G.R. Nos.

115132-34 August 9, 1995

IMELDA
R.
MARCOS, petitioner,
vs.
THE HONORABLE SANDIGANBAYAN (First Division) and the
PEOPLE OF THE PHILIPPINES, respondents.
MENDOZA, J.:
This is a petition for certiorari to set aside as arbitrary and in grave
abuse of discretion resolutions of the Sandiganbayan's First Division
denying petitioner's motion for leave to travel abroad for medical
treatment.
Petitioner, former First Lady and widow of former President Ferdinand
E. Marcos, is the defendant in several criminal cases for violations of
the Anti Graft and Corrupt Practices Act (R.A. No. 3019) now pending
in the Sandiganbayan and in the regular courts. In two of these
cases, i.e., Criminal Case Nos. 17450 and 17453, petitioner was
found guilty by the First Division of the Sandiganbayan of violating
3(g) of the Anti Graft and Corrupt Practices Act (R.A. No. 3019) and
was sentenced to suffer in each case imprisonment for an
indeterminate period of 9 years and 1 day as minimum to 12 years
and 10 days as maximum, with perpetual disqualification from public
office. Petitioner filed a motion for reconsideration, which is pending
resolution in the Sandiganbayan.
After her conviction in the two cases petitioner filed on December 24,
1993 a "Motion for Leave to Travel Abroad" to seek diagnostic tests
and treatment by practitioners of oriental medicine in the People's
Republic of China allegedly because of "a serious and life threatening
medical condition" requiring facilities not available in the Philippines.
Petitioner's motion was denied by the Sandiganbayan for failure of
petitioner to give notice to the prosecution and because the time
asked (December 29, 1993) was too close for the court to inform itself
of the basis of the motion.
On December 29, 1993, petitioner filed in another case (Criminal
Case No. 18742) 1 an "Urgent Ex-Parte Motion for Permission to
Travel Abroad" to undergo diagnosis and treatment in China. The
motion was supported by Ambulatory BP Reports, Nuclear Medicine
Reports and Computed Tomography Scan Results prepared by her

physician and cardiologist, Dr. Roberto V. Anastacio, and other

doctors at the Makati Medical Center.
On January 4, 1994, petitioner filed In Criminal Case Nos. 17450 and
17453 another "Motion for Leave to Travel Abroad," to places
including the United States and Europe, "if necessary," for treatment
of "hypertensive heart disease, uncontrolled angina pectoris, and
anterior myocardial infarction." It was alleged that the tests needed
were not available in the Philippines.
The Chairman of respondent court's First Division, Presiding Justice
Francis E. Garchitorena, contacted Dr. Gregorio B. Patacsil, Officerin-Charge of the Philippine Heart Center, and later wrote him a
letter, 2 asking for "expert opinion on coronary medicine," particularly
on the following questions:
1. Is [petitioner's] condition life-threatening?
2. What are the "sophisticated biochemical tests" necessary
(not merely desirable), if any are needed at all, to ascertain
and remedy her condition?
3. Are these tests available here?
4. Is the present level of expertise in the Philippines adequate
to respond to her condition?
The Presidential Commission on Good Government filed a
manifestation interposing no objection to petitioner's motions
"primarily on humanitarian grounds provided that the accused comply
with the terms and conditions for travel as may be imposed" by
respondent court. The Office of the Special Prosecutor, 3 on the other
hand, opposed the motions, contending that:
1. the absolute necessity to go abroad was not demonstrated;
2. no statement was made by the accused that medical
equipment and facilities here were "sorrily" inadequate for the
needs of the movant;

3. the conviction of the accused in Criminal Cases No. 17450

and No. 17453 might motivate her not to return if she were to
be authorized to leave the country.
On January 7, 1994 hearing was held on petitioner's motion, during
which petitioner presented Dr. Roberto V. Anastacio. After the
hearing, the Sandiganbayan informed the parties that a copy of
petitioner's first motion and its supporting documents had been sent to
Dr. Patacsil for study and comment by a committee of cardiologists.
After consulting Dr. Anastacio, petitioner's counsel asked the court to
include among the questions to the committee the following: "Without
the Biochemical test, may proper treatment be administered to Mrs.
Marcos?" Petitioner's counsel also asked the court to include the list
of medicine being taken by petitioner as part of the study. These
requests were granted by the court.
Thereafter, a "Supplement to the Motion for Leave Abroad" was filed
on January 17, 1994 together with additional documents, consisting of
the following:
(a) a faxed letter from Dr. Denton A. Cooley of the Texas Heart
Institute dated January 11, 1994;
(b) a letter dated May 9, 1990 from David B. Case, M.D.
addressed to lawyer Gerry Spence;

immediately informed by phone petitioner's counsel, Attorneys

Vicente D. Millora and Manuel M. Lazaro, of the committee's report.
Atty. Lazaro requested that a copy of the report be sent to him by FAX
machine, while Atty. Millora got his copy personally from the court.
On January 26, 1994, Dr. Ramon F. Abarquez, Jr. was heard by the
court on his committee's report. Present at the hearing were the two
lawyers of petitioner and Dr. Anastacio.
On February 11, 1994, the court accepted petitioner's "Supplemental
Motion to Travel Abroad" and heard the rebuttal testimony of Dr.
Roberto V. Anastacio, as well as the testimony of Dr. Jorge Garcia,
heart surgeon from Washington, D.C., in support of petitioner's motion
to travel abroad.
On February 18, 1994 the court denied petitioner's motions. The
dispositive portion of its resolution reads:
IN VIEW OF THE FOREGOING, it is the judgment of this
Court that the imperative necessity of the accused to
undertake a trip abroad for diagnosis and treatment has not
been established and for this reason DENIES the various
motions of accused Imelda R. Marcos to leave for abroad.
SO ORDERED.

(d) two letters, both dated January 3, 1994 from China, one
from the Tranjin Medical College, and another without
letterhead from one F.S. Tsui, both letters offering their
facilities for diagnosis and treatment of hypertension and
related illness through the "Classic Art of Chinese Medical
Technology."

Petitioner filed a motion for reconsideration and a "Motion to Admit

Clinical Summary and to Resolve Motion for Reconsideration." The
Clinical Summary was a recent medical report on petitioner's
condition after she had undergone another medical examination at the
Philippine Heart Center 5 Petitioner also filed a "Motion to Admit
Recognizance in Support of, and to Resolve Soonest, the Motion for
Reconsideration to Travel Abroad." Attached to the motion were
letters of Vice President Joseph E. Estrada offering to be guarantor
for the return of petitioner and those of twenty four members of the
House of Representatives 6 requesting the court to allow petitioner to
travel abroad.

On January 20, 1994, the Sandiganbayan received by FAX machine

the report of the committee, 4 containing findings which were contrary
to the conclusions of petitioner's physicians. The Presiding Justice

In a resolution dated April 19, 1994, respondent court denied

petitioner's motion for reconsideration for lack of merit even as it
expressed disapproval of the intervention of the Vice President and

(c) a letter dated May 23, 1990 from Dr. Vincent De Quattro of
the University of Southern California Hypertension Diagnostic
Laboratory;

the twenty four congressmen and warned them and petitioner's

counsel, Atty. Rodolfo U. Jimenez, that "repetition of any attempt to
influence the resolutions, decisions or orders or any judicial action of
[respondent court] will be responded to appropriately."
Hence, this petition for certiorari to set aside the resolutions dated
February 18, 1994 and April 19, 1994 of the First Division of the
Sandiganbayan on the ground that they were issued with grave abuse
of discretion, amounting to lack or in excess of jurisdiction. Petitioner
claims that
1. [The Sandiganbayan] arbitrarily disregarded or
misinterpreted the testimonies, medical findings and
recommendations of petitioner's attending physicians and
relied on or substituted them with the academic views of Dr.
Abarquez and the Committee, who never examined or treated
personally the petitioner, and erroneously concluded "that the
necessity for trip abroad by the accused for diagnosis and
treatment has not been established";
2. It adopted an unusual and unorthodox conduct of trial as
demonstrated by the following: (a) it motu propiocontacted a
third party asking the latter to give an opinion on petitioner's
motion and medical findings; (b) it unusually participated in the
examination of petitioner's witnesses; (c) thru its PJ, it
presented as own witness; (d) it requested the formation of a
committee to study the evidence presented; (e) it did not
decide the case on the basis of the evidence presented; (f) it
decided on the basis of evidence (academic) it sought;
3. It failed to resolve that, in the clash between basic
constitutional rights of the petitioner and the authority of the
court over the petitioner, the basic constitutional rights must
prevail;
4(a). It considered the conviction of petitioner in two (2)
criminal cases which are pending reconsideration as factors in
denying the rights of petitioner to life, health and liberty and
depriving the penumbras of such right to give life and
substance;

4(b). Respondent court violated the cluster of rights of

"personhood", "privacy" or "personal liberty".
5. It perceived that there is no "imperative necessity" for
petitioner to avail of medical examination and treatment
abroad not withstanding that such perception/conclusion
cannot constitute a cause to deny or deprive petitioner of her
constitutional rights, nor can it refute the medical findings of
petitioner's attending physicians.
Called upon to comment, the Solicitor General, in representation of
the prosecution in the criminal cases, contends that respondent court
acted properly in seeking the advice of medical experts in regard to
petitioner's motion to travel; that in any event petitioner is estopped
from questioning the referral of her medical condition to other experts
by agreeing to submit additional questions for their consideration; and
that the right to life is not absolute but must be balanced by the
State's right to prosecute and enforce the judgments of its courts, and
that petitioner's conviction in two cases is relevant along with
"humanitarian and equity" considerations.
The question for decision is whether the Sandiganbayan gravely
abused its discretion in denying petitioner's request to travel abroad
for medical treatment. After due consideration of the parties'
arguments, we find that it did not.
Respondent court had to seek expert opinion because petitioner's
motion was based on the advice of her physician. The court could not
be expected to just accept the opinion of petitioner's physician in
resolving her request for permission to travel. The subject lay beyond
its competence and since the grant of the request depended on the
verification of the claim that petitioner was suffering from a medical
condition that was alleged to be serious and life threatening, the
respondent court, we think, followed the only prudent course available
of seeking the opinion of other specialists in the field.
Indeed, when even in their own field of expertise (law) courts are
allowed to invite amici curiae to shed light on recondite points of law,
there is no reason for denying them assistance on other subjects.
Presiding Justice Garchitorena's letter to Dr. Patacsil is notable in this
regard for its sedulous concern for "greater need for information and
expert advise" to the end that respondent court may be able to

determine "whether or not it is necessary and urgent for petitioner to

travel abroad."
What would be objectionable would be if respondent court obtained
information without disclosing its source to the parties and used it in
deciding a case against them. Then the parties could justifiably
complain that their right to due process has been violated. But, in this
case, everything was on the level, with the parties taking part in the
proceedings of the court.
At all events if petitioner did not agree to the procedure adopted by
the court, her counsel should have objected when informed by the
court on January 7, 1994 that it had referred Dr. Anastacio's report to
the Philippine Heart Center for advice and opinion. Counsel did not
object. Instead, after consulting Dr. Anastacio, he requested the court
to submit additional questions for referral to the Philippine Heart
Center and later took part in cross examining Dr. Abarquez, Jr. when
the latter testified. Petitioner is thus estopped from questioning what
she now calls the "unusual and unorthodox" manner of resolving her
request for permission to travel abroad.
Now, if the respondent court disregarded the findings and
recommendations of petitioner's physician, it was because in light of
the report of the panel of experts which reviewed the findings and
recommendations of petitioner's physicians, petitioner failed to prove
the necessity for a trip abroad. It should be emphasized that
considering the fact that she is facing charges before the courts in
several cases, in two of which she was convicted although the
decision is still pending reconsideration, petitioner did not have an
absolute right to leave the country and the burden was on her to prove
that because of danger to health if not to her life there was necessity
to seek medical treatment in foreign countries. 7
Nor is there warrant for the claim that respondent court acted
arbitrarily in disregarding the findings of petitioner's physicians and
relying on the opinion of specialists from the Philippine Heart Center
because the latter did not personally examine her and for that reason
their opinion is allegedly "academic." The question raised by
petitioner's motion was not whether petitioner was suffering from a
serious and life threatening medical condition. Rather the question
before the Sandiganbayan was whether on the basis of
reports attached to the motions for travel there was evidence to show

that she was suffering from such ailments (i.e., coronary artery
disease and labile hypertension) and there was need for diagnostic
tests which could only be performed abroad. Consequently, it was
unnecessary for the Philippine Heart Center's specialists to examine
the petitioner personally. Given the findings of petitioner's own
physicians, they found that petitioner had not been shown to be
suffering from coronary artery disease and uncontrolled high blood
pressure (labile hypertension).
The claim that petitioner is suffering from a life threatening medical
condition is based on a letter dated November 4, 1993 of Dr. Roberto
V. Anastacio, cardiologist at the Makati Medical Center, to Dr. Jorge
M. Garcia, heart surgeon of the Washington Heart Institute at
Washington D.C., recommending diagnostic tests abroad for
petitioner. In his letter (marked Annex B of petitioner's first "Motion for
Leave to Travel Abroad") Dr. Anastacio claimed that petitioner
complained of chest pains; that she had an uncontrolled high blood
pressure with "a spread of 200/100-100/70;" that the ambulatory blood
pressure monitoring device showed her highest systolic BP to be from
184 to 204 mmHg at 6 P.M., 1:35 A.M. and 3 A.M., and her highest
diastolic pressure to be 120 mmHg; that an Electrocardiogram
indicated a myocardial infarction; that an Exercise-HexaMibi Tc-99m
myocardial perfusion imaging showed an "abnormal myorcardial injury
in the anterior region." Dr. Anastacio concluded:
Definitely, we have established that Mrs. Marcos is suffering
from a dangerous level of rises in blood pressure provoked by
high level of emotional stress and now complicated with a
strong evidence of myocardial injury.
Her significant family history of hypertension in her father and
siblings (eldest sister and brother) and that indeed two of them
have experienced sudden cardiac death as complicating
manifestations of uncontrolled high blood pressure of this
type place this patient in the high risk category of sudden
cardiac death. (Emphasis added)
He recommended:
Definitely, Mrs. Marcos should undergo immediate studies
[abroad] to define the following:

1. To investigate invasively (Coronary Arteriogram) to correlate

the severity of coronary obstruction and the recent
development of myocardial infarction in relation to sudden
cardiac death.
2. To do biochemical studies at the same time e.g.
Continuous-Serial Vasopressine-Arginine and Catecholamine
level determination in relation with her uncontrolled high,
dangerous level of high blood pressure not only in the
stratification of her "Sudden Death" risk staging but likewise,
equally important is the control of her uncontrolled high blood
pressure.
3. The observed sensitiveness to the drugs administered,
makes drug therapy risky without a concomittant close
monitoring of the hemodynamic and biochemical parameters
which will help avert a possible iatrogenic, fatal cardiovascular
event.
Based on these findings, Dr. Roman F. Abarquez, Jr., Dr. Homobono
B. Calleja and Dr. Romeo A. Divinagracia, however, found the
diagnosis of "definite coronary artery disease" to be "questionable" for
the following reasons:
1) The location and character of the chest pain (sharp pain
lasting for a few seconds left mid axillary and not related to
effort) is not the common presentation of pain due to coronary
artery disease (angina pectoris).
2) The Stress Test done during the Thallium Scan was
adequate (maximum predicted heart rate of 106%)and yet was
negative for ischemia.
3) The Thallium Myocardial imaging (Nuclear scan) showed
only a small questionable perfusion defect on the anterior
wall. It can also be considered as a false positive finding due
to soft tissue artifacts as mentioned in the report. (Emphasis
added)
In fact the finding that petitioner did not have ischemia 8 and that there
was only a small perfusion defect on the anterior wall which could be

considered a "false positive finding" is based on petitioner's own

nuclear medical report. 9 prepared by the Makati Medical Center,
which contains the following conclusions:
CONCLUSIONS: ABNORMAL MYOCARDIAL PERFUSION
IMAGING. EVIDENCE FOR PRIOR MYOCARDIAL INJURY
IN THE ANTERIOR REGION. THERE WAS NO EVIDENCE
FOR STRESS INDUCED MYOCARDIAL ISCHEMIA.
ALTHOUGH THESE FINDINGS ARE SUGGESTIVE OF
CORONARY ARTERY DISEASE, PHOTON ATTENUATION
SECONDARY TO SOFT TISSUE ARTIFACTS CAN BE
EXCLUDED.
As to the ambulatory blood pressure monitor reports, the Abarquez
panel noted:
The diagnosis of hypertensive heart disease is questionable.
Mrs. Marcos has transient (labile) hypertension. In the
ambulatory BP monitoring records there were only 2
transient rises of elevated systolic pressure and 3 episodes of
elevated diastolic pressure. 5 episodes of transient systolic BP
elevation and 5 episodes of transient elevated diastolic
pressure occurred in the 2nd ambulatory recording. The
patient did not submit a diary during both occasions when her
ambulatory BP recording was performed.
A patient is considered to have sustained hypertension if 30%
or more of the recorded blood pressures on ambulatory
monitoring are hypertensive levels. The term hypertensive
heart disease is used to denote heart involvement due to
effects of long standing (chronic) hypertension. There is no
evidence in the medical brief to show that there is left
ventricular hypertrophy or left ventricular dysfunction. In fact,
the previous echocardiogram was reported to be normal.
For this reason the committee questioned the need for petitioner to
have biochemical tests abroad. Even without these tests, it noted, Dr.
Anastacio had "already been treating her with medicines that are used
for hypertension and coronary heart disease."

With respect to Dr. Anastacio's claim that petitioner is in the high risk
group of sudden cardiac death, the committee stated that a history of
sudden death in the family alone will not support such a conclusion:

2) Marcos has transient elevation of blood pressure" which be

reactive to situations but there is no evidence to indicate the
presence of hypertensive heart disease.

The known direct determinants for sudden cardiac death are:

(1) ventricular electrical instability (ventricular arrhytmias), (2)
extensive coronary artery narrowing, (3) abnormal left
ventricular function, (4) electrocardiographic conduction and
repolarization abnormalities.

3) The tests we have recommended are available in the

Philippines. Proper treatment can be given to Mrs. Marcos
even in the absence of the suggested biochemical tests.
(Emphasis added)

In the absence of the above factors for sudden cardiac death,

the presence of a family history of sudden cardiac
death alone cannot stand as a strong argument for a high risk
of sudden cardiac death. Even the family history of sudden
cardiac death in this case is still questionable since we are not
furnished with definite evidence that the said members of the
family actually died of sudden death.
In summary, the evidence submitted do not confirm the
allegation that Mrs. Marcos is in the high risk group for sudden
cardiac death. (Emphases added)

4) The present facilities and expertise in the Philippines are

more than adequate to diagnose and treat patients with
hypertension and/or coronary heart disease. (Emphasis
added)
Dr. Abarquez, Jr. testified on January 26, 1994 on the report of his
committee. Dr. Anastacio was present at that hearing, but he did not
refute Dr. Abarquez, Jr.'s conclusions. Instead it appears that he
performed the tests recommended by the committee, namely:
1) Coronary Angiography to definitely establish the
presence or absence of coronary artery obstruction and
severity of the disease.

The group made the following conclusions and recommendations:

RECOMMENDED TESTS:
1) Coronary Angiography to definitely establish the
presence or absence of coronary artery obstruction and
severity of the disease.

2) 2-D Echo Doppler Echocardiography to demonstrate the

presence of ventricular dysfunction or hypertrophy.
3) Ambulatory Holter Monitoring to find out whether serious
arrhythmias (irregularities of heart beat) are present or not.
The results, as the Sandiganbayan said in its resolution, were:

2) 2-D Echo Doppler Echocardlography to demonstrate the

presence of ventricular dysfunction or hypertrophy.
3) Ambulatory Holter Monitoring to find out whether serious
arrhythmias (irregularities of heart beat) are present or not.

Dr. Roberto Anastacio, accused Marcos' attending physician,

appears to have subsequently subjected accused Marcos to
another set of tests during her latest confinement at the Makati
Medical Center, principally the Echo Doppler Test and the
Holter 24-hour monitoring test.

CONCLUSIONS:
1) The diagnosis or significant coronary heart disease
is not confirmed from the brief presented.

The 2-D Echo Doppler test, which the Committee of

Cardiologists recommended was administered on February 1,
1994 (Exhibit "D-Supplemental") and all findings read normal.

Dr. Anastacio said that the handwritten notes of Drs. Dy and

Lapitan who had read the results of the Ambulatory Hotter
Monitor, i.e., an ambulant electrocardiogram, and the readings
did not show that there was anything wrong with accused
Marcos. In fact, the readings themselves said that the average
pulse rate was at 68 beats per minute (from 50 to 134) no
blockages, no PVCs, no PACs, no indication of arrythmia.
It would appear that earlier on January 31, 1994, petitioner had also
undergone electrocardiogram tests at the Makati Medical Center in
which cardiologists are rotated to do the readings. Dr. Esperanza
Cabral found the electrocardiogram results to be "Normal." The
results of the echocardiogram were read by another cardiologist, Dr.
Adoracion Nambuyan-Abad, and her finding was approved by Dr.
Benjamin N. Alimurong. The results were also "Normal."
Although Dr.
Anastacio subsequently conducted another
electrocardiogram test on petitioner and found the existence of
myocardial infarction, as the Sandiganbayan noted, Dr. Anastacio's
finding was not read or concurred in by another cardiologist, contrary
to the procedure followed at the Makati Medical Center. 10 It is,
therefore, also questionable.
The evidence submitted to it, according to the Abarquez committee,
"[did] not confirm the allegation that Mrs. Marcos is in the high risk
group of sudden cardiac death." Perhaps the best proof that she
is not in the group is the fact that she ran in the last election for a seat
in the House of Representative and won. It may be assumed that she
waged an arduous political campaign but apparently is none the
worse for it.
Considering the foregoing we cannot say that respondent court trifled
with petitioner's constitutionally guaranteed right to life, health and
liberty. What petitioner denounces as the "unusual and unorthodox
conduct of the trial" by the court's Presiding Justice owed more, it
would seem, from the latter's robust and rather active personality
rather than to any ill motive or hostility he entertained toward
petitioner, the latter's counsel or her witnesses. It is matter of record
that on three different occasions, petitioner had been permitted to
travel abroad. But her later conviction in two cases dictated the need
for greater caution. To be sure, conviction is not yet final view of a
motion for reconsideration filed by petitioner. But a person's right to

travel is subject to the usual contraints imposed by the very necessity

of safeguarding the system of justice. In such cases, whether the
accused should be permitted to leave the jurisdiction for humanitarian
reason is a matter of the court's sound discretion.
The active intervention of respondent Presiding Justice in the trial the
case was justified by the fact that the subject with which the court was
dealing was a highly technical one and he wanted to clarify for himself
a number of medical question. That a judge has the power if not
indeed a duty to do this teaching of People v.Obngayan; 11
There are obviously certain rights to the trier of facts due to the
nature of (a judge's) function. Among these is the right to
question a witness with a view to satisfying his mind upon a
material point which present itself during the trial as to the
credibility of such witness.
This Court quoted the following
opinion Ventura v. Judge Yatco: 12

from

Justice

Labrador's

While judges should as much as possible refrain from showing

partiality to one party and hostility to another, it does not mean
that a trial judge should keep mum throughout the trial and
allow parties to ask the questions that they desire, on issues
which they think are the important issues, when the former are
improper and the latter, immaterial. If trials are to be
expedited, judges must take a leading part therein, by directing
counsel to submit the evidence on the facts in the dispute by
asking clarifying questions, and by showing an interest in a
fast and fair trial. Judges are not mere referees like those of a
boxing bout, only to watch and decide the result of a game;
they should have as much interest as counsel in the orderly
and expeditious presentation of evidence, calling attention of
counsel to point at issue that are overlooked, directing them to
ask the question that would elicit the fact on the issues
involved, clarifying ambiguous remarks by witnesses, etc.
Unless they take an active part in trials in the above form and
manner, and allow counsel to ask questions whether pertinent
or impertinent, material or immaterial, the speedy
administration of justice which is the aim of the Government
and of the people cannot be attained. Counsel should,
therefore, not resent any interest that the judge takes in the

conduct of the trial, they should be glad that a trial judge takes
such interest and help in the determination of truth.
The active participation of respondent court in examining petitioner's
witnesses in the case merely indicated the court's deep concern with
the truth of petitioner's medical condition.
What perhaps should have been done was for petitioner to request an
examination of her medical condition by a joint team of cardiologist
and other medical experts instead of having the findings of her
physician reviewed by the other specialists. A joint investigation will
have the advantage of not being unduly adversarial since the purpose
is the common objective of arriving at a consensus among the
experts.
It is not late for the petitioner to ask for this. She can file another
motion before the Sandiganbayan. This observation is made because
after the petitioner in the case had been filed, petitioner filed a motion
for leave to travel, this time on the ground that she is suffering from a
difficult type of glaucoma which threatens to make her blind. Her
motion is supported by a medical certificate of Dr. Manuel B. Agulto,
opthalmologist and glaucoma expert, who recommends that petitioner
see Dr. Richard J. Simmons of Boston, Massachusetts, and avail
herself of his "internationally renowned expertise and recognized
authority in this particularly difficult glaucoma type." 13 Dr. Agulto's
certificate states:
This certifies that above patient has been treated by the
undersigned by since 1980 for Low Tension Glaucoma which
was initially diagnosed by Richard J. Simmons, M.D. of Harvad
Medical School and New England Glaucoma Research
Foundation of Boston, Massachussetts.
Since then the patient has been monitored closely to prevent
irreversible visual field and acuity loss. Lately we have noted a
progression of her visual field changes.
Latest pertinent clinical findings (as of April 19, 1994) include
the following:

Corrected
Vision:
20/20,
Jaeger
1
Automated Visual field: positive paracentral depression, both
eyes (April 11, 1994, copies of result appended)
Tensions: (Diurnal Range) 13-15mm Hg, right eye
13-16mm
Hg,
left
eye
Disc: Cupping of 0.6-0.7, both eyes
Remarks:
We suggest that the patient see her primary eye physician in
Boston so as to avail herself of his internationally renowned
expertise and recognized authority in this particularly difficult
glaucoma type.
Considering the irreversible nature of glaucoma blindness and
the documented progression of her field changes plus
additional and strong clinical evidence of the unrelenting
course of visual loss as was recently documented in a younger
brother and patient, Alfredo T. Romualdez, who was recently
declared legally blind from the same familial glaucoma, we
urge Mrs. Marcos who is much older and therefore at greater
risk, to consult immediate Dr. Simmons so as to delay if not
prevent the onset of very real and absolute blindness.
This motion should be addressed to the Sandiganbayan not only
because whether petitioner should be allowed to leave the country is
its primary concern but also because the determination of petitioner's
eye condition is question of fact to be made in the first instance by the
Sandiganbayan. The court should order a joint examination of
petitioner's eye condition and resolve her motion accordingly.
WHEREFORE, the petitioner is DISMISSED without prejudice to the
filling of another motion for leave to travel abroad, should petitioner
still desire, based on her heart condition. In such an event the
determination of her medical condition should be made by joint panel
of medical specialists recommended by both the accused and the
prosecution.
Petitioner's motion for leave to travel for medical treatment of her
alleged failing eyesight is hereby referred to the Sandiganbayan with
directive to the latter to appoint a joint panel of eye specialists as
outlined above.

SO ORDERED.
G.R. No. 168338

February 15, 2008

FRANCISCO
CHAVEZ, petitioner,
vs.
RAUL M. GONZALES, in his capacity as the Secretary of the
Department of Justice; and NATIONAL TELECOMMUNICATIONS
COMMISSION (NTC), respondents.
DECISION
PUNO, C.J.:
A. Precis
In this jurisdiction, it is established that freedom of the press is crucial
and so inextricably woven into the right to free speech and free
expression, that any attempt to restrict it must be met with an
examination so critical that only a danger that is clear and present
would be allowed to curtail it.
Indeed, we have not wavered in the duty to uphold this cherished
freedom. We have struck down laws and issuances meant to curtail
this right, as in Adiong v. COMELEC,1 Burgos v. Chief of Staff,2 Social
Weather Stations v. COMELEC,3 and Bayan v. Executive Secretary
Ermita.4 When on its face, it is clear that a governmental act is nothing
more than a naked means to prevent the free exercise of speech, it
must be nullified.
B. The Facts
1. The case originates from events that occurred a year after the 2004
national and local elections. On June 5, 2005, Press Secretary
Ignacio Bunye told reporters that the opposition was planning to
destabilize the administration by releasing an audiotape of a mobile
phone conversation allegedly between the President of the
Philippines, Gloria Macapagal Arroyo, and a high-ranking official of
the Commission on Elections (COMELEC). The conversation was
audiotaped
allegedly
through
wire-tapping.5 Later,
in
a Malacaang press briefing, Secretary Bunye produced two versions

of the tape, one supposedly the complete version, and the other, a
spliced, "doctored" or altered version, which would suggest that the
President had instructed the COMELEC official to manipulate the
election results in the Presidents favor. 6 It seems that Secretary
Bunye admitted that the voice was that of President Arroyo, but
subsequently made a retraction. 7
2. On June 7, 2005, former counsel of deposed President Joseph
Estrada, Atty. Alan Paguia, subsequently released an alleged
authentic tape recording of the wiretap. Included in the tapes were
purported conversations of the President, the First Gentleman Jose
Miguel Arroyo, COMELEC Commissioner Garcillano, and the late
Senator Barbers.8
3. On June 8, 2005, respondent Department of Justice (DOJ)
Secretary Raul Gonzales warned reporters that those who had copies
of the compact disc (CD) and those broadcasting or publishing its
contents could be held liable under the Anti-Wiretapping Act. These
persons included Secretary Bunye and Atty. Paguia. He also stated
that persons possessing or airing said tapes were committing a
continuing offense, subject to arrest by anybody who had personal
knowledge if the crime was committed or was being committed in their
presence.9
4. On June 9, 2005, in another press briefing, Secretary Gonzales
ordered the National Bureau of Investigation (NBI) to go after
media organizations "found to have caused the spread, the playing
and the printing of the contents of a tape" of an alleged wiretapped
conversation involving the President about fixing votes in the 2004
national elections. Gonzales said that he was going to start
with Inq7.net, a joint venture between the Philippine Daily Inquirer
and GMA7 television network, because by the very nature of the
Internet medium, it was able to disseminate the contents of the tape
more widely. He then expressed his intention of inviting the editors
and managers of Inq7.net and GMA7 to a probe, and supposedly
declared, "I [have] asked the NBI to conduct a tactical interrogation of
all concerned." 10
5. On June 11, 2005, the NTC issued this press release: 11
NTC GIVES FAIR WARNING TO RADIO AND TELEVISION
OWNERS/OPERATORS TO OBSERVE ANTI-WIRETAPPING

LAW AND PERTINENT

STANDARDS

CIRCULARS

ON

PROGRAM

explicitly states, among others, that "all radio broadcasting and

television stations shall, during any broadcast or telecast, cut
off from the air the speech, play, act or scene or other matters
being broadcast or telecast the tendency thereof is to
disseminate false information or such other willful
misrepresentation, or to propose and/or incite treason,
rebellion or sedition." The foregoing directive had been
reiterated by NTC Memorandum Circular No. 22-89, which, in
addition thereto, prohibited radio, broadcasting and television
stations from using their stations to broadcast or telecast any
speech, language or scene disseminating false information or
willful misrepresentation, or inciting, encouraging or assisting
in subversive or treasonable acts.

xxx xxx xxx

Taking into consideration the countrys unusual situation, and
in order not to unnecessarily aggravate the same, the
NTC warns all radio stations and television network
owners/operators that the conditions of the authorization and
permits issued to them by Government like the Provisional
Authority and/or Certificate of Authority explicitly provides that
said companies shall not use [their] stations for the
broadcasting or telecasting of false information or willful
misrepresentation. Relative thereto, it has come to the
attention of the [NTC] that certain personalities are in
possession of alleged taped conversations which they claim
involve the President of the Philippines and a Commissioner of
the COMELEC regarding supposed violation of election laws.
These personalities have admitted that the taped
conversations are products of illegal wiretapping operations.
Considering that these taped conversations have not been
duly authenticated nor could it be said at this time that the
tapes contain an accurate or truthful representation of what
was recorded therein, it is the position of the [NTC] that the
continuous airing or broadcast of the said taped conversations
by radio and television stations is a continuing violation of the
Anti-Wiretapping Law and the conditions of the Provisional
Authority and/or Certificate of Authority issued to these radio
and television stations. It has been subsequently established
that the said tapes are false and/or fraudulent after a
prosecution or appropriate investigation, the concerned radio
and television companies are hereby warned that their
broadcast/airing of such false information and/or willful
misrepresentation shall be just cause for the suspension,
revocation and/or cancellation of the licenses or
authorizations issued to the said companies.
In addition to the above, the [NTC] reiterates the pertinent
NTC circulars on program standards to be observed by radio
and television stations. NTC Memorandum Circular 111-12-85

The [NTC] will not hesitate, after observing the

requirements of due process, to apply with full force the
provisions of said Circulars and their accompanying
sanctions on erring radio and television stations and their
owners/operators.
6. On June 14, 2005, NTC held a dialogue with the Board of
Directors of the Kapisanan ng mga Brodkaster sa Pilipinas
(KBP). NTC allegedly assured the KBP that the press release did not
violate the constitutional freedom of speech, of expression, and of the
press, and the right to information. Accordingly, NTC and KBP issued
a Joint Press Statement which states, among others, that: 12

NTC respects and will not hinder freedom of the press and the
right to information on matters of public concern. KBP & its
members have always been committed to the exercise of
press freedom with high sense of responsibility and discerning
judgment of fairness and honesty.
NTC did not issue any MC [Memorandum Circular] or Order
constituting a restraint of press freedom or censorship. The
NTC further denies and does not intend to limit or restrict the
interview of members of the opposition or free expression of
views.
What is being asked by NTC is that the exercise of press
freedom [be] done responsibly.
KBP has program standards that KBP members will observe in
the treatment of news and public affairs programs. These

include verification of sources, non-airing of materials that

would constitute inciting to sedition and/or rebellion.
The KBP Codes also require that no false statement or willful
misrepresentation is made in the treatment of news or
commentaries.
The supposed wiretapped tapes should be treated with
sensitivity and handled responsibly giving due consideration to
the process being undertaken to verify and validate the
authenticity and actual content of the same."

C. The Petition
Petitioner Chavez filed a petition under Rule 65 of the Rules of Court
against respondents Secretary Gonzales and the NTC, "praying for
the issuance of the writs of certiorari and prohibition, as extraordinary
legal remedies, to annul void proceedings, and to prevent the
unlawful, unconstitutional and oppressive exercise of authority by the
respondents."13
Alleging that the acts of respondents are violations of the freedom on
expression and of the press, and the right of the people to information
on matters of public concern,14 petitioner specifically asked this Court:
[F]or [the] nullification of acts, issuances, and orders of
respondents committed or made since June 6, 2005 until the
present that curtail the publics rights to freedom of expression
and of the press, and to information on matters of public
concern specifically in relation to information regarding the
controversial taped conversion of President Arroyo and for
prohibition of the further commission of such acts, and making
of such issuances, and orders by respondents. 15
16

Respondents denied that the acts transgress the Constitution, and

questioned petitioners legal standing to file the petition. Among the
arguments they raised as to the validity of the "fair warning" issued by
respondent NTC, is that broadcast media enjoy lesser constitutional
guarantees compared to print media, and the warning was issued
pursuant to the NTCs mandate to regulate the telecommunications
industry. 17 It was also stressed that "most of the [television] and radio
stations continue, even to this date, to air the tapes, but of late within
the parameters agreed upon between the NTC and KBP." 18

D. The Procedural Threshold: Legal Standing

To be sure, the circumstances of this case make the constitutional
challenge peculiar. Petitioner, who is not a member of the broadcast
media, prays that we strike down the acts and statements made by
respondents as violations of the right to free speech, free expression
and a free press. For another, the recipients of the press statements
have not come forwardneither intervening nor joining petitioner in
this action. Indeed, as a group, they issued a joint statement with
respondent NTC that does not complain about restraints on freedom
of the press.
It would seem, then, that petitioner has not met the requisite legal
standing, having failed to allege "such a personal stake in the
outcome of the controversy as to assure that concrete adverseness
which sharpens the presentation of issues upon which the Court so
largely depends for illumination of difficult constitutional questions." 19
But as early as half a century ago, we have already held that where
serious constitutional questions are involved, "the transcendental
importance to the public of these cases demands that they be settled
promptly and definitely, brushing aside if we must, technicalities of
procedure." 20 Subsequently, this Court has repeatedly and
consistently refused to wield procedural barriers as impediments to its
addressing and resolving serious legal questions that greatly impact
on public interest,21 in keeping with the Court's duty under the 1987
Constitution to determine whether or not other branches of
government have kept themselves within the limits of the Constitution
and the laws and that they have not abused the discretion given to
them.
Thus, in line with the liberal policy of this Court on locus standi when a
case involves an issue of overarching significance to our society,22 we
therefore brush aside technicalities of procedure and take cognizance
of this petition,23 seeing as it involves a challenge to the most exalted
of all the civil rights, the freedom of expression.The petition raises
other issues like the extent of the right to information of the
public. It is fundamental, however, that we need not address all
issues but only the most decisive one which in the case at bar is
whether the acts of the respondents abridge freedom of speech
and of the press.

But aside from the primordial issue of determining whether free

speech and freedom of the press have been infringed, the case
at bar also gives this Court the opportunity: (1) to distill the
essence of freedom of speech and of the press now beclouded
by the vagaries of motherhood statements; (2) to clarify the
types of speeches and their differing restraints allowed by law;
(3) to discuss the core concepts of prior restraint, contentneutral and content-based regulations and their constitutional
standard of review; (4) to examine the historical difference in the
treatment of restraints between print and broadcast media and
stress the standard of review governing both; and (5) to call
attention to the ongoing blurring of the lines of distinction
between print and broadcast media.

freedoms.30 For it is only when the people have unbridled access to

information and the press that they will be capable of rendering
enlightened judgments. In the oft-quoted words of Thomas Jefferson,
we cannot both be free and ignorant.
E.1. Abstraction of Free Speech
Surrounding the freedom of speech clause are various concepts that
we have adopted as part and parcel of our own Bill of Rights provision
on this basic freedom.31 What is embraced under this provision was
discussed exhaustively by the Court in Gonzales v. Commission on
Elections, 32 in which it was held:

No law shall be passed abridging the freedom of speech, of

expression, or of the press, or the right of the people
peaceably to assemble and petition the government for
redress of grievances.24

At the very least, free speech and free press may be

identified with the liberty to discuss publicly and truthfully any
matter of public interest without censorship and punishment.
There is to be no previous restraint on the communication of
views or subsequent liability whether in libel suits, prosecution
for sedition, or action for damages, or contempt proceedings
unless there be a clear and present danger of substantive evil
that Congress has a right to prevent. 33

Freedom of expression has gained recognition as a fundamental

principle of every democratic government, and given a preferred right
that stands on a higher level than substantive economic freedom or
other liberties. The cognate rights codified by Article III, Section 4 of
the Constitution, copied almost verbatim from the First Amendment of
the U.S. Bill of Rights,25 were considered the necessary consequence
of republican institutions and the complement of free speech.26 This
preferred status of free speech has also been codified at the
international level, its recognition now enshrined in international law
as a customary norm that binds all nations.27

Gonzales further explained that the vital need of a constitutional

democracy for freedom of expression is undeniable, whether as a
means of assuring individual self-fulfillment; of attaining the truth; of
assuring participation by the people in social, including political,
decision-making; and of maintaining the balance between stability and
change.34 As early as the 1920s, the trend as reflected in Philippine
and American decisions was to recognize the broadest scope and
assure the widest latitude for this constitutional guarantee. The trend
represents a profound commitment to the principle that debate on
public issue should be uninhibited, robust, and wide-open. 35

In the Philippines, the primacy and high esteem accorded freedom of

expression is a fundamental postulate of our constitutional
system. 28 This right was elevated to constitutional status in the 1935,
the 1973 and the 1987 Constitutions, reflecting our own lesson of
history, both political and legal, that freedom of speech is an
indispensable condition for nearly every other form of
freedom.29 Moreover, our history shows that the struggle to protect the
freedom of speech, expression and the press was, at bottom, the
struggle for the indispensable preconditions for the exercise of other

Freedom of speech and of the press means something more than the
right to approve existing political beliefs or economic arrangements, to
lend support to official measures, and to take refuge in the existing
climate of opinion on any matter of public consequence.36 When
atrophied, the right becomes meaningless.37 The right belongs as well
-- if not more to those who question, who do not conform, who
differ.38 The ideas that may be expressed under this freedom are
confined not only to those that are conventional or acceptable to the
majority. To be truly meaningful, freedom of speech and of the press

E. Re-examining The law

of expression and of the press

on

freedom

of

speech,

should allow and even encourage the articulation of the unorthodox

view, though it be hostile to or derided by others; or though such view
"induces a condition of unrest, creates dissatisfaction with conditions
as they are, or even stirs people to anger."39 To paraphrase Justice
Holmes, it is freedom for the thought that we hate, no less than for the
thought that agrees with us. 40
The scope of freedom of expression is so broad that it extends
protection to nearly all forms of communication. It protects speech,
print and assembly regarding secular as well as political causes, and
is not confined to any particular field of human interest. The protection
covers myriad matters of public interest or concern embracing all
issues, about which information is needed or appropriate, so as to
enable members of society to cope with the exigencies of their period.
The constitutional protection assures the broadest possible exercise
of free speech and free press for religious, political, economic,
scientific, news, or informational ends, inasmuch as the Constitution's
basic guarantee of freedom to advocate ideas is not confined to the
expression of ideas that are conventional or shared by a majority.
The constitutional protection is not limited to the exposition of ideas.
The protection afforded free speech extends to speech or publications
that are entertaining as well as instructive or informative. Specifically,
in Eastern Broadcasting Corporation (DYRE) v. Dans,41 this Court
stated that all forms of media, whether print or broadcast, are entitled
to the broad protection of the clause on freedom of speech and of
expression.
While all forms of communication are entitled to the broad protection
of freedom of expression clause, the freedom of film, television and
radio broadcasting is somewhat lesser in scope than the
freedom accorded to newspapers and other print media, as will
be subsequently discussed.
E.2. Differentiation: The Limits & Restraints of Free Speech
From the language of the specific constitutional provision, it would
appear that the right to free speech and a free press is not susceptible
of any limitation. But the realities of life in a complex society preclude
a literal interpretation of the provision prohibiting the passage of a law
that would abridge such freedom. For freedom of expression is not an
absolute, 42 nor is it an "unbridled license that gives immunity for every

possible use of language and prevents the punishment of those who

abuse this freedom."
Thus, all speech are not treated the same. Some types of speech
may be subjected to some regulation by the State under its pervasive
police power, in order that it may not be injurious to the equal right of
others or those of the community or society.43 The difference in
treatment is expected because the relevant interests of one type of
speech, e.g., political speech, may vary from those of
another, e.g., obscene speech. Distinctions have therefore been
made in the treatment, analysis, and evaluation of the permissible
scope of restrictions on various categories of speech. 44 We have
ruled, for example, that in our jurisdiction slander or libel, lewd and
obscene speech, as well as "fighting words" are not entitled to
constitutional protection and may be penalized.45
Moreover, the techniques of reviewing alleged restrictions on speech
(overbreadth, vagueness, and so on) have been applied differently to
each category, either consciously or unconsciously. 46 A study of free
speech jurisprudencewhether here or abroadwill reveal that
courts have developed different tests as to specific types or
categories of speech in concrete situations; i.e., subversive speech;
obscene speech; the speech of the broadcast media and of the
traditional print media; libelous speech; speech affecting associational
rights; speech before hostile audiences; symbolic speech; speech that
affects the right to a fair trial; and speech associated with rights of
assembly and petition. 47
Generally, restraints on freedom of speech and expression are
evaluated by either or a combination of three tests,i.e., (a)
the dangerous tendency doctrine which permits limitations on
speech once a rational connection has been established between the
speech restrained and the danger contemplated; 48 (b) the balancing
of interests tests, used as a standard when courts need to balance
conflicting social values and individual interests, and requires a
conscious and detailed consideration of the interplay of interests
observable in a given situation of type of situation; 49 and (c) the clear
and present danger rule which rests on the premise that speech
may be restrained because there is substantial danger that the
speech will likely lead to an evil the government has a right to prevent.
This rule requires that the evil consequences sought to be prevented

must be substantive, "extremely serious and the degree of imminence

extremely high." 50
As articulated in our jurisprudence, we have applied either
the dangerous tendency doctrine or clear and present danger
test to resolve free speech challenges. More recently, we have
concluded that we have generally adhered to the clear and present
danger test. 51
E.3. In Focus: Freedom of the Press
Much has been written on the philosophical basis of press freedom as
part of the larger right of free discussion and expression. Its practical
importance, though, is more easily grasped. It is the chief source of
information on current affairs. It is the most pervasive and perhaps
most powerful vehicle of opinion on public questions. It is the
instrument by which citizens keep their government informed of their
needs, their aspirations and their grievances. It is the sharpest
weapon in the fight to keep government responsible and efficient.
Without a vigilant press, the mistakes of every administration would
go uncorrected and its abuses unexposed. As Justice Malcolm wrote
inUnited States v. Bustos:52
The interest of society and the maintenance of good government
demand a full discussion of public affairs. Complete liberty to
comment on the conduct of public men is a scalpel in the case of free
speech. The sharp incision of its probe relieves the abscesses of
officialdom. Men in public life may suffer under a hostile and unjust
accusation; the wound can be assuaged with the balm of clear
conscience.
Its contribution to the public weal makes freedom of the press
deserving of extra protection. Indeed, the press benefits from certain
ancillary rights. The productions of writers are classified as intellectual
and proprietary. Persons who interfere or defeat the freedom to write
for the press or to maintain a periodical publication are liable for
damages, be they private individuals or public officials.
E.4. Anatomy of Restrictions: Prior Restraint, Content-Neutral
and Content-Based Regulations

Philippine jurisprudence, even as early as the period under the 1935

Constitution, has recognized four aspects of freedom of the press.
These are (1) freedom from prior restraint; (2) freedom from
punishment subsequent to publication; 53 (3) freedom of access to
information; 54 and (4) freedom of circulation.55
Considering that petitioner has argued that respondents press
statement constitutes a form of impermissible prior restraint, a closer
scrutiny of this principle is in order, as well as its sub-specie of
content-based (as distinguished from content-neutral) regulations.
At this point, it should be noted that respondents in this case deny that
their acts constitute prior restraints. This presents a unique tinge to
the present challenge, considering that the cases in our jurisdiction
involving prior restrictions on speech never had any issue of whether
the governmental act or issuance actually constituted prior restraint.
Rather, the determinations were always about whether the restraint
was justified by the Constitution.
Be that as it may, the determination in every case of whether there is
an impermissible restraint on the freedom of speech has always been
based on the circumstances of each case, including the nature of the
restraint. And in its application in our jurisdiction, the parameters
of this principle have been etched on a case-to-case basis,
always tested by scrutinizing the governmental issuance or act
against the circumstances in which they operate, and then
determining the appropriate test with which to evaluate.
Prior restraint refers to official governmental restrictions on the press
or other forms of expression in advance of actual publication or
dissemination.56 Freedom from prior restraint is largely freedom from
government censorship of publications, whatever the form of
censorship, and regardless of whether it is wielded by the executive,
legislative or judicial branch of the government. Thus, it precludes
governmental acts that required approval of a proposal to publish;
licensing or permits as prerequisites to publication including the
payment of license taxes for the privilege to publish; and even
injunctions against publication. Even the closure of the business and
printing offices of certain newspapers, resulting in the discontinuation
of their printing and publication, are deemed as previous restraint or
censorship. 57 Any law or official that requires some form of
permission to be had before publication can be made, commits an

infringement of the constitutional right, and remedy can be had at the

courts.

of speech & expression] is no greater than is essential to the

furtherance of that interest. 64

Given that deeply ensconced in our fundamental law is the hostility

against all prior restraints on speech, and any act that restrains
speech is presumed invalid,58 and "any act that restrains speech is
hobbled by the presumption of invalidity and should be greeted with
furrowed brows," 59 it is important to stress not all prior restraints on
speech are invalid. Certain previous restraints may be permitted
by the Constitution, but determined only upon a careful evaluation of
the challenged act as against the appropriate test by which it should
be measured against.

On the other hand, a governmental action that restricts freedom of

speech or of the press based on content is given the strictest
scrutiny in light of its inherent and invasive impact. Only when the
challenged act has overcome the clear and present danger rule will
it pass constitutional muster,65 with the government having the burden
of overcoming the presumed unconstitutionality.

Hence, it is not enough to determine whether the challenged act

constitutes some form of restraint on freedom of speech. A distinction
has to be made whether the restraint is (1) a contentneutral regulation, i.e., merely concerned with the incidents of the
speech, or one that merely controls the time, place or manner, and
under well defined standards;60 or (2) a content-based restraint or
censorship, i.e., the restriction is based on the subject matter of the
utterance or speech. 61 The cast of the restriction determines the test
by which the challenged act is assayed with.

With respect to content-based restrictions, the government must also

show the type of harm the speech sought to be restrained would bring
about especially the gravity and the imminence of the threatened
harm otherwise the prior restraint will be invalid. Prior restraint on
speech based on its content cannot be justified by hypothetical fears,
"but only by showing a substantive and imminent evil that has taken
the life of a reality already on ground."67 As formulated, "the question
in every case is whether the words used are used in such
circumstances and are of such a nature as to create a clear and
present danger that they will bring about the substantive evils that
Congress has a right to prevent. It is a question of proximity and
degree."68

When the speech restraints take the form of a content-neutral

regulation, only a substantial governmental interest is required for its
validity.62 Because regulations of this type are not designed to
suppress any particular message, they are not subject to the strictest
form of judicial scrutiny but an intermediate approachsomewhere
between the mere rationality that is required of any other law and the
compelling
interest
standard
applied
to
content-based
restrictions.63 The test is called intermediate because the Court will
not merely rubberstamp the validity of a law but also require that the
restrictions be narrowly-tailored to promote an important or significant
governmental interest that is unrelated to the suppression of
expression. The intermediate approach has been formulated in this
manner:
A governmental regulation is sufficiently justified if it is within
the constitutional power of the Government, if it furthers an
important or substantial governmental interest; if the
governmental interest is unrelated to the suppression of free
expression; and if the incident restriction on alleged [freedom

Unless the government can overthrow this presumption, the contentbased restraint will be struck down.66

The regulation which restricts the speech content must also serve an
important or substantial government interest, which is unrelated to the
suppression of free expression. 69
Also, the incidental restriction on speech must be no greater than
what is essential to the furtherance of that interest. 70 A restriction that
is so broad that it encompasses more than what is required to satisfy
the governmental interest will be invalidated. 71 The regulation,
therefore, must be reasonable and narrowly drawn to fit the regulatory
purpose, with the least restrictive means undertaken. 72
Thus, when the prior restraint partakes of a content-neutral
regulation, it is subjected to an intermediate review. A content-based
regulation,73 however, bears a heavy presumption of invalidity and is
measured against the clear and present danger rule. The latter will

pass constitutional muster only if justified by a compelling reason, and

the restrictions imposed are neither overbroad nor vague. 74
Applying the foregoing, it is clear that the challenged acts in the case
at bar need to be subjected to the clear and present danger rule, as
they are content-based restrictions. The acts of respondents
focused solely on but one objecta specific content fixed as these
were on the alleged taped conversations between the President and a
COMELEC official. Undoubtedly these did not merely provide
regulations as to the time, place or manner of the dissemination of
speech or expression.
E.5. Dichotomy of Free Press: Print v. Broadcast Media
Finally, comes respondents argument that the challenged act is valid
on the ground that broadcast media enjoys free speech rights that are
lesser in scope to that of print media. We next explore and test the
validity of this argument, insofar as it has been invoked to validate a
content-based restriction on broadcast media.
The regimes presently in place for each type of media differ from
one other. Contrasted with the regime in respect of books,
newspapers, magazines and traditional printed matter, broadcasting,
film and video have been subjected to regulatory schemes.
The dichotomy between print and broadcast media traces its origins in
the United States. There, broadcast radio and television have been
held to have limited First Amendment protection,75 and U.S. Courts
have excludedbroadcast media from the application of the "strict
scrutiny" standard that they would otherwise apply to content-based
restrictions.76 According to U.S. Courts, the three major reasons why
broadcast media stands apart from print media are: (a) the scarcity of
the frequencies by which the medium operates [i.e., airwaves are
physically limited while print medium may be limitless]; 77 (b) its
"pervasiveness" as a medium; and (c) its unique accessibility to
children.78 Because cases involving broadcast media need not follow
"precisely the same approach that [U.S. courts] have applied to other
media," nor go "so far as to demand that such regulations serve
compelling government interests,"79 they are decided on whether
the "governmental restriction" is narrowly tailored to further a
substantial governmental interest,"80 or the intermediate test.

As pointed out by respondents, Philippine jurisprudence has also

echoed a differentiation in treatment between broadcast and print
media. Nevertheless, a review of Philippine case law on
broadcast media will show thatas we have deviated with the
American conception of the Bill of Rights81 we likewise did not
adopt en masse the U.S. conception of free speech as it relates to
broadcast media, particularly as to which test would govern
content-based prior restraints.
Our cases show two distinct features of this dichotomy. First, the
difference in treatment, in the main, is in the regulatory scheme
applied to broadcast media that is not imposed on traditional print
media, and narrowly confined to unprotected speech (e.g., obscenity,
pornography, seditious and inciting speech), or is based on a
compelling government interest that also has constitutional protection,
such as national security or the electoral process.
Second, regardless of the regulatory schemes that broadcast media
is subjected to, the Court has consistently held that the clear and
present danger test applies to content-based restrictions on media,
without making a distinction as to traditional print or broadcast media.
The distinction between broadcast and traditional print media was first
enunciated in Eastern Broadcasting Corporation (DYRE) v.
Dans,82 wherein it was held that "[a]ll forms of media, whether print or
broadcast, are entitled to the broad protection of the freedom of
speech and expression clause. The test for limitations on freedom of
expression continues to be the clear and present danger rule"83
Dans was a case filed to compel the reopening of a radio station
which had been summarily closed on grounds of national security.
Although the issue had become moot and academic because the
owners were no longer interested to reopen, the Court still proceeded
to do an analysis of the case and made formulations to serve as
guidelines for all inferior courts and bodies exercising quasi-judicial
functions. Particularly, the Court made a detailed exposition as to
what needs be considered in cases involving broadcast media.
Thus:84
xxx xxx xxx

(3) All forms of media, whether print or broadcast, are entitled

to the broad protection of the freedom of speech and
expression clause. The test for limitations on freedom of
expression continues to be the clear and present danger
rule, that words are used in such circumstances and are of
such a nature as to create a clear and present danger that
they will bring about the substantive evils that the lawmaker
has a right to prevent, In his Constitution of the
Philippines (2nd Edition, pp. 569-570) Chief Justice Enrique M.
Fernando cites at least nine of our decisions which apply the
test. More recently, the clear and present danger test was
applied in J.B.L. Reyes in behalf of the Anti-Bases Coalition v.
Bagatsing. (4) The clear and present danger test, however,
does not lend itself to a simplistic and all embracing
interpretation applicable to all utterances in all forums.
Broadcasting has to be licensed. Airwave frequencies have to
be allocated among qualified users. A broadcast corporation
cannot simply appropriate a certain frequency without regard
for government regulation or for the rights of others.
All forms of communication are entitled to the broad protection
of the freedom of expression clause. Necessarily, however,
the freedom of television and radio broadcasting is somewhat
lesser in scope than the freedom accorded to newspaper and
print media.
The American Court in Federal Communications Commission
v. Pacifica Foundation (438 U.S. 726), confronted with a
patently offensive and indecent regular radio program,
explained why radio broadcasting, more than other forms of
communications, receives the most limited protection from the
free expression clause. First, broadcast media have
established a uniquely pervasive presence in the lives of all
citizens, Material presented over the airwaves confronts the
citizen, not only in public, but in the privacy of his home.
Second, broadcasting is uniquely accessible to children.
Bookstores and motion picture theaters may be prohibited
from making certain material available to children, but the
same selectivity cannot be done in radio or television, where
the listener or viewer is constantly tuning in and out.

Similar considerations apply in the area of national security.

The broadcast media have also established a uniquely
pervasive presence in the lives of all Filipinos. Newspapers
and current books are found only in metropolitan areas and in
the poblaciones of municipalities accessible to fast and regular
transportation. Even here, there are low income masses who
find the cost of books, newspapers, and magazines beyond
their humble means. Basic needs like food and shelter
perforce enjoy high priorities.
On the other hand, the transistor radio is found everywhere.
The television set is also becoming universal. Their message
may be simultaneously received by a national or regional
audience of listeners including the indifferent or unwilling who
happen to be within reach of a blaring radio or television set.
The materials broadcast over the airwaves reach every person
of every age, persons of varying susceptibilities to persuasion,
persons of different I.Q.s and mental capabilities, persons
whose reactions to inflammatory or offensive speech would be
difficult to monitor or predict. The impact of the vibrant speech
is forceful and immediate. Unlike readers of the printed work,
the radio audience has lesser opportunity to cogitate analyze,
and reject the utterance.
(5) The clear and present danger test, therefore, must take the
particular circumstances of broadcast media into account. The
supervision of radio stations-whether by government or
through self-regulation by the industry itself calls for thoughtful,
intelligent and sophisticated handling.
The government has a right to be protected against
broadcasts which incite the listeners to violently overthrow it.
Radio and television may not be used to organize a rebellion
or to signal the start of widespread uprising. At the same time,
the people have a right to be informed. Radio and television
would have little reason for existence if broadcasts are limited
to bland, obsequious, or pleasantly entertaining utterances.
Since they are the most convenient and popular means of
disseminating varying views on public issues, they also
deserve special protection.

(6) The freedom to comment on public affairs is essential to

the vitality of a representative democracy. In the 1918 case
of United States v. Bustos (37 Phil. 731) this Court was
already stressing that.
The interest of society and the maintenance of good
government demand a full discussion of public affairs.
Complete liberty to comment on the conduct of public men is a
scalpel in the case of free speech. The sharp incision of its
probe relieves the abscesses of officialdom. Men in public life
may suffer under a hostile and an unjust accusation; the
wound can be assuaged with the balm of a clear conscience.
A public officer must not be too thin-skinned with reference to
comment upon his official acts. Only thus can the intelligence
and dignity of the individual be exalted.
(7) Broadcast stations deserve the special protection given to
all forms of media by the due process and freedom of
expression clauses of the Constitution. [Citations omitted]
It is interesting to note that the Court in Dans adopted the arguments
found in U.S. jurisprudence to justify differentiation of treatment
(i.e., the scarcity, pervasiveness and accessibility to children), but
only after categorically declaring that "the test for limitations on
freedom of expression continues to be the clear and present
danger rule," for all forms of media, whether print or
broadcast. Indeed, a close reading of the above-quoted provisions
would show that the differentiation that the Court in Dans referred to
was narrowly restricted to what is otherwise deemed as "unprotected
speech" (e.g., obscenity, national security, seditious and inciting
speech), or to validate a licensing or regulatory scheme necessary to
allocate the limited broadcast frequencies, which is absent in print
media. Thus, when this Court declared in Dans that the freedom given
to broadcast media was "somewhat lesser in scope than the freedom
accorded to newspaper and print media," it was not as to what test
should be applied, but the context by which requirements of licensing,
allocation of airwaves, and application of norms to unprotected
speech. 85
In the same year that the Dans case was decided, it was reiterated
in Gonzales v. Katigbak,86 that the test to determine free expression
challenges was the clear and present danger, again without

distinguishing the media.87Katigbak, strictly speaking, does not treat of

broadcast media but motion pictures. Although the issue involved
obscenity standards as applied to movies,88 the Court concluded its
decision with the following obiter dictum that a less liberal approach
would be used to resolve obscenity issues in television as opposed to
motion pictures:
All that remains to be said is that the ruling is to be limited to
the concept of obscenity applicable to motion pictures. It is the
consensus of this Court that where television is concerned, a
less liberal approach calls for observance. This is so because
unlike motion pictures where the patrons have to pay their
way, television reaches every home where there is a set.
Children then will likely be among the avid viewers of the
programs therein shown..It cannot be denied though that the
State as parens patriae is called upon to manifest an attitude
of caring for the welfare of the young.
More recently, in resolving a case involving the conduct of exit polls
and dissemination of the results by a broadcast company, we
reiterated that the clear and present danger rule is the test we
unquestionably adhere to issues that involve freedoms of speech and
of the press.89
This is not to suggest, however, that the clear and present
danger rule has been applied to all cases that involve the
broadcast media. The rule applies to all media, including broadcast,
but only when the challenged act is a content-based regulation that
infringes on free speech, expression and the press. Indeed,
inOsmena v. COMELEC,90 which also involved broadcast media, the
Court refused to apply the clear and present danger rule to a
COMELEC regulation of time and manner of advertising of political
advertisements because the challenged restriction was contentneutral.91 And in a case involving due process and equal protection
issues, the Court in Telecommunications and Broadcast Attorneys of
the Philippines v. COMELEC92 treated a restriction imposed on a
broadcast media as a reasonable condition for the grant of the
medias franchise, without going into which test would apply.
That broadcast media is subject to a regulatory regime absent in print
media is observed also in other jurisdictions, where the statutory
regimes in place over broadcast media include elements of licensing,

regulation by administrative bodies, and censorship. As explained by

a British author:
The reasons behind treating broadcast and films differently
from the print media differ in a number of respects, but have a
common historical basis. The stricter system of controls seems
to have been adopted in answer to the view that owing to
their particular impact on audiences, films, videos and
broadcasting require a system of prior restraints, whereas it is
now accepted that books and other printed media do not.
These media are viewed as beneficial to the public in a
number of respects, but are also seen as possible sources of
harm.93
Parenthetically, these justifications are now the subject of
debate. Historically, the scarcity of frequencies was thought to
provide a rationale. However, cable and satellite television have
enormously increased the number of actual and potential
channels. Digital technology will further increase the number of
channels available. But still, the argument persists that broadcasting
is the most influential means of communication, since it comes into
the home, and so much time is spent watching television. Since it has
a unique impact on people and affects children in a way that the print
media normally does not, that regulation is said to be necessary in
order to preserve pluralism. It has been argued further that a
significant main threat to free expressionin terms of diversity
comes not from government, but from private corporate bodies. These
developments show a need for a reexamination of the traditional
notions of the scope and extent of broadcast media regulation. 94
The emergence of digital technology -- which has led to the
convergence of broadcasting, telecommunications and the computer
industry -- has likewise led to the question of whether the regulatory
model for broadcasting will continue to be appropriate in the
converged environment.95 Internet, for example, remains largely
unregulated, yet the Internet and the broadcast media share
similarities, 96 and the rationales used to support broadcast regulation
apply equally to the Internet.97 Thus, it has been argued that courts,
legislative bodies and the government agencies regulating media
must agree to regulate both, regulate neither or develop a new
regulatory framework and rationale to justify the differential
treatment. 98

F. The Case At Bar

Having settled the applicable standard to content-based restrictions
on broadcast media, let us go to its application to the case at bar. To
recapitulate, a governmental action that restricts freedom of speech or
of the press based on content is given the strictest scrutiny, with
the government having the burden of overcoming the presumed
unconstitutionality by the clear and present danger rule. This rule
applies equally to all kinds of media, including broadcast media.
This outlines the procedural map to follow in cases like the one at
bar as it spells out the following: (a) the test; (b) the presumption; (c)
the burden of proof; (d) the party to discharge the burden; and (e) the
quantum of evidence necessary. On the basis of the records of the
case at bar, respondents who have the burden to show that these
acts do not abridge freedom of speech and of the press failed to
hurdle the clear and present danger test. It appears that the great
evil which government wants to prevent is the airing of a tape
recording in alleged violation of the anti-wiretapping law. The records
of the case at bar, however, are confused and confusing, and
respondents evidence falls short of satisfying the clear and present
danger test. Firstly, the various statements of the Press Secretary
obfuscate
the
identity
of
the
voices
in
the
tape
recording. Secondly, the integrity of the taped conversation is also
suspect. The Press Secretary showed to the public two versions, one
supposed to be a "complete" version and the other, an "altered"
version. Thirdly, the evidence of the respondents on the whos and
the hows of the wiretapping act is ambivalent, especially considering
the tapes different versions. The identity of the wire-tappers, the
manner of its commission and other related and relevant proofs are
some of the invisibles of this case. Fourthly, given all these unsettled
facets of the tape, it is even arguable whether its airing would violate
the anti-wiretapping law.
We rule that not every violation of a law will justify straitjacketing
the exercise of freedom of speech and of the press. Our laws are
of different kinds and doubtless, some of them provide norms of
conduct which even if violated have only an adverse effect on a
persons private comfort but does not endanger national security.
There are laws of great significance but their violation, by itself and
without more, cannot support suppression of free speech and free
press. In fine, violation of law is just a factor, a vital one to be sure,

which should be weighed in adjudging whether to restrain freedom of

speech and of the press. The totality of the injurious effects of the
violation to private and public interest must be calibrated in light of the
preferred status accorded by the Constitution and by related
international covenants protecting freedom of speech and of the
press. In calling for a careful and calibrated measurement of the
circumference of all these factors to determine compliance with the
clear and present danger test, the Court should not be
misinterpreted as devaluing violations of law. By all means,
violations of law should be vigorously prosecuted by the State for they
breed their own evil consequence. But to repeat, the need to prevent
their violation cannot per se trump the exercise of free speech
and free press, a preferred right whose breach can lead to
greater evils. For this failure of the respondents alone to offer proof
to satisfy the clear and present danger test, the Court has no option
but to uphold the exercise of free speech and free press. There is no
showing that the feared violation of the anti-wiretapping law clearly
endangers the national security of the State.
This is not all the faultline in the stance of the respondents. We slide
to the issue of whether the mere press statements of the Secretary
of Justice and of the NTC in question constitute a form of contentbased prior restraint that has transgressed the Constitution. In
resolving this issue, we hold that it is not decisive that the press
statements made by respondents were not reduced in or
followed up with formal orders or circulars. It is sufficient that
the press statements were made by respondents while in the
exercise of their official functions. Undoubtedly, respondent
Gonzales made his statements as Secretary of Justice, while the NTC
issued its statement as the regulatory body of media. Any act done,
such as a speech uttered, for and on behalf of the government in
an official capacity is covered by the rule on prior restraint. The
concept of an "act" does not limit itself to acts already converted
to a formal order or official circular. Otherwise, the non
formalization of an act into an official order or circular will result
in the easy circumvention of the prohibition on prior
restraint. The press statements at bar are acts that should be struck
down as they constitute impermissible forms of prior restraints on the
right to free speech and press.
There is enough evidence of chilling effect of the complained acts on
record. The warnings given to mediacame from no less the NTC, a

regulatory agency that can cancel the Certificate of Authority of the

radio and broadcast media. They also came from the Secretary of
Justice, the alter ego of the Executive, who wields the awesome
power to prosecute those perceived to be violating the laws of the
land. After the warnings, the KBP inexplicably joined the NTC in
issuing an ambivalent Joint Press Statement. After the warnings,
petitioner Chavez was left alone to fight this battle for freedom of
speech and of the press. This silence on the sidelines on the part of
some media practitioners is too deafening to be the subject of
misinterpretation.
The constitutional imperative for us to strike down unconstitutional
acts should always be exercised with care and in light of the distinct
facts of each case. For there are no hard and fast rules when it comes
to slippery constitutional questions, and the limits and construct of
relative freedoms are never set in stone. Issues revolving on their
construct must be decided on a case to case basis, always based on
the peculiar shapes and shadows of each case. But in cases where
the challenged acts are patent invasions of a constitutionally protected
right, we should be swift in striking them down as nullities per se. A
blow too soon struck for freedom is preferred than a blow too
late.
In VIEW WHEREOF, the petition is GRANTED. The writs
of certiorari and prohibition are hereby issued, nullifying the official
statements made by respondents on June 8, and 11, 2005 warning
the media on airing the alleged wiretapped conversation between the
President and other personalities, for constituting unconstitutional
prior restraint on the exercise of freedom of speech and of the press
SO ORDERED.
A.M. No. 1928 August 3, 1978
In the Matter of the IBP Membership Dues Delinquency of Atty.
MARCIAL A. EDILION (IBP Administrative Case No. MDD-1)
RESOLUTION

CASTRO, C.J.:
The respondent Marcial A. Edillon is a duly licensed practicing
attorney in the Philippines.
On November 29, 1975, the Integrated Bar of the Philippines (IBP for
short) Board of Governors unanimously adopted Resolution No. 75-65
in Administrative Case No. MDD-1 (In the Matter of the Membership
Dues Delinquency of Atty. Marcial A. Edillon) recommending to the
Court the removal of the name of the respondent from its Roll of
Attorneys for "stubborn refusal to pay his membership dues" to the
IBP since the latter's constitution notwithstanding due notice.
On January 21, 1976, the IBP, through its then President Liliano B.
Neri, submitted the said resolution to the Court for consideration and
approval, pursuant to paragraph 2, Section 24, Article III of the ByLaws of the IBP, which reads:
.... Should the delinquency further continue until the
following June 29, the Board shall promptly inquire into
the cause or causes of the continued delinquency and
take whatever action it shall deem appropriate,
including a recommendation to the Supreme Court for
the removal of the delinquent member's name from the
Roll of Attorneys. Notice of the action taken shall be
sent by registered mail to the member and to the
Secretary of the Chapter concerned.
On January 27, 1976, the Court required the respondent to comment
on the resolution and letter adverted to above; he submitted his
comment on February 23, 1976, reiterating his refusal to pay the
membership fees due from him.
On March 2, 1976, the Court required the IBP President and the IBP
Board of Governors to reply to Edillon's comment: on March 24, 1976,
they submitted a joint reply.
Thereafter, the case was set for hearing on June 3, 1976. After the
hearing, the parties were required to submit memoranda in
amplification of their oral arguments. The matter was thenceforth
submitted for resolution.

At the threshold, a painstaking scrutiny of the respondent's pleadings

would show that the propriety and necessity of the integration of the
Bar of the Philippines are in essence conceded. The respondent,
however, objects to particular features of Rule of Court 139-A
(hereinafter referred to as the Court Rule) 1 in accordance with
which the Bar of the Philippines was integrated and to the
provisions of par. 2, Section 24, Article III, of the IBP By-Laws
(hereinabove cited).
The authority of the IBP Board of Governors to recommend to the
Supreme Court the removal of a delinquent member's name from the
Roll of Attorneys is found in par. 2 Section 24, Article Ill of the IBP ByLaws (supra), whereas the authority of the Court to issue the order
applied for is found in Section 10 of the Court Rule, which reads:
SEC. 10. Effect of non-payment of dues. Subject to
the provisions of Section 12 of this Rule, default in the
payment of annual dues for six months shall warrant
suspension of membership in the Integrated Bar, and
default in such payment for one year shall be a ground
for the removal of the name of the delinquent member
from the Roll of Attorneys.
The all-encompassing, all-inclusive scope of membership in the IBP is
stated in these words of the Court Rule:
SECTION 1. Organization. There is hereby
organized an official national body to be known as the
'Integrated Bar of the Philippines,' composed of all
persons whose names now appear or may hereafter be
included in the Roll of Attorneys of the Supreme Court.
The obligation to pay membership dues is couched in the following
words of the Court Rule:
SEC. 9. Membership dues. Every member of the
Integrated Bar shall pay such annual dues as the
Board of Governors shall determine with the approval
of the Supreme Court. ...

The core of the respondent's arguments is that the above provisions

constitute an invasion of his constitutional rights in the sense that he
is being compelled, as a pre-condition to maintaining his status as a
lawyer in good standing, to be a member of the IBP and to pay the
corresponding dues, and that as a consequence of this compelled
financial support of the said organization to which he is admittedly
personally antagonistic, he is being deprived of the rights to liberty
and property guaranteed to him by the Constitution. Hence, the
respondent concludes, the above provisions of the Court Rule and of
the IBP By-Laws are void and of no legal force and effect.
The respondent similarly questions the jurisdiction of the Court to
strike his name from the Roll of Attorneys, contending that the said
matter is not among the justiciable cases triable by the Court but is
rather of an "administrative nature pertaining to an administrative
body."

An "Integrated Bar" is a State-organized Bar, to which every lawyer

must belong, as distinguished from bar associations organized by
individual lawyers themselves, membership in which is voluntary.
Integration of the Bar is essentially a process by which every member
of the Bar is afforded an opportunity to do his share in carrying out the
objectives of the Bar as well as obliged to bear his portion of its
responsibilities. Organized by or under the direction of the State, an
integrated Bar is an official national body of which all lawyers are
required to be members. They are, therefore, subject to all the rules
prescribed for the governance of the Bar, including the requirement of
payment of a reasonable annual fee for the effective discharge of the
purposes of the Bar, and adherence to a code of professional ethics
or professional responsibility breach of which constitutes sufficient
reason for investigation by the Bar and, upon proper cause appearing,
a recommendation for discipline or disbarment of the offending
member. 2

The case at bar is not the first one that has reached the Court relating
to constitutional issues that inevitably and inextricably come up to the
surface whenever attempts are made to regulate the practice of law,
define the conditions of such practice, or revoke the license granted
for the exercise of the legal profession.

The integration of the Philippine Bar was obviously dictated by

overriding considerations of public interest and public welfare to such
an extent as more than constitutionally and legally justifies the
restrictions that integration imposes upon the personal interests and
personal convenience of individual lawyers. 3

The matters here complained of are the very same issues raised in a
previous case before the Court, entitled "Administrative Case No. 526,
In the Matter of the Petition for the Integration of the Bar of the
Philippines, Roman Ozaeta, et al., Petitioners." The Court
exhaustively considered all these matters in that case in its Resolution
ordaining the integration of the Bar of the Philippines, promulgated on
January 9, 1973. The Court there made the unanimous
pronouncement that it was

Apropos to the above, it must be stressed that all legislation directing

the integration of the Bar have been uniformly and universally
sustained as a valid exercise of the police power over an important
profession. The practice of law is not a vested right but a privilege, a
privilege moreover clothed with public interest because a lawyer owes
substantial duties not only to his client, but also to his brethren in the
profession, to the courts, and to the nation, and takes part in one of
the most important functions of the State the administration of
justice as an officer of the court. 4 The practice of law being clothed
with public interest, the holder of this privilege must submit to a
degree of control for the common good, to the extent of the interest he
has created. As the U. S. Supreme Court through Mr. Justice Roberts
explained, the expression "affected with a public interest" is the
equivalent of "subject to the exercise of the police power" (Nebbia vs.
New York, 291 U.S. 502).

... fully convinced, after a thoroughgoing conscientious

study of all the arguments adduced in Adm. Case No.
526 and the authoritative materials and the mass of
factual data contained in the exhaustive Report of the
Commission on Bar Integration, that the integration of
the Philippine Bar is 'perfectly constitutional and legally
unobjectionable'. ...
Be that as it may, we now restate briefly the posture of the Court.

When,
therefore,
Congress
enacted
Republic
Act
No.
5
6397 authorizing the Supreme Court to "adopt rules of court to effect
the integration of the Philippine Bar under such conditions as it shall

see fit," it did so in the exercise of the paramount police power of the
State. The Act's avowal is to "raise the standards of the legal
profession, improve the administration of justice, and enable the Bar
to discharge its public responsibility more effectively." Hence, the
Congress in enacting such Act, the Court in ordaining the integration
of the Bar through its Resolution promulgated on January 9, 1973,
and the President of the Philippines in decreeing the constitution of
the IBP into a body corporate through Presidential Decree No. 181
dated May 4, 1973, were prompted by fundamental considerations of
public welfare and motivated by a desire to meet the demands of
pressing public necessity.
The State, in order to promote the general welfare, may interfere with
and regulate personal liberty, property and occupations. Persons and
property may be subjected to restraints and burdens in order to
secure the general prosperity and welfare of the State (U.S. vs.
Gomez Jesus, 31 Phil 218), for, as the Latin maxim goes, "Salus
populi est supreme lex." The public welfare is the supreme law. To
this fundamental principle of government the rights of individuals are
subordinated. Liberty is a blessing without which life is a misery, but
liberty should not be made to prevail over authority because then
society win fall into anarchy (Calalang vs. Williams, 70 Phil. 726). It is
an undoubted power of the State to restrain some individuals from all
freedom, and all individuals from some freedom.
But the most compelling argument sustaining the constitutionality and
validity of Bar integration in the Philippines is the explicit unequivocal
grant of precise power to the Supreme Court by Section 5 (5) of
Article X of the 1973 Constitution of the Philippines, which reads:
Sec. 5. The Supreme Court shall have the following
powers:
xxx xxx xxx
(5) Promulgate rules concerning pleading, practice,
and pro. procedure in all courts, and the admission to
the practice of law and the integration of the Bar ...,
and Section 1 of Republic Act No. 6397, which reads:

SECTION 1. Within two years from the approval of this

Act, the Supreme Court may adopt rules of Court to
effect the integration of the Philippine Bar under such
conditions as it shall see fit in order to raise the
standards of the legal profession, improve the
administration of justice, and enable the Bar to
discharge its public responsibility more effectively.
Quite apart from the above, let it be stated that even without the
enabling Act (Republic Act No. 6397), and looking solely to the
language of the provision of the Constitution granting the Supreme
Court the power "to promulgate rules concerning pleading, practice
and procedure in all courts, and the admission to the practice of law,"
it at once becomes indubitable that this constitutional declaration
vests the Supreme Court with plenary power in all cases regarding the
admission to and supervision of the practice of law.
Thus, when the respondent Edillon entered upon the legal profession,
his practice of law and his exercise of the said profession, which affect
the society at large, were (and are) subject to the power of the body
politic to require him to conform to such regulations as might be
established by the proper authorities for the common good, even to
the extent of interfering with some of his liberties. If he did not wish to
submit himself to such reasonable interference and regulation, he
should not have clothed the public with an interest in his concerns.
On this score alone, the case for the respondent must already fall.
The issues being of constitutional dimension, however, we now
concisely deal with them seriatim.
1. The first objection posed by the respondent is that the Court is
without power to compel him to become a member of the Integrated
Bar of the Philippines, hence, Section 1 of the Court Rule is
unconstitutional for it impinges on his constitutional right of freedom to
associate (and not to associate). Our answer is: To compel a lawyer
to be a member of the Integrated Bar is not violative of his
constitutional freedom to associate. 6
Integration does not make a lawyer a member of any group of which
he is not already a member. He became a member of the Bar when
he passed the Bar examinations. 7 All that integration actually does is

to provide an official national organization for the well-defined but

unorganized and incohesive group of which every lawyer is a ready a
member. 8
Bar integration does not compel the lawyer to associate with anyone.
He is free to attend or not attend the meetings of his Integrated Bar
Chapter or vote or refuse to vote in its elections as he chooses. The
only compulsion to which he is subjected is the payment of annual
dues. The Supreme Court, in order to further the State's legitimate
interest in elevating the quality of professional legal services, may
require that the cost of improving the profession in this fashion be
shared by the subjects and beneficiaries of the regulatory program
the lawyers. 9
Assuming that the questioned provision does in a sense compel a
lawyer to be a member of the Integrated Bar, such compulsion is
justified as an exercise of the police power of the State. 10
2. The second issue posed by the respondent is that the provision of
the Court Rule requiring payment of a membership fee is void. We
see nothing in the Constitution that prohibits the Court, under its
constitutional power and duty to promulgate rules concerning the
admission to the practice of law and the integration of the Philippine
Bar (Article X, Section 5 of the 1973 Constitution) which power the
respondent acknowledges from requiring members of a privileged
class, such as lawyers are, to pay a reasonable fee toward defraying
the expenses of regulation of the profession to which they belong. It is
quite apparent that the fee is indeed imposed as a regulatory
measure, designed to raise funds for carrying out the objectives and
purposes of integration. 11
3. The respondent further argues that the enforcement of the penalty
provisions would amount to a deprivation of property without due
process and hence infringes on one of his constitutional rights.
Whether the practice of law is a property right, in the sense of its
being one that entitles the holder of a license to practice a profession,
we do not here pause to consider at length, as it clear that under the
police power of the State, and under the necessary powers granted to
the Court to perpetuate its existence, the respondent's right to
practise law before the courts of this country should be and is a matter
subject to regulation and inquiry. And, if the power to impose the fee
as a regulatory measure is recognize, then a penalty designed to

enforce its payment, which penalty may be avoided altogether by

payment, is not void as unreasonable or arbitrary. 12
But we must here emphasize that the practice of law is not a property
right but a mere privilege, 13 and as such must bow to the inherent
regulatory power of the Court to exact compliance with the lawyer's
public responsibilities.
4. Relative to the issue of the power and/or jurisdiction of the
Supreme Court to strike the name of a lawyer from its Roll of
Attorneys, it is sufficient to state that the matters of admission,
suspension, disbarment and reinstatement of lawyers and their
regulation and supervision have been and are indisputably recognized
as inherent judicial functions and responsibilities, and the authorities
holding such are legion. 14
In In Re Sparks (267 Ky. 93, 101 S.W. (2d) 194), in which the report
of the Board of Bar Commissioners in a disbarment proceeding was
confirmed and disbarment ordered, the court, sustaining the Bar
Integration Act of Kentucky, said: "The power to regulate the conduct
and qualifications of its officers does not depend upon constitutional
or statutory grounds. It is a power which is inherent in this court as a
court appropriate, indeed necessary, to the proper administration of
justice ... the argument that this is an arbitrary power which the court
is arrogating to itself or accepting from the legislative likewise
misconceives the nature of the duty. It has limitations no less real
because they are inherent. It is an unpleasant task to sit in judgment
upon a brother member of the Bar, particularly where, as here, the
facts are disputed. It is a grave responsibility, to be assumed only with
a determination to uphold the Ideals and traditions of an honorable
profession and to protect the public from overreaching and fraud. The
very burden of the duty is itself a guaranty that the power will not be
misused or prostituted. ..."
The Court's jurisdiction was greatly reinforced by our 1973
Constitution when it explicitly granted to the Court the power to
"Promulgate rules concerning pleading, practice ... and the admission
to the practice of law and the integration of the Bar ... (Article X, Sec.
5(5) the power to pass upon the fitness of the respondent to remain a
member of the legal profession is indeed undoubtedly vested in the
Court.

We thus reach the conclusion that the provisions of Rule of Court 139A and of the By-Laws of the Integrated Bar of the Philippines
complained of are neither unconstitutional nor illegal.
WHEREFORE, premises considered, it is the unanimous sense of the
Court that the respondent Marcial A. Edillon should be as he is hereby
disbarred, and his name is hereby ordered stricken from the Roll of
Attorneys of the Court.
G.R. No. 172410

April 14, 2008

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE TOLL

REGULATORY
BOARD
(TRB), petitione,
vs.
HOLY TRINITY REALTY DEVELOPMENT CORP., respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court, seeking to set aside the Decision1dated 21 April 2006 of the
Court of Appeals in CA-G.R. SP No. 90981 which, in turn, set aside
two Orders2 dated 7 February 20053 and 16 May 20054 of the
Regional Trial Court (RTC) of Malolos, Bulacan, in Civil Case No.
869-M-2000.
The undisputed factual and procedural antecedents of this case are
as follows:
On 29 December 2000, petitioner Republic of the Philippines,
represented by the Toll Regulatory Board (TRB), filed with the RTC a
Consolidated Complaint for Expropriation against landowners whose
properties would be affected by the construction, rehabilitation and
expansion of the North Luzon Expressway. The suit was docketed as
Civil Case No. 869-M-2000 and raffled to Branch 85, Malolos,
Bulacan. Respondent Holy Trinity Realty and Development
Corporation (HTRDC) was one of the affected landowners.
On 18 March 2002, TRB filed an Urgent Ex-Parte Motion for the
issuance of a Writ of Possession, manifesting that it deposited a

sufficient amount to cover the payment of 100% of the zonal value of

the affected properties, in the total amount of P28,406,700.00, with
the Land Bank of the Philippines, South Harbor Branch (LBP-South
Harbor), an authorized government depository. TRB maintained that
since it had already complied with the provisions of Section 4 of
Republic Act No. 89745 in relation to Section 2 of Rule 67 of the Rules
of Court, the issuance of the writ of possession becomes ministerial
on the part of the RTC.
The RTC issued, on 19 March 2002, an Order for the Issuance of a
Writ of Possession, as well as the Writ of Possession itself. HTRDC
thereafter moved for the reconsideration of the 19 March 2002 Order
of the RTC.
On 7 October 2002, the Sheriff filed with the RTC a Report on Writ of
Possession stating, among other things, that since none of the
landowners voluntarily vacated the properties subject of the
expropriation proceedings, the assistance of the Philippine National
Police (PNP) would be necessary in implementing the Writ of
Possession. Accordingly, TRB, through the Office of the Solicitor
General (OSG), filed with the RTC an Omnibus Motion praying for an
Order directing the PNP to assist the Sheriff in the implementation of
the Writ of Possession. On 15 November 2002, the RTC issued an
Order directing the landowners to file their comment on TRBs
Omnibus Motion.
On 3 March 2003, HTRDC filed with the RTC a Motion to Withdraw
Deposit, praying that the respondent or its duly authorized
representative be allowed to withdraw the amount of P22,968,000.00,
out of TRBs advance deposit ofP28,406,700.00 with LBP-South
Harbor, including the interest which accrued thereon. Acting on said
motion, the RTC issued an Order dated 21 April 2003, directing the
manager of LBP-South Harbor to release in favor of HTRDC the
amount of P22,968,000.00 since the latter already proved its absolute
ownership over the subject properties and paid the taxes due thereon
to the government. According to the RTC, "(t)he issue however on the
interest earned by the amount deposited in the bank, if there is any,
should still be threshed out."6
On 7 May 2003, the RTC conducted a hearing on the accrued
interest, after which, it directed the issuance of an order of
expropriation, and granted TRB a period of 30 days to inquire from

LBP-South Harbor "whether the deposit made by DPWH with said

bank relative to these expropriation proceedings is earning interest or
not."7
The RTC issued an Order, on 6 August 2003, directing the
appearance of LBP Assistant Vice-President Atty. Rosemarie M.
Osoteo and Department Manager Elizabeth Cruz to testify on whether
the Department of Public Works and Highways (DPWHs)
expropriation account with the bank was earning interest. On 9
October 2003, TRB instead submitted a Manifestation to which was
attached a letter dated 19 August 2003 by Atty. Osoteo stating that
the DPWH Expropriation Account was an interest bearing current
account.
On 11 March 2004, the RTC issued an Order resolving as follows the
issue of ownership of the interest that had accrued on the amount
deposited by DPWH in its expropriation current account with LBPSouth Harbor:
WHEREFORE, the interest earnings from the deposit
of P22,968,000.00 respecting one hundred (100%) percent of
the zonal value of the affected properties in this expropriation
proceedings under the principle of accession are considered
as fruits and should properly pertain to the herein
defendant/property owner [HTRDC]. Accordingly, the Land
Bank as the depositary bank in this expropriation proceedings
is (1) directed to make the necessary computation of the
accrued interest of the amount of P22,968,000.00 from the
time it was deposited up to the time it was released to Holy
Trinity Realty and Development Corp. and thereafter (2) to
release the same to the defendant Holy Trinity Development
Corporation through its authorized representative.8
TRB filed a Motion for Reconsideration of the afore-quoted RTC
Order, contending that the payment of interest on money deposited
and/or consigned for the purpose of securing a writ of possession was
sanctioned neither by law nor by jurisprudence.
TRB filed a Motion to Implement Order dated 7 May 2003, which
directed the issuance of an order of expropriation. On 5 November
2004, the RTC issued an Order of Expropriation.

On 7 February 2005, the RTC likewise granted TRBs Motion for

Reconsideration. The RTC ruled that the issue as to whether or not
HTRDC is entitled to payment of interest should be ventilated before
the Board of Commissioners which will be created later for the
determination of just compensation.
Now it was HTRDCs turn to file a Motion for Reconsideration of the
latest Order of the RTC. The RTC, however, denied HTRDCs Motion
for Reconsideration in an Order dated 16 May 2005.
HTRDC sought recourse with the Court of Appeals by filing a Petition
for Certiorari, docketed as CA-G.R. SP No. 90981. In its Decision,
promulgated on 21 April 2006, the Court of Appeals vacated the
Orders dated 7 February 2005 and 16 May 2005 of the RTC, and
reinstated the Order dated 11 March 2004 of the said trial court
wherein it ruled that the interest which accrued on the amount
deposited in the expropriation account belongs to HTRDC by virtue of
accession. The Court of Appeals thus declared:
WHEREFORE, the foregoing premises considered, the
assailed Orders dated 07 February and 16 May 2005
respectively of the Regional Trial Court of Malolos, Bulacan
(Branch 85) are hereby VACATED and SET ASIDE.
Accordingly, the Order dated 11 March 2004 is hereby
reinstated.9
From the foregoing, the Republic, represented by the TRB, filed the
present Petition for Review on Certiorari, steadfast in its stance that
HTRDC is "entitled only to an amount equivalent to the zonal value of
the
expropriated
property,
nothing
more
and
nothing
less."10 According to the TRB, the owner of the subject properties is
entitled to an exact amount as clearly defined in both Section 4 of
Republic Act No. 8974, which reads:
Section 4. Guidelines for Expropriation Proceedings.
Whenever it is necessary to acquire real property for the rightof-way, site or location for any national government
infrastructure project through expropriation, the appropriate
implementing agency shall initiate the expropriation
proceedings before the proper court under the following
guidelines:

(a) Upon the filing of the complaint, and after due notice to the
defendant, the implementing agency shall immediately pay the
owner of the property the amount equivalent to the sum of
(1) one hundred (100%) percent of the value of the
property based on the current relevant zonal valuation of
the Bureau of Internal Revenue (BIR); and (2) the value of
the improvements and/or structures as determined under
Section 7 hereof.
and Section 2, Rule 67 of the Rules of Court, which provides:
Sec. 2. Entry of plaintiff upon depositing value with authorized
government depositary. Upon the filing of the complaint or at
anytime thereafter and after due notice to the defendant, the
plaintiff shall have the right to take or enter upon the
possession of the real property involved if he 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. Such deposit shall be in money, unless in lieu thereof
the court authorizes the deposit of a certificate of deposit of a
government bank of the Republic of the Philippines payable on
demand to the authorized government depositary.
The TRB reminds us that there are two stages11 in expropriation
proceedings, the determination of the authority to exercise eminent
domain and the determination of just compensation. The TRB argues
that it is only during the second stage when the court will appoint
commissioners and determine claims for entitlement to interest,
citingLand Bank of the Philippines v. Wycoco12 and National Power
Corporation v. Angas.13
The TRB further points out that the expropriation account with LBPSouth Harbor is not in the name of HTRDC, but of DPWH. Thus, the
said expropriation account includes the compensation for the other
landowners named defendants in Civil Case No. 869-M-2000, and
does not exclusively belong to respondent.
At the outset, we call attention to a significant oversight in the TRBs
line of reasoning. It failed to distinguish between the expropriation
procedures under Republic Act No. 8974 and Rule 67 of the Rules of
Court. Republic Act No. 8974 and Rule 67 of the Rules of Court speak

of different procedures, with the former specifically governing

expropriation proceedings for national government infrastructure
projects. Thus, in Republic v. Gingoyon,14 we held:
There are at least two crucial differences between the
respective procedures under Rep. Act No. 8974 and Rule
67. Under the statute, the Government is required to make
immediate payment to the property owner upon the filing
of the complaint to be entitled to a writ of possession,
whereas in Rule 67, the Government is required only to
make an initial deposit with an authorized government
depositary. Moreover, Rule 67 prescribes that the initial
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 market
value of the property as stated in the tax declaration or the
current relevant zonal valuation of the Bureau of Internal
Revenue (BIR), whichever is higher, and the value of the
improvements and/or structures using the replacement cost
method.
xxxx
Rule 67 outlines the procedure under which eminent domain
may be exercised by the Government. Yet by no means does
it serve at present as the solitary guideline through which the
State may expropriate private property. For example, Section
19 of the Local Government Code governs as to the exercise
by local government units of the power of eminent domain
through an enabling ordinance. And then there is Rep. Act No.
8974, which covers expropriation proceedings intended for
national government infrastructure projects.
Rep. Act No. 8974, which provides for a procedure eminently
more favorable to the property owner than Rule 67,
inescapably applies in instances when the national
government expropriates property "for national government
infrastructure projects." Thus, if expropriation is engaged in by
the national government for purposes other than national
infrastructure projects, the assessed value standard and the
deposit mode prescribed in Rule 67 continues to apply.

There is no question that the proceedings in this case deal with the
expropriation of properties intended for a national government
infrastructure project. Therefore, the RTC correctly applied the
procedure laid out in Republic Act No. 8974, by requiring the deposit
of the amount equivalent to 100% of the zonal value of the properties
sought to be expropriated before the issuance of a writ of possession
in favor of the Republic.
The controversy, though, arises not from the amount of the deposit,
but as to the ownership of the interest that had since accrued on the
deposited amount.
Whether the Court of Appeals was correct in holding that the interest
earned by the deposited amount in the expropriation account would
accrue to HRTDC by virtue of accession, hinges on the determination
of who actually owns the deposited amount, since, under Article 440
of the Civil Code, the right of accession is conferred by ownership of
the principal property:
Art. 440. The ownership of property gives the right by
accession to everything which is produced thereby, or which is
incorporated or attached thereto, either naturally or artificially.
The principal property in the case at bar is part of the deposited
amount in the expropriation account of DPWH which pertains
particularly
to
HTRDC.
Such
amount,
determined
to
be P22,968,000.00 of the P28,406,700.00 total deposit, was already
ordered by the RTC to be released to HTRDC or its authorized
representative. The Court of Appeals further recognized that the
deposit of the amount was already deemed a constructive delivery
thereof to HTRDC:
When the [herein petitioner] TRB deposited the money as
advance payment for the expropriated property with an
authorized government depositary bank for purposes of
obtaining a writ of possession, it is deemed to be a
"constructive delivery" of the amount corresponding to the
100% zonal valuation of the expropriated property. Since
[HTRDC] is entitled thereto and undisputably the owner of the
principal amount deposited by [herein petitioner] TRB,
conversely, the interest yield, as accession, in a bank deposit
should likewise pertain to the owner of the money deposited.15

Since the Court of Appeals found that the HTRDC is the owner of the
deposited amount, then the latter should also be entitled to the
interest which accrued thereon.
We agree with the Court of Appeals, and find no merit in the instant
Petition.
The deposit was made in order to comply with Section 4 of Republic
Act No. 8974, which requires nothing less than the immediate
payment of 100% of the value of the property, based on the current
zonal valuation of the BIR, to the property owner. Thus, going back to
our ruling in Republic v. Gingoyon16:
It is the plain intent of Rep. Act No. 8974 to supersede the
system of deposit under Rule 67 with the scheme of
"immediate payment" in cases involving national government
infrastructure projects. The following portion of the Senate
deliberations, cited by PIATCO in its Memorandum, is worth
quoting to cogitate on the purpose behind the plain meaning of
the law:
THE CHAIRMAN (SEN. CAYETANO). "x x x Because
the Senate believes that, you know, we have to pay the
landowners immediately not by treasury bills but by
cash.
Since we are depriving them, you know, upon
payment, no, of possession, we might as well pay
them as much, no, hindi lang 50 percent.
xxxx
THE CHAIRMAN (REP. VERGARA). Accepted.
xxxx
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.

xxxx
THE CHAIRMAN (SEN. CAYETANO). No, no. Its the
same. It says here: iyong first paragraph, diba? Iyong
zonal talagang magbabayad muna. In other words,
you know, there must be a paymentkaagad. (TSN,
Bicameral Conference on the Disagreeing Provisions
of House Bill 1422 and Senate Bill 2117, August 29,
2000, pp. 14-20)
xxxx
THE CHAIRMAN (SEN. CAYETANO). Okay, okay,
no. Unang-una, it is not deposit, no. Its payment."
REP. BATERINA. Its payment, ho, payment."
The critical factor in the different modes of effecting delivery which
gives legal effect to the act is the actual intention to deliver on the part
of the party making such delivery.17 The intention of the TRB in
depositing such amount through DPWH was clearly to comply with the
requirement of immediate payment in Republic Act No. 8974, so that it
could already secure a writ of possession over the properties subject
of the expropriation and commence implementation of the project. In
fact, TRB did not object to HTRDCs Motion to Withdraw Deposit with
the RTC, for as long as HTRDC shows (1) that the property is free
from any lien or encumbrance and (2) that respondent is the absolute
owner thereof.18
A close scrutiny of TRBs arguments would further reveal that it does
not directly challenge the Court of Appeals determinative
pronouncement that the interest earned by the amount deposited in
the expropriation account accrues to HTRDC by virtue of accession.
TRB only asserts that HTRDC is "entitled only to an amount
equivalent to the zonal value of the expropriated property, nothing
more and nothing less."
We agree in TRBs statement since it is exactly how the amount of the
immediate payment shall be determined in accordance with Section 4
of Republic Act No. 8974, i.e., an amount equivalent to 100% of the
zonal value of the expropriated properties. However, TRB already

complied therewith by depositing the required amount in the

expropriation account of DPWH with LBP-South Harbor. By depositing
the said amount, TRB is already considered to have paid the same to
HTRDC, and HTRDC became the owner thereof. The amount earned
interest after the deposit; hence, the interest should pertain to the
owner of the principal who is already determined as HTRDC. The
interest is paid by LBP-South Harbor on the deposit, and the TRB
cannot claim that it paid an amount more than what it is required to do
so by law.
Nonetheless, we find it necessary to emphasize that HTRDC is
determined to be the owner of only a part of the amount deposited in
the expropriation account, in the sum of P22,968,000.00. Hence, it is
entitled by right of accession to the interest that had accrued to the
said amount only.
We are not persuaded by TRBs citation of National Power
Corporation v. Angas and Land Bank of the Philippines v. Wycoco, in
support of its argument that the issue on interest is merely part and
parcel of the determination of just compensation which should be
determined in the second stage of the proceedings only. We find that
neither case is applicable herein.
The issue in Angas is whether or not, in the computation of the legal
rate of interest on just compensation for expropriated lands, the
applicable law is Article 2209 of the Civil Code which prescribes a 6%
legal interest rate, or Central Bank Circular No. 416 which fixed the
legal rate at 12% per annum. We ruled in Angas that since the kind of
interest involved therein is interest by way of damages for delay in the
payment thereof, and not as earnings from loans or forbearances of
money, Article 2209 of the Civil Code prescribing the 6% interest shall
apply. InWycoco, on the other hand, we clarified that interests in the
form of damages cannot be applied where there is prompt and valid
payment of just compensation.
The case at bar, however, does not involve interest as damages for
delay in payment of just compensation. It concerns interest earned by
the amount deposited in the expropriation account.
Under Section 4 of Republic Act No. 8974, the implementing agency
of the government pays just compensation twice: (1) immediately
upon the filing of the complaint, where the amount to be paid is 100%

of the value of the property based on the current relevant zonal

valuation of the BIR (initial payment); and (2) when the decision of the
court in the determination of just compensation becomes final and
executory, where the implementing agency shall pay the owner the
difference between the amount already paid and the just
compensation as determined by the court (final payment).19
HTRDC never alleged that it was seeking interest because of delay in
either of the two payments enumerated above. In fact, HTRDCs
cause of action is based on the prompt initial payment of just
compensation, which effectively transferred the ownership of the
amount paid to HTRDC. Being the owner of the amount paid, HTRDC
is claiming, by the right of accession, the interest earned by the same
while on deposit with the bank.
That the expropriation account was in the name of DPWH, and not of
HTRDC, is of no moment. We quote with approval the following
reasoning of the Court of Appeals:
Notwithstanding that the amount was deposited under the
DPWH account, ownership over the deposit transferred by
operation of law to the [HTRDC] and whatever interest,
considered as civil fruits, accruing to the amount of
Php22,968,000.00 should properly pertain to [HTRDC] as the
lawful owner of the principal amount deposited following the
principle of accession. Bank interest partake the nature of civil
fruits under Art. 442 of the New Civil Code. And since these
are considered fruits, ownership thereof should be due to the
owner of the principal. Undoubtedly, being an attribute of
ownership, the [HTRDCs] right over the fruits (jus fruendi),
that is the bank interests, must be respected.20
Considering that the expropriation account is in the name of DPWH,
then, DPWH should at most be deemed as the trustee of the amounts
deposited in the said accounts irrefragably intended as initial payment
for the landowners of the properties subject of the expropriation, until
said landowners are allowed by the RTC to withdraw the same.
As a final note, TRB does not object to HTRDCs withdrawal of the
amount of P22,968,000.00 from the expropriation account, provided
that it is able to show (1) that the property is free from any lien or
encumbrance and (2) that it is the absolute owner thereof.21 The said

conditions do not put in abeyance the constructive delivery of the said

amount to HTRDC pending the latters compliance therewith. Article
118722 of the Civil Code provides that the "effects of a conditional
obligation to give, once the condition has been fulfilled, shall retroact
to the day of the constitution of the obligation." Hence, when HTRDC
complied with the given conditions, as determined by the RTC in its
Order23 dated 21 April 2003, the effects of the constructive delivery
retroacted to the actual date of the deposit of the amount in the
expropriation account of DPWH.
WHEREFORE, the Petition is DENIED. The Court of Appeals
Decision dated 21 April 2006 in CA-G.R. SP No. 90981, which set
aside the 7 February 2005 and 16 May 2005 Orders of the Regional
Trial Court of Malolos, Bulacan, is AFFIRMED. No costs.
SO ORDERED.
G.R. No. 166973

February 10, 2009

NATIONAL
POWER
vs.
BENJAMIN ONG CO, Respondent.

CORPORATION, Petitioner,

DECISION
TINGA, J.:
Before us is a Rule 45 petition1 which seeks the reversal of the
Decision2 and Resolution3 of the Court of Appeals in CA-G.R. No.
79211. The Court of Appeals Decision affirmed the Partial
Decision4 of the Regional Trial Court (RTC) of San Fernando,
Pampanga, Branch 41 in Civil Case No. 12281, fixing the
compensation due respondent following the expropriation of his
property for the construction of petitioners power transmission lines.
Petitioner was established by R.A. No. 6395 to undertake the
development of hydroelectric generation of power and the production
of electricity from nuclear, geothermal and other sources, as well as
the transmission of electric power on a nationwide basis.5 Its charter
grants to petitioner, among others, the power to exercise the right to
eminent domain.6

On 27 June 2001, petitioner filed a complaint7 with the RTC of San

Fernando, Pampanga, for the acquisition of an easement of right-ofway over three (3) lots at Barangay Cabalantian, Bacolor, Pampanga
with a total area of 575 square meters belonging to respondent, in
connection with the construction of its transmission lines for its Lahar
Affected Transmission Line Project (Lahar Project).
On 25 March 2002, petitioner obtained a writ of possession and on 15
April 2002 it took possession of the property.
At the pre-trial conference, respondent conceded the necessity of
expropriation.1avvphi1.zw+ Thus, the sole issue for litigation revolved
around the determination of just compensation.
The RTC appointed three (3) commissioners8 to determine the fair
market value of the property as of 15 April 2002. Commissioners
Dayrit and Garcia submitted their joint report9 wherein they appraised
the value of the property at P1,900.00 per square meter or a total
of P1,179,000.00, while Commissioner Abcejo submitted his
Commissioner's Report10 pegging the value of the property at P875.00
per square meter.
The RTC rendered its Partial Decision,11 wherein it declared the
validity of the expropriation and ordered petitioner to pay the sum
of P1,179,000.00, with interest at 6% per annum beginning 15 April
2002, the date of actual taking, until full payment. It adopted the
findings of Commissioners Dayrit and Garcia as more reliable since
their report was based on established facts and they had evaluated
the market, location and physical characteristics of the property while
Commissioner Abcejos report had merely taken the average between
the Provincial Appraisal Report (P1,500.00/sq.m.) and the Land Bank
Appraisal Report (P250.00/sq.m.) that were both done in 1998.

Petitioner filed a motion for partial reconsideration, questioning the

order to pay the full fair market value computed as of the date of its
actual possession of the property. The Court of Appeals denied the
motion for partial reconsideration; hence, the present petition.
On 11 April 2007,13 the Court required the parties to submit their
supplemental memoranda discussing the following issues:
Is Republic Act No. 8974 (2000), otherwise known as "An Act to
Facilitate the Acquisition of Right-of-Way, site or Location for National
Government Infrastructure Projects and for other purposes,"
applicable to actions for eminent domain filed by the National Power
Corporation (Napocor) pursuant to its charter (Rep. Act. No. 6395, as
amended) for the purpose of constructing power transmission lines on
the properties subject of said actions?
Assuming that Rep. Act No. 8974 is applicable to said expropriation
proceedings:
a. What are the effects, if any, of Rep. Act No. 8974 and its
implementing Rules on the Standards for the determination of
the provisional value and the final amount of just
compensation in the present case, including on the question of
whether the just compensation should be reckoned from the
date of the filing of the complaint since such date preceded the
date of the taking of the property in this case?
b. Is the 10% limit on the amount of just compensation for the
acquisition of right-of-way easements on lands or portions
thereof to be traversed by the transmission lines, as provided
for in Section 3-a(b) of Napocor's charter, still in effect in light
of the valuation standards provided for in Rep. Act No. 8974
and its implementing rules?

Not satisfied, petitioner filed an appeal with the Court of Appeals.

On 20 October 2004, the Court of Appeals rendered its
Decision12 holding petitioner liable to pay the full fair market value at
the time of actual taking, with interest at 6% per annum from 15 April
2002. To determine the actual valuation of the property, the Court of
Appeals ordered the RTC to appoint a new set of disinterested
commissioners.

Eminent domain "is the inherent power of a sovereign state to

appropriate private property to particular use to promote public
welfare."14 In the exercise of its power of eminent domain, just
compensation must be given to the property owner to satisfy the
requirements of Sec. 9, Art. III15 of the Constitution. Just
compensation is the fair market value of the property.16 Fair market
value is that "sum of money which a person desirous but not
compelled to buy, and an owner willing but not compelled to sell,

would agree on as a price to be given and received

therefor."17 Judicial determination is needed to arrive at the exact
amount due to the property owner.
The power to expropriate is legislative in character and must be
expressly conferred by statute. Under its charter, petitioner is vested
with the power of eminent domain.
The first aspect of the compensation issue is whether what should be
paid is the full fair market value of the property or a mere easement
fee. Petitioner relies on Sec. 3A18 of R.A. No. 6395, as amended,
which provides that only an easement fee equivalent to 10% of the
market value shall be paid to affected property owners. Based on this
amendatory provision, petitioner is willing to pay an easement fee of
10% for the easement of right-of-way it acquired for the installation of
power transmission lines.
As intimated in the Courts 2007 Resolution, the case at bar is further
complicated by the enactment of R.A. No. 8974 before the filing of the
expropriation complaint.

intended for national government infrastructure projects.21 The

Implementing
Rules and Regulations22 of R.A. No. 8974 explicitly include power
generation, transmission and distribution projects among the national
government projects covered by the law. There is no doubt that the
installation of transmission lines is important to the continued growth
of the country. Electricity moves our economy, it is a national concern.
R.A. No. 8974 should govern the expropriation of respondent's
property since the Lahar Project is a national government project.
Significantly, Gingoyon is explicit authority that R.A. No. 8974 applies
with respect to substantive matters covered by it to the exclusion of
Rule 67 in cases when expropriation is availed of for a national
government project. We noted in Gingoyon:
It is the plain intent of Rep. Act No. 8974 to supersede the system of
deposit under Rule 67 with the scheme of "immediate payment" in
cases involving national government infrastructure projects.
xxx

R.A. No. 8974,19 entitled "An Act To Facilitate The Acquisition Of

Right-Of-Way, Site Or Location For National Government
Infrastructure Projects And For Other Purposes," defines "national
government projects" as follows:
Sec. 2. National Government ProjectsThe term "national
government projects" shall refer to all national government
infrastructure, engineering works and service contracts, including
projects undertaken by government-owned and -controlled
corporations, all projects covered by Republic Act No. 6957, as
amended by Republic Act No. 7718, otherwise known as the BuildOperate-and-Transfer Law, and other related and necessary activities,
such as site acquisition, supply and/or installation of equipment and
materials, implementation, construction, completion, operation,
maintenance, improvement, repair and rehabilitation, regardless of
source of funding.
Petitioner expropriated respondents property for its Lahar Project, a
project for public use.20 In Republic v. Gingoyon (Gingoyon), we
observed that R.A. No. 8974 covers expropriation proceedings

It likewise bears noting that the appropriate standard of just

compensation is a substantive matter. It is well within the province of
the legislature to fix the standard, which it did through the enactment
of Rep. Act No. 8974. Specifically, this prescribes the new standards
in determining the amount of just compensation in expropriation cases
relating to national government infrastructure projects, as well
as the manner of payment thereof. At the same time, Section 14 of
the Implementing Rules recognizes the continued applicability of Rule
67 on procedural aspects when it provides "all matters regarding
defenses and objections to the complaint, issues on uncertain
ownership and conflicting claims, effects 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.23
The right of a property owner to receive just compensation prior to the
actual taking of the property by the State is a proprietary right which
Congress can legislate on.24 R.A. No. 8974 being applicable in this

case, the government agency involved must comply with the

guidelines set forth in Sec. 425 of R.A. No. 8974.
As earlier mentioned, Section 3A of R.A. No. 6395, as amended,
substantially provides that properties which will be traversed by
transmission lines will only be considered as easements and just
compensation for such right of way easement shall not exceed 10
percent of the market value.26 However, this Court has repeatedly
ruled that when petitioner takes private property to construct
transmission lines, it is liable to pay the full market value upon proper
determination by the courts.27
In National Power Corporation v. Manubay Agro-Industrial
Development Corporation,28 we held that the taking of property was
purely an easement of a right of way, but we nevertheless ruled that
the full market value should be paid instead of an easement
fee.29 This Court is mindful of the fact that the construction of the
transmission lines will definitely have limitations and will indefinitely
deprive the owners of the land of their normal use.
The presence of transmission lines undoubtedly restricts respondents
use of his property.1avvphi1 Petitioner is thus liable to pay respondent
the full market value of the property.
The second aspect of the compensation issue relates to the reckoning
date for the determination of just compensation. Petitioner contends
that the computation should be made as of 27 June 2001, the date
when it filed the expropriation complaint, as provided in Rule 67. We
agree.
Rule 67 clearly provides that the value of just compensation shall "be
determined as of the date of the taking of the property or the filing of
the complaint, whichever came first."30 In B.H. Berkenkotter & Co. v.
Court of Appeals, we held that:
It is settled that just compensation is to be ascertained as of the time
of the taking, which usually coincides with the commencement of the
expropriation proceedings. Where the institution of the action
precedes entry into the property, the just compensation is to be
ascertained as of the time of the filing of the complaint. 31 (emphasis
supplied)

Typically, the time of taking is contemporaneous with the time the

petition is filed. The general rule is what is provided for by Rule 67.
There are exceptionsgrave injustice to the property owner,32 the
taking did not have color of legal authority,33 the taking of the property
was not initially for expropriation34 and the owner will be given undue
increment advantages because of the expropriation.35 However, none
of these exceptions are present in the instant case.
Moreover, respondents reliance on the ruling in City of Cebu v.
Spouses Dedamo,36 is misplaced since the applicable law therein was
the Local Government Code which explicitly provides that the value of
just compensation shall be computed at the time of taking.37
Based on the foregoing, the reckoning date for the determination of
the amount of just compensation is 27 June 2001, the date when
petitioner filed its expropriation complaint.
As a final note, the function for determining just compensation
remains judicial in character. In Export Processing Zone Authority v.
Dulay,38 and National Power Corporation v. Purefoods,39 we ruled:
The determination of "just compensation" in eminent domain cases is
a judicial function. The executive department or legislature may make
the initial determinations but when a party claims a violation of the
guarantee in the Bill of Rights that private property may not be taken
for public use without just compensation, no statute, decree, or
executive order can mandate its own determination shall prevail over
the court's findings. Much less can the courts be precluded from
looking into the "just-ness" of the decreed compensation.40
Thus, the lower court must use the standards set forth in Sec. 541 of
R.A. No. 8974 to arrive at the amount of just compensation.
To recapitulate, R.A. No. 8974 applies to properties expropriated for
the installation of petitioners power transmission lines. Also, petitioner
is liable to pay the full amount of the fair market value and not merely
a 10 percent easement fee for the expropriated property. Likewise,
the value of the property should be reckoned as of 27 June 2001, the
date of the filing of the complaint in compliance with Rule 67. Lastly,
respondent failed to assign as error the Court of Appeals ruling
regarding
the
need
to
appoint
a
new
set
of
commissioners.42 However, even if respondent had assigned the

matter as error, it would still be denied since the conflicting appraisals

submitted by the commissioners were not both reckoned as of the
date of filing of the complaint. Thus, there is need to remand this case
in line with the appellate courts valid directive for the new set of
commissioners.
WHEREFORE the petition is partially GRANTED. The Decision of the
Court of Appeals is AFFIRMED insofar as it ordered petitioner to pay
the full amount of the fair market value of the property involved as just
compensation and is REVERSED insofar as it directed that such
compensation be computed as of the date of taking instead of earlier
which is the date of filing of the complaint. This case is REMANDED
to the trial court for the appointment of a new set of commissioners in
accordance with Sec. 8, Rule 67 of the Rules of Court and the
determination of just compensation in conformity with this Decision.
The Regional Trial Court of San Fernando City, Pampanga is directed
to conduct, complete and resolve the further proceedings with
deliberate dispatch.
SO ORDERED.
G.R. No. 67125 August 24 1990
PHILIPPINE VETERANS BANK EMPLOYEES UNION-NUBE,
DOMINGO C. LOPEZ, HERMAN B. PASILIAO FELIZARDO B.
SARAPAT, LADY LYDIA B. CORNISTA, ELIZABETH S. KARASIG,
EDUARDO C. NIEVERA, NORMAN T. BAYODA, REGINO V.
TAGUIAM, ROMULO G. GARCIA, MANUEL A. LAMAN, EDUARDO
SJ. BELMONTE, HERNANI B. LIWANAG, EDUARDO P. CRUZ,
DANILO N. MENDOZA, ELSA J. SILVERIO, REGINO V. TAGUIAM,
JR., ALBERT G. MALAPIT, MANUEL B. GARCIA, and the Bank
Employees listed in Annex "A" of this Petition, petitioners,
vs.
THE PHILIPPINE VETERANS BANK Now renamed PHILIPPINE
MILITARY AND VETERANS BANK, GENERAL FABIAN VER in his
capacity as Chairman of the Board of Directors of the Philippine
Veterans Bank, and of the Board of Trustees of the Armed
Forces of the Philippines Retirement and Separation Benefits
System, and RAFAEL ARNALDO in his capacity as President of
the Philippine Veterans Bank,respondents.

G.R. No. 82337 August 24,1990

SIMEON C. MEDALLA, GREGORIO VENTURANZA, JOSE P.
JUANILLO, RAMON P. MIRANDA, ENRIQUE H.R. ABILA, PEDRO
ACIERTO, SILVINO AGUDO, SANTIAGO FERNANDEZ, JUAN P.
ROSETE, MAXIMO G. AQUINO, GREGORIO C. DARROLES,
ISMAEL T. ESPIRITU, ERNESTO Y. GUEVARRA, MARIANO F.
INFANTE, VENERANDO E. MANZO, VICENTE G. VILLADOLID,
GUILLERMO
A.
CRUZ,
JORGE
MARIANO,
PASCUAL
SARMIENTO, RAMON P. MENDOZA, PEDRO GABRIEL, ANTONIO
A. LIM, MIGUEL T. MARCOS, TOMAS T. NUFABLE, MARIANO
ORTIZ, DOMINGO C. OCTAVO, MANUEL R. RAMOS, LEONCIO
MANALO, DAYAN S. MAMACO, CORNELIO D. CAUNAR, MAURO
DE LA CRUZ, FIDEL T. VIZMANOS, FELIPE L. VICENCIO,
DAMIAN S. VITO CRUZ, JUAN LOMBREDAS, MARINA BAUTISTA,
SEGUNDO M. ROSALES, CECLONDO CIEGO, CECILIO
MIRANDA, FERNANDO APOSTOL, ANICETO R. NARCA, CARLOS
B. LASMARIAS, RICARTE G. REYES, P.D. DELLOSON, LORETO
BANTONIO ERNESTO D. LLAGUNO, CONSTANCIO SEBASTIAN,
ELEUTERIO R. VALENZUELA, ISIDRO A. BATHAN, LEON G.
NOLLIDO, in representation of the remainder of the 510,000
veterans or their heirs, as defined in R.A. 3518, and the
PHILIPPINE
VETERANS
BANK,
petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, LIQUIDATOR OF THE
PHILIPPINE VETERANS BANK, THE LIQUIDATION COURT (RTC,
BRANCH 39, MANILA), SECRETARY OF THE BUDGET and THE
NATIONAL TREASURER, respondents.

CRUZ, J.:
The Philippine Veterans Bank was created in 1963 with the hope that
it would ensure the economic future and perhaps even prosperity of
the hundreds of thousands of war veterans who were to be its
stockholders. For a while the vision grew, but in time it dimmed and
finally faded as the Bank found itself enmeshed in financial difficulties
that threatened its very survival. Now the dream is in tatters. Efforts
are at present being taken to piece together its severed sinews but it
is doubtful if the Bank will ever be whole again.

I
The trouble began when on April 10, 1983, the Bank was placed
under receivership by virtue of Resolution No. 334 of the Monetary
Board of the Central Bank. The reason was the precarious condition
of the Bank. A year later, on April 26, 1984, the Philippine Veterans
Bank Employees Union questioned the retrenchment and
reorganization program of the Bank and, on the ground of security of
tenure, prayed that the said program be prohibited. In its petition,
which was docketed as G.R. No. 67125, the Union also asked for a
temporary restraining order, which was issued on May 9, 1984.
Subsequently, while the case was pending, the Monetary Board
ordered the liquidation of the Bank by Resolution No. 612 dated June
7, 1985, after finding that the Bank had incurred an outstanding
liability of P540,835,860.79. This order was opposed by the Union in a
supplemental petition for prohibition with preliminary injunction filed on
September 25, 1985. On November 26,1985, the Veterans Federation
of the Philippines entered the picture and filed with leave of court a
petition in intervention which, besides echoing the original petition in
opposing the liquidation, asserted the additional claim that it was in
the process of formulating plans for the rehabilitation and eventual
expansion of the Bank. This was followed by an ancillary petition for
the immediate payment of the wage or salary increase ordered by the
NLRC in its resolution dated September 17,1985. On March 26,1987,
a writ of preliminary injunction was issued by this Court reading as
follows:

their own right and "on behalf of the remaining 510,000 World War II
veterans or their heirs." It sought inter alia a judicial declaration that
the petitioners were entitled to the ownership, possession and control
of the Bank and an order restraining the Central Bank from disposing
of the assets of the Bank or making any disbursements therefrom
except for ordinary administrative expenses and for the payment of
accrued wages and other benefits of personnel as approved by the
liquidator court. This petition was docketed as G.R. No. 82337 and
consolidated with G.R. No. 67125.
Earlier, on June 11, 1987, then Judge Abelardo M. Dayrit of the
Regional Trial Court of Manila had ordered the payment of the claims
of the employees amounting to P37,920,310.82. This was followed on
October 21, 1988, by another order issued by the same court for the
payment of retirement benefits to two former board members of the
Bank, namely, Agustin Marking and Jaime S. Mejia. Upon the
representations of the petitioners, however, we prevented
enforcement of this order with our temporary restraining order dated
January 12, 1989.
On December 15, 1988, the writ of preliminary injunction dated March
26,1987, was amended "to exclude from its coverage the sale or
disposal by the Central Bank or the Bank Liquidator of the acquired
assets of the PVB." This was done in response to petitions filed by
several persons seeking to redeem or repurchase the properties
which had earlier been purchased by the Bank through foreclosure
sales. 1

NOW THEREFORE, effective immediately and until further orders

from this Court, you (Respondent Central Bank of the Philippines, and
PVB Liquidator), your agents, representatives, and/or any person or
persons acting upon your orders or in your place or stead, are hereby
ENJOINED from liquidating the Phil. Veterans Bank and from taking
or pursuing any act or transaction in pursuance of such liquidation,
including sales or other disposal of properties of whatever kind, or
disbursing PVB funds, except those incurred in the course of ordinary
administration of the affairs of the bank, including payment of accrued
and unpaid claims of PVB Employees under the 1982-1985 CBA, all
of which should be subject to the prior approval of the respondent
liquidation court.

On August 25, 1989, another ancillary petition was filed for the
immediate payment of backwages of the Bank personnel on the
regular payroll as of June 1985 equivalent to five months' gross
salary. On May 25, 1990, the City Government of Davao filed a
motion to lift the preliminary injunction dated March 26, 1987, with
respect to its deposit of P3,700,000, which it wanted to withdraw to
finance several programs and projects. And on June 11, 1990,
Dolores V. Molina filed her own motion to withdraw her deposit of
P1,l00,000.00.

On March 18,1988, an original petition for restitution and for

extraordinary and equitable writs was filed by Simeon Medalla et al. in

The Court has purposely delayed resolution of these cases in the

hope that it would not be necessary to do so in view of the efforts

II

being taken by the Executive Department for the rehabilitation of the

Bank. The agency in charge of this matter is the Special Presidential
Committee on the Philippine Veterans Bank, which was created by
Adm. Order No. 29 dated July 10, 1987, and renewed by Adm. Order
No. 62 dated February 23, 1988 and by Adm. Order No. 90 dated
September 2, 1988, to study the financial condition of the Bank and
determine the feasibility of its rehabilitation. However, although we
may assume that the Committee has been assiduously pursuing its
objectives and while there are optimistic statements every now and
then that the Bank will be reopening soon, that prospect does not
really seem to be in sight yet. We have therefore decided to finally
resolve these cases, applying a judicial solution which, when all is
said and done, will still be less acceptable than a practical
administrative settlement.
III
The basic issue in these petitions is whether the Central Bank has the
power to liquidate the Philippine Veterans Bank.
The petitioners dispute this authority. In G.R. No. 67125, they claim
that as the Bank was created by a special law, a contractual
relationship now exists between the Government and the stockholders
of the Bank that cannot be disturbed without violation of the
impairment clause. The acceptance of the benefits of that law by the
petitioners had conferred a vested right on them that cannot now be
withdrawn without their consent as this would constitute a deprivation
of their property without due process of law. Assuming that such
benefits could be validly revoked, this cannot be done by the Central
Bank only but by the legislature itself which conferred the franchise on
the Bank in the first place. Moreover, the Central Bank cannot
exercise any authority over the Bank because the latter is itself also a
government bank with the same status as the Development Bank of
the Philippines, the Land Bank of the Philippines, and the Philippine
National Bank. The Central Bank has no control over these
government lending institutions.
We sustain the position of the respondents that these arguments are
not well-taken.
The mere fact that the Bank was created by special law does not
confer upon it extraordinary privileges over and above those granted

similar charters like the Development Bank of the Philippines and the
Land Bank of the Philippines. As a lending institution, it is part of the
banking system and therefore covered by the regulatory power
exercised over such entities by the Central Bank. Such authority is
expressly provided for in the Central Bank Act, as follows:
Sec. 25. Creation of the appropriate departments. In
order to assure the observance of this Act and of other
pertinent laws, and of the rules and regulations of the
Monetary Board, the Central Bank shall have
appropriate supervising and examining departments
which shall be charged with the supervision and
periodic or special examinations of banking institutions
operating in the Philippines, including all Government
credit institutions, including their subsidiaries and
affiliates of non-bank financial intermediaries, and
subsidiaries and affiliates of non-bank financial
intermediaries performing quasi-banking functions: . . .
The supervising and/or examining departments shall
discharge their responsibilities in accordance with the
instructions of the Monetary Board.
The department heads and the examiners of the
supervising and/or examining departments are hereby
authorized to administer oaths to any director, officer,
or employee of any institution under their respective
supervision or subject to their examination and to
compel the presentation of all books, documents,
papers or records necessary in their judgment to
ascertain the facts relative to the true condition of any
institution as well as the books and records of persons
and entities relative to or in connection with the
operations, activities or transactions of the institution
under examination.
No restraining order or injunction shall be issued by the
court enjoining the Central Bank from examining any
institution subject to supervision or examination by the
Central Bank, unless there is convincing proof that the
action of the Central Bank is plainly arbitrary and made
in bad faith and the petitioner or plaintiff files with the
clerk or judge of the court in which the action is

pending a bond executed, in favor of the Central Bank,

in an amount to be fixed by the court. The restraining
order or injunction shall be refused or, if granted, shall
be dissolved upon filing by the Central Bank of a bond,
which shall be in the form of cash or Central Bank
cashier's check, in an amount twice the amount of the
bond of the petitioner or plaintiff conditioned that it will
pay the damages which the petitioner or plaintiff may
suffer by the refusal or the dissolution of the injunction.
The provisions of Rule 58 of the New Rules of Court
insofar as they are applicable and not inconsistent with
the provisions of this Section shall govern the issuance
and dissolution of the restraining order or injunction
contemplated in this Section.
SEC. 25-A. The department heads and the
examiners of the supervising and examining
departments, in the conduct of the periodic or special
examination of banking institutions may be specifically
authorized by the Monetary Board to examine, inquire
or look into all deposits of whatever nature with
banking institutions in the Philippines including
investments in debt instruments issued by the
Government of the Philippines, its political subdivisions
and its instrumentalities, after being satisfied that there
is reasonable ground to believe that a bank fraud or
serious irregularity has been or is being committed and
that it is necessary to look into the deposit to establish
such fraud or irregularity.
SEC. 28. Examination and fees. It shall be the duty
of the head of the appropriate supervising and
examining department, personally or by deputy, at
least once in every twelve months, and at such other
times as either he or the Monetary Board may deem
expedient, to make an examination of the books of
every banking institution within the purview of this Act
and make a report on the same to the Monetary Board.
Every such institution shall afford to the head of the
appropriate supervising and examining departments
and to his authorized deputies full opportunity to

examine its books, cash and available assets and

general condition at any time when requested so to do
by the Central Bank: Provided, however, That none of
the reports and other papers relative to such
examinations shall be open to inspection by the public
except insofar as such publicity is incidental to the
proceeding hereinafter authorized or is necessary for
the prosecution of violations n connection with the
business of such institutions. . . .
SEC. 28-A. Appointment of conservator. Whenever,
on the basis of a report submitted by the appropriate
supervising or examining department, the Monetary
Board finds that a bank or a non-bank financial
intermediary performing quasi-banking functions is in a
state of continuing inability or unwillingness to maintain
a condition of liquidity deemed adequate to protect the
interest of depositors and creditors, the Monetary
Board may appoint a conservator to take charge of the
assets, liabilities, and the management of that
institution, collect all monies and debts due said
institution and exercise all powers necessary to
preserve the assets of the institution, reorganize the
management thereof, and restore its viability. He shall
have the power to overrule or revoke the actions of the
previous management and board of directors of the
bank or non-bank financial intermediary performing
quasi-banking functions, any provision of law to the
contrary notwithstanding, and such other powers as the
Monetary Board shall deem necessary.
As much as practicable, the conservator should not be
connected with the Central Bank but should be
competent and knowledgeable in bank operations and
management. . . . He shall report and be responsible to
the Monetary Board until such time as the Monetary
Board is satisfied that the institution can continue to
operate on its own and the conservatorship is no
longer necessary. The conservatorship shall likewise
be terminated should the Monetary Board, on the basis
of the report of the conservator or of its own findings,
determine that the continuance in business of the

institution would involve probable loss to its depositors

or creditors, in which case the provision of Section 29
shall apply.
SEC. 29. Proceedings upon insolvency. Whenever,
upon examination by the head of the appropriate
supervising or examining department or his examiners
or agents into the condition of any bank or non-bank
financial intermediary performing quasi-banking
functions, it shall be disclosed that the condition of the
same is one of insolvency, or that its continuance in
business would involve probable loss to its depositors
or creditors, it shall be the duty of the department head
concerned forthwith, in writing, to inform the Monetary
Board of the facts. The Board may, upon finding the
statements of the department head to be true, forbid
the institution to do business in the Philippines and
designate an official of the Central Bank or a person of
recognized competence in banking or finance as
receiver to immediately take charge of its assets and
liabilities, as expeditiously as possible collect and
gather all the assets and administer the same for the
benefit of its creditors, and represent the bank
personally or through counsel as he may retain in all
actions or proceedings for or against the institution,
exercising all the powers necessary for these purposes
including, but not limited to, bringing and foreclosing
mortgages in the name of the bank or non-bank
financial intermediary performing quasi-banking
functions.
The Monetary Board shall thereupon determine within
sixty days whether the institution may be recognized or
otherwise placed in such a condition so that it may be
permitted to resume business with safety to its
depositors and creditors and the general public and
shall prescribe the conditions under which such
resumption of business shall take place as well as the
time for fulfillment of such conditions. In such case, the
expenses and fees in the collection and administration
of the assets of the institution shall be determined by

the Board and shall be paid to the Central Bank out of

the assets of such institution.
If the Monetary Board shall determine and confirm
within the said period that the bank or non-bank
financial intermediary performing quasi-banking
functions is insolvent or cannot resume business with
safety to its depositors, creditors and the general
public, it shall, if the public interest requires, order its
liquidation, indicate the manner of its liquidation and
approve a liquidation plan which may, when warranted,
involve disposition of any or all assets in consideration
for the assumption of equivalent liabilities. The
liquidator designated as hereunder provided shall, by
the Solicitor General, file a petition in the regional trial
court reciting the proceedings which have been taken
and praying the assistance of the court in the
liquidation of such institution. The court shall have
jurisdiction in the same proceedings to assist in the
adjudication of the disputed claims against the bank or
non-bank financial intermediary performing quasibanking functions and in the enforcement of individual
liabilities of the stockholders and do all that is
necessary to preserve the assets of such institution
and to implement the liquidation plan approved by the
Monetary Board. The Monetary Board shall designate
an official of the Central Bank or a person of
recognized competence in banking or finance, as
liquidator who shall take over and continue the
functions of the receiver previously appointed by the
Monetary Board under this Section. The liquidator
shall, with all convenient speed, convert the assets of
the banking institution or non-bank financial
intermediary performing quasi-banking functions to
money or sell, assign or otherwise dispose of the same
to creditors and other parties for the purpose of paying
the debts of such institution and he may, in the name of
the bank or non-bank financial intermediary performing
quasi- banking functions and with the assistance of
counsel as he may retain, institute such actions as may
be necessary in the appropriate court to collect and
recover accounts and assets of such institution or

defend any action filed against the institution: Provided,

however, That after having reasonably established all
claims against the institution, the liquidator may, with
the approval of the court, effect partial payments of
such claims for assets of the institution in accordance
with their legal priority.
The assets of an institution under receivership or
liquidation shall be deemed in custodia legis in the
hands of the receiver or liquidator and shall, from the
moment of such receivership or liquidation, be exempt
from any order of garnishment, levy, attachment, or
execution.
The provisions of any law to the contrary
notwithstanding, the actions of the Monetary Board
under this Section, Section 28-A, and the second
paragraph of Section 34 of this Act shall be final and
executory, and can be set aside by a court only if there
is convincing proof, after hearing, that the action is
plainly arbitrary and made in bad faith: Provided, That
the same is raised in an appropriate pleading filed by
the stockholders of record representing the majority of
the capital stock within ten (10) days from the date the
receiver takes charge of the assets and liabilities of the
bank or non-bank financial intermediary performing
quasi-banking functions or, in case of conservatorship
or liquidation, within ten (10) days from receipt of notice
by the said majority stockholders of said bank or nonbank financial intermediary of the order of its
placement under conservatorship or liquidation. No
restraining order or injunction shall be issued by any
court enjoining the Central Bank from implementing its
actions under this Section and the second paragraph of
Section 34 of this Act in the absence of any convincing
proof that the action of the Monetary Board is plainly
arbitrary and made in bad faith and the petitioner or
plaintiff files a bond, executed in favor of the Central
Bank, in an amount to be fixed by the court. The
restraining order or injunction shall be refused or, if
granted, shall be dissolved upon filing by the Central
Bank of a bond, which shall be in the form of cash or

Central Bank cashier's check, in an amount twice the

amount of the bond of the petitioner or plaintiff
conditioned that it will pay the damages which the
petitioner or plaintiff may suffer by the refusal or the
dissolution of the injunction. The provisions of Rule 58
of the New Rules of Court insofar as they are
applicable and not inconsistent with the provisions of
this Section shall govern the issuance and dissolution
of the restraining order or injunction contemplated in
this Section.
Insolvency, under this Act, shall be understood to
mean that the realizable assets of a bank or a nonbank financial intermediary performing quasi-banking
functions as determined by the Central Bank are
insufficient to meet its liabilities.
The appointment of a conservator under Section 28-A
of this Act or the appointment of a receiver or liquidator
under this Section shall be vested exclusively with the
Monetary Board, the provision of any law, general or
special, to the contrary notwithstanding.
It is stressed that in Section 25 of the said Act, the Department of
Supervision and Examination is charged with the supervision and
periodic examination of all banking institutions operating in the
Philippines, including all government credit institutions. Assuming for
the moment that the Bank is owned or controlled by the government, it
is nevertheless not exempt from but in fact expressly placed under the
jurisdiction of the Central Bank.
More to the point, R.A. No. 3518 itself, which created the Philippine
Veterans Bank, provides in its Section 14 that the Bank shall be
subject to the authority of the Department of Supervision and
Examination.
The said Section 14 reads as follows:
Sec. 14. Inspection by Department of Supervision and
Examination of the Central Bank. The Veterans
Bank shall be subject to inspection by the Department
of Supervision and Examination of the Central Bank in

accordance with Republic Act Numbered Two hundred

sixty-five and Republic Act Numbered Three hundred
thirty-seven.

existing debts dollar for dollar in the current legal tender, as against
contracts calling for such payment in gold coin of specified weight and
fineness the decision stressed:

The purpose of these provisions is to enable the Central Bank, as the

entity charged with the responsibility of maintaining the stability of the
banking and monetary systems of the country, to take the necessary
steps against any banking institution whose continued operation may
cause prejudice to its depositors and creditors, and the general public
as well.

Contracts, however express, cannot fetter the

constitutional authority of the Congress. Contracts may
create rights of property, but when contracts deal with
a subject matter which lies within the control of the
Congress, they have a congenital infirmity. Parties
cannot remove their transactions from the reach of
dominant constitutional power by making contracts
about them.

Even if it be conceded that the charter of the Rank constitutes a

contract between the Government and the stockholders of the Bank, it
would not follow that the relationship cannot be altered without
violating the impairment clause. This is a too simplistic conclusion that
loses sight of the vulnerability of this "precious little clause," as it is
called, to the inherent powers of the State when the public interest
demands their exercise. The clause, according to Corwin, "is lately of
negligible importance, and might well be stricken from the
Constitution. For most practical purposes, in fact, it has been." 2
The undeniable fact is that the notion of public interest has made such
considerable inroads into the constitutional guaranty that one could
validly say now that it has become the exception rather than the rule.
The impact of the modern society upon hitherto private agreements
has left the clause in a shambles, as it were, making practically every
contract susceptible to change on behalf of the public. The modern
understanding is that the contract is protected by the guaranty only if it
does not affect public interest, but there is hardly any contract now
that does not somehow or other affect public interest as not to come
under the powers of the State. Part of that understanding therefore is
that, conversely, the contract may be altered validly if it involves the
public interest, to which private interests must "yield as a postulate of
the existing social order."
In the landmark case of Norman v. Baltimore, 3 the U.S. Supreme
Court stressed that every contract involving the public interest suffers
a congenital infirmity, and that is its susceptibility to change whenever
required by the public interest. The police power can be validly
asserted to make that change to meet any one of the several great
public needs, such as, in that case, regulation of the value of money.
In upholding a legislative enactment providing for the payment of

The need in the case at bar is no less compelling, to wit, the

preservation of the integrity and stability of our banking system.
Unless adequate and determined efforts are taken by the government
against distressed and mismanaged banks, public faith in the banking
system is certain to deteriorate to the prejudice of the national
economy itself, not to mention the losses suffered by the bank
depositors, creditors, and stockholders, who all deserve the protection
of the government. The government cannot simply cross its arms
while the assets of a bank are being depleted through
mismanagement or irregularities. It is the duty of the Central Bank in
such an event to step in and salvage the remaining resources of the
bank so that they may not continue to be dissipated or plundered by
those entrusted with their management.
The petitioners' argument that by accepting the stocks granted to
them by the law, the same have become their inalienable and
irrevocable property is clearly untenable. These stockholdings do not
enjoy any special immunity over and above shares of stock in any
other corporation, which are always subject to the vicissitudes of
business. Their value may appreciate or decline or the stocks may
become worthless altogether. Like any other property, they do not
have a fixed but a fluctuating price. Certainly, the mere acceptance of
these shares of stock by the petitioners did not create any legal
assurance from the Government that their original value would be
preserved and that the owners could not be deprived of such property
under any circumstance no matter how justified.
Nor is the charter subject to revocation only by the legislature, as the
petitioners also erroneously contend. The mere circumstance that the

charter was granted directly by Congress does not signify that only
Congress can modify or abrogate it by another enactment. In fact, the
charter itself says that the Bank shall be subject to regulation by the
Central Bank which is empowered inter alia, by express provision of
law, to order its liquidation. Also, by its own terms, the charter will
automatically becomefunctus officio after fifty years and the Bank
itself will cease to exist unless its life is extended by positive act of the
legislature. It may also be noted that quo warranto proceedings may
be filed against the Bank by the Solicitor General on behalf of the
Republic of the Philippines pursuant to the Rules of Court on any of
the grounds enumerated in Rule 66 thereof. All these can be done
without the necessity of direct legislative action and, no less
importantly, without violation of the legislative will.
There is also the practical difficulty of Congress itself decreeing
liquidation, presumably to be made after examination of the financial
condition of the Bank. In effect, the legislature, through its
corresponding appropriate committees, will be undertaking the
function purposely assigned by law to the Department of Examination
and Supervision of the Central Bank. This is an intricate administrative
function wisely entrusted by Congress to the said body, from which
the petitioners would now recall it for its direct exercise by the
lawmaking body. Such a procedure would bring us back to square
one, so to speak, and revoke the authority confided by Congress to
the Central Bank in recognition of its established expertise in the
regulation of banks.
Coming now to the ownership of the Bank, we find it is not a
government bank, as claimed by the petitioners. The fact is that under
Section 3(b) of its charter, while 51% of the capital stock of the Bank
was initially fully subscribed by the Republic of the Philippines for and
in behalf of the veterans, their widows, orphans or compulsory heirs,
the corresponding shares of stock were to be turned over within 5
years from the organization by the Bank to the said beneficiaries who
would thereafter have the right to vote such common shares. The
balance of about 49% was to be divided into preferred shares which
would be opened for subscription by any recognized veteran, widow,
orphans or compulsory heirs of said veteran at the rate of one
preferred share per veteran, on the condition that in case of failure of
any particular veteran to subscribe for any preferred share of stock so
offered to him within thirty (30) days from the date of receipt of notice,
said share of stock shall be available for subscription to other

veterans in accordance with such rules or regulations as may be

promulgated by the Board of Directors. Moreover, under Sec. 6(a), the
affairs of the Bank are managed by a board of directors composed of
eleven members, three of whom are ex officio members, with the
other eight being elected annually by the stockholders in the manner
prescribed by the Corporation Law. Significantly, Sec. 28 also
provides as follows:
Sec. 28. Articles of incorporation. This Act, upon its
approval, shall be deemed and accepted to all legal
intents and purposes as the statutory articles of
incorporation or Charter of the Philippine Veterans'
Bank; and that, notwithstanding the provisions of any
existing law to the contrary, said Bank shall be deemed
registered and duly authorized to do business and
operate as a commercial bank as of the date of
approval of this Act.
This point is important because the Constitution provides in its Article
IX-B, Section 2(1) that "the Civil Service embraces all branches,
subdivisions, instrumentalities, and agencies of the Government,
including government-owned or controlled corporations with original
charters." As the Bank is not owned or controlled by the Government
although it does have an original charter in the form of R.A. No. 3518,
it clearly does not fall under the Civil Service and should be regarded
as an ordinary commercial corporation. Section 28 of the said law so
provides. The consequence is that the relations of the Bank with its
employees should be governed by the labor laws, under which in fact
they have already been paid some of their claims.
Applying the Labor Code, the Court rules that the petitioners' claim for
back wages must be rejected. The reason is that the employees
making this claim have not been illegally dismissed but lawfully
separated as a result of the liquidation of the Bank on orders of higher
authority. This move was not the decision of the Bank; it was forced
upon it by the resolution of the Monetary Board of the Central Bank.
Back pay is awarded for work that could have been performed by the
employee except that he was prevented from doing so because of his
illegal dismissal by the employer. It is clearly not due in the case at
bar to the employees whose services were terminated as a result of
the forcible closure of the Bank.

As regards the claims of Marking and Mejia for the payment of their
retirement benefits, which we restrained temporarily on January 12,
1989, we find with the public respondents that such payment is in
order. We so hold, considering that although the said retirees are
members of the board of directors, they are nevertheless covered by
the Retirement Plan of the Bank per the following pertinent provisions:

preference as regards their unpaid wages and other

monetary claims, any provision of law to the contrary
notwithstanding. Such unpaid wages and monetary
claims shall be paid in full before the claims of the
Government
and
other
creditors
may
be
paid. (Amendments italicized).

Article II, Section 1. The following words and

phrases, as used herein shall have the meaning
indicated, unless a different meaning is plainly required
by the text:

Focusing now on G.R. No. 82337, the Court notes that the petitioners
therein are asking that the ownership and management of the Bank
be turned over to them in accordance with R.A. No. 3518. They point
out that the deficit incurred by the Bank when its liquidation was
ordered by the Central Bank in 1985 is not imputable to them and
suggest they can do better in rehabilitating the Bank, given the proper
support from the Government. For this reason, they ask the Court to
order inter alia the Central Bank to grant them the necessary loans
and other facilities, the Secretary of the Budget to certify as
appropriated the amount needed to fully pay all common and
preferred shares of the Bank, and the National Treasurer to release
such amounts to the Bank.

...
c) "Employee" means any person who is employed by
the Bank on a regular and permanent basis, including
officers; and such members of the Board of
Director and other hired workers not employed on a
regular and permanent basis but who, because of their
extended service, would qualify under the retirement
categories under Article IV hereof and who for
purposes of this Plan, shall be deemed employees.
Article III, Section 1 Eligibility at Effective Date
All employees as herein defined shall automatically be
eligible to participate in the Plan, as of its effective
date. (Emphasis supplied)
However, for purposes of the application of Article 110 of the Labor
Code, the said directors must be considered managerial employees,
or officers, and so not entitled to the preference of claims granted
thereunder to workers in general or the rank-and-file employees. The
claims of these workers must be accorded priority over all other
claims, including those of the said directors, and indeed even of the
Government itself." This provision, as amended by Republic Act No.
6715, reads as follows:
Article 110. Worker preference in case of bankruptcy.
In the event of bankruptcy or liquidation of an
employer's business, his workers shall enjoy first

We agree with the Solicitor General that there is a procedural flaw in

the petition, in thatThe Rules of Court, the Judiciary Reorganization Act of
1980 and the Interim Rules of Court quite clearly
delineate the jurisdiction of the Supreme Court in civil
cases as encompassing a review on appeal only on
questions of law as well as original petitions in certain
special civil actions like certiorari, prohibition and
mandamus.
The present petition does not come under any of the
above. Obviously, the petition is not an appeal from the
decision of any lower court or quasi-judicial body, as in
fact, the same is indeed an original petition for
restitution. Also, the present petition is certainly not one
for certiorari, prohibition or mandamus because there is
no tribunal, board or officer that has acted without or in
excess of jurisdiction or with grave abuse of discretion,
or has neglected the performance of an act which the
law enjoins as a duty, and from-whose acts or
negligence the petitioners were supposed to have been

aggrieved thereby. On the basis alone of jurisdiction,

the petition at bar should be dismissed.

restraining order dated January 21, 1989. Costs against the

petitioners.

A reading of the instant petition would show, however,

that the same partakes of the nature of mandamus
because it seeks judgment directing and commanding
the Secretary of Budget, the National Treasurer, the
CB, the Monetary Board and the PVB Liquidator to do
certain specific acts. Unfortunately, the facts hereof do
not present a case where such offices and officials are,
by law, mandated to do the adverted acts, even less,
that they have neglected to perform them.

SO ORDERED.

Moreover, from what has already been said of the power of the
Central Bank to regulate commercial banks, and to order their
liquidation whenever warranted, it would seem that the affairs of the
Bank are best entrusted to the liquidator court at this time rather than
managed directly by the petitioners. This is no reflection on their
competence and sincerity, not to mention their genuine concern for
the Bank, of which they are the intended beneficiaries and owners. It
is only that, considering the expertise of the Central Bank oh this
matter, and the familiarity of the liquidator court with the ramifications
of the problem at hand, we feel it is advisable that they be allowed, as
long as the administration has not yet adopted its own plans, to devise
the proper steps to relieve the Bank of its present difficulties.
III
The Court reiterates its hope that the administrative authorities may
still find a way to rehabilitate the Bank even at this late hour. This is
still possible even with this decision, for all we are saying here is that
the Central Bank has the power to liquidate the Bank under existing
laws and that, in the present circumstances, its liquidation may be
undertaken under the control of the liquidator court in accordance with
the procedure prescribed by R.A. No. 265 and the guidelines herein
laid down. Such rehabilitation may still be ordered by the President of
the Philippines if she sees fit, without violation of the import of this
decision or of the pertinent laws here interpreted and applied.
WHEREFORE, judgment is hereby rendered: (a) DISMISSING the
petitions in G.R. Nos. 67125 and 82337; and (b) LIFTING the writ of
preliminary injunction dated March 26, 1987, and the temporary

G.R. No. 101538 June 23, 1992

AUGUSTO BENEDICTO SANTOS III, represented by his father
and legal guardian, Augusto Benedicto Santos, petitioner,
vs.
NORTHWEST
ORIENT
AIRLINES
and
COURT
OF
APPEALS, respondents.

CRUZ, J.:
This case involves the Proper interpretation of Article 28(1) of the
Warsaw Convention, reading as follows:
Art. 28. (1) An action for damage must be brought at
the option of the plaintiff, in the territory of one of the
High Contracting Parties, either before the court of the
domicile of the carrier or of his principal place of
business, or where he has a place of business through
which the contract has been made, or before the court
at the place of destination.
The petitioner is a minor and a resident of the Philippines. Private
respondent Northwest Orient Airlines (NOA) is a foreign corporation
with principal office in Minnesota, U.S.A. and licensed to do business
and maintain a branch office in the Philippines.
On October 21, 1986, the petitioner purchased from NOA a round-trip
ticket in San Francisco. U.S.A., for his flight from San Francisco to
Manila via Tokyo and back. The scheduled departure date from Tokyo
was December 20, 1986. No date was specified for his return to San
Francisco. 1
On December 19, 1986, the petitioner checked in at the NOA counter
in the San Francisco airport for his scheduled departure to Manila.

Despite a previous confirmation and re-confirmation, he was informed

that he had no reservation for his flight from Tokyo to Manila. He
therefore had to be wait-listed.

On March 12, 1987, the petitioner sued NOA for damages in the
Regional Trial Court of Makati. On April 13, 1987, NOA moved to
dismiss the complaint on the ground of lack of jurisdiction. Citing the
above-quoted article, it contended that the complaint could be
instituted only in the territory of one of the High Contracting Parties,
before:

A. The petitioner claims that the lower court erred in

not ruling that Article 28(1) of the Warsaw Convention
violates the constitutional guarantees of due process
and equal protection.

1. the court of the domicile of the carrier;

2. the court of its principal place of business;
3. the court where it has a place of business through
which the contract had been made;
4. the court of the place of destination.
The private respondent contended that the Philippines was not its
domicile nor was this its principal place of business. Neither was the
petitioner's ticket issued in this country nor was his destination Manila
but San Francisco in the United States.
On February 1, 1988, the lower court granted the motion and
dismissed the case. 2 The petitioner appealed to the Court of Appeals,
which affirmed the decision of the lower court. 3 On June 26, 1991,
the petitioner filed a motion for reconsideration, but the same was
denied. 4 The petitioner then came to this Court, raising substantially
the same issues it submitted in the Court of Appeals.
The assignment of errors may be grouped into two major issues, viz:
(1) the constitutionality of Article 28(1) of the Warsaw Convention; and
(2) the jurisdiction of Philippine courts over the case.
The petitioner also invokes Article 24 of the Civil Code on the
protection of minors.

THE ISSUE OF CONSTITUTIONALITY

The Republic of the Philippines is a party to the Convention for the

Unification of Certain Rules Relating to International Transportation by
Air, otherwise known as the Warsaw Convention. It took effect on
February 13, 1933. The Convention was concurred in by the Senate,
through its Resolution No. 19, on May 16, 1950. The Philippine
instrument of accession was signed by President Elpidio Quirino on
October 13, 1950, and was deposited with the Polish government on
November 9, 1950. The Convention became applicable to the
Philippines on February 9, 1951. On September 23, 1955, President
Ramon Magsaysay issued Proclamation No. 201, declaring our formal
adherence thereto. "to the end that the same and every article and
clause thereof may be observed and fulfilled in good faith by the
Republic of the Philippines and the citizens thereof." 5
The Convention is thus a treaty commitment voluntarily assumed by
the Philippine government and, as such, has the force and effect of
law in this country.
The petitioner contends that Article 28(1) cannot be applied in the
present case because it is unconstitutional. He argues that there is no
substantial distinction between a person who purchases a ticket in
Manila and a person who purchases his ticket in San Francisco. The
classification of the places in which actions for damages may be
brought is arbitrary and irrational and thus violates the due process
and equal protection clauses.
It is well-settled that courts will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites
of a judicial inquiry into such a question are first satisfied. Thus, there
must be an actual case or controversy involving a conflict of legal
rights susceptible of judicial determination; the constitutional question
must have been opportunely raised by the proper party; and the

resolution of the question is unavoidably necessary to the decision of

the case itself. 6

in the condition of the contracting parties that they could not have
foreseen at the time the treaty was concluded.

Courts generally avoid having to decide a constitutional question. This

attitude is based on the doctrine of separation of powers, which
enjoins upon the departments of the government a becoming respect
for each other's acts.

The Court notes in this connection the following observation made

in Day v. Trans World Airlines, Inc.: 8

The treaty which is the subject matter of this petition was a joint
legislative-executive act. The presumption is that it was first carefully
studied and determined to be constitutional before it was adopted and
given the force of law in this country.
The petitioner's allegations are not convincing enough to overcome
this presumption. Apparently, the Convention considered the four
places designated in Article 28 the most convenient forums for the
litigation of any claim that may arise between the airline and its
passenger, as distinguished from all other places. At any rate, we
agree with the respondent court that this case can be decided on
other grounds without the necessity of resolving the constitutional
issue.
B. The petitioner claims that the lower court erred in
not ruling that Art. 28(1) of the Warsaw Convention is
inapplicable because of a fundamental change in the
circumstances that served as its basis.
The petitioner goes at great lengths to show that the provisions in the
Convention were intended to protect airline companies under "the
conditions prevailing then and which have long ceased to exist." He
argues that in view of the significant developments in the airline
industry through the years, the treaty has become irrelevant. Hence,
to the extent that it has lost its basis for approval, it has become
unconstitutional.
The petitioner is invoking the doctrine of rebus sic stantibus.
According to Jessup, "this doctrine constitutes an attempt to formulate
a legal principle which would justify non-performance of a treaty
obligation if the conditions with relation to which the parties contracted
have changed so materially and so unexpectedly as to create a
situation in which the exaction of performance would be
unreasonable." 7 The key element of this doctrine is the vital change

The Warsaw drafters wished to create a system of

liability rules that would cover all the hazards of air
travel . . . The Warsaw delegates knew that, in the
years to come, civil aviation would change in ways that
they could not foresee. They wished to design a
system of air law that would be both durable and
flexible enough to keep pace with these changes . . .
The ever-changing needs of the system of civil aviation
can be served within the framework they created.
It is true that at the time the Warsaw Convention was drafted, the
airline industry was still in its infancy. However, that circumstance
alone is not sufficient justification for the rejection of the treaty at this
time. The changes recited by the petitioner were, realistically, not
entirely unforeseen although they were expected in a general sense
only. In fact, the Convention itself, anticipating such developments,
contains the following significant provision:
Article 41. Any High Contracting Party shall be entitled
not earlier than two years after the coming into force of
this convention to call for the assembling of a new
international conference in order to consider any
improvements which may be made in this convention.
To this end, it will communicate with the Government of
the French Republic which will take the necessary
measures to make preparations for such conference.
But the more important consideration is that the treaty has not been
rejected by the Philippine government. The doctrine of rebus sic
stantibus does not operate automatically to render the treaty
inoperative. There is a necessity for a formal act of rejection, usually
made by the head of State, with a statement of the reasons why
compliance with the treaty is no longer required.

In lieu thereof, the treaty may be denounced even without an

expressed justification for this action. Such denunciation is authorized
under its Article 39, viz:

II
THE ISSUE OF JURISDICTION.

Article 39. (1) Any one of the High Contracting Parties

may denounce this convention by a notification
addressed to the Government of the Republic of
Poland, which shall at once inform the Government of
each of the High Contracting Parties.

A. The petitioner claims that the lower court erred in

not ruling that Article 28(1) of the Warsaw Convention
is a rule merely of venue and was waived by defendant
when it did not move to dismiss on the ground of
improper venue.

(2) Denunciation shall take effect six months after the

notification of denunciation, and shall operate only as
regards the party which shall have proceeded to
denunciation.

By its own terms, the Convention applies to all international

transportation of persons performed by aircraft for hire.

Obviously. rejection of the treaty, whether on the ground of rebus sic

stantibus or pursuant to Article 39, is not a function of the courts but of
the other branches of government. This is a political act. The
conclusion and renunciation of treaties is the prerogative of the
political departments and may not be usurped by the judiciary. The
courts are concerned only with the interpretation and application of
laws and treaties in force and not with their wisdom or efficacy.
C. The petitioner claims that the lower court erred in
ruling that the plaintiff must sue in the United States,
because this would deny him the right to access to our
courts.
The petitioner alleges that the expenses and difficulties he will incur in
filing a suit in the United States would constitute a constructive denial
of his right to access to our courts for the protection of his rights. He
would consequently be deprived of this vital guaranty as embodied in
the Bill of Rights.
Obviously, the constitutional guaranty of access to courts refers only
to courts with appropriate jurisdiction as defined by law. It does not
mean that a person can go to any court for redress of his grievances
regardless of the nature or value of his claim. If the petitioner is barred
from filing his complaint before our courts, it is because they are not
vested with the appropriate jurisdiction under the Warsaw Convention,
which is part of the law of our land.

International transportation is defined in paragraph (2) of Article 1 as

follows:
(2) For the purposes of this convention, the expression
"international
transportation"
shall
mean
any
transportation in which, according to the contract made
by the parties, the place of departure and the place of
destination, whether or not there be a break in the
transportation or a transshipment, are situated [either]
within the territories of two High Contracting Parties . . .
Whether the transportation is "international" is determined by the
contract of the parties, which in the case of passengers is the ticket.
When the contract of carriage provides for the transportation of the
passenger between certain designated terminals "within the territories
of two High Contracting Parties," the provisions of the Convention
automatically apply and exclusively govern the rights and liabilities of
the airline and its passenger.
Since the flight involved in the case at bar is international, the same
being from the United States to the Philippines and back to the United
States, it is subject to the provisions of the Warsaw Convention,
including Article 28(1), which enumerates the four places where an
action for damages may be brought.
Whether Article 28(1) refers to jurisdiction or only to venue is a
question over which authorities are sharply divided. While the
petitioner cites several cases holding that Article 28(1) refers to venue

rather than jurisdiction, 9 there are later cases cited by the private
respondent supporting the conclusion that the provision is
jurisdictional. 10
Venue and jurisdiction are entirely distinct matters. Jurisdiction may
not be conferred by consent or waiver upon d court which otherwise
would have no jurisdiction over the subject-matter of an action; but the
venue of an action as fixed by statute may be changed by the consent
of the parties and an objection that the plaintiff brought his suit in the
wrong county may be waived by the failure of the defendant to make a
timely objection. In either case, the court may render a valid judgment.
Rules as to jurisdiction can never be left to the consent or agreement
of the parties, whether or not a prohibition exists against their
alteration. 11
A number of reasons tends to support the characterization of Article
28(1) as a jurisdiction and not a venue provision. First, the wording of
Article 32, which indicates the places where the action for damages
"must" be brought, underscores the mandatory nature of Article 28(1).
Second, this characterization is consistent with one of the objectives
of the Convention, which is to "regulate in a uniform manner the
conditions of international transportation by air." Third, the Convention
does not contain any provision prescribing rules of jurisdiction other
than Article 28(1), which means that the phrase "rules as to
jurisdiction" used in Article 32 must refer only to Article 28(1). In fact,
the last sentence of Article 32 specifically deals with the exclusive
enumeration in Article 28(1) as "jurisdictions," which, as such, cannot
be left to the will of the parties regardless of the time when the
damage occurred.
This issue was analyzed in the leading case of Smith v. Canadian
Pacific Airways, Ltd., 12 where it was held:
. . . Of more, but still incomplete, assistance is the
wording of Article 28(2), especially when considered in
the light of Article 32. Article 28(2) provides that
"questions of procedure shall be governed by the law
of the court to which the case is submitted" (Emphasis
supplied). Section (2) thus may be read to leave for
domestic decision questions regarding the suitability
and location of a particular Warsaw Convention case.

In other words, where the matter is governed by the Warsaw

Convention, jurisdiction takes on a dual concept. Jurisdiction in the
international sense must be established in accordance with Article
28(1) of the Warsaw Convention, following which the jurisdiction of a
particular court must be established pursuant to the applicable
domestic law. Only after the question of which court has jurisdiction is
determined will the issue of venue be taken up. This second question
shall be governed by the law of the court to which the case is
submitted.
The petitioner submits that since Article 32 states that the parties are
precluded "before the damages occurred" from amending the rules of
Article 28(1) as to the place where the action may be brought, it would
follow that the Warsaw Convention was not intended to preclude them
from doing so "after the damages occurred."
Article 32 provides:
Art. 32. Any clause contained in the contract and all
special agreements entered into before the damage
occurred by which the parties purport to infringe the
rules laid down by this convention, whether by deciding
the law to be applied, or by altering the rules as to
jurisdiction, shall be null and void. Nevertheless for the
transportation of goods, arbitration clauses shall be
allowed, subject to this convention, if the arbitration is
to take place within one of the jurisdictions referred to
in the first paragraph of Article 28.
His point is that since the requirements of Article 28(1) can be waived
"after the damages (shall have) occurred," the article should be
regarded as possessing the character of a "venue" and not of a
"jurisdiction" provision. Hence, in moving to dismiss on the ground of
lack of jurisdiction, the private respondent has waived improper venue
as a ground to dismiss.
The foregoing examination of Article 28(1) in relation to Article 32
does not support this conclusion. In any event, we agree that even
granting arguendo that Article 28(1) is a venue and not a jurisdictional
provision, dismissal of the case was still in order. The respondent
court was correct in affirming the ruling of the trial court on this matter,
thus:

Santos' claim that NOA waived venue as a ground of

its motion to dismiss is not correct. True it is that NOA
averred in its MOTION TO DISMISS that the ground
thereof is "the Court has no subject matter jurisdiction
to entertain the Complaint" which SANTOS considers
as equivalent to "lack of jurisdiction over the subject
matter . . ." However, the gist of NOA's argument in its
motion is that the Philippines is not the proper place
where SANTOS could file the action meaning that
the venue of the action is improperly laid. Even
assuming then that the specified ground of the motion
is erroneous, the fact is the proper ground of the
motion improper venue has been discussed
therein.
Waiver cannot be lightly inferred. In case of doubt, it must be resolved
in favor of non-waiver if there are special circumstances justifying this
conclusion, as in the petition at bar. As we observed in Javier vs.
Intermediate Court of Appeals: 13
Legally, of course, the lack of proper venue was
deemed waived by the petitioners when they failed to
invoke it in their original motion to dismiss. Even so,
the motivation of the private respondent should have
been taken into account by both the trial judge and the
respondent court in arriving at their decisions.
The petitioner also invokes KLM Royal Dutch Airlines v. RTC, 14 a
decision of our Court of Appeals, where it was held that Article 28(1)
is a venue provision. However, the private respondent avers that this
was in effect reversed by the case of Aranas v. United
Airlines, 15 where the same court held that Article 28(1) is a
jurisdictional provision. Neither of these cases is binding on this Court,
of course, nor was either of them appealed to us. Nevertheless, we
here express our own preference for the later case of Aranas insofar
as its pronouncements on jurisdiction conform to the judgment we
now make in this petition.
B. The petitioner claims that the lower court erred in
not ruling that under Article 28(1) of the Warsaw
Convention, this case was properly filed in the

Philippines, because Manila was the destination of the

plaintiff.
The Petitioner contends that the facts of this case are analogous to
those in Aanestad v. Air Canada. 16 In that case, Mrs. Silverberg
purchased a round-trip ticket from Montreal to Los Angeles and back
to Montreal. The date and time of departure were specified but not of
the return flight. The plane crashed while on route from Montreal to
Los Angeles, killing Mrs. Silverberg. Her administratrix filed an action
for damages against Air Canada in the U.S. District Court of
California. The defendant moved to dismiss for lack of jurisdiction but
the motion was denied thus:
. . . It is evident that the contract entered into between
Air Canada and Mrs. Silverberg as evidenced by the
ticket booklets and the Flight Coupon No. 1, was a
contract for Air Canada to carry Mrs. Silverberg to Los
Angeles on a certain flight, a certain time and a certain
class, but that the time for her to return remained
completely in her power. Coupon No. 2 was only a
continuing offer by Air Canada to give her a ticket to
return to Montreal between certain dates. . . .
The only conclusion that can be reached then, is that
"the place of destination" as used in the Warsaw
Convention is considered by both the Canadian C.T.C.
and the United States C.A.B. to describe at least two
"places of destination," viz., the "place of destination" of
a particular flight either an "outward destination" from
the "point of origin" or from the "outward point of
destination" to any place in Canada.
Thus the place of destination under Art. 28 and Art. 1
of the Warsaw Convention of the flight on which Mrs.
Silverberg was killed, was Los Angeles according to
the ticket, which was the contract between the parties
and the suit is properly filed in this Court which has
jurisdiction.
The Petitioner avers that the present case falls squarely under the
above ruling because the date and time of his return flight to San
Francisco were, as in the Aanestad case, also left open.

Consequently, Manila and not San Francisco should be considered

the petitioner's destination.
The private respondent for its part invokes the ruling in Butz v. British
Airways, 17 where the United States District Court (Eastern District of
Pennsylvania) said:
. . . Although the authorities which addressed this
precise issue are not extensive, both the cases and the
commentators are almost unanimous in concluding that
the "place of destination" referred to in the Warsaw
Convention "in a trip consisting of several parts . . . is
the ultimate destination that is accorded treaty
jurisdiction." . . .
But apart from that distinguishing feature, I cannot
agree with the Court's analysis in Aanestad; whether
the return portion of the ticket is characterized as an
option or a contract, the carrier was legally bound to
transport the passenger back to the place of origin
within the prescribed time and. the passenger for her
part agreed to pay the fare and, in fact, did pay the
fare. Thus there was mutuality of obligation and a
binding contract of carriage, The fact that the
passenger could forego her rights under the contract
does not make it any less a binding contract. Certainly,
if the parties did not contemplate the return leg of the
journey, the passenger would not have paid for it and
the carrier would not have issued a round trip ticket.
We agree with the latter case. The place of destination, within the
meaning of the Warsaw Convention, is determined by the terms of the
contract of carriage or, specifically in this case, the ticket between the
passenger and the carrier. Examination of the petitioner's ticket shows
that his ultimate destination is San Francisco. Although the date of the
return flight was left open, the contract of carriage between the parties
indicates that NOA was bound to transport the petitioner to San
Francisco from Manila. Manila should therefore be considered merely
an agreed stopping place and not the destination.
The petitioner submits that the Butz case could not have overruled the
Aanestad case because these decisions are from different

jurisdictions. But that is neither here nor there. In fact, neither of these
cases is controlling on this Court. If we have preferred the Butz case,
it is because, exercising our own freedom of choice, we have decided
that it represents the better, and correct, interpretation of Article 28(1).
Article 1(2) also draws a distinction between a "destination" and an
"agreed stopping place." It is the "destination" and not an "agreed
stopping place" that controls for purposes of ascertaining jurisdiction
under the Convention.
The contract is a single undivided operation, beginning with the place
of departure and ending with the ultimate destination. The use of the
singular in this expression indicates the understanding of the parties
to the Convention that every contract of carriage has one place of
departure and one place of destination. An intermediate place where
the carriage may be broken is not regarded as a "place of
destination."
C. The petitioner claims that the lower
not ruling that under Art. 28(1) of
Convention, this case was properly
Philippines because the defendant has
the Philippines.

court erred in
the Warsaw
filed in the
its domicile in

The petitioner argues that the Warsaw Convention was originally

written in French and that in interpreting its provisions, American
courts have taken the broad view that the French legal meaning must
govern. 18 In French, he says, the "domicile" of the carrier means
every place where it has a branch office.
The private respondent notes, however, that in Compagnie Nationale
Air France vs. Giliberto, 19 it was held:
The plaintiffs' first contention is that Air France is
domiciled in the United States. They say that the
domicile of a corporation includes any country where
the airline carries on its business on "a regular and
substantial basis," and that the United States qualifies
under such definition. The meaning of domicile cannot,
however, be so extended. The domicile of a
corporation is customarily regarded as the place where
it is incorporated, and the courts have given the

meaning to the term as it is used in article 28(1) of the

Convention. (See Smith v. Canadian Pacific Airways,
Ltd. (2d Cir. 1971), 452 F2d 798, 802; Nudo v. Societe
Anonyme Belge d' Exploitation de la Navigation
Aerienne Sabena Belgian World Airlines (E.D. pa.
1962). 207 F. Supp, 191; Karfunkel v. Compagnie
Nationale Air France (S.D.N.Y. 1977), 427 F. Suppl.
971, 974). Moreover, the structure of article 28(1),
viewed as a whole, is also incompatible with the
plaintiffs' claim. The article, in stating that places of
business are among the bases of the jurisdiction, sets
out two places where an action for damages may be
brought; the country where the carrier's principal place
of business is located, and the country in which it has a
place of business through which the particular contract
in question was made, that is, where the ticket was
bought, Adopting the plaintiffs' theory would at a
minimum blur these carefully drawn distinctions by
creating a third intermediate category. It would
obviously introduce uncertainty into litigation under the
article because of the necessity of having to determine,
and without standards or criteria, whether the amount
of business done by a carrier in a particular country
was "regular" and "substantial." The plaintiff's request
to adopt this basis of jurisdiction is in effect a request to
create a new jurisdictional standard for the Convention.
Furthermore, it was argued in another case 20 that:
. . . In arriving at an interpretation of a treaty whose
sole official language is French, are we bound to apply
French law? . . . We think this question and the
underlying choice of law issue warrant some
discussion
. . . We do not think this statement can be regarded as
a conclusion that internal French law is to be "applied"
in the choice of law sense, to determine the meaning
and scope of the Convention's terms. Of course,
French legal usage must be considered in arriving at
an accurate English translation of the French. But
when an accurate English translation is made and
agreed upon, as here, the inquiry into meaning does

not then revert to a quest for a past or present French

law to be "applied" for revelation of the proper scope of
the terms. It does not follow from the fact that the treaty
is written in French that in interpreting it, we are forever
chained to French law, either as it existed when the
treaty was written or in its present state of
development. There is no suggestion in the treaty that
French law was intended to govern the meaning of
Warsaw's terms, nor have we found any indication to
this effect in its legislative history or from our study of
its application and interpretation by other courts.
Indeed, analysis of the cases indicates that the courts,
in interpreting and applying the Warsaw Convention,
have, not considered themselves bound to apply
French law simply because the Convention is written in
French. . . .
We agree with these rulings.
Notably, the domicile of the carrier is only one of the places where the
complaint is allowed to be filed under Article 28(1). By specifying the
three other places, to wit, the principal place of business of the carrier,
its place of business where the contract was made, and the place of
destination, the article clearly meant that these three other places
were not comprehended in the term "domicile."
D. The petitioner claims that the lower court erred in
not ruling that Art. 28(1) of the Warsaw Convention
does not apply to actions based on tort.
The petitioner alleges that the gravamen of the complaint is that
private respondent acted arbitrarily and in bad faith, discriminated
against the petitioner, and committed a willful misconduct because it
canceled his confirmed reservation and gave his reserved seat to
someone who had no better right to it. In short. the private respondent
committed a tort.
Such allegation, he submits, removes the present case from the
coverage of the Warsaw Convention. He argues that in at least two
American cases, 21 it was held that Article 28(1) of the Warsaw
Convention does not apply if the action is based on tort.

This position is negated by Husserl v. Swiss Air Transport

Company, 22 where the article in question was interpreted thus:
. . . Assuming for the present that plaintiff's claim is
"covered" by Article 17, Article 24 clearly excludes any
relief not provided for in the Convention as modified by
the Montreal Agreement. It does not, however, limit the
kind of cause of action on which the relief may be
founded; rather it provides that any action based on the
injuries specified in Article 17 "however founded," i.e.,
regardless of the type of action on which relief is
founded, can only be brought subject to the conditions
and limitations established by the Warsaw System.
Presumably, the reason for the use of the phrase
"however founded," in two-fold: to accommodate all of
the multifarious bases on which a claim might be
founded in different countries, whether under code law
or common law, whether under contract or tort, etc.;
and to include all bases on which a claim seeking relief
for an injury might be founded in any one country. In
other words, if the injury occurs as described in Article
17, any relief available is subject to the conditions and
limitations established by the Warsaw System,
regardless of the particular cause of action which forms
the basis on which a plaintiff could seek
relief . . .
The private respondent correctly contends that the allegation of willful
misconduct resulting in a tort is insufficient to exclude the case from
the comprehension of the Warsaw Convention. The petitioner has
apparently misconstrued the import of Article 25(l) of the Convention,
which reads as follows:
Art. 25 (1). The carrier shall not be entitled to avail
himself of the provisions of this Convention which
exclude or limit his liability. if the damage is caused by
his willful misconduct or by such default on his part as,
in accordance with the law of the court to which the
case is submitted, is considered to be equivalent to
willful misconduct.

It is understood under this article that the court called upon to

determine the applicability of the limitation provision must first be
vested with the appropriate jurisdiction. Article 28(1) is the provision in
the Convention which defines that jurisdiction. Article 22 23 merely
fixes the monetary ceiling for the liability of the carrier in cases
covered by the Convention. If the carrier is indeed guilty of willful
misconduct, it can avail itself of the limitations set forth in this article.
But this can be done only if the action has first been commenced
properly under the rules on jurisdiction set forth in Article 28(1).
III
THE ISSUE OF PROTECTION TO MINORS
The petitioner calls our attention to Article 24 of the Civil Code, which
states:
Art. 24. In all contractual property or other relations,
when one of the parties is at a disadvantage on
account of his moral dependence, ignorance,
indigence, mental weakness, tender age or other
handicap, the courts must be vigilant for his protection.
Application of this article to the present case is misplaced. The above
provision assumes that the court is vested with jurisdiction to rule in
favor of the disadvantaged minor, As already explained, such
jurisdiction is absent in the case at bar.
CONCLUSION
A number of countries have signified their concern over the problem
of citizens being denied access to their own courts because of the
restrictive provision of Article 28(1) of the Warsaw Convention. Among
these is the United States, which has proposed an amendment that
would enable the passenger to sue in his own domicile if the carrier
does business in that jurisdiction. The reason for this proposal is
explained thus:
In the event a US citizen temporarily residing abroad
purchases a Rome to New York to Rome ticket on a
foreign air carrier which is generally subject to the

jurisdiction of the US, Article 28 would prevent that

person from suing the carrier in the US in a "Warsaw
Case" even though such a suit could be brought in the
absence of the Convention.
The proposal was incorporated in the Guatemala Protocol amending
the Warsaw Convention, which was adopted at Guatemala City on
March
8,
1971. 24 But it is still ineffective because it has not yet been ratified by
the required minimum number of contracting parties. Pending such
ratification, the petitioner will still have to file his complaint only in any
of the four places designated by Article 28(1) of the Warsaw
Convention.
The proposed amendment bolsters the ruling of this Court that a
citizen does not necessarily have the right to sue in his own courts
simply because the defendant airline has a place of business in his
country.
The Court can only sympathize with the petitioner, who must
prosecute his claims in the United States rather than in his own
country at least inconvenience. But we are unable to grant him the
relief he seeks because we are limited by the provisions of the
Warsaw Convention which continues to bind us. It may not be amiss
to observe at this point that the mere fact that he will have to litigate in
the American courts does not necessarily mean he will litigate in vain.
The judicial system of that country in known for its sense of fairness
and, generally, its strict adherence to the rule of law.
WHEREFORE, the petition is DENIED, with costs against the
petitioner. It is so ordered.