation to future

government agencies shall undertake the cleanup work for the polluters account. Petitioners

generations of Filipinos to keep the waters of the Manila Bay clean and clear as humanly as

assertion, that they have to perform cleanup operations in the Manila Bay only when there is a

possible. Anything less would be a betrayal of the trust reposed in them.

water pollution incident and the erring polluters do not undertake the containment, removal,

PETITION for review on certiorari of a decision of the Court of Appeals.

and cleanup operations, is quite off mark. As earlier discussed, the complementary Sec. 17 of

The facts are stated in the opinion of the Court.

the Environment Code comes into play and the specific duties of the agencies to clean up

The Solicitor General for petitioners.

come in even if there are no pollution incidents staring at them. Petitioners, thus, cannot

Antonio A. Oposa, Jr. and Fortun, Narvasa and Salazar for respondents.

plausibly invoke and hide behind Sec. 20 of PD 1152 or Sec. 16 of RA 9275 on the pretext
that their cleanup mandate depends on the happening of a specific pollution incident.

VELASCO, JR.,

J.:

The need to address environmental pollution, as a cause of climate change, has of late

Same; Same; Same; Sec. 16 of RA 9275, previously Sec. 20 of PD 1152, covers for all

gained the attention of the international community. Media have finally trained their sights on

intents and purposes a general cleanup situation.Not to be ignored of course is the reality

the ill effects of pollution, the destruction of forests and other critical habitats, oil spills, and

that the government agencies concerned are so undermanned that it would be almost

the unabated improper disposal of garbage. And rightly so, for the magnitude of

impossible to apprehend the numerous polluters of the Manila Bay. It may perhaps not be

environmental destruction is now on a scale few ever foresaw and the wound no longer simply

amiss to say that the apprehension, if any, of the Manila Bay polluters has been few and far

heals by itself.2 But amidst hard evidence and clear signs of a climate crisis that need bold

between. Hence, practically nobody has been required to contain, remove, or clean up a given

action, the voice of cynicism, naysayers, and procrastinators can still be heard.

water pollution incident. In this kind of setting, it behooves the Government to step in and

This case turns on government agencies and their officers who, by the nature of their

undertake cleanup operations. Thus, Sec. 16 of RA 9275, previously Sec. 20 of PD 1152,

respective offices or by direct statutory command, are tasked to protect and preserve, at the

covers for all intents and purposes a general cleanup situation.

first instance, our internal waters, rivers, shores, and seas polluted by human activities. To

Same; Same; Same; Different government agencies and instrumentalities cannot shirk

most of these agencies and their official complement, the pollution menace does not seem to

from their mandates, they must perform their basic functions in cleaning up and rehabilitating

carry the high national priority it deserves, if their track records are to be the norm. Their

the Manila Bay.The era of delays, procrastination, and ad hoc measures is over. Petitioners

cavalier attitude towards solving, if not mitigating, the environmental pollution problem, is a

must transcend their limitations, real or imaginary, and buckle down to work before the

sad commentary on bureaucratic efficiency and commitment.

problem at hand becomes unmanageable. Thus, we must reiterate that different government

At the core of the case is the Manila Bay, a place with a proud historic past, once

agencies and instrumentalities cannot shirk from their mandates; they must perform their basic

brimming with marine life and, for so many decades in the past, a spot for different contact

functions in cleaning up and rehabilitating the Manila Bay. We are disturbed by petitioners

recreation activities, but now a dirty and slowly dying expanse mainly because of the abject

hiding behind two untenable claims: (1) that there ought to be a specific pollution incident

official indifference of people and institutions that could have otherwise made a difference.

before they are required to act; and (2) that the cleanup of the bay is a discretionary duty.

This case started when, on January 29, 1999, respondents Concerned Residents of Manila

Environmental Law; Even assuming the absence of a categorical legal provision

Bay filed a complaint before the Regional Trial Court (RTC) in Imus, Cavite against several

specifically prodding petitioners to clean up the bay, they and the men and women

government agencies, among them the petitioners, for the cleanup, rehabilitation, and

representing them cannot escape their obligation to future generations of Filipinos to keep the

protection of the Manila Bay. Raffled to Branch 20 and docketed as Civil Case No. 1851-99 of

waters of the Manila Bay clean and clear as humanly as possible.So it was that in Oposa v.

the RTC, the complaint alleged that the water quality of the Manila Bay had fallen way below

Factoran, Jr., 224 SCRA 792 (1993), the Court stated that the right to a balanced and

the allowable standards set by law, specifically Presidential Decree No. (PD) 1152 or the

healthful ecology need not even be written in the Constitution for it is assumed, like other civil

Philippine Environment Code. This environmental aberration, the complaint stated, stemmed

and political rights guaranteed in the Bill of Rights, to exist from the inception of mankind and

from:

it is an issue of transcendental importance with intergenerational implications. Even assuming

x x x [The] reckless, wholesale, accumulated and ongoing acts of omission or

The RTC Ordered Petitioners to Clean Up

commission [of the defendants] resulting in the clear and present danger to public health and
in the depletion and contamination of the marine life of Manila Bay, [for which reason] ALL
defendants must be held jointly and/or solidarily liable and be collectively ordered to clean up
Manila Bay and to restore its water quality to class B waters fit for swimming, skin-diving,
and other forms of contact recreation.3
In their individual causes of action, respondents alleged that the continued neglect of
petitioners in abating the pollution of the Manila Bay constitutes a violation of, among others:

and Rehabilitate Manila Bay

On September 13, 2002, the RTC rendered a Decision5 in favor of respondents. The
dispositive portion reads:
WHEREFORE, finding merit in the complaint, judgment is hereby rendered ordering the
abovenamed defendant-government agencies, jointly and solidarily, to clean up and
rehabilitate Manila Bay and restore its waters to SB classification to make it fit for swimming,
skin-diving and other forms of contact recreation. To attain this, defendant-agencies, with

(1)

Respondents constitutional right to life, health, and a balanced ecology;

defendant DENR as the lead agency, are directed, within six (6) months from receipt hereof, to

(2)

The Environment Code (PD 1152);

act and perform their respective duties by devising a consolidated, coordinated and concerted

(3)

The Pollution Control Law (PD 984);

scheme of action for the rehabilitation and restoration of the bay.

(4)

The Water Code (PD 1067);

(5)

The Sanitation Code (PD 856);

(6)

The Illegal Disposal of Wastes Decree (PD 825);

(7)

The Marine Pollution Law (PD 979);

(8)

Executive Order No. 192;

(9)

The Toxic and Hazardous Wastes Law (Republic Act No. 6969);

(10)

Civil Code provisions on nuisance and human relations;

(11) The Trust Doctrine and the Principle of Guardianship; and

(12)

International Law

Inter alia, respondents, as plaintiffs a quo, prayed that petitioners be ordered to clean the
Manila Bay and submit to the RTC a concerted concrete plan of action for the purpose.
The trial of the case started off with a hearing at the Manila Yacht Club followed by an
ocular inspection of the Manila Bay. Renato T. Cruz, the Chief of the Water Quality

In particular:
Defendant MWSS is directed to install, operate and maintain adequate [sewerage]
treatment facilities in strategic places under its jurisdiction and increase their capacities.
Defendant LWUA, to see to it that the water districts under its wings, provide, construct
and operate sewage facilities for the proper disposal of waste.
Defendant DENR, which is the lead agency in cleaning up Manila Bay, to install, operate
and maintain waste facilities to rid the bay of toxic and hazardous substances.
Defendant PPA, to prevent and also to treat the discharge not only of ship-generated
wastes but also of other solid and liquid wastes from docking vessels that contribute to the
pollution of the bay.
Defendant MMDA, to establish, operate and maintain an adequate and appropriate
sanitary landfill and/or adequate solid waste and liquid disposal as well as other alternative
garbage disposal system such as re-use or recycling of wastes.

Management Section, Environmental Management Bureau, Department of Environment and

Defendant DA, through the Bureau of Fisheries and Aquatic Resources, to revitalize the

Natural Resources (DENR), testifying for petitioners, stated that water samples collected from

marine life in Manila Bay and restock its waters with indigenous fish and other aquatic

different beaches around the Manila Bay showed that the amount of fecal coliform content

animals.

ranged from 50,000 to 80,000 most probable number (MPN)/ml when what DENR
Administrative Order No. 34-90 prescribed as a safe level for bathing and other forms of
contact recreational activities, or the SB level, is one not exceeding 200 MPN/100 ml.4

Defendant DBM, to provide and set aside an adequate budget solely for the purpose of
cleaning up and rehabilitation of Manila Bay.
Defendant DPWH, to remove and demolish structures and other nuisances that obstruct

Rebecca de Vera, for Metropolitan Waterworks and Sewerage System (MWSS) and in

the free flow of waters to the bay. These nuisances discharge solid and liquid wastes which

behalf of other petitioners, testified about the MWSS efforts to reduce pollution along the

eventually end up in Manila Bay. As the construction and engineering arm of the government,

Manila Bay through the Manila Second Sewerage Project. For its part, the Philippine Ports

DPWH is ordered to actively participate in removing debris, such as carcass of sunken vessels,

Authority (PPA) presented, as part of its evidence, its memorandum circulars on the study

and other non-biodegradable garbage in the bay.

being conducted on ship-generated waste treatment and disposal, and its Linis Dagat (Clean
the Ocean) project for the cleaning of wastes accumulated or washed to shore.

Defendant DOH, to closely supervise and monitor the operations of septic and sludge

[SECTIONS] 17 AND 20 OF [PD] 1152 RELATE ONLY TO THE CLEANING OF

companies and require them to have proper facilities for the treatment and disposal of fecal

SPECIFIC POLLUTION INCIDENTS AND [DO] NOT COVER CLEANING IN GENERAL

sludge and sewage coming from septic tanks.

II

Defendant DECS, to inculcate in the minds and hearts of the people through education the
importance of preserving and protecting the environment.

THE CLEANING OR REHABILITATION OF THE MANILA BAY IS NOT A

MINISTERIAL ACT OF PETITIONERS THAT CAN BE COMPELLED BYMANDAMUS.

Defendant Philippine Coast Guard and the PNP Maritime Group, to protect at all costs the
Manila Bay from all forms of illegal fishing.

The issues before us are two-fold. First, do Sections 17 and 20 of PD 1152 under the
headings, Upgrading of Water Quality and Clean-up Operations, envisage a cleanup in

No pronouncement as to damages and costs.

general or are they limited only to the cleanup of specific pollution incidents? And second, can

SO ORDERED.

petitioners be compelled by mandamus to clean up and rehabilitate the Manila Bay?

The MWSS, Local Water Utilities Administration (LWUA), and PPA filed before the

On August 12, 2008, the Court conducted and heard the parties on oral arguments.

Court of Appeals (CA) individual Notices of Appeal which were eventually consolidated and
docketed as CA-G.R. CV No. 76528.

Our Ruling
We shall first dwell on the propriety of the issuance of mandamus under the premises.

On the other hand, the DENR, Department of Public Works and Highways (DPWH),

The Cleaning or Rehabilitation of Manila Bay

Metropolitan Manila Development Authority (MMDA), Philippine Coast Guard (PCG),

Can be Compelled by Mandamus

Philippine National Police (PNP) Maritime Group, and five other executive departments and

Generally, the writ of mandamus lies to require the execution of a ministerial duty.8 A

agencies filed directly with this Court a petition for review under Rule 45. The Court, in a

ministerial duty is one that requires neither the exercise of official discretion nor

Resolution of December 9, 2002, sent the said petition to the CA for consolidation with the

judgment.9 It connotes an act in which nothing is left to the discretion of the person executing

consolidated appeals of MWSS, LWUA, and PPA, docketed as CA-G.R. SP No. 74944.

it. It is a simple, definite duty arising under conditions admitted or proved to exist and

Petitioners, before the CA, were one in arguing in the main that the pertinent provisions of

imposed by law.10 Mandamus is available to compel action, when refused, on matters

the Environment Code (PD 1152) relate only to the cleaning of specific pollution incidents and

involving discretion, but not to direct the exercise of judgment or discretion one way or the

do not cover cleaning in general. And apart from raising concerns about the lack of funds

other.

appropriated for cleaning purposes, petitioners also asserted that the cleaning of the Manila
Bay is not a ministerial act which can be compelled by mandamus.

Petitioners maintain that the MMDAs duty to take measures and maintain adequate solid
waste and liquid disposal systems necessarily involves policy evaluation and the exercise of

The CA Sustained the RTC

judgment on the part of the agency concerned. They argue that the MMDA, in carrying out its

By a Decision of September 28, 2005, the CA denied petitioners appeal and affirmed the

mandate, has to make decisions, including choosing where a landfill should be located by

Decision of the RTC in toto, stressing that the trial courts decision did not require petitioners

undertaking feasibility studies and cost estimates, all of which entail the exercise of discretion.

to do tasks outside of their usual basic functions under existing laws.

Petitioners are now before this Court praying for the allowance of their Rule 45 petition
on the following ground and supporting arguments:

Respondents, on the other hand, counter that the statutory command is clear and that
petitioners duty to comply with and act according to the clear mandate of the law does not
require the exercise of discretion. According to respondents, petitioners, the MMDA in

THE [CA] DECIDED A QUESTION OF SUBSTANCE NOT HERETOFORE PASSED

particular, are without discretion, for example, to choose which bodies of water they are to

UPON BY THE HONORABLE COURT, I.E., IT AFFIRMED THE TRIAL COURTS

clean up, or which discharge or spill they are to contain. By the same token, respondents

DECISION DECLARING THAT SECTION 20 OF [PD] 1152 REQUIRES CONCERNED

maintain that petitioners are bereft of discretion on whether or not to alleviate the problem of

GOVERNMENT AGENCIES TO REMOVE ALL POLLUTANTS SPILLED AND

solid and liquid waste disposal; in other words, it is the MMDAs ministerial duty to attend to

DISCHARGED IN THE WATER SUCH AS FECAL COLIFORMS.

such services.

ARGUMENTS
I

We agree with respondents.

First off, we wish to state that petitioners obligation to perform their duties as defined by

A perusal of other petitioners respective charters or like enabling statutes and pertinent

law, on one hand, and how they are to carry out such duties, on the other, are two different

laws would yield this conclusion: these government agencies are enjoined, as a matter of

concepts. While the implementation of the MMDAs mandated tasks may entail a decision-

statutory obligation, to perform certain functions relating directly or indirectly to the cleanup,

making process, the enforcement of the law or the very act of doing what the law exacts to be

rehabilitation, protection, and preservation of the Manila Bay. They are precluded from

done is ministerial in nature and may be compelled by mandamus. We said so in Social Justice

choosing not to perform these duties. Consider:

Society v.Atienza11 in which the Court directed the City of Manila to enforce, as a matter of

(1)

The DENR, under Executive Order No. (EO) 192,15 is the primary agency

ministerial duty, its Ordinance No. 8027 directing the three big local oil players to cease and

responsible for the conservation, management, development, and proper use of the countrys

desist from operating their business in the so-called Pandacan Terminals within six months

environment and natural resources. Sec. 19 of the Philippine Clean Water Act of 2004 (RA

from the effectivity of the ordinance. But to illustrate with respect to the instant case, the

9275), on the other hand, designates the DENR as the primary government agency responsible

MMDAs duty to put up an adequate and appropriate sanitary landfill and solid waste and

for its enforcement and implementation, more particularly over all aspects of water quality

liquid disposal as well as other alternative garbage disposal systems is ministerial, its duty

management. On water pollution, the DENR, under the Acts Sec. 19(k), exercises jurisdiction

being a statutory imposition. The MMDAs duty in this regard is spelled out in Sec. 3(c) of

over all aspects of water pollution, determine[s] its location, magnitude, extent, severity,

Republic Act No. (RA) 7924 creating the MMDA. This section defines and delineates the

causes and effects and other pertinent information on pollution, and [takes] measures, using

scope of the MMDAs waste disposal services to include:

available methods and technologies, to prevent and abate such pollution.

Solid waste disposal and management which include formulation and implementation of

The DENR, under RA 9275, is also tasked to prepare a National Water Quality Status

policies, standards, programs and projects for proper and sanitary waste disposal. It shall

Report, an Integrated Water Quality Management Framework, and a 10-year Water Quality

likewise include the establishment and operation of sanitary land fill and related

Management Area Action Plan which is nationwide in scope covering the Manila Bay and

facilities and the implementation of other alternative programs intended to reduce, reuse and

adjoining areas. Sec. 19 of RA 9275 provides:

recycle solid waste. (Emphasis added.)

Sec. 19. Lead Agency.The [DENR] shall be the primary government agency

The MMDA is duty-bound to comply with Sec. 41 of the Ecological Solid Waste
Management Act (RA 9003) which prescribes the minimum criteria for the establishment of

responsible for the implementation and enforcement of this Act x x x unless otherwise
provided herein. As such, it shall have the following functions, powers and responsibilities:

sanitary landfills and Sec. 42 which provides the minimum operating requirements that each

a)

site operator shall maintain in the operation of a sanitary landfill. Complementing Sec. 41 are

Prepare a National Water Quality Status report within twenty-four (24)

months from the effectivity of this Act: Provided, That the Department shall thereafter

12

Secs. 36 and 37 of RA 9003, enjoining the MMDA and local government units, among

review or revise and publish annually, or as the need arises, said report;

others, after the effectivity of the law on February 15, 2001, from using and operating open

b)

dumps for solid waste and disallowing, five years after such effectivity, the use of controlled

Prepare an Integrated Water Quality Management Framework within twelve

(12) months following the completion of the status report;

dumps.

c) Prepare a ten (10) year Water Quality Management Area Action Plan within

The MMDAs duty in the area of solid waste disposal, as may be noted, is set forth not

12 months following the completion of the framework for each designated water

only in the Environment Code (PD 1152) and RA 9003, but in its charter as well. This duty of

management area. Such action plan shall be reviewed by the water quality

putting up a proper waste disposal system cannot be characterized as discretionary, for, as

management area governing board every five (5) years or as need arises.

earlier stated, discretion presupposes the power or right given by law to public functionaries to
13

act officially according to their judgment or conscience. A discretionary duty is one that
14

The DENR has prepared the status report for the period 2001 to 2005 and is in the process
of

completing

the

preparation

of

the

Integrated

Water

Quality

Management

16

allows a person to exercise judgment and choose to perform or not to perform. Any

Framework. Within twelve (12) months thereafter, it has to submit a final Water Quality

suggestion that the MMDA has the option whether or not to perform its solid waste disposal-

Management Area Action Plan.17 Again, like the MMDA, the DENR should be made to

related duties ought to be dismissed for want of legal basis.

accomplish the tasks assigned to it under RA 9275.

Parenthetically, during the oral arguments, the DENR Secretary manifested that the
DENR, with the assistance of and in part-nership with various government agencies and nongovernment organizations, has completed, as of December 2005, the final draft of a

primarily be responsible for the prevention and control of water pollution for the development,
management, and conservation of the fisheries and aquatic resources.
(5)

The DPWH, as the engineering and construction arm of the national government, is

comprehensive action plan with estimated budget and time frame, denominated asOperation

tasked under EO 29223 to provide integrated planning, design, and construction services for,

Plan for the Manila Bay Coastal Strategy, for the rehabilitation, restoration, and rehabilitation

among others, flood control and water resource development systems in accordance with

of the Manila Bay.

national development objectives and approved government plans and specifications.

The completion of the said action plan and even the implementation of some of its phases

In Metro Manila, however, the MMDA is authorized by Sec. 3(d), RA 7924 to perform

should more than ever prod the concerned agencies to fast track what are assigned them under

metro-wide services relating to flood control and sewerage management which include the

existing laws.

formulation and implementation of policies, standards, programs and projects for an integrated

(2)

The MWSS, under Sec. 3 of RA 6234,18 is vested with jurisdiction, supervision, and

flood control, drainage and sewerage system.

control over all waterworks and sewerage systems in the territory comprising what is now the

On July 9, 2002, a Memorandum of Agreement was entered into between the DPWH and

cities of Metro Manila and several towns of the provinces of Rizal and Cavite, and charged

MMDA, whereby MMDA was made the agency primarily responsible for flood control in

with the duty:

Metro Manila. For the rest of the country, DPWH shall remain as the implementing agency for

(g)

To construct, maintain, and operate such sanitary sewerages as may be necessary for

the proper sanitation and other uses of the cities and towns comprising the System; x x x
(3)

The LWUA under PD 198 has the power of supervision and control over local water

districts. It can prescribe the minimum standards and regulations for the operations of these
districts and shall monitor and evaluate local water standards. The LWUA can direct these

flood control services. The mandate of the MMDA and DPWH on flood control and drainage
services shall include the removal of structures, constructions, and encroachments built along
rivers, waterways, and esteros (drainages) in violation of RA 7279, PD 1067, and other
pertinent laws.
(6)

The PCG, in accordance with Sec. 5(p) of PD 601, or the Revised Coast Guard Law

districts to construct, operate, and furnish facilities and services for the collection, treatment,

of 1974, and Sec. 6 of PD 979,24 or the Marine Pollution Decree of 1976, shall have the

and disposal of sewerage, waste, and storm water. Additionally, under RA 9275, the LWUA,

primary responsibility of enforcing laws, rules, and regulations governing marine pollution

as attached agency of the DPWH, is tasked with providing sewerage and sanitation facilities,

within the territorial waters of the Philippines. It shall promulgate its own rules and

inclusive of the setting up of efficient and safe collection, treatment, and sewage disposal

regulations in accordance with the national rules and policies set by the National Pollution

19

system in the different parts of the country. In relation to the instant petition, the LWUA is

Control Commission upon consultation with the latter for the effective implementation and

mandated to provide sewerage and sanitation facilities in Laguna, Cavite, Bulacan, Pampanga,

enforcement of PD 979. It shall, under Sec. 4 of the law, apprehend violators who:

and Bataan to prevent pollution in the Manila Bay.

(4)

The Department of Agriculture (DA), pursuant to the Administrative Code of 1987

(EO 292),20 is designated as the agency tasked to promulgate and enforce all laws and

a. discharge, dump x x x harmful substances from or out of any ship, vessel, barge, or
any other floating craft, or other man-made structures at sea, by any method, means or
manner, into or upon the territorial and inland navigable waters of the Philippines;

issuances respecting the conservation and proper utilization of agricultural and fishery

b. throw, discharge or deposit, dump, or cause, suffer or procure to be thrown,

resources. Furthermore, the DA, under the Philippine Fisheries Code of 1998 (RA 8550), is, in

discharged, or deposited either from or out of any ship, barge, or other floating craft or vessel

coordination with local government units (LGUs) and other concerned sectors, in charge of

of any kind, or from the shore, wharf, manufacturing establishment, or mill of any kind, any

establishing a monitoring, control, and surveillance system to ensure that fisheries and aquatic

refuse matter of any kind or description whatever other than that flowing from streets and

resources in Philippine waters are judiciously utilized and managed on a sustainable

sewers and passing therefrom in a liquid state into tributary of any navigable water from

21

basis. Likewise under RA 9275, the DA is charged with coordinating with the PCG and
DENR for the enforcement of water quality standards in marine waters.22 More specifically,
its Bureau of Fisheries and Aquatic Resources (BFAR) under Sec. 22(c) of RA 9275 shall

which the same shall float or be washed into such navigable water; and
c.

deposit x x x material of any kind in any place on the bank of any navigable water or

on the bank of any tributary of any navigable water, where the same shall be liable to be
washed into such navigable water, either by ordinary or high tides, or by storms or floods, or

otherwise, whereby navigation shall or may be impeded or obstructed or increase the level of

provisions of RA 9003, which would necessary include its penal provisions, within its area of

pollution of such water.

jurisdiction.29

(7)

When RA 6975 or the Department of the Interior and Local Government (DILG) Act of

Among the prohibited acts under Sec. 48, Chapter VI of RA 9003 that are frequently

1990 was signed into law on December 13, 1990, the PNP Maritime Group was tasked to

violated are dumping of waste matters in public places, such as roads, canals or esteros, open

perform all police functions over the Philippine territorial waters and rivers. Under Sec. 86,

burning of solid waste, squatting in open dumps and landfills, open dumping, burying of

RA 6975, the police functions of the PCG shall be taken over by the PNP when the latter

biodegradable or non-biodegradable materials in flood-prone areas, establishment or operation

acquires the capability to perform such functions. Since the PNP Maritime Group has not yet

of open dumps as enjoined in RA 9003, and operation of waste management facilities without

attained the capability to assume and perform the police functions of PCG over marine

an environmental compliance certificate.

pollution, the PCG and PNP Maritime Group shall coordinate with regard to the enforcement

Under Sec. 28 of the Urban Development and Housing Act of 1992 (RA 7279), eviction

of laws, rules, and regulations governing marine pollution within the territorial waters of the

or demolition may be allowed when persons or entities occupy danger areas such as esteros,

Philippines. This was made clear in Sec. 124, RA 8550 or the Philippine Fisheries Code of

railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public places

1998, in which both the PCG and PNP Maritime Group were authorized to enforce said law

such as sidewalks, roads, parks and playgrounds. The MMDA, as lead agency, in

and other fishery laws, rules, and regulations.

25

coordination with the DPWH, LGUs, and concerned agencies, can dismantle and remove all

In accordance with Sec. 2 of EO 513, the PPA is mandated to establish, develop,

structures, constructions, and other encroachments built in breach of RA 7279 and other

regulate, manage and operate a rationalized national port system in support of trade and

pertinent laws along the rivers, waterways, and esterosin Metro Manila. With respect to rivers,

(8)

26

national development. Moreover, Sec. 6-c of EO 513 states that the PPA has police authority

waterways, and esteros in Bulacan, Bataan, Pampanga, Cavite, and Laguna that discharge

within the

wastewater directly or eventually into the Manila Bay, the DILG shall direct the concerned

ports administered by it as may be necessary to carry out its powers and functions and attain

LGUs to implement the demolition and removal of such structures, constructions, and other

its purposes and objectives, without prejudice to the exercise of the functions of the Bureau of

encroachments built in violation of RA 7279 and other applicable laws in coordination with

Customs and other law enforcement bodies within the area. Such police authority shall include

the DPWH and concerned agencies.

the following:

(10) The Department of Health (DOH), under Article 76 of PD 1067 (the Water Code),

xxxx
b)

is tasked to promulgate rules and regulations for the establishment of waste disposal areas that

To regulate the entry to, exit from, and movement within the port, of persons and

vehicles, as well as movement within the port of watercraft.

27

affect the source of a water supply or a reservoir for domestic or municipal use. And under
Sec. 8 of RA 9275, the DOH, in coordination with the DENR, DPWH, and other concerned

Lastly, as a member of the International Marine Organization and a signatory to the

agencies, shall formulate guidelines and standards for the collection, treatment, and disposal of

International Convention for the Prevention of Pollution from Ships, as amended by

sewage and the establishment and operation of a centralized sewage treatment system. In areas

28

MARPOL 73/78, the Philippines, through the PPA, must ensure the provision of adequate

not considered as highly urbanized cities, septage or a mix sewerage-septage management

reception facilities at ports and terminals for the reception of sewage from the ships docking in

system shall be employed.

Philippine ports. Thus, the PPA is tasked to adopt such measures as are necessary to prevent

In accordance with Sec. 7230 of PD 856, the Code of Sanitation of the Philippines, and

the discharge and dumping of solid and liquid wastes and other ship-generated wastes into the

Sec. 5.1.131 of Chapter XVII of its implementing rules, the DOH is also ordered to ensure the

Manila Bay waters from vessels docked at ports and apprehend the violators. When the vessels

regulation and monitoring of the proper disposal of wastes by private sludge companies

are not docked at ports but within Philippine territorial waters, it is the PCG and PNP

through the strict enforcement of the requirement to obtain an environmental sanitation

Maritime Group that have jurisdiction over said vessels.

clearance of sludge collection treatment and disposal before these companies are issued their

(9)

The MMDA, as earlier indicated, is duty-bound to put up and maintain adequate

environmental sanitation permit.

sanitary landfill and solid waste and liquid disposal system as well as other alternative garbage

(11) The Department of Education (DepEd), under the Philippine Environment Code

disposal systems. It is primarily responsible for the implementation and enforcement of the

(PD 1152), is mandated to integrate subjects on environmental education in its school

curricula at all levels.32 Under Sec. 118 of RA 8550, the DepEd, in collaboration with the DA,

Section 17. Upgrading of Water Quality.Where the quality of water has deteriorated

Commission on Higher Education, and Philippine Information Agency, shall launch and

to a degree where its state will adversely affect its best usage, the government agencies

pursue a nationwide educational campaign to promote the development, management,

concerned shall take such measures as may be necessary to upgrade the quality of such water

conservation, and proper use of the environment. Under the Ecological Solid Waste

to meet the prescribed water quality standards.

Management Act (RA 9003), on the other hand, it is directed to strengthen the integration of

Section 20. Clean-up Operations.It shall be the responsibility of the polluter to

environmental concerns in school curricula at all levels, with an emphasis on waste

contain, remove and clean-up water pollution incidents at his own expense. In case of his

management principles.33

failure to do so, the government agencies concerned shall undertake containment, removal and

(12) The Department of Budget and Management (DBM) is tasked under Sec. 2, Title
XVII of the Administrative Code of 1987 to ensure the efficient and sound utilization of
government funds and revenues so as to effectively achieve the countrys development
objectives.

34

clean-up operations and expenses incurred in said operations shall be charged against the
persons and/or entities responsible for such pollution.
When the Clean Water Act (RA 9275) took effect, its Sec. 16 on the subject, Cleanup
Operations, amended the counterpart provision (Sec. 20) of the Environment Code (PD 1152).

One of the countrys development objectives is enshrined in RA 9275 or the Philippine

Sec. 17 of PD 1152 continues, however, to be operational.

Clean Water Act of 2004. This law stresses that the State shall pursue a policy of economic

The amendatory Sec. 16 of RA 9275 reads:

growth in a manner consistent with the protection, preservation, and revival of the quality of

SEC. 16. Cleanup Operations.Notwithstanding the provisions of Sections 15 and 26

our fresh, brackish, and marine waters. It also provides that it is the policy of the government,

hereof, any person who causes pollution in or pollutes water bodies in excess of the applicable

among others, to streamline processes and procedures in the prevention, control, and

and prevailing standards shall be responsible to contain, remove and clean up any pollution

abatement of pollution mechanisms for the protection of water resources; to promote

incident at his own expense to the extent that the same water bodies have been rendered unfit

environmental strategies and use of appropriate economic instruments and of control

for utilization and beneficial use:Provided, That in the event emergency cleanup operations

mechanisms for the protection of water resources; to formulate a holistic national program of

are necessary and the polluter fails to immediately undertake the same, the [DENR] in

water quality management that recognizes that issues related to this management cannot be

coordination with other government agencies concerned, shall undertake containment,

separated from concerns about water sources and ecological protection, water supply, public

removal and cleanup operations. Expenses incurred in said operations shall be reimbursed by

health, and quality of life; and to provide a comprehensive management program for water

the persons found to have caused such pollution under proper administrative determination

pollution focusing on pollution prevention.

x x x. Reimbursements of the cost incurred shall be made to the Water Quality Management

Thus, the DBM shall then endeavor to provide an adequate budget to attain the noble
objectives of RA 9275 in line with the countrys development objectives.
All told, the aforementioned enabling laws and issuances are in themselves clear,
categorical, and complete as to what are the obligations and mandate of each agency/petitioner
under the law. We need not belabor the issue that their tasks include the cleanup of the Manila
Bay.

Fund or to such other funds where said disbursements were sourced.

As may be noted, the amendment to Sec. 20 of the Environment Code is more apparent than
real since the amendment, insofar as it is relevant to this case, merely consists in the
designation of the DENR as lead agency in the cleanup operations.
Petitioners contend at every turn that Secs. 17 and 20 of the Environment Code concern
themselves only with the matter of cleaning up in specific pollution incidents, as opposed to

Now, as to the crux of the petition. Do Secs. 17 and 20 of the Environment Code
encompass the cleanup of water pollution in general, not just specific pollution incidents?

cleanup in general. They aver that the twin provisions would have to be read alongside the
succeeding Sec. 62(g) and (h), which defines the terms cleanup operations and accidental
spills, as follows:

Secs. 17 and 20 of the Environment Code

Include Cleaning in General

g. Clean-up Operations [refer] to activities conducted in removing the pollutants

discharged or spilled in water to restore it to pre-spill condition.
h. Accidental Spills [refer] to spills of oil or other hazardous substances in water that

The disputed sections are quoted as follows:

result from accidents such as collisions and groundings.

Petitioners proffer the argument that Secs. 17 and 20 of PD 1152 merely direct the

For another, a perusal of Sec. 20 of the Environment Code, as couched, indicates that it is

government agencies concerned to undertake containment, removal, and cleaning operations

properly applicable to a specific situation in which the pollution is caused by polluters who

of a specific polluted portion or portions of the body of water concerned. They maintain that

fail to clean up the mess they left behind. In such instance, the concerned government agencies

the application of said Sec. 20 is limited only to water pollution incidents, which are

shall undertake the cleanup work for the polluters account. Petitioners assertion, that they

situations that presuppose the occurrence of specific, isolated pollution events requiring the

have to perform cleanup operations in the Manila Bay only when there is a water pollution

corresponding containment, removal, and cleaning operations. Pushing the point further, they

incident and the erring polluters do not undertake the containment, removal, and cleanup

argue that the aforequoted Sec. 62(g) requires cleanup operations to restore the body of

operations, is quite off mark. As earlier discussed, the complementary Sec. 17 of the

water to pre-spill condition, which means that there must have been a specific incident of

Environment Code comes into play and the specific duties of the agencies to clean up come in

either intentional or accidental spillage of oil or other hazardous substances, as mentioned in

even if there are no pollution incidents staring at them. Petitioners, thus, cannot plausibly

Sec. 62(h).

invoke and hide behind Sec. 20 of PD 1152 or Sec. 16 of RA 9275 on the pretext that their

As a counterpoint, respondents argue that petitioners erroneously read Sec. 62(g) as delimiting

cleanup mandate depends on the happening of a specific pollution incident. In this regard,

the application of Sec. 20 to the containment, removal, and cleanup operations for accidental

what the CA said with respect to the impasse over Secs. 17 and 20 of PD 1152 is at once valid

spills only. Contrary to petitioners posture, respondents assert that Sec. 62(g), in fact, even

as it is practical. The appellate court wrote: PD 1152 aims to introduce a comprehensive

expanded the coverage of Sec. 20. Respondents explain that without its Sec. 62(g), PD 1152

program of environmental protection and management. This is better served by making Secs.

may have indeed covered only pollution accumulating from the day-to-day operations of

17 & 20 of general application rather than limiting them to specific pollution incidents.35

businesses around the Manila Bay and other sources of pollution that slowly accumulated in

Granting arguendo that petitioners position thus described vis--vis the implementation

the bay. Respondents, however, emphasize that Sec. 62(g), far from being a delimiting

of Sec. 20 is correct, they seem to have overlooked the fact that the pollution of the Manila

provision, in fact even enlarged the operational scope of Sec. 20, by including accidental spills

Bay is of such magnitude and scope that it is well-nigh impossible to draw the line between a

as among the water pollution incidents contemplated in Sec. 17 in relation to Sec. 20 of PD

specific and a general pollution incident. And such impossibility extends to pinpointing with

1152.

reasonable certainty who the polluters are. We note that Sec. 20 of PD 1152 mentions water

To respondents, petitioners parochial view on environmental issues, coupled with their

pollution incidents which may be caused by polluters in the waters of the Manila Bay itself or

narrow reading of their respective mandated roles, has contributed to the worsening water

by polluters in adjoining lands and in water bodies or waterways that empty into the bay. Sec.

quality of the Manila Bay. Assuming, respondents assert, that petitioners are correct in saying

16 of RA 9275, on the other hand, specifically adverts to any person who causes pollution in

that the cleanup coverage of Sec. 20 of PD 1152 is constricted by the definition of the phrase

or pollutes water bodies, which may refer to an individual or an establishment that pollutes

cleanup operations embodied in Sec. 62(g), Sec. 17 is not hobbled by such limiting

the land mass near the Manila Bay or the waterways, such that the contaminants eventually

definition. As pointed out, the phrases cleanup operations and accidental spills do not

end up in the bay. In this situation, the water pollution incidents are so numerous and involve

appear in said Sec. 17, not even in the chapter where said section is found.

nameless and faceless polluters that they can validly be categorized as beyond the specific

Respondents are correct. For one thing, said Sec. 17 does not in any way state that the

pollution incident level.

government agencies concerned ought to confine themselves to the containment, removal, and

Not to be ignored of course is the reality that the government agencies concerned are so

cleaning operations when a specific pollution incident occurs. On the contrary, Sec. 17

undermanned that it would be almost impossible to apprehend the numerous polluters of the

requires them to act even in the absence of a specific pollution incident, as long as water

Manila Bay. It may perhaps not be amiss to say that the apprehension, if any, of the Manila

quality has deteriorated to a degree where its state will adversely affect its best usage. This

Bay polluters has been few and far between. Hence, practically nobody has been required to

section, to stress, commands concerned government agencies, when appropriate, to take such

contain, remove, or clean up a given water pollution incident. In this kind of setting, it

measures as may be necessary to meet the prescribed water quality standards. In fine, the

behooves the Government to step in and undertake cleanup operations. Thus, Sec. 16 of RA

underlying duty to upgrade the quality of water is not conditional on the occurrence of any

9275, previously Sec. 20 of PD 1152, covers for all intents and purposes a general cleanup

pollution incident.

situation.

The cleanup and/or restoration of the Manila Bay is only an aspect and the initial stage of
the long-term solution. The preservation of the water quality of the bay after the rehabilitation

what is necessary for recreation, navigation, floatage, fishing or salvage or to build structures
of any kind. (Emphasis added)

process is as important as the cleaning phase. It is imperative then that the wastes and

Judicial notice may likewise be taken of factories and other industrial establishments

contaminants found in the rivers, inland bays, and other bodies of water be stopped from

standing along or near the banks of the Pasig River, other major rivers, and connecting

reaching the Manila Bay. Otherwise, any cleanup effort would just be a futile, cosmetic

waterways. But while they may not be treated as unauthorized constructions, some of these

exercise, for, in no time at all, the Manila Bay water quality would again deteriorate below the

establishments undoubtedly contribute to the pollution of the Pasig River and waterways. The

ideal minimum standards set by PD 1152, RA 9275, and other relevant laws. It thus behooves

DILG and the concerned LGUs, have, accordingly, the duty to see to it that non-complying

the Court to put the heads of the petitioner-department-agencies and the bureaus and offices

industrial establishments set up, within a reasonable period, the necessary waste water

under them on continuing notice about, and to enjoin them to perform, their mandates and

treatment facilities and infrastructure to prevent their industrial discharge, including their

duties towards cleaning up the Manila Bay and preserving the quality of its water to the ideal

sewage waters, from flowing into the Pasig River, other major rivers, and connecting

36

level. Under what other judicial discipline describes as continuingmandamus, the Court

waterways. After such period, non-complying establishments shall be shut down or asked to

may, under extraordinary circumstances, issue directives with the end in view of ensuring that

transfer their operations.

its decision would not be set to naught by administrative inaction or indifference. In India, the

At this juncture, and if only to dramatize the urgency of the need for petitioners-agencies

doctrine of continuing mandamus was used to enforce directives of the court to clean up the

to comply with their statutory tasks, we cite the Asian Development Bank-commissioned

length of the Ganges River from industrial and municipal pollution.37

study on the garbage problem in Metro Manila, the results of which are embodied in the The

The Court can take judicial notice of the presence of shanties and other unauthorized
structures which do not have septic tanks along the Pasig-Marikina-San Juan Rivers, the

Garbage Book. As there reported, the garbage crisis in the metropolitan area is as alarming as
it is shocking. Some highlights of the report:

National Capital Region (NCR) (Paraaque-Zapote, Las Pias) Rivers, the Navotas-Malabon-

1. As early as 2003, three land-filled dumpsites in Metro Manilathe Payatas, Catmon

Tullahan-Tenejeros Rivers, the Meycuayan-Marilao-Obando (Bulacan) Rivers, the Talisay

and Rodriquez dumpsitesgenerate an alarming quantity of lead and leachate or liquid run-

(Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other minor rivers and

off. Leachate are toxic liquids that flow along the surface and seep into the earth and poison

connecting waterways, river banks, and esteros which discharge their waters, with all the

the surface and groundwater that are used for drinking, aquatic life, and the environment.

accompanying filth, dirt, and garbage, into the major rivers and eventually the Manila Bay. If

2. The high level of fecal coliform confirms the presence of a large amount of human

there is one factor responsible for the pollution of the major river systems and the Manila Bay,

waste in the dump sites and surrounding areas, which is presumably generated by households

these unauthorized structures would be on top of the list. And if the issue of illegal or

that lack alternatives to sanitation. To say that Manila Bay needs rehabilitation is an

unauthorized structures is not seriously addressed with sustained resolve, then practically all

understatement.

efforts to cleanse these important bodies of water would be for naught. The DENR Secretary
said as much.

38

Giving urgent dimension to the necessity of removing these illegal structures is Art. 51 of
PD 1067 or the Water Code,39 which prohibits the building of structures within a given length
along banks of rivers and other waterways. Art. 51 reads:
The banks of rivers and streams and the shores of the seas and lakes throughout
their entire length and within a zone of three (3) meters in urban areas, twenty (20)

3. Most of the deadly leachate, lead and other dangerous contaminants and possibly
strains of pathogens seeps untreated into ground water and runs into the Marikina and Pasig
River systems and Manila Bay.40
Given the above perspective, sufficient sanitary landfills should now more than ever be
established as prescribed by the Ecological Solid Waste Management Act (RA 9003).
Particular note should be taken of the blatant violations by some LGUs and possibly the
MMDA of Sec. 37, reproduced below:

meters in agricultural areas and forty (40) meters in forest areas, along their margins,

Sec. 37. Prohibition against the Use of Open Dumps for Solid Waste.No open

are subject to the easement of public use in the interest of recreation, navigation,

dumps shall be established and operated, nor any practice or disposal of solid waste by any

floatage, fishing and salvage. No person shall be allowed to stay in this zone longer than

person, including LGUs which [constitute] the use of open dumps for solid waste, be allowed

after the effectivity of this Act: Provided, further, That no controlled dumps shall be allowed

RA 9003 is a sweeping piece of legislation enacted to radically transform and improve

five (5) years following the effectivity of this Act. (Emphasis added.)

waste management. It implements Sec. 16, Art. II of the 1987 Constitution, which explicitly

RA 9003 took effect on February 15, 2001 and the adverted grace period of five (5) years

provides that the State shall protect and advance the right of the people to a balanced and

which ended on February 21, 2006 has come and gone, but no single sanitary landfill which

healthful ecology in accord with the rhythm and harmony of nature.

strictly complies with the prescribed standards under RA 9003 has yet been set up.

So it was that in Oposa v. Factoran, Jr. the Court stated that the right to a balanced and

In addition, there are rampant and repeated violations of Sec. 48 of RA 9003, like

healthful ecology need not even be written in the Constitution for it is assumed, like other civil

littering, dumping of waste matters in roads, canals, esteros, and other public places, operation

and political rights guaranteed in the Bill of Rights, to exist from the inception of mankind and

of open dumps, open burning of solid waste, and the like. Some sludge companies which do

it is an issue of transcendental importance with intergenerational implications. 41 Even

not have proper disposal facilities simply discharge sludge into the Metro Manila sewerage

assuming the absence of a categorical legal provision specifically prodding petitioners to clean

system that ends up in the Manila Bay. Equally unabated are violations of Sec. 27 of RA 9275,

up the bay, they and the men and women representing them cannot escape their obligation to

which enjoins the pollution of water bodies, groundwater pollution, disposal of infectious

future generations of Filipinos to keep the waters of the Manila Bay clean and clear as

wastes from vessels, and unauthorized transport or dumping into sea waters of sewage or solid

humanly as possible. Anything less would be a betrayal of the trust reposed in them.

waste and of Secs. 4 and 102 of RA 8550 which proscribes the introduction by human or

WHEREFORE, the petition is DENIED. The September 28, 2005 Decision of the CA in

machine of substances to the aquatic environment including dumping/disposal of waste and

CA-G.R. CV No. 76528 and SP No. 74944 and the September 13, 2002 Decision of the RTC

other marine litters, discharge of petroleum or residual products of petroleum of carbonaceous

in Civil Case No. 1851-99 are AFFIRMED but with MODIFICATIONS in view of subsequent

materials/substances [and other] radioactive, noxious or harmful liquid, gaseous or solid

developments or supervening events in the case. The fallo of the RTC Decision shall now

substances, from any water, land or air transport or other human-made structure.

read:

In the light of the ongoing environmental degradation, the Court wishes to emphasize the

WHEREFORE, judgment is hereby rendered ordering the abovenamed defendant-

extreme necessity for all concerned executive departments and agencies to immediately act

government agencies to clean up, rehabilitate, and preserve Manila Bay, and restore and

and discharge their respective official duties and obligations. Indeed, time is of the essence;

maintain its waters to SB level (Class B sea waters per Water Classification Tables under

hence, there is a need to set timetables for the performance and completion of the tasks, some

DENR Administrative Order No. 34 [1990]) to make them fit for swimming, skin-diving, and

of them as defined for them by law and the nature of their respective offices and mandates.

other forms of contact recreation.

The importance of the Manila Bay as a sea resource, playground, and as a historical
landmark cannot be over-emphasized. It is not yet too late in the day to restore the Manila Bay

In particular:
(1)

Pursuant to Sec. 4 of EO 192, assigning the DENR as the primary agency

to its former splendor and bring back the plants and sea life that once thrived in its blue

responsible for the conservation, management, development, and proper use of the countrys

waters. But the tasks ahead, daunting as they may be, could only be accomplished if those

environment and natural resources, and Sec. 19 of RA 9275, designating the DENR as the

mandated, with the help and cooperation of all civic-minded individuals, would put their

primary government agency responsible for its enforcement and implementation, the DENR is

minds to these tasks and take responsibility. This means that the State, through petitioners, has

directed to fully implement its Operational Plan for the Manila Bay Coastal Strategy for the

to take the lead in the preservation and protection of the Manila Bay.

rehabilitation, restoration, and conservation of the Manila Bay at the earliest possible time. It

The era of delays, procrastination, and ad hocmeasures is over. Petitioners must transcend

is ordered to call regular coordination meetings with concerned government departments and

their limitations, real or imaginary, and buckle down to work before the problem at hand

agencies to ensure the successful implementation of the aforesaid plan of action in accordance

becomes unmanageable. Thus, we must reiterate that different government agencies and

with its indicated completion schedules.

instrumentalities cannot shirk from their mandates; they must perform their basic functions in

(2)

Pursuant to Title XII (Local Government) of the Administrative Code of 1987 and

cleaning up and rehabilitating the Manila Bay. We are disturbed by petitioners hiding behind

Sec. 25 of the Local Government Code of 1991,42 the DILG, in exercising the Presidents

two untenable claims: (1) that there ought to be a specific pollution incident before they are

power of general supervision and its duty to promulgate guidelines in establishing waste

required to act; and (2) that the cleanup of the bay is a discretionary duty.

management programs under Sec. 43 of the Philippine Environment Code (PD 1152), shall

direct all LGUs in Metro Manila, Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan to

DILG, affected LGUs, PNP Maritime Group, Housing and Urban Development Coordinating

inspect all factories, commercial establishments, and private homes along the banks of the

Council (HUDCC), and other agencies, shall dismantle and remove all structures,

major river systems in their respective areas of jurisdiction, such as but not limited to the

constructions, and other encroachments established or built in violation of RA 7279, and other

Pasig-Marikina-San Juan Rivers, the NCR (Paraaque-Zapote, Las Pias) Rivers, the Navotas-

applicable laws along the Pasig-Marikina-San Juan Rivers, the NCR (Paraaque-Zapote, Las

Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-Marilao-Obando (Bulacan) Rivers, the

Pias) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, and connecting waterways

Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other minor rivers

and esteros in Metro Manila. The DPWH, as the principal implementor of programs and

and waterways that eventually discharge water into the Manila Bay; and the lands abutting the

projects for flood control services in the rest of the country more particularly in Bulacan,

bay, to determine whether they have wastewater treatment facilities or hygienic septic tanks as

Bataan, Pampanga, Cavite, and Laguna, in coordination with the DILG, affected LGUs, PNP

prescribed by existing laws, ordinances, and rules and regulations. If none be found, these

Maritime Group, HUDCC, and other concerned government agencies, shall remove and

LGUs shall be ordered to require non-complying establishments and homes to set up said

demolish all structures, constructions, and other encroachments built in breach of RA 7279

facilities or septic tanks within a reasonable time to prevent industrial wastes, sewage water,

and other applicable laws along the Meycauayan-Marilao-Obando (Bulacan) Rivers, the

and human wastes from flowing into these rivers, waterways, esteros, and the Manila Bay,

Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other rivers,

under pain of closure or imposition of fines and other sanctions.

connecting waterways, and esteros that discharge wastewater into the Manila Bay.

As mandated by Sec. 8 of RA 9275,43 the MWSS is directed to provide, install,

In addition, the MMDA is ordered to establish, operate, and maintain a sanitary landfill,

operate, and maintain the necessary adequate waste water treatment facilities in Metro Manila,

as prescribed by RA 9003, within a period of one (1) year from finality of this Decision. On

Rizal, and Cavite where needed at the earliest possible time.

matters within its territorial jurisdiction and in connection with the discharge of its duties on

(3)

(4)

44

Pursuant to RA 9275, the LWUA, through the local water districts and in

the maintenance of sanitary landfills and like undertakings, it is also ordered to cause the

coordination with the DENR, is ordered to provide, install, operate, and maintain sewerage

apprehension and filing of the appropriate criminal cases against violators of the respective

and sanitation facilities and the efficient and safe collection, treatment, and disposal of sewage

penal provisions of RA 9003,47 Sec. 27 of RA 9275 (the Clean Water Act), and other existing

in the provinces of Laguna, Cavite, Bulacan, Pampanga, and Bataan where needed at the

laws on pollution.

earliest possible time.

(9)

The DOH shall, as directed by Art. 76 of PD 1067 and Sec. 8 of RA 9275, within

one (1) year from finality of this Decision, determine if all licensed septic and sludge
Pursuant to Sec. 65 of RA 8550,45 the DA, through the BFAR, is ordered to improve

companies have the proper facilities for the treatment and disposal of fecal sludge and sewage

and restore the marine life of the Manila Bay. It is also directed to assist the LGUs in Metro

coming from septic tanks. The DOH shall give the companies, if found to be non-complying, a

Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, and Bataan in developing, using

reasonable time within which to set up the necessary facilities under pain of cancellation of its

recognized methods, the fisheries and aquatic resources in the Manila Bay.

environmental sanitation clearance.

(5)

(6)

The PCG, pursuant to Secs. 4 and 6 of PD 979, and the PNP Maritime Group, in

(10)

Pursuant to Sec. 53 of PD 1152,48 Sec. 118 of RA 8550, and Sec. 56 of RA

accordance with Sec. 124 of RA 8550, in coordination with each other, shall apprehend

9003,49 the DepEd shall integrate lessons on pollution prevention, waste management,

violators of PD 979, RA 8550, and other existing laws and regulations designed to prevent

environmental protection, and like subjects in the school curricula of all levels to inculcate in

marine pollution in the Manila Bay.

the minds and hearts of students and, through them, their parents and friends, the importance

(7)

46

Pursuant to Secs. 2 and 6-c of EO 513 and the International Convention for the

Prevention of Pollution from Ships, the PPA is ordered to immediately adopt such measures to
prevent the discharge and dumping of solid and liquid wastes and other ship-generated wastes
into the Manila Bay waters from vessels docked at ports and apprehend the violators.
(8)

The MMDA, as the lead agency and implementor of programs and projects for flood

control projects and drainage services in Metro Manila, in coordination with the DPWH,

of their duty toward achieving and maintaining a balanced and healthful ecosystem in the
Manila Bay and the entire Philippine archipelago.
(11) The DBM shall consider incorporating an adequate budget in the General
Appropriations Act of 2010 and succeeding years to cover the expenses relating to the
cleanup, restoration, and preservation of the water quality of the Manila Bay, in line with the

countrys development objective to attain economic growth in a manner consistent with the
protection, preservation, and revival of our marine waters.
(12) The heads of petitioners-agencies MMDA, DENR, DepEd, DOH, DA, DPWH,
DBM, PCG, PNP Maritime Group, DILG, and also of MWSS, LWUA, and PPA, in line with
the principle of continuingmandamus, shall, from finality of this Decision, each submit to
the Court a quarterly progressive report of the activities undertaken in accordance with this
Decision.
No costs.
SO ORDERED.
Puno (C.J.), Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Carpio-Morales,
Azcuna, Tinga, Chico-Nazario, Nachura and Reyes, JJ., concur.
Corona and Brion JJ., On Leave.
Leonardo-De Castro, J., On Official Leave.

G.R. No. 103702. December 6, 1994.*

MUNICIPALITY

OF SAN

NARCISO,

to commence an action for quo warranto in his own name but this initiative can be done when

QUEZON; MAYOR JUAN K. UY;

he claims to be entitled to a public office or position usurped or unlawfully held or exercised

CAPIO,

by another. While the quo warranto proceedings filed below by petitioner municipality has

EMMANUEL R. CORTEZ, NORMANDO MONTILLA, LEONARDO C. UY, FIDEL

so named only the officials of the Municipality of San Andres as respondents, it is virtually,

C. AURELLANA, PEDRO C. CARABIT, LEONARDO D. AURELLANA, FABIAN M.

however, a denunciation of the authority of the Municipality or Municipal District of San

MEDENILLA, TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA, CERELITO

Andres to exist and to act in that capacity.

COUNCILORS:

DEOGRACIAS

R.

ARGOSINO

III,

BENITO

T.

B. AUREADA and FRANCISCA A. BAMBA, petitioners, vs. HON. ANTONIO V.

Same; Same; Same; A quo warranto proceeding assailing the lawful authority of a

MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th Judicial Region,

political subdivision must be timely raised.Executive Order No. 353 creating the municipal

Gumaca, Quezon; MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR

district of San Andres was issued on 20 August 1959 but it was only after almost thirty (30)

FRANCISCO DE LEON; COUNCILORS: FE LUPINAC, TOMAS AVERIA,

years, or on 05 June 1989, that the municipality of San Narciso finally decided to challenge

MANUEL O. OSAS, WILFREDO O. FONTANIL, ENRICO U. NADRES, RODELITO

the legality of the executive order. In the meantime, the Municipal District, and later the

LUZOIR, LENAC, JOSE L. CARABOT, DOMING AUSA, VIDAL BANQUELES and

Municipality of San Andres, began and continued to exercise the powers and authority of a

CORAZON M. MAXIMO, respondents.

duly created local government unit. In the same manner that the failure of a public officer to
question his ouster or the right of another to hold a position within a one-year period can

Appeals; Certiorari; Practice and Procedure; Where the petitioners raise in a petition

abrogate an action belatedly filed, so also, if not indeed with greatest imperativeness, must

for review on certiorari under Rules 42 and 45 the issue of grave abuse of discretion

a quo warranto proceeding assailing the lawful authority of a political subdivision be timely

amounting to lack of or in excess of jurisdiction, they intend to submit their case under Rule

raised. Public interest demands it.

65.Petitioners consider the instant petition to be one for review on certiorari under Rules

Same; Same; Same; Delegation of Powers; Even if Executive Order No. 353 creating

42 and 45 of the Rules of Court; at the same time, however, they question the orders of the

the Municipality of San Andres is a complete nullity for being the result of an unconstitutional

lower court for having been issued with grave abuse of discretion amounting to lack of or in

delegation of legislative power, the peculiar circumstances obtaining in the case hardly could

excess of jurisdiction, and that there is no other plain, speedy and adequate remedy in the

offer a choice other than to consider the Municipality to have at least attained a status

ordinary course of law available to petitioners to correct said Orders, to protect their rights and

uniquely of its own closely approximating, if not in fact attaining, that of a de facto municipal

to secure a final and definitive interpretation of the legal issues involved. Evidently, then, the

corporation.Granting that Executive Order No. 353 was a complete nullity for being the

petitioners intend to submit their case in this instance under Rule 65. We shall disregard the

result of an unconstitutional delegation of legislative power, the peculiar circumstances

procedural incongruence.

obtaining in this case hardly could offer a choice other than to consider the Municipality of

Actions; Quo Warranto; Municipal Corporations; Parties;When the inquiry is focused

San Andres to have at least attained a status uniquely of its own closely approximating, if not

on the legal existence of a body politic, the action is reserved to the State in a proceeding for

in fact attaining, that of a de facto municipal corporation. Conventional wisdom cannot allow

quo warranto or any other direct proceeding.The special civil action of quo warranto is a

it to be otherwise. Created in 1959 by virtue of Executive Order No. 353, the Municipality of

prerogative writ by which the Government can call upon any person to show by what warrant

San Andres had been in existence for more than six years when, on 24 December 1965, Pelaez

he holds a public office or exercises a public franchise.

v. Auditor General was promulgated. The ruling could have sounded the call for a similar

When the inquiry is focused on the legal existence of a body politic, the action is

declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case.

reserved to the State in a proceeding forquo warranto or any other direct proceeding. It must

On the contrary, certain governmental acts all pointed to the States recognition of the

be brought in the name of the Republic of the Philippines and commenced by the Solicitor

continued existence of the Municipality of San Andres. Thus, after more than five years as a

General or the fiscal when directed by the President of the Philippines x x x. Such officers

municipal district, Executive Order No. 174 classified the Municipality of San Andres as a

may, under certain circumstances, bring such an action at the request and upon the relation of

fifth class municipality after having surpassed the income requirement laid out in Republic

another person with the permission of the court. The Rules of Court also allows an individual

Act No. 1515. Section 31 of Batas Pambansa Blg. 129, otherwise known as the Judiciary

Reorganization Act of 1980, constituted as municipal circuits, in the establishment of

On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and

Municipal Circuit Trial Courts in the country, certain municipalities that comprised the

2630 of the Revised Administrative Code, as amended, Executive Order No. 353 creating the

municipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued

municipal district of San Andres, Quezon, by segregating from the municipality of San

by this Court pursuant to Presidential Decree No. 537. Under this administrative order, the

Narciso of the same province, the barrios of San Andres, Mangero, Alibijaban, Pansoy,

Municipality of San Andres had been covered by the 10th Municipal Circuit Court of San

Camflora and Tala along with their respectivesitios.

Francisco-San Andres for the province of Quezon.

Same; Same; Same; Local

Government

Executive Order No. 353 was issued upon the request, addressed to the President and
Code; The

power

to

create

political

coursed through the Provincial Board of Quezon, of the municipal council of San Narciso,

subdivisions is a function of the legislature; Section 442(d) of the Local Government Code

Quezon, in its Resolution No. 8 of 24 May 1959.1

converted municipal districts organized pursuant to presidential issuances or executive orders

By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado

into regular municipalities.At the present time, all doubts on the de jure standing of the

Macapagal, the municipal district of San Andres was later officially recognized to have gained

municipality must be dispelled. Under the Ordinance (adopted on 15 October 1986)

the status of a fifth class municipality beginning 01 July 1963 by operation of Section 2 of

apportioning the seats of the House of Repre-sentatives, appended to the 1987 Constitution,

Republic Act No. 1515.2 The executive order added that (t)he conversion of this municipal

the Municipality of San Andres has been considered to be one of the twelve (12)

district into (a) municipality as proposed in House Bill No. 4864 was approved by the House

municipalities composing the Third District of the province of Quezon. Equally significant is

of Representatives.

Section 442(d) of the Local Government Code to the effect that municipal districts organized

On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with

pursuant to presidential issuances or executive orders and which have their respective sets of

the Regional Trial Court, Branch 62, in Gumaca, Quezon, against the officials of the

elective municipal officials holding office at the time of the effectivity of (the) Code shall

Municipality of San Andres. Docketed Special Civil Action No. 2014-G, the petition sought

henceforth be considered as regular municipalities. No pretension of unconstitutionality per

the declaration of nullity of Executive Order No. 353 and prayed that the respondent local

se of Section 442(d) of the Local Government Code is proffered. It is doubtful whether such a

officials of the Municipality of San Andres be permanently ordered to refrain from performing

pretext, even if made, would succeed. The power to create political subdivisions is a function

the duties and functions of their respective offices.3 Invoking the ruling of this Court in Pelaez

of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code.

v. Auditor General,4 the petitioning municipality contended that Executive Order No. 353, a

Same; Same; Same; Same; Statutory

Construction;Curative

statutes

are

validly

presidential act, was a clear usurpation of the inherent powers of the legislature and in

accepted in this jurisdiction, subject to the usual qualification against impairment of vested

violation of the constitutional principle of separation of powers. Hence, petitioner municipality

rights.Curative laws, which in essence are retrospective, and aimed at giving validity to

argued, the officials of the Municipality or Municipal District of San Andres had no right to

acts done that would have been invalid under existing laws, as if existing laws have been

exercise the duties and functions of their respective offices that rightfully belonged to the

complied with, are validly accepted in this jurisdiction, subject to the usual qualification

corresponding officials of the Municipality of San Narciso.

against impairment of vested rights.

In their answer, respondents asked for the dismissal of the petition, averring, by way of
affirmative and special defenses, that since it was at the instance of petitioner municipality that

PETITION for review on certiorari of a decision of the Regional Trial Court of Gumaca,

the Municipality of San Andres was given life with the issuance of Executive Order No. 353,

Quezon, Br. 62.

it (petitioner municipality) should be deemed estopped from questioning the creation of the
new municipality;5 that because the Municipality of San Andres had been in existence since

The facts are stated in the opinion of the Court.

Manuel Laserna, Jr. for petitioners.
Florante Pamfilo for private respondents.
VITUG, J.:

1959, its corporate personality could no longer be assailed; and that, considering the petition to
be one for quo warranto, petitioner municipality was not the proper party to bring the action,
that prerogative being reserved to the State acting through the Solicitor General.6

On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial
court resolved to defer action on the motion to dismiss and to deny a judgment on the

the petitioners intend to submit their case in this instance under Rule 65. We shall disregard
the procedural incongruence.
The special civil action of quo warranto is a prerogative writ by which the Government

pleadings.
On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss

can call upon any person to show by what warrant he holds a public office or exercises a

alleging that the case had become moot and academic with the enactment of Republic Act No.

public franchise.13 When the inquiry is focused on the legal existence of a body politic, the

7160, otherwise known as the Local Government Code of 1991, which took effect on 01

action is reserved to the State in a proceeding for quo warranto or any other direct

January 1991. The movant municipality cited Section 442(d) of the law, reading thusly:

proceeding.14 It must be brought in the name of the Republic of the Philippines 15 and

Sec. 442. Requisites for Creation.x x x.

commenced by the Solicitor General or the fiscal when directed by the President of the

(d) Municipalities existing as of the date of the effectivity of this Code shall continue to

Philippines x x x.16 Such officers may, under certain circumstances, bring such an action at

exist and operate as such. Existing municipal districts organized pursuant to presidential

the request and upon the relation of another person with the permission of the court.17 The

issuances or executive orders and which have their respective set of elective municipal

Rules of Court also allows an individual to commence an action forquo warranto in his own

officials holding office at the time of the effectivity of this Code shall henceforth be

name but this initiative can be done when he claims to be entitled to a public office or

considered as regular municipalities.

position

The motion was opposed by petitioner municipality, contending that the above provision of

warranto proceedings filed below by petitioner municipality has so named only the officials of

law was inapplicable to the Municipality of San Andres since the enactment referred to legally

the Municipality of San Andres as respondents, it is virtually, however, a denunciation of the

existing municipalities and not to those whose mode of creation had been void ab initio.
8

In its Order of 02 December 1991, the lower court finally dismissed the petition for lack
of cause of action on what it felt was a matter that belonged to the State, adding that whatever
defects (were) present in the creation of municipal districts by the President pursuant to

usurped

or

unlawfully held

or

exercised by another. 18 While the quo

authority of the Municipality or Municipal District of San Andres to exist and to act in that
capacity.
At any rate, in the interest of resolving any further doubt on the legal status of the
Municipality of San Andres, the Court shall delve into the merits of the petition.

presidential issuances and executive orders, (were) cured by the enactment of R.A. 7160,

While petitioners would grant that the enactment of Republic Act No. 7160 may have

otherwise known as Local Government Code of 1991. In an order, dated 17 January 1992, the

converted the Municipality of San Andres into a de facto municipality, they, however, contend

same court denied petitioner municipalitys motion for reconsideration.

that since the petition for quo warranto had been filed prior to the passage of said law,

10

Hence, this petition for review on certiorari.Petitioners argue that in issuing the

petitioner municipality had acquired a vested right to seek the nullification of Executive Order

orders of 02 December 1991 and 17 January 1992, the lower court has acted with grave abuse

No. 353, and any attempt to apply Section 442 of Republic Act 7160 to the petition would

of discretion amounting to lack of or in excess of jurisdiction. Petitioners assert that the

perforce be violative of due process and the equal protection clause of the Constitution.

existence of a municipality created by a null and void presidential order may be attacked either

Petitioners theory might perhaps be a point to consider had the case been seasonably

directly or even collaterally by anyone whose interests or rights are affected, and that an

brought. Executive Order No. 353 creating the municipal district of San Andres was issued on

unconstitutional act is not a law, creates no office and is inoperative such as though it has

20 August 1959 but it was only after almost thirty (30) years, or on 05 June 1989, that the

never been passed.

11

municipality of San Narciso finally decided to challenge the legality of the executive order. In

Petitioners consider the instant petition to be one for review on certiorari under Rules

the meantime, the Municipal District, and later the Municipality, of San Andres, began and

42 and 45 of the Rules of Court; at the same time, however, they question the orders of the

continued to exercise the powers and authority of a duly created local government unit. In the

lower court for having been issued with grave abuse of discretion amounting to lack of or in

same manner that the failure of a public officer to question his ouster or the right of another to

excess of jurisdiction, and that there is no other plain, speedy and adequate remedy in the

hold a position within a one-year period can abrogate an action belatedly filed,19 so also, if not

ordinary course of law available to petitioners to correct said Orders, to protect their rights and

indeed with greatest imperativeness, must a quo warrantoproceeding assailing the lawful

12

to secure a final and definitive interpretation of the legal issues involved. Evidently, then,

authority of a political subdivision be timely raised.20 Public interest demands it.

Granting that Executive Order No. 353 was a complete nullity for being the result of an
unconstitutional delegation of legislative power, the peculiar circumstances obtaining in this
case hardly could offer a choice other than to consider the Municipality of San Andres to have
at least attained a status uniquely of its own closely approximating, if not in fact attaining, that
of a de facto municipal corporation. Conventional wisdom cannot allow it to be otherwise.
Created in 1959 by virtue of Executive Order No. 353, the Municipality of San Andres had
been in existence for more than six years when, on 24 December 1965,Pelaez v. Auditor
General was promulgated. The ruling could have sounded the call for a similar declaration of

All considered, the de jure status of the Municipality of San Andres in the province of
Quezon must now be conceded.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against
petitioners.
SO ORDERED.
Narvasa (C.J.), Padilla, Bidin, Regalado,Davide,
Jr, Romero, Bellosillo, Melo, Quiason, Puno,Kapunan and Mendoza, JJ., concur.
Feliciano, J., On leave.

the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the

Petition dismissed.

contrary, certain governmental acts all pointed to the States recognition of the continued

Note.Subprovince may be converted to province where the people of both the original

existence of the Municipality of San Andres. Thus, after more than five years as a municipal

district and the people of the new district to be created agree to the proposed creation of the

district, Executive Order No. 174 classified the Municipality of San Andres as a fifth class

latter. (Grio vs. Commission on Elections, 213 SCRA 672 [1992])

municipality after having surpassed the income requirement laid out in Republic Act No.
1515. Section 31 of Batas Pambansa Blg. 129, otherwise known as the Judiciary
Reorganization Act of 1980, constituted as municipal circuits, in the establishment of
Municipal Circuit Trial Courts in the country, certain municipalities that comprised the
municipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued
by this Court pursuant to Presidential Decree No. 537. Under this administrative order, the
Municipality of San Andres had been covered by the 10th Municipal Circuit Court of San
Francisco-San Andres for the province of Quezon.
At the present time, all doubts on the de jurestanding of the municipality must be
dispelled. Under the Ordinance (adopted on 15 October 1986) apportioning the seats of the
House of Representatives, appended to the 1987 Constitution, the Muni-cipality of San Andres
has been considered to be one of the twelve (12) municipalities composing the Third District
of the province of Quezon. Equally significant is Section 442(d) of the Local Government
Code to the effect that municipal districts organized pursuant to presidential issuances or
executive orders and which have their respective sets of elective municipal officials holding
office at the time of the effectivity of (the) Code shall henceforth be considered as regular
municipalities. No pretension of unconstitutionality per se of Section 442(d) of the Local
Government Code is proffered. It is doubtful whether such a pretext, even if made, would
succeed. The power to create political subdivisions is a function of the legislature. Congress
did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in
essence are retrospective,21 and aimed at giving validity to acts done that would have been
invalid under existing laws, as if existing laws have been complied with, are validly accepted
in this jurisdiction, subject to the usual qualification against impairment of vested rights. 22

o0o

G.R. No. 166429. December 19, 2005.*

means by which such goals may be accomplished.The right of eminent domain extends to

REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Eduardo R.

personal and real property, and the NAIA 3 structures, adhered as they are to the soil, are

Ermita, the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS

considered as real property. The public purpose for the expropriation is also beyond dispute. It

(DOTC), and the MANILA INTERNATIONAL AIRPORT AUTHORITY (MIAA),

should also be noted that Section 1 of Rule 67 (on Expropriation) recognizes the possibility

petitioners, vs. HON. HENRICK F. GINGOYON, In his capacity as Presiding Judge of

that the property sought to be expropriated may be titled in the name of the Republic of the

the Regional Trial Court, Branch 117, Pasay City and PHILIPPINE INTERNATIONAL

Philippines, although occupied by private individuals, and in such case an averment to that

AIR TERMINALS CO., INC., respondents.

effect should be made in the complaint. The instant expropriation complaint did aver that the
NAIA 3 complex stands on a parcel of land owned by the Bases Conversion Development

Eminent Domain; Judgments; The Court in the 2004 Resolution in the case of Agan v.

Authority, another agency of [the Republic of the Philippines]. Admittedly, eminent domain

Philippine International Air Terminals Co., Inc. (PIATCO), 420 SCRA 575 (2004), prescribed

is not the sole judicial recourse by which the Government may have acquired the NAIA 3

mandatory guidelines which the Government must observe before it could acquire the Ninoy

facilities while satisfying the requisites in the 2004 Resolution. Eminent domain though may

Aquino

facilities.The

be the most effective, as well as the speediest means by which such goals may be

pronouncement in the 2004 Resolution is especially significant to this case in two aspects,

accomplished. Not only does it enable immediate possession after satisfaction of the requisites

namely: (i) that PIATCO must receive payment of just compensation determined in

under the law, it also has a built-in procedure through which just compensation may be

accordance with law and equity; and (ii) that the government is barred from taking over NAIA

ascertained. Thus, there should be no question as to the propriety of eminent domain

3 until such just compensation is paid. The parties cannot be allowed to evade the directives

proceedings in this case.

International

Airport

Passenger

Terminal

III

(NAIA

3)

laid down by this Court through any mode of judicial action, such as the complaint for

Same; Same; Rule 67 merely requires the Government to deposit with an authorized

eminent domain. It cannot be denied though that the Court in the 2004 Resolution prescribed

government depositary the assessed value of the property for expropriation for it to be entitled

mandatory guidelines which the Government must observe before it could acquire the NAIA 3

to a writ of possession; The staging of expropriation proceedings in this case with the

facilities. Thus, the actions of respondent judge under review, as well as the arguments of the

exclusive use of Rule 67 would allow for the Government to take over the NAIA 3 facilities in a

parties must, to merit affirmation, pass the threshold test of whether such propositions are in

fashion that directly rebukes our 2004 Resolution in Agan.As can be gleaned from the

accord with the 2004 Resolution.

above-quoted texts, Rule 67 merely requires the Government to deposit with an authorized

Same; Same; The case at bar is a highly unusual case, whereby the Government seeks

government depositary the assessed value of the property for expropriation for it to be entitled

to expropriate a building complex constructed on land which the State already ownsthere is

to a writ of possession. On the other hand, Republic Act No. 8974 requires that the

an inherent illogic in the resort to eminent domain on property already owned by the State.

Government make a direct payment to the property owner before the writ may issue.

The Government has chosen to resort to expropriation, a remedy available under the law,

Moreover, such payment is based on the zonal valuation of the BIR in the case of land, the

which has the added benefit of an integrated process for the determination of just

value of the improvements or structures under the replacement cost method, or if no such

compensation and the payment thereof to PIATCO. We appreciate that the case at bar is a

valuation is available and in cases of utmost urgency, the proffered value of the property to be

highly unusual case, whereby the Government seeks to expropriate a building complex

seized. It is quite apparent why the Government would prefer to apply Rule 67 in lieu of

constructed on land which the State already owns. There is an inherent illogic in the resort to

Republic Act No. 8974. Under Rule 67, it would not be obliged to immediately pay any

eminent domain on property already owned by the State. At first blush, since the State already

amount to PIATCO before it can obtain the writ of possession since all it need do is deposit

owns the property on which NAIA 3 stands, the proper remedy should be akin to an action for

the amount equivalent to the assessed value with an authorized government depositary. Hence,

ejectment.

it devotes considerable effort to point out that Republic Act No. 8974 does not apply in this

Same; Same; Admittedly, eminent domain is not the sole judicial recourse by which the

case, notwithstanding the undeniable reality that NAIA 3 is a national government project.

Government may have acquired the NAIA 3 facilities while satisfying the requisites in the

Yet, these efforts fail, especially considering the controlling effect of the 2004 Resolution

2004 Resolution though eminent domain may be the most effective, as well as the speediest

inAgan on the adjudication of this case. It is the finding of this Court that the staging of

expropriation proceedings in this case with the exclusive use of Rule 67 would allow for the

Same; Same; National Government Infrastructure Projects; Words and Phrases; R.A.

Government to take over the NAIA 3 facilities in a fashion that directly rebukes our 2004

No. 8974 is intended to cover expropriation proceedings intended for national government

Resolution in Agan. This Court cannot sanction deviation from its own final and executory

infrastructure projects. Section 2 of Republic Act No. 8974 explains what are considered as

orders.

national government projects.Republic Act No. 8974 is entitled An Act To Facilitate

Same; R.A. No. 8974; It is the plain intent of Republic Act No. 8974 to supersede the

The Acquisition Of Right-Of-Way, Site Or Location For National Government Infrastructure

system of deposit under Rule 67 with the scheme of immediate payment in cases involving

Projects And For Other Purposes. Obviously, the law is intended to cover expropriation

national government infrastructure projects.If Section 2 of Rule 67 were to apply, PIATCO

proceedings intended for national government infrastructure projects. Section 2 of Republic

would be enjoined from receiving a single centavo as just compensation before the

Act No. 8974 explains what are considered as national government projects. Sec.

Government takes over the NAIA 3 facility by virtue of a writ of possession. Such an

2. National Government Projects.The term national government projects shall refer to all

injunction squarely contradicts the letter and intent of the 2004 Resolution. Hence, the position

national government infrastructure, engineering works and service contracts, including

of the Government sanctions its own disregard or violation the prescription laid down by this

projects undertaken by governmentowned and controlled corporations, all projects covered by

Court that there must first be just compensation paid to PIATCO before the Government may

Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the Build-

take over the NAIA 3 facilities. Thus, at the very least, Rule 67 cannot apply in this case

Operate-and-Transfer Law, and other related and necessary activities, such as site acquisition,

without violating the 2004 Resolution. Even assuming that Rep. Act No. 8974 does not govern

supply and/or installation of equipment and materials, implementation, construction,

in this case, it does not necessarily follow that Rule 67 should then apply. After all, adherence

completion, operation, maintenance, improvement, repair and rehabilitation, regardless of the

to the letter of Section 2, Rule 67 would in turn violate the Courts requirement in the 2004

source offending.

Resolution that there must first be payment of just compensation to PIATCO before the

Same; Same; There can be no doubt that PIATCO has ownership rights over the

Government may take over the property. It is the plain intent of Republic Act No. 8974 to

facilities which it had financed and constructed.As acknowledged in the 2003 Decision, the

supersede the system of deposit under Rule 67 with the scheme of immediate payment in

development of NAIA 3 was made pursuant to a build-operate-and-transfer arrangement

cases involving national government infrastructure projects.

pursuant to Republic Act No. 6957, as amended, which pertains to infrastructure or

Same; Same; Just Compensation; Standards of Just Compensation; Separation of

development projects normally financed by the public sector but which are now wholly or

Powers; The appropriate standard of just compensation is a substantive matter, and it is well

partly implemented by the private sector. Under the build-operate-and-transfer scheme, it is

within the province of the legislature to fix the standard.It likewise bears noting that the

the project proponent which undertakes the construction, including the financing, of a given

appropriate standard of just compensation is a substantive matter. It is well within the province

infrastructure facility. InTatad v. Garcia, the Court acknowledged that the operator of the

of the legislature to fix the standard, which it did through the enactment of Republic Act No.

EDSA Light Rail Transit project under a BOT scheme was the owner of the facilities such as

8974. Specifically, this prescribes the new standard in determining the amount of just

the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant.

compensation in expropriation cases relating to national government infrastructure project, as

There can be no doubt that PIATCO has ownership rights over the facilities which it had

well as the payment of the provisional value as a prerequisite to the issuance of a writ of

financed and constructed. The 2004 Resolution squarely recognized that right when it

possession. Of course, rules of procedure, as distinguished from substantive matters, remain

mandated the payment of just compensation to PIATCO prior to the takeover by the

the exclusive preserve of the Supreme Court by virtue of Section 5(5), Article VIII of the

Government of NAIA 3. The fact that the Government resorted to eminent domain

Constitution. Indeed, Section 14 of the Implementing Rules recognizes the continued

proceedings in the first place is a concession on its part of PIATCOs ownership. Indeed, if no

applicability of Rule 67 on procedural aspects when it provides all matters regarding defenses

such right is recognized, then there should be no impediment for the Government to seize

and objections to the complaint, issues on uncertain ownership and conflicting claims, effects

control of NAIA 3 through ordinary ejectment proceedings.

of appeal on the rights of the parties, and such other incidents affecting the complaint shall be
resolved under the provisions on expropriation of Rule 67 of the Rules of Court.

Same; Same; Words

and

Phrases; Right-of-Way,

Site,

and

Location,

Explained; The Court cannot accept the Governments proposition that the only properties
that may be expropriated under Rep. Act No. 8974 are parcels of landR.A. No. 8974

contemplates within its coverage such real property constituting land, buildings, roads and

constructed thereon, and a disparate treatment between those two classes of real property

constructions of all kinds adhered to the soil.There is no doubt that the NAIA 3 is not, under

infringes the equal protection clause.

any sensible contemplation, a right-of-way. Yet we cannot agree with the Governments

Same; Same; Just Compensation; Unlike in the case of Rule 67, the application of

insistence that neither could NAIA 3 be a site or location. The petition quotes the

Republic Act No. 8974 will not contravene the 2004 Resolution, which requires the payment of

definitions provided in Blacks Law Dictionary of location as the specific place or position

just compensation before any takeover of the NAIA 3 facilities by the Government.Even as

of a person or thing and site as pertaining to a place or location or a piece of property set

the provisions of Rep. Act No. 8974 call for that laws application in this case, the threshold

aside for specific use. Yet even Blacks Law Dictionary provides that [t]he term [site] does

test must still be met whether its implementation would conform to the dictates of the Court in

not of itself necessarily mean a place or tract of land fixed by definite boundaries. One would

the 2004 Resolution. Unlike in the case of Rule 67, the application of Republic Act No. 8974

assume that the Government, to back up its contention, would be able to point to a clear-cut

will not contravene the 2004 Resolution, which requires the payment of just compensation

rule that a site or location exclusively refers to soil, grass, pebbles and weeds. There is

before any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does

none. Indeed, we cannot accept the Governments proposition that the only properties that

not particularize the extent such payment must be effected before the takeover, but it

may be expropriated under Republic Act No. 8974 are parcels of land.] Republic Act No. 8974

unquestionably requires at least some degree of payment to the private property owner before

contemplates within its coverage such real property constituting land, buildings, roads and

a writ of possession may issue. The utilization of Republic Act No. 8974 guarantees

constructions of all kinds adhered to the soil. Section 1 of Republic Act No. 8974, which sets

compliance with this bare minimum requirement, as it assures the private property owner the

the declaration of the laws policy, refers to real property acquired for national government

payment of, at the very least, the proffered value of the property to be seized. Such payment of

infrastructure projects are promptly paid just compensation. Section 4 is quite explicit in

the proffered value to the owner, followed by the issuance of the writ of possession in favor of

stating that the scope of the law relates to the acquisition of real property, which under civil

the Government, is precisely the schematic under Republic Act No. 8974, one which facially

law includes buildings, roads and constructions adhered to the soil.

complies with the prescription laid down in the 2004 Resolution. Clearly then, we see no error

Same; Same; Equal Protection Clause; Any sub-classifications of real property and
divergent treatment based thereupon for purposes of expropriation must be based on

on the part of the RTC when it ruled that Republic Act No. 8974 governs the instant
expropriation proceedings.

substantial distinctions, otherwise the equal protection clause of the Constitution is violated

Same; Same; Same; R.A. No. 8974 permits an expedited means by which the

there may be perhaps a molecular distinction between soil and the inorganic improvements

Government can immediately take possession of the property without having to await precise

adhered thereto, yet there are no purposive distinctions that would justify a variant treatment

determination of the valuation. Section 4(c) of Rep. Act No. 8974 states that in case the

for purposes of expropriation.The law classifies the NAIA 3 facilities as real properties just

completion of a government infrastructure project is of utmost urgency and importance, and

like the soil to which they are adhered. Any subclassifications of real property and divergent

there is no existing valuation of the area concerned, the implementing agency shall

treatment based thereupon for purposes of expropriation must be based on substantial

immediately pay the owner of the property its proffered value.Admittedly, there is no way,

distinctions, otherwise the equal protection clause of the Constitution is violated. There may

at least for the present, to immediately ascertain the value of the improvements and structures

be perhaps a molecular distinction between soil and the inorganic improvements adhered

since such valuation is a matter for factual determination. Yet Republic Act No. 8974 permits

thereto, yet there are no purposive distinctions that would justify a variant treatment for

an expedited means by which the Government can immediately take possession of the

purposes of expropriation. Both the land itself and the improvements thereupon are susceptible

property without having to await precise determination of the valuation. Section 4(c) of

to private ownership independent of each other, capable of pecuniary estimation, and if taken

Republic Act No. 8974 states that in case the completion of a government infrastructure

from the owner, considered as a deprivation of property. The owner of improvements seized

project is of utmost urgency and importance, and there is no existing valuation of the area

through expropriation suffers the same degree of loss as the owner of land seized through

concerned, the implementing agency shall immediately pay the owner of the property

similar means. Equal protection demands that all persons or things similarly situated should be

its proffered value, taking into consideration the standards prescribed in Section 5 [of the

treated alike, both as to rights conferred and responsibilities imposed. For purposes of

law]. The proffered value may strike as a highly subjective standard based solely on the

expropriation, parcels of land are similarly situated as the buildings or improvements

intuition of the government, but Republic Act No. 8974 does provide relevant standards by

which proffered value should be based, as well as the certainty of judicial determination of

there must first be payment before the writ of possession can issue. While the RTC did direct

the propriety of the proffered value.

the LBP-Baclaran to immediately release the amount of US$62 Million to PIATCO, it should

Same; Same; Same; In ascertaining the proffered value adduced by the Government,

have likewise suspended the writ of possession, nay, withdrawn it altogether, until the

the amount of P3 Billion as the amount deposited characterized in the complaint as to be

Government shall have actually paid PIATCO. This is the inevitable consequence of the clear

held by [Land Bank] subject to the [RTCs] orders, should be deemed as controlling.Still,

command of Republic Act No. 8974 that requires immediate payment of the initially

such intention the Government may have had as to the entire US$62.3 Million is only

determined amount of just compensation should be effected. Otherwise, the overpowering

inferentially established. In ascertaining the proffered value adduced by the Government, the

intention of Republic Act No. 8974 of ensuring payment first before transfer of repossession

amount of P3 Billion as the amount deposited characterized in the complaint as to be held by

would be eviscerated.

[Land Bank] subject to the [RTCs] orders, should be deemed as controlling. There is no

Same; Same; Same; Statutory Construction; R.A. No. 8974 is plainly clear in imposing

clear evidence that the Government intended to offer US$62.3 Million as the initial payment

the requirement of immediate prepayment, and no amount of statutory deconstruction can

of just compensation, the wording of the Land Bank Certification notwithstanding, and

evade such requisiteR.A. No. 8974 enshrines a new approach towards eminent domain that

credence should be given to the consistent position of the Government on that aspect. In any

reconciles the inherent unease attending expropriation proceedings with a position of

event, for the RTC to be able to justify the payment of US$62.3 Million to PIATCO and not

fundamental equity; Under the new modality prescribed by Republic Act No. 8974, the private

P3 Billion Pesos, he would have to establish that the higher amount represents the valuation of

owner sees immediate monetary recompense with the same degree of speed as the taking of

the structures/improvements, and not the BIR zonal valuation on the land wherein NAIA 3 is

his/her property.Republic Act No. 8974 represents a significant change from previous

built. TheOrder dated 5 January 2005 fails to establish such integral fact, and in the absence of

expropriation laws such as Rule 67, or even Section 19 of the Local Government Code. Rule

contravening proof, the proffered value of P3 Billion, as presented by the Government, should

67 and the Local Government Code merely provided that the Government deposit the initial

prevail.

amounts antecedent to acquiring possession of the property with, respectively, an authorized

Same; Same; Same; R.A. No. 8974 plainly requires direct payment to the property

Government depositary or the proper court. In both cases, the private owner does not receive

owner, and not a mere deposit with the authorized government depositarywithout such

compensation prior to the deprivation of property. On the other hand, Republic Act No. 8974

direct payment, no writ of possession may be obtained.The Government submits that

mandates immediate payment of the initial just compensation prior to the issuance of the writ

assuming that Republic Act No. 8974 is applicable, the deposited amount of P3 Billion should

of possession in favor of the Government. Republic Act No. 8974 is plainly clear in imposing

be considered as the proffered value, since the amount was based on comparative values made

the requirement of immediate prepayment, and no amount of statutory deconstruction can

by the City Assessor. Accordingly, it should be deemed as having faithfully complied with the

evade such requisite. It enshrines a new approach towards eminent domain that reconciles the

requirements of the statute. While the Court agrees that P3 Billion should be considered as the

inherent unease attending expropriation proceedings with a position of fundamental equity.

correct proffered value, still we cannot deem the Government as having faithfully complied

While expropriation proceedings have always demanded just compensation in exchange for

with Republic Act No. 8974. For the law plainly requires direct payment to the property

private property, the previous deposit requirement impeded immediate compensation to the

owner, and not a mere deposit with the authorized government depositary. Without such direct

private owner, especially in cases wherein the determination of the final amount of

payment, no writ of possession may be obtained.

compensation would prove highly disputed. Under the new modality prescribed by Republic

Same; Same; Same; While the RTC did direct the LBPBaclaran to immediately release
the amount of US$62 Million to PIATCO, it should have likewise suspended the writ of

Act No. 8974, the private owner sees immediate monetary recompense with the same degree
of speed as the taking of his/her property.

possession, nay, withdrawn it altogether, until the Government shall have actually paid

Same; Same; Same; The expedited procedure of payment, as highlighted under R.A. No.

PIATCO, which is the inevitable consequence of the clear command of R.A. No. 8974.The

8974, is inherently more fair, especially to the layperson who would be hard-pressed to fully

Court thus finds another error on the part of the RTC. The RTC authorized the issuance of the

comprehend the social value of expropriation in the first place.While eminent domain lies

writ of possession to the Government notwithstanding the fact that no payment of any amount

as one of the inherent powers of the State, there is no requirement that it undertake a

had yet been made to PIATCO, despite the clear command of Republic Act No. 8974 that

prolonged procedure, or that the payment of the private owner be protracted as far as

practicable. In fact, the expedited procedure of payment, as highlighted under Republic Act

upon the issuance of the writ of possession. Section 4 states that the court shall immediately

No. 8974, is inherently more fair, especially to the layperson who would be hard-pressed to

issue to the implementing agency an order to take possession of the property and start the

fully comprehend the social value of expropriation in the first place. Immediate payment

implementation of the project. We hold that accordingly, once the Writ of Possession is

placates to some degree whatever ill-will that arises from expropriation, as well as satisfies the

effective, the Government itself is authorized to perform the acts that are essential to the

demand of basic fairness. The Court has the duty to implement Republic Act No. 8974 and to

operation of the NAIA 3 as an international airport terminal upon the effectivity of the Writ of

direct compliance with the requirement of immediate payment in this case. Accordingly, the

Possession. These would include the repair, reconditioning and improvement of the complex,

Writ of Possession dated 21 December 2004 should be held in abeyance, pending proof of

maintenance of the existing facilities and equipment, installation of new facilities and

actual payment by the Government to PIATCO of the proffered value of the NAIA 3 facilities,

equipment, provision of services and facilities pertaining to the facilitation of air traffic and

which totals P3,002,125,000.00.

transport, and other services that are integral to a modern-day international airport.

Same; Possession; There are critical reasons for the Court to view the 2004 Resolution

Same; Same; Republic v. Tagle, 299 SCRA 549 (1998), may concede that the

less stringently, and thus allow the operation by the Government of NAIA 3 upon the effectivity

Government is entitled to exercise more than just the right of possession by virtue of the writ

of the Writ of Possession.The RTC, in its 10 January 2005 Omnibus Order, expressly stated

of possession, yet it cannot be construed to grant the Government the entire panoply of rights

that it was not affirming the superfluous part of the Order [of 4 January 2005] prohibiting the

that are available to the owner.The Governments position is more expansive than that

plaintiffs from awarding concessions or leasing any part of NAIA [3] to other parties. Still,

adopted by the Court. It argues that with the writ of possession, it is enabled to perform acts de

such statement was predicated on the notion that since the Government was not yet the owner

jure on the expropriated property. It cites Republic v. Tagle, as well as the statement therein

of NAIA 3 until final payment of just compensation, it was obviously incapacitated to perform

that the expropriation of real property does not include mere physical entry or occupation of

such acts of ownership. In deciding this question, the 2004 Resolution in Agan cannot be

land, and from them concludes that its mere physical entry and occupation of the property

ignored, particularly the declaration that [f]or the government to take over the said facility, it

fall short of the taking of title, which includes all the rights that may be exercised by an owner

has to compensate respondent PIATCO as builder of the said structures. The obvious import

over the subject property. This conclusion is indeed lifted directly from statements in Tagle,

of this holding is that unless PIATCO is paid just compensation, the Government is barred

but not from the ratio decidendi of that case. Tagle concerned whether a writ of possession in

from taking over, a phrase which in the strictest sense could encompass even a bar of

favor of the Government was still necessary in light of the fact that it was already in actual

physical possession of NAIA 3, much less operation of the facilities. There are critical reasons

possession of the property. In ruling that the Government was entitled to the writ of

for the Court to view the 2004Resolution less stringently, and thus allow the operation by the

possession, the Court in Tagle explains that such writ vested not only physical possession, but

Government of NAIA 3 upon the effectivity of the Writ of Possession. For one, the national

also the legal right to possess the property. Continues the Court, such legal right to possess

prestige is diminished every day that passes with the NAIA 3 remaining mothballed. For

was particularly important in the case, as there was a pending suit against the Republic for

another, the continued non-use of the facilities contributes to its physical deterioration, if it has

unlawful detainer, and the writ of possession would serve to safeguard the Government from

not already. And still for another, the economic benefits to the Government and the country at

eviction. At the same time, Tagle conforms to the obvious, that there is no transfer of

large are beyond dispute once the NAIA 3 is put in operation.

ownership as of yet by virtue of the writ of possession. Tagle may concede that the

Same; Same; Once the Writ of Possession is effective, the Government itself is

Government is entitled to exercise more than just the right of possession by virtue of the writ

authorized to perform the acts that are essential to the operation of the NAIA 3 as an

of possession, yet it cannot be construed to grant the Government the entire panoply of rights

international airport terminal, and these would include the repair, reconditioning and

that are available to the owner. Certainly, neitherTagle nor any other case or law, lends

improvement of the complex, maintenance of the existing facilities and equipment, installation

support to the Governments proposition that it acquires beneficial or equitable ownership of

of new facilities and equipment, provision of services and facilities pertaining to the

the expropriated property merely through the writ of possession.

facilitation of air traffic and transport, and other services that are integral to a modern-day

Same; Just Compensation; The proper judicial attitude is to guarantee compliance with

international airport.Republic Act No. 8974 provides the appropriate answer for the

the primordial right to just compensation.Lim serves fair warning to the Government and its

standard that governs the extent of the acts the Government may be authorized to perform

agencies who consistently refuse to pay just compensation due to the private property owner

whose property had been expropriated. At the same time, Limemphasizes the fragility of the

67 of the Rules of Court. Even without Rule 67, reference during trial to a commissioner of

rights of the Government, as possessor pending the final payment of just compensation,

the examination of an issue of fact is sanctioned under Rule 32 of the Rules of Court. But

without diminishing the potency of such rights. Indeed, the public policy, enshrined foremost

while the appointment of commissioners under the aegis of Rule 67 may be sanctioned in

in the Constitution, mandates that the Government must pay for the private property it

expropriation proceedings under Republic Act No. 8974, the standards to be observed for the

expropriates. Consequently, the proper judicial attitude is to guarantee compliance with this

determination of just compensation are provided not in Rule 67 but in the statute. In particular,

primordial right to just compensation.

the governing standards for the determination of just compensation for the NAIA 3 facilities

Same; Same; The sixty (60)-day period prescribed in Republic Act No. 8974 gives teeth
to the laws avowed policy to ensure that owners of real property acquired for national

are found in Section 10 of the Implementing Rules for Republic Act No. 8974, which provides
for the replacement cost method in the valuation of improvements and structures.

government infrastructure projects are promptly paid just compensation.R.A. No. 8974

Same; Same; Same; Nothing in Rule 67 or Republic Act No. 8974 requires that the RTC

mandates a speedy method by which the final determination of just compensation may be had.

consult with the parties in the expropriation case on who should be appointed as

Section 4 provides: In the event that the owner of the property contests the implementing

commissionerswhat Rule 67 does allow though is for the parties to protest the appointment

agencys proffered value, the court shall determine the just compensation to be paid the owner

of any of these commissioners, as provided under Section 5 of the Rule.Nothing in Rule 67

within sixty (60) days from the date of filing of the expropriation case. When the decision of

or Republic Act No. 8974 requires that the RTC consult with the parties in the expropriation

the court becomes final and executory, the implementing agency shall pay the owner the

case on who should be appointed as commissioners. Neither does the Court feel that such a

difference between the amount already paid and the just compensation as determined by the

requirement should be imposed in this case. We did rule in Municipality of Talisay v.

court. We hold that this provision should apply in this case. The sixty (60)-day period

Ramirez that there is nothing to prevent [the trial court] from seeking the recommendations of

prescribed in Republic Act No. 8974 gives teeth to the laws avowed policy to ensure that

the parties on [the] matter [of appointment of commissioners], the better to ensure their fair

owners of real property acquired for national government infrastructure projects are promptly

representation. At the same time, such solicitation of recommendations is not obligatory on

paid just compensation. In this case, there already has been irreversible delay in the prompt

the part of the court, hence we cannot impute error on the part of the RTC in its exercise of

payment of PIATCO of just compensation, and it is no longer possible for the RTC to

solitary discretion in the appointment of the commissioners. What Rule 67 does allow though

determine the just compensation due PIATCO within sixty (60) days from the filing of the

is for the parties to protest the appointment of any of these commissioners, as provided under

complaint last 21 December 2004, as contemplated by the law. Still, it is feasible to effectuate

Section 5 of the Rule. These objections though must be made filed within ten (10) days from

the spirit of the law by requiring the trial court to make such determination within sixty (60)

service of the order of appointment of the commissioners. In this case, the proper recourse of

days from finality of this decision, in accordance with the guidelines laid down in Rep. Act

the Government to challenge the choice of the commissioners is to file an objection with the

No. 8974 and its Implementing Rules.

trial court, conformably with Section 5, Rule 67, and not as it has done, assail the same

Same; Same; Commissioners; The appointment of commissioners under Rule 67 may be

through a special civil action for certiorari. Considering that the expropriation proceedings in

resorted to, even in expropriation proceedings under Republic Act No. 8974, since the

this case were effectively halted seven (7) days after the Order appointing the commissioners,

application of the provisions of Rule 67 in that regard do not conflict with the statute, but the

it is permissible to allow the parties to file their objections with the RTC within five (5) days

standards to be observed for the determination of just compensation are provided not in Rule

from finality of this decision.

67 but in the statute.It must be noted that Republic Act No. 8974 is silent on the

Courts; Judges; Disqualification and Inhibition of Judges; The disqualification of a

appointment of commissioners tasked with the ascertainment of just compensation. This

judge is a deprivation of his/her judicial power and should not be allowed on the basis of mere

protocol though is sanctioned under Rule 67. We rule that the appointment of commissioners

speculations and surmisesto be disqualifying, the bias and prejudice must be shown to have

under Rule 67 may be resorted to, even in expropriation proceedings under Republic Act No.

stemmed from an extrajudicial source and result in an opinion on the merits on some basis

8974, since the application of the provisions of Rule 67 in that regard do not conflict with the

other than what the judge learned from his participation in the case.The disqualification of

statute. As earlier stated, Section 14 of the Implementing Rules does allow such other

a judge is a deprivation of his/her judicial power and should not be allowed on the basis of

incidents affecting the complaint to be resolved under the provisions on expropriation of Rule

mere speculations and surmises. It certainly cannot be predicated on the adverse nature of the

judges rulings towards the movant for inhibition, especially if these rulings are in accord with

error or mistake in judgment, and that to adhere to its decision will cause injustice to a party

law. Neither could inhibition be justified merely on the erroneous nature of the rulings of the

litigant. Certainly, the 4 January 2005Order was designed to make the RTCs previous order

judge. We emphasized in Webb v. People: To prove bias and prejudice on the part of

conformable to law and justice, particularly to apply the correct law of the case. Of course, as

respondent judge, petitioners harp on the alleged adverse and erroneous rulings of

earlier established, this effort proved incomplete, as the 4 January 2005 Order did not

respondent judge on their various motions. By themselves, however, they do not

correctly apply Republic Act No. 8974 in several respects. Still, at least, the 4 January

sufficiently prove bias and prejudice to disqualify respondent judge. To be disqualifying,

2005 Order correctly reformed the most basic premise of the case that Republic Act No. 8974

the bias and prejudice must be shown to have stemmed from an extrajudicial source and

governs the expropriation proceedings.

result in an opinion on the merits on some basis other than what the judge learned from

Same; Same; Same; Every losing litigant in any case can resort to claiming that the

his participation in the case. Opinions formed in the course of judicial proceedings, although

judge was biased, and he/she will gain a sympathetic ear from friends, family, and people who

erroneous, as long as they are based on the evidence presented and conduct observed by the

do not understand the judicial process but the test in believing such a proposition should not

judge, do not prove personal bias or prejudice on the part of the judge. As a general rule,

be the vehemence of the litigants claim of bias, but the Courts judicious estimation, as

repeated rulings against a litigant, no matter how erroneous and vigorously and

people who know better than to believe any old cry of wolf!, whether such bias has been

consistently expressed, are not a basis for disqualification of a judge on grounds of bias

irrefutably exhibited.The Court should necessarily guard against adopting a standard that a

and prejudice. Extrinsic evidence is required to establish bias, bad faith, malice or

judge should be inhibited from hearing the case if one litigant loses trust in the judge. Such

corrupt purpose, in addition to the palpable error which may be inferred from the

loss of trust on the part of the Government may be palpable, yet inhibition cannot be grounded

decision or order itself. Although the decision may seem so erroneous as to raise doubts

merely on the feelings of the party-litigants. Indeed, every losing litigant in any case can resort

concerning a judges integrity, absent extrinsic evidence, the decision itself would be

to claiming that the judge was biased, and he/she will gain a sympathetic ear from friends,

insufficient to establish a case against the judge. The only exception to the rule is when

family, and people who do not understand the judicial process. The test in believing such a

the error is so gross and patent as to produce an ineluctable inference of bad faith or

proposition should not be the vehemence of the litigants claim of bias, but the Courts

malice.

judicious estimation, as people who know better than to believe any old cry of wolf!,

Same; Same; Same; The motu proprio amendment by a court of an erroneous order

whether such bias has been irrefutably exhibited. The Court acknowledges that it had been

previously issued may be sanctioned depending on the circumstances, in line with the long-

previously held that at the very first sign of lack of faith and trust in his actions, whether

recognized principle that every court has inherent power to do all things reasonably necessary

well-grounded or not, the judge has no other alternative but to inhibit himself from the case.

for the administration of justice within the scope of its jurisdiction, an inherent power that

But this doctrine is qualified by the entrenched rule that a judge may not be legally prohibited

includes the right of the court to reverse itself especially when in its honest opinion it has

from sitting in a litigation, but when circumstances appear that will induce doubt to his honest

committed an error or mistake in judgment, and that to adhere to its decision will cause

actuations and probity in favor of either party, or incite such state of mind, he should conduct

injustice to a party litigant.Neither are we convinced that the motu proprio issuance of the 4

a careful selfexamination. He should exercise his discretion in a way that the peoples faith in

January 2005 Order, without the benefit of notice or hearing, sufficiently evinces bias on the

the Courts of Justice is not impaired. And a selfassessment by the judge that he/she is not

part of Hon. Gingoyon. Themotu proprio amendment by a court of an erroneous order

impaired to hear the case will be respected by the Court absent any evidence to the contrary.

previously issued may be sanctioned depending on the circumstances, in line with the longrecognized principle that every court has inherent power to do all things reasonably necessary

CARPIO, J., Separate Opinion:

for the administration of justice within the scope of its jurisdiction. Section 5(g), Rule 135 of
the Rules of Court further recognizes the inherent power of courts to amend and control its

Separation of Powers; Courts; Procedural Rules; Congress has no power to amend or

process and orders so as to make them conformable to law and justice, a power which Hon.

repeal rules of procedure.Congress has no power to amend or repeal rules of procedure

Gingoyon noted in his 10 January 2005 Omnibus Order. This inherent power includes the
right of the court to reverse itself, especially when in its honest opinion it has committed an

adopted by the Supreme Court. However, Congress can enact laws on substantive matters
which are the subject of court procedures. Thus, Congress can prescribe the initial or

minimum amount for just compensation in expropriation cases, and require immediate

Same; Same; It is of judicial notice that despite Agan,the subject case has reached the

payment of such initial or minimum amount as condition for the immediate takeover of the

international arbitral tribunals where the government and the private respondent have filed

property by the government. The rules of procedure, like Rule 67 of the Rules of Court, must

charges and counterchargesthere is evident need to avoid the issues pestering the parties

adjust automatically to such new laws on substantive matters. Section 4 of Republic Act No.

from further multiplying and for new proceedings to be started in other courts, lest public

8974, mandating immediate payment to the property owner of the foil zonal or proffered value

interest suffer further irretrievable prejudice.On December 12, 2005, the Solicitor General

prior to takeover by the government, is a substantive requirement in expropriation cases. Thus,

filed a Supplemental Manifestation and Motion. The Solicitor General informed the Court

Section 4 must apply to all expropriation cases under RA No. 8974 involving the acquisition

about an Order dated December 2, 2005 of the High Court of Justice, Queens Bench Division,

of real property, like the NAIA Terminal III, for national government projects.

London * * * To be sure, the said Order is not yet final. Be that as it may, the Court cannot
turn a blind eye to this new wrinkle of the case at bar. It is of judicial notice that despite Agan,

PUNO, J., Separate Opinion:

Eminent Domain; Courts; Judgments; With due respect, the majoritys effort to
reconcile Agan v. PIATCO and the inherent power of the State to expropriate private property
is strained and unnecessary for there is nothing in Agan where it can be deduced that the
right of the State to expropriate the subject property has been impaired or diminished.The
majority opinion took excruciating pains to reconcile our Decision in Agan and the inherent

the subject case has reached the international arbitral tribunals where the government and the
private respondent have filed charges and countercharges. There is evident need to avoid the
issues pestering the parties from further multiplying and for new proceedings to be started in
other courts, lest public interest suffer further irretrievable prejudice. Towards this end, it is
respectfully submitted that the Court should exercise its power to compel the parties to
interplead pursuant to Rule 62 and invoke the need for orderly administration of justice. The
parties may be given reasonable time to amend their pleadings in the trial court.

right of the State to expropriate private property. With due respect, the effort is strained and
unnecessary for there is nothing in Agan where it can be deduced that the right of the State to

CORONA, J., Dissenting Opinion:

expropriate the subject property has been impaired or diminished. InAgan, we simply held: x
x x This Court, however, is not unmindful of the reality that the structures comprising the

Eminent Domain; Separation of Powers; The Court erroneously allowed for the

NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in their

expropriation of Ninoy Aquino International Airport Passenger Terminal III (NAIA IPT 3)

construction. For the government to take over the said facility, it has to compensate respondent

through a procedure set forth in an unconstitutional law.The majority ruled that RA 8974

PIATCO as builder of the said structures. The compensation must be just and in accordance

should apply. It ordered the national government and its co-petitioners to immediately pay the

with law and equity for the government cannot unjustly enrich itself at the expense of

just compensation for NAIA IPT3 before taking over the facility. In so doing, the majority

PIATCO and its investors.

may have unwittingly further delayed, if not virtually foreclosed, the expropriation of NAIA

Same; Same; Separation of Powers; Procedural Rules;Following Article VIII, section

IPT3. I submit it erroneously allowed the procedure set forth in an unconstitutional law. The

5(5) of the 1987 Constitution and the Echegaray v. Secretary of Justice, 301 SCRA 96 (1999),

majority allowed Congress to encroach upon the rule-making power which the Constitution

Rule 67 cannot be repealed or amended by Congress.Rule 67 is the rule this Court

has reserved exclusively to this Court. And it may have created another white elephant as a

promulgated to govern the proceedings in expropriation cases filed in court. It has been the

result.

undeviating rule for quite a length of time. Following Article VIII, section 5(5) of the 1987

Same; The majority opinion effectively disregarded necessity for the expropriation of

Constitution and theEchegaray jurisprudence, Rule 67 cannot be repealed or amended by

Ninoy Aquino International Airport Passenger Terminal III (NAIA IPT 3).There is no

Congress. This prohibition against non-repeal or non-amendment refers to any part of Rule 67

denying that a project like NAIA IPT3 is long overdue, such that the prestige of the entire

for Rule 67 is pure procedural law. Consequently, the Court should not chop Rule 67 into

country before the international community is at stake. Politics and narrow vested interests

pieces and hold that some can be changed by Congress but others can be changed. The stance

have a peculiar way of extirpating the most salutary and beneficial ventures in this country.

will dilute the rule making power of this Court which can not be allowed for it will weaken its

The undertaking appears headed for the same fate unless this Court intervenes and exercises

institutional independence.

its judicial discretion to settle the destructive impasse. Shall this Court watch in silence while

the parties claw at each other before international arbitration bodies? The majority opinion

way to compensate PIATCO in accordance with our 2004 resolution. The application of Rule

effectively disregarded this necessity.

67 in the expropriation proceedings of NAIA IPT3 is in consonance with Agan. The

Same; Judgments; Law of the Case; The majority opinion ruled that RA 8974 applies in

determination and payment of just compensation pursuant to Rule 67 are in accordance with

this case. It premised its conclusion on the argument that the application of Rule 67 will

law. Under Rule 67, PIATCO will be given FULL JUST COMPENSATION by the

violate this Courts 2004 resolution in Agan, the alleged governing law of the case; It is

government for the taking of NAIA IPT3. That is mandatory. The Constitution itself ordains

incorrect to say that Agan constitutes the law of the casethe law of the case finds application

it.Under Rule 67, there is no way the government can unjustly enrich itself at the expense of

only in the same case between the parties but this case (which refers to the expropriation of

PIATCO. Section 9 of Rule 67 ensures this by requiring the payment of interest from the time

NAIA IPT3) is irrefutably not the same as Agan (which was about the validity of the so-called

government takes possession of the property.

PIATCO contracts).The ruling is basically flawed as it is grounded on a wrong premise.

Same; Same; Same; If the majority opinion were to pursue its argument to its logical

It is incorrect to say that Agan constitutes the law of the case. The law of the case doctrine is

conclusion, no takeover can be had without payment of the just compensation itself not merely

defined as a term applied to an established rule that, when an appellate court passes on a

of a value corresponding to what it vaguely referred to as some degree of payment

question and remands the case to the lower court for further proceedings, the question there

payment of the proffered value is not enough since the proffered value is definitely not

settled becomes the law of the case on subsequent appeal. Unlike the doctrine of stare decisis,

equivalent to just compensation.I dare say the majority opinion actually got caught up in a

the doctrine of the law of the case operates only in the particular case. The law of the case

self-contradiction. At first, it claimed that the 2004 resolution in Agan laid down the following

finds application only in the same case between the parties. This case (which refers to the

directives: (1) PIATCO must receive payment of just compensation determined in accordance

expropriation of NAIA IPT3) is irrefutably not the same as Agan (which was about the

with law and equity, and (2) the government is barred from taking over NAIA IPT3 until such

validity of the so-called PIATCO contracts). Hence, the pronouncements in Agan cannot

just compensation is paid. It continued to argue that the 2004 resolution requires the payment

constitute the law of the case here.

of just compensation before the takeover of NAIA IPT3 facilities. Subsequently, however, it

Same; Same; Just Compensation; There is something seriously wrong with the

backtracked and stated that the 2004 resolution does not particularize the extent such

argument that R.A. 8974 is the only legal and equitable way to compensate PIATCO in

payment must be effected before the takeover, but it actually requires at least some degree of

accordance with our 2004 resolutionthe application of Rule 67 in the expropriation

payment to the private owner before a writ of possession may issue. However, neither the

proceedings of NAIA IPT3 is in consonance with Agan.The majority opinion claims that

proffered value nor the zonal valuation under RA 8974 is equivalent to just compensation. If

the staging of expropriation proceedings in this case with the exclusive use of Rule 67 would

the majority opinion were to pursue its argument to its logical conclusion, no takeover can be

allow for the government to take over the NAIA 3 facilities in a fashion that directly rebukes

had without payment of the just compensation itself, not merely of a value corresponding to

our 2004 resolution in Agan (which) mandated that there must be first payment of just

what it vaguely referred to as some degree of payment.

compensation before the Government could take over the NAIA IPT3 facilities. This is very

Same; Same; Same; Obiter Dictum; Words and Phrases;The footnote in City of Iloilo v.

misleading. The full text of the relevant statement of the Court in its 2004 resolution

Legaspi, 444 SCRA 269 (2004)on the alleged repeal by RA No. 8974was not in any way

in Agan is as follows: This Court, however, is not unmindful of the reality that the structures

necessary to resolve any of the issues in that case, thus merely part of an obiter dictum.

comprising the NAIA [IPT3] facility are almost complete and that funds have been spent by

Respondent judges theory about Rule 67s supposed repeal by RA 8974 was totally devoid of

PIATCO in their construction.For the government to take over the facility, it has to

factual and legal basis. RA 8974 did notrepeal Rule 67 at all. The Constitution will not allow

compensate respondent PIATCO as builder of the said structures. The compensation must be

it. In fact, neither its repealing clause nor any of its provisions even mentioned or referred to

just and in accordance with law and equity for the government can not unjustly enrich itself at

the Rules of Court, whether on expropriation or anything else. But even assuming (but not

the expense of PIATCO and its investors. (emphasis supplied) Clearly, the resolution only

conceding) that respondent judges theory had been based on an implied repeal, still there

requires that PIATCO be given just compensation as a condition for any government take-over

would have been no legal justification for it. The footnote in City of Iloilo was not in any way

of NAIA IPT3. The just compensation should be in accordance with law and equity. There is

necessary to resolve any of the issues in that case. Respondent judge should be reminded of

something seriously wrong with the argument that RA 8974 is the only legal and equitable

our pronouncement in City of Manila v. Entote that a remark made or opinion expressed by a

judge in a decision upon a cause, incidentally or collaterally, and not directly upon the

is a matter of procedure, not of substantive law. If a rule or statute creates a right or takes

question before the court, or upon a point not necessarily involved in the determination of the

away a vested right, it is substantive. If it operates as a means of implementing an existing

cause, is obiter dictumlacking the force of an adjudication. An obiter dictum is an opinion

right, then it is procedural. The provisions of Rule 67 neither vest a new power on the State

entirely unnecessary for the decision of the case and is not binding as precedent. Not only was

nor create a new right in favor of the property owner. Rule 67 merely provides the procedure

there no pronouncement from us in City of Iloilo about Rule 67s repeal by RA 8974, we in

for the States exercise of eminent domain and, at the same time, ensures the enforcement of

fact applied Rule 67 in that case. The Court invoked Section 1 of Rule 67 in resolving the

the right of the private owner to receive just compensation for the taking of his property. It is

issue of the sufficiency in form and substance of the amended complaint for expropriation and

purely a matter of procedure. It is therefore exclusively the domain of this Court. The

Section 2 of the same Rule in holding that the City of Iloilo was not in estoppel since it simply

Constitution prohibits Congress from transgressing this sphere. Congress cannot legislate the

followed the procedure that a prior hearing was not required before a writ of possession could

manner of payment of just compensation. Neither can Congress impose a condition on the

be issued. Indeed, the Court could not even have applied RA 8974 in City of Iloilo because it

issuance of a writ of possession. Yet that is what RA 8974 precisely does.

did not involve a project of the national government but that of a local government unit, thus
requiring the application of RA 7160 (the Local Government Code).

Same; Same; Same; I am disheartened that the majority opinion is in effect sanctioning
the arrogation of judicial power by Congress.The records of the 11th Congress which

Same; Just Compensation; Separation of Powers; The legislature now has no power to

enacted RA 8974 reveal that Congress intended to revise and amend Rule 67. The Senate

annul modify or augment the Rules of Court.Any talk of repeal (whether express or implied)

deliberations quoted at the beginning of this dissenting opinion show this legislative intent. I

by legislative enactment of the rules of procedure duly promulgated by this Court goes against

am therefore disheartened that the majority opinion is in effect sanctioning the arrogation of

the Constitution itself. The power to promulgate rules of pleading, practice and procedure was

judicial power by Congress. In denying the petition, the majority effectively sustained

granted by the Constitution to this Court to enhance its independence. It is no longer shared by

respondent judges repeal theory. Thus, they allowed Congress to infringe on the Courts rule-

this Court with Congress. The legislature now has no power to annul, modify or augment the

making power, a power vested by the Constitution exclusively on this Court.

Rules of Court. We expressly declared in Echegaray v. Secretary of Justice that the 1987

Same; Same; National Infrastructure Projects; Obviously, the NAIA IPT3 is not a right

Constitution took away the power of Congress to repeal, alter or supplement rules

of way, site or location for any national government infrastructure project but the

concerning pleading, practice and procedure.

infrastructure itself albeit still under construction; R.A. 8974 does not apply to the

Same; Same; Same; Procedural and Substantive Law;Words and Phrases; There is no

expropriation of NAIA IPT3, and there being no special law on the matter, Rule 67 of the

question that the appropriate standard of just compensation is a substantive matter, not

Rules of Court governs the procedure for its expropriation.Here, the expropriation of NAIA

procedural but the manner of determining just compensation (including how it shall be paid

IPT3 falls under the second category since petitioners seek to take private property for a

and under what conditions a writ of possession may be issued) is a matter of procedure, not of

purpose other than for a right-of-way, site or location for a national government project.

substantive law; If a rule or statute creates a right or takes away a vested right, it is

Unfortunately, the majority sided with respondent judge and completely disregarded the fact

substantive, but if it operates as a means of implementing an existing right, then it is

that NAIA IPT3 was the national government infrastructure project itself and ruled instead

procedural.A perusal of the so-called Guidelines for Expropriation Proceedings provided

that it was the right-of-way, site or location of a national government project. That was wrong

for under Section 4 of RA 8974 shows that the guidelines radically alter the rules for

and the reasoning was even more difficult to understand. True, under Section 2(d) of the IRR

expropriation under Rule 67. The majority even declared that RA 8974 represents

of RA 8974 defining national government projects, an airport (which NAIA IPT3 essentially

a significant changefrom previous expropriation laws such as Rule 67. . . . The majority

is) is specifically listed among the national government projects for which expropriation

however failed to realize that such change brought about by a legislative enactment subverts

proceedings may be initiated under the law. However, the law and its IRR also provide that the

the fundamental law and defeats the constitutional intent to strengthen the independence of

expropriation should be for the purpose of providing for a right of way, site or location for the

this Court. There is no question that the appropriate standard of just compensation is a

intended national government project. A national government project is separate and distinct

substantive matter, not procedural. However, the manner of determining just compensation

from the purpose of expropriation. Otherwise, there would have been no need to define them

(including how it shall be paid and under what conditions a writ of possession may be issued)

separately. Thus, respondent judge erred when he equated one with the other and obliterated

the clear distinction made by the law. Moreover, under Section 2(e) of the IRR, the specific

not only of the provisional deposit (as computed under Rule 67) but also of the entire bank

objects or purposes of expropriation were lumped as ROW which is defined as the right-of-

balance of petitioner MIAA. He exercised discretion in a matter where no discretion was

way, site or location, with defined physical boundaries, used for a national government

allowed. Respondent judge thus disregarded established rules by unilaterally increasing the

project. Obviously, the NAIA IPT3 is not a right of way, site or location for any national

amount of the provisional deposit required for the issuance of the writ of possession. This

government infrastructure project but the infrastructure itself albeit still under construction.

Court has had occasions in the past where we denounced the acts of trial courts in unilaterally

The construction (and now the completion) of NAIA IPT3 never required the acquisition of

increasing such provisional deposits. After issuing the writ of possession, the provisional

private property for a right of way, site or location since the terminal, including all its access

deposit is fixed and the court can no longer change it.

roads, stands completely on government land. Conformably, RA 8974 does not apply to the

Same; Same; Words and Phrases; Proffered Value, Explained; The majority opinion

expropriation of NAIA IPT3. And there being no special law on the matter, Rule 67 of the

unduly enlarged the concept of proffered value when it extended the same to improvements or

Rules of Court governs the procedure for its expropriation.

structures.Even the reference to the proffered value by the majority opinion is inappropriate.

Same; Same; Grave Abuse of Discretion; Respondent judges orders which were issued

The law is clear that such proffered value applies only [i]n case the completion of a national

with grave abuse of discretion.I refuse to join the majority who turned a blind eye on

government project is of utmost urgency and importance, and there is no existing valuation of

respondent judges orders which were issued with grave abuse of discretion. Respondent judge

the area concerned. The majority opinion recognizes the correctness of the position of the

should not have issued his disputed orders without any motion by PIATCO. There were very

Solicitor General that zonal valuations are only for parcels of land and, hence, there can be no

compelling reasons why. Considering that respondent judge knew or should have known how

zonal valuation for improvements or structures such as an airport terminal like NAIA IPT3.

extremely controversial NAIA IPT3 had become, he should have granted the parties

Since it is impossible for improvements or structures to have an existing valuation, then there

unimpeded opportunity to confront each other on the propriety of releasing such a huge

can be no proffered value for NAIA IPT3 to speak of. The fact that the proffered value does

amount to the owner of the property under expropriation. There were in fact still so many

not apply to improvements is buttressed by the provisions of RA 8974. The law provides that

pending contentious issues on which the parties had taken radically opposite positions, such as

in the determination of the proffered value, the standards prescribed in Section 5 of RA 8974

whether it was respondent PIATCO alone that was entitled to payment or whether there were

shall be taken into consideration. Section 5 expressly refers to Standards for the Assessment

other parties like Takenaka Corporation (to be discussed later in this decision) that had valid

of the Value of the Land Subject of Expropriation Proceedings or Negotiated Sale. On the

claims thereon and, if so, how much each was entitled to. Furthermore, inasmuch as

other hand, the valuation of improvements and/or structures is separately governed by Section

petitioners had been vigorously complaining that they were never really able to inspect and

7 of the law. To reiterate, the determination of the proffered value categorically refers to

evaluate the structural integrity and real worth of NAIA IPT3, respondent judge should have at

Section 5 on the valuation of the land, not to valuation of improvements or structures under

least tried to determine the reasonableness of petitioners provisional deposit and therefore, he

Section 7. Thus, the majority opinion unduly enlarged the concept of proffered value when it

ought not to have been in such a hurry to order the release of petitioners funds to PIATCO

extended the same to improvements or structures.

which was not even asking for it. In other words, all the foregoing warning signs considered,
he should have been more circumspect, deliberate and careful in handling the case.

Same; Same; Same; Taking, Construed; Full payment of just compensation, though a
condition precedent for the transfer of title or ownership, is not a condition precedent for the

Same; Same; Same; Respondent judge committed grave abuse of discretion when he

taking of the property.Title remains with the owner until just compensation is fully paid.

ordered the release not only of the provisional deposit (as computed under Rule 67) but also

This is only proper to protect the rights of the property owner. But that is not the point here.

of the entire bank balance of petitioner MIAAhe exercised discretion in a matter where no

The issue is whether or not the expropriating authority has the right to enter and use the

discretion was allowed.Section 2 of Rule 67 categorically prescribes the amount to be

property even prior to full payment. In other words, can the property be taken and used even

deposited with the authorized government depositary as the pre-condition for the issuance of a

before full payment of just compensation? Yes. Full payment of just compensation, though a

writ of possession. This is the assessed value of the property for purposes of taxation. The

condition precedent for the transfer of title or ownership, is not a condition precedent for

figure is exact and permits the court no discretion in determining what the provisional value

the taking of the property. As discussed earlier, an important element of taking is that the

should be. Respondent judge committed grave abuse of discretion when he ordered the release

owners right to possess and exploit the land (in other words, his beneficial ownership of it) is

include as defendants Takenaka Corporation and all other parties who occupy, own or claim to

transferred to and thenceforth exercised by the expropriator.

own any part of or interest in NAIA IPT3.

Courts; Judges; Inhibition and Disqualification of Judges; Where a case has generated

Same; Same; Police Power; The government could have pursued the options available

a strained personal relationship, animosity and hostility between the party or his counsel and

to it under the 2004 resolution in Agan, which included the filing in this Court of a motion for

the judge that the former has lost confidence in the judges impartiality or the latter is unable

the determination of just compensation, as well as the take over of NAIA IPT3 in the exercise

to display the cold neutrality of an impartial judge, it is a violation of due process for the

of its police power.The government got entangled in the present legal controversy as a result

judge not to recuse himself from hearing the case.A judge, like Caesars wife, must be

of its decision to resort to expropriation proceedings for the take-over of NAIA IPT3. It could

above suspicion. He must hold himself above reproach and suspicion. At the very first sign of

have avoided this imbroglio had it pursued the options available to it under the 2004 resolution

lack of faith and trust in his actions, whether well-grounded or not, the judge has no other

in Agan. Among these options was the filing in this Court of a motion for the determination of

alternative but to inhibit himself from the case. That way, he avoids being misunderstood. His

just compensation. Immediately after the 2004 resolution was promulgated, the right, purpose

reputation for probity and objectivity is maintained. Even more important, the ideal of an

and propriety of expropriation could not have been seriously contested. The sole issue that

impartial administration of justice is preserved. Justice must not merely be done but must also

remained was the amount of just compensation to be paid. Thus, a motion could have easily

be seen and perceived to be done. Besides, where a case has generated a strained personal

been filed to determine the just compensation for the facility. The Court could have then

relationship, animosity and hostility between the party or his counsel and the judge that the

appointed a panel of commissioners in accordance with Section 5 of Rule 67 and the problem

former has lost confidence in the judges impartiality or the latter is unable to display the cold

could have been completely resolved. Another option the government could have taken at that

neutrality of an impartial judge, it is a violation of due process for the judge not to recuse

time was to take over NAIA IPT3 in the exercise of its police power. Thereafter, it could have

himself from hearing the case. Due process cannot be satisfied in the absence of that

bidded out the facilitys operations. PIATCO could have then been paid from the revenues

objectivity on the part of a judge sufficient to reassure litigants of his being fair and just.

from the winning bidder.

Eminent Domain; Just Compensation; Parties; The defendants in an expropriation case

Same; Same; It is disturbing that the majority opinion allows PIATCO to take hold of

are not limited to the owners of the property condemned. They include all other persons

the money without giving the government the opportunity to first inspect the facility

owning, occupying, or claiming to own the property; Petitioners should be ordered to amend

thoroughly to ascertain its structural integrity and to make a preliminary valuation.RA

their complaint for expropriation to include as defendants Takenaka Corporation and all

8974 provides that there should be immediate payment direct to the property owner prior to

other parties who occupy, own or claim to own any part of or interest in NAIA IPT3.Just

the take over of the property. Pursuant thereto, the majority opinion ordered the payment of

compensation is not due to the owner alone: The defendants in an expropriation case are not

the proffered value to PIATCO as a condition for the implementation of the writ of possession

limited to the owners of the property condemned. They include all other persons owning,

earlier issued by respondent judge. On the other hand, Rule 67 requires only the making of a

occupying, or claiming to own the property. When [property] is taken by eminent domain, the

down payment in the form of a provisional deposit. It cannot be withdrawn without further

owner . . . is not necessarily the only person who is entitled to compensation. In American

orders from the court, i.e., until just compensation is finally determined. It is disturbing that

jurisdiction, the term owner when employed in statutes relating to eminent domain to

the majority opinion allows PIATCO to take hold of the money without giving the government

designate the persons who are to be made parties to the proceeding, refer, as is the rule in

the opportunity to first inspect the facility thoroughly to ascertain its structural integrity and to

respect of those entitled to compensation, to all those who have lawful interest in the property

make a preliminary valuation. With the money already in its possession, PIATCO may make

to be condemned, including a mortgagee, a lessee and a vendee in possession under an

use of the same in whatever way it may see fit. I dread to think what will happen if the

executory contract. Every person having an estate or interest at law or in equity in the land

government later on decides to back out after finding either irremediable structural defects or

taken is entitled to share in the award. If a person claiming an interest in the land is not made a

an excessively bloated valuation, such that it will cost more to put NAIA IPT3 in operational

party, he is given the right to intervene and lay claim to the compensation. In accordance with

readiness than to build (or develop) and operate another airport. What happens then? Will not

the foregoing rule, petitioners should be ordered to amend their complaint for expropriation to

the government be left holding an empty baglosing no less than US$ 53 million for an
inoperable facility?

Same; Same; Rather than striking the desired balance between legitimate State interests
and private rights, the majority opinion sacrifices public interest in favor of individual

same norm that pervades both the Courts 2004 Resolution in the first case and the latest
expropriation law.

benefit.While the procedure under RA 8974 is (as the majority opinion describes it)

The present controversy has its roots with the promulgation of the Courts decision

eminently more favorable to the property owner than Rule 67, it is clearly onerous to the

in Agan v. PIATCO,2 promulgated in 2003 (2003 Decision). This decision nullified the

government. In contrast, Rule 67 will be advantageous to the government without being

Concession Agreement for the Build-Operate-and-Transfer Arrangement of the Ninoy

cumbersome to the private owner. It provides a procedure that is sensitive to the governments

Aquino International Airport Passenger Terminal III entered into between the Philippine

financial condition and, at the same time, fair and just to the owner of the property. In ordering

Government (Government) and the Philippine International Air Terminals Co., Inc.

the application of RA 8974, the majority opinion favors the interests of PIATCO over that of

(PIATCO), as well as the amendments and supplements thereto. The agreement had

the government. Rather than striking the desired balance between legitimate State interests and

authorized PIATCO to build a new international airport terminal (NAIA 3), as well as a

private rights, it sacrifices public interest in favor of individual benefit. The majority opinion

franchise to operate and maintain the said terminal during the concession period of 25 years.

constantly and unabashedly proclaims the objectives of RA 8974to benefit the property

The contracts were nullified, among others, that Paircargo Consortium, predecessor of

owner and to expedite expropriation proceedings for national government projects. The

PIATCO, did not possess the requisite financial capacity when it was awarded the NAIA 3

majority opinion tilted the balance in favor of private interest to the prejudice of the common

contract and that the agreement was contrary to public policy.3

good. Moreover, besides being erroneous, resort to RA 8974 will be counter-productive and
self-defeating.

At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had already
been built by PIATCO and were nearing completion.4 However, the ponencia was silent as to
the legal status of the NAIA 3 facilities following the nullification of the contracts, as well as

PETITION for review on certiorari of a decision of the Regional Trial Court of Pasay City, Br.

whatever rights of PIATCO for reimbursement for its expenses in the construction of the

117.

facilities. Still, in his Separate Opinion, Justice Panganiban, joined by Justice Callejo, declared
as follows:

The facts are stated in the opinion of the Court.

The Solicitor General for the petitioners.
Joaquin V. Sayoc, Lee Benjamin Z. Lerma andBenjamin R. Carale for private
respondent PIATCO.
TINGA, J.:

Should government pay at all for reasonable expenses incurred in the construction of
the Terminal? Indeed it should, otherwise it will be unjustly enriching itself at the
expense of PIATCO and, in particular, its funders, contractors and investorsboth local
and foreign. After all, there is no question that the State needs and will make use of Terminal
III, it being part and parcel of the critical infrastructure and transportation-related programs of
government.5

The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived,

PIATCO and several respondents-intervenors filed their respective motions for the

designed and constructed to serve as the countrys show window to the world. Regrettably, it

reconsideration of the 2003 Decision. These motions were denied by the Court in

has spawned controversies. Regrettably too, despite the apparent completion of the terminal

its Resolution dated 21 January 2004 (2004 Resolution).6 However, the Court this time

complex way back it has not yet been operated. This has caused immeasurable economic

squarely addressed the issue of the rights of PIATCO to refund, compensation or

damage to the country, not to mention its deplorable discredit in the international community.

reimbursement for its expenses in the construction of the NAIA 3 facilities. The holding of the

In the first case that reached this Court, Agan v. PIATCO,1 the contracts which the

Court on this crucial point follows:

Government had with the contractor were voided for being contrary to law and public policy.

This Court, however, is not unmindful of the reality that the structures comprising the

The second case now before the Court involves the matter of just compensation due the

NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in

contractor for the terminal complex it built. We decide the case on the basis of fairness, the

their construction. For the government to take over the said facility, it has to compensate
respondent PIATCO as builder of the said structures. The compensation must be just

and in accordance with law and equity for the government can not unjustly enrich itself

Government Infrastructure Projects and For Other Purposes and its Implementing Rules and

at the expense of PIATCO and its investors.7

Regulations (Implementing Rules) had amended Rule 67 in many respects.

After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the

There are at least two crucial differences between the respective procedures under Rep.

possession of PIATCO, despite the avowed intent of the Government to put the airport

Act No. 8974 and Rule 67. Under the statute, the Government is required to make immediate

terminal into immediate operation. The Government and PIATCO conducted several rounds of

payment to the property owner upon the filing of the complaint to be entitled to a writ of

negotiation regarding the NAIA 3 facilities.8 It also appears that arbitral proceedings were

possession, whereas in Rule 67, the Government is required only to make an initial deposit

commenced before the International Chamber of Commerce International Court of Arbitration

with an authorized government depositary. Moreover, Rule 67 prescribes that the initial

and the International Centre for the Settlement of Investment Disputes, although the
Government has raised jurisdictional questions before those two bodies.

10

deposit be equivalent to the assessed value of the property for purposes of taxation, unlike
Rep. Act No. 8974 which provides, as the relevant standard for initial compensation, the

Then, on 21 December 2004, the Government 11 filed a Complaint for expropriation with

market value of the property as stated in the tax declaration or the current relevant zonal

the Pasay City Regional Trial Court (RTC), together with anApplication for Special

valuation of the Bureau of Internal Revenue (BIR), whichever is higher, and the value of the

Raffle seeking the immediate holding of a special raffle. The Government sought upon the

improvements and/or structures using the replacement cost method.

filing of the complaint the issuance of a writ of possession authorizing it to take immediate

Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the

possession and control over the NAIA 3 facilities. The Government also declared that it had

Implementing Rules, the RTC made key qualifications to its earlier issuances. First, it directed

deposited the amount of P3,002,125,000.00 12 (3 Billion)13 in Cash with the Land Bank of the

the Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to immediately release

Philippines, representing the NAIA 3 terminals assessed value for taxation purposes.

14

15

the amount of US$62,343,175.77 to PIATCO, an amount which the RTC characterized as that

The case was raffled to Branch 117 of the Pasay City RTC, presided by respondent

which the Government specifically made available for the purpose of this expropriation; and

judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint was

such amount to be deducted from the amount of just compensation due PIATCO as eventually

16

filed, the RTC issued an Order directing the issuance of a writ of possession to the

determined by the RTC. Second, the Government was directed to submit to the RTC a

Government, authorizing it to take or enter upon the possession of the NAIA 3 facilities.

Certificate of Availability of Funds signed by authorized officials to cover the payment of just

17

Citing the case of City of Manila v. Serrano, the RTC noted that it had the ministerial duty to

compensation. Third, the Government was directed to maintain, preserve and safeguard the

issue the writ of possession upon the filing of a complaint for expropriation sufficient in form

NAIA 3 facilities or perform such as acts or activities in preparation for their direct

and substance, and upon deposit made by the government of the amount equivalent to the

operation of the airport terminal, pending expropriation proceedings and full payment of just

assessed value of the property subject to expropriation. The RTC found these requisites

compensation. However, the Government was prohibited from performing acts of ownership

present, particularly noting that [t]he case record shows that [the Government has] deposited

like awarding concessions or leasing any part of [NAIA 3] to other parties.19

the assessed value of the [NAIA 3 facilities] in the Land Bank of the Philippines, an

The very next day after the issuance of the assailed 4 January 2005 Order, the

authorized depositary, as shown by the certification attached to their complaint. Also on the

Government filed anUrgent Motion for Reconsideration, which was set for hearing on 10

same day, the RTC issued a Writ of Possession. According to PIATCO, the Government was

January 2005. On 7 January 2005, the RTC issued another Order, the second now assailed

able to take possession over the NAIA 3 facilities immediately after the Writ of

before this Court, which appointed three (3) Commissioners to ascertain the amount of just

Possession was issued.18However, on 4 January 2005, the RTC issued anotherOrder designed

compensation for the NAIA 3 Complex. That same day, the Government filed a Motion for

to supplement its 21 December 2004Order and the Writ of Possession. In the 4 January

Inhibition of Hon. Gingoyon.

2005 Order, now assailed in the present petition, the RTC noted that its earlier issuance of its

The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10

writ of possession was pursuant to Section 2, Rule 67 of the 1997 Rules of Civil Procedure.

January 2005. On the same day, it denied these motions in an Omnibus Order dated 10

However, it was observed that Republic Act No. 8974 (Rep. Act No. 8974), otherwise known

January 2005. This is the third Order now assailed before this Court. Nonetheless, while

as An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National

the Omnibus Order affirmed the earlier dispositions in the 4 January 2005 Order, it excepted

from affirmance the superfluous part of theOrder prohibiting the plaintiffs from awarding

The 2004 Resolution Which Is Law of This Case Generally Permits Expropriation

concessions or leasing any part of [NAIA 3] to other parties. 20

The pronouncement in the 2004 Resolution is especially significant to this case in two aspects,

Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13

namely: (i) that PIATCO must receive payment of just compensation determined in

January 2005. The petition prayed for the nullification of the RTC orders dated 4 January

accordance with law and equity; and (ii) that the government is barred from taking over NAIA

2005, 7 January 2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon from

3 until such just compensation is paid. The parties cannot be allowed to evade the directives

taking further action on the expropriation case. A concurrent prayer for the issuance of a

laid down by this Court through any mode of judicial action, such as the complaint for

temporary restraining order and preliminary injunction was granted by this Court in

eminent domain.

aResolution dated 14 January 2005.

21

It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory

The Government, in imputing grave abuse of discretion to the acts of Hon. Gingoyon,

guidelines which the Government must observe before it could acquire the NAIA 3 facilities.
Thus, the actions of respondent judge under review, as well as the arguments of the parties

raises five general arguments, to wit:

must, to merit affirmation, pass the threshold test of whether such propositions are in accord
1. (i)that Rule 67, not Rep. Act No. 8974, governs the present expropriation
proceedings;

with the 2004 Resolution.

The Government does not contest the efficacy of this pronouncement in the

2. (ii)that Hon. Gingoyon erred when he ordered the immediate release of the amount

2004 Resolution,24 thus its application to the case at bar is not a matter of controversy. Of

of US$62.3 Million to PIATCO considering that the assessed value as alleged in

course, questions such as what is the standard of just compensation and which particular

the complaint was only P3 Billion;

laws and equitable principles are applicable, remain in dispute and shall be resolved forthwith.

3. (iii)that the RTC could not have prohibited the Government from enjoining the
performance of acts of ownership;

The Government has chosen to resort to expropriation, a remedy available under the law,
which has the added benefit of an integrated process for the determination of just

4. (iv)that the appointment of the three commissioners was erroneous; and

compensation and the payment thereof to PIATCO. We appreciate that the case at bar is a

5. (v)that Hon. Gingoyon should be compelled to inhibit himself from the

highly unusual case, whereby the Government seeks to expropriate a building complex

expropriation case.22

constructed on land which the State already owns.25There is an inherent illogic in the resort to
eminent domain on property already owned by the State. At first blush, since the State already

Before we delve into the merits of the issues raised by the Government, it is essential to

owns the property on which NAIA 3 stands, the proper remedy should be akin to an action for

consider the crucial holding of the Court in its 2004 Resolution in Agan, which we repeat

ejectment.

below:

However, the reason for the resort by the Government to expropriation proceedings is

This Court, however, is not unmindful of the reality that the structures comprising the NAIA

understandable in this case. The 2004 Resolution, in requiring the payment of just

IPT III facility are almost complete and that funds have been spent by PIATCO in their

compensation prior to the takeover by the Government of NAIA 3, effectively precluded it

construction. For the government to take over the said facility, it has to compensate

from acquiring possession or ownership of the NAIA 3 through the unilateral exercise of its

respondent PIATCO as builder of the said structures. The compensation must be just

rights as the owner of the ground on which the facilities stood. Thus, as things stood after the

and in accordance with law and equity for the government can not unjustly enrich itself

2004 Resolution, the right of the Government to take over the NAIA 3 terminal was

at the expense of PIATCO and its investors.

23

This pronouncement contains the fundamental premises which permeate this decision of the

preconditioned by lawful order on the payment of just compensation to PIATCO as builder of

the structures.

Court. Indeed, Agan, final and executory as it is, stands as governing law in this case, and any

The determination of just compensation could very well be agreed upon by the parties

disposition of the present petition must conform to the conditions laid down by the Court in its

without judicial intervention, and it appears that steps towards that direction had been engaged

2004 Resolution.

in. Still, ultimately, the Government resorted to its inherent power of eminent domain through

expropriation proceedings. Is eminent domain appropriate in the first place, with due regard

through an enabling ordinance. And then there is Rep. Act No. 8974, which covers

not only to the law on expropriation but also to the Courts 2004 Resolution in Agan?

expropriation proceedings intended for national government infrastructure projects.

The right of eminent domain extends to personal and real property, and the NAIA 3
26

Rep. Act No. 8974, which provides for a procedure eminently more favorable to the

structures, adhered as they are to the soil, are considered as real property. The public purpose

property owner than Rule 67, inescapably applies in instances when the national government

for the expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67

expropriates

(on Expropriation) recognizes the possibility that the property sought to be expropriated may

expropriation is engaged in by the national government for purposes other than national

be titled in the name of the Republic of the Philippines, although occupied by private

infrastructure projects, the assessed value standard and the deposit mode prescribed in Rule 67

individuals, and in such case an averment to that effect should be made in the complaint. The

continues to apply.

property for

national

government

infrastructure projects. 28 Thus,

if

instant expropriation complaint did aver that the NAIA 3 complex stands on a parcel of land

Under both Rule 67 and Rep. Act No. 8974, the Government commences expropriation

owned by the Bases Conversion Development Authority, another agency of [the Republic of

proceedings through the filing of a complaint. Unlike in the case of local governments which

the Philippines].27

necessitate an authorizing ordinance before expropriation may be accomplished, there is no

Admittedly, eminent domain is not the sole judicial recourse by which the Government

need under Rule 67 or Rep. Act No. 8974 for legislative authorization before the Government

may have acquired the NAIA 3 facilities while satisfying the requisites in the 2004 Resolution.

may proceed with a particular exercise of eminent domain. The most crucial difference

Eminent domain though may be the most effective, as well as the speediest means by which

between Rule 67 and Rep. Act No. 8974 concerns the particular essential step the Government

such goals may be accomplished. Not only does it enable immediate possession after

has to undertake to be entitled to a writ of possession.

satisfaction of the requisites under the law, it also has a built-in procedure through which just

The first paragraph of Section 2 of Rule 67 provides:

compensation may be ascertained. Thus, there should be no question as to the propriety of

SEC. 2. Entry of plaintiff upon depositing value with authorized government depository.

eminent domain proceedings in this case.

Upon the filing of the complaint or at any time thereafter and after due notice to the defendant,

Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to

the plaintiff shall have the right to take or enter upon the possession of the real property

apply or construe these rules in accordance with the Courts prescriptions in the 2004

involved if he deposits with the authorized government depositary an amount equivalent

Resolution to achieve the end effect that the Government may validly take over the NAIA 3

to the assessed value of the property for purposes of taxation to be held by such bank

facilities. Insofar as this case is concerned, the 2004 Resolution is effective not only as a legal

subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof

precedent, but as the source of rights and prescriptions that must be guaranteed, if not

the court authorizes the deposit of a certificate of deposit of a government bank of the

enforced, in the resolution of this petition. Otherwise, the integrity and efficacy of the rulings

Republic of the Philippines payable on demand to the authorized government

of this Court will be severely diminished.

depositary.

It is from these premises that we resolve the first question, whether Rule 67 of the Rules

In contrast, Section 4 of Rep. Act No. 8974 relevantly states:

of Court or Rep. Act No. 8974 governs the expropriation proceedings in this case.

SEC. 4. Guidelines for Expropriation Proceedings.Whenever it is necessary to acquire real

Application of Rule 67 Violates the 2004 Agan Resolution

property for the right-ofway, site or location for any national government infrastructure project

The Government insists that Rule 67 of the Rules of Court governs the expropriation

through expropriation, the appropriate proceedings before the proper court under the following

proceedings in this case to the exclusion of all other laws. On the other hand, PIATCO claims

guidelines:

that it is Rep. Act No. 8974 which does apply. Earlier, we had adverted to the basic

a) Upon the filing of the complaint, and after due notice to the defendant, the implementing

differences between the statute and the procedural rule. Further elaboration is in order.

agency shall immediately pay the owner of the property the amount equivalent to the sum of

Rule 67 outlines the procedure under which eminent domain may be exercised by the

(1) one hundred percent (100%) of the value of the property based on the current relevant

Government. Yet by no means does it serve at present as the solitary guideline through which

zonal valuation of the Bureau of Internal Revenue (BIR); and (2) the value of the

the State may expropriate private property. For example, Section 19 of the Local Government

improvements and/or structures as determined under Section 7 hereof;

Code governs as to the exercise by local government units of the power of eminent domain

...

c) In case the completion of a government infrastructure project is of utmost urgency and

importance, and there is no existing valuation of the area concerned, the implementing agency

to deposit the amount equivalent to the assessed value with an authorized government
depositary.

shall immediately pay the owner of the property itsproffered value taking into consideration

Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down in the
2004 Resolution that [f]or the government to take over the said facility, it has to compensate

the standards prescribed in Section 5 hereof.

Upon completion with the guidelines abovementioned, the court shall immediately issue

respondent PIATCO as builder of the said structures? Evidently not.

to the implementing agency an order to take possession of the property and start the
implementation of the project.

If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving a single
centavo as just compensation before the Government takes over the NAIA 3 facility by virtue

Before the court can issue a Writ of Possession, the implementing agency shall present to
the court a certificate of availability of funds from the proper official concerned.

of a writ of possession. Such an injunction squarely contradicts the letter and intent of the
2004 Resolution. Hence, the position of the Government sanctions its own disregard or

...

violation the prescription laid down by this Court that there must first be just compensation

As can be gleaned from the above-quoted texts, Rule 67 merely requires the Government to

paid to PIATCO before the Government may take over the NAIA 3 facilities.

deposit with an authorized government depositary the assessed value of the property for

Thus, at the very least, Rule 67 cannot apply in this case without violating the 2004

expropriation for it to be entitled to a writ of possession. On the other hand, Rep. Act No. 8974

Resolution. Even assuming that Rep. Act No. 8974 does not govern in this case, it does not

requires that the Government make a direct payment to the property owner before the writ

necessarily follow that Rule 67 should then apply. After all, adherence to the letter of Section

may issue. Moreover, such payment is based on the zonal valuation of the BIR in the case of

2, Rule 67 would in turn violate the Courts requirement in the 2004 Resolution that there

29

land, the value of the improvements or structures under the replacement cost method, or if no

must first be payment of just compensation to PIATCO before the Government may take over

such valuation is available and in cases of utmost urgency, the proffered value of the property

the property.

to be seized.

It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule

It is quite apparent why the Government would prefer to apply Rule 67 in lieu of Rep. Act

67 with the scheme of immediate payment in cases involving national government

No. 8974. Under Rule 67, it would not be obliged to immediately pay any amount to PIATCO

infrastructure projects. The following portion of the Senate deliberations, cited by PIATCO in

before it can obtain the writ of possession since all it need do is deposit the amount equivalent

its Memorandum, is worth quoting to cogitate on the purpose behind the plain meaning of the

to the assessed value with an authorized government depositary. Hence, it devotes

law:

considerable effort to point out that Rep. Act No. 8974 does not apply in this case,

THE CHAIRMAN (SEN. CAYETANO). x x xBecause the Senate believes that, you know,

notwithstanding the undeniable reality that NAIA 3 is a national government project. Yet,

we have to pay the landowners immediately not by treasury bills but by cash.

these efforts fail, especially considering the controlling effectof the 2004 Resolution

Since we are depriving them, you know, upon payment, no, of possession, we might

in Agan on the adjudication of this case.

It is the finding of this Court that the staging of expropriation proceedings in this case
with the exclusive use of Rule 67 would allow for the Government to take over the NAIA 3
facilities in a fashion that directly rebukes our 2004 Resolution inAgan. This Court cannot
sanction deviation from its own final and executory orders.
Section 2 of Rule 67 provides that the State shall have the right to take or enter upon the
possession of the real property involved if [the plaintiff] deposits with the authorized
government depositary an amount equivalent to the assessed value of the property for
purposes of taxation to be held by such bank subject to the orders of the court. 30 It is thus
apparent that under the provision, all the Government need do to obtain a writ of possession is

as well pay them as much, no, hindi lang 50 percent.

xxx
THE CHAIRMAN (REP. VERGARA). Accepted.
xxx
THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is really in favor of the
landowners, e.
THE CHAIRMAN (REP. VERGARA). Thats why we need to really secure the availability of
funds.
xxx
THE CHAIRMAN (SEN. CAYETANO). No, no. Its the same. It says here: iyong first
paragraph, diba? Iyong zonaltalagang magbabayad muna. In other words, you

know, there must be a payment kaagad. (TSN, Bicameral Conference on the

As acknowledged in the 2003 Decision, the development of NAIA 3 was made pursuant to a

Disagreeing Provisions of House Bill 1422 and Senate Bill 2117, August 29, 2000, pp.

build-operate-and-transfer

arrangement

pursuant

to

Republic

Act

No.

6957,

as

33

14-20)

amended, which pertains to infrastructure or development projects normally financed by the

public sector but which are now wholly or partly implemented by the private sector. 34 Under

xxx
THE CHAIRMAN (SEN. CAYETANO). Okay, okay, no. Unang-una, it is not deposit,

the build-operate-and-transfer scheme, it is the project proponent which undertakes the

construction, including the financing, of a given infrastructure facility.35 In Tatad v.

no. Its payment.

REP. BATERINA. Its payment, ho, payment.(Id., p. 63)31

Garcia,36 the Court acknowledged that the operator of the EDSA Light Rail Transit project

It likewise bears noting that the appropriate standard of just compensation is a substantive

under a BOT scheme was the owner of the facilities such as the rail tracks, rolling stocks like

matter. It is well within the province of the legislature to fix the standard, which it did through

the coaches, rail stations, terminals and the power plant.37

the enactment of Rep. Act No. 8974. Specifically, this prescribes the new standards in

There can be no doubt that PIATCO has ownership rights over the facilities which it had

determining the amount of just compensation in expropriation cases relating to national

financed and constructed. The 2004 Resolution squarely recognized that right when it

government infrastructure projects, as well as the manner of payment thereof. At the same

mandated the payment of just compensation to PIATCO prior to the takeover by the

time, Section 14 of the Implementing Rules recognizes the continued applicability of Rule 67

Government of NAIA 3. The fact that the Government resorted to eminent domain

on procedural aspects when it provides all matters regarding defenses and objections to the

proceedings in the first place is a concession on its part of PIATCOs ownership. Indeed, if no

complaint, issues on uncertain ownership and conflicting claims, effects of appeal on the

such right is recognized, then there should be no impediment for the Government to seize

rights of the parties, and such other incidents affecting the complaint shall be resolved under

control of NAIA 3 through ordinary ejectment proceedings.

the provisions on expropriation of Rule 67 of the Rules of Court.

32

Since the rights of PIATCO over the NAIA 3 facilities are established, the nature of these

Given that the 2004 Resolution militates against the continued use of the norm under

facilities should now be determined. Under Section 415(1) of the Civil Code, these facilities

Section 2, Rule 67, is it then possible to apply Rep. Act No. 8974? We find that it is, and

are ineluctably immovable or real property, as they constitute buildings, roads and

moreover, its application in this case complements rather than contravenes the prescriptions

constructions of all kinds adhered to the soil.38Certainly, the NAIA 3 facilities are of such

laid down in the 2004 Resolution.

nature that they cannot just be packed up and transported by PIATCO like a traveling circus

Rep. Act No. 8974 Fits to the Situation at Bar and Complements the 2004 Agan Resolution

caravan.

Rep. Act No. 8974 is entitled An Act To Facilitate The Acquisition Of Right-Of-Way, Site

Thus, the property subject of expropriation, the NAIA 3 facilities, are real property owned

Or Location For National Government Infrastructure Projects And For Other Purposes.

by PIATCO. This point is critical, considering the Governments insistence that the NAIA 3

Obviously, the law is intended to cover expropriation proceedings intended for national

facilities cannot be deemed as the right-of-way, site or location of a national

government infrastructure projects. Section 2 of Rep. Act No. 8974 explains what are

government infrastructure project, within the coverage of Rep. Act No. 8974.

considered as national government projects.

There is no doubt that the NAIA 3 is not, under any sensible contemplation, a right-of-

Sec. 2. National Government Projects.The term national government projects shall refer

way. Yet we cannot agree with the Governments insistence that neither could NAIA 3 be a

to all national government infrastructure, engineering works and service contracts, including

site or location. The petition quotes the definitions provided in Blacks Law Dictionary of

projects undertaken by government-owned and controlled corporations, all projects covered by

location as the specific place or position of a person or thing and site as pertaining to a

Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the Build-

place or location or a piece of property set aside for specific use. 39 Yet even Blacks Law

Operate-andTransfer Law, and other related and necessary activities, such as site acquisition,

Dictionary provides that [t]he term [site] does not of itself necessarily mean a place or tract of

supply and/or installation of equipment and materials, implementation, construction,

land fixed by definite boundaries.40 One would assume that the Government, to back up its

completion, operation, maintenance, improvement, repair and rehabilitation, regardless of the

contention, would be able to point to a clear-cut rule that a site or location exclusively

source of funding.

refers to soil, grass, pebbles and weeds. There is none.

Indeed, we cannot accept the Governments proposition that the only properties that may

Resolution does not particularize the extent such payment must be effected before the

be expropriated under Rep. Act No. 8974 are parcels of land. Rep. Act No. 8974 contemplates

takeover, but it unquestionably requires at least some degree of payment to the private

within its coverage such real property constituting land, buildings, roads and constructions of

property owner before a writ of possession may issue. The utilization of Rep. Act No. 8974

all kinds adhered to the soil. Section 1 of Rep. Act No. 8974, which sets the declaration of the

guarantees compliance with this bare minimum requirement, as it assures the private property

laws policy, refers to real property acquired for national government infrastructure projects

owner the payment of, at the very least, the proffered value of the property to be seized. Such

are promptly paid just compensation.41 Section 4 is quite explicit in stating that the scope of

payment of the proffered value to the owner, followed by the issuance of the writ of

the law relates to the acquisition of real property, which under civil law includes buildings,

possession in favor of the Government, is precisely the schematic under Rep. Act No. 8974,

roads and constructions adhered to the soil.

one which facially complies with the prescription laid down in the 2004 Resolution.

It is moreover apparent that the law and its implementing rules commonly provide for a

Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act No. 8974

rule for the valuation of improvements and/or structures thereupon separate from that of the

governs the instant expropriation proceedings.

land on which such are constructed. Section 2 of Rep. Act No. 8974 itself recognizes that the

The Proper Amount to be Paid under Rep. Act No. 8974

improvements or structures on the land may very well be the subject of expropriation

Then, there is the matter of the proper amount which should be paid to PIATCO by the

proceedings. Section 4(a), in relation to Section 7 of the law provides for the guidelines for the

Government before the writ of possession may issue, consonant to Rep. Act No. 8974.

valuation of the improvements or structures to be expropriated. Indeed, nothing in the law

At this juncture, we must address the observation made by the Office of the Solicitor

would prohibit the application of Section 7, which provides for the valuation method of the

General in behalf of the Government that there could be no BIR zonal valuations on the

improvements and or structures in the instances wherein it is necessary for the Government to

NAIA 3 facility, as provided in Rep. Act No. 8974, since zonal valuations are only for parcels

expropriate only the improvements or structures, as in this case.

of land, not for airport terminals. The Court agrees with this point, yet does not see it as an

The law classifies the NAIA 3 facilities as real properties just like the soil to which they

impediment for the application of Rep. Act No. 8974.

are adhered. Any subclassifications of real property and divergent treatment based thereupon

It must be clarified that PIATCO cannot be reimbursed or justly compensated for the

for purposes of expropriation must be based on substantial distinctions, otherwise the equal

value of the parcel of land on which NAIA 3 stands. PIATCO is not the owner of the land on

protection clause of the Constitution is violated. There may be perhaps a molecular distinction

which the NAIA 3 facility is constructed, and it should not be entitled to just compensation

between soil and the inorganic improvements adhered thereto, yet there are no purposive

that is inclusive of the value of the land itself. It would be highly disingenuous to compensate

distinctions that would justify a variant treatment for purposes of expropriation. Both the land

PIATCO for the value of land it does not own. Its entitlement to just compensation should be

itself and the improvements thereupon are susceptible to private ownership independent of

limited to the value of the improvements and/or structures themselves. Thus, the determination

each other, capable of pecuniary estimation, and if taken from the owner, considered as a

of just compensation cannot include the BIR zonal valuation under Section 4 of Rep. Act No.

deprivation of property. The owner of improvements seized through expropriation suffers the

8974.

same degree of loss as the owner of land seized through similar means. Equal protection

Under Rep. Act No. 8974, the Government is required to immediately pay the owner of the

demands that all persons or things similarly situated should be treated alike, both as to rights

property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of

conferred and responsibilities imposed. For purposes of expropriation, parcels of land are

the property based on the current relevant zonal valuation of the [BIR]; and (2) the value of

similarly situated as the buildings or improvements constructed thereon, and a disparate

the improvements and/or structures as determined under Section 7. As stated above, the BIR

treatment between those two classes of real property infringes the equal protection clause.

zonal valuation cannot apply in this case, thus the amount subject to immediate payment

Even as the provisions of Rep. Act No. 8974 call for that laws application in this case,

should be limited to the value of the improvements and/or structures as determined under

the threshold test must still be met whether its implementation would conform to the dictates

Section 7, with Section 7 referring to the implementing rules and regulations for the

of the Court in the 2004 Resolution. Unlike in the case of Rule 67, the application of Rep. Act

equitable valuation of the improvements and/or structures on the land. Under the present

No. 8974 will not contravene the 2004 Resolution, which requires the payment of just

implementing rules in place, the valuation of the improvements/structures are to be based

compensation before any takeover of the NAIA 3 facilities by the Government. The 2004

using the replacement cost method.42 However, the replacement cost is only one of the

determination of just compensation under Section 5 of Rep. Act No. 8974, as required for

factors to be considered in determining the just compensation.

judicial review of the proffered value.

In addition to Rep. Act No. 8974, the 2004Resolution in Agan also mandated that the

The Court notes that in the 10 January 2005Omnibus Order, the RTC noted that the

payment of just compensation should be in accordance with equity as well. Thus, in

concessions agreement entered into between the Government and PIATCO stated that the

ascertaining the ultimate amount of just compensation, the duty of the trial court is to ensure

actual cost of building NAIA 3 was not less than US$350 Million.47 The RTC then

that such amount conforms not only to the law, such as Rep. Act No. 8974, but to principles of

proceeded to observe that while Rep. Act No. 8974 required the immediate payment to

equity as well.

PIATCO the amount equivalent to 100% of the value of NAIA 3, the amount deposited by the

Admittedly, there is no way, at least for the present, to immediately ascertain the value of

Government constituted only 18% of this value. At this point, no binding import should be

the improvements and structures since such valuation is a matter for factual

given to this observation that the actual cost of building NAIA 3 was not less than US$350

determination.43 Yet Rep. Act No. 8974 permits an expedited means by which the Government

Million, as the final conclusions on the amount of just compensation can come only after due

can immediately take possession of the property without having to await precise determination

ascertainment in accordance with the standards set under Rep. Act No. 8974, not the

of the valuation. Section 4(c) of Rep. Act No. 8974 states that in case the completion of a

declarations of the parties. At the same time, the expressed linkage between the BIR zonal

government infrastructure project is of utmost urgency and importance, and there is no

valuation and the amount of just compensation in this case, is revelatory of erroneous thought

existing valuation of the area concerned, the implementing agency shall immediately pay the

on the part of the RTC.

owner of the property its proffered value, taking into consideration the standards prescribed in
44

We have already pointed out the irrelevance of the BIR zonal valuation as an appropriate

Section 5 [of the law]. The proffered value may strike as a highly subjective standard

basis for valuation in this case, PIATCO not being the owner of the land on which the NAIA 3

based solely on the intuition of the government, but Rep. Act No. 8974 does provide relevant

facilities stand. The subject order is flawed insofar as it fails to qualify that such standard is

standards by which proffered value should be based,45 as well as the certainty of judicial

inappropriate. It does appear that the amount of US$62.3 Million was based on the

determination of the propriety of the proffered value.

46

certification issued by the LBP-Baclaran that the Republic of the Philippines maintained a

In filing the complaint for expropriation, the Government alleged to have deposited the

total balance in that branch amounting to such amount. Yet the actual representation of the

amount of P3 Billion earmarked for expropriation, representing the assessed value of the

$62.3 Million is not clear. The Land Bank Certification expressing such amount does state that

property. The making of the deposit, including the determination of the amount of the deposit,

it was issued upon request of the Manila International Airport Authority purportedly as

was undertaken under the erroneous notion that Rule 67, and not Rep. Act No. 8974, is the

guaranty deposit for the expropriation complaint.48The Government claims in its

applicable law. Still, as regards the amount, the Court sees no impediment to recognize this

Memorandum that the entire amount was made available as a guaranty fund for the final and

sum of P3 Billion as the proffered value under Section 4(b) of Rep. Act No. 8974. After all, in

executory judgment of the trial court, and not merely for the issuance of the writ of

the initial determination of the proffered value, the Government is not strictly required to

possession.49 One could readily conclude that the entire amount of US$62.3 Million was

adhere to any predetermined standards, although its proffered value may later be subjected to

intended by the Government to answer for whatever guaranties may be required for the

judicial review using the standards enumerated under Section 5 of Rep. Act No. 8974.

purpose of the expropriation complaint.

How should we appreciate the questioned order of Hon. Gingoyon, which pegged the

Still, such intention the Government may have had as to the entire US$62.3 Million is

amount to be immediately paid to PIATCO at around $62.3 Million? The Order dated 4

only inferentially established. In ascertaining the proffered value adduced by the Government,

January 2005, which mandated such amount, proves problematic in that regard. While the

the amount of P3 Billion as the amount deposited characterized in the complaint as to be held

initial sum of P3 Billion may have been based on the assessed value, a standard which should

by [Land Bank] subject to the [RTCs] orders,50 should be deemed as controlling. There is no

not however apply in this case, the RTC cites without qualification Section 4(a) of Rep. Act

clear evidence that the Government intended to offer US$62.3 Million as the initial payment

No. 8974 as the basis for the amount of $62.3 Million, thus leaving the impression that the

of just compensation, the wording of the Land Bank Certification notwithstanding, and

BIR zonal valuation may form part of the basis for just compensation, which should not be the

credence should be given to the consistent position of the Government on that aspect.

case. Moreover, respondent judge made no attempt to apply the enumerated guidelines for

In any event, for the RTC to be able to justify the payment of US$62.3 Million to

Rep. Act No. 8974 is plainly clear in imposing the requirement of immediate prepayment,

PIATCO and not P3 Billion Pesos, he would have to establish that the higher amount

and no amount of statutory deconstruction can evade such requisite. It enshrines a new

represents the valuation of the structures/improvements, and not the BIR zonal valuation on

approach towards eminent domain that reconciles the inherent unease attending expropriation

the land wherein NAIA 3 is built. TheOrder dated 5 January 2005 fails to establish such

proceedings with a position of fundamental equity. While expropriation proceedings have

integral fact, and in the absence of contravening proof, the proffered value of P3 Billion, as

always demanded just compensation in exchange for private property, the previous deposit

presented by the Government, should prevail.

requirement impeded immediate compensation to the private owner, especially in cases

Strikingly, the Government submits that assuming that Rep. Act No. 8974 is applicable,

wherein the determination of the final amount of compensation would prove highly disputed.

the deposited amount of P3 Billion should be considered as the proffered value, since the

Under the new modality prescribed by Rep. Act No. 8974, the private owner sees immediate

51

amount was based on comparative values made by the City Assessor. Accordingly, it should

monetary recompense with the same degree of speed as the taking of his/her property.

be deemed as having faithfully complied with the requirements of the statute.52 While the

While eminent domain lies as one of the inherent powers of the State, there is no

Court agrees that P3 Billion should be considered as the correct proffered value, still we

requirement that it undertake a prolonged procedure, or that the payment of the private owner

cannot deem the Government as having faithfully complied with Rep. Act No. 8974. For the

be protracted as far as practicable. In fact, the expedited procedure of payment, as highlighted

law plainly requires direct payment to the property owner, and not a mere deposit with the

under Rep. Act No. 8974, is inherently more fair, especially to the layperson who would be

authorized government depositary. Without such direct payment, no writ of possession may be

hard-pressed to fully comprehend the social value of expropriation in the first place.

obtained.

Immediate payment placates to some degree whatever ill-will that arises from expropriation,

Writ of Possession May Not Be Implemented Until Actual Receipt by PIATCO of Proffered

as well as satisfies the demand of basic fairness.

Value

The Court has the duty to implement Rep. Act No. 8974 and to direct compliance with the

The Court thus finds another error on the part of the RTC. The RTC authorized the issuance of

requirement of immediate payment in this case. Accordingly, the Writ of Possession dated 21

the writ of possession to the Government notwithstanding the fact that no payment of any

December 2004 should be held in abeyance, pending proof of actual payment by the

amount had yet been made to PIATCO, despite the clear command of Rep. Act No. 8974 that

Government to PIATCO of the proffered value of the NAIA 3 facilities, which totals

there must first be payment before the writ of possession can issue. While the RTC did direct

P3,002,125,000.00.

the LBP-Baclaran to immediately release the amount of US$62 Million to PIATCO, it should

Rights of the Government upon Issuance of the Writ of Possession

have likewise suspended the writ of possession, nay, withdrawn it altogether, until the

Once the Government pays PIATCO the amount of the proffered value of P3 Billion, it will be

Government shall have actually paid PIATCO. This is the inevitable consequence of the clear

entitled to the Writ of Possession. However, the Government questions the qualification

command of Rep. Act No. 8974 that requires immediate payment of the initially determined

imposed by the RTC in its 4 January 2005 Order consisting of the prohibition on the

amount of just compensation should be effected. Otherwise, the overpowering intention of

Government from performing acts of ownership such as awarding concessions or leasing any

Rep. Act No. 8974 of ensuring payment first before transfer of repossession would be

part of NAIA 3 to other parties. To be certain, the RTC, in its 10 January 2005 Omnibus

eviscerated.

Order, expressly stated that it was not affirming the superfluous part of the Order [of 4

Rep. Act No. 8974 represents a significant change from previous expropriation laws such

January 2005] prohibiting the plaintiffs from awarding concessions or leasing any part of

as Rule 67, or even Section 19 of the Local Government Code. Rule 67 and the Local

NAIA [3] to other parties.56 Still, such statement was predicated on the notion that since the

Government

Government was not yet the owner of NAIA 3 until final payment of just compensation, it was

Code

merely

provided

that

the

Government

deposit

the

initial

53

amounts antecedent to acquiring possession of the property with, respectively, an authorized

obviously incapacitated to perform such acts of ownership.

Government depositary54 or the proper court.55 In both cases, the private owner does not

In deciding this question, the 2004 Resolution inAgan cannot be ignored, particularly the

receive compensation prior to the deprivation of property. On the other hand, Rep. Act No.

declaration that [f]or the government to take over the said facility, it has to compensate

8974 mandates immediate payment of the initial just compensation prior to the issuance of the

respondent PIATCO as builder of the said structures. The obvious import of this holding is

writ of possession in favor of the Government.

that unless PIATCO is paid just compensation, the Government is barred from taking over, a

phrase which in the strictest sense could encompass even a bar of physical possession of

to exercise more than just the right of possession by virtue of the writ of possession, yet it

NAIA 3, much less operation of the facilities.

cannot be construed to grant the Government the entire panoply of rights that are available to

There are critical reasons for the Court to view the 2004 Resolution less stringently, and

the owner. Certainly, neither Tagle nor any other case or law, lends support to the

thus allow the operation by the Government of NAIA 3 upon the effectivity of the Writ of

Governments proposition that it acquires beneficial or equitable ownership of the

Possession. For one, the national prestige is diminished every day that passes with the NAIA 3

expropriated property merely through the writ of possession. Indeed, this Court has been

remaining mothballed. For another, the continued non-use of the facilities contributes to its

vigilant in defense of the rights of the property owner who has been validly deprived of

physical deterioration, if it has not already. And still for another, the economic benefits to the

possession, yet retains legal title over the expropriated property pending payment of just

Government and the country at large are beyond dispute once the NAIA 3 is put in operation.

compensation. We reiterated the various doctrines of such import in our recent holding

Rep. Act No. 8974 provides the appropriate answer for the standard that governs the

in Republic v. Lim:60

extent of the acts the Government may be authorized to perform upon the issuance of the writ

The recognized rule is that title to the property expropriated shall pass from the owner to the

of possession. Section 4 states that the court shall immediately issue to the implementing

expropriator only upon full payment of the just compensation. Jurisprudence on this settled

agency an order to take possession of the property and start the implementation of the

principle is consistent both here and in other democratic jurisdictions. In Association of Small

project. We hold that accordingly, once the Writ of Possession is effective, the Government

Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform[61], thus:

itself is authorized to perform the acts that are essential to the operation of the NAIA 3 as an

Title to property which is the subject of condemnation proceedings does not vest the

international airport terminal upon the effectivity of the Writ of Possession. These would

condemnor until the judgment fixing just compensation is entered and paid, but the

include the repair, reconditioning and improvement of the complex, maintenance of the

condemnors title relates back to the date on which the petition under the Eminent Domain

existing facilities and equipment, installation of new facilities and equipment, provision of

Act, or the commissioners report under the Local Improvement Act, is filed.

services and facilities pertaining to the facilitation of air traffic and transport, and other
services that are integral to a modern-day international airport.
The Governments position is more expansive than that adopted by the Court. It argues
that with the writ of possession, it is enabled to perform acts de jure on the expropriated

x x x Although the right to appropriate and use land taken for a canal is complete at the
time of entry, title to the property taken remains in the owner until payment is actually
made. (Emphasis supplied.)

57

property. It cites Republic v. Tagle, as well as the statement therein that the expropriation of
real property does not include mere physical entry or occupation of land, and from them

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to

concludes that its mere physical entry and occupation of the property fall short of the taking

property does not pass to the condemnor until just compensation had actually been made. In

of title, which includes all the rights that may be exercised by an owner over the subject
property.
This conclusion is indeed lifted directly from statements in Tagle,58 but not from the ratio
decidendiof that case. Tagle concerned whether a writ of possession in favor of the
Government was still necessary in light of the fact that it was already in actual possession of
the property. In ruling that the Government was entitled to the writ of possession, the Court
in Tagle explains that such writ vested not only physical possession, but also the legal right to
possess the property. Continues the Court, such legal right to possess was particularly
important in the case, as there was a pending suit against the Republic for unlawful detainer,
and the writ of possession would serve to safeguard the Government from eviction. 59
At the same time, Tagle conforms to the obvious, that there is no transfer of ownership as
of yet by virtue of the writ of possession. Tagle may concede that the Government is entitled

fact, the decisions appear to be uniform to this effect. As early as 1838, in Rubottom v.
McLure, it was held that actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the State albeit not
to the appropriation of it to public use. In Rexford v. Knight, the Court of Appeals of New
York said that the construction upon the statutes was that the fee did not vest in the State until
the payment of the compensation although the authority to enter upon and appropriate the land
was complete prior to the payment. Kennedy further said that both on principle and
authority the rule is . . . that the right to enter on and use the property is complete, as
soon as the property is actually appropriated under the authority of law for a public use,
but that the title does not pass from the owner without his consent, until just
compensation has been made to him.
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:

If the laws which we have exhibited or cited in the preceding discussion are attentively

to the Government. However, to effectuate the transfer of ownership, it is necessary for the

examined it will be apparent that the method of expropriation adopted in this

Government to pay the property owner the final just compensation.

jurisdiction is such as to afford absolute reassurance that no piece of land can be finally

In Lim, the Court went as far as to countenance, given the exceptional circumstances of

and irrevocably taken from an unwilling owner until compensation is paid. . . .

that case, the reversion of the validly expropriated property to private ownership due to the

(Emphasis supplied.)

failure of the Government to pay just compensation in that case.64 It was noted in that case that

Clearly, without full payment of just compensation, there can be no transfer of title from

the Government deliberately refused to pay just compensation. The Court went on to rule that

the landowner to the expropriator. Otherwise stated, the Republics acquisition of ownership is

in cases where the government failed to pay just compensation within five (5) years from the

conditioned upon the full payment of just compensation within a reasonable time.

finality of the judgment in the expropriation proceedings, the owners concerned shall have the

62

Significantly, in Municipality of Bian v. Garcia[ ] this Court ruled that the expropriation of

right to recover possession of their property.65

lands consists of two stages, to wit:

Rep. Act No. 8974 mandates a speedy method by which the final determination of just

x x x The first is concerned with the determination of the authority of the plaintiff to exercise

compensation may be had. Section 4 provides:

the power of eminent domain and the propriety of its exercise in the context of the facts

In the event that the owner of the property contests the implementing agencys proffered

involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation

value, the court shall determine the just compensation to be paid the owner within sixty (60)

declaring that the plaintiff has a lawful right to take the property sought to be condemned, for

days from the date of filing of the expropriation case. When the decision of the court becomes

the public use or purpose described in the complaint, upon the payment of just compensation

final and executory, the implementing agency shall pay the owner the difference between the

to be determined as of the date of the filing of the complaint x x x.

amount already paid and the just compensation as determined by the court.

The second phase of the eminent domain action is concerned with the determination by

We hold that this provision should apply in this case. The sixty (60)-day period prescribed in

the court of the just compensation for the property sought to be taken. This is done by the

Rep. Act No. 8974 gives teeth to the laws avowed policy to ensure that owners of real

court with the assistance of not more than three (3) commissioners. x x x.

property acquired for national government infrastructure projects are promptly paidjust

It is only upon the completion of these two stages that expropriation is said to have been

compensation.66 In this case, there already has been irreversible delay in the prompt payment

completed. In Republic v. Salem Investment Corporation,[63] we ruled that, the process is not

of PIATCO of just compensation, and it is no longer possible for the RTC to determine the

completed until payment of just compensation. Thus, here, the failure of the Republic to pay

just compensation due PIATCO within sixty (60) days from the filing of the complaint last 21

respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation

December 2004, as contemplated by the law. Still, it is feasible to effectuate the spirit of the

process incomplete.

law by requiring the trial court to make such determination within sixty (60) days from finality

Lim serves fair warning to the Government and its agencies who consistently refuse to pay just

of this decision, in accordance with the guidelines laid down in Rep. Act No. 8974 and its

compensation due to the private property owner whose property had been expropriated. At the

Implementing Rules.

same time,Lim emphasizes the fragility of the rights of the Government as possessor pending

Of course, once the amount of just compensation has been finally determined, the

the final payment of just compensation, without diminishing the potency of such rights.

Government is obliged to pay PIATCO the said amount. As shown inLim and other like-

Indeed, the public policy, enshrined foremost in the Constitution, mandates that the

minded cases, the Governments refusal to make such payment is indubitably actionable in

Government must pay for the private property it expropriates. Consequently, the proper

court.

judicial attitude is to guarantee compliance with this primordial right to just compensation.

Appointment of Commissioners

Final Determination of Just Compensation Within 60 Days

The next argument for consideration is the claim of the Government that the RTC erred in

The issuance of the writ of possession does not writefinis to the expropriation proceedings. As

appointing the three commissioners in its 7 January 2005 Orderwithout prior consultation with

earlier pointed out, expropriation is not completed until payment to the property owner of just

either the Government or PIATCO, or without affording the Government the opportunity to

compensation. The proffered value stands as merely a provisional determination of the amount

object to the appointment of these commissioners. We can dispose of this argument without

of just compensation, the payment of which is sufficient to transfer possession of the property

complication.

It must be noted that Rep. Act No. 8974 is silent on the appointment of commissioners

to inhibit himself. This grave charge is predicated on facts which the Government

tasked with the ascertainment of just compensation.67 This protocol though is sanctioned under

characterizes as undeniable. In particular, the Government notes that the 4 January

Rule 67. We rule that the appointment of commissioners under Rule 67 may be resorted to,

2005 Order was issued motu proprio, without any preceding motion, notice or hearing.

even in expropriation proceedings under Rep. Act No. 8974, since the application of the

Further, such order, which directed the payment of US$62 Million to PIATCO, was attended

provisions of Rule 67 in that regard do not conflict with the statute. As earlier stated, Section

with error in the computation of just compensation. The Government also notes that the

14 of the Implementing Rules does allow such other incidents affecting the complaint to be

said Order was issued even before summons had been served on PIATCO.

resolved under the provisions on expropriation of Rule 67 of the Rules of Court. Even without

The disqualification of a judge is a deprivation of his/her judicial power 73 and should not

Rule 67, reference during trial to a commissioner of the examination of an issue of fact is

be allowed on the basis of mere speculations and surmises. It certainly cannot be predicated on

sanctioned under Rule 32 of the Rules of Court.

the adverse nature of the judges rulings towards the movant for inhibition, especially if these

But while the appointment of commissioners under the aegis of Rule 67 may be

rulings are in accord with law. Neither could inhibition be justified merely on the erroneous

sanctioned in expropriation proceedings under Rep. Act No. 8974, the standards to be

nature of the rulings of the judge. We emphasized in Webb v. People:74

observed for the determination of just compensation are provided not in Rule 67 but in the

To prove bias and prejudice on the part of respondent judge,petitioners harp on the alleged

statute. In particular, the governing standards for the determination of just compensation for

adverse and erroneous rulings of respondent judge on their various motions. By

the NAIA 3 facilities are found in Section 10 of the Implementing Rules for Rep. Act No.

themselves, however, they do not sufficiently prove bias and prejudice to disqualify

8974, which provides for the replacement cost method in the valuation of improvements and

respondent judge. To be disqualifying, the bias and prejudice must be shown to have

structures.

68

stemmed from an extrajudicial source and result in an opinion on the merits on some

Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with the parties in

basis other than what the judge learned from his participation in the case. Opinions

the expropriation case on who should be appointed as commissioners. Neither does the Court

formed in the course of judicial proceedings, although erroneous, as long as they are based on

feel that such a requirement should be imposed in this case. We did rule in Municipality of

the evidence presented and conduct observed by the judge, do not prove personal bias or

69

Talisay v. Ramirez that there is nothing to prevent [the trial court] from seeking the

prejudice on the part of the judge. As a general rule, repeated rulings against a litigant, no

recommendations of the parties on [the] matter [of appointment of commissioners], the better

matter how erroneous and vigorously and consistently expressed, are not a basis for

to ensure their fair representation.70 At the same time, such solicitation of recommendations

disqualification of a judge on grounds of bias and prejudice. Extrinsic evidence is

is not obligatory on the part of the court, hence we cannot impute error on the part of the RTC

required to establish bias, bad faith, malice or corrupt purpose, in addition to the

in its exercise of solitary discretion in the appointment of the commissioners.

palpable error which may be inferred from the decision or order itself. Although the

What Rule 67 does allow though is for the parties to protest the appointment of any of

decision may seem so erroneous as to raise doubts concerning a judges integrity, absent

these commissioners, as provided under Section 5 of the Rule. These objections though must

extrinsic evidence, the decision itself would be insufficient to establish a case against the

be made filed within ten (10) days from service of the order of appointment of the

judge. The only exception to the rule is when the error is so gross and patent as to

71

commissioners. In this case, the proper recourse of the Government to challenge the choice

produce an ineluctable inference of bad faith or malice.75

of the commissioners is to file an objection with the trial court, conformably with Section 5,

The Governments contentions against Hon. Gingoyon are severely undercut by the fact that

Rule 67, and not as it has done, assail the same through a special civil action for certiorari.

the 21 December 2004 Order, which the 4 January 2005Order sought to rectify, was indeed

Considering that the expropriation proceedings in this case were effectively halted seven (7)

severely flawed as it erroneously applied the provisions of Rule 67 of the Rules of Court,

72

days after theOrder appointing the commissioners, it is permissible to allow the parties to

instead of Rep. Act No. 8974, in ascertaining compliance with the requisites for the issuance

file their objections with the RTC within five (5) days from finality of this decision.

of the writ of possession. The 4 January 2005Order, which according to the Government

Insufficient Ground for Inhibition of Respondent Judge

establishes Hon. Gingoyons bias, was promulgated precisely to correct the previous error by

The final argument for disposition is the claim of the Government is that Hon. Gingoyon has

applying the correct provisions of law. It would not speak well of the Court if it sanctions a

prejudged the expropriation case against the Governments cause and, thus, should be required

judge for wanting or even attempting to correct a previous erroneous order which precisely is

prudent. However, hearing is not mandatory, and the failure to conduct one does not establish

the right move to take.

the manifest bias required for the inhibition of the judge.

Neither are we convinced that the motu proprioissuance of the 4 January 2005 Order,

The Government likewise faults Hon. Gingoyon for using the amount of US$350 Million as

without the benefit of notice or hearing, sufficiently evinces bias on the part of Hon.

the basis for the 100% deposit under Rep. Act No. 8974. The Court has noted that this

Gingoyon. The motu proprioamendment by a court of an erroneous order previously issued

statement was predicated on the erroneous belief that the BIR zonal valuation applies as a

may be sanctioned depending on the circumstances, in line with the long-recognized principle

standard for determination of just compensation in this case. Yet this is manifest not of bias,

that every court has inherent power to do all things reasonably necessary for the administration

but merely of error on the part of the judge. Indeed, the Government was not the only victim

76

of justice within the scope of its jurisdiction. Section 5(g), Rule 135 of the Rules of Court

of the errors of the RTC in the assailed orders. PIATCO itself was injured by the issuance by

further recognizes the inherent power of courts to amend and control its process and orders so

the RTC of the writ of possession, even though the former had yet to be paid any amount of

as to make them conformable to law and justice,77 a power which Hon. Gingoyon noted in his

just compensation. At the same time, the Government was also prejudiced by the erroneous

78

10 January 2005 Omnibus Order. This inherent power includes the right of the court to

ruling of the RTC that the amount of US$62.3 Million, and not P3 Billion, should be released

reverse itself, especially when in its honest opinion it has committed an error or mistake in

to PIATCO.

judgment, and that to adhere to its decision will cause injustice to a party litigant.

79

The Court has not been remiss in pointing out the multiple errors committed by the RTC

Certainly, the 4 January 2005 Order was designed to make the RTCs previous order

in its assailed orders, to the prejudice of both parties. This attitude of error towards all does

conformable to law and justice, particularly to apply the correct law of the case. Of course, as

not ipso facto negate the charge of bias. Still, great care should be had in requiring the

earlier established, this effort proved incomplete, as the 4 January 2005 Order did not

inhibition of judges simply because the magistrate did err. Incompetence may be a ground for

correctly apply Rep. Act No. 8974 in several respects. Still, at least, the 4 January

administrative sanction, but not for inhibition, which requires lack of objectivity or

2005 Ordercorrectly reformed the most basic premise of the case that Rep. Act No. 8974

impartiality to sit on a case.

governs the expropriation proceedings.

The Court should necessarily guard against adopting a standard that a judge should be

Nonetheless, the Government belittles Hon. Gingoyons invocation of Section 5(g), Rule

inhibited from hearing the case if one litigant loses trust in the judge. Such loss of trust on the

135 as patently without merit. Certainly merit can be seen by the fact that the 4 January

part of the Government may be palpable, yet inhibition cannot be grounded merely on the

2005 Order reoriented the expropriation proceedings towards the correct governing law. Still,

feelings of the partylitigants. Indeed, every losing litigant in any case can resort to claiming

the Government claims that the unilateral act of the RTC did not conform to law or justice, as

that the judge was biased, and he/she will gain a sympathetic ear from friends, family, and

it was not afforded the right to be heard.

people who do not understand the judicial process. The test in believing such a proposition

The Court would be more charitably disposed towards this argument if not for the fact that

should not be the vehemence of the litigants claim of bias, but the Courts judicious

the earlier order with the 4 January 2005 Order sought to correct was itself issued without the

estimation, as people who know better than to believe any old cry of wolf!, whether such

benefit of any hearing. In fact, nothing either in Rule 67 or Rep. Act No. 8975 requires the

bias has been irrefutably exhibited.

conduct of a hearing prior to the issuance of the writ of possession, which by design is

The Court acknowledges that it had been previously held that at the very first sign of lack of

available immediately upon the filing of the complaint provided that the requisites attaching

faith and trust in his actions, whether well-grounded or not, the judge has no other alternative

thereto are present. Indeed, this expedited process for the obtention of a writ of possession in

but to inhibit himself from the case.80 But this doctrine is qualified by the entrenched rule that

expropriation cases comes at the expense of the rights of the property owner to be heard or to

a judge may not be legally prohibited from sitting in a litigation, but when circumstances

be deprived of possession. Considering these predicates, it would be highly awry to demand

appear that will induce doubt to his honest actuations and probity in favor of either party, or

that an order modifying the earlier issuance of a writ of possession in an expropriation case be

incite such state of mind, he should conduct a careful self-examination. He should exercise his

barred until the staging of a hearing, when the issuance of the writ of possession itself is not

discretion in a way that the peoples faith in the Courts of Justice is not impaired.81 And a

subject to hearing. Perhaps the conduct of a hearing under these circumstances would be

selfassessment by the judge that he/she is not impaired to hear the case will be respected by
the Court absent any evidence to the contrary. As held in Chin v. Court of Appeals:

An allegation of prejudgment, without more, constitutes mere conjecture and is not one of the

services and facilities pertaining to the facilitation of air traffic and transport, and

just and valid reasons contemplated in the second paragraph of Rule 137 of the Rules of

other services that are integral to a modern-day international airport.83

Court for which a judge may inhibit himself from hearing the case. We have repeatedly held

5. (5)The RTC is mandated to complete its determination of the just compensation

that mere suspicion that a judge is partial to a party is not enough. Bare allegations of partiality

within sixty (60) days from finality of this Decision. In doing so, the RTC is

and prejudgment will not suffice in the absence of clear and convincing evidence to overcome

obliged to comply with the standards set under Rep. Act No. 8974 and its

the presumption that the judge will undertake his noble role to dispense justice according to

Implementing Rules. Considering that the NAIA 3 consists of structures and

law and evidence and without fear or favor. There should be adequate evidence to prove the

improvements, the valuation thereof shall be determined using the replacements

allegations, and there must be showing that the judge had an interest, personal or otherwise, in

cost method, as prescribed under Section 10 of the Implementing Rules.

the prosecution of the case. To be a disqualifying circumstance, the bias and prejudice must be
shown to have stemmed from an extrajudicial source and result in an opinion on the merits on
some basis other than what the judge learned from his participation in the case.

82

1. (6)There was no grave abuse of discretion attending the RTC Order appointing the
commissioners for the purpose of determining just compensation. The provisions

The mere vehemence of the Governments claim of bias does not translate to clear and

on commissioners under Rule 67 shall apply insofar as they are not inconsistent

convincing evidence of impairing bias. There is no sufficient ground to direct the inhibition of

with Rep. Act No. 8974, its Implementing Rules, or the rulings of the Court

Hon. Gingoyon from hearing the expropriation case.

in Agan.

In conclusion, the Court summarizes its rulings as follows:

2. (7)The Government shall pay the just compensation fixed in the decision of the trial
court to PIATCO immediately upon the finality of the said decision.

1. (1)The 2004 Resolution in Agan sets the base requirement that has to be observed

3. (8)There is no basis for the Court to direct the inhibition of Hon. Gingoyon.

before the Government may take over the NAIA 3, that there must be payment to
PIATCO of just compensation in accordance with law and equity. Any ruling in

All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant the

the present expropriation case must be conformable to the dictates of the Court as

nullification of the questioned orders. Nonetheless, portions of these orders should be

pronounced in theAgan cases.

modified to conform with law and the pronouncements made by the Court herein.

2. (2)Rep. Act No. 8974 applies in this case, particularly insofar as it requires the

WHEREFORE, the Petition is GRANTED in PART with respect to the orders dated 4

immediate payment by the Government of at least the proffered value of the NAIA

January 2005 and 10 January 2005 of the lower court. Said orders are AFFIRMED with the

3 facilities to PIATCO and provides certain valuation standards or methods for the

following MODIFICATIONS:

determination of just compensation.

3. (3)Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor

1. 1)The implementation of the Writ of Possession dated 21 December 2004 is HELD

of the Government over NAIA 3 is held in abeyance until PIATCO is directly paid

IN ABEYANCE, pending payment by petitioners to PIATCO of the amount of

the amount of P3 Billion, representing the proffered value of NAIA 3 under

Three Billion Two Million One Hundred Twenty Five Thousand Pesos

Section 4(c) of the law.

(P3,002,125,000.00), representing the proffered value of the NAIA 3 facilities;

4. (4)Applying Rep. Act No. 8974, the Government is authorized to start the

2. 2)Petitioners, upon the effectivity of the Writ of Possession, are authorized start the

implementation of the NAIA 3 Airport terminal project by performing the acts that

implementation of the Ninoy Aquino International Airport Passenger Terminal III

are essential to the operation of the NAIA 3 as an international airport terminal

project by performing the acts that are essential to the operation of the said

upon the effectivity of the Writ of Possession, subject to the conditions above-

International Airport Passenger Terminal project;

stated. As prescribed by the Court, such authority encompasses the repair,

reconditioning and improvement of the complex, maintenance of the existing
facilities and equipment, installation of new facilities and equipment, provision of

1. 3)RTC Branch 117 is hereby directed, within sixty (60) days from finality of this
Decision, to determine the just compensation to be paid to PIATCO by the
Government.
The Order dated 7 January 2005 is AFFIRMED in all respects subject to the qualification that
the parties are given ten (10) days from finality of this Decision to file, if they so choose,
objections to the appointment of the commissioners decreed therein.
The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED.
No pronouncement as to costs.
SO ORDERED.
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Callejo,
Sr., Azcuna,Chico-Nazario and Garcia, JJ., concur.
Davide, Jr. (C.J.), I join Mr. Justice Corona in his dissent.
Puno, J., Pls. see Separate Opinion.
Panganiban, J., I join the dissent of Mr. Justice Renato C. Corona.
Carpio, J., See Separate Opinion. In the result.
Corona, J., Please see dissenting opinion.
Carpio-Morales, J., I join the dissent of J. Corona.

Same; Same; Same; Same; The reports of commissioners are merely advisory and
G.R. No. 150936. August 18, 2004.*
NATIONAL

POWER

CORPORATION,

recommendatory in character, as far as the courts are concerned.Under Section 8 of Rule

petitioner, vs.MANUBAY

AGRO-

INDUSTRIAL DEVELOPMENT CORPORATION, respondent.

67 of the Rules of Court, the court may accept the report and render judgment in accordance
therewith; or for cause shown, it may recommit the same to the commissioners for further
report of facts, or it may set aside the report and appoint new commissioners, or it may accept

Constitutional Law; Eminent Domain; Easement; Right of Way; The acquisition of an

easement of right of way falls within the purview of the power of eminent domain.

the report in part and reject it in part; x x x. In other words, the reports of commissioners are
merely advisory and recommendatory in character, as far as the courts are concerned.

Granting arguendo that what petitioner acquired over respondents property was purely an
easement of a right of way, still, we cannot sustain its view that it should pay only an easement

PETITION for review on certiorari of a decision of the Court of Appeals.

fee, and not the full value of the property. The acquisition of such an easement falls within the
purview of the power of eminent domain. This conclusion finds support in similar cases in
which the Supreme Court sustained the award of just compensation for private property

The Solicitor General for petitioner.

Michael G. Jornales for respondent.

condemned for public use.

Same; Same; Same; Just

The facts are stated in the opinion of the Court.

Compensation; Definition

of

Just

Compensation.Just

PANGANIBAN, J.:

compensation is defined as the full and fair equivalent of the property taken from its owner by
the expropriator. The measure is not the takers gain, but the owners loss. The word just is

How much just compensation should be paid for an easement of a right of way over a parcel of

used to intensify the meaning of the word compensation and to convey thereby the idea that

land that will be traversed by highpowered transmission lines? Should such compensation be a

the equivalent to be rendered for the property to be taken shall be real, substantial, full and

simple easement fee or the full value of the property? This is the question to be answered in

ample.

this case.

Same; Same; Same; Same; In eminent domain or expropriation proceedings, the just

The Case

compensation to which the owner of a condemned property is entitled is generally the market

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to reverse and

value; Meaning of Market Value; Such amount is not limited to the assessed value of the

set aside the November 23, 2001 Decision2 of the Court of Appeals (CA) in CA-GR CV No.

property or to the schedule of market values determined by the provincial or city appraisal

60515. The CA affirmed the June 24, 1998 Decision3 of the Regional Trial Court4(RTC) of

committee.In eminent domain or expropriation proceedings, the just compensation to which

Naga City (Branch 26), directing the National Power Corporation (NPC) to pay the value of

the owner of a condemned property is entitled is generally the market value. Market value is

the land expropriated from respondent for the use thereof in NPCs Leyte-Luzon HVDC

that sum of money which a person desirous but not compelled to buy, and an owner willing

Power Transmission Project.

but not compelled to sell, would agree on as a price to be given and received therefor. Such

The Facts

amount is not limited to the assessed value of the property or to the schedule of market values

The CA summarized the antecedents of the case as follows:

determined by the provincial or city appraisal committee. However, these values may serve as

In 1996, [Petitioner] NATIONAL POWER CORPORATION, a government-owned and

factors to be considered in the judicial valuation of the property.

controlled corporation created for the purpose of undertaking the development and generation

Same; Same; Same; Same; The nature and character of the land at the time of its taking

of hydroelectric power, commenced its 350 KV Leyte-Luzon HVDC Power Transmission

is the principal criterion for determining how much just compensation should be given to the

Project. The project aims to transmit the excess electrical generating capacity coming from

landowner.The nature and character of the land at the time of its taking is the principal

Leyte Geothermal Plant to Luzon and various load centers in its vision to interconnect the

criterion for determining how much just compensation should be given to the landowner. All

entire country into a single power grid. Apparently, the project is for a public purpose.

the facts as to the condition of the property and its surroundings, as well as its improvements
and capabilities, should be considered.

In order to carry out this project, it is imperative for the [petitioners] transmission lines

land will be developed into a first class subdivision, she recommended the amount of P550.00

to cross over certain lands owned by private individuals and entities. One of these lands,

per square meter as just compensation for the subject property, or the total amount of

[where] only a portion will be traversed by the transmission lines, is owned by [respondent]

P12,628,940.50 for the entire area affected.5

MANUBAY AGRO-INDUSTRIAL DEVELOPMENT CORPORATION.

Taking into consideration the condition, the surroundings and the potentials of respondents

Hence, on 03 December 1996, [petitioner] filed a complaint for expropriation before the

expropriated property, the RTC approved Chairperson Minda B. Teoxons recommended

Regional Trial Court of Naga City against [respondent] in order to acquire an easement of

amount of P550 per square meter as just compensation for the property. The trial court opined

right of way over the land which the latter owns. The said land is situated at Km. 8, Barangay

that the installation thereon of the 350 KV Leyte-Luzon HVDC Power Transmission Project

Pacol, Naga City, Camarines Sur and described with more particularity, as follows:

would impose a limitation on the use of the land for an indefinite period of time, thereby

TCT/OCT NO. IN

TOTAL AREA IN

AFFECTED

CLASS. OF

SQ. M.

SQ.M.

AREA

LAND

justifying the payment of the full value of the property.

Further, the RTC held that it was not bound by the provision cited by petitionerSection
6

17795

490,232

21,386.16

Agri.

3-A of Republic Act 6395,7 as amended by Presidential Decree 938. This law prescribes as

17797

40,848

1,358.17

Agri.

just compensation for the acquired easement of a right of way over an expropriated property

17798

5,279

217.38

Agri.

an easement fee in an amount not exceeding 10 percent of the market value of such property.

TOTAL

22,961.71

The trial court relied on the earlier pronouncements of this Court that the determination of just

On 02 January 1997, [respondent] filed its answer. Thereafter, the court a quo issued an order

compensation in eminent domain cases is a judicial function. Thus, valuations made by the

dated 20 January 1997 authorizing the immediate issuance of a writ of possession and

executive branch or the legislature are at best initial or preliminary only.

directing Ex-Officio Provincial Sheriff to immediately place [petitioner] in possession of the

Ruling of the Court of Appeals

subject land.

Affirming the RTC, the CA held that RA 6395, as amended by PD No. 938, did not preclude

Subsequently, the court a quo directed the issuance of a writ of condemnation in favor of

expropriation. Section 3-A thereof allowed the power company to acquire not just an easement

[petitioner] through an order dated 14 February 1997. Likewise, for the purpose of

of a right of way, but even the land itself. Such easement was deemed by the appellate court to

determining the fair and just compensation due to [respondent], the court appointed three

be a taking under the power of eminent domain.

commissioners composed of one representative of the petitioner, one for the respondent and

The CA observed that, given their nature, high-powered electric lines traversing

the other from the court, namely: OIC-Branch Clerk of Court Minda B. Teoxon as

respondents property would necessarily diminishif not damage entirelythe value and the

Chairperson and Philippine National Bank-Naga City Loan Appraiser Mr. Isidro Virgilio

use of the affected property; as well as endanger lives and limbs because of the high-tension

Bulao, Jr. and City Assessor Ramon R. Albeus as members.

current conveyed through the lines. Respondent was therefore deemed entitled to a just

On 03 and 06 March 1997, respectively, Commissioners Ramon Albeus and Isidro

compensation, which should be neither more nor less than the monetary equivalent of the

Bulao, Jr. took their oath of office before OIC Branch Clerk of Court and Chairperson Minda

property taken. Accordingly, the appellate court found the award of P550 per square meter to

B. Teoxon.

be proper and reasonable.

Accordingly, the commissioners submitted their individual appraisal/valuation reports.

Hence, this Petition.8

The commissioner for the [petitioner], Commissioner Albeus, finding the subject land

Issues

irregular and sloppy, classified the same as low density residential zone and recommended the

In its Memorandum, petitioner submits this lone issue for our consideration:

price of P115.00 per square meter. On the other hand, Commissioner Bulao, commissioner for

Whether or not the Honorable Court of Appeals gravely erred in affirming the Decision dated

the [respondent], recommended the price of P550.00 per square meter. The courts

June 24, 1998 of the Regional Trial Court, Branch 26, Naga City considering that its Decision

Commissioner and Chairperson of the Board Minda Teoxon, on the other hand, found

dated November 23, 2001 is not in accord with law and the applicable decisions of this

Commissioner Albeus appraisal low as compared to the BIR Zonal Valuation and opted to

Honorable Court.9

adopt the price recommended by Commissioner Bulao. On the assumption that the subject

The Courts Ruling

nevertheless, not gratis. As correctly observed by the CA, considering the nature and the

The Petition is devoid of merit.

effect of the installation power lines, the limitations on the use of the land for an indefinite

Sole

Issue:

period would deprive respondent of normal use of the property. For this reason, the latter is

Just Compensation

entitled to payment of a just compensation, which must be neither more nor less than the

Petitioner contends that the valuation of the expropriated propertyfixed by the trial court

monetary equivalent of the land.16

and affirmed by the CAwas too high a price for the acquisition of an easement of a mere

Just compensation is defined as the full and fair equivalent of the property taken from its

aerial right of way, because respondent would continue to own and use the subject land

owner by the expropriator. The measure is not the takers gain, but the owners loss. The word

anyway. Petitioner argues that in a strict sense, there is no taking of property, but merely an

just is used to intensify the meaning of the word compensation and to convey thereby the

imposition of an encumbrance or a personal easement/servitude under Article 614 10 of the

idea that the equivalent to be rendered for the property to be taken shall be real, substantial,

Civil Code. Such encumbrance will not result in ousting or depriving respondent of the

full and ample.17

beneficial enjoyment of the property. And even if there was a taking, petitioner points out

In eminent domain or expropriation proceedings, the just compensation to which the

that the loss is limited only to a portion of the aerial domain above the property of respondent.

owner of a condemned property is entitled is generally the market value. Market value is that

Hence, the latter should be compensated only for what it would actually lose.

sum of money which a person desirous but not compelled to buy, and an owner willing but not

We are not persuaded.

compelled to sell, would agree on as a price to be given and received therefor. 18 Such amount

Petitioner averred in its Complaint in Civil Case No. RTC 96-3675 that it had sought to

is not limited to the assessed value of the property or to the schedule of market values

acquire an easement of a right of way over portions of respondents landa total area of

determined by the provincial or city appraisal committee. However, these values may serve as

22,961.71 square meters.11 In its prayer, however, it also sought authority to enter the property

factors to be considered in the judicial valuation of the property.19

and demolish all improvements existing thereon, in order to commence and undertake the
construction of its Power Transmission Project.

The parcels of land sought to be expropriated are undeniably undeveloped, raw

agricultural land. But a dominant portion thereof has been reclassified by the Sangguniang

In other words, the expropriation was not to be limited to an easement of a right of way.

Panlungsod ng Nagaper Zoning Ordinance No. 94-076 dated August 10, 1994as

In its Answer, respondent alleged that it had already authorized petitioner to take possession of

residential, per the August 8, 1996 certification of Zoning Administrator Juan O. Villegas

the affected portions of the property and to install electric towers thereon. 12The latter did not

Jr.20 The property is also covered by Naga City Mayor Jesse M. Robredos favorable

controvert this material allegation.

endorsement of the issuance of a certification for land use conversion by the Department of

Granting arguendo that what petitioner acquired over respondents property was purely an

Agrarian Reform (DAR) on the ground that the locality where the property was located had

easement of a right of way, still, we cannot sustain its view that it should pay only an easement

become highly urbanized and would have greater economic value for residential or

fee, and not the full value of the property. The acquisition of such an easement falls within the

commercial use.21

purview of the power of eminent domain. This conclusion finds support in similar cases in

The nature and character of the land at the time of its taking is the principal criterion for

which the Supreme Court sustained the award of just compensation for private property

determining how much just compensation should be given to the landowner. 22 All the facts as

13

14

condemned for public use. Republic v. PLDT held thus:

to the condition of the property and its surroundings, as well as its improvements and

x x x. Normally, of course, the power of eminent domain results in the taking or

capabilities, should be considered.23

appropriation of title to, and possession of, the expropriated property; but no cogent reason

In fixing the valuation at P550 per square meter, the trial court had considered the Report

appears why the said power may not be availed of to impose only a burden upon the owner of

of the commissioners and the proofs submitted by the parties. These documents included the

condemned property, without loss of title and possession. It is unquestionable that real

following: (1) the established fact that the property of respondent was located along the Naga-

property may, through expropriation, be subjected to an easement of right of way.15

Carolina provincial road; (2) the fact that it was about 500 meters from the Kayumanggi

True, an easement of a right of way transmits no rights except the easement itself, and

Resort and 8 kilometers from the Naga City Central Business District; and a half kilometer

respondent retains full ownership of the property. The acquisition of such easement is,

from the main entrance of the fully developed Naga City Sports Complexused as the site of

the Palarong Pambansaand the San Francisco Village Subdivision, a first class subdivision

Majority

where lots were priced at P2,500 per square meter; (3) the fair market value of P650 per

Commissioners Sufficient

square meter proffered by respondent, citing its recently concluded sale of a portion of the

Deserving scant consideration is petitioners contention that the Report adopted by the RTC

same property to Metro Naga Water District at a fixed price of P800 per square meter; (4) the

and affirmed by the CA was not the same one submitted by the board of commissioners, but

BIR zonal valuation of residential lots in Barangay Pacol, Naga City, fixed at a price of P220

was only that of its chairperson. As correctly pointed out by the trial court, the commissioners

per square meter as of 1997; and (5) the fact that the price of P430 per square meter had been

Report was actually a decision of the majority of the board. Note that after reviewing the

24

Report

of

determined by the RTC of Naga City (Branch 21) as just compensation for the Mercados

Reports of the other commissioners, Chairperson Teoxon opted to adopt the recommendation

adjoining property, which had been expropriated by NPC for the same power transmission

of Commissioner Bulao. There has been no claim that fraud or prejudice tainted the majority

project.

Report. In fact, on December 19, 1997, the trial court admitted the commissioners Report

The chairperson of the Board of Commissioners, in adopting the recommendation of

without objection from any of the parties.27

Commissioner Bulaos, made a careful study of the property. Factors considered in arriving at a

Under Section 8 of Rule 67 of the Rules of Court, the court may accept the report and

reasonable estimate of just compensation for respondent were the location; the most profitable

render judgment in accordance therewith; or for cause shown, it may recommit the same to the

likely use of the remaining area; and the size, shape, accessibility as well as listings of other

commissioners for further report of facts, or it may set aside the report and appoint new

properties within the vicinity. Averments pertaining to these factors were supported by

commissioners, or it may accept the report in part and reject it in part; x x x. In other words,

documentary evidence.

the reports of commissioners are merely advisory and recommendatory in character, as far as

On the other hand, the commissioner for petitionerCity Assessor Albeus

the courts are concerned.28

recommended a price of P115 per square meter in his Report dated June 30, 1997. No

Thus, it hardly matters whether the commissioners have unanimously agreed on their

documentary evidence, however, was attached to substantiate the opinions of the banks and

recommended valuation of the property. It has been held that the report of only two

the realtors, indicated in the commissioners Report and computation of the market value of

commissioners may suffice, even if the third commissioner dissents. 29 As a court is not bound

the property.

by commissioners reports it may make such order or render such judgment as shall secure for

The price of P550 per square meter appears to be the closest approximation of the market

the plaintiff the property essential to the exercise of the latters right of condemnation; and for

value of the lots in the adjoining, fully developed San Francisco Village Subdivision.

the defendant, just compensation for the property expropriated. For that matter, the court may

Considering that the parcels of land in question are still undeveloped raw land, it appears to

even substitute its own estimate of the value as gathered from the evidence on record.30

the Court that the just compensation of P550 per square meter is justified.
Inasmuch as the determination of just compensation in eminent domain cases is a judicial
function,25 and the trial court apparently did not act capriciously or arbitrarily in setting the
price at P550 per square meteran award affirmed by the CAwe see no reason to disturb
the factual findings as to the valuation of the property. Both the Report of Commissioner

WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. No

pronouncement as to costs.
SO ORDERED.
Corona and Carpio-Morales, JJ., concur.
Sandoval-Gutierrez, J., On Leave.

Bulao and the commissioners majority Report were based on uncontroverted facts supported

Petition denied, assailed decision affirmed.

by documentary evidence and confirmed by their ocular inspection of the property. As can be

Note.Acquisition of an easement of a right-of-way falls within the purview of the

gleaned from the records, they did not abuse their authority in evaluating the evidence

power of eminent domain. (Camarines Norte Electric Cooperative, Inc. vs. Court of

submitted to them; neither did they misappreciate the clear preponderance of evidence. The

Appeals, 345 SCRA 85 [2000])

amount fixed and agreed to by the trial court and respondent appellate court has not been
grossly exorbitant or otherwise unjustified.26